+++ AUDI closed the first 3 quarters with growth despite the difficult market environment: In September, the brand increased its deliveries by 1.7 percent to around 173,850 units compared with the strong prior-year month. Demand especially in Europe (+6.3%) and North America (+4.1%) played its part in the positive sales balance. Within the product portfolio, the compact Audi models in particular were very popular. Combined sales of the A3 and Q3 increased by 16 percent in the month. Since January, the manufacturer delivered around 1,408,800 automobiles across all models to customers, an increase of 4.5 percent. “Over the coming months we will further strengthen and considerably rejuvenate our product portfolio”, says Dietmar Voggenreiter, Board Member for Sales and Marketing at Audi. “With the Q2, we aim to open up important new customer groups and with the new A5 we are once again going to demonstrate our brand’s sportiness and charisma”. Both models will arrive at European dealers in November. They will be joined in early 2017 by the new generation of the Q5, whichwas unveiled to the public for the first time a few days ago at the Paris Motor Show. To date, the company has sold around 1.6 million units of the first generation of the mid-size SUV worldwide. In North America, the Q5 is the most successful Audi model, with almost one in four Audi customers opting for this SUV. In September, deliveries of the Q models rose 5.5 percent in North America, with an increase of 4.1 percent across all the brand’s models. In the U.S. market, Audi expanded its sales by 1.6 percent, driven by the new A4, which grew almost 40 percent in the United States over the past month. Since the start of the year, Audi deliveries in the North America region rose by 5.1 percent across the entire product portfolio to around 186,850 automobiles. In Europe, the new A4 reclaimed its position as the number 1 premium model in its segment. Over the past month, around 17,300 customers in Europe decided to buy the mid-size model, 21.6 percent more than in September 2015. In addition to the A4, the revised A3 (+26.4% to around 21,500 units) strengthened total sales in the region. Both models played a significant role in increasing deliveries in Europe by 6.3 percent to around 84,650 automobiles in September. The manufacturer reported cumulative total sales in Europe of around 657,100 automobiles since January, an increase of 7.3 percent. Audi achieved double-digit growth in the past month in France, delivering 5,660 automobiles, 16.2 percent more than in the prior-year month. The United Kingdom also saw strong growth of 8.5 percent to 31,214 units in the traditionally strong sales month of September. The positive trend for Audi was reaffirmed in the past month in Italy (+6.7% to 5,353 cars) and Spain (+5.5% to 3,400 cars). In Russia (-38.6% to 1,600 units) and Turkey (-16.4% to 1,341 units), however, the sustained challenging market environment was also reflected in Audi’s sales performance in September. In the Asia-Pacific region, Audi delivered around 62,200 premium automobiles to customers in the month, 2.2 percent less than one year ago. By contrast, demand again rose in China (+2.6% to 54,499 units) in September. There, the past month was dominated by the model changeover for the Audi A4 L. The new mid-size model will now be gradually rolled out into the Chinese dealerships. Cumulative deliveries in the entire Asia-Pacific region total around 509,850 units, 3 percent more than one year ago. +++
+++ The BMW Group achieved a worldwide double-digit sales increase in September, continuing the company’s long-term upward sales trend and securing a new record for the month. A total of 237,973 vehicles were delivered to customers around the world, an increase of 10.5% on the same month last year. This result brings the year-to-date sales total to 1,746,638 – up 6.2% compared with the same period last year and the company’s best ever sales result for the first three quarters of the year. “Once again, the BMW Group has delivered strong sales growth across the company’s line-up” commented Ian Robertson, Member of the BMW Board with responsibility for Sales and Marketing. “Demand for our premium models continues to grow around the world and in all vehicle classes. Customer interest in our broad range of electrified models is also stronger than ever, with a clear upward trend. Our policy of balanced global sales continues to deliver sustainable success and profitability remains our primary focus”,Robertson added. In September, a total of 197,419 BMW brand vehicles were delivered to customers, an increase of 9.4% on the same month last year. Sales growth continues to be driven by the X range: the X1 was delivered to a total of 21,412 (+161.9%) customers in September; X3 sales increased 12.9% (15,596); X4 deliveries rose 15.9% (5,732) and X5 sales climbed 17.6% with a total of 15,979 delivered to customers. Meanwhile, with well over 6,000 models sold around the world in September, sales of the 7 Series more than tripled compared with the same month last year (6,210 / +237.5%). Overall year-to-date sales for the BMW brand stand at 1,479,936 – up 6.0% compared with the first three-quarters of last year. Sales of BMW’s electrified models continue to grow, especially in Europe and the USA. More than 40,000 i and BMW iPerformance vehicles have been sold so far this year, with the trend clearly increasing. Over 7,000 electrified BMW models were delivered to customers worldwide in September. +++
