+++ AUDI is considering investments in clean energy for sites in China, where the luxury car-maker is struggling to source enough power from renewable sources to churn out hundreds of thousands of vehicles each year. Volkswagen’s key earnings contributor has pledged to make its production network carbon-neutral by 2025, and has already moved plants in Belgium and Hungary onto a net-zero footprint. The task is more complex elsewhere, and particularly in China where fossil fuels remain a dominant source of power supply. “China is the most difficult market to precisely forecast the tipping point toward electric vehicles, partly because of the availability of green energy sources in some regions”, chief financial officer Jürgen Rittersberger said in an interview. Audi may move to “investing in green energy ourselves at some locations”. The move would echo efforts by peers like China’s biggest private carmaker Zhejiang Geely Holding Group, which plans to install photovoltaic cells on the roofs of all of its factories within 2 years. China, the world’s largest auto market, still relies on fossil fuels but is investing heavily in energy transition with $266 billion spent last year on the deployment of low-carbon technologies. That’s more than a third of the record global total of $755 billion. Audi, which produces around 1.8 million cars a year, operates 4 plants in China that make about 600.000 vehicles annually as well as roughly 270.000 gearboxes. Its main location is in Changchun in Jilin province in northern China. As carmakers shift their lineups to battery cars to reduce emissions, a vehicle’s green credentials are coming under scrutiny. Relying on fossil fuels to make and charge an EV battery eradicates much of the emissions advantage of an electric car. Traditional manufacturers are facing the challenge of stepping up plans to replace gas-guzzlers with electric models that still generate lower profits than combustion-engine vehicles. After a bumpy start, Audi stepped up its game with the Audi e-Tron GT sportscar and the more affordable Q4 e-Tron, which competes with Tesla’s Model Y. The vehicles share VW’s mass-market EV technology to save costs. Audi will flank the Q4 e-Tron with the mid-sized Q6 e-Tron crossover next year that introduces new underpinnings for upscale EVs, which will also serve as a basis for an all-electric version of sister brand Porsche’s Macan SUV. The technology is set to be deployed in a new venture China from 2024, pending regulatory approval. “Strategically our focus is clearly on fully-electric cars”, Rittersberger said. “We see hybrids as a bridge technology”. The Audi CFO declined to comment on plans to enter Formula 1 racing, including a possible tie-up with British sportscar-maker McLaren Group. “Motorsport is always a topic at Audi”, he said. “It’s a catalyst to test new technologies”. +++
+++ The FISKER Ocean electric SUV will make its European debut to the public at the Mobile World Congress in Barcelona from 28 February to 3 March, with prices set to start from about €43.000 in the Netherlands. The model was previously revealed at the Los Angeles motor show last year. It will be produced by Magna Steyr in Graz, Austria, arriving in showrooms in the second quarter of 2023. Fisker recently opened a European office in Munich, Germany, and a brand experience centre is set to follow in the country. It has forecast an annual sales figure of around 60.000 units in Europe. “I couldn’t be more excited to unveil the Fisker Ocean in Spain and present its unique combination of performance, value and technology to the European media and prospective owners”, said CEO Henrik Fisker. “I’m particularly thrilled to announce the segment-leading range for the Fisker Ocean. Europe is essential to our company as we work towards the start of production in November at a carbon-neutral factory in Austria”, Fisker said. “We aim to make the world’s most sustainable vehicle and to start deliveries in Europe this year. Ultimately, we expect to sell 60.000 units annually in the region”. The Ocean is expected to take on the Audi Q4 e-Tron and BMW iX3 with competitive performance figures, a raft of advanced technology and a range of up to 560 km. The model has also undergone pilot production so the necessary crash tests and homologation processes can get under way. Pilot production will begin this week so that the necessary crash tests and homologation processes can get under way. In terms of design, the Ocean stays true to the concept first shown in 2019, with Fisker committed to offering a “true SUV” rather than “yet another aerodynamic all-electric hatchback”. Its slim lights, short overhangs and a wide stance are aimed at emphasising its road presence and give heavy clues as to the design of future Fisker models. It remains a 5-seater, and the company’s commitment to sustainability extends to a “fully vegan” interior comprising reclaimed fishing nets, T-shirts and rubber. Fisker claims it’s “the world’s most sustainable electric vehicle”. Other highlights include California mode that lowers all the windows and retracts the roof to provide a convertible-style driving experience; a Limo mode that allows rear-seat passengers to control various vehicle functions; and a rotating 17.1 inch infotainment touchscreen that can be switched from portrait mode to landscape mode when the car is stopped. 