Friday, 31 January 2020

Aston Martin delays electric car plans after raising emergency funds

Aston Martin has officially delayed all plans for electric vehicles after taking on a desperately-needed new investment from Formula One billionaire Lawrence Stroll. The company says it has indefinitely suspended its first electric car, the Rapide E, after refusing to confirm rumors about the project earlier this month. And it has pushed the launch of its all-electric Lagonda sub-brand back from 2022 to “no earlier than” 2025.
The British luxury automaker decided to take on up to £500 million (around $657 million) from Stroll in exchange for handing over almost 20 percent of the company. This comes after Aston Martin suffered what CEO Andy Palmer called a “very” bad 2019, where the company lost more than £100 million despite increased sales.
Aston Martin announced the investment early Friday morning following an emergency meeting of its board of directors, where a choice was made between Stroll’s offer and a similar one from growing Chinese automotive conglomerate Geely. The Financial Times reported later Friday morning that Geely’s offer would have actually “accelerat[ed] the production of new electric vehicles” at Aston Martin by leveraging the EV technology that the Chinese firm has developed with Volvo, which it bought in 2010.
“You know I’m a great advocate of electric cars, going back to Leaf and the Nissan NV range, my favourite project of all. So I am wedded to the idea of electrification going forward,” Palmer says in an interview with Autocar about the investment.
Palmer went on to say he’d rather focus on the company’s V6 hybrid engine in the near term, especially because it’s taking time for the all-electric market to develop. “You also have to remember that none of our competitors, bar Porsche, will have an electric car on sale before 2025. So we are on a pretty similar timeline to them, and at the vanguard of the luxury market still,” Palmer says.
The Rapide E has been sort of a haunted project from the get-go. Originally teased in 2015, Aston Martin built the first prototype in conjunction with Williams Advanced Engineering, the technical arm of the Williams F1 team. Not long after that, though, Aston Martin announced plans to co-develop the Rapide E as part of a joint venture with Chinese tech conglomerate LeEco. Unfortunately for Aston Martin, LeEco collapsed in on itself under the weight of a massive debt pile in 2017, forcing the British automaker to reduce the scope of its plans for the Rapide E.

Thursday, 30 January 2020

Tesla is the cheaper electric car

The California carmaker posted a second consecutive profitable quarter (pdf) today, adding another billion to its $6.2 billion in cash reserves. And most of the credit belongs to Tesla’s Model 3 overseas—despite slowing US sales growth, nearly half of the 300,000 of so deliveries in 2019 were to Europe and China.
After years of flirting with bankruptcy, Tesla is posting more consistent profits, cutting costs, growing revenue, and restraining its chief executive Elon Musk from threatening the company’s solvency. The stock, up 12% in after-hours trading, is now far outpacing analysts’ expectations following two years of middling performance.
As Tesla claimed, 2019 looks like a “turning point.” The company is entering its mass-production phase. The importance of its original Model X and Model S is fading as it retools itself to become a global automaker. Tesla now looks capable of delivering 500,000 vehicles this year (most of them the Model 3 sedan and upcoming Model Y crossover) and 1 million as soon as 2022, according to an investor note by equity research firm Wedbush.
We’re also entering a world where Tesla is the cheaper electric car, though not the cheapest. That title will belong to the Chevy Bolt, Nissan Leaf, Hyundai Ioniq, and others selling in the $35,000 range.
But Tesla may soon own a covetable segment of the market, say analysts at auto research company Edmunds. “Tesla got a bit lucky in that the market evolved around them: unplanned, the Model Y might slide right in the sweet spot for the EV crossover market,” now more than half of US car sales, said Jessica Caldwell, executive director of insights at Edmunds. “It has a more prestigious brand than the mainstream hybrid nameplates but comes at a significantly less cost than the rest of the luxury competition.”
So Tesla could find itself in a Goldilocks situation. Its luxury rivals are still too expensive, while the entry-level competitors aren’t attractive enough. The average price for the luxury Audi eTron is $75,524, and the Jaguar iPace is $77,109. Standard EVs, such as the Chevy Bolt, sell for about $38,000. Even the cheapest offering, the Nissan Leaf, lists for $32,000.
Meanwhile, the Model 3 is now selling for $35,000 (as a special order) and Tesla’s Model Y is expected to start at $48,000 with a standard variant coming out later for as low as $39,000. At that price, luxury brands will feel the pinch, and cheaper offerings risk being overlooked. Tesla has already proved it can take over the premium sedan market, beating out rivals such as Mercedes, Lexus, and BMW’s 6 and 7 series with its Model S starting around $75,000.
If it can offer most of the technology in its premium cars at a fraction of the price, Tesla’s Model Y and Model 3 may have a lucrative EV market segment all to themselves for years to come.

