The most likely outcome of tariffs is that consumers will, at least in the near term, see higher prices and fewer choices. It’s possible some magical combination of factors and deals changes that, just like it’s possible I’ll get tapped to replace Kyle Larson at the Indy 500 and end up chugging chocolate milk at the end of the race. Most automakers are targeting next month for the start of price increases, and that now includes Subaru.
The Morning Dump isn’t here to tell you what to buy or not to buy; that’s for other articles on the site. I will say that if you wanted to buy a Subaru, you might want to do that in the next two weeks. If you’re looking to buy a GM product, perhaps consider the GM credit card, which is getting a revamp this summer to make it more competitive.
These tariffs are disrupting a market that’s barely recovered from years of confusion. More political uncertainty, along with buying habits, are sending a signal to Honda that it might need to reduce its EV spend. Not far from Japan, Chinese companies exist in an entirely different universe, with both CATL and Pony AI showing strong results so far this year.
Subaru Won’t Say The Word Tariffs
A note reportedly went out to dealers this week informing them of price hikes to Subaru models, ranging from $750 to $2,055. In particular, the Subaru Forester will get hit with a price hike anywhere from $1,075 to $1,600, with the increase varying by trim.
Why is this happening? Reuters reports that Subaru won’t quite say:
Subaru said in a statement that the increases were made in response to “current market conditions,” without citing tariffs or specific price actions.
“The changes were made to offset increased costs while maintaining a solid value proposition for the customer. Subaru pricing is not based on the country of origin of its products,” the company said in a statement. Car company executives have recently shared with investors how much the levies will cost them this year, with some in Detroit saying they were expected to add up to $5 billion.
While there has been some relief on duties imposed on foreign auto parts, U.S. President Donald Trump has maintained a 25% tariff on the 8 million vehicles the U.S. imports annually.
Subaru produced about half of its vehicles it sold in the United States in the United States, which is a big number, but the other half were imported from Japan. The company recently said it expected about a $2.5 billion hit from tariffs this year, and it seems the best way it has to offset that in the short term is to raise prices.
Some companies seem fearful of upsetting the Trump administration, so perhaps merely saying “current market conditions” is the easiest way to get around explicitly saying what everyone assumes to be the real reason. More production will likely shift to Subaru’s Indiana facility, but it may not be the immediate boom some might be hoping for. One likely outcome is that Subaru will ship more cars to Canada from Japan to offset cars produced in the United States for this market.
GM’s New Credit Card Sounds Decent
I had one of the greatest grandfathers in the history of grandfathers. He left me no real money or inheritance to speak of after he passed away, but while he was alive, he provided me with an endless amount of attention and love. He and my grandmother also slipped me a lot of money, maybe $20 or $40 at a time, to take girls on dates.
One of his more curious financial decisions was getting a General Motors credit card. No one in our immediate family even had a GM product, except for a Subaru wagon (GM owned some Subaru at the time, so it was on the card, along with Saab). What was he going to get out of a GM credit card? There were also all sorts of weird limits on how it could be used, and I’m not sure any of his rewards were ever even cashed in.
Like all boring dads, I love talking about credit cards for some reason [Ed Note: This is so boring! You’re telling me this is going to become interesting now that I’m a dad? -DT], and I think the better deal is probably something with transferable points. The exception is if you have a specific airline route/hotel you tend to enjoy (for instance, if you have to fly from one Delta hub to another). I’ve never thought about car-specific credit cards, mostly because I can’t predict in advance what kind of car I’m going to want.
If you’re thinking about a GM product, the heavily revised card sounds like it’s fixed a lot of shortcomings with previous GM cards. For one, there’s now just one “GM Rewards” to cover all its brands, as opposed to having to join a bunch of specific brand rewards plans. Additionally, the new GM/Barclays Mastercard has no maximum point limits on redemptions and can be used on services like OnStar or Super Cruise.
The biggest thing for me? The points can be transferred to anyone who signs up for a free GM Rewards plan and can be used on any vehicle without restriction. [Ed Note: Zzzzzzzzzzzz. -DT], Maybe we should do a credit card.
Honda Cuts Back EV Spend By 30%
Honda’s Prologue EV has been a small hit for the automaker, even if the crossover is actually made by General Motors. This deal has allowed Honda to offer an EV without making a big investment. That lack of investment might continue, as CEO Toshihiro Mibe’s press conference early today said the company’s big EV strategy probably needs to be scaled back a bit.
In order to sustainably offer the joy and freedom of mobility, Honda has put the highest priority on its initiatives in the areas of the environment and safety, including an ambitious goal to “achieve carbon neutrality for all products and corporate activities” and “zero traffic collision fatalities” by 2050.
For small-size mobility products including passenger vehicles, Honda believes that electric vehicles (EVs) are the optimal solution for achieving carbon neutrality from a long-term perspective. Based on this belief, Honda made the strategic decision to make a major shift toward the popularization of EVs and has been making progress with various initiatives.
