Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news

Auto Industry Briefing — week ending 28th April 2019

Mr Musk’s driverless dog and pony show; dirty passengers make dirty vehicles; and why did Ford just spend $500 million on Rivian? Please enjoy our auto industry and mobility briefing for 22nd April to 28th April 2019. A PDF version can be found here.

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

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)

  • Will purchase cobalt for electric vehicle batteries direct from mines because of concerns that unscrupulous middlemen might be selling material mined with child labour. (Reuters)

Daimler (history)

  • Released financial results for Q1 2019. Revenue of €39.7 billion was very slightly lower than prior year but profit of €2.8 billion was (15)% worse. There was a cashflow hit of €(2) billion relating to problems with the GLE, Nissan built vehicles and commercial vehicles — Daimler says these will unwind over an extended period. The firm still hopes to hit full year financial targets. (Daimler)
  • Pulling the Smart brand from North America at the end of 2019 because it doesn’t see much demand for very small cars in the market, especially not expensive all-electric ones. (CNBC)

Ford (history)

  • Reported Q1 2019 financial results. Automotive revenues of $32.7 billion dropped (4.8)% from prior year yet EBIT of $2 billion was 14% better. Ford’s mobility division lost close to $(300) million in the quarter. (Ford)
  • On the earnings call, Ford executives said that they expect a further $3 billion of special items charges in the remainder of the year related to restructuring actions that haven’t yet been made public, some of which could relate to South America where CEO Hackett said further action was planned. When asked about long term profit targets for the region he declined to answer. (Ford)
  • Invested $500 million in Rivian and announced that a new all-electric vehicle will be developed using Rivian’s all-electric rolling chassis / skateboard (but it won’t be the all-electric version of the F-150 pick-up). Ford’s de facto COO will join Rivian’s board. (Ford)
    • Significance: Questions abound as to what this means for Ford’s electric vehicle strategy. Paying $500 million to access Rivian’s technology (plus presumably downstream licencing fees) is about the same as the development cost for a new platform, which is what Ford is effectively buying — albeit with reduced time to market. Why has Ford taken this direction when it has the fabled Team Edison? Ford’s announcements imply an all-electric SUV positioned between the Mach 1 and the F-150 in size — is this the most cost-effective way of making that vehicle?
  • Ford’s deal to invest in Rivian reportedly came together in only eight weeks, seemingly after talks between the start-up and GM had fallen through. If true, that is a very short space of time for a deal of this type and size. (CNBC)
  • Announced that US authorities have launched a criminal investigation into Ford’s emissions certification, following on from the company’s admission earlier this year that some irregularities had been identified. (Reuters)
  • Plans for 40% of Kuga registrations in Europe to be electrified, but won’t be drawn on a split between 48V and PHEV sales. (Automotive News)

Geely (includes Volvo) (history)

  • Volvo reported Q1 2019 revenue of 62.9 billion SEK (about $6.6 billion), up 10.7% on prior year and adjusted EBIT of 2.9 billion SEK (about $305 million), down (19.3)%. Cash spending on research and development jumped by 45%, about a quarter of which related to work for Polestar. (Volvo)
  • Proton’s CEO says over 85% of the brand’s dealers are profitable, thanks to the recent Geely-sponsored product offensive. The firm also announced $455 million in funding from China Construction Bank. (China Daily)

General Motors (history)

  • Adding a second shift at the Bowling Green, USA, plant to produce the next generation Corvette. (GM)
  • Cadillac plans to offer additional features for the Super Cruise driver assistance system via over the air updates, starting in 2020. (The Verge)

Honda (history)

  • Produced 5,337,621 vehicles in the fiscal year to March 2019, up 1% versus 2017/18. (Honda)

Hyundai / Kia (history)

  • Kia announced Q1 2019 revenue of 12.4 trillion KRW (about $10.7 billion), (1)% worse than prior year. Operating profit of 594.1 billion KRW (about $510 million) was almost double Q1 2018. (KIA)
  • Hyundai’s sales in Q1 2019 were 24.0 trillion KRW (about $20.7 billion), up 7% on a year-over-year basis, with Hyundai assigning almost all the improvement to better mix. Operating income of 825 billion KRW (about $710 million) rose 21% YoY. (Hyundai)
  • Hyundai invested $5 million in audio personalisation firm Audioburst. (Audioburst)
  • Kia executives said that whilst the option of a light pick-up truck based on the forthcoming Hyundai Santa Cruz remains, the brand is not actively pursuing it, seemingly wanting to see how Hyundai’s version fares in the market first. (The Drive)

Mazda

  • Sold 391,012 vehicles in Q1 2019, a (12)% fall versus prior year. (Mazda)

Nissan (includes Mitsubishi) (history)

  • After denying newspaper reports of an output cut for the remainder of 2019, Nissan released a profit warning for the fiscal year ended March 2019. Although this was mainly blamed on increased operating expenses, the statement alluded to sales headwinds resulting from the Ghosn scandal. (Nissan)
  • Announced a series of senior executive changes. (Nissan)
  • Reportedly continuing to rebuff Renault’s attempts to engineer a full merger, or something that looks very similar to it, on the grounds that Renault would have the upper hand. (Reuters)
  • Mitsubishi produced 1,441,227 vehicles in the fiscal year ended March 2019, 13% up on prior year. (Mitsubishi)

PSA (includes Opel/Vauxhall) (history)

  • Reported Q1 2019 automotive revenue of €14.2 billion, down (1.8)% on prior year (PSA only reports profits every six months). Improvements in product mix and pricing, were more than offset by reductions in sales and negative exchange — despite PSA increasing dealer inventory. (PSA)
  • Announced a new engineering leadership team. (PSA)
  • The unanticipated success in signing up German engineers for early retirement is reportedly calling into question the entire premise of the Segula engineering centre transfer. Potentially the French outsourcing firm will achieve only one quarter of the headcount target. (Handelsblatt)

Renault (history)

  • Reported Q1 2019 automotive revenue of €12.5 billion, down (4.8)% on prior year (Renault only reports profits every six months). Renault blamed falling sales and exchange rates. (Renault)
  • Says that electric vehicle sales are “already quite profitable”, depending on the country and vehicle. Executives believe that if the Renault group can capture around 29% market share in Russia (as planned), then the market will be “very profitable”. Renault has also been reducing inventory levels at European dealers. (Seeking Alpha)
  • There is “no question” that Renault will meet European fleet CO2 targets and avoid paying fines. (Seeking Alpha)
  • Unveiled a set of minor updates to the commercial vehicle line-up, mainly powertrain changes. Renault also previewed the next generation Kangoo small van. (Renault)
  • Continues to explore ways to strengthen ties with Nissan, with the latest idea reportedly being a joint holding company. Unfortunately, it seems that Nissan aren’t much interested. (Reuters)

Suzuki

  • Following Suzuki’s commitment to end diesel production, Maruti Suzuki said the fuel type will no longer be offered in India after April 2020. (Times of India)
  • Produced 855,380 units in Q1 2019, a drop of (4.7)% from prior year. In the fiscal year to March 2019, Suzuki sold 3,327,174 vehicles, up 3.2%. (Suzuki)

Tata (includes JLR) (history)

  • JLR is reportedly interested in private car hire firm Addison Lee (along with other, un-named carmakers). The likely price tag is in the £300 million-range. (Sunday Telegraph)
  • Exploring ways to pay drivers with vouchers redeemable for coffee and parking if they agree to share data about driving habits and road conditions. The vouchers would be stored as a cryptocurrency. (JLR)
  • Tata says it is no longer cost effective to develop diesel engines for small vehicles in India because the technology to comply with new emissions rules will make the vehicle too expensive for consumers. (The Economic Times)

Tesla (history)

