FRANCE INTRODUCING A TAX ON VEHICLES WEIGHING MORE THAN 1,800 KG IN 2021
A few weeks ago, the French Citizen's Climate Convention proposed to introduce a weight penalty that would affect the heaviest vehicles. At the time, the criteria adopted were particularly strict, with a tax as soon as the car exceeded 1,400 kg (3,086 lbs). Each additional kilo (2.2 lbs) would then cost the buyer ?10.
This much too severe malus would naturally penalize a large part of the vehicles on the market. The French government immediately rejected this proposal to protect jobs and consumer buying power. The Minister for Ecological Transition, Barbara Pompili, has decided to reconsider this tax today.
The 2021 finance law could well welcome this tax with open arms. It will then apply to vehicles weighing more than 1,800 kg (3,968 lbs). This is aimed in particular at large SUVs, widely criticized by numerous ecological associations (and petrolheads). Obviously, the law provides for exceptions that will spare certain cars.
Electric and hydrogen vehicles, which are by nature very heavy because of their batteries, will be exempt from these taxes. The debate is ongoing about the fate of hybrid vehicles. We don't know the scale that will be adopted either, but it should still significantly affect prices, which will already be rising largely because of the new malus. "Heavier cars means more materials and energy consumed, more pollution, less public space available. This weight tax is important to take into account the environmental footprint of the heaviest vehicles", Barbara Pompili, French Minister for Ecological Transition.
LONG, SLOW RECOVERY
U.S. auto sales may take three years to recover to pre-coronavirus pandemic levels even as sales continue to rebound from an April low, the CEO of Japanese carmaker Subaru Corp said on Thursday. "The feeling of Subaru America is that a return to the 17 million vehicle level could take two to three years," Tomomi Nakamura said during a press roundtable in Tokyo. In 2019 vehicle sales in the United States, which accounts for around two thirds of Subaru's sales, rose to 17.3 million.
BATTERY FIRES PUT BMW AND FORD ON BACK FOOT AS EVS TAKE OFF
First, Hyundai Motor Co. made headlines about its electric cars catching fire. Five days later, it was General Motors Co. and Ford Motor Co. The next day, it was BMW AG. Vehicles going up in flames aren't new to the electric era. An estimated 171,500 took place annually in the U.S. alone over a recent three-year period, and cars powered by the combustion of gasoline are plenty prone to catching fire. But the issues affecting some of the world's largest automakers over the past week are both a reflection of plug-in models taking off in the market and a threat to more widespread adoption.
HERTZ GETS $1.65 BILLION BANKRUPTCY LOAN FOR PURCHASES, OPERATIONS
Hertz Global Holdings Inc. has arranged a new $1.65 billion debt package to help it reorganize while in bankruptcy, sending its shares soaring. Should the financing package win court approval, a group of the company's first-lien lenders will provide the money at an initial interest rate of 7.25 percentage points above the London interbank offered rate, the car rental giant said Friday. The group will also collect an undisclosed amount of fees. Lenders who signed a letter committing to fund the loan include Apollo Global Management, Diameter Capital Partners and Silver Point Capital, according to court documents. As much as $1 billion of the debt can be used for vehicle acquisition in the U.S. and Canada, while up to $800 million can be used for working capital and general corporate purposes, Hertz said in a statement.
The proposed loan is a sign that senior lenders are confident in Hertz's ability to reorganize and pay them back. The loan matures at the end of 2021 and has a limited number covenants that would cause a default, Hertz said in court papers. Under the deal, the company must file a Chapter 11 reorganization plan by Aug. 1, 2021.
Hertz filed bankruptcy in May when the near-total shutdown of global economy caused rentals to drop dramatically. Despite the Chapter 11 filing, which would normally wipe out shareholders, Hertz's stock price remained so high that the company tried unsuccessfully to sell shares to fund the case. Bloomberg earlier reported the car rental company was negotiating with creditors on a potential loan package to get it through the reorganization process. The new financing needs approval from Hertz's bankruptcy judge, and a hearing is set for Oct. 29.
HYUNDAI, KIA WARN OF $2.9 BILLION HIT TO EARNINGS OVER U.S. QUALITY WOES
Hyundai Motor and affiliate Kia Motors warned of another $2.9 billion of provisions related to engine issues, bringing their total hit from the years-long quality problem that has tarnished their credibility to nearly $5 billion. Hyundai Motor Group said on Monday their third-quarter earnings would reflect quality-related costs of a combined 3.36 trillion won ($2.94 billion), of which Hyundai accounted for 2.1 trillion and Kia for 1.26 trillion.
GM PLANS INVESTMENTS TO EXPAND ELECTRIC VEHICLE PRODUCTION
General Motors Co is expected to announce on Tuesday significant investments to expand production of electric vehicles at a factory in Spring Hill, Tennessee and potentially other sites. GM said in a statement Monday that it planned to make a "major U.S. manufacturing investment announcement" on Tuesday. The Detroit News reported that the automaker planned to begin building the Cadillac Lyriq electric SUV at its Spring Hill, Tenn. plant. AutoForecast Solutions, which tracks industry production plans, said it expects the Lyriq to go into production in late 2022.
WALL STREET SEES PROFIT RECOVERY FOR AUTOMAKERS, BUT WILL IT LAST?
