+++ More quickly than seemed possible a few months ago, sticker prices for ELECTRIC VEHICLES are falling closer to the point at which they could soon be on a par with gasoline cars. Increased competition, government incentives and falling prices for lithium and other battery materials are making electric vehicles noticeably more affordable. The tipping point when electric vehicles become as cheap or cheaper than cars with internal combustion engines could arrive this year for some mass market models, and is already the case for some luxury vehicles. Prices are likely to continue trending lower as Tesla, General Motors, Ford and their battery suppliers ramp up new factories, reaping the cost savings that come from mass production. New electric vehicles from companies like Volkswagen, Nissan and Hyundai will add to competitive pressure. The battery-powered version of GM’s Equinox crossover, for example, will start around $30.000 when it arrives this fall, the carmaker has said. That is $3.400 more than the least expensive gasoline-fueled Equinox. But factoring in government incentives, the electric Equinox should be cheaper. Like all electric vehicles, the car will need less maintenance and the electricity to power it will cost less than the gasoline used by its combustion engine equivalent. Only a few months ago electric-vehicle buyers faced long waiting lists, and dealers marked up sticker prices by thousands of dollars. Used electric vehicles sometimes sold for more than new ones because buyers were willing to pay a premium to get one right away. At the end of 2022, the average price of an electric vehicle was $61.488, compared with $49.507 for all passenger cars and pick-up trucks. There are still waiting lists for some models, like the Ford F-150 Lightning pickup truck, but it has become easier and cheaper to find and buy new and used electric models. The first major crack in the trend of rising prices came in January, when Tesla cut prices for the Model 3 and Model Y, the 2 bestselling electric cars, by thousands of dollars. With a starting price of $43.500 before government incentives, a Model 3 is now $300 less than the least expensive BMW 3 Series sedan. A Model Y, at $55.000 before tax credits, costs about as much as a comparable Lexus RX. Ford also cut the price of its Mustang Mach-E, the bestselling electric vehicle in the United States after the Teslas. Even Lucid Motors, a maker of expensive electric sedans that don’t qualify for tax credits, is feeling pressure to cut prices, and this week began offering $7.500 discounts on cars that start at $107.400. Tesla “saw there is increasing competition and some of the competition is quite good”, said Brian Moody, executive editor for Kelley Blue Book. He added, “If the No. 1 seller of a certain type of car reduces their prices, that is going to have an impact on the average”. Major impetus for the price cuts came from the Inflation Reduction Act, legislation passed by Democrats in Congress last year that provides tax credits of up to $7.500 for electric-car buyers. To qualify, battery-powered or plug-in hybrid sedans have to sell for less than $55.000, while pickups and SUVs qualify only if the retail price is below $80.000. By cutting prices, Ford and Tesla increased the number of models that could benefit from the tax credits. Manufacturers “are working to continue to pull in shoppers by making these vehicles eligible for tax credits”, said Jenni Newman, editor-in-chief of Cars.com, an online auto-sales site. Potentially more significant are subsidies paid to companies that manufacture batteries in the United States, as part of a drive by the administration of U.S. president Joe Biden to establish a domestic supply chain and reduce dependence on China. The subsidies, which were also part of the Inflation Reduction Act, could cut the cost of making electric vehicles by as much as $9,000. That break and the tax credits for buyers of electric cars could allow battery-powered vehicles to achieve price parity with gasoline cars as soon as this year, according to the International Council on Clean Transportation, a research and advocacy group. That is three to five years sooner than would be the case without incentives. “If the automakers pass that on to consumers, consumers will really benefit”, said Stephanie Searle, a program director at the council who oversees research on passenger vehicles. Declines in new-car prices are pushing down used electric-vehicle prices, too. They have fallen 17% since July, according to Recurrent, which tracks the used-car market. That’s largely because of Tesla cutting the price of the Model 3 and GM lowering the price of the Chevrolet Bolt by almost $6.000 last year. Under the Inflation Reduction Act, used cars can also qualify for a tax credit of up to $4.000. That’s important because most people buy used vehicles. Falling prices for materials like lithium and cobalt have also helped. The price of