VW thinks about buying its former rental unit; Aston Martin the cash guzzlers; and should we bow to the inevitable dominance of Google? Please enjoy our auto industry and mobility briefing for 22^nd June to 28^th June 2020. A PDF version can be found here.

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

• Trouble Man — VW is reportedly thinking about making a bid for, troubled former subsidiary, rental company Europcar. Major daily rental has always sat uncomfortably with the capital intensive on-demand mobility strategies employed by OEMs in recent years. If services that looked very similar (subscription, car sharing) were in scope, why not rental? Would an acquisition be a smart way to secure a sales channel for electric vehicles and spare capacity, or will the rental business demand incentives, refuse to only buy the parent’s products, and spend money on a market share grab (which is why OEMs offloaded them in the first place)?
• More Than A Feeling — Aston Martin announced another rights issue, this time raising £150 million. Despite positive messages from the management team, raising £650 million since January, plus debt on top, shows that it is easy enough to burn through large sums in a short time period. If this latest amount isn’t enough, where next?
• It’s Nice To Have A Friend — Volvo announced a deal to use Waymo’s self-driving kit, and that it will build a robotaxi with the technology. The growing list of Waymo partners (JLR, FCA, Renault etc) suggests that reasonable commercial terms are on offer. If that is the case, then why spend billions independently trying to develop the technology? Will the collectively cash-strapped Renault-Nissan-Mitsubishi alliance (who already have a friendly relationship with Waymo) be next?

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)

• Opened a new additive manufacturing centre, with plans to make 60,000 parts each year. (BMW)
• Will use a new technology in Apple devices that means a phone can double as a car key. (BMW)
• Workers representatives on BMW’s board are pushing for the firm to change strategy and produce a platform dedicated to electric vehicles. (Reuters)

Daimler ^(history)

• Shortly after calling off a plan to develop self-driving features with BMW, Daimler announced a deal with chipmaker Nvidia to create an upgradeable driver assistance suite that will launch in 2024. The partners intend to develop SAE L2 and L3 technologies and a fully automated parking assistant. (Daimler)

FCA ^(history)

• Received a €6.3 billion credit facility, 80% backed by the Italian government, that will be spent on actions to improve the competitiveness of FCA’s plants in Italy. (FCA)
• Hailed the performance of its brands in US quality surveys. Dodge had the (joint) best initial quality (i.e. when the car is still nearly new) in the survey. (FCA)
• A judge ordered FCA CEO Manley and GM CEO Barra meet face-to-face to resolve a civil case brought by GM claiming damages because FCA’s relationship with union leaders inflated costs (through the pattern bargaining agreements including things that GM hated but FCA didn’t mind). (Reuters)

Ford ^(history)

• Unveiled the new F-150 full-size pickup which continues with an aluminium body on a steel frame. There are a host of new features, seemingly aimed at builders and explorers, including a ruler integrated into the plastic of the tailgate (might be useful, costs nothing to implement). The truck will also get Ford’s forthcoming hands-off, but eyes-on, driver assistance suite. Ford confirmed a (non plug-in) hybrid version but withheld details on the all-electric model until a later date. (Ford)
• Published its latest sustainability report and announced a goal for all Ford’s vehicles and operations to be carbon neutral by 2050. The goal does not imply all cars will have zero emissions (i.e. be fully electric or fuel cell), instead suggesting carbon capture as a possible strategy. Ford has stopped reporting any of the results from its internal employee satisfaction survey. (Ford)
• Thinks that collaboration will be necessary for manufacturers to offer a full range of electric vehicles. (Autocar)
• Recalling slightly under 3,000 SUVs in North America because the headrest on the seats could come loose in an accident  and a handful of large pickup trucks because one of the powertrain parts might not be structurally sound after a manufacturing process was missed. (Ford)
• Announced the creation of a new UK 5G network with Vodafone and other partners. Connected vehicle enthusiasts will be disappointed though; the purpose is to connect manufacturing machines rather than cars. (Vodafone)

Geely (includes Volvo) ^(history)

• Geely unveiled the Hao Yue large SUV. Available in 5 and 7 seat configurations, the car appears very similar to the Volvo XC90 with different sheet metal. (Geely)
• Volvo announced a deal with Waymo (Google) for L4 self-driving technologies, and that the two companies will partner on an electric taxi. (Volvo)

General Motors ^(history)

• Won a contract to supply the US army with new infantry vehicles that cost a cool $330,000 apiece. (GM)
• A judge ordered FCA CEO Manley and GM CEO Barra meet face-to-face to resolve a civil case brought by GM claiming damages because FCA’s relationship with union leaders inflated costs (through the pattern bargaining agreements including things that GM hated but FCA didn’t mind). (Reuters)

Hyundai / Kia ^(history)

• Hyundai-Kia and LG Chem will collectively fund promising battery start-ups. (Kia)
• Hyundai and LG Chem are reportedly contemplating a battery making JV in Indonesia. (Reuters)

Mazda

• Recalling around 24,000 Mazda 3 and CX-30 because the bolts that hold the braking system on may not have been tightened properly. (Mazda)

PSA ^(history)

• Opel will disband the national sales company in Bulgaria and use an importer instead. (PSA)
• Unveiled the new Mokka compact crossover. The line-up includes an all-electric version but with pricing not yet published it isn’t clear whether PSA intend to go head-to-head with similar forthcoming models from VW or the car will be sold selectively (e.g. management scheme). (PSA)
• Unveiled the new Citroën C4, which will come with a range of powertrain options including plug-in hybrid and all-electric. (Citroën)

Toyota ^(history)

• Recalling around 270,000 Prius in the USA because the car might overreact to a fault in the hybrid system and shut down the engine. (Toyota)
• Investing in automated forklift company Third Wave. (Toyota)
• Invested in cashless payments company Synqa Holdings. (Nikkei)

VW Group ^(history)

• Reportedly contemplating the re-acquisition of rental group Europcar, which VW sold in 2006. (FAZ)
• Bentley has cut spending on new combustion engine models, rather than affect plug-in hybrid and fully electric cars, the plans for which are “full steam ahead”. (Autocar)
• Thinks it will take until at least 2022 for car sales to recover. (Reuters)
• Unveiled a minor refresh of the VW Arteon, and a shooting brake version. (VW)

Other

• Greek firm Spyros Panopoulis Automotive is planning a new hypercar called Apeiron with a top speed of over 310 mph. Unusually for new sportscar entries, it will be powered by an internal combustion engine. (CarBuzz)
• Mahindra worries about new tariff barriers but thinks that sourcing to multiple suppliers to overcome trade problems could increase costs by 15% – 20%. (Economic Times of India)
• Aston Martin announced a £152 million rights issue. (AML)
• The CEO of Lordstown Motors says the first year’s production is sold out. (Yahoo)

News about other companies and trends

Economic / Political News

• European vehicle manufacturers trade body ACEA expects the passenger car market to drop (25)% in 2019 compared with the prior year. (ACEA)
• The UK trade body, the SMMT, worries that one in six car industry jobs (including dealers and servicing centres) could be lost through a combination of a post-coronavirus recession and an unhelpful outcome in the EU-UK trade talks. (BBC)
• The EU published provisional data on CO₂ emissions for passenger cars in 2019 showing average emissions of 122 g / km CO₂ – some way above the 95 g / km level that starts to phase in (through a complicated series of rules) this year. Data for vans was also published, showing some work left to do to close the gap to target. (EU)
  • Significance: Ad Punctum’s contention is that manufacturers have all the technology to meet 2020 and beyond targets, and the cost of that technology is lower than the fines they will have to pay for breaching the regulations. Therefore compliance makes business sense. Data from early in 2020 suggesting electric vehicle shares were climbing substantially, consistent with this hypothesis. The corollary is that 2019 represented something of a peak for legacy technology.

