I wasn’t exaggerating when I said that Tesla made “gigacasting” the word of the year in the automotive industry. Automakers are going crazy for gigacasting with a real if-you-can’t-beat-them-join-them attitude about the production and prototyping technique pioneered by Tesla. Or, in GM’s case, there’s a real if-you-can’t-beat-them-buy-them approach to a key enabler of Tesla’s gigacasting approach.
Whilst on the topic of General Motors, perhaps we should talk about Berkshire Hathaway dumping its position in the automaker. Is this about GM or is this about BH? It’s worth exploring. Also worth exploring are semi-solid state batteries.
And, finally, the IIHS is back in the news this week with information on how our big, bulky cars are becoming more fatal for pedestrians.
I’m writing this from the bottom of a bunk bed, which is actually quite pleasant. Jason is in the top bunk, he enjoys it a little less.
GM Grabs TEI Before Tesla Does
Reuters has a fun exclusive this morning about a Michigan-based automotive supplier you’ve probably never heard of called Tooling & Equipment International (TEI). This is one of approximately ten million automotive suppliers in Michigan with names that are so straightforward and literal that it makes it a little hard to know if they’re doing the important/boring work for car companies or doing something far cooler.
TEI, it’s clear, is doing something far cooler. It’s helping Tesla and other automakers with gigacasting. Specifically, TEI is one of the companies helping with new techniques for creating alloys and heat-treating larger and larger parts. The bigger the part you can gigacast, in theory, the quicker and easier you can build a whole car.
And now TEI is owned by General Motors. From the Reuters report:
TEI is now part of General Motors (GM.N) after agreeing a deal that may have flown under the radar but is a key part of the U.S. automaker’s strategy to make up ground on Tesla, four people familiar with the transaction said.
By snapping up a specialist in sand casting techniques that accelerated the development of Tesla’s gigacasting molds and allowed it to cast more complex components, GM has jump-started its own push to make cars more cheaply and efficiently at a time when Tesla is racing to roll out a $25,000 EV, the people said.
With TEI gone, Tesla is leaning more heavily on three other casting specialists it has used in Britain, Germany and Japan to develop the huge molds needed for the millions of cheaper EVs it plans to make in the coming decade, the four people said.
Berkshire Hathaway Reportedly Dumps GM Holdings
Berkshire Hathaway is far from the only conglomerate holding company, but because it’s owned by the usually prescient mega-investor Warren Buffett it gets a lot of attention when it does anything. The big automotive news of late is the company’s slow and profitable divestment from Chinese automaker BYD.
So what is it up to now? According to Marketwatch, the company dumped about 22 million shares of GM this last quarter:
Over the last decade, GM has produced annual returns of -0.5%, compared to an 11.7% rise for the S&P 500 SPX, according to FactSet data. Ford Motor Co. F, +5.91%, which Berkshire Hathaway didn’t hold, also has produced negative returns, while Chrysler owner Stellantis STLA, +2.90% has seen annual returns of 20.8%.
Berkshire has been in GM since about 2012 and has been dropping shares for more than a year. What’s interesting to me is not so much that the company has been dropping its GM shares (Buffett does this all the time and owns/buys/sells a lot of major companies), but that the firm is now holding on to a record cash position of $157 billion. What’s that all about?
The Answer To Batteries Might Be: Gels
If a solid won’t do and a liquid seems unwise, perhaps consider a gel. This was the mantra of the ’90s when all of a sudden my shaving cream, my deodorant, and even the crap I eat on long runs got replaced with a gel. Gels! What can’t they do?
Apparently, gels can help bridge the gap between the dream of solid-state batteries and the reality that solid-state batteries don’t quite deliver yet.
There’s a thorough report out of Automotive News explaining how the gels might work:
Unfortunately, current EV batteries feature a lot of liquid to transfer ions between positive and negative electrodes. These batteries obviously work, but they create issues in terms of packaging, safety, and performance. Solid-state batteries, in theory, solve some of these problems and offer much greater range.
IIHS: These Slabby Vehicles Are Killing People
The Insurance Institute For Highway Safety is out again with another report on vehicle safety, this time highlighting how bad those slab-fronted cars are for pedestrian safety.
Here are the highlights:
Over the past 30 years, the average U.S. passenger vehicle has gotten about 4 inches wider, 10 inches longer, 8 inches taller and 1,000 pounds heavier. Many vehicles are more than 40 inches tall at the leading edge of the hood. On some large pickups, the hoods are almost at eye level for many adults.
Vehicles with hoods more than 40 inches off the ground at the leading edge and a grille sloped at an angle of 65 degrees or less were 45 percent more likely to cause pedestrian fatalities than those with a similar slope and hood heights of 30 inches or less. Vehicles with hood heights of more than 40 inches and blunt front ends angled at greater than 65 degrees were 44 percent more likely to cause fatalities.
“Manufacturers can make vehicles less dangerous to pedestrians by lowering the front end of the hood and angling the grille and hood to create a sloped profile,” said IIHS Senior Research Transportation Engineer Wen Hu, the lead author of the study. “There’s no functional benefit to these massive, blocky fronts.”
I think automakers might argue that the functional benefit is they look good, but I suppose that’s not really a functional benefit.
This all makes perfect sense and is something that safety groups have been arguing for a long time. Do you know what a safe car is in this scenario? If you look at the graphic above it’s clearly something like a Toyota GR86 or a Ford Mustang. Clearly, if we want to make the world safer, we need more people driving sports cars.
The Big Question
Serious question: What’s the deal with Berkshire Hathaway squirreling away $157 billion?
Less-Serious Question: What company would you buy with $157 billion?