Tesla to Build Factory in China with Goal of Building Half a Million EVs
Tesla has signed an agreement with the government of Shanghai to open a plant in the Chinese city with the aim of building 500,000 of its electric vehicles there. Construction is expected to begin "in the near future, after we get all the necessary approvals and permits," a company spokesperson said in an email.
Once construction begins, it will take about two years until Tesla begins producing vehicles at the site, which it's calling Gigafactory 3. From there, it will be another two to three years before the factory hits its maximum capacity of 500,000 vehicles per year, the company said. In addition to manufacturing, Tesla will have research and development and sales operations at the site, located in the Lingang area of the city.
"Shanghai will be the location for the first Gigafactory outside the United States," CEO Elon Musk said in a Shanghai government release provided by Tesla. "It will be a state-of-the-art vehicle factory and a role model for sustainability," Musk added. "We hope it will be completed very soon. We've been impressed by the beauty and energy of Shanghai, and we want our factory to add to that."
Tesla recently increased its vehicle prices in China to more than 70 percent above U.S. levels, Reuters reported. The move, which other automakers have considered, was in reaction to China placing retaliatory tariffs on several U.S. goods, including autos. The vehicles built at Tesla's new plant will supply the China market. Musk has also said the company intends to build a Gigafactory in Europe, and eventually aims to have 10 to 12 Gigafactories worldwide.
In the U.S., Tesla has struggled to build its Model 3 at production sites in California and Nevada. Last week, the company said it had reached its long-sought but repeatedly missed goal of assembling 5000 units in a week, hitting 5031 total in the final seven days of the second quarter. The company said it expects to increase production of the Model 3 to 6000 units per week by late August. There were still about 420,000 unfilled Model 3 reservations at the end of the quarter; the company had delivered 28,386 Model 3s to date. It delivered a total of 40,740 vehicles in Q2, including 18,440 units of the Model 3, 10,930 of the Model S, and 11,370 of the Model X.
The company said Tuesday that the investment in China "will not impact our U.S. manufacturing operations, which continue to grow."
Auto tariffs likely to send used car prices higher, experts say
Prepare to pay more for your used car.
If the U.S. Commerce Department adopts President Donald Trump's proposal of a 25 percent tax on imported new cars and car parts, the higher costs for carmakers to assemble and sell new cars could boost demand for used vehicles, analysts predict.
"The parts would be the most affected for sure, assuming that the administration will put tariffs in place for parts as well," said Augusto Amorim, senior manager for Americas vehicle sales forecasts at LMC Automotive in Troy. "I don't think they'd consider any tariff on the used car at this point."
Automakers have warned their costs to build, and subsequently sell, new cars will rise. That's because every car assembled in the U.S. contains a large percentage of foreign parts, analysts said.
Toyota has said the costs of its cars could rise by thousands. General Motors last week said it would be forced to downsize and cut jobs.
Carmakers of course could choose absorb some of a 25 percent duty and not raise prices that much, said Maryann Keller, principal of Maryann Keller & Associates in the New York area.
"If a car doesn't have a lot of imported content, they might raise prices slightly and over time adjust it" depending on the imported parts in the vehicle.
For example, a Mercedes S-class sedan is fully imported, so a 25 percent duty on it would make it "incredibly expensive," Keller said. The 2018 S-class starts at $89,900.
"Would Mercedes raise the price on that car by 25 percent? I don't think so," she said. "They may decide it's more important to maintain sales. The more likely action would be a measured price increase across all models."
But even a nominal hike across all the models, Keller said, might be enough to push customers into the used market.
And if a new car is priced higher, its rate of depreciation is now starting at a higher point, said Keller. This will bump up prices on late-model used cars.
Secondly, there are the simple laws of supply and demand, said Ivan Drury, senior manager of industry analysis for Edmunds in Santa Monica, California.
"The used market could be injected with millions of consumers it never had before," Drury said. "It will cause a huge uptick in demand and we will see prices go up across the board for used cars."
The supply of used cars might be hit further if the U.S.-Canadian currency exchange rate suffers. Car dealers in Canada regularly send thousands of used cars to the U.S. to sell at auto auctions. It's lucrative for them because the U.S. dollar is stronger than Canadian currency. But that influx of used cars from Canada could freeze depending on what happens with tariffs, said Amorim.
"If the U.S were to impose this tariff, how Canada would retaliate and how that would impact the currency" isn't known, said Amorim. "We'd have to see the ratio between the U.S. dollar and the Canadian dollar and if that differs, we could see a higher or lower influx of used cars from Canada."
Likewise, if consumers can't afford new cars, new car sales will decline, reducing the number of trade-ins and making the used car supply tighter, said Jonathan Smoke, Chief Economist at Cox Automotive.
If 1 million customers switch to the used car market, the average transaction price could rise about 10 percent, said Drury. The average price of a used car is about $20,000, meaning it would go up by at least $2,000, he said.
