AD #3349 – Chinese Leadership Doesn’t Trust Tesla; Car Color Affects Depreciation; Lamborghini Helps Ukrainian Supplier
June 20th, 2022 at 11:53am
Listen to “AD #3349 – Chinese Leadership Doesn’t Trust Tesla; Car Color Affects Depreciation; Lamborghini Helps Ukrainian Supplier” on Spreaker.
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Runtime: 10:37
0:08 Chinese Leadership Doesn’t Trust Tesla
1:06 Expensive EVs Threaten EV Revolution
2:20 Entry Level EVs Need to Sell Well
4:11 Car Color Affects Depreciation
5:16 Volvo Truck Pushes Forward with Fuel Cells
6:06 Volvo’s FCEV Rock Hauler
6:37 Opel Jumps into Fuel Cell Segment
7:54 Bridgestone & Dow Develop Run Flat Tire
8:25 Lamborghini Helps Ukrainian Supplier
9:06 BMW Invests In E-Drive Manufacturing…
9:30 …And Autonomous Forklifts
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CHINESE LEADERSHIP DOESN’T TRUST TESLA
China is worried about Tesla’s cars spying on its top political leaders. Starting on July 1st, Tesla’s will be barred from entering a city near Beijing for two months. No reason was given other than it concerned “national affairs.” Government officials will be gathering in the city for a meeting to discuss policy. Several months ago, Tesla cars were banned from driving on certain roads in the city of Chengdu while Chinese President Xi Jinping was visiting the city. And last year, the Chinese military barred Tesla vehicles from entering sites because it was concerned their cameras were spying on them, which Elon Musk denied was happening. Tesla isn’t the only automaker that has cameras in its cars, so it’s a strong message from Chinese leadership that it really doesn’t trust the American company.
EXPENSIVE EVs THREATEN EV REVOLUTION
Prices for electric cars are going up sharply as automakers try to offset soaring prices for the raw materials needed to make batteries. Whereas the average price of a new car in the US market is $46,000, the average price of an electric is $61,000, according to Edmunds.com, but not including Tesla. Some automakers have raised prices significantly. Tesla’s Model Y is now 65% more expensive than it was a year ago, according to Reuters. In early 2021, you could order a Model Y for $39,490. Now the cheapest one is $65,990. GM raised the prices of the Hummer by $6,250. Rivian already raised its prices by $10,000 to $12,000. Analysts warn this is pricing most consumers out of the EV market and threatens the adoption of electric cars. Two-thirds of new car buyers cannot afford a car that costs $61,000, and most of them will continue to buy vehicles with internal combustion engines.
ENTRY LEVEL EVs NEED TO SELL WELL
But there are affordable EVs available. GM just cut the price of the Bolt and Bolt EUV by $6,000, which means the base price is now about $26,600. GM is also coming out with an electric Chevrolet Equinox that will be priced at $30,000. And a base Nissan Leaf, when the federal tax credit is factored in, is below $20,000, though that hasn’t done much for sales. In China, Honda just unveiled the e:NP1 SUV that starts at $26,000. It comes standard with a 200-horsepower electric motor and a 53.6 kWh battery pack that delivers about 260 miles of range. We’ll have to keep a close watch on how consumers react to these cars, because if entry level EVs don’t sell well, automakers will not be able to get the scale they need for a true EV revolution.
CAR COLOR AFFECTS DEPRECIATION
Black, white and silver might be the most popular colors for passenger vehicles, but they actually lose their value faster than vehicles in a brighter hue. iSeeCars says colors like yellow, orange and purple hold their value better. In fact, it says a yellow vehicle will lose only 4.5% of its value over a 3-year period, compared to the worst color, brown, which loses 17.8%. Or if you want to throw a dollar figure on it, a yellow vehicle is worth a little more than $3,000 less than the MSRP, while brown loses over $7,600. There’s likely a couple of factors at play here. Bright colors are less common and that limited supply keeps prices up. We also think the type of vehicle plays a role. Bright colors are more common on sports cars and they’re also likely to hold their value better. But it’s a completely different story for pickup trucks. The blander colors tend to depreciate less.
