40 Under 40 Honorees Find Ways to Stay Flexible While Navigating Dual Crises
Two major crises in as many years have tested the mettle of this year's crop of Automotive News 40 Under 40 honorees. The coronavirus pandemic and a lack of new-vehicle inventory because of the global microchip shortage have forced these young auto retail leaders to think on their feet and adapt, while learning valuable lessons. While the effects of the pandemic, for the moment, appear to have eased in the U.S., consumer demand for vehicles is strong at a time that automakers are struggling to fill showrooms. "Our lot has never looked so empty," said Paige Fox, vice president at Fox Auto Team in El Paso, Texas, adding that the store regularly gets calls asking whether it has closed. Despite that, business has been great, Fox said. "It could be even better if we had the inventory," she said. The situation is similar at stores across the U.S. Read more here.
Infiniti Backs Off of e-Power for the U.S.
Infiniti has ditched plans — at least for now — to bring a promising serial-hybrid technology to the U.S. The decision could delay the luxury brand's electrification plans in its biggest market. According to Automotive News, the technology, now popular in Japan under the name e-Power, is a central pillar of parent Nissan Motor Co.'s electrification strategy. Introduced in Japan in late 2016, e-Power uses a battery-powered electric motor to drive a vehicle's wheels, and a gasoline engine to charge the battery. But after talking up e-Power's benefits for years, Infiniti informed U.S. dealers it will hold off on bringing the technology to the U.S. An Infiniti spokesman confirmed the decision, noting it was part of a "reevaluation and reset" of the brand's product and powertrain strategy. Read more here (Source: Automotive News).
Inflation is Still High. Used Car Prices Could Help Explain What Happens Next
Surging prices for used cars were a major driver of inflation earlier this year. Now, reports NPR, there are signs those price hikes may be shifting into reverse – and that could provide important clues about where inflation is headed next. The prices dealers pay for used cars at massive auctions across the country finally dipped in June after hitting record highs in each of the four previous months. Consumer prices spiked 5% in May, the highest annual increase in nearly 13 years. Much of that increase was driven by factors that are expected to be short-lived. Used cars, for example, have been in high demand this year, partly because of a shortage of new cars. The retail price of used cars jumped more than 7% between April and May, accounting for about a third of overall inflation that month. Since then, however, the buying frenzy has slowed. Inventory at used car lots has returned to more normal levels, and demand at wholesale auto auctions is less intense than it was earlier this year. Read more here (Source: NPR).
Millions of EVs Are Coming – But Can the Electric Grid Handle Them?
EV supporters can’t get past one of the biggest issues facing the shift to battery-electric vehicles: Can the grid handle it? According to The Detroit Bureau, the U.S. electric grid has been hammered this year by a series of extreme weather events, including the unexpected February ice storm that left much of Texas in the dark — state regulators again last month warning of potential outages. The U.S. reached “the tipping point” this year, according to General Motors Chairman and CEO Mary Barra, with demand for battery-electric vehicles growing at a record pace, spurred in part by the debut of an assortment of new models like the Chevrolet Bolt EUV, the Volkswagen ID.4, and the Ford Mustang Mach-E. But not everyone is convinced she’s right. Studies find consumers are still reluctant to buy BEVs due to high costs, lack of a nationwide charging network — and growing concerns about the energy grid. Read more here (Source: The Detroit Bureau).
Geely's Volvo Cars Lifts Stake in EV Maker Polestar to 49.5%
Sweden's Volvo Car Group has bought additional shares in electric car maker Polestar, taking its holdings in the electric vehicle (EV) maker controlled by Volvo's parent company, the Chinese automaker Geely, to 49.5%. The investment comes after Polestar raised $550 million in its first external funding round in April, reports Reuters. "The move reflects Volvo Cars' strong conviction in Polestar's positioning and exciting potential in the high growth segment for premium electric vehicles," Volvo said in a statement. Shares in Tesla are down 9% this year amid concerns of increased competition from traditional car makers in the production of electric vehicles. The purchase sees Volvo's stake returning to the level it previously had, before the April funding round, when Polestar received a cash injection from Chinese investors Chongqing Chengxing Equity Investment Fund Partnership and Zibo. Read more here (Source: Reuters).
Around the Web
What Are the Best Used Cars for $10K? [Cars.com]
Chip Shortage's Latest Toll: A Shortage of Work Trucks [WSJ]
The Best Cars Nobody Buys [Consumer Reports]
Hyundai Veloster N Will Be the Only Veloster Available in 2022 [Autoblog]
