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- Murilee Martin
Junkyard Gem: 1990 BMW 750iL
- Autoblog Staff
Best shop vacs for 2023

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Editor's Note: In this week's Rant, we reintroduce our infamous AE Brand Image Meter, Peter’s no-holds-barred assessment of most of the brands currently doing business in the auto industry. (Yes, some are left out intentionally). As a snapshot of what’s happening in the business right now, this is a remarkable 9,000-word treatise that will be pored over by industry professionals for weeks to come. In On The Table, we feature the new Lamborghini Urus S, as well as another look at the special limited-edition 2024 BMW M3 CS and a catchy number from Blur. In Fumes, Peter continues with Part II of his new series "The Great Races" – with a riveting look at the memorable 1961 Monaco Grand Prix. And finally, in The Line, the results from this past weekend’s Daytona 24 Hour are in. Enjoy! -WG


By Peter M. DeLorenzo

Detroit. It’s hard for us to believe, but it has been going on four years since we presented our infamous AE Brand Image Meter. Yes, a lot has transpired in that time – let’s face it, the parts shortages, chip shortages, supply chain disruptions and myriad other issues created a perfect storm of profitability for car companies and their dealers. With vehicles being sold before they were even unloaded from the transport trucks, customers were forced to get on wait lists just for the “privilege” of getting their hands on the vehicles of their choosing. As a consequence, brand marketing damn near became an afterthought.

Another consequence? Transaction prices are – or I should say were – at the highest in this industry’s history. Were? Yes, were. Because paraphrasing Mick Jagger, the whip is about to come down. Even though there will be recurring shortages this year – by the way, shortages are now part and parcel of this business and they will continue to vex this business indefinitely – consumers are running out of gas. Prices are too high, financing is crushingly expensive, and payments are averaging hundreds more than they once were before the world went crazy. Not to mention vehicles in need of repairs sitting on dealer lots for months waiting for parts. Talk about a giant bowl of Not Good.

In this calamitous environment, with 84-month – and longer – financing being shoved down consumer throats again and lease prices becoming untenable, it’s no surprise that “brand image” is taking a back seat, reduced to a dismal dance of “How much is that a month?” 

But as much as this environment isn’t conducive to an analysis of brands, Brand Wranglers throughout the Autoverse still quake in their bespoke marketing boots dreading the thought of another Brand Image Meter column. I imagine that it’s like waiting for a root canal appointment: You know it’s coming but there’s not a damn thing you can do about it. As for the weasels and wankers who are riding a perpetually weak brand hand – you know who you are – it is going to be a particularly Bad Day. Ah well, who said life in the auto biz was going to be all bunny rabbits and rainbows, right?

There’s a reason our Brand Image Meter issue is one of our most-anticipated and widely read columns of the year. Brand image wrangling is the mystery science that brings out the best – and worst – in auto executives, with some being naturally savvy stewards of their brands, while others stumble around lost in the desert, achieving only fleeting success. The rest? Well, to say they well and truly suck at it is being kind.

If we were a certain kind of publication, our Brand Image awards would come complete with glittery trophies and massive publicity campaigns attached, and we would be ka-ching-ing a happy tune as auto companies advertised their success to the world, with the Autoextremist brand logo prominently displayed in those ads. But we’re not slimy purveyors of vacuous marketing streams, thank goodness. We are, however, confident in the knowledge that the AE Brand Image Meter column has been in the top three in unique visitors and page views each and every time we have presented it, garnishing loads of buzz and in some cases, voluminous and pitiful “woe is me” and "we're screwed" hand-wringing in executive suites throughout the industry. And coming up on our 24th year of publication, that’s not about to change.

As I’ve said previously, when it comes to the power of brands and the inescapable importance of brand image, it’s the one thing that car companies – both good and bad – cannot escape. How a brand is perceived can make or break a car company, regardless of how long and illustrious a run that brand has enjoyed up until any given point in time, because one false move or one discordant note can be crippling in a matter of months.

Not surprisingly, none of that has changed in the dawn of the EV Age. Image wrangling is still the Number 1 priority in this business. Why? The democratization of technology – particularly with the use of EV “skateboards” – and luxury has allowed auto manufacturers the world over to have access to the crucial ingredients that make automobiles desirable. And with supplier expertise greater than ever, any car company can dial up a bitch’s brew of ingredients to compete in almost any segment they set their sights on. But does having the right cocktail of ingredients mean that success will be guaranteed? Not a chance, because the expertise of the rest of the organization in terms of design, engineering and product development comes into play. And even if the entire package is indeed thoroughly executed to the highest of standards, the last and most meaningful ingredient – brand image – has to be there in order for the effort to come together.

Sounds easy enough, doesn’t it? Dial in the correct brand image and everything will be good, right? Yes, but it’s just not that easy. Far from it, in fact. This business is littered with strategic missteps, ham-fisted executions, endless streams of miscalculations and that ever-present danger – rampant cluelessness – that can serve to impede a brand image from resonating in the market. Get it right and a manufacturer can live to fight another day. Nail it perfectly and a company may be able to build sustained momentum for a brand for years to come. Get it wrong and it will guarantee a life of misery for a brand as it flounders and sputters in the market.

Winning car companies understand that expert brand image wrangling can make or break their efforts. Having outstanding products is a fundamental requirement, of course, but knowing how to present those products and being able to expertly nurture a brand’s image completes the equation. And less-than-winning car companies, or car companies only intermittently able to be on their games for whatever the reasons – infighting, lack of talent, abject stupidity or all of the above – pay for their mistakes exponentially, compounding their troubles with each misstep.

That there is such a wide range of talent in the auto marketing ranks is no surprise, because it’s indicative of the general reality for the business as a whole. But this gaping disparity between a few star performers and the rest in the automotive marketing arena can have a devastating effect on a brand’s image, as you’ll see below.

Yes, some of the brands I’ll talk about today are blessed with auto marketers who actually get it and who know what their brands stand for (and almost more important, what they’re not), and the understanding that sometimes it’s better not to screw things up rather than set the world afire with their “I’m a genius, just ask me” brilliance. Other brands suffer the consequences of marketers who careen around throwing ideas and executions up against the wall to see what sticks, and their respective brand images pay dearly for it.

In this column, I assess automotive brands on their fundamental raison d’etre, and of course, in turn, the people responsible for shaping what those brands stand for directly or indirectly find themselves in the crosshairs too. And believe me, no matter where these marketers fall on the competence spectrum, many of them believe that they’ve got it goin’ on, even though that isn’t even remotely the case.

Automotive marketing is a very big deal. And expert brand image wrangling is a crucial part of making all of the effort to design and engineer great products worthwhile. Billions of dollars are spent on brand image wrangling by the auto companies each and every year. Why? Because having the “right” brand image is absolutely essential for market success.  

Executives at the underperforming car companies get into trouble because they actually start to think that they’re selling something they’re not, which leads them to deluding themselves into thinking that their products are something other than what they are. In other words, an incurable case of brand delusion.

And when the people running the company don’t know how and why the brand earned its chops to begin with and are confused as to what their brand stands for now, how can they possibly guide it properly? The painfully short answer? They can’t. And even worse, they allow the wrong products to creep into their portfolios, which ultimately will lead to a corrosive level of brand dilution. 

Add to all of this the sobering fact that with the onslaught of electrification, some of these brands are going to suffer greatly. There’s no soul in BEVs to begin with, and subtract the distinctive sounds associated with some of these brands, especially the luxury brands, and you have a recipe for disaster. Generally, every brand should be on alert because of the sameness of electrification, and the chances it could all go bad for some of them are very real. 

On that jarring note, the difference between getting things right and getting them horribly wrong when it comes to this brand image wrangling business is the finest of lines. But then again people are paid very well to do these jobs, so it’s okay to expect them to know what they’re doing, even though some clearly don’t.

So, who is on their game right now when it comes to this business of brand image wrangling? And who doesn’t even have a glimpse of a clue? Who deserves a bone or two, and who will go to bed without a treat? Let’s do it, shall we? Frankly, I think it’s important for me to say right up front that most brands are so fu-ked up now, I hardly know where to begin…

Acura. You could ask the following question of every brand in this column: What is _____ and why does it exist? In Acura’s case, does it represent the best of Honda? As someone who remembers the cool Acuras, like the high-revving Integras and such, I want it to be, but is it really? No. Sure, the NSX checks all of the right boxes, but what does it have to do with the rest of the lineup? Not much, it turns out. Acura continues to operate on the fringes of the top-tier luxury-performance segment, and it remains an enigma. Will this ever really change? I seriously doubt it. The honchos at Acura seem to think that they’re on the right track. They’re not of course, but unless and until they realize it, it’s more alphabet soup from Acura. This situation may well be enough for the overlords at Honda, but if I was associated with marketing Acura it wouldn’t be enough for me. Are Acura vehicles good? Yes, but you just feel that the brand is perpetually running in place, while lacking in overall juice. Acura and its ad agency continue to try to position Acura in the market, and they continue to fail miserably. Their latest foray is a new brand campaign based on the theme New World. Same Energy. Acura PR minions describe it as "taking viewers on a fast-paced journey across the Acura multiverse in the brand’s Precision Crafted Performance vehicles. The new action-packed 60-second spot celebrates Acura performance and includes a first look at the brand’s all-electric future." Who they're aiming this spot at exactly is anyone's guess, but here's the High-Octane Truth: It's a visual kaleidoscope of Sound and Fury signifying not much, and it will do nothing to raise awareness or drive purchase consideration for the brand. Watch it here. Oh, and by the way, using "Voodoo Child" by Jimi Hendrix for the electrification component of this campaign makes my head - and heart - hurt.

Alfa Romeo. Yes, I really appreciate the fact that Alfa Romeo is officially the “march to a different drummer” Italian brand, but the painful reality is that Alfa Romeo is a niche brand that will always operate on the far edges of the automotive enthusiast spectrum. I used to think – albeit briefly – that this would be enough for the brand to survive here, and with the addition of the smaller Tonale hybrid crossover, maybe that will be the case. Does Alfa Romeo really have a long-term chance in this market? Alfa operatives assigned to this task fervently believe so, but will be that enough? Wishful thinking doesn’t count for much in this business.

Aston Martin. If we go by the press releases alone, Aston Martin always seems to have it goin’ on. They’re churning out limited editions and special editions, and their luxury SUV – the DBX – may just save the company. Fortunately for Aston Martin, the brand isn’t for everybody and in the nose-bleed segment it operates in, it still has an image of speed, power and drop-dead gorgeous design. But will that continue as the brand makes its obligatory foray into BEVs? That is highly questionable. But in the meantime, as long as Aston Martin continues to build some of the most stunningly beautiful cars on the road, machines that unquestionably live up to the legacy of the brand, it will be fine.

Audi. Audi has worked hard to ascend to the top tier of mainstream luxury brands here in the U.S. along with BMW, Lexus and Mercedes-Benz. But its transition to EVs – and the relentless price creep of its products – is presenting the brand with some daunting challenges. When Audi was a happening brand it could get away with its own version of the classic German automotive arrogance, but now? Not anymore. Audi doesn't just have a brand image in flux, it’s in serious trouble. I am confident that the Marketing Meisters at Audi will still take themselves much too seriously and allow their “holier than thou” attitude to dominate the advertising, which results in smarmy and annoying work. But that isn’t going to do much to alter the perception of Audi right now. It’s no longer a happening brand, even though Audi operatives refuse to admit it. No bones for you, Audi.

Bentley. Okay, to me the Bentayga SUV is an insult to everything Bentley should stand for, but this just in: Bentley can’t make enough of ‘em. Is the Bentley brand intact even after its foray into giant SUVs? Sure. In fact, some would argue that the brand has been made even stronger. I’m not one of them. I see that Bentley is teetering on becoming just another car company, and whether it can survive this latest chapter remains to be seen. I would still take a Continental GT V8, thank you very much, but it’s the Bentayga you see most of on the road these days. Is that the image Bentley wants to project? It seems that Bentley operatives are quite pleased with the ca$h-ola and the profits from it, so the answer is “yes.” But Bentley’s raison d’etre is being seriously challenged here, and where this shakes out is another giant “we’ll see.”

BMW. The ubiquitous German brand, which once upon a time in a galaxy far, far away created its destiny with the funky little 2002, has shockingly become something else altogether. The blue and white “propeller” logo has become so ubiquitous on the streets and byways in the U.S. that it is akin to being the Chevy of German luxury brands. This is the result of leadership teams over the years pushing the brand into every segment – both real and imagined – that seemed to make sense. This quest to be in every garage in every well-heeled community in America has delivered vast profits for the propeller brigade, but it has gutted its brand integrity. Yes, they still crank out “M” versions to remind everyone of what they used to be about, but they’re not fooling anyone anymore. And the Bucky Beaver front ends are difficult to warm up to, to put it mildly. BMW is just another car company cranking out SUVs and crossovers because, well, that’s what it is now and that’s what this business has become. Fold-in the brand’s constantly increasing prices, and you have a giant Wiener schnitzel of Not Good. Do any of these parameters change with BMW’s aggressive push into electrification? No, because all of the aforementioned negatives are not only present and accounted for when electrified, they’re exacerbated. BMW’s brand image is boneless, lost in a choking haze of profitability over integrity, and there’s no point wishing that somehow this will change. 

Buick. This GM division is a fully engaged SUV and crossover company now. And Buick is operating on the conceit that more SUVs and crossovers can only be construed as a good thing. (It does kind of remind me of the halcyon days of Oldsmobile when if one Cutlass was good, six of them would be even better.) What does it all mean? You can forget about all of those visually arresting Buick concepts from the last few years, because Buick is all-SUVs-and-crossovers-all-the-time now, complete with a brand image as memorable as that old pair of socks that never leaves your sock drawer.

Cadillac. This division is undergoing the most dramatic transformation of all of GM’s brands. Hard on the heels of launching some of the finest high-performance American cars ever built – the CT4-V Blackwing and the CT5-V Blackwing – Cadillac is now turning the page and going all-in on a fully electrified lineup. While it will stay the course with its luxury SUV juggernaut/ca$h machine – the Escalade – for the foreseeable future, the real action unfolding at Cadillac is its electric lineup. Except “unfolding” might not be the best word to use in describing the rollout of Cadillac’s EVs. Cadillac has delivered 122 Lyriqs in total. One hundred twenty-two. Making sure the car is up to snuff in every way possible, Cadillac slow-walked the Lyriq’s introduction into the market to the detriment of its credibility. Make no mistake, the Lyriq is a wonderfully executed vehicle in terms of design desirability, engineering and on-road presence. But the ramp-up has been pathetically late, wasting months of outstanding advertising in the process. GM is assuring everyone that the Lyriq production cadence is now accelerating to meaningful numbers. Let’s hope so, because there has been a lot of time, energy and marketing budgets expended on it. And it’s time to put up or shut up as they say. The handbuilt, super-limited, hyper-luxury Celestiq on the other hand, is one of the most exciting automobiles to come out of the Motor City in decades. The Celestiq is all about enhancing image, projecting prestige and presenting a technical tour de force for Cadillac and GM to the world. And it delivers on that promise in prodigious amounts. The Lyriq, however, is aimed at the heart of the upper-mainstream luxury market. And GM has to get it out in the market in appreciable volumes in order to deliver on the brand image it wants to project. Cadillac marketers have the monumental task of creating that magic "I want one" for the brand. And that goes beyond making consumers take notice, especially in this new EV era. It’s all about creating desire for the brand. Cadillac has a historical legacy matched by few automotive brands in the world, yet it doesn’t occupy nearly enough space in the luxury market, which is a giant wreath and crest of Not Good. No bones available. At least not yet.

Chevrolet. There’s no question that nurturing one of the most iconic American brands of all time presents one of the biggest challenges in automotive marketing. If Chevy marketers spend too much time wallowing in nostalgia, they’re in danger of miring the brand in the past, which would threaten to leave it behind in the market. If, on the other hand, they get too far over their skis, there’s a danger of projecting the brand as something it isn’t. We’re talking again about an extremely fine line here. And while operating with one of the biggest marketing budgets out there, the stakes for Chevrolet marketers are huge. A distinct advantage Chevy marketers do have is that over the next 18 months they will have one of, if not the strongest product portfolios in the market. The key for Chevrolet will be its mainstream EVs, which will hit the heart of the market at exactly the right time. Add to this the continuing success of Tahoe, Blazer, Suburban, Silverado and of course, Corvette, and Chevrolet as a brand has a huge upside. With all of this potential marketing momentum, the only thing missing for Chevrolet is a new advertising theme line, as “Find New Roads” has decidedly run its course. Bones in limbo, for now.

Chrysler. Would you miss it? Because the “why” of Chrysler – other than vans – has been lost for a while now. Is that going to be enough? Nope.

Corvette. The rollout of the eighth-generation mid-engine Corvette has been everything GM and Chevrolet had hoped it would be. A milestone machine, the eighth-generation Corvette presents the latest – and very best –  thinking of GM’s True Believers, and it’s a remarkable statement for the end of the ICE Age. With the unveiling of the hybrid E-Ray Corvette, and new Corvette models due to appear in other segments, Corvette as a brand is solidifying its reputation as a force to be reckoned with in the market. And for countless True Believers of the brand, it is long overdue. Despite too many previous GM marketing missteps with the brand, the Corvette name and image have managed to shine through. And I expect that this will not only continue going forward, it will be enhanced. In fact, until further notice, the Corvette shares the top tier in our AE Brand Image Meter. 

Dodge. It’s duly noted that muscle cars and cop cars are this brand’s thing. Is that enough to go on? Apparently not, as Stellantis is promising “new” muscle-fied EVs, complete with artificially-projected growling sound effects. Let's just say I won’t be shocked if a great deal gets lost in the translation. In the meantime, Dodge is the brand for people who don’t want to live in today’s world. Can’t say that I blame them, but the harsh reality is that the life expectancy of this muscle circus is fading fast.

Fisker. A brand that’s perpetually on the come, one that always seems like its time in the spotlight is right around the corner. But, WTF is it? And when? And why? Until further notice, it’s the official “It Won’t Be Long Now!” brand.

Ferrari. The brand with the impeccable legacy and unequaled image seems to find a never-ending supply of moneyed enthusiasts to seduce. That some of those true Ferrari enthusiasts are drifting off to other shiny automotive objects, or drifting off of this Mortal Coil permanently, is not lost on Ferrari management. Ferrari’s answer? Ramp up its volume, as in almost 50 percent more, while continuing to deliver an endless supply of sensational cars, like the nostalgia-fueled Roma and the luscious 296 GTB. Add to these machines the stunning, V12-powered, $400,000 Purosangue crossover, and you have a brand that’s not only not shying away from the realities of the market, but instead one that’s putting its foot down hard on the throttle. Can Ferrari prove to be different from the other hyper-luxury high-performance manufacturers by being able to hold on to its rarefied brand image? It already has. Which is why it remains at the top of the AE Brand Image Meter along with the other select few. Ferrari gets a prosciutto-encrusted T-Bone, at least for now.

Fiat. Really? It's dead to me.

Ford. It’s no secret that I’m not buying the “Grand Transformation” at Ford under its current CEO Messiah du jour, who is desperately insisting that Ford will be something that it will never be: a tech company that happens to build vehicles. The CEO suffers from the “whoever he spoke to last” syndrome, which dictates direction and perceived relevant thought. The result is a careening CEO with an organization scrambling to make sense of his latest weekly missives. Setting that aside, Ford is a car company of wild contradictions. On the one hand, it's one of America's iconic brands, boasting the F-150, which is the envy of the industry, the Bronco – which will soon be piling up on dealer lots as the first on the block syndrome has run its course – the Mach-E EV, and the most important new product Ford has introduced in decades in terms of affordability, the Maverick. On the other hand, where Ford goes from here is anyone’s guess. Is it a mobility company? I’m not buying that in the least. Especially if the pursuit of mobility forces the company to take its eye off of the ball and gets in the way of Ford’s real bread-and-butter business. If, on the other hand, Ford puts the pedal down hard and keeps its product focus and momentum, it can remain a formidable competitor for the foreseeable future. The AE Brand Image Meter rating for Ford is split. If we’re talking about the F-150 pickup, it’s white hot and one of five top-rated brands in our ratings. As for the rest of the machinations going on at Ford, like the endless recalls and the endless self-promotional bluster of its CEO? Boneless. And the less heard about that, the better.

Fu-King Motors. James “Jimmy” Fu and S. L. “Sonny” King have admitted to me that the entire company is on hold, except for the six-wheeled, all-electric, Fu-King Gargantuan SUV. They freely admit that the shortages have decimated Fu-King Motors, and in the meantime, they’ve been spending a lot of their downtime partying. (Shocker -WG.) The only “new” news about the Gargantuan is that its six wheel-driven electric motors will have a projected output of 2,500HP, a 500HP increase. Add to that incredible number the following: 10,000 lbs.; retractable electric step ladders (“not steps, ladders,” Jimmy insists) and “a look that will humiliate all that other crap out there,” according to Sonny. When I asked about the price, Jimmy and Sonny answered in unison in their now standard refrain: “Enough to make grown men cry!” Any other plans while waiting the chip shortage out? “Press conferences!” they said in unison. “Dog and Monkey shows!” Seems logical, at this juncture. “We dangle the bait and flip the switch!” I could have pointed out a few linguistic disconnects at this point, but I didn’t bother. I admit to being completely biased in all of this, but Fu-King Motors remains the greatest brand of all time. All hail Jimmy and Sonny – the Kings of Boneville! 

Genesis. The luxury division of Hyundai is presenting machines that are exceptionally executed, artfully rendered and offering real value in the luxury space. The real challenge for Genesis marketers is to go beyond the brand’s early adopters in order to gain consideration from those serious consumers out there with the financial wherewithal to actually buy or lease one of their vehicles. Not an easy task by any means, but the Genesis products are beautifully turned out and hold up to close inspection. Right now, word of mouth and favorable reviews are carrying the water for Genesis. But that can only go so far and will take a long, long time to gain traction. Genesis needs a serious, big-dollar, consistent marketing push. It won’t earn its bones in this market without it.

GMC. This brand just keeps on chugging, in some cases even defying rational thinking. Everyone knows that GMC vehicles are massaged versions of Chevrolet models, but the difference is in the details, and right now consumers are digging those details. And it’s no secret that with each new model iteration, GMC is carving out its own distinct product identity. As for GMC advertising, it has been a hit and miss affair. When it hits, it’s pretty good. When it misses, it’s eminently forgettable, when it’s not annoying. (The Queen ‘We Will Rock You' clapping spot is enough to make me puke every time I see it -WG.) I chalk up GMC's success to a very clear-cut marketing reality: For consumers, GMC isn’t a Chevy, which apparently counts for a lot. And it’s not a Cadillac, either, which in their minds counts for even more, not being showy types and all, even though GMC pricing is awfully close to Cadillac. GMC is a solid brand – the kind that has a T-Bone steak and eggs for breakfast – which in this chaotic marketing world is really saying something.

Honda. The brand with such a rich legacy seems to be on the rebound with consumers, which is noteworthy. Honda is touting that it is getting back to its roots, with company operatives insisting that’s why things are on the upswing for the brand. But at the same time, Honda and its dealers have been crippled by the lack of products available to sell. In fact, it has been a dire situation for months now. And we’re talking dire. Honda enjoys a positive brand image for some very good reasons, but unless and until it can fix its production issues, that isn’t counting for much and the marketing won’t matter. Honda used to accumulate bones by the bushel. Not anymore. Now it’s one, hard-earned bone at a time.

Hummer: It's the brand that never went away, even after GM put it on the shelf in the heat of the bankruptcy. And that's a good thing, because before GM operatives put Hummer to sleep, it was the King of Off-Road, with even Jeep reluctantly having to play a gloomy second fiddle to it. Now? Hummer is back. Electrified, fortified, magnified and ready to take its rightful place at the top of the heap, nothing comes close to it in the segment for that matter. Hummer enjoys a truly legendary brand image, and it's right back at the top level of the AE Brand Image Meter.

Hyundai. Hyundai continues to suffer from a severe case of TMMS (Too Many Models Syndrome), which results in a confusing showroom filled with a lineup of cars and SUVs that blend together and land on top of each other in the market. But there’s no denying that these are, for the most part, excellent products. The fundamental problem for Hyundai marketers is telling its product story in a compelling way, while presenting an image that resonates with consumers. So far, they’re doing this in spurts – some good and some bad – but that’s not even close to being good enough. Brand image? Confused. The word of mouth about Hyundai among consumers is stronger than the actual marketing and advertising being presented. That’s good, but it’s not enough to get the brand where it needs – and wants – to go.

Infiniti. Quite simply, Nissan’s luxury brand has had its following, a core group of consumers who for some reason can’t be bothered with other Japanese brands, let alone with the go-to German luxury brands. In the past, you would call Infiniti the “marching to a different drummer” brand, but that would be attaching too much gravitas to it, and besides, Alfa Romeo has now claimed that space. No, Infiniti has been a cynical ploy by Nissan to grab a share of a market that it believes it has just as much right to as any other manufacturer. Except everything about Infiniti seems like Nissan operatives are phoning it in, and devoid of a single original thought. Infiniti is now officially a “ghost” brand, one that’s invisible except for the select few who have been issued the special glasses from the factory so that they can appreciate the inherent goodness of the brand. Brand Image? A well-intentioned – albeit boneless – afterthought. And one not long for this world without a major reboot.

Jaguar.  Jaguar used to be on a brief roll. Now? It doesn’t exactly feel that way, does it? The brand still has a brace of excellent vehicles, but that may not be enough when the next Giant Automotive Downturn happens. That’s when brands like Jaguar will take it on the chin.

Jeep. This American icon used to occupy a top spot in the AE Brand Image Meter, but there are signs that the magic has slipped. Stellantis marketers and product planners have a serious case of the Red Pricing Mist, exemplified by the usurious option prices put in place on Jeeps. It has gotten so bad that it’s almost laughable, if it wasn’t so pathetic. The Jeep option list – which is an homage to Porsche marketers, the OGs of Greed – creatively gouges customers in the interest of considerable short-term profits. But long term, that pricing strategy is hurting the company. Jeep customers basically have to sign up for a vehicle and then build-out what they really want with the pricey option list. The result? Jeep prices are soaring through the roof. No, I’m not against auto companies making profits, that’s the name of the game after all. But gouging people? That’s another thing altogether. It’s no secret that this brand, with the impeccable credentials and unrivaled imagery attached to it, has benefited from some superb image wrangling. But all of that wonderful image wrangling comes apart when showroom prices are too damn high. Yeah, Jeep is still near the top of our AE Brand Image Meter, but it’s coming dangerously close to screwing the whole thing up. 

Kia. It used to be the case that consumers didn’t really care how Korean auto executives parsed their brands, because Kia and Hyundai both fell into that subset of “deal” brands in the American market. Then the hotter-than-hot Telluride came along, which changed the game for Kia, moving the needle for the brand in a big way. But it proved to be only the beginning, and Kia’s days of being the “commodity car” brand are long gone. In, fact, the company’s bold move into electrification with its spectacular EV6 has changed the game again, and Kia has ascended to be a frontline player, occupying one of the top spots in our AE Brand Meter.

Lamborghini. This exotic, high-performance Italian supercar brand is aimed at knowledgeable enthusiasts who don’t worship at the altar of the Prancing Horse. Everything about Lamborghini has been elevated, from the products to its brand image. In ancient times, the name Lamborghini would never have been uttered in the same breath as Ferrari. Now? There are plenty of enthusiasts out there who consider Lamborghini to be the most desirable exotic Italian sports car. Add the runaway success of the Urus to the mix, and Lamborghini is healthy, happy, boned-up… and H-O-T.

Land Rover. That these super-luxury crossovers and SUVs have found such favor in suburban jungles across America is still a little bit hard to believe. It wasn’t too long ago that Land Rovers were something to appreciate but not drive, because they were too problematic for most people to deal with. Now, bristling with cachet and boasting sumptuous interiors, Land Rover has become one of the touchstones of affluent suburbia, and another brand at the top tier of the AE Brand Image Meter.

Lexus. Toyota’s luxury brand has moved beyond the “excellent service and customer care” brand to occupy the steadily consistent and predictable luxury space. And that’s just fine, I guess. Are the cars good? They are. And there are plenty of people – the Lexus core buyers to be exact – who like Lexus just the way it is. Impeccable customer service still resonates, of course, and as long as Lexus doesn’t stray too far from that winning formula, it will continue to be a bone-filled force in the luxury market.

Lincoln. Lincoln has come a long way. The switch back to names helped rejuvenate the brand, and Lincoln’s calculated product development direction to make its interiors sumptuous and alluring paid huge dividends. But the buzz around the brand has stagnated. Lincoln has a name with historical relevance, but that is no longer enough. This is a business that revolves around the idiom of “what have you done for us lately?” Which begs the obvious question to Lincoln marketers: What exactly have you done for us lately?

Lotus. Talk about the OG “marching to a different drummer” car company, Lotus is that and more. Colin Chapman, who rightfully sits among the greats of automotive history, was the brilliant innovator whose designs for Lotus racing and street cars remain legendary to this day. The fact that Lotus still exists with its founder’s name on it is one of the miracles of the modern automotive age, as its tumultuous history can attest. But then again there have always been True Believers associated with the brand it seems, and they have managed to keep the flame alive through some very lean times. Lotus cars aren’t for everyone, thank goodness, and it’s easy to see why people seriously looking at the Porsche 718 don’t give the Evora even a sideways glance, and won’t give the upcoming Emira a cursory look, either. But that will be their mistake and it’s probably as it should be, because Lotus has always appealed to iconoclast enthusiasts, those who march to a different drummer themselves. Lotus has had an infusion of ca$h from China, and I believe the future of the brand is secure. Lotus has a new glow and new hope.

Lucid. The marketing for the Lucid Air has been some of the most arrogant in automotive history. As in “We’re Lucid, and you’re not.” And that was all well and good for a while, until the handful of first-on-the-block buyers played out. Now, Lucid finds itself in a deep, dark hole, sitting on fully-loaded examples of its EV sedans in a market that’s looking for clarity. Translation? More affordable EVs. And Lucid intends on playing in that space, but it’s not going to be soon enough. The “air” at Lucid headquarters is bone-chilling. And there’s no warmup in sight.

Maserati. This luxury performance machine is the attractive Italian sports car brand name with a historical legacy that repeatedly suffers in comparison to the rest of the competition. Does Maserati have attractive cars? Yes, somewhat, but the brand is not top of mind. In other words, Maserati exists, but in a galaxy far, far away from the real luxury-performance retail action. Will the Grecale SUV save the company? It might keep the brand above water, but just barely. The AE Brand Image Meter? The bones are few and far between for Maserati. It still has some appeal, but only for those who still give a shit.

