Monthly Archives: August 2017

What happened in the automotive industry last week? Please enjoy the round-up for the week commencing 21st August 2017. Stories are arranged by company and topic, there are duplicates in case are only interested in some sections.  A PDF version can be found here. If you’re happy with just the text version then please read on…

Favourite stories this week…?

One for the futurists: Ford published some details of their work on the first autonomous vehicle that they are planning to launch. Although Ford tried to keep details light, it couldn’t help mention that the vehicle is planned to be a hybrid (disappointing some) and will be designed for delivery of both people and goods (seemingly in the same vehicle, rather than different variants).

Another for the futurists: Germany’s report into the ethics of driverless car development implies the country wants to take a technology heavy yet accepting path towards autonomy. This is one of the three categories we see regulators falling into:

1. Free-for-all — leave the market to bring in technologies as they see fit on the basis that it’s all safety
2. Technology-heavy but accepting — mandate clear standards, including what some may consider to be over-engineered sensor and AI systems. Enforce OEM to OEM cooperation
3. Reluctant — impose onerous standards or conditions on driverless vehicles that impair market growth

One for the shop floor: I’m loving Honda’s blanking die design that helped them reduce scrap steel. It just goes to show that good old Gemba Kaizen (ish) can still deliver significant cost improvements.

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News about the major automakers

BMW

• Unveiled the new M5 sports saloon by including it in a new computer game “Need for Speed Payback” rather than a conventional product presentation. (BMW)

Daimler

• According to Manager Magazin, the company is contemplating creating a holding company of three separate entities, with the further possibility of spinning the divisions off at some point in the future. (Manager Magazin)

FCA

• Great Wall confirmed their interest in FCA’s Jeep brand but remained tight-lipped on takeover of the entire company. (Detroit News)
• Is reportedly looking at a possible spin off of Maserati and Alfa Romeo, in addition to selling the Magneti Marelli components arm. Memo: CEO Marchionne said that he was nervous about the rump assets if the business sold of its best performing subsidiaries during Q2 2017 conference call and FCA was reportedly in talks to sell Magneti Marelli to Samsung before the Korean company bought Harmann. (Bloomberg)

Ferrari

• Unveiled the Portofino, which will replace the California in Ferrari’s line-up. (Ferrari)

Ford

• Said that it had signed an MoU with Chinese manufacturer Anhui Zotye to create a range of all-electric vehicles under a new brand. The JV appears to be aimed specifically at the Chinese market and would be Ford’s 3^rd joint venture partner in China. Memo: Ford is following the lead of GM and Daimler by planning a China-only EV brand developed with a partner. (Ford)
• Said that it will provide a strategic update — presumably the new CEO’s much vaunted 100-day plan — October 3^rd. Memo: The news conference will be held on Hackett’s 134^th day in charge. (Ford)
• Ford’s VP of autonomous and electric vehicles wrote in a blog post about the company’s efforts to create a driverless vehicle for moving people and goods, but didn’t mention any timing. He revealed that the vehicle will be hybrid electric “initially” and his description makes the product Ford are developing sound like a combi-van. (Ford)
• Is investing in Transit vehicle production (with its joint venture partner). In order to increase capacity from 290,000 to 330,000 vehicles per year. The higher production rate will be in place by September 2018. (Ford)
• Announced that it would give a £2,000 scrappage allowance to customers in the UK who traded in older gasoline and diesel vehicles. Although Ford touted the air quality benefits, the BBC saw boosting car sales as a possible ulterior motive. (BBC)

Geely (includes Volvo)

• Volvo declared “the end of clutter”. Sadly, the search for perfect order continues as it transpired that it was no more than an attention-grabbing headline to highlight improved door pocket storage. (Volvo)

General Motors

• Saw CEO Mary Barra named to Disney’s board. Although possibly a distraction, Disney’s own fight with disruption (=Netflix) may give Barra useful perspective on how car making needs to change. (Detroit News)
• Said it would recall a small amount of early production build Bolts to correct problems where the vehicle overstates the remaining range. GM has to replace the entire battery pack in order to fix the issue..
• Announced just over $600 million of investments in its Joinville, Brazil, factory. (Reuters)
• GM’s VP for urban mobility gave an interview about the performance and growth of Maven. She was asked whether the unit was profitable and replied that there was more than 100% return on investment without being clear on the rationale. (Economic Times of India)

Honda

• Unveiled a new type of blanking die for steel stampings that reduces scrap steel. Honda overcame problems with bed size limitations in order to install alternating blanking even on bodyside-size panels. (Honda)
  • Implication: If you don’t know much about stampings, the Honda case study might seem like gibberish but the team have used lateral thinking to improve stamping efficiency — with a solution that is reminiscent of food packaging (although the Honda team credit different inspiration).

Hyundai / Kia

• Hyundai executives said that the company had approved development of a pick-up truck for launch in the USA in 2020. A small SUV named the Kona should debut this year. (Reuters)

PSA (includes Opel/Vauxhall)

• Vauxhall said that its £2,000 UK scrappage scheme had been taken up by over 5,000 customers in 2017. Vauxhall called its scheme “much copied”. 63% of the cars being traded in are from other brands. (Vauxhall)
• Opel said that 50,000 orders for its new compact SUV the Crossland X had been taken since launch in March (cars are only recently arrived in dealerships). (Opel)
  • Implication: Following on from similar announcements about the success of the Insignia, it isn’t yet clear whether these products are doing fantastically well or the press releases are for Opel’s own benefit (or possibly to convince PSA that there’s no need to do anything drastic).

Renault

• Will reportedly partner with infrastructure company Ferrovial to launch a Spanish car sharing service that uses all-electric vehicles. (Autofactil)

Tata (includes JLR)

• Announced that it had developed a new brand identity for Tata Motors: “Connecting Aspirations”. The company believes mobility services are better covered by the new tagline. (Tata)
• Tata Motor’s CEO said that the company was still looking for partners on small vehicle platform following the failure of its intended collaboration with VW Group. (Economic Times of India)
• Tata Motor’s COO said that Nano production, currently at around 1,000 vehicles per month, would not be phased out, citing sentimental reasons. (Economic Times of India)

Tesla

• Received criticism of Tesla’s approach to Autopilot that implied Tesla cared more about speed of rollout than safety. In fairness to Tesla, although they have been publicly bullish on their timeline for self-driving software, they haven’t yet released any. (The Verge)
  • Implication: If Tesla is one of the most valuable car companies in the world, its going to get treated like all the rest. Model 3 volume aspirations list Tesla firmly into the mass market where brand image is shaped by wider forces far more than when it only has to worry about the opinions of early adopters.
• After reportedly having conversations with Tesla about their new semi-truck, a truck operator said that the vehicle (to be unveiled next month) will be a day cab (no sleeping space) and will have a range of 200 – 300 miles on a single charge. (Reuters)
• CEO Elon Musk said that the company would soon store driver profiles in the cloud so that different drivers of the same car could have their settings used without having to manual program them in (and also use different cars). (Futurism)

VW Group

• Audi will partner with Chinese firm Hanergy to create panoramic roofs than contain solar cells to extend the range of vehicles. (Audi)
• VW showed off the new T-Roc, a design-led compact SUV. Unlike Nissan and Renault, VW has engineered all-wheel drive into the model, which may reduce its cost competitiveness. (VW)
• Audi announced a change to the way its models will be badged in future. They will now carry a two digit figure after the model name to signify the engine’s power level. 30 will be the lowest power level and 70 will be the highest. (Audi)
  • Implication: although the rationale for introducing what at face value appears to be a more confusing naming convention (not least because the range is for some reason between 30 and 70), potentially badging in this way will make it easier for consumers to compare gasoline, diesel, PHEV and BEV powertrains?

