+++ Bloomberg recently ran a piece about how new cars are “just for the rich” thanks to constraints (real and artificial) that have boosted prices and profits. It’s possible internal combustion engines will end up behind the same paywall. The European Parliament has been laying out the regulations that will guide the transport industry to and beyond 2035, when the EUROPEAN UNION will forbid sales of new ICE-powered passenger cars and vans. The latest step in the process was to approve a carveout for automakers that register fewer than 1.000 cars per year. Basically, every independent hypercar maker on The Continent plus Bugatti would be allowed to sell 1.000 units annually. The vote was probably closer than some expected, with 340 votes in favor, 279 against and 21 abstentions, meaning just 40 parliamentarians made the provision possible. I’m sure we haven’t heard the end of it, either. Italy and its super sports car makers have publicly stated their desires for an exception to the ban. Never mind that outfits like Pagani, Bugatti and Koenigsegg have barely made 1.000 cars apiece throughout their lifespans, if the rules would allow 1.000 new Jeskos on the road every year, why not allow 1.000 ICE Lamborghinis out of Sant’Agata’s total annual production? Or 1.000 units of cars like the Mercedes-AMG Project One? The carveout doesn’t apply to the United Kingdom, the island nation also banning new ICE sales in 2035. British government officials there are considering such a measure. It would be vastly more important in the UK where cottage industry carmaking (riel, BAC, Ginetta, Morgan and so on) is a national point of pride. For the rest of the enthusiast public, carbon-neutral synthetic fuels or Toyota’s hydrogen-fueled ICE efforts might be the best currently known bets to save the ICE soundtrack. 2035 is around the corner from a development standpoint but ages away from a tech standpoint, so who knows what kind of world we’ll be looking at on the other side. It’s still going to sound like hypercars, though. +++
+++ FORD ’s announcement of a new battery production facility in the rural inland community of Marshall, Michigan, has been seen by many as a surprise gift to the Rust Belt; a castoff from coastal elites who can afford to care about the political implications of foreign investment. To others, however, it’s an unwanted intrusion. Not an invasion by a foreign power, but an encroachment on an isolated, peaceful way of life. The $3.5 billion EV battery plant was originally slated for construction in the Virginia, but was ultimately was shut out by the commonwealth’s newly elected governor, ostensibly over concerns regarding China. Now Ford plans a sprawling 2.5 million-square-foot facility on 1,200 acres of farmland in the community near Battle Creek, an hour and a half west of Detroit. The plant promises to bring 2.500 jobs (“much needed”, the mayor says) paying $20-$50 an hour. But in Michigan’s scramble to score on Virginia’s turnover, some feel their voices have been drowned out. Does Marshall want a new manufacturing facility? If some are to be believed, the answer is no. There have been meetings in living rooms and even a protest with signs outside Marshall City Hall. Will it matter? Seems unlikely. Ford has already lost one site for its new battery facility and is likely keen to keep a firm grip on this one. Whatever the rationale, everybody’s ready to take (or at the very least assign) credit for the new jobs, but nobody wants to watch them being done. NIMBYism in the face of industrial development is nothing new, but the answer to whether the locals are on board may depend heavily on which Marshall you choose to survey. You see, there are two. Ford’s proposed megasite is actually in Marshall Township, not the city of Marshall. And the township appears to be the source of much of the noise; unsurprisingly, since it will take the brunt of the impacts of development. Marshall Township is the 6 mile by 6 mile area outlined here. That Mike Tyson job in the southeastern corner is the incorporated city of Marshall. Ford’s facility would occupy a chunk of the township bordered by Ceresco to the west, M-96 to the north, I-69 to the east and the North Branch Kalamazoo River to the south. A township, for those unfamiliar with the term, is really little more than a way to identify unincorporated space. In states that don’t utilize the system, Marshall Township would merely be a nameless chunk of rural Calhoun County. Why does this matter? Simply put, this is an area where a pro-business, anti-regulatory, anti-union message would typically prevail; the permissive policies that entice corporations like Ford to set up shop in the first place. Municipal ordinances? Get out of here. So there’s irony in the resistance. As a bleeding-heart type, I agree with the protesters’ criticisms of the site choice. They say that “brownfields” (unoccupied or abandoned industrial space) should be repurposed before greenspace is converted to industrial use. Yep, I’m on board. They say that areas of denser population would offer better sources of factory labor; I’m inclined to believe that too. So far, everybody’s making sense. Residents along the highway where Ford’s megasite will likely be built would certainly prefer to see it erected elsewhere. Nearby enough to attract engineers and managers who might help nudge their property values northward, of course, but far enough away that they’re spared the burdens of additional traffic or construction of anything taller than the township’s