Jobs Will Be Lost Across The Auto Industry With Pivot To EVs, Warns Toyota
Good morning! It’s Thursday, October 10, 2024, 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: Going All-In On EVs Will Cost Auto Jobs
Toyota has been pretty hesitant in its switch to electric power, with the automaker repeatedly delaying EV targets, pushing back production and continuing its focus on hybrids. Now, the Corolla maker has revealed that some of the thinking behind this delay is due to the job cuts that a switch to full electric power will bring.
Company chairman Akio Toyoda has become the latest auto industry insider to warn that a move to battery power will result in job losses across the sector, reports Reuters. The cuts could come as skilled jobs in “engine-related” work are lost as gas-powered motors are replaced by electric ones, as Reuters reports:
“There are 5.5 million people involved in the automotive industry in Japan. Among them are those who have been doing engine-related (work) for a long time,” Akio Toyoda told reporters.
“If electric vehicles simply become the only choice, including for our suppliers, those people’s jobs would be lost,” he said, adding he liked gasoline vehicles.
Toyota, the world’s biggest automaker by sales, has been more cautious in its approach to EVs than other makers. That’s helping it currently as global EV sales slow and it benefits from demand for its expanding hybrid line-up, including in its top market the United States.
Instead of going all-in on battery power, Toyota instead has taken what it calls a “multi-pathway” strategy to cut emissions across its lineup. This has included an expansion of its hybrid offerings, the addition of hydrogen-powered cars to its lineup and the launch of new battery-powered models.
This mix will be true of the wider automotive market, as well as Toyota’s lineup, the company argued. Earlier this year, Toyoda explained that he believed electric cars would only account for around 30 percent of vehicles on the road, with hydrogen power and hybrid gas cars making up the remainder. However, he didn’t share a timeframe for this vision.
The automaker has been slow to add fully-electric cars to its lineup compared with other global automotive power houses, however, and just this week announced it was delaying its planned EV production here in the U.S.
2nd Gear: Steering Issue Sparks Recall Of 1.7M Hondas
From one Japanese automaker to another, but this time it’s not doom and gloom around the future of the auto industry, it’s concerns with the present. That’s because Honda has just been forced to issue a massive recall of cars across the U.S. that could hit almost 1.7 million vehicles.
The automaker has issued a recall impacting certain Civic, CR-V and HR-V models that could run into “sticky” steering issues, reports Ars Technica. The recall affects 1.7 million cars produced by Honda and Acura between 2022 and 2025, as the site reports:
Honda is recalling almost 1.7 million vehicles due to a steering defect. An improperly made part can cause certain cars’ steering to become “sticky”—never an attribute one wants in a moving vehicle.
The problem affects a range of newer Hondas and an Acura; the earliest the defective parts were used on any vehicle was February 2021.
Honda says that a combination of environmental heat, moisture, and “an insufficient annealing process and high load single unit break-in during production of the worm wheel” means there’s too much pressure and not enough grease between the worm wheel and worm gear. On top of that, the worm gear spring isn’t quite right, “resulting in higher friction and increased torque fluctuation when steering.
The issue has been identified on certain Honda Civic four- and five-door models, CR-V gas and hybrid options, HR-V models and Acura Integra cars. In order to remedy the issue in impacted cars, Honda will fit the models with a new worm gear spring and extra grease.
If you are worried that your car might be under recall, there are a few easy ways to check. First up, the NHTSA has a super handy app that you can use to see if your vehicle is being recalled, or you can head to the regulator’s website and plug your VIN into its recall search tool.
3rd Gear: BMW And Mercedes See Sales Dip
German automakers Mercedes and BMW are the latest brands to share their quarterly sales figures for the three months to the end of September 2024 and things aren’t looking good. Both companies posted a drop in sales, which they have attributed to slowing demand in China, reports Reuters.
BMW reported that sales were down by 13 percent between July and the end of September 2024, while Mercedes-Benz reported a three percent drop during the same period. The two companies linked the drop to struggles in Asia, with Chinese automakers posing stiff competition for overseas manufacturers, as Reuters reports:
Demand in China, the world’s biggest auto market, is suffering from a flagging economy, while foreign carmakers face stiff competition from local manufacturers offering cheaper models, especially EVs.
BMW’s sales in China slumped by a third while Mercedes’ fell by 13%.
Mercedes also noted a subdued global battery electric vehicle (BEV) market, reporting a 31% BEV sales drop. For BMW, BEV sales rose 10% in the quarter.
As a result of the slower sales for the two automakers, both BMW and Mercedes have cut their forecasts for the year. Both attributed the drop in annual targets to struggles in China, while BMW also reported that issues with braking supplier Continental were also impacting its output.
The drop in sales at BMW and Mercedes followed similar struggles reported across the world’s automakers. Nissan saw its sales drop more than five percent and Tesla missed its quarterly delivery targets during Q3 of the year.
4th Gear: Investors Aren’t Positive About Tesla’s Robotaxi Reveal
It’s a big day for electric car maker Tesla, which is set to outline its plans for our autonomous future later today. Are you excited? Well, it turns out investors in the company aren’t that hyped for whatever Elon Musk might unveil at the event in LA this evening.
In a roundup of investor opinions shared by Futurism, backers of Musk’s company reportedly “feeling too optimistic about Tesla’s prospects.” Concerns ranged from fears over what exactly Musk will unveil at the event and what kind of timeframe he hopes to deliver the robocab in, as Futurism reports:
Garrett Nelson, a senior equity analyst at CFRA Research, argued in a note to BI that Tesla still has to surmount “numerous technological hurdles” — not to mention regulatory ones —before it can be potential competitor to companies like Waymo.
It’s hard to argue otherwise: the automaker has yet to deploy fully autonomous driving capabilities, and its flagship Full Self-Driving mode is still classified as a driver assistance system, meaning it isn’t intended to operate without human intervention.
Other firms are also doubtful about Tesla delivering a new car in the near future, even if the hype is strong the short term.
“We wouldn’t be surprised to see relative strength in the stock leading into the event. But can TSLA live up to expectations and sustain momentum post the event? We are less convinced on this front,” analysts at the global investment firm UBS said in a note, per BI.
The event comes after Musk has been touting Tesla’s self-driving ambitions for more than a decade. In that time, he’s promised that an autonomous Tesla was coming almost every year and has so far only managed to roll out advanced driver assistance tech Autopilot and “Full Self-Driving” in select markets. Importantly, neither of those products can actually self-drive without the full attention of a driver holding the wheel and prepared to take over at any minute.
As such, there’s a lot riding on the We, Robot event later today, which will take place at a movie studio in LA and could include the reveal of a robotaxi concept and an expansion of Tesla’s self-driving tech. But really, who know what promises could come out of Musk’s mouth when he takes to the stage this evening.
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