Tesla is chipping away at the old guard as General Motors tries to learn some lessons from the new one. All that and more in The Morning Shift for Wednesday, January 12, 2022.
1st Gear: It Was Always “Lexus, BMW, Mercedes”
The designation of the best-selling “luxury” car brand — a title that makes less sense to me than ever before, considering the average price of a new full-size pickup is $56,000 — used to rotate between those three names. It’s been this way as far back as I can remember.
New data from Experian, by way of Automotive News, suggests that Tesla’s on pace to blow past them all.
The November numbers bring Tesla’s 11-month registrations to 303,246, Experian said Tuesday. BMW registrations for the same period were 318,182 and the German automaker reported total 2021 deliveries of 336,644. Sales and registrations, however, don’t track perfectly since a vehicle can be sold in one month and registered in another.
Tesla reported global deliveries, or completed retail sales, of 936,172 vehicles, for an 87 percent gain over 2020. It does not break out its U.S. sales, so registrations with state governments serve as a proxy for nationwide results.
The Experian data shows Tesla surging near year’s end. The automaker added 42,314 registrations in November. A similar performance in December would put Tesla ahead of BMW’s reported 2021 sales. Experian’s full-year registration data is expected next month.
It must’ve been midway through 2020, when the most “outside” anyone could be was in their car, that I started noticing the sheer number of Teslas on the road. The brand’s growth in such a short time is really astonishing, regardless of what you, I, or anyone thinks about the ramblings of its CEO or its flippant attitude toward safety or the latest controversial thing it’s attached to this week.
Part of Tesla’s success — particularly within the last year and a half — is owed to the company’s ability to shrug off the semiconductor shortage that’s bottlenecking everyone else’s manufacturing. The company was able to swiftly port its software to run on newer chips, something its more long-established contemporaries have struggled to do. With supply chain woes expected to ease up ever so slightly but still persist heading into the latter half of 2022 (stay tuned for more on that), if things continue the way they have, we very well could have a new year-end luxury leader come December.
2nd Gear: The Next Trend Is Everyone Starting Their Own Carvana
Meet CarBravo. It’s GM’s new used-car shopping platform, though it won’t be exclusively for GM cars. It will also be a way for the company to push subscriptions to its services and shift off-lease GM Financial inventory. You kind of have to wonder why they didn’t try something like this sooner. From Automotive News:
Carvana and other digital used-vehicle platforms “gave us an opportunity to to learn a lot,” [GM North America president Steve] Carlisle told reporters Tuesday. “CarBravo would be more than competitive.”
Chevrolet, Buick and GMC dealers can enroll immediately, and the consumer launch is expected to begin this spring, GM said. Cadillac is developing a separate program, Carlisle said.
The platform will list GM and non-GM vehicles from dealership lots across the country and off-lease vehicles owned by GM Financial. Today, GM dealers have about 400,000 used cars in their inventory, and GM sells more than 500,000 GM Financial-owned vehicles annually.
Eligible vehicles will come with trials of OnStar and SiriusXM radio. GM hopes that broader access to its in-vehicle features will increase subscriptions, Carlisle said.
Then again, I totally forgot that Ford launched a version of this last year, called Ford Blue Advantage, and you never hear it talked about. If I had to make a guess, that may be because “Ford Blue Advantage” sounds like the oil change/tire rotation/windshield wiper fluid package they relentlessly push at the service center. It’s a horrendous name. “CarBravo” is a little better, in that it at least doesn’t inspire me to run away. It’ll supposedly launch this spring.
3rd Gear: Back To Sales And Chips
New car sales are projected to rise merely 3.4 percent in 2022, and you can guess why. From Bloomberg:
U.S. auto sales will climb just 3.4% this year to 15.4 million cars and trucks as the semiconductor shortages continue to constrain vehicle inventory, auto dealers predict.
The National Automobile Dealers Association, which represents 16,000 U.S. car retailers, said the lingering chip shortage slashed inventory on dealer lots by 59% in December compared to a year earlier. The organization said it expects inventories will remain diminished into the second half of 2022.
Before 2020, more than 17 million cars were sold in the U.S. per year for the previous five years.
