All posts by Ad Punctum Team

Created a joint venture with Northvolt and Umicore to improve recycling of used electric car batteries. (BMW)
Unveiled the production version of the X7. (BMW)
Recalling charging cords for electric vehicles in the US. (Green Car Reports)

Released preliminary financial results for Q3 2018 because profits were lower than expected (about €1 billion lower than the prior year). The blame was placed on lower than expected sales of vans, potential recall costs over air conditioning refrigerants and “governmental proceedings and measures” related to diesel vehicles. (Daimler)
Investing in Soul Machines, a developer of digital avatars. (Reseller)

Agreed a deal to sell Magneti Marelli to KKR-backed Calsonic Kansei for €6.2 billion and expects the transaction to close in the first half of 2019. (FCA)
Maserati will reportedly use an 800 volt electric drive developed by Ferrari. (Autocar)

Ferrari

Maserati will reportedly use an 800 volt electric drive developed by Ferrari. (Autocar)
- Implication: Since Maserati’s first electric cars will be launched in the early 2020s and Ferrari have yet to confirm any product plans (silent development mules notwithstanding), either we can expect a similar launch window for the Ferrari hybrids or there has been an unusual decision to let Maserati launch first.

Ford promised US dealers that it will cut delivery times for new orders from 82 to 38 days. (Reuters)
Signed collaboration agreement with Mahindra and Mahindra that will see the Indian firm build a small engine for Ford’s Indian vehicles and a jointly shared telematics platform. (Mahindra)
Dealers complained that Ford was not giving them enough information about future plans and the amount of exposure to senior leaders had fallen. (Automotive News)
Increasing lifetime production of the GT to 1,350 units. (Ford)
Incensed French politicians and unions by refusing a takeover offer from Belgian company Punch Powerglide for the Bordeaux transmissions plant, saying that it would instead proceed with a closure. Although politicians said Ford’s position was incomprehensible, it turns out that the new supplier’s plan had demanded Ford guarantee orders until 2021 (when it wants to stop taking products from 2019) and would only save half the jobs. (Sud Ouest)
The US safety regulator opened an investigation into F-Series power tailgates that open unexpectedly when the vehicle is in motion. (Detroit News)
Released a new series of adverts in the USA featuring the “built Ford proud” strapline. In one expensively produced slot Brian Cranston talks down the hot air from the competition (presumably with Tesla in their sights). (Ford)
- Implication: If only the people involved had looked at the script with a slightly more critical eye they might have thought better of including shots of Ford’s bulldozed Dagenham foundry whilst talking about how well Ford prepares for the future (they perhaps mistook it for the Rouge) and been slightly less conceited given that Elon Musk is still on his first car company when it took Henry Ford three tries to get the formula right.

Hoping to raise €950 million to refinance debt resulting from the its Volvo AB stake. (Reuters)
Says that 50% of the Care by Volvo subscription users bought the service using their mobile phones. (Engadget)

Will work with Engie and Air Liquide to boost hydrogen infrastructure for fuel cells. (Yonhap)

Mitsubishi commenced production at its new engine plant in China, a joint venture with GAC. (Mitsubishi)
Nissan created a new business unit to cover Latin American markets. (Nissan)
Nissan now offers a range of aftermarket option packs aimed at fleet. Nissan says the products can increase residual values and fleets will benefit from discounts and the availability of dealers to fit the accessories. (Nissan)

German investigators raided Opel’s office and said the firm would need to recall around 100,000 Cascada, Insignia and Zafira cars. Opel said it would challenge any recall order. (Reuters)
Opel / Vauxhall will continue to use GEFCO for its logistics. (Autocar)
Withdrawing from rally competitions because it thinks that without electrified vehicles the sport will lose relevance, or it wants to save on marketing spending; whichever version you want to believe. (PSA)
Opel will offer German customers up to €8,000 to trade in older diesel vehicles for a new car. (Opel)

Renault’s JV with Brilliance will create a new factory in Liaoning, China to make electric light commercial vehicles. There will be three new, as yet unspecified, models. (Renault)

CEO Musk said the company will begin installing a new driver assistance chip in about six months. Buyers who have already pre-paid for “self-driving” will receive the chip free of charge. For anyone else, it will cost $5,000 to have the upgrade (presumably including software updates). (Reuters)
Launched a derivative of the Model 3 with a smaller battery and a $45,000 starting price. (Wired)
Purchased the land for its new factory in Shanghai, China. (CNBC)
CEO Musk said he had just realised there were major gaps in the servicing coverage for customers in North America, promising to sort the problem out within 3 to 6 months. (Clean Technica)
Removed the ability to pre-order “full self-driving” on cars, despite having announced an improved driver assistance chip. Elon Musk said the option was causing too much confusion. (The Verge)
- Implication: Apart from the obvious questions about Tesla’s ability to deliver on its promises, the move also tarnishes Tesla’s technology leadership crown and leaves a space for other companies to claim.

The head of Toyota’s self-driving program in the US said the safety argument for robotaxis was flawed because the gains were insufficiently large over human drivers. (IEEE Spectrum)
Ran an advertising pilot that claimed a 21% improvement in performance from using blockchain to verify that real users had been shown advertisements. The press release was heavy on mentions of blockchain but light on explanation. (Lucidity)

Porsche’s CFO said that if VW were to spin off its luxury brands, they could reach a collective valuation of between €60 billion and €70 billion but the company quickly rowed back on the comments. (CNBC)
CEO Diess told suppliers there would be a €50 billion to €60 billion market for battery cells in Europe soon, and the opportunity could even rise to €100 billion. He also believes that German carmakers have a 50:50 chance of retaining their competitive advance in 10 years. Diess once again took the opportunity to complain about CO₂ regulations in Europe and said that with the current mix of electricity generation in Germany (lots of coal), electric vehicles were not that clean. (VW)
Announced a new factory in Anting, China in partnership with SAIC that will be purpose built to produce electric cars on the MEB platform. The plant will produce up to 300,000 units annually. (VW)
Audi will pay a €800 million fine to German prosecutors for its part in the diesel scandal. (Audi)
Launched a big marketing program for diesel owners in Germany, with discounts of between €4,000 to €8,000 depending on the combination of new and traded in vehicle. VW is also offering incremental discounts to buyers in 14 areas with the worst emissions. (VW)
The Audi etron battery electric SUV is suffering launch delays of several weeks caused by software issues. (Reuters)
Porsche wants to price the Taycan (Mission E as was) between the Cayenne and Panamera, indicating a starting price around €80,000. There could be performance versions priced as high as €200,000, with a Taycan Turbo S nameplate mooted — confusing since there wouldn’t be a turbo in sight. (Automotive News)
To nobody’s surprise, Porsche confirmed the Mission E Cross Turismo had been approved for series production. The 300 jobs the firm says will be created indicate and expected annual volume of around 5,000 units. (Porsche)
Executives said Porsche would have an all-electric “big SUV” by 2022, thought to be a new vehicle in the line-up beyond the Taycan Cross Turismo since “the Taycan derivatives have already been showcased”. (Autocar)
Sharing the development costs for the forthcoming PPE platform between Porsche and Audi will reportedly save both brands 30% versus going it alone. (Porsche)
Started production of the SEAT Tarraco at the Wolfsburg plant. (VW)
Audi says it will implement a new type of panel quality checking system in its press shops. It will replace a camera system that uses image recognition specific to the type of panel being made with one that can recognise defects in all kinds of parts. Although Audi had to spend lots of time teaching the new system, the company says it will be worth it when it can introduce new parts with less effort. (Audi)
Škoda’s next c-car will be called the Scala, with the Rapid nameplate being retired. (Autocar)
- Implication: Rapid, Rapide are on the way out. Vitesse seems permanently confined to the dustbin. Veloster soldiers on. Superfast and Speedster are brand new. What does this mean for velocity-related nameplates?

Other

Aston Martin trademarked the “Valhalla” name and seems set to use it in either its forthcoming hypercar or mid-engined sportscar. The former is more likely. (Motor 1)
ATS will make 12 McLaren-based GTs with an advertised price of €740,000. (EVO)
NIO had delivered 3,368 cars by the end of September. It is aiming for 10,000 by the end of the year. (NIO)
Foton said it wanted to sell up to 67% of Borgward to help the brand grow. (China Daily)

News about other companies and trends

Economic / Political News

European passenger car registrations in September of 1.12 million were down (23.4)% on the same period a year earlier. On a year to date basis, sales are up 2.3%. (ACEA)
A cross-party group of UK politicians called for a ban on gasoline and diesel vehicles by 2032. (The Guardian)
EU politicians want a 35% decrease in CO₂ from commercial vehicles from 2021 levels, mirroring the improvements earlier proposed for passenger cars. (Auto Blog)

Suppliers

Michelin announced Q3 financial results. Revenue was down year-on-year, and full year profit outlook was “refined” (Michelin-speak for downgraded). (Michelin)
ZF is working on augmented safety systems using interior cameras to detect interior cabin arrangements, such as whether the seats are reclined, to tailor crash setting and improve survivability. (ZF)
Adient reported preliminary Q3 20018 and full year financial results. (Adient)
Denso released its annual report and announced the firm’s “second founding” as a mobility company. (Denso)
Sundaram-Clayton opened a new foundry in Chennai, India. (Autocar)
ZF purchased a 35% stake in engineering services provider ASAP for an undisclosed sum. (ZF)
FCA agreed a deal to sell Magneti Marelli to KKR-backed Calsonic Kansei for €6.2 billion and expects the transaction to close in the first half of 2019. (FCA)

Dealers

Chinese used car online sales platform Chehaoduo raised $162 million. (Shine)
Start-up LotBlok will launch a blockchain-based car sales platform. (LotBlok)

Uber is reportedly seeking a $120 billion valuation for its IPO (The Guardian) and recently raised $2 billion in debt to tide it over until that mega payday. (CNBC)
Electric car sharing firm Scoot launched services in Chile. (Scoot)
The French town of Dunkirk made all its bus services free for residents, saying that fares only covered 10% of the operating costs anyway. One month after the scheme was implemented, usage had risen by 50%. (The Guardian)
Uber is creating a business leasing trailers for heavy goods vehicles. (Uber)
Careem announced $200 million of a hoped-for $500 million fund raising round. (Careem)
Ride hailing start-up Alto raised $13 million and will soon start operations in Texas. (Dallas Innovates)
Ford’s Chariot service will start offering private bookings. It isn’t clear how the utilisation will be sufficiently high to make the service cheaper than existing options. (Ford)
Uber studied 1.5 million rides to determine the best way of apologising to customers (and found out it is by giving them a $5 discount). (Business Insider) the firm is also studying a short term staffing business. (TechCrunch)

Lidar firm SOS Lab raised $6 million. (Optics)
Autonomous driving developer Momenta raised $46 million in a round valuing it at over $1 billion. (Momenta)
Self-driving simulation company Cognata raised $18.5 million. (Reuters)
Lidar developer Leddartech recently opened new development sites, in Austria and Canada. (Leddartech)
UK Taxi firm Addison Lee and autonomous vehicle developer Oxbotica announced a plan to commence services with self-driving taxis in London by 2021. (The Guardian)
Uber has reportedly been receiving unsolicited bids for its self-driving arm. (Financial Times)
An article suggested that Google’s initial self-driving cars had a worse safety record than official documents show, because of the cavalier attitude of some of the developers. (New Yorker)
Rinspeed unveiled a new, smaller, version of its skateboard concept called the MicroSNAP. (Car Scoops)
Sensor fusion company Vayavision raised $8 million. They claim that through processing, their technology can dramatically upscale lidar and radar inputs. (PE Hub)
The head of Toyota’s self-driving program in the US said the safety argument for robotaxis was flawed because the gains were insufficiently large over human drivers. (IEEE Spectrum)

US lawmakers proposed to remove the cap on federal rebates for zero emission vehicles. Under current rules, once a carmaker sells 200,000 units the $7,500 tax credit starts to drop. Tesla and GM would be the primary beneficiaries since they are already near or over the limit. (Yahoo)
Researchers think they have cracked the problem of high-power wireless charging. In a laboratory they demonstrated a 120 kW system (only slightly lower power than Tesla superchargers) working at 97% efficiency. (Inside EVs)
Workhorse launched the NGEN-1000 light commercial vehicle saying it had opted for a 100-mile range with a smaller battery to better compere on cost with diesel vehicles. (Workhorse)
- Implication: Since the received wisdom is that greater range is better and commercial operators feel constrained by shorter range (although plenty of use cases are satisfied by the specifications). It will be interesting to see whether Workhorse’s logic works.
BMW, Northvolt and Umicore created a joint venture to improve recycling of used electric car batteries. (BMW)

Connectivity

Intel and Simacan are creating the infrastructure for trucks to platoon on high traffic routes in Germany. (Intel)
Ford will use technology from Wind River to manage over the air updates. (Telematics News)
TomTom lost its contract to supply Volvo with in-built mapping. (Reuters)

Other

Geely-owned flying car firm Terrafugia started taking orders but hasn’t yet announced pricing. (Automotive News)
The Bloodhound supersonic car program went into administration, needing £25 million to complete the program objectives. Executives appeared bullish on the prospects for a recovery. (Autocar)
Volvo Trucks said it would have to recall some trucks because degradation of components could cause vehicles to exceed emissions regulations as they aged. (Reuters)
Bicycle sharing start-up Zoov uses electrically-assisted bikes with a non-traditional rack for charging. Although the bicycles have to be docked, they do not use locks. (Engadget)
Electric scooter rental firm Grin raised $45 million to expand in South and Central America. (TechCrunch)

Find our archive here.

Auto Industry Briefing — week ending 14th October 2018

October 16, 2018 Ad Punctum TeamAd Punctum, Automotive0

Verifying the safety of driverless vehicles; Executives and politicians play pass the parcel; and move over Marty McFly. Please enjoy our auto industry and mobility briefing for 8^th October to 14^th October. A PDF version can be found here.

Favourite stories of the past week…?

Paperback Writer — Uber commissioned a report about measuring autonomous safety from RAND. It makes for interesting reading although it raises more questions than it answers. RAND say they weren’t seeking to determine a way forward, just point out considerations, but their inability to identify a clear path forward suggests governments need to get their thinking caps on and talk to each other.
Angry Again — VW’s CEO went on a bit of a rampage criticising EU politicians for setting emissions targets that will cause “a painful revolution instead of a transition”. VW believes that to meet new emissions targets (likely to be 35% lower by 2030 than 2021) would mean nearly half of vehicles would have to be fully electric (our maths is VERY different). But can the industry really complain that 12 years isn’t enough time to plan? Are automotive executives worried about unforeseen shocks, or just angry at having to confront entrenched interests they were hoping would fade away?
Message In A Bottle — PSA’s CEO received a letter from himself in 2038. He described a world where autonomous cars speed around and ride hailing services send us on journeys with like-minded individuals who might want to discuss what we’ve seen on tv (and in-car olives? They weren’t mentioned). Private car ownership persists apparently, but why (btw, he says here @ 17:00 that PSA “isn’t afraid” of that happening)?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

News about the major automakers

Confirmed plans to take a majority share of its Chinese joint venture with Brilliance. Under a new agreement that extends to 2040, BMW will see its stake rise to 75%, local production capacity will rise to 650,000 units annually and the two partners will invest €3 billion “in the coming years”. (BMW)
Sold 1,834,810 units globally in Q3 2018, a 1.3% increase on a year earlier. (BMW)
BMW’s greater joint venture share will cost the company €3.6 billion and the deal will close in 2022. (Reuters)
Concluded the formation of its 51% software joint venture with Critical Software based in Portugal. (BMW)

Sold 1,715,087 units in Q3 2018, down (0.1)% on Q3 2017. (Daimler)
Reportedly in talks with Geely to create a Chinese joint venture offering car sharing and ride hailing. (Just Auto)

Italian unions are becoming increasingly alarmed about repeated down days at plants in Turin. (Torino Oggi)
Ended production of diesel powered Pandas. (Fleet Europe)

Reportedly part of a yet-to-be-announced German battery consortium that will be supported by €1 billion of government cash and is set to be officially launched on 13^th (Reuters)
Said that the previously reported assembly of pure electric Transit vans in Germany employed 180 employees working in two shifts, for a capacity of 3,500 vehicles per year. (Ford)
Recalling around 200 GTs to correct problems that can cause fires. (Ford)
Kanye West stopped by the White House to tell Donald Trump that Ford needed to have “the highest design” and the “flyest, freshest, most amazing car” but declined to elaborate on how to do so. Ford’s spokesman replied “like we always say, you can’t spell fresh, fly and dope without Ford”. (Detroit Free Press)
CEO Hackett said no one was ahead of Ford in developing autonomous vehicles. (Axios)

Launched production of Geely vehicles at its factory in Tunisia. (Xinhua)
Reportedly in talks with Daimler to create a Chinese joint venture offering car sharing and ride hailing. (Just Auto)
Looking at an expansion of the Care by Volvo subscription service to include used vehicles. (CNET)

