Monthly Archives: July 2019

Nothing to see at Tesla; affordable car subscriptions; and inventive Japanese car sharing users. Please enjoy our auto industry and mobility briefing for 15^th July to 21^st July 2019. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Work It Out — Media were scandalised by Tesla employees with tales of installing parts with sticky tape. Yawn. These stories will be familiar to anyone who has worked in production. Sometimes things need to be done to make the numbers in a way that isn’t perfect but doesn’t harm the customer. Tesla bears need to look somewhere else for evidence of the firm’s shortcomings.
• Bit By Bit — Australian company CarBar has just raised almost $17 million. The term “subscription” has become mainstream parlance when the reality of most offerings is a thinly-disguised very short term lease, with eye-watering depreciation charges to match. CarBar lowers prices by putting customers in cars that are several years old, but still in decent condition. Will others sit up and take notice?
• Still — Japanese car sharing companies have been confused by cars being returned with zero extra miles on the clock. It turns out that some more inventive customers have started using them for purposes other than driving… consuming takeaway food and taking out-of-office powernaps being two great examples. How useful could shared cars become if we designed them with some of these activities in mind?

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

BMW ^(history)

• Announced production chief Oliver Zipse as CEO effective 16^th August 2019. German press had forecast the appointment with unnerving accuracy. (BMW)
• Said it had developed a versatile error checking machine learning algorithm that can be taught to spot errors (whether faulty parts or incorrectly applied name badges). All the examples mentioned were from a single factory so it remains to be seen whether the advance is as great as BMW claim. (BMW)
• Partnering with Tencent to create software that can train self-driving cars. BMW implied that the announcement was nothing to do with Chinese intellectual property concerns and instead was down to unspecified unique driving conditions in China. (BMW)
• Rumoured to be finalising a deal to supply four and six cylinder engines to JLR. (Autocar)

Daimler ^(history)

• Sources say that Daimler plans to drop the Nissan-based X-Class pickup truck. (Automotive News)
• Held a press briefing about Mercedes’s forward-looking retail strategy which bundled together several separate prior announcements into an over-arching explanation of the approach. (Daimler)

FCA ^(history)

• Extended the term of the joint venture finance company FCA operates in Europe with Crédit Agricole to the end of 2024. (FCA)

Ford ^(history)

• Ford’s European sales of 346,800 units in Q2 2019 fell (3.4)% versus a year earlier, almost all explained by Fiesta. Ford said that commercial vehicles were doing well (although the brand still lost share because industry also rose) and 73.8% of passenger vehicles were high series. (Ford)
• Increasing production of the Ranger pickup truck due to the product’s success in the European market. (Ford)
• Union officials said that Ford was cutting a shift at the Oakville, Canada plant that makes large SUVs. (Reuters)

Geely (includes Volvo) ^(history)

• Volvo’s CEO thinks the brand portfolio might need an even bigger car than the XC90 and smaller one than the XC40 to achieve sales targets, promising a surprise in the future. (Auto Express)
• Lotus took the wraps off the Evija supercar, an all-electric offering with a claimed 2,000 PS output. The production run will be limited to 130 examples priced at £1.7 million plus taxes. (Lotus)
• Volvo’s Q2 2019 revenue of 67.2 billion SEK (about $7.1 billion), rose 2% on a year-over-year basis but to keep pace with the increase in unit sales, up 5% YoY. EBIT of 2.6 billion SEK (about $280 million) dropped (38)%. (Volvo)
• Volvo is recalling over 500,000 cars to fix problems with the engine intake manifolds. (Sky News)
• Volvo said it was in the midst of a job cutting exercise to reduce fixed costs by 2 billion SEK (about $210 million). 750 staff have already gone since the start of 2019 and more could follow by the middle of 2020. (Volvo)
• Volvo announced investments in MDGo, a firm creating software that automatically contacts medical personnel with data about occupant health after a crash and UVeye who are developing technology that can automatically check a vehicle for quality problems. (Volvo)

General Motors ^(history)

• Revealed the next generation Corvette, with a mid-engined layout and “generous use of real metal”. (GM)
• Rumoured to be developing an all-electric version of the Escalade large SUV with a 400 mile range. (Cadillac Society)

Hyundai / Kia ^(history)

• Hyundai reported Q2 2019 revenue of 26.97 trillion won (about $23 billion), up 9.1% on a year-over-year basis and operating profit of 1.24 trillion won (about $1 billion), 30.2% better YoY. (Hyundai)
• Hyundai’s VC unit invested in parking location and payment app AppyParking. (Hyundai)

Nissan (includes Mitsubishi) ^(history)

• Showed off a new version of the Skyline. (Nissan)
• Renault’s chairman said the alliance with Nissan was back on track, there were no plans to restart merger talks with FCA and that no one talks about Carlos Ghosn anymore. (AP)

PSA (includes Opel/Vauxhall) ^(history)

• Sold 1,013,968 units in Q2 2019, a drop of (10)% on a year-over-year basis. (PSA)
• Citroen’s CEO suggested that the 30 inch wheels used in the 19_19 concept were being considered for production, partly because they provide a large ground clearance for the battery pack of a skateboard layout (implying the use of some trick suspension to lower the car enough for people, other than Olympic high jumpers to get in). (Autocar)
• Opel will enter the Israeli market using a distributor. (PSA)

