AD #1995 – Daimler Makes Big EV Investment, BMW Uses Autonomy in Production, Formula 1’s New Champion
November 28th, 2016 at 11:53am
Runtime: 7:51
To watch this episode on YouTube click here.
- Mercedes Makes Massive EV Investment
- BMW Uses Autonomy in Manufacturing
- Infiniti Measures Brainwaves to Design Cars
- Toyota Watches Ions
- Formula One’s New Champion
- NAFTA Critical to Health of Auto Industry
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On today’s show…Mercedes is going to make a massive investment in electric cars….Formula One crowns a new world champion….and John has something to say about Donald Trump, NAFTA and the automotive industry. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show for enthusiasts of the automotive industry.
MERCEDES MAKES MASSIVE EV INVESTMENT
Last week we reported Mercedes was considering dropping diesels in the U.S. market. But those rumors were denied by a company spokesperson. However, Mercedes parent company Daimler is definitely putting more emphasis on electric vehicles moving forward. The head of R&D told a German newspaper that it plans to invest $11 billion to develop 10 electric cars on the same architecture by 2025. Three of the vehicles will be for the smart brand. And thanks to new breakthroughs in battery technology they will have a range of 700 kilometers or about 435 miles.
BMW USES AUTONOMY IN MANUFACTURING
We hear a lot about how connected and autonomous technology will benefit cars, but it can also improve manufacturing operations. BMW is now using this technology in logistics. For example it’s testing these autonomous transport robots at its Wackersdorf plant. You’ve probably seen similar transporters at other plants but these are unique because they don’t need guides in the floor to navigate. Instead they measure the distance to wireless transmitters to calculate their exact position and route. BMW is also testing autonomous tugger trains at its Dingolfing plant. These transporters haul components over longer distances between warehouses and assembly areas. And BMW is working on developing a connected supply chain to allow the company to know where a part is and when it will be delivered. If there is a delay, the system can automatically come up with an alternative route to make sure the parts arrive on time.
And we’ll be back with more right after this.
INFINITI MEASURES BRAINWAVES TO DESIGN CARS
Infiniti wants you to #UnleashYourPotential. That’s the slogan for a new study the automaker is conducting where it will measure and identify a person’s level of excitement while driving the new 400-horsepower Q50 Red Sport. Working with a company called Emotiv, Infiniti will strap a wireless EEG headset, which records electrical activity in the brain, to participants to measure mental performance indicators and sub-conscious responses. The information is then translated into meaningful and easy to understand data that Infiniti hopes will tell it what emotion, power and excitement really means. It may seem kind of silly but other automakers have been employing like-minded methods for years to help them engineer and develop better vehicles. The information could also be useful in an autonomous future, because if you know what a driver is thinking and how they feel, the driving experience could be tailored to those emotions.
TOYOTA WATCHES IONS
Toyota has some catch-up work to do on electric cars. It seemed to be putting all its efforts into fuel cells, but is now ramping up work on EVs. The automaker just developed a new way to observe how lithium ions behave when a battery is charging and discharging. It’s using super high-intensity X-rays to watch the behavior of lithium ions in real-time caused by differences in the materials and structures within the battery. Toyota says this will help it understand the causes of battery degradation, and that should lead to better performing and longer lasting batteries.
FORMULA ONE’S NEW CHAMPION
The Formula One season wrapped up yesterday and we send a big congratulations to Nico Rosberg for winning the 2016 Formula 1 championship. Mercedes dominated the series once again, taking home the Constructor’s, winning all but 2 of the races. Rosberg only needed to finish on the podium in Abu Dhabi to win the championship and ended up coming in 2nd. His teammate, former champion Lewis Hamilton, was ahead of him and deliberately drove slowly to try bunch up the field to prevent Rosberg from winning the championship. Hey, that’s what they do in Formula One. Rosberg’s victory has historical overtones, his father Keke, won the same title 34-years ago.
