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Runtime: 9:42
0:00 Milestone: U.S. EV Sales Top 1 Million
1:04 EVs Reducing Global Oil Demand
1:45 U.S. Mining Tied Up in Red Tape
3:07 GM Wants Workers Back in The Office
3:42 Lamborghini Adopts 4-Day Workweek
4:38 NIO Spins Off Battery Business
5:44 Bosch Using Generative AI in Manufacturing
6:29 VW Adds Bi-Directional Charging
7:52 Daimler Using Bus Batteries for Energy Storage
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
MILESTONE: U.S. EV SALES TOP 1 MILLION
Well, it’s official. For the first time ever, Americans bought more than a million electric vehicles in less than a calendar year. The National Auto Dealers Association reports that sales of EVs in the US through November hit 1,007,984 units. That’s up 50.7% compared to last year, while the overall market including ICE vehicles was up 12%. So EVs sales are growing 4 times faster than the rest of the market. Interestingly, the NADA says that franchised dealerships represented 39.7% of all the new BEVs sold so far this year. And that makes us sit up and pay attention, because when the NADA starts tracking the market share of EVs sold by franchised dealers, it’s a huge change.
EVs REDUCING GLOBAL OIL DEMAND
And all those EVs are starting to have an impact on the demand for oil. The International Energy Agency, or IEA, says that EVs now make up 13% of global vehicle sales and that number will grow to 40-45% by the end of the decade. All those electrics will reduce oil demand by 5 million barrels per day, which is more than Canada produces, and Canada is the 4th largest oil producer in the world. The IEA says the world will hit Peak Oil demand in 2030 which is 10 years sooner than it predicted in 2017.
U.S. MINING TIED UP IN RED TAPE
The US is tightening up its rules for which EVs qualify for the full $7,500 tax credit. If EVs use batteries or materials from China they won’t qualify for the full subsidy. Starting next month, some Tesla Model 3s will only qualify for half the credit. The obvious solution is to use batteries made in the U.S., but any company that wants to mine battery materials in the United States faces an entanglement of regulatory red tape. It takes 10 years to get through all the permits needed to open a mine in the country, compared to only 2-3 years in Canada and Australia. Automotive News reports that Ford and Rivian are urging the White House to speed up the process while maintaining environmental standards, and the White House is urging Congress to update the General Mining Act of 1872. The Department of Interior says the US urgently needs a modernized approach to approving new mines.
GM WANTS WORKERS BACK IN THE OFFICE
GM wants its salaried workers back in the office. At the beginning of the year, it told employees they had to be in the office three days a week, but they could choose which days. Now, CEO Mary Barra says they have to be in the office Tuesday, Wednesday and Thursday at a minimum, as long as they live within 50 miles of the office. The new policy goes into effect on January 8th. GM says it’s making the change “in order to meet critical business needs and retain company culture.”
LAMBORGHINI ADOPTS 4-DAY WORKWEEK
While GM is trying to get workers back into the office, Lamborghini is shortening the work week for people on the line. The automaker just reached a deal with Italian unions, where workers on two-shifts will alternate a five-day week with a four-day week, cutting out 22 days from their schedule each year. And three-shift workers will alternate between a five-day week with two four-day weeks, cutting out 31 days a year. Despite the reduction in work hours, workers are getting a 50% increase in bonuses and a one-time 1,000-euro bonus. Lamborghini is also hiring 500 more production workers to offset the shorter week. The work pace at Lambo must be quite leisurely. It sold 9,233 vehicles worldwide last year, so we estimate it makes about 2.5 cars an hour.
NIO SPINS OFF BATTERY BUSINESS
It looks like NIO could be giving up on making its own batteries. It had plans to supplement some of its vehicle production with batteries that it developed. But now the CEO of the company says that it will outsource all of the manufacturing of its own batteries and Reuters takes it a step further, citing sources who say NIO will completely spin off its battery unit and seek outside investors. Vertical integration can be a great thing because it gives companies flexibility and higher profit margins. But vertical integration also takes a lot more investment money. And if you don’t have the money, you can’t make the investment. NIO says it’s making changes at its battery unit to cut costs and improve efficiency. It also helps that China has the biggest and some of the best battery makers in the world and the EV startup is likely to continue to lean on its current suppliers, CATL and the CALB Group.
