Toyota is in absolutely no rush to switch completely to electric vehicles, Lordstown Motors is finally starting to produce its new pickup truck, and a number of manufacturers are shuttering plants in the south due to Hurricane Ian. All that and more in The Morning Shift for Friday, September 30, 2022.
1st Gear: Toyota’s Slow EV Adoption
Toyota has zero plans to adopt a fully EV lineup in the near future. The company’s CEO, Akio Toyoda, says there are concerns about how soon customers will actually want to own electric cars.
Reports say that even though the company plans to introduce some EVs to the market, Toyota still plans to offer a number of different gas, hybrid and hydrogen vehicles. From Bloomberg:
Battery-electric vehicles “are just going to take longer than the media would like us to believe,” Toyoda, grandson of the automaker’s founder, told dealers gathered in Las Vegas. He pledged to offer the “widest possible” array of powertrains to propel cars cleanly.
“That’s our strategy and we’re sticking to it,” he said.
Toyota’s stance reflects the numerous and sometimes conflicting considerations for automakers, which are seeking to boost sales, serve diverse customer bases and meet increasingly strict environmental standards in many countries. The decision contrasts with that of competitors such as General Motors Co., which has pledged to go all electric by 2035.
Environmentalists and shareholders have criticized Toyota for dragging its feet in embracing EVs, with Greenpeace putting the brand at the bottom of its ranking of global automakers’ decarbonization efforts. Critics have accused Toyota of clinging to its 25-year history with the gasoline-electric Prius hybrid, which once earned Toyota plaudits.
Despite the lack of a rush to sell EVs, Toyota still pledged last year to spend 4 trillion yen ($28 billion) to produce 30 different EV models by 2030. That may sound like a lot of cash, but Bloomberg points out that is a little more than half of what Ford is spending on EVs through 2026.
Despite the apparent disparity, Toyoda said his company already has been investing in battery-powered hybrids for more than two decades. He contends that makes Toyota the “top runner” in reducing carbon emissions from vehicles worldwide.
“Our investments may appear smaller than others’, but when you look at what Toyota has been doing over the last 20 years, the total amount might not necessarily be small,” Toyoda said.
He continued that the lack of sufficient infrastructure will slow down electric vehicle adoption rates. That’s the main reason behind Toyota’s hesitancy to fully commit to the EV life.
2nd Gear: Lordstown Motors Makes A Truck
Lordstown Motors has reportedly started to slowly ramp up production of the Endurance pickup truck — the company’s first model.
When I say slowly, it’s a bit of an understatement. Lordstown has built two trucks so far, but don’t worry. A third is on the way soon. The company says it plans to ramp up production soon depending on quality and parts availability. Fingers crossed, Lordstown says it expects to deliver 50 trucks to customers this year. That’ll go along with the 450 it plans to build in the first half of next year. That number, of course, depends on if it can raise enough capital.
Needless to say, it’s been a slow-going process for the EV upstart. From the Detroit Free Press:
The trucks are being built in an old General Motors small-car assembly plant in Lordstown, Ohio, near Cleveland that was purchased last year by Taiwan’s Foxconn Technology Group, the world’s largest electronics maker. Lordstown says it will look to Foxconn and other partnerships as sources of new capital.
“We expect to increase the speed of production into November and December,” CEO Edward Hightower said in the statement. Earlier this year, Lordstown said it expected to produce 3,000 of its flagship Endurance electric trucks before the end of 2023.
The company has struggled to raise money and get trucks out the factory door to customers. In its quarterly filings with the U.S. Securities and Exchange Commission, its auditors raise doubts that the automaker will be in business in the coming year.
The Freep says the company expects to end the third quarter of 2022 with only about $195 million in cash. That’s, uh, not a ton of money for a car company. However, Lordstown’s cash outlook is actually $75 million better than its previous outlook, so I guess good for Lordstown.
3rd Gear: Hurricane Ian Shutters Manufacturing Plants
Mercedes-Benz, Volvo, Boeing and a number of seaports that support manufacturers in the area are suspending their operations in South Carolina on Friday because of a possible path Hurricane Ian could take.
Ian made landfall (twice) as a Category 4 hurricane on Florida’s western coast. While crossing the state it deteriorated into a tropical storm. However, it’s now back out over the Atlantic Ocean, has regained strength, and is once again a hurricane. Now, it’s looking to make a third landfall in South Carolina. The U.S. National Hurricane Center has issued a hurricane warning for the entire coast of South Carolina. From Reuters:
“Due to the potential impact of Hurricane Ian on the greater Charleston area and to focus on the safety of our team members our facility in Ladson, South Carolina, will be closed tomorrow,” Mercedes spokeswoman Andrea Berg said in a Thursday statement.
The Mercedes plant in Ladson, South Carolina, outside Charleston, employs about 1,600 people and builds the Mercedes Sprinter and Metris vans.