Tuesday, 28 January 2020

Old Electric Car Batteries Are Now Powering the Grid


Used electric car batteries are getting a second life—as cells on the power grid.
Relectrify, an electronics company based in Melbourne, Australia, is currently working on a pilot with American Electric Power and Nissan to use expired batteries in building industrial energy storage. The technology, called a battery management system, could boost lithium-ion battery life by about a third and reduce overall costs by half.
At laboratories in Japan and Australia, the company is currently integrating old Nissan LEAF batteries into a larger battery pack. Traditionally, these packs are limited in capability because they're only as good as their weakest battery cell. But Relectrify combines battery management with inverters to get the most out of each individual cell.
Conventional battery management systems monitor and allow some balancing for each battery cell, but since the whole pack is centrally controlled, it becomes problematic as the cells age at different rates and begin to exhibit different storage capacities. As the batteries are emptied in a standard battery management system, the whole pack dies and stops providing power when the first battery cell is depleted, as shown in the video above.
Relectrify ensures that the battery management system not only monitors the individual cells, but also controls power to and from each cell. The system identifies which battery cells are weak and draws less energy from those while continuing to pull power from the stronger batteries. One of the great benefits is if there's a dud, the system can disengage that individual cell.
This explains the ability to employ used electric car batteries: all of the cells' capacity and life can be harnessed, even if it doesn't match that of surrounding cells. As it happens, electric vehicle batteries that have reached the end of their lives still have a good portion of their original energy storage capacity intact, which means they can be used in other applications, like home solar power storage or for use in industrial grade energy storage systems.
Each block in the Relectify system contains 400 individual battery cells, according to the company, and the system can leverage the full lifespan of each. Just one AC battery block from Relectrify can provide 72 kilowatt hours of energy storage and up to 25 kilowatts of power. Meanwhile, Tesla's Powerpack—which serves the same function as the Relectify system, providing energy storage infrastructure for consumers, businesses, and commercial utilities—provides up to 50 kilowatt hours of energy storage per unit.
Relectify's new method is expected to cut the costs for grid storage systems by about $150 per kilowatt hour, according to Bloomberg. Right now, the average price for similar tech using new batteries, like Tesla's Powerpack, runs about $289 per kilowatt hour.

Monday, 27 January 2020

GM Detroit-Hamtramck plant's future includes EV trucks and more

Once on the brink of closing down entirely, General Motors' Detroit-Hamtramck assembly plant in Michigan will soon be the epicenter for a major shift inside the automaker. On Monday, the company announced the plant will undergo a transformation to solely build electric vehicles.
Today, "D-Ham" runs on a single shift to build the not-long-for-this-world Cadillac CT6 and Chevrolet Impala. Beginning next month, the plant will go dormant for several months to undergo renovations. On deck for the plant is a previously confirmed electric pickup truck -- quite likely a reborn Hummer model -- followed by production of the Cruise Origin, the automaker said. 
GM also clued us into what else it has in store. The electric pickup will be ready in 2021 and it will be the first of many EV trucks coming from the automaker, GM President Mark Reuss said at the announcement.
The radical shift will see GM pour $2.2 billion into the plant to retool for EV-only models. Another $800 million will go to supplier tooling and other projects related to launching the electric trucks. As for the battery cells for these new vehicles, they'll come from a new facility planned outside of Lordstown, Ohio. The automaker previously announced a joint venture with LG Chem to build the battery cells in the state once home to Chevy Cruze production.
The news will also be a boon to employment at the factory. While the workforce stands at around 900 employees, D-Ham will soon employ 2,200 people after everything is operational.
It won't be the first time the plant dabbles in building electrified vehicles, however. The facility was once home to production of the Chevy Volt and its far more expensive cousin, the Cadillac ELR.

