Virus Crisis 'Inevitability'

Virus Crisis 'Inevitably' will Hurt Car Dealers' Service Ops 

Automotive Weekly

Virus Crisis 'Inevitability'


The Colorado House on Thursday adopted a bill that would allow Rivian and other electric vehicle makers to sell directly to consumers, one of the last steps before it goes to Gov. Jared Polis. The House's 42-20 vote follows approval about two weeks ago in the state Senate. Senators will need to adopt a technical change the House made to the bill language before sending it to Polis for his signature, which could happen this week. If Polis signs the bill into law, Colorado would allow manufacturers that only build electric vehicles to own, operate or control dealerships, provided they have no franchised dealerships in the state. Notably, the legislation no longer includes a provision that would have allowed any automaker that builds electric vehicles to sell them directly to consumers, following opposition by the Colorado Automobile Dealers Association that led to a compromise in the state Senate. "We don't think that any change was needed in the law," said Tim Jackson, president of the state dealer association, which moved to a neutral stance on the revised bill.

CADA contends that EV makers such as Rivian, which had lobbied for the bill in Denver, already had the ability to open a factory store under current law. Rivian has said the law is ambiguous and the legislation would bring clarity to its ability to apply for a state dealer license.

"We'll move forward accordingly," Jackson told Automotive News. Dealers in the state are "not worried about that competition." James Chen, Rivian's vice president of public policy, said Thursday in an interview that should the bill be enacted, the company will prioritize Colorado as it develops its retail strategy across the U.S. He declined to share specific details about how many stores Rivian might operate in the state or when it would be ready to apply for a dealer license in Colorado but said the company would begin scouting for potential sites in earnest.

Chen has said that Rivian is hesitant to invest in property and commit to long-term leases if it's unclear that the company will be able to obtain a dealer license. Direct sales are part of Rivian's business model since it will build its electric trucks and SUVs to customer specifications and not mass-produced to sell on dealership lots, he said. "I do want to thank the Colorado Auto Dealers Association for coming to the table and recognizing that what we were trying to do was not drive them out of business," Chen told Automotive News. "At the end of the day, this is about consumer choice."

A message was left with a Polis spokesman on whether the governor intends to sign the bill. State Sen. Chris Hansen, a Democrat from Denver and a bill cosponsor, previously told Automotive News the administration was involved in negotiating the compromise language. The administration has said it supports the bill and has made vehicle electrification a priority in the state.

If enacted, the law would take effect at the end of the 90-day window following the Colorado General Assembly's adjournment for the year, according to the bill language. That would be Aug. 5, if the legislature adjourns May 6, according to the bill.

Source: Automotive News


The latest business sector facing financial damage from the coronavirus crisis: auto dealership service departments. That’s according to J.D. Power, which says that as the virus disrupts global automotive supply chains, dealers brace for parts shortages that could linger, undermining recent gains in service-customer satisfaction. Those improvements are reflected in the J.D. Power 2020 Customer Service Index Study.

Source: WardsAuto


Do automakers investing billions in the self-driving cars of tomorrow risk repeating the same mistake they made with electric cars a decade ago? Cutting-edge robotic people-movers from the likes of General Motors, Toyota Motor Corp. and Jaguar Land Rover all share similarly rectangular dimensions with more of an eye toward engineering practicality than sex appeal. Even Waymo, the self-driving arm of Google parent Alphabet Inc., has chosen the lowly minivan as its primary ride for self-driving vehicles. The uniform and uninspiring looks of these autonomous vehicles are coming under criticism for being as much of a turn-off as the no-frills approach automakers took to designing EVs that ended up being slower sellers than hoped. One prominent industry observer ruefully noted in a newsletter recently: “We have collectively arrived at ‘bread loaf’ as the dominant design language for AV concepts.”

More than aesthetics are at stake. While the shuttles these companies have cooked up aren’t meant for retail showrooms, their lack of panache could turn away riders whose driverless dreams had more imagination than a modern-day caboose. To defray costs, even multi-passenger autonomous vehicles will need to charge premium prices over other forms of public transport. Some think they may need to look more like an upscale limousine than a gussied-up city bus. “Who is asking for all of these boxes?” said Tony Posawatz, a former GM executive who developed the Chevrolet Volt plug-in hybrid and now consults for mobility companies. “If the early users are affluent people, they are used to a certain badge and a certain kind of performance.”

Different playbooks

Not all automakers are following the same playbook. Daimler AG’s Mercedes-Benz showcased an ultra-luxurious self-driving concept car called the F 015 in January, though it isn’t aimed at a mass-market audience. Tesla Inc. has vowed to bring autonomy to the masses with the Model 3, but for all the progress CEO Elon Musk is making in other regards, he continues to leave customers wanting with regard to making the controversial Autopilot system as capable as he’s predicted. The increasingly typical AV offerings are toolbox-shaped autos like the Origin shuttle shown recently by GM’s Cruise LLC, the Toyota e-Palette set to debut at the Tokyo Olympics this summer, and JLR’s Project Vector, a preview of vehicles the Tata Group unit expects to be road testing by 2021.

Startup Zoox Inc. has so far shown only concept car frames, but they’re similar in shape to the May Mobility shuttles running around cities in Michigan and Rhode Island, built to putter along at slower speeds. “You squint your eyes and they all kind of look alike,” said Reilly Brennan, general partner at venture capital fund Trucks VC and author of the newsletter containing the bread loaf quip. “There’s much greater room for design character than what we’re seeing,” he said, adding that some aspects are functional necessities, like passenger-friendly sliding doors and rounded corners for sensors.

