Auto Industry Briefing — week ending 23rd May 2021
BMW’s sustainable future; Stellantis looks to the future; and has Ford stolen Tesla’s thunder? Please enjoy our auto industry and mobility briefing for 17th May to 23rd May 2021. A PDF version can be found here.
- Earth Song — BMW is starting to use tyres that use raw materials from a variety of sustainable sources (beyond the rubber). The company clearly believes that certified sustainability will be a differentiator in future. Will we soon be talking about the impact on the leather and plastics industries of a shift to sustainable vegetable-based interiors that rivals the ongoing worries about job losses from switching between ICE and EV?
- The Plan — Stellantis and Foxconn are forming a joint venture to create in-car technologies. Automaker with bags of scale meets contract manufacturer hungry or patrons beyond Apple. The joint venture will bid on (and presumably win) contracts for Stellantis vehicles but also look for business from other OEMs. Could this be a big step towards an industry standard part- owned by Stellantis?
- Paying The Cost To Be The Boss — Ford unveiled the all-electric F-150. Although to European eyes it might seem too big and the antithesis of environmental friendliness, this is perhaps the most significant electric vehicle launch since the Tesla Model Y. Hyperbole perhaps? Why would I say something so controversial? Simply because this is the truck, which if it delivers, will be the first serious entry to beat a Tesla product (the Cybertruck) to market. Tesla’s market value is built on pummelling traditional players into the ground. Will markets react favourably to F-150 eating Cybertruck’s lunch?
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
- Expects to be fined a lower amount by the EU in a case related to how German OEMs shared ideas for new emission technologies. Instead of the original €1.4 billion provision, BMW expects to pay around €400 million and says, that it won’t appeal the smaller penalty, if issued as the company currently expects. (BMW)
- BMW trumpeted its decision to use Pirelli tyres made from a variety of sustainable raw materials. BMW claims to be the first manufacturer in the World to do so. (BMW)
- Along with plans for battery raw materials and other moves, BMW signals a belief that sourcing will be a key differentiator in years to come (requiring baby steps now).
- Splitting its financial services, Daimler Mobility, into two units in line with the spin-off of the trucks division. It isn’t clear how the investments in mobility services and other emerging industries will be split. (Daimler)
- Developing hydrogen infrastructure for trucks in partnership with Shell. (Daimler)
- The Trucks division hosted an investor day to lay out its ambitions as a separate entity. (Daimler)
- Announced a joint venture with SK Innovation called BlueOvalSK to build batteries. CEO Farley suggested this was the start of a far-reaching plan to “vertically integrate key capabilities”. Ford expects the battery joint venture to provide at least 25% of global needs by 2030. (Ford)
- Unveiled the all-electric version of the F-150 pickup truck. Mid-priced models will have a MSRP of $53,000. The model is clearly differentiated by an always-on light bar that runs across the front grille. Unfortunately the company hasn’t taken the opportunity to create a Knight Rider style fade — which is what Elon Musk would do. (Ford)
- CEO Farley says that solid state batteries are needed for all retail sales in richer markets to shift to electric models. He is less clear on a transition in markets such as Thailand and Australia. He says that Ford’s market research says customers are far more interested in the all-electric F-150 in the Tesla Cybertruck. The vehicle’s conservative styling is because potential buyers told Ford that they don’t want “spaceships”. He thinks that, with improvements through learning real world driving habits range can be improved by 10 miles per year. When asked about how long car companies have a duty to keep computing current, Farley said the question was “important” and then didn’t answer it. He did say that he thinks cars will become physically upgradable in future. (The Verge)
- Despite contrary findings from competitors, Ford believes that only 10% of UK buyers are interested in all-electric vehicles for their next car. (BBC)
- Honda’s head executive in North America is also now in charge of electric vehicles. (Honda)
- Absorbing Honda Kaihatsu, which provides non production services, such as canteens, to Honda. (Honda)
Mazda
- Discontinuing the Mazda 6 (large car) and CX-3 (small SUV) in the USA, the two slowest selling models after the MX-5 sportscar. (Mazda)
Nissan and Mitsubishi (history)
- Former CEO Ghosn lost a legal case for wrongful dismissal and was ordered to pay €5 million to Nissan. Ghosn saus that he will appeal (The Guardian)
Stellantis (formed via the merger of PSA and FCA)
- Forming a 50/50 joint venture with Foxconn called Mobile Drive to develop infotainment systems. The new company will bid competitively for Stellantis contracts (it clearly expects to win some of them) and will also sell to other automakers. The vision is for the car to ultimately become a “third living space”. (Stellantis)
