BMW has some announcements to make, Honda and Toyota have supply chain issues, and GM. All that and more in The Morning Shift for March 17, 2021.
Which we will have more about in a bit but for now I will cover the topline one, which is that BMW says that it expects that half of its new car sales will be fully electric by 2030. The company has been getting serious about electric for a bit now. Also, say goodbye to internal combustion engine Minis.
From Automotive News:
The automaker plans for about half of total sales to be fully electric by the end of the decade, it said on Wednesday. The company also confirmed that its Mini brand will only sell battery-powered cars by the early 2030s.
The BMW i4 sedan will be launched three months ahead of schedule this year. The company said it will disclose the i4's sales date in the next weeks. Its iX flagship electric SUV will go on sale by the end of the year.
Both models will join the electric Mini, BMW i3 city car and the iX3 SUV that are already on sale.
Full-electric versions of the BMW 5 Series and the X1 will follow, together with electric versions of the 7 Series and the successor to the Mini Countryman. The last Mini with a combustion-engine variant will be released in 2025. The automaker’s Rolls-Royce brand will get full-electric models, BMW said.
“We have a clear road map for making the transformation of our industry a real competitive advantage for BMW in the coming years,” CEO Oliver Zipse said in a statement. “We have started the new year with strong momentum and are aiming to return to pre-crisis levels as swiftly as possible,” he said.
When these plans are realized lots of other automakers will have more electric cars on offer too, and we’ll see what the market for EVs really looks like with true competitors to Tesla out there. Tesla could use the competition in any case, I’m tired of it having the luxury EV space mostly to itself.
Volkswagen has been busy copying Tesla’s playbook, which may or may not work out for it. In the meantime, some of its suppliers seem pretty nonplussed by the whole situation.
Days before Volkswagen Group held an event to announce a major ramp-up in its electric vehicle production, the German automaker abruptly told its South Korean battery suppliers their current technology would be largely excluded from those plans.
The decision by the world’s second largest automaker to move the bulk of its cars to a different battery cell in two years came as a shock to LG Energy Solution and SK Innovation, three people with knowledge of the situation told Reuters.
“It’s not our everyday business routine to get such one-sided notice from a partner ... people seemed to be pretty alarmed,” one of the sources said.
Volkswagen’s shift to a new unified prismatic battery, away from the pouch-style manufactured by LG and SK, is likely to be a massive blow given the pair have invested billions in pouch production sites in the United States, Europe and Asia.
The shift also raised concerns among battery suppliers that the race by automakers to meet growing demand for EVs in a rapidly changing technological environment could leave them behind almost overnight.
If VW is alienating its battery suppliers in its quest to dominate the electric space that seems bad, but who am I to say.
If you think that automakers are compelled by anything other than government regulations to make safer cars, I have a bridge I’m interested in selling. The latest evidence for that is a new investigation from Reuters that spotlights an allegedly defective steering sensor in more than three-quarters of a million cars made by GM.
The sensor is at the heart of a lawsuit filed by the widower of a driver who died after a crash in a Chevy Trailblazer.
A Reuters review of hundreds of pages of documents submitted in the Buchanan litigation shows that GM has since 2007 confronted a series of issues with the steering sensor, including high levels of warranty claims and a manufacturing flaw, without recalling affected vehicles. Buchanan’s case is the only one Reuters has identified in which a death is alleged to have stemmed from a failure of the steering sensor.
Many of the key documents Reuters reviewed, including depositions taken of GM employees and findings from an internal GM probe in 2018, are filed under seal or otherwise shielded from public view under a Georgia judge’s sweeping protective order. Their contents are reported here for the first time.
The 2018 GM investigation into the steering sensor was launched after evidence in the Buchanan case suggested a problem with the component in her car. That probe found more than 73,700 warranty claims related to the part, according to a GM document and the deposition of a company employee. The documents don’t detail the specific issues raised in the warranty claims. GM declined to comment on the claims.
The number of claims is equal to about 10% of the roughly 778,000 SUVs GM manufactured with the sensor between 2006 and 2009. Car companies usually expect a rate of defects or other problems among vehicle components closer to a fraction of 1%, according to industry advisers. About a half a million vehicles containing the component remain on U.S. roads, according to 2019 registration data from digital automotive marketing firm Hedges & Company.
Never forget that automakers have one purpose in this world, which is to make a profit. Everything else is just the cost of doing business.
4th Gear: Honda And Toyota Will Stop Some Production In The U.S. As It Works Out Supply Chain Snafus
Part of this is due to the global chip shortage, but a big part of it is not.
From The Wall Street Journal:
Toyota cited an unspecified shortage of petrochemicals at some North American plants. The shortage would affect production at vehicle factories in Kentucky and Mexico, as well as an engine plant in Alabama. The company said it would intermittently cut shifts or production lines of the Camry and Avalon sedans, the Tacoma pickup truck and the hybrid version of its RAV4 sport-utility vehicle to deal with the shortage. It said that for now it didn’t expect to have to furlough any workers.
Honda said it would halt production at most of its U.S. and Canadian car factories next week because of supply-chain issues including port backlogs that have delayed the delivery of parts.
Honda said a combination of the port issues, a shortage of semiconductors, pandemic-related problems and fallout from severe winter weather across the central U.S. led to the decision. The cold caused pipes to burst in some of its factories.
I have lived through various shortages in my life — there was the mask and toilet paper shortages that we all lived through at the beginning of the pandemic, for example, but I also recall the 2012 gas shortage in the New York area post-Hurricane Sandy — so I know that these things eventually correct themselves. But, still, the ongoing global chip shortage that has also affected car production is a weird one. A Chinese official says it is unprecedented.
The world is going through an unprecedented chip shortage, Zhou Zixue, a senior official with the China Semiconductor Industry Association, said on Wednesday, after semiconductor sales grew 18% last year.
“If you are an experienced player, you will remember that in 1999 there was a similar crisis in this industry, but it was way smaller,” Zhou, chairman of Semiconductor Manufacturing International Corp (SMIC), said in remarks at SEMICON China.
“We have to deepen our cooperation, we have to give more attention to innovation. Only by doing that our industry can control the challenges facing us.”
China is the world’s largest buyer of semiconductors, but domestic production is marginal. Sales in China grew 17.8% in 2020 from a year earlier to 891 billion yuan ($137 billion), according to CSIA.
The panic of a shortage is real; I remember desperately driving north in Westchester County in 2012 to try to find gas, but all the gas stations were empty or had massive lines. When I finally found one that had fuel, there were no lines or anything, in fact there was no one there at all. It was a strange empty oasis. I filled up and left as quick as I could, convinced I’d somehow just committed a crime.
Lots of people when I was a kid would claim they had some small percentage of Irish ancestry and use that as an excuse to drink green beer at seven in the morning, but my dad was always like, “Sorry, I think we are Welsh and German.”