Vans Save Merc’s 2021

By Gary S. Vasilash

When you think “Mercedes Benz,” presumably it is in the context of something like the S-Class, a swanky motor vehicle.

And you wouldn’t be wrong, because a new S-Class was launched in 2021 and not only is it swanky, but it is chockfull of so much tech that it is probably like most PCs that people own: there are so many possible programs that one is unlikely to ever use all of them or even a few of them to their full capabilities.

And people clearly find it appealing because S-Class sales in 2021 were up 66.3% in 2021 over 2020, or 14,282 units.

Actually, in the car space, that was Mercedes top performer in 2021. Although it moved more C-Class cars, 30,815, on a percentage basis the C-Class was up only 17.2% from the previous year.

And while there were more E-Class vehicles sold than S-Classes—20,947—on a percentage basis that is down 22.7%.

In fact, there were a lot of minus signs in Mercedes’ 2021 results.

Fortunately for it, there are the “G” vehicles, crossovers, where, not surprisingly, the action was. For example, the GLE, with sales of 65,074 had a stellar performance, as it was up 35.1% compared with 2020. (The GLE has a variety of variants, so that undoubtedly was beneficial for those going into the showroom.)

Mercedes-AMG GLE 63S Coupe (Image: Mercedes-Benz)

But the bottom line for the Mercedes-Benz passenger vehicles shows an increase of just 0.4% compared to 2020. Yes, positive territory. But then, 0.4%.

However, Mercedes has something else, something that you probably don’t think about, something not stylish and swanky:

Vans.

Things like the Sprinter and Metris Vans.

Van sales in 2021 were up 4.8% compared with 2020. A total of 53,472 units.

So all-in, Mercedes was up 1.1%.

Arguably, thanks to those vans.

The Unplowed Road to Electric Vehicles

By Todd Lassa

The morning of General Motors’ reveal at CES in Las Vegas of new electric vehicles—most notably the Chevrolet Silverado EV pickup truck and also the Chevy Blazer EV and Equinox EV, which will be coming in 2023 and ’24—the most-read op-ed column in The Washington Post was entitled, “Imagine Virginia’s icy traffic catastrophe – but only with electric vehicles.”

WaPo editorial writer and columnist Charles Lane relates the story of a Canadian semi driver stuck in the storm’s 40-mile backup on I-95 in Virginia earlier this week. A Tesla driver knocks on the semi’s door and tells the trucker that his kids are stranded in the car and there’s no way to recharge the EV. The truck driver, who told the story in his Twitter account @MyWorldThroughaWindshield, gave the Tesla driver water, a spare blanket and a mylar thermal blanket.

Lane points out that pure-electric vehicles lose range in cold weather and cannot be revived as easily as a petroleum-fueled vehicle. To make the Tesla driver’s prospects for recharge tougher, the power grid failed in parts of Virginia Monday night.  

As Gary Vasilash notes in his post “Still the EV Charging Question,” there is no solution in sight for how to quickly re-charge electric vehicles that run out of juice between any two charging points.

But the source of the problem is far older than the accelerating shift from internal combustion engines to EVs. The core issue is the priority the U.S. gave in the last century to designing and building infrastructure centered around the automobile.

In his column Lane references GM’s EV commercial for last year’s Super Bowl, in which Will Ferrell satirically takes on Norway for its then-actual 54% EV market share (which increased to 65% in 2021). Norway is much colder than most of the U.S., though with a much smaller population, and it’s beginning to back out of “massive” EV subsidies. Then the columnist gets to the core of the country’s advantage regarding EVs: In Norway “a mere 10% of workers in the largest city – Oslo – commute by car.”

Eureka. Transportation alternatives are a way of life in places like Norway. That makes a big difference.

Meanwhile, back in Virginia after the huge mid-Atlantic storm, Senator Tim Kaine (D-VA) spent 26 hours, 45 minutes driving up I-95 to Washington, D.C., for a voting rights meeting—a drive that usually takes two hours. Kaine told NPR’s All Things Considered he once took a bicycle ride from Richmond to D.C. in an event with Virginia police officers one Memorial Day weekend, “basically the same ride up Route 1,” in 13 hours.

