+++ ABARTH has confirmed an Abarth performance variant of its electric 500. The launch is planned for next year. This will be its first hot model since the Abarth 124 GT was launched in 2018. The model will mark the beginning of Abarth as an electric go-faster subdivision of Fiat. Other models will also receive the Abarth treatment on a case-by-case basis. Brand boss Olivier François told Autocar he expects to have between 1 and 3 Abarth models at any one time. François said: “A year and a half ago, I said it can’t be that hard to make an Abarth version of the electric 500. Electric cars are so fun to drive already. The good news is that we are actively working on it, and once it’s confirmed, it will be relatively quick. “The bad news is that it’s more complicated to deliver than I thought. If you want to do a real Abarth, it’s not the same electric powertrain. Once it has the power and torque you want, it’s no longer the same drivetrain, nor the same transmission or brakes. The whole thing has to be adapted”. He added that final test drives are under way ahead of official confirmation of the car: “It’s going to be fantastic. The sound is going to be very interesting. There will be a choice to be silent or not”. The Abarth fan community will play a crucial role in shaping the development of upcoming models, said François: “When it comes to marketing, it’s a totally different brand to Fiat. These Abarth fans would not buy a Fiat, and vice versa. It’s basically one car, the 500, and 2 totally different targets. We are going to leverage the community, involve them in the development. Social media is ideal for that”. The electric 500 has a 0-100 kph time of 9.0 seconds, a top speed of 150 km/h and a range of 320 km. The upcoming Abarth version is likely to aim for that sprint in under 7.0 seconds and a top speed of 180 kph, but it will lose some range. +++
+++ FORD will launch 7 new electric vehicles in Europe by 2024, with the 3-strong range of cars spearheaded by a new crossover utilising Volkswagen’s MEB platform technology. The first car to launch is expected to be based on the Volkswagen ID.4 and sit below the Ford Mustang Mach-E in Ford’s line-up. It will be built at Ford’s new state-of-the-art electric vehicle manufacturing centre in Cologne, launching in 2023 and being described officially as a “medium-sized crossover”. Ford’s second electric vehicle to be built at the plant will launch the following year, and is described as a “sports crossover”. This suggests it will be a more performance orientated coupe derivative of the first car to launch. The cars will be joined in Ford’s all-electric line-up by the Puma EV, which will be sold as a standalone model from 2024. In addition, 4 electric commercial vehicles will be launched from next year. The Transit Custom 1-tonne Van and Torneo Custom multi-purpose vehicles will go on sale in 2023, followed in 2024 by a smaller, new Transit Courier and Torneo Courier multi-purpose vehicle in 2024. Ford says that as a result of the launches it expects to sell 600.000 electric vehicles annually by 2026, with 1.2 million electric cars made in Cologne over a 6-year period. As a result, it is investing an additional €1.8 billion in developing the plant. Additionally, in order to meet these ambitions Ford has announced a joint venture with SK On Co and Koc Holding to establish a battery plant in Turkey. It says that this will create “one of Europe’s largest commercial vehicle production facilities”. As a knock-on of that Ford is also moving ownership of its Craiova manufacturing facility in Romania into a joint venture with Ford Otosan. Ford says that these initiatives will allow it to achieve zero emissions for all vehicle sales and carbon neutrality across its entire European footprint of facilities, logistics and suppliers by 2035. The Puma EV will still be underpinned by the architecture used by the Fiesta. The model’s switch to electric is the latest step in Ford’s electrification strategy. The firm has already electrified several of its most important models, including the Mustang, F-150 and Transit. Ford is also targeting global carbon neutrality by 2050 in line with the Paris Climate Agreement. Part of its strategy is close collaboration with other car manufacturers, including investing $500 million into EV start-up Rivian. +++
+++ HYUNDAI has cancelled a plan to resume the operation of a factory in Russia due to continued supply disruptions amid the Ukraine crisis, company officials said. Hyundai originally planned to reopen the temporarily suspended operation of the factory in St. Petersburg, but called it off due to persisting supply shortages of automotive semiconductors, according to the officials. The plant has been shut down since March 1. Automotive factories in Russia are reportedly facing disruptions in chip supplies, as air and sea routes to Russia have been suspended due to sanctions imposed by the United States and the European Union on Moscow for its invasion of Ukraine. Hyundai manufactures about 230.000 fully assembled vehicles per year at the Russian plant. +++
+++ NISSAN is planning to halt production at its plant in Russia because of “logistical challenges.” Nissan did not provide a specific date but said production will stop “soon”. Its plant in St Petersburg produced 45.000 vehicles last year, including the X-Trail. The Yokohama-based manufacturer said the safety of its employees is its top priority. Nissan earlier stopped exports to Russia. +++
