Category Archives: Automotive

Buying level 4 and 5 systems off the shelf, traditional OEM does an Uber and how autonomous vehicles could disrupt tyre supplies. Please enjoy our auto industry and mobility briefing for 28^th May to 3^rd June. A PDF version can be found here.

Favourite stories of the past week…?

• Let’s Push Things Forward — FCA effectively said at their capital markets day that there will be enough people selling decent autonomous kit by the early 2020s, so they needn’t bother with their own standalone effort. So why are so many others taking the time and effort? The self-driving space is full of teams demonstrating whizzy ways of doing things but there is virtually no agreement about fundamental ways of working safely and verifying performance. Perhaps technology has come far enough for OEMs to start concentrating on the type of technical standards they are good at?
• Two Can Play That Game — GM did a Tesla / Uber by turning an investment of several hundred million dollars into a valuation of several billion after agreeing to sell a stake in Cruise to SoftBank’s Vision Fund. This is the first example I can recall of OEMs really getting their head around the potential of valuation rather than short term returns; hopefully it won’t be the last because you can’t really take the likes of Uber on if you can’t recreate their business model (not saying it’s the best path, just that it should be an option). One thought though… have GM gone into the archives and looked at why EDS didn’t work out? There are some valuable lessons (hint: ego + misaligned incentives = bad stuff).
• New Rules — Michelin say that minimum tread depths are a silly way of choosing whether or not a tyre is legal because high quality worn tyres have better performance than brand new low quality ones. Subjective assessments by vested interests aside, this seems like a possible area for driverless vehicles to bring about a completely new way of doing things. If driverless cars just brake-tested themselves on a frequent basis to ensure they were still within limits, perhaps tyres could become the power-by-the-hour of the driverless world?

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

Find our archive here.

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News about the major automakers

Daimler ^(history)

• Invested in ride hailing firm Taxify as part of a $175 million round. (TechCrunch)
• German ministers are said to have threatened multi-billion euro fines in face to face meetings with company executives unless Daimler can show it acted improperly. (Handelsblatt)

FCA ^(history)

• Held a capital markets day where the company outlined a series of strategic actions to 2022.
  • Jeep hope to increase global share from just under 6% to over 8% by 2022 through a rollout of connected vehicles, incremental products (including an A/B sized Jeep) and a suite of new services under the banner of Jeep Wave. (FCA)
  • Ram see themselves as having outstanding customer loyalty but low transaction fees, despite good cab mix. The brand hopes new trucks will boost transaction prices to the level of the Ford F-150 and Ford Heavy Duty trucks. FCA also forecast a continued increase in US industry volumes. (FCA)
  • Maserati showed a modular spaceframe capable of accommodating PHEV and BEV and promised Tesla-shattering acceleration times. By 2022, BEV versions of all vehicles except a forthcoming D-sized SUV will be available. (FCA)
  • Alfa Romeo will launch two new SUVs, above and below Stelvio, and a series of new sports cars that appear derived from the PHEV version of the new Maserati Alfieri. The bran hopes to reach its original 400,000 unit per annum target (set in 2014) in 2022. (FCA)
  • FCA sees 2022 sales mix of 40% 48V and 20% PHEV / BEVs in EMEA, with only slightly lower figures for NAFTA and APAC regions.
• Agreed a deal with Waymo that will see it provide “up to” 62,000 Pacifica minivans. The two companies will also discuss an arrangement for FCA to sell Waymo-supplied autonomous features in retail vehicles. (FCA)
• CEO Marchionne said “all bets are off” if the demand becomes “white box” autonomous ride hailing vehicles rather than retail customers. He said he struggles to see which US competitor brands (read: non-premium) can survive a permanent switch to commoditised designs. (FCA)
• Admitted FCA got two things wrong with the Alfa Romeo revamp as planned in 2014: they underestimated the “industrial complexity” of launching a large product portfolio and underestimated the response and execution of German premium brands, in summary, CEO Marchionne said the firm’s expectations in 2014 were “totally misjudged” and that in the new plan, even by the mid-2020s Alfa’s margins would be lower than Jeep’s. (FCA)
• A question on a point in time for cost parity between ICE and BEVs left FCA executives stumped and reaching for their “crystal ball”, they finally settled on not before 2025, “best case”. (FCA)
• Said the retail market for autonomy will not progress beyond L3 systems for a long time and that L4/L5 systems will cost $10,000 and, if on sale before 2023, would not be automotive grade. (FCA)
• Seeking to create a captive finance company in the US, either from the ground-up or via acquisition. (FCA)

Ford ^(history)

• Ford’s strategy consultants explained the structure of the company’s mobility group. (Harvard Business Review)

Geely (includes Volvo) ^(history)

• LEVC unveiled a new van derived from the recently launched PHEV black cab. (Autocar)
• Announced an electrification strategy under the banner of Geely Intelligent Power, covering 48V, PHEV, BEV, alternate fuels and fuel cells. The company will launch a fuel cell vehicle by 2025 and “several” purely electric vehicles with a 500km+ range by 2020. Geely said it was aiming for a 15% fuel economy improvement from 48V, claiming it had “dared to do the impossible” (Magna have openly said 18% should be possible). (Geely)

General Motors ^(history)

• Announced it had sold a 19.6% stake in Cruise to SoftBank for $2.25 billion (performance dependent), valuing Cruise at $11.5 billion. GM will also invest a $1.1 billion, providing Cruise with almost $3.5 billion to prepare for the deployment of vehicles. (GM)
  • Implication: Through this transaction, GM has managed to create value in a way that mimics Tesla, Uber et al and so far has been beyond the capabilities of traditional OEMs. Given the Vision Fund’s ownership of stakes in a variety of ride hailing firms (including Uber, Didi, Grab and Ola), it seems likely that Cruise vehicles will be offered across networks, regardless of Cruise’s own plans for a service. The scope of the deal wasn’t completely clear — GM did not disclose the perimeter of Cruise’s own IP (presumably at least the AI and sensor suite, including Strobe lidar technology) versus what remains wholly owned by GM. The most likely open issue is the high definition mapping data GM has already generated via its Cadillac super cruise program.
• Extended eligibility criteria for its discount program for US military personnel to three years after discharge. (GM)
  • Implication: Although billed as a patriotic move, this has the hallmarks of under-the-radar additional incentive spending in the US market.

Hyundai / Kia ^(history)

• Considering creating a joint venture with one of South Korea’s municipal governments to make Hyundai models under contract and loosen demand on its own plants (and provide a hedge to labour disputes). (Yonhap)

Nissan (includes Mitsubishi) ^(history)

• Reportedly planning to cut production of Nissan vehicles by up to 20% in North America due to falling profitability. The cuts should have been fully implemented by the end of the year, without no redundancies forecast. (Reuters)

PSA (includes Opel/Vauxhall) ^(history)

• Reached a deal with German Opel unions that will see jobs guaranteed at three sites until 2023 and the sourcing of the Grandland X to Eisenach on a two-shift pattern from 2019. Unions have agreed that 3,700 staff can leave on a voluntary redundancy program (most have already signed up) and that wages will be frozen until at least 2020. Although forced redundancies are out of the question, the unspecified measures to improve competitiveness may not preclude more voluntary redundancy. (Opel)
• Will shed 500 temporary staff in Mulhouse after consolidating all production on a single line. (Usine Nouvelle)
• Faced allegations of price fixing for spare parts in cooperation with Renault. According to the claims, the two companies used Accenture as an intermediary, with the consulting company identifying areas where both companies could raise prices. PSA and Renault both denied wrongdoing. (Manager Magazin)
• Reportedly investing to increase petrol engine machining capacity at Douvrin. (Les Echos)

Renault ^(history)

• Will eliminate the third shift at two Spanish plants, Palencia and Valladolid, due to softening sales of Megane, Captur and Kadjar. 1,400 temporary workers will lose their jobs. (Europa Press)
• Started selling the battery for the Master and Kangoo electric commercial vehicles on a standalone basis. The 33kWh pack can be obtained for €7,400 (that’s €224 per kWh for a retail customer). (Renault)
• Faced allegations of price fixing for spare parts in cooperation with PSA. According to the claims, the two companies used Accenture as an intermediary, with the consulting company identifying areas where both companies could raise prices. PSA and Renault both denied wrongdoing. (Manager Magazin)

Tesla ^(history)

• A Model 3 teardown assessed the material costs of the Model 3 at $18,000, with a further $10,000 in production costs, indicating that gross profit margins in the 20%+ range are possible with efficient production. (Golem)

Toyota ^(history)

• Announced discussions with Denso that could result in all of Toyota’s production and manufacturing engineering activities for electronics being transferred to Denso. Toyota would continue with research and development of electronic components. (Toyota)
• Restructured its sales and marketing operations in Africa. Effective 1^st January, affiliate Toyota Tsusho will take over responsibility for all African markets (but not production assets in South Africa). (Toyota)

VW Group ^(history)

• The majority shareholder in Russian JV partner GAZ may sell some of their stake. (Bloomberg)
• Confirmed the Audi eTron will have video cameras instead of wing mirrors, with the output displayed on cabins in the vehicle. Although the brand pointed to the aerodynamic advantages, owners might bear in mind criticism of the VW XL1, where a similar configuration was said to be unintuitive. Happily, on the eTron, its just an option. (Audi)
• VW’s US dealers will start assisting service technicians on tricky jobs using a pair of glasses with a camera and an earpiece. A deskbound super expert can tell the technician what to do, and even project images onto a small screen in the technician’s eyeline. For a clearer understanding, watch the movie “Spy”. (Faconauto)
• Released a £118,688 Škoda Superb estate that is blast resistant. (Autocar)

Other

• NIO has reportedly filed documents with the SEC ahead of an IPO. (Bloomberg)
• StreetScooter opened its second factory saying it now has production capacity of 20,000 units per annum. (DHL)
• Mahindra opened a pick-up assembly facility in South Africa, aiming for 40% local content. (Mahindra)

News about other companies and trends

Economic / Political News

• US light vehicle SAAR for May 2018 of 16.81 million units was an increase of 1.4% on a year earlier. (Wards)
• Spanish passenger car registrations of 135,522 vehicles in May rose 7.2% year-over-year. (ANFAC)
• The EU’s industry commissioner said diesel cars “are finished” and will “completely disappear” soon. (Bloomberg)

Suppliers

• Michelin set itself a target of creating tyres that are fully recyclable by 2050, incorporating 80% sourcing of sustainable materials. (Europa Press)
• Metair is looking to acquire Slovenian low voltage car battery producer TAB for €300 million. (Business Day)
• Prevent has reportedly increased prices of components from its recently acquired Neue Halberg Guss foundry tenfold. Unions worry that the move could backfire and result in customers withdrawing business. (Der Spiegel)
• Affiliates of Ningbo Jifeng Auto are hoping to acquire Grammer for around €750 million. (Deal Street Asia)
• Electric driver maker Protean Electric raised $40 million for international growth. (Deal Street Asia)
• CATL will reportedly seek a valuation of around $8.5 billion in its forthcoming IPO. (Bloomberg)
• Liberty House received court approval for its takeover of wheel manufacturer AR Industries. (Usine Nouvelle)
• Autoliv and Veoneer held a pre-spin-off investment day. (Autoliv)
• Michelin held demonstrations to show that tyres with legal minimum tread depth had better braking performance than brand new, inferior quality, new tyres. The company argues that current rules around replacement do not always encourage safety. (Les Echos)
  • Implication: Although it may be difficult to ever move beyond minimum tread depth as a method of gauging safety for retail vehicles, there is a possibility that autonomous vehicles could operate to a self-certified performance basis (e.g. daily or weekly heavy braking tests) and then continue to run the same tyre so long as brake performance was upheld. This might give premium manufacturers a more compelling cost of ownership argument and help them improve share.
• Toyota announced discussions with Denso that could result in all of Toyota’s production and manufacturing engineering activities for electronics being transferred to Denso. Toyota would continue with research and development of electronic components. (Toyota)

Ride-Hailing, Car Sharing & Rental ^(history)

• Lyft is reportedly in talks to acquire Motivate, an operator of several high-profile bicycle rental schemes such as New York and San Francisco, the deal could cost $250 million. (The Information)
• Car rental firm Athlon unveiled a car sharing scheme called Car2Use and a flexible ownership scheme for employer-funded cars. (Journal Auto)
• At a rally shortly before an election, Turkey’s president declared Uber “finished” in the country after lobbying by traditional taxi drivers. (Engadget)
• Sixt’s founder said car sharing is “nothing but renting” and totally flexible rental where a car can be parked anywhere and left represents on a “very small segment”, suitable in only a few large cities. (Manager Magazin)
• The Bolloré-run Autolib car sharing scheme in Paris is reportedly forecasting losses of almost €300 million on a cumulative basis between 2018 and 2023. (Usine Nouvelle)
• Daimler and Didi Chuxing invested in ride hailing firm Taxify as part of a $175 million round. (TechCrunch)
• Car rental company DriiveMe offered a new service to ferry cars across Europe. Companies can choose from either a professional driver or a private driver (who benefits from a reduced rate car rental). (Europa Press)
• ComfortDelGro called off its acquisition of Uber’s Singaporean car rental firm. (Straits Times)

Driverless / Autonomy ^(history)

• FCA executives said the retail market for autonomy will not progress beyond L3 systems for a long time and that L4/L5 systems will cost $10,000 and, if on sale before 2023, would not be automotive grade. (FCA)

Electrification ^(history)

• Panasonic say they are working on a cobalt-free battery chemistry. (Inside EVs)
• Johnson Matthey said it would start production of a new low cobalt battery material called enhanced lithium nickel oxide from around 2021. (Reuters)
• Voltaiq, a maker of battery management software, raised $6.6. million. (Press release)
• Renault started selling the battery for the Master and Kangoo electric commercial vehicles on a standalone basis. The 33kWh pack can be obtained for €7,400 (that’s €224 per kWh for a retail customer). (Renault)
• A question on a point in time for cost parity between ICE and BEVs left FCA executives stumped and reaching for their “crystal ball”, they finally settled on not before 2025, “best case”. (FCA)

Connectivity

• MapBox and MobilEye are jointly developing a way to use the former’s location data to call off the latter’s high resolution road map as required, thus reducing data load for autonomous vehicles. (MapBox)

Other

• Electric scooter rental company Bird is reportedly raising $150 million in a round that will give the company a valuation of $1 billion. (TechCrunch)
• Bicycle sharing operator Hellobike raised $321 million, with substantial investment from Alibaba. (Deal Street Asia)
• Electric scooter rental firm Scoot is expanding to Spain and will offer electric bikes too. (Engadget)

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The future of manual transmissions, safer self-driving car tests and electric vehicle sales forecasts. Please enjoy our auto industry and mobility briefing for 21^st May to 27^th May. A PDF version can be found here.

Favourite stories of the past week…?

• Love Don’t Live Here Anymore — Toyota sold a majority stake in a manual transmission factory to Aisin Seiki. In a world full of commoditised internal combustion engines, hybrids and electric vehicles, the outlook for the manual transmission business is dim. The only hope seems to be low cost (read: low margin) vehicles in emerging markets. Why aren’t OEMs rushing for the exit?
• In The Air Tonight — Investigators released their preliminary report into the fatal crash of an Uber autonomous car and a pedestrian. Although the exact conclusions are still unknown, it seems likely that a series of best practice recommendations will emerge: no turning off OEM installed emergency systems (currently common practice); no turning off safety critical features just because they create unwanted false positives and greater reporting of near misses. If the pace of safety innovation is so dear to their hearts, why don’t self-driving programs just adopt these practices now before they are forced on them?
• Being Small Isn’t Bad At All — Honda are reportedly looking to produce 100,000 of their new electric city car per year. If Tesla think they can sell over 300,000 CD sized BEVs per year, VW think they can sell over 300,000 C sized BEVs, Daimler thinks Smart can go all electric and Honda (up until now a BEV sceptic) sees a market for 100,000 city cars, why are so many other brands just talking about BEVs as a product for regulatory compliance?

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

Find our archive here.

