|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||16.09 - 16.21|
|52 Week Range||14.70 - 18.84|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||51.51|
One of Australia’s most prominent shock jocks has sparked an advertising boycott after telling his listeners that Australian prime minister Scott Morrison should “shove a sock” down the throat of New Zealand ...
A federal judge in California on Friday urged the U.S. Securities and Exchange Commission and Volkswagen AG to resolve a civil suit stemming from its Dieselgate emissions scandal. U.S. District Judge Charles Breyer in San Francisco, who earlier had questioned why the agency waited two years to sue the automaker, said he was putting the suit on hold until Oct. 4. The SEC filed a civil suit in March accusing Volkswagen and its former chief executive, Martin Winterkorn, of defrauding investors in U.S. bond offerings.
(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.
(Bloomberg Opinion) -- Skepticism of government regulation is one of the main tenets of economic conservatism, and for the most part is it justified. In one area, however, conservatives need to rethink their position: New research shows that air pollution is much deadlier than previously realized, so they should support greater government efforts to reduce it.Conservatives have long been dubious about the benefits of stricter regulations on air pollution. Whereas they used to find fault with the methodology detailing the harms of pollution, lately they have focused on the negative impact of regulation on jobs:That may be true. But the latest research, using huge data sets and extensive computational analysis, is adding new levels of subtlety to the argument for regulation. Even a modest shift in wind patterns, for example, can send enough pollution into major metropolitan areas to have a measurable impact on mortality.Some of the research findings are mind-bending. One 2011 study found that the introduction of EZ-Pass in New Jersey and Pennsylvania reduced the incidence of premature birth by as much as 9.1% for mothers who lived within 2 kilometers of toll plazas.It’s worth taking a minute to fully absorb this result. There was no improvement in the emissions of the cars involved, nor is there any evidence that fewer cars passed through the toll plazas (in fact, the prospect of EZ-Pass lanes may have lured more drivers). The only difference is that the cars spent slightly less time idling — and that was enough to greatly improve the health of pregnant mothers living nearby. And the study does not address the health of the newborns later in life.Yet the economic benefits from this one measure of improved health on one small segment of the population, according to the study, are estimated at up to $13 million over three years. Extrapolated nationwide, the authors say, the savings could reach $444 million per year.Another study, from 2019, looked at Volkswagen cars that were supposedly “clean” but really weren’t. The authors estimate that roughly 39,000 additional infants had an abnormally low birthweight as a result of the more than 600,000 fake clean diesel cars sold between 2008 and 2015.Worldwide, air pollution is now estimated to reduce life expectancy more than any other single factor — including malaria, AIDS, smoking, and even war. The U.S. may have some of the strictest air standards in the world, but they may not be strict enough.In the late 1990s the Environmental Protection Agency strengthened its standards for air quality. As a result, 11 additional localities, home to more than 10 million Americans, were required to adopt plans to improve their air. Obviously, some plans are better than others, and not all plans are successful. Nonetheless, economists at Arizona State estimated that these new plans reduced dementia cases in the U.S. by 140,000.These new estimates are made possible by the use of big data. The Arizona study used Medicare records to control for differences in behavior, underlying health conditions and health care usage in metropolitan areas that were required to adopt plans and those that just barely avoided having to do so.Given this new information, economic conservatives should be prepared to adjust their positions on regulation. Yes, it’s true that the U.S. already has some of the best air quality in the world. But the damaging effects of particulate matter and other pollutants persist.Acceptance of this conclusion doesn’t require abandoning market principles or surrendering to one-size-fits-all regulation. In the 1990s, the U.S. introduced a cap-and-trade program to reduce sulfur dioxide emissions, while the EU choose a command-and-control approach. The environmental results of the two approaches were roughly the same, yet the annual costs of the U.S. approach were between $1 and $2 billion a year, while the European approach cost roughly $75 billion a year.That suggests a market-based approach could help the U.S. improve health outcomes with minimal damage to the economy. The EZ-Pass study is instructive. Congestion pricing, for example, could reduce automobile emissions, improve traffic and provide funding for additional infrastructure.Instead of attacking all this new research, conservatives should focus on the best way to reduce the pollution it has uncovered. Merely reducing regulations is not effective, politically or policy-wise — especially when there are smarter market-based solutions that improve health without violating conservative principles or impairing economic growth.To contact the author of this story: Karl W. Smith at firstname.lastname@example.orgTo contact the editor responsible for this story: Michael Newman at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Karl W. Smith is a former assistant professor of economics at the University of North Carolina's school of government and founder of the blog Modeled Behavior.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Nissan Motor Co., BMW AG and Volkswagen AG are among carmakers in talks to bring the electric-car revolution to South Africa, as the nation’s auto-factory floors risk being left behind in the global switch to greener vehicles.The industry is preparing a unified stance on electrification to present to the government by the end of the year, Mike Mabasa, chief executive officer of the National Association of Automobile Manufacturers of South Africa, or Naamsa, said in an interview.Among the goals is persuading lawmakers to reduce or drop a 23% import tariff on electric vehicles to help ramp up nascent domestic sales, he said. Another is to roll out a charging infrastructure in a country where the state-owned power monopoly is in deep financial crisis.Taking steps to boost the popularity of electric vehicles in South Africa is just one part of the equation. The auto-manufacturing industry makes up about 7% of the country’s economy, according to Naamsa. The sector is one of the more positive aspects of an economy expected to grow at less than 1% for a second consecutive year.