Sockets and Chargers & The Technical Surrender of the OEMs

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By Gary S. Vasilash

Thomas Edison patented the incandescent light bulb in 1880. By 1890 the screw-type base—like the one you can see on a light bulb right now—had about 70% of the market.

There was something to be said for standardization.

As light bulbs were the dominant type of electrical object back then, electrical sockets took that form factor.

When companies (including, no surprise, General Electric) began to make electrical household appliances, they put an Edison socket on the end of the power wire. While that seemed sensible, there was the issue of where the power outlets were located for purposes on lighting: in places like ceilings.

So not only was it a bit tricky screwing in that toaster or iron, but in the event that the appliance was accidentally knocked off the counter or ironing board, there was likely to be a ripped cord and a possible electrical short.

An inventor named Harvey Hubbell came up with another idea. He came up with the two-pronged plug that you are also familiar with today (some outlets have the third opening for the ground).

The device he patented in 1904 still used the screw-in socket for the receptacle and there was a two-pronged plug attached to the appliance cord. (The screw-in receptacle can still be found in hardware stores today.)

While it probably seemed to the people in the late 19th/early 20th century that Thomas Edison was nonpareil when it came to things electric, clearly that wasn’t the case.

Which brings me to the Tesla charging connector, the NACS.

That stands for “North American Charging Standard.”

Standards are usually created by independent organizations, not companies.

Tesla simply named its connector and port a standard. Voila!

Ford, General Motors, Rivian, Volvo, and undoubtedly others by the time you read this have signed on to the standard.

As is widely known, the Tesla Supercharger network is superior to all other charging networks—because it works. The other networks are hit-and-miss. If you have a vehicle that needs a charge, do you really want to take your chances on pulling up to a charger that may be down for an array of reasons?

Thomas Edison’s company came up with the socket. It worked. Appliance manufacturers followed Edison’s lead.

Then Harvey Hubbell came up with an alternative. A better idea.

You would think that there’s a Hubbell working at Ford, GM, Rivian, Volvo, etc.

These massive organizations can’t come up with better system than that which Tesla developed in 2012?

People want reliability and consistency.

If they associate those characteristics with the name “Tesla,” what does that say about the other companies?

Sure, as the EV market grows and there are more alternatives from the other companies, Tesla’s share of market will shrink.

But as those other companies use Tesla’s equipment and further underscore the viability of that brand, Elon Musk will be to EV charging what Thomas Edison was to what you find at the base of incandescent light bulbs today.

No Canada: Consumers & EVs

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By Gary S. Vasilash

Although there seems to be something of a bandwagon effect in the U.S. when it comes to EVs—one led by the government rolling out cash for EV consumers and cash for companies that are producing batteries (there is a part of the IRA that provides up to $45 per kilowatt hour for battery cell and module production and covers 10% of the critical mineral costs: wonder why there are all those battery plant announcements?)—consumers in Canada, well, let’s quote J.D. Ney, director of the automotive practice at J.D. Power Canada:

“Despite current legislation that is pushing hard for EV adoption, consumers in Canada are still not sold on the idea of automotive electrification. Growing concerns about affordability and infrastructure (both from charging and electrical grid perspectives), have caused a significant decline in the number of consumers who see themselves in the market for an EV anytime soon.”

That is, the 2023 J.D. Power Canada Electric Vehicle Consideration (EVC) Study finds that 66% of those surveyed are “very unlikely” or “somewhat unlikely” to consider an EV as their next vehicle purchase.

Consider. Not buy. Think about. Ponder.

That is a 13% increase in those who are in the unlikely camp from last year’s EVC Study.

Reasons for the lack of interest?

  • 63% say limited range
  • 59% are unhappy with the price of the vehicles
  • 55% cite lack of charging infrastructure

The Canadian government does have a program that provides up to $5,000 for the purchase or lease of EVs or PHEVs, so perhaps this indifference is predicated on practicality.

Let’s face it: unless you get an expensive EV, you are going to have comparatively limited range, and if you have limited range you’re going to want to have charging capability readily at hand. . .