VOLVO TRUCK PUSHES FORWARD WITH FUEL CELLS
Automakers see a lot of potential for fuel cells in commercial applications. Volvo started testing two large vehicles that are powered by hydrogen. The first is a big Class 8 truck that features a battery pack and two fuel cells supplied by cellcentric, a joint venture between Volvo and Daimler Truck. The fuel cells are capable of generating 300 kW of onboard electricity and will help provide an estimated range of up to 1,000 kilometers or 621 miles. Volvo says customer trials will start in a few years, but it probably won’t start selling them until the end of the decade. Part of the reason it’s going to take so long is because the infrastructure still needs to be built up. Right now, there’s not a lot of places to go to fill up with a tank of hydrogen.
VOLVO’S FCEV ROCK HAULER
Even so, Volvo is also testing a prototype articulated hauler, or those huge dump trucks you see on construction sites, that runs on hydrogen. It holds 12 kilograms of hydrogen, which takes about 7.5 minutes to fill, and that’s enough for the truck to operate for about 4 hours. Just for comparison, a passenger vehicle, like the Toyota Mirai, holds 5 kilograms of hydrogen. But this new truck is all about testing alternatives to battery electric and diesel.
OPEL JUMPS INTO FUEL CELL SEGMENT
And it doesn’t stop there. Opel is launching the fuel cell version of its Vivaro van. Since this van comes in a number of powertrain options, the fuel cell is located where the engine would normally be, the hydrogen tanks with a capacity of 4.4 kilograms replace the underfloor battery pack in electric versions and a small, 10.5 kWh, battery, which can be charged separately, is added under the front seats. Combined the system provides up to 400 kilometers or about 250 miles of range based on the WLTP test cycle. It also boasts a payload and towing capacity of 1,000 kilograms.
BRIDGESTONE & DOW DEVELOP RUN FLAT TIRE
Bridgestone and Dow developed new tire sealant technology that is able to self-seal a tire if it gets punctured. Current sealants are insanely hard to remove from a tire but Bridgestone and Dow’s sealant, called B-SEALS, is silicon based and easier to get out. It’s also recyclable and more environmentally friendly. Nearly one-third of new cars sold in the U.S. aren’t equipped with a spare tire, so demand for technology like this is only expected to grow in the future.
LAMBORGHINI HELPS UKRAINIAN SUPPLIER
Lamborghini has been directly impacted by Russia’s invasion of Ukraine because Lambo gets the wiring harnesses for the Huracan from western Ukraine. And production of those harnesses gets interrupted when workers have to run into bomb shelters. But instead of resourcing those harnesses to other suppliers, Lamborghini adopted a dual production strategy, where its supplier Leoni is duplicating that work outside of the war zone, though Lambo is deliberately vague as to where that may be. Lamborghini’s head of purchasing, Silvano Michieli, says they want to stick with their existing suppliers who have sacrificed so much to keep production going.
BMW INVESTS IN E-DRIVE MANUFACTURING…
BMW is converting one of its engine plants to make EV components. The automaker’s factory in Steyr, Austria will produce 600,000 e-drives annually starting in 2025. The site will also develop the e-drives. The move is part of a $1 billion investment through 2030 BMW is making in e-drives.
…AND AUTONOMOUS FORKLIFTS
And speaking of BMW and manufacturing, the automaker is testing self-driving forklifts at one of its supply centers. The forklifts are equipped with cameras to help them maneuver but they’re not installed with processors or hardware to determine where to go. Instead, the calculations are performed by a data-cloud using 5G technology, which allows for real-time connectivity between the machine and equipment. The autonomous forklifts are being used to load and unload trucks at the plant. The goal of the project is to help improve BMW’s logistic system.
But that brings us to the end of today’s show. Thanks for tuning in.
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Comments (29)
June 20th, 2022 at 12:10 pm
I saw a gorgeous vintage Porsche yesterday. It was white. I almost cried.
June 20th, 2022 at 12:13 pm
The feeling is mutual, CCP
June 20th, 2022 at 12:13 pm
The feeling is mutual, CCP
June 20th, 2022 at 12:14 pm
And we trust our phones and computers to be made in China.
June 20th, 2022 at 12:22 pm
EV backlog is so huge, the EV prices have followed the demand. Worse, many EV makers (not Tesla) failed to realize that demand would drive up their supplier prices. They failed to plan for it. Their poor planning and high gas prices … I am not terribly sympathetic.
I bought my 2019 Tesla Model 3 for $24,000 with trade-in of my last Toyota, a Prius Prime. Toyota has nothing that appeals to me.
