New Hybrid Scorecard Slams Carmakers For Loading On Luxury

Restrictions on Chinese exports of rare earth minerals and magnets used in a variety of automotive parts are threatening to create the industry’s next major crisis. Automakers and suppliers around the globe are scrambling to mitigate the restrictions, which could lead to shortages of key components found in everything from electric vehicle motors to alternators to power windows. China produces a vast majority of rare earths but curbed their flow out of the country amid an ongoing trade war with the U.S. Already, some automakers and suppliers have had to idle assembly lines because of a lack of parts. Trade groups and industry executives are sounding the alarm about the potential for more imminent shutdowns to create bottlenecks even worse than what the industry grappled with during the microchip shortage. “You’re going to find things at least partially comprised of rare earth metals in not just vehicles, but almost all consumer products,” Sam Abuelsamid, vice president of market research at Telemetry, told Automotive News. “So many components rely on them — solenoids for your engine, solenoids for your power steering. If we can’t get rare earth metals, then we’re in big, big trouble.”

Source: Automotive News

Hyundai Motor has a rare earths stockpile that can last about a year, and it does not expect any near-term impact from global supply chain disruptions caused by China's export curbs, said a person who attended a company investor call. China's decision in April to restrict exports of a wide range of rare earths and related magnets has tripped up the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world. The stockpiling by Hyundai, the world's No.3 automaker along with its affiliate Kia Corp indicates it is better-placed than many competitors to withstand restrictions that have already impacted production or the supplier network of companies including Ford and BMW.

Source: Reuters

China’s restriction on exports of rare earths and magnets threatens to shut down vehicle and parts assembly in the coming weeks, industry executives and analysts said. The materials are crucial for a wide range of automotive components — from motors and sensors used in electric vehicles to automatic transmissions and speakers. The auto industry, like other sectors, is heavily reliant on China for the rare earths and magnets used in those parts, and companies have said securing the materials has become exceptionally difficult since China restricted exports in April in response to U.S. tariffs. The auto industry, already grappling with other tariff impacts, is now on the brink of its third major supply chain shock this decade, following the pandemic and the microchip shortage.

Source: Automotive News

The automotive market is facing a troubling decline in new vehicle purchases among the highly sought-after 18 to 34 age demographic. Considered a vital growth segment for original equipment manufacturers, this group is now facing unprecedented market conditions that impact their status as key players for new vehicles. Affordability remains a major concern for young adults, as new vehicle prices climb, and monthly payments have increased by 30% in the past four years. The share of new vehicle registrations by adults aged 18-34 has fallen from 12% in Q1 2021 to below 10% in the past two quarters—a troubling trend.

Source: CBT News/S&P Global

Tariff Impacts Begin as Vehicle Shipping Volume Drops by More Than 70%

The volume of cars getting shipped to the U.S. via sea routes has plunged as a result of President Donald Trump’s tariffs on imported vehicles. Maritime import volume for motor vehicles dropped by 72.3 percent in May compared with the same month a year earlier, according to Descartes Datamyne, a trade database. Importers shipped about 9,380 fewer 20-foot equivalent units of vehicles to the U.S. last month. One 20-foot equivalent unit is about one vehicle depending on its size, according to Descartes. The precipitous drop indicates that vehicle tariffs are having a concrete impact on automaker decisions. The 25 percent auto tariffs that took effect in April may have prompted companies shipping completed automobiles overseas to hold off, betting that Trump will eventually pull back the most punishing duties.

Source: Automotive News

 

Edmunds Data Reveals Tariff Fears Shift Car Buyer Behavior

Tariff speculation is influencing the behavior of American car shoppers as the renewed push for tariffs under the Trump administration creates uncertainty for both shoppers and dealers. A recent survey and market data by Edmunds reveal that consumers are either accelerating or delaying their vehicle purchases even before widespread price hikes take effect. So far, the impact of tariffs hasn’t been as significant as expected. Despite concerns, the average transaction price (ATP) of new vehicles remained stable and aligned with seasonal norms. In April, ATP reached $48,422, representing a 2.7% uptick from March and a 2.2% year-over-year increase. Chief Economist for the National Automobile Dealers Association (NADA), Patrick Manzi, believes that the actual impact of the auto tariffs won’t be fully felt until 2026.