EV Trucks & Three-Card Monte

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By Gary S. Vasilash

When Chevrolet announced the Silverado EV last year, it said that the price for the initial work truck version would have an “Estimated MSRP staring around $39,900.”

That was for the work truck version. Get the contractors in and those who are simply looking to look cool will follow. Possibly in droves.

What does the Silverado EV 4WT work truck, which is presently in production, cost?

$79,800.

There is a forthcoming 3WT version with a decreased range from the 4WT. The 4WT has an EPA rating of 450 miles per charge.

The 3WT will be tagged at $74,800.

What is shocking is that people aren’t more shocked by this estimation being off by some 50%.

When the 2024 Chevy Equinox EV was introduced last fall, the claim Chevy made was “a starting price of around $30,000.”

Mary Barra, GM chair and CEO, said, “With the flexibility of GM’s Ultium Platform, we are bringing to market vehicles at nearly every price point and for every purpose.”

Really?

The Cadillac Lyriq is on the Ultium platform. It starts at $58,590.

The GMC Hummer EV uses it, too, and good luck finding a price for it on gmc.com. The 2022 Edition 1 model started at $112,595, and while the subsequent models are less expensive, odds are that’s a relative reduction.

Every price point for Thurston Howell III, perhaps.

Kelley Blue Book has it that the average transaction price for an electric vehicle in May was down $9,370 from the price paid in May 2022. Now it is $55,488, or a 14% decrease.

There’s the Silverado EV 4WT 50% increase.

And what expectation should there be that there will be a $30K Equinox, and if there is a $30,000 Equinox will there be a sufficient number such that it won’t be like sightings of the Loch Ness Monster (“I think I saw one. . .”)?

This just isn’t a GM phenomenon.

Ford launched the F-150 Lightning Pro in May 2022 with a starting MSRP of $39,975. By August it was $55,974. At ford.com right now it starts at $59,974.

Of course, at the top of the page for the Lightning it says in a bright blue box:

“Select Models Currently Eligible for $7,500 in Potential Federal Tax Credits.”

Let Uncle Sam mitigate the price increases.

Fisker Begins U.S. Deliveries. Some.

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By Gary S. Vasilash

“We have been waiting for this moment ever since we started the development of the Fisker Ocean in October 2020.

“As a California-based company, we are thrilled that our first US customers are finally getting behind the wheel of the Fisker Ocean and will experience its innovative features, class-leading 360-mile range, and highest levels of sustainability.”—Henrik Fisker, Chairman and CEO, Fisker Inc.

He was talking about the start of deliveries of the Fisker EV SUV on June 23, 2023 in Los Angeles.

The company delivered 22 cars.

Auto Industry’s Quality Breakdown (You Won’t Necessarily Be Left at the Side of the Road, But. . .)

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By Gary S. Vasilash

In the J.D. Power U.S. Initial Quality Study (IQS), researchers use “problems per 100 vehicles” (PP100) as a metric.

A lower number is better.

In an ideal world, 0 PP100.

But in the real world, in the 2023 IQS, it was discovered that the PP100 was up on average by 12 over 2022’s IQS.

And that’s on top of the 18 PP100 increase the year before.

So in two years, there has been a 30-point rise, which means a 30-point quality drop.

Clearly: quality is declining.

While there are things like difficult-to-use infotainment systems, there are also problems with. . .door handles.

Safety systems are certainly a good thing to have in a vehicle. But lane departure warning/lane keeping assistance and forward collision warning/automatic emergency braking both saw considerable increases—meaning, more troublesome.

The industry average is now 192 PP100.

Think of that: every 2023 model vehicle has approximately two problems that rise to the level of notability by those surveyed by J.D. Power.

The brand with the best quality: Dodge. 140 PP100.

The brands at the bottom: Chrysler and Volvo. Both score 250 PP100.

(Although Tesla doesn’t make the “official” list due to restrictions on surveying its owners, J.D. Power calculates that it would be below the bottom: 257 PP100. Which just goes to show there isn’t necessarily a correlation between popularity and quality.)

Would You Consider an EV?

