AD #2898 – CARB Finalizes Fuel Economy Agreement; How GM Can Get More EV Credits; Bronco First Ride Impressions
August 18th, 2020 at 11:55am
Listen to “AD #2898 – CARB Finalizes Fuel Economy Agreement; How GM Can Get More EV Credits; Bronco First Ride Impressions” on Spreaker.
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Runtime: 11:43
0:07 CARB & Automakers Finalize Fuel Economy Agreement
1:12 Canoo Jumps on Reverse Merger Bandwagon
1:49 How Polestar Will Launch Its Lineup
3:38 How GM Can Get More EV Credits
4:43 Future Model Intel
5:38 Baojun Launches New Sedan & Wagon
6:52 Ford Bronco First Ride Impressions
9:35 Ram Reveals Its Raptor Killer
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CARB & AUTOMAKERS FINALIZE FUEL ECONOMY AGREEMENT
Last year, the California Air Resources Board made a deal with Ford, Volkswagen, BMW and Honda to boost the average fuel economy of their fleets to 50 MPG by 2026. That deal angered the Trump Administration, and the Justice Department even opened an antitrust investigation, but that went nowhere. So California and the automakers are moving forward with their agreement which was finalized yesterday. Thirteen other states follow California’s standards and they support the deal. Earlier this year, the Trump Administration eased up on fuel economy regulations enacted during the Obama Administration. Those new targets improve vehicle emissions by 1.5% annually by 2026 instead of 5% gains previously required. But Ford, VW, BMW and Honda are actually asking for stricter standards. And that shows how much the auto industry has changed. Whoever thought we’d see car companies asking for stricter fuel economy standards?
CANOO JUMPS ON REVERSE MERGER BANDWAGON
Ever since Nikola announced it was doing a reverse merger that got it listed on the NASDAQ stock exchange, other startups such as Lordstown Motors and Fisker rushed in to do the same thing. Now Canoo is jumping on the bandwagon. Canoo developed a 7-passenger EV based on a skateboard platform and has a deal with Magna to assemble its vehicles. Fisker is also in talks with Magna for final assembly. Canoo is also working with Hyundai to develop other EV models. Reuters reports that Canoo should be valued at $2.4 billion once it gets listed.
HOW POLESTAR IS LAUNCHING ITS LINEUP
Yesterday we gave you our driving impressions of the Polestar 2 EV. Now let’s get into some of the details of how Polestar is launching its lineup. It started with the Polestar 1, which is based on a modified version of the company’s dedicated EV platform, even though this $155,000 2-door is a plug-in hybrid. Now it’s coming out with the Polestar 2, which is actually based on the platform from the Volvo XC40 and explains why it looks so much like a Volvo. Then it’s going to come out with the Polestar 3, an all electric crossover that will use the full dedicated EV platform. Confusing, isn’t it? We think this shows how Volvo and its parent Geely changed their minds as they developed the Polestar brand. What started out as the performance trim line for Volvo evolved into the EV brand for Volvo, which then evolved into its own stand alone company. Don’t worry, there will not be a test to see if you can remember any of this.
GM WOULD GET MORE EV CREDITS WITH EV SPINOFF
General Motors is considering spinning off its EV operations with an eye on generating a stock market bonanza. Yesterday, mere speculation by Deutsche Bank that there could be a spinoff sent GM shares soaring higher than they’ve been in months. The stock market loves this talk of a spinoff, but here’s our Autoline Insight on why GM may be considering it. General Motors is out of EV credits in the U.S. market. While the government provides up to a $7,500 tax credit to people who buy EVs, it goes away once an automaker sells 200,000 electric vehicles, and GM has sold more than that. But if GM spun off its EV operations as a standalone company it would qualify for the credit. And with GM launching a lineup of EVs in the next couple of years they’d sell a whole lot better if customers knew they could knock seventy five hundred dollars off the price. Those incentives would be worth $1.5 billion in total, so if GM does not do a spinoff it would be leaving a lot of money on the table.
