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Runtime: 11:24
0:00 Auto CEO’s Not Ready to Throw the Book at China
1:14 Mercedes Just Keeps Its Head Above Water
1:57 Mercedes is Cutting EV Targets & Updating ICEs
2:36 Rivian Could Run Out of Cash in 2 Years
3:32 Lucid Needs 5X Sales to Break Even
4:42 GM Rushing to Make PHEV Pickups
6:31 Ram 1500 Drops V8, Adds Automated Driving
9:40 Lotus Going Public Through a SPAC
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AUTO CEO’s NOT READY TO THROW THE BOOK AT CHINA
Politicians in the U.S. and Europe are talking tough about increasing import tariffs on Chinese vehicles. But some auto execs are saying, “Hold your horses.” They’re not on board with blocking the Chinese. Stellantis CEO Carlos Tavares says he doesn’t want to see the U.S. raise the tariffs on Chinese cars because he’s concerned about a potential backlash. He says Stellantis is a global company, so even if the U.S. raises protectionist barriers, Stellantis is not going to be protected everywhere else. Instead, Tavares says everyone needs to learn how to compete with Chinese automakers head on. And Ola Kallenius, the CEO of Mercedes-Benz, says any increase in protectionism against China would be destructive for Europe. Of course, they both have a vested interest in not upsetting Chinese officials. Stellantis is investing in Chinese automaker Leapmotor for EV technology. And one out of three Mercedes-Benz’s sold in the world are sold in China.
MERCEDES JUST KEEPS ITS HEAD ABOVE WATER
Speaking of Mercedes-Benz, it reported its 2023 earnings this morning, and while the numbers are solid, the company is kind of treading water. It sold over 2.4 million vehicles last year, about 35,000 more than in 2022. That brought in €3.2 billion more in revenue, for a total of €153 billion, but that’s up only 2%, which doesn’t even cover the rate of inflation. Costs also went up, so the company’s €19.6 billion operating profit was down nearly 4%, and its net profit of €14.5 billion was down almost 2%.
MERCEDES IS CUTTING EV TARGETS & UPDATING ITS ICE LINEUP
Mercedes is also rolling back its EV plans. Ola Kallenius says EV demand is slowing and that it will be many years before BEVs reach cost parity with ICE vehicles. Mercedes had set a goal of having EVs account for 50% of its global sales by 2025 but now it expects to hit that target later in the decade. Because of that, the automaker will continue updating its ICE lineup into the next decade. Last year it sold 240,000 BEVs, which accounted for about 12% of Mercedes-Benz’s car sales.
RIVIAN COULD RUN OUT OF CASH IN TWO YEARS
Rivian and Lucid also reported their financial earnings for last year and while there’s a lot we could talk about, let’s focus on the most important numbers: how much cash they have and how fast they’re burning through it. Rivian has $7.8 billion in the bank, which is a significant war chest. However, last year it burned through $3.7 billion of it. And at that rate it has a little over two years of cash to keep going. But the company is making progress. Thanks to cutting its fixed and variable costs and earning more revenue for every vehicle it sold, it managed to cut the cost of making its vehicles by $80,000 per unit. However, it’s still losing over $43,000 on every truck and van it sells. It’s really a matter of scale. Rivian just needs to sell a lot more vehicles.
LUCID NEEDS 5X SALES TO BREAK EVEN
Meanwhile, Lucid burned through $365 million in cash, and has just under $1.4 billion left over. So it has almost 4 years of cash to keep going. But it’s not making progress, in the sense that its total revenue went down last year as costs kept going up. It posted an operating loss of $3 billion, which was 19% worse than what is lost in 2022. And it doesn’t look like the situation will improve anytime soon. Lucid only sold 8,428 cars last year. This year it expects to make about 9,000. But just to break even at its current cost structure we estimate it needs to sell about 45,000 vehicles a year. So it has a long way to go.
