AD #3220 – How Polestar Generates Cash w/o Selling a Car; Diess Gets to Keep His Job; Mercedes Gets L3 Approval in Germany

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

HERBERT DIESS GETS TO KEEP HIS JOB
Herbert Diess gets to keep his CEO job at Volkswagen. That came out of a press conference today with Hans Dieter Potsch, the chairman of the supervisory board, Daniela Cavallo, the top labor representative of the board, and Mr. Diess himself. While they all put on a brave face, it’s clear that there are still tensions between management and labor. Interestingly, Daniela Cavallo admitted some jobs will no longer be needed as the company transitions to electric cars. She said the company will provide good early retirement packages for them. And she said labor will cooperate with VW to achieve its productivity targets. Herbert Diess wants to slash assembly time by one-third to match Tesla’s productivity. He also said he was worried that Volkswagen wasn’t going to be moving fast enough, but is now satisfied that’s been resolved. So our early take is it looks like Herbert Diess won a major victory.

GM PLANS TO BUILD BATTERY PACKS AT ORION PLANT
GM is rolling out more details on its EV onslaught. It’s investing $160 million at its Orion assembly plant in Michigan to build battery packs, no doubt using GM’s Ultium batteries. The Detroit News reports construction starts next summer and will be completed in 2025. That plant currently makes the Bolt EV and EUV. Here’s our Autoline Insight. GM says it’s going to have an assembly plant dedicated to making electric trucks. Well, GM’s Flint assembly plant that makes trucks is not far from the Orion battery pack line. So it would be a short haul to ship battery packs from Orion to Flint. 

BIDEN SIGNS ORDER TO END GOVERNMENT ICE VEHICLE PURCHASES
Earlier this year, the Biden Administration announced plans to replace the federal government’s fleet of vehicles with electric models. And now the President is putting that proposal into effect. Yesterday, Biden signed an executive order to end the purchase of ICE vehicles by 2035. Light-duty vehicles the government purchases will be zero-emission by 2027. There are 650,000 vehicles in the government’s fleet and it buys about 50,000 annually.

MERCEDES GETS L3 APPROVAL IN GERMANY
Mercedes is the first automaker to get approval for a Level 3 autonomous system in Germany. It’s launching under the name DRIVE PILOT as an option for the new S-Class in the first half of next year. The system consists of surround sensors, Lidar, a camera, microphones for detecting emergency vehicles and an HD map, which is updated via a backend connection and compared to navigation and what the car’s sensors are seeing. Then on top of that, it also has redundant systems for the steering and braking as well as the electrical system. Mercedes doesn’t say what it will cost, but it sure doesn’t sound like a cheap system to us. Right now, there’s only about 13,200 kilometers or roughly 8,200 miles where DRIVE PILOT will operate and it won’t go above speeds of 60 km/h or about 37 MPH. While that may not seem very fast, we still think the hand-off between human and car will be clumsy and complicated. Mercedes says the driver must be ready to take over control at all times, but it will also allow the driver to shop online or respond to emails from the center display screen. 

NHTSA INVESTIGATES TESLA OVER IN-VEHICLE VIDEO GAMES
And other major markets, like the U.S. and China, where Mercedes is also testing DRIVE PILOT, are going to keep a close eye on how well that hand-off goes. And it could be a while before agencies trust humans to do the right thing. In the U.S. right now NHTSA is discussing with Tesla about a feature released this summer that allows passengers to play video games on the front screen while the vehicle is in motion. The system asks the user to confirm that they are a passenger, but anyone can press it and the worry is a driver could easily get distracted. 

SCHAEFFLER PARTNERS TO MAKE EV MOTORS MORE EFFICIENTLY
The key to chopping down the cost of electric cars is to get massive manufacturing scale. So the giant supplier Schaeffler is spearheading a 3-year program with 17 different companies to manufacture electric motors more efficiently. The project is called AgiloDrive2 and is funded by the German government with nearly €34 million. The idea is to move away from rigid production lines and replace that with highly flexible, digitalized, modules, which are easily scalable, and can be defined by software. 

BENTLEY APPROVED TO INDEPENDENTLY CERTIFY VEHICLES
Bentley now has the ability to independently certify its vehicles for emissions, fuel economy and electric range. It was given the power by Britain’s Vehicle Certification Agency and will carry out the testing at a brand-new Engineering Test Centre at its headquarters in England. Obviously having to stick to strict standards, the facility features an advanced rolling road used to simulate different gradients, measure exhaust emissions from combustion engine cars or electrical energy consumption from hybrid and electric vehicles and across a wide temperature range. Bentley is going to be able to carry out these tests a whole lot faster and we expect more automakers to follow. 

HOW POLESTAR GENERATES CASH W/O SELLING A CAR
When an automaker, like Stellantis, says it’s going to generate 4 billion euros in revenue from connected vehicle services and data monetization in just a few years you never really get a sense of what those features will cost at an individual level. But now we have an idea. Polestar is offering a performance upgrade that’s available in a number of major European countries via an over-the-air update. It’s only for Polestar 2 Long Range Dual Motor models, but adds 50 kW or 68 horsepower and 20 Nm of torque, which pushes the total output to 350 kW or 476 horsepower and 680 Nm or 502 lb-ft of torque. That knocks the 0-100 km/h time down to 4.4 seconds or just 1-tenth of a second faster. It’s that little of an increase because the extra power is only available from 70 km/h to 130 km/h, so you’re really going to feel it at higher speed. Now for what you’ve all been waiting for… price. Polestar says, on average, the update costs about 1,000 euros. And you know what our question is going to be. Is that amount of performance worth 1,000 euros or roughly $1,135 to you? It’s not going to be for everyone, but Polestar says over 400 upgrades have been downloaded since it launched in late November. That means it’s generated over $400,000 in a few weeks without selling a single vehicle.

JEEP USING CONNECTED TECH TO ENHANCE OFF-ROADING
So here’s how Jeep plans to use connected technology to generate more money. They call it “Freedom Connected,” and it uses AR, HUDs and OTAs. OK, let’s put that in plain English. It uses augmented reality combined with head-up displays fed by over-the-air updates. Jeep owners will be able to download off-road trails onto their nav system–for a fee of course. They’ll be able to communicate with each other, even in remote areas thanks to satellite connections. And that same V2V technology will allow them to run in platoons on the road, or off. They’re even going to offer a drone that can fly above your Jeep on off-road trails, lighting the way and presumably providing a video feed of what’s up ahead.  

Elon Musk says the Biden Administration should drop all subsidies for electric cars. He says they’re not needed. But the LA Times points out that Elon got nearly $5 billion in subsidies for Tesla, Space X and Solar City. So are these wise words from the richest person in the world, or is it the height of hypocrisy? That’s the top topic on Autoline After Hours this afternoon. Also, we’ll have Jeff Stout from Yanfeng who is one of our favorite technologists, and Craig Cole from CNET’s Roadshow. It all gets going at 3 pm eastern time and you’re invited to pull up a front row seat.

But that’s a wrap for today. Thanks for tuning in.