FUTURE MODEL INTEL
We’ve got some future model intel thanks to AutoForecast Solutions. It reports that Tesla will start making the Cybertruck at its Terafactory 1 in Austin, Texas in May of 2022. Meanwhile Nissan is finally going to start making the next generation Frontier pickup truck at its plant in Canton, Mississippi. That Frontier has got to be one of the oldest models in the market. And it looks like Chevrolet is going to have an all-new Equinox in the market at the same time it keeps the old one in production. The Equinox is made in three separate assembly plants. Two are in Mexico: Ramoz Arizpe and San Luis Potosi. They start making the new one in May and November of 2024. It’s also made in Ingersol, Ontario in Canada and the new one doesn’t start rolling down the line there until February, 2025.
BAOJUN LAUNCHES NEW SEDAN & WAGON
When China told foreign automakers to create new brands developed exclusively in China by Chinese, General Motors launched the Baojun brand. It specializes in low cost cars positioned below Chevrolet, and it just introduced two new models, the RC-5 sedan and RC-5W wagon. Both are offered with a 1.5L naturally aspirated engine or a 1.5L turbo. They’re equipped with cameras and radars which helps provide 17 advanced driver assistance functions. Other available features include wireless phone charging, seats with memory function and an intelligent air purification system. The wagon version also features reclining seats in the rear and extra headroom. Pricing for the sedan starts at about $8,600 while the wagon has a starting price of about $10,500.
FORD BRONCO FIRST RIDE IMPRESSIONS
We’re finally able to talk about our first ride in the new Ford Bronco. But I’d like to note a few things before we hop into that. First, as I said in my intro a week ago, this was my first vehicle event since the coronavirus shut everything down and that means the event was a little different than normal. Masks, temperature checks, social distancing as much as possible were all required and the most important note, no driving. So, I only got to ride in the vehicles with a Ford engineer. Second, I’m not an off-roader, so I’m going to focus on the things I thought were important and I’ll rely on all of you out in viewer land to provide comments and tell me what I missed. That said, I first rode in the Bronco Sport. None of what we put the Bronco Sport through on the off-road course really put it to the test, but what I did find impressive was the 245 horsepower 2.0L engine, which was surprisingly zippy through the sand and provided plenty of torque. We even stopped in the middle of a steep grade hill and took off with no problem. Other features that would aid a novice, like myself, is the forward facing camera that also has a wide angle view and the off-road cruise control-like setting, called Trail Control. The Ford engineer said these features would also help a more experienced off-roader by allowing them to concentrate on other things. Now let’s focus on the big Bronco. We put this vehicle to the test a little more, going over elements that really tested chassis flex, up steeper grade hills and going through deeper sections of water. With the manual transmission it really seemed to take advantage of the great gearing, which goes as high as 94.75:1. One of the features I found most interesting is the sway bar disconnect. It’s a hydraulic system in the Bronco, which allows you to disconnect the sway bar at any time even if the suspension is under load. The Ford engineer said some other vehicles, like Jeep, use a mechanical disconnect and you might get a warning on the dash if you try to disconnect under the same conditions. What I really noted from the Bronco and Bronco Sport rides was that the Bronco Sport seems more like a precision tool used to carve up an off-road course, which is why I think the 1-inch suspension lift and bigger off-road tires will be a popular modification, while the bigger Bronco was more brute-like, smashing its way through the course. We carried so much more speed in the Bronco compared to the Bronco Sport. I think Ford did a good job of separating these two vehicles from one another.
