Latest / Talking Michigan Transportation / Tariffs, automated vehicles and zero-emission planes

Transcript

Tariffs, automated vehicles and zero-emission planes · Talking Michigan Transportation

• 0:07
  Jeff Cranson: Hello, welcome to the Talking Michigan Transportation Podcast.
• 0:10
  Jeff Cranson: I'm Jeff Cranson.
• 0:11
  Jeff Cranson: I'm pleased this week to have a repeat guest, Joann Muller, who is the transportation correspondent for Axios, based in Detroit.
• 0:22
  Jeff Cranson: She covers a lot of ground and in this podcast she also covers a lot of ground.
• 0:28
  Jeff Cranson: We talk about everything from what's going on with tariffs and the auto industry to the ongoing evolution of automated vehicles and Uber using some driverless vehicles in Austin, Texas, along with some other developments there, and we'll also talk about a new aircraft that Delta Airlines is working with a company to develop that they say could be at net zero emissions by 2050.
• 0:58
  Jeff Cranson: So I think it's a lot of interesting stuff.
• 1:00
  Jeff Cranson: All things mobility.
• 1:01
  Jeff Cranson: So I hope you enjoy the conversation.
• 1:03
  Jeff Cranson: So, as promised, I'm here with Joann Muller, who has made a couple of other appearances on the podcast.
• 1:10
  Jeff Cranson: Always great to talk with her.
• 1:11
  Jeff Cranson: She's, I think, one of the foremost authorities on transportation.
• 1:17
  Jeff Cranson: She's the transportation correspondent for Axios, based in Detroit, and she's written a lot about various modes, mostly autos, but lots of other things too.
• 1:27
  Jeff Cranson: So, Joann, thanks for coming back to the podcast.
• 1:30
  Joann Muller: Well, thanks very much.
• 1:31
  Joann Muller: I'm happy to be here.
• 1:33
  Jeff Cranson: So let's talk first about, you know, the hottest topic of the day and that is tariffs.
• 1:38
  Jeff Cranson: And all the discussions and all the back and forth and the kind of yo-yo we're all on over this and all the back and forth and the kind of yo-yo we're all on over this, and what you think it means to the auto industry now and, with your crystal ball, what you think it could mean in the future.
• 1:52
  Joann Muller: Well, I wish I had a crystal ball, because it sure is hard to figure out what's happening.
• 1:57
  Joann Muller: You know it's funny, I'll write a story in the morning and then you know by afternoon it's changed.
• 2:03
  Joann Muller: And if I'm frustrated by those changes, you got to imagine what the automakers are and auto suppliers are dealing with, right, and the upshot here is that they don't really know what's going to happen.
• 2:19
  Joann Muller: And you know the president has said that he wants to see them move factories back from Canada or Mexico.
• 2:28
  Joann Muller: He wants to see all the suppliers do their stuff in the US.
• 2:33
  Joann Muller: But I think that instead, you know they can't just pick up and move this stuff on a dime.
• 2:40
  Joann Muller: It takes a lot of capital, a lot of time to do that and it's very disruptive to their business, and we're talking about billions of dollars disruptive.
• 2:51
  Joann Muller: So nobody's going to be in a hurry to do that until they find out what the stable state of affairs is going to be.
• 3:00
  Joann Muller: And what I'm seeing right now is, you know they, the carmakers, have been moving a lot of what they can some inventory, whether it's parts or finished vehicles into the US as quickly as they can, so it would not be subject to these tariffs that have yet to be fully enacted, tariffs that have yet to be fully enacted.
• 3:28
  Joann Muller: But the bigger problem here is that you're seeing basically sort of a freeze on strategic decisions, and that's not good for the industry either.
• 3:37
  Joann Muller: These are global companies who are trying to stay up to speed and stay competitive with these very fast rising Chinese car makers, and if they're sitting on the sideline waiting to make decisions, they're not, you know, being as competitive as they can be.
• 3:57
  Joann Muller: So I see a lot of you know, chaos and disruption and not a lot of progress here.
• 4:04
  Joann Muller: So you know we have to see how it shakes out, but for now everybody's in a holding pattern.
• 4:10
  Jeff Cranson: Well, how practical is it?
• 4:11
  Jeff Cranson: I mean, if the idea here is to incentivize the automakers to build their vehicles completely in the US, I mean, is that even practical anymore, given what's gone on with manufacturing elsewhere and the various supply chains?
