|Bid||0.00 x N/A|
|Ask||0.00 x N/A|
|Day's Range||800.00 - 804.00|
|52 Week Range||752.00 - 830.00|
|Beta (5Y Monthly)||0.55|
|PE Ratio (TTM)||11.40|
|Forward Dividend & Yield||4.80 (0.60%)|
|Ex-Dividend Date||May 15, 2019|
|1y Target Est||N/A|
(Bloomberg) -- Lebanon’s plan to get local banks to swap into longer-maturity Eurobonds may be meeting resistance and signals growing financial stress in the country, according to analysts at JPMorgan Chase & Co.Local lenders started offloading their holdings of the country’s $1.2 billion bond after the central bank proposed an exchange into other instruments when it matures on March 9, a sign they could be reluctant to go through with the deal, JPMorgan said.Governor Riad Salameh said in an interview last week the plan was “preemptive” and dependent on the banks’ consent. While he didn’t say what the terms of the new bonds would be, JPMorgan said locals may be asked to swap into existing government dollar notes maturing in November 2029 and July 2035. Owned mostly by the central bank, those securities have coupons of 11.5% and 12%, respectively.“Locals have started selling the March 2020 Eurobonds, which could suggest commercial banks have a limited appetite for the proposed swap, putting a cap on the impact of the operation,” JPMorgan strategists Mikael Eskenazi in London and Trang Nguyen in New York said in a Jan. 13 note seen by Bloomberg. “The latest measure is signaling rising near-term liquidity stress, casting doubt on the ability to service debt near-term.”The proposal is the latest effort by one of the world’s most indebted nations to buy more time in the face of looming repayments and dollar shortages. Among the reasons banks may not be on board is that the notes maturing in March trade at 87 cents, much higher than the price of Lebanon’s longer-dated debt, most of which trades at less than 50 cents.Lenders may also prefer boosting their foreign-exchange liquidity rather than keeping their money within Eurobonds. Bank Audi said Wednesday it’s trying to sell its Egyptian unit to raise capital.“One key motivation for locals’ selling of higher cash price bonds in the short end of the curve could result from banks trying to cope with higher dollar needs,” Eskenazi and Nguyen said.Other points from the report:JPMorgan estimates that locals hold about half, or $600 million, of the March bondsThe swap announcement casts “doubts on the true availability of the country’s FX reserves,” with outflows picking up at the end of last yearRudderless since Prime Minister Saad Hariri resigned in October as moves to raise fees and taxes triggered massive anti-government protests, Lebanon is gradually succumbing to its worst economic malaise in decades. Global bond investors have all but priced in a sovereign default, though they differ on when it would happen and whether foreign investors would be exempt.Salim Sfeir, the head of the Association of Banks in Lebanon, didn’t immediately respond to a request for comment. Reuters cited Sfeir in a report Jan. 13 as saying he didn’t foresee any problems with the swap proposal and it was “common practice.”\--With assistance from Paul Abelsky and Dana Khraiche.To contact the reporter on this story: Paul Wallace in Dubai at firstname.lastname@example.orgTo contact the editors responsible for this story: Lin Noueihed at email@example.com, Paul Abelsky, Alex NicholsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). To keep it practical, we'll...
