Sustaining the Auto Industry

Image by Mariestella
Image by Mariestella

Since the Second World War, every decade of American automotive culture has had a defining characteristic. The 1950s were defined by chrome and fins, the 60s by muscle cars, the 70s by the malaise, and so on and so forth. While it is only 2023, a fairly clear pattern has emerged that will most likely be the single defining characteristic of this decade: sustainability. Sustainability can mean a variety of things in the world of automotive, from better materials used in manufacturing to increasing the market share of electric vehicles. The definition of sustainability according to the EPA is “creating and maintaining the conditions under which humans and nature can exist in productive harmony to support present and future generations.” Unfortunately, for many of these prior decades, the acts required to pursue sustainability were accidentally or purposefully ignored by many segments of the automotive industry and American society. However, with increasingly dangerous environmental consequences forecasted by the world’s top scientists, sustainability is now at the forefront of global conversation. Automakers, whether out of a motivation for increased profits or mandates from the federal government, are attacking the issue of sustainability from a variety of angles. The sum total of this effort will in theory transform an industry known for damaging the environment to an industry that actively works to sustain it, ensuring that vehicles continue to be a net positive far into the future.

Image courtesy of history-computer.com

One of the biggest questions surrounding widespread EV adoption is the sustainability of material sourcing. EVs require significant amounts of rare earth minerals (REMs) which are often sourced from less-developed countries. EV batteries are made up of materials such as lithium, cobalt, copper, and nickel, with the vast majority of lithium mining taking place in Australia, Zimbabwe, and Brazil. Popular mechanics reports that the average EV requires 8 kg of lithium to manufacture. With the global available lithium reserve at 22 million tonnes, there is no apparent shortage of material required to construct an enormous amount of electric vehicles. However, as of 2021, the total world production of lithium was 105 tonnes, and by 2030, it is possible that manufacturers will need to acquire up to 450,000 tonnes of lithium per year. More problematic still, lithium mines are extremely water intensive and are notorious for polluting water sources while causing significant damage to local biospheres. As a part of making EVs sustainable, new methods must be devised to reduce the impacts of lithium mining. Luckily, a lithium mine in Snow Lake, Manitoba is taking the lead on the future of EV sustainability.

Image courtesy of Drive Sustainability

The idea behind the Snow Lake lithium mine is to create an all electric mining operation. Positioned next to a hydroelectric power station, Snow Lake Lithium hopes to draw 98% of their power from the dam while similarly not using any diesel burning vehicles to extract or haul materials. Lithium is currently extracted using two methods: hard rock and brine. The hard rock mining process requires less water than brining, and the Snow Lake mine plans to employ this method to save water and reduce contamination of the local environment. In theory, this mine could produce up to 160,000 tonnes of 6% lithium spodumene every year, providing OEMs a sustainable and local source of materials so essential for the next generation of electric technology. Assuming Snow Lake Lithium is able to reach its expected potential, it is not unreasonable to extrapolate that more mines will follow suit, leading towards an overall marked improvement in the sustainability of car battery production and compliance with the Inflation Reduction Act.

Image courtesy of GuideHouse.com 

Going beyond the obvious issues with battery sourcing, OEMs have a variety of other unsustainable practices surrounding material acquisition. An example of this is the amount of leather used for car interiors. In Brazil, the auto industry uses over 30% of all leather hides produced from the country’s cattle ranches, a side effect of the meat industry driving rampant deforestation and destroying millions of acres of the Amazon rainforest. Environmentally sustainable leather could look like buying from more ethical and regulated domestic sources or improving the quality of synthetic materials. Along the same lines, keeping parts manufacturing close to the location of final assembly will drastically reduce the emissions caused by international shipping. Maritime shipping alone accounts for about a billion tons of greenhouse gasses per year and make up 3% of all global emissions by themselves. This does not account for air cargo, trucking, rail or any other way of moving goods across the world. A concerted effort by OEMs and mobility providers to move their supply chains physically closer together is essential to sustainability in the long term and will likely reduce costs as federal regulations around parts sourcing tightens.

Photo by Kindel Media:

OEMs have a myriad of different ways to attack their chronic sustainability issues. Nearly every part of the industry could be made more environmentally conscious in some way without a long term increase in costs. Investment in things like supply chain integration and advanced mining may seem like an undue financial burden now, but by the end of the decade, the payoffs – both financial and environmental – will be abundantly clear. Working towards a sustainable future will be the primary mission for the auto industry for the foreseeable future, and if the right decisions are made, the 2020s will be remembered as the decade of sustainability for generations to come.

Learn more about how the AutoMobility Advisors team can help you and your business seize the amazing opportunities to serve the new mobility market. Click on the link below and get in touch, we’d love to talk with you!

AMA to attend AutoTech Electrification in Detroit

We’re pleased to announce that Automobility Advisors will be participating in the upcoming AutoTech Electrification event in Detroit, taking place on October 17th and 18th. This event is a pivotal gathering for industry experts, innovators, and enthusiasts to come together and discuss the transformative shift towards automotive electrification.

