Toyota Kicks U.S. EV Production Even Further Down The Road
Good morning! It’s Tuesday, October 8, 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: Toyota Delays U.S. EV Production
Toyota is delaying the production of its first U.S.-made electric vehicle until 2026 at the earliest. Still, it says it’s going to sell as many as seven all-electric vehicles here within the next two years. It’s going to be very interesting to see if that actually happens with the EV market being as unpredictable as it currently is.
Initially, Toyota’s U.S. production of a three-row electric crossover at a plant in Georgetown, Kentucky, was slated to start late next year. However, a company spokesperson said it’ll be pushed until early 2026.
Still, Toyota is locked in on building the EV crossover in Kentucky in the early part of ’26 along with another EV SUV that’ll be built in a factory in Princeton, Indiana late that same year. From Bloomberg:
The planned expansion of Toyota’s EV lineup in the US from the current two vehicles to as many as seven comes at a time when demand for battery-powered vehicles has slowed. The US rollout is part of a broader goal to sell 1.5 million EVs globally by 2026. To help reach that, Toyota is building a lithium-ion battery plant in North Carolina that is expected to start up in 2025.
In February, Toyota said it would spend $1.3 billion to tool up its Kentucky factory for EV production, then in April followed up with an announcement to invest $1.4 billion in the Indiana facility for a second EV.
Japan’s Nikkei newspaper reported the delay in EV production at the Kentucky plant earlier Wednesday, adding Toyota also has canceled plans to produce a Lexus brand SUV in North America by 2030.
Right now, Toyota sells the bZ4X and Lexus RZ450e, and they both kind of stink. Hopefully, this next generation of Toyota EVs will be far better than those two. Honestly, they need to be.
We shall see if these plans by Toyota actually pan out. So far, the Japanese automaker has been very slow on the uptake of electric vehicles, hedging on hybrids instead, and that plan has worked out for it.
2nd Gear: Lucid Clears Out Old Inventory Through Incentives
Lucid just reported a massive 91 percent jump in third-quarter deliveries from the same time last year. That works out to a record 2,781 Air sedans changing hands, but it’s still a bit premature to celebrate. A big reason for this spike in sales was generous factory incentives.
Production rose a rather modest 16 percent to 1,805 Airs. Basically, Lucid used heavy incentives to clear out old inventory. Still, the Newark, California-based EV maker says it was the third quarter quarter of record deliveries. Not too shabby. From Automotive News:
Factory incentives on the large Air sedan increased 28 percent in the third quarter from the same period a year earlier to $19,403 per vehicle, according to Motor Intelligence. The Air has a starting price of $71,400 with shipping.
A key competitor vehicle, the Mercedes-Benz EQS sedan, had similar third-quarter incentives at $21,990 per vehicle, according to Motor Intelligence. The EQS starts at $105,550 with shipping.
Some of the incentive money comes indirectly through EV leasing, which allows finance companies to claim the $7,500 federal EV tax credit and pass some or all of it on to consumers. But automakers and their finance arms are not obligated to do so.
Through the first three quarters of 2024, Lucid has delivered 7,142 Airs. That actually puts it ahead of the pace it needs to reach its full-year forecast of building and selling 9,000 vehicles. In all of 2023, Lucid sold just 6,001 Airs.
Lucid plans to launch its second vehicle, the Gravity large crossover, this year. It will have a starting price of around $80,000 before shipping. Lucid hasn’t announced final pricing.
The EV maker is also developing a midsize crossover, priced below $50,000 before shipping, that is scheduled to start production in two years, according to CEO Peter Rawlinson.
Lucid is expected to report its third-quarter financial results on November 7, and that’ll be very interesting. In the second quarter, Lucid posted a $790 million net loss on $201 million in revenue.
3rd Gear: EV Production Starts At Hyundai’s Georgia Plant
Production of Hyundai’s refreshed 2025 Ioniq 5 electric crossover has started at the Korean automaker’s brand-new factory in Georgia. That’s a pretty impressive accomplishment when you consider Hyundai broke ground at its 3,000-acre Metaplant in Bryan County, Georgia less than two years ago.
