AAH #650 – The Auto Industry at Midyear: Winners, Losers and Puzzlers

I'll don't line after hours. It brought to you by Bridgetone Tires Solutions for

your Journey, Gary John. So you are You are not in your usual

spot. You are somewhere else. Tell us where you're at and why.

I'm in the very tippy top part of Lake Huron on an island called Macadaw Macadaw Island. I'm up here for a big policy conference. All the top

politicians and business people and philanthropic people and media get together for a big confab up here. And it's a cool place. No cars are allowed on the

island, so if I opened the door to my porch here in the hotel room, you'll hear the clippity clop clop clop of horses going by and bicycles, and that's the only way to get around on the island. It's it's

a step back in time, which I find highly amusing, because I'm up here to talk all about the future of where the auto industry is going on a place where there are no cars, and there's the I was up I happened to be up there three weeks ago. There's not vacation, and the

eclippity clop clop of horses also leave the results of the eclippity clop clop of horses, which is rather startling to a suburban kid. So well, okay,

we're going to talk all about the auto industries, you said today, and I found this this remarkable statistic when the statistic a date June first, nineteen eighty one, and that is when General Motors opened the Bowling Green plant to make corvettes, and it had been an abandoned Chrysler industrial air conditioner plant that they turn that into. And and so one of the things that I

sort of like to explore with our guests, and we have a robust group of them, is blue ribbon panel. Should corvette be a brand onto itself?

So let's let's bring them on in and start with that. So Alisa

Prettle from Motor Trend Todd Lassa who is contributing editor to Autoweek. Now,

sam Abu, Sam, I spy name every time, so of course I screwed up A Lisa's name before the show started, so um yours is more difficult, but with guide House insights. So welcome one and all. Glad

to be here, because pronounced your last name. So the audio right,

Sam a boil salmon. So there you go. All right. So so

okay, let's let's start a Lisa. You're you're big on products. Should

Corvette be its own brand? Well, I mean it's such a funny question

because, um, many of us probably remember that there were many years where every time we would write about Corvette, if we didn't call it the Chevy Corvette, we would get like a nasty note or phone call from a GMPR person saying, Corvette is not its own brand. Please make sure you always

call it Chevy, because they were really trying to boost the Chevy thing.

But the world has changed a lot lately because now everyone's trying to make sub brands out of popular names or even new names. I mean, you've got

high End, I took Ionic and made it a sub brand, and Jeep has turned Wagon here and Grand Wagon ere that whole family into its own brand.

And Jaguar land Rover has just gone completely sponkers that they're not even land Rover anymore. They're just a series of four brands, Defender, Discovery,

Jaguar, and land Rover as a brand, not a company. So I

don't know, I mean, it's making things confusing. I think for us

on the industry side, the corporate side, But I honestly they when it comes down to the consumer that they are just always going to just call it the VET or the Ionic or whatever, and they actually don't care if it's its own brand. Sam. Yeah, I agree with with what Elsa said.

I think, you know, most consumers don't really care. Um.

You know today, you know, Dodge, you know, split off Ram as a separate brand with back thirteen twelve, thirteen years ago now and most people still call it Dodge Ram. But it doesn't matter, you know,

as long as they know where to find it. Um. That's that's the

main thing. Um, And you know, they know what the products are.

I think the brands have become a lot less important, although you know, I think we're going to continue to see a shifting around because as you said, Elsa, you know, especially with evs, most most OEMs have created these EV sub brands, like Mercedes has um the equ out, he's got etron Um, and uh, you know, Hundai has got ionic um.

But it's going to be interesting as we gradually shift towards everything being electric, then those particular sub brands start to lose their meanings. So maybe we

go, we might end up going back again to the original brands or maybe creating some new brands like Genesis for example. You know, Genesis started off

as part of Unday and then got spun out into its own brand. And

to that point, Genesis was originally it launched in as a model uh, within Unday and I think the two thousand and eight model year, and uh, if it hadn't been for the impending Great Recession, it probably would have been its own brand, like Lexus was launched some twenty eight years earlier.

I think consumers shouldn't care whether whether g splits Corvette off from Chevrolet, because it might make it easier for GM to up the price on the Chevrolet Corvette, which while it's been the Chevrolet Corvette has always been kind of compared as a very much affordable Porsche nine to eleven competitor or even the you know, half priced or what third quarter priced ferrari Um. I think in the end

probably will be broken off, especially if GM decides to go back into a try like to go back into Europe as it might as it with electric cadillacs like the Slow Steak and have dealerships in Europe that that sell Cadillac and Corvette, but maybe not cheval. What's your take, Ken, I would say

GM's losing money or leaving money on the table. Absolutely. Porsche has pointed

the way of what they can do with the Corvette brand. You know,

the the purists were horrified when they went with SUV's Porsche and Porsches laughing and all the way to the bank. I mean, it is an unbelievably profitable

band brand. In fact, if it if it had not done that,

Porsche likely would have been out of business today. And so Corvette can look

at it, and we know they're they're looking at doing an electric crossover or suv that they're going to build in Lansing, So we're going to see them test the waters. But the Corvette brand is golden. Look at all the

crap Forward took by naming the Machi a Mustang mach Ee, and it more than doubled Mustang sales. So look, why is a car company in business

to make money? And I think expanding the product line with Corvette is just

going to make GM more money, and if they do it right, it will not dilute the brand at all, just like Porsche is still able to sell nine eleven's no problem people lining up to buy them, even though those same customers would never touch say like a Cayenne, and a lot more people might be willing to spend one hundred and fifty to two hundred thousand dollars for just a Corvette than for a Chevrolet Corvette. So that's right, consumers got

to be ought to worry about it. And uh, but at a point

that GM, always being GM loves brands and sub brands, and having it paired down in in North America to Chevrolet, Buck, GMC and Cadillac just isn't enough for GM. It's I guess you had Bright drop now and Cruise

and whatever else. But uh, yeah, they would love to have another

brand. And uh, to John's point, that would not be good for

consumers because the affordable Corvette might be on its way out. I think.

