AD #1383 – Investors Bearish on Tesla, UAW Gains Traction in the South, Designers on Bland Colors

May 22nd, 2014 at 11:54am

Runtime: 8:26

- FCA Loses $ on Every 500 EV
- Tesla’s Stock Headed Down
- Production Set to Grow in N.A.
- Daimler Truck Workers Ratify UAW Pact
- Toyota Improves Hybrid Computer Chips
- Lincoln Navigator Price Goes Up
- Tailgating Made Comfortable
- Memorial Day Programming Note
- How Designers Feel About Bland Colors

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Hello and welcome to Autoline Daily.

And we start off today with another blow to the viability of electric cars. A little over a year ago Sergio Marchionne, the CEO of FCA, said the company would lose $10,000 on every Fiat 500e it sold. But at a conference yesterday Marchionne upped the ante. Now he says they’re losing $14,000 on every electric car they sell. So far this year Fiat sold 1,353 electric 500’s, representing a loss of nearly $19 million. And we here at Autoline are willing to bet that all automakers are losing money on their electric cars.

A lot of people have gone broke betting against Elon Musk and Tesla. But now financial investors are starting to hedge their bets. A year ago institutional investors made up 88% of everyone buying stock in Tesla. Today that number is down to 62%. Part of that is probably profit taking, but it’s clear that institutional investors are starting to back away. Merrill Lynch thinks the stock is going to drop to $75. Some months ago it hit a high of $265 a share, today it’s trading at just under $200. Before you go out and short Tesla stock, remember, up to now the bears have been slaughtered. Even so, I think it’s very telling that institutional investors are reducing their holdings in the company.

Ward’s is forecasting that automotive production will grow in the second half of the year in North America. Even so, several automakers including Ford, Honda, Hyundai and Volkswagen are cutting production right now to trim inventories, or in the case of VW, due to a big drop in sales. Ward’s is forecasting that North American production will hit 16.7 million vehicles this year, up nearly 4% over last year.

The UAW cannot seem to organize car transplants in the south, but when it comes to big trucks it’s a different story. UAW workers at Daimler’s truck plants in North Carolina just ratified a four-year contract. It includes a $7,000 ratification bonus, 3% wage increases in the first and third years,and a 3% lump-sum bonus in the second and fourth years. Other gains include more money for the night shift and an attendance bonus program. We think this could be a precursor for the union’s negotiations with the Detroit automakers next year.

Toyota is making semiconductor chips from carbide to improve its hybrid’s. The chips have one-tenth the power loss and reduce the size of current power control units by 80%. Toyota has already achieved a 5% gain in fuel efficiency with the chips, but with more testing it hopes to get that as high as 10%. Toyota plans to have them in production by 2020.

We got our first peek at the new 2015 Lincoln Navigator back in January and now we know what it costs. The refreshed model gets a starting price of about $62,500 and goes up to about $75,000, including destination charges. That’s a choking $5,300 increase over the current model. And it’s surprising, considering that other than a new grille and powertrain not much is new on this SUV. Lincoln doesn’t sell many Navigators, only about 2,200 so far this year and we figure that Ford figures that customers are going to buy these things anyway, so why not raise the price. By the way, the new pricing puts it awfully close to the new GMC Yukon Denali.

The NFL football season is still months away but here’s the perfect gift for any fan that loves to tailgate. As you can see from the picture, you can set up a couple of hammock style chairs using a trailer hitch. The chairs hang from a frame which can be attached to any 2 inch trailer hitch and can hold up to 250 pounds each. Called the Tailgaters’ Hammocks, you can order them from Hammacher Schlemmer for $350.

A programming note here. With the Memorial Day holiday here in the United States creating a long weekend, Autoline Daily will be off tomorrow and Monday. We’ll be back Tuesday, May 27th.

Coming up next, do car designers hate that customers overwhelmingly choose the blandest colors for their cars?

On Autoline This Week, the topic is all about car colors. I invited designers from Ford, Nissan and GM to join me for that show and in the following clip, I asked if it bothers them that most consumers choose very basic colors for their cars.