Now, I’m not the least-bit anti-car, and I’m not advocating a wholesale shift to alternative transportation sources. But our overcrowded highways, freeways and city streets have long been an anathema to any pleasure associated with driving.

The clean, efficient way to commute in that part of the country should be an electric-powered commuter rail system, though it’s far too late for that.

The best we can hope for is to face 40-mile snow-clogged traffic jams with EVs rated 400+ miles of range (probably 325-350 miles in cold weather) and a proliferation of recharging systems along the way. That’s assuming we can afford such EVs, as even ICE-powered new vehicles average more than $46,000. Middle-class commuters can always get a deal on a three-year-old off-lease EV featuring yesterday’s state-ot-the-art range, while the working class – the people who drive the snowplows, semi-trucks and emergency vehicles – get to work in our gas- and diesel-powered trade-ins.

About the 2024 Chevrolet Silverado EV

By Gary S. Vasilash

When Chevrolet introduced the 2024 Silverado EV today, there was an interesting quote made by Steve Hill, vp of Chevy.

Hill said: “The Ultium Platform”—the thing that General Motors is using to underpin all of its post-Bolt EV models—“is a critical enabler of next-level pickup truck performance for both fleet and retail customers, whether they are currently driving a Silverado or are considering a pickup for the first time.”

The interesting bit is that Hill said “fleet and retail customers,” with the first being fleet.

The Silverado EV, when launched, will come in two versions, both in Crew Cab configurations.

There is the flagship RST First Edition:

(Images: Chevrolet)

And there is the WT:

The RST First Edition brings such things as four-wheel steering and automatic adaptive air suspension. There’s a 17-inch diagonal LCD infotainment screen.

Simply, inside and out this looks like a very cool pickup truck that anyone who is interested in such things would be chuffed to have in her or his driveway.

The WT is a bit more, well, pragmatic. Chevy points out that it offers 510 hp and 615 lb-ft of torque; 8,000 pounds of towing and 1,200 pounds of payload.  The a bit later after launch there will be a model with 20,000 pounds of trailering capability.

RST owners will be able to access Ultium Charge 360, which is what consumers of other GM EV crossovers and cars will undoubtedly use. WT owners will have the opportunity go to a variant, Ultium Charge 360 Fleet Service. When that was announced in July 2021, Ed Peper, U.S. vice president, GM Fleet said, “Fleets have a significant impact on the transition to EVs and by expanding Ultium Charge 360 to our fleet customers, GM aims to be a significant industry leader to advance fleet EV adoption at scale and accelerate our goal of reaching 1 million EV sales globally by 2025.

“Fleet electrification is an important element of our growth strategy, and we will leverage our leadership and expertise in this space to support customers at home, at depots and in public with our suite of providers.”

The first models to be built at the GM Factory ZERO (Detroit-Hamtramck Assembly Center) will be the WT. It will be available in the spring of 2023. It will have a base MSRP of $39,900.

Then the RST First Edition vehicles—the fully loaded Silverado EV—will follow in the fall of that year. The base MSRP of that model is $105,000.

Other variants—with price points of some $50K, $60K, $70K and $80K—are planned.

Two points:

  1. The $105,000 RST First Edition might seem a bit pricy for, well, a pickup truck, but this is an electric pickup that is not only tricked out with all manner of tech, but it will come with a battery capable of, GM says, an estimated range of over 400 miles. Typically, EV models (e.g., the GMC HUMMER EV) start out at a high price point and then go down from there. . . .
  2. . . .which brings us to the point that GM is actually starting out with a much more modest price for the WT before going to the RST First Edition. There is a clear understanding that if they want to move lots of EV pickups, then the sweet spot is with contractors and other commercial service providers. Sure, the RST First Edition will probably have its reservation bank fully subscribed by the time you read this. But that will be a limited number of trucks. Although the margins on the RST First Edition will probably make the WT look like some sort of Dickensian orphan, the WT is going to be the thing that is going to make EV pickups a mass market phenomenon, not the RST First Edition.