oldest surviving barn. This is the American small-town ideal. It was forged in villages like Marshall as overcrowding and pollution became synonymous with progress. While early factories sprung up pretty much wherever the local conditions favored them (flat land for building; creeks for runoff; large bodies of water or railroad access to move goods), the American industrial revolution didn’t really kick into high gear until mechanized production became commonplace. These new, high-volume methods still required a large quantity of manual labor, which tilted the balance in favor of America’s growing population centers. And so Americans left the farms for the cities in search of work and, with the advent of the streetcar, could move to the outer perimeters of these economic powerhouses, putting dirty industry miles away from their civilized living spaces. These sleepy communities propagated outward from every American industrial center in the form of the suburb. In these bedroom communities, strict zoning was designed to prevent industrial and commercial buildings from infringing on the tranquility of the new miniature suburban “estate”. So now industry has leapfrogged to outlying towns and villages, where land can still be inexpensive and plentiful. Remote portions of right-to-work states became ideal for industrial development. But in Michigan and other Rust Belt states, distrust of the manufacturing sector has been cultivated by decades of consolidation and flat-out abandonment. Even within the city of Marshall, some have no interest in Ford’s investment. They survived previous rounds of industrial “restructuring” and see no reason to invite what could very well end up being another. Marshall, like its equivalents all over the industrial Midwest, isn’t the same old factory town of America’s industrial heyday. Architectural remnants from the gilded age to the roaring ’20s have been preserved wherever possible (Marshall is known for this, in fact), but nostalgia for the “good” old days of belching smokestacks and the din of ceaselessly advancing rail stock is long gone. Those who remain may not see Marshall as an industrial town, but rather as a time capsule already filled with the best it could ever offer. Some in this community would sooner see others take the risk. Why take a chance on some boondoggle that might only increase the likelihood (and potential pace) of change? While some may call it “progress,” in the quieter parts of America, there is no greater enemy. +++
+++ Temperature is one of the biggest enemies of electric car range. Some of that is keeping the batteries in the prime operating temperature range for best performance, but it’s also keeping the people inside in their prime operating temperature. And that requires energy, which in turn takes away from what can be used for traveling. In an effort to find more efficient ways to manage cabin temperatures (specifically warmth), FORD ran an experiment to see which works better, the traditional HVAC system or heated interior panels. The test was focused on delivery vehicles, using E-Transit vans. The reason being that it can be tricky to keep the cabin warm with frequent door openings. And the company compared regular vans running HVAC and modified vans with nearly every surface imaginable concealing heating pads. And we mean every. The seats, headrests, armrests, door panels, sun visors, lower steering column cowl and even the floor mats. At the end of Ford’s testing period, which seems to have taken place across multiple seasons, the heated panels managed to use 13% less energy in keeping the cabin comfortable. Ford says that savings could improve driving range by 5%. The reason for this, according to Ford, is that anytime the doors open on these delivery vans, much of that warm air is immediately lost, and when your heater is only specifically heating the air, you’re sort of back to square one. But by heating the various surfaces in the cabin, they’ll mostly remain warm, even with doors opening, so that’s less lost energy. Ford’s test is further evidence that having more temperature-controlled surfaces could provide efficiency boosts. Back in January, automotive part supplier ZF revealed its design for heated seatbelts, which it believes could help with keeping climate control energy use down. Certainly heated interior panels are totally feasible for cars today. Luxury automakers such as BMW and Mercedes have been offering heated armrests in addition to seats and steering wheels for years now. Of course, it’s possible that they’re a little expensive, hence only being offered in luxury cars so far. But as electric cars aren’t especially cheap yet, they could still be popular. It’s also worth noting that this testing was done on vehicles with the idea that they’ll be frequently opening doors and losing heat. The gains from these features in passenger cars that aren’t constantly losing heat out the doors may be less. But we’re still at a point where every mile can count in an EV. It will be interesting to see if more heated panels become offered in the near future. +++
