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|Day's Range||17.29 - 17.45|
|52 Week Range||14.70 - 18.84|
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Ford and Volkswagen are adding self-driving and electric cars to their list of projects. Yahoo Finance's Dan Roberts joins Seana Smith on 'The Ticker' to discuss.
Jul.12 -- Herbert Diess, Volkswagen AG chief executive officer, and Jim Hackett, Ford Motor Co. chief executive officer, discuss the companies' expanding alliance on developing self-driving and electric vehicles. They speak with Bloomberg's David Westin.
Volkswagen and Ford are teaming up on electric and self-driving car technology as the industry races to embrace innovation. Jim Farley, Ford's President of New Businesses Technology and Strategy for the Volkswagen-Ford alliance joins Yahoo Finance. He talks with Adam Shapiro and Julie Hyman.
Jul.12 -- Herbert Diess, Volkswagen AG chief executive officer, and Jim Hackett, Ford Motor Co. chief executive officer, discuss the automakers' agreement to extend their partnership in electric and self-driving car technology. They speak with Bloomberg's David Westin on "Bloomberg Markets."
The head of the labor union representing most hourly workers at the U.S. automakers struck an adversarial tone on Monday, vowing in likely contentious talks for new four-year deals that they want to share in the companies' profits. Rising healthcare costs, job security and the use of temporary workers are also expected to be major sticking points.
The United Auto Workers and Ford Motor Co will officially launch talks on a four-year contract on Monday that are expected to be contentious, with rising healthcare costs, job security and the use of temporary workers expected to be major sticking points. General Motors Co and Fiat Chrysler Automobiles NV (FCA) will kick off their own talks with the UAW on Tuesday. When the negotiators for the union and Detroit's automakers last sat across the table from each other in 2015, U.S. new vehicle sales were booming.
(Bloomberg) -- The car industry is reinventing the wheel to prepare for autonomous vehicles.Japan’s Sumitomo Rubber Industries Ltd., whose roots stretch back to when Henry Ford was building his Model T, is developing a “smart tire” that can monitor its own air pressure and temperature, and eventually respond by itself to changes in road conditions.Yet it’s more than just tires that are being changed. Koito Manufacturing Co., AGC Inc. and Lear Corp. are putting semiconductors and sensors inside headlights, glass and seats to make them as intelligent as the cars driving themselves.Alphabet Inc.’s Waymo LLC, Intel Corp.’s Mobileye NV and Baidu Inc. dominate the core technology for autonomous driving, yet suppliers still count on finding their own space in the business. Parts for advanced driver-assistance systems and autonomous driving are expected to become a $57 billion market within a decade, according to BIS Research, and old-school companies born during the early days of the automobile know they must either adapt or risk extinction.“Autonomous driving is a challenge for carmakers, but it’s a bigger challenge for conventional parts makers,” said Zhou Lei, a partner at Deloitte Tohmatsu Consulting in Tokyo. “They are striving to become the ‘five senses’ of the vehicle so they can remain relevant.”Carmakers have disclosed more than $14 billion in investments in autonomy and mobility companies since 2010, according to data compiled by BloombergNEF. Toyota Motor Corp. tops that list at about $3 billion.Though the deployment of highly autonomous commercial fleets isn’t expected to begin until at least 2022, the looming threat is that the increasingly sophisticated designs of those cars will render some ordinary parts –- and their suppliers -- unnecessary.For example, why would a self-driving vehicle that uses cameras, lasers and sensors to get around need headlights or mirrors?Smart HeadlightsThe response from century-old Koito Manufacturing is to reinvent the headlight. The Tokyo-based company, which traces its roots to making lenses for railway signal lamps in 1912, is adding sensors and artificial-intelligence chips to lamps it plans to introduce by about 2025.Positioned on the four edges of the vehicle, the lamps will be able to process information and react, such as by illuminating poorly lit crossings, signaling pedestrians that it’s safe to cross and raising an alarm to surrounding drivers by flashing a specific color.The company’s current customers include Toyota, Volkswagen AG and General Motors Co., according to data compiled by Bloomberg.“Autonomous driving will change the role of lamps,” said Yuji Yokoya, who recently retired as executive vice president of the Tokyo-based company. “We see them not just as lamps, but more as corner modules.”Tokyo-based automotive glass-maker AGC is re-imagining that product and making it part of a vehicle’s communication system.Window AntennasThe company, founded in 1907 as Asahi Glass Co. Ltd., is designing windows with built-in antennas for 5G wireless connections, allowing cars to send and receive signals with other vehicles and infrastructure. AGC’s customers include Toyota, Tesla Inc. and Sony Corp., according to data compiled by Bloomberg.An overarching challenge is to convince carmakers that the smarter -- and more expensive -- components make economic sense. Not all parts manufacturers need a radical transformation to keep up with autonomous and electric vehicles since they’ve been evolving gradually as the industry takes shape, said Deepesh Rathore, an independent automobile analyst based in Bengaluru.