+++ DAIMLER, the parent company of Mercedes-Benz and Smart, has announced that it will be cutting back on investments as the company attempts to stay profitable while establishing its new EQ electric car sub-brand. Daimler CEO Dieter Zetsche revealed to Automotive News that the automaker will reduce R&D spending from an expected 16 billion euros in 2016 to between 12 billion and 13 billion euros next year. Those cuts are expected to come at the expense of investments in plants upgrades and new technologies. Zetsche says some of those cuts can be attributed to the launch of the company’s new EQ electric car sub-brand, which debuted at the recent Paris Motor Show. Daimler is still trying to figure out how to best divvy up development funds between conventional gas and diesel technologies and advanced electric drivetrains. “We cannot stop advancing combustion engine technology, even if 25 percent of vehicles sold in 2025 are e-cars, as 75 percent won’t be”, he said. Mercedes and smart have pledged to have 10 new battery-powered cars on the road within the next few years. In order to support those ambitions, Daimler has dedicated 1 billion euros to battery development. +++
+++ GENERAL MOTORS made its first investment in a Chinese car-sharing start up, the company said on Tuesday, as its attempt to reshape itself as a mobility solutions company spreads around the globe. A General Motors spokeswoman declined to disclose the size of the investment in Yi Wei Xing (Beijing) Technology, which developed Feezu, a car rental and car-sharing app. “This cooperation is very important to our company to explore ride-sharing market in China”, the spokeswoman said in an email to Reuters. “It is General Motors’ first investment in a start-up in China related to urban mobility”. General Motors is “looking at our footprint in China and opportunities there, and Yi Wei Xing is a step in that direction”, said Vijay Iyer, General Motors spokesman for the Maven car-sharing service and based in Detroit, in a telephone interview on Wednesday. “How that will ultimately show itself in a service perspective is in the exploration phase. “We are now purchasing technology in that market to be able to deliver ride-sharing experiences and we’ll take it from there”, he said. General Motors and other major global automakers have rushed to team up with technology companies as services like ride hailing and car sharing pose a threat to the traditional model of car ownership. This year General Motors made a $500 million investment in U.S. ride-hailing company Lyft, while Toyota partnered with Uber and Volkswagen tied up with Israel-based car-hailing firm Gett. Yi Wei Xing did not respond to requests for comment. Feezu, whose Chinese name translates as “micro car rental”, allows users to rent vehicles for as little as 10 minutes. The app differs from services like Uber and Lyft that primarily hail cars with drivers. Iyer said it was premature to say whether General Motors’ Maven car-sharing service would be involved with the Yi Wei Xing venture. Iyer said General Motors wanted to work with Yi Wei Xing in part because it has already created a presence in China, the world’s biggest automobile market. General Motors launched Maven in January in the United States. +++
+++ HYUNDAI Motor reached a tentative wage pact with its South Korean labor union on Wednesday after the worst strikes in the automaker’s history disrupted output at its domestic production base. The agreement is subject to a vote by almost 50,000 union members on Thursday, who rejected an earlier deal in August because of it was less generous than the previous year’s package. The union has held 24 rounds of full-scale or partial strikes since July 19, preventing the automaker from making 131,851 vehicles worth more than 2.9 trillion won ($2.60 billion), the government said last week. “The company and the union have formed a common ground that we should prevent further catastrophe as a prolonged strike has had a substantial impact on not only the company but the regional and national economy”, Hyundai Motor said in a statement. Under the latest agreement, Hyundai will increase basic monthly pay by 72,000 won; give each worker a one-off payment of 3.3 million won as well as bonus and incentives payments worth 3.5 times their basic monthly wage; and each worker will also receive 10 Hyundai shares, the company said. The deal came after the government threatened to intervene to suspend strike action, criticizing the union for walkouts despite relatively high wages at the automaker. The prolonged labor disputes coupled with sluggish domestic demand have prompted some analysts to cut earnings forecasts for the July to September quarter which the company is scheduled to report late this month. 