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+++ Volkswagen Group is pushing its joint-venture partners including SK Innovation to build electric car BATTERY PLANTS which have at least one Gigawatt manufacturing capacity, CEO Herbert Diess said. “Anything below that amount would make little sense”, Diess said on the sidelines of the Shanghai auto show. Volkswagen will buy €50 billion worth of battery cells for electric cars and has identified South Korea’s SKI, LG Chem and Samsung SDI as strategic battery cell suppliers as well as China’s Contemporary Amperex Technology (CATL). The automaker is retooling 16 factories to build electric vehicles and plans to start producing 33 different electric cars under the Skoda, Audi, VW and Seat brands by mid-2023. “We are considering an investment in a battery manufacturer in order to reinforce our electrification offensive and build up the necessary knowhow”, Volkswagen said. SKI is building a battery cell manufacturing plant in the United States to supply Volkswagen’s plant in Chattanooga, Tennessee. SKI will supply lithium ion battery cells for an electric car that Volkswagen plans to start making in Chattanooga in 2022. LG Chem, Samsung and SKI on will also supply battery cells for Volkswagen in Europe. CATL is the automaker’s strategic partner for China, and will supply batteries for its electric fleet from 2019. +++ 

+++ BMW chief financial officer Nicolas Peter said the Bavarian carmaker has no plans to develop a compact vehicle together with a rival German carmaker. “We have no plans to develop a smaller car together with a German competitor”, Peter said at the Shanghai Autoshow, pouring cold water on rumors that BMW was about to deepen its alliance with Daimler. +++

+++ A year into his tenure, Volkswagen Group CEO Herbert Diess is entering critical months as he seeks to expand the automaker’s sprawling operations in CHINA while containing labor friction that’s been rising at home. The Chinese market is leading a global shift toward electric vehicles and will take on a bigger role for the German automaker as both a production hub and a research center, Diess told reporters ahead of the China auto show in Shanghai. The company plans to deliver 22 million battery-electric vehicles by 2028, with more than half of them made in China. “Our plan is to present the biggest e-car portfolio in the market, covering all relevant vehicle segments”, Diess said. VW is having “in-depth discussions” to expand its 3 local joint ventures, China chief Stephan Wollenstein said separately, part of a strategy review due to be completed by early next year. The company will work with its partners on mobility offerings and a smaller electric-car platform for China’s megacities, Diess said. The CEO’s chances of boosting VW’s equity ties in China have risen as authorities ease restrictions for foreign automakers and a market stall adds to pressure on local peers. “The Chinese auto market is in a critical transformation phase”, as growth slows, said Stefan Bratzel, a researcher at the Center of Automotive Management in Germany. “The transforming changes will come with a consolidation of the domestic industry in China”. VW has ventures with SAIC Motor and FAW, 2 of China’s largest automakers, after being one of the first foreign automakers to arrive in China more than 3 decades ago. Those 2 partners will be involved in an effort to develop new mobility offerings, Diess said. VW is also exploring options to acquire a stake in its third partner, Anhui Jianghuai Automobile Group, which is much smaller than SAIC or FAW. Diess said that its Seat unit and JAC will take the lead on designing small electric cars for urban journeys in China. “Especially for Chinese megacities, we feel the urgent need for clean mobility”, Diess said. The project will involve a smaller electric-vehicle architecture “that complements our existing platforms”. After Chinese auto sales posted their first annual decline in decades last year, VW said that demand in the market is picking up. VW brand global sales chief Jürgen Stackmann told a reduction in value-added tax is helping sales, and he expects car-sales in China to be roughly even with 2018 despite a decline in the first quarter. China accounts for 40 % of the VW group’s global deliveries and a large chunk of profit. The 2 main joint ventures generated another year of double-digit pretax profit margins in 2018 despite the market’s decline. The robust Chinese profits contrast with squeezed returns at home in Europe, where regulators embarked on a fresh round of tighter emissions limits. VW is pushing for deeper cuts in its German workforce to meet regional targets and free up more funds for future technologies. VW’s woes in Europe, highlighted by costly struggles to adopt stricter emission tests and delayed vehicle projects like the next-generation Golf, have reignited tension with powerful German labor leaders. Diess, 60, did not address the domestic wrangling, while saying the newly unveiled I.D. Roomzz full-size electric SUV “embodies the transformation of our company”. +++ 

