+++ BMW is on the verge of making the next generation of its flagship i8 sports car a fully electric model, according to sources at the firm. Bosses are at a crucial decision-making stage with the next i8 and senior officials at the German car maker are now said to be favouring a pure-electric model. The second-generation i8, tentatively slated for introduction by the end of 2023, was originally conceived as a high-powered 4-wheeldrive evolution of today’s petrol-electric hybrid. That type of set-up has been clearly indicated by BMW development boss Klaus Fröhlich on a number of occasions over the past year. However, recent information out of BMW’s R&D headquarters in Munich reveals the development of an alternative plan under which the next i8 would adopt a newly developed pure-electric drivetrain. The current i8 combines a 3-pot petrol with electric power move would be part of a “race to road strategy” that aims to provide a “tangible link” between BMW’s involvement in Formula E and its i electric car division. The alternative pure-electric plan developed for the i8 revolves around what one key Munich insider describes as a “new high-torque pure-electric driveline”. Its adoption could put the successor to today’s first-generation model into direct competition with a number of emerging limited-volume zero-emission supercars, including the Tesla Roadster and a planned pure-electric replacement for the Audi R8, while eclipsing rivals such as the planned plug-in hybrid Porsche 911. Secrecy surrounds the new electric driveline and the amount of power it develops, although it shares key elements with the 4-wheeldrive system being developed for the production version of the iNext, which is undergoing testing ahead of its planned launch in 2021. Among its innovations is a new generation of electric motor. Developed in-house, it is claimed to achieve “significantly higher rotational speeds” than the existing synchronous units used in the hybrid system of today’s i8. Prototype versions of the new electric motor, which is scheduled to be produced at BMW’s drivetrain plant in Munich, have already been tested in i8 mules, according to engineering sources. They suggest the new motor has been conceived to provide future BMWs with the high-revving characteristics of the company’s combustion-engined cars. The battery pack for the all-electric BMW sports car is expected to draw on lithium/ion cell technology from Chinese battery specialist CATL. The 2 companies have already announced plans for battery manufacture at BMW’s Dingolfing plant in Germany from 2021 in readiness for the introduction of the iNext. Although BMW has studied automotive applications for solid-state battery technology with US partner Solid Power since 2017, one source said such tech is not deemed sufficiently mature for consideration for the next i8. The source admitted that although simulation tests under laboratory conditions have brought promising results, it is still not yet ready in the unit capacity that would be required for ranges over 400 kilometres. A further sticking point in the proposal to turn the i8 into a pure-electric model is the platform. Although it has been described as being suitable to support pure-electric capability, the existing model’s carbonfibre structure lacks the modularity of more modern skateboard-style designs used by rival car makers. One possible scenario is to base the future i8 on a modified platform from the production version of the iNext, which unlike the upcoming iX3 and i4, is set to receive a newly developed structure. “There are 2 lines of thought on the new i8. Both appear to have their merits, but there is no definitive decision as yet”, a high-ranking BMW official said in response to rumours in the German media suggesting the company had already settled on the alternative all-electric option. With raw material and battery cell sourcing contracts becoming an increasingly important consideration in the production of hybrids and pure-electric cars, a decision on how the i8 will progress would likely need to be taken before the end of 2019 to ensure it meets its planned introduction date. Among the factors favouring BMW’s original hybrid plan for the next i8 is the relative ease and little cost with which the existing model’s carbonfibre and aluminium platform could be upgraded to accommodate a new petrol-electric hybrid drivetrain. “I have a carbonfibre chassis in the i8, so I would like to use something like that with much more performance: electric and conventional”, Fröhlich said in response to queries on the future of the i8. BMW’s head of development also indicated the new i8 could receive a 4 or 6 cylinder combustion engine in place of the 3 cylinder petrol unit in use today: “Then it will be very soon in the 600 hp region and it will not have a weight of 2 tonnes”. With today’s facelifted first-generation model developing 374 hp, such a move could potentially provide the second-generation i8 with nearly double the power of its predecessor. However, such a figure is still significantly down on that of a number of recent electric hypercars, most of which exceed 1000 hp and are from start-up firms. Maintaining the i8 as a plug-in hybrid may allow BMW to keep it at a more reasonable price point than those cars, which tend to list in the 7-figure range. Although a full-electric car is likely to be pricier, BMW’s economies of scale and engineering would still help keep costs (and therefore the car’s price) down. A decision on whether BMW will opt to spend big and turn the i8 into a pure-electric model or adopt a significantly more powerful hybrid driveline within a modified structure from the existing model is expected to be made during a board meeting in the second half of this year. +++ 

