GM to invest $760 million to shift Ohio plant to EV parts

TOLEDO, Ohio — General Motors said on Friday it will invest $760 million at its Toledo, Ohio, factory to build drive units for electric trucks, the automaker’s first U.S. powertrain facility repurposed for EV-related production.

Th largest U.S. automaker currently builds GM’s six-speed, eight-speed and 10-speed rear-wheel drive and nine-speed front-wheel drive transmissions in a variety of Chevrolet, Buick, GMC and Cadillac at its 2.82-million-square-foot Toledo, Ohio, transmission plant that it has renamed Toledo Propulsion Systems.

Congress in August approved significant financial incentives for automakers to convert plants producing parts for gasoline-pore vehicles to electric models.

An auto trade group noted the bill sets aside “more than $15.5 billion in incentives and grants to ensure the United States is building automotive supply chains and a globally competitive battery manufacturing platform.”

“Once the plant is converted, it will produce GM’s family of EV drive units, which convert electric power from the battery pack to mechanical motion at the wheels,” GM said, adding the plant will produce transmission products while building drive units simultaneously during GM’s EV transition.

The Toledo facility employs about 1,500 people. Many autoworkers have expressed concerns about the shift to EVs and if it would impact current auto employment.

Gerald Johnson, GM executive vice president, said GM is looking for ways to increase EV capacity beyond its current goal of being able to build 1 million EVs in North America by 2025.

But hitting that target “would be outstanding. To do better would be astronomical,” Johnson said.

GM said last year it would increase its EV and autonomous vehicle investments from 2020 through 2025 to $35 billion, a 75 percent increase as it vows to stop selling gas-powered vehicles by 2035.

GM and LG Energy Solution said last month they are considering a site in Indiana for a fourth U.S. battery cell manufacturing plant for the companies’ Ultium joint venture expected to cost about $2.4 billion.

The U.S. Energy Department said in July said it plans to loan Ultium $2.5 billion to help finance construction of new lithium-ion battery cell manufacturing facilities.

Last week, GM said it would invest $491 million at its Marion, Ind., metal stamping operations to prepare the facility to produce a variety of steel and aluminum stamped parts for future products, including electric vehicles.

Tesla’s Texas push puts German plant on back burner

BERLIN — In an effort to get more electric vehicles and batteries out the door of its new plant in Austin, Texas, Tesla will shift resources away from a similar project in Berlin.

The EV maker has told local government officials in Gruenheide, Germany, that it still intends to open a battery factory there, where it also opened a vehicle plant this year, but the company now aims to ramp up battery production in Austin faster than planned.

The urgency to prioritize Texas is because of new U.S. tax rules under the Inflation Reduction Act that govern which electric vehicles can offer buyers a $7,500 tax rebate. The rules require that both the EV and its battery be produced in North America. As a result, Tesla has paused plans for a 50 gigawatt-hour battery factory next to its car assembly plant in Gruenheide.

But beyond its desire to qualify for the EV rebates, Tesla is also hustling to meet high U.S. demand for its vehicles. At the moment, the automaker faces a production bottleneck in Texas as it tries to produce enough batteries to keep up.

Panasonic recently said it will construct a new $4-billion battery plant 700 miles away in Kansas to supply the Texas auto assembly plant. But that project will likely take at least two years to come online.

Tesla is attempting to move some of its models to a more advanced battery, referred to as the 4680, that offers a 16 percent improvement in vehicle range compared with Tesla’s current 2170 battery packs.

But as it slowly ramps up 4680 production, the Austin plant is still using mostly 2170 batteries to get its popular Model Y into the hands of buyers.

The real push at Austin will be getting 4680 batteries to a high enough volume to support Tesla’s planned launch of the Cybertruck there next year. That electric pickup has been delayed so Tesla can meet the unrelenting demand for its other products — with batteries and battery materials being the bottleneck.

In a related move, Tesla now plans to construct a battery-grade lithium hydroxide refining operation in either Texas or in Louisiana, according to Reuters, citing an application filed with the Texas Comptroller’s Office.