Other

• Germany’s environment minister said that there will have to be hardware changes to diesel vehicles to increase the exhaust gas purification. Auto makers are expected to be heavily resistant. (Manager Magazin). At the same time, the chancellor’s chief of staff said that the government saw a “vital interest” in preserving diesel engines. (Bloomberg)
  • Implication: This is a dangerous time for the car makers since it isn’t quite clear what the government has in mind and what level of independent feasibility studies it has undertaken. Retrofit of urea / SCR systems is practically impossible for reasons of finding space in the vehicle to fit them, as well as the economic challenges (thousands of euro per vehicle). Potentially, lean NOx traps could be fitted (still difficult but easier theoretically and at a cost per vehicle measured in hundreds of dollars).
• ACar, an all-electric low cost vehicle created by a German team was unveiled ahead of the Frankfurt Motor show. The vehicle is very similar in concept to the Ox from Gordon Murray Design. (Golem)
• Chery’s CEO said that the company had set big internal growth targets, especially in overseas markets, but was expecting to achieve this though organic growth and was not actively looking at M&A. (Reuters)
• Subaru announced that due to the Takata bankruptcy, it would be unable to claim repair costs and consequently would make an extraordinary loss in the next quarter 9and full year) as it reflected the costs. Although the cause was previously announced, this was the first time Subaru quantified it. (Subaru)
• Aston Martin reported financial results for the first half of 2017. Unit sales were up 67% and revenue was up 94%, reflecting improved pricing and series/option mix on the DB11. (Aston Martin)

News about trends

Suppliers

• Adient announced that it will buy seating supplier Futuris Group for around $360 million. (Adient)
• LG Electronics announced a new factory in Michigan, USA that will supply electric vehicle components (LG)
• Lear announced that it would build a new 160,000 square foot seating factory in Michigan, USA in order to support GM’s Flint factory. The factory will open in 2018 and will employ about 600 people. (Lear)
• Bosch announced that it had developed a keyless entry system that uses smartphones to detect proximity to the vehicle and enable unlocking and engine start. Because the smart phone is recognised as an individual device, the car can also switch to customer preferences for seating position and other features depending on the identified driver. (Bosch)

Ride-Hailing, Car Sharing & Rental

• Uber’s latest financial results showed revenues of $1.75 billion, up from $1.5 billion in the prior quarter and an EBIT loss of $(645) million. The company had $6.6 billion in cash at the end of the quarter. (Axios). This week also saw Uber’s first pitch deck being re-published by one of the firm’s co-founders. The company remains some way from the $20 million per year profits envisaged on slide 20. (Medium)
• The speculation surrounding the search for Uber’s new CEO proved spectacularly wrong (example: Business Insider) as the company announced Expedia’s CEO Dara Khosrowshahi. (BBC)
• Uber is reportedly in talks with Singaporean taxi firm ComfortDelGro to add the company’s licenced taxis to Uber’s local offering. (Straits Times)
• Google Maps took a further step towards commoditisation of ride-hailing services with the announcement that BlaBlaCar services would now be shown (in the public transport section). Google already displays offerings from Uber and Gett. (Journal Auto)
• Luxury peer-to-peer car sharing app LuxNow launched in Florida, with plans to expand to other US locations and expand its offerings into all-things-luxurious including jets and yachts. (Auto Rental News)
• GM’s VP for urban mobility gave an interview about the performance and growth of Maven. She was asked whether the unit was profitable and replied that there was more than 100% return on investment without being clear on the rationale. (Economic Times of India)
• Go-Jek has reportedly added JD.com to its list of investors as it looks close to finalising its latest funding round. (TechCrunch)
• Renault will reportedly partner with infrastructure company Ferrovial to launch a Spanish car sharing service that uses all-electric vehicles. (Autofactil)

Driverless / Autonomy

• Ford’s VP of autonomous and electric vehicles wrote in a blog post about the company’s efforts to create a driverless vehicle for moving people and goods, but didn’t mention any timing. He revealed that the vehicle will be hybrid electric “initially” and his description makes the product Ford are developing sound like a combi-van. (Ford)
• The UK government has granted licenses for self-driving lorries to be tested on public roads in order to develop improved understanding of platooning. (BBC)
• Apple is reportedly developing autonomous shuttles that it will use to ferry people around its campus as a part of its autonomous driving efforts. (New York Times)
• Germany’s ministry of transport received the report it had commissioned into ethics of autonomous driving. The report suggests a number of ethical principles and frames autonomy as a safety technology and encourages data sharing between OEMs (page 29 Figure 3). It also actively discourages emergency handovers between vehicle and driver (principles 17 & 19). (BMVI)
  • Implication: We believe that placing autonomy as first and foremost about safety in Germany sets the scene for a technology-heavy or all-of-the-above approach to in-vehicle technology, with multiple levels of redundancy quickly becoming the norm and fast to market approaches being discouraged. It remains to be seen to what degree this sets a template for other markets.
• May Mobility, a start-up led by ex-Ford and GM mobility gurus demonstrated a prototype autonomous vehicle and said it was looking to augment its existing $3.5 million fund-raising in order to accelerate development. (TechCrunch)
• Navya (a company operating an autonomous bus service in France) unveiled the results of a user satisfaction survey. They found that, on balance, users were receptive to further introduction of autonomous public transport, however the scores indicated that many customers need greater exposure before becoming enthusiastic about the potential for autonomous vehicles. (Navya)
• Tencent announced that it was creating an alliance to develop artificial intelligence for driverless vehicles. Members include BAIC. (South China Morning Post)

Electrification

• Ariel announced that they intend to launch a product named the “Hipercar” with all-electric drive equivalent to 1,180 hp and battery power generated from both plugging in and a micro turbine (similar to the concept of BMW’s i3 range extender, although only in the loosest possible sense). (Elektrek)
• There was speculation that Faraday Future is looking to drop its Formula E effort in a bid to save money. Although the racing team that runs Faraday’s operation said that the two companies were still in partnership, they also added no-so-cryptically “where there is smoke, there is fire”. (The Verge)
• French start-up GazelleTech said that they had completed construction of their first micro-factory (a production facility made from containers that can produce around 200 vehicles per year with a staff of five). They intend to launch their first prototype vehicles built this way in November. (Usine Nouvelle)
• India’s plans for an electric vehicle only mandate by 2030 continued to face scrutiny as a think tank said that plans to have electric power supplied to the over 300 million Indians without access implemented by 2023 at present would not deliver reliable supply on a 24/7 basis. (Times of India)
• Following on from a recent finding that vehicle-to-grid programs decreased battery life, a new study suggests that by adjusting the charging algorithms (so far something that has only been simulated), battery life could actually be improved. The debate will rage on… (Charged EVs)
• Ford said that it had signed an MoU with Chinese manufacturer Anhui Zotye to create a range of all-electric vehicles under a new brand. The JV appears to be aimed specifically at the Chinese market and would be Ford’s 3^rd joint venture partner in China. Memo: Ford is following the lead of GM and Daimler by planning a China-only EV brand developed with a partner. (Ford)
• Audi will partner with Chinese firm Hanergy to create panoramic roofs than contain solar cells to extend the range of vehicles. Memo: Tesla have said that they don’t believe the technology is cost effective yet. (Audi)
• Electric commercial vehicle start-up Arrival (formerly Charge) will supply vehicles to the Royal Mail for testing. The 3.5 to 7.5 tonne trucks have a range of around 100 miles (Wired). The Royal Mail also announced that it has ordered 100 electric vans from Peugeot. (International Business Times).
  • Implication: much like DHL, the Royal Mail has a substantial fleet in operation (almost 50,000 vehicles of varying sizes) and would change the shape of the market if it were persuaded to adopt electrification on a grand scale.

Connectivity

• Cubic Telecom has raised $46.5 million from a variety of sources, including existing investor Audi. (TechCrunch)
• Tesla CEO Elon Musk said that the company would soon store driver profiles in the cloud so that different drivers of the same car could have their settings used without having to manual program them in (and also use different cars). (Futurism)

Other

• Car financing start-up AutoFi raised $10 million from a group of investors, including existing investor and service user Ford Credit. (Reuters)
• German flying car start-up Lilium said that they are aiming to have a service in operation by 2025. (Futurism)

What happened in the automotive industry last week? Please enjoy the round-up for the week commencing 14^th August 2017. Stories are arranged by company and topic, there are duplicates in case are only interested in some sections. A PDF version can be found here. If you’re happy with just the text version then please read on…

Favourite stories this week…?

FCA joining BMW’s autonomous program shows that BMW wasn’t bluffing when it said it wanted to involve others in creating a multi-brand platform. Membership seems to have been offered at an affordable level and it will be interesting to see whether the consortium now gains momentum and standalone programs start to look somewhat passé.

The other thing catching my eye was Maven (GM) saying that its electric cars are travelling 30% more than ICE vehicles used for ride hailing services. Assuming this isn’t on too small a sample size, it suggests the range anxiety argument against electric taxis is defeated. It also indicates hidden advantages for electric cars, which in the case of taxis can create meaningful revenue increases.