Workers in South Korea may go on strike over the company’s moves to separate its R&D operations there from the plants. Unions said the restructuring “appears to be a move to sell its car plants”. (Yonhap)
GM executives think some people turn down ride hailing if the driver has an Infiniti QX60 rather than a Chevrolet Suburban. (Digital Trends)

Hyundai’s Cradle VC unit invested in Perceptive Automata, a firm developing software to predict intent of pedestrians near to self-driving cars. (Hyundai)

The Alliance Ventures VC unit invested in mobility data company Coord. (RNA Alliance)
Delayed pay talks with UK unions until 2019, awaiting the outcome of Brexit negotiations. (Sky News)

Confirmed already rumoured changes to the Opel /Vauxhall line-up, saying that Adam, Karl/Viva and Cascada will be dropped by the end of 2019, mainly because of poor CO₂ In 2020, Opel / Vauxhall vehicles will cover 80% of “mainstream market volume”. (PSA)
CEO Tavares sent a letter from the year 2038 where he lives in a world of 230 kmh autonomous sports cars, where L5 capability counts for 25% of sales and ride hailing services that match him with other motorsport nuts. He declined to say who was Formula 1 world champion the prior year, presumably having watched Back To The Future II before writing. His main message was that stakeholders needed to come together to accept revolutionary change should not stand in the way of progress, even though automotive employment accounts for around 6% of the European total. (Les Echos)
Will finalise the strategy to enter the US market by spring 2019. (Automotive News)
Started offering Opel vehicles under Free2Move branded lease deals. (Opel)

The Alliance Ventures VC unit invested in mobility data company Coord. (RNA Alliance)
Signed cooperation agreements with three major European energy companies — EDF, Enel and Total — to establish electrical charging infrastructure. (Renault)

Suzuki

Proceeding with land acquisition for production of a second plant in Gujarat, India, 35km from an existing factory. Construction will begin once capacity increases at other plants are in place. (Economic Times of India)

Reportedly considering ending all conventionally powered Jaguar vehicles within the next five to seven years (e.g. at the end of the current model cycle, including the yet-to-be launched but heavily rumoured J-Pace). Internal forecasts are that a four to five car line-up could sell 300,000 units annually. (Autocar)
Planning a major revamp of Indian dealers from 2019 onwards. (Live Mint)
A letter to agency staff said the Solihull shutdown was due to a backlog of 25,000 unsold units. (Birmingham Mail)
Rumoured to be considering buying V8 engines from BMW to replace high power units currently sourced from Ford for the next generation F-Type. (CAR)

Customers in the US wishing to qualify for a full fat federal tax credit had to order cars by the 15^th (Reuters)
Reportedly struggling to maintain production of Model 5,000 units per week. (CNBC)
CEO Musk denied that James Murdoch was in the running to replace him as Chairman. (Bloomberg)
Registered trademarks for a Tesla-branded Tequila. (Business Insider)
- Implication: Tesla once again upends industry convention that drinking and driving should never be associated by laying plans to put it’s brand on a bottle. In a world where beer companies pay Formula 1 drivers to appear in adverts turning down their product at parties, it’s a bold move.

Toyota AI Ventures invested in Perceptive Automata, a firm developing software to predict intent of pedestrians near to self-driving cars. (Toyota)

CEO Diess said a 40% reduction in CO₂ levels by 2030 would mean losing “around a quarter of the jobs in our factories” — 100,000 by his estimate. He wants a slower transition to full electric vehicles to avoid a “painful revolution”. (VW)
- Implication: Despite having a more bullish EV forecast than most OEMs, VW is concerned about a pace of change that is probably beyond its control. OEMs need to do more to prepare themselves for the uncertainty of a transition to electrification. Finding ways to stop developing unique models for pure electric vehicles would be a good start.
VW Group sales in Q3 were 2,611,300 units, a drop of (1.5)% on the prior year. (VW)
Having a 20-day shutdown at its Taubaté, Brazil plant because of weak Argentinian sales. (Reuters)
Audi’s interim CEO is lobbying to have the job on a permanent basis. (Handelsblatt)
Launched production of the Audi A1 at SEAT’s Martorell plant. (VW)

Other

Bollinger announced an all-electric pick-up truck version of the SUV it has been developing. (Bollinger)
VinFast agreed a $950 million credit line to by manufacturing equipment from German companies (Vietnam News). Unfortunately, VinFast’s parent had its credit rating outlook downgraded because of its carmaking plans. (VnExpress)
Electric car start-up e.Go says that changes in supplier controls have delayed the start of production but it now has a roadmap to make vehicles from April 2019 onwards. (Golem)
RBW is offering all-electric MGBs with powertrain from Zytek. (Green Car Reports)
Lamborghini might be calling their lawyers in Tehran about a Hyundai-powered Murcielago-clone. (Russia Today)

News about other companies and trends

Economic / Political News

The UK is reducing the generosity of its EV incentives and “focusing its attention” on BEVs. (Reuters) The industry body said it was putting the transition to electrification “at risk”. (SMMT)
EU governments backed a proposal for passenger car CO₂ emissions to be reduced by 35% from 2021 levels. That is lower than the European Parliament’s 40% threshold but higher than the original suggestion of 30%. (Reuters)
Israel intends to stop sale of new gasoline or diesel-powered cars by 2030, insisting that by then vehicles must either be electric or powered by natural gas. (Reuters)
Germany’s diesel fund which OEMs and the government funded in a bid to see off actions to ban diesels from cities hasn’t dispersed all the money, so VW, Daimler and BMW will get millions back. (Manager Magazin)

Suppliers

Continental was forced by its unions to say there would be no plant closures in Germany and executive calls for improved efficiency were aimed at global operations. (Handelsblatt)
Borg Warner opened a new plant for electric vehicle motors and drive system components in Wuhan, China on the site of a former Remy factory (acquired by Borg Warner last year). (Borg Warner)
Denso took a small stake in software developer eSol. (Autocar)
Bosch says diesel is still a “pillar” of its business and that it will continue to invest in the technology. The company also believes that although some OEMs are announcing in-house production of electric motors, they are doing it “for reasons of jobs” and that ultimately it will become a supplier business. (Les Echos)
Magna opened a seating plant in the Czech Republic to serve BMW. (Magna)
Volvo will use NVIDIA chips in its future cars. (Volvo)

Dealers

The head of the Indian dealer association expects consolidation, saying dealerships are under stress. (Autocar)
Mobile car repair service YourMechanic raised $10.1 million. (FINSMES)
Consumers say UK dealers need to provide more parking spaces and coffee machines, indicating that there are many who aren’t yet convinced by an online purchasing experience. (Motor Trader)

Microsoft made a strategic investment in Grab. (Microsoft)
Ola is reportedly courting a $100 million investment from a private investor. (Economic Times of India)
UK Uber drivers staged a strike to protest for higher fares. (TechCrunch)
Careem says employees can have as much holiday as they want. (Careem)
Bosch is starting a battery electric van rental business in Germany. (Reuters)
Renault-Nissan-Mitsubishi’s Alliance Ventures VC unit invested in mobility data company Coord. (RNA Alliance)
Daimler and Geely are reportedly in talks to create a Chinese joint venture offering car sharing and ride hailing. (Just Auto)

Lidar developer RoboSense announced $45 million in funding. (RoboSense)
Uber sponsored a study by RAND into safe testing of autonomous vehicles. (RAND)
Waymo’s fleet passed 10 million miles of testing on public roads and said it was racking up 10 million virtual miles each day. (Waymo)
Hyundai’s Cradle VC unit and Toyota AI Ventures invested in Perceptive Automata, a firm developing software to predict intent of pedestrians near to self-driving cars. (Hyundai) (Toyota)

Bollinger announced an all-electric pick-up truck version of the SUV it has been developing. (Bollinger)
Ford and Varta are reportedly part of a yet-to-be-announced German battery consortium that will be supported by €1 billion of government cash and is set to be officially launched on 13^th (Reuters)

Other

Lime lost its case to enact a restraining order on San Francisco’s scheme to limit the number of scooter companies allowed to operate in the city. (Engadget)

Find our archive here.

Auto Industry Briefing — week ending 7th October 2018

October 9, 2018 Ad Punctum TeamAd Punctum, Automotive0

How driverless vehicles can thrive today; GM and Honda’s recipe for self-driving success; and is Ford really getting fitter? Please enjoy our auto industry and mobility briefing for 1^st October to 7^th October. A PDF version can be found here.

Favourite stories of the past week…?

Airportman — Autonomous pod maker Navya is working with a maker of airport vehicles to develop a self-driving vehicle to haul luggage. Smart move. Airports look like a great location to implement this type of product: it is a closed course; there isn’t much traffic; and there are humans close by if the system stops working properly. Roll on savings…
Cruisin’ — Honda are buying a $750 million stake in GM’s Cruise and will spend a further $2 billion over ten years. The deal establishes that GM are interested in sharing the technology and would prefer a well-funded effort that works to proprietary knowledge that is slow to develop. Choosing Honda also indicates GM prefers regionally disparate partners. The door could be open to a European OEM. It also shows that GM understands capital allocation and return on investment. As ridiculous as the Cruise acquisition looked a few years ago, and despite the vehicles not working properly and the rationale behind building a new ride hailing network being unclear, it has been turned into something that has real value.
You Talk Too Much — Ford’s US management team have made the business fitter by starting a new day-long meeting each week that sees the top team journey around a series of product specific war rooms. Journalists were told that the process helped executives decide to stop making big SUVs with tiny screens because customers didn’t want them — something a build to order system would have done in a far simpler way. Is this really what “operational fitness” looks like in 2018?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

News about the major automakers

Confirmed that the i4 will launch in 2021. (BMW)
Falling orders from BMW have led Nedcar to cut 1,000 of the 7,000 staff at the plant. (Dutch News)
Dropping the i3 range extender from the line-up, citing the improved range of the upgraded battery version and lower sales. (Autocar)
Said “there may be some news” in 2019 about extra partners for its autonomy collaborative. (Reuters)
Would allocate more Mini production to the Netherlands in the event of Brexit. (Reuters)

Daimler’s CFO will leave by the end of 2019, having chosen not to renew his contract. (Daimler)
Started construction of its previously announced battery plant in Alabama, USA. (Daimler)

Reportedly intends to recall Jeep Wranglers to fix faulty welds. (LiveMint)

Told salaried employees it is in “the early stages of an organizational redesign of the global salaried workforce” and that some redundancies should be expected but there was no firm target. (Bloomberg)
Ford’s North American management team have adopted a new process where they (20 executives) spend one entire day per week reviewing a series of 13 war rooms containing information on different models. Despite the management time, the only example of progress they were prepared to offer was a decision to increase production of cars with large infotainment screens and drop a less capable system. (Automotive News)
- Implication: By the way, this is the sort of thing that building to order, rather than scheduling vehicles months in advance, would overcome without the need for expensive executive analysis.
PSA said it will not “develop more evolutions of diesel technology” unless it can see a clear future market demand. The company has apparently decided that a mix of 5% or lower by 2023 would see diesel discontinued. It is unclear whether Ford shares the same view. If not, it will impact their diesel collaboration. (Autocar)
Idling Transit production in Kansas City for two weeks, citing the variability of fleet orders. (Detroit Free Press)
Using quantum computing to create efficient route planning for diesel vehicles. Ford says that doing such work on traditional computers does not scale properly. (Ford)
Invested in weather forecasting start-up ClimaCcell as part of a $45 million round. (ClimaCell)

Buying two Geely-affiliated engine plants in China from local holding companies. (Reuters)

Honda will invest $750 million in a 5.7% share in GM’s Cruise self-driving unit and has agreed to a further $2 billion of spending over the next 10 years. (GM)
- Implication: GM accomplished two things with this deal: 1) it sent a signal to other carmakers that Cruise is truly open for business, although it probably prefers to share with those that are regionally disparate from GM’s core operations (any European-centric OEMs interested in partnering? Looking at you, JLR and PSA); 2) GM is using Cruise as a case in point on capital allocation by inviting others to jointly fund research and trumpeting the increase in value since taking over the start-up.
Honda and GM are developing a purpose-built shared autonomous vehicle built on Cruise’s technology. The teaser image in a blog post by Cruise’s CEO suggests it looks something like VW’s Sedric concept. (GM)
CEO Barra said US regulators needed to set rules for self-driving vehicles, calling new legislation “essential”. (Axios)

Honda will invest $750 million in a 5.7% share in GM’s Cruise self-driving unit and has agreed to a further $2 billion of spending over the next 10 years. (GM)
Honda and GM are developing a purpose-built shared autonomous vehicle built on Cruise’s technology. The teaser image in a blog post by Cruise’s CEO suggests it looks something like VW’s Sedric concept. (GM)
Honda’s long-running talks on a cooperation with Waymo reportedly feel flat because Waymo would not share technical details of its self-driving technology and wanted Honda to focus solely on delivering a donor vehicle. By contrast, GM apparently invited Honda engineers for in-depth technical reviews before the Cruise investment, including multiple tests and code analysis. (Bloomberg)
Launched a pilot in Ohio, USA to test V2X communications and gantry-mounted object recognition. (Honda)
US magazine Consumer Reports said there were problem with 1.5 litre engines in the CR-V that could cause stalls. Honda argued that the issue was small in nature and not safety critical. (CNN)

Mazda

Will deploy “some form” of electrification in all vehicles by 2030, forecasting 95% of sales will be hybrid and 5% BEV by that time. Mazda includes range-extender vehicles, for which it is developing a new rotary engine, in its BEV mix forecast. (Mazda)

Increasing production capacity of the Xpander from 160,000 to 200,000 units annually. (Mitsubishi)
Carlos Ghosn said Renault-Nissan-Mitsubishi may extend its cooperation with Daimler to include battery technology, autonomy and mobility services. (Reuters)

Will not “develop more evolutions of diesel technology” unless it can see a clear future market demand. The company has apparently decided that a mix of 5% or lower by 2023 would see diesel discontinued. (Autocar)
- Implication: It isn’t totally clear what PSA’s view of what constitutes an “evolution”. Are they saying the investment would fall to zero or simply commenting that they have ruled out new ground-up engines? The statement leaves questions around PSA’s commercial vehicle business since this is almost 100% diesel and primarily uses engines developed for cars.
Unveiled more details of its already-announced CMP platform for smaller vehicles. PSA said that Chinese partner (and minority shareholder) Dongfeng paid 50% of the development cost. The platform can accommodate ICE, PHEV and BEV powertrains. (PSA)
CEO Tavares said Opel was only around one third of the way through its efficiency plan, saying that laws forcing the involvement of unions had made progress “very difficult”. (FAZ)
CEO Tavares cautioned that “what everyone needs to realise is that clean mobility is like organic food — it is more expensive”. He may find his comments less profound after reading the various EU technical documents on electric vehicles and lower CO₂ which state very clearly that this is absolutely the EU’s expectation. (Reuters)

Unveiled the K-ZE small electric crossover. Renault said the vehicle will be “affordable” and launch in China in 2019, with other global markets following. The company also confirmed plans for hybrid and plug-in versions of the Captur, Clio and Megane in Europe. (Renault)
Executives said Renault wanted to add a C-sized electric car to its line-up, potentially with SUV-styling and a real world range of 310 miles by 2022. (Autocar)
Invested in directional sound specialist Akoustic Arts. (Renault)
CEO Ghosn said Renault-Nissan-Mitsubishi may extend its cooperation with Daimler to include battery technology, autonomy and mobility services. (Reuters)
CEO Ghosn said diesel is “condemned” because of policymakers. (Financial Times)
Executives said Renault was unsure whether to continue with the Scenic at the end of the current cycle. (Autocar)

JLR said it had spent in the low double digit millions of pounds on Brexit preparation. (Bloomberg)
Planning a two week shutdown in Solihull during October, blaming falling demand in China. (BBC)
Defender prototypes have been spotted around JLR’s engineering facilities, their camouflage and decoy bodywork seemingly undermined by uncharacteristic hashtag branding across several surfaces. (Sunday Times)

Reported Q3 deliveries of 83,500 vehicles. Model 3 shipped 55,840 units and 53,239 vehicles were made during the quarter. There were 14,470 Model S and 13,190 Model X vehicles delivered, indicating that demand for both has plateaued. The firm complained about its cost disadvantage in China. (Tesla)
CEO Musk ranted about shortsellers and the investors who lend them shares to short, saying there was “no rational basis for a long holder to lend their stock”. (CNBC)
- Implication: Ad Punctum has heard a different point of view from long only investors, being told something along the lines of “short selling goes on, my investment hypothesis takes account of short selling, so why not profit even more by letting them use my stock to do the shorting I’ve already taken into account?”. Although Musk took aim at index tracking funds, the same argument still applies in the context of the overall index.
Published its safety report for Q3 2018. The data was very vague, specifying only per mile occurrence rather than gross figures for fleet mileage or accidents. Tesla say their driver assistance systems reduced the likelihood of accidents by almost half but comparison to average statistics was made more difficult by Tesla recording, but not separately reporting “crash-like” events (i.e. where there wasn’t actually a crash). (Tesla)
An article highlighted stocks of Teslas at various distribution points across the USA, suggesting the numbers pointed to unacknowledged problems. More likely, they are simply appropriate for the volume of Model 3 being produced and Tesla’s lack of third-party inventory. (New York Times)
Model 3 received standout crash test results from US agency NHTSA. For some reason, Tesla chose comparison videos for older competitor cars to highlight the relative performance gap (for instance a 2016MY Lexus ES when there is a new car for the 2019MY). (Tesla)

