Silicon Valley startup Aeva aims to give driverless cars better vision

In January, with funding from Lux Capital and other venture capital firms, two former members of Apple’s Special Projects Group, Soroush Salehian and Mina Rezk, started Aeva.

The company aims to improve the ability of self-driving cars to see their surroundings, according to New York Times report. Salehian and Rezk are reimagining Lidar—that is, Light Detection and Ranging—technology, which today’s self-driving cars use along with cameras, radar, GPS antennas, and other implements to create a picture of the world around them.

Aeva’s lidar, the company says, measures distances more accurately than other such systems. And, unlike other lidar systems, Aeva’s judges velocity. It is also smaller and less expensive than today’s lidar technology.

Aeva aims to have it on the market by 2018.

Traditional lidar devices emit pulses of light and measure their wavelength and return times to determine how far away a given object is. Then, computers use the data to construct three-dimensional models of the surrounding world.

But, today’s lidar systems can only detect objects that are relatively close, and cannot always differentiate between one object and another, the Times notes. As a result, they do not perform well in bad weather or when moving at high speeds.

Radar, which uses electromagnetic waves rather than light waves to map the world, can detect objects at greater distances, making it more suitable when traveling at high speeds, and cameras can “read” street signs and differentiate between, say, a pedestrian and a crosswalk.

So, cameras, radar, lidar and other devices work together to “drive” today’s autonomous vehicles. Driverless cars will likely continue to employ this combination for the foreseeable future, as multiple detection systems represent multiple layers of security.

Lidar devices, along with the rest of the ensemble, are expensive. It costs hundreds of thousands of dollars to outfit a self-driving car with the necessary hardware. The prohibitive cost of production prevents companies from marketing self-driving cars to average consumers. So, the first self-driving cars are not privately owned; rather, they have debuted in the fleets of companies like Lyft and Uber.

But, the Times cites a report by the Boston Consulting Group that projects that the self-driving car market will be worth $42 billion by 2025. For that to happen, companies must find ways to produce the vehicles more affordably.

The Times equates Aeva’s system to a cross between lidar—which is ideal for judging distances—and radar, which is best at detecting speed. Rather than emitting a series of light pulses, the device sends out a constant wave of light. This approach, Rzek told the Times, allows Aeva lidar to produce a better resolution, work better in inclement weather, and handle reflective surfaces better than standard systems do.

“I don’t even think of this as a new kind of lidar,” Tarin Ziyaee, co-founder and chief technology officer at the self-driving taxi start-up Voyage, who has seen the Aeva prototype, told the Times. “It’s a whole different animal.”

Researchers at the University of California, Berkeley, developed a similar continuous-wave lidar system back in 2014, the Times notes. Other companies that develop lira technology, such as Velodyne and Oryx Vision, are exploring similar options, according to said publication.

Lidar’s applications go well beyond driverless cars. Law enforcement uses the technology to create automated speed traps. Lidar may one day track a user’s movements for virtual-reality environments.

Today, video game systems like the Xbox Kinect do not use Lidar, because Lidar devices are too expensive, too bulky, and too power-consumptive for the purpose. But, continuous-wave Lidar systems are cheaper and lighter than pulse-based ones.

Behnam Behroozpour of U.C. Berkeley told phys.org in 2014 that he envisions that Lidar can be used for “a host of new applications that have not even been invented yet.” For instance, cell phones could use the technology to recognize a user and detect his hand motions from across the room, allowing him to control the device with simple hand gestures.

BMW’s first level-5 self-driving offering, which the company plans to release by 2021, will allow human riders to use hand gestures to order Amazon packages, make a dinner reservation, and perform a range of other actions.

Featured image via Wikimedia Commons

Proterra bus sets range record for electric vehicles

Proterra, the California-based manufacturer of electric buses, said Tuesday that its new, 100 percent electric Catalyst E2 model set a range record at a test track in New Carlisle, Indiana, traveling 1,102.76 miles on a single charge, the LA Times reports.

Navistar International, a bus and truck manufacturer that owns the track, verified the test.

The previous record belonged to the Schluckspecht-E, a lightweight, single-seat car that demonstrated a range of 1,013.76 miles six years ago.

The Catalyst E2 is 40 feet long and weighs almost 20 tons—46 times the weight of the Schluckspecht-E, according to Proterra’s statement. It packs 660 kilowatt-hours worth of energy, as opposed to the Schluckspecht-E’s battery capacity of 23-kilowatt hours.

Proterra declined to disclose the speed at which the Catalyst E2 traveled during the test, but a company spokeswoman said per the Times that the vehicle’s trips around the track were “slow and steady.” The Schluckspecht-E, for reference, performed its test run at an average speed of 28 miles per hour.

The test demonstrates the progress electric propulsion technology has made in recent years. Proterra expects all-electric buses and trucks with ranges in excess of 1,000 miles to be commonplace within a decade or so, the Times notes.

Range has long been the limiting factor that has prevented electric vehicles from emerging as viable options for long-haul and mass-transit applications. Diesel trucks and buses routinely travel more than 1,000 miles on a single tank of fuel.

By comparison, the range of Proterra’s current Catalyst E2 model tops out at 350 miles. Moreover, that vehicle takes up to five hours to charge completely, while it takes just minutes to refill a diesel tank.

But, Proterra CEO Ryan Popple says electric vehicles will soon be capable of exceeding the range of their diesel-powered counterparts.

“We’re entering an era where electric vehicles are simply better than internal combustion engines on range,” he said, per the Times.

Electric buses are already far easier and cheaper to maintain than conventional diesel ones, Proterra says. An electric bus requires 30 percent fewer parts and 75 percent fewer brake repairs than a diesel one. Over the vehicle’s lifetime, an electric bus costs $151,000 less to maintain than a diesel bus does, the company says.

Other companies are developing large electric vehicles for long-haul rather than mass-transit applications. Cummins unveiled a 100 percent electric semi cab earlier this month. It boasts a payload of 22 tons. The base model has a range of 100 miles, but the truck can achieve a 300-mile range if additional battery packs are installed.

That vehicle is still in the prototype stage, and the company has offered no firm commitment as to when or whether it will be available on the mass market.

Mercedes has built a fully-electric semi capable of hauling 12.8 tons. Its range is 120 miles. The company will allow 20 drivers to test the vehicle this year and plans to mass produce it by 2020.

Tesla is set to reveal an electric semi in late October. CEO Elon Musk originally scheduled the unveiling for September, but announced last Wednesday that it is now “tentatively scheduled for Oct 26 in Hawthorne.”

Rumor has it Tesla’s truck will boast a range of up to 300 miles, and Musk has made characteristically bold claims regarding the vehicle’s torque.

“With the Tesla Semi, we want to show that an electric truck actually can out-torque any diesel semi,” he said during a TED event, according to drive.com.. “If you had a tug of war competition, the Tesla Semi will tug the diesel semi uphill.”

It may take a while, but electric power is becoming a viable alternative to diesel as a fuel source for large vehicles.

Featured image via Wikimedia Commons

Carpooling service Via closes investment round, plans U.S. and oversea expansion

Carpooling service Via just completed a funding round, the proceeds of which the company intends to use to expand its service in the U.S. and to establish a presence in Europe, TechCrunch reports. Via will begin London operations in the near future, and Paris service soon after.

The amount of the funding round remains undisclosed, but a source told TechCrunch the number was $250 million.

Prior to the investment round, Zirra estimated the company’s value between $450 million and $500 million, TechCrunch notes. Following the round, then, Via could be worth as much as $750 million.

