AD #3519 – Tesla To Kill 12V Systems; GM Axes ICE Engine Program; China To Become #1 In Car Exports
March 6th, 2023 at 11:57am
Listen to “AD #3519 – Tesla To Kill 12V Systems; GM Axes ICE Engine Program; China To Become #1 In Car Exports” on Spreaker.
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Runtime: 11:20
0:08 Higher Interest Rates Will Hurt Car Sales
0:56 VW Group Sells Fewer Cars, Posts Higher Profits
2:02 China to Become #1 In Car Exports
3:51 GM Axes ICE Engine Program
4:47 Honda Building Stationary Fuel Cells
5:52 Tesla to Kill 12V Systems
8:25 Tesla Cuts Model S & X Price
9:15 Scout Chooses South Carolina For Plant
9:55 Give Your Mercedes The Finger(Print)
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HIGHER INTEREST RATES WILL HURT CAR SALES
The Federal Reserve in the U.S. is trying to stomp down on inflation by raising interest rates. But the Wall Street Journal reports that’s also hurting the manufacturing sector. Orders and exports for manufactured goods are down, and car sales could be next on the list. Higher interest rates make it harder for people with lower credit scores to get a car loan. And it raises the costs of those loans and lease rates, too. So just as the auto industry is starting to emerge from the chip shortage and put Covid lockdowns behind it, it’s getting hit with another crisis. In fact, we’re hearing a new word come into the automotive vocabulary: perma-crisis. It seems like this industry is just in a permanent crisis mode.
VW GROUP SELLS FEWER CARS, POSTS HIGHER PROFITS
The Volkswagen Group reported its earnings for last year and like every other automaker, it’s benefitting from raising prices and selling higher priced vehicles. But it also seemed to struggle to deliver cars to customers. The group, including VW, Audi, Seat, Skoda, Porsche and Lamborghini built 8.7 million vehicles last year. It sold 8.4 million. But it only delivered 8.2 million to customers. Financially, that didn’t hurt the company since automakers count a vehicle as sold as soon as it rolls off the assembly line. And that extra production sure showed up in the financial results. VW brought in €279 billion in revenue, up 12%. It posted an operating profit of €22 billion up 13% and a net profit of nearly €16 billion, up 2.6%. Last year the group sold 572,000 EVs, up 26% from the year before.
CHINA TO BECOME #1 IN CAR EXPORTS
We’ve got some interesting stats on the Chinese car market. There is so much excess manufacturing capacity in China that it’s ramping up exports to sell those excess cars in other countries. Last year China surpassed South Korea in car exports, it will surpass Germany this year and will likely surpass #1 Japan at some point in the future. Last year, 80% of the EVs sold in China were Chinese brands. Tesla accounted for another 15%, which means all the other foreign brands are fighting for only 5% of the EV market there. China is also exporting EVs and has one clear advantage, delivery times. In Europe, automakers typically take 6 months to two years to deliver EVs to customers but BYD does it in just a matter of days. The Wall Street Journal reports that in Australia, one customer was told he had to wait 8 months for a Tesla Model 3. So he bought a BYD Atto instead, got it faster and paid $23,000 less than what the Tesla cost.
GM AXES ICE ENGINE PROGRAM
GM might be spending a bunch of money on a new V8 engine for trucks and SUVs, but it’s giving up on another engine program. GM Authority reports that the automaker canceled a new twin-turbo inline 6-cylinder engine it was working on. That unit was rumored to be derived from GM’s 2.7L turbo-4, but with two more cylinders would have made around 500 horsepower and found its way into full-size trucks and SUVs. It doesn’t give a reason for the engine axing, but it was part of a program that wanted to optimize engine development and production through economies of scale. Maybe it felt like it wasn’t going to get that scale or it could have been investment needed for other programs? So, GM will use that new V8 and probably refine other engines to power its future full-size trucks and SUVs.
HONDA BUILDING STATIONARY FUEL CELLS
Honda is reportedly going to create a new subsidiary next month that will oversee the development of its EVs and batteries, but it thinks ICEs and eventually fuel cells will continue to share the market with battery electrics. And it just started operating its first stationary fuel cell power unit at its corporate campus in California. Each cube holds 4 fuel cell units, which for the tests come from previously leased Clarity fuel cell vehicles, and each cube generates nearly 290 kW of power. Honda is using two cubes for the test, but also says they can be arranged in L-, Z-shaped or other configurations. Future units will use the next-gen system it developed with GM, which will also power a CR-V in 2024, and they’ll be applied to other manufacturing facilities and data centers to offset costs during peak power demand as well as act as backup power generators.
