Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know heading into the 2018 Detroit Auto show. You can check out all of our coverage so far and here’s our new morning video recap of yesterday’s big story:
1st Gear: GM’s New, Boring Driverless Car Play
Last night, we got word that GM was about to introduce a driverless car with no steering wheel or pedals and, eventually, an image of the interior also leaked. Just after midnight the embargo on the story lifted, freeing up other outlets to report on the matter. We didn’t agree to the embargo, though, and so weren’t given any press materials in advance. What did we learn once we were finally able to see what GM was up to? Well, not much.
When GM starts testing its autonomous electric sedan in San Francisco ride-sharing fleets, it’ll likely be the first production-ready car on the roads without the tools to let a human assume control. The announcement Friday is the first sign from a major carmaker that engineers have enough confidence in self-driving cars to let them truly go it alone.
“What’s really special about this is if you look back 20 years from now, it’s the first car without a steering wheel and pedals,” said Kyle Vogt, chief executive officer of Cruise Automation, the San Francisco-based unit developing the software for GM’s self-driving cars.
GM will run the cars in a test batch for a ride-sharing program starting in 2019, and they won’t be without a safety net. The vehicles will travel on a fixed route controlled by their mapping system, and the Detroit-based automaker is applying for federal permission to run the test cars without a driver.
Vogt said the self-driving Bolt has redundant systems built in to back up the driving systems. If there’s a problem, the car will slow down, pull over to the roadside and stop.
So, GM still has no approval from the federal government to run the driverless version of the car, and also hasn’t revealed when or even if the car will go into production, or if it’s just a test car. It’s also, of course, not “the first car without a steering wheel and pedals,” and not even GM’s first such car, though I suspect Vogt means something more along the lines of “first car without a steering wheel and pedals that might actually go into production.”
And, indeed, if that happens, then this might yet be a historic day in automotive history, though, as with all new cars, we’ll believe them when we see them. As Bloomberg notes, GM has to first get past a regulatory hurdle to even begin.
GM said it’s filed a petition with the National Highway Traffic and Safety Administration to test the cars. Current U.S. auto-safety standards contain several provisions that act as de facto requirements that vehicles have driver controls such as a steering wheel and foot pedals.
Manufacturers can get around those standards by petitioning NHTSA for exemptions, provided they demonstrate that the exempted vehicle will be at least as safe as a conventional one. Current law caps the number of exempted vehicles at 2,500 vehicles per manufacturer per year.
If NHTSA approves the petition, GM will still have to get permission from states to run the steering wheel-free cars. Currently, only seven states allow the technology to be tested without a safety driver, said Paul Hemmersbaugh, GM’s chief counsel and policy director for transportation as a service.
2nd Gear: Car Sales Are Down Overall In China But Electric Vehicle Sales Are Skyrocketing
This is a trend that we’ll start seeing in other countries, as well, though in China it’s particularly pronounced because of the government’s broad encouragement of electric-car adoption as they try to reduce smog and position themselves to compete in the future of transportation. Still, car sales numbers in general have to be a bit worrying for manufacturers there, as they grew just 1.4 percent in the past year. That’s the slowest rate in 15 years.
From The Wall Street Journal:
Sales of electric passenger cars rose 72% to 578,000—four times as many as the 144,000 sold in the U.S. last year. EV sales constituted just 2.7% of China’s total auto sales, so they didn’t make much of a dent overall.
China recorded sales of 28.88 million vehicles last year, according to figures released by the government-backed China Association of Automobile Manufacturers on Thursday.
That 3% increase was well off the 2016 pace, when sales overall grew 14% year-over-year and passenger-car sales jumped 15%.
It was the slowest growth overall since 2011, when the sector was slammed by a collapse in commercial sales.
Analysts believe incremental growth will continue, citing factors including market saturation in big cities such as Beijing and Shanghai and fast-rising used-car sales. Foreign auto makers, meanwhile, are facing increasing competition from domestic competitors.
“The days of making easy money in the China market are fading away,” said UBS auto analyst Paul Gong. “Foreign mass-market brands know they are in an increasingly difficult market.”
China’s top domestic brand, according to the WSJ is Geely, which sold 1.25 million vehicles there last year, a 63 percent (!) increase from the year prior.