- Tata reported full year (to 31st March) financial results. Revenue of 250 Cr INR (about $34 billion) fell (4)% year-over-year, more than explained by JLR where revenue fell (14)% to £19.7 billion. There was a loss before tax of (10,474) Cr INR (about $(1.4) billion). JLR was responsible for £(861) million of the total loss, although the brand preferred to concentrate on a profit before exceptional items figure. JLR now says it can breakeven below 400,000 units annually and still plans to reduce capacity by 25% between 2024 and 2027. (Tata)
- A Norwegian court awarded damages of around $16,000 each to owners of older Model S cars after the company slowed down charging speeds via a software update. (The Verge)
- Elon Musk watchers got excited over a trip to the UK, speculating that he might be scouting for potential factory sites (surely something that Musk does himself rather than leaving it to underlings). (BBC) Musk said he was interested in building a production site in Russia. (Economic Times of India)
- Reportedly suffering a parts shortage at the Fremont, USA, factory that has seen between 10,000 and 20,000 partially completed vehicles stockpiled whilst they await delivery. (Electrek)
- Lexus has now sold 2 million electrified vehicles, which in the brand’s definition includes hybrids. (Lexus)
- A Toyota plant had its IT system hacked. Despite losing sensitive data, the company said that production systems weren’t affected. (Nikkei)
- Audi is working on a modular charging station which incorporates second-life batteries to enable charging at faster speeds than the local grid can provide, and contains a waiting area on the second level. (Audi)
- Lamborghini said it will be spending €1.5 billion over the next four years on transitioning to electric powertrains. The brand will wave goodbye to purely internal combustion engine power in 2024, cars sold in the mean time will be a “celebration” of the powertrain. (Lamborghini)
- CEO Diess said fuel cell cars were “proven not to be” a solution to emissions free mobility, calling ongoing debate over the matter “bogus”. (Automotive News)
Other
- Canoo announced a Q1 2021 loss of $(97) million, almost four times the loss in the same period of 2020. The company is also under investigation by the US stock market regulator. It tried to pick up investors spirits by launching $100 reservations for its “Lifestyle” vehicle. (Canoo)
- Fisker is making an all-electric popemobile based on the Ocean SUV. (The Verge)
- Nio signed a supply extension with JAC that runs to 2024. As a part of the deal, annual capacity will be expanded to 240,000 units. (Nio)
- Huawei reckons it can sell 300,000 electric vehicles in 2022 from a standing start. (China Money Network)
- Changan and Huawei are set to launch a new all-electric vehicle brand but have yet to reveal the name, instead referring to it as AB Brand. (China Money Network)
- Revived brand Radford will be basing its new sports car on Lotus underpinnings. (Autocar)
News about other companies and trends
Economic / Political News
- The UK government was criticised by parliamentary politicians for failing to do enough to plan for a phase out of internal combustion engine sales by 2035. (Autocar)
- European passenger car registrations during April of 1.04 million rose 256% year-over-year. (ACEA)
Suppliers
- Eberspaceher is renaming its exhaust division “Purem”, potentially as a precursor to a spin-off. (Autocar)
- SK Innovation says it has an order book of $115 billion of batteries, amounting to 1,000 GWh (making it $115 oer kWh). (ET News)
Ride-Hailing, Car Sharing & Rental (history)
- GoJek is merging with Tokopedia to create a firm spanning ride hailing to financial services. (Deal Street Asia)
- Car rental firm Virtuo raised $96 million. (TechCrunch)
Driverless / Autonomy (history)
- Waymo is reportedly looking to raise $4 billion. (Bloomberg)
- Machine vision develop SiLC raised $17 million. (SiLC)
- Chinese self-driving firm Maxieye raised 150 million CNY. (China Money Network)
- Charging firm DST raised $100 million in a round led by Ikea’s holding company. (Deal Street Asia)
- TomTom says it can use mapping to predict the range of an EV to single digit percent accuracy and is selling the technology to OEMs. (TomTom)
- Battery management software firm Twaice raised $26 million. (FINSMES)
- EV infrastructure software firm WeaveGrid raised $15 million. (WeaveGrid)
- Charging company Magenta EV raised $15 million. (Economic Times of India)
- Ford’s research suggests that only 10% of UK buyers are interested in all-electric vehicles for their next car. (BBC) Responses to a study by electricity provider Ofgem put the number at 25% of households. (The Guardian)
Other
- US workers at a Volvo Trucks plant rejected a new contract that was agreed with unions. The union promised that they wouldn’t immediately go on strike. (Volvo Trucks)
- Car insurance marketplace Jerry raised $28 million. (TechCrunch)
- UK insurance startup Wrisk raised £5 million. (FINSMES)
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Auto Industry Briefing — week ending 16th May 2021
Tough words from Tavares; asset light dealers making waves; and Ford gives electric cars fast names. Please enjoy our auto industry and mobility briefing for 10th May to 16th May 2021. A PDF version can be found here.
