Auto loan delinquencies, Chinese EV exports, Rivian's charging network updates

Hey everyone.  Welcome back to another edition of the daily roundup. Before we dive in—I test drove a Tesla with Full Self-Driving for the first time ever over the weekend.

Sort of felt like magic.

Whoever successfully implements this kind of tech for every other automaker will build a gargantuan company.

Who do you think will eventually pull it off? Let me know in the comments.

—CDG

Market Watch

1. Auto loan delinquencies grip the country

Big picture: Car owners are falling behind on their monthly payments at an alarming rate.

New data shows that in Q4 2023, auto loan delinquencies were up year-over-year across every state in the U.S., bringing the national average to 13.85%. 

Why? 

1. Inflation. Consumer wallets continued to be burdened by high prices in several sectors. Notably, auto insurance premiums have risen 22%, year-over-year.

2. New car prices remain elevated. The average new car transaction price (ATP) for April is expected to be $45,090, over $1,000 less than last year, but still higher than pre-pandemic levels.  

3. High interest rates. The average new car loan rate ended March at 7.2%. Used car loan rates jumped 0.3% from February to March and are now at 11.9%, a new all-time high.

Quick facts:

• Mississippi led the nation with 23.49% of auto loans delinquent by 30 days or more.

• Iowa has the nation's lowest auto loan delinquency rate at 8.77%.

• Washington saw the highest year-over-year increase in auto loan delinquency, increasing by 12.89%.

What this means: Delinquency on an auto loan does not necessarily mean a default, but as prices continue to remain high, it’ll be more difficult for delinquent owners to get current with their loans. This could lead banks to further tighten their lending to maintain the overall health of their portfolios.

2. Chinese automakers eye foreign profits

At a glance: Back for the first time in four years, the Beijing Auto Show is highlighting the influence of its domestic manufacturers, including BYD, Nio, Yangwang, and Zeekr to name a few. What the show also reveals is how saturated China’s EV market really is.

Zooming in: An oversupply of EVs and an ocean of competition have ignited a fierce EV price war. China's National Development and Reform Commission (NDRC) anticipates demand for low-to-zero emission vehicles to grow to 2.1 million units in 2024. The problem is that China’s top three EV brands plan to deliver 2.3 million vehicles. This glut of inventory will likely drive prices down further.

Which could be a real issue. 

A recent report from Goldman Sachs estimates that China’s overall industry profitability could become negative in 2024 if BYD introduces cuts prices by another 10,300 yuan (US$1,421).

Since February, BYD has slashed the prices of its cars by 5-20%. This triggered a domino effect with other carmakers like Tesla and Li Auto following suit with price cuts of their own. 

How are Chinese automakers offsetting this drop in profitability?

Increase the price of exports to foreign countries.

A new report shows BYD often charges more than double or nearly triple in its top foreign markets compared to its domestic prices. This strategy allows BYD to safeguard profit margins abroad and make up for profit losses at home. 

Key quote: “Overseas expansion is becoming a cushion against the falling profit margins at home,” said Jacky Chen, head of Chinese carmaker Jetour’s international business.

Why it matters: Mainland Chinese automakers are prioritizing market share over profitability in their home country and will likely become more aggressive with their exports. Yet, it’s still unlikely that Chinese brands will hit U.S. soil anytime soon. Not necessarily because of price wars or tariffs–but politics.

3. Rivian unveils new plans for EV charging network

Top line: EV maker Rivian has teased a major update to its Rivian Adventure Network (RAN) DC fast charging network.

Digging in: By the end of 2024, Rivian aims to make its charging stations compatible with nearly all EVs, whether they use the Combined Charging System (CCS) plug or the North American Charging Standard NACS plug developed by Tesla.

Rivian plans to do this by first rolling out charging stations with native CCS connectors while providing support for approved NACS adapters. Later on, the chargers will retrofitted with a hardware update that has built-in, native NACS connectors. 

Context: Last month, Rivian revealed that it had gained access to Tesla’s nationwide supercharging network. Compatible chargers now appear in Rivian’s navigation app and are available to use if the driver has an NACS adapter. 

As of March 18, the Rivian Adventure Network had 424 live chargers across 70 sites and has plans to grow to more than 3,500 fast chargers. For comparison, Tesla has over 2,000 charging stations in the U.S.

Good news: Rivian promised to start sending free NACS adapters to its customers this month, and it looks like owners have finally started receiving emails from the EV maker asking where to ship the adapters.

Zooming out: Rivian is the second major automaker to gain access to Tesla’s supercharging network. Ford made similar announcements earlier this year and also committed to shipping free, in-house NACS adapters to its customers. 

This is surely a sign of things to come from other automakers, and at this rate, Tesla is poised to corner the market on EV charging.

• Tesla has reportedly cleared a key regulatory hurdle and can now offer Full Self-Driving (FSD) in China. 
  

• Ford’s EV unit, Ford Model e, lost $132,000 for each of the 10,000 vehicles it sold in the first quarter.
  

• AutoNation’s Q1 2024 revenue was $6.5 billion, compared to $6.4 billion a year ago, led by 7% growth in new vehicle volume.
  

• The U.S. Department of Justice has officially closed its investigation into the Mercedes-Benz diesel emissions scandal.
  

• Former Tesla executive Drew Baglino has sold off $181.5 million worth of his shares in the company.

We’ve got tons of great jobs hitting the CDG Job Board right now. Here are some standouts for anyone looking for their next move.

• SaaS company BizzyCar has put the call out for account executives in Los Angeles and Orlando (remote).

• OPENLANE is looking for tons of new talent—they’re hiring market sales managers across the country. In Pensacola, Chicago, and Las Vegas to name a few.

• Credit Acceptance is hiring over a dozen market area managers across the country, including in Portland and Clearwater.

Looking to hire? Add your roles today—it’s 100% free.

Thanks for reading. Check back here tomorrow for even more industry headlines.

—CDG