12 out of 25 net profit estimates have been revised down in the past 30 days, pushing the average estimate 12 percent lower, according to Thomson Reuters StarMine. Hyundai Motor, which is the world’s fifth-biggest carmaker including affiliate Kia Motor, has been hit by strikes in all but 4 of the union’s 29-year history though it usually made up for lost production by the end of each year. +++
+++ Sales of MINI brand vehicles increased by 16.1% in September with a total of 40,164 delivered to customers worldwide. “This is the first time more than 40,000 Mini’s have been sold in a single month, which underlines the increasing customer demand for the brand”, said Peter Schwarzenbauer, Member of the Board of BMW AG, responsible for Mini. “Our biggest growth drivers are the newest members of the Mini family, the Convertible and the Clubman, demonstrating the success of our brand realignment”, he added. In the first 3 quarters of the year, Mini sales rose by 7.2% (264,077). +++
+++ ROLLS-ROYCE announced the best ever third quarter sales performance in the history of the company, up 12.7% on the previous year. Demand was seen across all Rolls-Royce models, combined with significant interest in Dawn and Black Badge Wraith and Black Badge Ghost. Sales in the nine-month period from January to September totalled 2,625 units, up 0.8% on the previous year. This result is according to plan and the marque remains optimistic for a strong year in 2016. +++
+++ TESLA CEO Elon Musk recently took the stage in Guadalajara, Mexico, for the performance he’s waited a lifetime to give. Sporting a new, oddly manicured mustache, Musk did his best shy Tony Stark impersonation, informing a crowd of space enthusiasts that, yes, he does plan to colonize Mars. Musk’s aerospace company, SpaceX, will send thousands of rockets and people to the Red Planet—perhaps within the decade and perhaps at a cost of just $10 billion. Some of the astronauts will die as part of the experiment. Others will live out their days in … well, Musk was not very specific on that. Musk continues to befuddle planet earth. He’s part techno messiah—a being sent here from the future to save mankind from itself—and part charlatan—a slick businessman dragging foolish investors along on ever grander, cash-burning bets. Every time one of his companies stumbles, Musk seems to have another spectacular thing to announce—a new mode of transportation, the space internet, or a Martian colony—to thrill and confuse. Is Musk trying to distract us from the troubling aspects of his companies, or are the doubters just the shortsighted, risk-averse people holding us all back from a fantastic future? By any measure, his companies are in trouble. In the spring, a driver of a Tesla Motors car engaged in autopilot mode crashed and died, prompting a forensic examination of the technology by both regulators and consumers. At a more basic level, the automaker quite often struggles to manufacture cars at expected rates, and Tesla’s proposed acquisition of SolarCity, Musk’s solar panel company, has been bedeviled by shareholder lawsuits. Key engineers at Tesla, along with two top public-relations people, have left. SpaceX just suffered another rocket explosion that puts the company’s future in a precarious position. Instead of hunkering down, Musk has (almost impossibly) become more vocal, taking to Twitter and Tesla’s blog, going after critics with fingers of fury. In Silicon Valley, Musk is admired, beloved, and idolized, but people are starting to wonder whether he’s finally taken on too much. If that’s the case, there’s a disaster scenario coming: Musk has never had more to lose. Tesla, SpaceX, and SolarCity are no longer experiments. Tesla and SolarCity are public companies. SpaceX, meanwhile, has become crucial not just to the U.S. space program but also to countries and companies around the world hoping to put up satellites for communications, entertainment, and national security. If his companies were to crater, it wouldn’t merely be an internet playboy blowing his millions on a whim. Tens of thousands of jobs would be lost, billions in capital would be wiped out, and technological progress would be stunted. There’s precedent for how Musk deals with the possibility of self-inflicted apocalypse. In 2008, both Tesla and SpaceX were days away from collapsing simultaneously. Trying