“A car is a car, and the shape of the tire doesn’t change,” Rathore said. “I can imagine some of those companies having to reinvent everything -- especially those working with engines and gearbox technologies.”Even components that aren’t facing an immediate existential threat are evolving. Sumitomo Rubber is researching tires that can transmit data about road conditions to the car as well as to other vehicles.Smart Tires & SeatsThe next step will be a tire that automatically adapts to road conditions. When the tire detects water, it will change the structure of its surface into one that is optimal for wet roads, said Kozaburo Nakaseko, an official in the research and development division of Sumitomo.“Tires need to become smarter,” Nakaseko said. “We cannot move into an autonomous car society without information about the roads we drive on.”The innovations aren’t just limited to Japan. In the U.S., Lear Corp. is equipping its car seats with biometric sensors to detect stress, drowsiness and changes in heart rate, and then activate treatments in response. The seats also can transmit data to a doctor or family member if necessary, the company said.Other functions include controls that let users create individual “micro-climates” where they are sitting, and noise-canceling features in the headrests, the Southfield, Michigan-based company said.“All the mechanical stuff will just slowly go away, and there is a lot of electronics coming in instead,” said Egil Juliussen, principal auto analyst with IHS Markit. “You have to change in order to survive.”\--With assistance from Mei Futonaka, Anurag Kotoky, Indranil Ghosh and Gabrielle Coppola.To contact the reporters on this story: Ma Jie in Tokyo at firstname.lastname@example.org;Nao Sano in Tokyo at email@example.com;Masatsugu Horie in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Young-Sam Cho at email@example.com, Ville Heiskanen, Michael TigheFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Our call of the day comes from a money manager who says he got out of stocks and bonds in early July, and why investors should follow suit.
The Trump administration said late on Friday it was issuing final rules to suspend a 2016 Obama administration regulation that more than doubled penalties for automakers failing to meet fuel efficiency requirements. Congress in 2015 ordered federal agencies to adjust civil penalties for failure to meet Corporate Average Fuel Economy requirements to account for inflation, and in response, the National Highway Traffic Safety Administration issued rules to eventually raise fines to $14 from $5.50 for every 0.1 mile per gallon of fuel that new cars and trucks consume in excess of the required standards. Automakers protested the hike, saying it could increase industry compliance costs by $1 billion annually.
Volkswagen started making the small car eight decades ago in Germany and ceased production this past week at its plant in Mexico. In its place: a new sports utility vehicle.
(Bloomberg) -- U.S. officials approved a record $5 billion privacy settlement with Facebook Inc. to resolve the Cambridge Analytica data scandal, people said, prompting an immediate outcry from lawmakers and privacy advocates who said it didn’t go far enough.Although details of the settlement with the U.S. Federal Trade Commission weren’t announced, the fine is steep but far from devastating for Facebook. The company, which reported revenue of almost $56 billion in 2018, had set aside $3 billion in anticipation of the fine.“This reported $5 billion penalty is barely a tap on the wrist, not even a slap,” said Senator Richard Blumenthal, a Connecticut Democrat, who called for a hearing on the agreement. “Such a financial punishment for purposeful, blatant illegality is chump change for a company that makes tens of billions of dollars every year,” Blumenthal said.The FTC’s settlement was approved by a vote of 3-2, according to two people who asked not to be named because they weren’t authorized to speak publicly about the decision. The agreement still needs approval from the Justice Department.The resolution caps a probe that opened in March 2018 after news that Cambridge Analytica, a consulting firm hired by President Donald Trump’s campaign, obtained user data from a researcher who created a personality quiz app on the social network.The settlement is the largest privacy fine in the FTC’s history and also marks the most significant action yet against Facebook over a series of mishaps that have compromised users’ data and sent the company reeling from one crisis to another. The agency’s two Democratic commissioners, Rebecca Kelly Slaughter and Rohit Chopra, voted against it, according to one of the people.Slaughter, Chopra, Facebook and the FTC declined to comment.Democratic Senators Ron Wyden of Oregon and Mark Warner of Virginia also criticized the settlement, as did House Antitrust Subcommittee Chairman David Cicilline, a