3 trim levels will be available. Sport brings a 280 hp motor on the front axle for a 0-100 Kph time of 6.7 seconds; Ultra gets a motor on each axle, boosting output to 540 hp and cutting the sprint time to 3.9 seconds; and range-topping Extreme brings 560 hp and a 3.6 seconds 0-100 kph time. Earth and Fun driving modes are standard in all cars, while the Ultra and Extreme add Hyper mode, which boosts performance, and the Extreme also gets a dedicated Off-Road mode. Fisker has yet to confirm precise battery capacities but estimates a range of between 400 and 560 km depending on specification. These are based on the US’s EPA test cycle, which often gives lower range readings than the WLTP cycle used in Europe, so European-spec cars are likely to be rated higher. Fisker hasn’t confirmed charging capabilities either but highlights the potential of the Ocean’s solar-panel roof to add up to 2000 miles of range per year in ideal conditions. The Ultra and Extreme variants use batteries supplied by Chinese firm CATL that use nickel-manganese-cobalt (NMC) cell chemistry, which Fisker says affords them “a combination of segment-leading range and performance”. Company boss Henrik Fisker told that the batteries and powertrains were “selected this year”, only shortly ahead of the Ocean’s market launch. The reason, he explained, is that “the car industry has been in the common cycle of taking about four years to develop a car, so when you buy a car, the technology was chosen 2,5 or 3 years ago”. He continued: “We’re trying to change that into a much shorter development time of two-and-a-half years. Part of the trick here is that we have an amazing engineering and development team, but also that we’re working really closely with Magna to produce our vehicles, because we want a high-quality vehicle, so we haven’t had to deal with building a factory and teaching people how to manufacture a car. So that’s probably an advantage and a differentiator to our business model”. Outsourcing production significantly reduces Fisker’s overheads, as does its unconventional retail network (centred on so-called experience centres in cities) and remote vehicle delivery and servicing model. A location has been selected for Fisker’s London Experience Centre and will be confirmed closer to its opening date next year. Henrik Fisker told that because the car will be built in Europe, prices here won’t be swollen by import taxes. The Ocean is the first of a planned family of Fisker EVs, one of which will be the Project Pear, developed with technology giant Foxconn, which is set to go on sale globally from the end of 2023 at an affordable price point. +++
+++ Vehicles were scarce due to a global shortage of computer chips, but that drove prices up and helped GENERAL MOTORS increase its net income 56 % last year. The Detroit automaker said Tuesday that it made $10.02 billion for the full year. And it predicted record pretax earnings in 2022 of $13 billion to $15 billion and net income of $9.4 billion to $10.8 billion. Excluding one-time items, GM made $7.07 per share for the year, beating analyst estimates of $6.83, according to FactSet. Full year revenue of $127 billion fell short of estimates of $128.7 billion. In the fourth quarter, GM made a $1.7 billion net profit. GM’s sales in the U.S., its most profitable market, fell 13 % for the year and it was unseated by Toyota as the nation’s top-selling automaker for the first time. The company lost almost 3 percentage points of market share, which fell to 14.6 %. But GM’s average vehicle sales price rose almost 20 % in the fourth quarter from a year ago to nearly $54.000 as it sold more loaded-out pick-ups and SUVs. Nearly all automakers have been forced to cut production due to the global semiconductor shortage, leaving few new vehicles on dealer lots. Despite the profit, GM shares fell slightly in after-hours trading on Tuesday to $53.93. “GM brands had a harder time keeping customers in the fold with less vehicles and options available”, said analyst Jessica Caldwell. But she said inventory levels are looking better than they did in the third quarter, and vehicles are selling at higher average prices than GM’s Detroit competitors. In North America, GM made $10.3 billion pretax for the year. That translates to as much as $10,250 in annual profit-sharing for the company’s 42.500 eligible unionized factory workers, GM said. Workers will see the money on February 25. Last year the payment was $9.000. +++
