Category Archives: Automotive

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 30^th October to 5^th November 2017. A PDF version can be found here.

Favourite stories this week…?

• The heat is on — Tesla would probably have wanted better news to share during the Q3 earnings call. Without repeating the endless column inches already written, the explanations were troubling. Take it from a manufacturing engineer, a “burst run” of 500 or 1,000 units doesn’t tell you much about high volumes. It means we haven’t seen many (any?) of the myriad problems with supplier parts failing to meet run-at-rate and quality (e.g. Falcon doors). 5,000 per week by the end of Q1 looks optimistic given the progress so far. Also, a quick re-read of masterplan part deux reminded me that Tesla’s Model X-based minibus was going to be ready for unveiling this year. When will we hear more about this exciting event?
• So Solid Crew — If media reports are correct, Lamborghini is working on a solid-state battery for introduction in the next generation Huracán. I know that a PHEV battery isn’t the same thing as a BEV unit, but this could bode well for adoption by the rest of VAG.

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News about the major automakers

BMW

• Recalling about 1 million vehicles in the US to correct problems with the wiring. (BBC)

Ford

• Bill Ford says in the past the company had “said too much” about its plans for autonomous driving and in response to criticism that the company wasn’t giving sufficient information for investors to have confidence in its future he said that clarity would be provided “when we’re ready”. (Detroit News)
• Ford’s Chariot on-demand bus service confirmed that it is working towards a launch of operations in London. (City AM) and its subscription car service Canvas will launch in a second city, LA. (Tech Crunch)
• French unions won a tribunal case against Ford saying that the company was violating the terms of a 2013 labour agreement where it committed to maintain 1,000 jobs at its Bordeaux site until May 2018. The union says that currently Ford only has 879 workers at the site. Workers are lobbying for the plant to be given a new transmission to produce. (Usine Nouvelle)

Geely (includes Volvo)

• According to a Malaysian government minister, Proton’s new factory in Tanjung Malam will have a capacity of 400,000 vehicles by 2022 and produce Volvo and Geely badged products alongside Proton vehicles. He said that the company plans to export 200,000 Protons cars to China and ASEAN markets. (New Straits Times)
• The London Electric Vehicle company lost a case to prevent Metrocab selling an electric taxi in London. LEV claimed that the vehicle’s exterior was too similar to its own design. (Cab Trade News)

General Motors

• Cruise invited media to an event on 28^th November, expected to be a Waymo-like demonstration. (TechCrunch)

Honda

• Announced Financial results for Q3 2017 / Fiscal Q2. Revenue of 3,776 billion yen was up 15.7% on a year-over-year basis but profit was down (33)% YoY. Honda revised its year-end guidance upwards. (Honda)
• Working on a new battery technology ahead of a car launching in 2022 with a 15 minute charging time. (Nikkei)

Mazda

• Reported Q3 2017 / Fiscal Q2 results. Revenue of 854.5 billion yen was up 11% on a year-over-year basis. Operating profit of 36.6 billion yen was up 2% YoY. (Mazda)

Nissan (includes Mitsubishi)

• Reported Q3 2017 global sales of 1,414,864 units, an increase of 6% on a year-over-year basis. Sales were down (3)% in North America, but up in all other regions — by 26% in Japan. (Nissan)
• Said that it had decided fixes for the problems with its final inspection routines in Japan and would be soon implementing them across plants. (Nissan)

PSA (includes Opel/Vauxhall)

• The future plan for Opel / Vauxhall will be presented on 9^th (Opel)
• Announced the completion of the captive finance operations for Vauxhall and Opel and the appointment of a new management team. (PSA)
• Reportedly planning to add workers to the night shift in Mulhouse for production of 2008 and DS7. No new hiring will take place as the additional labour will come from the C4 / DS4 line. (Journal Auto)
• Suffered production stoppages in Rennes as temporary workers protested over wage slip irregularities. (France 3)

Renault

• The French government announced that it had reduced its stake in Renault to 15%. (Bloomberg)
• Dongfeng Renault outlined its strategy to 2022. The company aims to increase sales to 400,000 units annually. There will be nine local models, including three EVs, sold through 400 dealers. (Economic Times of India)

Suzuki

• Announced financial results for Q3 2017 / Q2 fiscal year. Revenue of 1,831 billion yen was up 22% year-over-year. Operating income of 173 billion yen was up 49.7% YoY. (Suzuki)

Tesla

• Announced Q3 2017 financial results. Automotive revenue of $2.362 billion was up 10% on a year-over-year basis. Total revenue of $2.985 billion was up 30% YoY. Net income from operations was a loss of $(535) million, compared with a profit of $86 million a year earlier. (Tesla)
  • Implication, although it isn’t attracting much attention, Tesla’s “Services and Other” line is running at a gross loss (i.e. excluding fixed cost) of around $(200) million per annum. The explanation that automotive gross margins were reduced due to Model 3 launch costs didn’t seem to fit the actual YoY drop very well since only a handful of units were produced.
• Tesla said that its Model 3 ramp-up was going more slowly than expected, meaning that it would reach 5,000 units per week at the end of Q1 2018, rather than Q4 2017 as previously guided. The company wouldn’t give firm guidance on when it might achieve 10,000 units per week. (Tesla)
  • Implication: despite having previously given the figures freely, Tesla said that it didn’t comment on vehicle-line specific orders. Ad Punctum’s analysis of Tesla financials indicates that the figure is probably between 410,000 – 465,000 units.
• The Daily Kanban published a story saying that Tesla’s production problems were of its own making, citing a source at a manufacturing equipment supplier who contrasted Tesla’s rushed approach with that of a conventional OEM (Daily Kanban)

Toyota

• Reported Q3 group production of 2,553,144 units, down (1)% on a year-over-year basis. (Toyota)
• Toyota AI Ventures said that it would be making further investments in Israeli companies. (Reuters)

VW Group

• The head of Volkswagen’s UK finance arm said that the company was working towards a full banking licence in the UK, which would help it raise funding in the same place as it issued loans. (Economic Times of India)
  • Implication: VW has two finance companies in the UK, one is a subsidiary of the main bank (passporting not required) but the other is a branch (Volkswagen Bank UK — would be affected by loss of passporting).
• Audi said that it would recall about 5,000 A8 vehicles to update their emissions software. (VW)
• Lamborghini will reportedly use a solid-state battery to create a plug-in hybrid version of the successor to the Huracán, to be introduced in 2022. (Autocar)

Other

• Ferrari issued financial results for Q3 2017. Revenues of €836 million were up 7% year-over-year, EBIT of €202 million was up 17% YoY. Ferrari raised its year end guidance. (Ferrari)
• The FBI’s investigation into corruption by UAW officials appears to have expanded beyond Fiat Chrysler, with union officials at GM reportedly under suspicion. (Detroit News)
• Gordon Murray Automotive announced that it would use the IGM brand for its in-house products. The company is opening a new manufacturing centre in Dunsfold, UK. (Gordon Murray Designs)
• Isuzu said that it had confirmed that some suppliers had used materials supplied by Kobe Steel that were affected by the company’s quality scandal, and it was working to establish the impact. Isuzu has not directly purchased any suspect material. (Isuzu)

News about other companies and trends

Economic / Political News

• US light vehicle industry for October was 17.98 million SAAR. (Wards)
• Registrations in Italy were 159,835 units in October, up 7% on a year-over-year basis. (UNRAE)
• Passenger car registrations in Spain were 94,676 units in October, up 13.7% on a year-over-year basis. (Faconauto)
• French passenger car registrations for October of 176,496 units was an increase of 13.7% on a year-over-year basis. Commercial vehicle registrations of 39,372 units were up 18.9% YoY. (CCFA)

Suppliers

• Delphi reported Q3 2017 financial results. Revenue of $4.3 billion was up 4.4% on a year-over-year basis, excluding exchange, raw materials and the effect of M&A. Net income from continuing operations was $395 million. (Delphi)
• Continental announced that it would build a plant in Lithuania to supply electronics. The company will invest $95 million and expects to create 1,000 jobs. (Continental)
• Continental has acquired Argus Cyber Security to improve its offerings for secure connected vehicle communications. (Continental)
• Denso reported first half financial results. Revenue of 2,366 billion yen was up 8.6% on a year-over-year basis. Operating profit of 204 billion yen was up 43.4% YoY. The company will increase its dividend. (Denso)
• Denso announced its operating targets for 2025. It is aiming for a 10% operating profit, partly through growth in mobility, electrification and automated driving. (Denso). Denso has also completed a previously announced share purchase in Fujitsu Ten and now that it is the majority shareholder, the name has changed to Denso Ten. (Denso)
• AAM reported Q3 financial results. Revenu of $1.72 billion was up over 70% on a year-over-year basis. Net income of $86 million was up 40% YoY. (AAM)
• Adient reported Q3 2017 / Fiscal Q4 results. Adjusted EBIT rose 3% on a year-over-year basis. (Adient)
• Paint specialist Akzo Nobel is reportedly considering a merger with Axalta. (Bloomberg)
• Bridgestone is reportedly increasing European capacity by 20% over the next five years. (Journal Auto)
  • Implication: famous last words and all that but regardless of exactly how everyone travels around in future the thing that seems most certain is that the vehicles are on tyres and the amount of miles travelled will go up rather than down. This means that whilst tyre makers almost certainly face challenges from low cost, commoditised brands, they can probably work on the basis of an ever-expanding market.
• Faurecia continued its Chinese expansion, this time creating a JV with BYD, which will be 70% controlled by Faurecia. (Faurecia)