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Company-by-company rundown

BMW

• FCA signed an MoU with the intention of joining the BMW-led consortium developing an autonomous driving platform. As part of the agreement, it is envisaged that FCA will contribute engineering resource, to be located alongside the other partners in Germany. (BMW)

Daimler

• Switching Smart’s line-up to all-electric in the US from 2018 onwards reportedly means that the dealer body will be halved in size — from 58 to 27 sites. (Autofactil)

FCA

• Signed an MoU with the intention of joining the BMW-led consortium developing an autonomous driving platform. As part of the agreement, it is envisaged that FCA will contribute engineering resource, to be located alongside the other partners in Germany. (BMW)
• Automotive News broke a story that FCA had been the target of a bid from a “well-known Chinese automaker” (reportedly rejected as too low). As media jumped on the story, denials emerged from Dongfeng, Guangzhou, Geely, leaving Great Wall as the remaining name on everyone’s lips. (Reuters)

Ford

• Held an event in San Francisco where CEO Jim Hackett said that he believed autonomy would not lead to a big reduction in sales or car ownership. He was also non-committal on the current status of Ford’s previous commitment to bring a driverless car to market by 2021. (Detroit News)
  • Implication: Hackett’s analysis conflicts with Ad Punctum’s own research. Our belief is that low costs can only be achieved with individuals opting for subscription taxi services over outright ownership. Without this option, we foresee purchases being limited to the wealthiest consumers. The inherent benefit of Hackett’s perspective for an in-house strategy and communications team is that you don’t need to plan a way to exit a massive dealer network. As Hackett himself was quoted as saying “I’m not ready to admit that Ford is facing a world where it’s losing a lot of personal buyers”.
• Showed the all-electric commercial vehicle developed with DHL / StreetScooter. Named the StreetScooter Work XL, the vehicle can be fitted with a range of battery sizes (30 – 90 kWh = 80 – 200km range) and has different payload configurations. (Ford)
• In an interview, the CEO of Argo.ai (in which Ford has a majority stake) talked about how and why his AI philosophy avoids deep learning algorithms and that the plan is have around 200 employees by the end of the year (from around 100 now and virtually none at the beginning of the year). (The Verge)
• Announced that it will host a hackathon-style event in Paris over 25-26 October with a €30,000 prize on offer for the best entries. (Ford)
• Copies of Ford’s patent for a removable steering were released. Having previously publicised its plans for a vehicle without a steering wheel by 2021, Ford believe that a removable device is required for a variety of use cases, including: extreme manoeuvre testing of production-intent vehicles and retrofitting steering wheels for users who are put off travelling in a vehicle where they are unable to take control. (US Patent Office)

Geely (includes Volvo)

• Denied it was interested in buying FCA. (Reuters)

General Motors

• Said it will delist from the Toronto stock exchange effective November 30^th (GM)
• Said that its Maven Gig service would expand the number of battery electric Bolt vehicles available in key markets. According to Maven, Bolts are driven on average 30% further each day than comparable ICE vehicles. (Electrek)

Hyundai / Kia

• Said that it had accelerated its plan for rollout of all-electric and fuel cell vehicles. Hyundai and Kia will launch 31 “eco-friendly” vehicles by 2020 (eco-friendly in Hyundai-Kia’s nomenclature includes PHEVs, BEVs and fuel cell vehicles) including 8 BEVs and 2 FCEVs. Specific highlights include: a BEV version of its Kona compact SUV with 390km range in 2018, a BEV Genesis luxury saloon in 2021 and a BEV with a 500km range after 2021. (Hyundai)

Tata (includes JLR)

• Tata Motors announced a new CFO, P B Balaji joins the company from Hindustan Unilever. (Tata)

Toyota

• A patent for a “cloaking device” filed by Toyota that uses thin screens and external cameras to embed screens in vehicle A pillars and improve driver visibility invited the internet to speculate about James Bond’s Aston Martin Vanish from Die Another Day finally reaching production reality. (Free Patents Online)
• Announced it Sevco Pacific as a partner in its tests to develop the Toyota Mobility Services Platform, which has been developed with help from Getaround. Sevco, a Toyota dealer in Hawaii, will use the in-house developed hardware and software to run a car sharing scheme. (Toyota)

VW Group

• Announced that it would put an all-electric microbus, modelled after the ID Buzz concept, into serial production by 2022 (VW)
• Highlighted in an in-house magazine article how it was reducing costs on its Indian products, in particular by changing material specifications because Indian suppliers cannot provide the same range as VW’s traditional European supply base. Although this increases regional complexity, VW believes it leads to reduced costs. (VW)

Other

• McLaren is reportedly planning an all-electric model to arrive sometime after 2018, although with supposed production volume of five units, “production model” may simply be semantics. (Autocar)
• BAIC’s electric vehicle subsidiary BAIC BJEV raised $1.6 billion in Series B funding to expand its line-up and production facilities. Following the funding, BAIC will own 41.19% of the venture. (China Money Network)
• German dealers reported that Euro 5 and older diesels were starting to show a significantly longer average time in industry than newer Euro 6 diesels and gasoline engines. (Autohaus)
• The German manufacturers association the VDA calculated the benefit of the software update measures agreed at the recent diesel summit as a 14% reduction in emissions. The figure was however challenged by environmental groups who said the impact would be near zero and even a 14% reduction would be insufficient to avoid city bans. (Manager Magazin)
• The recruitment of a second former Aston Martin executive, plus reference to an electric car program in UK government documents, led to speculation about the increasing maturity of an electric vehicle program from Dyson. (Bloomberg)

Memo: If true, this wouldn’t be the first time that vacuum cleaning expertise has been enlisted on a vehicle. Hoover were the servicing partner for the Sinclair C5.

And now for the other news…

Economic / Political News

• German chancellor Angela Merkel said that she approved of the approach taken by British and French authorities to outline likely timelines for an end to sales of internal combustion engine vehicles (with legislation intended to follow) but wouldn’t be drawn on what the right end date for Germany would be. (Autocar). She also said that the target of putting 1 million electric vehicles on German roads had not been abandoned and more must be done to reach it. (Reuters)
  • Implication: Germany’s existing commitment under the COP21 environmental agreement was for “almost greenhouse gas-neutral transport by 2050” — indicating an end to ICE vehicles by then. (Clean Energy)
• Lookers, one of the UK’s largest dealer groups, said that it expected the market to contract 3% in 2017. Rival dealer Marshall Motors said it was cautious. (Reuters)
• Concerns emerged in the UK press over the enablers needed for a wholesale switch from internal combustion engines to electric vehicles, namely a considerable increase in electricity generating capacity — which could mean more nuclear power stations. Well-to-wheel data enthusiasts may finally have their day. (Telegraph)
• UK trade body the SMMT welcomed the UK Government’s proposals for post-Brexit frictionless borders (see here) but repeated its call for a transition period with membership of the customs union and single market. The EU is not currently negotiating either item, preferring to concentrate on the financial penalties of separation. (SMMT)

Suppliers

• Autoliv announced a partnership with Seeing Machines to develop driver monitoring systems (seeing aimed at L3 autonomous cars). (Autoliv)
• Delphi announced a partnership with Innoviz to use the latter’s LIDAR technology in driverless systems that Delphi is developing. (Delphi)

Dealers

• UK dealership group Pentagon Motor Holdings has been taken over by South Africa’s Motus Corporation (which already has a CV franchise presence in the UK). The 21 site group has been sold for around £28.5 million. (Automotive Manager)

Ride-Hailing, Car Sharing & Rental

• Uber’s chief product officer indicated that the company was targeting 2023 (memo: testing will apparently start in 2020) for a mass rollout of a flying taxi service and was interested in operating in Australian cities Melbourne and Sydney. (Herald Sun)
• Uber agreed to a 20-year monitoring period in order to settle a case with the US’s FTC over its “God View” data collection platform. (BBC)
• Uber had its licence to operate in the Philippines suspended for one month because of the number of drivers operating on the service who are not fully registered with the government. (TechCrunch)
• Uber has revised its Uber for Business interface to make it easier for companies to set limits on how employees can use the platform. The update comes after Lyft has made a raft of changes to its business offering in order to become more appealing. (TechCrunch)

