No. 964
September 19, 2018
 

About The Autoextremist

Peter M. DeLorenzo has been immersed in all things automotive since childhood. Privileged to be an up-close-and-personal witness to the glory days of the U.S. auto industry, DeLorenzo combines that historical legacy with his own 22-year career in automotive marketing and advertising to bring unmatched industry perspectives to the Internet with Autoextremist.com, which was founded on June 1, 1999. DeLorenzo is known for his incendiary commentaries and laser-accurate analysis of the automobile business, as well as racing and the business of motorsports. Author. Commentator. Influencer. The Consigliere. Minister of the High-Octane Truth. DeLorenzo is considered to be one of the most influential voices commenting on the business today.

DeLorenzo's latest book is Witch Hunt (Octane Press  witchhuntbook.com). It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. DeLorenzo is also the author of The United States of Toyota.

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Tuesday
Jun262018

THE NEXT PRECIPICE.

By Peter M. DeLorenzo

Detroit. Last Sunday, Volkswagen made history at the Pikes Peak International Hill Climb. Romain Dumas, driving the purpose-built, 500-kW (680 PS) I.D. R Pikes Peak, not only broke the previous record for electric vehicles, but also bettered Sébastien Loeb’s all-time course record from 2013 by a full sixteen seconds. Dumas attacked the 19.99-kilometer, 156-corner mountain course in a record time of 7m 57.148s minutes. 

It was an incredible achievement, not just because the I.D. R Pikes Peak was developed and built in just 250 days in an all-hands-on-deck effort by the True Believers at Volkswagen, but because it represents the final, seismic, transformational shift to electrification in the automobile industry and for electric power in our mass-produced vehicles.

Leave it to racing to signal this sea change. After all, racing has historically pioneered advancements and innovations that end up in the automobiles we drive. And the road to electrification is no different. When I proposed the Hydrogen Electric Racing Federation to the industry in January 2007, the idea was to accelerate the development of electric vehicles powered by hydrogen fuel cells by racing them in a special event at the Indianapolis Motor Speedway. Major manufacturers were seriously interested - even though the idea was clearly ahead of its time - but ultimately, they balked because a fundamental step needed to be taken first, and that was engineering fully electric consumer vehicles. And now, after many years of fits and starts and promises, we’re getting a serious look at our driving future.

It has been one thing to have Tesla, and individual models like the Chevrolet Bolt and Nissan Leaf in the market; it’s quite another to have many major automobile manufacturers preparing to unleash fully electric vehicles across several segments. This will be decidedly different, and I doubt that most of us are really prepared for it. Aston Martin, Audi, BMW, GM, Honda, Hyundai, Jaguar, Kia, Mercedes-Benz, Range Rover, Toyota, et al. are preparing technically advanced, fully electric machines to bring to market, and this business will never be the same.

But then again, the automobile business has always been a seething cauldron of change and innovation over the decades. The vehicles we have access to now – from economy to high-performance and everything in between – are the finest vehicles that have ever been built. Yes, I believe we’re suffering through a unpleasant phase of technical overkill, but nonetheless the vehicles being built are considerably better when compared to where we were even ten years ago. 

But time doesn’t stand still. New developments in battery capability and associated technologies are proceeding at a furious rate. And we have now arrived at The Next Precipice.

But selling these fully electric vehicles isn’t going to be easy by any stretch, especially since the $7500 government tax credit on fully electric vehicles is coming to an end shortly. With that tax credit gone, fully electric cars are going to have to be sold on their merits alone, which is far from an automatic proposition. Let’s face it, this country simply doesn’t have the infrastructure to support these cars. As I’ve said repeatedly, unless you can pull up to a recharging station at your corner or on the interstate and “fill up” with juice in less than five minutes, BEVs aren’t viable for anything more than urban duty. 

And make no mistake, range is an issue. It’s fine to say a vehicle gets 250 miles on a charge, but your battery usage will vary, and on a trip where there is a minimal network of charging stations to access, that’s going to be a real problem. But I think even more of a problem for fully electric vehicles is the amount of time it takes to locally charge vehicles at consumers’ homes and such. Even with 220 installed in your garage, it simply takes too much time to recharge these vehicles. Not to mention the fact that mass adoption of fully electric vehicles will severely affect the nation’s power grid, which no one seems to want to talk about.

I am all for advancements in vehicle technology, but I must say fully electric vehicles hold very little appeal for me, and even the high-performance-oriented ones leave me cold. Their sound is uninvolving, soulless and lacking in fundamental visceral appeal. (Even VW’s Pikes Peak super car, impressive as it is, sounds like a glorified slot car.) And that electric sound signature will be a real problem for consumers as well, because it’s unlike anything most people have ever experienced before, so it’s going to be a big-time adjustment. (Saying that, I could see myself considering a BEV urban runabout as a second car.)

But there’s a sobering reality looming for these manufacturers, too, because there’s a real chance that the number of electric vehicles available for sale by 2020 and beyond will far outstrip consumer demand for them, so this industry is headed for a rocky road during this transition. Creating desirability for vehicles that basically all sound alike will be one of the marketing challenges for the ages.

And what about racing? The sport is headed for a transition as well. It’s clear to me that even though internal combustion engines will be around indefinitely, racing is likely to become more of nostalgia exercise. That means major racing organizations will find it tougher and tougher to sustain what they do, so they will have to focus on fewer, bigger events (which, come to think of it, isn’t a bad idea at all). NASCAR in particular needs to get its arms around this idea, because unless major changes are made in that aging, oversaturated series it will go back to be a regional series like it was in the 60s and 70s.

No, racing isn’t going to disappear altogether and Formula E, the relatively new, all-electric racing series, will continue. (Although I was bullish on this series early on, my opinion of it has soured. Without the sound and fury of ICE-powered racing machines, the appeal of Formula E is severely limited.) 

This transition of the automobile business will be pivotal and seminal. Traditional companies will survive with savvy and guile, while others will be forced to partner up in order to live to fight another day. And then again, some won’t survive at all.

Kudos to the True Believers at VW for establishing a new record at Pikes Peak. This was a no excuses, “run-what-you-brung” technical exercise and they nailed it by setting a new all-time record, bringing The Next Precipice right along with them.

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

(VW images)


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