Dodge CEO Tim Kuniskis on the Transition to Electric

By Gary S. Vasilash

Perhaps more controversial than Dylan going electric in 1965. . .

If you think about “Dodge,” you have a pretty good idea of what it is: A lineup of muscle cars. It is a brand that has pared itself down to an essence, as things like the Journey and Caravan have gone away, leaving the bulk of the brand on the shoulders of two vehicles, the Charger and the Challenger. (The Durango is still in the showroom.)

The positioning of the brand is unapologetically the “Brotherhood of Muscle,” although all genders are encompassed within the club.

Dodge Charger Daytona SRT Concept: Dodge goes electric. (Image: Dodge)

One might think that this whole muscle car thing is an anachronism. HEMI engines don’t seem to a thing that would resonate in the age of Greta Thunberg.

However, in the first half of 2022, Dodge outsold Chrysler, Fiat and Alfa Romeo combined: 84,761 to 73,010.

There is a defined niche of buyers for whom muscle cars matter. And they buy them.

Although the platform underpinning the Charger and Challenger is, by contemporary standards, vintage, the people at Dodge have kept things going by introducing special editions and packages for the cars (e.g., the SCAT Pack Swinger, a tribute to the late ‘60s and early ‘70s).

Tim Kuniskis is the CEO of Dodge. And on this edition of “Autoline After Hours” he explains how Dodge will keep being propelled forward with cars even though he admits “cars are dead”—albeit dead for those who don’t necessarily consider their vehicles to be a representative of who they are. The Brotherhood of Muscle knows what matters to them and prove it every day.

Still, Kuniskis and his team are fully aware that the market is changing, moving away from HEMIs to electric propulsion.

So rather than pretending that it is otherwise, they have rolled out with “Last Call” editions of the Charger and Challenger and revealed the bad-ass battery electric Charger Daytona SRT Concept.

They are putting the proverbial pedal to the metal as they drive toward an electric future.

As Kuniskis points out in the show, people who drive muscle cars think somewhat differently than ordinary car consumers.

For example, do you think someone with a supercharged 6.2-liter HEMI Hellcat high-output V8 under the hood—a 797 hp or 807-hp engine, depending on package—is at all concerned with the fact that they may get a combined mpg of 15? Given that, what is the likelihood that someone getting an electric muscle car is going to be concerned whether the range is 300+ miles or a fraction of that—as long as the car moves like a bat-out-of-hell (which explains why the propulsion system in the concept is named “Banshee”)?

Ordinary EV buyers are largely concerned about range. Dodge EV buyers will focus on performance. (OK: some of them will be concerned with range, but they’re going to want to make sure that their cars seem to be hellacious performers.)

Kuniskis talks about the present and the future of Dodge with “Autoline’s” John McElroy, Chris Paukert of Edmunds, Mike Musto of Hemmings and me.

Even if you aren’t particularly interested in muscle cars per se it is a fascinating look at how a brand that is as intensely focused on one segment as Dodge can make a transition to a different technology model without disaffecting its customer base.

One can imagine that the Dodge switch to an electric future will become a business school case study, which you can learn about now, for free, here.

About Those (Absent) Auto Ads

By Gary S. Vasilash

Some 41% less was spent by automakers on national TV advertising in July 2022 compared with July 2021 according to iSpot.tv information cited by MediaPost.

The MediaPost article points out, “Without the Olympics, NBA Finals and Stanley Cup (which all took place during at least part of July last year), TV ad spending was down for automakers. . . .”

Fair point, because ads for OEMs during sporting events are absolutely ubiquitous.

However, there is another factor that probably plays a bigger role I the absence of ads:

The lack of product to sell.

According to Cox Automotive, the U.S. auto industry’s days’ supply of vehicles is in the mid-30s, a fraction what is ordinarily the norm.

Honda had just 21 days’ supply on dealer lots.

The point is, it makes very little sense to advertise products that people can’t buy.