Driverless / Autonomy

• NuTonomy said that it hopes to begin operating a paid-for service in Singapore using driverless vehicles from Q2 2018 onwards. The company intends to partner with Grab to offer the new service. (Reuters)
• Autonomous truck startup TuSimple has raised $20 million from a group of investors including Nvidia. (TechCrunch)
• 3M is testing transparent stickers that can be placed onto existing street signs in order to give autonomous vehicles additional information and reduce the need for cameras to use visual recognition (for instance, QR barcodes can be embedded in the stickers). (Business Insider)
• Patent pictures appeared to show the design of Waymo / Google’s intended driverless car dashboard. The image features prominent “Go” and “Stop Now” buttons and appears configured for independent passengers. (Business Insider)
• In an interview, the CEO of ai (in which Ford has a majority stake) talked about how and why his AI philosophy avoids deep learning algorithms and that the plan is have around 200 employees by the end of the year (from around 100 now and virtually none at the beginning of the year). (The Verge)
• Autoliv announced a partnership with Seeing Machines to develop driver monitoring systems (seeing aimed at L3 autonomous cars). (Autoliv)
• Delphi announced a partnership with Innoviz to use the latter’s LIDAR technology in driverless systems that Delphi is developing. (Delphi)
• Copies of Ford’s patent for a removable steering were released. Having previously publicised its plans for a vehicle without a steering wheel by 2021, Ford believe that a removable device is required for a variety of use cases, including: extreme manoeuvre testing of production-intent vehicles and retrofitting steering wheels for users who are put off travelling in a vehicle where they are unable to take control. (US Patent Office)
• South Korea will purchase up to 200 autonomous pods from UK sportscar manufacturer Westfield in a £30 million deal. The pods are the same type that are undergoing trials in London. (The Manufacturer)
• Lyft’s director of product said in an interview that he believes drivers will continue to be core to the company’s offering, event with the advent of autonomous vehicles, although he des believe that they will not be required for all journeys. (Recode)
  • Implication: consistent with Ad Punctum’s own analysis, Lyft foresee mixed fleets of driven and driverless vehicles as being more adaptable to changes in the environment.

Electrification

• BAIC’s electric vehicle subsidiary BAIC BJEV raised $1.6 billion in Series B funding to expand its line-up and production facilities. Following the funding, BAIC will own 41.19% of the venture. (China Money Network)
• Hyundai / Kia said that it had accelerated its plan for rollout of all-electric and fuel cell vehicles. Hyundai and Kia will launch 31 “eco-friendly” vehicles by 2020 (eco-friendly in Hyundai-Kia’s nomenclature includes PHEVs, BEVs and fuel cell vehicles) including 8 BEVs and 2 FCEVs. Specific highlights include: a BEV version of its Kona compact SUV with 390km range in 2018, a BEV Genesis luxury saloon in 2021 and a BEV with a 500km range after 2021. (Hyundai)
• Future Mobility raised an additional $200 million, valuing the company at $750 million. (China Money Network)
• Ford showed the all-electric commercial vehicle developed with DHL / StreetScooter. Named the StreetScooter Work XL, the vehicle can be fitted with a range of battery sizes (30 – 90 kWh = 80 – 200km range) and has different payload configurations. (Ford)
• Erstwhile electric truck developer Nikola Motors unveiled the Zero, an all-terrain four-seater BEV with a range of up to 200 miles and a price tag pf $35,000. (Nikola Motors)
• A pilot vehicle-to-grid scheme in Denmark operated by Nissan and Enel is paying a company €1,300 per vehicle per year to allow its plugged in vehicles to be use for grid management. It isn’t clear if this is a special incentive to participate in the scheme or the energy company genuinely believe V2G systems are profitable at this level. (Bloomberg)

Connectivity

• Naver Labs unveiled the production version of its in-car-entertainment platform called Away and an aftermarket fit head unit that uses the service. It is trialling the product in vehicles owned by car sharing company Green Car. (ET News)
• Researchers said that inherent vulnerabilities in the CAN architecture used to connect systems inside the car meant car systems could be attacked in a way that existing security systems may not detect. The hack they presented doesn’t allow control to be taken over but it can shut the vehicle down by overwhelming it with requests. At present, this is near impossible to do in production vehicles because it requires a direct link into CAN (which is normally only available by physically plugging in). (Wired)

Other

• DeLorean Aerospace (founded by the nephew of the stainless-steel car making visionary) showed off his design for a flying car named DR-7, with a planned range of 120 miles. (Wired)
• Bicycle rental company oBike has raised $45 million in a series B round (oBike)
• Bicycle rental company Youon raised $87 million in its IPO. The company operates a mix of dockless bikes and more traditional docking stations so could be an interesting bellweather of operational trends. (China Money Network)

What happened in the automotive industry last week? Please enjoy the round-up for the week commencing 7^th August 2017. Stories are arranged by company and topic, there are duplicates in case are only interested in some sections. A PDF version can be found here. If you’re happy with just the text version then please read on…

Favourite story this week…? It must be Mazda’s 2030 vision. The company is being boldly transparent with the fact that it isn’t planning for electrification to be anything more than a sideshow in the near term and instead its working hard on continuous updates to its internal combustion engine range.

In addition to the obvious cost argument, Mazda clearly believes it can hold its own in environmental terms as well. Nevertheless, its somewhat swimming against the tide, at least in part based on market forecasts that appear worrying out of date (unless someone forgot to update the chart footnotes?). Fast forward a few years and Mazda will either be receiving praise for their capital discipline or will have become a cautionary tale for closed-minded thinking. I’ve got a lot of time for the Mazda team so whilst I don’t really agree with their market outlook, I’m hoping that they make it somehow.

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Company-by-company rundown

BMW

• Offered UK drivers a £2,000 trade-in bonus on older diesel vehicles, similar to the one in Germany and surely not simply an increase in variable marketing spending. Other countries will get the incentives too. (Autocar)

Daimler

• Said that the Mercedes-Benz truck division has begun using 3D printed parts for rarely-used spare parts made out of plastic. (The Manufacturer)

Ford

• Is reportedly under investigation by German regulators over possible diesel emission testing irregularities in Mondeo 2.0 litre models. Although the engine is used by other Ford nameplates and PSA, enquiries appear limited to the Mondeo at present. (Manager Magazin)

General Motors

• Cruise unveiled a ride-hailing service called Cruise Anywhere which its employees have been using to summon self-driving vehicles around San Francisco. Cruise said that the ultimate aim was to open the service to the public after extensive testing. (TechCrunch)
• May have to give $1 billion of stock to “Old GM”, the trust that owns the remnants of the pre-Chapter 11 bankruptcy firm if Old GM accepts responsibility for a historic safety concern. Doing so would push total safety liabilities above a threshold agreed in 2009 that requires GM to contribute the additional $1 billion. (Detroit News)
• Was forced to deny that it is seriously considering closing its operations in South Korea. (Chosun Ibo)

Hyundai / Kia

• Media updates on Hyundai’s project to showcase self-driving vehicles at the 2018 Winter Olympics said that high definition maps, accurate to 10cm, were at the centre of the company’s autonomous strategy — especially due to the snow expected at the Winter Olympics site. (ET News)

Mazda

• Mazda announced their vision to 2030 branded “Zoom-Zoom 2030”. The plan is light on electrification (although it promises limited application from 2019 onwards) and focuses on using improved ICE technology and weight reduction to reduce environmental impact. Mazda believe that electric and fuel cell vehicles will be about 15% of global demand by 2035 — although they appear to be informed by quite old (2012) data. (Mazda)
• Mazda’s plan for autonomy is to introduce an “autonomous” system called Mazda Co-Pilot as standard by 2025 although it isn’t quite clear what capabilities the system will have. It also appears that Mazda aim to create a sort of peer-to-peer sharing scheme using autonomous vehicles. (Mazda)
• Announced the SKYACTIV-X gasoline engine, underpinned by HCCI (sometimes uses compression ignition rather than spark ignition) technology and a supercharger. Mazda claim a 20 – 30 % improvement in fuel efficiency over the outgoing engine and economy equal to or better than a diesel engine. (Mazda — via Scribd)
  • Implication: Although carmakers have worked on HCCI for many years (for example, this 2008 Vauxhall test vehicle), the technology is tricky to master since the combustion mode keeps changing between compression and spark ignition and unless specifically called for, uncontrolled compression ignition can damage the engine. HCCI, along with lab work on combined 2 stroke / 4 stroke combustion (an even harder challenge) probably represents the two best chances to improve ICE emissions considerably with relatively cheap sensors and software rather than more sophisticated hardware (although we should note that Mazda has used a not-so-cheap supercharger on this engine).