+++ Volkswagen’s Chief Executive Herbert DIESS said he was not among the Volkswagen executives being probed for fraud and breach of fiduciary trust after German prosecutors sought to press criminal charges against his predecessor. “I am not among the accused. I do not expect to be charged”, Diess said on the sidelines of a Volkswagen event at the Shanghai Auto Show. Prosecutors in Braunschweig, Germany, said they were pressing criminal charges against former Volkswagen Chief Executive Martin Winterkorn for fraud, breach of trust and breaching competition laws for failing to prevent polluting diesel cars being put on sale. Diess is being probed in a separate investigation about market manipulation. VW and Diess declined to comment on the status of the other probe. +++ 

+++ It took one 330 kilometer trip from Chongqing to Chengdu in his Nio ES8, a 7-seater ELECTRIC car, for its owner Wang Haichun to be consumed with buyer’s remorse. Despite being billed as capable of going 335 km on a single full charge, the ES8 didn’t get anywhere near that when driving on freeways at speeds above 100 km/h, he said, adding that after 180 km, there was only 50 km of range left. “We had to recharge the car once and drove with a high level of anxiety throughout, constantly having to keep an eye on the range meter”, the 44 year old manager of a property firm said. Toward the end of the trip, he shut off the air conditioner and audio system to preserve power. “I wouldn’t want to do that kind of trip again. Ever”. So unhappy was Wang, who paid 481,000 yuan ($71,700) for the SUV, he sold it. He and his wife have since bought a Lexus NX 300h. Asked to comment on Wang’s experience, Nio said the ES8 can travel more than 200 km when constantly driven at a 100 km per hour and that battery swap stations are available for quick recharging. The statement did not address Nio’s advertising of 335 km on a single full charge. In real world conditions, all-electric cars can sometimes fall far short of advertised ranges, car engineers say. That’s particularly so when driving at length on freeways or hilly terrain and in hot or cold weather. The problem adds to drawbacks which have hindered wider acceptance: EVs have shorter driving ranges than gasoline vehicles anyway, are more expensive and take a long time to recharge. China, Europe and the U.S. state of California have set ambitious requirements for automakers to dramatically increase EV sales over the next 5-10 years, but those goals are at risk unless EVs can come close to matching gasoline engine cars in cost and ease of use. In China, the country most aggressively pursuing the adoption of EVs and home to the world’s largest auto market, some of the industry’s biggest names believe pure battery electric cars will be as cheap as gasoline counterparts by 2025. Those making that prediction include Ouyang Minggao, executive vice president of the EV100 forum, a think tank which is widely seen as the de facto voice of government policy. “The turning point is coming. We believe that around 2025, the price of pure electric vehicles will achieve a big breakthrough”, he said in a speech in January. Ouyang cited a reduction in battery costs to $100 per kilowatt hours from $150-$200 currently and a planned tightening of emissions rules in China which will make gasoline vehicles there more expensive. But others in the EV industry are less optimistic. “Chinese policymakers think EVs will become more like conventional gasoline cars as early as 2025. But that’s naive and all automaker engineers would agree with me”, said a veteran EV engineer at Honda. “Sure, there’s an EV boom but hybrids and plug-in hybrids will be needed as bridging technologies”, he said. The engineer was 1 of 5 interviewed who believe it will take a decade before battery EVs achieve cost and performance parity with gasoline cars. Most were not authorized to speak to media and declined to identified when describing the shortcomings of EV technology. But pressure to deliver parity will only grow as China rolls back subsidies while setting quotas for sales of new energy vehicles (NEVs). China wants NEVs (which also