Hyundai is making its electric move, Congress is trying to fix the EV subsidy, and Mazda. All that and more in The Morning Shift for May 27, 2021.
There is no timeline here, so I’m not sure how much of this is actual news given that we’ve already heard plenty about Hyundai’s electric plan, otherwise known as Ioniq. Still, it feels dramatic every time a report like this comes out about an automaker, as Reuters says that half of Hyundai’s models “powered by fossil fuels” will at some point be gone, just like that.
Hyundai Motor Group will slash the number of combustion engine models in its line-up to free up resources to invest in electric vehicles (EVs), two people close to the South Korean automaker told Reuters.
The move will result in a 50% reduction in models powered by fossil fuels, one of the people said, adding the strategy was approved by top management in March.
“It is an important business move, which first and foremost allows the release of R&D resources to focus on the rest: electric motors, batteries, fuel cells,” the person said, without giving a timeframe for the plan.
While Hyundai did not specifically address a Reuters query on its plans for combustion engine models, it said in an email on Thursday that it was accelerating adoption of eco-friendly vehicles such as hydrogen fuel cell vehicles and battery EVs.
The automaker added that it aims to gradually expand battery EV offerings in key markets such as the United States, Europe and China with a goal for full electrification by 2040.
China and Europe are, of course, ahead of the game compared to the U.S. when it comes to EV adoption. At some point, in any case, it feels like the U.S. won’t have much of a choice.
The Senate Finance Committee advanced a bill Wednesday that would beef up the subsidy for EVs in the U.S. The current subsidy is a maximum $7,500 federal tax credit for cars bought from automakers that have sold fewer than 200,000 EVs. Tesla and GM no longer qualify for that, having sold more than 200,000 EVs. GM is right that they should still be in it, among other issues with the current incentive set up.
The proposed legislation would go a long way toward fixing it.
The U.S. Senate Finance Committee advanced legislation on Wednesday that would boost electric vehicle tax credits to as much as $12,500 for EVs that are assembled by union workers in the United States.
The bill would limit tax credits to vehicles with a retail price below $80,000 to qualify for the tax credits. The current maximum tax credit is $7,500 with no maximum price and currently phases out for individual automakers once they hit 200,000 total EVs sold.
The “Clean Energy for America” bill, which advanced on a 14-14 tie vote, would eliminate the existing EV cap, while the credit would phase-out over three years once 50% of U.S. passenger vehicle sales were EVs. It has numerous other green energy tax incentives and would rescind or cut many fossil fuel tax provisions.
I cannot get a good read on whether any of Democrats’ big initiatives like this will actually pass, as lots of people have been saying lots of conflicting things. Since the Senate has been where legislation goes to die for many years now, I will take this as a hopeful.
Mazda is a small, strange, endearing automaker that endures perhaps because every time you talk to someone from Mazda they are like, “Mazda is small and strange but always manages to endure.” It runs counter to years and years of conventional wisdom about automakers, which dictated that you had to have volume to make money and be successful.
Except, as The New York Times reports, three automakers who don’t rely on volume at all — Mazda, Tesla, and Volvo — were the only automakers to increase sales last year. Mazda, in particular, is doing well.
The critical accolades piled up, as well. U.S. News and World Report, for the fifth year, made Mazda its Best Car Brand. Every one of its new models that the Insurance Institute for Highway Safety tested was a Top Safety Pick, more than any other brand. It ranked No. 1 in a Consumer Reports survey on the most reliable new vehicles. And then this year, Mazda received the top spot in that magazine’s coveted Brand Report Card, based on a combined score that measures “road-test performance, predicted reliability, owner satisfaction and safety.”
“During the pandemic, a number of brands were able to take some advantage of getting people to take a look at them,” said Alexander Edwards, president of Strategic Vision, an automotive research and consulting firm. “Mazda has had a little bit of an easier time succeeding because, with just 2 percent of the market, they haven’t had a lot to lose.”
Mazda’s North American president thinks he has somewhat of an explanation.
“When I worked at another auto company, the engineers were taught that value was performance divided by cost,” said Jeff Guyton, president and chief executive of Mazda’s North American operations. “The first day that a Mazda engineer comes to work, he or she is taught that value is performance divided by weight.
“That’s a totally different mind-set,” he continued. “And we do that because weight is the enemy of cost. But it’s also the enemy of fun-to-drive, and it’s also the enemy of fuel economy. So if we judge value as performance divided by weight, we should be able to tackle all of those things.”
According to Guyton’s LinkedIn, he worked at Ford for over nine years before joining Mazda. It also says that he is a graduate of Wittenberg University, a sporting rival to my alma mater The College of Wooster. See you on the basketball court, Jeff.
Tesla is removing radar from semi-autonomous driving systems on the Model 3 and Model Y, in a move that is a bit perplexing. The National Highway Traffic Safety Administration also thinks it’s a strange idea.
Newer Tesla Model 3 and Model Y vehicles will no longer be labeled as having some advanced safety features after the automaker said it was removing radar sensors to transition to a camera-based Autopilot system, NHTSA said Wednesday.
The safety agency confirmed it updated its website to show that Tesla Model 3 and Model Y vehicles produced on or after April 27 “do not have NHTSA’s check mark for recommended safety technologies: forward collision warning, lane departure warning, crash imminent braking and dynamic brake support.”
The agency said it “only includes check marks for the model production range for the vehicles tested.”
Tesla, which did not immediately comment, disclosed on Tuesday in a blog post that it would drop a radar sensor in favor of a camera-focused Autopilot system for its Model 3 and Model Y vehicles in North America.
The agency said Tesla briefed NHTSA on the production change.
Waymo’s former CFO now works at Rivian. Job moves like this are usually seen as a bellwether as to how well one company is doing as opposed to the other company, though also who really knows.
Gerard Dwyer, who was Waymo’s CFO, joined Rivian this week as vice president of business finance, according to a post on LinkedIn.
“I’m thrilled to become part of such a talented team as we prepare to launch ground breaking all-electric vehicles for both the consumer and commercial markets,” Dwyer wrote in his post. “Lot of work ahead but it’s going to be a blast!”
Rivian is seen as a front-runner in a dense field of EV startups trying to take on incumbent Tesla Inc. The company has raised more than $8 billion from investors including Amazon, Ford Motor Co., T Rowe Price and Fidelity. Earlier this year, Rivian hired Claire McDonough from JPMorgan Chase & Co. as CFO. The automaker is eyeing an IPO later this year at a valuation of about $50 billion or more, Bloomberg has reported.
Rivian didn’t immediately respond to a request for comment outside regular business hours.
Dwyer is one of a wave of senior departures from Waymo this year. In April, CEO John Krafcik resigned for personal reasons and was replaced by co-CEOs Tekedra Mawakana and Dmitri Dolgov. Investor relations chief Sherry House left to join EV maker Lucid Motors Inc. as CFO.
The Golden Gate Bridge is one of those famous things that, in person, doesn’t disappoint.
This is one of those days when I deeply miss the routine of waking up, doing morning things, setting off for the office, getting some kind of bacon-egg-and-cheese situation in Midtown, commiserating with my colleagues, maybe getting a slice for lunch, meeting an old friend for drinks at happy hour, then blissfully riding the subway home. Almost there.