to get Tesla’s first car, the Roadster, up and running, and launch SpaceX’s rockets safely into space, Musk had plowed through most of the $200 million he’d earned from EBay’s acquisition of PayPal. Musk was forced to borrow money from his friends, while the parents of his then-girlfriend and future wife, Talulah Riley, offered to remortgage their house to help keep his companies alive. (He didn’t take them up on it.) At the time, Musk was going through a very public divorce from his first wife, Justine, and he took a beating from the media that had once celebrated him. “He looked like death itself”, Riley recounted in a biography on Musk. “I remember thinking this guy would have a heart attack and die. He seemed like a man on the brink”. During this period, Musk suffered from what might be thought of as industrialist night terrors. “He was in physical pain”, Riley said. “He would climb up me and start screaming while still asleep”. Musk escaped from this dark time like Houdini in a burning straitjacket. As proper automakers filed for bankruptcy amid a global economic crisis, he convinced investors to put more money in Tesla. Next up, he persuaded NASA to give SpaceX and its wobbly rockets a try. After 4 more years of clever engineering, good luck, and sheer force of will, Tesla and SpaceX reached somewhat stable footing. In 2012, Tesla produced the Model S sedan, which even skeptics in Detroit hailed as possibly the best car ever built. SpaceX docked a rocket with the International Space Station, and SolarCity went public. Musk had stared into the abyss and then pulled off perhaps the greatest entrepreneurial run in history. It’s through Tesla that we get the most direct insight into the state of Musk Land today. For too many years, the company has struggled to fine-tune its manufacturing operations. Time and again, Tesla is late to market with its new products. It regularly misses sales and delivery forecasts because of manufacturing delays, and its $100,000 cars continue to have glitches. As these issues persist, Tesla has moved forward with its expensive battery factory in Nevada, while struggling to find a way to post a profit. The short sellers that were burned during Tesla’s great run following the launch of the Model S have returned in full force; some have declared with certainty that the company is hurtling toward a grisly demise. Musk knows the issues all too well and has at least flirted with the idea that he’s unable to take on the challenges alone. Years ago, Musk was close to bringing on Tony Fadell, the father of the iPod and former Nest CEO, as CEO of Tesla. “Elon a nd I had multiple discussions about me joining as Tesla’s CEO,” Fadell told me in 2014, which I reported in my book. Musk also approached Tony Bates, the former Skype CEO, for a possible leadership role (Bates did not reply to a request for comment), Musk, though, has always been reluctant to cede control of the company and continues to deal with day-to-day operations. When in doubt, Musk bets on himself. On top of the financial and manufacturing issues, Tesla faces its most severe PR crisis since the Roadster days. It has been the prime promoter of autopilot technology and receives a huge wave of negative press every time one of its cars is involved in an accident. Musk has responded to the accidents with loads of statistics that justify the technology rather than hearty helpings of empathy. This is off-putting to the many, many people who do not appreciate Silicon Valley’s algorithmic worldview. The situation has been better at SpaceX, although only slightly. Over the past year, the company hit its stride, launching rockets at a spectacular rate, while also landing the rockets back on earth with such regularity that this incredible feat started to become mundane. Then, at the start of September, a SpaceX rocket exploded on the launchpad—the company’s second explosion in about 15 months. No one died, but the blasts have provided SpaceX’s critics—those who see the company as too cavalier—with plenty of fodder while also testing even its most loyal customers (Fear not. We’re off to Mars!). That people would take all this in and come away with plenty of doubts about Musk is understandable. Perhaps the man really has lost the plot and Tesla, SolarCity, and SpaceX will end up as case studies in hubris. As someone who has spent years studying Musk, though, I find such a future unlikely and also find the cynicism that surrounds Musk somewhere between depressing and ignorant. Musk’s empire is on much stronger footing than during the grim days of 2008. Tesla, SpaceX, and SolarCity are all very real companies with real factories and tens of thousands of employees. Musk has built up enough credibility and has enough star power to raise money with relative ease or to be bailed out by one of his many ultrarich friends, who share Musk’s aspirations. His