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+++ If you happened to be wandering the streets of San Francisco the week before last, you might have spotted a slightly unusual looking Toyota Highlander on the streets. Zoox, the $3 billion AUTONOMOUS vehicle startup co-founded by a Melbourne designer and backed by some heavyweight Australian investors, had some of its ‘test mules’  transporting VIPs from a high-profile climate summit to their hotel. The initiative offered some prominent exposure for Zoox in the world’s epicentre of innovation. Only a few months ago, the secretive company was still in stealth mode and unknown to all but a few Silicon Valley insiders. Zoox shot to prominence in Australia and beyond last month when local tech mogul Mike Cannon-Brookes of Atlassian tipped $100 million of his own money into the company and joined its board. Sydney based Blackbird Ventures, and giant Melbourne superannuation fund Hostplus are also investors. But shortly after the most recent funding round closed, Australian co-founder Tim Kentley-Klay was abruptly removed from the chief executive position. The ousting surprised just about anyone who has tracked Zoox’ progress, and sent a shockwave through Australia’s close-knit start-up community. The circumstances surrounding Kentley-Klay’s departure have been murky at best. One month later, they are finally starting to become clearer. The same week Zoox took the wraps off the ‘VH4’ in San Francisco, board member Laurie Yoler was in Sydney to present at a conference for entrepreneurs hosted by Blackbird; one of the company’s earliest investors. Yoler also met with some of Zoox’s other Australian backers, and some prospective new investors from these shores. At the event, and in those meetings, she shed a little bit more light on the situation. Zoox, has already raised a staggering amount of money for a company with no commercial product: $800 million. But it will need a lot more to fulfil its aims. Building a fleet of robot taxis that endlessly roam the streets doesn’t come cheap. Based on current cash burn rates, and Zoox’ ambitions, the company may look to raise another $1 billion next year. And the board came to the conclusion, fairly or not, that Kentley-Klay could affect its ability to do so. The company’s last financing round, worth $500 million, was actually smaller than it could have been. Yoler indicated that a handful of big investors were close to participating in the round, but ultimately turned it down. Whether this included a strategic investor (a tech firm or a traditional carmaker) remains a topic of much conjecture. Yoler also noted that while Kentley-Klay was a great CEO for the first phase of Zoox’s growth, he was less suited to running a company with 600 employees. His perfectionist approach had started to create bottlenecks in the company’s decision making. And the board had grown increasingly nervous about his insistence that Zoox remain fully independent. This could turn away some investors – and make it difficult for the company to strike any form of alliance with a traditional automaker. The board decided to move and make the difficult decision to replace Kentley-Klay at a time of strength, its coffers recently filled, rather than weakness. Plenty of companies know how to build cars. But only 1 or 2 know how to build software enabling them to drive themselves.  Zoox is among them, and that’s where the perceived value in the company rests. Zoox’s board believes its technology is ahead of Waymo, the Google unit widely considered by the outside world to be the leader in the race to develop self-driving cars. For his part, Kentley-Klay remains bitter about the ousting from Zoox, according to people familiar with his thinking. And justifiably so, since it is all based on his vision. He remains the company’s largest shareholder, and still has a seat on the board. How that plays out remains to be seen, but a comeback in some capacity cannot be ruled out. Yoler told investors she hopes Kentley-Klay will eventually see the bigger picture. A search for Kentley-Klay’s replacement has begun. It’s a job that should appeal to top tier executives with significant pedigree. Yoler has been in this position before. She was on the board of Tesla Motors when it replaced its former CEO with its current leader; one Elon Musk. Plenty of alliances between traditional automotive companies and tech enabled upstarts have been struck in recent times. Toyota recently invested in Uber, for example. General Motors acquired Cruise Automaton and also invested in Uber-rival, Lyft. The next funding round for Zoox will be instructive on this. And the clock is already ticking. +++ 