(Bloomberg) -- For Paul Boudre, U.S. President Donald Trump’s push against Chinese telecommunications companies is less about espionage than the race for technological supremacy.Boudre, the chief executive officer of Soitec, a French maker of semiconductor materials that go into 5G equipment, automobiles, cloud computing and IT infrastructure, says Trump’s actions are aimed primarily at allowing American firms to catch up.“Trump’s kick in the pants for companies is to wake them up and to catch up,” Boudre said in an interview Tuesday in Paris. “Trump is the emissary saying that if nothing is done, we’ll be blown away. That’s why he’s been trying to put a brake on the advances that China has made.”With the “everything-connected” era well under way, the race for a technological edge is intensifying. Trump has repeated railed against China and its companies, including Huawei Technologies Co., citing industrial espionage and intellectual property theft. He has limited their access to the U.S. market and to American suppliers, while also pressing allies from Japan to The Netherlands to review policies toward the Asian giant.The executive push and the infrastructure policy are driving U.S. companies like Cisco, Qorvo Inc., Skyworks Solutions to accelerate their research, a move that could allow American players to get new 5G technologies rolling out potentially in 2021, Boudre said.“Technology has become political today,” he said.Supply ChainsThe U.S. pushed to block the sale of chip manufacturer ASML’s technology to China by sharing a classified intelligence report with the Dutch government, Reuters reported on Monday, citing unidentified people familiar with the matter.Soitec, which has factories and licenses for producing the substrate for handsets and infrastructure in France, Singapore and China, can provide “China Free” material if requested, Boudre said, adding that no such demands have been made by its clients.“What’s happened with Trump is a modification of supply chains,” he said. “Huawei won’t rely exclusively anymore on Qorvo, Skyworks, Qualcomm, because there is a risk. So they’ve developed relations with Murata, STMicro and others.”Developments in the U.S. 5G market this year and next will be a test of whether Trump’s policies were fruitful, Boudre said.“Clearly, two technologies are now being implemented,” with China’s 5G building on 4G, while the U.S.’s 5G that’s more of a new development called “millimeter wave.” The U.S. technology may hit the broad market in 2021, Boudre said, with Cisco driving the innovation. Qualcomm’s modem chip using millimeter wave technology is likely to hit the market in 2020.Soitec RisingWhile Trump’s moves have roiled trade and supply chains for companies building 5G and other technologies, Soitec has been spared, the executive said.The company, whose material goes into almost every smartphone in the world, plans to double sales in the next three years, reaching $1 billion in its fiscal year 2022, and sees revenue tripling in the next five years or so.Founded in the early 1990s in the French Alps, Soitec, which now employs 1,500 people, sits at the heart of the revolution that’s made possible everything from mobile phones, personal assistants like Amazon.com Inc.’s Alexa and Google’s Nest, to 5G antennas and connected devices in cars.In the automotive sector, where Europe has an edge, Soitec is working with Robert Bosch GmbH, Audi AG, STMicroelectronics NV and others to define future components, Boudre said. In artificial intelligence, he sees a shift of computing power from the cloud to devices lifting demand for Soitec’s materials, which allow chipmakers to combine computing, memory and connectivity on a single chip.The extent of all that growth will be evident when the company discusses its long-term plans in June, Boudre said.Soitec’s stock rose 85% in 2019, making it among the top 10 performers of the benchmark SBF120 index.\--With assistance from Caroline Connan and Francine Lacqua.To contact the reporters on this story: Helene Fouquet in Paris at firstname.lastname@example.org;Rudy Ruitenberg in Paris at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Vidya RootFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- If automakers learned anything from 2019, it’s that the have and have-nots of the U.S. electric-vehicle market are Tesla Inc.’s Model 3 -- and everything else.The Model 3 sold in serious volume, with website InsideEVs.com estimating almost 160,000 sales for the year. Other automakers investing billions to roll out electric models have serious catching up to do.After the Model 3, one has to scroll far down the sales rankings to find Tesla’s Model S and X and offerings from General Motors Co. and Nissan Motor Co. And 2019 was a year to forget for the Chevrolet Bolt and Nissan Leaf, with deliveries dropping 8.9% and 16%, respectively.And what of those pricey European models that are supposed to challenge Elon Musk? Porsche is just starting to sell the much-hyped Taycan and handed over the first 130 units in December. Audi sold 746 of its all-electric e-tron crossovers and tallied just 5,369 units for the year. Jaguar was even further behind, delivering 2,594 I-Pace SUVs.To give Musk a more-serious run for his money, automakers are probably going to need models with longer range before plugging in and charging. Even then, the controversial chief executive officer may still have a leg up by building an allure around the company.