AAH #673 - Big Problems in Electric Pickup Land

I'll online After Hours is brought to you by bridge Stone Tires, Solutions for Your Journey and by Borg Warner. Hey hello, everybody, can you believe

it? We're in the studio again. I wish Gary Vaslash was here.

He's out traveling. He'll be back with us next week. But I've got

two really good people to talk about things today. We're going to be talking

about electric pickup trucks and what the heck is going to happen with that market segment. We've got Warren Brown from r FQ Insights. Lindsey Brook longtime colleague

of mine formerly with SAE Engineering, and Warren. We need to get into

a little bit of your background. You've been you were at General Motors along.

I knew you when you were at Wards and now you're you're doing your own forecast, teaching and doing my own stuff. Yep. Yeah. You

spent a long time covering this auto industry. Yeah forty years. Wow,

yeah, unreal, as almost as long as me. That's right, I've

been at it, so warrant we had you on the show here, I don't know pre COVID no, no, no, it was during over time because we were doing it all virtually, and you had your forecast as to what you thought was going to happen with electric pickups in terms of sales, and I thought, man, this guy is so pessimistic. His numbers are

so low, and now they're starting to look like you were spot on.

You really don't see these electric pickups selling in mass numbers, do you.

Well, no, I don't see them that way for quite a bit of time. You know, just a number of reasons. There's forget about the

range issue or the recharge time issue. They need to solve the value proposition

for customers, I mean full size pickup customers. If you really take a

look at them, they're rural, or they're conservative, or they're both right, and so they're mainstream household people that are out there buying pickup trucks.

You don't forget about the fleet thing for a while. So until they get

the value proposition down to the point where two things happen, One the companies are making money and two the price is something that the customer says, hey, that's a value to be And those two things don't exist. I thought

that they were going to weren't going to exist for a long time. So

that's why I was. I wouldn't say pessimistic. I was a little more

conservative than the most out there. Well, now it's turn not realistic.

Linta. You said you were just recently out in rural America. Tell that

story. Yeah, since the end of May, I've been a lot of

traveling, and in that traveling, I've been doing a lot of traveling in rural America, Central Pennsylvania, Lancaster County, Amish Country, Amish Country, Corn area. Two weeks ago, I was out in very western Iowa,

about an hour from Omaha, and I was at a friend's business. He

has an open house every fall. He invited me out there and had people

from western Nebraska, all over Iowa and southern South Dakota. And as soon

as I'm introduced to people, you know, Lindsay worked in the auto industry, the car topic comes up, and very quickly electric vehicles come up.

It was a great opportunity, just kind of just in a casual way to ask people what they thought. And these were there were farmers and my friend,

aside from having a business farms one thousand acres of soybeans and corn, so farmers, small business people, trades people. There was some engineers there

just kind of like the meat of regular people there. And I concluded in

their opinions about electric vehicles, and we got into electric trucks because a lot of them drove pickups there. It's something that they didn't ask for. Aside

from the things that Warren mentioned, which is all the things we talk about being in Detroit. You know, range, recharge time, are battery costs

going down. We get into the weeds around here. But these are just

people saying. And as soon as they got to Central Iowa, I was

paying about two eighty five to two seventy a gallon the farther west I went, so not very expensive gas. And that was an ethanol gas because the

pumps have like a million different choices. There's ethanol, there's pure eighty five,

there's but this is just gasoline. Driving my Ford Maverick hybrid out there,

which typically gives me about five hundred miles of range. You know,

it's tone of trailer around here, it gets forty five miles of the gallon.

Ton of trailer, it still gets twenty eight miles of the gallon.

So I'm sure we'll talk about hybrids. That just sets the stage. So

talking to these people, you know, they're looking at what the diesel engine does for them, if they're farmers, what gas engines and diesels have done for them in their pickup trucks, and the the price of gas still is not prohibitive. So the question is is why do I need an electric truck

now? I pose it to one guy who said he was looking into solar

for his farm, and he said, if I could take if I had battery storage for the solar array and I could charge things implements with the batteries, an electric pickup at some point might make sense. It might make sense.

And then I mentioned lightning with all the plug ins and you can power your house and all this jazz, and he's he says, what'ses that truck got for it's seventy five thousand dollars? And then we started to talk about

Tesla, which we talked, I'm sure we're going to talk about too.

Yeah, And so they think this thing is just something from complete fantasy land.

And a friend says, if I was going to if I needed something to attract attention in my little town, he says, I just get a king ranch f one fifty and spend eighty five grand and have the nicest interior that anybody's got. I don't need a visual status symbol, so to speak.

So that's in a nutshell, is just this unscientific kind of traveling that I did when the topic of cars comes up and the electric cars come up, and I thought these people had some pretty good points. No that they

hit you with the value proposition. Yeah, imagine somebody walking into a Ford

store or a Chevrolet store man seeing a Silverado EV and a regular Silverado which will probably have a lot more of them on the lot to pick their choice of color and their choice of options. That's not going to go away,

okay, And then having the salesman try to explain that value proposition for the EV and the wife or husband going, well, what's the gas version run for well man, that's twenty thousand dollars less. And so that's why I'm

mention to two. Things have to happen, and it's going to take a

while. And now I think manufacturers are rerealizing it's going to take a while.

