By Nick Carey, European Autos Correspondent
Greetings from London!
Tesla is expected to announce a new, cheaper electric vehicle later today. Well, really it’s just a more affordable version of its best-selling Model Y SUV, instead of the all-new $25,000 mass-market EV that CEO Elon Musk killed off last year.
The new vehicle comes as Tesla needs magic fairy dust to revive its sales. The revamped version of its Model Y that started deliveries in many European markets in June appears to have slowed, but not stopped its sales rout on the continent.
Tesla faces a tough market in Europe where local automakers and Chinese rivals alike have been launching spiffy, tech-laden EVs at a blistering pace. Musk’s EV maker is no longer the only game in town and auto industry experts say Tesla badly needs new models to move the needle.
In the U.S. market, the death of the EV tax credit creates different problems, but more on that below.
Which brings us to today’s Auto File…
U.S. EV freefall?
Europe’s Chinese self-driving invasion
Chery’s South African production plans
U.S. EV fears
After the U.S. $7,500 EV tax credit was killed off last week, auto executives fear a freefall in U.S. electric-car sales.
As Reuters colleague Nora Eckert reports, Ford CEO Jim Farley said EV sales could drop to 5% of the market next month, about half the level in August, which was a monthly record as consumers hurried to take advantage of the credit. You can read more about it here.
Or as Christian Meunier, chairman of Nissan Americas put it: “The EV market is going to collapse in October”.
The risk for EV makers is far greater. Rivian reported a nearly 32% jump in third-quarter deliveries but lowered its full-year forecast because of the death of the tax credit. That sent its shares down more than 7%.
Tesla of course went hell for leather to maximize sales before the tax credit expired, with discounts, financing deals, social media ads and customer emails. The result was a record sales quarter despite a dismal performance in Europe.
But now Tesla needs to maintain momentum. Visible Alpha estimates Tesla's full-year 2025 deliveries will be about 10% below 2024 – that in turn was 8% below 2023.
The aforementioned “affordable” EV the company is expected to announce could help. But that will depend on the car’s price tag and how stripped down it is.
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Chinese self-driving firms’ European road trip
Chinese developers of self-driving car software have been doing well in their home market, where more than half of cars sold - including many entry-level models - now offer autonomous technology, sometimes as standard.
But those firms need to grow and are under pressure from China’s government to dominate autonomous-vehicle development globally.
The problem is the U.S. market is closed to them, so they are focused squarely on coming to Europe instead. You can read more about it here.
Firms such as QCraft, Deeproute.ai and leading Chinese autonomous-tech developer Momenta are all expanding into Europe to pursue contracts with European and Chinese automakers alike.
European regulations are fragmented, and autonomous-vehicle testing is only permitted in a few markets.
European Commission President Ursula von der Leyen has called for a continent-wide push to develop self-driving cars. But some local self-driving startups say it will be nigh on impossible to compete with China’s firms on cost, so Europe should instead consider banning Chinese software instead.
Chery’s South African car plans
Chinese automaker Chery wants to build cars in South Africa and is holding talks with several automakers about assembling its vehicles in their plants there, Chery’s regional head tells Reuters. You can read about it here.
Facing an influx of Chinese brands, South Africa is reviewing its tariff policy, which is influencing Chery’s decision. European Union tariffs on Chinese-made EVs are the reason Magna is making EVs for Xpeng under contract at a plant in Austria and more such deals are likely as border taxes become a reality.
Chery would like to make its compact Tiggo 4 SUV for South Africa first and then the rest of Africa. It also wants to bring in some suppliers from China to help with local content requirements.
Craving sushi in Gujarat?
Way off the beaten track in western India, Japanese auto firms have transformed the farmlands around remote Vithalapur with factories.
Honda's motorcycle unit has a plant in Vithalapur while Suzuki’s factory there began making electric cars in August. A bevy of auto-related suppliers and other industrial Japanese companies have also set up shop.
But that has created unforeseen problems for meat-eating Japanese executives and engineers on long-term contracts in Vithalapur who also like a tipple because eating meat is frowned upon and alcohol is banned. You can read more about it here.
A clutch of hotels has sprung up to serve the sushi Japanese workers crave, but getting regular supplies of alcohol can still be tough and may require a three-hour drive to the city of Ahmedabad to stock up.
Fast Laps
A group of Tesla shareholders including SOC Investment Group and several state officials have urged investors to vote against Elon Musk's proposed $1 trillion pay package at the company's November meeting.
Luxury carmaker Aston Martin said its annual loss will be worse than previously expected because of weak demand in North America and Asia Pacific and the impact of U.S. tariffs.
U.S. EV maker Lucid reported a 46.6% jump in third-quarter deliveries driven by the tax credit rush, but still came in below Wall Street expectations.
Renault's low-cost brand Dacia unveiled a prototype electric mini-car that could cost less than 15,000 euros ($17,625), potentially providing a competitive alternative to low-cost Chinese electric vehicles.
Swedish self-driving truck startup Einride has raised around $100 million from investors, including asset management firm EQT Ventures and quantum computing company IonQ, at an undisclosed valuation.
German auto supplier ZF Friedrichshafen will cut around a quarter of its workforce in its electrified powertrain technology unit by 2030 under a restructuring deal reached with its works council and labour union IG Metall.
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(Editing by Alexandra Hudson)
((alexandra.hudson@thomsonreuters.com))