Author: CNBC Online news

Nissan challenges Tesla in massive shift to electric with ‘complete reinterpretation’ of the car

Paul Eisenstein/CNBC
The Nissan IMs electric sports sedan at the 2019 North American International Auto Show in Detroit on Monday, Jan. 14, 2019.

While most of the products debuting at this year's North American International Auto Show give a glimpse of what will be coming to showrooms before the end of the year, Japanese automaker Nissan and its luxury Infiniti brand, are looking a bit further into the future with a pair of radical battery-electric vehicle concepts.

The Nissan IMs and Infiniti QX Inspiration, unveiled in Detroit this week, don't just hint at the broad plans the two marques have to electrify their lineups. The models imagine what Nissan's North American CEO described as a “complete reinterpretation” of how tomorrow's zero-emissions vehicles will be designed and engineered. Among other things, that will allow them to create vastly more roomy interiors by all but eliminating the traditional engine compartment.

“Our strategy with electric vehicles isn't if it will happen, but when it will happen,” Nissan North America CEO Denis Le Vot said as he lifted the covers on the IMs concept vehicle during a news conference at the show.

Nissan was the first major automaker to launch a high-volume battery-electric vehicle and, since the Leaf hatchback came to market in 2011, it has become the world's best-selling BEV. It has been losing momentum, however, as competitors like the Tesla Model 3 and Chevrolet Bolt EV have come to market. To kick-start sales, the automaker last week announced it will increase the range of the Leaf by about 50 percent, to 226 miles.

Photo: Paul Eisenstein
2019 Nissan Leaf

But the Leaf also will be getting company in the coming years. Le Vot also announced in Detroit that Nissan will have eight all-electric models in its global fleet by 2022. Alliance partners Renault and Mitsubishi are bringing out four more. The Japanese maker alone is forecasting it will see about 1 million BEVs annually by mid-decade.

While the Nissan brand will continue to market conventionally powered gas and diesel models for the foreseeable future, the Infiniti division is planning an even more aggressive transformation, said Christian Meunier, the recently named CEO of the Infiniti brand, which is based in Hong Kong.

Starting in 2021, all products will be electrified, he said in an interview. In the case of Infiniti, that will mean both battery-electric vehicles and what are known as serial plug-in hybrids. These have range-extending gas engines on board, but if they fire up they only serve as generators, sending power to the electric motors that actually drive the wheels.

“It will take about two to three years” to phase out conventional drivetrains, Meunier estimated.

Infiniti suffered an embarrassing moment at the auto show on Monday, when its QX Inspiration concept initially failed to roll out onto the stage, as planned, due to a problem with its electric drivetrain. Despite that setback, Meunier called the prototype “the embodiment of our future in the form a striking electric crossover.”

The QX Inspiration is loaded with upscale features, including a marble center console and a Japanese redwood roof liner. But like the less exotically finished Nissan IMs, what really matters is the actual layout of the vehicle.

Paul Eisenstein/CNBC
The Infiniti QX Inspiration at the 2019 North American International Auto Show in Detroit on Monday, Jan. 14, 2019.

Indeed, both concepts place their battery packs, motors and other key drivetrain components under their load floors. That means there is virtually nothing left that would require a conventional engine compartment. So, both IMs and QX Inspiration adopt a very “cab-forward” design, as global Nissan corporate design director Alfonso Albaisa calls it. That recaptures much of the area that normally would be under the hood, yielding the equivalent of a full-size interior in a compact car's footprint.

“We think this is a unique opportunity to improve the ergonomics of our vehicles,” said Karim Habib, Infiniti's design chief.

Meunier noted that Infiniti and Nissan will consolidate the prototype platforms used for the IMs and QX Inspiration concepts by the time production versions come to market, reducing development costs and increasing efficiencies.

Both concepts also feature fully autonomous driving capabilities, though motorists can drive manually if they prefer. In fully driverless mode, however, Habib and Albaisa noted vehicles could be transformed into mobile living rooms or offices, with steering wheels retracting and seats being allowed to swivel so occupants can face one another.

How soon fully autonomous technology will be ready for production is a matter of debate, but the push to electrification — and with it a major shift in auto design — is already underway. Jaguar adopted a more cab-forward approach with the new I-Pace battery SUV it launched for the 2019 model year, and other brands are expected to follow.