They have to get their cost down to where they're making money. Otherwise,

why push the accelerator down. We're losing a whole bunch of money on

these things, tell me again why we need to push the accelerator down.

And I think they've come to that, come to that conclusion at least here in the near term. And the second is the value proposition. Customer's got

to feel that whatever it is I'm going to spend my second largest expenditure that I'm going to do other than my house, I need value. It's not

there, not there yet, and I think it goes beyond. You know,

we're here in Detroit, and you know, you and I have covered this since its inception, since the idea is and we're hearing about the role of megacities and how that causes pollution worldwide and the CO two impact and so forth. None of these guys I talked to mentioned tailpiping missions and zero emissions

and wanting to be green at all. They live in green, they live

in cornfields. They've got all of these different economic pressures of you know,

seed prices and weather and the price of their combine and the repair prices of all the machines that they've got, and there maybe some of them are, but they're not thinking I want to be green with my truck. Yeah.

Well, it gets back to what you're saying, I mean, these trucks for the farmers, the work people. It's a tool. It's not something

to express your personality or something like that. Well maybe it is, but

it can still be damn nice if you get them fully loaded one but sure, absolutely, but first comes, it's got to work as a tool, and then I can have all the nice stuff that goes along with it.

Since since the companies have been making them. Though the exterior interiors are today

are fantastic, out of this world. But you'd have to step back for

them and look at them and say, the styling on a pickup truck is conservative. It's got a box on it, which makes it even more conservative,

whether it has two doors or four doors. So I think that that

that's what I'm saying. They're either rural your point, lindsay, or conservative

or both. So what happens to these car companies? I think we're talking

really you know, Ford, Chevrolet, Slash, GMC and Ram. Right,

So Ford's building this monstrous new it's it's essentially like a new Rouge plant down in Tennessee, I think Louovale City, I think they're calling it right, what's the capacity going in there? Three hundred thousand, Yeah, I

would say that that's a good that's a good number, waring what the hell's going to happen. Three hundred thousand and that plant goes live the end of

twenty twenty six. I think I think they said the first units start rolling

off the line, then sure, well, let's do the good things.

The very fact that Ford and what General Motors will ultimately do with Orion.

So just so the viewers know, Orion has been building the Chevrolet Bolt and it's supposed to start building Silverado. Was supposed to start building Silverado's next year,

but they've pushed that back what two years now, right. But the

reason that I'm making the comparison on those two plants is one of the ways they can get the cost down is to optimize the overall layout of the facility that's only going to make electric vehicles. They don't have a mix of stuff

going on in the plant. That means their material stores, their body shop,

the paint shop, the whole thing could be optimized, including labor, optimized for electric vehicles. So that's why they did Blue Oval, That's why

General Motors did Orion. That's why in theory Chrysler or Stilantis is going to

do Belvedere right optimization of the manufacturing process. To answer your question on they're

going to put more than just pickups in there, Okay, I mean, because you're saying there's no way that there's no three hundred thousand electric pickups a year, not in this decade? Correct, absolutely not. As a matter

of fact, my number is a third of that, and that would be a good number. One hundred thousand a year correct this decade? Later in

this decade, well, twenty seven, twenty eight, Yeah, yeah, Can you make money at one hundred thousand a year admortizing blue Oval? No?

Yeah, But they're doing this stuff in a way that says, and I've maintained a couple of times, how do you get to the transition?

You can't get to the transition by not having excess capacity. Otherwise do you

actually never get to the transition? So you have to have over capacity?

Right? I think so. But as you move that those products into that

there's only so much production in North America. It's not like this is gonna

be a whole new set of production of pickup trucks or SUV's. I think

they'll put an suv in Blue Oval as well. But imagine now moving all

of that to me and into optimized battery electric plants. That's not new volume.

That's the substitute of the ice volume that exists today. Some's going to

have to happen to those plants in terms of how they transform, et cetera.

So Blue Blue Oval is not gonna just make pick up. Yeah,

but I'll tell you how those old plants are gonna transform. They're gonna close

down. You can't run those things at half capacity, right, I can't.