BOSCH USING GENERATIVE AI IN MANUFACTURING
Nearly half of Bosch’s plants already use AI in manufacturing for scheduling, monitoring and quality control purposes. But now the supplier is launching several pilot projects to integrate generative AI into its manufacturing. It will be used to create images to develop solutions for optical inspection of parts and to improve the AI it’s currently using. Bosch says the generative AI will reduce the rollout and setup of AI solutions from the current 6 to 12 months to just a few weeks. And depending on the size of the plant and what it produces, Bosch says the technology can lead to cost savings of six to seven figures per year and plant.
VW ADDS BI-DIRECTIONAL CHARGING
Volkswagen is launching bi-directional charging on its ID family of EVs in Europe. Any model with VW’s larger battery pack, which has 77 kWh of usable space, and ID Software 3.5 or higher now has the function. Models that have already been sold can also unlock bi-directional charging with an update to the new software. However, VW doesn’t say if that can be done with an over-the-air update or if you have to take it into a service center. At first it will offer a vehicle-to-home function, so your car can supply power to your house if you need it, which also requires an integrated Home Energy Management System and a home power station. Customers could add in solar panels and a battery storage system as additional sources of power for a home. In the future VW says it will add the ability for its EVs to add power back to the grid as well. And we think if more people actually knew you could earn money by doing that, EV adoption would pick up. Depending on where you live in the world and what your utility offers, we saw estimates that people could make as little as $120 in the US but as much as $3,000 a year in Denmark with bi-directional charging.
DAIMLER USING BUS BATTERIES FOR ENERGY STORAGE
And it’s not just for EVs. Stationary storage systems can also be charged during low demand times and then sell electricity back when demand is high. I think that’s why we’re seeing so much activity in the field and now Daimler Truck is creating energy storage systems from old electric bus batteries. 28 packs that are no longer suitable for use in its eCitaro buses are combined together for over 500 kWh of storage capacity. These storage systems could really be used for any number of applications, but one interesting scenario Daimler presents is using the units to store new batteries as well. The idea is a fleet would have a new battery in the storage unit, so it only operates low loads until it needs to be swapped out with an end-of-life battery or it’s there in case of an emergency.
But that brings us to the end of today’s show. Thanks for tuning in.
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I think I’d pass on the bi-directional charging, except maybe for emergency power during an outage. These batteries have a finite number of charge-discharge cycles before losing a lot of capacity, or failing completely, and I’d rather not shorten the life of the battery for a few dollars a year.
Another great example of how the US government involvement can create inefficiency. 10 years to just get the mining permits? The technology could be completely different by time the permits are issued. We are already seeing batteries using alternative compounds to try and lower costs. Yet people still think our government can effectively manage a national healthcare system. They do such a bang-up job with our retirement claiming to have depleted it every year and the veterans get such great care at the VA. Obviously if Canada and Australia can get it done in 20% of the time we need, something is seriously wrong.
Does the new tightened up its rules for EVs still include the lease loophole?
Totally agree with Lambo. Morocco has all the resources to make LFP batteries enough Lithium but largest reserves of phosphate and iron just need to keep Chinese companies from taking control. Canada has all the ingredients for all sorts of batteries and can get more mines on line pretty quick and an efficient stock market to get mines capital. Just need to keep the Canadian government to keep their grubby hands off it since they are just about as efficient as the American government but they are better than the Argentinian government.
It’s funny that lobbyist that represent dealer associations, are telling the admin to slow down and roll back some of the EV mandates and ICE bans in the US, only for EVs purchased from dealers are at an all time high and growing! This doesn’t mean that EV growth is coming on as fast as OEMs expected or wanted, but but the impression that they seem to be giving the administration, is that EVs aren’t selling at all, when the number indicate differently.
Yep, regulations for new mines in the US are cumbersome, probably written at a time when nearly all mines were for “more of the same,” like coal, iron ore, copper, etc. That needs to change with the times, as new and different resources are needed.
