NHTSA is showing its teeth, GM still has a Bolt headache, and Pebble. All that and more in The Morning Shift for August 17, 2021.
1st Gear: NHTSA Is Getting Tougher
The National Highway Traffic Safety Administration has broad regulatory and investigative powers over automakers, which they flex (or not) depending—in part—on who sits in the Oval Office. Unsurprisingly, with Joe Biden as president, NHTSA is choosing to use those powers, and not just on Tesla, according to Bloomberg.
NHTSA, which announced the Tesla probe Monday, opened 26 probes into various auto and highway safety issues so far this year — more than in all of 2020 or 2019, according to its website. NHTSA is on pace to launch about 66 percent more investigations than the 25 it began last year.
Since President Joe Biden was inaugurated in January, NHTSA also has stepped up its pace of investigations into Tesla crashes. Nine probes into Tesla accidents have been opened since March; the most recent occurred in San Diego last month.
“Biden has picked leadership that is independent-minded and safety conscious,” said Jamie Court, president of Consumer Watchdog, a Los Angeles-based public advocacy group.
“Taken together, that order and this particular enforcement action could be the beginnings of a more active safety enforcement agenda for NHTSA,” said Paul Hemmersbaugh, who served as the agency’s general counsel under former President Barack Obama and now heads transportation work at the law firm DLA Piper LLP.
Separately, the National Transportation Safety Board applauded NHTSA yesterday.
Dewalt 20V Max Cordless Drill & Driver Kit
Comes equipped with an LED which goes on when the trigger is pulled. You’ll a clear view of whatever you are drilling or screwing with minimal shadows.
This is all, to be clear, a good thing, if you are interested in fewer people dying on the roads.
2nd Gear: Meanwhile, In China
Tesla is beefing up its public relations and legal teams there, as it has faced headwinds this year thanks to protests and faulty brakes.
Tesla Inc is hiring managers for legal and external relations teams in China, according to a job post on its Wechat account, as the electric-car maker faces public scrutiny in the country over safety and customer service complaints.
U.S.-headquartered Tesla, which is making electric Model 3 sedans and Model Y sport-utility vehicles in Shanghai, is hiring external relation managers in several Chinese cities including Beijing, Shanghai and Shenzhen, according to the post.
The job advertisement did not go into details of external relation positions, but separate posts showed the managers will handle government relations as well.
Reuters reported in May, citing people familiar with the matter, that Tesla was boosting its engagement with mainland regulators and beefing up its government relations team.
The company is hiring lawyers who specialize in construction, anti-monopoly and data privacy protection areas, while also looking for public relations managers.
I have been fascinated with Tesla’s approach to China because it is basically the opposite of how it does business in the U.S., where it doesn’t bother to have a PR team at all and scoffs at the government. Meanwhile, in China, where it doesn’t seem to have a legion of stans to defend it, Tesla is making moves to placate the government and the public. It’s almost like China is the world’s biggest car market or something.
3rd Gear: GM Is Still Dealing With Bolt Battery Issues
Now it says that it will replace all of the battery modules in some Bolts because of potential fires, according to Reuters. This has been quite the saga.
The module replacements, which could start as early as later this month, come after GM recalled its 2017-2019 model year Bolt battery-powered cars for the second time in less than a year. Two fire incidents were reported after the initial recall, including one in a Bolt that had updated software.
GM, the largest U.S. automaker, said in a statement issued on Monday it would replace recalled vehicles’ lithium ion battery modules with new modules, rather than replacing entire battery packs. “The battery pack case, wiring and the other pack components are not defective and do not need replacing,” it said.
GM said it was still recommending customers park vehicles outside immediately after charging and not leave them charging overnight. It said customers should also seek out the software update issued as part of the initial recall.
The automaker plans to use a different-generation battery when it launches electric Hummer and Cadillac vehicles over the next year.
This year, Chevy launched the Bolt EUV, which is a cut-rate competitor to the Tesla Model Y and which has not had any battery-related issues of note so far. Still, I’m sure all of this has been an unwelcome distraction for Chevy.
