Ahoy, Lambo

No wheels. Big engines.

By Gary S. Vasilash

So, want to talk about a Lamborghini with 4,000 hp?

It is a real thing.

But it is a yacht.

A yacht that is equipped with two MAN V12 2,000 hp engines.

Tecnomar for Lamborghini 63 (Image: Lamborghini)

It is the Tecnomar for Lamborghini 63 that was designed by Lambo and built by Tecnomar, a brand of the Italian Sea Group.

The first version of this limited edition yacht is said to be influenced by the design and details of the Sián FKP 37 hybrid sports car.

The yacht is constructed with plenty of carbon fiber, which means that it is in the “ultralight yacht” category. Under 24 tons.

While on the subject of numbers, they’re going to make just 63 of them.

Another number of possible interest: $3.5-million. The approximate starting MSRP of this floating Lambo.

Something About Tires We Still Don’t Know The Meaning Of

It’s not like we’ve spent a lot (or any) time in open-pit mines. . . .

By Gary S. Vasilash

Odds are you will never be in a vehicle that uses this tire. Unless, perhaps, you drive (pilot?) something like the Caterpillar 789 dump truck, the kind of vehicle that is used in open-pit mining: It resembles a giant box (giant as in having the capacity of 177 tonnes) that is supposed by giant tires with a cab tucked up front in between.

Just the thing for 200-ton trucks. (Image: Goodyear)

According to Eric Matson, Global OTR Field Engineering Manager, Goodyear, “The 40.00R57 has become Goodyear’s dominant fitment on 200-ton trucks, such as the Caterpillar 789. With a higher TKPH and load carrying capacity, the new Goodyear RH-4A+ tire size is a great option for customers who have converted their 789 fleets to this larger tire.”

TKPH? Tonne-kilometers-per-hour. We don’t know, either.

One of the features of this tire is that it is said to provide “higher productivity in hard rock underfoot positions.”

Bet that’s not going to be your concern the next time you go out tire shopping. . . .

Tesla Q2 ‘21

If it hadn’t last $2-million on Bitcoin, the number would have been bigger

By Gary S. Vasilash

A few things from Tesla Q2 numbers

Consider this:

Models S/X production numbers were:

  • Q2 2020:      6,326
  • Q3 2020:      16,992
  • Q4 2020:      16,097
  • Q1 2021:      0
  • Q2 2021:      2,340

Were they not electric vehicles, the phrase “running out of gas” comes to mind.

To be fair to the people in the Tesla plants, for the Models 3/Y:

  • Q1 2021:      180,338
  • Q2 2021:      204,084

So they’re certainly busy.

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Here’s an interesting understatement:

“Solving full autonomy is a difficult engineering challenge in which we continue to believe can only be solved through the collection of large, real-world datasets and cutting edge AI.”

The emphasis on the dataset comes from the more than one-million Teslas the company is collecting data from.

However, there are plenty of companies that believe that in addition to the critical datasets there is a need for a sensor suite on the vehicles in order to assure that the real world is discerned by the vehicle in real time.

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The company also stated in its report to shareholders, “Public sentiment and support for electric vehicles seems to be at a never-before-seen inflection point. We continue to work hard to drive down costs and increase our rate of production to make electric vehicles accessible to as many people as possible.”

Presumably much of this growing support among the public is predicated on the availability of EVs from OEMs other than Tesla. Vehicles like the Audi e-tron and the Mustang Mach-E.

That last phrase—“accessible to as many people as possible”—seems to echo what Mary Barra has been saying for some time.  At the Aspen Ideas Festival in June Barra said, “As we move to an all-electric, zero-emissions future, it is on us to lead positive change and implement inclusive solutions that bring everyone along, especially our employees and communities.”

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So here’s a question: Is it possible that its Q2 net income of $1.1-billion, its largest-ever quarterly profit, notwithstanding, Tesla is coming from behind for a change?

Behind in terms of the development of automated driving, as it tries not to use an array of sensors.

Behind in terms of having vehicles that come at a price point that are more affordable?

As for the first, the need for things like LiDAR seem clear.

As for the second, time will tell whether companies like Volkswagen and GM are truly going to give Tesla a run for its money on the closer-to-entry end of the EV market.

