Americans still want cars, Nissan and Mitsubishi have an attractive new EV, and Elon Musk. All that and more in The Morning Shift for May 20, 2022.
1st Gear: Car Demand
The Fed has been raising interest rates to contain inflation, which is some sort of hocus pocus that economists pretend to understand. But it also has real effects on the interest rates that consumers pay for loans on homes and cars, because it all trickles down. So far though, analysts that spoke with Automotive News say that hasn’t meant much effect on the overall car market, in part because there are still not enough cars to go around.
“Historically, interest rate hikes haven’t affected the new-car market with any major significance because auto manufacturers are known to offer many loan subsidies,” Jessica Caldwell, executive director of insights with Edmunds, said in a May 4 statement. “Even though this is the biggest rate hike we’ve seen in two decades, the continued inventory shortage coupled with strong demand likely means the impact of rising interest rates will be minimal on this market, as the new-vehicle buyer base of higher-income shoppers won’t feel the pain as much as the average consumer.”
Cox Chief Economist Jonathan Smoke agreed that the Fed’s actions probably wouldn’t change new-vehicle sales.
“As a result, the new-vehicle market is likely to remain inflationary as supply remains very tight and is not likely to improve substantially before 2023,” Smoke said.
Pent-up demand for new vehicles remains healthy, Smoke said May 13.
“We think the market will sell about the same number of new vehicles regardless of the exact path of rates — assuming it does not get worse than what the Fed is projecting,” Smoke said in a statement.
Low supply has limited the new-vehicle market to 1 million sales per month, Smoke added. Demand would remain at that level even if a recession occurred, he said.
Most everyone I know in the car market has basically tapped out for now, not really because of high interest rates or markups but because there are just too many variables, and it’s hard to know what exactly you’re getting for your money, hard to know, even, how much your money is worth.
2nd Gear: Some Strife Atop Volkswagen
VW’s board is mad that its software isn’t better, because VW’s board knows that software is key to its autonomous plans.
From Reuters:
Volkswagen Group supervisory board has called on management to present a reworked plan for the automaker’s software division, which forms the backbone of its strategy but has run into problems, two people familiar with the matter said.
The board is expecting an update at the last supervisory board meeting before the summer break, one of the people said, adding no date has been set yet.
“What the [management] board has presented is not enough,” said the other person.
VW declined to comment.
VW has called its software division, Cariad, which is the central element in its autonomous driving push, “the most ambitious project of our entire industry to tap into the most relevant profit pools of the future.”
Cariad plans to challenge existing software incumbents, including Apple and Tesla, but has hit bumps in the road, which could become a problem for VW boss Herbert Diess, who is responsible for the unit on the group’s management board.
I thought Diess was about to be fired last year, especially after his dreaded vote of confidence, but he has lasted so far even though there always seem to be little dramas like this percolating. It’s probably true enough to say that being CEO of Volkswagen is a complicated job.
3rd Gear: Here is a Good-Looking New Nissan
The Nissan Sakura, so named for the Japanese cherry blossom, was unveiled Friday, a good-looking electric kei car for the Japanese market. Mitsubishi will also sell a rebadged version of it, called the eK X EV. Both will be all-electric kei cars in, a surprisingly scarce segment.
From Automotive News:
The sibling nameplates, the Nissan Sakura and Mitsubishi eK X EV, aim to tap huge domestic demand for tiny runabouts in the minicar segment by floating a new all-electric variant.
Mini vehicles comprise around 40 percent of Japanese light-vehicle sales. But EVs have only a paltry presence, accounting for just 1.7 percent of total Japanese passenger car demand.
The new entries join Toyota’s C+Pod 2-seater as the only mini EVs on the passenger market. Mitsubishi also sells a full-electric commercial vehicle called the Minicab MiEV.
The Sakura is Nissan’s first all-electric entry in the segment. Mitsubishi pioneered the technology with the now discontinued i-MiEV, an EV minicar launched in 2010.
Here is a photo of the car:
Seems like a nice car! Americans aren’t getting it because we don’t deserve it.
4th Gear: Elon Musk
Tesla CEO Elon Musk’s heel turn in recent days to right-wing troll wasn’t really a heel turn at all, as Elon has been the heel all along, but he’s been getting more and more obnoxious ever since becoming the richest person on the planet. Now, according to a report last night from Business Insider, Elon’s been accused of sexual misconduct, and this is all just getting pretty gross:
SpaceX, the aerospace firm founded by Elon Musk, the world’s wealthiest man, paid a flight attendant $250,000 to settle a sexual misconduct claim against Musk in 2018, Insider has learned.
The attendant worked as a member of the cabin crew on a contract basis for SpaceX’s corporate jet fleet. She accused Musk of exposing his erect penis to her, rubbing her leg without consent, and offering to buy her a horse in exchange for an erotic massage, according to interviews and documents obtained by Insider.
The incident, which took place in 2016, is alleged in a declaration signed by a friend of the attendant and prepared in support of her claim.
[...]
According to the declaration, the attendant confided to the friend that after taking the flight attendant job, she was encouraged to get licensed as a masseuse so that she could give Musk massages. It was during one such massage in a private cabin on Musk’s Gulfstream G650ER, she told the friend, that Musk propositioned her.
After Insider contacted Musk for comment, he emailed to ask for more time to respond and said there is “a lot more to this story.”
“If I were inclined to engage in sexual harassment, this is unlikely to be the first time in my entire 30-year career that it comes to light,” he wrote, calling the story a “politically motivated hit piece.”
Insider extended the deadline and reiterated the offer to Musk to comment on the claims. He did not respond.
Elon also talked about the story on Twitter, in response to someone with an account called “TaraBull808.”
Also in a reply to an account called “Catturd ™.”
It’s all a grand conspiracy, you see, against the richest man in the world.
5th Gear: Ugh, More Elon Musk
Elon has been busy on Twitter in the last 24 hours, not just talking about allegations of sexual misconduct but also insisting that he didn’t think about Twitter much and that he is still really devoted to Tesla, even though he is in the middle of buying Twitter. It’s definitely believable to say that you don’t think about Twitter much when you are in the middle of buying it, especially if you do it in a tweet.
This is also, I suppose, an attempt to boost Tesla’s sagging stock price, which is down 38 percent in the past six months. I would say this is all pretty desperate, but Elon has always been pretty desperate.
Reverse: Lindbergh
His greatest challenge was staying awake; he had to hold his eyelids open with his fingers and hallucinated ghosts passing through the cockpit. The next afternoon, after flying 3,610 miles in 33 1/2 hours, Lindbergh landed at Le Bourget field in Paris, becoming the first pilot to accomplish the solo, nonstop transatlantic crossing. Lindbergh’s achievement made him an international celebrity and won widespread public acceptance of the airplane and commercial aviation.
Neutral: How Are You?
I saw a Murcielago the other day. Sorry, I mean, Murciélago. I couldn’t help but love it, despite it being a Lamborghini.