AAH #776 – The Death of the Dashboard? The Radical Future of Car Interiors

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Hey, welcome everybody to AutoLine After Hours.

And especially to you, Gary.

Well, thank you, John.

How are you?

I'm doing pretty good.

In this Michigan winter that we're finally having,

this is a real winter.

Let me tell you what.

You're gonna have a hot show.

We're gonna have a hot show.

Well, yeah, that's right.

So we should let everybody know,

our special guest today is Olivier Juane.

He's the director of Advanced Customer Interface for VIAD,

which really doesn't tell the audience anything.

He's really an expert in interior design

and we're going to be getting into that.

And we've also got Dave Zoya joining us as well.

So Dave, great to have you on the show.

Thanks for having me.

Yeah.

Pleasure to be here.

Excellent.

So Gary, you always have a bunch of questions all lined up.

I sort of go off the top of my head.

Why don't we start from a more structured standpoint with you?

Okay.

So Olivier, one of the things that we promise

that we would talk to you about,

and we'll start talking about this right from the get-goes,

and then we'll move on from there

to the other things that John will get on to get to.

You guys developed screen technology called Air Vision.

Correct, yes.

And this is, my understanding is to eliminate

much of the screen confusion

that exists when we're looking at cars.

And nowadays it seems, and Dave and I have driven

a ton of cars of late looking at interiors

and screens are everywhere.

And not to mention the lighting that is being used

as trim now.

I mean, it's just like you're in some sort of a carnival

when you sit down in a vehicle.

You guys are addressing that.

We're addressing that.

In fact, the concept is also to reduce the quantity

of information that is blasted at you all the time.

I always feel like as an HMI designers,

you have a canvas and this canvas is now multiple screens

and you feel like you have to put information everywhere.

As a consumer, as a driver,

sometimes you have way too much information coming at you.

So the thing we do with Air Vision is we work

through a reflection type system,

which means the picture framing that you get

of what we call postcarding effect

of having a screen inside a black surface

doesn't exist anymore.

You can have one screen, two screens, five screens

and not see a screen but see information.

And this information seems to be floating

in the space in front of you.

So it has a magical aspect to it.

And because of that, you can make information come

when you need it and only the information

that you need at that moment.

So it gives you a less distracted driving system,

but also a more precise system.

And the quality of the image is really interesting.

But I mean, is there a classic screen

or are you just using a surface that you're projecting on?

We're not projecting.

It's literally a reflection.

So you still have screens,

but the dimension of the screen is not as important

in the sense that if you have a nine inch screen,

but you can see a nine inch block, right?

Now if you have a nine inch screen in the system,

you don't see the edge of the screen,

so you see just the information.

That allows you to have maybe more classic screens

and have just as good of a quality.

Particularly when you start using a local dimming,

you can really, really get some beautiful imagery.

Because the decor, what's behind is always there.

So you have this beautiful piece of fabric, for example,

that is there and the image is floating in front of it

in the image of just your cluster, for example,

or your navigation.

You have to experience it.

Yeah, I've seen it.

I wouldn't even describe it as a screen,

because when you say screen,

we all think of the screens that we're used to.

I would call it more of a display area.

And so instead of these rectangular screens

attached to the instrument panel,

it's a display area that sort of floats

behind the instrument panel.

Correct.

I guess is the way I would describe it.

But you must love the idea as a designer, Olivier.

You must love the idea of getting rid of these screens.

It has become almost, I mean,

it has, I think it's been a rest to the number of screens

in the size of screens to a point where I feel like

the consumer of getting screen fatigue, you know?

I mean, we're up to doing like,

one of the ways it doesn't exist anymore,

that the 52 inch screen, 52 inch is bigger than my TV.

And do I need that to drive a car?

Clearly not, right?

So I feel like we're going to move toward

a much calmer interior.

And that's a solution that can be used for that.

But the other thing from a design standpoint is,

these screens just look like an afterthought

that have been added to the instrument panel, up to now.

And it's, to me, I knew the industry had to get through this.

It's just an in elegant design solution.

And so I love the fact that you guys are coming up

with a whole new, another idea on this.

Even the screens that have been embedded into the console

or the instrument panel look like screens

that have been embedded, maybe a little bit better

instead of just stuck on.

But you guys are shattering that whole paradigm

with this new approach.

Yes, that is a goal.

And bring something to the designers

that they can design things again.

Because it feels like, when you have a screen,

you have a screen, the best you can do

is cover it with a black lens

and maybe make it a little less square.

But it's still always the same language.

And it becomes difficult to get a differentiation

from interior to interior when you start looking at

particularly in the Chinese car,

which have screens everywhere,

they all end up looking the same to me.

This is not the design freedom of creating something

interesting to look at because of some of the screen.

This then requires that the IP itself

be designed differently than it is designed now.

Yes.

So tell us what the changes would be.

Well, I think some of the biggest changes

is mostly on the integration.

So that's one of the advantages we have at Forvia

is we have multiple business group.

So we have an electronic business group

plus four cyclical electronic which does screens.

And we have the interior system group

that does instrument panel.

And we have even software people in Toronto

that are doing some fantastic software based around the eye

so that it's not just programming,

it's programming for the human eyes

so that we can do better imagery.

And all those working together give us the capacity

to do some intelligent integration,

which I can't give you too much detail on that

that's at the moment,

because we're still working on it.

So would you deliver an entire IP

to the assembly line as a goal?

We do.

Currently we do.

We do currently deliver, I don't know.

Close to two million, I believe, a year IP instrument panel

for all kinds of customers.

And we do that all over the world.

