If 2017 was the year of President Trump everywhere else, in the automotive world, it seemed to be the year of Elon Musk. Again. Musk’s Tesla began 2017 with some 440,000 intenders each holding $1,000 deposit receipts for a new $35,000+ Model 3 with hopes they would start to get their cars by midyear.
Tesla ended 2017 with Musk now building anticipation for a new semi truck, apparently named “Semi,” which he says will have a 500-mile range and will begin deliveries in 2019, with a new Roadster model—actually a 2+2 targa grand touring car capable of 250 mph+ and 0-60 mph in 1.9 seconds—arriving at dealers a year later.
Musk said Tesla delivered just 233 Model 3s by the end of the third quarter. When I asked Tesla public relations for an update on deliveries through, at least, mid-December, the response was to refer to Musk’s third-quarter analysts’ call held November 1. Tesla PR said the number of deliveries will be updated in the first quarter 2018 analysts’ call. So it goes.
In reality, 2017 was the year that traditional automakers ramped up their counter-assault on Tesla’s electric vehicles, with plans for everything from fuel cells and solid-state batteries to new ways to make the internal combustion engine cleaner and more efficient. Here’s how I saw the year in automobiles …
Fords with a future: CEO Mark Fields announces a $700-million investment in its Flat Rock, Michigan, plant to build a hybrid Mustang, a 300-plus mile EV SUV by 2020, and a hybrid-powered fully autonomous vehicle by 2021. Ford also will build hybrid versions of its F-150 pickup, and its Explorer-based Interceptor Police Utility vehicle and Taurus-based Police Interceptor sedan. At the same time, Fields attempts to assuage President-elect Trump’s anti-North American Free Trade Agreement position by cancelling plans for a new Mexican assembly plant.
Mary Barra adds “chairman” to her title: General Motors’ board elects its first female CEO to become its first female chairman, as well. Through much of its 109-year history, GM has assigned those titles to separate executives.
U.S. auto sales hits another record: Automakers report January 5 that they sold 17.54 million cars and light trucks in 2016, topping 2015, the previous record year, by 56,211 units. While car sales clearly have peaked, we’ll finish off calendar year ’17 at a still-healthy 17.1 million, according to AutoTrader’s mid-December estimate.
North American International Auto Show highlights: The 2017 Detroit Auto Show featured the new Kia Stinger, Mercedes-Benz E-Class coupe, Toyota Camry, Nissan Vmotion 2.0 concept (the next Altima), Honda Odyssey, Infiniti QX50 concept, Chevrolet Traverse, Lexus LS, and Volkswagen I.D. Buzz concept (a modern EV Microbus). Sergio Marchionne reveals in his annual Detroit show press conference that the next-generation Jeep Grand Cherokee will share the new longitudinal engine platform that underpins the Alfa Romeo Stelvio. Ford shows nothing of significance.
EPA says Fiat Chrysler’s diesel Jeeps and Rams violate the Clean Air Act with defeat devices: Just prior to President Trump taking office, the Environmental Protection Agency announces it’s investigating Fiat Chrysler for alleged fuel economy/emissions test cheating devices on its Jeep and Ram EcoDiesel engines. Fiat Chrysler in May announces it has a software fix to solve the problem.
GM and Honda announce a fuel cell deal: In late January, General Motors and Honda announce a joint venture to design and develop a next-generation, compact fuel cell stack. They plan to build these fuel cell stacks together at a GM plant in Brownstown Township, Michigan, that assembles battery packs for the Chevrolet Bolt and Volt by 2021.
Geneva International Motor Show Highlights: The new McLaren 720S was the show’s runaway hit, though Robert Cumberford also singles out the Fittipaldi EF7 by Pininfarina. Automobile staff also like the Aston Martin Valkyrie, Mercedes-AMG Concept GT, Volkswagen Arteon, Range Rover Velar, Alpine A110, Volvo XC60, and Bentley EXP12 Speed 6e.
GM sells Opel/Vauxhall to PSA Peugeot Citroen for $2.3 billion: The world’s third-largest automaker runs from one of the world’s largest markets¬—the European Union, collectively, is about as large as the U.S. market in millions of annual sales. It’s also a very tough market, with strict regulations, loose enforcement (see, German-brand diesels), and relatively strong unions that make it hard to move assembly plants to former Soviet satellite countries with lower labor costs. In the end, though, it may have been Brexit that pushed the sale over the line. GM’s Vauxhall was stronger in the United Kingdom than was Opel on the Continent.
Trump rescinds the Obama administration 2025 CAFE standard: Automakers selling cars and trucks in the U.S. were required to reach a 54.5-mpg Corporate Average Fuel Economy standard under an agreement reached with the Obama administration in 2010, shortly after the GM and Chrysler loan guarantee bailouts. But the standard always was subject to a “mid-term review” that could pull back the standards. The new Trump administration jumps ahead of that review with an executive order. For automakers, it will offer relief from having to reach the 54.5-mpg CAFE number. However, automakers already were well on their way in engineering new powertrains and lighter, more aerodynamic (and CAFE standard “footprint” measurements) bodies. We’re not likely to see much pullback from those plans, so most automakers will probably be close to meeting the ’25 standard, if a few years late, anyway. What’s more, Trump’s executive order does nothing to the California Mandate requiring a certain percentage of zero-emissions vehicles sold there and in 16 other, mostly coastal states. The California Zero Emissions Mandate already is responsible for cars like the Chevy Bolt and Nissan Leaf, as well as Tesla’s relative success.
