Greetings from Portland, Oregon!

If you drive almost anywhere in urban and suburban communities of the United States, you are under surveillance.

Cameras operated by Atlanta-based startup Flock Safety capture license plate numbers of cars traveling the streets, and store data that can be processed using artificial intelligence to give police and other government agencies a tracking map of your movements.

Flock cameras have been used to catch criminals, the purpose Flock Safety promotes.

They’ve also been used to nab individuals who traveled from states where marijuana is illegal to buy pot in states where it is legal. They have been used by police officers without authorization to stalk ex-spouses and other individuals. Flock’s surveillance web draws comparisons with the surveillance systems the Chinese government uses to maintain control.

In just a few months, concerns in America about how much information Flock cameras are amassing about where we go as we mind our own business have exploded from a niche issue among civil liberties activists to a political storm. Figures on the left and right of the U.S. political divide have united in questioning AI spy cameras.

Last week, Texas Gov. Greg Abbott, nobody’s idea of a soft-on-crime liberal, ordered Texas state agencies to freeze funding for Flock cameras amid a bipartsan backlash in the state.

Abbott is running for re-election this November. His Democratic challenger, Gina Hinojosa, has hit a nerve with new ads that attack Abbott’s support for spending millions to install 10,000 Flock cameras.

How the anti-Flock revolution caught fire

Back in early July, auto journalist Joel Feder published a scary account of how he found himself surrounded by screaming cops who had misidentified as a stolen vehicle the manufacturer-supplied Range Rover SUV he was test driving.

The police had been tracking Feder using data provided by license plate reading cameras operated by Flock Safety that survey streets in his Minnesota hometown.

Roughly 7,000 other jurisdictions around the United States have installed Flock spy cameras. The justification: images and data from Flock cameras (and drones) would help police spot crime and apprehend criminals, making communities safer.

Since Feder’s piece ran in The Drive, a backlash against the proliferation of AI-powered spy cameras has exploded. People are vandalizing the cameras and demanding that city officials cancel contracts with Flock.

Reporters digging into the Flock story have uncovered cases of police officers using Flock data to stalk former spouses. A video of a man protesting that he was accused by an AI spy camera of running a red light in Florida when he was actually in Alabama has 10 million views, according to Youtube.

Flock has denied that it sells its tracking data to ICE, the federal immigration enforcement agency.

However, in a statement on its website Flock said its customers, including federal agencies and local police, could choose to share tracking data with ICE.

On August 13, Flock responded to the uproar, saying it was strengthening its privacy policies by limiting retention of data to seven days and making it harder for individual police officers to access Flock data without proper authorization.

Flock specifically addressed Joel Feder’s story:

“A recent story described a wrongful traffic stop involving an auto journalist. The central point is simple: an alert is a lead, not a conclusion, which should be confirmed by an officer.”

Flock critics aren’t buying it. The American Civil Liberties Union called Flock’s “creepy cameras” a “major civil liberties threat” despite the new privacy policy. Conservative Republicans such as Missouri Sen. Josh Hawley are demanding Flock explain whether it is building a database of citizens’ movements that enables warrantless police searches in violation of the Constitution.

As anti-Flock protests have intensified, more than 100 communities have stopped using Flock cameras, according the website deflock.com, which maintains a map showing where Flock cameras are deployed.

Still, that leaves over 130,000 license plate reading cameras, aka LPRs, in operation, according to Deflock.

Flock CEO Garrett Langley and his VC investors have $8 billion (possibly more) at stake in calming the storm, and preventing more cities from cancelling contracts. Flock’s value is estimated at about $8.25 billion. It has yet to file for an IPO.

The auto industry would do well to pay attention as it pursues its love affair with AI. Flock’s business model of marrying artificial intelligence to ubiquitous monitoring of where people drive their cars is genius if you are an investor hungry for practical applications of AI. It’s a nightmare come true for everyone else.

The Flock backlash is part of a wider narrative. AI companies promise to unlock a world of convenience and productivity. That vision is colliding with distrust of technology that consumes resources, threatens jobs and eradicates privacy.

The auto industry has had its own clashes with customers over the use of data collected by in-car monitoring systems. General Motors has agreed to pay millions to settle litigation over its sale of driver monitoring data to insurance companies without customer authorization.

Once upon a time, your car or truck was your rolling castle. A zone of privacy compared to the workplace or even your own home. (Can you blast the Stones album Some Girls in your house when the rest of the family is there? No, you cannot.)

Of course, a police officer could stop you on the street. But Flock turbo charges that risk. Flock can track where you go, where you stop, and create a searchable, permanent matrix of your activities. Previously that matrix was retained for 30 days. Now Flock says data is retained for just seven days. But there’s no law requiring that. It’s up to Flock.

Yes, Flock has hired a data security expert to beef up its defenses against hacking. But defenses against hacking look pretty thin when Russian spies can use AI tools developed by SpaceX to break into company databases and Chinese cybercrooks can access the U.S. Justice Department.

One more thing: How would it look if a car company connected its vehicles to Flock’s surveillance network, or used Flock data for market research?

The question answers itself.

Thanks for reading!

I’m still on my road trip West. The next HSR will land some time after Labor Day.

Here’s to driving free.

###

Greetings from West Glacier, Montana!

It turns out there’s never a good time to take a long vacation. You’d think August would be a safe time to take a road trip to see the USA. President Trump has other plans. He’s decided to start a full-on trade war with Canada in which the U.S. auto industry is a hostage.

Make no mistake. The entire U.S. auto sector, not just the Motor City Three, would suffer if Trump’s proposal to levy 50% tariffs on all cars, trucks and auto parts made in Canada goes into effect, and Canada retaliates in kind.

After 32 years of open trade among the U.S., Canada and Mexico, the American auto industry has built highly interconnected North American production systems and supply chains on the assumption that parts and vehicles made in one country could be sold in all three nations more or less tariff-free.

The Cato Institute, a pro-free market think tank, has these charts that illustrate how vital Canada and Mexico are to the U.S. auto sector.

Friend of the Rodeo Warren Browne has a fresh, highly detailed analysis of what a U.S.-Canada trade war would mean for the North American auto industry.

Spoiler alert: Nothing good. There’s a reason why investors dumped shares in the Motor City Three automakers on Monday after Trump’s escalation.

You can place your own bets on whether Trump will escalate his feud with Canadian Prime Minister Mark Carney to this level. Even the usually supportive Wall Street Journal editorial board is giving this a thumbs down. The outcome of the U.S. mid-term elections which occur before Trump’s January 1 deadline could affect Administration tactics, or Carney’s response to them.

Here’s Warren Browne’s special flash report on the potential impact of Trump’s trade brawl. There’s lots of beef here. Full access is for paid subscribers. You can become one for a very reasonable investment.

The regular High Speed Rodeo will be back soon. Here’s Warren:

Subscribe now

INTELLIGENCE BRIEFING · U.S. LIGHT VEHICLE MARKET

VEHICLE PERFORMANCE TRACKER_TM

SPECIAL FLASH REPORT

A Briefing on the U.S. Light Vehicle Market

THE COST OF RESHORING

U.S. Auto Tariffs, Production, and Trade Through 2027

WHAT CHANGED SINCE Q2

Three Things Moved. All Three Point Down.

Sections I through III carry the forecast as it stood before the afternoon of 24 August. They cover the federal deficit and what is left of tariff revenue, the collapse in USMCA vehicle trade, and a production recovery that arrives without workers.

Then the President posted. Tariffs on Canadian vehicles would go from 25% to 50% on 1 January 2027. Prime Minister Carney had already said American tariffs would be met dollar for dollar. Section IV takes that at face value and runs it. It is a separate exercise on separate assumptions, and it sits after the Data Annex for that reason.

Contents

The Briefing at a Glance

I. U.S. Federal Budget Deficit and Tariff Revenue

II. USMCA Trade (U.S. Vehicle Exports)

III. U.S. Sales, Production and Employment

Data Annex — Tariff Schedules

IV. If Both Sides Go to 50% (preliminary)

THE BRIEFING AT A GLANCE

The Deficit Grows. Tariff Revenue Shrinks.

Trump Administration goal, September 2024: “We will bring our auto-making to the record levels of 37 years ago… very quickly through tariffs and other smart use of certain things that we have that other countries don’t.” (1, 1.1)

Key 2026 Flash Report Takeaways

— Overall U.S. government spending will push the budget deficit to $2.0 trillion, up 14.7%.

— Tariff revenue will fall 13.8% from 2025, to $168 billion. The reduction is primarily driven by tariff refunds. (2)

— Sales indicators remain weak. Consumer sentiment, overall retail sales, employment and economic growth all underperformed in July.

— U.S. light vehicle sales will decline by 2.7% this year and remain below 2024 levels.

— U.S. light vehicle production will increase by 0.5% this year. (Production increased 7.8% in July). The 2027 production forecast has been cut.

— U.S. light vehicle exports to USMCA partners will fall 9.8% this year. Every unit lost abroad cancels a unit gained at home by displac

ed imports.

— Good News: Section 338 tariffs will not be applied to Canadian light vehicle and parts imports. Bad News: The current U.S.–Canada trade war will lower economic growth in both countries.

Read more

It’s August. And that means it’s time for a summer vacation. The High Speed Rodeo is going on an extended Westward road trip after this edition. I’ll be away until Labor Day, but I am making plans to refresh the feed during my break.

And now for the news from the World of Cars.

• Let’s dig into Toyota’s latest financials and the No. 1 global automaker’s redoubled push to dominate the growing global hybrid segment.

• Ford gave its make-or-break electric truck a name (and teased a product that could drive Mustang loyalists mad.)

• BYD achieved a milestone in its globalization strategy.

But first…

America’s auto debt explosion

Auto loans are now the second-biggest type of debt for American households behind home mortggages. Car loan balances are now larger in aggregate than student loan debt, according to new Federal Reserve data.

For those who’ve been following the rise in vehicle prices since the pandemic, this data may not come as a shock. But it is one more yellow flag waving over a U.S. auto market that has, so far, proven relatively resilient in the face of a stagnant job market, spiking gas prices due to the U.S.-Iran quagmire and the diminishing purchasing power of many working Americans.

U.S. wage earners now get a record low share of GDP as automation and AI boost productivity faster than wages, according to new government data.

Here’s another sign of trouble: Nearly 30% of would-be new car buyers are turning up in showrooms with vehicles to trade in that are worth less than the amount still owed on the loan, according to Edmunds, the auto shopping and market research company.

The industry refers to this as being in “negative equity,” or “upside down.” Automotive News, the authoritative publication for auto dealers, called the rising number of consumers underwater on their loans a “crisis.”

There are signs that repossessions are on the rise, a classic symptom of an unhealthy consumer economy. However, the Fed data shows only a slight uptick in the rate of delinquent car loans.

The auto industry’s belief has always been that people will keep paying car loans even if they have to skip other payments. And many Americans are skipping credit card payments, the WSJ reports, as they wrestle with inflated prices for food, gasoline and some (not all) other goods and services.

CBS has a price tracker here. Here’s CPI data compiled by the Fed.

Despite the signs of strain, lenders are still eager to make car loans. New Cox Auto data shows credit availability at an 11-year high. Sub-prime borrowers are finding it harder to get credit, but approval rates for consumers with weak credit are still higher than a year ago, according to Cox.

One last puzzle piece: Cox’s Kelley Blue Book’s July market report shows average vehicle transaction prices “holding steady” at just under $50,000.

New-Vehicle Average Transaction Price

I am no data scientist, but that graph looks like the track of a trend that couldn’t go on forever, and didn’t.

Car prices haven’t reverted to pre-pandemic levels, and they won’t if the industry can help it. But mass market automakers appear to realize they cannot maintain their current size and employment selling only luxury goods to AI Economy Winners.

Which brings us to Ford’s new “affordable” EV…

Full Fathom Five

The pickup truck that is the first fruit of Ford’s much-touted “skunk works” effort to match Chinese EV technology and manufacturing costs will be called the “Fathom.”

Not Ranchero, as some had speculated. Not some other name in Ford’s historic pantheon. Sorry Boomers. Ford isn’t interested in another nostalgia trip. (See the Mustang item below.) This truck’s for your kids.

Fathom prices start at $29,495, including delivery charges. That makes the Fathom affordable in the industry’s view.

The auto media is already comparing the Fathom to startup Slate’s small electric truck.

The Slate truck has a very different sales concept. The base truck at $26,400 comes stripped down. Buyers choose from a menu of options, including a kit to convert the pickup to an SUV. The Fathom will be packaged in a more traditional way.

Real prices for both trucks in the United States will likely be more in the high $30,000 or low $40,000 range.

Buyers, however, may not compare just the Fathom and Slate. Price is as relevant as the powertrain. Probably more relevant. That widens the field.

The Fathom’s toughest competitor plays for its own team.

Ford’s popular hybrid Maverick compact pickup starts at $29,990, just $495 more than the new EV.

Ford dealers struggled to find buyers for electric trucks. But they know how to sell Maverick hybrids. They moved 46,507 of them in the first half of this year. Refuel anywhere hybrids have gained nearly 3 percentage points of market share in the United States so far this year, while battery electric vehicle sales have stagnated as federal tax subsidies dried up.

Then there’s Hyundai’s small Santa Cruz pickup, a petrol-only model starting just below $30,000. That could be an alternative for some shoppers.

You can put in a “pre-order” for a Fathom starting early next year.

By then, Ford could fill in the blanks for key details such as driving range and option prices. Ford will likely start delivering the trucks from its Louisville, KY assembly plant later next year.

Toyota’s hybrid overdrive

Toyota, the #1 global automaker by sales, is having a bumpy year.

Tariffs are squeezing North American profit margins to a measly 2%. Lexus and Toyota brand sales are down in China. The Mideast War is sinking sales in that region. The automaker reported spending the equivalent of $879 million in the latest quarter supporting suppliers hit by rising tariff and other costs. (See the fiscal Q1 slide deck here.)

A weak yen is magnifying dollar profits and helped Toyota boost profit guidance by 13%. Toyota will buy back $6 billion in stock. The investor response to that? Shares fell, and are down 13% for the year so far.

Hybrids could be Toyota’s way out of the doldrums. Toyota is launching a new generation of lithium batteries for its hybrids, and expects to have capacity to equip 600,000 vehicles a year with those new batteries in 2027-2028.

Sales of the company’s gas-electric hybrids rose by nearly 7% in the March-June quarter, and Toyota forecast it will deliver more than 5 million hybrids for the full fiscal year, roughly half its projected global sales.

Toyota’s decision to put hybrids ahead of EVs in its product strategy looks better with age as U.S. and European rivals write-off billions on failed EV projects.

Toyota’s collaboration with Chinese partner GAC to develop a new EV appears to be working out. But matching Chinese EV makers is a critical item on Toyota’s to-do list as BYD and others gain share in markets such as Southeast Asia Toyota once dominated.

Speaking of which…

BYD’s Brazilian Milestone

Chinese automaker BYD last week rolled out a made-in-Brazil hybrid it said will run on gasoline or ethanol and will have 50% locally made parts by next year.

The ethanol/gas/grid juice powertrain is impressive. What should scare rivals more is the speed with which BYD is building the capability to make vehicles that meet Brazil’s local-content targets.

BYD took over and began retooling the assembly plant formerly owned by Ford in Camacari Brazil just three years ago.

Now, BYD aims to make the Camacari complex an export hub for Latin America, with projected capacity at 300,000 vehicles a year. Camacari is BYD’s largest factory outside China. Maybe not for long.

Lightning Laps

Mustang heresy!?! Ford executives showed dealers a prototype for a four-door Mustang sedan, the WSJ reports. A four-door Mustang is a contradiction in terms for Mustang purists. But Ford already ignored the purists to bring out The Mustang Mach-E electric SUV.

A Mustang sedan would get Ford back into a segment it has abandoned in the U.S. market, and advance Ford CEO Jim Farley’s strategy of using the market mojo of the automaker’s best-loved brands to make money in segments that are largely commoditized.