How do you control, I mean, you're obviously looking

at eye gaze and things like that,

but is there also another way to control what's going on?

So today you can control it through in the MMI,

so a rotary like you control a lot of German cars.

You can't touch it because it's too far from you

and it's not really a touchscreen

because it's not really a screen.

But you can control it with a screen, a secondary screen.

You can control it by voice as well.

And the one I prefer that we are currently developing

is gaze and select,

where since we've had to implement cameras

to watch a driver make sure he's being safe.

It's a new European legislation.

So through that we can track the eyes

and by tracking the eyes we can see where he's looking

and we can then, through a button or voice,

select an icon to activate something.

So you could look at something on this display.

Right, which is not even there

because it's a reflection, right?

And then it would detect that and let's say,

it was a navigation map that it would blow the map up

so then the guy could see that.

Yes, so the gaze and select,

the degree of precision is what we're working on.

It works.

What we're trying to do is define

that they are to a much smaller space.

So currently what things we do is like,

we look at an icon, the icon gets bigger

because you're looking at it

and then you push a button to select it

and it opens a menu, for example.

Those kind of things are what we do right now.

The spacing we have between the icons

is currently a certain distance

and we're trying to shrink that distance

so that we can correctly identify things

that are close to each other.

But we've been in testing with consumer as well

to see the appetite of people

and how quickly they understand and use it.

It has to be very precise for it to be adopted

so that's what we're working on right now.

But you need the button so it isn't like an oh shit moment

when you look at something and you're like,

oh, but didn't we need to look at that?

A confirmation.

If you think of the system that people talk through

when they can't talk, it's looking at the eyes

and they're, you know, those things

that have been around for a while

and being able to do it by blinking would be a solution

but everybody blinks and some people blink more than others

so that being a physical confirmation,

I think is a good way of making stuff in a mobile vehicle.

So it's not for it that we are also doing

something else driving around, yeah.

Well, John, you mentioned screens

and how they had this effect on interior design.

You know, what was it, the Ford Expedition

that had the screens that were like behind?

Yeah, it was behind the, sort of along the windshield.

Right.

And then BMW's got that, they're doing a reflection

on the fret that's around the glass.

Are you seeing designers coming up

with things like you guys have built up?

I mean, like this is becoming a new phenomenon?

I feel that that's things we've been showing,

you know, having smaller screens that are closer to the windshield

so that they are more in the direction of the car movement.

And so your focal is not, that's changed so much

from a screen here to, you know,

I think that's definitely something that's coming more and more.

You know, we've been showing it for maybe five years,

I think the first time, yeah, four or five years.

And, you know, I feel like we tend,

I don't know, I'm gonna say that properly,

but we tend to come up with trends,

with informed that we show in our show car

and then we see them a few years later in the market,

pretty regularly, and not always made by us.

Unfortunately.

Somebody stole your idea.

I would say, I feel like the car industry

has a mind that is very everywhere at the same time.

I always feel like, you know, we think of something

and then Audi does it.

And it's like, oh yeah, we had the same idea.

It's not, we didn't need to show it to them.

They, you know, the round air vent with a number

giving you the temperature on the little screen.

We did that at the LA Auto Show

and it was in their car the next year, you know,

and I know they didn't see it.

You know, it was just, I think designers

are the same influences, right?

We look at the same thing

and you're trying to solve the same problems.

We try and solve the same problem.

We have the same influences.

So I believe that there's not, you know,

one person that invents everything.

I think it gets invented by PCs,

by multiple people at the same time.

And then sometimes they get put together

in really intelligent and nice ways.

But yeah, I don't feel like designers are all mighty for that.

It's just everybody's got pieces of it.

It's just, you know, reading a magazine,

watching a movie, internet, you know, all those things.

They all influence us.

So the heads up displays go away,

you think in the future with this kind of?

You know, the one thing that adds up great at

is giving you information that's floating in space.

The problem is the space that's in front of it

is a lot, it's not controlled, controllable, right?

So if it's really bright out, you can't see it.

If it's really dark, you won't turn it down

because it's too bright.

It is great because where it's projecting the information,

it's just difficult to control because of the environment.

So what we're doing with our vision is reversing the system

so that we control the environment

and you always have a good vision of it.

But in the end, it's giving information when you need it,

when you need it in a much more elegant way.

And that's what we're trying to do.

I like what you talked about, Olivier,

reducing the information overload for drivers

because it's definitely there, you know?

There's all kinds of distraction, not just with the phones.

Right.

How do you, where do you see that going?

Because I've seen all kinds of future thinking

from mainly automotive suppliers

as to where things could go,

they're using virtual reality to identify,

whether it's a person or a dog,

walking along the sidewalk, maybe going in front of them.

And all of it is really cool from a technology standpoint,

but all I can think of,

if all these things start popping up on my screen,

identifying what's out there,

it's going to be more information overload.

Yeah, that's, there's an add-as-aspect of it.

So the safety, you know, this I think is a good thing,

but how much of that information needs to be given

all the time is more,

I feel like we should be able to control

the quantity of information we give

in function of the importance of the information we're giving.

The fact that the car can see every pedestrian,

every bicycle, everything all the time,

it's great for the car to do that,

but only show it to me when I need to know

that this bicycle I might eat because I missed it.

You know, that the importance of information

should be hierarchically,

I don't even know if that's a real word,

put in front of you at the right moment.

You know, we were working with companies

that was working on getting cars driving by themselves.

And that was reversed because now you were a passenger

in a car and the screen was giving you

a lot of information to make you feel safer

that the car was actually seeing everything

that you were seeing and was aware of it.

