AD #2581 – Whole EV Segment Drops, Could Satellite Images Make 3D Maps? Challenger Sales Pull Away From Camaro
April 25th, 2019 at 11:57am
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Runtime: 7:55
0:07 Tesla Q1 Worse Than Expected
0:32 Tesla Has a Logistics Problem
1:10 Whole EV Segment Dropping
1:44 U.S. Headed For An EV Disaster
2:44 Ghosn Granted Bail… Again
3:32 Toyota Tests Satellite Images for 3D Maps
4:16 Challenger Sales Pull Away From Camaro
5:31 VW EV Racer Sets Sights on Nurburgring
6:21 One Blinged Out Ford Escort
7:12 Just a Cool Historic Picture
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TESLA LOSSES WORSE THAN EXPECTED
It’s a bad day in Tesla Land. The company reported big losses for the first quarter, far worse than analysts expected. Revenue was down 37%, a drop of nearly $2.7 billion. It posted an operating loss of $521 million and a net loss of $667 million. The company’s cash pile dropped 40%.
| Tesla Earnings | |||
|---|---|---|---|
| Q1 2019 | Q4 2018 | Change | |
| Revenue | $4.5 Billion | $7.2 Billion | -37% |
| Operating Loss | -$521 Million | $413 Million | -$935 Million |
| Net Loss | -$667 Million | $210 Million | -$877 Million |
| Cash | $2.1 Billion | $3.6 Billion | -40% |
TESLA HAS LOGISTICS PROBLEM
The biggest problem Tesla faces right now is that it can’t deliver Model 3’s to customers fast enough. Unlike the Model S and X, Tesla does not build-to-order for Model 3’s. Instead it builds them in batches and puts them in inventory, parking them in lots and yards around the country and around the world. It cannot book those cars as sold until a customer takes delivery. If Tesla can solve its logistics problems, things should brighten up considerably. Even so, Elon Musk warned analysts that the company will lose money next quarter but should be profitable in the third quarter.
WHOLE EV SEGMENT DROPPING
Before other automakers snicker at Tesla’s big losses, they better be worried about the public’s acceptance of battery-powered cars. Tesla is not losing sales because other EVs are stealing sales. The whole segment is dropping. In fact, sales of EVs are falling nearly 3 times faster than the rest of the market. Tesla is actually doing better than the rest of the segment. Take Tesla out of the equation and EV sales fell 24% in Q1 this year versus Q4 last year.
| U.S. EV Sales | ||
|---|---|---|
| Q4 2019 | Q1 2019 | Change |
| 83,911 | 79,226 | -5.6% |
| w/o Tesla | ||
| 13,689 | 10,384 | -24% |
U.S. HEADED FOR AN EV DISASTER
And that’s why we believe the auto industry is headed for an EV disaster. Right now there are 13 BEVs for sale in the U.S. market and they account for less than 2% of all sales. But in only three years time, if you believe what the car companies say they’re going to do, there will be anywhere from 80 to 120 EVs hitting the showrooms. We just don’t see the market demand for these cars, because remember, the traditional automakers are not building these cars because customers are clamoring for them. They’re making them because governments around the world are forcing them to.
And we’ll be back with more right after this.
GHOSN GRANTED BAIL… AGAIN
Good news for Carlos Ghosn, he could be getting out of jail soon. A Japanese court just granted him a $4.5 million bail. Prosecutors have appealed that decision, but if it’s upheld, Ghosn will be free to leave his detention center, only after meeting certain conditions. He can’t meet or speak with his wife without permission, plus his movements and communications will be closely monitored. We think this is pretty outrageous. Japanese authorities confiscated his passport. And he’s the most recognized man in Japan right now. So it’s not like he’s a flight risk who can sneak out of the country. Besides, he already paid $9 million in bail over a month ago, prior to being re-arrested earlier this month.
EASIER WAY TO CREATE 3D MAPS?
Before autonomous vehicles can become a reality, they need to follow 3D maps so they know precisely where they are. GM’s Super Cruise relies on high-resolution 3D maps created from LIDAR by driving on those roads. But Toyota is preparing to test a new approach that could save both time and money. It teamed up with Maxar Technologies and NTT Data to create high-definition maps for self-driving cars using hi-res satellite images. Toyota says HD maps have been created for less than 1% of roads around the world. But if it can do it by satellite, all kinds of roads could be mapped quickly and cheaply.