I think when the engine, when the mid engine Corvet came out, I remember and they said there's gonna be sixty thousand dollars, And again that was because it was a Chevy and they said we had to have the affordable sports car. So I agree with everyone who's saying you can probably up the price

of your sports car if you're not sort of shackled to the Chevy affordable brand name. The other thing is that if you do have your own brand,

if they ever wanted to spin it off or an IPO or anything, that certainly helps pave the way for something like that. And to Todd's point about

brands, I mean, GM did not like going from eight brands to four, and they're inching their way back up again, so sort of pool is to whin they're back at eight brands again. Hey, you can count ruling

in a time boo jing, I believe. And just one other bit of

history, of course, going way way back, when the Chevrolet Corvette launched as a motoramic car, you also had within a couple of years a two seat Buick Wildcat one and Wildcat two. You had the Oldsmobile F eighty eight

Abloy was called, and the Pontiac Bonneville Specials. So I mean at that

point each division potentially had its own sports car on the way. I think

you know, a key thing to to making this work, you know, for GM, if they do want to split off into more brands, you know, separate some of these vehicles out, is to avoid the problem they did in the past, where every single brand, you know, when they had in two thousand and seven, two thousand and eight, when they had eight brands, you know, almost aside from Hummer, you know, most of them had all the same vehicles, from an entry level compact car to you know, full size SUVs. UM. If they can keep some focus,

you know, keep each of the brands smaller, like you look at uh you look at um Stilantis today. You know, Ram, you know

has the full size pickup. They will probably they will eventually get a midsize

and maybe a compact pickup. And they have the pro Master vans Um,

but they they're not trying to replicate at least so far. Uh, you

know, all of the the SUV you have in the jeep lineup and uh, you know, so they're trying to keep it. If you keep each

of the brands focused on a particular segment, then I think you can make more brands work in that way. Well. And Sam that that is I

think a largely a result of Chrysler years ago going to a dealership plan where almost all dealers in at least in the major cities across the US have all the brands, so it's all Chrysler, Uh, Dodge, Ram and Gee.

So you don't have the dealers saying, hey, where's our corevet or where's our you know whatever. So John John last week last Thursday on the

show, we talked about extensively about Ford Capital Markets Day. And then after

the show is ended Long Behold, Jim Farley and Elon Musk went on Twitter spaces and announced that starting next year, the Ford Electric vehicles aren't going to have an adapter, and Tesla developed adapter which will allow the Ford evs to charge at the Tesla supercharger network. So what's your take on that? Well,

look, it's turned out to be a bigger deal than I thought.

You know, when I heard the announcement, I went, well, that makes a lot of sense. And obviously Jim and Elon have got a palsy

wellsy relationship going here. And then lo and Behold. I mean it took

the media by storm. The stock shot up seven percent. I mean,

on one hand, Farley must be pulling his hair out here. He's doing

all this corporate restructuring. He's created Ford Pro, They're getting into the digital

age. They've got six hundred thousand subscribers. Other software. But he makes

one announcement that they're going to be able to use the chargers infrastructure from Tesla, and the stock takes a big jump, more than any of the other things that he's ever done. But I think it's a game changer, and

in terms of the public perception of forward especially and especially forwards evs. Like

I said, it turned out to be a bigger story than I thought it would be. So let me ask you this before the others chime in on

this development. So one of the aspects of this is that, Okay,

not only do you need the adapters. So right now the vehicles have the

CCS system and Tesla cleverly has what they called the North American standard. They

just basically said it's a standard and maybe it'll become a standard now. But

there's also a software component to this. So it would seem to me that

when someone pulls in with their F one fifty Lightning or their Mustang mach E or their E transit van and they plug into that supercharger, there's going to be a lot of data that is going to be sent to Tesla. So

do you see I mean, so we know that in the influction Inflation Reduction Act that there were a payment that will go to charging network, So Elon will make money off of the government for that for opening it up. But

there's that data and John, you're you're big on data monetization. So what

does this mean for Tesla And is it a deterrent to Ford? I don't

know that it's a deterrent to Ford, but it's definitely a coup for Tesla because now it doesn't only get to a chance to collect data on its customer base, but increasingly it's going to be on Forward's base. And if Ford's

cutting a deal with Tesla, I gotta believe others are in line. You

know, other automakers are probably tweeting to Elon right now because that's the easiest way to get a hold of them is through Twitter, saying hey me too, how about our cars on your system? Because everybody recognizes that Tesla has

by far the most reliable, the most widespread and the most cleverly placed in charging infrastructure in the country. You know, last year or sometime and I

wish I had written found the name of one of our viewers. We were

we were talking about the Tesla charging system here on Audoline after hours, and one of the comments was why doesn't the government just give all the money to Tesla and let it build out the charging infrastructure. And I laughed and I

thought, well, that's a funny comment. Now I really think they're right.

We should just give all the money to Tesla and let them build it out. All right, So so on one of the other three of your

your heads are going to explode when John just said that. So Sam,

let's start with you, all right. So first of all, I don't

want to give all the money to Tesla. Um and uh, you know,

I don't you know, I don't mind if they you know, if they get some money, you know, for building new you know, building additional infrastructure. Um. You know. And and to your comment Gary about

them getting government money, they're they're not getting money for people using the chargers.

They can get money from the Nevy program for installing new chargers that have CCS capability on them. So those existing chargers they're not getting any government money

for that. But I think that this was a fascinating move by Ford,

you know, when when when Ford announced the Mockee one of the big aspects of that, you know, and that subsequently was part of e Transit and Lightning as well, was the whole Ford Pass charging network. You know,

they were trying to replicate what um what Tesla did you know with this widespread charging network by aggregating multiple networks together through a single interface in the vehicle.

And they were the first to support the plug and charge standard, um, you know, And so they were trying to make it as simple as it is to charge a Tesla where you just pull up, plug in your your car into the supercharger and it starts charging, and you get billed, You have your payment information I'll set up in your Tesla account. You just get

built. You don't have to juggle and evego and Electrify America and Blank and

charge point account. It's all in one place. Unfortunately, for Ford,

those charging networks failed them miserably, especially Electrify America. They have done a

terrible job with rely ability. And when you talk to EV customers, you

know, EV owners, they will tell you the worst part of owning a non Tesla EV is then the lack of reliability in those fast chargers. And

you know, ultimately Farley, you know, said, look, if as we expand the number of evs that we're selling this is not good enough.