And that was a completely opposite effect

where you wanted that over information

because the person spent all the time looking at the screen,

not even looking outside because of all the information

that was happening in front of them.

And that was a really interesting experience

and we did some tests on tracks

with the robots crossing the road and things.

That was pretty interesting.

So, Levy, to what extent do you think

that vehicle manufacturers look at the abundance of screens

as being something that is valuable, sets them apart,

makes it, you know, it's a bigger screen,

it's a more expensive vehicle, obviously.

And, you know, I mean, it's sort of like

when wood was used in the interiors for a long time

because that had luxury, right?

And...

I wish wood comes, I hope wood comes back

because I like the warm aspect of wood in the vehicle,

but especially modern wood.

But do you see what I'm saying?

That, you know, it would be very difficult for people

to suddenly, you know, pull back and say, you know,

oh, you know, we have a discrete design

in terms of our interface versus, you know,

you get into what was an escalate IQ

that has a pillar to a pillar screen, you know that?

Yeah, I feel that we are reaching the point

where the screens are going to go back down

in size and quantity.

We reach a mask, I feel like we've reached a maximum,

pillar to pillar, I mean, it's in the fourth,

it's in the Cadillac, it's in Lincoln,

it's in, you know, a lot of Chinese car now too,

it's in the Mercedes, I mean, the giant piece of glass,

it's not really fun to look at.

I mean, I feel like that as a designer,

I get it, I understand why it's there,

I even know why we got there, now we got there,

now I think it's time to back up from that a little bit

and bring interesting design back into the,

and I think you still need the information,

so we're still going to have information given to us,

although, I mean, I used to drive a Renault 5

and there was nothing in there, right?

My natural was just fine, but we also need to look at,

I feel like there's also a massive problem

in our industry today is affordability of vehicle,

we've just got to a point where there's so much money

in the cars that most people can't afford new cars anymore,

I mean, you know, I look at my children,

none of them can afford a new car

and they all have jobs and they all, you know,

it's gotten to a point where it's difficult to find something

that's even affordable at all.

So I feel like, you know, that excess of technology

costs money, I mean, screens are not cheap

and the more screen, the more money

and the more electronics behind it

and the more and the more and the more,

and I feel like the prices of vehicle proportionately

to what they provide has gotten out of hand completely

and I think that's something that needs to evolve

and that simplification will bring cheaper prices for sure.

Olivia, we've talked a lot about screens,

display information and all that,

but I'm sure you're thinking more about the entire interior.

What kind of other things do you think

that we're going to see, trends?

Seat comfort is really getting key

because we spend more and more time in our cars.

So how you get to comfortable interiors,

it's not necessarily by adding more feature, right?

It's good design, it's understanding the body posture

and now we move in the seat.

I feel that that's something that's going to grow

and the sustainability is another point.

I feel like that's something we don't talk a lot

about in the US, it's more European thing,

but it is, some of our customers have targets

for the amount of sustainability,

meaning recyclable material, recyclable material,

how to evolve an interior,

like we're working with a European OEM

on how we can reformish a car.

Basically a factory where you bring your car at one end,

you drop the keys and you go at the end

and you get your car back and it's been modernized

and it's been upgraded throughout the entire system.

And that's really interesting to me,

the idea of modularity, meaning how to disassemble

and reassemble a car.

A car seat typically after five years,

the bolster on the exterior of the car is beat up

because you go in and out,

everything, the driver's seat really wasn't passenger.

What if she can remove it and replace that

and only that, not the whole seat?

There are ideas of the upgradability

that I think are interesting for an interior.

Now this is very interesting what you're talking about

and I wanna say, Sean, is it Stellantis or Renault

are doing refurbished parts that they're selling?

Both of them.

But I like this idea of you bring your car to a factory,

they run it down the line and you have an upgraded car

at the end.

So is it like the interior of an airplane?

I mean, the airframes last a long time

but the interiors get upgraded.

They get upgraded and renewed regularly, yeah, absolutely.

That's the concept that we're toying with right now.

And not just us, Renault does it as well as Stellantis.

It's very European today but I think it's interesting

to see it grow because we have limited resources

on our planet, right?

And we can't just keep on bearing it

after we're done with it

because we only need it at some point

and nothing is infinite.

So I feel like the automotive industry

uses a lot of raw materials.

Maybe we should use them longer, better.

Well, this is an interesting idea

because this gets to the heart of affordability.

If you can have a car that's four or five years old

but has been upgraded again,

this is better than certified pre-owned.

It's taken that up another notch.

That's an intriguing business model.

It's clearly not the current business model

of making and selling all the time.

But I feel like as the markets are maturing,

there's got to be some evolution on how we do business.

And then I gotta believe that with autonomy,

you're able to completely rethink what you might be able

to do with the interior of a car.

Yeah, absolutely.

And the fact that we've been toying with seats that turns,

the idea of that one image that we've all seen

with the old families in this Studebaker, I think it was,

and it was a glass roof and they all around the table

like playing cards or something, that image,

it's still fascinated us as designer for interior

because there's a modularity to that idea

that if you move your chairs around,

you move the people around the interiors

and you do other things,

not just sit on the row waiting to get there, right?

The journey becomes an interesting part of the travel,

not just where you are and where you want to be,

but how you get there and what happened in between.

But you guys have to deal with a lot of safety regulations

in terms of that's probably what is keeping,

because it always occurs to me that seat designers

always have these wonderful looking seats

that we see at shows

and we never see them in production vehicles,

they all...

Absolutely, yes.

And I'm sure that that goes back to the thing of

like you need that thing bolted down.

Yep, the safety aspect of a seat is incredible.

