Tesla’s Model 3 Is A Challenge That Has Only Just Begun

Here we are now, entertain us

Way back in 2006, Tesla Motors CEO Elon Musk laid out his vision for his electric-car company in a blog post promising that its six-figure luxury cars would be succeeded by increasingly affordable vehicles. Ten years later, it’s here in the form of the Model 3.

Musk described the vehicle at its unveiling in California on Thursday night as “the final step in the master plan, which is a mass-market, affordable car.” Already, 115,000 people have plunked down $1,000 deposits to order the car two years before it’s available.

Public enthusiasm and anticipation are once again being driven up to levels the rest of the auto industry could only hope to generate.

Beyond the hype there are a number of warning signs that indicate this intense excitement may ultimately lead to disappointment and even Tesla’s ruin.

Read more at The Daily Beast

Don’t Feed The “Ban Driving” Trolls

They see me trolling...

Cars and the people who love them have taken a bit of a trolling in the last week, as autonomous car car firms and the people who love them become increasingly convinced that a sea change is in the offing. The trolling began with a Buzzfeed article that told car fans to “go f*ck a tailpipe” if they think their love of driving outweighs the moral obligation to reduce the 1.2 million lives that are lost each year in cars, and things took off from there. The latest salvo, from Fusion, argues that driving should be made illegal within 15 years. Though self-driving cars are unquestionably the most consequential challenge to face cars in their more than hundred years as a cornerstone of modern society, the conversation around this massive opportunity needs to become a lot more pragmatic and constructive if we’re going to make the most of it.

[Continue Reading]

Everyone’s A Bad Driver (Except Me And My Autonomous Car)

In the good old days we worried that other humans were amoral instead of worrying that robots are amoral...

In the good old days we worried that other humans were amoral instead of worrying that robots are amoral…

When news broke this week that autonomous cars operated by Google and Delphi have been involved in 12 crashes since they began testing, the reaction was predictably breathless. Ever since the technology was announced, commentators have been obsessed with the technical and ethical shortcomings of the robot chauffeurs that Silicon Valley insists are the solution to the some 33,000 road deaths that take place in the US each year.

As driverless technology continues to advance, these fears won’t simply go away; on a psychological level, humans seem wired to fear anything that diminishes our sense of control, even if that sense of control is an illusion. This psychological barrier, irrational though it may be, demonstrates a crucial reality of the transition from cars to autonocars: developing technology that improves on the dismal safety record of human drivers is far easier than re-organizing social and individual values that have evolved over the hundred-year history of the automobile.

[Continue Reading]

Is China Merging Its “First” and “Second” Auto Works Into A Car Kaiju?

Preparing for the storm?

Preparing for the storm?

Consolidation has been the law of the auto industry ever since Ford’s assembly lines unlocked the brutal logic of scale, but fears that the US and Chinese markets may be cooling have automakers even more anxious to grab quick growth by merging. Last week, Fiat Chrysler Automobiles CEO Sergio Marchionne gave voice to the industry’s building anxiety by all but apologizing for his industry’s low rate of return on capital and threatening to explore mergers with Silicon Valley firms if no automaker wanted to acquire it. Marchionne’s position may be more desperate than some of his better-established competitors, but his basic logic is resounding across the auto industry.
When trading in shares of the Chinese automakers First Auto Works and Dongfeng (known until 1992 as “Second Auto Works”) were halted this week, the market’s initial read was that a merger between two of China’s biggest automakers was in the works. Dongfeng issued a swift denial of any merger plans but the Chinese state council shook up leadership at the two state-owned automakers, replacing the chairman at each with a man who had previously served at the other. With its automakers outmatched even in their home market, China appears to be pushing two of its “big four” manufacturers closer in hopes of creating a national champion with the scale to take on the global majors.