In the meantime, the environment surrounding the automobile industry is changing day by day. Uncertainty in the business environment is increasing, due particularly to the slowdown in the expansion of EV the market due to several factors, including changes in environmental regulations, which had been the premise for the widespread adoption of EVs, as well as changes in trade policies of various countries. In order to maintain its competitiveness in such a business environment and continue to help and inspire people through its mobility products and services, Honda must create new value not only through electrification but also with enhanced application of intelligent technologies, and then offer such value to a broader range of customers in more accessible and affordable ways.
What does this mean, practically?
Two big things:
- A focus on hybrid models as well as EV models.
- A cutback of about 30% on EV investments.
There are a lot of reasons for this. Honda will get hit hard by tariffs, like everyone else, and needs to make up that difference somewhere. At the same time, people aren’t quite as hungry for EVs as some in the industry expected. And, finally, the new administration is going to argue that the last administration exceeded its authority in setting fuel economy regulations. If regulations come down, that’ll make that planned investment less attractive.
Chinese Companies CATL And Pony AI Are Having A Good Week
The largest automotive battery maker in the world is China’s CATL, and the company isn’t content to just stay in China. CATL did a public listing on the Hong Kong Exchange earlier today in what’s now the biggest share offering of this year, according to Nikkei Asia:
CATL’s shares began trading at HK$296 per share, 12.5% higher than the offer price of HK$263, and closed 16.4% higher at HK$306.20. The closing price gave it a market capitalization of about $166 billion. The company is already listed on the Shenzhen Stock Exchange. Shares of CATL opened 1.7% higher in Shenzhen and ended the day up 1.2% on Tuesday.
CATL shares debuted at HK$296 on the Hong Kong Stock Exchange-12.5% above the offer price of HK$263-and closed 16.4% higher at HK$306.20.
“Listing on the Hong Kong stock market signifies our broader engagement in the global capital market,” remarked Robin Zeng Yuqun, CATL’s billionaire founder and chairman, during its listing ceremony on Tuesday. “The zero-carbon era belongs to everyone. When you purchase an electric vehicle, you are contributing to the zero-carbon era.”
The money raised is expected to go towards building out its operations in Europe. At the same time, China’s hot robotaxi company, Pony AI, said it tripled its revenue in the first quarter. From Bloomberg:
Revenue from its robotaxi services jumped 200% to $1.7 million during the first three months of the year. The firm is working with rideshare giant Uber Technologies Inc. for users to access robotaxi services on the platform, and is expected to launch services in the Middle East later this year. It’s also collaborating with Singapore’s ComfortDelGro Corp. on a joint robotaxi pilot programme.
Losses widened to $37.4 million over the quarter, stemming from higher investments in mass production for its newest autonomous driving system and higher employee wages to strengthen its technological capabilities, it added.
These last two news items really go to show the difference between China and the rest of the world. On one hand, you’ve got Japanese and American automakers cutting back on EV investments. On the other, you’ve got Chinese firms raising money to increase their outputs.
What I’m Listening To While Writing TMD
Chris Isaak’s “Wicked Game” is likely the hottest combination of song and video imaginable. I’m not even sure it’s SFW, even though they played this on VH1 basically nonstop growing up in an attempt to titillate the wine moms or whatever. What’s important to note here is that Helena Christensen has apparently only owned a Morris Minor, and it’s a car she still drives around.
The Big Question
If you were an automaker, would you push for more electrification or back off a bit?
If I’m an automaker I’m doing one of two things:
You’re a smart man in my estimation. The first point i think is pretty obvious as everyone but the car manufacturers have been saying this. The second point makes sense and I believe would be a good strategy if your network was reliable. Seems like that’s the plague of the current batch of third party charging stations.
In my opinion, charging infrastructure is given far too much emphasis. The charging network was important when EVs first came out because it made buyers comfortable purchasing an EV. Now, however, market rate retail charging (based on the cost of electricity & maintenance) means that paying for kWhs costs more per mile than does gas. Meanwhile, charging at home costs substantially less. It just means that there is very little incentive for people to use retail chargers unless they absolutely must. In turn, there isn’t much incentive to build more chargers. Especially when many of the incentives for doing so are going to go away.
Tesla had to build a network, and VW was forced to ante up as well. Those days are over, and there isn’t much, if any, money to be made in providing chargers on their own.
If you really think charging networks are a solved problem you should talk to anyone who currently drives an ICE and quite a few who drive EVs. Public charging networks do matter and they’re not good right now.
I drive an EV, and a gas car, and a diesel van. I have no issue with the current public charging network. As Ignatius said, I charge mostly at home (or at work). DC chargers are for rare times when we drive the EV outside of the single charge range. To date I’ve had zero times I’ve needed to charge and couldn’t. I also haven’t waited for a plug. I couple times I’m had a charger be down so I just move to another and charge. Charge for 15 – 20 minutes and I’m on my way.
Do I use our Bolt EV for long trips? No, our Acura wagon is a better tool for that job. We still manage to put more miles on the Bolt than the other vehicles combined and it costs pennies per mile to run.
I’m not saying they are good. Just that there isn’t much incentive to make them better.
You seem to be assuming everyone has access to home charging. A whole lot of people who rent or lease their dwelling place don’t and aren’t going to invest their own money into someone else’s property.