“The country needs to move forward and bring new technologies,” said Mike Whitfield, Nissan’s chairman for the southern Africa region. “The rest of the world will move very fast and if we don’t get going we will be left behind.”South Africa has long been a hub for global automaking, attracting plants operated by seven carmakers from Toyota Motor Corp. to Isuzu Motors Ltd. Last year, the manufacturers exported almost 210,000 cars to Europe, where Volkswagen is already retooling factories to only make electric cars. That’s just under a third of all local production and makes up 60% of exports.To date, there are no firm plans for electric-car or hybrid production in South Africa, but the government and industry agreed in 2018 to extend a manufacturing incentive program, creating jobs and enabling models like the BMW X3 sport utility vehicle and Nissan’s Novara pickup to be produced locally.“The electric-vehicle play in South Africa will not be determined by the South African consumer, but by the requirements of export markets,” Martyn Davies, an auto-industry specialist at Deloitte LLP, said by phone from Johannesburg, adding that the weaker rand is also making exports more attractive.The quality of the local plants of BMW, Ford Motor Co and Mercedes-Benz AG are good enough to make retooling quite straightforward, he said, adding that the next product made in South Africa by those automakers could feasibly be electric.Under the terms of the new manufacturing plan, the automakers will have to more than double annual production to as many as 1.4 million vehicles by 2035, and that won’t happen without making electric cars as well as gas or diesel, according to Naamsa’s Mabasa.BMW’s i3 and i8 are two of only three models currently available in the birth country of electric car pioneer Elon Musk, and only 620 units have been sold. Jaguar Land Rover introduced the I-Pace earlier this year, while Nissan is holding off on the launch of the latest Leaf until after an agreement is reached on import tariffs.Elsewhere on the African continent, a plan by Volkswagen to introduce an electric-vehicle in Rwanda stands in contrast to a lack of other developments.Another barrier to an accelerated electric-car boom in South Africa is Eskom Holdings SOC Ltd., the power provider that last week reported an annual loss of almost $1.5 billion and requires an $8.8 billion government bailout over the next three years.The utility has been forced to implement intermittent rolling blackouts and is reliant on coal, which is out of step with the environmentally friendly advantages of producing electric cars, Mabasa said. Therefore, the industry paper is likely to lay out a mixture of power sources between Eskom and privately owned renewable energy projects, he said.But the need to turn around Eskom’s financial situation is likely to be of more pressing concern to the government than using it to enable the electric-car industry, Nissan’s Whitfield said.“There is excess capacity, but quite frankly Eskom’s issues have to be addressed or we will have much bigger problems,” Whitfield said.\--With assistance from Prinesha Naidoo.To contact the reporter on this story: John Bowker in Johannesburg 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.
The autonomous driving industry is still in its infancy, but the technology is advancing rapidly. Multiple companies already have pilot and early-stage programs.
(Bloomberg) -- President Donald Trump’s plan to freeze U.S. vehicle efficiency standards would result in higher costs for motorists without doing anything to boost highway safety, according to an analysis by Consumer Reports that undermines the administration’s chief talking points in favor of the move.The analysis comes as the White House reviews a final drafted plan for easing vehicle emissions and fuel economy standards, despite escalating pressure from some automakers and California to change course. The administration last year proposed capping fuel economy and tailpipe carbon dioxide emission standards at 2020 levels, instead of allowing them to become stricter each year as under existing regulations. The plan also calls for stripping California of its authority to regulate tailpipe greenhouse gas emissions.The Transportation Department and Environmental Protection Agency argued their proposal would pare the cost of new automobiles and save as many as 1,000 lives annually by spurring motorists to trade in older models for newer, safer vehicles. The agencies estimated the proposal would spare motorists some $2,340 in average new vehicle ownership costs. They combined those forecasts into the name of the measure, dubbed the “Safer Affordable Fuel Efficient Vehicles” -- or SAFE Vehicles -- proposal.But the Consumer Reports analysis counters the administration’s assertions that the plan would reduce traffic fatalities and boost highway safety. Consumer Reports argues instead that “the effects on safety from changes in fuel-economy standards are quite small and likely not statistically different from zero.”That assessment dovetails with concerns raised quietly by EPA officials last year, as the administration prepared to unveil its plan. At the time, EPA regulators repeatedly questioned the underlying safety assumptions, at least once warning that the proposed standards would actually be “detrimental to safety.”Representatives of the EPA and Transportation Department did not immediately respond to emailed requests for comment.The Consumer Reports analysis also paints a starkly different picture of potential costs for drivers, by highlighting the importance of fuel savings -- rather than vehicle purchase prices -- to motorists. Because most new vehicle buyers finance their purchases, they can start feeling the benefits of lower fuel costs right away, the organization says.And those fuel savings, in turn, drive higher consumer spending and more purchases of newer, safer vehicles, said the group, the advocacy arm of the consumer product research and testing not-for-profit that publishes Consumer Reports magazine.“The rollback is like a gas tax because it increases drivers’ fuel costs,” said Consumer Reports, likening the proposed policy change to an additional 63 cents per gallon of gasoline for owners of model year 2026 vehicles over potential costs under existing policy. Over the life of that 2026 automobile, the administration’s policy choice would translate to $3,300 in forgone savings, the analysis found. The owners of trucks and sport utility vehicles would be especially hard hit, according to the assessment.“The last thing the federal government should be doing is burdening consumers with more costs, while thwarting progress in the development of cleaner cars,” said Shannon Baker-Branstetter, a manager of cars and energy policy at Consumer Reports who co-authored the analysis.Consumer Reports compared the administration’s proposal with existing standards enacted by the Obama administration. However, supporters of the effort say it’s unclear automakers will be able to satisfy the Obama-era requirements. They say, the surging popularity of sport-utility vehicles and other trucks has made existing mileage requirements harder to satisfy, while raising the cost of new vehicles and putting them out of reach for many households.The administration has acknowledged a link between its plan and higher fuel consumption, saying its proposal could cause the U.S. to use an extra 500,000 barrels of oil daily.Carmakers have pleaded with administration officials to restart negotiations with California over the standards, arguing the changes could lead to years of uncertainty and a split market in which federal mileage requirements would govern most states, while California-backed rules would apply in states that account for more than a third of U.S. auto sales.Four major automakers said last month they had reached a compromise with California to voluntarily boost fuel efficiency, a move seen aimed at pressuring the administration to shift course.