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By Victoria Waldersee, Germany Autos Correspondent
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With Detroit still enjoying a well-deserved holiday, it’s my turn to bring you the Auto File from Berlin, where I’ve spent the past few weeks listening to cautious forecasts from automakers bruised by years of supply chain uncertainty, but keen to show investors they’ve got it all under control.
BMW joined a chorus of European carmakers this week reaffirming their strategy of keeping prices high to pass costs on to customers, with some – including BMW – being so bold as to raise their outlooks for the year (albeit with a bunch of caveats around the world economy not deteriorating and the war in Ukraine not getting significantly worse.)
It’s the same message we’re hearing from Mercedes-Benz and Volkswagen: prioritize your financials over volume sales to prove to investors you’ve got the means to fund the transition to electrification.
You could argue this makes good sense – but looming over their careful planning is the shadow of Tesla and Chinese competitors unashamedly pursuing EV market dominance and worrying about margins later.
Only time will tell which strategy will win out – until then, here are some highlights from the autos world today:
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Hummer EVs on the production line at the General Motors ‘Factory ZERO’ electric vehicle assembly plant, in Detroit, Michigan, U.S. REUTERS/Jonathan Ernst
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GM and unions tussle over wages
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General Motors and the United Auto Workers had a lot to talk about this week, and discussions aren’t going too smoothly. At the heart of the debate is how much companies can afford to pay workers while also funding the transition to electric vehicles.
The UAW is pointing to pay hikes received by executives like GM CEO Mary Barra and saying their workers deserve a piece of the pie too – more specifically, they want at least a 40% pay hike over a four-year contract, better healthcare and pensions, shorter working weeks, and permanent contracts.
But this week, GM said it can’t go that much higher and remain competitive. Together with its battery joint-venture partner LG Energy Solution, it also rejected a push by Democratic Senators to include workers at a plant the two partners run in Ohio to be covered by a national labour agreement which would make them eligible for better pay and benefits.
Still, workers and GM found agreement on one front: Cruise, GM’s robotaxi unit, signed the driverless car industry’s first labour union agreements for dozens of workers constructing and staffing the car-charging facilities, a big win considering the fears among many unions about the impact automated driving could have on jobs in the industry.
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Security guards stand at the BYD booth at the Auto Shanghai show, in Shanghai, China. REUTERS/Aly Song
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BYD powers ahead of Tesla
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Chinese EV maker BYD is keeping Tesla on its toes in China, Tesla’s largest market after North America and home to its biggest factory. Sales of Tesla’s China-made vehicles fell 31% in July from June, marking its first month-on-month decline since December when it struggled with rising inventories.
Tesla slashed prices for two of its models at the beginning of the year to boost sales and started a price war prompting around 40 competitors including BYD to offer discounts or launch new lower priced models.
Tesla is still on strong footing in China and was the only foreign brand to increase its market share in the country in the first half of the year, according to Chinese industry data. But BYD outsold Tesla China by 29% in EV sales in the first half of this year, with its lower-priced Dolphin EV outselling Tesla’s Model 3.
The Dolphin, by the way, has also just arrived in Europe. The battle is on, on all sides.
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Car sales crawl up in Germany, UK, Russia
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Europe’s consumer confidence figures have been pretty shaky lately, but if car registrations are anything to go by, some people are starting to splash out on big purchases again – though still not as many as before the pandemic.
New car registrations in Britain rose more than 25% in July, marking the 12th consecutive monthly rise, according to preliminary data. Passenger car registrations in Germany rose 18% – but are still a quarter below where they were this time of year in 2019.
In Russia, car sales rose 168.8% year-on-year in July, partially recovering from a slump following the country’s invasion of Ukraine – but the market isn’t growing the way it was before, with Chinese carmakers capitalising on the departure of Western players to take over their factories and seize market share.
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China’s Pony.Ai is setting up a joint venture with Toyota Motor to mass-produce robotaxis, the latest in a series of investments by the Japanese carmaker in the autonomous vehicle startup.
The Mexican state of Nuevo Leon gets another EV investment: auto parts maker Vimercati is putting in $200 million for a new plant, joining Tesla and Korean carmaker Kia in building an EV production hub in the state which is also courting Tata.
Better safe than sorry… Hyundai and Kia have told owners to park outside as they recall over 91,000 newer vehicles because of fire risks caused by damaged electrical components that can lead to a pump overheating.
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