CHALLENGER SALES PULL AWAY FROM CAMARO
Chevrolet and Ram are in a big argument over who’s pickup outsells the other. But there’s another argument brewing. The Dodge Challenger now outsells the Chevrolet Camaro. The tipping point came last year and not only is the Challenger pulling away, it’s getting awfully close to the Mustang. Remember the Challenger sits on one of the oldest platforms in the business. It’s a reworked version of the Mercedes E-class left over from the days of DaimlerChrysler. FCA was going to put it on an Alfa Romeo platform, but that didn’t work out. So they’re revamping the existing platform and it should be in showrooms within the year.
We’ve got a great Autoline After Hours lined up for you this afternoon, when our special guest will be Robert Bollinger, the CEO and founder of Bollinger Motors. We’ll be talking all about his all-aluminum, all-wheel-drive, all-electric, off-road truck. Join us today at 3PM eastern time on our website, Autoline.tv.
VW EV RACER SETS SIGHTS ON NURBURGRING
Volkswagen’s all-electric ID. R race car smashed the record in the Pikes Peak Hill Climb last year and now has its sights set on the Nurburgring. Testing starts today for the car, which has been in continuous development since that record-setting run and is specially tuned for the 12.9-mile section of the track. For example, the ID. R needed to be set up for maximum downforce on Pikes Peak, but that’s not the case for the Nurburgring. So, it was fitted with a drag reduction system, similar to F1, that reduces the air resistance of the vehicle by about 20 percent at the touch of a button. The ID. R will eventually try to beat the current EV lap record of just under 6-minutes and 46-seconds.
BLINGED OUT FORD ESCORT
One jeweler’s love for the Ford Escort has led to a pretty amazing creation. Russell Lord has spent thousands of hours over the last 25 years creating a 1:25 scale version of the works rally car driven by Ari Vatenen in the late 1970s. Even if it weren’t made from silver, gold and diamonds, the level of detail still sets it apart from other scale models. The pulleys spin on the front of the engine, the diamond-encrusted platinum gear stick even moves and the windows are collected pieces from smashed vases. What’s crazy is Lord says he knows the car so well there were no plans and he just started building it from the ground up. His labor of love will now be auctioned off for charity on May 2nd.
JUST A COOL HISTORIC PICTURE
And speaking of things that are just plain cool, check out this picture of a modified Mercedes 300 SL Gullwing help a racing cyclist in 1962 become the first person to go 200 km/h on a bicycle. And look at how massive the front sprocket is on that bike. Amazing.
But that’s all for today’s show. Thanks for watching and we’ll be back again tomorrow.
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Comments (31)
April 25th, 2019 at 12:16 pm
Lots to comment on today
EVs: One quarter does NOT a trend make. Especially if you compare this quarter not to the same Q last year, ie Q1 2018, but to Q4 2018, which was record-breaking for Tesla.
Also, as we mentioned yesterday and one can see in Kit’s links, in Q1 2019 Tesla repaid loans worth $920 Mill in cash. It will have a similar payment in Q4 2019, but much smaller (less than $600 mill). This is why it expects Q3 2019 to be profitable, there will be no major debt repayments then.
Not all EVs are made the same, your traditional automakers make ‘compliance’ EVs but Tesla makes affordable supercars, spaceships, whatever you want to call them, that have no dirty gas or diesel rivals, really, nor even EV rivals, that’s why nobody else is successful in EVs.
BTW, are you going to tell the above to the Bollinger AAH guest and the fools who gave him venture capital to make this ridiculous vehicle? And ask him also what is its drag coefficient, it must be… 0.99 (smart designs today have below 0.25)
On Challenger vs Camaro, that old Benz E class from the 90s is an all time favorite of mine, but it is much smaller and much lighter than more recent E classes, yet when you drive it it feels much bigger, with its big steering wheel and not Buick-like arthritic grandma power steering. It is an excellent example of simple, tasteful Teutonic styling, with no weird flares like Hyundai and Toyota use all the time.
