|Bid||64.54 x 150000|
|Ask||64.70 x 150000|
|Day's Range||63.71 - 65.09|
|52 Week Range||58.10 - 86.71|
|Beta (3Y Monthly)||0.79|
|PE Ratio (TTM)||8.83|
|Earnings Date||Nov 6, 2019|
|Forward Dividend & Yield||3.50 (5.37%)|
|1y Target Est||83.76|
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Bayerische Motoren...
(Bloomberg) -- Chancellor Angela Merkel wants to help offset the higher costs of cleaner vehicles by putting a price on carbon-dioxide emissions, potentially offering a lift to Germany’s vital auto industry as it grapples with the high-risk transition away from the combustion engine.Germany and its automakers are facing a “Herculean task,” Merkel said Thursday at a ceremony opening the Frankfurt car show to the public. While short on specifics, the German leader backed efforts to encourage consumers to buy more environmentally friendly products such as battery-powered cars fueled by renewable power.“We want to direct the behavior of people in a certain direction,” she said. “The pricing of CO2 is the right way to make clear that all innovations should follow the goal of emitting less CO2. If we do this in a long-term and accountable way, there will be the incentives to move innovation in the right direction.”Volkswagen AG, Daimler AG and BMW AG are facing tough times. Pollution concerns -- intensified by VW’s 2015 diesel-cheating scandal -- have tarnished the industry’s image and triggered massive investment in electric vehicles. Those costs had already started squeezing earnings when almost a decade of uninterrupted industry growth led by China came to a halt. The consequence is Germany’s car production slumping to the lowest level since at least 2010.The looming end of the combustion-engine era and the dramatically-increasing importance of digital technologies in cars, pose an unprecedented threat to the industry’s traditional business model. A slew of profit warnings from manufacturers like Mercedes-Benz maker Daimler to parts makers like Continental AG provided fresh evidence that times have become rough.Merkel spoke after John Krafcik, the chief executive officer of Waymo. The Alphabet Inc. unit is widely regarded as the global leader in self-driving technology and represents a risk to the country’s car brands, which are largely focused on motoring thrills. Krafcik offered a cooperative tone, even though German manufacturers are wary of allowing the Google parent access to sensitive customer data.“It’s not about competing with car companies. It’s to enable, not disrupt companies in the automotive space,” said Krafcik. “Developing self-driving technology takes a lot of time. There are no shortcuts. We can’t do this on our own.”Germany is teetering on the brink of recession, and the auto industry is pivotal to the economy’s health. Carmakers such as Volkswagen, Daimler and BMW as well as parts suppliers like Robert Bosch GmbH and Continental employ about 830,000 people in the country and support everything from machine makers to advertising agencies and cleaning services.Germany’s auto industry is trying to respond. Electric cars, such as the flashy Porsche Taycan and more affordable VW ID.3, dominated media presentations this week at the Frankfurt trade fair and more models are in the pipeline.Daimler CEO Ola Kallenius backed Merkel’s CO2 pricing plan, saying at panel discussion in Frankfurt that there are costs related to fossil-fuels and it would make sense for a global plan to help fight climate change.For the auto industry, any signs of support would be welcome. Demand for electric cars has been sluggish, and Merkel had to surrender her goal to have 1 million electric cars on German roads by 2020. Sales of hybrid and electric cars in the country last year totaled a mere 55,000 vehicles, or 1.6% of the market.In addition to boosting efficient technologies, the country needs to accelerate the roll-out of charging stations to ease consumer concerns, she said.“If one believes that climate protection is a task for mankind, and I believe it is, then we must pay this price because otherwise we will have to pay a totally different price,” Merkel said.(Adds comment from Daimler CEO in 10th paragraph)To contact the reporters on this story: Christoph Rauwald in Frankfurt at email@example.com;Arne Delfs in Berlin at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Palazzo at email@example.com, Chris Reiter, Raymond ColittFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- It only took a decade for traditional automakers to take electric cars seriously and offer more than a smattering of test-the-water models.Now comes the hard part: Getting consumers to buy them.At Frankfurt’s 2019 car show, Volkswagen AG Chief Executive Officer Herbert Diess laid it on thick, calling on governments to give up coal-fired power as he unveiled the electric ID.3 car-for-the-masses. At the Mercedes-Benz stand, where the Daimler AG brand was showing the prototype of an electric S-Class sibling, real beech trees framed massive screens displaying schools of digital fish.The message to environmentally conscious consumers: we’re with you. But a marketing blitz alone won’t wash away the deep uncertainties facing electric cars -- obstacles little changed since carmakers’ initial forays with models like the Nissan Leaf and BMW AG i3. Customers don’t like paying up for new technology they’re unsure about, and they’re worried they won’t reliably get to where they want to go.“The next big thing is not going to be about the cars, because they will come,” Carlos Tavares, president of the European Automobile Manufacturers Association and CEO of Groupe PSA, said Wednesday. “The next big thing is about affordable mobility. The next big thing is about how we make this work for the biggest number of people.”So far, electric cars have only proliferated in countries with significant sweeteners. Once they go, sales of battery models crater. Demand in China, the world’s biggest electric car market, fell 16% in August -- its second straight decline -- after the government scaled back subsidies. Carmakers can reduce prices, but then only cut into profitability that in most cases has been nonexistent.Consumers are similarly sensitive elsewhere. Demand in Denmark collapsed when the government phased out tax breaks in 2016.“We’ve been talking about EVs for years, but this year the real production cars showed up,” Max Warburton, an analyst at Sanford C. Bernstein, wrote in a note. “Should we be celebrating these cars, given the poor margins that most will have?”Across Europe, sales of new plug-in hybrids and fully-electric cars last year made up 2% of total registrations. That’s a tiny market to tussle over for the likes of VW’s ID.3, with a price point below 30,000 euros ($33,009), Tesla Inc.’s Model 3 and Mercedes’s gleaming lineup of plug-ins. Yet carmakers have little choice but to boost their offering to keep pace with regulation, or face fines.Consumer demand “can’t be mandated,” Daimler CEO Ola Kallenius said at the show. Mercedes-Benz is adding at least 10 purely battery-powered cars through 2022 at a cost of more than 10 billion euros, starting with last year’s EQC SUV, so the carmaker’s lineup can to meet stricter emission limits.A lot of factors are moving in the right direction. The ID.3’s price point and basic range of 330 kilometers (205 miles) sets the car apart from previous efforts that needed meticulous pre-planning for longer trips. At the top end, there’s now the $185,000 Porsche Taycan Turbo S, and a mid-range that’s rapidly filling out from SUVs like the Jaguar I-Pace and Audi e-tron.Patchy charging infrastructure is improving too. Ionity, a consortium of Daimler, VW, Ford Motor Co., BMW and now Hyundai Motor Co., is on track to finish building a network of 400 European fast-charging stations by next year to make long-distance travel easier.Lean YearsFor carmakers, this will mean some lean years -- at least to 2025 when battery prices are expected to come down -- during which lucrative conventional SUVs must subsidize poor returns from their electric cousins. VW will need “patience” until the ID.3 brings significant profit “joy,” Chairman Hans Dieter Poetsch said.To bridge the gap, the industry is lobbying hard for governments to step up incentives to get to the oft-cited tipping point where driving without a combustion engine becomes normal. In Germany, home to VW, Mercedes and BMW as well as world-leading suppliers like Continental AG, the government sits down next week to discuss broad climate measures. Carmakers are hoping for a bigger slice of subsidies than they got so far.The ACEA on Wednesday called on national governments to boost charging points in Europe to 2.8 million by 2030, a 20-fold increase from 2018.“We need strong support, because if we don’t do it,” simply offering electric cars won’t be enough for sales to take off, PSA’s Tavares said.\--With assistance from Richard Weiss.To contact the reporters on this story: Oliver Sachgau in Munich at firstname.lastname@example.org;Christoph Rauwald in Frankfurt at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, Elisabeth BehrmannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The following are the top stories on the business pages of British newspapers. - German carmaker Bayerische Motoren Werke AG said the Mini factory near Oxford will close from Oct. 31 in the event of a no-deal Brexit, with thousands of workers at the plant going unpaid. - Bovis Homes Group Plc is back in talks with Galliford Try Plc to buy its housing business three months after an earlier offer was rejected as too low and not in the interests of shareholders.