Author Archives: shinymetalboxes

Mercedes Goes NACS: Another OEM Takes the Short-Term Gain

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“To accelerate the shift to electric vehicles, we are dedicated to elevating the entire EV-experience for our customers – including fast, convenient, and reliable charging solutions wherever their Mercedes-Benz takes them. That’s why we are committed to building our global Mercedes-Benz High-Power Charging Network, with the first sites opening this year.”

So said Ola Källenius, Chairman of the Board of Management Mercedes-Benz Group AG.

Mercedes will be opening in North America a “High-Power Charging Network” that will include more than 400 charging hubs and more than 2,500 high-power chargers.

This won’t all be up and running until the end of the decade. Some will open this year.

Källenius went on to say, “In parallel, we are also implementing NACS in our vehicles, allowing drivers to access an expansive network of high-quality charging offerings in North America.”

Yes, Mercedes is signing on to the Tesla Supercharger network—more than 12,000 Superchargers (considerably more than the 2,500 Mercedes plans to have in some six years). Starting next year, they’ll be equipping their vehicles with the socket and software to take the Tesla juice.

So now there are Ford, General Motors, Volvo, Rivian, Mercedes, and probably more by the time you read this all planning on having their vehicles charging at the network created by what is arguably the world’s most desirable electric vehicle company (how else to explain the market dominance it continues to have—and when you hear about how its market share is declining, realize that the market is getting bigger, so while its slice may be smaller from a percentage standpoint, the real thing to pay attention to is the number of vehicle it is selling vis-à-vis the other companies).

This strikes me as something analogous to Apple in its early days saying that it would offer Windows as the operating system and then trying to persuade users to switch to its OS.

What would be the point?

These OEMs are taking a short-term gain and will experience a long-term disadvantage.

If someone buys a Mercedes rather than a Tesla it is probably because they think the Mercedes is a superior vehicle.

And there’s Mercedes saying, “Yes, our vehicle is great but our charging system isn’t, so go use the system from the other brand.”

Isn’t that admitting that the other brand is technologically more capable?

General Motors: About Those EV Sales. . .

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By Gary S. Vasilash

General Motors was rather chuffed with its U.S. sales results for Q2 2023 as well as for the first half of the year.

It delivered 691,978 vehicles in Q2, up 18.8% from the same period last year. And for the first half it has delivered 1,295,186, or 18.3% more than in the first half of 2022.

Drilling into the electric vehicle space, the company sold in Q2 13,959 Chevy Bolt EV/Bolt EUV models, up an impressive 101%. Even more impressive, with Bolt sales of 33,659 for the first half, that’s a 360.9% increase. However, due to a problem with battery fires that occurred in the summer of 2022 General Motors stopped production of the vehicles as it handled a recall, so there were fewer vehicles available last year. What’s more, when it brought the vehicles back on the market it did so making the pricing exceedingly attractive—even for people who otherwise wouldn’t have considered an EV.

Then there are two other EVs in the GM portfolio:

  • Cadillac Lyriq
  • Hummer EV

As for Cadillac, it delivered 1,348 Lyriqs in Q2 and a total of 2,316 during the first half. The vehicle wasn’t available during the first half of 2022 so there is no comparison.

As for the Hummer EV, there were 47 deliveries in Q2 and a total of 49 for the first half. Yes, two were delivered in Q1 2023. Those numbers are down 82.7 and 86.8%, respectively. There were 185 days between January 1 and June 30. 49 Lyriqs.

All in, General Motors sold 36,024 electric vehicles during the first half of 2023.

To put that number in perspective, know that it sold 78,169 Chevy Malibus during the same period, and while nary a word is pronounced about the importance of that midsize sedan to its future portfolio, for the past few years there have been more pronouncements about how EVs are going to be transformative to the company’s fortunes than mere mortals can imagine.

Of course, “Past performance is no guarantee of future results.”