companies have also developed world-class technology, and there would certainly be a line of acquirers at the ready for any of Musk’s enterprises. Just on technological merits, Musk’s companies have already impacted the world in lasting fashion. To the extent that the electric car is a reality, it’s largely thanks to Tesla selling tens of thousands of high-priced vehicles, pressuring BMW, Audi, Mercedes, Volkswagen, and others into a response. Tesla’s software has also made the automotive industry interesting again. All automakers have been forced to modernize the software inside their vehicles and accelerate their self-driving programs. While it receives less attention, SpaceX may be Musk’s greatest achievement. You would be hard-pressed to find a more patriotic tale than a South African immigrant using his own money to revitalize the U.S. aerospace industry. Before SpaceX, it was considered daft for an individual to try and compete against nation-states with decades of experience and billion-dollar budgets. Now a handful of rocket companies have cropped up, seeking to undercut SpaceX on price. As the price of getting to space has dropped, dozens of other startups have come running with new kinds of satellites that promise to change technology ranging from imaging to medicine. With advances in cars, energy, and space exploration, Musk has ushered in a new industrial age. The world of machines and infrastructure suddenly looks poised to advance at a rapid clip. It does not seem hyperbolic to suggest that Musk has played a major role in changing the world. That we forget all this is a curse of Musk’s own making. At every point where his companies seem to be on stable footing, Musk takes on more and promises more, erasing the memory of past gains. He might now be addicted to one-upping himself. Wall Street and casual onlookers often find Musk’s approach abhorrent, and this makes perfect sense. They want consistent earnings-per-share figures and straight talk, while he’s in an inventive fugue state more concerned with trying to save mankind from oblivion. Musk lives in a way that few of us would choose and has a tolerance for risk that would drive most of us nuts. It’s precisely because Musk has operated his companies on the edge of what’s possible that he has achieved so much. +++
+++ ChargePoint Inc, the world’s largest electric vehicle charging network, has asked a U.S. judge to order changes to VOLKSWAGEN ‘s 2 billion dollar agreement with the Justice Department to boost zero emission vehicle (ZEV) infrastructure. The company, which operates more than 30,000 public charging stations, said the Volkswagen diesel emissions cheating settlement threatens its survival and other charging station companies. Volkswagen has agreed to spend up to $16.5 billion to settle with U.S. owners, state and federal regulators and dealers after it admitted to installing software that allowed 475,000 U.S. vehicles to emit up to 40 times legally allowable emissions. Under the proposed settlement, Volkswagen must spend $2 billion over 10 years to improve infrastructure, access and education to support and advance ZEVs, including $800 million in California. The funding will allow Volkswagen “literally to drown out all other participants in the ZEV infrastructure market through enormous spending, made at its unfettered discretion, that is untethered to the normal constraints and financial metrics by which all other market participants must operate”, ChargePoint said in a court filing late on Tuesday. Allowing Volkswagen “to flood a competitive market with $2 billion in goods threatens the survival of the current participants in that market”, ChargePoint said. The Justice Department rejected ChargePoint’s arguments in a September 30 court filing, adding it believes that zero emission vehicle infrastructure is likely to increase in coming years and will allow “for continuing competition in these emerging markets”. The settlement requires Volkswagen to fund infrastructure that can be used with electric vehicles produced by all manufacturers. ChargePoint said Volkswagen could “drive out all competition” through free or subsidized charging. ChargePoint said in May it had raised an additional $50 million, bringing total funding the California-based company has raised from investors to more than $164 million. The company said it has 244,000 drivers registered on its network, including more than 125,000 in California. U.S. District Judge Charles Breyer is set to hold a hearing on whether to grant final approval to the settlement on Oct. 18. An EPA spokesman declined to comment on ChargePoint’s objection. Volkswagen did not immediately respond to requests for comment. ChargePoint said Breyer could appoint an independent trustee to oversee the fund or issue an order barring Volkswagen from offering charging services at below market rates. +++