Rhode Island Democrat who is conducting an antitrust investigation of Facebook and other technology giants.The job of defending the settlement will fall to FTC Chairman Joe Simons, who has tried to avoid split enforcement decisions as head of the agency.While Facebook had agreed to give its board oversight of its privacy policies, Chief Executive Officer Mark Zuckerberg is the controlling board member with nearly 58% of the voting power. The board also includes Facebook’s other top executive, Chief Operating Officer Sheryl Sandberg. The two already have power over the company’s privacy policies.Public interest groups including Public Knowledge, Public Citizen and the Open Markets Institute said any deal with the FTC should impose remedies that would rein in Facebook’s data collection practices in addition to a fine.“Something clearly has to be done to strengthen the data protection practices of that company,” said Marc Rotenberg, president of the Electronic Privacy Information Center, which filed a complaint against Facebook that led to the FTC’s 2011 consent decree with the social-media company that addressed a litany of deceptive practices.Tech industry group NetChoice praised the fine, saying it would motivate companies to improve their privacy practices.The Cambridge Analytica incident stems from a personality-quiz app offered to Facebook users by a Cambridge University researcher. About 270,000 people downloaded the app, allowing the researcher to access data about those individuals and their friends. The information was subsequently sold to Cambridge Analytica.Even as it resolves the FTC privacy inquiry, Facebook is still grappling with regulatory scrutiny on several other fronts -- including the prospect of a new investigation by the FTC’s antitrust section under an agreement with the Justice Department that divided oversight of four of the biggest tech companies. One area of focus is likely to be the company’s acquisitions of the photo-sharing app Instagram and the Whatsapp messaging service.Elsewhere in the U.S., the Justice Department and the Securities and Exchange Commission opened investigations related to the Cambridge Analytica scandal. Separately, the attorney general for Washington, D.C., has sued the company, claiming it failed to safeguard users’ data. Other state attorneys general are also investigating.Facebook declined to comment on the status of those probes.The settlement ranks among the highest at the FTC, which reached a $10 billion settlement with Volkswagen AG in 2016 for deceptive advertising in the emission-cheating scandal involving diesel models. The agency’s previous record fine in a privacy action came in 2012, when Alphabet Inc.’s Google paid $22.5 million to settle claims it misrepresented its privacy assurances to Apple Inc.’s Safari users.\--With assistance from Kurt Wagner and Naomi Nix.To contact the reporters on this story: David McLaughlin in Washington at firstname.lastname@example.org;Daniel Stoller in Arlington at email@example.comTo contact the editors responsible for this story: Sara Forden at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- To understand how much strain the world’s leading auto manufacturers face as they make the daunting leap to the electric and autonomous vehicle age, just listen to their leaders.“The business part of you wouldn’t do these things,” Ford Motor Co. Chief Executive Officer Jim Hackett said in a Bloomberg Television interview on Friday. That startling admission came after he had just inked a massive deal with German arch-rival Volkswagen AG to join forces to develop electric and self-driving cars.The auto industry is being disrupted by increasingly stringent environment regulations mandating electric cars, while breakthroughs in driverless technology have the potential to upend the way humanity moves. That’s forcing carmakers to balance rivalry with survival.“The leadership part of you requires that you do it,” Hackett said of partnering with the competition. “You have to invest in things that are uncertain, before they are ready, because when they are ready you can’t catch up.”The collaboration commits Ford to build battery cars on a VW platform, while the German automaker invests $2.6 billion in the American company’s autonomous-affiliate Argo AI. That gives the startup an eye-popping valuation of $7.25 billion -- and the commercial launch of its robot rides is still two years off.“This game will change, so economies of scale will be important,” VW CEO Herbert Diess said at a press conference Friday to announce the expanded tie-up with Ford. “Sharing tech and using standards will be important to succeed in the future.”Ford’s one-upmanship with VW goes back decades -- from the German manufacturer’s founding in the run-up to World War II, to America’s hippie-era love affair with the Beetle and fuel-sipping Rabbit model during the oil shock era, and now trade wars that threaten to further politicize commercial battles.But the shift to battery-powered cars and autonomous driving will require different tools than the ones carmakers have spent the better part of a century honing. It’s no longer just about building ever-more powerful engines and sculpting exterior sheet steel.The Ford-VW deal is a bet on a coming age of electric-powered robo-cars that will take fresh approaches to competition, marketing and planning. And it will take money -- gobs and gobs of it.While the deal will result in a new electric passenger vehicle from Ford in 2023 and Argo joining with VW brand Audi’s autonomous operation to deploy self-driving test vehicles in Europe next year, it’s really about ensuring each company’s survival well into the future.