Monthly Archives: October 2017

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 23^rd to 29^th October 2017. A PDF version can be found here.

Favourite stories this week…?

• See you soon — Executives seem to be falling over each other in a bid to be the most bullish on self-driving technology. GM’s CEO said it would be quarters, not years. Ford’s CEO said the company would do a market test in 2018. Nvidia’s CEO seemed unduly conservative when he said that vehicles will be available within 4 years. As luck would have it, I’d just finished something about how to spot fakes in self driving car demonstrations. You can read it here.
• Bye bye diesel — We’ve all become used to companies saying that they are allocating money away from diesels, and there are some public statements about never doing another new engine from the ground-up, but musings from a Toyota executive (just his opinion as a top boss, of course) that the company might not launch any new vehicles with a diesel offering from now on seemed like a new step.
• Let’s get ethical — Are BMW onto something with their undertaking to give transparency over the supply chain that provides cobalt they use in electric vehicle batteries? Will electric vehicles need to trumpet their fairtrade credentials alongside zero tailpipe emissions in future?

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Our latest research

With so many companies claiming to be the next big thing in driverless vehicles, we’ve written a short report covering some of the main differentiating factors and how to spot someone trying to pull the wool over your eyes.

• Read the detailed report here (6,000 words)

News about the major automakers

BMW

• Opened a new stationary storage facility at its Leipzig plant using second-life i3 batteries. The plant has capacity for 700 batteries (it uses some new batteries because so few used vehicle batteries have been available) and is connected to the public grid. The facility is modular and can be expanded in future. BMW said that this demonstrated profitable second-life usage. (BMW)
• Said that, due to environmental and ethical concerns over the sourcing of cobalt used in high voltage electric vehicle batteries, it was working to publish details of its cobalt supply chain and had engaged an independent party to help raise standards. (BMW)

Daimler

• Said that its battery storage plant in Hannover was now operational and provided 5MW of flexible storage to the public grid, with a plan to achieve 17.4 MWh of capacity. The facility has two aims: it provides on-demand electricity to the grid and is also used as a “living storage” for batteries that may be called upon to replace those in service. (Enercity)
• Made a strategic investment in The Mobility House, a company that sells electric vehicle charging equipment and vehicle-to-grid services. (Daimler)
• Had offices raided by EU officials investigating whether Daimler, VW and BMW created a cartel in powertrain technologies and purchasing. Daimler has claimed whistle-blower status. (Reuters)

FCA

• Reported Q3 financial results. Revenue of €26.414 billion was down (2)% on a year-over-year basis. Adjusted EBIT of €1.758 billion was up 17%. The company’s net debt position deteriorated slightly, from €(4.2) billion to €(4.4) billion — FCA expects to be below €2.5 billion net debt at year-end. (FCA)
• Added a further round of down days at the plant producing Maserati Levante. (Reuters)
• CEO Marchionne said that Maserati would probably release a second SUV in 2020. (Detroit Free Press)
• FCA’s South African and Australian sales teams have been contradicting each other over whether the company was stopping Chrysler and Dodge production for RHD markets. It seems the answer is: withdrawal of the brands from South Africa and probably no new models in Australia. (Cars Guide)
• Will close a logistics operation in Toledo, Ohio. The company hopes to avoid any redundancies. (Detroit Free Press)
• Has reportedly been threatened by French authorities with censure for uncooperative behaviour during investigations into whether FCA vehicles have non-compliant emissions. (Le Monde)
• Said that it expects the new Wrangler to sell “well over 300,000” units annually and that it couldn’t commit to Alfa Romeo breakeven as early as Q4 2017. (FCA — webcast)

Ford

• Reported Q3 2017 financial results. Revenue of $36.5 billion was up 1.7% on a year-over-year basis, despite wholesales dropping (1.7)% to 1.5 million units. Adjusted pre-tax profit of $1.974 billion was up 40% YoY — almost all explained by a non-repeat of recall costs in North America, although Ford attributed it to price discipline. (Ford)
• Said that the “bulk” of the $14 billion of additional savings Ford said it would make following the 100-day review of the business would flow through to the bottom line, rather than be reinvested. Ford also said that it would bring autonomous vehicles into a test market in 2018. (Ford — Webcast)
• Argo AI announced it has acquired lidar company Princeton Lightwave, saying that it was now “uniquely positioned to innovate in both sensor hardware and the interface between sensor and software”. (Argo AI)
• Announced a series of senior management and organisational changes. The CEO of Ford Credit now reports directly to CEO Jim Hackett and the strategy department will report to the CFO instead of the CEO. (Ford)
• US authorities are reportedly investigating claims that Ford Fusion vehicles are susceptible to the steering wheel working loose, and in extreme circumstances coming off. (Detroit Free Press)

Geely (includes Volvo)

• Volvo reported Q3 financial results. Revenue of 48.9 billion SEK was up 18.4% on a year-over-year basis. Operating profit of 3.7 billion SEK was up 77.5% YoY. (Volvo)

General Motors

• Reported Q3 financial results. The sale of Opel / Vauxhall significantly affected reported headline figures — a net loss of $(3.0) billion. Adjusted EBIT was $2.5 billion. GM will also stop reporting South American and Asian regions separate from one another from Q4 2017 onwards. (GM)
• Think that they will be ready to take the driver out of a vehicle in “quarters, not years”. GM also said that the cost base in South Korea “has grown to where it’s not sustainable”. (GM — Webcast)

Honda

• Honda’s CEO said that the company thought zero emission vehicles were probably not well-suited to the US market. (Reuters)
• Unveiled a series of concept vehicles in Tokyo including a small all-electric sports car and several electric mobility vehicles ranging from a wheelchair to a convertible minibus/lounge. (Honda)

Hyundai / Kia

• Hyundai reported Q3 financial results. Revenues of 71.9 trillion KRW were up 4.0% on a year-over-year basis. Operating income of 3.8 trillion KRW was down (8.9)% YoY, primarily due to recall costs and higher incentive spending. (Hyundai)
• Kia reported Q3 financial results. Revenues of 40.5 trillion KRW were up 1.8% on a year-over-year basis. Operating income of 360 billion KRW was down (81.4)% YoY. (Kia)

Nissan (includes Mitsubishi)

• Said that it will join Formula E from the 2018/19 season, taking over Renault’s participation. (Nissan)
• Said that it wants to have a 5% market share in India by 2020 — setting a 250,000 unit sales target. (Economic Times of India)
• Showed a concept of an all-electric small SUV with a claimed 600 km of range. (Nissan). The company has created a sound called “Canto” that future Nissan electric vehicles will use at speeds of up to 30 kmh — only time will tell if it becomes as iconically annoying as the Nokia ringtone (Nissan)
• Has begun testing fully autonomous vehicles in Tokyo and remains committed to making the technology available from 2020. (Nissan)
• Said that the new Leaf was selling well with 9,000 orders taken so far, including 2,000 in Norway alone. (Elektrek)

PSA (includes Opel/Vauxhall)

• Said at the launch of the refreshed Citroën C4 Cactus that it would be discontinuing the C4 hatchback and looking to return to the segment in a few years. (Autocar)
• Reported group Q3 revenues (PSA only reports profits every six months) of €14.99 billion, including 2 months of Opel and Vauxhall revenue. For the core PSA vehicle division (excluding Opel/Vauxhall), revenue of€8.42 billion was up 11.6% on a year-over-year basis. PSA’s CFO said that the company had suffered supply problems, describing inventories as “a bit low”, with the exception of Opel and Vauxhall which he said were “very high”. The company also acknowledged ongoing weakness in China, but said it was no longer a “downward trend”. (PSA)
• Said that it would be presenting the Opel / Vauxhall turnaround plan in November but refused to be drawn on exact dates. (PSA — webcast)
• Reportedly looking to sell one of its Chinese factories due to weak demand for the model produced there. (Les Echos)

Renault

• Reported Q3 revenue and sales (Renault only reports profits every six months). Sales of 866,233 unitswere up 9.4% on a year-on-year basis. Revenues of €12.22 billion were up 15.9%, part of which was the impact of consolidating Avtovaz. (Renault)
• Told workers at its Flins, France plant that it was intending to hire 100 workers on permanent contracts. This is in addition to 200 new recruits earlier in the year. The company will also hire 50 extra workers at the Le Mans plant. The success of the upgraded Zoe is apparently responsible. (Les Echos)

Tesla

• Reportedly told suppliers to expect firm orders of only 3,000 vehicles per week in December due to production bottlenecks, rather than the 5,000 per week it had previously guided (in line with public forecasts by Elon Musk). (Reuters)
• Implied that it might start using modified Model S/X cars instead of vans for service personnel. Tesla’s executive responsible for sales said it had “bugged” the company that it was using internal combustion engine vans and so they have worked on their own vehicles. (Futurism)
  • Implication: Given that Tesla are delaying projects in order to focus on areas of real importance, this would be a strange way to allocate resources since there are already a number of large all-electric vans on the market from the likes of Renault, VW and Iveco, in addition to smaller products from Renault, Nissan and PSA.