The ongoing transformation of the automotive industry is evident, with the shift toward vehicle electrification taking center stage. This transition is not just about cleaner and more sustainable transportation; it’s about reducing carbon emissions, enhancing energy efficiency, and driving technological advancements. Electrification presents opportunities for job creation and long-term cost savings for consumers, and it’s clear that automakers, tech companies, and industry experts are fully embracing this electric revolution.

The AutoTech Electrification event in Detroit is a cornerstone for staying updated on industry developments, and Automobility Advisors is thrilled to be part of it. We look forward to the networking opportunities the event will provide, enabling us to expand our industry connections and foster collaborations that will shape the future of clean and sustainable transportation. If you’re passionate about the future of the automotive industry and its electrification journey, we invite you to join us at the AutoTech Electrification event in Detroit.

Turing EV Dreams Into Reality: Fleet Edition

Image composition by Mariestella Colon Astacio
Image composition by Mariestella Colon Astacio

The 2020s will one day be remembered as the era of mass electric vehicle adoption. Every quarter, the market share for EVs grows, and it feels like every month another OEM is announcing a pledge to go all electric by the end of the decade. As consumers are urged to switch from ICE vehicles to EVs for private use, it is becoming more and more evident that EVs are the future of commercial vehicles. One of the primary drivers of EV adoption is the notion that doing so will drastically reduce carbon emissions. However, focusing solely on private vehicle sales, most of which are light or medium duty, overlooks the source of an enormous percentage of fossil fuel emissions. Medium and heavy duty vehicles such as semi trucks, box trucks, and buses are disproportionately large contributors to mobile source nitrogen oxide emissions. In fact, Congressional research has found that these types of vehicles emit 25% of all CO2 emissions from the US transportation sector. The mass adoption of medium and heavy duty EVs is an inevitability that the automotive industry needs to continue to encourage and work on in order to eliminate one of the largest sources of carbon emissions.

Image courtesy of Rivian

Currently, one of the most well known attempts at commercialized EV adoption has run into unexpected challenges. Rivian, an EV startup that took the market by storm with its R1S and R1T models, has been engaged in a massive contract for custom electric Amazon delivery vans. In 2019, Rivian and Amazon signed an agreement stating that Rivian was to produce and sell 100,00 electric delivery vans exclusively to Amazon by 2030. However, as of March 2023, Rivian was struggling to keep up production and meet the contractual obligations of their buyers, leading to a loss in stock value and some layoffs. Despite Rivian’s challenges, the demand for commercial EVs clearly exists and continues to grow. Amazon is one of a variety of massive logistics based companies, and their order for 100,000 vans will not be unique as other delivery services like FedEx and UPS move away from ICE vehicles and look to adopt EVs.

Image composition by Mariestella Colón Astacio

Aside from the EV van segment, there is a major push to replace diesel semi trucks with electric power. Earlier this year, the EPA passed a new set of regulations that will require combustion powered semi trucks to have an 80% reduction from current emissions levels by 2027. The technology required to adapt today’s diesel engines to these stringent regulations has been blasted by trucking companies as prohibitively expensive and unfeasible. Diesel truck ownership is becoming less financially viable, and under the terms of the Inflation Reduction Act (IRA), the incentives for adopting heavy duty EVs make it effectively an economic no-brainer. The terms of the IRA provide for the Qualified Commercial Clean Vehicle tax credit, which states that an incentive of up to $40,000 or 30% of the vehicles cost will be provided for electric and hydrogen vehicles over 14,000 Gross Vehicle Weight Rating. Instead of having to outfit very costly emissions control technology to existing fleets which harm the environment, companies will be able to receive significant tax breaks towards EVs. Moreover, the creation of new infrastructure to charge these EVs will be eligible for a $100,000 tax credit. Financially, the incentives to adopt electric technology in the commercial sector are undeniable.

Two Tesla Semi prototypes at a Supercharging station. Image composition by Mariestella Colón Astacio.

In response to these changes, companies such as Tesla, Volvo, Freightliner, and Peterbilt have invested a great deal of time, money, and effort into building semi trucks that meet the government’s new regulations and are eligible for adoption incentives. Tesla is currently producing the aptly named Semi model for PepsiCo, in which around 60 had been delivered by the start of summer 2023. This past week, it was reported that a Tesla Semi traveled over 1000 miles in a single day as a part of a study conducted by the North American Council for Freight Efficiency. Tesla states that the Semi has a range of almost 500 miles, while Volvo’s enhanced VNR truck is capable of going 275 miles on a single charge. Already boasting impressive range and hauling capacity, this first generation of commercial EV combination vehicles shows great promise towards transforming trucking in North America and across the world. 

Image composition by Mariestella Colón Astacio

All across the industry, EVs are solidifying their place as the future of automotive technology. With billions of dollars of investment pouring in from national governments and the private sector, it is abundantly clear that electric technology is here to stay. More and more private and commercial consumers are literally buying into the EV market, and with pressure and incentive to conform to stricter regulations, it is inevitable that EVs will make up the lion’s share of vehicles on the road. The commercial EV segment is on the cusp of explosive growth, with demand increasing and companies working around the clock to turn EV dreams into reality. Only time will tell where the automotive industry goes, but it is nearly certain that electric commercial vehicles are here to stay. 

