on Quality, Laser Welding Development, Q2 Sales Considerations, Lexus NX Hybrid & Tesla Numbers

J.D. Power Sees COVID Consequences on Quality

Let’s see. . . .

COVID had an effect on supply chains.

On people being able to go to work.

On how work was done (PPE, spacing, etc.).

On material costs.

On transport.

And on vehicle quality.

The J.D. Power 2022 U.S. Initial Quality Study surveyed 84,165 owners or leasers between February and May and asked 223 questions about their new (i.e., within first 90 days of ownership) vehicles.

The topics investigated: infotainment; features, controls and displays; exterior; driving assistance; interior; powertrain; seats; driving experience; climate.

The results: the most dismal in the 36 years the survey has been conducted.

The survey scores problems per 100 vehicles (PP 100). The lower number, the better.

Buick, at 139, has the best brand ranking. The industry average is 180. The bottom of the actual ranking is Chrysler, with 265.

(J.D. Power calculates that were there to be sufficient data to make an actual analysis Polestar would be at the bottom with a score of 328, but there is insufficient data for more than just an estimate.)

The COVID connection?

David Amodeo, director of global automotive for the firm, said, “Supply chain disruption, especially the shortage of microchips, has caused automakers to seek alternative solutions to get new vehicles into purchasers’ and lessees’ hands. In some cases, new vehicles are being shipped without some features installed.”

So for someone who gets a new vehicle—which they likely paid a whole lot more for than they might have originally have expected—and discovers that something they think is there doesn’t work because the particular microchip needed isn’t there, is probably going to ID a problem.

Plenty of infotainment problems

On the subject of problems: Infotainment systems are a massive one, at the top of the problem list and contributing six of the top 10 problems identified in the study as a whole.

And on the subject of technology, turns out that owners of battery electric vehicles and plug-in hybrids ID more problems—240 PP100 for battery electric; 239 for PHEVs—than those with internal combustion engines: 175 PP 100.

Rounding out the list

It should be noted that Dodge is in second place, at 143, and Chevy takes third, at 147.

The top luxury brand is Genesis, at 156, which puts it overall in fourth place (though it should be noted that it ties with Kia for that spot).

Notably, all of GM’s brands make the top 10, with GMC at six (162) and Cadillac at seven (163).

Oddly, with the exception of Dodge, other Stellantis brands are all below average: Ram, 186; Jeep, 199; Alfa Romeo, 211; Maserati, 255; and the aforementioned Chrysler at 265.

The best-scoring vehicle

The single vehicle with the best score?

The Chevrolet Corvette, at 101 PP 100.

Odds are, it got all of its microprocessors. And even if it didn’t, it is, after all, a Corvette so what owner isn’t going to be happy with it?

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Going Green With a Green Laser

It’s about welding copper.

Specifically, welding copper joints for BMW Group battery management electronics.

This has been regularly done by supplier Vitesco Technologies with infrared (IR) lasers. Which is a tricky process because given the reflectivity of copper, what can happen is that it reflects the beam until. . .suddenly it heats up and there can be a spattering of material, which is not beneficial for the surrounding electronics.

Enter the green laser. As in literally green light.

Over a three-year period Vitesco worked with laser supplier TRUMPF to develop the application.

“Green lasers are far more efficient for welding copper than IR lasers. The new systems require less electric power and still deliver an unprecedented stable, repeatable process with a precisely controlled depth of penetration into the copper.”—Rainer Pühl, head of operations in the Vitesco Electrification Technology business unit.

Switching the type of beam used for the BMW application results in an energy savings of 4%.

There is “virtually no” copper spatter when using the green beam, which means better production efficiency (i.e., less post-processing).

Looking ahead

Vitesco projects that depending on the application there could be an energy savings of up to 20% with the green laser.

Pühl:

“The green laser has great potential for many electrification products. In addition to electronics, this also applies to electric motors. Among other things, we can use the welding process on a highly efficient stator with 138 welding points per motor.”

Also

While there is a manufacturing (and environmental) benefit to Vitesco by using the green laser, there is also a commercial consideration:

“Our sustainable manufacturing with smaller CO₂ footprint and very stable processes is a competitive advantage. Because for vehicle manufacturers, sustainability with the highest quality is strategically relevant. That is why the use of green laser systems is important for us.”—Thomas Stierle, member of the Executive Board at Vitesco Technologies.

OEMs are interested in their supply chains going green.

In this case, a green laser helps.

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Five Interesting Things You Discover in the Sales Numbers

1.

Buick had an unmemorable Q2 2022. Total sales of the Enclave (7,885), Encore (5,124), Encore GX (9,089) and Envision (6,783) sum to 28,929 vehicles.