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Volkswagen AG and other carmakers warned that trade tensions risk dragging the global economy into a recession as the fallout starts to hit consumers.The gloom of the U.S. and China’s tit-for-tat tariffs cast a shadow over the Frankfurt Auto Show this week, where carmakers were seeking to whip up interest in critical new electric models. The geopolitical volatility adds another layer of uncertainty to an industry in the midst of a radical overhaul as the end of combustion-engine era looms.“We come now into a situation where this trade war is really influencing the mood of the customers, and it has the chance to really disrupt the world economy,” Volkswagen Chief Executive Officer Herbert Diess said in an interview with Bloomberg TV. “China is basically a healthy market, but because of the trade war, the car market is basically in a recession. So that’s a new situation. That’s scary for us.”Concerns about global trade have reached nearly 10 times the peaks seen in previous decades and could shave about 0.75 percentage points off world economic growth this year, according to data compiled by the International Monetary Fund. The auto industry is particularly exposed because of its global network of assembly plants and parts suppliers. Daimler AG, for instance, makes many of its Mercedes-Benz’s SUVs in Alabama and exports them to China and other markets.“What will happen in 2020 will very much depend on what happens with the U.S. and China in the coming weeks,” BMW AG Chief Financial Officer Nicolas Peter said in an interview with Bloomberg TV at the Frankfurt show, Germany’s premier auto exhibition. The German manufacturer assembles most of its sport utility vehicles in South Carolina.After months of talks, the tensions between the U.S. and China remain high. Ted McKinney, the top trade official in U.S. President Donald Trump’s Agriculture Department, called Chinese President Xi Jinping a “communist zealot” in the mold of Mao Zedong. After a summer of bombast and tariff escalation, the two sides have agreed to hold face-to-face working-level staff talks in the coming weeks and a ministerial meeting in Washington in early October.“Everyone is affected by the industry downturn, everyone is suffering,” Continental AG CEO Elmar Degenhart told reporters Tuesday in Frankfurt. Europe’s second-largest auto supplier plans to finalize a review of its sprawling global manufacturing network by the end of this year and doesn’t rule out factory closures or layoffs as part sweeping restructuring plans.Outside the car show, other German industry leaders voiced their concerns about trade risks. Siemens AG Chief Executive Officer Joe Kaeser urged the European Union to assert its voice in the trade conflict between the U.S. and China, saying the specter of a “decoupling” of political and economic systems would break with decades of integration and ultimately risk a global slowdown.“Europe would be well advised to avoid this bilateral decoupling, but it can only achieve this when it is heard as a third force in the world, and that’s not the case at the moment,” Kaeser told journalists in Berlin. There’s a sense that the world is reorganizing into new economic spheres, making it harder for export-oriented companies to do business and creating the risk of “having to decide between friend and foe,” said the executive, who recently returned from a trip to China with German Chancellor Angela Merkel.‘Good Sense’ BrexitOn top of the U.S.-China spat and Trump’s recurring threat to impose levies on European car imports, the industry is bracing for the potential of the U.K. crashing out of the EU without a deal in a few weeks. BMW, which owns the British-based Mini and Rolls-Royce car brands, has set up a 300 million-euro ($330 million) fund to deal with a possible hard Brexit and would reduce output at its plant in Oxford, England, by eliminating a work shift if that happens, CFO Peter said.“We’d have to increase prices, and we have to curtail production to react to such a development,” Peter said on BMW’s contingency preparations for a crash British exit. “The plans are in the drawer.”In a Bloomberg TV interview, PSA Group CEO Carlos Tavares called the prospect “not acceptable” on ethical grounds and appealed to European and British leaders to show “good sense” and avoid a no-deal Brexit.Ralf Speth, the CEO of Jaguar Land Rover, laid out the complexity of an abrupt disruption to trade flows, saying the British manufacturer needs as many 25 million parts a day to be delivered on time and requires six to eight weeks to decide on ordering components. With Prime Minister Boris Johnson insisting that the U.K. will leave the EU on Oct. 31 “do or die,” the auto industry is facing its Brexit crunch time now.“Free and fair trade is best for society. Currently we’re falling back on that,” said Speth, who unveiled a resurrected version of the Land Rover Defender offroader in Frankfurt. “It’s so critical to prepare in the very best way for alternatives. But in the end, no one really knows.For the auto industry, the trade squeeze clouds efforts to show off slick new models like the Porsche Taycan and VW ID.3 as German brands ramp up electric offerings to meet increasingly stringent environmental regulations. Demand disruptions threaten to squeeze profits needed to fund the high-risk rollout.“We hope there won’t be any recession in the mid term or long term, because it would be a self-made recession,” Diess said.(Adds comments from Jaguar Land Rover CEO in third-to-last paragraph.)\--With assistance from Matthew Miller, Benedikt Kammel and Elisabeth Behrmann.To contact the reporters on this story: Christoph Rauwald in Frankfurt at email@example.com;Oliver Sachgau in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Palazzo at email@example.com, Chris Reiter, Chad ThomasFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Germany is at a crossroads, and nowhere will that be more evident than at the Frankfurt auto show this week.Despite sleek new electric models like the Porsche Taycan, the traditional showcase of German automotive excellence risks becoming a platform for protest rather than preening, drawing attention to a generation of young consumers more likely to demonstrate against the car’s role in global warming than shop for a new VW, BMW or Mercedes-Benz.Autos have made Germany into a global manufacturing powerhouse, but pollution concerns -- intensified by Volkswagen AG’s 2015 diesel-cheating scandal -- have sullied the reputation of a product that once embodied individual freedom. More recently, trade woes and slowing economies have hit demand. The consequence is Germany’s car production slumping to the lowest level since at least 2010.“Investors have been fearful about the industry’s prospects for a number of years, and the list of things to worry about doesn’t seem to be getting shorter,” said Max Warburton, a London-based analyst with Sanford C. Bernstein. “There is a general sense that things are about to get worse.”The end of the combustion-engine era and car buyers more interested in data connectivity than horsepower threaten Germany’s spot at the top of the automotive pecking order. Signs of trouble abound. In addition to numerous profit warnings this year, Mercedes maker Daimler AG delayed a plan to expand capacity at a Hungarian factory, parts giant Continental AG has started talks to cut jobs, and automotive supplier Eisenmann filed for insolvency.The car’s fragile standing was evident in the reaction to a deadly accident in Berlin on Friday evening when a Porsche SUV crashed into a group of pedestrians. Stephan von Dassel, the mayor of the district where the incident took place, said on Twitter that “such tank-like vehicles” should be banned in the city.Germany is teetering on the brink of recession, and the auto industry is pivotal to the economy’s health. Carmakers such as Volkswagen, Daimler and BMW AG as well as parts suppliers like Robert Bosch GmbH and Continental employ about 830,000 people in the country and support everything from machine makers to advertising agencies and cleaning services. With factories from Portugal to Poland, the importance of the sector radiates across Europe as well.With emissions regulations set to tighten starting next year, concerns are mounting that companies across the country’s industrial landscape are ill-equipped to deal with the technology transition resulting from climate change and increasing levels of digitalization. IG Metall organized a demonstration in June, with more than 50,000 people rallying in Berlin, to draw attention to the risk of widespread layoffs from what Germany’s biggest industrial union calls “the transformation.”“Far too many companies stick their heads in the sand and rest on their laurels,” IG Metall Chairman Joerg Hofmann said. “If companies continue to act so defensively, they’re playing roulette with the futures of their workers.”The concern is that the future of Germany’s car towns could look something like Ruesselsheim. The home of the Opel brand, which once rivaled VW as the German leader, has faded along with the carmaker’s performance. After years of losses, it was sold in 2017 by General Motors Co. to France’s PSA Group, which is slashing the Opel’s 20,000-strong German workforce by nearly a fifth.