Equipment Utilization Matters

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One thing that doesn’t get a whole lot of attention in discussions about EVs are the volumes in the factories where they are built. . . .

By Gary S. Vasilash

In announcing its Q3 performance, General Motors did the typical approach of accentuating the positive. As the company’s sales were down 2.2% in the quarter compared with Q3 ’23 and are down 1% year-to-date compared with ’23, that wasn’t going to be it.

Rather, as Rory Harvey, GM executive vice president and president of Global Markets is quoted:

“GM’s EV portfolio is growing faster than the market because we have an all-electric vehicle for just about everybody, no matter what they like to drive.”

While in Q1 ’24 GM’s U.S. share of the EV market was 6.5%. It reached 9.5% in Q3.

Clearly its EV sales are on an upward trajectory. But multiple models can drive up production costs.

The Models

Taking BrightDrop commercial vehicles out of the picture, since January GM has sold 70,450 EVs.

Specifically:

  • 20,318 Cadillac LYRIQs
  • 15,232 Chevy Blazer EVs
  • 8,582 Bolt EV/Bolt EUVs
  • 10,785 Equinox EVs
  • 5,252 Silverado EVs
  • 8,902 GMC HUMMER EVs
  • 387 Sierra EVs

The LYRIQ is built in Spring Hill, Tennessee.

The Blazer EV is built in Ramos Arizpe, Mexico.

The Bolts are built in Orion, Michigan.

The Equinox EV is built in Ramos Arizpe.

The Silverado EV, HUMMER EV and Sierra EV are made in Detroit-Hamtramck.

Seven vehicles.

Three factories.

And some 70,450 have been built over a nine-month period.

While there is certainly some sharing of components, there are things like body stamping that aren’t common, which means dies. And the interiors of the three vehicles built at the Factory ZERO plant are different executions, though, again, there are some common parts.

But the point is, there are different costs associated with these vehicles’ production.

Capacity Utilization

Let’s say that the production capacity of an assembly plant is 250,000 vehicles per year.

A rule of thumb is that such a plant must operate at 80% capacity in order to be profitable, so that would be 200,000 units.

Even if the production of EVs doubles from the end of Q3 to the end of Q4, that’s 140,900 vehicles, or 70.45% of a 250,000-unit-capacity plant.

Now in the case of the Ramos Arizpe plant, in addition to the Chevy EVs it is producing the ICE Blazer and the Honda Prologue EV. The former has sales through Q3 of 40,545 vehicles and the latter 14,179.

So with all four of the vehicles being built there, there is an output through Q3 of 80,741.

If that number is doubled by the end of the year to 161,482 (which, of course, won’t happen), that would be about 65% capacity utilization of a 250,000-vehicle plant.

But let’s go back to the 70,450 units of GM EVs sold through Q3.

It is worth noting that during the same period there were 70,710 Chevy Colorados sold.

One model. One plant.

And it shares Wentzville Assembly with the GMC Canyon (26,956 sold through Q3, or 6,638 more vehicles than the best-selling GM EV. In fact, you could add the sales of the Silverado EV and the Sierra EV onto that LYRIQ number and it would still be short of the Canyon: 25,957.)

Profitability in EVs is going to take GM and some of its competitors a bit more than reduced battery costs.

Better Than Having the Mats Thrown In

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Ford makes it easier for EV buyers to charge at home. What do Bronco buyers get?

By Gary S. Vasilash

Earlier this year the Boston Consulting Group released a report that says, in part, “perhaps the biggest challenge for OEMs is to produce the next generation of EVs profitably. We estimate that most OEMs currently lose around $6,000 on each EV they effectively sell for $50,000, after accounting for customer tax credits.”

Given that the current generation of EVs is what’s presently on dealer lots, that’s lots of money that the legacy OEMs are spending to move the metal.

But because of the billions of dollars they have spent on building out the capacity to produce EVs, they want to keep the production lines running.