[Continue Reading]

FCA Feels The Crunch

Stuck in neutral... (courtesy: Bernstein Research)

Stuck in neutral… (courtesy: Bernstein Research)

Ever since Sergio Marchionne offered the auto bailout team a home for a bailed-out Chrysler, his Italo-American hodgepodge has been held together with bootpolish, high hopes and strong demand for trucks and SUVs. Had the Jeep and Ram brands been spun off to any other automaker, the Fiat, Chrysler and Dodge brands would almost have certainly ended up in a bankruptcy sale. Instead the House of Chrysler’s two perennial profit centers have found themselves stuck propping up failing mass market brands, just as they were under Cerberus and Daimler-Chrysler management. In the meantime, Chrysler’s cross-town rivals have improved their cars enough to push their truck-powered profit margins towards the 10% level in North America.  But despite strong growth in sales growth, volume and mix, FCA’s North American margins are “bizarrely low” according to research by Bernstein. And their research shows that the bootpolish is really starting to wear thin…

[Continue Reading]

It’s (Not Even) About Ethics In Automotive Journalism

Advertisement or just plain old "car content"? Or is there a difference?

Advertisement or just plain old “car content”? Or is there a difference?

The first time I ever watched “The World’s Fastest Car Show,” I was on an airplane. I can’t remember the airline, but when I took my seat on the flight, an episode showing a shootout to crown “The World’s Fastest Sedan” was playing on the seatback screen in every row. At the time I didn’t think twice about it, assuming it was simply an advertisement for the winning Dodge Charger Hellcat. I’d previously seen a similarly-produced segment featuring the Lincoln MKS “competing” for the affection of a bunch of actors portraying luxury car buyers, and that was unmistakably advertising. After all, everything that runs on those seatback screens pre-flight are clearly paid-for advertisements.

So imagine my surprise this morning, when Jalopnik’s Editor-in-Chief Matt Hardigree tweeted a link to a Kinja Post from “The World’s Fastest Car Show” which stated that the segment I had seen on that airplane was “banned” from Motor Trend’s YouTube channel.

[Continue Reading]

Why CES Scares Auto Writers

 

So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark—that place where the wave finally broke and rolled back.” ~Hunter S Thompson

Yes, Virginia, CES is the Most Important Auto Show. Want to know why? Because it isn’t a car show at all. I know, I know…. this is confusing stuff. Hang out for a minute though, and all will be explained.

[Continue Reading]

GM Korea: The Twilight Empire

I met a traveller from an antique land
Who said: “Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed:
And on the pedestal these words appear:
‘My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!’
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away ~Shelley, “Ozymandias”

Ed note: Jordan Terry of Stone Street Advisors recently asked me on Twitter what I thought of the “bad” situation at GM Korea, noting that it seemed “underreported.” Having written about the subject in the past at TTAC, that was hardly a surprise: not much hard reporting comes out of GM’s “International Operations” black box. That said, there is a broader context here that is underreported, and which I will try to lay out here…

General Motors Korea, formerly GM-Daewoo, has been a key design, engineering and export hub for GM’s global empire since the early 2000s. Specializing in smaller cars, developed and produced at lower price points than GM’s European Opel division, GM Korea was the main conduit for many of GM’s developing-market efforts, as well as the “home room” for many global products. For the perennially small-car- and cost-challenged GM, Korea was the key to offering affordable small cars for export to developed markets like the US and Europe in complete form, as well as in the form of CKD kits for developing market operations like GM Uzbekistan and GM Egypt.

But GM Korea’s long-term problems with union unrest, currency volatility and domestic market sales declines are catching up to it, creating a financial crisis just as it becomes increasingly expendable to the GM Mothership. GM’s deep alliance with China’s SAIC Motors has made GM Korea all but irrelevant to its strategy, and as The General plots its increasingly China-centric future it’s clear that Korea is losing out. With the loss of key export markets and future development work, GM’s once-crucial Korean empire is fading into obscurity and financial woes.

[Continue Reading]