Newsflash

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+++ Sorry, I got it wrong. A couple of years back I slipped into forecasting mode and predicted consumers of the world would by now be buying or leasing at least 100 MILLION new cars a year. Truth is, this hasn’t happened. The relentless growth in car sales we’ve witnessed over recent decades has, for now at least, stalled. Only around 86 million private individuals and businesses signed up for fresh-from-the-factory vehicles last year. That’s fewer than in 2017 and 2019 is expected to be another flat year. As far as car sales in the 2010s are concerned, they’ve peaked. At best, we’ll have to wait until the roaring ’20s before that psychologically important ‘100 million-per-annum barrier’ is breached. In one sense, 86 million car sales a year is impressive. But we need to remind ourselves that this figure is surprisingly low in view of the fact there are now hundreds of millions, possibly billions, of in-work or comfortably retired consumers across the globe with incomes large enough to place them in new-car territory. In China, India and Brazil, for example, salt-of-the-earth working-class folk have wealth like never before. But they’re just not signing up for new cars in the numbers I, for one, expected them to. Maybe they’re holding back due to financial uncertainties on a national, international or, more likely, personal level. Or perhaps a lack of consumer confidence and/or long-term job security fears prevents them from acquiring the keys to new cars. Perhaps they are simply opting for used vehicles instead, deeming factory-fresh models too expensive. Another factor is the politicians at home and abroad, with their war on diesel and the fines or bans they slap on motorists who dare to drive personal vehicles in city centres. It’s also becoming increasingly difficult and expensive to qualify as a driver with a full licence then buy proper, eye-wateringly expensive insurance cover. Some might ask why they should bother learning to drive at all when autonomous cars will soon do all the driving for them, before adding that while they’re waiting for the driverless revolution to arrive, they can always use existing car sharing, ride-hailing and other services. Being transported door-to-door in cars by ‘professional’ drivers charging reasonable fares has never been more convenient. And the process will, in theory, get cheaper and easier when autonomous tech takes over and driver wages are removed from the equation. In crude terms, today’s ‘norm’ is that one private car is purchased and driven by one private car owner each day. But the ‘new norm’ will be one public car, without a driver, carrying, say, 100 folks over the same period. That, in turn, will translate into a single sale for the global motor industry, not the 100 sales it would have previously enjoyed. No wonder manufacturers are currently struggling to sell 100 million cars a year, never mind the hundreds of millions they could (and perhaps should) be selling in a world that comprises nearly 8 billion people. +++ 