+++ HYBRID car sales reached a milestone in Europe last year as they grabbed the same market share as diesel vehicles, while electric models gained more ground, industry data showed on Wednesday. The figures come as the European Commission aims to ban the sale of new fossil fuel cars from 2035 and automakers have unveiled plans to transition to an electric future. A green group warned, however, that conventional engines could stage a comeback if the European Union does not set more ambitious CO2 emissions standards. Self-charging hybrid vehicles accounted for nearly 20 percent of new passenger cars registered across the 27-nation EU, matching diesel, with 1.9 million cars sold, according to the European Automobile Manufacturers’ Association (ACEA). This was up from an 11.9-percent market share for hybrids in 2020. Hybrid cars have become the “perfect solution” for automakers to reduce their average CO2 emissions, said Felipe Munoz, analyst at auto industry specialists Jato Dynamics. Self-charging hybrid cars are powered by a conventional engine and an electric motor that charges while driving. Automakers also make plug-in hybrids that run on their electric battery until their power runs out and then run on fuel. Their market share rose to 8.9 percent last year. Nearly 880,000 fully electric cars were sold last year, representing 9.1 percent of total car registrations. Electric car sales have surged thanks to government incentives to buy them and growing output by automakers. They accounted for less than two percent of the market share in 2019 and 5.4 percent in 2020. Petrol cars still held the biggest market share at 40 percent in 2021. But electrified vehicles are chipping away at the lead, with their sales outstripping those of conventional engine cars in the last quarter of 2021. The rise of electric and hybrid vehicles came in a year that saw overall car sales fall to a three-decade low in Europe. Automakers have been hit by the Covid pandemic and shortages of semiconductors, a key component in the computer systems integrated into conventional and electric vehicles. Diesel car sales sank by a third in Europe last year, according to the ACEA. Electric car sales doubled in several European countries last year, including Sweden, Italy and Ireland, and surged by 83 percent in Germany, the auto industry’s biggest market. In Britain, electric car sales rose by 76 percent while in Norway 19 out of the 20 most sold models in January were electric, taking an 83.7 percent market share. “The EV (electric vehicle) market is consolidating, especially in the biggest markets, like in Norway”, Munoz said. Smaller markets such as Romania and Greece have also increasingly embraced electrified vehicles, with Tesla opening dealerships there and the arrival of cheaper models from traditional automakers. Transport & Environment, a green group, welcomed the rising share of electric cars in Europe. “The unprecedented growth is undeniably the result of EU car CO2 targets,” said T&E’s senior director for vehicles, Julia Poliscanova. Car emissions in Europe are capped at 95 grams of CO2 per kilometer. “But the regulation takes the pressure off manufacturers this year, so we might see a revival of polluting fossil fuel car sales already”, Poliscanova said. “CO2 standards need to be more ambitious and more regular to stop EV sales being relegated to the slow lane”. +++
+++ The last time HYUNDAI sold a car in Japan was in 2009, when it pulled out after years of dismal sales. Now, South Korea’s top automaker is back, but with a twist: It’s only going to sell electric vehicles, and only online. “We have prepared a lot, not to repeat the same mistake”, Jaehoon Chang, Hyundai’s chief executive officer, said in an interview. “We should know customers, we should know the market, with the right product and the right brand”. Chang, 57, is counting on the push back into Japan (to be formally unveiled in Tokyo on Tuesday) to reach his goal of selling 1.7 million EVs globally in 2026, including the carmaker’s Kia and Genesis brands, a target that was recently increased from 1 million. For incumbents and new entrants, the twin forces of electrification and automation are fueling bolder moves into fresh markets that, up until now, might have seemed impenetrable. While Hyundai hasn’t disclosed how many EVs it aims to sell in Japan, it’s definitely more than the 15.000 gasoline-engine cars sold during its prior foray. “We’ve experienced huge growth on the EV side in Korea, and we’re expecting the same thing will happen even faster in Japan”, Chang said. Leading Hyundai’s charge back into Japan’s hypercompetitive automobile market is the Ioniq 5, a car that debuted last year to wide acclaim. The vehicle will go head-to-head against two other battery-based EVs being rolled out this year from Japan’s top two automakers: Toyota’s BZ4X and Nissan’s Ariya. Even though EV uptake in Japan remains miniscule, with the bulk of the 8.600-plus registrations last year consisting of imported Tesla models, there are signs the country might be on the cusp of catching up with the United States, Europe and China. 