If you’ve ever wondered why Europe seems to get all of those cool car add-ons like adaptive beam headlights, you can blame something called the Federal Motor Vehicle Safety Standards, or FMVSS. That bit of federal alphabet soup is what sets the safety standards of all cars on American roads, and, as one industry trade group is arguing, is “stifling innovation” for U.S. automakers.
Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. In today’s edition, the feds are under fire for making automakers fall behind thanks to strict federal laws. Also, Telsa’s European sales slump continues and battery giant CATL looks to escape the EV knife-fight in China. Let’s jump in.
30%: U.S. Offers No ‘Roadmap’ For Emerging Technologies, Automakers Say
Photo by: Volvo
Automakers and regulators are no strangers to a bit of mutual cage rattling, especially when safety is involved. But automakers are getting a bit antsy with what they are and are not allowed to do. Think adaptive headlights, but on a broader scale.
The Alliance for Automotive Innovation—an industry lobbying group that represents just about every major automaker that does business in the U.S. except for Tesla—has decided to get a bit more pushy on this topic. Recently its CEO, John Bozzella, testified that the National Highway Traffic Safety Administration (NHTSA) has become a roadblock to automotive innovation and is not only “stifling innovation” but is also “threatening U.S. global leadership” of the auto trade.
Reuters (via Automotive News) covers his testimony:
A major trade group representing General Motors, Toyota Motor Corp., Volkswagen Group, Hyundai Motor Co. and other automakers sharply criticized the National Highway Traffic Safety Administration, saying the auto safety regulator is impeding progress and struggling to modernize.
“Its fractured relationship with the industry, decades-old safety regulations, and lack of a clear strategic roadmap for emerging technologies are stifling innovation and threatening U.S. global leadership,” said Alliance for Automotive Innovation CEO John Bozzella in testimony for a U.S. House of Representatives hearing Thursday.
But what Bozzella is getting at is that the feds can’t expect the U.S. auto industry to thrive if it constantly holds automakers back from being able to do new things, especially if its rules were written at a time when cup holders were the hottest new optional equipment.
Bozzella will reportedly call on NHTSA to conduct significant housekeeping within its own walls. The Alliance plans to list out “dozens” of regulatory standards that need to be either repealed or revised to keep up with the times. To his credit, some of the Federal Motor Vehicle Safety Standards do feel pretty antiquated (and they certainly aren’t meant to handle cars equipped with LIDAR or fart mode).
It’s not clear what exact measures that Bozzella or the Alliance has on its radar; however, it’s probably not off base to assume that it’s revisions are going to align with its previously-published suggestions for the FMVSS, which include reassessing CAFE standards, modernizing requirements for Automated Driving Systems, updating lighting code and much, much more.
It’s worth noting that the auto industry’s chief lobbying group can be very selective in its outrage over “innovation.” It may complain here about outdated safety regulations, but will also balk at other new safety features it deems too expensive, like mandating automatic emergency braking. And don’t even get this group started on the shift to EVs.
From the outside perspective, it really makes you want to scream to the sky for the Alliance to pick a lane—either embrace progress or reject it. Doing so in the name of profits every time sends a mixed message.
60%: Tesla Hits A Five-Month Sales Slump In Europe
Photo by: InsideEVs
Tesla has lost its spark in Europe. No, not in the fun instant-torque way that battery-powered cars do when they trade spark plugs and gas for an electric motor, but in a more sales-y kind of way.
According to the latest industry data reported by Reuters, Tesla’s new car sales dropped 27.9% in May broadly across Europe. BEVs in general jumped by 27.2% during the same time. That’s another way to say that Europeans are buying EVs, just not Teslas.
Reuters explains:
Tesla’s (TSLA.O), opens new tab new car sales in Europe fell 27.9% in May from a year earlier even as fully-electric vehicle sales in the region jumped 27.2%, with the U.S. EV maker’s revised Model Y yet to show signs of reviving the brand’s fortunes.
Overall car sales in Europe rose 1.9%, with the strongest growth coming from plug-in hybrids and cars powered by alternative fuels, data from the European Automobile Manufacturers Association (ACEA) showed.