Suppliers

• Martinrea says it will still pay a divided, after agreeing with lenders that Q2 financial performance won’t be part of the calculations about its loan covenants. (Martinrea)
• Adient said that Yanfeng would pay a little bit less for the JV assets it was taking over, and the money would be paid a bit later too. (Adient)

Dealers

• UK online used car dealer Cazoo raised £25 million and says it is worth over $1 billion. (Cazoo)

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

• Chinese high end car rental company JF Chuxing raised $10 million. (China Money Network)

Driverless / Autonomy ^(history)

• As rumoured, Amazon acquired Zoox, suggesting that the firm will still create vehicles for moving people (just perhaps with packages in the back too). The value wasn’t disclosed. (Amazon)
• Didi Chuxing is aiming to have one million robotaxis in service by 2030. (Reuters)
• Oxbotica is developing AI that will create altered images from photographs taken by test vehicles, so that more variety can be tested, with the aim of accelerating testing times. (Autocar)
  • Significance: Whilst this solution seems neat, computers interpret photographs very differently to human eyes (they use data about the colour, brightness etc of the pixels) so however convincing observers might find the techniques, they may be unsuitable for recreating what a vehicle sensor set detects.
• DriveU, which develops communications networks for remote vehicle operation, raised $4 million. (DriveU)
• Lyft released a dataset of traffic movements around autonomous test vehicles, hoping to spur innovation in predicting the movement of fellow road users. (Lyft)
• Driver monitoring start-up ADAM CogTech raised $2 million. (CTech)
• Self-driving truck developer TuSimple reportedly hopes to raise $250 million. (TechCrunch)
• Volvo announced a deal with Waymo (Google) for L4 self-driving technologies, and that the two companies will partner on an electric taxi. (Volvo)

Electrification ^(history)

• Charger creator Trojan Energy raised £5 million in grants and new investment. (Charged EVs)

Other

• Cummins and NPROXX have formed a joint venture to make hydrogen tanks for truck trailers and rail carriages, anticipating a boom in demand for the gas. (Cummins)

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Making cars a little smarter; reading between the lines; and building cars for free.Please enjoy our auto industry and mobility briefing for 15^th June to 21^st June 2020. A PDF version can be found here.

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

• Running Up That Hill — Delphi and TomTom are experimenting with using map data to change a car’s engine settings in real time. Calibration engineers lovingly, and at great cost, already create an array of engine programs but they only cover discrete sets of conditions. Adding information about the journey makes engine mode changes based on prediction rather than reaction. Of course, the logic works for electric vehicles too and Delphi reckon all driving styles get a benefit. With fuel economy savings quoted at around 10%, and a renewed emphasis on the environment as emerge from our underground dwellings, it sounds like an easy win. Could solutions like be mandated in future, for the greater good?
• Don’t Let Me Get Me — FCA, GM and Ford declared that all their factories were back at work in the US after the coronavirus shutdown. But they used odd language. Instead of talking about reaching prior output levels, the press releases were stuffed with talk of pre-crisis operating patterns. But that just means when people turn up to work, doesn’t it, not how many vehicles they are actually building? Why declared victory if there is so much left to do?
• Sisters Are Doin’ It For Themselves — If you buy an electric version of the VW Golf, you can go to the factory and put it together. Well, not any of the important bits but you can stick the badge on the front. Here’s the best bit though: you’ll pay €215 for the privilege! Let’s have you put the wheels on too — must be worth €50 at least — and install the parcel shelf and trunk load floor (another €100?). As a rough rule of thumb, there is about €1,700 of labour cost in a family hatchback. The coronavirus crisis calls for out of the box thinking. Has VW worked out how many jobs the customer needs to pay to do themselves before the car costs nothing to build?

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 an agreement with German unions to encourage older staff to take voluntary redundancy and younger staff to retrain and do something different. Special pay-boosting entitlements for some workers (guaranteed extra hours) will be scaled back through a series of contractual changes. (BMW)
• In addition to permanent staff cuts, around 10,000 temporary production and contract engineering staff are also reportedly set to go. (Handelsblatt)
• Daimler and BMW decided not to deepen their partnership on next generation driver assistance systems after their experts jointly concluded that that had all done such a good job of developing systems before the partnership began that these amazing, yet totally different systems, would not benefit from being combined. (Daimler)
  • Significance: The decision seems odd in the context of an area where both firms are pouring hundreds of millions of research euros without clarity on customer reception, and therefore payback. The most logical explanation is that BMW and Daimler’s experts concluded L2+ / L3 systems have only limited commercial viability (because they will be so expensive that few users will take them) and so developing a more comprehensive technology set together was unlikely to payback.

Daimler ^(history)

• Created a framework for issuing green bonds, assuring investors that more than 50% of the money will be used for zero emission vehicles. (Daimler)
• Daimler and BMW decided not to deepen their partnership on next generation driver assistance systems after their experts jointly concluded that that had all done such a good job of developing systems before the partnership began that these amazing, yet totally different systems, would not benefit from being combined. (Daimler)

FCA ^(history)

• Plans for all US plants to be operating pre-coronavirus shift patterns from w/c 21^st June. (Detroit News)
  • Significance:  Ford, FCA and GM are all talking about “operating patterns” rather than production rate. It remains to be seen whether there is no real difference between the two, or if PR hungry executives are telling the media that things are back to normal just because the same number of human beings are making fewer vehicles.
• Recalling over 90,000 vehicles globally  to fix transmission problems. (FCA)

Ford ^(history)

• Rumours surfaced that the next generation Edge SUV is cancelled. Unions called for clarification. Ford’s vague answer aspired to continue in the segment, without committing to the Edge nameplate or the Canadian plant that currently produces it. (Detroit Free Press)
• Offered US office workers the chance to work from home full time until at least the end of 2020. (Detroit Free Press)
• Plans for all US plants to be operating pre-coronavirus shift patterns from w/c 21^st June. (Detroit News)
• Pushed back the unveiling of the new Bronco after it discovered the previous date coincided with the birthday of infamous Bronco owner O.J. Simpson, testing the limits of the any publicity is good publicity mantra. (Detroit News)
• Following the wave of “active” models seen across passenger car brands (where customers part with extra cash for plain plastic cladding and slight suspension changes), Ford has decided that the commercial vehicle market is ready for its own version. (Autocar)
• Will add hands-free (but not eyes-off) driving assistance on selected highways in North America. Ford plans to charge customers in two stages: there will be a “prep package” (the hardware) that customers need to specify at the time of purchase and then a second purchase for the software itself. (Ford)