  • Held an investor day focused on the self-driving hardware and software Tesla has been developing. Tesla has developed new hardware with impressive power consumption and cost performance BUT… the hardware is dedicated to a (neural net based) self-driving software architecture that hasn’t yet proved itself. CEO Musk tried to bat away concerns over missing lidar sensors (which the chipset CANNOT accommodate) calling the technology “a fool’s errand”. Tesla explained the way in which training data harvested from the fleet is used to build understanding of safe driving techniques and then said it would all be used to build a robotaxi business. (Tesla)
    • Significance: Such was the scope of material covered, that the session deserves a dedicated de-brief. In short, by presenting to financial analysts, Tesla escaped the scrutiny of peer review and was able to portray several well-established academic concepts as near proprietary innovations. Whilst the hardware performance and cost appears impressive, it is a one-way bet on a software solution that has not yet proved itself. For all Tesla’s talk of the strength in fleet learning, charts of geographical mileage show it is painfully concentrated in only a few locations, diminishing the ability to learn everywhere and observe all the corner cases Tesla base their fleet learning argument upon. The research behind the ride hailing business were painfully weak with Musk explaining them with comments such as “we just randomly said, okay maybe a dollar” and liability for accidents would “probably” lie with Tesla. Musk’s timeline of regulatory approval during 2020 appears optimistic given that the team openly admitted numerous problems had yet to be solved, for instance that they “haven’t gone after snow yet”. On top of this, Tesla’s understanding of safety critical redundancy does not match Ad Punctum’s. Tesla appear to have provided duplication to protect for random component failure, but the system looks vulnerable to systemic problems that affect multiple sensors or processing hardware in the same way, at the same time.
  • At the investor day, Musk said that a next generation chipset for self-driving was already halfway developed and mentioned a mysterious supercomputer called Dojo several times, on each occasion implying it was a slip of the tongue and he had already said too much. (Tesla)
  • Released financial results for Q1 2019. Automotive revenue of $3.7 billion was up 36% on a year-over-year basis but down (41)% versus prior quarter. Tesla recorded a $(645) million loss before tax and used up over $(1.5) billion of cash, but said the rest of 2019 should be better. (Tesla)
  • On the earnings call, CEO Musk said there was “merit” in raising capital. He revealed that Tesla intends to create an insurance product that will launch soon. He also believes that the low deliveries for Models S and X in Q1 were a blip and demand will return to around 100,000 units per year. Musk admitted that the approach in Q1 of batch building cars by region was “insane”, but didn’t explain why the company had decided to do it that way. (Seeking Alpha)
  • Musk reached agreement with the SEC over the type of comments he needs to have vetted before publishing, but a judge’s approval is needed before it comes into force. (NYT)
  • Continued to tinker with the Model S and Model X line-up, offering an increase to the maximum battery range and restoring entry-level products that had only recently been cut. (Tesla)
    • Significance: The product announcements appear designed to shore up demand for Tesla’s ageing large cars by improving the competitive positioning and lowering prices. However, Tesla’s rate of change is seemingly at odds with established wisdom about the time customers take to arrive at final purchase decisions — how are they supposed to know what to buy when Tesla seemingly changes line-up on a monthly basis?

Toyota (history)

  • Sold 10,602,559 vehicles in the fiscal year to March 2019, down (1.5)% on prior year. (Toyota)
  • Abandoned a plan to install vehicle-to-everything communication capability on cars sold in the USA from 2021 onwards, blaming lack of commitment from other carmakers and unclear government rules. (Reuters)
  • Working with Maxar and NTT to develop high definition maps from satellite imagery. (Toyota)

VW Group (history)

  • Shortages of batteries have reportedly forced Audi to cut full year production plans for the e-tron by about 20% — to around 45,000 units. (Brussels Times)
  • Lost a court battle that will limit the rate at which the Moia ride hailing division can expand the fleet size. (Golem)
  • Has been running the numbers for cradle-to-grave CO2 emissions to compare fossil fuel powered vehicles with battery electric versions. The conclusion is that electric cars are already responsible for fewer emissions but have a far worse footprint in the production stage. VW says there are steps which will dramatically improve this. (VW)
  • Media reports suggested that VW initially expects to lose €3,000 on every ID all-electric car sold, with breakeven only coming in around 2025. (Auto Motor Und Sport)

Other

  • Subaru produced 226,906 vehicles globally during Q1 2019, a drop of (11.8)% on prior year. (Subaru)
  • Lucid Motors announced the current CTO as CEO after the incumbent decided to retire. (Lucid)
  • Chinese fuel cell vehicle start-up Grove will use FEV and Hofer to help develop its cars. (Autocar)
  • Canoo (formerly Evelozcity) is reportedly aiming to raise $200 million. (TechCrunch)
  • Russian officials are planning to have a convertible derivative of the Aurus limousine on sale by 2021. (TASS)
  • BYD is building a new factory with capacity for 400,000 electric vehicles annually in Changzhou, China. (Xinhua)
  • Sono Motors has enlisted NEVS to contract manufacture the Sion solar power augmented car in Sweden. Sono is planning a 260,000 unit lifetime run with an annual capacity for 43,000 vehicles, which the firm says will retail for €25,500 (or €16,000 if you want to lease the battery). Almost 10,000 deposits of €500 have been taken. (Sono Motors)

News about other companies and trends

Suppliers

  • Autoliv reported Q1 2019 revenue of $2.2 billion and operating income of $173 million. (Autoliv)
  • Continental reported preliminary Q1 2019 revenue of €11 billion and adjusted EBIT of €884 million. The IPO of the powertrain division, which will be called Vitesco Technologies, will take place during or after 2020 (market conditions permitting). (Continental)
  • Panasonic battery plans in Japan
  • Nidec reported results for the fiscal year to March 2019. Revenue was 1.5 trillion yen (about $13.5 billion) and profit before tax was 139 billion yen (about $1.2 billion). (Nidec)
  • Umicore said profit and revenue growth would be worse than previously hoped due to slow uptake of electric vehicles (for which Umircore supplies raw materials). (Reuters)
  • Allison Transmission reported Q1 2019 sales of $675 million. (Allison) The firm announced deals to acquire Vantage Power and the electric vehicle systems division of AxleTech. (Allison)
  • Lear reported Q1 2019 revenue of $5.2 billion and adjusted net income of $253 million. (Lear)
  • Goodyear saw revenue of $3.6 billion and a net loss of $(61) million in the first quarter of 2019. (Goodyear)
  • Michelin announced Q1 2019 revenue of €5.8 billion. (Michelin)
  • Grammer appointed a new CEO. (Grammer)

Ride-Hailing, Car Sharing & Rental (history)

  • Ride hailing service Ola is reportedly planning to launch a luxury car sharing service. (Autocar)
  • PayPal invested $500 million in Uber ahead of the ride hailing network’s IPO. Uber also revealed a loss of somewhere in the region of $(1) billion in the first quarter (Uber isn’t sure yet). (Uber)
  • Car sharing provider Getaround acquired European rival Drivy. (Getaround)
  • Premium ride hailing firm Wheely raised $15 million. (FINSMES)

Driverless / Autonomy (history)

  • Waymo announced a site had been chosen for a facility to fit self-driving equipment to cars. The firm will rent space from American Axle in Detroit. (Waymo)
  • Lyft believes, that despite advances in autonomy, more drivers will be required in ten years than are currently using the network. (Business Insider)
  • Patents for a vehicle cooling system filed by Apple suggest that the company continues to work on vehicle technology beyond self-driving hardware. (Autocar)
  • Nvidia said that Tesla’s new driver assistance hardware shouldn’t be compared to Nvidia’s Xavier processor, because the latter was for driver assistance only, and that the Pegasus hardware is a better comparator (with higher computing power than Tesla’s offering). In a way this reinforces Tesla’s claims of leadership on hardware performance in terms of cost and power consumption because Pegasus is a far more expensive and power-hungry system. (Nvidia)
  • Academic researchers found that, via a neural network, camera data could create 3D views of the surrounding areas in a way that mimics lidar. This supports, but does not confirm, Tesla’s hypothesis that the lidar unit is not required. In addition to there being a healthy gap in accuracy between lidar and the best-trained camera-based system the researchers could concot, the paper didn’t explore accuracy over longer distances (50m+) or in difficult weather conditions. (Cornell)
  • Nikon will manufacture lidar units for Velodyne. (Velodyne)
  • Tesla CEO Elon Musk dismissed lidar as a “fool’s errand” and high definition maps as “too brittle” during a presentation of self-driving technology to investors. His primary objection to lidar appears to be that it operates in the same part of the spectrum as cameras already do. (Tesla)

Electrification (history)