+++ BUGATTI is developing a second model to sell alongside the Chiron. While full details about the car remain under wraps, the company’s chief executive recently hinted the yet-unnamed model will be completely different than its bigger sibling, and unlike anything else currently sold around the world. “It’s clear that when you think about the second model, you always have to see what the body style could be. Believe me, we really looked into every detail of the body style, and I think that there is one that is very promising for a company like Bugatti. It’s a body style which is not today on the market”, company CEO Stephan Winkelmann told. He didn’t provide additional details. However, his statement seemingly rules out a long-rumored SUV, a sedan in the vein of the 16C Galibier concept, and a Chiron-like coupe. Regardless of what it looks like, it will arrive as a smaller, more affordable, and more daily-drivable car than the Chiron. That doesn’t mean Bugatti will go into Toyota Supra territory, though. Its second model will cost at least $1 million. The French automaker previously confirmed its quad-turbocharged, 16-cylinder engine has nearly reached the end of its life cycle. What will power the Chiron’s successor remains to be seen, and Bugatti still has time to figure it out, but the second model could go in a completely different direction. “This could be, for example, a full electric car”, Winkelmann said. He added a Bugatti-badged EV would need to be “the best of its kind”. +++

+++ General Motors unveiled a new electronic platform that it says will allow for the rollout of next-generation vehicles with advanced onboard technology. The new platform, which is making its production debut in the CADILLAC CT5, will essentially future-proof GM vehicles for the next decade. The new system is capable of handling up to 4.5 terabytes of data per hour (or roughly double that of GM’s current electronic platform) which the company says will provide it with the kind of digital power needed for advanced technologies like electric propulsion and Super Cruise driver assistance features. “The critical role of software and its importance to our vehicles, both now and for years to come, cannot be overstated”, said GM President Mark Reuss. “Our new digital vehicle platform and its eventual successors will underpin all our future innovations across a wide range of technological advancements, including EVs and expanded automated driving”. The new system will also allow for over-the-air updates thanks to an integrated Ethernet connection with speeds up to 10 Gbps. Perhaps more importantly, GM says the system includes a major leap forward in terms of cybersecurity. GM expects the new electronic platform to be in most of its global vehicles by 2023. +++ 