Sure, there is something to be said to maintain brand awareness, but if there are ads that are extolling all of the wonderful features of a vehicle that is unicorn-like in its available existence, then the potential consumer is going to be highly annoyed (especially when that person tries to be sold something completely inappropriate by a dealer: guess who certainly won’t go back to that store and who is likely not to shop that brand?).

So sporting notwithstanding, the issue of sparsely available vehicles on dealer lots is a massive roadblock to commerce.

Some Notable Numbers

Let’s face it: vehicle sales in the first half of 2022 were not great in terms of volume.

What’s more, they weren’t great for customers who were looking for something affordable—according to Kelley Blue Book, the average transaction price for a new vehicle was a record $48,043.

They were great for OEMs and dealers, because higher prices mean bigger profits.

Be that as it may, it is interesting to look at how the leading OEMs made out in terms of one another when it came to sales.

In first place there is General Motors, which sold 1,087,761 vehicles. Based on that, here is the sales delta between pairs of subsequent companies (i.e., how many more the first named company sold than the company that follows it in sales ranking):

  • GM to Toyota:                  42,064
  • Toyota to Ford:                135,965
  • Ford to Stellantis:            95,900
  • Stellantis to Hyundai:       110,867
  • Hyundai to Honda:           196,668
  • Honda to Nissan:             73,683
  • Nissan to Volkswagen:      173,162

The gap between Toyota and Ford is surprising. And the gap between Ford and GM is even more surprising: 178,029.

Hyundai (as in the Group, meaning Kia, too) is certainly coming on strong. And Honda seems to be fizzling.

Realize that all of these companies are dealing with supply chain snafus and chip shortages, so it is a matter of (1) those who did a better job of managing their way through adversity and (2) a range of products (generally large SUVs and light-duty pickups) that consumers were interesting in acquiring.

Buying Electric Pickups

People buy a lot of trucks. According to NADA, in 2021 U.S. light truck sales (admittedly not all vehicles with cargo boxes on the back, as SUVs make it into this space) accounted for 77.6% of all light-duty vehicles moved off of dealer lots.

With the transition toward electrification, OEMs have undoubtedly taken this into account. So whether it is a traditional OEM like Ford and the now-in-volume-production F-150 Lightning or a startup like Rivian and its R1T, electric pickups are rolling out and there are more to come.

Cox Automotive has done some interesting research on potential purchasers of electric pickups.

Looking at those who currently own gas-powered trucks, they found that when it comes to what they are likely to buy next, 50% said they’d stick with gas-powered trucks. 37% said electrified (hybrids or full battery electric). And 14% will consider both.

What’s good news for the OEMs is that only 36% of buyers under age 35 would consider just gas-power, so the future looks better because the OEMs are putting a big bet on the future. 53% of those older than 35 say they’ll be sticking with gasoline. The first group will be buying more vehicles than the latter.

One finding puts the why-buy into perspective for pickups.

While some might imagine that the trucks are mainly for vocational use, turns out that only 12% of those who are considering an electrified for truck say they are doing so because they need it for work.

And 45% say they need it for their hobbies/interests.

A Bright Aspect of the U.K.’s Dour March Sales

Although passenger vehicle sales in the U.K. were down 14.3% in March compared to March 2021 at a total 243,479 units.

The U.S. sales were, according to LMC Automotive, on the order of 1.25 million units in March, the automotive consulting firm notes that compared to March 2021 that is a decrease of 22%, so the Brits are better on that score.

What is most notable about the U.K. vehicle registration numbers, as reported by SMMT: Battery electric vehicle sales were 39,315 units, or 16.1% of all vehicles sold. That is a 78.7% increase over the number of EVs sold there in March ’21.

Other categories:

Diesel:                    13,736 units           -55.2% (from March ’21)

Petrol:                     102,349                  -25.6%

MHEV diesel:          11,569                    -50.3%

MHEV petrol:          32,716                    4.0%

PHEV:                     16,037                    -7.5%

HEV:                       27,737                    28.4%

In other words, only EVs, mild gasoline hybrids and hybrids saw an increase. Those three categories of vehicles represent 40.9% of the total market in March ’22.

Things are certainly changing in the U.K.

