Newsflash: Renault laat nieuwe Arkana in Zuid-Korea bouwen

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+++ BMW announced plans to expand its production capacity for electric vehicle components in Germany, including investing more than €100 million by 2022 in electric drive production in Leipzig. BMW said it would produce high voltage batteries and battery components at 2 plants in Germany, in Dingolfing as well as Leipzig, with large series production of battery modules at the Leipzig site due to start as early as in mid 2021. +++ 

+++ CALIFORNIA governor Gavin Newsom has issued an executive order requiring all new passenger vehicles sold in the state to be zero emission by 2035. This means automakers would no longer be able to sell new vehicles with petrol and diesel engines in California. The order also doesn’t appear to make exceptions for eco-friendly vehicles such as plug-in hybrids. That’s a radical step and the California Air Resources Board is now being tasked with developing regulations to ensure that all new passenger cars and trucks sold in the state have zero emissions by 2035. CARB will also be developing similar regulations for medium- and heavy-duty vehicles which will go into effect by 2045, “where feasible”. The governor’s office said the transportation sector is “responsible for more than half of all of California’s carbon pollution, 80 % of smog-forming pollution and 95 % of toxic diesel emissions; all while communities in the Los Angeles Basin and Central Valley see some of the dirtiest and most toxic air in the country”. They went on to say switching to zero emission vehicles would “achieve more than a 35 % reduction in greenhouse gas emissions and an 80 % improvement in oxides of nitrogen emissions from cars statewide”. While electric vehicles are more expensive than their petrol-powered counterparts, Newsom said “zero emission vehicles will almost certainly be cheaper and better than traditional fossil fuel powered cars” by the time the rules go into effect. That’s expected to be true as companies are working to drive down battery costs and make electric vehicles cost competitive with petrol-powered models. The rules will only apply to sales of new vehicles and governor’s office clearly stated the “executive order will not prevent Californians from owning gasoline-powered cars or selling them on the used car market”. California is one of the largest markets for new vehicles in the United States and the move to go zero emissions will likely impact people in states far away.  It will also affect automakers as it will push them to have a zero emission lineup. +++ 

+++ Ford will invest $1.46 billion in its Oakville and Windsor plants in CANADA as part of a tentative deal with Canadian autoworkers, Unifor union national president Jerry Dias said. The deal includes retooling the Oakville plant to build 5 electric vehicle (EV) models between 2025 and 2028, with the first EV rolling off the assembly line in 2025, Dias said. The federal government, along with the Ontario government, is willing to invest in turning the Oakville plant over to the production of EVs, an investment that could keep the facility open for years, a government source confirmed. “We’re in the midst of negotiation” of how much money the Ontario government would contribute to the Ford plant’s electric car production line, Ontario premier Doug Ford (what’s in a name?) said. He did not say how much the province was considering to contribute. The Toronto Star and the Canadian Broadcasting Corporation have reported that the 2 governments could pitch in up to C$500 million. Credit Suisse analyst Dan Levy said the deal is beneficial for Ford as it averts a strike at the U.S. automaker’s Canada plants and addresses spare capacity. +++ 

+++ The first event for the boss of Swedish electric car brand Polestar at this month’s Beijing auto show: A 2-week quarantine in a hotel. The auto show, the first major in-person sales event for any industry since the coronavirus pandemic began, opens in a sign the ruling Communist Party is confident CHINA has contained the disease. Still, automakers face intensive anti-virus controls including quarantines for visitors from abroad and curbs on crowd sizes at an event that usually is packed shoulder-to-shoulder with spectators. “The car show will indeed be different from any other car show”, said Thomas Ingenlath of Polestar, owned by China’s Geely, by phone from his hotel room in Tianjin, east of Beijing. The automakers’ willingness to tackle the show’s logistical challenges highlights the importance of China, their biggest market. Chinese sales have rebounded to pre-pandemic levels while U.S. and European demand is weak and the industry struggles to reverse multibillion-dollar losses. “China is the only hope for many global car makers”, said John Zeng of LMC Automotive Consulting. “They are really counting on China to help their bottom line”. Ford0, General Motors, BMW and other brands are going ahead with global and China debuts of electric SUVs, luxury coupes and futuristic concept cars. Some are broadcasting events online to reach wider audiences. CEO Makoto Uchida of Nissan and other executives plan to appear by video from their home countries. Most brands are relying on Chinese employees or foreign managers who work in the country full-time to operate their displays while keeping contact with spectators to a minimum. China’s auto industry has largely recovered since the ruling party declared victory over the disease in March and allowed factories and dealerships to reopen. In August, sales rose 6 % over a year earlier. Meanwhile, purchases in the United States were down 9.5 % from pre-pandemic levels. Sales in Europe plunged 17.6 %. Automakers are responding by slashing workforces and shrinking operations. Nissan is closing factories in Spain and Indonesia and cutting global production by 20 % after reporting a $6.2 billion loss for the year ending in March. Groupe Renault is cutting 15.000 jobs worldwide and in April pulled out of its China joint venture with state-owned Dongfeng Motor. To cut costs, Fiat Chrysler Automobiles and PSA want to merge and create the world’s 4th biggest automaker. But they face an investigation by European regulators into whether that will improperly reduce competition. In China, the pandemic accelerated the consolidation of a fragmented industry with dozens of competitors by forcing a string of smaller local brands out of the market and bigger companies into alliances, said Zeng. “That will change the industry landscape in the long run”, he said. China’s major auto shows, held in Beijing and Shanghai in alternate years, are the industry’s biggest events, attracting every global automaker and dozens of new but ambitious Chinese brands. The last Beijing auto show in 2018 had 1.200 exhibitors from 14 countries and 820.000 visitors, according to organizers. This month’s event, postponed from March, follows a smaller auto show in July in the western city of Chengdu with 120 exhibitors that was a trial run for anti-virus measures. The Beijing city government has told automakers to limit the number of guests they invite but has yet to say how many people will be allowed into the 200.000 square meter exhibition center. Rules issued by the city say everyone at the show should remain at least 1 meter from each other. Zeng, the industry analyst, said he was skipping the auto show because if leaves his home in Shanghai, his children would have to be quarantined after his return. Polestar’s Ingenlath was tested for the coronavirus before being allowed to board a plane in Stockholm. He had a second test after landing September 5 in Tianjin, one of several cities where visitors from abroad undergo quarantine before they are allowed to travel to Beijing, the Chinese capital. “Really, to get emotion and the passion about the brand across, you can’t do that even with all the modern media we have”, Ingenlath said. “So I decided to go for a month”. Polestar, spun off from Volvo in 2017 as a standalone brand, is one of dozens of producers that plan to display electric vehicles. They range from established global giants to independent Chinese competitors including BYD and NIO. The Communist Party wants to make China a leader in the technology and has used subsidies and other support to transform it into the biggest EV market, accounting for about half of global sales. To spur competition, Beijing ended restrictions on foreign ownership of electric vehicle producers in 2018. Ingenlath said he brought books but has had little time to read in between working online and dealing with coworkers by phone, email and online video. “I have been going through pretty hard normal work routine”, he said. Ingenlath’s 13-year-old daughter interviewed him for a classroom presentation about his quarantine. Barred from leaving his room, he set aside 2 hours a day to lift weights and do calisthenics “just to be able not to go crazy”. +++ 

