Trade News

From D.C.'s lawmakers: A solution and a new challenge

In one week, two pieces of federal legislation with profound implications for automotive manufacturers, suppliers and retailers passed major milestones. One promises to alleviate one headache for the industry in the long term, while the other will create a new headache, at least for now.

On Tuesday, President Joe Biden signed the CHIPS and Science Act into law — though it took a year and a half of wrangling between both sides of the aisle in Congress to get there. Some $2 billion of the $52 in federal government subsidies is designated for the production of chips used by automakers and parts suppliers. Major players such as Intel and Taiwan Semiconductor Manufacturing are committing to invest billions in new U.S. plants.

A microchip-starved auto industry is unlikely to get immediate relief, but in the years ahead, the addition of chip output inside U.S. shores — which is expected to help offset reli…

Parts shortages and higher commodity prices are putting a financial squeeze on Tier 2 and Tier 3 suppliers, in some cases forcing them to go to their Tier 1 customers to renegotiate pricing or ask for a cash infusion.

The third option: Go bankrupt.

Pat D'Eramo, CEO of Canadian Tier 1 supplier Martinrea International, has had a number of lower-tier suppliers ask his company to renegotiate their contracts, he says.

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 s…

The co-founder and CEO of Israeli startup Upstream Security explains how EV chargers are a prime attack vector, discusses supply-chain vulnerabilities and the financial-minded motivations of car hackers.

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Tesla's U.S. new-vehicle registrations grew 61 percent in the first half of the year, easily beating BMW for the top spot among luxury automakers, regardless of fuel type.

All major luxury brands except Tesla and Genesis posted lower first-half registrations, according to new data from Experian.

But there was a bright spot for legacy automakers and EV startups in the data: New registrations of full-electric vehicles rose sharply among non-Tesla brands.

"Tesla's growth is expected, but what's more exciting to see is the fiery jump in sales for legacy automakers that have introduced new EVs onto the scene only recently," said Robby DeGraff, industry analyst at AutoPacific.

Tesla new-vehicle registrations in the January-June period rose to 228,989 from 142,543 in the year-ago period. Registrations for luxury competitor BMW fell by 13 percent to 157,838 vehicles. Lexus saw a 19 percent drop to 133,616 and Mercedes was down 14 percent to 133,520, acc…

Maybe there was a time when the auto industry had all the engineers it needed. But if so, that was a while ago.

The industry has been bemoaning the shortage of engineers at least since the dawn of this century.

And the situation is heating up now.

Automakers are remaking product portfolios to load them up with battery-powered electric vehicles that need new components and materials. Suppliers are perfecting catalogs of new technologies for advanced safety, automated driving and connectivity. And to do all that, they need engineers in disciplines that didn't used to be critical, including mechatronics, electrical and software — lots of software engineers.

In Traverse City, Mich., this month, at the Center for Automotive Research's annual Management Briefing Seminars, it didn't take much prompting to get executives to tell us that they've got unmet engineer needs. It's a source of stress across the industry.

The big French supplier Faurecia …

The auto industry is looking to the capability known as Plug & Charge to level the playing field with Tesla's Supercharger DC fast charging network.

It could be a crucial tool in helping drivers charge quickly and more easily as the industry moves to sell more electric vehicles.

Tesla has a huge head start with its Supercharger network, which launched in 2012. It permits Tesla drivers to reach almost any destination in the continental U.S. Although the network is dedicated to Tesla drivers, the automaker says it plans to open it to other makes.

Plug & Charge is the response from other automakers. It's a complex set of software and security protocols that make on-road DC fast charging quicker and simpler.

The system has software operating in the background that authorizes an EV at a charging station to identify itself to the network and provide a valid payment mechanism, which lives within the automaker app. No…

Late-night comedian and Ford F-150 owner Jimmy Fallon surprised employees who make the F-150 Lightning pickup during a stop in Detroit this month.

Fallon joined Ford Motor Co. CEO Jim Farley at a track to test drive the battery-powered pickup and at the Rouge Electric Vehicle Center to see it being built and pose for photos with workers.