Via provides carpool service to riders seeking a cheaper alternative to operations like Uber and Lyft. A single Via vehicle carries up to five passengers at a time, so customers can book rides for as little as $5 plus tax. An algorithm determines routes in real-time as customers request rides, so unlike conventional public transit systems, Via is not constrained by a preset schedule. The company’s website says the average wait time is five minutes.

Today, Via runs 24-hour service in its hometown of New York City and also operates in Washington, D.C. and Chicago. TechCrunch says the service gives about one million rides per month.

In addition to running its own operation, Via licenses its platform to other transportation companies, including Arriva—a subsidiary of German-based railway company Deutsche Bahn AG—which operates buses, trains, and other mass transit options across 14 countries in Europe, and Keolis, a subsidiary of France-based SNCF, which offers similar service worldwide.

Daimler AG, which owns Mercedes-Benz, led Via’s most recent funding round, and the two companies plan to intensify their partnership. In addition to its contribution to the funding round, Daimler will provide $50 million towards a joint venture project with Via.

The two companies have been collaborating for years, TechCrunch notes. In late 2015, Via joined forces with Mercedes-Benz Research and Development North America, Inc. to launch a pilot program in Orange County, CA, a suburb of Los Angeles. Mercedes provided Via with Metris passenger vans for that trial program.

Daimler and Mercedes will likely provide vehicles for Via’s European expansion as well. The partnership with Via will give Daimler a ready-made sales connection and will provide a platform through which Daimler can develop and test vehicles optimized for carpooling.

As tech-based transportation start-ups change the way consumers approach moving around, automakers are seeking the most efficient ways to adapt to the changes in the industry.

“One big question is, ‘what is the right vehicle?’” Via CTO and co-founder Oren Shoval told TechCrunch “There are the seating arrangements, how you connect the sensors, what kind of door it should have. This is a big piece of mobility.”

Shoval adds that the Via-Mercedes partnership will streamline and solidify Via’s service. “We also believe that the vehicles in the network, at the end of the day, it’s not just an app but a whole service that you are getting. It makes sense to have these things converge,” said Shoval.

Volker Mornhinweg, head of Mercedes-Benz Vans, echoed Shoval’s sentiment that the partnership would improve Via’s service, and added that the collaboration was important to Daimler’s long-term strategy in the changing transportation sector.

“Via is one of the most successful providers in the growing ride-sharing sector while Mercedes-Benz Vans has the perfect vehicles that are being continuously optimized for this job,” he said. “By deepening our cooperation with Via, we are thus taking the next logical step in the context of our strategy for the future and are expanding our range of new mobility services.”

Daimler launched Car2Go, which allows users to rent cars parked in various places around a city and then return those cars to one of many drop zones around town, in 2008. Now, Car2Go operates in 26 cities across North America, Europe and Asia, and serves 2.5 million registered members.

Daimler, in tandem with Audi and BMW, bought GPS mapping service Here in late 2015 and has independently acquired a number of ride-sharing companies, including Germany’s MyTaxi, the U.K.’s Hailo, and Taxibeat in Greece. All three of those services have merged under the MyTaxi umbrella since Daimler acquired them.

Featured Image via Wikimedia Commons

Chrysler to join BMW, Intel in autonomous driving consortium

Italian-American automaker Fiat Chrysler announced plans Wednesday to join an autonomous car development consortium with Germany’s BMW and American tech giant Intel, MarketWatch reports. UK-based Delphi Automotive PLC and German component manufacturer Continental AG each joined the group earlier this summer.

Israeli collision-avoidance software developer Mobileye was originally an independent member of the alliance, but in March, Intel acquired Mobileye.

The group has released a statement indicating intentions to build a self-driving framework “that can be used by multiple automakers around the world, while at the same time maintaining each automaker’s unique brand identities.”

The coalition aims to have a fleet of 40 test vehicles on the road by the end of the year. BMW said in March that it plans to field a Level 5 autonomous vehicle by 2021.

“In order to advance autonomous driving technology, it is vital to form partnerships among automakers, technology providers and suppliers,” Fiat Chrysler CEO Sergio Marchionne said in a statement. “Joining this cooperation will enable FCA to directly benefit from the synergies and economies of scale that are possible when companies come together with a common vision and objective.”

In May, Fiat Chrysler partnered with Google’s parent company, Alphabet, whose self-driving subsidiary is branded Waymo. In total, the automaker has given Waymo 600 Chrysler Pacifica minivans.

Marchionne has indicated that the Alphabet-Chrysler alliance is by no means exclusive.

“We need to be ready to collaborate with as many people as we can find,” he said in the company’s quarter two earnings report.

USA Today points out that cooperation is key to defraying the prohibitive costs of an autonomous vehicle, particularly for a company like Chrysler, which may be unable to allocate a huge budget toward autonomous vehicle development.

At this stage, investments in autonomous vehicle development are not yielding fruits on the bottom line because the gap between the capabilities of the technology and the trust levels of consumers is too wide to justify selling self-driving cars on the open market.

Marchionne has voiced concerns about the liability associated with the safety questions around self-driving cars. He also worries about the lack of regulation in place to assign responsibility for that liability.

For instance, if a Fiat Chrysler vehicle featuring, say, technology developed by Waymo and cameras built by Nvidia malfunctions, there are no regulations governing which of those companies would be held legally responsible.

“That’s a big issue going forward, because when you’ve got tier-one suppliers that will start providing autonomous driving equipment — both software and hardware — into these vehicles, the question about who owns liability associated with the running of those operations is a big issue yet untouched,” Marchionne said in January, per Aaron Marsh of FleetOwner.

Still, cooperation seems to be the strategy across the industry with respect to the push toward autonomous vehicles, although Ford and General Motors each has its own in-house self-driving development operation.

Auto manufacturers are increasingly partnering with tech companies and component-producers. Such automotive giants as Audi, Tesla, and Toyota have partnered with Nvidia Corp., whose Drive PX platform is among the most advanced systems of autonomous driving technology in the industry.

In April, Damlier AG, of which Mercedes-Benz is a subsidiary, formed an alliance with components producer Robert Bosch GmbH. Together, the companies are working toward developing a fleet of autonomous taxis that customers can hail. If the plan takes shape, the automotive alliance will compete with ride-hailing companies like Uber and Lyft.

Google’s Waymo has unveiled a similar system in Phoenix. Using an app proprietary to Waymo, customers can hail one of the 600 Chrysler vans mentioned above

Damlier and Bosch have also developed an autonomous valet system that can navigate a multi-story parking garage, find a spot, and park with no human input.

Featured image via Wikimedia Commons

Tesla’s semi-truck will be electric, Autonomous

Tesla will meet with the California and Nevada Departments of Motor Vehicles to talk about testing a semi-truck in those states, Bloomberg reported Wednesday. 

In April, CEO Elon Musk tweeted that the company planned to “unveil” an electric semi-truck in September. Many had speculated that that vehicle would be autonomous or semi-autonomous.

“It’s at least a semi-autonomous truck,” Ben Kallo, an analyst at Robert W. Baird & Co., told Bloomberg in April.

The reported discussions between Tesla and the DMVs confirm that the semi will drive itself to some degree. A DMV spokeswoman told CNBC that Tesla had “requested the meeting to talk about…efforts with autonomous trucks,” but added that the DMV “is not aware of the level of autonomy of the trucks.”

In an email to a Nevada DMV official, Tesla regulatory official Nasser Zamani wrote, per CNBC: “…our primary goal is the ability to operate our prototype test trucks in a continuous manner across the state line and within the States of Nevada and California in a platooning and/or Autonomous mode without having a person in the vehicle.”

“Platooning” involves programming vehicles to autonomously follow one another in a formation or “platoon,” CNBC says.