Source: CBT News

It's long been known that hybrid buyers often choose them over luxury cars, and aren't buying them solely for the payback in gasoline savings. But a new Hybrid Scorecard, launched by the Union of Concerned Scientists, slams carmakers for inflating their prices by loading luxury into fuel-efficient hybrids, putting them out of reach to less affluent buyers. The Hybrid Scorecard is a guide to all 31 currently available hybrid vehicles from five carmakers: Toyota, Ford, General Motors, Honda, and Nissan. It includes ratings on different criteria and an explanation of UCS's methodology in calculating its scores.

 

“Hybrids don’t have to be luxury vehicles,” said UCS analyst Don Anair, who supervises the guide. “They should be within the reach of all Americans." Car buyers shouldn’t be forced," he continued, "to buy high-end bells and whistles when fuel economy and reducing emissions are their top priority.” Such "unnecessary luxury features" include, according to UCS, not only DVD players and keyless entry systems but even leather interiors.

The top-scoring hybrid this year is the 2010 Toyota Prius, followed by a three-way tie among the 2010 Honda Civic Hybrid, the 2010 Ford Fusion Hybrid, and its twin the 2010 Mercury Milan Hybrid. One reason the 2010 Prius outscored the second-place finishers is that it has fewer "forced features" (roughly $1,600 worth) than the Civic Hybrid and Fusion/Milan twins, which UCS says include $3,000 and $4,000 of unnecessary embellishments respectively.

Not surprisingly, the 2010 Lexus LS 600h L full-size luxury sedan hybrid is the "worst offender," with $17,000 of "forced features" over the base non-hybrid LS 460L model.

Automakers might argue that buyers' willingness to pay higher margins for added features offsets the cost of $3,000-plus for the hybrid hardware, improving the affordability of the overall package. In the end, buyers will decide for themselves. In our view, the more information, the better.

Source: Green Car Reports

Ford Canada CEO Bev Goodman has publicly called for the repeal of a federal policy that requires 100 percent of new passenger vehicle sales to be zero-emission by 2035. The mandate also includes an interim benchmark of 60 percent EV models by 2030, a pace Goodman describes as unrealistic given conditions. Ford, like several other legacy automakers, has previously supported electrification efforts through products like the Mustang Mach-E and F-150 Lightning, as well as investments in battery and electric vehicle production. However, according to Goodman, Canada’s mandated electric vehicle targets do not reflect consumer demand or infrastructure readiness. “The targets on full battery-electric vehicles need to be aligned with what customers want, and customers have spoken,” Goodman said at the recent Canada Automotive Summit, per Automotive News. According to the company CEO, Ford Canada’s electric vehicle sales fell “like a stone” following the end of a $5,000 federal incentive program earlier this year. Automotive News reports that nationwide zero-emission vehicle sales fell to 20,878 units in February and March, a 44-percent decline year-over-year.

As GM Authority covered previously, General Motors electric vehicle sales have also nosedived in Canada as a result of the end of the incentive program. “Ultimately, it will have a negative impact, if these mandates stuck, on the industry,” Goodman said. “It will have downward pressure on vehicle sales, it will have upward pressure on pricing, and those are real concerns for consumers and the industry as a whole.”

Meanwhile, in the U.S. market, GM has announced that Chevy has officially overtaken Ford in electric vehicle sales, with Chevrolet posting over 37,000 electric vehicles sold in the U.S. market for the 2025 calendar year through May, as compared to Ford’s 34,000 units during the same time period. GM has also claimed the number-two spot among all electric vehicle manufacturers nationwide, with more than 62,000 electric vehicles sold year-to-date. Tesla remains the number-one electric vehicle manufacturer in the U.S. market.

Source: GM Authority