Geely (includes Volvo) ^(history)

• Buying a stake of slightly mote than 15% in Chinese truck and bus maker Hualing Xingma. (Gasgoo)

General Motors ^(history)

• CEO Barra suggested that GM had made all the job cuts needed to survive a downturn. (Detroit Free Press)
• Announced US operations had returned to pre-coronavirus levels. Confusingly, only 90% of the hourly workforce are back at work. (Detroit News)
• Uses additive manufacturing (3D printing) to make up to 75% of the parts for early stage prototypes. (GM)

Hyundai / Kia ^(history)

• Despite difficulties brought on by coronavirus, Hyundai says 30,000 reservations have been made for the Indian market launch of the Creta. (Autocar)
• Launched a new app which contains car manuals. The clever bit is that, rather than having to look up tyre pressures in the index, drivers can simply point the smartphone camera at the area of interest and the app will identify relevant sections of the manual for them to read. Although this was possible before, the pain of setting it up meant Kia restricted the amount it was used. The firm now says it can roll out across carlines easily. (KIA)

Mazda

• Believes it will take a “long time” for pre-coronavirus crisis industry sales levels to return. (Mazda)
• Unveiled the new BT50 pickup truck, built using Isuzu underpinnings. (Mazda)

Nissan and Mitsubishi ^(history)

• Allies of Nissan’s COO are rumoured to be manoeuvring in an attempt to have him promoted to co-CEO. How such a change would promote stability at the company is anyone’s guess. (Reuters)

Renault ^(history)

• Stopped selling the value-engineered Captur crossover in India. High prices and cannibalisation from other models in Renault’s Indian range were blamed. (Autocar)
• Renault’s chairman denied that the company had any problem with the timing of EU emissions rules. (Reuters)
• Renault’s incoming CEO addressed shareholders (he hasn’t officially started work yet but the pay will presumably be sorted out later), saying he was looking forward to the challenge of turning the business around. Despite Renault’s recent restructuring announcements, he plans on revealing his own strategy at the end of the year. (Reuters)

Suzuki

• Urged Maruti-Suzuki suppliers to prepare contingency plans for a second wave of coronavirus (mainly by building more inventory) and apologised for the firm’s slow and inconsistent production since restarting in May. (Autocar)

Tata (includes JLR) ^(history)

• Reported financial results for the fiscal year ended 31^st March 2020. Wholes of 1.006 million units fell (23)% on a year over year basis, whilst revenue of 261,068 Cr INR (about $34.5 billion) dropped (14)% (of which JLR was £23 billion, about $28.7 billion). The before tax loss was (10,580) Cr INR (about $1.4 billion), but Tata Motors was declared “near breakeven” on an EBIT basis. JLR ‘s PBT was £(422) million (about $530 million). In response, both Tata Motors and JLR will go on a diet; in JLR’s case this is incremental to the already announced plan and will see a further £1.5 billion of cost actions and an axe being taken to (unspecified) parts of the product plan. JLR thinks that coronavirus cost the business £599 million and without it the brand would have made a full year profit. (Tata)
• The move to increase JLR’s cost savings target seems inevitable. Even excluding coronavirus the business was barely profitable, yet says cost actions have improved profit by £1 billion since 2018 (plus lower investment). (Tata) Part of the savings will come from further redundancies; (1,100) UK staff will go. (Reuters)
• Moody’s downgraded Tata Motors’s debt to B1 (deeper into junk territory). (Economic Times of India)

Tesla ^(history)

• Reportedly signed a lithium supply deal for up to 6,000 tones per year with Glencore. (Bloomberg)
• Firms that advise many shareholders recommended that they reject Tesla’s proposal to re-elect chairwoman Denholm, saying she was insufficiently independent from CEO Musk. (Reuters)
• Panasonic and Tesla expanded their long term supply agreements. (Reuters)
• A deal to buy a 2,100 acre site in Austin, USA suggests that Tesla may have made up its mind about the location of the factory for the Cybertruck. (Electrek)

Toyota ^(history)

• Will make its human body simulation tool (for crash and ergonomics) free for all users. Although it was previously openly available, there was a licence fee. (Toyota)
• Toyota and MIT are releasing a set of videos taken by cars developing self-driving technology, in the hope that it will spur development of object recognition. (Toyota)
• Invested in industrial engineering startup Drishti, which uses remote cameras and (ahem) artificial intelligence (definitely not human data labellers sitting in dark rooms) to conduct the sort of time and motion studies shopfloor workers often resent. (Toyota)
• Participated in a further fund raising round for AI company SLAMcore. (FINSMES)

VW Group ^(history)

• SEAT unveiled a refreshed Ateca mid-size SUV. (Autocar)
• Plans to scale down the Hannover, Germany, plant that builds commercial vehicles from around 15,000 employees to nearer 10,000. VW believes natural attrition will be sufficient. (Handelsblatt)
• Photographs sent to the Chinese government purported to show the production version of the ID4. (Autocar)
• Audi opened a new R&D centre in San Jose, USA, where staff will work on driver assistance systems. (TechCrunch)
• Agreed to invest an additional sum, up to $200 million, in solid state battery developer QuantumScape. VW previously put $100 million into the company. (VW)
• Inviting VW eGolf (the all-electric version) buyers to help build their car; they will be able to tell friends and family all about installing front and rear badges and the tail lights — and they will have paid €215 for the privilege. (VW)
• VW declared itself open to working with rivals on vehicle software. Although many executives might be interested in VW’s declarations of an open source approach, their technical teams may well be put off by VW’s intention to “define its core” themselves (see Daimler and BMW’s self-driving technology dissolution). (Reuters)
• Audi’s CEO took on a plethora of new roles: he will head the brand’s efforts in China and be responsible for engineering. To help, the brand has restructured the way product programs are delivered. The planning organisation will be separated from engineering. Audi announced a COO to help with the workload. There will also be a chief transition architect helping to manage the engineering side of things. (Audi)

Other

• Ssangyong has retained an agent to sell Mahindra’s stake to a partner with deeper pockets. (Reuters)
• BYD’s semiconductor unit raised $113 million — after recently taking in about $270 million. (Deal Street Asia)
• Electric vehicle developer Arrival unveiled a bus. Although no timing for launch was mentioned in the press release, there were some videos of prototype units driving on a test track. (Arrival)
• Aston Martin appointed a new CFO, who previously held the same position at JLR. (Reuters)
• McLaren is mulling a sale of part of the F1 team. (Sky News)

News about other companies and trends

Economic / Political News

• European passenger car sales in May of 1,444,173 units fell (57)% on a year-over-year basis. (ACEA)
• The UK government admitted that if talks haven’t made good progress by October, the chance of a UK-EU trade deal before the Brexit transition period expires are slim. (Reuters) The EU said it wanted a deal, but only if the UK was reasonable. (Reuters)

Dealers

• Chinese aftermarket parts marketplace CassTime raised $50 million. (Deal Street Asia)

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

• Multimodal app Splyt raised $19.5 million from investors including SoftBank. (SoftBank)
• Lyft said that by 2030, every car on its ride hailing platform will have zero tailpipe emissions. (Lyft)
• Hertz is no longer planning to issue new shares and instead hopes to raise a bankruptcy loan. (WSJ)