include hybrids, plug-in hybrids and hydrogen fuel cell vehicles) to account for 20 % of auto sales by 2025 compared with 5 % now. For most automakers, battery cells cost around $200/kWh, the engineers said, although costs for Tesla are believed to be around $150/kWh, partly due to its much greater scale of production. Tesla declined to comment. To cut costs, firms are working on slashing the use of cobalt, the most expensive part in lithium/ion batteries. Firms such as China’s Contemporary Amperex Technology Ltd (CATL), BYD and South Korea’s SK Innovation are developing NMC 811 technology. It uses 80 % nickel, 10 % manganese, 10 % cobalt, while a conventional lithium-ion battery uses 60 % nickel, 20 % manganese and 20 % cobalt. NMC 811 also delivers more energy density, meaning batteries will cost and weigh less. Others are developing similar technologies with slightly different ratios. Batteries jointly produced by Tesla and Panasonic Corp substitute manganese with aluminum and use less cobalt than NMC 811. Less cobalt and more nickel increases the risk that a battery cell will catch fire; a problem still being worked on. Even so, South Korean battery makers say the next generation of batteries due in 3 years or so will cost much less and offer much greater driving ranges. But the engineers caution that even if battery unit costs are brought down to $100/kWh, this would not necessarily translate into a steep decline in vehicle costs. That’s because the investment to improve battery quality needs to be factored in, while the cars also need sophisticated battery management systems to prevent overheating and overcharging, adding thousands of dollars to their cost. Toyota, which does not have a pure EV on the market currently, says it is concerned about battery durability. Battery capacity can drop by half over 5-10 years; the reason for low EV resale values, said Shigeki Terashi, executive vice president in charge of Toyota’s EV strategy. “Falling EV battery capacity is not a major issue in China now because sales there have only recently begun, but in time this problem will likely become more evident”, he told. A longer term effort to improve batteries are solid state batteries, where the liquid or gel-form electrolyte in a lithium-ion battery is replaced with a solid. That could help double a battery’s energy density. “That’s the holy grail”, says consultant Jon Bereisa, a former GM engineering director who spearheaded much of the automaker’s early lithium-ion battery development. Many in the industry believe the technology is at least a decade away from mass-market commercial use. “There are a lot of limitations to solid state drive. It will be very difficult to adopt the technology in the automotive applications used by the general public”, said YS Yoon, president of SK Innovation’s battery business. Advances in recharging are also key to making electric vehicles mainstream. A big obstacle is heat, which increases resistance and in turn reduces the current. Most EVs can get a partial charge in under half an hour, although several models due out in the next year can get close to a full charge in 20 minutes. TE Connectivity is working with automakers to cut charging time to as little as 5 minutes and Chief Technology Officer Alan Amici says that goal may be attained in 5 years. But others are sceptical. Bereisa thinks battery costs could achieve parity with gasoline cars by the late 2020s but his verdict on fast fueling parity is “maybe never”. “It’s physics”, he said, adding that to charge an EV with the same amount of energy in the same amount of time as a gasoline car, you’d need a charger powerful “enough to run a small city”. +++ 

+++ China’s China Changan Automobile Group expects sales at its joint venture with FORD to rebound at the end of this year as the U.S. automaker boosts its China product line, Changan’s president said. Zhu Huarong made the comment on the sidelines of the Shanghai Autoshow. Ford earlier this month announced that it plans to launch more than 30 new models in China over the next 3 years as it seeks to reverse slumping sales in the world’s biggest auto market. +++

