Industry Briefing #18

Automotive industry highlights

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1 min
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The Briefing
Published date
September 23, 2024

The Briefing keeps consultants ahead by unpacking essential trends and emerging questions they can answer through market research.

On this week’s issue: Auto brands are developing hydrogen vehicles and adding advanced automation to cars. Tesla’s robotaxi is set to launch in October 2024, and Jeep engine fires are being investigated. Electric delivery vans are also providing more sustainable options for the logistics industry.

Mainstream auto brands are developing new sustainable vehicles using hydrogen fuel technology. 

Many new cars are incorporating new automated features that could significantly change the way we drive. 

Reports of Jeep engine fires have led to an investigation by the National Highway Traffic Safety Administration in the US. 

Tesla’s much-hyped robotaxi release has been officially announced for October 2024 as the company continues to pivot. 

New electric delivery vans are hitting the market, giving the shipping and logistics industries more sustainable transportation options. 

Hydrogen-powered vehicles are going mainstream as major auto manufacturers explore this new technology. 

Hydrogen power has long been touted as the next big thing in sustainable transportation, but this new technology has been slow to hit the market. However, that could all change in the next few years as BMW and Toyota partner up to launch a new hydrogen fuel-cell vehicle in 2028. 

Toyota and BMW are planning a new hydrogen-powered car, set to launch in 2028 with a projected range of 485 miles

Toyota has already invested heavily in the development of hydrogen powertrains and has advocated for more extensive hydrogen infrastructure globally. A more extensive network of hydrogen-capable fueling stations will be necessary in order for this new vehicle to be commercially viable. 

In this new partnership, Toyota will collaborate with BMW on a new powertrain, which will be featured in the 2028 BMW model as well as future Toyota models. The new vehicle will be a variant of an existing BMW model. However, it is projected to have a range of 485 miles, which is approximately 100 miles more than BMW’s most efficient electric model on the market currently. 

Right now, it’s unclear whether or not the new vehicle will be released in the United States. This is because it’s unlikely that North America will have the necessary hydrogen fuel infrastructure by the time BMW’s new vehicle is released. This is in contrast to target markets in Europe and Asia, which have invested much more heavily in hydrogen technology. 

Currently, the only hydrogen fuel stations in the US are in California, with only about 17,000 hydrogen-powered cars on the road. There are two hydrogen-powered cars on the market: the Toyota Mirai and the Hyundai Nexo. However, sales for both models dropped significantly in Q2 2024, raising questions about consumer interest in hydrogen-powered vehicles moving forward. 

This hasn’t stopped auto manufacturers from planning new hydrogen-powered models. In addition to the new Toyota-BMW collaboration, Honda is developing a new hybrid hydrogen option of the CR-V to be released this year. This new model will compete with the current Mirai and Nexo models. 

New AI-powered features could make the driving experience safer and more convenient — but also pose privacy risks.

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Car manufacturers are investing in sophisticated in-vehicle software programs that could significantly change the driving experience with widespread adoption. Many of these programs incorporate AI technology and automation. In some cases, this new technology could make driving safer and more enjoyable, while others have the potential to be disruptive and could even pose new privacy risks. 

First, Ford recently patented a new system that would customize audio and visual ads to play in cars. This technology would use location data, your in-car media preferences, and even your conversations to play customized ads. While this technology seems concerning at first glance, it’s important to note that Ford does not currently have any plans to implement it in upcoming vehicle models. 

Car manufacturers have already received increased scrutiny over the past few years due to their data collection practices. In early 2024, a report found that several major automakers in the US were selling customer data to insurance companies without their permission. Research from the Mozilla Foundation also found that many major car brands collect extensive amounts of personal data and have limited cybersecurity protections to keep that data safe. With this in mind, it’s unlikely that consumers would respond positively to this new technology in the current environment. 

On a more positive note, some auto manufacturers are using technology to improve the driver experience. For example, major auto groups like Stellantis and VW Group are adding ChatGPT-powered voice assistants to many of their vehicle brands. This would make it easier for drivers to get information quickly without taking their eyes off the road. 

Additionally, many upcoming car models will have features to make driving safer. More specifically, manufacturers are limiting Intelligent Speed Assistance (ISA) software, which will give drivers audio and visual warnings when they are speeding. Cars in Europe are already required to have ISA technology as of July 2024, and it’s possible that the US government could follow suit in the years to come. 

