Auto Industry News: U.S.-China Trade War Intensifies, Ford Emissions Scandal Heats Up, and VW ID.3 Paints A Profitable Future for EVs

The U.S.-China trade war flares up again after negotiations between the two nations appears to have ended. Ford is in more hot water related to its recent emissions scandal. The VW ID.3 already appears to be smashing success in Europe after only 24 hours. And with Lewis Hamilton continuing his Spanish domination while Brad Keselowski wins his third race of the season, it’s been a wild week in auto news.

Let’s get right into it.

U.S.-China Trade War Back On?

Just when it seemed like heat from the U.S.-China trade war was dissipating, it appears the U.S. threw some gasoline on the fire this week.

After talks between the two nations failed to reach a compromise, the U.S. imposed tariffs on $200 billion worth of Chinese goods, increasing from the previous 10-25% levied last summer. Affected products range from meat and fish, to chemicals, textiles, electronics, metals, and tools. (You can view the entire 192-page list, here.)

Beijing responded to the new round of tariffs by expressing, “deep regret over the development,” assuring it would take “necessary countermeasures,” according to CNN. Although the nation gave no indication as to what those countermeasures would be, one possible response could be to target big American companies like Nike, Boeing, Tesla, and GM with heightened regulatory scrutiny and customs delays. “We hope the United States will meet us halfway and work with us to resolve existing issues through cooperation and consultation,” China’s Ministry of Commerce said in a statement.

Despite China’s disappointment in the lack of negotiation progress and raising of tariffs, the White House’s position on the matter is clear. President Trump has continually railed against China for what he calls unfair trade practices, citing issues with intellectual property and technology transfers as key reasons behind the standstill. Trump has even indicated on Twitter that the trade penalties would get worse before they get better, indicating he’d impose tariffs on $300 billion worth of more goods.

Despite Trump’s lofty expectations for the hypothetical deal, experts from around the world are not as optimistic, seeing trouble for both nation’s economies.

“The tariff increase inflicts significant harm on U.S. industry, farmers, and consumers,” said Jacob Parker, vice president of the U.S.-China Business Council, a trade group representing American companies’ interests in China. “It will decrease the competitiveness of American companies, reduce the efficiency of their global supply chains, and reverberate through the U.S. economy. Pure and simple, this is a tax on the American consumer,” he added.

“There is no greater threat to global growth than a trade war between China and the United States,” French Finance Minister Bruno Le Maire told a local news channel. “It will destroy jobs.”

Even Larry Kudlow, the White House’s economic advisor took a “both sides” approach on the issues this Sunday during an appearance with Fox News host Chris Wallace, stressing that while both nations will suffer adverse effects from the trade war, “this is a risk we should and can take without damaging our economy in any appreciable way.”

For now, China seems to be holding firm on its position, leading Trump to tweet that Beijing might be doing so in the hopes of a Democrat winning in 2020. In the meantime, both nation’s consumers will have to deal with the fallout of the U.S.-China trade war for the time being, at least until the upcoming G20 Summit when Trump and Chinese leadership will meet again.

Ford Emissions Scandal Continues To Heats Up

When it rains, it really pours, huh? More bad news for Ford this week.

After the industry giant announced a few weeks ago that it was subject to a U.S. Justice Department investigation into the company’s emissions certifications on vehicles dating back to 2017, Ford is now facing an additional class-action lawsuit.

The suit alleges that Ford knowingly installed devices to manipulate fuel economy ratings in its 2019 Ford Ranger models, a major issue considering the company advertised the 2019 Ranger as “the most fuel efficient gas-powered midsized pickup in America.”

Steve Berman, managing partner of Hagens Berman, one of the firms that filed the lawsuit, called out this deceptive advertising in a statement, claiming “Ford knew that consumers pay a premium for fuel efficiency and that less fuel burned means less emissions, and therefore more profits. Its own employees questioned its fuel efficiency calculations. Ford chose to blatantly ignore the clear warning signs it was given.”

“There is no question that Ford used the fuel efficiency ratings as a sales tool to entice consumers into purchasing the 2019 Ford Ranger,” the lawsuit continues. “By cheating in the certification testing, and providing a mileage cheat device in the vehicles, Ford made its Ranger trucks more appealing and competitive in the marketplace.”

While Ford did previously notify the EPA about an outside firm’s investigation into its fuel economy and testing standards, it has yet to release the results of those external investigations. However this shakes out, it’s looking like Ford has plenty of bad news to deal with when it comes to fuel economy and emissions issues, one of the main factors in the growing popularity of electric vehicles.

Speaking of which…

New VW ID.3 Bags 10,000 Preorders in 24 Hours

It looks like Volkswagen’s brand-new ID.3 electric car is going to be a hit, at least if pre-orders are to be believed. An incredible 10,000 customers ordered their very own model of the upcoming electric hatchback in just 24 hours.

Called the ID.3 because it’s what the company considers as its third major evolution after the Golf and the Beetle, the base model will cost around $33,600 ahead of its 2020 release.

While those numbers fall well short of Tesla’s 276,000 pre-orders for the Model 3, it’s clear the market is on board for big companies producing electric vehicles. Industry giants like Nissan, GM, Audi, and Honda have all recently dipped their toes into the electric car market as well, with next-gen concepts in the works.

The ID.3 base model comes fully loaded with top-of-the-line features and three different battery options, offering 205 miles, 260 miles, and 340 miles respectively. It also comes with a full warranty covering the battery over the first eight years, 100,000 miles, or battery depreciation to 70 percent of its original capacity.

While the U.S. market won’t be getting the ID.3, it will get its own model, the I.D. Crozz in 2020. VW even announced plans to open a massive plant in Chattanooga, Tennessee to serve as its North American electric vehicle hub.

Studies show that the popularity of EVs has grown by 81 percent since 2017, showing a clear trend that auto industry giants would be smart to get on board if they want to stay relevant.

Around the Circuit

Formula 1 Spanish Grand Prix

Mercedes continues its historic dominance this season with Lewis Hamilton’s first-place finish in Spain, and teammate Valtteri Bottas taking second. Red Bull’s Max Verstappen snagged third, while Ferrari’s Sebastian Vettel and Charles Leclerc took fourth and fifth respectively.

“I have to put it down to this incredible team,” said Hamilton after the race. “This is history in the making to have five one-twos – I’m proud of that and proud of everyone’s hard work.”

NASCAR

Overcoming 8-to-1 odds ahead of the Monster Energy Cup Series at Kansas Speedway and the tragic passing of his long-time mentor, Mike Mittler, to cancer, Brad Keselowski and Ford finished ahead of Alex Bowman of team Chevy and Eric Jones of Toyota, for his third win of the season so far.

It was an awful day for Kyle Busch, however, who appeared to take the lead after a caution with 50 laps left but was sent to the rear after picking up a costly pit box penalty. Busch was not pleased when he got the news via crew radio.

Crew: “You drove through too many boxes on entry.”

Kyle Busch: “I swear, anytime you say anything you get sh*t handed to you. But yet, others do it and it ain’t for them.”

Adam Stevens (#18 crew chief): “I counted the boxes bud. We damn sure drove through four boxes coming in.”

He ended up finishing 30th, ending his record-tying streak of 11 consecutive top-10 finishes.

Next up for drivers is Charlotte Motor Speedway for the Monster Energy All-Star Race, a non-points invitational, on May 18.