The Emerging EV Challenge

Incumbents will gain some share. But it is going to take a lot of work to get it

By Gary S. Vasilash

When GM announced its sales for the first half of 2021, the Chevrolet Bolt EV and the new variant the Bolt EUV did quite well. Comparatively speaking.

That is, sales were up 142.4% compared with the first half of 2020.

Of course, 2020 was the COVID year, so the sales of pretty much every vehicle has shown robust signs of sales, but few with such a high percentage rise.

That said, the total number of sales for the two models in the first half of 2021 was 20,288. To put that number into context, realize that the company sold 31,886 Malibus during the same period—and that represented a decline of 33.5% for the stalwart sedan.

And to put the Bolt EV/EUV sales into context, know that in the second quarter alone of 2021 Tesla delivered 199,360 Model 3 and Model Y units—or looked at another way, Tesla sold in three months 179,072 more vehicles than Chevrolet did in six months.

“IONIQ 5 introduces the Hyundai brand to a while new set of buyers, Jose Munoz ,president and CEO, Hyundai Motor America, said of the forthcoming EV. Buyers matter. Especially new ones. (Image: Hyundai)

General Motors has a lot of commitment to EVs going forward, In November 2020 it announced that it would have 30 new EVs on the global market by 2025, of which two-thirds would be available in North America. Then in June 2021 it announced it was adding commercial trucks to the North American mix, as well as additional EV production capacity.

In the GM boilerplate it describes itself as “a global company focused on advancing an all-electric future that is inclusive and accessible to all.”

Last week Mercedes announced its all-EV approach by 2030.

But presumably this is not a plan that is “inclusive and accessible to all.”

Also last week GM announced a recall of 2017-2019 Bolt EVs. A problem with the vehicles potentially bursting into flames.

This is the second time these models have been subject to a recall, with the first being in November 2020.

The new GM EVs that are on the way will not have the same battery system used by the Bolt EV and Bolt EUV. It is an all-new design.

However, GM is not exactly in a position to make that as a benefit of the new vehicles because it would throw some serious shade on the Bolts.

Perhaps the limited sales of the Bolts works in GM’s favor because if the number of recalled vehicles was larger, if there were more people aware of the problem, then it would have even more work ahead of it trying to convince people that it, too, can make EVs with the best of them.

It is widely known that Tesla owners give Tesla a pass in a way that traditional OEMs have never gotten, nor will they. If there are manufacturing defects, shrug. If there are performance problems, shrug. If owners learn of those who are using the so-called “Autopilot” system and run into the side of a semi, a moment of silence followed by a shrug.

If any of these things are related to a traditional OEM: Wailing and gnashing of teeth by the customer base—and that’s just the start.

To be sure there will be more people buying EVs from the traditional brands. While in some cases it may be because the vehicles look damn good—Audi is certainly staking a claim in the design space—in more cases it will probably be predicated on the availability that can come from volume: not only availability in terms of the vehicles being on lots, but availability in terms of economies of scale helping reduce prices.

But given the delta between Model 3/Y sales and Chevy Bolt EV/EUV sales, I can’t help but think that the traditional OEMs may have a bigger problem on their hands than they might expect.

Although Hyundai has certainly been in the U.S. market since 1986, arguably it is still a challenger brand in the market compared to those that have been around for 100 years or more.

While its sales numbers are still modest in the U.S. vis-à-vis the established players, in the first half it sold 407,135 vehicles, or 49% more than it did in the first half of 2020.

Hyundai has been offering hybrids, EVs and even fuel cell vehicles in a way that many traditional OEMs don’t match.

So let’s say for the sake of argument that the same people who buy Samsung phones rather than iPhones would be more likely to go with a Hyundai than a Chevy. (If we go back to the aforementioned design advantage, Hyundai is certainly proved that point.)

So a chunk of the traditional goes there.

Then there are the new entrants. Lucid. Fisker. Lucid is staring at a high price point (think of it as a Cadillac competitor) and Fisker is more in the middle. Both of those companies have announced that they are working on what could be described as vehicles that are more inclusive and accessible.

While it might seem that the incumbents have the advantage simply because of their name recognition and availability, IBM doesn’t make PCs; when’s the last time you bought an image-related product from Kodak; and although a Pan Am shuttle took people to a space station in 2001: A Space Odyssey, Pan Am went out of business in 1991.