It is a purpose-built pickup. The purpose is not only to have an offering in the segment, not only to provide style and functionality, but to expand the number of EVs on the road.

Which GM is committed to doing.

Still the EV Charging Question

By Gary S. Vasilash

The excitement associated with electric vehicles (EVs) in some corners makes it seem as though it is a foregone conclusion that the world is going to be full of what are, at this point in time, Teslas and vehicles that want to prove that they are better than Teslas.

When Ford announced that it was going to nearly double the production of its forthcoming F-150 Lightning, an electric pickup, to 150,000 units by mid-2023, you’d think that someone announced free beer at a football stadium. Happy days are here again!

But there are still hurdles that have to be overcome before there is massive acceptance of EVs, and a big one remains the whole issue of batteries, range and charging.

Better batteries, which have been and continue to be developed, generally means more range and faster charging.

That’s good.

But at this point there are still comparatively few charging stations, and when you see announcements of additional stations being built out by companies like Electrify America, take into account that unlike a visit to your local Fossil Fuel Emporium: Purveyor of Fine Snacks, where you spend about five minutes, the amount of time—even for the hyperfast chargers and the vehicles that can accept that level of charge—is generally on the order of 20 minutes.

So a bit of simple math has it that four liquid-fueled vehicles can be handled in the amount of time that it takes a single EV to get a charge.

Then there is the issue of what happens when a vehicle is out of fuel.

Who hasn’t seen someone walking down the road with one of those red gasoline containers, having had a vehicle run out of gas and in need of something to get it going?

A gallon of gas weighs a little over six pounds.

But what happens if an EV runs out of electricity?

Were there something analogous, it is probably going to be something that no one is going to want to lug for much of a distance.

A regular 12-volt battery such as the one that is undoubtedly under the hood of your vehicle weighs 30 pounds or more—not the sort of thing you’re going to want to carry very far.

The massive 40-mile I-95 traffic jam that occurred earlier this week in Virginia, where people were stuck in their vehicles for more than a day, has given rise to stories about how some EVs fared, and it seems not particularly well.

Yes, liquid-fueled vehicles ran out of gas.

But here’s the thing: someone can buy a five-gallon gas cannister at Walmart for about 13 bucks. The price of gas in Virginia is an average $3.15 a gallon. So to fill that container with fuel would cost $15.75. That’s less than $30 all-in. The gas would be good to get a few cars on the side of the road running.

What is the analogous answer for a Ford Lightning or another EV that is out of juice?

Interesting XPeng 2021 EV Sales Numbers

By Gary S. Vasilash

The numbers for Chinese electric vehicle manufacturer XPeng—not merely EVs, but “Smart EVs”—for 2021 are rather impressive, especially when looked at as a percentage basis compared to 2020.

As in:

  • 181% increase in the number of vehicles delivered in December 2021 vs. December 2020
  • 222% increase in deliveries in Q4 2021 vs. Q4 2020
  • 263% increase in total vehicles delivered in 2021 vs. 2020

But then when you drill down the numbers are somewhat less impressive.

  • 16,000 vehicles delivered in December 2021
  • 41,751 vehicles delivered in Q4 2021
  • 98,155 vehicles delivered in 2021

Still, directionally things are going well for the company.

XPeng P7 sport sedan. (Image: Business Wire)

The company offers both sedans and SUVs in the China market.  It is notable, as the interest in sedans in the U.S. is waning, that of its December deliveries of 16,000 vehicles, only 3,511 were SUVs—the largest share was taken by the sport and family sedans.

Another interesting thing about XPeng is that the company is building out a supercharging network—661 stations in all, located in 228 cities.

But even more notable is this: it has 311 retail outlets across 121 cities.

For a nascent company in the EV space, 311 is a lot of dealerships.

Tesla, for comparison, has about 170 galleries and showrooms in the U.S.

Not A December to Remember: At Least If You’re Shopping

By Gary S. Vasilash

Cox Automotive reports that there are two things going on in the new vehicle market right now that certainly aren’t particularly beneficial if you’re looking for something new to put in your driveway.

On the one hand, average transaction prices (ATPs) are continuing to climb. In November the ATP was $46,329, a record, and while the December number has yet to be calculated, Cox notes, “A new record in December would not be surprising.”

