Newsflash: Volvo bevestigt komst nieuw instapmodel

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+++ FORD expects 40 % of its global sales to be battery electric vehicles by 2030 as it adds billions to what it’s spending to develop them. The automaker said in a presentation for investors last week that it will add about $8 billion to its EV development spending from this year to 2025.That brings the total spend to nearly $30 billion as Ford begins to develop and build batteries in a joint venture with SK Innovation of South Korea. Under former CEO Jim Hackett, Ford was criticized by analysts for moving too slowly on its turnaround and future vehicle plans. But those plans have accelerated under CEO Jim Farley, who took in October. “Today is show, not tell time, for the Ford team”, Farley said at the start of the presentation. Ford announced 2 new electric vehicle platforms for pickups, commercial vehicles and SUVs such as the Explorer. It also said smaller vehicles in Europe would be built on underpinnings from Ford’s partner Volkswagen. But company executives wouldn’t say when the new electric vehicles will go on sale. Much of the 40 % target of electric-vehicle sales will come from Europe. There the company has pledged to convert its entire passenger vehicle lineup to electric power by 2030. The global auto industry and government policymakers are trying to pivot away from internal combustion to battery power to curb climate change. Some European countries, as well as the US state of California, plan to phase out petroleum-powered vehicles. Meanwhile, US President Joe Biden is promising to spend billions on building charging stations as well as offering tax credits and rebates to get people to switch. Ford rival General Motors says it hopes to stop selling combustion vehicles by 2035. In addition, shareholders at Exxon Mobil voted last week to replace at least 2 of the company’s 12 board members with directors who are seen as better suited to fight climate change. Farley said Ford’s financial performance hasn’t been acceptable in recent years. But it has accelerated its turnaround plan and made progress in the past few quarters. The company is now generating cash flow so it can grow the scale of its electric and commercial vehicle businesses, he said. Ford predicted it would post an 8 % pretax profit margin in 2023. The company also announced it would create a separate business called Ford Pro. It will focus on commercial and government fleet buyers. It expects the business to generate $45 billion in annual revenue by 2025, up from $27 billion in 2019. Ford expects to have about 1 million vehicles capable of getting over-the-internet software updates by the end of this year. It says it will have more vehicles with that capability than Tesla by July 2022. This opens up the chance of added revenue through driver-assist technology and digital subscription services, a market thought to be worth $20 billion by 2030, Ford said. In the United States, Ford’s largest market, electric vehicles only made 1.2 % of Ford’s sales in April. Ford currently offers only one all-electric vehicle, the Mustang Mach-E. But by spring it will have an all-electric F-150 pickup and a battery powered Transit commercial van on the roads. The company said 70.000 customers have put down $100 deposits to reserve an electric F-150 in the week since it was unveiled. Ford’s F-Series pickup is the top-selling vehicle in the US. Ford said it plans a new rear-drive and all-wheel-drive electric vehicle architecture to serve a new generation of high-sales vehicles. They include an electric Ford Explorer and other large SUVs with 2 and 3 rows of seats. The company also plans additional cargo vans and pickup trucks from the new architecture. It expects one-third of pickup truck sales to be fully electric by 2030, said Hau Thai-Tang, the company’s product development chief. Chief operating officer Lisa Drake said that by making electric versions of its topselling brands (the Mustang, F-150 and Transit Van) Ford can bring bulk purchasing power to EVs that smaller startups cannot. She said 70 % of Mustang Mach-E electric SUV buyers came from owning other auto brands, proving that EVs will help Ford increase its sales. Ford, she said, expects to reduce battery costs from the current $140 per kilowatt-hour to under $100 by 2025, and $80 by the end of this decade. +++

