As of this writing, the U.S. presidential election is a little over two weeks away. One candidate is presumed to keep up her predecessor's policies that will push for a more electric-focused future for the auto industry (though she's been cagey about talking about it lately), and the other candidate has vowed to rip those policies to shreds.
So if you're the CEO of an automaker that's keen on being competitive in the future and meeting all the necessary regulations to get there, how are you supposed to hedge your bets right now?
Today on our Critical Materials roundup of automotive and tech news, we'll examine General Motors CEO Mary Barra's answer to that conundrum. We'll also hear some of the latest rumors out of the Volkswagen Group as it faces a troubled present and future, and why Italians are none too happy about the leadership at Stellantis these days. Let's dig in.
30%: GM Still Bets On An Electric Future
All things considered, GM is having an excellent turnaround year for its electric and software-driven transformation. Its EV sales in Q3 rebounded hard and now it's in a tight race with the Hyundai Motor Group to become the first automaker since Tesla to sell 100,000 or more electric cars in a year. Barring any disasters in Q4, it's probably poised to pull that off.
That turnaround is the subject of a New York Times feature. It covers a lot of things that frequent flyers here at InsideEVs will know: the battery setbacks of 2023, how GM poached a ton of outside talent to get things right, and the efforts to build more batteries and EVs in North America and the U.S. to take advantage of federal subsidies and tax incentives.
But what happens if Donald Trump is reelected and those subsidies—whether for manufacturing or car-buying—disappear? What happens to, say, GM's investment in the old Saturn plant at Spring Hill, Tenn. that's now making batteries and EVs like the Cadillac Lyriq?
Well, GM CEO Mary Barra tells the Times that the plan is to keep the party going even if Trump wins:
Ms. Barra argues that electric vehicles will be popular regardless of who is in office. The electric Equinox will be cheaper to own than its gasoline-powered equivalent, taking into account savings on fuel and maintenance. And as the U.S. charging network grows, owners will be less afraid about running out of power on a lonely road.
Even the least expensive Equinox has the lively acceleration typical of electric vehicles. And next year, G.M. will revive the Chevrolet Bolt, which will be even more affordable than the Equinox.
“The consumer,” Ms. Barra said, “will choose an E.V. because there’s a robust charging infrastructure, because it’s affordable” and, she added, because “they love it.”
Most automakers won't talk about this and they certainly won't elaborate if they mention it at all. But nearly all of them have "Plan A" and "Plan B" for their EV investments depending on whether Trump or Kamala Harris steps into the White House in January.
If it ends up being the former, we'll see if Barra follows through with all of that. But losing the EV tax incentives for purchasing, for example, would certainly put a big damper on the second thing in her sentence above.
60%: Are Volkswagen And Scout Due For Some Reshuffling In The U.S.?
I'll preface this section by saying that while the outlet in question is pretty solid, the following report feels pretty heavy on rumor and innuendo to me—albeit the plausible kind. Take it with however much salt you want but let's unpack it.
Germany's Manager Magazine has a new story claiming that Volkswagen's U.S. arm, and the Volkswagen Group's new electric truck brand Scout, may face some reshuffling. Notably, it posits that U.S. CEO Pablo di Si could be on the way out amid slower American sales and projections for the Volkswagen ID.4 being way off the mark.
Here's an excerpt, and pardon the somewhat clunky translation:
But the ID.4 electric model, for which Volkswagen expanded the Chattanooga plant, is turning into an expensive burden. The car was supposed to be built and sold in the USA 100,000 times a year. In the first three quarters, however, VW only sold 16,400 units. There have been repeated recalls due to technical defects. Most recently, on September 4, the US authorities warned that the doors of the ID.4 could open while driving. Almost 100,000 vehicles are affected by the recall and, even worse, VW is currently not allowed to sell the model in the USA, according to Wolfsburg.
The fact that VW made a profit in North America in 2023 for once only helps Di Si to a limited extent. The current figures are too dramatic. Corporate documents show that the region is 1.3 billion euros behind expectations in the planning for the VW earnings program up to 2025, as of mid-August. A deficit of 700 million euros alone is set for higher discounts, an additional 900 million for lower sales figures and an unfavorable model mix; some positive effects could not compensate for this.
[VW global brand CEO Thomas] Schäfer and [CFP Arno] Antlitz did not stop their North American man from making his apparently euphoric predictions, but it now seems clear: Pablo Di Si planned too positively. The VW brand boss in particular is at odds with Di Si, they say within the company. In any case, the result is not surprising: Pablo Di Si will probably leave the company.
