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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

Can you believe it? We are just two days away from the end of the second quarter.

Remember just a few months ago when Elon Musk and nearly everyone else expected a recession in the United States and a rapid post-COVID rebound in China? Kudos to anyone who took the opposite side of that bet.

And how many of us predicted in January that by the end of June Tesla’s unique EV charging technology would be on a fast track to becoming the North American industry standard? Okay, maybe some folks did. But not the White House or any other major automaker.

So, with those fresh reminders of the virtues of humility in mind, let’s dive right into the news from the World of Cars. 

Today –

• • Tesla wins charging, loses share in China

  • The U.S. auto recession that isn’t happening

  • Lordstown Motors starts a new chapter.

Winning!

A little more than a month after signing up Ford to its Supercharger network and North American Charging Standard EV charging technology, Tesla’s system is on the fast track to become the standard for North American EV charging networks.

Volvo Cars is the latest rival automaker to sign on with the Tesla supercharger network and NACS plug and connector standard. Washington state and Texas have mandated the use of Tesla connectors if charging network operators want to participate in state subsidy programs.

J.D. Power in a forthcoming study says “when it comes to reliability, no other provider is even close to Tesla. Through the first quarter of this year, 21.6% of EV drivers visiting non-Telsa public charging stations were unable to charge their vehicle. Among Tesla drivers using the Tesla Supercharger network, that number falls to just 3.9%.”

The full benefit to Tesla of having rivals send customers to charge vehicles at its SuperCharger network, and adopt its hardware standard, will only become clear with time.

But Elon Musk’s decision to build a proprietary charging network at great cost, rather than wait for someone else to do the job, looks like a big win heading into Tesla’s second quarter delivery report and subsequent investor call next month.

Here’s a list of the automakers and charging equipment companies that have signed on to the Tesla NACS connector standard. With manufacturers representing 70% or so of U.S. EV sales now on board the Tesla NACS, attention turns to the holdouts, including the big European, Japanese and South Korean automakers competing in the North American market.

Stellantis said it will launch a new charging business unit to relieve charging anxiety (the successor to “range anxiety” as a reason for mainstream consumers to avoid EVs.) But Stellantis said it is still considering whether to join the Tesla charging ecosystem.

Another win for Tesla this week: S&P Global Mobility said more than two-thirds of Tesla owners who buy a new vehicle buy another Tesla. That’s a loyalty rate well above industry averages. Among the brands losing the most customers to Tesla, according to S&P’s Tom Libby: Honda and Toyota. (A link to the full S&P Global Mobility loyalty presentation is here.)

That said, Tesla has an escalating fight on its hands in China. The good news for Musk: Tesla sales in China appear to have hit a new record during the second quarter, Reuters reported Wednesday.

However, the Chinese EV market overall grew faster than Tesla, and Tesla’s share of the Chinese EV market will likely shrink to 13.7% from 16% in Q1, according to Merchants Bank International Securities.

Today’s U.S. auto market outlook in one chart.

Cox Automotive boosted its forecast for U.S. car and light truck sales this year to 15 million vehicles from 14.1 million vehicles earlier this year, reinforcing a narrative that worries about a U.S. auto industry recession are overdone.

“I am optimistic we will not have a recession, certainly not in calendar 2023,” Jonathan Smoke, chief economist for the auto industry big data company, said during a briefing Tuesday.

Smoke acknowledged that some of his colleagues at Cox and some heavyweight economists and market players are not as upbeat. The bull case requires looking past market indicators like the yield curve and focusing instead on the low unemployment rate, improving consumer sentiment and the continued willingness of affluent consumers to splash out for expensive trucks and SUVs.

Senior executives at Ford and GM said earlier this month they are encouraged by the strength of consumer demand in the face of rising loan rates and high prices.

Lear, a $23 billion a year seating supplier, told investors it expects full-year EBITDA to be $100 million ahead of earlier forecasts.