• 4:25
  Jeff Cranson: And all the places that these things get put together.
• 4:29
  Joann Muller: Yeah, well, for the past 10 years or so, especially the North American auto industry has become very integrated between the three countries and we think of them as one market, and that's a result of a trade agreement that President Trump negotiated right.
• 4:48
  Joann Muller: So they kind of set it up thinking these were the rules, and now the rules are changing.
• 4:53
  Joann Muller: Well, the problem is, you know, you might be able to move stuff to the US, but the expertise might be in other countries, or the lower labor costs.
• 5:08
  Joann Muller: Of course that's a factor.
• 5:09
  Joann Muller: That's why more stuff has been built in Mexico.
• 5:13
  Joann Muller: You've got seats and wiring, harnesses and things like that are made in Mexico.
• 5:17
  Joann Muller: You could bring them back, but maybe, you know, I think the tariffs have to get really, really high to justify a move that big.
• 5:30
  Joann Muller: It still might be cheaper for them to leave things the way they are and just pass the higher costs on to consumers.
• 5:38
  Jeff Cranson: So, on a somewhat related note, I'm not sure this is widely understood by people.
• 5:42
  Jeff Cranson: Can you talk a little bit about the CHIPS Act and what it means to the industry?
• 5:47
  Joann Muller: Well, yes, I mean, you know the CHIPS Act was an important piece of legislation to encourage, you know, semiconductor production back in the US and we've had some huge investments made in Ohio, Arizona, New York.
• 6:04
  Joann Muller: These are all places where gigantic factories are going up.
• 6:09
  Joann Muller: And now there's talk about, oh, maybe we just that was a terrible law, maybe we shouldn't do that.
• 6:14
  Joann Muller: Well, I think that will.
• 6:17
  Joann Muller: I think enough politicians in those states are going to demand that we keep those factories here.
• 6:23
  Joann Muller: We, you know there's some subsidies for that and that's why it's somewhat controversial.
• 6:28
  Joann Muller: But you know, the automakers got stuck without chips, without computer chips, during the COVID pandemic when there were so many supply chain disruptions, and nobody wants to go through that again.
• 6:44
  Jeff Cranson: And so yeah.
• 6:45
  Jeff Cranson: Yeah, I was just going to say, I just wondered, because all this was happening at the same time and there's discussion about EVs and EV mandates, which is actually an inaccurate term.
• 6:55
  Jeff Cranson: But anyway, if people think these all go together and the chips are just related to EVs or something, yeah, sure it's interesting.
• 7:04
  Joann Muller: You mentioned EV mandates.
• 7:06
  Joann Muller: Trump signed an executive order, basically reversing an executive order that Biden had put in place, saying, hey, we're going to try to get to 50% EVs by 2035, I believe the year was.
• 7:22
  Joann Muller: So you could say that's not really a mandate because half the cars would still be gasoline.
• 7:28
  Joann Muller: But there is some very serious mandates coming at the state level, and this, I think, is the fight you're going to see first, and that is California.
• 7:42
  Joann Muller: The state of California has a waiver from EPA clean air standards to set their own air quality emission standards, and that's Because of that freedom.
• 7:55
  Joann Muller: California has gone ahead and created a law that says all cars must be EV by 2035.
• 8:04
  Joann Muller: And they start phasing that in as soon as next year.
• 8:08
  Joann Muller: Now other states have the option of following California or going with the federal rule.
• 8:17
  Joann Muller: Eleven states have said we're going to model our laws after California's, and many of those are in the Northeast, like New York and Connecticut and Maryland and Massachusetts, all those states up there.
• 8:30
  Joann Muller: The problem is they are nowhere near achieving the level of EV adoption, particularly in those Northeast states, and so the automakers are very, very worried about this, because by next year they're supposed to be selling 35% EVs and in a lot of these states they're at about 7%, 8%, 9% tops.
• 8:55
  Joann Muller: So there's no way they can hit those targets, so they would be out of compliance.
• 9:02
  Joann Muller: Well, how do they comply?
• 9:03
  Joann Muller: They have to dump a bunch of EVs in a market that doesn't want them, therefore sell them at a discount, take a hit on the profit, which was already marginal or non-existent, and so it's extremely disruptive and distortive of the market.
• 9:21
  Joann Muller: And so what I think you're going to see?