The project would allow Tesla to process “raw ore material into a usable state for battery production,” according to the application.

The company has characterized that step as a way to secure its supply line for battery production.

Fitch Ratings predicted in a letter that other automakers will follow Tesla’s lead on in-house lithium refining.

“We believe that this project by Tesla is of note, as it showcases the growing expediency of bringing upstream operations in-house in order to insulate firms against lithium price volatility,” Fitch said.

But Fitch also noted that Tesla’s plans are being driven by the new U.S. EV tax rules.

The Inflation Reduction Act, it said, “has driven automakers to source EV battery metals from regionally based producers and refiners. This is because the bill has introduced a critical metals policy to its EV tax credit, requiring that 40 percent of metals included in EV batteries must be extracted or processed in North America, or in a country that the U.S. has a free trade agreement (FTA) with.”

While regional lithium and nickel mining projects are expected to grow exponentially over the next decade, Fitch pointed out, there is insufficient refining capacity in North America, meaning that these metals are exported to Asia for refining before being returned for use in EV battery manufacturing.

“Tesla’s construction of a domestic refining facility will enable the firm to reduce the operational costs incurred from using refining facilities abroad, while also enabling their vehicles to qualify for the EV tax credits” in the new rules.

Lithia Motors returns to Wisconsin with purchase of 5 dealerships, sale of 2 stores

Growing Lithia Motors Inc., which has indicated it is targeting further Midwest expansion, did just that with its recent acquisition of five dealerships from Wilde Automotive Group in Wisconsin.

Lithia on Sept. 12 acquired Wilde East Towne Honda in Madison, Wilde Toyota in West Allis and Wilde Chrysler-Dodge-Jeep-Ram, Wilde Subaru and Wilde Honda, all in Waukesha. Lithia said last week that the acquisition is expected to add $625 million in annual revenue.

Lithia has had a presence in Iowa since 2006, the auto retailer confirmed, with nine stores. In 2021, Lithia barreled into Michigan when it acquired the Suburban Collection and 34 dealerships, mostly in the Detroit area.

Most of the Midwest is part of Lithia’s North Central Region 3, which includes North Dakota, where Lithia has two dealerships.

“Even though we’re in Detroit, we’re really not into the other major population areas like St. Louis and Minneapolis,” Lithia CEO Bryan DeBoer told Automotive News last year. “We’ll probably continue to look for partners in those areas.”

Four of the five Wilde dealerships are in suburban Milwaukee, while the fifth store is in Madison, Wisconsin’s capital.

The acquisition marks the auto retail giant’s return to Wisconsin. Lithia briefly owned a Chrysler-Jeep-Dodge store in La Crosse from 2006 until 2008, according to its annual reports.

Lithia in July said it had acquired dealerships this year that were expected to generate $2.3 billion in annual revenues.
“The pipeline of opportunities to continue network expansion remains robust,” Lithia said in a news release last week.

It wasn’t clear if the Wisconsin stores were Wilde Automotive’s last dealerships. In August, the affiliated Wilde Automotive Family sold its three Florida dealerships to Morgan Automotive Group.

Wilde Automotive, of Waukesha, ranks No. 79 on Automotive Newslist of the top 150 dealership groups based in the U.S., retailing 12,953 new vehicles in 2021.

The Wilde Automotive acquisition was Lithia’s first since it bought a California Ford store in July, the company confirmed.

Lithia also was awarded a Ford open point and opened Ford of Downtown LA in Los Angeles in April.

While Lithia is acquisitive, last week it said it also expects to complete dealership divestitures totaling $625 million in annual revenue in 2022. Lithia has already sold several stores this year and last week confirmed two separate September dealership sales.

On Sept. 14, the auto retail giant sold Lithia Chrysler-Dodge-Jeep-Ram-Fiat of Eureka to Harper Motors, a Lithia representative confirmed.

