Auto Industry Briefing — week ending 24th March 2019
Daimler needs to be Smarter; Ford’s new broom; and fewer powertrains could encourage sharing. Please enjoy our auto industry and mobility briefing for 18th March to 24th March 2019. A PDF version can be found here.
Before you read the detail, what were my favourite stories of the past week…?
- Look Down — Daimler’s Smart brand could be for the chop, if insiders are to be believed. Although it has been a money pit, the curious thing is that it seems to make a product sitting squarely in most people’s version of the future: small, all-electric city cars. Is the problem anything more than Daimler need to learn how to do better at being cheap and cheerful?
- Send My Love (To Your New Lover) — Ford’s new CFO is an automotive outsider from Snap. Since the incumbent has spent many years carefully promoting an unusually high number of potential in-house successors (five, one of whom recently left), is this an outright rejection of Ford’s finance team by the CEO?
- Drop It Like It’s Hot — BMW will sell 50% fewer powertrain combinations in 2021 than 2018. Setting targets is one thing, delivering is another but the plan seems right. Much of the powertrain complexity is driven by sales teams seeking a product staircase that walks up in 25 ps increments, rather than real customer need. Once OEMs have rationalised their powertrain line-ups, will they get better at sharing?
News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.
Find our archive here.
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News about the major automakers
- Released the 2018 annual report, saying conditions in 2019 would be challenging, with product cost, exchange, higher expenditure on R&D and capex for electric vehicles and manufacturing costs all adversely affecting profits. (BMW)
- Published the 2018 sustainability report. (BMW)
- Aims to remove 50% of powertrain combinations by 2021. (BMW)
- Daimler sources suggested that the Smart brand could come under intense scrutiny from new CEO Källenius once he gets his feet under the table. (Handelsblatt)
- Reportedly looking into building a bigger stake in Chinese joint venture partner BAIC. (Reuters)
- Wants to develop in-car games for passengers. Daimler appears to believe that gaming offerings from phones, tablets and consoles cannot fully leverage the experience of sitting in a car, and a bespoke solution could do better. (Daimler)
- Announced
Tim Stone as CFO, an external hire from Snap (and Amazon before that), plus
some other executive changes. Ford will unravel the strategy from earlier in
the decade to have more discrete market management by announcing that all markets
except the Americas, Europe and China will be consolidated into an “international”
group. The COO of North America becomes President of Europe, with the incumbent
becoming chairman, a set up Ford last used in the early 2000s. (Ford)
- Significance: Hiring in a CFO suggests that Hackett has lost confidence in the finance function at Ford, especially since Ford had promoted an unusually large number of finance executives (five versus two normally) to the tier below CFO ahead of Shanks’s anticipated retirement. Rowley’s new role heading Ford of Europe looks like a hedge to keep him on board in case Stone’s appointment doesn’t work out.
- Made a series of production allocations for North American plants. Flat Rock will produce a new electric car (not the Mach 1 SUV); there will be a new facility retrofitting autonomous technology to newly built vehicles (probably at low volume given the investment levels); and Transit Connect production for North America will be sourced to Cuautitlan in Mexico. (Ford)
- Increasing capacity of large SUVs by 20% after the summer shutdown, revealing that the average transaction price of an Expedition is now $62,700. (Ford)
Geely (includes Volvo) (history)
- Volvo’s CEO says 20% – 25% of the brands sales will be PHEVs by the end of 2019. (Automotive News)
- Margins on electric cars will match those on internal combustion engine products by 2025 according to Volvo’s CEO, with the caveat that both vehicle types may make less money than today. (Reuters)
- Volvo will start to install driver monitoring cameras in the early 2020s, aimed at reducing accidents from drink driving and distraction. (Volvo)
- Geely reported financial figures for 2018. Revenue of 106.6 billion RMB (about $16 billion) was up 15% on 2017, despite unit sales increasing 20%. Net profit of 10.63 billion RMB (about $1.6 billion) rose 18%. (Geely)
- Building a new all-electric vehicle based on the Bolt at the Orion Township, USA plant. GM says the product was originally planned to be made outside the USA. (GM)
- Investing $2.7 billion in two Brazilian plants. Local politicians said that the factories would have otherwise closed. GM stressed that the products were not slated for export to the US. (Detroit News)
- CEO Barra said GM was following Lyft’s IPO with great interest. (CNBC)
- Cadillac is moving to output-based badging, following in the footsteps of Audi. (Detroit Free Press)
- Hyundai and Kia will invest $300 million in ride hailing service Ola. (Hyundai)
- Kia will launch a Ceed crossover, but won’t say what it will be called until later in 2019. (Kia)
- Kia broke ground on an expanded UK distribution centre, which will have room for an additional 8,000 vehicles when completed — great for dealing with any post-Brexit inventory troubles. (Kia)
Nissan (includes Mitsubishi) (history)
- Denied reports that internal mid-term Nissan targets for Chinese market sales were downgraded by 8%. (Reuters)
PSA (includes Opel/Vauxhall) (history) s
- Board member Robert Peugeot said that the integration of Opel and Vauxhall had gone much better than expected and that the Peugeot family’s investment vehicle would support further M&A if opportunities arose — maybe even by investing further capital. He also appeared to explicitly acknowledge FCA and JLR as takeover targets. (Les Echos)
- Unions agreed terms for the transfer of 2,000 Opel R&D employees to Segula. Through the deal, Opel will be able to resume voluntary layoffs at Rüsselsheim. (PSA)
- New chairman Senard said that decision making speed in the Renault-Nissan-Mitsubishi’s alliance needed to improve, whilst boosting autonomy for executives at each company. He also said no one was working on changing the alliance’s shareholding structure. (Reuters)
Suzuki
- Toyota and Suzuki announced a series of actions to share vehicles and components to one another. Toyota will supply European-built cars to Suzuki, and make Suzuki-designed engines. Suzuki will sell Toyota several India-built models that will be re-badged for African markets while Toyota will make Vitaras in India. (Toyota)
- JLR won a Chinese court battle to stop JMC’s Landwind brand producing the X7, a vehicle mightily similar in size, form and detailing to the Evoque. (The Guardian)
- Removed the bottom end Model S, further separating the car from Model 3. (Business Insider) The mid-range Model 3 has also been abandoned. (Green Car Reports)
- Launched a new referral program with substantially lower value rewards. (Tesla)
- The SEC said that CEO Musk had not sought approval for a single tweet made since his agreement to do so in return for being let off more serious penalties following his “funding secured” debacle. (Reuters)
- Filed lawsuits against ex-employees working at Zoox and XPENG, alleging they stole Tesla’s know-how. (The Verge)
- CEO Musk declared deliveries to be the primary responsibility of all employees for the remainder of Q1. (Reuters)
- Revised the maintenance policy to replace annual checks with a looser “as required” scheme. (Tesla). As of 25th March, Tesla had not made the change in all markets (see UK example)
- Will replace the GT86, once again partnering with Subaru. (Autocar)
- Toyota
and Suzuki announced a series of actions to share vehicles and components to
one another. Toyota will supply European-built cars to Suzuki, and make
Suzuki-designed engines. Suzuki will sell Toyota several India-built models
that will be re-badged for African markets while Toyota will make Vitaras in
India. (Toyota)
- Significance: Since the RAV4 isn’t currently built in Europe (apart from Russia), the announcement could be a clue about the future of the former Toyota-PSA JV plant.
- Porsche’s
CEO floated the idea of using subscriptions for limited edition cars to prevent
speculation. (Autocar)
- Significance: Since the increase in value stems in part from the limited supply, if controlling pricing is the only objective, Porsche could always just make more…?
