Even Porsche Is Mulling Over A North American Battery Plant

Good morning! It’s Wednesday, July 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.

Nissan Finally Turns a Profit

1st Gear: Even Porsche Is Not Immune

Porsche builds cars all over the world. Many of them come from Germany of course, though some are also built in Slovakia and Malaysia, and the automaker also has a research and development facility in China. Like its peers, however, it’ll have to put up a battery plant for all the electric vehicles it hopes to sell in the future. This plant could very well be located in North America, because — well, you know the reason. Courtesy Bloomberg:

Porsche AG is talking to potential financial and strategic partners to set up an electric-vehicle battery factory that could cost as much as €3 billion ($3.3 billion).

The luxury-car maker is considering locations close to Germany, the US and Canada and will base its decision mainly on where electricity prices are competitive and renewable energy is available, it said Wednesday. The plant will have a capacity of as much as 20 gigawatt-hours.

“It’s important to get energy costs right,” Chief Financial Officer Lutz Meschke told reporters.

If Porsche could choose anywhere to put this factory, it’d probably base it near where it makes the vast majority of its models, in Germany. But the Inflation Reduction Act has made our side of the pond mighty enticing, as the brand’s top executive has admitted. At the moment, Porsche sources its cells for the Taycan from LG Energy Solution, which ships them to Dräxlmaier for assembly, conveniently based a stone’s throw away in Stuttgart.

As for how the brand’s electrification strategy will transform its range, every Porsche will become an EV over the ensuing years — except one. Per Reuters:

The automaker will electrify its compact SUV Macan, followed by the 718 sports car and then the best-selling Cayenne, Porsche e-fuels team leader Karl Dums said. The 911, accounting for 13% of sales in 2022, is the exception.

“Our strategy in the first place is switching to electric mobility and … we will produce the 911 as long as possible with a combustion engine,” Dums said.

Synthetic fuels could very well allow the internal combustion engine-powered 911 to live out many more days on this Earth. Seems like those text exchanges between Germany’s finance minister Christian Lindner and Blume about e-fuel carve-outs within the European Union’s ICE ban weren’t in vain after all.

2nd Gear: Price Hikes Help Stellantis Win Q2

Stellantis is a house of many, many brands, but one of its advantages is that plenty of those brands are of the more premium variety, and those can ratchet up prices without customers recoiling too much. Jeep is basically a luxury brand at this point, when $70,000 Wranglers are in the mix. This is part of how the company was able to outperform its earnings target for the second quarter by a considerable margin, as Reuters reports:

The world’s third largest automaker by sales said on Wednesday its January-June adjusted earnings before interest and tax (EBIT) rose 11% to 14.1 billion euros ($15.6 billion), topping the 12.1 billion expected by analysts in a Reuters poll.

New CFO Natalie Knight, who took the job this month, said pricing power was still the main driver for the results of the group whose brands include Fiat, Peugeot, Alfa Romeo, Ram and Jeep.

“We did a variety of price increases and the group has been outstanding at holding on to those, and also looking at where additional pricing was appropriate in the first half,” she said.

Milan-listed shares in Stellantis were up 2.5% by mid-morning, outpacing a 0.4% rise in Italy’s blue-chip index.

Stellantis’ margins over that time were strong, though not quite as strong as they were a year ago, when a lack of supply really allowed the company to pull whatever tricks it deemed necessary in terms of pricing and assuredly get away with it.

3rd Gear: Cheap Mobility, Cheap Batteries

Battery fires happen. And while the fears can certainly be a bit overblown when you consider the percentage of vehicles that actually experience them, they’re a little more worrying in the electrified mobility realm, where products are cheap and are subject to far less regulatory oversight. Automotive News explored this problem in a story published Wednesday:

Micromobility products such as e-bikes are regulated by the Consumer Product Safety Commission, which also governs standards for bicycles. Statutorily, the commission can only urge compliance with voluntary standards — unless the current standard does not adequately reduce consumer risk, or unless manufacturers are unlikely to comply. In that case, the commission can issue mandates.

Automobiles and parts, including aftermarket parts, are regulated by two agencies. NHTSA sets standards for vehicle safety, and the EPA sets standards for vehicle emissions. Regulations govern the volume of the horn, the tint of the windows, the ground clearance of the headlights and other features. […]

Meanwhile, micromobility manufacturers are governed only by voluntary standards for one of their central components, lithium ion batteries. In December, the commission wrote a letter to more than 2,000 manufacturers and importers recommending they adhere to UL safety standards, a well-respected stamp of approval governing consumer products.

Underwriters Laboratories Senior Vice President Robert Slone said that he’s not seen “any case” where UL-certified batteries have blown up, though of course whether or not those OEMs go to the trouble and expense of UL certification is ultimately up to them.

“Brands you would recognize, for sure, are bringing their e-bikes down for testing and certification at a much greater pace than they did before because of the law,” he said. “So I am encouraged that we are going to get to a better place.”

Starting in September, micromobility products sold in New York City must adhere to UL standards. However, there are no rules preventing someone from buying a no-name electric scooter off of Alibaba and using it in the five boroughs, so the law could probably use some tweaking.

4th Gear: Nissan’s Putting Its Money In Renault’s EVs

Renault’s EV unit, Ampere, will receive an investment to the tune of $663 million from Nissan as a show of confidence for this new re-aligned alliance that is totally going to be healthier than it used to be. From Bloomberg:

The Japanese carmaker will invest as much as €600 million ($663 million) in the business, the companies said in a statement Wednesday. Separately, the pair formalized a deal for Renault to reduce its ownership of Nissan to 15% by placing the rest of its current 43% shareholding in a French trust.

“It is difficult for us to do business in Europe alone, so investing in Ampere gave us an opportunity to connect with other companies,” Nissan CEO Makoto Uchida said.

Mitsubishi said this week it will decide on investing in Ampere by the end of this year, at the earliest. Nissan’s investment may disappoint some Renault investors; Oddo BHF analysts had previously anticipated that the Japanese carmaker would commit €750 million to €1 billion to back Ampere.

Still, it’s not all underwhelming news in the Renault-Nissan world. The Japanese automaker raised its projected operating profit to $3.9 billion for the 2023 fiscal year, which ends March 2024. This is exactly how Nissan is going to make that electric Skyline SUV a reality.

Reverse: Didn’t Pick Up The Logo Was An Eagle Until I Was About 20

On this day in 1775, 248 years ago…

On The Radio: Remember Sports – ‘Pinky Ring’

Credit: Remember Sports via YouTube

I have seen Philadelphia’s very own Remember Sports at least 12 times in the last six years. But until last night, I hadn’t seen them since before the pandemic, around the end of 2019. They’re the best band and their shows are so much fun. Go check ’em out when they’re in your town.