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+++ BMW hopes to win over buyers with its third-generation 1-series when the car goes on sale in Europe in September. The new model comes with a more expansive interior and bigger trunk than the current generation. BMW says that switching the 1 series to a front-wheel-drive architecture from rwd has resulted in a “giant leap in space,” despite shrinking both the vehicle’s overall length marginally to 4319 mm and its wheelbase by 20 mm. Knee room, headroom and elbowroom have all been expanded, especially for rear passengers, BMW said. Designers gave the car a more pronounced shark nose and a distinct wedge shape, as well as reinterpreting the signature kidney grill following styling cues found in larger BMW sedans. BMW said it poured the sum total of experience in front-wheel-drive into the 5-year development process of the car, which from now on will be available as a 5-door model only and feature multi-link rear suspension as standard. These include introducing into a combustion engine BMW for the first time an actuator borrowed from the sportier i3s electric car that brings wheel slip under control up to ten times faster. This significantly improves traction when pulling away, cornering or driving on rain slick roads and together with dynamic stability control it significantly reduces the power understeer drawback so typical of front-wheel-drive cars. Customers in Europe will have a choice of 3 diesel and 2 gasoline engines to choose from, ranging in output from 115 hp to 306 hp in the high-performance M version, which uses the most powerful 4 cylinder the automaker has to offer. All engines meet the Euro 6d-Temp emissions standard that takes effect in September and the entry 116d already complies with Euro 6d, which takes effect for all new cars starting in 2021. Car buyers looking for the greatest possible connectivity features can opt for the BMW Live Cockpit Professional which features two 10.3-inch digital display and an updateable operating system. That means the BMW’s voice-controlled Intelligent Personal Assistant, making its debut in the compact hatch, will be capable of improving itself over the air during the life cycle of the car. Convenience and comfort options include heads-up display, a digital key that can be shared with up to 5 people and a new panoramic glass roof. Trunk space grows by 20 liters to 380 liters and for ease and convenience, the hatch opens for the first time fully electrically. Largest markets for the 1 series are Germany and the UK, which together account for nearly half of all sales, followed by Italy, France and Japan. 80 % of the 1-series cars are delivered to customers in Europe. The 1 series hatcback is not sold in the U.S. where BMW’s entry-level model is the 2 series coupe. Altogether roughly 1.3 million units were sold since the first generation debuted in 2004, when it was positioned as the only rear-wheel-drive premium compact in the market. The new 1 series will be unveiled at the end of June during a presentation at the BMW Welt in Munich, followed by its auto show debut in September in Frankfurt. European sales of the 1 series fell 8.5 % to 126,428 last year, according to figures from JATO Dynamics. This put it behind the Mercedes A class, with sales of 156,020 and the Audi A3 with sales of 143,789. +++ 

+++ More than half of all passenger car sales worldwide would be ELECTRIC vehicles (EVs) by 2040, signifying the drastic transformation the automotive industry is going through. Bloomberg New Energy Finance had to revise upwards its previous 2040 projection, predicting that EVs could make up 57 % of all new cars sold globally, CNN reports. Electric vehicles could make up a similar percentage of the light commercial vehicle market in the US, Europe and China within that time frame. “We see a real possibility that global sales of conventional passenger cars have already passed their peak”, said Colin McKerracher, head of advanced transport for Bloomberg New Energy Finance. The fast development of electric cars will allow them to match combustion engine powered vehicles in price, and they are already cheaper to operate. This means that EVs will soon overtake traditional cars as the more economical choice for buyers, faster than originally anticipated. Over the next 20 years, sales of electric vehicles will rise from 2 million units last year to 56 million by 2040. During the same period, the same analysis predicts that sales of combustion engine powered vehicles will drop from 85 million units last year to 42 million units worldwide. Rapidly falling prices in batteries will drive the shift towards electric cars, with battery costs per kWh having already dropped by 85 % since 2010, thanks to manufacturing improvements and better economies of scale. Taking into consideration the latest trends, the report expects electric cars to become less expensive that similar internal-combustion vehicles by the mid-2020s, both in purchase price and long-term ownership costs. EVs are already cheaper to run and drive thanks to electricity’s much lower price compared to gasoline or diesel fuels. They also have much smaller maintenance costs as they have fewer moving parts. Ride-sharing services are the ones that will shift faster to electric vehicles than private buyers, according to Ali Izadi-Najafabadi, Bloomberg New Energy Finance’s shared mobility research leader. “There are now over a billion users of shared mobility services, such as ride-hailing, globally”, Izadi-Najafabad said. “These services will continue to grow and gradually reduce demand for private vehicle ownership”. +++ 