+++ HYUNDAI sold its first factory in China, which once symbolized its aggressive expansion into the market, after years of sales held hostage by geopolitics. The automaker agreed to sell its Plant 1 in Beijing to the government of Shunyi District, a satellite city of Beijing, according to industry sources and multiple media reports both in Korea and China. “It is true that Hyundai is pushing to sell the Beijing factory to the Shunyi District government”, said an industry source with knowledge of the sale. Plant 1 was Hyundai’s first manufacturing unit in China. Built in 2002, the year the company entered the Chinese market, it primarily built Sonata and Avante models. It had an annual capacity of 300.000 units. After it, Hyundai built 4 more factories: 3 in Beijing and 1 in Chongqing. Plant 1 went idle in 2019 as demand for Hyundai branded cars withered following controversy over South Korea’s allowing of the deployment of America’s Terminal High Altitude Area Defense (THAAD) missile system in 2016. Beijing took economic retaliations, including calling for a boycott of Korean goods. Before the dispute, Hyundai became a mainstream brand in China with its factories producing over 1 million units yearly in the late-2000s through the mid-2010s. From 2010 to 2016, Hyundai sold over 1 million cars every year. That number dipped to 785.006 in 2017 and 441.000 last year. Hyundai suffered an operating loss of 1.2 trillion won in China last year, up 120 % from the previous year, while sales contracted 32.7 % to 6.9 trillion won. Its market share was 2.6 % between January and April, according to the China Association of Automobile Manufacturers. In its heyday in 2005, Hyundai claimed 10 % market share. With dwindling sales, Hyundai has shifted strategy in China to position itself as a premium brand by releasing its high-end Genesis lines this year. The carmaker adjusted the models sold there to bigger SUVs from sedans. The Shunyi District government will reportedly rent the factory to Chinese electric vehicle (EV) startup Li Auto, which will invest 1 trillion won to turn it into its production base. +++

+++ The HYUNDAI MOTOR GROUP ‘s eco-friendly vehicle exports jumped 46.6 % in the first 4 months of this year compared with a year earlier, led by robust demand for its electric vehicle (EVs) and hybrid models, industry data showed. The combined exports of eco-friendly models by the Korean automotive group’s 2 affiliates (Hyundai and Kia) stood at 118.321 units in the January-April period, up from 80.689 units a year ago, according to the data by the Korean Automobile Manufacturers Association (KAMA). Eco-friendly models include battery-electric, hydrogen fuel cell and hybrid cars, which uses a combination of an internal combustion engine and a battery electric drive motor. Hyundai shipped 65.909 units over the cited period as it released a wider range of hybrid variants in overseas markets earlier this year. The automaker offers hybrid models for the Kona, Tuscon and Santa Fe SUVs, as well as the Ioniq, Sonata and Avante sedans, and its EV lineup includes the Ioniq 5, Kona and Ioniq liftback. A total of 3.091 Ioniq 5 cars, Hyundai’s all-electric equipped with its dedicated platform, have been sold since its launch in the European market last month. Its fuel cell electric vehicle Nexo sold 526 units over the period, up 39.5 % from a year earlier. Kia exported 52.412 units in the first 4 months the year, with sales of the e-Niro more than doubling to 19.787 units from a year earlier, data showed. +++

