I’m spoiled. My job involves driving new cars pretty regularly. So I’m probably better than most at figuring out how all this new technology works in cars, though even I have trouble as features get more complicated and increasingly buried in touchscreen menus. But I often wonder… if you’re a normal person coming to one of these new cars from, say, a 12-year-old Honda CR-V, how the hell are you supposed to figure this stuff out?
It turns out the answer is “Just get real mad,” per the latest J.D. Power study on owner satisfaction. We have that and some news on the automotive labor front, Audi teams up with an unlikely partner on EVs, and just what is the “right” time for us to move off fossil fuels—if we ever will? Let’s close out the week nice and strong, Autopians.
Car Owners Are Neither Informed, Nor Entertained
Automakers: You can’t do better than Apple CarPlay and Android Auto. You just can’t. I’m not being mean here, I’m telling you the truth—and it’s what your owners think, too.
We learn this from the J.D. Power U.S. Automotive Performance, Execution and Layout (APEAL) Study, which says that for the first time in its 28-year history “there is a consecutive year-over-year decline in owner satisfaction.” Now, it’s good to remember J.D. Power does this stuff to collect car company advertising revenue, but that doesn’t mean its data isn’t solid. According to The Verge, which parsed the study, a lot of this is due to tech—especially infotainment systems:
According to JD Power’s Automotive Performance, Execution and Layout (APEAL) Study, overall satisfaction among car owners is 845 (on a 1,000-point scale), a decrease of two points from a year ago and three points lower than in 2021. That’s the first time in the 28-year history of the study that the consumer research firm registered a consecutive year-over-year decline in owner satisfaction.
Unsurprisingly, more people are choosing not to use their car’s native infotainment controls. Only 56 percent of owners prefer to use their vehicle’s built-in system to play audio, down from 70 percent in 2020, JD Power found. Less than half of owners said they like using their car’s native controls for navigation, voice recognition, or to make phone calls.
Remember, General Motors is moving away from Apple CarPlay and Android Auto systems soon, too, for its own native tech. And while that’s going to be a Google Automotive Services system, it seems to come down to how GM can program it—and the car companies are having trouble becoming software companies after 100 years of making engines and bodies and transmissions and what-have-you.
You’d think Tesla would be crushing it on that front, but as that story notes…
Tesla continues to rank above average, but satisfaction is declining. The company earned a score of 878, making it one of the higher-performing brands in the industry. However, Tesla’s score in 2023 is nine points lower than a year ago, when the company was first included in the study. And satisfaction scores for Tesla are trending downward year over year in all 10 factors. The company isn’t eligible for JD Power’s award ranking because it doesn’t give JD Power access to owner information in the states where that permission is required by law.
Personally, I wonder how much of that has to do with Full Self-Driving or automated driving tech. So who were our winners here? Let Mr. Power and his associates fill you in:
Setting a record for the most model-level awards (for models ranking highest in their respective segments) is Hyundai Motor Group (nine awards), followed by BMW AG (five awards) and Toyota Motor Corporation (three awards).
The Porsche 911 is the highest-ranking individual model. Which makes sense. I, too, would be extremely satisfied if I owned a Porsche 911. I’d probably let a lot of shit slide there, in fact.
Audi, SAIC Team Up For EV Platforms
I want to say “How the mighty have fallen,” but I’m not so sure it’s that simple.
Here’s the deal: Despite being an early player in the EV race, the Volkswagen Group’s Audi division has felt a bit rudderless lately. Seriously, when was the last time anything notable or interesting—electric or not—came from that brand? It’s kind of been a minute. But behind the scenes, the whole VW Group has had trouble with its bold “pivot to EVs” plan: quality, software, missed deadlines, delayed cars, cost overruns, you name it.
So now Audi is due to partner with an unlikely teammate to develop electric cars: China’s SAIC Motor Corp., which as Bloomberg says “marks a turning point in China’s automotive industry from learning from foreign manufacturers to innovating its own technology.”
“Chinese carmaking has finally come of age,” said Stephen Dyer, the Shanghai-based managing director at consultancy AlixPartners. “To get a vote of confidence from VW Group on platforms, you can’t underestimate the significance.”
[…] While VW has used platforms from others in the past, like Ford Motor Co.’s truck platform, it hasn’t considered a Chinese partner before.
The deal comes just weeks after Audi appointed new Chief Executive Officer Gernot Döllner, a 54-year-old VW veteran, to address challenges such as being slow to electrify and coming up with new models. Tesla Inc. outsold Audi globally in the first quarter and its market share in China is shrinking.
It’s not clear from this story if this is a global deal or just centered on China’s cars (at least at first.) But given trade tariffs, American wariness on Chinese tech and Audi’s own decline in China for lack of EVs, I’m guessing it’s more the latter. More:
Audi needs to accelerate its electrification in China to maintain market share, but new EV launches have been constrained by VW’s long development cycle, especially for its new Premium Platform Electric — produced with Porsche. This makes Audi less competitive against rapidly upgrading local competitors, said Jing Yang, the director of China Corporate Research at Fitch Ratings.
