Audi’s E-Tron is struggling, the Cybertruck is trucking, the National Transportation Safety Board is trying to figure out autonomous vehicles, and more in The Morning Shift for Monday, Nov. 25, 2019.
1st Gear: Roger Penske Thinks The E-Tron Is Being Held Back By ‘Sticker Shock’
The Audi E-Tron is the German marque’s first real entry into the market for electric cars. It’s how Audi dips its toes into the market, along with Jaguar (I-Pace), Ford (Mustang Mach-E), Mercedes (upcoming EQ line) and other automakers that have been in the market for a while, like Tesla, Chevrolet, Hyundai and more.
As such, the E-Tron is something of a test case for Audi—a test that dealer magnate Roger Penske says isn’t going well so far. Sticker shock is to blame in part, Penske says—the E-Tron starts at $74,800.
Per Automotive News:
Electric vehicles “have not had the lift that [the industry] expected,” Roger Penske, CEO of Penske Automotive Group, told analysts last month on an earnings call, specifically calling out the Audi e-tron’s slow retail start.
Penske said there had been “significant cancellations” of e-tron preorders, and the main issue was affordability.
“I think there is some sticker shock. The customers that thought these would be more affordable, like a Q5. But when you’re looking at an $80,000 vehicle in a $1,500 payment, it gets — it’s really aggressive from the OEM standpoint,” Penske said.
I’m not quite sure Penske is correct in saying that the industry expected a “lift” from cars like the E-Tron, but he’s right in pointing out that sales so far have been tepid. Automotive News says that just over 4,000 E-Tron’s have been sold so far, but, again, I’d be surprised if Audi expected huge numbers from it.
Naturally, Audi says it’s happy with the state of things:
Speaking to Automotive News at the show, new Audi of America President Daniel Weissland said the brand is “still at the beginning of a transformational phase into electrification” and asked for patience.
“I think we’re pretty happy with our [e-tron] sales numbers,” Weissland said. “November is the strongest month ever now on e-tron sales, so we really see a tick up. The question is always, ‘What do you compare it with?’ You can’t compare the e-tron with a car which is $20,000 or $30,000 less expensive.”
Luxury electric vehicles like the E-Tron are better understood as placeholders, as companies like Audi, Jaguar, and Mercedes seek to keep up with changing technologies while also continuing to churn out their bread-and-butter, which will remain internal-combustion engined cars for the foreseeable future.
And a part of me thinks those companies would be happy to do that forever if it weren’t for pesky government regulations.
In any case, you should drive a battery-electric car if you get a chance. If you’ve never done it, I promise the torque will surprise you, even on a Leaf.
2nd Gear: Tesla CEO Elon Musk Claims 200,000 Preorders For The Cybertruck
Remember the Cybertruck? Of course you do.
In an earlier tweet, Musk said the company had received 146,000 orders for Cybertruck, and tweeted again on Sunday saying “200K” - an apparent reference to the number of orders.
The company’s website shows that an immediate payment of $100 is required to reserve an order for the Cybertruck, which has a starting price of $39,900.
Musk also tweeted this video, also seen during the reveal presentation, which I guess is meant as some kind of weird own.
The heaviest F-150 weighs 5,697 pounds, so this exercise proves that the Cybertruck can tow at least that much uphill? I guess? That is not an impressive figure for a truck, a segment where the most capable can easily tow double that.
3rd Gear: The NTSB Is Skeptical Of NHTSA’s Autonomous Vehicle Oversight
Last week, the NTSB had a hearing on the deadly autonomous Uber crash in Arizona, in which Uber got off easy. Uber was faulted for having an “inadequate safety culture,” something, Automotive News reports, wasn’t the only problem. The NTSB also falts NHTSA.
Per Automotive News:
Most of the NTSB’s findings cited Uber’s lack of a safety culture as a contributor to the circumstances surrounding the March 18, 2018, crash, in which one of the company’s self-driving test vehicles struck and killed pedestrian Elaine Herzberg in Tempe, Ariz. But the NTSB’s findings also noted that NHTSA has implemented an “inadequate safety self- assessment process.”
Through three iterations of its federal automated-vehicle policy, crafted across Democratic and Republican administrations over four years, NHTSA has issued voluntary guidance, not regulations.
It has suggested to manufacturers that they submit voluntary safety self-assessments, but as NHTSA has emphasized, automakers are under no obligation to do so. So far, 16 manufacturers have provided self-assessments. The quality and depth has varied.
