BERLIN, March 17 (Reuters) – Volkswagen (VOWG_p.DE) plans to invest in mines to bring down the cost of battery cells, meet half of its own demand and sell to third-party customers, the carmaker’s board member in charge of technology said.
Europe’s biggest carmaker wants its battery unit PowerCo to become a global battery supplier, not just produce for Volkswagen’s own needs, Thomas Schmall told Reuters in an interview.
PowerCo will start by delivering cells to Ford (F.N) for the 1.2 million vehicles the U.S. carmaker is building in Europe on Volkswagen’s electric MEB platform, he said.
Long-term, Volkswagen plans to build enough cells to meet half its global battery needs, with most production capacity located in Europe and North America, according to Schmall.
“The bottleneck for raw materials is mining capacity – that’s why we need to invest in mines directly,” he said.
The carmaker was partnering on supply deals with mining companies in Canada, where it will build its first North American battery plant.
Schmall declined to comment on further locations under consideration or where or when Volkswagen might invest directly in mines, saying the company would not disclose that information until the market was more settled.
“In future, there will be a select number of battery standards. Through our large volume and third-party sales business, we want to be one of those standards,” he said.
AMBITIOUS ROADMAP
Making or sourcing batteries at a reasonable cost is a key challenge for carmakers like Volkswagen, Tesla (TSLA.O) and Stellantis (STLAM.MI) as they seek to make electric vehicles (EVs) affordable.
Only Tesla has pledged more investment into battery production than Volkswagen, according to a Reuters analysis – though even the U.S. EV maker is struggling to ramp up production and is recruiting Asian suppliers to help.
Few carmakers have disclosed direct stakes in mines, but many have struck deals with producers to source materials like lithium, nickel and cobalt and pass them onto their battery suppliers.
PowerCo, set up last year, is targeting 20 billion euros ($21.22 billion) in annual sales by 2030.
It’s an ambitious roadmap for a unit not yet producing at scale. Production will start in 2025 at PowerCo’s plant in Salzgitter, Germany, 2026 in Valencia, Spain and 2027 in Ontario, Canada.
Still, Schmall is confident the carmaker can expand quickly – and must do so if it wants to build an affordable EV, in which 40% of the costs come from the battery.
Volkswagen released on Thursday the details of a 25,000-euro EV it aims to sell in Europe from 2025.
China’s BYD, which also produces batteries, is far ahead of Volkswagen in the affordable EV race and outsold the German carmaker for the second time in four months in China in February.
REDUCING COSTS
In Volkswagen’s 180-billion-euro five year spending plan, up to 15 billion is earmarked for its three announced battery plants and some raw material sourcing.
The carmaker has so far nailed down raw material supply until 2026 – by which time the German and Spanish plants will be in operation – and will decide in the next few months how to meet its demand from then on, Schmall said in the interview.
It has also ordered some $14 billion in batteries from Northvolt’s Swedish plant.
“Bringing down battery costs further is a challenge,” Schmall said. “We’re using all the instruments with PowerCo.”
Asian producers like CATL, LG Chem and Samsung SDI dominate global cell production, with almost half of planned battery cell capacity in Europe by Asian players.
Half the staff at Volkswagen’s PowerCo are industry veterans from Asia, Schmall said, enabling the battery unit to enter the industry at the top of the learning curve.
($1 = 0.9427 euros)
Reporting by Victoria Waldersee; Editing by Susan Fenton
Our Standards: The Thomson Reuters Trust Principles.
DUNTON, England, March 6 (Reuters) – Ford Motor Co’s (F.N) push to use reams of data generated by its vans and trucks – from engines to oil filters or brake pads – to attract more customers in the European and U.S. commercial vehicle market plays out on a 9-metre-long (30 ft) screen at its UK headquarters in Dunton east of London.
During a recent visit by Reuters, that screen showed real-time data from 114,000 vans in Britain so far covered by Ford’s FORDLiive monthly subscription service.
