We are approaching a tipping point as more and more models, and even brands, are getting close to an even mix of Hybrids/EVs and traditional gas-powered cars, or, in some cases, selling more hybrids than non-hybrids. The biggest domino to fall is likely Toyota, which makes sense, but it’s not the only automaker seeing its product mix switchover.
Hybrids are surging in popularity in part because they can be made to cost about the same as an ICE and remain roughly as profitable, as we’ve talked about in The Morning Dump before. Batteries are expensive to make and central to the profitability of a vehicle, which is why it’s a big deal that the UAW just unionized an Ultium plant in Tennessee.
Curiously, for all the importance of batteries to EVs, chemistry and production haven’t historicaly been a huge focus for Tesla, who has worked with outside suppliers for battery development. Is this folly? Will this lead BYD to ultimately become the bigger and more profitable company? Someone is making that point.
As hybrids are becoming popular, so are “software-defined vehicles” (SDVs), and there’s an interesting interview with the head of SDV at Stellantis. While he talks a lot about upper-level stack and the need to move away from Tier 1 suppliers, he also talks about the idea of upgrading existing vehicle hardware the same way you upgrade software. This is a unique idea and worth talking about.
Toyota Is At 48% Electrified, CR-V Is At 51% Hybrid
If I bang the “Year of the Hybrid” drum any harder I’m going to drive the mallet straight through it, but I’m not one for subtlety or modesty. Yesterday, I used this space to remark on how well Kia and Hyundai were doing because of hybrid sales. Today, we now have data from Honda and Toyota showing much the same.
Let’s start with Toyota. The overall company reported sales of almost 198,389 vehicles in August, up 1.9% year-over-year when you include Lexus (or a slight drop of 1.3% when you don’t). The drop can partially be ascribed to a stop-sale on the Toyota Grand Highlander/Lexus TX, which negatively impacted sales.
Here’s what’s interesting to me, via Automotive News:
Toyota said its August sales of electrified models rose 49 percent to 94,509, or almost half – 48 percent – of its U.S. deliveries during the month, nearly all of them gasoline-electric hybrids.
While Toyota does sell some bZ4X electric crossovers, the number is almost nominal when compared to all the hybrid RAV4s it sells. The fact that the Sienna and Camry are hybrid-only is a huge deal, and helping to push this number ever upwards. As more Tacoma Hybrids and other hybrid vehicles hit the market I expect Toyota will mostly sell “electrified” vehicles soon.
At Honda, it’s much the same, with the new Honda CR-V hitting its best sales so far this year at 38,527 units, and hybrids accounting for more than half (51%) of total sales for the month (I’m obviously doing my part). Overall, Honda lags behind Toyota with total electrified model penetration at just 28%, though it’s only a matter of time as the Civic and Accord Hybrids roll out. The big question I have is how long it’ll take for Honda to offer a hybrid Odyssey.
I’m anxious to see Ford’s sales report later today as the Maverick is another model that’s got a positive hybrid/non-hybrid split.
UAW Unionizes Ultium Battery Plant
One of the more contentious points in the United Auto Workers strike against GM was the potential unionization of the company’s new battery plants, which are not wholly owned GM companies but part of a joint venture with South Korea’s LG.
The ultimate conclusion to the Ultium conundrum was that Ultium plants could enter into the overall GM agreement if/when a majority of workers at that plant voted to join the UAW.
That’s happened, with the UAW scoring its second victory in the Republican south with members of the Ultium plant in Spring Hill, Tennessee joining up, as the Detroit Free Press reports:
“The UAW members at Ultium and VW are proving that the new jobs of the South will be union jobs,” Tim Smith, director for UAW Region 8, which includes Tennessee, said in a statement provided to the Detroit Free Press. “In the battery plants and EV factories springing up from Georgia to Kentucky to Texas, workers know they deserve the same strong pay and benefits our members have won. And we’re going to make sure they have the support they need to win their unions and win their fair share.”
A fluke or a sign of things to come?
Tesla’s Lack Of Battery Infrastructure Is Either A Blessing Or A Curse
And while we’re on the topic of battery manufacturing… pretty much from the beginning, Tesla as an automaker was great at using traditional cylindrical battery cells (18650 for the Model S) from other companies to power its vehicles. The company has continued to utilize battery production from various sources, including Panasonic and even BYD.
The company has been experimenting with making its own 4680 cells, though, reportedly, that’s hit some snags:
In May, Musk told the team working on the 4680—the nickname for the cylindrical battery, which is 46 millimeters in diameter and 80 millimeters tall—to cut its cost and scale up one of its key innovations by the end of the year, according to three people with knowledge of the matter.