“Some have a good amount of detail while others, frankly, read like marketing brochures,” said Ensar Becic, an NTSB human performance investigator.
An NTSB board member also got in this zing:
“They’ve put technology advancement here before saving lives,” she said, reading the federal automated vehicle policy. “It’s called ‘Automated Driving Systems: A Vision For Safety.’ They should rename it ‘A Vision For Lax Safety.’ This is actually laughable.”
NHTSA is part of the Department of Transportation, itself controlled by whoever is living at 1600 Pennsylvania Avenue, which is a long way of saying that I don’t expect things to change there until there’s a change at the White House. But good on the NTSB for calling it out.
4th Gear: Carlos Tavares Has A Task On His Hands
Tavares is the CEO of Groupe PSA, which you know better as the automaker of brands like Peugeot, Citroën, and Opel. Groupe PSA is in the midst of merging with Fiat Chrysler. Tavares would likely emerge as the CEO of the combined company when its completed, according to Automotive News, and therefore the leader of the world’s fourth-largest car company.
Automotive News profiled him after naming him Industry Leader of the Year. This is one (sort of) interesting bit, chronicling his stewardship of PSA:
Perhaps sensing disloyalty, Ghosn facilitated that desire by pushing out Tavares, who landed at crosstown rival PSA Group just a few months later. But it was a job few probably coveted: The maker of Peugeot and Citroen was losing an estimated $250 million per month, and the Peugeot family had just agreed to relinquish control after nearly 200 years, selling 14 percent stakes in the company each to the French government and to Chinese automaker Dongfeng.
Tavares quickly announced a recovery plan called “Back in the Race,” a nod to his motorsports hobby, that laid out his foundational vision for success in the auto industry: Improve pricing by raising quality and eliminating unprofitable sales channels; enact a global “core model strategy” that focuses on only the most profitable segments and shared platforms; and enhance competitiveness by lowering wage costs, raising factory utilization rates and trimming manufacturing costs per vehicle.
He promised positive cash flow by 2016, a 2 percent operating margin by 2018 and €2 billion of free cash flow from 2016 to 2018 — because “cash is king,” as he’s often said.
Those targets were reached well ahead of schedule as PSA recorded a $1.32 billion profit in 2015, a 5 percent margin.
A word of caution here that profiles of CEOs are generally useless, and CEOs also frequently have very little to do with the success (or not) of whatever company they oversee. They are also paid too much, and they all seem to spout nonsense like this:
His recipe? A relentless focus on profits and efficiency as well as creating a work environment that lets employees unleash their full potential. And a willingness to be humble: “The CEO is only a tool to make things happen,” the 61-year-old Tavares, Automotive News’ 2019 Industry Leader of the Year, said in an interview this month at PSA headquarters outside Paris, soon after the FCA proposal was announced. “And the toolbox is very, very big.”
It’s always a good idea to describe yourself as a “tool.”
5th Gear: Another UAW Official Resigns
Vance Pearson was director of UAW Region 5, but last week the union moved to expel him and UAW President Gary Jones. Jones resigned almost immediately, while Pearson resigned over the weekend. Both Pearson and Jones have been linked to an ongoing corruption scandal within the union.
Here’s the Detroit Free Press:
“The UAW announced today that after the filing of Article 30 charges against him by the UAW’s International Executive Board, Vance Pearson has informed the UAW that he was resigning as director of UAW Region 5, effective immediately, and retiring. He is also resigning his UAW membership, effective immediately. Mr. Pearson had been on leave from his position.”
Pearson’s attorney, Scott Rosenblum of St. Louis, said that rather than pursuing an Article 30 hearing, Pearson would be focusing on his defense in the criminal case, which Rosenblum declined to discuss.
Pearson, 58, of St. Charles, Missouri, also faces six federal criminal charges that accuse him of embezzlement of union money, mail and wire fraud, money laundering and conspiracy.
America’s autoworkers deserve better than the UAW.
Reverse: Bridge Dies
Here is some video:
Neutral: What Would It Take You To Buy A Fully-Electric Car? (If You Haven’t Already)
I have basically zero reservations, even if the charging network here in the States isn’t great, because range anxiety largely isn’t a thing for me since 99 percent of my trips are short. But I also make a journalist’s salary, making the question somewhat moot for now unless I go for something like a Chevrolet Bolt. Et tu?