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By Gary S. Vasilash

The J.D. Power 2023 U.S. Electric Vehicle Consideration study is sort of a good-news/bad-news report for the global OEMs that are spending billions on the building of plants for vehicles and batteries.

That is, the number of people surveyed who said they’re “very likely” to consider the purchase of an EV increased over the finding in last year’s version.

But the increase is only 2%.

From 24% to 26%.

Pulling back the focus, the number of people who are “overall likely” has also increased.

Here 3%.

From 59% to 62%.

Not exactly a ground swell of consideration.

And while those numbers are on the rise, let’s face it: consideration and likelihood aren’t downpayments.

According to Stewart Stropp, executive director of EV intelligence at J.D. Power, what a consumer owns now has a big influence on what they’ll consider next.

The breakdown of the “very likely” respondents are:

  • EV: 74%
  • PHEV: 63%
  • HEV: 36%
  • ICE: 22%

One way of looking at it is that those who have experience with vehicles they plug in (EV and PHEV) are comfortable with them and EV owners are likely to consider another and PHEV owners are inclined, as well.

However, the owners of hybrids and straight gasoline engines are seemingly reticent to make a switch.

Presumably, it is particularly important to convert those owners of ICE vehicles: 78% is a big number, especially as most people have cars they fill up at gas stations.

And speaking of filling up: Charging is a big hurdle. Some 49% of shoppers say that lack of charging station availability—as in both sites and equipment at those sites that actually charge—is what makes them reject the idea of an EV.

The Cost of Cars & a Considered Alternative

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By Gary S. Vasilash

According to the most-recent numbers from Kelley Blue Book, the average transaction price paid for a vehicle in May 2023 was $48,528. And this is even though, KBB found, the average price paid was $410 below sticker, not some wild figure well above it, which people were paying as a result of the pandemic: KBB notes that in May 2022 the price paid was $637 above sticker.

S&P Global Mobility reports that account-level delinquency rates of auto loads 60+ days past due are now up 26 basis points from Q1 2021, from 1.43% to 1.69%.

While that is a non-trivial jump, the folks at TransUnion and S&P Global Mobility point out that this is a situation that is being faced by a segment of the consumers and lenders, those who are in the subprime category and more than likely to be buying a used car.

So since that $48,528 MSRP may not apply to those people, know that according to Cox Automotive, the average used vehicle listing price in May was $27,256, “the highest since early January.”

Meaning, new or used, vehicle are pricy.

But this statement related to the loan delinquencies is somewhat startling:

“The interest rate rise is squeezing the monthly budget for the average American consumer. Consumers set aside money monthly for housing, vehicles, and insurance, but may not pay other obligations with the same frequency, such as medical bills and credit cards. People need their vehicles to get to work to make money and pay their obligations.”–Jill Louden, product management associate director for S&P Global Mobility

Something of a vicious cycle: buy a car, go into debt, use the car to go to work, pay for the vehicle and other things, but rack up even more debt for things like health care and presumably things like food.

If some company comes to market with appealing vehicles that have a low price—and this might be a Chinese company, 25% tariff notwithstanding—then this industry could be upended.

Presumably there is a considerable percentage of people who use their vehicles strictly for transportation and not as a signifier of their wealth or coolness. If the vehicle can do the job and do so reliably–without seeming like vehicular penance–then being able to acquire such a vehicle would be the way to go.

Let’s face it: not everyone—even those who are well above subprime—can afford an electric vehicle, which Kelley Blue Book found had an average transaction price of $55,488 in May—down 14% compared to May 2022, but probably because of Elon Musk adjusting the prices of his cars in a way that is completely uncharacteristic of traditional OEMs, so probably not something that can be counted on going forward.

Everyone talks about the transition to EVs and OEMs are tripping over one another to make this change to their showrooms.

But consider: How many people will be left by the side of the proverbial road by OEMs those consumers could once count on for reliable, affordable vehicles?

