Monthly Archives: December 2017

Toyota’s electric vehicle plan, solid state batteries for BMW, VW capital discipline and the Tesla pick-up… What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for the week of 18^th December to 24^th December 2017, with bonus coverage of 25^th to 27^th A PDF version can be found here.

Favourite stories of the past few days…?

• Now I’m A Believer — Finally Toyota has made some serious commitments around battery electric vehicles. A sales forecast of 1 million units annually by 2030 is at the low end of manufacturer estimates of mix (about 10%) but it is a statement of intent and they have the money (and now the base plan) to adjust if things start to look different.
• Solid As A Rock — BMW is the latest to take solid state batteries seriously with the announcement of a partnership with Solid Power. Depending on who you talk to, solid state batteries are a must-have for affordable electric vehicles (Toyota) or a nice-to-have (R-N, Tesla, VW). No one seems to think that they are a bad thing though. Does recent activity in this area mean that we could be closer to a breakthrough than expected?
• Walking On Broken Glass — VW have guaranteed production at the former Phaeton “transparent factory” until 2025. If a plant with 325 jobs (which could easily be redeployed) is critical to the company’s long-term mission, how exactly does it define capital discipline?
• Do You Believe In Magic? — Elon Musk took to Twitter to work his followers into a frenzy about the Tesla pick-up. I’m afraid that things don’t look quite right to me though; three years (or less) from launch and he says that the external dimensions aren’t fixed? Either Elon’s being extremely modest or this program is going to underwhelm / experience “production hell” (called “launch screw-ups” by other OEMs). By the way, Founders Series Roadsters aren’t selling like hot cakes. You can still get one of the first 1,000 here (if you’re prepared to pay $250,000 upfront).

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

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News about the major automakers

BMW ^(history)

• Mini will launch a range of home fit personalisation options, manufactured using rapid prototyping techniques. The components are specified online; manufactured by BMW in Germany and then shipped to the customer. (Autocar)
• Partnered with Solid Power to develop solid state batteries for a future electric vehicle platform. (Solid Power)
• Expect the cut in US tax rates to increase net income by between €0.95 billion – €1.55 billion. (BMW)

Daimler ^(history)

• Acquired a 50% stake in French ride hailing company Chauffeur Privé with the intention of buying the rest of the company by 2019. (Daimler)
• Will start a dynamic shuttle service in Berlin in partnership with Via and German public transport operator BVG. The initial fleet of 50 vehicles is forecast to eventually reach 300. The service is currently planned to run for two years before an evaluation of its merits will take place. (Via)
• Said changes to US tax rates would improve 2017 net income by around €1.7 billion and €1 billion after some unrelated offsets were considered. (Daimler)

FCA ^(history)

• Recalling 1.8 million trucks worldwide to correct problems with the parking brake (transmission interlock). (FCA)
• Maserati has implemented an extended Christmas shutdown that will affect all models. (Auto Evolution)

Ford ^(history)

• US union officials called on the company to raise the wages of its Mexican employees so that they were less competitive and actions such as the recent decision to build Ford’s first mass-market electric vehicle in Mexico might not take place in future. (Economic Times of India)
• Ford Focus RS vehicles appear to be exhibiting a design defect that results in far higher than normal engine replacements — potentially exacerbated by owners modifying their vehicles after purchase. (Autocar)
• Issued a recall for around 12,000 vehicles in the US. One of the problems looks as though it could have been easily fixed if Ford had installed vehicle connectivity that allowed over the air updates. (Ford)
• Released an open letter to employees condemning harassment after newspaper reports uncovered a raft of issues at some US plants. (Detroit News)
• Released photographs of a partially-disguised next generation Focus to build interest ahead of the 2018 launch. The effort uses #timetofocus on Twitter — perhaps poorly timed as it is likely to be overwhelmed by people planning new training / diet regimes post 1^st January 2018. (Auto Express)

Geely (includes Volvo)

• Bought an 8.2% stake in truckmaker Volvo Group for $3.8 billion, Geely will get 15.6% voting rights. (Autocar)

Hyundai / Kia

• Executives said that all Hyundai and Kia vehicles launched after 2019 will be connected cars and all vehicles built after 2025 will be connected. (ET News)
• Will release a safe-stopping mode in 2021 that acts if it detects that the driver is no longer capable. (ET News)

Nissan (includes Mitsubishi)

• Nissan’s Canadian finance arm suffered a data breach in which customer data was taken. (Nissan)
• Offering customers in Japan free home solar panels if they buy a Nissan Leaf and agree to a 20-year electricity supply contract. (Nissan)
• Announced a series of executive moves. (Nissan)

PSA (includes Opel/Vauxhall) ^(history)

• Faurecia will acquire heavy truck engine emissions specialist HUG Engineering. (Les Echos)
• Announced a series of executive moves. (PSA)

Renault ^(history)

• French media speculated over the top internal and external candidates to replace Carlos Ghosn, predicting that a CEO-designate will be chosen by February. (Les Echos)

Tata (includes JLR)

• Land Rover is reportedly planning to release an all-electric version of the new Defender. (Motoring)
• Fleet managers looking for £40k commercial vehicles with impaired package, small load space, no sliding doors and leather seats can now order a Land Rover Discovery Commercial. (Auto Express)

Tesla ^(history)

• Some Tesla suppliers have said that orders for December and early 2018 imply that Model 3 production may reach a weekly rate of 5,000 units earlier than the end of Q1 2018 target. (Electrek)
• CEO Elon Musk said on Twitter that the company will launch a pick-up “right after” Model Y. He also answered some questions about the vehicle saying it would be similar in size to a Ford F-150. (Business Insider)
  • Implication: Although the online dialogue between Tesla fans and Musk set the internet ablaze, something seems a little off. Musk has set expectations for a release date in 2020 but also indicated that external dimensions hadn’t been fixed. That doesn’t sound right for a vehicle supposedly so close to production. By the way, “Founders Series” Roadster reservations can still be made (they are supposedly capped at 1,000 units).
• In a bid to increase residual / scarcity value of the original Tesla Roadster, Elon Musk said he would send one of his own into space. (Hotha Hardware)

Toyota ^(history)

• Said that by 2025 every vehicle will have an electrified version (HEV — which may include 48V / PHEV) or be fully electric (BEV / FCEV). In the early 2020s the company will have 10 BEVs models worldwide and will introduce FCEVs on top. By 2030 the company aims to sell 1 million BEVs / FCEVs each year and 4.5 million HEVs / PHEVs — equating to an expected sales mix of around 10% BEV / FCEV. (Toyota)
  • Implication: Whilst this announcement represents a step forward in electric vehicle planning by Toyota, some of the logic still seems troubling. If there are at least 10 nameplates by 2030 then an average vehicle line volume of less than 100,000 units per annum seems inadequate from a profitability perspective. In fairness, as by far the richest OEM, Toyota can afford to be a bit fuzzy on how its estimates fit with consumer trends — at least it has acknowledged electrification as a trend to be taken seriously.
• Will merge two existing leasing subsidiaries into a single entity with a broader mission that includes mobility services. The new arm will be called Toyota Mobility Service Co. (Toyota)
• Merging three existing subsidiaries to create a conversion and accessories business. The rationale for the move appears to be a simpler business structure and efficiency gains. (Toyota)
• Launched a new online leasing system in the UK called NGage. This allows customers to receive and sign documents digitally, which Toyota expects will improve turnaround time and reduce mistakes. (Toyota)
• Released production and sales forecasts for 2018. The company expects overall sales to increase around 1%, although production will drop by (2)%. (Toyota)

VW Group ^(history)

• Porsche executives said that sales of the Panamera hybrid were such a success that the model could soon become constrained by battery supply. (Euro News)
• US regulators gave approval to the fix for Audi 3.0 litre diesel vehicles. (Reuters)
• Audi is recalling almost 1.3 million vehicles due to risk of fire. (Autocar). Separately, Audi is recalling 52,000 vehicles to fix fuel lines that may leak. (Detroit Free Press)
• The 3^rd party inspector appointed after the US emissions scandal has said changing VW’s culture will be a “three year marathon” and that it was still unclear why the company had chosen to defy the testing regime rather than comply with it. (Manager Magazin)
• Bugatti said that it has 300 orders for the Chiron model and delivered 70 vehicles in 2017. (Europa Press)
• The chairman of Porsche’s works council called for emails sent after work hours or when employees were on vacation to be blocked and deleted. (Handelsblatt)
• CEO Müller said that he believes the company must conduct greater political lobbying on transport issues, regardless of whether the position it advocates is popular. (Handelsblatt)
• German dealers expressed unease at several of the points in VW’s proposed new contract, concerned that VW is attempting to ring-fence customer support so as to cut dealers out in future. (Autohaus)
• Guaranteed the future of its Dresden “transparent factory” until 2025 and increased e-Golf production from 30 units per day to 70. (Handelsblatt)
  • Implication: This agreement is the latest in a long line of tough choices avoided by VW. Facing up to previous mistakes by not sinking anything further is a hallmark of good capital allocation. Instead, a company that bases its strategy on industry-leading scale makes a long-term commitment to a facility with 385 staff.

