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0:07 U.S. Auto Sales Won’t Recover Until 2024
1:46 Analyst Forecasts Low Electric Pickup Sales
2:54 V2V Could Be Biggest Safety Breakthrough in History
4:42 GM Reveals Hummer EV Marketing Strategy
5:34 GM Considers Electric Mid-Size Trucks
6:11 Bentley & Aston Expand Outside of Car Business
7:29 BMW & VW Help Develop Sustainable Mining
8:10 Greenpeace Criticizes China’s EV Battery Recycling
8:50 Electrified Cars Outsell Diesels in EU for First Time
This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
U.S. AUTO SALES WON’T RECOVER UNTIL 2024
Automakers, suppliers and dealers reported stronger sales and profits than anyone expected in the third quarter. But how much will the market recover? That’s the question we put to Charlie Chesbrough, the chief economist at Cox Automotive. He was the guest on Autoline After Hours yesterday, and here’s what he told us.
“Well. our expectations are we’re going to end up this year around 14.3 or 14.4 million, somewhere in there. And then next year we’re expecting the recovery to continue, we’re not expecting it to go down next year, even though the risks are high. We’re really concerned about certainly the election coming up next week–that could add all kinds of outcomes as a result of that. But we’re just mostly concerned about the economy itself and Covid and whether we do have this second wave. But assuming we do get the stimulus, our outlook is that the market is going to rise to about 15.2 million next year. So about 900,000 higher than this year. A nice gain, but we’re not expecting any kind of V-shaped recovery back to a 17 million market. Certainly, it’s going to take us a couple of years before we get back to that level.”
It’s great to hear that sales in the U.S. market could grow by 900,000 vehicles next year. Even so, that means they’ll still be 2 million less than last year. And Chesbrough says the market will not fully recover to 17 million units a year until 2024 or 2025. Charlie shared a ton of great information with us, and you can watch that entire show on our website or YouTube channel.
ANALYST FORECASTS LOW ELECTRIC PICKUP SALES
We got a fascinating study of the electric pickup truck market from Warren Browne, an automotive consultant. He points out that there will be 9 electric pickups in the U.S. market by 2023. And they’re going to have an average transaction price of over $67,000 including incentives. That’s $20,000 more than the average transaction price of a crew cab, 4×4 pickup with a gasoline engine. But none of the electrics will have a 4-foot by 8-foot bed, which is kind of a litmus test for full-size pickups. They won’t have regular cabs, extended cabs or chassis cabs, either. A full-size bed and different cab sizes are critically important for the fleet market, and for a lot of retail customers too. That’s why Browne forecasts that all these pickups, which includes the Cybertruck, F-150 and GMC Hummer, will only generate sales of 40,000 units in 2023. That’s all of them together and it’s not a lot of sales. The segment will grow over time, but if Browne is right, those trucks are going to lose a lot of money for the first few years.
V2V COULD BE BIGGEST SAFETY BREAKTHROUGH IN HISTORY
V2V or vehicle to vehicle communication could be the biggest breakthrough in automotive safety, even more important than the seat belt or airbag. That’s because V2V could make it almost impossible for cars to crash into each other. The Federal Communications Commission in the U.S. wants to use part of the 5.9 gigahertz radio spectrum to increase Wi-Fi availability and speeds. And it wants to use the remaining part for C-V2X, or cellular vehicle-to-everything communication. V2X means your car could communicate with motorcycles, pedestrians, busses and even traffic signals and signs. V2V technology was first demonstrated 20 years ago but it was never implemented because of too much fighting over who gets what part of the 5.9 spectrum. Hopefully, the FCC will settle this once and for all because we could see a dramatic reduction in accidents and traffic fatalities.
GM REVEALS HUMMER EV MARKETING STRATEGY
We’ve got more details about GM’s strategy for selling the GMC Hummer EV and I think we know why only half of GMC’s dealers have signed on so far. First, GM gets to keep the $100 registration fee for itself, it’s also asking dealers to stick to a no-haggle price so there’s only one price and lastly, some dealerships just flat out won’t be able to sell the Hummer because the local electrical grid can’t handle fast chargers. And that’s on top of the costs related to sales, service and charging we mentioned the other day that dealerships will have to fork over. But there’s still time for more to jump on board. The first examples, called the Edition 1, go into production soon but are billed as 2022 model year vehicles and the full Hummer EV lineup won’t be complete until 2024.
GM CONSIDERS ELECTRIC MID-SIZE TRUCKS
And in other GM EV news, it sounds like we’ll also see electric versions of the automaker’s mid-size trucks. GM President, Mark Reuss, said it will build EV trucks with a different package than the Hummer for the Chevrolet and GMC model lines, which “… then trickles down into midsize trucks such as the Colorado and Canyon.” Autoline viewer Lambo2015 wondered if Ram should take the same approach, of electrifying a small or mid-size truck first, because there’s already a lot of contenders in that space. Well, it looks like others had that thought too.
BENTLEY & ASTON EXPAND OUTSIDE OF CAR BUSINESS
Expanding model ranges and increasing prices are ways for an automaker to generate more income, but there’s risk involved, just ask Nissan. And it’s probably why we’re seeing Bentley and Aston Martin branching out into new areas. Bentley is making luxury jewelry stamped with its logo and Aston is building houses. But they’re still tying these items into their automotive operations. Bentley says the color of the stones it’s using match nicely with some of the paint colors already in its catalog. So, for as little as 6,000 euros your jewelry can match your car. And Aston Martin’s homes can have a specially designed lair to proudly display your favorite Aston Martin. Its first house, called Sylvan Rock, being built on 55 acres in New York is expected to be done late next year and has a price tag of $7.7 million.
BMW & VW HELP DEVELOP SUSTAINABLE MINING
Social responsibility is becoming a bigger issue for companies these days and here’s a few examples. In the Democratic Republic of Congo, a group of companies including, BMW, Volkswagen, BASF and Samsung, have started a sustainable mining initiative called “Cobalt for Development.” The program will train more than 1,500 cobalt miners by the middle of next year in environmental, social and governance aspects for responsible mining. None of the companies will operate the mines. The goal is to better understand responsible mining, how to improve living and working conditions for miners and how to create a sustainable supply chain.
GREENPEACE CRITICIZES CHINA’S EV BATTERY RECYCLING
And over in China, which leads the world in EV sales, the environmental organization, Greenpeace, says the country needs to do a better job of recycling and repurposing batteries for electric vehicles. The group says while EVs are important for environmental reasons, production of batteries is energy and carbon intensive and puts a big strain on the supply of raw materials like lithium and cobalt. Greenpeace says that repurposed batteries could save 63 million tons of carbon emissions by not having to build new batteries. And it says that global demand for energy storage could be met by old EV batteries by 2030.
ELECTRIFIED CARS OUTSELL DIESELS IN EU FOR FIRST TIME
Only five years ago, diesel powered vehicles in Europe accounted for over half of new car sales. But after the VW emission cheating scandal, they fell out of favor and for the first time ever, electrified vehicles outsold diesels in the EU in September. According to JATO Dynamics, hybrids, plug-in hybrids and electric vehicles accounted for 25% of all new sales last month, just barely edging out diesels. While overall sales in Europe were up a little over 1% in September, electrified sales skyrocketed 139% compared to a year ago. European countries are offering big incentives for EVs, so this trend is going to continue.
And that brings us to the end of today’s show, thanks for watching and have a great weekend.
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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.