\--With assistance from Ryan Beene.To contact the reporter on this story: Jennifer A. Dlouhy in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Jon Morgan at email@example.com, Laurie AsséoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Automobile production in Brazil jumped 14.2% and sales grew 9.1% in July from June, the best performance for the month since 2014, the national automakers' association Anfavea said on Tuesday. Brazil's auto industry is recovering from a crushing depression that cost the country its place as one of the world's five biggest auto markets, even as automakers are still struggling with low margins. Auto exports to depressed Argentina, Brazil's largest foreign destination for its cars, are down 38.4% so far in 2019 compared to a year ago, Anfavea said.
(Bloomberg) -- A recent compromise between four major automakers and California’s clean-air regulator on fuel efficiency had already been rejected by the Trump administration months earlier as not “a productive alternative.”The deal -- which Ford Motor Co., Honda Motor Co., BMW AG and Volkswagen AG announced on July 25 alongside the California Air Resources Board -- eases the pace of annual efficiency improvements required under current Obama-era rules but is tougher than the Trump administration’s proposal to cap mileage requirements at 2020 levels.Key elements of the pact were contained in a November 2018 summary of California’s proposal that was prepared by Environmental Protection Agency staff for Bill Wehrum, then-assistant administrator for EPA’s Office of Air and Radiation, according to excerpts of the presentation viewed by Bloomberg.CARB spokesman Stanley Young confirmed on Friday that the state had offered the plan to the EPA last November. The previously unreported detail sheds new light on the months-long battle between between Washington and Sacramento over the mileage rules that automakers urged President Donald Trump to re-evaluate during his first weeks in office.“Looking back, it seems that they were never interested in negotiations or discussions,” Young said. He added that the four automakers’ support of California’s compromise “highlights the fact that our proposal is both feasible and realistic.”Relations between EPA and CARB officials have become tense, with each side blaming the other for the breakdown of talks. In a June 20 letter to GOP lawmakers, EPA Administrator Andrew Wheeler said California’s counteroffer hadn’t yet been endorsed by the state’s governor and attorney general when it was presented to EPA. He accused CARB Chairman Mary Nichols of being “unable or unwilling to be a good-faith negotiator.”The Trump administration’s 2018 proposal said capping fuel economy standards at 2020 levels would lead to less-expensive new cars than under the current rules. The agencies argued more-affordable cars would allow consumers to replace their older vehicles with newer, safer ones more rapidly and avoid thousands of traffic fatalities, claims that experts and EPA career staff have disputed.In a Bloomberg TV interview in early February, the EPA’s Wheeler said the state’s proposal suggested “just taking the Obama numbers and stretching that an additional year. And that doesn’t really get to the lives saved or the reducing the price of the automobiles to where we would like it to be.”The White House abandoned discussions with California officials a few weeks later, saying, “Despite the administration’s best efforts to reach a common-sense solution, it is time to acknowledge that CARB has failed to put forward a productive alternative” after the federal proposal was released.The four-company pact with California also highlights a growing chasm between the Trump administration and the auto industry, which after urging the administration to retool Obama-era mileage standards has since pushed back on the resulting plan that recommended capping requirements after 2020.That plan, put forth last year by the EPA and the National Highway Traffic Safety Administration, also proposed stripping California of its authority to regulate automobile greenhouse gas emissions. The state and others have vowed to fight in court to retain that power, and automakers fear that prolonged litigation will roil business plans that depend on predictable fuel economy standards.In June, a group of 17 major carmakers unsuccessfully asked Trump to resume talks with California, saying a pact for unified California-U.S. standards will “enhance our ability to invest and innovate by avoiding an extended period of litigation and instability.”California’s deal with the four carmakers -- and the one pitched to the EPA last fall -- pushes the 2025 efficiency target back to 2026, lowering the pace of gains each year compared to the current rules starting in 2022. Automakers would get more help to reach those targets from additional compliance credits earned by selling electric vehicles, and wouldn’t have to account for carbon emissions by the power plants that generate electricity used by battery-powered cars.“For over a year and a half, the administration expended a serious amount of resources to achieve a workable deal with California,” EPA spokesman Michael Abboud said in an email, adding, “not once did California submit a meaningful alternative.”Dave Cooke, a senior clean-vehicles analyst with the Union of Concerned Scientists, said California’s offer contained meaningful concessions.“The fact that this was the deal that EPA called not serious is incredible to me,” he said. “This is a substantial reduction in stringency from the federal program.”To contact the reporter on this story: Ryan Beene in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Jon Morgan at email@example.com, Laurie AsséoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
A group of 12 states led by California and New York on Friday challenged the Trump administration's decision to suspend a 2016 Obama administration regulation that more than doubled penalties for automakers that fail to meet fuel efficiency requirements. Automakers protested the higher penalties, which they said could cost the industry up to $1 billion annually, and the Trump administration finalized the regulatory freeze on July 12. The 12 states, joined by the District of Columbia, filed a petition in the U.S. Court of Appeals for the Second Circuit to reverse the rule released by the National Highway Traffic Safety Administration (NHTSA).