+++ A lack of choice has been one reason that buyers in Europe have not fully embraced full-electric and electrified plug-in hybrid cars. But that is quickly CHANGING as automakers prepare to launch more models to prepare for tougher CO2 emissions regulations that start to take effect in 2020. The number of EVs on sale in Europe will increase to 24 this year from 18 last year as new vehicles such as the Audi e-Tron, Tesla Model 3, Mercedes-Benz EQ C, Mini Hatch S E and full-electric Volvo XC40 hit the market, according to LMC Automotive data, which excludes very-low-volume niche models. The number of plug-in hybrids will nearly double to 53 this year from 27 in 2018, LMC says. But the real jump will come in 2020, when the number of full-electric cars on sale doubles to 48 and plug-in-hybrid choice reaches almost 100. Next year battery-powered cars underpinned by Volkswagen Group’s flexible MEB electric-car platform and aimed at the mass-market will go on sale. VW brand’s Golf-sized ID.3 hatchback will come first but it will soon be followed by MEB cars from the Audi, Skoda and Seat brands. They will have ranges of more than 550 km to ease range anxiety fears among car buyers. It’s no coincidence that 2020 is also when the EU will start fining automakers if they miss their stricter CO2 reduction targets that are being implemented to help reduce greenhouse gas emissions blamed for contributing to climate change. “We have only one target, which is to be compliant for CO2 targets for 2020, so 2019 will be the launch of all our electric and plug-in hybrid vehicles”, Maxime Picat, PSA Group’s operations director for Europe, told journalists in January. PSA will launch plug-in versions of the Peugeot 508, 3008 and Opel Grandland X first, while the smaller full-electric cars (the Peugeot 208, Opel/Vauxhall Corsa and DS 3 Crossback) will go on sale in 2020. PSA’s tactic is expected to be repeated by other car companies. “We remain convinced automakers will do their best to avoid paying CO2 fines and steer sales toward what they need to sell to comply, at the expense of margin”, said Philippe Houchois, an equity analyst at the Jefferies Group investment bank. Plug-in hybrids and full-electric cars don’t just cut average emissions. Because of the EU’s supercredit system, the sale of any car emitting less than 50 gram per kilometer of CO2 will count as 2 vehicles in 2020, 1.67 vehicles in 2021, 1.33 in 2022 and one by 2023. Then it gets tougher still. By 2025, automakers will have to lower CO2 levels by 15 % from 2021 figures and by 37.5 % by 2030. Again, selling more plug-in hybrid cars helps the manufacturer soften its targets, set at a minimum 15 % of sales from electrified cars and vans by 2025, rising to 35 % of car sales and 30 % of Van sales by 2030. Selling more electric cars in markets that currently have a low penetration of plug-in vehicles, such as eastern Europe, also boosts the credits. This will have the intended effect and spur sales, LMC predicts. In 2018, Europeans bought just under 190,000 electric cars and nearly 155,000 plug-in hybrids, LMC figures show. But this year those numbers are expected to jump to 300,000 electric cars and 250,000 plug-in hybrids, while the following year the combined total will be more than 1 million in Europe, with plug-in hybrids taking the lead again with a 55-45 split over EVs. When sales of full-electric cars overtook plug-in hybrids in 2018, product planners could have been forgiven for having a crisis of confidence in a technology that is both expensive and complex. Last year, incentives were dropped in the UK, the biggest market for plug-in hybrid electric vehicles. In addition, many of the popular models were pulled across Europe after new emissions regulations known as the Worldwide harmonized Light vehicle Test Procedure (WLTP) increased their emissions figure when the new standard went into effect last September. WLTP had the effect of pushing these vehicles over the 50 g/km figure, meaning they failed to clear the threshold for many incentives. It’s a temporary setback, said Roland Irle, a co-founder and an analyst at Sweden-based EV-Volumes: “They will come back again”. Any plug-in hybrid that emits less than 50 g/km not only attracts incentives, reducing customer tax burdens, but also qualifies the manufacturer for those supercredits under the 2020-21 EU-wide CO2 agreement. The lengthy halt on sales of popular plug-in hybrids such as the Volkswagen Passat and Golf allows them to return this year with new advances in battery packs, providing longer ranges. “With advances of energy densities, in some cases they don’t even need to change the packaging for the battery”, Irle said. One of the first to react was Mitsubishi, which installed a bigger battery in the Outlander PHEV (Europe’s best-selling plug-in hybrid in 2018) to make sure it still would qualify for incentives after WLTP took effect. Those who argue that plug-in hybrids add cost without benefit are missing the point, new Mitsubishi Europe CEO Bernard Loire told: “CO2 at 46 g/km provides a strong reassurance that you can drive a family SUV anywhere in Europe: the mountains, on the highway and in city centers”, said Loire, referring to areas within cities where access is restricted to those with ultralow-emissions vehicles. The latest city to clamp down on cars to help reduce air pollution