+++ Proposals from the European Union for new Euro 7 emissions legislation could kill off INTERNAL COMBUSTION ENGINE (ICE) cars by 2026; years before sales of new ones will be banned in various countries, according to the European Automobile Manufacturers Association (ACEA). The first concrete proposals for the Euro 7 laws, which are due to come into force in 2025, were made in October last year by the European Commission’s Consortium for Ultra Low Vehicle Emissions (Clove) of engineering consultants. “The ACEA believes that the emission limit scenarios presented by Clove, coupled with the suggested new testing conditions, would in practice result in a situation very similar to a ban of vehicles powered by an internal combustion engine, including hybrid electric vehicles”, the trade body said in December. Even with modifications, Clove’s stringent proposals for Euro 7 have the potential to make many smaller, affordable ICE cars economically unviable for continued production. They could also put high-performance cars under serious threat, because of the need for engines to emit as little pollution as possible, even under hard acceleration. As a result, all strenuous driving scenarios, including towing a caravan, could be difficult with a Euro 7 car. According to Clove’s published proposals, future ICE vehicles could be fitted with a multi-stage ‘supercatalyst’. For petrol engines, this would comprise a heated electric catalyst, a pair of 1.0-litre conventional three-way catalysts, a 2.0-litre particulate filter and an ammonia slip catalyst. Clove claimed this huge technical leap represents “moving towards zero-impact after-treatment”. However, the ACEA argues that the installation of such a large and expensive device would be close to impossible in a small car and very difficult to integrate into many existing vehicle architectures, while driving up showroom prices. Another significant and costly proposal is for Euro 7 cars to be fitted with a sophisticated on-board diagnostics system that would monitor the engine to ensure that it remains emissions-compliant for 240.000 km. Some car industry insiders believe the proposals also have an underlying aim in pushing more EU motorists into electric cars by making ICE cars either much more expensive or unable to meet the pollution requirements, as well as driving the heavy goods vehicle market towards electric propulsion. Clove’s paper suggests two possible new emission scenarios, the more extreme of which is below even the real-world emissions of the latest Euro 6d and RDE (Real Driving Emissions) compliant engines. And according to Clove’s own calculations, today’s Euro 6d vehicles are well under the current RDE pollution limits in normal driving conditions. Clove wants the limits for all types of pollutants, including NOx, CO, particulate matter, ammonia, methane and NO2 (the last three being additions to the list of measured pollutants), to be the lowest in the world. Notably, these new limits would be applicable in all driving scenarios, including immediately after a cold start, in stop-start traffic, under hard acceleration, driving uphill and when towing a trailer. The current Euro 6d emissions regulations conversely have allowances for such extreme driving situations (known as boundary conditions), which make up only a tiny proportion of a vehicle’s working life. The ACEA’s negative response to the Clove paper centres on this attempt to slash ICE vehicles’ emissions in all driving scenarios. It argues that the proposals “would mean vehicles being tested in a completely unrepresentative way that would combine all of the worst cases (for example, a fully loaded car going uphill at high altitude under low ambient temperature in an aggressive driving style)”. The ACEA has also strongly pushed back on the new pollution limits. It argues they’re so low that the portable emission measurement systems (Pems) attached to cars in real-world testing would have a great deal of difficulty measuring them accurately. The upshot, it claims, is that Pems would have to give more accurate results than even laboratory tests. However, Clove member Jon Andersson (global technical expert, emissions measurement and standards, at engineering consultancy Ricardo) told that the issue of emissions measurement is under review. He said: “On the Pems side, I think it’s reasonable to say that final Euro 7 limits would be set after considering the capabilities of the measurement systems and not independently”. On the issue of the aforementioned super-cats, the ACEA is equally unconvinced. “Technical solutions designed to meet, or intended to meet, the proposed extremely low limit values for NOx, combined with very stringent limitations of NO2 and NH3 [ammonia] , will be very costly and massively complicated”, it said. “To drive the technology requirements to this point will severely limit the possibilities for CO2 and fuel consumption reduction and have significant uncertainties on durability and operating costs over the vehicle lifetime”. The European Commission has already received feedback and criticism on the Clove proposals from a wide range of bodies, including the City of Amsterdam, the European Caravan Federation, the Austrian Federal Economic Chamber, the Swiss Federal Office for the Environment and components giant Bosch. Much of the feedback suggests that far tighter particulate rules are a moot point because, already with the Euro 6d engine rules, the majority of particle emissions come from brakes and tyres. +++

