Fuel Type: Batterieelektrisch (BEV)

In-car touchscreens as distracting as a mobile phone?

In-car infotainment systems appear to be expanding endlessly across cockpits, becoming more technologically advanced as they go. Examples range from the Honda e’s dashboard-wide multimedia suite to Tesla’s titanic touchscreen-driven approach. While this is great news for gadget lovers, it does raise issues around driver concentration.

Andy Cutler, car editor of forecast values at Glass’s, the UK arm of Autovista Group, recognises the increasingly distracting nature of touchscreen technology. He argues that drivers now need to navigate a number of on-screen menus to adjust features like climate control, even though this can be far more distracting than simply locating a physical button. Any time the driver spends looking away from the road is dangerous, and touchscreens have the potential to elongate this hazardous period.

Reaction times

This position was supported by the findings of a study published by the UK’s Transport Research Laboratory back in March. It found that the latest in-vehicle infotainment systems can impair driving reaction times more than alcohol and cannabis use. Reaction times slow by 12% at the drink-drive limit, which then decreases to 21% with cannabis. While using a touchscreen display with Android Auto or Apple CarPlay however, reaction times were more than 50% slower.

During the study, many participants realised the system was distracting them and tried to compensate by slowing down, for example. However, their performance was still adversely affected, with drivers unable to maintain a constant distance with the vehicle in front, reacting more slowly to sudden occurrences and deviating from their lane.

Drivers who took their eyes off the road for as long as 16 seconds while driving and using touch controls resulted in reaction times that were worse than texting while driving (35% slower reaction time). Some also underestimated the amount of time they spent looking away from the road by as much as five seconds when engaged with these infotainment systems.

Tesla touchscreen trouble

A German court case has highlighted the turning tide against this technology. A ruling was passed down that Tesla’s touchscreen controls should be treated as a distracting electronic device. The judgement was made as part of a case concerning a collision where the driver had been trying to adjust the windscreen-wiper settings.

The defendant found himself facing a fine and a ban, under the same rules used to prosecute those found using a mobile phone behind the wheel.

In March this year, the Higher Regional Court in Karlsruhe, known as the Oberlandesgericht (OLG) in German, heard a case that stemmed from a collision almost a year previously, a legal blog revealed. A Tesla Model 3 driver had been out in the rain when the car’s automated wipers activated.

Their speed can be automatically adjusted by the car to compensate for the amount of rainfall. However, manually changing the intervals is done via the central touchscreen in the middle of the cockpit, rather than on a button or dial.

In this case, the Tesla driver had to navigate software menus to choose from one of five settings after touching an icon on the screen. The court said that due to the ‘resulting loss of vision from the traffic’, the driver left his lane and ended up in an embankment, colliding with a sign and several trees.

The ruling

Following the incident, the driver was initially handed a €200 fine and a one-month ban from driving by a local court. This penalty came into line with the rules surrounding the use of a mobile phone while driving, namely, ‘Improper Use of an Electronic Device in Accordance with Section 23 (1a) of the Road Traffic Regulations.’ But the driver argued that the wiper controls were a safety-related feature which he needed to access, and so appealed to the OLG.

However, the higher court denied the appeal, agreeing with the initial ruling. It found that ‘the touchscreen (permanently installed in the vehicle of the Tesla brand) is an electronic device in the sense of § 23 Para, it does not matter what purpose the driver pursues with the operation.’

‘The setting of the functions required to operate the motor vehicle via the touchscreen (here: setting the wiping interval of the windshield wiper) is therefore only permitted if the view is only briefly adjusted to the screen for road, traffic, visibility and weather conditions and at the same time a corresponding turn away from the traffic is connected.’

So according to this ruling, a fixed touchscreen is an electronic device, even if it is only being used to adjust the wiper speed. The Daily Brief did reached out to Tesla for comment about this verdict, but the company has yet to respond.

Alternative cockpit systems

So manufacturers might need to take stock of touchscreen alternatives. This could mean multifunction dials on the steering wheel or a voice-activated command system, capable of carrying out tasks quickly and effectively.

For example, Polestar’s Precept concept boasts a 15-inch screen with Google Assistant providing advanced speech technology. However, vital information is displayed on a separate nine-inch horizontal display that utilises eye-tracking technology, allowing on-screen adjustments based on where the driver is looking.

UK looks to introduce autonomous driving system from 2021

The UK Government has launched a ‘call for evidence’ to help shape innovative autonomous systems that could be used on the country’s roads as early as next year.

The plans relate to the Automated Lane-Keeping System (ALKS), which takes over control of a vehicle at low speeds, keeping it in lane, especially on dual-carriageways and motorways. The technology is designed to enable drivers to delegate the task of driving the vehicle – a first for the automotive market in the UK.

When activated, the system keeps the vehicle within its lane, controlling its movements for extended periods of time without the driver needing to do anything. However, they must be ready and able to resume control when prompted by the vehicle.

Following the approval of the ALKS Regulation in June 2020 by the United Nations Economic Commission for Europe (UNECE- of which the UK is a member) – the technology is likely to be available in cars entering the UK market from spring 2021.

Safety first

The government is seeking industry views on the role of the driver and proposed rules on the use of this system to pave the way towards its safe introduction, within the current legal framework. The call for evidence will ask whether vehicles using this technology should be legally defined as an automated vehicle, which would mean the technology provider would be responsible for the safety of the vehicle when the system is engaged, rather than the driver.

There is also a question regarding the use of ALKS at speeds of up to 70mph, the national speed limit in the UK.

‘[Autonomous technology] could make our roads safer,’ commented secretary of state for transport Grant Shapps. ‘In 2018, 85% of road collisions in the UK that resulted in injury involved human error. Automated vehicles could reduce these errors as they will not get tired or distracted.

‘I want the UK to be the first country to see these benefits and to encourage manufacturers to deploy this transformative technology on our roads by delivering the right environment for it to thrive. We are already familiar and comfortable with automation in aircraft, and I am keen that we embrace it on our roads too.’