GM RUSHING TO MAKE PHEV PICKUPS
This slowdown in EV demand has automakers scrambling. Autoweek reports that GM started a “crash program” to bring out plug-in hybrid versions of the Chevy Silverado and GMC Sierra. That will put it in a race with Ram to introduce the first full-size PHEV pickup in the U.S. Ram tells us that its plug-in Ramcharger will be out after the full battery electric version of the 1500 pickup, which is coming in the 4th quarter of this year. So, the Ramcharger won’t come out until the end of this year at the earliest and is more likely to launch in early 2025. Going back to GM, it’s also canceling plans to develop all-new versions of the Chevy Express and GMC Savana vans. They were supposed to be based on the BrightDrop Delivery van, which is built on the Ultium platform, and it’s unclear if GM will keep the current vans around longer, whose basic design goes back to the early 1970’s. Although GM’s not bringing the vans onto its Ultium platform, Automotive News reports that production of its BrightDrop vans will resume on April 1st in Canada after being offline since October due to a lack of batteries. But it’s not just plans for EV vans that GM is dropping. It’s canceling a small electric pickup as well that would have been about the size of a Ford Maverick. And speaking of a Maverick EV, Autoweek says it and the Bronco EV program have been put off until at least the early 2030’s. And it looks like most automakers are backing off the idea of a small electric pickup. Nissan is also putting off development of an electric truck that would have slotted below the Frontier.
RAM 1500 DROPS V8, ADDS AUTOMATED DRIVING
And that makes me wonder if Stellantis is taking the right approach with its four core platforms that can support multiple powertrain types? While there’s no doubt it will be less efficient than if it had developed dedicated platforms, it might have hit on the right strategy at the right time in the market to get the scale that it needs to make a profit. We just talked about how the all-electric Ram 1500, called the REV, will launch late this year, followed by the plug-in Ramcharger. But before either of those models hit the showroom floor, Ram is launching the updated pure ICE version. The two biggest pieces of news, in my opinion, are that it’s dropping the V8 completely and will be available with a Level 2 and 2+ automated driving system. The base engine is still the company’s 3.6L Pentastar V6. It’s now paired with a 48-volt mild hybrid system and produces up to 305 horsepower and 271 lb-ft of torque. But for customers that want to step up in power, the V8 has been replaced by Stellantis’ new twin-turbo 3.0L inline 6-cylinder engine, called Hurricane. It comes in two outputs. Standard output is 420 horsepower, while the high-output version makes 540 horsepower. That compares to the outgoing 5.7L V8, which made 395 horsepower. The 6-cylinder is also 90 pounds lighter, but it can’t tow as much even though it makes more torque than the V8 in both outputs. Max towing is now 11,550 pounds, down from 12,750. A new electrical architecture, called Atlantis, not only allows for more over-the-air update capabilities, but also the automated driving system I was just talking about. Ram doesn’t have any clever name for it. It’s just called Active Driving Assist. The Level 2 system requires the driver to have a hand on the wheel at all times, but Ram put sensors all over the surface so a light touch anywhere should keep the system engaged. The Level 2+ version is a hands-free system and will currently work on 125,000 miles of road in the U.S. and Canada. Both versions are bundled into other packages and owners will be able to use the service for three years before having to renew it. Styling wise, there’s not a whole lot that is different, but you may notice the bigger grille and RAM logo, which was also moved up higher in the grille and the interior gets a third screen for the passenger, like the Wagoneer, as well as a new center display and materials. With more standard features, starting price is up to about $40,000 for the base Tradesman and $87,000 for the new top-of-the-line Tungsten. We also had a chance to experience this truck in Austin, Texas and we’ll be posting a video about our thoughts on the new Ram 1500 soon.
LOTUS GOING PUBLIC THROUGH A SPAC
With all the EV startups having seen their stock prices crash, we thought SPACs had fallen out of favor. Apparently not completely. Geely is taking Lotus public through a Special Purpose Acquisition Company or SPAC. The sports car maker is expected to complete a merger with L Catterton Asia Acquisition Corp today and start trading on the NASDAQ tomorrow under the ticker symbol LOT. Lotus will even ring the opening bell which will be livestreamed if you want to watch it.