Toyota

• Said that it expected hydrogen fuel cell vehicles to have cost parity with hybrid vehicles in the Japanese market by 2025 due to a “substantial move forward” that the next generation technology, being launched in the early 2020’s will bring. (Autocar)
• Fuel cell sales will take off significantly from 2030, according to comments made by one of Toyota’s Spanish PR team at a conference. (Europa Press)
• Is scaling back on investment at its under-construction plant in Mexico. The company will spend 30% less and reduce the intended capacity by half, to 100,000 units. Toyota said that the new joint venture plant with Mazda had changed the previous model line allocation plan. (Reuters)
• Showed a concept of the replacement for Lexus’s flagship LS saloon and implied that the vehicle will have an SAE L3 driving system for use on highways from 2020. (Toyota)
• A senior executive said that he believed Toyota would not launch any new diesel-powered models in Europe, pointing to the success of the C-HR, which is only available with petrol or hybrid powertrains. (Autocar)
• Toyota executives, prompted by UK media, said that the uncertainty over a Brexit settlement was making it difficult to plan and that the company was certain that the imposition of tariffs would have a “big negative impact” on competitiveness. (The Guardian)

VW Group

• Reported Q3 financial results. Revenue of €55.0 billion was up 5.8% on a year-over-year basis. Operating profit of €4.3 billion was up 15.1%. The group raised its year-end profit outlook. (VW)
• Had offices raided by EU officials investigating whether Daimler, VW and BMW created a cartel in powertrain technologies and purchasing. (Reuters)
• Received regulatory approval for its proposal to rectify emissions problems in some of the US vehicles with 3.0L engines, avoiding a buyback. (VW)
• Is facing a 6% pay rise demand from German unions. (Reuters)
• CEO Müller, speaking at a conference, expressed frustration at the level of admiration for Elon Musk and Tesla. (Daily Kanban)
• Audi launched a used car sales portal in Germany, following a successful pilot scheme. Customers can order from the combined dealer stock and then have the vehicle delivered to their local dealer for collection, regardless of the source. The website also enables real-time financing quotes. (Audi)
• Volkswagen Financial Services launched a service called HeyCar, a pan-brand used vehicle portal. (VW)

Other

• Gordon Murray Design announced the creation of a low-volume sports car under the Gordon Murray Automotive brand. In addition to making cars for the namesake brand, the company will offer its services to 3^rd (Gordon Murray Designs)
• Subaru said that, in the wake of Nissan’s issues, it had identified irregularities in the way it approved finished vehicle quality inspectors. The company was keen to stress that it believed the issue was primarily one of documentation. (Subaru)

News about other companies and trends

Economic / Political News

• Singapore announced that it would cap its vehicle licencing program (named certificate of entitlement / COE) so that from next year the total private car population does not grow — price rises are now likely (the COE is bundled with the purchase cost of the vehicle). (The Guardian)
• UK vehicle manufacturing output in September dropped on a year-over-year basis. Car production of 153,224 was down (4.1)% (SMMT). CV production was down (26)%. (SMMT). Weakness in the home market was mostly to blame.

Suppliers

• Delphi said that it was buying self-driving car developer nuTonomy. The deal is worth up to $450 million depending on whether future targets are met. After the transaction closes, Delphi’s combined test fleet of legacy and nuTonomy cars will be 60 vehicles. (Delphi)
  • Implication: The purchase price certainly isn’t cheap, although Delphi may feel that they have got more for their money than GM did when they purchased Cruise Automation for a similar figure. This move cements Delphi’s multi-faceted approach as it works on its own self-driving solutions, alongside its role in the BMW-Intel collaboration, using a variety of in-house and 3^rd party lidar.
• Magna said it had developed a torsional welding technique that enables weight reductions of up to 10% on thermoplastic parts. (Magna)
• Visteon announced Q3 results. Sales of $765 million were slightly down but net income of $43 million was up. (Visteon)
• Borg Warner announced Q3 results. Sales of $2.4 billion were slightly up. Operating income of $276 million was up 63%. (Borg Warner)
• Dana announced Q3 results. Sales of $1.8 billion were up 32% on a year-over-year basis. Net income of $69 million was up 21% YoY. The company increased its full year outlook. (Dana)
• Gestamp reported Q3 results. Revenue of €1.9 billion was up 15%, with profits of €175 million improving from a loss in the prior year. (Gestamp)
• Valeo released Q3 revenue figures, showing a 8% increase year-over-year. (Valeo)

Ride-Hailing, Car Sharing & Rental

• Zipcar announced a program that gives unlimited access during the work week. There is a flat monthly subscription of between $199 – $299 and then a mileage charge. (The Verge)
• Uber is adjusting fees to help drivers earn more. It will now make customers with long pick-up distance pay extra to reflect the cost of collecting them, as well as the paid journey. (TechCrunch)
  • Implication: These type of charges reflect costs of business that private car hire operators have always factored into their business and indicate the limitations of the job-allocation algorithms that companies such as Uber use in order to increase efficiency. They also undermine the simplicity of the offering.

Driverless / Autonomy

• Waymo said that it would begin testing in Michigan to learn about driving in cold weather conditions, particularly snow. (Waymo)
• Pioneer unveiled a lidar product with a spinning mirror that it aims to sell for under $100 per unit by 2020. At present, the product appears to be aimed at Level 3 applications. (Bloomberg)
• Nividia’s CEO said that it would take “no more than 4 years to have fully autonomous cars on the road”. (Reuters)
• Argo AI (majority owned by Ford) announced it has acquired lidar company Princeton Lightwave, saying that it was now “uniquely positioned to innovate in both sensor hardware and the interface between sensor and software”. (Argo AI)
• Ford said that it would bring autonomous vehicles into a test market in 2018. (Ford — Webcast)
• GM think that they will be ready to take the driver out of a vehicle in “quarters, not years”. (GM — Webcast)
• Delphi said that it was buying self-driving car developer nuTonomy. The deal is worth up to $450 million depending on whether future targets are met. After the transaction closes, Delphi’s combined test fleet of legacy and nuTonomy cars will be 60 vehicles. (Delphi)

Electrification

• Energy supplier Enel has acquired vehicle-to-grid specialist eMotorWerks. (Inside EVs)
• BMW opened a new stationary storage facility at its Leipzig plant using second-life i3 batteries. The plant is connected to the public grid, modular and can be expanded in future. BMW said that this demonstrated profitable second-life usage. (BMW)
• Daimler said that its battery storage plant in Hannover was now operational and provided 5MW of flexible storage to the public grid, with a plan to achieve 17.4 MWh of capacity. The facility has two aims: it provides on-demand electricity to the grid and is also used as a “living storage” for batteries that may be called upon to replace those in service. (Enercity)
• Daimler made a strategic investment in The Mobility House, a company that sells electric vehicle charging equipment and vehicle-to-grid services. (Daimler)
• Honda’s CEO said that the company thought zero emission vehicles were probably not well-suited to the US market. (Reuters)

Other

• TomTom and Japanese mapping company Zenrin announced a strategic collaboration that will use some of TomTom’s technology in Zenrin’s maps. (TomTom)
• US bicycle sharing operator Limebike raised $50 million as the company looks to expand to more locations in the US. (TechCrunch)

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 16^th to 22^nd October 2017. A PDF version can be found here.

Favourite stories this week…?

• I want it all — Even if some of it sounds a bit over-optimistic (wanting to cover the entire value chain, saying it will be “super-profitable”), it was interesting to see that VW really believes that it can deliver autonomous vehicles in several cities by 2021.
• Plug it in — We’ve all seen our fair share of next big thing battery technologies but Toshiba’s fast charging announcement this week is interesting for two reasons. Firstly, it’s a Lithium Ion battery so we don’t have to wait around for some next generation manufacturing technology. Secondly, it achieves fast charge through different materials rather than by taking a very large battery and charging a bit of it quickly. If they can bring it to market in a cost effective manner, this could be a big bit of the puzzle that takes battery size down (and cost with it).
• If you don’t know me by now — More tough talk from Tavares on how out of shape Opel is. He somehow manages to make it sound like he bought a complete basket case but it was still a good idea. It looks as though last week’s shift reduction in the UK and the labour negotiations that have just kicked off in Spain are a dry run for the post-2018 labour negotiations with the German unions. Talking about Opel possibly missing 2020 fleet average CO₂ was an interesting example, since at a Group level one would expect PSA to be okay — is he going to enact some sort of internal credits trading in order to hold Opel’s feet to the flame?

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News about the major automakers

BMW

• Had offices raided by EU officials investigation an alleged cartel between Daimler, BMW and VW. Daimler claimed publicly that it had whistle-blower status and was therefore expected not to be fined. (Reuters)
• Mini’s chief designer hinted that the company was looking to expand the range in future beyond the current 5 bodystyles. (Autocar)

Daimler

• Announced financial results for Q3 2017. Sales of 824,000 units were up 9% and revenue of €40.8 billion was up 6% on a year over year basis. Profits fell, EBIT of €3.5 billion was down (14)% and net profit of €2.3 billion was down (17)%. Daimler said that warranty recall costs were a drag on profits. (Daimler)
• Announced that it was taking further preparatory steps towards the creation of a three division structure: Daimler financial services; Mercedes-Benz cars and vans; Daimler trucks and buses. The company said that this would cost a “three-digit euro million amount” (Daimler)
• Showed off a specific use case application of platooning autonomous technology. Mercedes Trucks converted airport snow clearing trucks so that only a lead vehicle needs to be manned and the rest of the group can follow its example. (TechCrunch)
• Will recall over 1 million vehicles due to problems with airbags. (Manager Magazin)

Ford

• Seemingly in response to the blog post by Cruise Automation’s CEO, the CEO of Argo AI wrote an article explaining that it was “really hard” to master self-driving and that those expected rapid progress to the point where AVs are ubiquitous within “a few years” are “not well connected to the state of the art or committed to the safe deployment of the technology”. (Ford)
  • Implication: Ad Punctum’s research is generally aligned to the tone of the article but we would highlight the semantic importance of ubiquity to the debate. We see specific use case, geo-fenced vehicles as being a reality within a few years and that, properly used, these will enable lower cost on-demand transport through mixed fleets of AVs and human drivers.
• Said it would recall about 1.3 million F-150 a Super Duty trucks to fix a potential problem with water entering door latches and freezing. (Ford)
• Had to suspend operations of the Chariot service in California after routine inspections found that some of its drivers were improperly licensed. (Wired)

Geely (includes Volvo)

• Having announced earlier in the year that Polestar was to become a standalone all-electric brand, the company has now said that there will be a three car line-up, with all vehicles built in Chengdu, China. The first product will be the Polestar 1, a carbon-bodied, 600hp 2+2 coupe range-extended PHEV. The factory will be completed in 2018 with first sales in 2019 and the vehicle will be available on subscription, rather than for purchase (it isn’t clear what will happen at the end of the lease period). The Polestar 2 will be a mid-sized BEV (i.e. S40/60 sized) launching in late 2019 and the Polestar 3 will be a BEV SUV. (Volvo)
  • Implication: the unveiling of the Polestar 1 as a Fisker Karma, rather than Tesla, fighter suggests that Volvo have taken the fastest route to market in order to launch the brand quickly.
• Said that it was spending €640 million on launching Polestar and that it expects 40% of global car sales to be all-electric in the next 20 years. (Volvo)