The following day, Lithia sold DCH Gardena Honda in California to David Wilson Automotive Group, one of the largest privately held dealership groups in the country. Lithia acquired the Honda dealership when it bought DCH Auto Group Inc. in 2014.

David Wilson Automotive, of Orange, Calif., ranks No. 10 on Automotive News‘ list of the top 150 dealership groups, retailing 50,425 new vehicles in 2021.

Lithia of Medford, Ore., ranked No. 2 on that list.

Lithia also sold a Chevrolet dealership in Idaho earlier this year, the company confirmed to Automotive News.

Lithia sold Chevrolet of Twin Falls on Feb. 7 to Rydell Co., according to Greg Krueger, partner at Sterling Mergers and Acquisitions in Boise, Idaho. Krueger’s firm represented Lithia in that sale.

Lithia Motors sells Stellantis and Honda dealerships in September deals

Lithia Motors Inc., which continues to gobble up dealerships, including acquiring five in Wisconsin in September, also sold one dealership in Northern California and another in Southern California this month, as it sheds some stores in a “network optimization” plan.

The Medford, Ore., auto retailer sold Lithia Chrysler-Dodge-Jeep-Ram-Fiat of Eureka on Sept. 14 to Harper Motors, a Lithia representative confirmed.

The store was renamed Eureka Chrysler-Dodge-Jeep-Ram-Fiat. Eureka is located about 100 miles south of the Oregon border.

Harper Motors also owns a Ford-Kia dealership and Honda and Toyota stores in Eureka, said Joe Ozog, president of Ozog Consulting Group in Scottsdale, Ariz. Ozog Consulting Group represented Lithia in the Stellantis dealership sale.

A day after that sale, on Sept. 15, Lithia sold DCH Gardena Honda to David Wilson Automotive Group. The dealership was renamed Gardena Honda. Gardena is south of Los Angeles.

Jay Francis, an operating partner at several David Wilson Automotive dealerships, Ozog said, is the operating partner at Gardena Honda. Ozog said Francis has equity in the dealership, but he didn’t specify how much.

Ozog Consulting also represented Lithia in the Honda dealership transaction.

“We understand Lithia’s growth strategy and our expansion plans fit perfectly with theirs,” Wilson said in a statement.

Lithia had owned the dealership since 2014, part of Lithia’s purchase of DCH Auto Group Inc. in 2014, Ozog and Lithia confirmed.

David Wilson Automotive now has 17 dealerships across California, Nevada and Arizona, according to its website. The group also owns a Toyota dealership in Mexico.

David Wilson Automotive, of Orange, Calif., ranks No. 10 on Automotive Newslist of the top 150 dealership groups based in the U.S., retailing 50,425 new vehicles in 2021.

Both divestitures followed Lithia’s acquisition of Wilde Automotive Group in Wisconsin on Sept. 12, Lithia confirmed.

Lithia, which has sold several stores this year and said this week it expects to sell dealerships in 2022 representing $625 million in annual revenue, also recently confirmed it divested a Chevrolet dealership in Idaho this year.

The auto retail giant sold Chevrolet of Twin Falls on Feb. 7 to Rydell Co., Greg Krueger, partner at Sterling Mergers and Acquisitions in Boise, Idaho, confirmed. Krueger’s firm represented Lithia.

The dealership was renamed Twin Falls Chevrolet. Twin Falls is southeast of Boise. Rydell is building a new Chevrolet facility next to its Subaru dealership in Twin Falls, Krueger noted. Lithia also sold a North Dakota Toyota store to Rydell in July.

Lithia ranks No. 2 on Automotive News‘ most recent list of the top 150 dealership groups, retailing 260,738 new vehicles in 2021.

City transportation officials oppose Ford, GM self-driving vehicle petitions

WASHINGTON — A coalition of 92 major cities and transit agencies is urging NHTSA to deny separate requests from Ford Motor Co. and General Motors to deploy a limited number of self-driving vehicles without certain human controls or functions on U.S. roads.

