AD #2820 – Car Buyers Skipping Payments; EV Sales Face Uphill Climb; Daimler & Volvo to Form Fuel Cell Joint Venture

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

NISSAN LOCKS DOWN IN JAPAN
We start in Japan today where Nissan closed its corporate headquarters and R&D center in Yokohama. Nissan says it wanted to stop forcing those employees to commute to work, where so many use public transportation. 15,000 employees were told to work from home for the next two weeks because Japan is seeing a surge in coronavirus cases.

CAR BUYERS ASKING TO DEFER PAYMENTS
Now to the U.S., where the economic crash is hurting a lot of car buyers. The Credit Acceptance Corporation, which caters to subprime car buyers, says many of them are losing their jobs and skipping car payments. Another lender, Ally Financial says one out of four of its customers, more than a million people, have asked to defer car payments. 70% of them have never missed a payment before.

IN-HOUSE CREDIT ARMS WILL LOSE BILLIONS
Last week we warned about the plummeting prices of used cars. That could cause big financial damage with the in-house credit arms of automakers. And now we’re getting some numbers of how bad the damage could be. JP Morgan estimates that GM Financial could lose $3 billion, while Ford credit could lose $2.5 billion. The inventory of used cars is piling up and auction houses will be in a mad scramble to sell them once the economy starts to reopen. That will result in plummeting prices, which means automakers will have to lower the residual values of cars coming off lease. And that’s what will lead to big losses at the captive finance arms.

EV SALES WILL BE AN UPHILL CLIMB
A consumer survey by JD Power suggests that automakers still face an uphill climb to sell electric vehicles. The survey found that 70% of Americans and 67% of Canadians have never been in an EV. 30% of Americans said they know nothing about electrics. Almost one out of three Canadians and Americans said they would likely buy an EV in the next four years, but the same number said they would never buy one. JD Power also encountered EV owners who said they would never buy another. They blamed citing high maintenance, high sticked prices, limited range and cold-weather problems. It quoted one former EV owner as saying their EV, “Does not provide enough heat to clear windows in cold weather.”

Speaking of electric cars, if you want to get up to speed with the latest battery developments, be sure to watch Autoline After Hours. Our guest will be Bob Galyen, who just retired as the Chief Technology Officer of CATL, the giant Chinese battery maker. How did an American end up as the CTO of a Chinese battery company? And how fast does he see the cost of EV batteries coming down? Well you’re going to have to join me and Gary Vasilash as we provide you with some of the best insider news of what’s going on in the global automotive industry.

DAIMLER & VOLVO JOIN FORCES ON FUEL CELL TRUCKS
Big news in fuel cells today. Daimler and Volvo announced they’re forming a new joint venture to develop heavy-duty fuel cell trucks. Daimler will move all of its fuel cell activities over to the new company and Volvo will buy a 50% stake for 600 million euros. The goal will be to have fuel cells for long-haul applications in series production in the second half of the decade as well as develop fuel cells for other automotive and non-automotive applications. The deal should be official before the end of the year.

AUDI REVEALS NEW A3 SEDAN
We’ve shown you the refreshed Audi A3 Sportback and now here’s the sedan. We saw the new front end on the Sportback, but we also get to see the new rear end on the sedan and we notice that the body work on the side has more complex angles than the outgoing model. The interior features a 10.1-inch center screen and a ten and a quarter inch screen for the driver. A 12.3 inch digital cluster is also available. Engine choices will include two gasoline and one diesel. 48-volt technology is offered on the gas engines with the automatic transmission as well. Presales for the new A3 start at the end of this month in many European markets and it carries a starting price of about 28,000 euros or roughly $30,000.

