The Future of Engines Examined by James Martin of IHS Markit

By Gary S. Vasilash

Motor racing is a space where many OEMs have the opportunity to test out new technologies and to obtain learnings about performance at the edge.

Mazda Motor Corp. is participating in the Japanese Super Taiku Series, endurance racing that consists of seven rounds, including a race titled the “24 Hours of Fuji” (what a great name!).

Mazda is campaigning the Mazda2 Bio concept. This is a Mazda2 production car that has a Skyactiv-D diesel engine under its hood.

What makes this conceptual is that it will be running on bio-fuel, a product called “Susteo” that was developed by Euglena Co. Ltd.

This biofuel is made from things like microalgae fats and used cooking oil. Some biodiesels compete with food crops. Not this.

The fuel can be run in the diesel engine without modification.

The point is to help develop Mazda’s growing portfolio of vehicles that are meant to help the company reach climate neutrality.

There is a lot of discussion of powertrains for vehicles that can, like the Mazda2 Bio, use existing engines with varying degrees of modification rather than wholesale replacement, engines that can run on advanced liquid fuels or even hydrogen.

Let’s face it: There are lots of engine plants in the world, so keeping them running might be something that automakers would not be opposed to doing versus shutting them down.

However, as James Martin, associate director, IHS Markit Automotive Advisory Practice, an expert on powertrains, points out on this edition of “Autoline After Hours,” if there is combustion involved—whether it is spark- or combustion-ignited—there is going to be emissions.

So running hydrogen to power an engine and using hydrogen to power a fuel cell may both turn the wheels, but only the latter is going to be emissions-free.

Credit to Mazda for trying. But ultimately, the Super Taiku Series is likely to be powered by Tokyo Electric Power Co.

Martin says that there is momentum behind electric vehicles that is unlikely to be stopped, particularly as automotive companies announce billions of dollars of investments and investors announce their support of these advances by supporting the shares of the companies that are making the transition.

However, Martin notes, this isn’t going to be a flip-the-light switch phenomenon. Yes, Ford will sell you a Mustang with a 760-hp V8 under its hood. And Ford will also sell you a Mustang Mach-E with a 314-mile all-electric range. And that is likely to be the case for some time to come. (Yes, the same holds for an F-150 with and without an electric powertrain.)

This is what the future doesn’t look like–a Chevy LT5 crate engine. (Image: Chevrolet)

Internal combustion engines aren’t going away next week, but Martin points out that while there are likely to be some new engine programs, there are unlikely to be new engine platforms. That is, what’s there can be modified. What’s not there will not be designed from the proverbial clean sheet.

Martin talks with “Autoline’s” John McElroy, Lindsay Brooke, editor-in-chief of Automotive Engineering, and me on the show.

Among the areas visited are what becomes of some existing engines and how OEMs can wind down their production—which turns out to be a tricky proposition (Martin, when he was at GM, worked on the LT5 Corvette engine program, a 375-hp, 5.7-liter small-block V8 that was produced for GM by Mercury Marine; Martin was there when the engine was taken out of production: you’ll be surprised at the complexity of stopping production).

And, of course, the landscape of electric powertrains.

You can see it all here.

Has Tesla Distorted the EV Market?

Everyone wants to have their cake and to eat it, too.

And said cake will be delicious. And although said cake will have an exceedingly high number of calories (after all, it is delicious), there will be no added weight to everyone who eats their cake.

Are electric vehicles ecologically oriented or are they performance vehicles?

Well, given that performance numbers are something that Tesla has been able to post, many people think both.

Of course, going Plaid also means going to the Supercharger more frequently. And the electricity that comes out of the units doesn’t get generated by magic.

Still, people are snapping up Teslas to the extent that the traditional purveyors or luxury vehicles can only look on with sublimated horror and try to determine what it is that they can do to get their piece of the market.

And the answer seems to be to opt for performance.

Nice green background, eh? (Image: Mercedes)

Or as Philipp Schiemer, Chairman of the Board of Management of Mercedes-AMG GmbH, puts it about the forthcoming Mercedes-AMG EQE sedan:

“With the new model, we are expanding our range with a purely electrically powered performance vehicle and are thus addressing additional target groups. The AMG EQE focuses on sportiness and impressive driving dynamics. And that’s not the end of our Future of Driving Performance: After performance hybrids and all-electric AMG derivatives based on EVA2, stand-alone AMG electric vehicles will follow in the not too distant future. These are based on AMG.EA, our new, completely in-house-developed platform.”

