The federal government is finally realizing that not all electric vehicles are created equal, BMW’s sales last quarter were a bit low, and CarMax swelling. All that and more in this version of Morning shift for Tuesday, April 11, 2023.
Device #1: Problem with MPGe
It sounds counter-intuitive, but the uptake of electric vehicles from automakers is adversely affect the average fuel economy of modern cars in U.S.A. In general, electric vehicles fall below the numbers across the fleet, regardless of their size or battery size. That allows companies to promote even thirstier internal combustion models, while supporting wasteful EVs like GMC Hummer as a good network for the environment, when they Is it objective?.
It’s a dire situation stemming from the fact that the Department of Energy gives pretty generous MPGe numbers to every EV. On Monday, the government finally proposed addressing that surveillance. From Reuters:
The DOE wants to significantly revise the way it calculates gasoline-equivalent fuel economy for electric hybrids and plug-in electric vehicles for use in the Bureau’s Average Business Fuel Economy (CAFE) program. National Highway Traffic Safety Administration (NHTSA).
The current system has not been updated in more than two decades.
“Incentivizing the use of electric vehicles can reduce gasoline consumption but overestimating such adoption can lead to increased net gasoline use as it allows for lower fuel economy among vehicles.” conventional, which accounts for the majority of vehicles sold to date,” the DOE said in its proposal. regulations.
The Miles Per Gallon Equivalence Rating (MPGe) is determined using values for national electricity, gasoline production and distribution efficiency, and driving style. […]
The Alliance for Automotive Innovation, which represents major automakers, warned last year that lowering values could have far-reaching effects and would discourage EV adoption.
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You can imagine how the “Alliance of Automotive Innovation” — an industry lobby comprised of manufacturers and suppliers that stymies progress to protect corporate interests — feels about this measure. We’ve covered AAI before, and the reason is that it will fight this tooth and nail, because it will make the members’ lives more difficult. Here’s how the DOE’s proposal will impact EVs already on the market:
The Volkswagen ID.4 EV with 380.6 MPGe currently under CAFE will get 107.4 MPGe under the DOE proposal, while the Ford F-150 EV drops from 237.1 to 67.1 MPGe and the Chrysler plug-in hybrid Pacifica reduced from 88.2 to 59.5 MPGe.
The Natural Resources Defense Council and the Sierra Club have petitioned for the change in 2021, arguing that “supposedly too high fuel economy values for electric vehicles would mean a the relatively small number of electric vehicles that would guarantee mathematical compliance with no meaningful improvements to the carmakers’ real-world average fuel economy’ overall fleet .
That’s the key here. Ford can only sprint Lightning F-150 with its supposed 237.1 MPGe, and suddenly, the company doesn’t need to make the Escape or Bronco any more efficient – even though more and more people are buying those – because the Lightning (and Mustang Mach- E along with it) can carry the brand.
The National Highway Traffic Safety Administration is expected to introduce new, more stringent requirements for Business Average Fuel Economy soon. It will be interesting to see if all these regulatory changes combined are more important for electric vehicles and how manufacturers scramble to comply with the law.
2nd device: Hyundai will spend a lot of money on electric cars
The South Korean auto giant announced Tuesday morning that it plans to spend $18.2 billion on electric vehicle development between now and 2030. At that point, the company is expected to produce produces 1.51 million EVs at domestic facilities annually – an estimated 40% of global production. . polite Bloomberg:
Hyundai says that by 2030, it expects to have 31 electric vehicle models across its brands. It added that Kia will build a new factory to produce electric-built vehicles in the city of Hwaseong south of Seoul. Kia is preparing to launch the EV9 three-row electric SUV in South Korea later this year while Hyundai plans to introduce the Ioniq 7 in 2024.
Tuesday’s announcement echoes what Hyundai has outlined when it comes to investing in a greener future. Hyundai and Genesis previously had detailed plans to introduce at least 17 battery electric vehicles by 2030, along with 14 from Kia, which would be a “huge enabler” to achieve their sales goals. the company’s annual 3.5 million electric vehicles by 2030.