A Waymo robotaxi struck a pedestrian in Dallas who had been hit first by another vehicle and thrown into the Waymo’s path. The victim died. Preliminary reporting suggests authorities are not blaming Waymo’s robotaxi for the death. Waymo just opened its service to anyone in Dallas on Aug. 4.

Volkswagen’s wide-ranging restructuring now includes new management and an overhaul of its strategy for the U.S. market. Once again, VW management is floating the idea of designing a pickup truck for the United States, possibly in partnership with Ford. Why would Ford want to enable another rival for its Ranger mid-size truck? Great question.

Meanwhile, the Porsche and Piech families who control VW along with the State of Lower Saxony demanded swifter action to put the automaker back on track, reinforcing CEO Oliver Blume’s call for cost-cutting that could eliminate 100,000 jobs.

The crisis at VW and increased stress at BMW and Mercedes are driving Germany’s auto parts makers deeper into debt. A new study by PwC, seen by Reuters, found that German suppliers’ debt reached 102% of operating earnings.

German politicians are feeling the heat to respond to the auto sector crisis and China’s role in it.

Aston Martin is in trouble with creditors who object to the British luxury brand’s plan to sell branding rights.

Defense contractors under pressure from the Trump Administration to boost production of missiles and other weapons being consumed by the war in Iran are hoovering up supplies of semiconductors that automakers need.

Struggling luxury EV maker Lucid will delay the launch of a lower-priced Gravity sedan until the second half of 2027 to cut near term costs. Bad news. But the disclosure that Saudi Prince Alwaleed bin Talal has acquired 5% of Lucid shares buoyed the stock. Saudi Arabia’s Public Investment Fund already owned 60% of Lucid shares, which have lost 97% of their value in the past five years.

Uber plans to invest up to $10 billion to expand its network of robotaxis over the coming years. CEO Dara Khosrowshahi said the company’s partnership with Waymo is “very important,” but that Uber will work with rival AV developers. “We want to make sure that we're not dependent on one partner,” he said.

Uber’s profits in the here and now fell short of Wall Street expectations. Rival Lyft also reported lower-than-expected profits as it spent more on promotions to get riders in cars.

General Motors renewed its alliance with Chinese state-run automaker SAIC until 2047. GM and SAIC plan to export the new Buick Electra line of electric vehicles from China. The Electra 7 SUV is getting glowing reviews. But U.S. customers can’t have them.

Tesla is fighting with European auto safety regulators to keep data about its “Full Self Driving” system secret.

Have a great August. More later…

Greetings from Motown!

I spent a couple of hours on Sunday admiring vintage Packard luxury cars owned by members of the Motor City Packards Club. These are gorgeous machines, with imposing chrome grilles, stately proportions and swooping swan hood ornaments.

In the years before World War II, Packard was often the top-selling luxury car brand in America, Packard club members say. It was the car of Presidents… and dictators. Franklin Delano Roosevelt owned a Packard. So did Josef Stalin.

But by 1958, Packard was dead. General Motors’ comparatively light and efficient small block V-8s made Packard’s hulking inline eight-cylinder motors obsolete. Packard couldn’t match the economies of scale GM, Ford and Chrysler mustered across their multiple mass market brands to drop production costs for their luxury model lines. Consumers turned away from chrome swans and embraced jet fighter-inspired tail fins.

This brings us to the latest news from the World of Cars, where we see more live-action demonstrations that strategies, product technology formulas and market trends that looked like solid bets can very quickly go upside down.

• The endless China auto market boom? Over.

• A future dominated by new EV companies? Only if the remaining few can survive.

• A U.S. market protected from Chinese competition? Ford’s CEO says don’t count on it.

Let’s dive right in, before something else changes.

China’s auto boom goes bust

Auto sales in China plunged 23% in July, for the ninth straight month of declines. The China Passenger Car Association is forecasting the total passenger vehicles sales in the world’s biggest auto market will drop 14% for the full year.

If U.S. auto sales were plunging at this rate, the sound of smashing glass and clanging alarms would be deafening. The Chinese auto slump is just now starting to get the attention it deserves.

A 14% year over year decline in Chinese passenger vehicle sales would work out to nearly 3.8 million vehicles in lost sales. That’s roughly 15 assembly plants worth of production.

The pain is not evenly distributed. Sales of gasoline/combustion vehicles are collapsing, dragging down Western brands such as Porsche, BMW, Mercedes and Volkswagen.

Sales of electric and hybrid “New Energy Vehicles” are down by about 14% as Beijing has dialed back purchase subsidies, according to CPCA data. That’s only good relative to the wipeout for combustion tech.

Analysts have said for years that the rickety structure of the Chinese auto market was headed for a shakeout. China’s auto sector has ridiculous levels of overcapacity and scores of sub-scale brands churned out by provincial manufacturers.

Talk of The Reckoning in China’s auto sector is back on the front burner.

“A sharp reset is underway,” China auto analyst Bill Russo wrote on Linkedin.

The era of hyper-growth as Chinese citizens bought their first vehicles is over, Russo wrote. From here on, China’s market will be driven by replacement demand (like America and Europe) and China’s automakers will be forced to search for “equilibrium.”

Equilibrium in a Chinese market buffeted by price wars will take a while. In the meantime, the best Chinese automakers are still searching for growth in export markets. Exports lifted BYD to a third straight month of increased global sales.

Chery’s new $75 million investment in Korean EV maker KG Mobility, fka Ssangyong, is another data point for the double-time pace of top-tier Chinese automakers’ global expansion strategies.

By the way, KG Mobility makes, whaddaya know, pickup trucks! Which brings us to…

Jim Farley’s Warning: The Chinese are coming!

Ford CEO Jim Farley told employees last week that the company must prepare for Chinese automakers to enter the U.S. market within five to ten years, notwithstanding the current array of tariffs and national security measures designed to keep them out.

Farley is the official Sayer of Quiet Things Out Loud for the U.S. auto sector. His latest warnings about Chinese competition got a lot of attention after Reuters reported them, even though Ford Chair Bill Ford had already said, in public, “we can’t keep them out forever.”

Farley’s peers and rivals know the same history he does: Quotas were supposed to curb competition from Toyota in the 1980s, until they didn’t. No amount of appeals to patriotism convinced a large cadre of affluent consumers to keep buying Detroit brand luxury cars once they had experienced nimble BMWs and Porsches.

Whether five to ten years is enough time for Ford and other legacy automakers in the U.S. market to match the connectivity tech and product development efficiency of the best Chinese brands is another question.

Farley has a lot riding on the success of his bet that a “skunk works” team, based in California far from Dearborn headquarters and staffed by veterans of Tesla and the tech industry can crack the Chinese EV code.

Rivian: Successful software, Money-burning EVs

Legacy automakers are still struggling to match the software capability of China’s EV companies and U.S. EV pioneers Tesla and Rivian.

That’s good news for Rivian, which needs the lift, based on the tepid Wall Street reception for its latest results.

Rivian is a successful software-as-a-service company wrapped inside an EV manufacturer that expects to lose more than $25,000 before interest costs, taxes, depreciation and amortization on every vehicle it delivers this year, based on its latest Q2 financials.

The good news is that Rivian’s automotive operations narrowed their gross loss to $36 million in Q2 from $335 million a year before.

The bad news is that Rivian burned $849 million in cash in Q2 and expects a bumpy ride in Q3 as well. (See the CFO’s remarks aboiut the R2 launch here.)

Rivian reported $8.4 billion in available liquidity and promised capital investments for 2026, after raising $1.32 billion with a share sales. Another $4.5 billion is promised from the U.S. Energy Department in the form of a loan to finance construction of an assembly plant in Georgia. Rivian has runway.

But investors are selling anyway. The company’s shares are down 19% for the year so far.

Rivian the advanced automotive software company, however, is doing great.

Rivian’s separately reported software and services operations earned $215 million in Q2 on $515 million in revenue. Revenue growth was 37%. Gross margins: 42%.

Most of Rivian’s software revenue came from Volkswagen. VW has promised to invest $5.8 billion in Rivian in return for Rivian’s help developing brain-of-the-car software. Rivian in turn is getting access to VW’s purchasing scale economies for chips and other commodities.

Rivian has made it farther across the U.S. EV industry’s Valley of Death than other companies that went public during the COVID-Era EV Investment Bubble. This database of failed SPACs identifies the corpses in the EV sector: Fisker, Lordstown, Canoo, Electric Last Mile, Arrival.

As far as Wall Street is concerned, Rivian’s next big test is getting to black numbers for automotive gross profit as promised by the end of the year.

Lighting Laps

Zoox is the first U.S. robotaxi company to get federal clearance to charge for rides in vehicles that don’t have steering wheels or human-operated brakes. Zoox will be allowed to operate up to 2,500 robotaxis without standard human controls. This is a big deal for the AV industry, which is racing to scale before demands for potentially less favorable regulation prompted by AV safety lapses get traction.

Elon Musk vigorously denied a Wall Street Journal report that Tesla is considering a spinoff of its China operations before a possible merger with SpaceX.

This is one of those stories that makes a lot of sense, even if it isn’t true.

Has Musk stoked speculation that SpaceX and Tesla could be merged? He has.

Could Tesla’s dependence on its Shanghai operations, deep ties to China’s technology supply base and reliance on the good will of the Chinese government create problems for a Tesla/SpaceX combo?

You bet. SpaceX has $22 billion in U.S. government contracts.

One of three things Republicans and Democrats in Washington agree on is the imperative to keep Chinese influence and technology out of U.S. national security infrastructure. (I’d welcome help identifying the other two areas of agreement.)

Flying car companies are trying to salvage their investments by hawking their technology to military buyers. Civilian air safety rules and regulations have stymied air taxi ventures.

Stellantis CEO Antonio Filosa asked investors for patience as the parent of Jeep, Fiat and Ram reported worse-than-expected results for H1. Filosa earlier this year rolled out a 70 billion euro, multi-year turnaround plan.

Leasing a car has become more expensive, and fewer U.S. car shoppers want to take lease deals that are less generous than those offered in the pre-COVID Before Time, Reuters reports. The industry’s pullback from discounted leasing is one factor flattening U.S. industry sales, according to JD Power’s latest forecast. High gas prices are pushing up demand for hybrids, which could take nearly 16% of sales in July, up 2.5 percentage points from a year ago, Power forecasts.

Electric cars. So 2020. Executives at General Motors and Ford have dialed back discussion of electric vehicles in their calls with investors, TechCrunch’s Sean O’Kane reports using data from Hudson Labs, a company that applies AI to investor research. In Q2 2020, EVs took up nearly 34% of GM’s call with investors. In Q2 2026, EV talk took up 10% of “relevant discussion.”

The top two categories for discussion at GM during the latest call: Markets and supply chains.

Thanks for reading! More later. And as a bonus, some more photos of the classic rides at the Motor City Packards outing. Chrome! Fins!

China’s glut of auto production capacity poses a significant risk to the incumbent automakers of North America, Europe and Japan. Overcapacity has become a fighting word in the trade clash between the United States and China.

But the United States is headed for an auto production overcapacity problem of its own, as the latest installment of Friend of the Rodeo Warren Browne’s exclusive Vehicle Performance Tracker shows.

You may have seen announcements from Toyota, Honda and Hyundai that they plan to increase U.S. vehicle production. That’s good news for people who want to get hired at the new factories, but not so good for incumbents in the North American market that trying to boost prices to offset President Trump’s ever-shifting array of import taxes.

And if Trump leads the United States into a trade war with Canada, that will put more pressure on the U.S. industry.

Warren’s latest analysis adds it all up, and the results aren’t pretty for the industry.

There’s a lot of exclusive data here for High Speed Rodeo paid subscribers. You can get access to it all for a surprisingly reasonable price by clicking that orange button.

Thanks! Here’s Warren:

Subscribe now

Executive Summary—Vehicle Performance Tracker _TM

Trump Administration’s Goal: “We will bring our auto-making to the record levels of 37 years ago, and we’ll be able to do it very quickly through tariffs and other smart use of certain things that we have that other countries don’t”¹.

Q2-2026 Performance: Negative. Progress remains slow and cumbersome. At this point, expected performance remains below the Inflation Reduction Act baseline for the next few years.

Key Takeaways in Q2 Report

• U.S. light vehicle sales and production have stalled in the first half of 2026. Minimal improvements are expected before the end of the year.

Read more

Greetings from Motown!

Just time for a fast roundup of the news after a road trip this weekend down Interstate 94 between Detroit and Chicago. There’s no romance of the road on that stretch of highway. Just convoys of semis, endless traffic jams and nutty Chicago drivers trying to get ahead by cutting you off.

The World of Cars has seen some aggressive action this week, as well. We’ll get into how a bill to keep Chinese cars out of America has provoked a knife fight between GM and Mercedes. Plus, German automakers are ordering more job cuts and Ford shows how to make more by selling less.

And away we go!

Mercedes v. GM

A Senate bill aimed at keeping Chinese automobiles and their data-gathering sensors off U.S. roads could have the intended side effect of running Mercedes-Benz out of the U.S. market, to the benefit of General Motors’ Cadillac brand and other luxury market rivals.

The Connected Vehicle Security Act would bar the sale of vehicles by “a joint venture, subsidiary, or other entity in which more than 15 percent of the equity interest, voting interest, board representation, or other indicia of control, whether directly or indirectly, is owned or controlled by an entity, or combination of entities, organized under the laws of, or with its principal place of business in, a covered country.”

Translated, any automaker with more than 15% Chinese ownership would be barred from the U.S. market after Jan. 1, 2027.

This language means that Mercedes-Benz, which is nearly 20% owned by Chinese interests, could face expulsion from the U.S. market in five months. Or not.

Senate Commerce Committe Chair Ted Cruz told Reuters that General Motors had backed the 15% threshold to boost its Cadillac brand.

GM said its support for the bill wasn’t aimed at any specific rival.

GM CEO Mary Barra has a lot to gain from Trump administration policies that blunt competition from overseas rivals and ease the regulatory burden on GM’s U.S. truck fleet.

Barra and GM President Mark Reuss hosted Trump at the company’s Milford, Mich. proving grounds on Monday, where the President headlined a political rally for GOP candidates.

Cruz and other Senators say they have no intention of barring Mercedes from the U.S. market. The bill appears to give automakers until 2030 to comply with Chinese ownership and tech content limits.

Mercedes has one of its largest factories in the deeply Republican state of Alabama, a U.S. head office in Atlanta, hundreds of dealers and suppliers and a sizable customer base among some of the most affluent people in America. Some of those Mercedes drivers are Republican donors.

Mercedes CEO Ola Kaellenius told investors during his Q2 results call on Tuesday that the company is monitoring the U.S. legislation closely and “if we need to make adjustments to comply with anything, we will make sure that we protect our presence and our business in the U.S.”

The Chinese shareholders, who include Geely Chair Li Shufu, would have every reason to work with Mercedes’ board to avoid the company losing access to one of its most important and profitable markets.

In the end, this may be a lot of sound and fury that results in no significant change. But it is a striking illustration of how Darwinian things have become in the global auto market as Western automakers confront the dual shocks of colllapsing sales in China and waves of Chinese vehicles landing in their home markets.

Germany’s shrinking auto industry

BMW and Porsche are taking advantage of the cover created by Volkswagen CEO Oliver Blume’s plans to cut 100,000 jobs to roll out proposed staff cuts of their own.

Porsche outlined plans to cut one in five jobs in its current workforce. BMW said it plans to cut 8,000 jobs in Germany.

Mercedes has warned of job reductions and on Tuesday cut its vehicle sales and revenue outlook for the year, blaming “the continued challenging market environment in China.”

Ford’s better idea: Sell less, earn more

Ford CEO Jim Farley gave investors something to cheer about on Tuesday, boosting the automaker’s full year profit forecast thanks to stronger pricing and faster-than-expected recovery from the U.S. government of duties paid under Trump’s now-invalidated IEEPA tariffs.