- Bossy — Stellantis CEO Tavares says that he is giving each brand 10 years to prove itself, after which underperforming marques could face the chop. This is coming from a man who has openly spoken about retiring before then, and where powerful shareholders whose names adorn some of those vehicles (think Peugeot) sit on the board. Is this anything more than hot air?
- A New Flame — UK used car dealer Cazoo has sold 25,000 cars in the last 18 months. The company does most of its selling via the internet, with 17 sites and a fleet of 180 delivery vehicles. On a per site basis, it is nearing Tesla for throughput, pointing to the power of online sales and slick financing deals. Can others afford to stay in business if they don’t start to shift towards this model?
- Fast Car — Ford is calling the all-electric F-150 the Lightning. This is a nameplate that was used for the fastest version of the pickup until the mid-2000s. Following on from the Mustang Mach E, it seems as though Ford is trying to use sporty sounding names for electric products, despite the vehicle designs being at the boxier end of segmentation. Is A Ford Focus Thunderbird on the horizon?
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
- CEO Källenius says that there needs to be an “honest conversation” about the impact of a shift to electric vehicles on jobs because electric powertrains require fewer labour hours than internal combustion engines. (Reuters)
- Unveiled the Concept EQT van which previews the Citan’s replacement. (Daimler)
- Daimler Trucks and Volvo believe they can reduce fuel cell costs by a factor of five or six by 2027. (Reuters)
- Mahindra reckons that when it was working on joint venture programs in India with Ford, the cost targets were 40% lower than Ford was achieving alone because Ford “simply cannot think or perform as frugally”. (Autocar)
- Will brand over the air updates as “Ford Power-Up” and announced a deeper integration with Amazon’s Alexa personal assistant. Ford hopes to use the artificial intelligence behind Alexa to offer customised skills for its customers, although it isn’t clear how exclusivity will be preserved. (Ford)
- The all-electric F-150 will be badged “Lightning”, last used for souped-up versions of the truck in the early 2000s. Following on from Mustang Mach E, the decision indicates Ford will be using sporty branding for all-electric models, even if the cars themselves are more towards the utilitarian end of bodystyle segmentation. (Ford)
- Despite plans to reduce the UK dealer footprint and wider concerns about the growth of online sales, Ford’s wholly-owned dealer group is still acquiring sites. (Motor Trader)
Geely (includes Volvo) (history)
- Volvo confirmed that it is exploring plans to list at the end of the year. (Volvo)
- A union at the Silao, Mexico, plant was accused of tampering with ballot papers on changes to union rules. US trade representatives believe there may be a case to be answered under USMCA (NAFTA’s replacement). (Detroit News)
- Says that “most” all-electric cars which have the battery pack replaced receive a refurbished unit, rather than all new parts. GM has will recycle in partnership with Li-Cycle from the end of 2021 onwards, using a process GM hopes will reduce greenhouse emissions by 30%. (GM)
- The UAW union is spoiling for a fight over organising rights at the new battery factories GM is building in partnership with LG. (Detroit Free Press)
- Reported full year financial results for the year ended March 2021. Automotive revenue of 8.6 trillion JPY (about $78 billion) fell (14)% versus prior year. Automotive operating profit of 90 billion JPY (about $830 million) dropped (40)%. Honda hopes that unit sales will grow about 10% this year. (Honda)
- Intends to invest $7.4 billion in the USA by 2025, a figure that appears to include the recent majority shareholding in robot firm Boston Dynamics. (Hyundai)
Nissan and Mitsubishi (history)
- Reported full year financial results for the year ended March 2021. Revenue of 7.9 trillion JPY (about $72 billion) fell (20)% whilst an operating loss of (151) billion JPY was almost three times higher than the prior year. Nissan said its turnaround plan was gaining traction and it will hopefully be around breakeven this year. (Nissan)
- Renault’s CEO has asked engineers to re-investigate the potential for battery swapping. (Autocar)
Stellantis (formed via the merger of PSA and FCA)
- CEO Tavares is giving each Stellantis brand 10 years to prove its worth. (Detroit News)
- Significance: Despite the tough talk, it appears unlikely that the Peugeot or Fiat brands would be retired, whatever their performance.
