Author: CNBC Online news

BMW set to double electric vehicle sales by 2021

BMW's Vision M Next concept carBMWBMW is on track to double its electric and hybrid vehicle sales by 2021, the company said Tuesday as it unveiled its newest electric car.
The German automaker announced that it will meet its target of marketing 25 electrified vehicle models by 2023 — two years earlier than expected. More than half of those models will be fully electric.
Sales of BMW's electric models are expected to increase by 30% every year between now and 2025, the carmaker also added.
BMW also revealed the Vision M Next, an electrified concept car, which was complete with a prototype of “intelligent technology to transform (owners) into the ultimate driver.”
Unveiling the sportscar at its #NEXTGen show in Munich, BMW said the car gave a glimpse of how driving may look in the future — offering people the choice between being driven by technology or doing the driving themselves.

The Vision M Next was complete with prototypes of BMW's “ease” and “boost” features, which will be incorporated into its autonomous vehicles. The “ease” function is selected when the vehicle assumes driving duties, allowing passengers to relax, talk or even watch a movie. Meanwhile, “boost” allows drivers to control the car themselves.
By the end of 2019, BMW is aiming to have more than half a million hybrid or fully-electric vehicles on the road. This year will see the company start production of the fully-electric Mini and BMW iX3.
From 2020, BMW plug-in hybrids will also feature a new eDrive zones function — smart tech that recognizes green zones in cities that are reserved for emission-free driving. Cars fitted with the function will automatically behave as a fully-electric vehicle when driving within those areas.
“We are firmly committed to emission-free driving,” said Harald Kruger, chairman of BMW's board, in a press release Tuesday.
“Our vision is clear: sustainable mobility, produced in a sustainable manner. We have set ourselves the goal of only buying electricity from renewable energy sources for all our locations worldwide from 2020,” he added.

French automaker Renault is ‘confident’ about the China market despite falling car sales

VIDEO3:0603:06Electric vehicles are a priority for us in China: RenaultStreet Signs AsiaChina's auto industry is struggling to sell new cars but French automaker Renault is confident about the market's long-term prospects, according to a senior executive.
The market downtrend started in the middle of last year and Renault expects a full-year decline of about 5% in sales, according to Francois Provost, senior vice president, chairman of China region at the company.
“We remain confident about the long-term trend for the Chinese market,” he told CNBC's Geoff Cutmore and Arjun Kharpal at the World Economic Forum in Dalian, China.
Provost explained it was hard to determine the key reason for the sales decline but conversations with Renault dealers and salesmen indicated that customers were hesitating to buy new cars.
“I cannot explain in details the root cause but, for sure, our customers are hesitating to buy, and this explains most of the volume decrease,” he said, adding that it is likely that much of the uncertainty comes from the ongoing trade tensions between the United States and China.
Last month, China reported the worst-ever monthly sales drop that deepened worries over the economic slowdown in the world's second largest economy and the impact of the trade war with Washington.
Auto sales declined 16.4% in May from the same month a year earlier, according to the China Association of Automobile Manufacturers, Reuters reported. That was the 11th consecutive month of decline, according to the news wire.
U.S. President Donald Trump met his Chinese counterpart Xi Jinping on Saturday during the Group of 20 summit in Japan, where the two leaders agreed to halt further tariffs on each other's goods, and return to the negotiating table.
Provost said he hoped that move would boost consumer confidence in the Chinese auto market.
Still, Renault, which has three joint ventures in China, plans to sell 550,000 vehicles in China in 2022. Last year, the company said it sold more than 216,000 vehicles in the country — about three times more than its 2017 sales.
A big priority for the French automaker in China is the electric vehicles market.
Favorable government policies have given pure battery-powered vehicles as well as hybrid cars an advantage despite an overall slowdown in auto sales. Last year, electric car sales in China jumped almost 62% to 1.3 million vehicles. For 2019, it is predicted that electric vehicle sales could hit 1.6 million.
Provost said that the electric vehicle market will “grow a lot in the coming years” due to a combination of strong government support as well as growing confidence among customers toward those types of cars.

