How Subaru Hacked The Mind Of The Average Car Buyer

As a professional car reviewer and a recent Subaru owner, I am always a little surprised at the exuberance everyone else seems to have for the brand. I’m not alone. Many, if not most, of my automotive peers seem to feel this way. Yet, talk to a regular person and the feelings they have for Subaru are strong. Talk to a new Subaru owner and those feelings are even stronger. I call this the “Subaru Effect.”

I was reminded of the Subaru Effect this morning when I saw that Consumer Reports named Subaru as its overall #1 brand, beating out BMW. How did it happen? It’s worth going deeper into both the Consumer Reports methodology and Subaru’s approach to the car market for this morning’s Morning Dump. Similarly, people tend to think of electric cars as simpler and more reliable, but reality and expectation are quite far apart as Consumer Reports found in a recent study.

Tesla has its own aura, though the light from that aura seems to be dimming a bit and so Tesla is aggressively leasing vehicles to try and keep its sales going. This will probably work for a while, though we’re going to run into a shortage of buyers until batteries or infrastructure get better. Infrastructure is slow, so perhaps new battery tech is the answer.

Happy Friday, let’s do this.

Subarus Are Just Well-Marketed Economy Cars, But That’s Ok

Do people love Subarus because “loving” a Subaru was a key part of the company’s marketing for the last decade, or is the advertising an actual reflection of the company’s user base toward the brand? I’m genuinely not sure.

The arc of Subaru in my lifetime is fascinating. As a child, my grandfather had a reliable Subaru wagon he used to drive me up and down the Texas coast. It was just a decent economy car. As a teenager, the rally exploits of Colin McRae helped make the Bugeye WRX the car to own… and eventually crash into a tree. Somewhere around college the brand somehow came to represent both flat-billed AWD enthusiasts and the outdoorsy/crunchy/granola REI Co-op set.

While the company still does make a WRX and even a BRZ, it’s now mostly a brand for normal people who want an economy car that doesn’t necessarily feel like an economy car. It’s quite brilliant, really, and it continues to work. Put AWD and some body cladding on an economy car, give it a little lift, and suddenly everyone who wants to kayak buys one. The brand also cleverly plays this up as it gives a ton of money to national parks and animal foundations. By not being a car for everyone, like Toyota or Honda, the brand has been able to cultivate a perception that’s attractive to a ton of buyers.

It even worked on me as, in 2016, I purchased a Subaru Forester as a family car that was safe enough, had AWD, and wasn’t too expensive.

The first couple of years were fine, though I eventually came to regret buying it due to its poor fuel economy, boring driving characteristics, and a seemingly endless series of small but expensive or annoying repairs it needed. Based on talking to other older Subaru owners I’m not alone in this, though there are plenty of Subaru owners who did not have this experience. This might be a case where I’m in the minority.

This might explain how Subaru went to the top of the Consumer Reports brand list, where it replaces BMW as the top brand by a single point. The rest of the top five are Lexus, Porsche, and Honda. At the bottom are Dodge, GMC, Land Rover, Rivian, and Jeep.

How does CR put this list together? Here’s the publication’s explanation:

We rank automakers based on their vehicles’ average Overall Score—a combination of our road-test scores, safety ratings, and predicted reliability and owner satisfaction data. This provides a definitive number to help consumers see which brands shine and which might be best avoided.

I want to note a couple of things here because I know the people at CR and have visited the company’s test facility in Connecticut. Many of the contributors and editors are sharp drivers, experienced wrenchers, and owners of quirky old cars. That’s not necessarily the CR audience, so the rankings are skewed toward the average CR member, which someone on Reddit described as “a support group for people who are bored out of their minds by their cars” yesterday.

Maybe, but CR has a huge readership to survey and buys the cars that it tests, going to great lengths to disguise themselves so automakers can’t send them a specific vehicle. Enthusiasts might not agree with the rankings, but the publication’s methods are unique in this industry.

