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.

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China auto sales set to grow in '21, trade group predicts

The world’s biggest auto market is set to resume growing after a three-year slide capped by the pandemic.
China’s new-vehicle sales will grow 4 percent to more than 26 million in 2021 as the world’s No. 2 economy continues to recover from disruptions caused by the coronavirus, the China Association of Automobile Manufacturers predicted last week.
China was the first country battered by the coronavirus and is expected to be the only major economy to have grown in 2020.
Car and light-truck deliveries are forecast to rise 7.5 percent to 21.7 million in 2021 while new commercial-vehicle demand will slip 10 percent to 4.6 million, said Xu Haidong, an official at the industry trade group. Sales of new electrified vehicles including plug-in hybrids and fuel cell vehicles will jump 40 percent to 1.8 million, he added.
New-vehicle demand in China grew for the ninth consecutive month in December, rising 6.4 percent to 2.83 million, as consumers and government spending rebounded in the wake of the coronavirus outbreak. Still, 2020 sales fell for the third straight year, dipping 1.9 percent to 25.3 million.
Deliveries of light vehicles — sedans, crossovers, SUVs, multipurpose vehicles and minibuses — shrank 6 percent to 20.18 million.
Behind a rebound that began in July, sales of new electrified vehicles, spurred by new entries from Tesla, Nio, Xpeng and others, totaled 1.37 million in 2020, an increase of 11 percent from 2019.
Deliveries of full-electric vehicles advanced 12 percent to 1.12 million while plug-in hybrid deliveries rose 8.4 percent to some 251,000.
Volkswagen Group remained by far the largest foreign automaker in China last year, even as sales fell 9.1 percent to 3.85 million, with declines at the VW and Skoda brands eclipsing gains at Audi and Porsche. It was the first sales decline the German auto giant recorded in China since 2016.
Deliveries at General Motors, China’s No. 2 foreign automaker, dropped 6.1 percent to 2.9 million last year. Buick sales rose 4.1 percent to exceed 885,000 and Cadillac deliveries rose 7.9 percent to top 230,000. Deliveries at Wuling, a major minibus maker, grew 8.8 percent to nearly 1.1 million.
By contrast, sales slumped 30 percent to 291,000 at Chevrolet and 34 percent to 402,000 at Baojun, a market-entry car brand.
SAIC Motor Corp., which has partnerships with VW Group and GM, saw sales drop 10 percent in 2020 to 5.6 million.
SAIC, China’s biggest automaker, aims to boost sales 14 percent to 6.4 million this year, the most in more than a decade, behind a push into key EV segments. The company is targeting a 140 percent increase in new-energy-vehicle deliveries, to 768,000, Bloomberg reported, citing a person familiar with the matter.

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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.

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Big auto show era truly over

You can have a Christmas in July, but it just isn’t the same.
A few years ago, I asked Sam Slaughter, the former Detroit Auto Dealers Association chairman, about the need for the show he once organized to reinvent itself and stop trying (and failing) to compete with CES for media attention in January. His reply: It would be easier to move Christmas.
His successors decided to move it anyway, which was a reasonable thing to do, given that so many automakers had been pulling out of the North American International Auto Show. They tried to reimagine what the Detroit show could be — or what any major auto show could be. But it didn’t work.
While the broader economy struggles with coronavirus limitations, the auto industry is thriving as affluent consumers pay record prices for a limited selection of vehicles. The bottom line is that automakers have money — they just don’t want to spend it on major, global auto shows.
Too few companies — perhaps fewer than one? — were willing to commit significant funds to make the new Detroit event a spectacular scene.
As one friend put it: The Motor Bella being planned for Pontiac’s M1 concourse may be little more than a glorified cars and coffee.
And hey, cars and coffee is great. It’s an important part of auto culture and a sweet slice of Americana.
But it isn’t a pop-up Vegas, where celebrities dazzle the cameras and national news is made by multiple leaders of global industrial powerhouses.
Auto shows were already in perilous decline, and I appreciate what the Detroit auto dealers and their professional staffs tried to pull off: an automotive SXSW that would highlight the best of Detroit, the future of mobility and the heart of American culture. They just couldn’t get enough buy-in to make it work.
Something is lost with the end of the global auto show — a lot, I would argue, in terms of human connections and the level-setting that takes place when everyone is on effectively the same stage. But those things can be hard to quantify. The numbers lean decisively toward holding one-off events for a single company or brand or a key vehicle. Or simply holding an online reveal that costs less and reaches more people.
The shame is that multiple technological revolutions are coming to the auto industry: EVs, automated driving, new forms of transportation. Institutions such as global auto shows present opportunities to educate shoppers where everyone can keep each other honest. Sounds quaint, right? But for big incumbents facing a slew of unproven upstarts, leaving the public’s education to chance seems like a foolish risk. I can only hope that the industry has some smart ideas for building consumer knowledge and trust instead of leaving it to those with less skin and soul in the game.
The last auto show I attended was Tokyo in 2019. It seems that Akio Toyoda is driven by a joyful strain of noblesse oblige that leads him to pour good money into the Tokyo Motor Show and make it interesting, culturally relevant and industrially educational.

Bringing in the Japanese equivalents of RuPaul and AJR drew enough lookie-loos to the Tokyo show to declare it a success. Did all 1.3 million people visit the arcadelike display of possible uses for Toyota’s e-Palette concept and seek out the redesigned Mirai fuel cell sedan and observe Honda’s curiously useful innovations and gawk at Nissan’s surprisingly gorgeous Ariya crossover? Of course not. But those products and the companies and ideas behind them were celebrated and planted into Tokyo’s psyche because of Toyoda’s vision and, frankly, his checkbook.
Remember: It was his company, along with Nissan, that made Detroit an international event with the 1989 introductions of their luxury brands.
Though in honesty, as interesting and exciting as the 2019 Tokyo show was, it was very much a Japanese show that no longer draws CEOs (or hardly anyone) from America or Europe or even South Korea.
Regional shows — that’s where the smart money is. There are a lot of people who like to come out and look at cars outside of a dealership: people who are enthusiastic about vehicles, people who are or will soon be in the market.
Those kinds of shows — without pyrotechnics, without breaking news — were thriving before the pandemic, and there’s no reason to expect that won’t continue. But seeing Detroit’s become one of them again is not the Christmas we grew up on.

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Dealer anniversaries

40 with BMW
Jay Wyatt, left, dealer principal of Valley Auto World BMW in Fayetteville, N.C., receives a 40-year award from Neil Ashton, area manager for BMW of North America.

25 with Chevrolet, Cadillac, Buick
Mike Molstead, left, president of Mike Molstead Motors in Charles City, Iowa, receives a 25-year award for Chevrolet, Cadillac and Buick from Craig Bailey, General Motors zone manager.

25 with Toyota
Ken Ganley, right, dealer principal of Ganley Toyota in Akron, Ohio, receives a 25-year award from Shane Sizemore, general manager of Toyota Motor North America’s Cincinnati region.

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