Created a joint venture with Softbank called Monet, in which Toyota will have 49.75%, aiming to jointly develop on-demand mobility services and uses for Toyota’s e-Palette autonomous vehicle platform. (Toyota)
Recalling 2.4 million cars built between 2008 and 2014 to because of a condition where the vehicle can stall at high speed. The same cars have already been recalled once but it seems not all problems were fixed. (Times of India)

Škoda’s CEO said the brand needs a further 400,000 units of annual capacity. (Times of India)
Bugatti CEO said the brand “is ready for more” and might launch a crossover or SUV. (Bloomberg)
Porsche will produce 1,948 examples of the 911 Speedster shown in Paris, with sales starting in 2019. (Autocar)
It wasn’t an April fools’ joke. VW T-Roc cabriolets have been spotted out and about. (Autocar)

Other

Aston Martin’s IPO didn’t go well with the stock immediately dropping. (The Guardian)
VinFast executives said the group was prepared to spend $3.5 billion on launching the company. (Reuters)
Faraday Future’s founder is in dispute with the company he apparently agreed to sell a 45% stake in the electric vehicle start-up to. (Reuters)
The Aspark Owl order book opened with a non-refundable deposit of $1.15 million being requested to secure one of the 50 $3.6 million electric supercars. Tesla Roadster launch editions look cheap by comparison. (Jalopnik)

News about other companies and trends

Economic / Political News

The EU Parliament voted for harsher CO₂ reduction targets than previously recommended — a 20% reduction from 2021 levels by 2025 and a 40% reduction against the same reference by 2030. In addition, quotas for sales of low and zero emission vehicles (in effect PHEVs and BEVs) would be set at 20% by 2025 and 35% by 2030. (EU Europa) The European trade body pleaded for national governments to “bring some realism to the table” before the targets are fixed. (ACEA)
German politicians tabled a plan to retrofit older diesels but it met with mixed reaction from carmakers. VW said it would pay some of the costs whilst BMW and PSA said the solution made little sense and baulked at the idea of paying to change a vehicle that was legal at the point of sale. (DW)
US SAAR of 17.4 million units in September was down (5.8)% versus a year earlier. (Wards)
UK passenger car registrations of 338,834 units dropped (20.5)% on the September 2017. (SMMT)
Passenger car registrations in Spain of 69,129 unit in September were down (17)% versus prior year. (ANFAC)
Italian passenger car registrations of 125,963 units in September dropped (25.5)% on prior year. (UNRAE)
September passenger car registrations in France of 148,752 units were down (12.8)% on a year earlier. (CCFA)

Suppliers

Delphi issued a 2018 profit warning and that CEO Butterworth would be stepping down, appointing Hari Nair as CEO on an interim basis. (Delphi)
ThyssenKrupp will split into two separate entities. The automotive division will be part of a business called ThyssenKrupp Industrials, along with elevators and plant machinery. (ThyssenKrupp)
Magna and Altran will establish a 50/50 joint venture engineering centre in Casablanca, Morocco. (Autocar)

Dealers

Online automobile marketplace Droom raised $30 million for international expansion. (Economic Times of India)

Moovel will launch on-demand services in North America through a pilot in Los Angeles. (Moovel)
Daimler will launch car sharing in Paris with 400 Smart EVs, and Toyota might join in. (Bloomberg)
Toyota created a joint venture with Softbank called Monet, in which Toyota will have 49.75%, aiming to jointly develop on-demand mobility services and uses for Toyota’s e-Palette autonomous vehicle platform. (Toyota)

US transport regulator NHTSA published draft guidelines for autonomous vehicles. It promised to be proactive and to reinterpret rules written for human drivers to include self-driving vehicles, but also stressed that it would prioritise safety. This is something of a mixed bag for self-driving proponents since although reliable autonomous cars are expected to have less accidents that human-driven ones, there is nothing even approaching a consensus on how to do this without driving billions of miles. (NHTSA)
US magazine Consumer Reports said that GM’s Supercruise driver assistance system was the best on the market, with Tesla’s Autopilot also being commended. Tesla critics portrayed it as a loss for the brand. (USA Today)
Self-driving truck start-up Ike emerged from stealth mode saying it planned to run trucks that would never have to leave the US highway system, instead transferring loads at hubs. The company has licenced Nuro’s autonomous driving technology. (Wired)
Sensor developer Aeva announced $45 million in new funding. (Venture Beat)
Navya announced a cooperation with Charlatte Manutention to develop autonomous vehicles for use in closed-course settings, such as airport baggage delivery. (Navya)
- Implication: We think this is a smart move as airport vehicles have several characteristics making them suitable for early application of autonomy: 1) they operate continuously in the same environment, so building local knowledge is easy; 2) other traffic can be controlled (and is relatively sparse anyway); 3) there are lots of humans around to help out if the vehicles get stuck for some reason.
Ford called on self-driving vehicle developers to adopt a common standard for communicating intent to other road users, e.g. whether a vehicle has decided to slow down and give another road user right of way. (Ford)
Waymo had a significant portion of its lidar patents struck off following a challenge. (Ars Technica)
Honda will invest $750 million in a 5.7% share in GM’s Cruise self-driving unit and has agreed to a further $2 billion of spending over the next 10 years. (GM)
Honda and GM are developing a purpose-built shared autonomous vehicle built on Cruise’s technology. The teaser image in a blog post by Cruise’s CEO suggests it looks something like VW’s Sedric concept. (GM)

Xing Mobility is developing a modular kit that it believes will be useful for retrofitting existing combustion-powered products. (Clean Technica)

Connectivity

Vayyar Imaging will supply Valeo with in-car sensors to monitor human occupants. (Autocar)
TomTom will supply maps to PSA “beyond 2020” (TomTom) and also to BMW. (TomTom)
Honda launched a pilot in Ohio, USA to test V2X communications and gantry-mounted object recognition. (Honda)
Molex Electronics Technologies acquired Laird’s connected vehicles business. (Autocar)

Find our archive here.

Auto Industry Briefing — week ending 30th September 2018

October 1, 2018 Ad Punctum TeamAd Punctum, Automotive0

Executives without insurance; the impact of infrastructure; and the difficulty of predicting consumer demand. Please enjoy our auto industry and mobility briefing for 24^th September to 30^th September. A PDF version can be found here.

Favourite stories of the past week…?

Falling Into You — McLaren’s CEO said what many automotive executives are thinking when expressing concern that spending “a fortune” on Brexit contingency planning could prove to be a “waste of time”. But isn’t that what insurance is… in hindsight?
Tell Me Why — ABB executives say the Indian market won’t support battery swapping, citing the complexity of charging the batteries. But surely, if infrastructure isn’t much good, it’s easier to get it working at a central location rather than everywhere?
Don’t Dream It’s Over — FCA delighted in saying officials planning US fuel economy measures in 2012 failed to anticipate the market shift into SUVs. Isn’t this the same firm that has deemed the same market shift to be a one way street (and pulled products out of the cycle plan accordingly)? What will FCA executives of 2024 think?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

News about the major automakers

Announced a profit warning, primarily blaming, extra incentives in Europe from competitors who were pushing cars into the marketplace ahead of the WLTP cut-off; volatile international trade tariffs; and adjustments to goodwill and warranty reserves. (BMW)
BMW’s German dealers threatened to not sign revised five-year contracts with the brand, jeopardising sales in October as the situation could theoretically result in a sales stoppage. They relented at the last minute. (Reuters)
Upgraded the i3’s battery, it now has 42.2 kWh capacity. (Autocar)

Announced that Ola Källenius will become CEO and head of Mercedes-Benz cars in 2019 with Dieter Zetsche taking a two year “cooling off” period and then returning as chairman in 2021. (Daimler)
Daimler’s new CEO elect is not in the habit of hugging people. (Handelsblatt)

Made a series of executive changes, including new leaders for Europe and Maserati. (FCA)
Executives said the impact of model mix shifting from cars to SUVs in the US was a “wake-up call” for officials setting fuel economy targets. (Reuters)
FCA’s Michigan plants are suffering a worrying spate of vehicle thefts. (Detroit Free Press)

Admitted low customer interest (apart from users who would otherwise have opted for rental vehicles) in its Canvas subscription program meant a rethink was needed. (CNET)
Chairman Bill Ford likes salsa dancing (probably) but detests gyrations in trade negotiations. Although he called for certainty, he declined to say what Ford wants. (Reuters)
Argo AI’s CEO said Ford’s driverless car program will involve up to 100,000 vehicles. (Bloomberg)
Ford sources suggested the scope of collaboration with VW had been expanded to explore whether Ford vehicles should be manufactured at VW plants in South America and Europe, allowing Ford to trim capacity. (Reuters)
Agreed to pay more compensation to UK Ford owners who have experienced engine failures. (BBC)
Will stop making the Focus in Argentina from 2019 at the end of the current model cycle. (Reuters)

Lotus is overhauling its headquarters. (Autocar)
Unveiled the cross country version of the V60 estate car. (Volvo)

Moving the Cadillac brand headquarters back to Michigan from New York. (WJLA)
Recalling over 3.3 million vehicles in China to correct suspension problems. (Reuters)
Reportedly in talks to sell its Pune, India plant to JSW Energy. (Mint)

Recalling about 255,000 vehicles globally because of problems rear camera’s software. (Times of India)

Launched production of the all-new Altima at the Canton, USA plant. (Nissan)
Infiniti has now dropped all hybrid models from its US line-up. (Green Car Reports)

Will create a joint venture with Punch to manufacture electrified dual clutch gearboxes at PSA’s plant in Metz. The 600,000 capacity line will use designs developed by Punch. Combined with a 48V system, PSA expect a 15% fuel economy saving in urban conditions. (PSA)
CEO Tavares said PSA was an “ardent supporter” of creating a European battery champion. (France3)

Carlos Ghosn said the Renault-Nissan-Mitsubishi alliance partners will clarify everything about the future state of the relationship within the first half of his term as Renault CEO (i.e. by 2020). (Bloomberg)
Building 60MWh of stationary storage in Europe by 2020. Located across three sites (two Renault factories and a former German coal mine), the project will require 2,000 vehicle batteries, a mix of used batteries and those ready for aftermarket sales will be employed. (Renault)
Launched the Moov’in Paris car share scheme with no subscription and rental charges of ~€23 per hour. (Renault)

Elon Musk agreed to step down as Tesla’s chairman for three years and pay a $20 million fine, Tesla will pay a matching sum after the SEC claimed his statements about secured funding had been “false and misleading”. The regulator had initially threatened to make Musk step down from all board roles at publicly traded companies. (BBC)
Reportedly has requested 100 company employees as volunteers for full self driving versions of the Autopilot software. The program will run until the end of 2019, suggesting no retail launch before then. (The Verge)
According to internal emails, profitability in Q3 is within reach, but it all depended on a really great performance on Sunday 30^th (Business Insider)
CEO Musk said Tesla is building its own car carrying trailers because of an extreme shortage. (Business Insider)
- Implication: After an earlier scheme to build its own servicing vehicles, Tesla strays ever deeper into non-core activities whilst struggling with problems executing its programs.

Said it would be impossible to hold more than one day’s supply of inventory at its Burnaston plant. (BBC)
Reportedly preparing a shake-up of Japanese dealer operations that will replace the current four mass market channels with a single network by the mid-2020s. (Japan Times)

Announced a productivity improvement plan, seeking 30% better utilisation by 2025. The firm says there is €2.6 billion in “efficiency potential”. Explaining the targets to senior production managers, VW said €1.5 billion could be cut through systemic standardisation. (VW)
VW will base its connected car data platform on Microsoft’s Azure. The two companies will partner to build apps that VW’s cars can use and VW will build a development centre near Microsoft in the USA. (VW)
The CEO of Traton, VW’s truck division, said an IPO would not take place “at any cost”, citing international trade conditions as an issue that could scupper the plan. He also said that shared powertrain was the focus of sharing efforts since it is 60% of the vehicle’s value (including ancillaries such as exhaust, axles and electronics). He also discussed the balance between sharing the dealerships used for VW vans (more like the truck division customers) and developing the vehicles (more like the car division activities). (Handelsblatt)
Off the record sources said VW would support retrofitting of older diesel vehicles in Germany. (Reuters)
Audi confirmed the E-tron GT will have 350kW charging capability. (Inside EVs)
Contracted Unipart to run the logistics for its UK parts operations. About 450 employees will transfer to Unipart as a result of the agreement. (Motor Trader)
Claimed to have developed a new prototype fuel cell that uses far less precious metals. (VW)
Lamborghini said India will be one of the top ten markets for luxury sportscars within five years. (Times of India)
Ending the Audi on demand service in San Francisco directing customers to Silvercar instead. (Auto Rental News)
Reportedly planning a Maybach fighting super Audi A8 under the Hoch sub-brand. (Autocar)
Audi will work with Valtech to create a design team that will develop products and services for autonomous vehicles. The team will contain over 200 people. (Challenges)

Other

McLaren’s CEO summed up the mood amongst automotive executives who are doing the minimum possible to plan for a no deal Brexit saying “what you don’t want to do is go spend a fortune and then find it’s actually a complete waste of time”. Unfortunately, that’s what insurance often is…. (Reuters)
Chery launched a design and development centre in Frankfurt, Germany, aiming to hire around 50 staff. (Autocar)
Ineos is still undecided about a production location but has ruled out Scotland, following clashes with the national government over other business projects. (The Times)
Elio Motors signed a powertrain supply deal with an unnamed large OEM. The appointment of Roush to do the powertrain integration provides a possible clue. The firm says it saved a $120 million R&D bill by not developing its own engines. (Elio Motors)
Pininfarina will base its car program in Munich, Germany and will use Rimac’s (Pininfarina)
Strom Motors said it has secured funding to start production of its electric mini car. (Times of India)

News about other companies and trends

Economic / Political News

Germany’s government is confident it will soon have a way to improve emissions of older diesel vehicles and prevent city bans. (Reuters)
The US and Canadian governments reached an agreement over a revised trade pact. NAFTA will be reframed as USMC and sees content requirements for locally made vehicles increase. (BBC)

Suppliers

Continental awarded their CEO a new five year contract. (Handelsblatt)
Castings supplier Busche Performance Group raised $150 million in debt. (BPG)
Plastics supplier Lanxess is building a new plant in Germany. (Autocar)
Denso and NRI created a joint venture called NDIAS to offer cyber security products for cars. (Denso)
Neue Halburg Guss said already anticipated job losses will be brought forward. (Manager Magazin)
Federal Mogul and Yura Tech established a 51/49 joint venture for spark plugs aimed at supplying South Korean OEMs. (Federal Mogul)

Careem announced the acquisition of on-demand bus operator Commut and promptly offloaded the operations part of the business to Shuttl. (Careem)
Didi said it could no singlehandedly service the needs of the Chinese ride hailing market and that whilst it was dominant, it did not want to become a monopoly. (Technode)
Uber will pay $148 million to US drivers who had their information stolen by hackers. (Business Insider)
Uber is going to spend $10 million on lobbying for ideas that are in the “long-term public interest”. This includes congestion pricing. (Uber)
Bangladeshi ride hailing firm Shohoz raised $15 million. (TechCrunch)
Grab may sell a stake in its Thai business. (Reuters)
Renault launched a Paris car share scheme with no subscription and rental charges of ~€23 per hour. (Renault)

Robosense will offer its new low-cost 64 line lidar unit with an algorithm called “gaze” that focuses on objects detected after broad sweeps have taken place, in order to get a more detailed perception. (Robosense)
A US survey found owners overestimated the abilities of their driver assistance systems; 29% were confident enough with their adaptive cruise control to be distracted at the wheel. (CNBC)
Argo AI’s CEO said Ford’s driverless car program will involve up to 100,000 vehicles. (Bloomberg)

Volvo Trucks said it will start selling electric trucks in California from 2020 onwards. (Volvo Trucks)
Lucid will use (VW-owned) Electrify America’s charging infrastructure. (Lucid)
Lucid believes that its competitive advantage lies in the ability to shrink the size of the powertrain and offer greater interior package than rivals. (CNN)
eMotorWerks is using 6,000 chargers installed in homes across California to provide a 30 MW virtual battery on the state’s energy markets. Charging station owners receive up to $80 per year to participate. (eMotorWerks)
Battery developer Lionano raised $22 million. (Lionano)
ABB doesn’t think battery swapping will work in India because the charging of the battery adds an extra layer of complexity. (Economic Times of India)
VW claimed to have developed a new prototype fuel cell that uses far less precious metals. (VW)
Caetanobus will use Toyota’s fuel cells for demonstrator vehicles it is making. (Toyota)

Connectivity

Denso and NRI created a joint venture called NDIAS to offer cyber security products for cars. (Denso)
Harman launched an OBD II plug in dongle called Spark for US customers. (Autocar)
TomTom said that it might sell its telematics operations to concentrate on the core business of mapping as competition with Google (Reuters)
Ford, Lyft and Uber announced a scheme to share road traffic data with local governments. (Auto Rental News)

Other

Rotary engine developer Freedom Motors started a crowdfunding campaign. (Freedom Motors)
In-car retailing platform Cargo raised $22 million. (FINSMES)

Find our archive here.

