Tesla believes it will end the year strong, Volkswagen is turning to new benefactors to spin off Porsche in the stock market, and automakers have finally begun to understand how the silicon business works. All that and more inside The morning shift for Friday, August 5, 2022.
1st gear: One tenth of 20 million
Tesla built a million cars at all of its factories last year. By 2030 they want to build 20 million. That honestly seems ridiculous, but CEO Elon Musk reckons that with 10 to 12 “gigafactories (it currently has five, and one of which only makes solar panels for home use), it can achieve that goal. It expects to hit 2 million by the end of this year, and it’s already shy of just 500,000. Out of Automotive News:
Total Tesla production in 2021 was just over 1 million vehicles, but Musk said Thursday the current production rate is 1.5 million vehicles from four factories: Fremont, California; Shanghai; Berlin-Brandenburg, Germany; and Austin, Texas.
“If everything goes according to plan, we will emerge from 2022 with an annual run rate of 2 million,” Musk said, adding that production at Tesla’s two newest factories in Germany and Texas is facing “10,000” small glitches that would be resolved. one after the other.”
Musk added that Tesla could announce a new Gigafactory location before the end of the year and that the Cybertruck will start production in mid-2023. Until then – assuming this time frame is correct – there will be one Choice of alternative battery electric pickups offered by every American brand. The Cybertruck will be popular because it’s a Tesla, but how will it perform qualitatively? At least that’s the question in my head.
2nd gear: The mythical Porsche IPO
Volkswagen really, really wants Porsche’s IPO to happen, but it was takes longer than expected. The company has reportedly approached government investments in the Middle East to facilitate things. Out of Bloomberg:
Porsche is looking to secure anchor investments from some of the Middle East’s largest sovereign wealth funds as the iconic sports car maker looks to pull off one of Europe’s biggest listings amid market headwinds and valuation concerns, people familiar with the matter said.
Abu Dhabi’s Mubadala Investment Co. and ADQ are among those considering providing funds for Volkswagen AG’s listing, according to the people, who asked not to be identified to discuss sensitive information. State-owned companies in other Gulf markets, including Saudi Arabia, are also considering investments, they said.
That’s getting a little desperate for Volkswagen, which has long publicized a desire to spin off Porsche but had to put the plan on hold late last year. At that time it was said on the street that the German car manufacturer was aiming for an IPO of 90 billion euros. This target appears to have been moderated along with the stock market slowdown:
Securing more major backers would be a vote of confidence as the German automaker looks to push a premium rating for Porsche. The state of Lower Saxony, another Volkswagen shareholder, and the controlling Porsche-Piech family are targeting a valuation of no less than 60 billion euros ($62 billion), the people said.
And investors still have many questions, notably how independent Porsche could ever be under such a scheme:
In early discussions with portfolio managers, the IPO was touted as an opportunity to invest in a company that combines top automotive rivals like Ferrari NV and luxury brands like Louis Vuitton. However, some investors are concerned about a listing structure that doesn’t make Porsche more independent from its parent company and headwinds in the IPO market, people familiar with the matter said earlier.
Last month’s decision to give Porsche CEO Oliver Blume responsibility for parent company Volkswagen also drew scrutiny from investors. In a Bernstein & Co. poll of 58 fund managers, 71% said Blume’s dual role was a clear negative for going public.
The plan seems less appealing to everyone by the day, but Volkswagen has evidently decided this is Porsche’s fate.
3rd gear: By the way…
July was far from a stellar month for auto sales in Germany as consumers bought 13 percent fewer vehicles compared to June. Automotive News Reports:
Electric car maker Tesla was the biggest monthly gainer with registrations up 142 percent and a 0.6 percent market share.
Total sales of battery electric vehicles increased by 13 percent to 28,815 with a 14 percent market share.
Other monthly gainers included Land Rover, up 62 percent; Dacia, up 24 percent; Seat up 9 percent; Porsche, up 5 percent; and Toyota by 3.9 percent.
German premium brands had a bad month, Mercedes-Benz lost 23 percent; BMW down 15 percent; and Audi by 7 percent.
The VW brand, the German market leader, saw registrations fall 20 percent, while Ford fell 30 percent and Opel’s volume fell 12 percent.
The year 2022 has so far seen the fewest new car registrations in Germany in the last three decades – even worse than the first seven months of the COVID 19 pandemic in 2020.
4th gear: Automakers cower in front of chipmakers
Global semiconductor shortages are easing — you can now buy a graphics card for nearly MSRP, for example — but automakers are understandably shocked. And even if shipments return to pre-2020 levels, the relationship between automakers and silicon suppliers isn’t declining, according to a revealing report courtesy of Reuters tell us:
CC Wei, chief executive of the world’s largest chipmaker Taiwan Semiconductor Manufacturing Co, said he had never had a call from an auto industry executive — until the shortage was desperate.
“For the past two years, they’ve been calling me and acting like my best friend,” he recently told a laughing crowd of TSMC partners and customers in Silicon Valley. An automaker called to urgently request 25 wafers, said Wei, who is used to taking orders for 25,000 wafers. “No wonder you can’t get the support.”
Thomas Caulfield, CEO of GlobalFoundries Inc, said the auto industry understands it can no longer leave the risk of building multibillion-dollar chip factories to chipmakers.
“You can’t let one element of the industry carry the water for the rest of the industry,” he told Reuters. “We will not provide capacity unless that customer commits to it and has ownership status in that capacity.”
use car companies older, custom components that are obsolete as far as the consumer electronics industry is concerned. Automakers are just one class of customers for manufacturers like TSMC, who also supply companies like Apple and Samsung.
At the same time, over the past decade, automakers have been desperate to rebrand themselves as tech companies in public, envious of Apple’s attention — and haven’t taken steps to actually do so will Technology companies and take a more hands-on approach to chip sourcing and production. The lack of supply chains has shown them where they stand. It seems they got it now.
“We understood that we are part of the semiconductor industry,” said Berthold Hellenthal, senior manager for semiconductor management at the Volkswagen Group. “We now have people who are just dedicated to strategic semiconductor management.”
5th gear: BMW hasn’t given up on hydrogen yet
The new class platform will form the basis for BMW’s electric future. But the automaker isn’t completely dismissing hydrogen fuel cell technology either, as the company’s CEO believes it’s still relevant in some markets. Out of Automotive News:
“In our view, hydrogen is the missing piece of the puzzle that can complement electric mobility where battery-electric powertrains are unable to gain a foothold,” Zipse said on the company’s conference call on Wednesday.
The first cars on the new class Platforms are due in 2025 and will initially include a similar-sized sedan to the 3-Series midsize car and a “sporty SUV,” Zipse said on the call. “We could also imagine a hydrogen drive for this new generation of vehicles,” he adds.
BMW will begin limited production of a hydrogen fuel cell version of the large X5 crossover called iX5 Hydrogen later this year. “We are already thinking about a possible next generation,” said Zipse.
There are arguments for hydrogen in the commercial sector. But with most hydrogen being made from fossil fuels anyway, and the never-ending struggle over infrastructure, the case never seems to get any more compelling.
Back: Before, they were literally gas lit
On this day 108 years ago someone said to himself “I think I can beat it” while staring at a light for the first time:
OK not Yes, really — the first traffic light was yellow deployed six years later. That’s when we really started tempting fate.
Neutral: What do I have to do?
… having the just unveiled Honda Fit RS in my life? (I know the answer to that question, and Unfortunately, the naturalization process for many countries is long and tedious.)