Dealers

• German dealers have never been so happy. According to a survey, satisfaction with OEMs is at record levels and return on sales is improving, although still short of previous highs. (Autohaus)

Ride-Hailing, Car Sharing & Rental

• Grab said that it had reached one billion rides at the end of October. (Grab)
• Didi has entered into a strategic partnership with NEVS to create a charging network that Didi’s drivers and members of the public can use. Didi expects to have 1 million electric vehicles in its fleet by 2020. (Climate Action Programme)
• Ford’s Chariot on-demand bus service confirmed that it is working towards a launch of operations in London. (City AM)

Driverless / Autonomy

• Waymo gave a closed course demonstration to selected members of the media. (TechCrunch)
• Baidu has created a partnership with ride-hailing company Shoqi. The deal should help accelerate development of high resolution maps by increasing the fleet size. (Xinhua)
• High resolution radar supplier Arbe Robotics raised $9 million. Note that the company explicitly talks about Level 3 capability in its press releases. (Globes)
• Researchers have developed a new method for testing self-driving neural networks called DeepXplore. The idea is to run identical tests on several neural networks at once and spot bugs by identifying major differences in output. (IEEE)
• Waymo said that it would use US dealer AutoNation to service its autonomous test fleet. (International Business Times)
• Low-cost lidar developer Blickfeld raised $4.25 million in seed funding. (TechCrunch)

Electrification

• US draft tax legislation proposes to eliminate the tax credit for electric cars (up to $7,500 depending on how many vehicles the OEM has produced). (Detroit News)
• The European charging network set-up by BMW, Daimler, Ford and VW has been named Ionity. It aims to create 20 charging stations in 2017, with 400 sites planned by 2020. (Ford)
• The CEO of Workhorse said that it has $300 million worth of pre-orders for its W-15 plug-in hybrid pick-up truck. (autoblog)
• SF Motors has purchased a former military Humvee plant and intends to create 430 jobs when it reopens. (LA Times)

Connectivity

• Continental has acquired Argus Cyber Security to improve its offerings for secure connected vehicle communications. (Continental)

Other

• Mapbox has acquired Belarusian Mapdata. (TechCrunch)
• Porsche SE was amongst the investors in metal 3D printing company Markforged. (3D Printing Industry)

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

Favourite stories this week…?

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

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Our latest research

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

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

News about the major automakers

BMW

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

Daimler

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

FCA

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

Ford

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

Geely (includes Volvo)

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

General Motors

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

Honda

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

Hyundai / Kia

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

Nissan (includes Mitsubishi)

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

PSA (includes Opel/Vauxhall)

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

Renault

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

Tesla

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

Toyota

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

VW Group

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

Other

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

News about other companies and trends

Economic / Political News

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

Suppliers

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

Ride-Hailing, Car Sharing & Rental

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

Driverless / Autonomy

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

Electrification

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

Other

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

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

Favourite stories this week…?

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

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News about the major automakers

BMW

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

Daimler

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

Ford

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

Geely (includes Volvo)

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

General Motors

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

Honda

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

Hyundai / Kia

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

Mazda

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

Nissan (includes Mitsubishi)

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

PSA (includes Opel/Vauxhall)

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

Renault

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

Tesla

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

Toyota

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

VW Group

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

Other

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

News about other companies and trends

Economic / Political News

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

Suppliers

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

Dealers

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

Ride-Hailing, Car Sharing & Rental

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

Driverless / Autonomy

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

Electrification

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

Connectivity

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

Other

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

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

Favourite stories this week…?

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

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News about the major automakers

BMW

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

Daimler

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

FCA

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

Ferrari

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

Ford

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

Geely (includes Volvo)

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

General Motors

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

Hyundai / Kia

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

PSA (includes Opel/Vauxhall)

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

Renault

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

Tata (includes JLR)

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

Tesla

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

Toyota

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

VW Group

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

Other

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

News about other companies and trends

Economic / Political News

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

Suppliers

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

Ride-Hailing, Car Sharing & Rental

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

Driverless / Autonomy

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

Electrification

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

Connectivity

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

Other

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

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

Favourite stories this week…?

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

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Our latest research

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

• Find the analysis here (short presentation format)

News about the major automakers

BMW

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

FCA

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

Ford

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

Geely (includes Volvo)

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

General Motors

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

Honda

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

Hyundai / Kia

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

Nissan (includes Mitsubishi)

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

PSA (includes Opel/Vauxhall)

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

Renault

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

Tata (includes JLR)

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

Tesla

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

Toyota

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

VW Group

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

Other

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

News about other companies and trends

Economic / Political News

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

Suppliers

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

Dealers

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

Ride-Hailing, Car Sharing & Rental

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

Driverless / Autonomy

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

Electrification

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

Connectivity

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

Other

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

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

Favourite stories this week…?

Two things caught my eye…

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

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News about the major automakers

BMW

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

Daimler

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

FCA

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

Ford

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

Geely (includes Volvo)

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

Honda

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

Mazda

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

Nissan (includes Mitsubishi)

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

PSA (includes Opel/Vauxhall)

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

Renault

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

Tata (includes JLR)

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

Tesla

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

Toyota

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

VW Group

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

Other

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

News about other companies and trends

Economic / Political News

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

Suppliers

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

Ride-Hailing, Car Sharing & Rental

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

Driverless / Autonomy

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

Electrification

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

Other

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

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 18^th September to 24^th September 2017. A PDF version can be found here.

Favourite stories this week…?

Three things caught my eye…

• I did it my way — Tesla are in the news again because they are rumoured to be working with AMD on their own chipset, having only recently moved from Mobileye to Nvidia (and not entirely seamlessly). At the risk of getting it all wrong, I’m going to take a different view on this to most… I don’t think that Tesla are planning to chuck Nvidia, I think that they are preparing for a situation where in order to meet automotive grade autonomy, you need more than one AI operating on independent hardware to be judged safe. If I’m at all correct then this could work out very nicely for Tesla. If they develop a primary and secondary AI, with a hardware set behind both, then they could sell the secondary set as an industry standard back-up. Let’s face it, there are so many people working on autonomy right now that loads of teams are going to get a workable solution. Part of why autonomy offers such great prospects for suppliers is because car makers may find themselves having to install several competing systems… everyone’s a winner and why shouldn’t Tesla join them? Of course, I could be completely wrong.
• Things can only get better — Volkswagen are taking whole pages out of Tesla’s book with their plans to make the MEB platform upgradeable so that used vehicle buyers can get a car with a specification and functionality that is better than when it came out of the factory gate. No word on whether they have any idea how to do this profitably, but it shows that they are really trying to think about how to disturb the conventions around depreciation and stop so much of the lifetime cost having to go into the first few years of ownership.
• Cooking on Gaz — Mitsubishi said that they are adding new model lines into their Russian plant (following on from recent news about Ford) and Kia say that market growth is outstripping their expectations, which at 5%-7% weren’t bad to begin with. No word from Renault but presumably they are having too much fun shifting cars to talk about it in the press.

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News about the major automakers

BMW

• Confirmed the production location of the new 8-series (from 2018) and the autonomous iNext (from 2021) as Dingolfing, Germany. (Economic Times of India)
• Rumoured to be planning an upgrade for the i3 BEV that will see a 42.5 kWh battery pack offered from late 2018 onwards — which would give about 250km of real-world range. (BMW Blog)

Daimler

• Said that it would invest $1 billion to launch an EQ-branded SUV at its Alabama, USA plant and build a battery facility nearby. The move will create 600 jobs and see production start at the “beginning of the next decade”. (Daimler)

FCA

• Said that it would recall almost 444,000 pick-up trucks for water pump faults. (FCA). The company will also recall almost 48,000 minivans with seat belt issues. (FCA)
• Has reportedly changed plans for the next generation Challenger and Charger models. Instead of being built on the platform from the Alfa Romeo Guilia, the vehicles will now be on the same platform as the Maserati Ghibli. This move will delay the introduction of the all-new models to 2021 and facelifts will not be added to the cycle plan for 2019. (Autofactil)
• Executives refused to be drawn on whether FCA is planning a plant in Morocco, saying only that the country was the most interesting place in the region. The company sees electric cars as unlikely to be profitable in the next ten years. (Les Echos)
• Saw rumours in the South Korean press that it was a takeover target for Hyundai. (Detroit Bureau)

Ford

• Announced a wide-ranging collaboration with Mahindra set to last for up to three years, at the end of which, further announcements could be made. The companies will set up joint groups to look at: mobility programs; connected vehicles; electrification; product development; sourcing and distribution. (Ford)
• Is planning shutdowns at five plants in the US and Mexico due to a downturn in sales. Flat Rock will idle for 2 weeks; Michigan for 1; Kansas City for 2; Cuautitlan for 3; and Hermosillo for 2. (Detroit News)
• The head of Ford’s smart mobility arm said that the company was working on a range of experiments to help it learn about a future state where there were fewer vehicles but more intensive use. (Economic Times of India)

Geely (includes Volvo)

• Volvo said that its new XC40 crossover will be available with a “hassle free” subscription package that includes all costs, except fuel, into a single monthly payment and provides a new car every 24 months. The scheme, called “Care by Volvo” will be available in selected markets including USA, Germany, UK, Italy and Spain. (Volvo)
• Declined to comment on stories from unnamed sources that Volvo is planning to increase investment in the South Carolina plant it is still constructing. The new plan would reportedly see a second production line added and 2,500 new employees on top of the 2,000 that are currently being recruited. (Bloomberg)
• Reportedly in talks with Indian company JSW Group about a $1 billion joint venture that would produce electric vehicles. (Money Control)