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News about the major automakers

BMW ^(history)

• Investing €300 million in its Liepzig, Germany, plant to increase annual capacity from 250,000 units to 300,000 units, as a part of the change, volumes of i3 and i8 models will rise from 130 units per day to 200 units per day. (BMW)

Daimler ^(history)

• Said it had been told to recall Vito vans by the German regulator but that it was disputing the basis of the order and would go to court if necessary. (Daimler)
• Reportedly under investigation for emissions violations on other vehicles that use the Vito’s small diesel engine shared with Renault; the company may be forced to recall up to 600,000 vehicles. (Der Spiegel)

FCA ^(history)

• Recalling over 5 million vehicles, 4.8 million of which are in the USA, to correct a fault that can lead to the driver being unable to cancel cruise control. (FCA)

Ford ^(history)

• Will build a second, as-yet unspecified, model at its Craiova, Romania plant. The investment for the new vehicle is around €200 million and 1,500 new jobs will be created. (Ford)

Geely (includes Volvo) ^(history)

• Increasing capacity for XC40 in both Europe and China saying demand for the car surpassed “even our highest expectations”. (Volvo)
• In a sign that preparations for Volvo’s IPO are hotting up, the company had an obligatory “life after Ford” article published. In particular, the decision to create a Volvo-specific architecture and powertrain line-up were praised as key pillars of the company’s renaissance; pedants will note the article says these actions were kicked off in 2008, when the company was still two years away from a sale to Geely. (Bloomberg)

Honda ^(history)

• Reportedly discussing production volumes of 100,000 units per year for an electric car battery supply contract with CATL — the undisclosed program bears all the hallmarks of the Honda Urban EV concept. (Electrek)

Hyundai / Kia ^(history)

• Launching a Hyundai in-car payment facility with assistance from Xevo. (Hyundai)
• Withdrew a group restructuring plan following hostility from activist investors. (Yonhap)

Nissan (includes Mitsubishi) ^(history)

• Carlos Ghosn said a merger of Renault and Nissan was unlikely before 2020. (Bloomberg)
• Alliance Ventures will invest in Maniv Mobility’s technology fund and aims to do a deal per month. (Reuters)

PSA (includes Opel/Vauxhall) ^(history)

• Opel’s German unions demanded production and employment guarantees until 2025 for all sites as the price for a wage freeze and increased productivity. (Les Echos)
• Improved the terms of its €3 billion revolving credit facility. (PSA)

Renault ^(history)

• CEO Ghosn said a merger of Renault and Nissan was unlikely before 2020. (Bloomberg)
• Alliance Ventures will invest in Maniv Mobility’s technology fund and aims to do a deal per month. (Reuters)

Suzuki

• Toyota and Suzuki announced projects that could soon become formal partnerships: an ultra-high efficiency powertrain and Toyota producing vehicles in India for both brands to sell locally and in emerging markets. (Toyota)

Tata (includes JLR) ^(history)

• Tata reported full year revenues of 294,243 Rs Cr (about $44 billion) for the 2017/18 fiscal year, an increase of 9% on a year earlier. PBT of 11,155 Rs Cr (about $1.7 billion) improved 20% YoY. (Tata)
• JLR reported financial results for the 2017/18 fiscal year. Revenue of £25.8 billion was up 6% on a year over year basis. PBT of £1.5 billion fell (5)% from a year earlier (and further if special items were excluded). Although many media reports attributed the lower profit to Brexit and diesel’s decline in Europe, JLR said it was mainly due to investment in new vehicles and technologies. (JLR)
• Confirmed the end of production for the Indica compact car. (Live Mint)
• JLR announced a series of management changes and a reorganisation of the sales function. (JLR)
• JLR’s venture arm invested in FATMAP, an outdoor activity planner. (JLR)

Tesla ^(history)

• CEO Musk, replying to questions on Twitter, said the $35,000 version of the Model 3 would begin shipping 3-6 months after the 5,000 units per week production threshold was reached. (The Verge)
• Updated the Model 3 braking system over the air following complaints from influential US reviewers Consumer Reports. (Engadget)
• Settling a lawsuit from owners who said Tesla had under-delivered on its promises for Autopilot for $5 million, affected owners will receive between $20 and $280, their lawyers will probably do better. (Reuters)
• Buoyed by registration figures from California which showed Model 3 at the top of the “Near Luxury” segment in Q1 2018, outselling both BMW 3 Series and Mercedes C-Class. (CNCDA)
• Announced a series of new hires to executive positions. (Tesla)

Toyota ^(history)

• Toyota and Suzuki announced projects that could soon become formal partnerships: an ultra-high efficiency powertrain and Toyota producing vehicles in India for both brands to sell locally and in emerging markets. (Toyota)
• Announced a deal for Aisin Seiki to take a majority stake in Toyota’s transmission factory in the Philippines, with a view to increasing sourcing to the plant. (Toyota)
• Expects to sell at least 30,000 fuel cell vehicles per year after 2020 and is installing additional capacity for fuel cell stacks to be ready for the anticipated demand. (Toyota)
• Said that, despite the Indian government’s apparent targets for all new vehicles to be electric by 2030, it would likely take until 2050 for infrastructure to improve sufficiently. (Times of India)
• Executives clarified that although Toyota will offer solid state batteries in the early 2020s, it won’t be “on a mass production basis”. (Wards)

VW Group ^(history)

• Seat’s chief executive said the brand’s new SUV was bring built at a VW plant because a separate assembly line could not be justified with annual volumes below 150,000 vehicles. He also believes that diesel engines have no future in city cars. (Handelsblatt)
• Porsche recalled around 2,000 wooden cars sold in North America because the wheels might fall off. (Porsche)
• Said it would “probably not” implement WLTP for all vehicles on sale by the cut-off with the result that some vehicles would be “temporarily unavailable” and production could be disrupted. (VW)
• Investigating “irregularities” in the homologation of VW Golfs sold in Ukraine recently. (VW)

Other

• VinFast will use EDAG to develop the company’s first electric vehicle. VinFast are also working with Pininfarina on the car designs. (Autocar)
• A Canadian business purchased a 10% stake in McLaren in a deal valuing the entire group at £2 billion. (McLaren)
• GFG Alliance said it was targeting around 30,000 units per year production from the factory it intends to build in Australia. (The Guardian)
• Aston Martin’s Q1 2018 revenues were £185.4 million with PBT of £2.8 million. Wholesales of 963 units were down from 1,203 units in the prior year; primarily due to the run out of old models. (Aston Martin)

News about other companies and trends

Economic / Political News

• The German environment minister said OEMs were morally obliged to retrofit systems that would improve diesel emissions but that there were no legal means to force such an action. She said the costs (for a Germany-only campaign) would be “in the low single digit millions”. (Reuters)
• China will relax import tariffs on cars from 25% to 15% effective 1^st July 2018. (Detroit Free Press)
• The US government will investigate the impact of car imports on national security, having employed a similar study to underpin tariffs on steel production. Given the net effect of exports from the USA (rather than figures concentrating on local production as a share of local consumption), and the lack of crossover between military and retail vehicle manufacturers or parts, a negative review would be quickly challenged by trading partners. (BBC)

Suppliers

• Autoliv’s board approved the spin-off of Veoneer, which will begin trading on 2^nd July 2018. (Autoliv)
• Faurecia announced an investment in thermal management start-up Promethient. (Faurecia)
• Mahle upped its stake in workshop equipment company BrainBee from 20% to 80%. (Mahle)
• Dana opened a new thermal management systems factory in Yancheng, China. (Dana)

Dealers

• Emerging markets online car sales company Frontier Car Group raised $89 million in funding. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental ^(history)

• Uber’s Q1 results showed net revenue of $2.5 billion, and a net loss of $(601) million, with gross bookings at $11.3 billion. (TechCrunch)
• Lyft’s COO said the driver base will “more than double” in the next five years. (CNBC)
• Uber announced its intention to run a mini-diesel scrappage scheme for its London fleet, seemingly in a bid to butter up the city authorities to grant a new licence. (Reuters)
• Uber will open a €20 million research centre in Paris, France to develop flying taxis. (The Guardian)
• Go-Jek said it would invest $500 million in an expansion across South East Asia, looking to fill the void left by Uber’s (Go Jek)

Driverless / Autonomy ^(history)

• Uber said it was closing its self-driving operations in Arizona, dismissing 300 employees. (AZ Central)
• The NTSB released a preliminary report into the fatal Uber crash. The report detailed that the pedestrian crossing the road was first detected about 120 metres ahead of the vehicle, although the vehicle AI was unable to identify them as a person (with a bicycle). It also emerged that Uber had deactivated its own emergency braking systems and was completely reliant on the driver to react to prevent an accident. (NTSB)
  • Implication: Whilst the exact conclusions of the NTSB’s full investigation are yet to be published, a fair stab can be made at the likely recommendations: No deactivation of original OEM emergency systems; no dependency on manual operators for emergency manoeuvres; greater transparency around incidents, potentially with near miss reporting similar to aircraft incidents.
• Apple is reportedly using VW’s ItalDesign factory to modify minbuses for use as autonomous vehicles on Apple’s campus. The same story also linked the company to self-driving developer Torc Robotics. (New York Times)
• Sony’s CEO refused to deny aspirations to develop cars. (Bloomberg)

Electrification ^(history)

• StreetScooter announced an order for 200 vehicles from a milk delivery firm. (Handelsblatt)
• Rivian Automotive announced $200 million in debt financing. (Rivian)
• BP invested $20 million in battery developer StoreDot (Daimler are already an investor). (Inside EVs)
• Honda is reportedly discussing production volumes of 100,000 units per year for an electric car battery supply contract with CATL — the undisclosed program bears all the hallmarks of the Honda Urban EV concept. (Electrek)
• Executives clarified that although Toyota will offer solid state batteries in the early 2020s, it won’t be “on a mass production basis”. (Wards)
• Chakratec, developers of chargers augmented by flywheels, rather than batteries, raised $4.4 million. (Charged EVs)

Connectivity

• Laird launched a Linux-based connected car platform called MAX. (Laird)

Other

• Bicycle rental firm Ofo has created different advertising locations on the vehicle, with mudguard, wheel, basket and saddle placement offered. (Technode)

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Volvo without diesel, Nissan taking the fight to Tesla, a retail price point for driverless systems and how Waymo do it. Please enjoy our auto industry and mobility briefing for 14^th May to 20^th May. A PDF version can be found here.

Favourite stories of the past week…?

• Follow Through — Volvo say they won’t put a diesel engine in the S60. Given that diesel accounted for around 2/3 of European sales of the outgoing model, it will be interesting to watch how well volumes hold up and what the customer reception is to the alternative powertrain offering.
• Give Me Everything — Nissan now offers a home energy solution complete with solar panels and battery storage. Interestingly, customers will be able to choose between brand new and second life batteries. Is this new product stretching too far from the core or an example of new business lines OEMs need to offer to build consumer confidence around EVs (and secure demand for used batteries)?
• Price Tag — This week both Mobileye and Roadstar.ai said the retail price of the self-driving systems they are developing will be under $8,000. That’s a bit cheaper than the $10,000 or so most were expecting (based on supplier wholesale price data from the likes of Aptiv). But how much take up will there be at that level? Mobileye also talked about their 2,000-strong team of data labelling analysts in Sri Lanka, less clear is how these efforts scale as self-driving becomes a reality. Will hordes of desk-bound ground truth inspectors become labour nightmare for these new asset light firms? What happens if they go on strike? Does the system just stop getting better or does it start to get worse?
• Method Man — Waymo’s detailed application to offer a driverless ride hailing service in California emerged. It includes some interesting details about the current operating model (for instance, no intention of using remote drivers) and vehicle capability (if the vehicle encounters anything other than good weather, light rain or fog, it will pull over and go no further). Enjoy reading with a hot beverage!

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

Find our archive here.

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News about the major automakers

BMW ^(history)

• Opened a new R&D centre in Beijing, China, with space for 200 personnel. (BMW)
• Became the first non-Chinese auto maker to receive an on-road autonomous vehicle testing permit in China. (BMW)
• Showed an outline sketch of the iNext vehicle, due in 2021 as an all-electric car with autonomous capability. BMW said a concept version would be presented later in the year. The outline implies a shooting brake or aggressively styled SUV. (BMW)

Daimler ^(history)

• Investing €500 million in the Hambach, France, plant to produce a new generation of all-electric Smart brand cars and a new compact Mercedes EQ model. (Daimler)
• Production at the Alabama, US plant was disrupted for several days by the fire at Meridian Magnesium. (Reuters)
• Unveiled a new range of smartphone covers and computer bags. Daimler refused to release profit or market share objectives for the new products. (Daimler)

FCA ^(history)

• Rumoured details of FCA’s new strategy, set for a 1^st June reveal, emerged. The company apparently plans to move small and mid-sized car production out of Italy, in part replaced by larger Jeep and Maserati products. The Fiat brand may shrink to only 500 and Panda derivatives (and presumably van-derived models). (Bloomberg)
• Internal emails turned over as evidence for diesel cheating court cases against FCA revealed supplier staff questioning FCA’s compliance approach and the CEO’s disapproval of a US spokesman’s comments in 2015, just after the VW diesel went public, saying that FCA was squeaky clean. (Reuters)
• Announced a recall of almost 49,000 SUVs to correct fuel supply problems. (FCA)
• The theft of eight new Ram pick-up trucks from an FCA compound set Detroit tongues wagging as clues pointed to an inside job. (Detroit Free Press)

Ferrari

• Announced a new CFO as the old one pursues “further career opportunities” (he’s off to Honeywell). (Ferrari)

Ford ^(history)

• Issued safety recalls for a small amount of pick ups to fix problems with parking brakes. (Ford)

Geely (includes Volvo) ^(history)

• Volvo said there will be no diesel version of the new S60 and the company “will no longer develop a new generation of diesel engines”. (Volvo)
• Volvo’s CEO said the company had sufficient funds to invest in electrification and autonomous vehicles with or without an IPO. (Reuters)
• Volvo’s CEO said plug-in hybrids were taking 15% of sales in vehicles where it was offered. The brand is targeting for 25% of sales (in certain markets) to use its subscription service “within five years”. He said that company was cutting back on ICE development, “you cannot invest money in even more advanced diesel engines and even more advanced gasoline engines… that money needs to go towards electrification”. (Automotive News)
  • Implication: In context, it appears likely he was referring to substantial architecture upgrades rather than any engine development (since “electrification” for Volvo includes 48V).

Hyundai / Kia ^(history)

• Hyundai’s Cradle venture fund invested an undisclosed amount in radar start-up Metawave. The company claims that its “next generation” radar can see over 150 metres with high resolution. (Hyundai)

Nissan (includes Mitsubishi) ^(history)

• Reported financial results for the 2017/18 year. Net sales of 11.95 trillion yen (about $110 billion) were up 2% on the prior year, operating income of 574.7 billion yen (about $5.2 billion) was down (22.6)%. In the coming financial year, Nissan expects sales to be slightly better but operating profit to decline slightly to 540 billion yen. (Nissan)
• Nissans CEO said there was no merger negotiation going on with Renault but acknowledged that the two companies continue to discuss their future relationship. (Les Echos)
• Announced a new CFO, their predecessor is retiring. (Nissan)
• Launched a new offering in the UK that provides solar panels, stationary storage and home energy management (potentially including vehicle charging). Customers will have a choice of either brand new or used electric vehicle batteries. (Nissan)
• The implied take rate of Nissan’s ProPILOT driver assistance technology suite is around between 20% – 25% on vehicles where it is offered. (Nissan)

PSA (includes Opel/Vauxhall) ^(history)

• Peugeot’s UK sales chief said the brand had “no real desire to get back into the real hot hatches”, expressing a preference for crossovers. He commented on the company’s emphasis on capital efficiency, citing RCZ as an example of the type of product PSA would no longer green light because, although “lovely to have for some of our motorsport fans”, due to small volumes the vehicle “would never make any money”. (Shropshire Star)
• Faurecia held a capital markets day, providing detailed 2020 financial targets and some outlook to 2030 for emerging sectors. By 2020, the company is aiming for €20 billion of revenue and operating margins of 8%. (Faurecia)
• Used car sales arm AramisAuto acquired Belgian company Cardoen for “tens of millions of euros”. (Les Echos)
• Announced some changes to the executive team, the VP for Eurasia was re-assigned to work for the Opel sales and marketing director, indicating either a massive demotion or a special projects role ahead of retirement. (PSA)
• In talks with French unions to increase the working week, from 35 hours to 37.5 hours in return for a 2.8% pay increase. Although PSA are only currently asking about one plant, unions fear setting a precedent. (France Info)
• Opel is shutting its national sales companies in Sweden and Denmark and will instead use an importer. (Opel)

Renault ^(history)

• Said Nissan’s Q1 2018 results would contribute €478 million to Renault’s net income. (Renault)

Tesla ^(history)

• Registered a new entity in China. Media reports speculated that this was for the company’s forthcoming Shanghai plant but Tesla refused to comment on the purpose of the new company. (Business Insider)
• Criticised for rejecting driver monitoring methods that might ensure drivers were paying attention when using the Autopilot system. CEO Musk clarified the systems were rejected on reliability, not cost, grounds. (The Verge)
• Will reportedly have a further weeklong stoppage at the end of May at Freemont to install machinery that will increase production capacity. (Reuters)
• Waiting times for brand new Model 3 orders have reportedly fallen from 18 months to 6 months. (Electrek)

Toyota ^(history)

• Announced a 400 million yen investment in big data company Albert, and a joint project to improve data for self-driving vehicles. (Toyota)
• Toyota AI Ventures invested in radar start-up Metawave’s $10 million round. The company claims that its “next generation” radar can see over 150 metres with high resolution. (Metawave)
• Will only sell hybrid versions of the Auris in Spain, stopping all diesel and gasoline ICE only models. (Europa Press)

VW Group ^(history)

• Porsche recalled 918 Spyders to fix issues with corrosion in the suspension. (Bloomberg)
• The VW brand confirmed that it won’t attend the Paris motor show this year. (Reuters)
• Started production of I3 gasoline engines at its Hungary engine plant. (VW)

Other

• Chinese OEM FAW will invest about $260 million in Byton. (Deal Street Asia)
• GAC Motor announced a new international division that will combine existing operations in the US with new offices in South America, Africa and the Middle East. (GAC Motor)
• Isuzu reported 2017/18 financial year results and issued a near term strategic update. The company is particularly keen to manage the transition to electrification at the same time as it believes traditional powertrain sales will continue to grow. It also wants to create new businesses that move it deeper into the logistics business. (Isuzu)

