+++ ELECTRIC cars will fall short of helping the environment without cleaner energy to charge the vehicles’ batteries, said Carlos Ghosn, chief executive officer of Nissan and Renault. “At least the car industry is bringing a breakthrough, which consists in saying that you are going to be transporting yourself from one place to another with zero emissions”, Ghosn said Thursday at an energy conference in Paris. “Now the point is cleaning energy”. The French-Japanese alliance, which manufactures the best-selling Nissan Leaf electric car, is working to eventually bring out a battery-powered vehicle in China that will be priced at $8,000 or less, before incentives. Volkswagen, seeking to recover from its emissions-cheating scandal, is also planning to roll out affordable electric cars in the coming years to push the technology into the mainstream. The success of these efforts largely depends on government incentives to help overcome tepid customer reception, according to Ghosn. The U.S. said Thursday it’s coordinating an effort to build green highways by establishing 55 corridors for electric vehicle chargers and hydrogen fueling stations from Maine to Florida and California to New York, laying a groundwork for cleaner interstate travel. The effort is backed with as much as $4.5 billion in loan guarantees for electric vehicle chargers. “This marks a big step forward in the effort to make EV charging available from coast to coast”, Pasquale Romano, CEO of ChargePoint, said in an emailed statement. “This initiative will help make sure that EV drivers can travel anywhere in the country”. The company’s charging network has more than 30,700 independently owned powering stations. Charging is just one side of the equation. The International Energy Agency estimated in June that countries worldwide will have to invest trillions of dollars in cleaner energy and emissions controls to stem growth in air pollution. French Environment Minister Segolene Royal said at the conference that the country will seek to phase out coal-fired power plants by 2023. In contrast, China, while leading global installations in wind and solar farms in recent years, remains dependent on coal and is looking at electricity exports due to a capacity glut. The switch to less-polluting transport is a strain. Generating cleaner energy profitably is also a challenge, Royal Dutch Shell CEO Ben van Beurden said at the Paris conference. “Growth of renewables has been remarkable, but capacity of industry to make money in that segment has been remarkably absent”, Van Beurden said. +++
+++ HONDA will spearhead its artificial intelligence efforts out of a new lab in Tokyo so that researchers can work closely with its engineers to commercialize the technology. Honda will start the R&D center next year and combine existing AI teams in Silicon Valley, Europe and Japan at the downtown location, according to Yoshiyuki Matsumoto, president of the automaker’s largely independent research arm. In choosing Tokyo over Silicon Valley, the carmaker is betting closer interaction between its scientists and developers will lead to AI-enabled products consumers want, he said in an interview. Advances in artificial intelligence are sprouting like “bamboo shoots after rain”, so it’s time to find commercial uses for the technology by marrying research with Japan’s traditional strength in hardware, Matsumoto said. “We won’t make much difference if we did the same things as everyone else in Silicon Valley. And not everyone has succeeded there”. Matsumoto sees AI as the brains that will combine robotics, sensing, navigation and connectivity technologies to enable autonomous driving. Honda’s choice of Tokyo as a home base for its efforts in the space differs from automakers including Toyota, which hired former U.S. defense scientist Gill Pratt to set up and lead a U.S. research institute. Underpinning Honda’s decision is its belief Japan has the necessary talent to compete with Silicon Valley, home to the likes of Alphabet, Facebook and Uber Technologies. Also implicit is the desire for the research dollars spent to translate into products with real-world demand and value. Artificial intelligence research has for years failed to find large-scale commercial application until the recent advent of products and services such as Apple’s Siri. Recent progress has prompted carmakers including Toyota to join tech giants like Google and Facebook in Silicon Valley to adapt deep-learning capabilities for cars and mobility services. Honda will tap into Japan’s talent pool at universities and may collaborate with startups to boost its AI capabilities, Matsumoto said. To attract talent from outside the auto industry, Honda will adopt a more flexible work and salary system rather than the rigid, seniority-based pay grades used elsewhere within the company. Some AI specialists from Silicon Valley may be hired as technical advisers on short-term contracts to keep Honda up to speed with developments in the U.S. Honda currently conducts AI research in Silicon Valley, Japan