Foxconn in Ohio

Monarch Tractors–which is located in Livermore, California, which is about 45 minutes east of Mountain View so it is Silicon Valleyesque yet still has something of the region’s former agricultural glory about it—has developed an electric tractor.

The MK-V, which produces up to 70 hp, and is fitted with a swappable battery that has a runtime of ~10 hours, is described as being “smart.” There is a screen on board that provides the ability to access live video, weather and other farming-related information.

But what is even more interesting is that it is “driver optional.”

The tractor can be operated remotely.

Apparently your favorite local restaurant isn’t the only place that has trouble finding workers.

The MK-V can mitigate some of that labor shortage for ag.

Also interesting is the company that has just signed on to manufacture the tractors for Monarch: Hon Hai Technology, which is better known as “Foxconn.”

The tractor is scheduled to go into production at Foxconn’s facility in Lordstown, Ohio.

Foxconn acquired the factory last May from Lordstown Motors. Foxconn is to build the Lordstown Endurance electric pickup in the plant.

And in 2024 the Fisker Pear, an EV with a presently intended starting price of $29,900.

No matter how the MK-V, Endurance or Pear do, Foxconn will undoubtedly do well.

About Those (Absent) Auto Ads

By Gary S. Vasilash

Some 41% less was spent by automakers on national TV advertising in July 2022 compared with July 2021 according to information cited by MediaPost.

The MediaPost article points out, “Without the Olympics, NBA Finals and Stanley Cup (which all took place during at least part of July last year), TV ad spending was down for automakers. . . .”

Fair point, because ads for OEMs during sporting events are absolutely ubiquitous.

However, there is another factor that probably plays a bigger role I the absence of ads:

The lack of product to sell.

According to Cox Automotive, the U.S. auto industry’s days’ supply of vehicles is in the mid-30s, a fraction what is ordinarily the norm.

Honda had just 21 days’ supply on dealer lots.

The point is, it makes very little sense to advertise products that people can’t buy.

Sure, there is something to be said to maintain brand awareness, but if there are ads that are extolling all of the wonderful features of a vehicle that is unicorn-like in its available existence, then the potential consumer is going to be highly annoyed (especially when that person tries to be sold something completely inappropriate by a dealer: guess who certainly won’t go back to that store and who is likely not to shop that brand?).

So sporting notwithstanding, the issue of sparsely available vehicles on dealer lots is a massive roadblock to commerce.

Tesla’s Loyalists

By Gary S. Vasilash

Tom Libby, associate director and loyalty principal, S&P Global Mobility, thinks that what are ordinarily considered “conventional” or “traditional” automakers have a problem. This isn’t a problem that happened yesterday or last week. It is a problem that has been there for a few years now. A problem that execs at those companies talk about a lot and have made efforts—and for a long time these efforts were not much beyond lip-service—to address it. A problem that is now garnering sufficient attention, though results will vary.

The problem is Tesla.

Tesla vis-à-vis owner loyalty.

Libby charts owner loyalty to a brand. With regard to luxury brands including BMW, Mercedes, Audi, Lexus and Tesla, owner loyalty has been declining. Yet Tesla’s decline still puts it in a position that is much higher than the others. People who buy a Tesla often by another Tesla. The same isn’t as much the case with others. Tesla even takes market share from a number of mainstream brands, as well.

The loyalty rate for the Tesla Model 3 this past March was 76.6%, the sort of figure that program managers at other OEMs wish they had.

Libby says, however, that the Porsche Taycan, which has been available on the market for a few years and the Mercedes EQS, a new entrant, are gaining loyalty.

But if you take into account all of the other models being offered by other OEMs—remember: both luxury badges and well as mainstream—then the dominance of Tesla is rather astonishing.