Paul Eisenstein/CNBC
The Nissan IMs electric sports sedan at the 2019 North American International Auto Show in Detroit on Monday, Jan. 14, 2019.

Elon Musk says Tesla is ending its customer referral program as it’s costing too much

Mack Hogan | CNBC
Juicing up the P100D on a trip to Detroit

Tesla's customer referral program will come to an end on Feb. 1, chief executive Elon Musk said in a tweet Thursday.

The initiative lets drivers give their friends a referral code to get six months of free charging via Tesla's Supercharger network.

Musk said the move was aimed at reducing costs incurred by the scheme. “It's adding too much cost to the cars, especially Model 3,” he said.

Tweet

The premium electric auto manufacturer has made a number of cost-cutting moves of late, as it looks to boost margins and expand profitability. Late last month, the firm cut prices on its Model 3 car in China, while this week it discontinued the lowest-priced versions of the Model S sedan and Model X SUV.

In its last quarterly report, the company scored its first profit in two years, posting net profit of $311.5 million and $881 million in free cash flow.

The firm managed to pump out 86,500 vehicles in the fourth quarter, up from 80,142 in the previous quarter, but disappointed investor expectations when it came to deliveries.

The company is also trying to up its presence in China, and Musk recently broke ground on a new Gigafactory — the name given to the facilities where lithium-ion batteries and Tesla vehicles are produced — which is being opened in Shanghai. The factory, dubbed the Gigafactory 3, is slated to begin partial production in the second half of this year.

That move comes not only as a spate of domestic rivals — including Nio and Xpeng — look to challenge Tesla's dominance in the electric vehicle space, but also as the U.S. and China try to resolve their differences over trade.

A trade battle between the two superpowers has seen billions of dollars' worth of each other's imported goods targeted with new tariffs, and both nations are trying to reach a trade agreement during a 90-day truce.

Tesla CEO Elon Musk’s influence grows as automakers roll out electric-vehicle plans in Detroit

Aly Song | Reuters
Tesla CEO Elon Musk and Shanghai's Mayor Ying Yong attend the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019.

Tesla may not be this year's North American international Auto Show, but it's easy to feel the influence of Elon Musk's company on the automakers unveiling new vehicles in Detroit.

From announcing all-electric cars to adding assembly lines specifically for plug-in models, auto executives are ramping up their electric vehicle plans.

“There's no doubt, the auto industry is becoming much more serious about developing electric vehicles driven by the need for emissions compliance in He U.S., China and Europe.” said Michael Robinet, analyst with IHS Markit. “Tesla has shown the industry that markets do exist for electric vehicles and the major players have taken notice.”

Robinet says the early success of the Model 3 shows there is demand for all-electric vehicles. Until last year, U.S. sales of plug-in models were growing, but limited.

In 2017, the auto web site Inside EV's estimated the top selling electric model in the U.S. was Tesla's Model S, with sales of approximately 27,000 vehicles. In 2018, Inside EV's estimates Tesla sold just under 140,000 Model 3's in the U.S.. Tesla does not release sales by country.

The surge in sales for the Model 3 clearly demonstrates there's a larger market for an all-electric vehicle, even if it comes at a higher price. The average Model 3 sells for roughly $50,000.

Cadillac President Steve Carlisle admits he “obsessively” benchmarks and studies Tesla.

“They have done a lot to popularize electric vehicles and to get into the minds of consumers,” Carlisle told CNBC after giving reporters an early glimpse of the all-electric Cadillac being developed.

Rebecca Cook | Reuters
Members of the media look at General Motors 2020 Cadillac XT6 SUV after it was revealed on the eve of press days of the North American International Auto show in Detroit, Michigan, January 13, 2019.

Carlisle's public comments about Tesla are noteworthy. For years, auto executives have privately scoffed when asked about Musk and rarely did they publicly acknowledge the growing sales and success of Tesla. Not anymore.

While executives may be more willing to admit Tesla's success, many believe they can ramp up their EV sales to rival, if not exceed, Tesla.

Ford CEO Hackett says the electric models it's developing are “going to appeal to car owners and car lovers”.

Carlisle cautions that it's premature to say Tesla is the winner of the EV race. “I think we ought to wait a while to write the whole story because we don't know what happens when EV's really start to scale,” he said.

