Feb 24 (Reuters) -
By Nick Carey, European Autos Correspondent
Greetings from London!
Well, it didn’t take all that long for President Donald Trump’s tariffs to dominate headlines, as the U.S. Supreme Court ruled against his use of emergency powers to impose some of his border taxes.
Trump shot back instantly with a new 10% global tariff on U.S. imports, then said it would be 15% - though only the 10% levy has so far been imposed.
Automakers are now back where they feel least comfortable – in uncertain territory.
They might be able to seek their portion of the estimated $175 billion in tariff refunds, though that process is expected to be long and complicated even as Trump levies new border taxes.
And Hyundai is pushing South Korea’s government to move fast on legislation for a $350 billion investment package agreed as part of a trade deal with Trump, warning that the U.S. president could raise auto tariffs again after the Supreme Court ruling.
Which brings us to today’s Auto File…
Volvo battery recall
Who’s behind the wheel?
UAW’s first southern contract
Volvo recalls defective batteries
Volvo Cars has spent decades building its entire reputation around safety.
As Reuters colleague Marie Mannes reports, the Swedish unit of China’s Geely is recalling 40,000 EX30s, its flagship electric crossover, as a fire risk with the vehicle’s batteries threatens to harm that carefully cultivated reputation.
You can read all about it here.
In financial terms, battery recalls are not that expensive.
But the risk of your car bursting into flames does nothing for consumer confidence in electric cars. Just a few years ago, General Motors had to move fast to replace defective LG batteries in its electric Chevy Bolt.
Volvo says the battery problem has been fixed and will continue using the same Chinese supplier, a Geely-backed joint venture called Shandong Geely Sunwoda Power Battery Co.
Volvo needs to move fast to put this behind it to maintain its identity as a safe brand.
Recommended reading:
The story behind Toyota’s CEO switch
Investors ditch AI for infrastructure
Trump’s China trip
Industry experts have long said that Level 3 self-driving technology would be one of the trickiest parts of the shift to autonomous vehicles.
But now, as Reuters colleagues Nora Eckert and Abhirup Roy report, there is a debate within the industry as to whether to bother with Level 3 at all.
You can read all about it here.
The international scale for autonomy is divided into five levels - ranging from Level 1 where humans do everything to Level 5 where cars can drive themselves everywhere, all the time.
Level 3 sits at an uncomfortable junction in the technology, where the car can drive itself under certain circumstances, but human drivers have to be ready to intervene.
Some executives and industry experts argue that handing control back and forth between the car and human driver is unworkable or unsafe, and raises thorny liability issues.
Some also question whether enough consumers will purchase the technology to justify its hefty development costs.
The challenge is that it can take vital seconds after a warning from a Level 3 car before a human driver takes over control – and it’s one some automakers may simply choose to avoid.
A UAW contract in the South
Workers at Volkswagen’s sole U.S. plant in Tennessee voted overwhelmingly in favor of their first labor deal, handing the United Auto Workers union a badly needed win in the U.S. South.
The contract marks a major milestone in the UAW’s efforts to unionize auto factories in the South, a breakthrough that had eluded the union for decades.
But while the deal is a big win for UAW President Shawn Fain, there is little sign of any further progress at this point.
After the Volkswagen workers voted 73% in favor of union representation in April 2024, the UAW lost a vote at a Mercedes plant in Alabama later that year.
Since then, the union’s efforts in the South appear to have stalled.
Germany’s auto heartland crisis
Speaking of German carmakers, the country’s auto heartland is in trouble.
As Reuters colleague Maria Martinez reports, suppliers in Germany's industry-rich Baden-Wuerttemberg region have been hit hard by the crisis facing the country’s carmakers.
You can read all about it here.
The state is home to Mercedes and Porsche, car brands synonymous for decades with German manufacturing excellence. But intense competition - particularly from China - an uneven shift to EVs and rising costs have rocked the sector.
Falling demand in the auto supply chain is squeezing hundreds of smaller manufacturers and threatening job security and municipal services.
Although Chancellor Friedrich Merz's conservative party is still likely to win a March 8 election in Baden-Wuerttemberg, the economic worries and a sense of lost regional pride are providing fertile ground for the far-right AfD's narratives.
Fast Laps
Elliott Management has offered to pay around market price to buy Toyota Industries shares from holders who have agreed to a tender offer that the U.S. activist said undervalues the forklift-truck maker, sources told Reuters.
New car sales in Europe fell year-on-year in January for the first time since June, weighed by declines in major markets including Germany, France, Belgium and Poland, according to data from European auto lobby ACEA.
Uber will invest more than $100 million to develop autonomous vehicle charging hubs, underscoring the ride-hailing company's latest push to scale up self-driving operations.
EV maker Lucid has laid off 12% of its U.S. workforce as it seeks to boost profitability amid softening demand for higher-priced electric cars.
EV maker Polestar will roll out refreshed versions of its top-selling sedan Polestar 2 and SUV 4 models over the next year to support European sales, choosing quick, lower-cost updates over all-new models to stem its cash bleed.
Tesla unveiled a cheaper Cybertruck variant in the U.S. market and slashed the price of its most expensive model, Cyberbeast, as the EV maker struggles to find buyers for its pickup trucks.
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(Editing by Mark Potter)