Ford cutting another 12,000 European jobs as restructuring continues

An employee works on an engine production line at a Ford factory on January 13, 2015Carl Court | Getty Images News | Getty ImagesFord is cutting 12,000 jobs at its operations across Europe by the end of 2020, the automaker said Thursday, continuing a broad, global restructuring program that already has cost about 2,300 jobs in the U.S.
The latest move comes as Ford prepares to close or sell off six of its 24 European plants, including an engine plant in Wales, a transmission factory in France and three facilities in Russia. It also plans to cut production and drop shifts at assembly plants in Germany and Spain.
Its stock rose more than 2% in morning trading.
The company's global workforce of 199,000 employees as of Dec. 31, 53,000 of them in Europe, will be notably smaller next year. The European cutbacks were widely expected and follow on other layoffs announced earlier this year. They come as the Detroit-based automaker struggles to reverse years of losses in the U.S. Since Jim Hackett was named CEO two years ago, Ford has launched a number of worldwide cost-savings measures, but company officials say the cuts announced Thursday also reflect a planned shift from conventional, gas and diesel-powered vehicles to electric and other battery-powered cars.
“Ford will be a more targeted business in Europe, consistent with the company's global redesign, generating higher returns through our focus on customer needs and a lean structure,” Stuart Rowley, president of Ford of Europe, said in a statement. “Implementing our new strategy quickly enables us to invest and grow our leading commercial vehicle business and provide customers with more electrified vehicles, SUVs, exciting performance derivatives and iconic imported models.”
While a large share of the new European job cuts will target hourly employees, Ford last month said it was eliminating 7,000 white-collar jobs, including 2,300 in the United States. At that time, CEO Hackett hinted there would likely be more to follow, noting, “We still have a lot of work to do in the coming months.”
That includes more than just job cuts, however. Since being named CEO following a management shake-up in May 2017, Hackett has ordered a number of major changes, among other things dropping all U.S. passenger car models — but for the Mustang. The shift to sport and crossover-utility vehicles has extended to other markets, including Europe and China, though not to quite the same degree.
Jim Hackett, FordSource: Ford Motor Company Ford has been trying to right-size operations around the world, especially in weak markets like Europe and Latin America, Joe Hinrichs, the president of the company's automotive operations, told CNBC earlier this year.
But it is not going as far as its Detroit rival, General Motors, which shut down operations in Russia, India and several other markets, while selling off its European Opel subsidiary to France's PSA Group.
Investors seem to like Hackett's changes so far. While the company's stock is still down 11% over the last 12 months, its gained almost 33% since Jan. 1.
According to Ford's statement, it will reorganize European operations into three “customer-focused” groups that will focus on passenger vehicles, imports — such as the American-made Mustang — and commercial vehicles. The latter unit will play a central role in the new joint venture Ford announced with German automaker Volkswagen in January.
Ford also is negotiating other possible alliances on autonomous and electric vehicles with VW that could be announced in a matter of weeks, according to several company executives.
Ford was an early entrant into the battery-car field but has since fallen behind competitors like Tesla, GM and VW, the latter company planning to unleash as many as 50 all-electric models by the middle of the coming decade.
Automakers face increasing pressure from regulators around the world to shift to battery-based vehicles, and Ford plans to unveil its first long-range all-electric model, a crossover influenced by the Mustang, later this year.
“Our future is rooted in electrification,” said Ford's Rowley. “We are electrifying across our portfolio, providing all of our customers with more accessible vehicle options that are fun to drive, have improved fuel economy and are better for our environment.”
Ford is just one of a number of automakers who have announced major cutbacks in recent months. GM announced in November plans to close three assembly plants and two parts factories in North America, eliminating 14,000 jobs. In March, VW said it would cut 7,000 jobs on top of previously announced reductions.
The moves come at a critical time for the industry, according to a new study by the Detroit-based consultancy, AlixPartners. Sales in the U.S. and China are in a slump and European demand is stagnant, at best, it noted.
At the same time, manufacturers are being forced to invest heavily in the development of autonomous and electrified vehicles. They face a “profit desert,” warned Mark Wakefield, head of the firm's automotive practice, and must take steps to cut costs.