General Motors

• Cruise Automation will begin testing in New York in early 2018. The vehicles will have safety drivers at the wheel. (New York Governor)
• Reached a settlement with 49 US states over defective ignition switches. GM will pay a total of $120 million. The recall actions to correct the problems have already taken place. (Detroit News)
• In an interview GM’s president said that it was unlikely to make further acquisitions for its self-driving car business or that it was planning to spin-off any mobility business from the main company. (Reuters)

Honda

• Said that Kobe Steel had falsified tests on aluminium Honda uses for doors and other closures but that the material still passed Honda’ own tests and was therefore not a safety risk. Honda is still checking whether any parts used by its suppliers are affected. (Honda)

Hyundai / Kia

• Beijing-Hyundai (the company’s Chinese JV) said it had created a strategy called “localization 2.0” to help its products be seen as more Chinese and offset some of the negative sentiment it has received over US military sites in South Korea. (ET News)
• Launched an all-electric car sharing scheme with 100 vehicles in Amsterdam. Rental costs €12 per hour. (Auto Rental International)

Mazda

• An interview given by a powertrain executive created speculation that the company is working on a range-extended PHEV that uses a rotary (Wankel) engine. (Green Car Reports)

Nissan (includes Mitsubishi)

• Mitsubishi announced targets for its three year plan called “Drive for Growth”. The company is aiming for a 6% operating profit by 2019 with a massive sales increase and will launch 11 new models, focus on core markets and reduce costs. (Mitsubishi)
• Said that despite an earlier stoppage, it had discovered that several plants had continued to carry out inspections by incorrectly certified personnel and therefore production in Japanese factories was shut down. The problem appears to be that vehicle plants divided up quality checking tasks in a way that had not been approved. (Nissan)
• Said that it was adding a 2^nd shift (457 workers) to its St Petersburg plant in order to increase production of Qashqai, X-Trail and Murano. (Nissan)
• Mitsubishi will undertake a vehicle to grid trial with PHEVs in the Netherlands. Although there are several schemes under trial with various manufacturers, this seems to be the first PHEV specific one. It is in collaboration with NewMotion (recently purchased by Shell). (Mitsubishi)

PSA (includes Opel/Vauxhall)

• CEO Tavares said in an interview that production costs at Opel factories were 50% higher than at French PSA plants and that Opel was in danger of missing 2020 feet average CO₂ (Reuters)
  • Implication: Since EU CO₂ limits are calculated at a group level, and PSA are already on target to be one of the best performing companies, talking about emissions seems to confirm that PSA’s intent is to operate Opel / Vauxhall at arm’s length (whilst enforcing R&D sharing) in order to wring concessions from unions.
• Opel dealers in Norway have been told to stop taking orders for Ampera-e vehicles (Chevrolet Bolt) and to put customers on a reservation list, with a likely delivery date no sooner than 2019. (no)
• Will expand its emov all-electric car sharing scheme in Madrid to 600 vehicles in total (memo: it recently said it would shutter activities in Berlin). PSA says that the Madrid operation has an average user age of 36, 71% of customers are men and the average travel time is 20 minutes. (Auto Factil)
• Has created a peer-to-peer platform called carventura that will enable used car sales by providing secure payments, price appraisals and limited warranties. (PSA)

Renault

• Refused to comment on rumours that it has been working on the establishment of a plant in Pakistan since late 2016. (Usine Nouvelle)

Tesla

• Refused to confirm that it had signed a deal to open a factory in China. Memo: In June the company said it was looking at sites around Shanghai for a new plant. (Reuters)
• Announced an increase in borrowing capacity from $600 million to $1.1billion. (Tesla)
• Agreed a pay rise of 30% at its German (formerly Grohmann) division. In return for signing a long term agreement, workers will get a bonus paid in cash and Tesla stock. (Reuters)
• Some industry experts speculated that the cause of Model 3 production bottlenecks was problems with weld quality on the body in white line because Model 3 uses so much steel — a material Tesla is less familiar with. (Golem)
  • Implication: We consider this to be an unlikely cause of the issues for Tesla (albeit not impossible). Weld technology — the steel, the guns and set-up — are all long-established technologies. Tesla shouldn’t have trouble finding people who know how to do this properly.

Toyota

• Is recalling around 310,000 Sienna vehicles to rectify possible gearbox problems. (Toyota)
• Said that Kobe Steel supplied aluminium had been used in vehicles but that it passed Toyota’s own safety tests. Investigations are still ongoing regarding steel components used by Toyota. (Toyota)
• Unveiled a Concept-i family of vehicles at the Tokyo motor show that consist of an electric scooter, a compact car and a vehicle that can seat four people in comfort. (Toyota). The company also show a vehicle called “Fine-Comfort Ride”, which was its take on the type of lounge like autonomous vehicles such as the M-B F105. (Toyota)
  • Implication: although Toyota wasn’t explicit, Ad Punctum’s research points to shared vehicles having fewer derivatives, rather than the variety of today. In such a future state scenario, a continuous design theme would be a plus since customers would want vehicles that were familiar even as specific journeys require slightly different models.

VW Group

• Seat has abandoned plans to enter the Iranian market and will instead focus on untapped areas of growth in Europe. (Europa Press)
• Škoda has pushed back plans for a US expansion in order to focus resources on low cost small cars. (Autocar)
• The Audi works council demanded that the company give job guarantees to 2025 to ensure that employees could contribute constructively to the technological change facing the industry. (Handelsblatt)
• VW’s chief digital officer said in an interview that the company saw five elements in the autonomous mobility value chain: the vehicle manufacturer; the self-driving system designer; the fleet owner / operator; the mobility service provider and then providers of additional digital services (including advertising). He said that the company believes that a robo taxi will pay for itself “within months”, describing on-demand mobility as “super profitable” and saying the company wanted to operate “all five levels” of the mobility system. (Manager Magazin)
  • Implication: Ad Punctum’s research (find it here) supports VW’s profitability assessment in the very short term. Robo taxis that have operating costs below $0.50 per mile and can charge a similar fare to taxis (above $2.50 per mile) will be very profitable. Competition is likely to bring the price down rapidly so that longer term profits are more in line with transport operators today (about 10% – 15% of revenue). We fundamentally disagree that OEMs will be well placed to operate all levels of the on-demand mobility chain (see why here).

Other

• Subaru said that the only Kobe Steel supplied materials affected by falsified tests were aluminium panels used in hoods and that the material passed Subaru’s own safety tests. It is still checking whether any parts used by its suppliers are affected. (Subaru)

News about other companies and trends

Economic / Political News

• European passenger car registrations for September of 1,427,105 units were down (2)% on a year-over-year basis. The primary cause was falling sales in the UK and Germany. (ACEA)
• China passenger car sales of 2.343 million units was up 3.3% on a year over year basis (CAAM). Commercial vehicle registrations of 367,000 units was up 23.9% YoY. (CAAM)

Suppliers

• Bridgestone released a presentation about its plan covering 2018 to 2022. The company’s priorities are improving its brand; encouraging innovation; making continuous improvement; managing talent; improving governance and expanding the business in new areas. (Bridgestone)
• Denso announced a collaboration with FotoNation to improve image recognition in Denso systems. (Denso)
• LG & Qualcomm will collaborate on next generation connected car solutions. (LG)

Dealers

• French group Sogesa / Passion Automobile said it was buying Austrian group BGA Motors. (Journal Auto)
• UK dealers are seeing hybrids sell much more quickly this year. According to one platform, hybrids have gone from taking twice as long as a petrol or diesel (around 80 days vs 40 days), to almost half as long (just over 20 days) in the last 12 months. (Motor Trader)
• PSA has created a peer-to-peer platform called carventura that will enable used car sales by providing secure payments, price appraisals and limited warranties. (PSA)

Ride-Hailing, Car Sharing & Rental

• Lyft announced that it had raised $1 billion in a round led by Alphabet’s (Google’s) growth fund. The company is now valued at $11 billion. (Lyft)
• Grab announced $700 million in debt to fund expansion and that it will partner in Singapore with SMRT (public transport and taxi operator) to create a flexible fleet. (Grab)
• California’s Energy Commission has approved a grant for an all-fuel cell car sharing scheme. There will be 15 vehicles in the fleet. (Auto Rental International)
• Research by website rastreator.com found that six out of ten Spaniards would be prepared to carshare (temporary rental, not pooling) if it saved them money. (Europa Press)
• In an interview GM’s president said that it was unlikely to make further acquisitions for its self-driving car business or that it was planning to spin-off any mobility business from the main company. (Reuters)
• Hyundai launched an all-electric car sharing scheme with 100 vehicles in Amsterdam. Rental costs €12 per hour. (Auto Rental International)
• PSA will expand its emov all-electric car sharing scheme in Madrid to 600 vehicles in total (memo: it recently said it would shutter activities in Berlin). PSA says that the Madrid operation has an average user age of 36, 71% of customers are men and the average travel time is 20 minutes. (Auto Factil)
• Ford had to suspend operations of the Chariot service in California after routine inspections found that some of its drivers were improperly licensed. (Wired)

Driverless / Autonomy

• The CEO of Mobileye (owned by Intel) co-authored an academic paper that lays out some rules Mobileye hopes can help assign blame in accidents and both be used to establish whether self-driving vehicles are safe in principle and be applied to specific accidents. (Intel)
• A video posted in Twitter showed the latest prototype driverless vehicle prepared by Apple and the detailing of the sensor set housing led some commentators to speculate that Apple was working on finer aesthetic design points ahead of an unveiling. (CNET)
• Researchers associated with a UK Government funded AV trial in London published a survey on public perceptions of driverless vehicles. One finding was that when cast as a pedestrian, people thought driverless vehicles would be safer than human-piloted ones, but that as a passenger, they saw human-driven vehicles as safer. (Gateway Project)

