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EVU report: EU slaps tariffs on China EVs — CATL and Gotion in trouble in US — Rivian refreshed R1S and R1T

Caution! High Voltage ⚡

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Hey, Jaan here.

Holy smokes a lot is going on in the EV industry these days. On the menu today:

  • [Deep Dive] EU reveals the tariffs on Chinese EVs;

  • Three 300+ mile EVs now cheaper than US average new car;

  • Tesla shareholders voted to pay the man his $56B.

  • EV driver’s manifesto of England;

  • EV spotlight: Rivian R1S and R1T refresh;

  • CATL & Gotion in danger in the US due to slave labor claims?

… and more. Let’s dig in, shall we?

Words: 3,168 | Reading time: 13 minutes | Feeling: excited for Brazil

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European Commission announces tariffs on Chinese EVs

I promise I’ll stop leading out with EV policy deep dives soon. These tariff games are important because they directly influence what I call “the EV flow” of the world.

I’m sure we’ll be referencing back to these changes when we’re witnessing the causes of these down the road in the future newsletters.

The two large policy ‘causes’ I’m talking about here are the US quadrupling China EV import tariffs (25%→100% as we reported a month ago here) and the European Union now imposing its tariffs on China EV imports:

European Commission completed their first investigation into three Chinese automakers, and announced the new tariffs between 17.4% and 38.1%. (link)

Currently, the EU has 10% import duty on EVs coming from China, but this will change from 5th of July. I’ve now confirmed that these new tariffs will be added additionally to the 10%. These tariffs will be entered into force on a provisional basis, and proposals for permanent measures will come in November 2024.

Here are the tariffs for the three companies that were “sampled", aka investigated from the 21 cooperating automaker groups:

  • BYD: 17,4%

  • Geely: 20%

  • SAIC: 38,1%

The other automakers that cooperated, but are not yet sampled, will be subject to the 21% weighted average duty.

The EV makers that were not cooperating with the investigation will be hit with 38.1%. SAIC’s high import rate is claimed to be because it was “uncooperative”.

The investigation included a detailed questionnaire from these companies (you can find the sampling form on the site), and then followed by visits to about 100 production sites in China.

While it’ll be difficult for SAIC with its 10+38.1% tariffs to operate in Europe, per the data we’ve gathered so far, BYD will still be able to turn a decent profit with the 10+17.4% tariffs.

There is a special note in the press release about Tesla, too:

"Following a substantiated request, one BEV producer in China – Tesla – may receive an individually calculated duty rate at the definitive stage.”

The “substantiated request” is likely what we wrote about in our Teslaverse issue #9 here. It’s safe to presume Tesla will be left with a 21% rate until then.

The “definitive stage” here means the third phase of this investigation and tariffs, which will take place between 6th September and Definitive Measures will apply, after a vote, on 2nd November 2024. (link)

There is a slight glimmer of hope left in the press release too, that the duties will be introduced on the 4th of July only go into effect “should discussions with Chinese authorities not lead to an effective solution.”

So, although going into effect, these tariffs aren’t final. Yet.

Norway’s Finance Minister says they won’t join Europe in this tariff hike (link).

How many imported Made-in-China EVs are we talking about right now? T&E created a good chart to visualize the current share of sales and forecast (link):

In related news, Volvo (majority-owned by Geely with that +20% tariff increase there), has already begun relocating the production of its China-made EVs EX30 and EX90 to Belgium. (link)

In probably related news, Great Wall Motor, in Europe operating as GWM and selling the cheap EV Ora, is about to close its European HQ in Munich in August and halt the market expansion. (link)

There are potential winners here too: European contract manufacturers. One of such is Magna Steyr (link in 🇩🇪 ):

„Over the last twelve months, we have seen very strong activity from all the Chinese OEMs who have contacted us and who want and need to localise.“

— Roland Prettner, head of the contract manufacturer Magna Steyr in Graz

Turkey imposes its own

In adjacent and probably-not-a-coincidence news: Turkey (not an EU member state) announced it’ll impose a 40% additional import tariff to vehicles from China, starting from July 7th with a minimum of $7,000 per vehicle.

Since Tesla just started selling in the country, will that leave the Turkish market just with the Model Y (made in Berlin), and not the Model 3 (made in Shanghai)?

For context on Turkey, you might’ve noticed that it won the “best in EV growth” position in our EV Sales 2023 analysis by growing 734.3%, from 7,733 EVs to 64,515 EVs sold just within one year. It is the new state-owned and locally best-selling EV maker, Togg, is who they are protecting with these anti-China measures.

What will the tariffs really change?

Caution: Jaan’s rant ahead.