Consequently, they are coming up with things that will make EVs more appealing to customers, the $6,000 be damned.

Buy an EV. Get a charger. (Image: Ford)

Earlier this week Ford CEO Jim Farley wrote, “Cheap lease deals on electric vehicles are popping up everywhere. Ford believes it will take more than jumbo rebates to truly break through with the estimated 19 million people in the U.S. interested in electric vehicles.”

Note that he writes “it will take more”—something additive. The rebates and incentives are still part of the game.

Farley goes on to provide details on how Ford is addressing this, through what they call the “Ford Power Promise.”

To provide ease of mind for people, this includes such things as complementary roadside assistance, expanded 24/7 advisor support, and the ability to use its Plug and Charge service that allows a driver to plug in at a charging station and have the electricity charged to the driver’s FordPass account.

But perhaps most significantly, Farley writes: “Buy or lease a retail Ford Mustang Mach-E, F-150 Lightning or E-Transit and take a complimentary home charger with you or have it delivered, and when you’re ready, an expert comes out to install it at no charge for a standard install.”

That’s right: Ford is paying for customers to have home charging capability, something that costs, on average, $1,000.

This could be a clever marketing approach to getting more people in Ford EVs now (the offer expires on January 2, 2025) and presumably next-gen EVs—after all, if the charger is there, people probably figure they might as well use it.

Consider that both the Mach-E and the E-Transit qualify for the IRA tax credit of $3,750 and the F-150 Lightning the full $7,500.

Go buy an Explorer or Bronco and the only tax-related thing will be the sales tax that you’re paying.

Seems that this EV transition is not only costing the OEMs an enormous amount of money, but let’s face it: the government isn’t magically making those credits appear, so all tax payers are kicking in, as well.

About Automotive Loyalty

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Put out good products, and people will come back and buy. . .

By Gary S. Vasilash

J.D. Power has a simple way to calculate customer loyalty to a brand.

Not easy.

But simple.

That is, it gets information from some 16,000 dealers about sales.

Then it creates a subset of those sales: Those that included a customer replacing an existing vehicle with a new one.

Then it creates a subset of that: Those transactions in which the old and new are the same brand.

And so it has released its “J.D. Power 2024 U.S. Automotive Brand Loyalty Study” based on sales between September 2023 through August 2024.

The study includes some things that might be expected and some surprises.

As for the expected: Porsche is the highest-ranked Premium Car and Ford has the high-ranked Truck.

But then things get interesting.

As in the top brand for loyalty in the Premium SUV category: Lexus.

And the Mass Market SUV isn’t something from Ford or GM but Honda.

When it comes to Mass Market Car, the top two are Toyota and Honda.

Of course, when it comes to Mass Market Cars you can’t get one from Ford or GM, as they have abandoned the segment.

Here’s the thing: in the first half of 2024

  • Toyota sold 277,233 Camrys and Corollas
  • Honda sold 210,509 Accords and Civics

I suspect that both companies are making some money on those vehicles.

What’s more, as Lexus is a Toyota brand and as Honda is, well, Honda, they are doing well loyalty-wise when it comes to their SUV offerings, too.

2024 Lexus NX 450h+ AWD

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This is not something that was designed in Cupertino. . .

By Gary S. Vasilash

“Apple design” isn’t as often in the conversation today as it once was.

While for some people it was essentially just a matter of using a clean, simple white surface and a name that had the letter “i” stuck on its front, that really misses the fundamental nature of Apple design.

It came down to something that someone could use without having to read a user’s guide or manual.

What is astonishing about this is that no matter what product Apple designed—from computer to phone—it was a highly technical product, something that in the pre-Jobs period necessitated study to use.

A subtle proof that Jobs wanted people to use products right after they were unboxed is that there is a charge in that iPhone (as there had been in iPods) so that it isn’t necessary to plug it in and wait.

Its use would be both intuitive and immediate.

