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Hey, Jaan here.

I'm sorry for the crickets in your inbox last week. I was out with a high fever and only managed to send the Pro report between the peaks.

Back now. Stronger than ever!

Here's what I've learned about the EV industry this week.

• [Deep Dive]: Why was Diess sacked?
• [Details]: EV credit in the Inflation Reduction Act.
• REE unveils the first delivery van.
• Nikola acquires Romeo Power, e.Go goes SPAC and more.

The 2,874 words here should take about 10 minutes to read. If you click on those 'read more' buttons however... I think I wrote you over 4,000 words this week. Enjoy!

- Jaan

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New: To keep these newsletters more readable so you could reach the good stuff in the end, I'll start capping my deep dives and linking to the full articles on our website. Starting with this one.

Deep Dive: Why was Herbert Diess sacked?

I find this move was of high importance in the future of our EV industry.

After taking the place as head of VW Group in 2018, Diess has been a very clear captain in moving Volkswagen towards EVs, despite serious pushback from the old guard.

Per our 2021's BEV sales tracker (link), we saw VW Group came in second only to Tesla by delivering 452,900 fully electric vehicles globally (Tesla did 936k). Although considerable, this counted for only 3.06% of the Group's overall sales.

It is hard to turn this kind of an old ship around... but so far the CEO had pushed forward nevertheless.

Here's my best try to structure the what, how, and why happened - as usual, gathered from different sources that I trust. In most cases, I will specifically let you know the parts that are solely my opinion, which are written in cursive.

The What

Herbert Diess, whose contract was renewed until 2025 just last July, will now be leaving the position on August 31st.

The current CEO of Porsche, Oliver Blume, will take his place, while (at least for now) remaining also the head of soon-to-IPO Porsche. Blume had been mentioned several times as the potential successor over the past years.

Here's VW's press release saying Diess resigns 'by mutual agreement': (link).

VW Group says Diess will continue as a consultant for the VW Group after this, but if I know anything, it is highly unlikely he will be continuing in any significant capacity after this.

Diess was given a 'golden parachute' which includes a €2.2M/year ($2.25M) salary until the end of his contract in 2025 and a pension after that. He could get up to 30M€ over the next three years if the carmaker performs well.

I bet the Group isn't very happy that it renewed this contract now, as it's getting  rather expensive.

The How

In a now-historical LinkedIn post, Herbert Diess thanked his colleagues at Volkswagen for the demanding first half of the year and wished happy holidays. "We are in good shape for the second half", he wrote in the end.

Two hours after the post, it became clear that the second half would come without him among the colleagues.

Turns out, that at the same time as the posting (~4 pm), there was a Supervisory Board meeting called together as a video conference, the agenda of which was only known by the 8-member presidium. Everyone else found out at the meeting.

[1,156 more words on the site]

Continue reading and see the 4 reasons Why →

...and how I found this picture to tell you what's next.

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Details: Inflation Reduction Act

The Inflation Reduction Act is a bill sponsored by Senators Chuck Schumer and Joe Manchin, authorizing $370B in spending on energy and climate change. Simplified, it's a scaled-down version of the Build Back Better bill, the EV relations of which I've covered here before.

Here is the 725pp pdf, in case want to geek out on it. Page 366 is where the EV info begins. There's a rather high chance this bill passes, but it does still need formal approval by the U.S. Senate and House of Representatives.

For us, the bill also includes (/extends) the $7,500 EV tax credit with some additions and new eligibility rules.

Here's the rundown of what I found important:

• $7,500 per Clean Vehicle.
• Expires in 10 years on Dec 31st, 2032.
• Adds $4,000 credit for dealer-sold used Clean Vehicles.
• "Clean vehicles" are eligible, which includes PHEVs starting with 7kW batteries.

... I wrote 11 more details on the bill, but they couldn't fit the newsletter. See them here, including the petition against allowing hybrids and supply chain requirements:

Continue with the details

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EV Spotlight

I never thought I'd start getting excited about delivery vans, but after the Rivian Commercial Van, Arrival Van, Brightdrop's ZEVO, and now this... I'm a geek alright.

If you've been with us long enough, you might remember my reports on the REEcorner proprietary tech when it came out (video). I still love the modularity approach.

Now we finally see it in daylight for the first time with Proxima, a delivery concept vehicle based on REE's ultra-flat modular P7 platform with REEcorner drive modules. It is built with EAVX and Morgan Olson.

caption for image

It has a 120kWh battery, giving it a 125mi (200km) range. It's a walk-in step van with a ridiculously low placement for loading area and can carry 8,000 lb. (3.63 tonnes) with a cargo volume of 1,000 cubic feet (28.3 m3).

Thanks to the drive modules per each wheel, it's also an "all-wheel steer" with a turning radius of 25.3ft (7.7m) or 50.5' curb to curb.