+++ BMW cut its 2018 guidance prompted by headwinds that have also affected its peers. The German company said the effects of new emissions testing regulations in Europe, increased provisions, and ongoing global trade tensions would pinch revenue and earnings this year. It cut its outlook for pretax profit and its automotive-division margin. Emissions rules and trade tensions have already led competitor Daimler to cut its outlook in June. Volkswagen has also warned that the changeover to the new emissions-testing standards would impact earnings. BMW got its vehicles ready for new European emissions-testing rules in time but the changeover has led to increased competition that could ultimately hit sales. The car maker said it would thus reduce its volume planning “to focus on earnings quality”. The switch to the new emissions rules which came into effect this month “led to significant supply distortions in several European markets and an unexpected intense competition”, BMW said. The new standards have led to increased pricing pressure as manufacturers were offering discounts to sell their noncompliant vehicles ahead of the September deadline, London-based brokerage Evercore ISI said ahead of BMW’s guidance cut. Pricing pressure also increased due to ongoing international trade conflicts which are distorting demand more than expected, BMW said. The guidance revision is also due to higher provisions in its automotive segment, where BMW cut revenue and EBIT margin expectations. BMW now expects “a moderate decrease” in group pretax profits on year, compared with a flat forecast previously. It now forecasts an automotive margin of at least 7 %, compared with its usual 8 % to 10 % target for the division. +++ 

+++ BYTONis still a very young competitor in the fierce world of electric vehicle startups, but it has serious funding and some lofty goals. The company unveiled its first concept at the start of the year in the form of an attractive crossover. This vehicle has since been followed up by an all-electric sedan concept that will hit the market in 2021. Hot on the heels of securing a $500 million investment, Byton is planning big things, including entries into both the North American and European markets. During an interview, the company’s chief vehicle engineer David Twohig spoke about Byton’s plans. “Launch is committed for China in 2019, we’ll do North America a few months later and we’ll be in Europe at the back end of 2020. The plant at Nanjing is going ahead at a speed I’ve never seen in 26 years in the car industry. We’ll be building the first off-tool prototypes early next year”. Byton isn’t the first EV company to make such bold predictions. However, the startup believes it has economies of scale working in its favor to ensure its longevity and prove it to be a rival to Tesla. “First, we have economy of scale. This is a low-margin industry so you need the volume. The Nanjing plant isn’t a little shop, it’s 300,000 vehicles [per year] , hence the platform strategy and cost engineering so we can offer them at €40,000. Second is the fact the cars are built in China, which really keeps your cost base down. “Thirdly, the kind of technology we have plus the connectivity of the car is going to generate revenue streams that we don’t even know about today. Up until 2006 we thought that telephones were for making calls; now they generate a bunch of revenue we didn’t even think of back then”, Twohig said. Byton’s crossover, the M-Byte, will be introduced next year. The entry-level model will utilize a single 272 hp electric motor driving the rear wheels and a 71 kWh battery providing up to 400 km of range. A more expensive model with four-wheel drive, two electric motors and 475 hp will also be offered. This variant will use a 95 kWh battery and be capable of travelling 500 km on a single charge. +++ 

+++ MAZDA introduced the redesigned CX-5 in 2016 and it now appears the 2019 model is going to receive some pretty significant updates. Starting under the hood, the CX-5 GT-M will be offered with the turbocharged 2.5-liter SkyActiv-G engine that is available. The engine develops up to 250 hp and 420 Nm. This would be a significant improvement over the current naturally-aspirated engine. Besides the newly optional turbocharged engine, the 2019 CX-5 is slated to receive G-Vectoring Control Plus. G-Vectoring Control has been around for awhile, so it’s possible that G-Vectoring Control Plus is simply an improved version of the technology. Besides the performance changes, the document hints at “substantial visual changes to the interior”. That’s pretty vague, but the CX-5 GT-M will have a redesigned instrument cluster with a 7 inch color display. The range-topping model also features more comfortable rear seats with a new backrest angle and better cushioning. Additional changes are minor, but include the addition of Android Auto and Apple CarPlay as well as updated wheels and new standard equipment. +++

+++ MERCEDES-BENZ ’s compact family of cars will soon welcome the new generation B-Class. The MPV, which will continue to challenge the likes of BMW’s 2-Series Active and Gran Tourer models, will be presented to the public at the 2018 Paris Auto Show, early next month. The third-generation Mercedes-Benz B-Class uses the same underpinnings as the latest A-Class. It promises a more spacious interior, cleaner engines, and some of the safety tech we’ve seen on the S-Class. One of the key features inside will be the MBUX infotainment system, a dual-screen layout that combines the infotainment system and digital instrument cluster into a single package. Just like in the 2019 Mercedes-Benz A-Class, the system will be available in different screen sizes, and will most likely be offered as standard across the range. +++ 