- Bugatti is rumoured to be planning a new all-electric saloon, potentially to be called Royale, that would be based on Porsche Taycan underpinnings. (CAR)
- VW Bank wants to save €850 million per year by 2025 and plans to cut around 800 of the 7,000 staff by 2025 to help achieve it. (Handelsblatt)
- Škoda’s CEO confirmed two MEB-based electric cars to launch by 2022, with a low-cost model planned to come after that. (Autocar) Despite resistance from German unions, he continues to plan for a new Eastern European production site to expand capacity. (Autocar)
- Forming a new company called MOS, to sell connected car services in China in partnership with FAW. (VW)
- VW internal analysis reportedly shows that producing battery cells in Germany would increase costs by 20% compared to other options. (Handelsblatt)
- Porsche will end the night shift at the Leipzig plant after the summer shutdown, but says only temporary workers will be affected. (Manager Magazin)
- Porsche launched an (expensive looking) set of new dealer standards. (Porsche)
- After a ship carrying four limited edition Porsche 911 GT2 RSs sank, Porsche will restart production of the cars to ensure their owners weren’t thwarted by acts of God. (The Drive)
- Škoda said that pay increases at 2018 levels would not be affordable in 2019. (Reuters)
- The Porsche / Piëch family investment vehicle raised its voting stake in VW Group from 52.2% to 53.1%. (Reuters)
- Porsche unveiled a “coupe” version of the Cayenne. (Porsche)
- Comments by Porsche executives about the next generation Cayenne indicate that it could be the brand’s first mixed powertrain vehicle, with both internal combustion engine and battery electric derivatives. (Autocar)
- VW launched a battery consortium with Northvolt. (VW)
- Although VW continues to look for a new Eastern European factory, it won’t be in Ukraine. (Kyiv Post)
Other
- Evelozcity changed its name to Canoo and announced that vehicles will only be available via subscription. (Canoo) Having already said that it plans to use contract manufacturing, Canoo reportedly signed a letter of intent for Magna to manufacture the firm’s US market vehicles at a new plant. (Automotive News)
- Borgward seems to have found a new parent, in the form of UCAR a Chinese taxi service, and part-owner of XPENG, who paid $610 million for 67% of the firm. (Deal Street Asia)
- Evergrande, sometime NEVS and Faraday Future investor, says it will soon launch electric vehicles and wants to be the world leader within three to five years. (Bloomberg)
- Workhorse reported Q4 2018 financial results. There was a $(17.7) million loss on $21,000 of revenue. (Workhorse)
- Faraday Future signed a joint venture with mobile phone
company The9 which will see Faraday
receive a $600 million cash injection. The press release implies that it will
be The9, rather than Faraday, that leads the marketing for the first
mass-market product, dubbed the V9. (Faraday)
- Significance: Although $600 million is a lot of money, it would be something of a world first if Faraday Future could get a 300,000 unit production facility for electric cars up and running on this budget. Although the figure seems reasonable in the context of traditional programs, all electric vehicles are proving considerably more costly (e.g. Tesla Model 3).
News about other companies and trends
Economic / Political News
- A French parliamentary report suggested that changing over from internal combustions engines to electrification could cost €500 billion by 2040 – assuming the state continued generous subsidies; paid for charging stations to be built and failed to recover lost fuel duty. (Les Echos)
- US President Trump told UAW members that their leadership should support him more and the dues they are paying have been set too high. (Detroit Free Press)
- Mexico and Brazil concluded a free trade agreement for light vehicles. (Economic Times of India)
Suppliers
- Aluminium producer Hydro suffered a cyber-attack, forcing some factories to close whilst others had to run under manual control. (Reuters)
- Schaeffler started consultations with German unions over plans to close four plants. (Handelsblatt)
- ZF acquired a 60% share in automated pod maker 2getthere. (ZF)
- BorgWarner appointed a new CFO. (BorgWarner)
Dealers
- Driverbase launched a service that will collect driving data from customers and then recommend the best car for them. It is unclear whether badge snobbery by your friends make will be part of the data set used. (Driverbase)
- Singaporean peer-to-peer used car website Carro raised $90 million. (Deal Street Asia)
- Indonesian online new car sales website Mobilkamu raised an undisclosed amount in Series A and claims to sell 150 cars per month, four years after founding. (Deal Street Asia)
Ride-Hailing, Car Sharing & Rental (history)
- Goodyear is running a trial providing mobile servicing to a fleet of cars run by Envoy. (Goodyear)
- Lyft’s IPO roadshow is apparently going very well. (Reuters)
- Multi-modal app UbiGo has been acquired by Via ID. (Fleet Europe)
- South African firm FlexClub, which matches ride hailing drivers with investors who are willing to provide cars in return for a percentage of the takings, raised $1.2 million. (TechCrunch)
- A consortium of Chinese carmakers (Changan, FAW, Dongfeng) and internet firms (Alibaba, Tencent) will spend $1.5 billion setting up a ride hailing venture. (Reuters)
- Hyundai and Kia will invest $300 million in ride hailing service Ola. (Hyundai)
Driverless / Autonomy (history)
- Denso joined a consortium that is trying to work out how to check if autonomous cars smell. The high-tech effort begs the question of how taxi drivers suffering from Anosmia overcome this problem today. (Denso)
- Lidar developer Lumotive came out of stealth mode, claiming a 200m range for its solid state lidar. (IEE Spectrum)
- ZF acquired a 60% share in automated pod maker 2getthere. (ZF)
- Millions of Americans developed a newfound interest in autonomous cars after hearing President Trump doesn’t trust computers to drive the car and believes that no one has thought to install a kill switch. (Futurism)
- Waymo opened a new depot in Phoenix, leading to speculation that it could now service more than double the current fleet size. (TechCrunch)
- Russian internet company Yandex enlisted Hyundai Mobis to bolster its self-driving car efforts. (Hyundai Mobis)
- Lidar developer TriLumina announced a distribution agreement with Nagase. (TriLumina)
- A European effort to develop a high-accuracy vehicle positioning system using Galileo (Europe’s answer to GPS) said that so far it can provide position to within 0.3m – 0.5m, insufficient for autonomous cars. (ESCAPE)
- Lidar developer Ouster raised $60 million. (Venture Beat)
- BMW, Daimler and VW have reportedly agreed to pursue a single strategy for electric vehicles that will enable the German industry association, the VDA, to lobby effectively. (Handelsblatt)
- VW internal analysis reportedly shows that producing battery cells in Germany would increase costs by 20% compared to other options. (Handelsblatt)
- Oslo will install wireless charging at taxi ranks in a bid to encourage take-up of an all-electric fleet by 2023. (Reuters)
Connectivity
- VW and FAW are forming a new company called MOS, to sell connected car services in China. (VW)
Other
- Indonesian cargo scheduling start-up Kargo raised $7.6 million. (TechCrunch)
- Flight hailing firm Blade has started operations in California. (TechCrunch)
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Auto Industry Briefing — week ending 17th March 2019
European CO2 targets thin the herd; the no-deal Brexit tariff plan; and BMW and Daimler might put E-FIRST. Please enjoy our auto industry and mobility briefing for 11th March to 17th March 2019. A PDF version can be found here.
Before you read the detail, what were my favourite stories of the past week…?
- Another One Bites The Dust — Nissan are pulling the Infiniti brand out of Europe because of the cost required to meet CO2 targets from 2020 onwards. As Infiniti were at pains to point out, it isn’t that they don’t know how to make low emission cars, they just don’t think customers will pay. Prepare for plenty more sub-brand and nameplate losses ahead of 2021 as underperforming products are dropped so companies can put their best foot forward.
- Taxman — The UK Government released provisional import tariffs in the event of a no-deal Brexit (which Parliament is trying to avoid). Although the public were told virtually all tariffs would be nil, it was grim news for car importers (read: VW, Ford, Daimler, Renault) who will face tariffs of 10% – 22% (mostly the lower end of the range) whilst those building locally can import parts with zero duty. OEMs reacted with outrage, but will they revisit their maths now they have seen the plan?
- Natural — BMW and Daimler are reportedly in discussions to share a platform for new mid-sized vehicles. So far, so sensible. What caught my eye was a reference to an “electric first” philosophy, implying a vehicle that wasn’t exclusively electric. Could it be that the Evercore ISI / Ad Punctum E-FIRST research paper has caught the imagination?
News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.
Find our archive here.
