The Real Issue With EVs Is That They’re Just Not Big Enough

Good morning! It’s Monday, July 24, 2023 and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

1st Gear: EVs Are Just Too Small

The reason electric vehicles haven’t fully taken off isn’t because of a lack of charging infrastructure, range anxiety or because they’re too expensive. No, it’s actually because automakers just haven’t made planet-sized ones yet. But with the Kia EV9, Volvo EX90 and Cadillac Escalade IQ on the horizon, that’s about to change. And the industry cannot wait, according to the Wall Street Journal:

“For a lot of people, that third row is the No. 1 reason for purchase,” says Jess Bala, director of global product planning at General Motors’ Cadillac brand, which is scheduled to reveal an electric Escalade IQ large SUV in August. “Those are often younger buyers who already are more interested in EVs.” […]

Through June, the top three EV sellers in the U.S. were Tesla’s Model Y, a midsize SUV that offers a snug, optional third row; Tesla’s Model 3, a compact sedan; and GM’s Chevrolet Bolt, a small hatchback.

Buyers of those EVs tend to be early adopters—predominantly male—who are attracted by new technology. As automakers roll out bigger, family-oriented electrics, they have the chance to draw more female buyers, executives said.

For example, Kia expects women to account for about half the buyers of the EV9, a futuristic-looking three-row SUV set to go on sale in the fourth quarter. Kia’s EV6 customer base—a midsize SUV that competes directly with Tesla’s Model Y—is 75% men.

Of course, it stands to reason that EVs expanding into new categories have an opportunity to reach new demographics that they haven’t been able to yet, like women and families. We’re still in the early adopter era, after all. That said, it’s not like there aren’t a wealth of midsize-plus electric SUVs out there. The Cadillac Lyriq, BMW iX, Hyundai Ioniq 5, Tesla Model X, Rivian R1S — the list goes on and on. But those just aren’t enough. Shoppers, like one quoted in the Journal’s story, still need more:

April Conyers is more concerned about the vehicle’s size than its range, after having a baby late last year. She and her husband own a smaller Volvo EV, but things have gotten a little snug with the second-row car seat. They recently put down a deposit on a Volvo EX90, a three-row electric scheduled to go on sale next year.

“We’ve run into some practical space issues that we hadn’t really thought about,” said Conyers, a 41-year-old communications consultant. “The electric cars that are offered today aren’t very big.”

Far be it from me to judge this stranger’s purchasing rationale — I don’t know their situation — but as far as the average size of EVs today, many of them offer at least interior volume comparable to that of a family sedan, once so named because they were sedans that could comfortably fit typical families. Furthermore, the lust for ever-bigger vehicles poses a danger to anyone on the road in something smaller, leading to a spiraling problem that will only be accelerated by EVs, which are always heavier than equivalently sized internal combustion engine-powered cars. As Tesla’s rise demonstrated, extolling the practical benefits of battery-electric over ICE has never, ever been a successful marketing tactic. Americans will warm up to EVs when automakers’ offerings are as impractical as they are.

2nd Gear: ZF On Moving Fast And Breaking Things

Tens of millions of cars were recalled last year and supplier ZF really went out and said last week that it’s convenient that some automakers consider quality second to speed. From Automotive News:

Holger Klein, CEO of ZF Friedrichshafen, said young automotive brands such as Tesla, Nio, Xpeng and Lucid are pushing the old German supplier in a different way than traditional automakers.

“They have a different expectation on speed,” he said. “Speed is king.”

The emerging brands want ZF’s newest technologies as quickly as possible, even if some bugs haven’t been eliminated in development.

“If your latest innovation feature doesn’t work as reliably as you would expect from a German premium brand, it’s somehow OK,” he told Automotive News Europe during a recent roundtable discussion at the supplier’s headquarters here. “This happens when the customer wants a particular car and a particular function and is willing to accept some deficiencies.”

I especially appreciate Klein saying “it’s somehow OK” if a feature in a Tesla is buggy and annoying. I didn’t talk to the chief executive myself of course, but I can so clearly envision a CEO saying as much as the epiphany washes over them — that these decades of striving for dependable components in the most dangerous appliance we use on a daily basis were all just self-inflicted. Of course, the article then walked the prior statement back, explaining that ZF under no circumstances would ever compromise on quality in an effort to manufacture things faster. It’s somehow just doing both.

That urgency doesn’t mean that ZF is willing to compromise on its proven development processes or skip quality steps, Klein emphasized. It just means that ZF knows the newcomers will be tolerant.

“I think that makes many of them faster,” he said. “It is demanding to keep pace with this speed.”

It is demanding! Sure hope nothing falls by the wayside as a consequence.

3rd Gear: Stellantis, Samsung Have An Announcement

It’s another battery plant. Per Reuters:

French-Italian automaker Stellantis and South Korean battery maker Samsung SDI on Monday said they plan to open a second joint-venture plant in the U.S. to build electric vehicle batteries, with a target to start production in 2027.

The companies said the transaction still needs to be finalized, and where the plant will be located is under review. Also, how much will be invested at the site and how many people it will employ will be announced later. The plant will have an initial production capacity of 34 gigawatt hours (GWh).

“This new facility will contribute to reaching our aggressive target to offer at least 25 new battery electric vehicles for the North American market by the end of the decade,” Stellantis CEO Carlos Tavares said in a statement.

Stellantis, whose brands include Peugeot, Jeep, Ram, Alfa Romeo, Citroen and Opel, has announced plans to reach 100% electric passenger car sales in Europe and 50% car and light truck electric mix in the U.S. by 2030. To achieve that, it has said it wants to secure about 400 GWh of battery capacity.

The companies’ first battery-making facility is being built in Kokomo, Indiana and is planned to start operations in early 2025. That factory will start at a production capacity of 23 GWh, and will eventually lift to 33 GWh.

4th Gear: The OnStar Rebrand Has Begun

General Motors is broadening OnStar from its prior position as a safety-based telematics platform into more of an everything-based one. Via Automotive News:

The campaign set to launch Monday gives OnStar a new tagline — “Better Never Stops” — and includes a commercial promoting the brand as the link behind all of GM’s vehicle technology, from its Super Cruise hands-free driver-assist technology to real-time navigation.

Previously, OnStar used the tagline “Be Safe Out There,” which GM said will continue to be part of safety-related messaging.

The idea is that everything techy in GM vehicles — from Super Cruise semi-autonomous driving to entertainment apps — will now fall under the OnStar umbrella, because that’s apparently how customers tended to see OnStar before anyway, according to GM’s chief marketer for digital business, Laura Thornton:

Amid that transition, the automaker in recent years considered how it could help consumers understand what GM’s connected vehicle future will look like, said Laura Thornton, marketing director for GM’s digital business and OnStar. Consumers have begun to associate OnStar with in-vehicle technology generally, she said, and GM saw a role for OnStar as the “tech ingredient brand” inside its lineup that powers consumer experiences and creates value.

“This campaign is our first attempt at really reintroducing that brand role for OnStar,” Thornton said. “You’ll see a new look, a new design, a new messaging strategy, a different way to talk about the products in this space and kind of an underlying hint of innovation and technology and that electrification future that we have ahead of us.”

Silmo Bonomi, the chief creative officer at creative agency Campbell Ewald working on the initiative with GM, summed up the rebrand by saying “every single time that you get a notification, your car’s going to get better. And you can make your car better on your own terms, in your own way.” Friend, how do you think people tend to regard notifications on their phones, let alone for system updates? In any case, the campaign kicks off today. Be safe out there!

Reverse: Apollo 11

On this day in 1969, 54 years ago…