RAM SETS SIGHTS ON RAPTOR WITH NEW 1500 TRX
And while Ford looks to have a Jeep killer on its hands, FCA has its sights set on one of Ford’s off-road kings, the Raptor. Ram unveiled the new 1500 TRX, which is highlighted by a Hellcat engine stuffed under the hood. The 6.2L unit is tuned to 702 horsepower and is mated to an 8-speed automatic, which helps the TRX sprint from 0 to 60 in 4.4 seconds. It looks a lot meaner than other Rams, which is thanks to aggressive features, like a giant, functional hood scoop and a body that’s 8-inches wider compared to the rest of the lineup. Composite fender flares help cover that extra width and the 35-inch off-road tires. Ram also beefed up the frame, developed an all-new independent front suspension system as well as a new 5-link rear suspension setup and added a whole host of off-road goodies we just don’t have the time to highlight. The interior comes in three options, ranging from cloth and vinyl to premium leather and suede with carbon fiber accents. The one thing the Ford Raptor has going for it, and always has had, is price. A SuperCrew or 4-door Raptor starts around $57,000. The TRX only looks to be offered in a 4-door and starts at over $70,000.
If you’d like to learn more about the TRX, join us this Thursday for Autoline After Hours when our special guest will be Jeff Roselli from the TRX program. And if you have questions you’d like to ask Jeff, send an email to viewermail@autoline.tv or tweet us @Autoline. Then join John and Gary for some of the best insights as to what’s going on in the automotive industry.
And so we come to the end of today’s report. Thanks for watching.
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Comments (38)
August 18th, 2020 at 12:27 pm
The EV credits landscape in the US could change significantly if Biden becomes president. They will change if the Ds also get control of the Senate. i.e. GM should wait a couple of months to see the election results.
The TRX is the new king of the hill and folks with money will gladly pay those prices.
August 18th, 2020 at 12:34 pm
I qualified for the last of GM credits of $1,875 on March 27th when we purchased an untitled 2018 Cadillac CT6 plug-in. Quite a dream ride at 4,000 miles now and almost off battery powered.
August 18th, 2020 at 12:35 pm
On TFL Trucks, Andre maxed out the build of a TRX (with the launch edition) and it was just shy of $100k; pretty steep. Wonder if dealers will even gouge that price as the launch edition is a limited number. The base is 70k and the launch edition takes it to 92k (adding other things brings it to the just sub 100k number). Also the 70k base does not include delivery (that’s another $1695). It looks like the TRX is going the route of the Gladiator introduction.
August 18th, 2020 at 12:52 pm
I suspect most of the TRX trucks sold will be customer orders, like the expensive Challenger variants. I doubt if dealers will be able to get above MSRP, as expensive as they are already.
August 18th, 2020 at 12:55 pm
Asking for more regulation is not to benefit yourself but to injure your competitors. Just make the best product you can and let the market sort things out. If you make a better mousetrap…
August 18th, 2020 at 12:59 pm
The base Raptor may be $57k on paper good luck finding one. I have looked and the cheapest new one I could find was 75+ with most over 80.
I’m betting the Ram will be less money equally equipped after the first year introductions.
As I said a week or two ago, it would make sense for GM to spin off their EVs I hope they still don’t try and offer a sprinkling of EV models throughout the other GM divisions. Do it right GM and just stick with what you know and continue to do it the best you can. EVs along with AV is still a small market and should be kept separate for now.
August 18th, 2020 at 1:06 pm
5 That’s exactly what I suspected is going on here too, The automakers willing to sign up for tighter regulations have figured out how to meet them. So forcing the issue hurts their competition. Raise the bar to burden your foes with more R&D costs. They are certainly not doing it out of moral or ethical obligations.
August 18th, 2020 at 1:06 pm
The thing I don’t get with the Polstar is where it and Lotus fits in the Geeky kingdom with Volvo. Lotus was primed to be the English Porsche, but now it’s going all electric. But so is Polstar and it seems that from a price, tech and sport/luxury car point, they will be pursuing the same BEV customer. Adding to this is the fact that, outside of Lotus sport cars, much of their offerings will be off the backs of Volvo platformers. I’m sure that what each brand sells will look different (with Polstars probably looking closer to Volvos then that from Lotus), but to the same costumers at the same price? Smh!
FCA has had a lot of heart burn ever since Ford F-150 Raptor. With Jeep being their off road brand, but not having a full size Jeep truck to compete with them must have been a slap in the face. When FCA announced they were making the full size Wagoneer from the bones of the Ram 1500, I know that it would be a matter of time before they would adding some of that Jeep hardware to the Ram to go head-to-head with the Raptor! One way or another, there is a new chariot to pound the dirt and sand of the beach and dessert. Dust bunnies beware, for you have been warned!
