+++ Apart from the Valkyrie, ASTON MARTIN has some new supercars in the works, and the latest patent applications give us a hint at what one of them might be called. The British automaker filed the name Valhalla with the European intellectual-property authorities to use on “passenger cars and racing cars and parts and fittings therefor”. And while we may not know specifically which model Aston intends to use the name for, the speculation is that it’ll be used on the forthcoming “baby Valkyrie”. It would make sense, after all. For one thing, Aston Martin has a long history in using names starting with the letter V for its vehicles: think along the lines of the Vantage, Vanquish, and Valkyrie; not to mention past models like the Vulcan and Virage, the new Varekai crossover, and the Volante modifier it’s applied to some of its convertibles. For another, the name Valhalla is closely tied to that of the Valkyrie. In Norse mythology, Valhalla is the world of the afterlife to the Valkyries carry the spirits of slain warriors. It’s a theme on which Koenigsegg has also tapped into for the forthcoming Ragnarok, as it’s next hypercar will reportedly. That might seem more natural a connection for a company based in Scandinavia. While the name might sound cool and has made it to popular culture by Marvell’s latest Thor movie, it actually refers to the battle at the end of the universe and the demise of the Norse gods. Anyhow, The model we’re now expecting to carry the Valhalla nameplate is slated to slot in underneath the Valkyrie: still a hypercar, but more in the high-seven/low-eight-figure range than the multi-million-dollar Valkyrie. Think more along the lines of the McLaren Senna rather than the Mercedes-AMG One and Bugatti Chiron. Beneath that, Aston’s also working on a low/mid-six-figure supercar to take on the likes of the Ferrari 488, Lamborghini Huracan and McLaren 720S. These new mid-engined models will sit alongside the traditional front-engined GTs the brand has become famous for, as well as the upcoming Lagona line of luxury EVs. The overall picture is one of a far more prolific Aston Martin than the one with which we’ve become familiar over the ages, and we’re looking forward to seeing how the new plan shapes up in the coming years. +++
+++ AUDI ’s first-ever electric SUV, the e-Tron, will be late to arrive in showrooms by 4 weeks due to a software development issue, stated a spokesman for the brand. Apparently, the issue is with a piece of software that was modified during the development process, for which the German automaker now needs new regulatory clearance before it can begin sending its new EV crossover to showrooms around the world. The e-Tron was launched globally last week in San Francisco, part of Audi’s effort to expand the market for all-electric premium vehicles, while also positioning itself to take the fight to Tesla, which had been operating unencumbered in this sector for years. Reports of the e-Tron’s 4 weeks delay first surfaced in a German newspaper, citing sources close to the company. It’s been reported that delivery for the new model could be delayed by several months due to this software issue. The newspaper also claims that Audi is currently renegotiating its deal with LG Chem, their South Korean EV battery supplier, which apparently wants to increase prices by roughly 10% because of such high demand. LG Chem is a supplier for the Volkswagen Group, but also Daimler. Meanwhile, an LG Chem official declined to comment, citing client confidentiality. The Audi spokesman also didn’t offer any clarification with regards to any price negotiations with the South Korean company. +++
+++ Ford has already confirmed plans for a Mustang Hybrid and it appears CHEVROLET is considering an electrified Camaro. General Motors is apparently surveying customers about potential engine options for Camaro. The engine options include 2 hybrids variants and a new turbocharged 2.7-liter 4-cylinder. The survey suggests the latter engine would produce 314 hp and enable the Camaro to accelerate in 5.4 seconds. While the survey doesn’t go details, the engine sounds identical to the one used in the 2019 Silverado. It could replace the current turbocharged 2.0-liter 4-cylinder engine which develops 278 hp and 400 Nm. Besides being more powerful, the engine would put the 4-cylinder Camaro on par with the Ford Mustang EcoBoost. That model has a 2.3-liter EcoBoost 4-cylinder which also produces 314 hp. The survey also mentioned 2 hybrid options. The first is a hybridized 2.0-liter 4-cylinder which has a combined output of 370 hp. This would enable the car to run to 100 km/h in 4.6 seconds and return a combined fuel economy rating of 7.8 L/100km. The second hybrid option would be based on the 6.2-liter V8 and bring its combined output from 461 hp to 552 hp. The extra power would reduce the 0-100 km/h time from 4.2 seconds to 3.9 seconds, while also increasing the combined fuel economy rating from 11.7 L/100km to 9.8 L. While the numbers should be taken with a grain of salt, the survey suggests the entry-level hybrid option would cost $4,000 and be the same price as the 6.2-liter V8. The hybrid V8, on the other hand, would be an $8,000 option or $4,000 more than the standard V8. Chevrolet appears to be looking into hybrid engines as a direct response to the Mustang Hybrid which will be launched in 2020. The company has been tight-lipped about the model, but has previously said the car will be “all about delivering V8-like performance with more low-end torque”. Little else is known about the Mustang Hybrid, but rumors have suggested the model will have an electric motor that is sandwiched between a 2.3-liter EcoBoost 4-cylinder engine and a 10-speed automatic transmission. This could enable the car to have around 405 hp and run from 0-100 km/u in about 5 seconds. +++
