Trade News

Stress test for the EV transition

A business' survival is dependent on smart risk management. As the auto industry takes its biggest risk in the era of mass production — the electrification transition — this week's Automotive News highlights the magnitude of the bets being made.

Ford Motor Co., for example, for the first time publicly disclosed how much money it lost in its Model E electric vehicle division last year ($2.1 billion) and how much it expects to lose this year ($3 billion). Offsetting these large losses, if Ford's projections hold true, will be large profits from its Ford Blue internal-combustion arm and its Ford Pro commercial business. A cynic might say Ford is chasing bad money with good, as the company plows those divisional profits into EV-related investments such as new factories and R&D on alternative battery chemistries. But that is a risk the company is willing to bear, and it is confident the payoff is not far away.

Newcomer …

DETROIT — The election of Shawn Fain as the UAW's fifth president in five years could upend what are already expected to be difficult contract negotiations between the union and Detroit 3 automakers later this year.

But his razor-thin margin of victory over incumbent Ray Curry — Fain won by fewer than 500 votes and received the support of less than 7 percent of the UAW's membership — could make it tough to rally a disgruntled membership eager to move beyond the union's troubled past.

"No one can declare they have a mandate," said Marick Masters, a business professor at Wayne State University in Detroit who specializes in labor issues. "The membership is obviously divided. I think the No. 1 challenge facing Fain is to unite the membership behind a bargaining strategy."

Fain, who was sworn in on Sunday, will have to hit the ground running. Union leaders from around the country will gather this week for a special bargaining convention, where they'll vote o…

The CEO of NIU Technologies discusses the growth of the micro-mobility market and the public’s changing perceptions of solutions like bikes and scooters. The technology’s cool factor, he said, encourages new users but might have a downside.

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I've covered the auto industry for a long time, but mostly from the factory, automaker, supplier or Wall Street perspective. Before I got to Automotive News, I probably wrote more about the consumer experience than the dealer experience. That all made sense when I was writing for general interest newspapers or a financial wire service.

But I've always admired the entrepreneurial spirit of auto dealers, and I'm glad to have more exposure to them since I joined Automotive News almost four and a half years ago.

I remember David Hult, CEO of Asbury Automotive, before the pandemic talking about buying a used car from Carvana, just to learn what the experience was like and gauge how it stacked up against trying to do the same on his brand's site. Compared to hiring a consultant whom you may or may not fully trust, the return on investment of that experience had to be off the chart.

So it's through the lens of that example that I look at…

In the last two months, Automotive News and other publications have reported on tensions between automakers and their dealers. This doesn't involve all automakers, but recent statements from a few have put many dealers, state and metro dealer associations and the National Automobile Dealers Association on high alert:

What is going on here?

Tension between automakers and their dealers is not new. There will always be differences of opinion on how best to take care of customers and win in the marketplace. In fact, automakers and dealers that address these differences head-on and have open dialogue regarding their resolution have proven over time to be the most successful.

Today's tensions are different. They are not rooted in the conventional give-and-take over cost shifts or how the earnings pie is divided, but rather in threats that go to the very core of the franchise system that underlies the factory-dealer relationship.

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Technology is making in-vehicle digital cockpits more intelligent by using deeper machine-learning capabilities to create more robust occupant monitoring features and other systems.

The advancements were on display at the InCabin Phoenix conference held this month.

The three-day event, hosted by AutoSens, drew companies from around the world to share new in-cabin technology, spanning deeper machine-learning capabilities to more robust occupant monitoring systems.

Novelic, a radar and sensor company in Serbia, was at InCabin Phoenix to highlight the capabilities of its radar automotive cabin monitoring system.

The system, currently undergoing testing in Europe and the U.S., can detect a child left in the car and includes other safety features such as an intruder alert and the specific location of other passengers sitting in the vehicle.

The company's radar system can provide a suite of in-cabin monitoring …

The $1 trillion Infrastructure Investment and Jobs Act from late 2021 captured public attention for funding a wave of electric vehicle charging services. But buried deeper inside was also a mandate for a new technology that has nothing to do with EVs.

The law calls for a final rule to be issued next year requiring all vehicles sold in the U.S. to have the ability to passively detect when drivers are under the influence of alcohol and prevent them from driving.

That's a piece of technology that does not exist yet — at least, not as a commercialized market-friendly original-equipment vehicle component.

So the auto industry is scurrying to come up with the technology. And one global supplier, Asahi Kasei, may have a head start in the race.

The Japanese chemical and electronics company has conveniently had a Swedish subsidiary working on alcohol and gas detection sensors for other applications for 25 years.

Asah…

Swiss instrument supplier Inficon has been detecting air leaks for years — on air conditioners, refrigeration, airbags and transmission housings — to look for manufacturing flaws and toxic chemicals. Now the auto industry is asking the company to find leaks in a booming new segment: electric vehicle batteries.

And it's not about air getting out. It's about the possibility of water getting in.

Rainwater splashing into a battery enclosure from the road surface or lake water seeping in while the owner of an electric SUV launches a fishing boat can potentially ruin a big battery.

The question facing automakers and battery suppliers all over the world now is how to make sure something the size of a mattress hasn't ended up with a tiny leak in its seal during mass production.

Inficon's solution is to apply a technology it's been using for years on other products to batteries coming down the assembly line. It pumps helium into …

DETROIT — Ford Motor Co. last week confirmed what many had long assumed: Its electric vehicles are big money-losers — for now.

But in re-segmenting its earnings reports to disclose profits and losses for its electric, internal combustion and commercial vehicle businesses, the automaker is giving Wall Street a more detailed road map of what makes it successful today and how it plans to become an EV leader in the future.

Ford said its EV business unit, called Model e, is expected to lose $3 billion this year. That contrasts with forecasts of $7 billion in earnings before interest and taxes for the combustion unit and $6 billion for its commercial business.

The projection would bring the total amount lost on EVs to $6 billion from 2021 through 2023.

Still, the company stood by its goal of earning an 8 percent profit margin on EVs — and 10 percent overall — by the end of 2026.

"It shouldn't come as a shock; we know it's going to be difficult …

A Northern California dealership has tapped into the work-from-home trend to solve a hairy challenge — sourcing used vehicles.

Toyota Walnut Creek recruits stay-at-home parents and other remote workers to scour Craigslist, Facebook Marketplace and other social media sites for private sellers looking to offload their cars, crossovers and pickups.

The commission-based employees message the sellers online, collect vehicle information and work with the store's used-vehicle department to make offers. Sellers are then directed to the San Francisco-area store to complete the transaction.

General Manager Brad Barnett said soaring prices at auction required creativity in acquiring used vehicles. Barnett looked outside the box for a fix, turning to an unconventional work force — homemakers and moonlighters looking for online work.

The half-dozen employees in Toyota Walnut Creek's At-Home group were recruited via referrals and have never been to the store,…

Ford says its BlueOval City manufacturing plant in Tennessee will be able to produce 500,000 electric pickups per year when it comes online in 2025. Dealers get a glimpse of Ram’s midsize EV pickup. Plus, California service director Lamont Harris talks about building a family culture by listening and taking notes.

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