In the first three quarters of 2021, these are the U.S. sales numbers of the leading luxury brands:
259,237 BMW
245,864 Lexus
230,855 Tesla
213,708 Mercedes
That’s right: Tesla outsold Mercedes.
And then there is this, the market capitalization (on 11/11/21) of the three companies that were once known as the “Big Three”:
GM: $89.14 billion
Ford: $77.5 billion
Stellantis: $64.21 billion
(It is worth noting that in addition to Chrysler, Dodge, Jeep, Mopar and Ram, Stellantis includes Abarth, Maserati, Open, Alfa Romeo, Citroen, DS Automobiles, Fiat, Fiat Professional, Lancia, Peugeot, and Vauxhall. Meaning it is a much larger company back when it was part of the Big Three.)
With its Hertz deal, Tesla continues to defy us skeptics
By Todd Lassa
Contributor
Electric cars are the future. No matter how attracted you are to the charms of the internal combustion engine, it should be obvious by now we need to stop burning fossil fuels ASAP and begin to try and reduce greenhouse gases, if it’s not already too late.
When the transition finally comes, when internal combustion engines are powering only a few collectible cars out for a cruise on warm summer days – and two or three of them may be mine, I’m afraid – it will be right and appropriate to celebrate Tesla’s contribution to the shift. Full disclosure here: I’ve long been a Tesla skeptic, not so much because of the cars, which are undeniably state-of-the-art in their battery chemistry (until solid-state batteries become the order of the day), but mostly because of its CEO, Elon Musk.
(Image: Tesla)
From the beginning, I was skeptical about Telsa’s ability to make money. Most of the few profitable quarters since Tesla’s 2012 IPO were from selling zero-emissions vehicle credits in California to automakers whose sales of vehicles were anything but zero-emissions.
Then there’s Musk’s techie hucksterism and his faked astonishment at the value of the company’s shares. He’s long been known for unveiling new products with ridiculously short development schedules. The vehicle is introduced. The stock goes up. And in many cases, the vehicle is nowhere to be seen after it has left the stage. The Cybertruck has been delayed again and again. As has the Roadster. No matter, it seems. The Tesla faithful will wait.
Were it a brand from Detroit or Stuttgart, these delays would be derided. Not so for Musk.
When Hertz announced in October that it has signed a contract to buy 100,000 Tesla Model 3 EVs, one-fifth of its rental fleet, conventional auto business wisdom might have been, “why would Musk do that?”
“Heritage” automakers historically relied on rental fleets to take as much as one-quarter of the production of their mainstream compact and midsize models. A Nissan Sentra sold to a retail customer will make a razor-thin profit for both the automaker and the dealer – and even less when leased to Hertz or Enterprise and then sold after a couple of years at another huge discount, damaging resale values even more for those who drive these models every day.
Many of the mainstream automakers have been talking for years about reducing their rental fleet business because of the negative effect those sales had on residual values. But when the Hertz-Tesla deal was announced, Tesla Inc.’s shares shot up by 9.6% to make it the latest tech firm to top $1-trillion in market cap. Musk may soon pass Amazon’s Jeff Bezos as the world’s wealthiest human. As I write this, one share is worth $1,096.02, or $1.1 trillion in market cap. GM is at $79.1 billion and Ford Motor is worth $68.53 billion.
Bloomberg News explains that Hertz will pay “full price” for the Teslas, worth $4.2 billion in revenue to the automaker. Citing a Hertz spokeswoman, the report says the Model 3 rental rates will be “similar” to other luxury car rates, and charging will be covered by the rental company through January of next year. Tesla will deliver all 100,000 Model 3s within the next 14 months.
What is interesting about the Hertz-Tesla deal is another individual: Hertz acting CEO Mark Fields. Fields had been the CEO of Ford, but “retired” from the company in 2017. Fields is 60. One of the rumored reasons why he departed Dearborn was because he wasn’t doing enough to message to Wall Street the OEM’s mobility vision.
Seems that what he’s contributed to Tesla’s valuation underscores his mobility vision.
What worries me about the Hertz-Tesla arrangement is this detail, also from the Bloomberg News report: You will be able to re-load your smartphone with the Hertz app, for on-demand access to Supercharger credits and to the car’s Autopilot system.
Autopilot is Tesla’s “autonomous driving” system, which Musk has promoted as the car being able to drive itself. It is not self-driving, and by most accounts it’s less sophisticated than the GMC Super Cruise commercials you might have seen on television, lately with the Queen hand-claps.
