Wednesday, 29 May 2019

NIO, the embattled electric car company, is getting a big bailout from Beijing

Beijing is picking winners and losers in China’s electric vehicle industry. And it appears the Chinese government has chosen to bestow its favor on NIO,  a Shanghai-based company listed on the New York Stock Exchange.
NIO is establishing a joint venture with a state-owned fund, Beijing E-Town International Investment and Development company (E-Town Capital), the company said during its first-quarter earnings conference call today (May 28). E-Town Capital will put 10 billion yuan ($1.45 billion) into NIO China, as the Beijing-based JV will be called, in exchange for a minority stake.
The news comes as NIO faces a slew of challenges including cuts in government subsidies and immense pressure to improve its sales. The company reported a net loss in the first quarter of $390 million, a 70% increase from a year ago. NIO has sold 15,000 units of its flagship ES8 SUV since June 2018, when it started delivering the model. That’s just 1% of China’s total electric vehicle car sales, including battery and hybrid models, in the same period. Subsidy cuts could further impact NIO’s business—government subsidies for the ES8 were cut by 40% to 67,500 yuan ($9,800) last year and will be reduced further to 11,250 yuan ($1,600) beginning June 26, NIO said.
The overall economic environment isn’t helping NIO either. The carmaker expects ES8 deliveries to decline amid macroeconomic concerns over the “lingering US-China trade war,” Louis Hsieh, NIO’s chief financial officer, said during the earnings call.  Overall, China’s auto market continues to weaken in its first annual sales contraction in two decades.
Those factors have made the lifeline offered by E-Town Capital a timely one for NIO, and has implications for an industry where nearly 500 electric vehicle manufacturers are competing. NIO represents the class of EV startups that could rock the Chinese auto industry by building brands with an image premium enough to appeal to China’s customers, which have always looked to Germany, Japanese, and American brands. But because some startups don’t have their own manufacturing facilities, they risk alienating customers with poor quality vehicles.
In NIO’s case, E-Town Capital will help it build a new manufacturing facility for its next generation of vehicles, Nick Wang, the company’s vice president of finance said on the call. NIO, which earlier this year abandoned the plan to build its own factory in Shanghai, has been relying on state-owned JAC Motors to produce cars.
E-Town Capital, founded a decade ago, has total assets of more than $7.89 billion and has listed “new energy smart cars” as one of the four industries it wants to promote. It has also invested in a joint facility by Mercedes-Benz and state-owned BAIC BJEV, which has EV manufacturing capabilities.
While NIO now has a strong helping hand, many are EV makers struggling and analysts and auto executives alike are predicting that only a handful will survive as subsidies fade.

Monday, 27 May 2019

Tesla’s bad news accelerates as Wall Street loses faith

Late last year, Tesla Inc. was fully charged and cruising down the highway on Autopilot.
Shares were trading above $370 each, sales of the Model 3 small electric car were strong and the company had appointed a new board chair to rein in the antics of sometimes impulsive CEO Elon Musk.
But around the middle of December, investors started doubting the former Wall Street darling’s prospects for continued growth, and the stock started a gyrating fall that was among the worst in company history.
For the year, the share price is down around 40%, largely on concerns Tesla is running out of buyers for its vehicles, which range in price from a base $35,400 Model 3 to a larger Model X SUV that can run well over $130,000.
Morgan Stanley analyst Adam Jonas, on a private call with investors this week, raised the possibility that Tesla would have to be restructured due to rising debt and falling sales. A leaked memo to employees from Musk that said sales were up stanched the stock’s bleeding, and no one is really certain about what’s next.
Here’s a look at what has happened and what might be in the future for the electric car and solar panel company:
Why did stock start falling
A downhill snowball of bad news eclipsed anything good Tesla did, and raised investor doubt about whether there are enough buyers left who want and can afford Tesla vehicles. Throw in a little bit of erratic behavior from Musk as well.
Just before Tesla stock hit a late-year peak on Dec. 13, Musk did a weekend interview with CBS’ 60 Minutes that escalated a spat with securities regulators over his tweeting out company information. This time, he said it was unrealistic to think Tesla’s new chairwoman could control his behavior because he’s the largest shareholder. It came after Musk and Tesla each paid $20 million in fines in an October settlement with the U.S. Securities and Exchange Commission over ill-advised tweets.
What else happened?
Just after the new year began, Tesla announced record fourth quarter sales that fell short of Wall Street expectations. The company also cut prices by $2,000 per vehicle to offset the phase-out of a $7,500 federal tax credit for Tesla. That increased doubts about future sales. Then Tesla eked out a small fourth-quarter profit that also disappointed investors.
The snowball picked up momentum in February when Musk announced he would close most company stores and fill orders online. He also walked back his prediction of sustained quarterly profits, predicting a first quarter loss. When January-through-March sales figures came out, investors were disappointed again. The company had only 63,000 deliveries, down 31% from the fourth quarter.
Musk later introduced the Model Y midsize SUV, but gave few details. Investors were nonplussed. Then came a conference call to announce fully self-driving cars by sometime next year, an announcement widely criticized by experts as unrealistic. The stock slump continued. With sales down, Tesla posted a larger-than-expected $702 million first-quarter loss in April, and Musk warned it wouldn’t be profitable in the second quarter either.
In May, Tesla sold stock and notes that yielded $2.3 billion, increasing debt. Along the way, the SEC asked a judge to find Musk in contempt for tweets about vehicle production, a spat that was later settled. Also throw in reports of a leaked email last week from Musk to employees saying at the current cash burn rate, Tesla would go broke in 10 months.
What happens next?
It all depends on whether Tesla can produce enough cars at its Fremont, California, factory and whether people keep buying them. Musk’s memo from Wednesday said the company has 50,000 net new orders this quarter and it could pass record deliveries of more than 90,000 in the fourth quarter of last year. That could generate enough cash to reverse the company’s fortunes. But many analysts are skeptical. Morgan Stanley’s Jonas didn’t think sales would be that strong.
“We see shares continuing to trade lower on a lack of near-term catalysts and likely cut to vehicle sales guidance,” CFRA analyst Garrett Nelson wrote in a note to investors Thursday.