Well, I can't argue that. Actually, But how long is the

transition? That's you know, we everybody was saying, you know, Biden

administration twenty thirty and all these other kind of you know, global, regional, etc. No more combustion engines, No more combustion engines. We said

it at twenty thirty. It seemed like GM and Ford start you know,

they make their business plans according to that twenty thirty. Do you reckon it's

going to be extended and that they will need ice production and models depending on how long this goes. Look, I believe the overall transition will last to

twenty forty. Yeah, Okay, it would be It would be a strategic

error if any one of the leaders of the Detroit Three said, well, you know, we we have to meet the Biden administration vision, so therefore we're gonna we're going to do all of this. No, when the doors

are closed, what those three executives say is, we need to make money to fund this stuff. Keep selling pickups, ice, keep selling on suburbans

and expeditions. Okay, keep selling Ram pickup trucks, because we got to

fund it. You got to keep it there, right So that what who

was the guy who ran North America GM for a little while? Steve Carlisle

says, it's kind of like a dance. You know, it's going to

be a dance. It's going to be a little bit of this, it's

going to be a little bit of movement. And I think that many,

including the administration, painted a picture that was just unrealistic. Absolutely well,

to me, it was a stretch goal all the while. You know,

if you say, well, we want twenty percent EV sales in twenty thirty, you're not going to get to twenty percent. But if you say we

want fifty percent by twenty thirty, maybe you get to thirty percent. So

I always looked at this as a stretch goal, and that's been my number all along, and I'm just pulling it out of thin air. I'm not

doing any great analysis, but I believe by twenty thirty probably one out of three vehicles sold in the US will be election No. I mean, that's

that's that's a good number. And if you look at the proposed emission rags

that were just published a few months ago, twenty twenty seven out to twenty thirty five, I think is the next round. That's EPA's estimate too,

is I think about thirty percent market by then. I still think that's pretty

optimistic, really, I really do. Unless you know, look at these

transitions in the past. The only way people have kind of given up one

thing and gotten another was if the first thing there's no more of them, whether it's leaded gas or all the things that that we've gone through, you know, in the last twenty five thirty years, you have to get rid of that because people will still keep using it. And like I said,

if gas is still I paid three oh seven this morning, why would I give up my truck for anything? You know, I mean, that's still

very affordable. And it gets to this mindset of convincing someone that I need

an electric pickup truck. You know, aside from regulation everything else, it's

just you know, there isn't reason beyond a mandate that you're not going to have that anymore. And I think, you know, talking to hybrid well

will penalize you if you do, if including the manufacturer, And it looked like Ford I think yesterday came out and said we're just gonna eat the fine for this. You know, we're not going to do it. Yeah,

we're not going to do my clients that privately. So it's right if they'll

just eat it. They're not good, they're not good. We're not going

to disrupt everything. All the ground we've laid for EVS, we're not going

to disrupt that. We'll just eat this fine. But it's just yet another

ex billions of dollars that they're going to have to eat for this, you know. You know the thing I keep pointing out is, uh, there's

really only one electric pickup that you can buy right now, well two right, Rivian and Ford Lightning, right, and the Rivian's really expensive truck, you know, ninety three thousand bucks. I'm not even sure they're making any

money on it at that The Lightning was a rush job to take an ice product, stuff it full of batteries and get it out there. I thought

they did a really good job with that, really good job. But we're

not going to see real electric trucks until Chevy ever figures out how to build the Silverado in volume and the next generation of F one fifty. I think

the next generation in F one fifty. Especially even Dougfield, who runs all

their electric car stuff, electric vehicle stuff, told me it's still not going to be a completely clean sheet truck. The real clean sheet doesn't hit the

market until about twenty twenty eight or something like that. So my thinking is,

yeah, don't judge what's going on with electric pickups right now with what's in the market right now, because it's still not the industry's best foot forward.

I agree with that. That's the second half of the optimization, other

than the manufacturing. You know, even I think the Silverado is a adaption

of the Avalon unch that they made in Mexico, right so, and there's nothing wrong with that. Let's get to market. As long as it works,

that's great, But the real one on top of the manufacturing optimization that I talked about is the vehicle optimization. So those two things combined. I

think that there's been a number of studies that say you can take ten grand out of each product if you optimize the plant, and if you optimize the product, that's going to solve their profit issue. But it'll take a while.

It'll take a while. I think. The only other thing I'd want

to mention here is people forget it's not just half done pickup trucks in the market that are doing a job, either for the rural folks that you visited or any place that you go. I'll pick on Ford. They have an

F two to fifty that's marvelous. Chevy has the same thing. They have

a three point fifty that gets adapted to a whole bunch of different configurations.

Right. Those are real work trucks, and those are thirty five to forty

percent of the market. Yeah, they're not going electric anytime soon, right,

I mean even General Motors, which at one point said we're going to go all electric by twenty thirty five except for our heavy duty trucks. Yeah,

because that's the reality, right, But but at what point? I

mean, so we have this optimized thing that's just this general skateboard with UH with the motor on one end, maybe motors on both ends of flat battery pack struct a very structural, very stiff, low center of gravity. And

it's kind of what is in my mind for what all of this is going to be at some point. I mean, trucks might be a little bit

different. We saw some news recently with Hyundai kind of being able to get

CV joints out of the way and put these little kind of gear trains in the wheels. Really interesting stuff. There'll be there'll be some modifications to that

that basic skateboard, but it seems to me the skateboards is going to be for SUVs. It's ultimately going to be for pickup trucks. They'll have to

figure out a way for those f two fifties through four fifties to swap bodies out and make chassis, cabs and so forth. But that's that's that again.

