BYD’s bumpy road

Greetings from London!

Tesla continues to have a bad year in Europe.

A combination of an ageing lineup, tough competition from the Chinese and legacy rivals alike, and Musk's controversial favouring of far-right parties has seen the EV giant's sales down over 33% through July this year.

Worse yet, Tesla was outsold by BYD in Europe in July, which would have seemed impossible just a year ago.

August sales do not look great for Tesla either, though in some markets they showed a little improvement. As well as in Tesla stalwart Norway, sales were up in Spain, Portugal and down only marginally in Italy, which suggests Tesla's bleeding in Europe appears to be slowing.

Which brings us to today's Auto File…

Speaking of bad years, while BYD has been doing great in Europe with sales up 290% year-to-date versus the same period last year, things are not going so well at home.

The automaker reported its first drop in quarterly profit in more than three years as an ongoing price war in China, where BYD generates almost 80% of its sales, started to bite. The news hit BYD's shares.

BYD subsequently reported its second consecutive drop in monthly car production, which has not happened since the height of the coronavirus pandemic in 2020.

The company has had a remarkable run, going from sales of a little over 400,000 vehicles in 2019 to 4.2 million last year. Its sales at home fell for a third straight month in July.

BYD could well escape its current doldrums soon, but it does feel like the automaker is entering a new phase where further growth becomes harder.

More of this after 2035? - REUTERS/Fabrizio Bensch.

The auto industry has not been happy about the European Union's effective 2035 ban on fossil-fuel cars and has made no secret of the fact as the issue comes up for review before the end of the year.

Ahead of a Sept 12 meeting with European Commission President Ursula von der Leyen to discuss the future of the auto sector, manufacturers and suppliers sent her a letter saying that near-total dependency on Asian batteries, wobbly charging infrastructure, higher manufacturing costs and U.S. tariffs meant the 2035 ban was "simply no longer feasible."

It's hard at this stage to know whether the Commission will stick to its guns on the ban. It has in the past, but in March, the Commission agreed to give automakers extra time to meet CO2 emission reduction targets initially set for 2025.

What is certain is the auto industry is going to hammer this issue hard, as automakers and suppliers alike are reliant today on profits from combustion engine models. 

With the potential job losses from engine factories and at suppliers, they have a fair bit of leverage.

How many CEO jobs does OIiver Blume need? - REUTERS/Liesa Johannssen. 

The insistence of Volkswagen CEO Oliver Blume that he should also retain his post as chief of Porsche has been one of the strangest governance arrangements in the global auto industry today.

It has also been unpopular with shareholders.

But as Reuters colleagues Christina Amann and Rachel More report, a source close to the matter says Porsche has begun the search for a new CEO that would have Blume holding just one top job.

You can read about it here.

Investors have been concerned about Blume's ability to shepherd the world's No. 2 automaker through a sales slump in China, U.S. tariffs and a lacklustre performance at home in Europe, all while trying to do the same for its premium unit at Porsche.

The news was originally broken by WirtschaftsWoche, which cited company and financial sources as saying that talks on Blume's succession were ongoing and a new CEO for Porsche should be announced in the autumn.

Renault's new CEO Francois Provost made his first big move since his appointment to head the French automaker in July, appointing former Mercedes-Benz vice president Katrin Adt to head up its budget Dacia brand.

Longtime Renault executive Denis Le Vot, who ran Dacia and was a contender for the CEO job when Luca de Meo abruptly announced his departure earlier this summer, is unsurprisingly leaving the company.

Provost said this and other management changes would help Renault move faster to adapt to current challenges.

The company faces growing competition and weak demand and being the smallest of the major legacy mainstream manufacturers means Renault does need to move at speed if it hopes to thrive in a difficult era for traditional automakers.

Volkswagen has extended its 'factory cloud' partnership with Amazon Web Services by another five years as the German carmaker rolls out the use of artificial intelligence to improve production and reduce costs.

Stellantis has signed a deal with unions to extend a reduced working hours scheme for workers at its historic, yet struggling, Mirafiori plant in northern Italy for another five months.

Volkswagen's Audi unit could target long-term annual sales of at least 2 million cars, up a fifth from 2024, under a new strategy the premium brand should release later this year, a person close to the matter said.

Ford's South African unit will lay off more than 470 employees as it seeks to adjust production capacity to match current and future market demands, the South African Solidarity union said.

Chinese battery maker Contemporary Amperex Technology (CATL)  is selling its 20.6% stake in Finnish subcontract car maker Valmet Automotive to the Finnish state and another shareholder amid low electric car sales in Europe.

China's market regulator has unconditionally approved a new joint venture between Nissan and Dongfeng that will be 60% controlled by Nissan China and will focus on vehicle and auto part exports.

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