(Bloomberg) -- Everywhere you turn in the transportation industry these days, Toyota Motor Corp. seems to already be there.From batteries and self-driving vehicles to lunar rovers and ride-hailing companies, the world’s second-biggest automaker is on an investment spree, pouring more than $3 billion into deals and partnerships in recent years. Toyota, which reports first-quarter results Friday, is placing bets across the board, mimicking technology investors like SoftBank Group Corp.Toyota, Volkswagen AG and other carmakers face an uncertain future as new technologies and business models ripple through the $2.23 trillion global auto industry. Uber Technologies Inc. has made younger buyers less interested in owning and driving cars, and Tesla Inc.’s success with electric vehicles has spurred bigger rivals to counter with their own products. All told, car sales will be only slightly higher in 2030, while new spending on mobility services will total $1.34 trillion, Accenture predicts.“They are developing by far the most diverse lineup of different mobility products, from personal mobility to luxury cars and various types of shared mobility and commercial vehicles,” said Janet Lewis, an analyst at Macquarie Capital Securities (Japan) Ltd. in Tokyo. “Investors, to the extent that they are invested in the auto sector, generally agree that Toyota is looking like a winner.”Indeed, shareholders are endorsing Toyota’s approach. The automaker’s stock rose 1% on Thursday, leaving it up 10% this year and adding $18.6 billion in market value. That’s better than the Topix index and other Japanese automakers, even amid tepid profit and sales growth. Analysts surveyed by Bloomberg predict quarterly operating profit will rise 1.3% to 692 billion yen, while revenue will climb 1.6% to 7.48 trillion yen.Big BetIn addition to investments and partnerships, Toyota’s spends about 1.05 trillion yen ($9.7 billion) a year on research and development.Akio Toyoda, chief executive officer and grandson of the automaker’s founder, has been holding forth at public appearances about Toyota’s transformation into a mobility service provider from a manufacturer.“My true mission is to completely redesign Toyota into a mobility company,” Toyoda said in May, saying the mission is to not just make products that move people around but provide “all kinds of services related to mobility.”Ride-HailingToyota’s strategy is to tie up with the strongest ride-hailing providers in each region and then integrate its hardware and software into their services. Toyota is a major investor in the world’s three top ride-hailing companies: Uber, China’s Didi Chuxing and Southeast Asia’s Grab Holdings Inc.In Japan, the carmaker teamed up with SoftBank — which has poured even more money into the three companies — in yet another mobility service venture called Monet Technologies Inc.The Japanese companies are betting that Monet can evolve into a variety of transportation-related business. For example, they envision meal-delivery vehicles that can prepare food en route to customers, or hospital shuttles that offer medical examinations.Toyota’s rivals aren’t standing still, either. General Motors Co. injected $500 million into Uber rival Lyft Inc. in 2016 while also pursuing its own robotaxi program with the Cruise Automation unit. Daimler AG and BMW AG merged their car-sharing operations this year after buying up several local ride-hailing ventures.ElectrificationWhile Toyota was first out of the gate with the Prius hybrid car, it hasn’t rolled out any mass-market EVs. Like Volkswagen and other major automakers, the Japanese company was biding its time. That will change next year, when Toyota introduces the first of six EV models planned through 2025.To secure enough batteries, Toyota recently stepped up its dealmaking with manufacturers, racing competitors to secure supplies for pure-electric and hybrid vehicles. Volkswagen and Daimler have made tens of billions of dollars in battery investments.In July, the Japanese auto giant made back-to-back battery announcements with China’s Contemporary Amperex Technology Co. Ltd. and BYD Co. Toyota also is committed to work with suppliers Toshiba Corp., GS Yuasa Corp. and Toyota Industries, as well as long-term partner Panasonic Corp.In Japan, Toyota teamed with Mazda Motor Corp, Suzuki Motor Corp., Subaru Corp. and parts makers to develop a common platform for EVs, betting that a combined effort can save development and production costs.Earlier this year, Toyota’s brought forward its EV sales target by five years. The company now expects to see annual sales of 5.5 million units globally in 2025, compared with a previous timeline of 2030.Fuel CellsToyota placed bets on fuel-cell technology years ago, gambling that hydrogen would replace batteries to store and deliver electricity for cars. So far, the technology’s complexity and high development costs has scared off most rivals. Three years after introducing its Mirai hydrogen car, the model remains a rarity even in Japan.Even so, Toyota is keeping fuel-cell car development alive, with hopes that Chinese interest in hydrogen will create a bigger market for the technology. In April, Toyota said it will work with Chinese truckmaker Beiqi Foton Motor Co. and Beijing SinoHytec Co., an affiliate of Tsinghua University, to develop more commercial vehicles with fuel cells. In July, it struck a similar deal with carmaker China FAW Group Co. and Higer Bus Co. to supply fuel-cell systems.Hybrid CarsAfter keeping its hybrid-car technology in Japan, the U.S. and developed markets for years, Toyota is now seeking to enter new markets. It will supply its hybrid system to Suzuki globally, while Suzuki will sell compact