Meanwhile, over at GMC, it sold 28,788 Sierra HD pickups.

Buick:                     28,929

Sierra HD:              28,788

That’s right, one truck just 141 units fewer than an entire brand.

Chevy sold 14,296 Blazers. 15,938 Trailblazers.

And 32,487 Malibus.

Or said another way: the sedan outsold two CUVs combined (32,487 v. 30,234)*.

And back to the Buick-GMC example, all the Buick models are CUVs. The Sierra is a pickup.

The bloom is not off the CUV rose. But it’s not the only vehicle architecture in town, either.

*Chances are the Malibu vs. Blazer/Trailblazer sales is an anomaly predicated on microprocessors or supply chain snafus. Still, it makes some people at Fairfax Assembly happy.

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2.

About that Prius. . .

Toyota Div. sold 241,571 “electrified vehicles” in the first half of 2022.

Were it not for the battery electric bZ4x (232 units) and the fuel cell Mirai (1,358 vehicles), that category would simply be named “hybrid vehicles.”

Although the Prius was the original in its hybrid offerings, it is interesting to see how things have developed as Toyota has hybridized many vehicles.

Consider this partial list of Toyota hybrid and their first half sales:

• RAV4 Hybrid:         86,803
• Sienna:                    34,391
• Highlander:            27,809
• Venza:                     18,666
• Corolla:                   18,065
• Prius:                      14,861

Two things:

1. The Prius isn’t the lowest-selling hybrid in the Toyota lineup. That would be the Tundra Prime pickup at 1,183 units. (One guesses that as they ramp up that model the hybrid powertrain isn’t deemed critical.)
2. While the Prius sales may be eclipsed by other models, it should be kept in mind that when that car launched in the U.S. in 2000 (it appeared in Japan in 1997) it was widely dismissed as being a gimmick. That 241,571 electrified vehicles is greater than the combined first half sales of Chrysler (66,047), Dodge (84,761), Fiat (589) and Alfa Romeo (6,374) combined (157,771). (Admittedly, Jeep (379,946) and Ram (276,025) go a long way to keeping thing going at FCA US LLC.) The point is: if the Prius was a ploy, it is one with benefits that other OEMs surely would like to have.

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3.

Although Honda is best associated with the Accord and Civic—cars—the brand has transformed itself into one that should be thought about in terms of crossovers—the CR-V and the HR-V.

In the first half Honda sold 154,522 cars (including the Accord, Civic, Clarity and Insight).

In the first half Honda sold 296,661 trucks (including the CR-V, HR-V, Odyssey, Passport, Pilot and Ridgeline (with the exception of the Odyssey minivan and Ridgeline pickup, all crossovers).

Contrary to the discussion above about those Chevys, seems like crossovers are blooming.

Which is to say: Be nice to the folks in product planning because things can go every which way—fast. (E.g., How long before gas prices make pickups vocational purchases only? What happens if people suddenly think cars are fashionable?)

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4.

Volkswagen, which is probably still thought of in relation to the Beetle*, which it no longer sells, had 79.3% of its U.S. sales take the form of SUVs (Taos, Tiguan, Atlas, Atlas Cross Sport and ID.4): 62,114 vehicles.

Its car offerings—GTI, Golf R, Jetta Sedan, Passat and Arteon—had sales of 16,167.

\\

*Here’s a question:

Where were Beetles built between 1997 and 2019?

[Imagine Jeopardy music]

The Volkswagen plant in. . .Puebla, Mexico.

During that period it built some 1.7 million Beetles.

According to VW, the plant is the largest auto plant in Mexico and one of VW Group’s largest manufacturing facilities anywhere.

Now Puebla produces the Jetta, Taos and Tiguan Long Wheelbase (i.e., the version available in the U.S.; there is a short wheelbase model on offer elsewhere in the world).

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5.

And let’s face it: Some people just like gasoline and the performance it provides:

Ford reported Q2 sales of 4,647 Mustangs and 1,957 Mustang Mach-Es.

Mustang sales:        +107.5% over Q2 ‘21

Mach-E sales:          -20.6%

So both the number of units and the percentage rise give the nod to internal combustion.

For now. Q3 could be something else entirely.

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2022 Lexus NX 350h Luxury AWD

In its first two years, 100 Thieves has won multiple esports major championships in Call of Duty, made the League of Legends and Fortnite World Championships, launched the top gaming podcasts on iTunes, sold out over a dozen apparel drops, and is supported by major partners such as Cash App, Chipotle, Rocket Mortgage, Lexus, and Rockstar. The company is currently valued at $460M and has raised a total of $120M from investors including Drake, Scooter Braun, Cleveland Cavaliers Owner & Quicken Loans Chairman Dan Gilbert, Artist Capital Management, Ludlow Ventures, Green Bay Ventures, and Sequoia. 100 Thieves' mission is to give every gamer something to be proud of.—100 Thieves about page

While you may be wondering why this is here, you may have noticed in that text above a reference to Lexus.