General Motors

• Saw workers go on strike at its Ontario, Canada plant after the company refused to give the plant the assurances that unions has demanded. (Detroit News)
• Will end the night shift at its Spring Hill, Tennessee, plant due to slower industry — about 1,000 employees will be affected. (Detroit News)

Hyundai / Kia

• Believes that 1 in 10 cars sold in Europe by 2020 — about two million vehicles — will be a B-SUV. (Faconauto)
• Saw rumours in the South Korean press that it was interested in a takeover of FCA. (Detroit Bureau)
• Kia’s Russia chief says that against the company’s initiation expectation of 5%-7% growth this year, they now believe that the Russia market will grow by up to 12%. (Reuters)

Mazda

• Recalling 60,000 Mazda 6 vehicles in the USA and Canada because of wiring problems that affect steering and airbags. (International Business Times)
• The CEO of Mazda Europe gave an interview where he explained the company’s emphasis on fossil fuel vehicles over electrification. In particular, he made repeated references to well-to-wheel assessments of electric vehicle efficiency and environmental benefits compared with ICEs — pointing out that where electricity is generated with extensive use of coal (e.g. Germany once the nuclear plants are closed), all that has happened is a shift of emissions from the tailpipe to the power plant. (Manager Magazin)
  • Implication: Intellectual merits of the well-to-wheel debate notwithstanding, we believe that the battle has been comprehensively lost: in the eyes of the consumers, media and politicians, emissions that are out of sight are out of mind. The reality for Mazda is that other carmakers are ensuring that they have electric vehicles in their range because they know that an ICE-only portfolio is exposed to a move against tailpipe emissions. It remains to be seen whether Mazda has the last laugh by letting others take the technology risk and only following once costs have fallen (although in the same interview, Mazda denied having a fast follower strategy).

Nissan (includes Mitsubishi)

• Infiniti executives said that the brand will launch an all-electric vehicle — likely to be a sports car — in 2019. The car will use Leaf technology but will have its own platform. (Autocar)
• Mitsubishi is to add a vehicle to its Kaluga, Russia plant. The company will employ 440 people on 2 shifts to make the Pajero Sport. (Mitsubishi)
• Following an in-depth research project, Nissan has found that 86% of people are driving the wrong colour of car for their personality. Apparently, more than half of participants claiming that they chose their favourite colour — so the implications are, of course, enormous (from a philosophical standpoint). (Nissan)

PSA (includes Opel/Vauxhall)

• Held a Capital Markets Day on 20^th September that covered Peugeot, Citroën and DS brands (Opel to follow later in the year). PSA highlighted their electrification strategy, product plan and the expected positive mix effects. (No online materials currently)
• The head of aramisauto.com, the used car sales platform PSA acquired, gave an interview about the operations of the subsidiary. In particular he said that he thought PSA was not at risk of cannibalisation by launching multiple used vehicle channels (it has another call cardays.fr) and set the Group target of 800,000 used car sales by 2021 in context — in 2016, aramisauto sold 32,000 units. (Journal Auto)
• There was speculation in the German press that a lack of supply of Opel Ampera-e BEVs, blamed in part on Opel’s desire to direct stock towards the Norwegian market, might be because Opel intends to withdraw the car from sale due to its lack of profitability. (Golem)
• Will reportedly launch a next generation Citroën C5 in 2020, following on from a new Peugeot 508 and DS DS5 in 2018. (Autofactil)

Renault

• Unveiled the Indian-market Captur B-sized SUV and said that, as with the Russia market version, it would be built on the low cost B0 platform (Renault)

Tata (includes JLR)

• Tata Sons was reportedly behind an anonymous acquisition of about 1.7% of Tata Motors stock. This week also saw speculation that changes to voting rights for preference shares in Tata Sons could see the power of the Mistry family substantially reduced.. (Economic Times of India)

Tesla

• Ending sales of the entry-level Model S 75. Unless things change, Model S and Model X will only come in AWD in the future. The move also sets the new entry level price of a Model S at $74,500. (The Verge)
• Reportedly working with AMD to create a chipset for autonomous driving incorporating its own proprietary technology, which could allow the company to reduce its reliance on Nvidia. (CNBC)
  • Implication: This action by Tesla, if true, may not be for the reasons posited in various press articles — to help Tesla become more vertically integrated. A possible alternative explanation is for redundancy, which is to say that future Tesla autonomous vehicles could have both an Nvidia and a Tesla/AMD chipset (one of which would be, in effect, a backseat driving AI). True safety critical systems have multiple layers of redundancy. At present, the popular press is using different sensor sets as a byword for redundancy but if we were in a nuclear power plant (and it’s for regulators to say whether that is an apt analogy, depending on their risk profile), that simply wouldn’t be sufficient. You need redundancy in the processing algorithm and chipset too. If Tesla is working on this basis then it shows a maturity of thinking; that autonomy may not be a zero-sum game for suppliers; and that Tesla could potentially sell such a system to other manufacturers. Then again, this could be a complete misreading of the company’s intentions.

Toyota

• Said that it has no plans to launch fully electric vehicles in India and will wait for the infrastructure to be developed before it looks to launch any vehicles. (Economic Times of India)
• Toyota’s president said that it would continue to make a variety of powertrain options available to customers; spanning ICEs, hybrids, BEVs and fuel cell vehicles because Toyota believes that customers rather than manufacturers should make the technological choices. He also said that the company had been “a bit late to the game” on BEVs. (Reuters)
• Said that it was launching a Japan only sub-brand called GR (Gazoo Racing) for sporty versions of its products. The range could be sold outside Japan eventually. (Auto Express)

VW Group

• Confirmed that Bentley will offer a Level 3 capable vehicle from 2019 onwards, starting with either the Continental or the next generation of the Flying Spur. The technology suite will be a variant of that launched on the Audi A8. (More)
• Suffered production disruption at Audi and VW plants, including cancelled shifts, as a result of the earthquake in Mexico. (Manager Magazin)
• Said in an in-house magazine article that it was intending to build functionality into the MEB platform that would enable cars to be upgraded after the first ownership cycle. The company intends to apply the same thinking to MQB-based products “gradually”. (VW)

Other

• Mahindra unveiled the e2oPlus compact electric car. The vehicle has a claimed top speed of 85 kmh, range of 140km and a price tag of 7.46 lakh INR (about $11,500). (Economic Times of India)
• Aston Martin’s CEO said that the prospect of tariff barriers post-Brexit wasn’t “keeping [him] awake at night” because he expects any tariff increase to be more than offset by a decline in the value of Sterling. He is more concerned about non-tariff barriers because it could hold up movement of inventory. (Interview on Bloomberg). He also said that an IPO would probably not take place in 2018, if at all. (Bloomberg)
  • Implication: We don’t really agree on the impact of non-tariff barriers as a cost comparable to tariffs and Sterling decline (although of course it is a problem for companies to resolve and deal with as best possible). Border controls will quite likely lead to increased inventory, but of the order of single digit days (i.e. about 1% of all working days = 1% one-time increase in inventory) — which is in line with BMW’s assessment of a 12 to 24 hour delay at the ports — and increased man hours processing documentation. This compares to ongoing impacts of several % of revenue due to tariffs. Trapped cash considerations should encompass increased inventory but also timing of tax rebates. Brexit may affect the exact rules governing EU-UK trade but all countries already have customs controls in place for non-EU goods and post-Brexit this is the worst-case template that companies should follow. The end result is an increased value of goods flowing through these customs processes, not a Wild West end state where anything goes and we can only guess at the implications. Look at Mazda, Subaru et al. They are already working to these border processes today. Where Andy Palmer is certainly correct to be concerned is that non-tariff barriers are likely to be a permanent post-Brexit feature whereas tariffs may only be in place for a few years. (See our Brexit paper here)
• British firm Ineos launched a website calling for partners in its project to create a spiritual successor to the Land Rover Defender. (Autocar)

News about other companies and trends

Economic / Political News

• Sky News said that it had obtained internal automotive industry memos on discussions with the UK government about Brexit planning in which various companies expressed their displeasure at the lack of detailed planning. (Sky News)
• France’s environment minister said that the country will introduce a range of new incentives to encourage people to use more environmentally friendly vehicles, including grants on nearly-new cars. It will also increase taxes on petrol and diesel. (Economic Times of India)

Suppliers

• Delphi announced that the autonomous driving system it was developing (for BMW amongst others) would run on Blackberry’s QNX platform in order to provide stability and security. (Delphi)
• French supplier Mecaplast has decided to change its name to Novares. (Les Echos)
• Plastic Omnium said that it was planning to sell its environmental division to allow it to fully concentrate on the automotive market. (Plastic Omnium)

Ride-Hailing, Car Sharing & Rental

• Uber was told by London’s transport regulator that it would not have its licence renewed when it expires at the end of September. The company is appealing the decision (it can continue to operate until the appeals process is exhausted) and is calling for regulators to open a dialogue on what it can do to improve. (BBC)
  • Since London has been generally receptive to new models of ride-hailing introduced by various companies, it seems likely that the licence suspension is genuinely motivated by grievances specifically aimed at Uber, rather than an attempt to shut down competition. Given Uber’s often heavy-handed approach to city regulators, it remains to be seen whether the company will be allowed to make changes that satisfy the regulator or whether it has effectively used up all its lives and is being kicked out of the market (in which case it could presumably simply take over an existing operator and use their processes instead of the ones it currently has).
• Uber is facing a Californian lawsuit from drivers complaining about its pricing model. Uber appears to have been calculating driver revenue based on the shortest route to the passenger’s destination at the time of pick-up (i.e. at which time it becomes fixed). The Passenger is then charged for the actual trip (invariably longer) and Uber keeps the difference. (Ars Technica)
• Citymapper and Gett announced a trial in London where they will run taxis on a fixed route during commuting hours. The fare will be fixed and the taxis will be shared, with users able to get in and disembark at any point on the route. (Citymapper on Medium).