+++ Fiat Chrysler Automobiles chairman John ELKANN , in conveying his “huge respect” for Nissan and Mitsubishi, is promising that the Japanese automakers will derive big benefits from his proposed tie-up with their French partner Renault. “Our proposed merger with Renault will create the potential to build a global partnership with all 3 of these great companies during this period of unprecedented transformation in our industry”, Elkann said. “I have huge respect for Nissan and Mitsubishi, and their products and businesses”, he wrote. Elkann’s overture to the Japanese came just a day after his company submitted a formal proposal for a 50-50 merger with Renault, Nissan’s 20-year long automotive partner and biggest shareholder with a 43.4 % stake. The envisioned tie-up would create an automotive juggernaut with global sales of 15 million vehicles a year, including volume from the Japanese. Renault, calling FCA’s offer a “friendly proposal”, said its board of directors will study it “with interest” and with an eye toward “creating additional value for the alliance”. Elkann, in appealing to Japan’s leading business daily, promised payoffs for the country’s automakers through bigger scale and mutual respect. Renault is Nissan’s controlling shareholder, while Nissan, in turn, is the controlling shareholder of Mitsubishi. “Our proposal to Renault is one we believe will be transformative in many positive ways”, he wrote. “Our spirit is one of finding a common purpose that provides benefits for all our companies, embracing Nissan and Mitsubishi as valued and respected partners”. The merged company would be a 50-50 FCA-Renault entity, giving the Japanese partners a potentially smaller voice at the highest levels of decision making. The new board would have 11 members, 5 each from Renault and FCA, but only 1 from Nissan. Renault’s current alliance is overseen by a 4-member Alliance Operating Board. Sitting on that board are Renault Chairman Jean-Dominique Senard, Renault CEO Thierry Bollore, Nissan CEO Saikawa and Mitsubishi CEO Osamu Masuko. Nissan and Mitsubishi have been largely quiet on FCA’s proposed merger. When reports about a possible merger first emerged in March, Saikawa said he was “not at all” aware of such talks. Just before FCA submitted its official offer on May 27, the Nissan boss declined to comment on whether Renault had informed him of the approach. “We are always exchanging constructive opinions about ways to strengthen the corporate alliance in a forward-looking manner”, he told reporters, noting that the top executives of Renault, Nissan and Mitsubishi would gather for a regular meeting this week in Japan. “We would like to have a constructive discussion”, Saikawa said. +++ 

+++ The EUROPEAN UNION said that it would flatly reject any rules put into place by the United States to limit the importation of European cars and car parts. The bloc was responding to a proposal made by the Trump administration earlier this month to impose quotas on European auto imports in the name of national security. According to EU members, such limits would be illegal under World Trade Organization rules, which specifically bar voluntarily restraining exports. As such, the 28-nation bloc says it is “100 % against” president Trump’s proposal to limit the number of cars and car parts allowed to be imported into the U.S. from the EU. Trump is also considering new tariffs on EU-made vehicles that could raise prices of European vehicles by more than $11,000. Trump delayed a decision on auto tariffs on May 17, setting up a 180-day window to hammer out a new deal with the EU. If no deal is reached by the end of that period, Trump could decide to enact a 25 % tariff on imported European autos. “We hope that the tariffs will not be put into practice at all”, Swedish Trade Minister Ann Linde told. “That is a really, really tough situation for the European car industry. So that would be a catastrophe”. If tariffs are put into place, the EU would slap retaliatory taxes on up to €20 billion worth of U.S. goods. +++