Tesla is headquartered in Palo Alto, CA. It’s only production facility is in Fremont, CA, and its battery gigafactory is in Sparks, Nevada, just over 15 miles east of the CA-NV border, Bloomberg noted. So, it is logical for Tesla to begin testing its autonomous trucks in those states.

However, the electric automaker will face regulatory hurdles. A spokesman for the Nevada DMV said, per Bloomberg, that Tesla does not have and has not as yet applied for a testing license in the state. According to CNBC, “no companies yet have tested self-driving trucks in Nevada without a person in the cab.”

Moreover, California Highway Patrol does not permit testing of vehicles weighing more than 10,000 pounds (as Tesla’s truck will). However, a California DMV spokeswoman told Bloomberg her department is working to draft regulations governing the testing of such vehicles.

Many companies are developing autonomous long-haul transport vehicles. CNBC says commercial transport may be the ideal early market for autonomous technology, as trucks maintain constant speeds, and encounter minimal traffic on most interstates.

Nobody anywhere has developed an electric long-haul transport vehicle; battery range has been prohibitive. Tesla’s luxury Model S and Model X offerings are among the longest-range electric vehicles on the market today. The former can travel 335 miles on a single charge, the latter 295. A tank of diesel, on the other hand, can carry today’s trucks for 500 miles, CNBC says.

CNBC cites Venkat Viswanathan, a lithium ion battery researcher at Carnegie Mellon University, as saying that the battery needed to sustain a long-haul-transport electric vehicle would be so large they would become the trucks’ cargo.

Still, Musk maintains his trademark confidence.

The development of the semi is another in a string of recent efforts by the progressive automaker to expand into a wider array of markets. Tesla is set to mass produce its Model 3, a mid-market car priced around $35,000. The company also plans to release a “next-gen,” convertible version of its first ever car, The Roadster, Musk said in a comment on the April tweet referenced above. In another comment on the same tweet, he said the unveiling of a pickup truck was scheduled for 18-24 months’ time.

“The important thing is that while everyone is focused on the Model 3, there are a lot of other projects going on at Tesla,” said Kallo in April’s Bloomberg report. Per the same article, analyst James Albertine of Consumer Edge Research said Tesla’s ventures into new markets should excite investors.

The automotive industry is accelerating toward a future of electric, autonomous vehicles, and Tesla looks poised to capitalize on both fronts. Investors are showing their faith. Since December 30, the company’s stock has climbed almost 70%. Since Musk’s April 13 Twitter statements, Tesla shares are up 18.4%.

Featured image via Wikimedia Commons

SoftBank Looks to Make Inroads Into US Ride-Hailing Sector

SoftBank CEO Masayoshi Son has indicated intentions to make inroads into the US ride-hailing market with a multi-billion dollar investment in Uber or Lyft, CNN’s Sherisse Pham reports.

At a news conference Monday, Son said his company was “definitely interested” in pursuing a partnership with one of the two ride-hailing operations. Son expects a boom in the ride-hailing industry to accompany the rise of self-driving cars.

“…when that stage comes [i.e. when autonomous cars sponsored by ride-hailing companies hit the streets],” said Son, “this ride share business becomes even more important.”

SoftBank already holds sizable stakes in a host of Asian ride-hailing companies, including China’s Didi Chuxing, India’s Ola, Brazil’s 99, and Singapore’s Grab. According to The Wall Street Journal, Son’s interest in Uber may indicate that he believes the US startup will combine its operations with Ola and Grab

Uber has set a precedent of willingness to partner with local companies in international markets. After a heated competition between Uber and Didi Chuxing ended in a stalemate, Uber agreed to sell its Chinese business to Didi in exchange for a 20% stake in the Chinese company. In July, Uber announced plans to strike a similar deal with Russia’s YandexTaxi.

On July 25, the Wall Street Journal reported that SoftBank was considering investment in Uber, but said negotiations between the two companies were “preliminary and one-sided.” A deal would likely be postponed until Uber appointed a new CEO in the wake of former chief Travis Kalanick’s resignation over sexual harassment allegations in June. The scandal also left the company without a chief operating officer, a general counsel, and an independent board chair, according to Bloomberg. On August 4, The Washington Post reported that Uber’s shortlist for the CEO position had been cut to three people.

The management vacancies, coupled with the increasing success of Lyft, are prompting many early Uber investors to jump ship. Sources told Bloomberg two such investors are negotiating to sell their stakes to larger investment firms.

With a market cap of $89.7 billion, SoftBank is among Japan’s most valuable companies. Its subsidiaries include Sprint, Yahoo! Japan, Myspace Japan, and myriad others.

In May, SoftBank, along with Saudi Arabia, Apple, and others, formed a $100 billion dollar tech fund, called the Vision Fund, that “will focus on investments of more than $100 million in technology businesses of the future,” according to a CNN report. It is unclear whether SoftBank’s investment in Uber or Lyft will be pulled from that fund.

Last Thursday, SoftBank contributed $250 million to Kabbage, a financial technology company based in Atlanta, GA. Kabbage, a next generation lending company, uses an online system to quickly evaluate a small business’s eligibility for a capital loan. According to the company’s website, the evaluation process analyzes business performance as well as credit score, and a customer can gain approval for a loan in less than 10 minutes. The website also says Kabbage has lent more than $3.5 billion dollars worth of funding to more than 100,000 businesses.

Kabbage licenses out its technology to traditional banks who wish to offer automated lending; the program is currently used by banks like Banco Santander SA (SAN.MC), ING Groep NV, and Scotiabank. SoftBank is the first Asian player outside of China to enter the automated lending space.

Son’s press conference on Monday coincided with the release of SoftBank’s quarterly earnings report, in which the company reported $4.33 billion worth of profit—a 50% year-over-year increase. The jump came after SoftBank included the Vision Fund as a reportable segment for the first time.

Profits were further boosted by the success of Sprint, in which SoftBank owns an 80% stake. The cellular service provider reported its first profit in more than three years Monday. SoftBank is considering a potential merger between Sprint and T-Mobile, or between Sprint and Charter Communications Incorporated.

SoftBank’s shares have risen just over 1% since Monday.

Featured Image via Flickr/Nobuyuki Hayashi

Toyota & Mazda Will Join Forces to Build Manufacturing Plant in US

Toyota announced Thursday that it will join forces with Mazda to build a $1.6 billion assembly plant in the U.S., The New York Times reports.

The plant will be operational by 2021 and will create 4000 jobs and produce 300,000 vehicles a year, according to The Wall Street Journal. Half of the vehicles would be Toyota Corollas, and the other half would be “an unspecified Mazda model, according to the Wall Street Journal.

A source told the Journal the two automakers would also “co-develop electric vehicles, safety features and connected-car technologies.”

Mazda and Toyota have shared technology before. In May 2015, they partnered in an effort to defray the cost of producing fuel-efficient vehicles. Toyota shared its plug-in hybrid and fuel cell technologies, while Mazda offered technology to optimize the fuel-economy of gas and diesel engines. Toyota mentioned the 2015 agreement in its statement, indicating that the assembly plant endeavor was the latest fruit of prolonged “[exploration of] various areas of collaboration” with Mazda.

As part of the deal, Toyota will purchase a 5% stake in Mazda.

A source told the Wall Street Journal in May that “Toyota President Akio Toyoda is concerned that [his company] tends to be too inward-oriented, and feels it needs to open up more to work with and learn from other companies.”

Toyota partnered with Subaru’s parent company, Fuji, in 2011, and has worked with Tesla.

Mazda, for its part, held a partnership with Ford from 1974 until 2015. From 1996 until late 2008, Ford owned a third of Mazda. The two companies worked together at an assembly plant in Flat Rock, Michigan. The new plant will be Mazda’s first manufacturing venture in the US since the automaker abandoned Flat Rock in 2012.

