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Greetings from the Motor City!

Good day to everyone at the New York Auto Show media events. Wish I was there. Fortunately some events are still virtual, including the World Car Awards, livestreamed by my colleagues at Reuters Events.  (The Hyundai Ioniq 6 was the big winner.)

Let’s start with some good news: A double-digit jump in electric vehicle sales helped first quarter U.S. auto sales bounce up to an annual selling rate of nearly 15 million vehicles, according to Wards Intelligence. EV sales for March rose 28%, according to figures compiled by Autodata Corp’s Motor Intelligence.

But…bad news! Automakers could be running out of room to raise prices to offset the 2 million-vehicle drop in U.S. sales volumes from pre-pandemic years and high EV investment costs.

Indeed, it is a bumpy ride as today’s news from the World of Cars illustrates:

• GM’s CFO calls a top to U.S. vehicle price hikes
• Better EV batteries are just around the corner
• Tesla starts to feel the heat from rival EV brands

The Auto File will be taking Friday off along with the traders at the New York Stock Exchange. Happy Easter, Passover and Ramadan Kareem to all!

GM’s Profit Machine

General Motors CFO Paul Jacobson told investors that GM (and other U.S. automakers) have likely reached the limit on raising vehicle prices to offset the revenue hit from lower sales volumes and the cost burden of investments in electrification.

“We haven’t banked on getting more pricing from where we are right now,” Jacobson told a conference hosted by Bank of America auto analyst John Murphy. “We have to be more urgent around cost-cutting.”

That explains why GM was willing to spend $1 billion in the first quarter to persuade 5,000 salaried employees to take buyouts. The buyout program puts GM well on the way to achieving a goal of cutting $2 billion from operating costs this year and next, Jacobson said.

New vehicle prices are close to record levels – the average price of a new car or truck is above $47,000, and high interest rates are pushing less affluent and credit-challenged buyers out of the market, Cox Automotive analysts said in a recent presentation.

Automakers in the U.S. have the factories and people in place to sell 17 million vehicles a year – and they’re adding more as new EV factories go up. This year, however, forecasters expect sales could be 14 million to 15 million.

Automakers confront tough choices: Keep prices high, and start cutting production and staff to shrink operations to fit a smaller market, or try to boost volume by turning on the discounts. For now, Jacobson said, GM will lean toward maintaining higher prices. The big response to the buyout program means GM should not have to layoff more workers, he said.

A Mercedes EQS electric SUV

Sales of electric vehicles in the United States grew by 28% in March, largely because sales of EVs made by legacy automakers grew at roughly double the rate of Tesla’s U.S. deliveries, according to Motor Intelligence.

Tesla still had a dominant 72% share of the overall U.S. EV market in March, but that’s down 3 percentage points from a year ago. And in the top end of the EV segment, Tesla’s Model S and X are losing ground to newer premium EVs such as the Mercedes EQS sedan, Audi’s growing fleet of EVs, BMW’s i4 and i7, and more.

Meanwhile, the battle for second place among U.S. EV sellers is heating up. General Motors EVs, led by the Chevy Bolt, outsold Ford’s F-150 Lightning, Mach-E and electric transit van.

If there’s one thing automakers agree on, it’s that current EV battery technology has plenty of room for improvement.

Help is on the way, Reuters reports. A new generation of EV batteries with silicon anodes that charge faster and deliver increased driving range will start hitting the market by the middle of the decade. But…and there is always a “but” … it will take a decade for silicon anodes to replace current graphite technology, experts said.

Remember that Stooges classic, TV Eye? Iggy Pop could update it with a new title: Tesla Eye.

Germany is the latest country to warn Tesla and Tesla owners that the “sentry mode” which uses vehicle cameras to monitor the space around a parked Tesla could violate the privacy rights of people unwittingly recorded. The outward facing cameras on Teslas have caused trouble in other countries such as the Netherlands and China.

Ford said new U.S. government rules governing EV tax breaks will mean buyers of four of six Ford EVs and plug-in hybrids will get smaller tax credits after April 18. Only buyers of the F-150 Lightning and Lincoln Aviator Grand Touring will still qualify for a $7,500 tax credit, Ford said. Buyers of other Ford electrified vehicles will have to settle for $3,750 subsidies.

Stellantis showed off the production version of its electric Ram pickup truck ahead of the New York Auto Show, aiming to meet the auto industry challenge: Last out, best dressed.

The electric Ram – previewed in concept form at CES – will have up to 500 miles of driving range (with an optional 229-kWh battery pack) when it hits showrooms late next year. That’s more than the current F-150 Lightning or Chevy Silverado EV – and on a par with the 500-mile range Tesla is promising for the Cybertruck.

A jury said Tesla should pay $3.2 million to a Black former worker who won a racial discrimination case against the company. However, that award is substantially less than the $137 million awarded by a different jury, and the $15 million plaintiff Owen Diaz refused subsequently.

Americans spent a little less time commuting to work in 2021, according to new data from the U.S. Census Bureau, by way of the Department of Energy. Average commuting time in 2021 dipped to 26.8 minutes from 26.9 minutes in 2020. People whose pandemic “commutes” amounted to the time required to walk from the kitchen to the den dropped the average. Still, commutes were more than a minute shorter, on average, in 2010.

The EPA expanded its crackdown on makers of devices that defeat the emissions controls on diesel pickup trucks, often to produce the effect known as “rolling coal.” The agency on Monday announced consent orders with four businesses in East Peoria, Ill. The businesses will pay $600,000 in penalties. The  EPA last year resolved 24 civil cases involving diesel emissions defeat devices, which boost performance but also allow black soot and other pollutants to billow out of a truck’s tailpipe.

The United Auto Workers grew its ranks by 3% in 2022 to 383,000 members, new data showed. The union has had some success at organizing, including at an GM-LG Energy battery plant in Ohio. But its membership remains below 2020 levels and far below the peak of 1.5 million in 1979.

Lithia Motors is now the largest U.S. auto retail group by vehicles sold, knocking AutoNation Inc out of the top spot on the Automotive News list of the top 150 U.S. auto dealer chains. Lithia and CEO Bryan DeBoer have been aggressive acquirers as smaller, family-run auto dealers looked to cash out at a peak of dealership profitability.

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