“Perhaps Tesla’s best asset is its brand,” Joe Spak, an analyst at RBC Capital Markets, wrote in a report Friday. “Many consumers are evangelical about their vehicles.”(Updates with Porsche, Audi and Jaguar EV sales in the fourth paragraph)\--With assistance from Gabrielle Coppola.To contact the reporter on this story: David Welch in Southfield at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, Melinda GrenierFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
(Bloomberg) -- Tesla Inc. will start delivering China-built cars on Monday, a major milestone for Elon Musk’s company as it expands in the world’s largest electric-vehicle market.The first 15 units of Model 3 sedans assembled at Tesla’s new multi-billion-dollar Shanghai plant -- its first outside the U.S. -- will be delivered to company employees on Dec. 30, capping several months of wins for Musk. The latest came Friday, when the locally built car was included on a list of vehicles qualifying for an exemption from a 10% purchase tax in China.The shares closed little changed at $430.38 on Friday. The stock has surged since the carmaker reported a surprise profit on Oct. 23, and is now more than double its year low of $178.93 in June.Chief Executive Officer Musk is counting on the China plant to help build on recent momentum for the company in the world’s largest market both for EVs and autos in general. The Model 3 will compete with electric cars from local contenders such as NIO Inc. and Xpeng Motors, as well as global manufacturers including BMW AG and Daimler AG.The Shanghai Gigafactory broke ground at the start of this year. Originally just a muddy plot about a 90-minute drive away from Shanghai’s city center, it is now a crucial test of Musk’s bid to keep his carmaker profitable as he bets big on Chinese appetite for electric cars.With Tesla’s volatile stock price and strained finances, investors will be watching closely how the ramp-up unfolds. The multibillion-dollar investment will be a deciding factor to determine whether Tesla will be able to take on local competitors and fend off challenges by the likes of Mercedes-Benz, BMW and Audi.Junheng Li, an analyst at JL Warren in New York, noted that the made-in-China Model 3s are not fully manufactured there yet. Tesla is importing parts and assembling them at the facility near Shanghai, with production localization expected later in 2020.“Localization of suppliers has been very slow,” said Li in an email Friday. Tesla didn’t immediately respond to an inquiry seeking comment.Although Musk has said he’s never seen a factory built so quickly, the first delivery will come only a day before the end of 2019. Back in April, the CEO predicted Tesla would make at least 1,000 cars a week in Shanghai by the end of the year — a volume the company’s original factory in California spent months trying to hit. He’s also said a weekly rate of 3,000 is a target at some point.Tesla said in October the locally built Model 3 will be priced from about $50,000. On top of the tax exemption announced Friday, the China-built model this month qualified for a government subsidy of as much as about 25,000 yuan ($3,600) per vehicle.The company may lower the price of the locally assembled sedans by 20% or more next year as it starts using more local components and reduces costs, people familiar with the matter have said.The launch will also provide clues about Tesla’s ability to truly go global. The company is planning to follow up with a production facility in Europe.\--With assistance from Dana Hull.To contact Bloomberg News staff for this story: Chunying Zhang in Shanghai at email@example.comTo contact the editors responsible for this story: Young-Sam Cho at firstname.lastname@example.org, Cécile Daurat, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Germany's main automobile industry body said on Wednesday it expects global car sales to fall by 5% this year, the steepest drop since the financial crisis, and warned of more job cuts in 2020 as a result. "The competition is getting tougher, the headwinds are getting stronger," Bernhard Mattes, president of industry association VDA, told reporters. The association expects global car sales to fall by 4.1 million to 80.1 million vehicles this year, driven by a slump in China, he said.
