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A multinational automaker prepared to lay off more than 2,000 American workers in August after benefiting handsomely from the Biden administration's subsidies for electric-vehicle production:
Stellantis, the parent company to famous brands like Ram and Jeep, has been awarded hundreds of millions in grants from the federal government to promote its EV manufacturing. But the Biden administration's largesse has not prevented the company from laying off American workers.
In July, the Department of Energy awarded Stellantis subsidiary Chrysler a $334.8 million grant to convert a shuttered Illinois plant into a facility for building EVs and another $250 million grant to make a ...(aaaand, paywall)
The AP ran a story a few weeks ago foreshadowing this action:
The statement comes as the company faces increased capital spending to make the transition from gasoline vehicles to electric autos. It also has reported declining U.S. sales in the first quarter, and it has higher costs due to a new contract agreement reached last year with the United Auto Workers union. Stellantis has about 43,000 factory workers.
[...] Stellantis CEO Carlos Tavares has said his company has to work on cutting costs globally in order to keep electric vehicles affordable for the middle class. Electric vehicles, he has said, cost about 40% more than those powered by gasoline. Without cost reductions, EVs will be too expensive for the middle class, shrinking the market and driving costs up more, Tavares has said.
I've been working on cars for most of my life and my observation is Chrysler/Ram are the worst vehicles on the road. I also own two Jeeps that are 50+ years old, however Chrysler has ruined the Jeep name by what I assume is cutting corners to save money because they're poorly designed and flimsy. Interesting the powers that be at Stellantis don't seem to be concerned about these issues.
Previously: Chrysler to Go All-Electric by 2028, Starting with the Airflow in 2025
Related:
• General Motors Lays Off Hundreds Of US Workers
• Tesla Lays Off 'More Than 10%' of its Global Workforce
(Score: 1, Interesting) by Anonymous Coward on Wednesday September 11, @03:59AM
Before funding is issued, DOE and the applicants will undergo a negotiation process, and DOE may cancel negotiations and rescind the selection for any reason during that time.
If they haven't cashed the check, put a stop on it!
This "Investing in America Agenda" is just another big ripoff, mo' money for cronies!
(Score: 1, Troll) by Mojibake Tengu on Wednesday September 11, @05:13AM (2 children)
I do not care about workers much but when it is more profitable to not produce cars than to produce cars I am calling that a recession.
I am sure Ford knew better, some 120 years ago. He had no problem with shrinking market, he fundamentally created a market non-existent previously. Which is, obviously, a higher difficulty.
Rust programming language offends both my Intelligence and my Spirit.
(Score: 2) by mcgrew on Wednesday September 11, @01:49PM (1 child)
I do not care about workers much but when it is more profitable to not produce cars than to produce cars I am calling that a recession.
Why not call it what it is rather than making up your own definition for "recession"? We have these things called Dictionaries. [merriam-webster.com]
Our nation is in deep shit, but it's illegal to say that on TV.
(Score: 2) by Mojibake Tengu on Thursday September 12, @02:25AM
Prosperity is not for everyone.
Rust programming language offends both my Intelligence and my Spirit.
(Score: 4, Insightful) by zocalo on Wednesday September 11, @06:57AM
With all the pork, layoffs in subsidiaries, etc. we could almost be talking about Boeing there. I wonder if anyone at Board or C-level over at Stellantis has noticed the similarities yet. Of course, if they have, the natural reaction will be more likely be business as usual, get a few more fat bonuses, then yank the ripcord on the golden parachute rather than actually try to right the ship.
UNIX? They're not even circumcised! Savages!
(Score: 3, Insightful) by pTamok on Wednesday September 11, @07:50AM
Cost-cutting is a big signal of management failure. Who let the costs get out of control in the first place?
Customers know that cost-cutting usually implies quality-cutting. This does not end well.
