+++ A federal grand jury in Detroit indicted 4 managers at AUDI as part of the U.S. government’s investigation into the German automaker’s diesel emissions cheating scandal, according to court documents. Volkswagen admitted in September 2015 to secretly installing software in nearly 500,000 U.S. vehicles to cheat government exhaust emissions tests and pleaded guilty in 2017 to felony charges. In total, 13 people have been charged in the United States, including the 4 Audi managers. Managers Richard Bauder, Axel Eiser, Stefan Knirsch and Carsten Nagel all worked in Audi’s engine development division in Germany. Bauder was head of Audi’s Diesel Engine Development department. A Justice Department spokesman said none are in custody. All are believed to be in Germany. Lawyers for the four could not immediately be identified. The government previously indicted one former Audi manager in July 2017, Giovanni Pamio. The new indictment is a significant expansion of the government’s criminal probe. The 4 managers are charged in a 12-count indictment with conspiring to evade U.S. emissions standards in diesel vehicles sold in the United States with 3.0-liter engines. The vehicles include the 2009-2015 Audi Q7 vehicles as well as other Q5, A6, A7 and A8 diesel models and Volkswagen Touareg vehicles. They are accused of wire fraud, violating the Clean Air Act and conspiracy. Volkswagen spokesman Pietro Zollino said the company continues “to cooperate with investigations by the Department of Justice into the conduct of individuals. It would not be appropriate to comment on individual cases”. The indictment said the Audi managers realized they could not meet U.S. pollution standards given design constraints by Audi “including the need for a large trunk and high-end sound system”. Audi engineers told Bauder in 2008 that unless the tank was larger “Audi had to cheat to pass U.S. emissions tests” and ensure that drivers could go 16,000 kilometres between dealer service visits, the indictment said. In total, Volkswagen has agreed to pay more than $25 billion in the United States for claims from owners, environmental regulators, states and dealers, and has offered to buy back about 500,000 polluting U.S. vehicles. The buybacks will continue through 2019. In 2017, VW also pleaded guilty to fraud, obstruction of justice and falsifying statements in a U.S. court. Under the plea deal, the automaker agreed to sweeping reforms, new audits and oversight by an independent monitor for 3 years. U.S. prosecutors previously charged former VW Chief Executive Officer Martin Winterkorn, who remains in Germany. 2 other former Volkswagen executives have pleaded guilty in the investigation and are in prison. Germany does not typically extradite its citizens for prosecution in U.S. courts. Former Audi Chief Executive Rupert Stadler was not among those indicted. He is being investigated in Germany for his alleged role. Volkswagen in October terminated Stadler’s contract against the backdrop of a criminal investigation into whether he was involved in emissions cheating. +++ 

+++ General Motors ’ strategy to make its luxury CADILLAC marque its lead electric vehicle brand is the automaker’s final opportunity to turn the unit around and make it a success, a top executive said. “We don’t have any chances left with taking Cadillac to a really new place”, newly appointed GM president Mark Reuss told on the sidelines of the Detroit auto show. “This is pretty much it. So we really have to hit the ball here”, he added. “It’s my job to make sure we do”. General Motors said that a Cadillac would be the first vehicle built on the No. 1 U.S. automaker’s “BEV3” platform to challenge electric carmaker Tesla. Tesla’s market capitalization is higher than GM’s, even though Tesla has never posted a full-year profit. Reuss did not elaborate on what would happen if the multi-year effort to make the Cadillac brand more profitable failed. But GM has demonstrated repeatedly over the last 2 years a willingness to exit unprofitable markets and kill weak car lines in North America. In November it put five North American factories, including 4 in the United States, on notice for closure and cut almost 15,000 jobs. GM has struggled for years to make Cadillac more competitive. Last spring the automaker replaced veteran auto executive Johan de Nysschen as head of the Cadillac brand. Appointed in 2014, he outlined bold plans to reshape Cadillac’s lineup with a $12 billion product program. He moved Cadillac’s headquarters to New York in 2015, saying the brand’s executives should be closer to the urban customers who had for years shunned it. In a belated bid to catch up with rapidly shifting U.S. consumer preferences, Cadillac said in 2017 it would shrink its lineup of sedans and add SUVs and hybrid and electric vehicles. Cadillac U.S. sales fell more than 1 % in 2018. Last week, GM unveiled its new Cadillac XT6 that goes on sale later this year and will be built in Spring Hill, Tennessee. GM said in 2017 it planned by 2021 to introduce a new dedicated flexible electric vehicle architecture and an advanced battery system to support the development of at least 20 new models in the United States and China. Much of Cadillac’s future growth is expected to come from China, the world’s largest car market. Reuss said “one of the first” fully electric Cadillac models using the new platform would be on the market around 2022. He said it was too early to tell how long it would take for Cadillac’s entire lineup to become electric, but he anticipated a combination of electrified and combustion engine models “for quite a few years” to come. “All I’m focused on is what we’re doing right now”, Reuss said, “and getting momentum back in Cadillac”. +++