Auto Industry Briefing — week ending 23rd September 2018

September 25, 2018 Ad Punctum TeamAd Punctum, Automotive0

Sensible planning for a hard Brexit; difficult to understand cryptocurrencies; and the promise of decent in-car infotainment. Please enjoy our auto industry and mobility briefing for 17^th September to 23^rd September. A PDF version can be found here.

Favourite stories of the past week…?

Holiday — BMW have decided to re-schedule the annual shutdown for the Mini plant so it takes place immediately after the official Brexit date. Looks like a smart, low cost, way to sit out any no-deal related chaos for a few weeks and create some thinking space without the pressure keeping the plant running. How many others will now announce similar plans?
Ka-Ching! — Elio Motors held a pre-sale of “tokens” to fund development of a new vehicle whilst CyClean is creating a crypocurrency that will pay you to use its products (provided you chip in some hard currency first). It isn’t very clear why either company is well suited to an initial coin offering or what the benefit to consumers is. Is this a sign of desperation or is there a benefit they need to do a better job of explaining?
Obviously — The Renault-Nissan-Mitsubishi alliance will use Google Android as the basis for a new generation of in-car infotainment. After more than ten years of seeing smartphones make car dashboards look slow and stupid, why are OEMs still going it alone? Before anyone bleats something about brand DNA being at risk, please explain: a) how Samsung manages to use Android and maintain pricing power; b) what the brand value is in having awful in-car controls that are unique to you?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

News about the major automakers

Announced the UK Mini plant’s annual shutdown will take place on 1^st April (just after Brexit is supposed to take force) rather than during summer so that the plant will be closed in the event of any implementation chaos. (Reuters)
The EU launched a formal investigation into whether BMW, Daimler and VW colluded to restrict competition in emissions technology. (Economic Times of India)
BMW’s development chief said the brand’s cars will always have steering wheels and the change to autonomy will take three decades, starting from 2005, meaning a 20 year wait “until this applies to all parts of the world”. (Autocar)
Radar developer Lunewave raised $5 million from investors including BMW iVentures. (Lunewave)
Published the technical specifications for the new Z4, having earlier unveiled the new car’s design. (BMW)

Co-led a $155 million funding round in electric bus maker Proterra. BMW and GM are existing investors. (ProTerra)
The EU launched a formal investigation into whether BMW, Daimler and VW colluded to restrict competition in emissions technology. (Economic Times of India)
Daimler will retain its Aston Martin stake after the brand’s IPO for at least 12 months. (Aston Martin)

Calsonic (owned by KKR) has reportedly made a €5.8 billion bid for Magneti Marelli and has already lined up financing. Previous reports said FCA wanted €6 billion for the unit and KKR had only offered €5 billion. (Reuters)
Rumoured to be developing a new inline 6 cylinder gasoline engine based on the existing 4 cylinder GME engine. The new product is said to be earmarked for US plants. (Allpar)
The Jeep Wrangler is such a runaway sales success that FCA might add a third shift to the Toledo plant. (The Blade)

Ferrari

Held a capital markets day. Ferrari expects hybrids to account for 60% of its sales by 2022 and plans to create a new line of style-led limited edition models under the Icona banner. (Ferrari)
The first two Icona models will be 1 and 2 seat versions of a roadster named Monza. Final build numbers and pricing are yet to be announced, but are expected to be “less than 500” and more than “£1 million” respectively. (Car)

A French government minister expressed confidence that Punch Powerglide would be announced as the buyer of Ford’s Bordeaux transmissions plant by the end of October. (Reuters)
- Implication: Last time Ford sold the same plant in a government-brokered deal, it ended up taking it back a short time later, having forfeited a substantive dowry. Will it have secured the right to walk away this time?
Ordered by a court in Thailand to pay compensation to owners of vehicles with dud transmissions. (Detroit News)
Paid $90 million for the train station building in Detroit. (Detroit Free Press)
Building all-electric versions of the Transit van (in collaboration with StreetScooter) at its Cologne, Germany site rather than in the Turkish factory that builds ICE powered units. A partially assembled vehicle is shipped from Turkey and then the electric powertrain, cab and cargo structure are added in Germany. (FAZ)
- Implication: Whilst rumours surround the company’s footprint reduction plans in Europe, this decision appears to be based more on its ability to utilise German labour than profit-making potential.

Polestar is hoping to have 75 dealers globally soon after launch, with 10 in the USA. (Fortune)

Simplified its electric vehicles organisation and created a new head of innovation role. (Detroit News)

Continued to lobby against a no deal Brexit saying it would mean tens of millions in tariffs, loads more paperwork and that border controls could play havoc with the 350 daily truck deliveries that keep its Swindon plant stocked with components. The company even made a short day in the life of a trucker video to show it was serious. (BBC)

Hyundai invested in holographic display maker WayRay as part of an $80 million funding round. (WayRay)
Hyundai Mobis executives said the company’s L2 ADAS solutions are four years behind those used by German OEMs and that it will take until 2025 to develop full autonomous driving. (Autocar)

Mazda

Lost 44,000 vehicles and 23,000 CKD units in the plant shutdowns caused by flooding earlier in the year. (Mazda)
Continuing to invest in diesel engine technology, saying it is often the “most sustainable” option. (Autocar)

The R-N-M alliance announced a collaboration with Google to use the latter’s Android system for in-car infotainment, with Google Maps providing directions from 2020. (Renault)
Nissan will recall about 240,000 vehicles to fix problems with the brakes that could cause fires. (Detroit News)
Undertaking a minor restructuring in Europe, eliminating around 200 posts. (Chronicle Live)

Called for the French government to resurrect a scheme that gave grants to buyers of plug-in vehicles, and also make it more generous (paying out €2,000 per vehicle instead of the €1,000 payout before the scheme ended). PSA said Renault wanted the same thing but Renault spokespeople declined to comment. (Economic Times of India)
German politicians called on PSA to provide a right of return for Opel employees involved in the proposed Russelsheim technical centre sale to Segula. (FAZ)
In addition to the previously-reported line rate drops at Opel plants, PSA is planning extensive down days with the Eisenach plant reportedly only working eight days during September. (FAZ)
Considering whether to install new manufacturing equipment in Ellesmere Port that could make either CMP or EMP2 based vehicles. (The Times)
The Opel / Vauxhall Grandland X has already reached 100,000 sales and the Eisenach plant will produce it from 2019 onwards. (Opel)

The R-N-M alliance announced a collaboration with Google to use the latter’s Android system for in-car infotainment, with Google Maps providing directions from 2020. (Renault)
Showed EZ-PRO, a concept autonomous vehicle system with “highly modular robo pods” that allow the vehicle to be configured between various jobs such as passenger and goods delivery. Renault is the third major OEM this year to put forward such a solution for high utilisation of urban fleet vehicles. (Renault)
Launched a new round of discounts in the UK, offering £5,000 off some models. (co.uk)

Signed a three year agreement with lithium miner Ganfeng Lithium. (Economic Times of India)

Will invest in a 30 billion yen fund run by Sparx group that will concentrate on sources of renewable energy. (Toyota)

Said it is on track to achieve “capital market readiness” at its truck division (recently named TRATON) by the end of 2018 and investment banking experts will soon be retained for a “potential” IPO. (VW)
Unveiled the production version of the e-tron SUV. Some commentators were disappointed by the car’s performance figures compared to Tesla’s Model X, given the starting price of €80,000. (Audi)
Pulling out of Iran, according to a US government official. (Bloomberg)
Audi launched a pilot subscription service priced at $1,395 per month. Subscribers can change vehicle up to twice per month and choose from a range of A4, A5 cabriolet, Q5 and Q7. In addition, they receive 48 hours of discounted rental (Audi say it is free but taxes and fees are excluded) through Audi’s Silvercar each month. (Audi)
Appears to have slightly altered its outlook on ID pricing to be equal to a “comparable” diesel, implying the vehicle could be more costly than initial expectations if the firm argues the comparator should be high performance. The downside is that a sales target of over 100,000 units is high in the context of high performance diesels. (VW)
Audi’s imprisoned CEO will reportedly be removed from his post at a meeting on September 28^th. (Handelsblatt)
Porsche invested in holographic display maker WayRay as part of an $80 million funding round. (WayRay)
The EU launched a formal investigation into whether BMW, Daimler and VW colluded to restrict competition in emissions technology. (Economic Times of India)
Porsche released details of the modular units that make up its fast charging solution, and will presumably be used by the Ionity charging network. (Porsche)
Seat executives said the brand would have two electric only models by 2021 and two PHEVs by 2020. (Autocar)
Created a training program to develop software competences in-house and will run its first class in 2019. (VW)
SEAT launched the Tarraco large SUV, with sales set for early 2019. (VW)
Showed the ID Buzz van. Although billed as a concept, sources say it could be in production by 2021. (VW)
TRATON signed a cooperation agreement with Hino that will create a shared procurement arm and see the two partners jointly develop electrified powertrain. (VW)
Porsche said it had given up on diesel engines for good. Although there are no cars currently on sale with diesel engines, Porsche had implied it would offer some in future. Now it won’t. (Porsche)

Other

Aston Martin set the price range for its IPO, valuing the firm at between £4.02 billion – £5.07 billion. (Aston Martin)
Aston Martin will sell a limited edition of 19 pairs of cars in collaboration with Zagato. There will be a DB4 Zagato continuation model that will be track-only and a DBS Zagato that they can actually drive on the road. The price for the pair is a cool £6 million (excluding taxes). (Aston Martin)
Aston Martin released a teaser image of a hypercar dubbed “Project 003” that will be released in late 2021 and limited to 500 examples. The company confirmed that there will be space for luggage. (Aston Martin)
Lucid Motors announced it had received over $1 billion in investment from PIF, the same Saudi fund that invested in Tesla (and was the supposed underwriter of the infamous “funding secured” tweet). (Lucid)
Rivian Automotive will unveil its pick-up truck and large SUV in November, saying prices will start at $90,000 but lower specification vehicles with prices of around $50,000 will be available after launch. (Fox News)
Revolution Racecars says it will build a £100,000, 300hp, 675kg track-only two seat sportscar with 300hp. (Autocar)
Elio Motors announced the pre-sale (a pre-ICO?) of the ElioCoin “security token”, hoping to raise $25 million in the scheme. So far it appears to have a single taker. (Elio)
VinFast told local media that its products should be compared with Mercedes and its cars would be priced around 1 billion VND (approximately $43,000). (Vietnam Net)

News about other companies and trends

Economic / Political News

European passenger car registrations in August were 1,171,760 units, up 29.8% on a year earlier. (ACEA)
The German government was rumoured to be leaning towards ordering hardware retrofits for Euro 5 capable diesel vehicles to reduce pollution. (Reuters)
The US announced a new round of tariffs on Chinese products, increasing the likelihood of retaliation. (Reuters)
A German think tank said sales of vehicles with internal combustion engines needed to end before 2030 if the automotive industry was going to contribute enough to reductions in CO₂ This is a different standard to the EU’s proposals for 2030 fleet average CO₂ which would still enable conventionally powered vehicles to be on sale. (The Guardian)
The German government are prepared to offer subsidies of one million euros to get two battery factories built in the country. (Manager Magazin)

Suppliers

BorgWarner held an investor day. (BorgWarner)
ZF will invest €12 billion in electrification and mobility projects over the next five years. (ZF)
Magna is selling its fluid pressure and controls business to Hanon Systems for $1.2 billion. (Hanon Systems)
Holographic display maker WayRay raised $80 million from investors including Porsche and Hyundai. (WayRay)
Wabco will form a joint venture with FAW in China to market brake systems for commercial vehicles. (Autocar)
Varroc and Elba agreed on a lighting components joint venture to be based in Romania. (Autocar)
Valeo and Wabco are partnering to sell their safety technologies for commercial vehicles. (Valeo)

Uber is reportedly in detailed discussion to acquire Careem. (Reuters) It is also said to be in early talks about buying food delivery service Deliveroo. (The Guardian)
Lyft said it had reached the 1 billion trips milestone. (Lyft)
Lyft has partnered with Trafi to add a multi-modal dimension to its app (in some cities). (Trafi)
Didi Chuxing has started to record in-car audio during trips. Passengers must agree as a condition of being allowed to book journeys on the network. (Business Insider)
Ola raised a further $50 million in a deal valuing the company at over $4 billion. (TechCrunch)

Knorr-Bremse and Continental intend to jointly develop a turnkey solution for heavy trucks that will allow them to operate in autonomous platoons. (Knorr-Bremse)
BMW’s development chief said the brand’s cars will always have steering wheels and the change to autonomy will take three decades, starting from 2005, meaning a 20 year wait “until this applies to all parts of the world”. (Autocar)
Radar developer Lunewave raised $5 million from investors including BMW iVentures. (Lunewave)
Leddartech released a white paper discussing the application of lidar for vehicle identification. It contains more data on resolution than is normally disclosed. Even with lidar mounted only a few metres from the vehicle, Leddartech report a resolution of 14cm – 24cm on a target moving at 100 km/h for a 16 line unit, underlining why in practice self-driving vehicle developers are rarely using the units for object identification. (Leddartech)
Bosch invested in lidar developer ABAX Sensing. (Bosch)
The Knight Foundation is spending $5.25 million on a series of experiments in American cities aimed at better understanding the interaction between autonomous vehicles and communities. (Venturebeat)
Self-driving software developer Oxbotica raised £14 million. (FINSMES)
Robosense said its 64 line lidar system will cost under $200 per unit once in mass production. (Robosense)

LG Chem signed a supply agreement with lithium miner Ganfeng Lithium running from 2019-2025. (Economic Times of India)
Start-up CyClean aims to combines zero emissions and cryptocurrency by making electric products, such as electric scooters and solar panels that reward users with the company’s proprietary cryptocurrency for using its products (seemingly paid for in old-fashioned hard currency). (CyClean)
Amazon is going to start offering third party chargers with full installation. (Electrek)
Truckmaker Kamaz and Cummins will develop electric powertrains for heavy vehicles. (Autocar)
VW’s TRATON truckmaking unit signed a cooperation agreement with Hino that will create a shared procurement arm and see the two partners jointly develop electrified powertrain. (VW)
Total acquired French electric vehicle charging provider G2mobility. (Total)

Connectivity

VW’s Traton truck division and Solera announced a strategic partnership to sell fleet management tools. (VW)
The Renault–Nissan–Mitsubishi alliance announced a collaboration with Google to use the latter’s Android system for in-car infotainment, with Google Maps providing directions from 2020. (Renault)
TomTom said it was under pressure as deals like the Google and R-N-M one eat into its mapping revenue. (Reuters)

Other

Electric scooter rental firm Lime has suffered two fatalities in the last few weeks. (TechCrunch)
Amazon reportedly plans to open 3,000 cashless stores by 2021. (Bloomberg)
Trucking firm Convoy raised a further $185 million. (TechCrunch)
Lime said it had reached 11.5 bike and scooter rentals. (TechCrunch) Bird just reached 10 million. (TechCrunch)

Find our archive here.

Auto Industry Briefing — week ending 16th September 2018

September 17, 2018 Ad Punctum TeamAd Punctum, Automotive0

Identikit German electric SUVs; electric vehicle development costing more than expected; and difficult market conditions. Please enjoy our auto industry and mobility briefing for 10^th September to 16^th September. A PDF version can be found here.

Favourite stories of the past week…?