(Score: 2, Insightful) by pTamok on Wednesday September 11, @08:30AM (13 children)
If this is true, then it should be true for all auto-makers, which means a 'level playing-field' for all. Don't blame your company's poor relative performance on an issue that affects the entire industry equally.
I'd love to see the 40% extra cost broken down to understand where that extra comes from. Most people say it is the battery e.g.: McKinsey (2019) (pdf) [mckinsey.com]
If you look at the relative costs of fuelling a petroleum product powered vehicle with an electrically powered vehicle, you'll see that, in general, the electrical costs are cheaper (renewable energy is cheap, and getting cheaper). If you add up the costs of a petroleum product powered vehicle's fuel system and the fuel over the lifetime of the vehicle and compare to the cost of the electrically powered vehicle's battery and electricity recharge costs over the same lifetime, the difference comes down in favour of the electrically powered vehicle. This does, of course, depend on the cost of electricity used to recharge the vehicle's battery compared to the cost of the refined petroleum product, so for some people, the comparison still comes out ahead for the petroleum product powered vehicle.
What we do know is that battery cost is dropping, electricity prices are dropping, and petroleum product vehicle technology is relatively mature compared to electrical vehicle technology - there are not huge cost savings yet to be found with petroleum product vehicle technology development.
What vehicle makers should be doing is enabling the customer to amortise the cost of the battery over the vehicle's lifetime to get the up-front sticker price down. This is a financial engineering problem, not a physical engineering problem.
(Score: 0) by Anonymous Coward on Wednesday September 11, @11:25AM (3 children)
> amortise the cost of the battery over the vehicle's lifetime
Have you thought this through? Consider:
Most vehicles have more than one owner, and (at least personally), I don't want to buy a used car that has any sort of 3rd party deals attached.
Vehicle lifetime is quite variable, with some short (totaled in a crash), some due to rust (regional) and some very long.
Many are leased, with the monthly lease amount heavily dependent on the value of the vehicle at the end of the lease. There have also been separate battery lease deals, but then you have two monthly payments to make.
At the present time, BEVs* depreciate much faster than ICE vehicles (* except Tesla, but that may be changing?)
(Score: 1) by pTamok on Wednesday September 11, @04:07PM (2 children)
If your choice is between a vehicle that is so encumbered, or no vehicle, which will you choose?
(Score: 1, Interesting) by Anonymous Coward on Thursday September 12, @03:47AM (1 child)
There is a third choice, although you are attempting to set up a scenario where there isn't a 3rd choice. It's very simple, in my case, I keep the car(s) I have already.
(Score: 3, Informative) by Nuke on Thursday September 12, @09:35AM
Not so easy in the UK.
We have an annual roadworthiness test which is extremely fussy, and they look very hard at an older car and fail it for a spot of rust. They government and cetain local authorities are also trying to price older cars off the road on the pretext of greater emissionse (may be true per km, but it depends how many you do). On top of that the EU is banning the sale of spare parts that can keep older cars going, and although the UK is not in the EU there will be an effect because Mercedes, Fiat etc will stop making spares for their older models, and the UK's own car industry has been destroyed.
(Score: 2) by Nuke on Wednesday September 11, @11:50AM (1 child)
Where are you posting from? La-La land?
Apart from that, EVs (in the UK at least) are currently benefiting from very low or zero road tax, which IC vehicles are not. As EVs become more numerous that won't last. The government cannot afford to lose that massive income stream and they have already begun to raise EV road taxes.
(Score: 1) by pTamok on Wednesday September 11, @12:44PM
Nope, from somewhere where electricity prices go negative when the wind blows and the sun shines.
You still have to pay for the supply - all that infrastructure needs building, maintaining, and expanding, but the price of power delivered over that infrastructure is rather variable, and is trending down.
Obviously, when the sun doesn't shine, it's cold, and the wind doesn't blow (or blows too hard) there are problems, so power is imported from other places (nuclear, coal and gas), and the price spikes - easily to 10 times the long-term average. That is going to get much worse before it gets better. But the long term price trend for electrical power is down.