Image courtesy of Ford E-Transit | Ford Media

Learn more about how the AutoMobility Advisors team can help you and your business seize the amazing opportunities to serve the new mobility market. Click on the link below and get in touch, we’d love to talk with you!

George Ayres moderates a panel discussion on ATSC 3.0 Data Delivery to Automobiles at NAB, Las Vegas

George Ayres moderates panel discussion on ATSC 3.0 Data Delivery to Automobiles at NAB, Las Vegas

Last Tuesday, April 18th, 2023 I had the pleasure of seeing George Ayres, Managing Director of Automobility Advisors, moderate a panel discussion on ATSC 3.0 Data Delivery to Automobiles at NAB. The panel featured some fantastic participants, including Kerry Oslund from The E.W. Scripps Company, Tony Rangel from Sinclair Broadcast Group, Vikas Tandon from Tata Communications, and Angie Yarusso from Deloitte Business Consulting and Services. It was a great opportunity to hear from experts in the industry and learn more about the future of data delivery in the automotive space.

George Ayres, Managing Director of Automobility Advisors, moderates a panel discussion

It was an insightful and productive discussion where they covered a range of topics related to the progress and potential of ATSC 3.0 data delivery in the automotive industry, including momentum, connecting the dots, and commercial roadmaps. Each panelist brought a unique perspective and expertise to the conversation, making for a dynamic and engaging discussion.

Panelist Kerry Oslund, Vice President of Strategy & Business Development at The E.W. Scripps Company


I was particularly struck by the insights shared by Kerry Oslund and Tony Rangel who highlighted the importance of collaboration and partnerships in driving the adoption and success of ATSC 3.0 data delivery in the automotive industry.

Panelist Tony Rangel, Director of Automotive Business Development at Sinclair Broadcast Group


Vikas Tandon provided valuable insights into the potential of ATSC 3.0 data delivery to transform the way we think about and use connected vehicles. Angie Yarusso shared a thoughtful perspective on the role of data privacy and security in the development and deployment of ATSC 3.0 data delivery.

Panelist Angie Yarusso, Specialist Master, Media and Entertainment at Deloitte Business Consulting and Services
Panelist Vikas Tandon, Associate Vice President – Mobility & IoT at Tata Communications


Finally, George Ayres brought a wealth of experience and insight into the broader trends and opportunities in the automotive industry, which helped to contextualize the potential of ATSC 3.0 data delivery in this space.

It was a fascinating discussion, and I feel privileged to have been there to hear from experts in the industry and learn more about the future of data delivery in the automotive space. Thanks to George and the panelists for sharing their insights! l look forward to continuing the conversation as the industry works to drive the adoption and success of ATSC 3.0 data delivery in the automotive industry.

The Weakest Link

Photo courtesy of Mariestella at AutoMobility Advisors
Photo courtesy of Mariestella at AutoMobility Advisors

This is part two of a three part series on the development of EVs and their supporting infrastructure in the United States.

It is said that a chain is only as strong as its weakest link. In terms of the transition away from internal combustion engines towards electric vehicles, charging stations are the said “weakest link.” As essential as gas stations used by their ICE counterparts, EV charging stations are a fast developing but greatly lagging piece of the EV adoption puzzle in the United States. According to the White House in February, there are currently about 130,000 charging stations across the country which service three million or so EVs. Five years ago, the number was a little over half of that. While growing steadily for the last 10 years, the need for car charging stations is on the cusp of an explosion. The Biden Administration’s Inflation Reduction Act (IRA) actively encourages and incentivizes the mass adoption of both light EVs and medium/heavy duty commercial EVs, which will require significantly more powerful and larger charging stations. If the US is to expect tens of millions of new light EVs, medium duty EVs, and heavy duty EVs to hit the road by 2030, substantial steps need to be taken to make sure that there are enough charging stations to meet the massive demand. 

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The first step will be to provide funding for companies to build the required number of charging stations to meet this demand. S&P Global, a NYC based financial analytics company, estimates that by 2027, the United States will need 1.2 million level 2 chargers and 109,000 level 3 chargers to meet the EV electricity demands. This is a stark increase from current capabilities, and at an estimated need of a 10 to 1 ratio of EVs to charging stations, it will take quite some time to reach these goals. Fortunately however, the Biden administration just this past week announced that over $2.5 billion in funding will be made available to local, city, and county governments for the express purpose of building more EV charging stations and expanding the availability of chargers to underserved areas. U.S. Secretary of Energy Jennifer M. Granholm said in the White House press release that “extending EV charging infrastructure into traditionally underserved areas will ensure that equitable and widespread EV adoption takes hold,” and will ensure “that charging stations more visible and accessible in our communities addresses the concerns many American drivers have when considering making the switch to electric.”  So already, steps are being taken in the right direction to meet infrastructure demands. 

