VW’s Keogh: 2021 will be breakout year for EVs

A “mountain” of battery-electric vehicles coming into the market this year likely will mean that 2021 will be the year that EVs break out and start grabbing larger percentages of new-vehicle sales in the U.S., the CEO of Volkswagen of America predicts.

Scott Keogh, who led Audi’s launch of the E-tron in 2018 before moving to his current job as head of the VW brand that year, says the coming wave of EVs from automakers will translate to a shift among consumers.

“I think the trend is huge, and I don’t use that word lightly. I think [when] we look back on 2021, in my opinion, this will be sort of the year EV broke,” like the Beatles going on “The Ed Sullivan Show” in 1964, Keogh said. “This is going to be the year.”

Keogh spoke with Automotive News Publisher Jason Stein during the Automotive News Shift Mobility Forum, part of this year’s all-virtual CES technology expo last week.

Keogh noted that EV sales grew in 2020 in the U.S., despite COVID-19 and the resulting shutdowns, and despite an overall market that dropped 14 percent. Keogh said VW’s projections for 2021 are for a 70 to 80 percent increase in EV sales in the U.S., to somewhere “over 400,000, maybe 500,000 units. It will move from being under nearly 2 percent of the market to over 3 percent of the market.”

He said automakers, including VW, have a “mountain” of battery-electric vehicles heading for U.S. showrooms — including the VW ID4 compact crossover that will arrive in U.S. dealerships beginning in March. As a result of all of the new offerings, consumers who might have been curious about EVs before are more likely to consider them against a traditionally powered vehicle.

EVs are “a cool consumer proposition” and have a lot to offer, Keogh said. “They’re quiet, they’re fast, they’re super loaded with technology and in many regards, if you put them up against comparable [ICE-powered] cars, they’re spaceships.”

Long term, Keogh said the EV market in the U.S. could grow to 22 to 25 percent of all auto sales by 2030 from less than 2 percent in 2020.

“That’s a lot of growth, and that’s only 10 years away,” he said, adding that electric propulsion is unlikely to completely replace internal combustion engine-powered vehicles, but it will continue to eat into its dominant market share year after year.

“It’s going to come because pricing is going to get more competitive,” Keogh said.

The ID4 will start with a $41,190 sticker, including shipping, when it goes on sale this spring. VW began consumer advertising for the ID4 this month. But even more important than price is purchase confirmation, Keogh said.

“I know all Americans are completely individualistic,” he said, “but the truth is, the more you see someone else in the car, the more it leads to a conversation. So you pick up the kids at school, you go to the country club — not now, obviously — and of course, you see the cars and that is what will lead to this tipping point” of broader adoption.

New Cox boss sees a future of innovation

One thing Steve Rowley said he noticed when he joined the auto industry last summer after more than three decades in telecommunications was how similar the two industries are.

New technology is creating innovation, he said. The industry is competitive. And it’s in growth mode.

Rowley, 55, will draw on skill sets developed in the similarly innovative and growing telecom business in his new role as president of Cox Automotive. in the role in August, after Schwartz was appointed to lead the Cox family’s investments as CEO of Cox Family Office, part of the Cox Enterprises parent company.

Rowley, who previously was executive vice president of the Cox Business unit, inherits a dealership software company focused on digital development and data insights as auto retailers increasingly embrace e-commerce.

He said the company will continue to pursue growth. Cox Automotive this month acquired Fyusion, a San Francisco-based imaging technology company, and Dickinson Fleet Services, an Indiana-based mobile maintenance provider for medium- and heavy-duty trucks. Terms were not disclosed.

Rowley, who was born in Kalamazoo, Mich., and now is based in Atlanta, described himself as a car enthusiast with a family connection to the industry, through relatives who worked in auto plants. He spoke with Staff Reporter Lindsay VanHulle about his career, his vision for Cox Automotive and emerging trends in auto retail. Here are edited excerpts.

Q: Tell us about your career.

A: I’ve spent 33 years in telecommunications. I started off in the traditional wireline voice, video, data side of the business, spent a lot of time in the wireless side of the business and then evolved into mobility. And then the last several years, really into the IoT, or the Internet of Things.

What is your vision for Cox Automotive?

I really believe in our core. It’s our customers. It’s our dealers. It’s our OEMs. It’s our financial partners. And how do we continue to grow that in a very fast environment, but always making sure we’ve got a great communication loop and an eye, a lens, on the customer and everything that we do.

So core is critical to us.

I talk about our adjacency — so as we look at the fringe areas of where we can edge out and continue to delight our customers and create value and growth for both of us, that is critical.

And then as we think about the big picture, new growth areas or [the] future, it’s really around that mobility space.

What trends are on the horizon?

It looks as though this pandemic has probably accelerated technology and digital by maybe five or 10 years or so — somewhere in that magnitude, but it clearly accelerated it. Over a very short period of time, we went from a low percent of digital transactions in our Manheim [auction] business to 100 percent overnight.