Other

• Aston Martin is recalling around 5,500 vehicles in the US due to problems with parking brakes and fire hazards. (Reuters)
• SAIC Capital, the investment arm of Chinese carmaker SAIC announced a partnership with Plug and Play, a start-up talent spotter. (SAIC)
• Subaru issued a press release saying that a report stating it had falsified emissions data was incorrect and it was working with government authorities to explain its validation techniques. (Subaru)

News about other companies and trends

Economic / Political News

• The OEM trade body in India, SIAM, released a report detailing measures that could be taken to reach the governments aspiration of widespread electrification by 2030. SIAM says that by 2030 40% of sales could be fully electric, with 100% fully electric sales by 2047. (Economic Times of India)
• The Chinese government is reportedly planning measures to stop subsidies for EVs as soon as 2018. (Bloomberg)
• The main German carmakers announced that they would extend their diesel scrappage incentive programs to June 2018, citing the success in encouraging replacement of old vehicles (70,000 trade-ins for VW). Carmakers followed suit in other countries too (e.g. Toyota extended their Uk program for an additional month). (Manager Magazin)

Suppliers

• Plastic Omnium acquired two companies to improve its hydrogen offerings. Swiss Hydrogen produces fuel cell control equipment and Optimum CPV makes hydrogen tanks. (Plastic Omnium)
• ThyssenKrupp reached an agreement with steelmaking employees to facilitate the merger of its European steel business with Tata steel. The deal is targeted at final agreement in 2018. (Economic Times of India)
• Faurecia will acquire heavy truck engine emissions specialist HUG Engineering. (Les Echos)
• Gestamp appointed a new CEO. (Gestamp)

Dealers

• German dealers expressed unease at several of the points in VW’s proposed new contract, concerned that VW is attempting to ring-fence customer support so as to cut dealers out in future. (Autohaus)

Ride-Hailing, Car Sharing & Rental ^(history)

• Didi Chuxing said that it had raised $4 billion to fund expansion, investments in AI and electric vehicles. (Didi)
• Uber was declared to be a transport company for regulatory purposes within the EU after it lost a court case. Although it was hailed as a massive blow, the impact on most of Uber’s existing operations is minor. (BBC)
• Grab launched ride hailing services in Cambodia. (Grab)
• An article suggested that autonomous vehicles could herald free ride hailing, with users agreeing to visit sponsoring companies to get their trip paid for. (The Atlantic)
  • Implication: Aside from the examples that the article mentioned (where some high-margin businesses pay taxi drivers to set punters on their doorstep in preference to rivals), the economics of the idea simply don’t stack up. Global advertising spending is a bit more than $500 billion, of which Google and Facebook take about 20%. A fully developed ride hailing market would have costs in the trillions of dollars, so even if all advertising spending were directed to offering free rides it would only cover a fraction of journeys.
• Uber hired a new COO — he worked with the recently appointed CEO at their previous employer. (TechCrunch)
• Uber is selling its leasing business to com, some of the payment will be in Fair.com shares. (Business Insider)
• Denso announced that it had invested in ride hailing and car sharing fleet management technology provider Ridecell and the two companies would work together to find uses for Denso’s technology in on-demand vehicles. (Ridecell)
• Electric scooter sharing service Scoot said that it would add “hundreds” of electrically assisted bicycles to its network in San Francisco. (Press Release)
• Car-pooling start-up Carsmartt announced that it was creating its own crypto-currency called Coinsmartt. The company claims that this will be fully interchangeable with other currencies and has been implemented to reduce transaction fees. (Press Release)
  • Implication: Initial coin offerings enter the word of on-demand mobility… it remains to be seen what real advantage the elimination of transaction fees have for both drivers and customers (they will still pay % of the bulk transactions they must make to feed the system). The advantages for Carsmartt are more obvious — it will control redemptions against fiat currency.
• Daimler will start a dynamic shuttle service in Berlin in partnership with Via and German public transport operator BVG. The initial fleet of 50 vehicles is forecast to eventually reach 300. The service is currently planned to run for two years before an evaluation of its merits will take place. (Via)
• Daimler acquired a 50% stake in French ride hailing company Chauffeur Privé with the intention of buying the rest of the company by 2019. (Daimler)

Driverless / Autonomy ^(history)

• Quanergy opened a new lidar factory that would allow mass production of its S3 solid state lidar. The company says that the current price of the unit is a “few hundred” dollars and believes it will drop to below $100. (Quanergy)
• Indian self-driving vcargo vehicle start-up Ati Technologies said that it plans to have a vehicle (which the firm is designing from a blank sheet of paper) available for sale in early 2019. The software controlling the self-driving vehicle was written in one month. (Economic Times of India)
• Waymo is reportedly working with insurance company Trov to provide compensation for accidents or lost and damaged personal items. The intent is that the insurance in bundled with the fare. (TechCrunch)
• Autoliv said it will demonstrate a concept that integrates voice and gesture recognition with in-cabin sensors to create a vehicle that can interact with occupants as if it were an additional passenger and also adapt its driving style based on non-verbal cues. (Autoliv)

Electrification ^(history)

• Spanish company Endesa said that its incentive scheme for employees to buy electric cars was singlehandedly responsible for around 7% of the industry volume for electric cars. (Europa Press)
• NIO launched the ES8, saying that the vehicle came with an advanced driver assistance system, battery swapping (in 3 minutes) and battery rental. There is a 70 kWh battery pack, providing over 500 km of range. (NIO)
• Morgan said that it would put its electric three-wheeler into production in late 2018 in partnership with Frazer-Nash. The car will have a range of around 120 miles. (Auto Express)
• Chinese electric vehicle maker Kandi said that it will buy Jinhua An Kao for $4 million because of the company’s battery swapping technology. (Kandi)
• The founder of the solid state battery firm Dyson purchased to help it deliver an electric car program has left the company. It isn’t clear if this will affect plans for the vehicle. (Autocar)
• McLaren engineers said that half an hour of high performance track driving requires battery capacity equivalent to 500 miles of on-road driving. (Autocar)
• Nikola trucks received a $10 million investment from Wabco. (Autocar)
• Faraday Future has reportedly secured an additional $1 billion in funding. (The Verge)
• The US electric infrastructure scheme that VW has agreed to fund as part of its emissions settlement picked Greenlots to carry out installation work. (Green Car Reports)
• Mysterious electric car start-up EVELOZCITY was reportedly created by ex-Faraday Future executives with backing from would-be Faraday Future investors put off by the behaviour of the controlling shareholder. (Electrek)
• BMW partnered with Solid Power to develop solid state batteries for a future electric vehicle platform. (Solid Power)

Connectivity

• LG and HERE agreed to cooperate on an LG-provided telematics service that will run on HERE’s platform. (LG)
• Chery said it will work with Linkmotion to create a technology platform for connected vehicles. (Telematics News)
• Continental said that recent V2X tests in China with 4G networks had delivered average latency (delays between sending and receiving signals) of 11ms and had a best result of 8ms. (Continental)
  • Implication: The tested latency is an interesting benchmark. Whilst impressive on a standalone basis, it shows that with current technology autonomous vehicles with a centralised AI are probably unsafe (i.e. the overall system latency would include sending information to the AI and then the processing / decision making time of the AI). As Continental point out, it does show promise as a way of sending emergency messages to vehicles.

Other

• Limebike published a research paper on the benefits of bicycle sharing. It contains general statistics in addition to city specific case studies. (LimeBike)
• Mobike will receive investment from Japanese messaging app Line and the two will partner to integrate bicycle rental into the app’s features (including payments). (TechCrunch)
• Ola and Yandex both made food delivery acquisitions. Yandex will buy Foodfox, adding to its UberEats franchise (Reuters) and Ola will take on the Indian operations of Foodpanda. (Deal Street Asia)

What happened in the automotive industry last week? Please enjoy our automotive industry briefing for the week of 11^th December to 17^th December 2017. A PDF version can be found here.