April 25th, 2019 at 12:21 pm
More on Bollinger: Just looked him up on Linkedin:
https://www.linkedin.com/in/bollingerrobert/
It seems he is neither an engineer or an MBA, his education is an Art-design degree from Carnegie Mellon (a good U, from where Trump has his MBA)
April 25th, 2019 at 12:32 pm
On Tesla……….I’m pretty much on-board with what Sean said. 2% of the market, and if growing, not that fast; EV apocalypse, maybe. I know it may be the future but quit trying to shove EV’s down my throat. (The future has not been written yet).
April 25th, 2019 at 12:39 pm
Year over year quarterly comparisons are the most common, because they compare similar circumstances (ie: holidays, short months, winter weather, etc.). It helps to provide a more accurate picture of a company’s performance.
Also, all automakers, (and most other corporations), have debt and loan payments to make. Its a normal part of doing business and is not an excuse for not making a profit. The real number to look at in Tesla’s results is the dramatic drop in revenue. Any company that experiences a 1/3 drop in revenue has a serious issue. And that number is not affected by loan payments. It just means that their cars are not selling nearly as well as they did last year. This is certainly not a good sign for this startup.
April 25th, 2019 at 12:41 pm
Hey automakers, the real viable alternative to ICE vehicles is a medium range plug-in hybrid. These remove range anxiety and allow for real world (at least USA world) driving distances.
Full EV vehicles just can’t make a day on the interstate that so many of us USA drivers want and need.
April 25th, 2019 at 12:43 pm
#2 Trump says he has an MBA from Wharton at University of Pennsylvania. Not sure how he read all those business books to get that MBA…
April 25th, 2019 at 12:47 pm
“We just don’t see the market demand for these cars.” You need to have a vision that exceeds the Michigan state boundaries and 2019.
Electrified vehicles, including HFCV, will be a part of the propulsion mix more and more in the coming years. The manufacturers may be forced into designing, building and marketing EVs, but look how they have taken to the challenge! There is technology being developed that would never have been imagined only a decade ago.
Your children and their children will appreciate the EV growing pains we are going through now. Cleaner air, a reduction of reliance on fossil fuels, and the need to never ever again invade a sovereign country for their oil. Hang in there, give it time.
April 25th, 2019 at 12:51 pm
Even though it is too big and too heavy, I like the Challenger. It just looks good, in an old-time muscle car sort of way. They keep coming up with new versions to help keep the sales going. Challenger probably has more powertrain choices than any other car in the US market.
Challenger more-or-less competes with Mustang and Camaro, but it’s really in sort of a class of one, being about one size bigger than the others, and not really competing in the sporty handling deparment.
April 25th, 2019 at 12:57 pm
The Challenger is an anachronism of sorts; still works (and pretty darn well) but perhaps the buyers may eventually wane, kind of like Harley Davidson is running out of buyers for their genre. The Challenger ‘use to be’ a “pony car”, maybe more like a Clydesdale (now): big, powerful and elegant in its own way.
April 25th, 2019 at 1:05 pm
9 Yeah, Challenger can’t keep going like this forever, and it still surprises me it’s doing this well, considering it’s been around for about 12 model years, and counting. It’s had only minor refreshing of the grill, tail lights, etc., and, I think, has had only one significant makeover of the interior.
April 25th, 2019 at 1:12 pm
9. I like the Clydesdale analogy.
April 25th, 2019 at 1:22 pm
The use of satellite maps for self driving can only be successful if there is a secondary system that is looking at the current “land”. Think road maintenance, loose dogs with owners in pursuit, etc.
April 25th, 2019 at 1:29 pm
6 My fault, I got C-Mellon mixed up with Wharton which is of course at the U Penn.
8 I like all 3 derivatives, but prefer the Chrysler 300 and its big wheelbase, then the CHallenger, although it looks more bulky and less lean than the Challenger muscle cars from the 60s or 70s, and least of all the Charger (one of my next door neighbors has one). They all benefited greatly from the Merc E class mechanicals.