(Bloomberg Opinion) -- After a week in which Daimler AG and Volkswagen AG’s Audi announced thousands of job cuts, it’s easy to forget that the German car industry once seemed unassailable.The 2009 recession forced a massive downsizing of America’s auto giants. General Motors Co. and Chrysler filed for Chapter 11 bankruptcy protection; Ford Motor Co. escaped a similar fate only by cutting its workforce to the bone. By contrast, Volkswagen, BMW AG and Daimler’s Mercedes-Benz overcame the crisis with barely a scratch. Afterwards they took full advantage as wealthy Chinese splurged on luxury German vehicles. Germany’s carmakers and their suppliers went on a hiring spree at home and abroad.There were early signs of hubris: Volkswagen paid its chief executive officer 17.5 million euros ($19.3 million) in 2011. But Germany’s powerful trade unions made sure workers benefited too. In recent years production line staff at BMW and VW’s Porsche subsidiary took home almost 10,000 euros as an annual bonus. BMW spends an average of more than 100,000 euros per employee on salary, pension and social security costs, according to its annual report. Now that jobs boom has come to a screeching halt, and not before time. An industry facing unprecedented upheaval can’t afford such largess.The chief reason for the belt-tightening is, of course, the vast cost of moving beyond combustion engines. Volkswagen expects to spend an astonishing 60 billion euros on hybrid, electric and digital technology in the next five years. Doing this requires the hiring of even more people, but the products they’re developing aren’t always big money spinners yet.For a time, the industry will have to provide a full range of propulsion options. For their factories this means “peak complexity” — to borrow a phrase from Mercedes’s management. Eventually, however, many of these factory workers will become unnecessary because electric motors are much simpler to build than diesel and gasoline engines. Last week's job cuts won’t be the last.The German industry has been caught out too by an unexpected slowdown in demand. Continental AG, the supplier that’s cutting 20,000 jobs, expects production to stagnate over the next five years. Daimler said last month that sales haven’t matched its production capacity. Audi’s domestic plants are reportedly particularly under-utilized, not helped by the popularity of SUVs over sedans (the former tend to be built overseas).Volkswagen, BMW and Daimler will still generate about 24 billion euros of net profit this year, according to analysts polled by Bloomberg. But the era of 10% operating profit margins — long a benchmark for German luxury carmakers — is over. Mercedes thinks 4% is more realistic next year.The automakers therefore have to tackle their bloated fixed costs. In view of its spending commitments, Volkswagen was unwise to let its workforce swell to almost 700,000. That’s about 80% more than Japan’s Toyota Motor Corp., which builds a similar number of cars (though Volkswagen has a big truck unit too).Volkswagen’s labor expenses have crept higher as a percentage of sales since the last recession. Doubtless this reflects the influence of the German unions and hence it’ll be very difficult to rectify. Like their peers, German employees at the Volkswagen brand have job guarantees until 2029.Ultimately the German car jobs boom was a bet that demand would increase, combustion engines would have a long life and global trade would remain encumbered. Instead, the electric shift is happening faster than expected and Trump’s tariff crusades have turned the German industry’s global production presence into a liability.Cars are superfluous for many young people today, and if they do buy one it will soon have a simple electric motor, not a combustion engine made of hundreds of intricate components. The hiring practices of German carmakers look like a bubble that’s burst.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Denmark’s Astralis is set to become the first esports team to go public in a bid to cement its status in a $1.1 billion global market that’s more than doubled since 2016.Astralis is ranked the world’s number one in Counter-Strike: Global Offensive, a popular first-person shooting game, and has won millions of dollars in tournament prizes. The success has earned it commercial endorsements with brands such as Audi and Logitech. Now operating as a media company, the Astralis Group has expanded with teams competing in League of Legends and EA’s FIFA.The listing is due to take place Dec. 9 on Nasdaq’s Copenhagen exchange for small companies. According to its prospectus, Astralis plans to raise 125 to 150 million kroner ($18-22 million), with shares priced at 8.95 kroner.Professional esports is by no means in its infancy -- in the 1990s, games like Counter-Strike, Quake and StarCraft were staples of a competitive gamer’s diet, and businesses sprang up to bolster the titles’ longevity and appeal. But Amazon.com Inc’s Twitch and Google’s YouTube created platforms for spectators to watching in their millions, and with that came enormous marketing and sponsorship opportunities.Surging InterestAccording to recent projections, the global esports market will generate almost $2 billion in 2022, with global esports viewership expected to reach 595 million that year.Superstars like Kyle “Bugha” Giersdorf have brought winning potential into the view of broader audiences. In July, hundreds of thousands of fans went online to watch the 16-year-old win the Fortnite World Cup final in New York.