Today EVs are 9% of new car sales and even a smaller percentage of the overall fleet. There simply is no reason that an EV has to work for everyone today. There is still lots and lots of low hanging fruit out there to be picked by selling EVs to suburban families with 2 or more cars and a garage to charge.
Nobody is talking about everyone driving EVs anytime soon. Even CARB’s mandate doesn’t require that. First because it is for ZEVs not EVs and ZEVS include hybrids. And second because even by their own estimations the switch to EVs will happen between now and 2050.
There are decades to figure out how people that live in apartments will charge. The most obvious scenario is that as more people buy and drive EVs more apartment owners will install chargers in their lots and garages. That is already happening today in areas with higher EV adoption rates.
Those people aren’t going to be buying EVs when the cost to charge them is more per mile than gas.
What assumptions are you making (e.g. vehicle model(s), cost of gasoline, cost of retail charging, etc.) to draw the conclusion that retail charging costs more per mile than gasoline?
Electrify America rates are between $.35-.48 per kWh (I’ll use $.40) and as at $3.18/g.
Tesla Model 3 gets about 4 miles/kWh (4.5 in good conditions but not all conditions are good), but there are also charging losses of between 10% and 20%. So I use 10% to calculate how much you pay for, but can’t use.
Toyota Camry Hybrid gets about 50 miles/g
Tesla Model 3 is about $.11/mile in fuel
Camry Hybrid is about $.063/mile in fuel
This same phenomenon occurs across the board for comparable electric vehicle (EV) and internal combustion engine (ICE) models.
Meanwhile, the cost per mile for home charging gives the same Tesla a rate of $.045/mile. So the Camry is closer to the home charging rate of a Tesla than the retail charging rate.
Of course, the payment methods for charging EVs are all over the place. Some may be included with free or discounted charging when the vehicle is purchased, while others are factored into other expenses, such as chargers provided with a hotel room or a few free or subsidized chargers at retail locations. But those aren’t meaningful when considering a significant additional number of people getting EVs. Those free or discounted chargers won’t be viable for their current owners if they get used too heavily, and there isn’t any incentive to attract EV customers when most people have EVs and incentives are removed.
Gas stations make money selling soda, cigarettes, and lottery tickets. Not gas. Fueling a car is quick, which means lots of customers in a short amount of time. EVs sitting in one place for even just three times as long means making money at fueling stations is almost impossible.
The retail price of charging needs to cover all its own costs and the infrastructure to pull all the new power, not just the chargers. There just isn’t much incentive for people to pay retail charging unless forced to on a long trip and no incentive for people without home charging to buy an EV. Hense not much incentive to build chargers.
I agree that the business case for building out a privately funded EV charging network is not favorable if the chargers themselves are to be the main source of revenue. It seems to me that it would make sense to have chargers adjacent to a food court/convenience store, since customers are there long enough to eat a quick meal.
Something that continues to amuse me is how many people thing an ICE/Hybrid/EV can all share an interchangeable platform without huge compromises in capability, performance, and range. ICE/Hybrid/EREV can all be packaged together in a smart way as you’re sharing many component types even if the components themselves are unique. EVs don’t have a fuel tank, exhaust, but they do have a giant pack that only makes sense to use as a stressed member. When you want everything to fit a single platform, you end up with the new Dodge Charger.
I’ve been beating that drum for a while now. It’s absolutely possible to share a platform, but you’re going to struggle to find buyers for such vehicles if you price them high enough to cover your costs.
GM is probably planning to advertise the new credit card in every new car’s infotainment system… Save 5% on your subscription for heated seats and power windows!
Sign up for our credit card and get 1 month of OnStar Plus free!
Full electrification (BEVS) with EREV variants of every model so if the people want gas power they have it.
Anything larger than a fiat 500/bmw i3 does not adapt well to both. A big enough EV pack to have 300mi range requires a skateboard style layout to fit that many cells without a massive cost increase. Meanwhile an EREV wants a conventional ICE layout with a small battery pack in the trunk. Squishing the two together on the same platform means big $$$ and/or large weight penalties.
Sp the only thing you can put those GM reward points toward is GM cars or services?
So lame.
Stuff like “3x points for every $1 spent on eligible GM purchases” is suspect to me. First you’ve got to mess with their points system, just give me the money. Then the word “eligible” is concerning.
I’d rather just have a cash-back card like Discover that I can use for whatever I want.
The GM points can be used for service at any certified GM dealer. Nothing fishy about it.
They have changed the terms with the new card though. My current GM card earns 4% cash back on everything and 7% cash back at GM. The new card degrades this to 3% of everything and 10% at GM. Still, I’m not aware of another card that gives 3% back on everything.
Cash back cards that give you cash are fine – I have several but I haven’t seen one that goes over 2% cash back without some hefty deposit requirements.
(US Bank will give you up to 4% cash back on everything but requires you to put $100K in a US bank checking account earning almost no interest. Bank of America will give you 2.6% cash back on everything with $100K in a BoA checking or savings account or Merrill investment account. That is better as you can at least get a market interest rate in a Merrill money market account)
Unless it has changed from my current card you can also use points to buy gift cards but at a conversion rate were the rewards are only 1% cash back.