“Everybody in Ruesselsheim is worried,” said Servet Ibrahimoglu, owner of a kebab restaurant down the street from Opel’s factory, adding that his business has dropped by a third. “Before at lunchtime, this place was full. Now there’s no one.”The auto industry’s efforts to adapt to the risks will be on display in Frankfurt, and the stakes couldn’t be higher for models like the VW ID.3. The battery-powered hatchback is the auto giant’s first effort in an aggressive push into electric cars, which will make its debut at the Germany’s premier auto exhibition.Under bright lights and blaring music, the show is a throwback to the auto industry’s glory days, but it’s fading as public interest in old-school car show wanes. Toyota, Volvo and Ferrari are among the 30 brands skipping the show. For those still there, the displays will predominantly feature traditional gas guzzlers and other cash cows. Land Rover will unveil a resurrected version of the Defender, the British brand’s iconic offroader.“Instead of presenting new mobility concepts for the future, we’ll see lots of SUVs on stands that have become few and far between,” said Ferdinand Dudenhoeffer, director of the University of Duisburg-Essen’s Center for Automotive Research. “The recession in the global auto business is forcing savings cuts for car manufacturers and suppliers, along with a rapid loss of attractiveness of the classic ‘analog’ car shows.”Make or BreakWhere German brands once tried to outdo one another with outlandish displays like indoor tracks and multistory exhibition spaces, the main drama may take place outside Frankfurt’s sprawling fairgrounds. Greenpeace and Germany’s BUND have called for a mass march on the site on Saturday, joined by groups of cyclists setting off from around Frankfurt to underscore their call for the end of the combustion engine. Organizers are expecting at least 10,000 people. “We’re in the middle of a climate crisis,” said Marion Thiemann, transport-policy expert at Greenpeace. “The biggest problem is the automobile industry.”Despite doubts from environmentalists, automakers have gotten the message that they’re facing a make-or-break moment. The industry is spending billions of euros to develop cleaner vehicles and counter the emergence of ride-sharing services like Uber Technologies Inc., which has a market value equivalent to Daimler, the inventor of the automobile.“I’m absolutely convinced that carmakers will adapt to the situation,” BMW’s labor head Manfred Schoch said during a testy panel discussion with activists in Berlin last week. “Those that don’t will go out of business.”(Adds comment from activist in third-to-last paragraph)\--With assistance from Kristie Pladson, Andrew Blackman and William Wilkes.To contact the reporters on this story: Christoph Rauwald in Frankfurt at firstname.lastname@example.org;Carolynn Look in Frankfurt at email@example.com;Elisabeth Behrmann in Munich at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Palazzo at email@example.com, Christoph Rauwald, Chris ReiterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- The sad degradation of the Department of Justice’s antitrust division continues. An agency charged with upholding the nation’s antitrust laws, without fear or favor, has become just another tool President Donald Trump uses to reward his friends and punish his enemies in corporate America.I don’t know how else you can characterize the news, reported by the Wall Street Journal on Friday, that the DOJ is investigating four major automakers that agreed to abide by California’s stringent tailpipe-emissions standards -- and chose to ignore less onerous rules the Trump administration has proposed.Wrote the Journal: “The Justice Department’s antitrust division is acting on its own accord and without direction from or coordination with the White House, according to one of the people familiar with the investigation.”Sure.And the division didn’t consult with the White House when it tried to block the AT&T Inc.--Time Warner deal in 2017. It was just pure coincidence that Time Warner owned the news network Trump loathed more than any other, CNN. Nor did it consult the White House when it let the Walt Disney Co.--21st Century Fox Inc. deal sail through with only minor changes. Who could possibly have known that Fox chairman Rupert Murdoch was the closest ally the president has in the media?It could well be true that the White House wasn’t consulted before the antitrust division acted. Before he was the named the Justice Department’s antitrust chief, Makan Delrahim was the deputy counsel for the Trump White House. Maybe he doesn’t have to talk to the White House to intuit what Trump wants. He knows who butters his bread.Here’s a little thought exercise. Suppose the four companies -- Ford Motor Co., Honda Motor Co., BMW AG and Volkswagen AG -- had jointly decided to sign onto Trump’s lower emissions plan. Do you think Delrahim’s antitrust minions would be launching an antitrust investigation? I don’t either.The very idea that an automaker can violate antitrust laws by adhering to higher emissions standards is ludicrous. The theory is that the four companies may have talked to each other and then approached California with a proposal. This is apparently evidenced by the fact that the state agreed to lower its emissions standards by a small amount. I have no doubt that the companies consulted with each other before talking to California. No company wants to go up against Trump alone; it makes perfect sense that they would want to band together. It also makes sense that they would negotiate with the state, just as any regulated industry might. That behavior is hardly an antitrust violation.The Journal story also said that the Justice Department fears the deal would limit competition. But for decades, federal and state emissions regulations have kept automakers from courting buyers by competing on emissions standards -- at least on lower ones. The competition that has existed has long been to produce cars that exceed the emissions standards. That kind of competition will remain robust only if automakers wind up abiding by California’s standards.The truth, of course, is that Trump is at war with California, and has been since he took office. California voted overwhelming for Hillary Clinton. California is a blue state. California is in the vanguard of the resistance. (In May, California filed its 50th lawsuit against the Trump administration.)Battling emissions standards is part of that war. It is widely expected that the administration will soon attempt to revoke California’s ability to set its own emissions standards, and declare that they are “preempted” by federal law. This will undoubtedly lead to a court fight, though as my colleague Noah Feldman has pointed out, California’s waiver was built into the Clean Air Act by Congress. Trump’s Environmental Protection Agency really doesn’t have the legal right to withdraw the waiver, but that reality has rarely stopped Trump before.Automakers are now in an awful spot. They’d all made their peace with higher emissions standards, which also allows them to be good corporate citizens. They are technologically capable of meeting the standards. They can satisfy environmentally--conscious car buyers. Because the California standards are followed by 15 other states, automakers have largely used its standards for the entire country. It’s really a nonissue.Or it was until Trump decided to roll back the higher standards the Obama administration had proposed. The California standards offer predictability and certainty. The Trump plan creates uncertainty. It is exactly what companies don’t need, and don’t want.The Justice Department’s decision to scrutinize the agreement between California and the four car companies injects another kind of uncertainty -- a more menacing kind. It suggests that Trump will use the power of the state to bend companies to his will. That’s what happens in places like Russia, or China. It’s not supposed to happen in the U.S.Companies need to know that they can count on the rule of law. There is hardly anything more important. That’s the scariest part of what the antitrust division appears to be doing. Investigating companies for seemingly political reasons makes a mockery of the fundamental idea that the U.S. has a government of laws, not thugs.To contact the author of this story: Joe Nocera at firstname.lastname@example.orgTo contact the editor responsible for this story: Timothy L. O'Brien at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The U.S. Justice Department is investigating whether the decision of four automakers in July to reach a voluntary agreement with California to adopt state emissions standards violated antitrust law, people briefed on the matter said on Friday. The antitrust division's chief, Makan Delrahim, sent Aug. 28 letters to the four automakers saying the government was concerned the agreement "may violate federal antitrust laws" but adding it had "reached no conclusions," according to documents seen by Reuters. The disclosure comes as the Trump administration has ramped up its opposition to automakers seeking to sidestep it on rolling back Obama era fuel-efficiency rules.
