Anyway, onto the car news for Friday’s Morning Dump: We’re talking about Mercedes-Benz’s new EV charging network, BYD’s new luxury brand, and Tesla’s new discount offers in China. Let’s get this knocked out before the FBI shows up at my house with a warrant.
Mercedes Puts Its Money Where Its Mouth Is
Say what you will about Tesla, but I believe there are a few things that company has done extraordinarily right over the years. Near the top of the list is building out its own Supercharger network. With its ubiquity across the country and incredible ease of use, nothing has done more than that to spur widespread EV adoption and ease range anxiety. So what if it’s only for Tesla users (although that’s changing soon)? That’s capitalism, my darlings. It was a smart move that proved the EV case writ large and got tons of Tesla cars on the road. We need more OEMs to step up in the same way. Now, one of Tesla’s direct competitors, Mercedes-Benz, is doing exactly that. At CES yesterday, the German automaker—in the middle of a big EV pivot of its own—announced it will build its own network of high-speed public EV chargers. Here’s what the automaker had to say: But is it only for cars from the Silver Arrow brand? Not so; but here’s a good compromise: “The network will be open to all electric vehicle brands, but Mercedes-Benz customers will enjoy special benefits, such as the ability to reserve a charging spot.” […] Depending on region and location, the hubs offer four to 12 – and ultimately as many as 30 – high-power chargers (HPC) with up to 350 kW charging power. Intelligent charge-load management allows each vehicle to charge at its maximum capacity, keeping waiting times to an absolute minimum. I think that’s a smart approach. It hopefully helps to spur wider EV adoption, opens a whole new business line for Mercedes, and takes care of the existing customers. The goal is to have more than 10,000 high-power chargers set up across North America, China and Europe by the end of this decade. Some will have solar-powered lights and security features as well. One potential downside is that at least in North America, Mercedes is partnering with ChargePoint “on other technical aspects of the hubs and chargers.” I don’t know if you know this, but ChargePoint typically sucks. It makes most of its money selling maintenance contracts, not selling electrons, so its quality can vary wildly depending on whether that site owner is paying up or not. Generally, the EV charging experience can be ranked thusly: The ChargePoint station closest to my house in upstate New York is usually buried behind a 10-foot combined pile of snow and street garbage. One hopes that an actual, classy company like Mercedes will make sure this third-rate crap doesn’t happen under their own flag. [Ed note: The four ChargePoint stations at the actual Mercedes dealership down the street from me have never worked and are usually blocked by gasoline cars, so… – MH]
BYD Unveils Its New Luxury Brand
Of all the Chinese car brands you maybe haven’t given much thought to, BYD probably deserves more of your attention [Ed note: I keep trying! -MH]. If—and this is a huge if—you count plug-in hybrids, BYD is the biggest manufacturer of electric vehicles on the planet. Bigger than Tesla. If you count PHEVs, which it does. Either way, it’s a big deal. It’s backed by Warren Buffett and it has designs for the rest of the world soon. How do you know it’s a real company? Because BYD’s already doing the Lexus thing and announcing its own premium luxury brand, which will be all-electrified. It’s called Yangwang, and it debuted this week with an electric supercar and a hybrid off-road SUV you see above. That looks a LOT like a Land Rover Defender, but it does moonwalk:
— The Autopian (@the_autopian) January 6, 2023 More on that later today. For now, here’s the Nikkei Asia on BYD’s Yangwang: I’ll spare you the conversion math and let you know that’s a lot more expensive than BYD’s normal offerings, which normally fall in the 100,000 yuan to 200,000 yuan range, according to that story. The U8 features technology that can control each of the four wheels separately with independent motors to enhance stability and safety. No official price or release date was announced. The company had previously said that Yangwang models would be priced at 800,000 yuan to 1.5 million yuan ($116,000 to $217,000) and would be released sometime this year. Showrooms for the luxury vehicles will be set up in six major Chinese cities, including Beijing and Shanghai. Will BYD come to North America? Last year when I was talking to them, that answer was a resounding yes. But with recent changes to how EVs get sold under the Biden Administration’s Inflation Reduction act, BYD seems to be backing off U.S. sales a bit. It still plans to build a battery plant here in America, so that could be seen as a first step. Either way, when you consider the global auto industry, this one’s a serious player now.
