And So We Drive

Hannah Elliott, reporting for Bloomberg:

The eighth generation of Porsche’s iconic car, known internally and to Porsche faithful as the 992, is more profitable, proportionately speaking, than any other vehicle that debuted in the past year. The model has accounted for nearly 30% of total Porsche AG earnings since it launched, even though it made up only 11% of sales, according to a recent report by Bloomberg Intelligence.

This article is deeply misleading, and yet has been picked up and reposted all over the automotive internet.

The 911 has neither the highest profit margin in the auto industry (the Ferrari F8 Tributo, by the article’s own admission, has a higher margin, to name but one example) nor the highest absolute profit (the Ford F-150, for example, earns more absolute dollars). Instead, the 2019 Porsche 911 makes the most profit “proportionately speaking,” which the article defines as the highest percentage of earnings contribution by a single vehicle. (29% of Volkswagen Group’s profit, in this case.)

By this metric, I could usurp the Porsche 911 as the “Most Profitable Car of 2019” by selling one car, for $1 of profit, as long as that $1 was more than 29% of my total profit.

I’m not arguing that the article is untrue (of course the majority of Porsche and Volkswagen Group’s profit is from the 911), but it is misleading. These numbers speak more to how dependent Porsche is on a single model of car than they do to the actual profitability of that car. Numerous media outlets have repeated Bloomberg’s claim without making this point clear, and in so doing are very much misleading their readers.

Mike Colias, reporting for the Wall Street Journal:

Rivian Automotive, an electric pickup-truck startup backed by automotive and technology giants including Inc., has landed $350 million from privately held Cox Enterprises as it prepares to launch its first vehicle next year.

This brings Rivian’s total raised to over $1.5 billion in 2019 alone, following prior investments from Amazon and Ford.

Interesting to see Rivian and Rimac both announce substantial investment in the same week, and from such different partners. While Rimac is positioning itself as a parts and technology supplier to the OEMs, Rivian is positioning itself as an OEM.

Reading Rivian’s investor list with that strategy in mind, it reads as well-calculated to mitigate each of the struggles faced by fellow upstart Tesla over the last few years.

Automotive News Europe:

Ferrari has joined rival high-end automakers including Aston Martin, Bentley and Rolls-Royce in skipping this year's Frankfurt auto show, despite launching two new models on the eve of the event.

Ferrari chose to launch the F8 spider and 812 GTS in Maranello, Italy, despite the opportunity of an ideal venue in Germany, Europe's biggest auto market, and despite the Italian launch costing more money than an appearanc ein [sic] Frankfurt.


Mass-market brands including Toyota, Peugeot, Citroen, Nissan, Kia, Volvo, Mazda, and all of Fiat Chrysler Automobiles' brands will also skip Frankfurt this year.

For some, cost-cutting will play a role in their decision. But not for Ferrari.

The brand will also be absent at the Tokyo and Los Angeles shows later this year, while Ferrari's presence at the Shanghai show has already developed into a separate downtown exhibition space.

Not the first time Ferrari has skipped an auto show, but I still think a harbinger of things to come – particularly in light of its plans to also exhibit separately for Shanghai.

With marquee brands like Ferrari drawing enough organic attention that they don’t need the built-in audience of a show, the move makes sense. It will be interesting to see if others continue to follow suit, or if for them the built-in audience is worth the restrictions and expense of show exhibits.


  1. We saw something similar in videogames over the last few years, with two of the largest publishers (first Electronic Arts, and later Activision) throwing simultaneous-but-separate events coinciding with the massive Electronic Entertainment Expo (E3) is Los Angeles.

Autotrader Canada:

Noel Thompson has worked as a craftsperson for Bentley Motors for 50 years. But despite all that time with the company, he still uses a dining fork as one of the most important tools in his kit. A fork that's made perfectly hand (and fork) crafted steering wheels for billionaires and royalty.

I love stories like this.

Reminds me of an article I read years ago (but can’t seem to find again) about how one of the major manufacturers kept finding potatoes at work stations on their assembly line. Upon investigation, the manufacturer discovered that workers were bringing the potatoes themselves, as a key tool to help the glue for a particular process set better.

Genesis Newsroom:

Seoul, September 9, 2019 – Genesis today announced that Filippo Perini will join the brand as its Chief Designer at the Genesis Advanced Design Studio in Europe. Perini’s appointment leverages his expertise in both advanced and production design, as well as in leading design teams in streamlining digital design processes.

Interesting move, as Genesis continues to claw its way up-market.

