+++ ASTON MARTIN CEO Andy Palmer has hit back at government plans to ban petrol and diesel cars from 2040, saying they lack the integrity needed to have a positive impact. There still remains some confusion within the car industry as to whether the ban will affect all combustion engine vehicle types or exclude hybrids. Palmer told that these plans are either disastrous or pointless. He said a worst-case scenario of a full ban would put businesses like his and the jobs they bring at risk, stating: “It’s not thinking about the consequential effects to the 800,000 people in our industry. It’s not taking into account the impact to things like petrol station garages and the Ford employees who have been making engines in Bridgend”. Palmer said car makers “would be forced to stop building our own engines” and have to go to places like Japan, China and Korea for battery technology, “where they’ve been working on it with government aid for years”. This, he added, would waste large amounts of investment in clean engine technology and harm one of Britain’s strongest industries. Conversely, if comments from the Department for Environment, Food and Rural Affairs that suggested the ban would exclude hybrid cars are accurate, Palmer thinks the new legislation would have no affect on future trends. “In 2040 there won’t be a pure combustion car, because hybridisation and plug-in hybridisation will be there with room to spare”, he said. “I genuinely believe plug-in hybrids will represent 40% of the mix even by 2030, so this 2040 ban would be late”. Aston Martin has already invested in electric technology and will launch its first electric model, the RapideE, in 2 years. Palmer therefore thinks the government’s announcement comes as a form of “political statement”. The government has pledged to spend 3 billion euro on improving infrastructure to help facilitate a growth in electrified vehicles, although Palmer believes more help is needed. “We’re all in this, so if the government want us to throw away our engines, then it has to work with us, or it’s the straw that breaks the camel’s back”, he said. “We (Aston Martin) don’t have the might of Volkswagen or BMW behind us for budget”. Palmer said the timing of the government’s announcement was “the worst possible”, because “it’s far enough away to not be of immediate concern, but short enough that it affects investment decisions” from here on. This, he added, made uncertainty created by Brexit even worse, making it harder to justify investment and difficult to take risks. “We’re trying to keep a car business in the United Kingdom”, he said. “I’m sure other CEOs will agree”. +++

+++ Mercedes-Benz parent DAIMLER AG is investing in a Chinese self-driving startup, in another instance of a Western auto maker seeking out a Chinese partner to get a foothold in a challenging market. The Stuttgart, Germany-based automotive giant made its first ever investment in a Chinese startup this week, taking part in a $46 million funding round for Momenta, a Beijing-based firm providing road sensors and high definition mapping software. Other investors in Momenta include NIO, an electric-vehicle maker backed by Tencent Holdings that has pledged to sell fully autonomous cars in the U.S. in 2020. Daimler declined to comment. It joins peers such as Hyundai in aligning with Chinese firms as the race to develop an autonomous vehicle revs up. Western auto makers face high hurdles entering China because the country considers the kind of mapping needed to make self-driving cars work a national security issue and limits it to domestic companies. Foreign software and car companies also could face difficulty gaining approval to conduct test drives in the country, The Wall Street Journal recently reported. China has made self driving cars part of its national agenda, setting autonomous vehicle targets and creating sandboxes to test such technology, as Beijing makes a big push to dominate the world’s artificial intelligence industry by 2030. In a plan unveiled by the State Council on July 20, China pledged to invest and groom technologies from autonomous driving to computer vision for use in sectors such as national security and manufacturing. By 2030, China forecasts its core AI industries to be worth 1 trillion yuan ($148 billion). China differs from the U.S. in regulations, environment and domestic protection, and startups in the Asian nation are attractive to foreign investors, said Jackie Yang, a managing director at venture-capital firm TransLink Capital. “The local startups have either developed a technology and product that addresses the China market better or have a better price-performance equation”, he said. Venture capital is pouring into the sector. Beijing-based TuSimple, one of the three Chinese startups to receive an autonomous vehicle test permit from California in the last two months, also expects to announce in the next month that it has raised $20 million from investors, according to people familiar with the company. +++

