Auto Industry News: New Fuel Economy Standards, First Quarter Auto Sales, Detroit Auto Show Status, New EVs and RAM Rebel TRX Update

The current administration finalizes its new fuel economy standards just as the auto industry releases its dismal Q1 sales numbers. Also amid the global health crisis, organizers cancel the Detroit Auto Show, as the venue becomes a field hospital. On the lighter side of things however, GM and Honda announce some exciting new EV development and more details emerge about the upcoming RAM Rebel TRX.

Auto Emissions Standards Rolled Back

In the wake of the largest corporate stimulus package in American history—passed in the midst of a global and economic health crisis—the auto industry received another massive wave of news last week.

The Trump administration finalized and announced its plans to roll back Obama-era emissions standards, dropping the required yearly carbon dioxide emissions reduction standards from 5 percent to 1.5 percent.

The change has proven to be controversial, with policymakers and advocacy groups from both sides sounding off.

The administration insists the new standards “correct” Obama-era policy that was costly for automakers. “By making newer, safer, and cleaner vehicles more accessible for American families, more lives will be saved and more jobs will be created,” U.S. Secretary of Transportation Elaine L. Chao said in a statement. Fellow supporters agree, claiming that these targets are more realistic.

Thomas Pyle, president of the American Energy Alliance, is all for the new standards. In a statement, he said the Obama-era mandate was “impossible to achieve without dramatically altering the automobile market or making the cost of vehicles out of reach for most American families. This new … rule will make cars more affordable for consumers at a time when they need it most.”

However, consumer and environmental watchdog organizations (and even the EPA’s own scientific advisory board) counter that the weakened standards will lead to poorer air conditions and higher gas prices in the long-term. “This rule will lead to dirtier air at a time when our country is working around the clock to respond to a respiratory pandemic whose effects may be exacerbated by air pollution,” said U.S. Sen. Tom Carper, D-Del., in a statement. “More fuel-efficient cars are cheaper for consumers over the long run,” agrees Ann Carlson, an environmental law professor at the University of California, Los Angeles.

Critics of the rollback also argue that the new legislation will pump nearly 900 million more tons of CO2 into the atmosphere, generated by consumers burning an additional 78 billion gallons of fuel.

Even former President Obama has pushed back on the rule change on Twitter, something he doesn’t often do.

The Show Goes On

Despite the pushback, the Trump administration is standing firm and plans to push ahead—meaning this is destined for the courts. The administration has already gone ten rounds with the state of California over emissions, so you can expect to see them pushing back against these new rules. It’s likely they’ll be joined by other states who have set aggressive climate goals for the coming years.

First Quarter Sales Reports Are As Dismal As You Expected

Speaking of auto industry struggles, the first quarter sales figures for 2020 are in and, to put it bluntly, they’re uh, BAD.

Yes, we know it’s not exactly shocking that new vehicle sales have taken a dip—given that most of the country is under shelter in place rules and social distancing requirements. But we here at The Engine Block think it’s still pretty interesting to unpack the data. After all, it’s not like we don’t have plenty of time on our hands these days…

The industry actually had a healthy start to 2020. New vehicle sales were softer than years’ before, but that was to be expected. However, when March rolled around, everything stopped, leading to an alarming and abrupt drop in sales. Every automaker took a hit during the month, with automotive research group Wards Intelligence estimating an overall 27 percent drop.

The Big 3 only offer quarterly reporting, as opposed to monthly sales data. Among them, Ford reported the largest decline compared to a year ago, at 12.5 percent. Fiat Chrysler was right behind at 10 percent, and GM was at 7 percent. Among those who report monthly, declines ranged from 35 to 50 percent for March.

Now, don’t get us wrong. There’s no metric, measurement, or universe where a decline that big can be seen as good. However, if you look a little deeper, it’s not all that surprising.

A Closer Look

Interestingly, Q1 2020 numbers were just about even with Q1 2019 figures—until March. That means, the only real difference between Q1 2020 and Q1 2019 is the global health crisis, and it’s fair to say we’re not going to have another one of those for a while. (Knocks on wood, crosses fingers, throws salt over left shoulder.)

That’s why, the experts—like Charlie Chesbrough, a senior economist at Cox Automotive—aren’t all that panicked by these sales figures. “The second quarter will be the real measure of COVID-19’s impact on the economy and the auto industry,” he says. It’s hard for people to buy cars while quarantined in their homes, after all. Pair that with the current record unemployment across the country and it’s no surprise that people are holding off on any big purchases right now.