TESLA TO KILL 12V SYSTEMS
Tesla has changed a lot of things in the auto industry and the next one on the list could be the voltage used in cars. In the first half of the 20th century cars ran on 6 volt systems, but as more electric accessories were added, cars in the US started switching to 12 volts in the mid-1950s. Engineers dreamed of going to 48 volts for decades, but they never could do it because OEMs and their suppliers had invested so much in 12 volt components. But starting with the Cybertruck, Tesla is going to 48 volts. Here’s what engineers Pete Banon and David Lau had to say at Tesla’s Investor Day last week.
(The Tesla Investor Day soundbite is only in the video version of today’s show.)
And so the Cybertruck could mark the beginning of the end of 12 volt systems.
TESLA CUTS S & X PRICE
Elon Musk said one of the big things holding customers back from buying a Tesla is being able to pay for one. And so Tesla is once again cutting prices in the U.S. This time it’s the Model S and X. The base version of the Model S is now just under $90,000 and the Plaid version is just under $110,000. That’s a $5,000 price cut for both. And the Model X’s base price has been slashed by 9% and now costs just under $100,000 while the Plaid variant is $110,000, an 8% drop. Tesla has cut prices on all of its models since the beginning of the year in order to boost demand. And it’s worked. The cuts have helped increase sales.
SCOUT CHOOSES SOUTH CAROLINA FOR PLANT
Scout Motors, Volkswagen’s new off-road EV brand, is ready to spend big to get back in the market. It’s going to build a brand new $2 billion assembly plant near Columbia, South Carolina. Construction will start in the middle of the year and production is expected to kick-off by the end of 2026, with an annual production capacity of 200,000 vehicles. It’ll be interesting to see how this goes. Tesla is going to start building an assembly plant in Mexico and so the race is on to see who can be the first to start rolling cars off the line.
GIVE YOUR MERCEDES THE FINGER(PRINT)
Mercedes is making it as easy to pay for gas as it is to open your phone. Customers in Germany are now able to make in-car payments with their fingerprint. Owners of the S-Class, EQS, EQE, GLC and C-Class can buy digital services as well as upgrade in-car convenience and technology features with fingerprint authentication. Later this year that will include paying for gas and the service will expand to other European markets. It’s easy to see why Mercedes is making in-car payments so easy. In its own press release it cites a study that says these services are expected to generate a transaction volume of 4.7 billion by 2026, and over the next five years, 48% of all in-car transactions will be people paying for gas.
But that brings us to the end of today’s show. Thanks for making Autoline a part of your day.
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Comments (36)
March 6th, 2023 at 12:05 pm
zero sense for GM to drop the inline 6 program. should be an inline 5 and 6 cylinder based on the 2.7L inline 4.
March 6th, 2023 at 12:17 pm
… if volume of components produced is the controlling factor in cost, why not jump right to 120 volt from 12 volt and use ‘house voltage’ component producers?
March 6th, 2023 at 12:20 pm
.. I have to believe that Tesla’s solar cell and Power Wall businesses already have contacts with the right companies.
March 6th, 2023 at 12:25 pm
@2 48 volts DC is still considered “low voltage” from a safety aspect. Moving to 120v would trigger added safety requirements for the wiring. Among other things, it would probably require dedicated ground wires instead of chassis ground in order to keep people isolated from the conductors.
March 6th, 2023 at 12:27 pm
I must be illiterate when it comes to the economy. I have no idea how they think raising interest rates will help with inflation. Everything cost more so raise the percentage rate to borrow making that cost more too???? I fail to see how that helps.
Suprised to hear GM axing any engine programs when three years ago they rolled out their all EV plan and said they had no new ICE engines in development. I guess they did. Too bad its axed cause thats the kind of engine they will need when they realize EVs dont work real well for those trucks that tow.
March 6th, 2023 at 12:38 pm
@5 – No, you are not illiterate on this topic. Our government is punishing the consumer/private sector for the excess spending from the government/public sector.
March 6th, 2023 at 12:46 pm
1 I like inline six engines, but GM probably noticed that Chrysler’s new turbo six doesn’t have enough advantage over a much simpler pushrod V8 to spend the billions to develop it. The Chrysler engine does have some advantage, ~12% better EPA combined mileage in a Jeep Wagoneer than the the 5.7 mild hybrid.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=45847&id=46241
March 6th, 2023 at 12:51 pm
Been expecting 48V for over 20 years been just around the corner. What happened?? Chicken & egg thing. Now that Tesla is going 48V with their own in house battery [low voltage] and needing 48V electrical bits and bobs now for car in the millions run rate other OEMs will be able to buy those 48V bits off the shelf so we should start seeing them in ICE vehicles 2025?
March 6th, 2023 at 12:55 pm
5,6 Higher interest rates have been used to reduce inflation for decades, going back at least as far as fed chair Alan Greenspan in the ’90s.
March 6th, 2023 at 1:04 pm
There’s really only two tools the government have to help reduce inflation; stop printing excessive money and raising interest rates. When an economy is working well, the government isn’t too tempted to print more money. That’s how it’s been for the last generation.