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The second step for EV charging will be to fix the chronic reliability issues that plague the current charging network. According to a J.D. Power study and recently reported by Automotive News, between Q1 2021 and Q3 2022, failed charging attempts rose from 15% to 21%, and in the last year, nearly 2 in 5 charging attempts were unsuccessful. If the average American is expecting to be able to rely upon an EV to get them from point A to point B, a near 40% failure rate to “refuel” their car will not be sustainable. Reasons for these failures can include out of service chargers, vandalism, software problems, and payment processing issues. These errors are partially caused by the volume of traffic received by each station, with some stations having nearly no downtime at all because of availability issues. This creates a vicious cycle in which there are not enough charging stations, so the ones that do exist are strained to the point where they break, therefore causing less charging stations to be available overall, and so on. To fix the overall problem, some of the resources dedicated to building the new charging stations need to be used to shore up the already existing charging infrastructure dotting the US. 

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The EV charging station situation is not optimal or perfect by any means, but when a revolutionary new technology enters the market, there are always bound to be some bumps along the road towards implementation. Continued investment from private companies and at all levels of government will be required to fix the problems outlined above, but fortunately great funding and emphasis is already being put into this widely acknowledged problem. The goal of the US government is to create a seamless transition to EVs in which charging a car has the same level of convenience as filling a car up at a gas station, and by dedicating a combined total of $7.5 billion to doing so, it shows that the necessary funding and support exist to make it a reality. Stay tuned in two weeks for Part 3 of AMA’s story on the development of EV infrastructure in the United States.

Learn more about how the AutoMobility Advisors team can help you and your business seize the amazing opportunities to serve the new mobility market. Click on the link below and get in touch, we’d love to talk with you!

#evcharginginfrastructure #evcharging #ev #electricvehicles #futuremobility #newmobility #connectedvehicles #digitaltransformation #AutoMobility Advisors

Carpe EV Diem

Photo Courtesy of Fully Charged
Photo Courtesy of Fully Charged

So many things are now happening within the mobility space, all at the same time, that there seems to be some new momentum for change. It’s now getting much harder to see that we might go anywhere but forward. More electric vehicles have been purchased by more open-minded buyers. More fast-charging infrastructure has been deployed. More new EV models are being launched. And more government and local resources have been provided along with policies designed to accelerate more EV adoption.

And as automotive companies change themselves, such as how they are organized (Ford), how they wrestle with becoming software providers (VW), and how they can vertically integrate for the new EV world by buying mining access (all), many other related things are happening too. For example, Ford has told its US dealers that by the end this month they need to commit to being an electric vehicle dealer, with the training and infrastructure Ford requires, or they will only get Ford’s internal combustion vehicles to sell. Sounds like an “ultium-atum” to use another maker’s term. Yet even with this kind of “take it or leave it” approach, the Ford Dealer Council prevailed and Ford agreed to create a middle pathway for smaller dealers to invest, an “EV lite” approach so to speak, so these dealers can sell a few EV’s per month and stay in the game. It’s clear that, at least in the US market, that if we do not respond to rural needs and enable the EV intenders in the middle of America, where there currently are few charge points for example, then we will limit the overall adoption rate of EV’s nationwide.

https://techcrunch.com/2022/09/14/ford-gives-dealers-an-ultimatum-on-ev-sales/

So companies like Ford are using the catalyst of this product change to electric vehicles to modify their sales approach as well. In the surface, it does not seem that a consumers choice of powertrain should change the sales model, but since Tesla and other new EV makers are selling their cars directly, or through an “agency” model, Ford and the other legacy automakers are right to explore this route as well. It’s easy to recall GM’s Saturn brand, which didn’t allow prices to be negotiated, so consumers knew the price before they arrived at the dealership. This worked well enough, but since Saturn’s product plan was starved, no new product meant that Saturn went away, regardless of the sales model.

And EV’s too will live and die by product selection and performance, not sales and distribution models. Consumers will always seek out and find a new product that has great value and exceeds their expectations. Tesla is the EV market leader not because of how it sells its cars, but how they work. While Tesla needs to bring out more accessibly priced models, it’s clear their basic product portfolio, with sedan’s and crossovers, are popular even though they are all at the higher end of the EV market. Having a network of Supercharger stations, that are easy to use, and widely deployed, and recently providing an adapter for owners to use chargers from other companies, means that Tesla continues to enable its new owners to have a positive EV experience.

https://cleantechnica.com/2022/08/26/us-electric-vehicle-market-growing-yet-tesla-still-dominates/

Recent research from JD Power shows that currently over 26% of all new car shoppers are very likely to purchase an EV within the next 12 months. And while Tesla still dominates the brand consideration for these potential EV consumers, Ford, Chevrolet, Toyota, and Hyundai are now right behind. This is because of all the new EV models coming from these companies, like the F-150 Lightning, the Chevrolet Blazer, and the Hyundai Ioniq. New product gets all the marketing money in the automotive business, and when you see enough “EVerybody In” ads (from GM) you might become curious and start to look closer at buying an EV. When we have over 1 in 4 new car buyers saying they are considering an electric vehicle, we are on the cusp of much faster adoption. Actual EV sales are just over 6% in the US market currently, so this means that 4 times more people are considering an EV today.