(Clip from Autoline This Week can only be viewed in the video version of today’s show.)

Joining me for that show is Sharon Gauci from GM, Susan Lampinen from Ford and Francois Farion from Nissan. And as an early treat, you can watch that entire show, right now on our website, That’s because we won’t be here Friday or the following Monday for the Memorial Day break.

But we do have one more show before the shutdown. Make sure you join me and Gary Vasilash tonight for Autoline After Hours. We will be joined by Cory Welles, the director of the documentary “32 Hours, 7 Minutes.” So tune in tonight at 6PM eastern time, for some of the best insider discussion in the industry.

But that’s it for today’s show. Thanks for watching and we’ll see you again next Tuesday.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog

39 Comments to “AD #1383 – Investors Bearish on Tesla, UAW Gains Traction in the South, Designers on Bland Colors”

  1. G.A.Branigan Says:

    Oem’s shouldn’t blame the customers for choosing “bland colors”.That is what the dealer has on the lots,and the dealers discourage customers from ORDERING exactly what they want,including color choices.

  2. MJB Says:

    Say what you will, Susan, but a vast majority of buyers still seem to gravitate to the most boring, drab, uninspiring, blah colors available on the lot. There are only a handful of cars that look really good in silver, for instance. The rest just look like sorry-@$$ pieces of sheet metal wearing that color.

  3. MJB Says:

    1. Even if what you say is true about dealers discouraging customers from ordering other colors, that still reflects poorly on the customer, because it’s still their choice. Nobodies twisting their arms and forcing them at gunpoint to walk out of there with a beige ride.

  4. Buzzerd Says:

    I agree with G.A., often the dealers only stock the “boring colours” and it can be hard for consumers to imagine their car in a more prominent colour, they need to see it in person. Also most of the cars I’ve been looking at don’t even offer anything you would call exciting and lastly darker colours will show dirt easier especially when they don’t have much metallic flake.

  5. Buzzerd Says:

    I’m thinking the tailgate chair thingy my be a little under built for the average north american tailgater if it can only hold 250lbs. I suppose it will be OK for the children…. well, most of them.

  6. G.A.Branigan Says:

    @MJB: They aren’t being forced at gunpoint.But when almost every dealer for a brand a customer likes,and they need a new ride,they end up buying whats on the lot.That is the way it really is.For us older buyers,the color choices,at least for my wife and I don’t include the “kids colors” that are really bright shall I say.It’s the same with interior colors,your choice of black,shades of gray,or maybe tan/brown.

  7. Mike Says:

    From time to time (early 70′s for example) when the fad was for bright colors, lots of bright colors got manufactured. Plum Crazy etc. These finishes didn’t seem to last very well. Even some “bland” colors such as black and silver seem to oxidize or fade. Pastels, deep blue and red seem to do the best on the used car lot.

  8. Buzzerd Says:

    then there’s the problem with the matching interior colours. Often if you want the brighter exterior colour you must take a lighter interior colour and for many that’s not pratical.

  9. pedro fernandez Says:

    Today’s interiors remind me of the Ford Model T’s, any color you want as long as it’s black.

  10. G.A.Branigan Says:

    @ Pedro: Yup,and for the exterior,any color you want as long as it’s silver/different shades of gray/white/red or black.

    My absolute favorite color was,and still is from Cadillac back in the early 70′s….Royal Commodore Blue.Back in the day I painted many of my cars,and a few trucks that color.It was easy for me since I had a paint and body shop back then.

  11. Lex Says:

    I agree with Susan Lampinen from Ford that Grey, White and Black are the most popular colors. I will personally only but vehicles in the following exterior colores: Silver, White, Charcoal Grey, Black and maybe Red. I will not purchase a vehicle with a black or near black interior due to the heat build up in summer months. Medium Grey in either leather or cloth is just fine with me.

    I remember that Nissan was working on a road dirt repellant paint for their vehicles. When will this be available?

  12. pedro fernandez Says:

    Ga down here in the hot Fl sun, white is best, last longer and keeps interior cooler, metallic is the worst, the sun kills it and barely none survive after 4 yrs and in some cases, certain areas of the car even wear out within 2 yrs.

