Good morning! It’s Wednesday, January 8, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Pentagon Blacklists CATL For Chinese Military Ties
It’s a tough time to be an electric vehicle maker in America right now, as tax breaks for new vehicle sales are under threat, incentives to open new factories are in doubt and targets to sell more EVs are on the chopping block. It might be about to get a whole heap harder to actually build electric vehicles in America, though, as one of the world’s largest EV battery makers has just been placed on a Pentagon blacklist.
Chinese components manufacturer CATL currently provides EV batteries to automakers like Ford and Tesla, but now the U.S. government is warning against relying on the company thanks to its ties with the Chinese military, reports Business Insider. In a new report, the manufacturer has been designated a Chinese military company by the Department of Defense:
CATL said in a statement that it “has never engaged in any military-related business or activities, so this designation by the Department of Defense is a mistake.”
CATL is by far the biggest player in the global battery industry, which is dominated by China. The Ningde-based company is thought to control about 37% of the world’s battery market, compared with the 17% held by the runner-up, BYD, a fellow Chinese firm.
As a result, CATL is a crucial supplier for numerous Chinese and Western EV manufacturers.
The Western EV makers that rely on CATL aren’t small players either, as Ford is currently licensing the company’s designs to produce batteries in Michigan and Bloomberg reports that Tesla is CATL’s largest customer.
The blacklist doesn’t bring with it any additional sanctions on Chinese companies, but it does “discourages U.S. firms from dealing” with any entity on the list, adds Bloomberg:
It’s an approach that risks backfiring on Washington, according to Kishore Mahbubani, Singapore’s former ambassador to the United Nations, who called the latest addition “unwise.”
“The whole world will move towards relying on Chinese companies for a whole range of products, including companies like Tencent and CATL,” said Mahbubani, who’s also the author of Has China Won?
“If the US tries to decouple from Chinese companies and their global reach, the US is not just decoupling from China,” Mahbubani said. “It is decoupling from the rest of the world, too.”
The battery maker has been added to the blacklist in the waning days of Joe Biden’s presidency and on the eve of Donald Trump’s return to the White House. The incoming president has made no secret of his ambition to cut America’s reliance on Chinese manufacturing and research when he takes office, which may lead to increased sanctions on any company that finds itself on the Pentagon’s list.
However, as Tesla boss Elon Musk is expected to find an advisory role in the new government, we’ll not hold our breath for any tough measures being implemented against CATL while Tesla stands to lose so much.
2nd Gear: Trump Has Already Put Honda Off Expanding EVs
If banned battery suppliers weren’t enough to put automakers off entering the EV space, then the incoming administration might be. Just hours after unveiling its next-generation electric vehicles, Japanese automaker Honda revealed that president-elect Donald Trump’s stance on EVs has made it hesitant to expand its offering in America.
The “Home Alone 2” actor has repeatedly called for an end to EV sales targets and support for EV buyers across America, which has reportedly hit Honda’s confidence in the future of electric cars. The automaker will reportedly be “cautious” in its approach to electrification, reports Reuters:
Honda Motor will be cautious about starting production of new electric vehicles due to uncertainty about President-elect Donald Trump’s industrial policy, a senior executive of the Japanese automaker said on Tuesday.
Honda Representative Executive Officer Noriya Kaihara said at the CES technology conference in Las Vegas that the company would also be cautious about producing batteries in Canada.
At CES, the second-biggest Japanese automaker earlier unveiled prototypes of upcoming Honda 0 electric cars, including a SUV model that will be introduced in the North American market in the first half of 2026.
This isn’t the first time Honda has raised questions over its electric ambitions for America, as the company’s chief operating officer Shinji Aoyama previously commented on Trump’s plans to impose harsh tariffs on imported vehicles. On the election trail, the convicted felon proposed three-figure tariffs on cars imported from Mexico, which is where Honda currently builds the HR-V crossover.
