OEMs Chasing the Well-Heeled

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Higher margins matter. For now. . .

By Gary S. Vasilash

One of the issues that consumers face in the new-car market in the U.S. is the non-trivial sticker price. According to Kelley Blue Book, the average transaction price for a new vehicle was $48,397 in September.

Charlie Chesbrough, Cox Automotive Senior Economist, said of the number, “One reason transaction prices are lower in 2024 is that many buyers are choosing smaller, less expensive vehicles. The subcompact and compact SUV segments are outperforming the market this year, and by no coincidence, they’re also two of the lowest-priced product segments in the market.”

Two points about that:

  1. It is surprising to think that prices are “lower in 2024” when that number is above $48K.
  2. Subcompact and compact SUVs are growing in popularity, but it seems the likes of GM and Ford are still more interested in the other end of the spectrum, which helps with their earnings now, but perhaps not for the long run, when people simply can no longer accept high monthly payments. (Given the number of large, expensive vehicles that are still being sold, it is clear many people continue to be accepting. But at some point other bills are going to take precedence. After all, when the average monthly car payment is on the order of $750, and the Bureau of Labor Statics found that car insurance premiums increased an average 20% between June 2023 and June 2024, something’s got to give.)

This phenomenon of going for the upper end of the market is not just one in the U.S.

Renault Rafale E-Tech 4×4 with the Atelier Alpine features a chassis and agility control system developed by the engineers of Alpine Cars. There is a self-adjusting ting smart suspension with a camera for predictive control. (Photo Clément Choulot / DPPI)

Renault just introduced a new plug-in hybrid crossover, the Rafale E-Tech 4×4. It is a 300-hp vehicle that has a 22-kWh battery that the company says can power the car some 105 km (65 miles) on the European WLTP schedule (which is different than the EPA).

What did Bruno Vanel, VP, Renault Brand, Product, Revenue & International Markets Expansion, say of the new vehicle represents? It “symbolizes our move upmarket and our legitimacy to conquer all customers with a high-performance version.”

When you think of European vehicles that are (1) upmarket and (2) high performance, odds are something from BMW comes to mind. And this is probably the case in France, as well.

But Renault wants some of those higher margins, too.

The Mixed Signals on Robotaxis

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Those who have been in them like them, but then there is consumer readiness, which isn’t much. . .

By Gary S. Vasilash

Although Waymo vehicles are transporting people in places like San Francisco and Phoenix with vehicles that are without a driver in command and while Tesla showed off its steering wheel- and pedals-free Cybercab, presumably for any of these to be commercially viable (i.e., allow the operators to make money), then there has to be a significant number of people taking advantage of the autonomous rides.

The J.D. Power 2024 Robotaxi Experience Study showed that those who have taken a ride in a self-driving vehicle feel good about the experience: 76% are confident in the vehicles after they’ve been in one compared with 20% who haven’t had the experience feeling confident about them.

However, another study—the J.D. Power 2024 U.S. Mobility Confidence Index Study, shows that on a 100-point scale, the score for “consumer automated vehicle readiness” is at 39. That’s two points better than in 2023, but it is where it had been in 2022.

One of the interesting findings this study goes to the point of insurance. While 71% of consumers say they don’t expect to acquire insurance on a pay-per-ride basis when using a robotaxi (did you ever think about acquiring insurance when getting in an Uber or on a bus?), 57% say they expect the vehicle owner to have liability coverage for the self-driving vehicle.

And while the Cybercab is designed without a steering wheel or pedals, 86% of the people surveyed by J.D. Power say they want the ability to take control of the vehicle if required. . .which seems to indicate the requirement for a steering wheel and pedals.

Faraday Future Is Hiring!

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EV company is launching a second brand. . .perhaps

By Gary S. Vasilash

If there was an ROI for persistence, Faraday Future would have a market cap that would rival Tesla’s.

The company—which says it is developing AIEVs, as in “advanced intelligent electric vehicles”—first showed off a vehicle at CES, the FFZERO1, in 2016.

The following year, again at CES, the FF 91, its first “production” model was shown.

Apparently, what happens in Vegas really does stay in Vegas, because it has taken a long time for there to be any Faraday Future product on roads not associated with a glitzy intro.

In 2023 the company reportedly sold four FF 91s and leased six.

For the entire year.

The Faraday Future website allows the preordering of the FF 91 2.0 Futurist Alliance, a name that sounds like it comes out of some Star Wars knockoff.