How do they get the cost down that we started talking about in this because when all of this was proposed, it was Silverado the work. Silverado

was going to come in I think at thirty nine grand. Well, that's

goodbye. The lightning was going to be whatever, not the same about the

same. Right, that's gone by. Battery costs are coming down, but

at no point is there going to be like just a sea change of pricing that says, now we're going to be back in the thirty thousand dollars forty thousand dollars range. We've already kind of were off to the races with price.

I'll give you the counter argument to that. Imagine you're sitting in a

boardroom. Okay, purchasing comes in and manufacturing comes in and says to the

CEO, just figured out how to take ten grand out of the cost of this thing. Do you think the first thing the CEO says is why don't

we just give it all back to the market. Then after I know I

wasn't saying that, but all of this money, right, let's just give it back? Right? Yeah, that's the parent's dilemma, right. And

at the same time, you know, we remember that period where, you know, two thousand and eight where everything collapsed because there was the ridiculous you know, eight year loans and so forth. Well, people's pay has not

it's not kept pace with that, you know, from thirty nine thousand now these things are fifty nine thousand, and by the time these things hit volume, like you say, twenty twenty six, twenty twenty seven, they might be another ten grand more something like that. So again we're heading towards one

hundred thousand dollars for a pretty regularly equipped vehicle, I think pretty quickly.

I hope not. I know. You know, it's one thing to sell

the innovative crowd. That's great, okay. Yeah, and Lightning was selling

to the innovative crowd that got out there, and you got like you said, got to give them credit for that. But the North American market production

sixteen to seventeen million units, one point three million of that in Mexico.

What are you going to sell to the Mexican value proposition? It's a good

point, yeah, okay. The data that I look at says the Chinese

are slowly figuring that out in Mexico. Okay, So it costs value proposition.

If the government was here. I just preached those two things that you

have to measure and metric both of those. Yeah, you know, I

think the problem that the industry got into is what the government band dates and everyone said, Okay, we're going to try to hit fifty fifty percent market share EV by twenty thirty. But if you go back just a year ago,

I mean, the EV segment was rad hot. I mean just people

were falling all over themselves trying to get Lightnings. You know, Rivian couldn't

keep up with production. While they couldn't produce, I mean, but they

had a lot more buyers correct. And now here we are a year later,

all the early intenders, you know, the innovators, have come in, got their product. And you know, that was one thing that Ford

was bragging about. My gosh, all these people buying Lightnings. They're not

pick up buyers. In fact, they're not even Ford buyers. We're getting

all these people coming into the segment that have never been there before. And

so they planned to double production at Michigan Truck or Dearborn Truck and then triple production. And now all of a sudden things have slowed way down. What

the hell did they do? Yeah, yeah, take it slow. Thing.

From the ice ice side of the business, they've learned that they don't have to really deep discount stuff. They can get a more rational order bank

by not having seventy days of supply on the dealer's lots force on vehicles, et cetera. So I think a number of different things have changed that they're

going to have to make money on the ice vehicles, those will be around, Those will probably be less discounted, even the pickup than they were before because whatever loss they were taking, that loss has been magnified now. And

that's why I'm just saying, the thing has been stretched out. And you

know what, if you're a marketing person or a salesperson, you go, okay, then we'll just deliver what the customer wants and we'll do that Steve Carlisle dance determining exactly where the market's going to go versus oh, no, you have to be all electric by twenty thirty five. Well that's not on

the God didn't hand that down on a tablet somewhere. You have to satisfy

the customer demand. And there's three things that have gotten worse since all those

vision statements were put into play. Three major things on the cost side.

The first one is on the material cost side, in making batteries in the United States versus making them in a low cost country and providing a certain quantity of materials that must come from the United States, including labor. I would

submit that the business case didn't have that little increment of material cost in its approach. Two Troy three have just signed a UAW contract that maybe wasn't as

generous as the original business case assumed. That's two and three. When they

wrote that business case, they didn't think those CO two emissions and EPA regulations were going to be that stringent in saying you're going to have sixty seven percent of your production. So take yourself back four years probably when the business cases

were being developed, they had an early view of what Tesla was doing.

We got to be there, great, But I submit I'd love to go back and look at those business cases because I used to do those. I'd

love to go back and see what the assumptions were. And those three things

have fundamentally changed on the cost side. Yeah, yeah, And you think

because just you assume that pickups are the biggest market chunk over here and Americans love them. And now Americans really don't care what's under the hood. They

look at a tour number, maybe they look at a couple other utility numbers.

Can I toe with it? How much I haul within? How much?

But pretty much. If it's got the same amount of grunt with an

electric motor, they're gonna love this. Of course they're gonna love it.