Ford employees were focused on the 98.3% of the vans that were in service – and of those, roughly 8% in need of repairs fairly soon or urgently – but concentrated even more so on the 1.7% vehicles out of action.
The U.S. automaker tracks 4,000 data points via modems it has installed in all commercial vehicles since 2019 – and can warn paying customers of engine problems and basics such as brake pad wear, low oil or diesel additives that are cheap to maintain proactively but expensive to fix if not addressed.
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The automaker has connected all of its UK dealers to its system, so it can arrange repairs and have parts ready for vans before they arrive at a dealership.
Ford, which leads the commercial vehicle market in both Europe and the United States, launched the system in 2021. Hans Schep, European head of Ford Pro, the company’s commercial vehicle business, said it is already close to hitting long-term targets of increasing vehicle “up time” by up to 60%.
Ford estimates that downtime, when a van is out of action, costs an average of 600 pounds ($724) daily per van.
“This has already been a major game-changer,” Schep said.
After a successful test run in Britain, Ford is also rolling out the FORDLiive service in mainland Europe and the United States. The automaker has focused more on its profitable Ford Pro business in Europe than lower-margin mass-market passenger cars.
Ford recently announced engineering job cuts in Europe, but is still hiring software experts for its data services.
Data is a huge battleground for commercial vehicle makers and competition will only intensify with electric models, which are essentially computers on wheels.
Using data to show where vans are, how they consume fuel, how drivers use or misuse them, whether they can skip an oil change, but above all avoiding downtime is becoming as important as the vehicles themselves.
There is also an ongoing fight pitting insurers, leasing companies and car repair shops against carmakers in the European Union over access to connected car data and the vast potential revenue it could generate.
“We plan to grow our leadership position,” said Ted Cannis, chief executive of Ford Pro. “We are going to have many, many more markets that we were not even previously in.”
EASING THE ELECTRIC JOURNEY
Electric vans provide far more data points for Ford and its rivals to work with – including tracking how much range they have left and providing easy, comprehensive charging solutions.
Ford’s Schep said providing that data is crucial for van fleets because according to the automaker’s research, 60% of its corporate customers “are really worried about the journey to electric.”
The UK operations of DHL Express, part of the Deutsche Post DHL Group (DPWGn.DE), has 270 electric Ford E Transit vans with firm orders for 120 more, and is signing up for FORDLiive.
Fleet director Richard Crook said aside from monitoring those vans’ batteries, he wants to tap Ford’s predictive maintenance capabilities.
“We need to get ahead of things and plan maintenance schedules because the vehicle is actually telling you ‘I have a problem,'” Crook said.
Ford rival General Motors Co (GM.N) has also rolled out telematics services including “in-vehicle coaching,” where a voice nicknamed “Karen in the vehicle” coaches drivers against excessive braking, speeding or other bad habits.
Michelle Calloway, director of OnStar Business Solutions at GM, said “Karen” cut fuel use by 30% in 30 days in one customer’s fleet.
“Those are impactful savings scaled across a large fleet,” Calloway said.
Starting with 2024 models, GM will provide a range of OnStar data services free for fleet vehicles. Ed Peper, who heads GM’s fleet sales, said once customers try those services, they are likely to pay for more.
Italian truck, van and bus maker Iveco Group NV (IVG.MI) has around 150,000 connected vehicles using telematics services and has seen a 30% increase in uptime, plus a “single-digit percent” drop in warranty costs so far, said chief technology officer Marco Liccardo.
Liccardo estimates subscription services will generate 40% to 50% of commercial vehicle makers’ profits by 2030 and help franchise dealers survive the shift to electric with fewer parts to service.
“Data will be the oxygen to do that,” Liccardo said.
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Reporting by Nick Carey in Dunton, England
Additional reporting by Giulio Piovaccari in Milan
Editing by Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
LONDON, Jan 11 (Reuters) – Self-driving software startup Oxbotica has raised $140 million from investors to speed deployment of autonomous vehicles (AVs) in areas including heavy industry, ports and airports.
