Self-driving dominoes falling; creating new cars is too expensive; and battery range — it’s all in the manufacturing. Please enjoy our auto industry and mobility briefing for 25th March to 31st March 2019. A PDF version can be found here.
Before you read the detail, what were my favourite stories of the past week…?
- Come In From The Cold — Daimler Trucks has acquired a majority interest in self-driving vehicle developer Torc Robotics. Torc had money, experience and were well regarded, so why sell out? Have we reached the point where investors are thinking it is best to sell for a decent price now rather than lose it all as reality dawns that they don’t have the firepower to match Waymo and the OEMs?
- Sometimes Love just Ain’t Enough — Indian firm JSW Energy has given up on making electric cars after concluding $620 million would be insufficient and China’s XPeng says it could take more than $4 billion. Newcomers often think of product first and execution second, but this misses the hard truth of product programs — both need to be great. When PSA et al spend €400 million on a new car, most of that is in getting the per unit price from €100,000 to €15,000 rather than ground-breaking engineering. Established companies share components on a massive scale, why don’t the challengers?
- Future Looks Good — Toyota researchers say they have found a way to quickly test battery life. They also reckon that manufacturing variability is much greater than previously thought and that simply by sorting good from mediocre, greater range (and pricing) awaits. Who knew?
News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.
Find our archive here.
SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU
News about the major automakers
- Rumoured to be interested in taking on the Honda’s Swindon, UK, factory. BMW issued a denial. (Autocar)
- BMW says that to get two million kilometres of representative driving data that can then feed simulations, it needs five million kilometres of data. BMW does not explain how this is sufficient since it is far below the number of miles driven between serious accidents. The fleet of 80 vehicles collects more than 1,500 TB of raw data each day. BMW helpfully comfirms that it is impractical to store so much information using either iPhones or CDs. (BMW)
- Will stop purchasing cobalt from the Congo by 2021. (Automobil Produktion)
- BMW and Daimler are said to be discussing a 500,000 annual volume target for a shared electric vehicle platform that would support a BMW i2 model with a sub-€30,000 price point. (Automotive News)
- Formed a joint venture with Geely that will own the Smart brand. Production will be based in China at a new factory that will start building cars in 2022. Daimler implied that the Hambach plant in France will only produce Mercedes cars in future. (Daimler)
- Aiming to save 50% of travel costs in the latest austerity drive, blaming a relaxation in approval levels for an explosion in spending. (Handelsblatt)
- Daimler
Trucks purchased a majority stake in autonomous driving developer Torc Robotics.
Daimler will continue working on proprietary self-driving software, and so will
Torc. (Daimler)
- Significance: Torc has substantial experience in off-highway applications, which could help build credibility with Daimler Trucks customers. The acquisition could also be the beginning of the end for the midfield self-driving efforts as investors choose to sell out whilst the businesses are going concerns rather that continue in a seemingly futile effort to compete with those spending hundreds of millions each year.
- BMW and Daimler are said to be discussing a 500,000 annual volume target for a shared electric vehicle platform that would support small cars with a sub-€30,000 price point. (Automotive News)
- Following in PSA’s footsteps, Renault is rumoured to be interested in FCA, if it can merge with Nissan. (Reuters)
- Reportedly planning to stop Charger and Challenger production to manage inventory levels. (Automotive News)
- Believes that alternative fuels, such as ethanol and natural gas, will be more widely used than electrification in South America as a method of reducing emissions. (Reuters)
- Rumoured to be in talks with PSA about creating a shared platform for small cars. (Bloomberg)
- Extended the €6.25 billion credit line to March 2024. (FCA)
- Cutting a shift at the Windsor, Canada, plant due to falling minivan sales. (Reuters)
- Announced the cessation of passenger car production and sales in Russia, resulting in the closure of two vehicle plants and an engine plant in the country. Ford will also relinquish control of the joint venture with partner Sollers receiving a 51% share of the restructured entity. Ford said the move will reduce profits by about $500 million, of which about $200 million will be cash. (Ford)
- May be close to a deal to sell the Sao Paulo plant, now scheduled for closure. (Reuters)
- Hosting a media event in Amsterdam, Netherlands on 2nd April to reveal new European products. (Ford)
