AD #4343 – U.S. Defense Department Wants Auto Execs; IIHS: Waymo AVs Safer Than Humans; GM Hosts Trump in Michigan

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IIHS: WAYMO AVs SAFER THAN HUMANS
Slowly but surely the evidence is stacking up. Autonomous cars are safer than cars driven by human beings. The Insurance Institute of Highway Safety studied Waymo’s AVs in four cities and found they were involved in 68% fewer crashes than human drivers. And that’s overall crashes. When measured on the number of crashes per vehicle mile travelled, Waymo’s cars were involved in 85% fewer single-vehicle crashes and had 81% fewer injuries. Even so, the IIHS points out that this involves Waymo’s AVs, not other ones. And it says the U.S. needs a better data tracking system to evaluate autonomous cars when they’re deployed in much larger numbers.

FORD GOES AFTER MILITARY CONTRACTS
One of the unmistakable trends we’re seeing in the auto industry right now is a pivot to make military equipment and munitions. Ford is the latest to get on board. It’s going to go after a U.S. Army contract to build a tactical truck. GM and BC Customs, a company based in Utah that makes special ops vehicles for the military, are going after the same contract. The military is interested in using commercially available technology, like the F-Series and Silverado platforms, to make military vehicles. The idea is to develop materiel faster and at lower cost. Or, at least the military’s idea of lower cost. GM’s Infantry Squad Vehicle, or ISV, which is based on the Colorado pickup, costs $330,000 apiece. It’s a stripped-down chassis for lightweight and quick ingress/egress to be used for reconnaissance and special ops. But Autoline has heard some feedback that war fighters don’t like it because it doesn’t offer any protection.

EU OEMs GO AFTER MILITARY CONTRACTS, TOO
Over in Europe, Mercedes, Volkswagen, Renault, Ineos and Daimler Truck have all announced plans to go after military contracts. But they better be careful on what they’re prepared to bid on. As you all know, the armies of the world are no longer looking for tanks or mechanized armor. They want drones and missiles. Rheinmetal, Germany’s largest defense contractor, is falling out of favor, because its expertise is in mechanized armor, not drones.

 

U.S. WAR DEPARTMENT WANTS AUTO EXECS
The convergence of autos and military is happening faster in the U.S. than most people realize. In January, the Defense Department launched what it calls the Bond Initiative to recruit automotive executives. Bond stands for Business Operators for National Defense. And it’s all about embedding automotive executives directly into the defense acquisition process, which is historically tied up in regulations, red tape and bureaucracy. The military wants to use automotive practices to speed up the process. I personally know three retired auto execs who are part of the Bond Initiative. Over 100 execs have been engaged in the initiative, and I’m told the goal is to get 500 of them.

STELLANTIS DUMPS FREE2MOVE
A few months back, Stellantis CEO Antonio Filosa revealed his long-term plan for the automaker that included putting a greater focus on its core automotive business. And apparently, its car sharing business, Free2Move, isn’t part of that future. Stella announced it’s going to sell Free2Move to the German investment firm Mutares. Free2Move was created in 2016 by the PSA Group and its former CEO Carlos Tavares with the goal of to find new sources of income for the company. Free2Move currently offers short and long-term rentals in 14 cities in the U.S. and Europe. We’re guessing it really wasn’t making much money, if any at all, because otherwise Filosa would’ve wanted to hold onto it.

BMW TO MAKE EV BATTERIES IN HOUSE
While most automakers are cutting back on their plans to make batteries for EVs, BMW is going in the other direction. It’s gearing up to make batteries at its plant in South Carolina by the end of the year. It’ll make cylindrical cells, integrated directly into the high-voltage battery. In-house developed AI assistants and agents will analyze production data along with more than 300 employees and 250 robots to make sure there are no defects. BMW also trained its production staff in a virtual factory that it developed. Using VR goggles and a computer, employees are able to practice real manufacturing operations in realistic conditions before they have to do it on the factory floor. The next-gen batteries made in South Carolina will be used in the new iX5 and BMW also plans to build them in Germany, China and Mexico.

VW WANTS TO SPLIT BATTERY INVESTMENT WITH GOTION
Speaking of EV batteries, Volkswagen is in talks with Chinese battery maker Gotion about a possible stake in VW’s battery plant in Spain. The plant in Valencia is operated by VW’s battery business PowerCo, and is expected to start production by the end of the year. That’s all the details we have for now but VW is under enormous pressure to boost capacity utilization and this would certainly help that effort.

MERCEDES EARNINGS SURPRISE AND DISAPPOINT
Mercedes-Benz posted its second quarter earnings this morning and it kind of caught everyone by surprise. Despite all the doom and gloom about the German auto industry, Mercedes boosted its adjusted EBIT and its net profit by double digit percentage gains. It sold close to 418,000 cars and vans, which was down 8%. And its revenue of €32 billion was down 3%. But thanks to some significant cost cutting, its net profit of €1 billion was up 13%. Even so, that’s just a 3.1% profit margin, which is terrible for a luxury car maker. So, how did it cut costs? One place was in research and development, which took a 12% budget cut. Also, what really saved the day was Mercedes-Benz Financial Services. Its adjusted EBIT shot up 70%, while vans saw a 3% increase and cars were down 26%.

GM HOSTS TRUMP IN MICHIGAN
President Trump was in Michigan yesterday and visited General Motor’s proving grounds in Milford to tout his economic agenda. The President claimed his tariffs and rolling back environmental regulations have helped revive manufacturing in the U.S. But what we found most interesting about his visit is the praise he heaped on GM CEO Mary Barra and President Mark Reuss. Remember, in his first term, Trump openly trash-talked Barra and was highly critical of GM. But Barra and GM were smart to never retaliate or get drawn into an argument with the President. It’s never a good idea to have the President of the United States trash talking your company, so GM was smart to host Trump at its proving grounds. Also, and this goes back to the beginning of the show, GM is keen to get more military contracts.

And that wraps up today’s report. A shoutout to all our YouTube and Patreon members. It’s your support that makes it possible for Autoline to bring you this kind of coverage. Thank you for your support.