Driverless / Autonomy

• Self -driving start-up JingChi raised $30 million and is reportedly already working on a $100 million Series A. (Deal Street Asia)
• Baidu launched a $1.5 billion fund called “Apollo Fund” to spend on driverless car projects over the next three years. (BBC)
• Information from the Uber/Waymo case showed that Waymo was seeking $2.6 billion in damages for one of the nine trade secrets it claims has been stolen. Given that Waymo’s entire spending on the project has been disclosed at just over $1 billion, it isn’t clear how this figure has been calculated. (TechCrunch)
• Self-driving trucking company Embark showed off its new headquarters and released a video showing two hours uninterrupted autonomous driving (it didn’t reveal at what point beyond the two hours the driver had to take over, or why). (TechCrunch)
• Google’s Waymo and Intel said that they were collaborating on self-driving car technology. Note that Intel is also a partner in BMW’s self-driving consortium as well as being a member of Baidu’s Project Apollo. (Intel)
• Tencent said that it will work on a strategic partnership with Guangzhou Automobile Group to investigate opportunities in e-commerce, insurance and electric vehicles. (China Money Network)

Electrification

• Electric scooter company Gogoro raised $300 million in a Series C round. The company has so far sold over 34,000 electric scooters. (TechCrunch)
• China is reportedly considering changing ownership rules to allow foreign carmakers to have majority in EV companies that are based in free trade zones. (Bloomberg)
• A group of ten large companies launched a project called EV100 to encourage carmakers to offer a wider range of electric vehicles. Several of the members, including Ikea and LeasePlan, have set a 2030 deadline to switch to all-electric fleets but the rest don’t yet feel that brave, (Inside Climate News)
• Mahindra unveiled the e2oPlus compact electric car. The vehicle has a claimed top speed of 85 kmh, range of 140km and a price tag of 7.46 lakh INR (about $11,500). (Economic Times of India)
• Rimac said that it will create a new high performance electric sports car, to cost around £1 million, with an intended production run of 100 units starting in 2018. (Autocar)
• Proterra announced that they had created a bus with a range of over 1,100 miles. It wasn’t totally clear how the test advanced the electric cause however since the journey was reportedly at a speed of 15mph — to the visible disgust of Keanu Reeves (probably). (Green Car)

Connectivity

• A Bloomberg story about vehicle-to-vehicle deployment put the price for a secure system at $350 per vehicle, the source of the estimate was seemingly either Ford or Delphi (or both). (Bloomberg)

Other

• Mapping company Ushr raised $10 million from companies including GM (Autonomes Fahren)
• The founder of flying car start-up Kitty Hawk said that, “three years from now flying cars will be very hot”. (Business Insider)

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 11^th September to 17^th September 2017. A PDF version can be found here. If you’re happy with just the text version then please read on…

Favourite stories this week…?

It was always going to be a week of big announcements due to the Frankfurt show and there was plenty of interest going on.

• Pure electric is ready for the big time — Jaguar said that they have 25,000 pre-orders for I-Pace (that’s 6 months’ worth of Model S); VAG are now saying that they will have 50 full BEVs in 2025 (up from a commitment to 30 earlier this year); BMW will have 12 by 2025; Daimler will have ten by 2022; and Renault-Nissan-Mitsubishi are gunning for 12 by 2022. By far the coolest news though was Honda’s EV city car set for 2019… no technical information was given but if the old adage “if it looks right, it goes right” holds true, we could be in for a treat.
• Electrification for all (whatever that means now), thanks Volvo — As suspected, Volvo’s announcement of full electrification (which was true only in the loosest sense of the word) has inspired everyone else to jump in. The word “electrified” has overnight become nearly as meaningless as “green”, an all-things-to-all-people buzzword. Honda, Daimler and VW were the latest to react this week with carefully worded promises.
• Let’s talk about Brexit — Am I just paranoid or does it seem odd that in a single week BMW, PSA and Toyota would all be openly critical of the progress made by the UK government (plus a mild rebuke from JLR’s CEO)? Perhaps journalists were just better at asking questions or maybe the car industry thinks this is a good time to ratchet up the pressure.
• Robo Taxis A Go-Go — The World could look very different by 2022… Ford and BMW had already set plans for autonomous vehicles on the streets by 2021. This week, VW joined them, Renault-Nissan-Mitsubishi said that they will do so from 2022 and GM said that they are ready right now. Daimler didn’t show their hand quite as much but have said that they will operate a similar service and their presentation did have an awfully big red thunderbolt above 2022 on the timeline.

Perhaps by now this is all old news, so here’s one other thing that was less-remarked upon… fuel cell company NanoFlowCell showed off a demonstration prototype with a new type of fuel cell. More interesting to me was that the whole thing was 48V — when contemporary cars are at 400V-800V. We may just have seen the missing link in the ICE to EV transition….

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News about the major automakers

BMW

• Showed an all-electric 4 door grand touring coupe with a 600km range, promising that it would go into production. (BMW)
• BMW’s head of purchasing said that company was “extremely concerned that the Brexit talks have been so piecemeal and slow so far”. (Bloomberg)
• Under a court ruling, BMW’s Leipzig plant will receive less state aid than it had been hoping for, €17 million instead of €45 million. The case had been pending since 2014. BMW can appeal to the ECJ for a final ruling. (Der Speigel)

Daimler

• Held a capital markets day where it said that the future outlook was a tougher business environment and that it would be challenged to meet mid-term margin targets, but that it would increase cost saving efforts in an attempt to do so. (Daimler) (CFO presentation here)
• Daimler’s CEO said that by 2022, electrified versions will be available for all the company’s models. (Reuters)
• Said it would invest in StoreDot, taking a seat on the board. Daimler hopes to be able to use StoreDot’s fast -charging battery technology in future vans. (Daimler)
• Said that it by the end of 2017 it would have converted 1,350 workers at its Vitoria, Spain plant to permanent contracts due to the success of the small commercial vehicles produced there. (Europa Press)

Ford

• Will add a second shift at its Russia joint venture plant in Elabuga, Tartastan due to increasing demand, creating 700 jobs. (Detroit News)
• Revealed that it was behind the scheme to test responses to driverless schemes by having a human driver disguised as a seat. The project wasn’t a total success as a journalist spotted the driver’s hands in August and their reporting became an internet sensation. Ford revealed that the unfortunate driver had to sit through 150 hours of tests. (Ford)

Geely (includes Volvo)

• Proton’s CEO will step down at the end of September and Geely will choose their replacement. (The Star)

General Motors

• The CEO of GM subsidiary Cruise Automation said that the company’s 3^rd generation product was ready for mass-production. (Medium)
• Labour negotiations in South Korea are reportedly not going well (again), leading to speculation of strikes around the end of the year affecting Hyundai/Kia. Workers are asking for pay rises and a substantial bonus. (Wards Auto)

Honda

• Showed a compact EV concept at the Frankfurt show and said that a production version would be on sale in Europe by 2019. Honda said that it will offer an electrified version of all models launched in Europe from now on and that by 2025 it expects two thirds of its European sales to be electrified vehicles. By 2030, it expects to reach the same percentage globally. (Honda)

Hyundai / Kia

• Labour negotiations in South Korea are reportedly not going well (again), leading to speculation of strikes around the end of the year affecting Hyundai/Kia. Workers are asking for pay rises and a substantial bonus. (Wards Auto)

Mazda

• Is reportedly planning that all its vehicles will be electrified (including the use of hybrids) by the early 2030s — although the company wouldn’t confirm this officially. (Times of India)

Nissan (includes Mitsubishi)

• Announced an updated set of targets for the Renault-Nissan-Mitsubishi alliance to achieve by 2022: annual sales of 14 million vehicles; €240 billion turnover; €10 billion of synergies (an artificial figure — €5 billion claimed currently). The group intend to have 12 purely electric vehicles on sale by 2022 and will launch various levels of driverless systems across 40 vehicles, culminating in a fully autonomous vehicle on sale in 2022. The alliance aims to become an operator of robo taxis, without providing further details. (Nissan)

PSA (includes Opel/Vauxhall)

• Senior executives expressed frustration with the pace of Brexit talks saying that if they had to wait 2-3 years for clarity on the business environment, there was “a big question mark about our future investment” in the UK (i.e. Vauxhall). (Bloomberg)
• Announced an employee-only share sale aiming to raise €25 million. (PSA)

Renault

• Announced an updated set of targets for the Renault-Nissan-Mitsubishi alliance to achieve by 2022: annual sales of 14 million vehicles; €240 billion turnover; €10 billion of synergies (an artificial figure — €5 billion claimed currently). The group intend to have 12 purely electric vehicles on sale by 2022 and will launch various levels of driverless systems across 40 vehicles, culminating in a fully autonomous vehicle on sale in 2022. The alliance aims to become an operator of robo taxis, without providing further details. (Nissan)

Tata (includes JLR)

• Said I-Pace has reached 25,000 orders in a TV interview. Asked about customer reaction to I-Pace he said it was “just another car with a different propulsion system”. Explaining the concept shared steering wheel displayed last week he said that he was “convinced” customers would want to own cars but that they might want to share them with friends. (Bloomberg)

