Why 2030 Isn’t Going to Be All That Different from 2020

Yes, there will be more electric vehicles. But not all EVs. So internal combustion engines need improvement.

By Gary S. Vasilash

Bosch, Sujit Jain, president, Powertrain Solutions for Passenger Cars, Commercial & Off-Road, and Electric Vehicles at the company’s North American operations, points out, has been advancing—and producing—technologies for the auto industry essentially for as long as there has been an auto industry.

And today isn’t any different.

The company is not only making massive investments for developing and utilizing Industry 4.0 capabilities, but it is investing heavily in the development and production of everything from microprocessors and fuel cells in order to advance the functionalities and performance in the auto industry.

It is committed to the electrification of vehicles, whether this makes the form of hybrids, full battery electrics or fuel cell powered vehicles.

But while Jain says company projections have it that the number of battery electric vehicles in the U.S. will grow from about 2% of the market in 2020 to 30% by 2030, that still leaves 70%, the large percentage of being combustion engines. Yes, they may be hybrids, but there is still gasoline or diesel being burned.

So one of the things that Jain and his colleagues are doing is developing the ways and means to increase the efficiency of those engines, both in terms of performance and emissions reduction.

Some of the things that they are pursing, Jain says on this edition of “Autoline After Hours,” include synthetic fuels, electrically heated catalysts to reduce cold-start emissions, and hydrogen fuel injection (i.e., instead of a hydrogen fuel cell, this would be a combustion engine running on hydrogen).

Jain talks with “Autoline’s” John McElroy, Kelsey Mays of Cars.com, and me on this show.

After Jain’s segment, the three of us talk about a variety of subjects, including former Nikola head Trevor Milton being charged with three counts of criminal fraud related to the company he founded; Tesla’s Q2 financials ($1.14-billion in GAAP net income), the possible consequences of it opening up its charging network to other brands, and the move from upscale-shopping districts for its stores and galleries to lower-end real estate; Magna’s growth and technological breadth; and more.

And you can see it all here.

Tesla Q2 ‘21

If it hadn’t last $2-million on Bitcoin, the number would have been bigger

By Gary S. Vasilash

A few things from Tesla Q2 numbers

Consider this:

Models S/X production numbers were:

  • Q2 2020:      6,326
  • Q3 2020:      16,992
  • Q4 2020:      16,097
  • Q1 2021:      0
  • Q2 2021:      2,340

Were they not electric vehicles, the phrase “running out of gas” comes to mind.

To be fair to the people in the Tesla plants, for the Models 3/Y:

  • Q1 2021:      180,338
  • Q2 2021:      204,084

So they’re certainly busy.

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Here’s an interesting understatement:

“Solving full autonomy is a difficult engineering challenge in which we continue to believe can only be solved through the collection of large, real-world datasets and cutting edge AI.”

The emphasis on the dataset comes from the more than one-million Teslas the company is collecting data from.

However, there are plenty of companies that believe that in addition to the critical datasets there is a need for a sensor suite on the vehicles in order to assure that the real world is discerned by the vehicle in real time.

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The company also stated in its report to shareholders, “Public sentiment and support for electric vehicles seems to be at a never-before-seen inflection point. We continue to work hard to drive down costs and increase our rate of production to make electric vehicles accessible to as many people as possible.”

Presumably much of this growing support among the public is predicated on the availability of EVs from OEMs other than Tesla. Vehicles like the Audi e-tron and the Mustang Mach-E.

That last phrase—“accessible to as many people as possible”—seems to echo what Mary Barra has been saying for some time.  At the Aspen Ideas Festival in June Barra said, “As we move to an all-electric, zero-emissions future, it is on us to lead positive change and implement inclusive solutions that bring everyone along, especially our employees and communities.”

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So here’s a question: Is it possible that its Q2 net income of $1.1-billion, its largest-ever quarterly profit, notwithstanding, Tesla is coming from behind for a change?

Behind in terms of the development of automated driving, as it tries not to use an array of sensors.

Behind in terms of having vehicles that come at a price point that are more affordable?

As for the first, the need for things like LiDAR seem clear.

As for the second, time will tell whether companies like Volkswagen and GM are truly going to give Tesla a run for its money on the closer-to-entry end of the EV market.