+++ CHINA will be the main battleground for electric-car makers for the next 2 decades, seeing off advances by the United States and Europe, amid a government push toward greener vehicles. Annual electric-car sales in China will reach 2 million units next year, after topping 1 million for the first time in 2018. While China now accounts for more than half of global sales, other regions will start to catch up and its share will shrink to about 25 % in 2040, the researcher said. China’s growth means automakers such as Volkswagen and Tesla cannot afford to lose focus on the country even as sales start to pick up in other regions. The 2 brands are among those planning to start EV manufacturing in China, while Nissan is looking for acquisition targets in the local industry. Chinese contenders such as Beijing Electric Vehicle and BYD are fighting to defend their home turf. China surpassed the U.S. in 2015 to become the largest electric-car market and has kept the title since, helped by the government subsidizing purchases and spurring companies’ research efforts. The country is looking to cut back oil consumption, clear up its air and look for new ways to compete with global automobile powerhouses in Japan, Europe and North America. Now that the industry is past its nurturing stage, the Chinese government is phasing out purchase subsidies and will eliminate them completely in 2020. That is set to weigh on demand slightly in the next 2 years, though strong growth will resume after that with sales set to hit 3.5 million electric cars in 2023. Traditional internal-combustion cars will gradually give way to electric vehicles, before being overtaken. Electricity-powered cars will account for 8 % of China’s passenger-vehicle sales next year, 20 % in 2025 and 68 % in 2040, according to the report. Easier registration of electric cars has boosted sales in major cities, while licenses for gas guzzlers remain tightly capped. The 6 cities of Beijing, Shanghai, Shenzhen, Tianjin, Hangzhou and Guangzhou accounted for about 35 % of passenger electric vehicles sold in China last year. EV sales in Shenzhen and Shanghai exceeded those in Germany and the UK in 2018. Sales will be further spurred by China’s new stringent rules to promote the production of greener cars. Major automakers will be punished unless they meet quotas for zero- and low-emission cars or buy credits from other companies that exceed the quotas. Total EV production this year is set to exceed the government’s target, but most of the major global automakers are not generating enough credits and will have to buy them from local automakers. +++ 

+++ Incoming DAIMLER boss Ola Källenius is working on a cost cut program to reach profit margin targets which are threatened by global trade woes and ramp up issues at factories. Källenius, who will take over from Dieter Zetsche after the company’s annual general meeting on May 22, has been working for months on a cost cut initiative, dubbed ‘Move’, which is expected to be ready in the summer. Central administration costs are to be cut by about 20 %, adding billions of euros in efficiency potential would be targeted. Källenius said earlier this month that Daimler will cut development costs of new Mercedes-Benz cars by a significant amount by 2025 and will intensify alliances with rivals as a way to improve margins. +++

+++ A new study by Researchers from the University of Cambridge has shown that DRIVERLESS CARS will be able to improve traffic flow by at least 35 % by working together as a fleet. The researchers programmed a fleet of miniature robotic cars to drive themselves around a 2-lane circuit in order to observe how the traffic flow changed when one car stopped. When the cars were not programmed to drive in a cooperative manner, any that came up behind the stationary car had to slow down or stop and wait for a gap in traffic in the other lane. This resulted in a queue forming that decreased overall traffic flow, just like on a real road. The researchers then programmed the cars to drive cooperatively, so that when one car stopped in its lane, it sent out a signal to all the others. Cars in the other lane responded by slowing down slightly so that those stuck behind the stationary car were able to change lanes quickly, without having to stop or slow down significantly. In addition, when a remote-controlled car was introduced to the circuit and driven aggressively by one of the researchers, the autonomous cars gave way to each other in order to avoid any crashes. When the fleet of autonomous cars was programmed to drive cooperatively, overall traffic flow improved by 35 % compared with the egocentric driving test and 45 % compared with the aggressive driving test. The results of the study are being presented at the International Conference on Robotics and Automation in Montreal, Canada. It is hoped they will be useful for looking at how driverless cars can communicate both with each other and with human-driven cars on real roads in the future. Michael He, an undergraduate student at St John’s College, Cambridge, designed the algorithms for the experiment. He said: “Autonomous cars could fix a lot of different problems associated with driving in cities, but there needs to be a way for them to work together”. Much of the hardware used in the study was created by Nicholas Hyldmar, a Downing College undergraduate, who added: “If different automotive manufacturers are all developing their own autonomous cars with their own software, those cars all need to communicate with each other effectively”. +++ 