Maybe the real challenge for the industry is simply not to disappoint these “willing” buyers, and to make sure their questions get answered the first time, wherever they look for information, either online or on the showroom floor. Reducing their “home charger-install anxiety” for these prospects might also be important now, as “vehicle range anxiety” is quickly becoming a thing of the past with 500 mile range EV’s now. Local, familiar, and understanding auto dealers would be great places to get all this selling done. Think about the early days of cell phones, and the “stores” from the cellular carriers. Customers could buy the device, buy the plan, get their questions answered, all with one stop. Of course as the carriers moved to more sales online, and self-service, much of this experience was eroded. We need to make sure the “EV buying experience” becomes easier and easier. Maybe this is part of what is driving Ford and others to “seize the day” and change their approach to EV’s.

Who will benefit? Well, consumers will get new technology vehicles that have lower operating costs, with an easy sales experience. Automakers and suppliers will be able to participate and earn revenue across the ownership cycle, from initial sales and “over-the-air” (OTA) software updates. Dealers will have an opportunity as well, selling generally higher-transaction priced EV vehicles, but still having many service and repair opportunities beyond the powertrain, and perhaps participating in battery recycling and “energy storage systems” (ESS) redeployment of vehicle batteries. Local governments will have cleaner vehicles and quieter traffic. Utilities will have plenty of roving electricity “storage” too. And the planet will have less greenhouse gases contributing to climate change. Sounds pretty good to me. Let’s all “carpe diem” to a greener future!

You can subscribe to the AutoMobility Roadmap for free and continue to follow the dynamic and changing automotive mobility world. If you’d like to engage directly with the team at AutoMobility Advisors, contact us or contact us via Linked In.

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We need to talk about Tesla’s deadly problem

This issue is not covered well enough in the industry press.

As a motorcyclist myself, and someone working to help improve the tech underlying vehicle “perception” and therefore reaction to seeing motorcycles on the road, we need to look more closely at all road users. In a future of Automated Driving that includes EV powered Pods continuously circulating, there will still be some who choose to ride 2 wheels. Autonomous cars that can’t see motorcycles is not acceptable. Thank goodness there are companies like BlueFusion helping to improve how vehicles see in all conditions. https://lnkd.in/ghbjk55D

I support the AMA’s good work educating automakers, autonomous driving technology companies, and the public about this issue, and will continue to do so. 

#cars #autonomousvehicles #autonomousdriving #adas #motorcycles #safety #tech # #future

You can subscribe to the AutoMobility Roadmap for free and continue to follow the dynamic and changing automotive mobility world. If you’d like to engage directly with the team at AutoMobility Advisors, contact us or contact us via Linked In.

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The High Cost of EV Adoption Today

  • Published on July 8, 2022
Photo Courtesy of Libertyplugins.com
Photo Courtesy of Libertyplugins.com

George Ayres

Automotive | Leader | Sales | Marketing | Mobility | Connected | Electric | Autonomous | Shared | Revenue | Growth

18 articles

The transformation of the auto industry from internal combustion engines to battery power is accelerating, no doubt about it. And the infrastructure, charging networks, and government support for this change are increasing. Consumer themselves are listening, learning, and becoming more interested in moving towards EV’s too. The article below describes a recent Consumer Reports survey that said 14% of people would definitely purchase an EV, but twice this number (28%) definitely “would not” consider an EV. What about the 58% in the middle? What will it take to move them? I think the main issue at the moment is not range, charging infrastructure, or fear of new tech. It’s simply cost. EV’s are expensive right now. Too expensive! And it seems things will be this way for at least 3 years. Let’s look at why.

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It’s clear that soon we will have many varieties of electric vehicles available, and some will be more affordable. All OEM’s are moving quickly. Just take a look at the center-spread of this week’s Automotive News (shown below) and you can see that every Automaker is moving faster to transform their product line-up to more EV’s. And States like California are moving to full EV only. But much of this terrific new product development is not helping buyers yet, as the models currently available for sale are all just too expensive.

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For example, the EV market leader, Tesla, has not expanded its model range for awhile, and even the Model 3 starts at $45k. Ford has the F-150 Lightning and Mach E, but they both cost $40k or more, and very hard to get. And yes, the Cadillac Lyriq sold out in a few hours, but it is in very limited production and costs over $60,000 which is much more expensive than the majority of the buyers in the new car market can afford. And because GM is no longer eligible, there is not even an EV tax credit for this vehicle. But GM did recently reduce the price of the Chevy Bolt. So GM is clearly thinking about EV affordability.

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But all of the new EV vehicles are not here yet. And people need to buy something, or upgrade their current vehicle, and can’t wait. Supply is constrained due to the ongoing semi-conductor chip shortage. And component material prices for batteries are increasing, especially for lithium and cobalt, due to the overall growing EV demand. See the article below from Alix Partners, a research firm, outlining the current situation. One key point they mention is this comparison. “At $3,662 per vehicle (in the US), ICE raw-material content is nearly double pre-pandemic levels. This pales in comparison to BEV raw-material content, which is now $8,255 per vehicle. The disparity is driven largely by cobalt, nickel, and lithium prices.”

https://www.linkedin.com/embeds/publishingEmbed.html?articleId=7764712561928756266&li_theme=dark

While new advances in battery technology like “solid-state” batteries promise better range and greater materials supply, these batteries currently cost four times more than standard lithium-ion batteries, exaggerating the current problem. Toyota is well placed to lead in this area, but it will be awhile before we see the majority of vehicles with solid-state batteries.