Coming up next, John has something to say about Donald Trump and NAFTA.
NAFTA CRITICAL TO HEALTH OF AUTO INDUSTRY
Donald J. Trump’s election as the 45th president of the United States stunned just about everybody, including me. His presidency will have a profound impact on the American auto industry. From NAFTA to CAFE to EVs, the rules of the game are about to get thrown out the window. I want to share some of my thoughts on these topics this week. Today let’s start with NAFTA.
It’s easy to see why so many voters agree with Trump to rip up the North American Free Trade Agreement. Trade between the U.S. and Mexico grew six-fold since NAFTA started. But far more goods are flowing north than south. Mexico now enjoys a $60 billion a year trade surplus with the U.S. No wonder so many voters agree with Trump that NAFTA is a “jobs killer.”
President-elect Trump says he’s going to slap a 35% tariff on goods coming in from Mexico. That would definitely kill off Mexican imports. But it would also cripple the North American automotive supply chain. Like it or not, Mexico is an important low-cost source of parts and components that make U.S. plants globally competitive. Chop off that cost advantage and U.S. exports will suddenly become non-competitive in global markets.
Of course, Mr. Trump’s rhetoric may be carefully calculated. Just the threat of a 35% tariff sure gives him a great bargaining chip going into any negotiations. And isn’t it interesting that Canada’s Prime Minister Justin Trudeau now says he’s ready to re-negotiate NAFTA, too? Canada has a proportionally bigger trade deficit with Mexico than the U.S. does. I just hope both leaders realize any trade agreement with Mexico is critical to the health of the North American auto industry.
Anyway, that’s how I see it and I welcome your views and opinions in the comments section.
Tomorrow I want to talk about Trump’s views on regulations, especially fuel economy and emissions.
But that brings us to the end of today’s report. Thanks for watching and please join us again tomorrow.
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Comments (16)
November 28th, 2016 at 12:30 pm
Trump’s threat of a 35% tariff on imports from Mexico was one of many things he said that worked to get votes, but which is not likely to happen.
I just hope the policy makers realize that the auto industry, especially GM, Ford, and FCA, are so intwined between the U.S., Canada, and Mexico, that any major change, or trade war in the region, would be very disruptive, and harmful to the industry.
November 28th, 2016 at 12:43 pm
MAybe Trump will negotiate with VW for a couple plants in the US in exchange for dropping diesel fines?
November 28th, 2016 at 12:48 pm
From what I have heard about Trump, I believe he is an isolationist. So exports are not part of his plan. Make in the U.S.and sell in the American market. Problem with that is that all the exports the U.S. now enjoys will become subject to punative duties from the importing countries. You can’t slap a duty without getting slapped back.
As for NAFTA, without Mexico, the auto industry will return to a simple make and sell here for both Canada and the U. S.. But NAFTA is about much more than cars, and those bits are generally recognized as not working for anyone.
I think Trudeau was just trying to get ahead of the curve with Trump. Seems that after Trump makes a statement, his position hardens. Better to make a soft play early so negotiations will still be possible and nothing will be said that can’t be altered. Interesting times, eh?
November 28th, 2016 at 12:48 pm
About NAFTA – We’ll see. What I do find interesting about all of the rhetoric is that prior to Jan. 1, 1994, the US auto industry was doing just fine. What I find more curious is that several great paying jobs left the county since. I’m still trying to find any product that was made more affordable by off shoring jobs. It is a semi complex issue to e sure.
November 28th, 2016 at 12:52 pm
A fixed-rate tariff is not a good approach. The goal should be to decrease the trade imbalance with a particular country by taxing all imports sufficiently to bring the imbalance closer to zero. Further companies that ship components to Mexico, but then import the final products back should only have to pay tariffs on the net content added in Mexico. This would encourage more US content, even if the final product is assembled in Mexico.