Direction needed

With the UK leaving the European Union, the country is looking to become a leader in various technologies as a way of highlighting its economy, trade prospects and make a name for itself as it develops its own path on the international stage. The government has often spoken about becoming a leader in electric vehicle (EV) technology, specifically batteries. However, with various projects in Europe already underway, and carmakers running their own research, that target is going to be difficult to achieve.

Becoming the first country in Europe to adopt autonomous technologies for use in everyday situations could inspire companies to focus their research and development opportunities in the UK. Introducing ALKS will show favourability to legislation over driverless systems when other countries are still trying to untangle the red tape surrounding them.

‘Automated technology could make driving safer, smoother and easier for motorists and the UK should be the first country to see these benefits, attracting manufacturers to develop and test new technologies,’ added transport minister Rachel Maclean.

‘The UK’s work in this area is world-leading, and the results from this call for evidence could be a significant step forward for this exciting technology.’

Ready to go

Mike Hawes, SMMT chief executive, said: ‘Autonomous vehicle technologies, of which automated lane-keeping is the latest, will be life-changing, making our journeys safer and smoother than ever before and helping prevent some 47,000 serious accidents and save 3,900 lives over the next decade.

‘This advanced technology is ready for roll out in new models from as early as 2021, so today’s announcement is a welcome step in bringing the regulation up to speed so that the UK can be among the first to grasp the benefits of this road safety revolution.’

The UK Government plans to launch a public consultation later this year on the detail of any changes to legislation and The Highway Code that are proposed following the completion of the call for evidence.

Lucid Motors looks to set ‘new standards’

Lucid Motors is seeking to set ‘new standards’ for sustainable transportation. Having recently announced the upcoming Lucid Air sedan can achieve an estimated range of 517 miles (832km) under US Environmental Protection Agency (EPA) testing, the California-based startup might just be able to go the distance.

Additional reports indicate that the luxury electric-vehicle (EV) maker is nearing completion of its factory in Arizona. The company also confirmed it has plans for the next generation of EVs that could follow its all-electric sedan.

Setting a benchmark

The Lucid Air set a benchmark EPA range of 517 miles with FEV North America, in Michigan. As an independent service provider of vehicle and powertrain development, FEV applied the EPA’s multicycle test procedure. The carmaker said that ‘the results confirm that the Lucid Air is the longest-range electric vehicle to date.’

The EPA’s range assessment focuses on long-distance cruising, given the US’s long highways. Meanwhile, the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) used in Europe, emphasises a start-stop driving style, which is more common on the continent.

‘I am delighted that the Lucid Air has been independently verified by FEV to achieve an estimated EPA range of 517 miles, and that this landmark in the history of EV development has been achieved entirely through Lucid’s in-house technology,’ said Peter Rawlinson, CEO and CTO of Lucid Motors.

‘I believe that our 900-volt architecture, our race-proven battery packs, miniaturised motors and power electronics, integrated transmission systems, aerodynamics, chassis and thermal systems, software, and overall system efficiency has now reached a stage where it collectively sets a new standard and delivers a host of ‘world’s firsts,’ he said.

Producing some of the longest-range EVs on the market, Tesla recently announced its Model S Long Range Plus achieved an EPA range of 402 miles. This equals a 20% range increase when compared to a Model S 100D from 2019, with the same battery pack design. While the Lucid Air can travel 100 miles further, Tesla claims its upcoming Roadster will boast a range of 620 miles. However, it now looks like the Roadster is unlikely to go on sale before 2022 as Tesla’s focus remains on the Model Y, the Cybertruck, and the Gigafactory in Berlin.

Rising range

The earlier ‘alpha’ prototype of the Lucid Air originally sported a range of 400 miles. The carmaker explained it was able to gain another 100 miles through proprietary technology and careful engineering.

The drivetrain was built in-house with Lucid miniaturising and integrating the Air’s motors, transmission and inverter. This was then paired with a 900-volt architecture to achieve compactness and efficiency. Lucid said battery packs were the result of ‘10 years of experience and over 20 million miles of real-world testing.’

Atieva, Lucid’s technology division, also played a big part given that it supplies battery packs to the Formula E racing series. The battery system, therefore, provides increased safety, performance, and energy density in a form sculpted around the cabin.

‘Range and efficiency are widely recognised as the most relevant proof points by which EV technical prowess is measured,’ said Rawlinson. ‘A few years ago, we revealed our alpha prototypes of the Lucid Air and promised over 400 miles range; a reflection of our technology at that time. In the intervening period, we have achieved a series of technological breakthroughs, culminating in an unsurpassed degree of energy efficiency.’

‘I am therefore pleased that we have consequently achieved an estimated EPA 517 miles of range today whilst also significantly reducing our battery pack’s capacity, thereby reducing vehicle weight and cost, and improving interior space. Such exceptional efficiency, achieved through in-house technology, is undeniably a measure of a true EV tech company,’ he concluded.

While customer deliveries are not scheduled until early 2021, the Lucid Air’s online reveal event on 9 September is fast approaching. Here, information about the vehicle’s final interior and exterior design will be announced as well as product specifications, available configurations and pricing.

Nearly finished factory

After breaking ground in early December 2019, construction has nearly finished on Lucid’s factory in Casa Grande, Arizona, with plans to install a pilot production line there later this month. It is here the startup will begin manufacturing ‘Beta 2’ models that will closely resemble the production models that will reach customers next spring, according to Green Car Reports (GCR).

Rawlinson told GCR that it is the first purpose-built EV factory in North America, built in record time. It will have taken eight months from there being no factory at all, to an operational one with cars coming off the production line.

In an email to Autovista Group, a Lucid spokesperson explained that this has been achieved by focusing on the initial phase of construction, which would allow the startup to meet a more modest manufacturing capacity in its first year of production. 

‘We felt a greenfield factory was appropriate for Lucid so we could ensure production efficiencies at every stage of the company’s growth,’ the spokesperson wrote. ‘For the first phase, we’re constructing an 820,000 sq. ft. facility that will include manufacturing, assembly, storage and central utility, and employ around 750 workers.’