Renault ^(history)

• Renault sold 1,030,231 vehicles in Q2 2019, a drop of (8)% on the prior year. (Renault)
• Linked up with Nigerian firm Coscharis to begin local production of two Renault (re-badged Dacia) models and sell those, and two imported products. (Renault)
• Confirmed a stake of 50% in the electric vehicle joint venture it is creating in China with Jiangling Motors. The prior press releases had only spoken of a “significant part” of the JV. (Renault)
• Renault’s chairman said the alliance with Nissan was back on track, there were no plans to restart merger talks with FCA and that no one talks about Carlos Ghosn anymore. (AP)

Tata (includes JLR) ^(history)

• JLR received a £500m loan guarantee from the UK government to assist electric vehicle development. The guarantee will enable JLR to receive a low interest rate on £625 million of commercial loans it intends to raise. (JLR)
• JLR said it would like to produce more cars and SUVs in India but effective tax rates of around 50%, including VAT and surcharges, are restricting the market size. (Economic Times of India)
• Rumoured to be finalising a deal to buy four and six cylinder engines from BMW in preference to in-house units so that JLR can re-direct development spending to electric vehicles. (Autocar) An earlier rumour was that BMW might supply JLR with V8 engines.
• Executives reportedly told staff that the Halewood plant will soon lose its third shift. (Liverpool Echo)

Tesla ^(history)

• Further tinkered with the line-up and pricing, offering only two derivatives of the Model S and Model X. (Reuters)
  • Significance: Tesla is changing options and pricing so frequently at the moment that it isn’t possible to gauge whether (1) the sales department is completely chaotic; (2) the changes are a reaction to short term manufacturing bottlenecks, that are then reversed; (3) Tesla is rationing certain derivatives for re-release at a later date (a la Disney’s video strategy of the 90s and 2000s) or; (4) the changes are a manufacturing simplification ahead of an updated model (normal practice and denied by Tesla)
• Disgruntled employees said that Tesla had cut corners with Model 3 production, citing several quick fixes applied lineside to keep production moving, such as using sticky tape to keep parts in place. (CNBC)
  • Significance: Whilst the examples cited by the employees horrified journalists, most mass production veterans will have seen a similar litany of patches and many of us unwittingly drive vehicles with such measures in place.

Toyota ^(history)

• Teaming up with BYD to develop battery electric vehicles for the Chinese market. (Toyota)
• Toyota Tsusho invested in inspection startup UVeye alongside Volvo. (Forbes)

VW Group ^(history)

• CEO Diess sees the MEB platform becoming the “industry standard for electric vehicles”. (Automobil Sport)
  • Significance: Although he claims MEB will deliver significant economies of scale, this certainly isn’t being reflected in lower list prices (although perhaps it will be in profits) and financial figures released at the joint Ford / VW press conference suggest a rolling chassis only price of ~$16k, not cheap for a mass market car.
• Dropping estate car (station wagon) bodystyles from the US line-up because SUVs have “assumed the mantle of family haulers”. (CBNC)
• Said that vehicles produced in India will have around 90% local sourcing, a slight climbdown from targets of 95% that VW earlier announced for vehicles on the MQB platform. (Economic Times of India)
• Reckons that the latest generation of manual gearbox can reduce CO₂ emissions by five grams per kilometre in some cars, equivalent to about 3% – 4%. VW said that until now “nobody took much notice of manual gearboxes” as a way of improving fuel economy. (VW)
• Reportedly considering an offer for the MAN Energy Solutions (large engines) unit, from Cummins. (Reuters)

Other

• VinFast executives say the brand is losing money on the first vehicles on sale but the plan is that operational efficiencies from ramping up to larger scale, and some headroom to increase pricing, will see the carmaker reach profitability. VinFast claimed 10,000 firm orders ahead of product launch. (Bloomberg)
• SAIC’s MG brand says the Hector SUV has been such a runaway sales success in India, with 21,000 orders so far, that is has stopped letting customers order the car whilst it clears the backlog. (India Today)
• Early Xpeng customers protested at the firm’s headquarters after a new model was released, claiming to have been mis-sold the original car by sales people who said it would be a sound financial investment. (Caixin)
• Seres (aka SF Motors) said it made fewer employees redundant than media reports claimed. (China Economic Net)
• Former JLR design boss Ian Callum opened a new firm and intends to create some sort of car, but won’t say what it is… yet. (Top Gear)

News about other companies and trends

Economic / Political News

• European passenger car registrations in June of 1,491,285 units fell (7.9)% versus prior year, mainly explained by a reduction in selling days. (ACEA)
• As negotiations over a new contract for US hourly paid employees between the major US automakers and the UAW union began, Ford said it was the biggest employer of UAW labour (i.e. don’t be mean to your best friend), GM said it wanted to lead the industry transformation (i.e. things aren’t going to stay as they are) and FCA asked everyone involved to think about disruption (i.e. put yourself in my shoes, I can’t pay you any more).