Sunday, 26 January 2020

Mercedes Considers More Hybrids at High-Performance AMG Unit

Daimler AG Media Night Ahead Of The IAA Frankfurt Automobile Show

Mercedes-Benz is considering adding more plug-in hybrids to its AMG performance-car lineup, as the world’s top-selling luxury carmaker seeks to balance consumer demand for roaring combustion power with government pressure to meet stricter emission rules.
Fleet customers of Daimler AG’s main brand have responded well to a growing list of hybrid models for sale, ranging from compacts to full-size vehicles, Mercedes-Benz sales chief Britta Seeger said in an interview. Private consumers are also increasingly willing to consider alternatives to traditional gasoline or diesel engines, she said.
“Over the past 12 to 18 months we’ve really seen a mindset change and people are becoming much more open toward electric and hybrid cars,” Seeger said. “I see a lot of potential for AMG to grow further, both with traditional performance models as well as electrified versions like the upcoming GT 4-Door Coupe hybrid,” she said.
Traditional automakers have been forced to rethink the market as they confront new emissions rules, rapidly changing technology and potent competition from the likes of e-car pioneer Tesla Inc. and new tech-industry entrants. The road is particularly treacherous for performance brands like AMG that rely on the growl of a big engine to attract well-heeled customers.
With consumer demand for fully electric cars still unproven, hybrids may offer an attractive way for AMG to adapt without alienating range-anxious drivers unwilling to move away from combustion altogether.
The GT 4-Door Coupe, a plug-in hybrid first shown as a concept in 2017, is due out this year. It pairs a gasoline-powered V8 with a hybrid drive unit derived from the Formula One racing program -- an approach that delivers more than 800 horsepower, underscoring AMG’s high-performance roots. AMG also is developing a two-seat supercar called the Project One, and is considering a plug-in hybrid version of the AMG 63 coupe and other models.

European automakers facing tighter emissions rules, Daimler has pressed forward with plans to introduce a slew of fully electric cars. Last year it rolled out the EQC SUV, a competitor to Tesla’s Model X. The fully electric EQS concept shown in September, a sibling of the flagship S-Class sedan, will serve as a basis for more purely battery-powered luxury cars as Daimler aims to offer more than 10 fully electric models by 2022.
“Demand for the EQC is high and customer feedback is very positive,” Seeger said.
Mercedes-Benz plans to produce around 50,000 EQC cars this year, a Daimler spokesman said in a statement late Thursday. He said the target remains unchanged, dismissing a media report that said the goal has been lowered due to battery supply bottlenecks. In December, Daimler delayed the EQC’s U.S. launch to sell more cars in Europe, which would help meet fleet CO2 requirements in the region.

Project One

Fully electric AMGs may be considered at some point. For now, the unit will test the waters with the GT 4-Door and the plug-in Project One, planned for 2021. That car will supplement a 1.6 liter V6 engine with four electric motors, propelling it to 200 kilometers per hour (124 mph) in less than six seconds. Electric mode lasts for just 25 kilometers. For the C63 and other models, plans are still fluid.
While the global light-vehicle market is forecast to shrink for a second straight year, according to Moody’s, prospects look more encouraging in the premium-car segment, where buyers are less price sensitive. Still, profit margins from hybrid and electric cars are lower than for traditional vehicles.
Maintaining the price discipline to avoid steep discounts will be critical for Mercedes-Benz to protect returns.
“It’s very important that we ensure profitable growth, not only chase volume,” Seeger said.