Hangin’ Tough — VW are cutting Golf production, JLR are going to a three day week in Castle Bromwich, BMW say competition is challenging. Is this just a case of bad news coming in threes or are we going to see OEMs becoming increasingly desperate in the market?
For The Love Of Money — VW CEO Herbert Diess said the company is spending more on electric vehicles than planned. Just after Daimler’s CEO said the same thing, not to mention the billions Tesla have spent on developing three cars. It all points to difficulties for the various Chinese companies that have promised to deliver portfolios for $1.5 billion.
The Next Episode — The BMW iNext has put on a few pounds and emerged as an SUV rather than the sleek saloon it was before. After years of cries for more electric vehicles, it seems like there will be loads of them, provided you want a large SUV. Tesla Model S and Model 3 look to have their respective segments to themselves for a while yet. Why have all the Germans decided to build the same car?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

News about the major automakers

Unveiled the iNext, which has morphed from a coupe-like saloon to an SUV. BMW appears to be still undecided on how the car interior should change when the vehicle is in autonomous mode with the steering wheel of the concept retracting “slightly” (in the original demonstrator, the wheel folded away entirely). (BMW)
- Implication: After receiving, and appeared to accept, criticism that the styling of the i3 was too strange and held back sales, BMW seems to have forgotten the lesson entirely with the iNext. It remains to be seen whether the world is ready now in a way it wasn’t a few years ago.
Withdrew all diesel variants from sale in the US, although some cars remain in dealer stock. (Yahoo)
Demonstrated an autonomous motorbike, but unlike competitor projects, BMW does not seem to have tackled the problem of stabilisation, so the vehicle is just as likely to tip over as any other. In BMW’s own words, “at first sight, the autonomous motorbike seems to no real sense”. They say the technology could in future become an active safety system. (BMW)
Working with insurer Swiss Re to use vehicle data to derive a tailored insurance policy for individual owners. (BMW)
Said there were “headwinds” and that several major markets were “highly competitive”, calling out the USA and European markets. (BMW)
BMW’s development chief said OEMs without a cost advantage in electric vehicles will not survive. (Reuters)

Unveiled a new configurable van concept (Vision Urbanetic). It features a running platform with different modules that can be quickly swapped on and off to change roles, for instance between cargo and people movement. (Daimler)
- Implication: Ad Punctum sees reconfigurable platforms as a key enabler to increased vehicle utilisation that can help reduce travel costs per mile. Daimler’s demonstration of such as concept, following from recent efforts by GM, Rinspeed and others, shows the promise of this type of execution.
Concluded the purchase of a 20% stake in VW’s used car sales platform HeyCar. (VW)
Suspended production in South Carolina, USA, because of Hurricane Florence. (Bloomberg)

Hedge fund Tiger Global now owns almost 4% of the company. (Reuters)
KKR offered €5 billion for Magneti Marelli, below the €6 billion FCA wanted, so the search for a buyer continues. The investment bankers who leaked the story implied KKR are welcome to up their offer. (Bloomberg)

Suffered a power failure at the Rouge factory. Ford said the lost F-150s would be caught up. (Detroit News)
Argo AI has licensed its lidar technology to Ball Corporation for use in aerospace and defence projects. (Zacks)
Announced a recall for a small number of vehicles in North America to repair door structures. (Ford)
Ford’s VP in charge of its internet of things platform, spoke at a conference about how rich he was, Ford’s approach to software platform leadership and how it integrates traditional bureaucracy with agile start-up thinking. (Ford)

Geely’s London Electric Vehicle Co subsidiary will put its new taxi-derived van into testing with fleets next year and expects to build 10,000 units at its new factory in 2020, rising to 22,000 per year by 2022. (Autocar)
Finalised its majority stake in Saxo Bank, appointing a new chairman and several board members. (Geely)
Issued a statement saying it had no intention of increasing the 9.69% Daimler stake. (Geely)
Volvo suspended production at its US car factory due to Hurricane Florence. (Bloomberg)
Asked for an exemption for the China-built Volvo XC60 from new US tariffs, dangling the possibility of future US production if sales could continue unabated whilst it ramps up the new South Caroline plant. (Reuters)
Appointed a new CEO for Lotus. (Lotus)

Recalling over 240,000 vehicles to fix brake problems (Detroit Free Press) and 1 million more to sort out steering malfunctions. (USA Today)
CEO Barra said “there’s going to be a point where we’re going to be upgrading and improving cars instead of fixing them”. She also confirmed that GM believes it is on track to launch geofenced operation of driverless vehicles next year but demurred on specifying a timeframe for autonomous features to be available for retail customers to purchase. (Fast Company)

Appointed the son of group chairman Chung Mong-Koo as chief vice chairman of Hyundai Motors. (Reuters)
Invested in solid state battery developer (and BMW partner) Solid Power. (Solid Power)
Announced an estate version of the ProCeed. (KIA)
Considering whether to invest in a new generation of diesel engines to meet Euro 7 regulations. (Autocar)

Took a stake in the e.DAMS racing team that will run Nissan’s Formula E entry. (Nissan)
Unions are unhappy with a voluntary redundancy scheme the alliance has offered at its Tamil Nadu, India, plant saying the company should have consulted with them first. (Business Standard)
Believes that car sales in the US may make a partial recovery as interest rate increases and higher gasoline prices may SUVs less affordable. (Bloomberg)

The union leader handling PSA’s proposed sale of Rüsselsheim development activities to Segula said he is cautiously considering the transaction but was not vehemently opposed providing jobs are preserved. (FAZ)
At the unveiling of the new DS3 Crossback executives reiterated the brand’s plans to stop offering diesel and gasoline vehicles by 2025, with only plug in hybrids or full BEVs on sale. (DS)
Gave an update on its aftermarket strategy, including the absorption of Opel and Vauxhall activities. (PSA)

Revealed the facelift for the Kadjar crossover. (Renault)
Unions are unhappy with a voluntary redundancy scheme the alliance has offered at its Tamil Nadu, India, plant saying the company should have consulted with them first. (Business Standard)

Suzuki

Has increased Baleno production in India by 34% over the last eight months, and as a result of lower waiting times sales have risen to 18,000 units each month. (Times of India)
Toyota may add production of Suzuki cars at its plant in Bengaluru, India to utilise surplus capacity. (LiveMint)

JLR’s CEO used a speech at a conference on zero emission vehicles attended by the British prime minister to berate the UK government for its approach to Brexit planning and wondering out loud whether factories would continue to function in the event of a hard Brexit. (Reuters)
Moved to a three-day week at the Castle Bromwich, UK Jaguar plant, due to unspecified headwinds. Sales of models built at the factory have fallen to about 52,500 in the first eight months of 2018 from about 69,000 in the same period last year. (Bloomberg)
Launched a network of charging stations in South Africa to encourage I-Pace buyers. (IOL)

Culling two colours to make manufacturing simpler, but since the colours involved were (highly popular) black and silver and the ability to order “but at a higher price” remains, the move looks more like a way to raise revenue than streamline operations. (Economic Times of India)
Has gone from “production hell to delivery logistics hell” per CEO Musk. Since worldwide distribution of half a million or so vehicles from a single plant is not unknown in the automotive industry, it is not clear whether Tesla faces truly unique problems or has simply failed to plan and execute properly. (Reuters)
Tesla said it was selling the final vehicles that would benefit from lifetime supercharger access. (Electrek)
A small fire stopped work at Tesla’s Nevada Gigafactory for a few hours. (Reuters)
Elon Musk said Tesla was aiming to bring repairs in-house with a target repair time of less than a day. (Reuters)
- Implication: Whilst this appears to fit in with Tesla’s normal mode of vertical integration, this move raises the question of how exactly Tesla decides what is core and non-core? At a time when the firm is still struggling with many operational issues related to designing and building cars, it may be that time spent on body shops could be better used elsewhere.

Working to add production of Suzuki cars at its plant in Bengaluru, India to utilise surplus capacity. (LiveMint)

CEO Diess and the head of the works council gave a joint interview to the in-house magazine. They agreed that complexity must be reduced by having fewer buildable combinations and that more needs to be done to improve VW Groups’s competence in software development, which they attributed to excessive outsourcing (up to 80% of the workload) previously. Diess said a margin of 7% – 8% was required to make the business “crisis proof” and that the cost of introducing electric vehicles will be higher than expected. (VW)
- Implication: Diess becomes the second CEO in a week to admit their company is struggling to contain development costs for electric vehicles (after Daimler CEO Zetsche)
Hopes to sell 10 million units over the lifetime of the MEB platform. (VW)
Rumoured to be exploring alliances with other companies, including fellow OEMs, with the aim of creating a consistent set of technical standards for self-driving vehicles. A VW Group management board review could take place in the coming weeks. (Automotive News)
Added down days in the Wolfsburg factory’s Golf production schedule, apparently because of falling sales rather than WLTP problems. Tiguan production may be replaced as a partial offset. (Handelsblatt)
Sold a 20% stake in VW’s used car sales platform HeyCar to Daimler. (VW)
VW’s trucking division believes autonomous vehicles will catch on more quickly in the US and China because they think the regulators are more open to change. (Handelsblatt)
Porsche launched two short term rental programs on a pilot basis in the US. Porsche Drive is a daily rental offering that competes with similar services from existing major daily rental firms. At a cost of $2,909 for a week’s 911 rental, the pro-rata cost is significantly higher than the monthly “Passport” offering. Porsche Host is a peer-to-peer offering that appears to be a sub-branding of vehicles already available via the Turo app. (Porsche)
Ceasing production of the Beetle in 2019. (Reuters)
Audi owners in Europe will be able to use a single payment service, dubbed e-tron charging service, to access charging points from 220 providers across Europe. (Audi)
Škoda’s unions issued a statement saying it had rejected moves to produce the Superb in Germany. (Times of India)
VW Group has signed new terms with dealers and importers in almost all European markets. (VW)

Other

NIO’s stock market listing had a shaky start with prices falling from the IPO level then recovering. At one point the company was worth around $12 billion. (Reuters)
Aston Martin revealed more technical details about the limited edition Rapide E. Whilst Aston Martin said the performance could be sustained in a way similar to an internal combustion engine car (Aston Martin), the development engineers said that meant it can sustain its top speed of 155 mph for ten minutes. (Autocar)
Gordon Murray Design announced a new version of its iStream flexible platform technology with claimed weight savings of 50% over other types of car body (note: not versus the entire vehicle weight). The company will offer a conventionally powered rolling chassis named T.43 that can be turned into a sports car under licence. (GMD)

News about other companies and trends

Economic / Political News

To the dismay of OEMs, a European Parliament drafting committee backed even harsher proposals for fleet average CO₂ emissions in 2025 and 2030 than had been recommended to them. Against the proposed drop of 15% between 2021 and 2025 and 30% between 2021 and 2030, they called for a 20% reduction by 2025 and a 45% reduction by 2030. National governments still get to weigh in before the rules are finalised. (Reuters)
- Implication: The OEMs may come to regret their energetic yet unconvincing pushback against the original 15% and 30% targets if the draft proposals pass. For some time, lawmakers and manufacturers have been at odds about whether the proposals should increase vehicle costs (lawmakers = yes, OEMs = no). The draft targets look unreachable without application of 48V technology on all internal combustion engines and a heavy mix of PHEVs and BEVs. Currently, the number of fully electric models OEMs plan to have on the market by 2030 could be insufficient to reach that share.
The Chinese government is reportedly taking a dim view of companies that have applied for new energy vehicle permits but then failed to build vehicles and will make it more difficult for them to extend the licence that had previously been the case. (China Daily)

Suppliers

Adient named a new CEO and the interim CEO was made non-executive chairman. (Adient)
Renesas announced the acquisition of chipmaker IDT. (ZDNet)
Gestamp opened a new stampings plant near Wolverhampton, UK at a cost of £50 million. (Gestamp)

Dealers

Online sales start-up Shift announced $140 million in new funding in a round led by Lithia, a large US auto retailer. BMW iVentures (an existing investor) also participated in the round. (Shift)

Go-Jek is looking to raise a further $2 billion to fund expansion and competition with Grab. (Deal Street Asia)
Uber will invest $150 million over five years in Toronto, Canada, increasing the headcount from 200 to 500 and opening a new office. (TechCrunch)
A memo from Didi’s CEO said the company lost 4 billion RMB ($582 million) in the first six months. (Reuters)

Autonomous vehicle developer PerceptIn began sales of its DragonFly autonomous pod, with a $40,000 asking price. The pod is speed limited to 20 mph. (PerceptIn)
Aptiv sees autonomous vehicle fleet sizes of 1,000 cars or more becoming common in the early 2020s and that costs for retail customers will remain too high until at least 2023. The company says Europe is “a bit behind” in the development of autonomous vehicles. (Handelsblatt)
Blackmore released a demonstration video showing how its doppler lidar product can categorise products by relative velocity without post-processing. (Extreme Tech)
Argo AI has licensed its lidar technology to Ball Corporation for use in aerospace and defence projects. (Zacks)
NRG Systems acquired the low cost lidar technology of Israeli firm Pentalum. (Engineer Live)
VW’s trucking division believes autonomous vehicles will catch on more quickly in the US and China because they think the regulators are more open to change. (Handelsblatt)
A UK government-funded research project into autonomous vehicles published its final findings, including data on willingness to pay based on a survey of several hundred people. (Venturer)
ai announced a new CEO, saying founder George Hotz was now head of research. (Comma.ai)
Hyundai Mobis signed a contract with Tata Elxsi to develop a simulation program for autonomous driving by 2019. The partners may find the project harder than they anticipate, especially since photo realistic graphics may be completely unrepresentative of the way AI camera imagery. (Yonhap)
Volvo Trucks presented a concept for an electric and autonomous truck. (Volvo)
- Implication: Judging by the concept’s design, Volvo are in the early stages of autonomous testing since the vehicle features no equivalent structure to the cab — striking in terms of making a design point about new possibilities, but it seems wasteful to not even retain an aerodynamic fairing containing sensors and benefiting from the relatively high vantage point compared to other traffic, especially as a heavier truck would require longer stopping distances and therefore earlier warning is a key advantage.
GM ‘s CEO confirmed the firm is on track to launch geofenced operation of driverless vehicles next year but demurred on giving a timeframe for autonomous features to be available for retail customers. (Fast Company)

Unipart and Williams formed a joint venture called Hyperbat to produce batteries on a vacant Unipart site. The launch customer for the facility will be the Aston Martin Rapide E. The 90 jobs announced in the press release suggest the factory will not have a significant capacity. (Unipart)
ChargePoint intends to have 2.5 million chargers in operation by 2025, up from 45,000 today. (Green Car Reports)
Yamaha is trialling an electric battery swap scheme for scooters in Taiwan, in a pilot that looks very similar to the recently announced partnership between Panasonic and Honda. (Autocar)
Battery developer (and BMW partner) Solid Power raised $20 million, Hyundai was an investor. (Solid Power)
Chinese battery developer Farasis has raised over $1 billion and will build a European factory. (Inside EVs)

Other

HP launched a new metal additive printer called Metal Jet and said VW are a customer for parts made using the machines by suppliers such as GKN. (HP)
Mobike is reportedly undergoing a scrappage program to replace 40,000 bikes in Shenzhen. (Technode)
Brazilian bike sharing start-up Yellow raised $63 million. (TechCrunch)

Find our archive here.

Auto Industry Briefing — week ending 9th September 2018

September 11, 2018 Ad Punctum TeamAd Punctum, Automotive0

Worrying launch sales for Jaguar I-Pace; a different approach to checking autonomous cars are safe; and great electric cars. Please enjoy our auto industry and mobility briefing for 3^rd September to 9^th September. A PDF version can be found here.

Favourite stories of the past week…?

Don’t Give Up — Is everything going okay with the Jaguar I-Pace launch? Five months in and only 140 were sold in August. Just for comparison, F-Pace and E-Pace sold over 5,000 units at the same point in their ramp-up, so it doesn’t seem like JLR have a problem getting the word out about new products. What is going on?
My Favourite Mistake — The self-driving gurus at Aurora have a new perspective on gaining regulatory approval. Rather than driving hundreds of millions of miles, they want to focus on the accuracy of object identification. They believe that once the AI is good enough, the only reason it would make a bad decision is because it didn’t properly identify the pedestrian, or the no left turn signal. They hope to persuade regulators that a mainly safe driving style multiplied by recognition confidence equals probability of an accident. It’s worth a go, but don’t be surprised if it comes back as too theoretical for the liking of most rulemakers.
Off To The Races — The Mercedes EQC was unveiled in production form. Assuming things don’t go awry on pricing, the EQC, Jaguar I-Pace and Audi e-tron are serious entrants into the EV market, alongside Tesla’s efforts. Will the old guard eat Tesla’s dinner, or will they collectively chow down on internal combustion engine sales?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

News about the major automakers

Investing €100 million to build a driving simulation centre that will commence operations in 2020. BMW touts the planned 14 simulators and labs as a significant benefit in developing autonomous vehicles. (BMW)
Will launch a proprietary voice controlled digital assistant in vehicles, starting next year. BMW says the system will be able to interact with third party services such as Alexa (BMW has already created an Alexa skill) and Siri. The BMW system will let users choose their own name — BMW suggests Charlie or Joy as options to be considered. All cars with BMW OS 7.0 and greater will be capable of using the system. (BMW)
- Implication: BMW’s overview of functionality appears to mirror the Mercedes system currently on the market.