1 out of every 4 potential car buyers is considering an EV, a recent survey showed, while charging points are popping up around the country, even in new condominium projects. As far as Hyundai’s CEO is concerned, the starting line is the same for every carmaker when it comes to EVs in Japan, where 4.5 million vehicles were sold last year. That gives Hyundai a chance to redefine itself as an EV manufacturer under the Ioniq marque, said Chang, who has first-hand knowledge of the market, having lived in Japan twice in the past. If the strategy sounds familiar, that’s because Samsung Electronics used a similar tactic to win over Japanese consumers with its Galaxy smartphone. During the years when Hyundai was absent, Samsung and LG Electronics Inc. proved that it’s possible for South Korean companies to break into, and even thrive, in the notoriously fickle market. “We know this market is very sophisticated and the Japanese customer, they have higher standards for everything because they know cars”, Chang said. “What I learned from Samsung and LG is that it’s about the brand and the product strategy”. Even so, tensions between the countries (rooted in Japan’s colonial rule over the Korean Peninsula) can flare up from time to time. Japan imposed a curb on exports of key materials needed for memory chips in 2019 during a diplomatic row. The following year, Japanese automakers saw their sales plummet in South Korea. This week saw a feud over a 400-year-old gold mine. Still, in a country where EVs haven’t managed to reach a market share of even 1 %, it’s difficult to gauge whether Japanese consumers will embrace the Ioniq 5, with its retro-futuristic design. Although it’s a compact SUV, the vehicle isn’t exactly small; a challenge for the country’s narrow roads and tight parking spots, one of the reasons cited for Hyundai’s gasoline-engine cars failing to gain traction more than a decade ago. Moreover, Japan’s EV uptake is projected to lag behind the U.S. and Europe through 2025, with analysts predicting that plug-in hybrids and battery-based EV sales will reach 200.000 units, or just about 5 % of the market. Despite Samsung and LG’s successes, the country’s consumers might still be reluctant to buy an EV (a far more expensive purchase) from a South Korean automaker because of their preference for Japanese cars, according to Kim Jin-woo, an analyst at Korea Investment & Securities Co. in Seoul. “I don’t understand why Hyundai needs to sell EVs in Japan for now, because the demand from Europe and America for EVs is so high”, Kim said. Pricing will be key. While Hyundai hasn’t disclosed how much the Ioniq 5 will cost in Japan, a comparable price to the U.S. sticker of $45,000 to $55,000 could make it competitive compared with the Ariya EV, which Nissan will sell for ¥5.4 million to ¥7.4 million ($47,000 to $65,000). Toyota hasn’t indicated a price for the bz4X. While the Ioniq 5’s styling blends in well amidst domestic cars and European imports on the streets of Tokyo and Yokohama (it has garnered several awards since its debut, including “German Car of the Year” for 2022) the biggest challenge for the car and every other EV on the road is the lack of quick charging points. The other big question looming over Hyundai’s move back into Japan is the decision to sell cars online. The nation’s auto dealers have been a formidable part of the domestic sales network, with car buyers accustomed to top-notch service. “We have no legacy dealers, which means we can try something new”, Chang said. He’s betting that Japanese customers have gotten more used to shopping online due to the pandemic. Tesla has also paved the way with its online-only sales model, although Toyota and Nissan have also started to offer web-based subscription-style leasing programs. In addition to letting car buyers customize and order their vehicles online, Hyundai also plans to offer web-based payment, insurance and registration. There’s another twist in Hyundai’s re-entry: The automaker will also sell its Nexo fuel-cell vehicles, which have been available on a trial basis. Due in part to Toyota’s efforts to popularize the technology with its Mirai FCV, there’s already a network of 157 hydrogen fuel stations across the country. Both automakers share the same, somewhat quixotic, aspiration that fuel cells will play a role in the future of transport. To market the Ioniq 5 and Nexo, Hyundai is teaming up Anyca, a Japanese car-sharing provider that connects vehicle owners and prospective renters. The automaker hasn’t said whether or when it plans to roll out additional Ioniq models, which include a sedan and a larger SUV. Hyundai is building out a service center in Yokohama, where potential buyers will be able to visit and test-drive cars. The facility, the first of several planned across the nation, will also handle after-market maintenance, as well as make service calls to customers’ locations after the first Ioniq 5 deliveries begin from the middle of the year. The lack of a dealer network suggests Hyundai will proceed cautiously for now, being careful not to commit too much money on the ground in a challenging market. For a proud South Korean automaker, however, it’s still a risky bet to put its reputation on the line for a second time. “Sometimes, you need to make a bold move”, Chang said. +++
