Tag Archives: Automotive News

What the IRA Means to the Auto Industry

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By Gary S. Vasilash

According to the U.S. Energy Dept., the Inflation Reduction Act of 2022 is “the single largest investment in climate and energy in American history.”

And in the automotive space, the IRA means a continuation of tax credits for consumers who buy electric vehicles (up to $7,500, though the math gets tricky) and even for OEMs and other companies that get into the business of making batteries.

Blue Oval City, the $5.6-billion, 3,600-acre campus for EV and battery production Ford is building in Stanton, Tennessee. (Image: Ford)

As for that battery money:

It provides tax credits of $35 per kWh for the cells. And if another company organizes those cells into battery modules, it gets $10 per kWh. So if there are two companies involved and they each produce portions for a 100-kWh battery for an EV, then the cell manufacturer would get $3,500 and the module maker $1,000. And if a single company did both, then that’s $4,500.

So if you wonder why vehicle manufacturers are investing billions in battery plants (like Ford’s recent $3.5-billion announcement) perhaps that makes it even more understandable.

Not only do they make money by selling vehicles, but they also make money by producing the batteries that go into those vehicles.

On this edition of “Autoline After Hours” we’re joined by Devin Lindsay, who is responsible for Alternative Propulsion forecasting at S&P Global Mobility, Mark Barrott, principal with Plante Moran’s strategy and automotive practice, and Mike Martinez, who covers Ford for Automotive News.

The topic is the multi-billion dollar effect of the IRA on the automotive industry.

The IRA is essentially industrial policy. The aforementioned tax credits that consumers can receive are only possible if the vehicle in question not only falls below a price cap, but if the vehicle’s manufacturing—including the batteries—has sufficient domestic content. This puts companies that do make electric vehicles but don’t make them in the U.S. (think Audi, for example) at a competitive disadvantage.

While an objective is to make EVs more accessible to more people—right now EVs account for 5.6% of the market—it isn’t entirely clear that the 50% mark that the Biden Administration hopes to achieve by 2030 (and that several OEMs seem to be capacitizing themselves to provide) will happen: Do consumers really want EVs?

These and other questions are explored on the show.

And you can see it here.

Getting It Fixed

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By Gary S. Vasilash

One aspect of contemporary vehicles is that there is plenty of tech on board, which not only provides an array of consumer benefits, from safety to entertainment, but which also makes them comparatively more complicated to diagnose what has gone wrong when something inevitably does, and it is just as tricky to fix it.

There is something else about today’s motor vehicles that may not be even known by the owners: many of them are transmitting information about their state of being to the OEMs. This information—say about a fault of some sort—can then be used to send a message to the owner saying, in effect, “Something is wrong with your vehicle; go to your dealer to get it taken care of.”

The information about the fault is then shared with said authorized dealer. “Authorized,” of course, means approved by the OEM in question.

Local repair shops?

Nope.

What’s more, as Gabrielle Hopkins, vice president of Federal Affairs, Auto Care Association, which represents the automotive aftermarket, including service, maintenance and repair shops, points out, not only are the independents kept out of the loop when it comes to this telematics information, but there are typically special tools that are necessary to access and repair vehicles that these outlets can’t get.

They are restricted to the “authorized” service centers, typically found within dealers’ organizations.

While there are all manner of arguments put forth as to why this is the case by the OEMs—e.g., they want to protect the intellectual property that is represented by the operating systems developed for their vehicles; cybersecurity issues might arise—this essentially means that there is a protected ecosystem that keeps the independent shops from being able to fix vehicles.

Hopkins and her colleagues are lobbying on behalf of the Right to Equitable and Professional Auto Industry Repair (REPAIR) Act, which the Auto Care Association, CAR Coalition and Automotive Aftermarket Suppliers Association explain, in part:

“The legislation would prohibit impeding the vehicle owner or a repair shop from obtaining service information, tools, or parts, including the ability for a vehicle owner to choose aftermarket parts needed to fully maintain and repair a vehicle.”

Let’s face it: Vehicles aren’t going to get less complicated.

Limiting choice generally means that prices are higher.

And as has been seen during the pandemic, there are limited resources at a given dealership for repair, so should one need something fixed sooner rather than later, the availability of more repair options rather than fewer is a consumer advantage.

Of course, the OEMs and the dealerships may not care much about that.

Learn more from Hopkins on this edition of “Autoline After Hours,” where “Autoline’s” John McElroy, Richard Truett of Automotive News and I talk with her.

You can see it here.

Lidar Explained

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You’ve probably heard reference to “lidar.” Here’s where you can get a quick tutorial

By Gary S. Vasilash

Elon Musk once famously said, “Lidar is a fool’s errand.”

And it went downhill from there.

What was he talking about?

A sensor that uses laser beams.

The sensor sends out pulsed light waves from as many as 128 individual lasers (at an eye-safe frequency, so you need not worry about being blinded by a vehicle coming at you with lidar engaged). The waves hit something and bounce back. The time is calculated (send, hit, return). And the information is used to generate a 3D map of the environment. Realize that there is a lot going on here: this beam bouncing is taking place at a rate of millions of times per second.