November 28th, 2016 at 1:40 pm
4 Delco Electronics Division of GM, where I worked, was moving radio production to Mexico, long before NAFTA. The company’s argument to the union, was that they needed to move some jobs to a low cost country to remain competitive, so they could keep other jobs in the U.S. I’m sure that was mostly true, though the company certainly had to spin things when negotiating with the UAW.
I don’t know the dollar volume of car-related imports of cars, and parts from Mexico, but final assembly seems to be what gets mentioned by Trump, and by the general public. John or Sean, maybe you know, but isn’t the dollar value of parts made in Mexico probably higher than the value added by assembly plants? It seems that a lot of parts are made in Mexico, including high value “parts” like engines, from GM, Ford, and FCA.
November 28th, 2016 at 1:54 pm
Mercedes investing in electric cars – the disconnect with MB’s plan is that I don’t think their dealers recognize electric cars as opportunities. I just returned my MB I had as a lease, and they had no B class in stock. And we’re talking about one of the largest MB markets (south Florida). Perhaps if they had a compelling electric product lineup dealers would be more enthusiastic but I tell you they are not at the moment.
November 28th, 2016 at 2:49 pm
Are there any hard facts on the number of jobs lost as manufacturing moved to Mexico? I would have to think the direct impact would be in the 100,000+ neighborhood?? If the jobs return to the U.S., I would think the numbers would be far less, as I would think a lot of factories built in Mexico are far more automated than the ones they replaced in the U.S..
November 28th, 2016 at 3:19 pm
#7, Roger
I didn’t know M-B ever even sold the B-Class in the U.S. Did they?
Probably M-B’s big EV push, at least for now, is for markets other than the U.S., unless they make an electric S-Class to compete with the Tesla S.
November 28th, 2016 at 4:19 pm
Get out the history books and see what happened when tariffs were added on to keep jobs here. Doesn’t work. I hate to see jobs go to another country because management says the workers pay is to high. So why don’t those at the top cut back and share the pain to. Our executives are some of the highest paid in the world.
November 28th, 2016 at 4:46 pm
Why is globalism a “good thing”. Not for capitalists, but for Joe Lunchbucket. Because TVs are cheap? Too bad that since his factory job left for Indonesia, he’s working cleaning offices at night and at the local 7-11 until dawn trying to keep his house that’s worth half what he owes on it and feed his family.
November 28th, 2016 at 5:53 pm
John
I don’t watch Autoline to get your political view.
Tom
November 28th, 2016 at 6:00 pm
The remaining factories in the U.S. are much more automated, and use a lot fewer workers per car, widget, etc., than they once did. The factories in China, Mexico, and other low wage countries use more workers, because labor is cheap.
November 28th, 2016 at 7:09 pm
This is my take on the mexico tariff,Trump will drop the tax IF mexico builds and maintains the wall/fence,built to OUR specs.
2nd,make mexico tighten up all of their borders to stop the human flow from central america and other countries.
3rd,mexico declares war on all drug cartels operating within their borders.
For dealing with Canada,keep that punk trudeau up there.
November 28th, 2016 at 7:35 pm
If Trump builds his wall, it will increase the number of Mexicans in the U.S. The net flow has been southbound, since the great recession.
http://www.pewhispanic.org/2015/11/19/more-mexicans-leaving-than-coming-to-the-u-s/
November 29th, 2016 at 2:10 pm
The problem with our trade policies are while we have a “free” trade policy with other nations they do not with us. Example is Japan. US imports into the country are near non existent. There are years long waiting lists to buy Harleys in Japan. Maybe the US needs to adopt a mirror trade policy. In other words will trade with you exactly as you do with US. Could you see the Japanese car market if we limited ALL Japanese imports to a puny number for the year? Japan has 5 auto companies to our 2 1/2 They have 4 major motorcycle companies to our one. If Chinese companies want to build or sell cars here they would need to pair up with a US company and GIVE them any and all technology secrets. Hear how stupid that sounds??That is what is happening just with 2 countries . How many do we deal with all over the world who do not trade fairly with us?