+++ DAIMLER said its operating profit would fall by over 10 % this year, its second earnings warning since June, blaming “government proceedings and measures in various regions” as a crackdown on diesel emissions takes a toll. Daimler warned investors it expected its full-year earnings before interest and tax to be “significantly below” last year’s level. Earnings at Mercedes-Benz Cars, its main contributor, will likewise fall “significantly below” the prior-year level. Analysts at Evercore ISI said in a note that the profit warning was not triggered by a slowdown in business, since demand for Mercedes-Benz cars remains high, but was caused by one-off factors such as regulatory and court rulings. The company did not gives details on what was behind the latest warning in a statement rushed out ahead of the scheduled release of quarterly earnings next week. A hit of up to 400 million euros was related to government proceedings into diesel and a European Court of Justice ruling around Mercedes’ use of banned cooling agent R134a, analysts at Evercore ISI said. The Stuttgart-based owner of Mercedes-Benz is being investigated for its diesel emissions in Europe and the United States, and last month announced Chief Executive Dieter Zetsche would step down in 2019 to become chairman from 2021. The company’s shares fell to a 5-year low on the news, dragging other European auto stocks lower, before paring some of the losses. The European auto sector index .SXAP fell 3.8 % to a 2-year low. The warning from Daimler came after economic growth in China, a major market for carmakers, slowed to its weakest quarterly pace since 2009. Adding to concerns about the broader sector, Swedish truckmaker Volvo forecast slower demand for trucks in Europe and China next year, while French tire maker Michelin cut its full-year market forecasts. Daimler rushed out the release of third-quarter earnings figures that fell well short of market expectations. The profit warning comes amid friction between the German government and carmakers over who pays for expensive retrofits of new exhaust systems for polluting older vehicles, and an ongoing probe by U.S. authorities into emissions. In May, German prosecutors searched Daimler offices as part of a fraud probe related into possible manipulation of exhaust-gas after-treatment in diesel cars. A spokesman for the Stuttgart prosecutor’s office on Friday said there was “nothing new” to say about this investigation, which is ongoing. In February 2016 the United States Environmental Protection Agency asked Mercedes-Benz to explain emissions levels in some of its diesel cars. The Stuttgart-based company also reported lower unit sales from its vans division due to delivery delays; and the need to recognize costs related to a European Court of Justice ruling on vehicles using an old coolant. Daimler said its third-quarter earnings before interest amounted to €2.49 billion, down 27 % from €3.41 billion in the year-earlier period due to a 35 % profit fall at Mercedes-Benz Cars to €1.37 billion. +++
+++ DYSON ’s new electric car is edging closer to production, with the company confirming a new manufacturing facility will be built in Singapore and finished by 2020. The purpose-built 2-storey plant is part of a €2.9 billion investment in the electric car project, with the production model set to be launched in 2021. The announcement follows the unveiling of its proving ground at Hullavington Airfield, Wiltshire, which includes test tracks, motorway-like surfaces, high-speed strips and an off-road course. The decision to base the plant in Singapore is partly influenced by Dyson already having a strong foothold there, employing 1.100 people at a facility that designs and builds the high-speed digital motors used in the firm’s vacuum cleaners and hand dryers. In a letter to Dyson employees, CEO Jim Rowan said: “Singapore also offers access to high-growth markets as well as an extensive supply chain and a highly skilled workforce. Singapore has a comparatively high cost base, but also great technology expertise and focus. It is therefore the right place to make high-quality technology-loaded machines, and the right place to make our electric vehicle”. Dyson initially made its vacuum cleaners and washing machines in Wiltshire but transferred production to Malaysia in 2002 and, in 2004, opened a manufacturing plant in the country in a joint venture with a Singapore-based investment group. In 2013, Dyson opened its digital motor plant in Tuas, Singapore, which has since been significantly expanded. Having a supply network in the region will give it a head start in ramping up production for its first electric car. Dyson’s long-term automotive plans suggest a diverse range of electric cars will eventually be produced. We already know there will be a 3-car line-up, with an SUV almost a certainty, on top of the high-end model already mooted. A sports car will not be part of the range, but a top speed of more than 160 km/h for one or more models is suggested. +++
