Tag: Regulation

By on July 26, 2021

Audi is discontinuing the A1, citing Europe’s regulatory landscape as the main cause. Eager to limit the amount of CO2 coming out of tailpipes, the European Union has placed strict limits on petroleum-powered passenger vehicles. For Audi, the price of manufacturing a subcompact automobile-dependent upon internal combustion is getting too high. Installing a smaller motor would negatively impact drivability while slotting in a hybrid powertrain means more R&D costs and jacking up the MSRP to a point where consumers might lose interest.

There’s just not much incentive to build small, efficient vehicles when the profit margins have been made razor thin and people aren’t buying them in great numbers. And this is a lesson that’s being learned by all automakers, not just those associated to Volkswagen Group.  (Read More…)

By on July 19, 2021

Last week, the European Union proposed banning the sale of all new internal combustion vehicles starting in 2035. With several member nations proposing restrictions in the coming years, EU leadership feels it can accelerate the timeline to force electric vehicles as the de facto mode of transportation. The European Commission has suggested making it illegal to sell gas or diesel-powered vehicles in 14 years, with aims to reduce CO2 emissions produced by automobiles by 55 percent (vs 2021 levels) by 2030.

But countries that still produce vehicles have expressed reservations about the scheduling. France absolutely agrees with mandating restrictions that would reduce greenhouse emissions. Though President Emmanuel Macron’s office has been pressing that hybrid vehicles would be able to do much of the heavy lifting and fears that an outright ban of internal combustion could hamstring the industry if conducted too early. Germany, which manufacturers more vehicles than other EU member nations, is of a similar mind.  (Read More…)

By on July 19, 2021

While the right-to-repair movement is fighting a national battle, the brunt of the action has been taking place on America’s coasts. Consumer activists are taking on multinational corporations that don’t want you to modify your mobile devices, affix aftermarket components to your vehicle, or have complete access to the data that’s amassed by the staggering number of products that are needlessly networked to the internet. After years of petitioning the government, often while arguing with high-paid lobbyists, the group achieved a major victory in Massachusetts in 2020. Voters decided that automakers should not be allowed to withhold information from the vehicle’s owner or use it as a way to prohibit them from taking their car into independent repair shops (rather than manufacturer-certified service centers) or tinkering with it themselves.

Now the federal government is getting involved. Joe Biden has signed an executive order that effectively forces the Federal Trade Commission (FTC) to take regulatory action that would settle the matter. But we don’t really know if that’s going to lead to a market where customers are free to treat their property (and private data) as they wish, one where the manufacturer holds all the cards, or simply result in a regulatory minefield displeasing all parties.  (Read More…)

By on July 14, 2021

Despite achieving a miraculous global expansion in a period where established industrial conglomerates and regulatory hurdles make it nearly impossible for new automakers to persist, Tesla’s German facility is running behind schedule. Production at the Gruenheide plant (aka Giga Berlin or Gigafactory 4) was originally planned to commence this month, with deliveries kicking off shortly thereafter. But those targets have been shifted closer to the end of this year or the more likely scenario of early 2022.

As Tesla would still like to supply the market, its facility in Shanghai will begin shipping vehicles to Europe in August until local production can be achieved. Model Y crossovers will be imported from China until its German site has its assembly lines humming, which has turned out to be a harder task than the automaker anticipated.  (Read More…)

By on June 30, 2021

The Canadian government has said it wants to accelerate its self-imposed deadline to ensure the sale of all light-passenger vehicles be of the zero-emissions variety by 2040. According to statements made by Transport Minister Omar Alghabra on Tuesday, Canada’s new target should be 2035. That presumably leaves customers with a little over a decade to enjoy internal combustion engines, though the realities of transitioning into an entirely electric automotive infrastructure may push back that date substantially.