In comments submitted to the agency Wednesday, the National Association of City Transportation Officials said it strongly opposes both automakers’ requests for temporary exemptions from certain federal vehicle safety standards.

The association — whose member cities include Detroit, Phoenix and San Francisco — argues in part that forcing self-driving vehicles “into the existing regulatory scheme is inappropriate” and that NHTSA instead should use its rule-making authority to establish new performance standards for those vehicles.

It also said the automakers’ petitions do not meet the legal standard to receive an exemption and that the exemptions aren’t necessary to achieve their claimed public benefits.

“If NHTSA should decide to grant the exemption, then NHTSA must also strengthen its conditions for operations, use and reporting,” the association said in the comments. “Updated testing conditions and reporting standards are essential to advance the safe testing of AV technology while serving the public interest and avoiding potential negative impacts on congestion, equity and mobility.”

The automakers are seeking the exemptions so they can deploy up to 2,500 self-driving vehicles without traditional driving controls or features.

Ford is seeking an exemption from seven safety standards to deploy vehicles that would be used to support mobility services such as ride-sharing and package delivery, according to its petition.

In its comments to the agency, Ford said the exemptions are necessary “to provide relief from current compliance barriers that require human-based driver controls and information.”

“These exemptions enable an AV to be designed in a way that minimizes the potential for human occupant error and interference in the automated driving task,” wrote Emily Frascaroli, global director of Ford’s automotive safety office. “As outlined in the Ford petition, the Ford [automated driving system] replaces the need for a human driver and ensures the safety intent and vehicle-level performance of the exempted regulations are satisfied.”

GM is seeking an exemption from six safety standards to deploy its Origin vehicle, which is built for fleet-controlled ride-share and delivery services. The Origin is not equipped with manual controls or features such as a steering wheel, pedals, manual turn signals and mirrors, according to the petition.

In combined comments to NHTSA, GM and its self-driving technology unit, Cruise, said “enabling the deployment of the Origin with appropriate reporting conditions will allow NHTSA to obtain valuable data to support a better understanding of autonomous vehicle operations, the impact of AVs on the transportation system, and public acceptance and use of AVs — with the longer-term goal of informing NHTSA’s understanding about how to frame appropriate Federal Motor Vehicle Safety Standards.”

In June, a self-driving vehicle operated by Cruise was involved in a crash in San Francisco that resulted in injuries to occupants in both vehicles. NHTSA said it opened a special investigation into the incident.

The agency has not yet issued a decision on either petition.

In July, former NHTSA chief Steven Cliff said the agency would “carefully examine each petition to ensure safety is prioritized and to include considerations of access for people with disabilities, equity and the environment.”

Hyundai, Nissan, Honda and Toyota dealerships sell across 4 states

Three auto retailers added to their dealership portfolios with the purchases of single stores in the first and third quarters, while a former dealership executive general manager and partner bought their first dealership in a second-quarter purchase.

Here’s a look at the deals involving import dealerships and stores in Indiana, New Jersey, California and Alabama.

Barnes Crossing Auto acquires Duell’s Evansville Hyundai in Indiana

Joe Marshall, owner of Barnes Crossing Auto Group of Tupelo, Miss., last month bought Duell’s Evansville Hyundai in Indiana from Doug Duell and Amish Patel.

The dealership is now named Hyundai of Evansville.

The sale was final Aug. 3, the same day Duell and Patel sold their Evansville, Ind., Kia dealership to Lou Fusz Automotive Network.

Duell, now retired, told Automotive News that he acquired the Hyundai dealership in 2011. It was Indiana’s top-volume Hyundai dealer in new-vehicle sales for two of the past four years, a Hyundai spokesman confirmed.

Barnes Crossing has more than a dozen franchised dealerships selling Buick, Chevrolet, GMC, Ford, Hyundai, Kia, Mazda, Mitsubishi, Toyota and Volkswagen vehicles, Marshall said. The group also has one used-vehicle store.

