GM Thinks It Can Save $2,000 on Every Car With Smarter Distribution

Chevrolet Bolt sits on lot at Chevrolet dealership

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General Motors wants to cut out inefficiencies in its distribution methods with software, Volkswagen is facing a strategy rethink around its next wave of electric cars after the ID era, and Japan is probably about to tax the hell out of EVs. All that and more in this Friday edition of The Morning Shift for November 18, 2022.

1st Gear: Leaner, Faster, Cheaper

General Motors is rolling out new inventory management software and setting up regional EV fulfillment centers to get in-demand vehicles to customers more quickly, the company announced during its investor day on Thursday. These initiatives should also help the automaker save about $2,000 on every car, Automotive News reported. Here’s loosely how, per GM President Mark Reuss:

Reuss said the strategy leverages GM’s US franchise dealership network for a competitive advantage, including over startups that sell EVs directly to consumers.

Under the regional fulfillment approach, dealers will continue to receive EVs for test drives and immediate delivery, but GM will hold additional EVs at the regional centers. GM has said the approach reduces floorplan costs and the likelihood that unpopular vehicles will sit on dealership lots.

“We’ll use cloud data and machine learning to continuously scan the order pipeline and available dealer and factory inventory for the best fulfillment option,” Reuss said Thursday. “We know how this works because we know what vehicles move in certain parts of the country and at certain dealerships.”

The upshot for customers is, theoretically, a smoother buying experience, with the ability to complete a purchase online. The new digital sales platform is currently live for the boltaccording to the Detroit Free Pressand should expand next to the Cadillac Lyriq in 2023.

So far, GM is operating three regional fulfillment centers specifically for EVs. Two of them are located in California, and one in the southeast. Vehicle delivery times could be shortened to as little as four days, the company claims. GM CFO Paul Jacobson also stated that the $2,000 savings in distribution will be passed along to the consumer in a sense, allowing GM to stay competitive in pricing relative to other automakers. That’s a nice thought, but in this market, I’ll believe it when I see it.

2nd Gear: Trinity’s Loss Might Save the Golf

Yesterday we learned that Volkswagen is rethinking how and when it’ll build a factory just for its future Trinity-based EVs. This could delay the launch of the supposedly Level 4 semi-autonomous cars, but on the flip side, the company might just repurpose its Wolfsburg factory to pump out a new electric Golf or Tiguan in the meantime.

The trouble is that the software that the whole Trinity effort is based on might not be ready in time for those models to hit the market in 2026, like VW had been planning. Courtesy Automotive Newswhich cites German business publication Handelsblatt:

Volkswagen could launch a new all-electric version of its Golf compact hatchback or its Tiguan crossover to keep its EV offerings fresh after its flagship Trinity electric project faces delays until 2030.

The electric Golf or Tiguan would use an updated MEB electric platform and would be built at the automaker’s Wolfsburg factory where combustion engine variants of the cars are built, German business daily Handelsblatt said, citing company sources.

The new EV could go on sale before 2026, the paper said. This would ensure that the Wolfsburg plant can continue to be utilized to capacity as European customers increasingly switch to EVs from gasoline or diesel cars.

In this revised timeframe, we may not see VW’s next-generation EVs until the end of the decade. Project Trinity is targeting much better range than the brand’s current stable of EVs, with bi-directional charging and 800-volt architecture — two things Hyundai’s E-GMP-based ioniq 5 and Kia EV6 can already provide. If the delay extends the Golf’s life — which seemed to bleak after the current Mk 8 — I’m all for it.

3rd Gear: …the Polo, on the Other Hand

Euro-7 emissions rules are killing small internal-combustion cars in Europe, and the Polo could be the next to get the axe, Coach reported Friday:

CEO Thomas Schäfer said engineers at the company were currently assessing the regulations, and a decision was expected within the next couple of weeks as to whether or not they would proceed.

“We had a very good plan, where we thought EU7 was an insurmountable hurdle [and therefore would be scrapped] that will accelerate electrification,” Schäfer said at the Los Angeles motor show.

