shinymetalboxes

Cars, culture & contingent considerations

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

Posted on March 13, 2023 by shinymetalboxes

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

Posted on March 10, 2023 by shinymetalboxes

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.

Tesla Dominates S&P Global Mobility Loyalty Awards: How Come?

Posted on March 6, 2023 by shinymetalboxes

By Gary S. Vasilash

Tesla is a phenomenal company in many respects, not the least of which are captured in the most recent S&P Global Mobility Loyalty Award assessment. The firm has been doing this for 27 years, so it has a good handle on what’s going on.

Based on 11.7-million new vehicle registrations in 2022, the loyalty determination is made on whether a household with a particular make, model or manufacturer in the garage goes out and buys a new vehicle that repeats the same. So a Tesla loyalist might have a Model 3 in the garage and gets (additive or replacement) another Model 3 or a Model Y or S or X.

Of the eight overall categories, Tesla took five:

Overall Loyalty to Make
Ethnic Market Loyalty to Make
Most Improved Make Loyalty
Highest Conquest Percentage
Alternative Powertrain Loyalty to Make

The other three are:

Overall Loyalty to Manufacturer: General Motors
Overall Loyalty to Dealer: Subaru
Most Improved Alternative Powertrain Loyalty to Make: Mercedes-Benz

As for those three: Tesla couldn’t have won the Manufacturer award because that goes to a firm with multiple brands, and Tesla just has one. It doesn’t have dealers, so that’s out. And the “Most Improved” goes to a brand that has historically had one type of powertrain (e.g., ICE) and is now adding EVs to the mix.

All of which is to say that Tesla is dominant.

On this edition of “Autoline After Hours,” Vince Palomarez, who manages and develops the Loyalty tools at S&P Global Mobility, talks with “Autoline’s” John McElroy, Jeff Gilbert of WWJ-950, and me about Tesla’s performance as well as how other companies did in this latest assessment.

Realize that, for example, GM has taken the Manufacturing award for eight years running and has taken it 19 times out of the possible 27, so it isn’t like it is withering from the Tesla onslaught.

That said, when you think of the OEMs spending literally billions of dollars on advertising (according to Statista, Ford spent $1.98-billion in 2021 on advertising in the U.S. to persuade people to buy its vehicles—those who already own a Ford or Lincoln and those it hoped to conquest) and Tesla spent $0, how it is accomplishing its domination of the Loyalty awards is something that is essential for some to know and just fascinating for the rest of us.

And you can see it here.

Building Cars Is Hard

Posted on January 7, 2023 by shinymetalboxes

By Gary S. Vasilash

On September 18, 2021, this announcement was made by Rory Harvey, vice president, Global Cadillac:

“Today, reservations for the 2023 Cadillac LYRIQ Debut Edition sold out in just over ten minutes and we continue to see a lot of enthusiasm around the brand – both current product and in our all-electric future. The initial response for LYRIQ has been extraordinary. Since the show car unveiling last year, more than 200,000 people have expressed interest in learning more about the vehicle and our electric future.”

Deliveries of the electric SUV, which had obtained significant, deserved acclaim, began in July 2022.

The Cadillac LYRIQ: an impressive electric SUV that more people would undoubtedly like to be behind the wheel of. . .except production is rather *limited*. *(Image: GM)*

The LYRIQ is built in the GM assembly plant in Spring Hill, Tennessee. The factory originally built for Saturn. At the plant the Cadillac XT5, Cadillac XT6 and GMC Acadia are also produced.

LYRIQ went into production on March 21, 2022.

So keep in mind: production starts in March, deliveries start in July, and thousands of people wanted to get behind the wheel of Cadillac’s first electric vehicle.

Now admittedly all OEMs in 2022 had to deal with all manner of issues related to COVID and chips and supply chain snafus.

But here is something that is simply startling:

GM announced its U.S. deliveries for 2022.

All in, 2,274,088 vehicles, making it #1 in the U.S.

Cadillac LYRIQ: 122 vehicles.

How many of those LYRIQ “hand wavers” are going to put down their arms and go across the street to an Audi or Mercedes store?

And what about those who were part of the 10-minute sellout? How are they feeling about their decision?

Yes, building vehicles is hard.

But you would imagine that for a vehicle that is as important to Cadillac as the LYRIQ is, that would have been addressed and any speedbumps mitigated.

(Incidentally: while the LYRIQ was the vehicle with the fewest deliveries among all GM vehicles for 2022, the second lowest was another electric vehicle that sold out in 10 minutes when its reservations opened in October 2020 and is now said to be sold out for at least two years: the HUMMER EV. GM delivered 854 in all of 2022.)

Some Surprising Toyota Numbers

Posted on January 4, 2023 by shinymetalboxes

By Gary S. Vasilash

One thing that is occurring is that OEMs are decreasing the number of types of vehicles that they have on offer.

Consider, for example, Ford.

If you want a “car,” then you’d better be happy with a Mustang because that’s all that’s available.

It has gone from arguably a “full-line” manufacturer to a SUV/truck manufacturer.