News about other companies and trends

Economic / Political News

• European passenger car registrations for April of 1,306,273 units, up 9.6% on a year over year basis. (ACEA),
• Autocar magazine collected comments from executives at assorted OEMs about the impact of moving to WLTP The consensus seemed to be that the impact to consumers would be the loss of engine types no one really cares about and perhaps some waiting list for less popular models as brands worked through testing backlogs (because WLTP tests items regarded as unimportant by NEDC). (Autocar)
• Data released by the EU showed vans sold in 2017 emitted on average 7.7 grams of CO₂ per km less than in 2016. The fleet is now only 6% / 9g away from the 2021 target. (EU)
• The EU said regulators in the UK, Germany, Italy and Luxembourg had been too lax in properly enforcing vehicle type approval rules. (Der Spiegel)
• A report in the USA said that keyless ignitions were responsible for dozens of deaths in the country because people were forgetting to turn off their cars when they got home and then inhaling carbon monoxide. (BBC)

Suppliers

• Indian supplier Precision Camshafts acquired 51% of Dutch electric drivetrain converter EMOSS. (Autocar)
• Denso invested in radar start-up Metawave’s $10 million round. The company claims that its “next generation” radar can see over 150 metres with high resolution. (Metawave)
• Cooper Standard acquired 80.1% of Korean supplier LS Mtron. (Autocar)
• Mobileye reportedly won a contract for 8 million EyeQ5 based driverless systems from 2021 onwards. (Reuters)
• Faurecia held a capital markets day, providing detailed 2020 financial targets and some outlook to 2030 for emerging sectors. By 2020, the company is aiming for €20 billion of revenue and operating margins of 8%. (Faurecia)
• Maxwell Technologies will supply ultracapacitors to Volvo and Geely for five, and possibly more, vehicles with shipments starting in 2019. Applications are 48V and plug-in hybrids. (Inside EVs)
• Continental increased its investment in head-up display company DigiLens, it now has an 18% stake. (Continental)

Dealers

• Profits rose at Spanish dealers in 2017, up from 1.88% to 1.9%. (Europa Press)

Ride-Hailing, Car Sharing & Rental ^(history)

• Speaking about flying taxis (but with implications for self-driivng cars) Uber’s CEO said in an interview that “we don’t know where the capital [to buy the vehicles] will come from, but we don’t think that this model necessitates our being the capital provider”. (The Verge)
• Chinese ride hailing firms Shouqi Limousine and e-driver signed a cooperation agreement to offer each other’s services on their respective apps. (Shouqi Limousine),
• Labour activists created an advert to bring attention to the pitfalls of the gig economy for ride hailing drivers. The campaign not only stars Pamela Anderson, it also features her analysis (and criticism) of the situation facing drivers. When the history of ride hailing is written, will this prove to be a decisive turning point? (Press Release)
• Drivers for Ola and Uber in India went on hunger strike demanding that the networks reduce their commission and stop adding new drivers. (Economic Times of India)
• Lyft claimed US market share of over 35% but others, including Uber sources, put the figure at under 30%. (CNBC)

Driverless / Autonomy ^(history)

• US / Chinese autonomous car start-up ai announced $128 million in funding and released a kit called Aries that it says enables L4 autonomous capability for under $8,000 per vehicle. (Roadstar.ai)
• Mobileye’s CEO put the retail cost of the company’s fully autonomous driving solution (mostly camera-based but apparently to eventually include some “backup” radar and lidar” at under $8,000. He also divulged some of the resources required to help AI develop, the company has a team of “more than 2,000” analysts in Sri Lanka labelling data collected by Mobileye sensors. (Bloomberg)
• Waymo’s detailed application for a Californian permit to operate self-driving vehicles in a limited commercial trial showed several interesting elements of their set-up. (Mark Harris)
  • Page 19 says Waymo does not currently have (or plan to use) remote operators to pilot the vehicle (indicating that in the event of a problem, operators will go to the vehicle).
  • Page 21 describes the geo-fenced area that the vehicles will be allowed to cover, including roads with speed limits of up to 65 mph (although it doesn’t say the vehicles will travel this fast) and that vehicles will operate in good weather, light rain and fog (indicating issues with other conditions, potentially for reasons of both sensor capability and vehicle control).
  • Page 22 says that in the event of bad road conditions or weather, vehicles will safely pull over, not try to complete their journey.
  • Page 24 shows Waymo’s proposed geofenced zone. Vehicles will only carry out journeys that start and end within the geofence.
• Hyundai’s Cradle venture fund, Toyota AI Ventures and Denso invested in radar start-up Metawave’s $10 million round. The company claims that its “next generation” radar can see over 150 metres with high resolution. (Metawave)
• The implied take rate of Nissan’s ProPILOT driver assistance technology suite is around between 20% – 25% on vehicles where it is offered. (Nissan)

Electrification ^(history)

• Arrival won a trial electric delivery van contract from UPS, adding to earlier orders from Royal Mail. (Journal Auto)
• Geely’s LEVC published the results of a study that showed taxi drivers experienced lower stress when driving an electrified vehicle. (LEVC)
• Nissan launched a new offering in the UK that provides solar panels, stationary storage and home energy management (potentially including vehicle charging). Customers will have a choice of either brand new or used electric vehicle batteries. (Nissan)

Other

• Nest’s connected home appliances system suffered an outage, resulting in users being able to only use devices by (gasp) touching them. This failure might be of interest to those looking at connected systems, bearing in mind that since Nest’s owner is Google, the expectation would be that the company’s infrastructure isn’t shabby. (The Verge)
• Electric scooter rental company Skip raised $6 million to start operations in Washington DC. (TechCrunch)

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Profiting from car data, connectivity the BYD way, personalised driverless cars and the difference between leasing and subscribing. Please enjoy our auto industry and mobility briefing for 7^th May to 13^th May. A PDF version can be found here.

Favourite stories of the past week…?

• Daydream Believer — Audi says that by 2025 they will have €1 billion in profits from digital services. Sounds brilliant, almost too good to be true. Speaking of which, where does this number come from? Presumably it’s supported by a €5 billion+ revenue figure (because in the future everyone is going to miraculously make 20% margins on this type of business, right)? Uber’s entire global revenue is about $10 billion per year, are Audi going to create a business of that size in seven years?
• Open Your Mind — BYD is going to allow third party developers to access the entire sensor set and control suite of the vehicle. Given that most OEMs won’t even let a third party app change the radio station, the possibilities are tremendous (and the cyber security consequences potentially nightmarish). If BYD and their partners succeed in creating novel products, Western OEMs will be left looking flat footed.
• Country House — GM think that customers will pay more to personalise their autonomous vehicles, pointing to rural areas as a bastion of the privately-owned vehicle. There’s only a couple of problems with that. Firstly… if these rural customers aren’t spending heavily on personalisation now, then where will they get the money to do it in a few years’ time? Secondly, GM’s bet that “rural” areas will be too big a nut for ride hailing to crack could be flawed. Only 9.5% of Americans live in areas with population densities below 50 people per square mile. Even at that relatively low level, marauding fleets of robo taxis could serve the population well.
• Never Gonna Let You Go — Consumer finance is continuing to gain share in the UK — now almost 90% of retail purchases are funded this way. Philosophically, is there much difference between possessing a car that you don’t own for three years and signing up for a “subscription” product that upgrades every so often? Has it got to the point where it is little more than pedantry and branding (and a role for the nearly-new cars)?

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

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News about the major automakers

BMW ^(history)

• The Rolls-Royce Cullinan SUV was revealed. The monster SUV features luxurious interiors, recycled TE Lawrence quotes, a hefty price tag and optional “activity modules”. (Rolls Royce)
• Rolls-Royce’s CEO said the new architecture underpinning Cullinan, but to be shared with other future models, is “ready for electrification and other changes as well”. (Autocar)
• Working on an electrification strategy that will involve three sizes of pack: 30e (60 kWh), 40e (90 kWh) and 50e (120 kWh) and two sizes of cell (one for cars and a taller one for SUVs). (Automotive News)
• Car sharing subsidiary ReachNow will end its free-floating service in Brooklyn, New York, citing high maintenance and damage costs. The company will continue the business model elsewhere, indicating ReachNow views the problems as location-specific. (GeekWire)
• Extended an existing recall in the UK after journalists revealed the problems were more prevalent than BMW had said. The number of affected vehicles rose from 36,410 to 312,000. (BBC)

Daimler ^(history)

• Became an investor in SoftBank’s Vision Fund. (Deal Street Asia)
• Released pictures of test mules for the EQC all-electric SUV, saying that it had around 200 vehicles under test ahead of the 2019 launch date. (Daimler)

FCA ^(history)

• Announced a recall of almost 240,000 SUVs to replace lower control arms. (FCA)
• CEO Marchionne met President Trump asking for an outcome that will “preserve a national program that drives continuous improvement” (i.e. stop California and others creating their own rules) that also “allows us to build vehicles customers want, at prices they can afford” (i.e. regulations that aren’t tough so we don’t have to pass on costs to consumers — or more likely — absorb them ourselves). (FCA)
• CEO Marchionne said proposed revisions to NAFTA local content rules would require the company to redirect some of the supply from its Mexican plants, but production would still go ahead. (Economic Times of India)

Ford ^(history)

• Had to shut three truck plants following a fire at Meridian Magnesium, a supplier of critical F-Series components. The company will reportedly have resourced the parts by the end of the week commencing 14^th May and said that full year earnings would not be affected, but remained tight-lipped on near term impacts, indicating a Q2 hit that will be recovered later in the year. (Ford)
• Chairman Bill Ford said the company is looking to make “fairly large” changes that “could” affect regions and/or functions. He also proclaimed himself “really pleased” with CEO Hackett’s learning curve. (News 18)

Geely (includes Volvo) ^(history)

• Geely has reportedly selected three investment banks to advise on an IPO for Volvo with a target valuation of $16 billion to $30 billion. (Bloomberg)
  • Implication: What does this mean for Geely’s stake in Daimler and Volvo Trucks? Is the Volvo sale to fund the acquisitions? Are these stakes meant to boost Volvo’s potential future value and then be sold off again later? Eight years after Geely purchased Volvo from Ford, the two companies seem less integrated than, for instance, Renault and Nissan.
• German financial regulators decided that Geely’s acquisition of a near-10% stake in Daimler did not meet disclosure rules. Although penalties for breach can be severe, Geely appeared to regard the regulator’s findings as a retrospective technicality, that in any case mean the stake should only have been disclosed a day earlier. (Reuters)
• Lotus’s CEO said that the company could continue using Toyota-sourced powertrains in vehicles under development, but implied Volvo will be the engine supplier for SUVs and crossovers and could take over as Lotus embraces electrification, although “there are some years left for combustion engines”. (Autocar)
• Having previously announced Google’s Android would underpin the next-generation Sensus infotainment system, Volvo confirmed that Google apps will be embedded by design and provide the same level of functionality as vehicles equipped with Android Auto, but not requiring an Android-equipped phone. (Volvo)
• Volvo cars will have data links with Volvo trucks (in Scandinavian countries) and share details of hazards and alerts encountered with the aim of improving emergency response and avoiding accidents. (Volvo)

General Motors ^(history)

• Announced the restructuring plan for its South Korean unit, which GM hopes will return to profit by 2019. Two new vehicles (an SUV and a crossover) and an I3 engine will be developed and manufactured there. (GM)
• South Korean government agencies were less bullish on GM’s turnaround plan for the country, saying a third party assessment forecast the unit would not be profitable until 2022. Even so, the government appeared happy enough to provide $750 million in funding for GM’s investment because it gains a 10 year veto over asset sales. (Reuters)
• GM’s strategy chief says that personalised autonomous cars will be “big business”, particularly for customers in rural areas where the company believes ride hailing will take a long time to propagate. May partner with “one company, several companies or no companies” for autonomous ride hailing, particularly influenced by the network effects the company has observed — GM believes that unless there is sufficient fleet density to deliver an on-demand ride within 5 minutes, customers will look elsewhere. GM is also looking at how to join up trips starting in a geo-fenced AV area but ending outside it. GM says it will take around 6 months to enter a new market with AVs. (GM)
  • Implication: GM’s strategy may turn out to be right, for the wrong reasons. Firstly, if rural customers cannot afford lavish customisation now, why will they be able to in the future? As yet, there isn’t any evidence these consumers will have the means to pay extravagant amounts for either autonomous vehicles or further embellishments. Secondly, “rural” areas are often nowhere near as sparsely populated as many imagine — only 9.5% of Americans (about 30 million people) live in areas with fewer than 50 people per square mile. A ride hailing vehicle placed in the theoretical centre of each square mile can still find plenty of business, and quickly respond to a ride request (only 0.7 miles from anywhere in the square — admittedly as the crow flies).

Hyundai / Kia ^(history)

• Reportedly having problems fulfilling orders for the Hyundai Ioniq in North America due to shortage of the outgoing battery pack. (Green Car Reports)

Mazda

• Announced a series of management changes, including naming Akira Marumoto as incoming-CEO. (Mazda)

Nissan (includes Mitsubishi) ^(history)

• Mitsubishi reported 2017/18 fiscal year financial results. Revenue of 2.2 trillion yen (~$20 billion) rose 15% on a year earlier whilst operating profit of 98 billion yen (~$900 million) was almost 20 times the prior year. (Mitsubishi)
• Plans to “discontinue diesel gradually from passenger cars at the time of each vehicle renewal”. (Reuters)

PSA (includes Opel/Vauxhall) ^(history)

• Opel’s works council agreed to allow workers already signed up for early separation to leave, subject to a cut-off date at the end of May, but younger workers will no longer be able to apply for the program. Opel’s CEO claims fixed costs have already been reduced by 17% from when PSA acquired the company. (Handelsblatt)
• Faurecia invested in wireless charging start-up Powersphyr. (Faurecia)
• Selected Punch Powertrain, suppliers of an integrated dual clutch transmissions and 48V motor, to provide electrified drivetrains, with a view to potentially in-sourcing production to a PSA plant. (PSA)
  • Implication: Choosing a solution where the 48V system is mounted on the transmission rather than the engine may be an elegant approach that saves PSA having to redesign the engine installation of all its vehicles (providing the new transmission fits in nicely)
• Opel will use a PSA-supplied connectivity package and phase out GM OnStar (only launched in vehicles recently) at the end of 2020. (Opel)
• Vauxhall and Opel are reportedly planning a hybrid-only sports hatchback “VXR” trim level. (Auto Express)
• Hopes to sell 90,000 508s each year (70% diesel mix), once the refreshed version comes out. (Les Echos)

Renault ^(history)

• CEO Ghosn said customers no longer suffer from range anxiety in electric cars “as long as you guarantee more than 300 km”. (Clean Technica)
• Simplified its line-up in the UK so that there are only three trim levels on major products (from lowest to highest): Play, Iconic and GT Line. (Autocar)

Tesla ^(history)

• Tesla’s top safety executive defected to Waymo and the head of engineering took a leave of absence. (Bloomberg)
• Initiated a company-wide ban on every individual third party contractor without “a Tesla employee putting their reputation on the line for them”. (Electrek)
  • Implication: As a statement of intent, these moves have a powerful impact. As a management tool, they will quickly become less than satisfactory — how will it be possible for Tesla to take on any individuals who lack a work history with Tesla employees? What may initially sound like a fantastic approach to productivity quality control can quickly tailspin into nepotism.
• Supplier orders indicate that Tesla has confidence in 5,000 per week Model 3 goal; a Chinese supplier of displays is reportedly preparing to ship 58,000 units in Q3. (Bloomberg)
  • Implication: Whilst potentially confirming that Tesla are on track, beware reading too much into long-lead items which Tesla has a high confidence in using anyway and needs to order to ensure supply, regardless of whether or not it can be certain of the near-term production schedule.

Toyota ^(history)

• Reported financial results for the 2017/18 fiscal year. Net revenue of 29.4 trillion yen (~$270 billion) was 6% better than the prior year, despite a small decline in wholesales. Operating income of 2.4 trillion yen (~$22 billion) was up 20% on 2016/17. Toyota said exchange was a big part of explaining both increases. (Toyota)

VW Group ^(history)

• Audi is targeting €1 billion in operating profit annually from digital services by 2025. The brand also expects the refreshed A7 and A8, along with Q8 and eTron SUVs to increase large car sales by 50% by 2022. (Audi)
• Recalling 2018 model year Polo small cars to correct problems with rear seat belts. (VW). The same problem also affects SEAT Ibiza and Arona models. (SEAT)
• Audi announced “irregularities” in the engine management software of V6 diesel engines. The company has halted sales of new vehicles and the circa 60,000 cars in private hands will receive an as-yet-undetermined upgrade. (Audi)
• The head of the Porsche SE board said in an interview that the VW Works Council should have a say in issues about employees but should not claim to co-manage the business. (Stern)
• New VW Group CEO Diess reportedly met with US diesel scandal investigators shortly before the indictment of former CEO Martin Winterkorn was issued, leading to speculation that he could have provided evidence that implicated Winterkorn. (Reuters)

Other

• Subaru reported 2017/18 financial year results. Revenue of 3.4 trillion yen (~$31 billion) was up 2.4% on a year earlier, operating income of 379 billion yen (~$3.5 billion) fell (7.6)%. (Subaru)
• Borgward launched two new models, the BX6 SUV and the all-electric BXi7 SUV. (Borgward)
• The CEO of Elio Motors said the company has 65,000 pre-orders for its intended 3 wheeled vehicle but requires significant capital (over $375 million) to bring the vehicle to market. (KSLA)

News about other companies and trends

Economic / Political News

• Chinese customs officials have reportedly been conducting “extra technical checks” on imported vehicles from the likes of Ford, BMW and Daimler in recent weeks. (Reuters)

Suppliers

• Meridian Magnesium Products suffered a plant fire, affecting production for several OEMs including Ford, FCA, GM, Audi and Mercedes. (Lansing State Journal)
• Magna announced financial results for Q1 2018. Revenue of $10.79 billion increased 21% on a year-over-year basis, adjusted EBIT of $875 million was up 7% YoY. (Magna)
• Delphi reported Q1 2018 revenue of $1.3 billion and operating income of $138 million. (Delphi)
• Bridgestone released financial results for Q1 2018, net sales of 859 billion yen were about flat, operating income of 99 billion yen was down (3.1)% on the prior year. (Bridgestone)
• Faurecia invested in wireless charging start-up Powersphyr. (Faurecia)
• Intel Capital invested in computer vision and machine learning firm Reconova. (Deal Street Asia)
• Continental reported revenue of €11 billion and adjusted EBIT of €1.1 billion for Q1 2018. (Continental)
• Clean Wave will supply electric motors and drive units for XING Mobility’s forthcoming supercar. (XING)
• Hyundai Mobis aims to produce its own digital screens; at present it integrates screens from Denso and Continental into instrument panels it assembles. (Yonhap)
• ZF will close its Friedrichshafen facility, Germany by the end of the year. (de)
• Schaeffler announced financial results for Q1 2018. Revenue was €3.6 billion and adjusted EBIT was €391 million. The firm will undergo a modest reorganisation, cutting 950 jobs globally, but says no sites will be closed. (Schaeffler)
• Magna opened a new aluminium casting facility in Telford, UK, under the Cosma banner. The anchor customer is JLR. (Magna)
• Continental signed an agreement with UFI Filters to sell UFI’s products in the aftermarket. (Continental)

Dealers

• Consumer finance in the UK has now reached 89.4% on retail sales over the last 12 months. (FLA)
  • Implication: For all the talk about subscription services being an emerging phenomenon, in some markets retail customers aren’t far from that reality, it just goes under a different name. Yes, there is a capital tie-up and, yes, the lock in periods are several years; but possession has supplanted ownership so comprehensively that perhaps customers are ready for something different.