Long thought to be less interested than previous generations in vehicle ownership and driving, most millennials actually like driving, according to a new survey from Hagerty. Survey results show that 81 per cent of participating millennial drivers say they like, love or are passionate about driving. This compares with 78 per cent of Gen X-ers and 79 per cent of baby boomers.
The survey was commissioned in response to the rapid rise of autonomous vehicle technology. Fifty-seven per cent of all respondents - including 64 per cent of millennials - believe a movement will be needed to preserve the driving experience when autonomous cars are the norm.
"Full autonomy is going to save lives, make commuting easier and unclog cities," said McKeel Hagerty, CEO of Hagerty. "But these survey results also indicate that people, including millennials, are always going to want to drive themselves when they want to. It's clear people don't want to lose the joy, freedom and control that comes with having their hands on the wheel."
Findings have prompted Hagerty to launch an initiative called "Why Driving Matters" to organize and amplify the voices of car lovers when it comes to future driving laws.
"One of our goals will be to work with policymakers so that years or even decades from now, when the bulk of cars are fully autonomous, the act of driving is protected," said Hagerty.
While electric and autonomous vehicles remain in development, Germany is pushing the envelope when it comes to futuristic tech: exploring the possibility of flying cars.
The German government signed a letter of intent with Audi and Airbus SE executives to "test air taxis" in and around Audi's hometown of Ingolstadt.
The Urban Air Mobility project was announced by Audi interim CEO Bram Schot, Federal Minister of Transport Andreas Scheuer, Airbus CTO Grazia Vittadini, Mayor of Ingolstadt Dr. Christian Lösel, and other representatives.
"We welcome the involvement of the city of Ingolstadt and support the development of the region as a test field for air taxis," said Schot.
The trial is intended to counter clogged city roads and "unlock new growth potential" for Germany's high-tech industry, the government's press office said in an emailed statement on Wednesday.
"We would like to use our know-how to improve urban life, and aim to develop new mobility concepts for cities and people's various needs with the Urban Air Mobility project," said Schot.
While flying cars may seem far off in the future, they could become a reality sooner than you think. At the Geneva Motor Show in March earlier this year, Audi, subsidiary Italdesign, and plane-maker Airbus SE unveiled their mobility concept: Pop.Up Next, an "an all-electric, fully automated concept for horizontal and vertical mobility."
Volocopter GmbH, a German startup backed by both Intel Corp. and Daimler, has built a "drone-like electric helicopter" that can ferry passengers across the city sky - and has already completed test flights. Volocopter GmbH hopes to offer the first commercial trips in the next three to five years.
"Flying taxis aren't a vision any longer, they can take us off into a new dimension of mobility," said Scheuer. "They're a huge opportunity for companies and young startups that already develop this technology very concretely and successfully."
Hyundai's next-generation NEXO fuel cell vehicle made its Canadian debut in Vancouver, B.C., during a ride-and-drive event that included the attendance of municipal and provincial government officials, according to the company's news release.
"Hyundai is the first automotive manufacturer to bring two generations of fuel cell vehicles to the Canadian market - first with the Tucson fuel cell, and now the all-new NEXO," said Don Romano, President and CEO of Hyundai Auto Canada. "The launch of NEXO reinforces Hyundai Motor Group's plan to bring 18 eco-friendly vehicles to global markets by 2025 to help pave the way for a greener future."
Elected officials were offered the chance to drive Hyundai's NEXO car and experience what it's like to sit behind the wheel of a fuel cell-powered vehicle. The carmaker also provided officials with information on how the technology can help contribute to a cleaner environment, as vehicles equipped with this feature run on hydrogen rather than gasoline.
"When Hydrogen and Oxygen are combined from the atmosphere into the fuel cell stack, electricity is produced via an electrochemical reaction," said Hyundai Auto Canada. "The only by-products of this process are water vapour and power, resulting in vehicles that yield zero-emissions."
Hyundai Auto Canada participated in the ride-and-drive event in collaboration with The Canadian Hydrogen Fuel Cell Electric Vehicle (FCEV) Coalition of automakers.
German auto supplier Bosch is developing smart-city technology that connects vehicles with infrastructure to provide safety alerts.
Robert Bosch GmbH demonstrated the system at the intersection of Jefferson and Griswold in Detroit on Tuesday as part of the Intelligent Transportation Society of America's annual meeting at Cobo Center.
A camera installed at the intersection monitored a section of sidewalk and the crosswalk at the intersection, waiting for pedestrians, bicyclists, even animals to enter the monitored area and warn the approaching F-150 equipped with Bosch's V2X "box."
V2X is the industry term for "vehicle to everything" communication technology, a next step in automotive safety systems in which a car can communicate with everything from infrastructure to the smart phone in a pedestrian's pocket.
Bosch's V2X technology "listens" while the advanced driver-assist system "watches," said Philip Ventimiglia, a Bosch product manager.