Then on the other hand, there are incentive programs, which are continuing to disappear.

Cox points out that in 2019 new-vehicle incentive programs reached an all-time high. This year, incentive programs have decreased month after month such that in the fourth quarter it was at the lowest point in five years.

Of course, all of this matters only if vehicles can be found.

Charlie Chesbrough, senior economist at Cox, says, “While sales in the first half of 2021 were relatively strong, the industry ran out of vehicles, and sales stalled in the second half.

“Total sales in the second-half of 2021 were the slowest in a decade. Demand is healthy, but supply and production disruptions kept the industry in check. You can’t sell what you don’t have.”

Nor can you buy what you can’t get.

So if you can, you might want to wait until next year.

Chesbrough: “Heading into 2022, we believe the supply situation will improve but it will take time to restock the shelves at dealerships.  We expect modest gains in new-vehicle sales in the first quarter, and by the second half of the year a much more robust market should emerge.”

This, of course, is dependent on things like the semiconductor issue to be solved, to say nothing of improvement in the logistics situation (i.e., shipping and trucking).

But the numbers for 2021 are improved over ’20, so. . . .

Premium Vehicle Perspective: Depends Where You Look

When looking at charts developed by French auto analyst firm Inovev of the sales of premium vehicles in the U.S., China and Europe for the first 11 months of 2021, there are a few surprises.

As in sales of 2 million in the U.S., 3 million in China and 2.5 million in Europe.

It’s not surprising that the number is higher in China than in the other two regions. After all, it has a population of 1.4 billion.

It is a little surprising that the numbers break as they do, given that the population in Europe is 748 million, which is about half of that in China and slightly more than twice the population in the U.S. The 500K increments seem strange given that.

Clearly wealth is not evenly distributed, with the U.S. having a higher proportion of its population capable of affording a premium vehicle.

But the surprising thing is the relative sales of the premium brands in the three markets.

The five three brands in the U.S. during this period are BMW, Lexus, Tesla, Mercedes and Audi. Then there is a slight falloff in numbers.

The top five brands in China are BMW, Mercedes, Audi, then a big decline (Audi is at over 600,000 units) to Tesla (at 240,000) and Cadillac.

In Europe it is BMW, Mercedes, Audi, then a big drop to Volvo (Audi: >500K; Volvo: 245K) and Tesla.

While there is consistency with BMW, Mercedes and Audi, and while Tesla is certainly on a roll, Lexus is something of an outlier. It doesn’t show up at all in the listing of sales in China and in Europe it is in ninth position, behind Lancia and just ahead of Jaguar, all of which are well below 100,000 units.

Lancia doesn’t show up at all in the sales tracking for the U.S. and China, and in the U.S. Jag is in last place and it is third from last in China.

Seems as though the German brands are consistently solid around the world while for everyone else it is somewhat random.

China Lifting Non-Domestic Ownership Rule

Right now (i.e., 12/28/21) a non-Chinese OEM that has an operation in China that isn’t building EVs can only operate through a 50-50 joint venture with a Chinese company.

In a few days (i.e., 1/1/22) that will change. Nikkei Asia reports that yesterday (i.e., 12/27/21) the Chinese Ministry of Commerce and the National Development and Reform Commission lifted the requirement as of the first of January.

Right now, there is an array of OEMs that have 50-50 joint ventures with Chinese partners.

Does this mean that they’ll suddenly buy out their partners and go for the whole thing?

Probably not.

Why?

It is undoubtedly a good thing to have a Chinese partner who can help with indigenous issues that may not be recognized by someone who is not absolutely embedded in the country and its culture. Even though a company may have people who have been in a given country for a number of years (be it China, the U.S. or anywhere else), not everything that someone who has lived there all of their lives simply knows can be understood by someone who hasn’t had that experience.

While there may be increases in the level of ownership of the various OEMs for financial reasons, odds are things aren’t going to change on a wholesale basis.

Presumably the non-Chinese OEMs have worked to develop good relationships with their partners. So there isn’t a whole lot of upside to throwing a wrench in those works.