Toyota already has a host of factories throughout the southern and midwestern US, in states including Indiana, Kentucky, Mississippi, and Texas.

As Japanese brands capture an increasing share of the US market, many have migrated production to the U.S. so as to “be closer to the U.S. market and reduce exposure to currency fluctuations,” says Adrienne Roberts of The Wall Street Journal. According to a June 2016 report by Dan Eaton of bizjournals.com, 75% of Japanese vehicles sold in the USA are also produced here. In 2015, the three largest Japanese automakers built 3.48 million cars on American soil. The three biggest American manufacturers at the time—Chrysler, Ford, and GM—built 6.44 million vehicles on their home turf.

In other words, Japanese manufacturers had about half as much production presence in the US as native companies. But, if we isolate car production—that is, remove trucks, SUVs, crossovers, etc. from the picture—Japan outproduced America by a tally of 1.75 million to 1.53 million in 2015.

To frame the data another way, half of the vehicles made in America by Japanese companies were cars (i.e. sedans, etc.), while less than a quarter of American vehicles produced domestically were cars.

Companies like Toyota and Mazda are looking to shift their focus toward trucks, SUVs, and crossovers as demand for sedans falls in the US market, partly as a result of low gas prices.

Japanese car brands have only increased their production operations to the States in the years since 2015, and the White House is encouraging them to do so. Toyota originally planned to shift its Corolla production to a $1 billion facility in Mexico but canceled those plans when President Trump threatened an import tax. 

Following Trump’s objection, Toyota released a statement (per WSJ) saying, “Toyota looks forward to collaborating with the Trump Administration to serve in the best interests of consumers and the automotive industry.” The newly announced plant may be their compromise.

Müller Battles Traditionalism As He Pulls Volkswagen Into the Modern Age

Müller Battles Corporate Traditionalism As He Pulls Volkswagen Into the Modern Age

Volkswagen AG CEO Matthias Müller is fighting against a corporate culture of traditionalism to bring the company into the future of electric vehicles, autonomous driving, digital integration, and ride-hailing partnerships, William Boston of The Wall Street Journal Reports.

“Volkswagen must change,” Müller said in May, “because our industry is going to change more deeply in the coming 10 years than in the 100 years before.”

Despite widespread support of modernization amongst the company’s shareholders, many top Volkswagen managers continue to prefer traditional approaches in many aspects of the business.

Some remain convinced the internal combustion engine is a “proven and superior technology,” Boston writes, and are resisting efforts to dethrone fossil-fuel based propulsion technology as the cornerstone of the auto industry.

Those convictions laid the groundwork for a scandal that Boston says cost the company $25 billion in “fines, penalties, and customer compensation” When the U.S. tightened its emissions regulations in the mid-to-late 2000s, environmental officials advised Volkswagen to shift production efforts toward hybrids and electric cars. Instead, engineers at the German automaker set about to design a diesel engine that could pass the new emissions tests. When those efforts failed, the engineers manipulated the engine software so that vehicles appeared to meet requirements although they did not.

The scandal broke in 2015, and led to the termination of then-CEO Martin Winterkorn and the internal promotion of Müller, who had spent the previous five years as the head of Porsche, which Volkswagen AG owns, to fill the position.

In an effort to pull Volkswagen in a more progressive direction, Müller is emphasizing electric car development and technological advancement. Early in his tenure as CEO, he advanced a plan to “generate at least 25% of sales from electric cars” (Boston’s words). Volkswagen will “triple investments in electric vehicles to $10 billion” by 2025, Boston says. Müller aims to develop 30 electric models across all brands, which include VW, Audi, Bentley, Bugatti, and Lambourghini, over the coming years.

According to Boston, Volkswagen is already capturing an increasing share of the plug-in vehicle market. “VW sold 63,392 plug-in vehicles in 2016,” he writes, “achieving an 8.2% share of global plug-in passenger-car sales of 775,417, according to EV-Volumes, a research group.”

A prominent VW executive, Boston reports, said Müller was “driving the nails into [Volkswagen’s] own coffin” by pursuing electric vehicles.

Five weeks after his promotion, Müller hired Johann Jungwirth, then a top engineer in Apple’s efforts to make inroads into the auto industry, to bring Volkswagen into the digital age. One executive said, per Boston, that Jungwirth was “getting on a lot of people’s nerves.”

Nonetheless, many of the future electric models will feature autonomous driving technology and state-of-the-art digital integration. Sedric, which debuted at the Geneva auto show in March, will be Volkswagen’s first fully autonomous car. It is free of pedals and a steering wheel.

Müller is also propelling his company into partnerships with ride-hailing services. Traditionally, Volkswagen management has shunned partnerships in favor of self-reliance. In May 2016, though, on the advice of his chief strategist, Thomas Sedran, Müller invested $300 million in ride-hailing company Gett on behalf of Volkswagen.

Gett is the centerpiece of Volkswagen’s Moia brand, which is dedicated to “changing mobility in urban environments” through “electric mobility, data and technology, and autonomous cars,” according to a statement by Moia CEO Ole Harms. Though Gett drivers currently use their own cars, Volkswagen has ambitions of building cars for the service.

Automakers are increasingly making inroads in the ride-hailing and car rental sectors, the theory being that new transportation services, which may ultimately drive down sales of personal automobiles, will also provide replacement revenue.

Volkswagen will have work to do to catch up to many of its competitors in the “alternative transportation” market. Damlier AG, which controls the Mercedes-Benz brand, created Cars2Go, which allows users to rent cars immediately via an app, in 2008. Today, more than 2.3 million people worldwide use the service. It is Europe’s biggest ride-sharing company.

GM and others have partnered with Lyft, and plan to use the service to hone autonomous driving technology.

“This shift to electric and digital mobility services is the right thing [for Volkswagen] to do, but it comes five or six years too late,” says Ingo Speich, a fund manager at Union Investment, a VW shareholder. “Volkswagen has lost any first-mover advantage because they kept clinging to the old way of doing things.”

Still, with Müller’s ambition propelling it, the company is poised to roar into the future.

A prominent VW executive, Boston writes, said Müller was “driving the nails into [Volkswagen’s] own coffin.”

Toyota-Tesla Partnership a Thing of the Past, Spokeswoman Confirms

A Toyota spokeswoman said Monday the company sold off its shares in American automaker Tesla last year, CNN’s Alec Macfarlane reports.

Toyota purchased a stake in Tesla as part of a cooperation agreement the two companies formed in May 2010. Back then, Tesla sold just one model, the avant-garde Roadster. In total, 2400 Roadsters were sold. So, Toyota and Tesla were far from competitors, and Toyota stood to benefit from some of the electric parts Tesla was developing. Soon after the pact was forged, Toyota began production of a RAV4 model that incorporated the Tesla powertrain used in the Roadster. The companies allegedly signed a contract to produce electric cars together.

But that contract expired in 2014, according to the aforementioned spokeswoman, and the companies’ relationship, Macfarlane says, was frayed by culture clashes.

In 2010, Toyota bought $50 million worth of Tesla stock just before the latter company went public. By 2016, Tesla’s shares were worth more than ten times their IPO price. As of March of that year, Toyota owned  2.3 million Tesla shares worth a total of $538 million.

The spokeswoman did not disclose the exact time at which Toyota sold off its Tesla stake, nor the price for which said stake was sold, but it stands to reason Toyota made a considerable profit on its investment in Tesla.

But, Tesla’s stock continues to soar. Since January 3rd, the company’s share price has risen $112.93 (52%), from $216.99 to $329.92. Toyota appears to have jumped off the train prematurely.

