At Least Aston Martin Still Believes In Lucid

Good morning! It’s Monday, June 26, 2023 and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

Rivian Recalls Nearly Every Car It Has Built

1st Gear: Aston’s Convenience Is Lucid’s Lifeline

Aston Martin is a relatively small company, and that makes the effort to electrify its entire range all the more challenging. It’s forged a promising partnership with Mercedes-Benz and Geely to aid in that process, but their involvement seemingly wasn’t enough. On Monday, the automaker announced it was selling a 3.7-percent stake to Lucid Motors in exchange for access to the startup’s EV powertrain technology. From The Guardian:

The carmaker, which sold 6,400 luxury vehicles last year and has spent heavily on new models, said it would select powertrain components from Lucid for initial and certain future battery electric vehicle (BEV) models.

The company said the deal, which involves a minimum spend of £177m with Lucid, would help drive its plan to launch its first BEV in 2025.

“Combined with our internal development, this [deal with Lucid] will allow us to create a single bespoke BEV platform suitable for all future Aston Martin products, all the way from hypercars to sports cars and SUVs,” said Roberto Fedeli, Aston Martin’s chief technology officer. […]

“The proposed agreement with Lucid is a gamechanger for the future EV-led growth of Aston Martin,” said Lawrence Stroll, the executive chair of Aston Martin, the fashion billionaire who took over the troubled company in 2020. “Along with Mercedes-Benz, we now have two world-class suppliers to support the internal development and investments we are making to deliver our electrification strategy.”

Last month, Geely, one of China’s largest independent carmakers, doubled its stake in Aston Martin to 17%.

It’s no secret that Geely wanted Aston all to itself, but the British automaker likes its independence — if you consider “independence” being owned by many different companies and Saudi Arabia’s Public Investment Fund (PIF), rather than mostly one. Consider what former CEO Andy Palmer told Motor Sport Magazine last year:

“Look at the DBX,” he said, referring to his just launched SUV. “That’s a brand new car on a brand new platform developed exclusively for and by us, and built in a brand new factory. Do you think we could have done that if we’d been owned by a car company?”

The PIF, by the way, also owns some of Lucid, and Lucid’s CEO Peter Rawlinson recently teased following the EV maker’s disappointing first-quarter turnout that it was “in talks with multiple parties on licensing and selling its powertrain technology.” Aston Martin’s interest alone won’t save Lucid of course, but the startup has compelling hardware and software it’s thus far been unable to market and translate into sales. In the meantime, it’ll have to cut deals like these, at least until the Gravity SUV gets here. Hey — the DBX worked for Aston.

2nd Gear: Rivian’s Vans Are Now Rolling Service Centers

Rivian’s EDV vans primarily wear Amazon liveries, as they’re built for the retail giant that also happens to own a big chunk of the utility EV startup. But Rivian’s starting to use a modified version of those same vans to help build out its mobile service footprint, expecting to have upwards of 200 units in the fleet by the end of 2023. By way of Automotive News:

“These vehicles provide maintenance, repair, vehicle-to-vehicle charging and a variety of other mobile service needs for more than 35,000 Rivian vehicles,” the automaker said in a May press release announcing the deployment.

According to the California-based EV maker, it produced 9,395 vehicles and delivered 7,946 in the first quarter, including the R1T pickup, R1S crossover and Amazon delivery vans. Rivian, which is forecasting significantly higher production for the rest of the year, does not break down sales by model.

Rivian builds the vans in Normal, Ill. It calls the Amazon version EDV for electric delivery van and the service versions RSV for Rivian service van. Amazon has a long-term contract for 100,000 EDVs.

While the R1T service trucks are loaded with tools and light equipment, the vans can handle heavier and bulkier hardware.

“Each van is fit with a wheel balancer, automatic tire changer, air compressor, hydraulic jack and stands, and modular shelving with the parts and tools to complete 80 percent of all labor codes,” Rivian said. “Each van also has a dedicated 240v outlet to provide vehicle-to-vehicle charging.”

It’s functional and it’s good advertising for the consumer-facing R1S SUV and R1T truck — the latter of which the brand already uses in the field, too. Rivian has 35 service locations across the country at the moment, but CEO RJ Scaringe says the bulk of work is being carried out by roving technicians, who don’t need a full garage to handle most issues.