Like rival GM, Ford is earning more even as it sells fewer vehicles and accepts declining revenue. Dumping electric vehicles and selling more petrol-fueled SUVs and pickup trucks has been a tonic for the Motor City Two, as well as the U.S. operations of Stellantis.

Here’s a look at the new math for Ford:

In Q2, 2025, Ford Blue, the consumer combustion vehicle operation, had revenue per vehicle of $37,068 and pre-tax profit per vehicle of $1,005. In Q2 2026, total Ford Blue revenues fell by 1% and unit sales dropped. But Ford Blue revenue per vehicle was $40,845 and profit per vehicle rose 71% to $1,721.

Off-road vehicles, such as the Bronco SUV lineup, accounted for 25% of Ford’s U.S. sales. (Ford’s Q2 presentation deck is here.)

Ford still lost $900 million in Q2 2026 selling electric vehicles (mainly the Mustang Mach-E) but that was a $400 million improvement from year ago.

Ford would be doing even better if Novelis, its main supplier for the aluminum used to build F-series trucks, hadn’t been struggling with the aftermath of fires at a mill in New York. Ford projected the costs of the aluminum supply disruption at $1.5 billion for the year.

For all the hand-wringing about affordability and rising vehicle prices, Ford, GM and Stellantis are motoring along by focusing on selling feature-packed trucks to affluent Americans.

Who are these affluent Americans? Don’t look for them in the Hamptons. Instead, go to a KOA campground, state park or national park and marvel at the massive, chrome-jeweled Ford, Chevy and GMC heavy duty trucks purchased to tow house-sized trailers. This is a luxury market segment the Detroit truck brands own, and no Chinese automaker will invade.

Lightning laps

Tesla paid $1.95 billion for an unnamed AI hardware company, Electrek reported after scouring the company’s 10-Q.

China’s dominance of production of rare earth minerals widely used by the defense, auto and other U.S. industries is so iron-clad that the Trump administration will likely have to abandon its goal of blocking Chinese imports by January, Reuters reported.

CATL, the Chinese EV battery superpower, boosted quarterly profits by 35% in part because of a booming energy storage business.

Cheap cars are out of fashion in India, where younger buyers want something more than the stripped-down Suzukis their parents owned.

Penske Automotive Group’s majority shareholders have proposed taking the auto dealership chain private at $210 a share for the 27% of shares in public hands. PAG’s shares were trading at $220 on Wednesday morning, despite analysts cautioning that there is no likely rival offer.

GM is considering building sedans again for the U.S. market, Automotive News reports.

Geely and Ford plan to build Geely brand vehicles for Europe at a former Ford plant in Spain. Ford unloads a factory that it doesn’t need. Geely gets a European production base to sidestep tariffs. Incumbent European automakers get another headache.

Trump’s tariffs are costing the U.S. auto industry in more than money, the Center for Automotive Research outlines in a new report. The instantaneous (and rapidly changing) duties are stressing automakers and especially suppliers weakened by the COVID pandemic and waves of subsequent supply chain disruptions. Capital that could be invested in talent or new technology is instead being consumed by spending required to dodge tariffs.

Tariffs are making it harder for suppliers and automakers to innovate and creating “structural paralysis.”

“The automotive sector is losing talent to more lucrative tech industry jobs and stalling the innovation engine required for long-term success.”

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This week’s High Speed Rodeo will be a couple of days later than usual. I’m traveling and I also want to give Friend of the Rodeo Warren Browne time to finish his latest Vehicle Performance Tracker.

Stay cool! Stay tuned. Thanks for your support. More later…

I took a road trip over the weekend through Southern Ontario. We got soaked at Niagara Falls, rolled through vineyards and inhaled smoke from wildfires burning hundreds of miles away.

Fortunately, the Canadians we encountered didn’t get mad at us over President Trump’s comments about the dirty air.

But I’m sure glad we got home before Trump slapped a new round of 50% tariffs on Canadian goods, in part as retaliation for Canadian tariffs on U.S.-built cars. Those Canadian tariffs are in turn retaliation for Trump’s earlier tariffs on Canadian aluminum and other goods.

Which brings us to this week’s High Speed Rodeo and our theme song: Bob Marley’s “War.”

“Everywhere is war!”

The reignited and expanding war in the Middle East threatens the global economy and so the auto industry. Oil prices are on the rise again. Many would-be car buyers are sitting on their wallets waiting to see what happens next to the economy.

North American automakers face an increasingly nasty trade war between Trump and Canadian Prime Minister Mark Carney. Perhaps the two leaders will smooth things over around the scheduled July 27 opening of the Gordie Howe Bridge between Detroit and Windsor.

Traffic should have been crossing the span weeks ago. But Trump blocked the opening after an appeal from the owners of the Ambassador Bridge that currently carries much of the freight between Ontario and Michigan.

The bridge drama distracts from the growing competition North American automakers face from Chinese rivals in Mexico and Canada. There’s also increasing pressure on supply chains as Big Tech’s AI building spree sucks up memory chips used in vehicles.

The icing on the cake: Japanese and Korean automakers want to add capacity and fight for share in an American market that has flatlined.

OK! I’m late already. Let’s get going:

Consumers sing the Hesitation Blues

With vehicle prices and insurance costs plateaued at levels well above pre-pandemic norms, 43% of consumers surveyed by McKinsey said they are delaying their next vehicle purchase, according to a new McKinsey Mobility Consumer Pulse survey out last week.

Over half the U.S. consumers surveyed said they intend to spend less than $40,000 for a new car or truck, which is about 20% below the industry-wide average transaction price.

Cox Automotive, separately, parsed Q2 sales data and found that sales of compact SUVs, which had an average transaction price of $31,113, rose by more than 23% in June from a year ago. Large pickup truck sales rose by just 2.5%.

“While individual product and segment prices climbed, buyers generally gravitated toward lower-priced segments in June,” Cox analysts said. (The report is here.)

The shift toward smaller, cheaper vehicles is wind in the sails for Toyota, Hyundai and Honda. The three Asian automakers increased U.S. sales during the first half of the year, while sales at Ford and General Motors fell by 10% and 7% respectively, according to Cox data.

Sales of Hyundai’s cheapest model, the Elantra, jumped by 22% in June. Elantras start just below $23,000.

All together, the McKinsey survey and the latest sales data show middle income consumers digging in their heels at rising new vehicle prices.

Rivian China-proofs its R2 technology

Rivian has engineered Chinese technology out of its vehicle technology stack, software chief Wassym Bensaid told the HSR during a presentation of the new Rivian R2 at the company’s Plymouth, Mich. engineering center.

“None of the connectivity technology we have has any connection with Chinese IP,” Bensaid said, while demonstrating the features of the R2’s infotainment displays. That includes lidar sensors coming early next year to enable higher levels of automated driving. Good news for Rivian investors given the legislation proposed in Congress to ban Chinese connectivity tech from American roads.

Rivian is using a Qualcomm chip to power the brain of the R2, replacing five chips used in the architecture of the R1 model line, Bensaid said.

The R2 architecture “is exactly the foundation that we are using for the Volkswagen program,” Bensaid said. Rivian has a joint purchasing agreement with VW that allows Rivian to take advantage of the German automaker’s scale economies, he said. “We leverage on the Volkswagen volume,” he said. “Our relationship with semiconductor suppliers has completely changed. They see the entry into Rivian as the entry into a much higher volume…with the VW group.”

“There’s a lot of discussion to bring our technology and our platform into even more models” of the Volkswagen group, he said.

More factories for America

On the heels of Toyota’s announcement that it will build a new factory in Texas, Honda CEO Toshihiro Mibe told Japan’s Yomiuri newspaper that he is considering adding an assembly plant in North America. From the article:

The combined annual production capacity of the seven North American plants is 1.67 million units, leaving little room for further production increases. Mr. Mibe said, "We are almost at full capacity. Without a buffer, we cannot make up for lost production."

This as Hyundai pursues a $26 billion U.S. operations expansion strategy.

Friend of the Rodeo Warren Browne is working on a fresh Vehicle Performance Tracker report that will assess the impact of so much new production capacity aiming at a market that promises to be flat as the Kansas prairie for the foreseeable future.

Chinese brands make it in Mexico

The Mexican government earlier this year imposed stiff tariffs to stem a tide of Chinese vehicles. That did not stop Mexican car buyers from buying more of them.

Chinese vehicle brands boosted sales in Mexico by 30% during the first half, increasing their market share to 17%, Reuters reported.

Mexican officials said the sales came mostly from inventory stocked before the tariffs took hold. Shipments of Chinese vehicles dropped by more than 40% during the first five months of 2026 compared to a year earlier.

The message for established automakers is clear: Tariffs may choke supply, but not consumer demand.

McKinsey found that 60% of Gen Z and Millennial consumers surveyed in Germany and the UK would consider a Chinese brand.

Canada’s experiment in using quotas to limit sales of Chinese EVs will provide more data on how consumers respond to government efforts to restrict choice. My prediction: Canada will open the door wider to Chinese brands, especially if they are willing to take over empty Motor City Three factories in Canada.

“We can’t expect to keep them out forever,” Ford Chair Bill Ford said at an Axios conference in Washington last week. The comments about competing with China start at about 12:30 in this video.

Lightning Laps

Lucid declared that it is not dead yet. The premium EV maker majority owned by Saudi Arabia’s sovereign wealth fund denied reports that it was preparing to file for bankruptcy protection or go private with help from restructuring firm AlixPartners. That gave shares a lift. All eyes will now focus on what CEO Silvio Napoli has to say about production and liquidity during an Aug. 4 investor call.

Stellantis said its global vehicle sales rose 10% in the second quarter from a year ago. CEO Antonio Filosa named new leaders for two of the automaker’s most important brands, Ram and Jeep.

China has Western economies by the throat thanks to its dominance of rare earth minerals processing, the International Energy Agency said in a new report. The IEA concluded that $6.5 trillion of industrial output could be throttled if China cut off exports of rare earth minerals and related products.

Autonomous ride service Zoox said it will recall its self-driving vehicles because they cannot detect smoke. A Zoox vehicle drove into an area where emergency workers were fighting a fire.

Vindication for hybrids. A new study concluded that subsidizing sales of hybrid vehicles is a more effective way to cut vehicle CO2 emissions than subsidizing electric vehicle sales. “…for a BEV-focused subsidy policy to outperform an HEV-focused policy, the carbon intensity of electricity generation would need to fall by approximately 45%,” the paper’s authors wrote using data from South Korea. This will be music to the ears of Akio Toyoda and others who have urged more government support for hybrids.

The study is here. H/T to Reilly Brennan’s Future of Transportation newsletter.

Speaking of subsidies. California will offer a $3,500 subsidy for EV purchases, partially replacing the $7,500 federal tax credit erased by the Trump budget bill.

Bummer of the week. Writer Matthew Shaer warns in the New York Times magazine that the U.S. auto industry could be “sealing its own doom” by turning away from globally competitive electric vehicles.

This piece matters as much because of the Times platform and its influence on Wall Street and in Washington as for the dour outlook, which is well inside the auto industry commentariat’s Overton window.

Heck, I wrote this back in February: “The pessimistic scenario: Trump’s tariffs and rollback of federal support for EVs will make America a super-sized Havana where Detroit’s national champion automakers crouch behind tariff moats harvesting cash from combustion trucks built on last century technology.”

That said, predicting the future in the World of Cars is a risky business. Automakers often do their best work when their backs are against the wall.

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Greetings from Motown!

No rest for the wicked, eh? You take a few days off and look what happens: Belgium…Belgium! Humiliates the United States! Why can’t they stick to beer and chocolate?

Nevermind. This isn’t a soccer newsletter. Let’s get into a busy couple of weeks in the World of Cars since the HSR took a break to celebrate America’s 250th Birthday.

• Volkswagen faces a crisis comparable in scope to the reckoning at General Motors in the 1990s and 2000s.

• Trump’s top auto safety regulator gives AI driver developers hell.

• The USMCA is history. Maybe.

• U.S. auto sales are….not bad at all.

• Tesla’s Q2 deliveries confound the skeptics.

And much more. Here we go:

Twilight at Volkswagen

Volkswagen CEO Oliver Blume and CFO Arno Antlitz tried and failed last week to convince the German auto champion’s unions and government shareholders that VW must be made radically smaller and less German to survive.

The rejection last week by VW’s supervisory board of Blume’s plan to cut up to 100,000 jobs and shutter uncompetitive German factories is no surprise.

VW was created to provide jobs for German workers and advance Germany’s industrial power. Shareholder value is secondary to those imperatives.

But as the Wall Street Journal’s Stephen Wilmot shows in this piece, Volkswagen’s role as a job creator is now in direct conflict with what it must do to survive.

Consider this from Wilmot’s piece:

But progress in reducing the workforce has been slow, with the company relying on early retirement programs and voluntary layoffs to keep peace with the union. At the end of last year, Volkswagen still employed about 660,000 workers, roughly one for every 14 cars it sold.

Toyota, the only company similar in scale, employed roughly 410,000 to sell 11.3 million vehicles—about 28 vehicles per employee. The Detroit Three have sales-to-staff ratios in the mid-20s.

VW’s crisis is the culmination of years of failure to adapt to rapid changes in the competitive environment.

Volkswagen’s German factories never fully embraced Toyota-style lean production. The company’s attempt to dodge the costs of cutting CO2 emissions and going electric led to the catastrophic Dieselgate scandal that incinerated billions of euros.

VW had a thriving business in China to cushion that blow. Now, VW’s China business is in free fall. First half sales for the group in China tumbled 26%. The days when black Audis were company cars for Chinese Communist Party operatives are over.

In 2019, before the global COVID pandemic, VW sold 4.2 million vehicles in China. At the current pace, the company will be doing well to clear 2 million.

VW remains the No. 1 automaker in Western Europe. But its profit margins there are threatened by growing sales of Chinese-brand vehicles.

In North America, VW’s official target as of two years ago was to build to a 10% share of the U.S. market by 2030 from roughly 4% currently. A fleet of stylish EVs, including the adorable ID.Buzz electric minibus, were supposed to lead the charge. Then President Trump yanked the EV subsidy rug out from under VW and the rest of the industry. The ID.Buzz for America? It’s going on hiatus.

Two words now come to mind regarding VW’s U.S. market share goal: Fat. Chance.

The need for Volkswagen to streamline its manufacturing footprint, overlapping model lines and unwieldy stable of brands was obvious before Chinese rivals and Tesla began offering smarter vehicles with better technology at lower prices.

Antlitz and other senior VW executives have been pushing restructuring plans for years. But labor and political stakeholders have fought efforts to accelerate job cuts faster than the pace of attrition.

Blume has his job in part because the union representatives who hold half the seats on VW’s board of directors got fed up with former CEO Herbert Diess’s demands for swifter cuts. (Diess also frustrated figures in the Porsche and Piech families who are major shareholders and board members.)

Now, Blume holds the metaphorical hand grenade. He told investors in a statement, VW plans to cut its global “model lineup will be gradually streamlined by up to 50 percent and concentrated on the most attractive market segments.”

Note the word “gradually.” Then consider these words from CFO Antlitz:

“…the cost reductions planned to date under the agreed programs are not sufficient in the current economic and geopolitical environment. We must instead fundamentally realign our business model and achieve structural, sustainable improvements.”

Which is it? A five-alarm, smash-the-glass emergency, or a set of problems the company can manage over an extended period of time? Investors see it as the former, which explains the 75% drop in VW’s share price since 2021.

It is cold comfort to VW’s stakeholders that all the German automakers are getting clobbered in China. It is Twilight for the German Auto Gods in the world’s biggest market.

U.S. automakers, unions and policy makers watching the VW crisis can whisper “there but for the grace of 100%+ tariffs and increasingly assertive policies to ban Chinese auto technology go we.”

My At the Wheel podcast partner asked if there has been a comparable crack-up at such a large legacy automaker. The answer is yes, at General Motors in the early 1990s.