[…] Chinese manufacturers are gaining more bargaining power with their global partners, and more international manufacturers may seek deals with Chinese firms, at least to serve the local market as they need to ramp up EV sales, Yang said.
It’s not just batteries and software the Chinese EV makers have gotten good at: it’s speed, too. Their ability to develop new models far outpaces the rest of the world, like where Toyota and the Japanese were at in the 1980s compared to everyone else. Speaking of…
Elon Musk Casts A Long Shadow Over UAW Negotiations
We’ve been telling you for months to keep an eye on the United Auto Workers’ negotiations with the Big Three, which are underway now. In short: the new leadership is militant as hell, the members are worried about their jobs in an era when EV production probably means fewer jobs, and automakers are as thirsty as ever for profits.
And according to Reuters, Tesla is a kind of benchmark for how this could go:
Tesla CEO Elon Musk and the automaker’s increasingly profitable and efficient electric-vehicle factories will be shadow participants, just as Japanese automaker Toyota and its lean production system were for much of the past 30 years.
Take a moment to appreciate just how wild that statement is. The Machine That Changed The World is getting wholly disrupted by a startup that people (even me, at times) spent a decade writing off. What interesting times we find ourselves in. Anyway:
Tesla enjoys an operating-profit advantage over General Motors and Ford that ranges from nearly $2,800 per vehicle for GM to $3,970 per vehicle for Ford, based on a Reuters analysis of financial results at each automaker.
Stellantis’ North American operations last year out-earned all three in operating profit per vehicle, earning $8,365 per vehicle to beat Tesla’s latest second-quarter figure by nearly $1,200. That is in part due to Stellantis North America’s focus on combustion pickup trucks and Jeep SUVs that command hefty profit margins.
Looking forward, Detroit Three executives say new contracts with the UAW must allow them to be “competitive” as their U.S. operations shift to building EVs, which are money-losers for the legacy automakers now.
[…] The Detroit manufacturers are expected to bring comparisons with Tesla to the bargaining table, people familiar with the process said.
“Tesla today plays the role of the Japanese and German automakers in the ’80s,” said Harley Shaiken, a labor professor at the University of California, Berkeley, who has followed the U.S. industry.
Good Lord. Anyway, here’s what UAW President Shawn Fain says in a sentence that starts off genially and ends like a roundhouse kick to the face:
“As we embark on this EV journey,” he said, “we are constantly presented with the same tired script from the companies; that we must remain ‘competitive,’ which is nothing more than a continued race to the bottom in a quest to follow the lowest bidder to pay poverty wages.”
That story’s worth a read in full, but it estimates that “at about 30 hours of work to assemble a vehicle, Tesla would have a direct labor cost advantage of as much as $660 per vehicle over one of the Detroit Three.” Now I’m not sure if that’s Tesla in Texas, California or China, but I’m assuming it’s in the U.S. for these purposes and because Tesla’s Chinese-made cars aren’t exported here.
Either way, the EV age of union negotiations is upon us and it’s about to get real ugly.
Climate, Labor Or U.S. Competitiveness: Pick (Maybe) Two
For now, the usually reliably Democratic UAW’s withholding an endorsement of President Joe Biden as it seeks labor guarantees from the White House. You get why the Democrats are in a tough spot.
What do you go for most? American-made EVs and supply chains? Okay, that could mean fewer U.S. auto industry jobs. Labor? Great, as you should, but see the points on either side about “competitiveness.” The climate? Well, you could let a bunch of dirt-cheap Chinese EV brands into this country with no tariffs for buyers to flock to… and that would probably trash a bunch of our car companies.
These are some of the risks facing the government, workers and the auto industry as this transition takes place, leading Automotive News to wonder what a “Goldilocks”—you know, just right—shift to EVs looks like:
In a too-fast scenario, in which U.S. regulators and policymakers push EV mandates without sufficient supply chain, infrastructure and market conditions, Bozzella said China could gain a stronger foothold in America’s battery supply chain and auto market — an outcome he likened to that of the European Union, which plans to ban new combustion-engine cars by 2035 and faces a threat of cost-competitive Chinese EVs flooding the market.
But move too slowly on electrification, he warned, and there’s a risk of the U.S. failing to scale up in time, allowing China to lock up global EV supply chains and expand into other markets.
Other EV stakeholders and climate advocates aren’t so convinced by Bozzella’s framing of the dilemma, as federal policy actions under the Biden administration aim to address many of his concerns.
Broadly (and you’re welcome to disagree with me here, as is your right) I tend to think fixing climate change isn’t compatible with the hard realities of shareholder capitalism. But these are U.S. jobs we’re talking about, not to mention legitimate, practical considerations for people moving to EVs, like affordability and charging.
Anyway, I’m glad I’m just writing about this stuff and not in charge of figuring it out. I’m busy enough as-is.
Let’s end this week on a positive note, shall we? What new car technology do you actually like? What doesn’t drive you insane?
It’s Apple CarPlay, isn’t it?
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