Auto Industry News: Summer Travel Plans Change, EV Registrations Jump, & Carvana Has Some Problems
Inflation continues to play dirty with the cost of living for millions of Americans. And while most people find ways to save a penny at the pump or in the grocery store, it seems less are willing to compromise on their long-awaited summer vacations. Recent data shows folks are making some creative changes to combat higher travel expenses.
Meanwhile, those rising fuel costs are giving EVs a sales boost. Registration numbers for Q1 2022 hit record levels. Those of you considering pre-owned for your next ride, however, may want to steer clear of Carvana. The market disrupting online used vehicle retailer seems to be standing on some incredibly thin ice. The Engine Block has these stories and more — including some interesting new happenings on the self-driving front.
Summer Travel Gets Pricey… and a Little Dicey
Gas prices in America continue to climb, reaching new record highs. Last clocked at $4.596, AAA reports that pump prices are now above $4 in every state. With Memorial Day set to kick off peak summer travel season, forecasters say you should plan for expensive fuel to stick around – as well as higher hotel prices, airfare, and food costs.
Creative Solutions
Record inflation is beginning to impact travel plans, though perhaps not as drastically as one might expect. According to Kampgrounds of America’s Monthly Research Report, most campers admit fluctuating fuel costs are a concern but still plan to hit the road this summer. In lieu of cancelling or postponing trips, 32% plan to simply camp closer to home, while 25% plan to take fewer trips but stay for a longer stretch of time. An impressive 29% of those surveyed said higher costs will not change their camping plans at all.
AAA reports a similar kind of attitude toward Memorial Day travel. The auto club notes that between May 27 and May 31, more than 37 million people are expected to travel 50 miles or more from home. This marks an increase of 60% from last year when only 23 million traveled, the lowest on record since AAA began recording in 2000.
Be Careful Out There
While projections show air travel increasing six times over 2020 levels, most Americans will still rely on road tripping to get to their Memorial Day destinations. AAA reports nearly 12 million more Americans will travel by car this holiday than in 2020. (However, this is still 9% less than in 2019.)
In addition to prepping for higher gas prices, travel experts suggest avoiding evening commute times and planning routes that avoid metro areas. Overall travel may be down in cities, but traffic congestion has returned to pre-pandemic levels and delays are expected to be pretty brutal this MDW.
Additionally, it is wise to stay rested and on high alert. Federal safety watchdog NHTSA estimates 42,915 people died in motor vehicle traffic crashes in 2021, a 10.5% increase from 2020 and the biggest year-over-year jump ever recorded.
EVs on the Rise
Between sky-high gas prices and a national EV agenda, it is perhaps unsurprising to learn that more consumers are showing an interest in electric vehicles. However, the rate at which they are being adopted is objectively impressive. Car registration data from Experian shows EV registrations rose 60% in the first quarter to 158,689, taking a record 4.6% share of the light-vehicle total. This bump comes in spite of near-empty dealer lots and record-breaking new vehicle prices which have driven overall vehicle registrations down 18%.
Among the top-ten models, Tesla remains the dominant brand. The automaker took four spots on the list, as well as the top number of new vehicle registrations at 113,882. But there are some interesting contenders elbowing their way in, most notably sister brands Hyundai/Kia which hold three spots on the list collectively.
Even though Kia’s 8,450 registrations trailed Tesla by a long shot, it was enough to bump the South Korean automaker into the #2 slot. Ford came in third with 7,407, thanks to its popular Mach-E. Expect the Blue Oval’s presence to grow even more now that electric F-150s are landing in driveways. Nissan and VW took the remaining two slots with 4,401 and 2,926 registrations, respectively.
Buckle Up
New product continues to fuel growth – and there is an onslaught of freshly-minted EVs entering the pipeline for 2022 and 2023. From capable pickups (F-150 Lightning, GMC Hummer EV) to luxury SUVs (BMW iX, Cadillac Lyriq, Genesis GV60), not to mention all-new automakers entering the fold (Lucid, Rivian, Fisker), consumers are looking at a glut of choices.
Many factors continue to complicate adoption rates, such as charging infrastructure, high prices, and an upside-down supply chain, but forecasts for EVs remain high. Automotive executives say more than half of their sales will be electric vehicles by 2030, which tracks with the White House’s ambitious plans. Industry analyst IHS Markit is a little more cautious, though. They estimate 45% of new car sales “could” be electric by 2035.
Did you know…?
New research shows that Vermont is the easiest place to charge an electric car. With a population of less than 650,000 people, the state has 313 total charging stations – averaging out to the highest per capita rate of public charging availability in the U.S.
Whether your truck is EV or ICE, sporting a steel or aluminum truck bed, Bed Rug liners offer ideal protection. Don’t let the plush appearance fool you, these liners are tough enough to stand up to bad weather, road debris, and heavy-duty cargo. Check out the video to learn more, or head to bedrug.com.