While the tariffs will level the playing field between the European domestic EV makers and Chinese incoming EVs on profits they earn, it does serve as a very clear countermeasure to the EV adoption itself, at least in the near term.

We’ll get less affordable EVs left for us, the EV drivers and owners. This tariff hike will give all the more reason for domestic makers to not innovate and delay their EV ambitions, as their runway against the competition — albeit just by a few years — increases.

As I wrote in our last newsletter, the real winners here are now the “rest of world” countries outside EU and US, as without protectionist measures they’ll let the EV boom truly take off. Now, there will be even more incentive for Chinese EV makers to focus on those other markets.

Latest example: BYD just reached its 100th dealership in Brazil and plans 250 by the end of the year. Also just opened its first showroom in Saudi Arabia, making it the 80th country or region BYDs are sold worldwide.

And some of the wiser European automakers will do the same too — for example, I wrote about Stellantis’ grand plans with Leapmotor to start conquering the ‘Rest of World’ markets in addition to European presence.

All we can hope for is that the European automakers take these few years they’ve given (not more as Chinese EV makers will start producing locally and partnering up), and actually use the time to build out proper and competitive EV production capacities.

There’s also the wild card of UK in question here, as now being outside EU and it’s EU→←UK EV tariffs postponed until 2027, it might serve as a little loophole for a while?

I’d love to know what you think of these tariffs — comment on this newsletter via the ‘read online’ link on top right, or leave me a reply to the email or through the feedback form on the bottom.

I also uploaded this deep dive as a separate article, so you can share the news with your friends: Deep Dive: EU adds 17.4% to 38.1% import tariffs on Chinese EVs.

🇺🇸 Price parity is here: Tesla, Hyundai-Kia, and General Motors now offer EVs with more than 300 miles (480 km) of range for less than the cost of the average new vehicle sold in the US ($47k). (link)

Tesla held its 2024 Annual Shareholder meeting. Importantly, they received enough FOR votes to incorporate in Texas instead of Delaware and to pay the man the $56B comp package. Here’s the 2024 Annual Shareholder Meeting livestream from yesterday timestamped to when Musk walked on stage. I’ll write up a summary of everything we learned for you in next week’s Teslaverse issue.

Meanwhile I enjoyed that Tesla is (or needs to) actually post screenshots of all Musk’s Tesla-related tweets about the vote as actual SEC filings. One of these can be found here, and it also shows a screenshot of this exchange on X:

Volkswagen Group confirms the plans of investing €120 billion ($129B) by 2028 into electrification and digital services… and another €60B ($64.5B) to further develop its combustion engines. (link) Per the CFO Arno Antlitz, “the future is electric, but the past is not over. It is a third and it will stay a third.”

With that, I’d say the chances of VW Group has what it takes to survive as an automotive powerhouse has now been reduced by a third.

🇮🇹 Italy closed its €240M EV subsidy application portal after just nine hours — because it received too many applications. While we’re not sure the whole budget was used, there subsidies do go up to €13,750 ($14,841) if some low-income and other conditions are met. The common subsidy will be €6k ($6.5k). (link in 🇮🇹 )

Arrival is now officially declared bankrupt. (link) We’ve covered Arrivals story both up and down, most recently back at the end of March when it sold some of its assets, including manufacturing equipment to Canoo. Arrival was valued at over $13 billion during the peak EV hype cycle, has been backed by Hyundai and UPS, and was set to build microfactories all around. I was most excited for the Arrival Bus to hit the streets.

Without further eulogy, we shall bid farewell to the Arrival Van and Arrival Bus 👋 

I know Arrival had some deeper EV technology partnerships with Charge Cars, one of my favorite re-build EV startups out there that is producing the ‘67 Mustangs, fully electric, from scratch. Only 499 will be made. I hope they don’t take a hit from Arrival’s downfall.

🇺🇸 Ford is walking back on its dealer certification plan where it required dealerships that wanted to sell EVs to go through an EV certification and infrastructure program, which meant up to a $1.2M investment for dealerships. (link) This seems like one of the collateral damages of Ford’s EV plan delays.

🇬🇧 EVA England launched the EV Drivers’ Manifesto (8-page pdf), asking the government 12 points ranging from introducing zero-interest loans for used EVs to reducing VAT on electricity and fixing the EV insurance market.

🇳🇵 The country saves money thanks to EVs: the Nepal Electricity Authority estimates use of EVs has reduced oil import costs by $22 million a year, and the savings are increasing. (link) The country is pledging to raise EVs to 25% of all auto sales by 2025 and 90% by 2030, and is charging lower duties on EVs.