“They’re looking at the longer term,” said Stephanie Brinley, auto analyst with IHS Markit. “These moves aren’t about 2025, these moves are about these companies trying to make sure they’re fully ready and capable for 2030 and 2040 and taking the steps you need to get that far down the road.”Electrification will cost carmakers $225 billion through 2023, roughly equal to the industry’s annual total for capital expenses, research and development spending, according to consultant AlixPartners. Self-driving cars will soak up an additional $85 billion through 2025.The partnership between Ford and VW shows how some companies are tackling the task with more urgency than others.So far buyers aren’t exactly swarming showrooms to pick up electric cars. High prices, patchy charging infrastructure, and, with the exception of Tesla Inc.’s sleek models, unorthodox styling have made them a tough sell.Likewise, the payoff in self-driving technology is years away and drivers remain resistant to turning over the wheel to a robot. But consumer habits are changing, as people rely less on ownership and turn to sharing apps, e-bikes and scooters for more of their transportation needs.Cash-rich giants like Alphabet Inc., Amazon.com Inc. and Apple Inc. have turned industries from phones to cameras to television upside down, and auto executives fear they could be next as cars become increasingly high-tech and software-dependent.“The OEMs have to invest through this valley to get to the other side,” Mark Wakefield, a managing director with AlixPartners, said last month. “But investing -- or partnering to invest -- to get through that is a way to span the generational path.”Jim Farley, Ford’s president of new businesses, technology and strategy, said the partnership with VW isn’t only about cutting costs. This collaboration could help accelerate each automaker’s trip through the profit desert Wakefield warns of.“This is not only a capital efficiency play,” Farley said in an interview. “It’s absolutely leverage on our margins, especially in a place like Europe.”Other automakers are also reinventing themselves. General Motors Co.’s acquisition of the self-driving startup Cruise in 2016 for $581 million has turned out to be prescient. The automaker has since attracted three major outside investments totaling $6.15 billion. As of May, GM Cruise was valued at $19 billion when T. Rowe Price Associates Inc. joined earlier backers, Honda Motor Co. and SoftBank Vision Fund.VW’s backing of Argo AI -- $1 billion in cash and another $1.6 billion for the value of its Autonomous Intelligent Driving unit that it’s contributing -- should put that self-driving startup on a similar path to attracting outside investment.“Now that a valuation’s been set and with the potential of this relationship, it does set us up well for that,” said Bryan Salesky, Argo’s co-founder and CEO, a veteran of Google’s self-driving car program. “I’m sure that’s in the cards at some point in the future.”Meanwhile, Fiat Chrysler Automobiles NV tried -- though it failed -- to build scale and gain access to electric-car technology through a merger with Renault SA, to make up for its dearth of battery-powered cars. Chairman John Elkann this week told Italian newspaper La Stampa that the attempt was “an act of courage” and would have allowed it to make better use of capital and more cars.On the other side of the spectrum sits the Renault-Nissan-Mitsubishi Alliance, where tensions threaten to rip apart two decades of cooperation just at the moment it’s needed most.Lack of a decisive strategy on electric cars this month also cost BMW AG CEO Harald Krueger a second term as leader, after he couldn’t unite a bickering board behind him. And Daimler AG’s new CEO Ola Kaellenius will have to dig deep on leadership skills to steer the Mercedes-Benz maker that’s endured four profit warnings in just over a year. Those two German automakers have partnered on a self-driving project they vowed earlier this month would see robot-piloted cars on highways by 2024.Building a software stack for autonomous vehicles may cost a few billions of dollars, while maintaining it will cost billions more each year, VW’s Diess said in the joint interview with Ford’s CEO. “The times we are facing, we will get into resource problems” without the help of partnerships, he said. “Because it gets really, really expensive.”\--With assistance from Chester Dawson and David Westin.To contact the reporters on this story: Keith Naughton in Southfield, Michigan at email@example.com;Elisabeth Behrmann in Munich at firstname.lastname@example.org;Christoph Rauwald in Frankfurt at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, ;Craig Trudell at email@example.com, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Ford and Volkswagen deepened their partnership by agreeing to collaborate on self-driving cars and electric vehicles.