Saturday, 25 January 2020

Tesla overtakes Volkswagen for No. 2 spot among world's most valuable carmakers

PHOTO:In this file photo taken on Aug. 8, 2018 the Tesla logo is seen outside of their showroom in Washington, D.C. (Saul Loeb/AFP via Getty Images, FILE)

The U.S. electric car company Tesla has topped Germany's Volkswagen to become the second most valuable automaker in the world.
The electric car maker's market value surpassed the $100 billion mark this week, overtaking Volkswagen's approximate $99 billion. Both car companies still trail far behind the value of Japan's Toyota, which has a market cap of more than $234 billion.
MORE: Elon Musk announces Tesla's 1st European Gigafactory will be in Berlin
Tesla, a relatively new player to the industry, was founded by CEO Elon Musk in 2003. Volkswagen's history dates back to 1930's Germany.
Surpassing the $100 billion market cap could mean a big pay bump for Musk, potentially unlocking a pay package worth more than $50 billion for the CEO, the Wall Street Journal reported.
Stock for Tesla has soared in recent months, more than doubling in value since late October 2019. The market rally may have been driven by news of high third-quarter profits and global expansion -- the company successfully opened a Gigafactory in China and announced plans to build one in Germany.

Friday, 24 January 2020

Volkswagen CEO Confident He Can Catch Tesla in Electric Car Race

a car parked on the side of a building: Robotic arms scan the body of a VW ID.3 electric automobile at the factory in Zwickau.

(Bloomberg) -- Volkswagen AG Chief Executive Officer Herbert Diess is sending a message to Elon Musk: We’re coming for Tesla Inc.
While Tesla is paving the way in electric cars, the world’s biggest automaker is buying software companies and ramping up investments in sustainable vehicles and battery cells, Diess said Friday at the World Economic Forum in Davos, Switzerland.

“It’s an open race,” Diess said in an interview with Bloomberg TV. “We are quite optimistic that we still can keep the pace with Tesla and also at some stage probably overtake,” the U.S. carmaker.

Tesla’s market value surpassed Volkswagen’s for the first time this week, even as the U.S. electric-car leader sells a fraction of the cars VW churns out and has yet to record an annual profit.
Still, Tesla has a competitive edge in electric cars and software, technologies that are underpinning a shift toward cleaner mobility. The threat is underscored by Musk’s plan to establish a factory near Berlin, in the heart of Germany’s automotive industry.
Diess last week called on his top managers to speed up overhaul efforts to make the German industrial giant more agile or risk being pushed aside.
“The company which adopts fastest and is most innovative but also which has enough scale in the new world will make the race,” Diess said Friday.
Tesla isn’t Diess’s only concern. The CEO was among executives who attended a dinner with U.S. president Donald Trump in Davos on Tuesday. While the meeting was “positive,” the threat of U.S. tariffs on European carmakers hasn’t been averted, he said.
“It’s very difficult to read President Trump but he stated that he’s still not happy with Europe,” Diess said. “We’re doing what we can to avoid tariffs.”
Volkswagen has been relatively resilient so far to industry headwinds exacerbated by trade friction, higher tariffs and a slowdown in China, the German manufacturer’s largest market. The company also will have to comply with Europe’s new fleet emission targets, he said, meaning VW will have to sell more sustainable cars or face penalties.
“2020 for the auto industry will be a very difficult year,“ Diess said. “But we’re doing the right things to be competitive.”
To contact the reporters on this story: Christoph Rauwald in Frankfurt at;Francine Lacqua in London at
To contact the editors responsible for this story: Anthony Palazzo at, Stefan Nicola