So it’s those type of examples that you’ve got to be prepared [for] and you’ve got to be ahead of the curve. We see that same phenomenon with digital retailing. What I would tell you is that is an area that I think we will clearly be a leader in.

We clearly understand that customers are looking to have a multitude of options when it comes to digital retail, so we may see some customers that want a full turnkey operation, be able to sit at their home, browse, order a car, purchase the car, have it delivered and have a total seamless transaction. We may see other customers use e-commerce to check that car out and then eventually go into the dealership themselves, so we’ve really focused on an omnichannel approach — meeting the customer in the channels of choice, working with our dealers to make sure that we provide them those areas.

The other areas that I see a lot of trends going on [include] what we call our mobility space. And it’s the electric vehicles — the tens of billions of dollars that are going to be spent between now and 2025 by the OEMs is amazing to me, and we really are thoughtful about that process.

What do you think will be Cox’s role with electric vehicles?

The electric vehicles and the batteries themselves, we want to play a big role in that. And as we think about cars that have been driven for two or three years coming off lease or people trading them in and going to Manheim, how do we create value? And how do we use data so that our customers that are purchasing those cars through Manheim know the value of that car, which is going to be different than the way we value cars today?

So we do want to understand that battery and what are all the components that go into grading those batteries.

The pandemic had an impact on Cox Automotive last year, including employee furloughs and job cuts. Has the business stabilized?

I feel like it’s stabilized. I feel like you’re seeing us back to normal. When you’re able to come out and make two acquisitions at the beginning of the year, it speaks to the fact that things are moving in a cadence that you want them to. So I think we’re running at full speed ahead. The industry is running very hard. We actually have to run faster in certain areas, because as we talked about, this pandemic has created a much deeper focus on the whole digital environment.

Why Waymo boss says ‘self-driving’ needs to go

For a few moments, John Krafcik sounded more like a philosophy professor than the CEO of Waymo.

In an appearance during the Automotive News Shift Mobility Forum held in conjunction with CES last week, he offered an explanation for the company’s decision to stop using the phrase “self-driving” to describe autonomous-driving technology.

“What is the self?” he asked.

this was not the opening to an existential discussion, but “an actual question with some merit,” he said. Waymo had come to the conclusion the phrase didn’t accurately describe the technology the company is building.

“Is the self the car? If so, it doesn’t really do good service to the product we’re working on,” Krafcik said. “Our sole product at Waymo is a driver. So when you say ‘self-driving’, it takes Waymo out of the equation.”

That was not the only reason. Across the industry, too many companies have created confusion by using it to describe driver-assist technology, which still requires a licensed human driver who maintains responsibility for all vehicle operations.

Given some of the fatal crashes that have occurred involving human drivers who overrelied on their driver-assist systems, according to federal crash investigations, the language has become a life-and-death concern.

“Language really does matter,” Krafcik said. “We made the point that sometimes, the first name isn’t the name that sticks. The flying machines of 1903 eventually became airplanes, and I think we might have gotten the terminology here somewhat incorrect or imprecise.”

Among other Waymo developments that Krafcik detailed:

  • The Jaguar I-Pace electric vehicles upfitted with Waymo’s autonomous-driving system are beginning to be deployed in the company’s operational hub in the Phoenix area.
  • Customers who use the Waymo One ride-hailing service are happier now that human safety drivers have been removed, according to internal surveys.

“They prefer some of the advantages of having the space completely to themselves,” Krafcik said.

  • The company’s hardware development was delayed for pandemic-related reasons last year and on-road mileage accumulation was lower than anticipated. But Krafcik said both are now back on schedule.

One of the other significant milestones Waymo hit was the release of a detailed framework of its safety procedures and an analysis of 47 incidents in which the company’s vehicles made contact with objects.

The documents went beyond information Waymo and others submitted to federal regulators as part of the voluntary safety self-assessment reports some companies have opted to file.

While many companies are eager to showcase the competence of their systems by releasing footage from incident-free driving, Krafcik said that Waymo wanted to do the opposite essentially as a means of building trust.

“Demo videos are carefully curated and things we would naturally do to make the tech seem really good and competent, and there’s nothing wrong with that,” he said. “The problem is you are not showing the faults. … We showed every bad aspect of our driving. We shared all those bad outcomes. No one has done that before.”

CarMax sees longer return policy as its next trend

CarMax has pushed the industry in new directions before. Its latest move could prompt others in the highly competitive used-car space to reconsider their return policies.

The nation’s largest used-vehicle retailer last week said it was increasing the money-back guarantee on its vehicles to 30 days after purchase, more than quadruple the previous seven. At the same time, CarMax also said it now offers 24-hour test drives for its vehicles.

The move comes as more consumers shop for big-ticket items online. It’s CarMax’s way of adding a layer of comfort for those who choose to do so, CarMax Chief Marketing Officer Jim Lyski told Automotive News.

“We have really just thought of what are all the ways we can put that customer at ease,” Lyski said.