The, you know, in a crash situation,

the amount of force that you impact on the seat

that has to go to the floor of the car

and those four little bolts, basically.

So there's a lot of engineering behind it.

However, there's capabilities

of doing things a little different

and it's not always explored

because it's easier to do something standard.

You know, tooling a seat frame is many millions of dollars.

So the OEs have figured that out a long time ago

and they use the same frame for multiple vehicle

and for multiple generation.

You know, I remember many years ago

wanting to add an armrest that was actually part of the seat

and to make that one hole to put the armrest fixing on,

that was a million dollar tool change.

So we never did it, you know.

So I feel like as generation changed,

that's when you can implement something new and different.

But like between one model year

and the following one, there's not a lot of changes.

Usually the frame can last for 10 years.

No question, you know.

Olivia, are your customers the automakers

bringing companies like Forvea in earlier in programs?

You know, I saw Ralph Jills,

the head of design for Stellantis a few months ago

and he was saying he wanted suppliers in the studio

at the sketch stage because, you know,

if you can design ideas in at the very beginning,

there's no extra cost.

Whereas if the design's done and they see, like you say,

you want to add a hole for an armrest, it's a million bucks.

So my question, are they bringing you in earlier

than they did before?

Yes, they are.

And you know, you're talking about Ralph,

he's definitely one of the spearhead of that idea

him and quite a few other that are wanting us to look at.

Because my job as a designer is not to create for them.

My job is to make sure that their design

gets into a production.

So a lot of time, I have more technical knowledge

of how it's done than they do.

And I can spot things that are not feasible much quicker.

But being a designer, I can talk with them in the design sense

and explain why and what we could do if we can do that.

That would bring the same result.

They can do that with engineers.

Engineers is not feasible and then walk away.

So what do I do with that information, right?

So we are getting involved as industrial designer,

not stylist, a lot earlier with the OEs than we used to.

Especially in the, there was a period long time ago

where we were very involved with the design team

very early on.

We were working with concept car at the time.

I've worked on several concept car with design studios

to get to something that was feasible quickly.

And then there was this period where everything

went to build to print and they didn't want to talk to us

at all anymore.

We'd get things thrown over the wall, look at them,

tell them it doesn't work, make some proposal,

and that slows the system down a lot.

If we can get to a feasible design

when we're sketching together,

that would be in production much, much quicker.

And I feel that that's one of the advantages

the Asian OEM, especially the Chinese OEM,

have had on the rest of the world

because they are involving us much, much earlier.

Very interesting.

Look, with that we're gonna have to wrap up

this part of the show.

But Olivia, very interesting having you come on

and talk all about where interior design's going.

I wanna thank you for being here.

I appreciate being here.

Thank you very much.

Good deal.

We're gonna be back in a minute.

We're gonna be talking about more of the news

that has gone on all week long

in this crazy automotive industry.

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All right, we're back.

We're gonna be talking news of what's gone on in the week.

And Gary, you always got a list of things to go through.

Well, I think that since it's the closest in time,

we should talk about the Tesla earnings.

Oh, wow.

That was fascinating, I thought.

I don't know if you've been following that too, Gary.

Yeah, a little bit, yeah.

So sales down, revenue down, operating profits down,

net profits down.

The stock goes up because Elon is essentially,

in my view, kind of walking away

from the retail automotive business

and you're gonna put all those chips

on AI, humanoid robots,

RoboTaxies and computer chips.

Yeah, it was very interesting that

during the earnings call yesterday and the questions

and the questions are always very interesting

because the analysts are asking questions

by and large and there was virtually no discussion

of automobiles, okay?

They announced yesterday that they're winding down

the Model S, they're winding down the Model X.

They're scrapping them.

I mean, let's say.

Buy them now because they're gonna be gone.

They're gonna be gone in the next quarter.

So they're gone in a couple of months.

Now, we all know that they're old in the tooth

and they should have probably gone away before now

in traditional auto industry that would be

just normally don't make them go away.

You refresh them, put some money into it.

But nobody talked about that.

Nobody has questions about that.

I mean, there were questions about the cyber cab,

but you know, what are the analysts interested in?

They're interested in where's the stock price going?

And it's pretty clear the stock price

is not being driven by automotive retail.

And I mentioned automotive retail because, you know,

clearly they're still going to make the cyber semi

or not mentioned, right?

And the cyber cab.

So that's why I'm saying retail automotive.

That seems to have fallen off Elon's.

Well, the story on electric vehicles

isn't very compelling right now, right?

I mean, so to sell Tesla stock basically based

on what's going on in the electric vehicle market

is a tough sell, I think.

Yeah, no, it totally is.

And when your sales are going down,

your revenue and your profits are going down.

I mean, if this was a quote unquote normal car company,

their stock would tank.

Well, maybe not because GM also reported drops in profits

and its stock did fairly well.

Well, GM's net income for 2025 went down 55% from 2024.

Much of that was attributed to the tariffs

that they had to eat.

Oh, and they're EV right off.

So I mean, yeah, if you, to your point, EV right off.

Right, yeah.

So yeah, no, the Tesla story is fascinating.

Musk says they're going to spend $20 billion

in capital expenditures this year alone.

I mean, just to put that in perspective,

that's like twice what General Motors would normally spend.

And Tesla's a much smaller company than GM.

So I mean, he's going to go crazy,

getting into, getting rid of the X and the S

and converting that manufacturing space

for humanoid robots.

He wants to build his own chips.

We all know that fab plants are humongously expensive

and so on and so forth.

Yeah, I was interested in, at CES,

there was a lot of talk about robotics

and a lot of auto companies or people in the auto ecosphere

are getting into robotics and in humanoid.