Thursday, 23 January 2020

The ideal time not to buy an electric car

This is not, I now realise, an ideal time to have to replace your car. In fact, it is rotten timing since the entire auto industry is at one of those inflection points where almost any purchase is going to be a mistake.  Petrol, hybrid, electric: each is replete with pitfalls. These are dilemmas not seen since the late 1880s, when people sat around trying to decide between a Benz Patent-Motorwagen and a new horse. (The consumer affairs magazine Which Nag? was still recommending horses well into the 1900s as a natural alternative to the Ford Model T, leaving many riders frustrated as the number of charging points for horses dwindled.) The obvious solution would seem to be to buy an electric car — but the even more obvious solution is to buy an electric car in five years’ time. Electric is the clear way to go, but buy too early and I’m stuck with a car I daren’t drive distances, that takes too long to recharge and with an early version of something that will improve significantly in cost, range and quality over the next few years. In five years, this would be a no-brainer — but in five years I’ll be five years too late to wherever I’ve got to get to next weekend.  People keep telling me how quickly you can recharge a car these days. Apparently, it can take as little as 30 minutes with the superfast equipment (and a mere three to four hours with more ordinary kit). That’s great if you are shopping and have found one of the two charging points on the high street but you wouldn’t want to spend that kind of time at a petrol station. Half an hour at a petrol station is almost a death sentence. Do you have any idea how many Mars bars I can get through in that time?  So the smart move would be to sit tight. My car is still running tolerably well and I quite like the fact that it already has enough dents to make me less stressed about driving in London. The problem is that it is a diesel car and, from next year, the Mayor of London is going to start taxing me just to move it out of the driveway.  I could allow myself to be persuaded into investing early in the government’s promise to supercharge the electric-car infrastructure. But then I bought the diesel because I was persuaded by an earlier government policy that favoured them as more environmentally friendly on the grounds of their greater fuel efficiency.  No wonder the auto industry is struggling. No sane person would buy a new or newish car now. Consider the options. I could go for another petrol engine but the green agenda means that they will soon be facing the same sort of punitive penalties as the diesels. I could be an early adopter of an electric car but it will be a monumental nuisance for a while and then, in three years’ time, I’ll watch all the newly improved models which I won’t be driving myself. It is worse than getting a new iPhone: you just know there will be a better one within 10 months. I am fortunate enough to have the option of fitting a charging station outside the house but that’s at least another £500 and my wife may not look kindly upon being made to relinquish the driveway. As for hybrids, they feel like the PalmPilot of motoring, a short-term fix to get you from Filofaxes to smartphones. You cannot convert a hybrid to a full electric so, in the end, you are still stuck with what is a petrol car once the highways go fully electric. If you were guaranteed to enjoy 20 years unimpeded motoring without some new fossil-fuel charge for those wishing to refuel at London’s one remaining gas station, they might be an option. But right now they look too much like a temporary solution. Which leaves only one option: a cheap, second-hand petrol car, clean enough to avoid the Ultra Low Emission Zone pollution charge for a couple of years but cheap enough for me not to have to worry about ditching it as soon as the electric infrastructure is in place. So it’s going to have to be a new, old, not-too-green-but-not-too-not-green car and, ideally, not too soon but soon enough. This is the problem with the almost tangible future; the lead-in times are a killer.

Tuesday, 21 January 2020

Wheels in motion for Jersey electric car-sharing club

Evie cars in St Helier
A new electric car-sharing club is ready to hit the road in Jersey.
EVie, in St Helier, is starting with four vehicles and hopes to have 20 operating by the end of the year, expanding to 40 by the end of 2021.
Parish politician Constable Simon Crowcroft said such a club would help address climate change.
The scheme is starting at four parking spaces in St Helier, with people being able to book cars from £7.50 an hour.
Members will have to download an app to book and pay for the hire. They also have to be over the age of 23 and have a full licence.
Until charging points are installed at the approved spaces, the BMW i3 cars will be taken away at the end of the day for overnight charging, EVie founder and chairman Gavin Breeze said.
He said the range of the vehicles "would not be an issue" on the 9-mile by 5-mile (14km by 8km) island.
Mr Breeze said it was hoped that, as well as making it cheaper than owning a car, it would reduce the "huge pressure on parking everywhere".
Constable Crowcroft said such a club was "entirely consistent" with government plans "to address the climate change emergency and reduce our carbon emissions" and would provide "affordable access to mobility for all."
The company also plans 100 dockless electric bicycles on the island in the future.