+++ FORD will stop car production in its plant in Almussafes in eastern Spain for 9 days during November due to a lower demand for its vehicles, a spokesman said. Engine production would also be halted for 13 days next month, he said. Part of the Spanish production of Ford engines is sent to Canada for assembly of its Edge model. The latest production shut down comes after a 3-day halt in October. Ford employs some 7,500 workers at the Almussafes plant which produces around 1,840 cars (Mondeo, S-Max, Galaxy) a day. +++
+++ HYUNDAI wants to ensure that each of its future models adopt a distinctive look instead of variations of the same theme. Senior chief designer at the Hyundai Design Center, Chris Chapman, said that rather than continuing a theme of matryoshka dolls throughout its range where all models look similar, it wants to instead switch things up to reflect the different designs of chess pieces. “We’re going for more of this chess-piece rather than the family look. We’re using consistently shared elements, but we’re going to avoid this sort of Russian-doll approach to our vehicles in the future”, Chapman said. According to Chapman, this new philosophy will see forthcoming Hyundai models with designs reflective of customer tastes. For example, the Kona is targeted towards younger buyers and therefore has a unique and fun look. By comparison, the Santa Fe is aimed at families and has a more mature look. Clear styling differences will also distinguish certain powertrains from others. For example, the ICE-powered Kona and Kona Electric have a number of styling differences. “Both kind of have an extroverted design, but they’re dressed differently for different demographic purposes”, Chapman said. Next year, the world will be offered an excellent look of just how serious Hyundai is with its new philosophy thanks to next-generation models of the Sonata / i40 and Elantra. “You’re going to think they’re from different companies”, said Chapman. In an industry where it is often difficult to tell the difference between vastly different models from one automaker, it’s a breath of fresh air that Hyundai wants to be a little different. +++
+++ For the first 16 days of October, the JAGUAR I-Pace outsold the Tesla Model S and X combined in Norway to the tune of 40 %. I know this because Norway is the rare country that reports EV registrations very close to real time. Norway also is the “canary in the coal mine” for EV sales trends, because it has the highest percentage of EV sales in the world, by far. The relevancy of the data right now may not be as good as it ought to be for the reason that all automakers are diverting EV production to The Netherlands, where the tax incentive expires at year end. That said, the Jaguar I-Pace is now the 5th best-selling EV in Norway, challenging much less expensive cars. It is not a fluke that it’s outselling Tesla. Every industry has its “canary in the coal mine”: a leading indicator that analysts study to see where the broader market may be heading in the months to come. In the electric car world, Norway is that canary in the coal mine. Why Norway? Because Norway has the highest share of battery-electric vehicle (BEV) sales in the world, a number which hit 45 % in the month of September: here. Add plug-in hybrids (PHEVs) and the total plug-in number reaches 60%. Why is Norway yielding such high share of electric car sales, far higher than any other country? Here’s how it works: Regular cars face an insanely steep excise tax in Norway. It basically doubles the car price compared to the U.S. and much of the rest of Europe. However, if you buy an electric car, you don’t have to pay that tax, or for that many other taxes and fees that hit regular cars. That means a plug-in car costs at least approximately half that of a regular car, and depending on the value on ongoing incentives and benefits, even less. Wouldn’t you like to buy a $160,000 car for $80,000? And have it cost like a $40,000 car to run thereafter? The only surprising thing is EVs aren’t 100% of Norwegian new car sales. Looking at the Norwegian real-time electric car registrations site as of Tuesday evening Norway time, the four top EV sellers for 2018 year-to-date are (numbers as of October 16): Nissan Leaf – 12,245 units, Volkswagen e-Golf – 5,985 units, BMW i3 – 4,738 units, Kia Soul EV – 4,271 units. Basically, these are cars that are all less expensive than the least expensive Tesla Model 3 available right now ($50,200 including delivery charge) in the U.S. market. Some of them