Driverless / Autonomy ^(history)

• The US government unveiled an initiative to collect testing data from companies developing self-driving vehicles. Critics said the data would be so thin as to be meaningless. (The Verge)
• Self-driving software firm AImotive raised $20 million, (VentureBeat)
• Toyota and MIT are releasing a set of videos taken by cars developing self-driving technology, in the hope that it will spur development of object recognition. (Toyota)
• Ford will add hands-free (but not eyes-off) driving assistance on selected highways in North America. Ford plans to charge customers in two stages: there will be a “prep package” (the hardware) that customers need to specify at the time of purchase and then a second purchase for the software itself. (Ford)
• Daimler and BMW decided not to deepen their partnership on next generation driver assistance systems after their experts jointly concluded that that had all done such a good job of developing systems before the partnership began that these amazing, yet totally different systems, would not benefit from being combined. (Daimler)

Electrification ^(history)

• Telecoms firm Telenor will offer Swedish customers charging bundled with their TV and broadband. (Charged EVs)
• Hyundai Mobis reckons it has cracked the problem that many electric cars have with the artificial sounds manufacturers fit them with to meet pedestrian safety laws: what sounds great in the studio is often distorted when played through a speaker mounted in the engine bay. Hyundai Mobis makes the front grille part of the speaker (a solution which is dependent to a degree on grille design), dramatically reducing distortion. (Hyundai Mobis)
• VW agreed to invest an additional sum, up to $200 million, in solid state battery developer QuantumScape. VW previously put $100 million into the company. (VW)

Connectivity

• Delphi and TomTom think that using mapping data to change a car’s engine settings in real time can improve fuel economy by 10%. Tests apparently showed that this was true across a range of driving styles. (Delphi)

Other

• Truckmaker Volvo Group plans to cut 4,100 staff jobs. (Volvo)
• Quantron plans to offer a fuel cell powered heavy truck in Europe from 2022 onwards. (Quantron)
• Bicycle rental firm Bird and Trailze launched a mapping service that plans optimum routes for bicycle and electric scooters. The company spies a gap in the market since current offerings are aimed at cars or pedestrians. (Bird)
• Electric motorcycle maker Alternet Systems (AYLI) raised $25 million. (AYLI)

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Tesla get outsmarted; data that isn’t all it’s cracked up to be; and VW’s managerial meltdown. Please enjoy our auto industry and mobility briefing for 8^th June to 14^th June 2020. A PDF version can be found here.

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

• Insane In The Brain – A Canadian garage says it has worked out how to overcome Tesla’s paid for upgrade programming. This is possible because Tesla sometimes installs the same standard of hardware, to reduce complexity, and then simply downrates the performance on entry level products. Tesla aren’t alone in this, traditional car manufacturers have done the same with engines for years – hence the thriving industry for replacing engine control chips. The problem for Tesla is that, if the claims are real, upgrades it tries to charge thousands for can be activated for free. Is modifying your car in this way the same (philosophically) as installing an aftermarket gear knob or are Tesla entitled to control the hardware?
• You Only Get What You Give – Daimler thinks that profits on services from in car transactions will rival those made from building the vehicles themselves. The only problem with that logic is that the revenues associated with hosting food and shopping smartphone apps are minuscule and, for instance, Apple don’t see a penny of Amazon’s gross sales. FCA’s deal with Otonomo to sell anonymised data (fairly inexpensively) is a more likely template for the way forward. How do carmakers keep convincing themselves that they have a way to make megabucks from in-vehicle data?
• Issues – All hell broke loose at VW Group, with CEO Diess being stripped of responsibility for the core brand and forced to apologise to the supervisory board. He had accused board members of leaking confidential information and (according to leakers) some of them were so incensed that they demanded his immediate resignation. With a wounded CEO, chances of reform at the firm appear to have dropped significantly. Can VW shake out of the self-inflicted stupor or does a period of treading water – at precisely the wrong time — lie ahead?

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)

• BMW iVentures invested in Prometheus, a company developing ways to make fossil fuels via energy intensive chemical reactions, rather than sucking it out of the ground. (BMW)

Daimler ^(history)

• Daimler hopes to make as much money from offering in vehicle services as from selling the cars themselves. The main target appears to be taking a cut from in-vehicle transactions, such as buying food. (Autocar)
  • Significance: Since smartphone apps have already established norms in this area – developers paying $100 or less annually to have their app available, with zero cut of the revenue for high transaction sites such as Amazon. Why would purchases made inside the car be treated completely differently?

FCA ^(history)

• Recalling almost 28,000 vehicles because the 12 volt battery could catch fire. (FCA)
• EU antitrust regulators are taking a closer look at PSA and FCA’s proposed merger, with dominance in commercial vehicles flagged as a concern. (Reuters)

Ford ^(history)

• Ford’s CEO and COO reiterated that there were big headcount reductions to come in South America and Europe saying that as a result of the pandemic “everything’s on the table”. (Ford)
• Gave a detailed presentation focused on explaining Ford Credit to investors. (Ford)
• In the announcement confirming the VW and Ford joint vehicle programs, Ford indicated that it will build the electric vehicle engineered from VW’s MEB platform, rather than sourcing to VW. The two companies believe that the shared 1T van, pickup truck and small van will yield 8 million units over their lifetimes. (Ford)
• Recalling 2.15 million US vehicles for faulty door latches that may have been incorrectly repaired. (Reuters)

Geely (includes Volvo) ^(history)

• Geely’s Xiaolinggou unit, which rents out electrified vehicles, raised $97 million. (Deal Street Asia)

General Motors ^(history)

• CEO Barra says coronavirus has helped GM make decisions more quickly than before (perhaps because line managers can’t interfere as much). (Detroit Free Press)

Honda ^(history)

• Honda was hit by a cyber attack that compromised IT systems and affected some non-Japanese plants. (BBC)
• Created a joint venture in China called Hynex to offer connected car services. (Honda)
• There was an explosion at a Honda plant in Japan. (Reuters)

Hyundai / Kia ^(history)

• Kia’s European boss says that coronavirus lockdown measures have made it easier for the brand to meet its EU CO₂ targets. (Autocar)
• Believes that fuel cells will be commercially viable by 2025 and disagrees with Daimler’s strategy to direct fuel cells only at heavy trucks (although Hyundai sees potential in that area) because the company thinks that only passenger cars have sufficient scale to lower costs for all users. Although the ultimate target is cost parity with battery electric systems, Hyundai reckons that demand will blossom because of stricter environmental regulations. (Bloomberg)
• Invested in hydrogen infrastructure company Hydrogenius LOHC Technologies. (H2 View)
• Suspended production of the diesel Genesis GV80 SUV because of engine vibrations that arise when the cars spend too long idling. (Yonhap) Parts supply problems then stopped production of the model completely. (Yonhap)

Nissan and Mitsubishi ^(history)

• Nissan’s CEO says the brand never considered leaving Europe as part of its restructuring and that changing the cross shareholding structure between Nissan and Renault was a low priority at the moment. (Les Echos)
• Mitsubishi is part of a consortium of 30 Japanese companies working on a “virtual power plant” (grid management by feeding in stored electricity). (Mitsubishi)
• Nissan sources suggested there was a trail of correspondence detailing a 12 month exercise leading up to former chairman Carlos Ghosn’s ouster and arrest for mis-reporting compensation and other indiscretions. (Bloomberg)