  • Bosch will make fuel cells using technology licensed from Powercell Sweden. (Autocar)
  • Panasonic says it wouldn’t be a big deal to convert a Japanese factory from making 18650 format cells (as used in Tesla Model S and X) to producing 2170 cells instead (as used in Model 3). (Reuters)
  • Ford invested $500 million in Rivian and announced that a new all-electric vehicle will be developed using Rivian’s all-electric rolling chassis / skateboard (but it won’t be the all-electric version of the F-150 pick-up). Ford’s de facto COO will join Rivian’s board. (Ford)
  • VW has been running the numbers for cradle-to-grave CO2 emissions to compare fossil fuel powered vehicles with battery electric versions. The conclusion is that electric cars are already responsible for fewer emissions but have a far worse footprint in the production stage. VW says there are steps which will dramatically improve this. (VW)

Connectivity

  • AWS will host connected vehicle services for Ford. (Ford)
  • A hacker said that lazy password setting by account holders using iTrack and ProTrack fleet management services allowed him access to functionality that would have turned off the engines of connected vehicles, if he had been so-minded. (Motherboard)
    • Significance: Although automakers are working on their own cybersecutiry protocols, this story flags two key issues: (1) Unless OEMs change their thinking considerably, it will still be possible to fit hardwired devices in the aftermarket that create new vulnerabilities; (2) the issue here was weak password setting by users, something that has occurred in numerous non-automotive settings and will prove somewhat difficult to overcome.
  • Toyota is working with Maxar and NTT to develop high definition maps from satellite imagery. (Toyota)

Other

  • Lime was embarrassed by hackers re-programming scooters to issue rude greetings messages. (Gizmodo)
  • Electric motorcycle maker Zero Motorcycles raised $25 million. (Zero)
  • Bike taxi service Rapido raised $11 million. (Deal Street Asia)
  • Short term motorbike rental start-up Bounce raised $3 million. (LiveMint)
  • Car and bike pooling startup Quick Ride raised $14 million. (Inc42)
  • Fleet management software provider KeepTruckin raised $149 million. (TechCrunch)
  • London’s public transport operator recorded 14,862 incidents in 2018 where a bus or train has been left in an unhygienic condition by passengers and needs to be cleaned before it can return to service. (BBC)
    • Significance: Companies planning self-driving services may wish to take note. If an efficient system for detecting unclear vehicles, and swiftly dealing with them, isn’t in place, your business could go down the tubes. The vast number of occurrences on a public transport system indicates passengers have no shame.

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Auto Industry Briefing — week ending 21st April 2019

Improving fuel economy without touching the engine; Uber’s expensive self-driving car technology; and is Audi’s thinking more mature than its rivals? Please enjoy our auto industry and mobility briefing for 15th April to 21st April 2019. A PDF version can be found here.

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

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’s CFO denied plans to jointly develop a compact car with “a German competitor”. (Reuters)
  • Launched a refreshed Mini Clubman. (BMW)

Daimler (history)

  • New CEO Kallenius reportedly plans to save an incremental €6 billion and set the company on a course to be CO2 neutral by 2040. The relationship with Renault-Nissan is rumoured to be on the chopping block. (Manager Magazin)
  • Hopes that van production in Russia will soon restart at the GAZ site after GAZ’s sanction-hit controlling shareholder said he was ready to reduce his stake in the firm. (Reuters)
  • Invested in battery developer Sila Nanotechnologies. (Sila)
  • Confirmed earlier rumours that a compact all-electric SUV called the EQB will launch in 2021, with a conventionally powered cousin, the GLB, on sale at the end of this year. (Reuters)

FCA (history)

  • Unions said FCA was planning to invest $355 million in the Windsor, Canada plant. (Detroit News)
  • Recalling about 330,000 vehicles to correct problems with gear changes that could lead to the car rolling away. (FCA)

Ford (history)

  • Agreed terms with Mahindra for a new C-sized SUV built on a Mahindra platform and powertrain. (Mahindra)
  • The head of Ford’s automaking division appears bullish on the economic outlook, saying that the US market peak auto “story” has been around for ages and that he would be surprised by a no deal Brexit. (CNBC)
  • Ford’s CTO says that not only do self-driving vehicles need lidar, but high definition (i.e. areas pre-mapped with lidar) are also a must. He believes that vehicles lacking these features have no more than “really good driver-assist technology” and pointed to Tesla as one such example. (Recode)
  • Told investors that switching production at Wayne from Focus and C-MAX to Ranger would increase profits by about $1 billion over the product cycle. (Reuters)

Geely (includes Volvo) (history)

  • Geely showed the Preface concept at Shanghai, suggesting the brand’s design language is moving much closer to subsidiary Volvo. (Geely)
  • Lotus revealed teaser images of the all-electric Type 130 hypercar, apparently planning to build less than 50. (Autocar)

General Motors (history)

  • PR for GM’s new emerging market models gave some insight into the cost trade-offs OEMs make on mass-market cars: $7 per unit saved by integrating a headrest on a driver’s seat; $2 per vehicle to strengthen an axle. (Reuters)

Honda (history)

  • Will eliminate the second shift at the Marysville, USA plant. (Japan Today)

Hyundai / Kia (history)

  • Confirmed the announcement of ex-Nissan executive José Muñoz as COO. (Hyundai)
  • Wants more information about government policy to decide the optimum sourcing strategy for electric vehicle components in India. (Economic Times of India)

Nissan (includes Mitsubishi) (history)

  • Vehemently denied newspaper reports that the 2019/20 fiscal year plan will reduce production by (15)%. (Nissan)
  • Suing Carlos Ghosn, alleging that he made payments to distributors that were actually going to him. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Released its annual sustainability report. (PSA)
  • Opel brand commercial vehicle sales are up 35% in Q1 2019 versus prior year. (Opel)
  • Opel will move to an importer model in the Czech Republic and Slovakia. (Opel)

Renault (history)

  • The head of Renault India says that new products will double sales because the portfolio will extend from 24% of the market to more than 50%. He is concerned that Renault’s profitability in the country is dependent on the performance of Nissan because the two firms share a 480,000-unit factory and believes that the market for small diesel vehicles will disappear by 2023. (Autocar)

Tata (includes JLR) (history)

  • JLR’s design director hates large touch screens (12” or so) in cars, revealing that he frequently changes the seat or mirror locations whilst driving at 80 miles per hour. (Detroit News)

Tesla (history)

  • CEO Musk said that Tesla’s latest iteration of Autopilot would have redundancy through two processing chips, however upon questioning he conceded that the chips and processing logic were identical so the redundancy is akin to having two engines, not independent decision making (at 9:30 on video). Once full self-driving is released, Tesla drivers will still have to keep their hands on the wheel until Tesla can determine that the system operates safely, a time period Musk predicts as six months (18:00 on video). (Lex Fridman)
  • Released an environmental impact report. (Tesla)
  • Investigating a fire in a stationary Chinese vehicle that went viral. (Reuters)
  • Planmning to shrink the size of the board down to seven and reduce the term to two years (from three). When the moves are complete, in around 2021, Tesla will have three independent directors. (CNN)

Toyota (history)

  • Took a stake in Uber’s self-driving car unit and agreed to invest $300 million over the next three years to build a commercial fleet of vehicles. (Toyota)
  • Licenced the eQ all-electric city car design to Chinese start-up Singulato, who will launch a vehicle based on Toyota’s model called the iC3. (Reuters)
  • Showed the next-generation Highlander SUV. (Toyota)
  • Unveiled the US market Yaris, based on the Mazda 2. (Autocar)

VW Group (history)

  • Audi reportedly wants to sell down stakes in engineering service providers. (Reuters)
  • Audi’s AI:ME concept car in Shanghai, previewed an interior for a car with partial self-driving abilities. The 65 kWh battery of the concept suggested that VW doesn’t see huge batteries as necessary for mid-sized cars. (VW)
  • Former CEO Winterkorn was charged by German prosecutors over the diesel scandal. (Reuters)
  • Joining a supplier traceability collaboration that uses blockchain, Ford is already a partner. (VW)
  • VW CEO Diess was accused of insensitivity over comments over Chinese camps for Uighurs. (Washington Post)
  • VW’s Slovakian operations will reduce staff by 3,000 and aim for lower wages as part of efforts to improve efficiency by almost a third. (Reuters)