It has a range of 381 miles, a top speed of 155 mph, and there will be just 300 produced. Globally.

The base price?

$309,000.

Although it is not an AIEV, I suspect that the Rolls-Royce Wraith might be an even more exotic expenditure of ~$300K.

But back to persistence.

Faraday Future has announced that it is hiring for a second brand, Faraday X.

Positions including production planning director and head of vehicle engineering.

The second brand is meant to create vehicles that offer “twice the performance at half the price”—but half the price of things that aren’t the FF 91 2.0 Futurist Alliance.

The FX 5 model will have an “expected price range” of $20,000 to $30,000. The FX 6 will be at $30,000 to $50,000.

There will be two powertrain types: a range-extended EV and a battery electric.

Faraday Future anticipates the vehicles will be in production by the end of 2025—“subject to securing necessary funding.”

Celebrating Auric Goldfinger?

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Yes, it is the 60th anniversary. But he wasn’t a very nice man. . .

By Gary S. Vasilash

In the movie version Goldfinger, the character Jill Masterson dies because she is painted gold. That led to her death by asphyxiation because she helped out James Bond. Auric Goldfinger, the villain in the movie, was not to be trifled with.

Simply put, he was a bad guy.

“For a golden girl knows when he’s kissed her
It’s the kiss of death from Mister Goldfinger. . .” (Image: Rolls-Royce)

Which makes it odd that Rolls-Royce has developed the Phantom Goldfinger, a one-off extended model that is a tribute to the 1937 Phantom III Sedanca de Ville that the villain had in the movie. (It was used to smuggle gold, as it had body panels made of the stuff, which would have meant a rather hefty motor car, estimated to be on the order of two tonnes.)

Because Bond and Goldfinger have their first encounter at a golf course, there is a gold-plated putter affixed to the underside of the trunk lid. The club has an “AG” monogram, which is a refence to the signet ring that Goldfinger wears.

The master plan of the villain is to set off a nuclear device at Fort Knox so that all of the gold stored there would be useless (the film was released in 1964; while Franklin Roosevelt took the U.S. off of the gold standard in 1933 for domestic transactions, it wasn’t until 1971 that Richard Nixon ended international convertibility of the dollar to gold). Consequently the villain would be wealthier.

Seems strange that Rolls-Royce would be so chuffed about celebrating a villain who once threatened James Bond with a laser beam.

About Battery Timing

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At some point will it be analogous to buying Duracell, Eveready or Kirkland. . . ?

By Gary S. Vasilash

Compared with GM and Ford, the other company in the “Detroit 3,” Stellantis North America, which is still simply referred to as “Chrysler” in southeastern Michigan, is behind the curve when it comes to electric vehicles.

You can buy or lease an EV from GM or Ford.

But so far, with the exception of the exceptionally limited Fiat 500e (limited as in having a range of 149 miles, which is about half of what many people are interested in when thinking about an EV), there is no mainstream EV available from Chrysler, Dodge, Jeep, Ram, or Alfa Romeo.

But earlier this week it announced that NextStar Energy, a joint venture between Stellantis and LG Energy Solution, has started battery module production in its plant in Windsor, Ontario. Next year it plans to launch cell manufacturing.

The Dodge Charger, electric version. (Image: Dodge)

And the company also announced that it will be operating a demo fleet of Dodge Charger Daytona EVs with solid-state batteries from Factorial, a battery company that it has invested $75-million in.

What is interesting about the Factorial battery is that the company claims they’re working for a range of 600+ miles from a battery that is 33% smaller and 40% lighter than a conventional lithium-ion battery.

However, that fleet won’t go into operation until 2026.

So presumably if all goes well, it would still take some time before the Factorial tech makes its way into production vehicles, which explains why there is the production at NextStar Energy: they’re going to need something sooner rather than later.

Factorial is also working with Mercede-Benz. The two companies announced last month the development of a new solid-state battery technology, about which Markus Schäfer, Chief Technology Officer and Member of the Board of Management at Mercedes-Benz Group AG, said: “The Solstice solid-state battery technology represents another landmark milestone in our partnership with Factorial, which is a cornerstone of Mercedes-Benz’s strategy and commitment to leading the charge in battery development. Solstice offers further improvements in energy density and safety features that will help us develop electric vehicles that set new standards in range, cost, and performance.”

Note the future tense of “will.” Not now. But sometime.

In the meantime Mercedes gets batteries from companies including LG Energy Solution and CATL.

Mercedes, like Stellantis, has had a joint-development arrangement with Factorial since 2021.