Tesla’s success in the market this year, though, comes in response to the company’s plans to ramp up production and begin offering mass market vehicles like the Model 3. Tesla is transitioning from a little niche enterprise to a powerful force in the auto industry. As such, it is becoming one of Toyota’s most formidable competitors.

“Tesla has developed beyond being a test bed for interesting electric vehicle technologies to becoming a full-fledged competitor of traditional automakers in the electric vehicle space,” James Chao, Asia-Pacific managing director for consultancy IHS Automotive told Macfarlane. “It makes sense that Toyota is distancing themselves from Tesla.”

Competition between Tesla and Toyota is intensifying further as the Japanese automaker, along with a host of its fellow traditional car manufacturers, prepares to increase its presence in the electric car market. In November 2016, Toyota announced plans to create an “in-house venture company responsible for developing electric vehicles (EVs).”

“Differing energy and infrastructure issues around the world and the rapid strengthening of regulations aimed at increasing the use of zero-emission vehicles have heightened the need for product lineups that can respond to various situations,” Toyota said in the statement. “As such…TMC has decided to create a structure that will allow it to commercialize EVs at an early stage, as an alternative means of achieving zero emissions.”

The “strengthening of regulations” has continued in 2017, with France, India, and Norway, among others, pledging to take immense strides to encourage the production of environmentally friendly vehicles.

Toyota said in its statement that it has placed a particular emphasis on the development of fuel cell vehicles as alternatives to gas powered cars. The statement claims such vehicles, whose fuel cells generate power from oxygen and compressed hydrogen, are—unlike today’s battery powered EVs— “on par with that of current gasoline-powered vehicles” in terms of “cruising range, fueling times, and other aspects.”

Toyota said it would continue its “promotion of FCVs,” but also hinted at plans to expand its endeavors toward electric vehicles in other directions.

In a business atmosphere in which friends become enemies and enemies become friends, Toyota and Tesla have drifted apart. Competition between the two could provide consumers with a number of diverse options in the electric car market.

Featured image via Wikimedia Commons

Audi’s Semi-Autonomous, Hybrid A8 Slated For Release in 2018

The Audi A8, which debuted Tuesday at the Audi Summit in Barcelona, represents the company’s boldest foray yet into the next generation of auto manufacturing. The car should make its way onto the road in 2018. At the time of this writing, Audi has not released pricing information.

The A8 will feature the most advanced autonomous driving technology of any Audi ever made, Benjamin Zhang of businessinsider.com reports. It will be able to take full control of itself on divided highways at speeds under 37.3 miles per hour, using cameras, ultrasonic sensors, and a front-mounted radar. In total, the car will boast 41 “driver’s assistance features,” including the ability to self-park.

Moreover, all A8s will mild hybrids, and Audi will offer one specialized hybrid version. Following Volvo’s announcement that it will produce hybrids and other electric vehicles exclusively beginning in 2019, and France’s pledge to stop the sale of fossil fuel powered cars by 2040, Audi is the latest automaker to take steps toward eco-friendly automobiles.

Buyers of mild hybrid A8s will be able to choose between a 340 horsepower, 3.0 liter turbocharged V6; a 460 horsepower, 4.o liter turbo V8; and a 585 horsepower, 6.0 liter W12, all of which will be able to shut off when the car is stopped or coasting.

The most advanced hybrid option “will get a 449 system hp, hybrid drive unit featuring a 3.0 liter gasoline V6 and an electric drive system,” Zhang says, and will be able to travel a range of 31 miles under 100% electric power.

Inside the A8, drivers will enjoy in-car 4G LTE connectivity and a HUD operated exclusively by touch screen. From the outside, the A8 is aesthetically similar to the most recent iterations of Audi’s A4 and A5.

As a semi-autonomous, hybrid vehicle, the A8 gives us a glimpse of the future. Some car manufacturers have been flirting with that future for a while, though. In late 2015, Tesla released its Autopilot, which took over for drivers on the highway, requiring “little to no steering input,” according to Jordan Golson of The Verge,

Mercedes’ 2017 E-Class featured that company’s first stab at autonomous driving technology, Drive Pilot. That first iteration of the Drive Pilot system could handle about 20% of driving duties, said Damlier board member Ola Källenius, and did not present any real competition for the Tesla.

This month, though, Mercedes will begin production of its 2018 S-Class, which will come equipped with the second generation of Drive Pilot, which Källenius says will be able to perform 80% of driving tasks. Golson, who tested the new S-Class, says its autonomous driving technology is “better than [Tesla’s].”

Audi’s A8 and Mercedes’ 2018 S Class are “level 3 autonomous,” as are all Tesla vehicles that employ the current Autopilot system. A level 3 autonomous car can operate itself with periodic input from a driver (e.g. touching the wheel).

Level 4 and Level 5 autonomous cars are being developed, but none are available for purchase today. Under the right conditions and in the right environment, a Level 4 autonomous car can complete entire trips for a driver. Level 5 autonomy means a car can operate on city roads and highways with no input whatsoever from the driver.

By 2021, BMW plans to release a fully autonomous vehicle with “Level 3,  Level 4, and Level 5” capabilities. That car, which several reporters, including CNBC’s Deborah Findling, have already been permitted to test, will be able to control itself while human “drivers” order Amazon packages, make dinner reservations, etc. using an integrated technology called “mobility cloud” that responds to hand gestures.

Almost by itself, the auto industry is going full steam ahead, using less and less fossil fuels. With the A8, Audi will step into the future, and early indications are that the German carmaker, originally founded in 1910, will do so with flare.

Volvo to Produce Electrified Automobiles Exclusively Beginning in 2019

Beginning in 2019, Volvo will stop producing automobiles powered solely by gasoline and will build hybrids and fully-electric vehicles exclusively, CEO Hakan Samuelsson announced in a statement Wednesday. The Sweden-based, Chinese-owned company will be the first mainstream auto manufacturer to offer only electrified vehicles.

“People increasingly demand electrified cars and we want to respond to our customers’ current and future needs,” Samuelsson said.

Today, only 3% of cars sold worldwide are electric, but Navigant Research expects electrified vehicles to account for about 9% of global new car sales by 2025. That year, Volvo aims to sell 1 million fully electric or hybrid cars.

Most of the electrified cars sold today are 48-volt “mild hybrids” whose electric power systems allow the engine to turn off when the car is coasting, braking, or stopped, then restart quickly upon acceleration. “Mild hybrids” also use electricity to power things like air conditioners and water and oil pumps.

All told, mild hybrids get 10-15 percent better gas mileage than traditional cars, according to Sam Abuelsamid of Navigant.

Manufacturers including GM, Chevrolet, and Toyota have offered mild hybrids options in the US. Audi and Mercedes Benz are selling mild hybrids in Europe to meet tightened fuel economy and emissions regulations. Those European cars may soon be exported into the American market.

All automakers are increasing production of hybrids, and many are expected to make announcements similar to Volvo’s in the near future. Abuelsamid predicts luxury brands will be the first to go all electric, while manufacturers with high volume models with take longer to do so.

Meanwhile, some auto companies are introducing fully electric vehicles into the mid-level market. Earlier this week, Tesla, Inc. announced plans to exponentially increase production of a one hundred percent electric car dubbed the Model 3, which it will sell for $35,000. The fully electric Chevrolet Bolt EV is comparably priced.

Volvo will roll out five fully electric offerings between 2019 and 2021.

Yet at the moment, consumers still prefer hybrids, which are generally cheaper and more practical than all-electric cars.

