GM: Skinny China, Scant EVs, Super Profits

BYD, Toyota, Lucid, Lithium, Ampere, Electrify America, Chip War

Jan 31, 2023

The Big 5 This Week

1. GM’s Fat Truck Profits. When I was appointed to lead GM Indonesia in 2013, my colleagues in Asia gave me a heads up: “GM,” they said, “is basically a North American truck company. Everything else is a sideshow.” That narrow focus has paid off – at least for now. GM is expected to report profits of more than $14 billion for 2022. Link

Three facts got my attention:

• China accounted for almost 50% of GM global sales but less than 10% of profits. Call it the great China squeeze.

• EVs remained a tiny smidgen of GM’s total deliveries.

• GM earned fat profits while bleeding big bucks at Cruise.

2. Ford vs Ferrari er…Tesla. “We want to make EVs more accessible. So, we’re increasing production and reducing prices on the Mustang Mach E,” says Ford CEO Jim Farley.

Translation: “Tesla is putting everyone under enormous pressure on pricing. We have no other choice.” The Mach E now sells for $4,500 less than it did a week ago. Link

3. BYD’s Epic Ramp. BYD profits increased 5x in 2022 to $2.4 billion. BYD is now the world’s number two battery maker after CATL. The company recently bought transport ships to send massive numbers of product overseas in 2023, including to Europe, Japan and South America. Link

4. Toyota & EV Extremism. You know that feeling when you’re probably right but still losing friends fast. Toyota makes a reasonable, compelling argument for a diversity of options when it comes to powertrains. “Carbon is the enemy”, Gill Pratt says, “not a type of powertrain technology.” Trouble is, almost no one wants to hear it. Link

5. Renault-Nissan: Get Even, Then Get Out? Bitterly-estranged partners Renault and Nissan have come to an agreement on how the partnership will be structured in the future. Nissan gets much more clout. But both parties have lost interest. Look for the alliance to drift apart then break within the next three years. One to watch: Renault has given birth to Ampere, an all-electric subsidiary with links to BeyonCa, a Chinese EV startup led by former VW China exec Weiming Soh. Link

Take A Closer Look…

Read Chip War: The Fight for the World’s Most Critical Technology. Advanced technology, political tensions, US navy destroyers cruising through the Taiwan Straits, Morris Chang, born in China, educated in America, Chairman of TSMC. Damn, this should be a movie.

China’s Lithium Achilles: Joe Lowry, aka Mr. Lithium, reminds us that China is powerful but invincible when it comes to battery supply chains. “China is the most dependent on lithium, they are desperate [to get supplies],” from this week’s conversation on the Driving with Dunne podcast.

Joe Lowry – Mr. Lithium – right at home.

Future EVs, Batteries, Charging

EVs

Lucid Up. Saudi Arabia’s Public Investment Fund might take over Lucid. Shares jumped 60% in January after falling almost 90% in 2022. The Lucid Air is arguably the single best handling car in the world. But the way-up-there price and lack of scale and iffy charging network make tough terrain for the young brand. Link

The Lucid Air is gorgeous. What about the digital experience & charging?

BYD Headcount. How many people work at BYD? Some 420,000, second only to VW among automakers worldwide.

Xpeng Profit Outlook. Xpeng will not make an operating profit before 2025. The company hired Wang Fengying, former president of Great Wall Motors, to right the ship. Link

Xpeng founder He Xiaopeng presents the all-electric Xpeng G9

Batteries

GM & Lithium Americas. Lithium Americas has secured a $650 million investment from GM to develop that Thacker Pass Lithium Mine in Nevada. How soon will other automakers get into mining? Link

Charging

Electrify America – How To Do It Wrong. “EV owners are practically begging Electrify America to get their fast chargers working and fix the reliability and security issues.” Last week, one EA station was successfully hacked. Link

Electrify America is a product of a US government fine on VW.

New Ideas / Milestones

Lotus IPO. Despite a looming global recession, Lotus Tech will do a SPAC merger valued at $5.4 billion. Lotus belongs to Geely, one of about a dozen brands in the Chinese company’s portfolio. Link

Lotus Eetre electric SUV starts at $85,000

Wisdom: “The best way to figure out what you want to do in life is to figure out what you don’t want to do.” Tony Fadell, Author, BUILD: An Unorthodox Guide to Making Things Worth Making. Link