Suppliers

• Autoliv announced Q2 2019 sales of $2.155 billion, down (2.6)% and a (26)% drop in operating income. The firm says it has already begun cost saving actions and shed over 1,200 jobs this quarter. (Autoliv)
• Lear gave a preliminary earnings release for Q2 2019 and lowered full year revenue and profit guidance. Revenue of $5 billion dropped (10)% from prior year. (Lear)
• Bearing maker SKF thinks there might be “some light in the tunnel” for the Chinese automotive industry. (Reuters)
• Eaton is buying Innovative Switchgear Solutions. (Eaton)
• Samsung SDI will supply batteries for Volvo trucks. (Volvo)

Dealers

• Australian subscription service CarBar raised $16.8 million. The company reduces prices by offering cars that are several years old, and have quote high mileage. (Deal Street Asia)

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

• A subset of short-term car rental users in Japan aren’t driving the cars at all, preferring to use the vehicles for activities such as eating takeaway food or short naps during the workday. (The Guardian)
• Short term car rental operator Turo raised $250 million in a round valuing the firm at over $1 billion. (Turo)
• Rickshaw ride hailing service SmartE raised $14 million. (Live Mint)
• Yandex and Uber’s Russian joint venture announced a takeover of local rival Vezet, although there were murmurs from some stakeholders that they might not be happy with the deal. (Reuters)
• Uber suffered a payment mishap that saw some customers overcharged by 100 times the correct fare. (BBC)
• Didi Chuxing plans to raise another $2 billion. (WSJ) and wants to get back into the carpooling game, but says it will hold a public consultation on improved safety measures first. (Reuters)

Driverless / Autonomy ^(history)

• Open source driver assistance technology developer comma.ai announced a changed strategy, the company now hopes to become an insurance provider. (Comma.ai)
• Uber proposed a structure for defining how to implement sufficient safety measures in self-driving vehicles. (Uber)
• Compact lidar developer Voyant Photonics raised $4.3 million. (TechCrunch)
• Self-driving vehicle developer AutoX has partnered with NEVS for a European robotaxi service that the pair hope can be launched by 2020. (TechCrunch)
• A Navya self-driving bus had a low speed collision with a pedestrian in Vienna and trials were halted. (The Verge)
  • Significance: Collisions between vehicles and pedestrians are (unfortunately) an everyday occurrence. As self-driving fleets increase in size, the attitude of local authorities to accidents will begin to have a measurable effect on development if trials have to be totally suspended whilst an investigation takes place — as is the practice currently.
• BMW is partnering with Tencent to create software that can train self-driving cars. BMW implied that the announcement was nothing to do with Chinese intellectual property concerns and instead was down to unspecified unique driving conditions in China. (BMW)

Electrification ^(history)

• Evergrande is partnering with the state-owned Chinese power grid in a 50/50 joint venture to create a charging network called Guoheng Smart Energy. (Caixin)
• A new estimate of electrification infrastructure in China reckons there are over 1 million charging points across the country, about 40% of which are open to the public. (Economic Times of India)
• ZF says a two-speed gearbox on an all-electric car will improve range by 5% compared with a single speed. (ZF)
• Toyota is teaming up with BYD to develop battery electric vehicles for the Chinese market. (Toyota)

Connectivity

• Blockchain collaboration MOBI, with support from several carmakers, said it had created a way to log vehicle VINs and was now working on ways to capture information about how it was used through its life. (MOBI)

Other

• Emoji lovers were gratified by news that blue-chip companies were finally waking up to society’s wish for them to muscle in on the act. Ford said it was sponsoring a pickup truck, whilst VW-owned charging network Electrify America offered a car plugged in to a charger.
• Indian logistics firm Rivigo may have recently raised $65 million, but it is having to cut staff and rescind job offers. (Economic Times of India)
• Bicycle rental service Hellobike raised $400 million. (Deal Street Asia)
• Bus and train operator and ticketing website FlixMobility raised €500 million and said that it will put some of the money towards starting a short-term car rental service. (Reuters)
• Air taxi developer Karem raised $25 million. (TechCrunch)

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Musk says price will skyrocket; managing the decline of combustion engines; and why are factories for electric cars so expensive? Please enjoy our auto industry and mobility briefing for 8^th July to 14^th July 2019. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• Up Where We Belong — Elon Musk says that once Tesla has cracked self-driving, prices will go up significantly. But since he also says the cost of the hardware is included in cars being built right now, that would simply be price gouging. The reason Tesla loses money currently is that it must sell cars at a similar price to competitors, rather than however much it would like to charge. Why would self-driving cars change that?
• The A Team — VW’s head of procurement says that the switch to electrification could cause a raft of insolvencies in suppliers and makers of combustion engines, leading to absolute chaos. His preferred approach is a planned consolidation. Sounds like the idea advanced by Ad Punctum and Evercore ISI at the end of last year. Why are so many people ignoring this?
• My Favourite Mistake — Fiat will spend €700 million to introduce the next generation all-electric 500e. What will they get for the money? An electric version of a car they will be making with a combustion engine and a factory good for 80,000 units per year. Doesn’t sound like much when a conventionally powered car would buy you well over 250,000 units of capacity annually for the same money. Where are the much-vaunted investment savings from electric vehicles being simpler to make?