+++ HYUNDAI posted its smallest quarterly net profit in 5 years and warned the second half would be challenging as political headwinds hit sales in China and slow U.S. demand continues. The South Korean company (which together with affiliate Kia is the world’s No.5 automaker) has been betting earnings will recover gradually, but its plans have ground to a halt with China’s backlash over Seoul’s decision to deploy an anti-missile system, the U.S. Terminal High Altitude Area Defense, showing no signs of abating. Slower demand in the United States, the automaker’s No.2 market after China, has also been taking a toll, a trend the South Korean firm cautioned will persist through the rest of the year with its mainstay Sonata sedan losing ground in a market powered by crossovers and SUVs. “The challenging business environment is expected to persist in the second half because of negative external factors such as a slowdown in U.S. demand and China’s THAAD issue”, Hyundai CFO Choi Byung-chul said on an earnings conference call. Hyundai said second-quarter net profit halved from a year ago to $729.14 million (817 billion won); its 14th straight year-over-year decline and the smallest since the first quarter of 2012. Analysts on average had expected 1.35 trillion won. Operating profit came in at 1.34 trillion won and sales at 24.31 trillion won for the period. The company is aiming to shore up its global sales through new models such as the Kona subcompact crossover and Genesis G70 sports sedan, the CFO said at the briefing. Hyundai Motor’s retail sales in China, the world’s biggest auto market, slumped 29 percent in the first half of 2017. Its weak brand image has also put Hyundai at a disadvantage versus local and global rivals such as Honda, Toyota and General Motors, which all saw higher China sales last month. GM, in its earnings call yesterday, said it set a second-quarter sales record in China. Hyundai plans to open a new factory in Chongqing in late August, hoping to offset some of its sales slide by tapping into the southwestern region, even as its other factories in the eastern region are underutilized. In the United States, Hyundai’s sales from January-June fell 7.4 percent, the second biggest drop after affiliate Kia. The slump came despite the automaker sharply boosting incentives to buoy sales. Its U.S. incentives jumped 32 percent to an average of $2,800 per vehicle in the first half, from a year earlier. It is set to face more pressure as competition rises in the United States, where Asian rivals such as Honda and Toyota will be launching redesigned midsize sedans this month, going up against the freshened Sonata to be offered by Hyundai even as sedan sales weaken worldwide. +++

+++ MCLAREN could produce carbonfibre tubs for other car manufacturers when its new factory near Sheffield is operational. The new facility will have the capacity to make up to 10,000 carbonfibre tubs each year when it comes on stream, but McLaren has stated a desire to build only around 5000 cars a year. The new, Rotherham-based facility will create 200 jobs and is set to begin construction early this year; full production is slated for 2020. That means there is scope for the firm to ramp up production in the future, but it is possible that McLaren will make carbonfibre structures for others. Chief executive Mike Flewitt said: “We won’t do it until we’re up and running ourselves, but it is something we’re considering as an obvious expansion”. McLaren’s next-generation architecture will be far more adaptable than today’s, allowing for differently sized models and the possibility of alternative powertrains, all of which would help with the production of limited-run tubs for other projects. The plant is the first purpose-built facility outside of the current McLaren campus in Austria and has been formed through a partnership between McLaren Automotive, the University of Sheffield’s Advanced Manufacturing Research Centre (AMRC) in Rotherham and Sheffield City Council. Although nothing is yet set in stone, McLaren also says there is opportunity for expansion in the future, which would aim to double the 110 million euro which the plant plans to have provided to the local economy within a decade. +++