+++ FORD will cut 10 % of its global salaried workforce by the end of August 2019 as it looks to save $600 million a year. These cuts are part of an “organisational redesign process” that will see approximately 7,000 Ford employees around the world lose their jobs. Ford says one of the goals of the redesign is to “reduce bureaucracy” by cutting the size of its management structure by 20 %. In a statement, Ford said the process would help “create a more dynamic, agile and empowered workforce”. The firm acknowledged that it would be a “challenging time” for some employees, but said the redesign was “necessary to position Ford for success”. The American manufacturer confirmed in March that would be cutting around 5,000 jobs in Germany and an undisclosed number in the United Kingdom, but a source told that between 500 and 550 “white collar, salaried employees” are expected lose their jobs at the brand’s offices in Essex. The cost-cutting plan is intended to increase pre-profit earnings by up to $11 billion over the next 3 to 5 years. As well as job losses, the company will be axing “less profitable vehicle lines”, and shifting away from MPVs to SUVs. Production of the (Grand) C-Max in Germany is ceasing, and Ford’s gearbox factory in Bordeaux, France is to close. In a statement, Ford said: “As part of a comprehensive European business transformation announced in January, we are reorganising our workforce in the European region. The goal is to significantly decrease structural costs, reduce bureaucracy, empower leaders and managers, and eliminate less value-added work. Within this context, in March we confirmed that we would offer voluntary separation programmes for employees in Germany and the UK to help accelerate the plan and return to sustainable profitability. Through these programs and other initiatives, we expect to reduce in excess of 5,000 jobs in Germany, including temporary staff. The total number of positions impacted in the UK is still to be determined”. Ford also confirmed that any UK job losses as part of its European restructuring would be unrelated to its previously announced plan to cut up to 400 jobs at its Bridgend Engine Plant in South Wales. Ford employs 13,000 people in the UK and around 54,000 in Europe. The company is targeting a 6 % profit margin in Europe, which would be higher than has previously been achieved in the region. +++

+++ JAGUAR LAND ROVER (JLR)has recorded an annual loss of £3.6 billion, but chief executive Ralf Speth says an ongoing cost-saving programme will transform it into a “leaner and fitter” company for the future. The pre-tax loss for the financial year that ended in March reflected a £3.1 billion write-down of the value of the business in the final quarter of last year, but also showed the ongoing impact of falling sales in China and continued uncertainty over Brexit. The firm’s annual revenue of £24.2 billion was down £1.2 billion year on year. Without the one-off write-down, JLR’s annual pre-tax loss was £358 million. While annnual sales increased by 8.4 % in the UK and 8.1 % in North America, the sharp decline in China meant that its overall sales of 578,915 vehicles was a year-on-year decline of 5.8 %. Chinese market conditions are weakening, largely in part due to economic uncertainty surrounding trade disputes with the United States. The total Chinese market declined by 5.1 % in the first quarter of 2019, while JLR claims that sales of premium mid-size and full-size SUVs fell 19 and 15 % respectively. Regardless of a big slump in demand for premium SUVs in China, the Land Rover wing of the company continued to be the main breadwinner. The Discovery Sport was JLR’s most popular model over the financial year with 88,000 retail units shifted. The outgoing Evoque tallied up 68,200 sales, while 11,300 sales of the all-electric Jaguar I-Pace were reported. JLR did post a £269 million pre-tax profit in the final quarter of the financial year covering January-March 2019, although this was reduced to £120 million after redundancy costs, part of its ongoing transformation programme, were taken into account. The firm noted that it retained £3.8 billion of cash. Speth said that restructuring programme has already resulted in £1.25 billion of efficiencies, and made the firm “one of the first companies in its sector to address the multiple headwinds simultaneously sweeping the automotive industry”. He added: “We are taking concerted action to reduce complexity and to transform our business through cost and cash flow improvements. JLR is focused on the future as we overcome the structural and cyclical issues that impacted our results in the past financial year. We will go forward as a transformed company that is leaner and fitter, building on the sustained investment of recent years in new products and the autonomous, connected, electric and shared technologies that will drive future demand”. The financial results come amid ongoing speculation that JLR’s owners, Tata Motors, are considering selling the firm to the PSA Group. In a conference call, Tata’s financial chief, PB Balaji, again denied it was considering selling JLR, telling reporters “there is no truth to these rumours. We do not comment on speculation”. +++ 