Electrification

• Toshiba said that it had developed a new anode technology for lithium ion batteries that would allow a battery to be charged in 6 minutes. The technology will be launched in 2019. (Inside EVs)
  • Implication: Toshiba claim to have achieved the fast charge capability with changes to the anode, rather than having to go to a completely new type of battery (e.g. sold-state). The claimed range is also being achieved on a relatively small battery (32 kWh — around half the size of a Chevrolet Bolt battery) so although Porsche Mission E and Daimler make similar claims for 200km range in just over 5 minutes, their assumptions rest on using a larger battery.
• A recent UBS study highlighted a number of commodities that would be overwhelmed by substantial growth in electric vehicles (assuming future battery technologies were essentially the same as today and no recycling loop had developed). (com)
• Shell launched a charging service in the UK offering 50 kW chargers on petrol forecourts. The company aims to have 10 sites by the end of 2017 and will also launch in the Netherlands. This is a separate scheme to NewMotion, the charging company Shell recently acquired. (Inside EVs)
• Chinese backed electric car start-up SF Motors said that it had bought InEVit — a start-up working on energy storage and electric powertrain products. (Reuters)
• Charging company Hubject said that it had received additional funding to expand into the US and China. Note that BMW, Daimler and VW are among the company’s shareholders. (Hubject)
• Opel dealers in Norway have been told to stop taking orders for Ampera-e vehicles (Chevrolet Bolt) and to put customers on a reservation list, with a likely delivery date no sooner than 2019. (no)
• Volvo said that Polestar will have a three car line-up, with all vehicles built in Chengdu, China. The first product will be the Polestar 1, a carbon-bodied, 600hp 2+2 coupe range-extended PHEV. The factory will be completed in 2018 with first sales in 2019 and the vehicle will be available on subscription, rather than for. The Polestar 2 will be a mid-sized BEV (i.e. S40/60 sized) launching in late 2019 and the Polestar 3 will be a BEV SUV. (Volvo)

Connectivity

• European industry body ACEA published six cybersecurity principles that its members had endorsed. The key things are having good processes upfront, being able to react to emergencies and sharing best practice and lessons learned. (ACEA)
• Argus and Elektrobit (owned by Continental) have released an over the air update product that the two companies say takes care of the entire process and provides security to the OEM. (Telematics News)
• LG & Qualcomm will collaborate on next generation connected car solutions. (LG)

Other

• Foxconn and IDG Capital are reportedly working on a fund worth $1.5 billion that will invest in automotive technologies. (China Money Network)

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 9^th to 15^th October 2017. A PDF version can be found here.

Favourite stories this week…?

• I see your true colours — Opel and Vauxhall unions won’t have failed to understand PSA’s message in its production assurances to existing plants in France (officially) and Spain (according to politicians) at the same time as announcing reductions in Vauxhall’s UK plant. The French plants make exactly the kind of large cars that Opel’s German unions are probably counting on to justify their high wages. If they thought Tavares was just talking tough before, they’ll be reconsidering.
• Stark raving mad — Kobe Steel’s admission that it had shipped suspect product has everybody scrambling to try and understand whether they’ve used any of it to build cars. If the faulty material leads to structural problems (not proven), then forget about a Takata scale recall, these cars will have to go in the bin.
• Will you still love me tomorrow — The reports about 35,000 customers paying upfront for a fully automated system that Tesla haven’t yet even demonstrated, let alone given a rollout for got me thinking about the scale of early adopter fervour the company still commands. You have to respect it, but will there be five times as much of it at the Model 3’s price point? Read the Tesla volume forecast from last week here if you missed it before.
• The Joker — Loving Akio Toyoda’s speech at the US investor summit from a couple of weeks ago (the video has only just been released. Explaining his love for the company’s upscale brand he said “my last name may be Toyoda, but my middle name is Lexus”. Can’t wait to see other company scions up the ante. It’s a long video, but if you go straight to about 46 minutes in you’ll find some useful details on autonomy (and what Toyota thinks of the competitive set)

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News about the major automakers

BMW

• In talks with Chinese manufacturer Great Wall over a potential joint venture to assemble Mini brand vehicles in the country. (Reuters)
• Magna has joined the BMW-led self-driving car platform. Magna’s role appears similar to that of Delphi and Continental since it will act as a non-exclusive integrator and offer the technology to other companies. (Magna)
• Reportedly looking for a site for a new plant in Russia, with Kaliningrad the current frontrunner. (Der Spiegel)
• Announced Q3 2017 sales of 590,403 units, up 1.2% on a year over year basis. Increases in Asia more than offset losses in other markets. (BMW)

Daimler

• Said that it will invest €600 million in its Brazilian truck operations over the next five years. Daimler believes that the Brazilian truck fleet will soon need en masse replacement. According to the company, almost half of the trucks on the road are more than 20 years old. (Daimler)

FCA

• Announced a recall of 414,134 vehicles to correct problems which could inhibit deployment of active head restraints in a crash. (FCA)
• CEO Marchionne said that FCA won’t sell Jeep as a standalone brand to a 3^rd party and incorrect to assume that the company’s future “hinges on doing a deal”. (Detroit News)

Ferrari

• CEO Marchionne said that Ferrari will have an SUV and that the company was trying to understand how to balance exclusivity with portfolio growth. (Detroit News)

Ford

• Said that its European order bank was at record levels, having sold 30,000 Fiestas since launch. (Ford)
• Said that it had started production of the face-lifted Ecosport in its Cariova, Romania plant. Employment at the plant will rise to 3,900 people making the small SUVs and small petrol engines. (Ford)
• Offered a complimentary service to owners of Explorer vehicles, hoping to assuage concerns around exhaust emissions entering the cabin. Ford says that there is no issue and hopes the service offer will put the matter to rest. (Ford)

Geely (includes Volvo)

• Volvo’s CEO said in response to rumours of a small car program that the company was in all the segments it wanted to be in and that “small cars are not on the radar right now”. (Autocar)

General Motors

• Said that it was buying lidar company Strobe to help it bring self-driving vehicles to market “sooner than many think”. Strobe’s engineering team will become part of the Cruise Automation unit. (GM)
  • Implication: GM seems to be giving Cruise the capability to pursue a “vertical stack” autonomous solution (i.e. doing everything itself) whilst other parts of the company concentrate on a more traditional approach.
• Reached an agreement with Canadian unions that it hopes will end a strike. Employees have yet to vote on the terms, which will probably be made public next week. (Detroit News)
• Will reduce production at its Detroit Hamtramck plant due to slowing demand. The factory will reduce output from October 20^th to November 20^th and then shutdown completely until at least the end of the year. (Detroit News)
• Will invest $79 million in the Flint Assembly plant and construct a new building on the site. GM said the move would preserve existing jobs but not create new ones. (Michigan Live)
• Will invest $300 million in its Alvear, Argentina plant to produce a new Chevrolet model starting in 2020. (Reuters)

Hyundai / Kia

• Reported Q3 2017 sales of 1,763,276 units for Hyundai and Kia, a drop of (0.4)% on a year over year basis. Whilst domestic sales increased 22%, they could not offset weakenss in other markets (particularly China). (Hyundai) (Kia)

PSA (includes Opel/Vauxhall)

• Will reportedly announced 400 job cuts at Vauxhall’s Ellesmere Port, UK plant as part of a down rating of the plant from two shifts to one early in 2018. (BBC)
• The head of the Galician regional government said that PSA’s Vigo, Spain plant would be making more than 500,000 vehicles a year by 2020. That would be an increase of around 10% from today’s level. (Europa Press)
• Said that it was allocating new products to factories in Sochaux and Mulhouse that would ensure a “robust” level of manufacturing for the next ten years. Both plants will manufacture only EMP2 (C/CD) products. The vehicles will only be revealed later “for strategic reasons”. (PSA)
  • Implication: Could it be bad news for Opel employees? Between them, these two plants have capacity for around 650,000 units per year — of various C-sized cars and SUVs and CD size vehicles. At the very least, refusing to explain anything about the line-up will make German works councils nervous that these two twin plants will be well-positioned to take over slow selling Opel models. When we analysed the likely synergies between PSA and Opel we saw Madrid and Mulhouse as two of the plants most likely to be closed. So far, our analysis is looking pretty shaky as PSA have guaranteed work to both. Either we are totally wrong that job losses are required to meet PSA’s cost saving targets, or we chose the wrong plants.

Renault

• Created a new subsidiary called Renault Energy Services. The group will concentrate on developing energy infrastructure. Its primary role will be to develop vehicle to grid business models and control systems that can reduce the cost of electricity for electric vehicle owners and to work on 2^nd life usage of vehicle batteries (i.e. when the vehicle battery state of charge falls below automotive standard but still has plenty of usable capacity for grid management). (Renault)
• Has purchased a 25% stake in Jedlix, a provider of technology that can improve the efficiency of vehicle to grid management. (Autocar)

Tata (includes JLR)

• Reported group wholesales for Q3 2017 of 309,163 units, an increase of 11.7% on a year over year basis. Sales were up across brands with the exception of Jaguar, which fell (2.1)% YoY. (Tata)

Tesla

• Dismissed hundreds (estimated at between 400 and 700) of workers for poor performance reviews. Replying to criticism that the separations come at a time when the company is struggling to ramp up Model 3 production, Tesla says that firing underperforming workers raises motivation and increases productivity. (Mercury News)
• Launched a tailored insurance offering in the US and Canada (sold through a 3^rd party for legal reasons), acting on experience from other markets. Tesla has previously said that it believes some insurers do not correctly assess the Model S and X insurance risks and costs. (Elektrek)
• Said it was recalling 11,000 Model X vehicles to fix problems that could cause the rear seats to fold forward in a crash. (Reuters)
• Reportedly about 35,000 people have paid the incremental $3,000 for suitably equipped vehicles to enabled “fully self-driving capability” even though no timescale for releasing the feature has been specified. The take rate of enhanced Autopilot is said to be 77%. (Electrek)
  • Implication: Since customers don’t have to sign up now and can instead wait to see whether Tesla can deliver automated driving (albeit by spending an extra $1,000 to make amends for their distrust), the high take rate indicates the trust Tesla Model S and X buyers place in the company. It also shows the high percentage of early adopters that make up Tesla’s customers. Are there enough of them at the next price point down to justify Tesla’s sales projections? Find our recent Tesla volume forecast here.