And it is doing well in that truck category, as the company announced that the F-Series is the best-selling truck in the U.S. for 46 years running, and that it sold more than 640,000 trucks in 2022 (this isn’t just the F-150 but the F-550 chassis cab, so it is a mix of personal and commercial vehicles).

Toyota is a full-line manufacturer, as it builds cars, trucks and utes.

And while it might seem as though this spreading might cause some dilution of vehicle sales (i.e., with a range to chose from, a consumer might pick a car rather than a ute or a truck rather than a car, thereby diminishing the overall sales for a given vehicle), when it added up its 2022 U.S. sales it had some impressive numbers:

The Camry is the best-selling passenger car for 21 years running
The Tacoma is the number-one small pickup and has been for the past 18 years
The RAV4 is now the best-selling SUV for seven years in a row

While some might think that the car segment isn’t all that interesting, know that it sold 295,201 Camrys in 2022.

It also sold 222,216 Corollas (the number-one selling compact in the U.S.)

And there are other cars on offer: Supra, GR86, Mirai, Avalon, and Prius.

The Tacoma clearly is a truck with legs. There were 237,323 sold in 2022. A point of comparison would be the combined number of the Chevy Colorado and GMC Canyon: 117,016.

The RAV4 run is perhaps the most impressive of all. While Ford and GM can legitimately argue—as can the Stellantis Jeep brand—that they have deep, deep SUV know-how and capability, the RAV4, of which 399,941 were sold in 2022, just keeps leading the list.

Seems that offering a full line can have some advantages for the OEMs’ sales and the customers’ choice.

The EV Market May Not Be What Some Think It Will Be

Posted on December 21, 2022 by shinymetalboxes

By Gary S. Vasilash

There must be—and certainly ought to be—some consternation this week at GM HQ.

International consulting and accounting firm KPMG came out with its 23^rd Global Automotive Executive Survey, with responses from execs in and related to the auto industry. More than 900 of them from 30 countries.

When asked to rank the companies they think will have a leadership position in electric vehicles by 2030, it went like this:

Tesla
Audi
BMW
Apple
Ford
Honda
BYD
Hyundai-Kia
Mercedes
Toyota
Baidu
Fisker

Look what’s not on the list. And I don’t mean VW, though that is absent, too.

Yes, Apple is on the list. It was last year, too. Then it was in 8^th position. Clearly there are more than a few people in the industry that see something that many of us don’t (i.e., Why should Apple bother getting into a low-margin industry? It is unlikely that it could get considerably more in the way of subscription monies than it already has.)

There is another somewhat troubling survey results across the board.

On the question of what percentage of the market battery electric vehicles will have in 2030:

U.S.: 29%
China: 24%
Europe: 24%

While there is some evident optimism regarding the potential uptake of EVs in the U.S., 29% surely isn’t the 50% that is regularly bandied about by domestic OEMs.

And while some may think the 29% average is satisfactory, the median may give them more joy: 35%.

Until they find out that the median number for the percentage of EVs in the U.S. market by 2030 in last year’s KPMG survey was 65%

Cadillac CELESTIQ Explained

Posted on December 12, 2022 by shinymetalboxes

By Gary S. Vasilash

“Go make something epic.”

That, Tony Roma, chief engineer of the Cadillac CELESTIQ, says was the mandate he and his team received from GM management to develop a vehicle for the brand that is more like an aurora borealis than a mere halo.

This is a full-size uber-lux electric vehicle that customers will commission, not simply buy.

The Cadillac CELESTIQ is an expression of what can be accomplished by a team given a mandate to “make something epic.” *(Image: Cadillac)*

It is a sedan that has aluminum mega-castings at the base of its overall structure and an exterior skin made primarily with carbon or glass fiber panels. Roma says that the doors are made with SMC—because the material is transparent to radar, and there are radar units in the doors. Yes, the vehicle is also ladened with plenty of technology, including Ultra Cruise, which will allow hands-free driving in multiple driving scenarios, going well beyond the Super Cruise that GM offers in Cadillacs and other brands.

The CELESTIQ has an 111-kWh Ultium battery pack and a two-motor, all-wheel drive system that generates an estimated 600-hp and 640 lb-ft of torque: Roma says that the car goes faster in a straight line than a CT-5 Blackwing—but the vehicle, he says, is powered such that it provides confidence for the driver and is not meant to have performance for performance’s sake.

This is not simply another vehicle in the Cadillac lineup: the companies benchmarked for the CELESTIQ included Rolls-Royce and Bentley. The pricing for the vehicle is on the order of $300,000+.

Roma says that the production rate of the hand-built vehicles—and the building is going to occur not in a factory, but at the GM Global Technical Center in a special clean-room like facility that is called the “Artisan Center.” The company has made an $81-million investment for producing the vehicle. Within the Artisan Center there will be no more than six vehicles being built at any given time.

Speaking of the development of the vehicle Roma says, “This is all-in house. We didn’t write a check [to another company] and put our badge on it.”

The CELESTIQ, in effect, is a vehicle that makes a statement that Cadillac is a brand that is competitive at the highest echelon within the auto industry.

