It won’t all be completely depressing, I promise.
Meet The New Boss
Say what you want about Akio Toyoda’s risk-averse approach to battery-electric vehicles, but I think we can all agree it’s a shame we’re about to lose such a Real One at the helm of a major automaker. Toyoda is a legit gearhead like us; an enthusiast, a racer and someone who truly believed driving should be fun. This trickled down to tons of Toyota products over the last decade and change, and we all know there was a time when you couldn’t say that. So here’s the good news: Toyoda’s replacement, Koji Sato, is apparently a fellow traveler in the enthusiast world. As I wrote yesterday, he drives a Supra handed down from his father-in-law (I’m not sure which Supra, but all of them were rad.) But there’s more: He was the chief engineer on the Lexus LC, which is very good, and he generally doesn’t come across as one of these bland executives who could work in any industry and just happened to land in cars. Remember, Sato’s an engineer by trade, and car companies run by engineers just tend to do cooler and better shit than the ones run by bean counters. Check out that video above where Sato and Toyoda go for a drive in the new electric Lexus RZ on a track and seem to be having a genuinely good time together. The way they both get giddy when that electric torque comes on (which is always fun to experience if you’re not used to it) is really delightful to watch. Here’s Automotive News‘ ace Asia reporter Hans Griemel on the new guy’s deal: As that story also notes, Sato has a tough job coming up, even by CEO standards (and Toyoda’s farewell speech yesterday made it clear his life hasn’t been a picnic for the last 14 years.) He has to get Toyota through all of the digital, mobility and energy-related challenges of the coming years in “an era when software adds more value to vehicles than their metal, glass and rubber.” “He is the guiding person showing the team the vision and philosophy of the brand,” Sato told Automotive News last year. “Akio’s sensors as the master driver are critically important.” Toyoda said Sato was tapped partly because “he loves cars.” Indeed, car crazy Toyoda said he will keep his role as master driver even as he steps into the supervisorial role of chairman under the management shuffle. “In my role as master driver, I will check to see if the product has the true taste of Toyota and Lexus cars,” Toyoda said. One last quote on that from Toyoda himself about what’s to come, and I think this is especially significant: That says a lot about what’s next, doesn’t it?
China’s Automotive Takeover Speeds Up
If you’re an American, and Google Analytics tells me that most of you are, you may not realize just how big the Chinese auto industry has become. That isn’t your fault; Chinese cars aren’t really a thing here yet for a variety of reasons, including tensions over trade, supply chains, national security and our country’s deep-seated fear of communism. But guess what? Just about everywhere else in the world, Chinese cars are blowing up. (Figuratively.) Here’s Bloomberg (subscription required) on how China is about to surpass Germany and catch up to Japan in terms of car exports. (Also, America’s car exports? We’re way, way down on that list, a distant fifth now behind South Korea.) (By the way, if you pay for Apple News+, as I do, you can read Bloomberg and a ton of other outlets. It’s a shockingly good deal for like $10 a month. Just a helpful PSA from someone who’s as much a news junkie as he is a car nerd.) Chinese brands are now market leaders in the Middle East and Latin America. In Europe, the China-made vehicles sold are mostly electric models from Tesla Inc. and Chinese-owned former European brands such as Volvo and MG, and European brands like Dacia Spring or the BMW iX3, which is produced exclusively in China. A raft of homegrown marques like BYD Co. and Nio Inc. are ascending as well, with ambitions to dominate the world of new-energy vehicles. Backed by Warren Buffett’s Berkshire Hathaway Inc., BYD is already charming EV buyers in developed countries such as Australia. The trend underscores that China has moved beyond being the “world’s factory” for low-cost consumer electronic devices, appliances and Christmas toys. By shifting to more complex and sophisticated products for competitive, highly regulated markets, Chinese companies are moving up the value chain in manufacturing—a key driver of growth that transformed the once-struggling communist economy into today’s quasi-capitalist $18 trillion juggernaut. Indeed, the Economic Complexity Index compiled by the Growth Lab at Harvard University, which analyzes the range of products a country exports, ranks China 17th in the world, a rise from 24th a decade ago. It’s kind of wild that the Chinese car boom hasn’t happened in the U.S. yet; it certainly has in even Mexico, for example. But the Trump-era tariffs and now Biden’s Inflation Reduction Act policies have kept that industry at bay here, save for a few Chinese-built outliers like the Polestar 2 and the Buick Envision. But this is the other reason that, for example, Toyota’s EV strategy has come under fire: these Chinese exports? They’re largely EVs or will be entirely in the coming years. And their prices can undercut everyone else’s in several markets. If you’re a big legacy automaker increasingly focusing on battery power, you have the Chinese auto industry to fend off. That won’t be an easy task.