General Motors Co has appointed a veteran BMW designer to lead its advanced design studio in Shanghai, a hub for developing future models for the world's biggest vehicle market and beyond. According to three company officials familiar with the matter, Harry Sze, who last month left BMW Group Designworks Shanghai as a creative director, is expected to be officially named as early as early next week as head of GM's studio. Sze, an American national, has worked at BMW Group Designworks for six years in Shanghai and Newbury Park, California.
In honor of the just-released Porsche Taycan, here's a pop quiz: How long does it take for an electric sportscar to go from 0 to 90 miles per hour and back again?If you remember a few years back, electric motors weren't exactly known for speed. The first mass-market example was in Toyota Motor's (NYSE:TM) Prius, and to this day, everyone loves poking fun at the Prius hybrid. You can still find plenty of Prius jokes online.Well, we've come a long way. Wednesday afternoon, Porsche (OTCMKTS:POAHY) released the Taycan - which is fully electric, by the way - and is promoting its new model with a spectacular video of a test run aboard an aircraft carrier.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBelow you see the Porsche Taycan gearing up (so to speak) on the USS Hornet's flight deck. In the video, which you can watch here, the car goes from 0 to 90 mph and then back to 0 mph in just 10.7 seconds.Source: Porsche.comI haven't had a car in a decade - having lived in big cities most of my life - and I'm normally a Tesla (NASDAQ:TSLA) Model S fan. But if I was in the market, I'd want this one! * 7 Stocks to Buy In a Flat Market Porsche seems to have overcome most of the worst stereotypes about electric vehicles (EVs):The 0-90-0 test run proves it can get up and go - the Porsche Taycan has a top speed of roughly 155 mph, comparable to the Model S in "Ludicrous" mode.Plus, Porsche says it can produce an impressive 40,000 Taycans in a year. That's comparable to Porsche's sedan, the Panamera… and it's about double Tesla's first-year production of the Model S! It's also double what Porsche originally had planned for the Taycan. But EVs are clearly in high demand.And, of course, the Taycan has Porsche's classic styling:Source: Porsche.comThe next hurdle to clear is range.The company is advertising a roughly 270-mile range for the Porsche Taycan. That doesn't quite measure up to, say, the Porsche 911 Carrera, which can get over 400 miles on a tank.The internal-combustion engine may be 100-year-old technology, but so far EVs have struggled to compete on range. That's largely due to severe limitations with the current batteries. Batteries 101Right now, EVs rely on the same technology first developed for Sony camcorders in the 1980s: the lithium-ion battery.It's the same battery you'll find in your smartphone and laptop, too. But to power something on the level of a Porsche Taycan, the lithium-ion battery becomes incredibly bulky.That bulk just amplifies one of the other problems with lithium-ion: It has a liquid electrolyte inside that is flammable.Remember the problems with the Samsung Galaxy Note 7? If you tried to bring the phone on an airplane, the flight attendants would confiscate it because the lithium-ion batteries had started catching fire. In early 2018, HP had to recall 50,000 laptops for a similar reason.But electric cars are the future - and, all over the world, regulators are "laying down the law" to get people to make the switch: from California to Germany and even China (which struggles with pollution).So, naturally, carmakers are revving up their search for an alternative battery.Porsche and other German automakers like Audi (OTCMKTS:AUDVF) and Mercedes all want next-generation batteries in their fleets as soon as possible. The German government is providing a $1 billion grant for battery research. Volkswagen (OTCMKTS:VWAGY) and BMW (OTCMKTS:BMWYY) have applied for their slice of that funding.In Japan, a "battery cartel" of sorts has sprung up. The Japanese government, too, is working with researchers - plus major names like Toyota and Panasonic (OTCMKTS:PCRFY) - to get this particular new technology to market. Toyota is pulling out all the stops to deploy it for mass production by summer 2020, when the Olympics come to Tokyo.Why? Well, with this battery, you could get DOUBLE the range after just 15 minutes of charging.Plus, you don't need the liquid electrolyte, so these batteries aren't flammable. In one memorable test, a startup called Ionic Materials shot its battery with a Remington .22. It took three bullets, did not catch fire, and kept working!As an investor, this technology is ideal for a pure play on the battery revolution. Invest Where "Big Auto" Is Dropping Major CashI often talk about "picks and shovels" investing. And that's because if you look back at the 1849 Gold Rush, it was the folks supplying the picks and shovels who ultimately got rich.Therefore, at Investment Opportunities, I'm recommending companies that supply this new technology -- nicknamed the "Jesus Battery."Any competitors that have it will CRUSH Tesla, which may as well flush all the money it's spending on lithium-ion batteries down the toilet. Find out exactly what makes this battery so miraculous here.If you ever wanted to invest in the coming electric car revolution, but weren't sure how, THIS is your chance.I know I do.So I found a company that holds key patents.Automakers like Toyota are relying on this tiny company for its electric cars. Yet the company is totally off the radar.That makes now the right time to get in… before everyone else. I've got a full presentation on the investment opportunity in this "Jesus Battery," which you can view for free by clicking here.Matthew McCall left Wall Street to actually help investors -- by getting them into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post Porsche Taycan: Do We Finally Have a "Tesla Killer"? appeared first on InvestorPlace.