Mazda. Even though Mazda builds some notably outstanding cars, the brand always seems to be scrambling for respectability. Will it ever be more than it is right now, the scrappy purveyor of interesting cars if you would just take the time to look, and a media fanboy favorite? I seriously doubt it. And with Mazda operatives now pursuing a level of elevated legitimacy, are there any guarantees that Mazda can take the next step up? No. Sometimes big-league brand image wrangling involves knowing what the brand isn’t. If you’re into the brand, it’s hot. For most of the rest of the automotive world it’s – did you see those NFL championship games yesterday?

McLaren. This exotic English sports car micro-manufacturer keeps pouring on the credibility by building formidable high-performance machines that supersede the one before. Except that they’re getting dangerously close to churning out too many incremental variations on the same theme, which is annoying because it suggests that they’re listening too closely to the dulcet tones of their own thought balloons. That said, though Ferrari may dismiss McLaren as a legitimate threat to its perpetual dominance of the hyper-exotic car market, the British supercar maker boasting the legacy of one of racing’s true legends keeps making serious inroads onto Ferrari’s turf. I wouldn’t bet against McLaren, because the entire organization is focused on delivering excellence, except when it comes to its lukewarm racing exploits, apparently. 

Mercedes-Benz. As I’ve said countless times before, when Mercedes is “on” – see the new, electrified S-Class, the various Mercedes-AMG entries and the perpetually hot G-Class, for instance – they build absolutely glorious machines that live up to one of the great legacies in the automotive world. When they’re off, well, they can stink up the joint like no other. Part of the problem is the fact that Daimler is forced to stretch out its model lineup because it’s trying to fight a brutally competitive auto world without the resources of the other auto manufacturer conglomerates. But the majority of the problem lies in previously piss-poor marketing and advertising strategies that have deeply damaged the brand. And now that Mercedes has decided to kill its “EQC” branding for its EVs after just two years, it’s apparent that left to its own devices, the company is still capable of screwing everything up. The Mercedes-Benz brand is on a perpetual roller-coaster ride, which means it’s always teetering on being the latest Answer to the Question that Absolutely No One is Asking. 

Mini. The brand that was initially successful is about to fall out of the market altogether, despite the protestations of its BMW overlords. The reality is that the brand is played out in the U.S. and it seems that there’s not much BMW can do to stop the freefall. I know it’s a bitter pill to swallow for most car executives, especially since they’re constantly reminded of their brilliance by hordes of bootlicking minions looking for their next promotion, but for BMW/Mini executives this pirouette into The Abyss has been a humiliating and inevitable blow. Mini exists in its own little world, which seems to be a speck in everyone’s rearview mirror at this point.

Mitsubishi. No.

Nissan. This company occupies space in the U.S. market, and that is about all I can say about it. Does it offer excellent products? Well, sort of, but not really. In fact, they’re mediocre and for the most part, hideous to look at. Is the marketing decent? Some of the Brie Larson creative is very well done, but that isn’t nearly enough. The only rational reason – and I am paraphrasing a hoary adage by H. L. Mencken here – is that no one ever went broke underestimating the intelligence of the American public. Mediocrity, when it comes to automobiles, is bliss for most consumers, apparently, because at the end of the day too many of them don’t understand the difference and couldn't be bothered to care, as long as the payment is where it needs to be. Confounding and tragic, but there you have it. Despite Nissan operatives’ best efforts, I have full confidence that the abject mediocrity will continue.

Polestar. The thinking person’s EV, Polestar is a very attractive, albeit a bit quirky, brand. And we like it a lot. The quirkiness will only be able to take the brand so far, however, but we’d take any of its offerings over anything from Tesla any damn day. Polestar gets a free all-day pass to The Boneyard.

Porsche. The OGs of Greed, those wonderful folks who created and refined the concept of the Hose-O-Rama Option List to achieve spectacular levels of enhanced profitability. To say that it works exceptionally well for them is an understatement. Despite almost unconscionable levels of arrogance, Porsche is the automotive company that’s better at executing a vision for its brand and staying relentlessly focused to the task at hand than any other car company in the world, except for Ferrari. Porsche’s mission has been to build the most enticing enthusiast machines they can muster, and in the process of doing so it has made Porsche one of the the most desirable automotive brands in the world and one of the top-tier brands on the AE Brand Image Meter. But, there’s a giant “but” lingering out there. (Yes, there’s always a “but” -WG.) The VW Group’s push into BEVs has proven to be challenging for Porsche operatives in Zuffenhausen. Yes, the Taycan was initially a hit, but it has cooled considerably. Porsche insists that the ubiquitous industry parts shortage problem has decimated Taycan sales, and that is partially true, but it doesn’t account for all of the slowdown. I think there’s more to it than that. Devoid of sound – electronically manufactured or no – a BEV Porsche is a BEV. Meaning that for all intents and purposes, it’s a soulless appliance with Porsche accoutrements. Sure, Taycan has the Porsche look, the badges and the instant monster torque of a BEV – and, of course the usurious option list – but beyond that, what? And this has nothing to do about Porsche purists vs. the onslaught of inexorable change, either. This is about the Porsche brand potentially losing its raison d’etre overnight. Porsche’s savvy marketing operatives are acutely aware that the momentum for the brand won’t last indefinitely without consistent efforts at shoring up the brand’s legacy. Even with a brand that has been wildly successful for a long, long time, Porsche True Believers understand that they will have to fight and claw to maintain their grip on the soul of the company. And this is being tested more than ever with the brand’s foray into BEVs. Despite all of its glorious success, Porsche is about to find out just how fragile this brand image business really is. 

Ram Trucks. As I've said repeatedly, crafting a brand image is one of the most challenging tasks in this business. The True Believers out in Auburn Hills know trucks, and they're building a first-class pickup truck. But there's more to it than that. Not only are they executing their trucks almost flawlessly in terms of design, engineering and features, they've managed to hit it out of the park when it comes to image wrangling. The only questions remaining are: How far can Ram go, and how long can they keep up this momentum in the EV era?

Rivian. Exceptionally well-executed with impressive design presence, the Rivian RT1 lacks some of the consumer-focused interior details that other manufacturers get right, but it drives well and delivers the right amount of cachet for buyers willing to shell out six figures. Can the brand keep it up and can it consistently deliver what it does best while bringing out less expensive models? A giant “we’ll see” but in the meantime this is another brand with a double-secret pass to The Boneyard.

Rolls Royce. Old School before Old School was even remotely cool again, Rolls Royce is still firmly planted in its own little brand world – especially with such products as the iconic Phantom, the riveting Ghost, the majestic Wraith and the seductive Dawn. Rolls operatives couldn’t resist taking the regrettable – and insanely profitable – step into SUV Hell with the Cullinan, but that’s the way of the auto world right now. And as far as Rolls-Royce is concerned, what a wonderful, splendiferous world it is. The Rolls-Royce brand Image is impeccable and still smokin’ hot, in a sexy-flirty Helen Mirren kind of way.

Subaru. The most successful brand that no one thinks about (except for its rabid owners), Subaru has attracted loyal followers by emphasizing function over fantasy, and detailed execution over smoke-and-mirrors gimmickry. More important, unlike some other automotive entities we know, Subaru marketers understand what the brand is and what it isn’t, and because of this and its focused consistency, it has been rewarded with intense brand loyalty. As long as Subaru marketers continue to clearly understand who its customers are and what the brand means to people – and to animals – it’s going to continue to reap the kudos (and an endless supply of bones) and the profits. Subaru continues to maintain its place in the top tier of the AE Brand Image Meter. 

Tesla. Nothing new here. With blue-sky thinking, old-time religion, and enough smoke and mirrors to last this industry a frickin’ lifetime, Elon Musk is a huge success, dammit, and don’t you dare forget it. Tesla is the car built for politicians in Washington and Northern California, and EcoSwells needing even more validation for who they think they are. But it’s no secret that the Tesla miracle has finally run out of juice. Elon’s embarrassing foray at Twitter has exposed him for what he is: a petulant brat who's in desperate need of someone to tell him "no." And consequently, Tesla's image has taken a huge hit. But make no mistake, to the green intelligentsia, Tesla is still The White-Hot Future. For the rest of us, it’s a rocket ride to oblivion. 

Toyota. Toyota is back with a renewed sense that it can do whatever it wants whenever it wants to. Why? It is armed with the richest war chest in this business by far (it dwarfs the other top companies combined), which allows the company the wherewithal to pursue anything it wants to do. Toyota’s resilience and success in the market are proof positive of its focused consistency, and it never, ever quits. The blandtastic appliance era for Toyota is fading from view, thanks to Akio Toyoda’s push to heat things up. The air of substance at Toyota is growing, and it shows. The EV question is still hanging over Toyota like a guillotine, however, but I tend to agree with the company in its insistence that it will be able to cover all the bases. Another giant “we’ll see” but anyone counting Toyota out is a fool.

Volvo. This car company has honed its product focus to such an extent that it has become a force to be reckoned with again. Volvo used to be the brand for people who questioned why they even bothered to own a car in the first place. Not anymore. Now, Volvo is the beautifully executed smart choice, with EV savvy thrown into the mix. Bones all around.

VW. After the serious financial hit and image headache from the Diesel cheating scandal, the VW brand has rebounded, at least somewhat. In the U.S., the VW brand didn't suffer permanent damage to its image because Diesel loyalists loved their cars and still do. It’s easy to see why people love the VW brand because it provides an interesting alternative to the American, Japanese and Korean brands, while adhering to the basic values of overall efficiency with a fun-to-drive component that still resonates with consumers. It doesn’t hurt that VW offers two of the best enthusiast cars in the market in the GTI and the R, either. And the Atlas SUV has been a much-needed boon (bone? -WG) for dealers, because they continue to fly off of the lots like free beer. And the new Taos is a noteworthy product entry too. Despite shortages and a notable lack of product flow, the VW brand is still alive and somewhat well. 

As I've stated repeatedly, if this stuff were easy, everyone would have 30 percent market share and the streets in auto centers around the world would be paved with platinum. And when you listen to the blah-blah-blah from CEOs long enough, you get the idea that is exactly what they expect. But this just in: It doesn’t work that way, and when you have multiple manufacturers clamoring for the same slice of the pie and making the same sort of promises, something has to give, which means brand image becomes even more crucial.

This automotive marketing business is tough, unforgiving and relentless. Hundred-million-dollar marketing campaigns can be left in a smoldering heap by the side of the road because of a bold miscalculation, a flat-out wrong-headed decision or auto executives egos running amuck. Or, as I like to call it, The Trifecta of Not Good. 

That last one can be particularly devastating, because as smart as some of these people think they are, their ability to sort through the real from the imaginary sometimes gets lost in translation. Much of this is the result of a completely unrealistic assessment by these executives as to their brand's place in the automotive world. They are so buried in the day-to-day minutiae of it all that they simply don't have the wherewithal to step back and objectively see or understand what's really going on. And to compound that, they don't really like people telling them what to do or that they're wrong either, because after all they're geniuses, remember? Just ask them. 

After going on 24 years of writing this column, I find the insularity at the auto companies to be astonishing. Understandable, mind you, but still astonishing. That's really the only adjective that fits. This insularity causes major missteps and blown opportunities left and right. When I see an iconic brand offering so much to work with, with so much historical relevance to bring to bear and yet it is so misguided and mishandled, it is simply unconscionable. Squandering a legacy is unforgivable in my book. 

I would suggest that the brand marketers who got hammered in our latest Brand Image Meter go back and reread my words carefully, because though painful, half the battle is realizing what you're doing wrong before you can even begin to see your way clear to making things right. As for the rest who fared better, I wouldn't get too complacent, because you're only one boneheaded decision away from disaster. 

Automakers that are in search of a brand image and understand the power that comes with having a solid one garner the tiniest bit of slack from me, because at least they know what they want and where they need to go. But the automakers that have a brand image and don’t have the first clue as to what to do with it, or worse – have squandered a great brand legacy because of cluelessness, ineptitude, or both – draw zero sympathy from me.

It’s duly noted that the companies that are overflowing with True Believers and that focus every waking moment on the integrity and the fundamental desirability of the product are doing very well right now in the brand image department, and they will continue to do so. 

The rest? Well, for them flailing and floundering about seems to be standard operating procedure, if not a full-time career trajectory. And living in a world of reduced expectations is oddly comforting for them.

Brand image is a fleeting thing, except for those brand marketers who understand how they got it, what it took to get it to that point, and what it will take to keep it.

And that’s the High-Octane Truth for this week.


Editor's Note: You can access previous issues of AE by clicking on "Next 1 Entries" below. - WG

- Editor
Editor's Note: In this week's Rant, Peter discusses how our individual and collective experiences with cars has everything to do with who we are, and how this nation was transformed with a wandering spirit that allowed us to roam for the sheer hell of it. In On The Table, the first electrified Corvette, the 2024 E-Ray, is worth another look. We also feature a tribute to another departed rock great, David Crosby. In Fumes, Peter introduces a new series "The Great Races" - which will capture those fabulous and memorable moments in motorsport. This week he talks about the famous Avus circuit in Berlin, and a race that saw speeds in excess of 170 mph - in 1937! And finally, in The Line, the qualifiers for the Daytona 24 Hours are set for next Saturday afternoon's race. Enjoy! -WG

By Peter M. DeLorenzo 

Detroit. It’s 3:00 a.m., so often my normal writing time, and it’s time to get it into gear. This business is so dominated by betting on the come of the battery electric vehicle explosion that I’m afraid this industry may have completely lost the plot. Yes, I know, this is nothing exactly new from me, but it bears repeating. This EV transition is going to play out in fits and starts, and to assume everything is going to go according to plan is a fool's errand. But that won't stop certain manufacturers - and their executives - from touting their EV prowess and boasting how successful they're going to be, because that just comes with the territory. I mean, after all, if auto executives stopped overpromising, something would be very, very wrong, wouldn't it?

I am going to set that aside, however, since this is a drum that will need beating for years to come. 

Today I'd rather write about what got us here in the first place. I’m talking about our collective experiences with cars and the road that are all different and individually significant, but all special in their own way. The people you were with, the places you experienced along the way, and the fleeting moments in time that are indelibly seared in our memories. And they’re simply irreplaceable.

As you might imagine, I have a few car stories. I try to dribble them out now and again – people never get tired of my Bill Mitchell columns, for instance – just to keep things interesting, but today I will offer up a few more glimpses of what has amounted to be a pretty special car life.

It was late March 1966, and my brother Tony was in his last year at the University of Notre Dame. He and a friend – Gary Kohs – and others had organized the third edition of a sports car show on campus for the first three days of April. This “Sports Car Spectacular” as it was called, turned out to be spectacular, indeed. 

Because of my dad’s heavy-duty contacts throughout the industry, this little car show was a very big deal. All the manufacturers weighed-in: Ford sent Jim Clark’s 1965 Indianapolis 500-winning Lotus-Ford and several hot production and racing cars from its “Total Performance” marketing era, including one of Fred Lorenzen's cars. Chrysler was represented, too, with a plethora of hot production Hemis and a full-on NASCAR stocker from Richard Petty. But that wasn’t all, because besides several of its current Styling concepts like the Corvette Mako Shark I and II and Monza GT and SS, what GM brought to the show was a shocker and is still talked about to this day.

I will get to that in a moment, but it’s worth talking about how we traveled down to South Bend from Birmingham, Michigan, the day before the show. A remarkable collection of cars was poised in my parent’s driveway for the trip down to the Notre Dame campus, because they were going to be added to the show once we got down there. There was a bright red 1965 289 Shelby Cobra and a 1965 Shelby GT350 Mustang (white with blue stripes) borrowed from Ford. And then there was a Nassau Blue 1965 Chevrolet Corvette Sting Ray roadster with a removable top and white interior, complete with a 396 cu. in. V8, bulging hood and side pipes. 

This was no ordinary Corvette, however. This car was specially built for Ed Cole (one of GM’s legendary engineers who developed the small block V8, among a thousand other brilliant accomplishments) to give to his wife, Dolly. As I’ve said many times before, many of the legends of GM’s heyday were family friends we hung out with, it was just the way it was back in the day. Dolly was a memorable, fiery blonde from Texas with a razor-sharp wit who loved to drive her “Bluebird” as she called her special Corvette; and she didn’t mind letting my brother borrow it now and again. And this was one of those times.

Our Horsepower Convoy left at 4:00 a.m. with two additional chase cars (including a 396 Impala). As quiet as we meant to be, it was damn-near impossible as the Cobra, GT350 Mustang and Corvette woke the neighborhood and rumbled out into the darkness. Tony was in the “Bluebird” followed by the Cobra, and I was riding shotgun with my brother’s college roommate in the GT350. The ride was memorable in that it rained most of the time and the rawness of the GT350 - and the wonderful noise - made it even more interesting. And visibility was challenging, to put it mildly, as the wipers were a mere suggestion in the heavier bits of rain we encountered. It didn’t matter, it was a flat-out blast. I mean, how often do you get to be in a convoy of cars like that?

We had some dry road moments on the way to South Bend, where we were able to hammer the cars at will, but there were moments when we had to cool it, too, as the cops took great interest in our little convoy at times. But we made it just fine, with no tickets, which we rightly assessed was a notable achievement.

Not long after we arrived, a GM transporter showed up. Zora Arkus-Duntov had called Tony and said that he’d be sending “something special” down to the show, and he wasn’t kidding. After the back doors were opened and the ramps installed, out comes a silver metallic blue Corvette Grand Sport roadster. Not only were the Grand Sports not supposed to exist after one of GM’s annoying “no more racing” edicts, this roadster had clearly just been finished and refined down to the last detail. It was simply stunning to behold. The transporter driver fired it up and drove it into position on the show floor, and right then and there, that little “Sports Car Spectacular” became legendary. All for just a $.75 admission fee too.

(One other side note: there was a Griffith Ford on display at the show that had been painstakingly hand-painted in a Tartan Plaid. Remember, no “wraps” back then. We all agreed that whoever painted it went crazy soon after.)

The road trip back was memorable for another reason. As some of you out there may have experienced along the way, when you rode in a Cobra back then you could smell the burnt rubber from the soles of your tennis shoes because the floor got so blistering hot. That wasn't all. The Cobra developed a pinpoint fuel line leak under the car that would deposit wisps of fuel on the exhaust pipe about every 20 minutes, which would then flare up with a brief flash while we were driving. Needless to say, that wasn’t good, but we decided to press on and made it back okay.

What does it all mean? As I said, our individual and collective experiences with cars and being on the road are seared in our memories and are irreplaceable. Where we’ve been has everything to do with who we are. This nation was transformed with a wandering spirit that allowed us to roam for the sheer hell of it. And our culture was and is still defined by it. 

I’m afraid if we lose that piece of who we are, we will lose a large part of the soul of this nation. Our machines may change, but our need to wander never will. 

As for the title of this week’s column, it’s an homage to the memorable Eric Clapton/George Harrison composition “Badge,” as performed by Cream. 

And that’s the High-Octane Truth for this week.

(Photo by Robert O. Craig)
Editor-in-Chief's Note: This is Corvette Grand Sport 002 restored to as it appeared at the 'Sports Car Spectacular" at Notre Dame; part of the Jim Jaeger collection.

- Editor

Editor's Note: In this week's Rant, Peter discusses how ugly the business is right now. In On The Table, we take a look at the first-ever electrified Corvette, the 2024 E-Ray. We also discuss how Acura blows it - yet again -  and feature a tribute to the great Jeff Beck. In Fumes, Peter concludes (for now) his much-talked about series - "The Drivers" - which pays homage to the giants of motorsport. This week he talks about the terribly underrated American racer, Peter Revson. And finally, in The Line, read more about the runup to the Daytona 24 Hours. Enjoy! -WG


By Peter M. DeLorenzo

Detroit. What used to be known as the “What have you done for me lately?” sobriquet in this business – and in contemporary life – has now transitioned to the more immediate “Everything all the time!” mantra. But even that fails to capture what is going on right now.

Right now, as in how much can we cram as into the moment as possible? And then, go ahead and triple that. Learning from the past and gaining perspective from that in order to make better decisions? That’s dismissed as being quaint or out of touch. Yet people are launched into the system without perspective or an understanding of the fundamentals. Mentorship has gone by the wayside in basically everything, and people and projects are left floundering, while expectations remain urgent. 

The seemingly endless limbo fueled by scarcity and shortages, which has allowed manufacturers and their dealers to register huge profits and record transaction prices is about to come to a screeching halt. Why? The inventories are creeping up, and the lots are filling up with cars and trucks. The stone-faced, “take it or leave it” attitude haughtily displayed by dealers, complete with payments that are $200-$500 more than they were less than twelve months ago is about to go poof

Dealers have been quick to point to the rise in interest rates, parts shortages and lack of vehicles to sell as as the primary reasons for the higher payments, and yes, all of those factors have contributed to the mess consumers find themselves in. But that’s conveniently glossing over the one factor that is ever-present: greed. Who’s kidding whom here? Left to their own devices, dealers are going to dealer. Maximize the money. Crank out the cash flow. Bask in the glory of record monthlies. It’s all good. Until it isn’t.

In case the dealers out there are firing up their email machines, I have absolutely nothing against making a buck, that is the name of the game, after all. But what has been going on has been borderline usurious. (Look it up. -WG.) The fact of the matter is that dealers and some people toiling away at the manufacturers don’t know when to quit. They live a life metered out in 30-day increments, even if they vehemently deny that is not the case in this new era of “enlightenment” in the auto industry. But that is the crushing reality. 

How do I know that they do not know when to quit? The dealer mentality revolves around the fact that you’re graded on the sales for the month, as in, “What have you done for me lately?” But as I pointed out earlier, that has given way to “What are you doing right now?” And what are the manufacturers’ financial arms doing right now? They’re unleashing a fresh round of 84-month financing into the waters, as in, “let’s extract as much cash as we can out of consumers before this thing blows up real good.” 

I’ve said it at least a hundred times before in this column, but I consider 84-month financing to be borderline criminal behavior. Knowingly signing up consumers to a loan that maybe one percent of the participants will actually stick with until term is usurious. People are being enticed to enter into a contract that puts them upside down to the tune of thousands of dollars before they even leave the dealership, with no hope of ever recovering from it. As in none. And then two, three or four years down the road when they’re itching to get something new, these same consumers are forced to make up the difference to the tune of thousands of dollars still, or, even worse, rolling that considerable difference into their new payment.

The auto manufacturers and their dealers know this behavior isn’t sustainable, which is why you’re starting to see 84-month financing being pushed in dealer TV commercials and online. Because they know that the current “take it or leave it” strong-arm bubble is about to burst. Inventories are creeping up, and you can bet that by the end of February, incentives will wash over this business like a torrent, and all of the people who were forced to – or who thought they were forced to – sign up for those egregious 84-month loans will be crying the blues for years to come.

I get this right now mantra, I really do. We’re living in a world of immediacy never experienced before, in everything we see, hear, feel and come in contact with. It has blown way past everything all the time. Now, it’s a drowning pool of sensory overload that we can barely keep up with. 

But that’s not an excuse for the shortsightedness being displayed by the auto manufacturers’ financial arms and their participating dealers. That’s not an excuse for untoward behavior and using people just because they can. It’s exploitation in its most basic form, and it’s embarrassing and flat-out inexcusable.

I’m sorry to say that right now, this business is ugly. 

And that’s the High-Octane Truth for this week.

- Editor

Editor's Note: In this week's Rant, Peter discusses the absurdity of naming in this new EV era. In On The Table, we get a look at the Ram Evolution BEV Concept, as well as BMW Group's 'vision' as presented at CES and news from McLaren Automotive. In Fumes, Peter introduces us to a new chapter of The Drivers, his much-talked about series about the giants of motorsport. This week he talks about the great American racer, A.J. Foyt. And finally, in The Line, read the news about Andretti Global and General Motor's plan to compete in F1. Enjoy! -WG


By Peter M. DeLorenzo

Detroit. So, there I was, at my desk, contemplating what my first column for the new year would be about –and frankly not coming up with anything interesting – when a gift emerged out of the blue from the ether. Sony Honda Mobility unveiled the brand name for its new line of EVs at CES in Las Vegas, which will start arriving in 2026: Afeela

Yes, every once in a while, when you think that this business couldn’t possibly get more mired in mind-numbing boredom and tedious corporate inertia, a lightning bolt of pure absurdity strikes with no warning whatsoever. Are you afeeling me? Afeela is the brand name that Sony and Honda alighted upon to present its EVs to the public? Afeela is the brand name that Sony and Honda will stake their joint technical prowess on? Afeela is the brand name that will inspire consumers to take a serious look and maybe even buy? In the immortal words of the great Vince Lombardi: “What the hell is goin’ on out there?!?”

Straight from the “You Just Can’t Make This Shit Up” File, Sony and Honda have provided everyone with a piñata of endless laughs and ridicule, and it’s damn-near priceless at this point. I mean, I would have loved to have been at the final brand naming meeting when they revealed Afeela, because they obviously missed having someone there who could clear his or her throat and exclaim: “Uh, WTF are you morons thinking?”

So, as a service to our legions of AE readers, we thought we’d give you a preview of some other unexpected EV sub-brand linkups you can expect over the next few years.

Acura Energizer: JUICE

Alfa Romeo Barilla Mobility:  FARFALLEV

Aston Martin Holland and Holland: DELUXEV

Audi Eilenbergers Bakery: MOIST 

Bentley James Purdey: SIDEVLOCK

BMW Dr. Martens: PUG 

Buick Darjeelng: SLEEPEV

Cadillac Hermes: IDYLIQ

Chevrolet Coca-Cola: FIZZ 

Dodge Liquid Smoke: FOGG 

Ferrari Ferrari: LADOLCEVITA 

Ford Carhartt: SADDLE

Fu-King Motors: FUKMEV

Genesis Warner Music Group: PHIL


Hyundai Buydeem: TOAST

Jaguar Austin Powers: SHAGUR

Jeep Huckberry: ROCKEV


Lamborghini Lamborghini: AGILIVE

Land Rover John Rigby: PUMP

Lexus Larry David: EHH

Lincoln Lincoln Logs: OOD

Lotus White Lotus. PRIVI

Maserati Maserati. ALFI

Mazda Hasbro. SCRABBLE

McLaren McLaren: NZT

Mercedes-Benz Mercedes-Benz: TUNG!

Mini Mini: WHIF

Porsche Porsche: NO$UB

Ram Trucks Hammer Made: TONGS

Rivian Rivian: SHOBT

Rolls-Royce DreamCloud: FLOAT

Sony Honda Mobilitiy: AFEELA

Subaru Pet Smart: FURZ

Toyota Walt Disney: MICKEY-V

Volvo Brinks: VAULT

VW Birkenstock: FUNC

As you can see, the Sony Honda EV partnership is just the tip of the iceberg. It is setting off a firestorm – well, maybe using the word “fire” with BEVs is inappropriate but hey, it’s early days – of niche upon niche vehicles. We’ll have everything from mundane EVs made out of balsa wood, to dramatic EVs oozing style, and anything and everything in-between.

Just be forewarned that when you’re looking for an offshoot of your favorite brand going forward, expect the unexpected. Or a lightning bolt of pure absurdity.

And that’s the High-Octane Truth for this first issue of 2023.


Editor’s Note: If you missed our 2022 Year in Review, you can read it here. -WG

- Editor

By Peter M. DeLorenzo

Detroit. I have used that word “tumultuous” to describe this business for more than half a decade, and there’s no reason to stop now, because the chaos continues. The auto industry – along with every other industry in this country – has been brutalized by shortages and supply chain issues. We’re living in perilous times, and on every imaginable societal level too. Sometimes writing about this business seems trivial at best, but then again it isn’t, because this industry is leading the way to greener pastures for this nation, whether we’re ready for it or not.

This “Grand Transition” to Battery Electric Vehicles has already been fraught with peril, missteps and wrong turns. No, a switch can’t be “flipped” and it won’t all be figured out with our collective finger snaps either. It will take serious, intensive, all-consuming work in battery development, the judicious use of essential resources, the building out of the charging infrastructure and dramatic improvements in the supply chain to pull this off. And that doesn’t even begin to get at the most difficult marketing challenge in automotive history, which is to create the fundamental desire and want for BEVs. 

While the Sturm und Drang continues over this transition, the pushback from people who either don’t believe it will ever happen or don’t believe that it should happen seems to be gaining strength by the day. The reasons are many: The infrastructure isn’t there and won’t be there for years to come. Range continues to be a perceived problem. Charging remains an issue, both for the time it takes and because it in fact excludes apartment dwellers en masse. The list goes on from there. Some people are just disinclined to entertain BEVs under any circumstance, when it comes right down to it. 

And I get it, I really do. As someone who grew up immersed in some of the finest high-performance ICE machines ever built, a world that doesn’t echo with the sound of hungry V8s rumbling across the landscape is simply hard to imagine. But then again, as I’ve said repeatedly, those machines will be around for decades to come. They will be collected, nurtured and preserved indefinitely. And that is a very good thing from my perspective. 

It’s not as if your local “Donuts, Lotto ‘n Gas” station is going to disappear overnight, taken over by charging islands. It is going to take time. A very long time. But it’s also clear that for a large portion of the driving population, BEVs will become a staple in every geographical region here in the United States. And to pretend otherwise is just foolish at this point.

But what is it about cars, anyway? Is it the fashion statement? The fundamental sense of motion and speed? The image-enhancing power that automobiles possess? Or all of the above?

If anything, I keep going back to the one thing that’s undeniable about our collective love for the automobile, the one thing that no computer simulation – no matter how powerful or creatively enhanced – can compete with. And that is the freedom of mobility. And that will not change in the upcoming BEV era. The ability to go and do, coupled with the freedom to explore and experience, is not only a powerful concept, it is fundamental to the human experience, which is why the automobile in all of its forms remains so compelling and undeniably intoxicating.

The automobile business itself can be mind-numbingly tedious at times, as I’ve well documented over the years. And it is without question one of the most complicated endeavors on earth, made up of so many nuanced ingredients that it almost defies description. But the creation of machines that are safe, reliable, beautiful to look at, fun to drive, versatile or hard working – depending on the task they’re designed for – is more than just a cold, calculated business. It is and has been an industrial art form that has come to define who we are collectively.

The automobile obviously means more to me than it does for most. I grew up immersed in this business, and the passionate endeavor surrounding the creation of automotive art has never stopped being interesting for me. And it is very much art, by the way. Emotionally involving and undeniably compelling mechanical art that not only takes us where we want to go but moves us in ways that still touches our souls deeply.