‍To compare - the already-good Rivian Commercial Van platform's curb-to-curb is a similar 54.8ft. However, the Proxima is 28.4ft long (8.7m), while I assume RCV's curb-to-curb is given for the 20.66ft (6.3m) or 23.1ft (7m) versions.

Proxima showing off on the video:

STOCK TALK: REE automotive was also one of the companies that went public via SPAC last year, at a $3.1B valuation (investor deck). Today, $REE is trading 91.8% lower than its peak, at a market cap of $413.3M.

All this got me thinking - I haven't seen a comprehensive EV delivery van comparison anywhere yet. Should I create one?

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Quiz time!

Who is the man posing next to the car?

Bonus points if you say how he and all of this is related to the EV world.

Hit me with a reply with your guess. I'll cover the answer next week!

Last week's answer was: A fleet of Rivian's Amazon delivery vans parked and ready to hit the road on the road. (link) I counted 72 of 'em on this picture.

Inspiration Mobility, Anup P, Dominik M, Daidipya P, Dennis McQ, Mike B, Megha P, Jakub K, and David H hit the bullseye guessing what these were.

Our random lotto generator chose Dominik as the winner of my very first quiz game. The prize this time was an EVU Pro subscription for 3 months! I'll drop by your inbox soon, Dominik. I won't guarantee prizes every time, but you never know.

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⚡ Tour-de-Universe

ICYMI, last week's most clicked link was: the new all-electric Chevy Blazer unveiled (video).

🌎 GM launched a website EV LIVE to showcase all of its EV efforts. It's got some nice visual gimmicks and if you're an US resident, you can schedule a "one-on-one one-way live video tour" with an EV specialist. You can use text or voice to ask questions live. (link)

💰 The US Department of Energy will provide a $2.5B loan to the Ultium Cells battery joint venture (General Motors >< LG Energy Solution). (link)

🌎 USPS again stepped up (or rather, is catching up) its EV plans to be 40% electric (link).

🚗 Cadillac presents the CELESTIQ show car, which should be a preview for the upcoming electric luxury sedan. (link)

🇬🇧  Toyota threatens to stop its British car production if the UK government brings forward the hybrid phase-out to 2030 (rumored, originally 2035). (link)

🛞 Toyota says don't drive its bZ4X until "remedy is available" or the wheels can detach. We now saw that in the US, the company will provide a loaner (+gas) until it is solved, $5k credit, extra free charging at EVgo, extended warranty, and are willing to repurchase the car (link).

💸 Next.e.GO Mobile, the German small EV maker that currently has ~1k Life EVs on the road, plans to go public via merger with SPAC Athena Consumer Acquisition ($ACAQ) (link). Valued at $800M pre-money, the company hopes to raise $285M and start trading under $EGOX.

It seems the company might indeed find new life after it filed for insolvency and was acquired by ND Industrial in September 2020.

💸 Latest from EV-scalpers in Australia: a used Tesla Model 3 sold for $91k, while the new are available to order for ~$46k-$84k. Waitlist there is about 6 months (link).

📉 Production is hard. In its SPAC presentation last year, Lucid Motors forecasted 20,000 deliveries for 2022. In March, they cut the estimation to 12-14k. Today, they cut their estimates for the year to "6...7k units". So far this year, they've produced 1,405 EVs.

Mr. Musk took the chance to tweet a joke in response: "I had more kids in Q2 than they made cars!"

⚡ Dodge will drop the V8 engine to go full EV in the next-gen Charger and Challenger (should be coming in 2024). (link) We should be seeing the first EV concept pop up in a few weeks.

USPS again stepped up (or rather, is catching up) its EV plans to be 40% electric, with 25k EV trucks coming from Oshkosh and 34.5k from others.

💰 Nikola acquires Romeo Power in an all-stock transaction for ~$144M. (link) Romeo Power designs and makes commercial EV batteries... and its biggest customer so far has been Nikola itself. RP ($RMO) was one of the companies going public via merger in the EV SPAC craze last year, at a $1.33 billion valuation.

In this case, Nikola basically acquires one of its suppliers, at its low point. A talent grab and vertically integrating its battery supply, this looks like a good deal. I find it's likely that Romeo's cell deal of 8GWh-by-2028 with LGES carries over, too. That's roughly enough for what... 10,000 Nikola Tre's?

🔋 LGES Battery Challenge 2022 is an international competition to identify battery startups for potential investment and collaborations. Apply before Sept 16th. Up to $1M cash prizes (link).

🔋 CATL has been considering locations for its first North American battery plant, but pushed back the announcements due to the US House Speaker Nancy Pelosi's trip to Taiwan. (link)

📊 Europe Sales: In Q2, 322,144 BEVs were registered in Europe. (pdf by ACEA).

