INVESTORS INTERESTED IN FORD AND GM
After years of shunning the U.S.'s two largest car companies, investors are finally starting to kick the tires on General Motors Co. and Ford Motor Co. Ford shares have surged about 20% this week and have risen about 35% in January, which would mark their best month since April 2009. The move this week followed a Deutsche Bank report suggesting Ford could give a brighter-than-expected profit outlook for 2021 when it reports fourth-quarter earnings on Feb. 4. GM's stock price also has jumped about 35% this month, to a record level since shares began trading in 2010, following the auto giant's bankruptcy a year earlier.
Source: The Wall Street Journal
PANDEMIC ACTS AS CATALYST FOR ADDITIONAL CHANGE, ANALYSTS SUGGEST
The COVID crisis is proving to be a bigger accelerator for altering the automotive industry in fundamental ways than originally expected. OEMs must continue to grapple with the challenges brought about by autonomous driving, shared mobility, driveline electrification, but now there are additional changes in manufacturing as automaking transforms to a product from a service. That's the message emanating from the Society of Automotive Analysts' 2021 Automotive Outlook Conference. There's little doubt that the pandemic impacted the industry, with annual sales falling 14% worldwide, and 16% in the United States, according to Pete Kelly, managing director for LMC Automotive.
Source: The Detroit Bureau
EVS DON'T LIKE WINTER WEATHER
The barriers to EV ownership are coming down. Battery costs are dropping and will reach parity with ICE powertrains in just a few years. Range anxiety is becoming less of an issue as more public charging stations get built. And consumers soon will have a rich choice of models to choose from in almost every showroom. But the auto industry faces a major development challenge with EVs: They don't like winter weather. Or, more properly stated, EV batteries don't like cold temperatures.
MORE CHIP IMPACTS
Despite the threat of computer chip shortage hovering over the industry, the supply new vehicles remained stable at 3 million units in December, according to a new report from Cox Automotive. Cox reported it was the first time that supply hit 3 million vehicles since last May when sales dropped dramatically after the lockdowns caused by the COVID-19 pandemic.
Source: The Detroit Bureau
Production at Ford Motor Co.'s Louisville Assembly Plant will be stopped for the second time this month, beginning January 25, as a microchip shortage continues to upend the auto industry. The Kentucky plant, which employs roughly 3,900 workers building the Ford Escape and Lincoln Corsair crossovers, will be down the next two weeks, according to Ford spokeswoman Kelli Felker. Louisville Assembly was previously down the week of Jan. 11 for the same reason.
Source: Automotive News
Qualcomm Inc on Tuesday said it will supply a range of chips for General Motors Co's next generation of vehicles. The San Diego company has long been known for making modem chips that connected Apple Inc's iPhones and many vehicles to cellular data networks. In recent years, Qualcomm has moved into automotive chips. Qualcomm and GM said in statements the automaker will use Qualcomm's "cockpit" chips, which can run an automotive-grade operating system for functions such as the vehicle's speedometer and also the in-dashboard infotainment (information and entertainment) system.
Chip supply bottlenecks will impact production at some of Volkswagen's plants in February, the carmaker said on Wednesday, adding it had applied for short-time work at its key Wolfsburg site on some days of the month. Global automakers are adjusting assembly lines due to semiconductor shortages, which have become a political issue since German Economy Minister Peter Altmaier wrote to his Taiwanese counterpart to ask for help in addressing it.