Should such tariffs come into force, Aoyama said the automaker “may have to think” about shifting some production over to the U.S. Currently, Honda operates plants across states such as Ohio and Alabama. It’s at Honda’s Marysville Auto Plant in Ohio where the two new concepts will be assembled when they launch from 2026.
3rd Gear: BMW Sold More Luxury Cars Than Anyone Else
It’s the start of a new year, which means it’s time to see which automakers fared best in 2024. Stellantis didn’t have a great year, and reported that Fiat was the only brand it sold in America to post gains over 2024, while German automaker BMW fared much better over the past 12 months.
In fact, sales for the past year show that BMW was the best-selling luxury car brand over 2024, reports Automotive News. The automaker’s sales were up by almost nine percent over 2024, leading it to edge ahead of luxury rivals Mercedes-Benz and Lexus:
BMW said its U.S. sales rose 8.9 percent to 117,506 in the fourth quarter, allowing the German brand to finish the year up 2.5 percent at 371,346. Lexus had its best U.S. sales year at 345,669 to take second place, while Mercedes-Benz finished up 8 percent at 88,259 in the final quarter, and ended the year up 9 percent at 324,528, finishing third.
Other luxury brands reported mixed results for the year, with the segment rising 5.5 percent to 2,098,721, or 13 percent of the overall 16 million vehicle U.S. market, according to the Automotive News Research & Data Center. Jaguar, Land Rover, Lincoln, Cadillac, Genesis and Porsche also finished up for the year, while sales at Audi, Acura, Volvo, Infiniti and Alfa Romeo fell for the year, the data center said. Along with BMW and Lexus, Genesis, Land Rover and Porsche achieved record U.S. sales in 2024.
Both total luxury sales and the segment’s share of the overall U.S. market set annual records, the data center said. Luxury sales were last above 2 million vehicles annually in 2019, before the pandemic, but at the time represented 12 percent of what was then a 17.1 million vehicle U.S. market.
The German brand previously lost out on the luxury crown to Tesla, but the American EV maker has now been reclassified as a mass-market brand, explains Automotive News. Tesla didn’t have as positive a year as BMW, however, posting a drop in deliveries for the first time in more than a decade.
4th Gear: Ford Battery Plant Workers File For Union Election
The United Auto Workers union won historic contracts for workers employed by Ford, Stellantis and General Motors back in 2023, and now employees at the Big Three’s subsidiaries want a slice of the union pie.
Workers at a Ford battery plant that is operated in partnership with SK On have now filed for a union election, reports the Detroit Free Press. Workers at the Kentucky plant are hoping to join the UAW should the vote pass:
Workers at the battery plant south of Louisville have taken the next steps to join the UAW, noting safety concerns, worker health issues and lack of open communication from the company.
“I just hope that the company takes us serious, steps up to the plate, fixes these health and safety concerns, and actually puts a value on employees,” said Chad Johnson, a quality control worker at the BlueOval SK Battery Park who has worked there for nearly a year and a half. “We want something in black and white that’s legally binding between these two mutual parties, so that we all know where we’re at … there’s not all this gray area.”
The roughly $6 billion battery park, a joint venture between Ford Motor Co. and South Korean company SK On, is expected to start producing batteries for electric vehicles in Ford’s lineup at Kentucky 1, the first of its twin battery plants on site in 2025. A BlueOval SK spokesperson declined to offer additional details on if production has already started at the plant in Glendale or when it will start this year.
Unionization at the Ford and SK On site was on the cards back when the UAW was negotiating with Ford in 2023. Back then, the union wanted to secure automatic unionization rights for the facilities in Kentucky and Tennessee but were unsuccessful, the Free Press adds.
The UAW has made no secret of its desire to swell its ranks over the coming years. Off the back of its historic victories at Ford, Stellantis and GM, the union said it hoped to come back next time with a “big five” and president Shawn Fain has laid bare his ambitions to unionize plants run by the likes of Tesla and Hyundai.