As far as health care, though, mentioned by Lambo, my experience has been much better with the government Medicare system, than with the private supplement and “Part D” coverage I have.
I agree about sharing my car battery with the grid. Spend $50,000 for a car and risk the most expensive part of it for $100 to $200 a year, even if the risk is very low? No thank you, but please go ahead if you want.
Bi-directional charging would be nice for handling power outages we have at the cottage, but we only have one or so short ones a year at home so not worth it here.
Canada is physically a bigger country than the U.S. and has 1/10 the population. It also has a history of mining and forestry for export, so it’s no wonder approvals can be faster. Let’s not get into the quagmire of who does and doesn’t do environmental stuff. No one does it well enough. As for getting your girdle in a knot about governments, just accept they are all incompetent and live your life accordingly. Take a chill pill. It’s not fixable, never has been, never will be.
Regarding the amount of time it takes for US for mines to come on line, I wonder if the long wait is as a result of the process being based on out dated legislation, the actions of activists to get the US out of the mining business or genuine concerns over worker safety? Or it could be all of the above! One way or another, it’s an unintended consequence of motivating the automotive industry and the buying US public into electric vehicles, built on these shores! Also, it’s an example of how much to the recent chip shortage, has put the industry and legislators on notice. Who would’ve thought that the auto industry, or the electronics industry as a whole, could be brought to a screeching halt, by something as small and simple as a computer chip! If all the automakers and electronics, manufactures could still build products, but they can’t ship them out to the by public, because of something so simple couldn’t be installed, due to it being supplied from another country who are having their own issues in producing what is needed here, it would only make sense to create those things at the point where they are both manufactured, and the point of sale. In an effort to control all aspects of the build process, some of those things, if not most of those things, have to be produced locally. So now that the government is pushing electric vehicles with all the various elements that create those vehicles and the batteries that hold that power, you have to drill and mine for them. Only to now learn, there is a 10 year wait to even receive all the proper permits to BEGIN mining! I’m sure when the admin envisioned having every aspect of the BEV being created in the US, they never thought/knew that the permit process for mines would take ten years! I also sure there will be any number of activists protesting the mining of such materials from their ‘back yards’, over concerns of their children and grand children, as well as the environment. The ironic thing about it, is the reason why there is this push to go to electric vehicles, is as a result of emissions, and what type of world is being left for individuals, children, grandchildren, and the environment! And so the world turns.
The U. S. regulations maybe did not completely have anticipated the results of their actions, but since there is no penalty (at least not yet) from obtaining the battery materials from a number of foreign countries, the U.S. really never has to have all their eggs in the American basket in order to have a successful EV strategy.
Bringing everything back to the same country of origin may not be in a country’s best interest. It is through free and open trade that political alliances and closer relations are formed. To do that with military requires a current and adventurous common enemy. I’d rather develop the relations with trade. It’s when a non-aligned country or just one source gets a monopoly on the product that you have a problem.
While it is a landmark hitting over 1 million EV’s for 12 calendar months, a little perspective please; using a typical SAAR of 15 to 16 million, all that gets you is around 6 and a half percent. It will continue to rise but not exponentially as some have said.
And those bidirectional battery systems, as others have said will probably degrade quicker. After all, they’re using depleted batteries for the after life of vehicles batteries to begin with.
Chuck thanks for putting some perspective on EV sales. As the goal was announced in 2021 to not have any ICE sales by 2035. Which to be on track would mean a sales increase of 7.14% each year. Here we are two years later and somewhere around 6-7% when we should be double that already. At the current pace we might be at 50% BEV’s by 2035. Which is fine that they set an aggressive goal that they can be easily rolled back. The problem is the position it puts the manufacturers in to provide what consumers want and what the administration is requiring them to make. Which can change with each election.