In case you rent a Tesla from Hertz and choose to download the Autopilot system on your smartphone, I’m going to give you a piece of advice I would never otherwise give for a rental car: You might want to take the supplemental insurance from Hertz.
Although the folks at Lucid Group probably don’t think about Elon all that often. . .
By Gary S. Vasilash
Lucid Group, which is producing its Lucid Air electric vehicles in its brand-new plant in Casa Grande, AZ, put Tesla in second place in the range department as it got a 520-mile range rating from the EPA, and the Model S Long Range is 412 miles.
(To be sure, 412 miles is nothing to sniff at, as it is the sort of thing that most OEMs would give up an engine plant to achieve.)
And now there is another numeric–and arguably functional–difference.
Elon Musk is famously sensor thrifty, as Tesla models dependi on cameras and ultrasonic sensors (it had been using radar, but evidently that went away earlier this year). Which make the nomenclature “Full Self-Driving” and “Autopilot” all the more troubling for those who actually think about the implications of those names.
Lucid announced the details of its “DreamDrive” advanced driver assistance systems, the base and Pro versions (Pro is standard on Lucid Air Dream Edition and Lucid Air Grand Touring, so the “dream” in the name goes to the model, not some sort of suggestion that one can sleep behind the wheel).
Lucid DreamDrive sensor suite provides a comprehensive scope. (Image: Lucid)
The system can utilize as many as 32 sensors, including 14 visible-light cameras, five radar units, four surround view cameras, ultrasonic sensors throughout the vehicle exterior, and, for DreamDrive Pro, solid-state lidar.
Of course, sensors are only part of an ADAS system. Processing capability is essential.
Lucid is using its proprietary “Ethernet Ring” system, which is a high-speed data network for four computer gateways to communicate at gigabit speeds so that the processors can assure that the sensor input gets translated into the steering, braking and accelerating functions as required.
When it comes to driver assistance, the more support—and sensors—the better.
An inside look at IAA Mobility. Yes, the German auto show
By Gary S. Vasilash
The event formerly—for almost 70 years—known as “the Frankfurt Motor Show” is no more, as this year the event is officially titled “IAA Mobility,” and it moved about four hours southeast by car to Munich.
According to the organizers, the thesis of the event is “Mobility is the foundation for freedom, prosperity, and encounters. We face new challenges daily, such as urbanization, climate change, and digitization. But instead of borders, we recognize the call for action. It is up to us to go new ways, ask questions, and find answers.”
Which doesn’t sound like, well, an auto show as they have long existed.
Concept Mercedes-Maybach EQS: Do the 1% like garish grilles on EVs? (Image: Mercedes)
So to get some insights on the event, on this edition of “Autoline After Hours” “Autoline’s” John McElroy and Chris Paukert of Roadshow by CNET, both of whom were at the media days of IAA Mobility, talk with me about what they saw, the vehicles that they found to be of interest. (I wasn’t there.)
One interesting observation that they make is that while there were certainly plenty of introductions by the German car companies—like the Concept Mercedes-Maybach EQS, an electric vehicle that is for, well, the Maybach set; the BMW i Vision Circular, which McElroy points out has a clever approach to the traditional kidney grille, as it basically fills the front end in tasteful matter, not something garishly slapped on the nose; and the Volkswagen ID.Life, a small city car that Paukert notes is unlikely to be able to ever come to the U.S. due to the homologation requirements—the footprint of the show was far different than that of the Frankfurt venue.
In addition to which, we talk about the speed with which Tesla makes changes to its systems (e.g., electrical architecture) and whether traditional OEMs have the capability to catching up, whether those traditional OEMs should combine their mainstream powertrain operations into an independent standalone company and take the savings from the elimination of the cost of their individual ops to spend on things like electrification, and more.
Technologies that are beneficial when you’re behind the wheel or simply a rider
By Gary S. Vasilash
One of the factors of an electric vehicle that is often overlooked—unless you happen to be a first responder—is that when there is an accident and the vehicle needs to be quickly accessed, said vehicle can be “hot”—not (necessarily) a battery fire—but as regards the electrical current that is running through the vehicle.
Device is pyrotechnically actuated to severe the high-voltage line in an EV should there be an accident. (Image: Joyson Safety Systems)
So to address this potential hazard, Joyson Safety Systems developed a pyrotechnic device that is triggered by a vehicle’s ECU in the event of an accident and cuts the electric high voltage connection within a matter of milliseconds.