+++ Unions at FIAT CHRYSLER AUTOMOBILES ‘ (FCA) Italian factories expect domestic production to continue to decline this year after double-digit drop last year, largely because of slumping sales at Alfa Romeo and Maserati. FCA’s production in Italy fell 10 % to 667,526 units in 2018, according to the FIM-CISL Italian trade union. The decline came after sales of Alfa Romeo and Maserati models dropped in Europe and the U.S., especially in the second half. Production at the FCA’s Italian plants will fall further in 2019 for various reasons, said Ferdinando Uliano, head of FIM-CISL Automotive. He cited the economic situation in Italy, the lack of new models and the discontinuation in the summer of the Fiat Punto and Alfa Romeo Mito, which combined accounted for 38,000 units produced in 2018. Production of the Maserati Levante, Alfa Romeo Giulia and Stelvio midsize SUV fell most in 2018, the union said. Output of all FCA models expect the Jeep Renegade and Fiat 500X fell last year. The union broke out 2018 production by plant as follows: Mirafiori: Levante production down 44 % to 19,100; Alfa Mito down to less than 10,000 from nearly 11,000. Cassino: Giulia down 41 % to 28,546; Stelvio production down 28 % to 39,782. Pomigliano: Fiat Panda down 10 % to 183,589. Melfi: Fiat Punto down 47 % to 28,055; Fiat 500X and Jeep Renegade SUVs up 14 % to 113,712 and 12 % to 198,098 respectively. FCA will partially lay off workers at the Mirafiori and Pomigliano plants during 2019; the partial temporary layoffs at Pomigliano will run until September 10th 2019, according to unions. Alfa Romeo’s global vehicle sales increased by 8.7 % to 125,000 last year, according to estimates from market researcher JATO Dynamics. Maserati’s volume fell 21 % to 38,000, JATO said. A €5 billion investment in FCA’s Italian plants through 2021 was announced by the automaker in November. FCA wants to boost production by adding new electrified models such as a full-electric Fiat 500 at Mirafiori, an Alfa Romeo compact SUV at Pomigliano, a Maserati midsize SUV at Cassino and Jeep Compass production for European customers in Melfi. FCA boss Mike Manley warned in Detroit that FCA is reviewing the investment plan after the government approved subsidies of up to €6,000 to buyers of new low-emission vehicles while introducing taxes on the larger gasoline and diesel cars. “It certainly means it needs to be reviewed again”, Manley told journalists on the sidelines of the Detroit auto show. +++ 