+++ FIAT CHRYSLER AUTOMOBILES (FCA) would gain much-needed scale by getting access to Renault Group’s platforms for passenger cars and crossovers, if the proposed merger of the 2 European giants goes ahead. FCA presented a merger plan to Renault, which is reviewing what it said was a “friendly” offer. While FCA outsold Renault globally last year 4.8 million vehicles to 3.9 million, FCA is currently the sum of 3 regional businesses. Renault, however, is much more globally integrated with its Japanese alliance partner, Nissan, because the 2 have been working together since 1999. While it is easy to promise rapid industrial synergies in a press release or a PowerPoint presentation, they take years to become reality. For example it took Renault-Nissan more than a decade to create a truly common global architecture. The Common Module Family, or CMF, introduced in 2013, reduces development costs by up to 40 % and parts costs by up to 30 %, Renault-Nissan says. CMF is not a single platform. It is a system of interchangeable modules applicable to almost every vehicle size. By segment, it is known as CMF-A (minicars), CMF-B (small cars) and CMF-C/D (compacts and midsize cars). With more than 20 alliance models based on CMF, Renault-Nissan expects about 9 million vehicles a year to have the common architecture. If a merger can be finalized, that number would easily top 10 million because access to CMF would let FCA more quickly develop a global range of passenger cars and crossovers than it could have done alone. In March the alliance debuted CMF-B with the launch of the Renault Clio, which is not only the French company’s best-seller in Europe, it was also the No. 2-selling model in Europe after the Volkswagen Golf last year. FCA, meanwhile, did not become a single entity until October 2014, which is when Chrysler Group’s activities were fully merged into Fiat Group Automobiles. This means platform and powertrain sharing across FCA’s 3 main regions (North America, Europe, Middle East Africa (EMEA) and Latin American) is marginal. The one exception is the Jeep brand, whose small Renegade, compact Compass and midsize Cherokee are built in different regions using the same underpinnings. For Renault, the platform benefits gained from FCA would more regional than global, but they remain significant. For instance, in North America, FCA could give Renault access to the body-on-frame architecture used by the Jeep Wrangler and Gladiator pick up, as well as a new unibody architecture designed to underpin the new Jeep Grand Cherokee and its larger siblings. In Europe, FCA could share the rear-wheel-drive / all-wheel-drive Giorgio architecture created for the Alfa Romeo Giulia and Stelvio. FCA boss Mike Manley recently said the Giorgio architecture would also become the base for a future range of Maserati models. +++ 

+++ GENERAL MOTORS said it will partner with construction firm Bechtel Corp to build fast-charging stations across the United States for electric vehicles, and is seeking investors to fund the collaboration. The automaker said the partnership was at a Memorandum of Understanding stage and the business structure for the tie-up had not yet been finalised. “This collaboration and future build-out will help alleviate issues with customers’ range anxiety by leveraging GM and Bechtel’s scale, flexibility and proprietary data to provide chargers in locations convenient to EV customers”, General Motors told. The company declined to disclose the names of any investors it is currently in talks with. +++ 

+++ 2019 is probably the year when HONDA will launch a more extreme version of the NSX, which might get the Type R moniker like its iconic predecessor, and will reportedly premiere in October at the 2019 Tokyo Motor Show. The NSX Type R will benefit from a power boost. It’s still unknown how this will be achieved, but they could tune either the 3.5-liter, twin-turbo V6 or the 3 electric motors, or all of them. In any case, maximum output will be higher than the current model’s 581 hp: it will stand at 650 hp. Other modifications will include a stiffer suspension and larger carbon-ceramic brakes. Furthermore, the NSX Type R is believed to sport a new body kit, with added aero parts like the front splitter and rear wing inspired by the NSX GT3 racer. The latter could serve as an inspiration point for other aspects, including the all-wheel drive setup that might be ditched in favor of rear-wheel drive, although considering that this would require major changes to the hybrid powertrain, it is considered highly unlikely. The NSX Type will be more expensive than a Porsche 991 Turbo S. +++ 