Tesla has a secret lab trying to build its own battery cells to reduce dependence on Panasonic

SpaceX owner and Tesla CEO Elon Musk gestures during a conversation at the E3 gaming convention in Los Angeles, June 13, 2019.Mike Blake | ReutersTesla is developing the means to manufacture its own battery cells, according to five current and recent employees, something that the electric vehicle maker has relied on Panasonic to do since the companies signed an extensive partnership deal in 2014.
The move could help Tesla offer cheaper, higher performance electric-vehicles than it does today, without having to pay or share data and resources with outside vendors or partners. The battery pack and battery cells are the main cost component in an electric vehicle, according to research by IHS Markit.
The company has been “battery-constrained” in the past, CEO Elon Musk acknowledged at the company's annual shareholders meeting earlier in June. That means a lack of batteries limited Tesla's production and sales of electric vehicles and energy storage systems (Powerwalls and Powerpacks).
Making its own battery cells would also fit with Musk's general ambition to make Tesla as “vertically integrated” as possible, which means developing, manufacturing and selling everything it can — even its own enterprise software.
But manufacturing cells at high volume would be another challenge for a company that recently implemented cost-cutting measures and is still struggling to perfect its high-volume vehicle production.
Tesla and Panasonic did not respond to requests for comment.
Skunkworks lab on Kato roadTesla employees conduct some of their battery cell manufacturing research at a “skunkworks lab” at the company's Kato Road facility, a few minutes from its car plant in Fremont, California.
That plant is where Tesla makes its Model 3, Model S and Model X vehicles today, while its batteries are made at the Gigafactory in Sparks, Nevada, a factory jointly owned and operated with Panasonic.
Employees in Tesla's battery R&D teams are now focused on designing and prototyping advanced lithium ion battery cells, as well as new equipment and processes that could allow Tesla to produce cells in high volumes, employees and former employees said.
Tesla has posted job listings in the last month for various engineers involved in battery cell design, equipment for producing battery cells and manufacturing processes to make batteries.
Even if Tesla's effort to start making battery cells is successful, the company is not likely to cut ties with Panasonic and other battery suppliers any time soon.
Tesla employees familiar with cell supplier negotiations said the company is most likely to work with Panasonic and LG to provide the cells that go into the initial Model 3 vehicles produced in its Shanghai factory. That factory could start production by the end of 2019, with mass production beginning in 2020.
Tesla CEO Elon Musk speaks at the ground breaking for the automaker's new factory in Shanghai.Eunice Yoon | CNBCThe ambition to bring at least some battery cell manufacturing in house has been broadly discussed within Tesla and among its followers.
At the company's annual shareholder meeting in June, Musk invited CTO JB Straubel and Vice President of Technology Drew Baglino on-stage to tell shareholders about battery-related initiatives at Tesla.
Musk encouraged outside investors to focus on two strategic matters at Tesla: How quickly the company can offer completely self-driving vehicles, and its plan to “scale battery production and get the cost per kilowatt hour lower.” He said Tesla wasn't ready to let the “cat out of the bag” yet, and would reveal further details — including about the company's acquisition of Maxwell Technologies, completed in May this year — at an investor battery and power train day before the end of 2019.
JB Straubel, Tesla Motors chief technical officer.Getty ImagesCTO JB Straubel said: “It's more obvious now than I think it ever was, we need a large-scale solution to cell production.”
Baglino added, “We're not sitting idly by. We're taking all the moves required to be masters of our own destiny here, technologically and otherwise. I think through all the experience we've developed with partners and otherwise, we will have solutions for this.”
Executives' comments on Tesla battery tech follow reports bout tension between the two companies.
In January, Panasonic struck a deal with Toyota to build car batteries together through a joint venture that's majority owned by Toyota. In early April, Panasonic said it would temporarily freeze its investments in Tesla Gigafactories.
A few days later, Musk blamed Panasonic for dragging down the pace of Model 3 production, saying its cell lines were operating at only two-thirds of their capacity, or 24 GWh, at their shared Gigafactory. “Tesla won't spend money on more capacity until existing lines get closer to 35GWh theoretical,” Musk tweeted.
In recent weeks, following layoffs and other cost-cutting efforts by Tesla, Panasonic has hired a number of former Tesla employees at the Gigafactory in Nevada, including technicians, supervisors, process and systems engineers, according to LinkedIn profiles and current and recent Tesla employees.
Hopping from Tesla to Panasonic at the Gigafactory wasn't as common just a couple of years ago, according to a former Tesla human resources employee who asked to remain unnamed. Compensation, training and a clearer policy around schedules, especially how to earn and get time off, help draw Tesla employees over to their Japanese partner, this person said.
WATCH: Inside Tesla's Nevada Gigafactory
VIDEO8:5008:50We went inside Tesla's first GigafactoryCNBC ReportsFollow @CNBCTech on Twitter for the latest tech industry news.

