The SUVs Are Working Really Well For Volkswagen

VW in the U.S. just wrapped its most successful first half of a year in nearly 40 years.

We may earn a commission from links on this page.
Image for article titled The SUVs Are Working Really Well For Volkswagen
Image: Volkswagen

Volkswagen is selling a lot of trucks, BMW wasn’t worried about chips but now is and Audi and Porsche sure are taking a vested interest in Formula 1 for a couple of brands not involved with Formula 1. All that and more in today’s Friday edition of The Morning Shift for July 2, 2021.

1st Gear: VW’s Doing Swell, Thanks For Asking

The 211,000 cars Volkswagen has sold thus far in the U.S. through the first half of 2021 is the most for the manufacturer since 1973. You can thank all its SUVs — particularly the Tiguan and Atlas, plus the electric ID.4 — for that. From Reuters:

The German-built ID.4 hit U.S. dealers earlier this year and sold 5,756 units in the first half, with 85% of trade-ins coming from owners of non-electric vehicles.

“It’s the most profitable car for our dealers,” Keogh said.

The ID.4 goes into production at VW’s Chattanooga, Tennessee, plant in the second half of 2022 and eventually will be joined in the United States by a variety of companion models, including an all-electric people mover inspired by the classic VW Microbus.

Keogh said nearly three-quarters of VW’s U.S. sales were SUVs, which boosted average prices by around $4,000 from a year ago.


Not only is Volkswagen selling more cars than it has in a really long time, it’s also making considerably more money on each one. Sometimes I wonder if consumers will ever wake up and realize how much more they’re spending by opting for a small SUVs like the Taos compared to, say, a Golf, but then I suppose people don’t really care.

Volkswagen’s roster in the U.S. currently consists of nine vehicles. For reference, in 1973 the automaker had the Beetle, Type 2, Type 3, Type 4 and Thing, but it was also on the cusp of introducing next-generation nameplates that would carry it for the rest of the century, like the Passat (a.k.a. Dasher) and Golf (a.k.a. Rabbit). Perhaps history is repeating itself with the Taos and ID line?


2nd Gear: BMW Is Not Okay (They Promise)

It was almost exactly two months ago when BMW related on an earnings call that it was handling the semiconductor shortage pretty well, thanks to strong relationships with suppliers and prudent planning. Apparently, that is no longer the case, Reuters reports — and the dark clouds aren’t lifting as quickly as BMW hoped they would.

Production was being halted at various sites, either on a daily basis or individual shifts, Milan Nedeljkovic, BMW board member in charge of production said, adding that lost output was around 30,000 “units” so far this year.

He added further shortfalls were possible.

“Semiconductor supply is really critical,” Nedeljkovic told reporters at an event to mark the start of serial production of BMW’s iX electric sport utility vehicle.

“The outlook for the second half of the year, too, remains critical. The ... initial assumption, that it will be brought under control fairly soon and be covered more or less in the first half of the year, is difficult.”


The “initial assumption” comment is especially pertinent here. Chipmakers put their production lines on hold for three to six months in the early days of the pandemic, and this backlog really started to come into focus in the beginning of 2021. One research analyst even predicted we could still be feeling the effects of the pinch into 2023. How a few months of downtime turns into two years of bottlenecks is beyond my supply chain expertise to explain, but it seems pretty fishy if you ask me.

As we’ve seen, though, some automakers are still recording record sales, and people aren’t adjusting their spending habits. (If you need to buy a new car I obviously won’t begrudge you, but anecdotally I’m amazed how many of my friends have decided now is the right time to drop cash on a new car they don’t need.)


3rd Gear: PSA — The NHTSA’s New Recall Tool Is Really Sweet

The National Highway Traffic Safety Administration’s recall checker tool just got a useful update in the form of a tool that allows users to break down all of an automakers recalls, rather than just typing in one VIN number or make and model years. There’s a robust set of filters, too, and you now have the ability to export multiple notices into a variety of file types with the click of a button.


