AD # 4195 – Ford & Renault Join Forces for EVs; BMW Picks New CEO From Manufacturing; Fiat to Bring Dinky Topolino To U.S.

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

Sean is at a Toyota media event for the next three days and so I’ll be filling in.

FORD & RENAULT JOIN FORCES FOR EVs
Big news today in Europe, where Ford is joining forces with Renault to make two small electric passenger cars as well as exploring the development of a common platform for commercial vehicles. Ford will continue building EVs based on Volkswagen’s MEB platform at its own plant in Cologne, Germany. But Renault will build the EVs that will arrive in Ford’s European showrooms in 2028. This is actually being done through Ampere, the EV operations that Renault was going to spin off, but then changed its mind, cancelled the IPO and told Ampere to figure out how to slash the cost of making EVs by 40% in one generation. If Ampere can do that, and Ford is paying for half of the bills, then Renault and Ford will have EVs that can go head to head with the Chinese on cost.

BMW PICKS NEW CEO FROM MANUFACTURING
Let’s stick with Europe for the moment because we’ve got a couple more important stories from there. BMW announced who its new CEO is going to be. Meet Milan Nedeljković who will replace Oliver Zipse next May. Nedeljković, who’s 56 years old, was born in Serbia and studied engineering at the Massachusetts Institute of Technology, has been on BMW’s board of management since 2019. But here’s what we think is the most interesting thing about him. The board didn’t turn to a finance guy, or a marketing wizard or a technologist. Nedeljković is a manufacturing guy. As BMW works hard to compete with the Chinese on cost, it’s very telling to see that the board turned to someone who knows operations.

IS BMW THE FIRST OEM TO USE BLOCKCHAIN FOR TRANSACTIONS?
Speaking of BMW, we think it has something of a first in the auto industry. It’s using a blockchain system from JP Morgan to automate some of its foreign exchange transactions. The system automatically transfers euros from BMW’s Frankfurt accounts when dollar balances in New York drop below a certain threshold. If you use banks to do that, it means the transactions only happen during banking hours, and if that’s over a weekend, you can have billions of dollars sitting in limbo until the transaction goes through. And that meant that BMW had to keep a cash buffer to make sure it always had enough funds on hand. With blockchain the transaction happens in seconds, and that eliminates the need for a cash buffer, which allows BMW to put that money where it can be more productive. And that’s why we’re probably going to see the auto industry, and the rest of the financial sector, start using blockchain for a lot more transactions.

PIECH FAMILY MEMBER NEEDS VW DIVIDENDS
The Volkswagen Group is running into a bit of a sticky wicket and it’s all about family. VW desperately needs cash as its financial situation is starting to go wobbly, but its parent company wants the automaker to maintain its generous dividend payments. That parent company is Porsche Automobil Holding SE, which is controlled by the Porsche and Piech families. Here’s the problem. Back in 2017, Hans Michael Piech borrowed €1.1 billion to buy shares in Porsche Holding from his brother Ferdinand Piech to prevent them from being sold on the open market and keeping it all in the family. But now Hans Michael needs those dividends to pay off his loan. Last year VW cut its dividend by 30% and probably would like to cut it more to put that cash where it can be more productive. But it could be headed for a family fight over that money.

NIO: BIG EREV BATTERIES ARE A WASTE
Big batteries in EREVs are a waste. That’s according to an executive at Chinese EV maker Nio. He says the bigger batteries take up a lot of space in vehicles and add more than $2,000 to the cost. And they’re not necessary because Chinese drivers aren’t as worried about range anxiety anymore because the charging network in China is improving. But the executive’s comments might be a bit self-serving because as you know, Nio operates a large battery swapping network in China, which means its vehicles don’t need larger batteries.

FIAT TO BRING DINKY TOPOLINO TO U.S.
Well that didn’t take long. Last week, after President Trump said he wants kei cars to be legally sold in the U.S., and now Fiat is going to start selling its tiny Topolino EV in the U.S. Obviously this plan was in the works well before Trump ever started talking about kei cars, but the timing can’t hurt. While it’s not a kei car, the Topolino is classified as a quadricycle in Europe, which allows for low-speed use in cities and fewer licensing and safety rules. The two-seater has a top-speed of 28 MPH, an electric range of 50 miles and sells for $11,500 in Europe. But Fiat didn’t disclose any details for the U.S. version. Fiat has shown off the model at this year’s New York and LA Auto Shows and several U.S. dealers had the model on display for the last few months and it could go on sale in the spring.

MORGAN STANLEY SAYS NO GROWTH IN TESLA STOCK
Is Tesla stock going to soar as the company leans into AI and humanoids? Not likely, says Morgan Stanley. It says that those technologies have already been priced into the stock, which is trading around 210 times earnings. So it downgraded its rating on the stock. You may remember that Adam Jonas was Morgan Stanley’s auto analyst. And he loved Tesla. But four months ago, Morgan moved Adam off the auto beat and onto AI. And the new auto guy, Andrew Percoco, sees the stock dropping to $388 a share. It’s currently around $439.

ALL IN THE FAMILY, AUTOMOTIVE STYLE
Earlier in the show we talked about the Porsche and Piech families controlling Volkswagen. It’s just extraordinary to me how much family influence still exists in the automotive industry today. The Quandt family controls BMW. The Agnellis and Elkans historically controlled Fiat, and now indirectly, Stellantis. The Renault family used to control Renault, but Louis Renault, the founder, was a little too cozy with the Nazis during World War II and after the war, the French government yanked the company away from the family. In the U.S., the Ford family effectively controls the Ford Motor Company. In Japan, the Toyodas are heavily involved in Toyota. In South Korea, the Chungs control Hyundai. And in India the Tata family controls Tata, which of course owns Jaguar and Land Rover. That’s one thing about this automotive industry, I can’t think of any other massive, global business sector that has so much family control.

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