+++ LAND ROVER is primed for a major electrification push next year with the roll-out of a hybrid version of the all-new Defender, and the first prototypes have emerged. It’s the first time that I’ve seen a prototype for the new Defender without diesel power. It will be offered with both mild-hybrid and plug-in hybrid engines in 2020, although with no visible charging port seen through the disguise, it’s likely that we have the former here. There is no indication of the engine size, power and efficiency offered by the new powerplant. However, it could make use of Jaguar Land Rover’s 2.0-litre turbcharged Ingenium petrol unit, one of the firm’s biggest sellers since the diesel market has suffered huge losses. Land Rover is keen to silence sceptics, particularly when it comes to the issue of electrified propulsion being used in a supposedly back-to-basics 4×4. However, the company insists that an electric motor allows maximum torque from step-off, and the torque delivery is more controllable, meaning a hybrid would perform better off road. At the same time, a similarly petrol-electric test mule for the Range Rover Velar has been spotted. It’s predicted that Land Rover will launch the luxury SUV with the same ‘P400e’ powertrain (mating a 2.0-litre turbo petrol engine with an electric motor for 400 hp) as found in the Sport and full-size Range Rover. +++ 

+++ MERCEDES-BENZ ’s American division has told its dealers that it will trim its line-up in the coming months, according to insiders who attended a meeting about the topic. The company is preparing to deep-six slow-selling models and trim levels, while reducing the number of options and trim packages buyers can choose from. “We’re going to see models go away within the next 12 months. Within the next 90 days, we might see some of those announcements”, a dealer who attended the meeting told. The comments suggest the changes will come into effect for the 2020 model year. By entering niche after niche, Mercedes has expanded its portfolio to include 15 nameplates in the United States. Factor in the different variants of each car and the firm sells almost 90 models. That number will continue to grow, too; the A-Class is now available in America as a sedan, the electric EQ C is about a year away, and a new crossover named GLB will arrive before the end of the year. Mercedes is releasing at least 2 AMG-badged variants of many nameplates, a mid-range one and a range-topping one, a strategy which adds even more versions. I know the SLC (which started life as the SLK) will not be replaced because the segment it competes in is shrinking. It’s nearing the end of its life cycle; Mercedes already released a model named Final Edition. The 2-door variants of the C-Class and the S-Class could also disappear for the same reason. +++