Favourite stories this week…?

• Friends Will Be Friends — PSA announced it had struck a new labour agreement with German unions. It includes early retirement and concessions on pay, in addition to (temporary) enforced shutdowns in administrative and engineering office. Will it be enough? I’m simply not convinced that more drastic labour reductions aren’t on the way, but maybe I’m too dogged in my beliefs. Perhaps PSA have found the silver bullet solution to victimless structural cost reduction.
• Come Together — Changan, FAW and Dongfeng have struck a cooperation agreement. They’ll develop new technologies and a shared platform together. This seems like it might have some significance in the long term to me. All three companies should be taken seriously and have ambition. If they execute a shared platform well it could teach western OEMs a thing or two about component sharing.
• Back In The USSR — UK politicians squabbled about the future of public transport. The government advocated a market based on-demand model while the opposition and unions shuddered at the dystopian nightmare that is a world without traditional buses. Those who believe that the free market will rule the roost in the future of mobility might want to think about how to win the hearts and minds of people in the corridors of power who take a different view.
• Should I Stay Or Should I Go Now? — Denso thinks that quantum computing might hold the key to a central traffic planning system capable of firing off real-time route planning instructions to a swarm of vehicles (driverless or not). It’s going to try it out in Thailand.

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News about the major automakers

BMW ^(history)

• Said it will build a new proving ground in the Czech Republic at Sokolov, close to the German border. (BMW)

Daimler ^(history)

• CEO Dieter Zetsche agreed to become the chairman of German holiday travel firm Tui from 1^st October 2018 onwards, sparking inevitable speculation about him vacating his position at Daimler earlier than the end of his contract in late 2019. (Manager Magazin)
• Will build a new office for its 900-strong US financial services staff in Texas. (Daimler)

Ferrari

• Reportedly planning a move to two-shift production from 2018 onwards as annual volume ramps up to more than 9,000 units. (Bloomberg)

Ford ^(history)

• Signed an agreement to develop digital mobility solutions for the residents of Hyderabad, India. Ford will work with the city’s government to assess the state of the current public transport and road network and then recommend solutions. Electronic payments appear to be a focus of the project. (Autocar)
• Denied that it was intending to source the next generation Fusion/Mondeo from China and import to North America and Europe after suppliers leaked documents appearing to show China as the sole source of the vehicle from around 2020 onwards. The company declined to comment on the implications for factories in Valencia and Mexico that make the car now. (Reuters)

Geely (includes Volvo)

• Volvo has started giving autonomous-capable vehicles to 100 families in Sweden in order to monitor how they use the vehicles everyday. At first the full capabilities of the vehicle will not be available. The company says it will have a fully autonomous car commercially available by 2021. (Volvo)

Honda ^(history)

• Invested about $9 million in Chinese car-sharing platform Reachda. (Caixin)

Hyundai / Kia

• Believes that battery prices will stop falling by 2020 because rising raw material prices will cancel out the benefits of design improvements and manufacturing scale. (Green Car Reports)
• Hyundai said that it still sees fuel cell vehicles as “the ultimate direction” but that it will do more to work on battery electric vehicles. (Bloomberg)
• Recalling about 520,000 Hyundai and Kia cars to fix problems with brake lights. (Detroit News)

Nissan (includes Mitsubishi)

• Nissan is launching an all-electric carsharing scheme called e-Share Mobi in Japan. (Nissan)

PSA (includes Opel/Vauxhall) ^(history)

• Announced that it had agreed a new labour contract with German unions. There will be an early retirement offering, with employees aged 57 and over eligible; contracted working hours will be 35 hours per week in lieu of 40 (saves money with no practical impact since PSA says the areas are underutilised); engineering and administration teams will work less than full hours over the next six months with the government refunding the lost time; the bonus scheme will reflect PSA’s turnaround plan. The company and unions also agreed to work on projects that will increase employee productivity and make it easier to move between jobs and locations. (PSA)
• Reorganised the purchasing divisions of Opel/Vauxhall and the rest of Groupe PSA into a single unit, effective January 2018. PSA believes that it will ultimately save around €500 million annually from the move. (PSA)
• Plans to double sales in Mexico (from 9,000 in 2017 ~0.6% share) by 2021, primarily through SUVs. (France Info)

Renault ^(history)

• Signed a joint venture agreement with Brilliance China Automotive to develop and manufacture LCVs. Three segments of vehicle will be produced — MPVs, medium and heavy vans — for three brands: Renault, Jinbei and Huasong. The JV is targeting sales of 150,000 units annually by 2022. Renault will have a 49% share. (Renault)
• Acquired a 40% stake in media company Challenges Group. Renault believes that it will help create content that is specific and engaging for users of autonomous vehicles. (Renault)
• Said that production of the Alipne A110 sports car has now begun at the Dieppe, France, plant. (Renault)
• Will achieve 55% local content in Morocco through a set of new agreements with the government. (Reuters)

Suzuki

• Will not partner with Toyota and Panasonic on batteries but might source from them. (Economic Times of India)

Tata (includes JLR)

• Executives said the Range Rover Velar was mainly attracting new customers, with around 20% of buyers coming from Evoque. (Autocar)

Tesla ^(history)

• Was reportedly under investigation by the SEC over the way that the company used and reported deposits for the Model 3. The investigation ended with no action against Tesla but a refusal by the SEC to comment led some to speculate that further investigations were ongoing. (Detroit News)
• Introduced a fair use policy for supercharger stations that forbids vehicles charging for commercial purposes. The exclusion appears to apply to new vehicles only. (Electrek)
• External analysts said sales discipline by the former Solar City operations, following the takeover by Tesla, were single-handedly responsible for a year-over-year fall in home installations in the US. (Reuters)

Toyota ^(history)

• Agreed to study the feasibility of a joint automotive prismatic battery business with Panasonic. (Toyota)
  • Implication: The hyperbole in some of the press about Panasonic abandoning Tesla ignored two things: (1) Toyota and Panasonic’s existing relationship already covers vehicles such as the Prius, so this is an extension of existing industrial logic; (2) the focus here is cylindrical cells, not the prismatic variety that Tesla and Panasonic have collaborated on so far.

VW Group ^(history)

• Came under fire from German politicians after the CEO publicly suggested that the country should end the lower tax rate on diesel fuel compared to gasoline. (Manager Magazin)
• Published the findings of a report into the activities of VW employees in Brazil during the military dictatorship. Evidence was found of employees cooperating with the regime, but not of systematic action by the company. (VW)
• Said that declining diesel sales and residual values in Europe were not significantly affecting the performance of its captive finance arm. (Handelsblatt)
• Executives said that one of the first BEVs for Audi will be a sports car that launches in 2020. (Autocar)
• Audi’s CEO said that the company would not sell motorbike subsidiary Ducati because it is the “perfect implementation of our premium philosophy in the world of motorbikes”. (Detroit Bureau)
  • Implication: As compelling as the argument seems to Audi, it’s not clear that this passes the test of strategic alignment. Should the Audi of cheeses (Le Chatelain for my money) be next on the list? It might sit well alongside VW’s sausage factory…

Other

• Three Chinese carmakers: Changan, FAW and Dongfeng (part-owner of PSA) signed a cooperation agreement to research new technologies and develop a common platform. (EV Obsession)
• Chinese manufacturer BAIC said that it would end sales of fossil fuelled cars by 2024. (EV Obsession)
• Aston Martin’s majority owners have reportedly engaged bankers to prepare for an IPO or sale in late 2018. The CEO has previously suggested that an IPO was likely sometime before 2022. (Reuters)

News about other companies and trends

Economic / Political News

• European passenger car sales were 1,216,702 units in November, an increase of 5.9% on a year-over-year basis. The additional sales were mainly attributed to an extra selling day. (ACEA)

Suppliers

• Autoliv confirmed that it would spin-off its electronics unit (which will include the Zenuity stake) during Q3 2018, having said it was planning a move earlier this year. The passive safety business will retain the Autoliv name. (Autoliv)
• Denso said it had purchased InfiniteKey, a company that specialised in using mobile phones to control vehicles and determine relative positioning of driver and car. (Denso)
• Lear will acquire EXO Technologies. The company specialises in improving the accuracy of existing GPS equipment (making it suitable for autonomous vehicles). (Lear)
• Semi-conductor company Renesas and autonomous driving hardware start-up Dibotics said that they would offer a jointly-developed system on chip that would help with real tiem 3D mapping. (Press Release)
• Visteon will transfer its listing from NYSE to Nasdaq. The company said that the move reflected its status as a technology company and provided cost benefits. (Visteon)
• Valeo will invest in Cathay CarTech, a China-focused fund with total spending power of €200 million. (Valeo)

Dealers

• Alibaba will trial two new car sales centres in Shanghai and Nanjing. The new sites will offer test drives to compliment the car vending machine concept that the company is investigating. The retail experiment is separate to the collaboration announced with Ford and will include vehicles from other brands. (Detroit Free Press)
• UK dealer Sytner Group acquired (used) car supermarket Car People, its second such purchase. (Motor Trader)
  • Implication: not only is this yet another sign of the consolidation among UK dealers (there are plenty of smaller deals on a weekly basis we don’t normally mention); it also reflects acceptance by established dealers that used vehicle sales are becoming more commoditised…. New car sales will always be different though, right?

