Biden Got Manufacturers To Build EVs But He Can’t Force You To Buy One
Good morning! It’s Wednesday, November 8, 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.
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1st Gear: Biden’s Bold EV Push
President Joe Biden has taken several steps to try and bring about America’s pivot to electric cars. He’s freed up funding to improve charging networks across the country, encouraged federal fleets to switch to EVs and rolled out a raft of tax credits available to anyone buying an American-made electric car. Steps like these appear to be making a difference, as the number of U.S.-built EV continues to rising.
Biden’s 2022 climate law brought in a wave of investment and innovation across America’s electric vehicle market, reports the New York Times. Automakers pledged to ramp up EV production and companies including BMW and Hyundai now have battery plants in the works to boost future EV capacity. While it’s great that automakers have brought about this change in industry attitudes towards EVs, the Times warns that the same switch hasn’t happened among most American car buyers just yet. The site reports:
For now, the climate law has not drastically affected trends in electric vehicle sales. Americans are poised to buy one million electric cars and trucks for the first time this year, continuing a steady trend of increased market share for electric vehicles that began years ago.
The law’s most pronounced immediate effect on the consumer market appears to be unintended: driving many electric car shoppers to lease vehicles instead of buying them. That’s because a Treasury Department regulation enables auto dealers to avoid the law’s made-in-America requirements for cars that they buy and then lease to customers. That allows shoppers to effectively reap the full benefits of the federal tax break for models that otherwise would not qualify.
This lukewarm reception to EVs has been particularly obvious in recent months, as Ford suggested that it might cut production at the plant building its F-150 Lightning EV and GM pushed back its own electric vehicle targets.
Despite the struggles with demand that some automakers are facing, the Times argues that “…electric vehicle sales are projected to jump sharply under the right conditions.” Those conditions including charging points positioned every 50 miles on major U.S. roadways and easily accessible tax credits for anyone looking to buy an EV. If that happens, the Congressional Budget Office suggested that electric vehicles could make up “42 percent of all vehicles sold in America in less than a decade.”
2nd Gear: Rivian Might Actually Be Doing OK
After EV startups Fisker and Lucid slash delivery targets as they posted lower than expected sales figures, fellow EV maker Rivian is feeling more positive about the electric car market. The electric truck maker just increased its production goals for the year, claiming that it will produce 54,000 units by the end of 2023.
Rivian, which builds its R1S and R1T electric cars in Illinois, has faced numerous supply chain issues in recent months, which hampered its production according to Reuters. Now, the EV maker appears to be through the worst of it and is ready to increase its output ahead of a long-rumored launch of a more affordable model.
The move is in stark contrast to announcements made by market leader Tesla and fellow EV startup Lucid, which cut its output for the year from 10,000 units down to around 8,000. Reuters reports:
“I’m actually surprised to be honest at how much we’ve seen others pull back,” Rivian Chief Executive RJ Scaringe said in an interview with Reuters. “I think it’s going to create, unfortunately, somewhat of a vacuum of products in the market.”
He said that “shifts in buying behavior beyond the tail end of 2023″ were not influencing Rivian’s investment strategy for cheaper R2 vehicles that the company expects to launch in 2026.
In another boost for the company, Rivian ended its exclusivity deal with Amazon for the use of its electric delivery trucks. Amazon, which is one of the company’s biggest shareholders, order for 100,000 electric delivery vans before the end of 2030. On top of that mammoth order, Rivian is now also “speaking with other customers that are interested in the Rivian Commercial Vehicle platform,” Reuters reports.
3rd Gear: Hyundai Wants To Build Flying Taxis
While Rivian is getting the hang of building electric cars, Hyundai wants to take things up a notch and is preparing to start building electric flying taxis. The Korean automaker confirmed that it plans to build a U.S. plant for its Supernal flying taxi arm, which hopes to have eVTOL craft ready for commercial use by 2028.
Hyundai’s air mobility division Supernal is eyeing locations in the U.S. at which to build its first plant, where it will assemble an eVTOL taxi that can travel at speeds of up to 120 miles an hour while carrying one pilot and four passengers, according to Bloomberg. While the company has not yet outlined the size or capacity for the factory, it will follow the opening of an engineering center for the company in California. Bloomberg reports:
Racing to catch up, Supernal opened a new engineering headquarters in Irvine, California, in July and a new R&D facility in Fremont two months later. Its workforce has doubled from last year to nearly 600, with many coming from Boeing Co., Lockheed Martin Corp. and Tesla Inc., according to [Supernal Chief Executive Officer] Shin Jaiwon.
In the two years since Supernal was founded, Hyundai, Kia and Hyundai Mobis Co. have invested about 1.2 trillion won ($920 million) into the company, filings show. With funding coming from Hyundai, Supernal doesn’t plan an initial public offering, Shin said.
As well as announcing plans for a stateside factory, Supernal also recently announced a deal with Korean Air to begin offering its services to the South Korean market. The deal follows similar tie-ins with eVTOL manufacturers and major airlines, including one between United and startup company Archer Aviation.
4th Gear: GM Targets Low Cost EV Motors
In a move to try and make its future EVs more affordable, General Motors has partnered with an American company investigating new motor tech. The U.S automaker has partnered with Niron Magnetics of Minneapolis to develop new magnets that could be used in EV motors of the future.
The deal, which was shared by the Detroit Free Press, will see GM and Niron Magnetics develop something they call “Clean Earth Magnet motor technology,” which could be used in future GM electric models. The tech uses more affordable and readily available materials to create components needed in EV motors. As the Free Press explains:
Niron’s proprietary Clean Earth Magnet technology is based on iron nitride, an abundant and affordable material with great potential for commercial use in future EVs, [Jonathan Rowntree, the company’s CEO] said.
The permanent magnets used now in EV motor rotors are typically made from rare earth minerals that are expensive and currently processed almost entirely overseas, GM said in a statement.
If EV makers like GM can uncover new technology that brings the cost and environmental impact of EVs down, it could be key to a future market filled with electric cars that people can actually afford.
So far, GM has not revealed how much it’s invested in the new deal with Niron Magnetics. However, the company did reveal earlier this week that it had “raised $33 million in additional funding,” reports the Free Press.