The Series C round includes funding from new investors including Japanese insurer Aioi Nissay Dowa Insurance, the venture capital arm of software company Trimble (TRMB.O) and the venture capital arm of Japanese oil refiner Eneos (5020.T).
It also includes fresh funding from existing investors including Tencent (0700.HK) and the venture capital arm of BP (BP.L), as well as Kiko Ventures, the clean tech investment platform of IP Group (IPO.L) and Oxbotica’s first institutional investor.
Oxbotica has now raised about $225 million in total and the company said that additional investors are expected to sign up before the funding round closes in a few months.
The startup is working on specific applications for strategic investors. These include AVs for remote BP locations, a people mover for German auto parts supplier ZF Friedrichshafen and for last-mile delivery by British online supermarket and technology group Ocado (OCDO.L).
The clamour for robotaxi applications, however, appears to have subsided.
Ford Motor Co (F.N) said in October that it was winding down its Argo AI self-driving business, saying robotaxis were still too far off to continue investing.
Oxbotica Chief Executive Gavin Jackson told Reuters that AVs using the startup’s software will enter service in 2023 in the energy and agriculture sectors, plus private truck yards, followed by fixed-route passenger shuttles in 2024.
Once regulations catch up with the industry, the company will start running tests on limited routes for Ocado in 2025, Jackson said.
He said the company has customers in mining, construction, agriculture, airports, ports and the logistics sector, all of which want safe and reliable AVs.
“These are the applications that matter,” Jackson said. “The proceeds (of this funding round) will really accelerate deployment for our commercial customers.”
Reporting by Nick Carey
Editing by David Goodman
Our Standards: The Thomson Reuters Trust Principles.
SCRANTON — John Basalyga bought another commercial property in the city, a former early-1900s auto dealership building and a neighboring lot in the 900 block of North Washington Avenue.
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TOKYO, Dec 16 (Reuters) – Japan will extend tax breaks on low-emission cars and seek to shift its massive household savings into investment in the government’s annual tax code revision to be approved on Friday.
The government will also raise corporate, income and tobacco taxes to pay for a scheduled doubling of Japan’s defence spending to 2% of gross domestic product (GDP) by 2027 – a response to an increasingly assertive China and North Korea’s missile launches.
Below are key changes under the revised tax code, according to a draft of the document obtained by Reuters. The revised code will take effect in the next fiscal year beginning in April 2023, upon approval by parliament.
AUTOMOBILE TAX
Japan will extend tax breaks on low-emission cars past the end of 2023, while increasing the required level of emissions reduction for eligible vehicles in several stages from 2024. The revision, to remain in place until April 2026, will cover half of all new automobiles.
The government will also exclude gasoline-powered cars beginning in 2025 from tax cuts that were granted to the automobile sector to help it overcome supply constraints.
‘NEW CAPITALISM’
Under his flagship “new capitalism” initiative aimed at redistributing income, Prime Minister Fumio Kishida has sought to shift Japan’s 2,000 trillion yen ($14.52 trillion) in household assets away from savings and into investment.
As part of this initiative, the government will make permanent a programme that offers tax breaks for households’ stock investments. Specifically, it will triple the limit on investments eligible for tax breaks from 2024.
CAPITAL GAINS TAX
The capital gains tax rate is uniform across income brackets in Japan, unlike the income tax, which is progressive.
As part of efforts to narrow income disparities, the government will apply higher capital gains tax rates for households with annual income above 3 billion yen.
START-UPS
Kishida’s administration has stressed the need to nurture more start-ups that could give a boost to Japan’s anaemic economic growth.
The government will expand preferential tax breaks for retail investors when they buy and sell stocks in start-up firms.
Profits from the sale of start-up shares will be exempt from income tax if they are reinvested in other venture businesses.
($1 = 137.7800 yen)
Reporting by Tetsushi Kajimoto; Editing by Edmund Klamann
Our Standards: The Thomson Reuters Trust Principles.
