AD #3254 – U.S. Post Office Pressured to Buy EVs; Problems with PHEV Emissions; Tesla to Build Cathode Factory

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

FORD POSTS ALL-TIME RECORD PROFITS, SORTA
The auto industry is going through a funny time right now. Here’s the story in a nutshell. Chip shortage cripples car production. Car sales drop. Car companies report record profits. And now it’s Ford’s turn to tell its version of the story. It sold 3.9 million vehicles globally last year. That’s a quarter of a million fewer vehicles than it sold the year before. Even so, Ford raked in $136 billion in revenue. That’s $9 billion more than earned in 2020 even though it sold so many fewer vehicles. And it posted a whopping net profit of nearly $18 billion. But as we alerted you a week ago, $10 billion of that profit comes from the value of Rivian stock that Ford owns. So we have to take that out to get a more realistic picture of how Ford did last year. So, on an adjusted basis Ford made a net profit of $7 billion, which is still a pretty good number.

PROBLEMS WITH PHEV EMISSIONS
Last year the California Air Resources Board started raising concerns about emissions from plug-in hybrids. It’s worried about what they call cold starts, which can happen several times in a single trip with a PHEV. And cold starts cause over 70% of the emissions in a car. Now the European Union is going to crack down on PHEV testing. The current test procedure for plug-ins produces emission results that are four times lower than what happens in the real world. Reuters reports the EU is thinking about tightening its testing procedures in 2025. Many European car companies have relied heavily on PHEVs to meet the CO2 standard. But if the new test shows that PHEVs are four times dirtier, they’re going to have to sell a lot more battery electric cars.

POST OFFICE UNDER PRESSURE TO BUY EVs
The Biden administration and the EPA are pressuring the U.S. Postal Service to drop its new generation of ICE trucks, and go with electrics instead. That could be a blow to Oshkosh Defense, which currently has a contract that could be worth up to $6 billion to build up to 165,000 next-gen mail delivery vehicles over the next 10 years. Here’s what the White House and the EPA don’t like. The current Post Office plan would only increase the average fuel economy of its trucks from 8.2 MPG to a paltry 8.6 MPG. And it only calls for BEVs to make up 10% of its fleet. They want the USPS to buy more electrics, but it will only do that, and I quote here. “if a solution can be found to do so that is not financially detrimental to the Postal Service.” Unquote. That makes a lot of sense considering the insight we provided a year ago. We said two of the main reasons the USPS isn’t making a bigger EV commitment is that it needs a lot of chargers and doesn’t have technicians trained to work on the vehicles. But with new money from the Biden Administration’s current climate deal, the Postal Service says it could go 70% EV by 2030.

OSHKOSH POST OFFICE TRUCK PUT THE UGH IN UGLY
Here’s our Autoline Insight. Whatever they do, let’s hope they come up with a truck that looks better than that hideous monstrosity that Oshkosh came up with. It’s a crime against design.

AUTOMATED EMERGENCY BRAKING DOESN’T WORK AT NIGHT
Automatic Emergency Braking with Pedestrian Detection can really save lives. The IIHS says it cuts crash rates for pedestrians by 27%. And crashes with injuries drop 30%. That’s the good news. But when it’s dark outside with no street lights, AEB with Pedestrian Detection makes no difference at all. The IIHS tested eight small SUVs from different manufacturers with AEB and Pedestrian Detection. Some of them, which included single camera, two camera, camera with radar and radar-only setups, worked much better in the dark than others, but no one system proved to be better than another. For example, some single camera systems performed very similar to other camera systems with radar. That tells us some automakers are just better at programming. Here’s our Autoline Insight. The only sure-fire technology that works at night is an infrared camera. Thermal cameras can pick out humans and animals no matter how dark it gets–even in fog, the pouring rain or in the middle of a blizzard.

SEMA HELPS MEMBERS MEET EMISSIONS REGS
Used to be that if you wanted to sell aftermarket parts to modify an engine, you could just start selling them. But then the EPA started cracking down on mods that made an engine spew out higher emissions. So SEMA, the Specialty Equipment Market Association, stepped in to help out its members. It started the SEMA Certified Emissions program that gives its members access to state-of-the-art test equipment and an expert staff that knows how to run it. They can quickly verify if their product meets the EPA criteria, and make it legal for sale in 49 states. To sell in all 50 states requires what’s called an Executive Order from CARB, which takes longer to get. SEMA estimates that its members can start selling parts about three months sooner with the new program.

ADIOS TO CHEAP WAGES IN MEXICO
Here’s something that could be the end of cheap automotive wages in Mexico. GM workers at a truck plant in Silao, Mexico overwhelmingly voted to have a new, independent union represent them. The plant makes the Chevy Silverado and GMC Sierra pickups. Up to now, Mexican unions typically gave management whatever it wanted and didn’t really represent the workers. The average worker at GM’s Silao plant earns $25 a day. Most UAW workers make more than that every hour. So with a new union that will bargain in earnest, look for wages in Mexican car plants to start moving closer to those in the U.S. and Canada.

TESLA TO BUILD CATHODE FACTORY
And in other factory news, Tesla applied for a permit to expand its Gigafactory in Texas to build cathodes for batteries. Tesla wants to open a 1.6 million square-foot building at the site in Austin to make the cathodes. No surprise here. Back in September Elon Musk said the company planned to open a cathode facility as part of its battery cell production at the factory. And the plant started making Model Ys last month.

RIVIAN’S SMORGASBOARD OF DRIVE MODES
When Rivian fully revealed its R1T pickup last year it said it will feature 8 different drive modes that range from Sport to Off-Road Rock Crawl. Well, when you have up to 4 electric motors that generate 835 horsepower and air-ride suspension you can tweak a whole lot of parameters. And a new video from Rivian shows how it all works, including how much torque is being sent to the wheels in the different scenarios. Depending on what’s selected, stability control will turn on and off and the ride height, which ranges from 9.9- to 15.4-inches, ride stiffness and amount of brake regen will all change. Give the video a watch if you’d like to learn more about Rivian’s drive modes, it’s under 4-minutes long.

KIA EV6 SAVES ROBOT DOG IN SUPER BOWL AD
Many people watch the Super Bowl just to see the ads. And while the game is still more than a week away, Kia is already showing off its commercial for the Big Game. It follows the journey of a robot dog seeking out the perfect owner, who just so happens to be a Kia EV6 owner. And when tragedy suddenly strikes the robo dog, the owner and his EV6 are there to save the day. I know. I know. I’ll give you a moment to wipe that tear away.

But that brings us to the end of today’s show. Thanks for making Autoline Daily a part of your week.