UAW filing string of charges over Tesla’s Fremont plant, Ford faces set of challenges for profit and electrification

Tesla vs. UAW:  Labor relations are getting worse between Tesla Inc. and its factory workers in Fremont, Calif., which the UAW is using to file a string of unfair labor practice charges with the National Labor Relations Board. As was reported last week, conditions have been difficult for management and labor in Fremont as Tesla ramps up the Model 3 production line to try and reach goals that had been set last year. The UAW complaints may present another challenge for Tesla management to overcome to reach these targets and retain a stable workforce. The union conflict had been publicized in February 2017 when Tesla employee Jose Moran posted a blog article detailing harsh working conditions. Moran said that some of these workers had contacted the union because of it. In October, Tesla fired about 700 workers, which CEO Elon Musk said was part of routine performance reviews. Volkswagen has faced similar efforts from the UAW to organize its plant in Chattanooga. The union lost a vote in 2014 to unionize factory employees, but has successfully organized a group within the plant to stay with it. Workers in the greater Bay Area, where Fremont is based, have been known to be more supportive of unions than in other parts of the country; but the UAW and all the other major unions in the U.S. have been losing support and membership for several decades. Convincing a majority of the workforce to bring in the union is very difficult to carry out.

Nordic region strong in EV presence:  A new report from International Energy Agency recognizes the Nordic region (Denmark, Finland, Iceland, Norway, and Sweden) for taking the global lead on electric vehicle adoption. With nearly 250,000 electric cars sold in the region by the end of 2017, the five countries represent about 8% of the total number of these vehicles that have been sold around the world. Norway, Iceland, and Sweden have the highest ratios of EVs per person in the world. Norway leads the way with a 39% market share of electric car sales, the highest globally, and the Nordic region follows behind China and the U.S. as the third largest EV market for sales. Policy support has been behind much of the growth, according the IEA report. Successful programs have included measures reducing the purchase price of EVs, tax cutes, local incentives that exempt on road-use charges and parking fees, and policy support for the the charging infrastructure.

Ford CEO facing performance pressure:  Ford’s announcement last week that it will be taking on Toyota as the U.S. leader in hybrid sales comes at a time when Ford CEO Jim Hackett is being pressured to lead the company through a transition over to more profitable trucks and crossovers, electrification, and smart vehicle technologies. Last week, Ford said it will be replacing more than 75% of its North American lineup and adding four nameplates in the next two years. By 2020, the automaker hopes to see pickups, utilities, and vans making up 86% of its sales, up from about 70% today. The automaker will be selling eight utilities in North America, up from six today.

Ford says it will be offering a hybrid variant — either a traditional hybrid, a plug-in hybrid or both — on every new utility it adds or redesigns going forward. The automaker expects to go from its current spot at No. 2 in hybrid sales to taking away the top spot from Toyota by 2021.

The automaker’s corporate moves have been aimed at refining its financial and market strength in the U.S. market along with its global presence. The global strategy has been heightened by China’s booming auto market and that government’s push for new energy vehicles.

Taking a look at its current sales in the U.S. vehicles shows that the company has a long way to go for hybrids, plug-in hybrids, and all-electric vehicles. As for Toyota’s U.S. electrified vehicles, the company sold 3,889 Prius Liftbacks in February. For the year, it has sold 7,900 in the U.S., slightly edging out the Ford Fusion Hybrid. The Toyota Prius C is at 1,527 and the Prius V is at 1,040 vehicles sold for the year. The Prius Prime plug-in hybrid has so far sold 3,546 units.

Ford is discontinuing the C-Max hatchback after six years on the U.S. market. U.S. production for the C-Max Hybrid will end in mid-2018, according to Automotive News, and production for the C-Max Energi plug-in hybrid model has already ended. The C-Max has been the automaker’s worst-selling mass-market U.S. nameplate.

Analysts and shareholders have kept the pressure on Ford to improve financial and stock performance. The company has been accused of being too reliant on low-margin car models and outdated SUVs.

Fiat Chrysler Automobiles CEO Sergio Marchionne is thought to have tipped the auto industry more toward trucks with praise he’s received for killing the Dodge Dart and Chrysler 200 and emphasizing the Jeep SUV and Ram pickup. That’s helped FCA see its profits rise, which has grabbed attention with groups of shareholders.