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

BMW ^(history)

• Sold 647,504 cars globally in Q2 2019, an increase of 1% on a year-over-year basis. (BMW)
• Said that it had moved production of engines destined for South Africa out of the Hams Hall, UK, plant to ensure that EU-South Africa rules of origin requirements continue to be met. (The Guardian)
• Invested in Maniv Mobility’s new $100 million fund. (Economic Times of India)
• Unveiled the all-electric version of the Mini, saying there had been 40,000 expressions of interest. (BMW)

Daimler ^(history)

• Sold 607,126 globally cars in Q2 2019, a drop of (3)% on prior year. (Daimler)
• Issued a profit warning for Q2 2019, having only just issued a profit warning a few weeks ago, saying it had lost €(1.6) billion, down from a profit of €2.6 billion last year. Daimler blamed higher recall costs, likely fines relating to diesel vehicles and a mysterious product planning decision concerning vans. (Daimler)

FCA ^(history)

• Investing €700 million to produce the all-electric Fiat 500e in Mirafiori, Italy. (FCA)
• FCA said that it withheld some of its US sales chief’s pay packet because he was implicated in a scheme to exaggerate sales figures, not because he cooperated with the investigating authorities, as he alleges. The lawsuit implies that up to 90% of senior executive compensation at FCA comes in bonuses and stock grants. (Detroit News)

Ferrari

• There is a five year waiting list of customers who want to commission a one-off from Ferrari, and unless you are in the top 250 customers globally — however that is defined — you don’t have a chance. (Autocar)

Ford ^(history)

• Recalling around 58,000 Focus cars to correct problems that can deform the fuel tank. (Ford)
• Ford and VW announced the terms of a tie-up for autonomous vehicles. VW will merge its autonomous driving efforts (with a claimed value of $1.6 billion) with Argo AI and stump up a further $1 billion in cash, plus hand over $500 million to Ford to buy into the project. After the transaction is complete, Ford and VW will hold an equal share in a business, they say, worth $7 billion. (VW)
• Has agreed to build up to 600,000 MEB-based electric cars and could “almost double” that figure if a second product, currently under discussion between the two parties, gets the go ahead. (VW) Ford will pay licensing fees on a vehicle-by-vehicle basis. (Reuters) with implied ~€15,000 per vehicle of revenue for VW. (Ford) Ford’s electric vehicles will be made in European Ford factories, but which one stays a secret for now (hint: there are impending capacity crunches in Saarlouis and Valencia). (Seeking Alpha)
• Ford and VW’s collaboration on commercial vehicles saves “several hundred million euros”. (VW)
• Ford and VW might share some of the behind the scenes infrastructure related to autonomous cars but haven’t decided yet. (Seeking Alpha)
• Argo AI will “continue to seek new partners” after VW buy-in. (Argo)
• Recalling around 58,000 Focus cars to correct problems that can deform the fuel tank. (Ford) Ford will also recall about 7,500 Rangers because of seat belts that weren’t fitted properly. (Ford)

Geely (includes Volvo) ^(history)

• Issued a profit warning saying the net profits in the first half would be about (40)% down on 2018. (Geely)

General Motors ^(history)

• The head of artificial intelligence at Cruise thinks it might take a lifetime to get self-driving cars to work properly in all locations and driving conditions. (IEEE Spectrum)

Hyundai / Kia ^(history)

• Invested in Maniv Mobility’s new $100 million fund. (Economic Times of India)

Mazda

• Recalling 262,000 US vehicles to fix problems with engines stalling. (Fox)
• Toyota will now make an SUV at the new US joint venture plant with Mazda (still under construction), rather than the previously planned car. The impact on Mazda’s production plans is unclear. (Toyota)

Nissan (includes Mitsubishi) ^(history)

• Mitsubishi will invest in ride hailing firm GoJek (the Mitsubishi trading company had already been announced as an investor but this is the first time the motor company has come on board). (Mitsubishi)
• Nissan and Mitsubishi merged their Japanese finished vehicle logistics operations. (Mitsubishi)
• Alliance Ventures invested in Maniv Mobility’s new $100 million fund. (Economic Times of India)

Renault ^(history)

• Alliance Ventures invested in Maniv Mobility’s new $100 million fund. (Economic Times of India)

Tata (includes JLR) ^(history)

• JLR sold 128,615 cars in April to June 2019 (fiscal Q1), a drop of (11.6)% on prior year. (JLR)

Tesla ^(history)