So at some point in the future will the situation be that multiple OEMs will have access to the same battery technology and so there will be differentiators required other than charging time and range?

About Used EVs

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What are buyers/intenders interested in?

By Gary S. Vasilash

Carvana, the purveyor of used vehicles, has discovered that EV investigators are spending more time searching based on a 226% increase in the number of page views on its site for the vehicles compared to Q3 2023.

The top five vehicles, according to its “EV Trends Report,” searched for are:

  • Tesla Model 3
  • Ford Mustang MACH-E
  • Hyundai IONIQ 5
  • Kia EV 6
  • Nissan LEAF

Given that there are hundreds of thousands of Model 3s out there right now, it shouldn’t come as much of a surprise that people are looking, perhaps, to score a deal on a pre-owned one.

The LEAF’s long time in market probably helps explain its presence.

But it is somewhat surprising that given that the IONIQ 5 and EV 6 are comparatively new (the Hyundai came out in December 2021 and the Kia in January 2022), they are on the list, not the Chevy Bolt, which was launched in December 2016, so there are undoubtedly more of them available on the used market.

But that is clearly ICE thinking.

Carvana found that the average model year search range for EVs was from 2020 to 2023. The average search range for ICE vehicles was 2018 to 2023.

So potential used EV buyers are interested in what’s newer.

What are the features EV searchers are interested in?

  • Third-row seat
  • Heated steering wheel
  • Apple CarPlay
  • Sunroof
  • Adaptive cruise control

Features that indicate EVs are being generally perceived as being a “regular vehicle”: ICE searchers were also interested in third-row seating and a sunroof. Rather than a heated steering wheel, it is heated seats. And Apple CarPlay and adaptive cruise are replaced by a rear-view camera and a tow hitch. (Perhaps the last-named has something to do with why the F-150 Lightning was knocked off the list and the MACH-E on it: towing with an EV is not particularly good, so EV intenders probably are no longer interested in that possibility.)

Steel and Emissions

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Often EVs are made with steel. And steel production means CO2 emissions. . .

By Gary S. Vasilash

When people think about reducing vehicular emissions, the first—and likely only—thought is about either what comes out of the tailpipe or whether there is a tailpipe (i.e., the first in the hybrid category and the second in the EV category).

But consider what most cars, crossovers and trucks are made with: steel.

And steelmaking is a carbon-intensive process. It is estimated that steel-making accounts for about 8% of global CO2 emissions, which is just a couple of percentage points behind the auto industry (though that’s both production and use: steel is calculated on the basis of just production).

Volkswagen Group in Germany is doing something to reduce its Scope 3 (things it buys from the supply chain emissions).

It signed a memorandum of understanding with Thyssenkrupp Steel under which the latter will provide the former with low-carbon steel.

Thyssenkrupp Steel is to open a direct reduction steel plant in 2027 that will use hydrogen and green electricity to produce what it calls “bluemint Steel.”

This will be certified under various organizations as being low carbon.

Volkswagen group calculates that 15 to 20 percent of an EV’s CO2 emissions are related to the steel used in its production.

So in order to reach carbon neutrality by 2050 it has to start vigorously reducing its CO2 emissions across the board.

Mercedes Closing the EV Battery Loop

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Opens recycling plant in Germany. But given the longevity of its vehicles, it may take a while for there to be an ROI, even with the cost of battery materials. . .

By Gary S. Vasilah

As is well known the battery in an electric vehicle is the priciest part of the vehicle.

That’s because of the raw materials that the battery is made of. Things like lithium, nickel and cobalt.

Contrast that with an internal combustion engine, which has a block made out of an aluminum alloy or an iron variant. The cost of a pound of nodular iron to produce an engine block is about 10 cents and an aluminum alloy for a block about twice that.

The cost of the aforementioned battery materials are much, much higher.

So while recycling of iron and aluminum is common—after all, there are literally billions of light-duty vehicles that have been built in the last 20 years alone, so there’s a lot of recycle—it is still early stages for recycling electric vehicle batteries.

To that end, Mercedes-Benz has just opened a battery recycling plant in Kuppenheim, Germany.

Inside the Mercedes battery recycling plant in Germany. (Image: Mercedes-Benz)

It is based on something called “an integrated mechanical-hydrometallurgical process” that is said to have a material recovery rate of >96%.

Apparently the mechanical part includes shredding, sorting and separating. The hydrometallurgical process separates out the cobalt, nickel and lithium.

