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Greetings from the Motor City!
Building cars and trucks is hard. Every detail counts. I was planning on a joy ride last night in my 1961 Dodge Town Wagon - until I saw the drip, drip, drip from a fuel line connection that seemed just fine when I installed it. I had to order a recall. Invisible mistakes like that come in bunches of 200,000 or more in the car business. Who wants in?
Today, GM’s President puts together the pieces of the automaker’s autonomous and electric vehicle strategy, Stellantis’ CEO warns of a battery supply crisis and a look at why the SEC gives Elon Musk a long leash.
Here we go -
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GM President Mark Reuss and a not-so-little red Corvette. (Reuters)
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Inside GM’s strategy to overtake Tesla
General Motors is looking at how to adapt the autonomous driving technology developed for robotaxis at its Cruise unit to pilot delivery vehicles offered by its BrightDrop brand, and someday personal vehicles, GM President Mark Reuss told Auto File in an interview.
“There’s ultimately a great opportunity for that to happen,” Reuss said, asked about whether Cruise and BrightDrop could collaborate on self-driving delivery vehicles. Bloomberg reported on the potential collaboration between the two GM operations May 13. GM has not until now talked about the plans to develop autonomous vans for BrightDrop using Cruise technology.
Autonomous goods delivery got a big boost during the pandemic, and Walmart and other companies wrestling with shortages of truck drivers are pumping money into robo-delivery ventures. Cruise has been testing goods delivery with its current fleet of electric Chevy Bolts.
In the near term, Reuss said GM is “getting ready to really turn on the spigot” of production of human-driven BrightDrop vans for high volume customers. BrightDrop has said Walmart and FedEx are early customers.
Adapting Cruise autonomous driving capability to BrightDrop is one element of GM’s effort to put together its sprawling array of electric and autonomous vehicle initiatives and present them to investors and customers as a whole greater than the sum of Tesla’s parts. That Reuss and GM Chief Executive Mary Barra believe that GM should be worth more than 1/13th of Tesla’s current market cap is a given.
Here are other points Reuss made about GM’s EV and AV strategies during a half-hour talk:
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GM aims to decide by June or July where to put its fourth North American battery plant. “We haven’t finished allocating the products that use the cells” that would come from the new plant, Reuss said. Siting the fourth battery plant in Mexico is a possibility, he said. The key will be finding a location that can efficiently serve more than one assembly plant and product line, he said. “We want that footprint to flex.”
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The decision on where GM’s third electric pickup truck plant will be depends in part on where the fourth battery plant is located. “It’s a four-dimensional chess deal,” Reuss said.
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GM has more work ahead to build its battery material recycling capability toward a goal of re-using 95% of materials. “We have done a good job of securing nickel for the foreseeable future,” he said.
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GM is looking at expanded use of lower-cost, lithium-iron, or LFP batteries, outside of China. “There are applications…that are compelling” in some segments, Reuss said. But “you’re still not dealing with the same energy density” as lithium-ion battery chemistry. GM could use LFP in its Ultium battery platform, which allows GM to put cells of different chemistries in the same pack, he said.
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GM sees opportunity beyond an electric Corvette for novel ways to expand its EV lineup, and offer vehicles in segments where Tesla does not. GM’s Ultium battery cells can be tipped on their sides “to get a lower roof variant,” Reuss said. “We will take advantage of that modularity and flexibility to do lots of different things that you’ve never seen before.”
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The SEC’s “soft” deal with Elon Musk
Elon Musk’s public disdain for regulators, especially those at the Securities and Exchange Commission, is just one way in which the world’s richest person is different from any other CEO.
It turns out, he has had specific reasons not to show much fear for the SEC, according to a Reuters story based on documents and sources.
In 2018, the SEC and Musk agreed to a settlement that required the Tesla CEO to have company lawyers vet his tweets about the company. But in 2019, a federal judge called that agreement “soft” and urged the agency to reach an understanding with Musk about tweets in 2019 that SEC staff believed violated the earlier deal.
The SEC said in a court filing that Musk has not sought clearance for tweets about Tesla at all since the original deal. But so far, the agency merely urged Musk to comply.
The SEC has new investigations of Musk underway, and is under new management since Gary Gensler took over as chair in 2021.
In another, separate Tesla legal matter, a California judge ruled a suit accusing Tesla of tolerating widespread sexual harassment should go to court, and not be resolved through arbitration.