“I have a big Hyundai store in Tupelo, Miss., a really good Hyundai store in Columbia, Tenn., so I like the Hyundai brand,” Marshall told Automotive News.

Marshall and his then-partner Terry Kilpatrick formed Barnes Crossing in 2010, when they bought their first dealership in Tupelo. The group, now owned by Marshall, has dealerships in Alabama, Louisiana, North Carolina and Tennessee, Marshall said.

Paul Kechnie and Mark Shackelford, the Texas and Midwest partners for Performance Brokerage Services, a buy-sell firm in Irvine, Calif., facilitated the transaction.

Integrity Automotive acquires Nissan store

Integrity Automotive Holdings of Mamaroneck, N.Y., expanded again with the July 25 purchase of its third Nissan store, buying a dealership in Springfield, N.J., from World Auto Group and Chris Preziosi.

Jeffrey Weiner and Michael Ianelli of Integrity Automotive bought Nissan World of Springfield in New Jersey, which they renamed Nissan City of Springfield.

It’s the third Nissan store acquired by Integrity Automotive and the second purchased from World Auto, according to Weiner, Integrity Automotive’s CEO. Integrity Automotive in May 2021 purchased a Nissan store in Red Bank, N.J., from World Auto.

The Integrity group now has five dealerships spread throughout the New York metropolitan area, including New Jersey, with two additional acquisitions in progress that the company hopes to finalize by year’s end, Weiner said.

Weiner said the group chose to buy the Springfield Nissan store because of its location.

“Route 22 in Springfield, N.J., is a great place to sell cars,” Weiner said. “It’s a high-traffic area and we expect it to be one of the best-performing Nissan stores in the country.

“It’s a really great store with everything going for it.”

Springfield is about 25 miles west of the New York state line.

Weiner, who is dealer principal of the new Nissan store, said that while they will add staff, no other major changes are planned.

Former general manager and partner buy Honda store

Veteran dealership executive general manager Vladimir Rajcic and co-owner Bob Kashani purchased their first new-car dealership, RocketTown Honda in Lompoc, Calif., in June.

The dealership’s name refers to the city’s nickname, based on the nearby Vandenberg Space Force Base, formerly an Air Force base. Lompoc is in Santa Barbara County.

“I was looking for a Honda dealership,” Rajcic said in a phone interview, adding that he has experience running Honda stores. Rajcic said he previously worked for Rohrman Automotive Group of Lafayette, Ind., at dealerships in Illinois representing several different brands.

The Honda transaction closed June 15 and the seller was dealer Chris Zikakis. RocketTown Honda was his only dealership, according to John Chisholm of dealership brokerage firm Dealer Solutions Mergers and Acquisitions, with U.S. headquarters in Stuart, Fla.

Kashani, a real estate developer, owns a substantial but minority share of the Honda store, said Chisholm, vice president of Canadian sales at Dealer Solutions Mergers and Acquisitions since January. He previously was the company’s chief development officer.

Chisholm represented the seller in the transaction, but said he worked closely with both parties.

“A lot of stars lined up” to make the deal happen, Chisholm said, including “the price of the real estate [and] the total cost of the package.”

Bill Penney adds Toyota dealership

Bill Penney Motor Co. in the first quarter expanded its holdings in Jasper, Ala., buying Scott Crump Toyota from Scott Crump, according to the Daily Mountain Eagle newspaper.

The transaction closed on Feb. 22, Southeast Toyota Distributors, the distributor for Toyota stores in five Southeast states including Alabama, confirmed to Automotive News.

The group renamed the dealership Bill Penney Toyota of Jasper. Jasper is northwest of Birmingham.

This marks the group’s third store in Jasper and its second Toyota dealership, with the other in Huntsville, Ala.

Bill Penney Motor, via partners Zack Penney, Hunter Johnson and Ryan Hensley, also acquired Chrysler-Dodge-Jeep-Ram of Jasper and Ford of Jasper in Alabama from Automotive Group of Jasper. Bill Penney Motor also has a Mitsubishi store in Huntsville, according to its website.