Auto Manufacturers
Think You Owe The Government Big? Fiat Chrysler Was Fined $77 Million For Missing Fuel Economy Requirements.
According to Auto Week, “Fiat Chrysler Automobiles revealed that it paid a $77 million civil penalty to the U.S. government in 2018 for missing Corporate Average Fuel Economy, or
CAFE, targets in 2016, Bloomberg reports. The $77 million fine was the largest imposed on a single automaker in at least five years, Bloomberg notes, citing NHTSA data. FCA was also the only automaker to pay a fine for the 2016 model year. The current rules,
which allow automakers to accrue credits and buy credits from other automakers, were instituted in 2012 and mandate car companies to a reach fleet-wide fuel efficiency level greater than 50 mpg by 2025 -- nearly double the level in 2012. A number of automakers
have lobbied the Trump administration to revise fuel economy targets in light of trends in the automotive market that favor larger vehicles. The administration has responded favorably, proposing to freeze CAFE requirements at the 2020 model year level, despite
efforts in the last days of the Obama administration to cement the 2025 targets.” [Auto Week,
2/12/19 (=)]
Electric Vehicles
EVs Are Catching Up To Gas Cars.
According to the Las Vegas Sun, “It’s time to start taking electric vehicles seriously. The cost of the batteries powering EVs has fallen by more than 70 percent since 2010, making
them competitively priced with gasoline-powered vehicles. EVs actually save owners money over their life span. Drivers in Las Vegas would save over $1,000 each year owning an EV, compared with the costs of fueling and maintaining gas-powered vehicles. As the
popularity of EVs grows, prices will continue to fall as economies of scale drive down costs of production. While EVs are economically beneficial for a household, they also help promote our state economy. The Tesla Gigafactory in Northern Nevada directly employs
more than 7,000 people, paying out $379 million in wages annually. It’s created a pipeline for local students to attain well-paid, high-skill manufacturing jobs. That base of skilled labor will be highly attractive to other automakers, like Nissan and Chevrolet,
interested in expanding production in batteries and electric vehicles.” [Las Vegas Sun,
2/13/19 (=)]
Tesla Rushes Model 3s to China Before Trade-War Truce Expires.
According to Bloomberg, “At least three ships roughly the length of two football fields are slated to arrive at ports in China by the end of this month, each carrying precious cargo
from Elon Musk. Tesla Inc. is loading as many Model 3 sedans as it can onto vessels destined for the People’s Republic ahead of March 1, when a trade-war truce between presidents Donald Trump and Xi Jinping is scheduled to expire. Musk fears the two countries
could ratchet tariffs back up, which would make the chief executive officer’s electric cars more expensive in China and boost costs of key components the country sends to his U.S. assembly plant. Other carmakers are at risk of seeing expenses rise again if
the Trump-versus-Xi dispute flares back up. But Musk is in perhaps the most precarious position in the industry. Global giants such as BMW AG and Daimler AG can wiggle around the tariffs to an extent by boosting production at existing China factories, but
Tesla’s manufacturing presence there was merely a muddy field as of last month. It won’t be assembling any vehicles in China until the end of 2019 at the earliest.” [Bloomberg,
2/13/19 (=)]
Ford Executive Raises Doubts About VW Deal For Electric Vehicles.
According to CNBC, “Ford and Volkswagen appear increasingly unlikely to pull together a deal to work together on battery-electric vehicles, a senior executive with the Detroit automaker
said this week. The two companies announced plans last month to team up on the development of light commercial vehicles and confirmed that other projects were under consideration. It has been widely reported that a key focus was on battery-electric vehicles,
a move that could help Ford and VW save billions of dollars by sharing R&D efforts. But their programs are out of sync, ‘almost like snowboarding and skiing,’ Jim Farley, Ford’s president of global markets, said Monday during a taping of the local TV show
‘Autoline Detroit.’ Automakers around the world have begun looking for ways to partner with erstwhile rivals in order to address an increasingly challenging environment. Many of these alliances focus on the development of new technologies, such as electrification
and autonomous driving, areas in which Ford and Volkswagen aim to take a lead.” [CNBC,
2/12/19 (=)]
Amazon And GM May Invest In Rivian's Electric Pickup Trucks.
According to Engadget, “Rivian might be attracting some big money just a few months after unveiling its electric pickup truck and SUV. Reuters and Bloomberg sources say Amazon and
GM are in discussions to invest in Rivian in an agreement that would value the EV startup between $1 billion and $2 billion. They would have minority stakes in the company, but this would still represent a big boost for an automaker whose first vehicle won’t
roll off the assembly line until 2020. The talks aren’t guaranteed to bear fruit, although Reuters understood that a successful deal could be announced as early as February. Amazon told Engadget it declined to comment on rumors and speculation. In a statement
to Bloomberg, GM spokesman Pat Morrissey didn’t confirm or deny the talks but did say that the brand ‘admire[s] Rivian’s contribution to a future of zero emissions and an all-electric future.’” [Engadget,
2/13/19 (=)]
GM, Amazon Reportedly Ready To Invest $1B-$2B In Rivian Electric Trucks.
According to the Detroit Free Press, “Suburban Detroit-based electric pickup maker Rivian declined to comment Tuesday evening on reports that General Motors and Amazon plan to invest
$1 billion to $2 billion in the startup, which was among the stars of the Los Angeles auto show late in 2018. Reuters initially reported negotiations that could lead to a deal among the companies being announced as soon as this month. Reuters said Amazon was
mum. GM issued a statement that said, ‘We admire Rivian’s contribution to a future of zero emissions and an all-electric future.’ Rivian plans to sell a battery-powered pickup and midsize SUV by the end of 2020. The company owns a former Chrysler and Mitsubishi
assembly plant in Normal, Illinois, where it plans to build the vehicles. $60,000+, 400 miles on a charge Rivian has also said it will license its technology to other automakers. Little is known about the details of Rivian’s engineering today. The company
says its R1T pickup will have a range of 250 to 400 miles and four electric motors, one for each wheel. Rivian’s tech center and headquarters are in Plymouth, Michigan. Rivian’s stand next to Ford Motor Co. drew huge crowds during the LA Auto Show. The R1T
pickup and R1S SUV were both on display.” [Detroit Free Press,
2/12/19 (=)]
Amazon and GM May Invest in Electric Pickup-Truck Manufacturer Rivian, Report Says.
According to Fortune, “As Silicon Valley and Detroit slowly converge onto each other’s traditional turfs,
companies in both industries are finding themselves forging unexpected alliances. The latest in such partnerships may be Amazon and General Motors, who are considering co-investing in Rivian, a maker of electric pickup trucks, according to Reuters.
The joint investment would confer unicorn status on Rivian, valuing it between $1 billion and $2 billion. It would also give both the ecommerce giant and the storied automaker minority stakes in Rivian, a startup based in Plymouth, MI. The investment, still
in negotiation, could be officially announced as early as this month, Reuters said. On its web site, Rivian calls its trucks ‘the world’s first electric adventure vehicles,’ a claim that Tesla, the maker of the Model X SUV, might take issue with. Rivian’s
trucks—which the company says feature a quad-motor systems for off-road driving, a wading depth of 3 feet, and three-second acceleration to a speed of 60 miles per hour—could offer Tesla competition in its high-end model.” [Fortune,
2/12/19 (=)]
Chad Ellwood
Research Associate
202.448.2877 ext. 119