The plant will build six EVs for Hyundai, Kia and Genesis. Additionally, it will serve as a battery factory as part of a joint venture between the automaker and LG Energy Solutions, but that part of the factory won’t be up and running until the end of 2025.
The total cost of all of this? $7.59 billion. That’s a lot of cash, but Hyundai says it’ll be able to build 300,000 EVs a year at the plant, and it’ll be able to increase that number to 500,000 if there’s enough demand. From Automotive News:
A Hyundai spokesperson said in a statement that the production process at the plant has been validated “to ensure its vehicles [meet] Hyundai Motor Group’s high-quality standards” and that a “grand opening celebration is planned for the first quarter of 2025.”
[…]
Hyundai Motor North America CEO Jose Muñoz said this year that the factory will also build hybrid vehicles to keep up with consumer interest in the powertrain.
This new plant also means the Ioniq 5 will not qualify for a federal tax credit.
Hyundai said the U.S.-assembled Ioniq 5s will arrive at dealer lots by the end of the year.
The Ioniq 5 — freshened for the 2025 model year with more range and an off-roading XRT trim — will be eligible for a $3,750 federal tax credit, making it the first EV from the group to qualify for at least part of the $7,500 federal incentive under new, stricter guidelines implemented this year. All Ioniq 5s qualify for a $7,500 incentive when leased.
The new Ioniq 5 will also be compatible with Tesla’s North American Charging Standard port when they go on sale.Hyundai has not said what other vehicles will come from the Metaplant, but Muñoz said that starting with the Ioniq 5 was a “no brainer” because of its popularity.
The Ioniq 5 is a brilliant little electric crossover, so it’s great to see it’ll be a little bit more attainable to more people.
4th Gear: Uber, Lyft Must Face California Driver Suits
The U.S. Supreme Court will allow California lawsuits against Uber and Lyft to go forward. The lawsuit by the state of California is on behalf of drivers who signed agreements to keep legal disputes with the two companies out of court in a legal fight over. This all has to do with their status as contractors or regular employees. From Reuters:
The justices turned away appeals by the two companies of a California state appeals court’s ruling that let the Democratic-led state’s attorney general and labor commissioner pursue claims that Uber and Lyft owe money to drivers who were misclassified as independent contractors rather than employees.
The companies have argued that federal law bars states from suing on behalf of anyone who signed agreements to bring legal disputes in private arbitration rather than court. That includes more than 60 million U.S. workers and virtually any consumer who joins a subscription service, accepts a company’s terms of service or registers a product.
Theane Evangelis, a lawyer for Uber, in an emailed statement maintained that the California court’s ruling was incorrect, and said the Supreme Court could decide the issue in a future case.
California filed separate lawsuits against the companies in 2020. A state appeals court in 2023 ruled against the companies in their challenge to the lawsuits. The California Supreme Court subsequently declined to hear their appeals.
California is one of several Democratic-led states that have accused Uber and Lyft of depriving drivers of minimum wage, overtime pay, reimbursements for expenses and other protections by labeling them as independent contractors. Most federal and state wage laws apply only to employees, making it much cheaper for companies to hire contractors.
For years, Uber and Lyft have denied that they employ “gig workers” who might benefit from the flexibility of contracting.
The industry has advocated for state ballot measures allowing companies to treat workers as contractors in exchange for providing certain benefits. California’s top state court in July upheld such a measure backed by Uber and Lyft and overwhelmingly approved by voters in the state in 2020.
Uber and Lyft in June agreed to adopt a $32.50 hourly minimum pay standard for Massachusetts drivers and pay $175 million to settle a lawsuit by the Democratic-led state’s attorney general alleging they improperly treated drivers as independent contractors.
This is not Uber and Lyft’s first legal rodeo. The two were sued by thousands of U.S. drivers who say they should have been treated as employees. So far, not many of these cases have yielded definitive rulings. Many have been sent to arbitration since most Uber and Lyft drivers sign arbitration agreements.
Sneaky bastards.
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Oi bruv it’s chewsday innit?
On The Radio: Andy Grammer – ‘Fine By Me’
Andy Grammer – Fine By Me