• A leaked internal email suggested further production increases at the Fremont, USA, factory and a full year 2019 production target of far more than 400,000 cars. (Bloomberg)
• CEO Musk said that customers shouldn’t expect a refreshed Model S or Model X and that only a series of “minor ongoing changes” were planned. (Business Insider)
  • Significance: With Model S and X sales falling fast, Tesla may find that it is less immune to product ageing than the company thinks, despite Musk’s belief that the Model S remains an unparalleled product.
• Seeking a restraining order from a researcher aligned to a group of Tesla short sellers. Tesla say the man, who tries to count car deliveries and shadows autonomous test vehicles, puts their employees at risk. (Detroit News)
• A Tesla supplier is reportedly preparing to double shipments to Tesla, setting tongues wagging about an explosion of Model 3 volume. The other possibility is that it has won some work from other suppliers (or the whole thing is an inaccurate rumour). (Digitimes)
• Elon Musk said prices for Tesla cars would rise “significantly” when the company has cracked the self-driving problem because they would be capable of functioning as robotaxis and would thus be far more valuable. (Electrek)
  • Significance: Musk’s comments imply that although he believes the cost of self-driving is already included in current production (as yet unproven because Tesla doesn’t actually have a self-driving suite that works), the market would allow the company to reap outsize profits — this is known colloquially as price gouging and normally fails because of competitive pressure (a phenomenon already encountered by Tesla and responsible for setting transaction prices at a level too low to make profits).

Toyota ^(history)

• Created a sub-brand called “Toyota Professional” to sell commercial vehicles in Europe. (Toyota)
• Will now make an SUV at the new US joint venture plant with Mazda (still under construction), rather than the previously planned car. (Toyota)
• Selling all of Toyota’s interest in driveline supplier Yutaka Seimitsu to JTEKT. (Toyota)
• Toyota and Denso will establish a 49% / 51% joint venture to develop advanced semi-conductors. (Toyota)

VW Group ^(history)

• Delivered 2,759,700 vehicles in Q2 2019, a drop of (2.8)% versus prior year. (VW)
• Bentley unveiled the EXP 100 GT concept, an all-electric GT with (intended) self-driving capability that represents the product Bentley hopes to sell in 2035. The sleek design implies that Bentley believe all sensors required for autonomous driving will be integrated into the bodywork by then. (Bentley)
• VW has set a target to become “balance sheet CO₂ neutral” by 2025, implying extensive use of renewable energy and carbon offsets. The move may be partly aimed at EU CO₂ regulations which imply that the emissions from the entire vehicle lifecycle will be considered. (VW)
• VW highlighted how much of the forthcoming ID3 electric vehicle components are made in-house. (VW)
• CEO Diess said VW preferred Ford / Argo to other options because he wanted an American technology partner and to work with a strong OEM. It wasn’t clear how this was different to (US-based) Aurora and their OEM partners Hyundai / KIA and FCA. (Seeking Alpha)
• VW’s parking subsidiary PayByPhone acquired Mirada Connect. (FINSMES)
• VW’s head of procurement says that the automotive industry is “obliged” to find a way to consolidate internal combustion assets without uncontrolled insolvencies. (Reuters)
  • Significance: These comments further show that the industry is waking up to the need for radical solutions to the decline of internal combustion engines. Pre-planned consolidation was the route Ad Punctum and Evercore ISI championed in a 2018 research piece titled E-FIRST.
• Ford and VW announced the terms of a tie-up for autonomous vehicles. VW will merge its autonomous driving efforts (with a claimed value of $1.6 billion) with Argo AI and stump up a further $1 billion in cash, plus hand over $500 million to Ford to buy into the project. After the transaction is complete, Ford and VW will hold an equal share in a business, they say, worth $7 billion. (VW)
• Ford agreed to build up to 600,000 MEB-based electric cars and could “almost double” that figure if a second product, currently under discussion between the two parties, gets the go ahead. (VW) Ford will pay licensing fees on a vehicle-by-vehicle basis. (Reuters) with implied ~€15,000 per vehicle of revenue for VW. (Ford)
• Ford and VW’s collaboration on commercial vehicles saves “several hundred million euros”. (VW)
• Ford and VW might share some of the behind the scenes infrastructure related to autonomous cars but haven’t decided yet. (Seeking Alpha)

Other

• Aston Martin’s CEO worries about requirements for tens of kilometres of electric-only range, saying plug-in hybrids are a “bad solution” for sports cars because of the additional weight of the larger electric engine. V12 engines will last “at least until the next generation”, but can easily imagine it going longer. (The Drive)
• Seres, aka SF Motors, has reportedly made around one third of US staff redundant and is postponing the US market launch (and potentially abandoning plans to manufacture locally), citing difficult conditions in China. (The Verge)
• Chinese automaker JAC was fined 170 million RMB (about $25 million) for excessive real world emissions compared to test results. (Caixin)
• NIO delivered 3,553 cars in Q2 2019. (NIO)

News about other companies and trends

Economic / Political News

• The US government is removing the escalation of financial penalties for exceeding fuel economy standards. (Reuters)

Suppliers

• Dana’s CEO thinks people are underestimating the staying power of the internal combustion engine — although he admits that this view is contingent on hybrids, rather than fully electric vehicles — ruling the roost. (Reuters)
• ZF says it is providing the entire electric powertrain for the Mercedes EQC, including controls. (Xinhua)
• Weber Automotive declared insolvency amid a fight over funding between its owners. (Reuters)
• Bosch invested in on-demand manufacturing start-up Xometry. (Bosch)
• Denso and Metair subsidiary Smiths set up an aftermarket parts joint venture in South Africa. (Autocar)
• Toyota and Denso will establish a 49% / 51% joint venture to develop advanced semi-conductors. (Toyota)

Driverless / Autonomy ^(history)