“We believe that the foundation of some of the most valuable and iconic brands in 10 years’ time is being set today,” said Astralis Group Chief Executive Officer Nikolaj Nyholm.Nyholm says he’s confident that the IPO will succeed and cites pre-commitments worth around $8 million “from a range of European and Asian investors.” The subscription period ran out on Friday.A successful IPO would provide a yardstick for other esports valuations. But the CEO, who has a background as a venture capitalist, says he understands why some might be hesitant to invest in a new area with only limited historical data to draw on.“In this respect it is also our responsibility to help educate the market through a continuous high level of information,” Nyholm told Bloomberg in an emailed response to questions.Esports BuzzPer Hansen, an investment economist at Nordnet in Copenhagen, says he expects the offer to be oversubscribed, given the levels of pre-IPO subscriptions.“There’s a lot of buzz around esports and what it might turn out to become in five years’ time,” Hansen said. The timing is also good, given investors’ appetite for new equity during the current regime of ultra low interest rates.Nyholm says going public rather than raising venture capital will allow Astralis to focus on a longer time horizon and “allow us to bring new investors on board.” The money raised will help “strengthen our position in the market through investments in our brands and media platforms. We will also look to use the listing to position us well in an anticipated future market consolidation,” he said.The world’s most valuable esports company, Cloud9 is worth $400 million, according to Forbes.(Adds subscription deadline in 8th paragraph)To contact the reporter on this story: Nick Rigillo in Copenhagen at email@example.comTo contact the editors responsible for this story: Christian Wienberg at firstname.lastname@example.org, Nate LanxonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Audi said that the layoffs would save the company $6.6 billion that it will use for “electrification” and “digitalization” in its future projects. The luxury carmaker plans to create 2,000 new “expert position” for electric vehicles. As the Wall Street Journal noted, Germany’s laws require companies to fill half of the non-executive supervisory board with non-management level employees — giving them a better bargaining position when it comes to job cutting.
(Bloomberg Opinion) -- German Chancellor Angela Merkel is officially a lame duck, and either in 2020 or 2021 somebody else will get her job. It’ll almost certainly be somebody from her conservative bloc, which remains the strongest in the polls. But who? Last December, this seemed an easy question to answer. Now the race has opened up again.It will accelerate this week when — 14 years to the day since Merkel took office — delegates of her party, the Christian Democratic Union, gather for their annual powwow. Four of five potential successors are Christian Democrats and will use the stage in Leipzig to audition. Two weeks later, Merkel’s junior partners, the Social Democrats, will decide whether to quit the coalition early, thereby determining the timing of the next national election.Merkel’s original plan was to groom a former regional premier, Annegret Kramp-Karrenbauer, commonly abbreviated to AKK. She seemed reassuringly similar. Both women are quietly, but profoundly, religious. Both are non-ideological centrists. Both are de-escalators by temperament and speak in complicated phrases that often mean nothing, but come across as soothing.The grooming had to be accelerated last year, because the CDU got restless. Merkel gave up the party leadership so that Kramp-Karrenbauer could seize it, which she did, after a bruising contest. To Merkel’s chagrin, AKK then stumbled through a series of gaffes. Most were blown out of proportion, but stuck. During this year’s carnival celebrations, when Germans uncharacteristically revel in buffoonery, she dressed up as a cleaning lady and waded into gender politics by wondering tongue-in-cheek whether men were still allowed to pee standing up. German society feigned collective outrage. She was damaged goods.Then the job of defense minister unexpectedly opened, and Merkel gave it to AKK before a rival could pounce on the opportunity. But on the international stage Kramp-Karrenbauer, whose English is clumsy, looked even more out of depth. And yet she embraced the role, courageously broaching taboos along the way. She suggested creating a German-led security zone in Syria, as well as providing more money to the army (which NATO has been demanding for years). On the whole, she’s come across as thoughtful and honest. That hasn’t helped her as a