How Will February Look Sales-Wise?

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By Gary S. Vasilash

J.D. Power and GlobalData project that February sales will come in a smidge—1.4%–more than they were in February 2023, or 1,214,600 vehicles

Taking out non-retail transactions, the number is 981,300, which is the important number because that reflects individual consumers.

So using that as the basis of comparison, there is an increase of 3.8% compared to the same month last year.

One of the reasons for the rise this year is something that happens once every four years: an additional day of sales, February 29.

According to Thomas King, president of the data and analytics division at J.D. Power, the increase in sales is facilitated by:

  • Higher inventory levels (when there are cars on the lot, then there is less pressure to have to select whatever is available from a paltry number)
  • Higher manufacturer incentives (turns out that there is a need to provide a boost to get the sheet metal moving)
  • Lower dealer profit margins (seems that the profits that were rolling in when choice was minimal so prices were maximal are now trending back to normal—but it is worth noting that about 17% of vehicles are still selling above MSRP, although last year it was nearly 32%)

What this means is that people are getting bullishly back in the market.

King:

“Transaction prices in February are trending towards $44,045, down $1,919 or 4.2%—from February 2023. However, despite the significant decline in average transaction prices, higher sales volumes mean consumers are on track to spend nearly $40.8 billion on new vehicles this month—the highest on record for the month of February, and 4.1% higher than February 2023.”

Could be a case of the proverbial “making it up on volume.”

Nowadays, it is impossible not to look at how things are going in terms of EV sales.

Elizabeth Krear, vice president, electric vehicle practice at J.D. Power, said, “In 2023, EV sales and leases accounted for a larger percentage of retail auto industry growth than gas-powered vehicles.”

Presumably that has something to do with the fact that there is a stable number of gas-powered vehicles so the growth would not be as big as that of EVs, which start from a comparatively smaller number.”

She acknowledged what is now frequently heard: EV sales are slowing.

Putting some numbers to it:

“In January, battery electric vehicle sales fell 1.6 percentage points from 9.2% in December 2023. Further, upper-funnel EV shopper interest declined for a fourth consecutive month. New-vehicle shoppers who are ‘very likely’ to consider purchasing an EV for their next vehicle dropped to 25.6%, a full percentage point lower than in December.”

Krear said that a big blockage for EV buyers: charging access.

While she noted that the opening of the Tesla Supercharger network will go a long way toward addressing that issue, she added, “But this alone is not enough to move the needle. Improvement is needed in terms of the availability of affordable EVs for mainstream customers.”

Yes, it all comes down to an affordable MSRP.

The EV Market and the Necessity of Time (and Money)

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By Gary S. Vasilash

While John Heywood’s A Dialogue Conteinyng the Nomber in Effect of all the Prouerbes in the Englishe Tongue (c. 1538) isn’t the sort of thing that is likely read outside the walls of Oxford or Cambridge, there is one phrase from that source that is if not commonly used, certainly familiar:

“Rome wasn’t built in a day.”

This came to mind in relation to a comment made by Rivian CEO RJ Scaringe during the announcement of the EV company’s 2023 earnings—or lack thereof (it had net losses of $5.4 billion—which it at least better than 2022’s $6.8 billion).

Rivian R1S (Image: Rivian)

Scaringe:

“We firmly believe in the full electrification of the automotive industry, but recognize in the short-term, the challenging macro-economic conditions.”

This in relation to the announcement that approximately 10% of its salaried workers are going to be let go.

Wall Street thinks short term. Technology change can take longer. Much longer.

According to History.com:

“The number of active automobile manufacturers dropped from 253 in 1908 to only 44 in 1929, with about 80 percent of the industry’s output accounted for by Ford, General Motors, and Chrysler.”

That means that 41 manufacturers had 20% of the market.

Unfortunately for them, on October 29, 1929 there was Black Tuesday, a.k.a., the Stock Market Crash.

And the number of vehicle manufacturers crashed, accordingly.

We are now in a period that is somewhat analogous to 1908 on its way to 1929, with there being a number of start ups—including Rivian—in the EV market space.

A difference is that Ford, General Motors and Chrysler (yes, yes, Stellantis) don’t have a huge scale advantage in EVs, as they have single-digit shares of the EV market (yes, 0 is a single digit; Stellantis will soon bump that up).

Let’s face it: EVs are still costly to produce, not only because they are a comparatively new thing, but because the things that go into them are more expensive to make (while this is admittedly a trivial example: it is a hell of a lot cheaper to blow mold a gas tank than it is to manufacture an EV battery case).