Launched production of the Sprinter in a new facility that will employ 1,300 workers once capacity has fully ramped up by 2020. The new facility is said to have cost $500 million. Amazon was announced as a customer for 20,000 vans for use by its delivery agents. For context, annual volume of the van in the US has been about 26,000 units. (Daimler)
Unveiled the production version of the EQC all-electric SUV ahead of sales starting in 2019. (Daimler)
CEO Zetsche said battery electric vehicle sales in 2025 were now considered more likely to be at the lower end of the company’s 15% to 25% of total expectation, based on new bottom-up analysis. (Automotive News)
CEO Zetsche said the company was spending more than the intended €10 billion on electric vehicles but declined to quantify the overrun. (Bloomberg)
Said it has received 2,000 pre-orders for the EQC in Norway. (Reuters)

Investing $30 million in autonomous testing facilities at its Michigan proving grounds. (FCA)
New CEO Manley will announce a reorganization of the executive team by the end of the month. (Reuters)
Workers at FCA’s Serbian plant, which builds the 500L, are concerned about overcapacity. The reported line rate is 410 vehicles per day and unions expect the factory to only work around 150 days this year (the normal level is around 230). The plant has a capacity for around 300,000 cars but will produce only 60,000 in 2018. (B92)

Yet another Jim Hackett profile said the company cancelled its planned electric vehicle just weeks before the 2018 Detroit show and the Mach 1 (the product replacing it in the cycle plan) preview was light on detail because the company had only just begun working on it. CEO Hackett said the company was “four or five months” behind on the rate of progress he expected to make when taking the job. On the possibility of closing down operations in various countries he says “Hackett’s bias is that the Ford brand is iconic” and that “one of my last options is to shut down the Blue Oval in a market. I’d rather never do that”. (Forbes)
Off the record sources have said that Ford is focused on reducing staff in South America and Europe, with the North America region expected to be shielded from any significant restructuring. The plans may reportedly be announced by the end of the year as work with external consulting groups is said to have been under way for several weeks. The concept of selling the operations in any region are reportedly off the table as the company does not want to hand control of the blue oval to anyone else. (Detroit News)
Working on a next generation infotainment system that will feature a larger screen and appear in the new Mach 1 electric vehicle. Ford claims the system was developed in 90 days. (Forbes)
- Implication: Whilst Ford’s recognition of the shortcomings of its existing system are welcome, waiting to introduce it for several years until a new vehicle turns up shows the development process is still far from agile.
Donald Trump tweeted that his new tariffs on Chinese imports meant Ford could make the Focus Active in the USA after all, but Ford said that wasn’t going to happen. (Economic Times of India)
Issued a recall of 2 million F-Series pick-ups to correct problems with seat belt mechanisms that could create sparks inside the body, ultimately leading to fires. (Ford)
Released an image of the Mach 1 electric car, showing a Mustang influenced rear. (Ford)
Stopped all US national advertising campaigns for Fusion, Focus and Taurus, redirecting the money towards SUVs instead. Ford said it preferred discounting the cars to advertising them. (Automotive News)
- Implication: Ford is reversing a recent formula that said well-positioned marketing was preferable to discounting.

Volvo’s CEO said the company was delaying its IPO because market conditions are too volatile. (Reuters)
In cooperation talks with Geely about sharing hybrid electric technology. (Euro News)
Volvo’s CEO had his contract extended to 2022. (Volvo)
Volvo unveiled the 360c autonomous concept car. Volvo says the 360c, with its lounge-like cabin, could become a viable alternative to short haul air travel. Onlookers who remember the Mercedes-Benz F015 might have a sense of déjà vu. (Volvo)
Proton announced that its new SUV will be called the X70. (Proton)

Investing $28 million in its Michigan battery development lab. (Detroit News)
Issued $2.1 billion in unsecured debt, partly to fund pension obligations in the UK and Canada. (GM)
Trademarked “Drivescription” in the US, potentially for use in a future subscription service. (GM Authority)

Activist investor Elliott Management wrote an open letter to the company saying it was unhappy with the pace of progress and that Hyundai had fallen silent on the restructuring it previously asked for. (Reuters)
Invested in multi-modal app Migo. (Hyundai)
Local managers said Hyundai will soon build two new models in Turkey, both based on the i20, with a saloon and SUV set to be released. (Daily Sabah)

Looking to expand in the Indian market with twice as many sales and service points (270 today) by 2021. The product strategy will be reshaped with Nissan concentrating on the higher end of the market and more vehicles from the Datsun brand to cater to budget conscious customers. The company will also hire 1,500 people at Indian technical centres. (Nissan)
Increased the range of remanufactured parts available in a bid to retain customers once the warranty period expires by offering lower prices; Nissan says about by 30%. In addition, it is expanding the offering of lower cost consumables. Less clear is how Nissan plans to market the parts to retail consumers and incentivise dealers to offer them. (Nissan)
Nissan’s design chief seemingly confirmed the company is working on a new Z (sports) car. (Which Car)

Developing a voice-based digital assistant in collaboration with SoundHound for launch in 2020. (PSA)
Following earlier rumours that it was looking to spin-off part of Opel’s Rüsselsheim development centre, PSA confirmed it is in talks with French engineering services provider Segula to take over testing facilities for vehicles and powertrain and 2,000 engineers based at the site. Part of the pitch to employees is that Segula aims to deliver non-automotive projects that will make up for the drop in work from GM. (Opel)

Will stop selling rebadged Dacia models as Renaults in emerging markets, preferring to concentrate on the more recent strategy of building Western European looking vehicles on its value (i.e. Dacia) platform. (Automotive News)
Said about 55% of Dacia buyers remain loyal to the brand on renewal and about 10% of sales came from Renault customers. (Automotive News)

Suzuki

Planning four battery electric vehicles for launch in India by 2021 (some of which may run 72V rather than a higher voltage system) and a range of 12V to 72V hybrids in partnership with Suzuki. (Economic Times of India)
Confirmed the transfer of all equity in its Chinese JV to the local partner (Changan) and that Suzuki badged vehicles will continue to be made under licence. (Suzuki)

JLR released a retro-look stereo with smartphone integration and a small touch screen that can fit a single DIN slot of the type used by older vehicles. The unit costs £1,200, plus fitting. (JLR)
Recalled Tata Tigors to rectify emission issues. (Tata)

Tesla’s chief accounting officer resigned after only a month on the job. A bland statement released by Tesla said he still believed in the company and there were no problems with the accounts. Reporters said he felt disrespected by Musk and that people weren’t properly listening to his advice. (CNBC)
Created a new position of automotive president, appointing a current executive. In the announcement, which also covered several other executive moves, CEO Musk said Tesla was expecting to build and deliver more than twice as many cars as in Q2 2018. (Tesla)
Elon Musk gave an extended interview in a 2 hour 40 minute podcast where he talked about his various business ventures and outlook on life. Commentators were more interested in a 20 second segment (from 2:10:25) where he took a drag on a marijuana joint. (YouTube)
- Implication: Many conservative commentators were quick to condemn the move with a debate ensuing about whether: Musk’s actions were legal or not (legal under California state law, illegal under US federal law); violated Tesla’s employee conduct policy (Musk says trace amounts of THX are permissible); if Space X will now lose government contracts because Musk smoked drugs (it won’t).

In cooperation talks with Geely about sharing hybrid electric technology. (Euro News)
Stopped production at four vehicle plants and several supplier factories after an earthquake in Hokkaido. Toyota hopes to restart operations by 13^th (Toyota)
Planning four battery electric vehicles for launch in India by 2021 (some of which may run 72V rather than a higher voltage system) and a range of 12V to 72V hybrids in partnership with Toyota. (Economic Times of India)
Recalling one million cars globally to correct wiring harness problems that could lead to thermal events. (Reuters)

VW’s CFO didn’t rule out an IPO for the group’s luxury car brands, calling it a “legitimate question” but one that was not currently a priority. (Bloomberg)
The investor lawsuit seeking €9 billion in damages for diesel scandal-related losses goes to trial next week. (Reuters)
Self-registered a huge number of vehicles in Germany ahead of WLTP rules coming into force. (Reuters)
Porsche and Schuler created a joint venture for a smart press shop specialising in aluminium. (Porsche)
Škoda concluded a new contract with German dealers. (Autohaus)
Launched the Atlas SUV in Middle Eastern markets, badged at the Teramont. (VW)

Other

Chinese carmaker FAW announced the appointment of Rolls-Royce’s former chief designer and the foundation of a new design centre in Germany that he will head. (FAW)
Aston Martin has recruited a non-executive chair, Penny Hughes, as a precursor to its IPO. (Sky)
Aston Martin opened a showroom dedicated to heritage vehicles. (Aston Martin)
VinFast unveiled the production versions of its forthcoming SUV and saloon. (VinFast)
McLaren’s group CFO said the primary reason for taking on a new shareholder earlier in the year was to fund the cash shortfall resulting from the F1 team’s decision to switch from Honda to Renault engines. (Racefans)

News about other companies and trends

Economic / Political News

US light vehicle SAAR for August was 16.6 million, slightly up on the prior year but down month-on-month. (Wards)
UK registrations of new cars in August were 94,094 units, an increase of 23.1% versus August 2017. (SMMT)
German new car registrations reached 316,405 units in August, up 24.7% on a year over year basis. (KBA)
An Indian government minister said the country had a plan to increase electric vehicle sales to 15% of the total industry within five years and that subsidies were not required. (Business Standard)
Two reports considered by the German government in deciding whether to order a retrofit of SCR exhaust systems onto diesel vehicles put the average cost at between €3,000 – €5,000 per vehicle, with estimates for specific models reaching €9,000. (FAZ)
China’s government is proposing new rules for approving capacity requests that would force companies to show they were properly utilizing existing plants and were intending to export vehicles. (Reuters)

Suppliers

Honeywell’s Garrett division, set for a spin-off, held an investor day. (Honeywell)
Continental’s executive board sent a scathing memo to the company’s senior management saying that many business units were missing internal targets and that personnel changes are being considered. (Handelsblatt)
Denso bought a stake in automated production equipment maker Tohoku Pioneer. (Denso)
Mahle completed its takeover of former JV BTTI. (Mahle)
Despite many saying OEMs are turning away from internal combustion engine development, Mahle announced a new type of piston coating to improve heat distribution inside the combustion chamber. (Mahle) Borg Warner also showcased a new type of turbo aimed at gasoline engines. (Borg Warner)
- Implication: New piston rings and turbos probably need a revised combustion set-up to realise their potential, implying that either Tier 1s are developing solutions and trying to find customers or (more likely) they are aware of several major engine redesigns in the works for the early 2020s.

Grab is looking to raise an additional $1 billion to fund further expansion. (Yahoo)
Lyft started a dockless electric scooter pilot scheme in Denver, USA. (Lyft)
Uber’s CEO said the company was on course for its IPO and was not planning to sell its self-driving arm. (Reuters)
Ride hailing firm Taxify launched dockless electric scooters in Paris, saying the firm was ready to ramp up supply to tens of thousands if the demand was there. (Quartz)
Careem said it had one million drivers on the platform, reaching the milestone slightly ahead of schedule. The company adds between 60,000 – 70,000 drivers per month (Careem)

Mando announced that it had an autonomous vehicle testing permit for California. (Mando)
Denso led a funding round in deep learning specialist ThinCI saying the company provided “5 to 10 times” more computing power and performance than competitors. (Denso)
Waymo’s CTO said the firm was at the point of industrialising the three main pillars of its self-driving solution: sensors; high resolution maps and; the software stack. (Forbes)
Metawave are now claiming 500 metre range for their high resolution radar, having previously said it was over 150 metres and that it believes units will sell for $500 once high volume production begins. In discussing specific examples however the company clarified that the radar might identify a truck with 90% confidence at 300 metres, but a motorcycle with only 50% confidence at the same distance. (All About Circuits)
Aurora’s approach to convincing regulators that self-driving cars are ready is to show that the vehicle is capable of navigating and then present the AI’s history of correct object identification and semantic understanding. The company believes that through this data, it will be possible to agree a likely failure rate. (Wired)

BYD announced a carbon tracking and banking scheme in partnership with VeChain. The initiative will collect trip data and parts usage information. (BYD)
VinFast will use LG Chem batteries and they will produce battery packs together in Vietnam. (VinFast)
JLR reportedly have chosen Samsung SDI to provide the batteries for next-generation battery electric vehicles. LG Chem supply the batteries for I-Pace. (Korea Times)
Suzuki and Toyota are reportedly planning battery electric vehicles running on 72V, rather than a higher voltage, for the Indian market. The partners had previously said the system was low cost. (Economic Times of India)
An Indian government minister said the country had a plan to increase electric vehicle sales to 15% of the total industry within five years and that subsidies were not required. (Business Standard)
A group of large UK commercial vehicle fleets have agreed to replace a combined 18,000 diesel vans with electric ones instead. (UN Climate Action Program)
Lion Smart demonstrated the potential energy density benefits of next generation batteries by fitting a 100 kWh battery into a BMW i3 (normal capacity = 33 kWh). (Green Car Reports)

Other

ParkWhiz raised $20 million in new funding. The service it reaches 40 million customers and has been used by seven million of them. (ParkWhiz)#
Vertical Aerospace’s founder said his company will have flying taxis in service within the next four years. (Reuters)
Fleet management platform Avrios raised $14 million. (TechCrunch)

Find our archive here.

Auto Industry Briefing — week ending 2nd September 2018

September 3, 2018 Ad Punctum TeamAd Punctum, Automotive0

Untrustworthy third-party speculation about Tesla; one more thing driverless cars need to prove; and Waymo’s rollout plan. Please enjoy our auto industry and mobility briefing for 27^th August to 2^nd September. A PDF version can be found here.

Favourite stories of the past week…?

Upside Down — Tesla have no chance of meeting their quarterly production target for Model 3, unless Tesla are on course to exceed their Model 3 target. You almost feel sorry for Elon Musk; does it really matter what this quarter’s number is? Isn’t the more interesting conversation around why Model 3 launch was so badly botched and what Tesla will do differently next time?
She Drives Me Crazy — Waymo’s test fleet in Phoenix is getting on the nerves of local drivers, some of whom admit to illegal overtaking manoeuvres to get in front of the cautious machines. It raises an interesting question around regulation and certification. In addition to verifying the cars drive themselves safely, how will we prove that they don’t make other drivers more dangerous? And if they do, but only by a little bit, could there still be a moral argument for widespread introduction?
God’s Plan — Waymo (again — sorry) have reached nine million testing miles, they are currently running at a rate of about one million miles per month (and slightly accelerating). There are agreements in place with FCA and JLR for tens of thousands of cars, plus a long-rumoured tie up with Honda. Unless Waymo will recruit tens of thousands of safety drivers and run a ride hailing service at a loss (as proved by Uber and Lyft), then how are they intending to verify the AI is safe before these vehicles come into the fleet? At the rate they are going, they simply won’t have covered a meaningful real-world distance compared to fatal accident occurrence. Do they have an inside track on a regulatory view saying that’s okay? Is it a massive gamble? Or is it just good PR and the announced contracts mean nothing?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

News about the major automakers

South Korean police raided BMW’s headquarters in the country as part of an investigation into engine fires that have been the subject of a massive recall. (Economic Times of India)
Will unveil the iNext by taking journalists inside a specially equipped cargo aeroplane, showing them the car and then flying off into the sunset. (BMW)
Requested planning permission for an extension at the Swindon pressings site that supports BMW’s UK Mini plant. BMW requested a five year consent before implementation has to take place, rather than the usual three years to provide “flexibility on the potential for investment”. (Insider Media)
- Implication: The planning consent bears all the hallmarks of a Brexit hedge.

