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.
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Reporting by Victoria Waldersee; Editing by Susan Fenton
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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
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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
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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.
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Reporting by Tetsushi Kajimoto; Editing by Edmund Klamann
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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.
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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.
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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
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MEXICO CITY, Oct 27 (Reuters) – Auto manufacturing companies Volkswagen and Continental both pledged major investments in Mexico on Thursday totaling nearly $1 billion, one of the biggest sums for the sector to be announced in a single day during the current government.
Volkswagen (VOWG_p.DE) said it will invest $763.5 million between 2022 and 2025 at its complex in the central state of Puebla, one of Volkswagen’s largest facilities globally, to build a new paint plant and start production of a new gasoline-powered car.
The company, which currently makes Jetta, Taos and Tiguan models at the plant, did not detail which car it would add to the line-up.
It added that the paint plant would be powered by wind turbines, becoming the carmaker’s first to run exclusively on clean energy
.
Earlier in the day, fellow German auto parts maker Continental AG (CONG.DE) said it would invest around 210 million euros ($209.16 million) to open a new automotive electronics factory and expand capacity at an existing brake components plant in the central state of Guanajuato.
Both projects are nearly completed, with openings expected early next year, it said in a statement.
Continental said it expects to generate more than 1,500 new jobs over the next three years through the expansion.
Among the other large auto companies pumping money into the country is General Motors, which last year announced a $1 billion investment at its Ramos Arizpe complex, where it will begin making electric vehicles in 2023.
Nissan in May announced a $700 million investment over the next three years.
Jeep maker Stellantis is also reported to be looking to invest billions to make electric vehicles in Mexico, while Tesla chief executive Elon Musk is considering investing in the north of the country, sources told Reuters this week.
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Reporting by Isabel Woodford; Editing by Christian Plumb and Jonathan Oatis
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TOKYO, Oct 11 (Reuters) – Nissan Motor Co Ltd (7201.T) will hand over its business in Russia to a state-owned entity for 1 euro ($0.97), it said on Tuesday, taking a loss of around $687 million in the latest costly exit from the country by a global company.
The Japanese automaker transfer its shares in Nissan Manufacturing Russia LLC to state-owned NAMI, it said. The deal will give Nissan the right to buy back the business within six years, Russia’s industry and trade ministry said.
The deal makes Nissan the latest major company to leave Russia since Moscow sent tens of thousands of troops into Ukraine in February. It also mirrors a move by Nissan’s top shareholder, French automaker Renault (RENA.PA), which sold its majority stake in Russian carmaker Avtovaz (AVAZI_p.MM) to a Russian investor in May.
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The sale to NAMI will include Nissan’s production and research facilities in St Petersburg as well as its sales and marketing centre in Moscow, the ministry said.
Nissan said it expected an extraordinary loss of around 100 billion yen ($687 million), but maintained its earnings forecast for the financial year ending in March.
Renault, which owns 43% of Nissan, estimated the decision by its Japanese partner would lead to a 331 million euro hit to its net income for the second half of 2022.
Nissan had suspended production at its St. Petersburg plant in March due to supply chain disruptions. Since then, the company and its local unit had been monitoring the situation, it said. But there was “no visibility” of a change to the external environment, Nissan said, prompting it to decide to exit.
Junior alliance partner Mitsubishi Motors Corp (7211.T) is also considering exiting Russia, the Nikkei newspaper said. A spokesperson for Mitsubishi said nothing had been decided.
The exit comes as Nissan has embarked on a major shift in its relationship with Renault. The two said on Monday they were in talks about the future of their alliance, including Nissan considering investing in a new electric vehicle venture by Renault.
Those talks, which could prompt the biggest reset in the alliance since the 2018 arrest of long-time executive Carlos Ghosn, have also included the possibility of Renault selling some of its controlling stake in Nissan, two people with knowledge of the talks have told Reuters.
Renault reportedly sold its stake in Avtovaz for one rouble ($0.02).
The Nissan deal was “of great significance for the industry,” Russia’s Industry and Trade Minister Denis Manturov said in a statement.
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Reporting by Gleb Stolyarov, Caleb Davis and Satoshi Sugiyama; Writing by Alexander Marrow and David Dolan; Editing by Louise Heavens and Mark Potter
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DETROIT, Oct 11 (Reuters) – General Motors Co (GM.N) is expanding beyond car making, with plans to offer energy storage and management services to residential and commercial customers through its new GM Energy unit in a move that puts it in even greater competition with Tesla Inc (TSLA.O).
GM Energy will bundle the existing Ultium Charge 360 public charging service with two new units, Ultium Home and Ultium Commercial, that will offer stationary storage batteries, as well as solar panels and hydrogen fuel cells, the company said on Tuesday.
“We’re getting into the entire ecosystem of energy management,” GM executive Travis Hester said in an interview.
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“Our competition in this space on the (automaker) side is really only Tesla, which is a strong energy management company,” added Hester, who heads EV Growth Operations. “There are a lot of analogies you can draw with Tesla.”
Tesla’s seven-year-old energy generation and storage business, which includes solar panels and stationary batteries, lost $129 million last year on revenues of $2.8 billion.
Hester said GM sees a total addressable market of $120 billion to $150 billion in energy storage and management. He declined to provide a revenue projection for GM Energy.
The Ultium Home service will offer stationary wall boxes, similar to Tesla’s Powerwall units, with sales and installation scheduled to start in late 2023, timed to the launch of the first Chevrolet Silverado EV trucks aimed at private customers.
As Ford Motor Co (F.N) does with its F-150 Lightning, the Silverado EV will have bi-directional capability, which means it will be able to feed electricity back into the home during a power outage.
GM’s commercial service will offer similar capability to businesses, through larger stationary storage units as well as microgrids connected to hydrogen fuel cells developed by the automaker. Businesses in turn will be able to sell energy back to utilities during peak power consumption periods.
GM will team with SunPower Corp (SPWR.O) to provide customers with solar panels to enhance energy generation.
“This is a new space for us,” Hester said. “We have core competencies in vehicles and batteries, in cell chemistry and scale manufacturing. Put that together with our expertise in fuel cells, our dealer network, what we’ve been doing with OnStar and connectivity, and it seems like an obvious step for us.”
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Reporting by Paul Lienert in Detroit
Editing by Marguerita Choy
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