Tesla Cuts Prices In Asia
As an example, BYD and other Chinese homegrown EV brands are starting to eat Tesla’s lunch in China. COVID-related lockdowns and production stops are hurting the whole industry there, but like in America, Tesla now faces a raft of competition. Amid this dipping demand, Tesla is now slashing Model Y and Model 3 prices in China (for the second time in less than three months there) as well as Japan, South Korea and Australia. This comes to us from Reuters: Normally, price slashes aren’t what premium, in-demand automakers have to do, but Tesla’s had to resort to this across the board. In the U.S., it cut prices on those two cars by $7,500 at the end of 2022, and now many of its models qualify for the EV tax credit again, so hopefully, that should help. Grace Tao, Tesla’s vice president in charge of external communications in China, said on Weibo that the price cuts in China reflected engineering innovation and answered Beijing’s call to encourage economic development and consumption. Deliveries of Tesla’s China-made cars hit their lowest in five months in December. Tesla’s Shanghai plant, which was expanded last year, also exports vehicles to Europe. I’ve written about this elsewhere, but my view is that 2023 will be the first real test of Tesla’s ability to stay a leader in a market it effectively created. It is not to be underestimated; it’s too big and too powerful to go down easily like the doomsayers claimed it would for years. But the situation reminds me of the Burly Brawl in The Matrix Reloaded, where maybe Elon is Neo (which is absolutely how he thinks of himself now) and the dozens of Agent Smith copies are Hyundai, General Motors, Mercedes-Benz, Kia, BYD and so on.
I should rewatch that one. It’s not as good as the first, but I remember liking it as a kid.
The EV Race: Who Ya Got?
Who comes out on top in the EV arms race this year? How about five years? Ten years?
Great, now I’m saving money! Okay, let’s sign up for all these online streaming platforms. Oops, now I’m not far from paying what I paid for cable. Now let me find the show/movie I want. Crap, I don’t remember what platform it’s on. I really wish they could consolidate everything together so it was easy find because it’s so disjointed now. Oh yeah, I guess that’s kinda what cable was! Basically taking an existing experience and making it more difficult in the name of “choice.”
I don’t have to seek out only Mazda branded gas stations to fill up my car today, but it kinda is like that for EVs currently. But I realize that as time and technology march on these problems will likely be solved.
In ten years the brands you already know are going to be right where they were before the EV shift happened. The startups may not realize this, but the legacy OEMs know a thing or two about building, distributing and selling cars. The real fun thing will be to see where Tesla settles in.
Fast forward 35 years and here we are with them being a major player.
The Hyudai difference is they were already a large manufacturing company when they broke into the U.S. market. While not experts on cars, they had a lot of experience building stuff and were well-financed.
Canoo has sprung from what, exactly? Everyone wants to be the next Tesla, not understanding that Tesla was a unique case of moving into an empty space in the market at exactly the right time. That time has passed. And remember it was pretty sketchy for Tesla for a long time there.
The main thing that will keep these companies in the mix is credit. It’s why nobody frets Polestar being a flash in the pan, even though they sold 1/10 the vehicles Rivian did last year. BYD will never want for ctedit as long as Berkshire Hathaway is a sizable investor. There’s a reasonably good chance that in 10 years an EV company that doesn’t even exist yet is a major player through consolidation or acquisition and a current titan like Tesla is an also-ran since they can’t update a model or bring new products to market reliably.
- You get a tax bill every year equal to the “annual average miles driven / average MPG for the ICE equivalent vehicle * the gas tax”. This keeps the government out of your odometer and makes tax time as simple as paying a regular bill. Let the griping begin about how to calculate the ICE equivalent!
