What a difference a decade makes. Ten years ago, at the Old Lightning Site, Matt and I spent a considerable amount of internet ink tracking public investments into “green loans” for goofy shit like Solyndra and an inflatable car. Now it’s 2023 and Ford’s getting a huge, huge loan to build battery factories in America in a gigantic electric push, as if the “green” promises made after the Great Recession are having a kind of New Industrial Revolution moment. But expect a lot of chaos along the way, a new report tells us.
A very happy Friday to you all, Autopians. Also on tap as we close out the week: J.D. Power has strong words over “vehicle quality,” traffic deaths are down in America and, yes, the new cars are overly expensive to fix. Let’s get started.
Tesla, Ford Still Poised To Lead America’s EV Race—For Now
One topic of conversation this week has been us wondering just how serious—I mean, really serious—the automakers are about transitioning to electric vehicles. Oh, they’ll say they’re all-in on EVs, but behind the scenes, they have backup plans in case that doesn’t work out; varying levels of reluctance and displeasure about the changes coming; and will likely finance it by selling gas trucks and SUVs for a long time.
Can you blame them? This transformation we’re seeing is the biggest shift the business has seen since the creation of the assembly line. It’d be a lot easier to just not do any of that. In the meantime, we as consumers can expect a good amount of chaos—and plenty of winners and losers.
That’s part of what’s covered in Bank of America Securities’ Annual Car Wars Report, which this time focuses on 2024-2027. (Note: I’m still trying to get a copy of this report myself, so what you’re about to read is pieced together from other news reports. If I get it and anything’s noteworthy, I’ll update this post.)
First off, the report predicts Tesla will keep its EV lead for the next few years, leaving General Motors and Ford to fight for second place. That’s a shift from previous years, Bloomberg reports:
The forecast marks a shift after Murphy said last year that Tesla was likely to be overtaken by Ford and GM in 2025. The landscape has changed due to Tesla’s price cuts, the latest report said. Tesla Chief Executive Officer Elon Musk has been willing to take lower profits as he reduces prices to keep market share.
With affordability an increasingly important factor in wider EV adoption, Tesla is in line to protect its market-leading position through additional price reductions and new models. The report predicts the company will launch a new, low-priced vehicle in 2026 and a revamped Model 3 the following year.
BofA’s analysts say Tesla cut prices much more than they anticipated, and this buys the company some breathing room before it needs to launch new cars (that are presumably more mainstream than the Cybertruck) in 2026. Personally, I’m not sure I agree; I’ve said this before but I think Tesla’s greatest weakness is its ability to launch new products. Can price cuts carry the Model 3 and Model Y another three years, and probably become most people’s first EV?
Over at the Detroit Free Press, they frame the report around what it means for the home team: GM, Ford, and American-Italian-Franco-Dutch conglomerate Stellantis. And it focuses on “replacement rate:” the percentage of the automaker’s sales volume to be replaced with new or next-generation models, which in this case would probably mean at least some gas cars getting replaced by EVs.
According to the Freep, the report puts Ford in the lead, GM in the middle and Stellantis in the back with regard to replacement rate. Coming in last means a lineup of older cars that could drive buyers to fresher competitors:
“We believe replacement rate drives showroom age, which drives market share, which in turn drives profits, and ultimately stock prices,” the BofA Global Research report says.
And while it forecasts a competitive stretch that could challenge profits in some cases, the report also shows a silver lining for the industry in terms of U.S. auto sales, projecting “a relatively steep increase” from 14.3 million vehicles in 2023 to a new peak in the auto cycle at about 18 million by 2028.
Before then, however, the industry will be in a bit of scramble.
“The challenging macro and shifting powertrain strategies are wreaking havoc on product planning. There is a significant acceleration of EV launches, greater uncertainty around new (internal combustion engine) launches, and likely more last-minute product cancellations. The next four-plus years could be some of the most uncertain and volatile for product strategy ever,” the report says.
Emphasis mine up top. In layman’s terms, this means the automakers are probably going to spend the next five years or so really figuring out what the hell’s going on, where the actual product demand is, and shifting plans at the last minute—something this industry isn’t always built to do. Think about it: EV demand is going to depend on so many factors, including battery development, manufacturing costs and charging infrastructure rollout.
More on this if we get it.
JD Power Throws Punches Over Tech, ‘Quality’
“Car Quality Is Getting Worse,” the headlines proclaim on the heels of a new J.D. Power Initial Quality Study report. But is it really? Are these manufacturing/mechanical quality and reliability issues, or software-related problems? I’ve always considered them to be separate things; you can have a very reliable, well-built car with an annoying and broken infotainment system. But maybe I’m wrong. Maybe that distinction doesn’t matter anymore and customers consider those things to be the same. After all, it’s the sum total of their user experience that matters most.