Nissan (includes Mitsubishi)

• Selling its battery business to GSR Capital. In order to complete the transaction, Nissan will first buy out NEC’s share of the JV and then sell the complete business. The deal includes three manufacturing sites. (Nissan)
• Said that 60% of customers were taking the opportunity to add personalisation options to their new Nissan Micras, spending an average of €400 each in order to do so. Nissan said the ability to personalise the vehicle was the number one reason for purchase given by customers. (Nissan)

PSA (includes Opel/Vauxhall)

• Opel has now announced a series of scrappage incentives in Germany. Similar to Ford’s strategy, Opel is offering much larger discounts on bigger cars that on small ones. (Handelsblatt)
• Opel trumpeted that the Insignia had gathered 50,000 orders so far, with a over 60 percent of customers choosing the highest trim levels (which is often the case when dealers first order brand new models). (Opel)
• Announced that it had received approval to take over the financial services business of Opel and Vauxhall (in partnership with BNP Paribas). (PSA)

Renault

• Concluded the joint venture agreement with IDRO and NEGIN Holding for additional operations in Iran (on top of the 200,000 unit plant it already has). Renault will own a majority of the business but there will be a “first period of joint control” with the other partners. (Renault)

Tata (includes JLR)

• Announced July sales figures. Tata sold 98,534 units globally, up 12% year-over-year, of which JLR was 51,245 vehicles. (Tata)
• JLR reported financial results for Q2 2017 (the first quarter in its financial year). Revenue of £5.6 billion was up 5% on a year-over-year basis but pre-tax profit of £595 million was well down on £399 million in the prior year once the effect of a £437 million on-time item related to pensions accounting was removed. (JLR)
• Announced that, following in-depth discussions with Škoda, it would not create a partnership in small vehicles because “the envisioned areas of partnership may not yield the desired synergies are originally assessed”. Tata said that the two parties would “keep in touch”. (Tata)

Tesla

• Said it was issuing $1.8 billion in bonds (up from an initial $1.5 billion due to investor appetite) in order to strengthen its balance sheet. The bonds will pay 5.3%. and are due in 2025 (Tesla)
• Leaked emails showed that Tesla’s semi-truck program intends to make use of self-driving capability and platooning (where the vehicles follows closely behind one another). If Tesla could master automated platooning on highways then, even if the lead vehicle still needed a human driver, costs could be drastically cut on long journeys ahead of developing fully autonomous capability. (Reuters)
• Revealed that the battery supplier for its Australian stationery storage project would be Samsung SDI. The reason for the shift from Panasonic may be in order to preserve all Gigafactory-produced cells for Model 3. (Electrek)
• Began shipping an upgraded Autopilot hardware suite as part of Model 3 launch. The main visible difference is an additional camera (facing the driver) but there are also chipset changes which Tesla said are minor but Teslerati speculated are a big step towards the level of computing power needed for full autonomy. (Electrek)

Toyota

• Announced the creation of a consortium with partners including Denso, Ericsson, Intel and NTT to explore infrastructure requirements for connected vehicles. Toyota expects V2C transfer of 10 exabytes per month by 2025. (Toyota)
• Said that it will delay the launch of its new plant in Mexico from 2019 to the first half of 2020 because its new JV with Mazda will produce the car originally planned for the plant and it needs time to switch to a new model. (Reuters)

VW Group

• Announced group sales in July of 820,900 units globally, up 4.3% on a year-over-year basis. (VW)
• In an interview for VW’s in-house magazine, VW brand CEO Herbert Diess said that the company had a productivity gap to Toyota and Hyundai and needed to acknowledge that Tesla’s capabilities stretched beyond electric powertrain and into areas such as autonomous driving, connectivity and distribution — in particular he admired Tesla’s 50% mix of software engineers saying VW’s capability was “far too small”. Diess also revealed that he wears a tie for important meetings but finds it pleasant to do without one in summer months. (VW)
• VW is over-achieving its cost reduction targets and will save an additional €500 million in 2017 versus prior expectations, according to the works council leader. He also said that he wanted more models assigned to German plants because it was “crucial” for the company’s success, and delivery of the “Future Pact” labour agreement to have high capacity utilisation in Germany, threatening to hold-up approval of longer term spending plans if new models were not planned for German factories. (Reuters)
• Saw politicians from both the Green and Free Democrats advocate a sell-off of (German region) Lower Saxony’s shareholding in the company, arguing that the stake neither protected jobs nor improved corporate governance. The CDU said that they would retain the stake but change the nature of board representation. (Handelsblatt)
• Tata announced that, following in-depth discussions with Škoda, it would not create a partnership in small vehicles because “the envisioned areas of partnership may not yield the desired synergies are originally assessed”. Tata said that the two parties would “keep in touch”. (Tata)
• SEAT are reportedly contemplating launching Cupra as a standalone brand. (Autofactil)

Other

• Carmakers will reportedly take part in a second diesel summit with the German government. The aims of this new session aren’t yet clear. (Reuters)

And now for the other news…

Economic / Political News

• German chancellor Angela Merkel said she wasn’t in favour of a proposal to create a mandatory level of electric car sales in Germany (and possibly the whole EU) made by her nearest election rival, Martin Schulz. (Reuters)
• The UK chancellor and international trade secretary presented a united front in calling for a time-limited transition period after March 2019 as part of Brexit arrangements but also ruled out joining the customs union or staying in the EU. (BBC)

Suppliers

• Schaeffler reported financial results for the first half of 2017. Group net income of €485 million was described as “stable”, with the automotive division having a “weak” performance despite a small growth in revenue. (Schaeffler)
• Denso announced it would create a new company called NSITEXE to develop semiconductor cores for chips that can be used for autonomous driving. Denso’s intention is that the new technology would be widely licensed, seeming aping ARM’s successful strategy with mobile phone chips. (Denso)
• Magna announced Q2 2017 financial results. Revenue of $9.7 billion was up 3% on a year-over-year basis, whilst adjusted EBIT was slightly down. The company raised its 2017 outlook. (Magna)
• Hyundai Mobis said that it had completed construction on its hydrogen fuel cell module factory located in Cheongju, South Korea. The initial production capacity of 3,000 vehicle sets per year can be scaled up to tens of thousands if the demand materialises (Business Korea).

Ride-Hailing, Car Sharing & Rental

• Ride-hailing firm Careem announced a financing agreement with Didi Chuxing to expand its presence in the Middle East. (TechCrunch)
• SoftBank’s CEO said that the company was interested in taking a stake in either Uber or Lyft to complement its ride-share holdings in other regions. (TechCrunch). Softbank weren’t alone in their courting of Uber however, as rumours emerged of an alternate investment group looking to increase their shareholdings (Recode)
• Uber’s former CEO and founder Travis Kalanick was sued by major shareholder Benchmark Capital, a move that was criticised by other shareholders. (TechCrunch)
• Uber announced a new feature that allows passengers to text the driver ahead of the pick-up to give information such as how to spot them at the side of the road. The message is read aloud to the driver by the app. (Uber)
• Uber’s Xchange leasing program to provide cars to drivers is reportedly losing $9,000 per vehicle and the company is considering options for the unit including closure or sale. (Wall Street Journal)
  • Implication: As we’ve said many time before, and detailed in our approach to mobility business model presentation, excessive vertical integration may seem intellectually appealing but is often a path to poor capital allocation and distraction. This could be an exception to a track record of flawless execution or and indicator that even Uber suffers from corporate bloat. The alleged misunderstanding that losses per vehicle were $500 rather than $9,000 is particularly worrying.
• Lyft has bought YesGraph and DataScore. YesGraph’s team will work on driver retention and DataScore’s expertise will be applied to customer acquisition and retention. (Lyft)
• GM subsidiary Cruise unveiled a ride-hailing service called Cruise Anywhere which its employees have been using to summon self-driving vehicles around San Francisco. Cruise said that the ultimate aim was to open the service to the public after extensive testing. (TechCrunch)

 Driverless / Autonomy

• Intel announced the closure of the Mobileye takeover and that it was commissioning a self-driving car test fleet of 100 vehicles. The fleet will be formed of multiple different car brands and nameplates. (Intel)
• Foxconn’s CEO said that the company was looking for a suitable site in Michigan for a development centre that would focus on next generation technology and self-driving cars. (Detroit News)
• Media updates on Hyundai’s project to showcase self-driving vehicles at the 2018 Winter Olympics said that high definition maps, accurate to 10cm, were at the centre of the company’s autonomous strategy — especially due to the snow expected at the Winter Olympics site. (ET News)
• Indian self-driving truck start-up Flux Auto says that it is eschewing LIDAR in favour of “cheap cameras”. The company believes it can offer a bolt-on product for $3,000 – $4,000. (TechCrunch)
• LIDAR maker Oryx Vision has raised $50 million in its series B round. (TechCrunch)