is Madrid, which last November created a 472-hectare area within which only full-electric vehicles or PHEVs with an electric range of 40 km or more can drive freely. The freedom of plug-in hybrids versus full-electric cars is also touted by PSA. Operating under the assumption thatplug-in hybrids are better for long journeys without the need for charging, PSA will keep the technology for larger cars, while small cars such as the Peugeot 208 and Opel Corsa will be sold with electric versions. “As a transition technology, it’s very powerful”, PSA’s Picat said. “Some people dream that the entire market will be electric in 10 years, but we all know that’s not going to happen”. But he does agree the plug-in hybrid market depends on incentives. “Politics has the power to decide”, Picat said. “If suddenly plug-in hybrids are not considered a low-emissions vehicle technology, which might happen in China, then it changes again”. Already the plug-in hybrid market is divided down size lines. The best-selling body style for plug-in hybrids last year was the SUV with 47 % of the market, according to data from JATO Dynamics. Helping that were the top-selling Mitsubishi Outlander and the No. 2, the Volvo XC60. Meanwhile, the best-selling EV body style was the hatchback at a massive 79 %, led by the Nissan Leaf and followed closely by the Renault Zoe. Last year, SUVs accounted for only 12 % of EV sales. But that should increase this year as models such as the newly launched Audi e-Tron and Jaguar I-Pace gain ground and the Mercedes EQ C joins in. Volvo says plug-in hybrids account for about 15 % to 20 % of sales for those vehicles in its range that offer the technology. The automaker considers the technology an in-between solution ahead of full-electric cars. “We haven’t made up our mind to drop plug-in hybrids, but in theory we should”, said Lex Kerssemakers, head of Volvo in Europe. “We have to see how fast development of the EV market is”, he said. “Is there the charging infrastructure? Does every government give support?” Volvo will launch a full-electric version of the XC40 this year. It could sell more plug-in hybrids but says it is constrained by battery supply, a problem many EV makers are experiencing. As with many other automakers, Volvo uses batteries from South Korea’s LG Chem. “All brands are trying to get the capacity secure”, Kerssemakers said, adding that he expects to see a reduction in delivery times this year. One problem is that much of Korea’s lithium/ion production is being diverted to local battery storage, but LG is about to open a new battery-cell plant in Poland, which should free up more supply. The big leap in demand for full-electric cars will come in 2021, predicts LMC, when sales will nearly double from the year before to 890,000, moving ahead of PHEVs at 700,000. That will be the first full year for the VW ID.3 hatchback, as well as the VW ID.Crozz, Audi’s equivalent crossover on the same platform (Q4 e-Tron) and one MEB car each from Skoda and Seat. VW’s €80 billion bet on EVs is likely to pay off, Arndt Ellinghorst, an analyst with Evercore ISI, wrote in a note to investors. “We see VW selling about 35 % of global EVs by the mid-2020s”, Ellinghorst said. Two-thirds of those will be sold in Europe and China, he said. VW thinks the economies of scale it will achieve with MEB will allow it to eventually achieve a profit margin equivalent to its diesel cars. “We believe this needs to be proved first”, Ellinghorst said. “VW had high ambitions for its MQB platform in the past which haven’t materialized”. Battery costs remain a problem for full-electric cars. For a 300 km range, a 60 kWh battery pack costs about 12,300 euros, with an additional 1,760 euros for the electric motor and inverter, estimates Max Warburton, an analyst with Bernstein. That compares with 4,400 euros for a gasoline powertrain. The sheer cost and size of the battery needed are deterring even ultraluxury brands. Bentley has said it won’t produce an electric car for the next 4 years at least, to allow battery power density levels to increase. “The problem is when you get to our segment with the size of our vehicles and the frontal area we push through, current battery power density limits the size of the car you can offer with credible driving range”, Bentley CEO Adrian Hallmark told. The brand has instead joined Porsche in offering plug-in hybrid versions, starting with the Bentayga. High-end luxury cars are a better place to absorb the €2,640 to €4,400 cost of the battery pack, Bernstein’s Warburton said. “Plug-in hybrids should still be profitable on larger cars, but in the smaller segments, a several-thousand-euro increase can make the difference between a profit and loss”, he said. “We think it is unlikely that automakers will be able to sell plug-in hybrids at a higher price than internal combustion engine cars, on the basis that plug-in hybrids provide no real extra benefit to the consumer”. Therefore, battery costs will be absorbed by automakers. If the automakers can make the sums work, there is a growing enthusiasm for electrified cars, especially EVs. “There is a much higher awareness, interest is increasing, and definitely there is S-curve behavior happening in EV adoption”, said Irle of EV-Volumes, referring to steep growth after an initially slow start. “We see 40 % growth rates as normal”. +++ 