Read the email from Elon Musk to Tesla employees, pushing them to hit aggressive goals

Elon Musk, co-founder and chief executive officer of Tesla Motors.Yuriko Nakao | Bloomberg | Getty ImagesElon Musk sent out one of his signature “everybody” emails on Tuesday, which are circulated to tens of thousands of Tesla employees.
In it, the CEO rallied employees to work hard to hit the company's aggressive vehicle production and delivery goals for the second quarter.
It is typical for Tesla execs, and Musk, to push employees to work long hours to hit quarterly goals, with extra production and delivery work piling up toward the end of a quarter.
In its first-quarter 2019 update to shareholders, Tesla said:
“We believe we will deliver between 90,000 and 100,000 vehicles in Q2. Although it is possible to deliver a higher number of vehicles, we believe it is important to begin unwinding the 'wave' approach to vehicle deliveries, where overseas cars have been made in the first half of the quarter and North American cars have been made in the second half. This puts extreme stress on Tesla, negatively affects our working capital needs and adds to our cost structure.”
Earlier this month, Musk was prompting people to buy Tesla vehicles, with a Twitter post reminding them that “US federal tax drops by $1875 for any Tesla delivered after June 30.”
Here's what Musk wrote in the email sent Tuesday, obtained and transcribed by CNBC. Bloomberg first reported on the email.
From: Elon Musk
To: Everybody
Date: June 25, 2019
As you may have noticed, there is a lot of speculation regarding the vehicle deliveries this quarter. The reality is that we are on track to set an all-time record, but it will be very close. However, if we go all out, we can definitely do it!
We already have enough vehicle orders to set a record, but the right cars are not yet all in the right locations. Logistics and final delivery are extremely important, as well as finding demand for vehicle variants that are available locally, but can't reach people who ordered that variant before end of quarter.
I have great faith in you. Please let me know if there is anything I can do to help.
Thanks,
Elon

Follow @CNBCTech on Twitter for the latest tech industry news.

Tesla shares drop despite Musk’s prediction of ‘a record quarter on every level’

VIDEO2:1602:16Watch the highlights from Elon Musk speaking at Tesla shareholder meetingAutosTesla shares turned negative Wednesday morning, a day after CEO Elon Musk said the electric auto maker has a “decent shot at a record quarter on every level.”
“I want to be clear: There is not a demand problem,” Musk said at the company's annual meeting with shareholders on Tuesday evening. “Sales have far exceeded production and production has been pretty good so we're actually doing well.”
Tesla shares had jumped 4% in premarket trading Wednesday, before turning negative. By Wednesday's close, the stock was down 3.6%
Musk also said “it won't be long” before the company has an electric car with a range of 400 miles.
In a note to investors after the meeting, Cowen questioned Musk's confidence, saying “basic microeconomic theory would suggest that goods or services that don't have a demand problem don't see their prices lowered by half a dozen times in 4-5 months.” Cowen has an underperform rating and a $140 price target on Tesla shares.
VIDEO3:0003:00Here's why Tesla shares rose following Musk's optimism about demandSquawk BoxBaird, on the other hand, said “the narrative is overly negative,” adding that “bear arguments will be disproven in the coming weeks and months.” Baird has a $340 price target and an outpeform rating on the stock. The firm said there have been “several signs of steady demand over the past few weeks,” a point Musk emphasized during the presentation. Musk said 90% of Tesla's orders are coming “from non-reservation holders, so these are new customers,” he said.
Tesla's stock is down nearly 35% for the year as of Tuesday's close of $217.10 a share but the stock has slowly come back after hitting a low of $179 a share last week.
A key metric for Tesla sales bounced back last month, as the company's Model 3 vehicle saw deliveries higher than expected in May. Overall, Tesla increased total U.S. sales in the month of May by 73% from a year earlier, according to data from Motor Intelligence.
“We continue to see the shares in a tug of war between skeptics and extreme believers, where we have fallen into the skeptical camp for several years,” Cowen said.