• Lidar developer Luminar said it has now raised $250 million and that its sub $1,000 sensor will be on production vehicles from 2022 onwards. Luminar claims to be “working with… 12 of the world’s top 15 automotive companies”, but this does not imply firm production contracts. (Luminar)
• Hyundai Mobis and Yandex said they had produced a prototype self-driving car in six weeks. (Korea Times)
  • Significance: The speed with which the prototype was built underlines that the challenge isn’t fitting a car with sensors and linking the steering, power and brakes to a central control unit, it is developing software that uses the sensor set to drive the vehicle safely.
• Volvo Trucks says that in commercial trials of self-driving vehicles, it is already trialling a cost per tonne moved revenue model and exploring the possibility that it might not sell the trucks outright. (Reuters)
• Waymo says it has now simulated 10 billion miles of driving. (TechCrunch)
• Pony.ai’s CEO thinks there will be “thousands or tens of thousands” of autonomous vehicles on the road within the next three to five years. (Time)
• The head of artificial intelligence at GM’s Cruise division thinks it might take a lifetime to get self-driving cars to work properly in all locations and driving conditions. (IEEE Spectrum)
• Elon Musk said prices for Tesla cars would rise “significantly” when the company has cracked the self-driving problem because they would be capable of functioning as robotaxis and would thus be far more valuable. (Electrek)
• Argo AI will “continue to seek new partners” after VW buy-in. (Argo)

Electrification ^(history)

• Chinese battery maker SVOLT is reportedly planning a European factory. (Reuters)
• REE emerged from stealth mode saying it had developed a highly flexible vehicle platform using in-wheel motors and steer by wire that was already interesting Mitsubishi and FCA amongst others. (REE)
• LG Chem is reportedly looking to build a second US battery factory. (Reuters)

Connectivity

• Niu has collected 85 terabytes of journey data from the 710,000 scooters the company has sold — which have collectively covered 3 billion kilometres. (CNBC)

Other

• Refraction is building an autonomous delivery robot with a target price below $5,000, partly enabled by a 15 mph top speed which reduces the need for expensive sensors. (TechCrunch)
• Electric bike maker Pure EV raised $25 million. (Economic Times of India)
• Bicycle sharing network Yulu is reportedly in talks to raise $15 million. (LiveMint)
• Scooter rental firm Bird is establishing a European headquarters in Paris. (The Verge) The CEO says that, with the latest scooters, Bird can make $1.27 on every ride. (TechCrunch)

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Hypercars for all; jobs for the masses; and are Norwegians making everyone else look silly? Please enjoy our auto industry and mobility briefing for 1^st July to 7^th July 2019. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

• You Wanted More — Aston Martin’s CEO says he could have sold 900 Valkyrie hypercars, and regrets limiting production to 150 units. If correct, that would be nearly 50% more than LaFerrari, despite a far higher price tag. Do enough buyers really exist? If so, can we expect to see the next Aston Martin hypercar (Valhalla) nearing four figures?
• Paper Thin — A coalition of car companies and suppliers released what they termed a framework for autonomous driving. It’s a whopping 157 pages long, but don’t hold out hope that all your questions will be answered, most of them are simply acknowledged by the report, with no firm answers provided beyond. To carry out tests, the authors recommend simulations with human drivers controlling other simulated vehicles. Thing is, if we test self-driving cars that way, lots of human will have to drive lots of computer-generated miles. Will simulated driving become the new content moderation, employing tens of thousands across the globe?
• The World’s Greatest — Almost half the cars sold in Norway over the past six months are capable of zero emission travel. Not only that, but the fleet average CO₂ emissions registered 59 g / km, meaning that Norway is already compliant with 2030 European targets many are labelling as near impossible! Okay, there are incentives involved and, yes, Norway’s citizens are richer than most, but why not look on the bright side… if the Norwegians are there now — with today’s technology at today’s prices — surely other countries can get there with the technology of the future (as yet unrealised scare stories about battery raw material costs notwithstanding)?

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)

• CEO Harald Krüger will not seek a second term as CEO (the current term was due to end in 2020). (BMW)
• German media reports on the main candidates for the CEO position speculated that senior executive departures are likely after the decision has been made. Sharp elbows have reportedly been out for months. (Handelsblatt)
• BMW and Daimler finalised an (already announced) agreement to jointly develop L4 self-driving systems (i.e. the owner doesn’t need to concentrate, but the car may only be capable in a limited number of environments). The two companies will pool a team of 1,200 development engineers and hope to launch the first products in 2024. (Daimler)

Daimler ^(history)

• BMW and Daimler finalised an (already announced) agreement to jointly develop L4 self-driving systems (i.e. the owner doesn’t need to concentrate, but the car may only be capable in a limited number of environments). The two companies will pool a team of 1,200 development engineers and hope to launch the first products in 2024. (Daimler)
• Spent €50 million on a new electromagnetic compatibility testing centre. (Daimler)

FCA ^(history)

• Announced some changes to the team heading up Maserati. (FCA)
• Will buy 8 speed automatic transmissions from ZF. (ZF)

Ford ^(history)

