AD #2465 – GM Calls for National ZEV Program, Tesla to Intro Neural Networks, Would You Lease A Used Car?

October 26th, 2018 at 11:31am

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Runtime: 7:33

0:32 GM Calls for National ZEV Program
1:15 Ford & VW Deep in Collaboration Talks
1:57 U.S. Market Defies the Experts
2:56 Hyundai’s Amazingly Affordable Santro
3:32 Tesla to Intro Neural Networks
4:29 Tesla’s Enhanced Autopilot
5:25 Would You Lease A Used Car?

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49 Comments to “AD #2465 – GM Calls for National ZEV Program, Tesla to Intro Neural Networks, Would You Lease A Used Car?”

  1. ChuckGrenci Says:

    While I guess the support of some sort of goals for ZEV is laudable, to me, the announcement by General Motors (and I suppose subsequently as written by CARB) there leaves much which is conjecture, wishes, hopes and other nebulous ideals. Will there be punishments for non-compliance (even if those that need to buy credits spend money there instead of other development), will there be enough credits out there so all can comply, and then there is the obstacle to get all on-board (the proposal). Just looking at the target of the cost of batteries can’t be assumed (last couple of reports here show that cheaper batteries are not a sure thing). A manifesto without teeth is just a piece of paper.

  2. Kit Gerhart Says:

    If I wanted a car like a Mercedes S-Class for 3 years, to “see what I’ve been missing,” I’d certainly consider leasing one, if the price were right.

  3. Lambo2015 Says:

    Ford and VW could be a good partnership for them both. However they both have very bland uninspiring designers.
    Guess the auto-market experts should be called speculators. If they were experts they would have known the sales would continue with a strong economy.
    That Hyundai would look so much better if they would just put stop with the 12″ tires.
    Leasing a used car makes sense as they continue to extend their life cycle and price. Its the one purchase you typically always loose money on. So for those folks that a low mileage lease works why not. Maybe even start offering 5 or 6 year leases.

  4. MJB Says:

    On re-leasing vehicles, as Mr. Glassman mentioned, the quality of vehicles across the board certainly is there. 30yrs ago this concept would never have flown – due to vehicle longevity alone.

    As weird as it sounds, it really isn’t much different from buying a ‘pre-owned’ home that you know you’re not going to stay in for more than 10 years before moving onto something else. Most people don’t seem to mind buying a home that has been lived in by multiple other families before them. On those grounds, leasing a pre-owned car really isn’t a stretch.

  5. Lex Says:

    I could see one or two year leases for CPO vehicles, but not any longer. This would be go for parents who want to put their college age kids into a reliable vehicles (with a bumper to bumper warranty) while they are away at college.

    If would also help recent college grads wanting to establish credit and build brand loyalty.

  6. Albemarle Says:

    I have always been leery of buying used cars because of the added risk of how they were driven before; so we normally buy and then trade in before the warranty expires.

    The idea of leasing one would make me seriously reconsider. It would allow me to move up market with no more risk. Worth thinking about.

  7. Jon M Says:

    I think leasing used cars is a good idea. If vehicles depreciate faster in the first three years and the rate slows from years three thru, say, six, then it benefits the leaser. This of course assumes money factors are equal or better than those for new leases. It offers the same benefit of more car for less money. It would probably best, however, to limit leases to vehicles no older than four years and terms no longer than three years (it’s best to lease any vehicle for no more than three years).

  8. Lambo2015 Says:

    #5 That should make all those companies that offer extended warranties happy as the lender could require the 2nd lease to still be under warranty.

  9. Buzzerd Says:

    We just returned our 3yr lease car, it had 30,000kms on it and in mint shape. Would have made a great re-lease I think.

  10. Larry D. Says:

    a. GM… trying to get rid of all them Bolts and Volts… amusing that Tesla did not ask for it first, since it would be the biggest beneficiary!

    b. US Market defies the experts? Really? As far as auto PRODUCTION in the US, the 1.3% you cited the other day is less than just the increase in just ONE maker’s production. Who would that be? would it be TESLA? (as the SNL churchlady would say)

    c. Hyundai Cheapo (sorry, Sanrtro). Really? Amazingly Affordable at .. $5,300 when the failed Tata Nano sold for only $2,000 or so? If it is made in India, where wages are $1 per… week (but have the purchasing power of $10), not amazing at all. I wish it success, because it will be much safer than the god-awful 50 cc scooters Indian families load with 10 family members, and it looks like a bunch of grapes waiting for disaster. The Nano failed because it was crappy and unsafe and fire-prone, BUT primarily because the stuck-up Indians did not want to be seen driving a cheapo car by their neighbors…

    d. Tesla’s 1000% improvement. Why do you NEVER see this kind of thing at Ford or GM or FCA?

    e. Leasing a used car is an EXCELLENT idea, especially with the millions of off-lease Certified Used cars that are in excellent shape and come with warranties. In the comments I saw additional reasons why this is a great idea. If any automakers have ONE ounce of brains, they will RUN to implement this.

