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PAYOFFS (AND PERILS) OF AUTOMOTIVE PROGRESS

AS WITH ANY successful endeavor, automotive progress is essential, but not without inherent perils. My thoughts on this are prompted by recognizing a trend from articles in Automotive News, the weekly newspaper of the auto business.

The Coming Fuel Cell-Hybrid Cost Equity. In Automotive News, May 27, 2019, Nick Gibbs identified a significant trend in fuel-cell technology: In “Toyota Sees Fuel Cell Costs on a Par with Hybrids,” he quoted Matt Harrison, Toyota’s European head of sales.

“As with all automakers selling in Europe,” Gibbs wrote, “Toyota needs to progressively reduce carbon dioxide emissions from its new-vehicle fleet to comply with increasingly tougher targets mandated by the European Union.” Fuel-cell cars are seen as one means of meeting these targets.

One aspect of this is the falling cost of the precious metal platinum. Gibbs quotes supplier Robert Bosch in saying future fuel-cell designs will need only the same amount of platinum as in a current diesel catalytic converter.

Toyota’s Multidirectional Efforts. “Toyota,” Gibbs wrote, “has the lowest average CO2 of any mainstream automaker, as ranked by JATO Dynamics [an international specialist in automotive business intelligence.]”

Also, Hans Greimel, Automotive News Asia Editor, assessed Toyota’s leadership strength in “Akio Toyoda Seasoned by Decade of Fire,” June 24, 2019.

Akio Toyoda, Nagoya, Japan-born 1956, president of Toyota Motor Corporation. He is the great grandson of Sakichi Toyoda, considered the father of the Japanese industrial revolution, and grandson of Kiichiro Toyoda, founder of Toyota Motors. Photo by Hans Greimel.

Greimel wrote that “Toyoda himself incessantly warns of the ‘once-in-a-century’ upheaval that looms with the advent of autonomous driving, electrification, connectivity, artificial intelligence, and a host of new rivals from China and Silicon Valley…. Toyoda has positioned Toyota for the wild ride by seeding billions of dollars across the world in a gamut of new-technology ventures, from Uber to AI startups.”

The Perils. “Cash-rich Toyota can afford this for now,” Greimel observed. “But Toyota will one day have to cull the losing bets from the winners. And Toyoda will have to show that the money was wisely spent and not just a scattergun gamble.”

A Premature EV Rush? As one example of auto industry bets, an Automotive News Letter to the Editor, June 24, 2019, suggested that “The EV Rush is Too Early for Customers.” Sales consultant Michael S. Smith wrote, “EVs are about five years too early. Gasoline prices keep heading down at the pump; it looks like it could drop even more next year. 2030 will be the best year for EVs to maybe take hold.”

Historical and Economic Aspects. In an Automotive News Letter to the Editor, July 1, 2019, Peter Hoffman, president, Sierra Autocars, Monrovia, California, offered historical and economic perspectives.

He wrote, “I was an engineer when Hewlett-Packard launched the HP-35, the first real electronic calculator. It was $400, which was a lot of money in 1972. But the slide rule was gone from the engineering world within a few months…. With automobiles, I am convinced we are in a different environment entirely.”

“A car,” Hoffman continued, “is not like a slide rule. There is tremendous inertia in the system—272 million cars and light-duty trucks on the road and U.S. sales of about 17 million new vehicles each year, with only a small percentage of that electric vehicles.”

Hoffman added an economic aspect: “We have $1.1 trillion in automobile-secured debt. We simply can’t change all of that quickly.”

“Even without trying to figure out where all of the electrical generation is going to come from, it will take a long time to get anywhere near dominance by all-electric or autonomous vehicles. It may be that by the time that happens, no one alive will have ever seen or used a slide rule.”

It appears SimanaitisSays remains on the forefront of something. ds

© Dennis Simanaitis, SimanaitisSays.com, 2019

One comment on “PAYOFFS (AND PERILS) OF AUTOMOTIVE PROGRESS

  1. Bob DuBois
    September 12, 2019

    As a college student in the early 50’s, I could always identify the engineering majors by the 12 inch slide rules in their cases hanging from their belts, much like a cowboy and his revolver. As a chemistry student, I could survive with my 10 inch aluminum slide rule(which I still have!) tucked in my loose-leaf notebook.

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