AD #2406 – Tesla No Longer a Niche Player, GM Seeks Envision Tariff Exemption, Trump Proposes MPG Rollback
August 3rd, 2018 at 11:40am
Runtime: 9:12
0:31 Trump Proposes to Rollback Fuel Economy Rules
1:33 No End in Sight for Passenger Car Decline
2:03 Tesla No Longer a Niche Player
2:37 Ford Uses Motion Capture to Improve Production
3:17 Chevy Makes Towing Easier in New Silverado
4:23 Ferrari’s Stock Takes a Big Hit
5:04 GM Seeks Buick Envision Tariff Exemption
6:56 How OEM Bonuses Impact Car Dealers Business
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On today’s show…the Trump Administration officially unveils its proposal to rollback fuel economy standards…Toyota is selling its stake in Isuzu…and Ford is testing body tracking technology to help improve its manufacturing process. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show for enthusiasts of the automotive industry.
TRUMP PROPOSES TO ROLLBACK FUEL ECONOMY RULES
Yesterday, the Trump Administration officially unveiled its plan to rollback fuel economy rules enacted during the Obama Administration. The proposal caps standards at 37 miles-per-gallon starting in 2020. That number would have risen to 47 MPG by 2025 under the previous plan. The Administration claims this will lower regulation costs for automakers and reduce car prices for consumers. It also claims the higher consumption of oil will have a minimal impact on the environment. Opponents to the plan obviously disagree and say it will accelerate climate change and increase fuel prices. The proposal also seeks to strip California of its power to set its own emission standards. Which has prompted 19 states to announce they’ll sue to stop the rollback. And that’s a nightmare scenario for automakers who want to see one standard across the entire nation. This fight isn’t over and it’s one we’ll have to keep an eye on.
NO END IN SIGHT FOR PASSENGER CAR DECLINE
Uh-oh, sales of passenger cars in the U.S. market have been dropping by roughly 63,000 cars a month. But as we reported yesterday, sales dropped by 86,000 cars last month. So it’s getting worse. We are now on pace to see sales fall by 760,000 passenger cars by the end of the year, which is a staggering number. At some point in time, this has got to bottom out. But so far there’s no end in sight.
TESLA NO LONGER A NICHE PLAYER
Speaking of sales, here’s a fascinating number that most people missed. WardsAuto reports that last month Tesla sold 9,517 cars in the U.S. market, up nearly 200% compared to last year. Tesla sold twice as many vehicles as Porsche. It sold more than Jaguar Land Rover, more than Volvo and nearly as much as Mitsubishi. And that means Tesla is no longer a little niche player. It’s now a full-blown member of the automotive manufacturers’ club.
| U.S. JULY 2018 SALES | ||
|---|---|---|
| Tesla | 9,517 | +193% |
| Porsche | 4,020 | +7.3% |
| JLR | 8,089 | -7.2% |
| Volvo | 8,622 | +28.9% |
| Mitsubishi | 9,950 | +29.2% |
| Source: WardsAuto | ||
FORD USES MOTION CAPTURE TO IMPROVE PRODUCTION
Ever see those motion capture suits with all the little sensors on them? Video game developers and animation studios often use them to record sports players and put their movements on screen. Now, Ford is planning on using this tech to design “less physically-stressful workstations,” on assembly lines, which they say will improve manufacturing quality. “Specially trained ergonomists” will collect data on employees’ postures, helping them to improve their posture and reduce stress on their head, neck, back, and more. All a worker will need to do is put on the suit and do their work while the camera tracks the motion sensors.
CHEVY MAKES TOWING EASIER IN NEW SILVERADO
With the 2019 Silverado, Chevy will try to make towing a little less of a headache. Buyers will be able to use an app that connects to their truck, called myChevrolet, to make towing easier. For example, drivers will be able to test the lights on their trailers through the app, meaning they will not need a second person to stand behind the truck and watch for them. There is also an optional Advanced Trailering System. This includes Auto Parking Brake Assist, which prevents the truck from rolling back after being parked and a tire monitoring system. An optional mirror-mounted camera is available as well. The 2019 Silverado goes on sale this fall.
Still to come…GM seeks to exempt the Chinese built Buick Envision from U.S. import tariffs.