Ride-Hailing, Car Sharing & Rental ^(history)

• BlueSG, run by Bollore, launched in Singapore with 80 vehicles and 32 stations. The company wants to get to 1,000 vehicles and 2,000 charging points by 2020. (Deal Street Asia)
• Continental and Avis started a pilot scheme in Kansas City where vehicles can be driven off with a smartphone that runs Avis’s app rather than having to go through Avis employees. (Continental)
• Go-Jek acquired three start-ups (Midtrans, Mapan and Kartuku) to help it expand its digital payments offering. (Deal Street Asia)
• UK politicians got into a war of words over the future of transport. After transport minister Chris Grayling said that the future of buses was towards “Uber-style, demand led services”, the opposition transport spokesman said “nobody wants to see Uber replacing local bus services” and unions were similarly critical. (Politics Home)
  • Implication: Unfortunately for the opposition and unions, in Ad Punctum’s view, Mr Grayling is dead-right in this instance. Not only are local bus services often patchy but they require huge subsidies. Providing that the cost to the user remains the same, operating an on-demand service can actually cost less overall — especially with autonomy. The strong views expressed in the UK show that although many are concentrating on what they see as the compelling economic argument for on-demand travel, there are plenty of import hearts-and-minds that need to be won over.
• Peer to peer car sharing operator Snappcar partnered with telematics provider Telia so that owners can see what is happening to their cherished steed whilst it is out of their sight. (Telematics News)
• Nissan is launching an all-electric carsharing scheme called e-Share Mobi in Japan. (Nissan)
• Honda invested about $9 million in Chinese car-sharing platform Reachda. (Caixin)

Driverless / Autonomy ^(history)

• AEye released further details of its iDar sensor ahead of demonstrations at CES. The product integrates lidar and camera feeds to create a 3D point cloud with complimentary photographic image, similar to TetraVue’s The advantage is that this removes lots of calibration necessary in systems that combine separate camera and lidar elements. It is especially useful in creating ground truth for images. (AEye)
• Honda representatives gave a presentation to authorised repairers that provided insight into the calibration routines of ADAS sensors. A repair shop will need a 40ft x 50ft area to perform the necessary routines. (Repair Driven News)
  • Implication: Calibration of driver assistance systems joins high-voltage electrification as an area where dealer groups are totally unprepared to properly look after vehicles. In addition to branding concerns for the OEMs, potentially dealers will lose business permanently if they don’t properly adapt.
• Tencent and GAC unveiled the iSPACE concept, a shared, connected and autonomous electric vehicle. (EV Obsession)
• Chinese start-up PIX said it had created an autonomous vehicle platform that reduces part numbers by 90% and dramatically improves manufacturing efficiency and time to market. (PIX)
• ZF showed off a concept steering wheel with a screen in the centre aimed at autonomous vehicles. (ZF)
• Volvo has started giving autonomous-capable vehicles to 100 families in Sweden in order to monitor how they use the vehicles everyday. At first the full capabilities of the vehicle will not be available. The company says it will have a fully autonomous car commercially available by 2021. (Volvo)

Electrification ^(history)

• 2050 Motors said that it had signed a final agreement with Chinese partner Aoxin Automotive that confirmed the arrangements to launch the e-Go EV. The company also hopes that the Las Vegas authorities were sufficiently impressed to give it the sire for a factory. (2050 Motors)
• Alibaba has invested an undisclosed amount to take a stake of around 10% in electric vehicle start-up Xpeng (Xiaopeng) Motors. (Deal Street Asia)
• Faraday Future was the subject of a scathing in-depth article which compared the company’s funding model to a ponzi scheme and said executive management was in chaos. (The Verge)
• Chinese smartphone maker Xiaomi said it hopes to sell electric cars in India. (Zeebiz)
• Electric car start-up NIO is reportedly considering an IPO in 2018, in addition to a possible sale of 30%-40% of its US arm, which concentrates on BEV technology rather than carmaking. (Bloomberg)
• Dutch charging network operator Fastned raised €12 million through a public bond to fund expansion. (Fastned)
• Hyundai believes that battery prices will stop falling by 2020 because rising raw material prices will cancel out the benefits of design improvements and manufacturing scale. (Green Car Reports)
• A group of Japanese companies including Toyota, Nissan and Honda that previously agreed to work together on hydrogen infrastructure said that they would form a company to achieve their objectives. (Honda)
• Tesla introduced a fair use policy for supercharger stations that forbids vehicles charging for commercial purposes. The exclusion appears to apply to new vehicles only. (Electrek)

Connectivity

• Denso and Blackberry said that they had developed a digital cockpit product, based on Blackberry’s QNX software, that allows different parts to be integrated, yet operate securely. For instance, the infotainment element could share data with the driver’s instrument panel without being able to control it. (Blackberry)
• Denso said that it will start trialling a quantum computer to assess traffic data from 130,000 connected vehicles in Thailand. The aim of the test is to see whether quantum computers can process the data more quickly than conventional supercomputers, which may lead to improved real-time optimised route generation. (Denso)
• UK road operator Highways England is looking at ways of ensuring 5G connectivity on all major roads. (BBC)

Other

• Aurora Flight Sciences, owned by Boeing, demonstrated a fully autonomous helicopter that could be requested by operators (US Marines) on the ground to transport goods to another location. (Press Release)
• US bicycle sharing start-up Limebike launched in Germany and Switzerland, saying that by the end of 2017 it will have a fleet of 40,000 bicycles (mainly in the USA). On average the company serves 10,000 users each day. (Limebike)
• US supermarket Target acquired delivery specialist Shipt to improve its on-demand offering. (Press Release)

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 4^th December to 10^th December 2017. A PDF version can be found here.

Favourite stories this week…?

• The Future Is Bright — Lidar maker Ouster emerged from stealth mode with plans to produce 10,000 units a month from late 2018 onwards. I’m not quite clear whether they have buyers for nearly 30,000 vehicles per year worth of the sensors… or should I be looking at this news, plus the Volvo/Uber deal and then put two and two together?
• For My Next Trick — BMW’s CEO drew attention to the company having trademarked i1 to i9 and iX1 to iX9… I wonder what the iNext is going to be called when it comes out in the shops?
• It’s Gonna Take Money — WM Motor said that they are going to spend $3 billion to deliver a three vehicle, 100,000 unit a year, line-up. Seems to me that they aren’t getting that much for their money (I’d want closer to 1.5 million units per year for the same amount).

Find our archive here.

