Two big companies might be getting serious about electric truck and SUV startup Rivian, luxury automakers fall behind “mainstream” ones in reliability, Tesla scrambles to send Model 3s to China and more for The Morning Shift of Wednesday, February 13, 2019.
1st Gear: Rivian Gets A Big Boost
Real talk: the next big thing in electric vehicle development is the pickup truck. We’ve had EV sedans, EV sports cars and a huge onslaught of EV crossovers are on their way, but the first automaker to figure out how to translate electric torque to towing, hauling and off-roading will be on to something huge.
American startup automaker Rivian made waves last year with two concepts, the R1T truck and R1S SUV. Both aim to be the first EV truck and proper rugged SUV on the market, and founder R.J. Scaringe wants to back it up with Michigan know-how and production at a former Mitsubishi plant in Illinois.
Rivian might be getting a big push soon, Reuters reported last night, with potential investments coming soon from Amazon and General Motors. From the story:
The deal would give Amazon and GM minority stakes in Rivian, the sources said. It would be a major boost for the Plymouth, Mich., startup, which aspires to be the first automaker with an electric pickup.
If the negotiations conclude successfully, a deal could be announced as early as this month, the sources said, asking not to be identified because the matter is confidential. There is always a chance that deal talks fall through, the sources cautioned.
“We admire Rivian’s contribution to a future of zero emissions and an all-electric future,” GM said in an emailed statement, declining to specifically comment on any talks with Rivian.
Rivian declined comment. Amazon did not respond to requests for comment.
While the report is unconfirmed by all parties for now, GM investing in a startup is not at all surprising—recall its acquisition of autonomous tech company Cruise Automation, for example. As for now, as that Reuters story notes, GM is counting on making as much money as possible from truck and SUV sales right now to pay for the expensive investment in the electric revolution that’s coming soon.
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If it invested in, or even later acquired, Rivian to make electric trucks, it’d be way ahead of the game. As for Amazon’s involvement, here’s The Drive’s Ed Niedermeyer to explain it so I don’t have to:
Tesla’s also supposedly working on an electric pickup truck and so is Ford. Who comes to market first?
2nd Gear: Long-Term Dependability
We all know J.D. Power studies have their issues, but they get attention. The latest long-term dependability study is predictable in some ways: Lexus stayed on top with fewest problems per vehicle, Automotive News reports. Porsche and Toyota tied for second place. But GM had a good showing this time with Chevrolet and Buick coming in third and fourth overall, way ahead of BMW, Audi, Mercedes and other luxury brands:
Power said 2016 model year vehicles from mass market brands averaged 135 problems per 100 models surveyed, compared with 141 problems per 100 luxury vehicles studied.
Lexus ranked on top for the eighth straight year even as it was tagged with more problems — 106 per 100 vehicles — than a year earlier (99 per 100).
Porsche and Toyota ranked second in a tie (108 per 100), followed by Chevrolet and Buick. At the bottom of the U.S. Vehicle Dependability Study, with an average of more than two problems reported per vehicle: Fiat, Land Rover and Volvo.
Good for Chevrolet, unless this means more Real People ads, in which case, please strap me to a rocket and fire me straight into the sun.
3rd Gear: Brexit Keeps Getting Better
Ford’s probably next to bail from Great Britain over Brexit, citing trade uncertainties that make it impossible to plan for the future. Ford will join Nissan, which announced last week it will cease plans to build the X-Trail SUV there. Via Reuters:
Ford Motor Co told British Prime Minister Theresa May that it is stepping up preparations to move production out of Britain, The Times reported on Tuesday.
The automaker told the prime minister during a private call with business leaders that it is preparing alternative sites abroad, The Times said.
Ford was not immediately available for comment.
Ford, which operates two engine plants in Britain, last month said that it faces a bill of up to $1 billion if Britain leaves the Europe Union without a deal.