4th Gear: Retail Sales In The U.S. Were Down In July In Large Part Because Of Cars
“Retail sales” is the kind of economic indicator that doesn’t really mean anything to anyone except investors, which is to say those fortunate to have leftover money to invest, which is to say mostly the wealthy, because the retail sales numbers have the power to move markets. Well, according to The New York Times, the number for July was bad, attributable in part to the chip shortage and car sales being bad:
Retail sales dropped in July, the Commerce Department reported Tuesday, showing signs that consumer spending was hampered amid an uneven economic recovery.
The 1.1 percent decline in sales last month, which followed an increase in spending in June, was bigger than the drop economists had expected and came as spending on homes and cars fell.
Sales of furniture, sporting goods and building materials declined. Sales of cars and auto parts were down 2 percent in July, as prices of used and new cars continued to climb amid a shortage.
A global shortage of computer chips has slowed down car and truck production in recent months, with companies like Ford, Daimler and BMW feeling the effects in their financial performance. The production of motor vehicles and parts declined percent in July, the Federal Reserve reported Tuesday. Excluding cars and car parts, retail sales fell 0.4 in July.
The shortage continues to weigh down the automotive industry despite the rise in consumer prices, which increased by 5.4 percent last month compared with a year earlier, the Labor Department’s Consumer Price Index showed last week.
The S&P 500 is down about 0.75-percent this morning as of this writing which, if that sentence means anything to you, you knew already. If that sentence does not mean anything to you, consider yourself blessed if not in money then in some other way, probably.
5th Gear: Pebble Was Big This Year
Some Nazi car won the top prize at Pebble this year, which Raph wrote an excellent blog about yesterday, the responses to which were extremely telling and were really more evidence that we should probably crush every car made before the mid-’80s, save for one example each to show future generations. None of that is relevant, in any case, to the people who go to Pebble, as Pebble was hot this year, with auction sales up over 2019, according to Bloomberg.
Five auction houses brought in a total of $343 million across three days of sales—up 37% over the same array of opportunities in 2019. (Monterey Car Week was canceled in 2020, due to the coronavirus pandemic.)
“It was spastic and bombastic,” says Peter Brotman, a longtime specialty car broker to ultra-high-net-worth clients. Brotman sold four client cars during the annual auction series near Carmel, Calif.
Monterey’s high sales numbers were even more impressive, considering that 25% fewer cars were offered than in 2019. A higher-than-normal sell-through rate of 80%, compared to 59% in 2019, contributed to that result, but so did the recognized high quality of many cars on offer. The average sale price of a vehicle sold in 2021 was $428,004, up from $334,114 in 2019, according to Hagerty.
“The collector car market has weathered the pandemic and then some,” said Brian Rabold, vice president of automotive intelligence for Hagerty, in his auction report. “We forecast 2021 will be the best year ever for auctions.”
I have never been to Pebble, nor do I have any great desire to go, except to play a round of 18. Get these old rich person cars out of here and let’s golf.
Reverse: Sport Ballooning
The 11-story, helium-filled balloon made good progress during the first four days, and the three pilots survived on hot dogs and canned sardines. The only real trouble of the trip occurred on August 16, when atmospheric conditions forced the Double Eagle II to drop from 20,000 feet to a dangerous 4,000 feet. They jettisoned ballast material and soon rose to a safe height again. That night, they reached the coast of Ireland and on August 17 flew across England en route to their destination of Le Bourget field in Paris, site of Charles Lindbergh’s landing after flying solo in a plane across the Atlantic in 1927. Over southern England, their wives flew close enough to the balloon in a private plane to blow kisses at their husbands.
Sport ballooning, it must be said, is cool as hell.
Neutral: How Are You?
I’m going to Detroit, the town of motors, tomorrow, on a big jet plane and then back to New York on Thursday, what we used to call a “business trip.” If you like business trips, you might also hate your family, which is fine. We all have issues.