start around $30,000 in the U.S., although the BMW starts a lot closer to the mid-40s. In Europe’s premium EV market, however, Tesla has reigned supreme with the Model S and Model X. A 2-seat plug-in hybrid such as the BMW i8 doesn’t really count as proper direct competition. Tesla got its first long-range battery-electric vehicle competition with the Opel Ampera-e. However, right after this car was launched in Europe in mid 2017, General Motors sold its Opel brand to Peugeot, which more or less cancelled the product in most of Europe in stages after August 1, 2017. As a result, the GM car never became any meaningful threat to Tesla in Europe. The new owner of the Opel brand effectively killed it. One can only assume that it had to do with the product not being sufficiently profitable (or profitable at all); at least for the brand’s new owner, PSA. But even so, the Opel Ampera-e, while certainly a competitor to Tesla, is a lot less expensive than a Model S and X. Round numbers, it’s half the price or even less. Therefore it’s both a competitor and it’s not, depending on the priorities of the buyer. It is for some people, but not for others. Rather, the long-range BEV market has been waiting for a true premium offering that, in the U.S., would cost $70,000 and up, geared to compete directly against a blend of Tesla’s offerings, including the Model S and X. The Jaguar I-Pace is this kind of car. It is not a perfect match for either the Model S or X, but it’s close enough. It’s taller than a hatchback such as the Model S, but it’s also shorter. It’s not as tall or long as the Model X. It’s more like a crossover version of the Model 3 would be; in other words, like a future conceptual Model Y. That was a more detailed way of saying that, broadly speaking, the Jaguar I-Pace is definitely a competitor to Tesla Model S and X, and in the future also against the highest-end versions of the Model 3. But the Model 3 is not yet on sale in Europe. This makes it extra interesting to see how the Jaguar is doing when it goes on sale in direct head-to-head competition against Tesla Models S and X in Norway, which is where we are getting the earliest and most granular data. The Jaguar i-Pace went on sale (aka, started deliveries) in Norway shortly before the end of September. October will be its first full month of sales in Norway. However, thanks to Norway’s real-time registration reporting system, we already have numbers that can tell us how the Jaguar i-Pace is doing against Tesla up until only minutes or hours ago. With all that said, given where numbers stand in the evening in Norway, Tuesday October 16, here are the results for the October month sales to this point: Jaguar i-Pace: 181 units, Tesla Model S: 53 units, Tesla Model X: 76 units. That means that, just after half of October is over, the Jaguar I-Pace is outselling Tesla S and X combined by 40 % in Norway. The caveats here are of course numerous. The most obvious one is that 16 days is a short period of time, and naturally things will change (up or down) literally every few hours or even minutes, as the month rolls along. The absolute level of sales here remains on the small side. That said, there are only 4 other EVs that have outsold the Jaguar i-Pace in Norway in October: Nissan Leaf: 614 units, VW e-Golf: 389 units, BMW i3: 259 units, Kia Soul EV: 183 units. So basically, Jaguar i-Pace isn’t just beating Tesla, it’s also knocking on the door of the lower-priced EV bestsellers in Norway. Not bad for a car that’s approximately twice the price. The other major factor in the EV world right now is that many automakers (Tesla and Jaguar not the only ones) are diverting as many units as possible to The Netherlands until the end of this year. The Netherlands’ tax incentive for EVs is expiring, and we should expect very low EV sales in The Netherlands in 2019 unless their tax laws change. However, until January 1, EV sales in The Netherlands will be setting record highs; from all automakers. Therefore, both Jaguar’s and Tesla’s Norway sales could be, and likely are, impacted by all of those units being diverted to The Netherlands. This alone distorts what might have otherwise been a normal competitive dynamic in Norway. The other factor is that October is Jaguar’s first full month of sales in Norway, and Q4 will of course be its first full quarter. Jaguar naturally has a backlog to fill, which in isolation means its sales will be higher than a normal steady-state. On the other hand, this being Jaguar’s first full month and quarter, perhaps production also is lower than a normal steady-state. These combined demand and supply factors simply mean that the uncertainty about the Norwegian competitive environment will be high until we get into the March quarter (Q1). For that reason alone, rest assured that this article will have to be followed by many others, over the next 6 months in particular, to analyze how Jaguar’s I-Pace sales are impacting Tesla. This goes not only for Norway, but for other European countries too. I expect a disproportionate percentage of Jaguar’s I-Pace product to be going to Holland, for the same