The fight for the cheap electric vehicle is materializing. Despite battery-electric cars not quite being at cost parity compared to their ICE counterparts, automakers know that they have to have more affordable, mainstream offerings—even if those are loss-leaders for the time being—to win over converts and earn brand loyalty. Volvo isn't about to join in that fight, though. In fact, it's all about keeping a "premium" vibe in a world where others are champing at the bit to get more market share.
Welcome back to Critical Materials, your daily roundup for all things EV and automotive tech. Today, we're chatting about Volvo's refusal to go downmarket, Tesla's robotaxi event, and GM's planned hydrogen plant. Let's jump in.
30%: Volvo Has No Plans to Fight China’s Bargain Beasts
Brave or bonkers? That's Volvo for you, because the Swedes have no intention of battling it out with China over the influx of cheap EVs in its backyard. The automaker has finally flat-out said that it has no intention of feeding into a price war with Chinese automakers.
Sure, Volvo has targeted Tesla's coveted $35,000 "affordable" price target with the EX30 (which will hopefully come to the U.S. once Volvo gets its tariff situation figured out). But anything less? Not likely to happen. The EX30 is a bold enough experiment for the brand, its most mainstream and reasonably priced car ever; that's as low as Volvo wants to go, apparently.
"I don’t compete at the low end of the BEV space in China," said Volvo CEO Jim Rowan in an interview with Automotive News Europe. He continued, describing "the low end of the market [...] a tough place to be."
The competition in the EV space is heating up like a lithium-ion battery in thermal runaway. Things are getting serious with every legacy automaker looking to claim their piece of the pie. After all, we keep hearing that it's the future of propulsion. Competition is good, though. It breeds innovation and helps to put pressure on brands to come up with more affordable offerings to penetrate different market segments.
Not Volvo, though. It knows its spot. The automaker is staying on the premium side of the track where luxury and quality reign supreme.
China isn't just pumping out high-volume, low-cost cars—it's making hit after hit chocked full of tech that consumers are going bananas over. The result is these carmakers completely owning the domestic EV market to a point that foreign marques simply can't keep up. And past that, they're building overcapacity and that's setting up a storm ready to sweep across other nations with the same low-cost vehicles.
That's a hard act to follow, so Volvo simply isn't going to play ball.
"I don't know how fast the premium market is going to grow, but I'm going to outgrow it by taking market share from my competitors," remarked Rowan, doubling down on playing the premium sector.
Is this a risky strategy? Absolutely. The automotive market is shifting extremely quickly and low-cost EVs are becoming part of just about every automaker's strategy. China in particular is uber-competitive, and it's the world's largest EV market by a long shot. Heck,
If Volvo's premium strategy plays off, it could cement itself as the go-to import brand for folks willing to pay a bit more for its iconic Scandinavian design flush with premium materials and safety features. And if not, well, Rowan could find himself in a similar light as Stellantis CEO Carlos Tavares.
"If you're in China right now and you have a brand with a rich heritage and you've got a loyal customer base, a nice dealership network, well-known plug-in hybrid and mild hybrids that means we can still grow," said Rowan. "It will be moderate, but we can still grow."
60%: Here Come The Invitations To Tesla's Robotaxi Event
It's official: the Tesla robotaxi—erm, Cybercab—reveal is just two weeks away. The automaker doesn't look like it's planning to push it back again, either, as some folks appear to be getting invitations to the event taking place on October 10th at Warner Brothers Studio in Burbank.
It's called "We, Robot," according to the invitations sent out to investors late Wednesday afternoon, and it's all about Tesla's "unveiling of the future of autonomy." In reality, we know it's about the robotaxi—something CEO Elon Musk believes will be "the most significant moment for Tesla since the unveil of the Model 3."
Strong words.
Tesla has been prepping pretty hard for this event. A few weeks ago, rumors swirled that Tesla had begun mapping out the area surrounding the Warner Brothers campus. Shortly after, a weird banana-colored test mule was spotted by a studio employee. Other than that, we don't know much about what to expect from the event.
What we do know is that Tesla continues promising to deliver the solution to self-driving on minimalistic hardware. Meanwhile, its Full Self-Driving software still very much requires supervision and continues to fall short of what one might expect from a company revealing a driverless robotaxi product in (checks notes) 14 days.