and Germany. The decision to consolidate AI research hasn’t been finalized and the company may announce its plan in April, Matsumoto said. While it’s necessary to have an outpost in Silicon Valley to gather the latest industry information, Japan also has leading technologies in some areas that may attract global companies to set up AI research offices in the country, said Satoshi Nagashima, a consultant at Roland Berger in Japan. Robot taxi developer ZMP and deep-learning technology venture Preferred Networks are among Japanese startups with competitive technologies, he said. Toyota, by contrast, has been expanding its research capabilities in Silicon Valley. The software engineering team formerly at Jaybridge Robotics, a U.S. artificial intelligence software firm, joined Toyota in March. Toyota will begin selling a 10-centimeter-tall talking robot called Kirobo Mini across Japan in early 2017, one of its first marketable products with AI capability. Honda said earlier this year it’s working with SoftBank Group on technologies that will allow cars to perceive emotions of drivers and talk to them. The company announced Monday that it raised its forecast for full-year profit as demand for Vezel/HR-V and XR-V models surged in China, the carmaker’s second-largest market. Net income will probably rise to 415 billion yen in the fiscal year ending in March, more than the 390 billion yen forecast in May, according to a statement from the Tokyo-based automaker. The projection compares with the 491.8 billion yen average of 20 analysts’ estimates compiled by Bloomberg. Honda boosted deliveries of the Vezel/HR-V and XR-V models each by more than 50 percent, as carmakers selling in the world’s biggest auto market benefited from a sales tax cut for vehicles with smaller engines. China’s government is looking at extending the levy reduction set to expire this year, potentially helping Honda rebound from unprecedented recalls of faulty Takata airbags. “Their redesigned models, especially the small crossovers, are giving them a strong boost”, said Seiji Sugiura, an analyst at Tokai Tokyo Research Center. “We expect the Chinese government to take some action, further supporting the industrywide growth, and Honda will continue to benefit”. +++
+++ JAGUAR LAND ROVER said it was no longer seeking to buy or lease Silverstone in a blow to the owners of the British Grand Prix track which had been seeking ways to boost the site’s finances. In April, the British Racing Drivers’ Club (BRDC) said it was in talks to lease the circuit’s property to Jaguar Land Rover, which had been considering turning the site into a “heritage center” to show off its luxury cars. But after months of talks dragging on, a spokesman at Britain’s biggest carmaker said the plans had been scrapped. “Jaguar Land Rover has ended discussions with the British Racing Drivers’ Club for the foreseeable future and is not proceeding with any plans to either lease or purchase Silverstone at this time”, he said. +++
+++ NISSAN blamed a stubbornly strong yen and weak sales at home for shrinking its bottom line, despite selling more cars in the U.S. and top vehicle market China. The Japanese automaker said its net profit during the April-September period fell 13.3% to 282.4 billion yen ($2.7 billion), the first decline over that 6-month span in 4 years. Operating profit and revenue were off 14% and 10.3% from a year ago, the company said but kept its annual outlook unchanged. The Altima sedan maker’s results in Japan took a hit as it suspended sales of certain small vehicles linked to a mileage-cheating scandal at smaller rival Mitsubishi Motors. Japanese automakers, including Nissan rivals Toyota and Honda, have complained about the yen’s sharp rally this year, as it shrinks the value of their repatriated profits while increasing the cost of their products overseas. Nissan said it moved 2.6 million vehicles globally in its fiscal half year, edging down 0.1% from the same period in 2015. The all-important North American market recorded 1 million vehicle sales, up 5.4%, while unit sales in China rose 3.8% to 610,000 automobiles, it said. But sales in Europe and Russia fell, while they tumbled 20.2% to 211,000 units in home market Japan, it warned. “The yen’s strength remains a major factor squeezing earnings in the Japanese auto sector”, said Shigeru Matsumura, analyst at SMBC Friend Research Center before the results were published. “Japanese carmakers need to make further efforts to make their corporate structure more resistant to the yen’s appreciation”, he added. Despite the half-year decline, Nissan said it still expected a net profit of 525 billion yen in the year through March 2017 with operating profit of 710 billion yen and sales of 11.8 trillion yen. +++