+++ FORD said it would like to use its experience gained from China on electric cars and onboard digitalized functions around the globe, especially its home market of North America. “We see China’s customers as the most advanced in terms of the digital consumer experience”, said Ford’s incoming CEO Jim Farley in an interview. “For us to be successful among those companies, this is the knowhow we can apply around the world, especially in our home market of America. This is especially true for our premium brand Lincoln”. China has been the largest market for new energy vehicles since 2015. More than 1.2 million electric cars and plug-in hybrids were sold last year, accounting for around 4.5 % of total vehicle sales in the country, according to the China Association of Automobile Manufacturers. The vast market potential and the government’s support for the sector have attracted both startups and established carmakers to vie for customers through the latest devices and functions available, ranging from touch screens and natural voice command to battery-swap services and automatic parking. Farley said China’s successful electrification shift in the automotive industry is allowing international companies like Ford to create new business models that are more efficient for customers and investors. He said this is another reason why success in China is crucial to Ford’s global operations as the carmaker is investing more than $11 billion in electrified models. Ford is launching its first global electric vehicle, the Mach-E, at the Beijing auto show. The model will have a range of over 600 kilometers and features autonomous driving functions that Farley said are better than Tesla’s vehicles. “The design and the DNA of the model is from the America icon of Mustang”, Farley said. “It will be an example of electrified vehicles from Ford in China”. He said Ford’s China team will be given more autonomy in terms of electrification. They will set up a team to develop electric vehicles. They will also be tasked with making Ford a leader in digitalized experiences, Farley said. Ford deepened its localization campaign in China about 2 years ago, elevating the market’s position to that of North America and hiring Chinese auto veteran Chen Anning as the top executive of its China operations. “The localized models are growing Ford after so many years, and the losses are shrinking. The team is making necessary changes for China to be a growing and profitable business for Ford globally”, Farley said. Ford’s vehicle sales in China from April to June totaled 158.589 units; up 3 % compared to the same period last year. This represented Ford’s first quarterly sales rise in the world’s biggest auto market in almost 3 years. Ford has sought to recover from a slump in China sales unprecedented for a major global automaker. Its sales in China sunk 26 % last year after a 37 % drop in 2018. +++ 

+++ Chinese automaker GAC and BMW expect sales to grow this year in China, the world’s biggest auto market, as consumption revives from Covid-19 lockdowns, officials said. Guangzhou-based GAC, which has partnerships with Toyota and Honda, expects its full-year sales and production to be positive, said general manager Feng Xingya. Jochen Goller, head of BMW China, said the carmaker expects “single digit growth” in China this year. The executives were speaking at the Beijing International Automotive Exhibition 2020. GAC previously said it aimed to increase sales by 3 % in 2020. +++ 