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News about the major automakers

BMW

• Rolls-Royce’s CEO sad that the Phantom will likely have an all-electric version (definitely no hybrid) but at the moment there is no demand from customers for such a model. (Autocar)
• Denied claims by an environmental group that it had fitted defeat devices on diesel vehicles sold in Germany. The group said that it had tested vehicles on and off static tests and found discrepancies. (Economic Times of India)
• Presented a strategy update. Although most of the targets, especially around longer term product are already in the public domain, there were some new slides explaining the company’s view on topics such as electrification and autonomy. (BMW)
• When presenting the company’s strategy update, BMW’s CEO drew attention to the company having trademarked i1 to i9 and iX1 to iX9. He also said that the i3 has conquest rates in excess of 80 percent. (BMW)
• BMW’s R&D head said that the company was better than all competition in technical competence and value creation around electrical powertrain and that it would always develop e-drives, power electronics and battery systems in-house, but could use make-to-print outsourcing. He illustrated the data challenge from autonomous vehicles saying that currently BMW’s entire storage requirement was 60 PB, but autonomous vehicles will increase this to 500 PB. On autonomous capability he was bullish saying vehicles would “fully master level 5 right from the outset in 2021” and mentioned access to free real-time HD maps as a key enabler that BMW has worked on delivering. (BMW)

Daimler

• Reorganised its trucks division to give the China market greater prominence. (Daimler)

FCA

• Opened a new distribution centre in Detroit, USA, adding 100 jobs. (Detroit News)

Ford

• Said that it will launch 50 new vehicles in China by 2025 and that it local assembly will increase by a further five models, not including the Zotye JV, one of which will be the company’s first serious attempt at a BEV. As part of the plan, Ford wants to contain administrative costs, saying the structure would not increase beyond 2018 levels and that it was creating a single distribution group that would work with its three Chinese JVs. (Ford)
• Agreed a collaboration with Alibaba that will potentially encompass a number of areas including digital marketing, smart vehicles and mobility services. The initial projects will look at retail sales. (Ford)
• Planning to produce its first mainstream electric vehicle in Mexico rather than Michigan, USA. Ford said this was because it expects the market for fully autonomous vehicles to take off quickly so it wants to work on readying Flat Rock to meet the anticipated demand. (New York Times)
• Introduced updated versions of the Transit Courier and Transit Connect (small commercial vehicles). Powertrain is now Euro 6.2-capable and Ford’s press release drew attention to the gasoline engine derivatives which feature fuel economy technologies such as cylinder deactivation. (Ford)
• Released its 2018 trends report showing the areas that the company is watching. NOTE: the report is about societal change so those hoping for insights into diesel mix or adoption of autonomous vehicles will be disappointed. (Ford)
• Not wishing to be outdone by GM, Ford released a blog post about its autonomous vehicle ambitions, led by a 250-strong team at Argo AI. Ford believes that a vehicle must be commercial-grade and feature upgraded attributes to enable a longer service life. The company will be beginning pilot trials in 2018, although it isn’t clear whether or not this will feature the all-new PHEV that the company is working on. (Ford)
• Reportedly reduced the line rate in Valencia by 120 vehicles per day and will shed 280 temporary staff (up from around 100 a fortnight ago), with unspecified further employee reductions made through relocation and natural attrition. (Europa Press)

General Motors

• Launched an online payments and reservation service called Marketplace that is integrated with the vehicle instrument panel. GM claimed the product as a world-first but it wasn’t clear how it is materially different to offerings from the likes of Ford and PSA. (GM)
• Scheduled downtime at the Oshawa, Canada assembly plant due to weak sales of the Chevrolet Impala and Cadillac XTS made there. (Automotive News)

Honda

• Signed a collaboration agreement with SenseTime to work on artificial intelligence applications for autonomous vehicles. Honda is particularly interested in improvements to image recognition. (Honda)

Hyundai / Kia

• Suffered continued strikes in South Korean as management rejected union demands for higher pay. Five plants have been affected, with over 43,000 vehicles lost. (Yonhap)

Nissan (includes Mitsubishi)

• Created a new brand for robo taxi ride hailing called Easy Ride, in partnership with DeNA. The companies are planning a two week long public trial in March 2018 in Yokohama, Japan. Full services will be introduced by the “early 2020s”. (Nissan)
• Mitsubishi signed an MoU with the Indonesian government to find ways of promoting electrified vehicles in the country. This seems to be an opportunity to influence government policy around incentives. (Mitsubishi)
• Will investigate vehicle-to-grid applications for electric vehicles in Japan with TEPCO — Nissan already has several projects running in different European countries. (Autocar)
• CEO Carlos Ghosn gave an interview in which he said that the industry would be totally transformed in 10 years, with large changes starting in the next three to four years. He said that significant further guidance from regulators was necessary before the winning technology set could be identified. He also said the best business advice he had ever been given was “if you want recognition, buy yourself a dog”. (Nissan)

PSA (includes Opel/Vauxhall)

• Announced a 50/50 JV with Nidec to develop and produce electric motors for vehicles, with PSA as the anchor customer. The manufacturing base will be in France. (PSA)
• Created a concept urban mobility vehicle as part of a European consortium with public funding. The vehicle is a PHEV using 48V electrification and an engine from a scooter. (PSA)
• CEO Carlos Tavares was appointed head of the European manufacturers association, ACEA, for 2018. (ACEA)

Renault

• Launched a new 1.3L petrol engine that it has developed in partnership with Daimler. (Renault)
• Announced the re-launch of Karhoo, the taxi aggregator app that Renault purchased after its failure. The company forecasts that by the end of December over 150,000 taxis will use the app. (Renault)
• CEO Carlos Ghosn gave an interview in which he said that the industry would be totally transformed in 10 years, with large changes starting in the next three to four years. He said that significant further guidance from regulators was necessary before the winning technology set could be identified. He also said the best business advice he had ever been given was “if you want recognition, buy yourself a dog”. (Nissan)
• Created a running prototype of the Symbioz concept vehicle in order to show the company’s vision of mobility in 2023 with a autonomous-capable, privately-owned, vehicle. Confusingly, part of this vision seems to be people sitting in the car as it drives, experiencing the drive through virtual reality (video at 01:00 if you don’t believe me). (Renault)

Tata (includes JLR)

• Tata is working with Thai start-up DRVR to provide fleet management services in markets including Thailand and Indonesia. (Autocar)

Tesla

• British Insurer Direct Line has started offering a 5 percent discount on vehicles fitted with autopilot. (Electrek)
• CEO Elon Musk said that the company was creating its own self-driving hardware with help from AMD and that fully driverless vehicles would appear in two years time. (Futurism)
  • Implication: Given that some owners have already purchased the fully driverless option, this indicates that Tesla will have to replace hardware in the vehicles in order to enable the feature. If Tesla develop a cost-effective way of doing this then we could see hardware upgrades going from zero today (unless you want a new stereo for your McLaren F1), to a way of life in the future.

Toyota

• Said that it has stopped selling the diesel powered Auris in the UK. (Autocar)

VW Group

• Announced that Škoda would install a new paintshop at its Mladá Boleslav plant that will increase capacity to 2,700 cars per day from June 2019. (VW)
• Launched a connected vehicles brand called RIO for MAN and Scania vehicles to supply telematics data to operators. RIO will operate a freemium model with a service called RIO Essentials on all vehicles. (VW)
• Audi said that it had developed a system that could create a 3D awareness of the surrounding area using a mono camera and a set of neural network algorithms. The system operates at 15 fps, so will have large gaps in its situational awareness at higher speeds — e.g 0.9m between frames at 30mph — nevertheless it could have immediate application in low speed situations such as parking garages. (Audi)
• VW’s inhouse mobility start-up Moia said it had created a purpose built vehicle for on-demand ride hailing The company plans to launch services in Hamburg at the end of 2018. The vehicle itself is fully-electric with a claimed range of 300km and space for six. It was created by VW’s commercial vehicles group. (VW)
• According to Porsche executives, around 60 percent of Panamera models sold in Europe were hybrid versions. In some markets, the number is as high as 90 percent. The company is already working on derivatives of the Mission E to increase its all-electric portfolio. (Electrek)
• Reportedly issued a stop-ship on T6 vans because of excessive emissions that the company has detected, and has yet to explain. (Reuters)
• Lamborghini launched the Urus “super SUV”. To ensure it is “suitable for everyday driving”, the company equipped their latest model with a 650hp V8, rear wheel steering and a $200,000 price tag. (Lamborghini)