Car and battery makers in South Korea are still trying to figure out how to navigate US President Joe Biden’s Inflation Reduction Act, which requires automakers to manufacture electric vehicles in the US to suffice. eligibility for subsidies.
Hyundai has been lobbying US officials to tweak the bill because it doesn’t yet have any operating plants dedicated to electric vehicles in the US. The latest IRA guidance earlier this month shows little change in that respect.
As for electric vehicle sales in the US, it seems like there really is no choice but for Hyundai to build a factory on North American soil as quickly as possible. One will go up in Georgia with the goal of starting production in 2025. It will produce cars for all three of the company’s brands: Hyundai, Kia, and Genesis.
3rd Gear: BMW Faces ‘Challenging Business Environment’
BMW saw a slight drop in sales in the first quarter of 2023. Still, it still hopes for a better year overall, according to the latest information from BMW. Reutersby auto news:
BMW said it delivered 588,138 BMW, Mini and Rolls-Royce vehicles in the first quarter, down 1.5 percent year-on-year, while all-electric vehicle sales rose 83 percent year-on-year. to 64,647 vehicles.
By region, BMW saw only sales growth in the US, with an increase of 11.1% to 81,877 units.
Sales in China fell 6.6%, but the company said the Chinese economy is expected to stabilize this year.
Sales in Europe fell 1.9% largely due to the production and export ban in the Russian market, where Chinese brands are benefiting from the retreat of Western carmakers.
BMW remains confident about its 2023 guidance despite the “challenging business environment,” the company said in a statement Tuesday.
All-electric models and “premium premium” offerings are expected to drive most of the growth this year. That has affected the company’s electric vehicles, with sales doubling to 55,979 across all markets in the first three months alone. If you’re a BMW, you don’t want to know how many EVs Tesla sold during that same period.
Gear 4: Our pain is CarMax’s gain
The bad new car market is supporting the used car market a bit better but still very badly, as CarMax’s surprisingly upbeat earnings report Tuesday showed. From Reuters:
Shares of the Richmond, Virginia-based company jumped 6.56% to $70.18 in premarket trading.
In December, CarMax implemented a series of cost-cutting measures, such as slowing down the pace of car purchases for inventory, cutting marketing and capital costs, and halting corporate office hiring. .
Chief Executive Officer William Nash said: “Our deliberate steps to address the pressures facing the used auto industry are driving continued improvements in our business. our business.
Demand for used cars has fallen over the past year due to higher borrowing costs and higher prices of gasoline and commodities, affecting CarMax’s results.
However, with rental rates on the rise and new car prices nearing the $50,000 mark, most consumers have no choice but to search the used car market for options, to maintain some needs.
CarMax’s adjusted profit was 44 cents per share, beating analyst expectations of 24 cents per share. Thank goodness for The worst time to buy a new car is probably never. It’s the same situation helped AutoNation also make a profit at the end of last year.
5th gear: Ferrari and Samsung
There’s not much meat for this one, but Ferrari has struck a deal with Samsung to incorporate the tech giant’s OLED panels in its futuristic interior. Take it one last time, Reuters:
CEO Benedetto Vigna said in a statement the Korean company will develop “custom OLED display solutions” for the next generation of Ferrari.
The heads of Ferrari and Samsung Display signed a memorandum of understanding in Asan, South Korea, with no financial details disclosed.
Vigna has previously said that when Ferrari is focusing on investing in electrification, the company will use outside suppliers for non-critical components or software.
Ferrari plans to launch its first all-electric car by 2025.
Sure, it seems silly to be so concerned with the fidelity of screen in a Ferrari. But the problem with OLED panels is, Unlike cheaper LCD units, they don’t have uniform backlighting. Instead, the pixels turn themselves off individually to show pure black. That makes a big difference in an instrument cluster!
Reverse: Apollo 13
On this day in 1970 — 53 years ago — Apollo 13 successfully launched from Cape Canaveral en route to the moon. Of course, that’s what will happen in the next six days made this particular mission the perfect Hollywood fodder.
Neutral: Gang’s All Here!
My birthday was a few weeks ago and my girlfriend gave me a Tarmac Works Mitsubishi Lancer Evolution VI racing car, allowing me to finally complete the 1/64 scale family I started maybe 20 years before.