+++ JAGUAR ’s upcoming J-Pace flagship SUV will be one of the first electrified models built on an all-new Jaguar Land Rover (JLR) platform, and a fully electric version is also likely to be made, according to sources. The J-Pace is thought to be just over 2 years from launch and will arrive at around the same time as the 5th generation Range Rover, which will also be built on the firm’s MLA platform. The J-Pace is 1 of 3 new ‘mid-height’ JLR models that will be based around electrified powertrains. The MLA platform, which will underpin all JLR vehicles by 2025, will be all-aluminium and is expected to be noticeably lighter than the current D7 and D8 architectures. One of the technical highlights for the J-Pace, which will sit above the E-Pace and F-Pace in Jaguar’s SUV line-up, will be its electric motor-driven rear wheels. As with all of the MLA-based plug-in hybrids, conventional mechanical all-wheel drive is being dropped. Using an electric motor on the back axle provides a number of advantages. Dropping the mechanical connection to the back wheels, including the propshaft and power take-off unit, allows more room for the battery pack and improves space inside the cabin, eliminating the traditional centre tunnel. The electric axle should also make for a significant improvement in handling and during off-road work. The speed and precise, controllable nature of the electric motor’s power delivery should improve on-road handling, especially on corners and poor surfaces, as well as providing very fine control of the torque being fed to the rear wheels when driving off-road. Little has so far emerged about the features offered by the MLA architecture, but it is thought that will change towards the end of this year as new products get closer to launch. The J-Pace is set to come as a plug-in hybrid as standard, with a turbocharged version of the recently announced Ingenium straight-6 engine expected to be the mainstream powertrain. Whether JLR engineers think the new MLA platform will allow a refined installation of the Ingenium 4-cylinder engine remains unclear, but a high-powered 4-cylinder motor may be offered on the J-Pace for a version biased towards outstanding economy. There’s no official news on the electric-only range of the J-Pace plug-in hybrid, but 80 kilometres in favourable conditions will be the minimum target. As JLR outlined last year in an investor presentation, it believes new car buyers remain sceptical about pure-battery vehicles, so providing a battery that allows emission-free driving for shorter city journeys could be the best compromise. JLR predicts that just 20 % of new car sales will be of pure EVs by 2025, which is why the ability of the MLA platform to be used with conventional petrol/diesel, plug-in and pure EV powertrains is essential to safeguarding the company’s future. However, predicting the degree by which the market will swing towards electrification is currently eluding nearly everyone in the auto industry. Jaguar tends not to preview new models with concept cars and has given little away about the J-Pace’s styling. It is, however, likely to build on the distinctive look of the electric I-Pace, which has provided a much-need fresh direction for the Jaguar aesthetic. Like the recently facelifted XE, the J-Pace’s interior will feature OLED screens intended to raise the perceived quality of the cabin in order to rival those of flagship German crossovers. The J-Pace is expected to be around 4.9 metres long, and its flat floor should help it to deliver impressive interior space with a healthy boot volume of at least 650 litres. However, the J-Pace’s expected lower roofline means that it won’t be as airy its Range Rover sister.  As Audi engineers have previously explained with the design of the e-Tron, a great deal of attention needs to be paid to minimising an EV’s frontal area and reducing overall drag in order to maximise its battery range. Like all car makers, JLR will have to significantly reduce its fleet-average fuel consumption and emissions figures over the next decade, as a result of increasingly tough EU targets between now and 2030. According to an investor’s presentation last year, the new mid-height model line-up will consist of 2 Jaguars and 1 Range Rover. It’s thought that the Range Rover model will be the new ‘Road Rover’ and that the other is likely to be a Jaguar road car, most probably a pure EV replacement for the ageing XJ limousine. Last year’s presentation also suggested that 4 SUVs (Range Rover, Range Rover Sport, new Defender and Discovery Mk6) will be built using the ‘high-rise’ version of the platform. There will be 7 models based on the ‘low-rise’ MLA, potentially including the next F-Pace and Velar, as well as the Discovery Sport and Evoque and (possibly) 2 Jaguar saloons. +++ 