That AE is as relevant as ever is obvious, except to the critics out there who loathe me and everything about the AE brand. I remind people that this publication has never been about being all things to all people, and I don’t have a compelling need to be liked, which pisses people off even more. In some respects, AE can be good for the mind, because we clear the air and provide a moment of clarity for the lost souls wandering around in the automotive wilderness, the ones who can’t seem to separate the real from the imagined, or the pipe dreams from what’s truly important.

As I’ve said repeatedly, designing, engineering and building automobiles is still one of the most complicated endeavors on earth. And to do it properly takes vision, creativity and an unwavering passion that makes other pursuits seem positively ordinary.

Fortunately, I can say that things are getting better in this business. Fundamental accountability seems to be on the upswing. The days when everyone got a group hug and a trophy just for showing up seem to be waning, at least just a little, replaced by a burgeoning effort to strive to do better, punctuated by attempts to achieve actual greatness.

One extremely positive thing about this “Grand Transition” to EVs? The development is going at a furious pace. Every facet of this transition, from infrastructure and battery composition to vehicle design and execution is front and center. The True Believers are embracing this challenge, which means that there’s no room for abject mediocrity. The challenge is too great and the competition is far too tough.

And even though some of the issues with this “Grand Transition” seem daunting and too far off to become mainstream, there’s no denying that in the hands of the True Believers we will get there. You only have to look as far as the stellar machines of our day. We’re living in the golden age of automotive greatness, in case you haven’t noticed. These machines aren’t the product of “it’s good enough.” Instead, they bristle with the passion, vision and commitment of the men and women who created them, those “True Believers” who are now knee-deep in making this “Grand Transition” work. Let me be clear. if it weren’t for them, this business would be riding on the Last Train to Nowhere.

Thankfully, going against the grain is our specialty here at AE. For many, the kind of unflinching commentary that we specialize in is like a tonic for the soul in this swirling maelstrom of shit masquerading as the world we live in today.

And in case you’re wondering, after all this time, non, je ne regrette rienEditor’s Note: Edith Piaf sung it best. -WG

WG and I have put together the following highlights from AE from the past year. And don't forget to check out "The Best Of On The Table," "Fumes" and "The Line." I’ll be back at the end with a few closing thoughts.

“But he hasn’t got anything on!” the whole town cried out at last.  The continued canonization of certain car executives by certain bootlicking members of the media (and by certain card-carrying hacks on Wall Street) is pegging the AE Disgusto Meter. Being in the right place at the right time and not screwing things up – at least not yet – shouldn’t be a ticket to Sainthood, but alas, in the twisted times we’re living in, that’s what we’re being inundated with. But don’t worry, with every unexpected big-dollar recall and the worrisome upcoming product launches – which will be botched as certain as it snows in Michigan in January – it’s just a question of when and not if that one dubious halo in particular will be irrevocably tarnished. INTRODUCING THE AE DISGUSTO METER.” (1/5/22)


Can’t stop ‘til I see my name on a blimp. As I’ve stated repeatedly, the companies who can have each foot planted in both arenas – with the ability to manufacture competitive EV and ICE vehicles – will weather this EV transition in the best shape. In the meantime, the more EV vehicles in the market, the more the problems associated with EVs are magnified. MO EVS, MO PROBLEMS. (1/12


Long live Jimmy and Sonny! Fast American muscle cars are overflowing in their underground garage, which is an enthusiast's cornucopia of greatest hits. Jimmy was happy to provide me with an update of their Fu-King Motors fleet. They sold-off one of the three Purple Dodge Demons (each modified to deliver 1000HP) to one of their best, long-term suppliers (whose son promptly wrapped it around a light pole). The two original “narrow-hipped” 427 street Cobras remain, along with the matching ‘68 L88 Corvettes. The two new Corvette C8s (one black, one white) are already gone. Jimmy gave his black one to his administrative assistant, and Sonny gave his white one to his latest girlfriend. No worries, Jimmy pointed out, because they each have an upcoming Z06 on order. Their favorite hot rods (and our readers’ favorites, judging by the mail we’ve received) are a couple of custom-built Willys Gasser replicas from the ‘60s powered by race-prepared Chevy 502 big-blocks. These ultimate bad-ass machines – with open headers – are reserved for terrorizing the neighbors in the middle of the night. FOREVER FU-KING MOTORS. (1/19)


I get why the latest manufacturer focus is full-zoot rough riders and all-terrain mashers. Sort of. After all, that’s what they think people want in order to attack the Canyons of Costco and the Home Depot hollers. Even if you aren’t planning to go to Moab next week, you could if you wanted to, right? And therein lies the hook. The “hook” that auto manufacturers have exploited since people traded in their horses. (Back then the hooks were: You could sit on the front row at Indianapolis in your BelchFire8, if you wanted to; or you could qualify for Le Mans in your SuperSqualo Meteor, if you wanted to. And even now: You could qualify for an IMSA GT race in your Porsche 911 GT3 RSR, if you wanted to.) Those hooks are lethal, and highly profitable. INTRODUCING THE OFF-ROAD DUDE RANCH SEGMENT. (1/26)


We wouldn’t have it any other way. Twenty-three years on, I am proud to say that we still take you "behind the curtain" to give you an up-close look at the Wizards, the Dullards and everyone else in between in this business. I still say what the others are only thinking (or whispering) in deep background or “off-the-record” conversations, and I will continue to do so. Delivering the Truth, The Whole Truth... and absolutely nothing but The High-Octane Truth has been an exhilarating ride. WRITE HARD, DIE FREE: AN UPDATE.” (2/2)


Reasoned, intelligent discourse? It’s for the history books. Now that we are firmly entrenched in this era of “everyone has ‘rights’ but no one wants the responsibility that comes with them,” it’s no wonder that where we go from here is fraught with peril. In fact, the tone and tenor of our society at large has been a burgeoning nightmare for years, and it continues to negatively reverberate through every aspect of our life as we know it. The chatter hanging in the air and permeating social media is all about “what we deserve,” “what we’re owed,” and oh, by the way, “you suck.” Reasoned, intelligent discourse is for the history books, a quaint notion from a bygone era that’s as obsolete as pay phones. And hand-wringing about it seems to be a fool’s errand as well, because no one cares and everyone wants “what’s mine.” LESS THAN ZERO.” (2/16)


The Drive. It’s always about The Drive. I made it a weekly ritual that summer, each time emboldened by the fact that there was not only minimal traffic, but the polizei were nowhere to be found. The best run was my last, at least for that summer, when I was able to hammer my Turbo – foot-to-the-proverbial-floor – for ten flat-out, uninterrupted, no-lift miles. Which was an indicated 165+ mph, or thereabouts, on the speedo. Needless to say, it didn’t take 45 minutes to get to Ann Arbor at that speed. And I could enjoy a nice steaming cup of coffee, grinning to myself, before the trip back. NO PARTICULAR PLACE TO GO. (2/23) 


Yes, it’s a list, I’ll say that much. Is it complete? Oh hell no. But if this is the end of an era, and these are the cars in my ICE Garage to visit and drive while I motor around in the latest BelchFire Electric GT, then I would be exceedingly happy. Needless to say, I don’t plan on going gently into the night. I will hammer whatever I have for all it’s worth and make every single moment count as the glow from the ICE era slowly fades into the twilight. RAGING AGAINST THE DYING OF THE LIGHT. (3/2) 


1961 Ferrari 250 GT SWB California Spider. What else would you drive down to the Amalfi Coast? It's simply one of the most seductive combinations of speed and style ever created. 


1963 Chevrolet Corvette Sting Ray. Of the many achievements to come out of GM Styling under the great Bill Mitchell's tutelage, the Corvette Sting Ray remains a singular achievement that is still stunning to this day.

Another one of Bill Mitchell's milestone cars: The 1963 Buick Riviera. I actually prefer the '65 with the hidden headlights, but you get the idea.


1964 Shelby American 289 Cobra. Shelby's original creation is still my favorite – compact, lithe and like a bolt of lightning in its day. I am lucky enough to have experienced it in its prime.


1966 Shelby American 427 Cobra. Shelby took his original concept and said "more." The result? A better, wider chassis, better suspension, better steering and brakes, and, of course, big horsepower. It is still, to this day, one of the most ferocious sports cars ever built. (And no, not the "S/C" version; the street version with under car exhausts.)

(Richard Michael Owen/

1966 Lamborghini Miura P400. Groundbreaking in design and engineering, the mid-engine Miura remains one of the most significant cars of its era. 


1973 Porsche 911 RS. I have many "favorite" Porsches from over the years, including the present-day 718 GT4. But if I could have only one - actually, if I could only have one vehicle in my ICE Garage - the 911 RS would be it. 

Yes, I would prefer the mid-engine, 829HP V12-powered Ferrari Daytona SP3 - our 2021 Autoextremist Car of the Year - but that isn't happening. Frankly, the new 2022 Ferrari 296 GTB isn't happening either, but, wow: What. A. Machine.

And the 2023 Chevrolet Corvette Stingray Z06. It's everything the new mid-engine Corvette is, and much, much more. It's a tribute to GM's True Believers, who deserve all of the kudos coming their way.


2022 Dodge Challenger R/T Scat Pack Shaker Widebody. I would need to have one, purely Bad Ass car in my ICE Garage, and no, I don’t need a Hellcat. The normally-aspirated 392 Hemi V8 would do just fine.


We’ve seen this movie before; it never ends well. So, in order for Ford to get to that “Shining City on the Hill” and the future promised by millions of Shiny Happy EVs of all stripes and segments dotting the landscape and boasting their blue ovals, the ICE vehicles will have to pull their weight indefinitely, and that fundamental transition to The Future will have to occur seamlessly with no hiccups or disruptions. But this business flat-out doesn’t work that way, especially at Ford, where botched launches and crushing warranty costs are standard operating procedure. Combine that with a maliciously incompetent purchasing department and an IT function that still operates with Stone Age-like precision, at best, and you have a continuing recipe for disaster, despite the visionary protestations from the CEO. SAME AS IT EVER WAS.” (3/9)


We don’t call it the “wandering spirit” for nothin’. What does it all mean? As I said, our individual and collective experiences with cars and being on the road are seared in our memories and are irreplaceable. Where we’ve been has everything to do with who we are. This nation was transformed with a wandering spirit that allowed us to roam for the sheer hell of it. And our culture was and is still defined by it. I’m afraid if we lose that piece of who we are, we will lose a large part of the soul of this nation. Our machines may change, but our need to wander never will. THINKIN’ ‘BOUT THE TIMES I DROVE IN MY CAR, PART I. (3/16)


I am the passenger. I am a Technicolor Dream Cat riding this kaleidoscope of life. I’ve seen some things, indeed, more than most. Magic things. Loud things. Fast things. I once looked up at a ghostly tornado finger drifting overhead in Flint. It was ominous and beyond scary. A lot of people died that day too. But then, a few years later, I saw my first 707 hanging in the sky. It was majestic and powerful. And the Jet Age was on. I got introduced to horsepower, side pipes and chrome, and I happily got sucked in. Corvettes and 409s, GTOs and Starfires. And Sting Rays. Forever Sting Rays. And in the midst of all that, I bought and rebuilt a Bug go-kart, had the Mac 6 engine rebuilt and hopped-up, painted it bright orange, and spent one summer terrorizing our neighborhood. I dubbed it the Orange Juicer Mk. 1, and found out how fast 60 mph felt that low to the ground. It was everything, all the time. IT WAS GOOD. AND HARD. AND FAST. (3/23)


“Good enough” is never good enough. The stellar machines of our day – and we are living in the golden age of automotive greatness in case you haven’t noticed – aren’t the product of “it’s good enough.” Instead, these machines bristle with the passion, vision and commitment of the men and women who created them, those “True Believers” that I often write about. If it weren’t for them, this business would be riding on the Last Train to Nowhere, next stop, Oblivion. Railing against mediocrity and mediocrity “creep” is an essential component of the Autoextremist Manifesto. THE AUTOEXTREMIST MANIFESTO RECHARGED. (4/13)


The silence will be deafening. I intend on immersing myself in the experience of a high-performance ICE V8 for as long as I possibly can. Because despite the eye-popping performance numbers generated by EVs, they will never compare to the thrilling aural appeal of a high-performance ICE machine. It's just not possible. When the streets and byways of America go silent with the perceived – both real and imagined – bliss of BEVs, and the sounds of ICE Age machines slowly fade away except for special car events and at racetracks, I am quite sure about one thing: We’re going to miss it. WE’RE GOING TO MISS IT. (5/4)


Personal mobility is a powerful concept, and the freedom it brings to people cannot be overstated. And it will remain that way too. Yes, in our urban city centers compromises must and will be reached. But this is a vast country, and people will still want to roam to the far reaches of it. And the automobile - newly reinvigorated and environmentally cleansed - will still play an integral role in America’s everyday life for a long, long time to come. CARRY ON.” (6/1)


A legacy worth remembering. But in the face of a business that grows more rigid, regulated and non-risk-taking by the day, there are still lessons to be learned from the legacy of Bill Mitchell in particular. If anything, we must remember what really matters in this business above all else – something he instinctively knew in his gut – and that is to never forget the essence of the machine, and what makes it a living, breathing mechanical conduit of our hopes and dreams. DESIGN MATTERS. (7/6)


What makes us gravitate to one shoe or another? Design. What about to a coat or a particular pair of boots? Design. And how about furniture? Design. Everything we come across as we go about our day is directly attributable to design, from residential and commercial architecture to graphic presentations in videos and on TV, and everything and anything in between. Even mundane places – such as gas stations and their attached convenience stores – have graphic designs helping to create their look and feel. Design sets the tone and creates an ambience, and even if we’re not consciously aware of its power and influence, it is always there. And when it comes to automobiles, of course, it’s no secret that the power and influence of design are magnified exponentially. Design not only matters in the automobile business: It. Is. EverythingDESIGN MATTERS, PART II. (7/13)


That intro was kind of a labyrinthian way of getting to my final discussion topic, which is a question that I get asked all the time: “Given everything you know (and have discussed especially these past few weeks), who’s doing design well right now?” That’s the billion-dollar question, isn’t it? Design matters more now than at any other time in automotive history. In this 24/7, nanosecond-attention-span world we live in today, the hot “street look” of the moment captures all the attention and interest, and usually results in red-hot sales figures too. Exotic cars lead the discussion, but just because a car is expensive doesn’t mean its design is automatically compelling. Unless, of course we’re talking about Ferrari. The newest Ferrari – the 296 GTB – is compact, lightweight and has a taut skin that stretches over its fenders and haunches to create a damn-near perfect form. It is simply extraordinary from every angle, and it is the definitive supercar of the moment. DESIGN MATTERS, PART III.” (7/20)


The 2022 Ferrari 296 GTB.





As I’ve said many times before, the artisans who toil in design studios are the most influential people in the automobile business. They set the tone for brands and lead the word-of-mouth, “street look” discussions, and their visionary work can make – or break – a car company’s fortunes, as I stated previously. This work requires, vision, discipline and a savagely creative mindset that is instantly graded the moment the wraps are taken off of their latest designs. It is a tough, tough profession, but when you talk to designers, most wouldn’t trade it for anything. Seeing something in concept or production form that they had a key role in creating presents a level of exhilaration that’s extremely hard to beat. As if to underscore my series on Design, the Cadillac CELESTIQ is the most stunning vehicle to appear on the automotive scene in 25 years. Period. GM Design, under Michael Simcoe’s leadership, has not only returned Cadillac to being “The Standard of the World,” but the support given to nurture the development of this machine speaks volumes about GM upper management’s commitment to projecting GM as an industry leader into the EV Age. THE CADILLAC CELESTIQ: SPECTACULAR WOW. (7/27) 

(GM Design images)


If you can’t afford it, you won’t bother even asking. But in the midst of all of these crises and the swirling maelstrom driving this market, there’s one more crisis that this industry has refused to take meaningful strides against, and that is the crisis of affordability. I’ve written about this often, and I will write about it many times in the future I’m sure. But the basic affordability of vehicles is slipping away and we’re watching it unfurl like a train wreck in slow motion. THE AFFORDABILITY CRISIS.” (8/3)


This just in: We’re Not There Yet. In terms of the supply chain issues, the endless search for precious metals, realistic charging speeds and the national charging infrastructure itself, this industry is not even close to being there yet.  Add in the fact that consumers, even with sky-high gas prices, have to be sold on the fundamental efficacy of EVs – let me repeat that, have to be sold on the fundamental efficacy of EVs – and you have a Grand Transition to EVs that’s fraught with peril meted out in fits and starts. Going forward, some days are going to be all Blue Sky and Big Dreams, and others are going to plumb the depths of despair. WE’RE NOT THERE YET. (8/10)


Swinging Dickism, still present and accounted for. It’s the same luxury accoutrements, the same rote regurgitation of “luxury” words and phrases that are mumbled in an interchangeable soundtrack from brand to brand, and the same platitudes and cloying familiarity that blend together in a dismal cadence of vacuous-ness that goes by like a blur of marketing cotton candy, a fleeting sugar rush of pseudo substance followed by the inevitable crash of emptiness. Yet automakers drop, collectively, at least a hundred million dollars out in Monterey every year like clockwork. Why? Because the lingering question hanging over the marketing troops isn’t, “Maybe we ought to reevaluate this whole thing” but, “What happens if we’re not there?” Which isn’t exactly an answer that makes a lick of sense, now does it? SWINGING DICKISM WRIT LARGE: WELCOME TO MONTEREY CAR WEEK.” (8/16)


To say that the ‘50s and ‘60s were a different era in automotive history is not painting a proper picture of just how different it was. Detroit was much more of a freewheeling mindset back then. Car executives were bold, decisive, conniving, creative and power-hungry personalities who inevitably went with their gut instincts – which could end up being either a recipe for disaster or a huge runaway sales hit on the streets. The only committees you'd find back then were the finance committees – and they never got near the design, engineering, marketing or even the advertising unless there was some sort of a problem. These Car Kings worked flat-out and they partied flat-out, too, ruling their fiefdoms with iron fists, while wielding their power ruthlessly at times to get what they wanted – and rightly so in their minds – as they were some of the most powerful business executives on earth. In short, it was a world that was 180 degrees different from what goes on today. THE FLYING CAMARO.” (8/24)


How did the car “thing” evolve from desiring faster horses, to the building of transportation that transformed the world? What propelled the automobile from being an extravagant convenience, to a cultural touchstone that’s such an inexorable part of the American fabric that even the most hostile of the anti-car hordes can’t seem to dampen our collective enthusiasm for it? Is it the fashion statement? The fundamental sense of motion and speed? The image-enhancing power that automobiles possess? Or all of the above? If anything, I keep going back to the one thing that’s undeniable about our collective love for the automobile, the one thing that no computer simulation - no matter how powerful or creatively enhanced - can compete with. And that is the freedom of mobilityFOR THE PLAIN UNVARNISHED HELL OF IT.” (8/31)


You’re damn right I ordered the Code Red! Oh, and one more thing. I refuse to sit by and let manufacturers create artificial sounds for their EVs and call it “good” or acceptable. Stellantis is touting the artificially-created muscle sound emanating from its new Charger EV prototype as something that is authentic and desirable. But that is Unmitigated Bush League Bullshit. Electronic-generated and projected sound – no matter how enhanced – is the quintessential definition of synthetic phoniness. There is nothing “authentic” about it and there is no “there” there. The High-Octane Truth is that it is flat-out stupid, no matter how it’s presented. And it’s the most depressing development to hit this business in a long, long time. SOME OF YOU CAN’T HANDLE THE HIGH-OCTANE TRUTH.” (9/14)


And there are no “finger snaps” or flipping of a giant switch to make this all happen instantly, either. It’s a relentless grind marked by fits and starts. Major problems are counteracted by little victories, which ultimately result in meaningful progress. It’s the day-in, day-out of it all that’s the reality for the talented men and women in the trenches working on making the EV “thing” happen. Is progress being made? Absolutely. The pace of noteworthy developments is accelerating. Remarkably enough, it mirrors what happened with the invention of the automobile way back when. Back then, the developments came in waves in little shops scattered around the Midwest and the rest of the world. People with vision and drive transformed the horseless carriage from being a curious novelty to a vehicle that fundamentally changed the world. And history is on the cusp of repeating itself. ONLY THE BEGINNING. (9/21)


It’s hard to believe now, but Pontiac was just another GM division back in the mid-‘50s. It had a lineup of stodgy cars, and there was nothing to write home about. The division existed under the GM corporate umbrella, but it was decidedly lacking in just about everything when compared to GM’s other divisions: Buick, Cadillac, Chevrolet and Oldsmobile. But that would all change when Bunkie Knudsen was appointed a GM vice president and the division’s general manager in July of 1958. Knudsen was given the assignment to inject some life into the division and increase sales, and he was given carte blanche to do it. SOUL SURVIVOR. (9/28) 


Editor's Note: This is Peter's famous ad for the 1981 Pontiac Trans Am Turbo V-8. As Peter says, "It was a different time and a different era." Truer words were never spoken. -WG


If you’ve often wondered what goes on in high-level meetings at an auto company, today is your lucky day. Let me introduce The Players in attendance: The Chief Financial Officer (CFO). The Chief of Manufacturing (COM). The PR Chief (PRC). The Divisional President (TDP). The Chief Marketing Officer (CMO). The Chief Technical Officer (CTO). And, of course, the Chief Executive Officer (CEO). On today’s agenda is a crucial product launch, which is sort of redundant, since they’re all crucial, but nonetheless, it’s the subject at hand. And as is his wont, the CEO opens the meeting... BAKING IT IN. (10/12)


Speaking of unctuous pricks… The human condition is ripe for egomaniacal behavior, in any endeavor. That this afflicts automotive CEOs more so than others in this business is no secret and no surprise. After a while, with bootlicking sycophants constantly lapping at their feet and agreeing with every random thought balloon uttered, it’s easy to see how these executives lose their way. Look no further than Elon Musk, the new Unctuous Prick in Chief. That Musk openly hawked “full self-driving” on his Teslas – and charged customers through the nose for it – when it never worked, was the most egregiously unconscionable act ever perpetrated on this business, and that’s saying something with the VW Group’s diesel cheating fiasco still fresh on everyone’s minds. If there’s any justice left at all in this world, the criminal charges being discussed right now for Tesla at the DOJ will result in billions – not millions – but billions of dollars in fines meted out to that company. (I’m thinking that a nice round 50 billion ought to cover it.) Amazingly enough, there are certain CEO-types in this business who openly admire that walking, talking Muskian Nightmare, which is just pathetic and sad, and their respective companies are going to pay dearly for their blind fealty, especially when their company overlords aren’t paying attention. THE HIGH-OCTANE TRUTHS, PART I. (11/2)


As long as we’re living in this automotive Twilight Zone between the end of the ICE era and the dawn of the BEV era, things are bound to be more than a little unsettled. Or boring. Or both. It seems like the entire industry is lost in that traditional mindset of "It won't be long now!" Translation? Give us another year and we'll be smokin'. In the meantime, have another SUV and you'll be fine. Or something like that. If the boring and soulless EQE SUV and AMG EQE SUV are the best Mercedes can do for its EV SUV entrants, then we are doomed, and this industry is officially out of ideas. With that in mind then, I have a few questions for you (as inspired by one of my heroes, David Byrne)... SAME AS IT EVER WAS.” (11/9)


Changing the subject, there is definitely a virulent anti-EV faction “out there” that is equating the notion of the “Grand Transition” to EVs as some sort of plot against politically right-leaning individuals. The vitriol aimed at anything to do with EVs – and any individual who comments on it one way or the other – is growing uglier by the day. It’s easy to see why this ugliness is happening too. It’s part and parcel of the deterioration of any shred of rational discourse that has consumed this country over the last six years. The polarization of our society has now crept into the EV vs. ICE discussions, and it is truly unfortunate. THE YEAR OF THE DANGEROUS IN-BETWEEN.” (11/30)


Despite the societal headlong rush into EVs, it turns out that my dreams are still not battery-powered. They are fuel-injected and raucous, a cacophony of thumping V8s, boosted flat-sixes and screaming V12s, playing out in a kaleidoscope of frenzied images and frantic video POVs that piece together a lifetime. There is little rhyme or reason, no detectable pattern and the furthest thing from a chronological order that you can possibly imagine. They are nightmarishly chaotic and, in some cases, achingly real. It turns out that the leap from 2030 to 2035 is dramatic and for some, like me, frightening. THE BEAST IN ME. (12/14)


It’s probably not surprising to most of you out there that I still have The Hunger, the yearning deep in my soul for something more. I still take life in fleeting moments as I always have. Devouring a country road with a great driving machine will never, ever get old. Drinking in a majestic, threatening sky or a powerful landscape. Breathing in the crisp, cool air of fall while nature’s paintbrush unfolds. The sheer joy of watching the unfiltered lives of animals as they weave their spell throughout our lives.

But my total embrace of the automobile business? Needless to say, it is evolving. I still relish the emotional power of a brilliantly conceived and executed advertising campaign. I’m still in awe of a breathtaking design execution, and I still relish being drawn into its presence on the road. And I will always honor the True Believers in this business, the men and women who make a difference every damn day. 

But the commoditization of this business grew tedious for me years ago. Some might say, “That is just not true, there are exceptions to that part of the business.” To that I say, really? Have you ever seen a picture taken outside of an exotic luxury automaker, with rows and rows of its production of super-hot vehicles lined up like so much cord wood? It tends to dampen the notion of exclusivity immediately.

So, I will pick and choose my involvement – and my interest – in this business as I always have. But I will always be on the lookout for more, or what’s next, or what’s new. 

Something that resonates deep in my soul. 

Something that captures my imagination. 

Something that satisfies The Hunger. 

As U2 so eloquently put it, “I still haven’t found what I’m looking for.”

And that’s the High-Octane Truth for 2022. WordGirl and I wish the best to all of you out there, and we hope you and yours enjoy the Holiday season and have a Happy and Peaceful New Year.



Editor's Note: You can access previous issues of AE by clicking on "Next 1 Entries" below. - WG
- Editor

Editor's Note: In this week's Rant, Peter takes us to a future transportation dimension, where things get - ahem - a bit out of hand, to say the least. In On The Table, we get an update on the Lamborghini museum and a visit from Nick Lowe. In Fumes, Peter introduces us to a new chapter of The Drivers, his much talked about series about the giants of motorsport. This week he talks about the great American racer, George Follmer. And finally, in The Line, we get another optimistic report about the new IMSA GTP cars after an early test at Daytona. Enjoy! -WG


By Peter M. DeLorenzo

Detroit. When I last visited this theme a couple of years ago, the year 2030 was upon us. As I stepped out into the darkness in the throes of another sleepless night, I found myself wandering around in a world that looked remarkably as it looks today. I noticed a few stray autonomous vehicles doing their rote routines, with their blue LEDs indicating what they were. But they were – not surprisingly – insignificant, part of the thrum of a new reality, but only a bit part.

And as the darkness lightened slightly, I started to see the ebb and flow of traffic on Woodward Avenue. It was reassuring to see that it still hummed with activity. Some avant-garde designs were noticeable – aero shapes punctuated by their wildly diverse lighting systems – but they were clearly full-zoot luxury machines. Other cars were decidedly less adventurous, a mix of small- to medium-sized conveyances that really didn’t look all that much different from today. And yes, the traffic flow was dominated by SUVs and trucks still, the American consumer having long ago abandoned any thought of going back to a typical passenger car.

The sounds were diverse too. A mix of BEV whine, hybrids and yes, full-on ICE machines as well. It was obvious that the prognostications of a complete transition to BEVs were dead wrong. The “grand transformation” was clearly a work in progress, with scores of people happily clinging to their piston-powered vehicles for two reasons: cost and the freedom of movement with no limitations. I did notice that as I walked past the local Speedway gas station/convenience store, half the gasoline pump islands had been replaced by quick-charging stations for BEVs. They were empty now, but the gas pumps were already busy. 

But as that dream began to fade, the realization that time had accelerated again overwhelmed me. It was with certainty that I could sense that things had fundamentally changed. As Don Henley once said, “Time keeps ticking… ticking away,” and I found myself immersed in a new world, five years on. 

But was it actually happening? As you get older, they say sleep seems to become more fleeting. There “they” go again. All-knowledgeable, all-powerful and all-tedious. It turns out “they” don’t know jack shit, a secret society seemingly dedicated to cluelessness and misinformation that wreaks havoc on everyday life with impunity. To borrow a catchphrase from John Boehner, “they” can go fuck themselves. 

Despite the societal headlong rush into EVs, it turns out that my dreams are still not battery-powered. They are fuel-injected and raucous, a cacophony of thumping V8s, boosted flat-sixes and screaming V12s, playing out in a kaleidoscope of frenzied images and frantic video POVs that piece together a lifetime. There is little rhyme or reason, no detectable pattern and the furthest thing from a chronological order that you can possibly imagine. They are nightmarishly chaotic and, in some cases, achingly real.

It turns out that the leap from 2030 to 2035 is dramatic and for some, like me, frightening. 

I found myself in a gray-tinged room, with a simple rectangular table in the center flanked by three chairs on one side and one on the other. Cameras were visible, as was a one-way glass picture window. I was facing two bureaucrats from the State of Michigan – a man and a woman (“Mr. Baker” and “Ms. Worley”) – and one representative from the Feds, a female agent named “Ms. Carmichael.” I had no time to figure out why I was there, before they began questioning me, but “Ms. Carmichael” said I could call her by her first name, which was “Tessa.” I declined.

Ms. Carmichael: “Mr. DeLorenzo, on the night of April 10, 2035, you were apprehended on the I-696 expressway for speeding, is that correct?”

“Yes,” I said.

Ms. Carmichael: “We are joined today by the State of Michigan, represented by Mr. Baker and Ms. Worley, who have brought with them all of the salient details from this incident for the purposes of this meeting, including the visual and audio recordings from the State Police Robotics Division, which have thoroughly documented that night.”

Then without missing a beat, they played a series of HD color videos of the event. You could see my jet black 2024 Corvette Z06 as clear as a bell, with my registration and insurance information projected on the screen – along with my driver’s license labeled “RESTRICTED” - as I blew through the various camera angles and checkpoints. 

I didn’t say a word.

Ms. Carmichael: “Mr. DeLorenzo,” she continued in a voice free from nuance or tone, “Not only were you in an unauthorized vehicle, your speed was registered, verified and documented over a six-mile stretch as varying between 195 mph and 206 mph. Do you deny any of this?”

“No,” I said. I mean, what could I say, “It wasn’t me?” They even had enhanced video of me behind the wheel, slowed down and magnified. I looked super-focused at least.