vehicles through Toyota in India and Africa, the carmakers said in March. The pair also will jointly develop a multipurpose vehicle that will be sold in India under both brands.Toyota also may share the hybrid-car engine technology it pioneered with the Prius with Chinese manufacturers, seeking to catch up with rivals in the world’s biggest auto market. Toyota is in advanced talks to license its hybrid system to Chinese carmaker Geely Automobile Holdings Ltd., Bloomberg reported last year.Toyota will benefit if China eases emissions rules so that low-polluting hybrid cars aren’t penalized as much as normal gas guzzlers. Policy makers are now considering rules that would count levels from a super-low emission vehicle as one-fifth of a normal gasoline car, according to a draft of the rules released July 9 by China’s Ministry of Industry and Information Technology.A majority of Toyota’s new partners are Chinese manufacturers because Toyota wants to catch up there with Volkswagen and General Motors in the next decade. China contributed most of Toyota’s growth last year, as well as this year, thanks to new products and its Lexus luxury brand, which benefited from lower government tariffs on auto imports from Japan.Connected CarsAlthough Toyota lags behind General Motors and European rivals, the digital information business has been a central -- yet less visible -- element of its vision for the future.Automobiles are generating more data that can be shared in order to improve safety, monitor road conditions and help passengers. For example, many manufacturers see a future when collisions become rare because autonomous vehicles will be programmed to avoid each other.Toyota is working to have 70% of new cars connected globally by 2020, with almost all of those in the U.S. and Japan. Automakers are already using the cloud to generate revenue through telematics insurance and car-sharing services.Toyota also has talked about using data to alert dealers when cars need servicing, provide information about road and traffic conditions for smart city planning, and inform retailers where their customers are commuting from to allow more targeted marketing.Moon PlansAlthough less relevant for Earthlings, Toyota wants to be the first automaker on the moon. Together with the Japan Aerospace Exploration Agency, Toyota is planning to build a six-wheeled, self-driving transporter that can carry two humans for a distance of 10,000 kilometers. They expect to land a vehicle on Earth’s closest ndaimeighbor in 2029.The rover will use solar arrays and fuel cells to generate and store power. The vehicle will be big enough so the astronauts can take their suits off and live in it while exploring the lunar surface.“Toyoda is determined to shift his company into a mobility company from a conventional hardware-oriented corporation,” said Koji Endo, senior analyst at SBI Securities Co. “It’s yet to be seen if Toyota can win among the competition and rapid changes in the business model, but it seems management is determined to chase this course.”(Updates with Toyota shares in)\--With assistance from Kae Inoue.To contact the reporter on this story: Ma Jie in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Young-Sam Cho at email@example.com, Reed Stevenson, Michael TigheFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Tesla (NASDAQ:TSLA) stock has taken a dip. The electric-vehicle maker saw its share price fall from $264.88 per share down to as low as $222.25 last week following a disappointing earnings report. With investor sentiment negative, the TSLA bears may be vindicated.But is this just a short-term dip? While Tesla's performance over the last quarter failed to meet expectations, Tesla's production and sales continue to rise.TSLA stock is down 27% in 2019 It seems as if the Tesla bears are finally having their day in the sun. But are the bears misguided?InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 10 Best Stocks to Invest in for August Is TSLA at a turning point that will lead to profitability? Let's take a closer look at TSLA stock, and see whether we can determine its future direction.. A Closer Look at TSLAWhile Tesla's performance improved in Q2, it failed to meet expectations. The company posted quarterly revenue of $6.35 billion, lower than analysts' average estimate of $6.4 billion. But its sales climbed 40% quarter-over-quarter, and 59% year-over-year.It delivered 95,356 vehicles in Q2 (setting a company record), and production reached an all time high of 87,048 vehicles. The company also posted positive EBITDA (earnings before interest, taxes, depreciation, and amortization). Specifically, Q2 EBITDA came in at $370.3 million, compared to a loss of $28.5 million in the first quarter of 2019.Tesla stock has two key catalysts in the pipeline. The first is the Shanghai "gigafactory." The Chinese facility is projected to open later this year. Expanding operations into China is a game-changer for Tesla stock. TSLA anticipates the facility could produce up to 150,000 vehicles per year. With the Model 3's Chinese base price set at around RMB 328,000 (~$47,653), the gigafactory will be a shot in the arm for the company's global sales.The second catalyst is the launch of the Model Y in America. The Model Y is anticipated to hit the streets in the fall of 2020. A compact SUV model, the Model Y has a large potential market. Targeting the high-margin SUV market is the right move for the company. I can see this vehicle enabling Tesla to become a top brand amongst the "mass affluent." Risks to the Bull Case on TSLAThe TSLA bears make a strong case. The company continues to depend on dilutive equity sales and convertible debt offerings to fuel growth. Tesla