Said that Daimler’s various mobility brands (excluding companies where Daimler has a small shareholding) have a combined 24.4 million customers. (Daimler)
StreetScooter revealed that Daimler’s benchmarking team had posed as representatives of a nursing home to get hold of a unit for evaluation. (Der Spiegel)

Moody’s downgraded Ford’s credit rating to Baa3, the lowest investment grade, and gave the company a negative outlook saying that a downgrade to junk status could come in mid-2019 without evidence that the company has a plan to improve its competitive position. (Detroit Free Press)
Will not sell the Focus Active in the US as planned, blaming US tariffs for ruining the business case and saying that since annual volume would be lower than 50,000 units, US production would not be worthwhile. (Bloomberg)
Tongues were set wagging by newspaper articles saying that Ford’s European, and especially UK plants, operations could see drastic job cuts in a bid to improve profitability. (Sunday Times)
- Implication: The articles mainly collated existing information in the public domain: Ford is planning a massive restructuring program; the factory in Dagenham only makes diesel engines; the Bridgend engine factory only has announced new business that would support around a third of the workforce from 2020 onwards; Ford is dropping the US version of the Mondeo (Fusion) and has sent letters to suppliers indicating the European model will not be renewed circa 2020, but the China model will. Not mentioned in the article, but also relevant to the European business is that the company is openly working towards a disposal of the Bordeaux transmissions plant.
The scope of Ford and VW’s collaboration — seemingly dubbed Project Cyclone — reportedly currently covers several sizes of commercial vehicle and light pick-up trucks (Ranger / Amarok). VW insisted that no firm commercial decisions had been taken. (Handelsblatt)

Will develop driver assistance systems for Geely branded cars with Smart Eye (Geely)
Unveiled the production version of the Lynk&Co 03. It looks virtually identical to the “concept” version. (Autocar)
Proton has reportedly signed an agreement with Al Hajj Motors to assemble and sell electric cars in Pakistan. (Times of Islamabad)

Executives said the company will “probably have a different solution” for supply of small diesel engines that are currently sourced from Opel, once the model is upgraded. (Automotive News)
Said the new 6 cylinder diesel will be followed by smaller engines based on the same modular structure, with an I4 and possibly I3 in the works. GM also thinks that next generation diesel hybrids may help to stabilise the market share of the fuel type. (Automotive News)

Had to temporarily stop production at the Marysville, USA plant due to a disgruntled axe-wielding worker. (WHIO)

Planning to export large numbers of Chinese-built cars to Southeast Asia to better utilise surplus capacity in the country. Although Hyundai said no final decision had been made, the Chinese JV partner said it has. (Reuters)

Experienced 308 production stoppages because of a shortage of 6 speed manual gearboxes, a reported 12,000 vehicles have been lost. (Reuters) CEO Tavares encouraged workers at the Valenciennes plant to lift gearbox production from 1,800 units per day to 3,000, but is receiving pushback from unions. (France Info)
Confirmed all Groupe PSA passenger cars have completed WLTP certification. (PSA)
The CO₂ output of PSA vehicles rose between 24% to 31%, depending on the model, under WLTP. (Les Echos)
- Implication: Following reporting around potential inflation of WLTP test results to provide an easier post-2021 glidepath, the PSA figures appear consistent (albeit slightly higher) with prior testing by the EU which indicated an average CO₂ increase of 21% for cars and 30% for vans.
Said it was investigating the potential of manufacturing a new vehicle at Poissy. It seems likely that this would be a B-sized car, based on the plant’s current facilities. (PSA)
Despite PSA’s recent efforts to reduce complexity, the Opel Corsa still boasts nine different windscreen and wiper combinations. (Bloomberg)
Consolidating sales offices and parts warehouses in the UK following the Opel / Vauxhall takeover, a move that affects 200 UK jobs. (Coventry Telegraph)

Renault’s big Paris motor show reveal plans fell apart after the concept car was spotted on a photo shoot. (Motor 1)

A UK motor magazine said the F-Type replacement will have a mid-engined layout, with an all-electric version due by the mid 2020s. (Auto Express)

Experienced network connectivity issues with access to some functions, repeating an issue seen a couple of years ago. Driving using the key was not affected, good news for everyone except Model 3 owners. (Electrek)
Reduced the price difference between specifying driver assistance features before delivery and activating them later to $500, from $1,000 previously. The move is supposedly only temporary until the end of September and is surely not an attempt to improve earnings before the quarter end. (Electrek)
Reportedly struggling to reach the production targets for Model 3 Tesla set after declaring it had reached 5,000 units per week — and has been unable to even sustain that level. (Electrek) Unless you believe that the company is comfortably exceeding 5,000 units per week and may be up to 6,000 per week as planned. (Detroit News)
Added a new pin-to-drive feature to overcome weaknesses in security that allow car thieves to hijack the signal from the key and steal the vehicle. (Electrek)

Invested $500 million in Uber and announced a collaboration to create purpose-built autonomous vehicles (based on the Toyota Sienna minivan) that will run on Uber’s network with an initial fleet in service from 2021. (Toyota)
Will drop the Auris name in Europe and use Corolla instead when the C-sized hatchback is replaced. (Toyota)
Unveiled the updated Lexus RC sportscar. (Lexus)

Looking at introducing a mandate for managers to choose plug-in or full electric vehicles on the company car scheme with a view to substantial numbers of electrified cars entering the 20,000-strong fleet from 2019 onwards. One alternative is charging managers choosing non-electrified vehicles more. (Handelsblatt)
- Implication: If the scheme was successful in wholesale changing the behaviour of VW Group managers, it would have quite a profound effect on the German second hand market with tens of thousands of nearly new vehicles looking to find a home.
Leaked documents reportedly show that all VW automatic transmissions have special test-only shift programs, meaning that gasoline vehicles could also have unrepresentative test results. The real world impact was not quantified and VW’s PR team seemed unconcerned by the rumour. (Handelsblatt)
Will build an assembly plant in Ghana and increase the capacity of existing operations in Nigeria. (VW)
Ford and VW’s collaboration — seemingly dubbed Project Cyclone — has worried employees at VW’s Hannover factory who do not want to have to compete with Ford’s Turkish operations for supply contracts. The project scope is reportedly currently covering several sizes of commercial vehicle and light pick-up trucks (Ranger / Amarok). VW insisted that no firm commercial decisions had been taken. (Handelsblatt)
Buyers seeking to leapfrog the waiting list for the Bugatti Chiron now have another option, a 1,000,000 piece kit developed with Lego. Performance is reduced with a top speed of only 20 km/h but the plus side is that no glue is required so the blocks can be reused for another project if you tire of it. (Engadget)
Porsche’s rule of thumb is that battery energy density increases 5% each year and the company is working on charging at a higher rate than the already announced 350 kW. (Porsche)
Škoda executives said the brand was considering building a new car plant and that the UK was one of the possible sites, albeit a rank outsider. (Autocar)
Said that WLTP certification for VW brand cars will be completed by the end of September, however only half of the models made the cut-off to continue sales without interruptions. (The Sun)
Production of the Audi e-tron SUV has started even though the car has yet to be (officially) unveiled. (VW)
Opened a new plant in Tianjin, China with annual capacity of 300,000 units to produce VW and Audi badged SUVs with joint venture partner FAW. (VW)

Other

Dyson submitted a planning request for a new test track at its existing development centre saying the envisaged £200 million investment aimed to create a “world-class” site. (CNBC)
- Implication: Dyson’s development centre seems worrying small for vehicle development (10 miles of test track), as a comparator, the Ford test centre in Lommel, Belgium, has around 100km of track.
Aston Martin published a registration document ahead of its intended IPO. (Aston Martin)
Koenigsegg said Spyker had yet to purchase any engines from them under a supply agreement announced last year, implying the company hasn’t been making any cars (although there is an outside chance they have just carried on using Audi engines). (Motor 1)
Koenigsegg said the unveiling of the Tesla Roadster has motivated the company to explore new ways to improve performance and that the company believes it can reach 250 mph in 14 seconds. (The Drive)
Faraday Future said pre-production builds were underway at its new factory. (Faraday)
Chinese brand GAC Motor said it will launch in Russia during 2019. (GAC Motor)
Unlike the US president’s bespoke Cadillac, Vladimir Putin’s new state limousine, the Aurus Senat, is now on sale and will be available to oligarchs and proletariat alike. Lenin would surely have approved. (Autocar)
SSC unveiled the Tuatara supercar. Powered by an engine with a claimed output of 1,750 hp, the company has set a top speed goal of greater than 300 mph. Production will be limited to 100 units. (SSC)

News about other companies and trends

Economic / Political News

French August passenger car registrations of 150,391 vehicles were up a whopping 40% versus a year earlier. (CCFA)
Italy registered 91,551 passenger cars in August, up 9.5% on a year earlier. (UNRAE)
Spanish passenger car registrations in August were 107,692 units, up 48.7% on a year earlier. (ANFAC)
The US government said it had agreed a new trade deal with Mexico to replace NAFTA and will proceed on a bilateral basis if talks with Canada about the terms fail. (Detroit Free Press)
The EU’s chief Brexit negotiator said he was opposed to the UK’s proposal for a common rulebook that is outside the single market. His concerns centre on the fact that the EU would be obliged to offer such a deal to any third country willing to accept the terms, an issue that the UK appears to have ignored. (The Guardian)
EU chief Junker said that his recent agreement with US president Donald Trump was a “kind of ceasefire” and that the EU would retaliate with tariffs if the US government did so. Trump reportedly rejected a proposal to remove all tariffs on cars shipped between the EU and USA because of “consumer habits”. (Times of India)
Japan’s government said it intends to stop sales of all non-electrified models by 2050 and will prepare draft legislation to that effect. (Argus)
UK dealers blamed WLTP for a reported a fall in orders for September versus a year earlier. (Motor Trader)

Suppliers

Sensor supplier Murata will build a new plant in Finland, opening in 2019 and creating 150-200 jobs. (Murata)
Continental is opening a new plant in Changshu, China for turbocharger hoses. (Continental)

Uber is reportedly designing its own electric scooter for subsidiary Jump to use in preference to buying them from external suppliers. (Bloomberg)
- Implication: Uber’s entry into hardware might inform the company’s approach to vehicles, particularly if this project does not go well.

Russian ride hailing firm Yandex has begun an on-road pilot of autonomous vehicles. The two car fleet runs between set destinations; the customer experience is therefore more like an on-demand bus. (Yandex)
Lidar developer Blickfeld reportedly raised an additional $6 million. (Evertiq)
A crash test report by Apple confirmed that the company’s test fleet is being used in autonomous mode on public roads. (California DMV)
Waymo’s test fleet is getting rave reviews from its users but drivers who encounter the vehicles frequently are being driven to distraction — and in some cases illegal evasion manoeuvres. (The Information)
Waymo’s fleet completed its nine millionth mile of testing. (Waymo)
- Implication: The fleet is now accruing around one million miles of autonomous driving each month — it remains to be seen how the company intends to demonstrate sufficient safety to be able to use all the vehicles it has signed supply agreements for.
A UK consortium including JLR have been testing autonomous pods with big eyes. (Mashable)
Toyota invested $500 million in Uber and announced a collaboration to create purpose-built autonomous vehicles (based on the Sienna minivan) that will run on Uber’s network with an initial fleet in service from 2021. (Toyota)
- Implication: It isn’t clear how this will affect Uber’s previous announcement to buy a fleet of Volvo XC90 SUVs, potentially the two will be separate, with Uber mounting its own technology on the Volvo vehicles whilst Toyota provides more of a turnkey solution.

Exide Industries and Leclanché are establishing a joint venture in India to make batteries for electric vehicles and stationary storage. (Inside EVs)
Battery developer Sila Nanotechnologies raised $70 million. (Inside EVs)
Faraday Future said pre-production builds were underway at its new factory. (Faraday)
Porsche’s rule of thumb is that battery energy density increases 5% each year and the company is working on charging at a higher rate than the already announced 350 kW. (Porsche)

Connectivity

NavInfo will supply Daimler with digital maps in China. (FutureCar)

Other

San Francisco said electric scooter rental companies can return to its streets, but it is only letting two companies in: Scoot and Skip. (The Verge)
- Implication: Although permits for scooters are relatively small beer compared with other transport modes, the city’s decision reflects a continuing trend for regulators to quite happily pull the rug from under the feet of companies that, up until that moment, assumed a laissez-faire licencing approach.

Find our archive here.

Auto Industry Briefing — week ending 26th August 2018

August 28, 2018 Ad Punctum TeamAd Punctum, Automotive0

Cash burning a hole in VW’s pocket; quick maths by union leaders; and Lynk&Co’s rise from zero to hero. Please enjoy our auto industry and mobility briefing for 20^th August to 26^th August. A PDF version can be found here.

Favourite stories of the past week…?

Thrift Shop — VW reportedly wanted to get involved in the bid to take Tesla private. But why? Why would they want a large share of Tesla, and if there is a good reason then why not buy that stake on the open markets at $300 – $320 per share instead of waiting for the business to go private at $420 a share?
Can’t Hold Us — The head of the US autoworkers union called for more local manufacture of EV parts, citing his concerns about losing traditional powertrain jobs. But according to his own figures, the value added work in an electric powertrain is less than an internal combustion engine and transmission, so how does the maths add up to save everyone’s jobs?
Make The Money — Lynk&Co is powering Geely’s sales growth in China. In July, with the 02 crossover available for the first time, Lynk&Co’s sales outstripped combined registrations of Ford’s Ecosport, Kuga and Edge SUVs in China. Not bad for a brand that launched less than 12 months ago. How are they managing to get customers so excited? The product or the selling proposition? Will Western consumers react in the same way when the brand touches down in Europe?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

News about the major automakers

Unveiled the new Z4 roadster. (BMW)

Reportedly looking at a deal to take a 20% stake in VW’s online used car platform HeyCar. (Handelsblatt)

Reportedly in talks to sell Magneti Marelli to private equity firm KKR’s Calsonic Kansei rather than spin it off into a separate listed entity. (Detroit Free Press)
Recalling around 209,000 cars to fix braking problems. (Yahoo Finance)

Moved the product planning team out of product development so the position now reports into the marketing organisation.(Ford)
Ford’s governmental affairs team took a hit as its head of international relations was recruited by the US government to oversee negotiations with North Korea, shortly after the top lobbyist left for SoftBank. (Detroit News)
Recalling around 50,000 charging cords for electric vehicles due to fire risks and a small quantity of vehicles that appear to have been factory released without all the bolts being properly tightened. (Ford)

Reported first half revenue (excluding Volvo and Lynk&Co) of 53.7 billion RMB (about $7.9 billion). Reported profits of 6.7 billion RMB (about $1 billion) were up 54% on a year earlier. The company believes that it will beat its previous volume expectations for the full year, in part due to the strong performance of Lynk&Co products. (Geely)

Increasing the amount of product development it does in Australia, even though it has ceased manufacturing in the country. GM will recruit around 150 new engineers to bring the total to 500. (com.au)
Employees at one of GM’s few components factories (in Rochester, USA) are worried that a move to source fuel system parts from an external supplier spells the end for their plant after 2021. (Democrat&Chronicle)

Kia reached an agreement with South Korean unions on a pay deal for 2019. (Yonhap)
Hyundai is reportedly looking for a partner to manufacture its Ioniq foldable electric scooter. (Korea Herald)

Launched production of the new Altima sedan at the Tennessee, USA plant after a $170 million refit of the plant facilities and tooling. (Nissan)
Production of the China market-only Slyphy BEV began at Dongfeng’s plant in Huadu, China. (Nissan)

Opel unveiled the GT X BEV compact (B-sized) SUV. Although described as a concept, the vehicle seems a likely candidate for production as the next generation Mokka X, sharing the underpinnings of the next generation 208 / Corsa (already been confirmed as having a BEV version), and due around 2020. (Opel)
Employees at Opel’s Aspern plant in Austria are concerned by media reports that factory headcount could fall from 1,400 now to around 600 very soon as the outgoing five speed transmission is set to be replaced by one with far lower volumes, and engine production is also thought to be under threat. (Kurier)

Will unveil the new Arkana crossover at the end of the month ahead of launch in various markets from 2019 onwards. (Renault)

Suzuki

Reportedly working on a deal to dissolve its Chinese joint venture and end direct involvement in the market, although Suzuki badged cars might continue to be made under licence. (Bloomberg)

Before it has even opened, union officials at JLR’s new factory in Slovakia are complaining about the work environment, saying that insufficient air conditioning has been installed to stay within comfortable working temperatures. JLR say that a “drinking regime” is used in the event of high temperatures. This is OEM-code for offering workers the choice between: working in stifling heat or; working in stifling heat and consuming disgusting orange squash, the type which you will have experienced if you were unlucky enough to attend an English state school in the 1980s and seems to have disappeared from all shelves; except those of a secret supermarket seemingly known only to OEM HR departments. (Slovak Spectator)

Elon Musk said he was no longer interested in taking the company private, citing unforeseen time consuming and complicated responsibilities that come with running a private company. (Tesla)
Leaked internal documents suggested Model 3 had a first time through quality rate of around 15% — about the same as an underperforming car plant in the late 1990s. Since first time through refers to corrections made at the end of the assembly line, it is an indicator of productivity and not a suggestion of low outgoing quality. (Business Insider)
Despite Tesla’s other troubles, a recent audit of the Las Vegas Gigafactory said that hiring was taking place at the expected rate to justify receiving tax credits from the local government. (Electrek)
Testing data collected from driver logs suggested that the 75 kWh Model 3 has a superior combination of charging time and consumption compared with top specification Model S and X. (ABRP)
A Bloomberg columnist took it upon themselves to ask former Ford CEO Alan Mulally whether he would like the top job at Tesla and received an equivocal response. (Bloomberg)
One of the companies reportedly prepared to invest in a bid to take Tesla private was VW. (WSJ)

CEO Diess gave a wide-ranging interview in which he called the level of change necessary to be competitive in software “exhausting” but expressed confidence that VW could hold its own against the likes of Google and Apple. He also believes that VW’s experience with the eGolf has shown strong demand for a 300km real world range car at a €30,000 price point and cautioned against viewing the electric car in isolation as an environmental benefit, citing claimed equivalent 600 g per km of CO₂ in Germany (against a sub-130g fleet average target). Diess suggested a working assumption of 2025 battery costs of €5,000 to €6,000, implying the company expects costs of €85 to €100 per kWh by that time. (Handelsblatt)
VW’s independent auditor of emissions protocol complained to the company about the level of cooperation it was getting from executives and received assurances that transparency will improve. (Reuters)
Reportedly tried to buy self-driving software developer, and partner, Aurora but was rebuffed because the firm wanted the freedom to work with multiple carmakers. (Bloomberg)
Will spend €3.5 billion on forthcoming IT initiatives up to 2025, with new cooperations and acquisitions planned in the “near future”. VW is simplifying its software design to reduce the number of control units in a vehicle from around 70 to “just a few”. (VW)
Audi showed an all-electric sports car concept called PB18, potentially a precursor to the next generation R8. (Audi)
Reportedly looking at a deal sell a 20% stake in online used car platform HeyCar to Daimler. (Handelsblatt)
VW was reportedly one of the companies prepared to invest in a bid to take Tesla private. (WSJ)
MAN truck announced a series of efficiency initiatives, including ending one model line and selling the factory that built it. (MAN)
Launched a new all-electric car sharing scheme called We Share which will begin operations in the middle of 2019 in Berlin and then expand to other European and US cities. (VW)
- Implication: VW’s approach to mobility still appears fragmented with We Share representing another new brand in addition to the previously announced Moia.