Electrification

• German chancellor Angela Merkel said she wasn’t in favour of a proposal to create a mandatory level of electric car sales in Germany (and possibly the whole EU) made by her nearest election rival, Martin Schulz. (Reuters)
• Bollinger Motors said that their launch vehicle, the B1 (an off-roader with striking similarity to a Land Rover Defender) had attracted 6,000 no-commitment expressions of interest within two weeks of first being shown to the public. Pre-orders with a $1,000 deposit will begin later this year.. (InsideEVs)
• US start-up Chanje came out of stealth mode, revealing its all-electric medium (c 2T sized) commercial vehicle, created with funding from FDG Electric Vehicles Limited. (Chanje)
• A stretch of highway in Germany will have 600V overhead electric cables installed by Siemens in order to test electric trucks. Similar sites already operate in Sweden and California. (Golem)
• Battery supplier GS Yuasa reportedly plans to double battery range by 2020. The company currently has a joint venture with Mitsubishi for automotive batteries but it isn’t clear how this legacy investment will figure following Nissan’s investment. (Inside EVs)
• Indian company JSW Energy said that it intended to launch its own electric vehicle by 2020 which would be “world class”. It will also produce its own batteries and create charging infrastructure. JSW Energy said it would be committing Rs 4,000 crore (about $600 million) to the project. The company is looking for technology partners, particularly in powertrain. (The Economic Times)
• Nissan is selling its battery business to GSR Capital. In order to complete the transaction, Nissan will first buy out NEC’s share of the JV and then sell the complete business. The deal includes three manufacturing sites. (Nissan)

Connectivity

• Toyota announced the creation of a consortium with partners including Denso, Ericsson, Intel and NTT to explore infrastructure requirements for connected vehicles. Toyota expects V2C transfer of 10 exabytes per month by 2025. (Toyota)

 Other

• Cardash launched a service where time-poor customers can call out a representative to quote for work and then take their car to and from the service centre if they agree with the quote. The company has raised $5.3 million dollars and the business model appears to be based on getting bulk discounts from car service centres as well as whatever premium people will be prepared to pay for not having to organise the servicing themselves. (TechCrunch)
• US online used car sales group Carvana said it was buying fellow online sales platform Carlypso. (Fortune)
• Alibaba announced plans for a car “vending machine” that allows buyers to browse the vehicles via an app and then drive away their chosen ride after making a 10% deposit via electronic transfer of funds. After a similar facility was installed in Singapore, the owner claimed a 30% increase in sales. (International Business Times)
• UK aftermarket parts supplier Parts Alliance was acquired by Canadian company Uni-Select in a £205 million deal. (Automotive Manager)

Here are some links to transcripts for Tesla earnings calls. Transcripts are sometimes hard to find (for free) and so we thought it would be worthwhile lending a hand.

2017 2^nd August — Tesla Q2 2017 Earnings Call

Transcript on Seeking Alpha (External Link)

2017 6^th June — Tesla 2017 Annual Meeting

Transcript on Seeking Alpha (External Link)

2017 3^rd May — Tesla Q1 2017 Earnings Call

Transcript on Seeking Alpha (External Link)

2017 19^th February — Tesla Q4 / FY 2016 Earnings Call

Transcript on Seeking Alpha (External Link)

2016 1^st November — Tesla Finalisation of SolarCity purchase

Transcript on Seeking Alpha (External Link)

2016 14^th October — Tesla Q3 2016 Earnings Call

Transcript on Seeking Alpha (External Link)

2016 3^rd August — Tesla Q2 2016 Earnings Call

Transcript on Seeking Alpha (External Link)

2016 22^nd June — Tesla Offer to buy SolarCity

Transcript on Seeking Alpha (External Link)

2016 4^th May — Tesla Q1 2016 Earnings Call

Transcript on Seeking Alpha (External Link)

2016 10^th February — Tesla Q4 / FY 2015 Earnings Call

Transcript on Seeking Alpha (External Link)

2015 3^rd November — Tesla Q3 2015 Earnings Call

Transcript on Seeking Alpha (External Link)

2015 23^rd July — Tesla Q2 2015 Earnings Call

Transcript on Seeking Alpha (External Link)

2015 3^rd May — Tesla Q1 2015 Earnings Call

Transcript on Seeking Alpha (External Link)

What happened in the automotive industry last week? Please enjoy the round-up for the week commencing 31^st July 2017. Stories are arranged by company and topic, there are duplicates in case are only interested in some sections. A PDF version can be found here. If you’re happy with just the text version then please read on…

Favourite stories this week…? Overshadowed somewhat by talk of the diesel summit in Germany were two interesting stories.

The first was Toyota and Mazda’s share tie-up and the accompanying JV to build a new US plant. With small stakes and broad product and engineering sharing agreements with Subaru and Isuzu already in place, the Mazda move represents the third smaller Japanese OEM that appears to have been drawn inexorably into Toyota’s orbit (Mazda defenders may protest that this is a smaller deal than the Ford stake). That leaves one company with a sharing agreement but no equity stake: Suzuki. A tie-up between Toyota and Suzuki would be big news in both small cars and emerging markets so let’s watch this space to see if the Mazda deal is setting a template.

The other comment-worthy piece was Magna’s CEO setting a far more bearish stance on electrification growth than pretty much everyone else. On the one hand, this is worth taking fairly seriously because Magna has got a firm footing in these technologies. On the other, an uncertain outlook where OEMs had to hedge their bets would be in Magna’s favour (lots of lovely niche contract manufacturing jobs might arise).

Find our archive here.

SIGN UP FOR THE WEEKLY UPDATED TO BE EMAILED TO YOU HERE

Company-by-company rundown

BMW

• Reported Q2 2017 financial results. Automotive revenue of €49.25 billion was up 7.4% on a year-over-year basis. Automotive EBIT of €2.24 billion was up 2.8%. (BMW)
• Following the German diesel summit, BMW called for “objective discussions based on facts and scientific evidence”, it also launched a €2k additional trade-in “environmental bonus” for owners of E4 and earlier diesel vehicles. (BMW)
• BMW’s CEO called on non-German carmakers to contribute a €500 million fund set up by German carmakers and the government as a result of the diesel summit. (Reuters)
• Saw BMW’s partner in its carbon fibre joint venture, SGL Group, speculate that it might buy the automaker out of its stake in the company. (Reuters)

Daimler

• Following the diesel summit, Daimler announced that it had “once again expanded” its package of measures to improve diesel emissions with a four-digit environment bonus for EU4 vehicles and an accelerated introduction of new powertrains (although it wasn’t clear what baseline this was against). (Daimler)
• Has made an investment of €25 million in flying taxi company Volocopter. (Reuters)
• Daimler subsidiary Moovel has purchased location sharing app Familionet. (Handelsblatt)

Ford

• Ahead of taking part in the German diesel summit, Ford announced a trade-in incentive of up to €8,000 for EU3 vehicles (cars registered before 1^st January 2003). Beyond the apparent generosity of the headline, Ford’s incentive offer looks like it is aimed at a small number of vehicles and the full incentive only applies to the most expensive vehicles in its range. (Handelsblatt)
• Announced July sales figures for the US. Total sales of 200,212 units were down (7.5)% on a year-over-year basis. SUVs were the only segment where Ford gained sales with trucks as well as passenger cars down YoY. Ford blamed a stop-sale on Transit for the lower truck volumes. (Ford)
• Following an interview with the CFO, Reuters wrote an article about Ford’s progress on its 100 day plan. India appears to be an area of considerable focus, with the company weighing future growth against current profitability. The timing and investment of Ford’s current commitment to bring a self-driving vehicle to market by 2021 are also said to be under review as well as possible cessation of Mondeo production in Europe. (Reuters)

Geely (includes Volvo)

• Ford is reportedly preparing a case against Geely’s Lynk & Co brand saying that it sounds too similar to Lincoln. Ford has a mid-November deadline for filing a case. (CCFA)
• Volvo reported July sales of 44,278 units, up 6.2% on a year-over-year basis. Sales are up 7.9% YTD. (Volvo)
• Sources within Geely and Volvo said that arrangements for Geely vehicles to use Volvo sourced powertrains had been firmed up and the first product to be shared would be a 1.5 litre turbocharged gasoline engine (still under development), with sharing of the recently launched 2.0 litre engine to come later. (Reuters)