Toyota

• Will reportedly reduce the number of vehicles it sells in the Japanese market from 60 today to around 30 by 2025 in order to re-direct capital to new areas. (Economic Times of India)
• Said in a company video that full self-driving technology was “many years off” and cautioned that some companies researching autonomy were potentially not thinking through all the safety implications, saying “it’s one thing to make a five-minute YouTube video” but putting millions of vehicles into the hands of “everyday people” was a different scale of problem. The company believes that billions of miles of testing are necessary and when the team hear other companies talk about their millions of testing miles they think “that’s nice”. Video at 46:00. (Toyota)

VW Group

• Is planning to reduce the size of its 3,000-strong European dealer network as it tries to improve dealer and company profitability. It is developing an online sales platform in partnership with its dealers. (Economic Times of India)
• Has ended Scirocco production, although unsold finished vehicles remain in inventory. (Auto Blog)
• Group CEO Müller said in an interview that electric cars “may not be as profitable as combustion models” in the next generation but the company believes there will be “a tipping point between the two in five to seven years, which will help balance our revenues”. He also said that the first step for driverless vehicles will be “taxis and parcel delivery in urban areas, where speeds are low”. (Autocar)
• Reported 2017 Q3 group sales of 2.65 million units, up 6.3% on a year-over-year basis. Sales were up across regions but sales within Germany dropped (3.9)%. YTD sales of 7.803 million units are up 2.5% YoY. (VW)
• Porsche launched a pilot scheme in Atlanta, USA called Porsche Passport that provides monthly subscription to SUVs and sports cars. Participants can choose from two levels — a $2,000 monthly subscription gives access to the lower end of the model range; for $3,000 per month the expanded line-up includes 911 and Panamera. Subscription appears to allow a certain number of vehicle swaps and includes all costs except fuel and parking. (Porsche)
• The head of the Skoda brand rejected suggestions that jobs in the Czech Republic were at risk saying that the company was operating near capacity and intended to recruit more employees soon. (Reuters)

Other

• Baidu and BAIC signed a strategic partnership with a view to deploying L4 driverless cars by 2021. (TechCrunch)
• Wiesmann, which last made cars in 2014, announced it had signed an engine supply agreement with BMW that would allow it to restart series production (probably in 2018). (Wiesmann)
• Aston Martin released pictures of the new DB11 Volante model (Auto Express)

News about other companies and trends

Economic / Political News

• The Dutch coalition government announced that it was planning to make new car sales emission free by 2030. (NL Times)
• A spokesman for the Slovenian government said that from 2030 it would only allow new cars to be sold if they had CO₂ tailpipe emissions of lower than 50g/km. (Economic Times of India)
• The Oxford, UK, regional government published proposals to phase in a zero emissions zone between 2020 and 2035. There are plenty of caveats that would prevent implementation including: public opinion, technology and central government support. (Oxford Council)

Suppliers

• Kobe Steel said it had shipped materials that failed quality tests between September 2016 and August 2017. Honda and Toyota confirmed that they had used the materials in production whilst Mazda, Mitsubishi, Suzuki and GM all said that Kobe Steel was a supplier and they were investigating the impact on vehicles that they have built. (Bloomberg)
• Schaeffler announced that it would create a division to concentrate on the automotive aftermarket (Auto Service World). The company also said that it was buying Autinity Systems, a machine data recording and analysis specialist. (Schaeffler)
• Honeywell announced that it will spin off two units, including its powertrain business, by the end of 2018. (Honeywell)
• Velodyne said that it had quadrupled production capacity and was now able to offer units to new customers without huge waiting times. (TechCrunch)

Ride-Hailing, Car Sharing & Rental

• Car sharing and ride hailing back office platform provider Ridecell said that it was buying Auro, a developer of autonomous vehicles and said it was creating a platform to provide and operate autonomous vehicles in ride hailing services. (Ridecell)
• Lyft said that it had reached a total of half a billion rides, and has completed 100 million in the last three months. (Lyft)
• Ride hailing company Ola said that it had raised $1.1 billion from investors including Tencent and SoftBank and that it was working on an additional $1 billion. (Ola)
• Uber told UK MPs that it was working on ways to cap drivers to 10-12 hours worked within a 24-hour period. According to Uber, a quarter of drivers in the UK are working more than 40 hours per week currently. (City AM)
• Short term luxury rental company CarHopper raised $1.5 million to fund developments that will allow it to bring small rental companies onto its (currently peer-to-peer) platform. (TechCrunch)

Driverless / Autonomy

• Waymo launched a campaign called “Let’s talk self-driving” to try and build support from groups that are marginalised today or are natural advocates for road safety. (Waymo). As part of the campaign, Waymo released a report. It doesn’t provide any new details on the Waymo fleet but does have some nice explanations, such as the concept of geo-fencing (page 16). (Waymo)
• Nvidia unveiled a new chip called Drive PX Pegasus that it says may have a small enough form factor to fit in production self-driving vehicles. At the moment though, the power consumption is far beyond what OEMs believe they can accommodate (see next item). (The Verge)
• A Bloomberg article collected quotes from BorgWarner, Delphi and Ford executives explaining why the first generation of autonomous robo taxis are likely to use internal combustion engines rather than being all-electric. (Bloomberg)
• California’s Department of Motor Vehicles published draft rules that could allow vehicles without safety drivers onto the streets. The regulations could be in place by June 2018. (Detroit News)
• UK start-up StreetDrone said that it was about to start deliveries of its first product, the StreetDrone One. The £49,500 vehicle is a Renault Twizy with various sensors such as lidar and camera integrated that the company believes will be of interest to universities wanting to research self-driving technology. (The Engineer)
• Rinspeed showed some concept artwork of the Snap, an autonomous vehicle with replaceable bodies. It says that a prototype will be on display at the next CES. (CarBuzz)
• US Postal Service released a report into the use of autonomous driving technologies. USPS said that it wants to pilot autonomous vehicles starting in 2019 with full-scale deployment in rural areas between 2022 and 2025. They are also interested in city delivery vehicles. Pages 1 – 2 and 12 – 17 of the report list a range of applications USPS is interested in, not all of which require L4/5 capability. (USPO)
• Deutsche Post DHL will deploy electric vehicles equipped with ZF’s ProAI self-driving sensor and processing kits (cameras, lidar and radar). The vehicles will record data from normal driving but if the fleet learning is successful then the same set-up might drive the vehicles in future. (ZF)
• After saying that the Fisker EMotion would have five lidar sensors, the company announced that the units in question would be Quanergy (Robotics Tomorrow)
• VW Group CEO Müller said in an interview the first step for driverless vehicles will be “taxis and parcel delivery in urban areas, where speeds are low”. (Autocar)
• Baidu and BAIC signed a strategic partnership with a view to deploying L4 driverless cars by 2021. (TechCrunch)
• Magna has joined the BMW-led self-driving car platform. Magna’s role appears similar to that of Delphi and Continental since it will act as a non-exclusive integrator and offer the technology to other companies. (Magna)
• Reportedly about 35,000 Tesla Model S and X customers have paid the incremental $3,000 for suitably equipped vehicles to enabled “fully self-driving capability” even though no timescale for releasing the feature has been specified. The take rate of enhanced Autopilot is said to be 77%. (Electrek)
• Said in a company video that full self-driving technology was “many years off” and cautioned that some companies researching autonomy were potentially not thinking through all the safety implications, saying “it’s one thing to make a five-minute YouTube video” but putting millions of vehicles into the hands of “everyday people” was a different scale of problem. The company believes that billions of miles of testing are necessary and when the team hear other companies talk about their millions of testing miles they think “that’s nice”. Video at 46:00. (Toyota)

Electrification

• VW Group CEO Müller said in an interview that electric cars “may not be as profitable as combustion models” in the next generation but the company believes there will be “a tipping point between the two in five to seven years, which will help balance our revenues”. (Autocar)
• Shell will buy charging network operator NewMotion. (NewMotion)
• The consortium announced last year by Ford, Daimler, BMW and VW for a European charging network has now established a company to develop the business. The headquarters are in Munich and there are reportedly 50 people working on the project. (Manager Magazin)
• Chakratec and DBT unveiled a fast charging station that uses flywheels to store energy before it is transferred to the vehicle (similar to some of the early KERS Formula 1 solutions) in order to augment the local grid. (Charged EVs)
• Bolloré said that they have sold 200 electric buses so far and aim to produce around 50 next year. (Les Echos)
• Renault created a new subsidiary called Renault Energy Services. The group will concentrate on developing energy infrastructure. It’s primary role will be to develop vehicle to grid business models and control systems that can reduce the cost of electricity for electric vehicle owners and to work on 2^nd life usage of vehicle batteries (i.e. when the vehicle battery state of charge falls below automotive standard but still has plenty of usable capacity for grid management). (Renault)

Connectivity

• Octo Telematics is creating a strategic alliance with Willis Towers Wilson and acquiring Willis Towers Wilson’s usage based insurance business. (Telematics News)
• Mapbox raised $164 million in funding, allow it to expand its automotive division. (Telematics News)

Other

• Bicycle sharing company Ofo has raised an additional $700 million (for a total of $1.3 billion since the beginning of 2016). (China Money Network)
• China-focused on-demand logistics company Lalamove raised $100 million in funding and claims it operates profitably in several cities. (TechCrunch)
• Bicycle sharing operator Hellobike said that it had raised money from investors including electric vehicle start-up WM Motor. (China Money Network)

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 2^nd to 8^th October 2017. A PDF version can be found here.

Favourite stories this week…?

• It’s strategy Jim, but not as we know it — Ford’s strategic review was generally poorly received: the executive team gleefully withheld details and it wasn’t clear whether this was a complete mis-reading of the investment community or a deliberate poke in the eye (if so, to what end?). It was informative in one respect: Ford displays a clear belief that hybrid powertrains and BEV lie along the same continuum. CEO Jim Hackett even admonished investment analysts for not sharing this view, citing the company’s brilliant hybrid expertise. The company seems unaware of the bet that it is making — a shallow BEV portfolio will save lots of money if the market doesn’t take to them, but if Ford is wrong, it will get little sympathy from consumers for missing the trend.
• You cannot be SURUS — GM showed off a heavy commercial truck platform that is largely faithful to their 2002 AUTOnomy skateboard concept. Although the product is aimed at commercial operators, I think it scales down to a car / light commercial vehicle level. This type of flexible concept could be important for on-demand travel.
• Help! I need somebody — Suzuki’s powertrain plant in Manesar, India had to temporarily shut down because a stray leopard was spotted on site. I’ve got my fair share of plant war stories, but this is the best I’ve heard.