And we can sell cost of ownership as as an advantage, which a lot of people now really don't think of, but now this is becoming a big deal. We can sell simplicity, we can sell the battery lasting for however

long. I mean, there's certain things that it's just kind of we're going

to jump off of ic super popular product and jump right into battery. It'll

be a dance. It'll be a dance. And let's talk about more of

the dance after the break. We've got to take a quick commercial break.

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hydro track technology, but you don't have to know how the science works, just where the brain is. What really matters is they're bridged out. All

right, we're back talking all about the electric pickups segment and what's going on there, and when's you raised hybrids earlier? Is that where the market's gonna

go? What you think? And you've got a hybrid Maverick. Yeah,

I've got a hybrid, Maverick. Toyota's kind of you know, reconfigured the

Prius. They're selling like crazy the new Tacoma. You know, they just

told me completely we did that, and there's a hybrid options and hybrid.

They've got a hybrid option on the Tundra, right, And I thought when GM announced no more nothing but EVS, I mean, from this point on, we're gonna let the icvs play out. Everything forward is EVS. All

the new stuff is ev No hybrid. Of course, then they snuck in

the Corvette. But but that's a performance that's yeahpens. Yeah, but nonetheless

they pledged no hybrids. Mark Royce told me, lindsay, this is like

the classic two drive trains. We can't make any money. Well, GM

can't make any money, but I've gotta tell you Toyota is making money on these things. So GM missed that. I thought, this is a big

miss if this transition takes a lot longer, and the truck segment being maybe the sticking point that you might mean hybrids, the hybrid might be the big choice for for trucks versus an all EV play. So that's that's what I

wonder right now, is will there be more of them? I mean,

Silantis is kind of stuck with the x E s RAM X. It's a

it's a it's a fairly mild hybrid system, but nonetheless it's doing the job for them. Yeah, I think that that's that showroom dilemma that I talked

about. The salesman talking about moving somebody into a BEEV hybrid sits in the

middle of that, okay, And I always felt that. I can think

now Achio is probably sitting in Japan sipping sake, sitting. I told us

so. But the hybrid is a nice alternative. The new rampant's coming up

with that, with that hybrid alternative and the extended ranges fantas. Yes,

yeah, it's fantastic, But the point is it is a cost burden for the manufacturer, but it's also a consumer relief for the customer in the showroom that doesn't want to go all the way. Your experience is what I'm hearing.

For the people that have bought for they love them. Uh, And

so I think that Ford and Stalan has had a better strategy. Toyta obviously

was always out there. Don't think for a moment they're not working on Bettery

elector. Yeah, they're trying to copy Tesla as much as so, but

they were way out there. But I think based upon I don't know how

many people have seen it. You know. General Motors did issue a short

release to the News two days ago saying that they were now officially studying hybrids.

Well, I'll tell you, I talked to a source. Now I

know after working forty years in the business. That's code for somebody down in

the engineers making the kind a crash program going yeah yeah, But somebody got a source that GM pointed out that they've been developing hybrids for South America because they know South America is not going to go electric entertime soon. Mexico,

Mexico, Mexico, Brazil, Argentina, Columbia, Chile. So I don't

know what power trains hybrid power trains they've been working on for that. But

you know, they saw a lot of trucks in Brazil, a lot of pickups in Brazil, and Argentina brought the first new ones down. I would

love to know what power trains they've been developing for South America, because seems to me that's going to go very quickly into their North American product if it's the right power train they could. I failed to mention what I was the

city of area. But when I'm sitting at the Ford dealer locally here as

he was doing all the paperwork and waiting for things to be faxed in and sitting there, and a call came in, and so at that point they were rolling their F one fifty that would be in the showroom for almost a year as the you know, here's our showcase vehicle. They're rolling it in.

A call comes in and it's a customer, and the showroom's empty.

There's a Mustang GT and they're rolling this lighting in and I'm buying a Maverick Hybrid and he says, no, no, yeah, they're rolling one in right here. You can come over and look at it. You don't want

this truck and here's why you don't want it, you know, and you're gonna be unsatisfied with this teething process that you're gonna have to go through of you know, finding charging and we're gonna have all that stuff, but you're not ready for it. You must have known this guy, so he taught.

Hopefully he comes out it. Hopefully he was the guy. Because I

think dealers are a big problem when it comes to solving electric via. I

agree. I personally know three people. Three people. One wanted to Hunter,

one wanted a Lyric, one wanted a bolt products. They were talking

about it, and they were talked about it. They were talked out of

them, right. And these are people like, no, I know all

the problems, I know all I want that vehicle, right. I know

one guy who two dealers would not help him get a Shivvy Bolt. He

finally said screw it and he bought a Tesla Model three. Really. Yes,

they lost the sale, and they lost a sale, right, So I hope this this dealer knew the customer and said, hey, Joe, you're not gonna like this one. Yeah, And he was talking about have

to introduce himself. I could tell he knew the guy. But I mean

that's just one. You know, he knew this guy wasn't ready for this,

And maybe that's the early adopter, which is pretty much ready for a lot of disruption and kind of discovery. When you buy a new product,

you know, whatever it is versus somebody that is just hey, I just want the new version. It's every three years I buy a new truck,

I want the new one. Yeah, you know, I wouldn't be surprised

if we go back twenty years ago dealers been talking people out of buying hybrids.