All of which might make you wonder what this has to do with the 2024 Lexus NX 450h+ F Sport luxury compact crossover.

It’s this:

The inside door handle is confusingly absurd. (While it would be grammatically appropriate to just use the word absurd and leave it at that, this handle takes it up a notch.)

It is a metal component that is flush with the surface of the arm rest it is embedded in. To use it it is a matter of inserting your finger into a space between the plastic housing and the handle.

But the is not just pulled once. It is necessary to pull it twice.

And to use what is ordinarily a simple lever of some sort, Lexus has added small iconic instructions on both the plastic housing (an arrow with points on each end indicating the intended movement to be achieved) and on the door pull’s top surface, a red label.

I’m sorry, but this is a horrible execution.

Is it a deal-breaker for those who might be interested in getting a nice, well-handling plug-in hybrid that features sumptuous seats and an array of safety tech and infotainment tech, a vehicle that provides an approximate 36-mile electric-only range before it reverts to a conventional series-parallel hybrid that has an EPA-estimated 36 mpg combined?

Probably not.

Although the thing is, this is something that the buyer will have to live with. Certainly it is something that she’d get used to. Certainly something that would be highly annoying were a freshly manicured fingernail to be fractured by working the handle. Certainly something that would come to mind every time the owner was in a model with a more-utile actuator.

And maybe the folks in the Lexus Handle Department got an atypical assignment and assiduously went at it.

On the outside there are what appear to be conventional door handles that you reach in from the top or bottom and pull toward you.

In the case of the NX there is a rubberized surface on the interior surface of the handle that covers an electronic button. By pulling the button is activated and the door opens.

Is this a “luxury” feature or, well, a solution to a non-existent problem?

Again, overall—from the exterior styling to the cargo capacity (22.7 cubic feet with the rear seat up; 46.9 cubic feet when folded down)—this is a nice vehicle.

It is based on the GA-K platform that it shares with the hybrid-only Toyota Venza and the Toyota RAV4—in all of its powertrain configurations—so one can have not only Lexus-level amenities with the NX, but Toyota-level reliability.

Still, this would be a better vehicle if some of the designers and engineers asked themselves, “What would Steve do?”

(Image: Lexus)

Which Vehicles Might Take NACTOY Trophies for 2025?

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Four North American Car, Truck and Utility Vehicle of the Year jurors talk about the semifinalists for the awards in a lively discussion. . .

By Gary S. Vasilash

The North American Car, Truck and Utility Vehicle of the Year (NACTOY) Award has been around since 1994. Back then, of course, utility vehicles, by and large, weren’t what they are now, vehicles, to borrow a phrase from Alfred Sloan, for every purse and purpose. So there was no category for CUVs/SUVs at the start.

But in 2017 the decision was made to add the Utility category.

That year there were three finalists:

  • Chrysler Pacifica
  • Jaguar F-Pace
  • Mazda CX-90

Oddly, the Pacifica won. (Not that it didn’t deserve an award and it is not like minivans aren’t the most package-efficient architectures, but if were to run the elementary school test, wherein you’d show a picture of a Pacifica and a Wrangler to a 10-year-old and say, “Which is the sport utility vehicle,” odds are the Pacifica wouldn’t get the nod.)

Nowadays, the Utility category is the most-contested, by far.

The Jurors

You might be wondering just who picks the winners.

Obviously, the MotorTrend Car of the Year is selected by that publication. And there is no mistake the Car and Driver 10 Best are selected by the journalists for Car and Driver.

In the case of NACTOY, there are 50 journalists from the U.S. and Canada, a mix of people working in all types of media, from ink-on-paper to YouTube to radio.

Clearly there is an array of opinions generated by this group.

Three of the current NACTOY jurors are Henry Payne, car critic for the Detroit News (yes, he reviews trucks and utilities, too), Mark Phelan, who reviews vehicles for the Detroit Free Press, and auto writer Greg Migliore.

Oh, and I am a juror, too.