A question that arises is whether, as other OEMs come out with more-compelling EVs (e.g., while the Cadillac LYRIQ has much to be said for it, remember that GM also foisted things like the Spark EV on the market as though it had relevance when things like the Model S and Model X were on offer: not that there was cross-shopping between those two Teslas and the tiny Chevy, but keep in mind that people were aware of what was being put out there by whom, so Tesla gained share of mind) whether Tesla’s loyal following will peel off.

Let’s face it: there is something to be said about gravity.

You can see the conversation with Libby on this edition of “Autoline After Hours” with “Autoline’s” John McElroy, Joe White of Reuters and me here.

Prologue to Honda’s Prologue

When American Honda sent out a news release early this month reporting on its Q2 sales, the headline affixed is:

“American Honda Sales Challenged by Supply Issues”

“Challenged” is, if nothing else, a euphemism for, oh, crushed.

In Q2 the sales of its cars were down 56.5% and trucks off by 47%, for a combined drop of 50.7%.

And realize that this is in the context of Q2 2021, which still wasn’t exactly a banner period in the U.S. auto industry.

Honda faces some issues going forward because it is a company with superb expertise in internal combustion, and it appears as though while gasoline-burning engines aren’t going to suddenly disappear, there will be a decided decrease in the numbers sold, a consistent drop-drop-drop in the near future.

Honda will have an electric SUV in 2024, the Prologue.

It is based on the General Motors Ultium platform.

Which goes to the point of its expertise in engines, but not so much EVs.

Honda is trying to drum up interest in the vehicle by doing things like announcing that it is “the first Honda model designed primarily through virtual reality visualization technology.”

  1. Honda isn’t the only OEM to use VR
  2. So what?

According to Marco Tan, VR and CG designer at Honda Design, “By simulating and evaluating colors, materials and even lighting in a virtual 3D environment we were able to explore possibilities that took styling to a higher level.”

Undoubtedly it was an aid, but eventually the Prologue needs to exist IRL.

Did you ever buy a vehicle because you knew how it was designed?

Honda plans to have its own EV architecture underpinning its models in 2026.

Then, in 2027 a series of “affordable” EVs co-developed with GM.

If the future is EVs, one might conclude that the future of Honda might have more than a working relationship with GM.

Magna’s Massive Reach

By Gary S. Vasilash

When the phrase “the company started in a garage” is used, odds are the conclusion is that the company in question is based in Silicon Valley, which is somewhat an odd mental leap because, well, garages tend to be places where work is done on steel not silicon.

Magna had its start in a garage in 1950. Yes, bending metal.

But today it is a $36-billion company with 161,000 employees who work in 34 countries around the world.

While it still works metal, it is one of the leading technology suppliers to the auto industry, whether this takes the form of electrified powertrains or digital radar systems.

Yes, it also works with silicon.

Surround-view system developed by Magna deployed in 2022 Toyota Tundra. (Image: Magna)

And one of the more fascinating aspects of Magna is that not only does it supply components and systems for use by OEMs to produce vehicles, but it manufacturers complete vehicles for those OEMs, having built more than 3.7-million vehicles. The forthcoming Fisker Ocean? It will be built by Magna. (And Magna is deeply involved in the engineering for that EV, as well.)

On this edition of “Autoline After Hours” we are joined by Boris Shulkin, executive vp and Chief Digital & Information Officer, at Magna.

Shulkin, whose job ranges from identifying companies to work with (or invest in) to cybersecurity, has a broad view of the auto industry, given that Magna has operations that make everything from automotive seats to cameras.

He provides a fascinating look at a company that is involved in an array of facets of the auto industry.

Shulkin talks with “Autoline’s” John McElroy, Craig Cole of EV Pulse, and me.

And you can see it all here.

It is a started-in-a-garage company unlike those you’re probably more familiar with.

Some Notable Numbers

Let’s face it: vehicle sales in the first half of 2022 were not great in terms of volume.

What’s more, they weren’t great for customers who were looking for something affordable—according to Kelley Blue Book, the average transaction price for a new vehicle was a record $48,043.

They were great for OEMs and dealers, because higher prices mean bigger profits.