FERRARI’S STOCK TAKES A BIG HIT
Louis Camilleri, the new CEO of Ferrari is in hot water with investors. Camilleri called the late Sergio Marchionne’s plan to reach earnings of $2.33 billion “aspirational.” And that caused Ferrari’s stock to take a big hit. It immediately dropped 12.5 percent. But Merrill Lynch says investors may have misunderstood Camilleri, that it’s merely a matter of semantics. It says the hit to Ferrari’s stock is actually a good buying opportunity. Ferrari dropped to about $125 a share, but Merrill Lynch is forecasting it will go back to $150 a share.
TOYOTA TO SELL ITS STAKE IN ISUZU
In 2006 Toyota purchased a stake in Isuzu Motors and the two companies agreed to jointly develop and produce diesel engines. But due to “changes in the market environment,” presumably the shift away from diesel to electric, Toyota and Isuzu are ending any sort of capital tie-up. Toyota is also selling its entire stake in Isuzu, which is 50 million shares. But the two will maintain current joint development projects in the area of basic technologies.
GM SEEKS ENVISION TARIFF EXEMPTION
The U.S. has slapped a 25% import tariff on Chinese-made goods coming into the country, but GM is seeking an exemption from the rule. The automaker filed a request with the U.S. Trade Representative to exclude the Chinese-made Buick Envision from the tariff. GM argues that because the majority of Envisions are sold in China, roughly 160,000 vs. 40,000 in the U.S., “assembly in our home market is not an option.” And it adds that sales of the Envision also generate funds “to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States.” But just in case it doesn’t work, GM did ship a 6-month supply of Envisions to the U.S. before the higher tariff kicked in, which should be enough inventory to last it until the end of the year.
Coming up next, a look at how bonuses from automakers, impact the way dealers run their business.
HOW OEM BONUSES IMPACT CAR DEALERS BUSINESS
Selling cars isn’t the only revenue source for car dealers, bonuses from automakers are becoming a significant portion of their revenue. On Autoline This Week, Brian Finkelmeyer from Cox Automotive says those bonuses can make or break how dealers run their business.
(The ATW preview is only available in the video version of today’s show.)
You can watch that entire discussion right now on our website, Autoline.tv or you can look for it on our YouTube channel.
But that’s it for today, thanks for watching, have a great weekend and we will see you again on Monday.
Thanks to our partner for embedding Autoline Daily on its website: WardsAuto.com
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Comments (23)
August 3rd, 2018 at 12:25 pm
Okay I’ll bite, How many did Tesla actually deliver. Taking orders and filling them are 2 different things. I find it hard to believe that they have caught up to the backlog of Model 3s they had pre-sold before production began. Especially with all the ramp up troubles.
August 3rd, 2018 at 12:31 pm
Isn’t Trump’s roll-back more of a stasis of rules; there was supposed to be a re-evaluation of standards that Obama nixed so maybe this isn’t as bad as it sounds. (forgive me if I’m a little shaky on the facts but I think what I just said is pretty close to the truth)
And comments on the environment; I wonder what all these forest fires are having on CO2 and particulates in the air (i.e., people dying from respiratory problems) New car emission’s are at a very clean level today so incremental improvements are expensive and complicated. Perhaps something that may be just as effective is to review the clean-air credits and enforcing better compliance without the ease of buying from others (getting ‘your’ own house in order, as it were).
August 3rd, 2018 at 12:43 pm
So do these states care about emissions or fuel economy? Because all I have heard is it is a roll back on MPG not emissions.
Sean As passenger car sales continue to drop this has to be affecting used car sales even worse. Any data on what has happened to used passenger car prices?
August 3rd, 2018 at 12:48 pm
I would hope that OEM bonuses are distributed on a percentage basis. Encouraging all dealers big and small to sell more cars. Not just provide subsidies to the large dealerships which will give them an unfair advantage making it even more difficult to compete and eventually forcing the smaller dealerships out of business.
August 3rd, 2018 at 12:53 pm
If those sales numbers are correct, it’s impressive for Tesla, and pretty bad for Volvo and JLR. Tesla has three models, one of which accounts for about 2/3 of the sales. Meanwhile, Volvo has 6 models, and JLR has about 8 or 9. With Volvo and JLR, that’s completely separate models, not trim levels, etc.
