Auto companies are making big profits, but still stumbling when it comes to EVs
AYESHA RASCOE, HOST:
One auto CEO likes to tell investors that his goal is to be boring, as in making money quarter after quarter, boringly predictable. But right now, the auto industry, while it's making a heck of a lot of money, isn't boring, and it sure isn't predictable, especially as there's this giant shift to electric vehicles. NPR's Camila Domonoske is here to bring us up to speed. Welcome to the program.
CAMILA DOMONOSKE, BYLINE: Hi, Ayesha.
RASCOE: So when we say auto companies are making a heck of a lot of money, how much money are we talking about? How much green?
DOMONOSKE: A lot. So Stellantis, which makes Chrysler, Dodge, Jeep and Ram, among others - they just set a record with the profits they just announced. GM is going to make more money this year than they thought, a cool billion dollars extra. So, yeah, people are buying a lot of new cars, even though prices are high and taking out a loan is getting more expensive.
RASCOE: So how do electric vehicles play into all of this?
DOMONOSKE: Right. It's a small part of the market now, but it's growing fast. And you have Tesla, which just dropped its prices on EVs and is still profitable. That is pushing down electric vehicle prices across the board, which is good news if you're shopping for an electric vehicle. It's a challenge for these companies that are racing to try to catch up with Tesla. What are companies doing? You've got Ford, which is tapping the brakes. They are still losing money on EVs. They lost a billion dollars on them last quarter, that same big number. They want to stay in the race for the long term, so they just actually cut the price of the Ford Lightning even though they're losing money. But they are pushing back their plans to really make a big push into EVs. Then you have Stellantis, which is slamming the accelerator. They are about to launch what they called an EV offensive in the United States, and in Europe, where electric vehicles are already a lot more popular, CEO Carlos Tavares said this.
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CARLOS TAVARES: Every electrified vehicle that we sell is highly profitable.
DOMONOSKE: So he's obviously trying to persuade investors that this big offensive is going to pay off. And then you've got GM, which just whipped a U-turn. GM, which is going electric - they killed the Chevy Bolt, which is one of the cheapest EVs on the market, because while it was popular, it was not a profit machine. But now just a few months later, they're bringing it back. So that was a big surprise.
RASCOE: So what do you make of all of this?
DOMONOSKE: It's chaotic, right? The industry is making a big change. They are doing this transition to electric vehicles. Even Ford said while they're slowing down that, like, we know EVs are coming. That's not a question. Right? When are they coming? How do we get there? Those are really big questions. And there's known challenges - right? - battery minerals, having enough chargers. How do we recycle batteries? But there's going to be surprises, too. So GM - this week, they said they're having trouble getting their battery production lines up to speed because some assembly line robots aren't as fast as they were supposed to be. So, you know, there you go - a surprise. That wasn't on my bingo card.
RASCOE: Yeah. Well, speaking of production, how does all of this affect workers?
DOMONOSKE: It's a huge upheaval for the industry. Electric vehicles are simpler to build, so that's fewer assembly jobs at car plants. There's more jobs, then, at battery plants that are being built, which raises questions like will those be unionized, right? Talks between the United Auto Workers union and the Detroit Big Three automakers - they're happening right now. Electrification is a huge topic at the table. So are these monster profits, right? The UAW sees this as an opportunity. You know, you're making so much money. You can afford to give us cost of living wage increases - right? - among other things. The companies, on the other hand - they would rather give out bonuses instead of wage increases, so they only pay out more when business is good, and they're not on the hook on a bad year, for instance. These talks - they're intense. A strike is definitely on the table. Like I said, these are not boring times.
RASCOE: Not at all. NPR's Camila Domonoske, thank you so much for coming on.
DOMONOSKE: Thanks for having me. Transcript provided by NPR, Copyright NPR.