AD #3308 – Musk Downplays 800v EVs; Lincoln’s Glorious EV Concept; Honda to Use GM’s Cruise Origin in Japan
April 21st, 2022 at 11:49am
Listen to “AD #3308 – Musk Downplays 800v EVs; Lincoln's Glorious EV Concept; Honda to Use GM's Cruise Origin in Japan” on Spreaker.
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Runtime: 11:06
0:07 Tesla Posts Record Sales, Revenue & Profit
1:19 Highlights from Tesla’s Earnings Call
4:58 Lincoln’s Glorious EV Concept
8:21 Honda to Use GM’s Cruise Origin in Japan
8:54 Euro NCAP Goes Green
9:53 Changan Builds China’s First Fuel Cell Car
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TESLA POSTS RECORD SALES, REVENUES & PROFITS
Tesla reported its first quarter earnings and the numbers are stunningly good despite supply chain bottlenecks around the world, an industry-wide chip shortage, Covid lockdowns in China and a war raging on in Ukraine. Despite all that, Tesla managed to boost its sales 68% compared to a year ago. It sold over 310,000 cars. That brought in nearly $17 billion of automotive revenue, which represents a staggering 87% increase over last year. Total revenue, including solar panels and storage, came to nearly $19 billion. And $3.3 billion of that ended up on the bottom line, which was up a ridiculous 658% compared to last year. Even compared to the prior quarter, profits were up 43%.
Here’s our Autoline Insight. Tesla is turning into a money machine. And with new assembly plants coming on stream in Berlin and Texas, we believe it’s going to outperform all these numbers in the quarters to come.
MUSK DOWNPLAYS 800v EVS
And here are some surprising nuggets of information that we dug out of the earnings call that Elon Musk had with Wall Street analysts. This one caught us by surprise. Tesla doesn’t see any reason to use an 800 volt architecture in its cars.
“Let me just quantify that. Basically, our estimate is that going from 400 to 800 volts might save $100. It’s not really moving the needle.”
Elon said that 800 volt architectures make sense in very big vehicles, like the Semi and Cybertruck, but not in the 3, the Y or the S and X.
WHY TESLA IS RAISING PRICES SO MUCH
He also explained why they’ve been raising prices so much.
“Actually, on the price increase front, I should mention that it may seem like maybe we’re being unreasonable about increasing the prices of our vehicles, given that we had record profitability this quarter, but the wait list for our vehicles is quite long. And some of the vehicles that people will order, the wait list extends into next year. So, our prices of vehicles ordered now are really anticipating supplier and logistics cost growth that we’re aware of and believe will happen over the next 6 to 12 months.”
In other words, Tesla is raising prices now because by the time people take delivery of their cars, the raw materials needed to make them will be more expensive. So it’s protecting itself from higher costs in the future, not just what it’s seeing now.
ROBOTAXIS CHEAPER THAN BUS RIDES
Musk also talked a lot about driving down the cost of mobility and not just with cheaper EVs. He really sees the solution as robotaxis.
“I mean, looking at some of our projections, it would appear that a robotaxi ride will cost less than a bus ticket, a subsidized bus ticket or subsidized subway ticket.”
TESLA INSURANCE OFFERS BIG ADVANTAGES
And finally, Musk talked about the advantages of Tesla providing insurance to its customers. He says they can offer lower rates and a much better experience.
“And basically, the customer experience is just vastly better because if there’s an accident, there’s no argument. We’ll repair it immediately. And this is as compared to arguing with an insurance company and then a claims adjuster and then a collision repair center. And this can be a nightmare basically. So we’re trying to turn a nightmare into a dream with Tesla Insurance.”
I think most people would agree that dealing with insurance companies can be a headache, so Tesla could have a real advantage there. It expects 80% of its customers in the U.S. to buy car insurance from Tesla rather than go with a traditional insurance company.
LINCOLN’S GLORIOUS EV CONCEPT
We’re not sure if the new Lincoln Star Concept that debuted after yesterday’s show is a vehicle or a transformer? I’m joking, of course, but look how the rear tailgate folds down and transforms into a bench to sit on with additional storage behind the rear seats. And the hood raises up and the grille extends out to reveal extra storage and a pass through into the interior. And it, too, transforms.