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Our latest research

With the focus for many people being Tesla’s Model 3 ramp-up, we’ve looked a little further ahead at what steady-state volumes might be. Our assessment isn’t good news for Tesla bulls… Model S and X look to have only limited growth prospects — sales have been well below capacity for several quarters — and Model 3 is likely to sell around 200,000 units per year. Perfectly respectable volumes, but way off the level some people are hoping for.

• Find the analysis here (short presentation format)

News about the major automakers

BMW

• A senior executive said that BMW wants one more automaker to join it and FCA in its collaboration. Three OEMs is seen as the right level to share costs without slowing decision making too much. (Automotive News)

FCA

• Said that it would recall 646,394 SUVs in the US for possible corrosion in the brake system. (FCA)

Ford

• Ford held a strategy update session for analysts and investors to share the fruits of new CEO Jim Hackett’s 100-day study. The presentation highlighted Ford’s efforts to cut costs and improve the product. The key message was that the company is trying to move itself away from traditional low margin (and likely to be even lower margin in future) businesses such as internal combustion engines and cars. Instead, the company will invest in SUVs, mobility services and electrification with the aim of becoming the “most trusted nobility company”. The presentation was light on figures and unclear on the financial outlook, for instance it said that $7 billion was being reallocated from cars to SUVs, $0.5 billion of spending per year would move from ICEs to electrification and on top of this $14 billion of incremental savings were being made, yet it wasn’t what impact any of this has on the bottom line. Probably the most significant news was that by 2019, 100% of US cars and 90% globally will have connectivity (although Ford declined to specify what capability this would entail) and that Ford is working on new partnerships to help improve results in South America and Europe (announcements in coming “weeks, months and years”). (Ford)
  • Implication: Ford’s presentation was generally poorly received, and it wasn’t difficult to see why. Take out the slides on clocks, financial history and just-doing-my-job efficiency actions and you are mostly left with slogans. The best material came during the Q&A session as analysts tried valiantly to get some specifics from the team. The clearest message there was that Ford is sticking to its guns on electrification — hybrid is an acceptable alternative to BEV and although the company has the weakest confirmed BEV portfolio of any major competitor, save FCA, Ford is comfortable that it is making the right choices.
• CEO Hackett said during a speech to students that he wasn’t ready to trust a self-driving car, although he would be “very soon”. (Jalopnik)

Geely (includes Volvo)

• Will increase its stake in Danish company Saxo bank from around 30 % to 51.5%. (Reuters)
• Opened a start-up incubator called MobilityXLab in cooperation with Autoliv, Zenuity (a JV between Volvo and Autoliv), Volvo Trucks and Ericsson. (Autoliv)
• Volvo’s Q3 sales of 135,831 vehicles were up 10.6% on a year-over-year basis, with gains across regions. The highlight was 35% growth in China YoY. On a YTD basis, sales are up 9%. (Volvo)

General Motors

• Said that it will launch 20 all-electric vehicles by 2023, with the next two due within 18 months. GM implied that this number may include fuel cell powered electric vehicles in addition to BEVs. (GM)
• GM’s head of product development said that future generations of all-electric vehicles “will be profitable”. (Faconauto)
• Displayed an autonomous fuel cell platform called SURUS for heavy commercial and potentially military applications. The company said that it is evaluating applications for the product which is a scaled-up version of the 2002 AUTOnomy concept (click for details). (GM)
  • Implication: As a proud supporter of the original AUTOnomy concept for the past 15 years, the further development of the idea to something near production ready is an exciting development. Although the current platform makes much of its fuel cell underpinnings, a battery could just as easily be used. Memo: our base hypothesis for on-demand travel is that a running chassis which can easily swap bodies is one of the most promising ways of increasing vehicle utilisation (because you can run a top hat optimised for freight or passenger travel rather than having to compromise on package to accommodate both).
• Deutsche Bank analyst Rod Lache caused a stir by saying that management wouldn’t rule out spin-off of the mobility business (which he values at around $30 billion) in discussions he held with them and that he had been left with the impression that GM’s AVs would be ready for commercial operation much sooner that most were expecting. (Bloomberg)
• GM’s director of autonomous vehicle integration reportedly said that Tesla CEO Elon Musk’s promises of autonomous driving were “full of crap”. His criticism centred on Tesla’s technology choices because Tesla appear determined not to fit lidar, which GM view as absolutely necessary. (Business Insider)
• The CEO of Cruise said that GM was making “rapid progress” on self-driving cars but wouldn’t commit to a timescale for deployment. (Reuters)
• Announced that it would consolidate its management structure to have only three regions — North America, China and International. (GM)

Honda

• Announced changes to its manufacturing operations in Japan, citing weak domestic demand as a cause of overcapacity. Honda’s plant in Yorii will become a centre of excellence and absorb the activities of the Sayama plant (with employees either transferring or leaving) by the end of Q1 2022. Honda is also in talks to take over the automotive activities of Yachiyo (which makes Kei cars and small trucks for Honda). (Honda)

Hyundai / Kia

• Said that the Hyundai Verna’s launch in India was going very well with 15,000 orders in the first 40 days of the product being on sale. (Times of India)

Nissan (includes Mitsubishi)

• Following on from Nissan’s delivery suspension notification, the issue turned out to be improper certification of final inspection personnel. The Japanese transport ministry launched a series of spot checks on Nissan plants. (Reuters)
• Held an event called Nissan Futures 3.0 where it unveiled a longer range version (280km) of the e-NV200 light commercial vehicle; said it would increase its charging network from 4,600 to 5,600 points within the next 18 months; showed off new charger and home storage products (developed with 3^rd parties); and said it was working on vehicle to grid charging offers with electricity companies across Europe with the aim of providing sufficient revenue from the services to pay for the electricity needs of customer vehicles. (Nissan)
• Said that all-electric cars could capture an 8% share in Spain within the next three years through a combination of infrastructure development and suitable government incentives. (Faconauto)
• Said that customers would now be able to use Amazon’s Alexa service to carry out remote commands for such features as locking the vehicle or flashing the lights. For those worried about unauthorised use, Nissan has created the option of a four digit pin, which is spoken out loud (so that should stay a secret then). (Nissan)

PSA (includes Opel/Vauxhall)

• Will reportedly close its all-electric Multicity Berlin car sharing scheme in the face of competition from Car2Go and DriveNow (owned by Daimler and BMW respectively). (Auto Rental International)
• Announced the US launch of its Free2Move service. The brand has started operations in Seattle where it offers a range of car and bike sharing services on its platform. (PSA)
• PSA’s head of development appeared to indicate that the company was trying to phase out GM-designed engines from Opel vehicles as quickly as it could. He said that Opel vehicles would start using PSA engines and that the company wanted end “payments for licencing fees as quickly as possible”. (In Auto News)
  • Implication: Ad Punctum’s analysis of the overlapping manufacturing footprints of PSA and Opel at the time of sale, engine production at both Kaiserlautern and Aspern looks at risk in the long term, especially since Opel could keep both sites open. (Find our analysis here)

Renault

• Held a capital markets day where it set out its strategy up to 2022. Renault intends to gather further synergies from cost sharing with Nissan and Mitsubishi and has set ambitious growth targets for its business outside Europe (it wants to double sales and triple profits). The company will add 21 new models and expand to 13 new countries. Renault highlighted electric vehicles and commercial vehicles as areas where it believes that it can win share, saying that by 2022 it will have 8 BEVs and that it expects LCV volumes to increase by around 40%. Renault’s presentation also confirmed existing R-N Alliance strategy to have level 4 AVs by 2022 and to operate robo taxi services. (Renault)
  • Implication: The overall product, sharing and cost saving targets had been largely previewed by the September announcement of the Renault-Nissan-Mitsubishi 2022 alliance goals. The most interesting detail was Renault’s continued push to grow in non-European markets and the implied expansion of the value portfolio.

Tata (includes JLR)

• JLR reported Q3 sales of 149,690 units, an increase of 5.1% on a year-over-year basis. For 2017 YTD, JLR sales are up 7.5%. (JLR)
• Reportedly planning to follow-up the Jaguar I-Pace with Land Rover’s first BEV, a large SUV, in 2019. (Autocar)

Tesla

• Delayed the reveal of its Semi truck to 16^th November, choosing to divert resources to “fix Model 3 bottlenecks”. It isn’t entirely clear what resources are used for both staging media events and solving manufacturing and supply chain problems — apart from Elon Musk’s brain. (Business Insider)
• Announced Q3 deliveries of 26,150 vehicles, including 220 Model 3s, a 4.5% increase on a year-over-year basis. Although the company slightly upped its forecast for full year sales, the small number of Model 3 sales were generally considered to be a disappointment. (Tesla)

Toyota

• Said that it would use Hitachi’s internet of things platform, Lumada, to increase productivity in its factories. Toyota believes that big data can augment existing problem solving methods (referred to in Toyota literature as PDCA — the Plan, Do Check, Act Deming cycle). (Toyota)

VW Group

• Škoda unions threatened to work to rule by foregoing overtime over concerns that German unions and managers were trying to source work to German plants and damage the competitiveness of the brand. (Reuters)
  • Implication: What is going on at VAG? German unions trying to undermine workers in the Czech Republic… Porsche demanding reparations from Audi over the diesel scandal… and all of it being fought in public. Looks like leadership needs to exert itself more.
• SEAT suffered production losses due to protests in Catalonia. (Reuters)
• Spy shots of the Porsche Mission E emerged as company executives hypothesised how they might develop their own range of over the air updates, similar to Tesla’s offering, with power upgrades among the options being considered. (Autocar)
• Reportedly looking to partner with Chinese battery maker CATL for BEVs in the Chinese market. (Green Car Reports)

Other

• Prize for coolest factory stoppage of the year goes to Suzuki’s powertrain plant in Manesar, India. Production was stopped and 2,000 employees evacuated after a leopard entered the plant. (Economic Times of India)
• Chery is planning to enter the European market around the end of 2019. As has become de rigeur, every model will be “electrified” (48V qualifies in Chery’s eyes) and seemingly without a diesel. The company is currently searching for a site for its European technical centre — which will be somewhere in Germany. (Autocar)
• Subaru announced that it had ceased production of general-purpose engines (e.g. for snow mobiles) and generators as of the end of September in order to concentrate on the core automotive business. (Subaru)