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Add in rising global inflation, which means you can buy less for the same money, and a war in Ukraine which keeps energy markets volatile, and no wonder consumers are hesitating. While they are paying $5 for gasoline, and sure don’t like it, coming up with the cash for a new EV is getting harder and harder.

For example, the average new car payment is now over $700 per month. Since the cost of borrowing is rising as the Fed raises interest rates to combat inflation, car buyers can either buy less car, or they have to put up more of their income for a car. Since all other prices are also rising, like mortgage payments, groceries, and school supplies, they feel the squeeze.

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And the average car loan length is now six years, which means that consumers that buy ICE vehicles today will be “upside down” a few more years longer, meaning they will owe more for the car than the car is worth. A negative equity situation. We have seen this phenomenon in the car market more than once, and it never works out for the either the consumer or the automaker. It delays purchases and keeps people trapped in their old technology. The average car on the road in the US is currently 12.2 years, which is much longer than historically we have seen. The current financing market dynamics are suggesting this may get even longer. The promise of a new EV will be in the distant future for too many.

https://www.linkedin.com/embeds/publishingEmbed.html?articleId=8622472421372719983&li_theme=dark

So if OEM’s want people to move to EV’s they need to bring affordable EV’s to market. They need to work with the government and their ecosystem to ensure that there is wide penetration of EV infrastructure. And of course the government needs to increase EV incentives and encourage more switching from ICE to EV, and not with just tax cuts. What about helping people pay for installing home chargers? While there is good commitment for this from the current administration, these programs are not yet simple, practical, and easy to access. Why not a “voucher” system for anyone buying an EV from a dealer, or even online, to receive a rebate on the cost of a home charger. Tax credits are hard to access and too far removed from the original cost outlay. Consumers need relief on this cost more quickly.

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Overall consumer will move to electric vehicles, the trend is now inevitable, as product development cycles for automakers are many years long. The ocean liner turns slowly. So we will see lots of EV choices for new car buyers in a few years. And high volume categories like Pick-up trucks will even be very EV competitive. This is all good for the future.

But we need to do some things now to ensure people make the move to EV earlier. I recall the “Get America Rolling” initiative GM introduced 10 days after the 9/11 attacks, when the auto market had become paralyzed. It used 0% financing to boost demand for new cars, boosting the US economy in the process, and by the end of 2001 it had helped sell 1 million more cars. It was like marketing adrenaline.

Given the existential threat of climate change and the need to reduce automotive emissions quickly, let’s find a way to move every current in-market buyer to pick their first EV today, and not wait one more cycle. How about it. Let’s “Charge Up America!” Today!

Learn more about how you can better prepare for the new mobility future and the changes, and opportunities this creates, by contacting us at Automobility Advisors. 

You can subscribe to the AutoMobility Roadmap for free and continue to follow the dynamic and changing automotive mobility world. If you’d like to engage directly with the team at AutoMobility Advisors, contact us or contact us via Linked In.

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The Auto Digital Experience Fight Club

  • Published on June 10, 2022
AutoMobiity Advisors fight club
Composite photo created by Mariestella

George Ayres

Automotive | Leader | Sales | Marketing | Mobility | Connected | Electric | Autonomous | Shared | Revenue | Growth

18 articles

Ok, what happens when you put all the competitors in a room and tell them to start swinging while simultaneously placing bets to pick the winners (and of course the losers) too? You guessed it, a fight club where it’s everyone for themselves. Makes a good movie perhaps, but does it make for a good way to digitally transform the automotive user experience? Are owners, drivers, riders, and fleets better off with tools that only work in one setting, or vehicle, and not in another? Do you need to put on a new pair of digital driving shoes each time you jump in a different car? Well, currently we are witnessing a sort of fight club mindset within car software experience development. It may get a little bloody, so hang on.

First, some boundary, or “ringside ropes” terminology to clarify this discussion. In the battle for the Digital Experience within Automobiles there are many terms, but all eventually come down to the same thing: How the car works when you’re either inside it, or controlling it remotely when outside of it. We can include ideas like “Software-Defined Vehicle” and the in-vehicle “Operating System,” in this mix. And proprietary names like Apple CarPlay or Google’s Android Auto are part of it too. And Amazon Alexa, as a way to control the experience with your voice, is included. And now we can add new names like “Ultifi,” General Motor’s new “end-to-end software platform” that is “designed to unlock new vehicle experiences and connect customers’ digital lives” as their announcement recently said. All of these things are coming together very rapidly, and the gloves have now been taken off all the participants. They used to play nice together, but now it’s getting serious.

For decades of course, only the carmakers controlled how the car worked; how you turned the radio on, adjusted the climate control, or how the car collected data. Then they started working with other companies like Verizon and WirelessCar to enable “telematics,” a way to transmit vehicle information to an off-board platform and for the vehicle to receive instructions “over-the-air” or OTA. Then smartphones came along and customers started to complain that if they actually complied with the local highway safety rules, and did not use or talk on their handheld phone while driving, then the car effectively became a black hole for them. They were “off the grid” in terms of data and communication when they were driving.

