Happy Tuesday! It’s December 26, 2023 and that’s it The morning shift — your daily roundup of the top automotive headlines from around the world, all in one place. Here are the important stories you need to know.
1st gear: 2024 will be a good year to buy a car
The past few years have been tough for prospective car buyers. Supply chain mishaps, scalpers, dealer markups – no wonder cars on American roads continue to age. However, analysts are now predicting light at the end of the tunnel. From Detroit Free Press:
If you’ve been wanting to buy a new car but can’t afford it, then 2024 could finally be your year.
Cox Automotive Chief Economist Jonathan Smoak says 2024 will be the best year for consumers to buy a new car since before the pandemic, as new vehicle supply increases, transaction prices fall, automakers are expected to offer more deals and interest rates should ease.
Happy New Year!
“With supply normalizing and the economy stabilizing to reach a soft landing and not turn into a recession, this leads to an environment that is the most normal we’ve faced since 2019,” Smoke recently told Detroit Free Press. “For consumers looking to buy a vehicle, this is the best year yet since 2019.”
The laws of supply and demand rarely seem to work in our favor as consumers, but maybe – just this once – we’ll get lucky. Remember when cars sold below MSRP? We can get those days back.
2nd gear: NIO wants to come for EQS
The high-end EV market is interesting. It makes sense that automakers keep trying, as they can charge a premium for new technology to pay off R&D costs before branching out to more pedestrian vehicles, but the actual sales numbers for these cars of the highest class leave much to be desired. Earnings can be even worse. However, NIO is trying it anyway. from Bloomberg:
Chinese electric car maker Nio Inc. unveiled a flagship sedan at its annual customer event on Saturday, with the car set to go up against Porsche AG’s Panamera series and Mercedes-Benz Group AG’s luxury S range.
The four-seat executive sedan, dubbed the ET9, is expected to begin shipping in the first quarter of 2025 with an estimated starting price of around 800,000 yuan ($112,000). It is more expensive than Tesla Inc.’s Model S, which starts at 698,900 yuan in China.
…
The company’s gross margin fell to 1% in the second quarter before recovering to 8% in the three months to 30 September. The company is on track to deliver about 159,000 vehicles this year — less than two-thirds of its original target of 250,000. Its market value has tumbled nearly 40 percent from a recent peak of $27.5 billion in August.
The firm aims to cut costs by about 2 billion yuan in 2024. It has also signed partnership agreements with domestic automakers, including Chongqing Changan Automobile Co. and Geely Automobile Holdings Ltd., for its capital-intensive battery replacement business and will move production entirely in-house, which could help cut production costs by 10 percent.
I can see the thinking at NIO – profits are down so why not start making higher margin cars? That’s a bold move, Cotton, but let’s see how it works out for them. Perhaps NIO can do what Lucid is struggling to do.
3rd gear: CES is moving away from electric cars
Last year, CES was huge for electric cars. Every automaker and their grandmother had a booth, all debuting the latest in electrification technology. Cars were going to be the next big thing in consumer technology, with all the subscription services and data sales that came with that. Unfortunately for automakers, consumers seem to be more interested in cars as a “way to get around” than in any kind of one-stop service, work, transportation, entertainment. Accordingly, automakers are taking a different approach to CES. from Automotive News:
News of electric vehicles and charging made a splash at the tech show CES 2023. But their presence this year reflects what’s happening in the auto market – slowing growth.
At CES in 2024, EV announcements are expected to slow to a trickle.
Last year, Mercedes-Benz announced that it would build its own charging network. Volkswagen unveiled the ID7 electric sedan, and Sony Honda Mobility, a joint venture between the companies, unveiled the Afeela EV prototype.
“It was the show for electric cars. That doesn’t appear to be the case this year,” said Nathan Nees, associate director of electrification at Boston Consulting Group.
This year’s show will feature a new global EV lineup from Honda, the only automaker that has said it will have big electrification news.
Otherwise, Blink Charging plans to exhibit. Other major charging companies such as EVgo, ChargePoint and Electrify America say they will not display or announce news at the show.
Many of these companies, especially EV charging brands, are still working on delivering on their initial promises. Maybe it’s best to get your core product in order before you start making those big One More Thing announcements at trade show keynotes.
4th gear: The automotive market is getting bored with unproven, incompetent AI
AI is the current buzzword in every technology field where it is expected to revolutionize every single career and make workers obsolete. According to Silicon Valley types, you either work on coding AI or die in the ditch, like Rocco’s very devious Basilisk. However, more established businesses seem to be cooling off on technology. from Automotive News:
The auto industry sees huge potential in artificial intelligence, looking to it to play a role in predicting when vehicles might break down, monitoring driver behavior, providing automated driving assistance and improving customer service.
But as the industry prepares for CES in Las Vegas later this month, gone are the high stakes and lightning-fast timelines for promising new technologies like AI.
High interest rates, tighter access to capital and general impatience among investors and customers have changed things. Expectations for automotive AI have come back down to earth.
Good to see another indicator that the AI thing is another fantasy based on free money for Silicon Valley. The underlying technology is simply too rudimentary, too unreliable, and too unreliable to be taken seriously.