News about other companies and trends

Economic / Political News

• US light vehicle registrations of 1.52 million units (18.47 million SAAR) was substantially above forecast. (Wards)
• UK passenger car sales of 426,696 units in September were down (9.3)% on a year-over-year basis. (SMMT). Sales of light commercial vehicles were also down with registrations of vans under 3.5 tonnes (4.2)% lower than September 2016. (SMMT)
• Italian registrations of passenger cars for September of 166,956, up 8.1% on a year-over-year basis. (UNRAE)
• Spanish registrations of 83,291 passenger cars in September were up 4.6% on a year-over-year basis. (Facon Auto)
• London’s mayor wrote to VW, BMW and Daimler, accusing them of double standards after they have pledged money to clear ait projects in the US and Germany but not the UK, singling out VW’s UK managing director for particular criticism. (Autocar)

Suppliers

• Slovenian government ministers said that they had agreed a deal with Magna for a car factory that could create 6,000 jobs (including Magna’s suppliers) and have an annual capacity of between 100,000 and 200,000 units. Magna remained tight-lipped on the matter, saying it was only committing to an initial stage that would employ 400 people. (Reuters)
• Denso said it will expand its factory Tennessee, USA to build electric vehicle parts. The $1 billion investment will ultimately create 1,000 jobs. (Detroit Free Press)
• Indian supplier Jai Barat Maruti had a number of offices raided by the Indian income tax department. (Economic Times of India)

Dealers

• UK dealerships saw a drop in profits, according to an anonymous survey. Margins are being supported by used vehicle sales, although inventories are increasing. (Motor Trader)

Ride-Hailing, Car Sharing & Rental

• Various media sources speculated that Waymo could launch ride hailing services using autonomous vehicles without safety drivers in Phoenix, Arizona within the next few months. (ArsTechnica)
• An analysis of the four largest providers of car sharing in Italy (Car2Go, DriveNow, Share’n Go and Enjoy) put the average loss per car at €(4,700) in 2016. (Journal Auto)
• French ride hailing company Heetch has raised $12 million to fund expansion beyond its current operations in France, Belgium, Sweden and Italy (TechCrunch)
• Estonian ride hailing company Taxify, recently shut down in London over licencing issues, said it would launch in Paris. (Journal Auto)

Driverless / Autonomy

• Fisker’s CEO said that the EMotion would be equipped with five solid state lidar units in order to enable fully autonomous driving. (Auto Evolution)
• Various media sources speculated that Waymo could launch ride hailing services using autonomous vehicles without safety drivers in Phoenix, Arizona within the next few months. (ArsTechnica)
• The US autonomous driving bill passed unanimously in Senate committee hearings — seen as a good sign for the bill once it reaches the overall voting stage. The bill has already passed in the House of Representatives. (Futurism)
• The Karlsruhe Institute of Technology (KIT) is leading a project to build an automated bus depot. The concept includes automation of light maintenance activities in addition to internal and external cleaning. (Autonomes Fahren)
• Ford’s CEO said during a speech to students that he wasn’t ready to trust a self-driving car, although he would be “very soon”. (Jalopnik)

Electrification

• GM said that it will launch 20 all-electric vehicles by 2023, with the next two due within 18 months. GM implied that this number may include fuel cell powered electric vehicles in addition to BEVs. (GM)
• ABB showed off their modular high power charging solution. A single unit can charge a car at 150 kW (slightly higher than Tesla superchargers) whilst two units linked can charge two vehicles, at rates of up to 350 kW. (ABB)
• UK electricity supplier Ovo is offering free electricity to buyers of the new Nissan Leaf that sign up to its new vehicle to grid charging scheme. The company believes that it can save between £350 and £400 in electricity trading fees per vehicle per year and this will pay for the electricity the vehicle uses on the road. (The Guardian)
• Electric vehicle start-up Faraday Future is reportedly suffering from the resignation of a number of key employees. (The Verge)

Connectivity

• Ford said that by 2019, 100% of US cars and 90% globally will have connectivity (although Ford declined to specify what capability this would entail). (Ford)
• Renault said that 100% of new vehicles sold in “key markets” would be connected by 2022. (Renault)

Other

• Boeing is buying flying taxi developer Aurora Flight Sciences, one of the companies that Uber has worked with on its flying car project. (Business Insider)
• Airbus said that it was on track to carry out initial flight tests on its CityAirbus flying taxi by the end of 2018. (Airbus)

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 25^th September to 1^st October 2017. A PDF version can be found here.

Favourite stories this week…?

Two things caught my eye…

• All systems JLR — In the same week we get confirmation that JLR has given its official notice on the large gasoline engine supply deal with Ford (next stop: JLR’s next generation V6/V8) and is shopping around for a luxury brand to buy. Potentially lots of exciting announcements coming our way in the future. They can’t be happy that the media is bandying about details of the I-Pace battery procurement though, can they?
• Look deep into my eyes — Mazda and Toyota’s electric vehicle joint venture seems more in the interest of the former than the latter (since Mazda don’t contribute either scale or existing expertise). It all looks like part of a Toyota plan to lock Mazda into a never-ending embrace that one day results in a takeover.

Find our archive here.

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

News about the major automakers

BMW

• Said that from mid-2018, all BMW and Mini vehicles would feature Amazon Alexa. At the moment, BMW vehicles do have Alexa but capability is limited to information about vehicle diagnostics. (BMW)
• Reportedly planning to release a wireless charging pad that can be placed in a customer’s garage and will have a 3.2kW rating. Previous examples have suffered from being extremely sensitive to vehicle position over the pad so it remains to be seen whether BMW have conquered this problem. (Futurism)

Daimler

• Said that it will begin trials of truck platooning (where several trucks drive behind a lead vehicle in order to minimise air resistance — the same principle as a peloton in cycling) on public highways in the US. Because of the small gaps between the vehicles, platooning involves automating the driving by connecting all vehicles to the action of the lead driver. (Daimler)
• Amid concern from employees at the Smart factory in Hambach, France that sales drops are threatening their jobs, Daimler is rumoured to be planning to transfer pilot plant activities to the site, plus make an unspecified Mercedes product there from 2019 onwards. (Les Echos)
• According to government officials, Daimler is set to open a new logistics hub in Egypt. (Economic Times of India)
• Daimler has bought Flinc, an on-demand mobility platform. Flinc originally started as a peer-to-peer ridesharing service but then built a white label service for car sharing, used by Opel among others. (Daimler)
  • Implication: Daimler’s recent deals (outright purchase of companies in the car sharing ecosystem and shareholdings in ride hailing companies) possibly point to a view that it should concentrate on fleet management and schemes where the customer relationship lasts longer (e.g. shared ownership) and keep a watching brief on the ride hailing market. It could also be that Daimler feels it has already established a path to profitability in car sharing whereas the ride hailing business model is less mature.

FCA

• Subsidiary Magneti Marelli is building a plant in Tangier, Morocco that will start production in 2019 and employ 500 workers by 2025. (Magneti Marelli)

Ford

• Ford said that it would work with Lyft to integrate fleet vehicles (as opposed to driver-owned) into the Lyft system as a precursor to offering robo taxis. In the system that Ford described, it would have a technology platform that operated a pool of vehicles that could be assigned to jobs from companies such as Lyft. (Ford)
• Ford said that production of JLR engines in its Bridgend plant will end in September 2020. According to Ford, this is 3 months earlier than expected (around half the plant’s 2,000 employees work on the engine). From 2021 onwards, the plant will only build a small petrol engine at a rate of around 125,000 per year; a marked decline from current levels. (BBC)

Geely (includes Volvo)

• Volvo officially announced the additional production line and investment in the South Carolina plant it still has under construction. The move was leaked by sources last week but mis-reported the 1,900 additional jobs as 2,500. (Volvo)
• Proton’s new CEO said that he wanted the company to be a “top three ASEAN brand in the next 10 years”. His immediate focus is on a 10 week study of product planning, R&D, quality and procurement. Geely’s joint venture partner expects Proton to break even within three years and be profitable in five years. (New Straits Times)

Honda

• Will unveil a Sports EV concept at the Tokyo show on 25^th October — the 2^nd electric vehicle in as many months. The pre-show press release suggests a MX-5 fighter / S2000 replacement. (Honda)

Mazda

• Toyota, Mazda and Denso (a Toyota-affiliated supplier) are creating a joint venture to work on electric vehicle development. The new business, to be called EV C.A. Spirit Corporation, will have around 40 employees and will seek to create a common architecture for electric vehicles. Toyota and Mazda hope that the common platform can be scalable to a range of vehicle sizes. (Toyota)
• Said at the launch of CX-5 production at its Malaysian JV plant that vehicles made in the factory will be exported to markets previously served by Japanese exports. (Mazda)

Nissan (includes Mitsubishi)

• Announced that it will suspend all registrations of vehicles in dealer and factory inventory in Japan. Nissan cited unspecified type approval irregularities as the reason. The fix appears to be a check of the affected vehicles after which, if they pass, they can be released to customers. (Nissan)

PSA (includes Opel/Vauxhall)

• Will develop a one-ton pick-up truck with ChangAn. The vehicle will be built in China for domestic and overseas markets. A small pick-up truck was a key open item from the “Push To Pass” product portfolio. (PSA)
  • Implication: Given that Toyota and Mitsubishi (historic PSA partners) offer pick-up trucks, the choice of ChagAn implies either that PSA could not find an existing OEM partner willing to work with them, or that that are looking for a more budget-focused product.
• Opel will combine sales and marketing into a single function following the departure of their former head of marketing at the end of September. (Opel)

Renault

• Will implement a line speed reduction in Douai — producer of Espace, Scenic and Talisman models — at the end of November. In place of the current two shifts operating at 60 vehicles per hour, one will become a mini shift operating at 30 vehicles per hour. Due to the change, about 700 workers on temporary contracts will be laid off. (Usine Nouvelle)
• Powertrain demand appears to be holding up well: Renault’s factory in Cléon aims to recruit an additional 100 staff, on top of the 200 hired since the beginning of the year. (Usine Nouvelle)