SHANGHAI/HONG KONG, Dec 12 (Reuters) – For more than a decade, Chinese developers’ debt-fuelled construction boom enriched the country’s shadow banks, who were eager to capitalise on the needs of an industry desperate for credit and too risky for traditional lenders.
Now, in the wake of a government clampdown on real estate firms’ debt binge, that credit demand has collapsed – and so too has the single biggest revenue stream for shadow banks, also known as trust firms.
China’s shadow banking industry – worth about $3 trillion, roughly the size of Britain’s economy – is scrambling for new business, including direct investment in companies, family offices and asset management.
It is also shrinking, with once-well-paid employees leaving for other jobs after scavenging for new deals. The industry’s plight is a sharp contrast to China’s main street financial firms, which the crisis has not yet seriously affected.
“Everyone was eating a mouthful of rice, surviving another day,” said Jason Hao, who left his job this year at a Shanghai trust firm after his pay plunged from as much as 4 million yuan ($570,000) a year to about 240,000 yuan ($34,000).
He is now working at an asset management company.
Data from industry-tracking website Yanglee.com shows 1,483 real estate-related trust products were sold in 2022 through the end of September, down 69.7% from 4,891 during the same period last year.
The value of the 2022 deals was 117.2 billion yuan, down 77.9% from 531.3 billion yuan. Real estate products accounted for 8.7% of all trust products in September, compared with about 30% in the same month the last two years.
The National Audit Office and China’s banking regulator have both been reviewing trust firm accounts and deals this year for risk, said three people with knowledge of the matter.
The National Audit Office and the CBIRC did not respond to requests for comment.
In an internal meeting in October, an executive at Shanghai Trust, a state-owned firm that once focussed on property, said revenue was down by almost half this year compared with the year before, according to two people with direct knowledge of the meeting.
The firm plans to focus on asset management and family offices to shore up its finances while pivoting away from lending to developers, once its core business, one of the people said.
Shanghai Trust did not respond to requests for comment.
The top priority for all trust companies now is “how to transition, what will let you survive,” said another trust firm employee, who like the other current employees interviewed for this article declined to be named because of the sensitivity of the matter.
CONTAGION RISK
Trust firms were dubbed “shadow banks” because of how they operated outside many of the rules that govern commercial banks. Banks in China sell wealth management products, the proceeds of which are channelled by trust firms to property developers and other sectors that are unable to tap bank funding directly.
Because of the risk, shadow banks could charge interest rates of up to 18%, far higher than the typical 2% to 6% seen at banks at the height of the boom.
Concerns about outsized exposure to property developers have grown this year as the embattled sector in the world’s second-largest economy has slowed rapidly.
Beijing has stepped up support in recent weeks to undo a liquidity squeeze that has stifled the real estate market, which makes up a quarter of the Chinese economy and has been a key driver of growth.
OUT OF OPTIONS
At the trust unit of state-owned China Construction Bank (CCB) and Zhongrong International Trust, previously one of China’s largest shadow bankers, investing like private equity and venture capital funds has become more common, two people with direct knowledge of the companies said.
CCB Trust wants to invest in leading companies in niche fields; it recently invested in Beijing Tianyishangjia New Material Corp, which manufacturers materials used in train brakes, said one person who works at the company.
Zhongrong International Trust has been working with local governments, including Qingdao provincial authorities, to source early stage deals in intelligent manufacturing, an executive there said.
Jiangxi-based Avic Trust has been investing in waste-processing firms, including funding photovoltaic power stations that it then rents out, said a person with direct knowledge.
CCB Trust, Zhongrong International Trust and Avic Trust
did not respond to requests for comment.
In some cases, trust firms are buying projects from struggling developers and hiring new managers to recoup their losses, according to corporate records and three people in trust firms who are aware of such acquisitions.
Ping An Trust, Zhongrong International Trust, Everbright Xinglong Trust and Minmetals International Trust have all bought project companies from struggling developers in the last few months, corporate records and company announcements showed.