+++ The Zhejiang GEELY Holding Group, owner of Volvo, launched its electric car-only platform. The Chinese carmaker said it will share the architecture among its 9 brands and also make it accessible to other carmakers. The first model to be based on the architecture will be the Lynk & Co Zero Concept. The model, having a range of over 700 km and featuring co-pilot functions powered by Mobileye, will go into production and hit the market in 2021. Li Shufu, Geely’s chairman and founder, said: “Our development of this transformative electric vehicle architecture marks the biggest leap forward at Geely in more than a decade”. The 18 billion yuan ($2.64 billion) platform was the joint effort of the carmaker’s R&D centers in China, Sweden, the United Kingdom and Germany, according to Geely president An Conghui. He said the idea of developing such a platform started around 5 years ago. “Architectures are the core competitive edge in the automotive industry”, said An. Geely said the electric car architecture can accommodate smaller A-Segment cars as well as larger D and E-segment vehicles. It will also have a variant developed for light commercial vehicles. Among other things, the architecture will features CATL’s battery technology that lasts 2 million kilometers, highly autonomous driving in collaboration with Mobileye, and smart digitalized onboard functions. Li said: “This far-reaching innovation will greatly expand the volume and scalability of our zero-emission models, and we intend to offer the benefits of this innovation to other manufacturers, reflecting common interests in our industry for addressing the challenges of climate change”. Geely said it has entered preliminary discussions with other global carmakers about potential use of the architecture. An said developing an architecture is costly, and some carmakers may want to use those by other carmakers. “But the key thing is that your architecture have to be competitive”, said An. Within Geely, An said 7 brands are developing 16 vehicles on the architecture, and many of them are scheduled to roll off the assembly line starting in 2021. The company said hundreds of thousands of vehicles based on the platform will first be produced in China. The number will surge when other subsidiary brands introduce their electric car vehicles. Some of them are already sharing the company’s Common Module Architecture (CMA), based on which around 700.000 vehicles have been produced since its introduction in 2018. China has been the world’s largest new energy vehicle market since 2015. Last year, more than 1.2 million electric cars and plug-in hybrids were sold; around 4.5 % of total vehicle sales in the world’s largest vehicle market, according to the China Association of Automobile Manufacturers. Israeli autonomous vehicle company Mobileye, a subsidiary of the US top chipmaker Intel, announced on a partnership with Geely. The new Mobileye SuperVision system, based on autonomous driving technology, will be installed in the new electric vehicle Zero Concept, launched by Lynk & Co, an automobile brand owned by Geely. For the first time, Mobileye will provide both hardware and software, as well as system updates to constantly upgrade driver assistance systems. Mobileye systems to be installed include 11 perimeter cameras, 7 of which are long-range, with 360 degree tracking capability and maps pack that together allow driver-free driving on all types of roads, fast or urban. Geely’s Auto Group, based in the city of Hangzhou in Zhejiang province, is a leading automobile manufacturer. Mobileye, headquartered in Jerusalem, develops, manufactures and markets advanced driver assistance systems (ADAS) based on image processing technologies. It was acquired in 2017 by Intel for $15.3 billion. +++ 

+++ HYUNDAI said it is participating in this year’s ADAC Total 24 hour race to be held op the Nurburgring, Germany, with 3 vehicles from its high-performance brand N. Hyundai said all of its 3 vehicles of Hyundai N (i30 N TCR, Veloster N TCR and i30 Fastback N) will compete in the contest from September 26 to 27 to test their endurance. It is the fifth time the automaker is taking part in the race since 2016, the company said. The Nurburgring circuit is a 25 km course with 73 corners, and for its narrow roads at various elevations and sharp curves, it is dubbed, “The Green Hell”. Rankings will be determined in the order of the highest operating mileage within the 24 hours of the race. How well the vehicle can endure the difficult driving conditions and the acceleration and turning capabilities are decisive factors that affect results of the race, Hyundai explained. In this year’s competition, a total 103 vehicles from 21 classes will participate. Due to the Covid-19 pandemic situation, the company said it will livestream the whole 24 hour race on its Hyundai Motor Driving Academy website for the first time. +++

+++ The HYUNDAI MOTOR GROUP has appointed powertrain expert Alain Raposo as executive vice president in charge of its powertrain tech unit at the group’s research and development division. Hyundai said Raposo will be responsible for engine, transmission and electrification development for Hyundai and Kia brands at the group’s global R&D headquarters. According to the automaker, Raposo is an expert who has led the research and development for powertrains, electric vehicles and battery development for over 30 years at major automakers, including Renault, Nissan and Groupe PSA. Before joining Hyundai, he was in charge of developing the powertrain, battery and chassis at Groupe PSA. “It is with great pride and honor for me to arrive at Hyundai Motor Group, which I consider as the company with the fastest growth in technology, quality and business expansion in the automotive industry”, Raposo said. “We are pleased to have Alain join the Hyundai Motor Group” said Albert Biermann, president and head of R&D. “In addition, Alain brings powertrain electrification experience, making us even stronger on our way to become the leading smart mobility solution provider”. The carmaker said it plans to launch a total of 44 electrified vehicles, including 23 battery electric vehicle models, by 2025. +++ 

