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Runtime: 9:16
0:57 Trump Admin. to Roll Back, Not Freeze Fuel Economy Standards
1:43 Boxster & Cayman GTS Drop 4 for a 6
2:37 Toyota Supra Gets a 4-Cylinder
3:21 Labor Costs Going Up
4:12 Toyota Invests in Electric VTOL
5:15 Porsche Taycan Turbo S Range Revealed
5:38 Hyundai & Kia to Develop Electric Commercial Vehicles
6:10 Tesla Registrations Plummet in California
6:56 Tesla Wants to Make Chinese-Style Vehicles
7:23 EVs Getting More Incentives
8:09 Candid Conversation with Faraday Future’s CEO
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This is Autoline Daily with the latest news in the global automotive industry.
Before we get into the news we’ve got to tell you about today’s Autoline After Hours. Sandy Munro will be on the show and we’re going to deconstruct the tooling costs of Tesla’s Cyber Truck. As you’ve heard us report, we believe the radical styling of the truck was done deliberately to hold down tooling costs. So how much money could Tesla save taking this approach? Tune in this afternoon at 3 PM eastern time as John, Gary and Frank Markus from Motor Trend bring you some of the best insights into the automotive industry.
Ok, now to the news.
TRUMP ADMIN TO ROLL BACK, NOT FREEZE FUEL STANDARDS
The Trump Administration is backing off its efforts to freeze fuel economy standards at 2020 levels but it’s still moving forward to roll back the requirements enacted during the Obama Administration. The final proposal has been sent to the White House Office of Management and Budget for final review. While the details aren’t public yet, the Detroit News reports that it’s expected to call for a 1.5% annual increase in fleet wide fuel economy average between 2021 and 2026. That’s lower than the 5% increases previously required. While the administration has given up on freezing the rules, the less stringent requirements aren’t likely to satisfy the state of California or environmentalists.
BOXSTER & CAYMAN GTS DROP 4 FOR 6
At a time when most automakers are downsizing their engines, Porsche is going in the opposite direction. The Boxster and Cayman GTS will not be available with a turbocharged 4-cylinder after 2019 because it is being replaced by a naturally aspirated 4.0L in-line six. The engine makes nearly 400 horsepower and when paired with a 6-speed manual transmission, 100 km/h comes in 4.5 seconds. As you would expect, the exhaust had to change and the car’s now come standard with a sport system that enhances the in-line 6’s sound. Other changes include a standard sport suspension system, a 20 mm or roughly ¾ of an inch lower ride height and a mechanical limited slip differential. The new Boxster and Cayman GTS first go on sale in Germany this March.
TOYOTA SUPRA GETS A 4-CYLINDER
In somewhat related news, the Toyota Supra will follow its fraternal twin the BMW Z4 and offer a 4-cylinder option as well as a 6. The 4 is a 2.0L turbo engine that makes 255 horsepower and is mated to an 8-speed automatic. With that setup the car will do 0 to 100 km/h in 5.2 seconds, which is over a second slower than the 6-cylinder version. But what may appeal to some customers is that it’s 220 pounds lighter than the 6. The 4-cylinder Supra goes on sale in Europe in March with other markets to soon follow, but no word yet if it’s coming to the U.S.
LABOR COSTS GOING UP AT GM, FORD & FCA
According to the Center for Automotive Research in Ann Arbor, US labor costs for GM, Ford and FCA will go up significantly under the new UAW contract. GM’s average hourly labor cost is now $63 an hour, but will go to to $71 an hour by 2023. Ford’s average hourly labor cost, now $61, is going to $69. FCA’s cost is now $55 and will go to $66 by the end of the contract. Meanwhile, the non-union foreign automakers in the United States pay about $50 an hour and that will only go to $52 by 2023. These numbers include all labor costs: wages, benefits, vacation time and profit sharing, if it’s offered.
| U.S. Automotive Labor Costs | ||
|---|---|---|
| 2020 | 2023 | |
| GM | $63 | $71 |
| Ford | $61 | $69 |
| FCA | $55 | $66 |
| Non-union | $50 | $52 |
TOYOTA INVESTS IN ELECTRIC VTOL
Another day, another car company announces it’s getting into the passenger drone business. So far Geely, Daimler and Hyundai have announced plans to invest in passenger drones. Now Toyota says it’s getting in on the act. It just invested $394 million in a California startup called Joby Aviation. Toyota will lend its expertise in manufacturing, quality and cost controls for development and production. Interestingly it will be an all electric drone and what people in the business prefer to call a VTOL, which stands for vertical take off or landing. Most other companies developing drones are going the hybrid electric route because they don’t believe that batteries alone can get the job done. So obviously, Joby and Toyota don’t quite see it that way.