‘Production capacity for phase one is approximately 34,000 units per year. For phase two and beyond, the company will expand construction as higher sales volumes dictate, with the land in Casa Grande allowing for production growth of up to 400,000 units per year,’ they added.

More models

Rawlinson also confirmed with GCR that Lucid plans to produce an SUV, which shares the Air’s platform as well as its production line. Currently, the hope is to get this model into production by early 2023. He explained that the drive behind this move was creating economies of scale that will help grow the business.

GCR hinted that once this has been achieved, the advanced technologies featured in the Lucid Air could make its way into a more affordable vehicle. When asked about the potential for a more affordable vehicle, the spokesperson told Autovista Group ‘we are exploring all options for a full line up of Lucid vehicles, including vehicles that start below $100,000 (roughly €83,000).’ However, they stated ‘no additional information can be shared at this time.’

Large and established automotive companies find themselves needing to convert factories, redesign model lines and even call in specialist help to work out the fine details of EV production. Technology companies like Lucid and Tesla, on the other hand, benefit from having their roots firmly planted in EV soil. But entering the market in the first place can be hugely expensive, meaning the startups lean towards luxury models. This makes establishing economies of scale essential so they can work their way back down the cost tree, expanding their market share with more affordable EVs.

Used-car transactions grow across Europe in July

The latest data from the respective associations in the major continental European markets reveal that the volume of used-car transactions grew in July 2020 compared to the same month last year. Autovista Group senior data journalist Neil King considers this return to growth across Europe’s used-car markets as the sector tentatively recovers from the coronavirus (COVID-19) crisis.

Used-car sales increased by 13% year-on-year in both France and Germany in July, and were up 9% in Italy and 6% in Spain. Through to July, Germany is the only major European used-car market that has not suffered a double-digit decline, with a comparatively modest contraction of 8%.

Used-car data is not yet available for the UK for July but is expected to follow the growth trend, especially given the 11% surge in new-car registrations in the country’s first full month of trading since February. This is even without increased buying incentives, which have been introduced in France, Germany, Italy and Spain.

Used-car transactions, year-on-year percentage change, July and year-to-date 2020

Used-car transactions, year-on-year percentage change, July and year-to-date 2020

Sources: CCFA, KBA, ANFIA, GANVAM/IEA

Outperforming new-car registrations

Prior to the positive results last month, the volume of used-car transactions declined in the first half of 2020 compared to H1 2019 in all five major European markets. However, the downturns in the first half of 2020 were not as dramatic as the contractions in new-car registrations.

Used-car transactions and new-car registrations, year-on-year percentage change, H1 2020

Gebrauchtwagen-Transaktionen und Neuzulassungen, Veränderung gegenüber dem Vorjahr in Prozent, H1 2020

Sources: CCFA, KBA, ANFIA, ANFAC, GANVAM/IEA, SMMT

In the UK, the used-car market contracted by 28.7% in the first half of 2020, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT) on 11 August. Following a comparatively modest decline of 8.3% in the first quarter of 2020 as the COVID-19 lockdown from March negated growth in January and February, there were only 1,039,303 changes of ownership in the second quarter, equating to a 48.9% slump in the second quarter. However, ‘the pace of decline eased as the quarter progressed, from a peak year-on-year loss of 74.2% in April to 17.5% in June, as private sellers and buyers got back on the move and transactions began to restart,’ the SMMT stated.

‘As devastating as these figures are, with full lockdown measures in place for the whole of April and May, they are not surprising. As the UK starts to get back on the move again and dealerships continue to re-open, we expect to see more activity return to the market, particularly as many people see cars as a safe and reliable way to travel during the pandemic. However, if we’re to re-energise sales and the fleet renewal needed to drive environmental gains, support will be needed for the broader economy in order to bolster business and consumer confidence,’ commented Mike Hawes, SMMT chief executive.

Continental transactions

There were similar contractions of the used-car market in Spain and Italy. Spain suffered the most, with 31.7% fewer changes of ownership in the first half of 2020 than a year earlier, but new-car registrations declined by more than 50%. There was a phased approach to relaxing the lockdown measures in Spain, which largely explains why both the new- and used-car markets were still weak, even in June. However, dealers can now fully reopen, and the introduction of the MOVES II incentive scheme for new battery-electric vehicles (BEVs) and plug-in electric hybrids (PHEVs) and the RENOVE scrappage scheme have stimulated the Spanish market since their introduction in early July.

Used-car demand fell 31.6% year-on-year in Italy in the first half of 2020, compared to a 46.1% contraction of the new-car market. However, many buyers of both new and used cars decided to hold off until government incentives came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). This new scheme comes on top of the Ecobonus scheme, which incentivises cars producing less than 20g of CO2/km.

Electric and hybrid cars can now benefit from up to €10,000 in subsidies when scrapping an older vehicle. €3,500 is now provided for scrapping vehicles that are at least 10 years old when buying a new Euro 6 vehicle with CO2 emissions up to 110g/km, and a price of up to €40,000. Dealers will put forward €2,000 towards the incentive, while the state provides €1,500. Without trading in an older model, the funds drop to €1,750.

In France, the 17.4% decline in used-car sales in the first half of 2020 was a significantly better performance than the 38.6% fall in new-car registrations. Whereas the incentives introduced on 1 June for new BEVs and PHEVs remain, the additional bonus for trading in older cars for cleaner new and used cars was exhausted before the end of July. The scrappage scheme reached its 200,000-vehicle cap after just two months, but the Ministry of Ecological Transition announced it would be replacing the recovery scheme with a conversion bonus, applicable from 3 August.

Germany has weathered the COVID-19 storm better than the other major European markets, with only 11.4% fewer changes of ownership in the first half of 2020 compared to the same period last year. New-car registrations have also suffered less than in the other major markets, but were still down 34.5% in the first half, and have therefore been outperformed by used-car demand here too.