You know, they've tried to work with the charging providers and they have just not stepped up and done the job as as they need to to be as good as Tesla. And so they said, fine, we'll just go to

Tesla. And you know, I think you know a key part of this

is not just having the adapter for the Tesla Connector, but and also as part of that, the next gen vehicles will also integrate the Tesla connector right into the vehicle, so you won't even need an adapter um but that integration into the into the Ford Pass app. Uh, so that again you and

your Ford EV you just put your payment information the Ford Pass app one time, and then when you go plug into a supercharger, it just charges your account, it charges your credit card, and you don't you don't have to mess around with anything. And that's going to be a key component of this

and hopefully what this will do when when these other companies, when EA and eve Go and everybody else sees all the Ford customers going over and using the superchargers instead of using their chargers, maybe that competition will spur them on to actually do something to improve the reliability and availability of their chargers. Great point.

Ay quick interjection here too, because an insider up here at the conference that I'm att told me this Ford Tesla deal has been two years in the making. Well, so, well, Lisa, what do you think about

that? What's going on? Yeah? Well, I mean the big winner

is going to be the customer for sure, because I mean, as as Sam said in anyone who's tried to charge an EV knows let's see unreliability.

But it's also the number of chargers too, because under this deal, I think the Ford people have access to about twelve thousand chargers, and I think the whole other network they have the non Tesla is less than twelve thousand, so they're more than doubling the places they can go to charge in addition to the reliability of the charge. Then from so Tesla, I mean, there's

been some talk that now will Tesla lose some sales because some you know a lot of people were buying Tesla's just for the charge system, and almost rightfully so. But I do think that any you know, any small drop in

actual sales because of this, because someone can actually go and get another brand, another vehicle that they want. I think Tesla still makes out okay because

they just will gain so many more people using their charging network. They can

take all of that revenue to just continue to expand it. So it does

become, you know, this pervasive network, and maybe it becomes a busines this on its own that becomes almost more more profitable than Tesla, the way they keep discounting all the prices on the on the Tesla's UM. But they

still have some logistics to work out too, because Ford made a big deal of the bi directional charging and I don't think that you can do that with Tesla's. So in twenty twenty five, when the new models come out that

only have the Tesla Port, I'm not sure what that does to people.

You actually don't know that yet. I've gotten conflicting stories from people at Ford.

Some say it will be only the Tesla Port, some say it will be both UM but apparently Ford has not has not finalized that yet, so it might actually end up being both ccs and the Tesla Port. Well and

say with me, I'd heard both, but then the latest was that it was only going to be the North American one, which again, then they'll have to figure out, if that is the case, what to do with the bi directional charging. So there's you know, there's there's a lot of

a lot of balls in play. And I also totally agree that it's going

to make every other automaker really look long and hard at at trying to come up with the same deal. All right, Todd, throw a little realism

on this. Well. I remember when the when the IRA the Green Deal,

that the Biden plan to expand EV recharging across the country came out, and and I wrote a piece for Autoweek on it. Uh just after the

Wall Street Journal spoke with some Tesla owners who were mad that they would now have to be in those and I think it was something like seventy five hundred uh superchargers across the country that would be available to all evs. I and

I don't quite understand how the Ford Tesla thing is that much different from this that, um you know that that Tesla owners were kind of like, now I'm gonna have to wait even longer to get get my car recharge. It's

still not like going to a shell or mobile station. Um. But uh,

you know, if the Biden administration wants half a million chargers across the country by I think it's twenty thirty, and uh, you know, I'm wondering how long we go before there's just one standard. Uh you know,

Um, sure Tesla has right and they've got the uh, they've they've got the the the goods on on on a reliable recharging system. But UM,

you know, if you're if you really want to electrify America and that's lowercase, not talking about the company name, UM, you can have to make these available to everybody. So you drive up in your Rivian uh to any

one of these chargers and you know you can plug it in and recharge it.

Well, Chad mob already went away. I mean we basically in North

America. I mean, everyone's trying to get to one standard. But in

the interim kind of when Todd was talking about tests, the people getting upset, I mean, are we going to see fisticuffs when a Tesla person you know, shows up and there's an Afford, a jag and UH and a Cadillac Lyrics sitting there and they can't get their Tesla into the Tesla supercharger.

Yeah. And my and my piece, I likened it to the beaches in

southern California, where certain UH surfers have mainly claimed to the UH the waves that if you come in UH to a beach that's not yours with the surfboard, you're going to get beat up. So you know, you might see

that you're You're right, Alisa, that the fisticuffs may be on the way.

Can't I don't think sort of this. What did you say, Joe?

I said, can't we all live in peace? Yeah? No,

set American goes this goes back to sort of the Corvette thing, and there were some intimations of this that. Okay, so let's say that you spent

you know, eighty grand for your your Corvette and you drive into the service bay and right next to you is a three year old beat up Chevy Tracks.

How are you going to feel about that? Probably not so good.

You know, you wanted a little more special treatment, okay, to have the separation. So you buy a Tesla because you have the opportunity to use

the supercharger, and then there's a ford E transit van in front of you.

I mean, how are you going to feel about that? Probably not

so good, But I'm quite sure I agree with it. Analogy, Darry,

because if I'm pulling up into a Chevallet service bay next to a three year old beat up tracks. I know that it's because I'm not paying Porsche

nine to eleven price for my Chevrolet Corvette. I mean, that's that's the

that's the trade off, isn't it. I tell it its own brand,

so well that yeah, this is right. But this is why I think

it may may become its own brand, because it will allow the special tree treatment that it otherwise can't necessarily achieve. And so for somebody who's paying that

kind of money, they probably deserve a little extra, right. Yeah.

I've long been in the Meota camp of affordable sports cars anyway, so I guess it doesn't matter to me. So so sort of talking, you know,

one of the things we don't talk about a great deal on the show.