Recycling Li-Ion Batteries

Sure, the electric vehicle market is growing. But there’s the non-trivial issue of critical materials for the batteries for all of those new cars, trucks and SUVs. . .

By Gary S. Vasilash

Ajay Kochhar, CEO and co-founder of Li-Cycle, points out something that should give everyone a bit of pause when it comes to the burgeoning electric vehicle market: In 2013 there were three electric vehicle battery plants. In 2021 there are 225 existing on the way.

According to the Critical Materials Institute, which is under the U.S. Dept. of Energy, the definition of critical material is: “Any substance used in technology that is subject to supply risks, and for which there are no easy substitutes.”

Things like lithium used in batteries. Or nickel. Or cobalt.

Lots of battery plants. Not a whole lot of readily available—to say nothing of environmentally available (mining is not necessarily conducted in places where there is more concern with getting the stuff out of the ground than how that ground will be after the important stuff is removed in an environmentally benign manner)—critical materials.

Kochhar and his colleague Tim Johnson once worked on the lithium-extraction part of the business, Kochhar says on this edition of “Autoline After Hours.” He also points out that there is a whole lot of work that occurs between the extraction of lithium and it ending up in a battery (here’s something amusing: cylindrical cells are sometimes referred to as “jellyrolls” and the pouch-style batteries as “chocolate bars”).

So Kochhar and Johnson established Li-Cycle, which is dedicated to recycling lithium-ion batteries in a safe manner.

(image: GM)

Kochhar says that they are able to recover approximately 95% of the important materials—like lithium, nickel and cobalt—from the batteries, which can then go back into the production of new batteries.

This past May Ultium Cells LLC, a joint venture between General Motors and LG Energy Solution, announced that it had selected Li-Cycle to recycle up to 100 percent of the material scrap from battery cell manufacturing from its battery-manufacturing facility in Ohio. This will include things like offcuts and scrap, which, Kochhar says, may be comparatively small, but given that the plant in Lordstown will have a capacity of >30 gWh, it is a non-trivial amount.

While Kochhar acknowledges that even within the next 10 years the amount of recycled critical materials from batteries will be limited—perhaps no more than 20%–there is an important need to do this.

Kochhar talks with “Autoline’s” John McElroy, Joann Muller of Axios What’s Next, and me.

And you can see it here.

Mercedes Going All-EV: Sort Of

On the one hand, the company is all in. On the other, there is a recognition that people need to buy the vehicles

By Gary S. Vasilash

The important point about Mercedes-Benz announcement of its transition to “electric-only output” by the end of the decade “where market conditions allow” is that: where market conditions allow.

If people aren’t buying EVs, then there is little point in making EVs—except the whole thing that legislation may make it a requirement to do so.

Ola Källenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG: Desirability is key. (Image: Mercedes-Benz)

Which is something that gets lost in most of the discussion of the subject.

But if people are buying a whole lot of a given type of car with a given type of powertrain may be predicated on the fact that the alternatives are rather insufficiently appealing.

The phenomenon that is Tesla proves the point that if there are vehicles that are sufficiently desirable people will buy them.

In is only recently that OEMs have gotten to the point where they aren’t just sticking electric powertrains in vehicles in order to meet the aforementioned legislative demands, that OEMs have twigged to the fact that Tesla is not only annihilating these traditional OEMs when it comes to EVs, but is also crushing it when it comes to sales of premium vehicles.

People want to buy Teslas. Teslas look good. They have class-leading performance. They are supported by an extensive charging infrastructure.

As Ola Källenius, CEO of Daimler AG and Mercedes-Benz AG, acknowledged, “Our main duty in this transformation is to convince customers to make the switch with compelling products.”

Otherwise, the market conditions are not going to be such that people are going to want to buy electric Mercedes in any great numbers. The same goes for any other OEM that is putting out EVs.

Now in the case of Mercedes the company doesn’t need to worry so much about gross volumes as it does gross margins.

It acknowledged, “An important lever is to increase net revenue per unit by raising the proportion of high-end electric vehicles such as Mercedes-Maybach and Mercedes-AMG models, while at the same time taking more direct control over pricing and sales. Rising revenue from digital services will further support results. Mercedes is also working on further reducing variable and fixed costs and cutting the capex share of investments.”

So get the top end revenues while decreasing the amount it takes to build them, and supplement that with digital income.