3rd Gear: Japan’s Worried That Electric Vehicle Tech Is Passing Them By
In the ‘90s, everyone had a Sony Discman, just like everyone had a Sony Walkman in the decade before that. It’s kind of hard to believe it now, but the Tokyo-based Sony was cutting edge for its time, a time that’s now far in the distance. Now, according to The New York Times, the country is worried that something similar might happen with electric vehicles.
From the NYT:
Japan is scrambling to ensure it has a future in an electric-car world. Toyota, the country’s largest automaker, pioneered gasoline-electric hybrids but has long been skeptical about consumers’ appetite for cars that run on batteries alone. Now, under pressure from foreign rivals like Tesla, the company says it is developing a batch of new electric models.
The Japanese government has made managing the shift to next-generation vehicles a priority, but critics say its approach lacks focus. It has bet big on hydrogen fuel cells, an alternative technology to plug-in rechargeable batteries that is struggling to win widespread support.
The fear is that once again, Japan will miss a big technological shift.
In the consumer electronics sector, the transition to new products like flat-screen televisions and digital music players undermined once-ubiquitous Japanese brands. Innovation in the digital era became the domain of Silicon Valley, while mass production shifted to China.
As a result, some storied names in the world of technology — Sharp, Toshiba, Sanyo — have disappeared or no longer resonate with the world’s consumers the way they once did.
“What really puts Japan on the defensive is the idea that the tech revolution is coming to the car industry,” said James Kondo, a visiting professor at Hitotsubashi University in Tokyo who has worked with technology companies in the United States and Japan.
Japanese car companies are sometimes persuasive in their skepticism of the electric car push, but it’s bets on fuel-cell technology instead have been something less than persuasive. Your move, Japan.
4th Gear: Average Fuel Economy Is The Highest It’s Ever Been
For new cars and trucks last year in the U.S. it was 24.6 miles per gallon in 2016. Regulators think it could go up to 25.2 mpg for 2017. It also comes at a time when the Trump administration is considering loosening fuel economy rules for automakers.
Last March, President Donald Trump ordered a review of tough U.S. vehicle fuel-efficiency standards put in place by the Obama administration, but states like California have pushed back against this decision.
Low oil prices have encouraged Americans to shift away from smaller passenger cars to trucks and SUVs. This has led automakers to worry that rising fuel efficiency requirements through 2025 may be too stringent, but environmentalists say automakers must make vehicles more efficient.
Who knows what will happen next? No, seriously. I’m asking.
5th Gear: Production Of Heavy-Duty Rams Will Be Coming To The U.S. From Mexico
The assembly plant is in Warren, Michigan, where Fiat Chrysler of America says they will spend $1 billion to modernize it ahead of production starting in 2020 on the next generation Ram Heavy Duty truck. FCA says that this will create around 2,500 jobs. Production is moving from a facility in Saltillo, Mexico, about 200 miles southwest of the border in Laredo.
The move has been in the works for months.
From Automotive News:
FCA said Thursday the Michigan plant expansion and special payments were made possible in part by U.S. tax reform passed late last year that will reduce the company’s corporate tax bill.
FCA Chief Executive Sergio Marchionne said a year ago the company could shift heavy-truck output from Mexico to Michigan, depending on the outcome of tax reform legislation and proposed changes to the North American Free Trade Agreement.
Reverse: In 1904, Henry Ford Went A Record-Setting 91.37 MPH
He did it on the frozen ice of Lake St. Clair in a car called the 999. Ford did it for publicity, as his Ford Motor Company was just roaring to life.
On June 16, 1903, Ford incorporated a new company: the Ford Motor Company. In January of the following year, Ford set his record at Lake St. Clair, racing 1 mile in 39.4 seconds for a record speed of 91.37 mph. For the next several years, Ford continued to build race cars that met with varying degrees of success. In 1908, Ford launched a car for the masses, the Model T, which revolutionized the automotive industry–and American society in general–by providing affordable, reliable transportation for the average person. To promote the Model T, Ford entered it in races. In 1909, the Model T won a New York-to-Seattle race and although it was later disqualified due to a technicality, the event provided great advertising for Ford. Over the next few years, the Model T won a variety of races around the U.S. In 1913, Ford, who was reportedly unhappy with certain rules of auto racing, quit the sport. (Now that his company was a success, he didn’t require the publicity from racing anyway.)
Neutral: What Do You Think Of GM’s New Test Car?
I know you have thoughts.