Sometimes we do, but is the commercial truck space. And there was

actually a rather significant developed this development this week when Dameler and Toyota got together.

So Daimler has a brand in Japan of commercial trucks called Fuso, and Toyota has Hino. They're going to merge those two companies, and Toyota and

Dameler are going to collaborate on various technological things related to connected, automated, shared and electric vehicle technology. And this gets to the whole point of what's

going on in the auto industry right and I think it's sort of important.

And I want to read part of a quote from Martin dom who's the CEO of Dameler Truck, and he said, as we are accelerating towards zero missions, there's one big challenge, and this is the required funding. The transformation

or our industry means we have to find several new drive technologies at the same time, batteries, hydrogen based fuel cells and potentially also hydrogen internal combostion engines.

This is quite a stretch, even for the leading companies in our industry.

And there's only one way to make this parallel tech development work economically.

Scale. Scale is key. It is absolutely essential to leverage investments and to

spread them across a larger base. And today we're making a bold move in

this respect. Okay, So here is the guy who is in charge of

Dameler Truck. He's not the guy in charging Mercedes Benz cars, but he's

talking to the guy who's in charge of Toyota. All of Toyota and you

know this whole issue and I want to get your ear your impressions of the question of scale and so John is you know the forward Tesla thing and intimation of perhaps a way for both of these companies to get more scale. Are

we going to see some consolidation in the industry that will go beyond these partnerships to get more scale? Where's the money going to come from for all of

these things that downlisted? Yeah, Look, unquestionably, there's going to be

a lot more consolidation in this industry from top to bottom, not just amongst the automakers, especially the tier two and tier three suppliers, particularly those who are involved in anything to do with internal combustion engines or powertrain technology. I

mean, their market's going down and it will continue to go down from here to until the day they go out of business. And so you're going to

see a lot of consolidation there. We've seen massive amounts of consolidation and the

retail side for the last twenty years. We're going to continue to see that.

And to your point, year Gary, very interesting that Daimler and Toyota getting together. You know, the heavy truck business can be quite profitable.

But to speak of scale, where are we now? I don't know if

any of you guys know a good heavy truck year, you know, class say six through eight, we're talking what three hundred thousand vehicles, So how many between three and four hundred thousand in the US. The Japanese market,

where Hino and fu Fuso are focused, is much smaller than that, right, right, So just using the US as an example, you know, pre COVID a good year for light duty DHA calls seventeen million compared to a good year three to four hundred thousand on the heavy side. So yeah,

for them to achieve scale is all that much more difficult makes a whole lot of sense, and especially to the point where you quoted mister dom there Gary, you know, internal combustion engine got to improve that diesel side primarily got to go electric, Gotta go fuel cell or and I'm surprised to hear him talking about maybe hydrogen internal combustion engine. But yeah, if you've got to

spread your bats, it's a whole lot of more affordable to do it with a partner. And that's gonna say. I remember this example, as Sam

pointed out, is this is just for the Japan and the Southeast Asia market, so they're not talking about doing this in the US or anywhere else at this point, and they're sort of i mean, they're they're focused on that part of the world and they're really trying to keep China at bay. So

this is kind of a bit of a regional move. And also, I

mean, these two companies were already you know, kind of working together.

Diamer already had eighty nine per steak in um Mitsubishi Fuso and that, which is the Toyota side of it. And also the Toyota sides had this emission

scandal, so it's had, you know, all kinds of issues. So

this is kind of a little bit of a deal that m addresses some regional issues, some sort of scandal issues, some sort of you know, it's a logical move to try and shore up what they're trying to do in this part of the world. And then I mean, you know, maybe if

this works out really well, it does spread to other parts of the world, but um certainly there they just don't have the money to go into evs and hydrogen the way that they need to with these companies in this part of the world. Well, Dialard Trucks split off from Dialer from Mercedes Benz cars

a few years ago, right, I mean, so I think last year was it? Yeah, and and and it almost slid by me at the

time. I wondered, well, I thought that Class eight semi tractor trucks

were hugely profitable even at those relatively small sales numbers. Sorry about the dogs

there, and uh, I you know, why would you why would you uh sell that off, get rid of the highly profitable trucks. But obviously,

UH, seeing what was ahead that they would have to go from UH smoky diesel engines to UH to clean hydrogen fuel cell or electric trucks, made a big difference. I mean, the consolidation too, happened along has been

going on for quite some time, with Volvo Trucks having long ago split off from Volvo buying some American name plates, and with Dameler Trucks owning UH freight liner. And I think they bought Forward heavy trucks some Sterling years ago.

Sterling, right, um, And so I mean that's it's not that different from the passenger car side. If you look at at Chrysler alone in the

last twenty five years and and forward for that matter, and it's pag and all that. So um yeah, I mean it really makes sense given I

mean, I think this deal, even if it's isolated for the time being to uh Asia Pacific, is probably going to expand if if Daimler and Toyota trucks get along uh together. Well yeah, you know, I mean,

for for automakers that are making five to ten million vehicles a year, like Volkswagen and Toyota and and and others, you know, the other top OEMs.

You know, the investment required to make the transition to electrification is enormous enough, you know, and they're having a hard enough time with getting scale there, you know. For you know, for companies that are you know,

selling you know, maybe one hundred two hundred thousand vehicles a year, it's way tougher. And for the truck makers, you know, they've um,

you know, regulators have really you know, much of their focus until the last just the last few years has been has been their attension has been focused on um light duty vehicles for electrification. But over the last several years,

you know, regulators have really started to pay more attention to the medium and heavy duty market. And you know, now's the time when we're really

starting to see that shift. Most of these companies are developing electric trucks.

Um but you know, the whole scale question, you know, when there's not a lot of differentiation between electric motors and between batteries developing you know your own is it's hard to justify that. Um SO it makes sense. You

know that we're going to see a lot more at the very least component sharing between between these companies, even if they don't fully merge. You know,

you'll see them doing partnerships to share electric powertrain systems and battery management systems and other other components. And John to what you were saying about hydrogen um you

know Toyota, uh, you know, obviously they've been a leader on the fuel cell side, and over the last couple of years they've they've actually done quite a bit with hydrogen internal combustion. You know, they've had a couple

of Corolla race cars in Japan with hydrogen internal combustion, and and they're you know, companies are starting to take more of a look at that, especially in the in the truck market, as a potential alternative to fuel cells.

