Talking Michigan Transportation

Tariffs, automated vehicles and zero-emission planes

• Season 7 • Episode 215

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On this week’s edition of the Talking Michigan Transportation podcast, a repeat appearance by Joann Muller, the Detroit-based transportation correspondent for Axios. She talks about how tariffs are affecting the auto industry, how automakers are reacting and what the future might hold.

Muller also shares insights from reporting on a new design for aircraft (a blended wing body airframe) that Delta Airlines and California-based Jet Zero say could make for net-zero emissions flying by 2050.

Lastly, she talks about driverless Uber vehicles in Austin, Texas, and other developments in the evolution of automated vehicles. 

Muller also previews a new newsletter she’s launching, Axios Future of Mobility.

Jeff Cranson:

Hello, welcome to the Talking Michigan Transportation Podcast. I'm Jeff Cranson. I'm pleased this week to have a repeat guest, Joann Muller, who is the transportation correspondent for Axios, based in Detroit. She covers a lot of ground and in this podcast she also covers a lot of ground. 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.

Jeff Cranson:

So I think it's a lot of interesting stuff. All things mobility. So I hope you enjoy the conversation. So, as promised, I'm here with Joann Muller, who has made a couple of other appearances on the podcast. Always great to talk with her. She's, I think, one of the foremost authorities on transportation. 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. So, Joann, thanks for coming back to the podcast.

Joann Muller:

Well, thanks very much. I'm happy to be here.

Jeff Cranson:

So let's talk first about, you know, the hottest topic of the day and that is tariffs. 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.

Joann Muller:

Well, I wish I had a crystal ball, because it sure is hard to figure out what's happening. You know it's funny, I'll write a story in the morning and then you know by afternoon it's changed. 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. And you know the president has said that he wants to see them move factories back from Canada or Mexico. He wants to see all the suppliers do their stuff in the US. But I think that instead, you know they can't just pick up and move this stuff on a dime. 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. 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.

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. 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. 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. So I see a lot of you know, chaos and disruption and not a lot of progress here. So you know we have to see how it shakes out, but for now everybody's in a holding pattern.

Jeff Cranson:

Well, how practical is it? 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? And all the places that these things get put together.

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. So they kind of set it up thinking these were the rules, and now the rules are changing. 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. Of course that's a factor. That's why more stuff has been built in Mexico. You've got seats and wiring, harnesses and things like that are made in Mexico. 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. It still might be cheaper for them to leave things the way they are and just pass the higher costs on to consumers.

Jeff Cranson:

So, on a somewhat related note, I'm not sure this is widely understood by people. Can you talk a little bit about the CHIPS Act and what it means to the industry?

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. These are all places where gigantic factories are going up. And now there's talk about, oh, maybe we just that was a terrible law, maybe we shouldn't do that. Well, I think that will. I think enough politicians in those states are going to demand that we keep those factories here. We, you know there's some subsidies for that and that's why it's somewhat controversial. 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.

Jeff Cranson:

And so yeah. 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. But anyway, if people think these all go together and the chips are just related to EVs or something, yeah, sure it's interesting.

Joann Muller:

You mentioned EV mandates. 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. So you could say that's not really a mandate because half the cars would still be gasoline. 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. 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. California has gone ahead and created a law that says all cars must be EV by 2035. And they start phasing that in as soon as next year. Now other states have the option of following California or going with the federal rule.

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.

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. So there's no way they can hit those targets, so they would be out of compliance. Well, how do they comply? 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. And so what I think you're going to see? 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. So that fight, literally, is going to happen in the next couple of weeks. So watch the news for that one.

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?

Joann Muller:

Yes for sure. Range anxiety I like to call it charging anxiety now, because the range is not a problem. 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. But the charging anxiety is where do I charge this if I don't have a charger at my home? Is there enough public charging? Is it fast enough? Is it going to get me where I need to be on time? So that's the one issue. The other one is still the pricing, and these cars EVs are a little over $50,000. I want to say $55,000, average right now, average right now.

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. Where is the battery sourced from? If it comes from China, you know, then you don't get that tax credit. 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. A lot of people say you know what? It's not that I'm against helping the environment to soar. A lot of people say you know what it's. Not that I'm against helping the environment. 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.

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. Is that pretty much how it works?