lithium used in batteries has fallen 20% from its peak in November, though the metal still costs more than twice as much as it did at the end of 2021. Cobalt has fallen by more than half since May, in part because carmakers are selling some models that do not require it, reducing demand. New lithium mines are beginning to produce ore, which could keep a lid on prices. Sigma Lithium will begin shipping raw material from a site in Brazil to LG Energy Solution, its main customer, as early as April, Ana Cabral Gardner, Sigma Lithium’s chief executive, said in an interview. The site will be the first new source of lithium in Latin America for several years. “It’s doable, and we’re there”, Cabral Gardner said. Of course, these advantages could fade because of new supply-chain problems. Lithium remains in short supply, and prices could spike again. Beginning next month, new regulations governing the $7.500 tax credits will require electric-car batteries to be made in the United States, Canada or Mexico with raw materials from North America or another U.S. trade ally. It is unclear how many vehicles will meet those requirements. Right now, the Inflation Reduction Act tax credits are available to vehicles assembled in North America, which partially shields U.S. automakers from competitors like Hyundai. The company’s Ioniq 5 has sold well, but it is imported from South Korea. Hyundai is building a factory in Georgia that will start assembling electric vehicles in 2025 (buyers may still collect a tax credit indirectly if they lease foreign-made electric vehicles). The Treasury Department, which is responsible for carrying out the Inflation Reduction Act, gave in to auto industry lobbying this month and classified several popular crossovers as SUVs rather than sedans. That allows vehicles like the Mustang Mach-E and all versions of the Model Y to qualify for tax credits if they sell for $80.000 or less. Before that change, the Mustang and lighter versions of the Model Y were classified as sedans, subject to the $55.000 limit. The decision removes some pressure on the carmakers to keep prices low. Tesla quickly raised the price of the Model Y by $2.000. Ford said it has no plans to raise prices of the Mach-E. The Inflation Reduction Act is also under attack by many congressional Republicans, even though automakers and battery companies are building factories in states like South Carolina, Texas and Tennessee where voters tend to elect Republicans. But arguably the most powerful force driving down prices is not the commodity markets or Washington. As electric-vehicle sales soar (rising 66% in the United States last year to 810.000), automakers are getting better at making them. Ford has reduced the weight of the Mach-E by 32 kilograms, increasing range and lowering cost, by eliminating some wiring, Jim Farley, the company’s chief executive, told investors this month. GM and LG Energy Solution began producing batteries at a new plant in Ohio last year through a joint venture, Ultium Cells. A second Ultium plant, in Tennessee, is expected to begin production this year, and a third is slated for Michigan. Generally speaking, costs come down as companies produce more of a product. Auto executives say they are finding it is easier and cheaper to design and build new electric models than gasoline-powered ones. The battery cells made by Ultium, for example, are part of a collection of components that can be mixed and matched in many types of vehicles. Carmakers have long used the same platforms in multiple models, but the strategy works even better with electric vehicles because the cars have far fewer parts than internal combustion vehicles. The Ultium platform cuts the time needed to develop a new vehicle by almost two years, said Dan Nicholson, vice president of electrification at GM, at a Federal Reserve Bank of Chicago conference in January. As a result, GM will be able to introduce 3 Chevrolet electric vehicles this year: the Equinox, a Silverado pickup truck and a Blazer SUV. “That’s how we get the economies of scale”, Nicholson said. Suppliers have been looking for efficiencies, too. Matthews International, based in Pittsburgh, has developed a process for coating the metal foil that separates the positive and negative electrodes of a battery. Instead of a liquid solution, the process uses a powder. The process requires less equipment and a lot less space, said Greg Babe, the company’s chief technology officer. Those kinds of incremental improvements reduce costs without major technical breakthroughs. Interest in the approach developed by Matthews has soared since Biden signed the Inflation Reduction Act. “It changed almost overnight”, Babe said. “The floodgates opened”. +++