The Mercedes-AMG EQE with the AMG DYNAMIC PLUS package produces 677 hp and 738 lb-ft of torque. It is said to be able to go from 0 to 60 in 3.2 seconds and has a top speed of 149 mph.

Mercedes has AMG in its portfolio, so it might as well use it wherever and whenever it can.

What’s more, there is something to be said for getting more electric vehicles on the road so as to increase the public’s level of comfort with the technology.

And while the two permanently excited synchronous motors that the car uses are certainly more efficient than an equivalent gasoline engine would be, let’s face it: The only green this car is about is the color of the traffic signal when the accelerator is mashed.

Perhaps the person who buys an AMG EQE can feel noble about their environmental footprint. Perhaps.

LMC’s Schuster on the State of the Industry

By Gary S. Vasilash

There is pent-up demand. People are driving more. But. . .there are not enough vehicles out there to fulfill demand. There is that chip shortage accounting for the vast majority of vehicles not being on lots (an impact on the order of 85-90% of missing vehicles). According to Jeff Schuster, president of Global Forecasting, LMC Automotive, inventories will improve. Which will help that situation. Somewhat.

Because there is that other big issue that those who are in the market for a new vehicle: cost. (Latest average transaction price according to KBB: $46,404).

Schuster suggests that if prices stay elevated—and for the foreseeable future there doesn’t seem to be any driver for why prices would decrease—there are going to be plenty of people who are sitting on the sidelines, not going out and buying new vehicles.

So on the one hand, while OEMs and dealers are making profits by producing and selling high-ticket vehicles rather than more conventional family haulers (i.e., if there is a limited number of chips, then they get installed in the more-profitable vehicles); on the other hand there are people who can’t afford to buy something that has a price tag more analogous to luxury vehicles, so they are likely to figure out the ways and means to get transportation at a more affordable rate.

But here’s something to consider: What if an OEM decides that there could be an opportunity to sell entry-level vehicles, vehicles that have slim margins, but vehicles that could sell in large numbers? Schuster says this is not entirely outside the realm of possibility.

And what if said OEM happens to be one that isn’t particularly familiar to U.S. buyers: as in a Chinese company coming in with low-end vehicles? Schuster says that this is a possibility—yes, even despite the currently existing 27.5% tariff that is tagged onto vehicles imported to the U.S. from China. Apparently there is a lot of capacity to build vehicles in China, and so there could be an interest in keeping those plants running.

EVs? There will be more of them. (Which, Schuster notes, is something that isn’t going to reduce the price paid by consumers as they tend to be more expensive than comparable ICE-powered vehicles.)

Tesla? Yes, it will continue to grow. Schuster says that while it is ahead of other global automakers in terms of tech—a cycle or two ahead of others—LMC analysts anticipate that it will begin to lose some of its dominance in the EV space because of the other OEMs entering it.

Jeff Schuster has a whole lot more of interest to say about the state of the auto market today and in the near future on this edition of “Autoline After Hours.” He talks with “Autoline’s” John McElroy, Reuters’ Global Automotive Correspondent and me.

And you can see it here.

Toyota’s Big Spend in West Virginia

Last November Toyota announced a $240-million investment in its plant in Buffalo, West Virginia, its only combined engine and transmission plant in North America. The monies will be invested in a production line for hybrid transaxles.

And today the company announced that it was adding an additional $73-million to its spend for not only more hybrid transaxle production but to assembly rear motor stators.

All of which is to say that Toyota is amping up its spend on hybrid vehicle production capacity.

In addition, it is spending $17 million at its Toyota Motor Manufacturing Tennessee plant for casting hybrid transaxle cases and housings.

Last December Toyota announced that it would be launching 30 battery electric vehicles globally by 2030, which would represent sales of 3.5-million EVs per year.

Then it would, by 2035, have 100% of its global vehicle sales be EVs by 2035.

However, between now and then there will evidently be more hybrids available at Toyota and Lexus dealers in the U.S.

Wouldn’t You Really Rather Have a Buick?

Buick doesn’t always get the respect that it has earned, especially when it spent many years in the shadow of Cadillac. (If you can’t afford a Cadillac, then. . . .)

Now the company has switched to an all-SUV lineup. There are four. One is built in the U.S. The others are from South Korea and China. It is worth knowing that David Dunbar Buick was born in Scotland.

2019 Buick LaCrosse. (Image: Buick)

J.D. Power has released its latest Vehicle Dependability Study. This looks at how people feel about their vehicle’s performance after three years of ownership.