+++ China’s NIO will form a joint venture with Beijing E-Town International Investment and Development Co. Ltd which will invest 10 billion yuan ($1.45 billion) in the new entity, the electric vehicle (EV) maker said. E-Town Capital will support a new manufacturing facility for Nio’s next-generation platform 2.0 (NP2) vehicles, it said, adding the parties are continuing to work towards a final binding definitive agreement on the investment. Nio’s shares were up 7% to $4.13 in premarket trade after the company reported better-than-expected Q1 results. +++ 

+++ Even though it’s unknown whether or not Renault will even further entertain negotiations with FCA regarding a proposed 50-50 merger, such a deal going through could potentially spell trouble for NISSAN . The Japanese automaker repeatedly pushed back against Renault’s efforts to tighten up their alliance, and if the latter was to accept a 50-50 split with Fiat Chrysler Automobiles, it could marginalize Nissan as far as certain markets are concerned. Take for example the United States, where FCA is much stronger than Nissan when it comes to the light trucks segment, despite Nissan investing a lot in redesigning its Titan full-sized pickup. Meanwhile, FCA’s RAM pickup recently surpassed the Chevrolet Silverado to become the 2nd best-selling light truck and 2nd best-selling overall vehicle in the U.S. Another issue would be that a united Renault-FCA could weaken Nissan’s bargaining power if the carmaker ever decides it wishes to renegotiate its current status. Also, the new company’s structure would dilute Nissan’s managerial leverage with 11 total board members of which only 1 would represent the Japanese brand. “It shows that Nissan isn’t the only date in town”, said Christopher Richter, a senior automotive analyst with CLSA Asia-Pacific Markets. “Having been spurned a couple times, Renault is looking around for a new partner. This changes the dynamic for Nissan in several ways”. While both Nissan and Mitsubishi could expect to earn an additional €1 billion thanks to the addition of FCA, the latter only mentioned the 2 briefly in its description of the deal. “FCA looks forward, as part of a combined enterprise with Renault, to working with Renault’s alliance partner companies on ways to create additional value for all alliance members”, stated Fiat Chrysler. “FCA recognizes the standing and achievements of Renault’s partners and sees significant expected benefits to all parties from the expanded partnership”. Still, 2 areas where Nissan could maintain its status within a revamped alliance would be with electrified vehicles and autonomous driving: none of which are strong suites for FCA at the moment. +++ 

+++ Stuttgart prosecutors said PORSCHE ’s offices were searched as part of a broader probe investigating confidential information leaks to a tax advisor and high remuneration payments to a Porsche works council member. The probe involved 176 police and tax inspectors as well as 10 state prosecutors, the Stuttgart prosecutor’s office said. Tax investigators and prosecutors in Baden-Württemberg searched several premises including Porsche’s offices in Weissach and Stuttgart, the offices of a tax advisor in Stuttgart, and offices of finance authorities, the Stuttgart prosecutor’s office said in a statement. A tax official is being probed on suspicion of having leaked confidential information to a tax advisor of Porsche in exchange for receiving favors, the prosecutor’s office said. Porsche managers are being probed on suspicion of a breach of fiduciary trust on suspicion of having granted “disproportionate” payments to a member of Porsche’s works council, the prosecutor’s office said, without elaborating further. +++ 