Other

• Subaru said that its first BEV will be a variant of an existing car. The challenge with this route is normally battery package — expect a higher price and compromised range. (Autocar)
• Chinese car company BYD signed an agreement for a plant in Morocco where it will assembly electric vehicles. The company also plans to produce battery packs and electric commercial vehicles in the country. (Les Echos)
  • Implication: Established companies like the low-cost footprint of North Africa but struggle to source the latest technologies there. If BYD helps to establish significant battery expertise in Morocco, more could follow (not least Renault and PSA).
• McLaren unveiled the £750,000 Senna supercar. An upgraded version of the 720S, it has an engine with an output of 800PS and will be built in a limited edition of 500 models. (McLaren)
• Saleen showed the 450hp Saleen 1 sports car at the LA show. The vehicle will be built with capital from Jiangsu Saleen Automotive Technology Group. (Auto Blog)
• Morgan will end production of the Aero 8 with a limited edition run of eight Aero GT cars. (Car Buzz)
• W Motors announced the production-ready 800 hp Fenyr SuperSport supercar. Priced at $1.85 million, the company is aiming to sell 25 examples during the production run. (Car Buzz)
• Well-funded Chinese start-up WM Motor displayed the prototype of its first model, an SUV and said that it would use the Weltmeister brand for its products. The company hopes to sell 100,000 vehicles each year once it has launched all three vehicles in its portfolio. The CEO says that the company has raised $1.81 billion so far and requires a further $1.5 billion to bring all vehicles to production. (Electrek)
  • Implication: Although $3 billion sounds about right for a from-scratch three vehicle portfolio, this would be expected to provide three differentiated platforms and manufacturing capacity of near 500,000 units of each model (c. 1.5 million in total). Since stated intentions are for 100,000 vehicles per year, this seems an expensive way of producing this portfolio and footprint.
• Spyker will end production of the C8 Aileron with a three car limited edition. It isn’t clear whether these are part of the “last five” units that the company announced in March 2016, or additions to the run. Production of its successor, the C8 Preliator, will begin in Coventry, UK in summer 2018. (Spyker)
• NEVS said that it will restart production at the former Saab plant in Trollhättan, Sweden in order to assemble 9-3 EVs. The company is also looking to expand existing capacity in China. (Autocar)
• Chinese start-up Leapmotor said it had received pre-A funding from Sequoia Capital — this is slightly confusing since the company claims to have already invested $395 million in production and R&D. (China Money Network)

News about other companies and trends

Economic / Political News

• German new car sales in November of 302,636 vehicles were up 9.4% on ayear-over-year basis. Diesel share fell by (17)%. (KBA)
• UK car sales in November of 163,541 units were down (11.2)% on a year-over-year basis. Diesel demand fell (30)%, only partially offset by increases in petrol and electrified products. (SMMT)

Suppliers

• Rockwell Automation acquired Odos Imaging, a specialist in 3D time of flight sensors (a type of low-cost distance measurement). Automotive will be one of the application areas for the technology. (Vision Systems)
• Samsung invested in Chinese machine vision firm Vion Technology. Although at present the firm is focused on image recognition from static cameras, the same techniques could have application in vehicles, or in V2I communication and decision-making networks. (China Money Network)
• Continental showed the ProViuMirror, a product that replaces wing mirrors with a single in-car video. The company claims removing the wing mirrors will save 2% fuel economy. (Continental)
• Denso said it would fully absorb ASMO, a business that it has so far consolidated on the basis of 92.4% ownership across various entities. (Denso)
• As expected, ZF’s CEO resigned. The company announced it had appointed former VAG vetern Franz-Josef Paefgen as Chairman. He said it was “vital {for ZF to] settle down”. (ZF)

Dealers

• UK dealers were reportedly loss-making in October. Used vehicles performed well across a range of measures — price and stock turns in particular — but failed to offset new vehicle sales deterioration. (Automotive Manager)

Ride-Hailing, Car Sharing & Rental

• Renault announced the re-launch of Karhoo, the taxi aggregator app that Renault purchased after its failure. The company forecasts that by the end of December over 150,000 taxis will use the app. (Renault)
• Uber has run into licensing problems in two further UK cities — York and Sheffield. As with London, the company is able to appeal. (BBC)
• ComfortDelGro is buying a majority stake in a private hire vehicle fleet operator from an Uber (Reuters)
• Didi will reportedly launch in Mexico early in 2018. It recently apparently gave up on the US. (Reuters)
• Go-Jek said it was planning to open its first overseas service, in the Philippines early in 2018. (Reuters)
• Go-Jek has invested in Bangladeshi ride hailing firm Pathao. (Deal Street Asia)
• Chinese electric vehicle car sharing company PonyCar has reportedly raised $37 million in a series C round, bringing total fundraising to $83 million in just over a year. (China Money Network)
• In a preview of some of the problems the sharing economy will yield, car rental operators were criticised for not wiping user data such as phone and location details when a vehicle was passed to a new user. (V3)
• Fuelling rumours of an impending IPO, Lyft boosted its fund-raising by another $500 million and has just hired a VP of corporate development and IR. (TechCrunch)

Driverless / Autonomy

• The autonomous vehicle trial in Boston between Lyft and nuTonomy (now owned by Aptiv) has now begun. Customers order a Lyft ride as normal and are sent a nuTonomy car if they are in the same area. (nuTonomy)
• Aptiv’s CEO repeated the company’s view that autonomous vehicle system cost will have fallen to $5,000 per unit by 2025. Although this led to plenty of media excitement, the company has been showing this figure in public domain presentations for over a year. (Bloomberg)
• Malaysian media profiled the efforts of local self-driving vehicle start-up Reka Studios. (Paul Tan)
• Baidu led a $15 million investment in Chinese driver assistance start-up Smarter Eyes Technology. (SCMP)
• A presentation by Apple at a machine learning conference showed more of company’s research into image recognition and scene understanding (such as identifying the movement of partially obscured pedestrians). Some commentators speculated that Apple are having to be more open in order to attract talent to the company. (Wired)
• Rinspeed previewed the Snap autonomous vehicle, which will be displayed at CES in January. The vehicle uses a skateboard concept whereby different body shapes can be mounted quickly onto a running base, enabling re-purposing for new roles. (Autocar)
  • Implication: Ad Punctum has repeatedly supported skateboard concepts that can be adapted to different roles over unibodies that are more rigid. With the Snap following (relatively) hot on the heels of GM, the more the merrier. Skateboards have considerable technical challenges to overcome, not least secure connection for crash and how to avoid duplication of expensive sensors that are mounted on the top hat. The greater the number of teams working on the problem, the more likely a good solution will emerge.
• Aston Martin said that it has intentionally not fitted ADAS technologies to new vehicles because customers want a more pure driving experience. CEO Andy Palmer said that partner Daimler could supply such devices on a plug-and-play basis if customer perspective changed. (Automotive News)
  • Implication: It seems likely that in a future of autonomous vehicles, the idea of driving oneself won’t disappear but it will be distilled into something more focused than today’s vehicles. Aston Martin are right to be monitoring this trend.
• Lidar start-up Ouster emerged from stealth mode announcing that it has $27 million in funding. The company says that its 64 line product, the OS1 is available now for $12,000 per unit. The company hopes to manufacture 1,000 units per month at the beginning of 2018 and be running at a rate of 10,000 units per month by late 2018. (Forbes)
  • Implication: A run rate of 10,000 units per month would supply something in the region of 24,000 to 30,000 L4/5 vehicles each year or about 120,000 L3 vehicles per year. Those are serial production levels, far in excess of all cumulative prototype demand. It remains to be seen whether these production forecasts are based on customer orders or simply for scene-stealing effect. $12,000 per unit looks much too high for retail (L3) take-up.

Electrification

• As a guide to the cost of high-performance electrification infrastructure, ABB announced that it had secured a contract to supply 600kW and 400kW chargers for a bus route in Nantes, France operated by 20 vehicles. The cost? A cool $20 million. (Inside EVs)
• A group of OEMs have pledged to source raw materials for electric vehicles in an ethical and environmentally responsible way with monitoring by a 3^rd BMW (which earlier announced a unilateral plan) is part of the group. (Green Car Reports)
• A consortium of German companies, including Porsche and BMW, is working on a project called FastCharge to develop a prototype 450kW charger in 2018. If successful, the Ionity JV (of which both are members) could work on this technology, rather than the 350kW currently planned. (Inside EVs)
• Compact electric car start-up Uniti says that it will provide five years of free electricity with each model for customers in Sweden. (Uniti). The company said that its launch product would be on sale for between €15,000 and €20,000. It can be reserved with a fully refundable deposit of €149. (Uniti)

Connectivity

• Indian start-up Netradyne launched a low-cost driver monitoring and ADAS product, aimed at commercial fleets called Driveri. (Autocar)
• Tata is working with Thai start-up DRVR to provide fleet management services in markets including Thailand and Indonesia. (Autocar)

Other

• Bicycle sharing firm OBike reportedly suffered a data breach in which account details were stolen. (CNET)
• Bicycle sharing firm Ofo is said to have raised $1 billion. (Business Insider)
• Singaporean telecoms company M1 and university NTU have started a three year project researching drone traffic control systems. (Today)
• Bicycle sharing firm Hellobike raised $350 million, despite recently merging with Youon Bike, reportedly because of weakness in the face of brutal competition. (China Money Network)

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 27^th November to 3^rd December 2017. A PDF version can be found here.

Favourite stories this week…?

