The Insurance Institute for Highway Safety is a victim of its own success, Jaguar Land Rover might not merge for a little while yet, and BMW is emptying a bunch of money from its coffers. All that and more in the Morning Shift for November 21, 2019.
1st Gear: It’s Time To Raise The Bar
The IIHS, an organization created by the insurance industry, has been crash testing cars (independent of the government) for years now, following the same basic model as everyone else. In the case of its side-impact testing, it would take a car and smash it with a 3,300-pound weight moving at precisely 31 mph. That sounds like a lot, but it really isn’t. My little Lexus wagon, for instance, weighs 100 pounds more than that, and I’m not sure I’ve ever witnessed a single driver do less than 35 mph in a 30 mph zone. People like speed.
But for the past 15 years, the test has worked, in that it’s gotten manufacturers to improve their safety records. In fact, it’s worked a little too well. It used to be that when a car passed the side-impact test with flying colors, it was a cause for celebration. Now, however, passing the test with flying colors has become the norm. It’s more surprising when a car doesn’t pass the IIHS side-impact test.
So the IIHS is upping the ante. Starting today, it’s raising the speed of the test from 31 mph to 37 mph, and it’s adding 900 pounds to the car-smasher, bringing it up to 4,200 pounds. From the organization’s website:
To better reflect the higher-severity crashes occurring in the real world, Mueller and other IIHS engineers began a series of research tests at a higher speed — 37 mph instead of the 31 mph speed used in the current side rating test. They also made the movable barrier heavier, increasing its weight to nearly 4,200 pounds, the average weight of a 2019 model SUV.
“These changes might not sound like a big deal, but the 6 mph speed increase alone produces 42 percent more crash energy,” Mueller says. “Together with the weight increase, the modified test configuration has 82 percent more energy than our current side rating test.”
Automakers are likely to complain, as they always do when someone drags them kicking and screaming into the future. But that’s okay, because the IIHS isn’t a government agency, and thus its tests have no force of law. Instead, if you fail one of its tests, you will have to bear the burden of a great shame and also the likelihood of fewer people buying your cars. THE FREE MARKET WORKS.
If you want to see what a car being smashed looks like but this time with 82 percent more energy, the IIHS will be living streaming a test with the new configuration today at 11:25 AM EST on its Facebook page.
2nd Gear: Jaguar Land Rover Wants To Go It Alone-Ish
Much like shockwaves from nearby supernovae can cause clouds of dust to coalesce and become new stars, the shockwaves of electrification and autonomy (which is still decades off at best but whatever, just go with it, that’s what every automaker is doing anyway) are pushing companies to merge. We’ve seen that with Fiat Chrysler and Peugeot, but weirdly, we haven’t seen that with Jaguar Land Rover. That’s surprising for me at least, because JLR is the smallest mainstream luxury carmaker, and while it’s part of the much larger Tata global conglomerate, Tata hasn’t exactly been coy about its desire to spin it off or sell it to someone else.
But now JLR is saying that it actually doesn’t want to be sold to someone else, and not because no one wants to buy it, no sir. It just likes being independent, thank you very much, though electrification will still require an alliance of some sort, JLR head Ralf Speth told Reuters:
“We feel the pressure” from demands to slash carbon emissions and develop electric vehicles, Jaguar Land Rover chief Ralf Speth said in an interview on the sidelines of the Los Angeles auto show.
But to the question of whether the company and its parent, Tata Motors Ltd. (TAMO.NS) are seeking a merger for Jaguar Land Rover, Speth said: “The answer is no. We can really survive on our own.”
The British luxury sedan and SUV maker is “always open” to discussions of technology alliances and component sharing with other companies, Speth said.
Earlier this year, the maker of Jaguar sedans and Land Rover SUVs agreed with German luxury automaker BMW AG to develop electric car parts jointly.
Jaguar has already said that the next XJ, traditionally the grandfather clock of big luxobarges, will be rocketed into the future by going all-electric.
But I feel like this is good news. The more carmakers are independent, the better for consumers and drivers.
