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Runtime: 10:04
0:00 Tesla Gives Up on Massive Gigacasting
1:22 Tesla Scaling Back New Supercharger Locations
2:00 Tech & Bad Parts Blamed for High Recall Rate
3:02 GM & VW Starting to See NEV Success in China
4:07 Cadillac Backs Off EV-Only Lineup
4:55 Stellantis Wants More Low-Cost Engineers
5:46 EV Scooter Uses ICE Alternator
6:24 Porsche Eyes More Aluminum to Cut Weight
7:07 Toyota Opens New Energy Generation System
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
TESLA GIVES UP ON MASSIVE GIGACASTING
Tesla is giving up on massive one-piece gigacastings, according to Reuters. Last year reports came out that it was trying to come up with a way to cast the entire underbody of a car in one piece. It’s rumored the development was for a new vehicle platform and like its other gigacastings, this would have combined many, many parts into one casting, which reduces manufacturing complexity and costs. But, apparently, now it’s given up on those plans. However, if we’ve learned anything from following along with Caresoft’s tearndown of the Cybertruck, it’s that Tesla is ramping up its use of castings, not just with large front and rear main body structures, but also with smaller parts and pieces, like seat brackets. Tesla revealed in its Q1 results that it’s going to make more affordable cars by combining its current platform with its next-gen platform. So, pairing that with what we’ve seen on the Cybertruck, we believe Tesla will start using smaller castings much more as a way to incrementally cut the number of parts it uses. And you’ll get to see more of that tomorrow when we post John’s latest Cybertruck teardown video with Caresoft president Terry Woychowski.
TESLA SCALING BACK NEW SUPERCHARGER LOCATIONS
Sticking with Tesla, we’re also getting a better idea of the impact of laying off all those people working on EV charging. Elon Musk says it’s going to build less brand new Supercharger locations and will instead focus on 100% uptime and expansion of existing locations. On Tuesday, Musk fired the senior director of EV charging as well as most of her team, which was about 500 people. Based on the articles we’ve read and the comments we’ve seen, this hasn’t been a popular move with both customers and charging experts. But let us know what you think in the comments section.
TECH & BAD PARTS BLAMED FOR HIGH RATE OF RECALLS
Whether it’s accelerator pedals coming apart, fuel pumps failing or another defective airbag inflator, doesn’t it seem like there’s been a lot of recalls lately? Well it’s not just anecdotal. Last year there were 382 recalls that affected more than 33 million vehicles. That’s actually more recalls than 2014, which was a record setting year, it’s just that the recalls affected a greater number of vehicles in 2014. The high rate of recalls is not all due to build problems. Increasingly defective parts from suppliers and new tech that doesn’t have all the bugs worked out are leading to problems. While some of those tech problems can be fixed with over-the-air updates, these recalls are still very costly to automakers. GM, Ford and Tesla spent $10 billion last year on warranty claims and recalls, which was $1 billion more than they spent two years ago.
GM & VW STARTING TO SEE NEV SUCCESS IN CHINA
We’ve talked about GM and Volkswagen’s sales struggles in China, but they’re starting to see some success with their NEVs or New Energy Vehicles. Last month Buick, Cadillac and Chevy combined to sell a little under 9,000 NEVs, which is an increase of over 93% compared to last year. And VW says it sold more than 10,000 ID EVs in China last month, which would be an increase of at least 56%. That also matches the amount it sold in March. Both brands have seen their sales cut in half from their all-time highs and they’ll probably never get back to those levels. But this could be a sign that local automakers might not dominate foreign brands as badly as some expected.
CADILLAC BACKS OFF ALL-EV LINEUP
Like many automakers, Cadillac is walking back its EV targets. The brand previously committed to having an EV only lineup by 2030 but John Roth, Cadillac’s global vice president, told reporters that electric and gasoline powertrains “will coexist for a number of years.” He also said “we will be offering an all EV portfolio” but did not commit to an EV only lineup and that it will be up to the customer to decide. So that likely means Cadillac will sell gas powered cars, including hybrids, beyond 2030. This isn’t too surprising, Last year, it was reported that GM is planning to introduce hybrid models back into its U.S. lineup due to the slowdown in EV demand.