+++ FORD forecasts a weaker-than-expected 4th quarter profit and provided a cloudier 2019 outlook due to tariff costs and uncertainty over Britain’s exit from the European Union, sending shares down more than 3.5 %. The No. 2 U.S. automaker, which is restructuring its operations globally, disappointed analysts by not providing a detailed financial forecast for this year, simply saying earnings and revenue could improve. It said, however, that tariffs could erode 2019 earnings by about $700 million. “Investor patience is likely to be further tested today as Ford has basically once again said ‘your guess’ to the financial community with respect to specific financial guidance” for 2019, Evercore ISI analysts said in a research note. This is in contrast to Ford’s larger U.S. rival, General Motors, which last week forecast higher 2019 profit that far surpassed analyst estimates. A volatile U.S. trade policy environment and uncertainty around Brexit could impact its performance in 2019, said Ford Chief Financial Officer Bob Shanks. Ford is the top selling automotive brand in Britain, and a no-deal British exit from the European Union, while unlikely, would be “catastrophic”, he said. “Until we see how some of these things begin to play out, we want to be a little prudent in terms of how specific we are”, Shanks said. “But do we think we should improve the business this year? Absolutely”. Ford also expects tariffs imposed by the United States and China, and the impact of higher costs for steel and aluminum, to hurt profits by about $700 million this year, Shanks said. Tariffs and high commodity costs also hurt its 2018 earnings. Nevertheless, Shanks said Ford sees the potential for higher operating earnings, revenue and adjusted operating cash flow in 2019. Among positive factors will be new product rollouts like the Ranger pickup and Explorer SUV, its restructuring initiatives, a recovery in China, and the redesign of its money-losing European operations. Ford does not expect a U.S. recession this year. The company is moving away from sedans and investing more heavily in higher-profit pickups, commercial vans and SUVs. Ford will invest 90 % of its capital in trucks and SUVs from 2019 to 2023. The absence of details provided on its expected profit could point to Ford having less visibility on the market and the challenges it faces, RBC Capital Markets analyst Joseph Spak said. “The lack of a formal range is likely to lead to more dispersion of estimates and expectations, making it more challenging to ‘hit’ investor expectations”, he said in a research note. “That could add difficulty to Ford’s effort to build market confidence in their turnaround plan”. Ford, which is cutting jobs globally, remains committed to its money-losing operations in Europe and South America, president of global markets, Jim Farley, said. Losses in China, where Ford has struggled, will narrow this year, he added. Last week, Ford said it would cut thousands of jobs and look at plant closures in Europe, as part of its plan to return to a 6 % operating margin in the region. In South America, Farley said Ford will improve its manufacturing operations through the Volkswagen alliance, but did not provide details. +++ 

+++ Nissan and Mitsubishi say former chairman Carlos GHOSN received €7.5 million in ‘improper’ payments without consulting the board, in a joint statement issued by both brands. Ghosn remains in custody in Japan after being indicted on charges of serious financial misconduct, aggravated breach of trust and understating his income for 3 years. New allegations come direct from 2 of his former employers, claiming he failed to consult the board when receiving payments from Nissan-Mitsubishi BV (NMBV), a Netherlands-based joint venture set up to explore greater collaboration within the group. Prosecutors laid further charges against Ghosn last week, days after he issued a public statement claiming that he has been “wrongly accused” of serious financial misconduct. The 64-year-old was arrested by prosecutors in Japan in November last year. His hearing at a court in Tokyo was his first public appearance since then. In a prepared statement to the court issued by his legal team, Ghosn said: “I am innocent of the accusations made against me. I have always acted with integrity and have never been accused of any wrongdoing in my several-decade professional career. I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations”. The court hearing was requested by Ghosn’s lawyers to explain the reasons for his prolonged detention. The judge, Yuichi Tada, said it was because he was considered a flight risk, and the possibility of concealing evidence. According to reports, Ghosn was led into the court in handcuffs and with a rope around his waist, and appeared notably thinner than previously. In his statement, Ghosn also listed his achievements during his time as head of Nissan, and added: “I have a genuine love and appreciation for Nissan. “I believe strongly that in all of my efforts on behalf of the company, I have acted honourably, legally and with the knowledge and approval of the appropriate executives inside the company – with the sole purpose of supporting and strengthening Nissan, and helping to restore its place as one of Japan’s finest and most respected companies”. While he has been removed as the chairman of Nissan and Mitsubishi, Ghosn remains the chairman and CEO of Renault. Responding to the claims of under-reporting his salary, Ghosn said: “I never received any compensation from Nissan that was not disclosed, nor did I ever enter into any binding contract with Nissan to be paid a fixed amount that was not disclosed”. Ghosn’s statement included rebuttals of several of the specific charges made against him, which include claims he moved personal investment losses totalling €15 million to Nissan. He said he did ask the company to take on the collateral temporarily due to his foreign exchange contracts, but that the company did not lose money through this move. Ghosn has also been accused of using Nissan funds to make payments to Saudi businessman Khaled Juffali, in return for a letter of credit to help with investment losses. In response, Ghosn said that Juffali was “appropriately contributed” for helping Nissan secure funding, solve an issue with a distributor in the Gulf region and negotiate the development of a plant in Saudi Arabia. Representatives of the Khaled Juffali Company also issued a statement, saying that the payments it received from Nissan were “for legitimate business pusposes”. +++ 