The S&P 500 closed above the 3,000 level for the first time, with the industrial, consumer discretionary and materials sectors each posting gains of at least 1%. Illumina Inc shares tumbled 16.1%, the most among S&P 500 companies, after the gene sequencing company's preliminary second-quarter revenue came in below analyst estimates.
The S&P 500 traded above the 3,000 level for a third straight session, also boosted by a 0.63% gain in the technology sector, the S&P 500's best performer so far this year. The healthcare sector fell 1.70%, the most among the 11 major S&P sectors, weighed down by a 4% slide in shares of Johnson & Johnson. The Dow Jones Industrial Average was up 157.23 points, or 0.58 percent, at 27,245.31 and the S&P 500 was up 6.24 points, or 0.21 percent, at 3,006.15.
The S&P 500 and the Dow Jones Industrial Average hit fresh record highs on Friday, as the indexes continued a strong run for the week on hopes of an interest rate cut this month, while investors waited for the start of the corporate earnings season. In his two-day testimony before Congress, Federal Reserve Chairman Jerome Powell said the U.S. economy was still under threat from disappointing factory activity, tame inflation and a simmering trade war and that the central bank stood ready to "act as appropriate". Abate said most of the positive catalysts that have driven the market higher, have been priced in and now the focus will shift to the earnings season in the next few weeks.
(Bloomberg) -- Volkswagen AG and Ford Motor Co. will cooperate on electric and self-driving car technology, sharing costs on a global scale to take a major step forward in the industry’s disruptive transformation.VW will invest $2.6 billion in Ford’s autonomous-car partner Argo AI in a deal that values the operation at more than $7 billion, the two manufacturers said Friday in a joint statement in New York, confirming a figure first reported by Bloomberg. This includes $1 billion in funding and VW contributing its Audi $1.6 billion Autonomous Intelligent Driving unit.“While Ford and Volkswagen remain independent and fiercely competitive in the marketplace, teaming up and working with Argo AI on this important technology allows us to deliver unmatched capability, scale and geographic reach,” Ford Chief Executive Officer Jim Hackett said.Ford shares climbed as much as 2.1% as of 9:40 a.m. Friday in New York. VW’s preferred stock was up 1.6% in Frankfurt.Unprecedented shifts facing the auto industry are forcing players to consider new partnerships and potential consolidation. VW, the world’s top automaker, offers the industry’s most ambitious roll-out of electric models, while Ford, also in the top 10, is developing advanced self-driving technology with Argo.For VW, the Argo investment offers an opportunity to potentially catch up with Alphabet Inc.’s Waymo, and General Motors Co.’s Cruise unit. Road tests and accumulating huge amounts of data are critical for the further development of self-driving cars, and few apart from Waymo are equipped to do it alone.“It took a while to get this deal done, but it’s because we actually sorted out a lot of the hard problems,” Bryan Salesky, Argo AI’s co-founder and CEO, said in an interview. “We have a clear line of sight to production, vehicle supply and we have clear line of sight to where we want to go to market and how.”Besides sharing costs for the development of self-driving cars, Ford will use VW’s electric-car underpinnings that form to backbone of the most aggressive rollout of electric cars in the industry with Volkswagen spending some 30 billion euros ($34 billion). Adding more vehicles to production lines would help gain scale and save costs, and offer Ford a platform to better comply with tougher rules on carbon-dioxide emissions in Europe.Ford will build at least one mass-market battery car in Europe starting in 2023 and deliver more than 600,000 European vehicles based on VW’s platform, dubbed MEB, over six years. A second electric model for Europe is under discussion.Teaming up with its U.S. peer is one of the key initiatives of VW Chief Executive Officer Herbert Diess to overhaul the German industrial giant. Both sides reiterated on Friday the tie-up does not include entering equity ties between Ford and VW.For Ford, a deal with VW fits with CEO Jim Hackett’s $11 billion overhaul of the company, which includes exiting the slow-selling sedan market in the U.S., shifting to focus on commercial vehicles in Europe and investing in electric-truck startup Rivian Automotive Inc. Geographically, the companies complement each other, with Ford strong in the U.S. and VW a leader in Europe and China.“Our global alliance is beginning to demonstrate even greater promise , and we are continuing to look at other areas on which we might collaborate,” VW CEO Diess said.