The Swedish Volvo Cars and its Chinese owner, Geely have announced a plan to combine their electric cars R&D and engine operations. The aim is also that the new unit will offer the services to other customers in the future. The change is part of the Volvo Car´s focus in electrification of its whole production.
This means that the companies intend to merge their existing combustion engine operations into a stand-alone business that will seek to develop next generation combustion engines and hybrid powertrains.
– The proposed new business would clear the way for Volvo Cars to focus on the development of its all-electric range of premium cars. Volvo Cars is building an entirely electrified product range, as part of the company’s ambition to put sustainability at the core of its operations. By the middle of the next decade it expects half its global sales to be fully electric and the other half hybrid, supplied by the new unit, Volvo said in its press release.
– For Geely, the planned new entity means technologically-advanced and efficient combustion engines and hybrid powertrains would be available to Geely Auto, Proton, Lotus, LEVC and LYNK & CO. The planned new stand-alone business can also supply third party manufacturers, providing possible growth opportunities, companies say.
The new entity will have 3000 employees from Volvo Cars and around 5000 employees from Geely´s combustion engine operations.
Volvo Cars believes the electrification of the automotive industry will be a gradual process, meaning there will be significant ongoing demand for efficient hybrid powertrains alongside fully-electric offerings.
-Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost efficiently, said Håkan Samuelsson, Volvo Cars’ president and chief executive.
The detailed plans of the new business are under development and subject to union negotiations as well as board and relevant authority approvals, companies say.
Volvo Cars is about to launch its first fully electric XC40 in October 16th. Later in October Volvo will also publish its Q3 report.
Picture: The new Volvo XC60 T8 R-Design in Crystal White
The Tesla (TSLA) CEO Elon Musk said in the company conference call yesterday that Tesla´s service development is going mobile, more and more in the future.
-Our mobile service is part of the growing service development, while this is the best way to reach our customers, Musk said.
The company also said it has opened 25 new service locations globally and that they measure the new locations by traffic and driving time. The need for service development is essential while the Tesla fleet have doubled in a year and the growth expectations are also showing the same trend. Also service needs to be scaled.
According to Musk, the car service operations is one of the main drivers for the new car sales. For example during the Q2 period this year, the company generated orders at a high pace.
Tesla is also developing its automation within the cars and for example the automatic stopping at the stop signs and traffic lights is going to part of the new safety automations. The Model 3 has reached the highest ever safety standards in the US Safety Assist Category, the company said.
The US electric car manufacturer Tesla (TSLA) announced its second quarter results, which show that the company in on track with the Shanghai Gigafactory plant and with the new model, Model Y. It means the new factory would be ready by the end of this year and the new model by the fall 2020.
The company said its Q2 deliveries were 95 356 vehicles and they reach a record production of 87 048 vehicles. During the period Model 3 deliveries were 77 634 vehicles and the average selling price (ASP) was around 50.000 dollars. Tesla also said it expects its weekly production reach 10.000 by the end of the year. The total annual production expectation remained at 360.000- 400.000 vehicles.
The free cash flow was 614 million dollars. The car revenue was 5,3 billion dollars compared to 3,7 billion dollars in the previous quarter. The loss of car operations was 167 million dollars compared to 521 million dollars in the previous quarter and 621 million dollars a year earlier. The CEO Elon Musk said in the conference call that he expects the company to turn profitable during the rest of the year.
The auto stocks gained on Monday trading in Europe after the confirmation of the Italian-French car manufacturing merger proposal. Fiat Chrysler (FCA) and Renault (RNO) said that they are planning a 35 billion euros merger, which would make the new company the world’s third largest auto manufacturer. The planning of the merger was published on Saturday evening.
Fiat´s stock price jumped by 7,98 % to 12,37 euros and Renault´s 12,09 % to 56,03 euros. The Stoxx Europe 600 Automobiles & Parts index ended up 1,43 % to 473 points.
The idea of the auto merger is to get synergies, estimated of 5 billion euros, in the R&D related to electric cars and lower emissions, and in the purhasing power. The new company, owned by 50-50 % by a Dutch holding company, would have production of 8,7 million cars annually. Brands like Jeep, Maserati and Alfa Romeo would be part of the merger.
The Japan alliance partner Nissan Motor & Mitsubishi might join the new group later on. In order to proceed the Italian and French Governments will comment the merger in details during the next week.
Otherwise the German DAX-index gained 0,5 % to 12071 points and the French CAC 40 0,37 % to 5336 points. The shares of Volkswagen, the world´s largest car manufacturer, (VOW) ended up 0,55 % to 145,25 euros in Frankfurt.
In London the trading was closed due to the Spring Bank Holiday.
In the US, the stocks markets were closed while having Memorial Day holiday.
The UK is targeting to set a new goal for carbon emissions. According to the report from Committee on Climate Change, UK should be net zero emissions country by 2050. This would equate to 1-2 % of the 2050 GDP, says Financial Times.
FT says that the report, which will be published on Thursday, will guide Scotland to be net zero already in 2045 and Wales 95 %zero in 2050 due to its sheep-farming industry.
The UK Parliament is expected to discuss about the Climate Change updates on Wednesday,when the House of Commons will have this topic on its agenda.The target would be reached by using more renewable energy sources, increasing the electric vehicles in transportation and for example capturing carbon from the air.
In 2018 the UK carbon emissions fell by 2,5 % sixth straight years in row.About 80 % of the UK homes are warmed by using natural gas.
If this new target would pass the Parliament,it would mean that the UK would be among the leading G7 countries to set this kind of target. It is good to remember that the UK will leave also the EU Emissions Trading System as part of the Brexit deal.
In London there have been several climate activists protests during the last two weeks in order to speed the decision making on Climate Change.
The SUV cars manufacturer Tesla (TSLA) published its Q1 figures and according to the release, the Q1 revenue was 4,5 billion dollars during the period. The Refinitiv estimate was 5,2 billion dollars. The interim report was published after the trading closing in Wall Street on Wednesday evening.
– We expect Tesla to return to profitability in Q3 and significantly reduce our loss in Q2, said the CEO Elon Musk in the release.
The company operating loss was 522 million dollars during the quarter and net loss 702 million dollars, which include 188 million dollars of non/recurring charges. The loss per share was 4,10 dollars compared a profit of 0,81 dollars at the year end and loss of 4,19 dollars a year ago.
The company ended the quarter wiht 2,2 billion of cash, which shows a 1,5 billion dollars reduction the the year end situation. The reason behind was the 920 million convertible bond repayment and the increase of number of vehicles in transit to customers.
The company has announced earlier that the Q1 deliveries were 63.000 vehicles, when the market estimates were 76.000 vehicles. These challenges have caused vehicle deliveries to shift into Q2.
Tesla started production and delievires of Model 3 vehicles for overseas markets during the first quarter. And this was also one of the reasons for delays in deliveries and shifts to the Q2. Tesla said it will focus further to improve operations, cost efficiency and customer experience globally.
– If our Gigafactory Shanghai is able to reach volume production early in Q4 this year, we may be able to produce as many as 500 000 vehicles globally in 2019. This is an aggressive schedule, but it is what we are targeting. However, based on what we know today, being able to produce over 500 000 vehicles globally in the 12/month period ending June 30, 2020 does not appear very likely, he said in the release.
According to Musk, the company operating cash flow less capex should be positive in every quarter, including the Q2. And due to the cost reduction and higher deliveries, the company should return to profitability in Q3.
Tesla shares closed down nearly 2 percent today in Wall Street. The stock closed -1,99 % to 257,85 dollars.