Residual-value resilience

As used-car markets have proven more resilient than new-car markets, the impact on residual values (RVs) has been rather marginal in European markets so far this year. Nevertheless, a ‘three-speed’ development of residual values (RVs) is emerging. The UK and France are benefitting from pent-up demand and some markets have had a rapid reaction to the impact of COVID-19, but most are ‘late starters’ with limited value movements thus far.

Autovista Group - Restwert-Intelligence Coronavirus-Tracker

Source: Autovista Group – Residual Value Intelligence Coronavirus Tracker

As COVID-19 lockdowns are left behind, thoughts turn to economic recovery. However, as the latest update to the Autovista Group whitepaper ‘How will COVID-19 shape used car markets’ explains, in the last month, the situation has taken a gloomier turn. Download your copy here.

Schwacke Insights August 2020 – monatliche Kennzahlen im Überblick

Im Juli schon von Entspannung zu sprechen ist vielleicht ein bisschen zu früh, aber in Richtung Sommer erholen sich die Verkaufszahlen besser als im Neuwagenbereich und Preisindizes sind eher positiv für klassische Verbrenner. Dennoch sind viele Vergleichs-KPIs im roten Bereich und die elektrifizierten Antriebe – mit Ausnahme Vollhybrid – setzen ihren corona-unabhängigen Sinkflug weiter fort.

Besserung ist auch nicht in Sicht. Die Innovationsprämie macht neue Elektrofahrzeuge und PHEVs aktuell günstig und lässt damit von jung nach alt die Gebrauchten sinken. Schließlich wollen GW-Kunden immer noch in Relation günstiger wegkommen mit ihrem Kauf. Außerdem fehlen denen wirkliche Kaufanreize und Vorteile während des Betriebs. So steigen die Verkaufsvolumen nur moderat und werden durch wachsenden Nachschub „überaufgefüllt“. Krisenbedingt spät, aber noch in der Saison: Schnelldreher-Cabrios.

Insights August 2020

Podcast: Running the numbers on incentives, registrations and residual values

The Autovista Group Daily Brief Team discusses the biggest automotive news stories of the last fortnight. In this episode, Tom Geggus talks incentive schemes, Neil King reviews registration figures and returning special guest Christof Engelskirchen wraps up residual values.

https://soundcloud.com/autovistagroup/running-the-numbers-on-incentives-registrations-and-residual-values

You can also listen and subscribe to receive further episodes direct to your mobile device on Apple, Spotify and Google Podcasts.

Carmakers’ financial performance highlights COVID-19 crisis – Part 2

Daily Brief editor Phil Curry looks at carmakers’ 2020 quarterly and first-half financial performance, exploring how the coronavirus (COVID-19) pandemic has affected the automotive industry. In this second part, Curry explores the impact of COVID-19 on the financial performance of BMW, Daimler and Toyota.

The BMW Group delivered 962,575 BMW, Mini and Rolls-Royce premium-brand vehicles to customers worldwide in the first six months of 2020, down 23% compared to the first half of 2019. Group revenues fell 10.3% to €43.2 billion. Earnings before interest and tax (EBIT) for the six-month period amounted to €709 million, down 74.6%. 

As BMW expected, the negative impact of the COVID-19 pandemic was felt more sharply in the period from April to June. The carmaker reported a loss of €666 million in Q2, its first quarterly loss since 2009.

‘Our swift responsiveness and consistent management strategy enabled us to limit the impact of the corona pandemic on the BMW Group during the first half of the year,’ said Oliver Zipse, BMW chairman. ‘We are now looking ahead to the second six-month period with cautious optimism and continue to target an EBIT margin between 0% and 3% for the automotive segment in 2020. We are monitoring the situation very closely and managing production capacities in line with market developments and regional fluctuations in customer demand.’

Daimler – a challenging quarter

Daimler has issued a number of profit warnings in recent years, as it has struggled with EV development budgets, falling sales and the implementation of the Worldwide Harmonised Light-vehicle Test Procedure (WLTP). The COVID-19 pandemic has therefore added another layer to an already complicated situation.

The German carmaker reported that revenue slipped ‘significantly’ by 29% to €30.2 billion in Q2 2020. It reported a loss before interest and tax of -€1.7 billion, with a net loss of €1.9 billion.

‘Due to the unprecedented COVID-19 pandemic, we had to endure a challenging quarter,’ said Ola Källenius, chairman of Daimler. ‘But our net industrial liquidity is a testament to effective cost control and cash management, which we must continue to enforce. We are now seeing the first signs of a sales recovery – especially at Mercedes-Benz passenger cars, where we are experiencing strong demand for our top end models and our electrified vehicles. Going forward, we are firmly determined to continue to improve the cost base of our company. At the same time, we are committed to our key strategic objectives: to lead in electrification and digitalisation.’

Daimler countered the drop in demand by quickly suspending production in March, April and May, as well as introducing short-time working. To safeguard the company’s financial strength, expenditure and investments were focused on the most critical future projects. The company currently expects to return to profit by the end of the year.

Toyota turns a profit

Unlike Nissan, and other Japanese carmakers, Toyota reported a profit, albeit significantly reduced, in its 2021 financial year Q1 results, covering the period from 1 April to 30 June. The carmaker’s operating profits plunged by 98% compared to the same period last year, coming in at ¥13.9 billion (€110 million).

Net income tumbled 74% to ¥158.8 billion, as total retail vehicle sales, including those from Daihatsu and Hino, fell by 32%.

Toyota attributed its profit to a number of key elements that played out in the three months. First, the effects of foreign exchange rates decreased operating income by ¥75 billion. Secondly, cost-reduction efforts increased operating income by ¥10 billion. Lastly, the effects of marketing activities decreased operating income by ¥810 billion yen, largely due to the fall in sales volume caused by the spread of COVID-19.

The carmaker has not revised its forecasts for the year, which were made in May 2020, as it operates an April to March financial year. Therefore, it was able to take the COVID-19 effect into account when planning its year ahead. The company expects operating income will fall 79% to ¥500 billion in 2020/2021 while net income will slide 64% to ¥730 billion.