Other

  • Subaru unveiled the next-generation Outback. (Subaru)
  • Byton says it has 50,000 orders and plans to fulfil 10,000 of them by the middle of 2020. (Economic Times of India)
  • XPENG revealed the P7 electric coupe. (XPENG)
  • Apollo started production of the IE supercar. The vehicles will be built by German engineering firm HWA. (Apollo)
  • Nikola said it has orders for over 13,000 trucks as it revealed further derivatives, including a truck aimed at European fleet customers. (Nikola)
  • Karma revealed a Pininfarina-badged concept built on the Revero’s underpinnings. It isn’t clear whether the vehicle will make it to production. The Revero is getting a light refresh. (Karma)
  • Pininfarina also helped hydrogen-only carmaker Grove to create a concept vehicle in Shanghai. (Autocar)
  • Aston Martin showed the production version of the all-electric Rapide. Although only 155 will be built, Aston Martin’s press release suggests that some are still up for grabs.. (Aston Martin)

News about other companies and trends

Economic / Political News

  • European passenger car registrations in March 2019 of 1,770,849 units fell (3.6)% versus prior year. (ACEA)

Suppliers

  • Precision toolmaker Sandvik said orders from automakers were strong (outside of Germany). (Bloomberg)
  • Panasonic disputed reports that the scrap rate at the Nevada battery factory built to supply Tesla runs to half a million cells per day, around 1/6th of output. (Business Insider)
  • AESC is building a 20 GWh /year battery factory in Wuxi, China. (Bloomberg)
  • NXP took a stake in long range radar developer Hawkeye. (Reuters)
  • Nidec is buying the automotive assets of OMRON for 100 billion JPY (about $900 million). (Nidec)

Dealers

  • Online business-to-business used car sales platform BacklotCars raised $25 million. (BacklotCars)

Ride-Hailing, Car Sharing & Rental (history)

  • Via announced two Japanese firms as investors. It hopes they will help it to break into the local market. (Via)
  • Uber sold a sizeable stake in its self-driving unit to Toyota, Denso and SoftBank in a move valuing the division at $7.25 billion. (Toyota)

Driverless / Autonomy (history)

  • Lidar developer Aeva said it had been working with Audi’s AID self-driving car unit, which appears attracted by the path to a “right cost”. AID previously disclosed it was working with Luminar so it isn’t clear whether the two lidar makers are in competition or be used as redundancy for one another. (Reuters)
  • Remote driving firm Phantom Auto raised $19 million. (CNBC)
  • Daimler’s short term car rental subsidiary Car2Go had to pause operations in Chicago after a number of vehicles appear to have been involved in committing crimes. (The Verge)
  • Byton executives say the firm will be capable of L4 autonomy within the life of the latest M-Byte SUV (one would expect about five to six years). (Autocar)
  • Ford’s CTO says that not only do self-driving vehicles need lidar, but high definition (i.e. areas pre-mapped with lidar) are also a must. He believes that vehicles lacking these features have no more than “really good driver-assist technology” and pointed to Tesla as one such example. (Recode)

Electrification (history)

  • Battery developer Sila Nanotechnologies raised $170 million from a group including Daimler. (Sila)
  • Lighyear’s solar panels will harvest about 700 kWh annually in Northern European countries, which the start-up says will be good for over 50km of driving each day in the summer. This seems about in line with claims made by Sono Motors, adjusting for differences in vehicle size. (Lightyear)
  • Continental says that the latest brake by wire regenerative system can improve CO2 performance by over 8g per mile compared to lower technology systems — all-electric cars benefit too, albeit not by as much. (Continental)
  • Toyota licenced the eQ all-electric city car design to Chinese start-up Singulato, who will launch a vehicle based on Toyota’s model called the iC3. (Reuters)

Connectivity

  • The EU backed a connected vehicle standard that uses Wi-Fi, rather than 5G. (Reuters)
  • Hyundai electric car owners can adjust vehicle performance settings — such as maximum torque, top speed and acceleration — using their mobile phones. Less clear is why anyone will choose anything other than “max”. (Hyundai)

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Auto Industry Briefing — week ending 14th April 2019

Ignoring brand history; Ford aims to be fit before the crunch; and underestimating the difficulty of developing electric cars. Please enjoy our auto industry and mobility briefing for 8th April to 14th April 2019. A PDF version can be found here.

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

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 605,333 vehicles in the first three months of 2019, up 0.1% on 2018. (BMW)
  • CEO Kruger criticised the amount of electric vehicle charging infrastructure in Germany, saying that Beijing had more than 2 and a half times the number of charging stations than the entire country. (Handelsblatt)
  • BMW says staff can use augmented reality to check new press tools for design mistakes. (BMW)

Daimler (history)

  • Released the sustainability report for 2018. (Daimler)
  • Sold 587,921 units in Q1 2019, a drop of (5.9)% from a year earlier. (Daimler)
  • German newspaper reports said that authorities had discovered defeat devices on GLK SUVs fitted with diesel engines but that the software had then been changed to remove the functionality. (Bloomberg)

FCA (history)

  • Expressed confidence that 2019 and 2020 financial goals would be met, despite headwinds. (Reuters)
  • Released the 2018 sustainability report. (FCA)
  • Will pay $110 million to settle a lawsuit over diesel emissions in US pick up trucks. (Detroit News)
  • Unions complained that FCA is regularly suspending engineering and management activities in Turin. (Torino Oggi)

Ford (history)

  • Announced another executive reshuffle that sees the leader of Ford’s smart mobility business retire, and the previous two roles covering automotive sales and operations amalgamated into a single job. Following the moves, CEO Hackett will have two key lieutenants: Joe Hinrichs as head of automotive and Jim Farley as head of new business. Although the roles are nominally the same status, the automotive operation is several orders of magnitude larger in both workforce and revenue. (Ford)
    • Significance: Coming only two years after CEO Hackett created the structure that is now being overhauled, the reorganisation makes Hinrichs look a more likely CEO candidate than Farley.
  • Recalling 327,000 pick up trucks that have already been recalled once because the repair procedure might have caused further damage. (Ford)
  • CEO Hackett said Ford will be ready for the recession. (Detroit Free Press)
  • Autonomous cars have been over-hyped and initial applications will be geo-fenced (i.e. the car will not be allowed to go beyond certain mapped areas), according to CEO Hackett. (Fast Company)
  • Ceasing production of the KA+ for Europe in September 2019, citing profitability problems and the expense to make the car compliant with more stringent CO2 regulations. (Car Scoops)
  • Rumoured to be near to a 49% (Ford) / 51% (Mahindra) JV that would take control of Ford’s Indian assets. (Reuters)
  • Researching solid state batteries in conjunction with Solid Power. (Inside EVs)
  • UK unions believe Ford is hiding the true scale of planned cuts. (This Is Money)

Geely (includes Volvo) (history)

  • Announced a new all-electric brand, Geometry, that intends to release 10 new vehicles by 2025. (Geely)
  • Kandi electric vehicles will be offered to around 300,000 Didi drivers via Didi’s leasing program. (Kandi)
  • Confirmed the Polestar 2 will be produced in Luqiao, China, alongside the Lynk&Co 01 and Volvo XC40. (Geely)
  • Geely have enlisted Ricardo to develop a new transmission for plug-in hybrid vehicles. (Green Car Congress)

General Motors (history)

  • Set a release date for the next generation Corvette, confirming that the car will be mid-engined. (GM)
  • Talks over GM taking a stake in Rivian have reportedly halted with the resistance supposedly coming from Rivian’s side as the business looks to keep its options open. (Detroit News)

Honda (history)

  • After previously implying that a new model would be built in Turkey once Civic production ends in 2021, Honda said that it would cease car production in the country at that point. (Japan Times)
  • Expects Honda sales in China to catch up with the US market in two to three years. (Reuters)
  • Opened a 120,000 units per year plant in Wuhan, China, in partnership with Dongfeng. (Honda)

Hyundai / Kia (history)

  • Reportedly close to announcing a new COO, Nissan’s former chief performance officer. (Bloomberg)

Mazda

Nissan (includes Mitsubishi) (history)