“Due to the anticipated impact of Tropical Storm Ian, Boeing is suspending operations at both Boeing South Carolina campuses following second shift tonight,” the company said in a statement, citing employee safety. “We will continue to assess the storm’s impact to employees and our operations.”
Volvo Cars closed its plant in Ridgeville, outside of Charleston, at about 11 am ET (1500 GMT) on Thursday and will keep it shut on Friday.
BMW has its own plant in Greer, South Carolina, but it won’t be closing the plant. The company says its factory is far enough upstate that it won’t impact its operations.
Boeing said it anticipates resuming normal operations on Sunday. Boeing conducts 787 Dreamliner final assembly in South Carolina and also fabricates, assembles and installs systems for rear fuselage sections of the Boeing 787 Dreamliner and joins and integrates midbody fuselage sections.
Boeing employs more than 5,500 people in its South Carolina operations.
Seaports in Charleston and Georgetown will close all marine terminals on Friday, as well.
4th Gear: Automatic Braking System Test Goes Poorly
A new study from AAA about automatic braking systems in vehicles shows that there is still a lot of work to do in regard to the technology.
The organization crash-tested four vehicles from four different manufacturers with the tech: a 2022 Chevrolet Equinox LT, a 2022 Ford Explorer XLT, a 2022 Honda CR-V and a 2022 Toyota RAV4 LE. From Automotive News:
Rear-end crash performance, a test in which vehicles sped toward another directly from the back, was better than other forms — but still had issues, especially surrounding speed.
At 30 mph, the vehicles prevented a collision 85 percent of the time. When the speed was increased to 40 mph, that dropped to 30 percent.
Matt Lum, an automotive technical engineer with AAA, said much of that difference comes from automakers needing to balance the sensitivity of their automatic braking systems.
“Part of the trade-off of balancing minimization of false positives while maximizing efficiency or effectiveness is that, at higher speeds, there are going to be, unfortunately, a lot of cases where an impact won’t be avoided completely,” Lum said to Automotive News.
Intersection-based crashes, such as those resulting during left turns, performed even worse. None of the systems that was tested prevented a single crash — and notably did not alert the driver or slow the vehicle’s speed.
“I don’t think these current systems, whether it be from a hardware or software perspective, are more or less equipped to handle those types of situations just yet,” Lum said.
AAA’s study comes on the heels of a similar one released in late August by the Insurance Institute for Highway Safety that tested vehicles’ ability to detect pedestrians at night. It found automatic braking systems performed poorly in that situation.
In terms of what can be done to remedy the issues, Lum says it’s all about the research and development automakers do.
“We think that, obviously, additional R&D on these would be very prudent and resources well spent,” Lum said. “Further developments in both hardware and software should make future systems more effective in these more complicated situations.”
5th Gear: CarMax And The Terrible, Horrible, No Good, Very Bad Time
CarMax is going through it right now. The company said it sold fewer-than-expected used vehicles in its second fiscal quarter.
The used-vehicle retailer reported a not-awesome net income of $125.9 million in the third quarter — which ended on August 31st. That may sound like a helluva lot of money, but it’s actually down 56 percent over the same period last year. However, its net revenue was up two percent from the same time last year — $8.1 billion. From Automotive News:
It retailed a total of 216,939 used vehicles in the quarter, down 6.4 percent from the year-earlier period. Comparable store used-vehicle sales fell 8.3 percent. CarMax said vehicle affordability challenges in the period stemmed from more inflationary pressures, climbing interest rates and low consumer confidence, conditions which also beset the retailer in its first quarter.
The company said it bought 342,731 vehicles from consumers and dealers, down 8.1 percent year-over-year. It said 322,543 of those vehicles were purchased from consumers, down 11.5 percent year-over-year. However, 20,188 vehicles were obtained through MaxOffer, the company’s digital appraisal tool for dealers. That’s up 130.4 percent year-over-year and up 18 percent compared with the first quarter.
The company opened three new locations in Stockton, Calif., Wayne, N.J. and East Meadow, N.Y., in the quarter, part of its plan to open 10 new locations in the U.S. in fiscal 2023.
“While this was a challenging quarter across the used car industry, our ongoing progress in strengthening and expanding our omnichannel experience continues to positively differentiate us and enable us to grow market share,” CarMax CEO Bill Nash said in a statement. “As we navigate the near-term pressures facing our industry, we are further sharpening our focus on driving additional operational efficiencies across our business.”
All this not-good news sparked a selloff of CarMax stock. It closed down nearly 25 percent when trading ended on Thursday.
Reverse: Aaron Judge Laughs at Your Accomplishment
Neutral: I Fear I’ve Fallen In Love With My Car Again
My car and I have a real “will they, won’t they?” relationship. I am constantly thinking about selling it, but then I drive it and that feeling goes away. Last weekend, my girlfriend and I took a spontaneous weekend trip to Newport, Rhode Island, and I am sad to report that I’ve fallen in love with it again. That’s just too bad, because right now it’s worth more than it’ll ever be worth again, and any moment now something else will break. Ah well, I’ll enjoy it while it lasts.