During the late 1980s, GM steadily lost market share to Toyota and other Japanese rivals. GM also ceded market share and profits to Ford and Chrysler which outplayed the No.1 automaker in the high-volume mid-size sedan (Generation 1 Ford Taurus,) SUV (Jeep Cherokee/Ford Explorer) and minivan markets.

As GM’s U.S. sales fell, the burden of paying idled U.S. union workers and sustaining under-used factories grew. Profit margins collapsed. The United Auto Workers fought efforts to close factories and cut staff.

In December 1991, after racking up more than $7 billion in losses, then-CEO Robert Stempel announced plans to slash 74,000 jobs and close 21 North American factories. (I covered this event for the Wall Street Journal. Now I cannot find links to my own WSJ clips. There is this book.)

Of course, we now know that even this jaw-dropping “Christmas massacre” was not enough.

GM returned to profitability in the late 1990s and early 2000s, and also returned to a more gradual approach to rationalizing its costs. When the U.S. financial markets collapsed in 2008, GM’s cost structure was too heavy to stay afloat and it became a bankrupt ward of the state.

Today, GM has 51,000 U.S. manufacturing workers, and about 155,000 employees worldwide. That’s roughly 20% the number of total number of workers GM had in 1990. GM’s sprawling parts operations: Spun off. European business: Sold to what is now Stellantis. Australian operations: Shuttered. China business:

GM now makes good money, virtually all it from selling and financing trucks and SUVs in North America. Its China operations are barely profitable on sales that are roughly 1 million vehicles a year lower than before the pandemic. GM China’s Q2 sales fell 20%, according to Automotive News.

Could Volkswagen follow a similar road to a smaller, more sustainable business? That’s what Blume is betting, in effect. Whether VW’s journey will also include a government bailout of some sort, as GM’s did, is a question for another day.

NHTSA to AV operators: Cut the crap

The Trump Administration has done more to clear the way for large-scale deployment of automated, AI-driven vehicles than any of its predecessors.

That makes the scalding letter that National Highway Traffic Safety Administration chief Jonathan Morrison sent last week to “Driverless Automated Driving System Developers” all the more significant.

Here’s the nut:

“Over the past several months, NHTSA has identified a clear pattern of driverless AVs interfering with law enforcement and other first responders. The agency has documented multiple instances in which AVs drove directly into active emergency scenes, blocked the paths of ambulances and firefighters, or failed to recognize and respond to basic safety conditions like flashing lights, flares, smoke, fire, and traffic cones.

This is unacceptable. To state it bluntly: an AV that cannot safely interact with first responders is a danger to the general public.”

Sometimes, it’s necessary for reporters to provide clear language interpretations of obtuse regulatory agency statements. Not in this case.

It turns out that Morrison and his staff have seen the same pattern of dangerous cock-ups by Waymo, Tesla and other AV operators that the HSR and others such as have been documenting.

Morrison told Waymo et al to be ready to tell him by the end of the month what they’re going to do to stop their automated vehicles from driving into construction zones and obstructing emergency vehicles.

Help me so I can help you is a polite way to frame the administrator’s message. If you keep $%^!ing up, I’m going to drop the hammer on you is another.

USMCA Uncertainty is here to stay

The open trade agreement that allowed automakers to build complex, cost-effective North American supply chain and manufacturing strategies is now, officially, kaput.

President Trump’s decision not to extend the US-Mexico-Canada trade agreement he signed and celebrated during his first term means automakers could face an ever-shifting tariff landscape as the terms of North American commerce are negotiated on a year-to-year basis.

Or, there could be a deal, perhaps after the mid-terms. Auto industry executives have their fingers crossed.

In auto industry terms, Trump’s decision means manufacturers will not have the solid ground they prefer to make long-term investments in factories, supply chains and jobs.

The Trump administration’s position is that the solution is to make vehicles for the U.S. market entirely in America with American-made parts, metals and tooling.

That will be difficult to impossible for automakers to manage in the near term. The U.S. does not have the tool and die making capacity to support its auto sector, and relies on Canada and Mexico for many critical materials and components. And that’s leaving China out of the equation, which no automaker living in the real world can do.

Lightning Laps

Tesla Q2 deliveries hit a second-quarter record of more than 480,000 vehicles, blowing past Wall Street expectations. All but 12,364 of the deliveries were Models 3 and Y. Tune in for the Q2 results call on July 22. Separately, EV maker Rivian raised its full-year delivery forecast by 3,000 vehicles.

U.S. biofuel producers can’t produce enough product to meet the Trump Administration’s ambitious goals.

Russians are clamoring for Chinese EVs to beat soaring petrol fuel costs.

U.S. auto sales motored along in June at 16.5 million annualized pace. The pump price induced sales slump didn’t happen.

License plate reading surveillance cameras operated by Flock Safety incorrectly identified as stolen the Range Rover press car auto writer Joel Feder was driving. That resulted in Feder being stopped by police officers with guns drawn. His piece about the incident is the talk of the auto media community, and fresh ammunition for critics of AI-powered surveillance.

With prices for memory chips soaring, GM and Ford signed deals with Micron to secure supplies of DRAM silicon.

Fiat will launch its tiny Topolino electric city car in the United States at a base price of $13,995. That’s roughly the same price as a Kandi Cowboy electric side-by-side ATV that claims a 60-mile range to the Topolino’s 46.

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Greetings from Motown!

Citizens of the World of Cars are taking stock of the fruits of a half year’s labors before shifting into summer vacation mode. There’s a lot to process.

• The U.S auto industry is headed for the worst new product drought in decades.

• Inflation is eroding the purchasing power of American consumers.

• Trump’s tariffs and Chinese competitors are chomping at legacy auto’s profit margins. Vehicle exports from China are headed for a record, according to new data from Ember.

• Volkswagen, under intense pressure in China and Europe, sent an SOS to the German government and unions, warning of 100,000 job cuts and multiple plant closures. The tactic leaked plans prompted a scramble in Berlin to prevent plant shutdowns, aka some form of subsidy scheme.

• Industry executives are calling for trade deals that createn a Fortress North America to protect the U.S. auto industry from a similar fate. But did a 1,000-foot high wall protect Westeros?

There is some good news.

Ford scored a much-needed victory over its quality demons. The result was years in the making, and driven by human engineers who stepped in when AI couldn’t cope.

Plus, U.S. gasoline prices are coming down at long last. Although they are still roughly 30% higher than they were before Trump launched his war on Iran. (That is over, isn’t it?)

Speaking of summer vacations, the High Speed Rodeo is taking one after today. I’ll be back July 13. Happy Independence Day!

With that, let’s dive in.

Big Auto’s EV hangover

Legacy automakers could write off as much as $100 billion for failed electric vehicle investments. That destruction of capital has consequences. Automakers plan to slow the pace of new model launches over the next two years, pushing the average age of models for sale in dealerships to a record 4.8 years by Model Year 2028, says industry analyst John Murphy in his latest Product Pipeline Report.

Put another way, if you leased a vehicle three or four years ago, you could come back to the dealership to find little has changed. (New cars that look like 2023 models are one reason why Tesla sales are flat to down, though recent Tesla sales numbers from Europe are positive. All eyes will be on Tesla’s Q2 sales report, likely dropping sometime this week.)

“They are looking at a very similar vehicle to what they own at a price point that’s 20-30% higher,” Murphy told the HSR. “Their motivation to buy another vehicle is very low.”

Things get better starting in 2029, Murphy said. But the macro picture for the auto industry isn’t pretty.

Looking back at the industry’s first 130 years, Murphy reckons that just 15% of automotive brands launched from 1895-2025 have survived. Looking forward, Murphy said history is likely to repeat itself with a substantial culling of brands, many of them (but not all) Chinese.

The threat to U.S. and European automakers from Chinese rivals is also a central theme in the latest survey of global auto industry competition from consultants at AlixPartners.

Automakers face a “triple conundrum” with the end of globalization as we knew it, stagnating demand in most major markets (except for Chinese imports) and the capital destruction caused by the “reset” of electrification strategies in America, AlixPartners concludes.

Automakers in America are watching as Europe conducts a live action preview of what could happen if Chinese automakers breach the tariff and national security policy walls currently protecting the U.S. market. Chinese automakers could have a 17% share of the European market by 2031, with strong presences in the automaking nations of Germany and France, AlixPartners predicts.

In the short term, Toyota, Hyundai and the Detroit automakers have a sheltered U.S. market. Chinese auto brand Polestar last week said it will quit the U.S. market later this year because of Trump administration anti-China policies.

But U.S. automakers face “an existential challenge of eroding long-term competitiveness” if they “squander the window” of time afforded by current U.S. policy to learn how to compete with the best Chinese automakers on metrics such as speed to market, software capability and electric drive efficiency. (Underscoring the narrowness of the window, Canadian officials said Chinese automakers are exploring local producton deals as they gear up to launch sales in the country. Chinese vehicles are already in Mexico.)

The new USMCA trade deal, or lack of one, will be central, AlixPartners auto practice head Mark Wakefield said during a web conference. Compliance costs for a new U.S.-Mexico-Canada treaty with stricter regional content rules could run as much as $2,000 a vehicle, he said. (That’s much of the profit margin on anything other than a large pickup or SUV.)

But worse for automakers would be replacement of the three-nation USMCA with bilateral deals that chop North America into separate markets with separate supply chains, he said.

“If the goal is to face off against China, it doesn’t make sense to face off U.S. vs. Mexico” and U.S. vs. Canada, Wakefield said. (You can hear more of his reasoning in this episode of Autoline After Hours, which I guest co-hosted with John McElroy.)

The lessons from Ford’s quality coup

I am old enough to remember when “Quality is Job 1” was the theme of every Ford ad on television during the 1980s.

Quality has continued to be Job 1 at Ford, but not in a good way. During the past several years, Ford’s industry-leading number of recalls and sky-high warranty costs were an embarrassment to CEO Jim Farley. In 2024, he threatened to slash management bonuses if quality didn’t improve.

The latest J.D. Power Initial Quality Study gave Ford executives and production workers something to celebrate. The Ford brand bounced from below average in 2025 to best among mass market brands and #3 overall.

The story behind the scenes at Ford illustrates how hard it is for automakers to regain control of quality once it is lost.

More than three years ago, Ford began an intensive and expensive overhaul of its quality control strategy. The company put new executives in charge, invested in AI tools for catching quality snafus and then re-hired veteran engineers when the AI didn’t deliver.

The 2023 launch of the current generation of Super Duty pickup trucks at Ford’s Kentucky Truck plant was the first major road test for the new approach, Ford executive director for quality Josh Halliburton told the HSR.

“We wanted to make sure that launch was a good launch,” he said. “We did extra testing. We learned a lot.” Some of that learning came at high cost: Stopping production and road testing thousands of trucks before delivering them to customers.

During subsequent new model launches, Ford engineers got suppliers involved earlier in the production process to discover and fix problems before they escaped to customers. Workers scrutinized assembly line work stations to anticipate “what could go wrong and why,” Halliburton said.

Getting a good score on the Power new vehicle quality study is hard. Goofs by workers at the assembly plant are less often the problem now than badly designed software that causes the infotainment system to malfunction. Problems with Android Auto and Apple CarPlay were “the largest single contributor to the year-over-year decline in infotainment quality,” Power wrote in its latest report.

The next test for Ford will be improving long-term reliability, Halliburton said. Last year, Ford was below average among brands ranked in J.D. Power’s Vehicle Dependability Study.

Eight-year-old cars are hot

Here’s a sign of how rising new car and truck prices are warping the overall U.S. vehicle market: Prices for Eight to 10-year-old used vehicles are trending well above average as more consumers seek them out, according to new data from Cox Automotive’s Manheim operation.

By June of the average year, a 10-year-old used vehicle usually sells at auction for 98.1% of the price it would have fetched in January of the same year, according to Manheim data.

But this year, wholesale prices for 10-year-old rides are trending at 104.2% of the January price. As shown above, all age cohorts of used vehicles are trending higher than normal, according to Manheim data.

Used cars are normally depreciating assets. These days, they are appreciating, driven by the laws of supply and demand. Many households cannot afford the brand new vehicles that they want, or choose not to foot the inflated tab for a new ride when a used one serves the purpose.

There’s a lot more from Cox Auto’s mid-year review of the U.S. auto market here.

Lightning laps

U.S. safety regulators are investigating why a Tesla crashed into a house, killing a woman inside.

Toyota sales plunged nearly 32% in China during May, dragging the group’s overall sales down 7.2%.

Ferrari replaced its head of marketing following the sour launch of the Luce electric vehicle, and hired a BMW executive as the replacement. In China, early demand for the Luce appears to be strong, albeit at ultra-niche levels.

Struggling EV maker Lucid is cutting another 18% of its staff.

Big pickup trucks and SUVs driving up deaths for pedestrians and cyclists, the New York Times concluded based on research correlating U.S. highway fatality statistics and changes in vehicle design.

Tesla and Britain’s NatPower agreed to the first phase of a $5 billion deal for Tesla to supply backup power infrastructure to the utility. Power grid infrastructure is the new black for automakers with excess EV battery capacity.

New vehicle technology can distract drivers from watching the road. What if technology could help drivers pay attention to their surroundings? That’s the issue MIT researchers explore in a new paper here.

High tariffs have not produced a boom in U.S. auto manufacturing jobs, as the HSR and analyst Warren Browne have reported. But it’s not just the auto industry. Reuters manufacturing reporter Tim Aeppel went to Iowa to investigate why Whirpool is slashing the workforce at an appliance factory even though imported household appliances face up to 50% tariffs.

Carvana is getting fresh attention from traditional car dealers with its high-tech approach to selling new cars. Right: Carvana doesn’t just sell used cars. The company has acquired several new car dealerships representing Chrysler/Dodge/Jeep/Ram and is installing futuristic, multimedia cube displays to help shoppers choose a ride. Commissioned sales personnel are out.

Automotive News reports that Carvana’s cube-equipped Dallas store was No. 5 among Stellantis dealerships in May.

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Greetings from Motown!

What better way to greet the summer solstice than to wander through the streets of Henry Ford’s Greenfield Village admiring the annual Motor Muster of classic cars and trucks from every decade since the 1930s?

So much chrome! So many curves and angles! Tailfins! V-8 Power! Space age names!

There were a few Volkswagens on display, but cars from Japan were conspicuously absent. This is Detroit after all.

Cars from the Golden Age of Detroit aren’t as golden as they look when they are safely parked at a classic car show. Try driving one of these things. The shaky steering, undersized drum brakes and absence of impact protection will have you looking at your high-tech, airbag equipped, wind-tunnel designed modern ride with new respect.

I wonder what a show like this will look like in 50 years. Will Buick, Ford and Dodge be artifacts of the past, as the DeSotos, Studebakers and LaSalles on display at Greenfield Village are today? (For more from the Motor Muster, see the gallery below.)

But no more time for nostalgia. The future is coming at us at breakneck speed, and it doesn’t see the guardrails. Today, we’ll look at the latest troubles at U.S. robotaxi leader Waymo, fresh signs of stress among Germany’s automakers and new data that shows the hidden power of the Tesla brand.

Waymo’s “edge case” problems

For the second time in a month, Waymo is recalling the roughly 3,900 robotaxis it has deployed on U.S. roads to fix the AI driving software so the vehicles don’t plow into marked highway construction zones.

Waymo and National Highway Traffic Safety Administration regulators counted 13 incidents in April and May in which Waymo robotaxis drove past ramp closure signs or into freeway lanes blocked off for “active construction.” The official account is here. A hair-raising description of one incident from a passenger stuck inside the Waymo as it barreled through a construction zone is here.

Waymo realized that it had a problem with its robotaxis driving into construction zones in April, NHTSA records show. As of June 17, Waymo told the agency it didn’t have a fix. “The remedy is currently under development. In the interim, Waymo modified the scope of vehicle operations to restrict freeway driving,” the company told regulators.