Trump wants to tear up NAFTA and place a tariff on Mexican-built autos: After the U.S. auto sales peaks of 2015 and 2016, there’s no shortage of auto manufacturing capacity. As I reported in late March, Trump’s plan to tear up the North American Free Trade Agreement would not push automakers to build new, $1-billion+ factories in the United States (although Volvo, for one, already plans its first assembly plant here). The president specifically attacks Ford for moving Focus production from Michigan to Mexico in 2018, though it’s adding more profitable Ranger pickup and Bronco sport/utility production in its place in Michigan. Ford has since rescinded its plans for a new Mexican plant, and instead will move Focus production to China. President Trump has yet to act on rescinding U.S. participation in NAFTA.
Tesla’s market cap exceeds GM’s and Ford’s: Tesla’s market capitalization first passes Ford Motor Company’s, then in April, General Motors’. Tesla stock has since settled into the low $300s-per-share range, while GM stock has rallied to top the disruptive EV automaker’s cap, again. As of December 21, Tesla was worth about $55.1 billion to GM’s $60.1 billion. Wall Street bulls have defended Tesla’s stock value as a sign of an all-electric future. Tesla will be well positioned to lead that future, the bulls say, though as it continues to lose money and have problems getting Model 3 production up to speed, more and more bears are popping up in the analysts’ community.
Tesla loses $397 million in the first quarter: The losses are worse than analysts’ expectations, but by early June, stock values start to rise again.
Ford fires Fields: Ford Motor Company CEO Mark Fields, a corporate veteran credited for turning around Mazda (which Ford formerly controlled) in the late 1990s, is fired allegedly for lagging on electric car development. The real reason is Ford’s lagging stock value, a bigger concern for William Clay Ford and his relatives, who control the company with 40 percent of its stock. Fields’ replacement is Jim Hackett, hired away from the office furniture company, Steelcase.
GM shareholders reject a dual-class stock proposal: Greenlight Capital wants to split GM stock into two classes [not unlike Ford’s Class B stock] in order to cash in some value out of the automaker. To those of us far from Wall Street it seems the sort of action that would put GM in the same position it was in 12 years ago, when an economic downturn or a change in automotive tastes due to something like a spike in oil prices could lead to serious cash shortage. At GM’s annual meeting in June, shareholders roundly reject Greenlight’s proposal.
BMW 2 Series to lose manual option?: In June, a BMW executive in Germany was quoted indicating that the company would stop importing manual transmission 2 Series models to the U.S. The uproar that caused in the purist-enthusiasts’ community resulted in a clarification. If BMW stops selling stick shift 2 Series models here, it won’t be until the car’s next generation, expected to be the 2020 model year (now less than two years away). Automobile magazine’s Four Seasons ‘17 M2 came with just one option; the dual-clutch seven-speed automatic, because, BMW said, customer demand for the manual created a shortage. I wouldn’t be surprised if the next 2 Series came only with a DCT, which is handy for Level III or IV autonomous features. And the upcoming X2 “sport/activity vehicle” almost certainly will not be offered with a three-pedal layout.
Volvo goes all-electrified by 2019: The misleading headline at Volvo’s own website reads, “Volvo goes all-electric,” but the copy underneath says that by ’19, all Volvos will have an electric motor. While the hyperbole led The Cult of Elon to believe they had won their revolution, at Volvo, this entails everything from pure battery-EV to plug-in hybrid to 48-volt. For sure, the 48-volt revolution is coming, with that technology aiding stop/start systems and in some cases limited EV driving while accommodating the expansion of elaborate infotainment systems. In any event, Volvo’s announcement spurred similar claims later in the year from rival premium automakers.
Nissan launches ProPilot Assist in its all-new, 2018 Leaf: The automated cruise control will start and stop in rush hour traffic, but you still have to keep your hands on the steering wheel, which gently helps you around curves. The new Nissan Leaf’s range is now 150 miles on a full charge, still 78 miles short of the Chevy Bolt’s stated range.
Cadillac launches Super Cruise: Is Cadillac in the autonomy lead? Yes, I think it is, even if Mercedes-Benz and Volvo have slightly more capable systems in the works. As part of Super Cruise’s safety redundancy, GM mapped 180,000 miles of U.S. roads. You must take the wheel of the Cadillac CT6 to change lanes, but otherwise it’s even easier than two-fingertip steering on long, boring Interstates.
Toyota and Mazda announce joint-venture U.S. assembly plant: Likely to be built somewhere in the UAW-bereft Southeast, the joint venture also will help struggling Mazda get into electrified powertrains. Let’s hope it leads to a future for the Mazda MX-5 Miata and Toyota 86, as their Fiat and Subaru deals are not likely to have sequels.