Again, this is all far from confirmed, but it claims some news will happen in the next few weeks. And then there's this part at the end:
The historic US brand Scout, which VW only revived in 2022, is intended to give the group an American image. But the strategists are apparently considering whether to reorient the project again. So far, the Scout was supposed to conquer the USA purely electrically. However, faith in the battery is waning here too, the group says.
Perhaps the Scout will also be available as a plug-in hybrid - and at least a year later. That would then be something for the next or perhaps even the next but one US boss.
My read on all of this: first off, it's a real shame that the Volkswagen ID.4 is being written off as some kind of failure. It was and is a groundbreaking EV (and one that benefitted from VW's foresight to build it in America) and last year made up an impressive 12% of VW's total sales. But its sales have tanked this year; in Q3, it was down nearly 60% from that period a year prior. And as that story notes, the ID. Buzz is kind of a whiff in terms of price and range, all while Volkswagen's American brand identity remains as vague as it's ever been. So while total VW sales were slightly up in Q3 amid a down year, it's hard to say that things are going great.
I would also add that if VW's sales projections for the ID.4 were that far off, then it was guilty of the same thing as the rest of the industry. GM, for example, was aiming for 1 million EV sales in 2025, and this year it'll be lucky if it does a tenth of that.
Finally, the Scout Motors brand is a big deal for the VW Group as it tries to shore things up in the U.S.—the Chinese market isn't doing the conglomerate any favors these days. But hybrids have been rumored for Scout before, only to get shot down by its CEO. Though if Scout wanted to do a hybrid, of course, it would have plenty of VW Group engines to draw from.
Expect more news about Scout this week as the concept makes its official debut.
90%: What Is Stellantis Good For?
Volkswagen is just one European conglomerate that's having a hard time in the electrified era. The other is Stellantis, similarly dogged with declining car demand in Europe and dwindling sales in China, plus a lack of focus on the brands that actually make its money like Jeep and Ram. Amid Stellantis' troubles, founding CEO Carlos Tavares is on the way out in 2026, and nobody seems sad to see him go.
It turns out that in Italy, everyone is extra mad at how irrelevant Stellantis has allowed Fiat to become. Here's Reuters on the sad state of Fiat's storied operations in its home country:
The factory makes the Fiat 500 electric city car and two Maserati sports cars, but due to low demand, production has been suspended for large parts of the year and 2,800 workers are on furlough on reduced pay. "Mirafiori has already been closed. It's just that it reopens sometimes," says Giacomo Zulianello, a plant worker and FIOM Cgil trade union official who is among those laid off until the start of November.
To survive, Fiat allowed its Italian identity to become diluted as it took over and then merged with Chrysler in 2014, creating Fiat Chrysler Automobiles (FCA), and joined with Peugeot maker PSA to form Stellantis in 2021.
Mirafiori - once the symbol of Fiat's might, employing around 60,000 people and churning out as many as 1 million cars a year including the original Fiat 500 in its 1960s heyday - has shriveled to a shadow of its former self.
[...] Francesco Zirpoli, a management professor at Venice's Ca' Foscari university and scientific director of its Center for Automotive and Mobility Innovation, says Italian auto production has slumped due to Stellantis skimping on investments on new models, especially for its Italian factories.
"More than a mistake, it was a choice," he says.
The shift from Fiat to Stellantis means Turin is no longer the main hub for engineering and product development, Zirpoli adds. The latest Fiats, Alfas and Lancias are styled in Italy, but use mostly French-derived engines and platforms.
Sound familiar? All of this makes me wonder: what is Stellantis good for? Or even, good at? My joke is that this merger of Fiat Chrysler and the PSA Group is that it's run like a French private equity company, but that feels more and more true with each passing year. (Or month.)
Stellantis has all these brands, but what is its leadership doing to grow and sustain them? Where does it lead in any sort of technology? And what's the point of having all those brands if so much is shared across all of them?
Granted, that was kind of the point of Stellantis: winning through scale and consolidation. It just seems to be missing out on the whole "winning" part right now.
100%: What Happens To America's EV Market After January 20?
That's Inauguration Day, in case you were wondering. But let's game this out if Harris wins or Trump wins.
The former should be easy enough to figure out. While the so-called "EV mandates" are unpopular in theory, there's no reason to believe a Harris Administration won't keep up EV purchasing and manufacturing incentives. Trump is harder to figure out; I could see him dumping the purchasing tax credits, but on the carmaking side, too many jobs feel at stake to pull the plug there. Keeping those going could be the right play if he wants to be the business-focused president his supporters believe him to be.
How do you see this going over the next few months and then years?
Contact the author: patrick.george@insideevs.com