Interestingly, one study found that over 60% of drivers in the US would be accepting of ISA technology in their vehicles. The National Transportation Safety Board has echoed this sentiment and has made a call for ISA technology in all vehicles to limit speeding and reduce traffic fatalities. The state of California has already passed a bill that will require new cars in the state to include ISA features beginning in 2030.

Over 60% of drivers in the US would be accepting of Intelligent Speed Assistance technology

Thousands of Jeep vehicles are under investigation due to engine fires.

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The NHTSA in the United States is launching an investigation into Jeep and its parent company, Stellantis, after reports of alarming engine fires on some recent Jeep models. The investigation is specifically focusing on the Jeep Wrangler and Jeep Gladiator from model years 2021-2023. It’s possible the investigation could lead to a recall, which would affect over 780,000 vehicles

An investigation into recent Jeep fires could lead to a recall of over 780,000 vehicles

Nine different fires have been reported so far across several Jeep models. The fires have started with the ignition off, making it difficult to confirm the exact cause. One person has been injured in the fires so far. 

This investigation comes at a difficult moment for Stellantis as the company has dealt with other recalls earlier in the year. This includes a recent recall of other Wrangler and Gladiator models over short-circuit issues

Tesla plans a major transition ahead of its anticipated robotaxi release.

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Despite being one of the world’s most visible auto brands, Tesla has had somewhat of an identity crisis over the past few years. The company led the way in terms of making electric vehicles trendy, but recently, sales have been dropping and the company has had to cut back on production. The value of used Teslas has also dropped significantly over the past year.

This slump is due in part to competition from other, more affordable EV manufacturers, as well as a recent shift in public perception. There have been many reports of Tesla vehicles malfunctioning, which have led to recalls of thousands of vehicles. Erratic behavior from CEO Elon Musk has also left some consumers wary. 

Tesla is already planning to cut prices and make updates to existing vehicle models to get back on track. The company is also preparing for an exciting new product launch — Tesla’s first robotaxi. An official product reveal is planned for October 2024. While we don’t know exactly what the taxi will look like yet, it will be fully autonomous, without standard vehicle features like a steering wheel or pedals. It will also be accessible through a proprietary ride-hailing app. 

Tesla plans to unveil its new robotaxi concept in October 2024 

The robotaxi announcement is highly anticipated by the entire auto industry, and has the potential to drastically change the concept of ridesharing. However, Tesla will have to fight an uphill battle against the public’s perception of autonomous vehicles. Recent studies have found that 46% of Americans are either very or somewhat untrusting of this new technology. This is especially true after several high-profile accidents in San Francisco. 

Delivery vans are going electric.

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As electric vehicles have become mainstream, many companies have focused entirely on getting consumers to switch from traditional gas vehicles to this more sustainable option. However, consumer vehicles are just one part of the EV revolution. Electric vehicles also have the potential to transform the commercial sector. 

In particular, many electric delivery vans are hitting the market. Using EVs for delivery could make the entire supply chain much more sustainable, especially as the e-commerce industry is booming. An estimated 356 billion packages shipped in 2023 — electric delivery vans could reduce some of the environmental impact of these shipments. 

Several exciting EV delivery vehicles have hit the market recently. GM launched its BrightDrop electric delivery vans in 2021, and recently folded the BrightDrop line into the Chevy brand. This means that BrightDrop vehicles will be available at all Chevy dealerships, making them more accessible. 

Another exciting new EV van model is the Prodrive EVOLV. Prodrive recently showcased a demonstration of this new concept, which could hit production by 2028. The vehicle is very small and lightweight and is designed for last-mile deliveries. It could be particularly effective in dense urban areas with narrow streets and high delivery demand. 

Honda has also recently released a small electric delivery van. The N-VAN is a compact delivery van designed for the Japanese market. It has fast charging capabilities and a flexible design that can work for both commercial and personal use, making it ideal for small business owners. 

Questions to Stay One Step Ahead

In many ways, the auto industry feels like it has hit a turning point. The industry is shifting away from traditional vehicles and moving toward more eco-friendly options. However, consumers haven’t fully made the switch to these new vehicles. Innovative marketing tactics will be necessary to get today’s consumers fully on board with these promising new technologies. 

Questions to consider include: 

  • Hydrogen fuel cells: How do consumers perceive hydrogen-powered vehicles? What barriers to adoption are the most significant? 
  • In-car AI software: How do consumers feel about in-car software programs? What types of automated features do they look for when purchasing a vehicle? 
  • Robotaxis: Are consumers interested in autonomous rideshare programs? Would they trust autonomous taxis from Tesla or from other well-known brands?

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