The Emerging EV Challenge

Incumbents will gain some share. But it is going to take a lot of work to get it

By Gary S. Vasilash

When GM announced its sales for the first half of 2021, the Chevrolet Bolt EV and the new variant the Bolt EUV did quite well. Comparatively speaking.

That is, sales were up 142.4% compared with the first half of 2020.

Of course, 2020 was the COVID year, so the sales of pretty much every vehicle has shown robust signs of sales, but few with such a high percentage rise.

That said, the total number of sales for the two models in the first half of 2021 was 20,288. To put that number into context, realize that the company sold 31,886 Malibus during the same period—and that represented a decline of 33.5% for the stalwart sedan.

And to put the Bolt EV/EUV sales into context, know that in the second quarter alone of 2021 Tesla delivered 199,360 Model 3 and Model Y units—or looked at another way, Tesla sold in three months 179,072 more vehicles than Chevrolet did in six months.

“IONIQ 5 introduces the Hyundai brand to a while new set of buyers, Jose Munoz ,president and CEO, Hyundai Motor America, said of the forthcoming EV. Buyers matter. Especially new ones. (Image: Hyundai)

General Motors has a lot of commitment to EVs going forward, In November 2020 it announced that it would have 30 new EVs on the global market by 2025, of which two-thirds would be available in North America. Then in June 2021 it announced it was adding commercial trucks to the North American mix, as well as additional EV production capacity.

In the GM boilerplate it describes itself as “a global company focused on advancing an all-electric future that is inclusive and accessible to all.”

Last week Mercedes announced its all-EV approach by 2030.

But presumably this is not a plan that is “inclusive and accessible to all.”

Also last week GM announced a recall of 2017-2019 Bolt EVs. A problem with the vehicles potentially bursting into flames.

This is the second time these models have been subject to a recall, with the first being in November 2020.

The new GM EVs that are on the way will not have the same battery system used by the Bolt EV and Bolt EUV. It is an all-new design.

However, GM is not exactly in a position to make that as a benefit of the new vehicles because it would throw some serious shade on the Bolts.

Perhaps the limited sales of the Bolts works in GM’s favor because if the number of recalled vehicles was larger, if there were more people aware of the problem, then it would have even more work ahead of it trying to convince people that it, too, can make EVs with the best of them.

It is widely known that Tesla owners give Tesla a pass in a way that traditional OEMs have never gotten, nor will they. If there are manufacturing defects, shrug. If there are performance problems, shrug. If owners learn of those who are using the so-called “Autopilot” system and run into the side of a semi, a moment of silence followed by a shrug.

If any of these things are related to a traditional OEM: Wailing and gnashing of teeth by the customer base—and that’s just the start.

To be sure there will be more people buying EVs from the traditional brands. While in some cases it may be because the vehicles look damn good—Audi is certainly staking a claim in the design space—in more cases it will probably be predicated on the availability that can come from volume: not only availability in terms of the vehicles being on lots, but availability in terms of economies of scale helping reduce prices.

But given the delta between Model 3/Y sales and Chevy Bolt EV/EUV sales, I can’t help but think that the traditional OEMs may have a bigger problem on their hands than they might expect.

Although Hyundai has certainly been in the U.S. market since 1986, arguably it is still a challenger brand in the market compared to those that have been around for 100 years or more.

While its sales numbers are still modest in the U.S. vis-à-vis the established players, in the first half it sold 407,135 vehicles, or 49% more than it did in the first half of 2020.

Hyundai has been offering hybrids, EVs and even fuel cell vehicles in a way that many traditional OEMs don’t match.

So let’s say for the sake of argument that the same people who buy Samsung phones rather than iPhones would be more likely to go with a Hyundai than a Chevy. (If we go back to the aforementioned design advantage, Hyundai is certainly proved that point.)

So a chunk of the traditional goes there.

Then there are the new entrants. Lucid. Fisker. Lucid is staring at a high price point (think of it as a Cadillac competitor) and Fisker is more in the middle. Both of those companies have announced that they are working on what could be described as vehicles that are more inclusive and accessible.