“We planned small electric cars that would come in 2025 between Volkswagen, Skoda and Cupra that would be built in Spain. And that basically replaces the combustion engine in small vehicles like the Polo, as cars become so expensive [with EU7]there is no item carrying on.

“Then two [or] three weeks ago, word got out that EU7 was coming through and it would be on a reasonable level. And we thought, okay, let’s go, that might help us transition a little bit [by keeping models like the Polo on sale]it doesn’t change the plans, but it helps financially because you can transition a little easier and reinvest at the same time everywhere.

“But last week, another message came through [confirming stricter EU7 guidelines will be implemented] and we’re back to square one. It’s even worse…

According to Schäfer, Euro-7 will drive up the price of a car like the Polo by 3,000 to 5,000 euros. He said that VW’s engineers need two more weeks to investigate if it can work a cost-effective solution for the Polo. Goal Euro-7’s threat to the smallest gas cars is nothing newand so it’s likely that if Volkswagen had any path forward to rescue the Polo, we’d probably know about it already.

4th Gear: JLR Is on a Hiring Spree

Days after it lost its CEO reportedly for struggling to navigate the semiconductor shortageJaguar Land Rover is on the hunt for tech sector employees around the world, efficiently in the UK From Reuters:

The carmaker, which wants to become an “electric-first” business from 2025, on Friday announced a jobs portal for displaced tech workers to fill 800 roles spanning self-driving, electrification, machine learning and data science.

The company said it believed workers leaving big tech groups like Amazon were most likely to have the required skills to fill new roles in Britain, Ireland, the United States, India, China and Hungary.

The hiring drive comes after thousands of layoffs in recent weeks at US tech firms including Twitter, Meta and Amazon, some of which have offices in London and Dublin, Ireland.

“Our digital transformation journey is well underway but being able to recruit highly skilled digital workers is an important next step,” Chief Information Officer Anthony Battle said in a statement.

Silicon Valley and its global counterparts are doing a stunning job of driving away all of their most skilled people to prop up directionless billionaire vanity projectsso this seems like a deft move.

5th Gear: Japan’s EVs Are Ripe for Taxin’

Electric vehicles are not taxed as highly as gasoline-powered cars in Japan. As drivers move to EVs, then, the government figures to lose some revenue. You can guess what’s going to happen next. Per Nikkei Asia:

Japanese policymakers will consider changes to a flat local tax on electric vehicles to head off a potential drop in revenue as drivers shift away from more heavily taxed gasoline cars.

Local automobile taxes have a class component based on engine size that ranges up to 110,000 yen ($789) a year, but that is set at 25,000 yen for EVs and fuel cell vehicles. That makes EVs the least-taxed autos, apart from minicars.

The only question is how to tax them. Power? Battery size? There are so many quantifiable!

One possible change would be to tax EVs based on motor power. Some European countries take this approach, said officials at Japan’s Ministry of Internal Affairs and Communications, which oversees local taxes.

The ministry sees now as the right time to begin discussing a change, since EV ownership is still relatively low. EVs account for only 1% to 2% of new car sales in Japan, lower than in the US or Europe.

The ministry will ask ruling party lawmakers to consider proposals for inclusion in the government’s tax plan for fiscal 2023, to be decided in December.

On the plus side for Japanese consumers, any tax change will supposedly take years to be enforced, and in Japan they actually use such taxes to keep their roads and infrastructure in swell condition. What a concept.

Reverse: Time Zones, Brought to You by Union Pacific

Courtesy History.com:

At exactly noon on this day [in 1883], American and Canadian railroads begin using four continental time zones to end the confusion of dealing with thousands of local times. The bold move was emblematic of the power shared by the railroad companies.

Neutral: You Ever Wake Up Thinking of a Song?

“Hero” is many thingsbut I dare you to click the dang play button and not sing along.

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#Thinks #Save #Car #Smarter #Distribution

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