Tesla

• CEO Elon Musk tweeted that the company’s semi-truck will be unveiled on 26^th (Business Insider)
• Has created a smaller and lower-powered (and cheaper) supercharger for urban areas. With a rating of 72 kW, the units are still more powerful than most other contemporary installations. (Tesla)
• New patents for battery swapping stations have recently been filed by Tesla. These appear to show a battery station that can be moved to different areas. (Inside EVs)

Toyota

• A senior executive said that the company was becoming increasingly concerned over Brexit. He called the company’s future in the UK “a big question mark” and said that although a few months ago the UK government had expressed complete confidence in a tariff-free UK-EU trade deal, “they are not saying that any more”. (The Guardian)
• Said that it will add a second style of hybrid to its European line-up, moving beyond fuel economy considerations (the traditional preserve of the hybrid) by offering a version that will increase power. (Toyota)
• Said that it was already close to its 2020 goal of a 50% sales mix of hybrid vehicles in Western Europe. Yaris is at 45%, RAV4 at 52%, Auris at 65% and C-HR at 77%. (Toyota)

VW Group

• Announced a plan to bring 80 new electrified (not full electric = 50 BEV, 30 PHEV) vehicles to market by 2025 and that by 2030 the entire VW Group product portfolio (~300 nameplates) would be electrified. The company said that this would require €20 billion in investment and that it would need suppliers to provide 150 GWh of battery capacity by 2025 — forecasting its first phase procurement bill at €50 billion (the figure looks too high for an annual bill). (VW)
  • Implication: Given that earlier this year, VAG were talking about “more than 30” electric vehicles by 2025 (here), this recent announcement suggests that the company is becoming more bullish on full-electrification as it does further research.
• Said that of the 50 new fully electric vehicles by 2025, 23 of them will be for the VW brand. At Frankfurt, the company showed the ID Crozz, a small crossover/SUV that it said will be launched in 2020, around the same time as the ID C-Car (mini-bus to follow in 2022). The performance specifications for the I.D. Crozz are: 225 kW motor, 180 kmh top speed and 500 km range. VW mentioned that fast charging would get the battery to 80% of capacity in 30 minutes, implying that it is a lower-rated onboard charger than will debut in the Mission E from Porsche. (VW)
• Said that it would be putting autonomous cars on the streets in 2021. (VW)
• Audi’s Aicon autonomous vehicle concept pointed towards long-distance driverless travel, with a claimed ability to travel at high speeds and a range of over 700km. Audi majored on the contrast with robo taxis which are “reduced to pure functionality” — an interesting statement of fact, given that no robo taxis exist! (Audi)
• A spokesman for the Porsche and Piech families waded into the debate about selling off parts of the group saying he saw “no need” for the separation and that the topic had not been discussed at the supervisory board. (Der Spiegel)
• Bentley executives said that they are planning an all-electric, possibly launching in 2019. (Autocar)
• Porsche’s Chairman said that the Mission E all-electric sports car would be priced at about the same level as a Panamera, although since it will be offered in different power levels this might only be true for the entry level. (Car)
• Lamborghini executives said that they aren’t yet planning all-electric vehicles, although they are working on hybrid electric powertrain. Note that Lamborghini have previously been rumoured to be working on an all-electric product and Bentley and Audi both seem set to release electric sports cars based on the Mission E platform, so Lamborghini would be the only stablemate not to follow suit. (Reuters)

Other

• The CEO of Great Wall suggested that it was investigating whether to create a joint venture factory in the USA with two other unnamed Chinese automakers. (Les Echos)
• European OEM group ACEA published a proposal for future EU emissions rules. The group wants 2030 fleet average targets to be 20% lower than the 2021 limits. Since 2021 levels are 95g/km, this suggests 76g/km but the ACEA paper seems at pains to mention no specific figure. The proposal is for a check on progress in 2025 at which point the target could be revised up or down. (ACEA)
  • Implication: OEMs are desperate not to have a 2025 target set. Their proposal appears calculated to offer a substantive looking target for 2030, whilst leaving some theoretical wriggle-room if this looks too difficult by 2025.
• Storied UK sports car brand TVR unveiled its first new product post resurrection. The Griffith comes with 500hp and a £90,000 price tag for the first run of 500 units. (Auto Express)
• Vehicle manufacturing resumed in South Africa after a 17-day strike by employees at parts suppliers had deprived car plants of the parts they needed. (Business Report)

News about other companies and trends

Economic / Political News

• European passenger car sales for August were up 5.6% to 865,047 units. Italy, Germany, Spain and France all increased, more than offsetting reductions in the UK. (ACEA)

Suppliers

• Autoliv held a capital markets day and said it was looking at splitting into two businesses: passive safety and electronics. The businesses would have 2020 revenue targets of €10 billion and €3 billion respectively. (Autoliv)
• Autoliv and Adient are teaming up to develop seats and safety systems for autonomous vehicles that can move around and protect passengers regardless of their position. (Autoliv)
• Delphi announced it had made a major step towards the spin-off of its powertrain division by issuing debt for the subsidiary. (Delphi)
• Continental purchased German parking app parkingpocket. (Munich Startup)
• Samsung is launching a $300 million fund with subsidiary Harman to focus on the development of connected and autonomous technologies. (Samsung).

Dealers

• Research by Santander Consumer Finance showed that UK dealers are becoming concerned about the rise of “click to buy” websites from manufacturers — with 1/3 citing it as a substantial future threat. Dealers appeared slightly confused about what to do next though: 55% of them believe the competition are doing a better job. (Automotive Management)

Ride-Hailing, Car Sharing & Rental

• French car rental start-up Virtuo said that it had raised €7.5 million to fund expansion into European cities outside France. (Journal Auto)
• Alphabet (Google) is reportedly looking at making a $1 billion investment in Lyft. (TechCrunch)
• Dutch car sharing company SnappCar has taken over German rival Tamyca. (Fleet Europe)

Driverless / Autonomy

• Audi and Samsung’s new fund made an investment in TTTech, a connected car company. (Samsung)
• A consortium involving 13 OEMs will run a 4 year research project called L3Pilot to investigate autonomous driving technologies and consumer behaviour in European cities and on highways. The project has a budget of €68 million (with nearly half of this coming from an EU grant). (VW)
• Court documents released as a part of the Waymo-Uber court case say that Google/Alphabet spent $1.1 billion on its driverless program between 2009 and 2015. (IEEE)
• European not-for-profit safety tester NCAP issued an outline of a 2025 safety testing regime that calls for standard fitment of autonomous technologies that can reduce accidents, including vehicle-to-vehicle communication and emergency steering. (Autocar)
  • Implication: Although it isn’t the official safety body, NCAP’s ratings have become the de facto standard of safety. When they make technologies mandatory for a 5 star (top) rating, as they have in the past, manufacturers follow (good news for suppliers).
• Waymo’s CEO said that he thinks self-driving trucks are vying with robot taxis for the first widespread implementation and that the company is still trying to get OEMs to sign up to its platform. (Bloomberg)
• Self-driving start-up Zoox is reportedly in talks with SoftBank about a sizeable investment (TechCrunch)
• The Renault-Nissan-Mitsubishi alliance intends to have a fully autonomous vehicle on sale in 2022 and to become an operator of robo taxis, without providing further details. (Nissan)
• VW said that it would be putting autonomous cars on the streets in 2021. (VW)
• Audi’s Aicon autonomous vehicle concept pointed towards long-distance driverless travel, with a claimed ability to travel at high speeds and a range of over 700km. Audi majored on the contrast with robo taxis which are “reduced to pure functionality” — an interesting statement of fact, given that no robo taxis exist! (Audi)

Electrification

• Borgward executives talking at Frankfurt said that the brand is making progress towards launching its first vehicle and stated lofty ambitions: aims for 800k in 2020, 1.6 million in 2025. (Car)
• Porsche’s Chairman said that the Mission E all-electric sports car would be priced at about the same level as a Panamera, although since it will be offered in different power levels this might only be true for the entry level. (Car)
• Media were agog at the Aspark Owl unveiling, with the company making claims about a sub 2 second 0-60 time. (Top Gear)
• NanoFlowCell demonstrated their Quant fuel cell car. Of more interest that the fuel cell technology is perhaps that the entire electric system (including batteries and drivetrain) is a 48V system — the same level being installed as ICE augmentation now. (NanoFlowTech)
  • Implication: The concept shows that there is plenty of scope within a 48V system — assuming further development — to achieve capabilities that are currently forecast as being the exclusive reserve of higher voltage systems.
• Chinese state-owned energy supplier State Grid Corporation of China is reportedly finalising plans for a network of 167,000 charging points throughout the country. (Faconauto)
• Daimler said it would invest in StoreDot, taking a seat on the board. Daimler hopes to be able to use StoreDot’s fast -charging battery technology in future vans. (Daimler)
• The Renault-Nissan-Mitsubishi alliance is targeting 12 purely electric vehicles on sale by 2022. (Nissan)
• Honda showed a compact EV concept at the Frankfurt show and said that a production version would be on sale in Europe by 2019. Honda said that it will offer an electrified version of all models launched in Europe from now on and that by 2025 it expects two thirds of its European sales to be electrified vehicles. By 2030, it expects to reach the same percentage globally. (Honda)
• BMW showed an all-electric 4 door grand touring coupe at Frankfurt with a 600km range, promising that it would go into production. (BMW)

What happened in the automotive industry last week? Please enjoy our digest of industry news for the week of 4^th September to 10^th September 2017. A PDF version can be found here. If you’re happy with just the text version then please read on…

Favourite stories this week…?