The latest Waymo foul-ups come as Alphabet and its rivals are accelerating efforts to expand driverless ride services in U.S. cities. Waymo geared up its service in six of the U.S. cities hosting World Cup soccer matches.

The Trump Administration meanwhile is pushing ahead with regulatory relief for the autonomous driving industry. A package of proposals that would allow automakers to deploy more vehicles with self-driving technology that doesn’t comply with current federal vehicle safety standards is awaiting approval at the Office of Management and Budget.

Transportation Department regulators are reviewing proposals from Amazon-backed robotaxi operator Zoox to deploy more “purpose-built” autonomous vehicles, NHTSA chief counsel Peter Simshauser said during the Center for Automotive Research Management Briefing Seminar last week.

The administration is reviewing vehicle safety standards broadly to assure rules don’t “ossify engineering choices,” he said.

The fight over what constitutes prudent regulation and what government oversight threatens to ossify technology is far from over. U.S. Senators are digging into whether Tesla has exaggerated the safety benefits of its semi-autonomous “Full Self Driving” technology.

In Europe, Dutch regulators have approved the use of FSD on their country’s roads, a potential gateway to FSD getting approval throughout the EU. But Reuters reports that Swedish regulators are leaning toward refusing clearance for FSD unless Tesla reprograms the system so vehicles cannot exceed speed limits.

BMW amplifies German Auto AG’s angst

One month after taking over as BMW CEO, Milan Nedeljković and BMW’s board warned investors to expect “a significant decline in profit and free cashflow in the second quarter versus previous year.”

Not even three months ago, former CEO Oliver Zipse assured investors BMW was “on track” for “stable earnings.” That was then. The disruption of the global economy caused by the U.S.-Israel war with Iran and what BMW described as “the negative development in the Chinese automotive market…. particularly for non-electric vehicles” have rendered Zipse’s outlook inoperative.

BMW’s share price tanked, wiping out more than 5 billion euros in valuation.

BMW now officially joins Volkswagen, Porsche and Mercedes in struggling to adapt to a world where German brands don’t have the power they once had to command price premiums and steady consumer demand.

German brands are now your father’s Oldsmobile as far as affluent, young Chinese consumers are concerned.

Chinese brands are gaining market share in Europe. In the United States, tariffs are biting into profits and sales for the German brands.

Next up: Deeper cost-cutting across the German auto sector, which would also hit German suppliers.

Other European brands are floundering as well. Investors aren’t buying Jaguar Land Rover’s plan to focus on growth in the United States to offset its decline in China. Maserati, the troubled Stellantis luxury brand, is undergoing yet another strategic reboot, which could include an alliance with another automaker. (That’s a form of consolidation, as is JLR’s alliance with Stellantis in the U.S. market.)

Tesla’s secret weapon

Loyal repeat buyers are the most valuable customers any brand has. Doubly so in the auto industry where purchases happen years apart and competition is always brutal.

This is why the chart above from S&P Global Mobility’s annual brand loyalty study is so revealing. In general, the more models a brand has to serve different needs across a diverse customer base, the more repeat buyers it has.

There’s a notable exception: Tesla.

“Tesla has leading loyalty among luxury brands despite having only a few models,” S&P Global’s Tom Libby told a webinar last week. Libby has been analyzing repeat buyer data for years.

Elon Musk’s abrasive X.com persona and his political adventures get a lot of media attention. But so far, they have not substantially eroded Tesla owner loyalty in the United States.

Meanwhile, for those of you who discount Lexus as the “accessible beige” of luxury auto brands, S&P Global reminds you that about 23% of Lexus owner households are super-loyalists, meaning their three most recent vehicle purchases were Lexus vehicles. That’s tops in the luxury segment.

Among mass market brands, Ford has a 32% share of super-loyalists, followed by Chevrolet (29%), Honda (27%) and Toyota (26%.)

Lightning laps

Demand for big vehicles softened rapidly as gas prices accelerated this spring, the head of General Motors’ North American operations said during the Center for Automotive Research Management Briefing Seminar. Normally, Duncan Aldred said, it takes six months after gas prices spike for a significant shift in the mix of large vs. small vehicles to show up in sales data. But in the case of the Iran War, which started Feb. 28, that shift is happening now, he said.

Fortunately for consumers and the Motor City Three’s big truck franchises, gas price are back below $4 a gallon. Oil tankers are moving again through the Strait of Hormuz.

Rivian is cutting its workforce, again, as it tries to slow its cash burn.

A new wave of electric pickup trucks will try to dispel the curse laid on the EV pickup segment by the flops of the Cybertruck and the F-150 Lightning. The WSJ’s Dan Neil handicaps the coming vehicles from Slate, Ford and Telo here.

The United Auto Workers is blasting General Motors for deploying collaborative robots to do tasks at its “Factory Zero” EV assembly plant in Detroit after cutting the operation’s workforce by 1,000 people. “Our manpower is being taken away from us,” UAW Local 22 President James Cotton told Crain’s Detroit Business. “From top to bottom, we’re disgusted that they have cobots in our plants.” (A non-paywalled version of the story is here.)

How the union responds to next-generation automation promises to be a contentious issue when the UAW and the Motor City Three negotiate new contracts in the spring of 2028. Who will lead those talks is up for grabs in a contest for the UAW presidency in which incumbent Shawn Fain faces five challengers.

EV registrations rose by 3% globally in May, but are flat for the year to date, according to new data from Benchmark Mineral Intelligence. Through the first five months of 2026, rising EV sales in Europe and markets outside China, Europe and North America barely offset sharp declines in EV demand in China and North America. The U.S. and China have both cut EV subsidies.

Carmax shares tumbled after the used car retailer’s new CEO said its costs were too high.

Automakers are regretting an effort to enlist President Trump’s support for their position that “right to repair” laws should retain some limits on access to vehicle data for individuals and independent repair shops. Representatives of Ford and GM learned, as certain world leaders have, that meetings with Trump don’t always produce the desired result. Jim Motavalli wrote a clear account of the complex issues in Autoweek,

High Iran War gas prices are battering the RV industry, long a canary in the economic coal mine.

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One more thing. Here’s that gallery of classics I promised way up at the top.

More later…

Greetings from Motown!

Sorry for the delays!

I spent Monday morning at the Center for Automotive Research Management Briefing Seminar where I moderated a discussion with Flavio Volpe, head of Canada’s Automotive Parts Manufacturers Association and Paul McCarthy, president of the U.S. auto supplier trade group MEMA.

The official title of our session was “North America’s Competitive Future.” The real theme of the discussion, and presentations by other speakers, boiled down to this: What are we going to do to compete with China?

Pat D’eramo, CEO of Canadian auto tech supplier Martinrea, U.S. Rep. Debbie Dingell of Michigan and Colin Bird consul general of Canada in Detroit brought similar messages:

• The North American auto industry is deeply stressed by six years of pandemic, semiconductor supply chain chaos, tariffs and U.S. trade policy volatility. More than one speaker showed the economic uncertainty index chart below:

  

• The North American auto sector’s long term existence is threatened by Chinese rivals. (The Xiaomi YU7 above was on display at the conference to underscore that point.)

• Continuing a U.S-Mexico-Canada free trade agreement for as long as possible is necessary to provide a stable, open trade zone for auto manufacturers to build scale in critical minerals, tool and die making, automation and other foundational manufacturing now dominated by the Chinese.

On that last point, Martinrea’s D’eramo said the United States right now cannot build vehicles without Chinese materials.

The special steel used in brake line tubes? “No steel mill in the United States makes it,” he said.

The heavy metal forming dies needed to produce vehicles? The few remaining U.S. manufacturers of large stamping dies could produce just 7% of what’s needed to support a year’s worth of vehicle launches. U.S. parts makers and automakers get most of their dies from China, he said.

China’s domestic market plus its growing exports give its automakers a commanding advantage in scale economies, before you get into whether government subsidies tilt the scales further.

Non-Chinese automakers and suppliers need a unified North American market at roughly 20 million vehicles annually to fight back. (A European market that wanted the same kinds of vehicles as the United States would be even better, but that’s not happening.)

President Trump has said he’s not sure the United States needs to extend the current USMCA. Much more on that here, in case you missed i

I don’t make bets on predictions markets. For those of you who do, my co-panelists Volpe and McCarthy said they would bet that a deal is done by the end of the year. Volpe said it could be by this fall.

There’s plenty more to catch up on from the World of Cars. And that’s without trying to work out whether the apparent deal to end the blockade in the Straits of Hormuz will drop gas prices.

Let’s motor…

SpaceX stock lifts off for Mars

Elon Musk is allowed to operate under a different set of rules than most people. The special treatment given the SpaceX IPO is one more example.

The whole world will be watching now that Musk is a trillionaire overseeing corporations with strategic ties to the U.S. military, the U.S. space program, critical telecommunications infrastructure, AI, energy grid technology, robot driving, and China.

Most relevant to the auto sector, SpaceX President Gwynne Shotwell gave fresh hope to people betting that one of Musk’s next moves will be to merge SpaceX and Tesla.

In the meantime, Musk is once again using the platform provided by his celebrity, wealth and ownership of the X.com social media channel to weigh in on political and social controversies far afield from his businesses. His recent posts in response to a racially-charged murder in Southampton drew a rebuke from UK Prime Minister Keir Starmer.

Tesla sales have been recovering in Europe as oil prices rose and memories of his previous forays into EU politics faded.

BYD wants to be your Number One

BYD Chair Wang Chuanfu said the quiet part out loud, telling investors he wants the Chinese EV and battery power to be the #1 global automaker in five years.

Wang’s bold future goals helped deflect attention from BYD’s sliding stock price and not-so-great sales performance in its home market.

Being #1 in global sales volume is not always the best thing for an automaker. Toyota’s drive to overtake General Motors in the early 2000s undermined the automaker’s legendary quality discipline. Chair Akio Toyoda had to humble himself in a 2010 Congressional hearing after Toyota executives delayed recalling millions of vehicles with faulty floormats linked to runaway acceleration.

Volkswagen’s diesel emissions cheating scandal derailed its drive to lock down the leading position in the global market.

Toyota sold more than 11 million vehicles globally last year. VW sold about 9 million. To surpass Toyota, BYD would have to more than double global production, and build or acquire factories capable of building more than 6 million vehicles. That would be roughly 20 to 22 factories.

BYD is on it. The company is in talks to buy an existing European factory, an executive said. BYD plans launch sales in Canada, and could bring its ultra-fast charging technology to the U.S. market’s northern doorstep.

The auto industry’s never-ending quality problems

Warranty costs have almost doubled since 2012 and now exceed R&D spending at some automakers, McKinsey found in a recent study of global auto industry quality.

Warranty expenses hit $58 billion in 2024, despite decades of crusading to improve manufacturing and engineering systems to avoid defects and detect them sooner.

The rise in warranty costs is driven in part by product complexity. Vehicles rely on software interacting with hardware often built by multiple companies, McKinsey’s Martin Kellner, a co-author of the study, told the HSR.

“Then you have the constant pressure to develop faster,” he said.

Legacy automakers collect terabytes of data about quality issues from connected vehicles, dealers and customers. But “only 15 percent report having centralized all relevant quality data,” McKinsey found.

“OEMs are often very siloed,” said Kellner. “Every department is using its own tools.”

Isn’t this a job for AI? Probably. But so far, McKinsey found “only 18 percent of respondents report that their organization uses AI or machine learning in production to predict quality issues before failure or to accelerate root-cause identification. In most cases, AI remains confined to pilots or isolated use cases.”

Rivian’s make or break R2 launch

Electric truck and SUV maker Rivian is accelerating the launch of its $50,000 and up R2 SUV, shipping the first vehicles to customers.

Not since Tesla launched the Model 3 has a U.S. automaker had so much at stake in a single vehicle line. CEO RJ Scaringe told Wired in an interview that if the R2 flops, the company would have to “step back and reconfigure the business.”

Reviews so far are mostly positive. Popular YouTube reviewers Doug DeMuro and Marcus Brownlee were strongly positive. “A very compelling vehicle,” Brownlee said in a video that now has 1.6 million views.

“The best electric vehicle I’ve ever driven,” declared DeMuro, whose Rivian review video now has 1.5 million views.

Tech journalist Seth Weintraub in Electrek took a tougher line.

The Rivian R2 will take less than a half hour to recharge from 10% to 80%, but that is not up to the standard set by the best Chinese EV makers which have 800 volt charging systems that can get to 80% in under five minutes, not to mention Hyundai which has 800V models that can charge to 80% in under 20 minutes.

Rivian’s Q2 delivery and financial report will likely be the first useful view of how well the R2 is doing, and even that will be preliminary. It will take months to determine whether R2 demand is sufficient to fill the assembly lines at the company’s Normal, Ill. assembly plant. Rivian’s planned second factory in Georgia depends on that.

The more people know about autonomous vehicles, the less comfortable they are having them around, according to a new study by JD Power and MIT. More here.

GM is following Tesla, Ford and other automakers by pivoting battery production and EV charging technology toward the fast-growing market for grid energy storage and backup. GM outlined plans to use yet-to-be commercialized sodium ion batteries for grid storage, and said it will offer EV owners software to sell energy back to the grid.

Reuters reported GM may ditch LFP/ lithium iron batteries if its sodium ion cells work out as planned.

Honda CEO Toshihiro Mibe repelled an attempt by some retired senior Honda executives to convince Honda’s board to oust him, Reuters reported in a fascinating look behind the scenes at a company that generally avoids public drama.

Under Mibe, Honda made failed bets on EVs, underperformed in China and posted its first loss as a public company. The push to replace him failed. Instead, he will take a 30% pay cut for three months.

The 16 top selling cars in China were all electric vehicles last month.

The Ram truck brand’s marketing team has vibed with the Zeitgeist and concluded that what American men want in this 250th year since the Declaration of Independence are over-the-top muscle trucks sold with UFC Bro bluster, smoke bombs and lots of red, white and blue. It’s fun to read the New York Times “man from Mars” story that treats this as a new phenomenon.

What more can you say about the Ferrari Luce? Plenty if you are design and marketing experts Sam Livingstone and Matt McElvogue. Listen to their takes here.

At The Wheel w/ Tu Le & Joe White

Ferrari’s Biggest Gamble in Decades? Designers React to the Ferrari Luce | At The Wheel #23

In this special edition of At The Wheel, Tu Le sits down with two leading design experts—Sam Livingstone (Car Design Research) and Matt McElvogue (Teague)—to break down one of the most polarizing vehicle launches in recent memory: the all-new Ferrari Luce…

Listen now

3 months ago · 1 comment · Tu Le

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It’s starting to feel like summer in Detroit, at long last. The July 4 holiday break is less than a month away. Europeans are planning their August getaways.

But there’s no time for kicking back in the World of Cars.

In less than a month, on July 1, the United States, Canada and Mexico are supposed to decide the future of the free trade agreement that provides the foundation for the North American auto industry’s supply chain and vehicle production strategies.

Billions in industry profits and thousands of jobs in three countries are at stake.

Vehicles and vehicle parts accounted for $270 billion in annual trade among the three USMCA nations. Auto jobs in the United States rely on exports to Canada and Mexico. Nearly 57% of the imported vehicles Canadians bought in 2025 were made in the United States, with a value of nearly $50 billion.

The manufacturing scale provided by a unified North American market is critical for U.S. automakers Ford and General Motors to compete with Chinese automakers.

The potential end of the unified North American auto market has been overshadowed by the U.S.-Israel-Iran war and the resulting volatility in oil prices.

In the long term, however, the future of North American trade has more significance for the auto industry than the (hopefully) temporary disruption of shipping in the Straits of Hormuz.

There are a variety of scenarios industry executives and analysts are gaming out. The Center for Strategic and International Studies has a useful and easy to understand primer here.

The three nations could extend the agreement as is. That seems unlikely.

They could revise terms of the current agreement and keep it in force for another 16 years or more.

They could decide not to extend the current deal, and renegotiate trade terms every year. (Auto industry executives would get free rations of Xanax.)