Ms. Carmichael: “You are aware, of course, that this particular expressway is limited to three types of vehicles: the far-right Green Lane for piloted BEVs and Hybrids, the middle Orange Lane for guidance-optional assisted vehicles, and the left Blue Lane for fully autonomous vehicles. Yes?"

“Yes,” I said. The roadways had become heavily skewed to minimizing involvement behind the wheel, apparently, and I was clearly doing the exact opposite, flagrantly violating the rules in an extreme way. 

Ms. Carmichael: “Mr. DeLorenzo, you’re also aware that because of your age you’re no longer allowed to drive any vehicle of any kind. Your license says “RESTRICTED” because it is only functioning as a national I.D. But I’m not telling you anything new, correct?"

“I get tested twice a year,” I was agitated now. “I go through certified high-performance driving programs every year. I have a long list of recommendations and verifications from accredited sources. I’ve forgotten more than you people will ever know about driving." (I loved using the phrase “you people” with bureaucrats.) "I don’t understand why this is a problem, or why it is being held against me.” 

Ms. Carmichael. “Nevertheless, Mr. DeLorenzo, those self-certification programs are irrelevant to this discussion. You have intentionally flouted the law, and apparently this isn’t the first time, according to your record, is that correct?”

I nodded. 

Ms. Carmichael: “Because of your long list of transgressions behind the wheel, and this latest and most egregious incident, I have no choice but to send you to the Driver Attitude Redirection Bureau for no less than six months, or until we are satisfied that you have been redirected properly. Are you clear as to what is expected of you?”

My mind wandered. This was a death sentence. “DARB” was developed by the Masters of Silicon Valley and deployed in 2032 in Sacramento, and the results were so positive after a year – according to government operatives – that the program was expanded nationwide. At “DARB” they put you in EV simulators that are programmed to run a different course every day – a mix of residential streets, urban and suburban landscapes and freeways – and you’re required to drive by the book, while adhering to every law – with various surprises thrown in – for eight frickin’ hours a day. And each time you make a mistake you receive an electric shock through the steering wheel, which varies in degree depending on the perceived offense. An old friend of mine cracked up one day after four months of this torture, apparently. He stood on the go-pedal hard, and after five minutes of going flat-out through that day’s route, blowing through intersections and running cars off of the road, the shock delivered was so severe it vaporized him. The only thing they found was a trace of his right shoe.

Ms. Carmichael: “Mr. DeLorenzo? Do you comprehend what is expected of you? You have been ‘zeroed-out.’ You are being removed from the societal landscape until you demonstrate that you can function according to the rules. It’s completely up to you if you are able to return to the Real World.”

The Real World? Fuck me. I can’t wait to get a hold of that EV simulator. Rest assured, they won’t find a trace of me.

Then, I woke up with a start. The sounds of “The Beast in Me” by Nick Lowe (listen here) flowed from my phone. 

And I was ready to face the day…

The beast in me is caged by frail and fragile bonds
Restless by day and by night, rants and rages at the stars
God help the beast in me

The beast in me has had to learn to live with pain
And how to shelter from the rain
And in the twinkling of an eye might have to be restrained
But God help the beast in me

Sometimes it tries to kid me that it's just a teddy bear
Or even somehow managed to vanish in the air
And that is when I must beware of the beast in me

That everybody knows
They've seen him out dressed in my clothes
Patently unclear, if it's New York or new year
God help the beast in me, the beast in me

And that’s the High-Octane Truth for this week.


Editor's Note: You can access previous issues of AE by clicking on "Next 1 Entries" below. - WG

- Editor

By Peter M. DeLorenzo

Detroit. As longtime readers well know, the Chevrolet Corvette has played an inexorable role in my ongoing car addiction. I’ve been honored to have experienced some of the most famous and spectacular Corvettes ever built in period and in real time. Those experiences are forever etched in my mind, and for reasons I’ll explain later, I think it’s high time I give you a glimpse into my Corvette history, because for me, it never gets old.


The 1959 Corvette Sting Ray racer (photographed in the GM Styling viewing courtyard at the GM Technical Center in Warren, Michigan, in 1960). As I’ve stated many, many times in these pages, this machine is my all-time favorite car. I first saw it one blistering summer afternoon in our neighborhood in 1962, and I will never forget it. I was still in my bike-riding days back then, but I remember resting with my buddies on a corner in our neighborhood after a long, hot day of riding around aimlessly – we did that often back then – when we heard a rumble and roar coming from off in the distance. I knew right away that it wasn't motorcycles and that it was more than one of whatever it was – and just then a pack of the most stunning cars we'd ever seen burst around the corner and came rumbling right past us – the sun glinting off the barking pipes and the canopy of trees shimmering off the perfect mirror finishes of the paint jobs. This "horsepower train" was led by the 1959 Corvette Sting Ray racer in Silver, followed by the XP700 Corvette (a "bubble-top" show car with side pipes also in Silver – it was Mitchell's favorite color), the first Mako Shark Corvette and a concept called the Corvair Super Spyder (also in Silver), a wild, racing-inspired show car with dual cut-down racing windscreens and three pipes curling out and around each side in the back. 

A rare photo of the Corvette Sting Ray racer in its original red livery, taken at Elkhart Lake, Wisconsin, in 1959.

The Corvette Sting Ray racer as it appears today.

The Corvette Sting Ray racer "live" at a car show.

The 1963 Corvette Sting Ray production car and the 1959 Corvette Sting Ray racer, photographed in the GM Styling viewing courtyard in the fall of 1962.

Legendary GM Styling Chief Bill Mitchell photographed with the 1959 Corvette Sting Ray racer and the 1961 Corvette Mako Shark at the GM Technical Center test track, in Warren, Michigan, 1961.

They were so loud we couldn't even hear ourselves screaming whatever it was we were screaming, but after a split second to think about it we took off, pedaling our guts out after them. It was apparent that these machines were heading for our part of the neighborhood – and as we tried to keep them in sight, I realized they were turning on to my cross street…

We came around the corner and saw them pull into a driveway, exactly one block from my house. We stopped right at the end of the driveway with our mouths gaping down to the asphalt, as the drivers of the other cars handed the keys to the driver of the Sting Ray and he took them up to the front door where a woman collected them. Then, an Impala pulled up and the four men got in it and were gone, leaving the cars sitting in the driveway all lined up ticking and spitting as their pipes started to cool. This became the Friday afternoon ritual in the summer, because that’s the way Bill Mitchell wanted it. GM’s legendary design chief liked having a selection of his toys to play with on the weekends, and I was lucky enough to live just a block away from him.

All of those cars were special, but the ’59 Corvette Sting Ray racer was by far my favorite the moment I laid eyes on it. If you’ve ever had the pleasure of seeing the original Sting Ray racer in person, it is a stunning machine. (Although for those who haven’t, you might not be prepared for how compact it is.) 

Its taut, beautifully rendered lines absolutely glow in Mitchell’s favorite color – German “Silver Arrow” racing metallic. A favorite story? When Ed Welburn took over the reins of GM Design many years ago, the first thing he did was order the restoration of the ’59 Sting Racer, which had fallen into neglect and in desperate need of rejuvenation. And the GM artisans did a phenomenal job bringing it back to its previous glory. But the one area they didn’t touch? The seats, because Ed wanted them to remain in their original condition, in honor of all of the famous people who sat in them. An exquisite touch, and it remains the jewel of GM’s collection of historic vehicles.

No, I don’t count myself as one of those famous people, but I did have the honor of riding shotgun in the ’59 Sting Ray racer several times with Bill Mitchell at the wheel. The memory remains as technicolor vibrant as if it happened yesterday.

The wild 1958 Corvette XP-700 concept from GM Styling.


1958 Corvette XP-700 concept. This wild Corvette concept was the first car I rode in with Bill Mitchell at the wheel. Some may not like the looks of this beast, but it was surprisingly alluring in person. The one thing I can report is that its “bubble” top – which was an infatuation of Mitchell’s at the time – redefined the concept of “solar gain” as it baked your brains out in the summer sun. And that was fine with me, because to ride around in that cool, futuristic machine was a treat beyond words. The XP-700 eventually disappeared. Why? It became the underpinnings of the next car…


1961 Corvette Mako Shark I. The Mako Shark concept (XP-755) was another thing altogether. This machine bristled with remarkable details, like the “gills” that doubled as sequential turn signals, the glorious side pipes and, of course its bubble top. But the most remarkable characteristic was its fantastic paint job, which mimicked the gradations of a Mako Shark. That paint job was mesmerizing back then and amazing in every sense of that overused word. Today, this machine is in desperate need of a full restoration, but that paint job remains its signature. How did this all come about? One of the countless anecdotes from the Mitchell era was that he caught a Mako shark on a fishing trip in Florida and had it mounted on a wall in his office. He kept telling the designers that he wanted the paint job on the Mako Shark concept to look exactly like the shark on his wall, with the same color gradations. After Mitchell rejected several attempts at painting the XP-755 and amid growing frustration, a few designers sneaked into his office late one night while Mitchell was out of town and removed the shark from his office wall. They then had the paint shop paint Mitchell's prized catch exactly like the latest version of the paint job on the Mako Shark concept. They then put the shark back up on his wall and presented the new paint job on the Corvette Mako Shark concept to Mitchell, who pronounced it "perfect." 

The paint job is truly wild - and stunning - on the Mako Shark I.

The 1961 Corvette Mako Shark I as it appears today.

The 1961 Corvette Mako Shark 1 and 1965 Corvette Mako Shark II, photographed at the GM Technical Center in Warren, Michigan, in 1965. 

The 1963 Corvette Sting Ray remains one of the most iconic automobiles ever built. 

Ed Cole’s 1963 Corvette Sting Ray. We got to know Ed (and Bill Mitchell, of course) through our father, who was in charge of GM PR from 1957-1979. Ed took note that my brother Tony was totally into cars, so he often would send over cars for my brother to drive. One year he sent over his personal driver, which was a 409 V8-powered Chevy Impala with a 4-speed. The only other 409 in existence was in “Dyno” Don Nicholson’s hands at the NHRA finals. Needless to say, we had a blast mopping up everything in sight on Woodward Avenue that weekend. But the most memorable car that Ed sent over was his personal 1963 fuel-injected Corvette Sting Ray coupe in Sebring Silver (with a 4-speed gearbox, of course). The new Sting Ray had been announced, but there were none on the street yet, except for Ed’s company car. To this day, the Sting Ray was one of the most dramatic and memorable auto introductions of all time, and driving it that weekend was like piloting a rolling space ship. No other car said “The Future” like the first Corvette Sting Ray. It was simply spectacular.

(The DeLorenzo Archives)

The 1964 “Zora-ized” Corvette Sting Ray (as it appeared for the SCCA Driver's School in Watkins Glen, New York, 1964. Note the straight pipes out the back). By early summer of 1964, my brother Tony’s automotive bug started to seriously turn toward sports car racing. He innocently asked "big" Tony if we could order a Corvette company car for the summer, and little did he know that the adventure was just beginning. As my brother said: "He made two errors: 1.) He agreed to do it and 2.) He let us order it!" And order it we did: A Black/Black 1964 Corvette Sting Ray Coupe with Heavy Duty finned drum brakes; Heavy Duty gearbox; knock-off aluminum wheels and radio delete. Little did our father know that Tony planned to take it to SCCA Driver's School in Watkins Glen, New York. So, the moment we got it we took the interior carpeting out, took the bumpers off, removed the spare tire carrier, and then we had a roll bar put in and we were good to go. Or so we thought. While Tony was sitting at his desk at Chevrolet Sales Promotion (his summer job) a few days later, the phone rang. This is how he remembers it:  


"Tony, this is Zora Duntov." Yikes, it was the God of the Corvette calling. "Your father has ordered a heavy-duty Corvette. Who is going to drive it?"  

"Um… He is?!!"  


"Who is going to drive it?"  

"Um, I am." 

“What are you going to do with it?”  

"Uhhh… I'm going to go to SCCA driver’s school at Watkins Glen." 


And “God” hung up. But not before requesting that we drop the car off at Chevrolet Engineering at the GM Tech Center in Warren so he could "take care of a few things." Two weeks later we went back to get the car, and Zora took Tony out to the little test track that sits inside the Tech Center. And there it was, it was the same Corvette but it sat lower and it was wearing the biggest Goodyear Blue Streak racing tires that could fit inside the fenders on the knock-off wheels. Zora also pointed out that the stock exhaust system underneath now had flanges just in front of the mufflers. Those flanges had been put on by Bill Mitchell's famous Styling Garage mechanic, Ken Eschebech, so that once we got to Watkins Glen, we could attach 4' long straight pipes designed to hang on special hangers, so that they would shoot straight out the back. Because, well, you can't run a Driver's School at Watkins Glen with standard mufflers, right? Zora was a genius.

But those changes were just the tip of the iceberg. The car had been completely gone through, including the brakes, the suspension and sure enough, the engine. In retrospect, we were convinced that Zora had the engine yanked, gone through and tweaked, because the thing was a rocket. 

That trip to Watkins Glen was an adventure unto itself. We arrived very late one night at the rustic Glen Motor Inn, and the one and only Vic Franzese (the proprietor) checked us in, but not before he could show us his beautiful Lotus 11. The school went exceptionally well for Tony; at one point the Chief Instructor went to ride a couple of laps with him and emerged muttering something like "he's doesn't need any more instruction" – and that was the beginning of Tony's racing life. The return trip was eventful, too, as were so tired by the end of the weekend that we said, "screw it" and left the straight pipes on, rattling hearts and bones all the way back. 

There's more to this story. It was getting toward the end of that summer, when dad informed us that the car had to go back to Chevrolet to be put back into stock condition. It turns out that our oldest sister's boyfriend at the time, who lived in Chicago, had expressed interest in buying the car. We took the roll bar out, piled the stock components in it and voila! It returned two weeks later as if none of it happened, with dad saying: “When that car comes back to the house, don’t touch it!” We didn't. The sad end to this chapter? The guy in Chicago had it for two days. On the second night it was stolen, stripped – and totaled.

Dollie Cole's "Bluebird" 1965 Sting Ray convertible. Ed Cole was the brilliant engineering genius and true enthusiast who was one of the creators of the small block Chevrolet V8 and who led GM Product Development in its heyday. Ed is a true icon of the industry. Dollie was his radiant wife, a fierce defender of all things Ed and a fiery enthusiast in her own right. She roared around Bloomfield Hills and Birmingham - two northern suburbs of Detroit - in her '65 Nassau Blue Corvette roadster with a white interior, a removable hard top, a 4-speed and side pipes. Dollie also had a lead foot and drove the hell out of it. She famously dubbed it her "Bluebird." Ed stuffed a big-block 396 V8 in it months before the engines were released to the public. She let Tony borrow it on several occasions. It was quick and suitably loud. 

The 1965 Corvette Mako Shark II. What can be said about this machine other than the fact that Bill Mitchell and his handpicked designers turned the dial up past “11” to come up with one of the most iconic Corvette shapes of all time? The obvious successor to the Mako Shark I, the “II” bristled with spectacular details that even today – in its “Manta Ray” guise – resonate mightily. 

The Mako Shark II transformed into the 1969 Corvette Manta Ray, which is how it appears today.

The 1969 Corvette Manta Ray photographed at GM Styling in Warren, Michigan.

(The DeLorenzo Racing Archives)
Wilmot Hills, Wisconsin, May 1967. Tony DeLorenzo's first race in a Corvette - and first win in "A" Production - came at an SCCA Regional in Wilmot Hills, Wisconsin, in this brand-new 1967 L88 Corvette Sting Ray roadster sponsored by Hanley Dawson Chevrolet in Detroit. It was also the first time a 427 Cobra encountered the new L88 in an "A" Production race. This well-traveled Sting Ray is one of the most valuable Corvettes in the world not named "Grand Sport."

The 1967 Corvette 427 L88 racing car. Tony began his racing career in something much more realistic and affordable than a Corvette, which turned out to be a '65 Corvair. We started out pounding around at our local track here in Michigan – Waterford Hills – and from there it was on to Nelson Ledges, Ohio, and Mid-Ohio; a one-time event at an airport in Grayling, Michigan; Lime Rock Park, Vineland (New Jersey); and on and on. Two years later Tony talked Hanley Dawson, who owned Hanley Dawson Chevrolet in Detroit at the time, into sponsoring a Corvette in SCCA Racing. And after he agreed to do that, we ordered one of 20 L88 Corvettes made in 1967, in Black, of course (it actually turned out to be the first one built that year). I’ll never forget going down to the dealership after it arrived and taking it around the block. The thing was a monster in every sense of the word, and the sound that L88 made was spiritual. The first weekend we had it we installed a roll bar, replaced the stock exhaust system with a set of "OK Kustom" headers (from Flint), added a set of “Torq-Thrust” American Racing wheels, a set of Firestone racing tires, and we removed the windshield, cut the windshield posts down and put a plexiglass windscreen on. The debut race – and win – for Tony and that famous L88 Corvette came six weeks later in an SCCA Regional race at an obscure road race track in Wilmot Hills, Wisconsin. He went on to qualify for the SCCA Runoffs with that car, and then it eventually disappeared. It surfaced again, and after Tony documented its authenticity, it was restored back to its street configuration; then it was returned to its racing configuration – with Tony driving it in the Monterey Historics – then back again to its street configuration. This has become one of the most valuable L88 Corvettes in existence, and I think the last time it changed hands was for just under $2 million.

The 1969 Corvette “Daytona GT” L88 convertible. After the Owens/Corning Fiberglas sponsorship came to fruition for our Corvette team, we had the idea of building a limited run of street Corvettes that would be branded as the “Corvette Daytona GT.” We build a prototype, which was based on a Black/Black (of course) Corvette convertible powered by a 427 L88 and equipped with our competition headers and side pipes, our FIA-specific Plexiglas covered front headlights, American “Torq-Thrust” wheels and racing tires. We even displayed it at the Detroit Auto Show at Cobo Hall that year. From the “Best Laid Plans” File, the demands of our burgeoning – and successful – racing effort overwhelmed everything else, and the Daytona GT idea fell by the wayside. But that wasn’t exactly the end of the story. The car was stored at my parent’s house, and I was tasked with keeping it in running condition, which I performed with relish. Needless to say, a Black/Black L88 Corvette with open side pipes caused quite a stir on Woodward and the surrounding environs. It was the quintessential Bad Ass machine. What happened to it? A Lufthansa Airlines co-pilot befriended Tony at Daytona, and he eventually asked Tony if he would consider selling him a OCF-prepared Corvette. A deal was reached, and the Daytona GT was converted to OCF Corvette Racing specs. But not before Randy Wittine, the brilliant GM designer who created all of our iconic racing team liveries back then, came up with a wild “psychedelic” paint job for it that was drop-dead gorgeous. (Pictures exist somewhere, but they haven’t turned up.) Tony and I dropped it off at Detroit’s Metro airport, and watched it being loaded on to a Lufthansa freighter. That pilot proceeded to terrorize the equivalent of German SCCA national racing with that monster, humbling the usual assortment of Porsche 911s in the process. The car ended up back in the states somehow and is now used for vintage racing. Another Corvette life well lived.  

The 2022 Corvette Stingray Coupe. I tested a 2022 Corvette Stingray Coupe early this year and I loved it. The well-optioned machine looked fantastic in its Hypersonic Gray Metallic and its “Morello Red Dipped” interior. And so, a new chapter begins…

And that’s the High-Octane Truth for this week.

(GM Styling)
Bill Mitchell pulling out of his driveway on Bradway Boulevard in Bloomfield Village, Michigan, in the 1959 Corvette Sting Ray racer. He drove his favorite cars all the time.

Editor's Note: You can access previous issues of AE by clicking on "Next 1 Entries" below. - WG

- Editor

Editor’s Note: In this week's column, Peter reminds us of a few things, because it seems that some out there still have a tendency to forget. In On The Table, we look at Giorgetto Giugiaro’s interesting connection to Hyundai, and our AE Song of the Week is “Linger” by The Cranberries. In Fumes, Peter continues his much-praised series on “The Drivers,” this week featuring one of the iconic motorsports figures of all time – Dan Gurney. And check out The Line for any new developments on the racing scene. -WG


By Peter M. DeLorenzo

Detroit. And so, we go on. With Part II of The Holidays – Thanksgiving – completed (Halloween has become the de facto Part I), the inexorable march to Christmas (or Part III) will unfold in the coming weeks. It’s always a weird time in this business, as next year’s budgets are being finalized with a fervor that swings wildly between calculated, reasoned business decisions and capricious whims and gut feels. Production and sales projections are also (gulp) being laid on the table with much hand-wringing and trepidation, and manufacturer operatives and dealers are scrambling to record as many sales as possible. In other words, the Swirling Maelstrom continues unabated.

I would love to report that things are progressing nicely in terms of the “Grand Transition” but it turns out that the chip shortage is nowhere near to being jettisoned to the rearview mirror, and this will affect ICE and EV builds all through next year. In fact, 2023 is shaping up to be one giant drag for the automobile business in general, a seething cauldron of Sturm und Drang that will hang over this business like a long, low black cloud for another year, at least. This is, needless to say, a giant bowl of Not Good.

Going into 2023, which I’m now officially naming “The Year of The Dangerous In-Between,” the progress I’m looking for is only coming in fits and starts, and too often it seems to be veering off into the three-steps forward, five-back Dance of Mediocrity that has plagued this business for decades.

To wit, just last week, Phoebe Wall Howard reported in the Detroit Free Press that Ford’s product issues not only remain unresolved, they’re actually getting worse. To wit:

“Ford Motor Co. has issued yet another recall on 2020-23 model year Ford Bronco Sport and Ford Escape SUVs following customer reports of fires with injuries as well as under-hood fires that occurred after the vehicle was turned off.

The cause: spilled fuel or leaked vapors on the hot engine or exhaust components caused by a cracked fuel injector.

As many as 521,778 vehicles, with 1.5-liter, three-cylinder engines, are potentially affected in the U.S., including Puerto Rico and the Virgin Islands. Specifically, 333,342 Escapes and 188,436 Bronco Sports.

More than 100,000 vehicles in Europe and South America are also affected, Ford spokeswoman Maria Buczkowski told the Free Press on Thursday.”

At one point, Ms. Howard provided a succinct summary of Ford’s continuing product problems: 

“Ford CEO Jim Farley tapped a new quality czar early this year, revamped quality management and has seen recalls and warranties eat into the company’s profits.

This latest action follows a recall of 550,000 F-150 pickup trucks for a broken windshield wiper motor. Ford has had more recalls in 2022 than any other automaker.” (Italics mine.)

The continuing saga of Ford’s product issues keeps unfolding like a bad dream for the company’s wunderkind CEO. Except that Ford’s “savior” CEO is now 60 years old and the problems aren’t being solved. In fact, they seem to be accelerating at a prodigious rate. Make no mistake, every auto manufacturer has recalls, because designing, engineering and developing automobiles is one of the most complicated endeavors on earth. But there is something deeply wrong within the Ford system of developing and building cars, and if the guy running the show – who claims to be preordained for that role (as if) – can’t get a handle on it, his tenure will fizzle out like all of the previous tenures that fizzled out before he arrived on the scene.

Changing the subject, there is definitely a virulent anti-EV faction “out there” that is equating the notion of the “Grand Transition” to EVs as some sort of plot against politically right-leaning individuals. The vitriol aimed at anything to do with EVs – and any individual who comments on it one way or the other – is growing uglier by the day. It’s easy to see why this ugliness is happening too. It’s part and parcel of the deterioration of any shred of rational discourse that has consumed this country over the last six years. The polarization of our society has now crept into the EV vs. ICE discussions, and it is truly unfortunate.

I have repeatedly gone on record as loving the sound and fury of high-performance ICE vehicles, and I will miss them once they fade from view. But realistically that will not happen in our lifetime or even a couple of lifetimes after, either. Those vehicles will remain part of our nation’s culture for many decades to come. 

But I also see a role for EVs going forward, especially in urban environments where the driving is limited and travel is becoming more and more restricted. Are there still monumental challenges associated with EVs? Absolutely. As I’ve stated repeatedly in this column, the national infrastructure for EVs isn’t there yet; in fact it’s not even close. And there are several critical issues that need to be solved, including the search and sourcing of critical raw materials, the generation of electricity itself and the systematic recycling of batteries that will ultimately benefit all. These are not insignificant problems, but we were at a similar point 125 years ago with the countless issues and problems associated with the dawn of the “horseless” carriage era, and we figured it out.

EVs will be a key part of our transportation future, there’s simply no denying that fact. Will it leave some behind? I have no doubt that it will. But to simply rain hate down on anything or anyone associated with the coming EV era is predictably short-sighted and flat-out stupid. 

As I suggested last week, I take the hate-mongering trolls with glee. In fact, the constant vitriol directed at me fortifies my spirit. So yes, go ahead, keep making my day.

The Year of the Dangerous In-Between is going to be challenging and tedious. But I am confident that the True Believers operating in every discipline in this business will make the difference for The Future. They always have and they always will.

And that’s the High-Octane Truth for this week.

Editor's Note: You can access previous issues of AE by clicking on "Next 1 Entries" below. - WG

- Editor

Editor’s Note: In this week's column, Peter presents an unexpected way to look at being thankful. In On The Table, we remind everyone that no car company in the world is more skilled at extracting as much ca$h-ola as possible from its faithful than Porsche. And Toyota breathes new life into the Prius by actually designing it – and rather successfully – for a change. In Fumes, Peter continues his much-praised series on “The Drivers,” this week featuring the great Sir Stirling Moss. And The Line wraps up the 2022 F1 season from Abu Dhabi (we frankly couldn’t wait for it to be over). Happy Thanksgiving, everyone! -WG


By Peter M. DeLorenzo

Detroit. Being thankful is a wonderful, soothing concept. It gives us an opportunity to take stock of the positives in our lives and count our blessings, however miniscule or grandiose they may be. For most of us, somewhere between those two extremes is perfectly fine, especially given the various hostile climates exerting pressure on our day-to-day experiences. 

I’m thankful for a lot in fact, too much to go into here, but suffice to say, even though it’s the cliché of clichés, I’m thankful for my health and that’s perfectly enough for me. But being The Autoextremist, when it comes to “the Biz” I’m thankful for a few other things as well.

I’m thankful for egomaniacal CEOs, the kind who have grown accustomed to having certain “less than” members of the press hang on every thought balloon they utter, giving them the unfortunate – and pathetic – impression that people actually hold them in the highest esteem, when in fact, the complete opposite is true. “The Emperor’s New Clothes” is a wonderful literary folktale by Hans Christian Anderson, but it plays like an endless documentary around these parts when it comes to certain delusional CEOs who have too many sycophants, recalcitrant twerps and spineless weasels feeding their boundless egos. It’s the Runway Show that never seems to go out of style or run out of new seasons. And thank goodness for that.

I’m thankful that Elon Musk has finally been exposed for the carpetbagging mercenary he always has been. He fleeced Tesla customers to the tune of millions of dollars by pushing “Full Self Driving” and charging them through the nose for it, even though it never worked and it cost several blindly devoted “muskateers” their lives while “beta” testing it on public streets and byways. He allowed seriously flawed vehicles to be churned out to meet sales numbers designed to appease industry analysts who were looking for vindication of their outlandishly optimistic pronouncements about Tesla and its Visionary Esteemed Dear Leader. His fabled car company has lived on “regulatory credits” for years, a fact that was vastly underreported by certain slavishly gullible members of the media who bought into the Cult of St. Elon hook, line and sinker. And now that Twitter has become a full-blown Muskian Nightmare, exposing his management “style” for what it is, which is a chaotic exercise in seat-of-the-pants whims, reactionary missteps and bloviating whiplash, we are finally – finally – finding out who Musk really is: A self-indulgent, painfully self-righteous blowhard/user who is always a half-step away from flying the whole damn enterprise into the ground, while taking everything and everybody with him. He is truly America’s Creep-in-Chief, an embarrassingly vile facsimile of a human being who has too much money for his own – and this country’s – good.

I am thankful that the “Grand Transition” to the electrification of our nation’s fleet is playing out in very measured, incremental steps of progress. As in very s-l-o-w-l-y. Forget about range anxiety, because let’s face it, 250-350 miles of range is more than most people will need for their urban travels. The real issue right now and one that will remain the issue for years to come is that the charging infrastructure buildout is woefully lagging behind the arrival of the more mainstream BEVs due in 2024. Let me restate that – except for a very few pockets of availability, the charging infrastructure in this country is damn-near nonexistent. Will that change? Sure, eventually. But we’re not there yet, in fact, we’re not even remotely close to being there. In the meantime, I am thankful for the finest array of ICE vehicles ever built at our disposal. For enthusiasts, the time is now to enjoy the kind of visceral high performance that will slowly fade from view over the next decades. I will admit that it has fostered an “End of Days” feel, but all the more reason to savor the glorious machines that are available and are begging to be driven right now. Drive, we said.

I’m thankful for the gutter trolls who send missives to our website hiding behind their phony email addresses (at least they think they’re being clever; it’s amazing how easy it is to find out who people really are “out there” -WG) and spewing their embarrassingly tedious and hate-filled vitriol at me, thinking that it somehow derails my day or my focused train of thought. I’m exceedingly happy to report that it in fact has the exact opposite effect. It makes me that much more motivated and inspired to double-down and bring the High-Octane Truth to these pages every week. So, go ahead, keep making my day.

And finally, WG and I are thankful for the industry people from all of the various disciplines - especially the True Believers - the authentic media practitioners, the accurate analysts, those in the motorsports community, and the astute readers from all walks of life who come here every week. 

We wish you and yours a Peaceful and Happy Thanksgiving, and hope you can enjoy the moments.

That’s the High-Octane Truth for this week.

- Editor

By Peter M. DeLorenzo


“The only people for me are the mad ones, the ones who are mad to live, mad to talk, mad to be saved, desirous of everything at the same time, the ones who never yawn or say a commonplace thing, but burn, burn, burn like fabulous roman candles exploding like spiders across the stars.” 

– Jack Kerouac, On the Road

We’ve reached an inflection point in this mad, mad automobile industry. Creativity is at a new peak in Design, Engineering and Product Development. The onset of the BEV Age is demanding everything, all the time, out of everyone involved. It’s all hands on deck for the True Believers across the entire spectrum of the auto industry. 

The auto companies – and their supplier partners – are deploying their “best and brightest” talent to massive BEV development programs. What does that mean, really? In GM’s case, to consider one company in particular, that means that the majority of the people who were involved in the development of the new Corvette – hands down the best car GM has ever built – have been hard at work on the company’s BEV programs for going on three years now, which says a lot about how Mary Barra, Mark Reuss & Co. see The Future. 