Tata (includes JLR)

• Will end its large petrol engine supply arrangement with Ford in September 2020, signalling that the company intends to launch its own replacement for the V6/V8 petrol engines built there before the end of the decade (unless customers are going to buy I4s instead of V8s). (BBC)
• JLR is reportedly interested in buying a luxury brand — the move is apparently driven by Tata Motors wishing to add scale. (Bloomberg)
• In a similar move to Audi’s, JLR is changing the way it denotes the powertrain in the vehicle name. The new strategy sees fuel type, power and driveline (if AWD) being included. As with Audi, the move it likely a precursor to all-electric sales traditional ICE badging makes comparison across models difficult (until you read the brochure). (Auto Express)
• JLR is reportedly looking at offers from Samsung SDI, LG Chem and Panasonic to supply batteries. The company is apparently requesting quotes for around 2 million 21700-size cylindrical cells each year. (ET News)

Tesla

• As Model 3 vehicles began arriving in vehicles, videos emerged of Tesla employees demonstrating how the single large display within the vehicle works. By the way, people keeping tabs on Tesla VINs have got to number 313 so far, so they’ve made at least that many now. (Jalopnik)

Toyota

• Toyota, Mazda and Denso (a Toyota-affiliated supplier) are creating a joint venture to work on electric vehicle development. The new business, to be called EV C.A. Spirit Corporation, will have around 40 employees and will seek to create a common architecture for electric vehicles. Toyota and Mazda hope that the common platform can be scaleable to a range of vehicle sizes. (Toyota)
• Published a white paper on the future of autonomous driving and gave details of its latest iteration of a driverless product in development — Platform 2.1. Within the document, Toyota says that it sees SAE Level 3 autonomy “potentially as challenging to implement as Level Four automation” (it is hard because of the need to ensure a human driver can take control, something that human drivers have shown themselves to be often incapable of). (Toyota)
• Toyota has separated capability into two areas — Guardian and Chauffeur. Guardian roughly collects existing driver assistance aids and seeks to improve them so that a vehicle could try to always prevent a crash. Chauffeur is a full self-driving mode. Toyota aims to bring a highly capable highway-only Level 2 system, that it calls Highway teammate into production in 2020 and self-driving in cities, called Urban teammate in the 2020s. Toyota implies that both systems are driver-supervised, but given its earlier comments on the practical difficulties of SAE Level 3, this seems like more of a hedge in public statements. (Toyota)
• Made an investment in PKSHA, a company that aims to develop natural speech for self-driving cars. (Detroit News)

VW Group

• Announced that it would take an additional one-time charge of €(2.5) billion in its Q3 results to increase the provision for repair of diesel vehicles in the US. The program is apparently “more technically challenging and time-consuming” than expected. (VW)
• Audi’s CEO said that the company would soon build all-electric cars outside Germany, citing Hungary and Mexico as specific examples. (Elektrek)
• Launched a program in the US called “People First” that sees all VW vehicles receive a transferrable 6 year warranty (8 years in the case of the eGolf). (Detroit Free Press)
• VW’s sales manager for Germany said in an interview that the company needed to consolidate its dealer network more quickly and offer additional digital services to enhance the customer experience. (Handelsblatt)
• VW is making changes to its distribution in Europe and will increase the capacity of its Emderhafen facility to 70,000 vehicles (from 60,000). The company intends to transport fewer cars by road, instead preferring train (faster) and ship (slower). (de)
• Lamborghini’s R&D head said that the company would be “the last brand” to offer autonomy. This represents a departure from the thinking of some other luxury sports car makers who see autonomy as a selling point because it can teach owners how to drive their cars better. (Digital Trends)
• VW is trialling a service with 300 customers in Berlin where deliveries from DHL can be placed into the boot of the car while it is parked, ready for the owner to collect at a later date. (VW)
• VW’s director of development appeared to suggest that the company will unveil an all-electric Phaeton replacement at the Geneva 2018 show. (Motoring)

Other

• Mahindra’s chairman said that the tipping point has been reached on electric vehicle profitability. (Bloomberg)
• Dyson confirmed long-standing rumours that the electrical appliance company will make an electric car. The vehicle will be launched in 2020 and there are currently 400 employees working on the project. Dyson said that the budget for the program was £2 billion, split equally between the vehicle and the battery. No details of the program were released but according to reporters it will not be cheap. (BBC)
• MG Motor India (owned by SAIC) celebrated taking over the former GM plant in Gujurat. Currently the company has only 70 employees at the site but plans on a product launch in 2019 by which time the plant will have a capacity of 80,000 units. (Economic Times of India)
• JD Power’s latest survey of Chinese automaker quality showed the gap to international brands continuing to narrow. The average Chinese vehicle now has an additional 13 TGW/1,000 vehicles over the average international product. (Economic Times of India)
• McLaren showed off a test mule for its next hypercar called the BP23 and confirmed that it had sold all 106 units it intends to build (it said demand was three times that). The car will launch in 2019 and have a hybrid powertrain. (Auto Express)
• Aston Martin Consulting have been building a submarine with Florida-based Triton. It wasn’t clear if this was to build knowledge in anticipation of a self-diving car craze emerging in the next few years. (Auto Express)

News about other companies and trends

Economic / Political News

• China issued new rules for electric vehicle sales in 2019 and beyond. Carmakers will get credits for each “New Energy” vehicle that they sell and the qualifying credit level will increase as time passes. (Bloomberg)
• There were rumours that California is considering banning sales of vehicles with combustion engines. Further investigation confirmed that the governor had “indicated an interest” in such a measure. (Bloomberg)
• Saudi Arabia will end its ban on women driving cars in June 2018. Media forecast a boom in car sales and troubling times for ride hailing companies. (BBC)

Suppliers

• Delphi announced that its powertrain division will be called Delphi Technologies when it becomes a standalone entity. To avoid confusion, Delphi will rename itself (by that time a predominantly electronics business) as Aptiv, (Delphi)
• Toyota said that it was using Luminar-supplied LIDAR in its Platform 2.1 test vehicles and credited the new sensors with enhancing the capability of the vehicle to spot and identify objects. Luminar said separately that it is working with three other OEMs. (Toyota)
• Magneti Marelli is building a plant in Tangier, Morocco that will start production in 2019 and employ 500 workers by 2025. (Magneti Marelli)
• Autoliv is buy LIDAR and time of flight camera (a way of using camera sensors to measure distance) assets from Swedish company Fotonic I Norden AB. Autoliv will get IP and take on some of Fotnic’s employees as part of the deal. (Autoliv)
• Toyota, Mazda and Denso are creating a joint venture to work on electric vehicle development. The new business, to be called EV C.A. Spirit Corporation, will have around 40 employees and will seek to create a common architecture for electric vehicles. (Toyota)
• Nvidia has reportedly lost the business to produce chips for Tesla’s infotainment system to Intel. (Bloomberg)

Ride-Hailing, Car Sharing & Rental

• Daimler has bought Flinc, an on-demand mobility platform. Flinc originally started as a peer-to-peer ridesharing service but then built a white label service for car sharing, used by Opel among others. (Daimler)
• Bollore are set to launch an all-electric car sharing scheme called BlueSG in December with an initial 80 vehicles and 30 separate sites. (Auto Rental News)
• Didi has reportedly invested $200 million in peer-to-peer car sales site RenCheChe. (TechCrunch)
• Ford said that it would work with Lyft to integrate fleet vehicles (as opposed to driver-owned) into the Lyft system as a precursor to offering robo taxis. In the system that Ford described, it would have a technology platform that operated a pool of vehicles that could be assigned to jobs from companies such as Lyft. (Ford)

Driverless / Autonomy

• Drafts of a US senate bill on self-driving vehicles have excluded trucks from the same categorisation, leading to speculation that union leaders have successfully lobbied to make introduction of self driving technologies more difficult in their industry. (Wired)
• ai has raised $15 million from ride-hailing firm Grab and will open an office in Singapore, where the two firms may collaborate on a self-driving car program. Memo: Grab is already working with Nutonomy and drive.ai recently announced a project with Lyft. (TechCrunch)
• Toyota published a white paper on the future of autonomous driving, saying SAE Level 3 autonomy is “potentially as challenging to implement as Level Four automation”. It said it would have a human-supervised highway only system on sale by 2020 and a system capable of operating in urban areas in the 2020s. (Toyota)

Electrification

• Toyota, Mazda and Denso (a Toyota-affiliated supplier) are creating a joint venture to work on electric vehicle development. The new business, to be called EV C.A. Spirit Corporation, will have around 40 employees and will seek to create a common architecture for electric vehicles. Toyota and Mazda hope that the common platform can be scaleable to a range of vehicle sizes. (Toyota)
• Dyson confirmed long-standing rumours that the electrical appliance company will make an electric car. The vehicle will be launched in 2020 and there are currently 400 employees working on the project. Dyson said that the budget for the program was £2 billion, split equally between the vehicle and the battery. No details of the program were released but according to reporters it will not be cheap. (BBC)
• JLR is reportedly considering offers from Samsung SDI, LG Chem and Panasonic to supply batteries. The company is apparently requesting quotes for around 2 million 21700-size cylindrical cells each year. (ET News)
• Mahindra’s chairman said that the tipping point has been reached on electric vehicle profitability. (Bloomberg)
• A report by used car sales website iseecars.com, 6 out of the top 10 fastest selling used cars in the US are either fully electric or plug in hybrid. (com)
• BMW is reportedly planning to release a wireless charging pad that can be placed in a customer’s garage and will have a 3.2kW rating. Previous examples have suffered from being extremely sensitive to vehicle position over the pad so it remains to be seen whether BMW have conquered this problem. (Futurism)
• VW’s director of development appeared to suggest that the company will unveil an all-electric Phaeton replacement at the Geneva 2018 show. (Motoring)

Other

• Airbus is creating a flying taxi accelerator program for Chinese start-ups that offers participants $100,000 of investment and a four-month long stint in an incubator located in Shenzhen. (TechCrunch)
• Gogoro, an electric scooter company, is starting a scooter sharing scheme in Japan. (Wired)
• According to news reports, mapping company HERE’s current rate of spending on R&D is €640 million annually, nearly 60% of revenue. (Reuters)