- An EV owner chooses to have their mileage tracked and is charged appropriately based off miles actually driven. I would probably choose option #1 since my annual mileage is slightly lower than average but not low enough to make the odometer tracking worth it. Option 2 may require the vehicle manufacturers/service centers to send the odometer data directly to the tax man. Everybody complains about the gas tax, but The think it is about the fairest tax out there, it is charged to those who use the service created financed by the tax roughly in proportion to use The downside is that tracking mileage adds more work and more data being tracked. I think vehicle weight is an easier way and still accommodates additional wear, though the difference in additional wear from mileage vs weight might be significant. It’s difficult to exactly replicate what gas tax does, as far as rewarding efficiency while essentially taxing use. Washington did talk about doing a mileage-based fee, and there were objections based on how many miles were driven out of state, but I suspect broad adoption of mileage fees would reduce or eliminate that. My heaviest vehicle (much heavier than an average car) theoretically puts out 1000x less road wear per mile than a fully loaded semi. Combine this with the obscene number of miles those semis are driving and it’s looking like I should be paying thousands of times less to maintain interstates and state highways, and 1000x less PER MILE. Plus I am of the belief that rail should be used more for both freight and that it is the answer for autonomous vehicles. No, we need to ensure standardization and let car companies make cars while other companies provide chargers. I don’t go to the Chevy gas station or bring an adaptor to ensure I can fill up with a Honda nozzle. And it should be relatively easy to build more charging stations, since you just need to be on the electrical grid, unlike gas pumps and their large underground tanks. Still going to be a question of whether the grid can scale up as quickly as demand warrants, but at least the plug would fit from the dead charger. At a minimum, these companies should be spinning off independent subsidiaries for charging networks. They should operate independently of the automaker and not favor the automaker’s vehicles. They could bring in extra money for the parent corporation without the pressure to drive brand sales. Honestly, if a company like Electrify America wanted to simply sell chargers instead of operating a service, it might actually lead to better results. If they have full control over the charging pricing, the maintenance, and get all the profit after the initial purchase is paid off, companies might be more motivated to be the place that always has working chargers. “Eat at Applebee’s–we always keep our chargers working and affordable!” As far as the standardization issue, we do have a de facto standard, but that doesn’t mean companies aren’t trying to decide whether to install a Tesla charger or a CCS (or deciding whether either one is future-proof). If the industry or the country offered a defined standard, at least those making and/or running charging stations could feel secure in offering it. We could also use standardization in terminology beyond Levels 1-3. There is a significant difference between 50 kW and 350 kW, yet both are Level 3. The correct terminology is not level 1-3. It’s level 1, level 2 and DC Fast Charging but you are correct that calling 50kw the same as 350kw is confusing. If there is a defacto standard it’s Tesla as there are far more of them however companies like EVGo install chargers with CCS and the Tesla connector (NACS) already and others could follow or Tesla could transition like they did in Europe but that would take a literal act of Congress to require it. I also really hate that all these chargers want me to download apps and create charging accounts. Just let me pay with a card. Gas pumps do it. Vending machines do it. Hell, even phones can accept credit cards. I don’t want to have 18 charging station accounts just in case I want to charge somewhere new. And hot damn, we need better maintenance all around. That’d fix the uptime status issue of “I just got navigated to a broken charger” to be at least on par with, say, GasBuddy, where it isn’t the norm to get sent to a station with three out of four pumps out of service. One should not just be able to go “we installed a charger” and leave it broken for months or months. Also, put those suckers in well-lit spaces where I don’t feel like I’m gonna get stabbed waiting on the car to do its thing. This isn’t a niche thing that can just be shoved to the edge of the parking lot. I spent too much time at the stupid mall near last week by sheer merit of it having well-lit, close-in chargeholes for the PHEV tester I had. This is absolutely right, and I think that some of this comes from the weirdness of the shared business venture. The charging companies and the locations that take them on end up pointing fingers at each other. “Well, we let Chargepoint put in chargers. It’s not our fault that they aren’t working.” “Well, they didn’t report their chargers not working, so we didn’t check connectivity and see they weren’t communicating.” I don’t know if the solution is companies selling charging stations and perhaps separate service contracts to businesses, but it feels like that would at least be better. I work at a company that has a bunch of elevators. We own them. If the whole car or mechanical assembly needs to be replaced eventually, we pay for that. But we also have a service