YOU CAN’T ALWAYS GET WHAT YOU WANT.

By Peter M. DeLorenzo

Detroit. Wishing things would go better - and faster - through this pandemic is a fool’s errand, apparently. Things will unfold at their own pace, whether we want that to be different or not. The slow re-openings are going to feel painfully slow, but as far as I’m concerned, I’m good with it. 

I’m in no rush to get back to the way things were, frankly. It’s as if the entire country needed a much-needed timeout – from everything – to take stock, to be reminded of what’s really important, and to become reacquainted with the fragility of life. But there is no doubt that the way this “break” unfolded has been nothing but tragic. The death count is almost incomprehensible, and the economic calamity grows by the day as well. So, to pretend it’s somehow all sweetness and light is unwarranted positivity, at best. But press on we must.

So, I thought I’d craft a wish list of how I’d like to see things go in this “grand reawakening.” Some of it will be car industry specific, of course, but some of it will be life specific too.

I would like to see the end of usurious financing in the auto industry. I know, good luck with that. Every time this business faces a crisis, the auto manufacturers somehow deem that the return of 84-month financing to lure unsuspecting buyers in is an unspoken right, and it is flat-out wrong. They should rename it “Upside Down Financing” and be done with it, because it exploits buyers who unfortunately should know better into signing up for a loan on a vehicle that will ultimately be worth less – much less – than what they owe on it half-way through the term. Sure, for the small percentage of buyers out there who keep their vehicles ten years or more it might make a shred of sense, but for the vast majority of buyers in question it means signing up for financial jeopardy right out of the gate. And it’s unmitigated bullshit.

I would like to see more of an emphasis on recycling on a national basis. One thing I have noticed with this giant “stay at home” initiative is that the streets and sidewalks around here are much cleaner. Let’s face it, it’s human nature in this most consumer of consumerist societies to use. Everything is consumed at a furious pace and with little rhyme or reason too. My mom used to rail about the “gross national product” being just gross, and now I realize she was way ahead of her time in her thinking. She was recycling long before anyone else too. Is this perspective an indictment of our capitalist/consumerist society? Oh, hell no. We are who we are and it is part of who we are as a country, there is just no getting around that. But maybe it would be a nice break once in a while if we didn’t leave a trash heap in our wake wherever we go, or after every event. I just find it hard to believe that some parts of this country still don’t have a cohesive recycling program at this juncture. How can this be? Is recycling inconvenient and costly? Yes, but in my estimation, it is more than worth it. I would like to see this country step up to a national emphasis on recycling, and that means everything – especially with packaging materials – should be up for renewed scrutiny. I have been reminded during this forced break that we live in an incredibly beautiful country, and there have been countless examples of that through breathtaking photos taken from across this great nation appearing in social media. Ignoring our environment and our place in it has grown tiresome, and it is not a good look. Will this ever change? Unlikely, but there’s always a shred of hope.

Speaking of the environment, will the electrification of our vehicle fleet ever become a reality? Stepping away from the debate as to the source of electricity used to charge electric vehicles for a moment – predominantly coal-fired power plants* – and the fact that a large faction of people continue to insist is exactly the reason that electric vehicles don’t deserve the accolades that electric vehicle advocates ascribe to them, the move to electrification for our nation’s fleet is going to gradually pick up speed. The initial electric vehicle selection is going to be pricey, unfortunately, which I believe is counterproductive to gaining consideration from consumers, but this will change over time. The Chevrolet Bolt is still a most attractive package in terms of overall cost and performance (although the nonexistent marketing for the Bolt damn-near made it invisible), and if we see more of that class of electric vehicle, I think consumers will be swayed. Sure, the high-roller electric cars are cool and everything, but that’s not even close to the heart of the mainstream market, and incentives will need to return to the BEV space to jump-start consumer interest. The more exposure consumers get to BEVs, however, the more the desire for this type of vehicle will grow, but there’s no doubt that cost will remain the biggest consideration for the foreseeable future. Another interesting aspect of these quarantine times we’re living in, however, is that people have been driving much less than before. And now, a 225–300-mile range for a BEV doesn’t seem to present an obstacle at all for a lot of people. (And there’s no doubt that the general lack of inactivity contributed to a massive 17 percent reduction in global greenhouse gas emissions too, it was just announced on Tuesday. This brief but welcome dip is expected to be erased as soon as the activity resumes, but it is noteworthy nonetheless.) This will definitely be interesting to watch, but the net-net of this is that BEVs are coming, folks. And in a big way. (*As several readers have pointed out, coal-fired power plants are rapidly disappearing, which is a very good thing. -PMD)

So where does the auto industry go from here? When the economy slowly comes back to life, crossovers, trucks and SUVs will continue to hold sway for most consumers, and for myriad reasons. Gas remains relatively inexpensive, ingress and egress with these vehicles is vastly preferred by an aging population, and let’s face it, American consumers like larger vehicles. They just do. And thus it ever was, in fact. 

Economy cars will hold steady simply because of the price point, and as I’ve said repeatedly, affordability will grow more crucial by the month in this business. As for those manufacturers that suggest that their used cars will cover the affordability issue, well that’s simply not going to cut it. My prediction? The first manufacturer that addresses the affordability issue with a BEV is going to win big. But fans of sedans will continue to see their choices reduced, as sedans fade in importance and from view. That ship has sailed, unfortunately.

Super-luxury and luxury high-performance cars will continue to roll along in their very specific niche, but the price of admission to that club is going to continue to go up exponentially. It seems that the price of individual expression and swinging dick-ism has been a part of this business almost from the beginning, and that isn’t about to change anytime soon. 

As for the Big Picture for this business, it’s clear to me that some auto manufacturers – and suppliers – aren’t going to make it out of this pandemic alive. And as I’ve said previously, significant consolidations and absorptions are on the horizon. Some of them will be minor to be sure, but I expect some of them will be earth shattering as well. This industry is headed for an undeniable rocky road, and on several fronts too.

As for the Autonomous Vehicle space, it will remain a limited play for far down the road, much to the chagrin of the players who continue to dump millions upon millions into the idea. Make no mistake, the idea of consumers embracing these communal auto pods in a post-coronavirus pandemic environment is pretty much laughable. It is just notgonnahappen. dot. com.

As we come out of this purple-quarantined haze, I am hoping that things will not only be better, but that they will stay better. I am hoping that lessons will not only have been learned but taken forward with a renewed sense of purpose. I have my severe doubts, to be sure, but I at least hold out hope for a better day.

Because as Mick and Keith wrote: You can’t always get what you want, but if you try some time, well, you might find, you get what you need. 

I sincerely hope that’s the case. For all of us.

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