Op-Ed by Paul Wimsett
For this blog we are going back in time ten years. So picture it in your mind — Lost and ER are on the on TV. Barack Obama had just become president and Sarah Palin began her comeback. The Internet of Things, Alexa and Siri’s parents was born. And on your car radio Bleeding Love by Leona Lewis or I Gotta Feeling by The Black Eyed Peas are playing. And the car business took a strange turn that no-one could have predicted.
The economic events of the period between 2008 and 2010 are best known for the mortgages and stock market crashes but they were also detrimental to a number of car businesses.
In a bad economy people look to save dollars and while it was harder than ever to get a loan if you did need to buy a new car, you were looking for a deal. America made large, expensive, vehicles with bad fuel economy. A crash then combined with an energy crisis to drive sales of vehicles like as SUVs and pick-up trucks to rock bottom. It got so bad in the United States that Chrysler and General Motors needed to be rescued by the government.
For the US government to step in and help a business goes against the grain of what America stands for in the eyes of many of her citizens. Survival of the fittest is the core of any free market and it guarantees the best price for goods. However, the thinking at the time is that if a giant part of the economy, such as the automotive industry, failed too many jobs lost would send the economy into a death spiral. There was no other way to keep the economy stable and allow people to keep buying.
Pre-crash, in 2005, GM’s factories were performing at 85% of capacity. This may not seem much but it was a pattern to be found in other businesses too. So the term too big to fail started getting tossed around. Of course what “too big to fail” means is “too big to let fail.” The idea goes all the way back to 1984 and Stewart McKinney, though its true source probably predates that. Even in 1984 the term was controversial.
A CNN/Opinion Research poll said only 36% of the public supported the bailout. What people may not realise is that there was in fact two bailouts to the car industry, the second mainly going to General Motors and Chrysler. Part of GM’s bail out included an odd sort of bankruptcy that allowed them to default on certain loans. They were allowed to zero out stock that didn’t belong to the government or union members. It was not a good deal for most Americans.
The lasting memory in the minds of “Big Auto” was how only really excelling at selling gas guzzlers had left them vulnerable. After all, this was the second time that a large scale economic crash had knocked out the auto industry. The first time was in the 1980s. When the economy got going again this time it found the American automaker throwing everything it had behind convincing its fans to buy hybrids and electric cars.
While the move to EVs and hybrids made fuel economic cars, suddenly needing to retool factories and develop new designs raised the price of all American vehicles. Then there’s the uncertainty of whether electric and hybrid cars will even stay popular.
Given that the economy is not stable long term we’ll most likely see another test of the American auto industries ability to remain viable. Given that they haven’t made cars more affordable they’ve only dealt with half the challenge of selling cars during a down turn. In fact, it’s not an original solution its just copying Asian car makers into an obvious decision.
So has the American auto industry learned anything from needing a bail-out? You decide.
Last year, Musk said that the Tesla Semi production version will have closer to 600 miles of range.
Now a Tesla Semi prototype was spotted at a California Highway Patrol Inspection Center during range testing, and the test driver reportedly said that the electric truck prototype was “meeting or exceeding the range estimates.”
It seems that many manufacturers are looking at electric cars to save the car industry, but what do the people who drive vehicles say about it? Does it look like a viable option?
Here are the pluses and minuses according to Debate.org.
It seems to be relatively cheaper to charge a car than to fill up a tank of gas. An average tank of gas costs $45 but an electric car takes $10 to charge.
Operating an EV puts out no toxic engine toxins emissions which improves are quality—an environmental plus.
Apparently electric cars look better than gas powered cars. This must be taken with a grain of salt based upon the particular audience polled for this debate It’s surely possible to make gas powered cars look as good as the electric version, but one can certainly observe that the intent of manufacturers to create a certain aesthetic.
Because there isn’t engine noise, EVs don’t create noise pollution.
Some believe that environmental practices need to change across the board and starting anywhere is a first step to a better world. That putting the cart before the horse for a time is okay because the horse will catch up eventually.