I brought the three of them together to talk about the “NACTOY Best of 2025,” a.k.a., the semifinalists, on “Autoline After Hours.”

That group of vehicles will be winnowed down to three finalists in each category. The finalists will be announced in LA on November 21, and the winners at the Detroit Auto Show on January 10, 2025.

The Vehicles

The vehicles in question at the moment are:

Cars

  • BMW 3 Series
  • BMW M5
  • Cadillac Celestiq
  • Dodge Charger EV
  • Fiat 500e
  • Honda Civic Hybrid
  • Kia K4
  • Mercedes-AMG E Class
  • Porsche Panamera
  • Toyota Camry

Trucks

  • Ford Ranger
  • GMC Sierra EV
  • Ram 1500
  • Rivian R1T
  • Toyota Tacoma

Utilities

  • Chevrolet Equinox EV
  • Honda Prologue*
  • Volvo EX90
  • Hyundai Ioniq 5 N
  • Hyundai Santa Fe
  • Jeep Wagoneer S
  • Lincoln Nautilus
  • Porsche Macan EV
  • Toyota Land Cruiser
  • VW ID. Buzz

So if you’re thinking about getting a new vehicle, you might want to watch the show.

If you’re interested in a lively discussion of the offerings made by the auto industry, you certainly want to watch it.

And you can see it here.

By the way: Henry Payne goes out on the proverbial limb and names the vehicles that he thinks will win the awards. While you could simply slide that fast-forward dot on YouTube and bring it toward the end of the show to see Henry’s predictions, you’ll want to watch the whole thing to see his reasoning to get to those conclusions.

The Future of Interior Materials Is Now

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Material changes are coming fast. . .

By Gary S. Vasilash

(Image: BMW)

Although you might be thinking that the picture is a scene from Denis Vileneuve’s Arrival II, which doesn’t exist, it is actually a shot taken in the colour (yes) and materials section of the MINI Design Studio.

One of the things they are doing there is determining applications for a 2D weaving process that uses “yarn” from recycled polyester for things like the instrument panel and door panels.

While in the photo there appears to be essentially one colour (with the lighter being a reduction of the darker), according to Elena Schwörer, designer for materials and weaving, “The weaving process allows us to create unique dual-colour designs that bring a special aesthetic and atmosphere to the interior.”

For those who are familiar with interiors with surfaces that are mainly textured but uniformly molded, fabric surfaces are beginning to be used in an increasing number of vehicles.

While the tradition interior materials tend to lend themselves to cleaning with a few quick swipes of Armor All, one wonders how the fabric materials can be cleaned.

Undoubtedly Schwörer and her colleagues have that handled.

EVs: Still Waiting for that Moment

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A few thoughts from the Cox Automotive Q3 assessment. . .

By Gary S. Vasilash

While new EV sales are growing—remember, this is from a small base, so the growth in total numbers is not all that impressive—used EV sales are really doing quite well, or so the numbers from Stephanie Valdez Streaty, director of Industry Insights, Cox Automotive, who has a keen focus on EVs, indicate.

That is, year over year there is an increase of 64.4% for used EVs while new ones year-over-year it is up 12.6%.

In August there was a 90-day supply of new EVs. There was a 38-day supply for used EVs.

Still Pricey

One likely reason for the increased used EV sales is that the average transaction price in August was $35,937, compared with $56,574 for new EVs.

Realize that the now-used EVs probably had an ATP north of $56,574 when purchased new, so the buyer of a used EV is undoubtedly getting quite a well-loaded vehicle for the money.

I wonder whether a second used buyer will be all that interested in a vehicle, given concerns about battery longevity.

Leases Matter

In the new EV market leasing continues strong, Valdez Streaty noted. At 39% she says it is almost double the industry average. This probably has something to do with the ability to get IRA tax credits for EVs assembled in the U.S. And luxury vehicles, of which there are still plenty with EV powertrains, tend to have more leases than mainstream vehicles, so it makes sense to lease.