+++ Volkswagen is setting a high bar for the first electric vehicle it will build around the globe. The carmaker will aim to pick off buyers of some of the industry’s bestselling SUVs with the ID.4 that debuted Wednesday, said Scott Keogh, chief executive officer of VW’s U.S. unit. He told reporters it will compete with the likes of Toyota’s RAV4, Honda’s CR-V and Subaru’s Forester. “The battleground is not ‘how can I continuously turn over a couple-hundred thousand people’ ” Keogh said during a virtual briefing. “The trick is how do I draw the 4 million people that are buying cars every year”. The big ambition is consistent with the boldest push into EVs among the world’s established automakers. The tall order will be made a bit easier by the ID.4’s $39,995 starting price in the U.S., where VW’s electric models are eligible for the full $7,500 federal tax credit that Tesla and General Motors customers have used to buy from those automakers. Multiple states also offer several thousands more in incentives, allowing Volkswagen to position its EV as a bargain relative to the average price Americans pay for new cars and trucks. The carmaker also will offer free charging for 3 years through Electrify America, the subsidiary VW established in the wake of its diesel emissions scandal. While most automakers closely guard images of new models, Volkswagen chief executive officer Herbert Diess blew his own cover earlier this month. The ID.4 made an appearance toward the end of a video he released of he and Tesla’s Elon Musk taking VW’s ID.3 hatchback for a spin at an airfield near its headquarters in Wolfsburg, Germany. The 2 VW models will be the “most formidable” competition Musk faces in electric vehicles, Dan Levy, an auto analyst at Credit Suisse, wrote to clients Wednesday. He has a neutral rating on Tesla shares, which fell as much as 9.7 % after its battery day event disappointed some investors. The mere existence of the ID.4 in the U.S. will set it apart from the ID.3, which VW just started handing over to European customers this month. While the latter model won’t make it to American shores, VW will eventually produce the ID.4 on 3 continents, including at its Tennessee plant starting in 2022. The first ID.4s will be built in VW’s factory in Zwickau, Germany, which was making Golfs and Passats before the manufacturer began transitioning the facility entirely to EVs. It will eventually produce 6 different models and churn out as many as 330.000 cars a year. The price tag of the transformation is massive. The VW Group has said it plans to invest €33 billion by 2024, including €11 billion alone for the Volkswagen brand. The unit is targeting production of 1.5 million EVs a year in 2025. Volkswagen expects the ID.4 to offer about 400 km of range, on par with the base version of Tesla’s Model 3. American sales will start in the first quarter of next year. A more powerful all-wheeldrive version will arrive later in 2021 and VW will offer a cheaper iteration with a smaller battery once it starts production in Chattanooga, Tennessee. Keogh said the global volume VW is expecting for ID.4 (it will also sell in Europe and China) will make the model profitable. He declined to give a forecast for U.S. sales. “Our real goal is to drive adoption”, Keogh said. +++ 

+++ INDIA plans to offer $4.6 billion in incentives to companies setting up advanced battery manufacturing facilities as it seeks to promote the use of electric vehicles and cut down its dependence on oil, according to a government proposal. A proposal drafted by NITI Aayog, a federal think tank chaired by Prime Minister Narendra Modi, said India could slash its oil import bills by as much as $40 billion by 2030 if electric vehicles were widely adopted. The proposal is likely to be reviewed by Modi’s cabinet in the coming weeks, said a senior government official, who was not authorised to comment on the matter and declined to be identified. The think tank recommended incentives of $4.6 billion by 2030 for companies manufacturing advanced batteries, starting with cash and infrastructure incentives of 9 billion rupees ($122 million) in the next financial year which would then be ratcheted up annually. “Currently, the battery energy storage industry is at a very nascent stage in India with investors being a little apprehensive to invest in a sunrise industry”, the proposal said. India plans to retain its import tax rate of 5 % for certain types of batteries, including batteries for electric vehicles, until 2022, but will increase it to 15 % thereafter to promote local manufacturing, the document said. Though keen to reduce its oil dependence and cut down on pollution, India’s efforts to promote electric vehicles have been stymied by a lack of investment in manufacturing and infrastructure such as charging stations. Just 3.400 electric cars were sold in the world’s second-most populous nation during the last business year, compared to sales of 1.7 million conventional passenger cars. The policy could benefit battery makers such as South Korea’s LG Chem and Japan’s Panasonic as well as automakers which have started building EVs in India such as Tata Motors and Mahindra. While China accounts for 80 % of the world’s lithium-ion cell production, India has introduced stricter investment rules for Chinese companies. It has also slowed down the approval processs for some proposals after a deadly border clash between the 2 countries in June.The draft proposal said annual domestic demand for battery storage and market size (currently less than 50 gigawatt hours and worth just over to $2 billion) could grow to 230 gigawatt hours and more than $14 billion in ten years time. It did not offer an estimate of how many electric cars it expected to be on the road by 2030. The proposal estimates it would cost firms some $6 billion over 5 years to set up manufacturing facilities with the support of government subsidies. NITI Aayog has been the driver of several key India government policies including the planned privatisations of a swathe of state-owned companies. +++ 

+++ MITSUBISHI will seek voluntary retirement from 500 to 600 employees, mostly in management, in Japan from mid-November to cut costs, 2 sources familiar with the matter told. The auto company is expected to post a net loss of 360 billion yen in the financial year to March 2021, hurt by a plunge in sales due in part to the coronavirus pandemic. Mitsubishi has already embarked on a plan to cut 20 % of fixed costs in 2 years by shrinking its workforce and production and closing unprofitable dealerships. The company plans to solicit voluntary retirement from management employees aged 45 years and over in Japan at its headquarters and other sites, such as its Okazaki plant in Aichi prefecture and Mizushima plant in Okayama prefecture, the sources said. A spokesman for the company declined to comment. The coronavirus crisis has worsened conditions at the company, which is already battling falling sales in its largest markets of China and Southeast Asia, which account for a quarter of its sales. As part of its restructuring plan, Mitsubishi, a junior member of the Nissan-Renault automaking group, has said it would stop making the Pajero model next year and close the plant in Japan that makes the vehicle. +++ 