Carvana May Have Bitten Off More Than It Can Chew
The online used-vehicle retailer known for its giant glass car vending machines, has enjoyed a pretty wild trajectory lately. Founded in 2012, the company grew its revenue 1000x in just eight years. It sits atop the list of biggest digital retailers in the U.S., hailed as a market disruptor of traditional dealership infrastructure.
However, what goes up must come down. And lately, Carvana seems about to tumble like a house of cards.
Big Spending, Little Income
As we reported back in March, Carvana made the bold decision to purchase ADESA, the country’s No. 2 auction company, in a $2.2 billion cash deal. At the time, some automakers and dealers found the idea of a retailer-owned auction to be a conflict of interest and decided to sever ties with ADESA. They likely felt validated by their decision when, only two months later, the Wall Street Journal reported Carvana was struggling to sell the bonds necessary to actually fund the acquisition – largely because the company’s disappointing Q1 results couldn’t attract enough investors. (Yikes.)
The company was more or less “saved” by a giant investment firm, which scooped up $1.6 billion (or roughly half) of the junk bonds, and completed the ADESA purchase on May 10.
Not Cool, Carvana
That same day Carvana announced it was laying off 2,500 employees, or about 12% of its work force, “to better align staffing and expense levels with sales volumes.” (Or in other words, to alleviate the recent massive cash burn.)
Also on that same day, Illinois suspended Carvana’s license to sell vehicles in the state.
The Secretary of State’s police department opened an investigation after about 90 consumer complaints alleged the company failed to properly transfer titles for sold vehicles and incorrectly issued out-of-state temporary registration permits. Last August, Carvana saw its North Carolina license temporarily blocked for the same reasons. In February, it narrowly escaped the same fate in Florida. Though, a sloppy transfer title is surely better than being sold a stolen car… which Carvana also did to a guy in Denver.
It’s possible the company can address its accusations of corporate incompetence and poor customer service, and still turn things around. But investors seem to have little faith. The company’s stock is down a whopping 83% since January.
Welcome to the Future
From electric vehicles to car vending machines, we really are living in the future – and it’s about to get a whole lot weirder.
Tesla Semi
Last Monday, May 16, Tesla opened up the order books for its all-electric Semi truck. Set to enter production next year, the truck will supposedly draw power from four independent motors on the rear axles, go 0-60mph in 20 seconds, and come equipped with Tesla’s popular yet controversial Autopilot semi-autonomous driving system. The automaker says the truck will be available in 300-mile and 500-mile versions, costing roughly $150,000 and $180,000 respectively.
While Tesla seems content to start taking customer money – requiring a refundable $5,000 reservation but non-refundable $15,000 deposit – there’s no actual word on a release date. That could spell a little trouble for the EV maker, as some of the world’s biggest heavy-duty truck manufacturers have plans to start delivering their own electric semi-trucks this year. Both Freightliner Trucks (a part of Daimler) and Volvo are aiming for late 2022 deliveries.
Autonomous Transport
Volvo for its part also seems to be getting a leg up on autonomous trucking. The automaker is working alongside DHL and Aurora Innovation to develop a self-driving hub-to-hub freight hauling network. Initial commercial products would use a hybrid combination of both human drivers and autonomous technology, but the ultimate goal is a true driverless “transport solution.”
Volvo believes that shipping food and critical supplies across the country without “restrictions on hours of service” (that would be the human element FYI), will create faster, more efficient and more profitable operations – all while being safer and more sustainable. That all sounds incredible, to be sure, and call us old fashioned, but we’re still having a little trouble swallowing the idea of a 12-ton metal box barreling down the highway with no one behind the wheel.
Next-Gen Lidar
The last few years have proven that full self-driving technology is a little harder than many pioneers originally thought. That said, many advancements have been made – and automotive supplier Valeo is proud to offer a new one.
You may know Valeo for its aftermarket clutch kits, air conditioning systems, and lighting solutions. But the company has a lot of moving parts, including smart mobility solutions like driver monitoring systems and hybrid powertrain systems. The company is also a leader in commercializing lidar technology. And it’s that last bit that is proving critical to the possibility of true self-driving vehicles.
Last week, Valeo announced its third generation lidar would debut in 2024 with a twelvefold increase in resolution, a tripling of range, and a much wider viewing angle that can see details that the human eye, cameras, and radar cannot, according to Automotive News.
Dubbed Scala 3, the tech was teased at the Consumer Electronics Show. Valeo says Scala 3 will enable autonomous emergency maneuvers at highway speeds up to 80 mph, as well as pinpoint objects as much as 220 yards ahead.
The Engine Block is your one-stop source for any and all auto industry news. Keep an eye on our weekly round-up of enthusiast coverage, product reviews, vehicle spotlights, auto show/expo features, and more. Be sure to check back Friday for the next Competition Corner, full of must-see June auto events.