+++ HYUNDAI ’s Ioniq 5 electric SUV is creating a sensation in India finding success in lowering production costs through local assembly, according to industry officials. Hyundai Motor India is scheduled to officially launch the Ioniq 5 next month and has received more than 650 reservations; more than double the 250 to 300 predicted initially. As the Ioniq 5 sold more than expected in the early stages, the possibility of preoccupying the Indian EV market, which is still in its infancy, is increasing. According to the Indian Energy Storage Association (IESA), the Indian EV market is expected to grow rapidly at an average annual rate of 49 percent from 2021 to 2030. “It seems that the Ioniq 5’s outstanding marketability and recent favorable reviews in major countries have gained attention”, a Hyundai Motor Group official said. “EVs are a hot global trend, and interest in EVs in the Indian market is also growing”. The company introduced the Ioniq 5 locally through the Auto Expo 2023 held in Greater Noida near New Delhi, the capital of India, January 11. Hyundai produces the Ioniq 5 in a semi-knocked-down (SKD) manufacturing method at its Chennai plant in India, significantly lowering its price. The Ioniq 5’s selling price in India starts at 4.495.000 rupees ($54.200); more than 35 percent cheaper than Kia’s electric car model EV6, which starts at 6.095.000 rupees. Considering that the Indian government provides a subsidy of 10.000 rupees to 20.000 rupees per 1KWh battery, the actual purchase price of the Ioniq 5 is estimated to be in the early to mid-$30,000 range. The Ioniq 5 has a wide interior space with a wheelbase of 3.000 mm and a 350kW DC fast-charger which can charge the battery from 10 percent to 80 percent in 18 minutes. Hyundai sold a total of 552.511 completed cars in India last year. Including its affiliate Kia, the total number reaches 807.067 vehicles. India is the third-largest market for the Hyundai Motor Group after the U.S. and South Korea. +++
+++ The expansion of KIA ’s all-electric range of SUVs with the EV6 and upcoming EV9 and EV4 has been making waves, but the Korean firm hasn’t forgotten about its internal-combustion engined cars, evidenced by images of a prototype of a facelifted Sorento. The current generation was launched in 2020 and since then we’ve seen the new Sportage hit the roads. I expect the Sorento will be influenced by its smaller sibling in the changes to its design. Although the camouflage on the test car doesn’t give much away, we can expect a new headlight cluster with a more vertical shape. This could make room for a larger grille, similar to that on the Sportage. The rear lights will get a new light signature design. Kia will keep the Sorento’s overall boxy proportions, which will lineup nicely against its new range-topping electric SUV, the EV9. The Sorento interior should borrow elements from the Sportage to give off a cleaner, minimal look. I expect the touch sensitive climate control bar to feature in the facelifted Sorento and Kia has already said all new and updated models will gain its latest Kia Connect infotainment. We should also see the same dual 12.3 inch screens from the Sportage and EV6 make their way over to the Sorento, replacing a 10.25 central touchscreen. Currently, the Sorento is offered in the Netherlands with a 1.6-litre petrol hybrid with 230 hp and a plug-in hybrid with the same engine but mated to a 13.8 kWh battery for 265 hp. We’re likely to see a similar lineup with the facelift, although the electric motors for the hybrid models might be revised for better efficiency and performance. The Sorento sits on Hyundai/Kia’s N3 platform so no pure-electric model will arrive. The Sorento Plug-in Hybrid will continue to be offered with 4-wheeldrive, plus some driving modes such as ‘Mud’, ‘Snow’ and ‘Sand’ for extra off-road capability. The facelifted Sorento will go on sale in 2024. +++
+++ MERCEDES will redefine the entry point to its line-up from 2024 with the arrival of an all-new compact luxury car. It will also mark the debut of a new platform and infotainment system for the brand. Based on the firm’s forthcoming MMA underpinnings, the new all-electric compact saloon will rival Tesla’s Model 3 as the most affordable model in the Mercedes range. Speaking to investors last year on the future of the company’s line-up, Mercedes boss Ola Källenius said: “The entry point to the Mercedes brand in the future will be a different one than it is today”. On top of this, a strategy presentation showed that the company plans to reduce its ‘portfolio of variants’ (understood to mean bodystyles) in the ‘entry luxury’ class from 7 to 4, raising prices as well. It’s believed that this new car will front the strategy, as well as ushering in new tech. Expect some of that technology to trickle down from the brand’s record-breaking Vision EQXX concept car, which focused on maximizing efficiency to deliver range. In a smaller car such as the first MMA-based model, this will be key, so some of the EQXX’s motor tech (delivering 95 percent efficiency), power-control electronics and other features could be scaled up for series production in the new model. It’s also likely that