Roma talks about the engineering that goes into the CELESTIQ on this edition of “Autoline After Hours” with “Autoline’s” John McElroy, Frank Marcus of MotorTrend and Richard Truett of Automotive News.

It is arguably one of the most comprehensive insider looks on what will be a landmark vehicle, not only for Cadillac, but for the overall auto industry.

And you can see it here.

Bob Purcell: from the EV1 to the VIA Skateboard Chassis

Posted on November 7, 2022 by shinymetalboxes

By Gary S. Vasilash

Bob Purcell has been in the EV space for a number of years. In the early 1990s when General Motors was developing the EV1 Purcell was involved. He was to become the head of the then-newly formed Advanced Technology Vehicles Division at the company. After nearly 17 years at GM Purcell left the corporation and worked at companies involved in batteries and electric propulsion systems.

Purcell is now the CEO of VIA Motors, which is a producer of an electric skateboard chassis for application in Class 2 through Class 5 cargo vans, trucks and buses.

The skateboard chassis allows an array of upfitting opportunities. *(Image: VIA Motors)*

Although he had his start with a passenger car (the EV1), Purcell is convinced that commercial vehicles are the ideal place for electric propulsion.

As he explains on this edition of “Autoline After Hours” this is because the total cost of ownership of an electric truck is less than that of one with a thermal engine, thanks to things like reduced maintenance requirements. In addition to which, he says there is a 4:1 per mile cost benefit (electricity vs. liquid fuel). All things that add up to improvements to the bottom line of commercial carriers.

(While personal vehicle owners can also experience the same advantages, it isn’t often—if ever—that you hear the buyer of a new EV say, “I got this because the life-cycle costs are a distinct advantage.”)

Purcell talks with “Autoline’s” John McElroy, Sam Abuelsamid of Guidehouse Insights, and me on the show.

Beyond his discussion of what they’re doing at VIA, Purcell shares plenty of insights on both his career as well as the overall EV landscape. The man is clearly an EV proponent, but unlike many boosters of the tech, Purcell has a deep base of knowledge in the space, which makes him far more credible than the average EV enthusiast.

And you can see the show here.

Saving Cadillac

Posted on October 24, 2022 by shinymetalboxes

By Gary S. Vasilash

John F. Smith worked at General Motors at the same time that John F. Smith worked at General Motors.* The latter was to become GM CEO. The former was appointed by the latter to a number of executive positions within GM.

Perhaps the most notable was in 1997, when he was named head of Cadillac.

Things weren’t great at that brand back then. Hard to believe, but there was something that is now intrinsic to Cadillac that was absent: the Escalade, the massive truck-cum-SUV that has had visual presence on the road for a little more than two decades now.

The Escalade was to come to be under John Smith’s period at Cadillac, helped into existence by the other John Smith, who was known as Jack.

John Smith talks about his career at Cadillac in this edition of “Autoline After Hours,” as well as a book he has recently had published about some of his adventures in the auto industry, Fin Tails: Saving Cadillac, America’s Luxury Icon (see how important Escalade was/is?).

Also on Smith’s resume are positions including vice president of Planning at General Motors International Operations in Zurich as well as president of Allison Transmission. Which is to say that he has a broad perspective on the auto industry, one broader than just Cadillac.

On this edition of “Autoline After Hours” Smith spends the hour talking with “Autoline’s” John McElroy, Doron Levin, who, among other things, writes about the auto industry at Saving Alpha and me.

And you can see it here.

*Given that “Smith” is the most common surname in the U.S., and “John” has been in the top 10 until 1987, this isn’t exactly surprising.

How Innovative Is Auto?

Posted on October 7, 2022 by shinymetalboxes

In the Boston Consulting Group list of the top 50 most innovative companies in the world there are few surprises.

The top three are Apple, Microsoft and Amazon. Alphabet comes in at 4.

Not much of a surprise there. You could mix up the names and it would probably be about right.

The first automotive company, at number 5, is Tesla.

Again, not much of a surprise there, either.

But there isn’t another automotive company on the list until position 21. Toyota.

Bosch is down a few spots at 26, although one might argue that its innovation profile undoubtedly has something to do with its Industrial Technology, Consumer Goods, and Energy and Building Technology, too—not just Mobility Solutions.

Next is Hyundai, at position 33. It wasn’t that many years ago when Hyundai was considered to be not much more than a car company for people who wished they could buy a better car but couldn’t; now it is a highly innovative provider of some of the most remarkable vehicles on the road.

General Motors makes the list at 42, and crosstown rival Ford is just behind it at 43.

Mitsubishi is at 48, but odds are it is not for its motor vehicles (the company has a multiplicity of companies under its umbrella).

So if we subtract Mitsubishi but keep Bosch, there are 6 automotive companies on the list. Or 12%.

Still, it seems that there could be, should be, more.

To be sure, it is a whole lot more difficult to make significant developments in vehicles than in consumer electronics.

But one might imagine that with all of the ways that auto OEM execs are describing their companies the positioning on the list would have more than one company in the top 10 and more than two in the top 25.