+++ Two of JAPAN ’s biggest automakers agreed to the biggest wage hikes in decades in an early sign of momentum in annual pay negotiations as the central bank looks for evidence of a wage-price cycle that could lead to policy change. Toyota agreed to give the largest wage hikes in 2 decades according to its union Wednesday. The world’s biggest carmaker said the agreement was reached at the first round of negotiations. It didn’t disclose a percentage increase. Later in the day, Honda said it will raise wages by 5% including the biggest increase in base pay in about 30 years. The early moves by the heavyweight companies serve as the latest signal of an upward move in the wage trend as the highest inflation in more than four decades eats into the purchasing power of households. Hefty raises from some of the biggest names in corporate Japan at an early stage could also put pressure on other companies to give larger-than-usual raises. Wages have taken center stage in the country as the Bank of Japan has indicated it must see stronger growth in pay to ensure that the trend in prices is sustainable. The BOJ has a 2% inflation target, but even with key prices rising at 4%, the central bank remains committed to its massive stimulus program until wages also show larger gains. Toyota said it agreed to increase pay including base wages and bonuses, adding that this was the third consecutive year it met union demands in full. Toyota is often first among Japanese firms to announce the results of annual wage negotiations. In recent years the labor union has requested wage increases across 12 categories based on type and rank, as opposed to an average increase of base pay in the form of a percentage. The company said bonuses this year would be equal to 6.7 month’s salary. Honda said the raises would add up to a ¥19,000 ($141) bump in monthly pay. It also said the salary hikes will prioritize younger employees who are more impacted by inflation. Kazuo Ueda is the government’s pick to take the helm of the BOJ in early April amid simmering market speculation that policy change may follow, a shift that would impact markets around the world. Current BOJ Governor Haruhiko Kuroda has indicated 3% wage growth is necessary to support stable inflation of 2%. +++
+++ LUCID on Wednesday forecasted 2023 production will be well short of analysts’ expectations and reported a major drop in orders during 4th quarter, sending the electric carmaker’s shares down 11% after hours. Lucid said it expects to produce 10.000 to 14.000 luxury electric vehicles this year, up from 7.180 cars last year. Analysts on average expected the company to make 21.815 cars, however. The company, backed by Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF), delivered 4.369 cars last year, far lower than the 7.180 units it produced. Price cuts by the world’s most valuable automaker Tesla and Ford have made it harder for companies such as Rivian Automotive Inc and Lucid to grab share in an industry competing for shrinking consumer wallets. The company said it had more than 28.000 orders as of February 21, down 6.000 reservations from the second quarter, after it delivered about 1.900 vehicles and saw cancellations. “There’s probably a lot of frustration from customers having to wait so long for to get the vehicles they ordered”, said Garrett Nelson, an analyst at CFRA Research. “There’s a lot more competition than a year ago; a lot more EVs becoming available at lower price points than the Lucid Air vehicle”. Lucid reported a cash balance of $1.74 billion in the 4th quarter, after raising $1.52 billion in December. At the end of the third quarter, it had $1.26 billion in cash reserves. Lucid’s revenue rose to $257.7 million in the quarter ended December 31 from $26.4 million a year earlier. Analysts on average had expected sales of $302.6 million, according to IBES data from Refinitiv. The company’s net loss narrowed to $472.6 million or 28 cents per share, from a loss of $1.05 billion or 64 cents per share, a year earlier. Shares of the Newark, California-based company fell as much 10.6% in extended trading. The stock fell 82% last year after Lucid halved its production forecast due to supply chain issues. +++
+++ MITSUOKA , a Japanese company that specializes in giving mass-produced models a retro-inspired redesign, has introduced a new model called Viewt Story. It looks a lot like the existing Viewt sedan when viewed from the front end, but it’s a hatchback based on the Toyota Yaris. Up front, designers transferred most of the styling cues that characterize the Viewt sedan to the Viewt Story. There’s no indication that the hatchback started life as a Yaris: it features a Jaguar Mark 2-inspired face with a pair of round headlights, round turn signals, an upright grille with bright vertical slats, and a vintage-looking bumper. The main difference is that there is now a sensor integrated into the grille. It’s a different story out back, where the Story gains 2 round lights instead of the sedan’s four-light setup and a bright insert integrated into the bumper. 4 exterior colors and 14 inch steel wheels come standard, and buyers can unlock eight additional colors and 15-inch alloy wheels at an extra cost. Mitsuoka also includes a long list of electronic driving aids including adaptive cruise control and lane-keeping assist. There’s nothing retro under the hood. Power for the Viewt Story comes from a Toyota-sourced, 1.0-liter 3-cylinder engine rated at about 72 hp. It spins the front wheels via a continuously variable transmission (CVT). Alternatively, buyers can select a 1.5-liter triple that develops 93 hp and 120 Nm. Front-wheel-drive and a six-speed manual transmission come standard, but all-wheel-drive and a CVT are offered at an extra cost. Mitsuoka also offers the Viewt Story with a gasoline-electric hybrid drivetrain. Pricing for the Mitsuoka Viewt Story starts at ¥3.080.000, which represents about $22.900 at the current conversion rate and a $1.400 premium over the Viewt sedan. Deliveries are scheduled to start in the fall in Japan, but nothing suggests the hatchback will be sold here in Europe. +++