  11. Chuck Grenci Says:

    If nothing else, maybe they could offer to extend the current leasser to an extention, if desired.

  12. Larry D. Says:

    1 if you don’t want to be stuck with it, there are already other options much less punishing than a lease. You can start by test driving an S class at your local dealer (have you ever done so?), and if you need more time with the car, either the dealers or some rental companies offer such luxury and even exotic cars. You can rent even a Ferrari or Lambo for a day.

    As far as the S class, my colleague Mike here, the guy with all the big SUVs, had bought a new S class in 1990, an entry-level 300 SEL (ok there also was the 300 SE), for $60k or so, new. (that’s $100k+++ in today;s worthless $), and babied it for decades, he still owns it but does not drive it any more. I drove it once, he had neglected it and it made awful noises from the suspension., springs, struts or whatever. The car was long and had huge rear room and trunk, but lightweight because it had very few options and tech features, and a very anemic engine (177 HP, 188 Lbft). A far cry from today’s tech laden, powerful Ss.

  13. Roger Blose Says:

    The re-lease story would make sense if they replaced the super expensive tires, new brakes, struts / shocks, and a fresh windshield. No OEM wants to do this work and the second lease owner is on the hook for these items at turn in.

  14. Larry D. Says:

    6 the average car loses 50% of its value after 3 or 5 years. Autoweek in the 90s used to have depreciation charts on the cars it featured, and the most extreme example was that of the V12 Jag XJ, which lost a staggering 72% of its value in the FIRST YEAR ALONE.

  15. Larry D. Says:

    12 Regular all season tires are NOT expensive even for $100k flagship cars. Why would you bother replacing the windshield if it is not chipped? Most insurance policies replace it for free, even if you don’t have collision, and many minor chips can be fixed thermally for $40 without having to replace a thing. Even 10 year old used cars sold by dealers have all their systems in good shape, the brakes need to have 70% or more life on them etc.

  16. ChuckGrenci Says:

    Before a re-lease I’m sure there would be a walk-around (and an agreement of condition) prior to sending leaser number 2 on his way; similar to how CPO, certified pre-owned, works.

  17. Scott-in-Cleveland Says:

    Leasing a used car is not a new idea. Back in the early 2000′s my brother leased a couple Ford Tauruses. They were ex-rental cars. Was a sweet deal for him back then.

  18. merv Says:

    I like the idea of a national zev program and Mr Musk just keeps amazing me.

  19. Kit Gerhart Says:

    11 The closest I’ve come to test driving an S-Class was, as I remember the designation, a 450SEL 5.6, probably early 80s. It was quick and roomy, the interior was very nice, but it seemed almost as wallowy as an old Buick.

    I’d feel kind of guilty test driving a new S at a dealer, knowing very well that I would not buy one, but I guess offering test drives is part of a dealer’s doing business. Yeah, renting one, or especially, renting an exotic would be fun. I know there are places renting exotics, and maybe serious luxury cars in south Florida, and maybe in Orlando, which is much closer.

  20. Drew Says:

    Larry, I believe Roger’s point is the 2nd owner/lessee will certainly have to spend money to replace tires. While many people acknowledge this as an expected expense in long term vehicle OWNERSHIP, lessees will find this to be a “bummer” as they will view it as subsidizing the wear from the 1st lessee and for the primary benefit of the 3rd owner/lessee.

    A set of new tires can cost $500-1200 (or more). If brakes need to be replaced, be prepared to submit a mortgage application as many vehicles with high tech/lightweight rotors can’t be turned… they must be replaced at a huge expense (rear brakes on my Vanden Plas cost over $1000). These maintenance costs are a burden that 1st lessees don’t incur… and will serve to challenge the value proposition of a 2nd gen lease.

