AD #2626 – Battery Costs Hurting BEVs Competitiveness, New Ford Explorer Impressions, Fiat Committed to U.S.

This is Autoline Daily reporting on the global automotive industry.

FCA EXECS PLAY MUSICAL CHAIRS
FCA is switching some of its executives around. Jim Morrison, who was in charge of Ram in North America, is now the head of Jeep in North America. He replaces Tim Kuniskis, who was running Jeep but goes back to leading the company’s passenger car brands in North America, in addition to being the head of Alfa Romeo globally.

FIAT COMMITTED TO U.S. DESPITE HUGE SALES DROP
Fiat is struggling in the U.S., but Tim Kuniskis told Wards that FCA is still committed to the brand. Fiat has only sold a little over 4,100 cars through May this year, which is down 40% from the year before. Kuniskis blames the drop-in sales on having a range of models that basically appeal to the same customer. And he says low fuel prices is making it harder to boost sales with customers choosing pickups and crossovers instead. By the way, we talked to Tim Kuniskis about the new 2020 Charger Hellcat and Charger Scat Pack and you can watch that interview right now on our YouTube channel.

INTEVA DEVELOPS NEW MATERIAL MADE FROM SCRAP
As we keep saying, automotive suppliers are the engine of innovation in this industry and here’s a pretty cool development from Inteva. It developed a new material for instrument panels, consoles and doors that’s mostly made from scrap that would otherwise end up in landfills. They call it Inteather Eco Trim and they use recycled, bi-laminate scrap for the base structure of components. Even more amazing: it’s cheaper than using virgin material. Specifically, it reduces waste 50% and cost by 20%. Inteva says in a couple of years’ automakers will be using 143 million kilograms of bi-laminate material in cars. But using its process, none of that scrap would end up in landfills.  

BATTERY COST HURTING BEVs COMPETITIVENESS 
Automakers around the world are racing to come out with electric cars, but so far no one knows how to make a profit on them, unless they sell for about $48,000 or more. It’s all about the cost of the batteries. AlixPartners says the powertrain cost for BEVs is about $16,000 per vehicle compared to about $6,500 for ICEs. It says costs will come down 4% a year from technological improvements and 7% thanks to economies of scale. But that means BEVs will not catch ICEs for nearly a decade. And we would point out that a simple ICE powertrain is even cheaper. A naturally aspirated 2-liter with a 6-speed automatic probably costs a little over $2,000. That makes it tough for BEVs to compete for mass market sales. AlixPartners predicts automakers will sell about 14,000 BEVs per model, compared to about 90,000 per model for vehicles with internal combustion engines.

DETROIT AUTOMAKERS SEEK COST SAVINGS FROM UAW
General Motors, Ford and FCA will start negotiating a new labor contract with the UAW in a couple of weeks. And one of the issues that’s sure to come up is that union workers cost a lot more than non-union workers. Including benefits, the Detroit Three pay an average of $63 an hour, versus $50 an hour at the transplants. Second tier UAW workers, earn about $77,000 a year. First tier workers earn about $98,000. Skilled trades members earn $123,000. That’s their take home pay, not including benefits, but it does include overtime, bonuses and profit sharing. The Detroit Three know better than to ask for lower wages, but they are looking at other ways to cut labor costs, such as higher health care co-pays and using more temporary workers.     

NEW FORD EXPLORER IMPRESSIONS
Ford has a lot riding on the Explorer. It’s Ford’s third best-selling model in the U.S. with sales of roughly 88,500 so far this year. But that’s down nearly 17% from a year ago. So, it’s a good thing Ford knocked the all-new Explorer out of the park. It passes the 100-yard test. In the first 100-yards you how good it is. They did a great job nailing down the basics: it feels solid, the interior is quiet, the seats are comfortable, the powertrains give you confidence, it rides nice and has lots of new technology. I was really drawn to the ride of the vehicle. When I say it feels solid, I mean nothing rattles around and you can feel the heft of the vehicle through the steering. But it’s not so much that the steering is heavy or the Explorer feels big. It actually makes you feel like you’re driving a smaller vehicle. Ford also did a great job of tuning the suspension. It’s smooth over normal bumps and dips, but never once did I feel like the vehicle was top heavy. It’s also amazing how good the ST version is. It’s a lot of fun to tap into its 400-horsepower twin-turbo V6. For such a big vehicle, it really was surprising how the weight didn’t push you around on the road and the steering feels direct. Ford also sells an ST version of the Edge but that ST was never planned from the beginning and was slapped together later. The Explorer ST certainly did not feel that way. I’d also like to briefly talk about towing because I don’t tow often, but when I do I tow dos equis. Just kidding. I only tow on these drive events and of the last three vehicles I’ve towed with, the F-150 with the 6-cylinder diesel, the Jeep Gladiator and the Ford Explorer, all with similarly weighted trailers, the Explorer pulled the best and had the best road manners. Another thing. The new Explorer has more off-road street cred than the previous model. I’m not sure if it would finish the Rubicon Trail, but it is nice to know it can get you out of some sticky situations. And I’m not sure how many other hybrids can do that, either. The all-new Explorer will start hitting showrooms soon. 

WHY EV STARTUPS ARE MOVING TO DETROIT
When you think of Detroit automakers, GM, Ford and FCA likely come to mind. But have you ever heard of Bordrin. Quadrobot or Bollinger Motors? They’re all EV startups that have migrated to the Motor City and on Autoline This Week, we’re joined by representatives from each company. In the following clip, Jerry Lavine from Bordrin, a company headquartered in China, explained why it opened up operations in Detroit.

(The ATW preview is only available in the video version of today’s show.)

You can watch that entire discussion right now on Autoline.tv or you can find it on our YouTube channel.

And a programming note, Autoline Daily and Autoline After Hours will be the air next week as the Autoline crew takes its annual July break.

But that’s it for today, thanks for watching and we’ll see you again on Monday, July 8th. Take care.