Källenius: “This step marks a profound reallocation of capital. By managing this faster transformation while safeguarding our profitability targets, we will ensure the enduring success of Mercedes-Benz.”

Clearly, unless it makes a move now, then that success may not be as enduring as the company would like. 

Tavares on the Industry

Stellantis CEO talks about what the company that makes everything from Peugeot hatches to Ram pickups is doing in a period of automotive transformation

By Gary S. Vasilash

Carlos Tavares, Stellantis CEO, made some interesting comments during a session with the Automotive Press Association yesterday. In a wide-ranging interview with Joe White of Reuters, Tavares talked about subjects ranging from the chip shortage to “American e-muscle” to the lead North American brand for electrification (Jeep) to supply chain (“We have 110 models and approximately 4,000 parts per model”) to agility (“Being agile is part of our business. . . . This is an industry that is continually hit by crisis. . . .So we need to be mentally and physically agile”).

Earlier in July Tavares laid out the plans that the fourth-largest OEM on the planet has when it comes to electrification, including an investment of more than €30 billion through 2025 in electrification and software development.

Stellantis CEO (center) at the Warren Truck Assembly Plant with plant manager Andy Ragalyi. (Image: Stelllantis)

The company intends to have 70% of its light-vehicle mix in Europe to be low-emissions vehicles (LEVs) by 2030 and more than 40% LEVs in the U.S. in the same period.

One of the questions, of course, is China, where Stellantis isn’t as strong as some of its competitors.

Tavares said that they will be bringing Opel to China as an all-EV brand. He noted that the vehicles will not be compact but large, explaining that German brands have a reputation in China that is not one of diminutive models, so they will take that into account.

But one of the more interesting things he said in the APA interview was something he didn’t fully articulate.

He said that they are going to be executing an “innovative business model” in China.

In May it was announced that Stellantis and Foxconn had come to a strategic agreement through which the two will be working together on electric vehicles. China is the initial market for those EVs.

Presumably there will be more to it than some sort of additional collaboration with Foxconn or other contract manufacturers.

Tavares talked about how the industry is presently in a “very transformative” period.

Odds are he’s not going to be making transformation in small bits.

The Math of Watching Sports

NBC renews its IndyCar coverage for 2022

By Gary S. Vasilash

There’s the Indianapolis 500. Then there’s everything else.

At least that’s what the numbers seem to say.

The TAD, or Total Audience Delivery.

(Image: IndyCar)

According to NBC, the TAD for the 500 was 5.581-million viewers.

The Honda Indy 200 at Mid-Ohio, which was run on July 4, had a TAD of 1.303-million viewers, which allowed it to best the season opener, the Streets of St. Petersburg, which was at 1.225-million viewers.

Clearly there is a significant gap between first and second places.

But what do those numbers mean?

Well, the National Hockey League recently finished up its Stanley Cup Series.

The Tampa Bay Lightning took it in five from the Montreal Canadiens.

The final game had 3.6-million viewers. The first four games had an average TAD of 2.23 million.

So the Indianapolis 500 crushed the Stanley Cup final but the run of the hockey games annihilate the top races of the IndyCar series.

Oddly enough, NBC, which had hosted the NHL, is no longer going to carry the games, which will shift to ESPN and WarnerMedia.

However, the network just announced NBC Sports will be providing coverage of the entire NTT INDYCAR SERIES on its outlets (NBC, USA Network, Telemundo Deportes).

TAD is clearly a curious metric.

Surprising Trends in Auto Retail

You spend a lot. And you may be willing to forego the dealer “experience”

By Gary S. Vasilash

According to the most-recent Cox Automotive/Moody’s Analytics Vehicle Affordability Index, the number of median weeks of income to buy a new vehicle is 37.

37 weeks to buy a new vehicle.

That’s the greatest number of weeks since they started measuring it back in 2012.

The firms found a trifecta of things contributing to this situation:

  • Vehicle prices increased
  • OEMs and dealers are putting less cash on the hood
  • Median incomes fell

It would have been worse, apparently. Financing rates decreased, so if that didn’t happen, there would have been higher monthly payments.

Gulp.

In May, the most recent month with figures, the average transaction price that people were paying for a new vehicle was $41,263 according to Kelley Blue Book.