Be that as it may, it is interesting to look at how the leading OEMs made out in terms of one another when it came to sales.

In first place there is General Motors, which sold 1,087,761 vehicles. Based on that, here is the sales delta between pairs of subsequent companies (i.e., how many more the first named company sold than the company that follows it in sales ranking):

  • GM to Toyota:                  42,064
  • Toyota to Ford:                135,965
  • Ford to Stellantis:            95,900
  • Stellantis to Hyundai:       110,867
  • Hyundai to Honda:           196,668
  • Honda to Nissan:             73,683
  • Nissan to Volkswagen:      173,162

The gap between Toyota and Ford is surprising. And the gap between Ford and GM is even more surprising: 178,029.

Hyundai (as in the Group, meaning Kia, too) is certainly coming on strong. And Honda seems to be fizzling.

Realize that all of these companies are dealing with supply chain snafus and chip shortages, so it is a matter of (1) those who did a better job of managing their way through adversity and (2) a range of products (generally large SUVs and light-duty pickups) that consumers were interesting in acquiring.

(Not) On the Road

Events like airport runways in the UK melting and Hawaii getting some unseasonably sizable waves, to go to two poles on the planet—presumably both indicators that the climate is undergoing something of a change that isn’t exactly beneficial—it would seem that things like 700-hp engines would be a thing of the past. Yet Ford, a company that has actual street cred in the environmental community (e.g., it has committed to reducing emissions in like with the Paris Climate Agreement), a company that is investing billions of dollars in developing the ability to produce electric vehicles, realizes that there is a good market for those who not only want power and performance (e.g., a 5.2-liter supercharged V8 under the hood) but who want to drive in places like the desert.

Ford Raptor R. Who needs a road? (Image: Ford)

So on the one hand Ford puts out an environmentally appropriate F-150 Lightning, a full-EV pickup truck that has a special price point for contractors (a starting MSRP of $39,974) in order to make it clear that EVs can get the job done, and on the other hand it has developed the F-150 Raptor R, specifically engineered for going off road in desert conditions: Carl Widmann, Ford Performance chief engineer: “Raptor R is our ultimate Raptor. When customer experience Raptor R in the desert and beyond, it will make the hairs on the back of their necks stand up—and they’ll love every second of it.”

Guess it is spreading its bets on what it offers to the market.

While Ford isn’t responsible for the behaviors of people who buy things like the Raptor R, it does seem curious that they’ve built it for “the desert and beyond,” and that “beyond” may be places that people aren’t supposed to drive.

According to the U.S. National Park Service, in Death Valley, for example, there are thousands of miles of road, paved and otherwise, yet the park rangers are finding that year after year there are off-road “disturbances”: people driving off the designated routes.

Why does this matter? Well, those who get caught can get sentenced to six months in the slam or a $5,000 fine.

But then there’s this: “The fragile landscape and ecosystem is impacted by illegal off-road driving in many damaging ways”:

  1. Leaves Lasting Scars
  2. Damages Vegetation
  3. Endangers Wildlife
  4. Disrupts and Compacts Soil
  5. Pollutes Water Sources
  6. Destroys Designated Wilderness
  7. Threatens Sensitive Cultural and Historic Sites

Some of those things, when broken, simply can’t be fixed. While the vast majority of desert drivers undoubtedly are responsible, those who aren’t can cause tremendous damage. . .which they’ll likely drive away from. (The National Park Service says that if one gets stuck having gone on an unauthorized excursion that person is responsible for paying the towing fees, which can cost thousands. One suspects, however, that it would really be tough to get the Raptor R stuck.)

Here’s hoping that when the dealers hand over the fobs for Raptor Rs they remind the new owners to Tread Lightly!

Sono Wants You to Share

Imagine that you’ve decided to start a company selling products. Presumably one of your goals is to make money. One of the typical ways of making money in a product-producing business is to sell products, the more the better.

Sono Motors is a German automotive startup.