And in recent months, Musk has told them he wants to see a solution to a thorny technical problem that can cause the batteries to collapse on themselves while in use, one of those people said.
Is this a big deal? Tesla has done quite well partnering with companies to get its batteries. One analyst/investor on Twitter, Glenn Luk, has a big thread out this morning on why it might be and it’s worth reading.
Luk looked at all the financials from the major EV companies operating in China and saw that most of the profits were going to BYD, Tesla, and battery makers like CATL. The conclusion he’s drawing is that BYD will likely end up more net profitable in the future as it can profit off its batteries in a way Tesla currently cannot:
BYD is extracting value from both car tech/design/distribution and the batteries.
It’s ~24.5% gross margin should be mentally split between the two: ~19.8% gross margin from the car and 4.7% on the batteries. pic.twitter.com/S6A1UqeR2E
— Glenn (@GlennLuk) September 4, 2024
This is a somewhat random person on Twitter/X, so take any analysis with a grain of salt, but it’s an interesting question and, if BYD does surpass Tesla in profits later this year, it’s something we can sort of test.
The French Were Apparently Testing Out Upgradable Hardware
Biographer/historian Robert Caro’s favorite dictum, inherited from a newspaper editor, was to “turn over every page.” I often fail at meeting this standard, but it’s true that sometimes the best information is buried deeply in a long document.
Automotive News has a lengthy interview with Yves Bonnefont, Stellantis Chief Software Officer, on the topic of vehicle software, but it’s a bit about hardware later on in the interview that caught my attention and made me glad I read the whole thing:
Do you foresee any situations where hardware upgrades can be performed in the field?
The idea of upgrading vehicle components, such as headlamps, is continuously debated in the industry. However, one of the main challenges is finding economically viable solutions.In the past, when leading DS, there was an attempt to upgrade headlamps by introducing new LED modules. The design was carefully done to ensure physical compatibility with the previous headlamp design, allowing customers to upgrade if desired.
However, the price tag for upgrading headlamps was not very attractive to customers, resulting in low demand. Despite the significant improvement in the appearance of the vehicle, the cost of the upgrade outweighed its appeal.
Um, what? First of all, it’s an interesting question. While over-the-air updates for cars are becoming more common, and the idea of a tech going to your house/business for a basic upgrade has been floating around for a while, I’m not sure I’ve heard of a tech going to your house to offer a hardware upgrade. Usually you have to drive to a dealership for an upgrade defined in a Technical Service Bulletin or something.
In particular, it sounds like the French subbrand DS (a part of Citroën) was experimenting with offering updated LED headlights that could fit into existing cars. Huh? That’s kinda fascinating and does make some sense. If your specific model didn’t have an improved headlight you’re stuck with what you’ve got or, worse, you have to make some sort of janky aftermarket improvement. An OEM-blessed headlight seems marketable but, it seems, the price is too high.
What I’m Listening To While Writing TMD
My wife and I were talking about Joe Cocker’s lovely “With a little help from my friends” and both of us assumed Cocker had died young, for some reason. It turns out that Cocker lived to be 70, which is 900 in ’60s rock star years. Good for him.
The Big Question
Is there any part of your existing car you’d like an OEM upgrade for? Headlights? Seats? It’s such a strange notion to me.
Top photo: depositphotos.com
“janky aftermarket improvement”? My friend ,that lightbar can burn the hair off a kangaroo at 2km! How can that ever be a ‘bad thing’ ?
Upgrading is a tough sell economies-of-scale wise, I’d imagine.
Lots of people would probably do, say, a “drop-in” infotainment upgrade for the right price on older vehicles.
Then you get to stuff like the OEM higher-trim seats and….I’d be interested, but probably scared by the price. But at least if it’s OEM I’d know I’d still have my side airbags and similar geometry concerns already covered.
My dealership [understandably as a policy thing, but not as a “human” thing] wouldn’t help me with my initial fog light installation project [car didn’t come with any] and all I could think was, “are you telling me the electrical system on the ones that came with the fog lights is actually different?”
Apparently there’s some module that can be installed in a sibling’s 2016 Mazda 3 to allow Android Auto and such, but doing it DIY looks tedious as hell. For some reason no one seems to have the necessary firmware update file available for easy download, just a bunch of forum posts saying “DM me for file”
Doesn’t Ford offer OEM upgrades/tunes, I feel like I read an article on a website called the Autopian about it.
Thanks for the bit of Cocker, Matt. When my brothers and I first started listening to him back in the 60’s, our father would comment “That bloke’s voice is so rough you can see the gravel in his throat’. Still love his music nearly sixty years later.
I say there’s been OEM infotainment hardware upgrades for some time. Look at Porsche offering CarPlay head units for older 911s.