[Ed Note: Consumer reports scores are a big deal in the Auto Industry. One of the strangest moments in my engineering career happened when I poked fun at Consumer Reports during a meeting in which an engineer was discussing us (i.e. Fiat Chrysler) making sure that we designed our vehicle to satisfy a Consumer Reports metric (yes, automakers design their cars around CR testing!). I, a car enthusiast, said something like “We really want to design our car based on boring Consumer Reports,” and the engineer (an older guy) said something along the lines: “If you don’t understand the importance of Consumer Reports, let’s go outside right now and I’ll show you the importance of Consumer Reports.” I think the guy wanted to fight me for me poking fun at CR? It was extremely, extremely weird. -DT]. 

Looking more closely at Subaru you can get a sense of why the brand ranks so highly. First up, the brand’s road test score is high. Again, let’s go to CR to explain:

“The road-test score is an amalgam of a model’s driving experience. It factors in power delivery, handling agility, braking performance, ride comfort, noise isolation, seat comfort, controls’ ease of use, and fuel economy,” says Gabe Shenhar, associate director of Consumer Reports’ auto test program. “For EVs, the score also reflects range, charging time, and ease of plugging and unplugging. Brands that produce well-rounded vehicles that are capable in multiple areas are ranked highly.”

Subaru doesn’t make a lot of big, heavy crossovers and trucks, and instead makes fairly comfortable cars that handle reasonably well. While this may be skewed towards normal drivers, the lack of bigger and heavier vehicles has clearly helped Subaru’s road test score average. Other brands in the top four are BMW, Audi, and Porsche. Chrysler, which only makes the Pacifica, is also up here in sixth, so that tells you how these measures are weighted.

While reliability varies a lot from model to model, Subaru doesn’t make a lot of different vehicles and there’s a lot of platform sharing. Owners of Subaru who are CR members report the fewest issues after purchase, so Subaru is now at the top of the rankings for “Predicted Reliability,” ahead of Toyota, Lexus, Honda, and Acura. When it comes to used-car brand reliability, Subaru ranked much lower at 9th, which is a little closer to my experience. On “Overall Satisfaction” Subaru also only came in 8th, being great at nothing, but good enough at everything.

This is a kind of amusing outcome and goes to show what level the idea of a car matters more than the reality of the car and that the “Subaru Effect” is strong. People who just bought Subarus report few issues and are excited about the prospect of owning a Subaru. Overall, though, people who have had a Subaru for a while are less satisfied than BMW or even Chevy owners. Even more amusingly, used Subaru owners, on average, end up with a “reliability verdict” worse than Nissan, Volvo, and Buick.

And while Subaru isn’t the most economical car company when you look at individual models, the lack of trucks does mean that Subaru’s CO2 footprint is relatively low. The addition of Toyota’s hybrid systems to Subaru vehicles will be a huge improvement here.

Subaru got mad at us when we pointed out the Crosstrek Wilderness had the wimpiest skid plate you’ll ever see, even if we liked the vehicle overall. That was a car enthusiast complaint as clearly there are a lot of Subaru owners who are just Subaru enthusiasts (the brand is selling well). You know what? There’s nothing wrong with that. People being enthusiastic about their vehicles is what this place is about, right? [Ed Note: There’s a fascinating book titled “Where The Suckers Moon” all about how Subaru built its powerful brand starting with a cheap, tinny little mini-car from Japan. Worth a read! -DT]. 

I think “love” does really make a Subaru a Subaru. Soon after buying a Subaru I also became an REI Co-op member and bought a big tent and started going camping. Was I brainwashed? Maybe. Sometimes a little brainwashing is nice.

PHEVs And EVs Still Have Reliability Issues According To Consumer Reports

There’s this idea that electric cars, having less complicated drivelines, are somehow less likely to break than their gasoline counterparts. That’s not quite true. Companies have been making gasoline cars for 100+ years and have gotten quite good at it. Electric cars are new and there are basically no startups making ICE-powered cars, meaning that most of the new startup car companies are making EVs.