3rd Gear: Germany Fines Its Carmakers For Collusion
Companies generally can’t collude when it comes to buying things from suppliers, because it’s one step from a cartel, which is one step from a monopoly. And in some places around the world, like in Germany, monopolies are still illegal. The German government found that Mercedes, Volkswagen, and BMW were all working together when it came to buying steel. Reuters has the word:
Germany’s cartel authority said on Thursday it was fining the country’s three major carmakers - BMW (BMWG.DE), Volkswagen (VOWG_p.DE) and Daimler (DAIGn.DE) - a total of 100 million euros for forming a cartel to buy steel.
From 2004 to 2013, the carmakers regularly met steelmakers and other companies in the supply chain to discuss uniform surcharges when purchasing steel, the cartel office said.
And while 100 million euros sounds like a lot for a peasant like you or me, but it is a drop in the bucket for these three companies, especially when you combine them all. Let this serve as a reminder that cartels are illegal, but even in Germany they are not very illegal.
4th Gear: BMW Drops $11 Billion On Battery Cells
Speaking of electrification and BMW, BMW just announced it was spending $11 billion (or 392 times the value of its portion of the paltry cartel “fine”) on battery cells, as it plans to build more than 12 full-electric models by 2023, Automotive News reports:
BMW Group has ordered battery cells worth more than 10 billion euros ($11.1 billion) from Contemporary Amperex Technology of China and Samsung SDI of South Korea
The automaker said in a statement Thursday that it had boosted its order with CATL to 7.3 billion euros from an original booking that was worth 4 billion euros. It said the contract would last from 2020 to 2031.
If you thought oil was big business, just wait until the lithium economy really gets going.
5th Gear: Democrats Demand Safety From Autonomous Cars
The way the autonomous car world works right now is that you can pretty much do anything you want, and there are very little consequences if you get it wrong. If that sounds absolutely crazy, considering that a self-driving Uber hit a pedestrian because Uber forgot to include software for pedestrians if they weren’t in crosswalks, you would be correct!
What we need is a real regulatory framework with genuine consequences for automakers who callously get it wrong, but that’s probably years off. Instead, what we have is the Trump administration asking for autonomous car companies to voluntarily self-report their own ideas about safety, but if they entirely choose not to, or if they entirely choose to make things look rosy when they are very much not, then that’s okay, too.
So Democrats in the Congress are instead calling for... not a real regulatory framework. They’re calling to make compliance with some broad guidelines mandatory, and that’s about it for now, the Detroit News says:
Democratic members of the U.S. Senate Commerce, Science and Transportation Committee said those findings should spur the Trump administration to make compliance with self-driving guidelines that have been issued by the Department of Transportation mandatory.
“Over 80 companies are currently testing automated vehicles on the public roadways and we need to know that everyone has safety at the forefront of their decisions,” said U.S. Sen. Maria Cantwell, D-Wash., the top ranking Democrat on the panel.
Some of these self-assessments read more like a marketing brochure than a critical assessment,” Cantwell continued. “So I do think it raises a question about what kind of structure we have in place to make sure that these safety safeguards are not just voluntary and that they have to be meet, and make sure that regulators are playing their role.”
Self-driving safety assessments have been submitted by 17 companies, including Ford Motor Co., General Motors Co., Uber, Apple and Waymo, according to the National Highway Traffic Safety Administration.
While it may seem like I’m being overly dramatic about this, just think about how the timeline on self-driving cars has shifted of late. A few years ago, everyone and their mom was rushing to tout how they would have a self-driving car “next year” or “by 2018" or “by 2020" or whatever. Now, after realizing how difficult it can be to create a real self-driving car that can tootle around autonomously in every situation that a human can, the best assessments we have say that self-driving cars will arrive “eventually.”
That’s because it’s really, really hard. And when things are difficult, someone will always try to find a way to cut corners. Might as well nip that in the bud before more people are killed.
November 1904: Motorised omnibuses replaced horse-drawn cars in Paris, France.
Neutral: What Crash Tests Should They Be Doing?
I’m a big fan of a 65 mph test. I know, I know, to design a car to come through a crash test with flying colors at 65 mph it would weigh more than a tank and be ugly and and and and and and... but, whatever. Thirty years ago a 37 mph crash test with a 4200-pound weight would’ve been unthinkable, and here we are.