Even as Genesis cars continue to receive positive reviews, the sticking point has been creating a luxury pedigree from scratch. As much as this press release emphasizes Perini’s design skills, I think this is really about buying exclusivity with a brand-name designer. For that, Perini should be a good fit. It was either a move like this, or partner with an outside firm that already has a global cachet.

For all the attention the new Taycan is getting, to me this is the more interesting announcement of the week.

Rimac’s strategy is as an electrification components supplier to the entire auto industry. With significant prior investments from Camel Group, Hyundai, Kia, and Porsche itself, the company already has many stakeholders, to say nothing of its numerous contract projects.

Porsche is doubling down on its partnership with Rimac, but with so many other companies at the table, there’s no way Rimac can work exclusively with Porsche. This reinvestment effectively confirms that Porsche does not believe that it requires unique electrification components for competitive differentiation.

Having committed to acquire electrification components from a company that also supplies other OEMs, Porsche is betting that it can differentiate from its competitors by building other parts of its EVs in-house. (This is the opposite strategy to Tesla, which believes that competitive differentiation in EVs must come from unique electrification components.)

With this context on Porsche’s strategy, early Taycan commentary reads exactly as you’d expect: the consensus is that it does not push the envelope on typical EV metrics (range in particular), but that it has soundly impressed with its driving dynamics, which play to Porsche’s strengths – and on which Porsche has just made a long term bet.

Yesterday Bugatti announced that it had broken the 300mph barrier on August 2nd, with the amusing headline “The Bugatti Chiron Is the First Near Production Car to Drive Faster Than 300 Mph.”

I wrestled for a while with how to write this post. The obvious angle is to ask what “near production” means, whether it is the same as “production,” and whether “production” is even an appropriate word for cars like the Bugatti Chiron or the Koenigsegg Agera RS, whose production volumes hang somewhere in the mid-double to low-triple digits.¹

At some point, do these records matter, when we all know that these are effectively prototypes, of which the manufacturers have made more than one? The first car to break the 300mph barrier was 84 years ago, in 1935.

And that gets to my point: we’re in an age in which performance, for sufficiently expensive cars, is effectively arbitrary. The numbers keep getting a bit better, as each new car one-ups its competitors, but that’s all it is – doing a little better than the other guy. Records have ceased to be meaningful because everyone can get one if they want one. The McLaren 720s performs better than the Ferrari before it, until the next Ferrari eclipses it, and so on.

I don’t mean to suggest it’s easy to cross the 300mph barrier, whether in a production car, a “near production car,” or a prototype. But I do question the point.²

The “point” of cars like the Bugatti Chiron has never been more in doubt. Right now, there are classic cars that everyone agrees have more character, track cars that everyone agrees are faster, and sports cars that everyone agrees are more fun. This leaves the hypercar, “race car for the street” in a dangerous position.

Why would you buy one? If you do, it will be neither your fastest car nor your most fun to drive. None of the current hypercars (the Chiron included) make the argument that you should buy them as monuments to technological progress. Admittedly, money is no object for many buyers of these cars, so you could also ask “why not,” but I don’t think that’s the right answer.

Looking back, we had supercars like the McLaren F1; in owning one, you had a physical representation of technological progress, not just an arbitrary compromise between race car technology and street car comforts, with just enough horsepower to hit a marketing target.

Maybe the Aston Martin Valkyrie, or the upcoming T.50, will change this, and again provide a raison d’être for the hypercar. In the meantime, I don’t know whether 304.773 mph counts as a production car record, and the problem is: I don’t care.


  1. I understand that there are rules outlining the criteria for "production car" in this context, and that technically these cars count. I stand by my argument.
  2. As Bugatti itself seems to concede in its press release, in saying that this is the last speed record it will chase.


For decades, Lamborghini has been known for brash supercars that combine brute power and daring design, like the classic Miura or the edgy Countach. Now the Italian company’s successful push into more comfortable sport utility vehicles has helped boost its valuation to $11 billion, making it a viable initial public offering candidate for owner Volkswagen AG, according to Bloomberg Intelligence analysts.

So said Andrew Marc Noel yesterday, and so repeated the automotive internet. The source is a research note by Bloomberg Intelligence analysts Michael Dean and Gillian Davis. (Accessible by terminal only.)

This is ridiculous.

However thorough Dean and Davis’ analysis may have been, one research note does not a valuation make, and how is $11 billion “into sight” of Ferrari’s valuation? ($38.82 billion as of yesterday.)

by Tyler Carbone