PSA ^(history)

• Won’t open the Ellesmere Port factory in the UK (which produces the Astra) until at least 1^st September, but hopes to relocate some workers to the Luton, UK, factory to help build more vans. (Liverpool Echo) The company is planning something similar in France, with 500 Polish workers told to hotfoot it over to the Hordain plant and help out on the production line. (France Info)
• Citroën thinks that, ideally, car brands should offer between five and ten different vehicles. At the lower end, the brand thinks there are too many portfolio gaps to be considered a mass-market brand, whilst with too many, complexity and investment start to hurt efficiency. The official stance is that the brand is open-minded about replacing the C1 but executive comments suggest the space will be left to the all-electric Ami. (Autocar)
• Attempts by Opel’s HR team to broach the subject of pension changes in Germany were slapped down by unions. It is unlikely that managers will be deterred for long as they already suggest survival is at stake. (Handelsblatt)
• A PSA executive suggested that brands within the group were allowed to chart their own destiny in terms of emissions compliance closure — suggesting the some next generation cars might offer an all-electric version, whilst some may build no more than a hybrid. (Autocar)        
  • Significance: Given PSA’s much-vaunted commonality strategy, and the work involved in engineering three different powertrain technologies into a vehicle platform, it seems unlikely that the brands have true independence, and more that this is a way of balancing the product engineering dilemma around electric vehicles by only going all-in on one design but having others on a shortcut route to launch if needed.
• EU antitrust regulators are taking a closer look at PSA and FCA’s proposed merger, with dominance in commercial vehicles flagged as a concern. (Reuters)

Renault ^(history)

• Renault’s chairman said he isn’t interested in the French state increasing its shareholding in the firm. (Reuters)

Tata (includes JLR) ^(history)

• JLR is looking to make every step of the sales process contactless and sees opportunity to use online services to reduce some of the time, even if the whole purchase experience doesn’t become virtual (for instance, signing finance paperwork over the internet rather than wading through reams of paper at the dealership. (Autocar)
• Tata is buying out its joint venture partner in the JTSV division that creates souped-up versions of Tata’s Indian passenger cars. (Tata)

Tesla ^(history)

• A rocketing share price saw Tesla’s value exceed Toyota’s (and everyone else). The jump followed a “leaked” email (which CEO Musk almost immediately confirmed as genuine) saying the Semi truck was about to go into full production. The share value has since receded slightly. (Reuters)
• Internal emails showed CEO Musk fretting about quality and output on the Model Y however he was keen to stress that he thinks such problems always occur with new product. (Business Insider)
  • Significance: With the Model Y in its sixth month of launch, there isn’t much time left before it becomes difficult to explain launch issues away as normal business.
• A Canadian garage says it has hacked Tesla’s upgradable hardware (where Tesla installs more capable batteries or motors as standard but downrates performance for cheaper models unless the owner pays extra). It is now offering to unlock the same capabilities for reduced prices. (Electrek)
  • Significance: It remains to be seen if Tesla subsequently undoes the upgrades. If not, it undermines the company’s upgrade strategy. If it does, it raises questions about the company’s right to block modifications made by owners.

VW Group ^(history)

• Forced CEO Diess to give a public apology to the supervisory board after he insinuated in meetings with senior managers that board members had leaked sensitive information. (VW) Board members, or those close to them, reacted by leaking the story of the fiery board meeting leading to the apology where several of them called for Diess’s immediate sacking. To show Diess whose boss, they stripped him of the CEO position for the core VW cars brand (he remains group CEO), handing the reigns to the brand’s COO. (Handelsblatt)
  • Significance: Diess appears to be on borrowed time, with the main arguments for keeping him in role apparently being the difficulty economic environment and the extra turbulence that would be caused on top of the troublesome Golf and ID3 launches. It looks as though in just two years, the hard-charging Diess has got from a man with a mission to transform the business to a dead man walking.
• Announced that it had concluded an investigation into a racist social media advert, and that whilst VW agrees it is racist, says it wasn’t on purpose. In future, the brand will review new videos more thoroughly before launch. (VW)
• VW’s procurement chief, the former CEO of ZF, left the company at short notice. (VW)
• In the announcement confirming the VW and Ford joint vehicle programs, Ford indicated that it will build the electric vehicle engineered from VW’s MEB platform, rather than sourcing to VW. The two companies believe that the shared 1T van, pickup truck and small van will yield 8 million units over their lifetimes. (Ford)

Other

• Mahindra & Mahindra is prepared to sell its stake in Ssangyong, if it can find a buyer. (Autocar)
• Nio raised $430 million via a rights issue. The money will go towards funding Nio’s shares of the costs associated with its recent deal to set up Nio China and relocate its headquarters. (Motley Fool)
• Evergrande bought the remaining shares in NEVS. Whatever you make of the deal, you have to give credit to whoever in Evergrande decided to call their purchase vehicle “Mini Minor”. (Caixin)
• Nikola’s CEO said the company is in talks with three potential partners about contract manufacturing its forthcoming Badger pickup. (Reuters)
• Australian start-up H2X plans to launch a fuel cell powered SUV called Snowy in 2022. (The Driven)

News about other companies and trends

Economic / Political News

• Spain launched a scrappage incentive scheme. (Reuters)

Suppliers

• Faurecia says it has been arranging for banks to give financing to its suppliers so that they can restructure and continue in business.  The company believes it will take until 2023 for industry to reach pre-crisis levels. Although Faurecia expects some consolidation, it isn’t making M&A a priority but pointed to some acquisitions it had made during the credit crunch at the behest of carmakers. (Market Screener)
• A restoration company, Craft Customs, says that all our leather steering wheels are going to suffer from being lathered in hand sanitiser. Good job we aren’t driving much then. (Craft Customs)
• Continental’s CEO reportedly told staff there was a high probability that the firm would have to resort to involuntary redundancies to save money. (Automotive News)
• Aptiv raised up to $2.2 billion via a share issue. (Aptiv)

Dealers

• Chinese online automotive sales platform Bitauto agreed terms for a Tencent-led takeover. (Bitauto)
• Spare parts wholesaler Mancando raised $57 million. (Deal Street Asia)
• Used car website Vroom’s IPO went great guns, almost doubling on their opening day. (Reuters)

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

• Californian authorities now consider ride hailing drivers as employees, much to Uber’s and Lyft’s dismay. (Reuters)
• Uber’s plan to buy Grubhub were scuppered by an alternative bid from Just Eat. (Reuters)
• Despite entering bankruptcy protection, Hertz might issue $1 billion of fresh shares. (Reuters)

Electrification ^(history)

• BYD is reportedly considering building a UK battery factory to supply JLR, amongst others. (China Daily)

Connectivity

• Upstream Security, which already counts Renault, Nissan, Mitsubishi and the Volvo Group amongst its backers, raised an additional $30 million. (Upstream)
• Connected vehicle data company Viaduct raised $11 million. (Viaduct)
• Otonomo will start selling vehicle data sourced from FCA. In addition to providing the information to third parties (for a fee), Otonomo takes on the role of anonymising the information to soothe any data privacy concerns the issuing OEM might have. (Otonomo)
• Navmatic, a developer of precision navigation equipment, raised $4 million in a round led by Lear. (Benzinga)

Other

• Air taxi firm Lilium raised another $35 million. (TechCrunch)

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Self-driving cars that could crash too much; dealers that want more money; and Dyson’s late analysis. Please enjoy our auto industry and mobility briefing for 1^st June to 7^th June 2020. A PDF version can be found here.