+++ MITSUBISHI ’s newly appointed CEO says the automaker’s low-volume U.S business requires a rethink in line with the parent company’s new “small but beautiful” strategy, but he added that pulling the plug on sales in the region is “probably” not an option. Takao Kato, who helped establish Mitsubishi’s joint manufacturing plant with Chrysler in Illinois some 3 decades ago, conceded Mitsubishi’s U.S. strategy is still a work in progress. “If you are a big-scale OEM, of course you will be able to secure a profit. But will that be appropriate for us too, at Mitsubishi?”, Kato said in a news conference, his first since being named CEO last week. “This is something we believe we should deliberate on going forward”. Kato, who currently leads Mitsubishi’s important Indonesia unit, will take the reins from chairman and CEO Osamu Masuko at pending approval at a June 21 shareholders’ meeting. Masuko, who has led the company since 2005, will stay on as chairman. Kato said he will continue to implement the “small but beautiful” strategy championed by Masuko. That approach aspires toward a more profitable business with steady growth, even if it means missing out on rapid volume expansion. Mitsubishi will also redouble its focus on its strengths, such as small cars for emerging markets, especially in its Southeast Asia stronghold. Kato will have a guiding hand in penning a new mid-term business plan that the Japanese automaker intends to unveil in the current fiscal year that started in April. Masuko, 70, said he wanted a new CEO to lead the plan and stay on to implement it. Masuko added that he chose Kato because of Kato’s experience in navigating different cultures. Aside from establishing the U.S. plant in Normal, Illinois, Kato also helped set up a new assembly plant in Indonesia that opened in 2017 and a joint-venture plant with PSA Group in Russia in 2011. Chrysler eventually pulled out of the U.S. joint venture, called Diamond Star Motors, and Mitsubishi ceased its independent, money-losing operations there in 2016. “It’s not easy to be in that market”, he said of the U.S. When asked if Mitsubishi might consider pulling out of the U.S. market, as Suzuki did in 2012 after long struggling to ignite sales, he said “probably not”. “Sales are being continued. North America is one of the biggest markets. Therefore, exiting from the sales market would probably not be an option”, Kato said. Masuko drove Mitsubishi to record profit after years of losses, and under his tenure as CEO, U.S. sales rose every year. But Mitsubishi’s U.S. volume has plunged from a peak of 345,111 in 2002. It sold 118,074 vehicles in 2018, and sales were up 12 % through April this year. Masuko’s recovery work at Mitsubishi was derailed in 2016 when the company admitted to cheating on fuel-economy ratings for several nameplates sold in Japan. The bogus fuel economy results were discovered when Nissan, who was partnering with Mitsubishi in a minicar joint venture, noticed discrepancies and called Mitsubishi out on it. That triggered a plunge in Mitsubishi’s sales and share price, opening the door for Nissan CEO and chairman Carlos Ghosn to engineer a bailout deal in which Nissan took a controlling stake in the financially troubled Mitsubishi. Masuko now has a seat on the 4-member governing board that oversees the alliance between Nissan, Mitsubishi and Renault. After Mitsubishi’s latest leadership overhaul, Masuko will continue to oversee alliance matters, while Kato will be in charge of daily operations at Mitsubishi. +++ 

+++ NISSAN has unveiled a new version of its ProPilot driver assist system that allows for hands-free highway driving. For the time being, the new technology will be limited to Nissan’s home market of Japan. Nissan’t latest version of ProPilot will be offered first in the company’s Skyline, which is sold in the United States as the Infiniti Q50. Nissan says self-driving Skylines will arrive on the market this fall. The system is designed for highway driving and requires a final destination to be entered into the vehicle’s navigation system. Using high-definition map data, along with input from the vehicle’s various cameras and sensors, ProPilot 2.0 is capable of keeping the vehicle centered in its lane and a set distance from the vehicle ahead without any input from the driver. However, the system isn’t fully autonomous. Similar to Cadillac’s Super Cruise system, ProPilot 2.0 uses a driver monitoring system to ensure the driving is paying attention at all time. If the system detects the driver isn’t focused on the road ahead, ProPilot will attempt to get the driver’s attention with audio and visual warnings. If no action is taken, the system will eventually disengage. Unlike Super Cruiser, however, ProPilot does include an aid for lane changes. When approaching a slower vehicle, the system automatically determines if there is sufficient room to pass. If there is, the system will alert the driver, at which time the driver can initiate the pass by placing both hands on the wheel (a Japanese regulation) and hitting a switch. At least in the interim, ProPilot 2.0 will be exclusively to the Japanese market. However, it should be only a matter of time until the technology appears in the U.S., where Nissan markets its driver assistance technologies as ProPilot Assist. +++ 

+++ PORSCHE has confirmed plans to launch a hybrid version of the new Cayenne Coupe. Following the launch of the midrange Cayenne S Coupe, a Porsche exec informed journalists that the company will continue to expand the lineup with new powertrains “step by step” including a hybrid edition sometime this year. The automaker has not announced which of its hybrid powertrains has been selected for the first electrified Cayenne Coupe, though the Cayenne E-Hybrid’s configuration is a likely candidate that would deliver 462 hp and 700 Nm. The coupe will presumably get a more powerful hybrid edition at some point, likely on par with the Panamera Turbo S E-Hybrid that boasts 680 hp and 850 Nm. +++