Friday, 24 May 2019

Skoda unveils first all-electric compact car

Skoda unveils first all-electric compact car

Skoda has launched a new iV e-mobility sub-brand for its new range of hybrid and electric vehicles. The Czech automaker has also announced two first models: an electric version of the Citigo compact car, as well as a hybrid iteration of the Superb sedan. 
Skoda unveiled the Citigo e iV, the car brand's first all-electric vehicle, at the IIHF Ice Hockey World Championship quarter-finals in Bratislava, Slovakia. The electric motor promises power output of 61kW (equivalent to 83 horsepower) and the lithium-ion battery offers a maximum range of 265km. Skoda states that the car can be charged to 80% in one hour via a fast-charging point and has a top speed of 130km/h. This electric version of the smallest Skoda model will be officially presented at the next Frankfurt Motor Show this September and is expected to be available shortly afterward, priced under €20,000 (approx. $22,400), making it one of the most affordable small EVs on the market.
Alongside the Citigo e iV, Skoda also unveiled a plug-in hybrid version of the Superb, promising combined power of 218 horsepower. This Superb iV model features a 156-horsepower 1.4 TSI gasoline engine combined with an 85kW electric motor. It promises CO2 emissions of under 40g/km. Range is up to 55km in fully electric mode, and up to 850km can be covered when combined with the gasoline engine.

Thursday, 23 May 2019

Audi’s Electric Ambitions Just Killed the TT and May Cull the R8

An Audi AG TT RS coupe stands on display at the Beijing International Automotive Exhibition.

Volkswagen AG’s Audi will cease making the iconic TT coupe and replace it with a battery-powered model as the luxury brand accelerates an electric shift that may also see the next version of its flagship A8 sedan go emission-free.
Audi is also mulling an end to the $170,000 R8 sports car as Volkswagen’s biggest profit generator focuses resources on the rollout of 20 fully-electric cars by 2025. Sales of electrified vehicles, which include hybrids, are set to account for 40% of deliveries by then, Audi said Thursday at its annual shareholders meeting in Neckarsulm, Germany.
“We’re shedding old baggage,” Chief Financial Officer Alexander Seitz said. Because of tighter emissions regulations, “combustion cars are getting more expensive in the medium-term, and electric cars are getting cheaper.”
Audi is pushing to regain lost ground to rivals Mercedes-Benz and BMW AG as it struggles to emerge from the diesel-emissions scandal that shattered the manufacturer nearly four years ago. The brand’s woes culminated in the arrest of former CEO Rupert Stadler last year and a 800 million-euro ($895 million) fine. Parent VW can ill afford Audi to falter, and the group’s cash cow plans to revive profits with 15 billion euros in savings by 2022.
Audi has been making the two-door TT since 1998. At the time, the model’s sloping roof and sleek design signaled a shift away from its reputation for staid sedans. Audi will replace the TT with a new electric car “in a few years,” it said.
Volkswagen AG AGM as Truck IPO Plan Stages Surprise Comeback
Bram Schot
Photographer: Krisztian Bocsi/Bloomberg
“There will be lots of things that we won’t do any more in the future, or things that we do less,” Audi Chief Executive Officer Bram Schot said. “We focus maximum resources on our key projects.”
Audi unveiled the revamped flagship $84,000 A8 sedan in 2017 with a new-generation model due around 2025.
Separately, the carmaker said it’ll introduce short-and long-term rental options together with partner Sixt SE in Europe from the fourth quarter. Customers will be able to book an Audi from the Sixt fleet via an app for as little as on hour to as long as a year.