boosted its cash reserves by $2.35 billion thanks to a recent offering. Tesla believes it has the liquidity to fund both Chinese Model 3 production and US Model Y production. But will it need to raise more money?Given Tesla's track record, I can see the company talking a big game, but having to sell more equity to meet its goals. On the other hand, I could see the Tesla bears eating crow on a small amount of good news. The company is targeting "positive GAAP net income" starting in Q3 With TSLA in such murky waters, what should investors do with Tesla stock? Should investors consider buying Tesla stock on weakness or should they wait until the shares drop further? All Bets Are OffUntil we see Tesla's Q3 earnings (scheduled to be released in October), all bets are off. The TSLA bulls have a solid case. In the next year, the company's sales could skyrocket thanks to the Model Y and the opening of the gigafactory. The company could start posting consistently profitable results. This will give credibility to the current valuation of Tesla stock. On the other hand, the TSLA bears make cogent arguments of their own. The company's valuation is largely built on high expectations. If TSLA fails to deliver, the bears' day in the sun could continue.So what's the verdict on TSLA stock? Tesla stock trades at a premium valuation to its automotive peers. That's understandable, given the company's disruptive powers. But it is not as if the major car makers aren't in the electric vehicle game themselves. Once electric vehicles become viable without the help of government tax credits, the major auto names may have the edge in selling affordable electric cars to the masses. But that may not hurt Tesla stock. TSLA is not looking to become the next Ford (NYSE:F) or Toyota (NYSE:TM); it's gunning for the mass affluent market.But in terms of Tesla stock, I am on the sidelines. I learn towards the bears, but can easily see the stock jumping on crumbs of good news. I also believe Tesla stock price could capitulate, as we saw earlier this year (when TSLA fell from over $300 per share to under $200 per share). With a plethora of other growth stories out there, investors may be better off skipping TSLA stock in favor of other opportunities.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy With Over 20% Upside From Current Levels * The 10 Best Stocks to Invest in for August * 6 Upcoming IPOs for August The post Bulls and Bears Are Making Good Points on Tesla Stock appeared first on InvestorPlace.
(Bloomberg Opinion) -- California just notched a victory in its battle with the Trump administration over environmental policy. What makes this win especially notable — and especially encouraging — is that an alliance with car manufacturers helped bring it about. Some background: For more than half a century, California has been permitted to set its own targets for auto emissions and fuel economy — standards that more than a dozen other states, representing more than 30% of the U.S. auto market, now follow. Car makers came to treat the state’s high standards as de facto national benchmarks. That worked well enough until last year, when the Environmental Protection Agency, under President Donald Trump’s direction, said it would set new and less demanding national standards — in effect, driving a wedge between California’s rules and the targets to be applied elsewhere. In talks with the Trump administration to establish consistent — and looser — national standards, California stood its ground. The White House angrily broke off the discussion; California threatened to adopt “extreme” new rules if the president didn’t relent; and lengthy litigation loomed. Auto makers faced the debilitating prospect of dueling regulatory mandates. In June, a group of 17 asked the president to resume negotiations, but he refused: Industry leaders would have to choose sides and fall into line. They did. They chose California, and the state recently announced that it had negotiated its own deal with four major companies: BMW, Ford, Honda and Volkswagen. This new agreement slightly relaxes the state’s standards, but the rules are far stricter than the White House envisaged. Other companies are thinking about joining the pact. And Canada says it will bring its own rules into line.The Trump administration has dismissed the deal as unimportant. In fact, it matters a lot. It shows that car manufacturers, which seek regulatory certainty above all, find it easier to achieve that by dealing with California and other environmentally responsible states, rather than with an erratic, ill-managed federal regulator. Best of all, of course, if Trump’s initiative on cars is defeated, there will be large collateral benefits in the form of cleaner air and carbon abatement. The administration has pledged to carry on fighting, but if the manufacturers unite in opposition, it will lose — and the country as a whole will win. \--Editors: Tracy Walsh, Clive CrookTo contact the senior editor responsible for Bloomberg Opinion’s editorials: David Shipley at firstname.lastname@example.org, .Editorials are written by the Bloomberg Opinion editorial board.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
German prosecutors said on Wednesday they had filed charges against former Audi Chief Executive Rupert Stadler, who is being investigated over his role in Volkswagen's emissions test cheating scandal. Volkswagen admitted in September 2015 to having used illegal engine control software to cheat pollution tests, triggering a global backlash against diesel. The public prosecutor's office in Munich said Stadler and three other defendants are being charged with fraud, false certification and criminal advertising practices.