+++ If LAMBORGHINI sales figures are any indication, there will be a lot more crossovers from exotic car brands soon. The supercar company’s sales increased by 51 % last year, and it’s all thanks to the Urus. Lamborghini sales “soared” to 5,750 units last year as a result of the V8 powered luxury crossover. The Urus comprised nearly 31 % of those sales, a total of 1,761 units. What’s more, about 9 % of all Lamborghini sales were Urus models sold in the US; Americans slurped up 500 of them in 2018. If that doesn’t strike you, then perhaps this statistic will: Lamborghini exec Federico Foschini says that the Urus has so many orders, it’s already taken up the next 10 to 12 months of production. He forecasts 7,000 to 8,000 in sales for 2019. By contrast, the company’s 2017 sales numbered 3,815. Foschini seems to imply that the backlog is artificial. “We don’t want to flood the market, because we are still in a luxury segment and we need to keep control of the offer compared to the demand”, he told. With growth like that, it’s no wonder that even companies like Ferrari and Lotus are considering crossovers. +++ 

+++ If MCLAREN Automotive’s Track 25 business plan goes as expected, by 2024 the company will have launched 18 new models or derivatives since 2018. But another number is tied to the $2.1 billion investment plan: 6,000. That’s how many vehicles the exotic automaker forecasts it will sell annually starting in 2024, and is also the capacity of its assembly plant in Woking, England. That sales volume would be a 25 % leap over McLaren’s record 4,806 global deliveries in 2018. The forecast hinges on a stream of new product. The earliest fruits of the Track 25 plan have been convertibles: the 720S Spider and 600LT Spider. But McLaren unveiled plans this month at the Geneva auto show to bring a new grand tourer to market in the coming months. Also ahead is a 3-seat hypercar with a 1,050 hp gasoline-electric hybrid powertrain and a price tag of around $2.3 million. Deliveries are to begin in January. “The lifeblood of the market is product”, Jolyon Nash, McLaren executive director of global sales and marketing, told on the sidelines of the show. “I think the reason we’ve gotten where we are today is because we focused all of our investment on new product”. With 4 vehicles from Track 25 identified and 14 to go, McLaren’s portfolio is primed to remain fresh. Gone are the days of having a vehicle on the market for 8 to 10 years, Nash said. “You’d be caught with your pants down if you did that. Because for customers buying in this segment, it’s a completely emotional purchase. It’s not a need. It’s a want”. Once the products have been launched, McLaren will be selling about 6,000 vehicles a year worldwide, according to the business plan. And that will be the limit of its capacity, Nash said. McLaren hand-builds each vehicle at its partially underground factory that looks than a manufacturing plant. McLaren is unlikely to increase capacity for the life of Track 25, Nash said. “Our current plan says no”, he said of the potential for increased capacity. And that means that sales will hold firm at that level; a reality that the privately owned automaker accepts. “We’re an independent business”, he said. “We don’t have some big parent company. We don’t answer to the stock exchange, so we don’t have investor analysts chasing us once a quarter asking, ‘Where’s the growth? Where’s the growth?’ . We’re able to have a product plan that supports the brand and is true to its DNA. We’re very comfortable with a business plan that generates healthy returns for our shareholders at 5,000 to 6,000 cars”. Customers will be fine with it, too, he said. “For a luxury brand, where exclusivity is extremely important, that’s kind of what our customers want”, he said. “We’ve been through 2 big growth spurts. It’s all driven by having the right product. We don’t want to be doing much more than that”. Not included in McLaren’s new-product assault is an SUV or crossover. “Our view is that we need to be true to the brand and not become all things to everybody”, Nash said. “For us, an SUV is not what we’re about. It’s the antithesis of lightweight, high-performance. Yes, you can make an SUV that handles extremely well, but it’s still a bit of a compromise”. McLaren won’t see global sales volume surge another 44 % in 2019 as it did in 2018, Nash said. But growth is expected this year from the United States, its biggest market. “We had a very good year there last year”, he said of the U.S. “I think we’ll have a better year this year”. +++ 

+++ The head of PORSCHE has admitted it is considering putting clauses into buyers’ contracts of its limited-edition GT range of sports cars to stop speculators snapping them up only to sell on for a quick profit. The news comes as values of GT3 and GT2 911s in particular have spiralled out of control, with the most desirable editions easily doubling in price on the secondhand market as Porsche struggles to meet market demand. The same is true to a lesser extent of the GT4 Cayman models, too, while values of specials such as the 911 R have sought investors rather than enthusiasts. Chairman and CEO Oliver Blume said Porsche was mulling over a compulsory leasing arrangement, where prospective owners could not own the car outright for the first year to prevent unscrupulous profiteers looking to make a quick buck. “There’s a big demand in the market for our special GT range cars, such as the GT3”, he admitted at the world debut of the Porsche Cayenne Coupe last week. “Normally our interest is to sell a car for drivers; not for dealers making an investment. We put so much love into these cars, we want people to drive the cars, not put them in a garage and wait to sell them for a bigger price. That’s not our aim. You can think about leasing models where you have to stay with a car for a year, for example, to avoid this dealing in the cars”. +++