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News about the major automakers
- Released summary financial results for 2018. Automotive revenues of €97.5 billion was (0.8)% lower than 2017 despite a 1.1% increase in unit sales. Automotive EBIT of $6.2 billion was down (21.6)% down versus the prior year, part of the explanation was capital expenditures rising from 4.8% of revenue to 5.2%. (BMW)
- BMW and Daimler are rumoured to be in
talks to share platforms for small and mid-size vehicles, believing that each
could save around €1 billion per year by pooling efforts. The sources talk of
an “electric first” approach, indicating that it may not be for purely electric
products. (Reuters)
- Significance: The actual nomenclature quoted in the article is “electric first”, could this be a veiled reference to the Evercore ISI / Ad Punctum E-FIRST research piece from Q4 2018, or are we drinking our own Kool-Aid?
- CEO Kruger says that although BMW will continue to recruit, net hiring will be zero. (Handelsblatt)
- Started production of the refreshed 7 Series. (BMW)
- Announced a mini-restructuring of senior executives that will eliminate one of the sales roles. (BMW)
- Mercedes’s performance sub-brand AMG will have plug-in versions of all products, ruling out 48V mild hybirds because emissions savings are too small. (Autocar)
- BMW and Daimler are rumoured to be in talks to share platforms for small and mid-size vehicles, believing that each could save around €1 billion per year by pooling efforts. The sources talk of an “electric first” approach, indicating that it may not be for purely electric products. (Reuters)
- More than 50% of Fiat 500s sold in 2018 had a retail price in the €22,000 – €24,000 range. (Top Gear)
- Recalling around 48,000 vehicles to fix problems with the steering. (FCA)
- Recalling 862,820 US gasoline-powered vehicles that do not meet emissions regulations. (Reuters)
- Agreed a new four-year contract with Italian unions. (FCA)
Ferrari
- Agreed a new four-year contract with Italian unions. (Ferrari)
- Chairman Bill Ford expressed confidence in CEO Hackett, praising his ability to see the near and far term pictures. He also said that Ford is looking at options to secure reliable supplies of lithium. (Reuters)
- Confirmed plans to cut 5,000 jobs in Germany and an unspecified number in the UK. Voluntary redundancy schemes are already open in both countries and this includes the Saarlouis shift reduction previously announced. (Ford)
- Changan executives expressed confidence that new models will recover the market position of Ford’s Chinese passenger car joint venture. (Bloomberg)
- Spoke out against the UK Government’s proposal for no deal tariffs that would see finished vehicles subject to rates of 10% – 22% of wholesale price. Ford said it risked paying tariffs on UK built engines twice. More likely, it is concerned about the potentially far higher bill for importing every vehicle sold in one of the company’s largest markets globally. (Detroit News)
- CEO Hackett saw an increase in pay for 2018 versus 2017, partly reflecting a full year of CEO duties. Reporters took a dim view of the bump in salary, especially because it came at the same time as news of further job cuts. (FT)
Geely (includes Volvo) (history)
- Volvo
restructured the leadership group, aiming to draw a distinction between traditional
car making (e.g. factory builds and then franchise dealer retails) and emerging
trends (e.g. factory sells or leases directly to the consumer. The CEO of
Polestar will also no longer report to Volvo’s management. (Volvo)
- Significance: separating the direct to consumer group from the rest of the business appears to be an attempt to give plausible deniability to dealer-facing personnel about their control over new consumer trends whilst the new function gets on with trampling over long-held norms, for instance with all inclusive leasing.
- Volvo will pay a dividend of about $300 million to shareholders (mainly Geely). (Volvo)
- Lotus‘s recently appointed CEO is working on an expanded line-up for the future but will start with a new sportscar built on the existing architectures. He thinks Geely is prepared to invest billions in the right business plan. (FT)
- Polestar’s US pricing already takes into account potential US import tariff increases, so the launch plan will be unaffected — perhaps they could get cheaper. (Polestar)
- Aiming to double headcount at the Cruise self-driving division, to around 2,000 by the end of 2019. (Reuters)
- Showed off some details of the new platform that underpins the forthcoming Hyundai Sonata and others. (Hyundai)
- The demands of an activist fund met resistance from South Korean institutional shareholders. (Reuters)
Mazda
- Announced a series of management changes affecting the leadership of North America (Mazda) and Europe. (Mazda)
Nissan (includes Mitsubishi) (history)
- Nissan announced a number of senior executive moves effective 1st April. (Nissan)
- The Infiniti brand will no longer be sold in Western Europe after 2020 and production of vehicles in Sunderland will also cease as the company focuses on electric vehicles in China and North America. The cost of investing in technology to meet EU CO2 regulations for 2020 and beyond was a key reason for the move. (The Guardian)
- Mitsubishi announced a series of executive moves effective 1st April, including a new COO. (Mitsubishi)
- Nissan and Mitsubishi launched four new kei cars (two each). (Mitsubishi)
- Nissan is testing invisible-to-visible (I2V) technology that the company claims can create 3D images of objects, people or even cartoon characters in a vehicle cabin. (Nissan)
- Renault, Nissan and Mitsubishi published an MoU for their new governance structure. Although the existing joint operating companies will not be dissolved, they will become vassals of a new supreme council made up of CEOs from each OEM, plus Renault’s chairman. As part of the deal, Renault appear to have accepted a demotion: Renault’s chairman will be a “natural candidate” to become vice chairman of Nissan. (Nissan)
PSA (includes Opel/Vauxhall) (history)
- The Opel brand will return to Russia with a three vehicle line-up. The Grandland X SUV will be imported from Germany and the Vivaro and Zafira Life will be locally produced. An initial dealer body of 15 – 20 locations with a medium term plan to reach around 50 suggests either limited ambitions or high per-dealer expectations. (PSA)
- Appointed a new sales and marketing boss, Renault exile Thierry Koskas. (PSA)
- Iranian ministers said that a “mechanism” had been found to allow Renault to reenter the country without falling foul of US sanctions. Renault didn’t comment. (Radio Farda)
- Renault, Nissan and Mitsubishi published an MoU for their new governance structure. Although the existing joint operating companies will not be dissolved, they will become vassals of a new supreme council made up of CEOs from each OEM, plus Renault’s chairman. As part of the deal, Renault appear to have accepted a demotion: Renault’s chairman will be a “natural candidate” to become vice chairman of Nissan. (Nissan)
- JLR will recall 44,000 cars in the UK that emit more CO2 than they are should. (BBC)
- Postponed a planned £500 million investment in a new R&D campus for JLR. (Solihull Observer)
- Unveiled the Model Y, an SUV based on the Model 3 (vloggers struggled to differentiate the cabins of the two models). Tesla says the starting price will be $39,000 from 2021 onwards but more expensive versions will be available in 2020. Unlike the Model 3, the car will have a 7-seat option. (Tesla)
- CEO Musk forecast that Model Y would outsell Models S, X and 3 combined . (Tesla)
- Markets gave the Model Y unveil a lukewarm response, with some analysts suggesting it was a smokescreen to distract from ongoing problems with achieving profit and sales targets from existing products. (Reuters)
- The release of the $35,000 Model 3 has seen waiting times lengthen — but only to around two months. (Electrek)
- Leaked
emails suggest CEO Musk can create bureaucratic slowdown with the best of them
by revealing that all new hiring requests must be signed off by him personally.
(Business
Insider)
- Significance: In Ad Punctum’s experience, this type of move has an impact for a few weeks before the pace of requests overwhelms the affected executive and they resort to signing off requests in bulk via a pre-prepared spreadsheet that allows them to randomly refuse a subset of requests in order to satisfy their inner desire for control.