It is probably unlikely that electric vehicles will stop pollution as the electricity needs to come from somewhere. Many people acknowledge that you are just changing what you’re contaminating the environment with.
They also have a greater risk of breaking down in the middle of the street. This means the national transportation grid is weaker by the amount of EVs on the road. What is the cost financially and environmentally for having to roll more tow trucks out each day? No one knows because it’s not PC to ask.
Another uncomfortable truth is that it takes from thirty minutes to eight hours to charge the car up. This is all right if you want to use the car just to head out to the work; it’s not quite so good if you want to use the car throughout the day.
On the topic of refuelling–there currently isn’t an extensive infrastructure to support refuelling. In order to overcome the time factor, many grocery stores are creating charging stations so you can refuel while the car would be sitting idle anyway. This begs the question, how are state and local governments going to recoup the road tax on these vehicles?
EVs have a limited range. So do ICE cars. But with the time to refuel it’s more of an issue to run out. Also you can’t walk to the closest station and bring some electricity back with you. You essentially turn every out of gas experience into a costly tow.
Many people feel that “green washing” draws money and focus away from really dealing with transportation issues on a larger scale.
The result of the Debate.org’s poll was 65% of people were pro electric cars, while 35% of people were against them. As Jack Gillis of the Washington Post experimented with owning and operating an EV and concluded that, though there was a significant tax advantage to buying an EV they weren’t more intrinsically cost effective. Once Congress discontinues the tax incentives the market could vanish. The real answer is to create a sustainable market for EVs but it’s difficult to manufacture consumer demand. It’s also likely that oil companies will mettle with any attempt get this industry to function on its own.
But whether you back the gas side or the electric side things do seem to be up in the air at the moment. So what about the best of both worlds, the hybrid?
The hybrid’s ability to generate it’s own electricity unchains it from the long charge time and short range. It takes the need for a tow back to normal levels. It does away with the short mileage issues and you won’t need to create an entire special infrastructure to accommodate its need to charge. Then again if you don’t force people to use electric will they build the infrastructure and are you really saving the environment? Well it’s a step in the right direction, a baby step, but perhaps a sustainable baby step.
It may be that, or back to the drawing board.
The top selling truck in the US is F-150. In 2017, Ford decided to create an all-electric pickup truck. Their hybrid version comes out in 2020, which moved both the company and the market toward an EV truck. Ford’s video Tuesday demonstrates the electric truck’s remarkable towing capacity.
The video shows a prototype pull 10 double-decker rail cars over 1,000 feet. Are the rail cars empty? Well, yes, the 1st time. The 2nd time they’re loaded with over 40 I.C.E. F-150s weighing roughly 1.25 million pounds. As impressive as this is, Ford is behind Rivian and Tesla in tackling an E.V. pick up.
In the first post in this series I discussed that America’s future might not depend on steel and aluminium but more in terms of silicon. Certainly there is a number of competitors vying with America over who can make the most efficient and profitable cars.
The West has ruled the world of cars for almost a century, seeming to own the “Internal Combustion Engine” (ICE). The East can only compete if the combustion engine becomes redundant, and unfortunately for us, this is the way things might be going.
The country which makes the most cars is currently China with approximately 28,000,000 being made in 2018, while the US made 11,000,000. (Largely due to Chinese tax breaks and subsidies.) You won’t have heard the cars made in China though, the Wuling Sunshine for instance as is it made only for the domestic market.
Chinese computer industry has often relied on re-engineering technology invented in the US and Europe. However, as the car market blends with the computer industry greater investment is justified in original R&D. Self-driving (or AV) cars are spurring much greater investment. Electronic Vehicles (EVs) are also driving this new interest. China has factories dedicated to making lithium-ion batteries, a necessary part of all electronic vehicles.
The biggest player in the East around the 1970s was Japan – it was one of the Big Three countries (the other two being the US and Germany). In the 1980s they remained popular, but they now had competition from China. The autonomous driving is big here, with technology creating self-driving buses and trucks.