The front seats can swivel around to face the rear seat passengers. While this is cool, we expect stuff like this to stay in concept land. But the Star Concept also hints at the design language for future electric vehicles. And Lincoln says it will have four new ones by 2026. Lighting is clearly going to play a key role in its future designs. Not only does it have a more expressive lighting display for the traditional front and rear lamps, it also uses lighting to accent the badging, wheel arches, roofline and even what looks like some sort of autonomous sensor on the roof. And with front seats that swivel, it would make a lot of sense that the Star Concept would be autonomous. I want to highlight the rear as well. Note how all the lines kind of flow down and pinch together. It creates a unique look with the beltline, which is uninterrupted all the way to the back of the vehicle, the body color never breaks and goes up into the rear pillar. And the way it comes to a point a little reminiscent of the Kia EV6.
Last thing I want to talk about is inspired by an email I got yesterday, shout out to Grayson, asking what’s with all the two-spoke steering wheels? Is it a luxury thing? It’s on the BMW i7, Lucid Air, Hyundai IONIQ 5, etc. Not only do luxury vehicle designers seem to like the aesthetic, but I think it’s got more to do with these large displays that blend multiple screens together into one unit. A two-spoke steering wheel makes it easier to see the screen and it’s a feature that all these vehicles have.
ROB DICKINSON OF SINGER DESIGN ON AFTER HOURS
Have you ever heard of Singer Vehicle Design? It’s a California company that customizes air-cooled Porsches, with an attention to detail that can transform 911s into works of art. Rob Dickinson the founder of Singer is our guest on Autoline After Hours today. He’s an interesting guy. Before he started the company he was in an alternative rock band. So how do you go from rocker to world famous car customizer? Join us this afternoon at 3 PM to find out.
HONDA TO USE GM’s CRUISE ORIGIN IN JAPAN
We already knew that Honda will use GM’s Ultium platform for its electric vehicles, and it’s also getting that autonomous shuttle called the Origin that’s being developed by GM Cruise. And Honda signed a memorandum of understanding with two Japanese transportation service providers to launch autonomous mobility services in Tokyo in the middle of the decade using the Origin. Honda didn’t provide any other details but to us it’s cool to see a vehicle that will be built in Detroit being put to use like this in Japan.
EURO NCAP GOES GREEN
The European New Car Assessment Program, or Euro NCAP, evaluates and crash tests new vehicles for safety. And now it created a new category: Green NCAP. It’s all about promoting the development of environmentally friendly vehicles. And it just released its first Life Cycle Assessment or “cradle-to-grave” report that looks at the environmental impact of the top selling vehicles in Europe. The study looked at 61 cars of all types from 2019 to 2021 and assumed a lifetime of 16 years and 240,000 kilometers driven or nearly 150,000 miles. But it says the report is intended for informational purposes only and doesn’t rank the vehicles from best to worst. The intent is to highlight the importance of adopting an approach that takes into account the life cycle impact of cars on the environment.
CHANGAN BUILDS CHINA’S FIRST FUEL CELL CAR
Chinese automaker Changan Auto is making a bit of history and will be the first Chinese brand to mass produce a fuel cell vehicle. Called the C385, it’s being launched under Changan’s new Shenlan EV brand. The model, which goes on sale in the second half of the year, actually comes with three powertrains; BEV, plug-in hybrid or fuel cell. The BEV and fuel cell have a range of 700 kilometers or 435 miles. And the PHEV has a total range of 1,200 kilometers or 745 miles. And while the article didn’t indicate, those numbers are likely based on the easier WLTP or NEDC tests.
But that’s a wrap for today. Thanks for joining us.
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Comments (27)
April 21st, 2022 at 12:23 pm
Since Honda has been an investor in Cruise and closed the deal for the Origin vehicles to be used in Japan, I wonder if the vehicles will carry the Honda brand?
April 21st, 2022 at 12:24 pm
Tesla got a revenue boost from regulatory credits totaling $679 million, more than double the amount generated during the previous quarter.
April 21st, 2022 at 12:25 pm
And, good for Tesla! Their new production capacity is coming online at just the right time. They showed the world that EVs could be practical and consumers would embrace them, and now they are showing the industry that producing and selling EVs can be a very profitable business, at least for the OEM.
April 21st, 2022 at 12:29 pm
So if Tesla doesn’t see the price increase they anticipate will consumers receive a rebate? Doubt it.
That Lincoln is more of what I expect from an EV. The flexibility in that design shows what can be done when not trying to package an engine. Certainly a design from the ground up.
April 21st, 2022 at 12:31 pm
Way to Go Tesla!
Lincoln better save it’s pennies and stop wasting money on concept vehicles. Consumers want affordable and reliable real world vehicles.