  13. Ron Paris Says:

    Susan Lampinen’s response to the paint color question strikes me as making the best of a bad situation. There’s just so much you can do with a “color” palette comprised of various shades of grey, black, white and silver. I frequent a fairly active Mazda CX-5 forum on the internet and it amazes me how many words owners use to extol the virtues of their bland color choice. I am SO GLAD I snatched up one of the original Sky Blue metallic cars before Mazda dropped the color!

  14. MJB Says:

    6. G.A., I suppose that’s going to be true for a percentage of the market. But given that every automaker Now has online galleries of their cars in different colors, that should help a user picture it in those colors.

    This could be viewed as a chicken and egg discussion. Do people drive bland cars because that’s all the dealers stock, or do dealers only stock bland colors because that’s what most people end up choosing?

    I still say the onus falls back to the consumer. I could easily make a similar accusation of my bland dressing co-workers. It’s not my fault I’m the best dressed in the office most days. They have equal access to stylish clothing as I do. Is it J.C. Penny’s fault for not selling anything but plaid shirts (no offense plaid lovers)? No. It’s the consumers fault for not having more style.

  15. BobD Says:

    The biggest discouragement for me in ordering the exact car/color I want is the “unknown” of what you will pay when you actually take delivery. The manufacturers will not guarantee the MRSP price, nor honor any rebates or special offers available at the time of ordering, so it is a crap shoot of what the final cost will be 6-8 weeks later when it comes in. What other companies do this to their customers? It is stupid!

  16. Kit Gerhart Says:

    For the most part, all you can get is bland colors, even if you order a car. For example, with both a Fusion and a 3 series, you can get red, silvery blue, or a half a dozen non-colors. It’s better with some cars, like Dart and MINI, but even worse with an E-Class which offers 6 different shades of grey, two shades of black, and not too much else.

    Also, as I’ve frequently harped on here, there is essentially no choice of interior colors on most cars, except grey or beige.

  17. Buzzerd Says:

    14 -that might be true if your co-workers suit cost $30,000. If someone is sitting on the fence and can’t actually see the car in the colour, they probably aren’t going to buy it. Also keep in mind that most people aren’t as informed as us as they aren’t car enthusiasts so for many they will just buy what they already have or can see. I know my father has wanted some of his cars in different colours but hasn’t wanted to wait to get it or pay a small fee to get it sent from another dealer, he would rather complain about the colour he had to pick for the next 5 yrs.

  18. G.A.Branigan Says:

    All one has to do is go to any oem’s website,pick out a model that your interested in,then build it.It is a pathetic choice of colors for both the exterior and interior.That is not OUR choice,it is the only things available now.

  19. Drew Says:

    And have you observed that the few great colors now have an extra charge? Do you want a nice red metallic or medium/bright blue metallic, or Ferarri-like yellow for your sporty car? Be prepared to pay $500-900 more. I understand the extra charge for a pearl white (3-coats of paint), but gimme a break. THe worst offenders are theEuropean brands where every metallic color is extra charge. It is no wonder most of them are black or white (no extra charge).

  20. MJB Says:

    16. Yes, your points are true. But that just helps my conclusion that most buyers are either:

    A. Impatient
    B. Disinterested
    Or C., the other reason they pick boring colors…because they are boring people.

    15. That really is sad. Certain German car makers do that because they feel all their customers are to high-minded to desire anything other than sophisticated shades ‘grey’.

  21. Kit Gerhart Says:

    17, Exactly. That is how I confirmed what I thought was the case before posting #15.

    MINI does better than most, offering dark green, medium blue, orange, and chocolate brown, in addition to red, black, white, and two shades of grey. If you want a choice of 6 shades of grey, though, you have to go with a Benz. Well, I’m sure some other “premium” brands will give you that choice too.

  22. pedro fernandez Says:

    My son was charged over $200 by Scion for a color named whitewash, which I later found out is metallic, yet not really shiny at all and also found out that the touch up paint has a base and a topcoat you must use for even the most minute touch ups.

  23. G.A.Branigan Says:

    @ Pedro: Most,if not all of the oems use a base coat/top coat clear.