the car’s sleek styling will draw on aerodynamic cues first seen on the EQXX to reduce drag and increase range. Mercedes’ chief technology officer Markus Schäfer told that the battery, e-motor, aspects of the EQXX’s inverter and some ‘bionic engineering’ cast-metal parts will feature on series production cars in the future, so there will be a large carryover from this test bed. “We wanted to have something that mirrored what was happening in the real world”, he said of the EQXX. “We want to bring this tech to series production and see the same results”. Källenius was also keen to highlight how: “This new MMA architecture ushers in a new generation of technology, both on the drivetrain side in terms of battery chemistry, efficiency, and the drivetrain itself”. In line with the EQXX project, Mercedes is explicitly focusing on “greater range from smaller batteries”, with a future target of more than 800 Wh/l (for reference, a Tesla Model 3 battery offers an energy density of around 680Wh/l), with a slim battery in the car’s floor helping to free up space. Expect the new car to eclipse the longest range currently on offer in the EQA, at 510 km. This tech transfer will extend to the infotainment, because the new car will also mark the debut of Mercedes’ MB.OS infotainment system. The new model will likely offer a widescreen digital dash and infotainment panel as part of the company’s target for its advanced graphical interfaces, but it’s the system behind the scenes that could be even more interesting. Mercedes has experimented with a new type of processor that performs tasks in “neuromorphic spikes”. Put simply, this means that the computer stores up tasks and executes them in one go once a threshold is reached, saving energy and boosting driving range in the process. Unlike premium rivals such as Volvo and Polestar, who have paired with Google for their infotainment software, the German firm is going it alone with the development of MB.OS, and Chief Software Officer Magnus Östberg told: “We are the architects of our own house, as it were. It’s important to have ownership of your own OS for safety and security”. The new saloon was initially thought to be called EQA, but the name is now uncertain following reports that Mercedes will drop the EQ branding for EVs as its range moves towards full-electric models in Europe by 2030. Whatever it’s called, this new car represents the start of a renewed focus on profit per car and sales margins, rather than volume. The company is pushing its most affordable models further upmarket, with a greater focus on higher-margin, luxury cars. Mercedes aims to reduce its presence in the ‘entry luxury’ sector, predicting a 25 percent reduction in market share by 2026; sales volumes have already declined from around 680.000 cars in this area of the market in 2019 to about 570.000 in 2021. Despite this, from 2019 to 2021 the average sale price of Mercedes cars in this class rose by around 20 percent and the brand says it will be “significantly up” by 2026, reflecting the more luxury-focused approach it will take, ditching mainstream expansion and the chase for sales volumes. +++
+++ MERCEDES boss Ola Källenius is thinking of a mini Mercedes G-Class to compete in the compact class. He wants to launch the compact version launched by 2026. The news is surprising because it contradicts Mercedes’ new strategy. Källenius had announced that Mercedes will focus on developing the AMG, Maybach and G-Class sub-brands and that it does not want to be a volume manufacturer. Therefore, Mercedes decided to narrow the compact range from seven to four models by dropping the A-Class hatch and sedan and the B-Class. According to the official announcement, the new compact generation would debut in 2024 with the third generation Mercedes CLA. The Mercedes CLA will be the first model to use the new MMA (Mercedes Modular Architecture) platform developed primarily for electric propulsion but also supporting conventional engines. This platform will later be used for the CLA Shooting Brake, GLA and GLB, as well as for the next-generation C-Class. In this context, an eventual Mercedes G-Class compact would be the fifth model of the future compact range and be based on the same MMA platform. It could appear in 2026 and will undoubtedly have an electric version in addition to the conventional ones. The only logic of a compact G-Class would be that Källenius wants to expand the hugely successful G-Class range. But a compact Mercedes G-Class won’t have the off-road capability of the iconic G-Class with its 3 locking differentials. Because it will be based on the MMA platform, the upcoming Mercedes G-Class compact electric will have 800 Volt architecture, an eATS 2.0 permanent magnet synchronous electric motor mated to a 2-speed gearbox and a silicon carbide inverter. The low cobalt content of the battery will have a high energy density and can charge up to 350 kW. Källenius said that models based on the MMA platform would be at least 4.50 meters long, so the future Mercedes G-Class compact will not be much smaller than the original G-Class, which measures 4.82 meters in length. Conventional engines will come from the new partnership with Geely and will be 3- and 4-cylinder engines that will also be used in Volvo and Lynk&Co models. Until the eventual introduction of a compact Mercedes G-Class in 2026, Mercedes will launch the EQG, an electric version of the G-Class based on a platform derived from the conventional G-Class. Mercedes unveiled the Mercedes Ener-G-Force concept at the 2012 Los Angeles Auto Show, which evokes the lines of the iconic G-Class and could serve as inspiration for a future compact Mercedes G-Class. +++