While Japan focused on exports, China had to build a domestic economy so they could sell something as expensive as a car to their own people. In other words China was rich in people and the more affluent the people become the more they can sell cars without shipping them great distances. That allows them to come from behind in the car sales race.
In the US they have Detroit. In South Korea they have Seoul. 15 million square feet is dedicated to five factories which produce Kias, Hyundais and Genesises. Although South Korea’s rise is about cheap cars, which does come to the price of steel and aluminium, it is all about innovation too, they have even created an innovation center in Silicon Valley itself.
As far as cars go, the investment seems to be in hydrogen fuel-cell vehicles and self-driving. The Korean government is funding what is known as a “K-City”, a testing area for self-driving cars and buses with a number of urban areas and other features built in.
The Indian car technology might be looking at more sustainable systems. One such idea floated in recent years is a car that runs on water. This could be India’s chance to get ahead of China and Japan. There are also a number of hybrid and electric vehicle factories planned.
Other Competition outside the East
The US’s competition might also lie with Brazil, which is the biggest manufacturer of “flexible fuel cars” in the world. Flexible fuel cars shouldn’t be confused with hybrids, they are designed to work on either gasoline or ethanol (note the price of ethanol makes them more efficient to run a car than gasoline). Though I did say don’t get confused with hybrids, I should warn you that the Toyota Corolla will work on hybrid flex-fuel, in other words, either electric energy or ethanol.
So can the big giants in the US take on these innovative countries? Maybe, if they stop thinking it’s all about the substance of the car. It’s how it moves, how it operates too, what it runs on, and how you build it.
(Reuters) – Tesla Inc (TSLA.O) has dropped the standard-range variants of its Model X and Model S from its product lineup and adjusted prices across its range, in a sales push that comes days after the U.S. electric vehicle maker reported record deliveries.
To simplify its offerings, the automaker on Tuesday limited variants of its Model X sport-utility vehicle and Model S sedan to “Long Range” and the more expensive “Performance”. It also trimmed the price of its now entry-level Long Range variants.
The discontinuation of the standard-range variants, however, means a rise in starting prices – to $84,990 for the Model X and $79,990 for the Model S, excluding potential buying incentives.
Simone Giertz was tired of waiting for Elon Musk to unveil his new Tesla pickup truck, so she decided to make one herself. The popular YouTuber and self-described “queen of shitty robots”transformed a Model 3 into an honest-to-god pickup truck, which she dubs “Truckla” — and naturally you can watch all the cutting and welding (and cursing) on her YouTube channel. There’s even a fake truck commercial to go along with it.
Giertz spent over a year planning and designing before launching into the arduous task of turning her Model 3 into a pickup truck. And she recruited a ragtag team of mechanics and DIY car modifiers to tackle the project: Marcos Ramirez, a Bay Area maker, mechanic and artist; Boston-based Richard Benoit, whose YouTube channel Rich Rebuilds is largely dedicated to the modification of pre-owned Tesla models; and German designer and YouTuber Laura Kampf.
Meet RJ Scaringe. The Founder of Rivian, Changing the Way We View Transportation
Founder of Rivian, the company building the world’s first electric adventure vehicles, RJ Scaringe isn’t one to set simple goals. He thinks big.
RJ’s goals go beyond simply building electric cars. They go beyond 4×4 vehicles. They go beyond self-driving vehicles. RJ’s ultimate goal is this – to change the way our society views transportation. To change the way we buy and own vehicles. To change the way we treat our environment.
RJ founded a car company, and yet he does not want people buying his cars in the future. This may seem like a strange business plan, but to RJ, it is the only way forward.
RJ envisions a world where you don’t own a car. Your family doesn’t own a car. Your neighbors don’t own cars. Sounds like a hassle to get around, right? How will you go skiing this weekend? How will you take your family to the beach in the spring? How will you move your oldest child into her dorm room?
Link to neat video about Rivian camp kitchen in their pass-through storage.