They could scrap the whole thing and move to bilateral deals between the U.S. and Canada, U.S. and Mexico and, presumably, Mexico and Canada.

The shape of things to come is unclear. And that uncertainty is a problem for the auto industry already battered by the costs of scuttled electric vehicle investments, Trump’s waves of import taxes and the aggressive expansion by Chinese automakers into global markets.

The current U.S.-Mexico-Canada Trade Agreement was negotiated during President Trump’s first administration. Trump hailed the deal as “the largest, fairest, most balanced, and modern trade agreement ever achieved.” The USMCA was a “colossal victory” for American workers and farmers, Trump said.

Nevermind.

Trump and his chief trade negotiator Jamieson Greer are now treating the USMCA as damaged goods. The “shortcomings [of USMCA] are such that a rubberstamp of the Agreement is not in the national interest," Greer told a congressional comittee last year.

Greer said last month the days of tariff-free trade among the three North American nations are over.

U.S. trade negotiators are pushing for substantial revisions to pull more manufacturing jobs and agricultural trade value into the United States. Trump administration officials have also said they are open to replacing the three-way USMCA with bilateral deals.

Greer has begun talks with Mexico, saying the administration wants to cut the U.S. trade deficit with its southern neighbor that has grown as auto manufacturers have shifted production to Mexico from China.

Canada has been kept on the sidelines. Canada’s trade minister has held preliminary talks. But formal negotiations have yet to begin. No shock given the fraught relations between Trump and Canadian Prime Minister Mark Carney.

The drama has U.S. auto sector executives on edge. They are watching as Chinese automakers gear up their North American strategies. Chinese brands are investing in Mexican production, and revving up to launch sales in Canada.

Automakers, via their lobbying arms, have pleaded with Trump and Greer to continue the three-nation unified market.

“Preserving the trilateral USMCA framework—while making targeted improvements that strengthen its implementation—will help ensure that the United States remains a globally competitive production base at a time of rapid technological change and intensifying international competition,” a coalition of six auto industry trade groups plus, importantly, the National Automobile Dealers Association wrote in a May 7 letter to Greer.

The United Auto Workers, however, wants Trump to “tear up” the USMCA and replace it with trade rules that require equal pay for equal work across borders and requires that “selling a product in the US means making the product in the US.”

UAW President Shawn Fain and Trump disagree on nearly every issue this side of which direction the sun rises. But on tariffs and trade policy, they speak the same language. Union votes matter in closely-divided states such as Michigan.

There’s no purpose in trying to predict the outcome of such a complex set of negotiations. As in any bargaining process, proposals will be floated, then withdrawn or revised. As anyone watching the Motor City Three and the UAW negotiate contracts can attest, there’s no deal until both sides say there is, on the record.

And even then, the bargaining doesn’t stop. The UAW decision last week to strike a key parts maker for GM’s Chevy and GMC pickups is a mid-contract negotiation move.

But the stakes in the USMCA review are clear.

In Canada, there’s growing fear that the country’s auto sector could be hollowed out to the point that Canada has no vehicle assembly plants by 2040.

The U.S. market is big enough and rich enough to sustain a self-contained auto industry. But the Detroit automakers face the prospect of being encircled by Chinese rivals and trapped in a U.S. island market with obsolete technology.

Trump’s moves to eliminate EV mandates and roll back fuel economy targets and in general let market forces determine what vehicles automakers sell are a plus for the industry. Trump’s volatile trade policies are not.

Mexico could be a winner in the end. Already ranked No. 5 among auto manufacturing nations, Mexico is now positioned to get fresh investment from Chinese automakers such as BYD and Geely. Mexico has free trade agreements with 50 countries, including the EU, most major Latin American nations and many Asian markets.

The United States is Mexico’s largest vehicle export market, by far. Losing free access to the U.S. market would be a blow. But that blow would also land on GM, Volkswagen, Stellantis, Ford and other manufacturers with significant operations in the United States.

The U.S. auto sector has spent more than 30 years building North American supply chains on an assumption that the U.S., Canada and Mexico would function as one market. Automakers have balanced relatively low Mexican labor costs with high U.S. wages and productivity to make North America the global auto sector’s richest profit pool.

A USMCA collapse that forced automakers to rebuild those supply chains inside the U.S. would likely cost as much as double the $50 billion EV investment wipeout of 2025, CNBC’s Mike Wayland reported in a detailed analysis. That is if auto manufacturers can find the workers required. Right now, the U.S. has more than 300,000 unfilled durable goods manufacturing jobs.

The $50,000 average vehicle price that has politicians and consumer advocates up in arms could look like a bargain.

Unless you want to buy a stripped down Slate electric truck. Will that really cost less than $30,000? Find out June 24.

Lightning laps

Chips are causing headaches for the auto industry again. Automakers told the Trump administration that shortages of memory chips, caused in part by the voracious demand from AI data centers, are driving up U.S. auto manufacturing costs.

Tesla sales are recovering in Europe, thanks to soaring gasoline prices and the salutary effect of fading memory. Elon Musk’s forays into European politics and his disruptive role as Trump’s budget axe-man are old news. Speaking of Musk…

SpaceX rockets toward an IPO that would value Elon Musk’s rocket/AI/social media conglomerate at $1.75 trillion, and make Musk the world’s first trillionaire. Analysts and financial journalists have been howling into the hurricane about how risky and over-valued SpaceX appears to be, based on its filings. SpaceX’s magical math and far out business goals, including a million person Mars colony, have not yet provoked second thoughts among investors or Musk’s bankers.

U.S. auto sales inched up in May, mainly because of demand for fuel-saving hybrids and sales to fleets, Automotive News reported.

Mercedes could be shut out of the U.S. market under bipartisan legislation that aims to bar Chinese-controlled automakers from America. China’s state-owned BAIC and Geely chair Li Shufu together own nearly 20% of Mercedes-Benz shares. The proposed law caps Chinese ownership at 15%. Mercedes could get exempted from a ban because it builds vehicles in America (in Republican-controlled Alabama.) Or the Chinese shareholders could sell down their stakes.

Volvo recently was allowed to continue selling vehicles in the United States even though they contain Chinese connected vehicle technology. Volvo has a factory in South Carolina, another Republican Red State.

Uber will test robotaxis in Munich and said it will bring robotaxis to London soon. (Will the AI Drivers have to show they have “The Knowledge?”)

Tesla meanwhile rolled out more “unsupervised” robotaxis in Austin. Both moves are part of the larger robotaxi scaling race the HSR examined in more detail here.

Trump met with auto executives last week to talk about the clash between the industry and independent repair shops over “right to repair” legislation. The issue is who can get the detailed data required to fix complex modern vehicles. Automakers have agreed to share some diagnostic data, but not as much as independent repair shops and consumer advocates want.

Auto repairs are part of the broader “affordability” debate in the 2026 election cycle. Car repair costs have skyrocketed by nearly 50% since 2020, according to Federal Reserve data.

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Greetings from Motown!

The companies behind the nascent AI-enabled driving industry are hitting the accelerator to put thousands more AI-driven vehicles on American roads over the next few years.

As the AI Driving Industry comes out of a long funk, it’s time to start tackling some of the questions about technology that has commanded more attention relative to its real-world scale than anything this side of UFOs.

Start with this: How many fully self-driving vehicles are operating on America’s roads right now?

A few thousand, if you add up the roughly 3,800 robotaxis Waymo disclosed in a recent recall with the much smaller number of autonomous Tesla robotaxis, Zoox bubble cabs in Las Vegas and the handfuls of vehicles deployed by smaller companies.

Or zero, if you accept a more rigorous definition used by MIT’s Bryan Reimer.

“This is not automated vehicle technology,” Reimer told the HSR. “It’s an automated vehicle system. It’s got humans all over it,” remotely monitoring and operating the vehicles, cleaning them and managing software updates and recalls.

Waymo on May 28 said it is launching its purpose-built Ojai robotaxis (based on a vehicle designed by Chinese automaker Zeekr.)

“We are now meaningfully scaling our Waymo-enabled vehicles toward a capacity of tens of thousands of units per year at our factory in Mesa, Arizona,” Waymo posted on its blog.

Rival Tesla is well behind Waymo in deploying its robotaxis/AI driving technology. Tesla registered just 42 robotaxis in Texas, as required under new state rules, compared to nearly 600 registered by Waymo.

Nonetheless, Elon Musk told investors Tesla has started building Cybercabs at its Texas mega-factory. Musk said he expects Tesla to launch widespread deployment of Tesla robotaxis without human minders this year.

As for Zoox, the Amazon-supported robo-rides company last year opened an assembly plant in California the company said will be capable of building 10,000 Zoox vehicles a year.

Robotaxis are an artificial intelligence product. As with other artificial intelligence products and infrastructure, regulators, policymakers and citizens are scrambling to keep up with the rapid pace of deployment. Already, there are signs that robotaxis could become part of a broader AI backlash.

After investing billions over the past decade to develop their AI drivers, Waymo, Tesla and other robotaxi companies are under pressure to generate revenue.

Define “safe.”

Now begins the race between the business imperatives of the AI Driving Industry and the complex dynamics of how human society responds to a novel, disruptive and potentially dangerous technology.

The AI Driving Industry’s ambitious deployment plans give the appearance the technology is safe and ready to go.

The inability of Congress to agree on national safety standards for autonomous vehicles has left an opening the AI Driving Industry is charging through, even the debate over what “safe” and “ready” mean in the robotaxi context is far from over. \

AI products are good at simulating readiness, even when they aren’t ready. With vehicles on highways, the stakes are higher. A chatbot hallucination is one thing. A two-ton robot car that doesn’t see a kid at a school bus stop is another.

Waymo, Musk and other autonomous driving proponents emphasize the potential for AI drivers to slash the U.S. death toll from vehicle crashes, which runs at roughly 100 lost lives a day.

Waymo, however, is not perfect. A Waymo robotaxi hit a child in January.

Waymo got a major endorsement in May from a group of doctors who wrote in an open letter (and a New York Times op-ed) that the data showing automated driving technology could save lives “has reached a threshold we cannot responsibly ignore.”

That data comes largely from Waymo. The AI driving industry effectively certifies itself, since there are no federal safety criteria for AI driving technology.

Self certification relies on companies being fully transparent. Waymo, Tesla and the rest get to decide how to present information about accidents involving their AI drivers.

A Reuters investigation published May 28 reported that employees working on Tesla’s automated driving system didn’t trust the company’s AI. The employees told Reuters “that the technology continued to struggle in recent months to execute basic maneuvers – such as avoiding emergency vehicles or stopping for school buses loading or unloading students.”

Tesla says on its website that its FSD system can “see it all” with eight cameras. But federal vehicle safety regulators earlier this year escalated an investigation of whether Tesla’s “Full Self Driving” technology can see road hazards at times of poor visibility.

It’s worth reading an excerpt from the National Highway Traffic Safety Administration document:

Waymo has also had problems. The unit of Alphabet/Google last month paused rides on freeways and suspended service in Atlanta after some of its robotaxis drove into flooded roadways.

Video of Waymo robotaxis circling a cul-de-sac in Atlanta went viral. Waymo told Atlanta media the vehicles were circling in a process the companyt called “fleet positioning.” Residents of the area called it annoying.

Austin has logged 248 incidents since 2023 on its dashboard of automated vehicles blocking traffic, interfering with emergency responders and other safety concerns.

Waymo boasts that its robotaxis have driven 127 million miles, “the equivalent of going to the moon and back over 260 times.” Impressive, but not compared to the more than 3 trillion miles traveled annually by the nearly 300 million vehicles on U.S. roads.

“Waymo is doing interesting math on small potato data,” says Reimer. (Reimer posted on his Linkedin page that Uber has provided a grant to fund his writing on AVs. “The views expressed in these pieces are my own,” he wrote.)

Readers who want to dive deeply into the issues surrounding self-driving car safety and performance data could start with this Substack co-authored by autonomous vehicle tech experts and .

The robotaxi business model problem

For investors counting on a return on the hefty sums of capital plowed into automated vehicle development, the challenge of building a cash-generating business model for robotaxis is as important as resolving public safety concerns.

So far, robotaxis are rolling cash incinerators.

Alphabet doesn’t break out Waymo financials. Those are included in what the search powerhouse calls “Other Bets.”

In Q1, “other bets” generated $411 million in revenue, and lost $2.1 billion. (See page 34 here.) Waymo earlier this year raised another $16 billion, most of that from Alphabet, to keep rolling.

Waymo and the other robotaxi operators are counting on rapidly shrinking their costs per mile and overhead. That requires getting a lot of things right, Philipp Kampshoff, co-leader of McKinsey’s global automotive and assembly practice, told the HSR.

Profitability, he said, depends on pulling “all the right levers.”

Those levers, Kampshoff said, include developing a “purpose built vehicle” that doesn’t carry around equipment that is not needed in a car with no human driver.

Then, robotaxi operators need efficient vehicle cleaning and maintenance operations. They need to “become great in reusing sort of the investments that you have made in software, so the incremental software cost… to unlock an incremental city is going down.”

Done right, he said, robotaxi rides could get below $2 a mile, which could be competitive enough. Elon Musk’s idea that Tesla owners could rent out rides on their fully autonomous vehicles could yield lower per-mile costs, he said. That’s because a private owner doesn’t need the robotaxi to cover all ownership and operating costs.

(Whether the owner of a $40,000-$50,000 Tesla wants to loan it out to people returning home from partying in a bar is a different question.)

Robotaxi profitability also depends on the market and the share of the day that a robotaxi is generating revenue. There’s a reason why robotaxis are targeting cities such as San Francisco, LA and Austin, and not Fargo.

Then there’s the challenge of building a ride-hailing network. “As a large e-hailing player you have a tremendous advantage,” Kampshoff said.

Uber already knows where the most traveled and profitable routes are, and what people are willing to pay per mile traveled at all hours in nearly every major city in the world.

Small wonder that Uber is moving aggressively to lock in partnerships with robotaxi operators to bind them to its existing network.

What’s next: The debate over governing AI drivers

AI drivers confound the current system of vehicle safety and operating regulation, which we designed for human drivers not digital ones. Federal rules require all vehicles to have brake pedals. But a robotaxi doesn’t need conventional brake pedal, and is probably better off without one. Multiply that example by hundreds.

Someday the U.S. government could develop a comprehensive safety policy for automated vehicles. The Trump administration is promising one soon.

“It’s safe to say that 2026 is going to be a big year for AV policy on the federal level,” NHTSA Administrator Jonathan Morrison told an audience at CES in January. “We’ve already announced first steps to modernize FMVSS with several proposals to modernize standards related to windshields, gear shifters, and lighting to accommodate AVs. And there’s much, much more to follow.”

The administration’s approach, Morrison said, will be “to liberate the auto sector to build a new generation of safer vehicles based on creative designs and novel approaches that better meet consumers’ preferences rather than complying with a never-ending list of check-the-box requirements.”

California regulators have adopted criteria for autonomous vehicle operators that effectively require that AI drivers get learners permits and demonstrate that the hardware and software are safe before moving to commercial deployment.

The Federal Aviation Administration approach to approving the airworthiness of a plane before it goes into service is a potential model. The FAA has fostered a culture among airlines and aircraft makers of sharing information about safety issues.

The auto industry has established an ISAC (Information Sharing and Analysis Center) for discussion of common cybersecurity threats. Adopting an FAA model of sharing information about autonomous vehicle safety issues across the industry would be a new and potentially uncomfortable frontier.

As MIT’s Reimer points out in this post, robotaxi regulation is rapidly becoming a political issue, not just a debate over statistical analysis or the best model for vetting novel tech.

Millions of people earn livings from driving. The AI Driving Industry threatens to take those livelihoods away. Small wonder that unions in Illinois and other states are putting pressure on policy makers to slow the robotaxi industry’s roll. New York City earlier this year did not renew permits allowing Waymo to test its robotaxis in the Big Apple.

Then there’s the question of priorities.

