AD #3598 – SAE To Standardize Tesla’s NACS; GAC Develops Ammonia Engine; Car Brand Loyalty Down, But Not Tesla

  

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

CAR BRAND LOYALTY DOWN, BUT NOT TESLA
Is the auto industry in a funk? Has it stalled out? Those were words used by Tom Libby, Associate Director of S&P Global Mobility, during a presentation about brand loyalty trends for the first third of the year. In fact, this chart shows that brand loyalty is down about 5% since before the pandemic hit and interestingly, the performance of brand loyalty closely mirrors the inventory levels of automakers. That makes sense; as vehicles became harder to find, customers were more likely to cross-shop another brand. But I don’t think these numbers are all that disappointing. Sure automakers would like to be less constrained for certain components, like semiconductor chips, but they’ve also enjoyed record return on sales. Since inventory was tight, they didn’t have to discount cars. And because of that the old norm of 55 to 65 days of inventory are probably over. Now let’s shift back to the loyalty trends. When you look at both mainstream and luxury brands about half of buyers are return customers to those brands, meaning the other half are defecting to another brand, but remember someone could still stay under an automaker’s umbrella, like going from a Chevy to a Buick, which is actually much more common than staying with a particular brand. And here’s another bragging point for all the Tesla fans. Its loyalty is much higher than any other brand, mainstream or luxury, and without Tesla in the equation when talking about total loyalty to all EVs, the rate drops off significantly. This means that Tesla is stealing a lot of customers from other brands and most interesting to me is that they’re mostly coming from mainstream brands and the Japanese automakers are being hit the hardest. Not having many EVs in their lineups is hurting them. And one last bit of interesting data is this chart showing customer loyalty to body type. It’s surprising to see how level everything has been for the last 4 years, especially sedans. 

SAE TO STANDARDIZE TESLA’S NACS
Tesla’s North American Charging Standard or NACS is quickly moving toward becoming the standard charger design in North America. SAE International announced it’s going to standardize the NACS connector, which is the next step before forming a way to validate and maintain the system. But it also means that any supplier or manufacturer can use, build, or deploy Tesla’s plug. So, let’s hope this change over also greatly improves the charging experience at non-Tesla charging stations.

VOLVO ADOPTS TESLA’S CHARGING SYSTEM
And yet another automaker is adopting Tesla’s charging system. Volvo announced it will equip the EVs it sells in North America with NACS ports starting in 2025. Volvo owners will also have access to 12,000 Tesla Superchargers in the U.S. and Canada starting next year. Volvo is the first European automaker to adopt Tesla’s charging system and the fourth major OEM overall following Ford, GM and Rivian.

SMALL PICKUPS PERFORM POORLY IN REAR SEAT SAFETY
Small pickups performed poorly in rear seat safety tests done by the Insurance Institute for Highway Safety or IIHS. None of the five trucks tested earned a good rating. The Nissan Frontier earned an acceptable rating. The Ford Ranger was rated marginal. And the Chevy Colorado, Jeep Gladiator and Toyota Tacoma all earned poor ratings. The IIHS only tested crew cab versions of the trucks. The ratings are based on the IIHS’s updated moderate overlap front crash test it launched last year, which now includes rear seat protection. It found that the dummy’s head would come dangerously close to the front seatback and that data showed a risk of neck and chest injuries. The IIHS says these issues indicate that better seat belts are needed in the rear, like the more advanced ones used in front seats.

COX AUTOMOTIVE INCREASES FULL-YEAR U.S. SALES FORECAST
Thanks to improving inventory, car sales are rebounding in the U.S. According to a new forecast from Cox Automotive, sales in the first half of the year will hit 7.65 million units, up 11% compared to a year ago. And because the first half was stronger than expected, Cox is increasing its full-year forecast to 15 million units, up from 14.1 million previously. A big reason for the improvement is an increase in inventory levels, which are up 70% compared to last June. Another big driver of the increase is the fleet market. Fleet sales are expected to increase 40% in the first half compared to last year, while retail sales are only expected to increase 3%. Cox is also forecasting that BEV sales will pass 1 million units for the first time this year in the U.S. In the first half, they’re expected to fall just shy of 500,000 units. BEVs now account for nearly 7% of the new car market.

TESLA ON PACE FOR RECORD QUARTER IN CHINA
And speaking of EV sales, Tesla’s strategy of slashing car prices to boost sales is paying off in China. According to an analyst with China Merchants Bank International Securities, Tesla’s sales will hit 155,000 units in the second quarter, which is 13% more than the record it set in the first quarter. And Deutsche Bank is forecasting about the same for Tesla in China. And it’s growing sales even though its BEV market share is shrinking in China as more models hit the market. It’s now below 14% share, down from 16% in the first quarter of the year. Tesla will reveal its global sales numbers over the weekend.

GAC AUTO DEVELOPS AMMONIA POWERED ENGINE
There will still be demand for ICE powered vehicles for many years to come, which is why we’re seeing investment in things like synthetic fuel and now Chinese automaker GAC says its developed a viable engine for passenger cars that runs on ammonia. It’s a 2.0L unit that burns liquid ammonia, producing 120 kW or about 160 horsepower, while reducing carbon emissions 90% compared to conventional fuels. GAC says it solved previous issues with ammonia, like low flammability and high nitrogen oxide emissions. But like synthetic fuel, the real issue will be building an infrastructure for ammonia. 

GM DEFENSE DEVELOPS ULTIUM-BASED ENERGY STORAGE UNIT
GM Defense, a subsidiary of GM, has a goal to generate a billion dollars a year in revenue by 2030 and it’s been on a bit of a tear recently. In the last year, it’s announced at least 4 new projects, including a new deal with the U.S. Department of Defense for prototype energy storage units. Based on GM’s Ultium platform, they can use hydrogen- or fuel-powered generators as well as stationary and mobile batteries to power equipment or create mini microgrids in remote areas. If the project is a success, GM Defense will supply the storage units to the U.S. Marine Corps. 

A programming note here. Autoline will shut down next week for our summer break, so there won’t be any Autoline Dailies or After Hours next week. But we’ll resume our normal schedule on the 10th of July. And that wraps up today’s show, thanks for watching.