It’s all about hedging your bets… four companies (one newby and three established) showed this week that they see a path to success through picking trends first and companies second.

• Let’s do LIDAR — Delphi has invested in two LIDAR companies — Leddartech and Innoviz.
• No car for me — Daimler announced stakes in car sharing firm Turo (which operates in the peer-to-peer space that Croove operated in, rather than B2C where Car2Go is positioned) and on-demand bus company Via, with which it has established a joint venture that will launch services in Europe (but using minbuses rather than conventional taxis like myTaxi).
• Baby you can drive my car — PSA said that it has been working with self-driving start-up AImotive, even though it already has projects underway with nuTonomy as well as a hand in the driverless car research of Vedecom and an in-house development team.
• Look Ma, no hands — Lyft said that it was going to undertake trials of self-driving vehicles with drive.ai, adding to a roster than includes Waymo, nuTonomy, Cruise and its own recently started in-house teams.

This all makes great business sense and it’s a shame that too few others are following the same path. With countless examples of ideas that were before their time and “best” technical solutions that didn’t become the industry standard, why back winners so early on?

Find our archive here.

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News about the major automakers

BMW

• BMW’s CEO said in his pre-IAA show remarks that the company intended to have 12 all-electric vehicles by 2025 (in addition to 13 other “electrified”, thought to mean PHEV, products) and that in future the company would be able to equip every model with any type of drivetrain. At the Frankfurt show, BMW will unveil an all-electric 4 door product that could sit between i3 and i8. (BMW)
• Unveiled a series of nearly production-ready concepts for its new car family with the X7 large SUV (BMW) and 8-series large coupe joining the 7-series saloon in the line-up. In addition to showing off the cars, BMW mentioned a mobility “add-on” that would allow owners of one of the vehicles to easy rent one of the others. (BMW)

Daimler

• Announced that it had been the lead investor in a financing round for US peer to peer carsharing service Turo and that as a part of the deal, Daimler’s own peer to peer carsharing service Croove would be folded into Turo’s operations and Turo would enter the German market in 2018. (Daimler)
• Created a joint venture with on-demand shuttle bus company Via that will see Daimler invest $50 million and licence Via’s technology to launch services in Europe, starting with London, where an on-demand bus service will begin in late 2017. The companies will also work together to develop an optimised Mercedes van for the service. (Via)
• Will show a concept called EQA at the Frankfurt show that will be Mercedes’s vision of how a shared car might look. (The Verge)

Ford

• The UAW’s chief representative for Ford said that Ford CEO has told him that the strategic review to be presented on 3^rd October will not call for additional job reductions in the US. (Bloomberg)

Geely (includes Volvo)

• Volvo said that it was buying Luxe, a premium valet and concierge service. The acquisition will bring key staff and the Luxe’s existing technology into Volvo, the company appears to have no interest in continuing to offer the service. (Volvo)

General Motors

• At an investment bank conference, the head of the mobility program said that Maven Gig vehicles had an average utilisation rate of 60% on hourly leases and 40% on daily leases. She also said that she believes the company currently has no competition in terms of the breadth of activities it is undertaking around mobility services. She sees Maven’s fleet as being 2/3 electric “going forward”. (GM — Audio only)

Honda

• Said that the previously announced all-electric, China-only, vehicle it is planning for introduction in 2018 will be sold under the brands of both its joint ventures (with GAC and Dongfeng). Honda also said that it will “proactively” explore car sharing opportunities in China. (Honda)

Nissan (includes Mitsubishi)

• At the launch of the new Leaf, Nissan said that the new generation would have a 40 kWh battery and 378km (European drive cycle) range (150 miles on US EPA rating) as well as a number of driver assistance technologies. Nissan executives said they hoped to sell 90,000 vehicles per year and that the company believed electric technology alone was “not enough” to change travel and buying behaviour and therefore they had combined the all-electric vehicle with new technologies in order to present a more compelling prospect to customers. Nissan will be progressively offering features of a service called Nissan Intelligent Integration which aims to help customer’s manage their overall energy supply. (Nissan)
• During the media reveal of the new Leaf, Nissan executives said that a higher performance derivative to launch in 2018 would have a 60 kWh battery and that “we might have a crossover [SUV] EV shortly in the future”> (Economic Times of India)

PSA (includes Opel/Vauxhall)

• The French fraud prevention office reportedly believes PSA may have calibrated diesel engines to perform only during homolgation tests, affecting two million vehicles. PSA said it was “outraged” by the claims and pointed to a earlier French government report which said the company done nothing wrong. (Les Echos) & (PSA)
• Has been working with self-driving start-up AIMotive since May on self-driving technologies. AImotive say that their self-driving solution can be applied to any vehicle. (TechCrunch)
• CEO Tavares gave a joint interview with the new Opel CEO in which he said that PSA would provide electrification technologies to Opel but that the company must use them profitably. (Reuters)

Renault

• Launched a digital development centre in Russia to create technologies for global markets. (CCFA)
• Creating an immersive simulator to test the behaviour and response of drivers and passengers to autonomous vehicles, investing €25 million in the project. (Renault)
• Said it was working towards a localisation target of 80% for the Indian derivative of the Captur (Economic Times of India)
• Will show a concept car called Symbioz at Frankfurt that shows how Renault sees autonomous, electric and connected trends coming together in a single product. (Renault)

Tata (includes JLR)

• JLR said that from 2020, every new product launched will be electrified. The company says that it will have a portfolio that includes mild hybrid (48V), plug-in and fully electric vehicles. JLR’s wording implied that in some instances, “electrification” could mean no more than a 48V system being offered alongside ICE-only powertrains. (JLR)
• Showed off its vision of travel in 2040 called the Jaguar Future Type. JLR has joined Daimler and BMW by adopting the Connected, Electric, Autonomous, Shared breakdown of future vehicle attributes. Much of JLR’s presentation was around a new in-car assistant technology called Sayer which will exist in the cloud and can thereore be downloaded into different vehicles. (JLR)
• JLR’s CEO gave a speech in which he declared that the company was leading the mobility “revolution” but said that the UK government needed to do more to support technological change. Amongst other things he said that the government had “no detailed plans” for the implementation of an ICE ban by 2040. (JLR)
• Reportedly suffering from industrial relations problems at the Jamshedpur factory. A mistake in employee pay cheques is being used as leverage by unions to demand increased permanent (as opposed to temporary) hiring. (Economic Times of India)

Toyota

• Toyota’s chairman said in a television interview that he thinks two or three more technological breakthroughs are needed in order for fully electric vehicles to become competitive with ICE vehicles. He said that he was unable to say when a vehicle powered by a battery would be economically viable. He also said that major carmakers would have to partner with start-ups on new mobility technologies and those that didn’t “would not survive”. (InsideEVs)

VW Group

• VAG’s CEO said that the company was working on the sale of businesses accounting for 20% of the group’s revenue. (Manager Magazin)
• The leader of the CDU in Lower Saxony (the German region where VW are based, that also has seats on the board) called for next VW Group CEO to be from outside the automotive industry. The CDU is currently ahead in polls with the state election due in October. (Reuters)
• Will develop mobility services with IBM under a five year cooperation agreement. (VW)
• Audi is reportedly having problems getting its L3 Traffic Jam Pilot system approved by European regulators (CCFA)
• Audi will display two concepts at Frankfurt: the first will be a “highly automated” L4 car featuring technologies that will allow the driver to sometimes give control to the vehicle in fully automatic mode; the second will be a L5 car designed primarily for long journeys. (Audi)
  • Implication: Here’s hoping that the Audi L5 concept is something more than a version of the Mercedes F-105 (because that concept is two years old now)

Other

• Mahindra announced an all-electric rickshaw called the e-Alfa Mini with a range of up to 85km. The vehicle will carry 4 passengers and retail at 1.12 lakh rupees (about $1,800). (Mahindra)

News about other companies and trends

Economic / Political News

• China is looking to set a deadline for the end of sales of new ICE powered cars according to the vice minister of industry and information technology. (Bloomberg)
• Scottish politicians said that they intended to phase out new sales of petrol and diesel vehicles by eliminating the “need” for them by 2032. (Scottish Government)
• UK new car registrations of 76,433 vehicles in August fell (6.4)% on a year-over-year basis. (SMMT). Light commercial vehicles saw a 1.5% YoY increase to 15,619 units. (SMMT)
• German passenger car registrations in August of 253,679 units were 3.5% up on a year-over-year basis. Electric cars were up 143%, albeit from a low base. Diesel engine sales were down (13.8)% and took a 37.7% share of the market. (KBA)

Dealers

• UK dealer Lookers has created a 3D virtual showroom on Facebook in order to increase its interaction with customers. (Motor Trader)

Ride-Hailing, Car Sharing & Rental

• Daimler announced that it had been the lead investor in a financing round for US peer to peer carsharing service Turo and that as a part of the deal, Daimler’s own peer to peer carsharing service Croove would be folded into Turo’s operations and Turo would enter the German market in 2018. (Daimler)
• Daimler created a joint venture with on-demand shuttle bus company Via that will see Daimler invest $50 million and licence Via’s technology to launch services in Europe, starting with London, where an on-demand bus service will begin in late 2017. The companies will also work together to develop an optimised Mercedes van for the service. (Via)
• Lyft said that it would introduce self-driving vehicles in collaboration with ai. Memo: Lyft is already working with GM’s Cruise operation and has recently begun its own in-house autonomous effort. (Lyft)
• Estonian ride-hailing start-up Taxify saw the launch of services in London run into problems when the city’s transport regulator told it to suspend services because they were dissatisfied with the way in which Taxify circumvented licencing application requirements by partnering with an existing firm. (Telegraph)
• GM’s mobility chief said that Maven Gig vehicles had an average utilisation rate of 60% on hourly leases and 40% on daily leases. She sees Maven’s fleet as being 2/3 electric “going forward”. (GM — Audio only)

