Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
Things Are Looking Bad For European Automakers And Parts Suppliers
Between inflation and an energy crisis, now seems to be a particularly rough time for European automakers and suppliers. Bloomberg reports that increased costs and decreased customer demand is creating choppy waters in Europe. Well, there are two ways of looking at this situation. On a positive note, a lull in Europe could give European automakers the opportunity to build up inventory in undersupplied markets. Imagine actually seeing new Volkswagen GTIs and Golf Rs stay on dealer lots long enough to test drive. On a negative note, rough conditions for suppliers could have rippling effects throughout the automotive world. Not only would an increase in OEM parts prices drive up the cost of new cars, vehicle owners like you and I could soon be paying more money for OE replacement parts. Suppliers will need to find revenue somehow, and hiking the prices of replacement parts is one avenue they could pursue. Keep a close eye on the cost of quality car parts over the next few months, I have a feeling we’ll see some increases. While Continental confirmed its outlook for the year on Tuesday, the German parts maker said it has to shoulder some €3.5 billion ($3.6 billion) in additional costs for raw materials, energy and logistics, with prices for overseas shipping containers jumping eightfold in some cases. Continental CFO Katja Duerrfeld described conditions as “rather like a hurricane” and predicted these pressures “will not subside any time soon.”
The EU Says U.S. EV Credit Proposal May Violate Trade Rules
Remember that recent Senate deal about tax credits for electric cars? The one with stipulations for U.S. origin of battery components? Well, a growing number of critics are unsurprisingly opposed to that protectionist measure. Reuters reports that the European Union thinks the tax credit proposal may breach World Trade Organization rules. While I’ve never been an elected official, “don’t piss off your trading partners” is likely a good rule to keep in mind when running a country. If the EU isn’t happy about this tax credit proposal, I have a feeling that America’s USMCA partners likely aren’t happy either. If the proposal is judged to violate trade agreements, that could represent a significant roadblock for EV tax credit expansion. Garcia Ferrer told a news briefing the EU agreed with Washington that tax credits are an important incentive to drive demand for EVs and promote the transition to sustainable transport and a reduction in greenhouse gas emissions. “But we need to ensure that the measures introduced are fair and … non-discriminatory,” she said. “So we continue to urge the United States to remove these discriminatory elements from the bill and ensure that it is fully compliant with the WTO.”
Mercedes Is Reportedly Killing The Metris
It’s a sad week for the commercial van community. Automotive News reports that an internal memo says Mercedes-Benz will kill the Metris towards the end of next year. While it’s a bit of a shame to see the Metris ride off into the sunset, I can’t say I’m terribly surprised to see it go. While the Metris was a wonderful size and generally quite practical, it’s been around since 2015 and businesses haven’t been especially receptive towards it. Plus, crankcase ventilation valve replacement calls for around 12 hours of billable work, an obscene amount of labor for a common replacement on these vehicles. The Metris may fit in parking garages and be fairly comfortable, but cost of ownership and downtime really matter to fleets. “As a result, the Mercedes-Benz Metris and gasoline Sprinter models will no longer be offered in the U.S. market after Q3 2023,” the brand’s U.S. vice president of commercial vehicles, Nicolette Lambrechts, said in the memo obtained by Automotive News. I’m also not terribly surprised that the gasoline-powered Sprinter is being phased out. The M274 engine shared with the Metris has largely been superseded by the M264 across most of the Mercedes-Benz passenger car range. While the death of a Mercedes van may be sad, it precedes the birth of another. Expect an electric Sprinter to make its way over to North America in the next few years.
Rivian Sees A Larger Second-Quarter Loss Than Expected
It’s no secret that market downturns hit startups the hardest. While established automakers generally keep their balance sheets in the black, startups are burning tons of cash scaling up production. Case in point, Rivian. Reuters reports that Rivian’s financial performance through the second quarter is both better and worse than expected. Let’s start with the good news. The Irvine, California-based company said it plans to add a shift to its Normal, Illinois, assembly plant by the end of the third quarter, but also noted that it expects higher raw material costs and other supply-chain challenges to continue. While an extra $26.5 million in revenue is good news, it doesn’t really offset the losses that Rivian expects to announce. Rivian said it now expects to post an adjusted loss before interest, taxes, depreciation and amortization of $5.45 billion, compared with a previously projected loss of $4.75 billion. Still, Rivian built fewer than 7,000 vehicles in the first half, but reaffirmed its full-year target of 25,000. So, not great news overall, then. An extra 700 million in losses doesn’t sound particularly promising, which is a bit of a shame. It sucks to see a startup in a tight spot, especially when it’s already delivering production vehicles to customers. Here’s hoping that Rivian eventually sees a tighter delta between revenues and losses because the R1T really does look brilliant.
The Flush
Whelp, time to drop the lid on today’s edition of The Morning Dump. I’d love to be able to ask everyone a question related to the news and be able to read all your responses in a timely manner, but I’ll actually be in the air by the time you read this. So, in the free-for-all spirit, I’d love to know what your favorite thing is about your current daily driver. Lead photo credit: Continental AG Canada and Mexico are specifically included in the tax credits for manufacturing. And US FTA partners are included in the battery sourcing rules. As always, the US should pursue FTAs with the EU, UK, and the TPP countries anyway. One DD has a manual and is fun for that aspect. The other is a couch on wheels and is comfortable. I count them both a DD as I swap between them every week or so. Best thing about a car I actually own? The cam lope in my Mustang. It sounds faster than it is but I love it. It should also be noted that the Metris wasn’t/isn’t a very good van… https://www.youtube.com/watch?v=sa8kHgmZIiQ&ab_channel=DougDeMuro If Kia can charge 60k for a Carnival, Mercedes can charge 70-80k on a V-Class I hope Rivian survives and thrives. The R1S is a compelling option. Making a cheaper dual motor option with most of the outdoorsy bits otherwise intact would be a great tradeoff between cost and capability. With brake simulated lockers it would get most places while keeping costs lower. The slow speeds would keep brake temps down for longer periods while still offering increased traction. But really, I’d say my favorite thing is that it’s “mine”. Meaning that keeping up with maintenance, and changing or upgrading things to suit my needs to how I like, gives it personality and sets it apart from every other cookie cutter Tahoe. Like the after market stereo and better speakers, upgraded shocks and suspension to handle towing better. Best change by far – done with daily and towing in mind – was a complete brake upgrade with drilled/slotted rotors, pads, calipers, braided stainless lines. HUGE improvement over the “high performance” pads/rotors I threw on the year prior, braking distance feels like it is half what it used to be. Since my SO isn’t driving anymore, her newer Forester has been the DD more frequently. It’s ok (better on mileage!), but it doesn’t have the same personal feel to it. I’ve been in contact with the VW dealer where I’ve/family bought 3 new cars from the same salesman. He’s now the manager. I told him 5 months ago to let me know when he gets an allocation for a stick shift R, ideally in blue. He got excited…. and I haven’t heard from him since. That I haven’t filled it up since March (2017 Volt). Now, once your fuel hits a calculated average of 12 months (I say it that way because it can calculate it based on if you filled up a non-empty tank), it’ll activate what is known as FMM (Fuel Maintenance Mode) in which it will run the engine at all times (except when stopped – it more or less acts like the car does if you have the vehicle in “Hold” mode) until the tank has been emptied, and then instruct you to fill the vehicle back up. I’d really like if it could hold out to two years, as my best ever “tank” would have been even more than the 7122 miles it ended up at when I filled up after FMM emptied the remainder of my tank.