+++ GENERAL MOTORS has spent 5 years re-writing its playbook for making money in Latin America and the interior of China. Now, it’s show time for the first results of a project code-named GEM, for Global Emerging Market. At events this week ahead of the Shanghai Auto Show, the No. 1 U.S. automaker plans to unveil 2 small SUVs that will be part of a new family of sedans and SUVs the automaker forecasts will make up 20 % of its global vehicle sales by 2023. This is just the opening salvo in a nearly $5 billion bet by GM to sell up to 2 million technology-laden, modern-looking vehicles annually to consumers who today cannot afford GM vehicles designed for the United States, but may someday as their incomes rise. GM has struggled for years to crack the code for growing profitably outside rich markets, in part because vehicles designed for the U.S. or China’s wealthy coastal cities cost too much for developing world consumers. The company has abandoned some Southeast Asian countries and pulled back from Africa because it could not compete. This time around, GM says, through disciplined cost-control it has finally found a way to make affordable vehicles in bulk for emerging markets, loaded with the technology that consumers want and still make a profit. The Chevrolet Tracker and the Buick Encore (not be confused with its American cousin of the same name nor the Opel Mokka X) are the first tests of a new strategy for engineering vehicles to appeal to buyers in around 40 nations of the world’s middle class such as Brazil and Mexico, and the huge developing market that exists within China’s heartland. The GEM project involved an unprecedented level of cooperation with GM’s Chinese joint venture partner SAIC Motor. GM and SAIC shared engineering costs and collaborated on purchasing, GM executives said. What potential customers will see are vehicles that include amenities such as touchscreens, mobile phone connectivity, rear-view cameras, and safety features like automatic emergency braking and airbags. What GM is counting on them not to notice is that the number of options is limited, to reduce complexity in purchasing and manufacturing, or that touches such as fully-carpeted trunks are absent. “We may not be the absolute lowest price point in China”, GM president Mark Reuss told at the automaker’s downtown Detroit headquarters. “But we’re going to be right in that segment where this is a pretty good-sized car with a huge value for what you pay for it”. The team that set out to build GM’s new vehicle family included engineers and designers from 14 different countries, meeting at the automaker’s technical center in the Detroit suburb of Warren to hammer out details that were then executed in China and elsewhere, GM executives said. As the basic design of the GEM vehicles took shape, the strategy for where they would be sold changed. GM pulled out of some markets like India and Vietnam that were originally slated to be among the target markets. The challenge GEM project chief engineer Doug Houlihan faced was how to deliver low-cost vehicles that did not look cheap or lack key safety features. Sometimes, that meant spending more. Houlihan gave the green light to spend extra on machines that could weld on the tops of car doors rather than stamping the door in one piece. The extra investment delivered a door that fit smoothly into the roof of the car for a sleeker look. “This gives the customer more than they would expect”, Houlihan said. To offset that cost, Houlihan and his colleagues dug into logistics and the supply chain. Shipping some vehicles by sea between Brazilian ports saved money in a market where moving goods by road can be a logistics nightmare. Houlihan said that Brazilian logistics savings more than paid for the extra $2 per vehicle GM invested for a rear axle 5 times stronger than its predecessor in South America. One GM plant in Brazil took over some work on engines and bumpers that had previously been outsourced, saving $120 per vehicle; a significant figure for a low-cost vehicle. Integrating the head-rest on the front seat for some models saved $7 per vehicle. Chinese suppliers are key to the new GM vehicle line, but the automaker is shifting away from relying on Chinese production. GM has tried to localize costs for these vehicles as much as possible which can help offset currency fluctuations that hit markets like Brazil. That can also mitigate the impact of tariffs. U.S. President Donald Trump has escalated trade tensions with China and has threatened a broad tariff on U.S. autos and parts. “You try and tariff-proof yourself and get it as local as you can”, GM’s Reuss said. GM’s new emerging market lineup will face plenty of competition. Chinese automakers are pushing into some of the same countries GM has targeted. Jeff Schuster, a senior executive at auto forecaster LMC Automotive, said GM’s advantage could last just a few years if rivals follow with their own low-cost models that offer modern amenities to match those in new Chevrolets and Buicks. Internally, a key test will be how GM applies the cost-saving strategies used in the global emerging market project to other vehicle programs. Houlihan has been named to lead efforts to apply the cost lessons learned from this project to GM’s global lineup of crossovers for the Cadillac, Buick, Chevrolet and GMC brands. +++