General Motors

• Will recall 800,000 2014MY pick-up trucks due to problems with power steering. (The Guardian)
• Announced the closure of the deal to sell the automotive business of Opel and Vauxhall to PSA (financial business sale is ongoing). The press release re-affirmed that PSA and GM will work together on electric propulsion. (GM)

Honda

• Reported financial results for Q2 2017 (1Q of Honda’s financial year). Revenue of 3.7 trillion yen was up 7% on a year-over-year basis. PBT of 335 billion yen was up 16% YoY. These results led to Honda increasing its full year forecast. (Honda)

Hyundai / Kia

• Hyundai reported July sales of 333,180 units, down (1.8)% on a year-over-year basis and down (7.4)% YTD. (Hyundai)
• Kia reported July sales of 216,118 vehicles, down (5.6)% on a year-over-year basis and down (8.9)% YTD. (Kia)

Mazda

• Announced that it would deepen its existing cooperation with Toyota. As a part of the move, Toyota is taking a 5% stake in Mazda via newly issued shares and Mazda will take a 0.25% stake in Toyota. The cooperation will create a JV factory to produce 300,000 units in the US with start of production in 2021 as well as joint engineering projects and product sharing (currently confined to Japan). (Mazda)
  • Very much in line with our earlier M&A outlook
  • Implication: this is an interesting investment decision given that within the last decade both Mazda and Toyota have ended JV manufacturing relationships in the US (Flat Rock and NUMMI respectively).
• Reported financial results for Q2 2017 (1Q of Mazda’s financial year). Revenue of 802 billion yen was up 3% on a year-over-year basis whilst operating profit was 40 billion yen, down (24)% YoY. (Mazda)

Nissan (includes Mitsubishi)

• The attempt by US union the UAW to organise the nearly 6,000 workers at Nissan’s Mississippi plant failed. (The Guardian)

PSA (includes Opel/Vauxhall)

• Announced the closure of the deal to buy automotive elements of Opel and Vauxhall (the financial business sale is still ongoing). The clock is now ticking on the 100 day plan. PSA also announced a series of executive management appointments, with PSA managers taking over the Finance and Manufacturing briefs. (PSA)
  • Implication: although PSA have denied that cost cuts are necessary, expect at a minimum that the 100 day plan creates some tough options for the Opel and Vauxhall workforce (pay freeze plus some layoffs versus large scale redundancy). By appointing PSA staff to manufacturing and finance roles, CEO Tavares is ensuring that these discussions will be held with little sentimentality at the executive level.
• The press release for the sale of Opel and Vauxhall re-affirmed that PSA and GM will work together on electric propulsion. (GM)

Suzuki

• Reported financial results for Q2 2017 (1Q of Suzuki’s financial year). Net revenues of 869 billion yen were up 15.3% on a year-over-year basis. Operating income of 85.1 billion yen was up 43.8% YoY. (Suzuki)

Tesla

• Released Q2 2017 financial results. Automotive revenue was almost doubled on a year-over-year basis, although down on the prior quarter. Automotive gross margin of 25.0% was up on a year-over year basis, but down versus the prior quarter. Tesla expects to spend $2 billion in the 2^nd half of 2017 as the bill for Model 3 F&T comes due. (Tesla)
• CEO Elon Musk said that although new orders for the Model 3 were being made at a rate of 1,800 per day, cancellations and conversions to Model S and X meant that the total order book now stood at 455,000 units. (Business Insider)
• Said that Model Y will be very similar to Model 3 after all, reversing an earlier course of creating a new platform. (TechCrunch)
• Confirmed that its director of battery technology has left the company. (Bloomberg)
• Researchers forecast that Tesla batteries will take around 25 years for state of charge to degrade to 80% of new. The data was gathered from Model X and S vehicles on the road today. Note that in a recent Nissan Leaf trial, the time period was around 10 years (Tesla Roadster batteries also have a shorter lifespan). (InsideEVs)

Toyota

• Announced that it would deepen its existing cooperation with Mazda. As a part of the move, Toyota is taking a 5% stake in Mazda via newly issued shares and Mazda will take a 0.25% stake in Toyota. The cooperation will create a JV factory to produce 300,000 units in the US with start of production in 2021 as well as joint engineering projects and product sharing (currently confined to Japan). (Mazda)
  • Very much in line with our earlier M&A outlook and could be setting a template for Toyota’s collaboration with Suzuki.
• Said that it was investing an additional 10.5 billion yen (about $95 million) in deep-learning AI company Preferred Networks. (Toyota)
• Will expand its EV sharing pilot program Ha:mo to Thailand. (Economic Times)

 VW Group

• Following the diesel summit, VW announced that it would offer a EU1 to EU4 trade in incentive on all VW Group models. (VW)

Other

• Ferrari CEO Marchionne said that the company was undecided on whether to produce an SUV but that the brand would not be harmed if it did. (Reuters)
• Subaru reported financial results for Q2 2017 (1Q of their financial year). Revenue of 855 billion yen was up 11.1% on a year-over-year basis. Operating income of 119.3 billion yen was up 17.5% YoY. (Subaru)
• Comments by the German environment minister indicated that the diesel summit was just a first step (The Guardian) and that the government was still contemplating requiring physical retroactive changes to diesel vehicles saying that the topic was “not off the table at all”. (Reuters)
  • Implications: OEMs and investors will likely be dismayed at these comments, having believed that the diesel summit put the issue to bed. In reality, physical changes to vehicles already in the field are limited by design constraints and the cost of repairs. At the present time, carmakers are trying to be seen to support activities to resolve emissions but they still hold in reserve the ability to challenge what they might see as excessive remedial actions on the basis that they were doing nothing illegal and it is the rules that were wrong (that isn’t my definitive legal opinion on the outcome by the way).

And now for the other news…

Economic / Political News

• US light vehicle industry for July came in at a 16.7 million SAAR. (Wards)
• UK sales for July showed a fourth consecutive monthly drop. 161,997 vehicles were registered, down (9.3)% on a year-over-year basis. One bright spot was growth in alternative fuel vehicles. (SMMT)
• German passenger car sales in July reached 283,080 units, an increase of 1.5% on a year-over-year basis. YTD registrations are up 2.9%. (KBA)
• French passenger car sales of 147,519 units in July were an increase of 10.9% on a year-over-year basis. Commercial vehicle sales of 32,314 units were up 13.7% YoY. (CCFA)

Suppliers

• Continental reported financial results for the first half of 2017. Sales of €22 billion were up 10% on a year-over-year basis whilst operating profit of €2.3 billion was “slightly down” YoY. (Continental)
• Delphi reported financial results for Q2 2017. Revenue of $4.3 billion was up 5% on a year-over-year basis and adjusted operating income of $587 million was up 1%. The company raised its full year guidance and said it was still on track to spin off its Powertrain division by the end of Q1 2018. (Delphi)
• ZF reported financial results for the first half of 2017. Sales of €18.3 billion were up 2.7% on a year-over-year basis whilst adjusted EBIT of €1.2 billion was up over 5% YoY. (ZF)
• Dana reported Q2 2017 financial results. Revenues of $1.84 billion were up 19% on a year-over-year basis, in part due to acquisitions. Net income of $71 million was up 53% YoY. (Dana)
• The CEO of Magna International said that he believed electrification would grow far slower than many mainstream predictions. He forecast an EV share of 3% to 6% by 2025 with the upper end being dependent on success of Chinese efforts to encourage electrification. He was also bearish on the growth of autonomy. (Automotive News)
  • Implication: In an environment of ever growing forecasts for EV share by OEMs and suppliers alike, Magna are bucking the trend. At the same time, they are positioning themselves to take advantage of EV growth by creating the infrastructure to build lower volume products (e.g. JLR I-Pace).