Monday, 20 January 2020

Subaru sets mid-2030s target to sell only electric vehicles worldwide

Subaru sets mid-2030s target to sell only electric vehicles worldwide
Japan’s Subaru Corp (7270.T) set a target on Monday for all the vehicles it sells worldwide to be electric by the first half of the 2030s, in a move toward its long-term goal of a carbon-free society.
The news comes as Subaru has strengthened capital ties with Toyota Motor Corp (7203.T), in a trend of global automakers joining forces to slash development and manufacturing costs of new technology.
“Subaru’s strong commitment and dedication toward car-manufacturing that we have cultivated throughout our history remain unchanged,” President Tomomi Nakamura said in a statement.
By 2030, the Japanese automaker added, at least 40% of all of its cars sold worldwide would comprise all-battery electric vehicles or hybrid vehicles.
Subaru, which produces the Outback and Forester SUVs, is known for its horizontally placed boxer engines, along with its EyeSight autonomous driver assist and all-wheel-drive technologies.
Automakers worldwide are scrambling to chase scale, manage costs and boost development of the self-driving cars, electric vehicles and new mobility services that are upending the industry.

Tesla moves a step closer to opening first European factory with German property deal

Tesla moves a step closer to opening first European factory with German property deal

U.S. electric car pioneer Tesla (TSLA.O) has agreed to buy a property on the outskirts of Berlin, bringing it a step closer to opening its first European factory, local authorities said on Sunday.
The U.S. carmaker last November announced plans to build a giant factory in Gruenheide, in the eastern German state of Brandenburg, giving it the coveted “Made in Germany” label just as local rivals prepare to launch competing models.
Tesla’s board of directors approved a purchase agreement with the state of Brandenburg on Saturday to acquire a 300-hectare property, Brandenburg government spokesman Florian Engels said in a statement. The state parliament’s finance committee had already approved the sale on January 9.
A Tesla spokeswoman confirmed the deal.
The agreement states a preliminary property price of 40.91 million euros ($ 45.36 million) which can be amended if an external review provides a different value, Engels said.
The property is in a designated industrial area and is being checked for weapons from World War II as there are most likely unexploded U.S. bombs still in the ground, he added.
Politicians, unions and industry groups have welcomed Tesla’s move which is expected to create up to 7,000 jobs in Brandenburg.
But some 250 locals took to the streets to protest on Saturday, fearing the factory could endanger the water supply and wildlife in the surrounding forest.

Sunday, 19 January 2020

Electric car boom drives GKN-Delta link-up

File photo dated 04/07/11 of a GKN sign, as investment giant Melrose has offered to inject up to £1 billion into the pension scheme of GKN which is said to be almost twice the amount of GKN's plans to reduce the deficit in the scheme. PRESS ASSOCIATION Photo. Issue date: Monday March 19, 2018. GKN shareholders will decide on March 29 whether to accept Melrose's bid for the company. See PA story INDUSTRY GKN. Photo credit should read: David Davies/PA Wire