Compared to the pyrometallurgic process that is used by others in Europe, the Mercedes’ approach is said to be less energy-intensive and because green electricity is used to power the plant, it is also net carbon-neutral.

The plant has an annual capacity of 2,500 tonnes that results in materials that can be used to produce 50,000 battery modules.

According to Mercedes it has invested “tens of millions of euros” to build the plant.

In reporting its 2024 third-quarter earnings the company noted: “The market environment for battery electric vehicle (BEV) sales remained subdued with competitive pricing in important markets.” Globally, the group has sold 148,500 electric vehicles so far this year.

Clearly this integrated mechanical-hydrometallurgical process is part of the long game, because it will take a while for the Mercedes EVs to be taken to the scrap yard in considerable numbers.

What E-Truck Did BMW Pick?

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Its passenger vehicle competitors make big rigs. BMW doesn’t. . .

By Gary S. Vasilash

Although Mercedes and Audi (well, as in its owner, Volkswagen Group) make semitrucks, BMW doesn’t.

BMW announced that to bring components to its battery production operation at BMW Group Plant Leipzig, it is using two trucks to shuttle between the factory and a logistics center.

To make this appropriate, the trucks are electric.

So where did BMW source the trucks?

Mack? Peterbilt?

Nope.

Designwerk.

BMW uses e-truck to deliver e-components. (Image: BMW)

The company was founded in 2008. Its first vehicle launched in 2009: a three-wheel mail delivery vehicle.

It began work on commercial trucks in 2018 and now has models ranging from 18 to 44 tons.

However, the trucks are based on Volvo FM, Volvo FMX and Volvo FH series chassis.

Designwerk also offers one based on “the low-entry chassis of the Econic from Daimler Trucks AG.”

The trucks in the BMW application are based on the Volvo chassis.

An interesting thing: Volvo Group—the company that builds commercial vehicles, not the Volvo that makes passenger vehicles—bought 60% of Designwerk in 2021.

About Lawn Mowers

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Although it is Fall in the Northern Hemisphere, now’s the time when new lawn and garden equipment debuts for the following Spring. . .

By Gary S. Vasilash

A few years ago I had a Honda push mower in my garage collecting cobwebs. Circumstantial changes had caused me to engage a service to get the lawn clipped.

After many years that included many mowers, from Snapper to John Deere, the Honda was both my ultimate and final mower. (Let’s face it: they weren’t inexpensive—when you could go to the local hardware store and get one from about two hundred bucks and there was quite a comparative premium for the Honda, that was a tough choice. And I’d opted for a non-self-propelled model to keep the cost down.)

But in the garage it sat. Neglected.

A nephew bought a house in the spring. It was on a somewhat large lot.

As I knew that his finances were stretched, I offered him the Honda, pointing out that I hadn’t done the recommended procedures for maintain a mower in storage (i.e., one day, after a cut, I put it in the garage, and that was that). I didn’t know if it would even turn over.

I cleaned it off with a rag and he picked it up.

Later that day he texted me a video showing him mowing.

Money well spent.

Honda started producing gas-powered lawn mowers in 1978. It stopped in producing its “award-winning HRX, HRN and HRC gas-powered lawn mowers due to multiple factors, including stricter environmental regulations, shifting customer preferences and the need to align local manufacturing resources around other products in high demand.”

Honda goes electric for the lawan. (Image: Honda)

Given what’s going on in the weather, odds are the “other products in high demand” in the Honda Power Sports & Products portfolio are its generators.

And it is worth noting that Honda is working toward having 100% of its auto sales in the U.S. be battery- or fuel cell-electric vehicles by 2040. While Honda mower engines do go beyond CARB/EPA emissions standards, somehow a loud power mower cutting the lawn next to a Prologue or ZDX in the driveway would seem off-brand for that goal.

This week Honda introduced the HRX-BV, HRX-BE, and HRN-BV electric mowers for residential use.

Said Mark Kohls, vice president of Honda Power Sports & Products, American Honda Motor Co., Inc., about the development of the new mowers (and there is a commercial model, too) “Reducing greenhouse gas emissions is only part of the challenge, as battery-powered power products must meet Honda standards for rugged performance, ease of use and comfortable operation to meet the high expectations of our residential and commercial customers.”

I wonder: Years from now my nephew will undoubtedly move to an electric mower.

And if he does, and the mower goes into his garage for a few years unused, will he be able to gift it to his nephew who will get the same results that were achieved with the mower that had been mine?