Ride-Hailing, Car Sharing & Rental ^(history)

• UK bus company Go-Ahead will launch an on-demand minibus service using technology supplied by Via. (Reuters)
• Didi Chuxing suspended its car-pooling offering, Hitch, following the murder of a passenger. Although the suspect was not the Didi account holder, he appeared able to defeat the facial recognition software used by the company to verify the identity of riders and drivers. (China Money Network)
• Grab introduced a range of services for users with restricted mobility, called GrabAssist. The service costs more per mile and Grab takes a reduced commission (but for how long?). (Grab)
  • Implication: Since many business forecasts for on-demand mobility assume massive demand growth from users with restricted mobility, it will be interesting to see whether the new service catches on.
• Uber held a conference about flying taxis, saying its own offering would launch in 2023 and cost $5.73 per passenger mile, falling to $0.44 per mile at some unspecified future point. (TechCrunch)
• Japanese bus drivers in the city of Okayama went on strike. Unusually, rather than gather around burning dustbins in donkey jackets, the buses kept running but the drivers refused to collect fares. (BBC)
• Peer-to-peer car rental start-up SizeCar launched in Ukraine, saying the country lacked good rental options outside major cities. (Auto Rental News)
• Lyft reportedly has waiting lists to sign up to its monthly subscription service — for $200 you get 30 (up to $15) rides per month. (TechCrunch)
• BMW’s car sharing subsidiary ReachNow will end its free-floating service in Brooklyn, New York, citing high maintenance and damage costs. The company will continue the business model elsewhere, indicating ReachNow views the problems as location-specific. (GeekWire)

Driverless / Autonomy ^(history)

• Uber’s CEO said the company will resume testing autonomous vehicles in “the next few months, I don’t know”. Uber has reportedly determined that the decision software was at fault for the recent fatal crash; the car spotted the pedestrian but, under a protocol designed to reduce false positives, decided to continue its present course rather than swerve or avoid them. (The Information)
  • Implication: Although linked to decision making, the need for a false positive elimination is a symptom of inaccurate object recognition. If the report is correct, it appears that either Uber cannot create high confidence object recognition at higher speeds and longer ranges; or that it forgot to remove a workaround created for earlier testing. Read our analysis of why object recognition is harder than you think here.
• ai will offer a ride hailing service using autonomous vans starting this summer in Texas — the small number of vehicles in the fleet may hamper efforts to recruit customers. (Bloomberg)
• GM’s head of strategy said it will take around 6 months to learn a new city. (GM)

Electrification ^(history)

• Enel’s eMotorWerks unit announced a new charging product that balances electrical load using software and makes it easier for fleets to install additional charging units as the number of electric vehicles grows. (Enel)
• ElringKlinger will supply battery systems for Sono Motors, a start-up planning a city car augmented with solar charging. (Economic Times of India)
• Rolls-Royce’s CEO said the new architecture underpinning Cullinan, but to be shared with other future models, is “ready for electrification and other changes as well”. (Autocar)
• Fisker may change their plan for the EMotion sportscar and go back to solid state batteries at launch (having previously said they were switching from solid state to conventional LG cells). CEO Henrik Fisker said he was “pushing the team” to get the technology ready for a 2020 launch. (Inside EVs)
• Motorhome maker Winnebago and Motiv Power are creating a new electrified commercial vehicle platform with an expected range of 85 – 125 miles. Winnebago will also invest in Motiv Power. (Green Car Congress)
• Renault and Nissan will reportedly use batteries sourced from CATL for China-market BEVs. (Electrek)
• Nidec launched a 320 kW charger with an inbuilt 160 kWh battery that reduces grid drain to 50kW. (Inside EVs)
  • Implication: Fast chargers seem to be almost universally regarded as a necessary part of electrification infrastructure, yet in many locations the grid simply cannot supply the necessary power without substantial upgrade. Solutions such as this seem to offer the best of both worlds for small installations — given the cost of batteries, larger sites will probably justify getting the infrastructure sorted.
• Charging station supplier Clipper Creek has started offering used chargers. (Clipper Creek)

Connectivity

• BYD is launching a new platform that will give third parties access to the full gamut of in-vehicle sensors (341 by BYD’s count) and controls (66). (BYD)
  • Implication: Not only are BYD giving third parties access to the car (a rarity for most OEMs), they are allowing a much deeper relationship — far beyond interactions with only the in-car entertainment. BYD and their partners (presumably a lot of which will be Chinese) will benefit from the increased consumer insight the move will bring, and will gain a head start on developing technologies and solutions whilst other OEMs try to guard access to the vehicle (a move that may prove fruitless in the long run). If other Chinese OEMs follow BYD’s lead, this may also become an area where Chine leapfrogs the West.
• Having previously announced Google’s Android would underpin the next-generation Sensus infotainment system, Volvo confirmed that Google apps will be embedded by design and provide the same level of functionality as vehicles equipped with Android Auto, but not requiring an Android-equipped phone. (Volvo)
• Opel will use a PSA-supplied connectivity package and phase out GM OnStar (only launched in vehicles recently) at the end of 2020. (Opel)

Other

• Walmart said it was continuing on-demand grocery delivery, but would no longer use Lyft or Uber. (Reuters)

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The end of Tesla technology leadership, rumoured UK 2040 range requirements and PSA’s retail strategy. Please enjoy our auto industry and mobility briefing for 30^th April to 6^th May. A PDF version can be found here.

Favourite stories of the past week…?

• Gives You Hell — Whilst Tesla’s earnings call was much talked about for the CEO’s testy response to some questions, comments around charging seemed significant. Tesla has said it isn’t going to try to complete with 350 kW networks, citing trade-offs in design and battery lifetime. Sounds reasonable enough… except that the Tesla brand has been built on being the technology leader. It isn’t just an electric car company: it has the most widespread driver assistance program; fastest accelerating cars; best charging network and even if it was beaten into space, its car is furthest from Earth. Ceding bragging rights to rivals undermines the Tesla brand — owners won’t feel clever sitting at a supercharger for 30 minutes if the Mercedes driver is off in 15…
• Love Long Distance — The UK’s planned 2040 ban on pure combustion engines might go so far as to outlaw anything with an electric only range below 50 miles. Industry insiders were up in arms at the prospect of such technology being mandated in only 22 years’ time. But, the thing is, since this can be achieved by technology today, is it really so unreasonable to set these expectations for the future? Especially since we have no idea what effect new mobility offerings will have by then…
• Sell, Sell, Sell — Where others fear to tread, PSA is expanding its wholly-owned dealer network in the UK. Is this catch-up or are we going to see a PSA retail operation in a few years that looks more like Tesla’s than its rivals? PSA already has a big presence in used car sales and servicing, why not new car sales?

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

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News about the major automakers

BMW ^(history)

• Released financial results for Q1 2018. PBT of €3.165 billion was slightly down on Q1 2017, revenue of €22.7 billion was down (5.2)%. (BMW)
• Said that Minis produced in India have 50% local content and the company may start selling BMW PHEVs in the country if it can identify the right product. (Autocar)
• BMW developed an electric scooter that it might supply to third parties if it finds sufficient demand. (Autocar)

Daimler ^(history)

• Ceasing production of home storage batteries, saying that in future it will offer third party products more suited to stationary storage applications. Daimler intends to continue to supply used vehicle batteries for industrial storage units. (Manager Magazin)
• CEO Zetsche said the company has plans in place to resist a hostile takeover (whether by Geely or anyone else) but that the scenario was “theoretical”. (Automotive News)

FCA ^(history)

• Suffered production stoppages at the Brampton, Ontario plant because of supplier strikes. (Auto Evolution)

Ferrari

• Said production for 2018 and part of 2019 is almost sold out. (Bloomberg)
  • Implication: Not bad but still a little way from the late eighties glory days with 4 year waiting lists for the Testarossa.

Ford ^(history)

• Created a JV with existing low cost electric vehicle partner Zotye to create all-electric vehicles aimed at ride sharing fleets and drivers. (Ford)

Geely (includes Volvo) ^(history)

• Moody’s upgraded Volvo’s credit rating to Ba1. (Volvo)

General Motors ^(history)

• Autonomous vehicle AI provider Algolux raised $10 million, led by GM Ventures. (FINSMES)
• Said that 3D printing could reduce the weight of structural body components by 40%, whilst improving strength. The press release implied that GM intends to incorporate the technology into vehicles currently under development. (GM)

Nissan (includes Mitsubishi) ^(history)

• Renault CEO Ghosn said “nobody can answer this question” when asked whether Renault and Nissan would merge by 2022. He also said that “more than 95%” of vehicle content needs to be Chinese to be competitive in China and that this requires joint ventures. (Macau Business)

PSA (includes Opel/Vauxhall) ^(history)

• Opel’s CEO said the plan for the next generation Mokka X had been completely changed since the PSA takeover because the intended GM platform was “heavy and doesn’t offer electrification”. (Auto Express)
• CEO Tavares offered to share benchmarking data, including cost and operational details of PSA plants outside Germany, to convince German unions of the case for change. (Manager Magazin)
• Reportedly hired Tata Consulting to help it improve in low cost cars. The targets are said to be: 90% localisation and production costs 1/3 lower than the best Western plants. (Les Echos)
• Has merged its UK wholly owned dealers into a single company and is targeting further expansion into Vauxhall sites, recently buying four under the Go Vauxhall brand. (Vauxhall)

Renault ^(history)

• Renault CEO Ghosn said “nobody can answer this question” when asked whether Renault and Nissan would merge by 2022. He also said that “more than 95%” of vehicle content needs to be Chinese in order to be competitive in China and that this requires joint ventures. (Macau Business)

Tata (includes JLR) ^(history)

• Tata Motors is to sell its defence and aerospace division to Tata Advanced Systems. (Autocar)

Tesla ^(history)

• Announced financial results for the first quarter 2018. Tesla made a loss of $(784) million on revenues of $3.4 billion. Automotive revenue of $2.7 billion rose 19% on a year-over-year basis. (Tesla)
• Held an earnings call with CEO Musk in a combative mood, cutting off the analyst questions in favour of non-financial details. Although Musk did reveal that he is expecting Model 3 to get a 30%-40% share in premium sedans (cynics shouldn’t scoff about comparisons to non-existent segments, Musk is talking about 3-Series and C-Class, not Fusion and Malibu), unfortunately he refused to expand upon the “Customer Deposits” line in Tesla’s financial statements — a potential good news story which has grown substantially in recent quarters — indicating some support for Musk’s bullishness on Tesla’s offering (he said Semi reservations were about 2,000 units). (Seeking Alpha)
• After the call, Musk said he shouldn’t have ignored the analyst questions, but defended his actions on the basis that he believed they were trying to justify a short position (they weren’t). (Reuters)
• Said on the conference call that its best single hour production rate for Model 3 was equivalent to 5,000 units per week and that improvements in uptime will help it sustain that level soon — working a continuous shift pattern. Executives described operations with less intensive manning as “foolish”. CEO Musk also detailed several unremarkable cost and time saving ideas the company had implemented, describing a revolutionary way of listening to employees that sounded a lot like the decades-old idea of quality circles. Seasoned production hands will also be surprised to know that software is the biggest part of a successful production system.(Seeking Alpha)
  • Implication: It should be a concern that senior Tesla executives, who normally exhibit good command of detail were caught out by questions from Barclays are manufacturing line pacing and showed a clear misunderstanding of best in class levels or how they are measured. The CFO also said that depreciation per unit would be under $2,000 per unit at scale “well below most competitors” even though CapEx of 4% of (wholesale) revenue is becoming an industry norm, and $2,000 is 4% of $50,000 — quite above the average wholesale revenue of Model 3 competitors.
• CEO Musk said Tesla will “probably be ready by the end of next year” to enable autonomous peer-to-peer ride hailing services — but that regulators might not allow it at that stage. He also said that Tesla will begin publishing Autopilot performance data. (Seeking Alpha)
• CEO Musk said Model Y R&D and CapEx will only become “significant” in 2019 and that the vehicle will be a “manufacturing revolution”, with production due to start in early 2020. The production location will apparently be somewhere other than the Freemont factory but Tesla won’t decide where until later in 2018 (but it seems to be somewhere in China — perhaps near Shanghai). (Seeking Alpha)
  • Implication: With Tesla’s own volume forecasts of Model Y outstripping the Model 3 and its manufacturing capability underwhelming, it will be an impressive feat to create and recruit for a vehicle factory to produce an all-new design in less than two years — something I’m not sure I can recall a precedent for.
• When asked about 350 kW charging rates, Tesla indicated that in the near term, any upgrades to its facilities will be at around 200 – 250 MW, citing trade-offs between battery energy density and charging speed (whilst at the same time conceding it could design faster charging battery packs). Tesla also foresees new battery design reducing cobalt usage to “almost nothing”. (Seeking Alpha)

Toyota ^(history)

• Planning a new proving ground for driverless vehicles in Michigan. (Toyota)
• Investing C$1.4 billion, with C$100 million of government support, in its Ontario plants in order to increase production of RAV4. (CBC)

VW Group ^(history)

• New CEO Deiss said VW Group is still looking at the disposal of non-core assets, name-checking Ducati, Renk and MAN Diesel and Turbo as the targets of “future perspectives”. (Reuters)
• Reportedly working on an alliance with Didi Chuxing that would see VW run part of the fleet and develop purpose-built vehicles. (Reuters)
• The Škoda Karoq will be assembled at the former Harmann factory in Osnabrück, Germany. Škoda officials were keen to stress that the main production source will continue to be in the Czech Republic. (Manager Magazin)
• Bentley’s new CEO said the company needed to improve its strategy for connected, autonomous and electrified technologies and that he is revamping the cycle plan to include more electrification. He forecasts hybrid versions of the Bentayga will account for 10% of sales and the next car to get a similar treatment is “probably” the Flying Spur, with a decision to be made in the next six months. He suggested the brand would have a pure electric within the next five years. (Autocar)
• VW publicised its new “Lydia” pick-to-voice system, an alternative to established pick-to-light error proofing. The benefits are that less physical infrastructure is necessary since the production orders are relayed by a headset and wi-fi. The computerised voice chooses cute names for parts: apple and mango replace long part numbers. (VW)
• The US Department of Justice charged former VW CEO Martin Winterkorn over the diesel scandal. The charges involve conspiracy and wire fraud. (US Dept of Justice)
• Said that the transition to WLTP standards in Europe was the biggest single risk to its 2018 forecast. (VW)
• Perhaps in a deliberate stab at Tesla, Porsche detailed some of its in-process measurement techniques, noting the number of measurement points and issues such as the effect of the paint process on car body dimensions. (Porsche)
• Porsche family scion Wolfgang Porsche said he viewed nephew Ferdinand Oliver Porsche as his likely replacement at the head of Porsche SE (large shareholder in VW Group). (Manager Magazin)

Other

• Brabham unveiled the BT62, a £1 million track-only supercar. Production will be limited to 70 examples. (Autocar)
• SF Motors will open a large R&D facility in Silicon Valley in Q4 2018. (Teslerati)

News about other companies and trends

Economic / Political News

• US light vehicle industry for April was 17.07 million units, an improvement versus the prior year on a run rate basis. Year to date sales are now about flat with March and April making up for a subpar first two months. (Wards)
• Passenger car sales in Germany of 314,055 units were 8% higher on a year-over-year basis. (KBA)
• UK registrations of passenger cars and commercial vehicles rose in April, although on a year-to-date basis they remain down versus 2017. 167,911 new cars were sold, a year over year increase of 10.4% — partly reflecting 2 additional sales days. The local trade body was careful not to read too much into the results. (SMMT)
• Spain had 113,816 registrations of passenger in April, a 12.3% year-over-year increase. (ANFAC)
• Italian passenger car sales of 171,379 units were up 6.5% on the prior year. (UNRAE)
• Rumours that the UK’s 2040 ban on combustion engine vehicles would go so far as to specify a minimum electric-only range of 50 miles provoked outrage from the OEM trade body. Government press offices refused to comment on the specifics saying all would become clear once the policy was published. (BBC)

Suppliers

• Adient reported financial results for Q1 2018. Revenue was $4.6 billion and unadjusted EBIT was $(134) million — turning into a $252 million profit after adjustments. (Adient)
• Aptiv reported Q1 2018 financial results and the acquisition of cable maker KUM. Adjusted operating income was $427 million on revenues of $3.6 billion. (Aptiv)
• AAM released financial results for Q1 2018. Sales were $1.86 billion and net income was $89.4 million. (AAM)
• Bosch invested in deep learning computer vision firm ai. (Bosch)

Ride-Hailing, Car Sharing & Rental ^(history)

• Europcar acquired scooter rental firm Scooty. (Auto Rental News)
• VW is reportedly working on an alliance with Didi Chuxing that would see VW run part of the fleet and develop purpose-built vehicles. (Reuters)

Driverless / Autonomy ^(history)

• Aptiv and Lyft announced a fleet of 30 vehicles in Las Vegas, USA that will take part in a long term autonomous trial as part of a “multiyear agreement”. (Aptiv)
• Autonomous vehicle AI provider Algolux raised $10 million, led by GM Ventures. (FINSMES)
• A German-led study found that consumers were prepared to pay for autonomy, but not much. Only around 50% of respondents would part with more than €1,000 for the technology. The authors noted that this could be a lack of imagination on behalf of those surveyed and that technology demonstrations could change things. (Fraunhofer)
  • Implication: Although the willingness to pay might seem too low, it partially reflects the ability of customers to afford more expensive options (especially ones that they aren’t confident will work properly). With system costs likely to be in the thousands of dollars for many years, it is easier to see why autonomy is more of an immediate priority for fleets than retail customers.
• An MIT project is working on vehicles that do not require high quality maps and instead use (relatively) rough data about the surroundings to determine its route. (IEEE Spectrum)
  • Implication: although this may seem like a less optimal approach than using detailed maps, it may serve as a useful alternative that would be a good additional to a system using multiple artificial intelligence set ups to create redundancy.