+++ Cars are about to get a lot MORE EXPENSIVE. Manufacturers and drivers should brace themselves. The price of everything that goes into a vehicle is going up. Raw materials (from the steel used for bodies, gear parts and frames to the plastic that winds up in bumpers and doors trims) account for a big portion of manufacturing costs. These are only growing. Add to that labor, logistics, the pressure to invest in new technologies and creeping inflation, and carmakers are seeing a very different landscape from the relatively profit-friendly market they have enjoyed over the past few months. Part of  what has been helping the auto industry is its scaled-back production. Despite all the complaining about shortages of various parts, including chips, carmakers have kept their shareholders happy. They’ve been smart and uncharacteristically nimble about leveraging broader economic imbalances. Despite plant shutdowns, manufacturers across the globe posted blowout results in the first quarter. They’ve made fewer, arguably better, vehicles and have pushed margins higher. But when carmakers start consistently talking about lower production, it should be a worrying sign. In the latest set of results, auto giants including the world’s largest, Toyota and Ford, said they will produce far fewer vehicles this year because of  a worsening chip shortage. The shortfall alone is expected to result in almost 4 million fewer units, or 5% of estimated annual sales this year. For automakers, this dynamic (of rising expenses and falling volumes) can become problematic all too quickly. That’s because the car industry has high fixed costs to begin with. Firms need to make a certain amount to break even. If production starts dropping quickly, then the cost pressure builds even faster and affects earnings disproportionately. Consider a car manufacturer with $100 billion in sales. A 10 % decline in sales volume would push earnings before interest and tax down by 40 %, the Boston Consulting Group has estimated. That’s an optimistic scenario, and this analysis assumed the company could eliminate all variable costs such as raw materials and labor. In the current situation, that’s not quite possible. No doubt, carmakers could digest the rising cost of production a bit longer by reducing incentives and discounts they’ve used to lure buyers. But that’s already been happening in the world’s largest auto markets, the U.S. and China, and you can’t trim back enticements forever. Companies have few options to offset creeping manufacturing expenses. With prices already high, consumers aren’t going to be as liberal with their wallets. So far, they have been willing to accept a 12 % premium, or around $5,000 over the sticker price, according to Kelley Blue Book and Cox Automotive. But a U.S. vehicle affordability index has started ticking down, signaling people are beginning to think twice before splashing out. Almost 40 % of those who were going to buy cars have now put off their purchases. If sales start slowing as prices tick up further, automakers risk not being able to make the margins they have raked in over the past few months. However, if they don’t raise prices and production volume continues to go lower, they end up in the same place. Consumers could be forced to choose between an expensive ride or none at all. Even used car prices are surging. Those are in short supply, too. The auto industry has some introspection to do. Short-term fixes won’t cut it, especially as the road ahead looks rough. +++

+++ A century after automakers showed the world the value of assembly-line manufacturing, a SHORTAGE OF SEMI CONDUCTORS is teaching the industry a painful new lesson in what it takes to build a car. For most of its history, the industry has relied on a distinct approach to buying car parts, procuring components from suppliers right at the moment they’re needed. It’s referred to as just-in-time manufacturing and is designed to streamline production and eliminate the costs of keeping warehouses stocked with parts waiting to be used. But the shortcomings of that system were made starkly clear this year as the automakers confronted a dearth of the chips they need to build advanced functions into their vehicles, and found themselves near the bottom of chipmakers’ customer lists because of their just-in-time approach. That shortage is threatening to cut $110 billion in sales from the industry, and forcing auto manufacturers to overhaul the way they get the electronic components that have become critical to contemporary car design. “Customers need to change”, said Hassane El-Khoury, chief executive officer of ON Semiconductor Corp., which gets more than a third of its revenue from the automotive market. “That just-in-time mindset doesn’t work”. Semiconductor makers are demanding guaranteed, long-term orders rather than the short-term flexibility the carmakers are used to. The assertiveness of the chipmakers, even under pressure from lawmakers, underscores the rebalancing of power from the companies whose logos are on the cars to those that provide the advanced technology that runs them. As these components play a bigger role in everything from in-car entertainment to self-driving functions, chip manufacturers say they’re willing to invest in expanding production to head off a repeat of shortages that have forced the industry to mothball factories and furlough workers, if the carmakers give them orders that can’t be canceled and commit to long-term agreements. “Why would I have invested a single dollar when my customer can cancel within 30 days and it takes me 2 years to build capacity?” ON Semiconductor’s El-Khoury said. There are signs the industry is listening. Last week, Ford chief executive officer Jim Farley indicated a new willingness to reverse decades of outsourcing for parts. “As the industry changes, we have to in-source now, just like we in-sourced powertrains in the ’20s and ’30s”, said Farley, who has shut down half his factories and seen his dealers’ lots emptying because of a dearth of chips. Most components used by the auto industry are part of a discrete food chain, and carmakers are at the top, able to orchestrate their suppliers’ actions in a system that delivers them a set of components that can be put together quickly and cheaply into a finished vehicle. Electronics-makers, who have fared much better in the chip supply crunch, regard semiconductors as essential systems, and they work directly with chipmakers to secure products and often design their devices around the chips themselves. Automakers can no longer “assume the dominance of an 800-pound gorilla” in negotiations with chip companies and battery makers, said Mark Wakefield, head of the auto practice at consultancy AlixParters. Pioneered by Toyota in the 1960s, just-in-time is a system where components suppliers are required to turn up with whatever the carmakers want at the last possible moment in a process that pares costs to the very minimum. That strategy has served the industry well, saving money and helping it organize a system for sourcing the 40.000 or so components that go into a modern vehicle, many of which can be made in a matter of days. But semiconductors (the heart of sensors, engine management and battery controllers, infotainment and eventually systems that will pilot vehicles) are created in a process that takes months. And building and equipping a factory to produce them requires years. Today’s cars contain an average of 1,400 semiconductors, and that puts the chipmakers at an advantage. Ford’s Farley said he’s now negotiating contracts directly with chipmakers (bypassing his traditional auto suppliers) while building up inventory of the precious pieces and even redesigning models to accommodate the semiconductor companies. “We have learned a lot through”.