- Announced an additional $789 million of investments in US plants. (Toyota)
- Invested in connectivity company Airbiquity. (Airbiquity)
- Patented a system that uses the in-car fragrance function to blow tear gas in the face of would-be thieves. (CNET)
- Toyota employees in Japan received a smaller pay rise than they hoped. (Reuters)
- Toyota and SoftBank are reportedly considering a $1 billion investment in Uber’s self-driving unit that could value it at up to $10 billion. (Reuters)
- Developing a fuel cell powered lunar rover with the Japanese space agency. (Toyota)
- VW upped the planned number of electric vehicles to around 70 by 2028 from a previous plan of 50 by 2025. Cumulative sales targets will rise from 15 million to 22 million units (about 3 million in 2025). By 2030, the Group forecasts that 40% of sales will be electric models. (VW)
- VW now sees PHEV and BEV as more cost efficient for reducing CO2 emissions than improving technology on engines [slide 5]. The firm also appears to be redistributing compliance costs and benefits across vehicle lines to better reflect “real” profits [slide 6]. VW expects costs of battery electric vehicles and those with internal combustion engines to meet before 2025. (VW)
- VW believe that cost parity (customer view) between internal combustion engines and battery electric vehicles will only be achieved through including ownership costs. The firm is therefore exploring all-inclusive packages that ensure the customer realises the benefits. VW will put more effort into used car sales too — having woken up to the dominance of retail customers in that market. (VW)
- Reportedly considering leaving the German trade association, the VDA, over differences in strategy. (FAZ)
- CFO Witter said the Group was failing to fully leverage the available synergies between different brands, mainly because it allowed too much independence when there was no financial benefit. (Handelsblatt)
- Thinks that the Chinese market for electric vehicles will be 80% BEV and 20% PHEV by 2025. By then, VW hopes to have 40 products on sale, with annual volumes of 1.5 million units. (VW)
- Lamborghini sold 5,750 units in 2018 and “evidenced” how it could be profitable. (VW)
- Audi increased the 2025 target for all-electric and plug-in hybrid vehicles from “more than 20” to “about 30”. The brand also wants to share more with the rest of the VW Group, particularly Porsche. (VW)
- CEO Diess found himself in hot water after saying that “[high] EBIT sets you free”, seemingly echoing the phrase used on the gates at Auschwitz. He apologised and said the similarity was unintentional. (Handelsblatt)
- CEO Diess denied rumours that VW Group was interested in taking a stake in Waymo. (Reuters) He believes that 90% of future innovation will come from software — without explaining how that is measured (software will apparently account for 50% of development costs in the 2030s). The next generation VW Golf will consolidate the 70 processors in today’s car into three units. (Reuters)
- Recruiting 1,200 drivers for the fleet of 500 Moia vehicles in Hamburg, paying around €12 per hour. (Handelsblatt)
- Will not proceed with the IPO of truck division Traton, citing market conditions. (VW)
- The US SEC is seeking to sue former CEO Winterkorn over the diesel scandal. VW will help defend him. (Reuters)
- Gave an overview of the production planning system used by Volkswagen to schedule smooth production. The downside is that with a four week planning horizon is needed. Build to order advocates look away now. (VW)
- A glowing profile of Porsche boss Oliver Blume, suggested he is being backed as the next CEO of VW Group when Diess’s tenure expires. (Handelsblatt)
- Porsche says that electric cars have €6,000 – €10,000 higher material cost than comparable conventionally powered cars. (Porsche)
- Will cut 7,000 jobs to save money and because VW believes that electric vehicles have 30% lower labour hours per units than conventionally powered cars. (Reuters)
Other
- Sono Motors unveiled the production version of the Sion, a plug-in hybrid that uses onboard solar panels to charge the battery. The 248 cells that cover the vehicle generate a peak 1.2 kW, which Sono says equates to 34 km of additional range per day. The firm shows over 9,500 pre-orders. (Sono)
- Ineos will use BMW-sourced engines for the Projekt Grenadier SUV. (Ineos)
- WM Motor raised $446 million. (China Money Network)
- Fisker released a teaser image of its entry level electric car and said the real thing will be on show soon. (CNET)
News about other companies and trends
Economic / Political News
- European passenger car sales in February of 1,148,775 units were down (0.9)% on a year earlier. (ACEA)
- Egyptian car sales continued to fall, despite the removal of tariffs on EU-built vehicles. (Economic Times of India)
- European parliamentarians are considering mandating speed limiters on new cars. (MEN)
- The UK Government published the intended import tariff regime in the
event of a no-deal Brexit. Although the headline was that tariffs would drop to
zero, this wasn’t true for the automotive industry. Finished vehicle tariffs would
apply at the 10% – 22% level that non-EU products are currently subject to, but
parts imports would be set to zero. The Government cautioned that the measures
would only be temporary, for about a year. The
UK car industry trade body went nuts. The EU said they would be illegal
under WTO rules. (UK
Government)
- Significance: The tariff schedule, whilst positioned as a temporary measure, confirms the worst fears of the market leaders, who just happen to be pure importers (e.g. VW, Ford, Renault). Not only would finished vehicles see large tariffs, but UK-built vehicles would have zero tariffs on imported parts, handing a 10%+ price advantage over imported products. If the tariff schedule became permanent, it would considerably strengthen the case for knock-down kit production in the UK.
Suppliers
- ZF’s CEO says that transition to electric cars will take more than 20 years. (Handelsblatt)
- Mahindra CIE Automotive acquired Aurangabad Electricals in a $119 million deal. (Live Mint)
- Faurecia and Michelin will merge their fuel cell divisions under the banner of Symbio. (Michelin)
- Hyundai Mobis is investing $5 million in Chinese object recognition company Deep Glint. (Hyundai)
- Denso invested in connectivity company Airbiquity. (Airbiquity)
- Continental announced a series of changes aimed at supporting the newly created automotive group. (Continental)
- Lear invested in a fund to be managed by Maniv Mobility. (Lear)
Ride-Hailing, Car Sharing & Rental (history)
- Lyft has started pre-IPO investor roadshows, apparently aiming for a valuation north of $20 billion. (Reuters)
- After recently closing a $20 million round, car sharing firm Drivezy wants $100 million more. (Deal Street Asia)
- Meshek is creating a car sharing scheme for rural areas in Israel. (CTech)
Driverless / Autonomy (history)
- Google is reportedly offering outside investors a stake in Waymo, with the twin aims of raising cash and justifying a dizzying valuation for the self-driving vehicle developer. (The Information)
- Uber apparently hoped to have 13,000 robotaxis in service by 2019, growing to a fleet of 75,000 in 13 different cities by 2022. The targets appear to have been motivated by desperation to provide a path to profitability, rather than because of promising test results. (FreightWaves)
- CEO Diess denied rumours that VW Group was interested in taking a stake in Waymo. (Reuters)
- Toyota and SoftBank are reportedly considering a $1 billion investment in Uber’s self-driving unit that could value it at up to $10 billion. (Reuters)
- GM is aiming to double headcount at the Cruise self-driving division, to around 2,000 by the end of 2019. (Reuters)
- Sono Motors unveiled the production version of the Sion, a plug-in hybrid that uses onboard solar panels to charge the battery. The 248 cells that cover the vehicle generate a peak 1.2 kW, which Sono says equates to 34 km of additional range per day. (Sono)
- Ford is looking at options to secure reliable supplies of lithium. (Reuters)
- Porsche says that electric cars have €6,000 – €10,000 higher material cost than comparable conventionally powered cars. (Porsche)
Connectivity
- The next generation VW Golf will consolidate the 70 processors in today’s car into three units. (Reuters)
- Airbiquity raised $15 million from Toyota and Denso. (Airbiquity)
- Nissan is testing invisible-to-visible (I2V) technology that the company claims can create 3D images of objects, people or even cartoon characters in a vehicle cabin. (Nissan)
Other
- Flight hailing firm Blackbird raised $10 million. (TechCrunch)
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Auto Industry Briefing — week ending 10th March 2019
Cheap cars with batteries that get bigger; electrification’s missing link; and what is going on at Tesla? Please enjoy our auto industry and mobility briefing for 4th March to 10th March 2019. A PDF version can be found here.
Before you read the detail, what were my favourite stories of the past week…?
- Rebel Yell — Fiat unveiled the Centoventi concept, previewing the next-generation Panda. Among a host of neat ideas was one we have been crying out for: modular batteries. The idea is that the car is sold with only a basic, short range pack. So far so cheap and restrictive. But then, additional modules can be rented (or purchased) to create a longer range as required. There are practical problems to do with pricing and sorting out enough locations where you pick up and drop off the batteries that the scheme is convenient, but that shouldn’t stand in the way of someone giving it a go.