• I Go Driving In My Car — GM held their autonomous vehicle open day but once the dust settled, it wasn’t entirely clear what the point had been. Was it intended to show that the company was on the cusp of self-driving greatness? Those given a test drive didn’t emerge with that opinion. Was it to show that GM is a company that is going to be the all-out leader in autonomy? Maybe, but answers to investor questions were thin gruel and is it really giving anything away to say how you measure capability? GM talked the talk, then didn’t walk the walk. Then said walking wasn’t the point. It just seemed a bit odd.
• Sharing Is Caring — Finally, within the talk of component sharing between FCA and Hyundai we hear mention of transmissions. Perhaps it will turn into nothing, perhaps we will get a joint design / separate build arrangement like GM and Ford have. But, just possibly, we could see transmission commoditisation emerging. Fingers crossed.
• Whatever You Want — Seat claim that they’ve tamed the desire for constant wholesales and are ready to take a serious stab at build-to-order. Having only done so 300 times in their pilot program, sales zone managers won’t be quaking in their boots just yet, but could it take off?

Find our archive here.

SIGN UP FOR THE WEEKLY UPDATED TO BE EMAILED TO YOU HERE

News about the major automakers

BMW

• Launched an upgraded powerpack for the i8 whilst unveiling the roadster derivative. Battery capacity increases from 7.1 kWh to 11.7 kWh and the power of the electric motor now has an output of 141hp. (Green Car Reports)
• Launched car sharing in China under the ReachNow brand (same as US) in partnership with Chinese car sharing operator EVCARD. The starting location is Chengdu and will only use all-electric vehicles. (BMW)
• Halted production of i3 and issued a recall in the US due to concerns around seat belts. (Green Car Reports)
• Open to sharing electrification technology on small cars with other manufacturers. (Times of India)
• Said the price of an autonomous car (based on the iNext concept) could be below $100,000 in 2020. (Times of India)

Daimler

• Reportedly rebuffed an offer by Geely to buy a stake of between 3% and 5% through a discounted offering of new stock. Daimler’s issue was supposedly the additional shares and it said it would be comfortable with a purchase of existing shares. (NASDAQ)
• Presented with a large bill by Sixt after tearing down and testing a leased Tesla Model X in violation of the rental agreement. Daimler technicians thought they had done a good job of screwing the car back together but came unstuck when the vehicle’s geographic data showed it pounding the miles at Daimler test sites. Oops. (Handelsblatt)

FCA

• In talks with Hyundai on component sharing with transmissions and fuel cells as areas of particular focus. (Economic Times of India)
• CEO Marchionne said that the company “hadn’t made up [its] mind” on a spin-off of Magneti Marelli and Comau, but that should such an event take place, the two companies would be listed separately. (Economic Times of India)
• Alfa Romeo will become the title sponsor of the Sauber F1 team, using Ferrari hardware, in an attempt to increase the brand’s image. (Economic Times of India)
• Maserati has appointed Accenture Interactive as their marketing agency. Accenture have promised to dramatically improve the data and digital management capabilities of the sales and marketing arm, in addition to the more traditional work of content production and advertising placement. (Europa Press)

Ford

• Unveiled the replacement for the Lincoln MKX and changed its name to the Nautilus. As part of a plan to deliver a more upscale user experience, Lincoln owners will get a paid subscription to a service that enables them to queue jump airport security lines. (Detroit News)
• Announced four recalls covering over 200,000 vehicles. The main issue is loose front power seats. (Ford)
• Enraged millions of wrestling fans by suing John Cena after the sports entertainment superstar sold his Ford GT before the end of the exclusivity period defined in the sales contract. (Economic Times of India)

Geely (includes Volvo)

• Reportedly saw an offer to buy a shareholding of between 3% and 5% of Daimler through a discounted offering of new stock rebuffed. Daimler’s issue was supposedly the additional shares and it said it would be comfortable with a purchase of existing shares. (NASDAQ)
• Lynk&Co began selling its first model and said that during a pre-launch sales event on 17^th November it had sold the 6,000 allotted cars in under three minutes. (The Verge)
• Investigating whether to manufacture Lynk&Co vehicles at Volvo plants in Belgium and the USA. (CNBC)
• Rumoured to be considering a new product line-up for Lotus, including an SUV built off Volvo’s CMA platform (it isn’t quite clear how this will fit in with Lotus’s lightweight philosophy). Geely executives expressed a desire for the brand to be “ranked alongside Ferrari and Porsche”. (Autocar)

General Motors

• Held its much-vaunted presentation and test drive of autonomous vehicle technology developed by Cruise. GM intends to have “thousands” of autonomous vehicles on the road in 2019. During the presentation, executives said the annual run rate of revenue would be measured in billions “pretty quickly” (webcast 1:25:00) and that the business would operate with a 20% – 30% margin. The company’s financial projections are based on “north of 50%” utilisation. Executives also said GM believes that “price is the dominant factor” in customers choosing different transport solutions. (1:34:00). Reaction to the event was mixed. Few rides earned rave reviews (see a selection below) and GM seemed at pains to compare itself favourably to Waymo’s efforts. At the same time, executives demurred whenever they were asked about objective benchmarks of performance, implying that they hand them at their fingertips but didn’t want to share. (GM)
  • Implication: GM’s view on the importance of price elasticity matches Ad Punctum’s analysis (please get in contact if you would like to discuss the bid/ask model that was built as part of the Mobility from first principles white paper earlier in the year).
  • Futurism — several failed attempts to summon the car, no disengagements during the drive although the vehicle stopped for a time in the opposite lane, “ride, while safe, was anything but smooth”
  • Reuters — human driver had to disengage automatic mode when the car stopped behind a stationary truck
  • TechCrunch — ride was uneventful “makes me optimistic seeing about self-driving become a transformative experience”
  • Recode — the car loitered awkwardly for a dog going to the toilet, overall the ride was “relatively smooth”

Honda

• Demonstrated the use of augmented reality to show new features of a vehicle and even allow the occupants to simulate driving in it. (Honda)

Hyundai / Kia

• Suffered labour disruption in South Korea as unions told employees not to support the launch of Kona SUV production due to wider disputes over pay, working conditions and outsourcing. (Reuters)
• Teaming up with Smartcar to enable new services in connected vehicles. Amongst other things, 3^rd party service operators will be able to locate and access the vehicle (with the owner’s permission). It will also be possible to use the vehicle in peer-to-peer carsharing. (Hyundai)
• In talks with FCA on component sharing with transmissions and fuel cells as areas of particular focus. (Economic Times of India)

PSA (includes Opel/Vauxhall)

• Said that Russian production of 1T CVs would commence in Q1 2018 and that the vehicles would have 50% local content — an improvement on the c. 35% local sourcing of C4 and 408. (PSA)
• Reportedly considering trying to reclaim some of the purchase cost of Opel / Vauxhall from GM because of the poor state of the brands’ 2020 emissions compliance plan. A figure of €600 million – €800 million has been mentioned. GM publicly said no claim had yet been made formally and extensive due diligence had taken place. The central issue appears to be GM’s assumptions for mix-forcing into diesel and all-electric vehicles. (Reuters)
• Warned Opel unions in Spain that the Zaragoza plant may not build the electric version of the Corsa, due sometime after the launch of the next conventionally powered model in 2019, without a competitive agreement. The offer from PSA/Opel is reportedly a (6)% decrease in wages for 2018 and wage freeze in 2019/20, in addition to reductions in break times and shift allowances. (Europa Press)
• Reportedly having to increase gasoline engine production in China even further due to falling diesel sales in Europe, importing an additional 100,000 engines versus prior estimates of 50,000 units. PSA is apparently routing the imports through the engine plant at Douvrin rather than direct to assembly plants, creating logistical complexity. (Les Echos)
• Completed the sale of all land at the former Aulnay site. (Journal Auto)
• Citroën dealers in Germany are reportedly outraged at the company’s proposal to change their incentives from 2018 onwards. The key issue is the company’s desire to link more of the margin to dealer satisfaction surveys. (Autohaus)

Tesla

• Activated a 100 MW stationary storage battery in Australia than Tesla had promised to build in 100 days or provide for free. The facility was switched on after 60 days and is situated next to a wind farm. (BBC)

Toyota

• Announced a series of executive moves, including a new CFO and a change to the structure that will decrease the power of central functions and create greater regional control and accountability. (Toyota)
• Announced that it will build a facility that can generate hydrogen from agricultural waste and then convert it to electricity using fuel cells. The power plant will be online in 2020 and have an output of 2.35 MW. (Toyota)
• Created a $4 million fund to provide money for mobility solutions aimed at users with lower-limb paralysis. (Toyota)