+++ LOTUS has confirmed that it is in the advanced stages of developing an all-electric hypercar. Called Type 130, the model will be Lotus’s first all-new production car since 2008. Lotus also claims it will be the first fully electric hypercar built and to go on sale from a British manufacturer. The name is a reference to a number of groundbreaking models that have appeared throughout the Norfolk brand’s 71-year history, beginning with the Type 14 Elite in 1957; claimed to be the world’s first composite monocoque production car. The most recent, the Type 111 (the world’s first aluminium and bonded extrusion construction road car) became the Elise. The 130 is low and wide. Lotus design director Russell Carr says it is a similar length to the existing Evora (which is 4.4 metres long) but will sit closer to the ground and be nearly 2 metres wide. It uses a carbonfibre structure and will be built in Hethel away from the company’s main production line. The cabin is tightly proportioned and adopts the teardrop form familiar from hypercars like the Ford GT40, to better allow airflow to pass around it. The most impressive features are 2 substantial air tunnels in the rear bodywork which have the tail light elements integrated around their exists. It’s a detail that Carr says has been inspired by the venturi tunnels of LMP sports prototype racing cars. The battery pack will be positioned entirely behind the passenger compartment, with drive sent to all 4 wheels. No other details are forthcoming at the moment, beyond the fact (as previously reported) that the powertrain is being developed by Williams Advanced Engineering, making this a collaboration between 2 of the most famous names in Formula 1 history. Lotus boss Phil Popham promises an “entirely appropriate” level of performance for the 130’s target market and what will be a 7-figure pricetag. The total system output is tipped to exceed 1000 hp. It is also set to offer a range of more than 400 kilometres. Both the battery pack and the pushrod-operated rear suspension will be visible beneath a transparent cover, with Carr saying the plan is for the huge aero tunnels to also incorporate lighting elements. The rear licence plate surround will be removable to help improve performance when the car is used on track. Downforce will be generated from a substantial underbody diffuser and there will also be moveable wing elements and a drag-reducing DRS system. Inside the cabin will feature plenty of carbonfibre and a digital instrument pack, but will also have conventional switchgear rather than a touchscreen interface. “You want to be able to find things without taking your eyes off the road in a car like this”, Carr said. Carr also claimed there will be more room and shoulder space than in a Ford GT or Aston Martin Valkyrie, with moveable seats rather than moveable pedals. “We’re trying to get the balance between prestige and luxury right”, Carr said, “but also to make clear that it’s a very high performance car. We don’t want people to think it’s a stripped-out track day monster, it will be much more practical than that. But equally we don’t want to make a Bugatti either, it has to be a Lotus”. Other neat details include a camera rear view system which will use deployable pods that motor out of the scissor-opening doors, and which relay images onto display screens. It’s a very similar system to the one the forthcoming McLaren Speedtail will have. “We were frustrated when we saw those”, Carr admits, “we’d been working on them for some time”. The Type 130 will be formally unveiled at an event in London later this year and will be open for ordering shortly afterwards. Total production volumes will be tiny: fewer than 50, and likely less than 20 globally. +++ 

+++ Daimler’s China chief said sales rose 3 % in the first quarter, defying an overall downturn in demand in the world’s biggest car market, thanks to robust demand for ultra luxury vehicles like the Mercedes S-Class MAYBACH . “The Maybach it is still going excellent. Demand is more than 600 units a month”, Daimler’s China chief Hubertus Troska told. Despite increasing the list price for the car, demand has risen from a sales rate of 500 a month, Troska said. China’s move to lower value added tax will help boost overall demand for cars for the rest of the year, he added. “I am cautiously optimistic that we can see positive momentum”, Troska said. +++ 