- Turning Japanese — Nissan plans to launch a range of ePower-badged series hybrids (motor as generator) cars in Europe. As our research with Evercore ISI in late 2018 concluded, we believe that this type of powertrain will greatly help the transition to fully electric vehicles. Put simply, customers get the driving experience of an electric car but the cost of an internal combustion engine (plus a bit). What’s not to like?
- The Hokey Cokey — Last week Tesla announced the death of the dealership and a price reduction, this week stores get a reprieve and prices are going up. Deciding to go online only was a MASSIVE bet, one that should only have been made after very careful consideration. A rapid about turn (surely the right move) suggests the original analysis was underwhelming or (worse still) based on gut feel. Is this a unique and terrible mistake or has Tesla lost the plot when it comes to strategic rationale?
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
- Is prepared to move some engine production from Hams Hall, UK to Steyr, Austria in the event of an unfavourable Brexit. (The Guardian)
- The Nedcar plant could be preparing for incremental (post-Brexit) Mini production after purchasing 38 hectares for site expansion. (Dutch News)
- Reportedly working on an €800 million deal to buy Audi out of a shareholding in the Bayern Munich football club and then take on the role of sponsor. (Manager Magazin)
- Incoming CEO Kaellenius is open to sharing battery cell design with other companies if it suited Daimler’s vehicles and was cost effective. (Reuters)
- Unveiled an all-electric V-Class people mover with a 100 kWh battery. (Daimler)
- Unveiled
the Centoventi, all-electric city car concept at Geneva. Fiat says that in
order to keep prices low, the car will have a modular battery pack. Buyers can
opt for a cheaper, small, battery and then rent larger units for a limited time
when they really need the range. Another idea previewed by the concept is for
customers to choose the colour by wrapping the car after it leaves the factory
— vastly reducing plant complexity. Design cues in the car suggest it is
destined to be the next generation Panda. (FCA)
- Significance: Making a larger battery pack available for a short time — provided supply is freely available and reasonably priced — looks like a very sensible solution to overcoming the cost issues that battery electric vehicles are likely to experience for most of the next decade. If the design is sufficiently neat, there is no reason why packs could not be compatible across vehicle lines.
- CEO Manley said he is open to “any deal that would make Fiat stronger” when asked about the potential for a tie-up with PSA, but ruled out a sale of Maserati. (Detroit News)
- Revealed the Alfa Romeo Tonale C-sized plug in hybrid SUV, probably the car FCA has promised Italian unions it will build at the Pomigliano factory. Executives expect it to be the brand’s biggest seller. (FCA)
- Alfa Romeo is recalling around 60,000 cars because the adaptive cruise control might refuse to adapt. (Detroit News)
- Might not drop diesel in Europe by 2022 if consumer demand for the fuel type remains at a level where the company feared it would lose 15% or more in sales volume. (FT)
- Introduced a new nameplate for large trucks: F-600. The new model sits below the F-650 and F-750 in the line-up with a similar size to Super Duty but more powerful loading carrying capabilities. (Ford)
- Former employees at the now-defunct Chariot on-demand bus service criticised the brand’s management, although no one could explain how, even with improvement, the business would have made money. (Bloomberg)
- A profile of CEO Hackett expounded his virtues in helping the company to embrace user-centric design methodologies but failed to give many concrete examples of where this is happening beyond prototypes for autonomous vehicles. (The Atlantic)
- Mahindra’s MD says the firm will build an electric vehicle using Ford’s platform and wants Ssangyong to be included in a three way partnership. (Economic Times of India)
- The turnaround plan for the Russian business reportedly envisions closing two plants in the country and producing only commercial vehicles in future. (Reuters)
Geely (includes Volvo) (history)
- Proton’s CEO expects the brand to turn a profit in 2019. (Malaysiakini)
- Volvo might not sell Polestar electric cars in the USA if tariffs on Chinese imports are increased. (Reuters)
- Intends for 100% of European sales to be electrified vehicles by 2025, accelerating the prior plan by five years. Unlike some other competitors, Honda appears more explicit that “electrification” means full hybrid and above cars, and not electrically augmented mild hybrids where the car cannot move without the combustion engine. (Honda)
- Invested in charging network ubitricity. (ubitricity)
- Looking for partners to finance the development of a new corporate headquarters in Seoul, South Korea. (Reuters)
- Developed a smartphone-based key that lets owners share the vehicle with up to four others. Unlike many contemporaries, Hyundai’s system works using near field communication, rather than transmission to the vehicle modem. (Hyundai)
- Hyundai may cease operations at a plant in Beijing, China. The firm was keen to stress that the move would be a suspension, not full closure. (Reuters). Kia might also close a Chinese plant. (Reuters)
- Hyundai is reportedly in the final stages of talks to invest $250 million in Ola. (IB Times)
Mazda
- Took the wraps off the CX-30 crossover at the Geneva show. (Mazda)
Nissan (includes Mitsubishi) (history)
- Nissan CEO Saikawa reportedly told employees he intends to stay in role for another three years, seemingly contradicting earlier comments that he would be headed for the exist much sooner. (Bloomberg)
- Nissan said stories about a plan to reduce production of Qashqai and Leaf in Sunderland by going from three shifts to two were rumours, but didn’t issue an outright denial. (Sky News)
- Mitsubishi unveiled the Engelberg Tourer SUV and suggested that the car can be used as a back-up generator if the customer adopts the firm’s Dendo house concept for connecting the car to the home grid. Previous concepts of this nature have centred on battery electric vehicles, thus haven’t been able to explore this idea before. (Mitsubishi)
- Announced
that the e-Power range of motor-as-generator vehicles will launch in Europe by
2022. Concepts shown by Nissan at Geneva hint that the Qashqai and X-Trail will
both receive the powertrain. (Nissan)
- Significance: Nissan’s choice to launch the technology in Europe suggests (in line with the findings of Ad Punctum’s research in partnership with Evercore ISI), that motor-as-generator will be a useful part of the powertrain portfolio, providing an all-electric driving experience with a cost closer to a conventional gasoline engine.
- Renault, Nissan and Mitsubishi are discussing a new governance structure that would oversee joint projects, in a way that would not require a change to the shareholding structure. (Renautlt)
- Carlos Ghosn was granted bail but wasn’t allowed to attend a Nissan board meeting. (BBC)
PSA (includes Opel/Vauxhall) (history)
- Believes
that L4 self-driving capability would add €15,000 to the vehicle price, and a
solid L3 system will cost around €5,000. At these prices, PSA sees the likely
take-up as being in single digit percentages. (Auto
Express)
- Significance: With VW giving interviews citing a €50,000 cost for L3 capability, it seems as though nobody really knows for sure.
- Renault, Nissan and Mitsubishi are discussing a new governance structure that would oversee joint projects, in a way that would not require a change to the shareholding structure. (Renautlt)
- Workers at the Gigafactory have complained that Tesla makes them take unpaid time off when production stops due to a shortage of supplier parts. (CNBC)
- After making
price cuts and announcing a move to online only sales, Tesla abruptly
reversed course, increased prices and said it would only close some stores. (Tesla)
- Significance: Two contradictory strategic moves coming within days of each other is grounds for severe concern. Moving to online only sales was a massive bet, one that should only have come after considerable soul-searching and analysis to give confidence that the move made sense (which on the surface it did not). Whilst it is a net positive that Tesla seems to have now chosen a more sensible route, this raises red flags over the decision making process.