Mazda announces Skyactive X engine technology: Mazda will equip its next 3, coming in 2019, with a compression ignition gasoline powered engine said to nearly equal a similar-sized four-cylinder turbodiesel, and match it for CO2 emissions.
Fiat Chrysler ‘confirms’ it has not been approached by Great Wall Motors: The late-summer denial that a Chinese automaker was looking to buy Fiat Chrysler comes in the middle of a year in which CEO Sergio Marchionne is pretty transparent about his desire to find a dance partner. In my Motor City Blogman column, I note that Jeep and Ram are the two brands that would attract such a partner, and that if Marchionne expected value to be paid for the rest of the brands, the company might have to go it alone for a while longer.
IAA Frankfurt motor show highlights: The Honda Urban EV concept, Mercedes-AMG Project One, a roadgoing F1 car driven onto the stage by Lewis Hamilton (who would soon win his fourth World Driver’s Championship), Renault Symbioz concept, a modern rolling living room, Ferrari Portofino, Hyundai Kona, Kia Proceed concept, and according to Robert Cumberford, the new Borgward Isabella and something called the Aspark Owl.
Delphi splits in two: We don’t often cover Tier One suppliers, but it’s worth noting that this former GM parts division this year split into two companies. Delphi Technology continues to work on updating and improving powertrains, mostly the internal combustion engine, while Aptiv covers autonomy and connectivity. While I often write about automakers’ latest autonomous technology breakthroughs, much of the advances are coming from companies like Aptiv, Continental, Bosch, etc.
GM will launch ‘at least’ 20 new battery-electric or fuel cell vehicles by 2023: While no one has figured out how to make money on BEVs or fuel cells yet, this announcement spurs on GM’s already soaring share prices. The first two new EVs will arrive by mid-2019 and will be based on the current Chevy Bolt, while the new models after that will be off a new electric/fuel cell platform, including what looks to be the C8 Corvette E-ray.
Tokyo Motor Show highlights: The Honda EV Coupe concept, Mazda Vision Coupe concept, Mazda Kai concept (next Mazda3), Subaru Viviz Performance concept (next WRX/STI), Daihatsu DN Compagno concept, and the Toyota TJ Cruiser. In time for the 2020 Olympics in Tokyo, Toyota also displays a new Century limousine and a Tokyo cab, replacing models first designed for the 1964 Olympics that raised the city out of its postwar doldrums.
Tesla loses record $619 million in the third quarter: The cost of developing the much-awaited Tesla Model 3 and its production facility no doubt contributed to all this red ink. CEO Elon Musk says Tesla delivered just 233 of its mass-market EVs as of the end of the quarter, and says ramp-up of production to 5,000 per month now is delayed to the end of the first quarter of 2018—originally, this was the goal for the end of the year.
Peugeot-Citroen launches car-sharing service ahead of return to the U.S.: Free2Move is launched as an aggregation app for Car2Go and Zipcar in Seattle. The app will help PSA relearn the U.S. market ahead of its planned return selling cars here, says North American chief Larry Dominique. PSA will sell one of its brands, Peugeot, Citroen, DS, Opel, or Vauxhall here in the coming years, Dominique tells me, though it’s too early for him to say which brand or when, exactly.
Hyundai plays catch-up in the SUV/CUV segments: Subaru is gaining in total annual U.S. sales on both Hyundai and Kia, so Hyundai announces it will launch eight new sport- or crossover/utility vehicles here by 2020.
Musk unveils Tesla Roadster and Semi: The Roadster, actually a 2+2 targa-roof GT, the semi and the capital infusion from deposits taken on both, ought to divert attention from Model 3 “production hell.”
Lamborghini takes the wraps off its Urus SUV: While I’m way past being tired over the notion of a premium or luxury sport-sport/utility that handles like a sport sedan, except it has more weight and a much higher center of gravity, at least there’s some heritage here in the form of the old Lamborghini LM002. Bad news is that the launching of this vehicle prompted Ferrari CEO Sergio Marchionne to confirm there soon will be an SUV wearing Prancing Horse badges.
GM introduces ‘Marketplace’: The automaker calls it the industry’s “first commerce platform for on-demand reservations and purchases of goods and services.” Basically what it does is divert your attention from the road—assuming you’re watching the road in the first place—to let you order your Frappuccino ahead of time and have it ready by the time you reach the Starbucks drive-through. There’s so much more wrong about this beyond it being yet another attention-diverting way to take your money, not the least of which is the idea that a Starbucks Frappuccino is in any way related to coffee (note: GM doesn’t mention a specific brand of coffee in its press release, but this is the example every automaker uses). On the other hand, we’ve known for a long time that autonomous cars are as much about tracking your every move and selling your data to marketers as autonomy is about safety. In the end, this sort of technology is starting to make me feel proud to be a Luddite, and happy that my Bugeye Sprite doesn’t even have an AM radio.
Mazda drops Laguna Seca sponsorship: Mazda has ended its 17-year sponsorship of the Laguna Seca racetrack in Monterey, California. It’s the result of management changes at Mazda USA in which top brass apparently cannot find the value in racing and performance. Be very worried; this may finally be the true demise of Zoom Zoom.