So you got all the chip guys, right,

are acquiring robotics companies

or launching divisions where they're very focused.

Even traditional suppliers like Schafer talked about it

recently about how they're going to sell sensors

and things into the robotics world.

So everybody's jumping into that field,

but it sounds to me like he's a little over optimistic

on the timeline, right?

Oh, what a surprise.

You want to think about a timeline, right?

So I think there's that,

because the more realistic chatter around CES

was it's a difficult proposition

and there's, particularly with humanoids

and getting them even into factory settings,

there's a whole cultural aspect to this

in terms of companies wanting to invest in that,

getting workers that you have the labor issues,

all that kind of stuff.

So I think he's way over optimistic

about using that capacity to start pumping out

humanoid robots.

Yeah, he is, but Elon's all about painting

this great vision of the future

that people buy into and that drives the stock price.

So when you ask, why didn't anybody talk about

the normal automotive operations?

No, he's talking about building

a million humanoids a year.

He's talking about 5 million to 10 million cybercaps a year

and building their own chips, designing their own chips

and where they're going with AI

and Tesla and SpaceX both are going to invest in XAI

and that's what the analysts are,

that's music to their ears.

So if you look at the, you know, the Optimus 3

which they all proclaimed was, you know,

the best thing ever and ever will be world without end

and it occurred to me, I wonder how these things

are gonna be serviced and repaired

because mechanical devices break, right?

And so I was unable to find any indication

that that's being addressed by Tesla.

And it reminds me of when we had Henry Paynon

who owned his Model 3 and he had a problem with it

and he had to go from Detroit to Cleveland to get it fixed.

Okay, so you've got your Optimus 3 that's in your house

that suddenly is freaking out, who's gonna fix it?

Well, look, you know, any assembly plant today

has all kinds of robots in there,

mainly welding and painting.

They've got to be serviced, they've got to be repaired.

Right, but they're not walking around your house

and this is what he's talking about these being used for.

I mean, you don't use a million robots.

I mean, he's got six plants,

ain't gonna be using a million robots in six factories.

Right, that's part of the problem is the adoption,

even in factory settings, there's a few units

or things like that.

There's not like a mass volume

that somebody usually commits to and getting it

into your house, I mean, you know,

people are talking about the whole safety aspect of that.

You know, are you gonna trust a robot

around your kids at this point?

So, you know, I think that's a question.

But to fixing them, I think they wanna train the robots

to fix the robots ultimately.

Somebody had a demonstration where they were swapping out

the robot's battery at the end of the day kind of thing.

So, you know, they can train them to be self-sufficient.

Service robot takes off its arms, sticks it out,

be poking robot.

No, you're right, it was a Hyundai

with Boston Dynamics robot showed a robot on the line.

It's stomach, so to speak, is a battery.

It goes over to a shelf, it pulls its battery

out of its stomach, snaps another one into place,

and goes back to work.

So, why not have that kind of approach

for servicing them or repairing them?

But, I'm skeptical.

Well, okay, so you mentioned Hyundai.

Hyundai's operating profit, which was reported,

fell 19.5% from 2024.

Well, I know both, Hyundai and Kia took tariff hits.

And that was because of tariffs.

Five billion dollars combined?

Yeah, it was three billion for Hyundai alone

in terms of the tariff impact that they had on that.

And that was talking about the 15% tariff,

not the 25% tariff that President Trump said on Monday

that he was going to be applying to South Korea

because the South Korean legislature

hasn't approved the deal fast enough.

Well, we'll see if that happens.

You know how Trump operates.

He's always trying to get the deals done

and with more threats, I don't think it's going to happen.

The 25% tariff, that is.

We'll see, I mean, it could,

but I don't think it's going to happen.

Toyota did well.

It had record sales of 10.5 million,

which puts it well established.

I think that was more.

I thought it was 11 million something.

If you include Daihatsu and Hino.

Oh yeah, if you include Daihatsu and Hino,

which Toyota usually does,

because they're part of the Toyota Group.

Well, this is Toyota Lexus.

So just the cars, the passenger vehicles.

And so, but I mean, I've read that they have been absorbing

the tariff costs and so they're saying like,

okay, consumer, we won't pass it on to you yet.

I gotta work on this.

And I've been talking about doing it.

Toyota used to make boatloads of money in the US market.

And then about five years ago,

it started reporting losses and has continued to.

And so, I gotta dig into that.

There's something funny going on there.

Funny how, John?

Funny how, because Nissan and Honda

make more profit in the United States

than they do anywhere else in the world.

Toyota sells more vehicles than they do

at a higher price point than they do and loses money.

What is going on?

It's more stuff in their cars.

Yeah, press more screens.

I don't wanna take my hand as to what I think

is really going on because I gotta dig

into the numbers first.

But there's some funny business going on there.

So, speaking of a funny business,

there was the Canada-China agreement,

wherein I wanna get this.

Canada will allow up to 49,000 Chinese bills,

electric vehicles per year into the Canadian market.

Tariffs on Chinese EVs will drop from 100%,

which they put on after Biden put the 100% tariffs

on Chinese EVs, down to 6.1%,

which is the standard most favored nation rate.

And the 50% of all Chinese EVs imported

under the 49,000 unit annual quota

must be priced at $35,000 or below by 2030.

What do you make of this, John?

Well, look, I've been talking about this

since last year.

Canada has only like four weeks ago.

Well, I know, but this goes back to a conversation

I had with the Consul General of Canada based in Detroit

and that they didn't wanna do it,

but if the Trump administration forced their hand,

they would play the China card.