- The third generation of supercharger offers a 250 kW rate. Tesla will start shipping the new units in 2019 and says it can offer the “fastest production charging experience”, something that may confuse users of 350 kW stations from the likes of Porsche. (Tesla)
- German regulators told Tesla to end its practice of including estimated savings from using electricity in lieu of fuel as a method of lowering the headline price. (Reuters)
- Secured funding from Chinese lenders for the initial Shanghai factory costs. (Tesla)
- CEO Musk said that although the $35,000 Model 3 would enter production this month, it will not be widely available for some time. (Reuters)
- Investors threw a giant wobbly over news that Model 3 imports were being blocked by Chinese customs officials. Tesla said the problem was down to labelling and the World moved on. (Reuters)
- Executives said that a “bad” Brexit could result in a withdrawal from UK manufacturing, but their comments implied that this would be at the end of the new Corolla’s product cycle rather than in the immediate future. (Bloomberg)
- Recalling nearly 75,000 Audis of various types to fix problems with fuel leaks. (Detroit News)
- Porsche will increase the production capacity of the all-electric Taycan above 20,000 units per year, but won’t say by how much. (Bloomberg)
- Bentley says that battery technology needs to lead to a doubling of energy density before the brand can consider it as a suitable alternative to internal combustion engines for products like Bentayga. The brand believes that fuel cells may be the answer, but sees the technology as more than 10 years away. (Autocar)
- Although VW continues to explore potential sites for a new plant in Eastern Europe, works council representatives are reportedly unimpressed and plan to vote against the scheme. (Handelsblatt)
- Porsche is currently studying a successor to the 918 Spyder supercar and hasn’t yet decided whether it should have a hybrid or all-electric drivetrain. (Autocar)
- Bugatti unveiled a one-off “voiture noire” coach-built Chiron derivative. Bugatti says the car has been sold for £9.5 million and the project pretty much broke even. (Autocar)
- CEO Diess believes that automakers are trading at a discount because the market does not believe they can make the transition from vehicles with internal combustion engines to all-electric power and that explaining the transition plan will be critical to winning investor confidence. (CNBC)
- VW’s commercial vehicle chief said autonomous vehicles require at least five years of further research and the sensor set cost needs to fall to around €6,000 – €7,000 per car. (Reuters)
- Audi showed the Q4 e-tron all-electric SUV. (Audi)
- Audi is experimenting with installing used lithium-ion batteries from road cars into plant vehicles such as forklift trucks and tugs. The firm believes that the repurposed batteries could be more efficient than the traditional lead acid packs originally fitted. However, Audi’s description of a recycling process that includes stripping down the donor pack, testing the cells and then re-packaging into a completely different configuration serves to demonstrate that the recycling process hasn’t been fully thought-through. (Audi)
- Says that
there may be no business case for combustion engine powered city cars like the Up!
as emissions legislation in Europe will make them too expensive to produce; and
that poorer customers will suffer as a result. (Autocar)
- Significance: VW’s comments appear designed to shock politicians into reconsidering emissions limits as they imply several falsehoods: (1) that car makers only approve profitable programs; (2) that city cars are the entry-level vehicle of choice, when b-sized cars are a far larger segment.
Other
- Morgan announced that Investindustrial was taking a majority stake in the firm for an undisclosed sum. (Morgan)
- McLaren is preparing a fourth model line, positioned as a grand tourer, to be unveiled later in the year. How it will compare to rivals is unclear since the car will (unusually for the segment) have a mid-engined layout. (McLaren)
- McLaren’s CEO says that solid state batteries will likely be ready for application in vehicles between 2023 and 2025 and that the brand is thinking about a 2+2 car. (Autocar)
- Aston Martin unveiled the mid-engined “concept” Vanquish sports car, along with a new V6 engine.(Aston Martin)
- Aston Martin gave more details about the 003 supercar, philosophically a slightly bigger, slightly more practical version of the Valkyrie. The car will use a hybrid V6 engine, data from the Valkyrie suggests that the electric drive will yield an additional 150+ bhp. (Aston Martin)
- Karma heralded a big reveal of the brand’s plan and future products at the Shanghai show. (Karma)
- Mahindra sees the future in terms of three segments: shared and autonomous robo-taxis; SUVs and; luxury cars like the recently unveiled Pininfarina Battista. (Autocar)
- Mahindra’s MD says the all the brand’s electric vehicles will be conversions from models with internal combustion engines, except for a car built using Ford’s electrified platform. (Economic Times of India)
- NIO reported financial results for the full year. There was a loss of $(1.4) billion on $(720) million of revenue. Sales in January and February have also disappointed — seemingly on course to drop more than (50)% on a quarter over quarter basis. NIO will no longer commission a plant in Shanghai, saying that production from a JAC-owned plant was enough for the next two to three years. (NIO)
- Koenigsegg debuted a new supercar called the Jesko. The car features a new in-house designed transmission, an uprated engine, a claimed top speed near to 300mph and a price tag of $3 million. Koenigsegg says it will only make 125 examples — and 90 of them have already been sold. (Koenigsegg)
News about other companies and trends
Economic / Political News
- UK passenger car sales in February of 81,969 units were up 1.4% on 2018. (SMMT)
- German registrations of passenger cars for February were 268,867 units, up 2.7% on prior year. (KBA)
Suppliers
- Chipmaker Renesas will slow production at Japanese plants, primarily due to reduced demand from China. (Reuters)
- Schaeffler is looking to close or sell five European plants as part of a profit improvement plan. (Handelsblatt)
- Dana took a stake in heavy goods vehicle developer Hyliion. (Dana)
- Continental’s full year 2018 revenue was €44.4 billion, with EBIT of €4.0 billion, down (12)% on a year earlier. The firm said it still intends to meet 2019 profit goals. (Continental)
- Autoliv and TRW were fined €368 million by the EU for running a cartel that sold steering wheels, seat belts and airbags at inflated prices. (Economic Times of India)
- Michelin completed the acquisition of 88% of Indonesian tyre maker Multistrada. (Michelin)
Ride-Hailing, Car Sharing & Rental (history)
- Ride hailing firm Taxify changed its name to Bolt (because it doesn’t just offer taxis anymore). (Bolt)
- FlixBus is in talks to acquire rival Eurolines. (TechCrunch)
- Grab announced it has raised a further $1.5 billion from SoftBank to bring the Series H total to $4.5 billion. (Grab)
Driverless / Autonomy (history)
- Lidar developer Innoviz reportedly raised $100 million but wouldn’t confirm it. (Reuters)
- Uber has been found not criminally liable for the fatal accident between
a self-driving vehicle and a pedestrian in Arizona, USA. The safety driver may
still be charged. (BBC)
- Significance: It is unclear what precedent this sets, does it mean that: companies are not responsible for poorly performing safety systems, so long as there is a safety driver or; that so long as firms can show why a car acted in a certain way, they will not be held criminally liable even when there is a fatal accident? Either way, self-driving car developers will see this news as positive.
- Computer vision developer Brodmann17 raised $11 million. (TechCrunch)
- Waymo will offer its proprietary perimeter lidar sensor to selected partners. More powerful units used for longer-range vision aren’t yet available (and you can’t have one if you are building a driverless car). (Waymo)
- PSA believes that L4 self-driving capability would add €15,000 to the vehicle price, and a solid L3 system will cost around €5,000. At these prices, PSA sees the likely take-up as being in single digit percentages. (Auto Express) VW’s commercial vehicle chief says a L3 system costs €50,000 per car. (Reuters)
- Charging provider Eneco acquired Dutch rival Flow Charging. (Eneco)
- Spartan Motors showed off three all-electric commercial vehicles under the Utilimaster brand. (Spartan)
- FCA unveiled the Centoventi, all-electric city car concept at Geneva. Fiat says that in order to keep prices low, the car will have a modular battery pack. Buyers can opt for a cheaper, small, battery and then rent larger units for a limited time when they really need the range. (FCA)
- McLaren’s CEO says solid state batteries will likely be ready for use in vehicles between 2023 and 2025. (Autocar)
- Charging network ubitricity raised €20 million from investors including Honda. (ubitricity)
- Mitsubishi unveiled the Engelberg Tourer SUV and suggested that the car can be used as a back-up generator if the customer adopts the firm’s Dendo house concept for connecting the car to the home grid. Previous concepts of this nature have centred on battery electric vehicles, thus haven’t been able to explore this idea before. (Mitsubishi)
Other
- German car insurance start-up FRIDAY raised $114 million. (EU Startups)
- PAL-V says it is ready to enter production with a 90 vehicle run of the Liberty flying car. (PAL-V)
- Goodyear showed off a concept tyre for flying cars that can double as a rotor fan. The technolohy involved looks phenomenally expensive. (Goodyear)
- Harley Davidson has diversified by acquiring children’s electric bicycle maker StaCyc. (Reuters)
- Air
traffic control firm AirMap received
undisclosed investment from Temasek and Honeywell. (AirMap)
- Significance: If drone taxi firms are going to take off, they need air traffic control to be capable of handling many times the number of flights dealt with today. Companies like AirMap aim to provide the tools that could make that a reality.