Forecasters expect U.S. auto sales to continue to bounce back in 2021, but not all the way back to pre-coronavirus levels. Consumers can also expect prices to remain high for new cars and trucks. New-vehicle inventories have improved since last spring, but supplies are still low relative to demand. The usual formula for big discounts is when there's too much supply and not enough demand. U.S. auto sales in 2020 were 14.5 million, down 15% from 2019. Patrick Manzi, chief economist for the National Automobile Dealers Association, said 2020 was the first time since 2014 that U.S. auto sales failed to top 17 million
THE TREND TOWARD ONLINE CAR BUYING, BUYERS HAVE NEVER BEEN HAPPIER
According to a new study, consumers no longer compare car buying to a stubborn root canal. In fact, as auto dealers move more steps of the retail process online, consumer satisfaction is at an all-time high. In the vehicle buying process, according to the study, the average vehicle buyer now visits only two dealerships. That is a decline from 2.7 in 2016. Buyers are spending less time at dealerships and benefitting from more efficient, digital retailing processes. That has helped increase the percentage of those who were "highly satisfied" with the overall shopping experience. The percentage jumped from 60% in 2019 to 72% now.
Source: Auto Remarketing
U.S. MOUNTS A CHARGE ON CHINA, THE KING OF ELECTRIC-VEHICLE BATTERIES
The auto industry's quickening shift to electric cars is spurring investment in another emerging industry in the U.S.: manufacturing lithium-ion batteries for those vehicles. China currently dominates the market for producing electric-vehicle batteries. But as auto makers spend billions to build more plug-in models in the U.S., investors are increasing their bets on companies looking to expand the supply chain for batteries and related materials in North America—a region that has long relied on imports for such components.
Source: The Wall Street Journal
CARMAKERS FACE $61B SALES HIT FROM PANDEMIC CHIP SHORTAGE
When the Tohoku earthquake and tsunami ravaged Japan in 2011, ocean water flooded factories owned by Renesas Electronics Corp. Production at the swamped facilities ground to a halt—a major hit for Renesas, of course, but also a devastating blow to the Japanese car industry, which depended on Renesas for semiconductors. Lacking chips for everything from transmissions to touchscreens, Honda, Nissan, and Toyota were forced to shut down or slow output for months. As the perils of just-in-time manufacturing and the dangers of relying on a single supplier for key components became obvious, automakers vowed to steer clear of similar snafus in the future. Yet a decade later, the global auto industry finds itself in an almost identical predicament. The catalyst for the breakdown this time is a slower-moving natural disaster: the coronavirus pandemic, which has disrupted the supply chain for makers of the electronics that are the brains of modern cars.
VOLKSWAGEN ASKS SUPREME COURT TO BLOCK LOCAL EMISSIONS REGULATIONS
German auto giant Volkswagen AG is asking the U.S. Supreme Court to overturn a ruling that it says opens up car makers to a flood of emissions regulations from local governments that could clash with existing federal rules. The request to the high court, filed last week and made public Tuesday, is the latest turn in litigation that has dogged Volkswagen since it admitted in 2015 to rigging 11 million diesel vehicles world-wide with software that allowed them to evade government emissions tests. The company has paid more than $30 billion in fines and settlements because of the scandal, including some $23 billion in the U.S.
Source: The Wall Street Journal
GM AND NAVISTAR TO CREATE AND BUILD LONG-HAUL HYDROGEN SEMIS
The commercial truck maker Navistar International is teaming with General Motors to put 2,000 fuel-cell semis, each with a range of more than 500 miles and 15-minute refueling, into use "in the near term," the companies jointly announced Wednesday. For the project, which fits in alongside GM's $27 billion electric vehicle plan, GM will supply energy to power an electric motor system via two of its fuel-cell stacks—in this case called "Hydrotec fuel-cell power cubes" and each containing more than 300 cells. North Carolina–based OneH2 will supply what it described as a modular hydrogen solution that can be refueled via deliveries for smaller needs or by reforming the hydrogen "on demand" to refuel the trucks. GM said that this agreement is independent of any other arrangements—namely, that with Nikola Corporation—and doesn't affect them. As of late November, GM reached a memorandum of understanding with Nikola to supply its Hydrotec system for Nikola's Class 7 and Class 8 commercial trucks.
The Hydrotec system for the Nikola trucks is due to be manufactured at its Brownstown battery plant, but GM wouldn't disclose a production location for the units to be used in the Navistar project. The size and scope of the project are much larger than Toyota's Project Portal, which has employed heavy-duty fuel-cell trucks primarily for port duty so far.