And because of that, it is going to take time for manufacturers to make money on making vehicles (according to Electrek, Rivian lost $43,372 for every vehicle it delivered in Q4 2023—which is certainly better than the $124,162 per vehicle it lost in Q4 2022).

For some the time will run out because the money will have.

Going Rare Earth-Free for Magnets

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By Gary S. Vasilash

The rare earth elements—of which there are 17, and since there are 118 elements on the Periodic Table, that number of rare earth elements is certainly not rare—are of increasing interest with the growth of electric vehicles.

EV motors use permanent magnets and permanent magnets are made with elements including neodymium and dysprosium.

There are at least a couple issues related to rare earths:

  1. They may be mined in places that are socially and politically unstable
  2. While there are things like neodymium found in the U.S., much of the processing capacity for the rare earths is located in China, so for OEMs to be able to get the full federal tax credit for EVs, sourcing from China is a no-go
(Image: Niron Magnetics)

Niron Magnetics, based in Minnesota, has developed what it claims are “the world’s first high-performance, rare earth-free permanent magnets” is drawing investments from automotive companies like, well, magnets draw iron filings.

It has obtained investments from GM Ventures, Stellantis Ventures, Volvo Cars Tech Fund, and most recently Allison Ventures (the venture capital arm of Allison Transmission) and automotive supplier Magna.

To produce its “Clean Earth Magnet,” which is based on iron nitride—a combination of iron and nitrogen, of which there is an abundance in the world—it uses nanomaterial engineering to carefully manipulate the crystals in the iron nitride.

According to Niron, the magnets provide such high magnetization that it is possible to design EV motors that use 15 to 30% less magnetic material, which can mean smaller, more efficient motors.

Smaller, lighter motors can then have a knock-on effect of reducing the size and mass of other elements in the EV.

So this is a win on many fronts, from economic to performance.

Euro Auto Sales Fun Fact

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In 2023 Nissan sold 343,891 vehicles in Europe, a 20.1% increase over its sales there in 2022, according to Inovev.

In 2023 Chinese brands sold 353,276 vehicles—“mainly based on BEVs”—in Europe, more than double their sales there in 2022.

The MG MG4 EV: second only to the Tesla Model Y in U.K. 2023 sales. MG is owned by Shanghai-based SAIC Motor. (Image: MG)

Nissan, which has been around in the European market for a while (and had been affiliated with Renault until last year), is already surpassed by a phalanx of Chinese OEMs. (Yes, this is one company vs. several, but looked at from the point of view of sheet metal moved, it is still worth pondering.)

Maybe if you’re Stellantis or Renault or Volkswagen this isn’t a particularly fun fact.

And maybe this will portend things happening at some point in the U.S., as well.

GM Super Cruise: To the Moon!

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By Gary S. Vasilash

As you’ve probably noticed, when you look at the Moon overhead, it generally appears to be about the size of a dime. When you look at it near the horizon, it appears massive. Which might lead you to believe that the Moon radically changes its distance with the Earth.

It doesn’t.

The Moon is 238,855 miles from the Earth whether it appears so close that you think you could drive to it or not.

Walking on the Moon. (Image: NASA)

This astronomical moment leads to General Motors’ announcement that it has increased the capability of its Super Cruise advanced driver assistance system that permits hands-free driving to 750,000 miles of roadways in the U.S. and Canada.

It claims that it is nearly six times the capability of any other hands-free driver assistance system available in North America.

It also says, “750,000 miles is like traveling one way from Earth to the Moon three times” [emphasis not added, its GM’s].

GM is adding the capability to handle the new roads via over-the-air updates to Super Cruise vehicles that are currently roaming the road except for three: the Cadillac CT6, Chevrolet Bolt EUV and Cadillac XT6.

Why are those three left out?

A GM spokesperson tells us that it is because those three vehicles have an older electrical system that’s incapable of handling the update.

Still, they are capable of providing some 400,000 miles of roads, so that’s a trip to the Moon and about 70% of the way back.

Not bad at all.

Fisker Faces NYSE Issue

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By Gary S. Vasilash

On February 17, 2023, Fisker’s stock closed at $6.98. (For unrealistic comparison purposes, Tesla, that day: $208.31.)

On February 16, 2024, Fisker’s stock closed at $0.73. (Tesla: $199.95. Certainly not the halcyon number of days of yore, but still pretty damn good.)

On February 15, 2024, Fisker received a notice from the New York Stock Exchange.