While it might seem that the incumbents have the advantage simply because of their name recognition and availability, IBM doesn’t make PCs; when’s the last time you bought an image-related product from Kodak; and although a Pan Am shuttle took people to a space station in 2001: A Space Odyssey, Pan Am went out of business in 1991.

Mercedes Going All-EV: Sort Of

On the one hand, the company is all in. On the other, there is a recognition that people need to buy the vehicles

By Gary S. Vasilash

The important point about Mercedes-Benz announcement of its transition to “electric-only output” by the end of the decade “where market conditions allow” is that: where market conditions allow.

If people aren’t buying EVs, then there is little point in making EVs—except the whole thing that legislation may make it a requirement to do so.

Ola Källenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG: Desirability is key. (Image: Mercedes-Benz)

Which is something that gets lost in most of the discussion of the subject.

But if people are buying a whole lot of a given type of car with a given type of powertrain may be predicated on the fact that the alternatives are rather insufficiently appealing.

The phenomenon that is Tesla proves the point that if there are vehicles that are sufficiently desirable people will buy them.

In is only recently that OEMs have gotten to the point where they aren’t just sticking electric powertrains in vehicles in order to meet the aforementioned legislative demands, that OEMs have twigged to the fact that Tesla is not only annihilating these traditional OEMs when it comes to EVs, but is also crushing it when it comes to sales of premium vehicles.

People want to buy Teslas. Teslas look good. They have class-leading performance. They are supported by an extensive charging infrastructure.

As Ola Källenius, CEO of Daimler AG and Mercedes-Benz AG, acknowledged, “Our main duty in this transformation is to convince customers to make the switch with compelling products.”

Otherwise, the market conditions are not going to be such that people are going to want to buy electric Mercedes in any great numbers. The same goes for any other OEM that is putting out EVs.

Now in the case of Mercedes the company doesn’t need to worry so much about gross volumes as it does gross margins.

It acknowledged, “An important lever is to increase net revenue per unit by raising the proportion of high-end electric vehicles such as Mercedes-Maybach and Mercedes-AMG models, while at the same time taking more direct control over pricing and sales. Rising revenue from digital services will further support results. Mercedes is also working on further reducing variable and fixed costs and cutting the capex share of investments.”

So get the top end revenues while decreasing the amount it takes to build them, and supplement that with digital income.

Källenius: “This step marks a profound reallocation of capital. By managing this faster transformation while safeguarding our profitability targets, we will ensure the enduring success of Mercedes-Benz.”

Clearly, unless it makes a move now, then that success may not be as enduring as the company would like. 

Tavares on the Industry

Stellantis CEO talks about what the company that makes everything from Peugeot hatches to Ram pickups is doing in a period of automotive transformation

By Gary S. Vasilash

Carlos Tavares, Stellantis CEO, made some interesting comments during a session with the Automotive Press Association yesterday. In a wide-ranging interview with Joe White of Reuters, Tavares talked about subjects ranging from the chip shortage to “American e-muscle” to the lead North American brand for electrification (Jeep) to supply chain (“We have 110 models and approximately 4,000 parts per model”) to agility (“Being agile is part of our business. . . . This is an industry that is continually hit by crisis. . . .So we need to be mentally and physically agile”).

Earlier in July Tavares laid out the plans that the fourth-largest OEM on the planet has when it comes to electrification, including an investment of more than €30 billion through 2025 in electrification and software development.

Stellantis CEO (center) at the Warren Truck Assembly Plant with plant manager Andy Ragalyi. (Image: Stelllantis)

The company intends to have 70% of its light-vehicle mix in Europe to be low-emissions vehicles (LEVs) by 2030 and more than 40% LEVs in the U.S. in the same period.

One of the questions, of course, is China, where Stellantis isn’t as strong as some of its competitors.

Tavares said that they will be bringing Opel to China as an all-EV brand. He noted that the vehicles will not be compact but large, explaining that German brands have a reputation in China that is not one of diminutive models, so they will take that into account.

But one of the more interesting things he said in the APA interview was something he didn’t fully articulate.

He said that they are going to be executing an “innovative business model” in China.

In May it was announced that Stellantis and Foxconn had come to a strategic agreement through which the two will be working together on electric vehicles. China is the initial market for those EVs.