I.e., if Trump is going to trash

the Canadian auto industry, which he's effectively doing,

GM and Stellantis have already pulled all kinds

of production out of Canada.

So the Canadians were like, look,

if the Trump administration is going to destroy

our auto industry, we're gonna turn to other alternatives.

Most notably being, we'll let the Chinese come

into our market.

And now the question is, is this really going to happen?

The USMCA Free Trade Agreement is up for renegotiation

this summer, that gives the Canadians

a hell of a bargaining chip.

And so let's see if they go through with this

or if it's just a bargaining chip.

I think it's a done deal.

I mean, because the Canadians wanna sell

their agricultural products.

That's part of the thing that they need to move

this stuff to China.

So I mean, this auto part is just one small aspect

of a larger deal.

Yeah, no, I hear what you're saying.

I'm not fully convinced it's going to happen yet.

I think it was a smart play though,

because I mean, if you look at how auto industries

get developed, companies come in, they develop a market,

and then they invest.

Kind of the Trump notion that the Chinese

are gonna come here, lay out a few billion dollars

to set up assembly and all that kind of stuff.

Before they have a market, I think is wrong.

And I think the Canadians are starting to seed

the potential for the Chinese to come in

and invest in Canada, I think.

And the US is gonna be squeezed in the middle

where China's in Mexico, they'll be in Canada.

And the US industry's losing out on that Canadian

and Mexican market.

Trump said he'd welcome Chinese automakers

to come into the US.

But you gotta let them in first, I think.

I mean, that's the way it's always worked, right?

Volkswagen was here, then they built a plant.

And the Japanese, they got some market,

and then they built plants.

And the Chinese aren't just gonna come in here

without a base.

Julia said they'll build cars in the Volvo plant

in South Carolina.

So that's minimal investment for them to come in here.

Yeah, even the fact that they own Volvo.

Right, so it's like they're building it in their plant.

That's right.

But they already have the investment.

You're right.

Usually you have to establish some kind of market

and then once you get enough volume,

then you can start building.

But they already got a plant, Geely does.

So okay, so Mary Barra called this move

by the Canadian government a slippery slope.

And I was reading today, and I highly recommend,

and I'm gonna destroy her last name,

but our friend Jackie Charniga.

Charniga.

Charniga of the Detroit Free Press

wrote an absolutely amazing story

that's in today's paper.

And I think USA Today also picks it up for those

who are not in the Detroit area

about the cami plant in Ingersoll, Ontario.

How Ingersoll, Ontario is basically,

the town exists because of that plant.

And that's where they were making equinoxes,

but then General Motors says,

oh, let's make them in Mexico.

So they took the equinoxes out of the plant

and the GMC trains out of the plant.

So then they were like,

we're gonna build the bright drop vehicles.

This is gonna revolutionize last mile delivery.

This is gonna be the best thing ever.

Rivians got the Amazon van, we got the bright drop, okay?

And how last fall they basically said, we're done.

And now the plant is just being shut.

And I'm thinking to myself,

so what is it that General Motors is doing for Canada

that this slippery slope is existing

because in Canadian government saying,

we're hoping the Chinese will come

and invest some money in our auto industry?

Yeah, I'm not sure exactly what Mary Barra means

by a slippery slope, but things are changing fast.

That's for sure.

And Canada is a market of less than 2 million vehicles a year.

It manufactures about one and a half million.

So the rest being imports aside,

although it exports most of what it produces,

mainly to the US.

But yeah, how much does General Motors really need Canada?

It doesn't wanna walk away from that investment,

but if the Trump administration is going to rig the market

so that it doesn't make any sense to be in Canada,

GM will pull the plug on Canada.

So why did that bright drop van fail?

Well, look, what electric vans have caught on

towards electric transit, e-transit,

hasn't sold much of anything.

Rivian has sold, I think Amazon claims they've got 25,000

of its electric vans in operation right now.

If not for the Amazon orders, where would the Rivian van be?

And so you asked me, why is bright drop?

Look, the numbers just don't compute.

But didn't we hear, okay, when bright drop was announced

that FedEx is gonna buy X-Many

and this company is gonna buy that many,

and this is the perfect use of an EV

because there are deterministic routes

and we know what the routes are

and they go back to the Depot at night

and they get recharged and this makes so much sense.

What happened to that?

That's a great question, Gary.

I mean, because you're right,

for a fleet owner that has a normal delivery route

is about 80 miles for most Amazon trucks.

Perfect, it's perfect to have them electric

and then they go back to their marshaling yard

and they charge up overnight

and the drivers come back in the next day

and everything's full range again.

So I talked to a driver, loves driving the thing

and it much prefers it over the ice-powered vans,

but why have not other fleets picked up on this?

I just gotta believe it's initial cost that fleets,

your cost of ownership, if you buy the EV

probably all works out and to your benefit,

but it's making that initial investment

where you can buy 10 vehicles that are ISIS

and save $100,000 or whatever.

Right, plus I think you're absolutely right on that.

It's also, you've got mechanics who are trained

on the old ice vehicles, you've got all the parts,

you got all the tools and now you've gotta get

all new everything for the electric vehicles.

So it's the purchase price, it's the charging infrastructure,

but it's also who's going to work on these things

and why don't we, I'm thinking as a fleet manager,

it's like, wow, that's a lot of change.

I'm just going to go out and buy some more

Econoline vans.

Yeah, it's changing the mindset.

It's the same thing innovation runs into everywhere, right?

It's just changing that culture on that mindset.