Overall Numbers

Looking at the powertrains in vehicles in August, ICE vehicles are at 81.6%, EVs at 8%, hybrids at 8.5% and PHEVs at 1.9%.

If you think about it, as OEMs began to pour money into EVs they subtracted from hybrids (e.g., the Ford Explorer had been offered with a hybrid, but the ’25 model doesn’t have one).

The company that didn’t pull back on hybrids—which actually continued to expand its offerings—is Toyota. Valez Streaty says that in Q2 2024 Toyota had 47% market share for hybrids—more than twice Honda’s second-place 20%.

Ford, it is worth noting, came in third at 14%, undoubtedly thanks to the F-150 PowerBoost Hybrid model.

Hybrids are typically referred to as a “transitional technology.”

Seems that that transition is going to take a whole lot longer than those outside Toyota anticipated.

Powering a Tugboat with Ammonia

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Cleans floors. . .and can be turned into fuel

By Gary S. Vasilash

Most people are probably familiar with ammonia in its addition to household cleaning products—the ones that really smell, well, like something.

The biggest use on ammonia is not to help keep surfaces clean but in fertilizers, which accounts for about 90% of its use.

Tugboat powered by ammonia. (There is a little chemistry involved, of course.) (Image: Amogy)

But a company named Amogy, headquartered in Brooklyn, New York has another idea for where ammonia can be used: as a marine fuel.

But not as just any marine fuel, but one that is carbon-free.

To prove its viability Amogy retrofitted a tugboat built in 1957 with it ammonia-to-electrical power system.

The tugboat, renamed the NH3 Kraken, was then sent out on a voyage on a tributary of the Hudson River.

The name of the vessel, incidentally, is predicated on the chemical formula of ammonia.

The way its system works is that it cracks the nitrogen from the hydrogen, with the latter then being used in a fuel cell that generates electricity that powers the boat.

Further underscoring its environmental correctitude, green ammonia—made with renewable energy—was used on the NH3 Kraken.

According to Seonghoon Woo, CEO and co-founder of Amogy, “Ammonia is the world’s second most produced chemical, with around 20 million tons moving around the globe through 200 ports per year.”

Which sounds as though there is something of a nautical infrastructure, or at least one that could probably be brought up fairly quickly.

That said, the International Maritime Organization is targeting net-zero emissions by 2050, so there’s evidently some time.

2024 Mazda3 2.5T Premium Plus Sedan AWD

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By Gary S. Vasilash

Here’s something interesting: the model year 2004 Mazda3 was the first of the first generation of Mazda’s compact car, which means the one considered here is what has occurred to it 20 years later.

Interestingly, there was a four-cylinder engine, as there is now, but whereas the 2.3-liter four in the early Mazda3 produced 160 hp, the turbocharged 2.5-liter engine in today’s model produces 250 hp running premium fuel or 227 hp should one opt for regular. (In the early models, the base engine was a 2.0-liter that produced 148 hp; the base engine for the ’24 models is the naturally aspirated 2.5-liter that produces 191 hp—regardless of octane (well, it at least has to be 87 octane)).

Mazda3: a compact car that’s competent but comparatively pricy. (Image: Mazda)

But bringing it just back to now, know that the Mazda3 2.5 Turbo (there is also a Carbon Turbo) is equipped with a six-speed automatic. (There is a six-speed manual for the other trims. And of that manual, one can only think: For now.*)

The Premium Plus trim is the top-of-the-line.

As such it has some exterior design differences from other models in the lineup. Mazda designers have consistently done superlative work over the past several years.

The front end of the Mazda3 has an appearance that is stylish, sophisticated and sporty, a trifecta that is difficult to pull off.

However when you get to the C-pillar and back things are not quite as good, which is predicated on the fact that it is difficult to style a compact sedan in a way that looks proportionate throughout, especially as there is a need to keep the roofline somewhat high in order to give people who sit in the rear some headroom.

