Autos

WASHINGTON — Audi of America, Kia and Porsche said buyers of its electric vehicles will lose access to federal tax credits of up to $7,500 once President Joe Biden signs a $430 billion climate, health and tax measure.

The legislation set to be approved by the US House of Representatives on Friday “will have consequential impact on our business and to our consumers,” Audi said.

The brand said only its plug-in hybrid models will retain its existing federal credit through the rest of the year.

The bill makes any electric vehicles assembled outside North America ineligible for tax credits, which has brought criticism from the European Union, South Korea and many automakers.

The bill does allow credits for customers with binding contracts for vehicles not yet delivered when Biden signs the legislation.

Kia said in a letter to its US dealers that the bill means all of its EV and

That maneuver, occurring around the industry, is putting even more financial pressure on Tier 1 companies as they deal with pricing pressures of their own, he said.

“We negotiate and we’re paying the difference,” D’Eramo said. “Most of the supply base is doing the same thing. We’re trying to work with our customers to make adjustments that are in line with the adjustments that we make with Tier 2s. That’s the fair way to do it.”

D’Eramo told an audience at an industry conference this month that several of his smaller European subsuppliers have recently gone bankrupt.

“I think every week we have a bankrupt subsupplier in Europe,” he said.

Suppliers are facing financial difficulties even as automakers report high profit margins and lower debt levels. Consulting firm AlixPartners estimates that automakers as a group reduced net debt by $103 billion, or about 11 percent, between 2020 and 2021, while

Alibaba Cloud and Deloitte China have teamed up to launch a facility that focuses on developing applications for the automotive sector. The new center looks to tap a market they say will be home to the world’s largest autonomous vehicle industry by 2035.

Called Deloitte-Alibaba Cloud Auto Industry Center, the new site will develop applications that include autonomous driving, smart manufacturing, and digital marketing, the two partners said in a joint statement Tuesday.

The center will be supported by Deloitte China’s automotive cloud services team that specializes in products and services that encompass digital supply chain, intelligent network connectivity, and cybersecurity. Alibaba’s cloud computing resources spanning artificial intelligence (AI) and networking will also be tapped.

The two companies added that their partnership would look to facilitate the automotive sector’s cloud deployment and digitalization efforts.

Citing Deloitte’s research, Deloitte China’s automotive industry lead Andy Zhou said China was projected to be

Higher transaction prices are “just taking some people out of the market,” Penske said.

In the US, vehicles that once sold at CarShop’s preferred price point of $20,000 became more costly to acquire, meaning their price tags had to move to $30,000 territory, Penske said. It considered lower-value vehicles — those between $8,000 and $12,000 — but decided those are wholesale vehicles, not ones to retail.

Sonic President Jeff Dyke said late last month that the retailer is seeing demand for vehicles up to 8 years old. It started to include such older vehicles in EchoPark’s inventory earlier this year after having difficulty securing 1- to 4-year-old vehicles.

Demand now has dropped for “a $640 monthly payment for pre-owned, and that’s what you’re getting when you’re selling a 1- to 4-year-old car right now,” Dyke said.

Though per-vehicle profitability at Lithia Motors dropped 11 percent in the second quarter, CEO

Potential gas freeze

A Russian gas supply freeze could also affect the industry in unpredictable ways, despite the best efforts of automakers to save energy or obtain it from other sources, Reimold said.

“The chain always breaks at the weakest link,” he said. “Some areas are particularly dependent on gas, such as glass production.”

Time and again in recent months, automakers have had to interrupt production or even shut it down completely due to a shortage of components.

Porsche delivered 145.860 vehicles to customers in 2022 in the first half of the year. This represents a decline of five percent compared to the same period last year.

The tense situation on the semiconductor market is compounded by planning problems due to the recent COVID-19 lockdowns in China and the consequences of the war in Ukraine.

Experts at the data service provider IHS Markit believe that German automakers alone will be

Compensation for supplier CEOs more than doubled from a year ago as boards rewarded them for steering the businesses through the pandemic and parts shortages. Mobility and technology companies, henceforth, were the only sector of the industry in which the median compensation package declined from a year ago. Having only three automaker CEOs on the list with two full years of tenure skewed the median compensation for that sector significantly higher.

The study looked at 49 automakers, suppliers and public retailers and calculated total compensation as the sum of the executive’s base salary, gains from stock option exercise, gains from the vesting of stock awards, cash bonus payouts, and other forms of compensation. Equilar’s survey includes the realized value of equity awards, which is why its numbers can differ from the total compensation reported in regulatory filings.

Musk earned nothing in 2020 using Equilar’s methodology because he had no base

While supplier issues were responsible for Lucid’s slow manufacturing ramp initially, Rawlinson said, the startup was unable to accelerate production once those shortages eased.

“As we attempted to push forward the rate, we found that our logistics constraints prevented us from scaling meaningfully this past quarter,” Rawlinson said. “For example, our ability to feed the parts through the line at the correct time and cadence.”

Lucid, which reported first-half production of 1,405 vehicles and deliveries of 1,039, has had to hold back Air inventory to correct quality issues, Rawlinson said. It has also had unplanned production shutdowns to fix logistics issues, he said.

But the company said it has identified the primary bottlenecks and is implementing solutions.

Lucid is bringing its logistics operation in-house, adding executives with deep experience, and restructuring its manufacturing operations so that it can scale to meet customer demand and quality expectations for a luxury marque.

‘Behave like my best friend’

CC Wei, CEO of the world’s biggest chipmaker, Taiwan Semiconductor Manufacturing, said he had never had an auto industry executive call him — until the shortage was desperate.

“In the past two years they call me and behave like my best friend,” he told a laughing crowd of TSMC partners and customers in Silicon Valley recently. One automaker called to urgently request 25 wafers, said Wei, who is used to fielding orders for 25,000 wafers. “No wonder you cannot get the support.”

Said Sam Fiorani, vice president of global vehicle forecasting at AFS: “It’s an arrogant industry. Sometimes it just bites them in the rear.”

Thomas Caulfield, GlobalFoundries chief executive, said the auto industry understands it can no longer leave the risk of building multibillion-dollar chip factories to chipmakers.

“You can’t have one element of the industry carry the water for the rest of the