How Fire Departments Are Getting Ready For The EV Era
A lot of the conversations to be had around EVs aren’t about “good” or “bad” compared to internal combustion, but “different.” Let’s take firefighting, for example. Car fires happen all the time with gasoline-powered cars, typically after crashes but also in rare cases from maintenance issues. Gasoline burns. That’s what it does. But fire departments have spent a century getting equipped for that outcome. Battery fires are different and they’re especially nasty. Lithium-ion batteries burn hard and hot, and when they do, they are notoriously difficult to extinguish. This Vox story dives into the reality facing fire departments, especially smaller and more rural ones that may not have the funding to deal with this like more well-heeled operations do. (The story’s framed as “Tesla fires,” which I don’t really agree with; ask Chevrolet how that’s been going for them. It’s thankfully worth noting EV fires are still especially rare; one Austin fire chief quoted in that story says that his department has only dealt with a handful of them, and Austin is a pretty EV-savvy place these days. What we need is more safety improvements for EVs, as has happened for decades with ICE vehicles, some national standards on how to battle these blazes, and hopefully better funding for the departments that will be called upon to do so. While some standards have been released, others are still being developed, and fire departments are still catching up with National Transportation Safety Board recommendations. There’s also the matter of just getting the vast number of firefighters up to speed on EVs. O’Brian, the fire chief from Michigan, told Vox that the federal government needs to take a much more active role in funding research and helping buy EVs that fire departments can practice on. Another complication is that EV fires present different risks in different places. The New York City Fire Department (FDNY) hasn’t had to fight any electric car fires yet, but it is facing e-scooter and e-bike fires, which are on track to double compared to last year and disproportionately endanger delivery workers in the city. Batteries that lack safety certifications or are charged improperly are more likely to ignite, explains John Esposito, the FDNY’s chief of operations. In November, 43 people were injured in a Manhattan building fire that the department ultimately linked to a battery-powered micromobility device — possibly a scooter — that had been kept inside an apartment.
Ford Recalls 462,000 Cars For Camera Issue
Luckily, nothing is on fire with this Ford recall news. But 462,000 cars is a lot of cars, so I figure I’ll take the time to let you know about it. The automaker is recalling a bunch of SUVs worldwide because the backup camera could fail, which isn’t what you want. Here’s Reuters:
The Flush
Ford said it has reports of 17 minor crashes relating to the recall issue and more than 2,100 warranty reports but no reports of injuries. The recall expands and replaces a 2021 recall of 228,000 vehicles. Dealers will update the image processing module software and vehicles previously updated under the old recall will need the new update. The most recent product lines show that they’re headed in the right direction. Now that I’ve learned a little more about Sato, I’m becoming optimistic about where they will go next. The Chinese should sell cheap cars here, especially if they can have a starting price of 4 digits, which they probably can. That’s for starters, I’m sure I’ve got more ideas. How I read this is that 17 people can’t operate a vehicle sans a functioning backup camera without getting into “minor traffic accidents”… I still think backup sensors should’ve been the mandate and not cameras, but whatever. One of the first challenges he brought up was brand loyalty. Not in the “I’m a Chevy guy” sense but in the “The only dealer in town is a Chevy dealer and I’m not driving two hours for service” sense. A big chunk of the US and a decent amount of the Canadian market is rural. This was how he explained new entrants tending to start in the big coastal cities to try and gain a foothold. A new brand will also have to decide if they come in at the entry level of the market or premium end. It would seem natural that the Chinese might target the entry level as they could probably leverage lower costs and try to attract attention as a value brand. That would still require volume to make it worthwhile and that would be a challenge