3rd Gear: Today In Dieselgate

The fallout of Dieselgate is still unfolding in German courts, almost 10 years since the scandal first broke. Initially, legal officials in the country stressed that automakers could only be charged with wrongdoing if they were determined to have installed defeat devices to intentionally, illegally bypass emissions controls during customer use.

Now, Germany’s highest court has pretty much thrown the intent component out of the window. Volkswagen, Mercedes and others will have to pay owners between five and 15 percent of the purchase price of their vehicles, if those vehicles incorporated mechanisms that flouted diesel emissions regulations at all. From Reuters:

The judge overturned previous dismissals by courts of such claims and referred them back to courts of appeal. It was up to carmakers to prove that their so-called defeat devices were functional and not illegal, she said.

Defeat devices are mechanisms or software that can change vehicle emissions levels, leading to numerous court disputes over whether manufacturers use them improperly to mask the true pollution levels of their vehicles.

Carmakers argue the devices, which are only switched on at certain temperatures, are needed to protect the motor and are in line with the law.

But European courts are increasingly backing car owners and environmental groups calling for recalls and compensation on vehicles with such devices, a high-cost hangover from the industry’s 2015 diesel scandal – which centred on Volkswagen – at a time when it is under pressure to focus on the transition to electric vehicles.

Monday’s decision was a change from the court’s previous position that carmakers could only be charged if they had intentionally installed an illegal device, after the European Court of Justice decided owners were owed compensation even in cases where the damage to plaintiffs was caused by negligence.

A few weeks ago I was in Italy for work, and reflected on all the diesel sedans and wagons my hot-footed driver threaded through and, sometimes, outright cut off on the highway. There are so many still on the road, still polluting and wreaking havoc on resale values, leaving no wonder why this scandal is still front of mind in European courts.

4th Gear: Everyone’s In On China’s Price War, Even ICE Carmakers

When Tesla started a price war among EV brands in China at the very start of 2023, it wasn’t surprising to see competitors in the sector — local and foreign — work to match the company’s discounts. But of course nothing happens in a vacuum. If EVs, which are traditionally more expensive than gas cars, have fallen in price, than what else are gas cars to do but fall in kind? That’s exactly the state of China’s auto market now, per Bloomberg:

After Tesla Inc. kicked off a price war that quickly enveloped other manufacturers earlier this year, now some two-thirds of auto brands in the world’s largest car market are offering discounts. The slashing of prices has become broad-based despite China recently extending tax breaks for consumers buying clean cars through 2027.

Data from China Auto Market, which collects nationwide retail transaction prices from almost 100 brands and 2,800 variants of passenger cars, show pricing for 80% of model variants has dropped from the end of last year through May, with 10% moving higher and the remainder unchanged.

The percent of transaction price drops of more than 10,000 yuan ($1,400) within five months has grown to around 36% of car variants. But what’s interesting is who’s swinging the ax the hardest.

According to China Auto Market, it’s state-backed Dongfeng Motor Group Co. and its brand Forthing, with pricing for their car variants on average tumbling 27% and 35%, respectively. Only a handful of brands — such as Cowin Auto, from less prominent player Chery Automobile Co., and Clever by SAIC Motor Corp. — have increased prices.

Dongfeng produces big, fuel-burning SUVs under the Hongqi and Forthing labels, and those have received deep price cuts as well — in fact, much deeper than Tesla’s in China at the present. Here in the U.S., average transaction prices actually fell the steepest for the luxury sector in recent months, which makes sense from a margin perspective.

Unfortunately luxury cars are beginning to become the only kind on sale. And yes, I know most people would not describe, say, a Kia Seltos as a luxury car. But they would a Model 3, even though 1) it’s cheaper than the average new car and 2) its interior has 80 percent fewer buttons or frankly any industrially-designed components, compared with the Kia’s. “Luxury” becomes a meaningless title when cars themselves are luxuries.

Reverse: The Federal Highway Act

On this day in 1956, 67 years ago…

Neutral: How Was Your Weekend?

I was in Wisconsin, so I went to a freaking cheese castle.