Since nearly everyone now relies on text, email, internet, and voice, to do basically anything, the automakers then needed a way to integrate these phones into the car so they could be used on the move without distraction. So Apple was given access to the vehicle and introduced Carplay, and Google was given access and introduced Android Auto. This was a love/hate relationship for most Auto OEM’s because when they give access, they lose control of the experience. Sometimes they forget of course that customers really LIKE their Apple i-phone experience, and enjoying this in their car as well is a good thing for owner loyalty.

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Once the door was open and the tech companies had access, they started pushing on it harder. Many Auto OEM’s have now signed up to let them too, and we’ll see if they are taking a punch in the process. At right is a recent listing from Google about the OEM’s that use the Android Automotive O/S. And just this week Apple made a big announcement about the new CarPlay and its ability to “more deeply integrate with a car’s hardware.” Ouch!

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Here is a view of what they mean. Without leaving the Apple interface you will be able to adjust climate controls, for example, so that you’re not jumping between CarPlay and the vehicle controls, keeping you inside the Apple O/S while you drive. It’s kind of like pushing you up against the ropes and holding you there awhile. From a carmaker point of view, ceding control of the customer experience for actually operating the car must be gut-wrenching. But they have already done it for music and “infotainment” so why not for other functions? But where does Apple stop and the Automaker’s own systems begin? How will GM’s Ultifi, for example, work with Android Auto and Apple CarPlay? What is Ultifi giving up? Who is going to win the fight for control of the experience? It’s a melee today.

Below as great chart from my friends at MotorMindz that shows a few good examples of how some Auto OEM’s are betting on winning this fight themselves. Of course for over 100 years automakers have controlled how their cars got built, but once sold, they were done. The only things they needed to worry about was paying for repairs under the warranty. Now they want to control, or at least participate in, how their cars get “operated and updated” by the first, second, and even third owners. Over the “lifetime” of your vehicle, they want to continuously upgade how your car works, help you enjoy improvements in operations and performance (and charge you for this) and generally make a car like a smartphone, with easy to install OTA updates. But what happens when Apple decides they don’t want to make that change to how the climate control gets adjusted, either because they are not ready or because they are not getting paid to do it? Does the Automaker have any recourse to force them? Giving up control has a downside if you are an OEM.

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Of course, the driver or passenger wants the best experience, so delays in making updates, or incompatibility stemming from a fight for control of the experience, may end up disappointing users, who will remember who’s car worked seamlessly, and who’s didn’t. One of the reasons Apple has been successful across phones, computers, tablets, and even tv’s is the idea of ‘interoperability.’ That means an Apple device will more or less work the same way, whatever the hardware or situation. A seamless user experience, where it would be comfortable for you to use and interact with apps in your friends car, your wife’s car, riding in the back of your daughter’s new car, or even riding in an Uber might make you not even think about how to access the experience. It will just happen. Muscle memory, perhaps.

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Some of the automakers are racing to create not just their own operating systems (O/S) but also their own “walled garden” ecosystems to go along with this. I remember buying a Verizon phone, back in the day, that had a proprietary set of Verizon apps, because Apple had not yet allowed Verizon to access its apps. It was pretty weak, and was quickly displaced by the Apple app store once the access was granted. It seems that AT&T had exclusive rights to the Apple iPhone until Feb 3, 2011 when Apple let Verizon also have it. What if Apple grant’s Ford exclusive rights to the new CarPlay, and GM Ultifi has to make do with the old one? Since no car company wants this situation, it makes sense for them to want to build their own “app stores” to keep their customers happy. But Automaker’s are not (yet) software companies, or app development companies just like a boxer and a fighter are not the same.

And here’s another interesting one. Subaru not long ago told it’s dealers that it had to disable its Starlink connected services in the State of Massachusetts in order to comply with the recent changes to the State’s “right-to-repair” law. As reported by Repairer Driven News, “a key issue in the case is whether it is possible for OEMs to comply with both federal law and Section 3 of the groundbreaking Massachusetts Data Access Law, which requires any OEM with a telematics system to provide an “inter-operable, standardized and open access platform across all of the manufacturer’s makes and models” independent repairers could use, beginning with the 2022 model year. So here is another dimension for automakers to deal with, open access to your O/S in order to allow others to work on your vehicles. Again giving up control. And the automaker is having to modify vehicle features, dynamically, in order to comply with government requests. If Apple or Google were controlling the vehicle O/S could Subaru rely on them to comply?

So what is the solution? Perhaps to win the fight the Auto OEM’s have to surrender to the user’s wishes. Automobiles are just one of the many devices people use in their daily lives, and for more and more of them, cars are simply a necessity to get from one physical place to another, and not a way to self-actualize or virtually move through the world. We have Meta/Facebook, Instagram, Netflix, Zoom, and a billion smartphone apps that can better hold user attention it seems. What people do want is for their personal technology to work together easily, and without effort, and to be able to use it while in their car, and maybe in an even better way. For example, why don’t all window’s function as display screens so that wherever you look, there is your information, or entertainment? Some OEM’s are working on exactly this. And as these users move through the world, they want their profiles and settings to move with them, and they’ll appreciate not noticing the changes that happen in the background. Alert. Adaptive. Agile. Sounds like a good fighter to me.