(Bloomberg) -- BMW AG’s top labor representative is batting away gloomy predictions for the industry, saying he expects global demand to recover and the luxury carmaker’s output to jump by as much as a fifth over the next few years.BMW, which includes the Mini and Rolls-Royce brands, will grow production by a market-beating 2% to 3% annually until about 2025, Manfred Schoch, who’s also deputy chairman of the company’s supervisory board, said in an interview. The forecast -- against a backdrop of shrinking key markets -- will require BMW to build two new plants.“We don’t expect the global car market to stagnate but grow by 1% to 2%,” said Schoch. “Based on our model planning at BMW we expect annual growth of 2% to 3%. So we need two more plants to do this, one in China and one in Europe.”A spokesman for BMW declined to comment.Such a rise would equate to as many as 500,000 additional cars by 2025, on top of the 2.5 million sold last year. BMW recently started output at a new factory in Mexico, and plans a 1 billion-euro ($1.1 billion) site in Hungary. It’s also boosting capacity in China to 650,000 cars from about 400,000 currently.The rosy assessment from Schoch contrasts with signs of gloom in the industry, which is under pressure from a global economic slowdown and the strains of investing in electric-car production. Munich-based BMW, which this month replaced its chief executive officer after just one term, cut its outlook in May after making a provision in an alleged cartel case.Even excluding this charge, automotive returns have dropped to the lowest point in 10 years.BMW in June moved up a goal for a lineup of 25 electric and plug-in vehicles by two years to 2023. This puts the maker of the X7 sport utility vehicle on track to sell roughly 700,000 electrified vehicles by 2025. The manufacturer currently builds the i3 electric city car in Leipzig, Germany, and will make the upcoming iNext and i4 battery sedan at two other German sites.“Setting up for the i4 in Munich will mean closing down the plant for nearly three months,” said Schoch. “But we’ve got to ready factories here to make electric cars. Otherwise we face sitting among ruins like in Detroit.”And the pressure doesn’t stop there. At next week’s Frankfurt car show, anti-climate change protesters plan to bring the world’s biggest vehicle show to a standstill as manufacturers’ electric-car offerings sit next to gas-guzzling SUVs.“If you look at an average household today, from the fridge to the hair dryer to the razor, all of these things are electric, the only thing that isn’t is the car,” said Schoch. “Cars will turn electric too, and whoever isn’t on board with this is a goner.”To contact the reporter on this story: Elisabeth Behrmann in Munich at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Palazzo at email@example.com, Elisabeth Behrmann, John BowkerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Once a household name for its satellite navigation for cars, TomTom NV has taken a backseat in recent years as smartphones, loaded with apps like Google maps, surged in popularity.Now the Dutch digital mapping company is betting that your car needs directions more than you do. Over the past few years, TomTom has been building high-definition or “dynamic” maps for self-driving cars. It’s a decision that could help it challenge tech platforms, like Alphabet Inc.’s Google, as cars are increasingly sold with more autonomous capabilities.“We used to make maps for humans, but now we make maps for robots,” Alain De Taeye, member of TomTom’s management board, said at a journalist briefing in Amsterdam.TomTom’s share price peaked in 2007 at around 100 euros a share. But this summit coincided with the launch of the iPhone. A year later, TomTom reported sales of more than 12 million personal navigation devices, it’s record high. By 2011, it announced a restructuring program that included forced lay-offs to counter lower sales and in 2017, TomTom took a 169 million-euro write down on its consumer unit. It’s share price has since hovered at around 20 euros.TomTom now finds itself with several deep-pocketed rivals battling for the future of car navigation, including Apple Inc., Google and HERE Technologies, the digital mapping company controlled by BMW AG and other German car makers. In a blow for TomTom, longtime partner Renault SA and associates Nissan Motor Co. and Mitsubishi Motors Corp. last year signed on with Google’s Android operating system to supply standard-definition maps.On a quest to claw its way back, TomTom is ditching unwanted business lines, like the Telematics fleet-management business, and doubling down on HD maps. TomTom says it’s been able to differentiate itself from competitors on HD maps by being independent and not having an advertising-based business model like Google’s.In addition to sensors and other features, HD maps are an important part of autonomous driving, which can incorporate different levels of human assistance – from very little to none whatsoever in even the harshest weather conditions.HD maps, stored on a car’s computer system, replicate every lane, guard-rail, road edge and pole that a vehicle sees, helping cars locate their positions within centimeters. Those features are critical to avoid crashing into nearby cars, but they also help the car discern which traffic light at a busy cross-section it should obey or identify a speed sign hidden by a truck.So far, TomTom has publicly announced HD partnerships with Baidu Inc. on its Apollo driverless project, and with Renault on the carmaker’s SYMBIOZ autonomous driving program. It announced in March that it had won multiple deals to provide HD maps to major car makers, but declined to say which ones. Those contracts, which typically last more than 10 years because of ongoing service needs, have so far resulted in a roughly 60% market share in HD maps for TomTom, according to Willem Strijbosch, the company’s head of autonomous driving.“Not every car maker has made their decision yet on who will support them on HD maps,” said Strijbosch. “But out of all the car makers that have made a decision, we see that the big ones – the top 10 – are picking TomTom.”TomTom collects traffic and road data on more than 67 million kilometers around the world using 600 million different devices – including its mobile mapping cars, sat navs, and mobile phones. Of those roads, TomTom has so far covered only 400,000 kilometers in HD. Its HD maps are currently only available on highways in the U.S., Canada, Europe, South Korea and Japan but it is working to add more side roads as the technology advances.The mapping firm doesn’t disclose revenue from HD maps but in July it boosted its full-year guidance, saying it now expects sales from its location technology to grow 17% to 435 million euros, up from 430 million euros forecast in April. That amounts to around two-thirds of the group’s overall expected revenue.“The single biggest risk to the TomTom investment case is costs,” said Wim Gille, head of equity research at ABN AMRO. He said the company still has lots of ground to cover on HD maps compared to its standard definition maps and clients will want reassurance that the company can continue to serve them in a decade from now.While HERE is out-earning TomTom in revenues, Gille said, it’s also spending around 1 billion euros a year in operating expenses, about twice as much as TomTom. Still, he said both companies have what it takes to build and maintain an HD map.“The market is big enough for both of them,” he said.To contact the reporter on this story: Natalia Drozdiak in Brussels at firstname.lastname@example.orgTo contact the editors responsible for this story: Giles Turner at email@example.com, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Faraday Future, the electric-vehicle upstart that was on the brink of insolvency last year, hired a BMW AG veteran to lead efforts to finally bring its debut car to market and raise more money.Carsten Breitfeld, who spent two decades at BMW and then 3 1/2 years leading two other electric-vehicle startups, will take over as chief executive officer from Faraday founder Jia Yueting, who’s becoming chief product and user officer. Faraday aims to start production of its 1,050-horsepower FF 91 model next year and follow that up with its mass-market offering, the FF 81, in 2021.“The top priority right now is fundraising. We will have to go to the capital markets,” Breitfeld said in an interview with Bloomberg Television. “In the first stage, it will be a three-digit million dollar amount that’s still missing to make all of this happen.”Breitfeld will also focus on hiring around Silicon Valley. Faraday has 600 employees globally now, almost half of which are in California.The FF 91 will be be available in two- or three-motor configurations and be built in small numbers in Hanford, California. It’ll sell for upwards of $150,000 and come standard with zero-gravity, lie-flat rear seats. Eleven screens inside the cabin boast about 100 inches worth of displays, including a 27-inch fold-down monitor for passengers.Breitfeld expects production to start in Hanford within the next 12 months. The FF 81 and another mass-market car being developed will be built in China, which he expects to begin within 2 1/2 years.Faraday won a much-needed cash infusion when it formed a joint venture earlier this year with The9 Ltd., the Chinese online-gaming company. A unit of China Evergrande Group, the property developer owned by Hui Ka Yan, China’s third-richest man, pursued a $2 billion investment last year, though the deal soured over Faraday’s ability to take on additional investors.Jia, who left for the U.S. two years ago amid a cash crunch at his companies in China, is establishing a repayment trust with Faraday equity to resolve his debts, according to the company. In July 2017, a Shanghai court froze 1.24 billion yuan ($182 million) of assets that he and his tech conglomerate LeEco held at the time.Before Breitfeld left BMW, he led the German carmaker’s development of the i8 plug-in hybrid sports car. He became CEO of Byton Ltd. in 2016 and was chief of Iconiq Motors for a few months earlier this year.“What is missing now is execution,” Breitfeld said of Faraday. “This is where I see a bit of my value coming in here, because this company has a great vision.”To contact the reporter on this story: Ed Ludlow in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Trudell at email@example.com, Jonathan RoederFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Today we're going to take a look at the well-established Bayerische Motoren Werke Aktiengesellschaft (FRA:BMW). The...