+++ KOENIGSEGG has shown off its plans for a large factory expansion that will significantly boost production capacity and play host to all aspects of its business operations. Designed primarily for building the new four-seat, plug-in hybrid Gemera hyper-GT, the 30.000 m2 space will feature a number of spaces dedicated to both production and customers. The new site, connected to Koenigsegg’s existing factory and offices, will be built on the former runway of the converted Swedish Air Force airfield where the firm has built cars since 2003. The main feature of the new facility is an “open but expandable” space that will serve as a production line and a space for developing new technologies. The announcement comes just a year after Koenigsegg established a second 10.000 m2 facility. The company intends to hire another 100 engineers and 150 production staff by the end of 2023 to supplement its expansion, which will bring its total employee head-count to almost 800. It also plans to add a number of other facilities as part of its expansion. A new customer lounge will allow buyers to choose their car’s specification on a full-sized virtual model and a live event space will be used to unveil new cars. An on-site test-track will allow Koenigsegg to test both prototypes and customer cars prior to delivery, while an experience centre will host tours of the factory. An interactive green space featuring meeting spaces, dining areas and outdoor gyms will be built to boost employee wellbeing and productivity, while Koenigsegg will try to make more progress towards its climate-neutral goals by installing solar panels. Founder and CEO Christian von Koenigsegg said: “Looking back at where we started 27 years ago, it’s incredible to think of the journey we have been on. “Our expansion is a mark of our past and future relevance, where we’re geared towards delivering bleeding-edge mobility tech and our hand-crafted ultimate performance vehicles”. +++
+++ VOLVO has appointed former Tesla executive Adrian Clarke to drive forward its battery cell production company, as part of the firm’s joint venture with Northvolt. Clarke and Volvo will work with battery development partner Northvolt to open a new dedicated battery factory and a research and development centre in Gothenburg. The research and development centre will be the first step in a £2.5 billion strategy to build batteries for future Volvo EVs. Volvo said the new site will create “a few hundred jobs” and makes Volvo “one of the few automotive brands to make battery cell development and production part of its end-to-end engineering capabilities”. The 2 firms have now signed a binding agreement to create a joint venture for the development and production of EV batteries, having announced plans for a partnership earlier this year. Work on a dedicated battery factory will begin in 2023 and start operating at full capacity (50 GWh per year) in 2026, eventually employing 3.000 people. The power units will be used in “the next generation of pure-electric Volvo and Polestar cars”, beginning with the successor to today’s XC60, which Volvo has now confirmed will be fully electric. “Our new battery plant will support our ambition to have a fully climate-neutral manufacturing network and secure a supply of high-quality batteries for years to come”, said Javier Varela, Head of Engineering and Operations at Volvo Cars. “Through our partnership with Northvolt, we will also benefit greatly from an end-to-end battery value chain, from raw material to complete car, ensuring optimal integration in our cars”, Varela said. Volvo plans to initially source 15 GWh of batteries per year from Northvolt’s existing Skellefteå facility from 2024 (when the XC60 EV is expected to be launched) before the new dedicated ‘gigafactory’ facility goes into service. Volvo aims for 50 % of its global sales to be pure-electric cars by the middle of this decade and will ditch combustion completely from 2030. Polestar, its all-EV sibling brand, plans to build “a truly climate-neutral vehicle” by 2030. Northvolt’s “sustainable battery production” methods will help to reduce the environmental impact of ramping up EV production, the firm claims. “Establishing this gigafactory in Gothenburg is a decisive move, both to continue to transform one of the most dynamic automotive regions in the world, and to become the leading global supplier of sustainable batteries”, said Peter Carlsson, CEO of Northvolt. The joint venture with Volvo will be Northvolt’s third with a mainstream passenger car brand. In 2019, Volkswagen took a 20 % share in the Stockholm-based firm to build a gigafactory in Germany that is set to begin operations by early 2024, and in 2020, BMW agreed a battery supply deal with Northvolt worth €2 billion. +++