+++ France will seek protection of local jobs and other guarantees in exchange for supporting a merger between carmakers RENAULT and Fiat Chrysler, its finance minister said, underscoring the challenges facing the plan. Renault chairman Jean-Dominique Senard arrived in Japan to discuss the proposed tie-up with the French company’s existing partner Nissan; another potential obstacle to the $35 billion-plus merger of equals. Renault and Fiat Chrysler Automobiles (FCA) are in talks to tackle the costs of far-reaching technological and regulatory changes by creating the world’s third-biggest automaker. Nissan found out about Renault’s merger talks with Fiat Chrysler only days before they became public, 4 sources told, stoking fears at the Japanese carmaker that a deal could further weaken its position in a 20-year alliance with Renault. A deal between Renault and FCA would create a player ranked behind only Toyota and Volkswagen and target €5 billion a year in savings. Some analysts, however, say the companies face a challenge to win over powerful stakeholders ranging from the French and Italian governments to trade unions and Nissan. Patrick Pelata, a former Renault chief operating officer, also criticized the deal plan for undervaluing Renault and threatening to overstretch its engineering resources. By valuing Renault at its market price, the all-share offer attributes a negative €6 billion value to Renault operations after deduction of its 43.4 % stake in Nissan and 3.1 % in Daimler, Pelata told. “That’s hardly reasonable”, he said. “And I think that shareholders, including the French state, are bound to take issue with this sooner or later”. Pelata added: “FCA has big problem because they haven’t invested for the future. They have no electric vehicle platform and they’ve done nothing in autonomous cars”. French finance minister Bruno Le Maire told that the plan was a good opportunity for both Renault and the European car industry, which has been struggling for years with overcapacity and subdued demand. Le Maire also said the French government would seek 4 guarantees in exchange for backing a deal that would reduce its 15 % stake in Renault to 7.5 % of the combined entity. “The first: industrial jobs and industrial sites. I told the Renault chairman very clearly that it was the first of the guarantees I wanted from him in the opening of these negotiations. A guarantee on the preservation of industrial jobs and sites in France”, Le Maire said. The minister added that France wants to be well represented on the board of the new company, for it to be a leader in developing electric batteries and for the deal to take place “within the framework of the alliance between Renault and Nissan”. A source familiar with the matter told that Renault and FCA had given commitments about maintaining industrial jobs and sites, leaving room for white-collar and engineering layoffs as well as some plant downsizing. Italian Deputy Prime Minister Matteo Salvini said Rome might need to take a stake in the combined company, balancing France’s shareholding. Le Maire said he had spoken to the Japanese about the proposed tie up. Asked how they had responded, he replied: “I look at the reaction of Nissan president Mr Saikawa, and it’s a reaction that is open”. Nissan chief executive Hiroto Saikawa is likely to have first caught wind of the merger plan through his own chief operating officer, Yasuhiro Yamauchi, who also serves on Renault’s board, a source said, speaking on condition of anonymity because of the sensitivity of the matter. Analysts have said that Nissan, which has a 15 % non-voting stake in Renault, might be reluctant to back an FCA-Renault tie-up that would probably use its technology less than the current Renault-Nissan alliance. Saikawa told that Nissan is “open to constructive discussions”. The Renault-Nissan alliance has been under strain since the arrest and ousting of former chairman Carlos Ghosn late last year on charges of financial misconduct, with Nissan recently rebuffing a merger proposal from its partner. +++ 

+++ The Volkswagen Group’s China strategy is now focusing on the development of a third joint venture with local carmaker JAC. JAC Volkswagen has been given the mission to accelerate the introduction of the SEAT brand to the Chinese market. As part of the agreement, JAC Volkswagen will ramp up Seat’s development in China with the opening of a new R&D center in Hefei, Anhui province in 2021. When the JAC Volkswagen joint venture was set up in 2017, its mission statement was the development, production, and marketing of pure battery vehicles. However, the newly-signed agreement also gives JV the task to launch Seat in China in two or three years. The agreement also marks the promotion of JAC Volkswagen to a globally integrated member of the VW Group which will play an active role in the company’s manufacturing network. “The signing of this agreement is a new step forward in the strategic plan for the globalization of Seat. With the introduction of our business in China, we are boosting the future of the company and of electric mobility at the same time”, said Seat president Luca de Meo. That’s because JAC and Seat plan to develop their own platform for smaller e-cars. A planned R&D center will be responsible for developing those EVs as well as components for electric vehicles and mobility solutions. The center is currently under construction and is scheduled to open in 2021 in Hefei. Interestingly, when the Seat brand officially arrives in China, it will already find some of its vehicles driving on those streets. That’s because FAW VW’s new Jetta brand will start selling the VS5 and VS7 this year; models which are nothing more than re-badged Seat Ateca and Tarraco SUVs. The city of 8 million people will be a “playground” for the development of future mobility solutions. As part of a separate agreement called “Smart City”, Volkswagen will have the opportunity to test new technologies, business models and products in a connected smart city environment. The focus will be on the development of autonomous driving, with Volkswagen Group China, Mobility Asia, and JAC pooling their resources to collaborate on autonomous mobility services, including self-driving vehicles (robotaxis), autonomous fleet management, ride-hailing, and car sharing. +++ 