The growth of solar has outpaced even the most optimistic experts' predictions.
Don't get me wrong: covering the gaps when there's a stable high pressure system over Europe in winter is a challenge that cannot be met by renewables alone, now, or in the foreseeable future, and will require a breakthrough in 'grid-level' storage. However, the long-term trend in the average cost of electricity is down.
You are right: governments don't want to give up the revenue stream from taxing fuel and cars. They are in the game of plucking the goose with the minimum of hisses (Jean-Baptiste Colbert). You want the freedom a private vehicle gives you? You are going to pay.
(Score: 3, Interesting) by mcgrew on Wednesday September 11, @02:09PM (4 children)
I question that "40%". The piston drive train has thousands of moving parts, an EV drive train is its electric motor with one moving part. Yes, piston technology is mature, but so is electric motor technology.
My guess is that the "extra 40%" comes from the fact that they only make expensive cars into EVs, cars like the Mustang and Cadillac. The one I bought last year was the roomiest, most comfortable car I ever drove, and I've been driving since 1968.
The only reason to not make an affordable EV is that with the EV they lose the dealer to junkyard gravy train on replacement parts. The submitter must hate EVs, as they will kill his profession. When was the last tiome you had your ceiling fan serviced? Its starter or fuel pump replaced?
How does a car with thousands of fewer parts to manufacture and assemble cost 40% less? I smell bovine feces.
And here in Springfield, gasoline is four times as expensive per mile as electricity. A few months back when it was $3.75 a gallon it was five times as expensive.
By the way, that dealer to junkyard gravy train is why you don't know that an EV handles and brakes better than anything you've ever driven and is far roomier than the same sized piston car, and you have heat in the winter as fast as AC in the summer, no more having heat only when you get to where you're going. Oh, and the reason I bought mine was so I wouldn't freeze in the snow while it fills, I just plugged it in and went inside.
I miss that car, it got totaled last month. No vibration, no shifting jerks, no noise. Getting another one as soon as I can.
Our nation is in deep shit, but it's illegal to say that on TV.
(Score: 1) by pTamok on Wednesday September 11, @02:54PM
The McKinsey link I gave says that the 40% is the battery, and gives the saving from removing the Internal Combustion Engine components as being relatively minor in comparison. This is somewhat credible, because automakers have had many decades to improve the manufacturing efficiency of ICE motors, but are still learning on battery capacity.
Batteries are unlikely to ever match the energy density of petroleum products, which have the advantage of external oxidiser (oxygen from the air) and throwing away the waste products. If ICE vehicles had to carry tanks of oxygen and capture the carbon dioxide, things would look rather different. That said, new battery technology could improve things: solid-state batteries have a lot of advantages in the lab, and are becoming available in vehicles.
https://electrek.co/2024/01/11/toyota-solid-state-ev-battery-plans-750-mi-range/ [electrek.co]
https://electrek.co/2024/09/10/mercedes-getting-new-ultra-efficient-all-solid-state-ev-batteries/ [electrek.co]
Automakers don't want to make batteries cheap, and cheap and easy to replace, because that would cannibalize future sales.
(Score: 2) by Goghit on Wednesday September 11, @05:34PM
Yeah, I think we might be seeing some RIAA accounting or cop math happening. Could be something related to the shitfuckery we see with actual replacement parts when something goes wrong with a BEV - dealer insisting on replacing the whole transaxle for $16k when the problem is two worn bearings at $50 each, or trying to charge more for a new battery pack than the price of a new vehicle. Our BEV is just your basic commuter hatchback shitbox with a bit more room inside than a comparable ICE vehicle. Same telemetry so GM can harvest my data and sell it to insurance companies and other fine upstanding citizens. They didn't completely retool their assembly lines when they started manufacturing these vehicles and start from scratch, handcrafting in a tent.