+++ TESLA ’s rocky 2019 continued this week with the automaker’s stock price falling briefly below the $200 per share mark for the first time since 2016. Tesla’s stock price has been in free fall this month, with investor not only worried about the company’s cash-burn rate, but also a recent report from the NTSB that found the automaker’s Autopilot system was engaged at the time of a fatal crash involving a Model 3. Tesla’s stock is down 39 % year to date, with a large chunk of that decline coming after the automaker went back to the well for another round of financing on May 2. In all Tesla took in $2.7 billion in new capital, but the company warned at its current burn rate, that cash stockpile would only last for 10 months. Investors were further spooked when Tesla CEO Elon Musk issued an order to employees to keep a tight lid on expenses. That decree came down shortly after Tesla posted a first quarter loss in excess of $700 million. Those cash issues have been compounded by questions over the safety of Tesla’s Autopilot system, which Musk has touted as a key advantage for the automaker. But after the March 1 crash of a Model 3 using Autopilot, some analysts are questioning Tesla’s ability to bring a fully autonomous car to market by next year, as Musk has previously stated. “We believe that the NTSB report could cast doubt on Tesla’s self-driving capabilities, which have been highly touted by Mr. Musk,” Needham analyst Rajvindra Gill wrote in a note to clients. +++

+++ TOYOTA last month announced 2 deals in China that were small in size but large in strategic planning. The automaker said it would establish a green-tech research institute with Tsinghua University and provide state-owned BAIC Group’s Foton unit with fuel-cell technology for buses. But before it could feel comfortable unveiling those plans, Toyota put in months of work to pledge fresh investment in the United States. The technology transfers represent gestures of goodwill to Beijing by the Japanese automaker, which wants to “step on the accelerator in China” as CEO Akio Toyoda told an internal management group. Announcing U.S. investment first was a strategy Toyoda felt the company needed to pursue to avoid U.S. President Donald Trump’s wrath, the minutes showed, providing a rare window into how it has sought to tread carefully as the United States and China battle for investment, jobs and influence in the global economy. “For Toyota to operate globally, we need to strike a fine balance between China and the United States”, Toyoda was quoted as saying. “It’s imperative to avoid making enemies”. The Japanese automaker is making what one unnamed senior executive described as a “significant move to steer its focus to China”, a market where it is far behind industry leaders Volkswagen and General Motors. Its pivot to China (one that many other global automakers are also making) has been made easier by a thaw in ties between China and Japan but complicated by Trump’s trade policies. That includes the trade war between Washington and Beijing as well as threats from Trump to impose tariffs of up to 25 % on imported cars made by foreign automakers. Trump declared that some imported vehicles and parts pose a national security threat, although he delayed a decision for as long as six months on whether to impose tariffs. In response, Toyota issued one of its strongest messages on potential tariffs to date, calling the designation “a major set-back for American consumers, workers and the auto industry” and saying it sent the message “our investments are not welcomed”. Toyota has been at pains to show its commitment to the United States, and Toyoda explained a fresh investment of $749 million in U.S. manufacturing capacity and jobs as “an essential” step before it could speed up efforts to expand in China. Announcing the new investment on March 14, Toyota stressed the sum helped bump up a 5-year investment pledge made in 2017 to almost $13 billion from $10 billion. The day following the announcement, Toyoda also spoke before the Economic Club of Washington, declaring: “I love America. I just don’t understand why we are called a national security threat and it pains my heart”, Toyoda said in answer to a question after his speech. “One thing I would promise, no matter what direction the discussion takes us is that Toyota will not leave America”. Though many other automakers, including U.S. automakers, have announced investments in the United States since Trump came to power in 2017, the near $13 billion pledged by Toyota is the biggest amount by far. Toyota would have pressed ahead with fresh U.S. investment even without its China plans, but there was much internal planning around how the announcements should be timed, company