I hate to do the "I told you so" thing, but just recently I've seen a huge uptick in mainstream media stories sounding the alarm about the danger China's rising auto industry presents to manufacturers in the U.S. If you've been following cars or the electric market for a while, you knew this, but lately, everybody is catching on. Now, America's politicians are too, but turning the heat up on China won't be as easy as it sounds. 

That kicks off this midweek edition of Critical Materials. Also on tap today: Apple isn't done with your car by a longshot, and Fisker gets some U.S. dealerships. 

30%: Senate Bill To Spike Chinese Car Prices (Yes, Even The Ones From Mexico)

BYD Dolphin

Thanks to two decades of copious government funding, lessons learned from Western manufacturing partners and cheap labor, China's EVs are widely considered far ahead of the rest of the world. That doesn't impact the U.S. market yet since those cars are subject to 27.5% tariffs, but many Chinese automakers—namely the giant BYD—want to set up shop in Mexico to, presumably, get around those rules. If they're made in North America, they shouldn't face the tariffs.

But U.S. Senator Josh Hawley, a Republican from Missouri, will today introduce a bill that might keep that from ever happening. Here's Reuters:

Hawley's bill would raise the base tariff rate to 100% from 2.5 percent currently, which would mean a total tariff of 125% on all imported Chinese autos from 27.5% currently. It also seeks to apply the 100% tariff hike to vehicles assembled in Mexico by Chinese-based automakers.

Hawley said President Joe Biden should take steps to protect U.S. auto workers "from the existential threat posed by China."

His sentiment is shared by other elected officials (including those on the other side of the aisle), the auto industry's lobbying arm and manufacturing advocates. But there are some things to keep in mind here. 

First, this is one bill, and whatever final form it takes—if it does at all—could be watered down from such a steep amount. It's also not immediately clear (without reading the bill text, which isn't public yet) where this leaves cars like the Volvos and Polestars made by Geely in China. 

Finally, there are risks involved here too, especially with retaliatory tariffs from China. We still get almost everything from them, so if they wanted to turn the screws on us, it would certainly hurt.

Either way, as EVs, their future and the auto industry's race to catch up become such hot issues, expect more U.S. government responses like this soon. 

60%: Fret Not For Apple, It's Not Giving Up On Your Car

AI rendering of the Apple Car.

There's been a lot of hand-wringing in the mainstream and financial press over the last day or so following the news that the Apple Car is dead, including the kind that ties it into doubts about the electric vehicle future. I would not go that far; above all, I'm surprised that the mysterious project lasted as long as it did.

I think this was Apple making a fairly obvious call after a decade of development, with God knows how many billions of dollars spent, that ultimately went nowhere. In the end, Apple's early critics were right: making an actual, physical car was probably too far outside its lane to be viable. 

But Apple didn't have to ever make a single car to transform the auto industry, The Atlantic reports with a smart take today. It's already done that in two ways: first, with the sheer ubiquity of Apple CarPlay, and the fact that Apple's approach to design and UX has informed how almost every modern car's software looks and feels.

You know how people sometimes call EVs "smartphones on wheels?" We can thank the iPhone for that: 

But Apple is so big, and its devices so pervasive, that it didn’t need to sell a single vehicle in order to transform the automobile industry—not through batteries and engines, but through software. The ability to link your smartphone to your car’s touch screen, which Apple pioneered 10 years ago, is now standard. Virtually every leading car company has taken an Apple-inspired approach to technology, to such a degree that “smartphone on wheels” has become an industry cliché. The Apple Car already exists, and you’ve almost certainly ridden in one.

[...] Now basically everyone has a smartphone, and basically every car has a touch screen. Today, not being able to connect your iPhone to your car would be shocking. As of 2022, a reported 98 percent of new vehicles in the United States had Apple CarPlay. The service doesn’t seem to directly generate revenue yet, but it further locks people into Apple’s screen universe: wake up and turn off the alarm on your iPhone, scroll through social media on an iPad over breakfast, drive to work while blasting Spotify through CarPlay, then type into a MacBook in the office.

Apple CarPlay (and its brother from another mother, Android Auto) is so trusted and so beloved that General Motors has yet to recover from the uproar when it announced future EVs wouldn't use those smartphone projection systems. Since then, other automakers—even ones who borrow GM's EV platform now—have gone out of their way to stress that they will keep using Apple CarPlay into the future. People love it and they're not moving on from it.

Considering where that dominance puts Apple in terms of mapping, charging route planning, data and so much more, Cupertino's automotive ambitions are going to be just fine. In fact, future versions of CarPlay like you see up top will take over even more of your dashboard in the future.

The Apple Car never came to be, but in some ways, every car is an Apple Car now. (Except the GM Ultium cars, and $10 says they'll walk that back someday. Anyone wanna take me up on that bet?)

90%: Fisker Signs On Three Dealers In New York, Florida and Indiana

2023 Fisker Ocean

EV startup Fisker's had a rough go lately. The owners generally love the cars, but even as an early adopter crowd, they don't love the bugs. And Fisker has struggled with both delivieres and repairs lately, a dealer network may be just what the doctor ordered. 

This morning, Fisker announced even more dealer partners signing on for the effort. This time, they're in Albany; Jacksonville, Florida; and Indianapolis. In total, 12 dealers in the U.S. and Europe have signed on, and Fisker says it's "received interest" from 250 more. 

From the company's news release:

On January 4, 2024, Fisker announced that it would engage in a strategic shift from direct sales to customers in North America to an innovative Dealer Partnership model. The model combines the goal of offering its customers no-haggle pricing on Fisker vehicles (where permitted) and superb service while also providing dealer partners with larger market territories, so they can maintain pricing without concern for local competition. Taken together, these goals represent a win-win-win for customers, dealers, and Fisker. The transition to dealer partners aligns with Fisker’s asset-light business model, which enables the company to significantly scale for Fisker Ocean deliveries and higher volume production of additional future models.

Fisker officials said the company also has dealers signed on in North Carolina, South Carolina, Georgia, Maryland, other parts of New York and New Jersey.

Dealers won't be a magic bullet for Fisker's woes—although given it's an EV-only brand, that may circumvent traditional dealer resistance to electric sales—but it will help move metal and get cars fixed promptly. In theory, anyway.

100%: What Would The Ideal 'Apple Car' Have Been?

As I mentioned yesterday, the weird thing about the Apple Car was that its role and purpose was always unclear. Over a decade, it morphed from robotaxi to $100,000 electric SUV, more recently. (As if the market needs more of those.)

But let's play Apple Executive for a second. If you wanted this thing to be actually successful, what would you have done? "Cancel it" is a valid answer too. 




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