What could possibly go wrong? Gosh, who’s got the time to run down that list? A UAW strike this fall, a sudden spike in oil prices, a resurgence of inflation that forces the Fed to accelerate interest rate hikes……

Riding into the sunset?

Notch another casualty in the deflation of the electric vehicle SPAC bubble. Lordstown Motors filed for a Chapter 11 bankruptcy restructuring late Monday, and simultaneously sued shareholder and assembly partner Foxconn.

You can read Lordstown’s Chapter 11 filing here.

Lordstown accused Foxconn of improperly backing out of a deal to inject more capital to support the launch of the Lordstown Endurance electric pickup. Foxconn in turn said Lordstown failed to comply with the terms of the deal – among them, remaining eligible for listing on the NASDAQ.

The litigation and the bankruptcy restructuring will grind on. Auto industry watchers will focus on what Foxconn does now with the sizable former GM car assembly plant it acquired from Lordstown Motors in 2021.

Foxconn has lofty ambitions to transfer its success as an assembler of iPhones and other consumer tech hardware to the production of electric cars – including as many as 300,000 EVs annually from the Ohio factory. Foxconn needs a new high-volume, solvent client. Stay tuned.

Lucid CEO Peter Rawlinson told Reuters’ Nick Carey that a deal this week to sell his company’s EV technology to Aston-Martin will be the first of many such partnerships.

Lucid sees licensing components as a key part of its business, especially as it moves into higher-volume, lower-priced segments, Rawlinson said.

Lucid gets high marks for the efficiency of its EV powertrains, which boast among the highest driving ranges in the industry. But the company needs to crank up scale economies pronto. It is deeply unprofitable, and last month turned to its main shareholder, the Saudi sovereign wealth fund, for new capital as it struggles to ramp up production.

Operatives working for Nissan installed cameras at the home of former No. 2 executive Ashwani Gupta to monitor who came and went, Reuters reported Wednesday, citing people familiar with an internal report on the surveillance.

The report by U.S. law firm Davis, Polk and Wardwell does not determine whether the surveillance was illegal under Japanese law, or whether Gupta was made aware of the monitoring. Nissan’s board is investigating whether CEO Makoto Uchida ordered surveillance of Gupta amid a dispute over relations with partner Renault.

Nissan’s board this week endorsed Uchida with a new term.

Ford is cutting more jobs in the United States and Canada, the company confirmed following a report by the Wall Street Journal. The company may not be done shrinking even after these layoffs are executed. Ford said last month it expects to take up to $2 billion in restructuring charges, much of that to fund staff cuts. General Motors and Stellantis are also cutting staff jobs ahead of tough negotiations with the United Auto Workers, which represents U.S. factory workers.

Volkswagen cut production of EVs at a factory in Emden, Germany, sending its shares on a rollercoaster ride Tuesday and Wednesday. Analysts saw VW’s decision to throttle back production of new EV models as a warning sign that European EV demand is slowing down, just as a wave of new models and new brands are entering the market – the latest example being China’s Zeekr brand entering Sweden and Holland.

Former VW board member and Audi brand chief Rupert Stadler was ordered to pay a 1.1 million euro fine and given a suspended jail term for his role in the Dieselgate emissions cheating scandal.

Faraday Future extended its runway with a fresh $90 million in capital from existing investors. The struggling EV startup is trying to launch production of its FF91 luxury EV, and continues to look for funding.

Vietnamese auto assembler Thaco Auto, a unit of the Truong Hai conglomerate, could get new investment valuing the operation at $5 billion, sources told Reuters. Thaco assembles vehicles for brands such as BMW, Mini, Kia and Peugeot. Truong Hai is a property developer and one of Vietnam’s largest conglomerates.

GM will challenge Tesla in the home energy storage business with a line of new products designed to allow customers to store electricity and use their EVs as a reserve power source should the grid go down. Any similarity between GM’s new PowerBank system and Tesla’s Powerwall products is not a coincidence.

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