Tesla, Tesla, Tesla

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By Gary S. Vasilash

Sandy Munro and Cory Steuben of Munro & Associates have, through a comprehensive tear-down analysis of Tesla models as well as EVs from other OEMs (as well as a vast array of ICE vehicles over the years), achieved a special POV regarding the means and methods that are used by Tesla to produce its vehicles. Using the context they have acquired from the analyses of both Teslas and other vehicles (as well as from working in other industries, which provides different perspectives on product and process), they are able to make assessments about how Tesla is developing and producing its vehicles.

And they are, putting it mildly, damned impressed, such that Sandy Munro expresses a concern that traditional domestic OEMs are likely to find themselves trumped by Tesla in terms of sales—before the decade is out. (Globally, Tesla says that it plans to build 20 million vehicles by 2030. By any measure a lot of cars.)

Tesla recently held an investor day at its plant in Austin, Texas. The attendees were from various big and bigger money firms that can direct investors’ funds into firms like Tesla. So the objective on Tesla’s part is to make sure that the best foot is put forward so that it can get some of that cash.

But Munro and Steuben scored valuable laminated credentials to be part of the audience during with the “Master Plan 3” was revealed—everything from new manufacturing methods to a home-grown operating system that combines ERP, MES, and even more.

And on this edition of “Autoline After Hours” Munro and Steuben talk to “Autoline’s” John McElroy and me about what they learned at the event, particularly focusing on the operational developments that Tesla is making.

For example, there is a new method Tesla will be using for vehicle assembly.

During his presentation at the Tesla program Drew Baglino, senior vp, Powertrain & Energy engineering, explained:

“We build the sides of the car independently, we only paint what we need to, and then we assemble the parts once, only once.”

That, Munro points out, is a non-trivial change, as paint shops in factories are typically large, complex and very expensive. This changes that.

That rethinking of the industry status quo and others are examined in a deep-dive into what Tesla is doing—and what other OEMs ought to be thinking about regarding their futures.

And you can see it here.

The EV Outlook: How Many People Taking Buyouts Are Likely to Buy One?

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By Gary S. Vasilash

Last week GM announced that in its efforts to “permanently bring down structured costs” it would request that its salaried employees in the U.S. seriously consider taking a buyout. In January GM execs said that their goal is to reduce $2-billion in spending. By taking a number of its 58,000 of salaried employees off the books, it reckons it will get closer to its goal.

Given that in 2022 its full-year revenue was $156.7 billion, net income attributable to stockholders $9.9-billion and EBIT-adjusted was a record $14.5 billion, it would seem to be in good shape.

But there is something that GM and all other OEMs are grappling with, and that’s the billions of dollars that need to be invested in developing electric vehicles as well as creating the means by which the vehicles and the batteries used to store the energy for those vehicles can be produced.

It is a huge—and expensive—undertaking.

And so when they look at their books and see that one non-trivial number is salaries, product trumps people in order to maintain profit.

(To be sure there are a number of people who probably have a skillset that is not particularly relevant to automobility going forward and it would probably be tenuous from a legal standpoint to single them out, which may make casting a larger net better from a corporate point of view.)

But the point is: EVs are (1) costly to develop and (2) not making money for corporations the way that gasoline-powered vehicles are (yet).

So, in order to keep earnings up and costs down, there will be people who will have to find something else to do with their working hours.

The state of EVs is the topic on this edition of “Autoline After Hours.” Joining me are Greg Migliore, editor of Autoblog and the newly launched Autoblog Electric; Chris Paukert, director of Video for Edmunds; and Matt DeLorenzo, long-time auto journalist and author of How To Buy an Affordable Electric Car.

The discussion delves into an array of EV-related topics, from affordability to charging to how long it will be until EVs are the norm and internal combustion engines are the exception.

And as for that last topic, it may be longer than you might think.

You can see the show here.

China Notable Number

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There were 572,000 Wuling Hong Guang Mini EV vehicles sold in China in 2022, according to analyst firm Inovev.

The vehicle is produced by SAIC-GM-Wuling. A joint venture company. With that middle bit being General Motors.

South America, Inovev says, is GM’s third-largest market (after China and the U.S., respectively).

In 2022 GM sold 350,000 vehicles in South America.

572,000 of one model in one country.

350,000 of a show room on a continent.

Sort of puts the China market in perspective.