Presumably there will be more to it than some sort of additional collaboration with Foxconn or other contract manufacturers.

Tavares talked about how the industry is presently in a “very transformative” period.

Odds are he’s not going to be making transformation in small bits.

BMW Brings an Electric Scooter

And if you want one, make sure your digital account if full of digits

By Gary S. Vasilash

“The new BMW CE 04 is the link between the user’s analogue and digital worlds. It is both a means of transport and a means of communication for the big city commuter. With its forward-looking design thanks based on an innovative package, it sets out to redefine the scooter segment.”

That’s Edgar Heinrich, head of Design, BMW Motorrad.

The CE 04 is a scooter. An electric scooter.

Heinrich and the BMW CE 04 electric scooter. (Image: BMW)

How it is a means of communication is curious. And while its design has a shard aesthetic to it, which is about as far from the smooth lines characteristic of a Vespa, it isn’t entirely clear whether this is “forward-looking” or just “Blade Runner.”

It produces 42 hp. It has a maximum speed of 75 miles. It has a maximum range of an estimated 80 miles. It can carry two people (which would probably have an effect on the speed and range).

Its 147.6-volt lithium-ion battery pack recharges fairly quickly: from 0 to 100% in 4 hours and 20 minutes when plugged into a normal household outlet (Level 1). For a Level 2 charger (one of those units you’ve seen in parking lots, say, at Whole Foods) it is 1 hour and 40 minutes. If you charge the battery from 20% to 80% (which would presumably provide a range of 64 miles) on a Level 2 charger, it is just 45 minutes. Or the time to do a good shop at Whole Foods and a quick cappuccino.

But there is one number that is somewhat brake-applying for most people: It has an MSRP of $11,795.

For a scooter.

Another Volvo Move Toward EVs

It is shifting the structure of its traditional powertrain business to achieve more resources for EVs

By Gary S. Vasilash

Admittedly this is sort of confusing. Volvo Cars is owned by Geely Holding. The two companies have announced that they are creating a joint venture, Aurobay, which will be dedicated to powertrain operations.

Volvo Cars will wrap in the assets from Powertrain Engineering Sweden, which includes an engine plant in Skövde, Sweden, another engine plant in China, a R&D team, and other powertrain items.

The purpose of the creation of Aurobay is said to be to allow Volvo Cars to focus on developing electric vehicles. Volvo has announced it plans for 50% of its global vehicle sales to be full EVs by 2025, with the remaining half hybrids. And by 2030, all of its vehicles are to be fully powered by electricity.

The slightly confusing part about all this is if Geely owns Volvo, presumably that means it owns Volvo’s assets.

So this creation of the joint venture seems as though it is something that could have been executed by a memo from HQ.

One more thing about Aurobay: there is the potential to serve customers that aren’t Volvo or Geely.

Rimac in London

Of course you’re going to find a super car in London

By Gary S. Vasilash

There will be 150 Rimac Automobili Neveras produced. The car is all electric. The car is rated at 1,914 hp.

The Rimac Nevera in London. (Where are the other cars?) Because it is an electric vehicle, it can travel through the Ultra Low Emissions Zone without a problem. (Image: Master Krishan)

In this photo, the Nevera is in London. This outing is the first time the car has been outside of where it was designed, engineered and built, Croatia. It will be going to the Goodwood Festival of Speed later this week. Which is reasonable. It will be part of the hillclimb in the Supercar Run.

Given that its four electric motors power it to 60 mph in 1.85 seconds and up to 100 mph in 4.3 seconds and will hit 186 mph after 9.3 seconds, odds are it will do well.

The Nevera was in London because its official retailer in the country, H.R. Owen, is there.

The vehicle has a sticker of two-million Euro, which is 1,712,730.00 British pounds.

The Nevera will go on something of a world tour, making some 20 stops in Europe, Asia and the U.S.

Odds are the vehicle will be sold out before it gets much further.

Volvo: The Return to Safety

Back to a core value

By Gary S. Vasilash

Volvo cars were once widely known for two characteristics:

  1. Their boxy design
  2. The fact that they were built with safety foremost

The company essentially “owned” safety in the minds of consumers.