Driverless / Autonomy

• UK start-up FiveAI said that it had raised £35 million from a combination of public and private sources to fund development of an autonomous on-demand transport service. Similar to Uber, the company is developing its own self-driving solution as well as intending to run the server. (TechCrunch)
• Waymo (Google) gave an overview of how they use simulation to increase the rate of AI learning for autonomous vehicles (Waymo on Medium)
• LIDAR company LeddarTech announced that it had raised $101 million from investors including Osram, Delphi and Magneti Marelli. (Leddartech)
• LIDAR company Innoviz announced it had raised $65 million from a variety of investors including Delphi and Magna. (Innoviz)
• Lyft said that it would introduce self-driving vehicles in collaboration with ai. Memo: Lyft is already working with GM’s Cruise operation and has recently begun its own in-house autonomous effort. (Lyft)
• Uber to said that it will electrify its entire London fleet UberX fleet by 2019, with all Uber vehicles to follow by 2025. The company will offer financial incentives for drivers to buy new vehicles, funded by a £0.35 levy on all London trips. (TechCrunch)

Electrification

• Future Mobility, the Chinese all-electric start-up led by a group that includes a number of executives from BMW’s electric car program said that the brand name for its cars would be Byton and that sales would begin in China in Q4 2019. (Economic Times of India)
• Detroit Electric said that it would launch three vehicles within the next three years, putting to use some of the £1.8 billion funding it previously announced following a joint venture agreement with Chinese compay Far East Smarter Energy Group. The company plans to recruit around 200 engineers in the UK to work on the project. (Detroit Electric)
• British start-up Alcraft Motor Company unveiled a prototype all-electric sports car and launched a crowdfunding campaign to raiase £600,000 in order to make a prototype. The car is intended to have a 200-250 mile range. (Electrek)
• LG Chem and SK Innovation said that they would begin production in 2018 of EV batteries with an NCM 811 chemistry that improves energy density and reduces cost. (Push EVs)
• Consulting firm AlixPartners published an electrification index to track progress of electric vehicle take-up by country and manufacturer. (AlixPartners)

Other

• Consulting firm Roland Berger published the second edition of their automotive disruption tracker, saying that in general, Asian countries were doing more to prepare their citizens and infrastructure for emerging automotive and travel technologies than European countries or the USA. (Roland Berger)

What happened in the automotive industry last week? Please enjoy the round-up for the week commencing 28th August 2017. Stories are arranged by company and topic, there are duplicates in case are only interested in some sections.  A PDF version can be found here. If you’re happy with just the text version then please read on…

Favourite story this week…?

I’m wondering about GM’s approach to pricing their “hands-off” Supercruise feature. The initial guidance was that it would be $2,500 as an option. Now, it’s $5,000 as an option on lower series models but free on higher series versions. By not including the hardware as standard, GM is limiting the rollout of (and consequent data collection from) the system — indicating that either they don’t see the same benefit of fleet learning that Tesla do, or that they’ve taken a bit of a traditionalist approach to pricing, and impaired themselves in the long term as a result.

I took a look at some Google Trends data around attitudes to diesel in Germany. Since other studies show that buyer sentiment appears to be moving away from diesel in a big way, I wanted to find out (in a not entirely serious manner) whether longer term issues, especially bans, were much on their minds… take a look here.

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News about the major automakers

BMW

• Issued a press release detailing some of the ways in which new technology has been incorporated into the company’s production process. Although some of the techniques described, such as a feedback loop between blanks and press tools, news that BMW conducts analysis of bolt rundown measurements and installs vibration sensors on machinery won’t be troubling competitor analysis teams at other OEMs. (BMW)
• Showed the design of the Mini E electric car ahead of the full unveiling at Frankfurt. (BBC)

Daimler

• Showed a new concept vehicle called Smart Vision EQ fortwo. The vehicle shows how Smart’s cars could evolve into driverless pods in future and is similar in many details to the Mini concept unveiled in 2016 (except that the Mini was a mixed-mode manually-driven and autonomous concept). (Daimler)
• Announced the creation of a division called Lab1886 that will operate four sites globally. The company will invite employees to pitch their ideas to an internal VC-like board that will then select projects for internal incubation. The organisation will also provide support to external companies, such as (flying car start-up) Volocopter. (Daimler)

FCA

• Reinforcing off-the-record comments from FCA executives in the prior week, CEO Marchionne said that the company was working on its business plan rather than a big deal to sell the group. He forecast that by the time of his intended departure (April 2019), the company would “ideally” have spun off its components division (including Magneti Marelli) but that Alfa-Romeo and Maserati would likely be “too immature” to be a standalone company. (Bloomberg)
• Saw S&P raise the outlook on its long term debt to positive from stable. The current rating is BB. (FCA)
• Suffered production stoppages on the Pacifica and Grand Caravan assembly lines due to flooding. (Auto Guide)

Ford

• Reported US sales for August of 209,897 units, down (2.1)% on a year-over-year basis. The decline was more than explained by drops in SUVs and Cars. (Ford). Ford’s sales in India were also down considerably YoY, a drop of (40)%. (Economic Times of India)
• Said it will recall approximately 1.2 million vehicles in North America for two separate issues — airbags and steering problems. (Ford)
• Ford’s VP of manufacturing in Asia gave an interview in which he said that energy costs for production are currently higher than personnel costs in the region and then gave some examples of how Ford is trying to reduce energy usage. (AMS)

General Motors

• Said that Super Cruise (GM’s L2/L3 highway driving solution) would be a $5,000 option on base models of the Cadillac CT6, although it will come as standard on higher end vehicles (Automotive News).
  • Implication: This pricing is a considerable change from the earlier forecast $2,500 level (Detroit News). It seems that GM have chosen the new positioning to drive customers to the higher trim models rather than encourage take-up. The degree to which this will affect how many buyers purchase the system is unclear and also shows that GM either doesn’t value or doesn’t understand, the additional knowledge gained through higher fleet mileage (in stark contrast to Tesla, who won’t stop going on about it).

Honda

• Announced July production results. Global production of 397,138 units was up 6.6% on a year-over-year basis. (Honda)
• Said that at the Frankfurt motor show it will release details on the next steps of its plan to produce more electrified vehicles (for Honda, this includes Hybrids) for Europe. (Honda)

Hyundai / Kia

• Lost a legal case with South Korean trade unions that means overtime pay in future will be higher. (Reuters)
• Suffered production disruption in China due to a payment dispute with a fuel tank supplier. (Bloomberg)

Mazda

• Announced July production results. Global production of 132,920 units was up 0.2% on a year-over-year basis. (Mazda)

Nissan (includes Mitsubishi)

• Announced that the Renault-Nissan Alliance would create a new joint venture with Dongfeng, to be called eGT New Energy Automotive, to produce electric vehicles in China. Ownership will be 25% Nissan, 25% Renault and 50% Dongfeng. The initial product will be an A-sized SUV with a sales target of 120,000 units per year, to be launched in 2019. (Nissan)
• Announced July sales and production results. Global sales of 448,906 units was up 4% on a year-over-year basis. (Nissan)

PSA (includes Opel/Vauxhall)

• Completed the move from its central Paris Grand Armée headquarters. (Les Echos)
• Is recruiting more workers in Mulhouse to satisfy demand for Peugeot 2008 vehicles. Sources reported that up to 800 new temporary positions were being created. (France Info)
• The head of Faurecia said that the company was ready to make a major acquisition to give it a fourth “leg” beyond seats, interiors and exhaust treatment. He told French media that he is preparing options ahead of an October board meeting but currently no contact has been made with potential targets. (Les Echos)

Renault

• Renault has collaborated with charging company Connected Energy to integrate used electric car batteries into high power chargers. The idea is that the battery can be charged from the local grid and then discharge at a high rate to a waiting electric vehicle. This allows higher charging rates than many local grids can provide (without an expensive infrastructure upgrade). (Inside EVs)
• Announced that the Renault-Nissan Alliance would create a new joint venture with Dongfeng, to be called eGT New Energy Automotive, to produce electric vehicles in China. Ownership will be 25% Nissan, 25% Renault and 50% Dongfeng. The initial product will be an A-sized SUV with a sales target of 120,000 units per year, to be launched in 2019. (Nissan)

Suzuki

• Announced July production results. Global production of 282,603 units was up 8% on a year-over-year basis. (Suzuki)

Tata (includes JLR)

• Tata’s chairman was forced to defend JLR chief Ralf Speth’s pay, saying that his circa £7 million annual remuneration was “not high at all” and “slightly on the low side”. (Economic Times of India)

Tesla

• Saw some instance of high discounts and generous financing terms being offered on Model S and X models in the USA (up to $30,000 per vehicle & 0.99% APR) to improve sales figures ahead of the Q3 close. The deals appeared to only relate to vehicles in inventory (which Tesla famously tries to keep to a minimum). (Inside EVs)
• Said that mass production of solar roof tiles at its Buffalo plant had now begun. (Economic Times of India)
• Following a growing number of grievances aired by employees in the media, the NLRB (US labour relations board) said it had filed an official complaint against the company. Tesla accused unions of agitation. (Business Insider)
• CEO Elon Musk said that the company was preparing a software update that would allow owners to use download images and video from their Autopilot system without having to use a dashcam from a 3^rd (Electrek)