reason I mentioned above in the context of Norway. In fact, Jaguar has never given any official indication of its I-Pace production. We do know that the facility in Graz, Austria, has a ceiling of 200,000 cars per year, but it’s shared among many models from multiple automakers. Subtract close to 25,000 Mercedes G units, 50,000 BMW 5-series units, and then the Jaguar E-Pace (not a plug-in of any kind), and I-Pace production clearly will not even come close to approaching 100,000 per year, assuming a bare minimum of 25,000 E-Pace units (likely much higher). However, that still leaves a huge gap between the lowest guesses out there (15,000 a year) and something more like 60,000 units. We simply don’t know. There’s plenty of speculation out there, but no official confirmation from Jaguar of which I am aware. One also can assume that the I-Pace production number is subject to change over time. Perhaps it’s starting out near 20,000 per year in 2018, but could increase to 40,000 or even 60,000 in the months to come. That would not be an unrealistic scenario. As far as I know, no journalist has been placed at the end of the I-Pace production line in Graz, Austria, and measured the production pace. In contrast, Audi told journalists at the e-Tron launch event on September 17 that it will be making 200 units per day in its Brussels factory. That points to an annual production rate of at least 50,000 units. It’s a canary in the coal mine that does not bode well for Tesla as we look into 2019. Keep in mind that sales of the Hyundai Kona EV also just started in Europe (at a much lower price point) and that Audi e-Tron starts deliveries in Europe before the end of this quarter (U.S. sales in April 2019). Somewhere near December 2018, we may also see the Kia Niro EV: first in Europe, and then in the U.S. Until the Tesla Model 3 shows up in Europe, Tesla’s sales there will see severe competitive pressure staring this quarter, not even in 2019. +++
+++ Jaguar Land Rover has, as it announced earlier this month, halted production at its Solihull manufacturing facility in the UK. The production will be suspended for 2 weeks and comes in response to a dramatic drop in sales across China. The plant, where the LAND ROVER Discovery and Range Rover models are manufactured, employs 9.000 staff, but no jobs are thought to be at risk and all staff will be paid for the duration of the plant’s closure. Discussing the issue a fortnight ago, a company spokesperson confirmed that the move was made to adjust production to demand. “As part of the company’s continued strategy for profitable growth, Jaguar Land Rover (JLR) is focused on achieving operational efficiencies and will align supply to reflect fluctuating demand globally as required”. JLR reported a 46 % drop in September sales in China earlier this month. Worldwide sales also fell by 12.3 % year-on-year in September, to 57,114 vehicles. The British automaker anticipated sales declines at the start of the year in China because consumers have been delaying new vehicle purchases until after the country cut import duties on vehicles. They also thought sales would rebound shortly afterwards, but they haven’t, probably due to the trade tensions between China and the United States. “Customer demand in China in particular has struggled to recover following changes in import tariffs in July and intensifying competition on price, while ongoing global negotiations on potential trade agreements have dampened purchase considerations”, Jaguar Land Rover chief commercial officer Felix Bräutigam said. +++
+++ When Daimler revived the MAYBACH brand, it launched it back onto the market with its own dedicated limousines. Those have since given way to spruced-up versions of existing Mercedes models, but the uber-luxe marque could produce its own unique vehicles again in the future. The long-term plan, outgoing Daimler chief Dieter Zetsche told, is to have Maybach “stand on its own two feet, like AMG”. The performance division, which stands as a separate pillar within the Mercedes brand alongside Maybach, offers the GT coupe, roadster, and new 4-door, and will soon launch the One hypercar. While we don’t know what Maybach may offer in turn, the Vision Maybach Ultimate Luxury crossover and Vision Maybach 6 coupe and cabriolet concepts could give us a couple of hints at where it’s going. The former previewed the next-generation Mercedes GLS (a more luxurious version of which Maybach is sure to offer), while the latter were more unique 2-door concepts envisioned to be even higher-end than the S-Class coupe and cabrio. The concepts were all rather different, though, from the Maybach 57 and 62 limousines the brand offered previously. While the S-Class limo that’s been the mainstay of the Maybach lineup since has carved out a new niche for Mercedes in between, say, the Audi A8 and Bentley Flying Spur, or the BMW 7 Series and Rolls-Royce Ghost, Daimler may be keen to renew its assault on the top British marques with higher-end Maybachs as well. In the meantime (and beyond), the bulk of Maybach’s work will be producing super-luxurious versions of top Mercedes models like the S-Class, the forthcoming new GLS, and maybe the new G-Class (as it did before with the G65 Landaulet). +++
