0:28 Dealerships Will Continue to Disappear
1:14 Glickenhaus Shows Throwback Models
2:31 Clarification on Genesis Build Model
2:58 Aston Martin & Rolls Royce Develop VTOLs
3:57 VW I.D. R Breaks Another Record
4:45 Tesla Consolidates Electronics for Big Savings
5:57 Musk’s Twitter Attacks Hurt Tesla
On today’s show… half the car dealers in the United States could disappear… Aston Martin and Rolls-Royce design passenger drones… and Sandy Munro explains how Tesla kept down the cost on the Model 3. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show for enthusiasts of the automotive industry.
DEALERSHIPS WILL CONTINUE DISAPPEARING ACT
Less than 10 years ago there were nearly 19,000 dealerships in the U.S., but today it’s closer to 17,000. And that number could soon drop dramatically. That’s according to a study from Cox Automotive, whose brands include AutoTrader and Kelley Blue Book. And it all has to do with people buying fewer personal vehicles. As mobility services expand and more self-driving vehicles come online, many customers will not need to purchase their own vehicle. The study predicts there will only be 9,000 dealerships by 2034. And the big dealer groups will buy up the small ones. There are 9,000 dealer owners now. But the study says that could drop to as few as 1,000 owners by 2030.
GLICKENHAUS SHOWS THROWBACK MODELS
Scuderia Cameron Glickenhaus, which makes low volume exotic cars, just announced two throwback models. The first is a modern recreation of the GM-powered Baja Boot off-roader from 1967, only two of which were ever built. The SCG Boot will feature throwback styling, a 650 horsepower, 5.6-liter V8, and a starting cost of 250,000 dollars. The second car Glickenhaus announced is the SCG 006, which is a throwback, two-seater sports car that seems to have taken styling inspiration from 1960s Ferraris. Your choice: coupe or convertible, paddle-shift auto or six-speed manual. It gets a 650 horsepower supercharged V8.
Every time you turn around it seems like another car company is getting involved with passenger drones, and coming up next we’ll tell you who is doing it now.
CLARIFICATION ON GENESIS
A clarification here. Last week we reported that the Genesis luxury brand of Hyundai was going to adopt a build to order model. And it is. But that will be based on orders from dealers, not from retail customers as we reported. Genesis had been building cars based on a forecast and delivering them to dealers. But that led to overly high levels of inventory, and it’s adopting a build to order model to keep inventory levels under control.
ASTON & ROLLS ROYCE DEVELOPS VTOLs
We keep saying that passenger drones will be the Next Big Thing. And now Aston Martin and Rolls Royce are are throwing their hats into the ring. Aston Martin designed the Volante Vision Concept. It features three propellers powered by a high performance hybrid-electric propulsion system. It will be autonomous and can hold 3 adults. Rolls Royce Holdings, which is the second largest maker of aircraft engines in the world and no longer related to the car company, developed a passenger drone that also uses a hybrid system, but with a gas turbine engine that generates electricity for six electric propellers. It can carry 4 to 5 passengers and travel at speeds up to 250 MPH for about 500-miles. Rolls says the design can be adapted for personal and public transportation, logistics and military applications and could be in the skies as early as 2020.
VW I.D. R BREAKS ANOTHER RECORD
After breaking the record at the Pikes Peak Hillclimb last month, VW apparently decided it wanted to break another. It brought I.D. R. race car to the Goodwood Festival of Speed, where it broke the record for the fastest electric vehicle at the Hillclimb. And this was after a scary slide on the grass during a practice run. And now we wonder where VW will take it next?
Coming up next, a look at how Tesla is keeping the cost of the Model 3 down.
TESLA CONSOLIDATES ELECTRONICS FOR BIG SAVINGS
Yesterday we showed you a clip from our latest video with Sandy Munro, whose company tore down a Tesla Model 3 and found that the top line models can generate profit margins greater than 30%. Sandy also told us that the base models can generate double digit profit margins. The secret to Tesla’s success is consolidating all the electronics in the car into a couple of motherboards, and having those chips and integrated circuits or ICs do double duty. So instead of having discrete chips and ICs in all the components scattered around a car, Tesla puts them all in one spot. That way it needs fewer chips and ICs, and that greatly reduces the cost of components. Sandy showed how the cost of the rear view mirror in the BMW i3 is $93, on the Chevy Bolt EV it’s $164, but on the Model 3 it’s only $29. That’s only one example, but Sandy Munro says there are lots of other examples of how Tesla keeps the cost down by consolidating the electronics. You can watch that entire video now on our website or YouTube channel.
MUSK’S TWITTER ATTACKS HURT TESLA
And speaking of Tesla, CEO Elon Musk just can’t seem to look the other way when he’s criticized. Tesla’s shares tumbled 4% yesterday, after Musk tweeted that one of the British divers who helped rescue the boys who were trapped in a cave in Thailand is a pedophile. Musk did this after the diver said Musk’s attempt to save the boys with a kid-sized submarine was a “PR stunt.” Musk later deleted the tweet. Some of Musk’s tweets seem to be doing more to harm Tesla’s stock than all the bears who are shorting it.
But that’s it for today, thanks for watching and please join us again tomorrow.
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John McElroy is an influential thought leader in the automotive industry. He is a journalist, lecturer, commentator and entrepreneur. He created “Autoline Daily,” the first industry webcast of industry news and analysis.