(Bloomberg) -- About 5,000 euros ($5,600) are set to buy your 10-year-old combustion clunker an electric makeover—and offer a cut-price way to avoid driving bans across European cities.French startup Transition-One has developed retrofitting technology that adds an electric engine, batteries and a connected dashboard into older models of Fiat Chrysler Automobiles NV, Volkswagen AG, Renault SA and PSA Group for about 8,500 euros, or 5,000 euros after government subsidies in France.“I’m selling to people who can’t afford a brand new 20,000-euro electric car,” founder Aymeric Libeau said in an interview aboard his first prototype, a Renault Twingo from 2009 with an electric driving range of 180 kilometer (112 miles). “We’re turning the best-selling models across Europe into electric cars.”Libeau expects French and European regulator approval by the end of the year and will start pre-orders in September to test demand.Automakers are rushing to churn out electric cars to comply with stricter regulations on emissions in Europe. While sales are rising, hybrid and battery cars made up less than 3% of total sales last year as vehicle prices remain comparatively high with shorter driving ranges than conventional models.Read more: A Dead End for Fossil Fuel in Europe’s City CentersEven as the tepid uptake is set to reverse in coming years, initiatives like Transition-One’s show the car industry is still trying to navigate a path towards an electric future, with the risk of outright driving bans giving birth to moonshot ideas. “You could technically turn a handcart into an electric car—the question is, does it make sense and how big is the effort?”An increasing number of cities has already started to ban older diesel cars, after the 2015 Volkswagen diesel emission-cheating scandal prompted scrutiny of cars flouting limits. Over the next decade, many more European cities will cut access to fossil-fuel cars altogether.In the prototype Twingo, three battery packs are fitted in front and two in what used to be the gas tank. The whole pack, bought from a Tesla Inc. parts reseller, weighs 120 kilograms (265 pounds). To compare, Renault’s electric Zoe has a 290 kilogram battery for a 210 kilometer driving range. Prices start at around 23,000 euros excluding battery rental battery.The transition takes less than a day, leaving the original stick shift and gear box and installing the plug behind the hatch that drivers usually pop open to refill the tank.There are doubters on Libeau’s approach, and questions over how attractive a shortened driving range will be to motorists. Markus Lienkamp, a professor of automobile technology at the Technical University of Munich, also warns against the risk of errors and the difficulty of obtaining regulatory approvals for the retrofitted cars.“You could technically turn a handcart into an electric car—the question is, does it make sense and how big is the effort?” Lienkamp said. “My advice would be to drive the combustion car as long as it can take, and just buy a new electric car after, because it makes much more sense financially.”Libeau, whose previous experiences include co-founding software company Pentalog Group, has worked on retrofitting for two years, and tested the method with a French business school. He is looking to raise 6 million euros to build a factory he says would be capable of churning out as many as 4,000 vehicles next year.Retrofitting services have so far focused on one-offs for classic cars with a number of small companies offering a variety of conversion kits. What’s specific with the French startup is a plan to help create a regulatory framework rather than case-by-case permits to broadly offer the technology.Read more: The New Hot Rods Are Souped-Up Vintage Cars With Electric MotorsPSA Chief Executive Officer Carlos Tavares has called the idea of retrofitting “great” while cautioning that large companies needed worldwide regulations on emissions and safety before going down this road. “For that to happen, first thing is: align regulations,” he said on his online show ACoffeeWithCarlosTavares earlier this month.Transition-One’s solution is compatible with models including PSA’s Citroen C1 and Peugeot 107, Fiat 500, Toyota Aygo, Twingo II and Volkswagen Polo.“If the end goal is to cut pollution, all solutions should be on the table,” Libeau said, driving in the dense traffic of central Paris. “New cars aren’t enough.”\--With assistance from Oliver Sachgau.To contact the authors of this story: Ania Nussbaum in Paris at email@example.comMarie Mawad in Paris at firstname.lastname@example.orgTo contact the editor responsible for this story: Elisabeth Behrmann at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- China’s plan to standardize the use of 5G for vehicles to talk to each other could lead to the U.S. falling behind in the commercialization of self-driving cars, according to Qualcomm Inc. China will be “saving hundreds, if not thousands, of lives much sooner than we will as we fumble to determine which is the standard that is best for the long-term road map in the Western world,” Patrick Little, a Qualcomm senior vice president, said in an interview. “If we can get around a common standard, we can deploy it more quickly, save a lot of money and save a lot of time.”Little’s comments are part of an effort by Qualcomm and more than 100 companies to push regulators worldwide to embrace a standard called C-V2X -- cellular vehicle-to-everything -- that will run on 5G. The technology would enable vehicles and infrastructure to beam real-time traffic data to one another and reduce accidents. Rival firms are lining up behind a Wi-Fi-based standards and pursuing a market for car electronics data transmission that IHS Markit estimates will grow to $9.2 billion by 2025.While proponents of the Qualcomm-backed standard say it’s faster and more reliable, companies including top automotive chipmaker NXP Semiconductors NV argue that an existing Wi-Fi-based technology called DSRC is good enough. Other backers of DSRC include General Motors Co., Volkswagen AG and Honda Motor Co.