+++ This year, Porsche will launch a vehicle that questions the very essence of what makes a Porsche a Porsche. The full-electric TAYCAN is Porsche’s near-silent answer to the electrification freight train barreling toward the auto industry. The 600-plus hp sport sedan is at the vanguard of a wave of electrified vehicles. By 2025, Porsche expects about half of all new vehicles it delivers will be full electrics or plug-in hybrids. That’s a big change for a customer base historically drawn to the guttural growls of a turbocharged flat-6. “Everybody expects Porsche to enter the battery-electric vehicle market with something that is truly Porsche”, said Klaus Zellmer, Porsche Cars North America CEO. “It has to behave like a real sports car. That’s what people expect, and that’s what we are trying to then match, or exceed”. Zellmer, 51, describes the Taycan as the “most impressive car” he’s driven in his more than 2 decades at Porsche. “The Taycan was just really from a different planet”, Zellmer said of the driving experience. He added: “Based on the global demand, we are likely to look at 40,000 of production capacity in Zuffenhausen. We have a depositor program, so we have people who show sincere interest. If we can convert that initial interest into real sales, then we don’t have to worry about the first one to two years of selling that car here in the States. But you shouldn’t count your eggs too early. Pricing is not out yet, the final design of the car, the final specifications. But the initial reaction to the car is incredibly positive. 50 % of reservations are from Porsche and the other 50 % are from outside the brand. So it’s a big conquest, which is very exciting because we don’t want to just substitute what we have. We want to incrementally grow. Zellmer said a fully electric Macan (the current generation resonates well with female customers) will be based on the Premium Platform Electric, or PPE, so it’s designed as a battery-electric vehicle from the ground up. That allows us to maximize the benefits of a purely electric vehicle when it comes to packaging, wheelbase and space, for instance. “You will have people naturally gravitating towards a Macan EV because the market is ready for it. We consciously made that decision to stay closer to our core of the brand with the first EV. The Taycan is more like a 4-door coupe type of car being more associated with a sport car”. Zellmer said the business model of Porsche is designed to keep the 15 % promise. “We all know that battery-electric vehicles and the technology, especially with the battery costs, is currently a burden. If you go into 2022, you are going to see some scale effect in the battery costs. There’s a lot of cost reduction potential if you don’t have any exhaust system, if you don’t have any water cooling system. There are so many things you can leave out. You have to maintain the margin intelligently. Our transition is not from one day to the other. We need to keep our high-profit cars in the market as long as they are compliant, and as long as we can mitigate their CO2 footprint”. Zellmer said tariffs by the United States are a threat for the car industry of bringing imported cars from Europe into the U.S.: “Nobody will be able to either eat the 25 % tariff or completely hand that on to customers without losing any volume. You can choose between pest and cholera. We would have to partly absorb the additional cost to mitigate the real volume hit. We are calculating what that would mean for us. But whatever perspective you take, it’s horrible. The effect is bigger on us because we don’t have anything to balance with local production. We only produce in Europe. Economically, it doesn’t make sense to produce cars of the small volume we have in the United States. It’s just not feasible. I am very optimistic that the EU and the U.S., having been partners for decades, can find a solution. I believe in people being sensible, sensitive. A war only ever produces losers. Would people buy a Porsche that is “Made in America”? Who knows. It remains hypothetical since we don’t have any production plans in the U.S. First and foremost, that’s a question of volume. It simply wouldn’t make sense when only 3 of every 1,000 vehicles on the road are Porsches. We always aim to produce one car less than the market demands and that has proven to be a good approach”. +++ 