The brand, which uses as its tagline “Experience Amazing,” might be better serviced by “Experience Surprising.”

That’s because the company has done a one-off tribute 2022 NX 350 F SPORT for the esports brand.

Which I noticed because when I saw the announcement I had a 2022 Lexus NX 350h AWD model in my driveway. Unlike the 100 Thieves paint, this had a Nori Green exterior color, which is surprising because according to the PPG 2021 Global Color Popularity index, that came out earlier this year, which is based on 2021 global vehicle builds, green was at 2% of total, so it is something you don’t see frequently. But it is an attractive hue.

Also, the 100 Thieves NX is based on a version of the nameplate that has a 275-hp, 2.4-liter turbocharged four, not a hybrid.

The Hybrid Itself

The 350h has a naturally aspirated 189-hp 2.5-liter engine that is mated to two high-torque electric drive motor-generators, one located in the front and one in the rear. It provides a combined system horsepower of 239 hp.

Of course, less is more in the sense that whereas the NX 350 has a combined fuel economy of a combined 25 mpg, the NX 350h has an EPA-estimated combined number of 39 mpg.

While premium (91 octane) is recommended for the 350h, it is required for the 350. (I suspect that the extra buck or so a gallon that will be necessary for the 100 Thieves cohort ($450M!) won’t be noticed.)

Still Sharp(ish)

This is the second generation of the NX, a compact crossover. The exterior styling is familiar, although the previous generation’s sharp creases have given way to what are somewhat larger radii (make no mistake: the people in the Lexus press shop know how to fold metal with mastery).

The spindle grille is somewhat modified from the previous generation (make no mistake, 2: unless the vehicle has a 100 Thieves wrap on it, you’re not going to overlook the grille).

Swinging around back, however, there is a nicely sophisticated appearance, with the tail lamp graphic going across the hatch just under the backlight and a new font for the word Lexus.

Interface & Inside

Lexus recently developed its own multimedia system, Lexus Interface, which has a fresh, contemporary HMI, especially when displayed on the optional 14-inch touchscreen. (Standard is a non-trivial 9.8-inch screen.)

While this is an internally developed system with such things as the Lexus Interface Assistant with features likes as speech control of various functions, know that there is the Lexus Interface Cloud Navigation system that is integrated with Google POI information and there are standard wireless Apple CarPlay and Android Auto. Lexus may want its own stuff, but it recognizes that you have yours.

And while on the inside it is worth noting that the Luxury trim level brings with it “Black Open Pore” wood trim. This may be a small touch, but it is a nice execution of a luxury cue. Other things (fit, finish, materials) are top-notch, but anticipated. (After all, this is a Lexus.)

While the Lexus Safety System+ 3.0 technology is something that you probably don’t want to spend a lot of time thinking about (after all, only other people get into accidents, right?), there are some nice features, such as a system that warns you and then applies braking should you be making a left turn while there is an oncoming vehicle that is potentially going to lead to untoward consequences.

A Demographic Thought

Which brings us back to 100 Thieves.

According to the Entertainment Software Association, the average age of a gamer in the U.S. is 31 years old.

Presumably the sort of person that Lexus would like to attract—then keep for years to come.

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Interesting Tesla Data Points

The phenomenon known as “Tesla” reported its Q2 production numbers:

• Model S/X:    16,411
• Model 3/Y:    242,169

Or a total of 258,580 vehicles built in four factories—Fremont, Shanghai, Berlin, Austin—two of which (Berlin and Austin) have been referred to as “gigantic money furnaces” by Mr. Musk.

In Q1 Tesla built considerably more vehicles:

• Model S/X:    14.218
• Model 3/Y:    291,189

Or a total of 305,407 vehicles.

Which undoubtedly shows that the supply chain even affects Tesla.

Another number of interest:

-87%

That, according to GlobalData, was the year-on-year reduction of Tesla job postings in the Asia-Pacific (APAC) region in June.

There were 362 posted openings in June 2021 and just 48 a year later.

Posits Sherla Sriprada, Business Fundamentals Analyst at GlobalData, “The decline in Tesla’s job postings in June 2022 suggests that there is a slowdown in new hiring in APAC as well, not just in the U.S.”

In June Mr. Musk said that he would reduce Tesla’s salaried workforce by 10% in a three-month period. The number of hourly employees would increase.

Perhaps he wants to have more vehicles produced.

Still, those APAC numbers are curious.