sources with knowledge of the matter said. The sources, who were not authorized to speak to media, declined to be identified. In a further sign of Toyota’s careful approach to relations with Washington, board member Ikuro Sugawara was dispatched in April to meet with U.S. Ambassador William Hagerty at the U.S. embassy in Tokyo to give him the heads up that the 2 China deals would be announced. “I didn’t think we needed to do that but the Ambassador commended our effort more than I had expected”, Sugawara, a former vice minister for trade, was quoted as saying. The U.S. embassy in Tokyo declined to comment on the specifics of the meeting, saying only it was in regular contact with Toyota and many other Japanese firms about their plans to continue investing in the United States. For many automakers, the U.S. auto market is a key profit center that generates industry-wide sales of about 17 million vehicles annually. But China has rapidly grown in importance (with 28 million vehicles sold in 2018) and is drawing new investment from global automakers eager to keep up with its heavy promotion of electric cars. Toyota commands 14 % of the U.S. market, but in China it had just 5.3 % share last year and the 1.49 million vehicles it sold were less than half the volume sold by Volkswagen and General Motors. It is aiming to lift sales 10 % every year over the next 5 or 6 years; roughly equivalent to 3 million cars annually by the mid-2020s, according to a source at a Toyota parts supplier, who declined to be identified as he did not work for the automaker. Asked about Toyota’s China ambitions, a company spokesman said China was an important market and the automaker was looking at strengthening its base there so that it could propel the business forward. China has sometimes been a difficult market for Japanese companies due to historical reasons, with sales in 2012 taking a battering in the wake of diplomatic spats over disputed islets known as Diaoyu in China and Senkaku in Japan. But company sources say Toyota’s pivot has gained steam on the back of an official visit to Japan in May last year by Chinese Premier Li Keqiang, during which Toyoda accompanied Li on a tour of Toyota’s facilities on the northern island of Hokkaido. Since then, Toyota has embarked on an expansion of its manufacturing muscle in China, with plans to add annual production capacity of 120,000 vehicles each at its Tianjin plant and at its Guangzhou plant. It is also expanding distribution networks and is sharing technology to promote goodwill among Chinese leaders, Toyota sources have said. “We have full backing of the Chinese government, but we shouldn’t take it for granted and must continue to make efforts consistently”, Toyoda was quoted as saying. In contrast to the automaker’s efforts in the United States, Toyota is content to keep a relatively low profile with regards to its plans in China. Neither the Tianjin nor the Guangzhou plans were formally announced by Toyota. Investment amounts have also not been disclosed. Last month a news conference for international media at the Shanghai auto show was canceled; a move that one company source said was the result of a warning by Toyoda to be circumspect when dealing with the media on the topics of tariff hikes or U.S. import quotas. +++ 

+++ VOLKSWAGEN recently released preliminary details about the ID.3, its first purpose-designed electric car. The Golf-sized hatchback will ultimately be available with 3 different driving ranges, and they will each correspond to a specific battery pack. The German firm doesn’t want to offer software-locked batteries. “It would be quite hideous to do this. You would put all of the battery capacity in a car that’s not using it. It’s not a very wise way to use raw materials and resources”, Volkswagen board member Jurgen Stackmann told. The lithium / ion battery pack line-up will include 45, 58 and 77 kWh packs. While the ID.3 is unlikely to receive a pack bigger than 77 kWh, Stackmann said bigger models built on the MEB platform (like the production variants of the ID Buzz and the ID Roomzz concepts) will come with larger batteries to offer more range. He didn’t reveal how big the company will go, but the aforementioned Buzz used a 111 kWh battery bigger than any pack currently in production. Additional specifications about the ID.3 remain guarded. We know it will ship with a single electric motor mounted over the rear axle, meaning it will be rear-wheel drive, and Stackmann didn’t rule out an all-wheel drive model with an additional electric motor up front. More details will be released in the weeks leading up to the car’s global introduction during the 2019 Frankfurt auto show. +++

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