June 20th, 2022 at 12:26 pm
Cudos to Lamborghini on their harness purchase support for Ukraine.
The auto industry will be hybrid for a long time; meaning multi-fueled using many fuels until one, two or three become the go-to sources. I see gasoline holding on for some time to come, same with diesel with electric eventually making significant inroads but not nearly as quickly as predicted (and pushed). Hydrogen has a long way to go but shows promise (remember hydrogen has been touted as the fuel of the future and remains so; indeterminant still). E-fuels maybe, but the big distractor is cost.
June 20th, 2022 at 12:31 pm
1 Silver is a very “classic” (non)color for Porsches.
June 20th, 2022 at 12:38 pm
We recently shared that the upcoming 2023 Chevrolet Bolt EV and Bolt EUV would arrive with much lower starting prices. Now, we’ve learned from CarsDirect that Chevy is already offering comparable discounts on the 2022 model. In fact, the publication says the Bolt family of EVs is now seeing discounts that exceed 1,100 percent. According to the publication, starting on June 8, 2022 Bolt EV hatchbacks became available with a $5,900 rebate. Meanwhile, based on the latest incentives, the Bolt EUV crossover sees a $6,300 price cut. The current promotions are valid through July 5, 2022. Chevrolet has almost always provided compelling incentives on the Bolt EV, but nothing quite like what we’re seeing today. It all seems to coincide with GM CEO Mary Barra’s promise that the automaker is working to offer cheaper electric vehicles. Prior to the upcoming value-priced models arriving, such as the Equinox EV, GM is already proving that it’s willing to offer incredible discounts. While you’ll probably have a difficult time tracking down a “new” 2021 Bolt EV, it’s certainly worth considering. Electrek.co
June 20th, 2022 at 12:40 pm
The amount of renewable electrical energy(250kWh) you would need to fill the tank in the Toyota Miria hydrogen car (~350 miles range) could be used to recharge an electric car multiple time (more than 1000 miles range). Volvo, Toyota, Mercedes Benz, and Nikola, and others can test all they want, but hydrogen will NOT become a viable fuel source until someone comes up with a much more efficient method of mass producing it.
Then there is the problem of Hydrogen that leaks to the atmosphere is such a potent greenhouse gas because it extends the lifetime of methane in the atmosphere, causing it to stick around and continue contributing to the greenhouse effect.
So don’t hold your breath that these issues will be solved anything soon.
June 20th, 2022 at 12:46 pm
The Chinese restrictions with Tesla cars are probably a tit-for-tat for the US banning Huawei, and maybe other Chinese brands in the country.
Between 2010 and 2020, LiPo batteries dropped in cost to about 1/9 the 2010 price. Predictions of that trend continuing were premature, though, as the raw materials have become a major cost driver, even as battery manufacturing continues to become more efficient.
June 20th, 2022 at 12:51 pm
@10 Kit, LiPo batteries? I just looked it up: Po is Polonium, the material used by Russian agents to poison/murder adversaries. Did you mean something else?
June 20th, 2022 at 12:51 pm
5. Don’t place the blame on the auto manufactures, blame world government mandates with unrealistic timelines forcing manufactures rush EV’s to market when Hybrids would be better choice right now. Hybrids and plug in hybrids have much smaller batteries which would allow the limited supply of Lithium, nickel, cobalt, etc. to be spread over many more vehicles.
June 20th, 2022 at 12:53 pm
@12 and those PHEVs have ranges which are sufficient for daily use of many people.
June 20th, 2022 at 1:14 pm
@13, Don’t want to put any words in Kit’s mouth; but perhaps LiFePO4 Lithium iron phosphate battery.
June 20th, 2022 at 1:23 pm
5, 12 and 13 – I’m on the market now for something fuel efficient to replace a Cadillac xt5, and can say that outside of Prius automakers are not prioritizing hybrids in their lineups. Lexus hybrid requires premium fuel, whereas non hybrids get by with standard fuel. This precedes inventory shortages too, it was practically impossible to find hybrids in stock (except Prius) before this current crunch. I looked at Honda, Lincoln, Lexus, Hyundai and Chrysler. It was deliberate.
