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- Daily Digest August 22, 2024
Daily Digest August 22, 2024
Daily Digest August 22, 2024
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What's up?
Well…hybrids are outpacing the competition, hydrogen fuel cells are making a gritty comeback in heavy-duty trucks, and Ford's EV ambitions just hit a speed bump.
Stellantis and Rivian are in a tug-of-war for talent, China's revving up its global EV domination, and Lufthansa is slapping sharkskin tech on its planes to shave off fuel costs.
Oh, and don't forget the latest consumer headaches: BMW's big recall, the rollercoaster used car market, and insurance nightmares that'll have you thinking twice before filing a claim.
You know, just another day in the automotive world.
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Shifting Consumer Preferences: Hybrids Take the Lead
As technology evolves in the auto industry, U.S. auto dealers need to stay ahead of shifting consumer preferences. The latest data from the 2024 American Customer Satisfaction Index (ACSI) Automobile Study highlights where consumer satisfaction currently stands, especially as new powertrains gain traction.
Hybrid Vehicles Outperform Gas and Electric
Hybrid vehicles lead the pack in customer satisfaction, surpassing gas-powered and electric cars. Here's what the data shows:
Top Performers:
Mass-Market Brands: Toyota and Subaru both scored 83 points.
Luxury Segment: Mercedes-Benz and Tesla also led with 83 points each.
Key Reasons:
Fueling Convenience: Hybrids excelled in ease of fueling.
Dependability Concerns: EVs lagged due to concerns about repair costs and reliability.
The Resurgence of Hydrogen Fuel Cells
While hybrids dominate customer satisfaction, hydrogen fuel cells are finding new life in heavy-duty applications despite challenges in the consumer market.
Hydrogen's Comeback:
Decline in Consumer Sales:
82% drop in hydrogen vehicle sales in 2024.
California remains the only state with significant hydrogen fueling infrastructure.
New Applications:
Heavy-Duty Use: Hydrogen fuel cells are now used in mining trucks, cement mixers, and boats.
Key Projects:
Energy Observer: A hydrogen-powered vessel.
GM's Heavy-Duty Trucks: Showcasing hydrogen's potential.
Government Support:
$7B in tax credits and funding for hydrogen production hubs from the Biden administration.
Ford Adjusts EV Strategy
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Ford is shifting its electric vehicle strategy due to slower-than-expected market growth. The company will now focus on hybrids and affordability, halting plans for all-electric SUVs in favor of hybrid models.
This shift, aimed at addressing customer concerns over price and range, will cost Ford at least $400M, potentially rising to $1.5B. Ford plans to introduce an electric commercial van by 2026 and a "groundbreaking" electric truck, Project T3, in 2027 while reducing its capital expenditure on EVs from 40% to 30%.
Stellantis: Profits and Poaching?
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Stellantis and Rivian are at a pivotal moment, with their paths crossing as Rivian's VP of Manufacturing, Tim Fallon, departs to lead Stellantis' EV production for Jeep and Dodge. Fallon, instrumental in scaling Rivian's EV output, will spearhead Stellantis' all-electric Jeep Wagoneer S and Dodge Charger Daytona EV launch.
Meanwhile, Stellantis CEO Carlos Tavares is addressing declining profits in North America, where sales of key brands like Ram and Jeep have dropped over 33% since 2019. As Stellantis strategizes its recovery, Rivian continues its push to produce 57,000 vehicles in 2024.
China's Growing Role in the Electric Globe
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China is rapidly expanding its influence in the global (EV) market through domestic advancements and international trade relations. While the country's EV industry is experiencing significant growth, it also faces challenges, particularly in its trade relations with the European Union.
China vs. EU Tariffs: China criticized the European Union for imposing tariffs on Chinese EV imports, calling the measures unfair. The EU's decision to lower tariffs for some manufacturers, including Tesla, has escalated tensions, with China vowing to defend its EV industry.
Nio's Expansion Plans: Nio aims to install battery charging stations in all 2,844 counties in China by June 2025 and expand battery swap stations to over 2,300 counties by year-end. The company currently operates 23,000 charging stations and 2,480 swap stations.
Xiaomi's EV Growth: Xiaomi reported a substantial Q2 revenue of 88.9 billion yuan, driven by the delivery of 27,307 SU7 electric vehicles. Despite an adjusted loss of 1.8 billion yuan in its auto unit, Xiaomi remains confident in meeting its target of 120,000 EV deliveries by year-end.
Weird Tech: Lufthansa Adopts Sharkskin Technology to Cut Emissions
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Lufthansa is installing AeroSHARK film, which mimics shark skin, on four additional Boeing 777-200ER aircraft to reduce drag and improve fuel efficiency. The sharkskin-inspired technology, already applied to 17 other Lufthansa aircraft, is expected to reduce fuel consumption by 1% per flight.
This small but significant improvement aligns with Lufthansa's commitment to cutting CO2 emissions. Although the technology offers modest gains compared to swimming through water, it will save thousands of tons of CO2 annually on long-haul flights. The upgrades are set to be completed by March 2025.
Consumer Concerns: Recalls, Market Shifts, and Insurance Costs
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As automotive technology evolves, consumer concerns around vehicle safety, affordability, and insurance costs are becoming more pronounced. Here's what you need to know:
BMW Recall: Electrical Safety Risks
BMW is recalling 720,796 vehicles in the U.S. due to a potential short circuit risk from an improperly sealed electrical connector on the water pump. Affected models include:
X1, X5, and 5-series sedans
No reported accidents or injuries
Dealers will inspect and replace affected parts at no cost
Used Vehicle Market: Inventory and Pricing Trends
The used-car market is experiencing shifts, particularly for vehicles under $30,000:
9% Increase in inventory for cars priced under $30,000
3% Decrease in prices for this segment
15% Decline in availability for cars priced between $30,000 and $49,000
Cars under $20,000 now average 93,000 miles on the odometer
Auto Insurance: Rising Costs and Consumer Behavior
Consumers are increasingly shopping for new auto insurance policies:
7% Increase in new insurance shoppers year-over-year in Q2 2024
73% of consumers prefer to pay for minor repairs themselves to avoid rate hikes
24% regret filing an insurance claim due to subsequent rate increases
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