• Releasing a track-only version of the GT. Just 45 examples will be built, at a cost of $1.2 million each. (Ford)
• Although Ford celebrates the success of the F-150’s all-aluminium body, the experience of the next-generation Explorer, which uses the material only sparingly, suggests it is still too expensive for vehicles where manufacturers cannot claim a hefty premium for fuel economy. (Detroit Free Press)
• Highlighting the difficulty of pricing in the UK market, despite the need to recover from sterling devaluation, Ford launched a “scrappage scheme” offering customers £2,000. (Autocar)
• Sold 650,336 vehicles in the US during Q2 2019, down (4.1)% on a year-over-year basis. (Ford)
• Ford and VW are reportedly close to an overarching deal that will see Ford sell a share of self-driving unit Argo AI to VW in exchange for access to the MEB electric vehicle platform. The value of the self-driving technology is apparently lower than Ford hoped because VW reckons it won’t be commercially available in large numbers for such a long time. (Handelsblatt)
• French unions won a court judgement against the company saying it had failed in a duty to employ 1,000 workers at the site under the terms of a grant. However, the judges stopped short of condemning Ford’s decision to close the plant, saying they weren’t qualified to rule on the economic merits. (Usine Nouvelle)

Geely (includes Volvo) ^(history)

• The Geely and Lynk&Co brands sold 285,092 units in Q2 2019, a fall of (25)% on a year-over-year basis. (Geely)
• Volvo sold 179,506 cars in Q2 2019, a 5% increase on the same period a year earlier. (Volvo)
• Volvo has a new CFO. (Volvo)
• Lotus’s new hypercar (previously known as Type 130) will be called Evija. (Lotus)

General Motors ^(history)

• Reported US sales of 746,659 units in Q2 2019, a drop of (1.5)% on a year earlier. (GM)

Honda ^(history)

• Developing one and two seat electric cars, believing them to be the best way to transport the elderly. (Japan Times)
• Creating a retrofit kit that will allow some features of Honda’s driver assistance suite even on older vehicles. (Honda)

Hyundai / Kia ^(history)

• Hyundai says that continuously variable valve duration (CCVD) technology provides a 5% improvement in fuel economy. (Hyundai)
• Might enter NASCAR when new rules come into force for 2021. (Autoweek)

Mazda

• Recalling tens of thousands of Mazda 3 cars to stop their wheels falling off. (The Guardian)

Nissan (includes Mitsubishi) ^(history)

• Renault and Nissan might stop publishing their customary annual cost saving declaration. (Reuters)

PSA (includes Opel/Vauxhall) ^(history)

• Continuing the recent trend of removing national sales companies in lower volume locations, Opel announced a distributor had been selected for Ireland. (Opel)
• The EU said it would take a closer look at €20.7 million in aid from the Spanish government to support further investment in the Vigo factory. (Europa Press)

Renault ^(history)

• French Police raided Renault’s headquarters apparently looking for dirt on Carlos Ghosn. (Reuters)
• Renault and Nissan might stop publishing their customary annual cost saving declaration. (Reuters)

Suzuki

• Maruti Suzuki’s woes continue with a fifth consecutive month of production cuts. (The Hindu)

Tata (includes JLR) ^(history)

• Confirmed plans for an all-electric replacement for the XJ large saloon at the Castle Bromwich, UK, factory and a “range” of other electric products. Whilst making the announcement, JLR’s CEO said that unless battery factories are built in the UK, car plants will have to be relocated to wherever they are made (JLR)

Tesla ^(history)

• Reported Q2 2019 deliveries of 95,200 cars, up 34% on a year-over-year basis. Tesla said orders were being placed more quickly than they could build cars but declined to provide specifics (although the balance sheet contains clues). Tesla will stop reporting the number of cars in transit inventory. Model S and X remained weak. (Tesla)

Toyota ^(history)

• Says that a new generation of solar panels has increased charging rate by a factor of four. Toyota has a Prius test vehicle that generates around 860 W (in Japanese sunshine), good for a claimed 44.5 km of highway driving (the old system provided just over 6km). (Toyota)

VW Group ^(history)

• Aims for 50% of Chinese sales to be electric vehicles by 2035. (VW)
• VW expects solid state batteries to become cost competitive in the late 2020s and says that most of the production equipment and 60% of the tooling is the same as lithium ion cells, so newly built factories won’t become obsolete even if the technology changes. (Reuters)
• Bentley’s boss wants to build an all-electric car but says that current technology (specifically the battery energy density) won’t allow him to create a vehicle with long range that isn’t too heavy, and that he might have to wait until 2025 for the right batteries to come along. (Autocar)
• Ford and VW are reportedly close to an overarching deal that will see Ford sell a share of self-driving unit Argo AI to VW in exchange for access to the MEB electric vehicle platform. The value of the self-driving technology is apparently lower than Ford hoped because VW reckons it won’t be commercially available in large numbers for such a long time. (Handelsblatt)

Other

• Borgward has lost the site of its planned factory in Bremen, Germany due to inactivity. (WirtschaftsWoche)
• Aston Martin’s CEO says he wishes he hadn’t limited the Valkyrie hypercar to a production run of 150 cars because demand is so great that he could have sold 900 of them. (carsales)
  • Significance: Given the £2.5 million price tag, a 900 unit run would be unprecedented (La Ferrari sold 649 cars and the relatively cheap F40 reached just over 1,300 — albeit when the addressable market was smaller). Since Ferrari’s newest special editions will only have 499 examples at €1.6 million, the remarks look like hyperbole. Aston Martin will have another chance when they release the Valkyrie’s successor.