The global auto industry is simply getting a bit more global.

CES: Yes, People Are Still Getting COVID

By Gary S. Vasilash

Auto shows, for purposes of publicity, have become passe. In terms of allowing consumers to get a chance to see a vast array of brand-new vehicles, they are great. But when it comes to getting attention from reportorial outlets, vehicle manufacturers have increasingly run the numbers and concluded that the input (the money they spend) is far in excess of the output (the amount of coverage) at auto shows.

During the past few years, OEMs have glommed on to the fact that there is a big technology show held in Las Vegas at the start of January each year, CES.

This used to be the “Consumer Electronics Show.” But the show organizers have presumably decided that it is better to be as inclusive as possible, so by using three letters rather than descriptive words, they can get more exhibitors.

As the fortunes of traditional auto shows have waned, those of CES have waxed.

So more and more automotive OEMs and suppliers have decided that CES is a place they need to be.

It doesn’t hurt that they want to be perceived, for purposes of stock valuation, as being “tech companies,” something that is a bit more difficult to pull off at a traditional auto show.

So a number of OEMs have signed up for CES.

Last January CES was entirely virtual. That was when COVID-19 was raging.

This January CES is being held in person. This will be when COVID-19 is raging.

Some tech companies came to the realization that a jammed trade show with people from all around the world (159 countries) in attendance—even though attendees must show proof of vaccination, wear masks, and get test kits along with their badges—is not a good venue while hospitals are at the breaking point with COVID cases.

Twitter, T-Mobile, Amazon, Intel, Lenovo, Google, Microsoft and Meta dropped out. Tech media outlets including TechCrunch and The Verge said they wouldn’t put their people in harm’s way.

In the automotive space General Motors and Waymo have announced they’re not going to physically participate.

The CES organizers maintain that the show must go on.

Here’s something to know: as of December 26, according to the U.S. Dept. of Health and Human Services (HHS), 84.36% of the ICU beds in Nevada are in use, of which 21.85% are for COVID patients.

Of course, were someone to attend CES and become infected they would probably back in their home locale before they became really sick.

So it should be known that HHS stats have it that in the U.S., as of December 26, 75.34% of all ICU beds are in use, of which 21.28% are in use for COVID patients.

Wonder how the ventilator supply is holding up. . . .

To say nothing of the nurses, doctors, orderlies, technicians, cleaning personnel, and all the other people who keep our medical facilities running, people who have been going through unmitigated hell because there are people and organizations that evidently are self-centered.

Yes, yes, we’re all tired of the pandemic. Yes, yes, we all want to get back to things in person. Yes, yes, plenty of people have been vaccinated.

Yes, yes, these are not normal times. Some companies clearly understand that. They clearly understand the health and safety of their people (and by extension, people who would come in contact with them) are critically important.

When companies ranging from Amazon to GM to Waymo figure CES isn’t the place to be, (1) how can other companies not come to that conclusion and (2) how can the CES organizers not understand that fact?

Electric Vehicles Need Batteries. Battery Plants Need (Cheap) Electricity

By Gary S. Vasilash

One of the key things needed for an electric vehicle is—surprise, surprise—batteries.

One of the things that OEMs are doing is not simply depending on suppliers to build the battery plants, but, in efforts to better control their supply chains, participating in the build of the factories with suppliers, such as GM and LG in Ohio and Ford and SK Innovation in Tennessee.

Ford’s $5.6 billion mega campus, BlueOval City, is not being built in Michigan. It will go up in Tennessee. One reason: electricity is cheaper there. (Image: Ford)

While GM and Ford are both headquartered in Michigan, they’ve not picked Michigan as a place to build a battery plant.

So, reports Bridge Michigan, on Wednesday the Michigan Public Service Commission voted to do something that could help make the state more appealing, and not just to the home-state OEMs:

Allow utility companies to offer industrial customers a reduced rate for electricity.

Presently industrial customers in Michigan pay 7.85 cents per kilowatt hour. Just across the border in Ohio the rate is 6.85 cents.

And for companies operating battery plants or semiconductor fabs, those pennies add up. Fast.