Turns out, it’s a mix of both. Here’s Insider to walk us through the study, which is based on 93,000 survey responses from new owners:
Quality declined year over year across all categories apart from driving experience. The two categories where problems increased the most were features, controls, and displays, along with infotainment.
Door handles, historically a non-issue, have become increasingly problematic, according to the study. They’re particularly troublesome in electric vehicles, the study said.
Quit messing with the damn door handles, car companies! Some things don’t need to be rethought!
Some drivers reported that wireless charging pads frequently overheated and sometimes wouldn’t deliver a charge.
Oh yeah, actually. I drive new cars for work all of the time and the charging pads never work right; they’ve cooked my phone a few times, too.
They also experienced issues with safety systems like lane-keeping assistance and forward-collision warning.
New cars, even bargain-bin models, have more technology baked into them than ever before. Large touchscreens and advanced driver-assistance technology like blind-spot monitoring are becoming the norm in the auto industry.
Basically, you’re now getting what used to be luxury-car problems on more “affordable” vehicles, which used to be much simpler all around.
What a weird world we’re in, too. Of the brands surveyed, Dodge, Ram and Alfa Romeo (????) had the fewest owner complaints; Toyota and Lexus were pretty mid-pack; and Tesla and Polestar ranked at the very bottom. I’m not sure I buy the Alfa report, but sure, whatever.
Traffic Deaths Down So Far In 2023
Now, here’s some good news: at least for the first three months of this year, traffic fatalities in America are down after spiking during the worst of the pandemic—even though we’re actually driving more since 2020. Here’s Automotive News:
The agency estimated 9,330 people died in vehicle crashes in the first three months of the year, down 3.3 percent from the 9,645 fatalities reported during the same period in 2022. The decrease occurred alongside a 2.6 percent increase in vehicle miles traveled.
The first-quarter data marks the fourth-straight quarterly decline in traffic deaths after seven consecutive quarters of increases that started in the third quarter of 2020.
“This is very good news, but we know that far too many people are dying on our roadways in preventable crashes,” Ann Carlson, NHTSA’s chief counsel, said in a statement. “We are taking significant action to reduce traffic fatalities, including moving forward on new vehicle standards to make cars even safer, investing millions of dollars to improve infrastructure and roadway safety, and working with our state and local partners to help drivers make safe decisions on the road.”
What I don’t see in the report is a breakdown of who died in these crashes: drivers, passengers, pedestrians or cyclists. The last few years have been especially brutal for the last two groups. While modern cars have gotten much safer, they are also bigger and heavier, and it may be more dangerous than ever to be outside of a car these days. Still, any downward trend is good news.
Yes, Car Repairs Are Getting Absurdly Expensive
That crazy story we did on the $42,000 Rivian R1T repair may be a preview of what our collective future looks like, Bloomberg reports, looking at the sky-high costs involved these days:
In the UK, the cost of vehicle repairs paid for by insurers jumped by one third in the first quarter; Direct Line Insurance Group Plc warned last month that adverse damage claims would continue to pressure earnings this year. No wonder UK car insurance costs jumped by a staggering 43% year-on-year in May, according to official inflation data published this week.
In the US, car repair prices are increasing at a 20% annual rate, or around five times the overall rate of inflation. One of the better performing auto insurers, Progressive Corp., last month blamed higher than anticipated costs to fix cars for a deterioration in its underwriting performance, adding it would be “aggressive” in raising customer premiums.
Auto electronics may also require diagnostic scans and recalibration following a crash, adding several hundred dollars to repair bills. “It’s not just inflation, it’s really the average repair today has more labor hours on it and likely more calibration on it than an average repair did even two years ago,” Tim O’Day, the chief executive officer of Canadian collision repair chain Boyd Group Services Inc., told investors last month.
The answer is very simple: if you own a car, never crash it into anything. And make sure it never gets damaged, ever. Especially make sure nobody ever crashes into you, either.
Your Turn
What’s the most annoying or most expensive “quality” issue you’ve ever dealt with on a newer car, tech-related or otherwise? Besides an R56 Mini Cooper S with a CEL that would check in on me every few weeks like an old friend, I’ve been mostly fortunate in this regard. But I’ve driven plenty of new cars with weird issues, including one that lost power on the freeway and had its infotainment system shut off repeatedly during driving.
It was an Alfa Romeo if you’re curious.
“The hardware doesn’t break, the software doesn’t break”
Ha.
Haha.
Hahahahahahahahahahahahahahahahahahahahahahahahaa.
Oh I needed that laugh. Thanks.