Um SO, I suspect we will start to see some of that in some of these markets in the next few years. Whatever the truck makers do,

let's hope they have one refueling standard. Okay, right, Hey, hey,

look, we should take a quick commercial break right now. Give a

shout out to our good friends at Bridgstone and we'll be back in just a jiffe. How do you breached? Then? Entire stops shorter on what roads?

Is there hydrotrack technology, But you don't have to know how the science works, just where the brand is. What really matters is they're breached out.

Okay. Um, So, so since we're at the at the midpoint

of the year, I'm gonna try something a little different. We haven't done

this for a long time, and that's to do like a lightning round as we talk about the major brands in the industry. And so just each of

you give like a quick quick impression when I tell you the name of this company, but do it orderly. I'll start shouting at each other and so

on. Okay, so the first one and I'll give like what my sense

of it is is that? Okay, the first one Accura and I'm still

confused. Is it a performance brand or a luxury brand next, it's it's

always been a performance brand, well at least since they turn the Legend into the r L. It's um it's I mean you look at lightning, lightning,

lightning, lightning. I gotta get the Volkswagen is the old Bmobile of

Japan. Yeah, affordable performance, Yeah, slightly premium performance. A brand,

it's still trying to figure out what it is. It's taking a long

time, um Alfa Romeo. I think that Tonali is going to change things,

but maybe not enough fantastic to drive, just just a driver's car, beautiful to look at. If they fixed the quality, the future could be

bright. Haven't driven it, but I don't think they're going anywhere beyond where

they've already been Europe bowling. If if, if there wasn't the Dodge Hornet

that I think the Tanali would be much more successful in North America. Okay,

Audie, It's it's gorgeous inside and out, but I can't figure out why is its evs seemingly not going anywhere they you know, they started off with um a vehicle, you know, the original Etron that was basically a conversion of their existing platform, not as efficient as it needed to be.

Um, you know, still very nice vehicle to drive, but um, you know, as they start to introduce vehicles on the PPE platform next year, hopefully we'll start to see a shift and they become much more competitive.

Yeah, because right now they're just like you say that, they're nice, but they're not the complete benchmark they were even the Q eight Etron that I just drove with, you know, so that's the flagship. Um, the

naming is confusing a little bit to people still, and it's it. It's

not next snapping performance now. I mean you know, well we'll still ever

see a performance version coming, but um, yeah, they seem slightly sedate.

I'm just guessing here, but I'm going to say that out evs are going nowhere because vw evs are no explain well. I mean, I think

of the ID for has sold fairly well so far relatively for a n EV and um, you know, a lower price and easier availability item. Audi

has not caught what Tesla is with its digital experience, and until they get that straightened out, they're not going to compete with the upscale EV buyer, especially in China. Okay, BMW, Now it seems to me that on

the one hand, they're pushing electrics fairly hard, but in the other hand, they're trying to continue to appeal to their their petrol based fans, and so I just wonder how this sort's out going forward. I think their their

approach to flexible platforms. I actually initially thought like for the I or the

seven five, I thought might be a mistake. But those vehicles have actually

turned out to be much more energy efficient than was expected, and they're actually really good, really really good. So I think they're they're actually in a

pretty good place right now, and we'll see if they can really build on that when the Noia class vehicles start to launch in twenty twenty five. If

those are as good as they look like they might be, they could be really strong in the premium EV market. Yeah, I'm looking forward to getting

more information on the new class, which is kind of pulling up a name from the old from years ago. But anyway, and I do know there's

I'm actually going to Munich in a couple of weeks to learn more about it, and I think Sam might be right that they're they're finally sorted themselves out, and so I really want to hear what the path is going forward, I would say I hate their styling. I'm sorry, it's two polarizers for

me. Other people love it, God bless them all, but I don't.

And then secondly, they're not doing, in my opinion in the United States, nearly as good a job as marketing and advertising their evs as Mercedes is. I think Mercedes is setting the standard for how you present your electric

fleet to your customers, and BMW, I believe, is woeful and behind Mercedes in that. I'm gonna have to wait for a lease's report because I'm

kind of I'm way behind on what they're doing. But I would just say

that, you know, maybe they're not um despite the advantages of the performance advantages that evs have in certain ways that maybe maybe BMW is not transmitting that message from its ices to evs. I don't know, Okay, Buick Todd,

you mentioned earlier the Wildcat CONCEPTUM. Now it's a brand that is just

all crossovers, one of which is built in the United States, which strikes these being odd. Yeah, but it's using Wildcat design. So the new

vehicles that are coming out, so that you've got now the Encore GX and the new End Vista. So those are two little, tiny guys, but

they use wildcat styling and I actually think that they looked pretty good and they're relatively affordable, and I think that there they might sell a ton of these things for people who actually want a fun and you know, fairly decent looking little car. They may have gotten past the point where people old enough to

know what Buicks had become by the see of the nineteen nineties, those buyers that were not potential buyers because they didn't want to drive an old car even if they were old, gone beyond that, and now they're getting reaching a younger buyer. I don't know. I mean, at least looking at the

commercials, that would seem to be the case. But yeah, you remember

when UH, in the I think it was the late nineties early aughts, UH Buick advertised that they were still building cars while everybody else had moved on to trucks. Um. Yeah, China is the reason Buick survived past two

thousand and nine two ten, and so it's not really surprised that that, you know, most Buicks are made in Asia, and a couple of them in China at least that you know, it if they don't pick up sales a lot and they're they're not bad. Um, they dropped a lot last

two years ago and came up quite a bit last year in sales. Um.

You know that could be a China only brand going forward. Yeah.

I mean, the new design language looks good, but you know, we'll see if it if people actually buy any of them, especially as they shift to electric. Yeah. I totally agree. I think the new ones look

good, the Invista especially, I don't know if it's moved the needle.