Joann Muller:

Exactly yeah.

Jeff Cranson:

Yep, stay with us. We'll have more on the other side of this important message.

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In Michigan. Safety comes first on the roads. To combat distracted driving, Michigan passed the Hands-Free Law. The law makes holding or manually using a cell phone or other mobile electronic device while operating a vehicle a primary offense. This means an officer can stop and ticket you for violating the law. This can include, but not limited to, sending or receiving a call. Sending, receiving or reading a text or email, accessing, reading or posting to social media sites or entering locations into the phone GPS.

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With this law in place, drivers are encouraged to stay focused, keeping their hands on the wheel and their attention on the road. Drive, smart Drive, safe Drive, hands-free.

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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. It said that the future of flying could look very different. Can you talk about that?

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. It's called Jet Zero and they've designed this new kind of airplane. 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.

Joann Muller:

This is more blended together. It's more like a flying blob and the wings are blended right into the body. The engines are on top of the body and it's the strangest looking thing. 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.

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. But in looking at it it's hard to tell why it would be more aerodynamic.

Joann Muller:

Well, you're right. I think it has something to do with the way the air flows across the whole body it's. You know, I've been in a wind tunnel once or twice for the car makers and it's very fascinating to see. 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. Um, and so I guess that's what they've done with this, with this plane. I agree with you. Uh, when I look at the picture of it, I'm like wow, that is uh very strange. It reminds me a little bit of like the stealth bomber right it, it's got that kind of shape to it.

Jeff Cranson:

Yes, yes, that is what it looks like.

Joann Muller:

Maybe a little more curvaceous.

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?

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. However, nobody's figured out how to make a lot of it, that enough that we could use. You know, like right now it's a few percent are of the amount of jet fuel is sustainable aviation fuel. So, in other words, they have a very long way to go. 2050 is a long way off. You know they set these targets and they'll tweak them as they get closer. I think it's just to give them something to run toward. You know whether they get there or not, who knows?

Jeff Cranson:

That makes sense at this point. There's probably no harm in putting a goal out there right? Right.

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. There's always confusion. There was early on when a driverless vehicle would be in a crash. You'd see that in the headlines and everybody would say see, these are never going to work. And you wouldn't find out until later that the crash was almost always caused by the vehicle that had a driver. It wasn't caused by the computer. So talk about that.

Joann Muller:

Yeah, well, there's been. You should look at some YouTube videos. There have been some very interesting things where Uber or not Uber. So Waymos, in particular Waymo vehicles, have avoided stuff that a human might not have been able to react to. 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. 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. So these are the good things that they should be out there showing more. But here's the thing Autonomous vehicle technology is actually here and you know Waymo has robo taxis.

Joann Muller:

They're given 200,000 rides a week in driverless cars in San Francisco, phoenix and LA. Now they're starting to put them into Uber in their fleets in Austin and soon Atlanta. They're going to have them in Miami. 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. Knock on wood.

Joann Muller:

There are autonomous trucks are going to launch in Texas next month on the highway. There will be trucks rolling down the highway with no one in them. This is here. This technology is here in them and I think we're just going to start to see more and more of it. 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. You can drive on the highway now with your hands off the steering wheel in certain vehicles. 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. The technology exists. It's partly the regulations have to kind of decide. You know, is this, are we ready for this? And so I think it's coming, and that is how most of us will experience automation. It's going to gradually do more of the work in the car and we will be able to relax a little bit.

Jeff Cranson:

Yeah Well, it's not even a close call for me. 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. I mean, the list goes on of what the human behavior that causes crashes.

Joann Muller:

So I'm counting on autonomous vehicles. 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.

Jeff Cranson:

Yeah, I agree. 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. So, yeah, well, Joann, as always, I really appreciate it. You cover a lot of ground and, you know, make us smarter, so I appreciate that. Thank you.

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. It's called Axios Future of Mobility and you can sign up at Axios. com and it will come once a week and it's going to cover all of these same issues.

Jeff Cranson:

Yeah, sorry, I forgot to talk about that early on, but I will definitely include in the show notes. Wonderful, thank you. I'd like to thank you once more for tuning in to Talking Michigan Transportation. You can find show notes and more on Apple Podcasts or Buzzsprout. 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.