  • Will build the next generation Navara pick-up truck at the Rosslyn, South Africa, plant. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • CEO Tavares claimed that European CO2 regulations would mean 40% of vehicle componentry (for pure electric cars) being sourced from Asia, because of the cost of the batteries, and that it will be “chaos” between now and 2030 as OEMs try to adapt to ever-increasing emissions standards. (Autocar)
    • Significance: Tavares’s 40% figure appears to imply little to no reduction in EV powertrain cost from today’s levels, going against bother received wisdom and historical trend. In addition, major EV powertrain suppliers have been looking for EU locations as demand grows to justify regional, rather than global, sourcing.
  • Per vehicle profitability on the DS7 is apparently “sky high”. (Autocar)
  • Confirmed that a second model will be produced at Opel’s Rüsselsheim plant alongside the Insignia. Although the press release doesn’t specify the car, rumours point to the next generation Astra. (Opel)
  • Tavares says he hasn’t talked with Tata about a takeover of JLR, but that doesn’t mean he hasn’t spoken with mutual friends who might pass along a message or two. (Autocar)

Renault (history)

  • Opened a new innovation hub and design centre in Shanghai, China, in partnership with Nissan. (Renault)

Suzuki

  • Expecting that recall costs will hit full year profits by over $700 million. (Japan Times)

Tesla (history)

  • The $35,000 version of the Model 3 has been withdrawn from the website and will only be available by ordering in stores or over the phone. Tesla confirmed that the car will actually be the same as the $39,500 “Standard Plus” model but several features, including the full battery range, will be disabled via software. All cars will now come with Autopilot software enabled as standard. (Tesla)
  • Announced a leasing program for the Model 3 but, unusually, said that customers would not have the option of purchasing the car because the cars are destined for the Tesla ride-hailing network. (Tesla)
    • Significance: Since many lease customers simply move to a new vehicle, ending the option of a payment will make little difference to the program desirability. The link to an autonomous ride hailing program raises questions: what makes Tesla think it can launch in around three years (when leases expire)? How are the number of lease vehicles miraculously the same as the ride hailing network requirement?

Toyota (history)

  • Unveiled the next generation RAV4. (Toyota)

VW Group (history)

  • Reportedly having trouble with the development of both the next-generation Golf and the ID, and may fail to bring them to market within the planned timeframe. (Handelsblatt)
  • VW Group sold 2,605,600 units in Q1 2019, down (2.8)% from a year ago. (VW)
  • According to critical newspaper reports, CEO Diess has alienated labour leaders, top shareholders and many direct reports. Aggrieved parties, via journalists, caution that he must lead by consensus and his chances of becoming the Millwall of CEOs (no one likes us, we don’t care) are slim. (Handelsblatt)
  • Škoda’s boss claims the brand could have sold an additional 100,000 cars in 2018, had the production capacity been available. (Autocar)
  • Despite the overall fall in European diesel sales, Audi is withdrawing S6 and S7 petrol derivatives. (Manager Magazin)
  • Employees are going to have to make do without colour printing. Existing machines will be switched to black and white only mode and no new colour models will be purchased. The firm aims for less than five percent of print outs to be colour in future. (Handelsblatt)
  • Rumoured to be exploring options for a stake in Chinese joint venture partner JAC. (Reuters)

Other

  • Purists were in a state of shock after MG’s latest product was unveiled — a minibus based on a Maxus van. (SAIC)
  • NIO will reveal the ET7 at the Shanghai show. (Green Car Reports)
  • Byton’s chairman might be on his way out, the company stressed that they were only rumours. (Manager Magazin)

News about other companies and trends

Suppliers

  • SK Innovation said it was discussing a joint venture factory with VW, in addition to similar talks with several Chinese carmakers. (Reuters)
  • Hella’s revenue in the first fiscal nine months was €4.2 billion, with EBIT of €417 million. (Hella)
  • Faurecia acquired a majority stake in Creo Dynamics. (Faurecia)
  • Webasto acquired bought out its partner in a South Korean joint venture. (Webasto)
  • Adient said that Q1 2019 financial results would be worse than expected. (Adient)
  • Benteler and Freudenberg (Vibracoustic) are partnering on chassis systems for electric vehicles. (Benteler)
  • Panasonic won’t make further investment to increase capacity for battery production at Tesla’s Gigafactory until the firm is satisfied that existing assets are being suitably sweated for all they are worth. (Reuters)
  • LG Chem and VinFast have set up a joint venture for electric vehicle battery packs in Vietnam. (VinFast)

Dealers

  • Online used car sales portal Shift raised an additional $40 million. (TechCrunch)

Ride-Hailing, Car Sharing & Rental (history)

  • Uber released a detailed report ahead of an IPO. (SEC)
  • Via is launching an on-demand public transport service in Indonesia called Tron. (Via)

Driverless / Autonomy (history)

  • Pony.ai raised $50 million in a deal valuing the business at $1 billion. (Deal Street Asia)
  • Uber executives said self-driving cars will be a reality within 10 years but declined to forecast how widespread because it will take a “long time” to get to scale. (VentureBeat)
  • Autonomous cars have been over-hyped and initial applications will be geo-fenced (i.e. the car will not be allowed to go beyond certain mapped areas), according to Ford’s CEO. (Fast Company)

Electrification (history)

  • BMW CEO Kruger criticised the amount of electric vehicle charging infrastructure in Germany, saying that Beijing had more than 2 and a half times the number of charging stations than the entire country. (Handelsblatt)

Connectivity

  • Driver and occupant perception developer Affectiva raised $26 million. (FINSMES)

Other

  • Scooter rental firm Telepod believes it has found a competitive advantage by offering electric scooters with swappable batteries to food delivery agents. (Tech In Asia)
  • Scooter rental start-up Movo raised $22.5 million. (TechCrunch)

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Auto Industry Briefing — week ending 7th April 2019

Pollution taxes > outright bans; Tesla’s Model S and Model X lose ground; and open CO2 pools in Europe — only for the brave? Please enjoy our auto industry and mobility briefing for 1st April to 7th April 2019. A PDF version can be found here.

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

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)

  • Received notification that the EU believes BMW took part in a cartel with Daimler and VW Group to control emissions regulations. BMW said the three held ongoing talks, but nothing wrong had happened. (BMW) Despite the denials of any wrongdoing, BMW will make a provision of over €1 billion to cover the cost of fines, which will reduce full year EBIT margin by 1% – 1.5%. (BMW)
  • Working with Microsoft to create a common standard for integrating various factory information systems together so that they can exchange reporting data and commands. (BMW)
  • The rumoured talks between BMW and Daimler to share electric vehicle technology are apparently concentrated on delivering an affordable electric car in China. (Reuters)

Daimler (history)

  • Celebrated the opening of the Moscow plant. (Daimler)
  • CEO Zeteche drew a parallel between the safety critical systems on aircraft and emerging driver assistance, and full self-driving technologies in cars. (Reuters)
  • Will add start producing the GLC SUV at the Sindelfingen, Germany plant from 2022 onwards, potentially depriving Valmet of the volume. (Daimler)
  • Accused by the EU of breaking competition rules by discussing emissions technologies with BMW and VW Group. Daimler expects that, as the original whistle-blower, it will not be fined. (Reuters)
  • The rumoured talks between BMW and Daimler to share electric vehicle technology are apparently concentrated on delivering an affordable electric car in China. (Reuters)

FCA (history)

  • FCA and Tesla will pool their vehicles for the purposes of EU CO2 emissions calculations in a deal said to be worth hundreds of millions. (FT)
    • Significance: The move will allow FCA to offset far more expensive fines without having to sell pricey electrification technology in cost-sensitive markets (e.g. Italy and Spain). However, it also represents a one-way bet on Tesla’s future in Europe and would leave the firm exposed overnight to large drop in sales or the firm’s failure.
  • Sold 498,425 vehicles in the US during Q1 2019, a drop of (3)% on the prior year. Only Ram pick-up trucks showed an increase, even Jeep saw decreases despite the seemingly insatiable US demand for SUVs. (FCA)
  • FCA’s chairman wants his family’s investment company to “participate” in the future of FCA but stopped short of calling for it to continue on a standalone basis. (Reuters)
  • Developed a new fuel with Enel that, FCA says, has 3% lower CO2 emissions on a WLTP basis and can be used instead of petrol. So far, the fuel has only been tested in a fleet of five cars. (FCA)
    • Significance: OEMs may hope that by developing different fuels they can claim partial delivery of European CO2 targets. It remains unclear whether the EU will be convinced, or regard the fuel efficiency as a double-count of improvements already expected.