- Reached agreement with unions on the terms for stopping production of the C-MAX and eliminating a shift at the Saarlouis plant. (Ford)
Geely (includes Volvo) (history)
- Formed a joint venture with Daimler that will own the Smart brand. Production will be based in China at a new factory that will start building cars in 2022. (Daimler)
- Sold the Gunsan, South Korea factory to Myoungshin. The new owner plans to contract manufacture electric vehicles there. (Reuters)
- Rumoured to have had talks with FCA to sell the Detroit-Hamtramck plant. (Crains Detroit)
- Took a 10% stake in the MONET mobility joint venture between Toyota and SoftBank. (Honda)
- Hyundai’s Genesis brand will lease cars with servicing and insurance included in a single payment. Shockingly, the scheme, called Spectrum, isn’t being referred to as a subscription. (Hyundai)
- Hyundai’s forthcoming small SUV will be named the Venue. (Hyundai)
Nissan (includes Mitsubishi) (history)
- Completed the sale of Nissan’s battery business to Envision. (Nissan)
- Nissan has a reworked approach for determining compensation for directors and executives. (Nissan)
- Renault reportedly wants to give Nissan a short post-Ghosn cooling off period and then resume talks on a full merger within the next 12 months, so that after that the combined entity can take on FCA. (Reuters) Nissan’s CEO said that he doesn’t know anything about it. (Reuters)
- Released a report into the Ghosn scandal, saying he had become too powerful. Nissan’s CEO was exonerated by findings that he had been tricked into signing documents, and that Ghosn never really stopped being CEO anyway until his arrest. (Nissan)
PSA (includes Opel/Vauxhall) (history)
- Will reduce the workforce at the Aspern transmission plant in Austria by about one third. (Reuters)
- Released the 2018 Registration Document. (PSA)
- CEO Tavares wants senior executives who have enough spine to tell him when they disagree with him, and says he works harder than anyone to bring up difficult topics because he is a leader, not a boyfriend. He also says that he receives 1,000 powerpoint slides to read each week, but thinks only 10% of them are useful. (Les Echos)
- Rumoured to be in talks with FCA about creating a shared platform for small cars. (Bloomberg)
- Taking a controlling shareholding in Chinese parts distributor Longstar. (PSA)
- Renault reportedly wants to give Nissan a short post-Ghosn cooling off period and then resume talks on a full merger within the next 12 months, so that after that the combined entity can take on FCA. (Reuters)
- The Renault-Nissan Alliance owned three private jets that apparently nobody knew about. (FT)
- JLR’s North American CEO is unsure of how successful the I-Pace electric car will be (although he likes the car) and sees residual values as a major concern saying that they undermine competitive leasing deals. (CNBC)
- JLR confirmed it had made a tidy sum by investing in Lyft at $32.15 per share. (JLR)
- CEO Musk told staff that the firm will continue to open new stores, providing they do enough to advance interest in the brand and sell cars. (CNBC)
- After Musk failed to master the finer points of the new return policy, Tesla decided that it was the policy that was wrong and changed it to come into line with his comments on Twitter. (The Verge)
- Bloomberg thinks Tesla may have built 80,000 Model 3 in Q1 2019, but the model could be wrong because it is experimental, but if it is right then it is totally genius, but if not it’s just one of those things. (Bloomberg)
- Toyota researchers suggested that battery ageing may have less to do with the charging cycle (the conventional wisdom) and could be more to do with variations in the manufacturing process. The firm sees promise in testing techniques that can grade batteries at the end of the production line and direct the highest performing units to higher revenue applications, plus improve OEM confidence in lifetime capability. (Toyota)
- Honda and Hino took a 10% stake in the MONET mobility joint venture between Toyota and SoftBank. (Honda)
- Believes that sales in South America and the Caribbean will grow less than 1% this year. (Reuters)
- Announced a series of executive changes. (Toyota)
- Suffered a cyber attack which may have affected up to 3.1 million customers. (IT Pro)
- CEO Diess isn’t interested in making a bid for FCA. (Reuters)
- Audi is planning two eTron GT all-electric saloons, one similarly sized to the A4, and one around A6-size. Audi will use the PPE platform for the A4 eTron but the MEB platform for the Q4 eTron, despite both vehicles being around the same size. (Autocar)
- Executives expressed hope in closing a deal with Ford to buy a stake in Argo AI. (Reuters)
- VW says the Group’s cars and trucks account for 2% of global CO2 emissions. (Times LIVE)
- Scrapped 300,000 German diesel vehicles traded in under an incentive scheme. (VW)
- Although VW will sell electric vehicles in Brazil, it won’t make them locally for some time. (Reuters)
