Auto File: De Meo packs his (Gucci) bags

Reuters
06-17
Auto File: De Meo packs his (Gucci) bags 

By Nick Carey, European Autos Correspondent

Greetings from London!

Just when you thought that U.S. President Donald Trump might be getting tired of imposing tariffs, he threatened late last week that he might raise auto tariffs to further prod automakers into making bigger investments in the United States, and faster.

Trump pointed to a number of recent investment announcements to justify such a move, including General Motors’ plans to invest $4 billion in three U.S. plants and move some SUV production from Mexico, and Hyundai’s $21 billion investment announcement in March.

"They wouldn't have invested 10 cents if we didn't have tariffs," Trump said.

He has a point. Those investments would not have been announced without Trump’s trade war, though it is unclear how much of Hyundai’s announcement is actually new and not previously announced.

But while making more cars in the United States might shield automakers from tariffs, it will still translate into higher prices for U.S. consumers.

Which brings us to today’s Auto File...

  • De Meo bails on Renault

  • U.S. EV tax credit fight

  • Musk’s mea culpa

* De Meo bids Renault adieu

Renault CEO Luca de Meo abruptly announced his decision to quit the French carmaker over the weekend to go and run Gucci owner Kering instead.

Having turned around a struggling carmaker, de Meo will now get to do the same at a debt-laden luxury conglomerate instead.

In the short run, Renault has some practical things to take care of, including hiring a new successor.

Possible candidates for the top job include longtime Renault insider Denis Le Vot and Maxime Picat of rival Stellantis.

But the harder part may be figuring out Renault’s long-term future. The company is the smallest of the traditional, mainstream carmakers and is smaller even than the German luxury automakers BMW and Mercedes-Benz.

Renault has also already been overtaken by Chinese automakers BYD, Geely and Chery, while Changan will probably surpass it in sales this year.

Renault under de Meo has teamed up with a number of partners and investors including Google, Qualcomm and China's Geely.

Those are smart moves.

But they also highlight the challenge for any potential Renault CEO, which is that to thrive in today’s auto industry global automakers must invest heavily in EVs and software.

That requires scale.

* Recommended reading:

  • Ford’s rare earth struggles

  • Concerns over Pirelli’s Chinese investor

  • Chinese automakers winning EV race

* Curtains for U.S. EV tax credit?

U.S. Senate Republicans have proposed killing the $7,500 tax credit on new EV sales and ending a $4,000 used-vehicle EV tax credit.

This is just one of a number of measures Republicans lead by Trump have been pursuing that will further slow EV adoption by U.S. consumers.

Trump last week signed three resolutions approved by lawmakers barring California's EV sales mandates and diesel engine rules, including a landmark plan to end the sale of gasoline-only vehicles by 2035.

A group of 11 states led by California immediately filed suit challenging that repeal.

And influential consumer organization Consumer Reports has urged Republican lawmakers to drop plans for a $250 annual fee on EVs to pay for road repairs.

The Republican moves could dramatically slow EV adoption and make it harder for Detroit’s automakers to justify spending large amounts of money on electrification when they can pretty much print money making gas-guzzling pickup trucks and SUVs today.

But lead by China, the world outside the United States is gradually going electric.

The big question is whether in the long term the U.S. pickup truck is enough to keep Detroit competitive.

* Sorry is the hardest word

As widely expected, Tesla CEO Elon Musk came close to apologizing for his insult-laden fight with Donald Trump. Though he didn’t actually say sorry.

Apart from being on the outs with Trump, it is hard to see what Musk got for his stint working in Washington.

Tesla’s sales tanked in the first quarter amid a consumer backlash against Musk’s politics. He has a lot of damage control to do, as evidenced by a lawsuit from a group of French Tesla owners alleging the automaker’s EVs have become "far-right totems" that are harming their reputation.

As my Reuters colleague Chris Kirkham reports, Tesla now faces an existential test as it aims to launch robotaxis in its home base of Austin, Texas, where public safety officials are increasingly concerned about the state’s anti-regulation stance toward self-driving cars. You can read about it here.

This follows a decade of unfulfilled promises of self-driving vehicles from Musk, who last year staked Tesla’s future on this technology as it pivoted away from pursuing EV sales.

Some analysts and investors attribute the majority of Tesla’s stock market value to the robotaxis and humanoid robots it has yet to deliver. 

* Toyoda sees off rebellion

Toyota Motor shareholders overwhelmingly re-elected Akio Toyoda as chairman despite criticism of a $33 billion buyout of a group company from overseas shareholders.

Toyoda largely owed his re-election to support from mom-and-pop investors.

Prior to the Japanese automaker’s annual general meeting, shareholders of group company Toyota Industries  peppered executives with questions about the carmaker's 4.7 trillion yen ($33 billion) buyout bid, which foreign investors described as unfair for minority shareholders.

For the first time in three years, Toyoda was not opposed by either of the leading proxy advisory firms which had previously flagged governance concerns.

* Fast Laps

- Stellantis is currently unaffected by supply bottlenecks for rare earths from China, but has problems with shortages in the past, the head of its European operations said.

- Ferrari has delayed plans for a second EV model that was due out in 2026 to at least 2028, because of a lack of demand for high-performance luxury EVs, sources told Reuters.

- British luxury carmaker Jaguar Land Rover cut its fiscal 2026 profit forecast amid uncertainty in the global auto industry over U.S. tariffs, sending shares in Indian parent company Tata Motors down as much as 5.2%.

- The U.S. National Highway Traffic Safety Administration said it is streamlining its reviews of requests filed by automakers seeking to deploy self-driving vehicles without required human controls like steering wheels, brake pedals or mirrors.

- Drivers are becoming more reluctant to buy EVs, a trend that is more pronounced in Europe than in the United States, according to a survey published by Shell.

- Swedish pension fund AP7 has blacklisted and sold all its shares in Tesla, citing violations of U.S. labor rights.

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