‘While we expect an increase in consolidated vehicle sales, we have left those forecasts unchanged given, for example, the possibility that the business environment will change significantly depending on such factors as the future spread of COVID-19 and the state of its containment,’ the company said.

Cautious optimism

Throughout the recent spate of financial results, one thing is clear. No company is currently able to accurately forecast its full-year results. Some have tried, with caveats added in case things change drastically, while others have simply said they are not in a position to produce forecasts in what is a volatile market.

However, there is cautious optimism, and as countries around the world start to get a grip on how to handle the COVID-19 pandemic, it is hoped that the extreme measures taken in March and April will not be repeated. What could cause further issues for the automotive industry is the economic impact, which has pushed some countries into recession and is increasing unemployment. These two factors that do not bode well for the purchase of new vehicles.

Read part one of Curry’s financial results round-up here. 

Carmakers’ financial performance highlights crisis behind COVID-19

Daily Brief editor Phil Curry looks at carmakers’ 2020 quarterly and first-half financial performance, and how the coronavirus (COVID-19) pandemic has affected the automotive industry. In this first part of two, Curry considers VW Group, Nissan, Renault and Ford.

Europe’s economy is in a state of flux in the wake of COVID-19 lockdowns, with Italy leading the way in extreme measures put in place to prevent the spread of the virus.

Some carmakers have weathered the storm better than others, and many remain optimistic that the impact is merely a ‘blip’ in their financial results, with improvements already developing.

VW – one of the most challenging periods

In its H1 2020 results, Volkswagen Group (VW) reported an operating loss of €803 million (before special items). This expanded to an overall loss in the first half of 2020 to almost €1.5 billion when special items are included. Vehicle sales were down 30% compared to the first half of 2019, while production fell 32.5%. Group sales revenue decreased by 23.2% to €96.1 billion.

Frank Witter, member of the group board of management responsible for finance and IT, said: ‘The first half of 2020 was one of the most challenging in the history of our company due to the COVID-19 pandemic. The health of our employees, customers and business partners is still the top priority. With our 100-points plan to ensure maximum health protection, we have, for example, created the best possible prerequisites for a safe working environment. At the same time, we introduced comprehensive measures aimed at reducing costs and securing liquidity early on, which enabled us to limit the impact of the pandemic on our business to a certain degree.

‘Thanks to the great team effort, we have gradually been able to ramp up operations within the Group and up until now, have steadily managed to navigate through this unprecedented crisis. Due to the positive trend exhibited in our business over the past few weeks and the introduction of numerous attractive models, we look cautiously optimistic to the second half of the year.’

Nissan – major losses

For the April to June period, consolidated net revenue at Nissan was ¥1.1742 trillion. The operating loss was ¥153.9 billion, equivalent to an operating margin of -13.1%. The net loss was ¥285.6 billion.

In its first quarter, Nissan’s global automotive sales fell by almost half amid the pandemic. To limit the spread of COVID-19, the company suspended production at manufacturing sites around the world. Nissan’s plants have since resumed operations but face reduced utilisation of their capacity due to lower demand. The company’s performance continues to be impacted by the challenging business climate, it said in a release.

Nissan raised concerns about its financial performance in April, saying that its full-year consolidated earnings ‘may differ by more than 30% from the previous financial forecast’ that was made in February. It is expecting an operating loss of ¥470 billion (€3.7 billion) for the year to March 2021.

Renault – impacted by Nissan

French carmaker Renault Group announced a €7.4 billion net loss in the first half of 2020, with the carmaker highlighting the negative impact of alliance partner Nissan’s results.

The contribution of associated companies came to -€4.8 billion, compared with -€35 million in the first half of 2019. ‘This decline came mostly from Nissan’s contribution, down €4.796 billion including -€4.3 billion of impairments and restructuring costs,’ the carmaker said.

Global sales dropped by 34.9%. However, the company stated it had a ‘high-level order book’ at 30 June, and sales of its Zoe electric model were up by 50%, highlighting the appeal of the technology. It is also likely that the generous incentive scheme in France helped the carmaker to increase sales in the period from 1 June.

No reliable guidance

However, Renault is unsure of how it will perform in the rest of 2020. ‘Given the uncertainties around the health situation, both in Europe and in emerging markets, Groupe Renault estimates that it is not in a position to give a reliable guidance for the full year,’ it stated.

Luca de Meo, CEO of Renault, declared: ‘Although the situation is unprecedented, it is not final. Together with all of the Group’s management teams and employees, we are fully dedicated to correcting the situation through a strict discipline that will go beyond reducing our fixed costs. Preparing for the future also means building our development strategy, and we are actively working on this. I have every confidence in the Group’s ability to recover.’

Ford quarter supported by Argo AI

Ford benefited from an investment made in its autonomous subsidiary Argo AI by VW Group, as part of a collaboration deal on driverless and electric-vehicle technology. Without the investment, Ford reported a loss for the second quarter of -$1.9 billion. Including the investment, the firm reported a second-quarter profit of $1.1 billion, up by $1 billion on the similar period in 2019.

Its H1 results reflect the wider picture of the coronavirus impact with six-month losses. For the first half of 2020, the company reported a loss of $900 million – a negative impact of $2.2 billion compared with the same period in 2019. Global sales fell 37% compared to the first six months of 2019.

Ford directed much of its capabilities and resolve in the second quarter to understanding and helping to meet the coronavirus-related needs of customers, dealers, suppliers, healthcare professionals and first responders, and patients and communities. Initiatives like enhanced and new online services, and deferred financing payments on new vehicles in the US, benefitted customers and Ford as commerce stalled, then began to recover. However, with the US yet to emerge from its first wave of coronavirus infections, let alone face a second wave, Ford’s global business may yet be facing deeper challenges in the second half of 2020.

In a follow-up article to be published tomorrow (14 August), Daily Brief editor Phil Curry explores the impact of COVID-19 on the financial performance of BMW, Daimler and Toyota.