Ping An Trust, Zhongrong International Trust, Everbright Xinglong Trust
and Minmetals International Trust did not respond to requests for comment.
For Hao and other former trust employees, the companies’ search for stability feels familiar.
“My situation now is better than it was when I left the trust, but will never be as good as it was at the height of the boom when I was there,” Hao said.
($1 = 6.9905 Chinese yuan renminbi)
Reporting Engen Tham in Shanghai, Clare Jim and Julie Zhu in Hong Kong; Editing by Sumeet Chatterjee and Gerry Doyle
Our Standards: The Thomson Reuters Trust Principles.
WASHINGTON, Dec 6 (Reuters) – Many automakers and the South Korean government are urging the Biden administration to tap a commercial electric vehicle tax credit to boost consumer EV access, a plan that could help ease concerns over a climate bill approved in Congress.
The $430 billion U.S. Inflation Reduction Act (IRA) passed in August ended $7,500 consumer tax credits for electric vehicles assembled outside North America, sparking anger from South Korea, the European Union, Japan and others.
Some automakers say a lesser noticed IRA provision for “commercial clean vehicles” could be used to boost EV manufacturers and address foreign concerns.
Rivian Automotive (RIVN.O), Hyundai Motor (005380.KS) and Kia Corp (000270.KS) among others want the administration to let consumer vehicle leasing qualify for the commercial EV tax credit that could reduce monthly lease payments.
The South Korean government in comments made public Tuesday urged Treasury “interpret ‘commercial clean vehicles’ broadly” to include rental cars, leased vehicles and vehicles purchased for use in Uber (UBER.N) or Lyft (LYFT.O) rideshare fleets.
South Korea also asked Treasury not to impose any budget restrictions on commercial vehicle tax credits through 2025.
Hyundai and Kia want Treasury to allow people leasing EVs to be able to qualify for up to a $4,000 tax credit for used EVs if they buy vehicles when leases expire.
The IRA consumer EV tax credit imposes significant battery minerals and component sourcing restrictions, sets income and price caps for qualifying vehicles and seeks to phaseout Chinese battery minerals or components.
The commercial credit does not have the same sourcing or pricing restrictions but has an “incremental cost” eligibility test that might prove complex. Some automakers want Treasury to make it easier to ensure most commercial light-duty vehicles qualify for $7,500 tax credits.
President Joe Biden said last week “there are tweaks that we can make that can fundamentally make it easier for European countries to participate.”
Some automakers oppose using the commercial credit for consumer sales.
Toyota Motor Corp (7203.T) said “the lack of criteria to qualify for (commercial credits) could undermine the IRA’s goals to expand domestic production of EV batteries and maintain America’s energy independence.”
Tesla (TSLA.O)said commercial credits “should apply exclusively for commercial end-users” and the consumer tax credit “should apply exclusively for individual end-users.”
General Motors (GM.N) Chief Executive Mary Barra told Reuters on the sidelines of an event Monday that addressing foreign concerns about the credit is “more complicated than just one thing to solve it” and added “sticking to the intent of the bill” drafted by Congress “is important.”
Reporting by David Shepardson; Editing by Lincoln Feast.
Our Standards: The Thomson Reuters Trust Principles.
Nov 22 (Reuters) – Japan’s Mazda Motor Corp (7261.T) will invest about 1.5 trillion yen ($10.58 billion)to electrify its vehicles, including boosting production of battery EVs, and aims to increase their share in the company’s overall global car sales by 2030.
Mazda’s senior managing executive officer Akira Koga said the investment would be made along with its “partners”, without elaborating, and will be used for research and development. The news was first reported by the Nikkei business daily.
The ratio of electric vehicles (EVs) in global sales is expected to rise to between 25 percent and 40 percent as of 2030, from 25% previously, the company said in a statement.
Mazda CEO Akira Marumoto also told a news conference that the company had reached an agreement with Envision AESC, the battery business of Chinese renewable energy group Envision, to procure batteries for EVs produced in Japan.