Yeah, yeah, yeah, but it's much easier. So sure now

I think that you know, how you sell more hybrids. Don't call them

hybrids, just say oh yeah, that one fifty miles to the gallon, I want that one exactly right. Well, that's a good idea, actually,

yeah, because you know, this country is so politicized. I mean,

eavies have become politicized. Even hybrids have been a political statement. Now

they're they're losing that right because they're becoming so ubiquitous. But I mean,

up until fairly recently, if you told people you bought a hybrid, oh well you're one of those left wing ingies, right, ye, yeah, yeah, you know, and now pretty smart. It's a pretty smart decision

because you can still geting because you're not your hands. I've seen people say

this, you know, they don't talk about a hybrid. Oh yeah,

yeah, my car gets forty miles to the gallon. That's how they talk

around. But isn't that Toyota's doing that with the Cavri. It's the standard

power train and they're not putting any badges on it and it's just a hybridized call. But getting back to a point you raised, it looks to me

like Toyota is getting the pricing on the hybrids. Looks to me like they're

getting up to two thousand dollars more over a nice vehicle, and I think two grand I'm guessing probably covers the cost of a hybrid from a manufacturer extra pieces parts, probably, I would say, yeah, my guess would bs that four charges extra for a hybrid in the Maverick and what I bought mine, it was the standard power train. Yeah, it's like it's seventeen hundred

bucks now, which which probably covers that, right, but you know covers most of it. Y, I'm not sure about all the engineering noodles that

go into the vehicle and make sure how it works. But I would say

two grand or seventeen hundred is a good number. Yeah, but in many

respects some of the vehicles that I've looked at, the pricing on a hybrid is fairly close to the pricing on a be sins for a pickup truck.

Yeah, so think about it. You can get but an additional fifteen miles

to the gallery. At least you're paying about the same price, you know.

I mean, that's just you're saying to make me think, what are the residual values on hybrids espectually right now? I mean, can you get

a better lease price because it's a high I'm assuming hybrids have a certain cachet that helps the residual value. I wonder, I don't know, maybe in

a higher retail fuel price environment, But like I said, paying three oh seven, it's not like, you know, it's not like that m ov lane in California where it's like I gotta get one of these, I'll pay you another five grande. And plus it's probably four fifty a gallon in California

too, right, So yeah, there's more motivation to hybrids if GM has irrespectable what Mark told you, GM has made that move. I think that

to me, that will take a whole lot of stress out of their dealer sales force and being able to move a mix depending upon what the customer's looking for right now. That decision matrix, this one or this one is kind

of why. I mean, if you really looked at it in terms of

range and all that stuff, can you even list of ten things? Right?

That was that hybrid? I bet you when any Chevy dealer that read

that quote press release, it wasn't really a release. It was kind of

a notice to Detroit News because somebody was in there poking questions about hybrids.

If I was a dealer, I'd go, when can I get them?

Because it was either Cox or somebody else Automotive said the turn rate on hybrids were what three, four or five times more than Yeah, but remember to excuse all the numbers, you know, so even just like Tesla, excuse the EV exactly exactly. That's right, that's right. So Ram going with

this extended range? Is that the way to do it? I think it

is. I mean, you know, for a while, Toyota Stilantis,

as we know, didn't really have an EV strategy at least what we knew in the in yea in front of the curtain, in front of the curtains, right right, So they're late and coming. They got criticized for it,

but they had to be looking at it. Okay, So now they've

got that, But now they have to also sell vehicles, and you know, the supply chain has come in with electric motors and smaller batteries and so forth. They've engineered these things. They've got them in jeeps, they've got

them in I think it's I think for the moment, for that transition from twenty twenty four to twenty six or twenty seven, I think it's a smart way to go, like to see what the pricing is, Yeah, right, there is. It seems like they're offering two kind of versions, the

extended range I don't know the exact term, and then the regular one.

But think of it this way. People would say, well, oh my

goodness, how am I going to get to Traverse City and back on an electric vehicle? And you see them bringing their hands range that ram I can

go for a here days. Yeah, yeah, yeah, where travers are

back, you know, yeah, exactly right. And for those who don't

live in Michigan. Listening to where we're talking long distances. We're talking,

you know, five hundred miles round trip to Traverse City. Yeah, yeah,

yeah. And with an EVA typically you've got to stop in charge to

head up to CC right, And with RAM what the real smart thing is you can toe longer distance. You'll you'll be able to get three hundred miles

of towing with this truck and stop filling the gas tank and keep on going.

Look at it. Actually, yeah, I mean because they use it.

I just hold I don't think the first version, like the one that they showed at the Detroit show, I think that will be their first version.

