Happy Monday, and welcome back to Critical Materials, your daily source for the latest news driving the future of transportation.
It may just be the very first day of the week, but we’re already flush with developments in the EV space. This past weekend marked the start of the International Mobility Show Germany, also known as IAA, Europe’s biggest auto show. Lots of brands are making debuts and strategic announcements that will affect Europe, and subsequently the entire world. And as one company steps backward from its full EV commitment, others are going all-in.
Meanwhile, political tensions between the U.S. and South Korea remain dicey as the South Korean government and private businesses react to last week’s raid on Hyundai’s forthcoming battery and EV plant in Georgia.
Let's hop to the news.
30%: ICE Raids Throw Korean Businesses Into A Tailspin And Delay Battery Plant
Friday’s immigration raid on Hyundai and LG’s joint Metaplant in Savanna, Georgia, has certainly dominated this weekend’s car-related news. Last week, U.S. Immigrations and Customs Enforcement agents stormed the under-construction factory and detained 475 workers, the vast majority of them South Korean nationals. ICE claims that those detained have visa issues and were not authorized to do any work in the U.S. The controversy has the potential to sour relations between two friendly nations, if not handled quickly.
Response to the raid in South Korea hasn’t been all that kind, with images of Korean nationals shackled and arrested making the rounds and sparking criticism as to why Korean companies are investing in the U.S. at all, according to some news reports. In the meantime, South Korea’s diplomats may head to Washington D.C. to try and smooth things over between the two countries, while chartering a plane to bring all of its detained nationals home.
Still, the whole raid has left Korean companies reeling. In fact, this whole crisis has made some Korean companies second-guess their commitments to the U.S., according to Bloomberg.
“In a meeting with the ruling party leadership, SK Group Chairman Chey Tae-won, who currently leads the Korea Chamber of Commerce, urged the government to secure US visa quotas to ensure smooth business operations and prevent similar incidents from recurring.
Initial investor reaction in Seoul was muted, with LG Energy and Hyundai Motor shares only slightly lagging the broader market. Analysts said potential delays at LG Energy had been well flagged, while Hyundai has flexibility to adjust EV output and tap other suppliers. LG Energy finished up 0.2%, while Hyundai fell 0.7%.
Still, one investor said that concerns over the profitability of South Korean companies’ investments in the US are growing.
“The case demonstrates how tough it has become for Korean companies to make money from the investments in the US,” said Kang DaeKwun, chief investment officer at Life Asset Management Inc. “Return on investment was already getting low due to inflation and now companies face hiring challenges as well.”
The high-profile immigration enforcement operation — the largest single-site action in the history of the Homeland Security Department’s investigative arm — also risks deterring South Korean businesses’ private expansion plans.”
Hyundai says the ruckus from the ICE raid won’t impact vehicle assembly, but this is still an ongoing situation. We’ll just have to see how this plays out over the next few weeks.
60%: Stellantis Scraps Its 100% EV Goal
I can’t tell if this is a true come-to-Jesus moment, or sort of throwing in the towel when it comes to carbon emission reduction, but another automaker is saying that transitioning to 100% EV sales is not possible. Initially, like many other automakers, Stellantis pledged to go fully electric in Europe in the near future—by 2030, in its case. However, at this year’s IAA in Munich, it’s now saying that going all-electric probably isn’t possible for any brand, calling the European Union’s 2035 emissions targets unrealistic.
Franco-Italian carmaker Stellantis will no longer pursue a target of producing only electric vehicles by 2030, said Jean-Philippe Imparato, head of enlarged Europe, on Monday, adding that other goals in its upcoming strategic plan, known as 'Dare Forward," may remain,”
In 2022, Stellantis revealed its “Dare Forward” plan to make 100% of its cars sold in Europe and 50% of its cars sold in North America fully electric. But sales and execution of its electrified models have been middling at best, and the brand has openly complained about the profitability of its EV models. Curiously, the website for Stellantis’s Drive Forward plan now has a footnote at the bottom that says: “Many of our Dare Forward 2030 targets have become increasingly challenging in view of the current trends in market dynamics, government policy and regulation that have emerged since the Plan’s introduction in March 2022. These market inputs will ultimately determine the speed and trajectory at which we meet our Dare Forward 2030 targets.”
90%: BYD’s Plans To Build EVs In Europe, For Europe
BYD’s quest for world domination presses onward. The European Union’s tariffs on Chinese-built EVs seem like they were merely a small speed bump on BYD’s journey. At this year’s IAA, the company announced plans to produce the European version of the Seagull, the Dolphin Surf, in Hungary. This is the brand's first model to ever be made in Europe.
And it won’t be the last, either. At the same show, BYD CEO Stella Li said that BYD plans on producing all of its EVs in Europe from 2028 onward. Not just at the Hungary plant, but also soon at its forthcoming Turkey plant, according to Reuters.
"We are training ourselves to be more European in production," executive vice president, Stella Li, BYD's No. 2 executive, told Reuters at the IAA Mobility car show in Munich.
BYD is building a factory in Hungary that should commence output this year, and is due to start production in Turkey in 2026.
The EU imposed tariffs on Chinese-made EVs last year because it believed China's automakers benefited from government subsidies.
Asked how long it would take BYD to produce all of the EVs it needs to supply European demand, Li said: "Give us like two to three years."
Interestingly, BYD said it expects its PHEV models to outsell its EVs for a short while, until EV production is fully up and running. At the same show, it announced the European version of the Seal 06 DM-i Touring, a Toyota Camry-sized PHEV station wagon expected to have a starting price of around $45,000.
100%: Is Stellantis Right? Is a Fully Electric World Not Realistic?
Stellantis isn’t the only automaker that’s pushed back on any governing body that demands an automaker go fully electric. Recently, Mercedes-Benz and Volkswagen have also claimed that the European Union’s emission targets aren’t realistic and that the internal combustion engine needs to stay around for a lot longer.
On one hand, I understand that there are a lot of cost concerns associated with building and designing electric cars, especially in higher-wealth countries with more expensive labor costs. On the other hand, though, some of these complaints don’t jive with the EV growth we’re seeing globally, especially in low to medium-priced segments.
How about you? Are you excited for a fully electric world? Or do you think it’ll never happen?
Contact the author: Kevin.Williams@insideevs.com
