Auto File-I'm rubber, you're glue. Plus, China's rare earth power play

June 10 - By Nick Carey, European Autos Correspondent

Greetings from London!

Amid all the noise – and there was a lot of it in the last week, in particular thanks to an intensely public spat we’ll get to shortly – smaller stories can get lost.

One that stood out briefly for the Auto File was that Maserati will present a new business plan soon after owner Stellantis’ new CEO Antonio Filosa officially takes up his job later this month.

Investors will be watching closely to see what Filosa does about loss-making Maserati and Stellantis’ sprawling brand portfolio of 14 brands.

Part of Filosa’s new job will be figuring out which of those many brands has a viable future, or will end up being ditched, as General Motors did with Pontiac and Saturn during its government-led bankruptcy in 2009.

Whatever the outcome, it looks like Filosa will hit the ground running.

Which brings us to today’s Auto File ...

• I don’t like you anymore

• Panic over China’s rare earths

• Chinese rivals go after BYD

Fallout from falling out

Who could have foreseen that two of the world’s premier alpha males and social media brawlers would ever fall out and exchange playground taunts? I mean, aside from everyone.

There was little unexpected in the intensely public fight between former besties Donald Trump and Elon Musk – ostensibly over Trump’s tax bill, which Musk called a “disgusting abomination” – as public fighting is what they do and who they are.

But Musk appears to have confused his immense influence as the world’s richest man and owner of X, formerly Twitter, with real power.

As it happens, Trump has all the power and has demonstrated a fondness for vengeance.

Those facts were not lost on Tesla’s investors, who were laser focused on the very real ways that Trump could cut off government contracts or subsidies, which the U.S. president indeed threatened.

The automaker lost $150 billion in value in just one day on Thursday as traders dumped its stock like a hot potato.

After previously suggesting Trump should be impeached, Musk has gone quiet, perhaps realizing like others before him that the U.S. president never loses fights with erstwhile allies. His father told Reuters the fight happened because Musk was under intense stress.

This is not the first time the two men have feuded. Back in 2022, Musk said Trump was too old to run for president again and needed to “sail into the sunset.”

It’s entirely possible then that the two men will make up again. But it’s likely it will be on Trump’s terms.

Recommended reading:

• Progress in U.S.-Japan trade talks

• Tesla tries to block robotaxi records

• Filosa’s Stellantis paycheck

Rare earth fiasco

For years, industry experts have warned of China’s dominance of key raw materials in the automotive and other industries and of the consequences if the world’s second-largest economy turned off the taps.

This is exactly what China has done with rare earth elements, where it controls 70% of mining and 90% of global refining capacity, by imposing export controls in April in response to Trump’s tariffs.

Tariffs have been described as blunt instruments in trade that cause wide, fairly indiscriminate pain. But Xi Jinping’s response is highly targeted and designed to cause maximum hurt.

Magnets made with rare earth elements are used in anything with a motor in a car, from wing mirrors, to seats, oil pump sensors, air conditioning and speakers. As the clever folks at consultancy AlixPartners put it, “you can’t build a modern car without rare earths.”

Don’t worry, though, automakers and suppliers surely learned from supply chain shortages in the coronavirus pandemic, just like they said they had after the Fukushima disaster in 2011 and stockpiled loads of rare earth elements, right?

Not so much.

Apparently, many suppliers and automakers are in “full panic” mode as their supplies will run out in mid-July and lead to widespread shutdowns.

This may be why Trump was so keen on a phone call with Xi.

Tellingly, after the call, Trump said the rare earth issue needed to be resolved. The Chinese government did not even mention it.

BYD takes heat from rivals

Sometimes, it’s hard to stay friends when you’re the biggest automaker around.

BYD has come under fresh attack from rivals who claim that two of the No. 1 Chinese automaker’s hybrid models failed to meet emissions standards. That claim originally came from Great Wall Motors, who reported BYD to regulators back in 2023.

But over the weekend, a senior executive at fellow Chinese automaker Geely weighed in, saying his company had conducted its own emissions tests on BYD cars and reached the same conclusion.

A BYD executive denied the claims.

This latest spat between rival automakers and BYD comes amid signs that a long-running EV price war in China may be getting out of control.

Tensions between BYD and other Chinese automakers broke into the open last month when Great Wall chairman Wei Jianjun warned the price war was hurting profits across the sector.

China’s threat to Tesla

China’s automakers have already outdone Tesla by producing more affordable EVs, but now they are overtaking Elon Musk’s company in the race to produce self-driving cars.

Aside from China market leader BYD, China’s Leapmotor and Xpeng offer systems capable of highway and urban self-driving in $20,000 vehicles.

As my colleague Norihiko Shirouzu reports, BYD’s assisted-driving hardware costs are far lower than Tesla’s, according to analyses performed for Reuters by companies that dismantle and analyze vehicles for automakers. You can read about it here.

Rising competition from Chinese EV players is one of the top problems confronting the CEO of Tesla, where vehicle sales have tanked globally this year.

Fast Laps

Global ratings agency Moody's cut Nissan’s corporate family rating to Ba2 from Ba1 and said the Japanese automaker’s outlook is negative as it works to turn around its business.

Porsche said it has no plans to shift any part of its production process to the United States following a Bloomberg report saying the company was considering such a move to mitigate the effects of tariffs.

Vietnamese EV maker VinFast reported its sixth consecutive quarterly net loss as it continues to ramp up spending to boost sales volumes.

Tire maker Michelin will close a plant in the state of Queretaro in central Mexico by the end of this year.

Stellantis has started a voluntary redundancy plan for 610 workers at its Mirafiori plant in Turin, Italy.

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