+++ NISSAN is gearing up to the launch the 2019 Altima next month and the company expects the model to be a huge hit despite the fact that many consumers prefer crossovers instead of sedans. Companies such as Ford and Fiat Chrysler Automobiles have cut the number of sedans they offer, but Nissan Altima marketing manager Bruce Pillard thinks sedans will make a comeback. He said: “We think younger generations will buy more sedans than older generations”. He added that younger consumers “don’t want to drive daddy’s car” which is a crossover these days. It seems unlikely that crossover sales will dip anytime soon, but Pillard probably has a point. As the publication noted, Baby Boomers grew up with stationwagons but ended up buying MPVs when they became adults. MPVs sales have now fallen by the wayside as most consumers opt from crossovers. It’s possible that sedans could experience a resurgence, but they are missing the one key ingredient which helped to make station wagons, minivans and crossovers popular in the first place: added practicality. While the Altima certainly can’t hold as much cargo as the similarly priced Qashqai, Nissan has made some changes to the 2019 model which should increase its appeal. One of the biggest is the addition of all-wheel drive which is a common feature on crossovers. Even if the Altima doesn’t sway customers away from crossovers, Nissan still expects the model to do pretty well. Americans continue to be hundreds of thousands of sedans every year and Ford exit from the segment leaves a lot of potential Altima customers out there. As Pillard noted: “if some Mondeo / Fusion owners want to buy an Altima, I would have no problem with that”. +++

+++ PORSCHE is putting the finishing touches on the all-new Taycan and it could be just the tip of the electric iceberg. While I’ve already heard rumors that Porsche wants to add an assortment of new electric vehicles to its lineup, the company wants its entire lineup (besides the 911) to be electric. The plan is reportedly being spearheaded by CEO Oliver Blume who reportedly feels it would be too expensive to develop electric vehicles and an assortment of petrol engines at the same time. There’s little doubt that phasing out most petrol engines would significantly reduce development costs, but a Porsche lineup that is largely electric would prove controversial. Many of the company’s existing models would switch over to electric powertrains between 2022 and 2025. This would significantly increase the number of electric vehicles the company sells. Things would get off to a slow start as the company only projects about 0.2% of sales would come from electric vehicles by the end of 2019. That number would slowly increase to 17.7 % in 2022 and 78.74 % in 2025. Nearly 100 % of sales would come electric vehicles by 2027, excluding the 911. While Porsche seems to be playing it safe with the 911, it remains to be seen if consumer would be willing to buy electric versions of the Boxster, Cayman, Cayenne, Macan and Panamera. However, this isn’t the first time the company has toyed with the idea as Porsche introduced the Boxster E back in 2011. The automaker also offers an assortment of performance-oriented plug-in hybrids. +++

+++ RENAULT is out to get Ford’s new Fiesta Active by creating a small supermini-based crossover of their own, albeit one with a less aggressive styling than the next-generation Clio. Whether the vehicle will be called Clio ‘Something’ or have a completely different moniker altogether is unknown. Either way, small crossovers in Europe are clearly not going anywhere. The upcoming Renault pseudo-SUV is clearly smaller than pretty much all sub-compact crossovers in Europe such as the Captur. This means that the Renault will also be aimed at young buyers who mostly need something to get around in an urban environment, but with a slightly more generous ground clearance than your typical supermini. Compared to the next-generation Clio, its styling appears a little less dynamic, with possibly fewer design creases running along its profile. To compensate, the crossover prototype features a roof rack and will probably come with some plastic cladding for the wheel arches. Like the upcoming fifth-generation Clio, this slightly more rugged alternative should also boast modern connectivity options inside, a large portrait-style infotainment display like the one in the Megane, Level 2 autonomy and possibly a digital instrument cluster. As for its engine range, some type of mild-hybrid option could be available, while existing 0.9-liter TCe petrol units will be replaced by newer 1.0-liter engines. Also, the 1.3-liter turbo petrol developed in conjunction with Daimler, will be on the cards. +++