contract for all the maintenance and repairs that need to be done regularly. If the service company fails to meet its obligations, we charge back penalties to them. If we abuse the elevators, they charge us for repairs beyond the scope of normal usage. The contracts actually stipulate things that encourage everyone to maintain and use the elevators properly. (Or just buy me a Taycan. I’m okay with that, too. Haha.) I have a Chargepoint Home charger, and it’s on its 4th replacement in 3 years. Thankfully all under warranty, but it doesn’t exactly inspire confidence… Also, I completely agree that stations that require an app are insufferable. I don’t know why these companies would require users to download an app. It seems like it isn’t the best business decision. I presume they could sell more electrons (and make more money) by allowing anyone with a credit card to use their stations. Still, I do hope the charger network increases that much. Only means good things. I think they’ll continue to grow the SC network as V4 and the Cybertruck hit. They’re going to need way more pull through spaces, at least. Despite all the attempts by Musk to prematurely kill the company, they are currently doing ok. However the other manufacturers are coming. Its been projected by multiple people that they’re going to be dropping down to about 20% or less market share within the next 5 years simply because of the legacy folk gearing up and putting out cars. If they continue to mis-step, if they don’t start innovating again with actual design improvements that do what they’re supposed to… Tesla needs to change something or one of the other guys is gonna eat their lunch. They have free L2 charging, but they do charge for DC fast charging “Generally, the EV charging experience can be ranked thusly: Tesla Supercharger Just driving a fucking gasoline car Electrify America” Please take this with a grain of salt as it is an anecdote and not a scientific study, I’ll probably also mis-state an item or two, or make some other human mistake. I’m fairly stressed today and taking 5-10 minutes to BS on this site is about the only way I’ve been able to escape. As an engineer that has dealt with Chinese manufacturing, I disagree. The problem isn’t necessarily with Chinese manufacturing, but with the specifications sent with the documents for the parts. A language barrier doesn’t help matters By that I mean: American manufacturers will look at drawings or specifications and will push back. They’ll question things, they’ll say “hold on, this part is for a Frabblewacker. That’s a high end whosit, did they really mean to make this bracket out of 1050 aluminum? Let’s ask real quick.” and then the Frabblewacker engineer will say “shit man, you saved my bacon, that should be 7075. I’ll send you updated drawings tomorrow.” and all will be well and all manner of things will be well. However, that same drawing getting sent overseas will just end up being made of 1050. You’re paying them for speed as much as for parts and they don’t care if you fucked up cause that just means you have to send a new order in. The American factory typically has someone that will be somewhat familiar with the product (you usually get that because American manufacturers tend to survive and grow off of brand loyalty, becoming familiar with what your customer needs breeds a better relationship and better product for both parties.) Where the Chinese factory might not even register the company beyond making sure the boxes are packed properly and the shipments are going to the right place. Its not a failing of one group or the other, its just the nature of working with a domestic manufacturer vs a manufacturer where they might be installing suicide-prevention nets on their factories. Culture clash, you might call it. I’m very biased towards American companies, not just because I’m American and would like to see more manufacturing jobs come back here, but because I’ve been an engineer for smaller companies (or large companies that have US-Made requirements) so I ended up dealing with mostly American based companies. The few times I have dealt with Chinese manufacturing shops we’ve had to do extensive testing on products to ensure that the batches they were sending was up to our quality standards. I’d love to hear if my experiences differ from other engineers that have more widely dealt with Chinese suppliers. They are 100% capable of turning out precision, high quality parts. It is a point of pride. And the very microsecond you look away, they will immediately replace your very specific iron alloy with slag and sand. Literal slag and sand. That is not an aberration or an abnormality; nothing is immoral in the pursuit of profit, doubly so when dealing with non-Chinese. And when you catch them doing it, when you have incontrovertible proof, they will deny it. Because they know you can’t do a damned thing about it. Sure, you can take your business down the road – which we did – and they pulled the exact same thing. You can take them to local court – which we didn’t – where the judge will say you didn’t file correctly or your attorney can’t represent you or what they did was perfectly legal. So you do what we did, and you send some Americans over there to work ‘alongside’ them and make sure they don’t screw you over again. And they’re just fine with this. You don’t trust them, they don’t trust you. But then your employee calls you and says that tooling has gone missing. Missing how? These are several thousand pound molds. Nobody is walking off with them. Yet they are definitely missing. But then they