Alghabra noted that the target was “ambitious, undoubtedly, but it is a must,” adding that the ruling Liberal Party believed it was possible with an elevated amount of determination, focus, and effort. He also stated that more funding will be required to meet the new goal, coordinated with additional government regulations.  (Read More…)

By on June 23, 2021

Volkswagen Group has been prattling on about electrification for years and ultimately decided that Audi would be the tip of its progressive spear. The brand has cachet as both a luxury and performance division, while simultaneously possessing VW’s magical ability to produce vehicles that don’t become an eyesore after you’ve had them in the garage for a decade.

While transitioning toward EVs runs the risk of spoiling that, Audi is clearly the VW property best positioned to come after would-be Tesla customers and is not hesitant to issue reminders that it’s serious about being a global leader when it comes to battery-driven vehicles. On Tuesday, the Ingolstadt-based company announced plans to exclusively launch electrically driven automobiles from 2026 onward — adding that it doesn’t even plan on selling internal-combustion vehicles by 2033.

But these rules won’t apply to the Chinese market, which will be flush with internal-combustion vehicles produced within its borders years after the rest of the world has apparently lost the option to purchase them.  (Read More…)

By on June 17, 2021

It’s always nice to get a break from the endless stream of industry marketing materials about electrification, though this week’s impromptu theme still involves going green. Following news that General Motors is considering changing its drug testing policies to exclude marijuana, there has been heavy coverage of an Insurance Institute for Highway Safety (IIHS) study claiming states that have legalized recreational use of cannabis are seeing more crashes.

But the framing seems wildly irresponsible as it fails to highlight the problem being heavily tied to individuals operating a vehicle under the influence of marijuana and alcohol combined. It’s more or less what the IIHS attempted to do in 2018 with help from the Highway Loss Data Institute (HLDI). Our guess is that the duo is seeking out fresh reasons for insurance companies to raise rates in regions that have legalized pot because even their own research complicates the issue.  (Read More…)

By on June 2, 2021

On Tuesday, the Biden administration announced it would be suspending oil and gas leases issued in Alaska’s Arctic National Wildlife Refuge during the last days of the Trump administration. Bent on maintaining the United State’s energy independence, Donald Trump had moved to expand fossil fuel development in ways that would have been at odds with predecessor Barack Obama. But today’s White House represents a return to form, with an interest in supplanting traditional energy concerns with what it believes will be greener alternatives.

It’s bad news for the Alaskan state government, which had hoped to devote a subset of the region to rebuilding its oil industry by taking advantage of its vast reserves. But environmentalists and a subset of tribal representatives have praised the decision to prohibit development on protected lands. We expect consumers will have conflicting opinions, based largely upon how much they’re willing to pay at the pump(Read More…)

By on June 1, 2021

General Motors has a long and illustrious history of receiving government favors, with 2021 likely to continue the trend. Having recently seen its request to have federal EV tax credits reset approved by the Senate Finance Committee, GM-owned Cruise is now seeking to double down by asking regulators to scale back restrictions on autonomous vehicle testing. With practically every automaker simultaneously requesting government hookups on a weekly basis, it’s hardly surprising to see this.

What is unique is the rationales given for government help and it’s often the only way to measure their merit. While most claims tend to boil down to “we need more money,” Cruise wants regulators to get out of the way so the United States can become more competitive against China’s AV programs and is hardly the first company to make such a suggestion.  (Read More…)

By on May 19, 2021

Texas lawmakers have presented Senate Bill 1728 as a way to nail electric vehicles for circumventing fuel taxes, sending everyone into a tizzy. Electrification has become about more than simply developing new powertrains under the auspices of environmentalism and it’s observable in this week’s headlines. But let’s discuss what SB 1728 hopes to achieve so that you might make up your own mind without this author’s forthcoming influence.

