Kudos to 2014 Impala

I took a look at a new Impala this morning, and I have to give GM props for the nice job they did on the body assembly.  All of the panel gaps were small, the trim alignment was good, the doors shut tightly.  The car looked expensive, even though it is a Chevrolet and not an Audi.

This car is a huge improvement over the car it replaces, the ancient w-body based 2006-2013 Impala.  That car was so out of date, it was difficult for me to understand why anyone but fleets purchased it.  And even the fleets had better choices.

The styling of the 2014 is clean, with a little sculpture and a little chrome, but a tasteful amount. 

(Photo courtesy of Edmunds.com)

Tesla Market Craziness

Tesla's stock drive through $100/share this morning, giving the company a market value of around $11 billion.  That is more than Fiat/Chrysler ($8b) and almost as much as Porsche ($12b)!

That's nuts.  This is speculation, I think. 

Sad News Down Under

Ford has announced that they will cease manufacturing operations in Australia in 2016.  Product engineering will continue.  However, this may be the end for the indigenous Falcon vehicles, which include RWD V8 sedans and Utes (cars with open pickup beds). 

GM has followed a different strategy, using Australia as an export base for the Holden based Pontiac G8 (defunct) and later the Caprice PPV, based on the same platform.

Tesla Pays Back ATVM Loans... But Why?

The big announcement yesterday in the auto business was that Tesla was paying off its ATVM loan off early.

I am puzzled by this, it seems from the outside like a bad business decision.

The ATVM loan was cheap money, carrying an interest rate equal to Treasury notes.  Current 10 year notes are below 2%.

By paying off the ATVM loan early, Tesla traded the cheap government money for stock and a public bond offering of their own notes, also running at about 2% interest. 

But Tesla could have done both--kept the ATVM loan and issued their own bonds--and had extra cash with which to develop the Model X and future less expensive vehicles. 

Was this as simple as Elon Musk not wanting to be under some government oversight, and not wanting to be seen as a government supported enterprise?  

Will BEVs put auto service shops out of business?

Inside EVs asks, "Will Electric Vehicles Drive Mechanics Out Of Business?", after an article in The Street.

The answer is yes, mass electrification will eventually put some mechanics out of business.

The low-skill places like quick-lube joints will be really hurt.  Independent ASE certified shops, and ASE certified chains like Midas will see a slow down, as brake changes will be much less often and exhaust systems will never need work.  However, BEVs will still require cooling system repairs, air conditioning work, and suspension fixes.

Tire shops that specialize in tires and suspensions will do fine.

I expect that some independents and many large chains will invest in specialized tools and training, to be able to do BEV specific jobs like battery pack diagnosis/replacements, battery cooling system repairs. 

I also expect that in time, a healthy market will develop in after-market high voltage batteries, where you will be able to buy a rebuilt battery pack for a competitive price from a 3rd party supplier, much like you can buy replacement 12v batteries today.

It may be very different, actually, than you expect, because we don't know which alternative fuel technology will win out.  If consumers balk at the high cost of BEVs, and we don't have the elusive super-battery breakthrough, then we may see a long term shift to other energy storage forms.  For example, we may have a large number of engines running on CNG in the future, as fracking accelerates and the prices continue to drop. 

Since CNG engines are still combustion based, that path would have a busy future for today's mechanics.

Telsa's Profit

Tesla's profit this first quarter, $11 million, was due in part to income from selling EV credits in California to other automakers.  Tesla made $85 million not from selling product, but from cashing in on environmental regulations. 

This means that when you look at profit and loss from selling cars, Tesla is still losing money, at a rate of about $74 million last quarter.  And this is after slowing down R&D work, delaying the Model X, likely to save cash.

Another ATVM Borrower Fails

VPG, which designed (and actually built) a purpose-built vehicle for handicapped transportation, has shut down.

The company ran out of money before it could become self-sustaining, after burning through about $400 million in private capital and a $50 million AVTM loan.

VPG's MV1 mobility vehicle was basically a homely body on top of a Ford truck frame, and uses many parts from existing vehicles.  It was well designed for transporting wheelchair bound passengers, with not much consideration for style.  Besides being ugly, the MV1 is heavy and thirsty, with EPA mileage of 11/14 for the gasoline version.

If you want to buy one, there are still a few for sale, priced around $40,000.  Since they use a common Ford 4.6L V8 powertrain, service should not be an issue.

VPG at least made it to production, unlike Carbon Motors, the other famous failure in the purpose-built service vehicle sector.

Source: Detroit Free Press.