+++ BMW’s all-new Z4 is already out, and will greet the audience visiting the 2018 Paris Auto Show early next month. The development of the platform-sharing SUPRA is well underway, too, and with the Japanese sports car about to be unveiled, one would naturally assume that talks between Toyota and BMW must be frequent. However, they would be wrong, because, believe it or not, the Supra’s engineers last talked to BMW’s guys some 4 years ago. Supra assistant chief engineer Masayuki Kai said: “We agreed on the packaging, like where is the hip-point of the driver, what’s the wheelbase, the width, where’s the fuel tank, where’s the A-pillar, this was around the middle of 2014”, said the Toyota official. “After that, we completely separated our team. After that, no communication with each other”. Still, the decision to co-develop the new Z4 and Supra was taken back in 2012, so until 2014 they had plenty of time to get things started. But due to the communication black-out, Kai doesn’t even know how many components are shared between the 2 vehicles, except for the platform. “Basically, the platform is the same, so we assume that we are using the same components, but as I mentioned, we are not sure that they will use the same components”, commented Masayuki Kai. Now, the communication black-out can only be good news for both BMW and Toyota enthusiasts, as it assures that both cars have distinct driving dynamics. Just how much they differ from one another is a very good question, one that should be answered when the new Supra finally comes out next year. +++

+++ Following a report on TOYOTA trademarking a Gazoo Racing-badged derivative of the GT86, the Spanish arm of the company released a short teaser video of the upcoming new version. The video came with the caption “It’s all a matter of passion for speed”, translated from Spanish. The more hardcore version of the Toyota GT86 will arrive near the end of the model’s life cycle, rendering it probably a proper send-off to the much-praised rear-driven sports coupe. Expect Gazoo Racing to apply the classic chassis upgrades to the suspension, the brakes and wheels. In addition, the ‘passion for speed’ caption has led to rumors about the 2.0-liter flat-four engine getting a power bump over the standard model but until I have more information, take it with the necessary grain of salt. So far, Gazoo Racing has given us the Yaris GRMN, a limited-run hot hatch powered by a supercharged 1.8-liter with 212 hp and 250 Nm of torque. The sub-brand’s second model is the recently announced Yaris GR-Sport, which features many of the chassis upgrades of its more powerful sibling but will be offered only with a hybrid powertrain. If Toyota’s sub-brand decides to extract more ponies out of the GT86’s engine, they will probably do it without the use of any kind of forced induction. Last year Toyota showcased the GR HV Sports concept, which was based on the GT86 but featured a hybrid powertrain with technology from their Le Mans racer and a 6-speed automatic transmission with a H-pattern gear selector. +++

+++ Automotive parts supplier ZF is investing heavily in developing the latest vehicle technology. The German company will invest $14 billion over the next 5 years on autonomous and electric tech, spending roughly $2.8 billion annually. That’s more than the $2.57 billion which ZF spent in overall research and development in 2017 and shows just how serious the company is about the future of the automotive industry. In a statement, ZF announced that it is currently working on a bespoke battery-powered delivery van with autonomous driving capabilities that will be ready for series production in the next 2 years. The company believes it will act as a direct rival to vehicles like the Volkswagen Crafter and Ford Transit. ZF revealed that the van will be able to easily to navigate itself through city centers, maintain its road position even on streets without markings, recognize traffic lights, and move around double-parked cars. Additionally, it will offer a ‘follow me’ function that will allow a parcel carrier to make deliveries on foot. According to ZF chief executive Wolf-Henning Scheider, the automotive parts supplier is already in talks with several customers who could purchase fleets of its delivery vans. ZF won’t have the market all to itself, however. Germany’s postal service is already producing its own all-electric delivery vans and is expected to introduce certain self-driving features in the coming years. “Driverless transport vehicles and automated functions will play a significant role particularly in zoned areas like company terminal yards, forwarding company depots or air and sea ports”, Scheider added. “In the near future, we will be seeing more autonomous vehicles in such zoned areas faster than on public roads. The cost, safety and efficiency benefits for customers will make a difference here”. +++

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