AD #2756 – Cruise Reveals Autonomous Pod; Tesla Can Sell in Michigan; Mitsubishi Accused Of Diesel Cheating

This is Autoline Daily with the latest news in the global automotive industry.

TESLA REACHES DEAL TO SELL VEHICLES IN MICHIGAN
Good news for Tesla today. It looks like the EV maker has come to a settlement with the State of Michigan that will allow it to sell and service its vehicles in the state. In 2016, Tesla sued then governor Rick Snyder and other officials, over a law that says automakers can only sell vehicles in the state through franchised dealers. Sources say that will no longer be the case. A Tesla subsidiary will handle the sales and service and it will also be able to deliver its vehicles to customers in Michigan. It seems like the trickiest part will be getting a title for a vehicle, which will have to be done in another state then transferred to Michigan. But if Michigan is willing to budge on its stance of selling Tesla’s to consumers, maybe the other states that ban Tesla sales will follow suit.

STUDY SHOWS EV OWNERSHIP EASES CONCERNS OVER ISSUES
And according to a new study from AAA, owning an electric vehicle helps ease a lot of consumer concerns over their perceived issues. Prior to owning an EV, 91% of those surveyed said they had at least one concern, including range, long-distance travel and finding a place to charge. Post purchase, many of those fears went away. More than three-quarters of drivers who were worried about range, were less or no longer concerned after buying an EV. And of the owners surveyed who had never owned an EV, 96% said they would buy or lease an EV for their next purchase. The study also found that the cost of owning an EV is about the same as a gasoline powered car. Based on five years and 75,000 miles of driving, an EV only costs about $600 more annually. 

CARLOS GHOSN DOCUMENTARY TO AIR ON CNBC
For any of you who are as intrigued as we are about Carlos Ghosn’s escape from Japan, there’s a one-hour documentary about the ordeal, that will air on CNBC Monday the 27th at 10PM eastern time. The documentary will retrace his escape, as well as “his unusual and high-flying trajectory as an auto industry executive.” Sounds like it should be a good show and we can’t wait to learn more about how he was able to pull it off.

TOP HYUNDAI EXECUTIVE LAYS OUT KEYS FOR HYDROGEN ADOPTION
Hyundai is one of a handful of major automakers developing hydrogen powered fuel cell vehicles. While it’s bullish on the technology, there’s still a number of things that need to happen before fuel cells become mainstream. At the Hydrogen Council meeting in France, Hyundai’s Executive Vice Chairman Euisun Chung, laid out three key steps to making fuel cells a reality. The first is achieving cost reductions through technological innovations in the hydrogen industry, including production, storage and distribution. The next is to create a safety management system in order to convince the public that hydrogen is reliable in terms of safety. And finally, he said that governments need to do more to promote the benefits of hydrogen.

GM’S CRUISE REVEALS AUTONOMOUS POD
GM’s self-driving unit Cruise has been testing and gathering data with modified versions of Chevy Bolt EVs for years, but yesterday it unveiled its first production vehicle, the Origin. It has no driver controls because it’s fully autonomous, which clears up a ton of space for passengers. Cruise says the Origin is no bigger than most vehicles, just that it’s packaged more efficiently. It’s also all-electric and will be used for shared ride-hailing services. The Origin has a suite of sensors, highlighted by 2 new sensors that are mounted on the front of the vehicle. Cruise claims it will operate beyond human capabilities and will have the life span of a million miles. Unfortunately, no word yet on when consumers will be able to experience the Origin. 

JEEP SALES SLUMP FEEDBACK
If Jeep is worried about its sales in the U.S., which were down 5% last year, it might want to take a look at our comments section from yesterday. I didn’t see a single person say it had anything to do with Mike Manley leaving to take over the CEO position at FCA like we speculated. Rather most people focused on price. But here are a few other theories, Cal Ryan says “Jeep sales down? How about the concept of “market saturation?” Brett Cammack agrees “Now that CUV/SUV models are pervasive across the marketplace, they’re being out-competed for value.” And Kit Gerhart adds “Compass, Renegade, and Cherokee are among the worst vehicles in their class.” Jonathan also has a good point, he says “Jeep simply cut back some of the lease incentives on various Jeeps such as the Compass, Cherokee etc…by about 8 percent… So a five or six percent drop is not surprising.” Jeep are you listening? I’d say all these reasons combined tell the story of why Jeep sales are down. 

COMMENTS ON ROXOR UPDATE
You all also had a fair number of comments about the Roxor refresh. A number of you pointed out that the grille now looks like a Toyota Land Cruiser from the 1970’s. I don’t want to laugh, but it would almost be funny if Mahindra went from being sued by FCA to getting in trouble with Toyota, all because it was trying to make the Roxor look less like a Jeep. And lastly, some wondered why FCA would go after Mahindra since the Roxor is not really a direct competitor with Jeep, seeing that it’s an off-road only vehicle. It may be a bit of a stretch, but I think there is one area where the Roxor competes with Jeep. And that’s for businesses that use vehicles that don’t go on the road, like amusement parks or zoos. I was told by someone at Mahindra that was one area where sales were stronger than it ever expected. The businesses liked that they could get the Jeep look without having to spend the money for a real Jeep. Would that be enough volume to hurt Jeep? Maybe not. 

GERMANY ACCUSES MITSUBISHI OF DIESEL EMISSION CHEATING
Another day and another automaker is being accused of cheating on diesel emissions. Bloomberg reports that prosecutors in Germany allege Mitsubishi equipped defeat devices in two of its diesel engines in order to cheat on emission tests. Police and prosecutors are investigating 10 sites in Germany, three of which belong to supplier Continental, which is a witness in the case and is cooperating with authorities. Mitsubishi said it is gathering more information and also cooperating with authorities. A Bloomberg analyst said a possible recall could involve as many as 400,000 vehicles and cost the company up to $360 million. Mitsubishi is small in Europe, it only sold 138,000 vehicles last year in the region, so a significant recall could be serious for the company.

DAIMLER’S 2019 PROFIT CUT IN HALF
Daimler is once again issuing a warning about its profits, the third time it’s done so since last May and the fifth time in the last year and a half. The automaker revealed that its 2019 earnings before interest and taxes are expected to be about 5.6 billion euros, which is down nearly half from the 11.1 billion the company posted in 2018. And that figure does not include 1.5 billion euros in costs related to its diesel emission scandal. In addition to those costs, Daimler is spending heavily to develop electric and autonomous vehicles. But we’ll get a clearer picture of its finances when it releases its full 2019 results in February.

JLR LAYS OFF WORKERS IN ENGLAND
And Daimler isn’t the only automaker feeling the effects of the global industry slowdown. Jaguar Land Rover announced its cutting 10% of its workforce, or about 500 jobs, at its Halewood plant in England. The factory builds the Range Rover Evoque and Land Rover Discovery Sport. The company’s sales declined 6% last year, due to slumping sales in China and reduced demand for diesel vehicles in Europe.

And don’t forget to join us for Autoline After Hours this Thursday. Tune in to get John and Gary’s insight on the latest news in the global automotive industry. That’s tomorrow afternoon at 3PM eastern time on our website, Autoline.tv. 

But that’s it for today, thanks for watching and we’ll see you back here again tomorrow.