• 9:23
  Joann Muller: In fact, Trump has already said he wants to repeal that California mandate, and Congress is trying to undo it as well, although there's a lot of legal fights happening to see if they can actually do that.
• 9:40
  Joann Muller: So that fight, literally, is going to happen in the next couple of weeks.
• 9:43
  Joann Muller: So watch the news for that one.
• 9:45
  Jeff Cranson: That's interesting, but even before you know, this became such a political issue and what we do about EVs sales weren't what people had hoped and projections weren't, and that's mostly, I think, still related to range anxiety, isn't it?
• 10:05
  Joann Muller: Yes for sure.
• 10:06
  Joann Muller: Range anxiety I like to call it charging anxiety now, because the range is not a problem.
• 10:12
  Joann Muller: These cars can go 300 miles on a full charge, which is far more than anybody needs in a day and probably will last you a whole week.
• 10:24
  Joann Muller: But the charging anxiety is where do I charge this if I don't have a charger at my home?
• 10:33
  Joann Muller: Is there enough public charging?
• 10:35
  Joann Muller: Is it fast enough?
• 10:36
  Joann Muller: Is it going to get me where I need to be on time?
• 10:40
  Joann Muller: So that's the one issue.
• 10:42
  Joann Muller: The other one is still the pricing, and these cars EVs are a little over $50,000.
• 10:51
  Joann Muller: I want to say $55,000, average right now, average right now.
• 11:04
  Joann Muller: And you know there are currently still some $7,500 tax credits to buy an EV, but not that many vehicles qualify, and that's partly because of the battery ingredients.
• 11:12
  Joann Muller: Where is the battery sourced from?
• 11:15
  Joann Muller: If it comes from China, you know, then you don't get that tax credit.
• 11:21
  Joann Muller: So these regulations have become really, really complex and it's very confusing to consumers for sure, and so what you are seeing instead is hybrid sales are starting to soar.
• 11:34
  Joann Muller: A lot of people say you know what?
• 11:36
  Joann Muller: It's not that I'm against helping the environment to soar.
• 11:38
  Joann Muller: A lot of people say you know what it's.
• 11:40
  Joann Muller: Not that I'm against helping the environment.
• 11:41
  Joann Muller: I just, you know I'm not ready to take that plunge yet on the EV, so I think I'll buy a hybrid instead, and you know they're tiptoeing toward electrification.
• 11:50
  Jeff Cranson: And hybrids have been around for a long time, but the, I guess discussion, the more intense discussion, more people buying EVs not as many as some hope, but more has probably prompted more people to say, okay, I'll now take that leap to a hybrid, I'm not ready to take a leap to an EV.
• 12:09
  Jeff Cranson: Is that pretty much how it works?
• 12:10
  Joann Muller: Exactly yeah.
• 12:12
  Jeff Cranson: Yep, stay with us.
• 12:13
  Jeff Cranson: We'll have more on the other side of this important message.
• 12:17
  MDOT Message: In Michigan.
• 12:17
  MDOT Message: Safety comes first on the roads.
• 12:19
  MDOT Message: To combat distracted driving, Michigan passed the Hands-Free Law.
• 12:23
  MDOT Message: The law makes holding or manually using a cell phone or other mobile electronic device while operating a vehicle a primary offense.
• 12:31
  MDOT Message: This means an officer can stop and ticket you for violating the law.
• 12:35
  MDOT Message: This can include, but not limited to, sending or receiving a call.
• 12:39
  MDOT Message: Sending, receiving or reading a text or email, accessing, reading or posting to social media sites or entering locations into the phone GPS.
• 12:50
  MDOT Message: With this law in place, drivers are encouraged to stay focused, keeping their hands on the wheel and their attention on the road.
• 12:56
  MDOT Message: Drive, smart Drive, safe Drive, hands-free.
• 13:00
  MDOT Message: Michigan's hands-free law, making the road safer for everyone.
• 13:06
  Jeff Cranson: Yeah, so let's talk a little bit about another story you had last week getting off of autos and into the air.
• 13:11
  Jeff Cranson: It said that the future of flying could look very different.
• 13:16
  Jeff Cranson: Can you talk about that?
• 13:28
  Joann Muller: Yeah, so Delta Airlines, which has a big hub in Detroit, has sort of a laboratory where they work on lots of sustainable aviation ideas, and one of them that they're working with this is a California startup.
• 13:37
  Joann Muller: It's called Jet Zero and they've designed this new kind of airplane.