Tesla CEO Elon Musk’s political meddling, as distant as it may be now, is still a very real issue for the company. Folks have sworn off the brand for life as long as the CEO is at the helm, which is exactly where he pledged to be for at least the next five years.
Chinese cars are also a huge hit in Europe, despite tariffs. Registrations for SAIC Motors-branded cars, for example, shot up 22.5% in May. That’s just the start, though, as more and more Chinese brands look to Europe as a potential sales outlet with pretty compelling options. And even more concerning to Tesla is that these brands are launching models at such a rapid pace that stagnant brands will have a significantly more difficult time playing catch-up.
Earlier this year, Musk claimed that Tesla’s sales were already rebounding; however, real-world numbers tell a potentially conflicting story. Its sales across the lineup are dwindling—the Cybertruck didn’t hit sales volumes in the millions as predicted, and the latest refreshes to its low-volume, high-margin luxury cars (the Model S and X) might as well have just been an email.
Couple that with otherwise lackluster sales of the facelifted Model 3 and Model Y, and you’ve got some raised eyebrows on the health of Tesla’s core automobile business.
But hey, there’s still Tesla’s more affordable EV set to debut in June… so, in the next four days? We’ll see.
90%: CATL Is Prioritizing Global Expansion As EV Price War Heats Up
Photo by: CATL
China’s EV market is eating itself. Every one of its 100-some EV brands are in a crazy knife-fight with one another to compete for sales, and every cut seems to be one that shaves more and more digits off the price tag.
Margins are vaporizing and even EV giants like BYD are calling the whole ordeal unsustainable. So while all of those automakers are circling one another and looking for an opening, the world’s biggest battery maker, CATL, has already found a way to pull itself out.
If there’s one thing CATL knows how to do well, it’s build a battery. I mean, there’s a reason its founder slammed Elon Musk on the topic, after all. That’s why CATL is going to take the skill that it has and quickly work on expanding globally (read: outside of the Chinese market) in order to escape the borderline apocalyptic price war at home.
Here’s what Bloomberg knows:
[CATL] is making overseas expansion its “No. 1 priority” as intense competition in China’s domestic car market threatens the industry’s health, according to Chief Manufacturing Officer Ni Jun.
Everyone in the sector and the government knows irrational competition “is unhealthy and will destroy the industry,” Ni said in an interview with Bloomberg on Wednesday during the World Economic Forum in Tianjin.
His comments echo those from BYD Co. Executive Vice President Stella Li, who said in an interview earlier this month that the EV price war it helped spark was “very extreme and tough.” Li also emphasized that it would be “unsustainable.” BYD, which makes cars as well as batteries, is a competitor to CATL.
CATL has already been working on expanding outside of China over the last few years. However, global trade constraints—like locking the EV tax credit away from automakers that use critical materials sourced from certain countries—stymied the effort. This made expansion a lot harder than it could have been and forced CATL to instead partner with domestic automakers in the U.S. to license out its trade secrets.
Ni says that CATL’s experience building outside of China has also been an eye-opener. The company’s new factory in Germany, for example, caused the battery-maker to realize that land is expensive, labor is significantly different, and operational inefficiencies are aplenty. It made Ni realize that CATL can’t operate the same way that it does in China if it’s going to go global—and that’s the best (and possibly most expensive) lesson to learn early on.
100%: Are Outdated Regulations Holding Back Cars In The U.S.?
You know, agreeing with the Alliance for Automotive Innovation can be difficult sometimes, especially when the same company ran an ad that perpetuated right-to-repair as potentially contributing to assault. But they might be onto something regarding regulations in the U.S.
For example, laws requiring physical side mirrors mean that cars in the States can’t take advantage of cool digital side mirrors that cut down on drag, widen visibility and cut down on blind spots. Or there’s the argument that adaptive headlights took way too long to implement.
So what do you think—is there merit in the Alliance’s argument, or are there other concerns hidden in the agenda? Let me know your thoughts in the comments.