(Bloomberg) -- Tesla Inc. raised car prices in China, responding to trade tensions that weigh on the country’s currency and have led to oscillating import tariffs on vehicles.The price of a basic level imported Model 3 sedan went up more than 2% to 363,900 yuan ($50,900), Tesla’s website showed Friday. Prices for basic level Model S sedans and Model X sport utility vehicles increased by a similar percentage, to 793,900 yuan and 809,900 yuan, respectively.Tesla is among automakers most affected by the U.S.-China trade tensions, because it has no local production yet and therefore gets directly hit by any increases in tariffs. China threatened last week to increase duties on U.S.-made cars to as high as 50% in retaliation for President Donald Trump’s latest planned levies on Chinese goods.A Tesla spokesperson in China declined to elaborate on the price change, referring to information available on the company’s website.Tesla is constructing a plant in China, an increasingly important market for the loss-making company as incentives for electric vehicles in the U.S. wane. Tesla plans to start producing cars at the factory near Shanghai, Tesla’s first outside of the U.S., by the end of 2019.Chief Executive Officer Elon Musk was in China this week, with his trip including a visit to the new Tesla site. He also made an appearance at the World Artificial Intelligence Conference in Shanghai on Thursday.At the event, Musk said he has never seen anything getting built as fast as the Tesla facility, saying he is “astounded” by the progress at the site. “I really think China’s the future. It’s very impressive,” he said.A decline in the yuan reduces the value of any earnings that Tesla brings back from China and converts to dollars. Earlier this week, the Chinese currency fell to an 11-year low against the dollar.To contact Bloomberg News staff for this story: Chunying Zhang in Shanghai at firstname.lastname@example.orgTo contact the editors responsible for this story: Young-Sam Cho at email@example.com, Ville HeiskanenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
President Donald Trump on Monday said China “very badly” wants to make a trade deal with the U.S. and suggested he would soon meet with Iran’s president.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. China will follow through with retaliatory measures announced Friday and fight the trade war to the end, in the face of the U.S.’s failure to keep its promises, the state-run People’s Daily wrote in a Saturday editorial.Later, the influential Chinese journalist Hu Xijin said on Twitter that the U.S. is “starting to lose China.”On Friday, Beijing unveiled plans to impose additional tariffs on $75 billion of U.S. goods, including soybeans, automobiles and oil. The nation will “walk the talk” in implementing its third round of retaliatory measures, according to the newspaper.China has been forced into countermeasures by U.S. unilateralism and trade protectionism, the paper said, adding that Washington has been erratic in imposing tariffs on China and has shown “amnesia” in honoring its promises.Trade tensions between the two nations escalated on Friday after President Donald Trump said he’s raising tariffs on Chinese imports in response to the measures announced by Beijing. Anticipation of Trump’s actions, which were foreshadowed by a series of angry tweets, sent global stock markets reeling.Tariffs RisingExisting U.S. duties on $250 billion of Chinese imports will rise to 30% from 25% on Oct. 1, while a planned 10% tariff on a further $300 billion in Chinese goods will jump to 15%, starting with the first tranche on Sept. 1, Trump said in tweets Friday.China’s Ministry of Commerce issued a strongly-worded statement on Saturday saying the U.S. was involved in “unilateral and bullying trade protectionism” that puts the normal international trade order at risk.Trump, for his part, suggested in an overnight tweet that he was looking at the “Emergency Economic Powers Act of 1977” in ordering U.S. companies to quit China. “Case closed!” Trump concluded.That measure -- technically, the International Emergency Economic Powers Act -- gives U.S. presidents wide latitude to regulate international commerce at times of national emergencies. It’s unclear how Trump could use the law in the current situation to have U.S. companies bend to his will.Hu, editor-in-chief of the Global Times, a tabloid newspaper controlled by China’s ruling Communist Party, accurately predicted the timing of China’s retaliatory tariffs on Friday.On Saturday, he said China “has ‘lost’ the U.S. already,” citing high tariffs, the ban on telecoms company Huawei Technologies Co. Ltd., political hostility, and actions toward Hong Kong and Taiwan. “We’re facing a completely different United States. We have nothing more to lose, while the US is just starting to lose China,” Xu said.While the Global Times doesn’t necessarily reflect the view of Chinese leaders, Hu has said the paper voices opinions that official sources can’t.Hu earlier tweeted that if U.S. automakers heed Trump’s Friday call for “major American companies” to desert China, they would be giving up the market to Japanese and German brands. “Go back to the US, let each American family have 20 cars,” he tweeted, followed by a smiley face.U.S. importers and retailers decried the latest moves by Trump.“These escalating tariffs are the worst economic mistake since the Smoot-Hawley Tariff Act of 1930 -- a decision that catapulted our country into the Great Depression,” Gary Shapiro, president and CEO of the Consumer Technology Association, said in a statement.(Updates with China’s Commerce Ministry, CTA comment from seventh paragraph.)To contact Bloomberg News staff for this story: Evelyn Yu in Shanghai at firstname.lastname@example.orgTo contact the editors responsible for this story: Sam Mamudi at email@example.com, Ros Krasny, Steve GeimannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. China threatened to impose additional tariffs on $75 billion of American goods including soybeans, automobiles and oil, in retaliation for President Donald Trump’s latest planned levies on Chinese imports that pushed U.S. stocks and farm commodities lower.Some of the countermeasures will take effect starting Sept. 1, while the rest will come into effect from Dec. 15, according to the announcement Friday from the Finance Ministry. This mirrors the timetable the U.S. has laid out for 10% tariffs on nearly $300 billion of Chinese shipments.An extra 5% tariff will be put on American soybeans and crude-oil imports starting next month. The resumption of a suspended extra 25% duty on U.S. cars will resume Dec. 15, with another 10% on top for some vehicles. With existing general duties on autos taken into account, the total tariff charged on U.S. made cars would be as high as 50%.China’s tariff threats take aim at the heart of Trump’s political support -- factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down. Soybean prices sank to a two-week low.The move drew a sharp reaction from Trump that sent stocks tumbling further on concern the talks are falling apart. “We don’t need China and, frankly, would be far better off without them,” he tweeted. “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”Among automakers, Tesla Inc. and Germany’s Daimler AG and BMW AG are the most vulnerable to the additional levies. Shares of the two German companies fell more than 2% in Frankfurt, while Tesla dropped 2.2% in New York.BMW and Daimler ship large numbers of sport utility vehicles from plants in South Carolina and Alabama to China, while Tesla doesn’t yet make its electric cars in the country. Six of the top 10 vehicles exported from the U.S. to the world’s biggest car market are from the two German brands, according to forecaster LMC Automotive.U.S. stocks dropped along with Treasury yields and oil prices. Emerging-market currencies also declined, while havens such as the yen and gold gained.The tariffs beginning in September include 10% on pork, beef, and chicken, and various other agricultural goods, while soybeans will have the extra 5% tariff on top of the existing 25%. Starting in December, wheat, sorghum, and cotton will also get a 10% tariff.While China will impose a new 5% levy on oil, there was no new tariff on liquefied natural gas.In Washington, the initial reaction from the White House was aimed at easing concerns about the fallout. “The amount of money being tariffed is not material in terms of macro growth,” Trump adviser Peter Navarro said on Fox Business Network. The retaliation will “absolutely not” slow growth, he said.China’s