The best-selling vehicle in the U.K. in March? The Tesla Model Y. And that’s of all powertrains. Number 2? The Tesla Model 3.

Enough said.

Why You May Not Be Getting That New Vehicle Anytime Soon

“The preliminary assessment from S&P Global Mobility for global auto production and sales levels continues to develop, but the current geopolitical events put pressure on an already delicate auto industry situation. Given additional uncertainty surrounding some important raw materials used in the production of semiconductors out of Ukraine and Russia, an initial assessment results in an assumption that several semiconductor plants will be forced to run intermittently at suboptimal speeds between the third quarter of 2022 and the second quarter of 2023, which in turn results in a further downgrade of global light vehicle production levels.  Lower production levels will create an even more untenable new vehicle inventory situation resulting in a downgrade to US light vehicle sales expectations.  As reflected in the S&P Global Mobility March 2022 forecast release, our initial impact removes approximately 250,000 units from our CY2022 US sales expectation and just over 300,000 units from our CY2023 projection, resulting in expected annual volume totals of 15.2M and 16.6M respectively.”– Chris Hopson, manager, North American light vehicle forecast, S&P Global Mobility

Maybe next year. . .

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.

Vehicle Types: More of the Same

By Gary S. Vasilash

According to AutoForecast Solutions, the top global vehicle types in 2021 were:

  • Small CUV:  24%
  • B:                12%
  • C:                10%
  • Mid CUV:     10%
  • D:                10%
  • Minivan:      5%
  • Large P/U:   5%
  • Others:        24%

The firm has extrapolated what it sees coming in 2028:

  • Small CUV:  28%
  • B:                11%
  • C:                10%
  • Mid CUV:     10%
  • D:                9%
  • Minivan:      5%
  • Large P/U:   5%
  • Others:        22%

In other words, a few more small CUVs and almost everything else just the same.

One could argue the future is now.

EV Upstarts

By Gary S. Vasilash

The number of electric vehicles being offered–or announced that they’re on their way–by traditional OEMs is increasing with a beat that it reminiscent of that person in the apartment above yours tapping his or her giant foot: BAM! BAM! BAM!

And in addition, there is the influx of new manufacturers, which are seeing the opportunity to get into automotive manufacturing, something that, say, 10 years ago, was about as appealing as a session at an endodontist who had just run out of Novocain.

According to LMC Automotive, the startup EV brands in the U.S. are going to have nearly 40 models on offer in the U.S.

(Image: LMC)

However, LMC reckons that few of the new brands are likely to have sales of more than 50,000 units per year.

That said, a sufficient number of 50K-selling OEMs means that the sales are likely to be taken from the traditional OEMs.

However, LMC thinks that it is going to be costly for the upstarts that build factories. The firm calculates that the capacity utilization of a given plant is going to be on the order of 30%, which is about 60% less than it really ought to be. (I.e., 30% capacity utilization means that 70% of the personnel and equipment are not making vehicles, which is the whole point of their being there.)

Volkswagen Group 2021 EV Numbers

By Gary S. Vasilash

Volkswagen Group—Volkswagen, Volkswagen Commercial Vehicles, Škoda, SEAT, CUPRA, Audi, Lamborghini, Bentley, Ducati, Porsche—announced its combined electric vehicle sales on a global basis for 2021.

The company delivered 452,900 battery electric vehicles in ’21, a 95.5% increase over ’20 numbers, when it delivered 231,600 units.

The vehicles that are the biggest contributors:

  • Volkswagen ID.4: 119,600 units
  • Volkswagen ID.3: 75,500 units
  • Audi e-tron:  49,200 units
  • ŠKODA Enyaq iV:  44,700 units
  • Volkswagen e-up!: 41,400 units
  • Porsche Taycan:  41,300 units

Of that, the ID.3, Enyaq iV and e-up! are not available in the U.S. market. That represents a total of a non-trivial 161,600 units.

Here’s something to consider about that 452,900 EVs:

The Group delivered a total 8,882,000 vehicles in 2021.

Put the numbers in context.