But there are two factors that need to be kept in mind.

  1. GM has announced Bolt production will end in November. On the Chevrolet shopping site it is able to proclaim that the Bolt is “America’s Most Affordable EV.” Strike that from the books.
  2. When the Chevy Silverado EV was first announced the company talked about the WT (as in “work truck”) trim starting at about $39,900. However, it recently said that when the first WTs roll off the line, they will be 4WT trim, capable of 450 miles and featuring AWD, for a price of . . .$79,800

Hard to see how the company is going to have sustainably large EV sales numbers as it goes into the future.

It may have the capacity–lots of capacity–but there are another two factors that come into play:

  1. Execution
  2. Market demand for vehicles that aren’t necessarily leading in affordability.

Jeep? Ram? Huh?

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By Gary S. Vasilash

The first half (H1) 2023 results for FCA US LLC—that part of Stellantis that is often referred to by the shorthand “Chrysler”—are out.

And look odd.

It is generally considered to be the case that the real U.S. crown jewels that the company based in the Netherlands obtained when Fiat and PSA merged were Jeep and Ram, the brands that don’t offer things that in any way, shape or form resemble cars.

For the U.S. sales for the first half of 2023 there is only one Jeep model that has actually had greater sales compared with H1 2022, the Compass. And arguably the Compass is, by and large, the least Jeep-like Jeep of all Jeeps in the showroom.

Wrangler sales are off by 15% and the Grand Cherokee is down 7%. Those two vehicles are essentially the bookends of the brand.

There was great hope for the Wagoneer and the considerably more expensive Grand Wagoneer, but they are off 21% and 26%, respectively.

An argument could be made that Jeep had the segment to itself for a long, long time and now things like the Bronco Sport and Bronco are taking away sales. Which could, indeed, be the case because for H1 Bronco Sport is up 7.8% and Bronco 6.8%.

Another thing might be that post-pandemic the whole “overlanding” phenomenon is waning and those who are more likely to use their Wranglers as Wranglers are still buying Wranglers and the rest have moved on to something else.

As for the Grand Cherokee, it is possible that some of its sales have gone to the Dodge Durango. Its sales for H1 are up 82%. Realize that there are plenty of dealerships that have Jeep, Ram, Chrysler, and Dodge under the same roof, so someone shopping could easily see a Durango and opt for it because, say, a Grand Cherokee with the sought configuration isn’t available.

Overall Jeep brand sales are off by 12% compared with the same period last year.

Meanwhile, over at Ram, it is only off 2%–but it would seem that it should be up.

For example, Ford truck sales are up 23.1%. GM also shows black ink for truck sales, with all flavors of Silverado being up 1.6% in H1 and the Sierra portfolio up 20.2%.

What is strange about the Ram numbers is that the Ram pickup is down 9% for H1 and the only reason why the brand isn’t down more is because the two commercial trucks on offer—the ProMaster Van and the ProMaster City—are both up, 50% for the Van and 70% for the City.

As for the other FCA US brands, that Durango has really boosted Dodge H1 results: up 31%.

Even Chrysler brand is up 23% thanks entirely to the Pacifica minivan, which is up 26%. The only other vehicle in the Chrysler showroom is the 300, which is (a) down 5% for H1. And given that for the first half there were 73,845 Pacificas sold and 7,197 300s. . .well, it makes one wonder about the on-going value of the Chrysler brand.

So maybe a few years from now that shorthand identifier for the company will be something else. But what that is isn’t entirely clear at this point.

Sockets and Chargers & The Technical Surrender of the OEMs

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By Gary S. Vasilash

Thomas Edison patented the incandescent light bulb in 1880. By 1890 the screw-type base—like the one you can see on a light bulb right now—had about 70% of the market.

There was something to be said for standardization.

As light bulbs were the dominant type of electrical object back then, electrical sockets took that form factor.

