View in Browser

Sign up for Reuters newsletters

By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

It’s been strangely calm in Detroit. Maybe I am not the only one who had trouble getting back to work after the first official weekend of the summer vacation season. But some people are working hard, including Elon Musk, who is barnstorming China like a rock star.

Imagine Taylor Swift visiting Shanghai – if she ran the world’s most valuable automaker, a social media platform and a satellite launch company.

Beside’s Musk’s China trip, we have today –

• • The Model Y: Earth’s best-selling vehicle

  • A big deal in the truck market

  • France revs up in the battery race

Elon Musk and Chinese Foreign Minister Qin Gang

No kidding – the reception Elon Musk is getting in China is remarkable. Since arriving in China on Tuesday, Musk has landed meetings with three senior Chinese government officials and partied through a 16-course dinner with the CEO of CATL, China and the world’s biggest EV battery company. China’s social media is buzzing over the visit from “Brother Ma” – one of Musk’s nicknames in Tesla’s largest market.  

Musk is one of several U.S. company CEOs who’ve visited China in recent weeks for the first time since the COVID-19 pandemic began three years ago. Ford CEO Jim Farley and General Motors CEO Mary Barra made China trips, as did Apple Inc CEO Tim Cook. None of them got the star treatment accorded Musk.  

What do Musk and Chinese authorities have to talk about? How much time have you got?

China currently blocks free access to Twitter – Musk hasn’t posted to his own social media platform during his time in China. Beijing has expressed concern about Musk’s decision to let Ukraine’s military use his Starlink satellite communications system.

Don’t forget Musk’s role in the debate over artificial intelligence – a topic of high interest to China’s government.

China needs Musk, too. The celebrated billionaire is the ideal foreign investor to welcome at a sensitive moment for China’s economy, Breakingviews wrote. Chinese authorities are trying to counter concerns among Western companies that they will become collateral damage as U.S.-China relations sour. China’s foreign ministry quoted Musk as saying the U.S. and Chinese economies are like “conjoined twins.”

But let’s focus on Tesla – even if Chinese authorities don’t compartmentalize all of Musk’s many roles.

Musk wants China to allow Tesla to deploy its Full Self Driving automated driving technology. So far, that permission has not been forthcoming, even as Chinese automakers and tech companies roll out automated vehicles.

Tesla has applied to expand operations at its Shanghai factory. That requires government permission. Chinese authorities have banned Teslas from certain areas, citing concern about the data collected by their onboard cameras. That’s an issue Tesla doesn’t need while fending off increasingly robust competition from BYD and other Chinese brands.

What does Musk think? Watch his Twitter account – after his plane clears Chinese air space.

Tesla’s hot rod.

One more thing about Tesla and China: According to JATO Dynamics, the Tesla Model Y became the top-selling vehicle on the planet during the first quarter, knocking the Toyota Corolla out of the No. 1 spot.

Chinese consumers can take much of the credit for Tesla’s achievement. The Model Y’s sales win is not just a boost for Tesla’s corporate ego. Scale matters in the car business, and Tesla has scale economies few rivals – except China’s BYD – can match.

Daimler Truck CEO Martin Daum adds to his collection.

Daimler and Toyota will combine their respective Japanese commercial truck businesses – Mitsubishi Fuso and Hino. The consolidation is a response to the capital costs of shifting to electric or hydrogen powertrains.

The Fuso and Hino brands will soldier on in the marketplace, but the engineering and supply chains behind them will be combined for economies of scale.

Daimler’s CEO said the deal also helps the German truck maker reduce its dependence on China.

What’s it worth to Ford to plug into Tesla’s charging network and adopt Tesla’s charging plug standard?

Roughly $4.8 billion, according to investors. That’s how much Ford’s market cap has risen since the deal was announced on May 25, based on Refinitiv data.  Ford is now worth just over $50 billion, and is back in front of General Motors, which started today worth $46.4 billion.

Are there valid arguments that Ford may be giving away too much – future revenue opportunities, customer data – to get access to 12,000 Tesla fast chargers? No doubt – though Ford CEO Jim Farley addressed some of those concerns during a CNBC interview. But Wall Street likes the deal. That will force other automakers – and charging network operators – to have a think.

European EV battery venture Automotive Cells Co (ACC)  launched the first of four battery factories European and Asian companies plan for northern France.

European nations are encouraging battery investment, worried that China and the United States will dominate global EV battery production at the expense of EU jobs. More likely, Chinese battery makers and their suppliers will build operations in Europe to supply European EV producers.

Mercedes CEO Ola Kaellenius said his company will need eight battery giga factories globally to supply its needs as the Mercedes luxury car and van lineups go electric. Mercedes is an investor in ACC.

U.S. EV subsidies aren’t touched by the debt ceiling deal agreed between President Joe Biden and House Speaker Kevin McCarthy. But as a great man said, it ain’t over ’til it’s over.

Toyota said global sales rose in April, powered by demand for hybrid and gasoline cars in China and Japan.

Canada ponied up C$300 million to support a C$600 million battery materials processing operation planned by GM and South Korean partner POSCO.

Stellantis needs one or two more battery plants in North America to meet its needs for that market, CEO Carlos Tavares told Reuters. Stellantis has already announced plans for battery factories in Ontario and Indiana. Could another U.S. battery plant become a chip in negotiations with the United Auto Workers this fall?

Great Wall wants to expand in Thailand, adding a battery pack assembly plant and a research facility to its operations in Southeast Asia’s auto production  hub.

The agency that oversees U.S. vehicle safety will remain without a permanent administrator. The Biden administration withdrew its nominee to run the National Highway Traffic Safety Administration, NHTSA, in the face of Republican opposition to pro-EV regulation.

A consortium led by Glencore said it will invest $9 billion to develop Indonesia’s battery mineral industry.

Faraday Future shares bounced up after the company said it opened ordering for 300 special versions of its FF 91 luxury car. Faraday is one of several struggling EV startups trying to stay in the game. The company issued a “going concern” warning earlier this year, and earlier this month said it would raise $100 million in debt to finance initial deliveries.

Sponsors are not involved in the creation of newsletters or other Reuters news content.

Auto File is sent three days a week. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.

Want to stop receiving this newsletter? Unsubscribe here.
To manage which newsletters you’re signed up for, click here.

Reuters Terms & Conditions and Privacy Statement