If passed, the bill would raise fees on EVs as a way to make up for the gas tax they’re not paying. The proposed legislation stipulates an annual fee of between $190 and $240, an additional fee of at least $150 for anyone who drives their car more than 9,000 miles a year, and then 10 bucks per year for the local charging advisory council. The rules would come into effect this September and raise an estimated $37.8 million for the State Highway Fund in 2022. While we cannot say whether that money will be used responsibly, the pretense is that the funds will be used to “[equalize funding for] road use consumption for alternatively fueled vehicles.” (Read More…)

By on May 18, 2021

The Transportation Trades Department for the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is spending its Tuesday telling the U.S. House of Representatives Energy and Commerce subcommittee that autonomous vehicles. Though it’s not because they occasionally run amok when left to their own devices. This is a matter of jobs.

Labor leaders have become increasingly concerned by the massive layoffs that will likely accompany the proliferation of electric vehicles, which require fewer components to assemble. But AVs have played second fiddle until fairly recently, with truckers doing most of the heavy lifting themselves. Now, the ALF-CIO is getting in on the action and hoping to convince legislators to establish formal requirements for there to be a driver behind in the wheel of all commercial vehicles over 10,000 pounds.  (Read More…)

By on April 19, 2021

Undoubtedly eager to improve the take rate of electric vehicles, automakers have a myriad of solutions at their disposal. But the majority have something to do with getting the government involved to futz around with taxes.

Normally, this has to do with making special exceptions for EVs or subsidizing them via rebate programs. But governments seem happy to do this, as increasingly more legislation is advanced that would place restrictions on when and where people will be able to drive internal combustion vehicles, and automakers appear to be getting with the program. We’ve already seen manufacturers choosing sides in America’s gas war and now the Europeans are getting in on the action by demanding higher taxes be imposed on vehicles reliant on gasoline or diesel.

(Read More…)

By on April 5, 2021

American automakers can usually count on selling just below 3 million vehicle sales in China every year. While that figure includes the caveat that the Chinese Communist Party requires foreign manufacturers to partner up with established local companies, it remains substantially larger than the number of cars Chinese brands manage to move in the United States per annum — which is effectively zero.

From BYD to Zoyte, just about every large Chinese manufacturer has issued a deluge of promises about breaking into our market over the last decade — including most of the names we’ll be mentioning below. Consider this sort of the “Where Are They Now?” of evergreen automotive content about regional disparities. Because very little has moved in regard to China’s involvement with the North American auto market and the current geopolitical climate doesn’t make us think that’s likely to change anytime soon.

But it hasn’t been for a lack of trying.  (Read More…)

By on April 1, 2021

One of Volkswagen’s joint ventures in China has reportedly offered to purchase regulatory credits from Tesla in order to adhere to the regional environmental ascendancy. While VW may be doing everything in its power to swap over to an electric-vehicle manufacturer, it’s apparently falling short of government dictums.

FAW-Volkswagen — which shipped a little over 2 million automobiles in Asia last year — happened to be one of the biggest polluters of 2020 according to China’s Ministry of Industry and Information Technology. As it turns out, selling internal combustion vehicles consumers actually want to purchase in large quantities has some kind of environmental cost. Fortunately, it’s one regulators think can be solved by buying green credits from rivals who do all of their polluting during the initial assembly process and launder any future emissions through the national energy grid.  (Read More…)

By on March 25, 2021

Tesla is demanding the reinstatement of a 2016 Obama regulation that more than doubles penalties for manufacturers who fail to adhere to fuel efficiency requirements. Gee, I wonder why it would do such a thing.

While focusing on the environment is an admirable endeavor, much of the discussion surrounding environmentalism on the corporate level really skirts around the periphery of Scamville. Elon Musk is no fool and understands that the more stringent regulations are enacted against his competitors, the more desperate they will be to buy up Tesla’s mountain of carbon credits. With a little help from the government, electric-vehicle companies can effectively bankrupt their more-traditional rivals while earning a nice payday for themselves. In fact, Tesla has only managed to become a profitable company because of this practice(Read More…)

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