But John, that point about the fleet manager having

to think about the repair and the difficulty

in finding people who are able to do that,

doesn't that argue that consumer EV purchases

are going to run into that at some point in time

where there's a realization of like,

I need my car fixed, but I call the dealer

and he's only got one guy who works on EVs

and he's got 12 cars ahead of mind.

Versus if I have an ice vehicle,

you can go to a mechanic down the street and he can fix it.

Yeah, let's see what happens because,

up to now everybody's been buying EVs brand new.

And so they're under warranty, in the consumer's mind,

it's going to be taken care of if there's a problem.

But now we're seeing significant numbers

of EVs coming off lease.

And in fact, we reported in Auto Line Daily this week,

there was a study from the University of Michigan

that showed three year old EVs have the lowest cost

of ownership.

And in fact, car for car compared to an ice vehicle,

you can save over the life of the vehicle up to $13,000

because of that.

But the key is because it's used

and they've taken the main depreciation hit.

And that's true of any kind of vehicle.

Whoever buys it secondhand,

it was the first owner that took the depreciation hit.

But now we're going to see all kinds of EVs

coming into the used car lots at dealers

because people are going to trade them in

or it's going to come off lease.

The dealer is either going to send it to auction

or they're going to try to sell it on their lot.

And we're going to see a lot more used EVs being bought.

And then we're going to run into the issue

that you're talking about here, Gary.

Who's going to service them?

Who's going to repair them?

Can we talk?

All right.

So I got one more, another trade agreement.

This is between the EU and India.

And India will cut tariffs on imported European cars

from 110% down to 40% initially

and eventually to 10% once this is fully implemented.

It's supposed to be implemented by the end of the year.

End of the year, end of the decade.

I thought it was the end of the decade

when it dropped to 10%.

Well, my reading of it is that it will be like,

well, the ink will be dried.

The 40% this year, right?

And, but you're right, I hate it.

It will allow 250,000 EU made vehicles

to enter at the 10% tariff,

which is six times larger than any other previous

Indian trade deal, which was 37,000

with vehicles from the UK.

Look, it's significant.

I mean, you know, India's got a population

greater than China's.

It's not a big market.

I mean, compared to China,

I think India sells four million,

four and a half million vehicles a year.

It's actually the third largest market by country in the world.

That really surprised,

it's China, the United States and then India.

And now I'm talking by country.

Obviously Europe is much bigger than,

but by country, no, India is.

And it's the last great growth market

potentially left in the world.

India and Africa are the last places on earth

where there's huge populations.

You know, India's a billion four in population,

Africa's a billion, where car ownership is very, very low.

You know, you look at around the rest of the world,

it's saturated.

There's no growth, not even China.

So yeah, Renault jumped right on that deal

and said, we're going into India in a big way.

So I wonder, like, okay, the European car makers

are obviously affected by the tariffs

that have been established in the United States.

Will sales in India offset that?

Offset what?

Well, okay, I'm BMW,

suddenly it's more expensive for me to sell a vehicle

in the United States than it had been.

Now that there's this deal with India,

I'll sell to India and I will make up

from what I'm losing in the United States.

Yeah, I mean, but you gotta be realistic.

I mean, it's not like the Indian market

is all of a sudden gonna explode in volume,

but it will grow.

And so you may not, as a BMW per your example,

be able to offset tariff losses

in the United States this year by the end of the decade.

Yeah, maybe the Indian market is pretty significant for you.

So maybe it's Volkswagen brand, not BMW.

Yeah, maybe it's just make it simpler.

But you know, one of the interesting things

is that they're gonna have, you know,

the EU is, you know, the supply base

that they're buying from other countries.

Now India becomes a much more appealing place

for them to do their business for things like

wearing harnesses, forging, castings, et cetera,

that there's like zero tariff that they're gonna be having.

So it will, the ZFs and other suppliers of the world,

I think are gonna be rushing there faster than the OEMs are.

Well, right.

I mean, you know, maybe there's more geopolitical stability

sourcing out of India than there is in China.

But all those suppliers have got huge investments in China

that I'm sure they don't wanna walk away from.

But now the question is, yeah,

how much do you put into the Indian basket?

How much investment do you put in there?

But clearly having maybe not a free trade agreement,

but a trade agreement between Europe and India

where tariffs drop dramatically,

you will see trade grow just as dramatically.

That's why trade wars are complicated, right?

That's why you don't wanna start one.

Exactly.

So a couple of things I picked up on this week

that I thought was interesting.

GM especially talked about all the subscription services

that it's selling and taking in billions in revenue.

They call it deferred revenue

because you can't count it until it's actually paid.

But they got billions on the books.

Ford came out this week talking all about

how many more miles people are using BlueCruise for driving

and how it's expanded the availability across its lineup

and how more people are signing up for it.

Suddenly it's in the F-150

and their hours of use have just exploded.

Yeah.

So I thought that was something that we who watch the industry

need to keep tabs on.

We've been talking about the revenue and profits

that could come from these revenue services

or excuse me, subscription services.

Now it looks like it's starting to happen.

And I think Ford has talked about on its software services

that it does as part of Ford Pro fleet management.

Profit margins of like 70%.

I mean, way beyond anything that they can get

in the rest of the industry.

That fleet guy you were talking about before,

that's who's paying that down.

That's right.

That's exactly right.

But I don't know that Dave is going to be paying that.

No, but I mean, to your point, I think,

the more the software comes in

and there's AI driven kinds of software

that they're putting into,

that's coming into cabins and infotainment systems and stuff.

People are going to want some of these features, I think.

And I think they will be willing to pay

small subscription amounts for select things

that they can now do in their car.

So I think it is coming.

Yeah, but it's got to be really compelling.

