Good morning! It’s Wednesday, March 20, 2024, 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: Ford Pivots To Smaller EVs
A lot of noise has been made in recent weeks about the electric vehicle strategy America’s automakers are rolling out. They seemingly all decided it was a great idea to start with electric pickup trucks and other massive motors, until they didn’t quite take off as expected. Now, Ford is backtracking on this drive for big EVs and will reportedly redirect resources to develop smaller, more affordable electric models.
Ford has reportedly put plans for a new three-row EV on the back burner while it instead works on something smaller, reports Automotive News. The site claims that the Blue Oval could release a new model built on a new “small vehicle platform as early as late 2026.” As Automotive News explains:
Ford Motor Co. is delaying planned three-row electric vehicles similar in size to the Explorer and Lincoln Aviator as it focuses on smaller, more affordable EVs, according to people familiar with the company’s plans.
The three-row EVs, to be built in Canada at Ford’s planned Oakville Electric Vehicle Complex, were expected to go on sale in early 2025. Instead, Ford is shifting to launch an affordable EV on a small vehicle platform as early as late 2026, one of the people said.
That small crossover is expected to be built at the company’s Louisville Assembly Plant, the person said. The UAW and Ford agreed as part of its 2023 labor contract to add a new EV product to Louisville before the deal expires in 2028, although the parties did not specify timing.
The pivot to smaller electric models is all part of Ford’s plan to remain competitive against Chinese electric car makers, which are seen as a big threat to American automakers thanks to their *checks notes* bargain prices.
As such, Ford boss Jim Farley said that “smaller, cheaper EVs are needed to compete with Chinese automakers” and help Ford turnaround its loss-making electric vehicle arm.
2nd Gear: White House Softens Fuel Economy Rules
The White House has been working to update its emission targets in recent weeks, with rumors swirling that it’s about to delay some ambitious milestones that could help cut America’s emissions from transportation dramatically. Now, it sounds like the Biden administration may be about to scale back rules related to average emissions across an automaker’s lineup, which would force some to scale back production of gas-powered models.
The White House began changing tact on emissions targets after it emerged that many American automakers were way off meeting the new standards, reports Reuters. As such, new rules will come in to gradually reduce the equivalent fuel economy of electric vehicles. As Reuters explains:
The original Biden administration proposal would have lowered such “petroleum-equivalent fuel economy” ratings for EVs by 72% in 2027. The final rule will instead gradually reduce the equivalency ratings through 2030 by a total of 65%, giving automakers more time to adjust.
The industry cheered the Energy Department announcement. John Bozella, chief executive of the auto trade group Alliance for Automotive innovation, said the earlier proposal would “perversely disincentivize the production of battery electric vehicles” by scaling back EV fuel-economy credits that helped automakers meet federal regulations.
The new federal rules will govern all automakers selling U.S. vehicles but the biggest impact will be on the Detroit Three because of their heavy reliance on sales of large trucks and SUVs.
It was warned that the previous rules could have left American automakers like General Motors and Ford facing billions of dollars in fines for failing to meet average efficiency targets across their ranges.
3rd Gear: Chinese EVs Have U.S. Automakers Worried
The biggest threat to America isn’t rising sea levels or dramatically climbing temperatures, it’s cheap Chinese EVs. Well, that seems to be the big worry if you’re an automaker over here at least. A new report from Bloomberg has outlined the way affordable models like the BYD Seagull have thrown the cat among the pigeons. As the site explains:
The car’s most extraordinary feature, though, is its $9,698 price tag. That undercuts the average price of an American EV by more than $50,000 (and is only a little more than a high-end Vespa scooter). Such aggressive pricing by BYD, which surpassed Tesla Inc. in late 2023 to become the world’s largest producer of electric vehicles, is indicative of how Chinese auto manufacturers will likely force US makers to pivot away from mainly producing expensive second cars for the affluent and toward more reasonably priced EVs for the Everyman.
Just as the long-feared prospect of a revolutionary EV from US tech giant Apple Inc. has receded, American carmakers now face a possibly greater challenge from Asia. China, long a manufacturing hub for Western companies’ products, is hellbent on expanding its own companies’ reach around the globe. It’s already the biggest market for EVs, and it’s using that scale and manufacturing know-how to help expand sales of competitively priced Chinese models to an increasingly climate-conscious world.
Thankfully, American automakers have a firm line of defense against Chinese EVs in the form of the U.S. Government, which has so far imposed strict sanctions against their import into the country. However, that won’t stop price trends from traveling into the U.S.
As Bloomberg warns, China accounts for 70 percent of global EV sales, and if models are legitimately affordable in the country, buyers around the world will soon start demanding similar pricing for models sold closer to home.
4th Gear: Stellantis Recalls 38,000 Cars Over Airbag Issues
After BMW and Toyota recalled models over airbag issues and Ford was forced to recall its recall of faulty airbags, Stellantis has become the latest automaker to recall thousands of cars over safety issues relating to airbags.
The American automaker has issued a recall for 38,000 cars including Ram 1500, Jeep Wrangler and Jeep Wagoneer models. Affected cars may have faults on the steering column that prevents the airbag from deploying correctly, reports Reuters. According to the site:
Chrysler is recalling 38,164 vehicles due to an issue which can prevent the driver’s airbag from deploying in a crash, the U.S. National Highway Traffic Safety Administration (NHTSA) said on Wednesday.
The Stellantis-owned automaker is recalling certain 2023-2024 Ram 1500, Jeep Wrangler and Jeep Wagoneer vehicles, among others, as the steering column control module on them may not be welded properly, potentially affecting the driver’s airbag, the US regulator said.
Recalled vehicles will be inspected by dealers across the country, and those found to have defective parts will be repaired free of charge, Repairs could include replacing the steering column control module if necessary.