- SEAT will develop a version of the MEB all-electric platform for smaller cars, aiming for a starting price below €20,000. (SEAT)
Other
- XPeng’s founder said that $1 billion isn’t enough to start a car company and he now thinks $4 billion – $5 billion is a more realistic assessment. (Detroit News)
- Before going public, NIO reportedly agreed a yearlong non-compete clause with the investment banks leading the IPO, specifically naming several Chinese EV rivals. (Reuters)
- Valmet said Blackrock had increased its stake in the firm to 6.5%. (Valmet)
- South Korea’s Songuo Motors showed off the first set of vehicles for the NeuWai brand. The vehicles will be made in China but exported in semi-knock down kit form, ready for final assembly in local markets. (Songguo)
- Chinese electric vehicle start-up Leap Motor reportedly wants to raise $372 million. (Deal Street Asia)
- Indian group JSW Energy no longer plans to launch an electric vehicle. In 2017, the firm was prepared to commit $623 million (including charging infrastructure spending) to the project. (VC Circle)
- Nikola reportedly purchased the land for the firm’s first factory. (Trucks)
News about other companies and trends
Economic / Political News
- The UAW lost almost 10% of its members in 2018 but said it wasn’t bothered. (Detroit News)
- An IG Metall negotiator suggested that the union would expect a permanent employee laid off by a Tier 1 or OEM in Germany to receive around €260,000 in compensation. (IG Metall)
- The European Union mandated a set of safety features, including automatic speed limiting, from 2022. (EU)
Suppliers
- Continental say 10 inch touchscreens are the norm for European cars and it will soon be 14 inches. (Autocar)
- ZF agreed terms to acquire Wabco in a deal valuing the latter at about $7 billion. (ZF)
- Velodyne has shipped a cumulative $500 million of lidar sensors. (Velodyne)
- Hanon completed the acquisition of Magna’s fluid pressure and controls division. (Hanon)
- Johnson Matthey is building a new plant for electric vehicle batteries in Poland. (Reuters)
Dealers
- Scout24 is in an acquisitive mood, hoping to pick up pieces of eBay’s classifieds business. (Reuters)
Ride-Hailing, Car Sharing & Rental (history)
- Lyft’s shares went great guns in initial trading, valuing the company at nearly $30 billion. (Reuters)
- Ola plans to enter the short term rental business with a $500 million warchest. (Economic Times)
- Uber acquired Careem in a deal worth $3.1 billion, for the time being the two brands will exist side by side. (Uber)
- Honda and Hino each took 10% of the MONET mobility joint venture between Toyota and SoftBank. (Honda)
Driverless / Autonomy (history)
- Waymo’s CTO said that no new breakthroughs were required for self-driving to become a reality; he believes that it is only a matter of time to learn the different permutations of road conditions. (Inverse)
- Lidar developer Innoviz raised $132 million. (Innoviz)
- Designated Driver showed off a six screen set up to remotely operate vehicles. (Wired)
- Aptiv is releasing a data set that includes labelled photographs and lidar traces, hoping that researchers will find novel ways to analyse the information. (Aptiv)
- Daimler Trucks purchased a majority stake in autonomous driving developer Torc Robotics. Daimler will continue working on proprietary self-driving software, and so will Torc. (Daimler)
- Electric motor developer Linear Labs raised $4.5 million. (Linear Labs)
- Toyota researchers suggested that battery ageing may have less to do with the charging cycle (the conventional wisdom) and could be more to do with variations in the manufacturing process. The firm sees promise in testing techniques that can grade batteries at the end of the production line and direct the highest performing units to higher revenue applications, plus improve OEM confidence in lifetime capability. (Toyota)
Connectivity
- Subaru, Nissan and Mazda joined a Japanese consortium working on an emergency collision reporting system. Honda and Toyota are already members. (Honda)
Other
- Bajaj Auto reportedly seems set to exchange its stake in the motorbike-making arm of KTM for a smaller stake in the parent company. (Autocar)
- Bicycle rental firm VeoRide says that, rather than being late to the game, it is benefitting by learning from the mistakes of all the failed bicycle rental firms that went before it. (VeoRide)
- A French parliamentary report suggested that changing over from internal combustions engines to electrification could cost €500 billion by 2040 – assuming the state continued generous subsidies; paid for charging stations to be built and failed to recover lost fuel duty. (Les Echos)
- US President Trump told UAW members that their leadership should support him more and the dues they are paying have been set too high. (Detroit Free Press)
- Mexico and Brazil concluded a free trade agreement for light vehicles. (Economic Times of India)
SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU
Find our archive here.