+++ TESLA is recalling 362.758 vehicles (the 2016-2023 Model S / Model X, 2017-2023 Model 3 and 2020-2023 Model Y) equipped with Full Self-Driving to address multiple issues with the software’s behavior that can put drivers and surrounding traffic at risk for a crash. Per Tesla’s defect report submitted to NHTSA (available in its entirety here), cars equipped with FSD Beta “could potentially infringe upon local traffic laws or customs while executing certain driving maneuvers”. To which traffic laws was Tesla referring, exactly? Things like stopping at stopsigns, using the correct lane to transit an intersection and obeying posted speed limits; infractions that Tesla’s detractors, and even loyal Tesla owners, have been sounding the alarm about for months. In Tesla’s own words, these behaviors “could increase the risk of a collision if the driver does not intervene”. Here’s what else the company had to say: “The FSD Beta system may allow the vehicle to act unsafe around intersections, such as traveling straight through an intersection while in a turn-only lane, entering a stop sign-controlled intersection without coming to a complete stop, or proceeding into an intersection during a steady yellow traffic signal without due caution”. Tesla’s recall acknowledgement said. “In addition, the system may respond insufficiently to changes in posted speed limits or not adequately account for the driver’s adjustment of the vehicle’s speed to exceed posted speed limits. In the specific and rare circumstances described above when a Tesla vehicle is operating with a software version of FSD Beta as described below and with FSD Beta engaged, certain driving maneuvers could potentially infringe upon local traffic laws or customs. As of February 10, Tesla has identified 18 warranty claims, received between May 8, 2019, and September 12, 2022, that may be related to the conditions described above”, the report said. “Tesla is not aware of any injuries or deaths that may be related to such conditions”. The National Highway Traffic Safety Administration says in documents that Tesla will fix the concerns with an online software update in the coming weeks. The documents say Tesla is doing the recall but does not agree with the agency’s analysis of the system’s flaws. “FSD beta software that allows a vehicle to exceed speed limits or travel through intersections in an unlawful or unpredictable manner increases the risk of a crash”, the agency said. “The word ‘recall’ for an over-the-air software update is anachronistic and just flat wrong”, Musk tweeted. +++
+++ VOLKSWAGEN recently teased a camouflaged new product moving under electric power in the snow. Anyone who guessed the vehicle was the updated Touareg, come on down to claim your prize. The current Touareg R eHybrid is a plug-in hybrid version and offers optional all-wheel steering; the 2 primary traits teased in the Twitter video. Volkswagen is now a bit more forthcoming about what else the new SUV will offer, starting with IQ.Light, a pair of high-definition matrix headlights. Each light contains 19.200 micro-LEDs, for a total of 38.400 pixels bathing the road ahead in photos. The units are connected by an LED light strip that will be part of a reworked front fascia. In back, the surprise is a VW badge illuminated in red, the novelty legal in Europe as of the beginning of this year. More substantive changes can be found up top, where a roof load sensor delivers information to the dynamic systems about any load up high. When there’s no roof box on the rack, the Touareg is free to be sportier. When there’s cargo, networked sensors let babysitters like electronic stability control know to be a tad more vigilant. Down low, both suspension options (steel springs or air springs) have been tweaked to “achieve larger bandwidth between maximum comfort and optimum performance”. Inside, the “Innovision Cockpit” receives upgrades like high-res map data and lane-precise navigation, and Android Auto and Apple CarPlay go wireless. On the comfort side, customer feedback convinced Volkswagen to make the center console armrest a little softer. The new Touareg is finishing cold-weather testing in the Swedish Lapland. It debuts this summer. +++
