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Editor's Note: This week, Peter provides a sobering reality check on the state of the industry, and hammers home the High-Octane Truth that the Detroit auto business, as we once knew, it is well and truly dead. In On The Table, Bentley unveils a new Supersports model that's focused on the driver to an unprecedented degree. And though it's not affordable, it's pretty cool. Our AE Song of the Week is "Smoke From A Distant Fire" by the Stanford-Townsend Band. In Fumes, Peter continues with Part IV of his series on his all-time favorite racing machines, Jim Hall's Chaparrals. And in The Line, we have MotoGP results from Valencia. And we preview the Audi R26 Concept, the brand's first Formula 1 race car, which will be unveiled in January. Onward! -WG

By Peter M. De Lorenzo

Detroit. Those hoping that this business will somehow magically all work out going forward are clinging to a dream that is simply not sustainable. Some of you are pointing to the fact that the Chinese auto juggernaut is imploding, which it is, but that’s not cause for euphoria at Detroit’s prospects.

As The Atlantic reported last week in a widely circulated article:

“In China, you can buy a heavily discounted ‘used’ electric car that has never, in fact, been used. Chinese automakers, desperate to meet their sales targets in a bitterly competitive market, sell cars to dealerships, which register them as ‘sold,’ even though no actual customer has bought them. Dealers, stuck with officially sold cars, then offload them as ‘used,’ often at low prices. The practice has become so prevalent that the Chinese Communist Party is trying to stop it. Its main newspaper, The People’s Daily, complained earlier this year that this sales-inflating tactic ‘disrupts normal market order,’ and criticized companies for their ‘data worship.’

This sign of serious problems in China’s electric-vehicle industry may come as a surprise to many Americans. The Chinese electric car has become a symbol of the country’s seemingly unstoppable rise on the world stage. Many observers point to their growing popularity as evidence that China is winning the race to dominate new technologies. But in China, these electric cars represent something entirely different: the profound threats that Beijing’s meddling in markets poses to both China and the world.”

In other words, those who were quick to anoint “China Inc.” as the dominant player in the automotive world forgot one fundamental High-Octane Truth about the Chinese and the way they go about automobile manufacturing: The Communist Party’s serial manipulation of their home markets not only has severe limitations; in the end, it always seems to come undone, and in a big way too. The Chinese auto industry is reeling because of too many car companies, too many models, too many incentives, too much generalized stupidity and a built-in arrogance on the part of the Communist Party that not only threatens their homegrown industry; it threatens the stability of the global auto industry as well.

I really don’t care how “good” the Xiaomi SU7 is – a certain American car company CEO suggests that it’s the greatest thing since sliced bread and revels in driving one around town here – the reality is that left to their own devices, the Chinese have a propensity to screw things up in a big way. So, before the Chinese car-making capability is canonized yet again by the bootlicking auto media, it’s important to remember that the two-steps forward, five-back dance of mediocrity that at times paralyzes the U.S. industry is alive and well in China too. And that means the industry will continue to churn and burn as the pendulum swings between euphoria and mind-numbing screwups.

I take no comfort in what’s happening with the Chinese auto industry, because either directly or indirectly it affects what’s happening here and around the world, and it well and truly sucks.

Meanwhile, life goes on in the Motor City. The reality that the homegrown U.S. market may very well devolve into a self-contained market dominated by SUVs, Crossovers and Pickup Trucks is real – with a few EVs thrown in for good measure (the next-gen Chevrolet Bolt looks promising) – especially given the current administration’s infatuation with protectionism. In fact, I would argue that we’re already there.

The reality-challenged stumblebums in Washington – those prone to finger-snap decision making based on the assumption that an entire industry can do a “180” with a flip of a switch – is proof-positive of a level of serial incompetence that’s truly staggering to behold. And these decisions will put the U.S. auto industry in a deep, dark hole from which it will probably never escape.

This morbidly flawed decision-making is being conducted in a vacuum by some who truly believe that these knee-jerk tariffs will result in a shiny, happy, Detroit-centric Auto Industry Wonderland that will not only survive going forward but thrive. This in spite of all evidence to the contrary. Pretending that these tariffs will right all of the wrongs and fix everything needing to be fixed is simply a fool’s errand of the first degree. The reality is that there is no going back to the halcyon days marked by the historic high points of the U.S. auto industry. And these tariffs are likely to cripple this industry for good. But then again, expecting rational thought from pathetically challenged politicians is just ridiculous. They wake up bathed in incompetence and it goes downhill from there each and every day.

Let’s get back to this idea of a Detroit-centric Auto Industry Wonderland. It is based on a quaint notion espoused by Dear Leader that we can all collectively go back in time, a time when aggressive, talented competitors didn’t exist, a time when non-UAW plants in southern states didn’t exist, a time when a dangerous, egomaniacal occupant of the Oval Office operating without restraints or any notion of propriety didn’t exist, and a time when a headlong rush into a “Grand Transition” to EVs didn’t result in crushing losses to the denizens of the Motor City.

It simply can’t be done. Or, better yet, it is not gonna happen dot frickin’ com. This industry struggled mightily to rapidly develop batteries, charging systems and entirely new manufacturing processes. And it spent tanker-loads of cash to do so. And the result? It finds itself on the brink of financial disaster with only its ICE products keeping it above water.

As I’ve pointed out repeatedly over the last few months, the High-Octane Truth about this business is that Detroit, as we know it or knew it, is dead. The automakers based here are operating on a crushing cost deficit to competitors like the Korean, Japanese – and yes, Chinese – manufacturers. And that deficit will not shrink with short-sighted tariffs. Instead, it will grow larger.

None of this makes me happy in the least. The thought of that Unctuous Prick in Chief – the Muskian Nightmare himself – luxuriating with that ridiculous, incentive-laden contract (that he can’t possibly meet) makes my skin crawl. And watching as this industry, which has dominated this region and been part of the industrial fabric of this nation for 125+ years, become marginalized is excruciatingly painful to me.

But in spite of all of this, the industry churns on. As I pointed out last week, hordes of talented True Believers representing Design, Engineering, Product Development and Marketing are feverishly working away on what’s next. Finessing final design sign offs for 2029, and envisioning what the compelling looks will be for 2032 and beyond, while wrestling with the engineering constraints brought on by an ever-shifting kaleidoscope of regulations, dimbulb politicians and emissions requirements. And working on marketing and advertising strategies that will somehow make it all make sense and come together in a creative, memorable way is another giant task as well.

And the thing is that this orchestrated cacophony never ends. It’s a constant swirling maelstrom of highs and lows, punctuated by triumphs, forgettable missteps and at times unmitigated bullshit. It’s the Autoverse as defined by today’s chaotic global environment.

The ugly reality is that all of the major players at the car companies want it all, all the time. And surprisingly enough, too many of these executives who should know better actually believe they can have it all. But it never works out that way. In fact, it doesn’t even come close to working out that way. Instead, for every out-and-out product hit there’s always some corner of the enterprise that is woefully underperforming. And remarkably enough, there are always new executives who seem to have to find this out the hard way.

Thus, it was ever so.

And remember one more thing: Every time it seems like the good times will never end, inevitably they do. That has been the historical cadence for the Motor City and the auto biz as we know it ever since this whole thing got started.

That once-awesome, 17-million-unit-a-year Rocket Ride has run out of juice spectacularly and permanently. It’s ancient history, in fact, a Grand Illusion.

And at this point, as Bob Dylan famously said, it doesn’t take a weather man to know which way the wind blows.

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

Editor's Note: You can access previous issues of AE by clicking on "Next 1 Entries" below. - WG