Lucid doesn’t want to make the news in the way Rivian just did, Toyota is reeling from natural disasters, cyberattacks and emissions cheating and Porsche wants everyone to know it’s chatting with Apple, but refuses to say about what. All that and more in The Morning Shift for March 18, 2022.
1st Gear: Only A Matter Of Time
When Rivian announced price increases upwards of five digits for some reservation holders, customers let the startup electric truck maker know how they felt about it. Rivian quickly ditched the plan for existing preorders. Lucid, another promising new EV maker, is staring at the same cost hikes, but its CEO Peter Rawlinson is trying to spare its earliest adopters from the brunt of them. From Reuters:
“There’s an inevitability that we will have to look at the price points of models that are coming out in the future,” CEO Peter Rawlinson told Reuters, citing soaring nickel prices after Russia invaded Ukraine.
“I think it would be absolutely foolish of me to say we’re never going to raise our prices,” Rawlinson said in the interview on the sidelines of the South by Southwest music, technology and film festival (SXSW).
“What we want to do is to honor and keep our commitments to existing reservation holders. I think that’s what was ill received in the market with Rivian.”
Last month, the Newark, California based company cut its 2022 production target from 20,000 vehicles to between 12,000 to 14,000. It blamed “extraordinary supply chain and logistics challenges,” such as:
Rawlinson on Thursday said the bottlenecks were caused by a handful of suppliers for windshield glass, carpeting and some exterior trim parts.
“I’m super frustrated because we’re not gated by silicon chips, we’re not gated by our ability to make electric motors,” Rawlinson said.
Switching to different suppliers for those parts would compromise quality, he said.
He questioned whether Rivian would be able to make a profit on its pickup trucks without raising prices, given the costs of battery packs.
“I don’t think even we could, with the best technology in the world, make an affordable, practical pickup,” he said.
Battery electric pickups are tough to do well at an affordable price because they’re heavy by nature. That heaviness necessitates larger battery packs, which in turn makes them even heavier, tanking range. If you’re hauling a trailer or something else, that problem is exacerbated. The fact that Lucid — a company that’s clearly struggling with the supply chain in its own way — can look at Rivian and say “oof, good luck with that” really puts the uphill battle Rivian is facing into perspective.
2nd Gear: Tesla’s Shanghai Plant Is Back On
Elsewhere in the world of EVs, Tesla’s Shanghai facility is reportedly up and running again after a two-day stoppage due to a COVID-19 spike in China. Via Reuters:
The Shanghai factory restarted its two-shift production from 7 a.m. local time to run around the clock, said the people. Enough workers have returned to their positions after being cordoned off in nearby residential compounds for 48 hours where they were required to be tested for COVID-19, according to the people who declined to be identified as they were not authorised to speak with media.
Tesla did not immediately respond to a request for comment.
Reuters reported on Wednesday that the U.S. electric vehicle maker had suspended production at its Shanghai factory for two days, according to a notice sent internally and to suppliers, as China tightens measures to curb its largest outbreak in two years.
Manufacturing centers like Shenzhen, Dongguan and Changchun, in addition to Shanghai, have been hit hard by the latest efforts to control the spread of the disease. Trucking and shipping, too. From another Reuters report:
Fabien Gaussorgues, who provides contract manufacturing services from a factory in Dongguan, said he was struggling to procure parts needed for electric scooters, warehouse robots and electric toys because of the shutdowns.
“It’s not critical yet but it’s getting more difficult every day,” Gaussorgues said. “Suppliers in Shenzhen cannot produce, so they’re not delivering goods. So next week we don’t have material for production,” he added.
This is affecting everything from Teslas to iPhones and even KFC and Pizza Hut restaurants in the region.
3rd Gear: ... As Toyota Assesses The Damage From Japan’s Earthquake
The earthquake that struck Japan off the coast of Fukushima on Wednesday killed four and injured almost 200 others, per CNN. It also snared manufacturing in the country, and Toyota has announced that it will pause some activity at 11 factories there next week. It’ll also have to lower its annual production forecast by 20,000 units. From Automotive News:
Toyota will halt production for three days starting next week on 18 lines at 11 factories in Japan, out of a total of 28 lines in 14 factories operated nationwide, the automaker said on Friday.
