EVs are making this a very uncomfortable time |
Anybody who thinks the transition to electric vehicles will be soft-n-easy had better read this week’s issue closely.
We tell you about the change on a number of fronts this week.
It’s fair to say that a few decades ago, the Detroit auto industry freaked out when it discovered what an amazing machine Toyota was in how is built cars, designed them to be built smoothly and worked constantly to bring down costs.
But we tell you on Page 1 that Toyota is now doing its own freak-out as it discovers what an amazing machine Tesla is in turning out EVs. Toyota is overhauling its organization to catch up with Tesla.
But turn the page and you’ll read this news: Tesla itself is now rethinking how it builds EVs. Elon Musk told the audience for his March 1 Investor Day presentation that Tesla intends to launch a new vehicle platform that will cost half what Tesla’s older platforms cost to build. (And by the way, it’s those older Tesla models that are freaking Toyota out.)
The point isn’t “who’s the best?” The point is that everything’s up for reconsideration.
Nissan, which helped light the fuse on the EV segment more than a decade ago, is also rethinking its North American manufacturing and sourcing strategy for EVs, we report on Page 3. It will involve an overhaul of its production lines, product lines and supply lines here.
The necessary changes can be abrupt.
The situation at Stellantis’ Jeep Belvidere plant outside Chicago provides a good example. Belvidere has turned out classic models since 1965, like the original Dodge Charger, the Chrysler Imperial and New Yorker and the Dodge Neon. And since 2007, Belvidere workers have been pumping out Jeeps.
But the plant just went dark as Stellantis prepares for an EV future.
In a story on Page 4, Stellantis CEO Carlos Tavares acknowledges that such transition is “very uncomfortable,” but it must be done.
“The reality of the transformation of the market is the reality that we need to face,” Tavares told reporters in response to questions about Belvidere. “And that’s something that we should not run away from.”
In Monday’s Automotive News:
Flexing some political muscle: Auto dealers are concerned that automakers may attempt to circumvent them by selling directly to consumers or by marketing factory-direct subscription services after a vehicle sale. Dealers are pushing back, mobilizing state associations to go to their legislatures to try to revise laws to clarify what factories can and can’t do. Automotive News looks at various bills making their way through state legislatures.
Rivian won’t play the price war game: Or so says CEO RJ Scaringe. “We feel confident in the value proposition of what we’re delivering at our pricing levels today,” Scaringe said on the company’s fourth-quarter earnings call, while also noting that Tesla’s price cuts came after increases last year. Automotive News explains that while the current climate of higher interest rates generally reduces consumer demand, Rivian has an order backlog that will take until 2024 to fulfill. “The demand backlog we have is very robust,” Scaringe said. “It gives us a clear line of sight well into 2024.”
Weekend headlines
Our Next Energy to provide energy storage for Berkshire Hathaway project in W.Va.: Electric vehicle battery startup Our Next Energy will supply its new energy storage products to a $500 million Berkshire Hathaway Energy solar-powered manufacturing hub in West Virginia.
GM job cuts: General Motors eliminated a “small” but unspecified number of salaried and executive positions for what it said were performance-related reasons. A company spokesman said the automaker is focusing on accountability and efficiency in what it’s calling “a critically important year.”
Good news for Tesla, GM on loyalty: General Motors and Tesla were the big winners in the 2022 Automotive Loyalty Awards, with Tesla topping Ford for U.S. brand loyalty for the first time, according to S&P Global Mobility. GM won the “Overall Loyalty to Manufacturer” award for the eighth-straight year.
CDK outsourcing plan: Retail technology giant CDK Global will unload an undisclosed number of its employees onto Genpact, a global business process outsourcer, as part of its continued “fit and focus” strategy to reorganize and boost efficiency. Some jobs will be lost though the company also said it expects most affected employees will continue working for CDK through Genpact.
March 8, 2019: The last Chevrolet Cruze compact sedan — built in Lordstown, Ohio, two days earlier — is loaded onto a car carrier in the plant’s parking lot. It was destined for Sweeney Chevrolet in Youngstown, Ohio. It had already been sold, but its owner wanted it displayed at the dealership so people might swing by and see it.