Now admittedly that doesn’t mean that everyone pays that much. It wraps in figures for OEMs from Mitsubishi to Mercedes, from Chevy to Porsche. Cars, trucks, SUVs.

But still, a lot of money.

A lot of weeks to earn that money.

All that said, J.D. Power has announced that predicated on its analysis of the usage of OEM websites, 49% of vehicle shoppers are willing to purchase a new vehicle online.

This is an increase of 11% from 18 months ago—about the time that the effects of the pandemic kicked in in the U.S. market.

So what’s behind this:

  • Is it that people are more comfortable shopping for things online, as many of them have done during the past 18 months for everything from groceries to appliances?
  • Are more people simply questioning the visit to a dealer as being a necessity?
  • Is this a case where people go to a dealership, take the test drive, and then go home and search for a better deal?

Whatever the case, it is clear that there is a shift in how vehicles are going to be bought. And it is also clear that there is a shift in what people are willing to pay for vehicles.

Consider this: If you bought a new vehicle the first week of January this year, you wouldn’t pay it off until the week of September 10.

What to Know About Hydrogen Vehicles

Unless you drive a big rig or a locomotive, there probably isn’t a whole lot you need to know

By Gary S. Vasilash

According to the Alternative Fuels Data Center of the U.S. Department of Energy, “In mid-2020, there were about 43 retail stations available nationwide.” Those are retail stations where there is hydrogen refueling. The sentence went on, “mostly concentrated in California.”

The good news is that the AFDC accumulated more data on the retail hydrogen fueling infrastructure in the U.S. And what’s more, there is actually an increase in the number of stations.

But there is still that concentration in California.

The total is 49 retail stations.

Forty-eight of those are in California.

There is one in Hawaii.

Meanwhile, over in the European Union there are more stations, although the numbers from the ACEA don’t indicate whether these are retail-only or whether the number also includes private refueling stations.

When it comes to the EU Germany is almost like California.

That is, there are 83 hydrogen refueling stations there, which accounts for 66.9% of the total 124 stations in all of the EU.

All of this goes to the point that you are not likely to be rolling around in a hydrogen-powered vehicle any time soon—even if you live in California.

The infrastructure for refueling simply isn’t there.

Notes Charlie Freese, “It is a difficult infrastructure play if you have a station and are refueling one vehicle per week.”

In a record published earlier this year for the Department of Energy about plans for 111 new hydrogen refueling stations in California, “Hydrogen Fueling Stations Cost,” “Capital equipment cost estimates for 111 new fueling stations. . .varied between approximately $1,200 and $3,000 per kilogram hydrogen dispensed per day.”

According to Freese, you can think of a kilogram of hydrogen as a gallon of gasoline.

This is a fuel cell. Actually a HYDROTEC fuel cell module that contains fuel cells. (Image: Steve Fecht for General Motors)

Yes, a very difficult infrastructure play.

But Freese is a proponent of hydrogen. He is the executive director of General Motors’ global fuel cell business which uses the name HYDROTEC.

HYDROTEC fuel cell modules have a variety of applications in transportation—applications that you might not expect.

That is, it has announced activities with:

  • Liebherr-Aerospace: Yes, fuel cells for aircraft
  • Wabtec: A producer of locomotives
  • Navistar: Two HYDROTEC fuel cell cubes will be used to power Navistar’s International RH Series

Freese points out that there are extensive opportunities in applications like these because there is a lot that is “known”:

Planes fly on specific routes and land at airports. Locomotive routes are literally on rails. And trucking goes from the depot to the point of delivery—and at the point of delivery (e.g., a warehouse or factory) there are likely to be pieces of material handling equipment—powered by hydrogen.

For individual drivers where one might go is not known. So there can be refueling stations that accumulate proverbial—if not actual—cobwebs.

But for commercial transport, there is the opportunity to have a calculated number of fuel users, which is an absolute advantage.

On this edition of “Autoline After Hours” Freese talks with “Autoline’s” John McElroy, Lindsay Brooke of SAE’s Automotive Engineering and me on a variety of hydrogen-related subjects.

In addition to which, John, Lindsay and I talk about a variety of other subjects, including VW’s commitment to EVs, the European Commission’s tentative plan to stop sale of new vehicles powered with internal combustion engines in the region by 2035, the right to repair, and more.

Which you can see right here.