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