April 25th, 2019 at 1:48 pm
I wonder if a proper study has been done to determine the actual market for EVs. As I’ve said before vehicles that are in the 40 to 50k price range already limits the buyers. Then add in things like having a home with a useable garage where the car can be charged and most likely is not the only vehicle of the home so long trips can be done in a secondary vehicle. Then subtract folks that need to be able to tow. Then minus out the states where the EVs are not sold or are not really practical due to climate and then what are you really left with for potential buyers?
I think when talking EVs they need to keep in mind it’s not in relation to total vehicles sold currently. It’s a niche market. Sales should be a percentage of that market not in relation to total vehicles sold. It will be a long time before EVs will work for everyone.
April 25th, 2019 at 2:24 pm
As prices come down, there should be more market for EVs as “most of the time” cars, at least for people who can charge them at home.
As far as towing, the Tesla X is rated to tow 5000 pounds, and while the 3 and S are not rated for towing, hitches are available for them. Towing with the 3 or S might not be good, though, if you had warranty claims, and the range would be greatly reduced for all EVs, depending on what you are towing. Still, they would work for taking a boat 15 miles each way to a launch site.
April 25th, 2019 at 2:27 pm
Unrelated to today’s show, a “crew cab” Toyota Tundra at my condo, which never hauled or towed anything, was recently replaced with a RAV4. I hope that phenomenon catches on with more people.
April 25th, 2019 at 2:39 pm
16 one of my colleagues, who runs marathons on the side (has ran one in every US state almost) and used to own and like one of these phony Hammer H3s with a claimed small fuel efficient engine, recently had to trade it in after 130k miles (it had a $3k repair) and had to trade it in for a GMC Canyon, although he would have liked an F 150. The Canyon has a thick anti-roll bar etc in the middle of the bed, which makes the bed practically unusable. His son who is in Law school drives a pickup too.
April 25th, 2019 at 2:44 pm
13, The 300 and Charger have the same wheelbase, 120″. while the Challenger WB is 116. I tend to the “police car” when I see a Charger. I don’t know what percentage of them are police cars, but they seem to be used by a lot of highway patrol cops. Trucks, especially SUV/CUVs seem to be taking over the police car market, though.
I think Chrysler should stretch the 300 about 6-8 inches, fancy up the interior a little, and call it “Imperial.” It might not look right, though, stretching it in the middle that much.
April 25th, 2019 at 2:52 pm
18 I’m aware the challenger has shorter WB. I just don’t like the Charger’s loud styling even tho I appreciate its long WB. I see plenty of police Chargers around here, as well as many police Explorers and even some GM models. I doubt these obese, unstable elephants would make good chase-pursuit-cornering vehicles, maybe they are better as K9 carriers.
April 25th, 2019 at 2:57 pm
Gasoline prices are on the rise again so maybe this may be another litmus test for EV’s. Crude was up to 75 dollars a barrel, summer changeover and spring maintenance have all contributed to higher prices. Seems EV’s have this new chance; wonder if it will make any difference. I don’t think it will, much, (but I’m standing by and am willing to learn).
April 25th, 2019 at 2:59 pm
14 what is sure is that every year pure EVs will catch on more and more. Battery cost improvements alone from 2011-18 are shockingly huge, a 100 KWH battery in 2011 cost $120k but in 2018 only $17,600 ( bloomberg data). More and more affordable EVs will be on sale. The $35k Model 3 alone is really cheap, it is less than the average car transaction price in the US.
But the biggest EV market is CHINA, double that of US, and growing. That’s why TESLA built this huge factory in Shanghai, and China, unlike all its other auto ventures, did not require their usual 50-50 with a domestic maker and tech transfer.
And the market with the most growth is Europe, where only tiny countries like Norway used to have large EV fleets, now Germany and the other biggies grow by over 80% in pure EV sales.
And always the US has tens of millions of suburban commuters for whom Pure EVs with 200 mile or more range make economic sense on top of being a ton of fun to drive.
April 25th, 2019 at 3:00 pm
20 I doubt they make much difference, if they did, cars in $8-$10 a gallon Europe would be all pure EVS.
April 25th, 2019 at 4:19 pm
19, The police version of the new, longitudinal engine Explorer did well in the Michigan state police tests, matching the V8 Charger around the race track, and in top speed. The police Explorer is AWD with a 3.0 turbo, and I think is lowered a little. The Ford did less well in the braking tests, with the V6 Charger doing the best.