From Consumer Reports again:

“While they remain extremely fuel-efficient, today’s hybrids also deliver reliability that is similar to conventional gas cars, despite their added complexity,“ Fisher says. On average, hybrids have a similar number of problems as cars powered by internal combustion engines (ICE).

[…]

Plug-in hybrid electric vehicles (PHEVs) are more of a mixed bag. As a category, they have 70 percent more problems than ICE vehicles. The ability to drive locally solely on electricity but still take long trips without range worries makes PHEVs attractive. But having two distinct powertrains—electric and an internal combustion engine—increases the chance for problems.

Several PHEVs are even less reliable than their conventional counterparts, such as the Mazda CX-90 PHEV, which scored well below average, while the regular CX-90 is below average. The BMW X5 PHEV, Lexus NX PHEV, and Toyota Prius PHEV each score just average, while the regular X5, NX, NX hybrid, and Prius all score above average.

Overall, CR found that PHEVs had 70% more problems than ICE or HEV counterparts, while EVs had 42% more problems. This is an improvement over previous numbers for both powertrains as companies get better at making these vehicles. Rivian, which is a startup, had by far the worst reliability.

Tesla Is Getting Into The Leasing Game To Juke Sales

While Tesla once had what amounted to a monopoly on EVs in the United States, the brand now suddenly has a lot more competition. As you can see in the graphic above, one of the ways brands get curious buyers into electric cars is leasing.

The Inflation Reduction Act also helps. One of the giveaways to the auto industry in the IRA was the ability for automakers to take $7,500 off any electric car that’s leased with no restrictions on where the vehicle comes from, what it costs, or how much money the customer has. This has been huge.

In an effort to keep its market share, Tesla has aggressively cut prices and offered extremely low financing (the company is super rich and can afford these activities). Now, Tesla is trying to make leasing more attractive by allowing people to buy out their leases, whereas before Tesla leasees had to return their cars.

Per Automotive News:

“Tesla’s lease penetration has gone way up,” said Tom Libby, a senior analyst at S&P Global Mobility. “They are getting more and more aggressive because they need to — and because they have the financial resources to do so.”

Leasing a Tesla seems like a good deal, especially given that Tesla values vary so much due to all the price-cutting and the risk of a new model. This is all part of a growing trend of Tesla saying it isn’t going to be a normal car company and then doing more normal car company things.

Does SSB + SIB = The Future Of EVs?

Lithium batteries in either NCM or LFP form will continue to dominate the car market for years to come, but perhaps there’s something better than cells or pouches filled with lithium-based liquid electrolytes.

S&P Global Mobility has a “BRIEFcase” paper out today about the possibility that both sodium-based batteries (SIB) and solid-state batteries (SSB) could provide the market with what it needs to get that next level of penetration. Sodium is cheap and abundant and SSBs are more energy-dense, though both technologies have drawbacks:

SIBs are likely to compete with LFP batteries, as their energy density is approximately 160 Wh/kg, compared to around 200 Wh/kg for LFP. This lower energy density, alongside a shorter life cycle, limits SIBs primarily to low-cost, entry-level vehicles.

[…]

Despite the advantages, several hurdles exist for SSB adoption. The use of lithium metal anodes, which can lead to uneven plating and dendrite formation, poses risks to battery integrity. Additionally, solid electrolytes are less conductive, potentially limiting power output, especially in colder conditions. In some cases, external heating is necessary, particularly with polymer electrolytes.

SSBs are also five times more expensive than lithium-ion batteries, though with time that price will come down. Sodium batteries will also likely improve as more investment goes into them.

What I’m Listening To While Writing TMD

Is it weird that my favorite version of Alice In Wonderland might be the version portrayed in the video for “Don’t Come Around Here No More” by Tom Petty and the Heartbreakers? The book is super messed up if you take the time to read it and this video captures both the disorientation and the creepiness quite well.

The Big Question

What do you consider to be the overall best car brand selling cars in America right now?