STELLANTIS WANTS MORE ENGINEERS FROM LOW-COST COUNTRIES
Back in March, Stellantis laid off 400 engineers in the U.S. to help cut costs. And now Bloomberg reports that the company is recruiting engineers in countries like Morocco, India and Brazil to replace them. Engineers in the U.S. and Europe can earn anywhere between $150,000 and $200,000 a year including benefits. But Stellantis is paying engineers from those other countries $53,000 or less a year. And now it eventually wants two-thirds of its engineers to come from low-cost countries because Stellantis CEO Carlos Tavares says in order to make vehicles more affordable it needs to cut costs. The company is also dealing with a tough market. Its sales were down 10% in the first quarter which led to a 12% drop in revenue.
EV SCOOTER USES ICE ALTERNATOR
This is pretty clever. The electric motor in BMW’s CE 02, which is like a mix between a scooter and a motorcycle, is actually a slightly modified alternator from some of its gas-powered cars. The alternator comes from 48-volt mild hybrid versions of the 3-, 5-, 7-Series cars, and X Series SUVs, but supplier Valeo made some modifications for use in the CE 02. There it makes 15 horsepower and 40 lb-ft of torque, which provides a top speed of 52 km/h or about 32 MPH.
ALUMINUM COULD HELP PORSCHE CUT WEIGHT SIGNIFICANTLY
Porsche says it could significantly cut the weight of the Taycan with aluminum. The automaker and Alumobility, a consortium of aluminum producers, authored a study that found replacing the steel roof of the Taycan with aluminum could cut the roof’s weight by 40%. And most importantly, it can do so without sacrificing performance or safety. The study also found that switching to aluminum could simplify the manufacturing process because it would reduce the number of production parts being used by 20%. This is especially useful in an EV because automakers can reduce the size of the battery or make batteries more efficient, in order to improve range.
TOYOTA OPENS NEW ENERGY GENERATION SYSTEM
Toyota is celebrating the opening of what it calls a “Tri-gen” system at the Port of Long Beach in California, which was developed with a company called FuelCell Energy. It produces three different products; renewable electricity and hydrogen and usable water. The system was built to support Toyota’s logistic operations at the port, which receives 200,000 Toyota and Lexus vehicles a year. Using biogas, Tri-gen produces 2.3 megawatts of renewable electricity, up to 1,200 kilograms of hydrogen and 1,400 gallons of usable water a day. The hydrogen is used to fuel up incoming Mirai’s and support Toyota’s Class 8 fuel cell trucks operating at the port. And the water is used to wash the vehicles before customer delivery. Toyota says the Tri-gen system is expected to help reduce more than 9,000 tons of CO2 emissions from the power grid each year.
But that brings us to the end of today’s show. Thanks for tuning in.
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@Recalls: I am on the receiving end of a Stellantis recall. The high-pressure fuel pump of my Jeep Wrangler EcoDiesel has had a recall since eight months and they have still not been able to remedy it for lack of parts. My dealership told me that each dealership is allowed to order one set per week. This has been going on for eight months and it is expected that it will take another two months. Let’s see. I have heard this many times before and have been at the dealership several times and then the staff discovered that they do not have the parts although they guaranteed me they would have the parts. Maybe Stellantis should postpone their move to low-cost labor until they are able to run their business.
Companies that lay off experienced engineers to save money are fooling themselves. Inexperienced engineers may not understand all the interdependent relationships between systems which will lead to mistakes, failures, and rework/delays. Let me give you 2 simple examples, on the C6 Corvette it is very difficult to replace the 12V battery. Why, because the engineer who designed the battery box did NOT take into account the battery cables would be in the way over the top of the battery when lifting the battery out of the box. If you are replacing the radiator you have to discharge the AC system because the condenser is attached to the radiator and one of the coolant lines to the condenser makes it imposable to separate radiator from the condenser. If they are dealing with products that can injure/kill people that could lead to huge lawsuits.
I’m not at all surprised by Stellantis’s cost saving measures with regard to engineers’ salaries. When we open the doors to global competition, this is what it produces. It’s not a good feeling knowing someone else is getting picked over you because they cost the company two-thirds less than you.
I have to deal with the exact same thing in my business (architectural illustration) Individuals and small businesses in Eastern countries scooping up rendering work from my client pool because the can easily afford to charge literally 1/10 what I have to charge to be profitable here in the U.S.) Outsourcing is not always about greed. Many times it is about profitability. I learned this years ago also when I tried venturing a product I developed. I first sourced it here in the U.S. But every single production quote I got put me underwater of my target retail pricing model. But by going oversees with production, my numbers came back profitable.