+++ KARMA AUTOMOTIVE , the company born out of the bankruptcy of Fisker Automotive, has partnered with Pininfarina with the intention of developing new products together. The American-based, Chinese-owned luxury car maker is collaborating with the Italian design house to “help accelerate future technology and product development”. Details of what that entails have yet to be announced, but the first results are due to be revealed in the second quarter of this year. “Karma is united in spirit with Pininfarina through our shared commitment to stunning design, and we are excited about the reaction we anticipate the end result of our partnership will generate”, said Karma CEO Lance Zhou in a statement. Pininfarina is in the process of building its own car brand, Automobili Pininfarina, whose 1.900 hp, Rimac-based Battista electric hypercar is due to be revealed in full at the Geneva motor show in March. The company is also expected to launch an electric ‘super-SUV’ using technology adapted from American EV specialist Rivian. Karma currently produces only the Revero, a re-engineered version of the Fisker Karma plug-in hybrid saloon, which went out of production in 2012 after Fisker’s battery supplier collapsed. The announcement of the partnership is the first indication since that car was launched in 2016 that Karma is looking to develop a new product. +++ 

+++ The London Electric Vehicle Company ( LEVC ), which makes the city’s popular black taxis, named former Audi executive Jörg Hofmann as its new chief executive, succeeding Chris Gubbey who will step down next month. Hofmann, 51, who previously worked with General Motors and Audi for 17 years, will take over the role on Feb. 4. LEVC, formerly known as the London Taxi Company, was bought out of bankruptcy by Chinese automaker Geely Automobile Holdings in 2013. +++ 

+++ Global automobile and auto parts makers which want to capitalize on electric and autonomous vehicles need to cut back investments and forge more PARTNERSHIPS instead, the chief executive of global parts supplier Magna International said. Over the next decade, vehicle and parts suppliers plan to spend $300 billion to bring electric cars to the mass market, Magna CEO Don Walker said, a huge jump from last year’s industry estimate of $90 billion for the period. “We have to reduce the amount of money everybody’s pouring in, because the end consumer basically wants cheap transportation”, he said in a speech. “Ultimately, we need to be more efficient with the capital we deploy in the industry”. The comments came as Volkswagen and Ford said they would join forces on commercial vans and pickups and were exploring joint development of electric and self-driving technology, actions meant to save the automakers billions of dollars. Big oil, telecommunications and technology companies are also making large bets on electric vehicles, investing in areas such as battery startups and charging stations. However, payback will not come quickly, Walker said. The path to electric and autonomous vehicle adoption is being shaped by hard-to-predict factors, such as evolving battery chemistry, vehicle cost and performance, infrastructure and government regulation, he said. Aurora, Ontario-based Magna, the world’s third-biggest parts supplier, estimates that by 2025, all-electric vehicles will make up just 4 to 6 % of market share, Walker said. Vehicles with internal combustion engines will represent 30 to 37 %, while plug-in hybrid electric vehicles are seen at 6 to 9 %. In 2030, the autonomous vehicle market is estimated at $80 billion to $95 billion in annual sales, Walker said, with just 7 % market share seen in fully autonomous vehicles without steering wheels or pedals. Some 70 % are expected to have either no or partial automation and 23 % with extensive automation. “This is a very expensive endeavor with lots of people working on it”, Walker said of autonomous vehicles. “I think we need to have more cooperation”. Magna partnered with Lyft last March to supply the ride-hailing service with high-tech kits to turn vehicles into self-driving cars. Last summer, it set up 2 joint ventures with Beijing Electric Vehicle, China’s largest electric car maker, to engineer and build EVs in China. +++ 