The Ford Fusion and Chevrolet Impala may be pulled off assembly lines as the truck switchover continues. That would be ironic on the electrified vehicle side. Ford’s Fusion Hybrid and Fusion Energi plug-in hybrid have been fairly strong in U.S. sales.

Tesla seeing problems at Fremont plant, Ford wants to be greener than Toyota in hybrid sales

Chaotic conditions at Fremont plant:  Tesla appears to be experiencing what CEO Elon Musk last year called “manufacturing hell” at its Fremont, Calif., assembly plant as pressure mounts to increase Model 3 production. CNBC reported Wednesday that a current Tesla engineer estimated that 40% of parts made or received at the Fremont factory require rework. Sometimes, the parts need to be shipped back out of the plant for rework, and in other cases, vehicles seem to be pulled off the assembly line for repairs before being shipped out. Questions are being raised out how effective Musk has been managing the company through a difficult conversion to a mass market manufacturer. The electric automaker has been seeing other problems come up, including three of its top financial executives leaving recently. News came out earlier this week that the company stopped production in Fremont to adjust equipment that can increase the production rate. Production was reportedly suspended from February 20 to February 24 to make these changes. Some of the problems have also been traced back the Gigafactory battery plant near Reno, Nev. But most of the problems seem to be coming from the Fremont plant.

Maven bringing out shared GM vehicles:  General Motors will be launching a pilot project this summer that will enable GM vehicle owners to rent out their vehicles when they aren’t using them. Testing will start this summer through the automaker’s Maven car-sharing unit, said people familiar with the matter. They’ll be able to have their vehicles available on Maven’s platform. Other drivers can rent out the car and will share their revenue with GM. It could be ideal for Uber and Lyft drivers who need a car to carry passengers and generate income. Maven customers could use the borrowed cars for typical car-sharing purposes, such as driving to work or going out to buy groceries or pick up their kids at school. It’s one of several moves GM is taking to become a major mobility service company.

Tesla opening burger joint in Santa Monica:  Tesla will be opening up a what CEO Musk had tweeted about – “an old school drive-in, roller skates & rock restaurant” in the Los Angeles area where customers could grab a meal while their electric cars are being charged. The electric carmaker has applied for permits to build the restaurant and to place chargers outside the building in Santa Monica. If granted approval, Tesla will open up the burger joint at 1401 Santa Monica Blvd., which is currently being operated as a used-car lot. Tesla had already tried something similar last year by adding a “lounge” with a coffee shop at its Supercharger station in Kettleman City, near Bakersfield, Calif. The company is working at winning back disappointed customers who had complained they had nothing to do while their Tesla Model S, X, or 3, was being charged.

Ford wants to be hybrid vehicle leader:  Ford Motor Co. wants to become known as an even greener carmaker than Toyota in the next few years. Ford wants to beat Toyota as the top seller of hybrid vehicles in the U.S. in three years. Other plans include bringing in two off-road SUVs and creating hybrid or electric version of its other utility vehicles. It will eventually make up seven out of eight Ford vehicles sold each year starting in 2020, the company said.

“We’re moving past hybrids as a science project,” Jim Farley, Ford’s president of global markets, told reporters. ”They’re an accepted, reliable technology, and we want to make them as emotional and valuable as the desirable EcoBoost.”

Light-duty trucks – pickups, utility vehicles, and vans – will make up 86% of its sales by 2020, up from about 70% today, the company said. The company will be offering a hybrid variant – traditional hybrid, a plug-in hybrid, or both – with every new utility it adds or refreshes from now on.

EPA chief Pruitt wants to keep California in check, Daimler Trucks exec sees diesel winning for now

Trump administration vs. California:  U.S. Environmental Protection Agency Administrator Scott Pruitt gave a strong indication the federal government is going to soften up on fuel economy and emissions standards, and may be in conflict with what the state of California is planning to do. During an interview with Bloomberg News on Tuesday, Pruitt said that California won’t be able to “dictate to the rest of the country what these levels are going to be.” The EPA is facing an April 1 deadline to decide on whether the Obama administration’s late ruling on 2022 to 2025 fuel economy and greenhouse gas emissions will be kept in place. Pruitt also dismissed an offer by California to consider easing its current standards in exchange for extending them beyond 2025. The state is working on its own standards through 2030. “Being predictive about what’s going to be taking place out in 2030 is really hard,” Pruitt said. “I think it creates problems when you do that too aggressively. That’s not something we’re terribly focused on right now.”