The automaker also said it had agreed to work with seven companies, including electric component manufacturer Rohm Co (6963.T), to jointly develop and produce electric drive units.
Automakers worldwide are spending billions of dollars to ramp up battery and EV production in the face of tougher environmental regulations.
In August, Toyota Motor Corp (7203.T) said it would invest up to 730 billion yen in Japan and the United States to make batteries for fully electric vehicles as opposed to hybrid gasoline-electric cars like the Prius.
Its rival Honda Motor Co (7267.T) also said in the same month it would build a new $4.4 billion lithium-ion battery plant for EVs in the United States with Korean battery supplier LG Energy Solution Ltd (373220.KS).
Mazda is aiming for about 4.5 trillion yen in net sales for the business year ending March 2026, a jump of about 45% from the financial year ending March 2022, the company said.
Shoichi Matsumoto, Envision AESC chief executive, told Reuters last month it was in talks with automakers in Japan, Europe, the United States and China for new supply deals.
Envision AESC, based in Japan, was originally established as a joint venture between Nissan Motor Co (7201.T), NEC Corp (6701.T) and its subsidiary NEC TOKIN Corporation.
($1 = 141.7400 yen)
($1 = 141.7500 yen)
Reporting by Tokyo Newsroom; Editing by Christopher Cushing, Kenneth Maxwell and Ana Nicolaci da Costa
Our Standards: The Thomson Reuters Trust Principles.
Nov 8 (Reuters) – Electric-truck maker Nikola Corp (NKLA.O) said on Tuesday it will partner with charging company ChargePoint Holdings (CHPT.N) to speed up the deployment of the required infrastructure for commercial EVs.
Many fleet operators are inclined to use more electric vehicles as they aim to reduce carbon emissions and meet sustainability targets, however, the lack of proper infrastructure has been a deterrent.
Nikola said with access to ChargePoint’s products it will be able to reduce the time required to build infrastructure projects that will help its customers manage charging of their vehicles, plan schedules and streamline delivery routes.
The companies, however, declined to provide the financial details of the partnership.
The announcement of the deal comes a week after Nikola said that scaling up charging infrastructure for fleets was a hurdle, exacerbated by end-customers’ reluctance to spend capital for the development.
Nikola expects such challenges to continue and limit uptake of its Tre battery electric semi truck.
It said the company would miss its target of delivering at least 300 vehicles this year and declined to issue fresh forecasts, citing macroeconomic uncertainty clouding visibility of its future.
Phoenix, Arizona-based Nikola has placed orders for ChargePoint’s fast charging solution, E-Skids, and deliveries are expected to begin as early as this month.
(This story has been refiled to remove extraneous text from headline)
Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli
Our Standards: The Thomson Reuters Trust Principles.
ZF Commercial Vehicle Control Systems India reported a consolidated net profit of Rs 68.64 crore in Q2 FY23, up by 112.8% from Rs 32.25 crore in Q2 FY22.
Net sales rose by 28.6% YoY to Rs 792.83 crore during the quarter.
Total expenses increased by 23.4% to Rs 714.73 crore in Q2 FY23 over Q2 FY22, due to higher raw material costs (up 29.5% YoY), higher employee expenses (up 11.5% YoY) and higher other expenses (up 10.6% YoY). Finance costs zoomed to Rs 2.13 crore in Q2 FY23 from Rs 0.44 crore in Q2 FY22.
Profit before tax in Q2 FY23 stood at Rs 90.30 crore, which is higher by 100.9% as compared with Rs 44.95 crore recorded in the same period last year.
ZF Commercial Vehicle Control Systems India offers a ‘one-stop-shop’ for commercial vehicle industry. It is India’s market leader for advanced braking systems, conventional braking products and related air assisted technologies and systems in India. In March this year, ZF secured all required approvals for ZF Commercial Vehicle Control Systems India to become the new name for WABCO India. WABCO became part of the ZF Group in May 2020 following ZF’s successful acquisition of the company.
The scrip shed 0.26% to currently trade at Rs 9892.15 on the BSE.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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