Stellantis CEO warns of a battery shortage
Stellantis and South Korean battery partner Samsung SDI said they will invest $2.5 billion or more to build an EV battery factory near existing Stellantis combustion powertrain plants in Kokomo, IN. Stellantis has now identified locations for all five of the battery factories promised in its March 2022 “Dare Forward” long term EV plan and is focused on execution, Stellantis CEO Carlos Tavares told reporters.
Tavares also had some dire forecasts. The auto industry could find itself short of EV battery capacity in 2024-2025, as manufacturers try to scale up electric vehicle output before the crop of new battery plants planned for Europe and North America can get tooled up to run at full speed, he said.
“There is a bottleneck in the equipment to manufacture the cells,” Tavares said. “Most of that is coming from China.” Later in the decade, Tavares said he expects a shortage of battery raw materials.
Batteries and U.S. unions
The rush by automakers and battery manufacturers to expand EV battery production outside China and South Korea is fueling one of the biggest investment waves the auto industry has seen in decades.
In the United States, many of the new battery and electric vehicle assembly plants - like most of the “transplant” assembly operations Asian and European automakers built during the 1980s, 1990s and 2000s - are locating in states where unions are weak. Stellantis’ choice of Indiana fits that pattern.
Officials of the pro-union Biden administration - starting with Biden in South Korea, and on Wednesday his Labor Secretary, Marty Walsh - are turning up the pressure on automakers to welcome union representation of these new operations. But that depends on workers voting to join a union, and so far, the United Auto Workers’ efforts to organize big auto factories in the Southern United States have failed.
Stellantis and Ford pay up
Stellantis has agreed to plead guilty to criminal conduct and pay $300 million to resolve a U.S. Justice Department investigation of cheating on diesel emissions tests involving Ram pickups and Jeep vehicles, Reuters reports. The investigation involved 2014-2016 vehicles made by then-Fiat Chrysler Automobiles. FCA merged with Peugeot to create Stellantis in 2021.
The settlement is one more knock-on effect of Volkswagen’s Dieselgate emissions cheating scandal. That led regulators around the world to dig more deeply into the technology automakers use to pass government pollution tests, and along with Tesla’s rise, propelled the industry toward electric vehicles.
Separately, Ford agreed to pay $19.2 million to resolve investigations by 40 U.S. states and the District of Columbia that it exaggerated the fuel economy performance of pickups and hybrids. Ford was not required to admit wrongdoing as part of the deal.
Renault seeks partners in combustion
Renault has received proposals from potential partners interested in sharing ownership of its combustion engine operations once they are separated from a future Electric Renault, sources told Reuters.
Offloading a stake in a future Carbon Renault, if a deal materializes, could free up capital for a future Electric Renault to invest in closing its EV technology gap. Note the key words: “If” and “could.”
The charging gap
A study by insurer Allianz finds that investment in charging infrastructure in Europe and the United States is lagging far behind the projected growth in sales of electric vehicles.
The Biden Adminstration’s infrastructure bill promises $7.5 billion to expand EV charging in the United States. That won’t be enough and legislative and regulatory battles lie ahead over regulations that govern private sector investments in U.S. EV charging.
This week, big truck stop operators, convenience stores and other retailers announced they have formed a lobbying group called Charge Ahead Partnership. Their agenda: Convincing state utility regulators to change rules they say give a big edge to electric utilities in setting up charging stations.
The Chip Show isn’t over
Toyota said it will cut global production by 100,000 vehicles in June because of parts shortages.
Toyota’s action and others like it led forecasters at J.D. Power and LMC to drop their outlook for global vehicle output for 2022 by 1.7 million vehicles to 80 million cars and trucks.
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AV truck venture powers up
Solo Advanced Vehicle Technologies, a startup developing an electric, autonomous Class 8 truck, has a deal to source battery packs from Michigan’s Advanced Battery Solutions. Solo CEO Graham Doorley, formerly of Waymo, will test the waters for Series A funding this summer.
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A Moskvich and friend. (Reuters)
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Moskvich is back! Who’s excited?
Moscow’s Mayor has a big plan to transform auto assembly operations left behind by Renault into a revival of the Soviet-era Moskvich car brand. Muscovites are….somewhat interested? There are fans - and some even wear Moskvich T-shirts. But others do not remember Soviet Automotive Iron so fondly.
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