+++ General Motors and Bosch said they were sticking to their alliances with NIKOLA after the executive chairman of the electric and fuel cell truck startup stepped down amid allegations of fraud. Nikola founder Trevor Milton, whose company become a darling of the stock market over the summer, resigned as executive chairman following accusations by short-seller Hindenburg Research on September 10 that he made false claims about Nikola’s technology. Milton has fought back, even after the U.S. Securities and Exchange Commission and the Department of Justice said they were looking into the company. Nikola shares were down 20 % in trading and have lost more than 45 % of their value since September 8, when it announced an alliance to build electric and fuel cell trucks with GM. Nikola’s alliance with GM, and earlier partnerships to develop fuel cell and electric commercial trucks with Bosch and CNH Industrial’s Iveco unit are critical to the startup’s effort to regain traction. Nikola said board member Steve Girsky, a former GM vice chairman, would take over as chairman. Last week, Girsky defended the due diligence his firm, VectoIQ, did before it purchased Nikola in a reverse merger that took the startup public. GM has agreed to build an electric pickup for Nikola and supply batteries and hydrogen fuel cells for commercial trucks. In return, GM was supposed to receive an 11 % stake in Nikola and payments of up to $700 million for assembling the Badger pickup. “We will work with Nikola to close the transaction we announced nearly 2 weeks ago”, GM spokesman Jim Cain said in an email. “General Motors put no money into this thing so I’m not sure why GM is selling off today”, said Scott Schermerhorn, managing principal with Granite Investment Advisors. “I viewed the Nikola shares they were getting as a lottery ticket”. GM chief executive Mary Barra and company executives have stressed that the alliance with Nikola (which has acknowledged that a prototype truck shown moving in a 2017 video was not moving under its own power) made sense strategically. “Given that GM is now trading below where it was when the deal was announced, we would view it as a positive if GM and Nikola can still make this partnership work, and effectively a non-event for GM shareholders if the deal falls through”, said Tim Piechowski, portfolio manager with ACR Alpine Capital Research. However, Hindenburg Research founder Nathan Anderson said that Milton’s exit was “only the beginning of Nikola’s unraveling. General Motors should carefully evaluate the potential long-term damage to its 112 year brand by continuing to tie itself to Nikola”, Anderson wrote. Italy’s CNH Industrial declined to comment. CNH said last week it and Nikola were working to build prototypes of the startup’s Tre seimi-truck, and CNH aimed to start testing the trucks later this year with hopes to begin selling them by the 4th quarter of 2021. CNH invested $250 million in Nikola last September and owns about 7.11% of Nikola’s shares. Bosch, which has a stake in Nikola, declined to comment on Milton’s exit, but said it will continue to work with Nikola. The company referred questions about the size of its Nikola stake to the startup. “Bosch has been a supplier to Nikola for a number of years and invested in the company in its early financing rounds. We intend to continue working together with Nikola and remain in close contact with the company and its management”, Bosch said in a statement. +++ 

+++ NISSAN ‘s chief executive said he planned to launch a number of new vehicles in the growing Chinese market over the next 5 years, including electrical cars, that could help the struggling Japanese automaker return to profit. “The recovery in the Chinese market has been very remarkable, and our key segments have returned to the previous year’s level if not slightly better”, CEO Makoto Uchida said at a press conference at the Beijing auto show via a video link from Japan. “I expect this rebound to continue, but we need to watch for signs of trouble”, he added. Uchida and the company’s China boss, Shohei Yamazaki, said Nissan will launch 9 new and re-designed electric models in the world’s biggest auto market by 2025, including plug-in electric vehicles and hybrid electric cars that charge with a gasoline engine. Uchida’s remarks come as investors express concern about Japan’s second-largest carmaker, which has warned of a record $4.5 billion loss this year as the pandemic hampers its turnaround. Growth in China is a key part of Nissan’s effort to recover from rapid expansion that left it with dismal margins and an ageing portfolio that the automaker says is a result of a mismanagement by former boss Carlos Ghosn, who was arrested for financial misdeeds which he denies. Nissan has pledged to cut 300 billion yen ($2.84 billion)from annual fixed costs and focus on each of the company’s 3 biggest markets: China, the United States and Japan. Yet, while China’s automotive market continues to recover strongly, Nissan last month saw its business shrink 2.4 % after showing modest growth every month since April. That sales contraction was in stark contrast to Japanese rivals Toyota and Honda, which have both seen rapid sales growth since the pandemic’s effects began easing in China over the summer. In August, Toyota vehicles sales in China rose 27.2 % from last year, while Honda’s grew 19.7 %. To bolster its finances, Nissan this month said it plans to issue $8 billion in dollar-denominated bonds and is considering euro-denominated debt. The bond sale is its first dollar-denominated issuance since its tie-up with Renault in 1999, a Nissan representative said. A Nissan spokeswoman said some of that money would be used to repay other debt. “Although Nissan continues to have sufficient levels of liquidity, we are seeking to strengthen our liquidity position in order to ensure smooth implementation of our business transformation plan”, she said. +++ 