Ride-Hailing, Car Sharing & Rental

• Japanese company Line, best known for its messaging app, has launched a taxi booking service in Thailand as part of an on-demand platform it is continuing to build. (TechCrunch)
• Toyota will expand its EV sharing pilot program Ha:mo to Thailand. (Economic Times)
• Uber announced upgrades to its payload-to-driver matching service Uber Freight offering, expanding the markets covered and allowing drivers to be more specific about the type of jobs they are interested in. (Uber)
• Uber came in for criticism after a report revealed that its Singapore operation had let cars subject to a recall remain on the road because of a shortage of parts (in part created by Uber’s use of grey imports). (TechCrunch)
• Lyft announced a tie-up with (US train operator) Amtrak that will allow travellers to book a pick-up directly from the train company’s app at the same time as booking their ticket. (Lyft)
  • Implication: Lyft’s fast-paced expansion of tie-ins continues. It will be interesting to see whether they find that this helps increase passenger usage significantly or becomes an unruly mess that is more trouble than its worth.
• Media profiled ride-hailing integration app Mystro, which lets drivers log into both Uber and Lyft and then helps them determine the most profitable jobs to accept. The company believes it has found a way around Lyft and Uber’s notorious efforts to shut out integration services by using accessibility software embedded within Android. (TechCrunch)
• Via announced the launch of a new service called Shared Taxi in New York through a collaboration with Curb. It matches riders in NYC yellow cabs and gives discounts on shared portions of the ride. (Via)
• Estonian ride hailing company Taxify is preparing to launch in London, assisted by an investment from Didi Chuxing. (TechCrunch)
  • Didi’s investment strategy isn’t totally clear at this stage but it seems to be deploying substantial amounts of capital in stakes in other companies — in return for sharing user bases — rather than growing its own-branded network. The closest parallel appears to be code sharing relationships between airlines (e.g. Star Alliance), where shareholdings sometimes accompany group membership to encourage financially weaker players to join. If this is Didi’s plan, they have yet to explain how they will manage territorial overlaps between companies fighting for market share and revenue growth.

Electrification

• Faraday Future said that it had signed a lease on a site in Hanford, California for a factory — having earlier abandoned plans for a site near Las Vegas. Faraday said that there were planning to launch by late 2018 and were looking for at least $1 billion in new funding. (Business Insider)
• Researchers forecast that Tesla batteries will take around 25 years for state of charge to degrade to 80% of new. The data was gathered from Model X and S vehicles on the road today. Note that in a recent Nissan Leaf trial, the time period was around 10 years (Tesla Roadster batteries also have a shorter lifespan). (InsideEVs)

Other

• Hong Kong bike sharing company Gobee Bike announced a $9 million fund raising to allow it to test concepts prior to an international expansion effort (TechCrunch).
• Daimler subsidiary Moovel has purchased location sharing app Familionet. (Handelsblatt)

Here are some links to transcripts for Ford Motor Company earnings calls as well as selected other events. Ford transcripts have often been hard to find (for free — if you’ve got a Thomson One subscription then you should be able to get them as part of your existing features) and so we thought it would be worthwhile lending a hand. Thankfully, in Ford’s case they have started giving access to a high-quality transcript that they are purchasing. It’s usually available within a couple of days of the call.

2018 16^th January — Presentation at Deutsche Bank Auto Conference

Transcript on Ford’s IR website

2018 24^th January — Ford Q4 and FY 2017 Earnings Call

Transcript on Ford’s IR website

2017 26^th October — Ford Q3 Earnings Call

Transcript on Ford’s IR website

2017 3^rd October — Ford Strategic Update

Transcript on Ford’s IR website

2017 26^th July — Ford Q2 Earnings Call

Transcript on Ford’s IR website

2017 26^th April — Ford Q1 Earnings Call

Transcript on Ford’s IR website

2017 23^rd March — CFO “Let’s Chat” Event

Transcript on Ford’s IR website

2017 10^th February — Argo AI Investment Press Conference

Transcript on Ford’s IR website

2017 10^th January — Mark Fields Presentation at Deutsche Bank Auto Conference

Transcript on Ford’s IR website

2017 26^th January — Ford Q4 / FY 2016 Earnings Call

Transcript on Ford’s IR website– Ford Credit Call

Transcript on Ford’s IR website — Ford Call

2016 17^th November — CFO “Let’s Chat” Event

Transcript on Ford’s IR website

2016 27^th October — Ford Q3 2016 Earnings Call

Transcript on Ford’s IR website– Ford Credit Call

Transcript on Ford’s IR website — Ford Call

2016 14^th September — 2016 Investor Day

Transcript on Ford’s IR website

2016 16^th August — Autonomous Vehicle Job#1 2021 Announcement

Transcript on Ford’s IR website

2016 9^th August — Joe Hinrichs Presentation at JP Morgan Auto Conference

Transcript on Ford’s IR website

2016 28^th July — Ford Q2 2016 Earnings Call

Transcript on Ford’s IR website– Ford Credit Call

Transcript on Ford’s IR website — Ford Call

2016 28^th April — Ford Q1 2016 Earnings Call

Transcript on Ford’s IR website– Ford Credit Call

Transcript on Ford’s IR website — Ford Call

2016 22^nd March — CFO “Let’s Chat” Event

Transcript on Ford’s IR website

2016 7^th January — Mark Fields Presentation at Deutsche Bank Auto Conference

Transcript on Ford’s IR website

2016 28^th January — Ford Q4 / FY 2015 Earnings Call

Transcript on Ford’s IR website– Ford Credit Call

Transcript on Ford’s IR website — Ford Call

2016 7^th January — Ford pre-FY 2015 Results Change to Pensions Treatment

Transcript on Ford’s IR website

2015 19^th November — CFO “Let’s Chat” Event

Transcript on Ford’s IR website

2015 27^th October — Ford Q3 2015 Earnings Call

Transcript for Ford call at Seeking Alpha (External Link)

2015 16^th July — Ford Q2 2015 Earnings Call

Transcript for Ford call at Seeking Alpha (External Link)

2015 5^th June — CFO “Let’s Chat” Event

Transcript on Ford’s IR website

2015 17^th April — Ford Q1 2015 Earnings Call

Transcript for Ford call at Seeking Alpha (External Link)

Here are some links to transcripts for PSA and Faurecia earnings calls as well as selected other events. PSA transcripts are often hard to find (for free — if you’ve got a Thomson One subscription then you should be able to get them as part of your existing features) and so we thought it would be worthwhile lending a hand. Unlike some of the other OEMs, PSA don’t give away transcripts of their events so below we show some free alternatives (and paid ones where those don’t exist).

2017 26^th July — Groupe PSA H1/Q2 2017 Earnings Call

Transcript for PSA call at Yahoo Finance (External Link)

2017 21^st July — Faurecia H1/Q2 2017 Earnings Call

Transcript for Faurecia call at Yahoo Finance (External Link)

2017 26^th April — PSA Q1 2017 Automotive Revenue Call

PSA call transcript available for purchase Thomson Reuters on this site (External Link)

2017 11^th April — Faurecia Q1 2017 Earnings Call

Transcript for Faurecia — TBD

2017 6^th March — PSA Call About Opel / Vauxhall Takeover

PSA call transcript available for purchase Thomson Reuters on this site (External Link)

2017 23^rd February — Groupe PSA FY / Q4 2016 Earnings Call

Transcript for PSA call at Yahoo Finance (External Link)

2017 17^th February — Faurecia FY / Q4 2016 Earnings Call

Transcript for Faurecia call at Yahoo Finance (External Link)

2016 26^th October — PSA Q3 2016 Automotive Revenue Call

Transcript for PSA call at Seeking Alpha (External Link)

2016 13^th October — Faurecia Q3 2016 Earnings Call

Transcript for Faurecia call at Seeking Alpha (External Link)

2016 27^th July — Groupe PSA H1/Q2 2016 Earnings Call

Transcript for PSA call at Seeking Alpha (External Link)

2016 26^th July — Faurecia H1/Q2 2016 Earnings Call

Transcript for Faurecia call at Seeking Alpha (External Link)

2016 27^th April — PSA Q1 2016 Automotive Revenue Call

PSA call transcript available for purchase from Thomson Reuters on this site (External Link)

2016 14^th April — Faurecia Q1 2016 Earnings Call

Transcript for Faurecia — TBD

2016 24^th February — Groupe PSA FY / Q4 2015 Earnings Call

Transcript for PSA call at Seeking Alpha (External Link)

2016 11^th February — Faurecia FY / Q4 2015 Earnings Call

Transcript for Faurecia — TBD

2015 26^th October — PSA Q3 2015 Automotive Revenue Call

Transcript for PSA call at Seeking Alpha (External Link)

2015 14^th October — Faurecia Q3 2015 Earnings Call

Transcript for Faurecia — TBD