Navistar plans to deliver the first production versions of the trucks, to be badged the International RH Series fuel-cell electric vehicle, for model year 2024, while test vehicles will start a pilot phase by the end of 2022.
Flexibility, low operating costs, and zero tailpipe emissions
The transport and logistics company J.B. Hunt will be the initial partner for the project. The company has a lot of flexibility for deploying the fuel-cell trucks, with 521 unique locations that the hydrogen hardware might be fitted to, with anywhere from 5 to 200 trucks based at each location.
While Navistar confirmed that the top-range solution will combine a battery pack and a hydrogen tank—likely using the battery as a buffer for producing peak power and getting a load up to speed, and storing away energy from braking—it didn't disclose any details about how much hydrogen will be stored on board, or at what pressure it will be kept. Navistar says that the fuel-cell truck will offer better power density for short-range trips, better short-burst output, and a per-mile cost that's comparable to diesel trucks "in certain market segments," it said in a release.
GM has put about 15 years of development and more than 3.2 million real-world miles on hydrogen fuel-cell vehicles.
Fuel cells or batteries?
In a Q&A, Navistar eMobility VP Gary Horvat said that both fuel-cell and battery-electric are viable technologies in the heavy-duty truck marketplace. "As we go farther from 300 miles to 500, even more miles than that...the fuel cell has an advantage," he said, and it really depends on what the daily range is for the vehicle and what makes sense for the end users. Higher-range EVs with big battery packs take payload out of the customer's business, and the charging time is much longer. Hydrogen allows faster refueling and occupies far less of the payload. That's contrary to what Tesla CEO Elon Musk has said, even before the existence of its Semi project—that fuel-cells simply can't match modern battery tech. "If you've got a heavier payload and you're traveling longer distances, you need the faster fueling times," said Charles Freese, head of GM's global fuel-cell business. "These trucks don't make money if the wheels aren't turning."
The project will also seek U.S. Department of Energy funding, including "grants and opportunities for the ecosystem," but this project won't be dependent on it, said Navistar CEO Persio Lisboa. "This program is not driven by credits, it's really by total cost of ownership and what makes sense for our customers and all of our partners through the enterprise," added Horvat, who said that "renewable natural gas"—assumed to be from landfills or biomass—is considered by the project to be a starting point.
Hydrogen sourcing: a floating target
OneH2 CEO Paul Dawson walked that back a bit, though. For
now, the project will rely on hydrogen produced by steam-methane
reforming, he said, because it "gives the customer the lowest
cost of energy," he said. Capturing carbon from the process is
"not a quantum leap into the future," he added. Dawson
claimed that reforming hydrogen from grid energy can impact total
carbon emissions negatively. "So...as it stands at the moment,
if we use renewable natural gas through process, I don't think
we're any different to using renewable electricity off the grid
through electrolysis." That's a controversial point, as
analysts last year noted that economies of scale plus the
coordinated use of renewable energy could make hydrogen both much
greener and cost-effective by 2030.
Although this project claims to be a complete solution for zero-emission long-haul trucking, it underscores what's missing as of yet. For now the project is merely zero tailpipe emissions; but in the future customers seeking CO2 benefits—and regulators, as trucks go electric—are going to need to push the hydrogen infrastructure to the next level.
Source: Green Car Reports
FCA (USA) SETTLES INVESTIGATION
The Justice Department said it has reached a settlement with Fiat Chrysler's U.S. division in the government's long-running investigation into union corruption among top labor leaders in Detroit. The U.S. subsidiary, known as FCA US and now part of Stellantis, the newly formed car company that absorbed Fiat Chrysler Automobiles in a merger earlier this month, agreed to plead guilty to a criminal charge of conspiring to violate U.S. labor law and pay a $30 million fine, according to statements released Wednesday by the company and the U.S. attorney's office in Detroit.
Source: The Wall Street Journal
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