+++ In 2018, Groupe RENAULT recorded 3,884,295 vehicles sold, including 2,532,567 (-5.2 %) for Renault and 700,798 (+7.0 %) for Dacia. Lada’s sales increased by 18.7 % to 398,282 registrations and Renault Samsung Motors’ registrations fell by 14.9 % to 84,954 vehicles. Jinbei and Huasong sold 165,603 vehicles. In the electric vehicle segment, Renault brand sales volumes worldwide increased by 36.6 % over the year (more than 49,600 vehicles), with an acceleration in the second half (+62.1 %). Renault is the European leader with a 22.2 % market share. The Zoé saw its volumes increase by 26.1 % (39,458 vehicles) and Kangoo Z.E. by 105.1 % (8,747 vehicles). In the light commercial vehicle segment, the Group’s volumes increased by 33.7 % with Jinbei and Huasong. The Renault brand reached a new record high in 2018 despite the decline in Turkey and Argentina, two important markets for this segment. “Groupe Renault sales increased by 3.2 % in 2018, with the integration of the Jinbei and Huasong brands. The Group’s sales growth in Russia, Brazil and Africa offset almost all of the economic and geopolitical headwinds outside Europe”, said Olivier Murguet, Sales and Regions Executive Vice President of Groupe Renault. In Europe, registrations were stable (+0.5 %) in a market that grew by 0.2 %. The Group’s growth comes mainly from the B segment (Clio, Captur, Sandero) and the new Duster. Clio remains the second best-selling vehicle in Europe and Captur the first crossover in its class. The Dacia brand posted a new sales record in Europe with 511,622 vehicles registered (+10.3 %) and a record market share of 2.9 % (+0.3 %). This increase is linked to the performance of the new Duster launched at the beginning of the year and the Sandero. Groupe Renault is pursuing its Drive the Future plan by expanding internationally, with registrations now representing 50.6 % of total sales (vs. 49.2 % in 2017), thanks in particular to the integration of the Jinbei and Huasong brands, and despite the decline in sales in Turkey and India and the cessation of sales in Iran since early September. In Russia, the Renault Group’s second largest country in terms of sales volume, the market grew by 12,8 %. The Renault Groupe is the leader, with more than 1 car in 4 sold being a Lada or a Renault. Sales increased by 10.9 %. Renault brand volumes were stable with 137,062 vehicles sold, pending the arrival of Arkana in 2019. Lada recorded a 15.6 % increase to 360,204 vehicles sold, with a 20 % market share (+0.5 %) thanks to the successful renewal of its range. The Lada Vesta has become the best-selling vehicle in Russia. In Brazil, the Groupe outperformed the market recovery, which rose 13.6 %. Renault sales increased by 28.5 % to nearly 215,000 vehicles and our market share reached 8.7 % (+1.0 %) thanks to the good results of Kwid, which was sold to more than 67,000 units. In Africa, the Renault Groupe strengthened its leadership with 18.1 % market share, with 218,797 vehicles sold, thanks to its performance in Morocco, South Africa and Egypt. The market share in Morocco reached 43 % with a 7 % increase in sales volume. Dacia maintains its leadership with Dokker and Logan, the 2 best-selling vehicles. Renault brand sales rose by 14.9 % to more than 26,000 units in South Africa, representing a 4.9 % market share. In Egypt, its market share reached 11.4 %, up by more than 3 % with 20,504 vehicles sold. In India, sales were down 26.8 % in a market that grew by 8.4 % pending the launch of a new vehicle scheduled for the second half of 2019. In China, the Groupe is continuing to implement the “Drive the future” plan. Dongfeng-Renault volumes are down 26.9 % pending the launch of new models in 2019. The launch of the RBJAC joint venture (Jinbei/Huasong) is progressing well. The Renault Groupe is stepping up its electric vehicles offensive by investing in JM EV, the 5th largest electric vehicle manufacturer.  In total, by integrating the new Jinbei /Huasong brands, the group’s volumes in China amounted to 216,699 units. The Groupe Renault is aiming for a slight increase in sales in 2019, with an acceleration in the second half of the year thanks to the launch of new international models and the launch of the new Clio, the flagship model in Europe. +++ 

