Reuters Automotive USA: Automaker highlights

This year’s Reuters Automotive USA event in Detroit (#reautousa) offered an opportunity to hear from suppliers, analysts, and automakers as the auto industry faces unprecedented levels of chaos and uncertainty. Here are some of the key automaker insights I came away with:

Rivian’s CFO Claire McDonough was optimistic as the company prepares to launch the $45,000 R2 but noted that Rivian was not yet a household name—and that needs to change. She pointed to Rivian’s strong vertical integration as a key strength and claimed they are in a better position than others to respond to the expected chip shortage. Because the original R1 supplier deals were negotiated five years ago, when Rivian was just starting, they carried a startup risk premium; that’s no longer the case, and that’s helped Rivian cut the R2’s material cost. Those lower costs—as well as increased component sharing—could also result in cost reductions for the R1 as well. The new 4695 cells and wiring harness efficiencies, as well as design-for-manufacturability, have also helped cut the R2’s overall cost. Rivian’s 1.1 million square foot expansion is complete, and launch is still on track for the first half of next year—but before that, Rivian’s AI/Autonomy Day on December 11 will preview additional technologies. She also noted that, with 95% of the miles driven in the US being in a household-owned product, Rivian has little interest in the robotaxi market at the moment and will focus on the consumer side of things.

Lucid Motors CEO Marc Winterhoff was equally optimistic and confirmed plans to be the first B2C vehicle with Level 4 autonomous capability—but wouldn’t specify a date. The end of next year will bring “hands off/eyes off/mind on” capability to Lucid products, and the company is enthusiastic about the robotaxi partnership with Nuro and Uber. Production continues to ramp up as Lucid works to fulfill Gravity orders and acknowledges that the production target of 18-20,000 units this year means that Lucid has its work cut out for it during Q4. Material cost for the new midsize platform—which will source three new entries—is on track, and that vehicle will also be built at the company’s new Saudi Arabia plant. Finally, like Rivian, Lucid is working on a drive unit that doesn’t require any rare earths to reduce dependence on China.

Volkswagen Group of America CEO Kjell Gruner acknowledged that the plan to leapfrog hybrids and jump straight into EVs has not worked out as expected—and quoted Mike Tyson, who said, “Everybody has a plan until you get punched in the face.” He confirmed strong hybrid variants of the Tiguan and Atlas are under development—and it should be noted VW just announced their first strong hybrid, the compact T-Roc SUV. VW appears to be less interested in plug-in hybrids, noting that those require changes in driver behavior. The brand—which developed a strong counterculture image in the US in the 1960s—is now looking to attract “unconventional achievers”.

Mercedes-Benz USA CMO Melody Lee talked about the brand’s pivot to “the power of choice” as they add more hybrid entries to their portfolio (and leveraging learnings from Formula 1 to build better plug-in hybrids). Mercedes also joins VW, Hyundai, and Ferrari in their stated intent to bring knobs back, while noting their new MB.OS is unique in offering AI capabilities from both Google and Microsoft. She also talked up Manufaktur, Mercedes’ build-to-order customization house, which isn’t quite as bespoke as Porsche but is gaining in popularity.

Stellantis global design chief Ralph Gilles noted the use of new technological tools in product development, including using AI to better understand customer frustrations, and gaming software like Blender to aid designers in creating more iterations faster. And although the company initially looked at AI “sideways”, it’s now been trained on the brands’ own design (including historical products) and can now generate new and unexpected (but still relevant) ideas. Stellantis now has over 200 people working on user experience design, versus about 15 people ten years ago, reflecting the increased importance of this function. He also talked about removing chrome from the facelifted Jeep Grand Wagoneer, which reflected both changing aesthetic tastes and opportunities to reduce cost and environmental impact.

Kudos to Reuters Events for pulling together a diverse group of speakers and topics and providing a forum to share insights and ideas; I look forward to next year’s event.

#reautousa #lucid #rivian #mercedes #stellantis #vwgroup #volkswagen #automotive