Notwithstanding what I wrote at the top about accelerating autonomous vehicle deployment, it will be years before the number of robotaxis and robotrucks on U.S. highways gets to a double-digit fraction of total vehicles on the road.

If reducing highway deaths is a key rationale for investing in automated vehicle technology, shouldn’t accelerating deployment of safer infrastructure and technology (such as automatic braking) to reduce accidents among the millions of human-driven vehicles get more attention? Read more on this idea here.

Fear of losing out to China is the background music for discussions about self-driving vehicle regulation in the USA, as it is for debates over other forms of AI. And with good reason.

Chinese robotaxi operators are racing to deploy at scale every bit as aggressively as U.S. counterparts.

The AI Driving Industry could develop global standards that would allow Chinese and American and European robot drivers to compete everywhere. Or it could follow the conventional auto industry’s move toward regionalization behind protective trade barriers. Chinese AVs for China, American AVs for America. We’ll leave that for another Substack.

One more thing…

Ferrari’s all-electric Luce has polarized the investor community and Ferrari fans since its rocky debut on May 26.

Ferrari shares fell 5% between Friday May 22 and Tuesday May 26 as the car was revealed, zapping roughly $3.5 billion in market value. The Luce was designed by Ferrari in partnership with a firm led by former Apple lead designer Jony Ive and Ford O21c designer Marc Newson,

Ferrari CEO Benedetto Vigna felt compelled to tell reporters that orders for the Luce were strong and that there are “clients who want it” despite the catcalls from social media. Ferrari CEOs usually don’t have to explain anything about demand for the brand’s new models, except that the waiting list will be years long.

Ferrari shares have recovered some of the losses since the Luce’s uveiling. But RACE is still down 6% for the year.

Thanks for reading. More later…

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Greetings from the journey to Mackinac Island!

Nevermind the Straits of Hormuz. Michigan has the Straits of Mackinac, featuring one of the world’s longest suspension bridges and a fort with cannons trained on the freighters and yachts headed for Detroit.

There are no cars on this lovely island. People get around on bikes or horse-drawn carriages. Apparently, that makes it a perfect place for a conference about economic and industrial policy for the birthplace of the U.S. auto industry. I’ll be here with my partner Tu Le. New episode dropping soon.

Back on the mainland, the outlook for the Motor City Three and the rest of the U.S. auto sector is not so tranquil. Foggy and choppy are more like it.

Today’s High Speed Rodeo will take a look at Stellantis’ $70 billion bet on expanding revenue and profits in a stagnant market, the disconnect between consumer sentiment and car sales and Ferrari’s answer to the critics who say EVs are too expensive.

Let’s motor…

The U.S. auto sales miracle*

U.S. consumer confidence dropped last month to the lowest level ever recorded by the University of Michigan Survey of Consumers. Gasoline prices remain above $4 a gallon in much of the United States, with the exception of a few states where Republican governors have rolled back state fuel taxes.

Average transaction prices for new vehicles rose 1.8% in April vs. a year ago, according to new Cox Automotive data.

Good news: That rate of increase was half the long-term average. Bad news: New vehicle prices are still averaging close to $50,000, up 21% from pre-pandemic levels in 2020, according to Federal Reserve data.

(There are new vehicles available for under $35,000. But even those are out of reach for middle-income shoppers with stressed budgets and credit scores. )

Now, interest rates are rising amid a “global bond rout”.

And yet: Forecasters at JD Power expect retail U.S. vehicle sales this month will rise by 6%. The annualized sales pace for the month will touch 16.3 million vehicles, Power forecasts. Once upon a time, the U.S. vehicle market tracked closer to 17 million cars and light trucks sold in a year. Those days are gone. Now, 16+ million is the new good.

The U.S. auto sector appears to be defying macroeconomic gravity. At least for now.

One reason could be that the new vehicle market largely reflects the outlook of affluent households, for whom $4 a gallon gas is an annoyance, but not a reason to radically change spending plans.

Transunion in a recent report said the share of U.S. consumers with “super prime” credit scores has increased since 2019.

High fuel prices have cost Americans nearly $45 billion since President Trump launched the war on Iran. But that works out to $190 on average per household since Trump started his Iran War. Wealthy families can handle that. (Giving up the daily Starbucks latte can save $1,500 a year.)

Another positive indicator for auto sales: The U.S. stock market is up for the year and touching new highs.

That said, automakers continue to pray for peace in the Middle East.

S&P Global cautioned in its latest global vehicle production outlook that the impact of the war and its economic toll could be delayed, hitting production and sales in 2027.

Plus, the industry has to figure out how to offset an estimated $30-40 billion in tariff costs. Stay tuned.

Stellantis hits the gas on trucks and SUVs

Stellantis CEO Antonio Filosa last week rolled out his 60 billion euro, five-year plan for restoring profitable growth at his sprawling, multi-brand automotive big box store.

The full presentation covers 168 PowerPoint slides. The key points:

• North America will get 60% of the plan’s total investment, because North American truck and SUV segments are the deepest profit pools in the global auto industry.

• Stellantis will drive to increase North American sales volume by 35% to 1.9 million vehicles while boosting pre-tax margins to 8-10% by 2030.

• Double digit sales increases for Ram trucks and Jeep SUVs will be central to the strategy.

Stellantis will launch a new mid-size truck in North America to chase the Toyota Tacoma, Ford Ranger and Chevy Colorado. And the company plans a compact pickup truck to grab a slice of the market occupied by Ford’s Maverick and Hyundai’s Santa Cruz.

Thanks to the easing of U.S. fuel economy standards, Stellantis plans to launch an expanded lineup of SRT muscle cars and trucks that promise to generate 2-3X the margin of stock vehicles, North American brand chief Tim Kuniskis told investors.

Outside North America, Stellantis is counting on its Chinese partners Leapmotor and Dongfeng to boost capacity utilization in Europe to 80% from 60%, solving a significant cost problem.

There was some fun stuff. The Citroen brand plans to revive the legendary 2CV Deux Chevaux name for an electric European city car. North America will get a trio of hot-rodded Rumble Bee Ram trucks with 0-60 times under 6 seconds.

Investors were underwhelmed. Stellantis shares dropped sharply on 5/21 as the plan outline hit the web, but recovered Friday to just above par. For the year to date, Stellantis shares are down 33%.

Missing from the FastLane 2030 plan were commitments to phase out or sell underperforming or overlapping brands. Instead, Filosa outlined a plan to focus investment on four global brands, Jeep, Fiat, Ram and Peugeot, while maintaining the remaining brands as regional players. (Points if you can name them all.)1

No extra cash returns were promised to shareholders to offset the risks of a $70 billion capex plan. Remember that Stellantis earlier this year said it would write off 22 billion euros worth of investments in electric vehicles made under its previous five-year plan.

It will take until next year for Stellantis to generate positive free cash flow, if all goes well.

“If all goes well” carries a lot of freight. Stellantis forecast double-digit revenue gains in Europe and Latin America despite accelerating competition from Chinese brands.

The plan to boost Ram truck sales by 60% by 2030 in a flat overall North American market requires rivals such as Toyota, Ford and GM to cede ground without a margin-destroying fight. (See slide 24.)

Stellantis said it will launch the first vehicle powered by its Tesla-style STLA Brain computing architecture next year. It will take until 2035 for 70% of the company’s products to be equipped with advanced, software-defined computing architectures that Tesla, Rivian and major Chinese EV brands have today.

Stellantis originally announced plans for the STLA Brain in 2021 and targeted delivery starting in 2024.

Lightning laps

European EV sales are surging as consumers looked for relief from soaring petrol prices. Chinese brands are driving the shift, boosting combined European market share to a new high of 9.8%, according to data analyzed by Automotive News.

Ford said it will launch seven new models in Europe as part of plan to increase market share by 2029. Add all the market share predictions for Chinese and incumbent European automakers together and you get more than 100%.

Chinese automakers have a big incentive to invest in Mexico as a new 50% tariff takes hold, writes Friend of the Rodeo Warren Browne in IndustryWeek. New Chinese automaker factories in Mexico and Canada would add another twist to the upcoming renegotiation of the USMCA North American trade agreement.

Lawmakers in both parties of the U.S. Congress want to keep Chinese brands out of the U.S. market.

Trump’s trade war with Canada is shrinking the Motor City Three automakers presence in Canada.

A hybrid or an efficient gasoline car could be cheaper to rent for a day than an EV, despite high gas prices, the New York Times concluded. They did a lot of migraine-inducing math so you don’t have to.

Mercedes said it plans to launch a semi-automated driving system called MB. Drive Assist Pro, powered by NVIDIA chips, in Germany by the end of the year. Mercedes is racing Tesla, BMW and others to deploy hands-off driving systems.

Meanwhile in Berlin, proposals to charge congestion fees to attack the German capital’s traffic jams have sparked a culture war in Europe’s premium car nation.

Jaguar Land Rover will get a lifeline in the North American market from Stellantis. The two automakers said they will collaborate on vehicle development in the United States. JLR is fighting to recover from a calamitous year during which a cyber attack derailed production, and the company temporarily stopped shipping vehicles to the United States because of Trump’s threatened 25% tariffs. Collaborating with Stellantis could help boost the North American content of JLR vehicles, as well as reduce R&D costs.

One more thing…

Ferrari unveiled the Luce, the ultra-luxury brand’s long-awaited electric car, designed with help from former Apple design leader Jony Ive.

There she is.

Guess how much. Too low. That’s a 550,000 euro/$640,000 vehicle you’re looking at.

The Luce has a long list of technology features. Here’s one I could relate to given my alter-ego as a guitar builder/cover band guitarist.

“A precision accelerometer at the centre of the axle captures the dynamic texture and vibration of the rotating components while the sound waves are moving. Developed in-house and patented, this system filters, equalises and amplifies the signal in a similar way to an electric guitar…”

I wonder if you could program this sound engine to play the opening riff to “Can’t You Hear Me Knocking” when you hit the accelerator? That might be worth $640,000.

Thanks for reading. More later…

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A quick word search finds Tesla mentioned 87 times in the SpaceX S-1. Here are some of the connections between the two biggest pieces of the Muskonomy. Terafab and AI development are the two biggest elements. But the Cybertruck figures in the relationship too. And as the S-1 says several times in several ways, there could be more collaboration between SpaceX and Tesla in the future.

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Greetings from Motown!

Just time for a quick rundown of the news from the World of Cars before a short road trip. I’m not looking forward to burning a week’s worth of $4.80+ a gallon gasoline in three days. But so it goes.

Let’s dive in:

Toyota turns up the pressure in America

Toyota is planning a new vehicle factory code-named Project Orca near its existing Texas truck plant, aiming to start production by 2030, Automotive News reported.

Toyota has several billion reasons to expand its U.S. vehicle-making capacity, as outlined by Friend of the Rodeo Warren Browne. Toyota has forecast that U.S. tariffs will cost the company $8.8 billion this fiscal year. Its current North American plants are running close to their limits.

Toyota did not say in filings with Texas authorities what it plans to build. This far out, the company could still be deciding.

Toyota’s San Antonio factory currently builds Tundra pickups and Sequoia SUVs. With a truck/SUV-oriented supply chain already in place around San Antonio, it’s a reasonable guess Toyota wants to build more trucks and SUVs.

That’s bad news for Detroit and other rivals. They don’t need a killer whale in their biggest profit pool.

Stellantis wants a slice of Ford Pro’s pie

Stellantis CEO Antonio Filosa will outline his strategy for rebooting profits at the parent of Jeep, Ram, Fiat and Peugeot at an investor day on Thursday. He’ll have a lot of ground to cover after a full-year loss in 2025 and a 59% decline in the share price over the past five years.

One element of the strategy will be revving up sales to commercial fleet customers through the Stellantis Pro One channel.

The latest step in that effort: Streamlining the process of building vehicles that get fitted with custom, work-focused equipment by outfitters such as Knapheide.

The new Stellantis Custom Fit program aims to cut 6-8 weeks out of the lead time required to get a custom equipped work truck to a business customer, Michael Ferreira, senior VP for Pro One in North America told the HSR.

Stellantis also plans to expand its fleet service operations with a dedicated fleet parts operation within its MOPAR repair parts business. The idea, put simply, is to used data from vehicles to anticipate when a repair is needed - for instance a brake job - and get the parts in position to do the work with minimum delay. Up time is the phrase that pays in the commercial vehicle industry.

Stellantis has about 900 dealers signed up to its fleet sales and service programs, and wants to expand that network to 1,400 dealerships, Ferreira said.

If this sounds familiar, it’s because focusing on the specific needs of commercial fleet customers and using vehicle data to power high-margin software services has been hugely successful for Ford in North America and Europe.

If Ford Pro was its own business it would be one of the most profitable automakers on the planet, with an operating margin of over 10% and full year pre-tax profits of $6.8 billion last year. (See page 7 here.)

For Stellantis, accelerating commercial operation will be one of the easiest strategic calls presented on Thursday. Filosa will have a tougher job convincing investors he can sustain all of the company’s 14+ global brands as Chinese rivals muscle into Europe and Latin America.

Honda’s loss, Nissan’s gain

Trump’s tariffs, the Iran War and the whipsawing U.S. EV market battered Honda to its first full-year loss in its history as a public company.

Honda booked $12 billion in losses on scrapped electric vehicle programs. Tariffs hacked another $2.2 billion in profits.

Meanwhile, Nissan reported a narrow profit for the fiscal year as CEO Ivan Espinosa’s cost-cutting efforts took hold. Analysts had expected more red ink.

Still, tariffs took a $1.8 billion bite out of profits.

Lightning laps

Tesla raised prices for the Model Y in the U.S. market by about $1,000.

BYD is talking with Stellantis about building vehicles for Europe in under-used Stellantis factories.

GM cut about 10% of its IT staff as it looks to replace legacy engineers with people versed in AI.

Ford shares got a 13% lift last week as investors bought in to bullish forecasts for the automaker’s nascent energy storage business.

Car price inflation slowed during April, according to new data from Cox Automotive. The year-over-year increase in average vehicle transaction prices was 1.8% in April, vs. a long-term average of 3.6%.

Waymo revealed that it has about 3,800 robotaxis in service in the United States, in filings to U.S. safety regulators related to a software recall. Waymo has been vague about the size of its U.S. robotaxi fleet as it scales up. I’ll be diving deeper into the state of the robotaxi business in a future HSR, coming soon.

Thanks for reading. More later…

Greetings from Motown!

No matter when you write a weekly newsletter about the World of Cars, it will be out of date in a day or two. That’s doubly true today. By this time next week, the competitive landscape in the North American auto industry could be very different, depending on what comes out of talks between President Trump and Chinese leader Xi Jinping.

Incumbent U.S. automakers, a group that includes the Motor City Three and Asian and European legacy automakers with factories in America, are very worried. More on why below.

And we’ll dig into Toyota’s dour financial outlook. Top company executives forecast that the impact of the Iran War and oil supply disruptions will cost $4.3 billion this fiscal year. Full FY profit could fall by 20% at the world’s largest automaker.

Toyota’s assessment of the disruption to supply chains and sales from the U.S.-Israeli initiated war stood out compared to more reassuring forecasts from Detroit automakers. Granted, Toyota is more exposed to Asian markets and suppliers reeling from the blockades in the Straits of Hormuz. But Toyota may also be freer to be frank than U.S.-based companies with a lot riding on Trump’s good will.

Let’s dive in…

U.S. auto industry to Trump: No car deals with China. Please!

If you aren’t at the table, you’re on the menu goes the old political adage.

That’s apropos this week for the situation legacy U.S. automakers are in as President Trump packs his bags to meet with his Chinese counterpart in China later this week.

The White House released a list of U.S. corporate leaders who will accompany Trump, and only one auto executive, Tesla’s Elon Musk, got invited along.

Musk has many other hats, including CEO of the SpaceX rocket company and would-be AI kingpin. Musk has a great deal invested in good relations with China. Tesla’s largest and most profitable EV factory is in Shanghai.

