Despite some of the world’s largest automakers promising commercially viable self-driving cars by 2020, autonomous vehicles have yet to manifest in any serious capacity. Granted, advanced driving aids have begun to usurp some amount of control from the driver. But they aren’t quite what was envisioned by the industry when everyone was a lot more optimistic about the technologies involved. This may also be true of consumers, who seem to have soured on the general premise of autonomous vehicles as they’ve started to learn all that might entail.
Automakers are growing concerned about the future now that it looks like people have finally reached their breaking point in regard to elevated vehicle pricing. While the industry is citing inflation in the general sense, the truth of the matter is that companies’ own inability to manufacture vehicles and parts at anything approaching a normal pace resulted in price increases that vastly outpaced the devaluation of your preferred currency. This was made far worse by dealerships affixing their own markups to just about every model that compares favorably to walking.
An acquaintance of mine recently said he would never purchase an all-electric vehicle and offered up a reason I never heard before. “They don’t come with AM radio,” he said.
While this surprised me, shifting technological preferences have indeed started to change how automobiles and broadcasters interact. As an example, a gaggle of Mazda owners found their vehicles stuck tuned to National Public Radio this February after a local station transmitted an FM data packet that effectively froze the cars’ infotainment system amid the swap to next-generation broadband services. That transition has already caused some interesting problems for the industry and electromagnetic interference has likewise become the default explanation for automakers limiting your frequency band choice in certain vehicles. But it doesn’t explain why some companies are ditching AM radio outright. In fact, a little research has shown a lot of the explanations given by manufacturers leave a lot to be desired.
A few years ago, the industry narrative was that all-electric vehicles would reach financial parity with their combustion-driven counterparts in 2025. The assumption was that this would gradually occur by way of ramping up battery production and leveraging economies of scale. However, reality had a different take, as the world is now confronting record-setting prices across the board. Manufacturer and dealer hikes have resulted in the average invoice of EVs rising to $54,000 — roughly 10 grand higher than the typical transaction price of gasoline-powered vehicles, according to J.D. Power.
With economic pressures spiking the value of all automobiles, hardly anything is leaving the lot for less than it could have been had for in 2020. But the increases seen on all-electric models are actually outpacing the models we’ve been told they’re supposed to replace.
While the semiconductor shortage was long considered the excuse par excellence for why the automotive sector couldn’t produce enough vehicles during the pandemic, some manufacturers have begun pivoting to blaming supply chains that have been stymied by Chinese lockdowns. Toyota is probably the best-known example. But the matter is hardly limited to a singular automaker and market analysts have already been sounding the alarm bell that strict COVID-19 restrictions in Asia will effectively guarantee prolonged industrial hardship around the globe.
Back in April, Shenzhen was emerging from a month-long lockdown. However, the resulting downtime severely diminished the tech hub’s output which exacerbated global component shortages. While Chinese state-run media claimed regional factories maintained full-scale production during the period, the reality was quite a bit different. Meanwhile, Shanghai has remained under harsh restrictions since March and more look to be on the horizon. As an important industrial center and the world’s busiest port by far, the situation has created an intense backlog of container ships that are presumed to create some of the sustained problems that we’re about to explore.
Last week, Volkswagen’s supervisory board reportedly told management that it needed to work on improving the company’s software division. Though that should hardly be surprising considering how often digital glitches have delayed product launches and forced the automaker to issue sweeping recalls.
Software gremlins stymied the launch of numerous ID-badged EVs, the Mk8 Golf, and a handful of other vehicles from VW Group’s many subsidiaries. But the issues have persisted, with customers citing electrical troubles and noting that the automaker’s novel touchscreen interfaces are brutally unresponsive. Some of the problems were deemed so heinous that the company eventually recalled literally every current-generation Golf sold within its native Germany. But it’s going to have to do a lot more if it’s serious about leveraging computer code as the cornerstone of an evolving business model and the board of directors seems keenly aware of that fact.
The automotive sector is currently suffering from ongoing component shortages and supply chain bottlenecks stemming from regional restrictions relating to the pandemic. However, it’s assumed that those problems will gradually abate, only to be supplanted by a global deficit of the raw materials necessary for battery production. Analysts have been warning about the shift toward electric vehicles, spurred on by government regulations, for years. But they’re starting to get some company from within the auto industry.
On Tuesday, Stellantis CEO Carlos Tavares suggested that there was a very real possibility that manufacturers could begin confronting serious issues in terms of battery production by 2025 if the shift toward EVs continues at pace. Though his concerns aren’t limited to there being a new chapter in the already too long saga about parts shortages. Tavares is also worried that Western automakers will become overwhelmingly dependent upon Asian battery suppliers which already dominate the global market.
Practically every automaker on the planet has begun signaling a desire to change with the times by collectively revising their business strategies. The new hotness involves lower volumes, higher margins, and electric vehicles with the ability to push connected services allowing manufacturers to charge you piecemeal for just about every feature imaginable.
