Auto File: The U.S. EV Market: All Aboard for 2025

Nu Ride

09/06/2023 16:03

Joe White 
    Global Autos Correspondent 
 

    Greetings from the Motor City! 
 

    Welcome to Friday! You made it! Racing fans are already
starting to celebrate the Centennial of the 24 Hours of LeMans.
General Motors will enter a special “Garage 56” edition of the
Camaro. Is Garage 56 next to Area 51?
    “Ford v. Ferrari” fans like me can dig deep into the
coverage of that fabled 1966 race while waiting for the start of
the 2023 contest. I am intrigued by the “24 Heures Camions” race
– European Semis dueling on a track? Sounds like fun. But that
isn’t until September. I’ll just have to wait.
    You know who else should wait a bit? Americans who are
interested in an electric vehicle. I’ll explain why. Today -
      
    * Wall Street loves the Tesla, GM, Ford charging deals 
    *         Mercedes beats Tesla on automated driving 
    * At Bosch, the car knows you’re drunk 

 

        * The Tesla-GM-Ford Charging Alliance 
    The North American electric vehicle charging business has
been until now a fragmented affair. The best charging system,
Tesla’s Supercharger network, was more or less a walled garden.
    Rival EV manufacturers and the Biden Administration were
committed to charging connector hardware that didn’t work with
the Tesla network. But the networks those “combined charging
standard” or CCS plugs did work with were not that good. 
    As of Thursday at 4:30 p.m., U.S. Eastern Time, the scene
has changed, dramatically.
    That’s when General Motors CEO Mary Barra appeared on
Twitter Spaces with Tesla’s Elon Musk to announce an agreement
that GM will join Ford in adopting Tesla’s North American
Charging System (NACS) plug standard starting with GM vehicles
built in 2025. Tesla will open 12,000 Superchargers to GM EV
drivers starting next year. (GM’s announcement is here.)
    Ford announced its deal with Tesla on May 25. Now, the three
automakers that currently command about 70% of U.S. EV sales are
adopting the Tesla charging system.     
    The charging standard war in the United States appears to
have entered the beginning of its end. 
    Investors judged it a big win for Tesla that Ford and GM
will embrace the Supercharger ecosystem.
    As of Thursday’s close, Tesla’s market cap had increased by
about $165 billion since the day before the charging alliance
with Ford was disclosed. Investors were looking to add another
$35 billion to Tesla’s market cap based on pre-market trading
Friday. It’s another great day to be Elon Musk.
    GM and Ford shares rose as well – though the market caps of
the Detroit automakers remain far smaller than Tesla’s. Barra
told CNBC GM could save $400 million by allying with Tesla on
charging. Not small change. 
    (The industry and investors would really love a deal to
create a global charging standard, but that’s not on the cards
yet. Europe has already committed to CCS, Japan uses still
another type of plug and a senior Chinese government official
said Friday that China should be setting global EV charging
standards.)
    Shares in rival charging networks, such as ChargePoint and
EVgo, sank in early Friday trading. The non-Tesla networks could
lose customers, and face extra costs to be compatible with the
best-selling EVs in the North American market.
    For consumers, the benefits of the Tesla-Ford-GM push to
rationalize North American charging fully arrive in 2025, when
new GM and Ford EVs will have factory-installed Supercharger
compatible connectors. (Starting next year, drivers of GM and
Ford EVs can obtain connector adapters to use Superchargers.) 
    Put another way, if you want an electric Chevy or Ford
pickup that can seamlessly get a rapid re-charge at a Tesla
Supercharger, wait until 2025. (Here’s a look at the difference
between a Tesla plug and a CCS plug.)
    The years 2024 and 2025 are critical because that’s when the
Detroit automakers plan to launch a wave of next-generation EVs
designed to sell at high volume. The muddle over charging
standards and charging network quality has been a barrier to
wider EV acceptance.
    Are there risks for Tesla’s North American market
competitors in buying tickets to Elon Musk’s garden? Sure. These
deals suggest whatever those risks are, the rewards of removing
a consumer pain point and piggybacking on Tesla’s charging
investment are greater. 
 

        * Essential Reading 
    *         U.S. companies face less ESG pressure 
    * Lawmakers want to regulate AI 
    *         Could Tesla sell 375,000 Cybertrucks a year? 