I have noticed that some DoomSlingers have started to come out of the woodwork to suggest that some of these companies – FCA, Ford, GM and VW just to name a few – are way out front of the transition to BEVs, too far out front, to be more precise. That means that some out there feel that the auto company executives who are actively bullish on this BEV transition are leaving their companies exposed to the vagaries of a driving populace that is still not down with the EV “thing” yet. 

These are the same people, of course, who made a cottage industry of mocking the Detroit automakers over decades for always lagging behind the curve, for always being behind the trends, for always playing catch-up. They’re the same people who suggest that the only worthwhile auto manufacturer is Tesla, that “Detroit” is collectively behind yet again, and that it would be better for all concerned if the “traditional” American automakers just faded away and allowed “hip” Tesla to become the only American automaker.

And that is so much unmitigated bullshit too. 

Last time I checked, Tesla is still not out of the woods when it comes to building its vehicles without major quality issues. We’re not talking about minor electronic glitches either – a common annoyance for all manufacturers – no, we’re still talking about system failures and parts falling off. It’s hard to mask that with descriptions of “minor” issues – unless you’re a card-carrying member of the Cult of St. Elon. It is simply unacceptable by any measure. Can you imagine if some of the quality horror stories that have plagued Tesla had hit FCA, Ford or GM? The mainstream media and the stumblebum politicians in Washington would be wielding their pitchforks with glee, demanding that “Detroit” be punished for their atrocities against humanity.

The fact of the matter is that Musk has become a toxic, malicious entity on several fronts, and I predict Tesla will pay the price for his rapidly deteriorating persona. One good thing about the Twitter fiasco? It has exposed the fundamental failings of Musk to a much broader swath of people, which is a very good thing from where I sit. That he pushed "full self driving" as an authentic feature on his cars – and charged thousands of dollars for the "privilege" of ordering it – and then had the temerity to have Tesla customers do the real world "beta" testing of the feature, when it clearly didn't even come close to working as advertised, is one of the most unconscionable and egregious affronts ever to be perpetrated on this industry. And that's saying something with the outrageous – and unforgivable – VW Diesel cheating scandal still fresh in everyone's minds. As I've said previously, I predict that Tesla is going to be slammed with massive fines from the U.S. government that will run into the hundreds of millions of dollars, if not billions. And it couldn't happen to a more deserving guy. It's just too bad the rest of Tesla's workforce will be subjected to the penalties of being associated with America's Creep in Chief.

Resuming our regularly scheduled programming, the notion that the more “traditional” automakers are too far ahead of the unfolding BEV transition is laughable. It’s not just traditional industry lead times at play here; it’s the fact that the prevailing winds across the globe are blowing in the direction of fundamental change, and to deny that is simply akin to plunging one’s head in the sand. This can’t be dismissed as a “trend” or a “fad” either. We are moving into a new global sensibility that is picking up speed by the day. 

Consumers will slowly but surely come around to the efficacy of BEVs, while the last vestiges of the “ICE Age” play themselves out over the next decades. But major issues remain, specifically the charging infrastructure – or lack thereof – and affordability, battery durability and the limitations of long-distance travel. Just today (November 14th), The New York Times published a lengthy article about the growing acceptance of EVs. The article started off with glowing reports from the EV front, with people gushing about how much they’re loving their EVs. But that perspective was countered with a story about a mom and dad driving their daughter up to Michigan State – with all of the associated flotsam and jetsam needed for college life – in a VW iD4. The mom thought she had charted the trip from Columbus, Ohio, to East Lansing with precision, planning to stop for a recharge in Toledo. Except that with the extra load of people and belongings on board, she realized as she was approaching Findlay, Ohio, that they weren’t going to make Toledo, because the VW was using juice at a prodigious rate. Upon arriving in Findlay, the few chargers available were either not working properly or were behind locked gates. The family ended up having to rent a van to complete the trip. As you might imagine this was a giant bowl of Not Good and perfectly crystalizes why this transition to EVs is going to be painful, as I’ve been saying all along.

But to pretend that this “Grand Transition” isn’t marching inexorably forward is to simply deny the reality of what’s happening. Yes, this new “EV Age” is going to take time, especially in the heart of the mainstream market. The super-expensive “show pony” EVs are nice and everything, but the real action will unfold in 2024, when many more affordable choices arrive on the scene. 

So – and this is coming from a diehard high-performance ICE enthusiast – the new EV Age will take more time in this country, but there’s no denying where this is going. So, are the companies going “all-in” to the BEV transition gambling with their futures? Guess what, these companies gamble with their futures every day, so this is nothing new; it’s just part of the game.

As I mentioned earlier, the transition to BEVs is demanding everything out of everyone involved, all the time. That this business isn’t for the faint of heart has been well documented in these pages. That it’s an “up at dawn, pride swallowing siege” (thanks, Cameron Crowe) is just part of the deal. The BEV imperative is placing new demands and new urgencies on the True Believers across the board. 

And right now, it’s time for these True Believin’ shooting stars to soar to new heights. Good enough isn’t even part of the lexicon for these people. Neither is complacency or going through the motions. These people push and strive as a matter of course. Yesterday’s breakthroughs give way to tomorrow’s starting points. Make no mistake about it, the BEV Era is bringing out the best from the best and the brightest, which is why I remain optimistic about where this is all going.

Yes, a booming V8 will always remain close to my heart, but I envision that the BEV Era will accelerate the possibilities for companies and consumers alike. Change, in this case, as hard as it is to contemplate at times, will be very, very good. 

Not that these companies need to be admonished to do so, but they should unleash their shooting stars and let them soar unimpeded. I firmly believe that the results will be breathtaking.

And that’s the High-Octane Truth for this week. 

Editor's Note: You can access previous issues of AE by clicking on "Next 1 Entries" below. - WG
- Megan Lampinen

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Malaysia proposes single clearance system at Causeway to reduce congestion at JB-SG crossing

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Jalan Yong Shook Lin in PJ State to be closed every Fri-Sun, 8pm to midnight for PJ Weekend Flea Market

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- David Bailey, Professor of Business Economics, University of Birmingham
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- Vivek Astvansh, Professor of Marketing and Data Science, Indiana University
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The flagging UK car industry is moving too slowly on battery production to compete on the global market
The road ahead needs electricity.
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Canada must once again grab its share of the auto industry, despite U.S. protectionism
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- Tom Lyon, Dow Professor of Sustainable Science, Technology and Commerce; Professor of Business Economics; Public Policy Professor of Environment and Sustainability, University of Michigan
Millennials drive for 8% fewer trips than older generations
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- William Anderson, Director, Cross Border Institute, University of Windsor
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- Tom Stacey, Senior Lecturer in Operations and Supply Chain Management, Anglia Ruskin University
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- Gavin Harper, Research Fellow, Birmingham Centre for Strategic Elements & Critical Materials, University of Birmingham
Ford Bridgend closure: the UK's car industry could stage a revival by recycling rare earths
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- Jack Barkenbus, Visiting Scholar, Vanderbilt Institute for Energy & Environment, Vanderbilt University
The electric vehicle revolution will come from China, not the US
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- David Keith, Assistant Professor of System Dynamics, Massachusetts Institute of Technology (MIT)
Why reducing carbon emissions from cars and trucks will be so hard
Only a small share of the vehicles Americans buy are electric. Even if all of them were, it would take until 2040 to phase out the fossil fuels used to power personal travel and road-bound freight.
- Elham Mafi-Kreft, Clinical Associate Professor of Business Economics, Indiana University
How a 'hard' Brexit would harm US banks, carmakers and drug companies
American companies still face enormous uncertainty about how they’ll be doing business in the UK and EU in the coming years, particularly as the April 12 Brexit deadline draws closer.
- Jim Saker, Director of the Centre for Automotive Management, School of Business and Economics, Loughborough University
Honda closure: Brexit is tipping the UK's car industry over the edge
Globally, the car industry is struggling. But Brexit is pushing manufacturers out of the UK.
- François-Xavier de Vaujany, Professeur, PSL-Université Paris-Dauphine (DRM), Université Paris Dauphine – PSL
Carlos Ghosn, algorithms and ‘gilets jaunes’: becoming responsible
What do the Carlos Ghosn scandal, the rising power of algorithms and the “gilets jaunes” have in common? The need to extend the spatial and temporal definitions of responsibility.
US Automotive Market Share Wars Will Resume in 2023

Recovering inventories are increasing dealer stock, while interest rate hikes and economic headwinds will dampen demand - forcing OEMs and dealers to make deals once again. The question is: Who will blink first?

By Mark Rechtin, Executive Editor, S&P Global Mobility

After nearly two years of inflated new- and used-car prices - with car dealers asking consumers to pay thousands of dollars over MSRP - the US industry is primed for a reset to previous competitive norms.

A combination of industry factors and macroeconomic conditions could trigger a potentially bloody battle for market share this year, according to an analysis by S&P Global Mobility. Automakers and dealers that have grown accustomed to huge profits on vehicles sold as soon as they leave the factory will see a return to traditional conditions of accumulating showroom inventories and the need for incentives to move the metal.

This could mean a big win for consumers still in the market for a new or used vehicle, and who are not intimidated by sharply increased lending rates or other economic headwinds. Already there are signs of increased new-car inventories and declining used-car prices - though not yet to pre-COVID levels.

"Things will heat up this year when the first tranche of COVID-sold vehicles starts returning to market," predicts Dave Mondragon, vice president of product development for S&P Global Mobility. "These vehicles are all underwater. They were sold at record-high prices with no discounts, and there will be little to no equity to roll into a new vehicle."

It's not so much the volume of vehicles coming back - new-vehicle sales cratered in 2020 when production lines slowed due to supply chain snarls. But the practice by many dealerships of using vehicle shortages to sell at inflated prices means nearly every vehicle coming back has massive negative equity - with the customer owing thousands of dollars more than the vehicle is worth at trade-in. "That's when discounting starts up again," Mondragon says.

Inventory Rebounding

With supply chain snarls easing, an S&P Global Mobility analysis of inventory data shows a 91% increase in advertised new-vehicle dealer stock at the end of December 2022 compared to February, a sharp 43% uptick compared to August 2022, and a 21% jump compared to October.

"Though we're not back to historical norms, inventory pressures are starting to ease," said Matt Trommer, S&P Global Mobility associate director of innovation product management for in-market reporting.

"The only real difference was domestic and European brands seeing improved inventories earlier in 2022, and Asian brands ramping up to a greater extent in the second half of '22 after actually going down in the February-to-August period," Trommer said. "In a few cases, we're seeing inventories coming up quite a bit. Jeep, GMC and Mazda are now showing a broad availability of vehicles. Other brands such as Honda, Kia and Subaru, however, are showing more limited availability."

"We're in the formative stages of inventory rebuilding following six months of year-over-year increases that ended 35 months of year-over-declines in July 2022," said Joe Langley, associate director of research and analysis for S&P Global Mobility's North American Light Vehicle Forecasting & Analysis team. "Stellantis is the closest to having normalized inventory. They are going to have to ask themselves, 'What do we do next?'"

In December, Ford, Chevrolet, Ram, and Jeep had about 300,000 units of leftover 2022 models advertised as available for sale. Those four brands accounted for 71% of 2022 advertised inventory listed by mainstream brand dealers - and 66% of all dealer-advertised inventory when including luxury marques. Among luxury brands, Mercedes-Benz and Lincoln still showed the most remaining 2022 vehicles in dealer advertised inventory, according to the S&P Global Mobility analysis.

That said, not every brand will be in the same circumstances. After the initial semiconductor crunch, GM, Ford, and Stellantis better managed their supply chains and are closer to being back to traditional production levels; the Japanese brands are still struggling with supply-chain issues. While less impacted, Hyundai and Kia are also dealing with structural issues of not having enough factory capacity to meet growing demand.

"We're seeing the US3 being the closest to normalized inventory and they will have to start asking themselves hard questions relating to production planning, product mix and pricing along with incentives activity," Langley said. "The surprise of 2023 will be vehicle availability. It will still be well below industry norms, but inventory for the spring selling season will be up 50-70% from 2022 levels."

Another element that could factor into increased consumer power in the new-car arena: A softening in inflated used-car values.

When COVID shut down new-car manufacturing, demand (and prices) for used cars soared starting in early 2021. Data from CARFAX, part of S&P Global Mobility, shows that - pre-COVID - average weekly dealer listing prices for used cars had held steady, slightly above $19,000. The first quarter of 2021 saw a rapid price shock that resulted in peak pricing of $29,025 in Q1 2022. But last fall, used-car prices started retreating. By mid-December, CARFAX data showed a retreat to $27,239. And while prices are nowhere near pre-COVID levels, there is no evidence that inflated prices will hold.

One potential easing of a price crash: A momentary drop-off in off-lease cars coming back during the three-year anniversary of the COVID shutdown, when sales cratered for several months in 2020. A shortfall in the certified-pre-owned segment might resume demand pressure on the new-car side and temporarily hold prices steady.

External Forces

There are usually multiple causes of swings in market behavior, and it appears US light vehicle sales have a perfect storm of culminating events that will come to a head starting in spring 2023: In addition to rebounding vehicle inventories, a sharp rise in U.S. lending rates, inflation leading to lower disposable income among households, and nervy macroeconomic headwinds are worrying US consumers.

Already there are storm clouds on the horizon in terms of demand destruction. The daily new-car selling rate metric remained remarkably steady in the second half of 2022, even while some pockets of inventory accumulated. While stubbornly sticky low levels of inventory dampened year-end clearance incentives, any backward movement in the daily selling metric to begin 2023 could be signal of a retrenching auto consumer.

Households are eyeing the uncertain economy as a reason to hold back on new purchases. If workers do not receive 2023 pay raises commensurate with 2022's sudden inflationary spike, and large-scale layoffs continue, that will prompt conservatism in household capital expenditures.

"Ongoing supply chain challenges and recessionary fears will result in a cautious build-back for the market," said Chris Hopson, manager of North American light vehicle sales forecasting for S&P Global Mobility. "US consumers are hunkering down, and recovery towards pre-pandemic vehicle demand levels feels like a hard sell. Inventory and incentive activity will be key barometers to gauge potential demand destruction."

From a forecasting perspective, S&P Global Mobility recently downgraded the US demand settings for 2023 due to darkening economic clouds. The immediate release of pent-up demand of the past two years that many OEMs anticipated would absorb increasing production is now wavering, and may be eliminated altogether if consumers retrench their spending habits. This will prompt downward pressure on vehicle pricing.

Who Blinks First?

Where will the discounts first appear? Likely in full-size trucks. GM, Ford and Stellantis need full-size truck volumes and profits to support investment in their electrified futures. GM is the only one of the three that has incremental capacity to produce more full-size pickups - whether they're ICE or BEV. Ford is capacity-constrained until Blue Oval City comes online in the second half of 2025, and Stellantis has their own limitations in the short-term.

"This essentially puts GM in the driver's seat if they want to increase incentives to drive additional volume. If they do this, Ford and Stellantis will be forced to follow," Langley said. "There is still room for these manufacturers to increase incentives on their pickups and still be ahead on the revenue side if they experience comparable sales improvements from those higher incentives."

After all, pre-COVID incentives on big pickups were running $6,000 per unit in January 2020, and the Detroit automakers were still profitable. But recently, demand for pickups has waned as more buyers move to SUVs.

Despite full-size pickups' important contributions to each brand's business case and factory output, the share of half-ton retail sales has been declining for more than two years, according to S&P Global Mobility data. The segment's retail share in Q3 2022 was 7.8% - lower than in any other quarter dating back to Q3 2012.

Another area of potential incentive skirmish? Likely in a high-volume segment with plenty of players, such as mainstream compact SUVs. In addition, a competitive luxury market with additional pressure from Tesla could see a higher-end brand with resurgent inventories use the opportunity to grab share. Meanwhile, Tesla's recent price cuts across its lineup could prompt a price war in the BEV space.

At least one luxury automaker has stated it is openly looking at conquesting its rivals, and is already injecting money into the market to capture share. They see it as a once-in-a-lifetime opportunity, and are thinking that investing earlier in incentives - either cash on the hood, or subsidized lending rates - will result in the best chance to grab share. Meanwhile, another luxury brand with already strong days' supply is cranking up subsidized lease deals.

The next automaker's sales chief willing to cede market share without a fight will be the first one. Performance bonuses, career trajectories, and factory output requirements hinge on it. Furthermore, failing to spend to retain market share has downstream costs: The cost of losing loyal customers, multiplied by the cost of thousands of conquests needed to replace them, must also be considered. Also, automakers' and suppliers' factories need to run at high percentages of capacity to be profitable. Lofty talk of inventory control sounds great, until just-built vehicles start stacking up in factory-overflow lots.

Remember: Average transaction prices in December were $49,500, so for every 20,000 vehicles built, OEMs can generate nearly $1 billion in revenue - a tempting carrot for OEMs when revenue goals are under pressure.

As a result, spring and summer of 2023 could force automakers into aggressively pursuing customers with incentives while attempting to maintain the healthy profit margins they have seen for the past two years.

The upshot will be a chaotic accordion effect in monthly sales results, as fluctuating inventories run head-on into unsettled consumer confidence and numerous industry and macroeconomic conditions. Automakers and dealers will be hard pressed to find a consistently successful sales strategy that allows them to maintain or increase share during such uncertain times.

Middle East & Africa Sales and Production Commentary- January 2023

Middle East/Africa sales

December 2022: +8.7%; 0.318 million units vs. 0.292 million units
YTD 2022: +5.6%; 3.756 million units vs. 3.556 million units

Light vehicle demand in the Middle East and Africa (MEA) region posted an estimated increase of 8.7% in December 2022 compared with the same month in 2021, signaling a stable demand trend during the final months of the year. The upward trajectory has now been positive over five consecutive months. However, the uncertainty regarding global inflationary pressures and rising interest rates will continue to cast doubts that a fuller recovery in new-vehicle registrations is possible, as the first half of the 2023 outlook continues to call for a weak pace regarding modest car demand.Regarding new vehicle registrations over the last year, the first and third quarters each posted low, albeit positive growth rates, while the second and fourth quarters posted high rates above 8.0%.The main external events that heavily affected demand for new vehicles were the supply crunch due to the global semiconductor shortage and the Russia-Ukraine conflict. The latter has created many knock-on effects such as imbalances regarding the global energy sector, disruptions to key agricultural supply chains, and the associated cost pressures that have worsened the high inflation trend that had already begun halfway through 2021 following the pandemic-related economic turbulence and fiscal stimulus provided by governments and central banks as economic sectors reopened with pent-up demand. These events are expected to remain in global current affairs throughout 2023.As for 2022, new-vehicle demand is estimated to have matched the result of 2021 and surpassed 3.5 million units for the second consecutive year, rising by 5.6%. This result has taken volumes back on track toward achieving the level of sales reported in 2019, just before the outbreak of the global COVID-19 pandemic. Nevertheless, several years will pass until volumes hit the 5.0-million-unit mark—the level reached back in 2014 (nine years ago).Vehicle supply chain disruptions will continue in 2023 as specific factories in Germany and neighboring countries are greatly impacted owing to the raw material shortages and regional transportation logistics of vehicle parts resulting from the war in Ukraine. Central European countries such as Poland, Czechia, and Slovakia also have significant vehicle plants and are more dependent on suppliers located within Ukraine. Furthermore, China's turbulent on-and-off COVID-19 lockdown policies will continue to impact its vehicle manufacturing sector, and export plans may fall short of targets. As a result, premium vehicles made in Germany and exported to the MEA region will continue to be more restricted owing to lower production levels in the short term. This will also apply to new Chinese-based OEMs that have targeted MEA with their vehicle exports. Other car makers continue to adapt and many have increased their vehicle sourcing from South Asia, namely India, to meet client expectations and keep the sales order backlog under control.In recent years, regional economies were already very fragile, and the COVID-19 pandemic further deteriorated both business and consumer confidence levels. In addition, record-low crude oil prices in 2020 through mid-2021 further depressed the economies of countries that heavily depend on oil export revenues, as global supply heavily overshadowed global demand. Key industry sectors in developed countries, such as airlines, cruises, cargo shipping, fuel stations, and manufacturing plants, significantly lowered their demand for oil, resulting from government-imposed lockdowns forcing consumers to stay at home. As a result, countries heavily dependent on either oil or tourism revenues crashed across the region. At present, a more positive turnaround gathered pace in the first half of 2022 for crude oil-exporting nations, underlined by high global prices, while tourism-based countries experienced a slight uptick in the second half of the year. In sum, the economic recoveries will gain momentum at various speeds, depending on each region's and country's specific core sectors. Additionally, the conflict between Russia and Ukraine has resulted in the escalation of global oil prices, as many countries have decided to halt the import of Russian oil and gas. As a result, lower supply will lead to higher prices for consumers and industry. Other crude oil-exporting countries are set to gain significantly, which should be the case for Gulf countries. Robust demand for commodities has benefited specific countries. The return of tourism will also kickstart the revival of car rental companies, representing an important market share in some countries that have frozen new registrations since the start of the pandemic and decreased the size of their fleets to readjust to demand levels. Higher demand for new vehicles will face longer waiting times because of the global chip shortages that have forced carmakers to slow production rates. As a result, many registrations will be pushed out to early 2023.Estimated full-year volumes in January-December 2021 were up by 19.0%, rebounding from the overall negative trend that developed in the past six years (2015-20), in which vehicle sales steadily decreased from 4.6 million units to 2.9 million units. The economic recovery will enable countries across the region to plan for expansion projects and support dynamic sectors with industries adapting to future consumer requirements, such as energy resources. Nevertheless, we continue to highlight the need for structural economic reforms to be implemented, as specific sectors will continue to overshadow this recovery.The estimated forecast for full-year 2022 for the MEA region is set at 3.756 million units (revised down by 0.9% versus last month), representing a 5.6% year-on-year (y/y) increase, which still holds total regional volumes back to levels reached 16 years ago—in 2006. Moreover, falling demand in six consecutive years (2015-20) highlights the economic instability across the region and consumers' cautiousness to commit to a new-vehicle purchase.Vehicle sales in December 2022 were affected by the distinct performances across the region, with specific economic developments affecting various markets and subregions in different ways. Vehicle demand during December 2022 in the Middle East (excluding Iran) and the Gulf rose by 22.3% compared with the same month in 2021 but posted a slight decrease in the African continent by 7.2%. Finally, owing to continued volatility, vehicle demand in Iran increased by an estimated 12.9%.As previously forecast, the rising vehicle demand trend across the MEA region will be reported at different paces for each country and depends on the specific nation's economic recovery plans and execution. The stronger demand expected in the next few years will continue to be periodically disrupted owing to a certain degree of economic volatility from post-COVID-19 "softer" restrictions to several industries that will continue to linger. Over the next few quarters, the steady fall in cases associated with the Omicron variant may bring new business to the travel industry and wider economies throughout the region after significant disruptions over the last few years. The result will be higher sales orders from rental companies to renew their vehicle rental fleets. Additionally, the slower recovery pace of vehicle registrations will fail to match the higher demand from consumers for new vehicles resulting from the cautious easing of economic restrictions—and especially due to the chip shortage affecting vehicle production globally.Sales of new vehicles in full year 2022 may match the previous year, posting low growth at 0.2% across the Middle East (excluding Iran) and the Gulf subregion owing to higher projections for Kuwait, Qatar, and the United Arab Emirates. The introduction of value-added tax (VAT) rates across the Gulf subregion continues to proceed as Oman introduced a 5% VAT last year (April 2021), becoming the fourth Gulf country to do so. Only Kuwait and Qatar are lagging with their implementation process. Expectations have now changed for Kuwait and Qatar to introduce the VAT in the next year, as both countries express concerns that high inflation has derailed the process. The new target date for VAT implementation has been pushed out by six months to 2024. The Gulf nations of Bahrain, Saudi Arabia, and the United Arab Emirates have already introduced a VAT. Recovery was strong during the last quarter of 2022 and vehicle demand is expected to post an equally high registration pace in the first quarter or 2023. The success of the World Cup tournament held in Qatar during November and December have allowed the country and Gulf subregion as a whole to shine globally, bringing stronger calls for more business ventures to support further economic expansion projects in several Gulf countries. More sporting events and tourism will benefit the other sectors as economic diversification plans continue. Also, the rise of global energy (oil and natural gas) prices and the sector's critical transformation globally will benefit the Gulf subregion's economic landscape.Demand for new vehicles in the Middle East and Gulf region (excluding Iran) rose by an estimated 22.3% in December 2022, slightly improving the recovery that has begun to form in the region. Across the region, many countries have lifted economic restrictions, and business activity has returned. For 2023, new vehicle demand will continue to recover throughout the year. At the extreme end of the scale, Iranian vehicle sales collapsed in two years during 2018-19 to levels reached over 20 years ago, crashing from the highs registered in 2017 at 1.6 million units, down to 0.8 million units in 2019. Since then, Iranian consumers have been denied American, European, Japanese, and Korean vehicle badges, resulting in the local industry slowly climbing back up while struggling to scale vehicle production up until the present day. Moreover, several Chinese carmakers have rushed to fill the gap left by their Western competitors and captured significant sales volumes during this time. As a result, the stark double-digit declines in the past that were a direct result of the renewed economic sanctions imposed by the United States have now been slowly recovering thanks to aid from the Chinese car industry's export strategy. The Iranian market in 2022 is now expected to grow by 23.7%, posting the third consecutive year of higher vehicle sales. Nevertheless, economic developments will continue to be a concern and affect the current-day sentiments of Iranians. Looking forward, Iranian car owners will continue to hold onto their vehicles for a longer period of time, thus driving up the age of the fleet of Iranian vehicles. In turn, this trend will lead to higher demand for new vehicles in the longer term.Across the Gulf region, higher taxation may slightly slow demand for high-priced goods. Iran and Saudi Arabia are the largest vehicle markets in the Middle East and Gulf region, and their performance will significantly affect overall demand. In recent years, Iran's vehicle demand registered one in every two vehicles sold in the region, thus highlighting the importance of the country. Now Saudi Arabia is looking to kick start its own vehicle manufacturing sector and is providing financial funding to some electric vehicle startups such as Lucid Motors with the intention that more OEMs will follow suit.Unfortunately, the African continent felt the full force of the COVID-19 pandemic in the second half of 2020; this struggle continued throughout 2022, as the global epicenter of the virus shifted onto the continent. African leaders continue to focus on containing the virus from further spreading. South Africa, in particular, recorded a significant number of positive cases, thus having registered a fourth wave brought on by the Omicron variant in the first quarter of 2022. At present, registered active cases are decreasing and the continent has now begun to return to some normality regarding economic activity.Nevertheless, demand for new vehicles in Africa are estimated to have increased by an estimated 20.7% in full-year 2021, despite social unrest and signaling the green shoots of recovery, as substantial pent-up demand has significantly risen over the years. Since 2015, vehicle sales have considerably fallen from the highs of fewer than 2.0 million units to the current lows of fewer than 1.0 million units. The positive momentum during late 2018 and the first half of 2019 was short-lived, and the start of a turnaround has begun again from mid-2021 onward. Countries in North Africa, such as Algeria and Morocco, fell into negative territory in 2020, joining South Africa and hurting the region's overall demand levels. As a result of much weaker consumer demand, vehicle demand across Africa heavily decreased by 27.2% in full-year 2020, despite some relative support from the rise in commodity prices. Vehicle demand will also continue to be heavily affected by slightly higher levels of global crude oil demand, as a trending recovery in prices has materialized in late 2021. Nevertheless, total African vehicle demand has fallen back to levels achieved 17 years ago, in 2006. This scenario will lead to more hardship across Sub-Saharan countries, while North African countries will also suffer from a cautious recovery in Western Europe. For 2022, sales of new vehicles in the African continent are estimated to have slightly fallen by 3.0% versus the previous year.North African countries have also been struggling to put their economies on the right path to economic growth. Demand for new vehicles heavily fell in the three-year period of 2015-17 owing to the economic collapse in Algeria, Egypt, and Tunisia. Overall, North African vehicle sales have fallen to levels registered 15 years ago. In 2018, Algeria implemented a vehicle import quota system, and it has since continued to tank, with sales developments destined to be drastically lower than the normal market demand. In fact, new-vehicle registrations are estimated to have reached an all-time low in 2021 at 21,000 units, an abysmal gap from the highs of 500,000 units in 2012 and 2013 for Algeria. For 2022, the Algerian car market is forecast to slightly rise, at just above 25,000 units. Egypt's vehicle market posted strong results in 2021, up 25%, following a few turbulent years, and should continue on the path of a smooth recovery throughout the near term. Full-year 2022 demand will likely decrease but continue to surpass 190,000 vehicles for the third consecutive year. Finally, Morocco's vehicle market continues to develop in line with its economic growth, despite weaker sales resulting from effects of the COVID-19 virus outbreak on the economy and significant trading partners. New-vehicle demand rose by more than 30% in 2021, and a similar target of above 160,000 units is set for 2022. The overall recovery in demand will likely be mild for new vehicles across North Africa in 2022, as more carmakers and many tier suppliers have delayed expanding their manufacturing footprint in the region.The Sub-Saharan region has also struggled in recent years owing to low global oil prices hurting oil revenues for exporting countries and low commodity prices hurting agricultural and mining revenues for other countries. Following the high volumes reached in 2014, vehicle demand has struggled to achieve any consistency, trending downward in the past five years, and imports of used vehicles continue to flood the continent despite the government policy. Vehicle sales in 2022 are estimated to remain at the levels achieved 20 years ago. A stronger turnaround is projected beyond 2024 as more governments implement growth strategies for the automotive sector.South Africa is the largest vehicle market in Africa, but the economic landscape has been extremely difficult during the past few years and was further depressed owing to COVID-19, despite recent strong demand for natural resources and precious metals. Demand for new vehicles continues to be recovering, yet cautious owing to an outdated automotive policy and the political tension within the African National Congress (ANC), which in turn has led to a soft economic policy. The ANC led by Cyril Ramaphosa won the general elections held in May 2019, and the party's main task has been to provide greater stability, which is critical and necessary to turn around low consumer confidence levels. Big-ticket purchases, such as new vehicles, have been largely postponed during the COVID-19 pandemic and should recover at a more solid pace well into the first half of 2023. As a result of the government lockdown measures, which restricted movement and closed businesses over several months in 2020, consumer spending sharply declined. At present, a recovery is slowly unraveling, and vehicle sales in the full year of 2021 were up by 22.1%. However, the results continue to lag behind the pre-pandemic sales performance of 2019, which shows the underlining struggle to renew the vehicle fleet. Furthermore, social unrest will continue to be an economic threat as recently staged, following the arrest of former president Jacob Zuma. The resulting chaos, looting, and violence in the Gauteng and Kwa-Zulu Natal provinces hurt local communities and businesses. For 2022, new-vehicle sales have posted gains in each month and achieved a rise of 13.9% at 507,000 units.

