#725 - 🚗 Wary of Software?

TOGETHER WITH

Welcome back, Friend!

This Monday, we look at an EV quality report from JD Power, some automaker ups and downs, and the whole deal with VW, Scout, and Rivian.

What’s the most annoying feature you’ve ever seen in a vehicle?

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-Paul, Kyle, Chris & Kristi

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BUSINESS

First: EV Quality Data, Hyundai's Peak, Toyota's AutoDrive, and Volvo's Email

In my past life, I worked in IT, and in IT, all the support staff knew something nobody else wanted to talk about: No matter what you sell, your main product is support. Support is what makes it work when issues come up, support explains it when users get lost, and support is among the first questions people ask before buying into a new software solution.

Is the quality issue with EVs ONLY about the software, or is there a vacuum where people ready to support customers oughta be?

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EV Quality Problems: Software Issues Take Center Stage

According to JD Power's latest quality study, electric vehicles are experiencing significant quality issues, primarily due to software problems. The study, which measures problems per 100 (PP100) vehicles, found that EVs reported 266 PP100 compared to 180 PP100 for ICE vehicles. These issues are concentrated in advanced tech features rather than mechanical components, presenting a unique challenge for the automotive industry.

• Higher Problem Rates: EVs reported 266 problems per 100 vehicles (PP100), significantly higher than the 180 PP100 for ICE vehicles.

• Tech-Related Complaints: Frequent issues include false rear-seat warnings, unreliable driver-assist alerts, and problematic infotainment systems.

• Smartphone Connectivity: Over 50% of Apple and 42% of Samsung users reported difficulties connecting their smartphones to their vehicles.

• Tesla's Decline: Tesla's performance has now aligned with that of traditional automakers, partly due to controversial design changes like removing conventional controls.

• Top Performers: RAM ranks highest overall in initial quality with 149 PP100, while Porsche leads among premium brands.

• Consumer Expectations: Maintaining high-quality standards in the face of increasing tech integration remains a significant hurdle for the industry.

Despite these challenges, some brands continue to excel in quality. Maintaining high-quality standards becomes crucial as the automotive industry increasingly integrates complex tech into vehicles. Dealers should consider addressing software issues and improving customer support for tech-related problems to enhance overall vehicle satisfaction and brand loyalty.

EV-Makers: Highlights and Challenges

After navigating the bumpy road of software issues, let's take a moment to look at some victories, innovations, and announcements.

Hyundai's Victory at Pikes Peak
Hyundai's Ioniq 5 N, developed in six months, shattered Tesla's record at the Pikes Peak International Hill Climb. Pro driver Dani Sordo achieved a remarkable 9:30.852 run, demonstrating the Ioniq 5 N's superior cooling and performance capabilities.

Toyota's Autonomous EV for China
Toyota will launch its first EV with advanced autonomous driving in China 2025. Partnering with Guangzhou Automobile Group and using Huawei's software, the Bozhi 3X SUV aims to restore Toyota's market share with cutting-edge technology and cost-effective batteries.

Volvo Feature Delay Email
Volvo's EX90 will miss several features at launch due to software issues. Owners may experience delays in wireless Apple CarPlay, bidirectional charging, and certain safety features, with updates expected post-delivery to address these gaps. 

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BUSINESS CONT’D

Last: VW, Scout, Rivian, and Polestar Updates

VW + Rivian = Scout?

Volkswagen's recent $5 billion investment in Rivian has sparked curiosity about the future of Scout Motors, VW's electric SUV project. Despite similarities between Scout and Rivian's products, VW assures that Scout's development remains on track for its 2026 launch.

So... is Scout Motors affected by the Rivian deal? No, VW assures that Scout's development remains on track for its 2026 launch.

Volkswagen's Head of Strategy and Finance Communications, Christopher Hauss, emphasized that the collaboration with Rivian is focused on software development, benefiting both companies without altering Scout's trajectory. This partnership aims to leverage Rivian's software and electrical architecture expertise to enhance VW's capabilities.