+++ Europeans continue to buy more SMALL CARS than any other body type, but sales have been hit by the rapid rise of SUVs and are forecast to carry on sliding despite a slew of new models arriving this year. The key model for 2019 is the new Renault Clio. The current car was Europe’s best-seller through October last year, outpacing the Ford Fiesta and the Volkswagen Polo, according to data from Jato Dynamics. The 5th generation Clio, which will debut at the Geneva auto show in March, will have big changes to the interior, Renault design director Laurens van den Acker told. One example is that the new Clio will offer an even larger infotainment touchscreen on top versions. Van den Acker said he is glad he won his fight with management to equip the 4th generation Clio with its vertical touchscreen; a move that Renault made before the first-generation Apple iPad was launched, because the system has been very popular with car buyers. Another key launch this year is the replacement for the Opel/Vauxhall Corsa, which sits on a new small-car platform called CMP developed with parent PSA Group. The Corsa was the No. 6-selling model last year through October. The platform will be shared with the new Peugeot 208, which is expected to be the third big launch in 2019 in the small car sector. The 208 was last year’s No. 4-selling small car through October. These 3 new models won’t have it easy. The Volkswagen Polo, Ford Fiesta and 10th-placed Seat Ibiza have all been replaced within the last 18 months. Despite this surge of launch activity, analyst firm LMC Automotive doesn’t believe sales in the segment will grow this year. It estimates the final tally will be 2.71 million for the year, down from an estimate of 2.80 million for 2018, which was below the 2.82 million small cars sold in 2017. “The general trend is negative”, David Oakley, Europe analyst for LMC Automotive, told. The sector still accounts 20 % of all European sales, but that is down from 25 % a decade ago. The key reason for the decline: the growth of small SUVs. The market for these taller, more desirable cars has doubled since 2014 to reach 1.8 million last year, according to LMC (which used estimates for December figures). The growth of small SUVs has happened so fast it has taken some automakers by surprise. Seat for example initially planned to split production on Line 1 at its Martorell factory near Barcelona, Spain, at 65 % for its new Ibiza and 35 % for the Arona, Seat president Luca de Meo told. “Then just before starting production, we decided to invest more to go 50/50. Now we can manage 60 % Arona and 40 % Ibiza”, he said. Small-car sales will receive a slight boost in 2021-22 when new versions of the Toyota Yaris (currently the No. 5 seller, and growing strongly), Dacia Sandero (No. 7) and Hyundai i20 arrive, according to LMC, but after that sales will continue their downward slide. Fiat’s decision last year to drop the Punto has also reduced the segment’s overall volume. Selling electrified small cars is difficult because of the smaller margins involved, but manufacturers are increasingly willing to try. Much of the reason the Toyota Yaris is so popular is because of the availability of a full-hybrid model, which now accounts for half its sales in Europe, the company said. Meanwhile, diesels have shrunk to just 14 % of sales in the segment based on January-October figures. Skoda became the latest to remove a diesel option when it facelifted the Fabia last year. Later this year, Renault will reveal a new version of the Zoé, currently the only full-electric car in the segment. LMC estimates sales could reach 50,000 to 60,000 units between 2020-23, about double today’s figures. Also joining it will be an electric version of the new Opel/Vauxhall Corsa in 2020 and around the same time an electric Peugeot 208, sitting on the same e-CMP platform that PSA developed with its Chinese partner, Dongfeng Motor. Another contender in the segment will be the Honda Urban EV, which will be revealed at the Geneva show. It’s fitting perhaps that France should be leading the charge for subcompact EVs because the country is by far the biggest European market for small cars, with sales of just over half million through October, beating Germany and the UK. In terms of market penetration for the sector, Greece is the leader with a 39 % share, followed by Romania at 33 %. France was 4th at 29 %, while Germany was 20th with just 15 %. Body style diversity in the sector has massively shrunk in recent years. Convertibles have disappeared and largely so have the 3-door versions of the hatchback, which accounted for just 7 % of overall sales in the segment through October 2018, down from 10 % in the same period the year before. Among the new-generation models joining the sector, only Ford decided to continue offering a 3-door variant. Renault, Opel/Vauxhall and Peugeot are expected to drop 3-door versions this year. Wagon variants still play a minor role, accounting for 5 % of sales last year, according to Jato figures. Within the top10, only the 4th generation Clio and Fabia offer wagon alternatives. The new Clio will discontinue the body style. +++ 