 +++ TOYOTA said its global sales in April doubled from a year earlier to 859.448 units, a record-high for the month, as auto demand continues to recover from a slump caused by the coronavirus pandemic. Toyota also doubled global output from a year earlier to 761.459 units, as the Japanese automaker has seen robust demand in China and the United States despite a global semiconductor shortage that has hit the auto industry. Both sales and production rose for the eighth straight month. The major Japanese automaker has weathered the impact of the pandemic well compared with its domestic rivals, though uncertainty remains over the outlook due to the pandemic and the global chip shortage. Toyota reported a 2.3-fold increase in overseas sales to 735.431 units, the largest-ever for April, buoyed by brisk sales of sport utility vehicles in the United States and luxurious Lexus brand cars in China. In its home market Japan, sales, including minivehicles, rose 27.1 % from a year earlier to 124.017 units thanks to the popularity of the Harrier (a SUV) and Yaris. Overseas output marked a 3.1-fold increase to 493.854 units, a year after production was partly suspended in North America and Europe. In Japan, 267.605 units were churned out in April; up 22.7 %, Toyota said. The global chip crunch since late last year has forced automakers to cut production. But Toyota has been relatively unscathed compared with its competitors such as Nissan, which expects a production cut of around 250.000 units in the business year through next March. Still, Toyota has announced a plan to suspend operations at two plants in Japan for up to eight days in June, which will likely reduce output by 20.000 units amid the shortage of semiconductors. +++

+++ VOLVO is working on another new SUV. The new baby SUV will sit below the XC40 and C40 and will be electric. The brand is well aware that, in the current market landscape, coupes only sell if they’re also SUVs. That’s why it’s coupe-fied the XC40 with the new C40. Same story with a supermini. So, given the marque wants to enter the B-segment, it’ll have to do so with a cute SUV. This baby SUV is expected to be electric-only from its launch, with either XC20 or XC30 badging, in order to be in line with the brand’s plan to be fully-electric by 2030. That makes sense, as Volvo already has a solid base for its electric cars, first seen on the XC40 Recharge P8. With this new small SUV, designed to compete with the DS 3 Crossback E-Tense, Opel e-Mokka e and Peugeot e-2008, expect it to have just 1 e-motor for front-wheel drive (unlike the XC40 and C40). As for range, Henrik Green, Volvo’s chief technical officer, is frustrated by current battery constraints, but knows that subsequent over-the-air updates, similar to Tesla, can eke out more miles. “We’ll need fewer saloon and estate variants”, says Volvo boss Håkan Samuelsson, “we’ll still have them, but probably not as many, with more SUV models instead. We need to expand even more there, and we’re planning something smaller even than the 40 Series”. Other details from Volvo’s larger cars are expected to be carried across. Along with new digital dials like the C40, Volvo is rolling out its Google-based Android OS infotainment to more of its models. The new XC90, likely a year or so away from debut, will take this path, as will the new baby SUV. Volvo’s also made a big fuss about its ‘Care by Volvo’ subscription service in the past couple of years, which will apply to every new EV. Like the C40, there’ll be demos to test at a dealer, but you’ll order your car online, regardless of whether you’re buying or subscribing. Stay tuned for more details as I get them. +++

 

 

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