Electrification ^(history)

• Daimler said it will buy batteries from CATL but declined to give volumes or name affected vehicles. (Handelsblatt)
• Battery maker EcoFlow raised $4 million and may raise a Series B this year. (Deal Street Asia)
• BMW is working with Sila Nanotechnologies on new battery materials that could increased battery storage capacity without needing new production lines. (Inside EVs)
• Daimler is ceasing production of home storage batteries, saying that in future it will offer third party products more suited to stationary storage applications. Daimler intends to continue to supply used vehicle batteries for industrial storage units. (Manager Magazin)

Connectivity

• A group of carmakers (BMW, Ford, GM and Renault) and suppliers created MOBI (Mobility Open Blockchain Initiative), to develop blockchain solutions for transactions and data management. (Press Release)
• Aeris will provide the underpinnings for connected Mitsubishi vehicles in North America. (Telematics News)
• Customers in the USA were surprised to find that they retained access to their vehicle months after selling them. VW says that in the terms of service, the onus is on the owner to disconnect themselves when they get rid of the vehicle, but is that enough? (The Verge)
• GPS verification firm Regulus Cyber emerged from stealth mode with $6.3 million of funding. (TechCrunch)

Other

• LimeBike is offering a new electric scooter, created by Segway, that boasts range of up to 35 miles. (TechCrunch)
• Washé, a start-up offering on-demand car washing, raised $3.5 million. (TechCrunch)
• Electric scooter and rickshaw maker Terra Motors announced $10 million in funding. (Economic Times of India)

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Volvo’s electric car claims, dangerous (self) driving, rising fleet CO₂ levels in Europe and Innoviz’s big win. Please enjoy our auto industry and mobility briefing for 23^rd April to 29^th April. A PDF version can be found here.

Favourite stories of the past week…?

• D’You Know What I Mean? — Volvo issued a press release saying they would have a 50% sales mix of electric vehicles by 2025. Wow! From virtually nil globally before 2020 to half of the vehicles shipped in just five years… but, hang on a second… on closer inspection the body of the piece only refers to China. In the long run are Volvo helping themselves with these PR gambits?
• Nowhere Man — A British man arrested for putting his vehicle in Autopilot on the motorway and then hopping in the passenger seat says he was “unlucky”. It speaks highly of the technology’s day-to-day performance that people can have such misplaced confidence in it but what happens when someone has a nasty accident involving a third party? Will the likes of Tesla, Mercedes or Audi find themselves in the dock, accused of not doing enough to prevent abuse of the system?
• It’s Getting Hot In Here — 2017 wasn’t a good year for fighting climate change in the EU. Average emissions rose because of customers fleeing diesel for gasoline (I know this has been rumoured for a while but now it’s official). Looks like plenty of product cost bad news for OEMs (and very little sympathy as they all crow about 8% EBIT margin targets for the early 2020s).
• One Vision — Magna and Innoviz won a contract from BMW to provide lidar for their first generation of self-driving vehicles. It could be a big deal: where BMW go, FCA (and Hyundai-Kia) could follow… Competitors might also want to ask themselves why their product wasn’t chosen (I’m pretty sure BMW have cast the net wide to begin with)… purely down to cost or are there reliability, accuracy and integration challenges they haven’t fully appreciated?

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

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News about the major automakers

BMW ^(history)

• Showed the iX3 concept in Beijing and said the vehicle will be produced in China. (BMW)

Daimler ^(history)

• Q1 2018 revenue of €39.8 billion was up 3% versus the prior year (damped by exchange). Group EBIT of €3.3 billion was down versus prior year which Daimler attributed to no-recurring special items.
• Ford C-Suite executives will have been choking on their cognac reading page 26 of Daimler’s Q1 earnings presentation which sported a near philosophically identical core-to-new-business relationship to Ford’s short-lived “infinity” symbol (as revenge, Ford might rip off slide 34 to explain their modular platform strategy — basically all modules across all platforms). (Daimler)
• BAIC Motor will raise $422 million through a sale of new shares. Daimler’s stake will be reduced from 10.08% to 9.55%. (Economic Times of India)

FCA ^(history)

• Reported financial results for Q1 2018. Revenue of €27.0 billion was down (2)% on a year-over-year basis, despite shipments increasing 7%. FCA blamed exchange rates. Adjusted EBIT of €1.6 billion was 5% better than prior year and the company’s net debt of €1.3 billion looks set to be eradicated by year end. (FCA)
• CEO Marchionne said that fines and penalties that would result from missing 2020+ EU CO₂ targets “need to be avoided like the black plague”. (Seeking Alpha)

Ford ^(history)

• Announced Q1 2018 financial results. Revenue of $42 billion was up 7% on a year-over-year basis. Ford called adjusted EBIT of $2.2 billion “solid”, despite a (10)% YoY drop which Ford said was all due to commodity costs. In a bid to mollify investors, the company pulled forward its target year for 8% EBIT margin to 2020. Ford also announced that by 2020 it will only sell two pure cars in North America: Mustang and the active version of the new Focus. The confirmation that the company will no longer offer Fusion in North America beyond 2020 (in line with previously leaked letters to suppliers) fuelled speculation about the future of the Mondeo in Europe (also mentioned in the leaked supplier letter). (Ford)
  • Implication: Although the reduction in the “car” portfolio attracted headlines, all but the largest SUVs migrated several years from body-on-frame architectures to unibody construction, blurring the historically relevant point of distinction (larger trucks remain body on frame)
• Executives said that the company would still offer “affordable” products in North America once it has phased out existing entry level products. (Detroit News)
• Announced a series of executive moves and external hires in Middle East, Africa and China. (Ford)
• Reportedly will not unveil full details of its “fitness” plan until September, after a planned July review with the company’s board. (New York Times)
• When production of the Taurus stops at the Chicago plant in 2020, Ford will begin building the Lincoln Aviator and expects that no redundancies will be necessary. (Chicago Tribune)

Geely (includes Volvo) ^(history)

• Volvo announced financial results for Q1 2018, sales and revenue were both up by over 14% but operating profit rose less strongly, by 3.6% on a year-over-year basis. Net income was down. (Volvo)
• Volvo announced that by 2025 it is targeting 50% of sales mix to be fully electric. The press release wasn’t clear on the exact nature of the goal — the context implied this was a China-market target for heavily electrified vehicles (BEVs and PHEVs) whilst the headlines read as though the intent is for global sales to be 50% BEVs. (Volvo)
• Geely’s design boss implied that Lotus will be launching more than one SUV. (Autocar)
• Established a JV for 6 speed automatic transmissions with Aisin. Geely is taking a 40% share in the factory which will have a capacity of 400,000 units per year. (China Daily)

General Motors ^(history)

• Reported Q1 2018 financial results. Revenue of $36.1 billion was down (3.1)% from prior year (excluding the loss of Opel / Vauxhall) and adjusted EBIT of $1.1 billion was down (58.7)%. The company mainly blamed planned production stoppages in North America to allow launch of a new range of pick up trucks. (GM)
• Launching an additional (third) shift — about 700 jobs — at Spring Hill from September 2018 in response to the popularity of the GMC Acadia and Cadillac XT5 products built there, reversing the elimination of the same shift about a year ago. (GM)

Honda ^(history)

• Released the results for the 2017/18 financial year. Revenue of 14 trillion yen (about $128 billion) was up 9% on a year earlier but profits were down — Honda explained this as a series of one-times: exchange; pension accounting and legal expenses. (Honda)
• Launched a China-market EV brand with JV partner GAC, called Everus. (Autocar)

Hyundai / Kia ^(history)

• Hyundai and KIA both reported financial results for Q1 2018. Hyundai saw revenue and profit drop, by (4)% and (45)% respectively. (Hyundai) KIA fared a bit better, revenue was down (2.2)% and operating profit dropped (20)%. (KIA). Taking both affiliates together, revenue was 35 tillion KRW ($32.7 billion) and operating profit was 987 billion KRW (about $920 million).
• The South Korean Fair Trade Commission appeared to side with Hyundai in an ongoing battle with an activist shareholder over the motor group’s structure. (Bloomberg)

Mazda

• Global production in Q1 2018 was 419,181 vehicles, an increase of 2.9% on the prior year. (Mazda)

Nissan (includes Mitsubishi) ^(history)

• Nissan Q1 2018 global sales totalled 1,496,573 vehicles, a (1.5)% drop versus a year earlier. (Nissan)
• Mitsubishi Q1 2018 global production totalled 378,489 units, an increase of 18% on Q1 2017. (Mitsubishi)
• Nissan’s CEO said there was “no merit” in a full merger with longtime partner Renault, citing unspecified “side effects”. (Economic Times of India)
• The Renault-Nissan-Mitsubishi alliance has joined Didi Chuxing’s project to increase availability of BEV and PHEV vehicles for ride sharing drivers. (Nissan)
• Showed the China-market only Sylphy electric vehicle, derived from the Leaf. (Nissan)

PSA (includes Opel/Vauxhall) ^(history)

• Reported Q1 2018 automotive vehicle division revenue of €15.1 billion, a 67% increase primarily due to the inclusion of Opel and Vauxhall. (PSA)
• Will switch some production of 5008 to Sochaux — partly because of the vehicle’s sales success but also to allow Rennes to create capacity for the C5 Aircross. (France Info)
• Opel’s works council withdrew its support for the German voluntary redundancy scheme, saying that Opel was trying to separate more people than had been agreed. Opel countered that if extra people wanted to join the scheme, the unions should not be blocking them. (Reuters)
• German regional politicians said that they were prepared to offer support for energy and property costs at German Opel plants, but would not submit to “blackmail”. (Reuters)
• In contrast to German Opel unions, British representatives of Vauxhall workers said their “focus” was on the long term future of factories in the UK as they agreed a relatively paltry pay rise — a £750 lump sum in 2018 and a 1.5% increase in 2019. (Reuters)
• Vauxhall has withdrawn diesel powered versions of the Corsa in the UK due to falling sales. (Autocar)
• PSA Chairman Louis Gallois said he will retire in 2020. (Les Echos)

Renault ^(history)

• Reported Q1 2018 revenues of €13.2 billion, about flat with the prior year. Registrations were up 4.8% from Q1 2017 to 935,041. Renault blamed exchange (stronger euro) for the difference. (Renault)
• The Renault-Nissan-Mitsubishi alliance has joined Didi Chuxing’s project to increase availability of BEV and PHEV vehicles for ride sharing drivers. (Nissan)
• Renault announced an agreement with IKEA in France to provide a fleet of vehicles for short term rental from IKEA stores. The plan is for all vehicles to be electric by 2020. (Renault)

Suzuki

• Reported Q1 global production of 897,993 units, an increase of 4.3% on a year-over-year basis. (Suzuki)

Tata (includes JLR) ^(history)

• When asked about all-electric Land Rover models, CEO Speth told journalists to “watch this space”. (Bloomberg)

Tesla ^(history)

• Lost a key electronics executive with Autopilot responsibility to Intel; the move appears to be focused on Intel’s core business rather than a defection to Intel’s self-driving effort. (Intel)

Toyota ^(history)

• Produced 2,658,940 vehicles worldwide in Q1 2018, a decrease of (1.8)% on the same period in 2017. (Toyota)
• Announced a battery electric C-HR as part of its 10 electrified vehicle portfolio for China. (Toyota)
• Unveiled the new Lexus ES. The car will be on sale from September 2018. (Toyota)
• Announced an investment of $170 million in the Mississippi factory to produce the new Corolla. (Toyota)
• Created a European mobility group in London with a plan to recruit between 35 and 50 team members. (Toyota)

VW Group ^(history)

• Announced financial results for Q1 2018. Although sales rose by about 6.1%, revenue was up only 3.6% and operating income of €4.2 billion was down (3.6)% on a year-over-year basis. The company blamed a change in accounting rules for derivatives for the profit drop. (VW)
• Audi is recalling 1.2 million cars globally to correct problems with coolant pumps. (Economic Times of India)
• Porsche’s Chinese market sales could reach 50% PHEV and BEV by 2025 according to sales executives. (Bloomberg)
• Introduced three new engines at a technical symposium: a 48V gasoline, a new natural gas powered engine and a mild hybrid diesel equipped with a 12V system. (VW)
• VW’s head of electrification said that the ID’s initial production volume will be 100,000 units per year when it launches in 2019 — the company has already said it will install capacity for around 330,000 vehicles for the ID range from 2020 onwards. (Ecomento)
• Announced an electrified vehicle brand for the Chinese market called SOL, in collaboration with joint venture partner JAC. The first product is a BEV SUV with a range of more than 300km. (VW)
• VW will only be allowed to increase their fleet of Moia vehicles in Hamburg from 500 to 1,000 if they can show that public transport has not been disrupted. (Manager Magazin)
• Audi announced a collaboration with Airbus’s Voom helicopter taxi business to offer a seamless door to door urban mobility service for the exceptionally well-heeled in traffic hotspots such as Mexico City. (Usine Nouvelle)

Other

• MG showed the near production-ready X-Motion concept SUV, a vehicle with a design that appears to have been significantly inspired by the Jaguar F-Pace. (Autocar)
• BAIC Motor will raise $422 million through a sale of new shares. Daimler’s stake will be reduced from 10.08% to 9.55%. (Economic Times of India)
• NIO showed a 2+2+2 version of the ES8 crossover, a 7 seater is still planned. (NIO)
• Elio Motors announced $2.5 million in fresh funding and a new cryptocurrency called the ElioCoin. (Elio Motors)

News about other companies and trends

Economic / Political News

• The EU said average emissions for passenger vehicles increased in 2017, confirming previous forecasts. The announcement is based on preliminary data — a final analysis will be released later in the year. (ACEA)

Suppliers

• Lear’s Q1 2018 revenue was $5.7 billion, up 15% on a year-over-year basis. Net income was $345 million. (Lear)
• Borg Warner reported revenue of $2.8 billion and operating income of $334 million in Q1 2018. (Borg Warner)
• Autoliv reported revenues of $2.8 billion in Q1 2018 and operating margin of 8.0%. (Autoliv)
• Valeo saw sales rise 3% year-over-year to €4.9 billion in Q1 2018. (Valeo)
• Denso reported financial results for its full fiscal year. Revenue of $48 billion was up 12.8% versus the prior year whilst operating profit of $4 billion rose 24.8% — Denso said cost reductions hada big effect. (Denso)
• Visteon announced Q1 2018 financials. Sales ($814 million) and net income rose slightly versus prior year. (Visteon)
• Plastic Omnium reported revenue of €1.9 billion in Q1 2018, up 2.8% on the prior year. (Plastic Omnium)
• Mahle reported full year financial results. Revenue was €12.8 billion and net income was €102 million. (Mahle)
• Michelin reported revenue of €5.2 billion in Q1 2018, down on the prior year due to stronger euro. (Michelin)
• Continental is considering a spin-off of its powertrain business. (Manager Magazin)
• Bosch announced a new exhaust gas recirculation (EGR) technology that it says can drastically reduce NOx emissions (Bosch claim a near 90% reduction from current levels but this recent study indicates several OEMs are already near to Bosch’s level). (Bosch)
• LG acquired lighting supplier ZKW Group in a €1.1 billion deal. (LG)
• Magna has created a joint venture for door modules in China with BHAP. (Magna)
• Chinese battery supplier Tianjin Lishen is reportedly planning a European sales office as it chases electric vehicle contracts with Daimler and VW. (Economic Times of India)