Ball’s in your court Chevy/GMC!
August 18th, 2020 at 1:09 pm
The Federal Tax Credit needs to end. Reset it to one year for the $7,500 followed by the divide by two for each quarter. Then have it end the second year. Making an EV has become a commodity with prices dropping. No need to subsidize buying catalog parts and rolling out another mediocre EV. Let the market sort them out.
August 18th, 2020 at 1:10 pm
The GM EV spinoff idea sounds like another large corporation using a technicality to take another run at my tax money.
5 Correct! It’s a play to limit competition and also ultimately limit the cars and models that will be available to me to buy. There is no current law against them offering a fleet getting 50 miles per gallon or 60 or whatever they want – why else do they want/need regulations?
August 18th, 2020 at 1:11 pm
Now, it’s time for someone to again make a small pickup to sell in the U.S. It was rather refreshing to see an old, small 2 door regular cab Toyota pickup a couple days ago. There aren’t many of those still around, at least not in road salt country.
August 18th, 2020 at 2:14 pm
the corrupt and incompetent congress rewards the LOSER EVs with the 7500 tax credit and REFUSES it to the WINNERS. What an IDIOTIC waste of taxpayer’s money.
As for GM rearranging the chairs of its TITANIC BEVs, will not make a bit of a difference if it spins the worthless loser off or not.
August 18th, 2020 at 2:23 pm
11 one reason the late (in the US) Hond FIT failed, despite its allegedly far smarter design and cuter face than other subcompacts [people never wanted, is that, RIDICULOUSLY, it got WORSE MPG than the much longer and far more elegant CIVIC. Draw the parallel to any other smaller vehicles that are not or no longer offered in the US market (which is DIFFERENT, I say for the nth time, than the markets overseas, with their tiny narrow roads and constant parallel parking in downtown areas.
August 18th, 2020 at 2:29 pm
Sean, can you confirm if the Orange Bronco you showed is a 2.3T/7 manual? I know the black one was from another review. Thanks!
August 18th, 2020 at 2:40 pm
#11. Kit, coming soon: a small pickup from Ford. Unit-body, FWD, priced around $20,000. I think it will be out end of 2021. Other reports say it will be named Maverick.
August 18th, 2020 at 3:01 pm
15, John, cloned from the Bronco Sport, right? I think it may earn some sales and maybe spur others to get back in to a segment that some want.
August 18th, 2020 at 3:08 pm
not an off road guy myself,but really like the bronco,and your coverage was excellent. That was a very nicely set up course also.
August 18th, 2020 at 3:29 pm
Sean, I like your EV spin off logic, but why think so small? If a one model EV spin off is worth 6 billion when spun off, why not spin off each MODEL as a separate company? You might be able to spin off 5 or 6 companies before people wise up. (E-Corvette, E-Caddy, GM-E pickups, chEVrolet) Maybe this could be a way to get some value out of the unused old nameplates (pontiAC, Olds, Saturn, Holden, Oakland etc)
August 18th, 2020 at 3:37 pm
EV tax credits are doing what they were intended to do and all manufacturers received the same deal, so why cut the legs off those who have yet put their product to production?
August 18th, 2020 at 3:38 pm
… also, if GM wanted to unload a few factories they know they won’t need in the future, they could ‘sell’ them to the spin-offs, instantly making the spin-offs more credible as ‘real’ companies
August 18th, 2020 at 3:45 pm
I read somewhere that the Bolt ranked No.1 in affordable EVs. Now if GM spins off into a separate EV division, there is no reason why that company shouldn’t qualify for the same tax credits to stimulate its brand… as long as it is manufactured here.
August 18th, 2020 at 4:00 pm
I don’t know what compels Larry to tell us how well he is doing in the stock market, but EVERY marketer believes stocks will continue to rise but at a more moderate pace after the election. It doesn’t matter which side wins. Both will continue to stimulate the economy, but from different directions. The drive towards EVs will really depend upon who takes the senate.
