THE JUICE. AND THE ASSUMPTIONS MADE.

Editor's Note: This week, Peter talks about "The Juice" and the (mostly wrong) assumptions made in pursuit of the "Grand Transition." In On The Table, Peter comments on the UAW conquering VW's Chattanooga plant, an in-the-flesh assessment of the Cybertruck (it's Not Good), a look at the new AMG GT 63 S E Performance from Mercedes-Benz, and another look at the new Camry Hybrid, which is destined to crush its segment - again.  And our AE Song of the Week is "Roll With It" from Steve Winwood. In Fumes, Peter continues with Part III of his new series "The Racers" – this week featuring the "Flying Scot" - Jim Clark. And finally, in The Line, we'll feature the INDYCAR results from Long Beach, F1 from China, IMSA from Long Beach, the RRDC celebration of Jackie Stewart, and another look at the MotoGP from Circuit of The Americas, with expert on location commentary from Whit Bazemore. Enjoy! -WG

By Peter M. DeLorenzo 

Detroit. It’s hard to imagine the automobile business being distilled down to a fundamental need for electric juice, but here we are. And the questions revolve around how it’s generated, where it originates from, how it’s stored, how it’s delivered, how it’s replaced, how it’s moved around and of course, how it’s priced. And even though the ICE Age will be around for decades to come, and despite the fact that the challenges and fundamental logistics around reinventing our transportation system are endless, the burgeoning inevitability of the Grand Transition to mass electric propulsion for our nation’s fleet is looming large.

But with that inevitability comes the stark realization that things don’t often go as planned in this business. After Ford and GM dumped billions into the coming wave of electrification, it emerged that too many of the moving parts of the “Grand Transition” were more than problematic. In fact, they just flat weren’t ready.

Assumptions were made that revealed themselves to be dead wrong. Just because auto manufacturers had spent more than one hundred years building vehicles and could legitimately consider themselves “expert” at the fundamental process of assembling components, the whole electrification “thing” presented challenges they weren’t ready for.

Before they even started, these manufacturers had to backtrack and source the raw materials necessary to assemble batteries. And this wasn’t another rote example of “just in time” sourcing, either. It was about nailing down crucial ingredients for decades to come. And then there was the little matter of assembling the batteries themselves, something that the auto manufacturers assumed would be the least of their worries. That didn’t turn out that way, either. Precision was critical and mistakes were inevitably made, and the process became mired in an exercise of s-l-o-w walking, which cost time and boatloads of cash.

And then there were the software issues, which were endless, recurring nightmares and are still very much a hugely negative factor to this whole electrification “thing” as you read this. In fact, I view it as an ongoing crisis that has no end because software issues – whether they be “minor” glitches or major “brick” episodes – are going to be part and parcel of this new electrification reality on a more or less permanent basis. “We’re working on it” became the battle cry for all of these manufacturers and their myriad EV issues, but “stop sell” orders are far too common and contribute to the negative imagery associated with EVs. Even the many EV zealots out there agree that this is unacceptable.

And then there was the fact that a legitimate charging infrastructure was years away from becoming a functioning reality. That the manufacturers just assumed that this would come together organically was shocking, incredibly naïve and almost incomprehensible, as in, really? Not only that, the provisions for maintaining the charging points that managed to already get built were simply nonexistent. Even the vaunted Tesla “supercharger” system was exposed for being vulnerable to failures last winter, as news images of parking lots of dead Teslas waiting to be charged made the rounds.

“We’re working on it” became the battle cry for all of these issues, but as it turns out, the reinvention of fundamental mobility is hard. Really frickin’ hard.

But the one crucial factor looming over the “Grand Transition” that remains steadfast and damn-near intransigent? Affordability. I have been writing about the fundamental lack of affordability in our nation’s car and truck fleet for years now. The price creep has been stunning. The average price of a new vehicle blew past $35,000 and went up to just under $50,000 seemingly overnight. (It wasn’t, but it certainly feels like it.) $70,000+ has become commonplace for pickup trucks and SUVs, and that’s on the low end of the spectrum. It used to be that $100,000 was the price threshold for supercar territory. Now, we’re there on a regular basis. And that’s just talking about the ICE vehicles in the market. (Again, as I often have, I’d like to single out the Ford Maverick Hybrid as being that company’s most significant product, much more so than its EVs or the new Mustang, because of its fundamentally reasonable pricing.)

As for EVs and the fundamental lack of affordability? I had a Chevrolet Bolt EV, and I enjoyed it very much. It performed exceedingly well, and its price point was reasonable. But, of course, GM discontinued it while promising that an all-new Bolt powered by its new Ultium EV technology would be arriving soon. The Bolt was GM’s best-selling EV by far, and the positive word-of-mouth about it was its strongest suit. That’s pretty much the end of the discussion about affordability and EVs in this market. (The new Bolt should cost no more than the old Bolt, even with its new technology, if GM wants to get a jump on affordability in the EV market.)

Let’s look at Ford. The MSRP of its F-150 Lightning EV pickup is $49,995, but good luck finding one for that. Transaction prices for the Lightning are more likely around $90,000. The Mach-E – which is currently unavailable – was easily $60,000+. 

And what about GM? The Cadillac Lyriq starts at $58,590, but again, good luck finding one priced for that. And the upcoming Escalade EV will be around $125,000, optioned-up (and that’s probably low). The GMC Hummer EVs are over $100,000, all day. Similar stories for the Chevrolet Blazer EV, which starts at $48,800 but regularly exceeds $60,000; or the Equinox EV, which is said to start at $41,900, but who’s kidding whom, here?

How about BMW? Its i4 starts at $52,200, the i5 starts at $66,800, the iX starts at $87,250, and the i7 starts at $105,700. And then there’s Porsche, whom I like to refer to as this industry’s “Greed Merchants.” The new Macan 4 EV starts at $78,800, the bare bones Porsche Taycan starts at $99,400, but you can go all the way up to a Taycan “Turbo” S, which starts at $209,000, or even further with the Taycan “Turbo” GT, which starts at a cool $230,000.

I could go on – Mercedes-Benz has similar pricing – but I won’t. Needless to say, all of these manufacturers – except for Chevy’s Bolt, when it was still alive, and the Korean manufacturers, Hyundai and Kia, who have made giant strides in delivering realistically priced EVs to the market – went all-in for these “show pony” EVs as image-enhancing vehicles that would create demand for the EV “thing.” Or, so they thought. Instead, along with all the other negatives associated with EVs – the lack of an existing charging infrastructure just to name one – the “show pony” 100,000+ EVs created the idea in consumers’ minds that EVs were simply unaffordable except for the well-heeled. And guess what? They were mostly right.

Which takes me back to this whole “juice” thing. Unless these manufacturers get real about their pricing, as a nation we’re going to be slow-walking this “Grand Transition” to EVs at least for the next decade. Because when it comes right down to it, for today’s buyer the juice simply isn’t worth the squeeze. 

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

Editor's Note: Click on "Next 1 Entries" at the bottom of this page to see previous issues. - WG