It’s been a strange and unpredictable year for electric vehicle sales in America, and frankly for new car sales in general. However, if you want to evaluate the European market, change the adjectives above to “apocalyptic”. Intense competition from China, a weak economy, slowing EV demand due to evaporation of subsidies and high interest rates have put the European automotive industry in a gloomy situation. We now know the extent of the cuts Volkswagen management wants to make, and they are unprecedented.

This kicks off the Monday issue Critical MaterialsMorning summary of must-read news in the field of technology and mobility. And if you’re just joining us, then yes, inside EVs It looks different today. (And yes, it looks better, I agree.) announcement writing If you haven’t already, let’s check out some news.

30%: Volkswagen Prepares for Potentially Major Job Cuts and Factory Closures

Volkswagen has never closed an auto plant since its rebirth at the end of World War II, except for an ill-fated experiment in Westmoreland, Pennsylvania, in 1988. Now it may soon seek to close three car factories in Germany alone due to high labor costs. Slow sales and tough regulations driving EV adoption are starting to have negative impacts.

Reuters Today it was reported that the head of the automaker’s works council had warned VW’s workforce that a “deeper overhaul than expected” was coming at the troubled automaker as it tries to cut costs. Tens of thousands of people may be laid off, up to three factories may be closed, and job security program The practice, which has been in place since the 1990s, will end.

It’s unclear which plants will be affected, but whichever way you want to look at them, the moves are serious:

Europe’s biggest automaker has been negotiating with unions for weeks over plans to revamp its business and cut costs, including considering closing factories on its home soil in a first blow to Germany’s industrial prowess.

“Management is absolutely serious about all this. This is not a harsh twang in the collective bargaining round,” Daniela Cavallo, head of Volkswagen’s works council, told workers at the automaker’s largest factory in Wolfsburg, threatening to cut off talks.

“This is a plan by Germany’s largest industrial group to start sales in its home country of Germany,” Cavallo added, but did not specify which plants would be affected or how many of the Volkswagen Group’s approximately 300,000 employees in Germany might be laid off.

Volkswagen said in a statement that it would make recommendations on how to reduce labor costs on Wednesday, when workers and management meet for a second round of wage talks and the automaker reports third-quarter results.

“The situation is serious and the responsibility of the negotiating partners is huge… Without comprehensive measures to regain competitiveness, we will not be able to afford the necessary investments in the future,” said Gunnar Kilian, member of the board of directors of the Volkswagen Group.

So why is all this happening? Demand for cars in Europe is generally weak as the continent faces an even tougher post-COVID economic recovery than in the US. Chinese automakers are eating into VW’s market share on its home turf, and buyers in China are increasingly turning to domestic brands. Subsidies to encourage EV purchases have largely disappeared in Germany, and so high costs are discouraging buyers from going this route. VW’s EV sales are down nearly 10% globally; 40% of these were in the United States. and total global auto deliveries fell 7% in the third quarter.

Other than that everything seems fine.

Reuters It also reported that Germany’s most powerful union, IG Metall, had identified several possible candidates for the closure of factories. These include the Brunswick facility, which produces a variety of components and EV batteries; Emden factory producing Passat and ID.4; Hannover factory producing vans and minivans; and a few others. Approximately 300,000 people work for VW in Germany alone. However, Thomas Schaeffer, CEO of the VW brand, stated that it was part of the problem and said: “We are not making enough money from our cars at the moment. At the same time, our energy, material and personnel costs continue to increase. This calculation is useless under these conditions.” In the long run, we need to get to the root of the problem. needed: We are not productive enough at our sites in Germany and our factory costs are currently 25-50% higher than planned. This means we have twice as many factories in Germany. It’s as expensive as the competition.”

As these stories indicate, these potential shutdowns have profound impacts on the European economy, next year’s elections in Germany, and the global electric vehicle transition as a whole. But it’s becoming increasingly clear that if VW doesn’t change the way it operates, it may not see the other side of this transition.

60%: GM Pulls Back As Canada Considers Ending EV Subsidies

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Photo: InsideEVs

2024 Chevrolet Equinox EV 3RS

There is an ongoing question about how long governments should provide incentives for purchasing electric cars. If you do these things for too long, the argument goes, you oversubsidize a private market. Pull subsidies too soon and you’ll kill EV sales just as they’re about to explode, making it harder for automakers to meet aggressive emissions and fuel economy targets in the future. Germany and other countries in Europe have withdrawn their subsidies in recent months, and the impact on EV sales is clearly visible.

Naturally, General Motors is not happy that governments in Canada, where many provinces have been very successful in adopting electric vehicles, are also considering withdrawing subsidies. Canada has deficits to deal with, so these incentives may be on the table. Bloomberg reports:

Currently, some consumers can get as much as C$12,000 ($8,673) off the price of an electric car. Federal deductions cut up to C$5,000, while the province of Quebec cuts up to C$7,000 and British Columbia offers a maximum of C$4,000.

But facing huge budget deficits, government officials are now reining in the use of taxpayer cash. In March, Quebec announced it would phase out subsidies by 2027. In June, British Columbia significantly narrowed the availability of the rebate, citing “available funding” and faster-than-expected growth in electric vehicle sales.

Meanwhile, the Canadian government has set an aggressive goal of phasing out gasoline-powered vehicles.

All new light-duty vehicles sold by 2035 are required to be electric or plug-in hybrid. There are intermediate targets of 20% by 2026 and 60% by 2030. According to Canada’s proposed system, automakers receive compliance credits for EV sales and infrastructure investments, but they run a deficit because they are inadequate. Some provinces have their own targets; BC is threatening manufacturers with financial penalties for shortages.

“The timing doesn’t line up well with the purchase incentive support coming out as the mandates and regulations start to take effect,” GM Canada President Kristian Aquilina said in an interview with Bloomberg News in Vancouver. “It will have to have an impact. So we can’t ignore it.”

As noted in this story, Ontario canceled the consumer rebate in 2018. But other provinces like Quebec and British Columbia have aggressive programs to move people to electric, and now GM’s EV sales in Canada were up a very impressive 12.5% ​​in the third quarter. But if Canada’s Conservative Party wins the next election, those subsidies could be particularly disrupted.

90%: Waymo Raises Cash

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Photo: Waymo

Finally, some good news for fans of robotaxi services: You may soon see more of the leading services in your city. Google’s Waymo division just raised another $5.6 billion, CNBC reportsReserved for expansion efforts:

Waymo co-CEOs Tekedra Mawakana and Dmitri Dolgov said in a statement to CNBC that the funding will go towards expanding and improving the Waymo Driver for business applications.

“With this latest investment, we will continue to welcome more riders to our Waymo One ride-hailing service in San Francisco, Phoenix, and Los Angeles, and in Austin and Atlanta, through our expanded partnership with Uber,” they wrote.

The series C financing brings Waymo’s total capital raised to more than $11 billion, after raising $3.2 billion and $2.5 billion in two previous rounds. Alphabet CFO Ruth Porat announced in July that the parent company would commit to a multi-year investment of up to $5 billion in Waymo.

100%: How Will Volkswagen Overcome This Crisis?

Volkswagen ID. Excitement on the Greek Island Astypalea

What’s your prescription for VW’s troubles in China and what do they mean for the rest of the industry?

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