  21. Lambo2015 Says:

    #9 d. Tesla’s 1000% improvement. Why do you NEVER see this kind of thing at Ford or GM or FCA?
    Mostly because Ford, GM and FCA are not new to the high volume production of vehicles. Common sense would tell you that a new company is going to have huge increases.
    However using your thinking the Chevy Camaro saw a 81,000% increase in volume in 2010 from the previous 8 years. So I guess they do.

  22. Larry D. Says:

    17 The 1990 300SEL was really a late 70s design, produced from 1980 to 1991. It had a 420 V8. The 450 SEL must be the prior generation, which was designed much earlier, probably in the late 60s, and produced from 1972-1980. Due to the small numbers sold (compared to E and C classes), they did not change the models often.

    I have also driven one of these 450s once, one with lots of miles and going for… $3,000. It drove OK but I did not buy it, i was concerned about repair costs then. It did not wallow like a Buick, but did not take turns like a BMW either.

  23. Kit Gerhart Says:

    14, 18 A quick check of Tire Rack finds that four Continental or Michelin all-season tires for an S-Class would be about $800-1000. Would you even need to buy them, though, unless your drive a lot? Mercedes, or any other “premium” brand would not re-lease cars with bald tires, would they?

    Maybe non-premium brands would be more likely to re-lease cars needing repair, but some sort of warranty should be part of the lease price.

  24. Larry D. Says:

    20 PS I never drove a Merc that felt like a Buick or even a Caddy or other domestic, primarily because of the power steering. In German cars it is never as extremely power-assisted as it is in older US cars, and even current ones, where it seems as the target driver is a 95 year old arthritic 4′ 10″ female, or a 2 year old toddler.

  25. Larry D. Says:

    21 I actually had to replace the tires on both the Mercs I bought in Oct 2016 and April 2017.

    The first one, I drove to Carmel IN north of Indy to buy it, they told me the tires had another 5-7k miles on them and reduced the price by $500 because of it, and I replaced them after only 3,000 miles or less, on Dec 29 2017, when there was snow/ice on the ground and the car had no traction whatsoever, so I used one of my free AAA tows and took it to the Discount Tire place 2 miles away, where I got a brand new set. The other I took overseas, I bought near Columbus OH, and they did not tell me anything about the tires. I drove it to Toronto and had it shipped Overseas (it got 35-37 mpg, fully laden with packages, many including heavy books and papers) and when I took delivery overseas, it had developed a flat tire in transit. I went to replace it and the store convinced me that all needed replacement, and found a sweet deal, slightly used Continentals whose driver wanted bigger wheels, I got them for E 300 (about $360) all included.

  26. Larry D. Says:

    21 Overseas when I had the flat this summer, I was told that because Mercedeses are heavy cars (compared the lightweight 5-door hatches popular there), they tend to ‘eat up rubber’ fast and was advised to get a brand new tire to replace it, but since I do very few miles with the car (at most 3 months a year there), I took care of it for only .. 20 Euros, buying a used one.

  27. Larry D. Says:

    22 PS Hyundai-Kias I rented, tiny lightweight cars, had also a ton of power assist, making them feel like unsafe feathers. (Elantra and a Rio). Those cars should have zero power assist to begin with, as did my old Civic hatch, which felt really good and substantial, despite weighing only 1,875 lbs!

  28. Larry D. Says:

    19 Totally off topic. I was not talking about their production increases, but about the part in today’s show. Here it is cut and pasted:

    “Tesla let out a lot more information about its enhanced Autopilot system that uses neural networks running on chips that the company will build itself. Elon Musk says they will increase processing capability 1000%. The system will provide a 10-fold increase in frames per second for analyzing camera inputs that will provide a 360-degree view around the car. Yet it has the same cost, power consumption and volume as the current system..”

  29. Kit Gerhart Says:

    20, 22 It was a long time ago that I drove that car, and my primary reference point may have been a Golf GTi, or something like that. Still, it was a lot softer sprung than I expected.

    25 To me, it’s crazy that even the smallest cars sold in the U.S. except smart, have power steering. Even smart has, (had? Do they still sell them in the U.S.) power steering as an option.

  30. Larry D. Says:

    If I could choose which Mercedes to test drive, I’d choose this one (even though Jay has messed with the engine and HP). Cost No Object, 600 Grosser, hand-made 1963-1981. A nightmare to restore and maintain with all systems being hydraulic and not electric. I’ll let Jay say the rest

  31. Larry D. Says:

    28 that 600 was the… “SWB” (LOL) version. if you need more space and air, try this one

  32. R. Bruce Melton, Says:

    First, I personally do not believe in leasing a vehicle – this is essentially a financing scheme to get someone to “buy” a more expensive car than they can really afford by a payment plan that accounts for the amortizing depreciable value of the vehicle, plus profit and interest (you will never find this factor on the interest on the contract – and it is not a required disclosure). Since only about 5% of the new car buyers pay cash for a new vehicle, the other 95% either have to finance the purchase price, or lease. In other words, “What is the down payment and how much per month.” This is how many people end up “buried” under their new car!