Other

Russian firm Kalashnikov unveiled an all-electric model called the CV-1 that it says will combine a 220 mile range with the looks of a stretched Yugo. Pricing and sales targets remain a mystery. (BBC)
Subaru has trimmed its European diesel line-up following WLTP certification and now the only vehicle offering diesel engines is the Forester. In the UK, the fuel type has been dropped altogether. (Autocar)
McLaren’s CEO said that high performance luxury car sales in India were being held back by the poor state of the country’s roads. (Automotive News)
Wiesmann said their new model will be on sale in 2019. (Sunday Times)
Perodua is reportedly experiencing launch problems with the new Myvi. (Carlist)

News about other companies and trends

Economic / Political News

The UK government issued guidance for a no deal Brexit. (UK Govt)
A poll of UK drivers found about half of them believe diesel cars should be banned, about the same proportion as drive petrol powered cars. (The Guardian)

Suppliers

Continental issued a new profit warning with the blame placed on exchange rates. (Continental)
Adient’s CEO and Chairman abruptly stepped down and was replaced on an interim basis. (Adient)
FCA is reportedly in talks to sell Magneti Marelli to private equity firm KKR’s Calsonic Kansei rather than spin it off into a separate listed entity. (Detroit Free Press)
HyundaiMobis invested about $7 million in image detection firm StradVision. (Green Car Congress)
Denso invested $270 million in OLED developer JOLED, a business that was formed through the merger of Panasonic and Sony’s OLED assets. (Denso)
Denso and Aisin Seiki are establishing a 50/50 joint venture for electric vehicle drive modules. (Denso)
Denso, Aisin Seiki, Advics and Jtekt agreed a joint venture to develop electronic controllers for self-driving software and sensors. The shareholdings will be 65%/25%/5%/5% respectively. (Denso)

Dealers

The man GM says sold the most vehicles ever in a single year in the US is being sued by the previous record holder and Guinness has refused to officiate. (Detroit Free Press)

Uber’s CEO says the company thinks bicycles are a better method of transport than cars for short trips in centres and will try to direct users to that type of service over cars. He believes that, in general, a switch will be a good thing for drivers since there will still be lots of longer trips for them to fulfil. (Financial Times)
- Implication: The CEO’s stance repeats earlier Uber data suggesting that bicycle rides cannibalised short term trips, however the company is yet to offer solutions to bicycle sharing’s shortcomings, notably how usage drops as weather worsens. Whilst headline-grabbing, Uber will be aware that its valuation, way beyond that of bicycle rental firms, is predicated on the assumption of profitable growth in taxi-type services.
Uber appointed a new CFO, who immediately hit headlines by suggesting that 2019 could be too early for the company to have its IPO. Uber’s PR department said he was simply being conservative. (Business Insider)
Uber executives talked about the challenges of operating in emerging markets, particularly verifying cash used in transactions and dealing with fuel price inflation. (QZ)
Grab announced a fleet of 200 Hyundai Ioniq BEVs will serve customers in Singapore and build the company’s understanding of the practicalities of operating a high-utilisation electric vehicle fleet. (Grab)
Didi suspended services on its carpooling app Hitch after a murder, the second this year. (Reuters)
Car sharing firm Getaround raised $300 million from investors including SoftBank and Toyota. (Reuters)
Luxury car rental firm CarHopper integrated its offering into private jet rental firm JetSmarter’s (CarHopper)
MaaS Global raised €9 million. (MaaS Global)

Aptiv’s fleet of 30 self-driving vehicles in Las Vegas, USA have already logged 5,000 journeys (on Lyft’s network) since operations began in May. (Aptiv)
The CEO of self-driving developer Zoox stepped down or was fired, depending on who you asked. (SMH)
Waymo is currently using remote operators in an advisory capacity. Rather than taking control of the vehicle, they select next steps from a list of suggestions by the vehicle and these are then executed according to the vehicle’s programming. (The Verge)
Lidar supplier Quanergy said it was expanding production “by an order of magnitude” in order to become the volume leader. (Quanergy)
Waymo has established a subsidiary in China, fuelling speculation of a launch in the country. (Reuters)
An ex-GM executive who now consults with Waymo listed GM, Daimler and Toyota as the OEMs best positioned for autonomous vehicles, in his opinion. (Forbes)
Mapping start-up Carmera said it has raised $20 million. (TechCrunch)
Self-driving developer Ghost Locomotion said it has $15 million in funding. (Crunchbase)
VW reportedly tried to buy self-driving software developer, and partner, Aurora but was rebuffed because the firm wanted the freedom to work with multiple carmakers. (Bloomberg)

Chief of the US UAW union wrote an op-ed piece calling for EV powertrain production to be located in the US and preserve jobs. (Detroit News)
- Implication: Although he acknowledged the far lower mechanical (and therefore value-added) content in a BEV compared with an ICE powered car, the UAW President didn’t recognise that anything near to a one-for-one exchange of jobs is impossible, even if powertrain production remains in the US as he hopes.
Russian firm Kalashnikov unveiled an all-electric model called the CV-1 that it says will combine a 220 mile range with the looks of a stretched Yugo. Pricing and sales targets remain a mystery. (BBC)

Connectivity

TomTom said in July it made 1.5 billion changes to its maps, part of this was adding 1.32 million km of new roadways but much of it was changes to existing features. (TomTom)

Other

Root, an insurance company that offers individual policies based on usage and data collected about the policy owner’s driving style, raised $100 million. (TechCrunch)

Find our archive here.

Auto Industry Briefing — week ending 19th August 2018

August 21, 2018 Ad Punctum TeamAd Punctum, Automotive0

Unsettling times for lidar investors; Aston Martin’s money for old rope and Tesla’s product ageing problem. Please enjoy our auto industry and mobility briefing for 13^th August to 19^th August. A PDF version can be found here.

Favourite stories of the past week…?

I’m Looking Through You — Lidar maker Quanergy found itself on the receiving end of investor panic because Daimler might prefer Velodyne’s product. Recent funding for lidar developers seems to be on the premise that there are massive riches to be made from a killer-sensor. The reality is more mundane; some competition is good but are 30+ companies needed for a product OEMs will successfully commoditise within two cycles? Whatever becomes of Quanergy, some consolidation wouldn’t go amiss.
Get Back — Aston Martin are going to make another 28 DB5 cars. Lucky punters can pick them up for £2.75 million, plus taxes (but can’t drive them on the road). Since the last “continuation” run of DB4s came in at £1.5 million, the extra money seems to be going straight into AML’s pocket. Is this type of exercise good fun or does it sell out the heritage and make the company look a bit desperate?
When I’m 64 — Elon Musk gave an interview where he talked about the exciting challenge of Tesla developing two products at once (Model Y and Semi). At the rate they are going, the Model S and X are going to be over ten years old when they are replaced, yet the competitive position of an ageing product doesn’t seem to be discussed anywhere. Should it?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

News about the major automakers

South Korean regulators told owners of around 20,000 BMWs to stop driving them until the company had completed a recall action on them to address the risk of engine fires. (Reuters)

Trademarked “AMY” branding in relation to autonomous driving technology. (The Drive)

Confirmed early 2019 as the timing for the end of Alfa Romeo MiTO production. (Autocar)
Insourcing production of power electronics modules for forthcoming PHEVs to the Toledo machining plant. (FCA)
- Implication: This action indicates that FCA may see PHEVs as an opportunity to increase workload in its own plants and partially offset the losses from lower traditional transmission take-up. The reality is that the labour associated with these parts is not very high and since OEM plants have traditionally been uncompetitive in making parts such as fuel systems, camshafts and conn rods, this move looks more political than economic.

The CFO said calls for the dividend to be reduced on weaker profits were “baseless”. (Detroit News)
Published a document outlining its vision for autonomous vehicles, reiterating the company’s intent to bring a vehicle to market in 2021 that is capable of driving without human assistance “within a specific geographic area and during appropriate weather conditions” but clarified that the cars “won’t initially be sold to customers”. In some cases the geofenced area (called the operational design domain, or ODD by Ford) might resemble a series of protected routes more than entire map grid squares as the cars avoid “complex” road layouts. (Ford)
- Implication: The document doesn’t reveal any proprietary advantage Ford believes it may have in autonomous vehicles but does confirm the company recognises and implements best practice in a number of areas. The text doesn’t make for skim reading; in one section Ford talks of “post crash ads behavior” but rather than explaining an exciting strategy to bombard occupants with commercials for no-fault lawyers following an accident, it refers to how the automated system will shut down in a safe manner (yawn). Ford also downplays the value of fleet deployments by competitors saying it has “millions of miles available for training sets” in virtual environments and “novel data” is what matters.
A report suggested CEO Hackett’s communication style was harming the company’s ability to implement strategic changes, saying some executives had to rely on his chief of staff (a former visual sensemaker) to understand his intent even after holding meetings on the subject. (Wall Street Journal)
Said that the development of new premises in downtown Detroit, centred on the former train station, will cost up to $740 million, which Ford expects to be partly subsidised by $240 million of tax breaks. (Detroit News)
Ford’s Autonomic unit signed a collaboration with Alibaba to develop a connected car platform for the Chinese market that would run on Alibaba’s servers. (Ford)
Said it will take “whatever action is needed” to ensure business profitability in the face of Brexit. (The Independent)
- Implication: Despite the consistent interpretation of these comments as a threat to Ford’s UK base, the reality is Ford already has too small a footprint in the UK compared with its sales and is suffering from the lack of a natural hedge, which it had at a corporate level until the sale of JLR in 2008. Unless Ford is contemplating mass withdrawal from segments in a market that is the company’s joint third largest globally (behind USA and China and tied with Canada), the obvious implication of Brexit is that the company needs to do more in the UK, rather than less.

Geely and Proton signed a new strategic agreement that will likely lead to Proton-badged cars being built and sold in China. Proton are also hoping to access Geely’s electrification technology. The new agreement was signed with Malaysia’s prime minister — who has recently suggested that Geely’s involvement in Proton could require a new Malaysian national champion to be founded — looking on. (Geely)
Said its latest small crossover would be called Bin Yue in China and launched a competition to decide the name for international markets. (Geely)
- Implication: Unfortunately, wags appear thin on the ground with respondents to Geely’s Facebook page offering mundane or faux-profound monikers with no wordplay on bin/been and only one “Geely McGeelyface”. It was unclear whether there would be any trademark issues with “Geely LaGeely”.
Investors have reportedly indicated favourable support for a Volvo IPO that would value the brand at $30 billion, in line with Geely’s aspirations but higher than previously indicated. (Business Insider)
- Implication: At $30 billion, Volvo’s value would stand at more than 75% of former parent Ford, and a hefty mark-up on Geely’s acquisition price. It also implies a fantastic growth outlook at a time when most other western OEMs are being valued (with some justification) on an assumption of the cycle being at its peak.

Announced US customers will be able to purchase fuel from Shell stations using the in-dash Marketplace app. (Shell)
Will begin production of the Chevrolet Tracker at its joint venture in Uzbekistan this year. (Wards Auto)

Made a strategic investment in Revv, an Indian car sharing firm. (Hyundai)
Unions will hold partial strikes of between 4 – 6 hours per day at Kia’s South Korean plants after failing to reach agreement on wage rises. (Korea JoongAng)

Reportedly plans to start production at its new plant in Slovakia in September. (Slovak Spectator)

CEO Musk gave an interview where he talked about the mental and physical pressures of working constantly, and but said the board had full confidence in him and there was no need for a COO, although if someone better than him were found they could “have the reigns right now”. (New York Times)
CEO Musk explained the background to his infamous “funding secured” tweet by saying it came following conversations with a Saudi sovereign wealth fund where he was left with the impression that the fund would provide him with whatever financing was necessary to take the company private. (Tesla)
A trip to Tesla’s factory left analysts confident the company was achieving benchmark levels of productivity and that an increase in line rate to 8,000 vehicles per week can be achieved with relatively low additional spending. (CNBC)
A Model 3 teardown report speculated that base model vehicles may be lossmaking (by up to $6,000 per unit) due to the technology cost, and that the design cost lead over GM was lower than expected. (Economic Times of India)
CEO Musk said the company could “maybe” make a car with a price of $25,000 “in about three years”. Musk also said the company was still learning to develop two products concurrently. (CNBC)
- Implication: Almost silently, Tesla is implicitly challenging industry norms in terms of replacement cycle. With no successors on the horizon, the Model S and X could conceivably be over 10 years old when their replacements arrive. The possible counterpoint to this (based on no disclosure by Tesla) is that vehicles will be quickly scalable from common parts in the same way as the mid-2000s Nokia range. The company risks rapid fall-off in sales as competitive product (finally) arrives and its vehicles look stale by comparison.

Chinese government websites suggested Toyota has been granted approval for incremental annual production capacity of 10,000 BEVs and 110,000 PHEVs in Tianjin. Company sources suggest an additional 120,000 units of annual capacity could be installed at Guangzhou. (Reuters)

Unsealed court documents suggested CEO Diess knew about the diesel scandal for a couple of months before the company’s revelation of the problems, however the company defended this saying it was normal for executives to have discussed the matter before public disclosure and that at the time, executives hadn’t realised the extent of the problem. (Reuters)
Bentley’s boss implied that his medium-term volume goal is 15,000 units annually. (Autocar)
Works council boss Bernd Osterloh said that German plants should be fully utilised before new capacity is built in the VW network, and is focused on finding new work for Emden. He also called the views of those saying there is no need for German battery production “ignorant” because “40% of the value of the car will be the battery”. (WAZ)
Said that it had improved the company’s process for whistle-blowers and there were now around 70 to 80 reports made each month, of which “a relatively small number” turn out to be suspicious conduct. (VW)
Agreed a two year pay deal for workers in Mexico; 5.5% now and inflation plus 2% in 2019. (Reuters)
VW’s UK sales operation was hampered by a protest of environmental activists and health workers that blockaded the entrance to the building. (The Guardian)
VW’s German workers are outraged by a change in the tomato ketchup in staff canteens. The new recipe apparently has less fat and sugar but more tomato; the impact on productivity has not been publicly revealed. (WAZ)

Other

NIO filed documents saying it intends to raise up to $1.8 billion through an IPO in New York. (NIO)
Lucid is reportedly in talks to with PIF, the Saudi Arabian sovereign wealth fund that Elon Musk says may fund his bid to take Tesla private. The deal would see PIF invest $1 billion for a majority stake. (Reuters)
Aston Martin will build 28 new DB5s in a specification matching the James Bond movie Goldfinger. The cars will retail for £2.75 million plus tax. (Aston Martin)

News about other companies and trends

Suppliers

Nexteer reported first half revenue of $2.05 billion and net profit of $200 million. (Nexteer)
Lear opened a new seating plant in Michigan, USA which will ultimately employ 600 people. (Lear)

Dealers

Swap Motors, a US peer-to-peer car marketplace announced the opening of its first physical site to help address key transactional pain points. (Swap Motors)

Uber’s Q2 2018 financials showed net revenue of $2.7 billion on gross bookings of $12 billion. Adjusted losses came to $(891) million. (Reuters)
Uber is reportedly under pressure from investors to abandon its self-driving program after rumours that it is spending almost $(200) million per quarter on development. (Reuters)
Didi’s services unit, Xiaoju Automotive Services, acquired car maintenance business Hiservice. (TechCrunch)
Hyundai made a strategic investment in Revv, an Indian car sharing firm. (Hyundai)

Waymo researchers said the company has 25,000 vehicles in its virtual test fleet driving eight million simulated miles each day — an average of 320 miles per day — indicating that the simulated world, dubbed Carcraft, is processed at around real world pace (13 mph would be respectable in an urban area). (Business Insider)
FiveAI said it will start operating an autonomous test fleet in London suburbs in late 2019, following several months off data gathering by five manually-drive, sensor-laden vehicles starting soon. The company’s ultimate aspiration is to run ride hailing services with its own vehicles. (TechCrunch)
- Implication: Based on real world experience from the likes of Waymo and Cruise, the size of the FiveAI fleet suggests that the company will initially experience very high numbers of manual interventions per mile, unless the company’s development team has discovered a far more efficient testing regime.
US supermarket Kroger announced details for a self-driving delivery pilot using Nuro The shop involved is not Kroger-branded and there will be a $5.95 delivery fee for all orders. (Kroger)
- Implication: The use of a non-Kroger branded store may indicate the company perceives a reputational risk from the pilot, in addition, the service charge is in line with current manually-delivered orders so the pilot is likely to reveal little in terms of price elasticity and potential incremental sales from low cost delivery services enabled by AVs.
Lidar maker Quanergy has reportedly seen its funding plan disturbed by Daimler’s recent sourcing of sensors from Velodyne and rumours of quality problems. The company appears to have put a planned IPO on hold but insists it is one of the “finalists” for a Daimler supply agreement. (Bloomberg)