My Subaru Outback didn’t offer iPod integration (this was back in 2005) when it was first released, but they eventually offered an integration kit that kinda-sorta added it into the headunit, so at least you could use the steering wheel controls to skip tracks and stuff. It wasn’t perfect, but did add a very useful feature to the OEM CD player.
Absolutely infotainment. Because my last two Accords existed in the early screen era where HVAC control info and music info are on the same basic screen, I’d like a factory supported way to upgrade to android auto integration with a proper screen and be able to use the HVAC controls. There are aftermarket solutions out there, but basically everyone is saying don’t try it, and I agree. Lots of concerns.
The problem: the upgraded headlight costs maybe 100 eur to manufacture, the technician fitting it costs 100 eur/hr. Times a few hours. So, 800 eur it is, maybe? But… when you think about it, we would much prefer that you buy a new car, rather than upgrading the current one. Then we can charge 1300 eur for the upgraded lights, or, hell, why not, lets package it together with the bigger wheels and a bigger infotainment screen! And some seat covers made from vegan, or something. Now we can charge 4000 eur for the 100 eur headlight! The rest of the crap costs 50 eur! To make.
Currently, in our corner of the world, what are the options if you would like to get the best headlight option in your new Stellantis car? Lets take platform mates Opel Astra and Peugeot 308 as an example. In the Astra, you cannot get the matrix headlights, that do exist, as they are available in Germany. But you cannot get them, because? Marketing? The Peugeot is more expensive, because reasons, so you can get the adaptive headlights. But only on the most expensive trim level, GT-line. Which reminds me, any sort of GT or GTi does not exist, because there are no sporty drivetrains anymore. So Gt-line it is, all show, no go. Gt-line.
Yeah, we have these powerful lights, but they cost, of course. And you cannot get them on the smallest engine, of course. There is no price for safety, right?
“Is there any part of your existing car you’d like an OEM upgrade for? Headlights? Seats? It’s such a strange notion to me.”
Yes!
Honda – please let me upgrade my radio in my Odyssey for something more modern. A while back you teased such an idea (something about offering factory stereo upgrades for mid-2010s vehicles) but you dropped that plan. I even considered retrofitting the HondaVac into our van until I looked up the pricing.
It’s really not that tough to perform “upgrades” of this nature depending on the vehicle. Like, I’ve read reports of people with later gen Camrys being able to swap out their infotainment screen for the optional larger sized one without any problems.
I even updated the gauge cluster on an Optima I used to own with one that had a fancy color LCD screen built in that was a direct plug and play. Or on an old Toyota truck I owned, I pulled the incline meter from the junkyard, and it dropped right in. The back of the dash already had cutouts in the metal backing so I knew exactly where to cut and for lighting it just hooked into existing wiring.
Really, it all comes down to how modular companies want to make their vehicles and whether they want to add any expenses they don’t have to. Like, would a company really want to run extra wiring for a future “OEM Upgrade” if they don’t have to and save a few bucks per vehicle?
The other issue is pricing. Buying new components is crazy expensive, so in every instance I’ve performed such “upgrades” I’ve always sourced from junkyards.
This. My Odyssey’s silly dual-screen infotainment was fine when it was new, but it has become a sore spot with the family in the intervening years. An official upgrade path (not the very compromised third-party options) to get AA/Carplay would be much appreciated.
I do this all the time in my 00s BMWs. I find most of the stuff at a local pick-n-pull Take for instance my former e38 740iL. I put in the massaging seats. A Euro armrest. Video module so I could have a back up camera appear on the factory nav unit. I upgraded the nav from Gen2 to Gen4.
On my current e46 I put in factory LED tail lights and coded them in. Front seats from a M6.
I guess by “field” you’re assuming he means “not a dealership”. Is that just a known industry term or something? Otherwise I don’t see where the pull quote specifies that this would happen outside of a dealer. I know you can get certain kinds of dealer-installed upgrades already like upgrading rearview mirrors to auto dimming + homelink. I’m pretty sure a dealer would install any dealer-installed accessory you wanted if you were willing to pay for parts + labor as usual.
If “field” does mean “not dealer”, then I think it’d be interesting to have someone come out to your work or home to do it from a convenience perspective, but probably not enough to pay more than the dealer will already charge.
I interpreted the “field” as being outside the factory, not (necessarily) off the dealer’s premises. The enabling software update could be OTA, but presumably any authorized and warranted installation would be dealer-only. Having a factory-supported aftermarket part with factory-developed code available to order for DIY installation (DSpar Performance!) could be fun and might squeeze some money out of second owners as well.
Yeah I actually think upgrades like this would be a recurring source of revenue that people wouldn’t reflexively hate