If there’s one bright side to take away from this whole thing, it’s that when this health crisis does clear up there will be LOTS of opportunities to buy. Automakers like GM and FCA are already offering crazy incentives. And with U.S. production basically grinding to a standstill in favor of helping produce masks, medical equipment, and ventilators for those in need, dealerships will be looking to move stock come August.

So, just hang out in your living room for a little bit longer, watch your streaming service of choice and don’t sweat the numbers too much while we wait this thing out. It’ll be a buyer’s market in no-time.

Detroit Auto Show Cancelled, Venue To Become Field Hospital

In the least surprising news development we’ve seen this week, the Detroit Auto Show isn’t going to happen in June.

Traditionally held in January, the show recently underwent a schedule change in the hopes of avoiding the cold Michigan winter and drawing some bigger crowds. Now, what was planned for this summer has been postponed a full year, as the venue is set to be converted into a 1,000-bed field hospital.

Considering the city of Detroit has the highest number of confirmed cases in Michigan (more than 4,000), this is a smart move from everyone involved. “The health and welfare of the citizens of Detroit and Michigan is paramount,” said the show’s executive director, Rod Alberts, in a memo. “TCF Center is the ideal location for this important function at this critical and unprecedented time.”

This cancellation follows similar reactions in Geneva, Beijing, and New York, as large auto shows—notorious for affording very little personal space—close up shop. And while the move is not surprising, it must sting for Detroit organizers, as this year’s show was intended to be a “comeback” of sorts. Previous iterations have posted dismal attendance numbers and continually-dwindling new vehicle unveilings.

While it’s unfortunate we won’t get to see Detroit Auto Show organizers put their grand plans into motion this summer, the safety of the public is much more important at this time. It’s good to see these big shows putting everyone’s health at priority.

After all, there’s always next year.

On The Bright Side…

It can’t be all doom and gloom all the time, right? Here are a few exciting nuggets of auto industry news to help you get your mind off global health concerns.

GM Partners With Honda To Make Two New Electric Vehicles at GM Plants

Even while automakers are teaming up with medical companies to produce life-saving gear for sick people and essential workers, they’re still out here wheeling and dealing for the future. On Thursday, Honda announced it will team up with GM to develop two brand new, all-electric vehicles.

The new vehicles will be designed by Honda and sport the automaker’s “driving character,” but will use GM’s recently unveiled global EV platform, powered by Ultium batteries. They will also offer GM’s OnStar system, as well as its highly-praised Super Cruise driver-assist technology.

“Production of these Honda electric vehicles will combine the development expertise of both companies, and they will be manufactured at GM plants in North America,” reads a Honda press release. “Sales are expected to begin in the 2024 model year in Honda’s United States and Canadian markets.”

The two automakers already share a relationship, working together on fuel cells and self-driving projects. For GM, in particular, this is a logical next step. About a month ago, CEO Mary Barra said the automaker planned to spend $20 billion between now and 2025 on EV development. That translates to roughly $3 billion a year.

Dodge Ram Rebel TRX Details Emerge

Debuted as a Raptor-fighting concept in 2016, FCA officially confirmed the existence of the RAM Rebel TRX late last year. The automaker remains mute on any details but according to a variety of sources, the off-road pickup will sport a 707-hp supercharged 6.2-liter Hemi V8 mated to an updated version of the ZF-sourced eight-speed automatic transmission.

Mopar Insiders reports that the exterior won’t deviate too much from the concept, as is clear from the wider front fenders with vents by the headlights. “According to our sources, the new TRX will wear a new variant of the Rebel grille which will incorporate the headlights from the Limited Black model.”

That wider stance necessitates amber-colored marker lights. But instead of placing them in the grille (like on the Raptor), “Ram designers incorporated the center three-lights into the top of the new massive ram-air scoop in the hood,” adds Mopar Insiders. In addition to the new performance hood that will help that Hellcat breathe, we expect to see other exciting upgrades like larger-diameter dual blacked-out exhaust tips, ARB Air Lockers at both axles, Bilstein shocks at all four corners, and bigger brakes.

Expect a luxurious interior, as well as aluminum paddle shifters on the back of the steering wheel. “These are similar to those found on the Alfa Romeo Stelvio Quadrifoglio and are extended length,” says Mopar Insiders. Additionally, the TRX will get a center console-mounted shifter in lieu of a rotary dial shifter.

All this swag won’t come cheap, though. Rumored pricing is around $70,000 with production supposedly starting in September.