announcement comes as leaders from the Group of Seven nations prepare to meet in France and central bankers gather in Jackson Hole, Wyoming, to discuss issues such as the global slowdown. The Chinese announcement was foreshadowed by a tweet from Hu Xijin, the editor-in-chief of the Global Times, a newspaper controlled by the ruling Communist Party.China promised earlier this week that any new tariffs from the U.S. would lead to escalation and retaliation. The U.S. has said it will put 10% tariffs on some $110 billion of Chinese goods starting Sept. 1 and the same levy on another $160 billion on Dec. 15, a staggered approach aimed at ease the impact on the American economy.After Trump gave the go-ahead earlier this month for tariffs on the nearly $300 billion in Chinese imports that haven’t been hit by higher duties, China halted purchases of agricultural goods and allowed the yuan to weaken.Since then, negotiators have spoken by phone and are planning another call in coming days. People familiar with their intentions previously said that the Chinese delegation is sticking to their plan to travel to the U.S. in September for face-to-face meetings, which may offer a chance for further reprieve.The U.S. side is still hoping for that visit to happen, with Trump’s economic adviser Larry Kudlow telling Fox Business Network that “hopefully we are still planning on having the Chinese team come here to Washington D.C. to continue the negotiations.”“I don’t want to predict, but we will see,” Kudlow said on Thursday in Washington.(Updates with Trump’s tweet in fifth paragraph. An earlier version corrected source of statement in second paragraph.)\--With assistance from Anthony Palazzo.To contact the reporters on this story: Natalie Lung in Hong Kong at firstname.lastname@example.org;James Mayger in Beijing at email@example.com;Miao Han in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeffrey Black at email@example.com, Brendan MurrayFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Somewhere between Spotify crashing and Alexa failing to locate his favorite sushi place, Rafael Rivera decided he was dealing with an unfinished product.The software developer’s rectangular Echo Auto, perched on the dashboard of his 2005 Mini Cooper, picked up his voice seamlessly over blaring music or air conditioning. But repeated restarts and clunky mapping made the on-the-go hub for Amazon.com Inc.’s Alexa less useful.“Am I part of a beta program?” he recalls thinking. “Is this thing done?”Introduced almost a year ago and shipped to the first invited customers in January, the sometimes-buggy Echo Auto is the most visible element so far of Amazon’s ambition to take Alexa on the road.Behind the scenes, the company is trying to persuade automakers to bake the voice-activated digital assistant into their entertainment systems. Those efforts are gaining some traction—BMW and Audi earlier this year began selling select models that integrate Alexa’s software by default. But Amazon is entering a market already contested by Google and Apple Inc., not to mention automakers leery of ceding control of the dashboard to Big Tech.While colonizing the car probably won’t generate much in the way of revenue at first, just being there would help Amazon position itself for a coming era of voice-based services. “Amazon wants to get into the car in a big way,” says Mike Ramsey, a senior research director at Gartner who tracks the auto industry. “They sense that there is a big opportunity.”Amazon declined to make anyone available to discuss the program, but a spokesman pointed to comments Ned Curic, vice president of Alexa Automotive, made last month to the Automotive News: “The real North Star for us is to be embedded with all the cars,” Curic said. “We’re working very hard to get there because we believe that is the best experience.”The company has said it wants to make Alexa, its hub for trivia, music and Amazon products, ubiquitous. The company built teams in recent years charged with making the software useful beyond the living room, seeking ties to home automation and security companies, building out voice and video calling functionality and even exploring wearable devices and home robots.The first tie between Alexa and an automaker was, like many Amazon efforts, an experiment. In 2016, Hyundai Motor Co. rolled out the first application linking Alexa to a big carmaker in a tool that let owners of some models start their vehicle or set the climate control from an Alexa device.Amazon formalized its push a year later, hiring Curic, an executive with Toyota Motor Corp.’s North American subsidiary, to run the automotive efforts. Curic’s team plucked staff from Lab126, the San Francisco Bay Area hardware division behind the Echo speaker, and Amazon Web Services, the company’s cloud-computing arm. Amazon also went shopping for recruits who knew their way around the industry, seeking veterans of German stalwarts like Daimler AG, BMW and Volkswagen, companies that have been among the most aggressive in exploring voice software.Hanging over the exercise to take Alexa on the road is Amazon’s failure to build a smartphone to rival Alphabet Inc.’s Google and Apple. About 62% of people who use their voice to control music or other applications in their car today do so through a smartphone, a market dominated by Google and Apple, according to a survey by voice technology news site Voicebot and dashboard entertainment startup Drivetime. Another 32% opt for the software included in their car’s entertainment system while 6% use different technology, including the Echo Auto.“Amazon’s Achilles heel is not having a play on the phone,” says John Foster, chief executive of Aiqudo Inc. a startup working to tailor mobile applications for voice control. “They’re going at it the best way they can. But I do think they suffer from this disadvantage that Google is really starting to make clear.”Google, the company behind Android, the world’s most popular operating system, has gotten automakers on board, building ties that could be used to hook drivers into Google's Assistant, Alexa's biggest rival in the U.S. Fiat Chrysler Automobiles, Renault-Nissan-Mitsubishi and Volvo are all building entertainment systems on Android.“Google has a much bigger footprint in the auto industry than Amazon does,” says Ramsey, of Gartner. “They’re getting big wins. Amazon is just starting to scratch the surface.”Other carmakers are going their own route.Some, like Daimler’s Mercedes, have thrown their weight behind proprietary voice software. The Mercedes-Benz User Experience system, like many automaker-branded software, is powered by technology built by Nuance Communications Inc., a software company in Massachusetts.“Each of these manufacturers wants to preserve their own brand” in the car, says Richard Mack, a Nuance marketing executive. “When you press that button on the steering wheel, Mercedes would much rather see their emblem come up rather than a Google or an Amazon or a Microsoft logo.”Amazon has tried to assuage carmakers worried about Google or Apple's potential automotive ambitions by suggesting Alexa could be one among several voice assistants embedded in a future entertainment system, according to two people who have heard the pitch, but aren't authorized to publicly discuss it. Amazon last year released tools that let carmakers build Alexa into their cars. The company has also tried to leverage Alexa’s popularity in the home, saying to potential partners that customers would rather use voice software they’re already familiar with than learn a new program while behind the wheel.As Curic’s team negotiated with carmakers, Lab126 engineers got to work on an end around, repurposing the Echo speaker’s microphone arrays and software, originally designed for homes, for noisy car environments. The device avoided dealing with in-car communications systems entirely by piggybacking off of customers’ smartphone to connect to Alexa servers.When it was released, analysts said the Echo Auto seemed to fill a gap in the market, offering a device that promised to bring modern voice control to older car models. It drew more than 1 million orders, Amazon said, though the device is still shipping in batches and only to invited customers.Reviewers said the device lacked polish, coming off at times like a work-in-progress. A reviewer at tech news site the Verge said some of the auto-focused applications Amazon touts on its website “are laughably bad right now.”It’s harder to get a read on how customers feel because Amazon, which helped popularize online product reviews, has disabled customer reviews for the Echo Auto.Ryan Adzima, who bought one to replace the outdated voice control system that came standard in his Jeep, is a fan. The owner of five Echo smart speakers figured the device’s introductory price tag of $25 was a bargain compared with replacing his entertainment system or buying a voice-activated navigation system.He liked the device, which heard his commands over road noise with the windows open and top down and easily handled tasks like calls and music. Connectivity, dependent on sometimes spotty wireless service around his Las Vegas home, left something to be desired, forcing him to reach for his phone to skip songs by hand when Alexa’s servers couldn’t be reached.Adzima isn’t in the market for a new car. But if Alexa is integrated in enough models by the time he is, he’ll consider it.