I’m guessing you work for Stellantis, given your repeated cheerleading of their products and blindness towards others.
UConnect is a fine system (though showing its age), arguably one of the better ones (which is a greater testament to the crumminess of others’ offerings than any superiority for UC), but it still has a high failure rate both for software and hardware. I can’t even begin to count how many customers and clients have had to have their system reprogrammed or (usually) replaced for various issues, the funniest of which are when the cars’ GPS thinks it’s in a different region entirely. They’re not as bad as CUE (ugh!) but they’re hardly the paragon of perfection you’re touting.
Oh, so it turns out that all that unnecessary shit I’ve been complaining about automakers stuffing into new cars for years now is the biggest source of quality complaints? Wow. Knock me over with a feather.
As for body repair costs: I’m shopping for a car right now, and I had a revealing chat with a salesman the other day about how quick insurers are to total cars these days. He had been in the business since the ’80s, and he said that for years and years, the ratio of repair cost to vehicle value that qualified for a total loss hovered at around 70%. The latest figures he had? 54%. This was especially surprising when I remembered, as I told him, that back in 1986, my uncle bought a used 1985 Z28 for $10,500, crashed it, and had it rebuilt by the insurance company at a total cost of nearly $12,000, over his objections.. He was furious they didn’t total it, and naturally, he said it never drove right again.
Most annoying quality issue I have ever experienced in a new vehicle: several years ago, I drove a couple of Sprinter vans for my employer. They replaced them both with Ram ProMasters, which I refer to by their proper name, the Fiat ProBastard. The rear door latches failed on both of them within 3 months. You know, door latches are pretty important on a delivery vehicle. Of course, that’s before you get to the lousy “manumatic” transmission, which spent about three out of every five miles traveled at traffic speeds searching for the correct gear, giving it a driving experience like an overgrown electric golf cart.
This is why I say to everyone: if you use a Sprinter van for work, and it’s getting a little long in the tooth, you would be better off paying for it to go through a frame off restoration then to replace it with one of those piece of shit Fiat vans. Don’t do it. Trust me.
Annoying technical problem in modernish vehicle:
I don’t know if it was the car or the phone at root honestly, but my 2015 Nissan Frontier would suddenly be unable to make a bluetooth connection to my phone. Sometimes you could just disable bluetooth on the phone end and turn it back on and it was fine. But a couple of times we had to have both the truck and the phone forget they ever connected before and start over. It happened on two phones, so I’m inclined to blame the truck, but not 100% sure.
My wife’s Santa Cruz. If someone texts or calls her the radio will turn on. I have declined to pair my phone. Also, the lane keep assist is too aggressive. On a two lane left hand sweeper it will try to nudge into oncoming traffic. Right had sweeper will steer off the road. It’s easy to correct but we shouldn’t have to.
Liked for the metaphor in your last clause, although the whole post was terrific.
I was waxing my R55 Cooper Clubman on a nice dry spring day. While buffing the headlights, managed to create a static discharge that fried an expensive body control module, which meant one of my turn signals wouldn’t turn off. Of course this happened right after my warranty ended. Luckily miniusa decided to cover it.
Good Lord!
Thats one of the weirdest things i’ve heard.Maybe even dumber than anything Lucas could manage
Considering Mini’s owned by BMW I’m surprised the turn signal functioned in the first place.
“I’ve always considered them to be separate things; you can have a very reliable, well-built car with an annoying and broken infotainment system.”
Apparently so do automakers. I work for Lexus, our new software is absolutely buggy as shit, and Lexus just doesn’t seem to give a shit about fixing it at all.
Right after watching a training video where they brag about how fast they completed the recall on the first LS, I get the 10th call of the day from a customer who is missing all the settings on the car because it logged out of their profile for no reason.
I’m a corporate software guy by trade, and the job is basically whack-a-mole where every mole-whacking requires a discussion about whether it is worth it, who is responsible, then maybe priority. I can only imagine that software buried in a car that a customer can’t return is very low priority.
I definitely feel like the quality has gone downhill. Being in the business I swap cars a lot and am starting to wish I had kept my pre/early pandemic vehicles.
2021 GMC Canyon: bought in late 2020, no issues
2022 Acura TLX: headliner rattle that kept coming back, weird door creak, worst infotainment system ever
2022 Grand Cherokee 4xe: Got it a month ago. I just got it back from the shop today. Needed a battery coolant valve replaced, plus 3 recalls done.
I don’t know if Toyotas always did this, but I cannot disengage from cruise control without it canceling CC on my GR Corolla. I press the cancel button and speed drops and CC turns off. To set CC again I have to turn it on again before setting the speed.
Its annoying and it sure doesn’t behave that way on my Lexus.