    I just watched the autoline this week show.And what I got out of it is again,the most “popular” colors both interior and exterior are exactly what we don’t want.They say it’s a ‘trend’.I say,it’s what the dealers put on the lot,and it’s what the oems offer when one goes to ‘build your own’ on their websites.So,is the chicken or the egg as MJB put it?

  24. G.A.Branigan Says:

    The best looking car that I owned was a 68 Torino GT/fastback.White exterior and a beautiful dark burgundy interior.It was,at least for me,stunning and I got a lot of compliments on it.

  25. G.A.Branigan Says:

    BTW…the color I really like on the new Colorado,dark forest green metallic is a $495.00 option.I have to wonder what the take rate on that will be.

  26. Kit Gerhart Says:

    24, I wonder if that is the same as Polo Green II Metallic, the color on my ’96 Corvette. I bet it is similar, and I like it, but it was not very popular on Corvettes.

  27. G.A.Branigan Says:

    @ Kit: I don’t know if it’s the same or not.More then likely,very close if not the same.The same green metallic is now offered on the fullsize GM pickups,and it is still an expensive color.TB says it looks great in person and I would have to go along with that.It’s a nice,but expensive option….that I want,lol.

    And as a sideline,I wish both HtG and TB would come back here.I miss their input etc.

  28. pedro fernandez Says:

    GA I hope so too, but I think they had enough of the insults and put downs by the one named Sybill.

  29. G.A.Branigan Says:

    I agree Pedro,but they,(sybil) is gone…..again.I don’t know if he quit or was banned,but for now he is gone so I wish TB and HtG would come back.

  30. Kit Gerhart Says:

    27, 28, 29 Me too, on missing HtG and TB.

  31. Bob Wilson Says:

    It is telling to compare and contrast the Fiat 500e versus Nissan Leaf:

    [tr][td2]$31,800[td2]$29-35,000[td]MSRP (EPA site)

    It is not uncommon for a first model to be horribly expensive and bug-ridden. Between recalls/rework and paying tuition in the school of hard knocks, it comes with the territory. But there is no better teacher.

    Similar claims were made about the 2001-03 model Prius. It was too expensive and Toyota was losing money. But now there are millions and growing. The true test of character is whether Marchionne will pay this entrance fee or abandon the California market.

    Bob Wilson
    ps. Table formatting is experimental but hopefully clear even if it does not render.

  32. A.C. Says:

    John why are you so negative about electric cars and Tesla in general? Its like you want them to fail. Have you been to a gas station lately? Maybe as a media member your gas is paid for or a company expensed. But for us in the real world its painful to spend $95 a week on gas. Or is it that as a “Detroit insider” you have to act as if your anti-electric or Big Oil will cut you off. We all know deep down that we have to get off fossil fuel at some point. In 5 years when EV prices come down and EV range is up, I wonder if you’ll still be so negative.

  33. bobek Says:

    My wife just leased a 2014 Chevy Cruze LT grey interior and a beautiful rainforest green metallic exterior with gold pin striping she gets a lot of compliments on this color…beautiful
    My car is a 2013 Malibu LT Champagne Beige also nice color…

  34. Kit Gerhart Says:

    32, Your wife’s Cruze may be about the color of my ’96 Corvette.

  35. Kit Gerhart Says:

    All builders of electric cars are waiting for battery costs to come down, which will happen at some point. Toyota can now sell Prius at a profit at an MSRP of $24K because they have relatively small batteries. A pure electric, like a Leaf or 500E has a much larger battery, changing the equation completely. Teslas have much larger batteries, but are pricy enough to cover the battery cost.

  36. Kit Gerhart Says:

    Wow, I guess I really killed this thread. Nothing new for almost 3 days.

  37. G.A.Branigan Says:

    No Kit,you ain’t a thread killer.How was your Memorial weekend?

  38. Kit Gerhart Says:

    36, It was pretty good. The weather was great here in central IN. How was your weekend?

  39. G.A.Branigan Says:

    We had good weather,and I had the youngest grandson over for a while.Overall,a great weekend ;}>