AD #1858 – OEMs Have Big Advantage Over Tech Companies, Tesla Update Adds Range, Buyers Shifting to Bolder Colors
May 6th, 2016 at 11:53am
Runtime: 8:26
- More GM & Lyft Details
- GM Mid-Size Diesel Take Rate Growing
- Honda Knocks New Ridgeline Out of the Park
- New Model S Update Unlocks More Range
- Buyers Shifting to Bolder Car Colors
- CAFE Regs Save Consumers More Than it Costs OEMs
- GM’s Technology Balancing Act
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On today’s show… we’ll explain why General Motors has a huge advantage over Google and Apple, how Tesla unlocks more battery range with another over-the-air update and what colors could show up on future cars. All that and more coming right up on Autoline Daily.
This is Autoline Daily for May 6th, 2016.
OEMs HAVE HUGE ADVANTAGE OVER TECH COMPANIES
Back in January, GM teamed up with ride-sharing service Lyft. At the time, the two companies revealed plans to develop an autonomous fleet of on-demand vehicles. And now we’ve got some more details. The Detroit News reports that within the next couple of years, GM and Lyft will test a network of self-driving electric Bolts in California. The EVs will be equipped with autonomous technology from Cruise Automation, a tech company GM recently acquired. And this shows the enormous advantage traditional OEMs have over the tech companies. Automakers only have to add autonomous technology to the vehicles they make to be in the game. Tech companies have to come up with their own cars, or form partnerships with existing car companies. And that means the tech companies may not be quite the disruptors they fancy themselves to be.
GM DIESEL PICKUP TAKE RATE GROWING
Speaking of GM, In the U.S. market it took a bold step by offering a 2.8 liter 4-cylinder turbo diesel engine in the Chevrolet Colorado and GMC Canyon pickup trucks. So with the VW diesel scandal and cheap gasoline prices, how are those diesels selling? Well, the take-rate isn’t that all that great, between 7 and 9%. But it’s growing. Month over month sales of diesel Colorado’s were up 26% in April, while diesel Canyons were up 11%. GM spent a lot of money bringing that diesel to the market, but it’s a $4,000 option. At that price, they’ve got to be making good money on that engine. By the way in my test driving I got around 25-miles to the gallon combined, and that is pretty good for a pickup truck.
2ND TIME’S THE CHARM
Speaking of mid-size pickup trucks, next week we’ll be reporting on the all-new Honda Ridgeline. It’s a unit-body truck that is based on the same platform as the Honda Pilot and Acura MDX. And while all the information is under embargo until Monday we can tell you right now that is it a hell of a good truck that is going to appeal to a lot of people who otherwise would never consider a pickup.
And we’ll be back with more right after this.
TESLA UPDATE ADDS MORE RANGE
We’re all familiar with untapping unused power from our gasoline and diesel engines via performance chips or computer reflashing, and Tesla is doing something similar with the Model S. It turns out the EV maker has been equipping the freshly updated Model S with 75 kWh battery packs but selling them as 70 kWh models. Now through a $3,000 over-the-air update, customers with the larger packs will be able to tap into that extra 5 kWh’s. That’s good for a 20 to 25-mile increase and a total range of about 260-miles. And it shows how good Tesla is at upselling its customers to to plunk down several grand more for extra bells and whistles.
BASF HAS US SEEING RED
Car buyers around the world continue to buy vehicles with conservative colors, like white and silver. But paint supplier BASF says it’s seeing a slight shift in North America towards bolder colors, specifically paints with hues that change depending on the point of view. Its top 3 predictions for new colors in the region include black with a silvery look. Actually, black is the most-researched color for online shoppers. Another color is called Primordial Red, which is a deep, blood red color and lastly is a silver paint with green and blue elements. But it’s not just North America that’s getting more adventurous with their color choices. BASF sees blue’s becoming popular in Europe and a beige color with blue-green accents in Asian countries.