I just hope the savings (however insignificant) are passed 100% on to the consumer.
Tesla probably starting to realize the enormous repair costs associated with mega castings. So, trying to make the entire substructure into a single casting although it might be good for manufacturing is not so great for the end user. Maybe when AV tech is fully developed, and accidents are a rarity they can revisit this idea.
There are many other areas of the car where Tesla can reduce complexity.
Stellantis- You often get what you pay for. Between specs, language barriers and education, outsourcing the engineering will give you exactly what you deserve. Not to mention that added cost of flights back and forth during design reviews, prototype builds and launch’s. If they try and manage that via Zoom calls expect even more mistakes.
Tesla’s decision to “focus on 100% uptime and expansion of existing locations” might make sense for the U.S., southern Canada, western Europe, and China, where they already have installations along the major highways. If they want to be a global company, though, I’d think they’d want to enter areas where they are non-existent, like South America and Africa. Maybe they don’t think there is money to be made in those places.
… if Tavares thinks lower cost engineers are a good way to save money, I would suggest that he look into sourcing senior management from low cost countries. Senior managers make more money than engineers and have less impact on the finished vehicle, so this should be a safe way to save a lot of money. Let’s start with Tavares’s direct reports and see how it goes.
Great idea, Kevin A.
Stellantis only has to look to Dearborn to see how it has worked out. Ford is #1 in recalls consistently for several years. Ford has failed every launch since they started doing their outsourcing. So that is the Stellantis future. It was already a hard sell for people to buy a Stellantis product due to their poor reliability issues. This move could put Dodge/Chrysler/Jeep products into the dustbin of history. Who would want to buy from the least reliable manufacturer experiencing recall after recall? I already avoid their products like they are the plague now.
People seem to buy vehicles they want, in spite of reliability. Land Rover is doing ok, considering their price, even though they are consistently the least reliable brand sold in thr US.
Kevin & Kit — That makes complete since! I understand that the engineers can be paid handsomely, as pointed out in the report today. Yet, I don’t believe they walked into the door making that type of big money. If the their compensation is attached to performance bonuses, the dollars they are taking home, are as a result of the walk they did and it is well deserved! What makes the timing of this a bigger slap in the face, is that now that these engineers have worked hard to produce for Stellantis, the ICE/BEV/PHEV/hybrid vehicle platforms of the companies immediate future, to save company money, Tavares lays them off, to hire less costly engineers! If he was so confident in these low cost engineers, why didn’t he get them before these platforms were developed? Let them design their new Hurricane I6?! If Tavares gave back his yearly salary and only half of the shareholder bonuses and dividends to the company, there would be no change in his current standard of living and the company would be better for it. What Tavares has done, may cause the white collar employees of Stellantis to think seriously about seeing if they can join the UAW!
Do you think auto companies take into account the number of sales lost by laying off key employees such as engineers when they are doing their calculations to save costs? When I got laid off from my engineering position at GM back in 2006 I told anybody that would listen how badly me and my fellow layoffs were treated and at least ten friends and family decided to never buy another GM vehicle as long as they lived, and told their friends and family to do the same. The cascading affect can add up to some big numbers if it goes far enough. To this day I won’t even consider a GM vehicle so that I am not contributing to the pension fund of those who chose to kick me to the curb after over 10 years of exemplary service. And the funniest thing is that the only reason I ever purchased GM vehicles was because I worked for the company and felt an obligation to support them, I never would have bought any of the vehicles I had if it weren’t for them employing me, they were all disasters that spent almost as much time at the dealerships getting fixed as they did on the road.
Ziggy, I know at least 3 people who won’t buy GM cars because they lost part of what they were promised as salary retirees. I don’t know if there is a “cascading effect” going on there.
I have bought 3 GM cars, two Corvettes and a Malibu Maxx because that is what I’d choose over the competition at the time, but I bought a number of GM cars, only because I was a salary employee of GM and felt obligated to drive GM cars to work. Most of my GM cars were reliable enough, but I wouldn’t have bought them, if I hadn’t worked for the company.
With Stellantis, there seems to be a lot of company loyalty with employees in the town where I spend summers. The area is infested with Ram trucks, and various Jeeps. I now have nothing but foreign brand cars, one assembled in the US, and two in Europe. I think most people “buy what they like,” without much loyalty to brand or country of origin.