Toyota isn’t ready to call it quits on the Prius, Nissan is getting possessive about its technology and Mitsubishi’s woes about a potential merger. All this and more in The Morning Shift for Monday, June 3, 2019.
1st Gear: Hybrid Power
Once upon a time, if you wanted to save money at the pump because gas was $4 a gallon, you bought a Toyota Prius. But now that gas is cheap and there’s a fashionable alternative in the Tesla Model 3, the Prius’s popularity has waned. But Toyota is holding on tight to the egg-shaped hybrid car. For now, anyway.
Prius sales have been on a “six-year losing streak” and lags behind the Ford Fusion hybrid, a car that Ford cancelled in the U.S. last year, reports Bloomberg. But that doesn’t hold true for all hybrid cars across the industry. Toyota and Ford have been putting hybrid technology in their other cars and it seems to be working—the hybrid RAV4 is one of Toyota’s best-selling hybrids and Ford will have a hybrid version of the Escape, Explorer and F-150, the outlet reports.
Because, yes, what’s been happening with normal car sales is also happening with hybrids: People are just more interested in the SUV and crossover versions than the sedans and economy cars.
Hybrid tech has improved over the years, it’s cheaper than the fully electric cars and still takes a shorter amount of time to fill up at a gas station, as opposed to a charging station. Also, buying and owning a hybrid has become more and more normalized. You are no longer a weird, tree-hugging nerd if you buy a hybrid.
From Bloomberg:
Analysts expect hybrids to outpace electric cars in the U.S. through at least the middle of the next decade. By 2025, hybrids will represent 15% of the U.S. market, up from 2.7% last year, according to LMC Automotive. Fully electric vehicles will grow to 4.5% from 1.2% in 2018. IHS Markit predicts hybrids will command 22% of U.S. sales by 2025, while wholly battery-powered vehicles will be 7%.
Perhaps the Prius’s greatest accomplishment — making hybrid technology mainstream — is now its greatest encumbrance. Toyota is finding customers are more interested in this propulsion system on its standard models, such as the Corolla and Camry sedans and RAV4 and Highlander SUVs. Buying a hybrid just because it’s a hybrid is no longer novel.
But Toyota isn’t giving up on the Prius. It’s still set on improving it in the hopes of wooing more buyers. The 2020 Prius Prime was recently announced to finally get a fifth seat, which would make it more practical and attractive to consumers, not to mention cab drivers.
2nd Gear: Nissan’s Nervous About Its Tech
The proposed Renault, Nissan and Fiat Chrysler merger has Nissan very nervous about the shift in power and influence in the face of the two larger automakers. But it won’t be swept into the whole thing without a fight.
An unnamed Nissan senior executive told Reuters that Nissan is “optimistic” about the partnership “as long as it can protect the ownership of technology developed over two decades of working with Renault.”
The exec said he is “cautiously optimistic” about sharing things like Nissan autonomous and EV technology, but:
... he said the possible $35 billion merger of Renault SA and FCA would not give FCA the automatic right to use those technologies, which it needs to meet stringent emissions regulations and better compete in a industry being transformed by electric vehicles.
“We would go ahead with partnering or cooperating with FCA only if we can guarantee tangible benefits from sharing technologies with FCA and only if we can work out conditions that are satisfactory to us,” the Yokohama-based executive said.
You mean to tell me that Nissan, which has successfully launched two generations the Leaf EV and managed to send its semi-autonomous ProPilot tech to even the affordable cars, is nervous about just signing over all its hard work to FCA, which currently only offers the sad Fiat 500e and doesn’t have a terribly strong portfolio of its own semi-autonomous tech? Unsurprising.
If this merger works out, it’ll be very interesting for all of the involved parties.
3rd Gear: Mitsubishi Is Worried, Too
Meanwhile, all this merger talk has Mitsubishi worried as well. Specifically, Mitsubishi dealers in the U.S. are fretting.
Mitsubishi doesn’t enjoy the same popularity here in the U.S. that is does in other foreign markets, and if Jeep and Ram join its family, then the focus could shift from growing Mitsubishi to somewhere else. Somewhere like funneling money into the brand with the big cars.
Still, dealers are staying positive, according to Automotive News. From the story:
They are, after all, Mitsubishi dealers, who have survived a decadelong arc of declining sales even as the overall market hit record highs.
“I feel like the FCA-Renault announcement does cause some dealer anxiety, because we wonder who will control the franchise’s direction,” said RC Hill, a DeLand, Fla., Mitsubishi dealer for 15 years. “Currently, our U.S. Mitsubishi leadership seems very focused on getting things done in our market. Plus, we will see our first alliance vehicle next spring, which is very exciting for Mitsubishi dealers,” he said.
Mitsubishi has my full support throughout all of this. Because if it survives and thrives through the merger, then maybe I’ll get my Lancer Evo back.
4th Gear: Toyoda’s Legacy
Akio Toyoda became the president of his family’s car business in 2009. You may have heard of it. Anyway, his son has now joined its ranks and Akio has a few words of advice, according to Automotive News.
“I told my son, ‘You don’t have to hide the family because it’s part of yourself, part of who you are,’ “ Toyoda said during an interview in which he reflected on the burden of his ancestry and his first decade leading one of the world’s most admired companies.
“If people ask, you can say it,” he said. “You can take pride in it.”
It is so hard to be rich and famous, let me tell you. Sometimes your coworkers ask you about it, but honestly it doesn’t do to lie. Just tell them the truth and they can make up their minds about you themselves.
5th Gear: Fremont Production
Is it just me, or has hubbub over the Tesla Model Y died down already? But that’s neither here nor there; this gear is about production.
The plan, as it currently stands, is to build the Model Y at the company’s only car plant in Fremont, California, according to Bloomberg. The Model S, Model X and Model 3 are all built in Fremont, but the drive units and battery packs are produced at the gigafactory in Reno, Nevada.
“Right now our default plan actually is to produce the Y at Fremont,” Musk said [during a podcast]. “I was skeptical about whether this made sense at first but my team convinced me the fastest way to get to volume production is to do the Y at Fremont.”
Let’s hope that the Model Y won’t suffer from the same “production hell” that the Model 3 suffered from. I don’t think anyone wants a repeat of that.
Reverse: Du Pont and GM
Neutral: Do You Own a Hybrid Car?
Or are you thinking of buying one? Why or why not?