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Joseph White
Global Automotive Correspondent joe.white@thomsonreuters.com
Greetings from Munich - another of the world’s great Motor Cities. I’ll be here through Wednesday at the Reuters Events Automotive Europe 2022 conference. My aim is to deliver the Auto File at the same time as usual, but apologies in advance if the time zones and a busy conference agenda get in the way.

Today, prices for new vehicles in the U.S. market head toward a record, India wants safer vehicles and a $300,000 Cadillac asks if the world is ready.

Here we go -
New trucks cost a lot. What would you pay for this beauty? (Joe White. Reuters)
No recession for new car prices
Investors and auto industry executives peering into the gloom for recession signals won’t find one in new vehicle prices. The average price of a new car or truck sold during the first half of 2022 is on track to hit a record $44,907, according to J.D. Power/LMC Automotive’s latest forecast.

June sales, due out on Friday, are expected to be down 19%, finishing off the worst six months for U.S. light vehicle sales volume since 2011, when the economy was still climbing out of the wreckage of the Financial Crisis. The annualized selling rate for new vehicles for June could be a recession-level 13.1 million vehicles, down from 15.4 million a year earlier and more than 17 million in June 2019, J.D. Power/LMC projected.

If you just consider sales volume, the market is already in a slump. But J.D. Power/LMC forecast automakers and dealers could report record profits. Record profits and recessions don’t go together.

You’re fine. There’s a lot of cognitive dissonance to unravel here.

If you are of a certain age, you may think that number for the average new vehicle’s selling price is crazy. That’s what a new house used to cost. You’re right. As recently as September 1976, the median price of a new home in the United States was just under today’s average for a new vehicle.

The latest vehicle price numbers also look high when compared to median incomes. The U.S. Census Bureau reckoned that median household income in the United States was $67,521 in 2020 - down 2.9% from the year before as the pandemic disrupted the economy.

But half the country’s households make more than that median figure. Automakers are responding to the grinding supply chain crisis and inflation by building high-priced vehicles, pruning low-volume sellers and focusing on America’s most affluent customers - the upper half of the upper half. (Cases in point: Automotive News reported Sunday that Mercedes could cut as many as seven niche models from its U.S. lineup. German papers said the company will phase out its relatively low-priced compact A-class and B-class models in Europe.)

The next question is how long this can go on before something has to be done about the factories and people who depend on Americans buying 3 million to 4 million more vehicles than they are buying today.
India gets tired of safety excuses
The Indian government said it plans to launch a five-star safety rating system for vehicles sold in the country, and is proposing that automakers install at least six airbags in new vehicles, up from two front airbags currently required.

Indian automakers, led by Maruti Suzuki and Hyundai, have not kept pace with the safety technology advances required in wealthier markets, and have resisted proposals to require more crash protection and crash avoidance technology as too costly for the market.

Indian politicians are reacting to a chronically high toll of highway accidents and deaths. The National Crime Records Bureau reported more than 133,000 highway deaths for 2020.

As in the United States, where highway fatalities are also rising, technology alone may not solve the problem. The Indian NCRB report found that nearly 85% of highway deaths in 2020 were the result of driver behavior: Speeding or careless driving. (See page 14 of the PDF linked above.)

Hybrids for India and Africa
Toyota has countered critics of its go-careful approach on electric vehicles with the argument that battery electrics are too expensive for developing markets. Now, Toyota and partner Suzuki are putting their view into action, announcing plans to launch production of a hybrid SUV in India, with ambitions to export it to other less wealthy markets including Africa.
Cheap gas at all costs
Top Biden Administration officials met with oil refiners Friday and discussed ideas for lowering prices at the pump, such as easing requirements for “summer” blends of gas designed to reduce warm weather smog. The meeting followed a White House proposal to suspend temporarily the collection of federal gasoline taxes.

Heading into the July 4 holiday week - peak season for long road trips - the Administration moves are a reminder that when push comes to shove, U.S. energy policy pivots around keeping gasoline prices low for a population that prefers F-150s and Jeep Grand Wagoneers to Fiat 500s.

Someday that could change as gasoline vehicles are replaced by electric vehicles. But not between now and November.

The U.N. backs high-speed, automated highway driving
Vehicles that meet certain performance standards should be allowed to pilot themselves autonomously at 130 km per hour (80 miles per hour) on highways, according to new guidelines issued by an arm of the United Nations that works on vehicle safety.

The rules provide a framework that countries can adopt to clear a path for so-called Level 3 autonomy - which translates to technology that allows a driver to take hands off the wheel and eyes off the road on certain roadways when conditions allow. (Think, freeways or autobahns on a clear day with no snow.)

Previously the UN body endorsed Level 3 operation only up to a sedate 60 kph.
An Einride Pod in action. (Reuters)
Einride will be trucking in Tennessee
Swedish automated truck startup Einride said its remotely-piloted Pod trucks will start hauling loads in a test project with appliance maker GE Haier in Tennessee later this year. Einride said it received approval from U.S. highway safety regulators to operate its electric trucks with no human driver aboard. No one who sees one of Einride’s futuristic android trucks will mistake them for a regular semi.


The Cadillac Holy Cow
Cadillac could charge as much as $300,000 a piece for its hand-built Cadillac Celestiq sedans, the Wall Street Journal reported.

GM has not released pricing for the electric flagship sedan, but it has pointed to a six figure price with certain details of the limited-volume car. Those include a “smart glass” roof that can give each of four passengers their own level of shade, and a roster of more than 100 3D-printed parts.

The whisper number for the price tag is stunning - but Cadillac sells Escalade SUVs that top $100,000. Almost as noteworthy is the sedan body form.

The Celestiq is another sign that there’s at least a flicker of fresh interest in sedans among automotive designers and product strategists.

Volkswagen last week teased the launch of a new electric “upper middle class” sedan with a concept called ID.Aero. Mercedes last week boasted of another 1,000km-per-charge journey for its Vision EQXX electric vehicle which is both a showpiece for the company’s effort to outpace Tesla’s battery efficiency, and a sleek update of the four-door coupe idea Mercedes pioneered with its first CLS model in 2003.

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