• 13:44
  Joann Muller: It's called a blended wing body airframe and if you think of a traditional airplane, it's kind of like a tube in the sky with a couple of wings bolted onto the side of it.
• 13:58
  Joann Muller: This is more blended together.
• 14:01
  Joann Muller: It's more like a flying blob and the wings are blended right into the body.
• 14:07
  Joann Muller: The engines are on top of the body and it's the strangest looking thing.
• 14:13
  Joann Muller: But it is expected to be up to 50 percent more fuel efficient than the kinds of planes we have today, and that's going to be super important because airlines aviation is one of the hardest forms of transportation to decarbonize a giant breakthrough and Delta is trying to help this company sort of get this plane design to market and for testing within just a couple of years.
• 14:46
  Jeff Cranson: So I'm guessing that the designers for Jet Zero and folks at Delta probably don't refer to it as a flying blob.
• 14:53
  Jeff Cranson: But in looking at it it's hard to tell why it would be more aerodynamic.
• 15:02
  Joann Muller: Well, you're right.
• 15:03
  Joann Muller: I think it has something to do with the way the air flows across the whole body it's.
• 15:11
  Joann Muller: You know, I've been in a wind tunnel once or twice for the car makers and it's very fascinating to see.
• 15:18
  Joann Muller: They'll hold this smoke, like steam or whatever it is, across the body and watch how it flows, and they can make tiny tweaks in the shape of a car to make the air flow across it more efficiently.
• 15:33
  Joann Muller: Um, and so I guess that's what they've done with this, with this plane.
• 15:39
  Joann Muller: I agree with you.
• 15:39
  Joann Muller: Uh, when I look at the picture of it, I'm like wow, that is uh very strange.
• 15:44
  Joann Muller: It reminds me a little bit of like the stealth bomber right it, it's got that kind of shape to it.
• 15:50
  Jeff Cranson: Yes, yes, that is what it looks like.
• 15:53
  Joann Muller: Maybe a little more curvaceous.
• 15:55
  Jeff Cranson: So you'll do more reporting on this as time goes on, but I mean, I don't know, did you talk to anybody that was very skeptical about the idea that they could actually be at zero emissions by 2050?
• 16:09
  Joann Muller: You know that is going to depend a lot on the development of sustainable aviation fuel, which is fuel that comes from, you know, biomass, like tree stumps and grass, and farm stuff that you know waste, and all that farm stuff that you know waste, and all that Um and t he promise for sustainable aviation fuel is very, it's very promising.
• 16:37
  Joann Muller: However, nobody's figured out how to make a lot of it, that enough that we could use.
• 16:44
  Joann Muller: You know, like right now it's a few percent are of the amount of jet fuel is sustainable aviation fuel.
• 16:51
  Joann Muller: So, in other words, they have a very long way to go.
• 16:55
  Joann Muller: 2050 is a long way off.
• 16:57
  Joann Muller: You know they set these targets and they'll tweak them as they get closer.
• 17:03
  Joann Muller: I think it's just to give them something to run toward.
• 17:08
  Joann Muller: You know whether they get there or not, who knows?
• 17:12
  Jeff Cranson: That makes sense at this point.
• 17:13
  Jeff Cranson: There's probably no harm in putting a goal out there right?
• 17:16
  Jeff Cranson: Right.
• 17:17
  Jeff Cranson: So the last thing I want to talk to you about and we could talk forever because you cover so many things that touch us all, because transportation touches us all, but it sounds like Uber is doing more with automated driving in Austin, one of the things I've noticed because Michigan and our laws allowing for actual operations on the roads were pretty cutting edge compared to what other states were doing.
• 17:43
  Jeff Cranson: There's always confusion.
• 17:45
  Jeff Cranson: There was early on when a driverless vehicle would be in a crash.
• 17:49
  Jeff Cranson: You'd see that in the headlines and everybody would say see, these are never going to work.
• 17:53
  Jeff Cranson: And you wouldn't find out until later that the crash was almost always caused by the vehicle that had a driver.
• 17:59
  Jeff Cranson: It wasn't caused by the computer.
• 18:01
  Jeff Cranson: So talk about that.
• 18:04
  Joann Muller: Yeah, well, there's been.
• 18:06
  Joann Muller: You should look at some YouTube videos.
• 18:10
  Joann Muller: There have been some very interesting things where Uber or not Uber.