+++ Look down the best-sellers lists by European country for 2018 and after the Volkswagen Golf, one model stands out: the SKODA Octavia. This car was the most popular model in 4 European countries: its home market of the Czech Republic, Estonia, Poland, and (most surprisingly) Switzerland. Only the Golf topped the charts in more European countries at 5, while the Renault Clio was the leader in 3. The Octavia was the No. 11-selling model in Europe last year at 212,687. Because of the breadth of its popularity across Europe, however, the Octavia could lay claim to the title of Europe’s true people’s car. The Octavia was the No. 2 seller in Finland, Hungary and Slovakia and finished in the top10 in 8 other countries, including 6th in Germany, Europe’s biggest market. The Golf was No. 2 in Norway, Sweden, Switzerland and the UK and finished in the top10 in 10 other countries. Unlike the Golf and other strong sellers such as the Clio and Ford Fiesta, which get the bulk of their sales from Germany, France and the UK, respectively, no single country dominates Octavia sales in quite the same way. The Octavia’s Swiss success is surprising in a country that generally prefers premium brands. Mercedes and BMW were the No2 and No3 selling brands respectively after topseller VW brand last year in the market. The Octavia, however, beat models such as the Golf and Mercedes GLC to finish No. 1 in the ranking of topselling cars. The victory was due to its popularity with company fleets. Fleet buyers look for the best value in terms of quality and price. The majority of Octavia customers buy the 4×4 Combi version. Half of all cars sold in Switzerland in 2018 were allwheel drive. Skoda describes the Octavia as “the most versatile model” in its lineup and adds that the car’s wide variety of variants is key to its strong appeal. Along with all-wheel drive, Skoda offers models powered by diesel, gasoline and compressed natural gas; multiple body styles; a performance RS version and the off-road oriented Scout Combi variant. Price, however, is arguably the car’s biggest draw. Skoda touts the Octavia as the largest compact in its segment, with all body styles offering trunk space comparable to models in the class above for a sticker price equivalent to (or below) compact rivals. Building the Octavia in the comparatively low-cost Czech Republic definitely helps Skoda keep the sticker price down. European sales of the Octavia dipped 3.6 % last year, but demand has held up remarkably well considering the current-generation model was launched in 2012. Since then, Skoda has manufactured more than 2.5 million units of the third-generation Octavia, the majority of them built in Mlada Boleslav, Czech Republic, but the car is also made in China, India, Russia, Kazakhstan and Algeria. Last year the Octavia was Skoda’s global best-seller at 388,200, double that of the brand’s next most popular model, the Rapid. The Octavia name first appeared on a Skoda model in 1959, making this year the car’s 60th anniversary. Available as a sedan and a wagon, 360,000 were built at the firm’s Kvasiny plant until production stopped in 1971. The Octavia name was revived in 1996 for what quickly became a core model. Skoda built 1.4 million units of that Octavia, which is now considered the first generation of the range, before replacing it in 2004. Demand soared for its replacement and when the second-generation model ended in 2012, production had reached 2.5 million. Sticking with the same 8-year replacement cycle (about 2 years longer than is normal in the industry) the new, 4th generation Octavia is expected to be revealed later this year and go on sale in early 2020. Like the current model, the new car will be built on parent VW Group’s MQB platform. +++ 

+++ Daimler will decide on the future of money-losing SMART by the end of this year. The Germans are losing patience with losses at its microcar brand. Daimler’s incoming CEO, Ola Kallenius, who succeeds Dieter Zetsche in May, has no history with Smart and no scruples about killing the brand if necessary. Since its launch in 1998, Smart has racked up losses of billions of euros, financial analysts estimate. Daimler does not break out the brand’s financial performance. In the latest restructuring for the brand, Daimler is turning it into an electric urban-mobility marque selling only full-electric cars. But such a move may be too costly. To cut development costs, Daimler co-engineered Smart’s current lineup of 2 models, the ForTwo and ForFour, with the Renault Twingo but the French company is considering pulling out of the partnership. Smart’s global sales fell 4.6 % to 128,802 last year. Evercore ISI said it would welcome the discontinuation of the brand, which it estimates loses €500 million to €700 million annually. “We can’t see how a German microcar business can generate a profit, costs are simply too high”, Evercore said in a note to investors. +++ 

