Tesla needs to step up its service game in Germany, India is leading the charge on battery-swapping, and BMW’s new CEO wants to beat Mercedes. All that and more for The Morning Shift for Friday, August 16, 2019.
1st Gear: Tesla Needs To Step Up Its Service Game, Especially In Germany
We’ve written many times before that having a Tesla vehicle repaired can take a long time, and recent videos like The Fast Lane Car’s “Dear Tesla, This Is Ridiculous” indicate that some of those problems may still remain.
According to Bloomberg, this kind of stuff doesn’t fly in Germany, where owners expect their vehicles to be serviced quickly and efficiently, as is the German way. From the story:
Subpar service could be a barrier to Tesla making more of an impact in Germany, where exacting car owners value how painstakingly their BMWs and Mercedes are cared for just as much as the speed of the Autobahn. CEO Elon Musk, who’s famously inimical to Twitter critiques, acknowledged earlier this year that a lack of service centers in Germany was hampering the company’s growth there.
Despite that, Bloomberg writes that Tesla became “the fastest-growing [brand] in Germany in the first seven months of the year, according to data from industry watchdog KBA.” And while that sounds great, strong competition that has a history of quicker vehicle service is on the horizon. From the news site:
In Europe, Tesla is racing against time as more established players wake up to the electric future. The continent is projected to be the world’s second-largest driver of electric cars in the next decade, trailing only China. Customers can already choose between a growing number of battery-powered models from the likes of Mercedes-Benz, Jaguar and Audi.
For its part, Tesla is making some changes to help on the service front, but it still won’t have the presence of established automakers. From Bloomberg:
Tesla is in the process of doubling the number of service centers in Germany to 17 locations, with a focus largely on urban areas including Berlin, Hamburg and Munich, according to the company’s website. The automaker is also branching out into mid-size cities such as Kiel, Ulm and Mannheim, and separately lists 16 retail stores in the country.
The brick-and-mortar presence is still a far cry from the sprawling infrastructure that established automakers have built in Germany over decades. Volkswagen Group, the top-selling automaker in the country, has hundreds of dedicated sales and repair outlets.
Strangely, the bit about “doubling the number of service centers in Germany to 17 locations” implies that there are 8.5 service centers there now. I’m not sure what that means, but it is worth noting that according a Tesla spokesperson who spoke with Bloomberg, Tesla has plans to “expand its fleet of mobile service vehicles by 50 percent and increase mobile service coverage by fivefold this year in Europe.”
There’s more to the story, including testimonials from Tesla owners who have allegedly had quality and service issues in Europe, and Tesla’s responses to those cases. Here’s what a Tesla spokesperson told Jalopnik in response to this topic:
“Tesla’s vehicle quality has reached record highs, and our data does not indicate any unusual vehicle quality issues that are specific to Germany or anywhere else in the world. Although there is always a small chance that a car may occasionally encounter blemishes during final transport to a customer, that is not unique to Tesla and we address those issues quickly for anyone impacted. We are also in the process of scaling up service centers globally, including a more than 50% increase in Mobile Service vehicles and a five-fold increase in Mobile Service coverage just this year in Europe.
We set an extremely high bar for our cars, which is why any customer who is unhappy with theirs can return it for a full refund up to seven days after purchase. Our customer satisfaction data shows that German customers have largely been satisfied with their vehicles, including the quality and condition of their cars upon delivery.”
In any case, it seems clear that Tesla is going to want to continue improving in the area of service, especially as the competition thickens in Europe.
2nd Gear: An Indian Oil Refiner Is Setting Up The Electric Car Infrastructure Of Your Dreams
Hindustan Petroleum Corp, which is apparently concerned about losing its “grip on a segment of the mobility market that’s rapidly shifting to cleaner power,” is launching a pilot program for two and three-wheelers at the company’s outlets in India, Bloomberg reports. From the news site:
Two- and three-wheelers account for about two-thirds of HPCL’s gasoline sales, said the [people familiar with the matter]. Those two types of vehicles now make up more than 80% of all autos on Indian roads, according to BloombergNEF. Their electric versions have achieved parity with gasoline vehicles in terms of total cost of ownership and are expected to lead electrification of transport in India, according to BNEF’s latest Electric Vehicle Outlook.
The swap program, which will take place in the city of Thane in India’s western Maharashtra state, will allow consumers to replace depleted batteries with fully charged ones in just a few minutes. That’s a quicker option for motorists than recharging the battery themselves, which can take several hours.