I believe it was 2020 (not long after the election, when almost every manufacturer said they had no new engines in development. They wouldn’t be dumping any more money into the development of any new gas engines. Well, that’s already been proven to be false, and they will likely have to rethink those plans in order to stay competitive as the EV mandates get pushed back. The company I work for is already seeing current programs being extended beyond their intended life cycle. Which tells me they need ICE vehicles for a few more years and haven’t been developing anything. They all just assumed that the EV version would be the next model to replace so many vehicles currently in production. Well, they just may need to develop a few new models to bridge that gap. Or us consumers will be stuck with what’s currently on the market until you buy a new EV.
@Lambo, “goal was announced in 2021 to not have any ICE sales by 2035” Has anybody ever see an explanation by the government of that goal? To me it seems unrealistic to mandate 100% of anything in a country of our size with its distance, its diversity in climate, regional population density, and so on.
Is there much point in developing new gas engines, even if a lot of gas engines will be used for many more years? These new, smaller displacement turbo engines are more complex, but no less thirsty than what they replace. A prime example is the Chrysler turbo six replacing the 5.7 V8. It will be interesting to see if the new Chevy V8 is any better than the old one. It’s seeming that gasoline engines are about as good as they are going to get.
Kit- ICE are as good as they’ll get if you don’t spend any money on development. I do agree that downsizing and throwing a turbo on doesn’t always solve the problem. Case in point I owned a Cadillac CTSV which had the Corvette engine and 6 speed manual gearbox. On the hwy I was getting 25 mpg but took a job 60 miles from home so I sold it and bought a Chevy Cruise with a tiny 1.4L turbo engine. It was a small but nice size go-to-work car. Was capable of getting almost 40mpg but in order to get that you had to drive 55mph. Well the highway I drive to work most people are moving between 75-80. At those speeds the car got 26mpg. So I gave up 300 HP to gain 1 MPG. I sold it after only a year and bought another CTS with the 3.6L V6 a nicer car and was able to still get 26mpg on the highway and still have some passing power at 70mph which the Cruise is basically tapped out at 75.
So, in the end the 5.7L all the way down to the 1.4L got basically the same MPG at 75MPH on the hwy.
I would really like to see what an engine could get today removing all the emissions equipment and just tuned for efficiency. That would be interesting.
Yep, big engines with tall gearing get almost as good of highway mpg as small engines. For my 1100 mile trip between FL and IN, going ~ 80 most of the time:
C7 Corvette, ~29
C8 Corvette, ~26
Mini Cooper S with 2.0 turbo, ~36
Then there are the hybrids which, because of the Atkinson cycle tuning, get great highway mileage, even though the hybrid system isn’t doing
much on the interstate.
Gen III Prius, ~44
2018 Camry LE, ~43
2022 FWD Highlander hybrid, ~33
For short trips and stop-and-go, things are much different. The small engine, non-hybrid Mini gets about double the mileage of the Corvettes. The big, heavy Highlander hybrid gets about 50% better than the Mini, and, of course, the Prius and Camry hybrid better yet.
I’m surprised the Cruise didn’t do better. It’s bigger and heavier than a Mini, but probably little, if any draggier.
Lambo said: “Kit- ICE are as good as they’ll get if you don’t spend any money on development.”
I meant ICE might be as good as they’ll get, even if you do spend money on development. We’ll see if the new Chevy V8 is actually any better than the outgoing one.
I’ve been wondering where the pretty sudden adoption of wide-spread turbocharging, together with much smaller-displacement engines comes from, and as Kit says, it’s likely not driven by better fuel consumption. Or maybe they perform better in a very narrow band, that can be optimized towards test cycles?
I suspect it’s more about cost and profits, though. As incredible as modern turbochargers are, spinning to 100K+ rpm, they’re cheap to boot.
This is an interesting youtube comparing the new Jeep turbo six with the “hemi” V8.
https://youtu.be/yBqeHCqp7DM?si=EGiyKkJ2swURVb1Z
The six surprisingly outperformed the V8 in the 3 ton Wagoneer in 0-60 times. Apparently the low rpm grunt significantly helped the low speed acceleration. “Shorter” gearing of the V8 would narrow the gap, but with the gearing compromise used for performance and mpg, the new six performed better, while getting ~10% better EPA mpg. I’ll see if I can find any mpg data other than EPA numbers.