• 18:16
  Joann Muller: So Waymos, in particular Waymo vehicles, have avoided stuff that a human might not have been able to react to.
• 18:26
  Joann Muller: I saw one where there was a woman on a scooter who fell off her scooter right in front of a car and that Waymo completely avoided hitting her.
• 18:36
  Joann Muller: There's another one where there was a speeding car 70 miles an hour, came through an intersection and the Waymo was able to avoid it.
• 18:46
  Joann Muller: So these are the good things that they should be out there showing more.
• 18:51
  Joann Muller: But here's the thing Autonomous vehicle technology is actually here and you know Waymo has robo taxis.
• 19:03
  Joann Muller: They're given 200,000 rides a week in driverless cars in San Francisco, phoenix and LA.
• 19:11
  Joann Muller: Now they're starting to put them into Uber in their fleets in Austin and soon Atlanta.
• 19:19
  Joann Muller: They're going to have them in Miami.
• 19:22
  Joann Muller: These are you know they're small fleets but they're doing the job and Waymo has had a remarkably good safety record so far.
• 19:31
  Joann Muller: Knock on wood.
• 19:34
  Joann Muller: There are autonomous trucks are going to launch in Texas next month on the highway.
• 19:41
  Joann Muller: There will be trucks rolling down the highway with no one in them.
• 19:45
  Joann Muller: This is here.
• 19:47
  Joann Muller: This technology is here in them and I think we're just going to start to see more and more of it.
• 19:55
  Joann Muller: I think for you and I, unless we're taking a robo taxi, you know we may not experience it, but in our personal cars we're going to find more and more automation.
• 20:05
  Joann Muller: You can drive on the highway now with your hands off the steering wheel in certain vehicles.
• 20:11
  Joann Muller: It's coming that you will be able to actually take your eyes off the road and your hands off the wheel in the not too distant future.
• 20:22
  Joann Muller: The technology exists.
• 20:24
  Joann Muller: It's partly the regulations have to kind of decide.
• 20:28
  Joann Muller: You know, is this, are we ready for this?
• 20:31
  Joann Muller: And so I think it's coming, and that is how most of us will experience automation.
• 20:38
  Joann Muller: It's going to gradually do more of the work in the car and we will be able to relax a little bit.
• 20:47
  Jeff Cranson: Yeah Well, it's not even a close call for me.
• 20:49
  Jeff Cranson: I mean, the computer doesn't speed, it doesn't drink, it doesn't get angry and have road rage, it doesn't, you know, fall asleep.
• 20:57
  Jeff Cranson: I mean, the list goes on of what the human behavior that causes crashes.
• 21:04
  Joann Muller: So I'm counting on autonomous vehicles.
• 21:07
  Joann Muller: By the time I am too old to drive and that you know, they take away my driver's license, but I can still get places because a robo taxi is going to take me there.
• 21:19
  Jeff Cranson: Yeah, I agree.
• 21:20
  Jeff Cranson: I'm completely with you, and that's the thing that should be the selling point in an aging population right that if you want autonomy and mobility in your later years, this is how you'll have it.
• 21:32
  Jeff Cranson: So, yeah, well, Joann, as always, I really appreciate it.
• 21:37
  Jeff Cranson: You cover a lot of ground and, you know, make us smarter, so I appreciate that.
• 21:42
  Jeff Cranson: Thank you.
• 21:43
  Joann Muller: Well, I would love to ask your readers to subscribe to a new newsletter that I'm launching at Axios next week on Wednesday.
• 21:52
  Joann Muller: It's called Axios Future of Mobility and you can sign up at Axios.
• 21:58
  Joann Muller: com and it will come once a week and it's going to cover all of these same issues.
• 22:04
  Jeff Cranson: Yeah, sorry, I forgot to talk about that early on, but I will definitely include in the show notes.
• 22:08
  Jeff Cranson: Wonderful, thank you.
• 22:10
  Jeff Cranson: I'd like to thank you once more for tuning in to Talking Michigan Transportation.
• 22:14
  Jeff Cranson: You can find show notes and more on Apple Podcasts or Buzzsprout.
• 22:18
  Jeff Cranson: I also want to acknowledge the talented people who help make this a reality each week, starting with Randy Debler, who skillfully edits the audio, Jesse Ball, who proofs the content, Courtney Bates, who posts the podcast to various platforms, and Jacke Salinas, who transcribes the audio to make it accessible to all.