+++ The speed of new vehicle development over the past few years has been dizzying as EVs introduce novel charging, energy storage, and propulsion systems. Regenerative braking has been a significant topic of discussion, but it’s not end-all silver bullet for range recovery. PORSCHE dove into the EV game in 2020 with the Taycan and has used its considerable engineering prowess to develop an innovative regenerative braking setup for the car. Porsche uses the Taycan’s motors as an on-demand stand-in for the car’s hydraulic brakes in most stopping scenarios. The transition between the 2 systems is a weakness for many EVs, but the Taycan also varies its hydraulic braking pressure to ensure the smoothest experience possible. Rather than apply regenerative braking force as soon as the driver lifts off the throttle like in many other EVs, Porsche’s system allows the car to roll unpowered, which feels more natural and keeps more kinetic energy in the vehicle. One-pedal driving initiates regeneration first and then has to convert it to propulsion, which the automaker says results in “twice the losses”. Porsche noted that 90 percent of Taycan owners’ braking could be done electrically without the car’s traditional brake system. In fact, the car only needs 100 percent hydraulic braking at speeds under 5 km/h when electric motors can’t provide enough stopping force. The car relies on algorithms to take data from the braking system and determine how and where to apply traditional brakes when the driver asks for additional braking force. Though it follows the conventional automotive configuration of two-thirds braking force on the front axle and one-third on the rear, Porsche said the Taycan’s rear electric motor could provide more force and energy recuperation as needed. With so much braking force coming from its electric motors, Porsche said Taycan owners would likely replace brake pads more often due to aging than wear. The car is so frugal in its hydraulic brake applications that Porsche developed a system to keep the components clean, in which the car brakes using its traditional system occasionally to remove dirt from the discs and pads. +++
+++ TESLA has begun assembling batteries in Germany but will focus cell production in the U.S. in light of Inflation Reduction Act incentives, the company said, making it one of the firms declaring a strategy shift prompted by the package. The U.S. electric-vehicle maker is also preparing to produce cell components such as electrodes, some of which will be sent from its site in Grünheide in the state of Brandenburg, to the United States, Tesla said on Wednesday. Cars produced at the Brandenburg site would in the “near future” contain batteries assembled locally, it added. “The focus of Tesla’s cell production is currently in the United States due to the framework created by the United States Inflation Reduction Act (IRA)”, the company said. EU leaders have expressed concern that local content requirements of much of the $369 billion of subsidies in the IRA will encourage companies to abandon Europe for the United States. Tesla rival Stellantis said on Wednesday it was already localizing production in the U.S. prior to the IRA, while earlier this month industrial gases firm Air Liquide pledged to take advantage of a historic opportunity to invest in clean energy helped by the IRA, but did not give specific details. Holcim AG, the world’s biggest cement maker, expects the IRA to provide strong momentum for its business in North America, and Linde has estimated the total investment opportunity for the company in the United States alone could exceed $30 billion over the next decade. The European Commission has proposed loosening rules on state aid for investments in renewable energy, decarbonising industry, hydrogen or zero-emission vehicles, though Germany’s finance minister has warned Europe must not respond to the U.S. act with excessive subsidies. Tesla withdrew its application for over 1 billion euros in German state aid for the battery plant in November 2021 and the company’s Chief Executive Elon Musk tweeted at that time that “all subsidies should be eliminated”. However, the carmaker still has an open application for regional funding from the Brandenburg government. A spokesperson for the German economy ministry said on Wednesday they were “working on clearing up the reasons” behind Tesla’s decision. Brandenburg’s economy ministry said that to its knowledge, the change of course would not impact the number of jobs available at the German site. Musk said in March 2022 that the German 50 gigawatt-hour battery plant would reach volume production by the end of 2023, but the plant and car production site have hit their targets later than planned. Tesla has struggled to ramp up battery cell production in Fremont, California and Austin, Texas, which experts have attributed to new and unproven techniques the company is having trouble scaling up. The EV maker is holding its first investor day on March 1, laying out the third part of its “Master Plan” which Musk has said will focus on scaling car production and the supply chain for battery materials. Tesla said in late January it would invest over $3.6 billion to expand its Nevada gigafactory complex with 2 new factories, one to mass produce its long-delayed Semi electric truck and the other to make its new 4680 battery cell. +++