When companies (including, no surprise, General Electric) began to make electrical household appliances, they put an Edison socket on the end of the power wire. While that seemed sensible, there was the issue of where the power outlets were located for purposes on lighting: in places like ceilings.

So not only was it a bit tricky screwing in that toaster or iron, but in the event that the appliance was accidentally knocked off the counter or ironing board, there was likely to be a ripped cord and a possible electrical short.

An inventor named Harvey Hubbell came up with another idea. He came up with the two-pronged plug that you are also familiar with today (some outlets have the third opening for the ground).

The device he patented in 1904 still used the screw-in socket for the receptacle and there was a two-pronged plug attached to the appliance cord. (The screw-in receptacle can still be found in hardware stores today.)

While it probably seemed to the people in the late 19th/early 20th century that Thomas Edison was nonpareil when it came to things electric, clearly that wasn’t the case.

Which brings me to the Tesla charging connector, the NACS.

That stands for “North American Charging Standard.”

Standards are usually created by independent organizations, not companies.

Tesla simply named its connector and port a standard. Voila!

Ford, General Motors, Rivian, Volvo, and undoubtedly others by the time you read this have signed on to the standard.

As is widely known, the Tesla Supercharger network is superior to all other charging networks—because it works. The other networks are hit-and-miss. If you have a vehicle that needs a charge, do you really want to take your chances on pulling up to a charger that may be down for an array of reasons?

Thomas Edison’s company came up with the socket. It worked. Appliance manufacturers followed Edison’s lead.

Then Harvey Hubbell came up with an alternative. A better idea.

You would think that there’s a Hubbell working at Ford, GM, Rivian, Volvo, etc.

These massive organizations can’t come up with better system than that which Tesla developed in 2012?

People want reliability and consistency.

If they associate those characteristics with the name “Tesla,” what does that say about the other companies?

Sure, as the EV market grows and there are more alternatives from the other companies, Tesla’s share of market will shrink.

But as those other companies use Tesla’s equipment and further underscore the viability of that brand, Elon Musk will be to EV charging what Thomas Edison was to what you find at the base of incandescent light bulbs today.

No Canada: Consumers & EVs

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By Gary S. Vasilash

Although there seems to be something of a bandwagon effect in the U.S. when it comes to EVs—one led by the government rolling out cash for EV consumers and cash for companies that are producing batteries (there is a part of the IRA that provides up to $45 per kilowatt hour for battery cell and module production and covers 10% of the critical mineral costs: wonder why there are all those battery plant announcements?)—consumers in Canada, well, let’s quote J.D. Ney, director of the automotive practice at J.D. Power Canada:

“Despite current legislation that is pushing hard for EV adoption, consumers in Canada are still not sold on the idea of automotive electrification. Growing concerns about affordability and infrastructure (both from charging and electrical grid perspectives), have caused a significant decline in the number of consumers who see themselves in the market for an EV anytime soon.”

That is, the 2023 J.D. Power Canada Electric Vehicle Consideration (EVC) Study finds that 66% of those surveyed are “very unlikely” or “somewhat unlikely” to consider an EV as their next vehicle purchase.

Consider. Not buy. Think about. Ponder.

That is a 13% increase in those who are in the unlikely camp from last year’s EVC Study.

Reasons for the lack of interest?

  • 63% say limited range
  • 59% are unhappy with the price of the vehicles
  • 55% cite lack of charging infrastructure

The Canadian government does have a program that provides up to $5,000 for the purchase or lease of EVs or PHEVs, so perhaps this indifference is predicated on practicality.

Let’s face it: unless you get an expensive EV, you are going to have comparatively limited range, and if you have limited range you’re going to want to have charging capability readily at hand. . .

EV Trucks & Three-Card Monte

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By Gary S. Vasilash

When Chevrolet announced the Silverado EV last year, it said that the price for the initial work truck version would have an “Estimated MSRP staring around $39,900.”