Hatchbacks, like the Mazda3 hatch, lend themselves to a more cohesive design—which leads to a market curiosity: Hatches simply aren’t particularly popular.

(What is odd about that is “utility” vehicles are wildly popular.

And hatchbacks generally provide more utility, at least vis-à-vis cargo capacity.

In the case of the Mazda3, the sedan has EPA cargo volume of 13.2 cubic feet and the Mazda3 hatch has 20.1 cubic feet of capacity.

And while it might be assumed the increase in cargo capacity for the hatch is based on reducing passenger volume, the difference in passenger volume is a reduction of 0.1 cubic feet for the hatch, 92.7 cubic feet compared with 92.8 cubic feet.)

To resume.

The Mazda3 sedan is 183.5 inches long, 70.7 inches wide, and 56.9 inches high. It has a 107.3-inch wheelbase. Which is approximately the same size of other vehicles in its class (e.g., Toyota Corolla, Honda Civic).

The Premium Plus trim includes features like paddle shifters; keyless entry; wireless Android Auto and Apple CarPlay; a 12-speaker Bose audio system; 10.25-inch color center display; radar cruise control with stop and go capability; lane departure warning and lane keep assist; and more.

An issue with the Mazda3 Premium Plus is pricing. It starts at $35,800. The somewhat comparable top-of-the-line ’24 Civic Touring starts at $30,550. But it doesn’t have AWD. And the somewhat comparable Toyota Corolla Hybrid Nightshade AWD starts at $28,340. But as its name indicates, it is a hybrid.

In fact, the starting price for a ’24 Camry SE Nightshade AWD—not a hybrid—starts at $5,540 less than the Mazda3.

Mazda needs to work on its pricing.

*What is sad is that there is only one other car in the current Mazda lineup, the MX-5 Miata, with a manual gearbox. Through the first half of 2024 there were 4,004 MX-5s sold. Say you’re a Mazda exec in Hiroshima HQ and you see that number and note that with the exception of the just-released CX-70, the worst-selling Mazda crossover during the first half was the top-of-the-line CX-90, which had sales of 22,959 units—or 1,128 more than all of the cars (well, there are just the Mazda3 and MX-5) combined (21,831). Somehow that 4,004 doesn’t look all that worthwhile for the engineering and testing necessary for a manual.

ZF Improves Hydrogen Systems

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Putting unused hydrogen back into the system. . .

By Gary S. Vasilash

Although there is a concern regarding fuel efficiency when it comes to petroleum-powered vehicles, when using alternative forms of “fuel,” like hydrogen, making sure that the most is made of it is arguably even more important—after all, the price of hydrogen in the U.S. is over $30 per kilogram, with a kilogram being approximately equivalent to a gallon of gasoline.

To that end, ZF has developed a hydrogen recirculation blower.

ZF Hydrogen Recirculation Blower improves hydrogen consumption in FCEV commercial vehicles. (Image: ZF)

Essentially, it recirculates unused hydrogen back into the fuel cell by using a an electric motor that can operate at speeds up to 100,000 rpm to essentially blow the hydrogen back into the stack.

Because at the outgoing side of the fuel cell stack there is water (that’s the emissions from a hydrogen fuel cell: air contains oxygen, and as you recall from high school chemistry, hydrogen + oxygen form H2O) there is a water separator that not only keeps things from getting all wet, but serves as a coolant.

The recirculator has been engineered for use in commercial vehicles and will undoubtedly find application in Europe, where more fuel cell electric trucks are being introduced.

The price of hydrogen in Europe is competitive with the cost of fuels for thermal engines, and the amount of time it takes to refuel a hydrogen vehicle is approximately that of a liquid-fueled truck (compared to the l-o-n-g time to recharge a battery electric truck), so it makes sense that fleet operators would be interested in hydrogen as they lower their carbon emissions.

Just imagine how important this would be in places where hydrogen is exceedingly expensive compared to other fuels.