There’s a lot of news about electric vehicles today, So let’s get to it.
PORSCHE TAYCAN TURBO S RANGE REVEALED
Last month, the EPA range for the Porsche Taycan Turbo was revealed and it was surprisingly low. Only 201 miles. And now the EPA range for the faster Taycan Turbo S has been revealed at 192 miles. That’s not too surprising since the Turbo S has more horsepower and torque and bigger wheels than the regular version.
HYUNDAI & KIA TO DEVELOP ELECTRIC COMMERCIAL VEHICLES
Hyundai and Kia are investing 100 million euro in a company called Arrival to co-develop electric commercial vehicles. Arrival’s scalable electric platform will be used for small and medium-sized electric vans and other products for logistics, on-demand ride-hailing and shuttle services. Hyundai and Kia say the partnership will help them meet growing demand for eco-friendly vehicles in Europe. Remember, many major cities say they will eventually ban internal combustion engine vehicles.
TESLA REGISTRATIONS IN CALIFORNIA PLUMMET
California is one of Tesla’s most important markets but has it reached its peak in the state? According to a report from Dominion Cross-Sell, which collects data from state motor vehicle records, it found that Tesla registrations dropped by nearly half in the Golden State during the fourth quarter in 2019, compared to the prior year. Nearly 13,600 Tesla’s were registered last quarter compared to over 25,400 the prior year, a drop of 46%. The report says the company may have hit its ceiling in the U.S. because it hasn’t exceeded its 2018 results for five months now. So, it’s a good thing Tesla has its plant in China up and running now, so it can offset sales there.
TESLA WANTS TO MAKE CHINESE-STYLE VEHICLES
And speaking of Tesla in China, the company is planning to open a research and design center in the country, in order to make “Chinese-style” vehicles. Reuters reports Tesla set up a WeChat account to post a recruitment notice but it didn’t reveal where or when the center will open. As we said in the previous story, Tesla needs to boost sales in China, so it makes sense that it would create vehicles to appeal to consumers in that market.
EVs GETTING MORE INCENTIVES
As we’ve reported, sales of electric vehicles are small compared to the overall car market. But there’s a couple of bills that hope to kick start EV sales. The New Jersey Legislature just passed a bill that gives $5,000 rebates for the purchase of an EV with 200 miles or more of range. EVs with less range, including plug-in hybrids, receive a prorated rebate of $25 per mile. Vehicles priced above $55,000 are still eligible for the rebate. And in the U.S. Congress, Representative Debbie Dingell from Michigan, introduced a bill to spend $2 billion annually to develop and encourage adoption of EVs. These incentives are important for EV adoption because as we’ve reported, sales of electric vehicles plunge without them.
CANDID CONVERSATION WITH FARADAY’S CEO
We posted a lot of content from CES last week, but we just put up another video. And if you’re into electric cars and startups we encourage you to look at it. John spent some quality time with Carsten Breitfeld, the CEO of Faraday Future, riding around in the sumptuous back seat of one of their FF91’s. We just let the cameras roll and the conversation got pretty interesting, especially with Carsten talking about his personal experience of leaving his comfy position at BMW and diving headfirst into the chaotic world of startups. You can click on the link to the headline to this story in today’s show notes, find it on the Autoline On The Road section of our website or look for it on our YouTube channel.
But that wraps up today’s show, thanks for watching and please join us again tomorrow.
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John McElroy is an influential thought leader in the automotive industry. He is a journalist, lecturer, commentator and entrepreneur. He created “Autoline Daily,” the first industry webcast of industry news and analysis.