I just hope that their next one is the one that they showed the press as it was futuristic, it was really cool looking. I had a

lot of really brilliant interior design features. So one of the things that I

tell my and my supplier clients is, and I used the RAM as the example, I also use the one that we're going to talk about in the minute cyber truck example. If you're a supplier and you're quoting on a job,

one of the questions that one of the ten significant questions that you need to ask, is can we see the vehicle, because if you never saw the cyber truck, you'd maybe believe tusks or Musk's numbers on the volume, and then once you saw it you made have a change of heart. And

I used the RAM as the same example that one at CEES was a phenomenal looking vehicle, the one that was just a ram? Yeah? Right,

yeah? Where do they package the engine? And that is that in the

front or in the back or in the front. It's in the frontront,

yeah, And it's just a generator. Yeah, it's a generator, right

and V six right, that's right. You need a lot of power to

charge those batteries, that's right. Does the thing that they call the ram

charger? Is that only D six? I believe? I'm not sure I

believe. Yeah, okay, But it brings up a point once people start

to see cyber truck on the street, will this stretch there, you know, vision of maybe what a little bit cooler looking truck does the world want and need a cool looking pickup truck? But seeing something more modern as we

know existing vehicles, When you see something in stretches styling, it's kind of like everything else looks a little bit older. Is that a factor in the

segment? Can I take you back to your image visit? Yeah? Okay,

which yeah, actually a cyber trucks next to a horse drawing amage car.

There rest have been three dozen they had part at this one swap meat that I was at, which was also a steam tracktor so so so, so the technology was from eves back to steam tractors. But there there must

have been two dozen Amish buggies parked there and they had water troughs and no horses were disconnected. They were over here the buggies. So it was a

great place to kind of And these are all people that work on modern equipment.

They all work on modern combines and have GPS locational on them and and you know, so they're not it's not from the previous century. It's just

that they live in the previous session. But I was talking more about Yeah,

and John's heard me say this. It's a work truck, but it

also goes to church on some day, you bet, Okay. It's not

like they got three vehicles sitting in the gag joepid. Maybe somebody out in

Los Angeles says three vehicles sitting under grudge. But for the types of people

that we've been talking about, rural, conservative or both, they take it to church on something. Can you see the cyber truck at church? No?

No, no, no, But here's not my church. I don't

think pickup buyers, traditional pickup buyers, not many of them are interested in the cyber truck. They're not the buyers. The question is are there enough

other people, early adopters, tech crowd. What is there enough of them

to sell the cyber trucking volume. And remember, now, cyber truck is

going to be sold all around the world, not just in the US market.

Pickups are not big elsewhere in the world right with a few exceptions Canada, Australia, Mideast, Thailand. That's about it. But what statement to

make. I mean, I can see rich people in Paris buying a cyber

truck just to drive out of the shops that he's saying. So the question

is is there enough non traditional pickup drive buyers to buy enough cyber trucks for years to come? Not just in the first year. There'll be a big

spike in sales, no question about it. But five years from now,

how's the cyber truck selling what's the model cycle change could be never, there's no cycle change. You haven't yet seen that. Yeah, if you if

you think of the cyber truck as a and this is what I put into my forecast as kind of like a coop new coop new convertible kind of life cycle. Yeah, you're right, good, accelerate and peak. But then

okay, yeah, what's next? Those those buyers want to make the statement,

then they're going to want to know what's the model change going to be?

Well, if I were Tesla, I would make a big three row suv off the same platform. You've got to do something. You have a

cyber truck, you have a cyber suv, you know, but look like a Model Why or bigger Model Why, or look like a cyber truck of issue, you know. One of the ones that I say front end I

think is key. I like the front end. I think the front end

was beautiful. It's that peak on the on the roof that's kind of weird.

Whereas if you made an suv version and carried that out, it would eliminate the peak. I think visually it will look a whole lot better.

I think it'll be a coup cycle. Well, so two two and a

half years, it does great, and then I think it slides down.

It does it fit into a number of trucks, I mean maybe Hyundai Santa Cruz, which is contemporary. You hardly see them around it all. You

know, their signals are pretty good. They're pretty good. They are thirty

thirty five thousand, yeah, thirty thousand, So we see those vehicles.

You could argue that the first Ridgeline was kind of like that. A lot

of people thought, this is the Ridgeline is outselling the Ranger business. Can

you believe it? I can't believe. Yeah, yes, trying to make

a point, you said, never mind, just looking at the niche pickup trucks back to Subaru, brad et cetera, that have been more of this kind of lifestyle mountain bike, surfboard kind of truck, you know that have had kind of you know, glitzy paint jobs and so forth. Is this

kind of the electric a little weirder version of that that it's going to be a kind of a niche vehicle for this market? I don't know. Do

you have any sales forecasts? Do you have any numbers for cyber truck?