SKODA’S LESSER KNOWN OFF-ROAD AGROMOBIL
We sure like showing these rare and historic models from Skoda. In 1961 Skoda started work on a vehicle that could be used on farms, in forestry, coal mines and even on the battlefield. What it came up with is a short wheelbase off road vehicle called the Type 998 or Agromobil. A roughly 40 horsepower in-line 4-cylinder engine sent power through a 4-speed gearbox to a reduction gear and finally to the rear axle, which had a limited slip differential. The front wheels could also be engaged and locked and there was a PTO shaft at the rear. The Agromobil could be configured a number of ways, the front windshield even folded down and bench seats could be added to the rear for seating for up to ten. Thirteen prototypes were made, ten of which went to the military, but the Agromobil was never produced primarily because of the centrally controlled planned economy in the Czech Republic at the time and the lack of influence of its army.

IMS TO OPEN MORE OF ITS DIGITAL ARCHIVES
Don’t forget that the Indianapolis Motor Speedway is opening up its digital archives every Tuesday. This week will focus on the 1910’s, including the shortest scheduled Indy 500.

SAFETY & CONNECTIVITY FEATURES OF THE HYUNDAI i20
Hyundai is showing off safety and connectivity features in the new i20. The sporty compact hatchback is available in Europe and shares a platform with the Accent. The company claims it offers the most comprehensive safety package in the B-segment, featuring automatic emergency braking, pedestrian detection, and a driver attention warning, which will alert drivers if it detects inattentive driving patterns. Moving to the interior, the new i20 features a 10.25-inch touchscreen with voice command and it offers a Bose Premium Sound System. Connectivity features include a wireless charging pad for smartphones and Apple CarPlay and Android Auto are now offered wirelessly.

BYTON SAYS HUGE SCREEN WON’T BE DISTRACTING
Automakers are going crazy putting giant screens on the dashboards of their cars. Each one is trying to outdo the other. EV startup Byton is in the lead. It’s putting giant 48-inch display screens in its vehicles. But will they be too distracting? I spoke with Dre Nitze-Nelson from Byton and here’s what he had to say about why their screens aren’t distracting.

Dre Nitze-Nelson, Byton
“So as you can see here for example, we can see that the information is not that much. We have our instrument cluster like in a traditional car. Pretty, nicely designed and a very easy way to read and understand. We have a media player, which is basically a list element and your artwork. And that’s already it, in this particular case. We of course have other applications, which will appear differently on the screen. But I’ll give you an example, if you contrast a map experience in the car, on let’s say an 11-inch display with all the information on the map you want to see, like street names, POIs and all of that. And on top of it even, the interaction with the items meaning buttons because it’s a touch display. It will take up a lot of real estate and what that means is you actually get easily distracted because there’s so much information on such a small space. Now, you take the buttons out and take the rest of the information and spread it out a bigger screen, it’s much easier to read. That’s not distracting at all, it’s actually the opposite. And what we’re achieving is, it’s a much easier way to interact with the entire system, it’s a much easier way to read and understand. Even these little details on for example a map.”

You can watch that full interview on our YouTube channel.

GM GOES ALL IN ON RENEWABLE ENERGY
GM is going all in on renewable energy in southeast Michigan. The automaker signed a deal with the utility DTE Energy for 500,000 megawatt hours of solar energy. Last year, GM bought 300,000 megawatt hours of wind energy from DTE. By 2023, that solar and wind energy will be used to power all of the company’s DTE-powered facilities in southeast Michigan. That includes the company’s global headquarters in Downtown Detroit, its Tech Center in Warren, the Milford Proving Ground, its Orion and Detroit-Hamtramck plants, as well as several other sites in the area. GM’s investment of 800,000 MWh is the equivalent of 63 million gallons of gas of CO2 emissions and its enough electricity to power more than 100,000 homes in an average year.

FORD SHOWS EVs ARE QUIETER THAN ICE VEHICLES
Ford just proved something we all know. New cars are quieter than old ones. It made a video comparing the in-cabin noise from models dating back to 1966. Not surprisingly, the amount of noise decreases over the years and ends with the new Kuga at an impressive 69 decibels from inside the car. But the thing is, Ford used a plug-in hybrid version of the Kuga for this test. So, while the engines of the other cars sing away, the Kuga is running on electric power. We would hope that it’s much quieter.

But that brings us to the end of today’s show, thanks for watching and please join us again tomorrow.