Ford expands autonomous vehicle testing with a new self-driving prototype

An employee walks past a Ford logo in the yet-to-be-completed engine production line at a Ford factory on January 13, 2015 in Dagenham, England.Carl Court | Getty Images News | Getty ImagesFord Motor is staying close to home to test its latest generation of autonomous vehicle technology.
The automaker and Argo AI have deployed their latest self-driving test vehicle in Detroit, making it the fifth city where the companies are seeing how their autonomous vehicles handle a variety of conditions.
“Bringing these vehicles to Detroit in addition to our other test cities gives us the opportunity to learn how they operate in yet another environment,” Argo AI President Peter Rander said in a post on Medium.
Argo and Ford are already testing self-driving vehicles in Pittsburgh, Palo Alto, California, Miami and Washington, D.C.
Ford will not say how many of its third-generation autonomous test vehicles will be driving around Detroit. Each autonomous car, a modified Ford Fusion Hybrid, will have a safety driver behind the wheel and a co-pilot in the front passenger seat monitoring the vehicle's performance.
The cars will also have an upgraded set of sensors and higher resolution cameras to be able to see and identify objects that are further away. Rander said the modified Ford Fusions will also feature redundant systems to “help ensure our vehicles can continue operating safely in the event that something unexpected occurs.”
While this Fusion is Ford's third generation autonomous vehicle, it is unlikely to be its last before the company rolls out its first fully autonomous vehicle for commercial use. That is scheduled to happen in 2021. Ford expects that model will be used by ride-hailing companies, package delivery companies and other businesses.

Hyundai backs Aurora to develop driverless systems for Kia and Hyundai models

A Hyundai NEXO fuel cell vehicle with Aurora self-driving systems.AuroraHyundai Motor Group is investing in Aurora, a developer of self-driving technology for autos, with a plan to bring the systems to Hyundai and Kia models.
The companies have been working for the past year to develop and integrate the “Aurora Driver” into Hyundai's NEXO fuel cell vehicles as well as on other projects.
It's an extension of an existing partnership and furthers the work that large auto manufacturers are doing with developers of driverless technology. General Motors acquired Cruise in 2016, and Ford took a stake in Argo.ai the following year. Aurora still aims to provide autonomous systems to many different players.
On Monday, Aurora announced a partnership with Fiat Chrysler to develop self-driving vehicles for corporate clients. It also works with Chinese electric vehicle maker Byton.
Aurora CEO Chris UrmsonAuroraIn a statement, Aurora co-founder and chief product officer Sterling Anderson — previously the director of Autopilot programs at Tesla — said the company's aim with its partners is to “deliver the benefits of self-driving technology safely, quickly, and broadly.” After reportedly failing to acquire Aurora last summer, Volkswagen concluded a partnership with the company on Tuesday.
Aurora employs lidar, or light ranging and detection sensors, as part of its autonomous systems. That's different than Tesla, which uses cameras and radar primarily to power its “full self-driving” and Autopilot features.
Led by CEO Chris Urmson, former technical lead of Google's self-driving efforts, Aurora has raised at least $700 million in funding. Other investors include Amazon, Greylock, Sequoia, Shell Energy's venture group and T. Rowe Price. The size of Hyundai's investment wasn't disclosed.
WATCH: The best way to get self-driving vehicles on the road
VIDEO3:2903:29The best way to get self-driving vehicles on the road.

Goldman Sachs cuts Tesla price target: ‘Downward path for shares will resume’

Elon Musk, co-founder and chief executive officer of Tesla Motors Inc.Yuriko Nakao | Bloomberg | Getty ImagesGoldman Sachs slashed its price target on Tesla on Thursday and said it was expecting shares to continue to decline over concerns about demand.
“Sustainable demand [is] the key question as shares [are] likely continue to de-rate,” the bank said in a note. Goldman lowered the price target to $158 from $200, which would represent a 30% drop from Tesla's current levels based on Wednesday's close of $226.43.
“We believe that is the largest question for investors to underwrite at this point — what are sustainable demand levels for the Model S, Model X, and Model 3 — and how does that change with the introduction of Model Y production,” Goldman Sachs analyst David Tamberrino said. “We believe a downward path for shares will resume as it becomes more clear that sustainable demand for the company's current products are below expectations.”
Tesla shares are down more than 3% on Thursday. The stock is down 30% this year as the company continues to be mired in a myriad of controversies. Analysts and investors also continue to mull whether the company will need to raise more capital.
Watch: Analysts are divided on Tesla — one investor makes the bull caseVIDEO6:3906:39Analysts are divided on Tesla. Watch one investor make the bull caseSquawk Box