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Auto Industry Briefing — week ending 3rd March 2019
Cheap electric vehicles get more wheels; selling without a storefront; and how far can the Porsche brand stretch? Please enjoy our auto industry and mobility briefing for 25th February to 3rd March 2019.
Before you read the detail, what were my favourite stories of the past week…?
- Weight Of Living — Scooter rental firm Gotcha thinks that trikes are the way forward, probably because you can sit rather than stand. It can surely only be a matter of time before someone offers a four-wheeler, perhaps citing stability benefits. If so, will these vehicles look like two scooters lashed together or could someone hit upon a design for very low-cost, yet reliable, electric vehicles along the way?
- Thrift Shop — Tesla says physical dealerships are old news and the firm is moving to online sales. Only time will tell whether the move is genius or unmitigated disaster. It certainly flies in the face of all convention to aim for industry leading volumes (half a million units per year) without using all the available tools to attract as many buyers as possible. Using Model 3 numbers to justify the move (~80% of buyers used the online portal) could be dubious — the 2018 sales came from people who signed on as depositors before launch. Will buyers unable to kick the tyres in 2020 make the same purchase decision?
- Perfect To Me — Porsche says that the next generation Macan will be all-electric. The move makes sense in the context of helping the wider VW Group with emissions targets but can the brand position itself as the true home of electrification (Taycan / Cross Turismo / Macan) and petrol-headed driving pleasure (911 / 718)?
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
- Agreed to
pool self-driving technology efforts with Daimler, but only for SAE Level 3 and
4, aiming to release technology in the mid-2020s. The parties will continue
with individual efforts on SAE Level 5 technologies, but remain open to
discussion on sharing those too. (Daimler)
- Significance: It makes sense to collaborate but the exclusion of Level 5 seems arbitrary. Given that most specialists struggle to explain a practical difference between the sensor set and AI of Level 4 and Level 5 vehicles (although differences in capability are obvious), it remains unclear how BMW and Daimler will avoid crossover with the development of the higher ability systems — unless they believe that in coming years, geo-fenced autonomy will be possible with lower order sensors, something that at present only Elon Musk is openly saying.
- Fined €8.5 million by German prosecutors for installing the wrong engine management software in about 8,000 vehicles. (Reuters)
- Invested in ride hailing firm Zūm, which has a service aimed at ferrying children around. (TechCrunch)
- Created a blockchain-based prototype sourcing ledger that can track materials across multiple stages of product creation and certify their origin. (Daimler)
- Agreed to pool self-driving technology efforts with BMW, but only for SAE Level 3 and 4, aiming to release technology in the mid-2020s. The parties will continue with individual efforts on SAE Level 5 technologies, but remain open to discussion on sharing those too. (Daimler)
- Scheduling down days at the Vitoria plant due to reduced demand for diesel vehicles. (Europa Press)
- Daimler Buses acquired a 5.25% stake in fleet management software company IVU. (Daimler)
- Announced a $4.5 billion investment (some of which had been reported previously) to revamp five plants in Michigan, USA for Jeep and pick-up products. The largest single amount — $1.5 billion — will be spent to convert the Mack Avenue engine plant to one that makes vehicles. (FCA)
Ferrari
- Released photographs of the F8 Tributo, the replacement for the 488 GTB. (Ferrari)
- Suffered unscheduled downtime at two North Ameican plants because of a strike affecting the steering wheel supplier. Ford built (but didn’t gate release) thousands of cars with temporary parts whilst trying to overcome the shortages. (Detroit Free Press)
- Rumoured to be shedding 2,000 of workers in China by not renewing temporary contracts. (Nikkei)
- Although some claimed that VW and Ford were close to a deal to team up on self-driving equipment (WSJ), others said that a deal was months away and implied that leaks were almost all from VW and unreliable. (Detroit Free Press)
- May have found a buyer for the Brazilian car plant scheduled for closure. (Reuters)
Geely (includes Volvo) (history)
- Volvo invested in ride hailing firm Zūm, which has a service aimed at ferrying children around. (Volvo)
- Published pictures of the Polestar 2, the first all electric car from the brand. The starting price for the launch edition will be €59,000 but Polestar says that after that prices should drop to €39,000. (Polestar) The brand hopes to sell over 50,000 units annually according to the CEO. (Reuters)
- Proton unveiled the new Persona B sized saloon. (Proton)
- Volvo will impose a 180 kmh (just over 110mph) speed limit on all cars. Speed demons need to make their purchase before 2020 to pick up an unregulated model. (Volvo)
- Showed off the GE11, the first vehicle from the new Geely New Energy brand. (Geely)
- The UAW union launched a lawsuit against GM asking US courts to order plants scheduled for “unallocation” to remain open. (Reuters)
- Made a series of executive changes to replace the heads of North America (GM) and manufacturing. (GM)
- Released images of the production-ready all-electric city car to be unveiled at the Geneva show. (Honda)
- Commenced production at the Itirapina, Brazil, vehicle plant. (Honda)
- Hyundai issued a medium term profit objective of 7% return on sales by 2022. The brand believes that this can be achieved despite a 58% increase in average year product spending. (Hyundai)
- Announced an executive reshuffle. (Hyundai)
- Hyundai says that it needs 14 trillion KRW (about $12.5 billion) of net cash or equivalents for working capital and to provide a sufficient buffer for unforeseen one off events. (Hyundai) This appears to be the rationale for rejecting calls from an activist shareholder to return more cash. (Reuters)
- Hyundai CEO Lee reportedly told investors that the firm is considering capacity cuts in China. (Reuters)
PSA (includes Opel/Vauxhall) (history)
- Reported financial results for the 2018 full year. Automotive revenue of €61.3 billion was up 27% year-on-year but this included the full year impact of Opel / Vauxhall. Operating profit of €4.5 billion rose 61%. PSA said Opel / Vauxhall swung from a (2.5)% loss to a 4.7% profit. PSA raised profit guidance, but as with last time, it was to a number that it is already exceeding. (PSA)
- Will launch the Peugeot brand in North America, Citroën in India and Opel will return to Russia. (PSA)
- Reportedly looking into the potential for a capital tie-up with the likes of FCA, JLR or even General Motors, in a bid to obtain enough global scale. (Bloomberg)
- CEO Tavares said that stricter EU CO2 rules could destabilise society and bemoaned the pace of decision making at the firm’s Chinese joint ventures. (Reuters)
- Reportedly exploring a sale of a partial stake in JLR to raise cash. Tata spokespeople denied it. (Bloomberg)
- Sources told the BBC that JLR was about to make a major investment in UK manufacturing. The lack of any detail suggested it was the work of PR people or politicians rather than well-informed yet loose-lipped insiders. (BBC)
- Unveiled a facelifted XE saloon (the second such update). The main focus of the redesign was the front and the interior, which now features an array of digital displays. (JLR)
- JLR’s InMotion fund participated in a further investment round for usage-based insurer ByMiles. (JLR)
- Put a $35,000 version of the Model 3 on sale, accompanied by a new $37,000 derivative with slightly more equipment that Tesla hopes customers will buy instead. (Tesla)
- Anecdotal feedback from would-be Model 3 owners says that Tesla is taking many months to process deposit returns if they decide they no longer wish to order the vehicle and that multiple follow-ups are necessary to get the company to act. Tesla wouldn’t say how long it takes on average to process refund returns. (Detroit News)
- Rebalanced the features in driver assistance (“Autopilot”) options so that the base $3,000 system capability is similar to those of other brands. Navigating highway slip roads and interchanges and remote parking are now only available by subscribing to the more expensive “full self-driving” pack. (Business Insider) After the move, Tesla offered owners a cut price deal to upgrade. (Tesla)
- Paid a $920 million bond in cash (as Tesla said it probably would). (CNBC)
- Will only
sell cars through online and telephone channels (some high traffic locations
will remain open). Tesla says the move will save about 6% of revenue and allow
it to return the saving to customers. As an enabler to the change, Tesla is creating
a seven day, 1,000 mile no hassle return program and says it will improve
mobile servicing. (Tesla)
- Significance: It remains to be seen whether Tesla’s move is genius or foolhardy. The firm is betting that customers are ready for online-only sales, whilst making sales projections that other brands can only meet by offering omni-channel experiences. Although dealers are often judged by customers to do a poor job, sales of high value items indicate only a small minority are prepared to forego face-to-face contact with salespeople at this time. Analysts speculated that the firm’s retail solar business will suffer an even greater negative impact, having failed to build a meaningful following so far.