+++ Electra Meccanica Vehicles climbed as much as 39 % after receiving its first analyst rating, a signal that the Canadian small-cap is finally attracting attention on Wall Street as it looks to take on Tesla. Benchmark analyst Bill Sutherland assigned a “speculative buy” recommendation on the electric vehicle maker. SOLO , the company’s 1-person, 3-wheel fully enclosed battery electric vehicle “has a large potential” total addressable market, since 83 % of all cars on the highway only have one occupant, Sutherland wrote in a note. “This company is producing the car that Elon Musk wishes he were building”, Electra Meccanica chief executive officer Jerry Kroll said. “It is great to produce a $45,000, a $100,000 car or a $250,000 car. But for the masses? A $15,000 car that can get them to stop using gas. That’s creative”. Meanwhile, in a report issued by Barclay’s Sustainable & Thematic Investing team, the authors projected that micromobility, which is described as an electric vehicle weighing less than 500 kilograms, could be an “iPhone moment in urban personal and commercial transportation”, with a potential $800 billion global revenue opportunity for micromobility operators by the mid-2020s. As of Jan. 30, the Vancouver-based company had nonbinding letters of interest for 64,158 corporate orders: 22,242 for Solo cars and 40,997 for Tofinos, a 2-seat roadster that is in development. The company had also received deposits for 864 Solos and 55 Tofinos for personal use. Filling pre-orders alone for Solo and Tofinos implies an initial opportunity of approximately $2 billion, according to Sutherland, who estimates the company’s revenue will be $7.5 million for 2019, growing to $157.2 million in 2021. +++ 

+++ In SOUTH KOREA , sedans are rapidly losing popularity to SUVs, whose market is growing with diversified models. The Korea Automobile Manufacturers Association said that sedans accounted for 50.8 % of some 87,000 passenger cars sold in January and February, down 12 % on-year and the lowest level ever. Their market share peaked at 77.4 % in 2010. On the other hand, SUVs saw their market share rise by 14 % to a record 44.1 % with 38,302 cars sold. The performance was attributed to more small SUVs available including the Hyundai Kona, Kia Niro and Ssangyong Tivoli as well as the success of new large SUVs like the Hyundai Palisade and Ssangyong Rexton Sports. “Sedans have been hit hard by strong challenges from spacious SUVs, whose market is growing with diversified models to choose from”, an industry insider said. +++ 

+++ UBER Technologies will announce a $3.1 billion cash-and-shares deal to acquire its Dubai-based rival Careem Networks FZ as early as this week. The U.S. ride-hailing giant will pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem. The notes will be convertible into Uber shares at a price equal to $55 per share. Shareholders in Careem, whose backers include Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce company Rakuten, were asked to agree to the terms of the transaction. Uber’s acquisition of Careem would come ahead of its imminent initial public offering, which could become one of the biggest listings ever seen on the New York Stock Exchange. Uber is expected to publicly file for an IPO in April, kicking off a listing that could value the company at as much as $120 billion, people familiar with the plans have said previously. Careem was valued at about $1 billion in a 2016 funding round, making it one of the most valuable technology startups in the Middle East. The company has over 1 million drivers and operates in more than 90 cities in 15 countries. For Uber, a deal would signal its commitment to the Middle East, where one of its biggest investors (a Saudi Arabian sovereign wealth fund) is based. The acquisition would also be a departure in strategy for Uber, which has used such deals to offload costly overseas operations in exchange for stakes in competitors in the past. +++

+++ VOLKSWAGEN may construct a new factory in Serbia to build a handful of its vehicles, led by those from the Skoda brand. The German car manufacturer may shutter its Solomonovo production facility in Ukraine due to poor economic conditions in the country. This site builds the Audi A4 and A6, Skoda Fabia and Octavia, and the Seat Leon, Altea and Toldea. Annual production capacity at the factory sits at 45,000 units, but the site only made 4,000 vehicles in 2016. Owner of the general importer of Skoda cars to Serbia, Milenko Kostic, told that Volkswagen and Skoda management have enquired about the country with him. “Due to the situation in Ukraine, the expected results have never been achieved. The potential arrival of Volkswagen would be a fantastic news for our country and economy. They asked me about the average salary, the training of the workforce, about everything related to business conditions”, Kostic said. The Volkswagen Group has been pushing for a new multi-brand factory in Eastern Europe for quite some time and Skoda is expected to take the lead at the site. Skoda chief executive Bernhard Maier said the car manufacturer had 4 candidate countries in mind for the factory but declined to list them. If VW goes through with a plant in Serbia, it will likely need to acquire 300 to 400 hectares of land for the site. Kostic said that the only suitable locations for such a large factory would be near the city of Nis and in the northern autonomous province of Vojvodina. Serbian president Aleksander Vucic is particularly keen to secure a Volkswagen factory and will have a meeting with representatives from the automaker later this week. “Serbia is the strongest, the most stable, and the best country for Volkswagen compared with all friendly countries interested in this investment: Turkey, Romania, Bulgaria and one other country”, Vucic said. +++

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