The V2X "box," as Ventimiglia calls it, is equipped with Dedicated Short Range Communications, or DSRC. It's essentially a one-way communication system that listens to signals being transmitted by sensors and cameras installed in surrounding infrastructure.
"The advantage of V2X technology is the vehicle can hear things farther away and it can hear things when the vehicle doesn't have the line of sight," he said. "When it comes to the vehicle cameras and radars, if there's an object in their way, then they can't offer that information to the driver. The important advantage here is when the infrastructure is in the game, it can typically see around those other trucks and cars and still communicate that information that's important to the driver."
The V2X DSRC system then works in line with an ADAS or autonomous system to best map out the vehicle's path.
When a Bosch employee wandered into the view of the camera, mounted on a traffic light pole above Jefferson Avenue, a signal appeared on the F-150's infotainment system. The infotainment system also displayed traffic lights ahead and directional signs like a no-left-turn sign along Jefferson.
The camera mounted at Jefferson was built by the supplier's Building Technology division, which develops security cameras and systems for buildings. It's already used in some roadway infrastructure cases, like traffic monitoring on highways.
But the camera at Jefferson and Griswold this week takes that traffic monitoring a step further. The system can detect and classify objects to alert the driver to potential hazards.
Bosch's cross-industry divisions are working together to put the supplier at the center of the movement into "smart cities," urban areas that will be able to support autonomous vehicles.
"Bosch is going cross-domain, cross-divisional to learn from different divisions and take those technologies and bring them into or augment and improve technologies that are already existing," said Frank Sgambati, Bosch's director of business development for smart cities in North America. "We're working with cities, municipalities and departments of transportation to be able to take the existing infrastructure to improve and offer more smart and intelligent solutions."
Sgambati worked with the Michigan Department of Transportation to get the camera at Jefferson and Griswold installed for this week's demo. It's a relationship he said he'd like to build upon, though wouldn't say whether Bosch is working with MDOT or Detroit on smart city applications.
His division of Bosch is working with "several cities" on these tech applications, he said, including a smart mobility corridor in Columbus, Ohio, and a smart community in San Francisco.
Porsche is now using augmented reality glasses to repair cars
Porsche prides itself on its high-tech sports cars. But now it's bringing that passion for the cutting edge to its service departments.
The German automaker announced Tuesday that it is supplying its 189 U.S. dealerships with augmented-reality glasses that can help mechanics solve issues that arise on today's increasingly complex automobiles.
With the AR glasses on, a service technician can conference in a Porsche specialist located at the company's U.S. headquarters in Atlanta and be talked through a repair job - the technician can stream live video of the problem area, while the remote support worker can post helpful repair tips in the worker's peripheral vision.
"By solving issues fast, our dealer partners can get their customers back into cars with less disruption," Porsche Cars North America CEO Klaus Kellmer said in a statement.
Called Tech Look Live, the new feature connects Porsche dealerships with dedicated repair technicians at headquarters. Tech Look Live can also be used by the company's roving Field Technical Managers who may be executing repairs on the road.
Porsche says today's cars - now considered rolling computers often with complicated propulsion systems that combine gasoline and battery powered engines - prompted the decision to use AR glasses to help mechanics. The company is working on its first all-electric Tesla competitor, the Mission E sedan.
In addition, Porsche is also trying to win back to its dealership repair centers customers of older cars who currently might service their vehicles with independent mechanics. The infrequent nature of dealership repairs on Porsches that are decades old makes Tech Look Live valuable to a new car mechanic perhaps seeing an older component for the first time.
Porsche says 70% of all the cars made during the company's 70-year history are still on the road. Fixing such older cars at dealerships would represent a significant new source of revenue.
The glasses mechanics will use are ODG R-7 smartglasses, made by San Francisco-based Osterhout Design Group. Unlike virtual-reality glasses such as Oculus Rift, which block out the real world, augmented-reality glasses such as the R-7s allow wearers to see the real world while other images can be overlaid in the periphery.
Most industry experts expect AR glasses to be a much bigger market than gamer-focused VR, but neither tech application has taken off as was previously predicted. Part of the reason for VR's slow adoption is the lack of non-gamer applications, as well as the sometimes disconcerting nature of blocking out real-world inputs.
Augmented reality also still lacks populist use cases. But it has slowly gained popularity in business enterprise cases where workers need to keep their hands free to perform a task. Workers on remote oil wells, surgeons and, now, mechanics are good use-cases for AR glasses.
Another big factor in keeping AR in its infancy is price. Glasses such as the R-7 cost in excess of $2,000 a pair.
Porsche's technicians won't be using R-7s for every repair. In fact, the company estimates that of the several hundred repairs each dealership handles every month, only a few particularly complex or unusual repairs will warrant the AR assist.
Porsche dealers began signing up for R-7 glasses last month, and 75 outlets are expected to receive the specs this year with the rest coming on board in 2019.