Get ready for a full-size Porsche crossover, Elon Musk is beefing with another rich guy, and GM. All that and more in The Morning Shift for November 23, 2021.
1st Gear: A Three-Row Porsche?
Automotive News reports this morning that a big new Porsche crossover/SUV thing is on its way, longer and wider than the Cayenne.
The company — famed for its sports cars and, more recently, sporty crossovers — is developing a vehicle that is larger, longer and wider than the Cayenne midsize crossover, the brand’s biggest nameplate now, according to U.S. dealers who were shown a rendering of the vehicle at a meeting here last week.
“It’s a new style of vehicle that is part sedan, part crossover,” said one dealer, describing it as having a “rakish” design.
A spokesman for Porsche Cars North America said the company won’t comment or speculate on specific future models, but he said the automaker has become “very open in sharing ideas under an initiative — Porsche Unseen — the majority of which don’t make it beyond the ideas stage” but serve as an inspiration.
“We’re grateful for such creativity within our business, as we’re continually exploring new opportunities and where we might compete in the future,” the spokesman said. “Whether these go any further than renderings and ideas to make it to the production stage — let alone how they will be powered or configured — is undecided.”
The new vehicle is slated to arrive in the second half of the decade and could offer three rows — a first for a Porsche.
“It’s very un-Porsche-like,” another dealer familiar with the vehicle said. “It has a flat rear design; it’s not anything like the Macan and Cayenne.”
While Porsche did not disclose details of the vehicle’s powertrain, dealers expect it to be a plug-in hybrid at launch. A battery-powered vehicle could follow.
I appreciate that Automotive News quotes a Porsche spokesman saying the project is completely up in the air before ignoring that and saying that the car is definitely happening. Automotive News also says that the bigger SUV/crossover is aimed at younger buyers, since, apparently, the Cayenne is too small for people with children. I don’t really buy that, though, because it isn’t, and I suspect that, instead, younger people simply can’t afford new Porsches.
Anyway, there is also this bit of news about the Boxster and Cayman:
The midengine Cayman coupe and Boxster convertible will go all-electric around 2025, dealers were told.
The front-end design of the Boxster EV is similar to that of the Taycan electric fastback, while the rear borrows the full-width taillight design from the Taycan, according to dealers who were shown the convertible.
“The car looks stunning,” a dealer said. “It looks really sporty-looking.”
One of the last gas-powered Boxsters is going to be a hell of a good deal on the used market in 10 years, I humbly predict.
2nd Gear: Elon Musk And The CEO Of Chase Can’t Get Along
JPMorgan Chase, the bank, sued Tesla last week in federal court, saying that Tesla owes it $162 million because of a contract from 2014. The details are a bit tedious, but the suit itself is unusual. Banks don’t normally sue their big-ticket clients, because that’s bad for business and all that. The Wall Street Journal said Monday that the lawsuit is just the tip of the iceberg.
[Tesla CEO Elon Musk] has spurned [JPMorgan Chase CEO Jamie Dimon’s] JPMorgan Chase & Co. for years, turning to other banks while expanding Tesla Inc. and his broader empire. Conversations over the years between the two companies have often upset one side or the other, according to people familiar with the matter.
Messrs. Musk and Dimon have tried to patch things up but clashed instead, the people said. JPMorgan decided some time ago that it is better off without Tesla, according to people familiar with the matter.
I was hoping that this story would contain a bit more spice, but, alas, this is as good as we get. A Yelp joke:
“We have provided Tesla multiple opportunities to fulfill its contractual obligations, so it is unfortunate that they have forced this issue into litigation,” JPMorgan said last week.
“If JPM doesn’t withdraw their lawsuit, I will give them a one star review on Yelp,” Mr. Musk said in response to The Wall Street Journal. “This is my final warning!”
[...]
JPMorgan’s Chase consumer bank is a big auto lender, but it was hesitant to be an early backer of Teslas and other electric vehicles, people familiar with the matter said. Bankers raised concerns about the long-term value of electric-vehicle batteries.
Later, Chase executives approached Mr. Musk about an agreement to make Chase the primary lender to Tesla buyers at dealerships, the people said. The bank has similar deals with Maserati and Jaguar Land Rover. Mr. Musk said no, the people said.
The bank recently signed a similar pact with a Tesla rival, the electric-truck maker Rivian Automotive Inc. RIVN -8.16% It has also been financing more Teslas recently for its customers, the people said.
There is something quaint and sad about this, if Elon’s dumb joke about a Yelp review is all he can muster. I want billionaire fights to be more of a debasement.
3rd Gear: EVs And The Government In America
The Wall Street Journal has a big-picture look this week of how government subsidies and policies have helped (or hurt) the development of electric vehicles in America. A lot of it you probably know already, though I don’t think I realized that in the latest proposal in Congress, Lucid’s Air would not qualify for the federal tax credit.
More expensive vehicles wouldn’t qualify for the tax credit under the current proposal. Sedans and smaller cars would only be eligible for the write-off if they cost less than $55,000. For sport-utility vehicles and trucks, the sticker price would have to be under $80,000 to qualify.
The proposed tax credit includes an income cap. Individuals have to make under $250,000 annually to be eligible for the credit. For households, the cap is $375,000 for a single-income family and $500,000 for a dual-income family.
Do electric-car startups Rivian and Lucid also benefit from the incentives?
Yes, for now. Their models are eligible for the existing $7,500 tax credit. It will start to phase out once each company exceeds 200,000 in vehicle sales, as it did for GM and Tesla. Both companies only started selling vehicles in late 2021, so it could be a while before they hit that cap.