But with the pandemic and all the supports that government provided came along, the need and temptation was too great.
Then you have the IRA which needs to be funded.
There’s no free lunch. All we can hope for is that the programs are worth the hangover afterward.
March 6th, 2023 at 1:07 pm
9 That may be, and have a long history of being the reason. Question is why and how does it work. Cause its seems counterintuitive to me.
March 6th, 2023 at 1:08 pm
8 Most electronics is now very low voltage, so what is the point of 48v in a BEV? An EV doesn’t have a cranking motor, where higher voltage would allow smaller wiring than with 12v. They probably use the full voltage of the traction battery for A/C, etc. Is 48v a good thing for LED headlights, or something like that. My newest laptop uses a single cell battery, so a lot of the “infotainment” stuff in cars is probably also single digit voltage.
March 6th, 2023 at 1:10 pm
I am pleased to see Tesla taking a leadership role in 48 volts. It’s time the auto industry updated the low voltage systems.
Reminds me a bit of Apple – cd replace floppy disk, software over internet not disks, no earphone jack on phones, etc.. Not all winners but changes that sooner than later competitors copy.
March 6th, 2023 at 1:11 pm
11 Higher interest rates make people buy less stuff, reducing high demand which runs up prices.
March 6th, 2023 at 1:13 pm
13 I’ll search around and see what I can find about advantages of 48v for “accessories” in an EV. Higher voltage has obvious benefits for car with ICEs to crank, and it makes sense for mild hybrids, but I’m missing something to see the point for a BEV.
March 6th, 2023 at 1:15 pm
13 Apple was also a leader in making phone batteries very hard to replace. It’s good for packaging, though, to get a bigger battery in the same size device.
March 6th, 2023 at 1:17 pm
Raising interest rates slow the purchasing of goods and services. Things are more expensive. People feel poorer. The economy slows, there’s not the same pressure for wage hikes, manufacturers want to sell products and their costs have stopped rising so quickly so they lower prices and things become more affordable or rather the prices don’t continue to increase at a rapid rate.
March 6th, 2023 at 1:36 pm
14, 17 Okay that makes sense. Raise interest so people spend less lowering demand and hence lowering prices. I just figured the higher prices had to be lowering demand already. But this will certainly slow the sales on big ticket items that are financed like cars and homes. I just dont see it doing much for helping the cost of our everyday items like groceries, gas and utilities.
March 6th, 2023 at 1:37 pm
7 to me theres not a V8 on the planet makes sense in 2023 or beyond. when you can do the same with turbo charged 4,5,6 cylinder engines. for pretty much any car a turbo charged 3 cylinder will do. just look at the 1.5L 3 cylinder in the 2023 nissan rogue for example.
March 6th, 2023 at 1:40 pm
Maybe the point of 48v for a BEV, is so they can use 20 gauge wire for window motors, HVAC fans, etc. rather than 14 gauge, or whatever has been used.
March 6th, 2023 at 1:43 pm
im sure the H.O. inline 6 from stellantis would be plenty enough power for the ram trx.
March 6th, 2023 at 1:53 pm
@18 Interesting question you wrote: ” I just dont see it doing much for helping the cost of our everyday items like groceries, gas and utilities.” I would love to see the replies, too.
March 6th, 2023 at 2:16 pm
@ #12 Most LEDs run at 2-3 Volts so they’d have to step them down even further if they were 48V . What are the advantages of the higher volt system? Most auto instruments need to be stepped down from 12 V . So what is the upside of this change.? Seems like change for change’s sake. If isn’t broke don’t fix it.
March 6th, 2023 at 2:35 pm
23 Years, or decades ago there was talk of going to 48v so they could save copper, using maybe 14 gauge battery cable instead of the usual 6 gauge. Maybe they decided then that 24 cell batteries were not such a great idea, for manufacturing cost and reliability, and it wouldn’t make sense to need to regulate down to lower voltage for radios, etc. I remember when cars went from 6 to 12 volts and there was concern that the 12 volt headlights and other bulbs wouldn’t take the vibration as well as 6 volt bulbs with thicker filaments, but that didn’t turn out to be a big problem.
Maybe John and Gary can have someone from Tesla on AAH to explain reasons to use 48v for BEVs. It must be more than to save a little copper on the wiring for fan, window, and seat motors.
March 6th, 2023 at 3:24 pm
24 Not sure if you just read the transcript or watched the video but the clip from AAH Pete Banon and David Lau discussed the advantages to going to 48V for even an EV.
Basically, the vehicles have so many electronics now with all the sensors, cameras and options that the increase to 48V reduces current by a factor of 4 and factor of 16 for a reduction in loss current from wire resistance. So, it’s all an effort to get as much power as possible out of the batteries I’d say.
