Dodge revives the Durango Hellcat, Mahindra taps VW for an EV platform, automotive suppliers seek renegotiation. All this and more in today’s issue of The Morning Dump.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
The Durango Hellcat Is Back
With the Hellcat era’s sunset rising over the horizon, Dodge is taking its fire-breathing V8 for a bit of a victory lap. Among other announcements, Dodge is bringing back the Durango SRT Hellcat SUV for 2023. Performance SUVs always seem to be oxymorons, but the Durango Hellcat is the closest a performance SUV can get to making sense. It still has an excellent 8,700 pound towing capacity and three rows of seating, plus a manufacturer-quoted zero to 60 mph time of 3.5 seconds means it’s properly quick. After all the hype the 2020 Durango SRT Hellcat generated, I’m glad Dodge brought the model back for one last hurrah.
In case the 2021 model year Durango SRT Hellcat flew under your radar the first time around, here’s what’s going on with Dodge’s ballistic family hauler. The Hellcat engine has been tuned to 710 horsepower, making it a little more powerful than early Challenger Hellcats, while an eight-speed automatic gearbox and beefy transfer case send all that power to all four wheels. In addition to the aforementioned 3.5-second zero to 60 mph time, Dodge claims an NHRA-certified quarter-mile time of 11.5 seconds and a top speed of 180 mph. There isn’t anything hugely new for the 2023 edition, but I don’t think there needs to be. Why have new when you can have awesome? Dodge says that order books for the 2023 Durango SRT Hellcat will open in September, with deliveries starting early in 2023. Dashing through the snow in a 710-horse three-row sleigh has a nice ring to it, don’t you think?
Mahindra Taps Volkswagen For EV Platform
While Americans will likely know Mahindra as a maker of tractors and nifty side-by-side ATVs, Mahindra produces some of India’s most popular SUVs like the Thar and Scorpio. Soon, some of its SUV portfolio will be electric. Mahindra’s aggressive EV rollout has five electric vehicles planned in the next four years, and Automotive News Europe reports that all of them will be underpinned by Volkswagen’s MEB platform.
Mahindra is the second customer for VW Group’s MEB platform after Ford, which will begin production this year of an MEB-based electric SUV built in its plant in Cologne, Germany.
The Mahindra electric SUVs will be sold under two brands — XUV and BE, the automaker said in a video presentation on Monday.
More than 1 million vehicles will be produced by the brands over the duration of the deal, VW said in a statement.
“The partnership not only demonstrates that our platform business is highly competitive, but also that the MEB is well on track to become one of the leading open platforms for e-mobility,” Volkswagen management board member Thomas Schmall said.
It’s crazy to see Mahindra going from producing the Bolero to producing EVs in such a short period of time. While the Volkswagen partnership definitely helps, leaping on the EV train signifies a dramatic shift in one of the world’s most important growing car markets. I’m eager to see the fruits of Mahindra’s EV efforts, as they sound rather exciting and promise a new design language we’ve never really seen before.
EV Customers Scramble For Binding Contracts Ahead Of Expected Tax Credit Bill Signing
Given the current affordability crisis, it doesn’t make much sense to erect barriers for greener transportation. Still, the U.S. government plans on doing so anyway. Reuters reports that President Biden is expected to sign the Inflation Reduction act on Tuesday, replacing the current EV credit methodology, tightening eligibility restrictions, and leaving some customers without binding contracts in the lurch.
Many automakers and dealers have been working with customers to complete binding written contracts ahead of Biden’s signing to make them eligible for credits even if they have not received vehicles.
The Alliance for Automotive Innovation, a trade group representing Volkswagen, General Motors Co, Toyota Motor and Ford Motor among others, said earlier the law would make 70% of 72 U.S. electric, plug-in hybrid and fuel-cell EVs that currently qualify ineligible upon Biden’s signing.
On Jan. 1, when the bill’s new income and price caps and battery and critical mineral sourcing rules take effect, “none would qualify for the full credit when additional sourcing requirements go into effect,” the group added.
While none of this seems great in the short term, there is one smidgen of good news. Current tax credits on binding contracts are expected to be honored, and the scramble to convert orders into binding contracts could pay off for some consumers. Here’s to hoping that as many EV customers as possible were able to convert their orders to contracts, because reduced affordability for many mass-market EVs could leave some consumers out in the cold.
[Editor’s Note: We’ve written a comprehensive article on the proposed EV tax credits. It’s not simple, so I highly recommend you read that piece for full context (The new bill opens up EV credits in a way that the current system does not; the 200,000 vehicle limit per manufacturer, for example, goes away. Which is great). -DT].
Struggling Auto Suppliers Reportedly Seek Contract Renegotiation
As the new vehicle supply crisis drags on, nobody with skin in the game seems to be having an easy go of things. While automakers certainly have it bad, suppliers seem to be having an even worse go of things. Automotive News reports that some automotive suppliers are wishing to renegotiate contracts to keep their heads above water.
Pat D’Eramo, CEO of Canadian Tier 1 supplier Martinrea International, has had a number of lower-tier suppliers ask his company to renegotiate their contracts, he says.
D’Eramo told an audience at an industry conference this month that several of his smaller European subsuppliers have recently gone bankrupt.
“I think every week we have a bankrupt subsupplier in Europe,” he said.
Amid the supply chain challenges and periodic assembly plant shutdowns of the last two years, many smaller suppliers have found it difficult to produce and deliver their product at a sufficient profit.
Parts and materials shortages have created a “start-and-stop effect” in the supply chain that is “catastrophic” for smaller firms, said Arun Kumar, a managing director in AlixPartners’ automotive and industrial practice.
Renegotiaton is a tricky act. While approved renegotiations would see higher costs work their way into new cars, failure to renegotiate would pose larger threats to supply chains as suppliers go bust. Automakers and Tier 1 suppliers don’t want to pay more for parts as that could eat into bottom line, but Tier 2 and Tier 3 suppliers are having a rough go of things and may not be able to continue to supply parts if they can’t make ends meet. This could have ripple effects down the line as certain OE replacement parts may simply dry up. That’s not a great scenario, so sensible renegotiation is vital to maintaining automotive supply infrastructure. Short-term pain for long-term gain, right?
Whelp, time to drop the lid on today’s edition of The Morning Dump. The impeding death of the Hellcat engine feels like a somber occasion, and one that prompts a very important question. Which engine currently fitted to a production car will you miss the most when everything goes electric? While there are many awesome engines I could choose from, Jaguar’s supercharged five-liter V8 holds a special place in my heart. It’s just an angry lager-drunk meteorite of an engine, capable of tearing through silence like a strongman rips up a phonebook. It bellows and snorts and proudly tells everyone to get out of your way because your Jaguar currently works, and there’s something perversely wonderful about that.