BMW promotes hydrogen technology with new model in 2022

BMW has confirmed that its i Hydrogen Next technology will go on sale in 2022, with a new model, based on the current X5, becoming the first to feature the powertrain.

The carmaker announced plans to develop a hydrogen drive system for sale last year. However, since then Daimler has pulled out of developing the technology for passenger vehicles, while pressure has increased on all carmakers to create electrified drivetrains to lower average emissions. But the German manufacturer remains committed to hydrogen, seeing the long-term benefits of the zero-emission technology.

The carmaker has been working with Toyota, a leader in the development of hydrogen powertrains, to develop the technology for its vehicles. Since summer 2015, the BMW Group has been testing development vehicles, based on the BMW 5-Series GT, that are equipped with a jointly developed fuel-cell system. 

The fuel-cell stack that will power the new BMW i Hydrogen NEXT model is an original development of the BMW Group, according to the company. The individual cells of the fuel cell come from Toyota. An automated research facility for the production of fuel-cell stacks is used in the manufacture of the X5 pilot fleet.

The testing of innovative production technologies is an important step in the preparation of scalable, time, cost and quality optimised production of hydrogen fuel-cell drives.

https://www.youtube.com/watch?v=PmSXAbkvoE8&feature=emb_logo

‘In the future, the hydrogen fuel-cell drive can be an attractive alternative to battery-electric vehicles (BEVs), especially for customers who do not have access to their own charging infrastructure and who often drive long distances,’ the company said. ‘With a sufficient refuelling infrastructure, hydrogen vehicles offer great flexibility, since the full range is available again after a short refuelling process of around four minutes – regardless of temperature conditions.’

Beneficial technology

Hydrogen has the potential to sit alongside BEV technology and create a two-fuel system once various countries ban the internal combustion engine. It offers drivers a longer range than some BEVs. At the same time, refuelling times are comparable to petrol and diesel, meaning those covering longer journeys would be able to do so with ease in a vehicle that only emits H2O from the exhaust.

Toyota has led the way with hydrogen development and was the first to bring a production car to market, albeit in small numbers. Hyundai is also developing the technology, while Daimler, which pulled out of researching and producing fuel-cell passenger cars, will instead focus on the use of hydrogen in larger commercial vehicles.

‘What we see today is a rapid shift into battery, because to produce fuel-cell power, you need to have an electric powertrain first,’ Toyota’s manager of alternative fuels, Jon Hunt, said at a summit earlier this year. ‘So that’s where the development is occurring, before moving to fuel-cell electric vehicles (FCEV).’

‘Notwithstanding that, there are many manufacturers who have huge issues of achieving their emission reductions to avoid fines. That means that they have to have a certain proportion of zero-emission cars. That is distorting the market.’

Coronavirus impact

However, the current situation the market finds itself in following the coronavirus (COVID-19) pandemic and associated lockdowns may change the timeline of hydrogen development.

Carmakers are facing large fines if they fail to bring down their average fleet emissions by the end of 2021, and with the diesel market collapsing, the only way to do this is by manufacturing a technology that is already further along the development path – and that is battery-electric. With COVID-19 and the resulting economic turmoil, development budgets will likely be cut, and therefore hydrogen technology will suffer.

Yet with Toyota, Hyundai and now BMW actively pursuing hydrogen as an alternative fuel of choice, their development may aid others in the research of the technology. Toyota has already announced it will allow access to its patents around hydrogen.

Committed choice

BMW sees hydrogen as giving its customers another choice when it comes to vehicle powertrains.

‘Politicians have recognised the importance of green hydrogen for the energy system of the future,’ said BMW CEO Oliver Zipse, referring to the support of the German Government with the National Hydrogen Strategy. ‘We expressly welcome the various initiatives. For road traffic, an expansion of the infrastructure is now required, which takes into account the needs of both commercial vehicles and cars. Depending on how the general conditions develop, hydrogen fuel-cell technology has the potential to become another pillar in the BMW Group’s drive portfolio.’

Zipse added to his feelings about hydrogen technology at BMW’s annual general meeting (AGM), saying: ‘We continue to invest consciously in various technologies. This includes hydrogen fuel-cell technology. Ultimately, this is the most intelligent and fastest way to effective climate protection.’

Outside influence

The BMW Group also has experience with the use of hydrogen outside of drive development. The company has always followed the path of resource-saving and sustainable production of vehicles and is continuing this path with the use of hydrogen.

The carmaker’s Leipzig plant has been operating hydrogen-powered industrial trucks since 2013. The use of innovative hydrogen technology offers the site the long-term opportunity to further promote decarbonisation. 

‘With the National Hydrogen Strategy and the billions promised to be implemented in the economic stimulus package, the Federal Government has sent a clear signal,’ said Peter Altmaier, Federal Minister for Economic Affairs and Energy, while visiting the Leipzig plant recently. ‘We will shape the framework and actively support the economy in the development and use of hydrogen technology. However, the marketable implementation of hydrogen technologies lies with the companies. And I am therefore very happy that there are many companies like BMW in Germany that have the vision, the courage and the innovative strength to make this technology a market success.’

Vehicle details

The system performance of the BMW i Hydrogen NEXT comes to a total of 275kW (374hp) according to the carmaker.

‘With the drive system of the BMW i Hydrogen NEXT, the fuel-cell system generates up to 125 kW (170hp) of electrical energy, which is obtained from the chemical reaction of hydrogen and oxygen from the air,’ says Jürgen Guldner, head of BMW Group Hydrogen Fuel Cell Technology and vehicle projects. ‘This means that the vehicle only emits water vapour.’

The electrical converter, which is located below the fuel cell, adjusts its voltage level to that of the electrical drive and the power buffer battery. This is fed by both the kinetic energy from braking and the energy of the fuel cell. 

The vehicle itself houses two 700 bar tanks, which together hold six kilograms of hydrogen. ‘This guarantees long ranges in all weather conditions,’ Guldner adds. ‘The refuelling process only takes three to four minutes.’