March 6th, 2023 at 3:29 pm
15,20, You got it right. Ohm’s law, with higher voltage you can run lower current, which you can run smaller gauge wire for the same power (wattage). Still, I question the need for 48 volt architecture in an EV because the high voltage that run the motors and controllers are still going to need a heavy gauge wire to supply the power. Peripherals will be less, noting your starting battery reference, where supporting electronics shouldn’t need a 48 volt power base.
March 6th, 2023 at 3:35 pm
25 Apparently regulating 48 volts down to what is actually needed for individual sensors, etc. is almost free. I just read the transcript. It looks like I need to watch the video.
March 6th, 2023 at 3:43 pm
The biggest advantage with higher voltage I believe is the saving in the weight of the vehicle harness. As vehicles get more complex, there’s more wire being run. One solution has been to increase the number of semiconductor chips and distributing them around the vehicle, but Tesla has shown there is a better way. When you have high power draw for things like quick opening tailgates on SUVs, electric steering and start/stop systems, that’s a lot of thick wires. I’ve read where 25% of the weight of the wiring harness could be saved. The harness now weighs 100 to 120 lbs so it’s a big deal.
March 6th, 2023 at 3:54 pm
28 Yeah, higher voltage would be great for electric power steering, which is normally 12v, and would pull lots of current at times. I think electric A/C in EVs and hybrids normally uses the 200+ volts of the traction battery.
Will Tesla have a separate 48 volt battery for the “accessories,” or will they tap into, or regulate down from the big battery?
March 6th, 2023 at 4:22 pm
Don’t forget about all of those newly heated surfaces in EVs to keep us warm in the snow belt!
March 6th, 2023 at 4:52 pm
#28.) After reading what everyone is saying about the benefits of the customer 48V system Tesla engineers speak about, sounds good, but there has to be more to using it. If the wiring harness wiring harness weighs about 100-to-120 lbs, even at half that weight, your not saving that much in the weight of the vehicle. I know every little bit helps, but if the weather 48V system costs more and the overall weight is mostly the same, how is that better? I’m a little lost at how this makes things a better choice, but would appreciate someone explaining it to me.
Wow, I did not realize how much cheaper the Model S was in a relationship to the Lucid Air and its variations! One could buy a Model S Plaid, for almost half the price of an Air Dream addition. While the Lucid sapphire may be the new BEV King of the Hill, one could almost buy two Plaids, for the amount you would pay for one of them AND use use a Tesla Supercharger!
March 6th, 2023 at 5:13 pm
31 The cheapest Lucid costs $87,400, but it is single motor RWD, and wouldn’t be as quick as a “base” Model S. Lucid seems to have some good stuff, but I don’t see how they keep going long term, unless the crown prince wants to keep contributing lots of money for a while.
March 7th, 2023 at 5:47 am
#32.) I understand stand that, but I’m a little surprised that the stretch between the Model S’s base version and Plaid, is now about $20-to-30K with options, after the new price reductions, while the Air is close to $130K! The Air is billed as a true luxury vehicle, while Teslas are expensive, premium vehicles and there is a great difference in the price of the Plaid and Sapphire, but not as big a jump in overall performance, power and range! While each vehicle is well beyond my pay grade, the Plaid is clearly looking even more like a value purchase, compared to the Sapphire, IMHO.
March 7th, 2023 at 7:32 am
31 I would guess that the 48V savings today is not exactly what Tesla is after. I actually believe they are being unlike the traditional automakers in that they are actually thinking ahead. As GM vet stated it seems that heated surfaces seem’s to be a more efficient way to keep occupants warm so the gauge wire needed for a heated arm, rest seat, steering wheel, headrest, front and rear passengers could be a much bigger savings than what is being done today. Then add in all the high draw servo motors now that assist in autonomy.
to drive steering, braking. I believe the Cybertruck has a power bed cover and power liftgate. So maybe it’s a bit more planning for the future than the actual weight or cost savings that we would see today.
One things Tesla does do well is look for ways to do things more efficiently than anyone else. Which will put them in a position to be able to do things cheaper than the competition. This will force others to follow or get left behind. This was the same for the “mega-casting and I suspect the 48V system will be the same.
It’s not super innovative or like others have not already mentioned the benefits. But Tesla is willing to make the leap and I think with EVs and what’s coming it will likely make even more sense in future models.
March 7th, 2023 at 9:17 am
31) I didn’t realize that the Model S ballooned to a base price of $90K. It certainly is not worth $90K. With the level of luxury it does not have, the Model S is a $55K car at best, and that is being generous.
March 7th, 2023 at 9:20 am
Sure would like to see AD cover some more ICE vehicles like this. https://www.hotcars.com/2023-dodge-hornet-tips-before-buying/?utm_source=syndication#multiple-trims-to-fit-your-needs
Maybe they have and I missed it but this seems like a pretty nice entry into the CUV market.