Shrinking Deliveries

Audi’s global deliveries have declined 5.9% since the beginning of the year. After leading China’s luxury market for decades, the brand’s sales lead narrowed substantially, putting Mercedes-Benz and BMW within striking distance in the biggest market for premium vehicles. Audi aims to double sales in its largest market in the medium term by bolstering its lineup of locally made cars to avoid import fees.
In a push to reignite momentum, Audi will launch five fully-electric and seven plug-in hybrid models within two years and will broaden the lineup to more than 30 electrified cars by 2025. But the transition will be costly. CFO Seitz warned that the brand’s earnings this year will face substantial burdens, after higher spending on electric models like the E-Tron contributed to returns last year dropping to 6% from 7.8%.
Audi targets slightly higher deliveries and revenue this year, and an operating profit margin between 7% and 8.5%. That should shift to between 9% and 11% as early as next year, helped by a sales reorganization.

Wednesday, 22 May 2019

The 2021 Chevrolet Bolt EUV Will Be GM's Next Electric Car

a car parked on the side of a road: 2021 Chevrolet Bolt EUV Prototype
General Motors recently announced it will build a new Chevrolet electric car in Michigan, with the new model set to be produced alongside the existing Bolt EV and ride on an "advanced" version of the same platform. It could even have a similar name-GM Authority discovered a trademark for Bolt EUV, which likely stands for Electric Utility Vehicle. We've now gotten our first look at the new EV, albeit covered in camouflage, and can see that it's a bit more crossover-like in appearance than the already crossover-y Bolt.

The new car looks larger and boxier than the Bolt, with a longer, less stubby front end. Despite it being positioned as a crossover, though, like the Bolt it is really more like a tall hatchback in the vein of the Honda Fit. We can see slim headlights, a grille opening at the base of the front bumper, and some nice boomerang-shaped surfacing at the corners of the bumper and the sides of the car. The A-pillar is simpler than the Bolt's, losing the odd quarter-window, but the EUV has an even more dramatic C-pillar and a floating roof design. The rear is a lot more covered up, but it seems like the EUV's rear window might be more raked than the Bolt's.

Back in 2017, GM CEO Mary Barra said that the company would offer "desirable and profitable vehicles" with a range of over 300 miles by 2021 as part of a plan to have 20 zero-emissions cars available globally by 2023. As a part of the presentation, an image was shown on the screen that looks extraordinarily close to the camo'd EUV aside from some minor details and a lack of Chevy badging. Could GM already have revealed this new crossover EV to us? Check it out below to see for yourself.

Our spies also got a look underneath the prototype, revealing a centrally located battery pack and a lack of the rear motor, meaning the new EV-or this prototype, at least-is front-wheel drive. (All-wheel drive via a second, rear-mounted electric motor could be a possibility.) The EUV likely won't hit that 300-plus-mile range target, as those EVs Barra talked about will be built off a totally new platform. But we expect that range could get a bit of a boost over the Bolt, which is rated by the EPA at 238 miles.

In the same November 2017 presentation, Barra said that two new Bolt-based EVs, both crossovers, would be out in 18 months. One would be for only the Chinese market, while the other (this EUV) would be for North America. Well, it has now been 18 months and five days since that presentation, and there are no new electric crossovers to be found. The change in production location for the EUV is surely a factor, and GM has been in a period of major lineup restructuring recently. But given how close to production these camo'd prototypes look, we think the EUV will make its debut by the end of the year, going on sale as a 2021 model

Electric car boom could be major auto jobs killer

Electric car boom could be major auto jobs killer

ZWICKAU, Germany — Over 115 years the auto industry in the east German town of Zwickau has lived through wrenching upheavals including World War II and the collapse of communism. Now the city's 90,000 people are plunging headlong into another era of change: top employer Volkswagen's total shift into electric cars at the local plant.