Ford (history)

  • Revealed the next-generation Kuga / Escape SUV. The car will offer 48V, hybrid and plug-in hybrid powertrain. Ford claim the PHEV derivative will have CO2 emissions of 29 g/km. (Ford)
  • Sold 590,249 vehicles in the US during Q1 2019, down (1.9)% on the same period a year ago. The drop was more than explained by falling car sales. (Ford)
  • Will start selling a plug-in hybrid version of the Explorer SUV in Europe from late 2019 onwards. (Ford)
    • Significance: Provided the sales are high enough to warrant the effort of engineering the vehicle for Europe (several thousand per year), this looks like a smart move. The Explorer will add a 7 seat SUV; command decent margins; and be a net positive for Ford’s fleet average CO2, emitting fewer g / km than most Fiesta and Focus models, but with far higher mass.
  • Launching an all-electric version of the Transit van in 2021 and hopes to boost commercial vehicle sales in Europe by increasing the number of authorised bodybuilders and offering remote fleet management features. (Ford)
  • Announced that the small SUV already confirmed for the Romania plant will be called Puma. (Ford)
  • Executives threatened that Ford would reconsider its long-term investments in the UK in the event of a no deal Brexit, but admitted that the current round of layoffs were due to self-inflicted problems. (Economic Times of India)
  • Workers at the St Petersburg plant are going on strike in protest at plans to close the site, but since Ford intends to end sale of the cars made there, it isn’t clear if this will be a problem. (Moscow Times)
  • CEO Hackett said in an interview that he saw signs of progress in his bid to remake the company’s thinking but a continued reference to 2018-vintage examples suggests fewer green shoots than he would like. He acknowledged that he might not see the overhaul effort through, saying “I just don’t think that I have an evergreen time to get as far as I need to get”. (Detroit News)

Geely (includes Volvo) (history)

  • Volvo sold 161,320 cars in Q1 2019, up 9.4% on prior year. (Volvo)

General Motors (history)

  • Sold 665,840 vehicles in the US during Q1 2019, down (7)% from prior year. GM appeared to suggest that it was because of falling car sales, but all brands lost volume, as did several high-profile SUV nameplates. (GM)

Hyundai / Kia (history)

  • Hyundai denied media reports that it had agreed an alliance with Tencent for driverless car development. (Reuters)
  • In the first quarter Hyundai sold 1,020,374 units globally, down (2.8)% on the same period in 2018. (Hyundai)
  • KIA sold 650,143 vehicles globally in the first quarter, up 0.6% on a year-over-year basis. (KIA)
  • Working on a digital cockpit with reconfigurable steering wheel buttons that feature their own screen. (Hyundai)

Nissan (includes Mitsubishi) (history)

  • Carlos Ghosn was rearrested and will be held in detention until at least April 14th. (Reuters)

PSA (includes Opel/Vauxhall) (history)

  • Aiming to achieve 95% localisation on the first India-built Citroën vehicles. (Autocar), CEO Tavares says that a minimum localisation of 90% is “a given” for the market. He is open to suggestions about how to use the Ambassador brand that PSA previously acquired, implying no current product plans. (Autocar)
  • Rumoured to have two sourcing plans for the next-generation Astra: the first would see 75% of the cars produced in Ellesmere Port, UK with the remainder coming from Rüsselsheim, Germany; the second (to be triggered in the event of a no-deal Brexit) would be the inverse. Both scenarios imply the Gliwice, Poland plant will lose out. (Handelsblatt)
  • CEO Tavares said the company is not actively targeting an alliance or takeover with any specific company because PSA “didn’t need” any help (seemingly leaving the door open for things he might want, but not need). (Reuters)

Renault (history)

  • Completed an audit of executive payments between 2010 and 2018. Although there wasn’t anything wrong, some of the expenses paid on behalf of Carlos Ghosn were a “source of concern”. (Renault)
  • Wants to pay Carlos Ghosn as little as possible for his work in 2018, but that will require the agreement of the AGM, and even then he will still receive €1 million. Renault also will only pay out part of Ghosn’s pension pot. (Renault)

Tesla (history)

  • Delivered 63,000 units in Q1 2019, up 100% versus a year prior but down (31)% on a quarter-over-quarter basis. Tesla suggested that there were an usually high number of vehicles in transit, but a heavy drop in Model S and X seemed to be responsible too. Tesla has now stopped giving separate figures for the two older vehicle lines and said it would still deliver 360,000 – 400,000 cars in 2019. (Tesla)
    • Significance: For many quarters, Model S and X sales have appeared to be losing momentum and now sales have fallen by over (50)% in a single quarter. Tesla’s move to stop giving separate figures also appears backwards, given that the firm only produce three model lines.
  • FCA and Tesla will pool their vehicles for the purposes of EU CO2 emissions calculations in a deal said to be worth hundreds of millions. (FT)
  • A US Judge told the SEC to resolve their dispute with Elon Musk amicably. (Reuters)
  • Holding an investor day on 22nd April to provide a “deep dive” into the technology set and strategy. (Tesla)

Toyota (history)

  • Transferring the development and manufacturing operations for electronic components to Denso, the moves will be completed by April 2020. (Toyota)
  • Will offer royalty-free access on around 24,000 patents relating to electric vehicle technology and provide technical support to manufacturers making their own vehicles using Toyota’s components. The royalty-free period lasts until 2030, so it is unclear whether companies will have to start making payments after that point. (Toyota)

VW Group (history)

  • Announced a long-term lithium supply deal with Ganfeng. (VW)
  • Merging all Indian passenger car legal entities into a single company as part of organisational changes putting Škoda in charge of developing low cost cars.  (VW)
  • Will show a full size all-electric SUV dubbed ID-Roomzz at the Shanghai show. The vehicle will launch in China in 2021, with other markets following on. (VW)
  • Accused by the EU of breaking competition rules by discussing emissions technologies with BMW and Daimler. VW earlier suggested that it expects relatively light punishment after acting as a whistle-blower (without knowing that Daimler had already got there first). (Reuters)
  • The head of VW’s works council has reportedly called on the board to extend no-layoff guarantees for German workers out to 2028. (Handelsblatt)

Other

  • Karma will use small gasoline engines supplied by BMW as range extenders. The two firms have been working together since 2015, but have only now made the relationship public. (Karma)
  • NIO sold 3,989 vehicles in Q1 2019. (NIO)
  • McLaren will unveil the brand’s grand touring offering in May. (McLaren)
  • Lightyear received €2.5 million from a European Commission program. (Lightyear)
  • Maruti Suzuki cut production in India by over (20)% in March, due to falling demand. (Bloomberg)
  • Aston Martin’s CEO believes that the cost of developing self-driving cars will lead to so much M&A that in future there are only “two or three” massive car makers. He thinks that there will be no successful new luxury brands within the next ten years. (Autocar)
  • A mysterious Chinese car company is reportedly building a factory in Croatia that will produce electric vehicles aimed at central and eastern European markets. (Total Croatia News)
  • Faraday Future released teaser images of the V9 car it intends to build in China. (Engadget)

News about other companies and trends

Economic / Political News

  • US light vehicle industry in March was 17.48 million units, about 0.5% better than the prior year. (Wards)
  • March passenger car registrations in the UK were 458,054 units, down (3.4)% on a year earlier. (SMMT)
  • German passenger car registrations of 345,523 units in March fell (0.5)% on the prior year. (KBA)
  • Passenger car registrations in France for March of 225,818 units were down (2.3)% but up (2.4)% when sales days were taken into account. (CCFA)
  • Italian passenger car registrations for March came to 193,662 units, a (9.6)% drop on the prior year. (UNRAE)
  • There were 122,664 passenger cars registered in Spain during March, a fall of (4.3)% on a year earlier. (ANFAC)
  • Over 50% of vehicles registered in Norway during March were apparently all-electric. (Economic Times of India)
  • Australia’s Labor party plans, if it wins the general election, to set a target of 50% of new car sales in 2030 coming from electric models. (The Guardian)
  • The European Union published its report into 2017 CO2 fleet average emissions. (EU)
  • London’s ultra low emission zone (ULEZ) became activated. Owners of older, highly polluting, vehicles will have to pay additional surcharges to access the zone. (BBC)
    • Significance: Although there is much talk of outright city bans for vehicles with worse emissions, higher taxes, payable on a per-use basis, seem likely to gain favour amongst politicians looking for a way to improve air quality without accusations of reducing access, whilst raising revenue at the same time.