This isn’t the only company offering battery swaps, either, with Bloomberg mentioning that startups Sun Mobility and Lithion Power Pvt are swapping batteries on buses and two/three-wheelers. Plus, the news site mentions, Finnish company Fortum Oyj and Swedish company Clean Motion apparently set up a pilot battery swapping operation near New Delhi last year.
Along with price, one of the biggest hindrances to mass electric vehicle acceptance, especially given their current ranges, is charging time. People fuel up their automobiles today in just a couple of minutes, so spending over an hour to top up an EV requires quite a bit of patience. And if there’s one thing most people, especially Americans, don’t have, it’s patience.
That’s why battery-swapping stations have been so alluring, and why we’ve written about them at length. The idea sounds simple: When your car is running low in charge, you roll into a battery-swapping station, have your electron storage device removed and replaced with a full one, and then you continue on your way. It should be quick and easy, and it should mean you don’t have to sweat as much about your car’s battery losing capacity over time.
There are, of course, a number of challenges, including battery standardization requirements, infrastructure, battery degradation and service, connector longevity, business cases for the stations, and much more. But still, it’s an exciting idea. And though Tesla’s extremely limited trial run only lasted briefly and Israeli battery-swapping startup Better Place died back in 2013, it’s nice to see that this idea isn’t dead.
So it seems like India is leading the charge on battery-swapping stations, and I’m excited to see how it works out, even if the vehicles whose batteries are being swapped are a bit simpler than four-wheeled EV automobiles we see in the U.S. You can read more about the logistics of such a battery-swap infrastructure in India by checking out this paper on Medium written by Dr. Parag Diwan, who runs an EV infrastructure consulting firm.
3rd Gear: BMW’s New CEO Is Hungry
Oliver Zipse addressed staff in an internal email a day after his predecessor Harald Krueger stepped down. BMW has lost ground to Mercedes-Benz producer Daimler in the past five years and seen rivals such as Tesla jump ahead in electric car sales.
He also stated in the email that blaming current conditions for struggles isn’t the right move, and that the company needs to instead keep a “positive spirit” to come up with good solutions. He went on:
“We don’t always have to be first, but we most certainly have to be far better than our competitors in everything that we do. This applies not only to our products and services, but also to our processes and structures, as well as our costs,” he said.
New BMW CEO coming in with some fire! Good, now hurry up and compete in the EV space.
4th Gear: Ford Recalls Over 108,000 Cars Because of Seatbelt Issues
Ford is having its dealers apply a coating to certain 2015 Ford Fusion and Lincoln MKZ seat belt anchor pretensioners to act as protection during deployment. This is part of a recall that The Blue Oval announced on Wednesday in a press release, which reads, in part:
Ford Motor Company is issuing a safety recall for select 2015 Ford Fusion and 2015 Lincoln MKZ vehicles for an issue involving seat belt anchor pretensioners. In affected vehicles, increased temperatures generated during deployment of the driver or front-passenger seat belt anchor pretensioner could degrade the tensile strength of the cable below the level needed to restrain an occupant. Seat belt assemblies that do not adequately restrain the occupant in a crash can increase the risk of injury.
Ford is aware of one report of injury related to this condition.
This action affects 103,374 vehicles in the United States and federal territories, 4,002 in Canada and 1,023 in Mexico.
5th Gear: A Reminder That A Trade War With China Might Be Bad For The U.S.
We’ve heard before that tariffs on imports can sometimes be quite a bad thing for the U.S. economy, so as trade negotiations with China continues, it’s worth reiterating that point by looking at a recent New York Times story titled “Economic Trouble Signs Hang Over Trump’s Trade War.”
From the story:
The president has insisted that his tariffs on Chinese imports are hurting only China, telling reporters on Thursday that “the longer the trade war goes on, the weaker China gets and the stronger we get.” The main thing threatening American prosperity, he has said repeatedly on Twitter, is the Federal Reserve and its refusal to act expeditiously to lower interest rates.
But economists say the tariffs are causing damage unacknowledged by the administration, with slowing growth in China and an economic downturn in Germany, a big exporter to China, becoming apparent this week. Sticking with the trade war could bet the health of the economy on the Fed’s ability to provide a sufficient buffer if a global downturn sets in.
Check out the New York Times for more, but it seems like a key takeaway is that there are strong differences in economic predictions between analysts and the Trump administration.
Reverse: John Z. DeLorean Acquitted Of Drug Trafficking Charges
After close to 30 hours of deliberation, a jury of six men and six women unanimously acquits the former automaker John Z. DeLorean of eight counts of drug trafficking in Los Angeles, California, on August 16, 1984.
Neutral: Battery Swapping? Is It Going To Catch On?
With India leading the charge on battery-swapping for two and three-wheelers, do you think that concept will catch on worldwide?