+++ Daimler plans to launch an electric compact SUV in 2021 which will be called the MERCEDES-BENZ EQ B, the German carmaker’s CEO said. Dieter Zetsche made the comments at a press conference on the sidelines of the Shanghai Autoshow. +++

+++ RENAULT chairman Jean-Dominique Senard said the alliance with Nissan and Mitsubishi needs to be rebalanced “in spirit” to counter fears among the Japanese carmakers that he wants to dominate the decades-old partnership. “There was a lot of worry at the start, and I can understand that, about whether Jean-Dominique Senard was going to be dominant, would want to impose his views”, Senard said in an interview. “There is no desire to dominate. We need a blank slate”. The lopsided cross-shareholding between Renault and Nissan “doesn’t reflect the reality” of their relations and the alliance’s new governance is working well, he said. A better framework has helped overcome “forces” that were trying to break the partnership apart. Senard replaced Carlos Ghosn in January at the head of Renault and has been working to keep the partnership together ever since. Ghosn led all 3 companies at the same time until his arrest in November in Tokyo on charges of financial misconduct and his departure left the alliance reeling from a climate of suspicion. Japanese authorities are now questioning Ghosn over new allegations that he funneled millions of dollars from Nissan for his own purposes. He has denied all charges. Ghosn’s removal laid bare tensions within the Alliance stemming from Renault holding a 43 % stake in Nissan with voting rights, while the Japanese carmaker holds a 15 % in Renault stake without voting rights. Nissan has also been uncomfortable with the French government’s influence via a 15 % stake in Renault that carry extra voting rights. Senard said Japanese culture dictates that legitimacy comes from not imposing views, equal treatment and the desire not to humiliate. “We need to know how to treat them as equals”, he said. “The feeling was this wasn’t done in the past”. The French executive said an audit of RNBV, an Amsterdam company running the Alliance, isn’t yet complete. Renault said earlier this month that Ghosn had made questionable payments to a distributor in the Middle East and an outside lawyer. That probably triggered Ghosn’s latest arrest, according to his lawyer. +++ 

+++ ROLLS-ROYCE expects to achieve double-digit sales growth in China this year, although it will be lower than the 40 % rate it saw in 2018, its chief executive said. Torsten Muller-Ötvos made the comments in an interview on the sidelines of the Shanghai Autoshow. “We are well set up for again quite a good growth rate in 2019. We definitely see double-digit growth”, said the boss of the BMW-owned Rolls-Royce. He said growth would, however, unlikely reach the same level as last year. “I don’t think so. That would be a little bit too much”, he said. +++ 

+++ SELF-DRIVING CARS will need around 1 billion lines of computer code: nearly 1,000 times more than the 145,000 NASA needed to land Apollo 11 on the moon. Jaguar Land Rover (JLR) gave the estimated figure to illustrate the seriousness of the need for more people to become qualified coders in order to help deliver connected and autonomous vehicles in the future. The British manufacturer says it wanted to “inspire the next generation of software engineers” via the Land Rover 4×4 In Schools Technology Challenge: an educational initiative designed to encourage teenagers to aspire towards STEM (Science, Technology, Engineering, Maths and medicine) careers. In the world finals this year, participants were given 30 minutes to write 200 lines of computer code to enable a scale model Range Rover Evoque to navigate a 5.7-metre circuit. The programme that the challenge is part of has allowed JLR to reach more than 4 million young people since 2000, with 110 students from 14 different countries qualifying for the world finals this year, which were held at Warwick University and won by the NewGen Motors team from Greece, following 2 days of competition. This year, JLR is also launching a Digital Skills Apprenticeship programme in order to attract computer engineers to help code its next generation of electric, connected and autonomous vehicles, as well as support the firm’s factories in the future. Last year, there were 23 million software developers in the world, with this figure expected to grow to 27.7 million by 2023. Research by the World Economic Forum suggests around 65 % of today’s students will end up working in jobs that don’t exist at present. Nick Rogers, executive director of product engineering at JLR, said computer engineering and software skills are “more important than ever”. He added: “The UK will need 1.2 million more people with specialist digital skills by 2022”. +++ 