In it, the NYSE pointed out that because Fisker’s common stock had traded at less than $1.00 per share for a consecutive 30 trading-day period, it is out of compliance with the rules of the exchange and could be delisted as a result.

This doesn’t mean that that is going to happen.

Fisker will tell the NYSE within 10 business days what its plan is is to get back into compliance.

There is a six-month “cure period” that the company has to get things in order (a.k.a., getting its stock price to at least an average of $1.00 per share for 30 consecutive trading days).

According to Fisker:

“The Company intends to remain listed on the NYSE and is considering all available options to regain compliance with the NYSE’s continued listing standards, including, but not limited to, a reverse stock split, subject to stockholder approval no later than at the Company’s next annual meeting of stockholders.”

It didn’t seem all that long ago that EVs were going to be a market—as in both the consumer and financial variants—winner for those involved.

Things are clearly not what they seemed.

Good News on the Fuel Cell Front

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By Gary S. Vasilash

Although hydrogen fuel cell enthusiasts are probably saddened by Shell’s announcement that it is shutting off the valves at its hydrogen refueling stations in California, there was some good news this week—albeit not exactly for those who are driving Toyota Mirais or Honda Claritys in SoCal.

Extreme E, the off-road FIA-sanctioned racing series in which electric vehicles are run, is transitioning to Extreme H, which will swap out battery power for fuel cells next year.

So Extreme E becomes Extreme H.

Racing with hydrogen. (Image: Extreme E. Soon to be Extreme H)

But the good news is that the series and Symbio have announced that the latter will become the “Official Hydrogen Fuel Cell” provider to Extreme H.

Symbio?

It is a Europe-based company established by Michelin, Stellantis and Forvia (each company owns a third) that is dedicated to fuel cell systems.

In December 2023 Symbio opened SymphonHy, a gigafactory in France that currently has the production capacity to produce 16,000 fuel cells. It expects to expand that number to 50,000 by 2026.

Notably, Symbio partner company Stellantis has announced that it is developing hydrogen tech for Ram brand pickups. It already offers hydrogen versions of Peugeot, Citroen and Opel commercial vehicles in Europe.

Using hydrogen for Ram could be a proverbial game-changer.

And speaking of games (OK, a sport): If nothing else, the affiliation with the Extreme H racing series will provide attention to the tech.

Extreme E is having a race in Phoenix this year, so assuming that goes well, the U.S. will be part of the series.

Perhaps Extreme H will make more people in the U.S. interested in the possibility of fuel cells in place of battery electrics.

And maybe those Shell hydrogen stations will be reopened or replaced.

The Ford 180

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By Gary S. Vasilash

“Ford has shifted its electric vehicle strategy so it concentrates on smaller, lower priced EVs and electric work vehicles such as pickup trucks and full-size vans, Farley said. Any EV larger than a Ford Escape small SUV ‘better be really functional or a work vehicle.’”

That is from an AP story by Tom Krisher about a presentation Ford CEO Jim Farley gave to the Wolfe Research Global Auto Conference in New York on February 15.

Farley also talked about the relationship between Ford and the UAW in light of last fall’s strike.

Farley said, “Our reliance on the UAW”—it has more UAW members that either GM or Stellantis—“turned out to be we were the first truck plant to be shut down.”

He was referring to the Kentucky Truck Plant, Ford’s largest plant and where the highly profitable F-Series Super Duty, Ford Expedition and Lincoln Navigator are produced.

Ford has pretty much placed its production bets in North America on things like the F-Series.

The only car the company has on offer in the U.S. is the Mustang, not exactly what one would describe as a “family vehicle,” so arguably it is something of a niche at most. Trucks and utes are where it is at, it seems, for the Blue Oval.

In the smallish category there are the Escape and the Bronco Sport, which are both based on the same platform. And the Maverick pickup truck, which is also based on the same C2 platform. This extremely popular pickup is built at a Ford plant in Hermosillo,Mexico, so some of Farley’s USA! USA! USA! chest thumping needs to be adjusted a bit.

But his comment about where the sweet spot for EVs is going to be is somewhat puzzling.

Right now Ford has three EVs, two for consumers and one for vocational use: the F-150 Lightning, Mustang Mach-E and E-Transit.

The Ford EVs for consumers: the Mustang Mach-E and the F-150 Lightning. (Image: Ford)

The first is, of course, a full-size pickup truck. The second trades on the muscle car performance of the Mustang. And the third is a vehicle for contractors.