Both executives have a point. Last year, consumers in the U.S. bought just over 360,000 EV's, just two percent of all vehicles bought in the country. In other words, it's early, but Tesla and Musk are clearly influencing the thoughts and actions of automakers looking to catch up in the world of EV's.

CNBC producer Meghan Reeder contributed to this report

Questions? Comments? BehindTheWheel@cnbc.com.

Goodyear tanks after profit warning, cites weakening environment in China, India

Jie Zhao | Corbis News | Getty Images
An employee works at a tire store in Hefei, China.

Goodyear shares plunged 12 percent after the company announced that fourth-quarter tire unit volumes declined by about 3 percent due to the continued weakening of the environment in China and India.

The company also cited reduced demand in the winter tire market in Europe and supply constraints on volume for high-value-added consumer and commercial truck tires in United States as other reasons for this decline. Earnings also fell in other tire-related businesses including the company's U.S. chemical operations.

Goodyear's net income is expected to be negatively affected by these factors and the company's total segment operating income is expected to be slightly below previous projections of $1.3 billion as well.

Representatives of Goodyear will present these findings at conferences on Jan. 15 and 16 to discuss the company's preliminary performance in 2018. The conferences will be hosted in conjunction with the Detroit Auto Show.

Ford and Volkswagen will partner on building commercial vans and pickup trucks

Boris Roessler | picture alliance | Getty Images
14 January 2019, US, Detroit: Jim Hackett (r), CEO of Ford, and Herbert Diess, CEO of VW, talk about the fair together. Industry experts expect the announcement of a cooperation between VW and Ford in the light commercial vehicle sector.

Ford and Volkswagen plan to collaborate on making commercial vans and medium-sized pickup trucks as early as 2022, the two companies said Tuesday.

The partnership is expected to boost annual pre-tax operating results starting in 2023, the two companies said in announcing the agreement on the second day of the North American International Auto Show in Detroit.

They also signed a “memorandum of understanding” to work together on autonomous vehicle research.

This is a breaking news story. Please check back for updates.

Tesla is ahead of automakers in 3 key categories, tech money manager says

ARK Invest's Cathie Wood says these are the best tech stocks to beat the market
2 Hours Ago | 07:07

Tesla won't have a presence at this year's Detroit Auto Show but the electric-car maker is miles ahead of the competition in three key categories, ARK Invest founder and CEO Catherine Wood told CNBC on Monday.

Traditional automakers have been making sizable investments into electrifying their vehicles, but Tesla is leading the industry in battery technology, artificial intelligence and data collection, she argued.

“We believe that [the] transportation industry is going to shift wholesale to electric, and Tesla is ahead of the pack,” Wood said on “Fast Money.”

It will be hard for other producers to catch up, because it is in Tesla's “DNA,” she added.

Wood, whose tech-heavy fund finished 2018 in the green and is continuing the upward trend thus far in 2019, thinks Tesla is at a cost advantage because it produces its own batteries for the Model S, Model X and Model 3 vehicles. Other car companies need to vertically integrate, she said.

Also, the type of battery that Tesla uses gives it an additional edge over other carmakers. Tesla's vehicles operate with a lithium-ion cylindrical battery like those used in consumer electronics instead of the lithium-ion pouch batteries.

“So Tesla is riding down the consumer electronics cost curve, which is much, much lower than that lithium ion pouch,” Wood said.

“They've done an amazing thing from an engineering point of view no one else thought was possible. That puts them way ahead of the game,” she said.

Wood said she expects other car manufacturers will turn to Nvidia for brain power but criticized the chipmaker's “design cadence.”

“Everybody else will use Nvidia, but their design cadence is more like 3-5 years,” she said. “Tesla's is every year to two years, so completely different dynamic.”

Tesla, Wood said, has also collected billions of miles of data from its own customers and continues to gather more than a billion miles each quarter. Google parent Alphabet's Waymo comes in second, with about 200 million miles worth of data, she added.

“That's what powers an autonomous vehicle, and that's where we're going,” Wood said.

Ford debuts 700-horsepower ‘street-legal’ Mustang Shelby GT500

Ford unveils the all-new Shelby GT500, its most powerful street-legal car in history
7 Hours Ago | 01:03

Ford's new Mustang GT Shelby 500 is a 700-horsepower monster Ford says is the quickest street-legal Mustang in history.