+++ Elon Musk is cutting TESLA ’s workforce by 7 % (or more than 3,000 jobs) warning that the “road ahead is very difficult” in making electric cars more affordable for the mass market. Tesla shares fell as much as 7.7 % shortly after the start of regular trading. Musk wrote in a blog post that the Palo Alto, California-based company managed to eke out a profit in the final 3 months of 2018, though narrower than the hard-won third-quarter earnings it reported in October. Tesla is under pressure to limit spending as it emerges from what Musk called the “most challenging” year in its history. While it succeeded in scaling up output of its Model 3, the company missed analysts’ production targets during the fourth quarter, and it’s cut prices to partially make up for the halving of a U.S. tax credit that’s acted as a buyers’ incentive. The credit is set to drop again in July before going away entirely at the end of the year. Tesla increased staff by 30 % last year, which is “more than we can support”, Musk said. It’s absorbed some of the cost challenges by initially selling only higher-priced versions of the Model 3, its first vehicle billed as a car for the masses. Until now, the cheapest configuration available of the vehicle has cost $44,000, Musk said. As production increases over the next few months, the company will need to sell lower-cost versions, he said. “Starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles”, Musk said. “Moreover, we need to continue making progress towards lower priced variants of Model 3”. The chief executive officer has tweeted before about the risks involved with selling cheaper versions of the Model 3 too soon. He warned in May that Tesla would “lose money & die” if it shipped a $35,000 version of the sedan right away. Tesla had about 45,000 employees, Musk tweeted in October. Based on that figure, the 7 % cut works out to be about 3,150 jobs lost. The company is also expanding in Europe and China, which will be costly, said Sven Diermeier, a Frankfurt-based analyst at Independent Research. “With rising Model 3 sales, margins are deteriorating with a weaker model mix”, Diermeier said. “Compensating for this will be difficult, so job cuts are logical”. The company will also see a significant increase in competition for electric cars as established automakers have started to roll out an array of products that will be measured against its pioneering lineup. Mercedes-Benz unveiled its EQ C electric crossover last year. Audi followed with the e-Tron and its parent, Volkswagen, plans to introduce more than 50 purely battery-powered vehicles through 2025 across the group. Tesla’s overarching challenge is making cars, batteries and solar products cost-competitive with fossil fuels, Musk said. “While we have made great progress, our products are still too expensive for most people”, Musk said. “Sorry for all these numbers, but I want to make sure that you know all the facts and figures and understand that the road ahead is very difficult”. Incumbent carmakers are also struggling with the high cost of making electric cars. On top of record investment in new electric-car lineups, high battery costs are crimping margins and buyers worried about charging and driving range largely remain on the fence. Tesla’s layoffs mark the second shedding of workers in a matter of months. In June, Tesla dismissed 9 % of its workforce after misjudging how quickly it could ramp up mass-manufacture of the Model 3; only to go on an aggressive hiring spree shortly after. The company must now make rapid gains in its manufacturing processes as it increases the production rate of the Model 3, Musk said. “Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (350 kilometres), standard interior Model 3 at $35.000 and still be a viable company”, he said. “There isn’t any other way”. +++ 

+++ VOLKSWAGEN ’s chief executive Herbert Diess said an $800 million investment to build a new electric car in Chattanooga, Tennessee should help ease tensions with United States President Donald Trump. “We hope that with the investment in Chattanooga we could make a contribution, step forward, to avoid tariffs between Europe and the U.S., and we will work further on it”, Diess said at the sidelines of the Detroit Auto Show. Diess also said the multi-brand carmaker was considering building a U.S. factory for its premium brand Audi. The German automaker said it is adding 1,000 new jobs and that electric vehicle production in Tennessee will begin in 2022. “We have been strongly encouraged to invest more which we will do” Diess said. +++ 

+++ Sales of the VOLVO XC40 will grow to 150,000 units this year, double the number sold in 2018, according to Volvo’s European boss, Lex Kerssemakers. The massive growth will come from the XC40’s first full year of sales plus, crucially, more production capacity for the compact SUV at Volvo’s plant in Ghent, Belgium. The XC40 is fundamental to Volvo’s aspiration to build its sales to 800,000 units per year. In 2018, it sold 642,253 cars, breaking the 600,000 mark for the first in its history. “Breaking through 600,000 units has been an ultimate dream for 15 years”, said Kerssemakers. “We want to be at 800,000, but I’m not going to say when”. The XC60 was Volvo’s biggest-selling car last year, with 189,459 examples sold, while the XC90 was second on 94,182. However, the V40 hatchback will be discontinued this year and won’t be replaced for 2 to 3 years. It’s unlikely that Volvo will meet its 800,000 sales target until that replacement, which is set to be a higher-riding, sportier model, arrives. +++

Reageren is niet mogelijk.