I think, if I'm right, Cadillac is now out selling Buick in the US, are very close to and that's not just because Cadillac's doing so well.

It's not it's because Buick continues to sink. Yeah. Yeah, I

mean the perfect segue, Okay, Cadillac, segue to Cadillac. So let's

go to Cadillac. And it seems to me so so John, to your

point of what's going on there. I mean, it strikes me that that

brand is based on still based on Escalade, and the fact that Lyric has been so late in coming. It's it's really causing problems I think for that

brand. Yeah, totally agree. Look, you know GM has thrown a

lot of resources at Cadillac over the last two decades, it hasn't moved the needle. They're one last and they've done great vehicles. I mean, I'm

sure all of you have driven the V series, especially CT five, CT four, They're terrific. A lot of people, a lot of enthusiasts,

consider them as good as any BMWM series. It hasn't moved the needle,

not much, and so to me, going electric is there one shot at smashing the paradigm as to what Cadillac represents amongst the public. And to your

point, Gary, I mean the lyric it looks terrific out on the road.

If they had built them at scale and gotten them out there already, what a game changer it would have been, not just for Cadillac but for General Motors. Yea, the road has been painfully, painfully slow, and

that has hurt them tremendously. The one little high five I have to give

them is the celestic. I just think it's such a bold and audacious move

to have a three hundred thousand plus Cadillac that you can, you know, completely the spoke handmade. And I think there are a lot of people out

there that really want something that looks different on the road, and they want to support, you know, the great American vehicles, luxury vehicles of the past, and are going to pick one of these up and customize it with like, you know, like your guitar strings worked into the dash, or your cat's whiskers or like anything you want to put in it. Um And

so I don't I give them props for for doing it. I realize that's

not what's going to save Cadillac, but it certainly makes people, I think, kind of do a little bit of a head turn. Yeah, I

agree with John and the lease. I think, you know, to John's

point about the V series, the people interested in those cars enthusiasts were a very very tiny minority. And BMW, on the other hand, while has

has a high great fallowing among enthusiasts, also has what used to be called yuppies, people who saw it as a non Mercedes sort of luxury and and you know, Cadillac never got there. They could get there with electrics.

I just anecdotally a friend back in uh in um Frostburg, Maryland who has driven a Tesla Model Why for the last three years or so, and When I talked to him about the Cadillac Lyric, he said that that might be my next my next electric. So um, you know, they certainly have

messed up the launch on that car, and I guess they could still possibly pull it out though they keep working on it. Also agree on the CELST

that's uh, quite a standout. I think the big the big problem for

all the JAM brands right now, um, as they make the transition to electric and software defined vehicles is execution. They're not executing, They're they're not

able to build the vehicles. The software is buggy, um, and if

they can't get that sorted out quickly, they are and to have a big problem across the board with all four brands because you know, Hummer software is has been very problematic the Lyric. You know, the software has been one

of the big challenges with Lyric. And if they can't get those get that

fixed as they start to launch the high volume EV models, they're going to be in big trouble. All right, So we've got thirteen minutes to go

through more than thirteen brands. So all right, so all right, Chrysler

and I'll just put a question mark and that's it. Yeah, call it

back in twenty twenty five when they launched something right, Yeah, twenty twenty five, the airflow. It won't be that called the airflow, but anyway,

I don't know. Ralph Yields is super excited about the design of it.

UM can't wait to actually see how it turns out. Um. Dodge

makes lots of money on muscle cars, but I wonder if that translates to EV's. We'll see in a year or so. Potentially they could be great.

You know, they're they're trying to do something different with EVS and if the customers will come along, then they could be in good shape. Chryslay

and Dodge are becoming niche here and niche here, and the only brands that matter really are Ram and Jeep Okay Um John. Now, this is a

company that you ought to adore so Fisker. It's got a great design,

it's got an asset light strategy, it's comparatively good price. But my question

to you is will people buy them? Good question? Gary. I mean,

they're going through production hell right now. Remember they're going asset light.

Magna's doing everything for them. They can't build cars and software. Is that?

Is that right? Sware software very interesting. So and that's what Fisker

is doing, right, not Magna. So so you got that they're burning

through cash. Henrick came out and said, hey, I'd welcome a partner

here. That tells me they got big problems going forward. I'm wondering whether

the gestation period that Tesla went through the last what twelve fourteen, fifteen years, where it took till what twenty nineteen, twenty twenty maybe before it posted an annual profit. You know, that is very hard for any startup car

company to do. Going back to Kaiser and uh, you know, and

Tucker and I just wonder whether it's too late for anybody beside Tesla to have that sort of success and have to wait, if you, if you add that number of years onto any of these other companies, wait until well into the twenty thirties for that to take off, even if everybody's buying evs by then. Okay, we're gonna skip forward because we talked about them a lot.

Genesis, I think it may become a bigger story than Lexus. I

think based on the EGMP platform and what Hondai Motor Group is doing with electric Um. Yeah, Genesis could be really well positioned in the next few years.

I say, they still have beautiful design and a lot of value, and they seem to be taking the long slow um uh you know process.

They are growing it slowly and being hum patient about very minute sales in the US until um they get all the product in place and slowly build its luxury cred which you know Alexis was able to do fairly quickly. But again,

that doesn't that doesn't happen over the light night for Alexis or for Honday's luxury brand. Yeah, although Genesis has grown in about double the speed of Lexus.

Yeah, product and sale, Genesis should scare the hell out of every luxury brand because look at just their sales in the US, which decent with barely any dealers. Wait till they line up more dealers. Okay, m

moving on to Honda. You know it strikes me that if you see any

Honda ads, you think it's a truck company. What happened to the accordance

civic they sell themselves. I was just at a Honda event this morning at

M one Concourse, and you know, I think we're going to be hearing a lot more from Honda on the electrification side over the next couple of years, and I think, you know, starting with the prologue then rolling onto their own stuff, it could be interesting. The whole field of thing with

Sony is also going to be fascinating to watch. Totally agree and just to

build on that, them getting deciding to stick in with Formula one, the fact that they created this whole new software group within the company, the fact that they teamed up with General Motors to get their evs in faster. Something

went wrong I think at Honda in just three four or five years ago, and all of a sudden it seems like they're getting their mojo back. But

now they've got to deliver. They're talking the right thing. Now we got

to see what they deliver well. And three four or five years ago,

when I was still living in the Detroit area, the big thing was the partnership between GM and Honda to do electrics, and it seems like, you know, maybe that lit a fire under Honda Engineers and they said, hey, we need to start doing our own thing. We can't wait for for

GM to sort out its software, and you know, uh, now they're on its way. It's it's always been remember a smaller company than than Toyota

or Nissan for that matter, if you look at their product lineup, and so they're not exactly niche, but they they're a little bit of a specialty.