Toyota

• Announced five companies it had decided to work with on solving future mobility and ownership challenges: Caulis (risk assessment and security); giftee (e-gifts); Sharenori (car sharing); Nightley (customer data collection) and Ateam (services for used car owners). (Toyota)
• Participated in ride hailing service Grab’s latest fund-raising round and announced a collaboration to install Toyota-developed data recording devices in Grab vehicles. (Toyota)
• Announced July production results. Global production of 824,943 units was down (0.2)% on a year-over-year basis. (Toyota)
• Said it was creating a new group called Connected Technologies to develop in-car user experiences. The team will be made up of around 100 people and combine existing IT and product development employees. (Toyota)

VW Group

• Unveiled the new Polo — the sixth generation of the B-size vehicle to go on sale. The MQB-based car will feature safety technologies such as adaptive cruise control (as an option). Petrol engines now feature cylinder deactivation and diesel engines will be fitted with urea exhaust treatment. (VW)
• Porsche said that it would begin equipping cars with InnoDrive, a system that uses mapping and weather data to adjust vehicle settings such as suspension and engine mapping in order to optimise it for local road conditions in real time. (USA Today)
• Will recall over 280,000 Passat and CC vehicles in the USA due to problems with the fuel pump. (CCFA)
• As widely predicted in the German press, Audi announced a raft of new appointments to its managing board to make changes to “finance, IT and integrity, marketing and sales, human resources and production and logistics” (i.e. everything operational except product development and the CEO). (Audi)

Other

• Aston Martin said that all its vehicles will be powered by either hybrid or fully electric drivetrain by the mid 2020s. (TechCrunch)
  • Implication: This is in line with market expectation. High power engines are already featuring extensive use of electric motors to provide an overboost facility (e.g. McLaren P1) and Ferrari has already made a similar announcement. Since Aston Martin’s V8 engines are supplied by Daimler, it is likely only the V12 engine would need to be developed independently for electric drive — which could leverage many of the same components as the V8 anyway.
• Qoros unveiled the Model Young SUV and gave some details of its platform sharing strategy with Chery models. The vehicle will come with 5G connectivity supplied through a collaboration with China Mobile. (Qoros)
• As an influx of latecomers to the UK scrappage incentive trough arrived, observers couldn’t help but remark on the “commercial” nature of the discounting. (The Guardian)
• Subaru announced July production results. Global production of 73,361 units was down (5)% on a year-over-year basis. (Subaru)

News about other companies and trends

Economic / Political News

• US light vehicle SAAR for August was reported as 16.03 million units. (Wards)
• Italian sales for August of 84,104 vehicles were up 15.7% on a year-over-year basis. (UNRAE)
• Spanish sales for August of 72,470 vehicles represented a 13.1% year-over-year improvement. (Faconauto)

Suppliers

• The CEO of Samsung-owned Harman said that the business aims to triple revenues by 2025. The company intends to grow its non-automotive products considerably through smart-speaker products, which will likely have widespread automotive application too. (Reuters)
• Siemens will buy self-driving simulation company Tass. (Economic Times of India)
• Magna showed off its MAX4 self-driving system and said that it expected vehicles to be present in geo-fenced areas “quite soon”. Magna’s forecast for overall sales of autonomous vehicles is that in 2025, 4% of sales will be Level 4 vehicles. (Bloomberg)
• ZF announced that it would be selling its body control systems business to Chinese firm Luxshare. (ZF) Separately, ZF announced a strategic relationship with the University of California, Berkley to work on automotive applications of machine vision and deep learning. (ZF)
• Autoliv said that it had won a contract to supply high resolution radar for use in autonomous vehicles from a “global automaker”. Although the OEM in question wasn’t specified, Autoliv have recently been collaborating with Volvo… (Autoliv)
• Continental, not wanting to be outdone by rival Bosch, unveiled a keyless entry solution using a smartphone that the company says will work even when the battery is flat. (Continental)
• The head of Faurecia said that the company was ready to make a major acquisition to give it a fourth “leg” beyond seats, interiors and exhaust treatment. He told French media that he is preparing options ahead of an October board meeting but currently no contact has been made with potential targets. (Les Echos)

Dealers

• Span’s automotive trade body showed concern about the impact of electric vehicles on dealers — specifically the level of additional training needed to safely work on and around high voltage systems. (Faconauto)

Ride-Hailing, Car Sharing & Rental

• Lyft announced that it had now achieved full coverage in 40 of the 50 US states. (Lyft)
• Uber’s new CEO said that the company would likely have its IPO in the next 18 to 36 months. (TechCrunch). The company also published highlights of his opening comments to staff. (Uber)
• Uber’s Movement trip data website went on general release, providing trip data for some of the cities that the company operates in. (TechCrunch)
• Toyota participated in ride hailing service Grab’s latest fund-raising round and announced a collaboration to install Toyota-developed data recording devices in Grab vehicles. (Toyota)
• Ride hailing firm Zūm, who organise rides for children with specially trained drivers, raised $5.5 million in a Series A round. (TechCrunch)
  • Implication: Although it remains to be seen whether this particular company will go the distance, the primary groups underserved by private car ownership today are the very old and very young. Although robo taxis will solve part of the problem by providing lower cost travel, providing in-transit care for these passengers is likely something that a robot alone will not be capable of.
• White label car sharing platform provider Vulog announced a €17.5 million fund raising. (Journal Auto)
  • Lookahead: In our forthcoming report on the mobility industry, one of the things we will be explaining in more detail is just how much of the backend of car sharing and ride hailing schemes are being run by Vulog and its competitors (such as Ridecell).

Driverless / Autonomy

• GM said that Super Cruise (their L2/L3 highway driving solution) would be a $5,000 option on base models of the Cadillac CT6, although it will come as standard on higher end vehicles (Automotive News).
  • Implication: This pricing is a considerable change from the earlier forecast $2,500 level (Detroit News). It seems that GM have chosen the new positioning to drive customers to the higher trim models rather than encourage take-up. The degree to which this will affect how many buyers purchase the system is unclear and also shows that GM either doesn’t value or doesn’t understand, the additional knowledge gained through higher fleet mileage (in stark contrast to Tesla, who won’t stop going on about it).
• Siemens will buy self-driving simulation company Tass. (Economic Times of India)
• Magna showed off its MAX4 self-driving system and said that it expected vehicles to be present in geo-fenced areas “quite soon”. Magna’s forecast for overall sales of autonomous vehicles is that in 2025, 4% of sales will be Level 4 vehicles. (Bloomberg)
  • Implication: Magna are generally on the more pessimistic end of technology growth (they are also bearish on electric vehicle sales), however 4% of the market in 2025 could actually be quite a respectable sales level if the vehicles are in robo-taxi fleets since, on a miles travelled basis, they would be much more heavily utilised than most other vehicles sold.
• Semi-conductor company NXP and self-driving company Torc Robotics have established a consortium to develop radars for self-driving cars (TechCrunch)
• ZF announced a strategic relationship with the University of California, Berkley to work on automotive applications of machine vision and deep learning. (ZF)
• Daimler showed a new concept vehicle called Smart Vision EQ fortwo. The vehicle shows how Smart’s cars could evolve into driverless pods in future and is similar in many details to the Mini concept unveiled in 2016 (except that the Mini was a mixed-mode manually-driven and autonomous concept). (Daimler)

Electrification

• The Renault-Nissan Alliance is creating a new joint venture with Dongfeng, to be called eGT New Energy Automotive, to produce electric vehicles in China. Ownership will be 25% Nissan, 25% Renault and 50% Dongfeng. The initial product will be an A-sized SUV with a sales target of 120,000 units per year, to be launched in 2019. (Nissan)
• Truck engine manufacturer Cummins unveiled an all-electric concept truck called the Aeos, intended to display its battery pack design prowess. (Cummins)
  • Implication: The heavy truck business is markedly different from light vehicles insofar as there are often separate chassis and engine manufacturers (more closely matching the aeroplane market). It remains to be seen whether this relationship will continue with all-electric vehicles or whether companies like Cummins will find that powertrain becomes commoditised.
• South Korean researchers say that they have successfully developed a new electrode technology that will allow energy densities to increase six fold from today’s levels. However, since the new electrode is part of a lithium-sulphur battery chemistry design, don’t expect any changes overnight. (Electronic Times)
• Renault has collaborated with charging company Connected Energy to integrate used electric car batteries into high power chargers. The idea is that the battery can be charged from the local grid and then discharge at a high rate to a waiting electric vehicle. This allows higher charging rates than many local grids can provide (without an expensive infrastructure upgrade). (Inside EVs)
• Aston Martin said that all its vehicles will be powered by either hybrid or fully electric drivetrain by the mid 2020s. (TechCrunch)
  • Implication: This is in line with market expectation. High power engines are already featuring extensive use of electric motors to provide an overboost facility (e.g. McLaren P1) and Ferrari has already made a similar announcement. Since Aston Martin’s V8 engines are supplied by Daimler, it is likely only the V12 engine would need to be developed independently for electric drive — which could leverage many of the same components as the V8 anyway.

Other

• A consortium called 3iprint that includes a subsidiary of Airbus used 3D printing and proprietary metal materials to create the front end (non Class A) structure of a classic car rebuild. (3iprint)