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

• Never Too Much — A study by a US insurance think tank reckons that self-driving cars won’t save as many lives as many had hoped. They challenge the oft-repeated mantra that 90% of accidents could be avoided because they say that unforced errors are only responsible for 30% of crashes. There is a caveat though: in most other crashes, human error is still to blame via speeding and illegal manoeuvres. They conclude that autonomous vehicle developers need to make their products drive conservatively than people do — but doesn’t everyone already know that?
• Gimme Some More — Indian dealers reckon that margins are too thin and OEMs should top them up to around 7%. If they don’t, the dealer association fears many outfits will go out of business. But, with the much-predicted demise of the traditional dealer (even before coronavirus), is that so much of a worry?
• Too Little, Too Late — Dyson revealed yet more details about the company’s abandoned electric car. The videos and blog glory in the no-compromises design details the team found when planning their massively expensive SUV. The project’s demise was blamed on dieselgate “suddenly” transforming the competitive marketplace and shrinking the sales potential. But, since the project was abandoned in late 2019 and dieselgate happened in late 2015 (and isn’t responsible for the surge in electric vehicles anyway), why did it take so long to realise the car would lose money?

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)

• Unveiled the new 4 Series. (BMW)

FCA ^(history)

• Running a series of tests with hybrid electric vehicles that only operate in electric mode within city limits. BMW has long ago committed to operating such a mode. (FCA)
• Robot making arm Comau will be spun off after PSA and FCA merge. (Reuters)

Geely (includes Volvo) ^(history)

• Kandi Technologies reported Q1 2020 revenue of $6.4 million, down (65)% and a net loss of $(1.6) million. (Kandi)

General Motors ^(history)

• Will run many US plants during the traditional early July shutdown period to recover lost production. (Detroit News)
• CEO Barra says GM will emerge from coronavirus with a permanently lower cost base. (Reuters)
• GM’s Cruise self-driving unit wrote to employees of rival Zoox offering them new jobs and expressing the view that if Amazon’s much-rumoured takeover of Zoox goes ahead, their bonuses will be reduced. (Reuters)

Nissan and Mitsubishi ^(history)

• A Nissan representative in Lebanon got himself in hot water after he said in an interview that IMF aid for Lebanon’s economy was conditional upon Carlos Ghosn’s extradition to Japan. After denying the comments, he suffered the indignity of having journalists publish an audio recording. (Arab News)
• Recalling 1.9 million cars to fix problems with the hood latch. (Detroit News)

PSA ^(history)

• Relations between managers and German labour representatives at Opel appear to have hit a rough patch with unions complaining that the announcement about the closure of the transmission plant and forge in Russelsheim was presented to the workforce as though they had agreed to it. (FAZ)
• Announced a joint venture with Punch Powertrain to develop and manufacture dual clutch transmissions. Punch will contribute facilities and PSA will put up some cash. PSA said it was part of a plan for powertrain to remain vertically integrated. (PSA)

Renault ^(history)

• The French government finally put pen to paper on Renault’s €5 billion credit guarantee. (Renault)

Tata (includes JLR) ^(history)

• JLR agreed a new £560 million credit line. (The Guardian)

Tesla ^(history)

• Developing a 12-seat minibus for use in tunnels dug by CEO Musk’s pet project The Boring Company, according to  officials are considering commissioning a tunnel for their local airport. (OCR)

Toyota ^(history)

• Toyota reportedly expects to exceed prior year production volumes (on a monthly basis) in North America by September. (Reuters)
• Toyota formed a joint venture with several Chinese OEMs including FAW, Dongfeng, BAIC and GAC) to promote fuel cells for commercial vehicles. (Toyota)

VW Group ^(history)

• CEO Diess reportedly told senior managers that the company was about to undertake a cost cutting drive, but did not provide much specific information, beyond an intent to reduce non-production material costs by 20%. He also apparently confirmed that not all brands will be profitable in 2020 — something that could already be inferred from the group’s financial guidance. (Manager Magazin)
• Lifted a production freeze on the next generation Golf after solving a software problem affecting the emergency calling function. About 30,000 cars will be recalled to fix the error. (Handelsblatt)
• Lamborghini’s CEO seems comfortable that sales are recovering, despite job cuts at competitors McLaren and Aston Martin and sister company Bentley. (Yahoo)
• Bentley finally said goodbye to the V8. (Bentley) It will soon be doing the same to around 1,000 employees — about 25% of the workforce at the brand’s Crewe headquarters. The Bentley battery electric vehicle will be delayed by a year, to 2026. (ITV)

Other

• Aston Martin is laying off up to 500 people in a move that will cost £12 million. The firm expects to save £18 million per year through the move, plus other spending reductions. (AML) InvestIndustrial, one of the main shareholders when the firm went public, cut its share in Aston Martin to 5%. (Reuters)
• Mahindra Electric believes that the Indian market for electric vehicles will take off in 2023. (Autocar)
• Fuel cell powered truck maker Nikola had its stock market debut. (Forbes) The company’s recent purchase of hydrogen production equipment suggests each filling station will cost more than $6 million. (Nikola)
• Dyson published more details (including a video) about its abandoned electric car effort. Curiously, the company appears to blame VW’s dieselgate scandal for causing traditional OEMs to pile into the electric vehicle market, and “suddenly” diluting the market share the firm had hoped to achieve. (Dyson)
  • Significance: Since dieselgate started in 2015, and (in any case) the increase in electric vehicles has far more to do with the success of Tesla and regulations in the EU and China, it isn’t clear why Dyson didn’t realise the scale of competition until 2019 — a lack of competitive analysis perhaps?