Rivian launched the refreshed R1S and R1T. (link) (video)

They start at $75,900 and $69,900 respectively, and here’s some of what’s new:

  • Most of the updates were in the interior and tech, with the most notable exterior change being the charging indicator LEDs in the tail light bar and at the front;

  • More than half of the hardware components have been updated;

  • New wheels and tires, and interior trims, new heat pump;

  • Dolby Atmos system and Apple Music now integrated;

  • Using NVIDIA chips now with 10x the compute of old system, 17 ECUs reduced to 7, and

  • Rivian launched its new in-house developed autonomy system called Rivian Autonomy Platform, powered by 11 cameras, five radars, and AI prediction technology.

  • Keyless entry that can be added to Apple Wallet;

  • Instantly tintable sunroof (video of it in action);

  • The highest-end R1T now has 1,025 horsepower, does 0-60mph in <2.5s. Here’s CEO RJ Scaringe showing Launch Mode (video).

  • New game-like User Interface powered by Unreal Engine (video); if you want to geek out further, here’s the backstory of the design by Unreal (link). This is how the background on Rock Crawl mode looks like:

Elsewhere:

Cadillac Optiq overview: (link)

Fun: when the Cybertruck is updating, its steering wheel becomes completely loose, as there’s no mechanical connection to the wheels with the steer-by-wire system (video).

Fully loaded Scania Semi does 1,600km (994 mi) in two days, spends only a total of 20 minutes extra for charging, and achieves an impressive 1kWh/km efficiency. (link)

I calculated, that this 1.61 kWh/mile consumption would put it at one of the most efficient EV Semi trucks in the world, even beating Tesla Semi ~1.7kWh/mi. Granted, the latter was measured as average over 3.5 million miles.

Aspark Owl broke Rimac Nevera’s record for the fastest electric hypercar, reaching 438.7 km/h (video).

CATL & Gotion in danger in the US?

Some US lawmakers sent two letters to the Department of Homeland Security about two Chinese batterymakers, CATL and Gotion, on the claims of the companies holding ties to Chinese paramilitary organizations and state-sponsored slave labor programs. Products made with Uyghur forced labor are strictly prohibited from entering the United States by the UFLPA act. (link)

Essentially, they call for placing CATL and Gotion on the Entity List of the UFLPA, banning them from entering the US.

Here is the letter about CATL (15-page pdf) and about Gotion High-Tech (9-page pdf), showing the ties, even with schematics, between the companies.

The Select Committee has uncovered indisputable evidence that Gotion High Tech and CATL have supply chains that are deeply connected to forced labor and the ongoing genocide of Uyghurs in China.

— John Moolenaar, Chairman of the Select Committee on CCP

If you’ve missed this, CATL is the world’s largest battery maker (37.7% market share this year) and likely powers a lot of the EVs around you — while Gotion is currently the 9th-largest with 2.2% market share. Notably, Gotion High-Tech’s largest shareholder is Volkswagen China which owned 26.5% of the company in late 2021.

The two letters brought out very specific examples, for example CATL sourcing li-ion anode materials from a company controlled by XPCC, which is an US-sanctioned Chinese paramilitary organization.

The EV boom should never come at such costs. I assume we’ll see this issue now escalate rather soon.

PS — I’m covering exactly 16 battery industry news in today’s Pro Report. If you’re interested in the EV battery industry, along with mining and recycling, the Pro membership is for you.

Random thought: have you ever considered that the Chief Product Manager at a charging network is literally

…a CPO at a CPO?

🇩🇪 The German government has agreed on a draft law that from 1 January 2028, gas station chains must have at least one 150kW+ charger in each station. This would add around 8,000 new chargers nationwide.

🇺🇸 Kempower starts DC charger production in its new Durham County, NC plant. (link) Context: this is Kempower’s fourth factory, and in 2023 there were 7,482,770 charging sessions done with Kempower chargers, delivering 196 GWh of energy.

🇺🇸 25 US states have announced their NEVI program awards so far, and 16 haven’t even opened their first round. (link) It takes time to launch ‘em sites, too: 10 sites that have been funded by NEVI are now online and open to use, across 6 states.

Reading tip: an interview with the CEO and CPO of IONNA, by John Voelcker (link).

Research tip: P3 analyst group released their 4th edition of the Charging Index, this time focusing on Asia (19-slide pdf). Here’s their comparison of recharged range after 10 minutes of charging (green) and 20 minutes (blue). Lotus Emeya is the winner here.

Unlock 21 more charging news in today’s Pro Report.

MEME OF THE WEEK

My three years of EV research on this newsletter has come to this one conclusion, which I shall now present thou in the form of a meme about legacy auto:

made by yours truly, shareable on X here and LinkedIn here

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— Jaan

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