Mercedes says that the “tipping point is getting closer” on EVs, Hyundai posted big profits, and Tesla and bitcoin. All that and more in The Morning Shift for July 22, 2021.
1st Gear: Mercedes Doubles Down On Its Electric Car Doubling Down
Mercedes can’t stop talking about EVs. It already said that it is fast-tracking EV development this month, but now the company has attached a dollar figure to that commitment. That would be $47 billion this decade, the company said Thursday.
Daimler AG’s Mercedes-Benz vowed to spend more than 40 billion euros ($47 billion) this decade to electrify its lineup and defend its position as the world’s leading luxury-car maker through a historic industry transformation.
It pledged to be ready to go all-electric by the end of the decade where conditions allow.
Additional plans include:
- Introducing three electric-only EV platforms in 2025: MB.EA for mid-size and larger passenger cars, AMG.EA for performance cars and VAN.EA for electric vans and light commercial vehicles.
- Forming additional partnerships in Asia and Europe to source batteries. The company needs more than 200 gigawatt-hours of cell capacity by 2030.
- Bolstering EV-charging offerings with partners including Shell.
Mercedes will make eight fully electric cars on three continents next year. It’s flanking the EQS with models including the compact EQA and plans to unveil the electric version of its bestselling E-Class sedan at the Munich auto show in September.
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Forty-seven billion dollars this decade is more or less what GM, Ford, and Stellantis have said they will spend too, while Volkswagen has said that it will spend a little less than double that. The big electric race is on.
“The tipping point is getting closer and we will be ready as markets switch to electric-only by the end of this decade,” Chief Executive Officer Ola Kallenius said in a statement. “This step marks a profound reallocation of capital.”
2nd Gear: Elon Musk Says That Tesla Will Accept Bitcoin For Payment If Its Renewable Energy Usage Is At Or Above 50 Percent
Tesla said in March that it would accept bitcoin, before Elon walked that back in May. On Wednesday, Elon said at a conference that it was still a possibility for the future, if the energy used to harvest bitcoin is half renewable or more.
“I wanted a little bit more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50%, and that there is a trend towards increasing that number, and if so Tesla would resume accepting bitcoin” Musk said.
“Most likely the answer is that Tesla would resume accepting bitcoin.”
“Tesla’s mission is accelerating the advent of sustainable energy. We can’t be the company that does that and also not do appropriate diligence on the energy usage of bitcoin,” Musk said.
Musk added that he personally owned bitcoin, ethereum and dogecoin, apart from bitcoin that Tesla and SpaceX owned.
“I might pump, but I don’t dump,” Musk said. “I definitely do not believe in getting the price high and selling ... I would like to see bitcoin succeed.”
I have to admit that “I might pump, but I don’t dump” gave me a chuckle.
3rd Gear: Hyundai Posts Big Profits As It Says That The Chip Shortage Will Get Less Bad This Year (For Hyundai)
The Korean automaker posted profits of $1.57 billion for the second quarter on Thursday, and global sales of just over a million cars for April, May, and June. Somewhat interestingly, it said that Genesis helped.
The company sold 1,031,349 units around the globe in the April-June period, a 46.5 percent increase from a year earlier. Sales in markets outside of Korea increased by 73.6 percent to 830,667 units, led by the recovery of automotive demand in most markets around the world. Sales in Korea decreased 11 percent to 200,682 units.
Sales of SUV models and Genesis luxury brand models drove the momentum in sales volume and declining incentiveshelped lift revenue and profitability in the second quarter as the ongoing recovery from the global COVID-19 pandemic spurred automotive demand.
Hyundai also said that it thinks the chip shortage will get better later this year; Hyundai has been a bit more adept than other automakers at dealing with it, which analysts attribute to Hyundai’s conservative supply chain policies.
Hyundai Motor expects that on-year sales growth might slow down in the rest of this year amid adverse business conditions caused by the COVID-19 pandemic resurgence, as well as the unstable supply of semiconductor chips, raw material price fluctuations, and unfavorable exchange rates. However, the company will continue to proactively cope with these issues.
Regarding the global chip shortage, Hyundai Motor expects the situation to gradually improve in the second half of the year. The company plans to bolster its component inventory with sufficient orders for a year, secure additional supplies and strengthen cooperation with various semiconductor partners.
4th Gear: Meanwhile, The Chip Shortage Isn’t Going So Well For GM
GM will temporarily shut down “most” of its full-size truck production in the U.S., according to the Detroit Free Press. Full-size truck production, of course, is GM’s bread-and-butter, so this is about the worst possible news for the General; this also is far from the first time the chip shortage has bitten it in the ass, nor will it probably be the last.
In a notice to union members obtained by the Free Press, and confirmed by GM, the automaker will make the following production adjustments starting Monday:
- Flint Assembly, where GM builds the full-size heavy duty Chevrolet Silverado and GMC Sierra pickups, will operate on one shift for the week and is expected to resume regular production on Aug. 2.
- Fort Wayne Assembly in Indiana, where GM builds the full-size light-duty pickups, will be idled for the week, expected to resume regular production on Aug. 2.
- Silao Assembly in Mexico, which also builds full-size light-duty pickups, will idle for the week and is expected to resume regular production on Aug. 2.
“These most recent scheduling adjustments are being driven by temporary parts shortages caused by semiconductor supply constraints from international markets experiencing COVID-19-related restrictions,” GM spokesman David Barnas said in a statement. “We expect it to be a near-term issue.”
5th Gear: Penske And Cox Have A New Used-Car Sales Platform
The killer feature, or so they say, is that the new platform — called, of course, “Esntial Commerce” — will handle everything from “signature to contract.”
From Automotive News:
“There’s no other off-the-shelf product in the market that allows for full transaction,” [Michael Kabcenell, Penske’s vice president of retail strategy] said. “Believe me, I’ve looked.”
Penske said the tool has been operational for a few months after being developed with Cox for a year and a half. Pordon declined to provide information on specific sales or how many customers have used the platform, but said its use has grown. It’s possible the tool could replace Penske’s Preferred Purchase system, but no decision has been made, [Penske spokesman Anthony Pordon] said.
“It can get real personalized payments on every single vehicle in the inventory instantaneously,” Kabcenell said. “So it makes it really easy for customers to consider their budget and the financing aspect of the transaction all the way through their purchase journey, and not at the very end.”
Using Esntial Commerce, customers also can compare four different vehicles, select vehicle protection products, value their trade-in vehicle, get approved for financing, sign paperwork online through e-contracting capabilities and set up delivery at their home or a CarShop location.
Used car sales have come a long way from the days when your best bet was a classified ad in your local paper, and this all sounds good but, as with any online platform, it will live and die on the reaction of users, who vote with their feet.
Reverse: Wiley Post
A little over two years later, Post died in a crash in Alaska, along with his passenger, the humorist Will Rogers.
Neutral: How Are You?
I have been made aware of this listing for a 1991 Chevy Lumina with 109,000 miles on the odometer that a dealer in Queens wants $4,800 for. If you needed any more evidence that the used car market is absolutely bananas, I offer this. Take a zero off that price and I might consider it.