+++ ROLLS-ROYCE ’s controversial new addition to the range, the Cullinan, has been spotted out testing again. This time, the ultra-luxury SUV has been spotted in the most unbefitting of places: the Nurburgring race circuit. While the demanding German track, nicknamed the ‘Green Hell’, is frequently used by carmakers to test their latest vehicles, I didn’t expect to see the comfort-oriented Cullinan being pushed to its limits there. The prototype is wearing the usual disguise, but the square-edged profile of the Bentley Bentayga-rivalling production car can clearly be seen. Another test mule was previously caught being hitched up on a trailer, where the imposing front end was revealed in full. While the lights and Spirit of Ecstasy bonnet mascot are missing, the large chrome grille is clear to see, while the front bumper features a number of air intakes to guide cooling air to the engine and brakes. The upright grille is flanked by rectangular headlight housings, and overall the Cullinan’s shape is instantly recogniseable. Also visible is the Rolls-Royce badge and side repeater that’s set into the front wing behind the wheelarch (a familiar modern Rolls styling cue) while a rubbing strip runs across the front and rear-hinged back door, although whether that is kept on the final production car remains to be seen. The Cullinan’s boxy proportions are reminiscent of a raised-up Phantom, which is a look that suits the traditional SUV template. The huge 7-spoke alloy wheels are similar to those found on the Ghost, although like that car buyers are likely to get a variety of wheel options in different styles and sizes. The Cullinan has already conducted cold weather testing in 2017, while a trip to the Middle East to put the car through its paces in extreme heat is likely to throw up yet more spy shots of Rolls’ first SUV. At the moment the SUV is using the ‘project Cullinan’ tag, although it’s likely to keep that name for production. In previous press releases, Rolls-Royce says that the Cullinan is officially set to be “assessed on public roads in various locations around the world”. The testing phase will ensure the SUV still “delivers Rolls-Royce’s trademark ‘magic-carpet’ ride on a variety of surfaces and that it is resilient to extreme weather conditions”. Rolls-Royce confirmed development of an all-new aluminium architecture for the Cullinan earlier this year. The new platform will also eventually be used for a next-generation Phantom, and the announcement that production of the current model has stopped confirms this. An all-new suspension system is being primed for the production Cullinan too, alongside the four-wheel-drive system. At the 2015 Frankfurt Motor Show, Rolls-Royce boss Torsten Muller-Otvos revealed that the upcoming Rolls-Royce SUV would be launched in the first half of 2018. He was confident about the progress being made on developing the brand’s first high-riding SUV model, although he prefers to call it an all terrain vehicle. He also hinted that the newcomer will be called Cullinan, currently only the codename of the car; it was named after the world’s largest rough diamond. Asked if Rolls might adopt the name, Muller-Otvos smiled and said: “I love the name”. And in a direct dig at Bentley, which describes its Bentayga as the “best SUV in the world”, he added: “The Bentley SUV is clearly the number two; Rolls-Royce is the best in the world and will be when our model arrives. We will bring a great new car, and an authentic Rolls-Royce into the market”. If the Bentayga’s initial success is anything to go by, there’s no doubt the Cullinan could be the strongest-selling Rolls-Royce in recent years. But don’t expect the brand to adopt a mass-market pricing strategy: this is still very much a bespoke, hand-made car and the price will definitely reflect that. After all, even the ‘cheapest’ Rolls-Royce Ghost weighs in at nearly 350,000 euro in The Netherlands. +++

+++ TOYOTA is reportedly preparing to launch an electric vehicle in 2022 with solid state batteries, which would take only a few minutes to recharge. A Japanse report claims the cargiant hopes to be the first automaker to hit the market with an EV featuring the new battery technology. Solid state batteries use solid electrolyte rather than a liquid one, which is used in today’s batteries. If these new batteries can be produced cheaply enough, they could push electric vehicles into the mainstream with recharge times claimed to be just a few minutes, an energy density twice that of current lithium-ion technology, and greatly improved crash safety properties. Lithium-ion batteries, currently used on many hybrids and all pure electric vehicles, take several hours to recharge. Even with fast charging equipment, recharging still requires at least 20 to 30 minutes. Toyota has reportedly been researching solid state batteries for years, and German automakers BMW and Volkswagen are understood to also be working on the technology. Last year Toyota and its research partners, including the Tokyo Institute of Technology, announced they had found a material suitable for use as a solid electrolyte. Despite that, the technology is still a long way from mass production. The Japanese automaker is currently working on a new EV based on the C-HR for China. This model will feature existing lithium-ion battery technology. Despite being the world leader in hybrid vehicles, the company has yet to make a big push into the EV arena, preferring to concentrate instead on plug-in hybrids and hydrogen fuel cells. The company changed tack late last year, with Akio Toyoda, Toyota’s president, now leading a new department focussed on developing pure electric vehicles. +++

+++ Owners of Dieselgate-affected VOLKSWAGEN Group cars in Germany who refuse to have the manufacturer’s emissions fix applied will have their cars deregistered by the government. The KBA, Germany’s motor vehicle regulatory body, can revoke the registrations of cars without the fix because these would still be emitting more NOx than was originally declared. The fix is mandatory in Germany because the authorities declared it a safety recall, whereas in other countries it was labelled a ‘service action’. The deregistrations are therefore not completely unexpected. Owners across Europe are sceptical of the fix after claims that the software tweak can cause cars to become less fuel efficient and cause faults that trigger limp home mode. A recent  investigation carried out on a 1.6-litre TDI diesel Volkswagen Touran found that despite NOx emissions reducing by almost half after the fix, the car returned poorer fuel economy and emitted 6.5% more CO2. Volkswagen continues to claim that the fix has no adverse effect on cars’ reliability, emissions or fuel economy, backed up by verification from the KBA. Deregistrations will commence depending on when the owners were issued with the recall notice; this means that some owners’ cars could be deregistered next month. Around two-thirds of affected Volkswagens in Germany have had the fix applied. According to a Volkswagen spokesman, the fix is not expected to reach a 100% rate, due to some affected cars having been written off or being untraceable by the government, but the rate is climbing. +++

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