But in the mid- to late-90s the company wanted to be more than something that was the Official Car Builder for Tweed-Jacket-With-Suede-Elbow-Patch-Wearing and Pipe-Smoking East Coast Professors.

Style took over from safety.

The design team members were evidently given French curves to supplement the T-squares.

And while the engineers back in Gothenburg were still figuring out the materials and the structures and the systems that would make the Swedish vehicles safe, their laudable efforts were eclipsed by things like Val Kilmer’s character driving a C70 in The Saint.

But safety is back.

In 2022 Volvo will launch a fully electric SUV, the flagship model for the brand.

(Image: Volvo)

It will come standard with a LiDAR system, from Luminar, and an on-board supercomputer system, from NVIDIA.

“Volvo Cars is and always has been a leader in safety. It will now define the next level of car safety,” said Håkan Samuelsson, Volvo chief executive.

When it comes to autonomous driving, the thing is that there is little in the way of driving and a whole lot in the way of trusting.

As in trusting that the system is going to work because you are, even though behind the wheel, acting as a passenger.

Safety is huge when it comes to autonomy. Which means a need for plenty of sensors, including LiDAR, and the wherewithal to process that information so that the system will have the appropriate responses (e.g., braking, turning, accelerating).

By coming out and saying that this tech is going to be built in to its new vehicle, it seems as though that Volvo is ready to take that safety mantle back.

(Kilmer? He’ll be back this fall as Iceman in Top Gun: Maverick)

GM to Spend More Billions on EVs (and AVs)

Why spend $20 billion when you can spend $35 billion?

By Gary S. Vasilash

Yesterday General Motors announced that spending $20 billion between 2020 and 2025 on electric and autonomous vehicular tech, as it said it had intended to in March 2020, isn’t enough.

It announced that spending $27 billion during the same period, as it said it had intended to in November 2020, just doesn’t cut it.

So now GM says that it will spend $35 billion by 2025.

In other word, a 75% increase in spend from what it originally intended just 15 months ago.

Why?

Said Mary Barra, GM chair and CEO: “We are investing aggressively in a comprehensive and highly integrated plan to make sure that GM leads in all aspects of the transformation to a more sustainable future.

“GM is targeting annual global EV sales of more than 1 million by 2025, and we are increasing our investment to scale faster because we see momentum building in the United States for electrification, along with customer demand for our product portfolio.”

The Bolt EV is presently the GM electric vehicle. In the first quarter GM sold 9,025 of the compact electric vehicles.

Yes, that is a 53.7% increase over Q1 2020, but that was Q1 2020.

The increase in Corvette sales Q1 to Q1 was 73.1%. While only 6,611 of those vehicles were delivered, odds are GM makes more on each Corvette than Bolt.

GM does have more EVs coming, like the HUMMER EV pickup and the Cadillac LYRIQ crossover. And there will be an electric Silverado and other vehicles to boot.

GM will be building two EVs for Honda, one for Honda brand and one for Acura. And it is supplying Navistar with its HYDROTEC hydrogen power fuel cells for heavy trucks that are to be launched in 2024.

And while it doesn’t get a whole lot of attention compared to EVs, Cruise is continuing its efforts to achieve higher levels of autonomy. It has been given the go-ahead to provide a public service sans driver in California. It has been named the exclusive autonomous rideshare provider in the city of Dubai. It will be receiving Cruise Origin vehicles—jointly developed by GM and Honda, and scheduled for production in GM’s Factory ZERO Detroit-Hamtramck Assembly Center in 2023.

No question that GM is making a huge commitment.

A thought

Here’s something that needs to be taken into account. According to the U.S. Dept. of Energy, as of approximately right now there are 42,664 charging stations in the U.S. and 103,654 charging outlets available to the public.

People who live, say, in southeast Michigan tend to travel up I-75 to northwest Michigan every holiday in numbers that make a chain out of the vehicles, trailers, boats, etc. Somehow, unless there is access to chargers that are going to allow recharges in minutes, not large fractions of an hour (or more), it is going to take one EV-intensive holiday weekend to have some exceedingly sour people.

When people are used to spending a quick time at a gas station, sitting in a long line waiting for access to a plug may have a big effect on the overall acceptance of EVs.