News about other companies and trends

Economic / Political News

• US light vehicle industry of 12.21 million units fell (30)% versus prior year. (Wards)
• German passenger car registrations in May of 168,148 units dropped (50)% versus prior year. (KBA)
• France had 96,310 passenger car registrations in May, down (50%) on a year-over-year basis. (CCFA)
• Spanish registrations of 34,337 passenger cars in May were (73)% worse than prior year. (ANFAC)
• May Italian registrations of 99,711 passenger cars were (50)% down on prior year. (UNRAE)
• UK registrations of 20,247 new passenger cars in May fell (89)% on a year-over-year basis. (SMMT)
• Germany launched an automotive stimulus package consisting of across the board sales tax cuts (3%) and increased incentives for electric vehicles (an extra €3,000 off the list price). There is also money set aside to fund research into new technologies and to provide charging infrastructure — including charging points at all filling stations. (FAZ)

Suppliers

• The boss of Endurance Technologies is on the hunt for acquisitions. (Autocar)
• Meritor aims to sack about 8% of the salaried workforce. (Meritor)
• Wheel maker Borbet terminated its collective bargaining agreements in Germany, saying the coronavirus put the company in dire straits. Unions said they would fight it. (IG Metall)

Dealers

• UK dealer Vertu Motors said initial sales were promising and that, despite plans by rivals to downsize (Lookers is shedding 1,500 jobs), the company thinks scale is the way forward.  (Reuters)
• The body representing Indian dealers claims its members are given too little profit by the OEMs (the article contains a detailed table), and that margin levels need to double to make their businesses viable (presumably coming at the expense of OEM profits, rather than transaction prices). (Autocar)
• Indian online car sales portal CarTrade is reportedly raising $43 million. (Deal Street Asia)
• Online used car seller Vroom is hoping for a valuation of $2.3 billion when it completes its IPO. (Reuters)

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

• Singaporean short term car rental service Smove shut up shop. (Deal Street Asia)
• Didi Chuxing’s boss said taxi journeys in China during May were at the same level as the prior year. Ride hailing firms normally like to tout double digit quarter-over-quarter growth rates. (Deal Street Asia)

Driverless / Autonomy ^(history)

• A study by a US insurance think tank concluded that fully autonomous cars would only reduce accidents by around 30%, rather than the 90% improvement many advocates have touted. However, the headline assumed that such vehicles will not drive more conservatively than humans today, with a further 40% of accidents attributed to speeding or illegal manoeuvres; conditions that self-driving vehicles are explicitly being trained to ignore (in addition to the compounding benefits of having more cars on the road driving within sensible limits). (IIHS)

Electrification ^(history)

• Mahindra Electric believes that the Indian market for electric vehicles will take off in 2023. (Autocar)
• Nikola’s recent purchase of hydrogen production equipment suggests each filling station will cost more than $6 million. (Nikola)

Connectivity

• Mitsubishi Corporation and NTT now own 30% of mapping company HERE, joining existing shareholders Audi, Bosch, Continental, BMW, Pioneer, Intel and Mercedes-Benz.  (HERE)

Other

• Electric scooter firm Superpedestrian raised $15 million and acquired bicycle rental service Zagster. (PE Wire)
• Aviation firm Kitty Hawk canned its flying car project, preferring to concentrate on larger vehicles. (Kitty Hawk)
• Autonomous robot firm Otto Motors (a unit of Clearpath Robotics) raised $29 million. (Otto Motors)
• Brazilian bicycle rental firm Tembici raised $47 million. (Reuters)
• Autonomous robot developer Locus Robotics raised over $40 million. (Locus)

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Simulations that are too perfect; style need not cost the earth; and Nissan’s promise to do better.Please enjoy our auto industry and mobility briefing for 26^th May to 31^st May 2020. A PDF version can be found here.

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

• Paranoid Android — GM’s Cruise self-driving division says that it has been doing fine during quarantine, thanks to the powerful simulations used to develop artificial intelligence. But, when you read the fine print, there is plenty that they have not got right (yet). The to-do list includes simulating the interference that makes lidar and radar signals far fuzzier than the lovely videos we are used to watching. If you can’t properly model the partial images a car gets in reality, why do people portray simulation as a serious alternative to testing? And if GM can’t get it right yet, should you believe anyone else has?
• Fashion — VW unveiled the budget focused Nivus crossover. I don’t know the car is everyone’s cup of tea but most would probably agree that it is better looking than the supposedly more upmarket T-Roc. This choice, that value does not have to mean sacrificing style, follows the blueprint set by Renault with the Kaptur (which looks like a Captur, but uses cheaper bits). Do purveyors of slab-sided, yawn inducing value cars need to hurry back to the drawing board?
• Simple Things — Nissan set out its recovery plan. It follows a simple formula: cut capacity; reduce product spending; grow share; make money. But is it really that simple? Many car companies have promised to do more with less, only to end up with… less with less. Fortunately, much of the time, industry volume grows so that underperforming share is offset. Will Nissan be so fortunate, or will we see another plan in 2022?

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)

• In talks with German unions to put together a package that, BMW hopes, will help trim the headcount by 5,000 people. (Bloomberg)
• Unveiled a facelift for the BMW 5 Series and 6 Series GT, plus the Mini Countryman.

Daimler ^(history)

• Hot on the heels of the recently agreed fuel cell partnership between Daimler Trucks and Volvo trucks, Daimler signed a similar agreement with Rolls-Royce (the aero engine maker) for generator type systems. This is a new JV, although the Daimler-Volvo unit will be involved because it will produce the fuel cells. (Daimler)

FCA ^(history)

• Breathed a sigh of relief as Moody’s left FCA’s rating unchanged. (FCA)

Ford ^(history)

• Executives cryptically suggested that Ford and Rivian were working on a joint program. (Green Car Reports)

Geely (includes Volvo) ^(history)

• Geely raised about $840 million through a rights issue, selling about 6.1% of the firm (after enlargement). (Geely)

General Motors ^(history)

• Said that production restart had gone smoothly and production was now being increased by bringing in extra shifts. Despite the upbeat tone, even at the higher level, production will be below pre-coronavirus levels. (GM)
• GM’s Cruise self-driving unit outlined the difficulty with simulating sensors so that AI can learn to drive in a virtual environment. The team’s to do list suggest that whilst modelling real world interference is something they are concerned about, it isn’t yet solved. (GM)

Nissan and Mitsubishi ^(history)

• Nissan reported 2019/20 fiscal year revenue of 9.9 trillion JPY (about $92 billion), down (15)% versus prior year. A net loss of (671) billion JPY (about $(6) billion) compared to a profit of 319 billion JPY in 2018/19. Nissan’s consolidated wholesales of 3.35 million units fell (16)% on a year-over-year basis, a weaker performance than overall retail sales of 4.9 million which fell (11)%. Nissan impaired assets by 522 billion JPY (about $5 billion). The firm hopes that global industry will only decrease (15)% – (20)% in the next financial year. (Nissan)
• Nissan unveiled its recovery plan, much of which had leaked in the weeks leading up to the announcement. Global capacity will be cut to 6 million units by 2023, and the straight time capacity will be 5.4 million — closer to Nissan’s real sales rate than the circa 7 million units of capacity in place today. Nissan expects that plant utilisation will be at least 80%. Cuts will be across the board, with only two plants scheduled to shut — Indonesia (already announced) and Barcelona, Spain. The brand will cull poor-performing products, with the value Datsun brand and smaller cars declared non-core. (Nissan)
  • Significance: Nissan’s plan contains two colossal assumptions: firstly, that industry will recover in time to support the brand’s volume ambitions; secondly, that despite reducing the portfolio, the market share will either grow or hold steady (depending on the market).
• The Renault-Nissan-Mitsubishi announced a (previously advertised) plan to simplify product engineering and reduce costs. The main elements are that the different brands will share much of the bodywork, not simply the underpinning components, and are likely to be made in the same factories. A secret formula will be used to decide which company has the lion’s share of work for each product. There is a structure for technologies too. The partners believe that they could save 40% of the investment costs for a new model. (Mitsubishi)
  • Significance: Whilst the claimed savings are substantial, and the template for this engineering relationship already exists at PSA (albeit with all brands owned by the same company), there is something of a disconnect. The 40% figure is in line with PSA’s supposed savings by integrating Opel with the Peugeot and Citroën brands, but Renault and Nissan already claim lots of this through their fabled alliance synergies.
• Settled a case Nissan brought against an Indian regional government for failing to pay the level of incentives agreed when Nissan set up a plant there. Indications were that Nissan received $185 million – $240 million, around one third of the amount claimed. (Reuters)