The world's largest carmaker is creating its first all-electric plant and phasing out production of the internal combustion-engine cars built by generations of local workers.
The electric transformation raises questions about the long-term prospects of the auto industry, which employs 840,000 people in Germany and millions worldwide, as a source of jobs for communities like Zwickau, which gave the world both the luxury brand Audi and the communist-era Trabant "people's car."

Fewer workers will likely be needed, with different skills. And there is no mass market yet for battery-only cars. Volkswagen's $1.35 billion investment is taken as a sign of hope for the community. But the longer term trends for employment are less certain.
"We see dangers in this, but we see this really as a chance for Zwickau the manufacturing center to stand out," the town's mayor, Pia Findeiss, told The Associated Press.
Over her desk hangs an oil painting from the communist period in the 1980s that shows the belching smokestacks from two coke plants that used to foul the city's air. Like the region's coal mines and textiles, that was an industry that came and went as times changed.
Among the key concerns is that electric cars don't need engines and transmissions with thousands of metal parts that need to be assembled. Where an internal combustion engine has 2,000 to 3,000 metal parts, an electric drivetrain has 150 to 250 parts. And the batteries that power it are produced through far different processes that are easy to hand over to robots.
The Frauenhofer Institute for Industrial Engineering in Stuttgart estimates that 23,000 to 97,000 German jobs could go missing in power train production by 2030. While that's only a fraction of the 44 million employed in Germany, the losses are likely to be concentrated in certain communities and companies, including suppliers.

Engine parts maker UKM Fahrzeugteile, for example, does half of its business in classic drive trains. It says it's shifting its strategic focus toward trucks and motorcycles, as well as non-automotive fields like aviation.
"On a plant and regional basis, the effects can be serious," said Oliver Riedel, the institute's director. "Think about smaller businesses, for example, that are unable to make up for lost sales of components for internal combustion engines, or structurally weak regions where alternative employment is scarce."
At Zwickau, one assembly hall continues to turn out Volkswagen Golf hatchbacks with traditional engines, which help generate the profits to invest in developing electrics.
In a nearby hall, workers are preparing the future: they are setting up 350 massive orange robots that will turn out the ID 3, the affordable battery-driven car to be launched next year.
The plant's 8,000 workers are meanwhile being pushed through training in prefab classrooms. Some 1,500 will get special certification in how to deal with high voltage components, for instance.
Factory veteran Rainer Pilz, 59, is among those retraining the next generation of Volkswagen workers. While he retires next year, he has a personal stake in making Volkswagen's move a success as his son and daughter, in their 30s, also work at the company.
"We have the chance to build something completely new here," he says in a room where trainees don virtual reality goggles and learn to identify the correct electrical connector on an air conditioning compressor. "I think the future looks bright."
Zwickau's auto industry began in 1904, when August Horch founded a carmaker under his own name and then started Audi, now part of Volkswagen and headquartered in southern Germany. The manufacturers were taken over by the communist authorities after World War II and from the 1950s to the 1990s turned out the two-stroke, plastic-bodied Trabants. The exhaust-spewing Trabant passed into history after Germany was reunified in 1990, and so did the jobs making them.

But Volkswagen came in and invested heavily in 1991, turning out Polos and Golfs and keeping the region of Saxony in the auto game. Today there is a large network of suppliers and service providers connected to the industry; some 20,000 work for automakers in Saxony, and 75,000 at suppliers.
For now, Volkswagen has pledged no compulsory layoffs in Zwickau before 2025, under a deal struck with its powerful labor representatives. The company's electric pivot is part of its effort to leave behind the scandal in which the company admitted to cheating on diesel engine emissions tests.
European Union requirements to cut average carbon dioxide emissions from 2021, following on from the 2016 Paris climate agreement, are pushing automakers to quickly build and sell more battery-powered vehicles. Electric cars remain a tiny part of the market as higher prices and lack of places to charge put off consumers — only 1.6 percent in Germany, 1.2 percent in the United States.
Volkswagen is betting that by pricing the ID 3 at under 30,000 euros ($33,500) for the base version, it can make E-cars a mass phenomenon, taking aim at Tesla, which says it is now selling the long-promised $35,000 version of its compact Model 3.
From 2021, the Zwickau plant will have the capacity to turn out 330,000 cars a year across six models. The company touts the ID 3 as a worthy successor to the historic Beetle compact and to its current mass-market mainstay, the Golf.
In some ways the push into electric cars is already leading to some job cuts, analysts say, as companies seek to improve profits, without which they can't invest in new technology. General Motors will shut four U.S. factories and one in Canada. About 5,900 workers will lose their jobs, as well as another 8,000 white-collar workers. Ford said this week it will cut about 7,000 white-collar jobs. Volkswagen itself has said it will reduce administrative staff at headquarters by 5,000-7,000.