candidate. The German public and elite have concluded she can’t win.One man who thinks he can is Friedrich Merz. At 6 1/2 feet tall, he was an up-and-coming Christian Democrat in the 1990s until Merkel ousted him from a top job in 2002. He’s been plotting his revenge ever since. For years he did that outside of politics, working in finance for BlackRock Inc., among others. But last year Merz, now 64, came back, colluding with the CDU’s right wing to challenge Merkel and AKK for leadership of the party.His unique advantage is that he has no political responsibility, so he can snipe from the sidelines. He’s not subtle about it. After the CDU lost a regional election, he lamented that Merkel and Kramp-Karrenbauer “smother this country like a blanket of fog.” Many in the CDU project conservative fantasies onto Merz, especially the party’s older, male contingent. But to the broader German electorate, he’s fallen out of the zeitgeist.A candidate who could one day capture it is Jens Spahn. Like Merz, he’s positioned himself as a conservative gadfly to the wobbly centrism of Merkel and Kramp-Karrenbauer. But because he’s 39 and openly gay, Spahn can appear simultaneously conservative and woke.Sensing the political threat, Merkel tried to eliminate Spahn by making him health minister, a boring job in which normal people fail. Surprisingly, however, Spahn is blossoming. He’s launching one initiative after another. This month he made measles vaccination mandatory, no small feat in a culture of anti-vaxxers. But as Spahn and most Christian Democrats know, his time hasn’t come yet.Then there’s Armin Laschet. His advantage is that he’s premier of the most populous state, North Rhine-Westphalia, and leader of the CDU’s biggest delegation. His strategy is to be bland and pleasant, to repeat platitudes on TV, and to wait for the other contestants to eliminate one another until the party begs him to make peace. But that’s unlikely. German voters wouldn’t send somebody this wimpy to face off against the likes of Donald Trump, Vladimir Putin, Xi Jinping or Emmanuel Macron.So maybe none of the Christian Democrats has what it takes. That’s where a unique German twist comes into play. The CDU has a “sister party,” called the Christian Social Union (CSU). Their arrangement is that the CSU sticks to Bavaria and the CDU covers the other 15 states, but in parliament they form one group and in federal elections they field one “union” candidate. Since 1949 there have been exactly two CSU candidates for chancellor, and both lost. A German rule of thumb is that nobody can become chancellor who is from south of the “white-sausage equator,” a culinary and cultural line that runs roughly along the Danube River.Now meet Markus Soeder. He’s leader of the CSU and premier of Bavaria. But he’s from Nuremberg, which is north of the aforesaid sausage line. Soeder, moreover, is a consummate political ninja. For years he fought a guerrilla campaign against his predecessor, Horst Seehofer, and prevailed. He’s also colorful. At various carnival parties, he’s been spotted as Gandhi, Marilyn Monroe and a frighteningly convincing Shrek.Politically, Soeder, 52, is an opportunist and populist, but the kind who stops short of saying mean things about foreigners. As is required of CSU politicians, he dons lederhosen and campaigns in beer tents, hewing close to ordinary folk. Even though he and his party love cars with big combustion engines (Audi is Bavarian), Soeder has recently discovered a passion for the environment, especially insects. That was around the time Bavarians surprised the nation with a grassroots ballot measure to protect bees.Soeder’s sudden greening probably has another reason. He knows that to become chancellor, he’ll have to form a coalition with the Greens, who have soared in the polls to become the largest center-left party. For now Soeder keeps ranting against them, but he’ll eventually cozy up to the environmental party easily.At the CDU gathering in Leipzig, Soeder has a speaking slot on Saturday. He knows that, for now, he must show benevolent concern for the turmoil in his sister party. He will appeal selflessly to unity and profess personal ambitions purely — purely, you understand — to make Bavaria prosper. Soeder is the one to watch.To contact the author of this story: Andreas Kluth at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andreas Kluth is a member of Bloomberg's editorial board. He was previously editor in chief of Handelsblatt Global and a writer for the Economist. For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Former Foreign Minister Sigmar Gabriel rejected an offer to become the head of Germany's VDA car lobby group on Tuesday after media reports that he was in line for the post caused a public outcry and prompted accusations of nepotism. Gabriel said the job as head of the German Association of the Automotive Industry, or VDA, was tempting as the auto industry faces fundamental changes with tougher emission rules and the shift towards electric vehicles. "Still, after very careful consideration and due to other tasks I cannot be available for this position," Gabriel said.