The GM card is for GM customers – I don’t think that should be much of a surprise.
If I were an automaker, my decision on electrification would depend on consumer sentiment toward my brand.
Brands with good drivetrain reputation will have a better time going hybrid first to leverage their existing ICE quality.
Brands with bad drivetrain reputations can use electrification as a reset. Maybe their old engine and transmission offerings weren’t great, but EVs are a whole new ballgame, and that means a whole new approach. That will keep you marketable for a while, at least long enough for consumers to decide if you’re better at EVs than you were at ICEs.
I’d only push if I was confident I had a product people want to buy.
I understand why Toyota made a compliance vehicle — because they’re not willing to put their name behind something they want to sell in volume. They put out a compliance vehicle to “play the game they were asked to play” but they’re only intend to put product out the door when they’re ready to do so.
First impressions are a bitch. You don’t want everyone’s first impression to sour them on your brand for decades, especially if they were intended to be conquest buyers. It’ll always be best to play the long game in the end.
So this – just bought a used ’08 Prius for the daughter (the Vibe got totaled). Some of the engineering decisions on this are next level genius. Weight savings was clearly a priority, but not at expense of driver comfort. It is slick and aero, but has Tardis like space inside.
Gen 2 is peak Prius in my opinion – way bigger than it should have been inside but still great mileage and quiet. We loved having ours for the 175k miles we put on it and in a lot of ways it is still my benchmark vehicle when it comes to utility.
The new ones look great and have way more performance than my 2007 but I just can’t imagine them being nearly as useful.
The body panels are THIN, each crease has a structural reason. Hood is aluminium. As an engineer, I respect this.
The interior is far from spartan with interesting material and texture choises. It does not feel cheap or flimsy. It was not cost cut to the bone.
No red triangle of death… holding our breath. The car is solid.
I actually went to the Toyota dealer on a whim to test drive a Matrix to replace our 2000 Corolla on a Black Friday while visiting family 2 states away from home. The interior felt so cheap and plasticky (even compared to the Corolla) that we were totally turned off from it. When we got back to the lot my wife saw the Prius parked a couple spots over – it was 3 years older but with 30k fewer miles for cheaper than the Matrix. We test drove it and bought it that afternoon.
If I were an automaker, I’d be getting an EREV out in anything that carries 5 or more people and/or tows any real weight any real distance.
Then I’d make all the economy offerings a mix of EVs and hybrids. Maybe just PHEVs and HEVs, like the two current Prius choices.
For someone like Honda who believes the future, at some point, is electric, it seems there are 2 options:
Personally, I would be going full speed on electrification, but diversify the type of electrification short term. Other than sports/performance cars, anything else would be a minimum of a full hybrid. I would also want to have platforms, and modular powertrains that could be used in hybrid, EREV, and full BEV applications, with as many common parts as possible.
For Honda specifically, I would want to have a front drive unit that could be largely based on their CRV hybrid setup, with an electric motor and an optional ICE that can clutch in. The hybrid setup would be basically what they have, and there would also be a EREV/PHEV option with more battery and the engine more as just a road trip backup. And a full EV option, that would delete the ICE, and have a next larger battery. All rear drive would be electric. And I would apply the drive system to the minivan/truck/suv platform, actually I would have done that years ago. Parts and architecture commonality between the different drive systems would be more or less priority 1. I’m sure I’m oversimplifying, but it seems like there should be a way to have a very large amount of reuse of electrification development apply to basically all vehicles sold.
I’d have done like Hyundai/Kia did nearly 10 years ago and made a popular platform that could take gas/hybrid/plug-in hybrid/electric. The Kona/Niro platform, that they also used for the Soul, has all the things.
Now though, if I was an automaker with very few electric options, I’d try to get a compact crossover EV around $30k and hybrid around low $20ks.
Who has these options now? The Maverick hybrid started there and now it’s crept into the mid-twenties, the Prius starts in the high 20s. For electrics the Equinox is mid-30s, then with credits can be lower and that’s about it. Lease deals can be had but for those looking to buy a little commuter for the next 10 years that they pay off in 3, what are their options?
The rest of the Lucids and Cadillacs and what not are like “You know what people need? And $80k luxury EV”.
Meanwhile I look over at Europe and they get the Renault 5, the Alpine A290, the Honda E, the Kia Soul EV, the VW ID.3, give us the fun commuter EVs! (note I left out the Chinese brands and they still have a ton of offerings)
Unfortunately there is a fundamental flaw with this logic long term….
“a compact crossover EV around $30k and hybrid around low $20ks”
It costs more to make a EREV or Hybrid than a EV. Duplicate propulsion systems or onboard chargers will always be “more” whether it be packaging or weight. It will cost even more as time goes on and battery prices come down. The consumer is being trained that a BEV is cheaper than an EV, but will they pay a PREMIUM for the BEV when batteries are cheaper? That’ll be the big question 5 to 10 years from now.
Just went to ford’s web site and picked the low end maverick in white with the hybrid and nothing else… $30,535
So you’re at least $6k off to qualify for ‘mid 20s’.