Notes:

• Scout Motors: Still on track for 2026 launch

• Focus: Collaboration with Rivian on software development

• Benefit: Leveraging Rivian's expertise in software and electrical architecture

This strategic collaboration between VW and Rivian is a significant move in the EV industry. It showcases a blend of legacy automaker stability and startup innovation. Let's break down the benefits and implications of this partnership.

What Does the VW-Rivian Partnership Mean?

An initial $1 billion investment, with a further $4 billion over time, focusing on improving software and EV architecture.

Benefits:

• VW: Gains Rivian's advanced software and electrical architecture expertise

• Rivian: Secures financial backing to mitigate its $5.7 billion operating loss in 2023

Joint Goals:

• Cost Reduction: Lowering costs for both companies

• Accelerated Development: Faster production of new EV models like Rivian's R2 and R3

Key Points:

• Initial investment: $1 billion

• Further Investment: $4 billion

• Shared Expertise: Combines VW's scale with Rivian's technological advancements

Rivian's investor day further underscored the company's commitment to cost reduction and efficiency improvements. CEO RJ Scaringe outlined plans to achieve profitability by 2027, focusing on significant material cost reductions for current and future models. The VW investment strengthens Rivian's balance sheet, aiding the production ramp-up for its R2 vehicles by 2026.

What are Rivian's Plans for the Future?

Achieving profitability by 2027 through significant material cost reductions and streamlined manufacturing processes.

Investors are hype:

• VW's Support: Strengthens Rivian's balance sheet

• Production Ramp-Up: Aiding the production of R2 vehicles by 2026

Rivian is focused:

• Material Cost Reductions: For current and future models

• Efficiency Improvements: Streamlined manufacturing processes

Some other deets from the investor call:

• Profitability Goal: By 2027

• Material Cost Reductions: Significant cuts planned

• Production Ramp-Up: Focus on R2 vehicles by 2026

The collaboration between VW and Rivian, as well as Rivian's focus on cost and efficiency, presents a promising outlook for the EV market. Dealers should prepare for a wave of innovative and cost-effective EV models, ensuring they stay ahead in the competitive landscape by emphasizing the advanced features and reliability of upcoming products.

Polestar Faces Revenue Decline Amid EV Market Challenges

Polestar's revenue dropped from $2.45 billion in 2022 to $2.38 billion in 2023, with net losses widening to $1.17 billion. The decline is due to reduced demand for higher-priced models and lower sales of carbon credits. Despite these challenges, Polestar introduced a more affordable Polestar 3 Long Range Single Motor model to boost sales and expand its market presence. 

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CULTURE

Inside Out 2

I (Chris) recently took my family to see “Inside Out 2” and it was lovely.

The story picked up a year or so after the previous movie ended and captured the seemingly mundane experiences of growing up by imagining them as a fantastic tale of inner challenges, chaos, and eventual transforming growth.

The visuals were Pixar-level flawless, while the audio was completely un-distracting (sound always distracts me, so this is a good thing).

Ultimately, the best part was the almost sneaky way the movie used storytelling and lovely artistry to give me new language for my own internal challenges, chaos, and growth.

I am happy this movie will be one my own daughter can watch and borrow words from for years to come.

Enjoy, Friends.

Quick Hits

• The housing market is “stuck” until 2026. 🛖 

• Wanna check some boxes? ✅ 

• OpenAI and Time Magazine are teaming up to get Time’s content to younger AI-friendly users. 👶 

History

• 1956: President Eisenhower calls for $50 billion for the construction of over 42,500 miles of interstate highway. 🛣️ 

• 1963: U.S.A. Zip Code is introduced. 🤐 

• 2005: The final Ford Thunderbird is produced. 🦅 

Thanks for reading, friend! It’s Monday and that means you got more than enough to do, but we hope you do it with the ease of one knowing somebody’s got your back. Enjoy!