“If I was sitting on a lot, and one car had Alexa built in, the other didn’t, and the cost difference wasn’t that much?,” he says. “That would definitely make my decision.”To contact the author of this story: Matt Day in Seattle at firstname.lastname@example.orgTo contact the editor responsible for this story: Robin Ajello at email@example.com, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Stefan Moeller began this year with an ambitious target: to make his car-rental company Nextmove the biggest Tesla Inc. customer in Germany by adding 100 Model 3s to its fleet. He likened the electric car’s arrival on Europe’s shores to a tsunami washing over a region that’s been slow to embrace battery-powered autos.But the powerful wave Moeller expected has collapsed to a trickle. After weeks of back and forth over unfulfilled repair work and quality issues involving the initial 15 sedans that Tesla delivered -- from scratched bumpers to moisture trapped behind the headlights -- the order of the remaining 85 Model 3s was called off. Tesla also tried to deliver cars that had been previously registered, which would have locked Nextmove out of Germany’s electric-car incentive program and potential tax refunds, Moeller said.“The Model 3 is a fantastic car. Some of our customers totally fell in love with it,” said Moeller, whose Leipzig-based company has more than 300 electric vehicles in its fleet, including 38 Model S and a dozen Model X. “But the organization behind it doesn’t match that. It’s really sobering.”Subpar service could be a barrier to Tesla making more of an impact in Germany, where exacting car owners value how painstakingly their BMWs and Mercedes are cared for just as much as the speed of the Autobahn. Chief Executive Officer Elon Musk, who’s famously inimical to Twitter critiques, acknowledged earlier this year that a lack of service centers in Germany was hampering the company’s growth there.Tesla believes Nextmove’s decision to cancel its remaining Model 3 order wasn’t entirely due to quality issues, and was largely influenced by frustration with an unrelated dispute earlier in the year, according to a spokesperson. The carmaker was in the process of making repairs and had provided loaner vehicles to the customer at the time the order was canceled. (Nextmove insists it was Tesla that canceled the order, after the rental-car company demanded an improved process for handovers and fixes.)The Tesla spokesperson blamed the registration issue that Nextmove described on a temporary issue with matching identification numbers to vehicles and said the issue was resolved for impacted customers.Norway WoesPoor service is an issue that’s already plagued Tesla in Norway, Europe’s largest electric-car market per capita. Dented and sloppily painted vehicles have fueled the highest level of complaints per unit among all automakers, according to the nation’s consumer watchdog.In Europe, Tesla is racing against time as more established players wake up to the electric future. The continent is projected to be the world’s second-largest driver of electric cars in the next decade, trailing only China. Customers can already choose between a growing number of battery-powered models from the likes of Mercedes-Benz, Jaguar and Audi.Moeller says Tesla’s issues extend beyond the Model 3. He spent two years waiting for the carmaker to replace a seat in a Model X that was delivered in July 2017 with a hole in it. A Model 3 arrived more recently with a protruding bulge on one tire. Moeller shared with Bloomberg News his email correspondence with Tesla and photos of the blemished vehicles.The Tesla spokesperson said the company’s data doesn’t indicate any unusual vehicle quality issues specific to Germany or anywhere else in the world. The company said there’s a small chance cars are blemished during transport to customers and that it addresses those issues quickly.‘Seriously Worrying’Nextmove isn’t an isolated case. German social-media platforms and online forums are abuzz with customers airing complaints about faulty parts from sensors to suspensions. Many also describe Tesla’s sales organization in the country as unresponsive.“I’m still thrilled by the car, because it’s just so much better than anything I’ve driven before, but the quality of the service and some technical parts are seriously worrying,” Rouven Volk, who said by email that he ordered his Model 3 in February and was slated to take delivery less than a month later.Volk chronicled an odyssey with Tesla that began with a car that couldn’t be handed over because of a defective main display. The company opted to source another Model 3 from its European pool and set a new handover date for a month later. Then, the car had stains on the outside and in the interior, and a cable dangled from where there should have been a light for the back seats. The charging cables and winter tires he ordered were nowhere to be found.The Tesla spokesperson said unhappy customers can return their cars for a full refund up to seven days after purchase. The company’s data shows German customers have largely been satisfied with their vehicles, including the quality and condition of cars upon delivery.“Generally, early-adopter customers forgive unconventional newcomers like Tesla a lot of things,” said Stefan Bratzel, a researcher at the Center of Automotive Management near Cologne. “But the more Tesla enters broader customer segments, the more distribution and service have to function.”Climbing the ChartsSales of the Model 3, Tesla’s most affordable model, helped make the brand the fastest-growing in Germany in the first seven months of the year, according to data from industry watchdog KBA. While 6,816 registrations is still well behind market leaders, Tesla outsold brands including Jaguar and Alfa Romeo.Tesla is in the process of doubling the number of service centers in Germany to 17 locations, with a focus largely on urban areas including Berlin, Hamburg and Munich, according to the company’s website. The carmaker is also branching out into mid-size cities such as Kiel, Ulm and Mannheim, and separately lists 16 retail stores in the country.The brick-and-mortar presence is still a far cry from the sprawling infrastructure that established carmakers have built in Germany over decades. Volkswagen AG, the top-selling automaker in the country, has hundreds of dedicated sales and repair outlets.Then again, Musk is betting the looming shift toward electric cars and digital services will upend the retail and after-sale business. Battery-powered autos have fewer components that are at risk of breaking down. Tesla also plans to expand its fleet of mobile service vehicles by 50% and increase mobile service coverage by fivefold this year in Europe, according to the spokesperson.Rust, ScratchesFor Volk, rust started showing between the front fender and the driver’s door of his Model 3 after about 100 days and 15,000 kilometers, which he attributes to friction of sheet metal that wasn’t properly sloped. Getting a hold of Tesla service personnel has been challenging because some employees familiar with his case have left the company, Volk said.Malte Ahl said in an email he withdrew the purchase contract for his Model 3 in March after Tesla didn’t respond to his concerns about glitches including poor paint quality, scratches on the passenger seat and dysfunctional switches.“I view this way of dealing with the most loyal Tesla fans as unfair and not sustainable,” he wrote in an attached letter addressed to the company’s German unit.(Updates with further Nextmove comment in fifth paragraph.)To contact the reporter on this story: Christoph Rauwald in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Palazzo at email@example.com, Benedikt Kammel, Craig TrudellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.