And I think the leases right that the Civic and the Chord probably sell themselves to a certain extent. And you know, look at the fact that

you can still buy a Civic with a manual transmission, even if it's down to one spec or two specs or something. So next year, next year

you'll get a Civic Hybrid as well, and this year you've got the Accord Hybrid. So they are branching out a bit on those mainstay products. Okay,

um, we're gonna skip Hundai Infinity another can anybody anybody? They look

nice happening this year? All right? Next? Okay, everybody's in twenty

five, Sam, I don't understand this, all right? So so the

next one on the list and is Jeep, and I want to give a shout out to one of our favorite guests on Autoline after Hours, Mark Allen, the head of exterior design for Jeep, who has announced his retirement, which what a loss I had, No, I didn't know that that.

Yeah today, Yeah, I just announced it today. Great designer. Yeah,

so, um, you know had he had the hardest job in design next to the Porsche nine to eleven designer. Yeah. With that is with

the Wranglers specifically, Yeah, Jeep has gotten off to a great start with their their four by E plug in hybrids. UM, they're doing really really

well, especially on the Wrangler. UM. They expect this year that they're

going to get to fifty percent penetration on that powertrain on the Wrangler. UM

as they ramp it up more. UM, next year they're going to start

launching BEVs, and that's going to be really interesting. You know, they're

a brand that can sell within you know, within the Stilantis portfolio at a higher price point, and UM, that could put them in a really good position launching those evs. It's good go ahead at least, sorry that's gonna

say. By adding so, so one of those electrics that he's trying about,

the Recon, is kind of like an urban electric version of a Wrangler, So they're you know, it helps them buy time that the Wrangler can just stay as the plug in hybrid for now. They don't have to go

full electric because the Recon will sort of pick up some of that slack um.

And then they've got also the Wagon air S which is its code name.

We still don't know the actual name of that vehicle, but that's like a grand Cherokee sized, fully electric, but part of the Wagon air Fa family. So a lot of really interesting ways that they're just keep expanding the

whole Jeep lineup. So lately we had a fast okay, real quick on

Jeep. I think they're in trouble. I think Broncho has kicked their teeth

in sales or the Cherokee collapse. This is why the Belvedere plant is shuttered.

They better do something new and fast and different. Maybe electrics the way

to turn it around. I was going to ask, actually, as part

of my portion, whether you thought that the go catching the Wrangler thing and sales was going to stick or whether that's just temporary, whether that's just fashion.

Everybody vote, just vote yes or no, temporary, temporary, I'm guessing temporary. John Jeep's got to prove to me that they can turn it

around, all right, um Kia. I think it's remarkable. Brand.

I think Brand, oh my gosh, you know, they were always so so far, far far behind hun Day. Now they're knocking on the door.

They could surpass them. The styling has been brilliant. The fact that

you can sell a sixty thousand dollars electric Kia just blows my mind. Five

years ago we would have scoffed at the notion. You know, kudos to

them. They're doing so much right. I love the V six and I'm

looking forward to the EV nine and EV nine is can be a really important product for them. I know that generations ago, the Honday Sonata was built

in the Kia factory, uh, you know, with the Kya version, and so it probably should be no surprise that they have the quality and the manufacturing know how. So I'm not too surprised. Yeah. And just a

nice job of differentiating Just nice job of differentiating styling from Hunday. Yeah yeah,

okay, um jumping ahead um Lucid remarkable technology, stunning design, but breath taking price. Yeah. And again execution problem, you know, trying

to get them actually built and out the door to customers and you know, get the dollars in. I saw my first one in the wild out here

in Lancaster the other day, and it's a local car. I've seen a

couple of times, so you know, if they might might have five or six driving around certain urban areas to make it look like they're selling some I just saw a chart that showed that UID is more patent dense than even Tesla is for its cars, which I found fascinating. And just this morning I

read the Saudi Foreign Investment Fund or Sovereign Investment Fund is putting another three billion dollars into lose It, and that was the big question mark, would they have enough cash? I think the Saudi's now owned sixty percent of the company.

Wouldn't surprise me if before it's all over they own one hundred percent.

I think that will be the ultimate result, is that they will own it out right and it'll be always be a super high tech company. But it's

just the their their first car. It's so beautiful, but it gets pretty

buggy. I mean, they still have a lot of a lot of a

lot of things to work out. But I guess to John's point, they

need something to offset a Ramco, right. Uh. In terms of the

future, All right, Todd, you get you're the only one who gets answered this one, but answer it quickly. Mazda does it have a future

not alone. No, they can't. They can't survive alone. Agreed,

Kayoll Skip, Mercedes, Nissan. They consistently put out good vehicles, but

it doesn't seem to be moving the needle. But Nissan is coming off a

near death experience, right, you know, the whole Carlos going thing through that company into a tizzy. It looks like they're starting to turn things around

from a revenue and a profit standpoint. Interestingly, they make more money in

North America than anywhere else in the world right now in North America is literally keeping Nissan alive, so it's arguably the most important part of the company.

But the jury is still out even though they're showing signs of improvement. Can

it stick. They went for cheap materials and a low price a couple of

generations ago, and now they're trying to recover from that. That's going to

be kind of tough. Can't do the start of a turnaround? Um?

Okay um, Since we'll we talked a little bit about Porsche before, we mentioned rand before. Okay, Rivian it's going to become the official brand of

ARII members. And if so, is that a bad thing? Yes?

And no? Uh yes, yes it will be the official brand of Arii.