Perhaps the most significant limiting factor for fully electric cars is their range—that is, the distance they can go on a single charge. Most electric cars take between six and 12 hours to charge fully, although a few can do so in less than four hours. Tesla’s Model 3 is expected to have a range of about 215 miles; the Chevy Bolt’s range is 238 mph. The longest-range option on the market today is the Concept One built by Croatian automaker Rimac, which boasts a 311 mile range and a proportionate price tag just under $1 million.

Drivers who need to cover great distances in short periods of time would be inconvenienced by a Bolt, a Model 3, or even a Concept One. A 400 mile drive would take at least two days, as the car would need to be charged overnight at least once along the way. With car charging stations still few and far between throughout the US, travelers would be forced to plan itineraries carefully.

However, range is increasing and charge time is diminishing. Volvo expects some of the all-electric cars it builds in the coming years to have ranges in excess of 300 miles, and the company is continuously pursuing advances in battery technology. This year, British manufacturer Lightning plans to begin production of its GT, which will purportedly charge itself from 0-100% in under an hour.

With Volvo having set a bold precedent for car manufacturers, many competitors are likely to follow the 90-year-old company’s lead.

Soon, drivers will begin seeing more and more electrified cars, hybrid and full, on the roads, and people will be breathing cleaner air and enjoying quieter environments.

Automakers’ Shares Rise Despite Decline in Sales

US automakers reported a decline in new vehicle sales for the fourth straight month on Monday.

Experts anticipated the dip, which comes on the heels of a record-setting 2016 in which 17.55 million new vehicles were sold. Retail sales numbers, which account for the sale of used cars, remain stable, and industry stocks are rising despite the underwhelming reports.

GM’s shares increased by 1.8% Monday, despite a 5% drop in sales as compared to last June. Ford’s shares jumped 3.3%.

GM’s chief economist, Mustafa Mohatarem, notes that “key U.S. economic fundamentals clearly remain positive,” and expects “U.S. retail vehicle sales [to] remain strong for the foreseeable future.”

Notice that Mohatarem mentions retail vehicle sales, not sales of new vehicles.

A preponderance of like-new used automobiles has flooded the market, and likely will not go away anytime soon.

An increasing number of consumers prefer to lease cars rather than buying them. When the leasing term expires, many leased cars wind up back on the lot, to be sold as used vehicles. Therefore, a trend toward leasing vehicles is often accompanied by an increase in used car sales and a proportionate decrease in new car sales.

When sales of new cars drop, companies are prompted to offer attractive leasing agreements and to lease cars they would otherwise sell new. As a result, more cars are leased and more cars are sold used.

It is a self-perpetuating cycle. But with the length of the average car loan standing at a record high of 69.3 months according to edmunds.com, economists wonder how sustainable it is for the consumer.

“[Such a long lease] is financially risky,” says Jessica Caldwell, executive director of industry analysis at Edmunds, “[and leaves] borrowers exposed to being upside down on their vehicles for a large chunk of their loans.”

Another reason for the drop in new car sales is companies’ increasing reluctance to sell cars to rental agencies. Such sales yield relatively small profit, and Mohatarem says the “pullback in daily rental sales” is “industry-wide.”

Ford’s sales to rental agencies fell 13.9 percent in June, but there was no change in the company’s sales to consumers.

Another trend found in the data is consumers’ preference for large vehicles—SUVs, trucks, and crossovers—as opposed to small, passenger vehicles.

Nissan and Toyota were among the few companies whose sales increased in June 2017 exceeded their sales in June 2016. Both companies reported increases of approximately 2%. In both cases, the increases come due to huge jumps in SUV sales.

Sales of Toyota’s 4Runner, an SUV rose 16.6 percent, and sales of its more affordable SUV option, the RAV4, saw a 24.7 percent spike. Nissan sold 19.5 percent more trucks, SUVs, and crossover vehicles than it did last June, but 12.1% fewer sedans.

At the beginning of the decade, when the price of gas in the US began to climb above $3.00 a gallon, consumers were eager to ditch their gas guzzlers in favor of small, fuel-efficient alternatives. Now, with the average gas price hovering just above $2.00, Americans seem to opt for space rather than fuel economy or eco-friendliness.

Whether consumers in the US are buying SUVs or Priuses, they certainly aren’t buying new ones. Still, the health of the automotive industry does not seem to be in jeopardy. The avenues by which companies generate revenue are changing as consumers choose used cars and leases over brand new vehicles.

Moreover, it is only natural for a downturn like a 4-consecutive-month sales decreases to follow a record-setting boom. It is worth bearing in mind that all reported decreases are relative to June of last year when the industry was in the midst of a huge upswing.

Unless the entire interstate system breaks down or a personal hovercraft is invented, American consumers and automotive companies will maintain a fruitful and happy business relationship for years to come.

Tesla to Ramp Up Production of Its Mid-Market Model 3

Tesla, Inc. plans to mass produce a budget-friendly electric automobile for the first time.

With a $35,000 price tag and a range of 215 miles per charge, the company’s new Model 3 will cater to the average consumer. Tesla aims to produce 30 Model 3s by the end of July, and 20,000 a month (240,000 per year) beginning in December.

CEO Elon Musk wants “to get as many cars on the road as possible,” he says.

At least 380,000 people, 93% of whom would be first time Tesla customers, have paid $1,000 refundable deposits to reserve Model 3s. If production proceeds as Musk intends, Tesla will be able to fill those customers’ orders by 2018, at which point the Model 3 would become available on the open market. Tesla expects to build a total of 500,000 vehicles in 2018, and a million in 2020.

Tesla has yet to prove that it can produce vehicles in such volume. The company ramped up production over a year ago and built a combined 80,000 of its luxury Model X and Model S vehicles in 2016. However, sales of those models dropped 12% this quarter after a shortfall in the 100 kWh batteries that power the cars slowed production.

“We’ve really learned a lot of lessons…from the difficult Model X ramp,” Chief Technology Officer J.B. Straubel said.

Straubel and his team will have to put those lessons to good use. If the Model 3 is to meet the production goals Musk has outlined, it will have to be produced far more efficiently than any Tesla in history.

Unlike the Model X and the Model S, though, the Model 3 was designed with production efficiency in mind. The Model 3’s glass roof, for instance, is installed in the final stages of production. Prior to its installation, robots can enter the car from the top and perform a number of tasks typically done by humans.

Tesla’s automation software may be its primary competitive advantage in the manufacturing arena. The LA Times cites Alexandre Marian, director of AlixPartners consulting firm, as saying that “traditional automakers are struggling to speed up their software development cycles and feeling Tesla’s heat.”

In addition to revolutionary manufacturing technology, Tesla boasts unprecedented “over-the-air” software capable of updating electronic systems remotely, saving drivers a trip to the dealer.

Which is handy, because Tesla does not currently have any conventional dealerships. “Over-the-air” technology cannot perform mechanical maintenance and repair, so if the Model 3 floods the market as Musk hopes it will, the powers that be at Tesla will need to devise a system by which hundreds of thousands of vehicles can be cared for.

Meanwhile, other luxury auto companies are making inroads into the electric car market. Jaguar and Audi are slated to release electric cars next year. Porsche and BMW also have electric vehicles in the works.

If production proceeds on schedule, the Model 3 will be on the market before any real competition gets there. Moreover, because Tesla exclusively produces electric cars, it may be better suited than competitors to capitalize on increasing demand for environmentally friendly, gas-free vehicles.

Tesla’s stock has risen 63% this year, and the company’s market value sometimes climbs above that of General Motors. But its first effort at true mass production could make or break the company. The 2.5% hit the stock took Monday seems to indicate that investors lack confidence.

Despite his ambitious estimates regarding the production of the Model 3, Musk realizes the dangers Tesla faces. In a Twitter post on Monday, he thanked the 380,000 people who preordered Model 3s for “taking a risk on a new car company.”