Global crude oil outlook

The oil market in 2023 will be under new and expanded management. The United States and the European Union are new market managers and will attempt to set—or at least influence—the price of more than 5 million barrels per day (MMb/d) of Russian seaborne oil exports. The price at which Russian oil is sold, in turn, can influence other prices. The aim is to keep overall oil prices moderate to low. OPEC+ is the established market manager. It will continue to adjust supply, but to support high prices. The oil market has no master, even if more countries aim to manage it. Indeed, more market management could continue to fuel the high oil price volatility we have seen in 2022.The disruption to Russian crude oil exports is so far less than feared, but the story is not over yet. The goal of the US-led price cap is to keep Russian oil flowing to markets outside of Europe. But beware of unintended consequences as the more complicated EU import ban and price cap on Russian product exports hits on 5 February 2023.Beijing's COVID-19 policies will be the biggest factor in determining if world oil demand growth hits our projections of 1.7 MMb/d in 2023 and again in 2024. The sharp reversal of mainland China's zero-COVID-19 policy—many restrictions on mobility have been eliminated—means that cases will rise, but it also increases the prospects of a return to oil demand growth once the winter is over.Immunity from price spikes? The Joe Biden administration's grant of sovereign immunity—and protection against US lawsuits—to Saudi Arabia's prime minister and crown prince removes a thorn in the US-Saudi relationship. Could this provide the West with immunity from oil price spikes? It is not inconceivable that the United States could implicitly coordinate decisions about how the US Strategic Petroleum Reserve is used with OPEC+ actions.Our base-case assumptions point to moderate oil supply surpluses for 2023 and 2024, but with inventories still low, OPEC+ action will lift prices above USD80/bbl and USD90/bbl. Keep in mind that geopolitical struggles among great powers will lead to surprises and unexpected outcomes.Mainland China is learning from the West's reaction to the war in Ukraine. Mainland China is eager to better insulate itself from Western financial and economic sanctions—now and in the future. In the coming years, mainland China aims to settle some of its oil purchases in yuan as opposed to the US dollar. If this effort is successful, it could be among the most profound changes to oil pricing and trade since the spot and futures markets became the dominant price-setting mechanism in the 1980s.

Middle East/Africa production

December 2022: -34.8%; 110,000 units vs. 169,000 units
YTD 2022: +9.2%; 2,242,000 units vs. 2,053,000 units

After the United States reimposed sanctions on Iran in 2018, companies from various industries, including Stellantis and Renault, discontinued their business in and with Iran. As a result, production in the country has essentially relied on the activities of domestic OEMs, such as Iran Khodro and SAIPA. Since the crash of the market in the first half of 2019, output has been picking up, as the supply chain is being reconstructed—the country's production volumes are growing every year, with another gain of 10% in 2022 versus 2021. The key launches were the Tara from Iran Khodro and the Shahin from SAIPA, and both manufacturers have announced a lineup renewal in the near future.In Algeria, following import restrictions and the obligation for automotive dealers to invest in industrial or semi-industrial activities since 2017, several assembly operations have spawned in the country. However, the local content of this regulatory-related activity was close to zero, and the system collapsed in 2019 after the change of administration. Since then, officials have partially lifted import restrictions, and a new industrial assembly regime is in place. Within this new framework, production plummeted 97% in 2020 to 4,400 units and remained relatively low in 2022 at about 7,000 units. Renault and Stellantis, which have made investments to raise the level of local content, will likely attempt to continue car assembly activities in the country. Mercedes-Benz should also continue car assembly at its knocked-down (KD) plant near Tiaret with 3,000 vehicles per year. New energy deals concluded in 2022 may attract additional investments in the country. However, total volume forecast does not exceed 60,000 vehicles per year in the long-term horizon.In South Africa, volumes remained under pressure in 2020-21 as the COVID-19 pandemic affected domestic and export demand for vehicles. Production in 2020 was down 30% compared with 2019 and recovered only 12% in 2021 thanks to the transfer of some Volkswagen (VW) volume from Spain and new model launches at Mercedes-Benz and Toyota. In April 2022, the country was hit by floods, causing temporary closures of damaged production facilities, such as the Toyota South Africa Motors plant that returned to preflood production levels only by the end of September after four months of halted production. Thus, production in the country in 2022 only reached +7% versus the previous year.In Morocco, pre-COVID-19 production volumes were achieved in 2022, an increase of 17% compared with 2021. Renault's production remains strong with high demand for CMF-B LS platform-based vehicles, and the new PSA plant in Kenitra increases its capacity utilization every year. It was built with a capacity of 200,000 units per year in 2020 to produce the Peugeot 208; later in 2022, Stellantis announced plans to double its capacity and the OEM's presence in the region.
Tesla share of EV market declines; Domestics, Koreans and Europeans gain

As new electric vehicle brands and models come to market, market shares are changing accordingly. Tesla remains the dominant player, but its share gradually has been declining since the fall of 2021, as shown below. From 77.8% in November 2021, Tesla's EV share has dropped more than 20 percentage points to 57.1% this past November. Put another way, Tesla's one-year decline itself is equal to more than a fifth of the entire US EV market. At the same time, EV shares of non-Tesla domestic brands, the Koreans, Volkswagen, and the three German luxury brands have risen.

One reason for Tesla's decline is the increase in EV model count. Fifty-one EVs now are available, a 59% increase from 32 models just one year ago. These new models accounted for 10,390 new registrations in November 2022, equal to 15.1 % of the EV market. Four of these new entrants, including the Ford F-Series Lightning, BMW i4 eDrive40, Hyundai Ioniq 5 and Rivian EDV, by themselves had 6,018 deliveries in November or 58% of all new EV model registrations.

A second - and related - driver of shifting EV brand market shares is the change in migration patterns from ICE (Internal Combustion Engine) to EV. Households with an ICE vehicle in the garage that return to market and acquire an EV are acquiring a Tesla at substantially lower rates than a year ago - this is true for all makes except Porsche, where the decline is marginal. Of the 15 mainstream and 13 luxury brands with significant return to market volumes this past fall, everyone had fewer owners (who acquired an EV) migrating to Tesla versus the year before. The chart below illustrates that the change in movement to Tesla declined by 20 percentage points or more for five of the fifteen mainstream brands and three of the thirteen luxury brands.

This decline in industry-wide movement to Tesla is supported by S&P Global Mobility conquest and defection data. As shown below, while Tesla's conquest/defection ratio has been erratic, it clearly is down this past fall when compared to a year ago, dropping 2.1 points to 4.6. Lower migration from non-Tesla brands to Tesla, everything else being equal, lowers Tesla conquests which lowers its ratio.

The growth of the US EV market will accelerate as more models arrive. There are 51 models on the market now (with at least one new registration in November), and this will rise to 78 by the end of 2023; then the EV model count will more than double to 160 by the end of 2025. This influx will put downward pressure on EV share for all brands, including Tesla.

Note: All market share calculations are based on total new light-vehicle registrations.


Top 10 Industry Trends Report

This automotive insight is part of our monthly Top 10 Industry Trends Report. The report findings are taken from new and used registration and loyalty data.

The December report is now available, incorporating November 2022 CFI and LAT data. To download the report, please click below.


January 2023 US auto sales highlight mixed messaging
January 2023 US auto sales are expected to advance mildly from the year-ago level; seasonally adjusted annual rate (SAAR) will jump once again.

With volume for January 2023 projected at 1.015 million units, US auto sales are estimated to translate to an estimated sales pace of 15.5 million units (seasonally adjusted annual rate: SAAR). While the SAAR reading would be the highest monthly level since May 2021, we've seen this pattern before and the underlying dynamics of the market remain in flux.

"Auto consumers continue to be impacted by an uncertain purchase environment. While positive developments regarding mildly retreating vehicle prices and rising pockets of inventory bode well, interest rates remain high and economic headwinds persist," said Chris Hopson, principal analyst at S&P Global Mobility. "None of these issues will be resolved quickly as we move through 2023. The January 2023 expected SAAR reading may have jumped from the month-prior reading of 13.3 million units, but the unsteady combination of consumers, inventory and economic conditions will dictate monthly new vehicle sales levels."

The S&P Global Mobility auto outlook for 2023 continues to carry a countercyclical narrative: We expect production levels to continue to develop even as economic conditions are expected to deteriorate through the early stages of next year. The advancing production levels, along with reports of sustained retail order books, recovering stock of vehicles, and a fleet sector that remains starved for product should provide some impetus to auto demand levels even as an economic recession looms. We project 2023 calendar year volume of 14.8 million units, a 7% increase from the estimated 2022 tally.

Sustained development of battery-electric vehicle (BEV) sales remains a constant assumption for 2023. BEV share is expected to reach 7.4% in January 2023, an all-time record mix level, pushed by the notable Tesla downward price adjustments. While this is the first shot in a BEV price war, the reaction of other auto companies will determine whether the January mix level will be a blip in the trend or a dynamic tipping point in the electrification progress of the market.

The trouble with Nomads

Those car shoppers you're strategizing to conquest from your rival brands? Even if you win them over, there is a high probability they won't stick around.

Most automotive customers who are new to a brand often leave for yet another brand when they return to market. In fact, more than half of these "Nomads" make a habit of it.

Automotive marketers typically focus on two types of marketing: conquest and loyalty. What is less often talked about is the in-between - the loyalty of conquests. What does this mean? The effort and triumph of a successful conquest-marketing campaign can be undermined if automakers are losing most of their previous conquests at the same time.

Nomads who own a brand once and leave are also known as 'One and Done' - about 58 percent of Nomads left their brand in the 12 months ending July 2022. That's the highest 'One and Done' rate (defection rate of Nomads) in at least 10 years, according to data analysis by S&P Global Mobility.

There are three distinct customer loyalty types: Super Loyalists, Loyalists and Nomads. Super Loyalists are consumers with a history of multiple repeat purchases and are most likely to repurchase from the same brand. Loyalists are consumers with a repeat purchase, and Nomads show no identifiable loyalty patterns to any brand and are most likely to defect.

Brands who have a presence in more segments tend to have a lower 'One and Done' rate. Filling a portfolio gap (by launching a vehicle in a key segment) helps brands retain nomads (and customers in general).

Between 2017 and 2019, Subaru, Volkswagen, Hyundai, and Kia all launched new models in the increasingly popular upper mid-size utility segment - with the Ascent, Atlas, Palisade, and Telluride. These roomier three-row models reduced the defection rate of the brands' overall return-to-market population and suggests that a model launch is an ideal time to target Nomads who might leave for a segment where their current brand isn't represented.

How much does a 'One and Done' household impact brands? It depends. Some brands have a higher-than-average share of Nomads returning to market. For those, the impact of those customers leaving is more significant, according to S&P Global Mobility data.

Is a high share of Nomads a bad thing? Not necessarily. First, newer brands like Tesla will obviously have a higher share of first-time owners than an established brand like Ford. Even established brands can have a higher share of Nomads when they've ventured freshly into popular segments and successfully brought in new customers. Volkswagen is a prime example, as the brand shifted its portfolio to contain more sport-utility vehicles.

Best and worst brands at acquiring Nomads
Based on brands' share of Nomad conquests vs share of Loyalist conquests

Each brand has a unique position when considering product portfolio, demographic profile, and geographic distribution of their consumers. While conquest, loyalty, and loyalty of conquests are all important, brands who have the highest concentration of Nomads and the highest risk of losing them should focus on the latter. And good news for those who are successful at conquesting: the high 'One and Done' rate industrywide means there is prime opportunity to conquest other brands' Nomads.

"Loyalists have an average 13-point advantage on a brand's loyalty rate than Nomads," said Erin Gomez, associate director of consulting for S&P Global Mobility. "Brands that fail to transform Nomads into Loyalists not only lose out on the immediate sale to the Nomad, but also the future loyalty benefit they could have provided as Loyalists."

While Tesla's high share of first-time owners (83%) isn't too surprising, their ability to keep those new customers is extraordinary. Tesla's 'One and Done' rate is just 39% compared to 58% for the industry (remember, a lower number is better in this case). The next-best 'One and Done' rate goes to Ford at 50%. However, Nomad share of Ford's return-to-market households in less than half of Tesla's.

Because Loyalists are more likely to stay with the brand than a Nomad (56% make loyalty for Loyalists vs. 43% make loyalty for Nomads), turning a Nomad into a Loyalist not only keeps the customer at that return-to-market event, but also makes them more likely to stay with the brand when they are ready to buy again. If a Nomad defects versus moving into the Loyalist bucket, the cost to the brand is the sale to the Nomad but also, on average, 13 incremental percentage points of loyalty compared to replacing them with another Nomad.

So, who are Nomads? Nomadic households tend to skew toward the wealthiest families of highly educated professionals. They tend to live in suburban neighborhoods and have high disposable incomes. Households that fit this profile could be high risk for One and Done if they chase the latest trendy product.

But a one-size-fits-all approach shouldn't be taken when identifying possible One and Done customers. Understanding and segmenting the consumer and their propensity to move into certain body styles, fuel types, and brands is also important. Consider a brand that does not offer a pickup truck. It would not make sense to attempt to retain a Nomad who owns a mid-size utility but who is coming back to market for a pickup.

While one can look strictly at the One and Done rate (defection rate of nomads), that's only part of the story. Also important is the brand's overall loyalty rate. S&P Global Mobility has created an index looking at a brand's loyalty among nomads vs. overall loyalty. For instance, Ford has a low 'One and Done' rate, but they also have a high overall brand loyalty rate. Meanwhile, RAM has a higher than average 'One and Done' rate, and also a low brand-loyalty rate, because the brand's portfolio is limited to trucks. That said, relative to its overall brand loyalty, RAM doesn't do a bad job turning its Nomads into Loyalists, and might look at focusing on manufacturer loyalty to ensure the Nomads leaving the brand for a different body style stay within the Stellantis family.

"Aside from the massive, long-term undertaking of creating products in new segments, there are other ways automakers can increase loyalty from their current Nomads," Gomez said. "By understanding the loyalty makeup of their customer base, and where their Nomads are going, brands can take a more targeted and efficient marketing approach to retain them."

Americans appear ready for the European car-ordering model

Post-COVID car buyers are willing to wait for the right car, and want more of the process to be handled online. But they still want test drives, according to a new survey.

A survey of US vehicle shoppers who bought cars in 2022 shows that a clear majority would be willing to wait for a vehicle that specifically met their tastes.

According to the Vehicle Buyer Journey survey recently conducted by S&P Global Mobility, 56% of consumers in the US would be willing to wait more than one month for delivery of an ordered vehicle, and 30% would be willing to wait more than three months. The percentages skew higher for those looking to buy a luxury-branded model.

The S&P Global Mobility survey also found consumers are desiring more of the purchase process to be handled online, compared to results from a similar survey taken in mid-2020 of consumers who had purchased vehicles during the pandemic lockdown.

"We have seen that COVID-19 has changed consumer behavior. The key is what the lasting changes will be," said Treffen White, director of consulting for S&P Global Mobility. "The dealer network of the past is not necessarily the network the industry will need for the future. Having the right digital tools will be more important than the size or appearance of the showroom. And this will impact how OEMs plan their physical locations for dealerships."

This runs counter to the long-standing dealership inventory model that contends that Americans want to walk into a showroom and buy a vehicle straight from the dealer's lot that day. It also represents a clear shift in consumer preferences that highlights the retail transformation happening on a digital level.

The S&P Global survey showed that 70% of US customers were willing to select a dealership further away from their homes because the retailer allowed for more online purchase/comparison options ­- female shoppers especially so. Up 8 percentage points from pre-COVID, 60% of customers now expect their next vehicle purchase to be completed entirely online.

"During their next vehicle purchase, two-thirds of people expect to complete some part of the process online, specifically paperwork," White said. "Unfortunately, consumer pessimism regarding the retailing process remains intact. Post-COVID, more people also expect their next vehicle purchase process to become more difficult."

The top areas of vehicle transactions customers wish to conduct online are negotiating vehicle price, F&I paperwork, arranging test drives, and negotiating trade ins, according to the research.

That transformation aside, 82% of car buyers still want to test drive a representative model of their planned vehicle purchase before putting down their deposits - nearly identical to the 84% who had the same preference prior to the pandemic. What has changed, however, is how many car shoppers want the test drive to occur with the vehicle delivered to their home or office, instead of at the dealership.

The number of home-delivery test drives has doubled between pre- and post-COVID, according to the survey. And while the desire for a test drive remains strong across all cohorts, younger customers are more likely to want one. Males were more likely to participate in in-dealership test drives, while females were more likely to participate in alternative test drive options such as home-delivery, virtual reality, or experience center test drives rather than in-dealership test drives.

"There is a direct correlation between loyalty and inventory. Now that inventories are returning, there is an opportunity for OEMs and dealers to gain share," White said. "Dealers embracing new digital processes will be on the leading edge of consumer sentiment for buying their next car, and this will drive loyalty accordingly."

The 1,450 respondents of this most recent survey were split between 1,000 new-car buyers and 450 used-car buyers in the US over the preceding 12 months. S&P Global Mobility also conducted simultaneous surveys of car buyers in China, the United Kingdom, Spain, Germany, Italy, and France.

Pickup owners moving to SUVs (like everyone else)

The light-duty full-size half-ton pickup segment is one of the most crucial in the US industry, for several reasons: the three segment leaders are the highest-volume models from Ford, Chevrolet, and Ram; the three pickups consistently also are the highest-volume models in the industry; there is intense sales competition among these three for bragging rights; and, it is commonly accepted that these models are highly profitable for their respective automakers.

Despite full-size pickups' important contributions to each brand's business case, the share of half-ton retail sales has been declining for more than two years. As shown below, the segment's retail shares in Q3 2022 and October 2022 were 7.8% and 7.5%, respectively - lower than in any other quarter dating back to Q3 2012. It is noteworthy that the heavy-duty full-size pickup share (three-quarter/one-ton models) has been relatively steady during this time period, suggesting volume has not shifted up to this higher-profit segment.

S&P Global Mobility data show these share declines can be attributed to increased migration of full-size pickup households to sport-utility vehicles. As shown below, the share of households owning each of the three leading half-ton pickups staying loyal to the pickup body style has declined in the past year, while the share moving to a utility has increased.

The change in re-purchase patterns for the Ram 1500 is the most pronounced: the percent of these owners remaining model loyal has dropped almost 9 percentage points to 42.5% in one year (Ram 1500 model loyalty peaked at 54.7% back in June 2019), while the mix migrating to a utility has climbed almost 6 points to 41.6%.
These findings align with the ongoing increased movement to SUVs from all other body styles, a predictable pattern given the plethora of utility choices available based on size, price, fuel type, sheet metal, and technologies. Through the first ten months of 2022, utility registrations accounted for 68% of retail luxury registrations and 61% of retail registrations industry-wide.


Top 10 Industry Trends Report

This automotive insight is part of our monthly Top 10 Industry Trends Report. The report findings are taken from new and used registration and loyalty data.

The December report is now available, incorporating November 2022 CFI and LAT data. To download the report, please click below.


Yet Another Tesla Advantage

Auto industry observers more than once have commented that the US luxury market really is two different markets, with Tesla in one and the nineteen other luxury marques in the other. Here's another finding supporting that observation: Tesla owners who return to market are much more likely to acquire another electric vehicle than owners of non-Tesla luxury EVs.

As the chart below illustrates, Tesla owners generally have been substantially more likely to acquire another EV than owners of competitive luxury EVs. In the 31-month time period from January 2020 through July 2022, an average of 65 out of 100 return-to-market Tesla households have acquired another EV. However, the corresponding metric for non-Tesla luxury EV owners is just 45%. If the abnormal results in March, April and May 2021 are removed, the gap between Tesla and non-Tesla households increases from 20 to 23 percentage points. (All cited data apply to households that disposed of their original vehicle when they acquired their new vehicle.)

In the first seven months of 2022, Audi and Porsche had the highest EV return-to-market volumes among non-Tesla luxury brands. But their fuel type loyalty results were also the lowest. While a little less than half of return-to-market Audi EV households acquired another EV, only a third of Porsche households did so. The luxury brands with higher fuel type loyalty had substantially lower return to market volumes, with none reaching 200 households.

These findings point to at least two conclusions. First, Tesla households' experiences with an EV in general are more positive than the experiences of households owning a competitor EV. Second, Tesla possesses yet another advantage over its EV competitors, at least in the short term: A significantly higher mix of Tesla's owners will at least stay with an EV (and possibly another Tesla), in contrast to the competitor owners - more than half of whom defect from the fuel type, and therefore (automatically) the model, if not the brand altogether.


Top 10 Industry Trends Report

This automotive insight is part of our monthly Top 10 Industry Trends Report. The report findings are taken from new and used registration and loyalty data.

The December report is now available, incorporating November 2022 CFI and LAT data. To download the report, please click below.


Fuel for Thought: Automotive supply chain and technology themes for 2023
LISTEN TO THIS PODCASTThe end of cheap capital - combined with worsening macroeconomic conditions, the war in Ukraine, raw material uncertainties, and the continuing chip shortage - will combine to mark 2023 as the beginning of an era when demand-side considerations replace the current supply-side fixation.

Already, we are seeing these conditions impact the burgeoning mobility startup ecosystem. But in a larger framework, the industry will continue its pivot away from internal combustion engines toward electrified vehicles in all formats - as well as the exploration of connectivity and monetizing the reams of data produced as the industry seeks more profit pools.

CES 2023 indirectly underscored many of these conditions and uncertainties. A shirking of nebulous concepts in favor of production-ready products was predominant. Though visions of unmanned pods and shuttles made appearances, many brands focused on very near-term product developments.

For instance, Harman presented a handful of production-ready products in the in-cockpit experience space, many of which already have OEM installation wins. Bose brought the next generation of 3D audio and EV sound enhancement on display through production vehicles. Blackberry displayed Ivy - this time with automotive-grade hardware ready to launch with Dongfeng Motors. These examples paint a picture of companies aiming to make money today, rather than focusing marketing dollars on abstract visions of the future.

Suppliers facing mounting pressures

A confluence of factors are challenging suppliers, and many involve externalities beyond the control of all but the most resilient.

"The macro environment is not conducive to success for those suppliers who don't have a good handle on costs, or a degree of operational flexibility to manage the headwinds," said Matteo Fini, Vice President, Automotive Supply Chain, Technology and Aftermarket, S&P Global Mobility.

This is especially true in Europe, where high energy costs, combined with stagnant volumes and rising financing costs, will create major pressures for suppliers. The risk factors appear heightened in Germany, where smaller Tier 1 suppliers - those with revenues between EUR100 and EUR500 million - and Tier 2 suppliers seem the most exposed.

In recent months, German suppliers Ruester (vibration/damping products) and Dr. Schneider (ventilation and interior trim parts) have filed for insolvency; Ruester faced liquidity problems following two acquisitions and rising input costs. This may become a theme in 2023.

With soaring energy prices, energy-intensive parts of the supply chain, such as metal foundries, that were already overstretched from investments contingent upon a return of pre-crisis volumes will have to reconsider their priorities for survival.

Semiconductor shortages far from over

Although demand-side softness will bring some relief in 2023, the structural capacity deficit in semiconductors will take several years to solve.

A slowdown in other chip-hungry industries like telecoms and consumer electronics meant some semiconductor capacity in the sector was allocated to automotive in H2 2022. This will continue early into 2023.

While there was plenty of investment in added capacity in 2021 and 2022, it takes time to bear fruit. The lead time for equipment increased from one to two quarters to between two and two-and-a-half years. The investment and CAPEX boom in 2022 will not result in significant additional capacity before 2024 or 2025.

"Aggregate demand conditions are deteriorating globally due to the war in Ukraine, inflationary pressures, and generally macroeconomics. These conditions may mask the capacity issues in 2023, but no one should be fooled," said Jeremie Bouchaud, Director, Semiconductor, E/E and Autonomy practices, S&P Global Mobility. "The average chip content per car is increasing at an accelerated rate because of electrification. The capacity deficit will become visible again as soon as demand from other industries picks up."

Analog chips will remain the bottleneck, as the number of analog chips per car increases faster than the number of MCUs. Additionally, analog chips don't shrink as well as SoCs or microcontrollers. This means production remains on mature process nodes where there is not enough capacity and not enough investment.

To mitigate semiconductor risk, we expect that OEMs will rethink the way electronics are designed in their vehicles. Expect increasing standardization of chips and reduced fragmentation. We expect OEMs to insist their Tier 1 suppliers use fewer custom chips or chips designed for single applications - also known as ASICs and ASSPs - and use more general-purpose chips.

ADAS, Autonomy and Robotaxis

Though some may see the dissolution of Ford and VW's joint investment in Argo AI as a warning sign, the idea of autonomous taxis will continue forward - especially among Chinese OEMs.

"At the moment, tech companies like Waymo, Cruise, and Baidu are seen as winning the race. But first-mover status won't confer much sustainable competitive advantage," said Owen Chen, senior principal analyst for Autonomy in China with S&P Global Mobility. "The first part is only the technological demonstration. To deliver a robotaxi future, the much more difficult piece to execute is the commercialization."

At issue: Neither investors nor the capital markets will foot the bill for initially meager ROI. Entering the commercialization phase, challenges will emerge from robotaxi tech peers like Pony and WeRide, but also from the OEMs. Tesla and XPENG are targeting the delivery of robotaxis in 2023, but mobility providers like Waymo and Cruise (part of General Motors) will still lead the way in these early years.

The automakers' advantage? They already are operating a large ADAS fleet complete with Level 2+ applications. As such, they are training the software with data that comes free of charge from the millions of vehicles already on the market. By contrast, robotaxi tech companies are burning cash to collect data from a far smaller pool of vehicles on the roads.

Trained software, built on real-life data, is a more scalable path forward, and will be augmented by simulation to cover edge cases. However, it has not yet been proven that ADAS on-road content can be successfully pivoted to L4 on-road deployment.

Considering commercialization and productization issues, cost discipline and awareness is a bread-and-butter competency of the OEMs. If Tesla and XPENG can demonstrate this approach in 2023, we're going to see more legacy OEMs jostle for position in the robotaxi marathon. Tech companies like Waymo and Baidu must have enormous cash reserves to sustain a position in the race before profits take off.

Luring automotive software talent

Consumers are adapting to the concept of tech-focused transportation. The pressure to deliver new groundbreaking technologies will be enormous for OEMs. But with software spend set to grow at a CAGR of 7.7%, the requisite skill sets needed by OEMs won't come cheap.

Furthermore, is the automotive sector an attractive enough market to attract top talent in the highly competitive software engineering sector, when facing off against tech companies and their own supplier base? Already we've seen VW's CARIAD - an attempt to create a company with big tech behaviors - struggle to deliver.

"The automotive sector has a couple of obstacles in its path if it wants to develop its own software ecosystems," said Dr. Tawhid Khan, Director, Software practice, S&P Global Mobility. "The industry is bound by process and legislation, and this doesn't make the sector particularly attractive to young software graduates. Finding a way to attract the necessary talent to the industry will be key."

The ROI of connected services

The tumultuous economic and supply chain situations of the previous few years have put a focus on margin performance by automakers, which have soared to record highs. But OEMs hoping to continue those impressive results will struggle as demand for new vehicles faces headwinds.

The new area for margin growth: add-on features and services.

These connected services and paid updates can achieve a margin of greater than 70%, which makes this space incredibly attractive for an industry seeking cover from the cyclical nature of selling vehicles. This new revenue stream has attracted the attention of Wall Street, although projected long-range revenue targets may be ambitious.

The pre-COVID years involved automakers standardizing connectivity hardware in regions that don't traditionally support higher option pricing, as well as the release of new generations of telematics control unit (TCU) hardware that will keep a connection active much longer.

The last three years have seen releases of innovative service-oriented business models beyond those offered by Tesla, with leading automakers leveraging the flexibility of these services to adjust packaging, pricing, and availability of features.

2023 is expected to be the launching pad for similar features, with much broader use cases, from mainstream follower automakers. This development will be critical to moving the concept of built-in upgradable content from headlines to reality.

Raw materials supply and BEVs

The auto industry's need to increase annual raw materials acquisition from its current level of 0.29 Terawatt hours (TWh) of lithium-ion batteries to about 3.4 TWh by 2030 will place incredible stress on the sector supply chain.

In addition, the US Congress' passage of the Inflation Reduction Act (IRA) in 2022 could reshape sourcing of and add complexity to obtaining battery raw materials, while near-term inflation could precipitate strategy changes.

The raw materials deficit, how the industry addresses that, and the additional implications for sourcing decisions on the carbon footprint are vital considerations. But sourcing these raw materials can't be secured in a laissez faire manner, as ESG considerations are gathering momentum.

"The IRA has sparked many OEMs and suppliers into tearing up their battery playbooks for the US market to secure access to manufacturing subsidies and purchase subsides for their consumers," said Graham Evans, Director, Battery, Charging, Propulsion, and Thermal practices, S&P Global Mobility.

Soaring inflation is putting pressure on consumers, which could result in an OEM pivot to address the changed macroenvironment.

For example, does this mean a switch to lower-tech battery solutions (and implicitly lower cost structures) such as Lithium-Iron-Phosphate cathode chemistries to secure higher margins? Or could it mean increasing demand for batteries with a lower capacity and thus compromising vehicle range?

Wireless charging and battery swapping

Presently, only Mainland China has seen any demand for battery swapping in the electric vehicle space - and that is largely due to government incentives and geospatial issues in cities that have driven its success.

Nio, a key player in China, is launching in Europe and has a handful of stations in Norway - so that market will be an interesting petri dish for swapping in Europe. In the US, California start-up Ample is attempting to drum up interest in the fleet sector it's targeting.

While BMW and Hyundai (with WiTricity's Halo), and Volvo (with InductEV), have already dabbled with wireless charging, widespread adoption of the technology has the potential to challenge the current stand-off between battery size and range. The technology also suits fleet applications well, such as taxis.

"Consumers could charge more conveniently at home, and adopt 'splash and dash' behaviors if dynamic wireless charging becomes widespread," said Graham Evans, Director, Battery, Charging, Propulsion, and Thermal practices, S&P Global Mobility. "But mainstream consumers may not be prepared to pay a premium for such convenience technology when the industry has already converged on the charging plug."

Large-scale swapping has many other barriers in its way: In addition to the propensity for home charging, there is the lack of governmental directive, and the need to homogenize battery packs which would see OEMs and T1s surrender some of their intellectual property.