That was for the work truck version. Get the contractors in and those who are simply looking to look cool will follow. Possibly in droves.

What does the Silverado EV 4WT work truck, which is presently in production, cost?

$79,800.

There is a forthcoming 3WT version with a decreased range from the 4WT. The 4WT has an EPA rating of 450 miles per charge.

The 3WT will be tagged at $74,800.

What is shocking is that people aren’t more shocked by this estimation being off by some 50%.

When the 2024 Chevy Equinox EV was introduced last fall, the claim Chevy made was “a starting price of around $30,000.”

Mary Barra, GM chair and CEO, said, “With the flexibility of GM’s Ultium Platform, we are bringing to market vehicles at nearly every price point and for every purpose.”

Really?

The Cadillac Lyriq is on the Ultium platform. It starts at $58,590.

The GMC Hummer EV uses it, too, and good luck finding a price for it on gmc.com. The 2022 Edition 1 model started at $112,595, and while the subsequent models are less expensive, odds are that’s a relative reduction.

Every price point for Thurston Howell III, perhaps.

Kelley Blue Book has it that the average transaction price for an electric vehicle in May was down $9,370 from the price paid in May 2022. Now it is $55,488, or a 14% decrease.

There’s the Silverado EV 4WT 50% increase.

And what expectation should there be that there will be a $30K Equinox, and if there is a $30,000 Equinox will there be a sufficient number such that it won’t be like sightings of the Loch Ness Monster (“I think I saw one. . .”)?

This just isn’t a GM phenomenon.

Ford launched the F-150 Lightning Pro in May 2022 with a starting MSRP of $39,975. By August it was $55,974. At ford.com right now it starts at $59,974.

Of course, at the top of the page for the Lightning it says in a bright blue box:

“Select Models Currently Eligible for $7,500 in Potential Federal Tax Credits.”

Let Uncle Sam mitigate the price increases.

Fisker Begins U.S. Deliveries. Some.

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By Gary S. Vasilash

“We have been waiting for this moment ever since we started the development of the Fisker Ocean in October 2020.

“As a California-based company, we are thrilled that our first US customers are finally getting behind the wheel of the Fisker Ocean and will experience its innovative features, class-leading 360-mile range, and highest levels of sustainability.”—Henrik Fisker, Chairman and CEO, Fisker Inc.

He was talking about the start of deliveries of the Fisker EV SUV on June 23, 2023 in Los Angeles.

The company delivered 22 cars.

Auto Industry’s Quality Breakdown (You Won’t Necessarily Be Left at the Side of the Road, But. . .)

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By Gary S. Vasilash

In the J.D. Power U.S. Initial Quality Study (IQS), researchers use “problems per 100 vehicles” (PP100) as a metric.

A lower number is better.

In an ideal world, 0 PP100.

But in the real world, in the 2023 IQS, it was discovered that the PP100 was up on average by 12 over 2022’s IQS.

And that’s on top of the 18 PP100 increase the year before.

So in two years, there has been a 30-point rise, which means a 30-point quality drop.

Clearly: quality is declining.

While there are things like difficult-to-use infotainment systems, there are also problems with. . .door handles.

Safety systems are certainly a good thing to have in a vehicle. But lane departure warning/lane keeping assistance and forward collision warning/automatic emergency braking both saw considerable increases—meaning, more troublesome.

The industry average is now 192 PP100.

Think of that: every 2023 model vehicle has approximately two problems that rise to the level of notability by those surveyed by J.D. Power.

The brand with the best quality: Dodge. 140 PP100.

The brands at the bottom: Chrysler and Volvo. Both score 250 PP100.

(Although Tesla doesn’t make the “official” list due to restrictions on surveying its owners, J.D. Power calculates that it would be below the bottom: 257 PP100. Which just goes to show there isn’t necessarily a correlation between popularity and quality.)

Would You Consider an EV?