I don't think that's a problem. You know, if they if they

can rain in their their ambitions and focus, um and on the lifestyle vehicles and then the commercial vans, they could do okay. Arii is starting to

close some of its stores so um and go more mail orders. So where

where do you drive your Rivian if you you know, if you don't have an Arii store near you. Well, there are some problems outside of in

addition to the auto industry, uh, including I've been kind of following their their plant in uh they're plant in Georgia and they're they're getting a lot of legal backlash there and u um that could that could throw some sticks in their wheels. Um Okay, Subaru, I'd say there's no brand that knows its

base better. Yeah, very Niche knows exactly what they're doing, know how

to market it, know how to give their people exactly what they want.

And and this you know, the styling on some of it, what's also like a hiking boot. I'm not a big fan of a lot of the

look, but man, the people who buy them love them. They've they've

always been uh the suv company for people who hate SUVs. So the only

product that they have that doesn't do well as the ascender. As long as

they keep bringing puppies to auto shows, I'm all for them me too.

Yep, yeah. Uh. Mazda, Mitsubishi, Subaru. Big question mark

to me, what or they can survive. They're all about a million a

year in sales globally. Subaru is an American brand. Essentially, it doesn't

sell very well elsewhere in the world. I question whether they can make the

transition. And they all need Toyota, and they all have these deals going

with Toyota. Most of them have deals going with Toyota, all right,

So so Toyota is the next one. And so when I was looking at

Toyota, I found this number, which is sort of astonishing to me, that in Q one it's sold over sixty six thousand cameras. Okay, there

is nothing that General Motors sold that doesn't have a box on the back that is near that, Nor does Ford have anything without a box on the back that has sold that many. I think that that's sort of the thing that

we don't pay enough attention to that people are still buying good old internal combustion engine vehicles at at Vium and Toyota is sitting there happy, and then they're selling the new Prius is beautiful, I mean with a lot of really good stuff, the land Cruiser, the New Prius, the Tacoma, the Grand Highlander. Like I mean, you know, we often have knocked them for

a lot of semi bland vehicles, but uh, you know, they're they're turning that side of it around as well, and I'm sell them more and more hybrids, you know, a quarter of all their sales now or hybrids, and that's just going to keep growing, you know. And their whole

strategy around hybrids versus evs rationally makes all the sense in the world, but unfortunately consumers are not rational. Um, so you know they're they're responding to

that. And you know, the announcement yesterday that they're going to build the

three row electric suv in Kentucky, uh in twenty five, you know, is part of that. Yeah, yeah, go ahead. I was you

say, the land Cruiser is to to Toyota what the Corvette is to shove away. By the way, but I was just wondering of those sixty six

thousand, Uh, Toyota can resold the first quarter, how many of them became uber or lift cars, about sixty three thousand. Yeah, my question

about Toyota two comments Number one, I still am trying to figure out why the hell they're losing money in North America. I don't understand what the hell's

gone wrong at the company with that. Number two is I admire very much.

Even though they're talking this whole rational approach, Sam, that you're talking about of hybrids and plug in hybrids, they are in a mad scramble to reorganize their ev development, creating a whole new company within the company, much like Ford's doing with Model E. I got so much respect for Toyota to

be able to do that, But I still come back to why the hell are they losing money in North America. They're printing new business cards for these

reorganizations and it is really taking out taking a toll on them. All right,

So, so we've come to the last one, okay, and we're just just a few minutes over over time here. So Volkswagen, So here

is a giant brand in Europe that thinks it should be a giant brand in the United States, but it just can't get any traction. What's going on

there? I think by twenty thirty, Scout will be out selling the Volkswagen

brand in the US. Yeah, they should call that the VW Scout if

they want to beat their best volume year ever in the US, which is still nineteen seventy. They just ye, they've got a shot at it with

electrics with the ID but I don't think they're going to do it. Well,

maybe the ID Buzz will bring back the minivan. Yeah, Well,

I've just said they've never understood our market, and even the ID Buzz, which is designed for US, we had to wait substantially longer than Europe did to get it, even though it's designed for US and we only get one version of it, So they still do not understand even when they target products directly at US, they don't understand our market and they don't consider it as big. They don't care about it as much as to your point, police,

I think, I think it's always Europe first for Volkswagen in the US.

Well, you know, we sold them Beatles starting in nineteen forty nine or whatever it was, and you know they can wait. Yeah, yeah,

Look, Volkswagen has never gotten it together since they dropped the Beetle back in the mid seventies in the US market. Right now, they've got a

huge problem in that their ice sails in China are falling far, far faster than their EVS sales are making it up. One little bright spot for them

in North America in EVS is if you look at the group VW Audi poor shot their number two to only General Motors in terms of selling EVS. You

know, Ford likes to brag that it's the number two brand. Well,

that's true for a brand with Maki, Lightning and E Transit. But if

you look at the ranking by corporations, GM number one in EVS in the US, Volkswagen Group number two, Hyundai Group number three, Ford's number four.

We may we may see the reshuffling of that in the second half when um, when the wrap up and Quatalan and they're born for the Machi and the the Lightning gets under way. Agree, Sam, totally agree. Okay,

So so we're done. So be sure we didn't miss anything. We

missed lots. But you know, I talk about Tesla. We always talk

about Tesla, Sam, even if we don't say the word Tesla, we talk about Tesla. That's right at least, Yes, yeah, Okay,

I want to thank you all for being here today. And and uh and

and and this is this is like the most far flung group of people we've had leases in in some place in northern Canada where it's the snow on the ground right now near the Arctic Circle. I think you're the Arctic Circle.

And you know, we got got Todd and Pencilvan John's up north on an Island. It's just it's just crazy. I can just keep moving east if

you want, just you know, before too long, continue guys, right, Thanks everybody, you guys do next week. Thanks for having us by

Autotline After Hours is brought to you by Bridgetone Tires Solutions for your journey.

If you like this program, I would like to learn more about the automotive industry. Check out our website at auto line got TV, or look for

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AAH #650 – The Auto Industry at Midyear: Winners, Losers and Puzzlers

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