- CEO Musk said in an internal email that 78% of Model 3 orders were made online and 82% of customers did not have any test drive as part of the justification for the move to online sales. Since the car was initially only released online and production problems meant few demonstrator vehicles were initially available, these figures may be less compelling than they seem. It is unclear what the comparable figures for Model S and X are. (Clean Technica)
- Set a 14th March date for the unveiling of the Model Y SUV. (Elon Musk)
- The SEC asked a US judge to hold CEO Musk in contempt of the earlier deal that followed incorrect statements about funds to take Tesla private after he sent erroneous tweets about 2019 production figures. (Reuters)
- Working with Carmera to produce high definition maps from vehicle camera data. (Toyota)
- Creating a French hydrogen joint venture to create a fuelling network called Hyset, intended to encourage take-up of fuel cell vehicles. This mirrors Toyota’s approach in Japan, albeit with a scheme that is smaller in scale. (Toyota)
- Will use Jetta as a standalone brand in the Chinese market, in partnership with FAW. The portfolio draws heavily on SEAT models. (Autocar)
- Announced
that the next generation Macan will be all-electric. (Porsche)
- Significance: Porsche seems to be setting itself up as a brand that gives both ecowarriors and petrolheads what they want. More broadly, the move will be highly positive for the VW Group average CO2 emissions in Europe
- Reportedly considering a smaller IPO of truck division Traton than the previously mentioned 25% stake if economic conditions deteriorate. (Reuters)
- Although some claimed that VW and Ford were close to a deal to team up on self-driving equipment (WSJ), others said that a deal was months away and implied that leaks were almost all from VW and unreliable. (Detroit Free Press)
- Announced an executive reorganisation at the VW brand aimed at giving CEO Diess more time to run the wider group. The main changes are a broader remit for the COO and a more important digital services function. (VW)
- VW and Russian partner Gaz have apparently been working on a series of nearly finalised new projects, with the intent of being able to make a fast start if US sanctions against Gaz are lifted. (Handelsblatt)
- Announced that e.Go will licence the MEB platform. (VW)
Other
- Aston Martin announced full year 2018 results. Deliveries rose 26% year-over-year to 6,441 units and revenue was up 25% to £1.1 billion. There was a PBT loss of £(68) million but Aston Martin said this was IPO costs and without it, there had been a £73 million operating profit. (Aston Martin) CEO Palmer said there is a £30 million Brexit contingency budget; much of this appears to be for extra inventory. (Reuters)
- Subaru announced a reorganization aimed at improving risk management and planning. (Subaru). There will also be a series of senior executive changes. (Subaru) At the same time, the firm is recalling 2.3 million cars to fix a problem with the brake lights. (Reuters)
- Ginetta unveiled a £400,000 supercar, aiming to make between 30 – 50 per year. The firm says there are already 14 firm orders in the bag. (Autocar)
- Piëch say the platform on which the Mark Zero sports car is based will also have a four seater and an SUV. (Piëch)
- Koenigsegg revealed that the tie-up with NEVS was less ambitious than hoped. The new higher volume product will have a production volume in the hundreds and a price tag of the best part of one million euro. (Road&Track)
- Faraday Future extended enforced unpaid leave for employees, citing continued cash problems. (The Verge)
- VinFast will soon begin a safety testing program to certify that vehicles meet European standards. (Retail News Asia)
- Electra Meccanica, makers of an all-electric three-wheeler, said production started at their Chinese factory. (CNBC)
- A report on industrial robot usage in the USA concluded that the automotive industry installed (12)% fewer machines in 2018 than the prior year. (CNBC)
News about other companies and trends
Economic / Political News
- US Light Vehicle industry in February was 16.53 million, about (2.5)% worse than a year earlier. (Wards)
- France had 172, 438 passenger car registrations in February, 2.1% higher than prior year. (CCFA)
- Italian passenger car registrations for February were 177,825 units, a (2.4)% drop on a year earlier. (UNRAE)
- Spanish passenger car registrations of 100,701 units dropped (8.8)% versus prior year. (ANFAC)
Suppliers
- Hella opened a new $14 million electronics plant in India. (Autocar)
- CATL plans to increase annual battery cell capacity at its still-unfinished German factory from 14 GWh in 2021 to 60 GWh by 2026. (Nikkei). The firm has also reportedly created a 49% / 51% joint venture with Chinese automaker FAW for local battery production. (Inside EVs)
- SK Innovation will build a second battery factory in Hungary for $845 million. Although no capacity was provided, for the size of reported investment it is probably about 10 GWh annually. (Reuters)
- JBM acquired metal forming specialist Linde-Wiemann. (Autocar)
- Dana completed the acquisition of Oerlikon’s drive systems business. (Dana)
- BYD is building a new battery factory in Chongqing, China with a planned annual 20 GWh capacity. (Xinhua)
- ZF has been in talks with Wabco about a potential takeover. (Reuters)
- Bosch will invest another €200 million in start-ups. (Bosch)
- Techrules says it will release a 15 kW turbine at the end of 2019 that the firm
believes will have widespread application in cars and commercial vehicles as a
range extender. (Autocar)
- Significance: Whilst a 15 kW motor can probably provide sufficient steady-state generation to power a mid-size car, it remains to be seen whether OEMs will favour this technology over a traditional internal combustion engine that can do the same job.
Dealers
- Chinese online new and used car sales firm Chehaiduo raised $1.5 billion. (Deal Street Asia)
Ride-Hailing, Car Sharing & Rental (history)
- Lyft filed S-1 paperwork ahead of an IPO. The co-founders will hold a class B stock with 20 times the voting rights of ordinary shareholders. Financials can be found on page 17. (SEC)
- Uber is rumoured to be heading towards a $3 billion deal to buy Careem. (Reuters)
- Mahindra is launching a ride hailing service called Glyd. (Mahindra)
- French on-demand ambulance start-up Ambler raised €1.5 million. (EU Startups)
Driverless / Autonomy (history)
- Autonomous vehicle developer Horizon Robotics raised $600 million. (Deal Street Asia)
- FedEx is testing a prototype delivery pod. (ZDNet)
- Apple fired 190 people from its self-driving car program. (Reuters)
- BMW and Daimler agreed to pool self-driving technology efforts, but only for SAE Level 3 and 4, aiming to release technology in the mid-2020s. The parties will continue with individual efforts on SAE Level 5 technologies, but remain open to discussion on sharing those too. (Daimler)
- The Indian government passed legislation to encourage uptake of electrified vehicles (dubbed FAME II) and received positive reviews from vehicle makers. (Economic Times of India)
- Ola’s electric vehicle subsidiary raised $56 million. (Tech In Asia)
- CharIN published standards for 1MW charging stations. Sadly, it is aimed at heavy trucks and buses rather than passenger cars in search of eye watering charging speeds. (CharIN)
Connectivity
- AT&T and Vodafone launched a joint connected car initiative, aiming to offer a single service that can span most of the globe. (Telematics News)
- Gosuncn and Qualcomm will supply Geely with C-V2X equipment. (Geely)
- President Trump reportedly plans to pledge a state-owned 5G network
in his re-election manifesto. (Politico)
- Significance: If the US decides that the heavy hand of the state is the best way forward, this could call into question the winner takes all mentality that underpins the investment case for many emerging (and loss-making) business models.
Other
- Bicycle rental firm Gotcha is offering electric trikes with a 40-mile range. (Gotcha)
- Electric scooter rental firm Voi announced $30 million in funding. (Deal Street Asia)
- Lime said that some of the firm’s scooters have a firmware bug that might cause sudden braking and suggested riders pump the brakes a few times to check if their vehicle is affected. Apparently, it is now fixed. (Lime)
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