On today’s show…FCA is sued by the U.S. Justice Department over diesel emissions…Geely adds Proton and Lotus to its portfolio of brands…and is GM’s global retrenchment related to mobility services? All that and more coming right up on Autoline Daily.

This is Autoline Daily the show for enthusiasts of the automotive industry.

U.S. JUSTICE DEPARTMENT SUES FCA
The U.S. Justice Department slapped a lawsuit on FCA yesterday, accusing the company of hiding software on its 3.0L EcoDiesel that allows the engine to emit higher pollutants under certain driving conditions. But the engine performs perfectly in laboratory tests. The EPA says it involves 104,000 Ram 1500 and Jeep Grand Cherokee’s from 2014 to 2016. FCA never disclosed the software to the agency, which is required by law. FCA and regulators have been negotiating for months, but obviously the authorities weren’t satisfied. FCA issued a statement yesterday saying it will vigorously fight the lawsuit and denies it deliberately tried to cheat on tests. And last week FCA announced it has software updates for its 2017 diesels, which it submitted to the EPA for certification. If it’s approved, FCA will install the update to the models under scrutiny.

GEELY ACQUIRES PROTON & LOTUS
Chinese billionaire Li Shufu loves car companies. He owns the Chinese automaker Geely, which in turn owns Volvo. And now he added two more brands to his portfolio. Geely is buying 49.9% of Malaysian automaker Proton, and a 51% stake in Lotus. Bloomberg reports that the acquisition of Proton allows Geely to expand into Southeast Asia which is home to 600 million consumers. The acquisition of Lotus gives Geely its very own sports car brand with a name that carries some cachet. The British brand had suffered under Proton’s ownership due to a lack of investment and analysts warn that turning Lotus around will be harder than getting Volvo back on its feet.

Is GM cutting costs to prepare for the disruption mobility services could cause? We’ll look into that right after this.

FUEL CONSUMPTION TO DECLINE DESPITE INCREASED TRAVEL
Last year the U.S. set a record for miles traveled by light-duty vehicles: 2.84 trillion miles. By 2040 that number could grow to 3.33 trillion miles. You might think that would translate to more fuel being used, but the U.S. Energy Information Administration says it will be just the opposite. And it has nothing to do with EVs. In 2015, the EIA estimates the real-world fuel economy of cars and trucks was 31 and 21 miles per gallon, respectively. By 2021 those numbers are expected to jump to 44 mpg for passenger cars and 31 mpg for trucks. As a result, the EIA projects gasoline and diesel consumption will drop 12% by 2025. Specifically, gasoline use will be 7.5 million barrels a day in 2025, down from 8.7 million today. If EVs do catch on, the decreases will be even greater.

MOBILITY SERVICES’ POSSIBLE DISRUPTION
Yesterday we reported on a study from a think tank called RethinkX that predicts ride-sharing and car sharing with autonomous cars will drive down the cost of transportation so much that people will stop buying cars and start paying for rides as they need them. It predicts that new car sales in the U.S. market will drop to less than 6 million vehicles a year by 2030, and that car dealerships will cease to exist. And that’s not the only collapse it predicts. It says automotive repair and maintenance facilities will disappear, and that insurance companies will suffer almost complete destruction.

IS MOBILITY SERVICES LEADING TO GM COST CUTS?
Whether you agree with this forecast or not, it may help explain the aggressive retrenchment that General Motors is taking around the world. GM just sold off all its operations in Europe. It no longer manufactures cars in Russia, Indonesia, Australia and South Africa. It’s going to stop selling cars in India even though everyone else thinks that market will grow strongly. The analyst community sees these moves as prudent steps to improve profit margins and that’s true. But they make even more sense if GM believes that mobility services are going to disrupt the industry in the next decade. And we expect to see Ford’s new CEO Jim Hackett to start making hard-nosed decisions to exit markets where the company loses money.

Coming up next, Mercedes updates the EV version of the smart fortwo and tells us what it costs.

TOYOTA EXPLORES BLOCKCHAIN TO SECURE DATA
One of the big fears with mobility services is keeping all the data generated and all the financial transactions in those cars secure. So Toyota and MIT are looking at using blockchain to do just that. Blockchain is the underlying technology used by Bitcoin. It’s complicated to understand but once a transaction happens with blockchain, the data in these blocks cannot be altered. They can’t be traced, either. So you have a lot more privacy. Toyota will use blockchain so anyone can safely share autonomous vehicle data, manage ride- and car-sharing transactions and store vehicle usage information. Toyota hopes more companies will adopt blockchain and is forming a consortium to do just that.

MERCEDES REVEALS SMART FORTWO EV PRICING
Mercedes just updated the EV version of the smart fortwo. It now starts at $24,550, which is $1,200 cheaper than before. Pricing for the convertible version remains the same at $28,750. It features an 80 horsepower electric motor and its torque is now at 118 lb.-ft. up from 96 before. Range is up slightly from 68 miles to an estimated 70 to 80 miles. Charging time is about twice as fast as the outgoing model. The 2017 smart fortwo EV arrives in dealerships this summer.

And before we end today’s show, I’d like to remind you about Autoline After Hours tomorrow. We’ll have Sheldon Brown from Toyota’s Advanced Fuel Cell Project in the studio and he’ll for sure want to talk about the automaker’s hydrogen powered semi-truck, called the Portal. So, if you have any questions shoot them to viewermail@autoline.tv. That show goes live at 3PM Eastern time on our website, Autoline.tv.

But that’s it for today, thanks for watching and please join us again tomorrow.