The top brand is Kia with a score of 145. The second-best brand is Buick, at 147 points. (As you may discern, a lower numerical score is better.)

Know that this means Buick beat out the likes of Lexus and Porsche and Lincoln and BMW and Jaguar and others—in many cases, rather handily.

Buick.

What is somewhat ironic is that in terms of vehicle categories, in Large Car Buick also came in second, with the LaCrosse. It no longer offers it.

In first place is the Chevrolet Impala. That is going away, too. (Last year in the U.S. GM delivered 750 Impalas.)

What You Need to Know If Vehicle Shopping

First the good news, according to Michelle Krebs, executive analyst for Cox Automotive:

“The surge in new car prices appears to have peaked.”

That is the new vehicle average transaction price fell 1.8% in January compared to December.

Now it is “just” $46,404.

But while not exactly an entire shoe dropping, Krebs adds:

“Yet, while we expect vehicle supply to improve, it will continue to be tight particularly through the first half of the year. Because of this, we expect prices to remain high for the foreseeable future, but car shoppers can rest assured we don’t anticipate any more record highs.”

Not records. Just high.

Here’s another thing that probably won’t make you feel much better.

Cox calculates that car shoppers for non-lux vehicles are paying, on average, more than $900 above sticker. A year ago those customers were paying $1,600 or more below sticker.

For those in the lux segment it is a similar story, just higher numbers. As in paying $1,300 above sticker when last year the prices out the door were $2,400 under MSRP.

One way of looking at this is that for non-lux cars customers are paying a $2,500 penalty for waiting (the swing from minus $1,600 to plus $900) and the lux buyers $3,700.

With inflation and rising interest rates, however, it may be a good idea to shop earlier rather than later lest those factors add to the sticker.

Remember: MSRP is “suggested” price, not what you’re going to sign off on.

Top Tech According to KBB

Kelley Blue Book has come out with a list of top vehicular tech for 2022.

One thing that you may immediately notice is that this technology isn’t exactly new in most cases.

But it is a list of things that you might want to be aware of should you be out there looking for a new vehicle.

Of course, finding an affordable new vehicle is all the more difficult nowadays because of the on-going shortage of semiconductors–and it is worth noting that by and large these technologies are predicated on. . .semiconductors:

  • Advanced Driver Assistance Systems (ADAS)
  • Automatic Emergency Braking
  • Connected Mobile Apps/Digital Key (the latter uses a phone as a device to unlock and start the vehicle)
  • Teen Driver Tech (squeals to Mom and Dad if the kids go too fast, for example)
  • Safe Exit Assist to Protect Cyclists (blind spot detection of bike rides—helps save them and the driver’s door)
  • Wireless Smartphone Connectivity and Charging
  • 360-degree Camera
  • Emergency Services/Stolen Vehicle Tracking Software (when is the last time you heard anyone mention LoJack?)
  • Blind-Spot View Monitor (not just that little yellow light in the sideview mirror but an actual image of what’s where)
  • Video Rearview Mirror (switches the reflective mirror to a video display)

Drive carefully even if you don’t have any of this stuff.

What Happened to Local Motors?

By Gary S. Vasilash

Justin Fishkin was the chief strategy officer at Local Motors for seven years (2011 to 2018), then senior advisor for the firm for two years after that.

Local Motors seemed to have it all going for it in terms of what it was doing and how it was doing it.

It was crowd sourcing design. It was using 3D printing to the extent that others were only dreaming about. It was developing vehicles fast. It was putting autonomy into application. It was creating mobility systems.

Olli: Electric. Autonomous. Built in a microfactory. (Image: Local Motors)

From Wired to IMTS Today and an array of media outlets in between, Local Motors was the “it” company in the transportation field.

And a few weeks ago word leaked out that Local Motors was closing up shop.

So on this edition of “Autoline After Hours” Fishkin talks with “Autoline’s” John McElroy, Chris Paukert of Roadshow by CNET and me about what the company set out to do and what conceivably happened.

One of the primary factors, Fishkin suggests, is that there was a case of mission creep in that the company found itself stretching in different directions as different constituents became involved in the company.

They went from crowdsourcing designs that led to vehicles like the Rally Fighter, 3D printing an entire vehicle (the Strati) then creating Olli, a compact people-mover with autonomous capabilities, and along the way created fans and attracted companies that wanted to get some of the “stuff” that was allowing the company to do what it was doing.

