In the case that you thought anyone wasn’t taking the transition to EVs seriously, go ask Harald Krüger, out of the job as BMW CEO. All that and more on The Morning Shift for July 8, 2019.
1st Gear: EV Transition Not Screwing Around
Over the weekend we reported that BMW’s CEO Harald Krüger is out over dropped market share, but another report from Bloomberg lays things out more pointedly: Krüger missed the boat on EVs. Via Bloomberg:
Instead of leading the company through the biggest upheaval in a generation, he was felled by the transition as he failed to provide a roadmap to the future. In his farewell note, he cited the “enormous exertion” demanded of BMW employees as the company grapples with the unprecedented demands of the shift.
In recent years, the industry “has been shaped by enormous changes, which have brought about more transformation than in the previous 30 years,” Krueger said in the note.
Krueger, 53, inherited a company at the top of its game. Under the previous CEO — now chairman — Norbert Reithofer, BMW had outsold Mercedes-Benz and Audi for a decade. The company was a pioneer in electric vehicles with the i3 city car introduced in 2013. It was the first major automaker to use lightweight carbon fiber in mass-market models. And its traditional business of sumptuous-but-sporty sedans and SUVs was as robust as ever.
But soon after Krueger took over, sales of the i3 hit a wall, calling into question the electric push.
If you google BMW and EV development now, all you get are results about Krüger stepping out. But if you search for the old stuff, you’ll find the guy’s attitude expressed at the time. Here’s Clean Technica reporting in late 2018:
BMW seems to be taking the opposite tack, touting the advantages of “flexible architecture” that can accommodate fossil, hybrid or electric powertrains. BMW plans to offer all of its models with a choice of powertrain starting in 2021. “We can’t afford having two factories standing still,” says CEO Harald Krueger. “With a flexible approach, you can always manage the capacity of your plants. But if you have a specific EV architecture, what do you with the old one? What do you do with the people?”
BMW was wrong to let EV development go so lax. I just wonder if the company will be able to change course before it gets left behind entirely. But hey, cheap gas will last forever, and X7 sales will keep the company afloat indefinitely.
2nd Gear: Brain Geniuses at Major Automakers Realize EVs Shouldn’t Just Look Like Awful Hatchbacks
This report from the Detroit News hurts to read for anyone who saw cars like what Tesla has been putting out for a decade now and couldn’t wait for the rest of the auto industry to produce designs like them. “As EVs evolve, automakers look beyond boring hatchbacks,” headlines the report, about as depressing as could be:
Mainstream automakers are finally catching on to the fact that no one said an electric vehicle had to look — or drive — like an under-powered jelly bean.
The next several years are expected to deliver a slew of fully electric vehicles that are more attractive, more capable and look a lot more like the trucks, SUVs and cars seen on roadways today. That would be a departure from the tiny mainstream battery-electric vehicles that General Motors Co., BMW AG, Nissan Motor Co. and a few others have failed to popularize.
“There is going to be an explosion of new designs,” predicted Ted Cannis, Ford Motor Co.’s global director of electrification. “There’s going to be a lot more choice coming from manufacturers.”
Call it the Tesla effect, or call it technology catching up with the times. Either way, analysts and experts say the next electric vehicle wave won’t be the wimpy hatchbacks hardly anyone outside of California buys.
The more I read this the more that I think I have fallen into a time vortex and am actually in 2010 again. I should invest more in Amazon.
3rd Gear: A Reminder Why Truck Sales Wars Seem So Cutthroat: Everything Else Is Slow
We’ve been doing a lot of reporting on how Ram is beating the Silverado in sales, and how that looks so rough for GM. But there’s a deeper reason why these truck sales catch so much sun these days: It’s just about all anyone has anymore. That’s what’s laid out in a new Detroit News report:
Ford Motor Co. and Fiat Chrysler Automobiles reported this week that through the first half of the year, trucks were the only vehicles with a sales uptick compared to a year ago. At General Motors Co., sales of both light-duty and heavy-duty pickups fell as GM ramps production of all-new models.
What is absolutely wild is this quote from GM about the sales war, which is perhaps more accurate than it first seemed:
“The thing everybody needs to remember about this sensationalized Ram versus Chevrolet sales battle is that Rome won the Pyrrhic War,” said GM spokesman Jim Cain.
Ah yes, that great empire Rome, an empire which is definitely still around and not a symbol for something getting too big, too slow, too leaden to survive.
4th Gear: Europe Is Rushing to Match China’s Battery Industry
Much as most of the establishment car industry is rushing to catch up with EV development, so too are the powerful economies of the world rushing to catch up on battery infrastructure, as noted by Bloomberg:
Germany and France are prodding for action out of concern that China is racing ahead in new technologies sweeping the auto industry. With 13.8 million jobs representing 6.1% of employment linked to traditional auto manufacturing in the EU, authorities want to ensure that manufacturers can pivot toward supplying electric cars and batteries.
“We are walking the talk,” Sefcovic said in remarks to Bloomberg. “We have overcome an initial resignation that this battle would be a lost one for Europe.”
A number of trends are catalyzing the program, starting with the determination by EU nations to rein in greenhouse gases and fight climate change. They’re increasingly focused on reducing pollution from diesel engines and alarmed at the head start Chinese companies have in greener technologies. French President Emmanuel Macron in February said he “cannot be happy with a situation where 100% of the batteries of my electric vehicles are produced in Asia.”
Sometimes I wonder what it is like to be a powerful person in one of these industries. Do I just sit around for years ignoring trends until I make grand pronouncements about “walking the talk” before cashing out a few years down the road?
5th Gear: Mercedes Owners Accuse Trump Admin of Stalling Emissions Investigation
In what might be the least surprising news of quite some time, the Trump administration is accused of being soft on Mercedes-Benz, at least from M-B owners, as noted in a new LA Times report:
In 2016, federal and state regulators launched an investigation into whether Mercedes had used a similar scheme, enabling cars to pass emissions tests that they would have otherwise failed. German regulators also launched an inquiry.
In the intervening years, German regulators have found evidence of cheating by Daimler and hit the company with fines and forced recalls.
However, in the United States there have been no repercussions as the investigation crosses the three-year mark.
“It is past time for greater urgency and action from regulators and Congress on the allegations against Mercedes,” the advocates wrote. “Owners and lessees of Mercedes diesel vehicles have been left without answers or recourse while the illegally polluting vehicles remain on U.S. roads.”
I don’t know man, if the person you’re hoping to get tough on Mercedes is Trump, you may want to look into other things to complain about. Unless the problem has to do with gold-plating.
Reverse: Yes, That Guy’s Dad
George Romney Born: Today, the best-known Romney is presidential candidate Mitt Romney, but his father was a major player in the automobile Industry throughout all of the 1950s and into the 1960s. As CEO of American motors, George Romney steered the company toward its niche market of compact, affordable cars before serving as Michigan governor and the secretary of the Department of Housing and Urban Development (HUD).
Neutral: How Would You Turn Around BMW?
If it’s suddenly your job to take the helm at BMW, what would be your steps to get the ship turned right?