Tesla still in talks with Shanghai:  China’s Shanghai province is having talks with Tesla Inc. over building a Tesla manufacturing plant locally. While Tesla CEO Elon Musk last week called that future relationship into question, the Shanghai government said in a press statement that communication between the two sides has always been positive with the shared goal of growing China’s new energy vehicle market. Musk’s tweets last week had been directed at President Donald Trump to help get a “fair outcome” in trade agreements with China. He’s like to see China open up its market and not demand the usual 50-50 joint venture companies with Chinese automakers. Tesla may be allowed to own its factory under a separate rule allowing provinces to establish “free trade zones.” The pressure is on Tesla to increase its presence in China and other markets to sell the Model 3 as the production rate speeds up. News came out this week that the company stopped production in Fremont, Calif., to adjust equipment that can increase the production rate. Production was reportedly suspended from February 20 to February 24 to make these changes.

Diesel winning over clean fuels in trucking:  Kary Schaefer, general manager of marketing and strategy for Daimler Trucks North America, during a keynote speech last week at the Work Truck Show’s Green Truck Summit in Indianapolis, said that diesel is winning for now over alternative fuels. Daimler Trucks is taking natural gas and electricity seriously as alternative fuels, but neither will be taking the lead away from diesel anytime soon. Daimler’s Freightliner Trucks subsidiary showed off several natural gas-powered trucks in the exhibit hall. The truck maker’s Fuso division is rolling out the eCanter electric medium-duty truck and the E-Fuso Class 8 electric truck. But for now, diesel is still the most efficient and cost-effective fuel, the Daimler executive said. While natural gas and battery-powered have become the most talked-about alternatives to diesel, their limitations are causing fleets to look more carefully at their options, she said. Charging and alternative fueling stations are very limited in comparison to ample diesel stations across the country. There’s also the question of realistic range for the vehicle. Electric trucks are particularly vulnerable to temperature, cargo loads, and speed traveled on highways in having enough range to carry out the freight hauling goals of fleet operators. Schaefer does see gains being made in new connected vehicle technologies, including active safety systems. She also supports the idea that green goes beyond tailpipe emissions; managers are encouraged to bring sustainability practices into their strategic planning while reducing cost and waste. Other highlights at the Green Truck Summit included XL Hybrids introducing the Ford F-150 XLP plug-in hybrid pickup, which can improve fuel economy by up to 50%. Lightning Systems showed off an electric Fort Transit cargo van that’s adding a hydrogen fuel cell vehicle that can extend range by 200 miles.

More Chevrolet Bolts will be made this year to meet global market demand, Geneva Motor Show showcasing European makers becoming more Tesla-competitive

More Chevy Bolts coming off assembly line:  General Motors will be building more Chevrolet Bolts later this year to meet rising global demand, said CEO Mary Barra on Wednesday during a CERAWeek energy conference speech in Houston. The company declined to clarify specific numbers. Last year, GM reported selling 23,297 Bolts in the U.S. Barra said that the Lake Orion, Mich., assembly plant can be easily adjusted to build more Bolts. Barra also called for expansion of the $7,500 federal tax credit for electric vehicle purchases. GM vehicles will be seeing that incentive phase out later this year unless the cap is lifted. The automaker’s commitment to zero-emission vehicles – battery electric and hydrogen fuel cell vehicles – will stay in place regardless of changes to federal fuel economy standards, Barra said.

Shareholders backing generous pay package for Musk:  Two of Tesla’s largest shareholders are supporting a move to reward CEO Elon Musk with a compensation package valued at $2.6 billion, to keep him around for several more years. Baillie Gifford & Co. and T. Rowe Price Group Inc., which combined own about 14% of Tesla stock, appear likely to go that way during a March 21 special meeting of the board. It comes from a compensation plan proposed in late January offering Musk 20.3 million stock options that will be carried out in 12 increments if market-value measures and other financial goals are met. The company would have to reach about $650 billion in market value for the full award to come through, which equates to about a 12-fold increase in current market valuation. It’s a much larger version of compensation Musk received in 2012 for hitting company targets. Musk currently owns about 20% of Tesla. He and his brother Kimbal Musk, a company director, won’t be voting on the plan during the March 21 meeting.

