AD #1373 – Tesla Still Losing Money, GM Rehires Ex PR Chief, Upgraded OnStar Runs on 4G LTE

May 8th, 2014 at 11:51am

Runtime: 9:20

- Tesla Still Losing Money
- GM Rehires Former PR Chief
- GM’s OnStar 4G LTE Connection
- CNG Impala Pricing Announced
- Citroen Hires Female CEO
- PSA’s China Plan
- You Said It!

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Hello and welcome to Autoline Daily.

TESLA STILL LOSING MONEY
‘Tis the season for financial earnings and today it’s Tesla’s turn. The company sold just under 6,500 Model S’s for the first quarter, up 32% from a year ago. But despite that big jump in sales the company’s revenues only went up 10%, to $620 million. Last year Tesla had a big wad of EV credits to sell. This year it did not have any, as those credits are slowly being phased out. Yet it did earn $15 million from Toyota, related to its efforts with Toyota’s electric RAV-4. Tesla posted a net loss of nearly $50 million. But that could improve in the second quarter as the company starts to earn income from selling its EV system to Mercedes-Benz in its B-class electric.

GM REHIRES FORMER PR CHIEF
OMG, he’s back. General Motors has turned to a familiar face to help it recover from its ignition switch fiasco. The company has just hired, or I should say re-hired, its former PR chief, Steve Harris. He originally retired from the company in 2003, was brought back in 2006, retired again in 2009 and now he’s joining GM for a third go around. In addition to his time at GM, Harris has also worked at American Motors, Chrysler and most recently was doing consulting work with Volkswagen and Ford. And in my opinion, Steve Harris is one of the best PR gurus of all time.

GM 4G LTE
General Motors is giving its customers easier access to the Internet and I don’t mean sitting in your local dealership. This spring the company has started integrating 4G LTE into some 30 models to start, with more cars, trucks and SUVs to follow. It works through an upgraded version of its OnStar system running on the AT&T network. So just like at your home or office, once you initiate the hot spot the car becomes a hub that allows you to connect a smart phone, tablet or laptop for everything from entertainment to even emergencies.

Stuart Fowle
Assistant Mgr., Communications
Global Connected Customer and OnStar

“We see a lot of different uses for it based on the customer, so someone who owns a pickup truck and works in construction it’ll work up to about 50 feet around the vehicle so you can have it in a job site pull up laptop on the tailgate and send an invoice from there. Families obviously have a lot of use for it just in terms of entertainment. I was talking to a guy in Texas the other day who said you know I think this is a real job opportunity for hurricane preparedness. If the electricity goes down in the whole city you can walk out to your OnStar-equipped GM vehicle and turn on your 4G hotspot and be the only Internet connected person on the block.”

Even though 4G LTE will come standard in every GM vehicle, like OnStar it’s not free, and right now it only works with your personal devices and is not hooked into any of the vehicle’s entertainment systems. But fear not, GM says its working on that connection as well.

CHEVY ANNOUNCES CNG IMPALA PRICING
Last year, General Motors announced that it’s introducing a version of the Impala that can run on both gasoline and CNG. And now we know how much it will cost. The bi-fuel Impala will have a starting price just over $38,000 when it hits dealers later this year. The company says EPA ratings are still being finalized but estimates it will have a total range of 500 miles and expects about 150 city miles of range when it’s running on CNG. The bi-fuel Impala will use CNG as its primary fuel source and then can automatically switch to gasoline once the CNG runs dry. Or if drivers want, they can push a button to switch between the two fuels. The bi-fuel Impala is about a $10,000 premium over the standard base Impala.

A SIGN OF THINGS TO COME?
Mary Barra is obviously the first woman CEO for a major automaker, but now PSA has announced that 55-year old Linda Jackson will take over as chief of the Citroen brand in June. Jackson is currently the Managing Director of the brand in the UK and Ireland and has over 35 years of experience in the automotive industry. With Barra and now Jackson being named CEOs, maybe this is a sign of things to come.

PSA’s PLANS FOR CHINA
And speaking of PSA, it just announced its plans for the Chinese market. The automaker along with its joint venture partner Dongfeng plan to introduce 14 new vehicles to the market with 6 of them being all-new. It also plans to introduce the DS brand there as well. The changes will take place between now and 2018.

Coming up next, it’s time for You Said It.

Ricky Beggs wants to know, “With the comments about a new GM racing center, just wondering what that means to the existing relationship GM has with the Pratt Miller group?” Ricky, our understanding is that the GM racing center is going to focus on building engines, while Pratt & Miller actually build the Corvette racing cars and run the races. They have been so successful that I think it would be entirely unlikely that GM would bring all that in-house.

C-Tech saw our trivia quiz about the Autoline Oil sign and the fact that the Autoline name was first trademarked in 1905. “John will you be hearing from a lawyer about copyright infringement soon or have you already bought the rights to the Autoline name?” C-Tech, fortunately we trademarked the Autoline name quite a few years ago with the U.S. Patent and Trademark Office. Turns out, as long as companies are involved in completely different lines of business they can trademark the same name. Of course, it really helped us that the Autoline Oil Company went out of business a long time ago.