    Purchase of a used 2-3 year old vehicle is logically your best economic decision, since it has been the highest period of depreciation, but it is still a “USED CAR.”

    The only place where leasing is justifiable to me is for a business individual who desires a very high priced car (Mercedes ‘S’ Class, BMW 7 series, etc.) that is used for BUSINESS. The $0.565/mile federal tax deduction does not even begin address the real depreciation, but a lease is a tax deductible “expense.” This way, the individual/company can realize a savings dependent upon their applicable tax bracket.

  33. Lambo2015 Says:

    #26 My apologies, Didnt know from your post that’s what you were referring to.
    My guess as to why the Big three have not made significant advances in computer processing capability is simply not their wheelhouse. Tesla is located near the silicon valley surrounded by many tech companies. I would also assume this Tesla technology is being shared within the other Elon Musk ventures such as Space X. Its a huge advantage for Tesla with lots of talented folks to pull from in that area.

  34. Kit Gerhart Says:

    29 That would not be a “drivers car.” Actually, it’s no longer than some of today’s pickup trucks.

  35. joe Says:

    Tesla is at a point in which it has to greatly increase it’s stock value so Tesla can can pay it’s huge bill coming in a few months. I even think it may not even have made a profit recently as they stated. Tesla will run in deep trouble and will probably have to file bankruptcy. That being said is why I believe all this hype is a bunch of BS. That’s how Tesla operates.

  36. Kit Gerhart Says:

    Tesla has a lot more money coming in, because they are now delivering a lot of cars. I don’t know how that will affect stock price, but it certainly affects cash flow.

  37. Kit Gerhart Says:

    Ford and VW collaberation might actually make a lot of sense. Ford is good at selling big pickup trucks in the U.S., and VW is good at selling cars everywhere in the world, except the U.S. They don’t compete with each other much.

  38. Larry D. Says:

    18 If you just lease the thing, and some leases are just for 2, and most for 3 years, if you are like me and do not do many miles, you can look at the tires and if they are worn out you can ask for a discount, like I did (got $500 of just for that), but if you do lots of miles it is worth getting a new set. You don’t have to pay $1000 and $1200 there are options for any car, new or used tires, from $200 to $500 a set. But even at $1,000 this is not a major expense, given how long they will last, when you have an S class worry about the big repairs, the $3k and $5ks

  39. Larry D. Says:

    32 The S class is not a driver’s car either, but can be driven by the owner if needed, pleasantly. S classes are used all over the world as top Govt official cars, driven by chauffeurs, and middle ones use E class or A6 and the like, driving them themselves.

    The 600 Grosser is a legendary vehicle. It was more expensive than the Rollses of the time, and deservedly so. Every head of state had one. The interior is just great, Look at all the wood on the doors and windows. I hope you saw the video with Jay Leno, he does a much better job explaining it.

    If you want a driver’s car, lease a 911 or an exotic. OR if it has to be a big luxury sedan, take a 7 series. You will never mistake it for a Buick or Caddy.

  40. Larry D. Says:

    31 Thanks, don’t need to.

    The former editor of Car and Driver, now retired, who used to be a guest in these shows (I’d love to have him back), answered my Q in an alumni get together a few years ago, combined with an “Orphan Car” show next door. Czaba Czere (or Chedar Cheese, as John calls him) gave us a nice talk, and then sat down to eat in our table and I had a chance to talk to him at length.

    (Car and Driver’s comparison tests always had BMWs win back then, and Czaba put his money where his mouth is, he drove a 5 series at the time.)

    I asked him why the Germans are so much better in making luxury and performance and other premium priced cars, and his answer, which you may not find politically correct, was that the Detroit 3 attract Engineers with the 120 IQs, while the 160 IQs American Engineers go to work in Silicon Valley and Biotech and all the hot fields, while in Europe, the Automakers are able to hire plenty of 160 IQ engineers.

    I remembered his answer when I read this piece about the 1,000 % improvement. I also combine this with the Tesla engineers working on the Space program, Project X etc, who I saw during that impressive rocket launch, the Falcon HEavy.