47,000 manufacturing jobs is a real gut punch but I wonder how many jobs the government could have provided with that money if they'd diverted it to reducing wildfire risk in parks instead of burning it in some Cxx's yacht.
As far as anything manufactured by Stellantis goes, nothing of value has been lost. Stellantis does provide a service though as a black hole of suck, containing all the worst turds in one convenient to avoid location. I grieve for those badges of old.
(Score: 0) by Anonymous Coward on Thursday September 12, @03:58AM (1 child)
> The piston drive train has thousands of moving parts, an EV drive train is its electric motor with one moving part.
tl;dr: BEVs also have thousands of moving parts to fail.
You are missing something critical. The BEV has thousands of individual cells in the battery pack. At least with current Li-ion batteries, these are all moving parts. As cells charge they expand internally, and shrink on discharge. They also change size with temp (heating up with high rates of charge or discharge). These small motions cause mechanical fatigue that combines with other chemical & electrical damage to reduce the capacity of the battery (over time, if everything works as designed).
Or, if a slightly out-of-spec cell fails, then the whole battery may be ruined. The battery packs are (mostly) liquid cooled/heated to keep the cells near an optimal temperature. The sealed and heavy container makes it difficult/expensive to replace individual cells that go bad--most likely the whole battery pack will be recycled...once the recycling companies are up to speed.
(Score: 2) by ChrisMaple on Thursday September 12, @04:28AM
The "thousands of moving parts" claim is untrue, as is the "one moving part." However, calling batteries moving parts is stretching the definition beyond credulity. There's more than one moving part in an electric motor; winding, shaft, and the magnetic circuit all move. Depending on the design, there may be motor bearings that move. Axles, wheels, wheel bearings, universal joints, etc. are all parts of the drive train and all move.
There are more mechanical moving parts in a piston engine. There was no reason for the original poster to exaggerate in order to make his point.
(Score: 3, Interesting) by Nuke on Wednesday September 11, @04:32PM (1 child)
Much of it is the green premium - screwing people over to pay more "for the sake of the planet". The same reason that in my supermarket it costs more per gram to buy coffee in a paper bag than in a glass jar, despite the fact that the glass jar and its plastic lid contributes most to the weight with regard to transportation and requires a significant amount of energy to manufacture, much more I guess than paper. But the paper bag option sells with the message (it's printed on it) that you are saving waste, transport costs and the planet generally.
EVs are still at the stage of appealing mostly to well-to-do hipsters and other green posers, and one of the reasons I don't even want one right now is because I don't want to look like one. Maybe I'm being too sensitive.
Not mentioned in the comments so far are the repair and maintenance costs of EVs, which despite having "thousands" of fewer moving parts (according to one poster) are significantly more than for IC vehicles. It has been said that EV owners try to get rid of them as soon as they have digested the cost of the first repair required. Moreover, the "new technology" euphoria (for some) is enabling the EV makers to make it difficult or impossible to get repairs done except at their approved dealers, which as usual in the car world are far more expensive than the mom & pop garages that can repair IC vehicles satisfactorily.
(Score: 2, Interesting) by pTamok on Wednesday September 11, @06:45PM
EVs are well described as powerful PCs with an expensive battery and sensors on wheels. The repair costs are for the electronic gizmos, like parking sensors and video cameras which require expensive calibration after they have been dislodged in a parking shunt. It would cost the same on an ICE vehicle, but the market has gone for expensive auto cruise-control (radar/lidar/video) hidden by the transition to BEV. Apart from the battery, BEVs could be absurdly cheap, but the manufacturers don't want that.
The reason BEVs have touch-screens is that providing and wiring up individual switches, knobs and stalks is expensive, A touch screen is far, far cheaper, even though it is far less safe (eye's off the road, no haptic feedback). Sensors could be made pretty much auto-calibrating, but requiring visits to the repair shop brings in after-sale income.