+++ Last month, MERCEDES-BENZ launched a brand-new GLE, which has been designed from the ground up and replacea the previous iteration, which was nothing more than a facelifted ML with a new moniker. Development of the brand’s BMW X5, Volvo XC90 and Audi Q7 rival continues, though, as more versions are expected. One of them is a plug-in hybrid, which will arrive in the second half of 2019, with an electric range of 100 km. “We are now in the generation where we’re switching over from our 30 km hybrids to 50 km”, said the chief of Daimler research and Mercedes-Benz development, Ola Kallenius. “The GLE will be the first car with a 100 km range on a plug-in hybrid in the WLTP cycle”, he added. We’re less than a year away from seeing the new GLE plug-in hybrid, but Kallenius was not eager to disclose anything about the powertrain and simply stated “we did not say that, but you shall see soon” when asked whether the engine would be a diesel. The new GLE PHEV is one of the cars that will help Daimler meet the fleet emissions targets. It’s part of the German automaker’s plan of electrifying every car in their lineup, from the A-Class to the S-Class, with the offering including mild-hybrids, PHEVs and battery-electric models. +++
+++ Over the summer, a mysterious PORSCHE 718 Cayman T was revealed in a guide submitted to the National Highway Traffic Safety Administration. While it didn’t reveal much about the upcoming model, new details are starting to emerge about the car. The Cayman T will follow in the footsteps of the 911 T and offer a more focused driving experience. In order to achieve this, the model will reportedly adopt an assortment to weight saving measures including using thinner glass and lighter sports seats. The model could also eschew an infotainment system and adopt fabric door pulls. These changes could enable the car to be approximately 20 kg lighter than the 718 Cayman S. Besides the weight saving measures, the Cayman T will reportedly have a sports exhaust system, a reduced ride height and 20-inch alloy wheels. The model should also come standard with the Sport Chrono package which adds Porsche Active Driveline Mounts, launch control and a rev-matching function on models equipped with a manual transmission. The model will be positioned between the Cayman S and GTS and use the turbocharged 2.5-liter 4-cylinder. It is expected to produce around 365 hp which is 10 hp more than the Cayman S and 5 hp less than the Cayman GTS. We shouldn’t have to wait too much longer to find out all the details as the 718 Cayman T is slated to arrive for the 2019 model year. +++
+++ RENAULT reported a 6 % drop in third-quarter revenue, hit by a downturn in emerging-market sales and the automaker’s withdrawal from Iran. Revenue fell to €11.5 billion in the 3 months ended Sept. 30, Renault said, with automotive division revenue down by a steeper 8.4 % at €10.06 billion. Renault suffered a sales decline in India, currency and market slumps in Argentina and Turkey and the effect of its withdrawal from Iran. Renault’s global vehicle registrations rose 2.9 % in the quarter, boosted by a new commercial van partnership with China’s Brilliance. Excluding the joint-venture sales, Renault registrations outside Europe fell 10 %. The company avoided a repeat of the profit warnings that have dented peers including Daimler and BMW, Renault reiterated full-year guidance for 2018 including an increase in revenue, positive automotive free cash flow and a group operating margin above 6 %. But the automaker cut its market outlook for China, where a slowing economy has weighed on car sales. Renault sees growth of 2 % in China, versus a previous forecast of 5 %. Renault played down the impact of new WLTP emissions tests that have led to the withdrawal or suspension of some European models. “I think we can say we’ve managed this challenge successfully”, Chief Financial Officer Clotilde Delbos said on a call with analysts. The new tests “may still impact the business” in the 4th quarter, she cautioned. The new Worldwide Harmonized Light Vehicle Test (WLTP) became mandatory in Europe on Sept. 1, forcing carmakers including Volkswagen and Renault to halt deliveries of some models that had yet to be re-certified. The deadline triggered a rush of discounted sales in August, followed by a slump in September, with Renault among the most affected. WLTP disruption has been cited in profit warnings by BMW, Daimler and parts maker Valeo. Renault’s numbers were “an inconclusive start to earnings season”, said Evercore analyst Arndt Ellinghorst, who found its 4th quarter comments “hardly confidence-inspiring”. Stock clearance sales by Renault dealers were “more pronounced than we had expected”, Ellinghorst said. “Clearly, WLTP played a part”. +++
