Tesla Is Luxury Car Sales King in the U.S. and It's Not All That Close

Photo: Tesla

Tesla is leaving every other luxury vehicle brand far behind in terms of U.S. sales this year, General Motors is investing millions in an Australian minerals company to secure raw materials for its Ultium battery cells, and Toyota finally opens a plant in Myanmar that was put on hold because of a coup. All those stories and a lot more The Morning Shift for Wednesday, October 12, 2022.

1st Gear: Tesla is the Luxury Sales King in the U.S.

Tesla is blowing the rest of the luxury car sales game completely out of the water. In a segment usually dominated by the Germans, the Texas-based company is coming out on top right now. Entering the fourth quarter of 2022, it’s left everyone else (BMW, Mercedes-Benz, Audi, et al) fighting for second place.

From Automotive News:

While Tesla does not break out sales by market, the Automotive News Research & Data Center estimates Tesla delivered 114,000 cars and crossovers in the third quarter, rocketing 47 percent higher from a year earlier.

So far this year, the EV maker has a 112,050-vehicle sales lead over No. 2 BMW.

Overall, premium-brand sales tallied 539,807 cars and light trucks in the third quarter, up 7.1 percent while the broader industry’s deliveries flatlined.

[…]

BMW deliveries inched 3.2 percent higher to 78,031. Meanwhile, Mercedes sold 72,389 vehicles — up 31 percent — in the July-to-September period.

For the year, BMW remains ahead with a 16,905-vehicle lead over Mercedes. The Mercedes figures exclude commercial trucks and vans, which Automotive News does not consider luxury vehicles.

Tesla may have many, many faults, but when it comes to selling cars, it’s hard to argue with the results.

2nd Gear: GM is Putting Lots of Cash into an Australian Mining Company

General Motors has reportedly secured a new, and Australian, source of nickel and cobalt that it needs for its Ultium battery cells. GM has invested up to $69 (nice) million in a mineral exploration company in that country. From The Detroit News:

The Detroit automaker announced it is investing in Queensland Pacific Metals for the development of the company’s proposed Townsville Energy Chemicals Hub, or TECH, project in northern Australia.

“The collaboration with Queensland Pacific Metals will provide GM with a secure, cost-competitive and long-term supply of nickel and cobalt from a free-trade agreement partner to help support our fast-growing EV production needs,” Jeff Morrison, GM’s vice president of global purchasing and supply chain, said in a statement.

He went on to say that the investment also shows GM’s commitment to strong supplier relationships.

The agreement is just the latest example of automakers making investments and striking deals deep into the supply chain in a bid to shore up supplies of the raw materials needed to fulfill their EV ambitions. On Monday, for example, Jeep maker Stellantis NV said it had signed a non-binding memorandum of understanding with the owner of a nickel and cobalt project in western Australia for the “future sale of quantities of battery grade nickel and cobalt sulphate products.”

GM said the nickel and cobalt it procures from Queensland Pacific Metals will be used in batteries that power a range of products, including the Chevrolet Silverado EV, GMC Hummer EV pickup and SUV, Cadillac Lyriq, Chevrolet Blazer EV and Chevrolet Equinox EV.

Queensland Pacific Metals’s CEO said the agreement brings it one step closer to construction of the project which is slated to begin sometime next year.

3rd Gear: Toyota Plant in Myanmar Back on Track After Coup

Toyota said it has finally begun to assemble cars at its new plant in Myanmar after plans were put on hold for over a year and a half for two very legitimate reasons: a military coup in the country and the pandemic.

The plant may be back online, but it is still slow going. It has begun making just one or two Toyota Hilux trucks per day, and it’s working from parts kits sent to the country in September.

This is still better than what most companies are doing in Myanmar, since almost all of them have pulled out of the country altogether. From Reuters:

Japanese companies and other multinationals have faced pressure to pull out of investments in Myanmar that are perceived to benefit the military.

“We believe this meets our initial intention to contribute to the industrial development of Myanmar … and to support our employees and their families’ lives,” the company said in a statement. “Under these circumstances, we are continuously making every effort to comply with all relevant laws and regulations.”

The plant had originally been due to open in February 2021, the same month that the military seized power to stop former leader Aung San Suu Kyi’s National League for Democracy forming a new government.

Human Rights Watch, a leading advocacy group, called for Toyota and any other companies seeking to invest or resume operation in Myanmar to conduct human rights due diligence.

[…]

Toyota said in a separate statement that, according to internal research, its business in Myanmar was not directly related to state-owned and military-affiliated companies “in all processes of the car life cycle.”

The plant is located in the Thilawa Special Economic Zone. It’s supposed to be a manufacturing and logistics hub built with strong Japanese investments.

4th Gear: Stellantis Wants More Recycled Material in its Cars

Stellantis is looking to beat its medium-term target of having 35 percent of its vehicles be made up of recycled materials. However, a spokesperson for the brand does say that the number may vary depending on the vehicle.

By 2030, it aims to boost revenues of its recycling business ten-fold to over $1.9 billion. In that same time, the company is aiming to quadruple revenue from extended-life parts and services. From Reuters:

Presenting Stellantis’s Circular Economy business at on online press conference, [Alison] Jones [, senior VP of Global Circular Economy] said the project – based on “reman”, “repair”, “reuse” and “recycle” – would help the group meet its carbon net zero target set for 2038.

It will also help the world’s fourth largest carmaker to keep prices lower as the shift to electrification often means more expensive vehicles, and cope with potential prolonged shortages of raw materials in its supply chain.

CEO Carlos Tavares has said scarcity of raw materials will continue in the next decade, adding it is a key task for the carmaker to extend the life of materials it uses.

Demand is booming worldwide for recycled materials as manufacturers, from automakers to fashion firms, seek to meet their green targets. This often makes recycled materials more expensive than new ones.

Jones has also said that the company’s “remanufactured” components were somewhere between 10 and 30 percent cheaper than the original ones because of the reduced use of raw materials and energy.

5th Gear: Mercedes-Benz’s and Microsoft’s Supply Chain Team-up

Microsoft and Mercedes-Benz have announced a new partnership that will use Microsoft Cloud for a data platform with the intent of improving vehicle production efficiency at 30 of Benz’s global vehicle factories. From Reuters:

The data platform, called MO360, is already available in Europe, the Middle East and Africa and will also be launched in the United States and China, the statement said.

The aim is to gather data from across the production process from components to logistics to the assembly line to create a virtual replica that allows teams to identify potential supply chain bottlenecks more quickly.

According to the two companies, this move will increase vehicle production by 20 percent in the next three years. Not too shabby if you ask me.

Reverse: Don’t Fly Experimental Amateur Aircraft

Neutral: Let’s Go Yankees

If you click the link to this blog, you automatically support the Yankees. I don’t make the rules. I just enforce them. If Thursday’s ALDS Game 2 is rained out I am going to be very upset. No one wants that. Also, Gerrit Cole is an ace. I will not hear differently. (Editor’s note: The Yankees are garbage and anyone who supports them is a trash person. Let’s go Guardians.)