AD #3847 – Ford Capri Has More Range Than VW Counterpart; Most China EVs Lose Money; OPEC Living in Fantasyland

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

MOST CHINA EVS LOSING MONEY
There are at least 137 different brands of electric cars in China. But only two of them are profitable right now, BYD and Li Auto. Even so, Chinese automakers are making rapid progress in cutting costs. Despite a price war that slashed car prices by 13.4% over the last year, the average profit margin for Chinese automakers actually rose by one and a half percentage points to 7.8%. They’re cutting costs quickly by separating software from hardware development, by taking risks, by becoming more vertically integrated and by working maximum overtime–up to 140 hours of overtime a month. They’re also doing it by pressuring suppliers. One supplier to BYD told Autoline that BYD sources its components every 6 months, meaning suppliers have to cut prices every 6 months or risk losing their business to a competitor. But the future still doesn’t look bright for most of the companies. Alix Partners predicts that by 2030, only 19 of those 137 brands will be profitable.

CONNECTED CARS FALL SHORT OF REVENUE HOPES
Automakers are counting on connected cars to generate up to $200 billion a year in new revenue. But so far those cars are only generating about $6 billion a year, according to S&P Global Mobility. That’s still a lot of money, but it’s not producing the return on investment that the auto industry expected. And a key reason for that is concerns over data privacy. General Motors, for example, got into hot water when customers discovered OnStar was collecting data on how they drive and that info was sold to insurance companies. So instead of monetizing data, automakers are concentrating more on subscription services and paid upgrades. Last year, 30 brands globally began offering paid updates for the first time. Automakers are keen to make this all work. If they can convince used car owners to pay for upgrades, they could open up a significant source of revenue.

IIHS SAYS LANE CENTERING NOT SAFER
A new study from the Insurance Institute for Highway Safety, or IIHS, found that partial automation systems don’t do much to prevent crashes. It’s referring to features that work constantly to keep a vehicle in a desired position on the road, like lane centering. On the other hand, the IIHS says crash avoidance technology, like automatic emergency braking, blind spot warning and lane departure prevention, do help to reduce crashes. The Highway Loss Data Institute, which is part of the IIHS, looked at property damage liability claims, which are for damage to other vehicles hit by the insured driver. It did this for BMW and Nissan vehicles. For 2017-2019 Rogues equipped with AEB and forward collision warning, the claims were 8% lower. However, there was no benefit to models equipped with Nissan’s ProPilot partial automation system. And the findings were similar with BMW. 2013-2017 BMW and Minis equipped with AEB and forward collision warning, reduced collision claim rates 7% and property damage liability claims by 13%. But there were no benefits with BMW’s partial automation system.

  

FORD CAPRI GETS MORE RANGE THAN VW COUNTERPART
Ford revealed the all-new Capri for Europe, its second MEB-based EV to come from its partnership with Volkswagen. It’s most closely related to the ID.5, but the styling of the two are quite different. While we agree that its silhouette looks a lot like the Polestar 2, we also see design influence from the original Capri in the facia and treatment around the rear windows. The interior is quite different from the ID.5 as well. But things like the motors and batteries are all VW. The RWD Capri features a 280 horsepower electric motor and a 77 kWh battery pack. It will do 0-100 km/h in 6.4 seconds and has up 627 kilometers or 389 miles of range on the WLTP test cycle. Somehow Ford is doing something different than VW because the RWD Capri has 71 kilometers or 44 miles of range more than the rear-drive ID.5 with the same motor and battery size. The AWD Capri has two electric motors that combine for nearly 340 horsepower and a 79 kWh battery. This setup will do 0-100 km/h in 5.3 seconds and has up to 592 kilometers or 367 miles of range. No word on when the new Capri launches but it should go into production soon alongside the Explorer EV in Germany.

BMW TROUNCES MERCEDES, AUDI IN EVS
BMW is leaving its German rivals in the rearview mirror when it comes to EV sales. In the second quarter of the year, BMW sold nearly 108,000 BEVs globally, which is up 22% compared to a year ago. Meanwhile, Mercedes’ EV sales dropped 25% in Q2 to 45,800 units and Audi sold 41,000 BEVs which was flat from a year ago.

OPEC LIVING IN FANTASYLAND
OPEC is very bullish about demand for oil but other experts think it’s living in Fantasyland. OPEC is forecasting that global oil demand will grow by 2.25 million barrels a day this year. But the International Energy Agency reports that actual global demand only increased by 710,000 barrels a day in the second quarter. And it says that global oil demand will grow by less than 1 million barrels a day this year and next. That’s also in line with the Joint Organizations Data Initiative, which tracks oil demand in 53 countries. It’s also forecasting that global oil demand will grow by less than 1 million barrels a day. Now the question is, will OPEC produce oil based on its forecast, or will it change to the reality of what’s really happening in the marketplace.

BYD PREPS PREMIUM SUV FOR EU MARKET
BYD’s premium off-road brand Fang Cheng Bao has a new compact electric SUV that’s worth checking out because it’s eventually supposed to enter the European market as a rebadged Denza, which is another brand under the BYD umbrella. Called the Bao 3 it’s about the size of a Jeep Cherokee. Two electric motors provide AWD and combine for about 440 horsepower, which helps it go from 0-100 km/h in 4.9 seconds. The battery is a nearly 79 kWh LFP pack that provides up to 510 kilometers or 316 miles of range on China’s CLTC test cycle. The Bao 3 is supposed to hit the Chinese market this year with a starting price around $30,000. The Denza version for Europe will likely cost more because all Chinese EV imports had higher prices in Europe even before the new import tariffs. But if we apply the new 17.4% tariff that all BYD imports are hit with, it would add about $5,500 to the price.

GEN AI CATCHES DEFECTS EARLY
Generative AI is taking the world by storm. And while so much of the public focus has been on programs like ChatGPT writing jokes, or Dall-E coming up with wild pictures and graphics, gen AI is making its way into the auto industry in a variety of areas. One company that really caught our attention is Viaduct, which uses generative AI to look for patterns in manufacturing to predict where automakers face a potential defect or recall. David Hallac, the CEO of Viaduct explains how it works.

“I would say there are 3 main pillars of data sources that we leverage. There’s the manufacturing and assembly data, there’s the telematics data, and there’s the service and warranty data. And generally what we use our AI for is to detect patterns and correlations and issues that may be emerging in this data that do not seem obvious to the human eye.”

David Hallac says it takes about a month for Viaduct to set up a system at a company, but after that it can start finding problems instantaneously. He says a half dozen automakers and a couple of Tier 1 suppliers are already using their services because it can catch problems in the field and trace them back to the plant, the machine or the supplier that caused the problem. He says that generative AI will not replace human beings, but it will replace humans who are not using AI. Want to learn more? Click the link in today’s transcript or description box to get the full interview.

While that brings us to the end of this show, don’t forget to tune into Autoline After Hours at 3PM EST today. We’ll be looking at other ways AI can improve the auto industry as well as VTOL or vertical takeoff and landing aircraft. Hope to see you there and thanks for tuning in.