Wall Street expects U.S. automakers to report strong results for the third quarter, as a recovery in sales after this year's initial coronavirus lockdowns tightens inventory for an industry watching cases in Europe and the United States rise. The pace of U.S. car and light truck sales has increased each month since shutdowns were lifted, and plants are working at close to full speed to rebuild inventories for high-profit sport utility vehicles and pickup trucks. Most analyst also see automakers firming up their cash flow positions and repaying debt. GM indicated in July it would generate enough cash to pay off a $16 billion loan by the end of the year. But only if the U.S. economy continued recovering and there were no further significant production shutdowns.
GMC HUMMER INTRODUCTION
The first version of a completely new, all-electric incarnation of Hummer, the 2022 GMC Hummer EV Edition 1, was introduced Tuesday night in Detroit.
It's the pre-runner in the return of a brand once maligned by environmentalists-this time, with a set of zero-tailpipe-emissions electric vehicles aimed at weekend adventurers.
GM boasts that the Hummer EV will offer four-wheel steering, an adaptive air suspension, an underbody armor system to protect the battery for off-roading. The technical highlights are even more important, including 350+ miles of range, a double-stack 24-module battery estimated at about 200 kilowatt-hours, and the capability to gain 100 miles of range in just 10 minutes of DC fast charging. With the reveal of the truck, GM released pricing and features for some of the lineup. The first Edition 1 comes in top-performance, three-motor form, making about 1,000 horsepower, and it's priced at $112,595, including destination.
The Edition 1 will also include GM's Super Cruise driver assistance system, a digital key system, 35-inch OD tires, a multi-function tailgate, and a power-glass roof system. There's also a feature called Extract Mode that raises the suspension an extra 6 inches to help escape challenging positions. The 35-inch tires, plus underbody armor, rock sliders, and underbody cameras are part of an Extreme Off-Road Package available elsewhere in the lineup, but the gotcha moment behind this Hummer is that you'll have to wait-potentially a couple of extra years. Below that, the Hummer EV 3X, not available until spring 2023, also comes in three-motor form and costs $99,995, while the two-motor EV 2x has an adaptive air suspension and four-wheel steering, facilitating Crab Mode.
The base version, which won't arrive until spring 2024, will be priced starting at $79,995.
With that timing, the most expensive version of the 2022 GMC Hummer EV models will arrive just after the Rivian R1T and R1S but before the Tesla Cybertruck-as well as a long list of other electric-truck models, including a fully electric Ford F-150. The Tesla is expected to cost much less, with a starting price of $39,995.
GMC says that the top-performance Edition 1 will be able to accelerate to 60 mph in approximately three seconds. Adaptive ride control will help provide the right amount of damping for everything ranging from on-road performance driving for those acceleration runs plus what's needed for delicate off-road traction.
The Hummer SUV and SUT will be among the first few vehicles to be built on GM's Ultium propulsion system and what it's also termed to be BEV3 underpinnings. The GMC Hummer EV models are built with a body-on-frame approach that, GM has emphasized, is different than the skateboard layout some other EV makers are using-and allows its trucks to share some of the same components with unibody cars and crossovers.
The Hummer EV models will be built at a revamped Detroit-Hamtramck assembly plant renamed Factory Zero and revamped entirely for the production of electric vehicles. The large-format cells co-developed between GM and LG Chem will be made at an Ohio plant.
Source: Green Car Reports
NEW JERSEY TO JOIN CALIFORNIA
New Jersey is joining California in calling for a future ban on the sale of gasoline-powered motor vehicles to combat global warming. The recommendation to stop the sale of gasoline-powered vehicles starting in 2035 was included in a new report from the New Jersey Department of Environmental Protection, which was asked by the state's legislature to find ways to fight global warming.
Source: The Detroit Bureau
TOP U.S. DEALER WARNS AUTOMAKERS ARE MISSING RESUPPLY DEADLINES
AutoNation Inc., the largest U.S. car retailer, is warning new-vehicle inventories remain thin as automakers miss resupply deadlines, which may mean fewer choices and higher prices for buyers. Chairman and Chief Executive Officer Mike Jackson told analysts on an earnings call Wednesday that he expects shortages will last at least through the end of the year. U.S. carmakers have struggled to ramp up production after a two-month long shutdown this spring to contain Covid-19. While consumer demand has rebounded thanks to low interest rates and a shift towards private transportation, automakers have been stretched thin by absenteeism, distancing protocols, quarantines and supply-chain constraints.
FIAT CHRYSLER EXPANDING ONLINE SHOPPING OPTIONS TO INCLUDE USED CARS
Fiat Chrysler Automobiles is expanding its online shopping system in the coming months to allow dealers to list their used cars and "certified pre-owned" vehicles on FCA's E-Shop. That expansion, which by December will also include test drive scheduling, online chats and refundable vehicle reservations in connection with a PayPal account, is part of the company's push to improve its online vehicle retailing, an area that has been growing in light of the COVID-19 pandemic. Early next year, Mopar accessory shopping will be added. FCA, in a news release, said online shopping traffic across its dealer network is up more than 65% since the launch of its online service now known as E-Shop earlier this year.
Source: Detroit Free Press
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