turn back up. It’s a busy shop, there’s a bunch of these things, they weren’t in use, probably just somebody was mistaken and they were at a different spot on the floor. Yes, surely that was it. And then some shop you’ve never heard of is turning out parts precisely identical in appearance to yours, using far lower quality material, but at less than half the price. They didn’t even bother to file off the maker’s marks. And then another. And another. So you tighten down things HARD. You send more people to supervise the shifts and designs. You don’t let the Chinese handle anything they don’t strictly need to, you only let very specific employees see drawings, and you store anything on a server that they have no access to at all. Because you have to come up with a new part, because you can no longer compete on price even with the cheap labor. Anything you send over has to be electronic only, encrypted in transit, and stored on a secured server that the Chinese staff is completely denied access to. And you know what happens then? You get a call from your overseas Americans in the middle of the night in a panic, because the local “authorities” just showed up, demanded passwords they don’t have, and hauled off not only the server, not only their laptops, but also their passports. “Server? What server?” “They illegally overstayed their Visas.” “Server? What laptop?” “Their Visas didn’t cover the work they were doing.” “Laptop? What server?” “We’re deporting your people. Unless you pay us a bribe.” “What server? You have to give us the password. But we don’t know anything about a server.” “We’re deporting your people for using the Internet illegally.” And it has only gotten orders of magnitude worse since. Things that are mechanically complex and must meet stringent safety standards are IMO best kept produced in countries that are not incredibly corrupt, genocidal, and whose governments do not have their fingers in every aspect of everything. Also, our customers were creative. They’d always find some new way to do some dumb shit and break our stuff in interesting ways, so we’d sometimes have to implement new tests to simulate their dumb shit. I think they can probably make cars just fine. I’m more worried about consistency and material quality. A ton of their technology has been obtained through industrial espionage as well. The most prominent example is that they still can’t make jet engines very well. It’s almost like they are decades behind in manufacturing technology in a lot of cases. “installing suicide-prevention nets on their factories” Their manpower is also an issue. They are making approximately an order of magnitude less money than Western workers (Some sources say way higher but this is obviously BS). Problem we ran into was they’d send ALL of a batch, didn’t matter if the die was cold, if the plastic hopper was running low, or whatever. We’d get handles that could be damn near half the weight they should have been due to the air voids within them. We were able to use some of them for displays and promotional shoots, but we couldn’t sell them to customers. I left before we fully wrapped the solution up, but we were discussing a weight requirement for the handles when I exited the company. Industrial espionage, consistency, quality, manpower, etc, all those are also reasons why I’m biased towards American manufacturers (not that China has a monopoly on those failings) Also: Normally, price slashes aren’t what premium, in-demand automakers have to do, but Tesla’s had to resort to this across the board. This is because Tesla isn’t a premium brand. They convinced the world that they were, but in reality they’re a typical manufacturer that has had a near monopoly on an exclusive product for the better part of a decade. Now that the monopoly is ending, that false belief that they are a premium manufacturer will also end. Or they’ll step up and actually do something worthwhile with their vehicles instead of allowing the drivers to make fart noises with their cars. I also believe that Tesla is going to be tested in the near future. I’ve been saying for about two years now that they are stagnant and if they don’t start to innovate again they’ll end up being bought out by one of the established manufacturers within 10 years. Now is the time to see if they are going to innovate or double down on Musk’s idiocy. BYD has had an EPA certification for their e6 crossover from at least 2013-2020, and at least two have been spotted on plates in the Chicago area over the years by my local spotters’ group, that I can recall. I also once saw one in person at a small EV-specific Chicago dealership circa 2012 or so. The owner of the dealership told me they were going to be hitting the market soon and he was going to be selling them. I also remember once reading that they had struck some sort of deal to sell e6’s to Uber drivers. However, I’ve never been able to find out on my own just what they’re up to with the e6 or what their intents are/were, despite these noted events. So could you go back to your contacts and ask them what’s up with the e6 and about how many might be prowling our U.S. highways? Because it’s been a mystery to me for at least a decade and I would find it quite interesting. Why maintain a certification for a car for nearly a decade if you weren’t ever going to market seriously with it? (Cock of the Dong, of course.) And I assume Mercedes (person) would not restrict her mobile charging solution to a brand, since (to my knowledge) she is not an EV manufacturer. But hey, the charger looks really cool and it’s super small!