Suppliers

  • Valmet reported 2018 revenue of €662.6 million and an operating profit of €18 million. (Valmet)
  • ZF reported 2018 revenue of €37 billion and adjusted EBIT of €2.1 billion. Although the firm highlighted investments in mobility-focused companies, it also announced a large transmission order from BMW — serving as a reminder of the continued importance of internal combustion engines. (ZF)
  • Melrose held an investor day, confirming 10% margin targets for GKN’s automotive division. (Melrose)
  • Prinx Chengshan opened a 4.8 million unit capacity tyre plant in Thailand. (Reuters)
  • Lear is acquiring connected vehicle specialist Xevo. (Lear)
  • Standard Motor announced the acquisition of some of Stonerige’s automotive assets. (Standard Motor)
  • Norsk Hydro said production has almost returned to normal levels after a cyber attack. (Reuters)
  • Michelin held an investor day. (Michelin)
  • Toyota is transferring the development and manufacturing operations for electronic components to Denso, the moves will be completed by April 2020. (Toyota)

Ride-Hailing, Car Sharing & Rental (history)

  • Indian rental operator Zoomcar is reportedly looking to raise $500 million, with Mahindra considering supplying up to $400 million of the money. (Deal Street Asia)

Driverless / Autonomy (history)

  • UK self-driving start-up Wayve claimed success in using low-tech sensors, standard mapping and machine learning to teach a vehicle to navigate urban streets. (TechCrunch)
    • Significance: There are many advocates for machine learning in self-driving however, thus far, no one has programmed a machine to explain what decisions it is taking (not great for building confidence or accident investigation). Comma.ai tried a similar approach a few years ago (albeit with fewer sensors) and were ordered not to release their product by US regulators (Wayve appear content to simply test at this stage).
  • Toyota, Ford, and GM are working with the SAE (US engineering body) to create standards for autonomous vehicle testing and deployment. (Toyota)
    • Significance: Since the SAE coined the idea of levels 1-5 of autonomy, their guidance on autonomous vehicles will be closely watched. Toyota, GM and Ford have an opportunity to recommend exhaustive best practices that could make quicker routes to market appear “unsafe” when judged against the SAE’s forthcoming criteria.

Electrification (history)

  • Innolith claims to have a battery with an energy density of 1,000 Wh/kg and plans to produce it in 2022. (The Verge)
  • Nidec says it will begin mass producing wheel-hub motors rated at 100 kW in around 2023. (Nidec)
  • Electric motor developer C-Motive raised $2 million. (C-Motive)
  • Toyota is offering royalty-free access on around 24,000 patents relating to electric vehicle technology and provide technical support to manufacturers making their own vehicles using Toyota’s components. The royalty-free period lasts until 2030, so it is unclear whether companies will have to start making payments after that point. (Toyota)

Other

  • Scooter rental firm Bird published a safety report saying that accident levels were about equivalent to using a bicycle. The report implied that by replacing car journeys, overall traffic deaths would fall — presumably on the basis that collisions would be between scooters, rather than cars hitting pedestrians as they do today. (Bird)
  • Logistics start-up BlackBuck raised $36 million. (Deal Street Asia)
  • Logistics start-up TheLorry raised $6 million. (Deal Street Asia)
  • Electric trike maker Pi Beam Labs raised seed capital. (Economic Times of India)

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Auto Industry Briefing — week ending 31st March 2019

Self-driving dominoes falling; creating new cars is too expensive; and battery range — it’s all in the manufacturing. Please enjoy our auto industry and mobility briefing for 25th March to 31st March 2019. A PDF version can be found here.

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

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)

  • Rumoured to be interested in taking on the Honda’s Swindon, UK, factory. BMW issued a denial. (Autocar)
  • BMW says that to get two million kilometres of representative driving data that can then feed simulations, it needs five million kilometres of data. BMW does not explain how this is sufficient since it is far below the number of miles driven between serious accidents. The fleet of 80 vehicles collects more than 1,500 TB of raw data each day. BMW helpfully comfirms that it is impractical to store so much information using either iPhones or CDs. (BMW)
  • Will stop purchasing cobalt from the Congo by 2021. (Automobil Produktion)
  • BMW and Daimler are said to be discussing a 500,000 annual volume target for a shared electric vehicle platform that would support a BMW i2 model with a sub-€30,000 price point. (Automotive News)

Daimler (history)

  • Formed a joint venture with Geely that will own the Smart brand. Production will be based in China at a new factory that will start building cars in 2022. Daimler implied that the Hambach plant in France will only produce Mercedes cars in future. (Daimler)
  • Aiming to save 50% of travel costs in the latest austerity drive, blaming a relaxation in approval levels for an explosion in spending. (Handelsblatt)
  • Daimler Trucks purchased a majority stake in autonomous driving developer Torc Robotics. Daimler will continue working on proprietary self-driving software, and so will Torc. (Daimler)
    • Significance: Torc has substantial experience in off-highway applications, which could help build credibility with Daimler Trucks customers. The acquisition could also be the beginning of the end for the midfield self-driving efforts as investors choose to sell out whilst the businesses are going concerns rather that continue in a seemingly futile effort to compete with those spending hundreds of millions each year.
  • BMW and Daimler are said to be discussing a 500,000 annual volume target for a shared electric vehicle platform that would support small cars with a sub-€30,000 price point. (Automotive News)

FCA (history)

  • Following in PSA’s footsteps, Renault is rumoured to be interested in FCA, if it can merge with Nissan. (Reuters)
  • Reportedly planning to stop Charger and Challenger production to manage inventory levels. (Automotive News)
  • Believes that alternative fuels, such as ethanol and natural gas, will be more widely used than electrification in South America as a method of reducing emissions. (Reuters)
  • Rumoured to be in talks with PSA about creating a shared platform for small cars. (Bloomberg)
  • Extended the €6.25 billion credit line to March 2024. (FCA)
  • Cutting a shift at the Windsor, Canada, plant due to falling minivan sales. (Reuters)

Ford (history)

  • Announced the cessation of passenger car production and sales in Russia, resulting in the closure of two vehicle plants and an engine plant in the country. Ford will also relinquish control of the joint venture with partner Sollers receiving a 51% share of the restructured entity. Ford said the move will reduce profits by about $500 million, of which about $200 million will be cash. (Ford)
  • May be close to a deal to sell the Sao Paulo plant, now scheduled for closure. (Reuters)
  • Hosting a media event in Amsterdam, Netherlands on 2nd April to reveal new European products. (Ford)
  • Reached agreement with unions on the terms for stopping production of the C-MAX and eliminating a shift at the Saarlouis plant. (Ford)

Geely (includes Volvo) (history)

  • Formed a joint venture with Daimler that will own the Smart brand. Production will be based in China at a new factory that will start building cars in 2022. (Daimler)

General Motors (history)

  • Sold the Gunsan, South Korea factory to Myoungshin. The new owner plans to contract manufacture electric vehicles there. (Reuters)
  • Rumoured to have had talks with FCA to sell the Detroit-Hamtramck plant. (Crains Detroit)

Honda (history)

  • Took a 10% stake in the MONET mobility joint venture between Toyota and SoftBank. (Honda)

Hyundai / Kia (history)

  • Hyundai’s Genesis brand will lease cars with servicing and insurance included in a single payment. Shockingly, the scheme, called Spectrum, isn’t being referred to as a subscription. (Hyundai)
  • Hyundai’s forthcoming small SUV will be named the Venue. (Hyundai)

Nissan (includes Mitsubishi) (history)

