AD #2864 – Rivian Moving Operations to California; Apple Updates CarPlay App; Lexus NX Already Showing Its Age

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

RIVIAN MOVING OPERATIONS TO CALIFORNIA
Autoline has learned that Rivian is going to move most of its operations out of Michigan and over to Irvine, California where it just bought a huge facility. Rivian will do most of its design, engineering and technical development there. It will keep some employees in Michigan to finish up current work, but all future programs will be done in Irvine. One source tells us that RJ Scaringe, the CEO, wants all the tech people in one place. Right now Rivian has facilities in Plymouth, Michigan, in Irvine and in San Jose, California. Another source tells us that a lot of people in the Michigan facility are hopping mad. Rivian executives told them that the company was three to four times ahead of where Tesla was at this point in its history. But they feel that all the thanks they get for making Rivian so successful is getting broomed out the door.

NASCAR SHOWS SUPPORT FOR BUBBA WALLACE
Wow, did you see the NASCAR race at Talladega yesterday? It was an exciting race, but the big news is that before the race started, the entire NASCAR community of drivers and crew, walked down pit lane with Bubba Wallace’s car. And he got a warm and lasting embrace from none other than Richard Petty, his team owner. Bubba is the only black driver in the Cup series. He’s the one who got NASCAR to ban Confederate battle flags. And he’s very vocal about the Black Lives Matter movement. But on Sunday, someone left a noose in his garage–a symbol of racial hatred. That’s what prompted the entire community to rally behind him. NASCAR says it will track down who ever left the noose and will ban them for life from any NASCAR event. It’s really impressive to see this kind of support for Bubba. In fact, I think it’s unprecedented in any sport.

And hey, be sure to join us for Autoline After Hours on Thursday when our guest will be Jim Owens, the marketing manager for Ford Performance. That’s the part of Ford that handles the GT, all the high performance Mustangs, the Raptor and the ST and RS models. No doubt you have questions you’d like us to ask him, so start thinking about them. And join Gary and me for some of the best gearhead talk in the industry.

VW SAYS MEXICAN WORKERS TEST POSITIVE FOR VIRUS
Automakers are seeing mixed results getting their operations back up and running. Volkswagen reported that 2% of its workers in Mexico tested positive for coronavirus. It started sending them back a week ago and says it “will remain focused on training and preparation for the start of manufacturing.” While other automakers have opened facilities in Mexico, the city of Puebla, where VW’s plant is located, has been one of the hardest hit by the virus.

TOYOTA PRODUCTION SLOWLY RETURNING TO NORMAL
Meanwhile Toyota says it will make 10% or 71,000 fewer vehicles next month than it planned to before the coronavirus hit. But that’s better than the 20% drop it saw in June. However, the return to normal will be slow. The Japanese automaker still has planned line shutdowns as well as operating some plants on one shift and says it expects to see similar results for August.

APPLE UPDATES ITS CARPLAY APP
Apple CarPlay is getting updated. We think the big news here is that owners will be able share digital car keys with other people, just by sending what is basically a text message. Of course, Tesla’s have been able to do this for years. This feature will first be available on BMW’s made after July 1st and owners will be able to start the car with the app. All someone has to do is place their phone on the smartphone tray and press the start button. Apple says more vehicles that have these abilities will be coming next year. While the Apple CarPlay screen will look mostly the same, there are new apps for parking, ordering food and EV charging. Apple Maps will now even plan out special routes taking charging points into consideration.

PORSCHE IMPROVES 911 CABRIOLET’S CLIMATE CONTROL SYSTEM
Along with the new Porsche 911 Cabriolet comes a new climate control system. Closed-top cars typically just use an interior sensor to control temperature, but Porsche slowly suppresses that sensor as the top is opened. Once fully opened, the system starts taking data in from the engine, soft-top, doors, seats and sensors throughout the car. It’s looking at variables like outlet temperatures, outside temps, and coolant temperatures as well as engine and vehicle speed. It processes 350 signals in half-second intervals in coordination with twenty external and twenty internal interfaces. The climate control system then sets what it thinks is the right temperature, fan speed and air distribution, so all drivers have to do is drive.