GKN Automotive, the world’s largest supplier of driveline technology, is partnering with Delta Electronics of Taiwan to accelerate development of power systems for electric vehicles as manufacturers prepare to launch a slew of battery powered cars to meet new emissions targets. The automotive component supplier, acquired in 2018 by buyout specialist Melrose Industries after a bitter £8bn bid battle for engineer GKN, said the “strategic collaboration”, which will be announced on Monday, would strengthen its position as a leading eDrive supplier. Together the two companies will invest about £100m a year in developing standardised eDrive solutions for the next generation of battery powered vehicles. The partnership with Delta, a specialist in power electronics, will enable GKN to offer a more competitive and “scalable, next-generation 3-in-1 eDrive systems” within three years, said Liam Butterworth, chief executive of the business. These combine the electric motor, gearbox and power electronics into a single package that would reduce cost, weight and packaging for car manufacturers. Competitors in eDrive such as Bosch and ZF of Germany already have their own power electronics units. The move comes as the car industry is suffering the double whammy of a global slowdown in sales and tougher emission targets from the EU. Under EU rules, carmakers must lower average CO2 emissions from the vehicles across their fleet to 95g per km, or face penalties that could run into hundreds of millions, even billions, of euros. The decline of diesel is forcing carmakers to embrace battery technology more quickly to avoid fines and a torrent of electric vehicles is due to hit the market in the coming two years to help them comply with the new rules. As a result some carmakers are joining forces to speed up new electric vehicle launches. For example, Ford and VW last summer significantly expanded their existing global alliance with agreements to collaborate on electric vehicles and self-driving technology. Toyota has also joined forces with Subaru and Suzuki to invest in electric cars. Suppliers will have to keep up with them, however and Roland Berger, the management consultancy, estimates the market for electric driveline systems could be worth more than £12bn by 2030. GKN is already a leader in conventional driveline, which transfers power from the transmission to the wheels. The vast bulk of its business remains focused on fuel-powered vehicles but in recent years it has invested heavily in the transition to electric cars. In 2019, Melrose announced it had sold 1m eDrive units. Taiwan-based Delta, with annual sales of $9bn in 2018, is a global provider of switching power supplies and thermal management products. It sells electric and hybrid vehicle components, including on-board chargers, as well as charging systems. Mr Butterworth said the collaboration with Delta represented “a significant milestone” in the group’s electric vehicle strategy. It would significantly increase each company’s technical capabilities and accelerate time to market, he said. Eventually the two companies could decide to move to a formal joint venture, although this could be two years away, he added. Within three years, the new 3-in-1 eDrive units would be available for cars across most vehicle types — from city cars to SUVs. Research and development would be done in the UK and Germany, while the systems would be built in China and Europe.

Saturday, 18 January 2020

Volkswagen to buy 20% of Chinese battery maker Guoxuan amid electric push

Volkswagen to buy 20% of Chinese battery maker Guoxuan amid electric push
Volkswagen AG (VOWG_p.DE) is set to take a 20% stake in Chinese electric vehicle battery maker Guoxuan High-tech Co Ltd (002074.SZ), two sources told Reuters, as the German firm accelerates its electric push into the world’s largest auto market.
The deal would mark Volkswagen’s first direct ownership in a Chinese battery maker and comes as the Wolfsburg-based automaker strives to meet a goal of selling 1.5 million new energy vehicles (NEVs) a year in China by 2025, including plug-in hybrid cars.
The top foreign automaker in China plans to acquire the stake in Shenzhen-listed Guoxuan via a discounted private share placement in the coming weeks, the two sources with knowledge of the matter said. Based on Guoxuan’s market capitalization of $ 2.8 billion, a 20% stake in the company at present is worth about $ 560 million.
The deal’s details have been mostly finalized and the two firms are waiting for new Chinese regulatory rules on private share placements that will provide a more flexible pricing mechanism and shorter lock-up periods for majority shareholders, said one of the people, speaking on condition of anonymity.
After the stake purchase, Volkswagen will become the battery maker’s second-largest shareholder with a 20% stake, behind Zhuhai Guoxuan Trading Ltd, a firm controlled by Guoxuan’s founder Li Zhen, which currently holds 25%.
Guoxuan is among a swathe of mid-tier Chinese battery makers behind CATL (300750.SZ) and BYD (002594.SZ). It is based in China’s eastern city of Hefei, where Volkswagen is also building electric vehicles with JAC Motor (600418.SS), one of a number of its Chinese joint venture partners.
A third source, who declined to be named due to the sensitivity of the matter, said Volkswagen has long wanted to control a battery maker to better manage its supply chain.
Volkswagen declined to comment. Guoxuan and the China Securities Regulatory Commission did not immediately respond to requests for comment.
To achieve its NEV sales goal in China, Volkswagen has built a new $ 2.5 billion electric vehicle plant with partner SAIC Motor (600104.SS) that will have annual output capacity of 300,000 cars and is also revamping manufacturing facilities in China’s southeastern city of Foshan to build electric cars with partner FAW Group.
Volkswagen has also identified CATL as a strategic supplier and Volkswagen board member Stefan Sommer told Reuters in July last year that it could even build its own battery cell manufacturing plants in China.
“By holding a stake in the top Chinese battery makers, carmakers can gain more bargaining power on battery prices,” said Yale Zhang, managing director of Shanghai-based consultancy AutoForesight. “Foreign carmakers are now catching up with their Chinese counterparts on securing battery supplies in China.”
Volkswagen’s rivals in China include Tesla (TSLA.O), which earlier this month began delivering cars from its $ 2 billion factory in China. The U.S. electric car maker eventually plans to manufacture 250,000 vehicles a year in the plant’s first phase.
China has been a keen supporter of NEV – pure battery electric, hybrid and plug-in hybrids – and has started implementing NEV sales quota requirements for automakers.
However, cuts to subsidies have dealt the market a blow, with NEV sales contracting for the first time last year. Sales this year are likely to be flat or rise only slightly, according to China’s top auto industry association.