Consumer- and restricted-access charging could get a boost from DC wallbox chargers in the domestic charging sphere. These offer a middle option between slow AC chargers and the superfast public DC chargers. Their wider deployment has potential to shift the balance in the domestic vs. public charging conundrum. Furthermore, there are models available that facilitate V2G (vehicle to grid) operation, which could prove more appealing in these energy conscious and cost-sensitive times.

Euro 7 driving powertrain planning

The proposed Euro 7 emissions regulations carry huge capital-spend implications for technology fitment on future internal-combustion vehicles.

The watering down of Euro 7's initial framework will cause many OEMs to reconsider the rapidity of their electrification rollouts. Do the less stringent Euro 7 regulations now make it worth OEMs investing in one more cycle of ICE updates? Or does it make more sense for an OEM to focus on electrification, and splinter their ICE and EV businesses as Renault and Ford have done? And how does this affect a supplier base ramping up to support E-motor applications?

"The tightening of electrical steel capacity could also impact the electrification rollout," said Graham Evans, Director, Battery, Charging, Propulsion, and Thermal practices, S&P Global Mobility. "A shortage of e-steel could mean that a planned product mix could change in the short- to medium-term in favor of ICE and hybrid applications, where there's much less demand for steel, in particular high specification (extremely thin) electrical steel."

Meanwhile, the desire to squeeze more range and efficiency from existing BEV parameters should prompt more in the industry to switch to silicon carbide (SiC) inverter technology.

SiC inverters are more efficient, can also run at higher temperatures and power output for a longer time. The tradeoff is cost. Major power electronics suppliers such as Marelli, BorgWarner, and Delphi Technologies have been increasingly active in this area recently, developing their products and securing orders - which suggests that we'll see increasing SiC inverter adoption in the short-term.


Dive Deeper

Autology Podcast: CES 2023 Day 1 Recap - Listen Here

Autology Podcast: CES 2023 Day 2 Recap - Listen Here

Autology Podcast: CES 2023 Event Wrap Up - Listen Here

AutoTechInsight Webinar: CES 2023 - Watch Now

EV start-ups’ share of global BEV market will halve by 2034

Non-traditional automakers, including Tesla, will produce 7.3 million BEVs annually by 2034 according to our forecasts. But their share of BEVs produced is already receding as legacy automakers scale up and gain share. There is no rebound expected.

In 2021, the start-ups produced 1.4 million BEVs, and their share of global BEV production peaked at 28.8%. Last year their share fell to 26%. By 2034, we believe this figure will have more than halved to 12.5%.

This is not for lack of market opportunity - BEVs in total is forecast to account for more than 50% of global light vehicle production by the mid-2030s. But even with Tesla's continued to surge into adding production, new entrants will be unable to scale at a rate that exceeds legacy OEMs' ability to convert existing capacity.

New EV player production volume will remain concentrated among a handful of the same first-movers

In 2021, five out of 45 manufacturers accounted for nearly all (89.5%) of the BEV production attributed to new EV players. Tesla accounted for 65%, with the remaining production relatively evenly distributed between start-ups from China: Xpeng EV, NIO, Lixiang Auto, and Hozon EV.

By 2034, we believe these same players will still account for 80% of disruptor entrants; Tesla will continue to dominate with 53%, and NIO will grow to become the second top producer with 11%.

These 5 players are capitalizing on their first-mover advantage. But more recent disruptor entrants will not have such opportunities, as traditional OEMs ramp up their EV offerings and leverage their established branding, dealer networks, and supply chains.

Lack of funding or appropriate investment vehicle will also suppress the number of operational new EV players

<span/>Surviving the jump from pre-production to production is rare; 70% of 130 EV start-ups researched became defunct before their announced SOP. Still, investment requirements exceed USD500 million for brands with lesser-volume aspirations, while those wanting to challenge full-line OEMs will require more than USD2 billion to reach production at scale. As such, many new EV firms aspiring to reach mass production have also ceased operations in the last couple of years.

Nearly USD10 billion was raised between 2020 and 2022 across 12 (mostly pre-production) EV start-ups that went public via SPAC merger. Since then, deteriorating market conditions have made access to funding for new entrants more difficult. As such, time limits on production readiness and financial self-sufficiency are tightening - and only the strong may survive.

Co-authored by Georgie Lamb, Associate, Automotive Strategy and Industry Insights

Brand loyalty finally improves month-over-month; but will it continue?

Brand loyalty in the US light vehicle market rose from 49.2% in September 2022 to 50.3% in October, the first significant increase since January (putting aside the slight improvement from July to August). October also is the first month since April in which this metric has surpassed 50%.

Looked at from a broader perspective, brand loyalty has been declining since March 2020 when it stood at 56.3%, immediately before the start of the pandemic and the start of the supply chain challenges.

Days' supply began to increase earlier than brand loyalty, rising to 26 days in June after languishing at 25 days or less since May 2021. Although this metric backtracked slightly to 24 days in July, since then it has been improving, rising to 27, 30, and 32 days in August, September, and October, respectively.

Given the strong direct correlation between brand loyalty and days' supply (.83 from January 2020 through October 2022, .88 if Covid-impacted April 2020 days' supply of 120 is removed), along with the rise in days' supply that began last summer, it is not surprising that brand loyalty has inched up.

Historical model, brand, and manufacturer loyalty rates are also strongly correlated with one another; model and brand loyalties have a .99 correlation, while model and corporate loyalties have a .98 correlation. Given these relationships, it is understandable that model, brand, and corporate loyalties all rose in October (month over month) after declining in general since the beginning of 2022 (see below).

Lastly, the September-to-October brand loyalty increase is in keeping with the recent year-over-year changes in this metric. As shown below, the declines in brand loyalty had been declining from their peaks this past February and September 2021. The year-over-year declines in brand, manufacturer, and model loyalties in each of the three months from July through September 2022 all were under 1.0 percentage point; these results contrast with drops prior to this time period, back to the start of 2021, when the year-over-year declines were above 1.0 (two months with exceptions are February and June 2021 when the declines in model loyalty were .89 and .46 percentage points, respectively).

Will brand loyalty continue improving? On one hand, an ongoing increase would make sense given the recent five-month increase in days' supply. On the other hand, the just-released December inventory level of 33 days* represents a decline versus November's 34 days, suggesting that if the two metrics remain strongly correlated, brand loyalty will remain mired in the 49-51% range where it has been for the better part of two years.

*Source: Autodata


Top 10 Industry Trends Report

This automotive insight is part of our monthly Top 10 Industry Trends Report. The report findings are taken from new and used registration and loyalty data.

The December report is now available, incorporating November 2022 CFI and LAT data. To download the report, please click below.


EV Chargers: How many do we need?

Supporters of vehicle electrification point to the more than 140,000 EV charging stations currently deployed across the United States - including Level 2 AC and Level 3 DC fast chargers and both public and restricted access units - as a sign that a budding system to support our transportation transformation is in place.

However, S&P Global Mobility data shows that the charging infrastructure is not nearly robust enough to fully support a maturing electric vehicle market.

Even when home-charging is taken into account, to properly match forecasted sales demand, the United States will need to see the number of EV chargers quadruple between 2022 and 2025, and grow more than eight-fold by 2030, according to S&P Global Mobility forecasts.

"The transition to a vehicle market dominated with electric vehicles (EVs) will take years to fully develop, but it has begun," said S&P Global Mobility analyst Ian McIlravey. "With the transition comes a need to evolve the public vehicle charging network, and today's charging infrastructure is insufficient to support a drastic increase in the number of EVs in operation."

S&P Global Mobility estimates there are about 126,500 Level 2 and 20,431 Level 3 charging stations in the United States today, plus another 16,822 Tesla Superchargers and Tesla destination chargers. The number of chargers has grown more in 2022 than in the preceding three years combined, with about 54,000 Level 2 and 10,000 Level 3 chargers added during 2022.

    Charging Definitions

AC Level 1: What most people will have in their homes, and equivalent to a 110v wall outlet. Would require 20 hours to fully recharge an EV.AC Level 2: Equivalent to an upgraded home charger that uses a 208-240 volt circuit (used for an electric clothes dryer) and usually requires a 50-amp breaker for each charger. Takes about five hours to fully recharge an EV. Often also seen in shopping centers.DC Level 3 Fast Charging: Requires a much larger grid connection to convert the AC current to DC. An EV's battery management system must be able to handle the rapid flow of electricity - currently as high as 350 kW. Takes 15-20 minutes to recharge most DCFC-ready vehicles from 10% to 80% state of charge.Tesla Supercharging: Can add about 200 miles of range to a Tesla vehicle in 15 minutes. Tesla has offered converters to other brand vehicles for use in its Superchargers in Europe, with plans for US adaptation in the works.

   Source: EVgo

S&P Global Mobility registration data shows that there are 1.9 million electric vehicles (EVs) in operation today, or 0.7% of the 281 million vehicles in operation, as of October 31, 2022. New light-vehicle registration share for EVs reached 5.2% over the first ten months of 2022. With the escalating number of EV nameplates forecast to launch within the decade, the market is poised for rapid growth. EV market share for new vehicles is likely to reach 40% by 2030, according to S&P Global Mobility forecasts, at which point the total number of EVs in operation could reach 28.3 million units. Hence the need for rapid development of a charging infrastructure.

While 2030 may seem years off and a problem for tomorrow, development of common standards and deployment of charging stations will take time. But even looking at 2025 - just three years away - there could be as many as 7.8 million electric vehicles in operation (VIO) in the United States, McIlravey said.

To support that vehicle population, we expect there will need to be about 700,000 Level 2 and 70,000 Level 3 chargers deployed, including both public and restricted-use facilities. By 2027, we expect there will be a need for about 1.2 million Level 2 chargers and 109,000 Level 3 chargers deployed nationally. Looking further to 2030, with the assumption of 28.3 million units EVs on US roads, an estimated total of 2.13 million Level 2 and 172,000 Level 3 public chargers will be required - all in addition to the units that consumers put in their own garages.

These national figures are illustrative of the direction needed, but we also expect demand across the United States to develop in a lopsided manner, especially in states where EV adoption is already comparatively strong. Currently, 35 states have signed on for federal assistance under the Bipartisan Infrastructure Law, of which $7.5 billion is earmarked for EV charging infrastructure. President Biden has pledged that the government will fund the installation of 500,000 charging stations - but that is just a starting point.

Noted McIlravey: "In states following the California Air Resources Board's path to zero-emissions vehicle (ZEV) sales, the faster growth of consumer demand will push private investment and more rapid charging infrastructure deployment. However, in states where EV adoption happens gradually, charging station deployment will not need to happen as rapidly and may also need a bit of a push."

In slower-to-adopt states, development of EV charging infrastructure may be more dependent on the spark of public-private investment to lead development of an EV charging infrastructure slightly ahead of full need.

The four U.S. states with the highest number of vehicles in operation and highest new-vehicle registrations traditionally are California, Florida, Texas and New York. California, which embraced EVs early, is the state pushing for the most significant emissions restrictions. As such, it is the largest EV market, with about 36.9% of total EVs in operation and 35.8% of total US light-vehicle EV registrations from January through September 2022.

Florida is in second place, but with only 7.4% of light-vehicle EV registrations and 6.9% of EV VIO. Texas is not significantly further behind Florida, with 5.8% of VIO and 6.4% of EV state-level light-vehicle registrations.

However, neither Florida nor Texas have participated significantly in the emissions discussion nor followed California's lead like the "CARB states" mostly in the northeastern and northwestern United States. As a result, the size of these markets - rather than adoption rates - is the main reason Florida and Texas rank highly in EV share of new vehicle registrations and VIO.

These are also states which have weather largely favorable to EV operation. As EV adoption grows in the United States, the power of ZEV states remains important to EV growth, but there is little doubt we will see the necessary investment in these markets given the top-down (government) and bottom-up (consumers and charging network operators) support for development in order for the United States to achieve its target for EV adoption. But consumers in the large markets outside the ZEV states will need to be supported with sufficient public charging infrastructure.

Texas currently has about 5,600 Level 2 non-Tesla and 900 Level 3 chargers, but by 2027 S&P Global Mobility forecasts that the state will need about 87,500 Level 2 and 7,800 level 3 chargers to support an expected the expected 1.1 million EV VIO at that time.

Meanwhile, Florida currently has about 5,600 Level 2 non-Tesla chargers and 955 Level 3 chargers, but is expected to have 1.06 million EV VIO potential in 2027. To support these vehicles, S&P Global Mobility forecasts that Florida will need to grow its charging infrastructure to about 77,000 Level 2 and 6,800 Level 3 charging stations.

There also remains lower investment into charging systems outside of major metro markets. Though EV adoption in those areas will continue to be slower, creating a robust infrastructure is important there as well. Currently, 85% of Level 3 chargers are in US Metropolitan Statistical Areas (MSAs as defined by the US Census Bureau, and including 384 metro areas); 89% of Level 2 chargers are in these areas. For Tesla owners, 82% of its Superchargers and 83% of its destination chargers are in MSAs.

"The focus on urban areas follows where EVs are today, but distribution will need to be much wider as vehicles in operation grow, and consumers need to charge along their routes," McIlravey said.

Some industry pundits look to the gasoline service station as a comparable model to electric vehicle recharging. But as at-home recharging is in most cases the easiest solution to integrate an EV into daily life, a robust charging infrastructure will look much different from the network of gas stations that has evolved to support the internal combustion engine.

The technology behind EV chargers, battery management systems, and battery technologies are leading to faster charge times for DC or Level 3 scenarios, which in turn can impact the locations of charging stations.

There also are evolving solutions capable of changing the model. Battery swapping, wireless charging, and increased deployment of DC wallbox solutions at home are three solutions which still can change the landscape. In China, the practice of battery swapping is growing and has had some success, though it has seen virtually no application in Europe beyond the first NIO stations in Norway, and not yet really tested (nor expected) in the US market.

"There's the propensity for home charging, the lack of governmental directive, and the need to homogenize battery packs - which would see OEMs and Tier 1 suppliers surrender some of their intellectual property - holding back a technology like battery swapping," said Graham Evans, S&P Global Mobility research and analysis director.

Of wireless charging, Evans says that widespread adoption of the technology has the potential to challenge the current stand-off between battery size and range. Evans says consumers will be able to charge more conveniently at home and adopt 'splash and dash' behaviors if dynamic wireless charging becomes widespread. However, the cost of wireless charging may be an issue, and mainstream consumers may not be interested in paying a premium for wireless charging, Evans cautioned. Plug-in technology was first to market as well as being less expensive, which leaves deployment of wireless charging to play catch up regardless of whether it might be superior in terms of convenience.

The third technology with potential to shake up our existing assumptions are at-home DC wallbox solutions. According to Evans, they offer a halfway solution between slow AC chargers and the superfast public DC chargers. Wider deployment of these solutions has potential to shift the balance in the domestic versus public charging conundrum. Furthermore, there are models available that facilitate V2G (vehicle to grid) operation, which has potential to change the conversation by allowing EVs to effectively become part of our electric grid system and leading to some financial return for participating consumers.

As the US vehicle market transitions from internal combustion to battery electric, the refueling mechanism is transitioning with it.

"For mass-market acceptance of BEVs to take hold, the recharging infrastructure must do more than keep pace with EV sales," Evans said. "It must surprise and delight vehicle owners who will be new to electrification, so that the process seems seamless and perhaps even more convenient than their experience with gasoline refueling, with minimal compromise on the vehicle ownership experience. Developments in battery technology, and how quickly EVs can receive power, will be as critical to improvements here as how quickly and plentifully infrastructure can provide the power."

Greater China Sales and Production Commentary- December 2022

Greater China sales

November 2022: -11.5%; 2.11 million units vs. 2.38 million units

YTD 2022: +2.7%; 22.32 million units vs. 21.74 million units

In November 2022, 2.11 million light vehicles were sold in Greater China, marking an 11.5% decrease compared with the same month of 2021. Specifically, light vehicle sales in mainland China decreased 11.8% from 2.34 million units in November 2021 to 2.06 million units. Passenger vehicles recorded sales of 1.83 million units, a 9.0% decrease year on year (y/y), and light commercial vehicle (LCV) sales contracted 28.9% y/y to 0.23 million units.On a year-to-date (YTD) basis, light vehicle sales in mainland China increased 2.8% from 21.31 million units to 21.91 million units. Precisely, passenger vehicle sales increased 7.6% y/y to 19.32 million units, while LCV sales decreased 22.9% y/y to 2.6 million units. Segment-wise, YTD sedan sales increased 11.1% y/y from 8.84 million units to 9.83 million units, and the sport utility vehicle (SUV) segment increased 4.7% y/y from 8.43 million units to 8.82 million units. YTD sales of multipurpose vehicles (MPVs) decreased 1.5% y/y to 0.68 million units.Chinese auto sales in November were severely hindered by COVID-19 restrictions in China. The prolonged pandemic has slowed the country's economic growth, with its GDP forecast to grow 2.8% in full-year 2022, much lower than the target set at the beginning of the year of 5.5%. Starting from the beginning of December, a raft of cities has begun to ease COVID-19 pandemic-related restrictions, after the central government urged local authorities to optimize pandemic-containment measures, including lifting lockdowns, reducing the frequency of mass testing, and allowing home quarantine for close contacts. The relaxing of containment policies has set the stage for a broader economic recovery from COVID-19 disruptions, although it will take time for consumer confidence to climb.In November, sales of internal combustion engine (ICE) vehicles in the broader passenger vehicle market contracted by 30% y/y, with consumers turning to new-energy vehicles (NEVs). The strong growth in NEV demand is helped by government incentives, including subsidies and purchase tax exemption. Passenger vehicle sales in December may be helped by incentives provided by automakers in an attempt to clear inventories and boost year-end sales. The end of central government electric vehicle (EV) subsidies by the end of 2022 will also help to convince customers to make their purchases within the year. In the fourth quarter, vehicle sales will be constrained by the resurgence of COVID-19 infections in the country. Automakers are trying to counter downward pressures in the domestic market with a renewed push for exports. In the year to date, NEV exports doubled y/y to nearly 600,000 units, and new-vehicle exports increased 55% y/y to 2.785 million units. In addition, the NEV purchase tax exemption will be extended into 2023, while cities such as Shanghai will likely withdraw some of their preferential policies on plug-in hybrid electric vehicles (PHEVs) from 2023 to shift their focus to battery-electric vehicles (BEVs). We expect NEV penetration to edge close to 26% in 2022, supported by strong products.With strong year-end stimulations and marked easing of COVID-19 related restrictions, light vehicles sales should grow by 3.6% to 24.76 million units in 2022, of which passenger vehicles are estimated to increase 7.7% y/y to 21.75 million units, while LCVs are forecast to decline 18.8% to 3.01 million units.

Greater China production

November 2022: -15.3%; 2.16 million units vs. 2.55 million units

YTD 2022: +8.6%; 23.85 million units vs. 21.97 million units

Greater China's light vehicle production in November recorded 2.16 million units for a decline of 15.3% year on year (y/y). In mainland China, light vehicle production decreased 15.5% y/y to 2.13 million units. The spread of COVID-19 in major industry cities led to light vehicle production losing momentum in mainland China in November after October's golden purchasing season. Changan was hit in the first wave as all manufacturing facilities in Chongqing were shut down for 10 days in November. FAW-VW's plant in Chengdu was also shut down temporarily at the end of November owing to local COVID-19 cases. Even production lines in Changchun plants were closed owing to supply shortages. These supply chain interruptions led to Honda's plants in Wuhan shutting down for one week and will even affect global output from Japan.The light vehicle production forecast for Greater China for full-year 2022 is set at 26.33 million units, marking a 6% y/y increase. In mainland China, light vehicle production will be 26.08 million units for a 6.1% y/y increase. Heavily damaged by the November lockdown and potential supply interruption in December, we lowered the 2022 mainland China light vehicle production by 350,000 units compared with the November forecast, leading to 6.1% y/y growth in the December forecast (1.5% lower than the November forecast).The latest vehicle inventory alert (VIA) index, issued by the China Automobile Dealers Association (CADA), stood at 65.3%—with an increase of 6.3% month on month (m/m) and 9.9% higher than in the same period of 2021—above the threshold. In November, the epidemic continued to expand, and the auto market sales performance fell short of expectations. Auto shows and marketing activities around the country could not be carried out smoothly owing to restrictions to help control the pandemic, and the auto market was relatively quiet. The release of pent-up consumer demand for cars was hindered by the closures of many dealers.In November, production of passenger vehicles in Greater China decreased 10.9% y/y to 1.94 million units. Market segment-wise, car production stood at 0.9 million units with a 13.2% y/y decrease. Production of multipurpose vehicles (MPVs) increased 12.2% y/y to 70,219 units. Production of sport utility vehicles (SUVs) decreased 9.9% y/y to 0.97 million units. Plant closures due to COVID-19 cases led to Changan suffering a 45% production loss of 400,000 units in November. FAW-VW could build only 110,000 units, falling 30% in November. On the contrary, motivated by an expiring subsidy, the new-energy vehicle (NEV) market maintained momentum in November. Tesla achieved sales of over 100,000 units, contributed by domestic demand for the Model Y and exportation of the Model 3. Thanks to a reliable in-house supply chain, BYD continued to dominate the passenger car market with industry output of over 2 million units—127% y/y growth in November. The Dynasty series contributed a major share as the Han and Song plus surged up by 145% and 125% y/y, respectively.In November, light commercial vehicle production in Greater China posted 0.22 million units, falling 41.6% y/y. Market segment-wise, production of chassis-cabs stood at 0.11 million units, down 47.5% y/y. Production of vans stood at 78,565 units with a 32.2% y/y decrease. Pickups decreased 38.9% y/y to 28,203 units. Full-year production should reach 2.96 million units for a 23.9% y/y decrease.
December auto sales wrap up year on a familiar note

Deteriorating economic circumstances set stage for an uncertain 2023 landscape

With volume for the month projected at 1.19 million units, December U.S. auto sales are estimated to translate to an estimated sales pace of below 13.0 million units (seasonally adjusted annual rate: SAAR). The SAAR reading would be the weakest monthly result since May 2022, and the underlying daily selling rate metric would be a slight step back from the trend of the preceding three months.

The daily selling rate metric in December is expected to decelerate mildly from the remarkably steady 44.9K per day average since August. While stubbornly sticky low levels of inventory dampened year-end clearance incentives, the backward movement in the daily selling metric could be a signal of a retrenching auto consumer. The December result will bring the full-year U.S. light vehicle sales total to 13.8 million units, an 8% decline from the CY2021 total.

"Looking back at a tumultuous year for auto demand, the December sales result reflects apparent steadiness in the market," said Chris Hopson, principal analyst at S&P Global Mobility. "Steadiness should not be misconstrued as exuberance though. Auto consumers are plagued by an uncertain economic environment, high vehicle prices, higher interest rates, and low inventory levels."

None of these issues will be resolved quickly as the market moves through 2023. The S&P Global Mobility auto outlook for next year carries a countercyclical narrative: Expected production levels will continue to increase, even as economic conditions are expected to deteriorate through the early stages of next year.

"The advancing production levels, along with reports of sustained retail order books, recovering stock of vehicles, and a fleet sector that remains starved for product, should provide some impetus to auto demand levels even as an economic recession looms," Hopson said. "We project calendar-year 2023 sales volume of 14.8 million units in the U.S., a 7% increase from the estimated 2022 tally. But even as the industry hopes to leave 2022 in the review mirror, uncertainty awaits entering the New Year." (For S&P Global Mobility's full 2023 Global outlook,click here).

Next year will see the sustained advance of battery-electric vehicles. BEV share of new light vehicle sales in the U.S. is expected to reach 6.2% in December 2022, which would translate to a full-year share of 5.4% - a YOY volume growth estimate of approximately 260,000 units. Further electrificaton progress in 2023 will be fueled by product rollouts including the Lexus RZ, Fisker Ocean, a wave of BEV product from GM including the Chevrolet Equinox EV and Chevrolet Blazer EV, and advancing Tesla production levels. Incentives as directed by the IRA should also promote sales.

S&P Global Mobility expands supplier solutions with investment in IT Manufactory

S&P Global Mobility (formerly IHS Markit | Automotive) has made a strategic investment in IT Manufactory, a startup located in Passau Germany that provides business planning and sales management software to automotive suppliers. Its core product is the Digital Automotive software platform, which utilizes the S&P Global Mobility forecast datasets to provide a common market structure and forecast intelligence for business planning, sales steering, and performance management purposes.

Our vision for this partnership will provide opportunities to expand and scale this offering. The benefits of Digital Automotive with benchmark processes and reports are many, including:

Synchronized use of our forecasts in sales planning, acquisition, change and claim management processes;Digital strategy and acquisition management leads to increased hit rates, expanded process transparency, and makes better use of resources;Digital project information including price and cost management over the entire lifecycle are available in real-time with one-click access;Digital change and claim management ensure profitable business; andAll CRM and CPQ functionalities are tailored to the needs of automotive suppliers

We are excited about the possibilities our expanded partnership with IT Manufactory will provide to the industry.

Please contact your account representative from S&P Global Mobility or IT Manufactory if you have questions. Alternatively, feel free to visit this link for additional details about the solution and how it may assist in your planning needs.

The inevitable transformation of the bus industry in South America

Issues such as low speed, low efficiency and congestions are common across cities in South America. With more than 12 million people, Sao Paulo is the region's largest city and has become a role model for mobility initiatives. In 2021, more than 4.5 million passengers were transported per day, according to SPTrans - Sao Paulo's transport department. Sao Paulo operates a bus fleet of 13,800 vehicles. Gradually, Sao Paulo has become a hub for pilot projects in the mobility sector. For example, Sao Paulo was one the first cities to restrict cars and trucks in the city center. Sao Paulo has adopted bus corridors and improved the average speed of buses. The use of articulated and bi-articulated buses on some routes also improved the efficiency of public transport.

Looking ahead, new initiatives are likely to focus on climate and environment. Sao Paulo's climate committee created in 2009 suggested rules for cleaner public transportation. In 2021, a new schedule was adopted: the carbon emission will be cut by half in 2027 (based on total emission in 2016), and by 100% in 2037. Particulate matter has to be cut by 90% in 2027, and by 95% in 2037. The new rules mean that bus fleet operators will have to spend more on cleaner buses and the necessary infrastructure. Sao Paulo is one of the cities in South America that takes part in the Zero Emission Bus Rapid-deployment Accelerator (ZEBRA) program that promotes a transition to new technologies and will that change the automotive industry.

According to S&P Global Mobility Medium and Heavy Commercial Vehicle (MHCV) Industry Production forecast, Brazil was the fourth largest bus and chassis producer in the world in 2021, and nearly 90% of buses produced in Brazil have urban applications. Brazil will keep its rank in 2022. In the future, Brazil's bus production needs to transition to electric powertrains to keep its position and to continue to increase its output. Brazil is the major bus producing country in the region and serves with its chassis bus bodybuilders across South America. Brazilian OEMs have served the region for decades and offers now CNG/LNG vehicles to comply with Euro VI. These brands are now challenged by Chinese OEMs that offer complete buses at lower prices. This has been witnessed recently by the successful bids of BYD, Foton and Yutong in Chile and Colombia, insofar as a big part of the bids consist of electric buses.

Among bus producers, BYD was the pioneer bringing its electric models to be assembled in Sao Paulo state. Volvo, Mercedes-Benz, and Volkswagen already developed their models with launch timing in 2023. On the other hand, Scania and Iveco have natural gas as solution for alternative propulsion; meanwhile, Agrale has built partnerships to enter in the electric field. Furthermore, Higer is another beginner in electric vehicles offering their products in Brazil. But it hasn't all been good, the lack of government incentive incentives for new technology creates barriers for electricity. The shortage of components brought instability and concerns for industry. The price of new technology is another penalty, and the final price - it estimated an electric bus is three times more expensive than conventional bus. Of course, the initial costs will fall as the technology becomes more common. However, in the first moment the increase of operation costs will bring adjustments in subsidies or public ticket prices.

In fact, buses will be the entry point for electrification in South America, although the some movement has been noted in medium-duty segment, in minor scale. OEMs settled in Brazil have great potential to increase their production and rebound their profit margins due to new technologies and increase their penetration in South America countries, which brings more revenues for their headquarters. Moreover, the use of electric technology has increased globally, and the change will be needed to maintain Brazil at a competitive level for the bus industry. On the passenger side and bus driver side, the comfort and safety offered by electric buses may attract more users for public transport, and a reduction in occupational diseases and accidents for bus fleet operator. A reduction of greenhouse gas emissions has positive results for climate, meanwhile the public sector promotes social wellbeing with reduction of government health expenditures. In other words, it may be good for industry, good for users and good for the climate all at once.

Fuel for Thought: S&P Global Mobility forecasts 83.6M units in 2023 as light vehicle market cautiously recovers
LISTEN TO THIS PODCASTThe longer the supply squeeze lasts, the more potential there is for "lost" or "destroyed" demand.

Global new light vehicle sales will reach nearly 83.6 million units in 2023, a 5.6% increase year-over-year, according to a new forecast by S&P Global Mobility, a world leader in information, analytics and solutions. The auto industry continues to navigate supply chain challenges while confronted by several markets facing deteriorating economic conditions and fading pent-up demand. As semiconductor availability plays out, demand destruction is expected to take a more fundamental role in 2023, impacting production and the inventory restocking cycle.

S&P Global Mobility remains wary on recovery prospects. Destroyed demand is a key feature of the tepid forecast outlook - impacted by a blend of general economic impacts, higher interest rates, tight supply chains, an intensifying affordability squeeze, higher new-car prices, weakening consumer confidence, and heightened energy price/supply concerns. Two trailing years of pent-up demand remains, but headwinds risk an orderly release—including patchy recovery patterns for semiconductor supply, energy risks (especially through a European winter), and logistics log jams. With the auto industry already operating at, or near, recessionary levels, the forecast outlook remains mixed at best.

"2023 is expected to be a year of recovery, but likely a cautious one as the world approaches a gloomy trio of anniversaries - three years of COVID, two years of semiconductor disruption, and one year of Russia-Ukraine war impacts," said Colin Couchman, executive director, global light vehicle forecasting, S&P Global Mobility. "The rapid zero-COVID policy exit in mainland China provides further food for thought as we approach the New Year."

Full-year 2022 light vehicle sales ­- projected to reach nearly 79.2 million units by S&P Global Mobility - represent a 1.3% decline from 2021 levels.

Market-by-market forecasts

Europe: The European auto industry is suffering supply frictions, stalling economics, energy concerns, higher raw material/component prices, and wider security unease. Western/Central European 2022 vehicle sales should post 12.9 million units (-6.7% y/y). Order fulfilment remains a struggle, with long waiting lists, stretched lead times and challenging logistics. For 2023, the narrative shifts from supply constraints to demand destruction. With a mild recession looming for Western Europe, 2023 demand is forecasted at 13.9 million units (+7.4% y/y), according to S&P Global Mobility.