  • Completed the sale of Nissan’s battery business to Envision. (Nissan)
  • Nissan has a reworked approach for determining compensation for directors and executives. (Nissan)
  • Renault reportedly wants to give Nissan a short post-Ghosn cooling off period and then resume talks on a full merger within the next 12 months, so that after that the combined entity can take on FCA. (Reuters) Nissan’s CEO said that he doesn’t know anything about it. (Reuters)
  • Released a report into the Ghosn scandal, saying he had become too powerful. Nissan’s CEO was exonerated by findings that he had been tricked into signing documents, and that Ghosn never really stopped being CEO anyway until his arrest. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Will reduce the workforce at the Aspern transmission plant in Austria by about one third. (Reuters)
  • Released the 2018 Registration Document. (PSA)
  • CEO Tavares wants senior executives who have enough spine to tell him when they disagree with him, and says he works harder than anyone to bring up difficult topics because he is a leader, not a boyfriend. He also says that he receives 1,000 powerpoint slides to read each week, but thinks only 10% of them are useful. (Les Echos)
  • Rumoured to be in talks with FCA about creating a shared platform for small cars. (Bloomberg)
  • Taking a controlling shareholding in Chinese parts distributor Longstar. (PSA)

Renault (history)

  • Renault reportedly wants to give Nissan a short post-Ghosn cooling off period and then resume talks on a full merger within the next 12 months, so that after that the combined entity can take on FCA. (Reuters)
  • The Renault-Nissan Alliance owned three private jets that apparently nobody knew about. (FT)

Tata (includes JLR) (history)

  • JLR’s North American CEO is unsure of how successful the I-Pace electric car will be (although he likes the car) and sees residual values as a major concern saying that they undermine competitive leasing deals. (CNBC)
  • JLR confirmed it had made a tidy sum by investing in Lyft at $32.15 per share. (JLR)

Tesla (history)

  • CEO Musk told staff that the firm will continue to open new stores, providing they do enough to advance interest in the brand and sell cars. (CNBC)
  • After Musk failed to master the finer points of the new return policy, Tesla decided that it was the policy that was wrong and changed it to come into line with his comments on Twitter. (The Verge)
  • Bloomberg thinks Tesla may have built 80,000 Model 3 in Q1 2019, but the model could be wrong because it is experimental, but if it is right then it is totally genius, but if not it’s just one of those things. (Bloomberg)

Toyota (history)

  • Toyota researchers suggested that battery ageing may have less to do with the charging cycle (the conventional wisdom) and could be more to do with variations in the manufacturing process. The firm sees promise in testing techniques that can grade batteries at the end of the production line and direct the highest performing units to higher revenue applications, plus improve OEM confidence in lifetime capability. (Toyota)
  • Honda and Hino took a 10% stake in the MONET mobility joint venture between Toyota and SoftBank. (Honda)
  • Believes that sales in South America and the Caribbean will grow less than 1% this year. (Reuters)
  • Announced a series of executive changes. (Toyota)
  • Suffered a cyber attack which may have affected up to 3.1 million customers. (IT Pro)

VW Group (history)

  • CEO Diess isn’t interested in making a bid for FCA. (Reuters)
  • Audi is planning two eTron GT all-electric saloons, one similarly sized to the A4, and one around A6-size. Audi will use the PPE platform for the A4 eTron but the MEB platform for the Q4 eTron, despite both vehicles being around the same size. (Autocar)
  • Executives expressed hope in closing a deal with Ford to buy a stake in Argo AI. (Reuters)
  • VW says the Group’s cars and trucks account for 2% of global CO2 emissions. (Times LIVE)
  • Scrapped 300,000 German diesel vehicles traded in under an incentive scheme. (VW)
  • Although VW will sell electric vehicles in Brazil, it won’t make them locally for some time. (Reuters)
  • SEAT will develop a version of the MEB all-electric platform for smaller cars, aiming for a starting price below €20,000. (SEAT)

Other

  • XPeng’s founder said that $1 billion isn’t enough to start a car company and he now thinks $4 billion – $5 billion is a more realistic assessment. (Detroit News)
  • Before going public, NIO reportedly agreed a yearlong non-compete clause with the investment banks leading the IPO, specifically naming several Chinese EV rivals. (Reuters)
  • Valmet said Blackrock had increased its stake in the firm to 6.5%. (Valmet)
  • South Korea’s Songuo Motors showed off the first set of vehicles for the NeuWai brand. The vehicles will be made in China but exported in semi-knock down kit form, ready for final assembly in local markets. (Songguo)
  • Chinese electric vehicle start-up Leap Motor reportedly wants to raise $372 million. (Deal Street Asia)
  • Indian group JSW Energy no longer plans to launch an electric vehicle. In 2017, the firm was prepared to commit $623 million (including charging infrastructure spending) to the project. (VC Circle)
  • Nikola reportedly purchased the land for the firm’s first factory. (Trucks)

News about other companies and trends

Economic / Political News

  • The UAW lost almost 10% of its members in 2018 but said it wasn’t bothered. (Detroit News)
  • An IG Metall negotiator suggested that the union would expect a permanent employee laid off by a Tier 1 or OEM in Germany to receive around €260,000 in compensation. (IG Metall)
  • The European Union mandated a set of safety features, including automatic speed limiting, from 2022. (EU)

Suppliers

  • Continental say 10 inch touchscreens are the norm for European cars and it will soon be 14 inches. (Autocar)
  • ZF agreed terms to acquire Wabco in a deal valuing the latter at about $7 billion. (ZF)
  • Velodyne has shipped a cumulative $500 million of lidar sensors. (Velodyne)
  • Hanon completed the acquisition of Magna’s fluid pressure and controls division. (Hanon)
  • Johnson Matthey is building a new plant for electric vehicle batteries in Poland. (Reuters)

Dealers

  • Scout24 is in an acquisitive mood, hoping to pick up pieces of eBay’s classifieds business. (Reuters)

Ride-Hailing, Car Sharing & Rental (history)

  • Lyft’s shares went great guns in initial trading, valuing the company at nearly $30 billion. (Reuters)
  • Ola plans to enter the short term rental business with a $500 million warchest. (Economic Times)
  • Uber acquired Careem in a deal worth $3.1 billion, for the time being the two brands will exist side by side. (Uber)
  • Honda and Hino each took 10% of the MONET mobility joint venture between Toyota and SoftBank. (Honda)

Driverless / Autonomy (history)

  • Waymo’s CTO said that no new breakthroughs were required for self-driving to become a reality; he believes that it is only a matter of time to learn the different permutations of road conditions. (Inverse)
  • Lidar developer Innoviz raised $132 million. (Innoviz)
  • Designated Driver showed off a six screen set up to remotely operate vehicles. (Wired)
  • Aptiv is releasing a data set that includes labelled photographs and lidar traces, hoping that researchers will find novel ways to analyse the information. (Aptiv)
  • Daimler Trucks purchased a majority stake in autonomous driving developer Torc Robotics. Daimler will continue working on proprietary self-driving software, and so will Torc. (Daimler)

Electrification (history)

  • Electric motor developer Linear Labs raised $4.5 million. (Linear Labs)
  • Toyota researchers suggested that battery ageing may have less to do with the charging cycle (the conventional wisdom) and could be more to do with variations in the manufacturing process. The firm sees promise in testing techniques that can grade batteries at the end of the production line and direct the highest performing units to higher revenue applications, plus improve OEM confidence in lifetime capability. (Toyota)

Connectivity

  • Subaru, Nissan and Mazda joined a Japanese consortium working on an emergency collision reporting system. Honda and Toyota are already members. (Honda)

Other

  • Bajaj Auto reportedly seems set to exchange its stake in the motorbike-making arm of KTM for a smaller stake in the parent company. (Autocar)
  • Bicycle rental firm VeoRide says that, rather than being late to the game, it is benefitting by learning from the mistakes of all the failed bicycle rental firms that went before it. (VeoRide)
  • A French parliamentary report suggested that changing over from internal combustions engines to electrification could cost €500 billion by 2040 – assuming the state continued generous subsidies; paid for charging stations to be built and failed to recover lost fuel duty. (Les Echos)
  • US President Trump told UAW members that their leadership should support him more and the dues they are paying have been set too high. (Detroit Free Press)
  • Mexico and Brazil concluded a free trade agreement for light vehicles. (Economic Times of India)

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