Automakers are aware it’s already a tough sell to persuade people to abandon traditional cars with steering wheels and the freedom to ride solo. When asked by an event moderator at a recent investor conference what is the biggest obstacles to AVs outside of technical challenges, Dan Ammann, the former GM president who now runs Cruise, said the business case for them could be undercut if potential customers don’t think they’re appealing enough to park their current daily driver. “For the average person in the street today, there’s still a view that self-driving -- and you said it in your opening remarks -- is this thing that’s kind of far out there, and maybe it’s a science project,” he said. “We have an obligation as industry leaders to tell that story and build that sort of societal pull” for AVs.

Room for an upstart?

The sameness also leaves room for an upstart that could do for AVs what Musk and Tesla have done with EVs: namely, beat established players with sheet metal as exciting as the powertrain.

Battery-electric vehicles like the BMW i3, Nissan Leaf and Chevy Bolt all suffered from lackluster styling, among other failings, due in part to their positioning as “compliance cars” -- meaning they were built to meet government mandates, not spark demand. “Musk deserves credit for making EVs something people want instead of simply a miles-per-gallon compliance car like the vehicles GM and other manufacturers put on the market,” said Dean Pomerleau, an independent auto consultant who helped pioneer AV technology in the 1980s. “It really has jump-started the EV industry, and now you’re seeing others playing catch-up.”

Pomerleau said most automakers are focusing their AV efforts first on solving important technology issues that take precedence over design cues and luxurious interiors. “Eventually, once it has become a commodity and everybody has solved the technical problems, you may see more differentiation in styling,” he said. Almost 20 years ago, now-retired General Motors executive and notorious “car guy” Bob Lutz famously ripped into the almost-identical SUVs on the stands at car shows. “With their boxy bodies and trapezoidal wheel wells, they looked like angry kitchen appliances,” he said, describing them as “demented toasters, furious bread machines, and vengeful trash compactors.”

Today, the former GM vice chairman sees the future market for AVs diverging into two segments: anonymous people-movers for the masses, and bespoke private cars for well-heeled buyers. “Robotaxis will be ubiquitous in every urban market, and no one gives a damn what they look like,” Lutz said in an interview. “The other kind of autonomous vehicles will be for open spaces and real driving. They will be for individual drivers and will need more appeal.”

Source: Bloomberg


For years, solid-state batteries have been heralded as the answer to many of the issues surrounding EVs. The battery technology allows for greater energy density, which translates into more range from the same size pack as a lithium-ion battery. The problem has been that the failure rate is far too high after repeated charging. Also, they’re super expensive. But Samsung may have solved the first issue. Researchers at the Samsung Advanced Institute of Technology (SAIT) and the Samsung R&D Institute Japan (SRJ) decided to remove the lithium metal anodes used in solid-state batteries and replace them with a thin silver-carbon layer. It’s those lithium-metal anodes that cause issues with the batteries. They grow dendrites (tiny crystal spikes) that bore through the electrolyte and cause a short circuit during charging. Hence the low life expectancy of a solid-state battery. The researchers say that using silver-carbon instead of lithium metal in a prototype pouch yields a battery with a higher capacity, lengthens the cycle life, and makes the battery safer. The layer of silver-carbon measures only five micrometers thick, but if it can accomplish in the real world what the Samsung team pulled off in the lab, it could substantively change EVs in the future.

The pouch that the team created would give an EV a range of about 500 miles and have a lifecycle of more than 1000 recharges. That's a vehicle with a battery that lasts 500,000 miles. Plus, the battery pack created during the research was 50 percent smaller than a conventional lithium-ion battery.

Before you cancel your Cybertruck reservation or take back that Chevy Bolt EV, this technology is probably years away from making it into cars. Solid-state technology has been the dream of automakers and EV fans for a while. It's promising research, but don’t expect it to appear in showrooms just yet.

Source: Car and Driver


As news broke late last year of the intended merger of Groupe PSA and Fiat Chrysler Automobiles (FCA) N.V., I could almost hear the collective groans emanating from the boardrooms of the auto industry’s big three – VW, Toyota, and Renault-Nissan-Mitsubishi. The union of these two automotive giants is set to create the world’s fourth largest automaker by volume and third largest by revenue. More than the ramped up competition, what this union highlights for me is that automakers are willing to tear up the rule books simply because they realize that the only constant and, indeed, the key to survival will be reinvention.

Source: Forbes


The impact of the coronavirus could mean millions of fewer vehicles sold this year than earlier projections. But a new report from J.D. Power says the industry can recover, although any recovery will be influenced by a "highly uncertain" post-virus economic environment as well as any potential government stimulus and whether automakers offer any discounts. And the decision by Ford, General Motors, Fiat Chrysler Automobiles, and other automakers to suspend production could have an impact on the industry's ability to catch up on production levels depending on the length of that suspension.

Source: Detroit Free Press


The plight of the dealers is not nearly as dire as restaurants and retailers that have been forced to shut down. Since cars still need mechanics to keep running, dealerships have been spared the harshest restrictions that have brought commerce in other segments of the economy to a screeching halt. At dealerships, workers are swabbing the interior of cars with disinfectant wipes before and after they enter the service bay and on the showroom floor, said Rhett Ricart, a Ford dealer in Columbus, Ohio, who’s chairman of the National Automobile Dealers Association. Dealers are reducing hours of showrooms, where traffic has slowed to a trickle, keeping on skeleton crews rather than closing altogether, so that workers continue to get paid.

Source: Bloomberg

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