"For Europe, the evolving electrification transition adds further uncertainty, especially for vehicle prices, model availability, wait-and-see customers, and lurking Chinese OEMs," Couchman said.

United States: US sales volumes are expected to reach 14.8 million units in 2023, an estimated increase of 7.0% from the projected 2022 level of 13.8 million units. "The US auto market is struggling, impacted by supply chain, labor, logistics, inflation, and wider economic concerns," said Chris Hopson, manager, North American light vehicle sales forecast, S&P Global Mobility.

"Ongoing supply chain challenges and recessionary fears will result in a cautious build-back for the market. US consumers are hunkering down, and recovery towards pre-pandemic vehicle demand levels feels like a hard sell. Inventory and incentive activity will be key barometers to gauge potential demand destruction."

Mainland China: S&P Global Mobility analysts have rebalanced the outlook on the rapid zero-COVID policy exit, a still-weak economy, and ongoing stimulus. With 2022 set at 24.8 million units (+3.6% y/y), some demand fulfilment has been effectively delayed into 2023-24. For 2023, the CNY100 billion extension of NEV incentives and recovering local vehicle production should support domestic sales -2023 should see a recovery to 25.9 million units (+4.5% y/y), according to <span/>S&P Global Mobility. The market faces significant uncertainty as COVID infection levels could potentially surge following the ease in COVID rules.

Production recovery momentum eases for 2023

Global light vehicle production in 2022 is expected to finish at 81.8 million units - a hard-fought 6.0% improvement over 2021 levels - in a year that has been defined once again by supply chain constraints, debilitating lockdowns in China and, since February, the spillover effects of Russia's invasion of Ukraine, which has intensified the risk of widespread recession.

For 2023, S&P Global Mobility forecasts continued growth in output even against a backdrop which looks more challenging than the last 12 months. Light vehicle production levels are expected to rise by 4.0%, to 85.0 million units. While we entered 2022 imagining a return to pre-pandemic levels of production would be achieved in 2023, this optimism is now postponed until 2025 at the earliest.

In Mainland China, S&P Global Mobility forecasts modest production growth for 2023 of 1.1 percent, to 26.4 million units. Europe is expected to produce 16.6 million units in 2023, up from an estimated 15.6 million this year. For the North American region, upside pressure surrounding restocking and fulfilling pent-up demand provides support moving into 2023, with the forecast set at close to 15.1 million units.

Friction in the supply chain remains, not just involving semiconductors but also across labor and logistics - even if it is becoming harder to identify.

The structural semiconductor capacity deficit will take years to solve. While the supply-side issues won't see any immediate relief, the demand side will bring some respite. More of the existing capacity in the sector has been allocated to automotive since the second half of 2022, which will continue into 2023 due to slowing demand in other chip-hungry industries like telecoms and consumer electronics.

"These conditions may mask the ongoing capacity issues the auto industry faces," said Jeremie Bouchaud, director, semiconductor, E/E and autonomy practice, S&P Global Mobility. "The average chip content per car is increasing at an accelerated rate because of electrification, and the capacity deficit will resurface as soon as demand from other industries picks up again. The structural chip capacity deficit for cars will only be solved by 2024 at the earliest."

Though semiconductor availability remains an important consideration and continues to impact production operations, demand constraints are expected to play a more fundamental role and accelerate in second-half 2023 and into 2024, impacting production and influencing the speed and scale of inventory restocking.

Another major variable is emerging in Mainland China. While most of the world has adapted to living with COVID-19, the recent signals from Mainland China point towards a dichotomy that will be difficult to read. The recent relaxation of strict zero-COVID restrictions should free up businesses and services, but must be balanced against the increase in caseloads that will inevitably follow.

"The response of individuals, central and regional governments to these developments will be critical to the direction of the world's largest market next year," said Mark Fulthorpe, executive director of light vehicle production forecasts, S&P Global Mobility.

Electrification looks unstoppable

This year saw many OEMs double down on electrification ambitions for the coming five to 15 years, with 2022 seeing some carmakers dramatically scrambling to catch up. China's NEV policy, Europe's "Fit for 55," and the USA's IRA have moved the goalposts, resulting in electrification becoming firmly embedded in policymakers' visions for a greener future for mobility.

S&P Global Mobility projects global demand for battery electric passenger vehicles is on track to hit almost 10 million units for 2023, accounting for an estimated 13.3% of global passenger vehicle demand.

As many markets shift to greater levels of electrification, we expect vehicle pricing to be pressured to the upside, presenting a headwind to demand in the short-to-intermediate term. Longer-term questions remain, especially regarding charging infrastructure, grid power, battery supply chains, and the appropriate level of policymaker support to help smooth the transition from fossil fuel vehicles to electric vehicles.


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AutoTechInsight's Talking Heads Series: Key themes for 2023. Learn more

When will the heartland embrace electric vehicles? Read the article

AutoTechInsight's Talking Heads Series: Key themes for 2023

As 2022 draws to a close, the AutoTechInsight practice leads at S&P Global Mobility use our new Talking Heads series to find out what challenges and opportunities face their domains in 2023. The current year has again been dominated by the chip crisis. Overlaid on this has been the worsening macroeconomic position due to the fallout from the Russia-Ukraine conflict, which has had knock-on effects for the industry in terms of demand surety. In turn this has brought an end to the era of cheap capital, which has served to slow the burgeoning mobility startup ecosystem. In the broader sense the sector looks set to be heading to a phase where demand-side considerations replace the current supply-side fixation.

Matteo Fini
Vice President, Automotive Supply Chain, Technology and Aftermarket, S&P Global Mobility

If one looks across the sector, I sense that the topic of supplier resiliency will come to the fore in 2023. The macro environment is not conducive to success for those suppliers who've not got a good handle on costs or a degree of operational flexibility to manage the headwinds. This is most apparent in Europe.

High energy costs combined with stagnant volumes and rising financing costs will create major pressures for suppliers in the region. The risk factors appear heightened in Germany. Smaller tier-1 suppliers there - those with revenues between EUR100 and EUR500 million - and tier 2 suppliers seem the most exposed.

In the last couple of months, we saw German suppliers Ruester (vibration/damping products) and Dr. Schneider (ventilation and interior trim parts) file for insolvency. Ruester's case is quite interesting as they faced liquidity problems following two acquisitions and rising input costs. I would expect this becomes a theme in 2023.

Additionally, energy-intensive parts of the value chain, such as metal foundries, that also rely on volumes for returns will have to navigate the maelstrom. Indeed, any company that overstretched itself in 2021 and early 2022 with major investment programs contingent upon a return of pre-crisis volumes will have to reconsider its priorities for survival.

Jeremie Bouchaud
Director, Semiconductor, E/E and Autonomy Practice, S&P Global Mobility


The structural capacity deficit will take years to solve. While there was plenty of investment in capacity in 2021 and 2022 it takes time to bring additional capacity online. The lead time for equipment increased from one to two quarters to between two and two-and-a-half year. That means that some of the investment and CAPEX boom in 2022 will not result in significant additional capacity before 2024 or 2025.

While the supply-side issues won't see any immediate relief the demand side will bring some respite. As we had predicted in January, more of the existing capacity in the sector was allocated to automotive in H2 2022 and this will continue early into 2023 and this arose because of a slowdown in other chip-hungry industries like telecoms and consumer electronics. Additionally, aggregate demand conditions are deteriorating globally due to the war in Ukraine, inflationary pressures, and a generally moribund economic outlook. These conditions may mask the capacity issues in 2023 but one should not be fooled. The average chip content per car is increasing at an accelerated rate because of electrification and the capacity deficit will become visible again as soon as demand from other industries picks up again.

Analog will remain the main bottleneck in 2023 though due to several factors. First, due to the number of analog chips per car increases faster than the number of MCUs. Additionally, analog chips don't shrink as well as SoCs or MCUs; this means production remains on mature process nodes where there is not enough capacity and not enough investments. Lastly, the demand for analog is strong in other mass markets - especially mobiles phones.

To mitigate semiconductor risks we expect that for 2023 and beyond that will rethink the way electronics are designed in their vehicles. They will work on increasing the standardization of chips and reducing the fragmentation/variety of chips they use. For example, we expect them to make sure their Tier 1 suppliers use fewer ASICs/ASSPs (custom chips or chips designed for a single applications) and use more general-purpose chips. In Japan we're also seeing some effort, led by the government there, to simplify chip qualification across OEMs and Tier 1s. Reduced customization and the use of more multipurpose chips will mean that OEMs can increase their vehicle output for a given chip capacity because there are fewer single points of failure. Also, it is easier to reallocate optimally available chips across different systems.

Revenue growth for automotive semiconductors will slow in 2023 to around 13%, after an estimated 22% in 2022. This is a soft landing for the sector, but one cannot rule out a harder crash for automotive semiconductors. Much will depend on how the demand for vehicles evolves. It is unclear how much of the inventory will be burnt and when.


The robotaxi race is about to get interesting in 2023. There's been a lot of focus on Ford and VW pulling out of Argo AI, but that shouldn't detract from what's happening in autonomy.

Regarding robotaxis, I believe we are about to see a reshuffling of the pack. At the moment, the tech companies like Waymo are seen as winning the race. But I don't see first mover status as necessarily conferring any sustainable competitive advantage. If we stretch the race metaphor further, the tech companies - like Cruise and Baidu - have done a great job of reacting to the starter's pistol and getting out of the blocks first. But the first part of the race is akin to the technological demonstration. To deliver the robotaxi future, I think the much more difficult piece to execute against is commercialization.

Here, neither investors nor the capital markets will continue to pay the bill if there is no revenue generated. As we enter the commercialization phase, the challengers will not just emerge from robotaxi tech peers like Pony, WeRide and Waymo but also from the car manufacturers. The car manufacturers have some advantage here in that they're already operating large fleets complete with automated driving functions like Level 2+. Tesla and XPENG are targeting the delivery of robotaxis in 2023. They are training the software with data that comes free of charge from the millions of vehicles already on the market. Meanwhile, robotaxi companies are burning cash to collect richer data from a far smaller pool of vehicles on the roads. Data is the new oil. Trained software, built on real-life data, is a more scalable path forward, and will be augmented by simulation to cover edge cases. However, that said, it has not yet been proven that automated vehicle content can be successfully leveraged into L4 on-road deployment—or if these automakers can deliver on promises that have gone unfulfilled before.

When we look at the commercialization and productization issues, cost discipline and awareness is a bread-and-butter competency of the OEMs. If Tesla and XPeng can demonstrate this approach in 2023, we're going to see more legacy OEMs jostle for position in the robotaxi marathon. But tech companies like Waymo and Baidu do have the enormous cash reserves that will be necessary to sustain a position in the race on the long runway before profits takeoff.

Dr. Tawhid Khan
Director, Software Practice, S&P Global Mobility


Two key things stand out for me in 2023. Despite mounting tensions in US-China relations, there are no signs that Germany's industry is ready to participate in a united western front. The recent visit to China by the German Chancellor Olaf Scholz, during which he was accompanied by German industry leaders such as the VW and BMW CEOs - Oliver Blume and Oliver Zipse respectively - has reinforced this view. Comments from both CEOs emanating from the visit reinforced this view with both adamant that transforming their companies is reliant on the Chinese market and being able to manufacture cars in the country, particularly in the EV era. Perhaps more telling was a comment from the previous VW CEO, Herbert Diess who stated, 'Without the deals with China, inflation would continue to explode'. Given the energy crisis that's hitting Europe, and Germany particularly hard, the continuing focus on China in the face of the contradictory noises and policies coming from allies such as the US and the UK indicates that German industry will continue to place large bets on China. This is seen as a strategic move to alleviate the pains of the energy crisis and the accompanying stagflation.

Second, and more directly related to my domain, there's the looming question of who will win the automotive software wars. Will it be the automakers, or will it be big tech? If not giving us an answer, 2023 will give us more clues as to the direction the battles will take. Consumers are beginning to adapt to, and embrace, the new philosophy of tech-focused transportation. The pressure to deliver the new groundbreaking technologies is enormous for the OEMs. To deliver, the OEMs require a massive influx of talented software developers. The market for software talent is highly competitive - OEMs are competing with their supply base for this talent as well as the tech companies. The automotive sector has a couple of obstacles in its path if it wants to develop its own software ecosystems. The industry is bound by process and legislation, and this doesn't make the sector particularly attractive to young software graduates. Finding a way to attract the necessary talent to the industry will be key. The reinvention of the industry to try and win the talent battle will be interesting to observe. Already we've seen VW's CARIAD - an attempt to create company with big tech behaviors - struggle to deliver. It will be fascinating to see what other players in the sector do to try and lure the best talent to the industry.

Brian Rhodes
Associate Director, Connected Car and Vehicle Experience, S&P Global Mobility

Connected Car

The tumultuous economic and supply chain situations of the previous two years+ have put a focus on margin performance by automakers, which have soared to record highs. This renewed focus on margin performance will evolve as demand for new vehicles faces headwinds. As a result, the potential for margin growth from add-on features and services have garnered not only more attention - but more commitments to Wall Street. These connected services and paid updates can achieve a margin of greater than 70%, which makes this space incredibly attractive for an industry seeking cover from the cyclical nature of selling vehicles.

A sampling of 2030 revenue targets related to software and services:

General Motors - $25b, software, services, subscriptionsStellantis - $23b, software • Renault - 20% of revenue, data, mobility, energy servicesVolkswagen - 20% of revenue, subscriptions, mobility services

2018-20 were years of deployment, with many automakers both standardizing connectivity hardware in regions that don't traditionally support higher option pricing as well as the release of new generations of TCU (telematics control unit) hardware that will keep a connection active much longer. 2020-21 saw releases of new innovative service-oriented business models beyond Tesla, and 2022 was underscored by leading automakers leveraging the flexibility of these services to adjust packaging, pricing, and availability of features. We expect 2023 to be the launching pad for similar features, with much broader use cases, from mainstream follower automakers. This development will be critical to moving the concept of built-in upgradable content from headlines to reality for consumers with newer vehicles.

Graham Evans
Director, Battery, Charging, Propulsion and Thermal Practice, S&P Global Mobility


For batteries there are a couple of areas that will come more into focus in 2023, namely:

The raw materials deficit, how the industry addresses that, and what are the additional implications for sourcing decisions on the carbon footprint. On one hand there's this massive need to secure raw material supplies, but they can't be secured at any cost because ESG considerations are gathering momentum. Added to this mix are the implicit needs of the US's Inflation Reduction Act (IRA), which has sparked many OEMs and suppliers into tearing up their battery playbooks for the US market to secure access to manufacturing subsidies and purchase subsides for their consumers.Secondly, as we know inflation is a burgeoning issue around the world due to the confluence of the pandemic's aftermath and the Russia-Ukraine conflict. This is putting pressure on consumers, and we could see a pivot from the OEMs to address the changed macroenvironment. For example, does this mean a switch to lower tech battery solutions (and implicitly lower cost batteries) such as those with LFP (Lithium-Iron-Phosphorous) based cathode chemistries to secure higher margins, or will it mean increasing demand for batteries with a lower capacity and therefore compromises on vehicle range?Charging

In 2023, we might get a little closer to finding out whether a couple of nascent technologies that have been around BEVs for a while have a chance of mainstream adoption:

First, there's battery swapping and the question of whether it can be deployed outside China where government incentives and geospatial issues in cities have driven its initial success. Nio, a key player in China, is launching in Europe and already has a handful of stations in Norway - so that market, as ever with EVs, is an interesting petri dish for swapping in Europe. In the US, it'll be interesting to see if Ample, the Californian start-up, can drum up sufficient interest in the fleet sector it's targeting. However, swapping has more against it outside China. There's the propensity for home charging, the lack of governmental directive and the need to homogenize battery packs which would see OEMs and T1s surrender some of their IP.The second thread to charging is wireless charging developments and its deployment by mainstream OEMs. While BMW, Hyundai (both with WiTricity's Halo) and Volvo (with InductEV) have already dabbled with wireless charging, widespread adoption of the technology has the potential to challenge the current stand-off between battery size and range. Consumers will be able to charge more conveniently at home and adopt 'splash and dash' behaviors if dynamic wireless charging becomes widespread. The technology suits fleet applications well, such as taxis, but are mainstream consumers prepared to pay a premium for such convenience technology when the industry has already converged on the charging plug?DC wallbox chargers are also something to lookout for the in the domestic charging sphere. They offer a halfway house between slow AC chargers and the superfast public DC chargers. Their wider deployment has potential to shift the balance in the domestic vs public charging conundrum. Furthermore, there are models available that facilitate V2G (vehicle to grid) operation, which could prove more appealing in these energy conscious and cost-sensitive times.Propulsion

The Euro 7 implications are important for technology fitment on vehicles still fitted with an internal combustion engine, however supply chains ramping up to support E-motor applications are not without their challenges.

The proposal for Euro 7 emissions was finally announced in October 2022. The limits were watered down from what had initially been signposted. This will cause many OEMs to pause for thought on their electrification plans - does Euro 7 make it worth investing in one more round of ICE updates? Or does it make more sense to focus on electrification and continue on the path of separating ICE and EV businesses in the way that the likes of Renault and Ford have already chosen?The electrical steel capacity crunch potentially has ramifications for the propulsion domain. A shortage of e-steel could mean that planned product mix could change in the short- to medium-term in favor of ICE and hybrid applications where there's a much-reduced demand for e-steel.The desire to squeeze more range and efficiency from existing BEV parameters should prompt more the in the industry to switch to silicon carbide (SiC) inverter technology. SiC inverters deliver efficiency in that they're able to extract more energy from a battery - thus improving range - and allow for faster charging and improved acceleration. Major power electronics suppliers such as Marelli, BorgWarner and Delphi Technologies have been increasingly active in this area recently, developing their products and securing orders which suggests that we'll see increasing SiC inverter adoption in the short-term.Thermal

For the thermal domain one of the most pertinent issues presenting itself in 2023 relates to the EU's ruling on banning PFA (perfluoro alkoxy alkane). The decision is expected to be announced in January. Here there are implications for the refrigerants R1234yf and R134a, which are widely used in vehicle HVAC systems. While there are alternatives to PFA refrigerants they'll necessitate a wholesale redesign of HVAC systems depending on the alternative that is decided upon. In addition to HVAC, the potential for a PFA ban adds complexity to EV batteries too as the incumbent chemical types are widely used to manufacture binders for battery electrodes.

Plenty of '22 models still on the shelf

For all the talk of low inventories, and car dealers tacking "market adjustments" on top of MSRP, there were nearly a half-million units of leftover 2022 model year vehicles still advertised for sale in the United States heading into the first weekend of December. That is on top of the 2023 vehicles that have been arriving on dealer lots.

According to S&P Global Mobility's analysis of US dealer advertised inventory data, mainstream brands Ford, Chevrolet, Ram, and Jeep had about 300,000 units of 2022 models advertised as available for sale the week ending December 4. Those four brands account for 71% of 2022 advertised inventory listed by mainstream brand dealers - and 66% of all dealer-advertised inventory when including luxury marques.

Among luxury brands, Mercedes-Benz and Lincoln still showed the most remaining 2022 vehicles in dealer advertised inventory, according to the S&P Global Mobility analysis.

While most automakers traditionally ease off production in late summer to transition to the new model year, and clear out the last of their old models by Christmas, certain automakers actually have seen their 2022 inventories increase in October and November.

"Model year discipline has ebbed," said Cheryl Woodworth, consulting associate director for S&P Global Mobility. "With the chip shortage, inventory control is not as meticulous as it used to be."

Is running old inventories into the new model year a bad thing? It can be for automakers, but it could spell retail relief for consumers. With '22 models carrying the stigma of being "older" - even if the 2023 model is unchanged - that can mean dealers are incentivized to blow out the zero-miles '22s.

"The longer you wait to change over your model year, the more it hits your residual values in terms of tougher grading," Woodworth said.

Some dealers are offering below-MSRP discounts on vehicles that carried sticker-price-plus Monroney labels just months before. And with consumer demand waning due to external economic forces such as inflation and recession-related layoffs, the pressure to move the metal increases.

Usually, the inventory arc for each model year follows a predictable curve, peaking in spring as production hits its stride, and then descending in summer during the annual selldown and the model year transitions in September and October. But supply chain chaos has made it impossible for some automakers to follow tradition.

That said, with certain elements of the supply chain still in flux, it might make sense for manufacturing continuity to continue building 2022 models if a 2023 minor model change includes a part that is not readily available, Woodworth said.

In November, Ford was still delivering 2022 Escapes to dealerships from its Louisville factory, as the 2023 minor model change is still ramping up. The same continuation of late production '22 models applies to the Ford Bronco Sport and Lincoln Corsair, which share many of their underpinnings with the Escape platform.

Remaining 2022 units are often specific to certain models. In the market for a luxury SUV? The models with the highest remaining 2022 model year units are the Mercedes-Benz GLC and Lincoln Corsair.

Why the excess '22 Mercedes GLCs? It's still awaiting a 2023 freshening - the national website still wasn't listing the 2023 as available on December 15 - and as such 2022 models are still in strong supply. Among luxury brands, Mercedes had 33% share of remaining '22 models still advertised the week ending December 4, while Lincoln accounted for 22% share of leftover luxury '22s.

That said, Mercedes dealers have done a strong job of selling down its 2022 inventories from mid-summer in anticipation of the '23 model arriving. And other key Mercedes volume models - GLE, S-Class, and C-Class - are mostly represented by 2023 model production.

Supply chain hiccups also are affecting inventories in other ways. Tens of thousands of so-called "ghost units" of the F-150 and Chevrolet Silverado have rolled off the assembly line but were missing crucial parts, and have been collecting in parking lots near their respective factories until they can be released. On top of those unfinished units, Ford dealers had nearly as many F-150s advertised the week ending December 4 as they did in August in September. When the ghost units finally receive their needed parts and enter wholesale inventory - Ford hopes it will happen by the end of December - that will add to the pressure to clear out the '22 models at the dealer level.

The combined black-swan events of COVID, semiconductor shortages, and the Russian invasion of Ukraine disrupted traditional manufacturing and supply norms - the latest downstream impact being the overrun of prior model-year production and inventory. How the industry can recover to its regular cadence depends on its adaptability to these continued disruptions.

Toyota Excels in US Retail New Vehicle Industry

Among the three-volume leaders in the mainstream part of the new vehicle industry - Chevrolet, Ford, and Toyota, the Japanese brand is pulling away from the other two, based on S&P Global Mobility new vehicle retail* registration data.

Toyota has been the retail market share leader every year since 2012 (see table below), and if its September 2022 CYTD retail share of 14% holds through December, Toyota would lead for the 11th consecutive year. Its 14% share also would be a record for the brand - and the first time any brand has reached that level in the past decade. Furthermore, Toyota's 4.1 percentage point lead so far this year over runner-up Ford is the second highest margin this decade, surpassed only by the 4.4 percentage point gap last year.

Four Toyota models (RAV4, Camry, Tacoma, and Highlander) currently rank among the top 10 (of almost 400 nameplates on the market) based on September 2022 CYTD new retail registrations, including the #1 overall model (RAV4), #1 car (Camry), and #1 crossover (RAV4). No other brand has more than one model among the top 10 this year.

Regarding brand loyalty, Toyota consistently ranks either second (seven times in past decade) or third (four times) in the mainstream space, surpassed only by Ford or Chevrolet or both. Its current shortfall versus leader Ford of 2 percentage points is slightly larger than its 1.4 percentage point gap for all of 2021.

Toyota's leadership position is reinforced by its segment-level performance. Among the 14 segments in which the Toyota brand competes, it currently ranks No. 1 in both retail share and brand loyalty in five, including the Compact Car, Compact Sport, Mid Size Car, Mid Size Pickup, and Mid Size Van Segments. Together these five categories account for almost a quarter of the mainstream space (22.3%). Further, in three additional segments, including the Compact Utility, Subcompact Plus Utility, and Full Size Car segments (with a combined mainstream share of 33.5%), Toyota models rank No. 1 in either retail share or brand loyalty. Put together, these eight segments in which Toyota leads in one or both categories account for more than half (55.8%) of the mainstream market, implying that Toyota now has a leadership or highly competitive position in more than half of the mainstream space. Toyota still lags in some key mainstream categories - particularly full-size pickups and SUVs where the domestic brands still dominate, and where Toyota has struggled to make a dent.

Toyota also leads the mainstream market in electrification (EV and hybrid); its electrification share of 25.8% is almost 10 percentage points above runner-up Chrysler (see table below). Admittedly, Toyota lags rivals Chevrolet and Ford in the high-visibility EV space, as both those brands offer established EVs with the Bolt and Mustang Mach-E, respectively, while Toyota's first EV, the BZ4X, is just now launching. But hybrids play an important, though somewhat under-the-radar, role in alternative fuel migration patterns: Hybrid households migrate to an EV at more than three times the migration rate to EVs from ICE vehicles.

Lastly, Toyota clearly leads its mainstream competitors in appealing to the three major ethnicities, an important achievement given that African Americans, Asians, and Hispanics now account for a third of all new retail registrations. As shown below, Toyota brand loyalty among both African Americans and Hispanics surpasses 60% (the only mainstream brand for which this is the case), and Toyota's 48.5% brand loyalty among Asians is more than 5 percentage points higher than that of runner-up Ford.

Given its record over the past several years, Toyota's strong positions in retail share, brand loyalty, and ethnic loyalty support the claim that it is among the leaders, if not the leader, in the US mass market new vehicle industry.

*Retail includes vehicles registered to individuals


Top 10 Industry Trends Report

This automotive insight is part of our monthly Top 10 Industry Trends Report. The report findings are taken from new and used registration and loyalty data.

The November report is now available, incorporating October 2022 CFI and LAT data. To download the report, please click below.


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The post The American Powertrain Monday Shift: A Big Rig Trans In A Pickup – This One Is A Total Freak And Sounds GREAT! appeared first on

- Brian Lohnes

Why do we love historic racing? Why do loads of people love history racing? The answer is that it exposes talent. We strip away modern technology, we strip away modern amenities, we strip away basically everything and we’re left with racers in awesome machines. It is pure, it is old, and it is awesome. There […]

The post Watch Ollie Bryant Drive A 1958 Lotus-Climax Like A Boss At Goodwood – Raw Talent! appeared first on

- Brian Lohnes

We hear it all too much. We hear it every day. We live in a disposable age now. No one fixes TV sets anymore. It’s hell to find parts to fix your appliances. The mantra is simply to just replace stuff. It wasn’t always like this. There was a time that basically everything you got […]

The post Video of Zen: Watch This Guy Restore An Old Hitachi Drill In Time Lapse – Neat! appeared first on

- Brian Lohnes
The 800 Club: The Biggest Production Car Engines In American History

(Photo credit: – Being that we live in the world of the 100+ hp per liter of displacement engine now, what about the other end of the spectrum. Human history pretty much guarantees that if we’re obsessed with tiny engines these days we were once obsessed with massive engines, right? The fact is that we […]

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- The Daily Drive staff

2022 Mercedes-Benz EQB300 4Matic Class: Premium Compact Crossover Color: Mountain Grey Metallic Miles driven: 141 Battery capacity: 70.5 kWh EPA-estimate MPGe: 104 city/98 hwy/101 combined EPA-estimated driving range: 243 miles Consumer Guide range estimate (ideal conditions): 243+ miles Base price: $54,500 (not including $1050 destination charge) Options on test vehicle: Special paint ($750), charging cable ($250), AMG […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks

- Ed Piotrowski

On January 30, Ford announced a significant price cut for its Mustang Mach-E electric SUV. New Mach-E vehicles will now cost up to $5,700 less than they did at the start of the new year, though Ford has raised the mandatory manufacturer destination fee to $1,500 from $1,300. More EV news and reviews Ford slashes […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks

- Tom Appel

This is an installment in a series of posts looking back on show cars that we feel deserved a little more attention than they got. If you have a suggestion for a Forgotten Concept topic, please shoot us a line or leave a comment below. Ford Probe III Concept First Shown: 1981 Frankfurt Auto Show […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks

- The Daily Drive staff

Whether you drive a car, need a car, or just occasionally bum a ride with friends, you’ve come to the right place. Join Jill and Tom as they break down everything that’s going on in the auto world. New-car reviews, shopping tips, driving green, electric cars, classic cars, and plenty of great guests. This is […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks

- Ed Piotrowski

Hot on the heels of the 2023 Acura Integra being named the North American Car of the Year, Honda’s premium division announced its plans to offer a high-performance Type-S variant for the 2024 model year. More Acura news and reviews 2024 Acura Integra Type-S A camouflaged prototype made its North American debut at the Rolex […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks

- The Daily Drive staff

2023 Kia Telluride SX Prestige X-Pro Class: Midsize Crossover Color: Midnight Lake Blue Miles driven: 281 Observed fuel economy: 17.6 mpg Driving mix: 60% city, 40% highway EPA-estimated fuel economy: 19/25/21 (mpg city/highway/combined) Fuel type: Regular gas Base price: $52,785 (not including $1335 destination charge) Options on test vehicle: Special paint ($495), Terracotta Interior Color Package […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks

- Tom Appel

You can’t exactly say that Plymouth created a market segment, but the new-for-1928 Chrysler division went to great lengths to define one. Plymouth was founded specifically to tackle the “low-cost” competition, which at the time was primarily Chevrolet and Ford. From the start, Plymouth advertising made reference to the “low-cost field,” which quickly gave way […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks

- Ed Piotrowski

Honda is kickstarting its plan to sell 500,000 fully electric vehicles in North America by 2030 with the 2024 Prologue. The Japanese automaker has been slowly releasing details on this upcoming SUV, which it says will reside, “above CR-V and alongside Passport, offering generous passenger and cargo space,” according to a recent press release. More […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks

- The Daily Drive staff

Whether you drive a car, need a car, or just occasionally bum a ride with friends, you’ve come to the right place. Join Jill and Tom as they break down everything that’s going on in the auto world. New-car reviews, shopping tips, driving green, electric cars, classic cars, and plenty of great guests. This is […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks

- Tom Appel

If you’ve been hearing or reading about electric vehicles, you’ve likely come across the word “kilowatt.” The vernacular of the EV is somewhat different than that of gas- or diesel-powered cars. Gone are words and terms like gallon and horsepower, replaced by the likes of kilowatt (kW) and kilowatt hour (kWh). More electric-car news and […]

The Daily Drive | Consumer Guide® - News, Opinion, Photos, and Videos on the Latest Cars and Trucks