+++ VOLKSWAGEN is considering adding a rugged all-electric Land Rover Defender rival to its upcoming line-up of I.D.-badged vehicles. VW bosses revealed that the brand is mulling over entering the off-roader marketplace, going toe to toe with the likes of the Jeep Wrangler and the next Defender. But Volkswagen will stand out from the crowd by offering a pure-electric model. The SUV could arrive sooner than you’d think as VW’s head of design Klaus Bischoff told me: “Maybe one of the next ID family members is a more rugged SUV, let’s see”. American EV start-up Rivian has already revealed a large, seven-seat SUV featuring traditionally boxy proportions and a promise of off-road capability when it goes into production in 2020. But the proposed VW offering would be unapologetically a tough off-roader. Volkswagen’s head of strategy Michael Jost explained: “There are no producers in this sector yet: building a robust electric car that loves scratches and wears them as a badge of honour”. Jost told me he is championing the idea internally at the company. Jost stressed the utilitarian nature of the proposed SUV, emphasising a clean, simple, hard-wearing design using cheap and robust plastics, displays protected by waterproof and scratchproof covers and an interior that can be cleaned with a pressure washer. The basis of the unnamed I.D. off-roader will be the VW Group’s new MEB platform for all-electric vehicles, and specifically, the version being lined up for use on a flagship, luxury, full-size I.D SUV. But the electric off-roader could be offered in 2 sizes just like the Land Rover Defender. A 4,500 mm long, short-wheelbase version would have 3 doors, while a 5-door, 7-seat variant that’s 4,850 mm in length would sit between the Tiguan Allspace and the Touareg. As with all I.D models, VW could offer more interior space than comparable combustion-engined rivals, owing to the packaging of the electric motors and batteries. It’s far too early for detailed technical specifications and the brand has yet to reveal what the electric range of the largest version of MEB actually is, but 600 km is the number most commonly associated with the maximum range of the platform. A proposed production date has not been announced. The project is still embryonic, and with a fleet of confirmed I.D. models already in the pipeline from the end of 2019 onwards, it wouldn’t arrive until 2021 at the earliest. +++ 

+++ The bosses of BMW and Deutsche Telekom have urged the German government to take action to block a European Commission proposal that would set a WIFI BASED standard for connected cars. In a letter, BMW CEO Harald Krüger and Telekom’s Tim Höttges warned that ruling out an alternative approach based on 5G mobile networks would leave Europe lagging rivals like China when it comes to the future of mobility. “We are convinced that mandating Wi-Fi technology will cause significant delay to the European rollout of car-to-car and car-to-infrastructure communication”, the CEOs said in the letter to Transport Minister Andreas Scheuer. Asked for comment, the German Transport Ministry said it was reviewing reservations raised by legal advisers to the European Council (the intergovernmental part of the EU decision process) after a working group meeting on April 5. These would have to be examined before the government takes a final position on the issue, the ministry said. The EU executive is seeking to set benchmarks for internet-connected cars, a market for carmakers, telecoms operators and equipment makers expected to be worth billions of euros a year. The Commission’s preference for the Wi-Fi-based ITS-G5 standard would give Volkswagen and Renault an edge over BMW, Daimler, Ford and PSA Group which endorse the rival 5G standard called C-V2X. Advocates of C-V2X, which could for example enable cars to ‘talk’ directly to each other to avoid colliding, say the technology works on existing 4G LTE networks and would be enhanced by the rollout of next-generation 5G services. “C-V2X is a game-changer for safety”, an alliance of groups representing the European information technology and automotive industries said. A key committee of EU lawmakers rejected the Commission’s proposal last week. The European parliament will vote in a plenary session in which a simple majority would be needed to block it. The European Council also has a say in the issue and would also need a blocking majority to derail the proposal, say officials in Brussels. +++

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