I am firmly of the opinion that the best use for a 300 mile battery is putting 30 miles of PHEV range into 10 cars. But I am also of the opinion that if we had put the tech advances of the past 30 year into ICE efficiency rather than giving Mom-mobiles and monster trucks ’80s Porsche levels of performance we would be better off all-around.
How is it possible that Wicked Game is now a 36yo song? I bought that CD when it was released – I was in college. Sigh. And back when MTV and VH1 actually played videos!
Finally, it offends me that all these companies are too chickenshit to all out price increases as being due to tariffs and Trump’s general bullshit. Every single invoice and receipt should have a line item for “Trump Tax” right on it.
For me I’d rather split that battery up for Aptera style extremely aerodynamic vehicles. 30 Miles of range isn’t 30 Miles of range IRL, and that’s without battery degradation, and if you want the battery to last as long as it can you don’t charge over 80% which unless the usable range is 30 mile means you have a 24 mile range that yet again isn’t 24 miles.
As to your last sentence I’d just put Tariffs instead. People who want to buy American made can easily see how much relative to the purchase price the tariffs are, which is a decent metric as to the percentage of American made content, for the people who don’t give a shit they can see how much the Tariffs are affecting them.
Personally I’m against tariffs across the board, for all countries, and to that end really the only use I see for tariffs are equal retaliatory tariffs in order to get rid of the other country’s tariffs here (I said equal, not equivalent, literally a 1 for 1 copy of their tariff). We’ve seen how much the Chicken Tax has screwed over this country, hopefully it’ll get shitcanned with the new tariffs due to all the current anti tariff sentiment
If you design for 30 miles of real-world range, 30 miles is what you will get. And ultimately, it doesn’t really matter that much. Even 20 miles will let the average commuter do a decent amount of daily driving on electrons.
Nope, this needs to be laid directly at the feet of the idiot responsible for it. No sugercoating. I don’t like tariffs either, but they ARE a useful tool when implemented intelligently. Something that will never, ever be associated with Donald Trump.
C.A.R.B. published a study recently looking at the difference between the EPA / CARB PHEV cycle and reality. They found the test cycle greatly exaggerates the amount of electric miles driven by a PHEV. Per the test cycle a PHEV with a 23 mile EV range will do 50% of miles in electric mode. The reality (using OBD data collected by automakers and forwarded to CARB) is it take 57 miles of range to get to 50% of miles in electric mode. CARB has taken this data and incorporated it into their newest ZEV requirements. To be a ZEV a vehicle must have a minimum range of 70 miles in the 2-cycle CD mode and at least 40
miles all-electric range on the US06 test cycle.
I point this out because regulations play a heavy role in how we design vehicles. I can’t see any next gen PHEVs with EV ranges less than what it take to earn a ZEV credit as that credit is worth $5,000.
(This assumes the Senate doesn’t vote this week to remove California’s waiver that allows them to set their own emission regulations. A bill to do that passed the House last week with bipartisan support.)
That depends on whether or not I, as an automaker, am enjoying a nice hot soak in the tub when asked. If so, I’d definitely want electrification to back off some.
If I’m running a manufacturer, I’m hybrid in all the things.
And as far as Subaru being a bunch of bitches to not upset the great orange one, I guess they get boycotted like the other companies that support, or shy away from the truth. Personal boycott of course. Y’all can do what y’all gunna do.
If I were an automaker I would’ve spent the last decade hybridizing all the things and would currently be trying to wrap up some fully baked EVs. As I’ve said many times, there is 0 reason for commuter cars not to be hybrid at this point. There are basically no disadvantages for things like CRVs, Highlanders, Elantras, etc. being hybridized. They’re faster, more efficient, they produce less emissions, and they’re more refined.
It really is a slam dunk and has been since Toyota and Honda more or less perfected the technology a decade ago. While it’s good that hybrids are, like Hansel, so hot right now, we could’ve done this many years ago and already be reaping the rewards with regard to climate change. I’m not a doomer who’s gonna say it’s too little too late now, but we’re now playing catch up and the odds are stacked against us.
More hybrids also allows the use cases they’re not ideal for to continue to exist by offsetting their emissions and lesser efficiency. Anyway, as is often the case Toyota got it right. They’ve got a hybrid option in just about every single class of car that outdoes its competitors on efficiency right now and they can’t keep them on lots. But they’ve also been quietly working on BEVs in the background and their second generation ones look like they’re going to be very competitive.
The upcoming CHR checks a lot of boxes. It has 300ish miles of range, all wheel drive, 300+ horsepower, and you can drive it off the lot and immediately plug it in to Tesla superchargers. I get that enthusiast response to it has been thoroughly whelming, but I think folks are sleeping on it, especially considering it’s widely believed that it’s going to start in the 30s price wise and undercut the BEES.
It’s a compelling offering that will sell very well…and I do think further developing EV tech is going to be important because I feel like the second generations of them are going to be way, way more competitive and compelling. Once we start seeing rear world 300 mile range NACS compatible BEVs hitting the market in the 30s I think we’ll see a lot of adoption.
Love the Zoolander reference!