What probably makes things somewhat more difficult for the company than would be the case were it to be producing vehicles of a somewhat conventional nature: the Sion, it’s forthcoming vehicle, is described as “the world’s first affordable solar electric vehicle.”

I’m not even aware of unaffordable solar electric vehicles.

The company says that it has more than 18,000 reservations for the Sion.

Of course reservations aren’t sales.

Sono Motors has developed an app. The Sono Carsharing app.

Sono. A solar car. And a car-sharing app. (Image: Sono)

The company says this is meant to address the 43 million or so vehicles in Germany that are driven for an average one hour per day.

Regardless of the brand, the app will allow vehicle owners to share their vehicles.

Johannes Bückle, Head of Product at Sono Digital, said, “Three things were important for us when designing the Sono Carsharing app: how can we reduce the number of cars on our roads while at the same time increasing the utilization of all the vehicles that are just standing around, and also, as a higher-level goal, make significantly more efficient use of vehicles as a resource? The concept originally developed exclusively for the Sion was not enough for us, so we expanded the scope to include all private cars.”

Think about that: the company is working, on the one hand, to get its Sion on the road, but on the other, reducing the number of Sion (and other vehicles) being on the road.

Possibly a noble undertaking but certainly a strange way to start a car business.

A Microsmile from Polestar

By Gary S. Vasilash

One of the things that start-up companies have the opportunity to do–if they’re simply not hell-bent on doing whatever it is that they think they are supposed to be doing and so suck all of the enjoyment out of their endeavors–is to be a bit whimsical, to do things that are related to their business but not simply the same thing with a dab of red paint to somehow make it seem more “creative.”

EV startup Polestar held a design contest last year.*

Kristian Talvitie, a Finnish designer, received an honorable mention.

KOJA by Polestar. No wheels. No motor. A tree house. (Image: Polestar)

That said, Talvitie’s design for a microspace tree house was built full scale by Polestar designers, Talvitie and personnel from Finnish design agency Ultra.

The KOJA has been installed at the Fiskars Village Art & Design Biennale in southwestern Finland.

Polestar builds vehicles, not tree houses that are positioned just below the tree canopy for high visibility of the wilderness.

Maximilian Missoni, head of Design at Polestar, said, “We were fascinated by the idea and how it translates our brand values [e.g., accessibility, sustainability] into a different environment.”

Yes, that. And probably because they wanted to have a little fun.

*It is also holding one this year. Designers love designs even of things that they’re not paid to design.

The Other EV Battery

When you think about electric vehicles and batteries, you probably think of those massive lithium-ion units that are driving the electric motors. But there is more that needs electricity on board EVs beyond the motors, like, say, the audio system. And this leads to something that you’re undoubtedly familiar with–more or less—if you pop the hood on an old Chrysler or a new Chevy and damn near everything in between: a 12-Volt battery. Yes, batteries like that–more or less–are in EVs, too.

Clarios builds >150 million vehicle batteries per year. About a third of all the batteries produced in the world

It has batteries in cars old and new. Including EVs.

(Image: Clarios)

While your car likely has a typical lead-acid battery in it, if you have a start-stop system built into the powertrain system, it is has an absorbent glass mat (AGM) battery on board. It is engineered to withstand that regular starting and stopping.

Mark Wallace is the CEO of Clarios. And on this edition of “Autoline After Hours” Wallace explains the why and how of AGM batteries in EVs. Clairos has developed what it calls a “Smart AGM” battery for EV and plug-in hybrid applications that provides real-time communication with the vehicle system to assure overall performance.

And, of course, he talks about more conventional batteries, too.

While “lead-acid batteries” sound like they are an environmental nightmare, turns out that those batteries are made with 99% of materials that can be recycled or reused and 90% of the batteries produced are made from recycled materials.

Wallace talks with “Autoline’s” John McElroy, freelance writer Sebastian Blanco, and me on the show.

And you can see it here.