The twin crises of the pandemic and the semiconductor shortage have taken a toll on U.S. auto sales, which totaled 14.93 million last year, up 3.1% from 2020, when lockdowns hit the economy. Prior to the pandemic, the U.S. auto market had a five-year run of sales topping 17 million. The dealer group said inventory is “slowly improving,” but noted the chip shortage cut global auto production by 11.3 million vehicles.
I don’t know what to say anymore. What can you say anymore?
4th Gear: 2022 Will Be An Important Year For Rivian
The electric pickup and SUV startup didn’t quite meet its goal of 1,200 vehicles built by the end of last year, landing at 1,015. It also just lost its COO, Rod Coates. It started trading in November, surging to a peak of $179 that month which was more than double its initial public offering, before briefly dipping below it earlier in January.
Rivian has experienced a topsy-turvy few months, to say the least, but Financial Times reminds us these are still early days:
Choppy stock moves are unlikely to settle in the near term. It is not easy to pin a value on a company that is part of an industry-transforming revolution but is at such an early stage. Tesla’s shift to profitability has given the entire electric vehicle maker sector a boost. But Rivian has only just begun to make vehicle deliveries. It reported revenue of a mere $1m last quarter and is forecast to remain lossmaking for at least the next four years.
The good news is that the latest developments have not veered the company completely off course. COO Rod Coates’ exit should have been flagged to investors more clearly but it has been staggered to help continuity. The production miss was also small. Last year Rivian produced 1,015 vehicles instead of the planned 1,200. The shortfall is not enough to prove it will fail its target of 1m vehicles per year by 2030.
Between the Amazon deal and surging R1S and R1T orders, Rivian’s real test will be if it can scale production appropriately over the coming years, the article adds. A new factory in Georgia will help that, once it’s up and running. None of this is earth-shattering news, of course, but it is a reminder to keep an eye on the brand. These will be the make-or-break years.
5th Gear: The Neverending Struggle To Bring Back The Detroit Auto Show
The Detroit Auto Show was going to move to the summer in 2020, until the pandemic canceled all trade events. Then they tried to replace it with a weird outdoor thing billed as “the future of car shows” called Motor Bella, which was received with mixed opinion. Evidently that experiment’s over, because organizers are working to bring the North American International Auto Show back in September, title and all. From Automotive News:
The head of the North American International Auto Show on Tuesday said the 2022 show will take place Sept. 14-25 in downtown Detroit.
Rod Alberts, executive director of the Detroit Auto Dealers Association and the NAIAS, confirmed the dates during the 2022 North American Car, Truck and Utility Vehicle of the Year awards presentation.
Press and tech days will take place Sept. 14 and 15. The annual Charity Preview, which raises millions of dollars for Detroit area nonprofits, will happen Sept. 16. Public days will run from Sept. 17-25.
Personally, I’ve never been one for trade shows. I was supposed to go to CES this year until that plan spectacularly exploded, and I can’t say I feel bad about it. But in some cases — and for Detroit especially — events are tied to a city’s identity, and it’s sad to see one of the biggest industry moments of the year dissolve in the way NAIAS has. I hope they pull it off, but these days it’s probably best to expect nothing. Also, it’s always more important that people don’t get sick.
Reverse: America’s Car Loses America’s Flag
The first Corvette was revealed on January 17, 1953, giving you a nice preview of what might be in the Reverse section of The Morning Shift next week. But days earlier, on January 12, the design team was made aware that the car’s logo had to change. Originally it incorporated an American flag, which was illegal to use for branding purposes at the time. Instead, GM went with the checkered-and-red bowtie/fleur-de-lis combo.
This is apparently still true of flag code today, but I feel like nobody respects it anymore. I’d argue the duo of flag badges on today’s Jeeps runs afoul of this rule, as well as every “Made in USA” sticker attached to any product ever.
Neutral: Should We Talk About The Weather?
Or just the government? Nah, weather’s probably better. I typically don’t do more than one of these a week, and the other guys are on vacation, so yeah — let’s go there.
It’s fucking cold. Last night it was 14 degrees here in Pennsylvania. This is the absolute worst time of the year, when the holiday afterglow has dissolved and you feel trapped inside and like you can’t go anywhere or do anything. You almost don’t want to, even though you know it’d be good to get out, cause it’s so damn frigid that it seems like too much work to walk out the door. How are you managing? Can you tell I’m not?