If I were an automaker, I’d concentrate on designing platforms that could be used for ICE, hybrid and EV versions. Let the market decide, but be ready for any scenario.
If I were Subaru, along with raising prices I’d broom the CVT and get back into the manual- and automatic-transmission business. Perhaps that would sell enough extra vehicles to offset the price hikes.
If I were Honda, I’d have my engineers slotting a high-winding V6 into the Prelude “concept” and get it into production. Then I’d sit back and let the orders flood in.
If I were Toyota, I’d jack the prices and then “Toyotathon” the bejeebers out of my inventory. Oh, wait, they already do that.
This is something that has begoggled me for too long. Why didn’t they ever. While, I fully understand designing bespoke chassis for EV makes sense, at the end of the day, it’s about volume management.
The volume exists, it just may not be as efficient. During transitions, that’s okay. The battery can be designed to fit where a gas tank would be. The exhaust volume could house wiring. The engine compartment and transmission tunnel has plenty of space for stuff, and the rest of the vehicle remains exactly the same. I recognize batteries weigh a lot, but they could spread it out. The beauty of EV’s is that all the modules are connected with wires, so you can place them nearly anywhere. While an ICE setup is less modular. Again, I say all this from a “transition” standpoint, eventually moving toward bespoke chassis, which is what we actually did, sadly.
I could have been so much easier.
There are a few examples that do this, like the Kia Niro.
The problem you’re running into here is how expensive to make and heavy batteries packs are. Sure you could make multiple unique battery pack shapes, but then you’d also have to beef up all the areas that normally don’t carry much weight. Gasoline’s energy density is 34.6 MJ/L, Lithium batteries 0.4 MJ/L according to google, which means you need 86.5 times more volume for the same energy onboard.
Now obviously ICE engines are only 30-40 % efficient, so let’s cut that down to 10.38-13.84 effective MJ/L. That’s still 26-35 times more volume needed for the same amount of energy. That’s why the entire floor is the battery pack on EVs. You need a ton of volume to have enough electrons, and you have to carry the full mass of that battery pack the entire time whether it’s charged or dead.
The problem with that approach is that the resulting EVs are not going to be as competitive as those built on dedicated platforms. Hyundai realized this and went from electrifying gas models (i.e. Soul) to their dedicated EV platform. BMW is probably the closest to your approach with the i4/3-series sharing a platform, but even that has ~50 miles less range than a model 3.
If you are putting out compromised EVs while your competitors are putting out dedicated ones with longer range and better packaging that’s a tough sell. There might be some economies of scale savings that could allow you to undercut those dedicated EVs, but there’s no guarantee that’s the case. The EV Kona is not any cheaper than an Equinox EV, for example, and it’s worse in most metrics.
You are both right. But, this could have been the approach in 2005, when the trade-offs would have been okay.
Yes, that approach had its day but I wouldn’t do it today.
Good news is that EVs are very similar mechanically, so one platform could get you a lot of different models. If I were running an OEM efforts would be focused on 1 dedicated EV platform to underpin everything from compacts to 3-rows, and 1 hybrid/PHEV/EREV platform for high volume segments. Might need 1 more for BOF trucks etc. if I’m operating in those segments.
That’s a good approach, and probably exactly where things will go. The skateboard approach is going to win over. I bet, eventually, it’ll be folks that build the board, and folks that build the cabin. It’s neat where all this is going.
Sadly Subaru’s engines are just not that efficient. They have to use CVTs to get their vehicles into the same mileage ballpark as their competitors. Adding hybrids to the lineup will help, but those are very unlikely to ever have MTs.
Subaru needs to get over their fascination with horizontally-opposed engines and start making ICE that don’t suck.
Pop was a “GM for life” kinda guy, and he was the one who taught me to find and exploit loopholes. Of course he got the GM credit card.
Every month, he would go to the bank and buy $10,000 worth of Traveler’s Checks (remember those?) on his GM credit card. Then, at the end of the month, he’d use those Traveler’s Checks to pay off his card.
His final new-car purchase was a 2003 Monte Carlo. I think it effectively cost him nothing. I’m pretty sure they closed that loophole because of Pop.
This is like the loophole were for a while you could order $1 coins from the US mint in bulk on a credit card with free shipping and just deposit them back at the bank.
A real shame that, coins are better than bills, I for one wish we lived in the $1 dollar coin universe, hell, why not an all coins universe? Bills are nasty.
I love costing credit card companies money. It’s nowhere to the degree of your Pop, but I have a couple credit cards (Discover and Wells Fargo) that offer cash back on all purchases. Discover is 1% plus a rotating selection of purchases at 5%. Wells Fargo is 2% on everything. I buy everything with those cards, then pay them off in full every month. I then use the cash back to fund my next tattoo. I haven’t paid for a tattoo out of my own pocket in a couple of years now! They’re literally paying me to use their cards.
Indeed. I use cash for nothing. Literally nothing. I keep a couple of quarters in my car so that I can get a shopping trolley at Aldi. Nearly every penny I spend goes through my cards other than some direct-debit bills, and I reap a fortune in rewards annually. Helped by having five-figures of work travel expenses run through them most months.