Autoline After Hours is going to be something of a free for all this afternoon. We’ve got two car critics coming on the show. Henry Payne from the Detroit News and Mark Phelan from the Detroit Free Press. They probably drive more cars every year than anyone we know and they’ve got something to say about what’s good, what’s bad and what’s downright ugly. So join John and Gary when the opinions start flying at 3PM EST today on the Autoline.tv website or on our YouTube channel.
But that brings us to the end of this show. Thanks for tuning in.
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All indications are that the Jeep 3.0 turbo works well, and gets a little better mpg than the 5.7 V8, (and a lot better than the 6.4). Still, it seems a mistake to discontinue the V8 in the pickups. I would expect the complex six to require a lot more expensive maintenance when it’s hitting 250K miles, or maybe way before that.
Is Rivian selling what they build, or are they piling up? If people are waiting in line to buy, they just need to increase production numbers. If they aren’t selling at today’s production rate, the company is in deep trouble. They sold 19,410 R1Ts and 23,437 R1Ss in 2023.
From everything I have read, Rivian is still struggling to increase production. Seems like they would have that ironed out by now. Even so, it appears that they will need to double sales to get to break even. Not sure that there is a large enough market for luxury EV pickups and SUVs for them to accomplish this. Especially with the strong competition in those segments. I hope they are not counting on the lower priced model they are developing to get them to the profit line. It brings another whole level of engineering expense, not to mention a new plant. And, if its not well received, the company is doomed. I think they need to find a way to be profitable with the two models they already have before launching the new model.
It seems that Ford has proven that sixes done right are very acceptable to most pickup buyers. Their 5.0 liter V8 only comprises about 10% of F-150 sales these days. The sixes probably help Stellantis meet their emissions targets more than the V8s did. And it will allow them to reduce the number of engine types they build. Plus, the sixes probably work better with PHEV technology than the V8s.
I just read that Dodge has developed a vehicle shaking mechanism for the Challenger/Charger EVs to go along with the exhaust sound generator and two-speed shifter. I understand their motivation for doing these things, but I can’t help but wonder if in 15 years we will all look back on this and laugh about the things some OEMs did to try to appease the ICE enthusiast holdouts. I don’t recall reading any stories about owners transporting sacks of horse manure in their horseless carriages to simulate the good ole days of horse-pulled transportation.
Yeah, the Ford 2.7t has been in F150s for about 10 years, and I haven’t heard many horror stories, so it must be doing ok.
Unless the base Rivians are exceptionally well equipped, they seem too pricey. The R1T is $79K base, $24K more than a base Lightning. The R1S is almost as expensive as a BMW iX, and I suspect the BMW is nicer. R1S is $4K more expensive than a Tesla X. If they cut prices, Rivian would lose even more money unless they reduce manufacturing costs.
As far as Lucid, their survival probably depends on how much money the Saudi government is willing to throw at them.
GM Veteran,
I agree that Dodge should not be putting in fake sounds or shakes to simulate having an ICE. An enthusiast is not going to like it anyhow and the general public would not understand the point of it. Things should just be what they are. If you are going to be a BEV Charger, own it. Or call it Coronet/Polara/Fury so that nobody laments the Charger name becoming a BEV. Fury would be a good name for a BEV.
I’ve had a Challenger, and if in the market for an EV, I’d consider an EV Challenger if it looked and and drove well. Fake noise and vibration would be a complete turn off, though, just like fake shifts with CVTs.
I’m wondering whether GM’s strategy, offering a straight 6 in their pickups (and still offering V-8s) is better than the Stellantis Hurricane’s, one choice option. While I realize that the Ram’s sixes are more powerful, unless the fuel mileage rivals the Chevy (which does provide a lot better mpg), I like the options offered by GM.