News about other companies and trends

Economic / Political News

• US light vehicle SAAR in June of 17.29 million units was down (0.5)% on prior year. (Wards)
• German passenger car registrations for June of 325,231 units fell (4.7)% versus a year earlier. (KBA)
• French June sales of 230,965 passenger cars, dropped (8.4)% from prior year. (CCFA)
• Passenger car sales in the UK during June of 223,421 cars fell (4.9)% on a year-over-year basis. (SMMT)
• Italian passenger car registrations for June of 171,626 units, fell (2.1)% versus the prior year. (UNRAE)
• Spanish sales of passenger cars in June of 130,519 units fell (8.3)% on a year-over-year basis. (ANFAC)
• Norwegian sales of new passenger cars in the first half of 2019 reached 78,209 units. 35,200 (45)% of these were zero emission vehicles. The average CO₂ emissions of passenger cars sold was 59 g/ km. (BIL)
• Bulgaria’s government reportedly plans to ban imports of diesel cars which do not meet the Euro 4 emissions standards (i.e. pre-2005 vehicles). (Novinite)

Suppliers

• Teijin is acquiring composites supplier Benet Automotive. (Teijin)
• Inzi Controls is building a $50 million battery plant in Hungary. (Budapest Business Journal)

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

• Didi Chuxing said that it had dropped over 300,000 drivers after a safety review. (TechCrunch)

Driverless / Autonomy ^(history)

• Self-driving car developer Tier IV raised over $100 million from investors including Yamaha. (VentureBeat)
• Valeo said it had orders for €500 million worth of lidar sensors. (Reuters)
• Testing equipment firm AB Dynamics acquired simulation company rFpro. (Autocar)
• A coalition of carmakers and suppliers published a shared white paper on safety in autonomous vehicles. The paper places a heavy emphasis on the role of sensor fusion algorithms (loosely, taking data from several sensors and combining it into a single worldview), a catch-all term that will mean different things to different people. It does lay down a marker by talking about a “degraded mode” (a back-up system) and calling for a mixed sensor suite that includes lidar. (BMW)
  • Significance: The study does a better job of highlighting the problems verifying the roadworthiness of self-driving systems than it does in providing clear answers about how it can be performed. For instance, whilst discussing the difficulties of simulation, about the same about of space is given to considering gravitational forces as modelling the reaction of other drivers to the car’s decisions. A driver in the loop model (e.g. use human drivers to drive the other cars, as if it is a great big computer game) is the get out of jail free card — could being a simulator driver become the next big gig — tens of thousands could be required if this is really how we are going to test self-driving cars.
• Visiblezone says it can detect pedestrians that self-driving cars aren’t able to directly see by monitoring signals from mobile phones and other electronic devices the people are carrying. (TechCrunch)
• Driver assistance developer ZongMu raised $14.5 million. (VentureBeat)
• BMW and Daimler finalised an (already announced) agreement to jointly develop L4 self-driving systems (i.e. the owner doesn’t need to concentrate, but the car may only be capable in a limited number of environments). The two companies will pool a team of 1,200 development engineers and hope to launch the first products in 2024. (Daimler)

Electrification ^(history)

• Continental showed off a hybrid vehicle with a 30 kW (40 PS) motor powered by a 48V system. These type of hybrid set-ups promise lower costs than (traditional) high voltage equipment. (Continental)
• Ola Electric raised $250 million from SoftBank. (Business Standard)
• Toyota says a new generation of solar panels has increased charging rate by a factor of four. Toyota has a Prius test vehicle that generates around 860 W (in Japanese sunshine), good for a claimed 44.5 km of highway driving (the old system provided just over 6km). (Toyota)
• VW expects solid state batteries to become cost competitive in the late 2020s and says that most of the production equipment and 60% of the tooling is the same as lithium ion cells, so newly built factories won’t become obsolete even if the technology changes. (Reuters)

Connectivity

• Amazon keeps customer voice recordings, transcripts and details of their discussions with Alexa devices forever, unless the user manually deletes them. (ZDNet)
• Samsung says people won’t be using smartphones in five years, preferring multiple displays connected wirelessly to each other instead. (ZDNet)
  • Significance: If Samsung are right (and they know a thing or two about electronics), car makers need to be thinking more seriously about how the car can interact with external devices — beyond CarPlay and Android Auto — and how customers can mount and power different screens in the car without a proliferation of ugly plastic add-ons.

Other

• Electric scooter rental service Dott raised $30 million. (TechCrunch)
• Electric bus maker Proterra is reportedly exploring an IPO. (Reuters)
• A profile of bicycle sharing firm Ofo’s failure suggested that the root cause was getting on the wrong side of too many big investors. (Technode)
• Electric scooter rental start-up Wind Mobility raised $50 million. (TechCrunch)

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