"I just drove it 100 miles an hour," the host of "The Tonight Show" said in an interview with Detroit's NBC affiliate, WDIV-TV. "Honestly, it was in three seconds. I just floored it, and you like fly back in your chair. Thing's got some kick, man."

Fallon — a former "Saturday Night Live" star like Farley's late cousin, Chris Farley — has talked up the F-150 Lightning multiple times on his show. In May, he created a music video called "Junk in My Frunk" about the truck's spacious storage area under the hood.

"You are so smart, fun and a badass," Fallon, who also drove a Bronco and several Mustangs…

Stellantis has a lofty agenda as it pushes aggressively into electrification while also striving to generate more revenue through software and to improve the ownership experience with over-the-air updates.

But this ambitious to-do list may not even be the trickiest task looming for Stellantis. The company is working to conquer another goal that has perplexed many an automaker: delivering a viable short-term rental service in the U.S.

Stellantis has been steadily growing its footprint with its Free2move that launched in Europe in 2016 before debuting in Washington, D.C., in 2018. It has since expanded to cities such as Austin, Texas; Columbus, Ohio; Portland, Ore.; and Denver.

"We are now running a profitable mobility service, something many others have tried and failed," Stellantis CEO Carlos Tavares said during a March presentation of the company's Dare Forward 2030 plan. "Now it's time to scale up."

Free2move is growing at a time when other ma…

PARK CITY, Utah — Going back to the auto industry's first production car with an electric self-starter, in 1912, and the first mass-produced V-8, in 1915, Cadillac has introduced some of the most novel advances to make driving and owning a car more convenient and enjoyable. The sunroof, memory power seats and air suspension are also among Cadillac's innovations. In 1964, the brand delivered another first: heating, ventilation and air conditioning controlled automatically by an onboard thermostat.

Cadillac is breaking more new ground with the Lyriq, its first modern electric vehicle, which journalists had a chance to drive here in June. Here are some of the nifty features on the 2023 Lyriq that look forward but also celebrate Cadillac's past.

■ LIGHT SHOW

Approach the Lyriq with the key fob, and a dynamic light show unfolds out front. Starting with the small Cadillac crest, LED lights cascade outward across the face. The show is punctuated by vertical headligh…

A Florida dealer believes he has found a solution to a long-standing problem for businesses and their employees: rising health care costs.

Greg Balasco, owner of Lakeland Automall, which sells Ford, Hyundai and Genesis vehicles, switched in late 2020 from traditional health insurance with a big-name provider to a self-funded plan that he says saves hundreds of thousands of dollars and helps him retain employees who view it as a perk. The new system includes a doctor — through what's called a direct primary care program — who works out of the auto mall once every two weeks and is on call to employees at all hours.

The initiatives have helped Lakeland Automall cut its health care costs about 25 percent, reducing its expenditures by more than $150 per person. Nearly half of its roughly 275 employees are insured through the plan.

"There was sheer frustration over the lack of quality health care and the continual increase in expenses …

How the new EV tax credit rules work

The revamped EV tax credit adds increasingly stringent rules on where battery critical minerals are extracted and processed, and where battery components are made or assembled for vehicles to be eligible.

» For critical minerals: Before 2024 and after the U.S. treasury secretary issues the proposed guidance: 40% must be extracted or processed in the U.S. or in a country where the U.S. has a free-trade agreement in effect, or from materials that were recycled in North America.

By 2024 50% By 2025 60% By 2026 70% By 2027 80%

» For battery components: Before 2024 and after the U.S. treasury secretary issues the proposed guidance: 50% must be made or assembled in North America.

By 2024/25 60% By 2026 70% By 2027 80% By 2028 90% By 2029 100%

» Final vehicle assembly must occur in North America for E…

Steven Cliff leaves NHTSA after just 78 days on the job. An appeals court rejects GM’s racketeering lawsuit against Fiat Chrysler. Inventory drops even more. Rivian adds a second shift as its second quarter loss widens. Plus, industry expert Mike Vogel talks about how service departments can create customer advocates.

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