- Tavares worries that cars will only be for the rich if electric powertrain is forced upon customers whilst the technology is immature, driving prices up. (Telegraph)
- Cutting a shift at the Bellevidere, USA, plant due to slow sales of the Jeep Cherokee. (Detroit News)
Subaru
- Reported full year financial results for the year ended March 2021. Revenue of 2.8 trillion JPY (about $26 billion) dropped (15)% whilst operating profit of 102 billion JPY (about $940 million) was less than half the prior year level. Subaru expects to be back to pre-coronavirus levels this year. (Subaru)
- Detailed the progress on its turnaround plan. Subaru says it will improve profits through better plan product architecture and growing US market share to 5%. (Subaru)
- In an odd volte-face, Elon Musk said Tesla would no longer accept Bitcoin as payment for cars. Although it wasn’t clear if anyone has been using the facility, it was seen as a lack of confidence in the cryptocurrency which dropped in value as a result. Musk attributed the move to concerns about the environmental impact of creating the currency and running the blockchain but since this is a longstanding issue it isn’t clear why Tesla agreed in the first place. (Autocar)
- Reported full year financial results for the year ended March 2021. Revenue of 27.2 trillion JPY (about $250 billion) fell (9)% whilst operating income of 2.2 trillion JPY (about $20 billion) fell (8)%. (Toyota)
- Because the catalytic converter design in older Toyota models is particularly easy to steal, the company is paying for tens of thousands of UK cars to have their catalytic converters marked so that police will know if units found in suspicious circumstances have been nicked. The problem is so bad that Toyota had to restart production of obsolete parts to provide replacements. Whoever makes the second most easy to steal catalytic converters might need to step up their game. (Toyota)
- Now expects to have sold 2 million BEV and fuel cell vehicles by 2030, although Toyota thinks that they will still be outsold 3:1 by PHEV and hybrid models. (Toyota)
- Porsche plans to ramp up its bespoke workload by launching an extended range of options within the online configurator and resurrecting the “Sonderwunsch” program for one-off cars. (Porsche) There is also a plan to offer more extensive upgrade options for older cars. (Porsche)
- Another week, another Hermès-clad bespoke car. After Rolls-Royce, it was Bugatti’s turn to unveil an interior laden with expensive French leather. Is the brand now too commonplace? (Bugatti)
- Dissolving a legal entity structure where several German plants are separate from the rest of the company . Through the change (which will take until 2027), working agreements will be synchronised. (VW)
- Reportedly plans a 20 GWh solid state battery plant in Salzgitter, Germany. (QuantumScape)
- Porsche expects that most of its workforce will spend about half their time working remotely and plans to furnish them with large screens and other accessories to help them work comfortably from home. Accordingly, the company is planning to reduce office capacity. (Handelsblatt)
Other
- Gordon Murray announced a plan to develop a flexible electric vehicle platform for B-sized (small) vehicles that will underpin a series of designs for established brands. After earlier plans for small vehicles showed promise but didn’t reach production, the business model is being changed to reduce upfront fees. (Autocar)
- Fisker and Foxconn said that the “Project PEAR” vehicle they are jointly developing will have a price tag under $30,000. The launch date has dropped back to Q4 2023. (Autocar)
- BYD is spinning off its chips business. (Nikkei)
- Human Horizons says that its cars sits in a new category of vehicles called Techluxe. The term might not catch on though, and Human Horizons have trademarked it. (Human Horizons)
News about other companies and trends
Suppliers
- Kongsberg announced Q1 2021 revenue of €303 million and adjusted EBIT of €20 million. (Kongsberg) The firm held an investor day. (Kongsberg)
- Randon reported Q1 2021 revenue of 2.8 billion BRL (about $530 million) and net income of 134 million BRL (about $25 million). (Randon)
Dealers
- Cazoo celebrated the sale of its 25,000th car, 18 months after launching. Working from 17 sites, supported by 180 delivery vans, the current run rate appears higher than the number of locations would explain if operating under the conventional model. (Motor Trader)
- Indian used car website CarTrade reportedly plans to raise $272 million in an IPO. (Tech In Asia)
- China Automotive Systems reported Q1 2021 revenues of $130 million and net income of $3 million. (CAAS)
Driverless / Autonomy (history)
- WeRide said it has raised lots more money. (Deal Street Asia)
- Lidar company Innovusion raised $64 million. (TechCrunch)
- Argo (owned by VW and Ford) says that its in-house lidar unit has a range of 400 metres. (VW)
- A Waymo customer recorded a slapstick moment where a vehicle became stuck in the face of confusing traffic cones and then drove away as operators tried to restore service, before being stuck again. (The Verge)
Connectivity
- Italian authorities fined Google €100 million for denying Enel’s charging app access to the Android Auto app store. (TechCrunch)
Other
- The former head of the UAW received 21 months of jail time for corruption. (Detroit News)
- Scooter rental firm Bird is listing through a merger with a special purpose vehicle that values it at $2.3 billion. (Bird)
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