    If these were not 160 IQ engineers, they sure had 160 units of enthusiasm, committment, etc, they seemed really happy working there and satisfied with their accomplishments. Almost like they were on a crusade of sorts.

    But due to tesla’s location in the West Coast pardise (climate wise) and their closeness to Silicon Valley, they may in fact have been able to hire the very top engineering talent, while Ford and GM worry about diversity, harassment, and all other side shows.

  41. Larry D. Says:

    33 Joe: Yes, Dear. Unfortunately, you are wrong. George Soros who as you know has very deep pockets, has bought every single Tesla 3 so far, and will buy all the rest that Musk is making in that tent of his. Hey, BTW were you abducted by aliens once? And did they do the dreaded probe?

  42. ChuckGrenci Says:

    Czaba Czere is actually Csaba Csere (no offense, just stating); I’ve heard him called Chubba Chedda, phonetically. He was one of Car and Driver’s top editor’s in my opinion. David E. Davis held the helm for many moons and put C&D on the map in my opinion; other most favorite was Brock Yates (always outrageous and a good read). And Patrick Bedard definitely honorable mention.

  43. Kit Gerhart Says:

    38 At one time, as recently as the 1960s, the U.S. car companies could hire some of the very best engineers, both because the pay and benefits were good, and because the auto business was “exciting.” By the late ’70s-’80s, that was less the case, though the U.S. companies still have some very good engineers, to come up with the mostly good current products.

  44. Bob Wilson Says:

    What makes Tesla batteries different is the parallel-series architecture. Cells are assembled in parallel for a desired range and in series to power the motors. This is why Tesla has the Model S in 60, 75, 90, and 100 kWh. In contrast, the other EVs come in one kWh for any given year. They are dependent on their battery supplier to make a prismatic or pouch cells of a given capacity. Tesla batteries have flexible capacity on the same assembly line.

    Like parallel versus series Christmas tree lights, parallel cells means one bad cell can not fail the pack. Each cell is connected using a fuse wire that blows when a cell fails taking it safely out of the circuit. In contrast, one large prismatic or pouch cell failure takes out the whole pack.

    In a typical Tesla 72 parallel bank with six banks in series (6s x 72p) module, loss of one cell reduces module capacity by 1/72 or 1.4%. Loss of one cell does not leave the Tesla stranded.

    Only parallel-series allows building the same model car with different battery capacities. Only building your own battery packs, not contracting to someone else, allows adjusting to meet market demand.

  45. Kit Gerhart Says:

    41. Interesting. It looks like Tesla uses more, but smaller cells than, say, a Chevy Bolt, which has a 96s3p battery, with 288 total cells for its 60 kwh pack. I guess Tesla uses various increments of 16 or so of the 20-some volt modules, to get the different capacities.

  46. Kit Gerhart Says:

    It looks like all S Models use 16 battery modules in series, with 6sXp configuration for each module. The 85kWh module is 6s74p, and the 100kWh module is 6s86p. Yeah, that looks like good design, for dealing with a few bad cells.

  47. Bob Wilson Says:

    #42 – “a Chevy Bolt, which has a 96s3p battery” brings up the problem with large format cells. If that were a 75 kWh battery, going to 96s 4p would be a 100 kWh battery or 96s 2p would be 50 kWh. Just three pack options: 50 kWh, 75 kWh, and 100 kWh.

    In contrast the Tesla “6s74p” for 85 kWh can be tuned in 3/74, 4% increments. That is what Tesla did to make the Model 3 mid-range. All they had to do is reprogram the pack welding robots to handle fewer cells in parallel.

    BTW, Lutz’s belief that EVs will always be a loss-leader, forced by environmental regulations just took a big dive. Lutz thinks costs can be shifted to pickups and Tesla has none. Tesla just went through a profitable Q3 without cost shifting.

  48. Bob Wilson Says:

    Sorry, that is 1/74, 1.4% increments for the “6s74p” versus 33% decrease or 25% increase for the “96s3p” battery.

  49. Stephen Says:

    I think GM is worried that China (and maybe also Europe) car makers will start to take leads in EVs and the US car makers will fall behind. GM and Ford are retrenching from Asia and Europe so they lose research experience. FSA is basically Fiat Europe kept afloat by Italy and Chrysler with low EV experience. Tesla might be the leader but who knows whether they will last or be bought out by a non-US car maker. Ford should be worried too with no dedicated EV to learn from.