April 25th, 2019 at 4:37 pm
No one wants an EV. Current market share suggest that this is true wisdom. No one wanted small cars either in the 70′s, we bought them. No one wanted to switch to no lead. We did it anyway. Not sure I ever wanted high mount stop lights, multiple air bags, but somehow, magically we buy them. Mild hybrids are coming and right behind them are full electrics. I certain the public that can afford them will buy them. The rest of us will be relegated to autonomous ride sharing stages coaches similar to the airport shuttles
April 25th, 2019 at 4:55 pm
21 I agree with your comments, if it was just about price. My point was just that there are other factors that prevent EVs from being an option for many people. The reality is that of the 17 Million vehicles sold in the US EVs would probably only work for 10% of sales even if prices were on par with a ICE vehicle.
April 25th, 2019 at 5:04 pm
Just watched AAH and I thought the first part was pretty interesting on the Bollinger “Jeep”. Most definitely a niche vehicle and may or may not be successful, but the approach they are taking seems reasonable to keep tooling costs and other up-front capital to a minimum and production to a reasonable scale. While the head guy is not an engineer, he seems to have an eye on detail and simplicity. Also does not sound like he is using venture capital to fund his dream, rather his own money from prior successes. More power to him.
April 25th, 2019 at 5:07 pm
25, I don’t know what the percentage would be, but EVs would work as one vehicle for any two car (or more) household having a garage with power, and one vehicle used for a commute of no more than around a 150 mile round trip, or one vehicles mainly “for fun.” I’d think that would be a lot more than 10%, but I could be wrong.
April 25th, 2019 at 5:46 pm
Tuesday evening, I drove 13 hr, 537 mi, $18 electricity, to Tunica MS in my Model 3, Standard Range Plus.. I used two SuperChargers, one twice, yet reach home safe and sound. AutoPilot did +98% of the driving and I watched the car handling the driving.
Local gas cost $2.50/gal so doing the math, 537 mi /($18/$2.5/gal) = ~74.6 mpg. Around town, it is EPA rated at 134 MPGe.
April 25th, 2019 at 8:08 pm
27 Yeah the 10% was just a guess. And after a little digging probably more like 20% since only 64% of Americans own homes and only 63% of them have garages so now you’re at 40% and I found a study that said only 57% are two car homes which is expected to drop to 43% by 2040. That would cut the 40% in half. But I’m guessing the homes with garages have a higher percentage than 50. Either way it’s prob somewhere between 20 and 30% of Americans that could charge at home their EV and have a spare car. So the best EV sales they could expect would be like 4 million a year. Also means Tesla already has 12.5% of all potential EV sales with just the model 3.
May 7th, 2019 at 6:18 pm
EVs are a certainty for ride sharing. With cities ever more congested and more people wanting to live in them, then the option is either mass-transit (trains can’t go everywhere-cost alot and are very disruptive), buses (still associated with the poor in the US and longevity of urban EV buses is still iffy). EVs cost less to run and can be charged overnight when ride sharing demand is minimal. Wait till governments start mandating EV (or at least PHEV) for gov paid fleets.
As for governments forcing them down citizens throats-well sales of EVs and market share say otherwise. Governments are incentivising EVs because the same buyer of a gas guzzling car-truck will be the same citizen looking for gov funds when climate change means floods-storm damage-forest fires due to heatwaves and still complain when gas prices means their gas-guzzler is more expensive to drive the way they want.
May 7th, 2019 at 6:31 pm
Can someone explain to me how Bollinger (which is a also a well known French champagne) can offer a better 4wd when Land Rover already has most of its fleet built in Aluminium (and likely the next “basic” defender). I agree that these LR trucks were not built as pure EVs (as the woeful 400e electric LR shows). Do these premium Jeep buyers care about the climate as long as it can tow (jetski/boat/Horsies), go anywhere (in theory). Yes diesel RRs are the main sale in Europe but going 48V mild hybrid will look well at the school run when the Jeep is shown to be emission free as the kids are collected/dropped off. Its like S-Class buyers worrying the cost of filling up the fuel tank