Tesla could rapidly become an old car company if it does not meet its production goals. If it does meet those goals, it could become legendary for having revolutionized the auto industry.

Hyundai and Kia Announce Recall of 1.4 Million Cars

It appears that Ford isn’t the only automaker to be making recalls on its vehicles. Hyundai and Kia are recalling over 1.4 million cars in the United States, Canada, and South Korea. The cause? There’s trouble in the engine that can cause it to fail or even stall which can result in car crashes.

This huge recall spans to some of the most popular of the Korean car maker’s brands. Those recalled in the U.S. and Canada included the 2013 and 2014 Hyundai Santa Fe Sport SUV and Sonata midsize cars. There are also the 2011-2014 Kia Optima midsize models, 2011-2013 Kia Sportage SUVs, and the 2012-2014 Kia Sorento SUVs.

The vehicles that are being recalled in South Korea are the 2009-20012 Hyundai Grandeur and Sonata sedans as well as the Kia K5, K7 and Sportage models. All these vehicles, as well as the ones mentioned in the United States and Canada, have 2-Liter or 2.4-Liter gasoline engines.

Both Hyundai and Kia announced Friday that documents from the U.S. National Highway Traffic Safety Administration stated that there could be debris left over from manufacturing in the engines which could then result in the restriction of oil flow to connecting rod bearings. Those rods are cooled by the oil, but the restriction can lead to increase in temperature which will then cause the rod bearings to wear and fail. This ultimately leads to the engine stalling.

Hyundai and Kia will begin alerting owners of the recall while dealers begin inspecting engines. Dealers are to begin replacing the block in the engine free of charge to owners. There have been no reports of any crashes or series injuries sustained as a result of the engine default.

The recall is the second largest that has occurred in the past two years for the same engine problem. Back in September of 2015, Hyundai recalled over 470,000 of its 2011 and 2012 Sonata sedans that had the same engines.

So, what are owners looking out for? Both companies say that owners will hear a knocking sound in the engine that will increase in frequency as the engine speed increases. There can also be engine lights on the dashboard that will be coming on. The recall is to take place beginning May 19th.

GM Employees Reap Benefit of Sales Through Profit Sharing

Automakers in North America are reaping the benefits of their success through profit sharing. For some 52,000 General Motors employees in the United States, record sales and earnings produced a record profit sharing for the auto company. It is reported by GM this week that some eligible employees will receive up to $12,000 in profit sharing.

Most GM workers at the company’s Lordstown Assembly Complex, an estimated 4,000, will be getting close to or right at $12,000 profit sharing. Thirteen hundred workers on the fabrication side will be getting a check as well as 3,000 on the assembly line side.  Some of the estimated 4,000 were laid off when the plant eliminated its third shift which was due to lack of sales for smaller cars like the Chevrolet Cruze.

GM announced its adjusted earnings were around $12 billion last year in 2016. This was a large increase from the $11 billion the automaker pulled in the year before. The way it works goes like this. For every $1 billion the Detroit automaker pulls in in North America, it’s hourly employees receive $1,000 in profit sharing.

For the overall year, GM brought in an estimated $166.4 billion which has brought the company up about 9 percent from the year before. While the yearly income was up, the net income fell by around 2 percent to $9.4 billion. The company reported fourth quarter earnings to be $43.9 billion which was up by 10 percent, and in North America GM says its revenue was a record $119 billion for the entire year.

General Motors also reported that it sold over 3 million vehicles in 2016 which then lead to a retail share increase of about 0.5 percent points. That’s more than any other automaker.

Yet the amount that each hourly employee will receive is solely based on how many hours they have worked. For an employee to obtain the full amount of profit sharing he or she would have to work 1,850 hours last year alone. If workers clocked in any things less than those hours, the amount of profit sharing they will receive will be prorated.

Even though things in North America made record numbers, other countries didn’t quite do as well. Europe and South America numbers weren’t as high with Europe reported a loss of $300 million and South America a loss of $400 million. However sales reported globally were up by 1 percent from 2015.

Many employees are grateful for the profit sharing they will receive. Robert Morales, who is president of the UAW Local 1714 called it a “Morale booster” that would “give the members a sense of accomplishment for what was achieved by the company.”

Other employees cant help but look back to 2009 when the future of General Motors appeared extremely unfortunate. The government stepped up bailed out GM who in return improved its quality, design, and engineering of its vehicles.

When it comes to this year, analysts seem optimistic about GMs numbers. The automaker has just passed through its seventh year of growth reporting 17 million sales. Yet some analyst expect that number to plateau this year. The company will continue to impress this year when it comes out with its new crossovers and sports utility vehicles.

Right now, however, GM is on top. President of UAW Local 1112, Glenn Johnson says “It shows what a great job the company is doing. It’s a great American success story…each of our team members from the shop floor all the way up plays an integral part in that success.”

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Honda Reports Rise in Profit

Honda announced this Friday that its sales jumped by at least 36 percent. This was just for the October-December months. Dismissing damage done by the yen, Honda Motors managed to raise its profits for the full year.

The maker of the Odyssey raised its full fiscal profit to around 545 billion yen ($4.8 billion). That amount is a full 58 percent more than the 344 billion yen that Honda brought in about a year ago. That year Honda had expected to bring in 415 billion yen ($3.6 billion)

As for the third quarter, a series of cost cuts ended up raising the profit from 124.1 billion yen to 168.8 billion yen ($1.5 billion yen). The fact that things with airbag maker Takata Corp. who ended up paying nearly $1 billion for faulty airbags. It had turned out that when airbags were deployed shrapnel was expelled injuring passengers. It’s estimated that 16 people died because of this. The recalls Honda had to make due to the lawsuit against Takata resulted in low numbers in the second quarter.

Although the vehicle recall caused by Takata’s products slowed sales for Honda, it wasn’t the only company affected by the recall. Yet Honda was the most affected due to its close business with Takata. The recall considered the largest auto recall in United States history, affected 69 million Takata inflators as well as 42 million cars. A total of 100 million inflators have been recalled all together.

Despite all the drama with Takata, Honda did report that sales in the United States and China were high. This, the company says, was due to the release of new vehicle models in both countries. However, sales did dip down quarterly by three percent from 3.6 trillion yen to 3.5 trillion yen ($31 billion).

Honda also says that there’s a high possibility that it will profit off the sales of 5 million cars in the upcoming fiscal year. That number will bring the automaker up from the 4.7 million it brought in last year.

GM $1 Billion Investment to Bring Jobs?

Not too long ago President-elect Donald Trump criticized General Motors for its decision to build its cars in Mexico. Now, however, the automaker announced its $1 billion investment. The company says it will bring in over 1,000 jobs.

While the announcement hasn’t been officially brought to light, GM isn’t the first automaker to say it will bring more jobs. Fiat Chrysler recently said it would bring over 2,000 jobs to Michigan. Fiat, though, wasn’t threatened with Trumps “big border tax”.

Yet even though Trump criticized GM for the making of its Cruze in Mexico. GM contradicted that most of the Cruze sales are in Ohio. The hatchback Cruze, according to GM’s product development chief, is better suited for production in Mexico. The Ohio factory that produces the sedan model of the Cruze isn’t equipped for the hatchback.

GM defended their decision to keep their Mexico factory. The automaker says that it’s investments in the United States go beyond billions. Not to mention that since its bankruptcy it has added thousands of jobs to the U.S. During the Detroit auto show this past week, the CEO of GM Marry Barra told the press that the company has no plan to change where they make their cars just because of Trump.

Barra also made it clear that the company makes the decisions on where they chose to produce their vehicles at least four years in advance.

Takata To Pay $1 Billion To The U.S.