August 18th, 2020 at 4:09 pm
15. Thanks, John. The pictures I’m seeing are a “smaller Ridgeline,” 4 doors, and an extra short bed, rather than a regular cab small truck. Anyway, it will be interesting to see what actually shows up.
August 18th, 2020 at 5:04 pm
13. Actually, the most common version of Fit gets slightly better city mpg than Civic, and these cars are mainly used in the city.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=42394&id=41748&id=42153
Of course, Americans aren’t buying Civics instead of Fits. They are buying little CUVs, like that Kia we saw here a few days ago, which are thirstier than either Fit or Civic.
August 18th, 2020 at 5:52 pm
The small Kia seltos is perfect for 80 year olds , I work with a geriatric population, they need a short wheelbase vehicle for parking, with ease in ingress/egress -higher seating position and headroom. An efficient power plant. And four doors to carry people and items with ease, groceries and oxygen / walkers. They drive around town, or is good enough for short trips , most of them are now leery of younger people without a mask on. So they don’t travel far. Some don’t care about anything and just go. It was Interesting to read how someone thought they were “illiterate “ for getting a vehicle like that . From what I know and experience with them , they know exactly what they want, and how it fits their life. Not everyone is a sports car enthusiast with 100k to plunk down on a vehicle that there may not be local service for. Imagine being in a new electric car and you don’t know the true range, like a model 3 on a frozen feb day, and you wear depends. … People know their own situation and the potential pitfalls of new technology, what is safe and reliable comes more into play for them.
August 18th, 2020 at 5:52 pm
The small Kia seltos is perfect for 80 year olds , I work with a geriatric population, they need a short wheelbase vehicle for parking, with ease in ingress/egress -higher seating position and headroom. An efficient power plant. And four doors to carry people and items with ease, groceries and oxygen / walkers. They drive around town, or is good enough for short trips , most of them are now leery of younger people without a mask on. So they don’t travel far. Some don’t care about anything and just go. It was Interesting to read how someone thought they were “illiterate “ for getting a vehicle like that . From what I know and experience with them , they know exactly what they want, and how it fits their life. Not everyone is a sports car enthusiast with 100k to plunk down on a vehicle that there may not be local service for. Imagine being in a new electric car and you don’t know the true range, like a model 3 on a frozen feb day, and you wear depends. … People know their own situation and the potential pitfalls of new technology, what is safe and reliable comes more into play for them.
August 18th, 2020 at 6:50 pm
I don’t see many Kias of any kind around here, yet a new dealership sprang up a couple years ago. Honda is more abundant. Half are sedans. When I hit the wineries around the Cleveland suburbs it seems like all foreign makes are Honda’s.
August 18th, 2020 at 6:54 pm
What’s the difference between a Kia and a Hyundai? I have never been in either.
August 18th, 2020 at 7:22 pm
25. The 80-some year old Seltos owner I know likes the vehicle, for her usual around town trips. As recently as a year ago, she and her somewhat younger friend took a ~2000 mile highway trip. Something else would be better for that, but I’m sure they won’t do any trips like that as long as covid is still around, if ever.
27. I see a lot of Kias and Hyundais in the “space coast” area in Florida, but not many in Kokomo, Indiana. The only foreign name plate cars sold in Kokomo are Toyota and Honda.
28. A lot of Kias and Hyundais are near-twins, like Sonata/Optima, and Sportage/Tucson, and others. Some Kias, like Soul, don’t have a Hyundai direct counterpart. Nearly all mechanical parts are shared between the brands.
August 18th, 2020 at 7:24 pm
The smallest car I ever purchased was a Mazda 3. I used it as a go to work car for about 30K miles before giving it to my son as a graduation gift. It was a fun car, kinda spunky, got good mileage and problem free. I’m not certain I like the newer models for it has gotten larger and doesn’t look as sporty. It was a good experience for me, but the seats became a bit hard after an 86 mile drive to work.