Having worked in Fords global engine group all I will say about the Dodge turbo inline 6 is that anytime to add force induction to an engine there are things within the engine that are significantly different. Things like better bearings, rings, head gaskets, heavier valve springs and oil squirters to help cool the pistons. Higher compression and heat takes a toll on an engine. If you buy a truck to just drive like a sedan it’s probably reliable enough. If you are doing any towing like 5000lbs and up I personally wouldn’t buy a turbocharged truck.
Also, the reduction of towing capacity of the Ram shouldn’t matter to most. Rule of thumb your tongue weight should always be 10-15% the weight of the trailer. So, if you tow 12,750 lbs tongue weight would be between 1275 and 1912 lbs. Max receiver weight is 500lbs and you can get up to 1000-1100 lbs with a distribution hitch. So you shouldn’t ever tow more than 11,000 lbs. anyway. So, the cut to 11,550 will only affect the ones using a 5th wheel hitch.
Hey for those interested in what ever happened to Nikola’s Badger truck. Here is a really interesting video if you have 20 min. I been following Heavy D and the Diesel brothers on You Tube for some time and he does appear to be an honest stand-up guy. He has an interesting take on Trevor Milton too.
Check it out its worth the watch.
https://youtu.be/Fl8L3kWCpFQ?feature=shared
Lambo,
That is my thoughts as well. I will not buy a Turbo powered truck for that reason. Turbos are great, until you consistently use them. Then you are in for a world of very expensive repair bills. I love I-6 engines as they are inherently smooth, but will not be a buyer of a Turbo I-6 for a truck. Also, if you are using the turbo all the time, you are not going to get good fuel economy anyhow and would likely be better off with a NA V8. I will be a Ford or GM buyer. Most likely GM as Ford forces you into their turbo V6 to get higher trim levels and towing capacity(which is exactly opposite of what I want). GM has those features and capacities with a V8 so they win.
I think a car, like Challenger or Charger would be a good application for that Jeep turbo six, but it’s not going to happen. With its small displacement, that engine will have very high pressure in the cylinders, especially the high output version. The Ford 2.7 apparently does ok, though, making 325 hp and 400 pound-feet of torque.
Essentially all diesels are now turbo, and they do ok with very high cylinder pressures, but mostly lower rpm.
Here is an example of why I question the use of such small engines in the GM Korean small CUVs.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=46679&id=46486&id=46572
The Mini 2 door is only a ~200 pounds lighter than the Envista, but the Countryman is 680 pounds heavier, and is taller.
Kit- A diesel engine block and heads are significantly different than a gas engine and run at much lower RPMS as you mentioned. We all remember how well GM did in 1978 when they tried to make the 350ci engine into a non turbo diesel. Took them until mid 80s to get it right and by then too much damage was done. So they cant handle the higher compression without also being built significantly different.
I would have no problem with a turbo gas if they were built like a turbo diesel but for passenger vehicles they try and keep the weight down and they are just not as robust.
Turbos. bearings and other wear surfaces have come a long way since the 80s but as Merkur was getting at if you need the power you don’t really get better effeciency. And when the turbo is spooling you generate a lot of heat.
I’ll take the less stress, less heat less complicated engine over a turbo everyday.
I remember a co-worker having a broken crankshaft in one of those Olds diesels. I think they used cast iron crankshafts in them, as with the gas 350, rather than forged steel, which is much stronger.
Yeah, when delivering max power, turbocharged gas engines have little fuel economy advantage over larger N/A engines. In the EPA ratings, though, the Jeep turbo six seems to do significantly better than the 5.7 V8.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=46679&id=46486&id=46572
The taller, wider, 1300 pound heavier Wagoneer with the six gets better mpg than the Grand Cherokee L with the 5.7 V8. I couldn’t find a case where both engines are used in the same vehicle. We should soon find out how the six does in the pickups.