+++ A team of manufacturing analysts spent 6,600 hours inside a warehouse north of Detroit dismantling a TESLA Model 3 in order to find both the good and the bad with regards to Elon Musk’s most budget-friendly vehicle. According to Sandy Munro, founder of Munro & Associates, the Model 3 costs about $2,000 more to produce than a similarly priced BMW i3, and due to Tesla building it in its Gigafactory may also have additional cost issues within the assembly plant, reports Bloomberg. “If that car was made anywhere else, and Elon wasn’t part of the manufacturing process, they would make a lot of money”, said Munro in an interview. “They’re just learning all the old mistakes everyone else made years ago”. Still, because he admires Tesla’s technology, he sent the EV-maker a pro bono list with 227 suggested improvements. For example, one major design flaw he found was the steel and aluminum frame at the bottom of the car, which should ultimately increase safety. However, according to Munro, since the car’s battery already sits in the floor and adds stiffness, the Model 3 came out heavier and more expensive than it should have been without any added benefits. Meanwhile, the aluminum trunk is made from multiple pieces held together with rivets and weld points instead of a one-piece lighter and cheaper fiberglass design, which is how other automakers go about doing things. The rear wheel well on the Model 3 has as many as nine pieces of metal riveted, sealed or welded together, whereas the Chevrolet Bolt (Opel Ampera-e), for instance, has one stamped piece of steel. “The body is their single biggest problem”, said Munro. “It’s killing them”. While Tesla declined to comment, the company did previously say that Model 3 production has improved since the early days, with “quality rapidly getting better”. The Model 3 that was stripped down was a $50,000 version, which Munro estimates cost $34,700 to build. However, a cheaper version examined by his team would cost less than $30,000 to build, because of the smaller battery, making it cheaper than the Chevrolet Bolt and BMW i3. However, Munro’s margin estimates don’t include R&D investment and engineering costs. Yet, he does acknowledge that the Model 3 can travel longer distances than its rivals on a single charge and is also a lot faster thanks to its battery and advanced electric motor, which costs Tesla $754 per car, compared to $836 for the Bolt’s. “This electric motor is a game changer. Everyone should be benchmarking this”, he said, adding that the battery design is genius and should last for a long time, while he would like to examine the proprietary electric motor more to find out what makes it so good. Also, software and electronics inside the Model 3 are better than what you get from other automakers. Tesla managed to reduce the amount of wiring found in the car by packing a lot of the electronics in small circuit boards; the type of advantage Silicon Valley has over everyone else. Bottom line: battery, electric motor, electronics get the thumbs up, while the chassis assembly would have benefited if Tesla had more experience like a traditional manufacturer like General Motors. +++
+++ Ford and VOLKSWAGEN are apparently holding discussions about a wide range of serious partnership options. In mid-June, the two automotive juggernauts signed a Memorandum of Understanding to explore a strategic alliance and partnerships. Volkswagen’s press release on the matter said that the automakers were exploring synergies in a host of areas and would develop commercial vehicles together. A partnership on commercial vehicles may just be the start of a much stronger and serious relationship between the pair. Jon Gabrielsen, an independent market economist, claims that Volkswagen and Ford could form a joint venture. This would benefit both companies as Ford is very strong in the United States whereas Volkswagen is weak. Similarly, VW is much stronger than Ford in other key markets, including Asia. Both automakers freely admitted in June that they wanted to strengthen global competitiveness, but said that no matter what partnerships were formed, they “would not involve equity arrangements, including cross ownership stakes”. Speaking to a German newspaper in late August, the chairman of the board of management of Volkswagen Commercial Vehicles, Thomas Sedran, said nothing had been set in stone. “We are currently exploring the possibilities of a collaboration. I am very confident that we will have something more concrete to say about this in the coming months. However, nothing definite has been decided yet. Only when this is the case can we think about how we might be able to develop the next generations of models together. Although Volkswagen is the largest car manufacturer in the world, we still don’t have the scale in certain areas to achieve optimal cost positions”. According to longtime industry analyst John McElroy, all signs point towards the alliance involving more than a partnership on commercial vehicles. “I think the commercial truck operations were a point of beginning for their discussions and, as they got more and more into it, they probably see a lot more synergies. No one is sure of the form it’s going to take but, look, we need a lot of consolidation in the industry. There are too many car companies with too many brands making too many models”, McElroy said. +++