PSA ^(history)

• Apparently poised to confirm that Opel’s Russelsheim plant will soon be allocated a new vehicle. It isn’t all good news though: the site can reportedly expect redundancies in the powertrain manufacturing area and some insiders believe the product will simply offset the seemingly never-ending decline in Insignia volumes. (Handelsblatt)

Renault ^(history)

• Renault unveiled a new plant aimed at saving €2 billion over the next three years, cutting about 15,000 employees of which 4,600 heads will be lost in France. On the production side, capacity will be cut by about (20)%; planned capacity increases won’t go ahead; gearbox manufacturing will probably be hit and several French plants face periods of consultation and “reflection”. Taking a leaf out of PSA’s book, Renault seems minded to gut factories without shutting the gates, rather than closing the whole thing (although a couple of smaller plants are likely to go). By 2026, all Renault vehicles are planned to be on platforms with greater than 600,000 units per year.
• The French government said the state backed mega loan for Renault will not be signed off until the company satisfies labour unions that job cuts are needed — and takes a dim view of factory closures. (Reuters)
• Renault expects battery costs to fall below $100 / kWh, thanks to sharing Nissan and Mitsubishi. (Pres p.25)

Tesla ^(history)

• CEO Musk hit the first of a series of stock option milestones, netting him a cool $800 million — if he decides to cash in immediately. (The Verge)

VW Group ^(history)

• Sources suggest that CEO Diess is on thin ice with his board and fighting off criticism from employee representatives and state shareholders may distract from a post-coronavirus recovery. (FAZ)
• Audi is betting on a in-house effort named Artemis to accelerate the brand’s efforts to bring technologically sophisticated electric vehicles to market, seeking a “highly efficient” electric car by 2024, and a network of services to offer alongside the vehicle. (Audi) Supposedly the aim is to out-Tesla Tesla, after internal VW group reviews have concluded that current electric products are competitive but missing that certain something. (Manager Magazin)
• Announced that it had given board approval to three (previously announced) joint vehicle programs with Ford, the milestone indicates that the vehicles in question are commencing their (capital intensive) industrialisation. (VW)
• Scania is cutting 5,000 jobs, with about 1,000 of these coming at head office. (Scania)
• Launched a (previously announced) joint venture with consultancy CapGemini, called XL2, that will provide software engineering expertise for Audi. (Audi)
• Audi launched a new initiative, starting in France, that allows buyers to make an online reservation for any new or used vehicle in dealer stock for €100. (Audi)
• Confirming earlier rumours, VW took a 26% stake in battery maker Guoxuan (Gotion) for €1.1 billion. At the same time, VW announced a deal to buy a 50% share in carmaker JAC and increase VW’s control of the existing JV with JAC for electric vehicles to 75% (from 50%). The JAC investment is about €1 billion. (VW)
• VW unveiled the Nivus, a small crossover aimed at value conscious buyers, mainly in Latin America. (Autocar)
  • Significance: As with Renault’s emerging market Kaptur, VW has decided that a low cost proposition shouldn’t mean compromising on styling. Brands planning on selling boring, or tired, vehicle designs may need to change course (and some non-value vehicle programs may be getting nervous too).

Other

• Rivian appears to be planning a foray into vehicle insurance, according to job postings. (TechCrunch)
• BYD’s semiconductor business raised $265 million ahead of a separate listing. (Deal Street Asia)

News about other companies and trends

Economic / Political News

• France unveiled an €8 billion stimulus scheme for the automotive industry. It involves increased incentives to switch to electric vehicles and lowers the qualification criteria for an existing scheme that supported the scrappage of older, higher polluting, vehicles. President Emmanuel Macron wants his country to be the leading producer of electric cars — hoping for one million per year to be built by 2025. Someone familiar with VW’s plans, and Tesla’s designs for a German factory, should probably tell him that he might not be setting his sights high enough. (BBC)
• European manufacturers body ACEA suggested that the EU might want to stop issuing new emissions rules (which govern pollution levels), because rules forcing lower CO₂ / better fuel economy would improve fleet emissions as a by-product. (ACEA)

Suppliers

• Autoliv reckons that production has recovered well in China, but that Europe is far less healthy with the firm calling the restart “low and unstable”. It has already laid of 15% of global production staff. (Autoliv)
• ZF has completed the acquisition of WABCO. (ZF) The champagne will probably remain on ice however, because the company is reportedly planning to cut 15,000 jobs worldwide. (Reuters)
• Continental and Pioneer have teamed up to offer infotainment tailored to Asian markets. (Continental)

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

• Ride hailing firm Ola acquired electric scooter firm Etergo, seemingly to boost corporate knowledge and technology ahead of launching a range of electric two wheelers in 2021. (Reuters)
• Uber says that if it had to classify drivers in California as employees, it would probably sack about 75% of them because so few currently work a 40-hour week. (Uber)
• Uber was accused of being tin-eared to the woes of bicycle lovers everywhere after tens of thousands of bikes owned by Uber’s Jump bicycle rental brand were scrapped because new owner Lime regarded them as technically inferior and surplus to requirements. Uber said “recycling” the bikes was easier than giving them away. (The Verge)
• Mobile home rental firm Cabana raised $3.5 million, with some of the money coming from the (independently wealthy) head of Ford’s software arm. (FINSMES)
• BlaBlaCar will integrate electric scooter rental service Voi on its platform. (TechCrunch)
• Advantage Rent A Car filed for Chapter 11 bankruptcy. (Auto Rental International)

Driverless / Autonomy ^(history)

• Didi Chuxing raised over $500 million to spend on developing self-driving cars. (Reuters)
• Self-driving car developer Zoox will reportedly be sold to Amazon, with the two parties said to be in detailed talks. The firm is notable because it has set out to create its own vehicle, in addition to the self-driving hardware and software and would possible form a useful alternative to the larger vehicles Amazon plans to buy from Rivian. (WSJ)
• GM’s Cruise self-driving unit outlined the difficulty with simulating sensors so that AI can learn to drive in a virtual environment. The team’s to do list suggest that whilst modelling real world interference is something they are concerned about, it isn’t yet solved. (GM)

Electrification ^(history)

• Battery supplier CATL plans to develop battery swapping services. (Reuters)
• Air Liquide hopes that a new type of filling station, which can pump hydrogen more quickly, will encourage take-up of fuel cell cars. (Green Car Reports)
• Nio says that it has undertaken 500,000 battery swaps since launch. Take-up varies; less than half of cars sold have ever visited such a facility. (Inside EVs)
• Renault expects battery costs to fall below $100 / kWh, thanks to sharing Nissan and Mitsubishi. (Pres p.25)

Other

• Singaporean electric scooter rental firm Beam raised $26 million. (TechCrunch)

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