It turns out that building something that can drive on its own without any sort of intervention is hard. Just ask Waymo, and Cruise, and Mobileye, and any number of other startups that have been lighting cash on fire to keep the dream warm.
If Tesla truly can pull it off in the near future—and that's a big if—it's just the beginning of what it will take to get these Cybercabs on the road. There are many other regulatory hoops that the automaker must jump through in order to deploy its new product. We're talking permits, testing, and public trust. And don't forget about its fleet of one million customer-owner robotaxis that were called "appreciating assets" by Musk in 2019. Those were due on the road four years ago and may soon have obsolete hardware incapable of driving unsupervised and are infeasible to retrofit with anything newer.
What's going to happen on October 10th is pretty much anyone's guess. Could Tesla knock it out of the park while ushering people around Warner Brothers Studio in Los Angeles? Sure. It could also reveal some juicy details about the upcoming $25,000 car that's said to share the same platform. Or maybe we'll just get some dude dressed like a car doing robot moves. It's Tesla, so just about anything is possible.
90%: GM's New Hydrogen Plant Is Either Genius Or A Giant Hail Mary
General Motors is getting into the hydrogen game. Well, okay, it's technically been there for a while (cue the 1966 GM Electrovan), but the automaker is getting serious with a big bet into the future by building out its business with a new hydrogen plant in Detroit.
The automaker is teaming up with Piston Automotive, and it's selected a site at the old Michigan State Fairground. The goal is to make this new facility its hub for hydrogen fuel cell production. There's one head-scratcher, though: is it ambitious, or setting GM up for a hail mary in the distant future?
Let's break this down before digging into what GM has up its sleeve. Fuel Cell EVs powered by hydrogen have long been touted as "the future." It's akin to hybrids being the stopgap between gas and EVs, and EVs being the stopgap between hybrids and hydrogen. That's extremely forward-looking though.
See, hydrogen has had its problems. Just look at the Toyota Mirai: a car that owners absolutely love, but has had its reputation destroyed by the lack of reliable hydrogen infrastructure.
That's the risk of any new car tech, though. Call it the early adopter's tax, or just bad luck. Either way, it'll be a while before hydrogen is viable for consumer vehicles all the way across the U.S. And who knows, maybe this is an indication that GM did something right by only allowing leases of the EV1 back in the day.
GM may be pulling a Hyundai and eyeing up production for commercial uses (like generators or industrial machinery) before considering use for any production vehicles. It has also dropped hints that this hand was in the cards with a pilot program "beyond hydrogen trucks" announced earlier this year. Who's to say, though, as the automaker declined to talk to Crain's Detroit Business about its planned uses.
The plant will be operated by Piston Automotive, a company founded (and currently chaired) by former Detroit Pistons guard, Vinnie Johnson. Piston is leasing the nearly 300,000-square-foot warehouse along Eight Mile Road in Detroit where GM's investment will be put to work. The plant will mark GM's first standalone hydrogen fuel cell production facility.
No word on when the plant is to open—the partnership still has quite a bit of red tape to slalom through before anything materializes. GM hinted that it would take a "few years" at the earliest, and the plant will eventually grow from an initial 50 jobs to around 300 at peak production.
So is this the future? With hydrogen passenger cars still on the fringes of adoption, this is an undeniably classic GM move—big, bold, and hedging on a bet that may not materialize for decades. But if hydrogen does pop off sooner, GM could be duking it out with Toyota and Hyundai to control the H2 empire.
100%: Be Honest: What Are You Expecting From Robotaxi Day?
I'll admit I'm skeptical of what we'll see. But given Tesla's track record and Elon Musk's public enthusiasm for the event, there's probably going to be a bit of a wow factor. The problem is that we don't know what it's going to be yet, or what's going to even be real from this event. After all, it's being done at a Hollywood studio; some critics have wondered why the supposed robotaxi won't be displayed on city streets if it's so capable.
So this is where I'm asking all of you folks to get out your crystal ball. It's time to make some predictions of what we're going to see at the Tesla Cybercab reveal. Are we actually getting something that proves Tesla is lightyears ahead of competitors in its autonomy journey, or some Cybertruck-inspired, steering-wheel-less two-seater that is working within its Operational Design Domain? Tell me your thoughts in the comments.