Toyota said it will lose about 20,000 vehicles of output from the quake-related shutdowns.
If you’ve been following Toyota as of late, you know that an earthquake has not been the manufacturer’s only setback in recent weeks:
On top of already announced slowdowns triggered by a cyberattack and microchip shortages, Toyota’s Japan operations will be down 50,000 units in total for March, from its original plan.
As for the models affected, it’s just about every one:
The latest suspensions will reduce output of Toyota-brand models including the Crown and Yaris passenger cars as well as the RAV4, Harrier, C-HR crossovers and Land Cruiser SUV.
Also impacted will be the Lexus LS and IC sedans, RC and LC coupes and NX crossover.
Sure, Toyota manufactures a lot of cars for its domestic market that are no longer sold here or never were, like the Yaris and Land Cruiser. (The Harrier is the Japanese-market name for the Venza, by the way.) The earthquake also rocked Toyota partners Renesas and Denso. Either way, this is going to jam up production. Again, and even more.
4th Gear: Porsche And Apple Have Talked
About what? Who knows! Perhaps it had to do with that car that nobody wants to help Tim Cook build. The automaker’s CEO, Oliver Blume, said during an annual earnings call on Friday that with Apple’s help it may “expand on [CarPlay],” which is the sort of non-statement that could very well lead to nothing but still gets everyone chatting because it involves the world’s biggest tech company. From Reuters:
“We already have Apple CarPlay, we will expand on that,” Chief Executive Oliver Blume said during a video conference on the carmaker’s annual results on Friday.
He said the Porsche and Apple traditionally cooperate closely and that they were “on the same wavelength” but added that it was too soon to make any decisions on future projects.
This could mean literally anything, but my hunch is that it’s related to Apple’s desire to include more vehicle control functions in CarPlay. To make that work, the iPhone maker will have to get manufacturers to play along, and Porsche might just be keen enough to do it.
5th Gear: Automakers Are Still Cheating Emissions Regulations
You’d think one of them would have learned from Dieselgate, but it turns out, no. The latest is Hino, the commercial truck manufacturer owned by Toyota. Today the Japan’s transportation ministry announced it will be revoking certification for four of the company’s diesel engines. Courtesy of our friends at Reuters again, which are really cleaning up today:
The move, which will also apply to Toyota Motor Corp and Isuzu Motors Ltd vehicles that use one of the Hino engines, will be formally announced by the ministry on March 25, it said in a statement.
Hino this month admitted to falsifying data related to emissions and fuel economy performance for three of the engines. In a fourth engine, it said performance was later discovered to be less than specified, although it had so far not found evidence of misconduct.
Hino has suspended sales for the moment, but roughly 115,000 vehicles on the road globally are presumed to have these engines, and many of them are in North America. So that’s wonderful.
Reverse: These Guys Are Going Places
Sunday, March 18, 2007 marked the introductory round of the Formula 1 calendar that year at Albert Park in Melbourne. The winner was Kimi Räikkönen, driving for Ferrari in his first race wearing Rosso Scuderia, kicking off a season where he’d later claim his one and only World Drivers’ Championship. Finishing third on the podium was a bright-eyed, 22-year-old newcomer with a lot of promise, by the name of Lewis Hamilton. He’d go on to accomplish some stuff, too.
Neutral: GT7 Is Still Down!
This is kind of unbelievable and our pals at Kotaku just covered it in more detail, but Gran Turismo 7 was taken down for maintenance before 8 a.m. ET on Thursday. It’s still down as of this writing, supposedly due to some catastrophic issue discovered in the latest update, which only went live a few short hours before the game was taken offline. Seeing as how you can’t play GT7 without an internet connection, this is a shining endorsement of the heavily regulated, DRM-addled, always-connected world in which we now live.