Suffice to say, the CEOs of Ford, General Motors, Toyota and Stellantis won’t count on Musk to represent their interests.

Incumbent U.S. automakers and suppliers, via their lobby groups and supportive lawmakers, are pleading with Trump not to make a deal that allows Chinese automakers access to the U.S. market.

Democrats and Republicans in Congress have sent letters to the White House warning that any deal that opens the U.S. to Chinese automakers will undermine U.S. manufacturing jobs and long-term national security.

“China’s goal is not to compete in the U.S. automotive market,” Democrats wrote, “but instead to hollow it out and ultimately limit consumer choice to Chinese brands.”

The campaign by the U.S. auto sector has echoes of the rhetoric used during the 1980s to persuade Republican President Ronald Reagan to impose “voluntary” quotas on Japanese car imports at a time when rising gas prices were battering General Motors, Ford and Chrysler.

The panic-meter in Detroit is in the red now in part because of super-cheap cars like the BYD Seagull or the Leapmotor T03, now available in Germany for a mere 49 euros a month.

Less affluent Americans would welcome the choice of affordable Chinese brands, according to a recent Cox Automotive survey.

But incumbent U.S. automakers are equally frightened by the herd of large, luxurious Chinese SUVs like the Li Auto L9 or the Xiaomi YU7 that offer more technology and comfort features for the dollar than most vehicles U.S. consumers can buy. These models threaten higher profit premium SUVs.

For now, Detroit’s pickup trucks should be safe. That is unless gasoline stays above $4 a gallon. Oh….wait a minute…

U.S. automakers are justifiably worried that weakness in the Chinese domestic auto market will push more Chinese vehicles into export markets.

Auto state lawmakers of both parties are pushing legislation that would not only ban Chinese vehicles from the U.S. market but also prohibit other automakers from using Chinese connected vehicle technology or batteries.

In their letter to Trump, Michigan U.S. Rep. Debbie Dingell and other Democratic lawmakers said the U.S. should:

“● Ensure that Chinese automakers cannot establish manufacturing operations in the United States or use North American production as a backdoor into the U.S. market;

● Explicitly prohibit vehicles produced by Chinese-owned or controlled entities in Canada or Mexico from qualifying for USMCA benefits or entering the United States…”

Banning Chinese technology from vehicles sold in the United States will not be an easy task, given how deeply embedded Chinese suppliers and their technology are already in the U.S. industry.

As the Wall Street Journal reported, Chinese auto parts are “everywhere” in the U.S. auto supply chain. Chinese companies such as Fuyao Glass, Wanxiang and Nexteer operate factories in the United States that are vital to U.S. vehicle production. Ford chose China’s CATL as its partner for battery production in Michigan.

As in the 1980s, separating the “home team” of U.S. automakers from foreign automotive interlopers (Japanese then, Chinese now) is complicated by partnerships and deals that blur the lines between “us” and “them.”

Stellantis has joined in asking Trump to protect its North American Jeep, Dodge, Ram and Chrysler franchises. It is also has an ownership stake in Leapmotor, maker of the above-mentioned T03.

Ford is discussing selling part of a European plant to China’s Geely, Spanish media reported. GM has a long-standing partnership in China with state-owned automaker SAIC and a stake in Wuling Motors, which is investigating building vehicles in Mexico.

GM is a leading importer of Chinese vehicles to the Mexican market.

Predicting what Donald Trump will do is futile. He has a lot on his plate. Cutting a deal to allow Chinese automakers into the U.S. market on a limited basis, as Canada did earlier this year, could easily fall off the agenda.

Detroit’s fear is that an auto investment deal will become a side dish to agreements on Iran, aircraft, AI or rare earths. Trump could revert to the view he expressed in Detroit earlier this year, when he effectively invited Chinese automakers to invest in U.S. factories.

Toyota: Everything is not OK

The most striking thing about Toyota’s latest financial outlook was not the 50% drop in overall quarterly profits and an operating loss in North America, though those were stunning.

It was how Toyota executives declined to sugar coat the potential damage from the combination of the Iran War/Straits of Hormuz blockade and Trump’s tariffs.

Tariffs will cost Toyota nearly $8.8 billion in the current fiscal year, company executives said (Page 7 here.) On top of that, the Iran War will add another $4.3 billion in previously unexpected costs both in Toyota’s supply chain and in lost sales. Toyota executives said the automaker could not offset all those costs.

“On the front lines, there is no place to hide,” Toyota CEO Kenta Kon told investors, as he promised more cost-cutting and management “reform.”

GM and Ford executives focused on the benefits from tariff refunds in their Q1 investor calls, bumping up profit forecasts. BMW minimized Trump’s latest tariff threats in its upbeat Q1 report.

But the financial damage from the Trump tariffs is substantial.

U.S. automakers paid $12.5 billion in duties on imports from Canada and Mexico, Anderson Economic Group reported. That doesn’t count duties paid on vehicles and parts imported from other countries. These costs are on top of the $30 billion or more incinerated as automakers retreated from U.S. EV projects.

Another sign of stress: Honda is stretching the life cycles of some core models for the U.S. market out to 2030, Automotive News reported.

Lightning Laps

Truck Deal Days. Chevy, Ford, Ram and Toyota are discounting their pickup trucks as gas prices stick above $4 a gallon across the United States. Ford re-launched employee-pricing-for-all deals, dressing the offers up as celebrations of America. Ram likewise put a patriotic sheen on its promos.

The discounts look big in dollar terms, but aren’t outrageously generous as a percentage of the average truck’s $50,000 ++ price. May and full Q2 sales data will give a better picture of how well big vehicle sales are holding up.

Meanwhile, sales of hybrid cars are surging.

Connected car privacy alert. GM agreed to pay $12.75 million to settle charges by California regulators that the company improperly sold data collected from customers’ cars via Onstar. GM agreed not to sell customer data for five years. How costly that is will depend on how effectively GM can make use of data itself, without involving third parties.

Uber gave its shares a lift with a bullish forecast and a promise to have robotaxis operating on its network in 15 cities by the end of the year. Uber has more than 30 autonomous driving partnerships and has increased robotaxi miles driven on its network by 10X, CEO Dara Khosrowshahi told investors. (Transcript here.)

Tesla got a lift from the Trump administration, which announced that the Tesla Model Y is the first vehicle to pass the government’s new advanced driver assistance system tests. The tests evaluate basic ADAS functions: Pedestrian automatic emergency braking, lane keeping assistance, blind spot warning, and blind spot intervention.

FSD was not part of the grade.

Ford reinvents assembly lines. As it revs up for production of its new low-cost electric truck, Ford is rethinking its traditional system for manufacturing vehicles. That process is spiced by the different cultures of Ford’s Midwest manufacturing teams and the team led by former Tesla engineer Alan Clarke that designed the UEV truck. The Wall Street Journal has a vivid deep dive.

Rivian is cooking up more variants of its R2 model, Reuters reports. The R2 SUV should begin shipping to customers next month.

Elon Musk tried to hire OpenAI chief Sam Altman to be a senior executive at Tesla, according to evidence introduced at the trial of Musk’s lawsuit attacking Altman and OpenAI. The idea that Altman would leave OpenAI to run an EV company is by far not the craziest thing surfaced at this trial.

An IPO for Scout? Scout CEO Scott Keogh opened the door to a possible IPO for the electrified adventure truck brand in an interview with Germany’s Handelsblatt.

Thanks for reading!

More later…

Greetings from Motown!

We are most of the way through Q1 financial reporting season and we have learned a few things about the state of the World of Cars:

• Trump’s “little excursion” in the Straits of Hormuz is stacking billions in costs on auto manufacturers and motorists.

• The full impact of the Iran War is only just starting to hit the . Sales have not cratered in the U.S. or Europe. China is a mixed bag, with NEV sales up, combustion and legacy Western brands down. But warning flags are flying. More on that below.

• Caught between Trump and rising Chinese automakers, Germany’s automakers face the toughest challenges since the financial crisis. One analysis said Trump’s proposed 25% tariffs on German cars could cost the industry $18 billion in lost production. More on that below.

• Automakers made a big deal about the tariff refunds they were able to book against Q1 results. Those rebates won’t fully offset the costs of Trump’s policy volatility or the rise in commodity costs driven by the shooting in the Straits.

• Trade policy volatility and rising production costs are among the reasons why the High Speed Rodeo’s latest Vehicle Performance Tracker from industry forecaster Warren Browne has a negative outlook through 2027. More on that here.

• There is some good news. Rivian got fresh funding and Tesla launching a new model. And used car demand, especially sales of used EVs , is staying strong in the U.S. More below.

Let’s start with the troubles besetting Germany’s auto champions, under fire from President Trump and ambitious Chinese automakers.

Twilight of the German auto gods

Germany’s automakers are battling the toughest challenges they’ve faced in years. Their Q1 results showed no easy path to profit or sales volume growth, especially if the EU and Donald Trump don’t patch up their differences ASAP to avert threatened 25% tariffs.

Yes, the EU and the Trump administration had a deal last year to drop tariffs on EU produced vehicles to 15%. The EU has yet to ratify that agreement. And Trump is fuming that Germany and other European nations have not done more to help extricate him from the Straits of Hormuz stalemate.

Consider the sorrows of Porsche. Q1 profits for the one-time envy of automotive brands tumbled 22% as Chinese rivals outflanked its offerings in the world’s largest market, the shooting war in the Persian Gulf depressed sales in that important region and U.S. tariffs ripped a 200 million euro hole in profits.

Mass market champion Volkswagen’s Q1 profits fell 14%, and CEO Oliver Blume warned the group’s “current business model in the changed environment is not generating ​sufficient returns.”

A telling sign of how VW has been humbled: Blume said VW is now looking at bringing vehicles based on Chinese technology to the European market.

This chart, from Reuters, shows one of VW’s biggest problems: A steady decline in China.

But things aren’t going well for VW in the United States, either. Sales dropped nearly 17% in Q1. Overall, VW global sales fell in Q1. Europe, VW’s stronghold, is under assault from Chinese brands racing to engineer vehicles tailored to that market.

Mercedes and BMW have had an advantage over VW in their tight focus on affluent consumers. Now their strategies are stressed. Mercedes said Q1 profits fell by 17%, and profit margins skidded to 4.1% from 7.3% a year ago. See the presentation here.

At least Mercedes’ global sales were up 5%, but total sales in China dropped by 27%. Mercedes executives said they are banking on a new generation of “China-fit” models launching later this year to turn things around.

BMW is scheduled to release Q1 figures May 6. But the group’s global sales for January-March fell 3.5% as U.S. sales fell and China dropped 10%.

Investors don’t like what they see. Shares in German automakers are down sharply since Jan. 1: Mercedes -22%, Volkswagen -19%, BMW-21%, Porsche -24%.

German automakers don’t have tariff-protected, high-profit pickup truck franchises like GM or Ford to buoy their finances. They face billions in costs to rebuild supply chains to fit the Trump Universe and chase the lead the best Chinese EV makers have run up in smart car tech and fast-charging batteries.

Trump may TACO on his latest EU tariff threats, especially if someone reminds him that German automakers and their suppliers are substantial investors and job providers in Republican-dominated states such as Tennessee, South Carolina and Alabama.

But as we saw at the recent Beijing auto show, the challenge from China is not going away.

Second hand cars get respect

With average new vehicle prices pegged at +/-$50,000, used cars are the new black.

Eric Frehsee runs six new vehicle stores as part of the suburban Detroit Tamaroff chain. He is extra bullish on used cars these days.

“April was a strong month,” he said.

Used car buyers at Tamaroff stores fall into two groups, Frehsee told the HSR this week: One is people who used to buy new vehicles. But with new vehicle prices so high, they are now shopping for three-to-four year old used vehicles sold as “certified pre-owned” vehicles with factory warranties.

The second group is less affluent buyers shopping for older, more fuel efficient models such as a Honda CRV or a Kia sedan.

“I can never have too many CRVs,” Frehsee said. It does make a difference that Tamaroff’s brands - Honda, Acura, Kia, Nissan - have reputations for good fuel economy and well-made sedans in a $4+ a gallon world.

“Our brands are well positioned,” he said. “If I had different brands I might not feel as confident.”

Frehsee’s upbeat view of the U.S. used vehicle market is shared by the managements at Carvana, the most valuable public U.S. auto retail company, and other large chains.

Carvana reported 40% growth in vehicles sold and an 18% increase in pre-tax profit.

An important caveat investors noticed: Carvana’s per vehicle and overall pre-tax profit margins decreased, reflecting the challenge of closing deals with wary, price-sensitive consumers.

But Carvana management was upbeat looking ahead: “We expect a sequential increase in both retail units sold and Adjusted EBITDA , leading to all-time company records on both metrics. We remain on track to deliver significant growth in both retail units sold and Adjusted EBITDA in FY 2026.”

Rival Autonation told a similar story for Q1: Used vehicle revenue up, profit margins down. Lithia likewise highlighted a 7.3% increase in used vehicle revenue that covered up for slower new vehicle sales.

Within the large and highly diverse used vehicle market, EVs are standouts. Sales of second-hand electrics jumped nearly 28% in March and 14% in April as gas prices surged, according to Cox Automotive’s EV market monitor.

Dealers have about 37 days of unsold used EVs on their lots, compared to 39 days supply for combustion models.

Rivian and Tesla get some juice

EV startup Rivian got some welcome news after a rough start to the year: The Trump administration Energy Department approved a $4.5 billion loan to finance the company’s construction of an assembly plant in Georgia.

Rivian began building sales-ready versions of its R2 in Normal, Ill. last month. Early reception for the $48,490 and up R2 is good enough that the company increased to 300,000 vehicles the initial capacity of the Georgia factory, scheduled to begin building vehicles in 2028.

Equally important to founder and CEO R.J. Scaringe’s effort to make Rivian profitable are a combined $2.5 billion in promised investments from Volkswagen and Uber. Rivian has a software alliance with VW and an automated driving deal with Uber.

The DOE loan, VW and Uber capital and other funds give Rivian a total of $13.6 billion in liquidity (see page 14 here) it will need as supply chain costs rise. Rivian earlier this year forecast a pre-tax loss of as much as $2.1 billion.

A key focus, Scaringe told analysts, is aluminum, which is soaring in price because of Trump import taxes and production disruptions in the Persian Gulf.

Tesla, meanwhile, celebrated the start of mass production for the Semi, nine years after the electric heavy-hauling truck made its debut.

Tesla also had reason to cheer in Europe, where high petrol prices apparently have caused car shoppers to put aside irritation with Elon Musk’s politics and start buying Tesla EVs again.

Lightning laps

More biodiesel please. After Trump’s trade wars knee-capped export markets for U.S. agricultural commodities, the Trump administration is doing U.S. farmers a solid by boosting quotas for biodiesel production. The unanswered question is whether the biodiesel industry can deliver enough soybean or corn-derived motor fuel to meet the higher quotas.

Lithium for centuries. If the U.S. government decides to reinstitute EV-friendly policies, there should be plenty of domestic lithium to supply battery factories. The U.S. Geological Service reports 328 years’ worth of the battery mineral lie under Appalachia.

A distress flare from Ford. Employee pricing for all discounts are back at Ford after U.S. sales of the F-series truck lineup fell nearly 15% in April. (See the sales release here.) It’s one of the first clear signs that $4+ gasoline in the U.S. heartland is depressing demand for the large vehicles that keep the lights on at Ford and GM.

Another trouble sign: Auto retailer Group1 said it will cut 700 jobs, Automotive News reported.

Down with Big License Plate Reading Brother. Residents of Oakland County, the affluent suburbia home to many senior U.S. auto executives, are fighting back against the County Sheriff’s plans to deploy surveillance drones on top of existing license plate reading cameras supplied by surveillance tech firm Flock. If you want to know whether license plate reading surveillance is operating in your community, click here.

AI car ads are here. BMW road tested an ad for one of its electric cars created entirely by AI. BMW executives said the ad is just a test. Sure it is.

Thanks for reading! More later…