HYUNDAI CONSIDERING BATTERY JV WITH LG CHEM
Hyundai is going to strengthen its cooperation with LG Chem. Reuters reports that the two want a new joint venture in Indonesia to build battery cells for future electric vehicles. It would be the first for Hyundai and is seen as a move to challenge Toyota’s lead in Southeast Asia.

WHAT WILL YOUR CAR BE WORTH IN THREE YEARS?
Automotive Lease Guide helps automakers figure out what a car will be worth in three years. The companies use that info to come up with what they can charge for lease payments. It’s what they call residual values. On Autoline This Week, Eric Lyman, the Chief Industry Analyst at ALG, gives his advice on what automaker’s can do to improve their residual values.

Eric Lyman, Chief Industry Analyst, ALG
“The number one thing that we see in this time period is incentives. So, if you can minimize your incentives, you’re not going to put that downward pressure on your used vehicles. It’s very common sense. You’ve got a 4 year old vehicle versus a 3 year old model, same milage, everything, people are going to pay more for that 3-year old, right? So, 3 to 2, 2 to 1 and 1 to new, right? So, when you lower the price of that new vehicle it pushes down the 1, 2, to 3 year old vehicle. We call that the Pass Through. So, if you put a thousand dollars of cash on the hood of a car, I’m going to give away some of our secret sauce right here, we see about $500 to $550 of erosion in a comparable 3-year old vehicle. Now, the kicker here also is, why do you incentivize and put cash discounts on your car? Probably because your MSRP, your price, is too high. So, if you can lower your MSRP, you can lower your incentives, you get a double bonus because you’re not hitting that dollar value in the used market by discounting. And you also have a lower denominator for what the industry uses, which is the percent residuals. So, the percent residuals is the dollar value in 3 years divided by the MSRP. So, you lower that pricing, you make it appropriate. And you look at Subaru. Subaru has been a perennial winner in the past of our residual value award. Why? Because they’re matching their production to consumer demand. That allows them to minimize their incentives and they have exceptionally strong residual values as a result. And there’s a lot of other things they’re doing right but at the baseline that’s the number one thing they’re doing to support their residual values.”

You can watch that entire show right now on our website or on our YouTube channel.

LEXUS NX ALREADY SHOWING ITS AGE
We just had a Lexus NX hybrid in the Autoline Garage. Anytime you get in a Lexus you know you’re getting into one of the best made vehicles in the market. All the independent studies show that, and have for decades. But the NX also shows how fast automotive technology is evolving. Even though the NX debuted as a 2015 model it’s already showing its age. For example, at a time when most cars have gone to electronic gear shift buttons, the NX still uses a manual lever. And it feels notchy, especially trying to shift out of Park into Reverse. I found myself struggling with it a bit. The same goes for the door handles. The inside handles have a detent point that feels like it snaps when you reach it, instead of opening slickly. One of the modern touches in every Lexus model is a scratch pad that you use for selecting items on the console screen, such as changing radio stations. The scratch pad controls a cursor on the screen and while some people like it, I do not. It’s too easy for the cursor to overshoot or undershoot where you want it to go, especially while you’re driving down the road. I much prefer a rotary knob. From a driving standpoint the NX hybrid delivers a luxury ride. But I found the engine to be quite loud when you accelerate hard enough to get it to downshift. Now keep in mind here that I’m nitpicking. That’s what you do as a car critic. You try to find any weaknesses in a car. In the case of the NX it’s not so much that there are weaknesses. It’s just that the state of automotive technology is moving forward more quickly than in the past, and the 5-year old NX is starting to show its age.

But that wraps up today’s show, thanks for watching and we’ll see you again tomorrow.