CAFE REGS SAVE CONSUMERS, COST OEMs
A new report from Consumers Union, which owns Consumer Reports, shows that the 2025 CAFE regulations will save car drivers thousands of dollars. On average, car owners will save $3,000 and truck owners $4,200, assuming gas prices are around $3 a gallon. According to EPA and NHTSA estimates, on average OEMs will have to spend about $1,700 per car and $1,600 per truck to meet the standards. But others, such as the Center For Automotive Research in Ann Arbor says the costs could be considerably higher than that.
Coming up next, if you’re a traditional automaker, should you be buying all that autonomous technology from Silicon Valley or should you develop that on your own? That’s coming up next.
GM’S TECHNOLOGY BALANCING ACT
Suppliers provide the overwhelming majority of components that go into a car. But with autonomy right around the corner, do automakers want to outsource that technology? On Autoline This Week our special guest is Steve Kiefer, the Global VP of Purchasing and Supply Chain at GM. And In the following clip, he explains how the company balances what should remain in-house and what it wants suppliers or other partners to contribute to its autonomous vehicles.
(Clip from ATW #2015 can only be viewed in the video version of today’s show.)
You can watch that entire discussion with Steve Kiefer right now on our website, autoline.tv or you can check it out on our YouTube channel.
But that wraps up today’s show, thanks for watching and have a great weekend.
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Comments (20)
May 6th, 2016 at 12:26 pm
WOW! If I were one of the Tesla customers who bought a Model S with one of those “stealth” 75kWh battery packs and then was told I had to pony up an additional 3 grand to take advantage of it, I would ben one pissed off Tesla owner! What a sleazy approach to offering added value from an upgrade whose cost was no doubt baked into the car’s purchase price from the get-go. Elon Musk’s business practices never cease to amaze as do Tesla customers’ misguided loyalty!
May 6th, 2016 at 12:27 pm
I just can not share your excitement over the new Ridgeline. I’ve owned and needed pick-ups my whole driving/working life. (long time) The thing I do like is the size and gas mileage advantage offered. Thing I didn’t like about gen 1 Ridgeline and that hasn’t changed in Gen2, the fact that you can not get a full size washer and dryer in the bed and put the tail gate up. Want to hall 12′ sticks of lumber; better borrow your buddy’s truck. Also, not a fan of the storage being below the bed. One would have to unload whatever your hauling to get to the spare or anything else your storing, like jumper cables or tow straps. FCA at least offers bed side storage. Chevy had a nifty midgate design, all of these concepts would truly make the Ridgeline a better product. My insight – it won’t fair any better than Gen1
May 6th, 2016 at 12:27 pm
There must be additional information on this $3k over air upgrade. How do you think Tesla owners would feel having to pay that much for using hardware they already paid for? What’s missing, is this also including a special warranty or any special service in any way?
May 6th, 2016 at 1:11 pm
Ron @1:
You cannot go anywhere around here without seeing a Model S. I sincerely doubt many of those owners would mind at all extending their range – or the price to do so.
Everything is relative.
A friend took his daughter, her husband, and the (2) grand kids to Disney World for 2 days – a couple of weeks ago. 2 days cost him well over $4 grand. $17.95 for a (1) cheeseburger. $115 for a Star Wars toy for the grand son – that probably cost $4 (and prolly was made in China).
Not excusing the up-sell, or condoning it, but see what I mean? As for those that can spring for a Model S, they prolly did something similar – that’s why they can afford a Model S.
May 6th, 2016 at 1:16 pm
#2 I dislike the Ridgeline for those same reasons but it sounds like you use your truck as an actual truck as do I. Many people bought 4WD SUVs that probably only ever engaged the 4WD to pull into the grass field to watch little jimmy play soccer. The Ridgeline will likely appeal to those folks that like the higher seated position room for 5 and don’t really plan to haul anything but like the idea that they have that option.
May 6th, 2016 at 1:16 pm
1: I disagree. This is becoming standard practice for ICE vehicles and equipment. Higher performance variants have the same hardware with different calibrations. Some prominent US Engine and Transmission manufacturers offer the same engine or transmission at different prices depending on the rating. Basically you are offsetting the warranty costs that you will incur through rating the device at a higher level.