+++ POLESTAR , the performance electric vehicle maker based in Sweden and owned by China’s Geely, plans to double the number of showrooms in existing markets this year and expand to new countries in Asia and the Middle East, its CEO said. The automaker started producing its 2 sedan this year in China and sells them in China, Europe and the United States. It plans to expand its sales network and is looking at new markets in the Asia Pacific region and the Middle East, chief executive Thomas Ingenlath. Ingenlath is one of the few international executives to attend the Beijing auto show. He undertook a 14-day compulsory quarantine upon his arrival in China. Showroom strength is becoming an important differentiator for electric vehicle (EV) makers as they line up new model launches and Polestar’s sleek models are designed to take on rivals such as Tesla. “We will double the amount of spaces we have today by the end of the year. This number will continue to grow rapidly as we look to double the number of markets in the next 18-24 months”, Ingenlath said, referring to ‘Polestar Space’; the name it gives to its showrooms. Sources told in June that Polestar was planning to expend its showroom network in China as it ramps up sales of its 2 sedan. Polestar operates 23 showrooms globally at the moment and plans to have 45 by the end of this year. It currently sells cars in 9 countries. “From next year, we will look into new markets around Asia Pacific and Middle East”, Ingenlath said, without saying which countries it was targeting. The Polestar 2, which only has a dual motor variant, will offer a single electric motor option next year to make the model more affordable, Ingenlath said. Polestar is also planning to roll out a SUV, which will be made in a plant in China and have a different underpinning architecture than the Polestar 2, he said. The company, which is targeting annual sales of more than 50.000 within 2 to 3 years, will definitely “stay and remain a premium brand”, Ingenlath said. He said it will have bigger and more sporty products in future but will not change its prices radically or frequently. Polestar plans to build its Precept electric sedan (photo) in China at a new factory. +++ 

+++ PSA has offered to boost rival Toyota to try to address EU antitrust concerns about its plan to create the world’s 4th biggest carmaker with Fiat Chrysler Automobiles (FCA), people familiar with the matter said. PSA has offered to increase the production capacity for Toyota in their van joint venture, one of the sources said. Another source said the French company would sell the vans at close to cost price. PSA makes vans for Toyota in its Sevelnord plant in northern France. The van collaboration started in 2012. PSA submitted its offer to the European Commission, 3 months after the EU enforcer opened a full-scale investigation into the deal with FCA on concerns that it would hurt competition in small vans in 14 European countries and Britain. “As of now, the transaction has obtained merger clearance in 14 jurisdictions. As previously stated, closing of the transaction is expected to occur in the first quarter of 2021”, PSA and FCA said in a joint statement. The Commission, which temporarily halted its investigation into the deal in July while waiting for the companies to provide requested data, did not set a deadline for its decision. “The deadline is still suspended. This procedure in merger investigations is activated if the parties fail to provide, in a timely fashion, an important piece of information that the Commission has requested from them”, the EU executive said. It is now expected to seek feedback from customers and rivals before deciding whether to demand more concessions, or either clear or block the deal. +++ 

+++ RENAULT Samsung Motors’ XM3, which is assembled at the carmaker’s Busan plant, will be exported to global markets including Europe from next year. The XM3 model, which will be called Arkana in Europe, has been developed and manufactured by the Korean arm of the Renault-Nissan Alliance. Plans to build the Arkana in Spain, in the same factory as the Captur, have been cancelled due to cost issues. It remains to be seen how popular the SUV Coupe will become in France now it is labelled as an Asian product. +++ 

+++ The trend of having more and more intelligent vehicles is making automotive SOFTWARE the new territory for future industrial competition, a business insider said. “Software plays an increasingly important role for car makers and suppliers as their vehicles become more automated and connected”, said Zou Lujun, vice-president and managing director of Elektrobit in China, a global supplier of embedded and connected software products for the automotive industry. According to Zou, the development of software is rapidly reshaping the automotive industry as a whole, and the weighing of software in a vehicle is rising considerably. It is projected the value of software will rise from about 10 % of the total vehicle for the moment to 40 % by 2025, with more hardware being replaced by software. As Baidu, Alibaba Group Holding and Tencent Holdings are making their forays into the automotive sector, conventional auto makers are also actively strengthening their capabilities in software, Zou added. A McKinsey report suggested China has the potential to become the world’s largest market for autonomous vehicles. The sector may generate $1.1 trillion from mobility services and $0.9 trillion from sales of autonomous vehicles by 2040. +++ 

+++ The advanced battery cell design and new manufacturing processes outlined by TESLA boss Elon Musk are promising, battery experts say, but they questioned how quickly they can be implemented and how much they’ll contribute to reducing overall costs. Tesla’s new battery cell (a larger cylindrical format called 4680 that can store more energy and is easier to make) is key to achieving the goal of cutting battery costs in half and ramping up battery production nearly 100-fold by 2030. “We’re not getting into the cell business just for the hell of it, it’s because it’s the fundamental constraint” to eventually producing 20 million vehicles a year, Musk said in a “Battery Day” presentation that disappointed investors. Following are comments from battery experts on Musk’s plans: Gene Berdichevsky, CEO and co-founder of battery materials manufacturer Sila Nanotechnologies and a former Tesla battery systems architect: “The most concrete, most tangible and maybe the most impactful thing is the new cell design. That’s a really good design, leading to lower manufacturing costs at the cell level. The hardest thing ever isn’t making it (the cell), the hardest thing is manufacturing it at scale”. Shirley Meng, a professor at the University of California San Diego: “Most of the claims were expected, like the 4680 format, the tabless design, the silicon anode, the diversified cathode choices. I was caught by surprise by the cathode manufacturing process and the new aluminum-based alloys”. Gary Koenig, an associate professor at the University of Virginia: “It seems like often people are looking for a new type of battery, but changing things like form factor can make a big difference, and a lot of the Battery Day discussion mentioned those advances. Making processing easier and faster, and even successfully making the (battery) wider or electrodes thicker, can make relatively big improvements at the larger pack level. As Musk mentioned, battery electrode processing involves adding and later removing solvent, so it seems intuitively like there should be a way to cut out that step. The solvent addition really helps to blend the multiple desired components, so getting good adhesion and mixing without the solvent I expect to be challenging”. +++ 