+++ TESLA ’s financial woes continue even as the Californian company sets jaw-dropping records for sales of its electric Model 3 across continental Europe and predicts the imminent arrival of autonomous ‘robotaxis’. CEO Elon Musk predicted 3 months ago that Tesla would make a profit in the first financial quarter of this year. Instead, it posted one of its worst 3-month results, losing $702 million. Musk blamed delays in Model 3 production, as well as losses caused by a slip in residual values for its ageing Model S and Model X cars. Tesla has posted a profit in only 4 quarters since 2010 and has never had a profitable year. Demand might be cooling in the US, but not for Europe, at least for the new Model 3. Across Europe, 14.652 Model 3s were registered in March, an astonishing result that surpassed sales of the BMW 3 Series and the Audi A4. Of that number, 5.315 were sold in Norway, Europe’s leading electric car market, giving the Model 3 a staggering 29 % of the market. Next year, Tesla will start selling an SUV version of the Model 3, the Model Y, and Musk recently predicted that it would ultimately become more popular than the Model S, Model X and Model 3 combined. However, problems are mounting up for Tesla. As well as finishing the Model Y, it needs to find money to complete a new factory in Shanghai, China, scheduled to start later this year, as well as develop the new Roadster sports car and an electric truck, the Tesla Semi. A recent video from China showing an early Model S apparently spontaneously catching fire has also (literally) reignited safety fears surrounding its cars. Meanwhile, EV competitors are stacking up, including the Jaguar I-Pace (1.503 European sales in March, beating the Model X at 874), the Audi E-tron and Mercedes EQC. More affordable electric models, particularly from the Volkswagen Group, are due next year to rival the Model Y’s launch, as will Ford’s ‘Mustang-inspired’ Mach E SUV. Despite the headwinds, Tesla’s share price remains stratospheric, much to the annoyance of the infamous ‘shorts’ (the short-seller investors who bet against Tesla succeeding) and the traditional car firms. A Ford of Europe spokesman tweeted last week: “Since 2009, Tesla has lost $6.4 billion. In the same time frame, Ford has made $71.6bn. And yet as of today, Wall Street values Tesla at $45bn and Ford at $38bn. World is mad”. Even those who recommend buying Tesla stock have to qualify their enthusiasm. “Our Tesla call is hard to live with at times but we see value in Tesla’s EV / connectivity technology and experimentation. We remain confident there is a path to sustained profitability”, Philippe Houchois, analyst at financial research firm Jefferies, wrote in a note after Tesla’s recent poor results. That ‘experimentation’ ranges from the useful, such as over-the-air updates, to the wildly improbable. Falling into the improbable category are Musk’s claims that advances in Tesla’s autonomous tech will allow owners to send off their private cars to work as self-driving ‘robotaxis’ by as early as next year. He said the earning potential means we’d all be “financially insane to buy anything other than a Tesla”. Financial analyst Jeffrey Osborne at Cowen, a bank, called the plan “half-baked”. It’d also be unworkable across most regions until autonomous cars are given type approval. But right now for Tesla, even self-driving looks more achievable than self-financing. +++

+++ VOLKSWAGEN is looking to officially launch the stock market listing of its trucks unit Traton with a smaller deal size than originally anticipated, people close to the matter said. The carmaker earlier this month revived the plans to list Traton as it announced a corporate restructuring that includes investment in battery cell production and selling off non-core assets. The sources said that while the offer volume has not yet been finalised Volkswagen may float 10-15 % of Traton in a deal that could value it at more than €15 billion. The deal, worth around €2 billion, falls short of Traton Chief Executive Andreas Renschler’s original expectations. Last summer, he talked of selling a quarter of the company for more than €6 billion. The sources cautioned that the launch is not yet certain and could again be delayed at the 11th hour, as in March when plans were shelved. “Doing a smaller deal size initially at the expense of some valuation is perhaps how potential issuers need to think about approaching the IPO market now”, one of the people said. “You have got to approach the IPO market with appropriate respect and caution. Investors are going to be disciplined on price and you have to listen to them”, said another person close to the matter, discussing the IPO market in general rather than the Traton deal in particular. He added that in a smaller deal it would be easier to attract investor demand and to potentially scale back allocations to bolster pricing. Another person said that analysts were still working on research notes and there were no final views yet on valuation. “Overall, the market environment is not significantly better or worse than in March”, the person said, adding that that should allow for a valuation roughly similar to what was expected at the time. VW plans to build a global trucks business by integrating Traton’s MAN and Scania divisions to challenge Daimler and Volvo. A flotation could allow the truck and bus unit to build a war chest to deepen its relationship with Navistar, a U.S. truck maker in which it now owns a 16.85 % stake. +++

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