While Volkswagen Group has been at the forefront of those trends since the 2015 Dieselgate scandal helped force its hand, it often suggested that the shift to EVs would be a boon to low-income families. It was hardly the only automaker to make such promises, nor has it been the first to break them after deciding that perhaps there’s more money to be made with premium vehicles. VW has decided that its ideal strategy involves culling internal combustion vehicles by 60 percent over the next eight years and focusing on higher-margin products yielding superior profitability.
Volkswagen Group has stalled production in Germany, citing an inability to obtain sufficient parts from Ukraine. The automaker reportedly is lacking sufficient electrical components for its Zwickau-Mosel plant and the Dresden-based “Transparent Factory” — both of which are responsible for manufacturing VW and Audi-branded electric vehicles.
While the automaker declined to identify any specific suppliers, it said that Zwickau-Mosel will be down for at least four days as the Dresden facility will only need three days of downtime. That should put them both back online by the end of the week. But that’s hardly a guarantee and problems abound elsewhere, some of which are starting to feel borderline ordinary, as the industry continues reinventing itself.
There’s a gaggle of Mazda owners in Seattle, Washington, that have reportedly been stuck listening to National Public Radio (NPR) over the last few weeks. The manufacturer has addressed the problem, saying the local affiliate had broadcast images files with no extension causing an issue on some 2014-2017 Mazda vehicles with older HD radio software. This effectively bricked the infotainment system on some vehicles, locking them into listening to NPR and out of literally everything else.
A little over a decade ago, it seemed like everyone I knew was abandoning cable packages for online streaming services. They were cheaper, on-demand, and offered more choices with fewer advertisements. But as the years progressed, companies stopped selling their media to a handful of online video platforms and started building their own. Programming became more transient and isolated, forcing consumers to buy into additional subscription services. We’ve since hit a point where the overall consumer experience has diminished and grown more expensive, despite the steady influx of competition.
While automakers have been dabbling with subscription services of their own, their earliest attempts turned out to be such overwhelmingly bad deals that the public refused to play along. But they’re not giving up that easily. Industry players have been trying to figure out ways to charge customers indefinitely for years and are starting to settle upon subscription packages that can unlock hardware that’s already been installed into the vehicle or add software that can be downloaded via over-the-air (OTA) updates. Love or hate it, vehicular connectivity has opened up the door for new sources of revenue and businesses everywhere are eager to take advantage — with most companies projecting exceptionally healthy profits for the years ahead.
Unvaccinated workers from General Motors’ CAMI Assembly Plant have been removed from the facility and forced into unpaid leave. The automaker had a deadline set for December 12th to have all employees vaccinated, with Unifor previously having urged the company to postpone the date. The Western world has seen a surge of citizens protesting vaccine mandates this year, with Canadian unions conducting more than a few of their own. Though several organizers have said they’re operating independently due to a shared belief that Unifor was offering insufficient support to members and was effectively siding with automakers.
When people started burning down 5G towers in fear, the practice seemed a little misguided. But if you happen to be the owner of a connected automobile, there’s a chance you’ll be wishing enough of them had been taken down to delay those low-latency spires from becoming the default broadcasting network.
While you were probably aware that 3G cellular networks will be shut down in the U.S. next year so the telecom industry can focus in on 5G, you may not have been hip to the fact that this could totally nullify the connected features inside of your car. Unfortunately, loads of automobiles manufactured the early days of phone pairing and internet integration won’t be able to make the journey into 5G like the new phone or tablet you purchased. Worse yet, there are even some modern vehicles that are about to become a lot less feature rich with companies that have no intention of offering updates.
When the pandemic convinced practically every industry to press pause in 2020, supply chains became so crippled that just getting sectors of commerce rebooted became a challenge in itself. It was the business equivalent of a twenty-car pileup, with the automotive industry being hit particularly hard due to the complexity of its own supply lines. While the following year represented an improvement, production failed to stabilize to pre-pandemic levels.
The solution for automakers and dealerships was to begin demanding more money for cars. With vehicles in short supply, the value of new and used models blew through the roof. This move kept automakers largely in the black for 2021, despite a general inability (or unwillingness) to manufacture products at the normal pace. However, it didn’t help suppliers, who are haven’t been able to tack on the same premiums to individual components while still having to cope with rising economic hurdles.
Stellantis CEO Carlos Tavares has said that the growing pressures being placed on automakers to shift toward electric-vehicle production are unsustainable and run the risk of the public getting subpar products at decidedly higher price tags. While we’ve seen automotive executives lambast new energy vehicles before, it’s grown rarer as governments around the world have continued incentivizing their existence and investors have been pouring money on startups delivering literally nothing more than the mere suggestion of more electrification.
Tavares’s words come from the Reuters Next conference, running counter to the event’s prevailing narrative of encouraging technological progress and social change. Attendees tend to be political officials, heads of finance, NGO leaders, and business executives sympathetic to the cause. But the Stellantis CEO definitely went off-script when he listed some of the shortcomings of electrification, adding that he felt the costs were “beyond the limits” of what was realistically feasible. It’s his belief that pursuing electrification at the current pace doesn’t take into account the larger financial picture.