This is extremely nerdy stuff, and for the vast majority of people, simply checking alerts for the few cars they own definitely suffices. But if you’re really curious, the new site is powerful, and certainly makes manufacturers’ recall histories and overall reliability more visible to the public. It’s not just for new cars, either — the database goes back more than 50 years, which initially isn’t obvious until you mess with the “report received date” filter. I’m looking forward to all the weird shit folks uncover with this — data lovers rejoice!

4th Gear: GM Is All About Local, Ethically Sourced, Farm-To-Table Lithium

The element of the day, and of probably all days for a very long time, is and will be lithium. General Motors announced a multimillion-dollar investment in California into lithium extraction firm Controlled Thermal Resources, Automotive News reported Friday. Hey, all those Ultium batteries don’t just mine raw materials for themselves, you know.


This will mark a change for GM, as to date it has sourced its lithium from Asia and South America. Per AN:

The lithium extracted by Controlled Thermal Resources will be produced through a closed-loop, direct extraction process, which leads to a smaller physical footprint and lower carbon dioxide emissions than the traditional processes of pit mining or evaporation ponds, GM said in a statement.

The automaker expects its work with Controlled Thermal Resources to lead to more lithium extraction methods that cause less harm to the environment. A significant amount of GM’s future lithium hydroxide and carbonate could be sourced from Controlled Thermal’s development called Hell’s Kitchen Lithium and Power in the Salton Sea Geothermal Field in Imperial, Calif. The closed-loop direct extraction process will recover lithium from geothermal brine.

As GM scales Ultium-powered vehicles, a local, high-quality, ethically sourced supply becomes crucial, Tim Grewe, director of electrification strategy, told Automotive News.

“If it really goes to where we think it can go, and if we collaborate with them and innovate with them, it could be one of the best things we’ve ever been invested in,” Grewe said.


5th Gear: Audi And Porsche Love To Chat About F1 Engines

Saturday there’s said to be another meeting between Formula 1 teams and the FIA on forthcoming engines and the use of sustainable fuels, and once again Audi and Porsche representatives will be in attendance, Autosport reports.

The hope is that the 2025 rules will encourage new OEMs and specifically the VW Group to enter the series, with one source describing the meeting as a “last chance” to convince the German giant to finally make a commitment.

The manufacturer CEOs/chairmen taking part include John Elkann (Ferrari), Luca de Meo (Alpine/Renault) and Ola Kallenius (Mercedes), while the VW Group will be represented by Audi chairman and overall group R&D head Markus Duesmann, and by Porsche CEO Oliver Blume.


Journalists have been bullish that one or both Volkswagen brands will join the grid in 2025, when the new engine regulations are set to take effect. A report back in March from British magazine Car and Tom Clarksonthat Tom Clarkson, the one who runs the official F1 Beyond The Grid podcast and every pre- and post-session interview session on a race weekend — said that there was “every chance” the brands will get involved with the sport.

The question, as ever, is “in what capacity?” If Audi or Porsche is to merely provide engines, there aren’t many teams they’d likely be willing to partner with. McLaren could be an option as Autosport rightly points out, though it’s hard to imagine Porsche playing second-fiddle to its British road car rivals in a combined F1 effort, precedent aside.


That has me personally excited for a full team effort — though probably not from both brands simultaneously. Volkswagen has a couple different options on how it could play this scenario, and brands to play it with. I long for the day we can stop prophesizing about how it’ll go down and actually see an Audi- or Porsche-powered or built car in an F1 race.

Reverse: One Million Served

The millionth Corvette rolled off the production line 29 years ago today, on July 2, 1992. It was a C4 convertible, styled with a white exterior and red interior like the first Corvette, and it was driven away from assembly by Corvette engineer Zora Arkus-Duntov — the dude who wanted to make the Vette midengined long before GM was willing to make it happen.


Neutral: What Are You Listening To?

Personally I’ve been very into this new Tyler The Creator album. I think he raps about Rolls-Royces in every song. He even rides a computer-generated Cullinan monster truck in one video.