Where do you think it's going to come again. I have I have three

versions in the forecast, the quad motor, the dual motor, and the single motor. Right, so there's three versions of it when you lump them

all together. Now, as any good forecaster, you have to ask yourself

what's the price. I can assure you I don't have thirty nine thousand dollars

in the price of of my forecast. As a matter of fact, I

believe today I'll go on record, yeah, yeah, yeah, saying here it is the dual the Great Card Act. The dual motor. Price will

not be less than fifty two thousand dollars. Okay, But they they're launching

with dual motor. They promised the single motor. That's that's I promised a

quad. Yeah at some point, yeah, okay, I'm just saying fifty

two thousand. That means the quad is going to be higher. Now,

all those people that put their dollar down on buying the thirty nine thousand dollars option and flipping it, those those those are gone. Okay, So how

many can they do with fifty two thousand, thirty six thousand, thirty six thousand a year? Oh but my cycles, now, my peak is thirty

six thousand then in cycles. Now, wow, wow, that's not a

lot yet. I think I don't know why I got some number in my

head that I read someplace, one hundred twenty thousand a year. You don't

see anywhere near that. I thought were said, we can't move that many

with three thousand dealers. It's tough sledding here. Now. Ford's dilemmas they

have hybrids, which is the purchase alternative, which is both a sweet sauce and a sour sauce inside of a Ford dealership to move evs, right, it is, yeah, and uh, you know, the the price differential in terms of customer value is still a lot of whack. But no my

Ford number for just the halftimeue, I'll challenge you on that. Just from

the standpoint Chevy's got how many dealers probably about the same, right, but four thousand, how many bolts are they going to sell this year? Eighty

thousand, seventy thousand, so they can only move seventy thousand and four thousand dealers that they're nowhere near the Model three, which is I don't know, at least ten thousand dollars more expensive, So I'm not sure I would use.

So you're arguing down on the ford. No, no, no,

I'm arguing up on the cyber truck. Oh yeah, okay, I think

the cyber truck because again global number global. You do know what the transaction

price after federal incentives is on the bolt punch, It's like twenty grand.

Twenty grand. Yeah, it's a little higher than that, But you've made

my twenties. You made my point. It's it's low. There's a lot

of hustled income that needs to be burned as you move from twenty five to fifty two thousand. Oh yeah, yeah, yeah, no, no,

I hear it, I hear it. But most claims that there's X number

of people who have put that I think one hundred dollars basic. You know,

what is the value of the Tesla Mojo to this in terms of the first year's worth of production? Just having that bank of people that they got

to, I mean, this should kickstart this pretty well, if you if you believe, oh, I think autible, they're they're not going to be able to keep up with demand, right, but again, production is going to be extremely low. Yeah, and you've got all those people that gotta

have it. I mean there's probably people selling their spot in line. You

know that, because there's going to be those, Like I said, there's going to be some rich guy in the on the shop sell you say, in thirty thirty six thousand of them, whatever it is, give it to the Yeah, thirty six thousand of them globally. Yes, see my net

stuck way out. The price and the volumes over ye oh man, it'll

be hot. But let's assume that it was one twenty. Let's just go

with that. Where would they build it? Well, awesome, that's going

to be filled with ys and threes. Until they moved they got line,

I thought, move to Mexico. Until they moved to Mexico Mexico, I

thought, was this what everyone's calling the bottle to there's low caught twenty five thousand dollars in treating and then su Well, yeah, that would make sense, absolutely, absolutely, But my understanding is not my understanding. I know

they've got a separate line just for the cyber truck. Now, I don't

know what it's tooled for or anything like that. I eat annual capacity.

I hope they've got a lot of folk putting together at most one hundred and twenty thousand units a year bore. Yet again, it's an interesting topic.

I think he stuck his neck out the first time. No, and so

you know he's trying to be an innovator and you and you can't. I

mean, the world of EBS in North America without Elon Musk and his company is not It almost wouldn't exist. Wait once that Sean's waved to me off

camera, you got any number or anything like that for the cyber truck.

No, No, our audio has there's an issue with the audio. Okay,

So I was just gonna say it might be time to wrap it up.

Yeah, okay, well look we'll wrap it up right now. But

Warren Brown, great discussion, very much, John, and we'll be back here again next week. Auto Line After Hours is brought to you by bridge

Stone Tires, Solutions for Your Journey and by Borg Warner. If you like

this program, I would like to learn more about the automotive industry, check out our website at Autoline dot tv, or look for us on YouTube on the Autoline channel

AAH #673 - Big Problems in Electric Pickup Land

Ford F-150 Lightning

Chevrolet Silverado EV

Chevrolet Express

Ford Orion

Ford Maverick

Toyota Prius

Toyota Tacoma

Toyota Tundra

Chevrolet Corvette

Ford Mustang GTD

Cadillac Lyric

Tesla Model

Land Rover Discovery

Dodge Ram

Dodge Charger

Hyundai Santa

Hyundai Santa Cruz

Ford Ranger

Honda Ridgeline

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