Using lasers for sensing. (Image: Velodyne Lidar)

The whole purpose of this is to enhance a vehicle’s ability to be able to provide safer driving—for the people within the vehicle as well as others, be they in other vehicles or on foot. And it can also contribute to self-driving vehicles, with the sensor or sensors (there are some lidar devices that have a 360° view so conceivably only one would be needed on the roof of a vehicle to “see” what’s going on; there are some devices that have more limited view, say 120°, so there would be multiples installed) providing input so that the vehicle can perform accordingly.

3D lidar was invented by David Hall in 2005. He had established a company in 1983 to produce audio subwoofers. What was then Velodyne Acoustics has become Velodyne Lidar.

And on this edition of “Autoline After Hours” Mircea Gradu, Velodyne senior vice president of Product and Quality, provides an explanation of lidar—the how, why, where and when of the technology.

One of the things that he really emphasizes in his comments is the importance of lidar when it comes to safety.

He points out, for example, that most vehicle-pedestrian accidents occur after dark. In 2018 76% of pedestrian crash fatalities in the U.S. occurred at night.

Lidar can “see” in the dark. Camera-radar based system don’t have the same level of capabilities. So so far as Velodyne is concerned, any advanced driver assistance system (ADAS) really needs to have lidar sensors as part of its sensing suite. Assuming that the vehicles are going to travel at night.

While Gradu is, not surprisingly, a bit proponent of lidar, he also acknowledges that there needs to be sensor fusion–the use more than just one or two types of sensors. After all, the subject is safety, and who wants to stint?

Gradu talks with Alexa St. John of Automotive News, “Autoline’s” John McElroy and me.

Then during the second half of the show the three of us discuss a number of topics, including the semiconductor shortage and potential solutions, whether companies like GM are putting billions of dollars at risk when they invest heavily in electric vehicles and more.

And you can watch the show right here.

Jeff Stout of Yanfeng: The Inside Story

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“Exterior design gets them in the vehicle. Interior design keeps them there.”

That may be an old truism, but it is likely accurate.

Consider—what if you’re in the market for a new car and see something that really looks awesome. You know that you’d be proud each and every time you walk up to it in your driveway. You know that you’d be proud to have it in your driveway so your neighbors can see what incredible taste you have.

So you open the door, climb inside, get behind the wheel and—meh.

Nothing special. Maybe underwhelming.

So you figure that this may not be the best choice. After all, while you’re going to see the outside of the vehicle for a minute or two as you approach it, you’re going to be looking at—and using—what’s on the inside for hours on end.

Interiors matter.

A whole lot.

And as the transportation industry moves toward a state where there may be less ownership and increased use of ride hailing, what is going to make the most difference between using Service L and Service U may be the interior execution and amenities.

Yanfeng is a global supplier, with more than 240 branches and some 64,000 employees networked around the world. It specializes in interiors, seating, cockpit electronics, passive safety and more.

Yanfeng XiM 20 concept model: determining the elements of the interior moving forward. (Image: Yanfeng)

Jeff Stout leads global research into technology and mobility for Yanfeng. (To the point of the wide span of the company’s operations, he has an office in Holland, Michigan.)

One of the areas that he and his colleagues are most interested in is what electrification and automation are going to mean vis-à-vis automotive interior development.

For example, in an EV, where there is certainly a consideration when it comes to using stored energy, they are looking at improved thermal management approaches, such as using large interior surfaces—from door trim panels to headliners—as heat sources rather than relying on the blower of a conventional HVAC system.

When it comes to autonomous driving, there are a range of considerations, from monitoring driver awareness for Levels 2 and 3, to how do you assure that the interior of a vehicle is sanitized in shared vehicles so that people are willing to climb in one that someone has climbed out of. (In this case, one of the answers is UV light.)

Stout talks about these and other topics on this edition of “Autoline After Hours” with “Autoline’s” John McElroy, Pete Bigelow of Automotive News and me.

It is an hour-long, wide ranging discussion that goes from the inside of vehicles to the market at large, to an analysis and assessment of what’s happening now and what could happen in the not-too-distant future.

And you can see it here. —gsv

China Sales Compared to U.S.—and They’re Not Done Yet

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According to Automotive News, for 2020 there were 14,645,049 light vehicles sold. This is down 14.4% compared with the total number for 2019, 17,104,792. Which is to say that while COVID-19 had an impact on overall sales, it wasn’t as substantial as it had been feared to be.

China, too, was affected by the pandemic. And its sales were affected, as well.

That said, numbers for the first 11 months of 2020 have it, according to LMC Automotive, that there were 21.64 million light vehicles sold in China. About a third more than U.S. sales.

And there is still an additional month to go in the Chinese market.

In November there were 2,710,957 vehicles delivered in China. So if that number was repeated in December, that would be a total of 24.35 million units, or nearly 10 million more than were sold in the U.S.

One thing that is interesting about the China market is that the top-selling brands are probably not what you’d expect.

Volkswagen Lavida–number-one in China. (Image: Volkswagen)

The number-one brand in terms of sales and production is Volkswagen. What’s more, the top-selling vehicle is the Volkswagen Lavida, a Passat-like sedan that is available only in China. The car was the best-selling model in China in 2019, and even the folks at Volkswagen acknowledge, “but hardly anyone in Germany has ever heard of it.”–gsv