This isn’t exactly a spicy hot take, but I really can’t say I miss the late 2000s. OK, sure, it was when Flo Rida was at the ostensible peak of his powers. But global economic collapse? I wasn’t a fan, personally speaking. There’s nothing from that era that I’d like to see come back today—certainly not the high rates of car repossessions, which can be absolutely devastating to people’s lives. And yet, for a variety of reasons, here we are.
That leads off today’s morning news roundup, unfortunately. But we also have items about Mazda’s foray into the electric world, General Motors’ decision to spend more money on ICE-powered trucks and some surprising Tesla-related news out of Texas. It’s enough to spin your heads right round, right round.
The Cars Remain Too Damn Expensive
According to a new report from S&P Global Mobility (via Automotive News), auto loans more than 60 days past due reached 1.69% in the first three months of this year. That’s actually higher than what we saw in 2009 and 2010 (1.46% and 1.43%, respectively) and higher than 2021, when everything was extra-weird at the height of the global pandemic. (Can’t say I miss that time, either!)
From AN’s story:
This trend is primarily concentrated in the subprime realm and independent lenders, where interest rates can be even higher than normal. But the news isn’t all bad here, apparently. One metric that looks at long-term payment performance is positive around new cars:
Either way, I say file this one to “Well, what do you expect?” Interest rates have gone way up in recent years, new and used cars are more expensive than ever, and we’re all still mired in economic weirdness of our own. Add in the fact that, while cars can be awesome, the unfortunate consequence of building society around them means people sometimes have to stretch their budgets beyond their limits to get to work or the kids to school. It’s easy to admonish people about buying within their means from behind your keyboards, but a lot harder to do that when the new car market is increasingly aimed at rich people and decent used cars are nigh-on impossible to find.
Either way, when the market gets set up this way, this is what happens as a result.
GM Will Make ICE-Powered Trucks Until The Heat Death Of The Universe
The wind-up on this one’s long, but worth it, I hope. Stay with me a second.
Last year, after spending years mired in editing and management, I found myself primarily writing again for a living. (Whether I’d recommend that or not really depends on the day you decide to ask me.) My work has mostly focused on how the auto industry is transforming, with a particular eye on electric vehicles. And the conclusion I keep coming to after months of talking to people in and around this transition—if you want to call it that—will be a lot slower, weirder and less certain than many car companies and the wider media would have you believe. And that’s before you even get to electrifying other global markets that may not have as easy and reliable electricity access as more developed countries.
Take GM, for example. It has some very ambitious EV plans. It’s building battery factories like crazy in America to take advantage of new tax rules. It’s got what seems to be an exciting lineup of EVs coming, though it feels more off in the distance than we expected (when was the last time you saw a Cadillac Lyriq outside of a Detroit-area press car fleet? For me, the answer is never.) And though GM has committed to being “zero-emissions” by 2035, its own CEO has admitted it’s going to be a while before EVs are both affordable and profitable and it’s going to sink a ton of money into ICE truck and SUV production in the meantime to pay that bill.
This brings me, finally, to my point: I think GM’s gonna be selling those ICE trucks and SUVs for a long, long time. Possibly past 2035. Possibly forever. They’re too profitable not to, their core customer base may not be best served by EVs or the charging infrastructure for a long time, and there’s nothing to say GM can’t move its own goalposts—especially if a bunch of other automakers decide to do the same.
Case in point: GM’s making some huge investments into Duramax diesel trucks, according to the Detroit News:
General Motors Co. is investing $920 million at its Ohio Duramax operations for production of diesel engines for future heavy-duty trucks, the company announced last week. The investment supports GM’s future full-size heavy-duty truck business. Product details and timing related to GM’s coming HD powertrain trucks were not released.
The DMAX news came after GM made several investment announcements at its full-size truck and SUV assembly plants over the last few weeks.
Yes, this is different from the last truck investment. Those were gas trucks made in Texas and Indiana:
The automaker is investing $632 million at its Fort Wayne Assembly Plant for production of the next-generation internal combustion engine light-duty Chevrolet Silverado and GMC Sierra pickups. It’s also investing more than $500 million at its Arlington plant where the Chevrolet Tahoe and Suburban; GMC Yukon and Yukon XL; and Cadillac Escalade and Escalade-V are manufactured.
That’s $2.52 billion for diesel and gas trucks and SUVs, if you need help with the math. (You’re welcome!) Now, I’m not saying GM shouldn’t do this, necessarily; the demand for these trucks is clearly there, it has to make profits like any other company, and this is how it’ll finance this possible electric revolution. All of this makes sense. And to be fair, GM’s making even bigger investments into batteries and EV tech, too. I do believe it’s serious about the future being largely electric.