Dwayne Lawrence wants to know, “Why isn’t anyone going after the oil companies, demanding that they play a role in efficiency and make their fuels emit less CO2 when burned?” Dwayne, you should lead the charge on that because it’s a top notch idea and one that would immediately improve the emissions of every vehicle out there, rather than have us waiting around for the next twenty years to get the dirtier cars off the road.

Eduardo Guerrero Says, “John, great to see F1 content on the show. As you mentioned the Mercedes engine has an advantage over Renault and Ferrari so far this year, did you know part of it is because they actually split the turbo in two? The turbine side is still located at the rear of the engine, but the compressor is located at the front of the engine connected by a shaft. Pretty innovative stuff!” Thanks Eduardo, I wasn’t aware of that and I’ve got to tell you all I love learning things from you, our viewers.

T. Bejma watch last week’s Autoline After Hours with car salesman Jim Dollinger, who also calls himself Buickman. “Even though I think Buickman has some good ideas, you have to wonder, if they were that good, somebody other than GM would have picked them up. It’s not like they are GM specific. John Mc – any comment?” My comment is this. I don’t know any top car company executive today who ever sold cars for a living. Not one of them. So, when someone who has sold more Buicks than anyone else in history says he has a plan to boost sales, I would pay attention. I’d at least pick my worst sales territory in the country and do a pilot test of Dollinger’s ideas to see if they work. My gut feel tells me Dollinger is really onto something.

Speaking of After Hours, join me and Gary Vasilash tonight starting at 6PM eastern time for some of the best insider information in the business. Tonight our guests are the Gutierrez brothers of drag racing fame and they’ll have their car in the studio with them. It’s going to be a fun show.

So until then, this is John McElroy, signing off.

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13 Comments to “AD #1373 – Tesla Still Losing Money, GM Rehires Ex PR Chief, Upgraded OnStar Runs on 4G LTE”

  1. Mike Says:

    John,

    Okay a $10K premium for the LNG Impala. What numbers are they using for payback? Does it look like a 1 or 2 year return on fuel savings? What is the loss of functionality? Can you still put things into the trunk?

  2. Kit Says:

    1, From GM media:

    “… an approximately eight gasoline-gallon-equivalent CNG tank mounted in the Impala’s trunk is expected to provide up to 150 miles of vehicle range for a total range of up to 500 miles.”

    That will take up a lot of the trunk, just as the CNG Civic loses most of its trunk. Also, it will take a long time to save enough on fuel to offset that $10K purchase price.

  3. MJB Says:

    Unrelated to today’s discussion, but interesting nonetheless: http://www.wired.co.uk/news/archive/2014-05/08/f1-steering-wheel

  4. Mike Says:

    #2, I’ve heard numbers like 1-2 years for CNG semis but more like a 10 year payback for passenger vehicles. Not sure the 10 year number applies to the Impala. If those numbers are correct, it might be reasonable to expect the Impala to really not have much of a future. People do vote with their pocketbooks and that is not a good enough payback..

  5. G.A.Branigan Says:

    If one is doing mostly in city/town driving,maybe the cng option is okay,but those interested should find out if cng is even available in their area.While they’re at it,if they plan on doing some road trips,they might want to check the route they will take for cng outlets.Or,if they need excellent mpg for both city and hwy….get a diesel and stop worrying.

  6. Kit Gerhart Says:

    5,
    Road trips are no problem with the CNG Impala, since it also runs on gasoline. The CNG-only Civic is clearly a “city car.”

    Still, not many people are going to ever recoup that $10K, even if they do all of their driving on CNG.

  7. Ron Jones Says:

    A sign of things to come !FORD of CANADA hae had a lady CEO sincenov. 1/11her name is Dianne Craig !

  8. Brett Says:

    I’d guess that the CNG Impala is aimed at fleet sales, not John Q. Public.

  9. Kit Gerhart Says:

    If you have gas plumbed to your home, you can get a home refueling setup, but that would add a few thousand more dollars to the $10K extra for the dual fuel Impala, or ~$5K extra for a Civic GX. The Civic comes with range anxiety, running only on CNG. The price for refueling systems could come down substantially, though, according to this article.

    http://www.reuters.com/article/2013/10/04/us-naturalgas-home-refueling-insight-idUSBRE9930D120131004

  10. gary susie Says:

    John i saw Frank on american pickers buy a autoline oil can. It would look good on your shelf.

  11. Chuck Grenci Says:

    I saw that too Gary; yeah John, that would look cool on the set.

  12. marshy Says:

    These GM guys talking about in car hot spotting…who are they kidding?

    Every mobile contractor already has a hot spot on their smart phone. Remind me again why I would buy a hot spot plan for my one vehicle that I can’t use in my second? Or in the hotel, air port or park?!?

    Btw – from first hand experience, a five day car drive with my daughter and her ipad racked up 5 GB of data through intermittent use. If GM is selling this as a plan, it better come with decent data allowances as the about the only thing people do in cars with wifi is Netflix and YouTube.

  13. kiwi Says:

    Hurricane preparedness??? Seriously??? “If the electricity goes down in the whole city…” then I’m guessing that the 4G network will go down too. John, do cell phone towers have backup power generators? I’m guessing not.