$3.28 million in 2021. $1.97 million in February. Same Speedtail.

Good morning. Last week I drove a Porsche Panamera down to Miami, with a night in Charleston to break the trip into two days, and it was a far nicer drive than I-95's reputation suggests. Somewhere past Titusville, about a dozen miles from the Kennedy Space Center runway where McLaren ran a Speedtail prototype to 250 mph more than 30 times, I was holding a respectful 85. Today one of the 106 Speedtails crosses the block, and its price history is the most interesting thing in this issue.

In today's newsletter, we'll get into:

Let’s roll.

McLaren built 106 Speedtails, matching the original F1 production run, and every one was sold before the car was revealed in October 2018. U.S. base price was about $2.25 million, and most owners added six figures of options on top. In 2021, a few low-mile examples traded above $3 million.

Chassis 36 tells the rest of the story. It was the first Speedtail ever offered at public auction, and in January 2021 it sold for $3,277,500 with fewer than 50 kilometers on the clock. This February, the same car sold again in Miami with 216 miles for $1,974,000. That is $1.3 million in five years, or roughly $7,000 for every mile its second owner added. Most people would call that an expensive lease.

Today's car, #90, is silver with a black roof over white and blue leather, showing 157 miles. Power comes from a twin-turbo 4.0-liter M840T V8 working in parallel with an electric motor for a combined 1,035 hp and 848 lb-ft, sent to the rear wheels through a seven-speed dual-clutch. The driver sits in the middle, ahead of two passengers, the way the F1 did it. Its 12.8-second run from zero to 186 mph is still the quickest of any McLaren road car, W1 included.

The selling dealer bought it this year and is offering it from Costa Mesa as part of a 15-car collection, with the gold-finished tool kit, a clean Carfax, and a Montana title. Montana registration is popular with exotics for one reason, and it isn't the scenery: the state has no sales tax.

Homework for bidders: many U.S. Speedtails run under the federal Show or Display exemption, which typically caps use at 2,500 miles a year. Confirm this car's status before planning a road trip.

As of Sunday afternoon, bidding stood at $1,505,000, about $745,000 below what the car cost new before options. The auction closes this afternoon at 2:20 PM ET.

My call: I think #90 lands between $2.05 million and $2.20 million. Silver over a black roof is handsome but conservative next to the bespoke paint jobs that set the 2021 records, and 157 miles keeps it in the low-mile group without making it the lowest.

On Friday, Volvo Cars posted an operating loss of 5.6 billion Swedish kronor, about $564 million, against a 6.4 billion kronor profit in the same quarter last year. Revenue fell 22.6% to 66.9 billion kronor, roughly $6.7 billion. Volvo is cutting another 2,500 jobs, on top of the 3,000 it announced last year, and launched a new 5 billion kronor (about $500 million) savings program. The stock fell about a quarter in one session, to its lowest level ever.

Retail sales dropped 10.7% in the quarter to 141,609 cars. China fell more than 40% and the Americas fell 14%. Europe grew 2%, and fully electric sales rose 29%.

The line everyone is repeating came from CEO Håkan Samuelsson, who told CNBC that "selling global cars developed in Europe and China will not work." He meant in China, and for every Western brand, not just Volvo. His plan is a more independent China region, shared platforms with parent company Geely, and infotainment and driver-assistance software developed in China, for China.

There is some irony here. Geely bought Volvo from Ford in 2010, so a Chinese-owned company is now concluding that it needs to be more Chinese to sell cars in China. Chinese buyers have moved to domestic brands that update software faster and price lower, and a Scandinavian design premium no longer covers that gap.

The U.S. is a smaller problem but still a problem: tariffs and the loss of EV incentives are weighing on demand, and most Volvos sold here still cross an ocean first despite the plant in Ridgeville, South Carolina. Škoda CEO Klaus Zellmer takes over from Samuelsson no later than October 1, 2027. Our watch-number is 5 billion kronor: if the new savings program lands on schedule, it shows up in the 2027 margins Zellmer inherits.

Here is the number that explains the Speedtail. The power needed to push a car through air rises with the cube of speed. Going from 200 mph to 250 mph is a 25% increase in speed, but it takes about 95% more power just to overcome drag. Every small source of turbulence costs real horsepower, so McLaren went hunting for all of them.

Start with the front wheels. A spinning wheel is a fan. The bottom of the tire is stationary against the road, but the top moves forward at twice the car's speed, so at 250 mph the top of the front tire is traveling at roughly 500 mph relative to the ground. Open spokes churn the air inside the wheel arch like paddles, creating turbulence that leaks out the side of the car and adds drag.

The Speedtail's answer is a carbon-fiber disc over each front wheel that does not rotate. The wheel spins behind it, and the cover stays put because it's anchored to the non-rotating side of the hub. Oncoming air sees a smooth, flat face instead of ten moving spokes. Ducts in the covers still let brake heat out, in a steady flow rather than a turbulent one.

The rear ailerons solve a similar problem. A conventional hinged flap leaves a gap and a small step where it meets the body, and both disturb the airflow. On the Speedtail, the ailerons are part of the one-piece rear clamshell, molded from flexible carbon fiber, and hydraulic actuators bend the surface itself. There is no hinge line and no gap. The Wright brothers controlled their 1903 Flyer the same way, by warping the wing, before hinged ailerons became the standard. Under hard braking, the same surfaces rise to act as air brakes.

Then there's Velocity mode, which the driver selects for top-speed runs. It lowers the car by 35 mm, retracts the rearview cameras into the body, and sets the aileron angles for minimum drag. Side mirrors typically account for a few percent of a road car's drag, which is why the Speedtail doesn't have any. Even its 202-inch length, about a Chevy Tahoe's, is aero: a long, gently tapering tail lets air rejoin behind the car with less turbulence.

In 2023, General Motors signed a long-term deal with VAC, a century-old German magnet maker, to build rare-earth magnets for GM's electric motors in the United States. VAC's U.S. unit built a plant worth more than $500 million in Sumter, South Carolina, and opened it late last year. Capacity is just under 2,000 metric tons of magnets a year, and 90% of that output was earmarked for GM, with the rest going to the U.S. government.

On July 1, GM terminated the agreement. VAC started arbitration a few days later, seeking damages. The dispute surfaced last week in securities filings from GM and from Energy Fuels, which agreed in June to buy VAC for $1.9 billion and now says that price could change depending on the arbitration.

Wednesday we covered GM's strong third quarter. A filing from the same week shows where part of the EV pullback's bill is landing. GM hasn't said why it left the VAC deal, but after federal EV incentives were withdrawn, GM pulled back on electric vehicles and took a $6 billion charge in January to unwind EV investments. Fewer EVs means fewer traction motors, and fewer motors means fewer magnets.

A typical EV traction motor uses somewhere around one to two kilograms of neodymium-iron-boron magnet. At that rate, 2,000 metric tons a year covers something like a million motors or more. GM's EV volume today is a fraction of what it planned when it signed in 2023, so a plant sized for that plan now has its largest customer gone and most of its capacity unclaimed.

Taxpayers have money in this too: a $111.9 million South Carolina tax credit and more than $200 million from the Defense and Energy departments, against a promise of 300 jobs.

GM still has domestic magnet deals with MP Materials and Noveon, the latter for full-size pickups and SUVs, since gas trucks use rare-earth magnets too. What it dropped was the contract sized for its EV ambitions.

Our watch-number is 2,000 metric tons: how much of it VAC can sell to someone else, and how much of the difference the arbitration assigns to GM.

That's a wrap. See you Wednesday — same inbox, lower gear.

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