August 18th, 2020 at 10:03 pm
30. I’ve had a number of small cars, a VW Beetle, Chevy Sprint, VW Golf Cabriolet, Geo Spectrum, and most recently, the Mini. The Mini has made two round trips between Florida and Indiana, and other than being a little noisy, is comfortable to me for a trip like that. Actually, the same applies with the Corvette. The seats are comfortable for me, even for 11-12 hour days, but the car is kind of noisy. I guess ear plugs would fix that. I always use ear plugs when riding motorcycles, even though my bikes have quiet, stock exhaust, but just the wind and mechanical noise is substantial. I’ve never tried using ear plugs in a car, to see if I’d like it. It would be easy to accidentally go way too fast in a car like the Corvette with ear plugs.
August 19th, 2020 at 6:02 am
25 Hyundai and KIa already had vehicles that would satisfy the above needs of 80 year olds and to an even bigger extent than the Seltos, AND at a much lower cost to buy and own. For example the KIa Soul, and it has much smaller footprint than the Seltos as well, and better MPG. I sure would NOT recommend this joyless, cheap, junky vehicle, which I have been sentenced to drive for 200+ miles once (renting and trying to minimize my costs), to ANYONE, young or old. Life is too short to waste driving such truly crappy vehicles.
August 19th, 2020 at 8:04 am
28) The difference is about the same as Chevy Truck is to GMC. Hyundai is the GMC of the DUO. Does that make Hyundai Professional Grade? LOL
August 19th, 2020 at 8:13 am
27 The lack of Kia’s I believe that’s our proximity to the motor city, and for a good chunk of the mid-west where the unions were strong and buying American means something still. Many people are directly affected by the auto industry and can make the connection on how buying foreign cars affects them. Honda is understandable especially in Cleveland not that far from the Marysville Honda plant.
When I lived in L.A. for a year I was shocked at the huge difference in vehicles. Trucks are only for companies like landscaping and construction. I was so used to seeing about 80% domestic cars on the road to about the opposite in California where its maybe 20% if that.
August 19th, 2020 at 8:48 am
33 Kia and Hyundai twins are much more different than Chevy and GMC trucks, at least some of them, like Optima and Sonata. The styling is different, inside and out, with mostly different body panels. The Kia is slight more expensive.
https://www.autotrader.com/car-reviews/2019-hyundai-sonata-vs-2019-kia-optima-which-better-281474979902957
August 19th, 2020 at 8:56 am
34 That’s certainly the case where I am now, where FCA is the biggest employer, and there are still some GM and Delphi jobs. Also, the nearest Kia dealer is about 40 miles away. There are a lot of Kias in my area 8n Florida, espially Soul, a kind of cute, well priced, and practical around town vehicle.
August 19th, 2020 at 4:52 pm
Honda has been selling the most popular car in America (the Accord) for decades so naturally buying a Honda is not unusual and most of the Japanese built car plants in the south to avoid the regular trade deficit wars that hurt their exports to the US.
Euro car buyers of small cars don’t do the same massive mileages on highways with massive Semi trucks slamming by. trucks sell less in CA as fuel (like in Europe) is more expensive so they’re used for the original reason they were built-commercial use.
I can understand GMs EV trick but in any compromise on a new deal between Dem&Rep in DC, changing the tax credit to “cut subsidies” and raise the fed fuel tax to fund road repairs in a recession are likely to upset any smart spin-off. Any Green new deal is likely to cut subsidies both for EVs and oil production.
August 19th, 2020 at 5:10 pm
If I was Ford, I’d offer the Bronco as a cheap Land Rover Defender in Europe/Rest of the world. Its got the off-road chops, looks rugged and would be way cheaper to buy even if it was the premium models on offer. Even your middle east buyer can’t afford the usual pimped out Range Rover and yet needs something to cope with sand and track. Small AWD still sells. Wonder if Ford did any testing to see if it would pass Euro safety tests. Near-nobody buys US pickups outside North America and Jeep faces lots of competition for premium AWD SUVs in Europe