I mean, I don't want to pay a monthly fee

to turn it on my seat here,

but I will pay to drive hands free.

Right, exactly.

And there's more of that type of stuff coming

that's being envisioned that I can see,

particularly younger people who've been used to

how they function with their phones and stuff

and you start to do it in your car

and you start to have this capability,

I think you may start to pay for some of this stuff.

But the thing I wonder about,

you mentioned the younger people

that have grown up with their phones.

I mean, their phones are central to their existence, right?

I mean, it's just not something that they happen to have.

This is something that they communicate with their friends

and just find out about the world and so on.

So to what extent are they going to say,

oh yeah, I want this replicated in a car

and I will spend more money for it?

Yeah, I think the trick and most people are talking this way

is not to replicate it.

It's to find something that's unique

about being in an automotive environment.

And I don't know what that is,

but some of the things that you're seeing,

that you saw around CES,

just in terms of infotainment and agentic AI type stuff

that they're doing, I think is getting us closer

to where you could parcel out some features

that you might not be interested in one,

but maybe you're interested in it.

And so they're starting to be the smorgasbord,

I think, of things that are possible.

Yeah, my advice to the industry is,

if you can do it on your phone,

don't even try to do it in the car.

Right, which is why the hands-free,

eye-free driving makes so much sense

because you can't do that with a phone, right?

I mean, in terms of buying anything,

whether it's gasoline or something from Chick-fil-A,

I mean, you can do it on your phone right now,

somehow.

Well, I saw one demo, for instance,

it was you're on a route in your navigation system

and you decide you want Mexican food in an hour

by, at a place that has a charging station

where I can recharge my car.

You start to get kind of these multiple inputs.

You know, if your navigation service can do things like that,

that might be something that you would say,

you know, I'd like that. Hey, Google.

Yeah.

Yeah, but I mean, this is more seamless and more,

you know, it can adjust your route,

it can, you know, tell you what's the impact

it's going to be on your battery

and all that type of stuff.

So I think it's getting far more sophisticated

on what they can do.

Yeah, as long as it's something,

if it's a situation where having it integrated

with the car is better,

then the automakers have a chance

at charging the subscription service.

Otherwise, forget about it.

Yeah, it has to be around the functioning of the automobile,

I think, or that you're in this automobile.

Right.

You just turned someone's phone off by saying, hey, Google.

They rushed me out.

Sean's saying that when Gary said, hey, Google.

Somebody in the audience had their phone turned on.

That's pretty good.

So it's how effective these things are.

We're getting to the end here,

but one thing that I thought I'd point out,

we also reported this in AutoLine Daily,

Gran Turismo, which is one of the most popular games

in the world, is now incorporating two Chinese cars

in that you can drive, the Xiaomi Su7 Ultra,

the Yang Wang, U9 Extreme.

And the reason I mention this is,

any automaker that can catch the next demographic wave

and ride it, can ride it for an entire generation,

but you got to crack the code on making that generation

really want your product.

And so with Chinese cars going into Gran Turismo,

now Gen Z and Gen A,

Gen A being those who are up to 15 or 16 years old,

are going to grow up as Chinese cars are just,

and Chinese brands are just part of the normal everyday

experience, at least in gaming,

at least with Gran Turismo.

And I think that is a cultural,

I don't know what I want to call it, a turning point.

But doesn't most of the world

live with Chinese cars right now?

Yeah, they are available in so many countries,

but so many people have never seen them yet.

I mean, are there Chinese cars in Brazil?

Yeah, are there a lot of Brazilians

who have never, ever seen a Chinese car?

Yeah, but they're in England, they're in France,

they're in Germany, they're in Europe, right?

I think they're in China.

I think the Chinese sort of have an inferiority complex

in terms of their cars aren't necessarily considered

on the same plane.

I think that was true until a few years ago.

Well, I mean, I think it's not,

I think they're competitive, I'm not saying they're not competitive,

but I think in their mind, being in a platform like that

where they're on a par with these other supercars,

really is a feather in their cap.

Good way to put it.

All right, we gotta end with something positive,

so I'll give you guys a quiz, okay?

Okay, yeah.

January 29th,

1886, a patent was applied for

that basically revolutionized

everything we've been talking about today.

1886?

1886.

So I would say that was probably,

you're gonna get it, Gottlieb Daimler's patent

for the automobile.

You were close, you were so close.

Okay, then it was odd, odd.

Carl Benz?

Carl Benz, that was Carl Benz, yeah.

Carl Benz, not Daimler.

Yes, so the Benz patent motor wagon,

the world's first practical automobile,

he applied for a German patent,

and it was, we're celebrating the anniversary today of that.

And I thought it was interesting,

that it was a three-wheeler, okay?

And the engine was, of course, in the back,

because you have the wheel in the front,

so you've got nothing to put it against,

and I just wonder, maybe that was the right design.

Maybe he is.

Your engine, three-wheel?

Yeah, maybe the three-wheel.

Nah, that's a three-wheel thing,

I can tell you, those things understeer like crazy.

Still waiting for that App Terror drive, John.

Yeah, that's right.

I had an interview with the co-CEO

just a couple of days ago,

that video's about to get posted.

Very interesting, we can talk about that next time, too.

But let's wrap it up.

Dave Zoya, thanks so much for coming on the show.

Good having you here, Gary, good having you.

I want to, before we sign off,

I also want to give a great shout out

to our Patreon and YouTube members,

because you guys really help us

keep shows like this going along.

But with that, we'll see you next week.

Enjoy your journey.

AAH #776 – The Death of the Dashboard? The Radical Future of Car Interiors

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