August 3rd, 2018 at 1:00 pm
3 California and some northeastern states care about smog causing emissions. Part of what the Trump regime wants to do, is not allow them to have stricter regs for NOx, and maybe some other pollutants.
The states also care about fuel economy regs, both because of fuel usage and greenhouse gas emissions. I suspect the car companies mainly want stability.
August 3rd, 2018 at 1:00 pm
How can you justify the claim that Tesla is selling more cars than Porsche & JLR? It’s only collecting deposits. Is Autoline Daily believing the smoke & mirrors?
August 3rd, 2018 at 1:03 pm
7 Tesla says they are now building 5000 Model 3′s a week. If so, the sales numbers for July certainly sound reasonable.
August 3rd, 2018 at 2:14 pm
#7. We always use Ward’s Auto data when we report car sales. They are the bible of the industry. Tesla is doing more than just collecting deposits. It’s selling cars.
August 3rd, 2018 at 2:21 pm
The Obama 2025 CAFE requirement (over 50mpg) would have required a majority of vehicles to be either pure EV or PHEV. Given our power plants aren’t as green as ICE vehicles, the CARB/12 state claim of air quality doom from the rollback is somewhat hyped… unless we assume the Obama rule would greatly curtail new car sales (limited capacity/access to charging)… ah, but then that would mean consumers would be driving older, less fuel efficient vehicles.
No matter how you slice it, the rushed-to-interim-rule spelled economic Armageddon.
August 3rd, 2018 at 2:54 pm
TALK ABOUT THE ‘PERFECT STORM’ – IN TIMING:
I trust vehicle MPG Ratings & Emissions Standards will still be weighed by each specific vehicle classification ‘footprint’.
Car, CUV, SUV, Light & Medium Duty Trucks…
OTHERWISE –
The growing absence of Car sales will surely ‘Tilt the Balance’ in both categories!
August 3rd, 2018 at 2:55 pm
10 The 54.5 mpg CAFE numbers correlate to about 36 mpg combined on the window sticker. That’s still a high number, but a long way from 54.5. Also, there is a complex system that allows huge pickup trucks to be calculated differently from smaller vehicles.
The current 3 row SUV with the highest combined sticker is the Highlander hybrid at 28 mpg. The Camry hybrid rating is 52.
August 3rd, 2018 at 2:59 pm
The current 3 row SUV with the highest combined sticker is the Highlander hybrid at 28 mpg. The Camry hybrid rating is 52.
That’s non-plug in vehicles.
August 3rd, 2018 at 3:41 pm
To me the states are suing to protect CARB as an entity. There is no law limiting how california applies a tax to fuel or how they implement registration fees. If they want their residents to drive cleaner cars, they can pass a high gas tax and put high registration fees on cars which exceed whatever limit they want. Make it $10,000 per year to register anything with an ICE. Their residents can either choose to pay it or drive an electric car. Let the state and it’s residents put their money on the line instead of trying to spread the CARB regulatory burden across all 50 states.
Just as an aside, these 19 states comprise 33% of the total car sales. Not insignificant but that also means that the other 67% of the vehicles sold are shouldering the financial burden to make the cars affordable to the 33% who keep demanding the prices to go up. Eventually this would have come to a head regardless of which administration was put into place.
August 3rd, 2018 at 3:49 pm
If I’m not mistaken, the Obama EPA decided to ram through the 2018 mileage review two years early since Obama was term limited and regulation roll-back would be certain if a Republican got elected. Don’t know what the comments were, or if any comments were even heard, but the extreme numbers were set in stone.
August 3rd, 2018 at 3:55 pm
#12 Yes the Highlander hybrid is pretty good but the non hybrid version is still 24mpg combined which is not even half from 54.5. The Hybrid is just barely halfway there.
This is the problem with Legislators throwing target numbers out there that are not realistic. I mean unless everyone is fine with driving cars that accelerate like your being pushed by hand.
Say goodbye to trucks and SUVs. Which means you cannot drive what you may want or need you drive what the government has dictated automakers to build. Right now I do not want a EV or PHEV or even a hybrid. Until the hybrid extra cost actually can save me that amount in gas before its paid off then I’m not interested.