+++ Toyota’s PRIUS hybrid topped Japan’s new car sales rankings in October, becoming the best seller for the first time in 2 months, industry data showed. The Prius gas-electric hybrid sold 14,053 units. Honda’s N-Box minivehicle, which topped the list in September, ranked second with 13,891 units. Daihatsu’s Move minivehicle came third with 12,502 units. The Toyota unit launched a remodeled version of the minivehicle in September. Nissan’s Serena minivan ranked fifth with 12,408 units, and Honda’s Freed minivan came ninth with 9,153 units. Sales of the minivans surged following the launches of their revamped models. The data were compiled by the Japan Automobile Dealers Association and the Japan Light Motor Vehicle and Motorcycle Association. Minivehicles have engine displacement of up to 660 cc. +++
+++ TOYOTA said operating profit almost halved in the second quarter as the world’s top-selling automaker smarted from a strong yen that has made its Japan-built cars less competitive and crimped the value of overseas earnings. Operating profit fell 43 percent to 474.6 billion yen ($4.55 billion) in the July-September period compared with a year earlier. The result was roughly in line with the 476.26 billion yen average of 12 estimates from analysts surveyed by Thomson Reuters I/B/E/S. While all Japanese automakers are feeling the currency pinch, Toyota is more exposed to swings in foreign exchange because it produces two-fifths of its vehicles in Japan, half of which it exports. The latest yen squeeze also comes as sales in North America, one the world’s biggest auto markets, slow after record sales in 2015 that automakers and analysts saw as the peak of the U.S. recovery from the 2008-2009 economic crisis. Cheap fuel is also spurring demand for petrol-guzzling models leaving Japanese automakers struggling to raise production of SUVs and pick-ups. Toyota has said it will make more of those larger vehicles including its popular RAV4 crossover model in the United States, to take advantage of that shift in consumer preference. Toyota also changed its full-year budgeted yen rate to 103 versus the U.S. dollar and 114 to the euro, from 102 and 113 respectively. It lifted its forecast for full-year operating profit to 1.7 trillion yen from 1.6 trillion yen, which would be its lowest since 2013. +++
+++ German prosecutors probing whether VOLKSWAGEN executives manipulated the markets in the wake of the ‘dieselgate’ scandal have widened their investigation to include the group’s supervisory board chief, the embattled auto giant said Sunday. Volkswagen said the probe had now also ensnared board Chairman Hans Dieter Pötsch, who was only appointed last year, and would focus on his previous role as the group’s chief financial officer. The announcement is a fresh blow to Volkswagen’s efforts to move on from the worst crisis in its history, which erupted after the group admitted in September 2015 to installing software in 11 million diesel engines worldwide that could dupe emissions tests to make the cars seem less polluting than they were. Prosecutors in the German city of Brunswick are already investigating former CEO Martin Winterkorn and another former board member for allegedly holding back information from investors in the days after the scandal erupted. The carmaker said in a statement it would stand by Pötsch, who was Volkswagen finance chief for over a decade before he was named supervisory board chairman in a reshuffle a month after the crisis broke. “Based on careful examination by internal and external legal experts, the company reaffirms its belief that the Volkswagen board of management duly fulfilled its disclosure obligation under German capital markets law”, Volkswagen said. By law, listed companies are required to disclose information that could affect market prices immediately. Volkswagen investors have so far filed 1,400 claims seeking a total of 8.2 billion euro in damages over the emissions cheating saga, a court in Brunswick, close to Volkswagen’s Wolfsburg headquarters, said in September. More than a year since the dieselgate scandal rocked the industry, Volkswagen continues to be mired in legal and financial woes. However, the group last month won approval for a massive 14.7-billion dollar settlement in the United States that includes compensation for nearly half a million owners of the polluting vehicles. But the company still faces criminal allegations over the cheating in the U.S., as well as a string of other legal cases including myriad lawsuits in Europe. Volkswagen says it has so far set aside 18 billion euro to pay for legal costs and the refits and buy-backs of affected vehicles, but experts believe the final bill will be far higher. In another potential headache for the group, the Bild newspaper said U.S. regulators had found evidence of another software manipulation scheme at Volkswagen’s luxury subsidiary, Audi. According to Bild, which did not cite its sources, certain Audi models with automatic transmissions were equipped with software that could detect when the cars were undergoing testing and lower their carbon dioxide emissions accordingly. Audi ended its years-long use of the software in May, Bild added. An Audi spokesman told AFP the company was not in a position to comment because “the discussions with U.S. authorities are still ongoing”. +++