"It is reasonable to expect we will see some reduction in employment," said Sam Abduelsamid, an analyst at Navigant Research.

Tuesday, 21 May 2019

Warning About Shaky Tesla

Morgan Stanley has cut its worst-case forecast on Tesla Inc.'s (TSLA) share price from the previous estimate of $97 to just $10, dealing another blow to the luxury electric car maker.
The worst-case or "bear case" scenario by Morgan Stanley analysts takes into account the risk posed if Tesla misses its current sales outlook for China by about half. The analysts expressed concerns at Tesla's debt load and reliance on Chinese demand for its vehicles.
"Our revised bear case assumes Tesla misses our current Chinese volume forecast by roughly half to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention," analysts led by Adam Jonas said in the note.
However, Jonas maintained his main price target for Tesla's stock at $230.
During Monday's intra-day trading, Telsa's shares fell below the $200 level for the first time since December 2016 after Wedbush Securities analyst Daniel Ives slashed his price target on the luxury electric car maker's stock to $230 from $275, citing "major concerns" around the trajectory of Tesla's growth prospects.

Ives said it would be a "Herculean task" for Tesla to hit its full-year production target and added that he sees Tesla producing 340,000 to 355,000 vehicles as a more likely scenario.
While reporting its first-quarter financial results in April, Tesla said it expects to deliver 90,000 to 100,000 cars in the second quarter, and 360,000 to 400,000 vehicles for the full year.
Financial services firm Robert Baird & Co. also said Tuesday that it has cut its price target on Tesla's stock to $340 from $400.
Tesla's shares are currently trading at 202.82, down $2.54 or 1.24 percent on a volume of 8.55 million shares.

Saturday, 18 May 2019

Volvo to Start Using Electrically Driven Superchargers

2020 Volvo XC90

Volvo will ditch its current uplevel supercharged and turbocharged four-cylinder engine in the near future, the Volvo Car Group's R&D chief, Henrik Green, told Car and Driver at the Vienna Motor Symposium on Thursday. Future iterations of the engine will instead feature an electric charger in addition to the turbocharger.
The Twincharger engine is part of the VEA engine family that was launched in 2013. Lower-powered iterations of this engine are simply turbocharged, but the most powerful versions, fitted in T6 and hybridized T8 models, currently include an engine-driven supercharger as well. Across most of the Volvo lineup, T5s are currently rated at 250 horsepower, while the T6 boosts output to 316 horsepower.
The move to an electric charger mirrors recent decisions by Audi: The Europe-only, 435-hp SQ7 TDI came with a diesel V-8 and an electric supercharger. That model will return, and there will be an SQ8 TDI as well. Moreover, Europe-market S4, S5, S6, and S7 models will get V-6 TDI engines with an electric charger.
Unlike Audi, Volvo—a company that has promised to ditch the diesel altogether—is coupling the e-charger to gasoline engines. The system is offered by several suppliers and was first widely communicated by French supplier Valeo. Green wouldn’t disclose the supplier of the system or any particulars about expected output.
Electric chargers spin up nearly instantly and are used briefly during acceleration to create boost before a turbocharger has the time to spool. While, theoretically, less powerful electric chargers can run with a 12-volt electrical system, their full potential can only be unleashed by 48-volt electrical systems. Volvo's intention is for all future models, short of plug-in hybrids and full electrics, to feature this form of hybridization.

Friday, 17 May 2019

Usain Bolt unveils $9,999 electric car

The Chevy Bolt may soon have some competition … from Usain Bolt.
The sprinting star’s startup scooter sharing endeavor Bolt Mobility has unveiled a tiny electric car called the B-Nano that it plans to start selling next year for $9,999.
The Florida-based company said it has been developing the tandem two-seater in secret for the past year, and that it features swappable batteries and is narrow enough to fit through "many" doors.
Technical specifications like power and range have not been revealed, but the vehicle was designed with urban drivers who need to drive less than 15 miles at a time in mind.
Private owners will be able to offer their cars through the Bolt Mobility platform for use by its members and generate income from their cars, similar to what Tesla has proposed for its future autonomous vehicles.
The company is currently accepting reservations for $999, but has not shown a running prototype or said where the vehicle will be built.
In the meantime, Bolt Mobility is launching its scooter sharing program in Paris, similar to Bird or Lime, with scooters it claims will last two years before requiring replacement, compared to several months for its competitors’ products.