Ride-Hailing, Car Sharing & Rental ^(history)

• Didi Chuxing reportedly wants a valuation of between $70 billion and $80 billion in a forthcoming IPO. (CNBC)
• Didi Chuxing has created in-house teams to develop purpose-built vehicles, although the company also praised the knowledge of “traditional” OEMs. (Reuters)
• Uber’s COO said the firm was going to “double down” in India, Middle East and North Africa and is prepared to make “indefinite” investments in chosen regions. (Forbes)
• Go-Jek and ComfortDelGro are reportedly in talks to collaborate in the Singaporean market. (TechCrunch)
• Careem suffered a data breach in January in which hackers gained access to data on 14 million customers; their credit card and password information was spared. (Careem)
• Carpooling firm BlaBlaCar acquired smaller rival Less. (TechCrunch)
• Peer to peer car rental start-up HiyaCar raised more than £1 million in a crowdfunding drive. (Crowdfund Insider)
• The Renault-Nissan-Mitsubishi alliance has joined Didi Chuxing’s project to increase availability of BEV and PHEV vehicles for ride sharing drivers. (Nissan)

Driverless / Autonomy ^(history)

• A British Tesla owner was convicted of dangerous driving after putting his vehicle on Autopilot and climbing into the passenger seat whilst on a motorway. The owner told police he was the “unlucky one who got caught”. (BBC)
  • Implication: The driver in question is a perfect example of over-confident owners who misunderstand the capability of their ADAS equipped vehicles. The driver’s remarks after getting stopped are very worrying and the stunt indicates that Tesla’s efforts to stop abuse of the L2 system are failing. Will their come a time when the manufacturer is accused of negligence for giving people a system that they can misuse?
• BMW will use a solid state lidar sourced from Innoviz and Magna for autonomous vehicles — by extension, presumably FCA vehicles will too; given that they are developing a shared self-driving platform. If rumours are to be believed then you can add Hyundai-Kia to the list too. (Magna)
• Self-driving start-up Voyage announced an open source safety library comprising code and scenarios. The company hopes it can become a widely-used foundation for autonomous vehicle software. (Voyage)

Electrification ^(history)

• Solid state battery supplier Ionic Materials announced that including the (previously announced) investment from Renault-Nissan-Mitsubishi, it raised $65 million in its latest round. (Inside EVs)
• Dana launched a series of powertrain modules aimed at off-highway applications. (Dana)

Connectivity

• Amazon has partnered with GM and Volvo to offer deliveries into the boot / trunk of owners’ cars in select US cities. GM CEO Mary Barra suggested that Amazon was paying GM for each delivery made. (Bloomberg)
• Savari raised $12 million to develop V2X solutions. (Xconomy)
• ZF joined the eSync open platform for over the air updates. (ZF)

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PSA restructuring strategy, Tesla’s tolerance of failure, Porsche diversification and Waymo just wants to drive cars, not make them. Please enjoy our auto industry and mobility briefing for 16^th April to 22^nd April. A PDF version can be found here.

Favourite stories of the past week…?

• Killing Me Softly — PSA is offering to keep German factories open but wants to reduce the work that goes on there. Unhappy unions are fighting back but they should respect PSA’s secret sauce for labour reductions in Europe: rather than shooting for the whole cost save of shutting a plant entirely and devoting the management team’s energy to getting a single closure, PSA take the marginal gains of removing shifts and cutting cost whilst bearing some remaining under-utilised overhead. It isn’t as clean as a business school case study but unions and politicians have a harder time fighting plant closures when the plant isn’t actually closing. “Shift reductions” just doesn’t have the same ring to it in the public psyche.
• Nothing Compares 2U — Tesla is aiming for Model 3 to have tolerances 10 times better than any other vehicle. But what does it all mean? Has the company got tolerance stacks disastrously wrong and can’t meet the target range it has set or are Tesla intending to redesign all the parts at some future point to tighten tolerances? Drastic changes in tolerance while in series production can quickly become disruptive and involve massive inventory losses if mishandled. Do Tesla have an amazing new way of working up their sleeve or is this something that is supposed to sound good when “leaked” to the press? A third possibility… Tesla botched their location strategy execution and executives have told Musk the tolerance stack is to blame for the automated production failures, when it is really a location pin accuracy and machine calibration problem.
• Honey To The B — Porsche is installing additional production capacity to achieve 1,000kg of honey annually at its Leipzig plant. After Porsche’s entry into the salt and pepper mill market that was long the preserve of Peugeot, surely this demands a response from the French? Might I recommend a range of Groupe PSA baguettes as a delicious way to achieve automotive breakfast duopoly rather than all-out war for honey domination?
• Nevermind — Waymo’s CEO says the firm isn’t trying to become an OEM. Strategic sleight of hand or a sign that Google is truly interested in licencing the technology at a fair price to anyone who wants to use it?

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

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News about the major automakers

BMW ^(history)

• Investing €10 million in a new research centre for additive manufacturing technologies. (BMW)
• Held an event to demonstrate the company’s emerging technologies and talked about its D-ACES strategy (design augments the now ubiquitous autonomous, connected, electrified and services elements). (BMW)
• Said that it does not “exclude other partners” from the mobility joint venture with Daimler. (Manager Magazin)

Daimler ^(history)

• Reportedly interested in selling powertrain to Volvo and may even be open to buying a small stake in the company to show willingness to work with Geely. (Manager Magazin)
• Images of the Maybach SUV (a likely Bentayaga rival) leaked. (Autocar)
• BMW said it does not “exclude other partners” from the mobility joint venture with Daimler. (Manager Magazin)

Ford ^(history)

• Will extend layoffs at the Valencia engine factory due to delays in the new Maverick engine. (Europa Press)
• Wamyo’s CEO criticised Ford’s executive culture saying that when he worked there “it was the greatest collection of clever people who couldn’t work out how to get on”. (Autocar)
• Launched a non-emergency medical transport service called GoRide. (Ford)

Geely (includes Volvo)

• Geely’s CEO called for cooperation between carmakers, especially with regard to “proprietary digital platforms” and warned of the dangers of “silos”. (Bloomberg)
• Daimler is reportedly interested in selling powertrain to Volvo and may even be open to buying a small stake in the company to show willingness to work with Geely. (Manager Magazin)

General Motors ^(history)

• GM Korea won significant concessions from unions and additional government funding in last-ditch negotiations, with the threat of bankruptcy looming. (Reuters)
• Announced a new credit facility that maintains the $14.5 billion available to the automotive division and creates a new $2 billion 364-day agreement to be used by GM Financial. (GM)
• The head of the Cadillac brand abruptly resigned, citing “philosophical differences”. (Bloomberg)
• Revealed the all-electric Buick Enspire concept in China, previewing a likely forthcoming new model. (Electrek)

Nissan (includes Mitsubishi)

• Launching a voluntary redundancy program at its Sunderland, UK plant, aiming for “hundreds” of takers. Nissan called the program “short term”. (The Guardian)

PSA (includes Opel/Vauxhall) ^(history)

• Opel has terminated all its dealer contracts in Europe but promised that the main intention was new terms rather than a cull. In Germany Opel said it only wanted to shut 12 out of 385 dealers. (Handelsblatt)
• Opel’s head union representative in Germany said he was comfortable that the company can reach a proposed 3,700 target for job reductions but that there was insufficient clarity on post-2020 production and job guarantees. (Reuters)
• German unions were up in arms over PSA proposals for German factories. Consistent with the recent approach in France, PSA has avoided full plant closures but does intend to reduce workload. At the Eisenach plant, the company wants to end production of Corsa and Adam; at the Kaiserslautern engine factory, PSA wants to end machining. Unions say both actions would reduce staffing at the affected plants by around half. The company has responded by saying staff costs in German factories are double those of France. (Der Spiegel)
• PSA executives met with German government ministers, promising to invest in the country if “performance conditions are met” and pointed to the agreements with unions in all other Opel / Vauxhall locations. (PSA)
• The head of Vauxhall said that although the dealer body is being reduced by a third “nobody is being sacked”. (BBC)

Renault ^(history)

• Launched a redundancy plan (given the “stable European market”), offset with promises of new jobs for 5,000 young (and cheap) workers. (Renault)

Tata (includes JLR)

• Land Rover is reportedly planning to launch a 4.1m long SUV (Renault Captur territory) but hasn’t decided the market positioning. (Autocar)
• Detailed the employee cuts and transfers that were reported last week: 1,000 agency positions will go at the Solihull plant, partially backfilled by 392 transfers from Castle Bromwich. (Sky News)

Tesla ^(history)

• After another short shutdown to increase Model 3 capacity, CEO Musk wrote a letter to employees calling for a demonstration of 6,000 units per week capacity — not by producing 6,000 units in a week but by producing 850 units in a 24 hours period. Musk also detailed a series of actions under the banners of precision and profit, including a distinctly old-world rule where all expenditure above $1 million will have to be personally approved by him. (Electrek)
  • Implication: Musk’s email seems designed for external release. The call for design tolerances to be “a factor of ten better than any other car” and prove measuring tapes wrong implies design tolerances of hundreds and thousands of a millimetre — the realm of precision machining. This presumably is because Tesla’s push for automation has failed due to insufficiently tight tolerancing but the value of the improvement may not prove to be worth the trip is Tesla has to use far more expensive machinery (it could achieve those tolerances right now if it simply machined the Model 3 out of a solid billet of metal or threw away parts outside a tight set of nominals (almost certainly 50%+). This perhaps demonstrates a lack of imagination from Tesla in how to work within process capabilities, unless Musk has learned from Space X that things can be done differently..?
• Issued a detailed rebuttal of criticisms about the safety standards at its factories. (Tesla)

Toyota ^(history)

• Will begin offering V2X capable vehicles in the US from 2021 onwards with a view to adoption on “most” of the portfolio by the mid-2020s. (Toyota)

VW Group ^(history)

• VW’s works council chief criticised the company’s high rate of development spending saying, “sometimes it is almost like an internal competition to see who can spend the most”. Whilst he welcomed the appointment of new CEO Diess, he also appears determined to reopen the debate on VW producing its own battery cells. (Manager Magazin)
• The Truck division CFO said taking over US company Navistar “would make sense at some point”. (Reuters)
• Announced it would grow its software development operation in Lisbon, Portugal to 300 people. (VW)
• Porsche offices were raided as Dieselgate refused to fade away — several top managers were apparently the focus of the investigation. (Manager Magazin)
• Porsche announced that it was doubling the number of bees at its Liepzig site, allowing a 250% increase in honey production, to 1,000kg annually, apparently spurred by the high sales rate of its original harvest and the potential as a hedge against the decline in diesel sales. (Porsche)
• Launched a service called Porsche Flex in Italy that allows owners to choose a combination of vehicles that can be used on set days of the week. (Porsche)
• VW Group sold 2.7 million units in Q1 2018, an increase of 7.4% on a year-over-year basis. (VW)

Other

• Byton revealed an “85% there” version of its SUV and said it is will show its saloon in June. (Autocar)
• FAW invested a “significant amount” in Byton. (Deal Street Asia)

News about other companies and trends

Economic / Political News

• March passenger car registrations in Europe were 1,792,599, a drop of (5.3)% on a year-over-year basis. (ACEA)
• China said it intends to phase out the caps on foreign ownership by 2022, with earlier relaxation for companies making vehicles with in-demand technology. It wasn’t entirely clear whether the changes are set in stone or are positioned with the threat of withdrawal as part of US-China trade sabre-rattling. (Reuters)

Suppliers

• Continental gave a profits warning, citing surprise exchange rate and inventory effects. (Continental)
• Denso invested $1.5 million to buy a 14.88% stake in mobility as a service platform provider On The Road. (Denso)
• Honeywell reported Q1 results, both profits and revenue were up year-on-year and the company increased its guidance for the full year. (Honeywell)
• Magna opened a new body sub-assembly plant in Mexico supplying BMW and Mercedes. When fully operational it will have 1,000 employees. (Magna)

Dealers

• A survey of prospective car buyers in the UK found that only 12% are considering a diesel vehicle for their next purchase. (Autocar)
• US online used car platform Carvana purchased Car360, a start-up that helps owners take slicker images of the car they are selling. (Venture Beat)

Ride-Hailing, Car Sharing & Rental ^(history)

• Lyft said it would purchase carbon offsets to match the rides taken on its network. The company believes “in future all vehicles will operate with clean energy” and says the scheme makes it one of the largest purchasers of such credits in the world. (Lyft)
• Via and Mobike now offer a subscription package covering ride hailing and bike sharing in Washington. (Via)
• ComfortDelGro said it would purchase London taxi operator Dial-a-Cab. (Deal Street Asia)
  • Implication: At a price of £1.2 million for a fleet of 1,100 cabs, this deal looks like far better value for money as a way to capture share than throwing cash at discounts and marketing?
• Car sharing firm Turo said it had added $12 million in funding, taking its latest round to $104 million. (TechCrunch)
• Moovn expanding its ride hailing service from launch city Seattle to a further five US cities. (Geekwire)
• BMW said it does not “exclude other partners” from the mobility joint venture with Daimler. (Manager Magazin)

Driverless / Autonomy ^(history)

• Waymo’s CEO said that the company “might disrupt the utilitarian market” and explained the company’s “Firefly” program of self-built cars as a way to exploit a short-lived loophole in testing regulations, rather than an attempt to become an OEM itself, saying he “wasn’t aware of” any longer term goal for Waymo to make its own cars. (Autocar)
• Local Motors announced a collaboration with Robotic Research, a company with past experience in automating systems and vehicles for military applications. (Local Motors)
• Alibaba’s CEO said the company had done “a lot of research on driverless things”, sparking speculation about what they might have in mind. (Yahoo)
• Uber says it has a way to improve the accuracy of GPS in areas with high rise buildings: rather than being confused by the weak signals from satellites, it identifies “negative information” and fills in the obscured trace. (The Verge)

Electrification ^(history)

• Hubject and Daimler announced a successful pilot scheme where the vehicle and charging point exchange encrypted certificates through the charging lead, enabling payment to be made remotely. (Hubject)
  • Implication: Shell and GM announced that you will be able to pay for fuel directly from the car’s dashboard at participating garages, using the Marketplace app. (Detroit News). One of the major bugbears for EV users is the huge spectrum of charging companies, each with their own unique payment routines. These two announcements should get EV sellers thinking seriously about why it is so hard to pay for what many consider to be “living in the future”.
• Indian ride hailing company Ola set a target of 1 million EVs in its fleet, including mini vehicles, by 2021. (Autocar)
• A long list of OEMs are reportedly in talks with VW-BMW-Daimler-Ford European charging network Ionity to join the network. Those listed include Volvo, FCA, PSA, JLR and Tesla. (Sued Deutsche)
• Indian firm Sun Mobility opened a battery swapping station for electric bikes and mini vehicles in Bengaluru, with plans to expand the network across India. (Economic Times of India)
• Following reports that Dyson had relinquished solid state battery patents, seemingly contradicting its prior battery strategy, the company said the patents involved had been replaced with “better” technology and the move reflected the need for the specific patterns, rather than a turn away from solid state. (Green Car Reports)

Other

• Electric scooter rental service Bird said it had completed one million rides across seven US cities. (Bird)
• Scooter rental start-up Vogo is reportedly in talks with ride hailing firm Ola to raise investment. (Deal Street Asia)
• NIO Capital is reportedly close to closing $500 million in funding for automotive investments. (Bloomberg)
• Hyperloop said it has won a contract to create a 10km track in Abu Dhabi. (Hyperloop)

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Uber’s strategy, Tesla manufacturing, Ford macroeconomic strategy and PSA’s electrification plan. Please enjoy our auto industry and mobility briefing for 9^th April to 15^th April. A PDF version can be found here.

Favourite stories of the past week…?

• Jump Around — Uber is seemingly going to be the Amazon of transport. Car, bike, train, and if its futurists are to be believed, plane (quadcopter). But will investors have an Amazon-esque patience with the company’s profitability? Amazon justified faith on the basis that it demonstrated and maintained profits from sectors it had attacked for ages but then reinvested into new areas. That isn’t the same as throwing good money after bad.
• Domo Arigato, Mr Roboto — Tesla used too many robots and has a newfound faith in humanity. At what point does Elon Musk stop offering car industry truisms dressed up as insights? Tesla has a gauging lab that measures things accurately… just like everyone else does. Tesla found out that automated conveyors can get in the way if the system isn’t slick enough (or….surely not… the tolerance stack has been worked out incorrectly)… as everyone else already knew. Tesla has many refreshing ideas about product and sales model but what is with the repeated “baby out with the bathwater” insistence on doing things differently, seemingly for the sake of it? Also, is it just me, or did news of Model Y procurement for a late 2019 launch come along at a conveniently distracting time?
• Mad World — Ford would never be “daft” enough to exit Europe and isn’t putting much effort into looking at how to mitigate a potential US and China trade war, since it “might not happen”. Fail to plan, plan to fail.
• You Spin My Head Right Round — Carlos Tavares wants to know who is responsible for developing the “360-degree view” of the electric vehicle ecosystem. Erm… fancy looking in the mirror? Carmakers might not like the answer but if they want to lead then they can build the coalitions necessary to make electric car ownership a delight rather than burden. Waiting for others to do it for you could be risky: customers might forgive you, or could come to see you as a laggard — Windows phone, anyone?

