the business

A Decade Later

The Pacific ocean, somewhere near Santa Cruz California

The Pacific ocean, somewhere near Santa Cruz California

Last month, an anniversary passed in my life that I neglected to hightlight. On September 20, 2006, my first piece of writing for which I actually got paid was published on the still-nascent  AutoblogGreen. That began my transition from engineering to writing and talking about transportation technology. Over the course of the next four years I published nearly 7,500 posts on Autoblog and AutoblogGreen, along with a few hundred on the now defunct I also co-hosted more than 100 podcasts, attended countless media events, have driven hundreds of different cars and trucks and made many wonderful colleagues and friends along the way.

In the years since my departure from Autoblog, I’ve been fortunate to contribute to other publications including Popular Mechanics, Motor Trend, Road&Track, Car and Driver and most recently Forbes. I also spent several years on the other side of the business in product communications learning how the companies I cover tell their stories.

I’m incredibly grateful that a recruiter for Navigant Research reached out to me two years and set me on the path to being an analyst, a role where I can now provide companies with guidance on setting the strategies for the future of transportation.

A decade ago, my first media trip brought me out to Monterey, Calif. with Honda to learn about and drive the FCX fuel cell concept at the Laguna Seca race track. This weekend I’m back in the Monterey area for the weekend with my wonderful wife, who has been so supporting over the good and difficult times of past ten years before we head back into San Francisco for a week of talking about the future of transportation.

Saving Fuel and CO2 vs NOx Emissions With a Volkswagen Diesel


We bought our 2010 Volkswagen Jetta TDI wagon in November 2009 in large part based on the potential money we’d save at the pump. In the wake of the current diesel emissions fiasco and the fact that until recently, diesel has consistently been more expensive than gasoline, last night Julie? asked if we’ve even managed to save any money with this car.

I went to the Energy Information Administration website (an outstanding resource for historical data on fuel prices and supply) and downloaded the monthly average price data for the midwest which is available in a handy excel spreadsheet. You can also get national and regional data for annual and weekly averages. Based on the total mileage accumulated over 70 months and the EPA combined fuel economy estimates of 34 mpg for the diesel and 25 mpg for the 2.5-liter five-cylinder that was also available at the time I worked out the average monthly fuel consumption over the time we’ve owned the car. We have used approximately 23.1 gallons of ultra-low sulfur diesel per month and would have used about 31.4 gallons of regular gas with the five cylinder.

Putting that up against the average monthly price of regular gas and diesel we would have spent approximately $7,274 on gasoline. By comparison, despite the higher pump prices most of the time, I estimate that we’ve spent roughly $5,732 on diesel fuel, a savings about $1,540 dollars. The diesel emitted approximately 16.3 tonnes of CO2 over the past six years while the gasoline-fueled version would have output almost 19.4 tonnes, so we’ve saved roughly three tonnes of CO2 as well.

Does that justify all the extra NOx we’ve emitted? I have no idea. That’s one of those trade-offs that you simply can’t measure directly. Having paid a roughly $2,000 premium up front to buy the diesel engine, the economics are still an open question right now. A week ago, the $3,500 in extra resale value of a diesel compared to a gas engine would have more than covered the $500 difference we’re at right now in fuel savings and we would have been way ahead financially. A few weeks from now when this all sinks in, who knows what this car will be worth.

I don’t have answers yet, just some random data points. Stay tuned.

New iPhone Upgrade Program May Point to the Apple Car

silvercar+appleWhen I first started speculating on the idea of an Apple car last February as rumors about Project Titan emerged, I was enormously skeptical that it would ultimately happen. However in the days since Apple’s most recent media event where they announced the iPhone 6s, I’ve begun to rethink my assessment. I now see a way that might lead to Apple’s entry into the car business based on their latest approach to selling smartphones.

2016 Honda Pilot – Designed to Fracture Wheels, Not Knees

Pilot SOT Action ShotWhen I was in my high school auto mechanics class learning how to rebuild carburetors, grind valve seats and set the valve clearances on a Triumph TR7, I was already dreaming about being an engineer in the industry and developing new cars. One of the most important lessons I learned from those years in the garage was that any engineer should be required to assemble and service a product before it goes into production. It’s become apparent to me over the past 35 years that few if any engineers have ever picked up a wrench. Fortunately, Honda seems to have heard that message and implemented it in the design of the 2016 Pilot crossover.


Tesla Goes to the Stock Market to Replenish Cash

Tesla-Motors-symbolThe car business is an enormously expensive place to play. Building factories can cost anywhere from hundreds of millions to billions of dollars, especially if you want to mass produce anything. In late 2008 and early 2009 at the height of the financial crash, we saw General Motors go from $16 billion in cash reserves to virtually nothing in a matter of months as they raced toward bankruptcy. Tesla Motors is now standing on the precipice of major investments to grow the company and they have been spending their reserves at such a prodigious rate that they too need to raise more cash.

In the recently released Q2 2015 earnings report, a more troubling aspect than the operating losses which have been typical of the company’s finances from day one, was the cash burn rate. Tesla went from having $1.905 billion on December 31, 2014 to just $1.15 billion on June 30. A good chunk of this went to paying for equipment in the Fremont, California factory for production of the Model X crossover and ongoing construction of the “Gigafactory” battery plant near Reno, Nevada.