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By Gary S. Vasilash

The J.D. Power 2023 U.S. Electric Vehicle Consideration study is sort of a good-news/bad-news report for the global OEMs that are spending billions on the building of plants for vehicles and batteries.

That is, the number of people surveyed who said they’re “very likely” to consider the purchase of an EV increased over the finding in last year’s version.

But the increase is only 2%.

From 24% to 26%.

Pulling back the focus, the number of people who are “overall likely” has also increased.

Here 3%.

From 59% to 62%.

Not exactly a ground swell of consideration.

And while those numbers are on the rise, let’s face it: consideration and likelihood aren’t downpayments.

According to Stewart Stropp, executive director of EV intelligence at J.D. Power, what a consumer owns now has a big influence on what they’ll consider next.

The breakdown of the “very likely” respondents are:

  • EV: 74%
  • PHEV: 63%
  • HEV: 36%
  • ICE: 22%

One way of looking at it is that those who have experience with vehicles they plug in (EV and PHEV) are comfortable with them and EV owners are likely to consider another and PHEV owners are inclined, as well.

However, the owners of hybrids and straight gasoline engines are seemingly reticent to make a switch.

Presumably, it is particularly important to convert those owners of ICE vehicles: 78% is a big number, especially as most people have cars they fill up at gas stations.

And speaking of filling up: Charging is a big hurdle. Some 49% of shoppers say that lack of charging station availability—as in both sites and equipment at those sites that actually charge—is what makes them reject the idea of an EV.

The Cost of Cars & a Considered Alternative

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By Gary S. Vasilash

According to the most-recent numbers from Kelley Blue Book, the average transaction price paid for a vehicle in May 2023 was $48,528. And this is even though, KBB found, the average price paid was $410 below sticker, not some wild figure well above it, which people were paying as a result of the pandemic: KBB notes that in May 2022 the price paid was $637 above sticker.

S&P Global Mobility reports that account-level delinquency rates of auto loads 60+ days past due are now up 26 basis points from Q1 2021, from 1.43% to 1.69%.

While that is a non-trivial jump, the folks at TransUnion and S&P Global Mobility point out that this is a situation that is being faced by a segment of the consumers and lenders, those who are in the subprime category and more than likely to be buying a used car.

So since that $48,528 MSRP may not apply to those people, know that according to Cox Automotive, the average used vehicle listing price in May was $27,256, “the highest since early January.”

Meaning, new or used, vehicle are pricy.

But this statement related to the loan delinquencies is somewhat startling:

“The interest rate rise is squeezing the monthly budget for the average American consumer. Consumers set aside money monthly for housing, vehicles, and insurance, but may not pay other obligations with the same frequency, such as medical bills and credit cards. People need their vehicles to get to work to make money and pay their obligations.”–Jill Louden, product management associate director for S&P Global Mobility

Something of a vicious cycle: buy a car, go into debt, use the car to go to work, pay for the vehicle and other things, but rack up even more debt for things like health care and presumably things like food.

If some company comes to market with appealing vehicles that have a low price—and this might be a Chinese company, 25% tariff notwithstanding—then this industry could be upended.

Presumably there is a considerable percentage of people who use their vehicles strictly for transportation and not as a signifier of their wealth or coolness. If the vehicle can do the job and do so reliably–without seeming like vehicular penance–then being able to acquire such a vehicle would be the way to go.

Let’s face it: not everyone—even those who are well above subprime—can afford an electric vehicle, which Kelley Blue Book found had an average transaction price of $55,488 in May—down 14% compared to May 2022, but probably because of Elon Musk adjusting the prices of his cars in a way that is completely uncharacteristic of traditional OEMs, so probably not something that can be counted on going forward.

Everyone talks about the transition to EVs and OEMs are tripping over one another to make this change to their showrooms.

But consider: How many people will be left by the side of the proverbial road by OEMs those consumers could once count on for reliable, affordable vehicles?