Automakers and other manufacturers have warned about the toll a no-deal Brexit could impose, including higher tariffs, disruption to supply chains and threats to jobs. Britain is scheduled to leave the European Union on March 29.
Ford employs about 13,000 people in Britain at present.
4th Gear: Tesla Scrambles To Ship Cars To China
Speaking of awesome decisions, let’s talk about America’s trade war with China for a bit. Tesla is preparing to double down on China, the world’s biggest EV market, this year, but it does not yet have its factory up and running there yet. So with America’s trade war truce with China ending March 1, it has to get as many new Model 3s as it can over there in the meantime to duck possibly devastating tariffs.
Tesla Inc. is loading as many Model 3 sedans as it can onto vessels destined for the People’s Republic ahead of March 1, when a trade-war truce between presidents Donald Trump and Xi Jinping is scheduled to expire. Musk fears the two countries could ratchet tariffs back up, which would make the chief executive officer’s electric cars more expensive in China and boost costs of key components the country sends to his U.S. assembly plant.
Other carmakers are at risk of seeing expenses rise again if the Trump-versus-Xi dispute flares back up. But Musk is in perhaps the most precarious position in the industry. Global giants such as BMW AG and Daimler AG can wiggle around the tariffs to an extent by boosting production at existing China factories, but Tesla’s manufacturing presence there was merely a muddy field as of last month. It won’t be assembling any vehicles in China until the end of 2019 at the earliest.
“They’re uniquely exposed,” said Robin Zhu, an analyst at Sanford C. Bernstein.
See, the Model 3 is quite expensive in China, and extra tariffs would not help that situation:
The Model 3 is the linchpin of Tesla’s effort to appeal to a wider global audience, with Musk promising for years that a version eventually will be available for $35,000 before incentives. That’s generally in line with the average selling price of a vehicle in the U.S.
But following through on that vow has bedeviled Musk. The cheapest version available now—almost three years since he first showed a concept of the car—is $42,900. In Europe, where deliveries are just getting underway, prices vary by country, with customers in Belgium paying a base price of 58,800 euros ($66,600), compared with 55,400 euros in Germany and 53,500 euros in France.
In China, the Model 3 starts at 433,000 yuan ($63,900). Some of the best-selling electric cars in the market—the world’s biggest for battery-powered vehicles—can be had for less than a sixth of that price. Beijing Electric Vehicle Co.’s EC Series and Chery Automobile Co.’s eQ are listed at 65,800 yuan after subsidies.
The March 1 deadline on tariffs will be very interesting to watch.
5th Gear: GM Offers Reward To Expose Racists
GM’s Toledo, Ohio powertrain plant is a hotbed of racism—nooses hung in public spaces, hateful graffiti, death threats against black supervisors and more. It’s incredibly shitty! Now the automaker is offering a big reward to expose some of the garbage humans behind all this. Via The Detroit Free Press:
General Motors says it is offering a $25,000 reward to anyone who has information about racist graffiti and nooses found at a plant in Toledo, Ohio, nearly two years ago.
The reward, which GM said it put up in January, follows a story the Free Press first reported in November that nine black workers are suing GM, alleging the carmaker has allowed racial discrimination and failed to take prompt corrective action after the workers reported acts of racism at the GM Powertrain & Fabrications plant in Toledo.
The lawsuit was filed in September and the racial incidents started in spring of 2017.
“We have zero tolerance for discrimination, and we’re doing everything we can to identify the culprit. This is another step we’ve taken, working with police to intensify the investigation,” GM said in a statement to the Free Press. “We’re outraged that anyone would face threats, and our hearts go out to anyone affected by this bigotry.”
GM said its reward is offered through a CrimeStoppers program administered by Toledo police and the FBI.
A lawsuit by workers remains ongoing as well.
Reverse: Speaking Of Assholes...
That story is filed under “INVENTIONS AND SCIENCE”, which is a hilarious tagging error (?).
Neutral: Who Comes To Market With An Electric Truck First?
And will people buy it?