Under the new tax-credit proposal, the Lucid Air, a sedan that recently went on sale, likely wouldn’t qualify because it has a starting price tag of $77,400. That is far above the $55,000 cap for vehicles of that size. Rivian sells one electric pickup-truck model now and has an electric SUV coming soon. Both models carry a starting price below the proposed $80,000 cap in the pending bill, but the final price can vary based on what features are included. Because neither company has a union workforce, their models won’t be eligible for the full $12,500 proposed under the pending legislation.
There are several schools of thought around means-testing like this. One of them is that it is garbage because the goal should be to get as many EVs on the streets as possible, and this is limiting. Another is that the public shouldn’t subsidize the purchase of a Porsche Taycan. I am a little sympathetic to both.
4th Gear: GM Is In On Electric Boats
The automaker has put $150 million into a startup that is making electric motors for boats, in what GM says is an effort to make emissions-free boats (and also, implicitly, a lot of money for GM if all goes well.)
From the Detroit Free Press:
GM said Monday it has acquired a 25% ownership stake by investing $150 million into Pure Watercraft, which now values Pure Watercraft at $600 million, said GM spokesman Mark Lubin. That deal is made up of “in kind commitments and capital.” GM is not disclosing how that is split up at this time, he said.
GM and Pure Watercraft, a startup based in Seattle that makes all-electric motors for boats of all different kinds, share a stated goal to expand zero-emissions mobility and promote EV adoption beyond cars.
The two companies will develop and commercialize battery-electric watercraft, using GM’s technology in a variety of boating uses to accelerate the industry’s transition to all-electric.
“Building upon GM’s existing efforts to strategically deploy our technology across rail, truck and aerospace industries, the combined expertise of these two enterprises should result in future zero-emissions marine product offerings, providing consumers with more choice than before,” Dan Nicholson, GM vice president of Global Electrification, Controls, Software and Electronics, said in a statement.
[...]
GM said the collaboration will leverage Pure Watercraft’s innovative marine motor technology with GM’s engineering, supply chain and manufacturing capabilities.
[GM spokesman Mark Lubin] said the specific product offerings that occur from the collaboration will be disclosed at a later date.
Personal watercraft seem like a pretty good use-case for battery-electric motors, in that personal boats aren’t usually used to go long distances, and much of boating is simply being on the water, hanging out on your boat, engine off.
5th Gear: Thanksgiving Travel Is More Or Less Back To Normal
But it’s still to be seen if the airlines can handle it. The New York Times has taken stock of the situation, in an article that also could have been written before the pandemic, as every year save last year there are stories written before Thanksgiving about how holiday travel causes companies and travelers much anxiety.
Even in normal times, the days around Thanksgiving are a delicate period for the airlines. But this week is the industry’s biggest test since the pandemic began, as millions more Americans — emboldened by vaccinations and reluctant to spend another holiday alone — are expected to take to the skies than during last year’s holidays.
A lot is riding on the carriers’ ability to pull it off smoothly.
“For many people, this will be the first time they’ve gotten together with family, maybe in a year, year and a half, maybe longer, so it’s very significant,” said Kathleen Bangs, a former commercial pilot who is a spokeswoman for FlightAware, an aviation data provider. “If it goes poorly, that’s when people might rethink travel plans for Christmas. And that’s what the airlines don’t want.”
The Transportation Security Administration said it expected to screen about 20 million passengers at airports in the 10 days that began Friday, a figure approaching prepandemic levels. Two million passed through checkpoints on Saturday alone, about twice as many as on the Saturday before last Thanksgiving.
Delta Air Lines and United Airlines both said they expected to fly only about 12 percent fewer passengers than they did in 2019. And United said it expected the Sunday after Thanksgiving to be its busiest day since the pandemic began 20 months ago.
The NYT also quotes a meteorologist who says that weather shouldn’t be much of a factor this year, and also a flight attendant who says that passengers are more hostile than usual and mad about not getting booze. If you’re flying this year, try to be nice, as we’re all a little fried.
Reverse: RIP Tony Renna
Renna was born on this day in 1976. He died in 2003 during a test at Indianapolis Motor Speedway. A contemporaneous report in The New York Times:
Renna, who was to be married next month, was the 41st driver and the 67th person killed at Indianapolis Motor Speedway since it opened in 1909. It was the first fatality there since 1996, when Scott Brayton was killed during a practice before the Indianapolis 500.
‘’Tony Renna was a rising star in IndyCar Series racing,’’ Tony George, the president and chief executive of Indianapolis Motor Speedway, said in a statement. ‘’All of us involved in racing feel a great loss.’’
Renna was participating in his first day of testing for Target Chip Ganassi Racing after signing with the team on Oct. 1. He would have joined this season’s I.R.L. champion Scott Dixon on the Ganassi team as a full-time driver in the series for 2004. Renna had competed in seven I.R.L. races in his career; he finished seventh in this year’s Indianapolis 500 while driving for Kelley Racing.
According to The Associated Press, Ganassi said Renna was on his fourth lap and had reached speeds of nearly 220 miles an hour when the crash occurred.
Neutral: How Are You?
This is the time of year when I’m usually pumping myself up to make various Thanksgiving things, but not this year, since, for convoluted reasons, the gas is currently shut off in my building. This means a takeout situation, which is probably for the best. Everyone, including me, thinks they are better at cooking turkey than they are.