I don’t have travel cars per se, but I limit my cash-back credits to travel spend only. It’s one way I’m following thru on my resolution to travel more.
Credit card companies are better at tracking fishy spending to game the points these days. There are definately under-the-radar options, but thanks to technology there’s no way you could pull that off today.
Oh, the good ol’ days.
That was a trick that could be done many, many years ago with Canadian Tire money (for those unaware, a loyalty program where you got 3% of you purchase in Canadian Tire paper bills).
Grandfather needed a new pump for the cottage, go into Canadian tire buy something real expensive, collect CT money and return it. Rinse and repeat.
That loophole got closed where you had to return the CT money at the return or get the equivalent docked off the refund.
https://en.wikipedia.org/wiki/Canadian_Tire_money
This has long been solved by the charging of fees for using credit cards for nearly all non-retail purchases. And these days, many retail purchases too. Pretty much all the non-chain restaurants around me now charge 3%-4% for credit card use as an example. This used to be against merchant agreements (though you could always give a cash discount), but isn’t anymore.
Do you live in Western Uzbekistan or something? Totally not a thing in my area.
If he does, then I do too.
Very common post pandemic to have a CC surcharge at restaurants and other businesses.
Or the local FLAPS…
Never seen a CC charge outside of a restaurant or food truck in my area.
I won’t eat at a restaurant that adds a surcharge of any kind to the bill. CC fee – nope. Medical Insurance fee – nope. Set service charge and then an additional line for a tip – nope. Factor your expenses into the price of our menu items or you don’t get my business.
So you’d rather pay the (sur)charge than pay the surcharge.
I would rather have the price on the menu be the price. Not the price + x% + y% + z% It comes down to basic truth in advertising.
Same with sales tax – it should be in the listed price. Sure break it out in the receipt but the price on the tag should be all that is required to walk out the door.
While we are on the subject, service should be included as well. Pay your own employees an agreed upon wage and leave me out of it.
It is so nice to travel other countries and not deal with the stupid gimmicks we put up with in the USA.
My local tire place does it too.
Lucky I had a couple hundred bucks with me the day I discovered that fun fact.
If I was an automaker, my push for electrification would depend on what markets I sell in.
If I was a global OEM, I would still push for electrification. That may hurt me in the short term for the US market.
If I sold a lot of cars/CUVs in the US market, I would try to balance my offerings between EVs, hybrids and pure ICE vehicles. I would task the engineers, manufacturing facilities and supply chain to be capable changing the BEV/HEV/ICE mix quarter to quarter to handle potential changes in demand for a particular type.
If I primarily sold trucks and SUVs in the US market, I would avoid electrification or start to walk it back if I already took the plunge. At most, I would have a small team of engineers benchmarking and developing EV tech incase we needed to offer an EV at some point. We really need a breakthrough in battery tech before large EVs become practical for the masses.
First, hybridize all the vehicles. That’s a good safe bet. Who knows what’s happening tomorrow with a chaos agent in charge. Second, try marketing EV’s with experience events. That way the EV’s are charged and knowledgeable people without a direct financial incentive to make a sale that day can answer questions. Get the local utility company there too for going over charging. Maybe set up a dummy charger so people can do it themselves. A lot of people need to experience things directly to make a decision. Give them that experience. EV’s do an okay job of selling themselves once they’re experienced.
Here’s to hoping a credit card expert hops in the comments –
What the hell do I do with my Amex points? I keep the horrifyingly expensive card as the airports I most frequent have Centurion Lounges. But every time I try to cash in points they seem to be worth far less than my other credit cards.
Back in the day when I had an Amex card I just cashed in the points for gift cards for places I would shop anyway, like Target.
This is the current “scheme” in the points biz now. They are not worth what they used to be worth, and get worth less every day. I just used 200,000 to fly round trip to Europe just to get rid of what I had. I’m done with it, and going to move to a cash-back setup moving forward. They are removing access for norms to get into the lounges, it feels. This is just me, and I’m not flying nearly as much as I used to when I accumulated those points.
In general, you’d going to get the most value from credit card points by transferring them to a partner airline (since, with the exception of Hyatt, hotel points are worth significantly less). You can get 2 cents/point of value quite easily, and more with some patience that way. Cash back or gift cards usually only get you 1 cent (unless there’s some promo where you can get more for a limited time, but you probably wouldn’t want it all in a 1.25 cents/point deal for a few grand in Sephora gift cards or something dumb like that).
The difficulty (or the thrill, depending on which way your brain is wired) is figuring out how to get the flight you want (from United, let’s say) when they aren’t a direct transfer partner, by booking through their partner airlines that are available to you for points transfers – because again, Delta points (which are a direct transfer from Amex) are worth a lot less than American or United points.
I asked chatpgt about it after I posted my initial comment. It basically echoed this.
At one time the best value for Amex points was Home Depot gift cards. At least here in Canada. I haven’t checked in a while as I don’t spend that much at Home Depot anymore, but Amex really helped some of my reno jobs along in the past.