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

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News about the major automakers

BMW ^(history)

• Sold 604,629 vehicles in Q1 2018, an increase of 3% on the prior year. Europe was up 1%, most of the growth came from Asia and the Americas. (BMW)
• BMW iVentures invested in high resolution labelled map company Mapillary, citing the need for an “independent provider of street-level imagery”. (VentureBeat)

Daimler ^(history)

• Mercedes executives said the brand is planning an all-electric luxury car at the same level as the S-Class. (Autocar)
• Said that car sharing is “decisive” in the take-up of electric vehicles. (Daimler)

FCA ^(history)

• CEO Marchionne said the cost of making diesels reach new standards is “going to become prohibitive” and repeated that FCA’s strategy was to end production of diesel cars after 2022. (Autocar)
• CEO Marchionne said the company will have the highest North American profits “by far” but “when it happens… I can’t tell you.”. (Bloomberg)
• Released their 2017 sustainability report. (FCA)

Ferrari

• CEO Marchionne resorted to hand gestures rather than words whilst trying to deflect interview questions about a mysterious “silent” test mule spotted near Ferrari’s Fiorano test track but ultimately conceded “there could be a Ferrari that you could run silently”. (Bloomberg)

Ford ^(history)

• The new Focus was unveiled; it is lighter than its predecessor and for the first time, a Focus will be available without an independent rear suspension in cheaper models. Ford said that this wasn’t to cut costs and driving dynamics would not be adversely affected. Motoring journalists raised on a diet of Ford comments about how inferior the ride of competitor products are because they didn’t feature independent rear suspension weren’t so sure. (Autocar)
• Ford’s European executives said it would be “daft to exit a big market like Europe”, citing the sales volume (and leaving aside the question of long term profitability). They also said mild hybrid 48V systems are “starting to get to the same cost” as diesel. (Autocar)
• Executives said that the company wasn’t putting much effort into planning for potential US and China tariff barriers because they “might not happen”. (Bloomberg)
• Said its research indicated that driverless delivery vehicles would complete routes 25% more efficiently than those piloted by humans. (Autocar)
  • Implication: Whilst much of the focus on fleet adoption of autonomous vehicles concentrates on the cost saving of removing the driver; efficiency benefits such as: improved fuel economy, better route choice and fewer accidents will also contribute to the business case.

Geely (includes Volvo)

• Volvo executives said that the company would not be entering new segments until after 2020 and that an XC50 was not in the current plan. (Autocar)

General Motors ^(history)

• Will cut production of the Chevrolet Cruze to one shift from July 2018 at its Lordstown plant, with 1,500 jobs to go as a consequence. Cutting one shift at Ohio plant. (Business Standard)
• EVgo announced that it would build a dedicated charging network for GM’s US Maven car sharing service to support the Maven Gig product for ride hailing drivers. (EVgo)
• GM Korea said that if its restructuring plan were approved then production of the Spark would cease in 2022 and be replaced with a crosser. Talks aren’t going particularly well, with a group of workers trashing executive offices in protest at the company’s decision not to pay bonuses. (Reuters)
• Sold 715,794 vehicles in North America in Q1 2018, an increase of 3.8% over Q1 2017. (GM)
• GM’s Cruise self-driving unit announced the hiring of the team from Zippy.ai, a delivery robot start-up. (GM)

PSA (includes Opel/Vauxhall) ^(history)

• CEO Tavares wondered aloud about the take-up of electric vehicles in Europe “who is taking the 360-degree view?” he asked — indicating that he does not see the development of the wider electric vehicles ecosystem as something for PSA to lead or manage. (Autocar)
• Announced the rollout of its Euro Repar service centre operation in Russia, hoping to win business from owners of western brands. (PSA)
• Launched a new trim level called “Ultimate” for Vauxhall models in the UK. (Vauxhall)
• Opel has reportedly lost a number of 2^nd and 3^rd tier executives recently with headhunters saying that current staff (“not the bad ones”) continue to look for new roles. (Manager Magazin)

Renault ^(history)

• Hopes that the electric Twizy quadricycle could become a competitor to motorbikes and is aiming to win a 10,000 vehicle contract from the South Korean post office to increase interest. (Renault)

Tata (includes JLR)

• Jaguar Land Rover sold 614,309 cars in the financial year to end March 2018, up 1.7% on the prior year. (JLR)
• As rumours circulated of a plan to cut around 1,000 jobs (focused on agency staff), JLR issued a statement calling reviews of production schedules “standard business practice” and said that while it would make some “adjustments” to the level of agency staff, the company stressed the hiring of apprentices and professionals. (JLR)

Tesla ^(history)

• CEO Musk said Tesla will be profitable in Q3 and Q4 2018, with positive cash flow. (Business Insider)
• Tesla seems to have scaled back its Alien Dreadnought ambitions for manufacturing, calling the approach “excessive” and saying that several automated processes had been stripped out in favour of manual completion. (CBS)
• Has reportedly begun requesting quotes to supply Model Y, with a putative launch timing of late 2019. (Reuters)
• Stopped correcting minor cosmetic damage on vehicles returned at the end of their lease; potential buyers criticised Tesla’s continued used of renderings for used car sales and not images of the actual vehicle in question. (Electrek)
• Won a contract from BP for a windfarm battery storage unit at one of BP’s 12 US sites. (Reuters)
• Recalling around 9,000 vehicles in China to replace steering components (mirroring a US recall). (Reuters)

Toyota ^(history)

• VW Trucks and Hino Motors (in which Toyota has a controlling stake) concluded a strategic cooperation agreement covering new technologies and procurement. (VW)

VW Group ^(history)

• Announced a new CEO and a series of organisational changes. VW Brand head Herbert Diess becomes group CEO whilst keeping his VW brand responsibilities. The company will have six business areas, plus China and new brand groups have been created Volume (VW, SEAT and Škoda); Premium (Audi, Ducati and Lamborghini); Super Premium (Porsche, Bentley and Bugatti); Truck & Bus. In addition, VW’s components division will be merged with the purchasing organisation. The company will also shortly appoint a COO. (VW)
• VW Trucks and Hino Motors (in which Toyota has a controlling stake) concluded a strategic cooperation agreement covering new technologies and procurement. (VW)
• SEAT has been chosen at the VW Group’s centre of excellence for CNG engines, seeing the technology as a potential offset to reduced sales of diesel cars. (VW)
• New CEO Diess said that if sanctions on Russian companies affected JV partner GAZ then the company would review the situation but not “call into question our commitment” to Russia. (Economic Times of India)

Other

• BAIC will develop an electric vehicle with help from Magna. (Magna)
• Shell commissioned prototypes of the Gordon Murray designed Ox utility for trials in India. (Autocar)
• Xiaopeng Motors said that it intends to raise $2.7 billion this year. (Bloomberg)
• Mahindra confirmed that Pininfarina would become a standalone all-electric brand, with vehicles badged as Automobili Pininfarina. (Mahindra)

News about other companies and trends

Economic / Political News

• China’s President Xi gave a speech indicating the relaxation of restrictions on foreign ownership of car companies and lower tariffs for imported vehicles might shortly become a reality. Markets cheered. (Sky News)
• The EEA (part of the EU) released a report saying that countries with sufficient taxes in favour of low emission vehicles had made more progress on CO₂ reduction than those without. (EEA)

Suppliers

• Tenneco is buying Federal-Mogul for $5.4 billion with a view to splitting the combined entity into two listed companies; one focused on powertrain and the other on aftermarket and performance parts. (Detroit News)
• LG Chem is forming two joint ventures in China in partnership with cobalt supplier Huayou Cobalt. The factories will produce sub components for electric vehicle batteries. (Green Car Congress)
• ZF announced a new €100m Serbian factory to produce motors for BEVs and PHEVs from 2019 onwards. (ZF)
• BAIC will develop an electric vehicle with help from Magna. (Magna)

Dealers

• Ally signed a strategic alliance with vehicle leasing firm Fair to use the former’s platform to sell used cars and give prominence to Fair’s leasing offers in the comparison tool Ally provides to dealers. (Ally)
• UK dealer property valuation experts said there is an increasing number of dealers on the market and see large groups looking to sell off lower performing sites as the main driver. (Motor Trader)

Ride-Hailing, Car Sharing & Rental ^(history)

• Uber acquired bicycle rental firm Jump for $200 million and announced partnerships with a car sharing firm, Getaround, and a multi-modal platform, Masabi, seemingly intent on creating an Amazon Marketplace-style element to its offering. (TechCrunch)
• South Korean firm Kakao took a small stake in Lyft. (Yonhap)
• Ola acquired multi-modal and ticketing app Ridlr. (Forbes)
• Go-Jek is rumoured to have received funding toalling over $1.5 billion in its latest round. Although the company hasn’t confirmed this, some investors have announced their participation. (TechCrunch)

Driverless / Autonomy ^(history)

• Luminar, a maker of high resolution lidar, said that it would have a production rate of higher than 5,000 units per quarter by the end of 2018. The company is working with four major automakers (Toyota plus three others) at present. Luminar said that a key component has dropped in cost from tens of thousands of dollars to $3 per piece, and the entire sensor cost “a lot” less than $1,000 per unit to produce (purchase price remains unclear). (Forbes)
• ai raised $5 million in funding, at present the company sells aftermarket dongles that plug into cars and offer enhanced control over vehicle functions. At the same time, it collects data from users in the hope of creating a crowdsourced self-driving platform. (TechCrunch)
• Ford said its research indicated that driverless delivery vehicles would complete routes 25% more efficiently than those piloted by humans. (Autocar)

Electrification ^(history)

• A Spanish study concluded that the current generation of electric cars only pay back the increased upfront price versus an ICE vehicle when the owner travels 13,000 km or more each year — the authors pointed out that this distance is unlikely in urban environments. (Europa Press)
• Mercedes executives said the brand is planning an all-electric luxury car at the same level as the S-Class. (Autocar)
• EVgo announced that it would build a dedicated charging network for GM’s US Maven car sharing service to support the Maven Gig product for ride hailing drivers. (EVgo)
• Ferrari CEO Marchionne resorted to hand gestures rather than words whilst trying to deflect interview questions about a mysterious “silent” test mule spotted near Ferrari’s Fiorano test track but ultimately conceded “there could be a Ferrari that you could run silently”. (Bloomberg)

Connectivity

• Valeo is partnering with NTT Docomo to offer vehicle-to-everything communication. (Valeo)

Other

• Google is reportedly considering an acquisition of Nokia’s in-flight internet service. (Bloomberg)

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Trade wars, Tesla volumes, driver assistance super-sleuths and PSA’s secret agenda to mitigate Brexit. Please enjoy our auto industry and mobility briefing for 2^nd April to 8^th April. A PDF version can be found here.

Favourite stories of the past week…?

• And Then I Go And Spoil It All By Saying Something Stupid — China threatened punitive tariffs on US-built vehicles. Although the car industry is full of good and bad examples of how to do things, it’s always a bit of a shame when someone gives the underperformers an opportunity to distract from their relative achievement. What’s the point in slogging away to improve first time through by 3% this year if your product’s bottom line is 25% underwater because of a trade war?
• Losing My Religion — Tesla’s quarterly build figures failed to satisfy all but the most ardent fanboy. I’m looking straight past Model 3 though and wondering what it means that Model S continues to plateau in the sales charts (here’s a historic view). The Tesla legend is built on the assumption that people will buy all the cars they can make, but in the case of their larger models, I’m not sure that’s true. Tesla say their order book for Model S and X has never been stronger, but why isn’t that feeding through into deliveries?
• I Go Driving In My Car — Some Tesla owners took to the streets to recreate the fatal accident and discover why Autopilot didn’t save the driver. They concluded that it wasn’t very good at telling the difference between new and old road markings. More interesting (and worrying) to me though was the fact that they took it upon themselves to conduct this important research. Will OEMs find themselves on the hook for negligence if there are copycat accidents, in addition to the original crash?
• A Little Bit Of This And A Little Bit Of That — PSA announced that it will invest in the UK van factory it inherited from GM, whilst also producing in France. PSA didn’t mention it but they are surely too clever for it to have escaped their notice that this is a fantastic Brexit hedge. In the event of tariff barriers, they will be the only large-scale producer of commercial vehicles insulated from the penalties. Even with imports of critical components, this would leave them with a price advantage nearing 10% (compounded by benefits of a weak sterling) — with no need to send vehicles the other way. I’m not saying that will happen, but if it does they will look like very smart cookies.

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

Find our archive here.

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News about the major automakers

BMW ^(history)

• Announced pricing for the monthly subscription scheme it is piloting in the USA. Prices start at $2,000 per month for lower end vehicles, with $3,700 for the highest performance derivatives. (Bloomberg)
  • Implication: BMW isn’t alone in failing to display imagination in a monthly subscription product. Rather than offering flexibility, OEMs are simply pricing schemes as though customers will walk shortly after joining and loading in all the classic costs into payments so high that they can only appeal to people who want a car for very short durations. This area seems ripe for an alternative approach that more intelligently matches customers and inventory, perhaps with less of a focus on the new car being brand new.

Daimler ^(history)

• Daimler’s CEO believes that customers are “still showing confidence” in diesel and that recent commentary about the technology’s decline is overblown. (Autocar)
• Exploring potential collaborations with new shareholder Geely. (Market Watch)

FCA ^(history)

• Announced the separation of electronics subsidiary Magneti Marelli from the rest of the group, as expected. Following Ferrari’s example, FCA will issue shares in the separate firm to existing FCA stockholders rather than have a separate flotation. Magneti Marelli will also take responsibility for some of the group’s debt. (FCA)

Ford ^(history)

• Received approval for German banking licence, meaning that it can provide financing to customers in Europe unimpeded by Brexit — Ford is the OEM most exposed to the loss of passporting rights. (Reuters)
• Ford executives said that it would not be worth producing electric cars with annual volumes below 40,000. (Reuters)

Geely (includes Volvo)

• Daimler is exploring potential collaborations with new shareholder Geely. (Market Watch)
• Volvo sold 147,407 cars in Q1 2018, a 14% increase on a year-over-year basis. (Volvo)

General Motors ^(history)

• Didn’t specifically deny rumours of plans to cease production of Chevrolet Sonic and Impala but said it would retain a presence in US car segments, citing the size of the sales volume. (Detroit News)
• Moving to quarterly, rather than monthly, US sales reporting to avoid having to explain seasonal effects. (GM)
• Reportedly proposed to end a shift at one of its South Korean plants, a move unions say they will oppose. (Reuters)

Honda ^(history)

• Reportedly idling US production of the Accord due to slow sales. (Auto Evolution)
• Waymo’s CEO said talks with Honda were likely to yield a collaboration focused on delivery vehicles. (Bloomberg)

Hyundai / Kia

• Elliott Management, an activist investor with a history of taking on Korean chaebols, announced that it had built stakes in Hyundai, Kia and an affiliate, raising speculation about their motives. (Yonhap)

PSA (includes Opel/Vauxhall) ^(history)

• Announced it would invest in a capacity increase at the Vauxhall Luton, UK factory to enable production of up to 100,000 medium commercial vehicles annually. The plant will make the successor to the Vauxhall Vivaro, in addition to sister Peugeot and Citroën products. (PSA)
  • Implication: As the UK’s only high volume commercial vehicle factory, although the announcement does nothing to deal with Opel / Vauxhall’s legacy footprint inefficiency, it is a good hedge against Brexit uncertainty. In the event of tariff barriers, the vans produced at the plant would likely find themselves with a near-10% price advantage over all other competition in a notoriously close-fought, yet profitable, segment.
• CEO Tavares said that European CO₂ regulations are “going to create a Chinese trojan horse in Europe” because they could (in his opinion will) bring at least one carmaker to their knees, creating the opportunity for a Chinese company to buy them up on the cheap. (Reuters)
  • Implication: The analysis seems flawed to us — primarily justifying scare tactics in ACEA’s lobbying. Firstly, Tavares dismisses that a European-only merger option would be viable on anti-trust grounds, even though PSA has just accomplished such a deal with Opel. Secondly the assumption seems to rest on a Chinese carmaker using its electric vehicle technology to easily meet the targets, begging the question: if the Chinese can do it, why not the Europeans? Thirdly, the theoretical Chinese suitor would have to pay EU fines until the portfolio met targets, presumably requiring deep pockets if the OEM had been brought to bankruptcy? Finally, it isn’t really necessary for carmakers to have loads of BEVs or PHEVs to meet 2021 targets, some already appear on course to meet targets (including… PSA!)