However, the outflow is just getting started as the company prepares to start equipping that $5 billion battery factory (although a significant chunk is coming from Panasonic and other suppliers) as well as developing and producing the more affordable Model III. Tesla has publicly stated a goal of expanding production from 50,000 units this year to 500,000 by 2020. While selling half a million cars would raise significant revenue, they have to spend a lot of money before they ever get there.

To help keep things going in the near term, Tesla announced plans today to issue $500 million worth of new common shares in the company. CEO Elon Musk has committed to spending $20 million of his own money to buy new shares. Given the enormous investments that will be required for equipment and engineering in the next five years, $500 million seems like a pittance and it likely won’t be the last time we see Tesla going to either the equity or debt markets to raise more money. In this case, Tesla’s stock price has already taken a hit in the last few weeks dropping from a high of $282 on July 20 to close at just over $238 yesterday. Right now they are probably balancing the need for cash with not overly diluting the stock and sending the price down even faster.

These are perilous times for Tesla Motors.

Tesla AutoPilot Cost and Take-Rates

Model S autopilot

Last October, Tesla Motors CEO Elon Musk stepped onstage in Los Angeles to announce the new P85D edition of the Model S and a new semi-autonomous driving feature called AutoPilot. Surprisingly, Musk told the audience that, starting two weeks prior to the event every Model S coming off the line was already equipped with the package of radar, camera and ultrasonic sensors that would enable AutoPilot. The engineers were still working on the software and it would debut in 2015. It’s now August 2015 and AutoPilot still hasn’t been turned on but the company’s second quarter earnings release did make an interesting mention of the new capability.


Hyundai Has Paid Out for Hack Information

Hyundai America President and CEO David L. Zuchowski

Hyundai America President and CEO David L. Zuchowski

In the wake of last week’s report where security researchers Charlie Miller and Chris Valasek remotely took control of a 2014 Jeep Cherokee via its telematics system, the auto industry is now on cyber-security high alert. During a regional press preview for the new 2016 Tucson, Hyundai America President and CEO Dave Zuchowski was asked about it. As expected Zuchowski said that the safety and security of customers is always a top priority for the company but then went on to give a surprising response to my follow-up question.

When I asked Zuchowski if Hyundai would follow the lead of technology companies such as Facebook, Microsoft and Google and establish a bounty program for responsible disclosure of security vulnerabilities, he acknowledged that it was under consideration. In addition, he said that while Hyundai doesn’t have a formal program at this time, the company has previously paid researchers on an ad hoc basis for disclosing vulnerabilities. Zuchowski didn’t offer any additional details, but the acknowledgement that the company has gone down this path is a good thing.

I first proposed the idea of a bounty program to OEM contacts back in 2011 and have done it repeatedly since then to no avail and also wrote about it here nearly a year ago.

First Dedicated Autonomous and Connected Vehicle Test Track Opens in Ann Arbor

Yet another automotive proving ground opened in Ann Arbor, Mich. today, but the Mobility Transformation Center (MTC) is quite different from existing tracks. There is no shortage of automotive test tracks scattered around southeast Michigan mostly operated by automakers and larger suppliers that do everything from salt baths to high-speed stability to running over pounding potholes. These facilities tend to be highly secured facilities where outsiders are rarely welcome. Ford engineers don’t get to hang out at GM’s Milford Proving Ground and GM people are persona non-grata in Dearborn. At MTC Mcity course, all of these engineers will have a place where they can come together and collaborate along with researchers from the University of Michigan Transportation Research Institute (UMTRI).


Would Lincoln Ever Challenge for Overall Le Mans Victory?

Lincoln_LE_MANS_6A day before the 2015 running of the 24 Hours of Le Mans, Ford Motor Company executive chairman Bill Ford announced that the company bearing his family name would be partnering with Ganassi Racing to field four of its new GT supercars in the French enduro next year. Wall Street Journal auto critic Dan Neil wrote about this on the newspaper’s website on Sunday after the race. More interesting perhaps was what he wrote when he linked to his Journal piece on Facebook.

There he said that he felt the GT should be badged as a Lincoln rather than a Ford to help support the premium brand. I’d like to suggest a different strategy for what Ford might be thinking here. Full disclosure, when I left the Ford communications team in mid-2014, I was privy to some future product information which had not yet been revealed at the time including the Lincoln Continental, Ford GT, Focus RS and Shelby GT350. All of that information has now been publicly announced and what comes next is pure speculation on my part with no basis in fact.


The 2016 Chevrolet Malibu Should be a Serious Midsize Player, up to 48 mpg

cq5dam.web.1280.1280There was a period in my lifetime when General Motors absolutely dominated both car sales overall and midsize cars in particular. The Oldsmobile Cutlass was the Toyota Camry of its era and the Chevrolet Malibu wasn’t far behind. While it’s unlikely that the Malibu is going to unseat Toyota’s perennial sales leader any time soon, the all-new 2016 edition is Chevrolet’s best shot at breaking back into the top five in many years.