This Week’s Top 10: VW recall list expands, Fiat Chrysler entering hybrid market

by Jon LeSage, editor and publisher, Green Auto Market

Here’s my take on the 10 most significant and interesting occurrences during the past week…….

  1. Volkswagen diesel recallVW recall list expands: The U.S. Environmental Protection Agency has expanded the list of 3.0-liter TDI diesel engines that have illegal emissions software – this time adding several Audi models, one Porsche diesel model, and another VW. VW’s corporate headquarters has been fighting the new EPA decision, but has issued a stop-sale order to its dealers on the newly named models. The latest list includes: Audi A6 TDI: 2014-2016; Audi A7 TDI: 2014-2016; Audi A8 TDI: 2014-2016; Audi Q5 TDI: 2014-2016; Audi Q7 TDI: 2013-2016; Porsche Cayenne Diesel: 2014-2016; and Volkswagen Touareg TDI: 2013-2016. These include both new and certified pre-owned versions of these cars. In other news, several Volkswagen engineers have admitted manipulating carbon dioxide emissions data because goals set by former CEO Martin Winterkorn were difficult to achieve, a German media outlet reported. And to appease VW owners, Volkswagen of America will offer $500 to owners of 2.0-liter diesel vehicles with illegal emissions test-rigging software.
  2. First Chrysler hybrid: A hybrid version of the redesigned Chrysler Town & Country will be part of the minivan’s launch at the Detroit Auto Show. It will be the first step in converting “most of the fleet,” adding a hybrid version throughout the Fiat Chrysler Automobiles vehicle lineup in the 2020-to-2025 time frame, FCA CEO Sergio Marchionne said during a conference call. It will be motivated by meeting federal Corporate Average Fuel Economy (CAFE) standards of reaching a fleet average of 54.5 mpg (equivalent to about 42 mpg on the window sticker) by 2025. It may also have something to do with FCA backing off adding new diesel models to its lineup in the wake of the VW emissions scandal. For several years, Chrysler had been experimenting with plug-in hybrid test models; it wouldn’t be surprising to learn that some of the news hybrid models will also have plug-in versions.
  3. Tesla 3Q report: Tesla Motors reported total revenue of $937 million – above Wall Street expectations, but a drop from second-quarter revenue of $955 million and a rise from third-quarter revenue of $852 million during 2014. The company reported a loss of $230 million, or $1.78 per share. Stock closed at $208.35 but surged to as high as $231 per share in after-market action. Tesla had $392 million in capital outlay, largely the result of factory expansion to accommodate the new Model X production line in Fremont, Calif., and investment in its Gigafactory battery factory near Sparks, Nev. The company also reported $39 million in sales of government-awarded zero-emissions vehicle credits, and $33 million in sales of pre-owned cars. The company expects to manufacture “several hundred” of its Model X SUVs by the end of the year.
  4. Faraday sets up shop: A luxury electric carmaker has come to California, setting up a corporate office with 400 employees. Housed in Nissan’s former U.S. sales office in Gardena, Calif., Faraday is planning on launching its first electric vehicle in 2017 and is looking for factory locations in California, Georgia, Louisiana, and Nevada. Incorporation papers filed with the California secretary of state’s office links Faraday to a Chinese media company operated by Jia Yueting, an entrepreneur who founded Leshi Internet Information & Technology. Jia may have net worth of $7 billion; he recently launched a line of smartphones and took a 70% investment stake in Yidao Yongche, an Uber-like car service in China. Jia has made comments that he plans on developing a car that could compete with Tesla Motors. Faraday may be investing $1 billion in its manufacturing facility. Chaoying Deng, a woman who runs a Leshi affiliate in the U.S., is listed in the filing as Faraday’s chief executive. Nick Sampson, who headed vehicle and chassis engineering for the Tesla Model S sport sedan, is now serving as senior vice president at Faraday. Richard Kim is head of design, and had provided those services to BMW, Porsche, and Audi.
  5. Toyota’s artificial intelligence arm: Toyota Motor Corp. will be investing about $1 billion in a U.S.-based r&d company, Toyota Research Institute Inc., to develop artificial intelligence technologies for future vehicles. Gill Pratt, Toyota’s technical adviser and a former Pentagon robotics expert, will be the CEO of the new enterprise. TRI will be based in Silicon Valley near Stanford University, and the office will open in January. Another office will be set up near the Massachusetts Institute of Technology in Cambridge. Projects will include systems that prevent traffic accidents and makes driving accessible to more people; including cars that can help handicapped people or the elderly stay behind the wheel; and another objective will be at-home technologies such as helper robots.
  6. Bob Lutz predicts doom for Tesla: Ex-GM vice chairman and Via Motors chairman of the board Bob Lutz doesn’t think Tesla Motors will make it. “Tesla’s showing all the signs of a company in trouble: bleeding cash, securitized assets, and mounting inventory. It’s the trifecta of doom for any automaker, and anyone paying attention probably saw this coming a mile away,” he wrote in a Road and Track guest commentary. One big problem is the real cost of a retail store with its service bays, chargers, and well-trained staff. A dealership location takes a lot of cash flow, he says.
  7. Installing hydrogen stations: For anyone building hydrogen fueling stations in California or other states, check out the GO-Biz Hydrogen Permitting Station Guidebook. Aimed at station developers, permitting officials and Authorities Having Jurisdiction (AHJs), the guidebook provides insights and lessons captured from the past two years of hydrogen station development in California. The Guidebook provides a detailed discussion of the permitting process and suggested best practices for local and regional governments and station developers seeking to open (or in the process of opening) a hydrogen fueling station.
  8. Autonomous vehicles on roads: Tesla CEO Elon Musk seems to agree with a study last year by Institute of Electrical and Electronics Engineers (IEEE) predicting that fully autonomous vehicles will be on U.S. roads between 2030 and 2035. During a conference call, Musk said that vehicles that can’t switch into autonomous mode will be seen as having “negative value.” He predicts that within 15 to 20 years, it will be “quite unusual to see cars that don’t have full autonomy.” Nissan CEO Carlos Ghosn seems to understand why Tesla is investing in Autopilot so early in the game. Last week at the Tokyo Motor Show, Ghosn introduced Nissan’s IDS (Intelligent Drive System) concept car with its autonomous vehicle mode and long-range battery drive system.
  9. Steve Jobs and an Apple car: Back in 2008, Apple co-founder Steve Jobs had conversations with Apple senior VP Tony Fadell about launching an iCar. In the time frame soon after the iPhone launch, Jobs was interested in talking about why type of car they would build, what would be placed on the dashboard, and how it would be fueled or powered. In an interview with Bloomberg, Fadell talked about how the two collaborators on the iPod and iPhone swapped ideas about car designs – long before Apple began investing in the potential of designing autonomous electric vehicles. The crash of the auto industry the next year got their attention on other priorities.
  10. Keystone pipeline: As expected, President Obama has rejected the request from Canadian company TransCanada to build the Keystone XL oil pipeline. “America is now a global leader when it comes to taking serious action to fight climate change,” Obama said at the White House. “And, frankly, approving this project would have undercut that global leadership.” This decision ends a seven-year review that had become a battleground in Washington.

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