Tata (includes JLR)

• Tata Motor’s Indian market sales in the financial year ended 31^st March 2018 totalled 586,639 units, a rise of 23% over the prior year. (Tata)

Tesla ^(history)

• Released Q1 production numbers, saying it had built 34,494 vehicles, with the much-watched Model 3 weekly figure rising to 2,020 cars in the final week of the quarter (totally unrepresentative of the three-month average). (Tesla)
  • Implication: Model 3 launch continues to disappoint, and although the company says it is taking the problem seriously, hyperbole about Q1 Model 3 numbers versus Q4 seems out of place given that both are a massive disappointment. Keep an eye on Model S and Model X: Although Tesla says orders are “at an all time high”, deliveries are some way off their peak. In Model X’s case, transfer of labour to Model 3 is a plausible explanation; it’s more difficult to make the same argument for Model S.
  • Check out our chart of deliveries by quarter.
• People trying to recreate last month’s fatal Autopilot accident said that they had found the system may become dangerously confused when confronted with replacement road markings. (Business Insider)
  • Implication: Whatever their motives, amateurs trying to recreate the circumstances that led to an accident is a worrying development. It could lead to a rash of unintended accidents as people unnecessarily investigate collisions that professionals are already working on. Furthermore, it raises the spectre of criminals exploiting known blind spots to cause accidents and claim on insurance. If the findings of these driver assistance sleuths is correct and Tesla doesn’t react quickly enough, is there a case for negligence?
• Said it does not need any cash from debt or new stock “this year”, leaving the door open for potential fund raising once it has demonstrated a decent run rate on Model 3. (Reuters)
• Received a telling off from US safety authorities for releasing unauthorised crash data. (The Guardian)

Toyota ^(history)

• Recalling around 6,000 vehicles in the USA to correct potential braking problems. (Toyota)

VW Group ^(history)

• Porsche invested in Anagog, a company that makes in-app data analysis tools so users do not have to send personal data to the cloud. (Porsche)
• Not planning to replace the VW Beetle at the end of the current product cycle saying a “new new new Beetle” would be too much of a stretch. (Forbes)
• Terminated all contracts with Prevent Group, who are now threatening legal action. Prevent were the source of substantial misery for VW when they unilaterally stopped shipments of several critical components. (Handelsblatt)
• Škoda employees have negotiated a 12% pay increase in their latest 1 year contract. (Handelsblatt)

Other

• Aston Martin is reportedly aiming for a £4 billion valuation in its forthcoming IPO. (Sky)
• Aston Martin’s CEO said the new DBX SUV will not feature BEV or PHEV powertrains. (Motoring)
• Mahindra announced a (35% / 65%) joint venture with Ideal Motors to assemble vehicles in Sri Lanka. (Mahindra)

News about other companies and trends

Economic / Political News

• China published a list of retaliatory tariffs in response to action announced by the US Vehicles imported from the US could face additional tariffs of up to 25%. (Detroit News)
• The US Government said that they would issue less “stringent” fuel economy targets for 2022-2025. Automotive industry lobbying groups cheered the move whilst the companies themselves (somewhat unconvincingly) declared themselves to have been in favour of the original targets. (EPA)
• US light vehicle industry SAAR in March was 17.4 million, a year-over-year improvement that about offset the YoY declines seen in January and February. (Wards)
• German passenger car sales for March were 261,749 units, a year-over-year increase of 7.4%. (KBA)
• UK March passenger car registrations of 474,069 units were down (15.7)% on a year earlier, pullahead of sales in 2017 to avoid a tax increase were partly blamed but on a YTD basis sales are still down (12.4)% YoY. (SMMT)
• French registrations of 231,110 passenger cars in March represented a 2.2% increase on March 2017. (CCFA)
• Italy saw 213,731 passenger cars registered in March, down (5.75)% on the same month a year earlier. (UNRAE)
• Spanish registrations for March were 128,715 cars, a 2.1% increase on a year-over-year basis. (Europa Press)

Suppliers

• Continental and Osram announced the finalisation of talks on a 50/50 lighting JV. (Continental)
• Motherson Sumi Systems said it had agreed to acquire interior components supplier Reydel from its private equity owners for $201 million. (Autocar)
• Magna said it was forming a JV in China with Guangzhou to produce composite liftgates. (Magna)
• American Axle announced a JV with a Guangxi Automobile subsidiary for driveline manufacturing. (AAM)
• FCA announced the separation of electronics subsidiary Magneti Marelli from the rest of the group, as expected. Following Ferrari’s example, FCA will issue shares in the separate firm to existing FCA stockholders rather than have a separate flotation. Magneti Marelli will also take responsibility for some of the group’s debt. (FCA)

Dealers

• US start-up Mobiliti launched an all-inclusive $549 per month car subscription offer, sourcing stock from dealers and using financing provided by Ally. (Mobiliti)

Ride-Hailing, Car Sharing & Rental ^(history)

• Alibaba is reportedly considering an investment in Grab. (TechCrunch)
• Grab’s CEO gave an interview containing some commentary on the merger with Uber’s ASEAN operations. Pressed on the impact for customers and drivers, he answered that some drivers would be better off and so would some customers (but the reverse would be true), failing to answer the central anti-competitive challenge: that Grab would be better off. (CNBC)

Driverless / Autonomy ^(history)

• Waymo’s CEO indicated during an interview that Honda would shortly be announced as a partner, with a focus on delivery vehicles. Ford and Hyundai were also mentioned as partners (as part of the Waymo / Uber trial it was disclosed that Ford and Waymo came close to a deal in 2015/16). (Bloomberg)
• Three Chinese companies — GLP, G7 and NIO Capital — formed a JV to develop smart trucks. (Deal Street Asia)
• Visteon launched a machine learning and data processing platform, called DriveCore. (Visteon)

Electrification ^(history)

• Deutsche Post is reportedly looking at an IPO for its electric van producing Street Scooter (Bloomberg)
• Ford executives said that it would not be worth producing electric cars with annual volumes below 40,000. (Reuters)

Other

• Bicycle sharing giant Mobike was acquired by Meituan-Dianping for $2.7 billion. (Economic Times of India)
• Brazilian bike sharing company Yellow, founded by veterans of 99Taxis raised $9 million. (TechCrunch)

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Tesla’s privacy policy, VW’s diesel guarantee, self-driving companies that are smarter than the rest and ride hailing market dominance Please enjoy our auto industry and mobility briefing for 26^th March to 1^st April. A PDF version can be found here.

Favourite stories of the past week…?

• The Sharing Song — Tesla released data showing that it had nothing to do with the fatal crash of a vehicle in Autopilot mode. Yet again, Tesla looks thin skinned by choosing to publish data others might keep private. How will this behaviour (assuming it continues) affect its standing with customers? And does it undermine the company if it tries to withhold information from police investigators in non-fatal crashes?
• Comfort And Joy — VW is guaranteeing that diesel buyers in Germany won’t be affected by diesel bans. But only for three years. And only if it affects the owner’s work or home address. Doesn’t sound all that reassuring to me…
• Clever Trevor — Intel joined the scrum of companies saying that the fatal collision between one of Uber’s autonomous cars and a pedestrian could never have happened to them. Intel’s analysis stood out because they claimed to have proof that even with the crummy-quality of the video the police released they detected the victim early enough to mitigate the crash. But where does all this dog-eat-dog action get us? More fatal collisions will happen and they won’t always involve Uber. Will speaking now be regretted further down the road?
• I Am The One And Only — Uber’s tie up with Grab is under scrutiny from competition authorities worried it could result in an all-powerful monopoly. When discussing the merit of the ride-hailing business model, I find that people invariably sit in one of two camps: those that believe monopolies will allow price increases (justifying massive valuations) and those that think ride-hailing will be a commodity with mandated competition (making those “investing” in unprofitable market share now look a bit silly). Who will feel vindicated after this round?

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

Find our archive here.

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News about the major automakers

BMW ^(history)

• Officially announced the merger of BMW and Daimler’s mobility operations into a new company, with both holding a 50% share. Services will cover multimodal; car sharing; ride hailing; parking and charging. However, a number of investments by both companies into these areas were not mentioned by name so it appears as though both will continue to invest in start-ups that interest them. (BMW)
• Customers are reportedly availability problems for plug-in hybrids with the introduction of WLTP test procedures being blamed. (Honest John)
• Reportedly planning a trial subscription service called Access by BMW in the USA. (Bloomberg)
• BMW’s Parkmobile said its app can now identify free parking spaces, for a $0.99 monthly fee. (Parkmobile)

Daimler ^(history)

• Officially announced the merger of BMW and Daimler’s mobility operations into a new company, with both holding a 50% share. Services will cover multimodal; car sharing; ride hailing; parking and charging. However, a number of investments by both companies into these areas were not mentioned by name so it appears as though both will continue to invest in start-ups that interest them. (BMW)

FCA ^(history)

• Extended its revolving credit facility to 2023. (FCA)

Ford ^(history)

• Lincoln unveiled the Aviator, a three row SUV that the company hopes will do well in China. (Lincoln)

Geely (includes Volvo)

• Lynk&Co revealed the 02 — confusingly, its third vehicle, and that European sales will begin with a series of high-profile stores augmenting the main offering via its website. The first locations will be Amsterdam, Barcelona, Berln, Brussels and London. (Lynk&Co)

General Motors ^(history)

• Gave unions in South Korea an ultimatum: the company will declare bankruptcy in the country if there is no agreement by April 20^th that cuts labour costs enough to allocate a new model program. (Reuters)
• Newer Cadillac models are seemingly not being offered with GM’s L2 Super Cruise driver assistance system, with limited explanation from company spokespeople. (The Verge)
• A Cruise test vehicle received a citation from San Francisco police for driving too close to a pedestrian, although GM disputed that there was any safety issue, the police replied that they rely on the observations of their personnel rather than any data output from the car. (Business Insider)
  • Implication: In future, both groups will be compelled to shift position. Self-driving companies will have to accept that “safety” is a measure interpreted by law officials, regulators and court; police will find it difficult to rely on the wealth of data from self-driving cars when trying to unravel mysterious accidents whilst retaining the right to ignore it when it suits them.

Hyundai / Kia

• South Korean union officials complained that the updated US-South Korea free trade is “humiliating” and made local production of a planned Hyundai pick-up unlikely — probably music to the ears of US negotiators. (Reuters)
• Will simplify its governance structure by spinning off the core module business of supplier Hyundai Mobis and merge it with logistics firm Hyundai Glovis. (Yonhap)

Nissan (includes Mitsubishi)

• Both companies continued to deny persistent rumours that Nissan and Renault are engaged in merger talks with a view to a new company headquartered in either London or the Netherlands. (Les Echos)
• Signed an agreement to produce Datsun cars in Pakistan from 2019 onwards. (Nissan)

PSA (includes Opel/Vauxhall) ^(history)

• Said it was “no longer necessary” to retain its 25% stake in logistics provider Gefco now that the end of its lock-in period (which started when it sold 75% of the business) has ended. (Les Echos)
• Reportedly planning a massive reduction in Vauxhall dealers — 100 of the 324 sites to go. (Automotive Manager)
• Opel is reportedly trying to gain union agreement to suspend the German industry-wide 4.3% pay increase; is offering separation terms of up to €275,000 per employee plus a €20,000 bonus for those who sign up quickly. (Handelsblatt)
• PSA and Dongfeng agreed a joint venture to offer leasing arrangements to customers in China. (PSA)
• Executives said the company has chosen which brand to use for its re-entry into the North American market but it is “too early” to talk about it. (Car and Driver)

Renault ^(history)

• Both companies continued to deny persistent rumours that Nissan and Renault are engaged in merger talks with a view to a new company headquartered in either London or the Netherlands. (Les Echos)

Suzuki

• Agreed a two-way supply agreement with Toyota in India. Suzuki will supply Baleno and Vitara-based products and Toyota will reciprocate with Corolla. Volumes and pricing methods are still under discussion. (Toyota)

Tata (includes JLR)

• Waymo will use Jaguar’s I-Pace as its first all-electric autonomous vehicle, planning for up to 20,000 purchases between 2020 and 2022 — a fleet that Waymo says could operate 1 million trips per day. (Waymo)

Tesla ^(history)

• Released a series of blog posts detailing a recent fatal crash of a Model X. The company said that Autopilot was engaged but pointed to a series of safety warnings it said had been ignored by the driver and the reduced level of safety guarding at the scene of the accident. (Tesla)
  • Implication: Tesla continues to show scant regard for driver privacy, offering up detailed analysis in order to defend against real or perceived criticism. The company is potentially setting a murky precedent. If it can release data as it sees fit then is it implicitly lowering the bar for others to demand to see it? Tesla also draws heavily on the comparison to average US crash statistics, but when adjusted for lack of seat belts and removal of drink driving, the benefit of Autopilot is less flattering.
• Moody’s downgraded Tesla’s debt rating to B3 over cashflow concerns. (Business Insider)
• According to a company-wide memo, Model 3 production is between 200 and 300 vehicles per day. (Bloomberg)
• Announced a recall of 123,000 Model S vehicles to correct problems with power steering. (CNBC)

Toyota ^(history)

• Agreed a two-way supply agreement with Suzuki in India. Suzuki will supply Baleno and Vitara-based products and Toyota will reciprocate with Corolla. Volumes and pricing methods are still under discussion. (Toyota)
• Lexus said that the new UX crossover will be available through a subscription service with more details to be announced later this year. (Toyota)
• Issued a recall for around 2,000 Camry vehicles to correct problems with the engine. (Toyota)

VW Group ^(history)

• Lamborghini’s boss said the company would produce 7,500 cars in 2019 and that it might launch an additional model to take annual sales to nearer 10,000 units, but not until around 2025. (Motoring)
• Porsche executives said that they expect charging networks to start returning a profit after three years. (Electrek)
• VW will guarantee that German buyers of new or nearly-new VW diesels can exchange for something else if the vehicle has its access restricted around the owner’s home or work address in the next three years. (VW)
• A potential scandal looms, with rumours the CEO was part of a 2013 hit-and-run in South Africa. (Der Spiegel)

Other

• Magna announced that it was developing two new vehicles for Vietnamese group VinFast. The cars are being designed with help from Pininfarina. (Magna)
• Bollinger engaged engineering services provider Optimal Inc to develop their all-electric off-rod vehicle. (Electrek)
• There was speculation that BYD will spin off its battery division. (Gasgoo)
• Chinese-owned industrials group CCA said that it will invest £100 million into a plant in Coventry, UK for production of the MetroCab, a purpose-built taxi. (MetroCab)
• SF Motors unveiled two of their planned all-electric three car portfolio — both SUVs. (TechCrunch)
• Egyptian officials implied that SAIC is close to agreeing to build a car factory in the country to serve as an export hub for North Africa and the Middle East. (China Daily)
• OEM April Fools press releases included an Aston Martin monster truck, enhanced quality control of floor tiles at McLaren and a roadster Honda CR-V. (Autocar)

News about other companies and trends

Economic / Political News

• The existing US-South Korea trade deal was renegotiated. Tariffs on pick-up trucks entering the USA, scheduled to be phased out, were extended and sales of US-made vehicles to South Korea were made easier. (CNBC)

Suppliers

• Dana’s attempted merger with GKN Driveline fell apart as GKN’s shareholders chose an alternative bid by takeover specialist Melrose. (Dana)
• Denso announced it was opening a technical centre in Israel. (Denso)
• Federal Mogul announced a joint venture with Dong Feng to make pistons. (Federal Mogul)

Ride-Hailing, Car Sharing & Rental ^(history)

• Uber’s deal with Grab is under investigation by competition authorities in ASEAN who fear that a powerful monopoly will be created, against the best interests of the consumer. (Reuters)
• Grab announced a collaboration with RideCo where the latter will provide dynamic on-demand shuttles that will be available on Grab’s app. (RideCo)
• Careem is reportedly in initial talks for a new fund raising round with a target if $500 million. (Deal Street Asia)
• An in-depth profile of Uber’s CEO suggested that his performance incentives for a $120 billion IPO might be so extravagant that they are driving many of the company’s strategic decisions (e.g. converting competitive market position in Russia / China / ASEAN into stakes in dominant operators). (New Yorker)
• US rental company Ryder said that a trial fleet asset sharing scheme had been highly successful and it is now planning a nationwide rollout, believing that 25% of fleet vehicles are totally idle at least one day per week. (Reuters)

Driverless / Autonomy ^(history)

• Cepton launched the Vista “120 line equivalent”, 200m range lidar; mass production will begin in Q2 2018. The company said it was “a cost point nobody can touch with this type of performance” without providing specifics and pointed to the units relatively low power consumption (at 9W, its about the same as many 16 line units). (Cepton)
• Waymo’s CEO said the company was doing “zero” work on data gathering but that it might “be a workstream in future”. (Telegraph)
• Uber reached a settlement with the family of the woman recently killed in a collision with a self-driving car. (Reuters)
• Uber gave up its testing permit for California. (Engadget) The company also shut down its on-demand package delivery service. (TechCrunch)
• Local Motors will use Elite Transportation Services to provide fleet management for its AVs. (Mass Transit)
• Intel’s MobilEye division released the results of using its proprietary object recognition algorithms against the publicly-available video of Uber’s fatal self-driving crash. The company said that even with the (assumed to be) low resolution version of the camera feed, it could have detected the pedestrian a minimum of 1 second prior to the collision. (Intel)
• Scotty Labs, a start-up developing remote control for autonomous vehicles said it had raised $6 million and formed a partnership with Voyage. (Scotty Labs)
• Nvidia announced a virtual testing platform for autonomous vehicles saying that it can simulate data inputs from a variety of sensors. (Nvidia)
• ai announced that it would start awarding drivers “gold stars” for good driving whilst the company’s data logging equipment is operating. The value of the gold stars does not appear to extend beyond a warm feeling in the driver’s heart. (Comma.ai)
  • Implication: Comma.ai are implying that, although not ready to unleash a self-driving solution, they can recognise the difference between good and bad driving. The value of this gamification in improving the rate at which the company’s AI learns how to drive and develops maps is unclear but this is the first attempt we’ve seen to attempt to create a feedback loop between the two (Comma.ai is not the first company to use fleet generated data to feed into self-driving AI)
• Waymo will use Jaguar’s I-Pace as its first all-electric autonomous vehicle, planning for up to 20,000 — a fleet that Waymo says could operate 1 million trips per day. (Waymo)

Electrification ^(history)

• SF Motors unveiled two of their planned all-electric three car portfolio — both SUVs. (TechCrunch)

Other

• On-demand courier company Shyp announced it was ceasing operations. (TechCrunch)
• BMW’s Parkmobile said its app can now identify free parking spaces, for a $0.99 monthly fee. (Parkmobile)

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