(Bloomberg) -- Volvo Cars isn’t just electrifying its lineup to cut carbon emissions. Now the Swedish automaker says it will pay customers to make sure they plug in.Volvo is tying the launch of its first all-electric vehicle -- the XC40 Recharge crossover -- to a broader plan for shrinking the carbon footprint of its models by 40% through 2025. And it’s backing that pledge with a promise to pay the first year’s worth of charging costs for owners of its plug-in hybrids, starting with the 2021 model year.Volvo placed itself at the forefront of electric car hype in 2017 when it vowed to rid its lineup of cars running purely on fossil fuels by 2025. To get there, it’s going to roll out a new battery-electric model every year until 2025, starting with its XC SUVs, Chief Executive Officer Hakan Samuelsson said. Those will join a growing range of hybrid models.“We believe we should treat sustainability as as much of an integrated part of our business as safety, not just something we do as an add-on,” Samuelsson said in a phone interview. “We’re making it part of our product offering.”Model 3 RivalBuyers of 2021 model year hybrids will be able to claim a refund for their electricity costs during the first year of ownership based on power consumption data extracted from Volvo’s app for Apple and Android smartphones. Volvo plug-in hybrid owners drive in electric mode only about 40% of the time, Samuelsson said in an interview with Bloomberg Television.The XC40, which Volvo unveiled earlier today in Los Angeles, will have 200 miles of range in the U.S., 402 horsepower and take 40 minutes to get to 80% battery capacity on a fast-charging system, the company said. That compares to the 240-mile range of Tesla Inc.’s Model 3 sedan.Samuelsson said Volvo will start producing its first EV late next year and price it to compete with the Model 3, which starts at about $39,000 but has been selling on average for roughly $50,000.“It’s affordable for a much broader range of people” than higher-priced luxury brand electric cars, said Volvo’s Chief Technology Officer Henrik Green. The XC40 is “more like a $50,000 car than a $100,000 car,” he said.The electric XC40 will join a wave of new EVs debuting to keep up with tightening emissions regulations in China and Europe. While uptake remains slow, carmakers including Volkswagen AG and Daimler AG have launched new models like the Audi e-tron and Mercedes EQC to chase after Tesla.Volvo is pushing ahead with its electric ambitions as others in the space struggle. NIO Inc., China’s would-be Tesla competitor, is running short of cash. Jia Yueting, founder of electric vehicle start-up Faraday & Future Inc., filed for bankruptcy. And Dyson Ltd., the famed maker of vacuum cleaners, pulled the plug on its battery-powered car project.‘Midterm’ Profitability GoalVolvo would not be making a fully electric XC40 if it wasn’t “absolutely sure” the car will be profitable, Samuelsson said.“It might be lower profit margin initially, but what counts is more midterm” profitability goals, he said.The bet on electrics comes at a time when the carmaker is coping with a global sales slowdown and tariffs that led to a 30% drop in first-half operating income. To cut costs, the company plans to merge engine operations with Chinese parent Geely.Samuelsson said Volvo wants to increase the appeal of electrified vehicles so they sell without government subsidies -- and incentives like free charging for the first year. “Long term, if this is really going to do something to the climate or the environment, the cars need to be attractive and need to be bought by customers with their own money,” he said.(Adds CTO comment in eighth paragraph.)\--With assistance from Shery Ahn and Amanda Lang.To contact the reporters on this story: Gabrielle Coppola in New York at email@example.com;Ed Ludlow in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Trudell at email@example.com, Gabrielle Coppola, Chester DawsonFor 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.
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