The air bag corporation Takata Corporation in Japan will plead guilty to criminal wrongdoing. Takata and the U.S. Justice Department agreed to a $1 billion settlement after faulty airbags led to the deaths of 16 people. In the settlement, Takata pays $25 million in fines as well as $125 million in compensations of victims and $850 million to the automakers for compensation.

A few of the automakers looking for compensation are Honda Motors as well as nineteen others including Ford Motor Company, General Motors, Fiat Chrysler Automobiles who had to recall many vehicles with defected inflators.

Along with pleading guilty to criminal wrongdoing, the company pleads guilty to wire fraud. This means that gave the U.S. regulators false testing information. Back in 2015 the company openly admitted to awareness of defaulted air bags. However, even though they were aware of the issue with the airbags, they did nothing to resolve on time That situation warranted a $70 million settlement between Takata and the U.S.

Takata revealed that I gave the National Highway Traffic Safety Administration (NHTSA) “selective, incomplete, ad inaccurate data” for as long as six years. The company also did the same thing with automakers.

In the United States, defective air bags injured more than 184 people. The inflators in the air bags explode with extreme force. This causes bits of metal to fly at passengers. A majority of the deaths that resulted due to this defect were in minor accidents that victims might have survived. One includes a seventeen-year-old high schooler who died in Texas last year.

Of the 11 deaths that occurred due to air back defection in the United States, most of them occurred in Honda cars. The NHTSA says that recalls of nearly 42 million cars would eventually take place. Seventy million Takata air bags inflators would be recalled as well. The combination of the two would lead to the largest safety recall in U.S. history.

The NHTSA continues to urge automakers to speed up the rate of replacing all Takata air bags. It seems the company only replaced one-third of the defected air bags. Which means that there are still 30 million vehicles that are unsafe. Back in the summer, the NHTSA cautioned drivers that almost 300,000 of Takata’s inflators remained in unfixed, recalled Hondas.

Two senators believe the Department of Justice penalizes the company and not its executives. Senators Richard Blumenthal and Edward Markey said in a statement that if Takata “files for bankruptcy, its new creditors, and not Takata, would be responsible for paying criminal fines on the company’s behalf.”

Volkswagen Pleads Guilty; Owes $4.3 Billion

Six of Volkswagen’s executive face criminal charges in ties with the company’s emissions-cheating scandal. Of the six executives, one is the former head of development. Another includes the head of engine development.

This incident first underwent investigation back in 2014. During initial testing, it showed diesel vehicles emitted less pollution than on the road. According to those investigating, executives were aware that the cars knew when testing happened. Since they were able to detect testing, the vehicles produced ideal pollution ratings.

Volkswagen executives knowingly distributed inaccurate information to the California Air Resources Board as well as the Environmental Protection Agency.

Volkswagen already pled guilty on the charges of wire fraud, violation of the Clean Air Act, and obstruction of justice. There were an estimated 600,000 cars that contained emissions-cheating software. Those vehicles were reportedly imported from Mexico and Germany.

Wringing a guilty plea from a major business like Volkswagen isn’t small by any standard. It does seem to be on the Obama administration’s list of things to complete before they leave office. This would also come as a turn-around for the administration. Prosecutors accused it of letting big corporate executive off the hook in past situations.

It’s still unclear as to what President-elect Donald Trump thinks about the situation, though. This case is one move the Justice Department has made toward holding large corporations and their executives accountable for their actions.

The criticism of the Justice Department went on for years. Accusations of the Justice Department being too lenient on banks responsible for the recession. The Justice Department slapped most of the institutions with fines, while the executives avoided liability.

Since the criticism, the department underwent changes to reconcile the problems. Deputy Attorney General Sally Q. Yates created a new policy. The new policy deepened the investigations of executives accused of any wrongdoing. Yates commented that “This isn’t just a paper policy — I think you’re seeing the results.” Therefore, its clear why things haven’t been so easy for Volkswagen.

Of the six executives who to prosecute, authorities ascertained one. Authorities placed Oliver Schmidt under arrest last week after they located him in Florida. They apprehended him as he prepared to board his flight to Germany. The rest of the executives are residing in Germany.

None of the six executives charged are part of Volkswagen’s management board. However, they do report directly to it, and the protection of major board members could be what saves Volkswagen a lot of lawsuits.

This poses an issue for the Justice Department. Germany isn’t known to extradite its own citizens. Yet whether or not German decides to prsecute them, the U.S charges against them would most likely hinder their travel plans. It is also speculated that this could lead to ruffled feathers between the U.S. and Germany.

While it isn’t clear as to whether Germany will present the executives, there were may excuses made when it came to defected vehicles. Volkswagen admitted to having its employees delete incriminating emails in 2015. Those in charge of software knew cars covered excess pollution when it sensed testing.

Volkswagen has since approved of a settlement with the government. The settlement, however, needs the final approval of Judge Sean F. Cox. There are terms to the agreement. Probation of three years, an independent monitor, and the further investigation of former as well as current employees.

The New York Times names the six employees (along with Oliver Schmidt) as Heinz-Jakob Neusser, Jens Hadler, Richard Dorenkamp, Bernd Gottweis, and Jürgen Peter. It’s expected that Volkswagen will pay $4.3 billion in fines. That total doesn’t include the cost of settlements to vehicle owners, which makes $20 billion.

Mercedes-Benz Surpasses BMW in Sales For First Time Since 2005

For the first time in over a decade, Mercedes-Benz surpassed BMW in sales last year. This feat comes after Daimler, Mercedes’ parent company, switched their focus over to making stylish, high-tech automobiles instead of optimizing market share. Mercedes reported selling 2,083,888 cars in 2016, while BMW reported on Monday that it had sold 2,0003,359.

This accomplishment cements the status of Daimler Chief Executive Dieter Zetsche, who had faced uneasy shareholders in the past. Zetsche struggled to bring Daimler back to life after his split from Chrysler in 2007, and shareholders worried that the company was falling behind BMW and Volkswagen. This fear was founded in 2011, on the company’s 125th anniversary, when Volkswagen’s Audi sales pushed Mercedes into third place. In an interview in late 2016, Zetsche told Reuters, “We had some deficits, cost and quality problems. Design was not top-notch.”

Since his appointment, Zetsche has prepared Mercedes for the future of the auto industry. He spearheaded the rebirth of its designs and technology, refocused the company on technological development and perfection, and borrowed from the risk-taking mentality of Silicon Valley. This last initiative was especially critical in breaking out of the risk aversive culture prevalent in Stuttgart, where Mercedes is based.

The same year Audi overtook Mercedes in sales, Zetsche announced his intention to make Mercedes the best-selling premium carmaker. His timeline shocked many—Zetsche announced that his improvements would make this achievement possible by 2020.  Traditionalists at Daimler feared that selling too many vehicles in a short amount of time would dilute the exclusive nature of their brand, as well as their brand name in the market. However, the nature of what makes a product a luxury has gone through its own innovation. Daniel Binns, managing director at branding agency Interbrand, said “I’ve got it and you haven’t, is what used to make premium. Now it is much more about having a better quality experience.”

To this end, Daimler prepares for the arrival of autonomous, self-driving cars in the market. “So much of what defines an experience to the current generation is about what the technology delivers,” said Binns, “The autonomous vehicle is the pinnacle of that.” Mercedes developed a prototype of a new flagship S-class capable of driving autonomy for 62 miles. Zetsche also remained vigilant against any surprising upsets from Audi by appointing Gorden Wagener, a young designer, to lead Mercedes’ design for the new C-class and E-class designs. The cars were furnished with futuristic digital display technology, inviting tech-savvy customers to the fold. Both the C-class and the E-class are now the company’s biggest sellers.