The latest iteration of Ford's Shelby GT variant of the iconic Mustang pony car inherits the name of racer and engineer Carroll Shelby, who worked with Ford to design the first GT500 in 1967 — a car that now is considered a legend among American muscle cars.

The new version, which debuted at the Detroit auto show on Monday, goes from 0 to 60 miles per hour in the “mid-3 second” range, Ford said. It borrows technology from Ford's GT super car and the race-tuned Mustang GT4. It still has a lot of the creature comforts of a conventional car though, including a B&O sound system, power adjustable seats with optional suede fabric and SiriusXM radio. This is no family car, however. There is no rear seat, to reduce weight in the vehicle.

Ford Executive Vice President Jim Farley said he thought Carroll Shelby, who died in 2012, would love this Mustang more than any other.

Jonathan Ernst | Reuters
Members of the media look over the 2020 Ford Mustang Shelby GT500 after it was revealed at the North American International Auto Show in Detroit, Michigan, January 14, 2019.

The car is a big statement by a company that less than a year ago said it plans to all but stop selling cars in North America entirely over the next few years. If Ford follows through on those plans, the Mustang would be the last traditional passenger car in its lineup.

The GT500's massive 700-horsepower engine is perhaps meant to rival that of the 707-horsepower Dodge Challenger Hellcat, which has created lots of buzz for Dodge and Fiat Chrysler overall.

The GT500 is not meant to be a high-volume car, but it could prove quite valuable as a “halo” vehicle meant to draw buzz around the brand, said IHS Markit analyst Stephanie Brinley.

“The GT500 is essentially a street-to-track car for the Mustang, not entirely unlike the Challenger and Charger Hellcats,” she said. “So it is low volume, but big excitement. … It is clearly important to get people excited about your brand and about your vehicles in general, whether they buy a utility vehicle, a sedan, or a sports car. It does help to make a statement, as long as it fits with the brand.”

Source: Ford
2020 Mustang Shelby GT500

Nissan delays Infiniti QX debut in Detroit as electric concept car fails to start, pushed on stage

Robert Ferris | CNBC
Nissan Infiniti QX Inspiration concept car in the elevator of the North American International Auto Show in Detroit, Michigan, January 14, 2019.

Nissan was scheduled to debut its new Infiniti QX Inspiration concept car at the Detroit auto show on Monday, but executives delayed the launch and closed the curtains on the car without any explanation.

Executives said they couldn't get the car started and eventually had to push it on stage.

The Infiniti QX was among one of the hottest debuts anticipated at the North American International Auto Show. The more than 100 international journalists who lined up for the 11:40 a.m. launch in Detroit could see technicians working on the car just before it was scheduled to drive onto the stage.

After about 30 minutes of waiting, executives drew the curtains on the all-electric SUV and told the audience they hoped to reschedule the event for later in the day.

Robert Ferris | CNBC
An empty display space for the Nissan Infiniti QX Inspiration concept car at the North American International Auto Show in Detroit, Michigan, January 14, 2019.

The crowd filtered out by 12:40 p.m. as janitors began mopping up the floor of the Infiniti stage. They later pushed the car on stage to a significantly thinner audience.

Nissan at least had a sense of humor about the failed start.

“The Infiniti QX Inspiration, like many stunning beauties, is a bit of a diva and decided to to delay her debut. Another memorable NAIAS moment,” Trevor Hale, head of Infiniti global communications, said in an email. “That's show business.”

Robert Ferris | CNBC
An empty display space for the Nissan Infiniti QX Inspiration concept car at the North American International Auto Show in Detroit, Michigan, January 14, 2019.

Fiat Chrysler plans to expand factory capacity to build new Jeep models

Mike Blake | Reuters
The 2020 Jeep Gladiator is introduced during a Jeep press conference at the Los Angeles Auto Show in Los Angeles, California, November 28, 2018.

Fiat Chrysler plans to add more factory capacity over the next few years to support building two new Jeep models, including a return of the Jeep Grand Wagoneer, CEO Mike Manley told CNBC.

Manley would not say how many jobs Fiat Chrysler might add or give a time frame for when those new assembly lines would be up and running.

“Those plans will have to go in place in the near future,” Manley said as the Detroit auto show kicks off Monday.

Questions? Comments? BehindTheWheel@cnbc.com.

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