+++ China’s electric vehicle startups are on the charge again, THANKS TO TESLA . The country’s growing fascination with the U.S. pioneer’s sleek designs and cutting-edge technology is giving a string of second-wave home-grown Tesla wannabes the traction to raise more funding, expand production and boost sales. Chinese EV startups NIO, XPeng, Li Auto and WM Motor have raised more than $8 billion between them this year and now rival Aiways is planning to go public, its co-founder and president Fu Qiang told. Speaking ahead of the Beijing auto show, Fu said the relative success of U.S. initial public offerings (IPO) by XPeng and Li Auto had helped fuel the company’s ambitions to list. Since it was founded in 2017 in Shanghai, Aiways has raised “no more than 10 billion yuan” and it will need to secure more funding from some private equity funds and other investors, said Fu, the former head of Volvo China who has also been an executive at Mercedes-Benz, FAW-Volkswagen and Skoda. “IPO is also in our plans, and we’re planning to push ahead with it”, Fu said, adding that Aiways would most likely be listed within China, declining to elaborate further. China has been the world’s fastest-growing EV market for years helped by generous state purchase subsidies but the sales boom started to sputter last year as Beijing began cutting back financial support and watering down other pro-EV policies. Some prominent Chinese EV startups such as Byton and Singulato have struggled and NIO’s future looked in doubt last year. But a surge in Tesla’s market value (and its sales in China) suggest the country’s EV dream is far from over. “As Tesla stock goes, so goes the fate for electric vehicle startups”, said China auto expert Mike Dunne. “Funds are flowing like a river in spring again. Tesla could end up pulling everyone into the future sooner than expected”. Tesla’s sales in China in the first 8 months of 2020 have nearly tripled from a year ago to 73.658 cars, according to consulting firm LMC Automotive, despite the disruption caused by the Covid-19 pandemic. Some Chinese auto executives say cars made by the company from Palo Alto, California are achieving the status of Apple’s first iPhones in China and with so many potential technological advances still to come, that gives them hope. Fu believes the revived interest in EVs in China is partly because EV owners are fascinated by intelligent driving functions, as well as the interactive, so-called connected services that many newer models are starting to come with. “Today’s smart, connected cars aren’t that smart. We’re just out of the gate and are in a stage that could be described as iPhone 1 or the original iPhone”, Aiways president Fu said. “As that gets developed step-by-step, in the near future we will get to iPhone 8, iPhone 9 and iPhone 10”. Dunne, too, said Tesla was the primary factor sustaining interest in EVs among consumers and investors in China and elsewhere in the world. Tesla’s shares have surged 10-fold over the past 12 months and it became the world’s most valuable car company in July. And cheaper running costs are also a significant factor. Cui Yihua, who sells aquariums in the eastern city of Suzhou, Jiangsu province, switched from his gas-guzzling Audi Q7 to save cash and chose an electric-blue Aiways U5 (photo) after also test-driving a Tesla Model 3, saying he liked the U5’s interior design, its colour and extra space. “I have charging facilities in my housing compound, in the parking garage downstairs. I put a 100-yuan deposit down for charging and I’ve been using it for 2 weeks”, he said. “It’s negligible compared to gasoline-fueled cars”. Automakers in China that were part of the initial wave of EV startups sold or leased many of their cars to drivers working for ride-hailing firm Didi Chuxing and rival taxi services who were spurred on by rebates and other policy support for EVs. Now, Fu and NIO co-founder and chief executive William Li believe China’s EV marketplace is driven more by private car owners and their pure interest in electric cars. That’s most evident in the performance of Tesla’s Model 3, which is perceived by many consumers as fairly affordable at about 270,000 yuan ($39,750) after purchase subsidies. Credit also goes to Wuling, a General Motors joint venture, whose Hongguang Mini EV has become China’s bestselling electric car this year, in part because its cheapest model sells for just 28,800 yuan. To be sure, some companies hit hard by the initial slowdown in EV sales are still in limbo. Byton has suspended its business for 6 months through January and is working on a restructuring of its operations, a spokeswoman said. Singulato, meanwhile, is operating on a limited capacity and is looking for further funding to finish developing two cars and launch them, a senior company source told. But executives say raising funds has become markedly easier this year, and their confidence levels are climbing too. NIO, for example, has raised $3.8 billion this year to get back on track, mostly through state-affiliated funds in the eastern Chinese province of Anhui, and also with commercial paper and additional shares, its spokesman said. WM Motor, backed by China’s most widely used internet search engine Baidu, raised $1.5 billion this week. XPeng and Li Auto raised $1.5 billion and $1.1 billion respectively through U.S. listings in July and August. While sales of what China defines as new energy vehicles (NEV; all-electric cars, plug-in electric hybrids and hydrogen fuel-cell vehicles) started to contract more than a year ago, they jumped 26 % in August after a 19.3 % rise in July, which ended 12 months of year-on-year declines. LMC Automotive expects sales of passenger NEVs to fall 8.9 % this year but surge 48.4 % in 2021 to hit 1.52 million vehicles, or 7 % of expected passenger car sales. LMC’s Shanghai-based analyst Alan Kang expects NEV sales to accelerate mainly because Beijing recently enacted tougher green-car quotas for carmakers. Fu said sales of the Aiways U5, its first model, have gained momentum since April to surpass 1.400 in the 3 months through August, when it also unveiled its sportier U6 ion. Within a year, he thinks Aiways could reach sales of 10.000 cars in China, with another 3.000 from Europe, where it has started selling in Germany. It plans to expend into Belgium, Denmark, France, the Netherlands, Norway and Switzerland. In NIO’s case, sales of its ES8 and ES6 models zoomed to 10.331 vehicles in the second quarter, half of its 2019 sales and almost matching sales of 11.348 for all of 2018, when only its 7-seater ES8 was on offer. NIO’s overall gross margin turned positive in the second quarter and hit 9.7 % for vehicle sales. Operating losses shrank nearly 65 % from a year earlier to 1.1 billion yuan. “We think we have decisively overcome the difficulties of last year”, chief executive Li, who says he still flies economy to save the company money, told. “Demand is really strong. If you place an order with us right now you will need to wait for a really long time to pick up your new car”, Li said. “Our main challenge in the fourth quarter is to improve our production capability”. +++ 