+++ Conversion rates for car sales are better under the ‘ SHOP ‘ agency model than the traditional franchise ‘dealer’ model, according to Polestar manager Jonathan Goodman. He said he has seen a 10 % to 13 % conversion rate, with that figure based on a sale within 60 days of the first time a customer touches a Polestar (for example, in a showroom, a test drive). “If you count every person walking into a dealer for a franchised model, it’s probably about 10 % conversion rate”, he said. “We’re a new brand and to be at that conversion rate as a new brand which isn’t very well known is a very healthy position. We’ve looking to increase that rate moving forward”. However, Duncan McPhee, COO of Lookers, which uses Polestar’s agency model alongside the franchise model for other brands, said there hasn’t been a marked change at Lookers: “We’ve not seen much of a difference looking at conversion on the franchise model where customer deals with us directly compared to that of an online model. There’s not a huge difference”. He added: “But we have seen an uplift on customers taking finance online. That conversion has definitely improved but not the conversion for enquiry to sale”. The agency model, in which a car has a fixed price and a customer places an order directly with a car maker (often online), which then provides a fixed commission to the relevant local retailer, lives and dies by customer experience, said Goodman, McPhee and Tony Whitehorn, automotive consultant at Endiva, who previously worked for Hyundai and Toyota. Whitehorn said: “All the research shows consumers like the agency model. Consumers don’t enjoy going into dealerships and haggling. And we now buy a lot of things online. With the agency model, you can do it online, and then a retailer can deliver the car. The customer will drive this change, and the customer wants transparency and surety”. McPhee added: “It’s a very simple, transparent model. Customers like ease and to have transparency. It’s very, very profitable. It’s about delivering better customer experience, reducing distribution costs in the network and having a more transparent way of interacting with customers”. +++
+++ SSANGYONG ’s creditors will be requesting a rebidding of the merger and acquisition of the carmaker next Tuesday. The debt-laden SsangYong confirmed that creditors had brought up the prospect of looking for a new owner instead of completing the M&A procedure with the bidder Edison Motors for a while. South Korean electric carmaker Edison Motors had stepped closer to acquiring major stakes in SsangYong in January after the 2 firms clinched a deal following the court’s approval. But Edison was not able to bridge the gap with SsangYong’s creditors on the financially troubled SUV maker’s rehabilitation plan. Commercial creditors of SsangYong are strongly opposing the rehabilitation plan in which the carmaker proposed to repay only 1.75 percent of the total debt, worth 547 billion won ($554.5 million) in cash while converting the remaining bulk of 98.25 percent into equity. The 2 carmakers had also been facing differences over management rights, the value of the takeover, and the scope of sharing technology, raising the possibility that the merger could die out. Under the court-led sale procedure, SsangYong’s rehabilitation plan should be submitted by March 1. The rehabilitation plan, which needs approval from two-thirds of creditors, currently faces opposition from 80 percent of them. “Both parties agree that SsangYong must live for all of us to live. So we will continue to negotiate”, said an official from Edison Motors. +++
+++ Surging raw materials costs, made worse by Russia’s invasion of Ukraine, could set back the dream of TESLA chief executive Elon Musk and other auto executives to roll out more affordable electric vehicles. Rising prices of nickel, lithium and other materials threaten to slow and even temporarily reverse the long-term trend of falling costs of batteries, the most expensive part of EVs, hampering the broader adoption of the technology, said Gregory Miller, an analyst at industry forecaster Benchmark Mineral Intelligence. And that is on top of a supply chain already snarled by the Covid-19 pandemic and the global chip shortage. “Rising raw material prices certainly have the potential to delay the timeline on cost parity between EV and ICE vehicles, which could hamper the wider adoption of EVs”, Miller said, referring to internal-combustion engine vehicles that dominate the market. This year could mark the first year-over-year increase in the average price of lithium-ion battery cells, he said. The conflict in Ukraine has only raised the stakes, pushing nickel and aluminium prices to record highs on growing fears exports from leading producer Russia could be disrupted. Lithium prices also have increased, more than doubling since year end, as supply fell short of rising demand. Russia’s largest miner Nornickel produces around 20 % of the world’s supplies of high purity class 1 nickel, which is used in EV batteries, according to Benchmark Mineral Intelligence. Russia is also a large provider of aluminum, used in batteries. To be sure, oil prices, which jumped to the highest levels since 2008, could serve as a counterbalance, spurring greater interest in EVs after years of growing demand for gas-guzzling SUCs and pickups. Rising EV prices, marked by hikes over the past year by Tesla and startup Rivian Automotive, matter because mainstream consumers are not going to pay a massive premium for a technology that many do not yet fully embrace. The average EV sold for almost $63.000 in January in the United States, about 35 % higher than the overall industry average for all vehicles of just over $46.000, according to research firm Cox Automotive. While consumers worry less now about being stranded without power on the roadside, price remains a major concern, according to a Cox survey. Slower EV adoption “Anything that adds to the cost will impede EV adoption”, Cox analyst Michelle Krebs said. EVs made up about 9 % of total global vehicle sales last year according to the International Energy Agency, and consulting firm AlixPartners expects that share to hit about 24 % by 2030. More than half of consumers are not prepared to pay $500 extra upfront to buy an EV, despite lower operating costs, according to a 2021 study by OC&C Global Speedometer on consumers in the United States, China and other countries. That could put vehicle makers in a bind if they want to attract mainstream buyers, rather than luxury customers to whom they currently cater. Tesla raised the price for its least expensive Model 3 sedan by 18 % to $44,990 since December 2020, as supply chain woes weigh. Musk also said in January that Tesla is not developing a $25.000 car he promised during 2020 battery day, saying there are too many things on his plate. Some U.S. dealers have taken advantage of vehicle shortages to charge more for EVs, sparking warnings from automakers like Hyundai and Ford. Rivian tried last week to push through a 20 % price increase on its electric pickups and SUVs to offset higher parts costs, but retreated for those who had already placed orders when faced with a backlash that included possible sale cancellations. Another EV startup, Lucid Group Inc, has not raised prices yet, but Chief Financial Officer Sherry House said in February the company was “definitely studying price” to offset higher supply chain costs. In China, lithium price hikes have pressured the makers of such entry-level models as Great Wall’s Ora EV and Wuling Hong Guang’s Mini EV because they have less room to push through a higher price tag, investors said. For startups, the pressure is particularly intense. “If you’re a small company, you don’t have the ability to tell your suppliers to give you a lower price”, said Brett Smith, technology director at Center for Automotive Research. Battery makers typically have long-term contracts with automakers, under which prices rise to reflect the increased cost of key raw materials such as lithium, nickel and cobalt, industry officials said. LG Energy Solution, a supplier to Tesla and General Motors, said raw materials account for 70 % or 80 % of the cost of its batteries. Benchmark Mineral Intelligence said battery producers started increasing lithium-ion cell prices late last year in response to the higher raw material prices they had seen throughout 2021. +++
+++ TOYOTA will scale back domestic production over the next 3 months because of a supply crunch in chips and other parts that have slammed the global auto industry. Toyota Motor will cut back vehicle production in Japan by about 20 % in April, by 10 % in May and 5 % in June, compared to what was planned, spokeswoman Shiori Hashimoto said. Under a recovery plan, Toyota had raised production targets starting in April to catch up on lost production caused by parts shortages related to the Covid-19 pandemic, she said. “So production will still be at a high level”, said Hashimoto. “We will continue to do our best to deliver vehicles to our customers as soon as possible”. The topic of production came up in recent talks between management and workers to address “the hardships” at production lines and suppliers, according to Toyota. The numbers may still change, as conditions remain fluid. Toyota did not give specific numbers or other details. Toyota, which makes the Camry sedan, Prius hybrid and Lexus luxury models, produced 2.88 million vehicles in Japan last year. When including group companies, truck maker Hino and smaller car maker Daihatsu, production totaled 3.89 million vehicles in Japan. Globally, Toyota, Hino and Daihatsu produced about 10 million vehicles. All the world’s automakers have been hit hard by production delays in suppliers as regions observed lockdowns and other restrictions during the pandemic. Toyota has customers waiting for months for the products to be delivered. +++
+++ VOLKSWAGEN has started construction on a proving ground on Wednesday in Hefei, capital of East China’s Anhui province. It is expected to be finished in the middle of 2023, said the joint venture in which Volkswagen holds a majority stake. The proving ground, covering around 200.000 square meters, focuses on performance and functions testing, and hardware and software applications for vehicles in the development stage, said the carmaker. Key aspects will cover vehicles’ noise, vibration harshness testing as well as driving-assist systems, and connectivity. “The introduction of our R&D proving ground facilitates the fast development of local solutions, bringing us one step closer to delivering our exciting NEV products to China and worldwide customers”, said Ludger Lührmann, Volkswagen Anhui’s chief technology officer. He said the trend of electrification and digitalization urges the company to speed up the development of future mobility, especially in China, a global frontrunner in new energy vehicles’ innovation. Last year, over 3.5 million electric and plug-in vehicles were sold in China, ranking first in the world, according to the China Association of Automobile Manufacturers. The association expects their figures to reach 5 million this year as demand continues to rise especially in big cities. Volkswagen Anhui said the proving ground is part of its R&D facility, which units development, quality assurance, vehicle prototype manufacturing and comprehensive testing under one roof. Local R&D capabilities at Volkswagen Anhui are key to the group’s transformation and e-mobility strategy, said the joint venture in a statement. The R&D Center is currently building up the battery and vehicle component workshops and the pre-series center, with a target of completion by the end of this year. By then the center will have over 700 employees, said the company. +++