August 3rd, 2018 at 4:18 pm
Off subject for today: (well, one question: what and where exactly is Mitsubishi selling for such high numbers?) There has been discussions about the lack of paint color choices today. Some models might only have four (Jeep Grand Cherokee Laredo) or eight (Jeep GC Limited). Special models even fewer. So, I give you the glorious past: http://colorchipcuda.wellbornmusclecarmuseum.com/index.html Click on the Get Started button, fill in name and email then the Barracuda will change color when one of the 27 colors at the bottom are selected. Yes, the 1970 Barracuda ‘Cuda was available in 27 colors. Some not so cool (like Ivy Green), but it’s amazing to see so many choices. A lot of custom hand painting I bet.
I right clicked and saved each picture to a directory and it’s really fun to watch a slide show. Also copied to my iPad. By the way, the multi-striped ‘Cuda is real and in Wellborn museum. Googled: https://www.google.com/search?q=Color+Chip+Cuda&tbm=isch&tbo=u&source=univ&sa=X&ved=2ahUKEwiOkcnp2dHcAhW0PH0KHRaMDD0QsAR6BAgAEAE&biw=1920&bih=1003
August 3rd, 2018 at 4:27 pm
The sales #’s for Tesla are probably wrong for the month of July 2018, not trying to make argument since ofcourse can not proof cause Tesla doesn’t release monthly sales #’s. But according to EV site (Inside Ev.) that track EV sales, which their past history of keeping track of EV sales is quite accurate, Model 3 alone was over 14000 units.
August 3rd, 2018 at 4:37 pm
16 The 54.5 corresponds to about 36 in numbers on the sticker.
The Highlander hybrid uses the V6 hybrid system used in the RX hybrid. The improvement over the non-hybrid isn’t really worth price difference, except for people who do a lot of city driving.
As far as hybrid cars, some of them are certainly cost effective, even at today’s gas prices. A Prius costs little more than a similarly equipped gas hatchback from Ford, Chevy or Honda. A Camry hybrid gets almost double the city mileage of a regular 4 cylinder Camry, and is quicker. You’d probably recover the price difference in ~6 years of normal driving. Of course, some of us like saving gas “on general principles.” Also, some of us like the way hybrids drive, at least some of them. The “power splitter” system used by Toyota and Ford is seamless in operation, and the Camry and Fusion hybrids are quicker than the vast majority of popular compact SUV’s in CR’s tests.
August 3rd, 2018 at 7:33 pm
Unless there’s a major breakthrough in automotive technology, it is doubtful that gasoline powered non-hybrid vehicles can achieve mileage beyond 50 mpg; the Obama Admin’s regulation was designed to kill gas powered vehicle production and force the industry to move to electric vehicles.
I can’t wait until the sh_t hits the fan when every country that signed the Paris Climate Accord experiences rolling brownouts because their countries can not generate enough electricity needed for millions of electric vehicles which starts in 2023 for some and these countries have yet to start increasing their power grid.
The cost to build the necessary power grid will cost each country in the European Union $Trillions.
August 3rd, 2018 at 7:47 pm
A lot of electric cars can be charged with the current “grid,” and generating capacity, if they are charged at low demand times overnight.
August 3rd, 2018 at 10:35 pm
Two years ago, we bought a used BMW i3-REx for $29k and later, a new Prius Prime. Driving 100 miles around town, their electric costs are $2.90 and $2.50. About 1/3d of those miles are using free chargers so the cost is much lower.
On the highway, the BMW i3-REx gets 40 MPG and the Prime, 56 MPG. Actually higher because the first miles are electric. Four seaters, they easily handle my wife, her two dogs, and me with dynamic cruise control and automatic emergency braking.
Tesla Model S and X have a long list of YouTube videos shaming ordinary pony cars. Tesla is designing a series of trucks and pickups for the rest of the market. Regardless, life is good for our family but not for the future.
Regardless of USA mileage regulations, the rest of the world can set their own. Less efficient cars and trucks won’t export and sell. Add to that the tariffs, the USA car factories and employees are facing a grim future.
Late thought, both plug-in cars run their A/C either while charging or on demand while parked. Given the record setting summer heat, a great relief.
August 4th, 2018 at 8:59 pm
These 48v mild hybrids need to use electric a/c. That would make the technology much more worthwhile.