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Joseph White
Global Automotive Correspondent

Greetings from the Motor City!

No time for the slow lane today. The Automotive News Congress kicks off in Detroit this afternoon. Ford CEO Jim Farley takes the stage at 4:45 PM, preceded by Stellantis North America COO Mark Stewart at 12:35 PM and Aurora CEO Chris Urmson. Look here for coverage from Reuters.

Today, we’ll look at the confusing signals from Tesla in China, dig into why it may be good news that America’s EVs are so big, and join the Chicago Fed in looking at where new EV jobs are going in North America.
Tesla's Shanghai Assembly plant.
Static from Tesla China
Tesla reported record deliveries from its Shanghai factory in November. Then sources told Bloomberg and Reuters that the electric vehicle maker planned a 20% cut in Model Y production at Shanghai for this month compared to November. Then Tesla China denied plans to cut December output in Shanghai.

The mixed signals come at a choppy time for the Chinese EV market.

Inventory levels for Tesla’s vehicles in China are up sharply. Tesla has cut prices and offered incentives to juice demand, as have some rivals. Chinese EV brands, notably BYD, are increasingly competitive. At the same time, China’s COVID restrictions and the unrest around them have disrupted production across the Chinese supply chain.

At the beginning of Q4, Tesla had plans for a big boost in global production of its Model Y and Model 3 as factories in Austin and Berlin ramped up. Will those goals be met? Investors are wondering. Tesla shares were headed to a lower open this morning.
Yep. That's an EV.
America’s EVs: Bigger, faster….still better for the climate?
You’ll be shocked, shocked to learn that American consumers are favoring larger, heavier and faster electric vehicles, tilting the EV market toward the SUV and truck body styles that dominate the combustion vehicle market.

That’s according to a new, comprehensive assessment of the U.S. electric vehicle market from researchers at the U.S. Energy Department’s Argonne National Lab. You can download the entire report here.

The average battery electric vehicle, or BEV, sold in 2011 weighed 3,600 pounds, according to the DOE analysis. In 2021, the average BEV weighed 4,600 pounds. That curve does not include high volume sales of bruiser EVs like the GMC Hummer EV, the Ford F-150 Lightning or future SUVs such as the Cadillac Lyriq.

Battery capacity for BEVs is on track to average more than 80 kilowatt-hours for 2022, DOE researcher David Gohlke, one of the study’s authors, said. That’s more than three times the average battery capacity in 2011. The average BEV in 2021 could accelerate from 0-60 miles per hour in under 6 seconds.

Faster, heavier EVs tend to consume more electricity per mile, and heavier batteries come with a heavier CO2 load from their production.

On the other hand, Gohlke said, people who buy a large, electric SUV or truck are likely not buying a large, heavy combustion SUV or truck. If you assume that an EV is replacing a large combustion vehicle in the bottom 25% of fuel economy rankings, greenhouse gas reductions could be 18% greater than for an EV that’s bought instead of a sedan, the DOE study finds.

“We make an assumption that vehicles are switching like for like,” Gohlke told Reuters.

One other, hopeful note: EVs with more power and range will need bigger battery packs, but Gohlke and his colleagues estimate there could be 998 gigawatt-hours/year worth of EV battery production capacity in North America by 2030 - enough to satisfy projected North American demand.
Tesla Austin - Keeping EV jobs in Auto Alley.
Where the EV jobs are in North America
Electric vehicle and battery manufacturing jobs are being created in roughly the same “Auto Alley” in North America where most auto manufacturing jobs are today, according to new research from the Chicago Fed.

Chicago Fed researcher Thomas Klier and James Rubenstein of Miami University in Ohio have for years been mapping the migration of auto industry jobs from the upper Midwest to the Southern United States and Mexico.

The shift from combustion engines to battery-electric powertrains will be disruptive, especially to combustion engine and transmission plants. Automakers pulling more EV manufacturing in-house (emulating Tesla) could leave some suppliers out in the cold.

But EV and battery manufacturers are building most of their new factories near existing auto manufacturing centers in North America’s Auto Alley - which stretches from Ontario through Michigan and Ohio, south into Tennessee, Georgia, Alabama and Mississippi, bending west to Texas and Northern Mexico.

Case in point: General Motors said it will invest another $275 million to expand battery production at a factory in Spring Hill, Tenn. - home to a GM combustion vehicle assembly factory which is converting to EV assembly.

Aurora and Uber expand their AV truck tests
AV truck technology company Aurora disclosed it has expanded a test with Uber to use semis running autonomously on Aurora’s Driver. Aurora trucks are now hauling holiday packages between El Paso and Fort Worth, Texas. No word as to whether Aurora intends to adapt its technology to reindeer-powered sleighs.

Europe stays angry over U.S. EV subsidies
European Union officials said it loud ahead of meetings today with Biden Administration counterparts: They are NOT HAPPY with Washington’s promises to review and “tweak” the pro-American EV subsidy schemes embodied in the Inflation Reduction Act.

The good news for automakers and suppliers is that European policymakers are talking about creating EV sales and manufacturing subsidies of their own to counter the “Buy American” thrust of the IRA.
DHL orders up 2,000 Ford electric vans
DHL, the delivery arm of Deutsche Post, has agreed to buy 2,000 electric Ford vans and software services that go with them. For Ford, the software is as important as the hardware.

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