The best credit card is Costco’s Citibank card, full stop. 5% back on gas at Costco and 4% back on gas or ev charging anywhere else. 3% on any travel and restaurants, 2% on all Costco purchases, and 1% on anything else. And you can simply cash in the annual rebate, you don’t have to use it at Costco.
Does the 2% on all Costco purchases apply to the hot dog?
It does! Weiner, weiner, tubesteak dinner!
That makes me 2 for 2 on wiener-related situations today.
……well now I must know what the other situation was
Correctly predicted that Oscar Mayer would be announcing their entry into racing today.
I’m practically royal now.
That was genuinely impressive and you deserve a COTD, certainly!
I’ve got this combined with the Fidelity card – it’s the only free card that I’ve found that also gives you cash back for Global Entry (only $100, so not the full amount) and it’s 2% back on everything, so for anything where the Costco card isn’t 2%+ I go green.
I will say that this GM card does appear to be a 3% everywhere card, so if you’ve got service bills on a GM vehicle it could be worth it.
The one downside is needing a Costco membership to make use of the rewards. Which are paid out once a year. Great card otherwise.
For dedicated travelers, there are cards that offer travel insurance as a perk if the travel is paid for in full on the card. Costco doesn’t offer travel insurance in NY state.
Funny as I was about to drop my Costco Card – mostly because I have the current GM card which offers 4% back on everything. This new card is a step down for current cardholders. (Curious if I get to keep the old terms).
I got the GM card because I have an Express 4500 with a 6.6L Duramax and service and repairs can be pricey.
I have the AMEX Blue card. 6% back on all grocery store purchases. 3% back on gas, restaurants and department stores like Macy’s or whatever.
You have to look for the card that gives you points where you spend of course. We both work from home in our house so the gas cash back doesn’t help me as much but we also don’t travel or go out and love to cook so that 6% back on groceries alone pays dividends.
I’ve thought about the Costco card a few times. I just hate Costco so much. Not enough to give up the deals they have but god I hate them.
Everything you said. Costco is marvelous to their workers but he’ll to navigate on foot or wheels. The AMEX Blue is amazing.
If you have the same AMEX Blue that I do, you’ll get 6% on streaming services too.
I use Venmo’s free card for 3% at Costco warehouse. Somehow everything I buy there is considered groceries. Couch = groceries, Shed = groceries, Clothes = groceries, haven’t tried it on their gas yet.
The card does categories of 3% of your top spend category, 2% for next and 1% for everything else.
Until Costco allows Amex and their 6% blue cash preferred card someone mentioned below, I’ve stuck with this.
Given my free choice, obviously back off until the technology is more mature, cost competitive, and useful.
Given the actual state of mandates, my hand is probably forced into selling more than I want to, and losing money in the process.
Tariffs are taxes, and raise prices. TANSTAAFL.
ETTD
DYKTMM?
You are clearly a person of culture and impeccable taste. Enjoy your smiley!
The President specifically told companies not to pass their higher costs of doing business onto customers, but to instead just eat it and take a loss if necessary, how dare Subaru disobey
As with so many things, this is going to depend on a number of factors. I’m going to assume US market.
If I’m GM, I probably stay the course on EVs, since they’ve done a fairly good job spacing out releases, and probably add more hybrids. I do find it odd how the Blazer EV and Equinox EV occupy essentially the same market segment, but that doesn’t seem to be a problem.
If I’m Stellantis, I might pull back on EVs and focus on improving the PHEVs. Their market isn’t eager for EVs, but improving reliability, range, and/or efficiency could make the 4xe options pretty appealing, and they already sell well enough (with lease deals and such).
If I’m Toyota, I suspect a lot of my customers might be EV-curious, but not really looking to go full EV. I push to make more PHEVs because they sell well and seem to always be in short supply.
If I’m Ford, I probably need to look at expanding my EV and hybrid lineups. The Mach-E isn’t a bad start on selling EVs, but a couple more options would help. The Ranger could use a hybrid and/or PHEV, and I think the Bronco Sport would probably sell well in a hybrid.
If I’m Nissan, I hybridize the SUVs, cars, and probably the Frontier, probably ignore EVs. The Ariya isn’t competitive enough, the Leaf is done, and Nissan can’t really afford to keep trying to push into a market they can’t compete in. A budget buyer could use more efficiency, but maybe doesn’t have access to charging at home, and Nissan can still pull budget buyers.
Kia/Hyundai? I slow down on introducing new EVs. They have a good lineup that can hit enough of the market, so they can afford to just maintain/update those. Just keep them competitive without trying to change the game.
That’s about where I’d put everyone except Nissan who is about to launch a thirdgen Leaf which if they get the price/range right will be red hot.
That’s fair. I’m afraid that they can’t get the price and range right, and I’m afraid they lost the early mover advantage the Leaf used to have. But, yeah, if they get it right, I do think they could pull a lot of buyers who don’t normally even consider Nissan. You’re right and that could be an excellent move.
Chris Isaak remains awesome. My wife and I saw him at a winery last year and he puts on a dynamite show, and not just for people who like to talk about credit card benefits.
If you were an automaker, would you push for more electrification or back off a bit? I would go for more plug in hybrids and EREVs. Kind of a best of both worlds while allowing for real world testing and experiences.