Honda e – taking the ‘retro and cute’ route

The new Honda e does not go unnoticed with its ‘retro and cute,’ but unique, urban design. It closely resembles the first-generation Civic, only with futuristic cues. This is coupled with a clean interior that fuses retro styling with space-age technology. The car drives really well too, with excellent balance, a tight turning circle, progressive suspension, and dynamic acceleration.

List prices of the Honda e are high but even at the base trim level, the model has adaptive cruise control, LED fog lights, lane assist, keyless entry, a panoramic roof, privacy glass and an innovative side-camera mirror system. The dashboard has a full suite of screens running from end to end, with the outer two screens displaying the side-camera feeds.

Honda’s first battery-electric vehicle (BEV) has a comparatively short range but is capable of fast charging on a 100kW DC charger, which will recharge the battery almost fully in just 30 minutes. Furthermore, owners can plug a games console into the dashboard screens and play whilst waiting for the car to charge. This just shows the type of customer that Honda is trying to attract.

The Honda e has some very stiff competition in the form of the Mini Electric, the new Peugeot e-208 (as well as its sister car, the Opel/Vauxhall Corsa-e), and the updated Renault Zoe. Incentives and the increasing supply of B-segment BEVs could negatively impact residual values unless demand improves.

Click here or on the image below to read Autovista Group’s benchmarking of the Honda e in France, Italy, Spain and the UK.

We present new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Honda e Launch Report

Autovista Group Insights: Improving safety in vehicles

With the safety systems for both vehicle occupants and pedestrians improving, Autovista Group’s Daily Brief team looks at the technology being introduced to help towards Europe’s vision of zero road fatalities by 2050. This includes developments in autonomous technology alongside advanced vehicle systems, and improved crash structures…

You can view more video content from the Daily Brief team on our dedicated YouTube channel. Click here and subscribe to be notified of new content when it becomes available.

German new-car registrations fell 5.4% in July and Spain

German new-car registrations dropped by 5.4% in July, compared with the same month in 2019. A total of 314,938 new cars were registered, according to the latest figures from the automotive authority Kraftfahrt-Bundesamt (KBA).

This is the greatest performance of the German market since the coronavirus (COVID-19) pandemic put sales on lockdown. The government announced a COVID-19 economic recovery package at the start of June. It looks to boost the sales of low- and zero-emission cars while investing in green transport infrastructure. Conversely, petrol- and diesel-powered vehicles did not feature in the package. Incentives were extended since 1 July, supporting registrations.

The country endured declines of 32.2% in June, 49.5% in May and 61.1% in April. However, Germany now lags behind France, Spain and the UK, which saw 3.9%, 1.1%, and 11.3% year-on-year rises respectively in July. Overall, the number of private registrations in Germany rose last month by 7.1% to a share of 41%.

How brands fared

There was a mixed performance among German brands. Double-digit growth was recorded for the likes of Mini at 35.7%, followed by BMW with 17.4%, and Mercedes at 10.7%. Porsche saw single-digit growth of 2.4%. For other brands, however, there were significant decreases in new-car registrations compared with the same month last year. Smart was down 51.6%, Opel dropped by 45.2%, Ford by 22.5%, Audi by 20.8% and VW by 3.3%. At 19%, the VW brand accounted for the largest brand share of new registrations.

Among the imported brands, increases were recorded among Subaru, up 63.9%, Jeep, up 42.2%, and Mitsubishi, up 33.4%. In contrast, declines were recorded for Tesla at 66.6%, Land Rover 39.9%, Jaguar 38.9%, Alfa Romeo 33.6% and Dacia 32.1%. With a new-car registration share of 7% (up 8.3%), Skoda was once again the largest import brand in the monthly balance.

How types fared

Year-on-year registration increases were recorded for motorhomes (94.7%), small cars (9.5%), SUVs (3.1%) and the luxury class (2.7%). The remaining segments recorded declines. Compact MPVs dropped by 49.5%, full-size MPVs were down 39.8%. The segment with the highest share was SUVs with 21.8%, closely followed by the compact class with 21.1%.

Registrations of petrol-powered vehicles fell by 20.3%, with a share of 49% at 154,352 new vehicles. Some 89,543 cars were equipped with diesel-powered engines. After a decline of 18.6%, their market share was 28.4%.

Compared with July 2019, alternative drivetrains showed growth, in some cases in the three-digit range. The number of electric vehicles (EVs) grew by 181.7% to 16,798 new vehicles, bringing their new-car registration share to 5.3%. A total of 52,488 hybrids generated growth of 143.5%, equalling a share of 16.7%. This included 19,119 plug-in hybrids (PHEV), up 484.7% with a share of 6.1%. With 933 new cars and a registration increase of 13.8%, natural gas-powered vehicles achieved a share of 0.3%. By contrast, 784 liquid gas-powered passenger cars recorded a decline of 4.2% with a share of 0.2%. Average CO2 emissions fell by 8.7% to 144.5 g/km.

Business expectations rise

These latest figures support a rise in business expectations by German automotive companies, as revealed by the Ifo Institute’s latest survey. Outlooks improved considerably for the second consecutive month in July, with carmakers also expecting exports to grow. Demand expectations also strengthened somewhat compared to the previous month, alongside production outlook.

However, the institute’s business situation indicator remained negative in July. ‘Headcount developments remain worrying,’ said Klaus Wohlrabe, head of surveys at Ifo. Outlook on personnel planning rose weakly but remained worse than during the 2009 financial crisis.

Incentives generate growth in July new-car registrations in France and Spain

The automotive trade associations in France and Spain report that new-car registrations grew by 3.9% and 1.1% year-on-year respectively in July. Both markets are being stimulated by government-backed incentives, although the scrappage scheme for older cars has already been exhausted in France. Autovista Group senior data journalist Neil King discusses the latest developments.

As Europe continues its emergence from coronavirus (COVID-19) lockdowns, Autovista Group expected that new-car registration figures would continue to improve in July. Thanks to incentive schemes offered by their respective governments to help the automotive market in the wake of the disruption, both France and Spain even recorded positive growth compared to the same month last year.