Tesla is super expensive, but still at $65k the model Y has something the lyric, lightning, Mach E and others don’t: no markup. Would you pay $65k for a model Y or $60k for an Ionic? Or Mach E? That’s the math Tesla does as they are raking in markups to themselves with raised prices, they are exercising current market price. Either way once inventories come back to earth those of us who buys now will all loose in residual value.
June 20th, 2022 at 1:29 pm
11 I meant lithium-polymer, though that might be obsolete terminology. A polonium battery might have high energy density, like a nuclear reactor or bomb.
June 20th, 2022 at 1:34 pm
Hey Sean I think the US government should ban all Chinese manufactured cars from Washington DC at least, possibly the entire US! This BS is obviously pushing back because Tesla is doing so well in China.
What a bunch of sore sports, we shouldn’t be so accepting of this BS.
June 20th, 2022 at 1:38 pm
15 I got a Highlander hybrid a few months ago, and it works great, for what it is. It gets 33+ mpg going fast on the interstate, pretty good, but most impressive, I’m getting 38-39 mpg in mixed short trip and lower speed driving, and it has 7 feet of floor length for transporting my toy airplanes. Power is adequate, with published 0-60 times of 7.5-8 seconds.
I have the bottom trim level hybrid, LE, but the top trim level Highlander interiors are probably as nice as your XT5. The XT5 looks better, though. I checked to see what a couple dealers had coming in, and pre-bought one that was close to what I wanted.
June 20th, 2022 at 2:16 pm
17 If the US banned Buicks and Volvos from China, a likely result would be China banning BMWs and Benzes from the US. There would be no winners.
June 20th, 2022 at 2:38 pm
Thanks Kit, I never considered a Highlander. I see it uses reg gas and it’s rated 35/36MPG. I also like that our local Lexus dealer isn’t charging markups, perhaps Toyota won’t as well. I’m also disappointed with Tesla, can’t see myself driving a car that will associate myself with that numb nuts CEO, I might as well just give up my spot in line for the Y and save $20k.
June 20th, 2022 at 3:17 pm
The Highlander is “boring,” but it gets great mpg for the amount of room it has, and it has had no problems so far, at about 4 months and 4K miles.
June 20th, 2022 at 3:23 pm
@15 I often see Lincoln commercials on tv and the lady driving it always plugs it in at the end of the commercial. Have you looked at Lincoln?
June 20th, 2022 at 3:26 pm
@19 during the trade war with China the administration put import tariffs on Chinese vehicles, and China returned t favor. BMW, which was at that moment the largest vehicle exporter from the U.S., had to move most of the X5 production from the Spartanburg plant to China. I believe the same happened to Mercedes production in Alabama. Does anybody know whether my recollection is correct?
June 20th, 2022 at 3:39 pm
23 I remember that happening. I don’t know if anything has been reversed, but once production was set up in China, it probably stayed there.
June 20th, 2022 at 3:45 pm
With increasing interest rates and the upcoming recession, electric cars will quickly go from being supply constrained to demand constrained in the coming year. That’s why Musk has sold over 30B in Tesla shares and has already announced that he will get rid of 10% of his workforce.
65% increase in the price of the Model Y surely contributes to Tesla having the highest profit margin in the industry.
June 20th, 2022 at 3:49 pm
22 There are plug-in hybrid versions of Aviator, like Explorer, and Corsair, like Escape. The Aviator plug-in hybrid is fast, but pricey, and thirsty, once the plug-in juice is gone. The Corsair plug-in hybrid has a good 33 mpg combined rating on gas, and has 28 mile battery range, if driven gently. The Corsair is much smaller than Aviator or Highlander.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=44497&id=44716&id=44934&id=44685
I showed the AWD Highlander for comparison, but the FWD version, which I have, has 1 mpg better ratings.
June 20th, 2022 at 3:57 pm
25 The huge price increases would keep me from buying a Tesla, even if in the market for an EV. The cheapest Model 3, with RWD and 267 mile range is $47K, and the most popular version, the dual motor Long Range is $58K. Estimated delivery is still Sep-Dec 2022, so I understand the big price increases. If estimated delivery changes to “tomorrow,” I suspect the prices will come down.
June 20th, 2022 at 8:40 pm
Kit, the fords and lincolns hybrids are vaporware, not available and when they are dealers want a large markup. A shame.
June 20th, 2022 at 9:13 pm
28 Tnx for info.