May 6th, 2016 at 1:20 pm
@ #2,David: I couldn’t agree more.This is for the high school kid who wants a truck,cause trucks are cool,the built in speakers in the bed etc.All of that screams kids toy.Imho.I think that’s going to be the demographics that drive them.
May 6th, 2016 at 1:38 pm
#1 – As DK said, it is common practice in the HD truck market to offer the same basic engine and transmission at different hp and torque ratings, and different vocations, for incremental higher prices. In addition to covering warranty costs, the philosophy is that you are getting more, so you should pay more. Another example is PC computer CPUs. The main chip design is exactly the same across a family, but you pay more for the higher clock speed versions.
May 6th, 2016 at 1:39 pm
In your brief autonomous Mercedes video, the steering wheel motion around a bend is very jerky. What does that feel like in the car? If I drove like that, nobody would ride with me!;)
May 6th, 2016 at 1:41 pm
How is Sean doing at the Dentist?
May 6th, 2016 at 1:47 pm
On GM’s mid-size diesels, I suspect you will continue to see the take rate grow, but perhaps at the expense of the full-size diesel. If you are determined to own a diesel, but only occasionally tow a lighter weight RV or trailer, you can buy a Colorado diesel Z71 4WD crewcab for about $42k. That’s probably $10-15k less than that a comparable HD full-size version. I know a couple of people who are planning to switch from the full-size diesel to the mid-size the next time they trade.
May 6th, 2016 at 2:44 pm
@Lex – Got my face fixed yesterday. Thanks for asking.
May 6th, 2016 at 4:21 pm
i think Ahrnold would call the Ridgeline a “girly” truck, just sayin’
May 6th, 2016 at 6:22 pm
#2, and others.
The Ridgeline is for the 90% of pickup buyers who “want” a truck, and don’t know why. These people will not want to carry a washer and drier. They will have them delivered when they need a new one every 25 years or so.
The new Ridgeline looks better than the old one, and if it drives well, and gets decent gas mileage, it should sell.
May 6th, 2016 at 6:23 pm
13 Yep, I agree
May 6th, 2016 at 8:54 pm
Colors. Well for people to buy bolder colors OEMs have to offer them. When we bought my wife’s Crosstrek there was only one “bold” color available this year , a shade of blue the reminds me of the Grabber blue Ford used in the early 70s. All the makes had them with different names.AMC called them Big Bad colors, Chevy had their Hugger colors. Mopar had some wild colors. An way we didn’t care for that shade so we got Silver which goes well with all the black cladding.
May 6th, 2016 at 10:38 pm
Regarding colours, I agree with #16. Our famiily is into Subarus and their colour range is pretty dismal. Fortunatley both my son and I have WRX’s in their rally blue which is exclusive to REX’s and STi’s and is a great colour. My sister a few years ago tried to get a Corolla in the the deep blue pearl and had to wait about a month for one to come from the factory. The dealer finally admitted to her that they only kept the usual dull range of silvers and browns as they are easier to keep clean on the lot. So, another reason could be what dealers keep in inventory and pursuade the customer to buy for a quick sale. As an aside, the orange for the Crosstrek would be more appealing if it was a shiny pearl, otherwise, it looks as interesting as a school bus colour.
May 7th, 2016 at 7:57 am
Another successful barge landing for Elon’s rocket booster.
My Prius is the “boldest” available color, Toyota Corporate Metallic Red.
May 7th, 2016 at 8:12 am
A friend’s BRZ is a kind of pearl blue, which is nice. I don’t know if they use the color on other models.
May 7th, 2016 at 8:23 am
For those that have some questions in their mind about the upcoming Ford F-150 EB 3.5L w/ 10spd tranny, here is pretty good review of it (realizing that it is still a little early for all the specs):
https://www.youtube.com/watch?v=tkScQN7fxGg