+++ German prosecutors said they had charged another 8 employees of VOLKSWAGEN over the scandal surrounding cheating on diesel engine emission tests. The 8 are accused of fraud, false certification and violation of the law against unfair competition, the prosecutor’s office in the northern town of Braunschweig said in a statement. Some are also alleged to be responsible for embezzlement and tax evasion, or for aiding and abetting those crimes. Volkswagen admitted in September 2015 to having used illegal engine control software to cheat U.S. pollution tests, triggering a global backlash against diesel and costing the carmaker billions of euros in fines. The 8 are accused of being involved in the diesel manipulation between November 2006 and September 2015. The are accused of encouraging, supporting or at least not preventing the installation of illegal software in the engine management system of diesel vehicles produced by Volkswagen despite knowing it was illegal. The same charges were already brought against 6 other managers earlier this year, while former Volkswagen boss Martin Winterkorn and 4 other managers were charged in connection with the scandal last year. The first trial in the Volkswagen case in Germany starts next week: that of former Audi chief executive Rupert Stadler. +++ 

+++ VOLVO expects to hit its forecast of roughly flat sales year-on-year in the second half of 2020 even as a recent a surge in cases across Europe makes the outlook more uncertain, chief executive Håkan Samuelsson told. Volvo, bought by China’s Geely Holding in 2010, has repositioned itself during Samuelsson’s tenure as a premium carmaker with a range of popular SUVs, taking on far larger rivals such as BMW and Mercedes. It notched a 6th straight annual sales record in 2019, of more than 700.000 cars, and while hit by the pandemic earlier this year has seen a sharp rebound in recent months, helped by strength in China and the United States. “We have a second wave in Europe which is making the outlook a bit more uncertain, but July and August started very well, and for September we are roughly on the same level as last year”, Samuelsson told. “For the rest of the year I would say our base case is still to be back roughly at where we were last year”. Samuelsson said Volvo had available production capacity at its U.S. plant and in China, while its European factories in Gothenburg, Sweden, and Ghent, Belgium, were running at full capacity. Earlier this year the group unveiled plans for a merger with its sister company Geely Automobile, but talks are on hold as Geely works to list its shares on China’s Nasdaq-like STAR board. Samuelsson, 69, a former executive at truckmakers Scania and MAN, said Volvo was working on the matter internally and expected to announce news on the way forward before year-end. “Volvo’s Swedish and Geely’s Chinese, and if we do something together it has to be a strong global internationally governed group, with an international management and board”, he said. “The question is how we should solve that. There are different models for securing the synergies that by the end of the day are the main reason for this”. Volvo, which aims for half the cars it sells to be fully electric by 2025 and plans to separate its combustion engine business into a standalone unit, will start production of its first fully electric car, the XC40 Recharge P8, this month. After that, it plans to launch one new fully electric car per year. “I think the timing is perfect”, Samuelsson said. “The pandemic has clearly accelerated the transformation to electric, and we are more committed than ever to go in that direction”. +++ 

+++ A court in Braunschweig, Germany, said it had opened proceedings against former Volkswagen boss Martin WINTERKORN , examining whether he is guilty of market manipulation as part of the carmaker’s emissions scandal. Winterkorn and other Volkswagen executives face charges for their role in allowing diesel cars with excessive pollution levels to hit the road, and for allegedly failing to inform investors adequately about the extent of the emissions fraud. The carmaker has paid out more than €30 billion in fines and penalties for cheating emissions tests, which was uncovered by U.S. authorities in September 2015. The court is examining whether Volkswagen had a duty to inform investors earlier about the size of potential fines. Volkswagen has said the level of the fines was not foreseeable. A spokesman for the carmaker reiterated the company had fulfilled all disclosure requirements related to the diesel scandal. Felix Dörr, a lawyer for Winterkorn, said his client rejects the allegations that he failed in his duty to inform markets in a timely fashion. +++

 

 

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