An early intention was to have micromanufacturing capabilities set up as a network such that there would be the development of vehicles that would lend themselves to specific markets. The company ended up having two, in Chandler, Arizona and Knoxville, Tennessee

It also built a demo microfactory in National Harbor; GE Firstbuild built a microfactory in Louisville, Kentucky, with Local Motors’ assistance.

In addition to GE, Local Motors worked with companies including Airbus and Siemens. All of which is to get to the point that this was something real, not speculative.

Its Olli had deployments in Buffalo, New York; Turin, Italy; Sacramento, California; Arlington, Virginia; Holdfast Bay, Australia; Akron, Ohio; Dunedin, Florida; Jacksonville, Florida; Clarksburg, Maryland; Yellowstone, Wyoming; Thuwal, Saudi Arabia; Durham, Florida; Marysville, Ohio; Neustadt, Germany; Jacksonville, Florida; Palo Alto, California; Concord, California; Ghent, Belgium; Lake Nona, Florida; Peachtree Corners, Georgia; Peoria, Arizona; Whitby, Canada; Toronto, Canada; and Crozet, Virginia, yet in the broader scheme of things, that is but a handful of places.

Fishkin also talks about his current activities with a startup Future/Of, which is helping, well, startups. One of the companies Fishkin is working with is Biliti, Inc., a company that is producing electric three-wheelers for last-mile transport.

But not just startups, he notes. As he puts it, “Future/Of works with organizations to scale disruptive business models and frontier technologies.” Which established companies can benefit from. And NGOs.

Still, in the context of Local Motors and where it came to, the question becomes where will micromobility and distributed microfactories go? This is a question that Fishkin help provide some solid perspective on.

And you can see it right here.

What Did People Pay at a GM Dealer in Q4 2021?

By Gary S. Vasilash

Yes, there are things like logistics jams and semiconductor absences that are making getting a new set of wheels (1) difficult at most and (2) more expensive than might seem to be reasonable. (Of course, finding a bag of potato chips might be a challenge, too, and once you find one you’ll discover that its contents is reduced and its price has been raised.)

Still, seeing the average transaction prices for General Motors products in Q4 2021, according to Cox Automotive, is somewhat surprising.

For Cadillac, the amount of money that people actually paid at the dealership—the average transaction price (ATP)—was $77,143. Compared to Q4 2020 that is a 29% increase.

Those rolling out of a dealership in an Escalade paid an average $107,336. That 38-inch OLED screen isn’t cheap.

Perhaps a GMC would be a more reasonable buy. Its ATP was $62,501. Perhaps.

Once, in the stairstep approach to brands, Buick was just below Cadillac. There’s something to be said for not giving up aspirational sedans and switching to a showroom of crossovers: even though Buick 2021 sales were up 10.5 percent, even though its ATPs were up 14% in Q4 2021, it was the lowest overall in GM brands according to Cox: $39,304.

Yes, this means that Chevy had a higher ATP: $50,336.

It is worth noting that in 2021 Buick delivered 179,799 vehicles while GMC moved 482,437, of which more than half (248,924) were full-size pickups.

Still, if those pickups, as well as the Canyon (24,125 were sold in 2021), are subtracted from GMC’s overall sales, it moved 209,388 vehicles, or 29,589 more than Buick.

All of which is to say that talking ATPs into account, GMC is doing significantly better than Buick. Clearly people would rather have a GMC.

That said, the $50,336 ATP for a Chevy (yes, the Silverado pickup price has a lot to do with that) makes me think that if people want a hot dog, apple pie and a Chevrolet, they may have to rethink their choices.

About that Beater’s Price

According to Kelley Blue Book, which knows about such things, the average used vehicle price at the close of 2021 was $28,205.

That was 28% higher than it was at the end of 2020.

42% higher than in December 2019.

(One thing that is a little odd about this: Given that there was a decrease in the miles traveled during the lockdown portion of that period, as in, say, people working from home and therefore not driving, wouldn’t you imagine that the demand for used vehicles—yes, we know that the lack of semiconductors reduced the availability of new cars, which put some people into the used market—would have been lower, or is it simply that they could have been much higher?)

Back to that $28,205.

According to the U.S. Census Bureau, the median household income in the U.S. in 2020 (these were the latest figures collected as of September 2021) was $67,521, a 2.9% decrease from 2019.

Let’s say for the sake of argument that there was a 5% increase in 2021 (an arbitrary figure based on nothing).

That would make the median income $70,897.

The average used car would be about 40% of that annual income.