My concern is that US OEM’s are planning to reduce vehicles production and therefore reduce inventories when chips and other materials become more available to keep consumer demand and profits high. I believe this strategy will open the flood gates for less expensive Chinese vehicles into the North America automotive market which will bankrupt them.
April 21st, 2022 at 12:43 pm
Turns out the lie that Musk was banned from talking about the “taking Tesla private,” was just a filing, not a ruling (see web link.)
“(Reuters) – A federal judge on Wednesday rejected an effort by Tesla Inc shareholders to obtain a “gag order” preventing Elon Musk from publicly discussing their lawsuit accusing him of deceiving them with a 2018 tweet about taking his electric car company private.
The ruling was issued by U.S. District Judge Edward Chen in San Francisco.”
Like Mark Twain once said, a lie will circle the globe three times while the truth is putting on its pants.
April 21st, 2022 at 12:45 pm
5) If they do I will happily drive my Chinese car right by the ashes of the Detroit 3 headquarters and not even shed a tear. It won’t happen though as there will be a recession well before such a plan could be enacted. That is when the OEMs will discover how nice it is to have customers come to their doors. They will also discover that they have to work much harder for every customer that might come to their door during a recession. So the issue is self correcting.
April 21st, 2022 at 1:04 pm
I’m surprised GM hasn’t raised the price of Corvettes more than they have. The wait is much longer than for a Tesla, but the raised the price only about 2% for the 2023 model year.
April 21st, 2022 at 1:53 pm
The U.S. imports far more cars than it exports. Eventually, the government will discover that it is possible to ‘just say no’ to imported cars.
April 21st, 2022 at 2:07 pm
It seems to me that there is a more likely explanation for Tesla’s profit increases. Maybe it’s because they don’t use the commodity chips that other people have a shortage of and don’t get parts from Ukraine or Russia. If you can make and sell cars and others can’t, your profits should go up! Part of the advantage of using new technologies.
April 21st, 2022 at 2:16 pm
9 The last I heard, BMW was the biggest exporter of cars from the US, with X5, etc. which are assembled mainly, or only in the US. Tesla may export more, after the Austin factory gets up to speed.
April 21st, 2022 at 2:24 pm
@9 by putting tariffs on imports and then get tariffs on our exports? Like the tariffs put in place during our trade war with China. Result: the largest U.S. based vehicle exporter BMW could not export 200,000 BMW X5 per year anymore from the Spartanburg plant to China. I don’t know for sure, but since Mercedes Tuscaloosa production, the second largest U.S exporter, was in the same situation I bet the same happened with the Mercedes GLS and GLE production.
BMW and Mercedes being the largest vehicle exporters from the U.S. and GM and Ford being irrelevant overseas, exports are the result of developing and producing vehicles which overseas customers want to buy.
The only vehicles of a U.S. OEM which are successful abroad are TESLAs. If you would like to mandate all TESLA production to be in the U.S. you do not understand the need for hedging currency exchange risks and supply chain risks in large scale global business. And the limits of the U.S. workforce, educated in Communication, Political Science, History and English instead of Engineering and Sciences.
April 21st, 2022 at 2:46 pm
12 BMW and M-B might want to move production to Mexico. They don’t seem to get into trade wars with anyone.
April 21st, 2022 at 2:59 pm
@13 unfortunately the production which had been exported for many years from the U.S.to China has been moved to China. It contibuted to an increase of the trade deficit with China, which had been constant at $400 BB/yr increased to $600 BB/yr between 2017 and 2020.
IMHO government should stay out of business. We have a capitalist economy and let’s keep it that way. Smaller government is better. A 50% increase of the trade deficit as a result of a trade war is an catastrophic defeat.
April 21st, 2022 at 3:17 pm
14 The problem is we are a capitalistic economy trying to compete with businesses and countries that are not. We need manufacturing jobs in the US and they need to pay much better than they do in China. Tariffs try and curb that discrepancy. Otherwise a global economy also becomes a global pay rate. I believe most people in the US are much happier with their pay compared to the world wide average pay for that same job. If all things were equal I would agree the government should not interfere with business.
April 21st, 2022 at 3:23 pm
If it weren’t for government “interference” with business, you still wouldn’t be able to see more than a few hundred feet in LA on some days, and breathing the air would be about as heathy as chain smoking.
April 21st, 2022 at 3:40 pm
@15 that is a myopic view on this topic: we also compete against high wage countries like Germany and Japan and are not competitive. Again: it is about generating profits by offering products customers want to buy like Mercedes, BMW, VW, Porsche, Toyota, Lexus, Hyundai and Kia do, not offering the cheapest products. Your view is a race to the bottom, my view is the race to the top. The most profitable OEMs do that.