New-car registrations were 3.9% higher in France in July 2020 than in July 2019, according to the latest data released by the CCFA, the French automotive industry association. This is an improvement on the 1.2% year-on-year growth in new-car registrations in the country in June and the tally of 178,982 registrations is even more impressive as there was one less working day in July 2020 than in July 2019 (22 versus 23). Based on a comparable number of working days, the CCFA reports that the market expanded by 8.6% in the month.

Whereas the incentives introduced on 1 June for new battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs) remain, the additional bonus for trading in older cars for cleaner new and used cars was exhausted before the end of July. The scrappage scheme reached its 200,000-vehicle cap after just two months, but the Ministry of Ecological Transition announced it would be replacing the recovery scheme with a conversion bonus. Applicable from 3 August, it will closely resemble one that had been in place several years before coronavirus (COVID-19) struck Europe.

In Spain, 117,929 new cars were registered in July, 1.1% more than in July 2019, according to ANFAC, the Spanish vehicle manufacturers’ association. ‘This boost to sales is having very positive consequences for the recovery of employment throughout the value chain. Dealers already have 90% of their workforce working, around 150,000 employees, and in factories, recovery rates exceed 85%. The Spanish market is especially important for Spanish factories because one in four vehicles manufactured in the country is sold within our borders,’ ANFAC commented.

New-car registrations, France and Spain, year-on-year percentage change, July and year-to-date 2020

Pkw-Neuzulassungen, Frankreich und Spanien, Veränderung gegenüber dem Vorjahr in Prozent, Juli und seit Jahresbeginn 2020

Source: CCFA, ANFAC

Late reopening, MOVES II and RENOVE schemes boost Spain

There was a phased approach to relaxing the lockdown measures in Spain, which largely explains why the new-car market was still weak, even in June. However, dealers can now fully reopen, and the introduction of the MOVES II incentive scheme for new BEVs and PHEVs and the RENOVE scrappage scheme have further stimulated the Spanish market since their introduction in early July.

Under the MOVES II scheme, buyers of new BEVs and PHEVs costing less than €45,000 are entitled to a total subsidy of €5,000 (€4,000 from the government and €1,000 from the manufacturer). Buyers can also receive an additional bonus of €500 if they trade in a car to be scrapped that is over seven years of age.

Cars with other fuel types are not eligible for the MOVES II new-car incentive but can still benefit from the RENOVE scrappage scheme. When scrapping a car over ten years of age, buyers of hybrids, mild-hybrids and CNG or LPG cars costing less than €35,000 receive a bonus up to €2,000 – half provided by the government and half by the manufacturer. For cars with internal combustion engines (ICE) costing less than €35,000 and with CO2 emissions lower than 120g per kilometre, the maximum bonus is €1,600.

Both the MOVES II and RENOVE schemes have been applied retroactively to 1 January 2020, and so both new and young used cars are eligible for the subsidies in order to avoid potential stock problems.

‘The positive registrations of passenger cars in the month of July reflect the significant boost given to the market by the RENOVE 2020 plan, a boost that allows economic activity and employment to be recovered and advances the decarbonisation of the parc by compulsory scrapping,’ commented Noemi Navas, director of communications for ANFAC.

Maintaining mobilisation

The end of the scrappage scheme in France, in conjunction with dissipating pent-up demand, means new-car registrations are unlikely to maintain their positive growth in the coming months. Spain invariably faces the same challenges.

Raúl Morales, communications director of Faconauto, said: ‘From now on, the challenge is to maintain this mobilisation of the market to strengthen the recovery. And the good news is that the RENOVE has room to be more decisive since approximately 20% of registrations have utilised it since it has been operational.’

‘Although with these figures we are seeing a V-shaped recovery, we must be very cautious, and the key will be in September, which is when the impact of the coronavirus crisis will be seen in business. The key to recovery, in a black year also for tourism, will be to get the pact to approve the budgets and to articulate as soon as possible the arrival of the aid approved by Europe,’ cautioned Tania Puche, director of communications of the Spanish trade association Ganvam.

As it stands, Ana Azofra, valuations and insights manager at Autovista Group in Spain, said that the forecast for Spain is still for a 40-45% decline for new cars in 2020 and 20-25% for used cars. How the new plans develop and European funds are allocated will largely dictate the outlook going forward.

Podcast: The three speeds of lockdown emergence

3 August 2020

The Autovista Group Daily Brief Team discusses the biggest automotive topics of the last fortnight. In this episode, Neil King discusses the differing residual value developments in Europe, Tom Geggus looks at bi-directional EV charging and Phil Curry suggests the CES 2021 cancellation will have more of an impact on the industry than any other show. Plus a round-up of some of the latest developments in electrification.

https://soundcloud.com/autovistagroup/three-speeds-of-lockdown-emergence

You can also listen and subscribe to receive further episodes direct to your mobile device on Apple, Spotify and Google Podcasts

Schwacke Insights Juli 2020 – monatliche Kennzahlen im Überblick

Der Juni zeigt weitere Erholungstendenzen von den Shutdown-Monaten und weist mit einem leicht gestiegenen Preisindex in eine gute Richtung. Auch die Besitzumschreibungen haben im letzten Monat ein überraschendes Plus gegenüber dem Vorjahr ausgewiesen.

Zwar ist das hinterlassene Umsatzloch noch groß und die Sorge vor einem Preiskampf im Herbst und Winter längst nicht vom Tisch. Aber Kunden kaufen derzeit und zahlen scheinbar angemessene Preise. Selbst die ohne Corona stark im Abschwung befindlichen Plug-In Hybride und Elektromobile gönnten sich eine Verschnaufpause.

Die ab Juni geltende Innovationsprämie und die mit der Mehrwertsteuersenkung einhergehenden verstärkten Neuwagennachlässe werden das GW-Preisniveau mittelfristig nach unten drücken. Auch bei den Schnelldrehern kehrt langsam Normalität ein, allerdings sind Modelle unter 40 Standtagen immer noch selten.