The Auto OEM’s that create the most open, flexible, and easiest to work with systems, for the most widely used technology and their providers, will win the fight and collect the pot of money. Then they can go home and clean up.

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Expanding EV Charging – Some Practical Issues

Courtesy of Volta Charging

This week General Motors announced plans to invest $750 million to help provide 40,000 new electric vehicle charging stations starting in 2022 through its GM dealerships, and said that 90% of all American’s are within 10 miles of one of their automotive stores. It’s terrific that GM is making this commitment to EV charging in addition to the $35 billion major product investment it previously announced. Let’s look at a couple of the issues they will need to think about to make their charging network plan deliver on the promise.

The Urban vs. Rural Experience

GM has dealers all over the country, serving rural areas most importantly. EV adoption needs to happen in rural places too, but other than home charging networks, there are just not yet many office buildings and retail locations with chargers in small communities. Shown below is a map of a major charging company, Volta, and their current and near-term charger locations. Notice that major metro areas are where these are all going. So GM can fill a valuable need by leveraging its small town dealers to fill in the gaps.

Map Courtesy of Volta Charging

“We want to give customers the right tools and access to charging where and when they need it, while working with our dealer network to accelerate the expansion of accessible charging throughout the U.S. and Canada, including in underserved, rural and urban areas,” said GM President Mark Reuss in a statement.

But there will be a major difference between who is providing charging stations in rural places, with those in urban locations. While most urban and suburban EV buyer’s will have access to a charger in their home, apartment building, or even their office (if they are still going there), and they can now use a myriad of networks, most people may find that charging is an adjunct to a destination they are already visiting. Going to Whole Foods, or a multi-retail location to shop for groceries and other services, and plugging in to top up your car while you are there, may be the normal use case. When presented with a choice within a few miles, of a multiple-charger bank in a food or services retail store parking lot that they already have decided to visit, or a GM dealer that may have more chargers available but only has accessories and floor mats to shop for, the customer may choose the food and services retailer most of the time. So in urban locations, while GM dealers may be great locations for chargers, the customer will need a different experience that most auto dealers provide today. Free coffee is not enough.

For rural EV buyers, it may be terrific that the local GM dealership, which historically supports the town’s Little League Team, Fourth of July parade, and just about every other civic activity, is now the center of the EV charging experience. It would make a lot of sense as well, for these dealers who are sometimes on the edge of town, to partner with the local Wal-Mart or Dollar Store to provide EV owner’s with a free shuttle to these retailers while their car is charged. This saves the stand-alone retailer from investing, and provides them with some captive shoppers for an hour at no real effort. The GM dealer then becomes a mobility center in some ways within the community, and could easily expand on-demand shuttles to other users too. This may be more than the local dealer wants to do, but they will have little competition from banks of retail chargers, unlike the urban dealer. Rural dealers can leverage their facilities and locations to lead on EV adoption in the community, and EV pick-up sales might benefit the most from local dealer’s stepping up to convince traditional buyers that EV’s can be easy to live with. GM dealers have to help GM get the change to happen, one customer at a time.

Photo Courtesy of Hardy Chevrolet Buick GMC in Dallas, Georgia – Go Visit them today!

Cost Differentials

Buyers of EV’s in urban and suburban locations will have many choices for chargers sooner than you think. And many of these chargers will be free for the first 30 minutes or longer. Much of this is because a bank of chargers in an outdoor retailer strip mall can be used for advertising, point-of-sale information, event, discount messaging, or even saturation with a national brand’s messaging. Retail charging locations in urban areas will have lots of ways to subsidize the cost of a charge, and will be competing with each other for visits. Finding and paying for a charger will be relatively simple for the urban EV owner.

Photo Courtesy of Volta Charging

In contrast, it will be awhile before we see many chargers in smaller and rural communities. There may be a couple of chargers, but if they are at the local Chevrolet dealer, then their advertising value accrues to the dealer, primarily, and he or she presumably has much cheaper ways to advertise. So it’s likely that the rural EV driver will be paying more directly for the charge, with less subsidy available. Smart dealers will assess the market penetration of EV’s in their area, using DMV data or other available information, to understand how they can pull in the multiple-brand EV buyers in their community, making “first 30 minutes free” charging or other draws to get the hook-ups they need to make charging successful. Will non-GM EV drivers feel ok to charge their EV at a GM store? I think yes if the experience is safe, easy, and cost-effective. But the cost will not be reduced by advertising in these situations. It will be because the GM dealer thinks creatively about how to attract and serve the community. Since this is something local dealers have been doing for over 100 years, I think they will figure it out too.

Conclusion

We see a divide in our society between urban and rural sometimes culturally. But EV buyers have the same needs wherever they live. They want to find a place to plug in that is safe and cost-effective, and if they can do it while taking care of other things it will be convenient too. I have great faith that the push GM is making to add chargers nationwide, will find great partners with rural dealers as these community leaders change rural resident views on electric vehicles. Maybe The Heartbeat of America just needs a little jolt!

You can subscribe to the AutoMobility Roadmap for free and continue to follow the dynamic and changing automotive mobility world. If you’d like to engage directly with the team at AutoMobility Advisors, contact us or contact us via Linked In.

View and Subscribe to the Automobility Roadmap on LinkedIn here.