IPhone maker Foxconn could work with Fiat Chrysler on electric cars

The logos of automobile companies (LtoR) Abarth, Lancia, Fiat, Alfa Romeo and Jeep are pictured at the entrance to the Fiat Chrysler Automobiles (FCA) at the Fiat Mirafiori car plant on May 27, 2019 in Turin, northern Italy. - French and Italian-US auto giants Renault and Fiat Chrysler are set to announce talks on an alliance, with a view to a potential merger, informed sources said on May 26, 2019. (Photo by MARCO BERTORELLO / AFP)        (Photo credit should read MARCO BERTORELLO/AFP/Getty Images)

Hong Kong (CNN Business)Taiwan's Foxconn might soon join forces with Fiat Chrysler to develop electric cars.
Best known for making iPhones for Apple (AAPL), Foxconn said in a statement on Friday that it is working with the Italian-American carmaker to "explore the possibility" of forming a joint venture to produce electric vehicles and develop a platform for cars that can connect to the internet.
"If the companies move forward, the plan would be to manufacture electric vehicles in China for China's domestic market with the potential to export to other markets in the future," Foxconn said.
    Shares in Foxconn (HNHPF) closed up 2.6% in Taiwan on Friday.
    The company's direct shareholding in the joint venture would be 40% or less, according to a filing submitted to the Taiwan Stock Exchange on Thursday.
    Fiat Chrysler (FCAU) did not respond to a request for comment.
    Foxconn has deep ties to mainland China and has been investing aggressively in prominent Chinese transportation startups, including ride hailing giant Didi Chuxing and electric carmaker XPeng.
    The contract manufacturer's plans to join forces with Fiat Chrysler come as China's electric car market faces a few headwinds.
    Beijing wants new energy vehicles, a category that includes electric and plug-in hybrid cars, to make up at least a fifth of the country's auto sales by 2025.
    But sales of these cars in China shrank by 4% to 1.21 million last year. Demand was limited by the slowing economy and the government's decision to slash subsidies in order to thin out the country's overcrowded field of electric car makers.
    Foxconn and Fiat Chrysler would be taking on several Chinese rivals and heavyweights like Tesla (TSLA), which just opened a new factory in Shanghai and is betting big on China.
      Fiat Chrysler, which announced last year it would merge with Peugeot owner PSA Group, is also late to China's electric car game. Other traditional carmakers such as Volkswagen (VLKAF)Ford (F) and GM (GM) have already been pumping millions of dollars into manufacturing new energy vehicles in the country.
      China is already a challenging market for Fiat Chrysler. In October, the company reported that third quarter sales in the Asia Pacific region fell 24% year on year, mainly because of weak sales by its China joint venture with GAC Group.