(Updates with shares trading in fourth paragraph.)To contact the reporters on this story: Christoph Rauwald in Frankfurt at firstname.lastname@example.org;Keith Naughton in Southfield, Michigan at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, ;Anthony Palazzo at email@example.com, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Car launches are 10-a-penny so it’s very rare that a particular model’s demise captures the world’s attention. The Volkswagen Beetle, the last of which rolled off the production line in Mexico this week, was no ordinary vehicle though.The downfall of the “People’s Car,” an icon of post-war German prosperity as well as the 1960s counterculture, is all the more painful because of what’s replacing it. Bloomberg News reported this week that the Mexican plant is now gearing up to build – wait for it – a compact sports utility vehicle.With all due respect to VW’s new SUV, I doubt it’s going to capture hearts the way the “Love Bug” did, not to mention the original tiny Fiat 500 or Britain’s Mini for that matter. Petite, fuel-efficient cars would seem to be an obvious solution for a warming planet and our increasingly crowded cities. Yet they’re fast becoming an endangered species in western markets. Consumers have voted with their wallets by buying SUVs and because they carry fatter profit margins, carmakers have been happy to oblige. VW’s famous entreaty to Beetle customers to “think small” hasn’t worked out. But killing the affordable small car could yet have adverse consequences for the auto industry – as well as the environment. At their best, they marry affordability and utilitarian styling and they can be outrageously good fun to drive. In a recent “research” video report for clients, the Bernstein analyst Max Warburton borrowed a vintage 1.9 liter Peugeot 205 GTI – a racy version of the French bestseller. His boyish delight at getting behind the wheel was palpable.Compact cars have always struggled to gain traction with Americans, though, and they’ve been overshadowed recently by the boom in trucks and SUVs, which account for almost 70% of the U.S. market. Cheap credit and leasing have made larger vehicles more affordable; the average purchase price of a new car has risen to an eye-watering $37,000. And low gas prices make these heavyweights less costly to run. In fairness, some compact SUVs are actually pretty fuel efficient, so even a big rise in pump prices might not reverse this trend.Plus there’s the safety factor, which compels even people who don’t like SUVs to buy one in case they get into an accident with another giant vehicle. Pedestrians are more likely to be killed if they’re hit by a large SUV, but that’s apparently of little concern.In Europe, where small cars still account for about one-third of the market, there’s another (counter-intuitive) factor working against compact models: Tougher emissions standards. By 2021 carmakers must achieve average fleet emissions of 95g CO2/km. Targets for 2025 and 2030 are even more stringent.The problem, car executives say, is that the high cost of electrification technology is difficult to combine with the economics of smaller, cheaper cars. Installing emissions-cutting kit in a compact car requires either a prohibitively high sticker price or the sacrifice of profit margins. Perversely, it can be cheaper for carmakers not to bother and just pay the regulatory fine.Hence several entry-level models might be facing the chop, at least until the cost of batteries falls. VW’s CEO Herbert Diess said recently that his company’s smallest vehicles, the Up! and Polo, are “really under threat.” Meanwhile, Peugeot SA’s Opel/Vauxhall has already announced that its Adam and Karl city cars face the ax.From a profit and regulatory compliance perspective, it’s certainly better for carmakers to sell lots of hybrid SUVs and high-performance sports cars. But is this better for the environment? That’s debatable.Some hybrids still emit lots of CO2 when driven distances that exceed their very limited electric-only range, and that’s not their only drawback. “The problem with plug-in hybrids is that consumers don’t plug them in,” says Bernstein’s Warburton.One sad consequence of these trends is that there will be fewer new vehicles on the market that poorer or younger customers can afford to buy and insure. While they’ll be able to buy second-hand still, a dearth of cheap models may turn even more people off the idea of car ownership.Car-sharing, bike-sharing and electric scooters have already persuaded many young city dwellers that there are better alternatives; the average age of a new car buyer in Germany has risen to 53. SUVs have killed the small affordable vehicle. But big, self-owned cars face their own struggles.To contact the author of this story: Chris Bryant at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis 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.
In a long-anticipated move, (F) and (VOW3) expanded their global partnership, saying they plan to collaborate on electric vehicles as well as autonomous driving and the artificial intelligence that will guide self-driving cars. The deal, which builds on a partnership formed in January, illustrates once again the challenges of developing the expensive technologies that will become part of driving in the future. Research and development requirements are rising, forcing car makers to collaborate to spread out costs over a larger base of vehicle sales.
Volkswagen AG's $2.6-billion investment in Ford Motor Co's Argo AI self-driving unit, announced on Friday, immediately vaults the two-year-old Pittsburgh-based startup into the top ranks in the sector. Argo said VW was investing $1 billion in cash and contributing its European self-driving unit, valued at $1.6 billion. The investment deal gives Argo a valuation of just over $7 billion, one of the highest in the autonomous vehicles sector.