“The big thing is, it is available, it is proven, it has millions of miles driven and tested,” NXP President Kurt Sievers said in an interview.Choosing between the two standards is only one piece of the puzzle involved in making self-driving cars a reality. China is years behind the U.S. in terms of road testing robocars, with Alphabet Inc.’s Waymo and others having logged millions of test miles in California alone.Still, China is the world’s biggest auto market and has sent a clear signal it will embrace C-V2X. In October, the country announced plans to use the standard and set aside airwaves specifically for connected cars. That’s led 5G Automotive Association, a group founded in September 2016, to predict China will be first to get C-V2X cars on the road. Ford Motor Co. and Byton have disclosed plans to make vehicles that adopt the standard.In the U.S., the Trump Administration has yet to make a decision on which standard to back. The European Commission was poised to back DSRC, but the proposal was shot down by member states in July. Elsewhere in Asia, Japan is planning to allocate spectrum to DSRC, and South Korea intends to set aside airwaves for both standards.DSRC’s entrenched position will hinder C-V2X’s adoption outside of China in the next three years, Bloomberg NEF wrote in an April report. But longer-term, the U.S., Korea and Japan are likely to switch to C-V2X as those countries aggressively deploy 5G networks, the analysts said.The prospect of improving road safety is a major incentive for regulators to speed up their decision-making. The University of Michigan Transportation Research Institute estimated last year that as many as 8.1 million car crashes and 44,000 deaths could be prevented in the U.S if the federal government picked a technology this year compared with three years from now.\--With assistance from Ian King and Kevin E Heinz.To contact the reporter on this story: Ed Ludlow in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Young-Sam Cho at email@example.com;Craig Trudell at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Turns out that overturning the Obama administration’s fuel-economy rules isn’t as easy as it seems.Honda Motor Co., Ford Motor Co., Volkswagen AG and BMW AG struck an agreement with the state of California on Friday that will push through tighter fuel-economy regulations than those proposed at a national level by the Trump administration. Other major automakers are likely to follow that lead. Since states representing the most profitable third of the U.S. car market tend to follow California’s standards, that’s a significant blow to Washington’s attempt to roll back stringent Obama-era rules.Carmakers aren’t doing this out of the goodness of their hearts. The original rules would push the average passenger car sold in 2025 to achieve around 55 miles per gallon. That’s roughly the level of a latest-model Toyota Prius Prime plug-in hybrid running off its gasoline engine. Achieving those sorts of improvements (equivalent to a roughly 50% increase in mileage over the course of a decade) is challenging. Indeed, the deal with California will marginally wind back the state’s original fuel-economy target while handing out more electric-vehicle credits.So why didn’t the auto industry simply throw in its lot with the Trump administration’s maximally lenient approach? The answer comes from looking at the global picture, where shifts among the biggest car markets make divergent standards a problem. Two decades ago, U.S. rules could more or less define the shape of the world’s car market. America accounted for about two out of five new cars sold globally, and the European Union, with its tougher rules, was an outlier. That picture has been changing for a while. Japan has gradually moved from having fuel-economy rules close to U.S. standards to ones rather more ambitious than Europe’s, according to data from the International Council on Clean Transportation, a fuel-efficiency lobby group. Canada has been moving in the same direction too, and India – which had only rudimentary fuel economy policies in 1999 – now uses Europe as a model.Even China, where regulations have long been somewhat weaker than those in the U.S., is sharply upgrading its ambitions to reduce the toll of vehicle pollution on its cities by 2025. Tough rules around the share of new-energy vehicles in carmakers' fleets were put in place this year, and electric-car sales will top 2 million next year, according to BloombergNEF. Against that backdrop, the Environmental Protection Agency’s proposed rule would make U.S. states that don’t abide by California standards the odd ones out globally.For decades, carmakers have been trying to minimize the complexity of their global supply chains by having unified platforms and modular designs that can allow most of their output to follow a similar pattern, rather than developing bespoke vehicles for each market. So while companies generally like lenient regulation, they also want rules to be moving in a consistent direction.Consider metal-bashing. One of the main ways carmakers have worked to improve fuel economy has been to use aluminum instead of steel for the panels and parts that make up so much of a car’s mass. That can reduce the weight of individual parts dramatically –yet because aluminum sells for about three times as much as steel, it’s not a cost-free move. When the entire automotive industry is adopting lighter-weight metal, the increase in costs won’t worsen your competitive position. But if your rivals are taking advantage of lax regulations and sticking with cheap, heavy steel instead, you’re in trouble. That explains why the oil lobby and the auto lobby have been on different pages around this issue. For oil producers and refiners, weaker fuel-economy standards are an unambiguous win, promising higher sales to a key market. For carmakers, they’re a mixed blessing at best, and probably an absolute negative.Several decades ago, a concerted push from Washington could feasibly have switched global auto emissions onto a more carbon-intensive path. These days, America just isn’t a significant enough part of the world car market, especially when you leave out the California-aligned states. “The trend will not likely reverse,” energy analyst Philip Verleger wrote in a note to clients Monday. “The Trump administration’s failure to compromise with California on fuel economy will probably accelerate it.”As major investors in research and development, it’s little surprise that carmakers are relatively open to tougher regulation. A laissez-faire global auto market is one where any upstart can muscle its way in, but the current standards represent a competitive moat that will ensure only the fittest manufacturers can survive. Despite the Trump administration’s attempt to grab hold of the industry’s steering wheel, its destination is already fixed.To contact the author of this story: David Fickling at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Ford Motor Co, BMW AG , Volkswagen AG and Honda Motor Co said on Thursday they have reached a voluntary agreement with the state of California to adopt compromise vehicle emissions rules. The four major automakers' agreement to recognize California's legal authority to set vehicle rules is at odds with a White House plan to strip the state of that right. “Ensuring that America’s vehicles are efficient, safe and affordable is a priority for us all,” the automakers said in a joint statement that described the accord with California as a move to maintain a nationwide set of fuel efficiency requirements.