with a sparse dealer network. Entering as a premium brand without an established pedigree sounds far fetched. Even known names like Alfa have struggled with that. It’s for some of these reasons that I think the Chinese invasion will be via a combination of captive import and acquired brands. Volvo is a good example on acquired brand and the models GM is importing from their Chinese joint ventures would be captive in a way. I just sense it will be a long time before there are lot of Shenzhen Happy Lucky Go vehicles tootling around this market. It’s hard to admit, but let’s see… around 1985 for the Hyundai Excel or whatever… 2010 when Sonatas and such finally became mildly acceptable… I’d give it 25 years from the time when a Chinese brand hits the shores to when it becomes commonplace. And it’s nothing good. Remember, Toyota was the first into the ‘subscription required’ space with $18 a month for remote start. Including on vehicles with the RF hardware. And everyone seems to have forgotten that. “That isn’t your fault; Chinese cars aren’t really a thing here yet for a variety of reasons, including tensions over trade, supply chains, national security and our country’s deep-seated fear of communism.” Where 99.5% of people who scream “COMMUNISM” can’t even define it. China is not a communist country, full stop. They are a communist country in the exact same way the Democratic People’s Republic of Korea is a democracy. And the reason they’re blowing up is because they can and will do it cheaper than anyone else in order to establish a foothold, to start with. In African countries their new thing is tying food aid and construction projects (which are invariably built using unsafe materials and incorrect methods) to things like blanket tariff waivers. So they can absolutely flood the market with cheap junk they couldn’t sell elsewhere, effectively bankrupt the locals who can’t compete on volume or costs, and ultimately hold the entire country’s economy hostage. That’s why China should be feared and made a pariah. Because it’s a fascist, genocidal dictatorship hellbent on conquering the world. They’re just using economic means instead of air raids. “What do you want to see from the Koji Sato era of Toyota? I say the time is right for the MR2 to make a comeback. I’ve been saying that for two decades now, but it doesn’t mean I’m wrong.” Stop. With. The. Mobility. Company. Bullshit. Now. Before you even sit in the chair. Knock it the fuck off. You are an automotive company. Just because something has a battery does not mean it is not a car. The second your company starts saying ‘software is more valuable’ and using every buzzword in the book? We know damn well that you are absolutely not aligned with enthusiasts. Whether or not you are one is irrelevant. We know you are the enemy – the executive who demands blood from a stone, who wants to charge a monthly fee for the heated steering wheel, who demands it be set up so the only way to update the infotainment is to buy a whole new car, and jacks up the base MSRP while you’re at it. Enthusiasts might be the minority, Mr. Sato, but the average consumers are already quite well aware that ‘mobility company’ means ‘you’ll own nothing, you’ll pay twice for everything, and you’ll like it.’ And you do not want to be on the wrong side of that. This is the Walmart strategy. Flood the market by loss leaders and taking losses while ramping up your local presence, bankrupt your local competitors, then rule over your empire of shit because now you’re the only game in town. I wonder how much the blanket tariff waivers were paid for with fat bribes in officials’ pockets. The good thing is, the Chinese money printing presses are slowing down because their growth engine is falling apart. But it might be too late for many countries, and for good business in general. The size issue is most likely because of 2 things. 1.) The Footprint rule makes it nearly impossible to make small ICE cars and Trucks in the US as the more space width and length (wheelbase wise) the automobile takes up the lower the MPG requirements are, if you can’t meet the requirements expect several thousand dollar fines per vehicle. Since Ford stupidly decided to make the Ecoboost Maverick the Maverick had to be larger than it needed to be to meet the MPG requirements. 2.) Stricter crash standards increase the size even more. Hopefully Toyota’s rumored “Stout” pickup will be body on frame construction with more than one cab and bed configuration.