VW Group

• Reportedly in discussions to purchase a stake in Russian manufacturer GAZ. (Economic Times of India)
• In talks with Chinese manufacturer JAC to deepen an existing relationship developing electric cars. The two companies are interested in making commercial vehicles together. (Automotive Manufacturing Solutions)
• Audi has agreed a new employment guarantee that lasts until 2025 with unions. (Handelsblatt)
• Audi launched a new facility for dealerships that allows a customer to quickly drop off vehicles for servicing without having to wait around for a receptionist. (Audi)
• Seat is rolling out a new online ordering system where a buyer can specify a vehicle and then choose a dealership to collect from within 3 weeks. It says that so far the technology has been trialled in Austria with 300 units sold. (Europa Press)
• Seat told employees that in the event of Catalonian independence it would probably close the Martorell factory because the region would be outside the EU. (Faconauto)

Other

• Aston Martin have started work on a Formula 1 engine in the expectation of entering the sport in 2021. The company is already a sponsor of the Red Bull team. (BBC)
• ATS showed off their €1.15 million 2500GT supercar, saying that only 12 would be built. (Auto Moto)
• Aria launched the FXE hybrid supercar at the LA show. The $1 million vehicle features extensive use of additive manufacturing and should be available for delivery in 2019. The lifetime sales target is 400 units. (Motor Trend)
• BYTON announced the opening of a North American headquarters, saying it it would have 320 employees there soon. The company is continuing to work on its three model line-up of an SUV, MPV and sedan and will show the SUV at CES in January 2018. (BYTON)

News about other companies and trends

Economic / Political News

• US light vehicle sales in November totalled 1.38 million units, SAAR of 17.35 million units. (Wards)
• Sales of cars in Spain for November reached 104,470 units, an increase of 12.4% on a year-over-year basis (Xinhua)
• French passenger car sales were 180,012 units in November, an increase of 10.3% on a year earlier. (Xinhua)
• The UK government expects to boost local sourcing of automotive parts from around 44% of average vehicle content to 50% by 2022. (Autocar)

Suppliers

• Denso and NEC announced a JV to developed information and communications equipment for connected vehicles. (Press Release)
• Japanese supplier Toray Hybrid Cord, who make textile products used in tyres and other products, said that it had uncovered incorrect quality testing from 2008 to 2016 at its plants. (Les Echos)
• Brose is expanding in North America, adding 300 HQ jobs and building a new factory. (Detroit News)
• ZF’s chairman resigned and the future for the CEO looks bleak after they fell out with labour representatives and major shareholders. (Handelsblatt)
• ZF will purchase IEE’s sensing division (around 20 people) to improve its autonomous vehicle offering. (Autonomes Fahren)
• French supplier Maike Automotive is struggling to find a buyer. Court appointed administrators have sent emails to competitors offering the firm and hope to have bids ahead of a 10^th January deadline. (Les Echos)
• Navdy, a start-up offering aftermarket heads-up displays, appears to be going out of business. (TechCrunch)

Ride-Hailing, Car Sharing & Rental

• Didi Chuxing ended its pilot scheme in the USA and instead is directing users to download Lyft. (Technode)
• Uber’s Q3 financials showed net losses of $1.46 billion on $9.71 billion of gross bookings and $2.01 billion of net revenue. (Business Insider)
• Softbank’s offer for existing Uber shares apparently values the company almost a third lower than its last major funding round. (TechCrunch)
• According to leaked documents, Lyft lost $(206) million on $483 million of revenue in the first half of 2017. (Business Insider)
• Ola has launched a bicycle sharing service called Ola Pedal. (TechCrunch)
• BMW launched car sharing in China under the ReachNow brand (same as US) in partnership with Chinese car sharing operator EVCARD. The starting location is Chengdu and will only use all-electric vehicles. (BMW)

Driverless / Autonomy

• Fisker said it would build an autonomous shuttle called Orbit with backing from Chinese company Hakim Group. Deliveries are targeted to start by the end of 2018. (Boss Magazine)
• Zoox gave a rare test ride to a reporter — they were impressed with the vehicle, saying it “trumped [all the other AVs they had experienced] in terms of the complexity of situations it could handle”. (Bloomberg)
• KPMG released a whitepaper saying that new vehicle sales could decrease by half in 2030 in a world of proficient autonomous vehicles. (KPMG)
• Waymo said that its test fleet has now driven 4 million real-world miles. In the last six months the vehicles covered 1 million miles and the company says that this is accelerating. In the past year Waymo has completed 2.5 billion simulated miles. (Waymo)
• Continental said its fifth-generation radar would be in production by 2019/ The company claims a range of up to 300m for small objects. Note that Continental view “small” as things like spare wheels, not bricks. (Continental)
• Optimus Ride will operate autonomous buses in a large US housing development. Testing has already begun, and passenger rides should start in 2018. (Boston Globe)
• Intel formed a partnership with Warner Bros. to develop immersive experiences in autonomous vehicle cabins, possibly through the use of augmented reality. The companies aim to create a concept vehicle together. (Intel)

Electrification

• Former BMW designer Chris Bangle unveiled the REDS all-electric city car. The vehicle uses an aluminium spaceframe and incorporates a solar panel to augment battery charging. Chinese truckmaker CHTC will produce the vehicle. The launch date isn’t yet specified, but will be soon. (Autocar)
• Swedish start-up Uniti will unveil their prototype all-electric city car on 7^th The company says that the vehicle can be produced with a fully automated process. The company aims for deliveries to begin in 2017. (Autocar)
• Lucid announced that it had moved into snazzy new headquarters in California. (Lucid)
• The German government has proposed to subsidise up to 80% of the additional cost of electric buses to encourage uptake. Critics said that the proposed funding was only sufficient for around 400 vehicles. (Golem)
• The US Department of Energy published a study of electrical charging infrastructure now and in the future. In addition to creating some studies for future growth it includes some detailed statistics on current operators. (DoE)
• China will rollout green licence plates nationally, following a trial in three states. The plates are intended to help cities differentiate between electrically and conventionally powered vehicles more easily and owners of vehicles already on the road can apply to swap their plates for the new version. (EV Obsession)
• According to leaked internal emails, Faraday Future is close to obtaining investment but employees haven’t been turning up for work. (The Verge)
• Ionity, the charging network JV between BMW, Daimler, Ford and VW, said it had partners for about half the 400 sites it is planning in Europe. Shell will be the partner for 80 stations in 10 countries. (Inside EVs)

Connectivity

• Denso and NEC announced a JV to developed information and communications equipment for connected vehicles. (Press Release)
• HERE said it was buying over the air technology developer ATS to improve its capability. (TechCrunch)
• TomTom has created the Open-LR association with two other partners to create a royalty-free location reference standard. (Telematics News)
• Hyundai is teaming up with Smartcar to enable new services in connected vehicles. Amongst other things, 3^rd party service operators will be able to locate and access the vehicle (with the owner’s permission). It will also be possible to use the vehicle in peer-to-peer carsharing. (Hyundai)
• White label connected vehicle platform company Mojio said it had raised $23 million in new funding. (Geek Wire)

Other

• Mapping company Mapbox acquired Fitness AR, in part to use the company’s augmented reality technology for super-imposing various kinds of information onto maps. (TechCrunch)
• 3D Laser Mapping said it would give free access to selected lidar mapping data collected by vehicles. (3D Laser Mapping)
• Elf showed off their covered e-tricycle. It can be pedalled or, on battery power alone, it has a 45 mile range and a top speed of 30mph. Given the $7,000 list price, it isn’t clear that this is a convincing alternative to a car. (Futurism)
• Airbus, Rolls-Royce and Siemens announced a project to test electric engines on a passenger aircraft. The current design still uses a jet-fuel powered generator to create the electricity. (Futurism)
• Amazon have patented a drone that tries to blow itself to smithereens in the event of a technical failure, rather than crashing into the ground as one big lump. (The Verge)
• Chinese on-demand logistics providers Yumanman and Houochbang are merging, but will retain separate brand identities. (China Money Network)
• Zagster showed off their new PACE bike which has an integrated lock that can be used with conventional bike stands rather than bespoke docking stations. The company says this helps cities create bike sharing schemes without having to install expensive infrastructure or suffer dockless bikes strewn about the pavement. (Curbed)