April 21st, 2022 at 4:00 pm
17 I guess I wasn’t just thinking of the automotive industry but I do believe that the OEMs do produce products that are competitive.
What is myopic is to think that our economy can continue to support the standard of living we currently have if we allow the trade deficit to continue to rise. The government has to make it attractive to do business in the US.
I don’t agree with placing regulations on US manufacturing then turning around and allowing selling of those same products that don’t meet those regulations just because they moved overseas.
So we do our part to protect the health and safety of our people and the environment but if another country makes it overseas and puts even more pollution in the air or risks its workers that’s ok? As long as we get a cheap product and push the pollution elsewhere. Doesn’t seem as capitalistic when its not all even.
April 21st, 2022 at 4:05 pm
16 Exactly! Our government wasn’t even doing enough which prompted CARB. But it took intervention to get it cleaned up. Without the EPA we dumped waste into rivers and streams and for many years it was a free for all. Some countries do more than others but to think everything is equal is silly.
April 21st, 2022 at 4:20 pm
@5, agreed on the Lincoln Star Concept. It is very beautiful but I grow tired of hearing that such concepts are indicator on design direction, providing mere design cues for production versions. I hate that.
April 21st, 2022 at 4:23 pm
18,19 Yeah, except for Western Europe and Japan, and maybe a few other countries, more pollution of most types is allowed than in the US.
April 21st, 2022 at 7:22 pm
Why does the Lincoln brand and so many others, hate grills on BEVs so much? I know that people say that ‘it’s an EV and since there is no ICE, why does it have a grill!’ Styling?! If they are going to eliminate things on vehicles because the don’t need them, most ICE vehicles breath through the openings in the front bumper and have not needed a grill to do so for 15-20 years! Add to that, all the hood and fender vents and scoops, poles holes, roof racks, and a number of vehicles with decklead spoilers to control air flow when driving fast. There would be a lot of accessory items on vehicles today, that would go the way of the dinosaurs! Those items, though, communicate what the buyer finds important, what their values and personal style. Outside of eyelashes and eyebrows, what purpose does a mustache, goat-y and a beard serve our faces, other then catching mucus, from our nose, food and lent? If there not hiding scares, not much! Grills have been used as a style element for passenger vehicle, for over a hundred years. So I don’t see why doing away with them is so important, just because a vehicle is a BEV?! IMHO, this is an opportunity for automakers to do something more interesting with that space, but just getting rid of them seems rather extreme when there other things that are being kept, just because the look cool!
April 21st, 2022 at 7:28 pm
Corvairs looked pretty good without grilles, but the “chrome” bumper probably helped.
April 21st, 2022 at 9:07 pm
Curious rumors in PriusChat, “
April 21st, 2022 at 9:12 pm
Curious rumor of reduced Toyota shipping:
“Toyota USA sales were down around 15% versus 2021 in the first 3 months Toyota Motor North America Reports March, First Quarter 2022 US Sales – Toyota USA Newsroom”
“Toyota expects that production will increase as supply chain problems lessen and volume will exceed 2021 for the rest of the year. They predict that sales will be 2.35 million in the US versus 2.33 million in 2021. I have no idea if they will fall short or exceed.”
April 22nd, 2022 at 8:34 am
22) I am not so bothered by the lack of a grille. It is the lack of good styling that is bothersome. As Kit stated, the Corvair looked good without a grille. The VW beetle looked good without a grille. The original ford Taurus looked good without a grille. Air cooled Porsche’s look good without grilles. Even the water cooled Porsches look good without a grille. The 1992-97 Ford Crown Victoria looked good without a grille. Even the Thunderbird of the same 1992-97 vintage looked good without a grille. The Taurus of that same vintage also looked good without a grille. The Thunderbird turbo coupe of 1987/88 converted a thunderbird with a grille into one without and it looked good as well.
They know how to do it and there have been tons of cars in the past without grilles, but for whatever reason they make EVs look like something is missing up front. It boggles the mind.
April 22nd, 2022 at 8:41 am
25 Sales of the Toyota I recenly bought, Highlander, are about flat from a year ago, and up from 2020 and 2019. It was a new generation for 2020, and they got more serious about mpg with a 4 cyl, rather than V6 hybrid.
Feb. and Mar. Prius sales are way down from 2021, but the dealers don’t seem to have any, at least in my area, so it must be supply constraint.