This is just one of the clever products that has been developed by Joyson. Some of these devices are in use on vehicles right now (e.g., Tesla put that high voltage electric line cutter into vehicles in 2017; the system that monitors whether a driver is paying attention when GM’s Super Cruise is activated is a Joyson development, as well).
So to discuss these and other developments, on this edition of “Autoline After Hours” we are joined by Jason Lisseman, vice president, Global Product Line, Integrated Safety Systems, Joyson Safety Systems. Lisseman talks with “Autoline’s” John McElroy, Bengt Halvorson of Green Car Reports, and me.
One of the more interesting—and unusual, though absolutely useful—developments Lisseman describes is a sensor that detects and classifies the air quality within a vehicle. As he explains, as there are shared, autonomous vehicles, it may be that whomever was in the vehicle before you was rather, um, fragrant, and so having a sensor that will be able to make a determination that the interior is odiferous and need some attention before other passengers climb in can make a big difference.
In addition, McElroy, Halvorson and I discuss a variety of other issues, including the GM battery problem with the Bolts, public charging issues and much more.
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.
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.
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.
A lively discussion of things from why Americans don’t buy small, cheap cars and why OEMs aren’t likely to get a big revenue stream from sending data to vehicle head-units
By Gary S. Vasilash
Although there is a whole lot of development going on in the electric vehicle (EV) space, as OEMs announce products and plans with what seems to border on giddiness, maybe things aren’t what they seem.
Consider, for one example, the F-150 Lightning reveal. While it might seem as though every person on your street is likely to replace their gasoline-powered F-150 with an electric one as soon as is practical (even though there is a starting MSRP of $40,000, and even though $40,000 is pretty much the average cost of a vehicle, it is still $40,000), even though people are touting the frunk that will allow them to fill it up with ice and beverages and the power outlets that will permit the audio equipment to be plugged in for parties and picnics, when you listen to Eric Noble, founder and president of The Car Lab, what seems to be the case may not be the case.
The F-150 Lightning in what is a natural environment: a work site. (Image: Ford)
That is, Noble points out that largely because of EV batteries—“They are expensive, huge, very heavy and don’t store very much energy”—especially the cost part, OEMs don’t make money on EVs unless these EVs are priced so highly that the cost of the battery can be buried in the MSRP.
Noble argues that because of the zero-emissions mandate of California and the other states that follow California’s lead in emissions regulations, OEMs that want to sell vehicles in those states—including vehicles with a 5.0-liter V8 under the hood—need to sell zero-emissions vehicles: EVs.
What is the number on the sales forecasts that OEMs have for EVs, he rhetorically asks.
Pretty much what the number of EVs required by the ZEV states are for that particular OEM.
However, he points out that there could be some real business for OEMs when it comes to selling to fleets. (“Ford is good at fleets,” Noble says.)
In other words, Teslas and Mustang Mach Es notwithstanding (and I don’t know whether the champagne need be busted out for the Mach E quite yet because in April Ford sold 1,951 Mach Es and 8,000 regular Mustangs), things like the Lightning are likely to be more oriented toward places where they can do the OEM the most good, which very well may be in fleet applications.
Noble talks about this on this edition of “Autoline After Hours.” And many of his arguments are bolstered by observations by Sam Fiorani, vice president of Global Vehicle Forecasting, AutoForecast Solutions.
Also on the table are other subjects of the moment, like over-the-air updates (not likely to be a revenue stream for OEMs because customers don’t want to have a monthly charge to their credit cards, why tech companies won’t become auto companies and vice versa, and a whole lot more.
Per usual, “Autoline’s” John McElroy and I are engaged in the conversation with these guests, and it is one of the livelier discussions you are like to see about the state of the industry—the reality versus the proclamations.
Tesla signifies more than an electric vehicle. . .
“Many consumers perceive Tesla as a leading-edge, high tech, environmentally progressive brand driven by a charismatic leader who not only builds cars and crossovers, but also sends rockets into space and is a global industrial visionary. That combination is hard to beat and has gotten the attention of the entire global auto industry.” –Tom Libby, associate director, automotive industry analysis, IHS Markit
Here’s something to consider: there are about 880 Mercedes dealerships in the U.S.—and just some 130 Tesla outlets (Image: IHS Markit)
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