Ford has been championing larger vehicles for the past few years for the simple reason that it is where it makes more money, so when it went EV it went big with the Lightning (and for power with the Mach-E).

It used to have the Focus to go up against the likes of the Honda Civic and Toyota Corolla, both of which still exist and do quite well in the market. Presumably neither Honda nor Toyota build those vehicles out of charitable impulses.

Ford used to have the Fusion to go up against the likes to the Honda Accord and the Toyota Camry, both of which. . . . Yes, same thing.

Ford—and it isn’t the only company in southeastern Michigan that has done this—has been messaging consumers that Bigger Is Better.

Suddenly Farley is talking about small vehicles.

Don’t get me wrong: small EVs, assuming that they can be made so that they are actually affordable for consumers and that provide a return to the OEMs, are undoubtedly a good idea to increase the number out on the roads.

Regardless of the size of the currently available EV (with the exception of Teslas) need to be sold to a still-skeptical public.

So there is that challenge.

And now Farley is doing a 180 and planning to go to the market with things that are small.

Which means he is going to need to convince people that on roadways populated with large F-150s and Explorers small Ford EVs are a good thing.

To which I say: Good luck.

Gotta Keep Truckin’

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By Gary S. Vasilash

This is the classic “damned if you do, damned if you don’t” scenario:

The American Transportation Research Institute (ATRI) has come out with its annual list of the most-congested locations on the national highway system for trucks.

About this situation, Chris Spear, American Trucking Association president and CEO, said: 

“Traffic congestion on our National Highway System inflicts an enormous cost on the supply chain and environment, adding $95 billion to the cost of freight transportation and generating 69 million metric tons of excess carbon emissions every year.”

None of which is good.

Freightliner eCascadia: One benefit of electric trucks like this is that when they are in a traffic jam there won’t be emissions. (Image: Freightliner)

However, according to ATRI analysis, “traffic conditions continue to deteriorate from recent years, in some instances due to work zones resulting from increased infrastructure investment.”

That’s right: building roadways results in construction zones and construction zones lead to congestion.

So damned if they build, damned if they let it crumble.

Spear went on to say:

“The freight bottlenecks identified in this report provide an actionable blueprint for state and federal transportation officials on where to invest infrastructure funding most cost-effectively. Increasing freight efficiency should be a top priority for the U.S. DOT, and alleviating these bottlenecks would improve highway safety, protect the environment and support interstate commerce.”

Presumably the infrastructure projects–at least not all of them, because sometimes this seems to be the case–weren’t predicated on someone throwing darts at a map.

And again, while the bottlenecks will eventually be improved via infrastructure improvements, getting from here to there will not be without additional disruptions.

Where Driving Is Slow

Overall the ATRI, based on measurements from 325 locations, determined that during rush hour average truck speeds were 34.4 mph.

For the top 10 locales, the average speed was 28.5 mph.

The largest molasses zone?

The intersection of I-95 and SR 4 in Fort Lee, New Jersey.

It has topped the ATRI list for six years running, an accomplishment that the Fort Lee Chamber of Commerce probably doesn’t promote.

And as for the remaining nine:

2. Chicago: I-294 at I-290/I-88

3. Chicago: I-55

4. Houston: I-45 at I-69/US 59

5. Atlanta: I-285 at I-85 (North)

6. Atlanta: I-20 at I-285 (West)

7. Los Angeles: SR 60 at SR 57

8. Houston: I-10 at I-45

9. Atlanta: I-285 at SR 400

10. Nashville: I-24/I-40 at I-440 (East)

Clearly this is a top-10 list that some city leaders—particularly in Chicago and Atlanta—probably wish they weren’t on.

Western Europe, China and EVs

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Although there was a seeming step-by-step, vehicle-by-vehicle increase in the under of Chinese battery electric vehicles registered in Western Europe last year, there was a bit of a stumble at the end, and Schmidt Automotive Research wonders whether there will be a cap of under 10% of the EV market in Western Europe for the Sino mobiles.

(Image: Schmidt Automotive Research)

As the chart shows, there was a noticeable decline in registrations in Q4. . .but then there are some reasons why this could be the case, including the increase in the amount of time it takes to ship vehicles from China to Europe while avoiding the Red Sea.

But the Schmidt study also points out some brands are offering discounts of up to €12,000, so you’d imagine that European consumers would be most interested in savings like that. . .especially as there may be higher import tariffs applied to Chinese vehicles coming into Europe this year.

Still, the fact that the Chinese OEMs have managed to gain that much of the European market in a comparatively short period of time says something about the appeal of their products.