Just know that GM will be making these ICE trucks until there’s absolutely no ounce of demand left for them on earth, and the ones it’s set to make over the next decade or more now will be on the road for a long, long time. The big trucks are not going anywhere. If we do move away from ICE vehicles, they’ll be the last to go, if they ever do.
Mazda Eyes Panasonic Partnership For Batteries, Which Is Good
Having said all of that, the market is what it is right now; private and public investments into the battery sector are skyrocketing globally. Even Japan’s automakers, which have been historically EV-skeptical for a host of reasons, are hustling out of bed after China gave them a wake-up call.
One of them is Mazda. It’s got big plans for electrification and EVs, which is tough for them as one of the few small, independent players left in the space. Now we know it’s potentially looking to partner with tech giant Panasonic on batteries, including some made in North America to take advantage of tax deals. Here’s Reuters:
Such an effort on lithium-ion batteries is likely to carry Mazda a step closer to ramping up production of EVs, in a 1.5-trillion-yen ($10.6-billion) spending plan it unveiled in November to drive electrification of vehicles.
In the partnership, Panasonic Energy would supply Mazda with automotive cylindrical lithium-ion batteries made in Japan and North America for Mazda EVs expected to be rolled out in the latter half of this decade, the companies said in a statement.
A Mazda spokesperson declined to say exactly what battery cells the Hiroshima-based automaker was planning to use in its EVs, adding that it would hold talks with an eye to secure supply from 2025-2027 onwards or later.
[…] Japan said on Friday it would boost support for domestic battery production to up to $2.2 billion, pledging support to Toyota and other makers in a push for greater economic supply chain security.
I point this out for two reasons: one, I get the growing sense that Japan’s increasingly freaked out about the growing EV space and its place in it. And two, perhaps selfishly, I’m a Mazda fan. I have a Mazda 3 and I love the car, and who doesn’t at least appreciate the Miata? I like what this brand does, I like the cars it builds and I want to see it survive into the future. I hope it can pull this off. The day we get a really competent, well-built, fun-to-drive Mazda with decent EV range will hopefully be a good one. The MX-30 ain’t it, kids.
Texas Backs Tesla Secession On The Charging War
Well, folks, it’s a rare day when the Lone Star State decides to regulate anything [Ed note: Well… there’s one thing they don’t mind regulating. – MH]. But now, Texas—the home base for Elon Musk’s companies, these days—is backing Tesla and its charging format in a very big way. Following moves by GM, Ford, Rivian and maybe others to use Tesla’s plug as the EV charging standard from 2025 onward instead of the more universally-used CCS plugs, Texas will now require charging companies to include both Tesla’s standard as well as CCS if they want to access federal funding for EV infrastructure.
In case you didn’t know, the Biden Administration is dumping $7.5 billion into grants to build EV fast chargers. The money goes to the states first, and then the states allocate that money to companies that apply. Now Texas says to get that money, companies have to build Tesla plus as well as CCS ones, in a story broken by Reuters:
Texas – home to Tesla’s headquarters and a new car factory complex – is the first state that will mandate Tesla’s charging technology, giving a boost to CEO Elon Musk’s hope of making it the national charging standard.
“The decision by Ford, GM, and now Rivian to adopt NACS changed requirements for Phase 1” of the rollout, the Texas Department of Transportation said in an email to Reuters on Tuesday, adding that it would require direct current fast chargers to have one CCS and one North American Charging Standard (NACS) connector.
Texas’s decision will put a ton of pressure on other states to adopt Tesla’s NACS, said Lew Cox, director of business development at MD7, which helps companies deploy chargers.
“It’ll effectively make an NACS the new charging standard,” Cox said.
That’s a pretty big coup. Texas is a gigantic car market and one whose long stretches of highway and huge rural population make it a tough but ultimately ideal contender for EV infrastructure. Requiring charging grants to carry both standards—at least for now—indeed all but guarantees Tesla’s charging takeover is an inevitability.
Your Turn
When do you think the last gasoline (or diesel, even, why not) vehicle will be made in America, and what is it? Sometime in the 2050s—that’s my bet. I do hope that at least by then they’ll mostly be hybrids or PHEVs to cut back on emissions, but even GM says it’s not interested in making that happen.
When do you think the last gasoline (or diesel, even, why not) vehicle will be made in America, and what is it?
I have no idea. I just hope someone is still rolling around in my old Chevy Prizm long after I’m dead, when gas stations are harder to find than charging stations. Not as a punishment, but as an enthusiast.