No. 1018
October 16, 2019

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, 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 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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By Peter M. DeLorenzo

Detroit. As future scenarios go, what’s shaping up for the automobile industry for the next decade is getting uglier by the minute. The business is caught in a Twilight Zone that’s as vast as the Grand Canyon, with future tech and mobility occupying time, boatloads of money and strategic planning on the one hand; while on the other, the real business at hand is consuming everything in its path just in order for the companies to keep up. 

The Volkswagen Group is making such a huge bet on Battery Electric Vehicles (BEVs) – based on the premise that its economies of scale can make them competitively affordable with traditional ICE vehicles – that the industry is reeling. Why? Because it has yet to be demonstrated that consumers are going to be willing to embrace BEVs en masse, which VW is absolutely counting on. If the powers that be at VW are right, the company will be miles ahead of the rest of the industry players by the time this unfolds over the next five years. If they’re wrong, or even miss to a notable degree, they could be swimming in unsold BEVs that nobody wants. 

As I’ve said previously, marketing EVs will be the biggest advertising challenge in decades, and it will be interesting and in some ways excruciating to watch. We’ve all seen when EV marketing hasn’t been done properly. We have only to look at how badly the Chevrolet Volt and Bolt – two excellent if not outstanding vehicles – were mishandled by GM marketers. Believe me, marketing BEVs for the mainstream is going to be tough and unforgiving. 

Meanwhile, traditional new models in the near-term transition have to be perfect, on target for the market and desirable. Assembly facilities have to be utilized near capacity and ultra-flexible for the vagaries in the market as much as possible. And this is no small task, which is why you see companies flip-flopping in their decision making as to what will be built and where.

Add to this chaotic mix the EV Startup of The Week Club, with seemingly every other day bringing an announcement of yet another EV automobile company funded on a wing and a prayer, and promising to be the greatest thing since sliced bread (or kale smoothies, depending on your personal barometer), one absolutely sure to shake the industry to its core with its remarkable brilliance. Listen closely to the chatter pushed out by these startups and it’s all remarkably similar: After 130 years of car-building they are going to reinvent the wheel, stand the business on its ear, and make every car company that came before them instantly obsolete. On top of that, they’re going to do it better, faster, and with more profitability than any other car company in history. Henrik Fisker, anyone? 

To make matters worse, certain gullible members of the mainstream media are regularly lured in to cover the latest Vapor Ware on the EV front, giving publicity to the flimsiest of companies for no good reason whatsoever, much to everyone’s enduring disappointment. It’s so typical in this day and age, it’s hardly worth mentioning.

But then again, this is the business now. Welcome to the seething cauldron of projection, conjecture, bold decisions, half-baked promises, hand-wringing and calculated hedging. Always with the hedging. Everyone is right and no one is wrong at this point, or is it the other way around? 

Those projections? They’re suspect – besides, they could go south at any moment. As for the conjecture, it’s everywhere, but nothing is etched in stone. Or if it is, it seems to wash away with the prevailing winds and rain. What about those bold decisions? They always come with a caveat, as in, don’t quote the executive in question who actually made the decision, remind him or her of that decision, or deign to hold them to it, especially eighteen months from now. And what about those half-baked promises? They happen by the baker’s dozen in this business, especially in this town. Besides, those half-baked promises come complete with furious hand-wringing and endless hedging. It’s as if every executive in this business wants to say “don’t quote me” on that, so as not to be held accountable. Unremarkably and thankfully enough, it doesn’t work that way.

Auto executives in this business deal with the seething cauldron in different ways. Some studiously avoid getting caught up in the negatives and go about their business using their accumulated knowledge and skill. Most of these executives qualify as the True Believers, because they steadfastly believe in the mission and deliver to the best of their ability every day. They understand implicitly that the age-old industry adage “you’re only as good as your last hit” is very much alive and well.

The other guys and girls? They’re the hand-wringing specialists and the serial hedgers and prevaricators. Part of the Legion of Recalcitrant Twerps that still find purchase somewhere in the system. Don’t hold them to it, whatever it is, because their consummate skill is to get lost in the crowd when the heat comes down.

The seething cauldron is most intense in this business right at this very moment. Executives’ careers are on the line, with the best and the brightest bound to be rewarded, while the slippery scam artists and faux geniuses are destined to be hammered and held accountable. Come to think of it, this is really no different than at any other time in the business, except now, the heat is intensified and the consequences are magnified, with the very future of these companies on the line.

As I mentioned last week, that famous line from The Godfather Part II says it best: “This is the business we’ve chosen.” And there doesn’t seem to be a damn thing anyone can do about it.

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