European makers compete with Tesla at Geneva auto show:  The Geneva International Motor Show, which started this week and runs through March 18, has become a showcase for automakers to take on Tesla for electric vehicle sales. It follows close behind the Tesla Model S beating the Mercedes-Benz S class and BMW 7 series in European sales for the first time. This year will see even more pressure as the Tesla Model 3 in higher production numbers than the Model S and Model X.

Volkswagen unveiled the I.D. Vizzion concept car, an all-electric midsize sedan scheduled to launch in 2022 and will be sold as the flagship model for the I.D. electric subbrand. Its Audi division is showing off its E-tron Sportback, and its Porsche brand revealed the Mission E Cross Turismo, a new concept version of its upcoming Mission E all-electric car. The Cross Turismo will be a crossover with all-wheel drive and plenty of cargo capacity.

Jaguar’s I-Pace all-electric crossover will be launched this year. At $70,495, including delivery charges, it will be directly competing with the Tesla Model X, which starts at $79,500, excluding shipping. Deliveries to the U.S. will begin during the second half of 2018, Jaguar said.

Mercedes-Benz is displaying the EQC electric SUV, which will be the automaker’s first production battery-electric vehicle. It will also be the fist of its models under the new all-electric EQ subbrand.

British luxury carmaker Bentley unveiled its first plug-in vehicle, the Bentayga Hybrid, during the show this week. The company hailed it as the world’s first luxury plug-in hybrid model. It’s powered by an advanced electric motor with a new-generation V6 gasoline engine.

Changes to be made to MPGe window stickers, Auto suppliers want to see fuel economy rule adopted

More realistic than MPGe window stickers:  Discussions are going on at a few automakers on changing the window stickers on vehicles powered by alternative energy sources, according to a published report. While the miles per gallon equivalent (MPGe) system used on plug-in vehicles made some sense when adopted a few years ago, it may not be that effective in answering questions for car shoppers. The U.S. Environmental Protection Agency doesn’t have plans to make changes to the Motor Vehicle Fuel Economy Label, and no interviewed for the article had a clear vision implementing an improved comparison system for consumers looking at all-electric and plug-in hybrid vehicles.

“While in principle MPGe is a good way of conveying relative efficiency, I’m not sure that it’s actually meaningful to consumers, nor is energy efficiency in general for plug-in vehicles,” said Sam Abuelsamid, senior analyst at Navigant Research. “Much as most consumers focus on what their monthly payment is going to be, for EVs, I think they are mostly just interested in the electric range and, in the case of PHEVs, the gas/diesel efficiency.”

CNG/electric hybrid:  Skoda Auto is presenting the first-ever vehicle that can run on natural gas, gasoline, and an electric drive during the Geneva Motor Show March 6-18. The Skoda Vision X sport utility vehicle features a newly configured hybrid system that can go into front, rear, or four-wheel drive as needed. The CNG/electric engine combination can offer low CO2 emissions of only 89 g/km. That comes from a combination of a natural gas and gasoline-powered drivetrain and two electric motors.

Industry group supports strong federal emissions rules:  Automotive suppliers are concerned that if the federal government softens its fuel economy and emissions rules, the economic impact could be damaging to the industry. A new advocacy consortium has been started up, the Automotive Technology Leadership Group, which supports seeing continued progress on reducing emissions and oil consumption. Made up of Advanced Engine Systems Institute, the Aluminum Association, the Emission Control Technology Association, Manufacturers of Emission Controls Association, and Motor & Equipment Manufacturers Association, member companies want to have their voices heard as federal agencies prepare to finalize standards for phase two of the fuel economy rules. They’ve been making large investments to bring emissions-reducing technologies to the market and to meet domestic goals, and to make U.S.-built vehicles very competitive on the global stage. By the end of March, the U.S. Environmental Protection Agency is scheduled to announce whether it will keep the fuel economy and emissions standards in place, or begin work to modify them. The Automotive Technology Leadership Group would like to make sure that the National Highway Traffic Safety Administration, the state of California, and other states that follow California’s emissions standards, will have their concerns heard and coordinated within the EPA’s ruling.