The effort, which is being marketed as CarMax’s “Love Your Car Guarantee,” was borne from extensive research, Lyski said. That research found that 63 percent of shoppers said they needed more than seven days to feel confident they were making the right car purchase and that 96 percent of used-car shoppers said they would take advantage of a 24-hour test drive if offered.

The move sets CarMax apart from a burgeoning group of competitors in the used-vehicle business. Major online used-only rivals such as Carvana Co., Vroom Inc. and Shift Technologies Inc. have seven-day return policies. Franchised dealership groups trying to expand used-vehicle sales increasingly are offering return guarantees, too.

Lyski acknowledged that CarMax could see incremental expense increase if the 30-day guarantee leads to more cars being returned. But he added, “We don’t really believe it’s going to be significant.”

Though the formal 30-day return policy is new, CarMax already had been allowing returns past the previous seven-day period under some circumstances, Lyski said.

“We have a pretty good idea of what condition cars return in day one to day 30 already,” he said. “So we’ve used that to factor in on whether this is going to be able to be a sustainable, incremental expansion. We feel pretty good about that.”

Lyski declined to share the rate at which vehicles are returned but noted all return data is tracked.

“We know specifically why it was returned, what day it was returned on, whether it’s something we did wrong or whether it was something that wasn’t just a good fit for the consumer,” he said.

Asked whether he expected competitors to reassess their own return periods in light of CarMax’s move, Lyski said the retailer has been a trendsetter before, pointing to no-haggle pricing and buying consumers’ cars without requiring a purchase.

“I would expect it’s definitely going to put competitive pressure on the industry,” he said. “Whether they choose to respond immediately or over time or what, I don’t know. But we think it’s just further indication of us continuing to innovate here and leading this industry, and when you’re the leader, you’re always going to have some people that are going to follow.”

Brian Nagel, an analyst with Oppenheimer, said the move is in line with CarMax’s efforts to emphasize customer service for more than two decades.

“On paper, it may seem aggressive,” Nagel said. “But I think it’s just one more indication that [CarMax] is improving that customer experience.”

Moves like this are what CarMax has done “for its existence,” he said, adding that the company was one of the first auto retailers to embrace a large-scale certified pre-owned vehicle program.

Said Nagel: “So this 30-day guarantee is just one more piece of that.”

2021 CES Innovation Awards

Here are some of the 2021 CES Innovation Awards for vehicle intelligence and transportation.

IBM/Mayflower autonomous ship

IBM provided artificial intelligence and computing technology for the Mayflower Autonomous Ship. It’s due to sail from Plymouth, England, to Plymouth, Mass., this spring. A “Best of Innovation” winner.

Waymo 5th-Generation Driver

Waymo rolled out its latest autonomous driving technology in March, saying it “can be applied to multiple vehicle platforms and power use cases across ride-hailing, trucking, local delivery and personal car ownership.”

A “Best of Innovation” winner.

Mando steer by wire

CES honored South Korea’s Mando Corp. for its Steerite product, a steer-by-wire system with no mechanical linkage between steering wheel and tires.

Continental transparent trailer

The system is aimed at making it safer to drive while towing a trailer. Two cameras and a control unit provide a live feed of the road and any potential obstacles to an in-vehicle display. Continental also won for its Advanced Radar Sensor 540 4D imaging radar, and it shared an award with Sennheiser in the in-vehicle entertainment and safety category.

Apex.OS from Apex.AI

“With our vehicle operating system, OEMs and suppliers can accelerate their development for autonomous driving and save costs without compromising on safety,” says Apex CEO Jan Becker. The software development framework is compatible with the open-source Robot Operating System.

Bosch Nyon

Nyon, from Bosch eBike Systems, is a display computer for pedal-assist electric bicycles. It offers navigation, fitness tracking, digital locking, topography-based range estimates and other connectivity features via Bluetooth and Wi-Fi.

Kodiak Robotics self-driving long-haul trucks

Kodiak says its autonomous technology is purpose-built to handle highway driving between “truckports” located along interstates or nearby frontage roads. Kodiak has an operational hub in Dallas, from which it travels Interstate 45 to Houston and back each day.

Michigan cops go electric with new Mustang Mach-E

Police in Ann Arbor, Mich., are among the early buyers of Ford’s Mustang Mach-E electric crossover as part of the city’s effort to become carbon-neutral by 2030.

Ann Arbor is spending $93,926 to replace two patrol cars at the end of their service life with all-wheel-drive Mach-Es. The purchase is assisted by $30,549 from the city’s sustainability office, which aims to install 100 Level 2 electric vehicle chargers around town this year. EV purchases in future years will be borne by the police department but are expected to be somewhat offset by fuel savings, the city’s fleet manager told MLive.

The city chose one Mach-E Select in Carbonized Gray and one in Iconic Silver. Both will have the standard battery, giving officers an estimated 211 miles of range on a charge and 0-to-60 acceleration in 5.2 seconds to chase down less emissions-conscious lawbreakers.