 

        * Has Carvana steered away from the cliff? 
Shares in online used car retailer Carvana went vertical on
Thursday after the company surprised investors with good news: A
forecast of $50 million in pre-tax profits for the second
quarter, well more than analysts have been forecasting.
    As of Friday morning, Carvana shares were up 56% from
Wednesday’s close. Carvana CEO Ernie Garcia, in a presentation
Thursday, credited cost-cutting and promised more.
    Carvana’s Q2 got a lift from increased sales of car loans to
investors. Some analysts worried the Q2 pop is just a one-time
gain from that sale of loans. Another caveat: Positive cash flow
remains a goal for the future. 
 

        * A Mercedes that can drive you to Vegas 
“We were somewhere around Barstow on the edge of the desert when
the drugs kicked in." But no worries – now the Mercedes can do
the driving!
    Mercedes scored a coup in its battle with Tesla for
California customers, winning approval from the Golden State’s
regulators to activate its eyes-off-the road, Level 3 DRIVE
PILOT system on highways in the state. Mercedes will start
offering the Level 3 system on S-Class sedans and EQS SUVs next
year.
    Mercedes beat Tesla to this milestone on the road to
automated driving. Tesla’s “Full Self Driving” Beta is
classified as a Level 2 system requiring driver engagement.
    Nevada had earlier granted clearance for the Mercedes DRIVE
PILOT system, so now Hunter S. Thompson fans could make the
desert dash from Los Angeles to Las Vegas with the help of an
always sober German luxury car.
    Warning: Drivers still have to be sober because they still
are responsible for safely operating the car. So the dope and
booze need to stay in the trunk. 
 

        * Bosch and the next level of driver monitoring 
Speaking of dope and booze, German auto tech supplier Bosch is
developing a next-generation in-cabin driver monitoring system
that fuses camera images and radar data using software that
among other things can detect when the driver might be drunk or
high.
    The system Bosch engineers demonstrated can track eye
movements and tell when those movements correspond with the
woozy fluttering of someone who’s had too much to drink. It’s a
digital version of a cop demanding you track a finger moving
back and forth.
    The system’s main stated purposes are to monitor when a
driver is drowsy or distracted or warn when a child is left in a
back seat. Advanced driver monitoring is already a requirement
in Europe. The U.S. Congress has passed legislation requiring
regulators to consider technology that could intervene to stop
drunk driving. 
    Bottom line: The question is not whether technology exists
to closely watch driver behavior and raise red flags when a
driver is impaired. It’s who can see those flags and under what
conditions. 
    Another intriguing software product Bosch demonstrated
during an event in suburban Detroit: A Vehicle Dynamics Control
software suite that can control braking, steering and handling
independent of the vehicle’s hardware.  
    In theory, someday you could download code that delivers the
ride and handling characteristics of a late 1990s BMW to your
modern electric car. Not that Bosch or any of its customers
plans to do that. But they should. 
 

        * Britain’s AV dreams fizzle 
    The United Kingdom aspires to be a hub for self-driving
vehicle development and production. But those dreams are at risk
because the government has not delivered a promised regulatory
framework to allow widespread deployment of automated vehicles
on British roads, Reuters correspondents Nick Carey and Alistair
Smout report.
    Chances look slim, as the government has not put an AV
proposal on its near-term list of priorities. 
 

        * Fast Laps 
    China will juice the vehicle market with fresh incentives to
get consumers to buy, the government said this week. Beijing
wants to pep up a consumer recovery still sluggish after the
COVID lockdowns. 
 
    Swedish auto supplier Autoliv said it will slash 8,000
jobs.  
 
    Electric car startups 
    Lucid and Fisker separately announced this week they plan to
launch sales in China, the most competitive EV market. Zhù Nǐ
Hǎo Yùn. 
 
    Chinese EV leader BYD is launching a new vehicle brand, Fang
Cheng Bao, or Formula Leopard, to sell off-road and sporty
cars. 
 
    GM will invest $500 million to update the Texas factory that
builds its line of large petrol-burning SUVs, including the
Cadillac Escalade. This brings to nearly $2.5 billion the total
announced investments GM will make to keep combustion trucks and
SUVs rolling into the 2030s. 
 
    Lordstown Motors said it will sue Apple hardware assembler
Foxconn for refusing to go through with a $170 million
investment.
    
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 (Editing by Andrew Heavens)