This brings the first half of this year to 629,747 BEVs (+30.3% YoY).

Sidenote - in Q2, there were still more than twice as many hybrids sold (534.7k, 22.8% market share, -2.2% YoY) and slightly fewer plug-in hybrids (206.5k, 8.7% market share,- 12.5% YoY).

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Congratulations to our reader John Cerveny, "a battery guy in NY state", for taking delivery of his Ford F-150 Lightning!

John shared his first takes in our community, including that he is "super impressed with the build quality, ride, handling, acceleration(!) and range."

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Uh-oh...

This section for setbacks in our industry is getting an unsettlingly large part of the newsletter recently. But it is a must-know, so here we go:

🚫 Porsche recalls 40,421 Taycans built between 10 July 2019 and 18 May 2021 for a possible wire harness damage that can happen when adjusting the front seats. It can lead to the deactivation of airbags and seatbelt tensioners. (link in DE)

Will we ever see a recall regarding their on-board charger killing batteries? (remember this?)

🚫 General Motors is providing the 2020-2022 Bolt EV and EUV owners a cash rebate averaging $5k as goodwill after the battery recalls... but the owners sign away their rights to sue the company (including for battery defects) in the process. GM calls it "common practice".

🚫 "Park outside, don't drive or charge it". BMW recalls the oh-so-very few iX (56) and i4 (27) it has delivered in the US, because of a potential fire risk. (link) During the production, the cathode plate may have been damaged, and parts may have entered the cells that could cause a short circuit.

There was an incident in the US and two overseas, which led to the voluntary recall. Samsung SDI is the cell supplier, so that's likely the one to look for blame.

🚗 Faraday Future... is dying alive! Last week, I wrote in our Pro report how the company postponed its FF 91 production due to lack of funds, saying it needs to raise $325 to survive the year.

Now, one of its major shareholders and FFIE executed a non-binding term sheet for a $600M convertible loan. But note, that the press release says 'as of date, potential investors have not been identified for the entire $600M' (link).

My two watts: Not confirmed anywhere yet, but this might mean the company is taking the agreement from shareholders connected to its infamous founder, Jia Yueting, who had to take a back seat in a power struggle few years ago. While Yueting's influence will 'regrow', it likely means we'll see the resignation of Brian Krolicki, a director of the company. The investor group had previously offered 'an investment of at least $100M if he resigned. This here might be it realizing.

🔥 This I-Pace burned down while charging, in Florida. The fire started in the owner's garage, but he luckily managed to drive it out to the street (link)

This marks the 4th similar fire under similar circumstances in the I-Pace history, out of the ~50,000 on the roads today... which now demands our question:

Do these suffer the same fate as the Chevy Bolts, which led to a massive recall? As far as I know, the LG pouch battery cells in the I-Pace are the same...

Bonus: I found that there's a dedicated Wikipedia page for plug-in EV fire incidents (link).

Stuff I'm...

...watching

Tesla’s 2022 Annual Meeting of Stockholders will be held on Thursday, August 4, 2022, at 4:30 PM Central Time (aka right as I'm sending this out!)

I'll be reporting back on what I learned next week, but meanwhile I'll share a quick two screenshots here. Tesla reached a 1.5M annualized production rate in July and reached a milestone of 3 million EVs built.

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👀  Munro Live interview with Ford's CEO Jim Farley, Chief Engineer Linda Zhang, and Chief EV Officer Doug Field. This is a good one.

👀 How 'bout a swim while you Supercharge from the sun in one of the 40 Superchargers or 6 Fastned 300kW chargers in Hilden, Germany? The pool is complete with Tesla balls. (video)

...reading

📚  Lonely Planet's article on the best US road trips you can take with your EV. (link) More of this, please.

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Quote(s) of the week:

I found that during Hertz's Q2 earnings call, the CEO Stephen Scherr and CFO Kenny Cheung offered some insights into the ongoing BEV experiences. (pp 11 of 14, pdf)

Two Teslas, a BMW i3 and Kia EV6 available in Hertz' Amsterdam's Schipol Airport location. Photo via @electricfelix

Scherr: "I think you should expect in the coming months that you'll see announcements from us about purchase of EVs in sizable quantity from other OEMs as we try to sort of build out kind of a broad population of vehicles across a range of OEMs."

"We are running kind of 50% to 60% of what maintenance costs are on ICE vehicles. If there's any one surprise, it's probably slightly higher expense on tires. [...] Overall, we're very pleased with the results.

Cheung: So as we underwrite the business case with new data, we are even more confident with the economics of EVs. "

We already know of Hertz deal with Tesla M3 (100k over 14 months) and Polestar 2 (65k over 5 years). Your guess on who's next?

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