Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: The Apple Car Finally Happens, Kinda
Man, remember the Apple Car? Remember how Apple debated doing a car for years, thinking it could be the next big thing, then put a bunch of resources into a program that blew up over internal disagreements over its direction?
I feel like we haven’t heard about in over a decade, because our hellscape of a reality tends to accelerate time like that—even though it was barely two years ago. But even after abandoning the idea of making a car from scratch, the company didn’t completely write off staying in the car software side of things. And now we’ve just learned that they’re buddying up with Volkswagen for a driverless car deal.
Speaking with unnamed sources, the New York Times reported that Apple just signed a deal with Volkswagen to make some of the T6 transport vans into Apple’s self-driving shuttles for its employees. A VW subsidiary called Italdesign, which is based in Turin, Italy, will “remake Volkswagen’s T6 vans as electric self-driving shuttles.” And:
The frame, wheels and chassis of the T6 vans will remain, but Apple is replacing many components, including the dashboard and seats, said two people familiar with the project. Apple is also adding other computers, sensors and a large electric car battery, they said. The shuttles will ferry employees between two of Apple’s Silicon Valley campuses, and will include a driver behind the wheel to take control if needed, as well as an operator in the passenger’s seat tracking the van’s performance.
A former employee who spoke with the Times also added that though Apple said that it would complete the project by the end of this year, it will miss that deadline. It’s also unclear if the VW/Apple partnership will yield anything more than these shuttles.
This partnership, as the Times scathingly pointed out, “[reflects] the continuing travails and diminished scope of the company’s four-year-old car program.” Apparently, Apple met with a lot of automakers in an attempt to strike a deal. From the story:
In recent years, Apple sought partnerships with the luxury carmakers BMW and Mercedes-Benz to develop an all-electric self-driving vehicle, according to five people familiar with the negotiations who asked not to be identified because they were not authorized to discuss the matter publicly. But on-again, off-again talks with those companies have ended after each rebuffed Apple’s requirements to hand over control of the data and design, some of the people said.
Nobody bit. Except for Volkswagen:
Late last year, Apple found that partner in Volkswagen. Buffeted by a scandal around cheating emissions tests — and lagging some rivals in development of self-driving cars — Volkswagen jumped at the chance to work with Apple, former Apple employees said. Volkswagen’s code-name at Apple is Jetstream, one of them said.
They say misery loves company. Seems like these two are perfect for each other.
2nd Gear: China Will Look Out For China
News broke yesterday that Donald Trump instructed Secretary of Commerce Wilbur Ross to investigate the effect of imported cars on national security. The probe would examine whether imported foreign cars and car parts were negatively impacting the domestic industry. As you can imagine, other nations find this to be problematic.
China, according to Reuters, says that it will “defend its interests.” From the story:
The governments of Japan, China and South Korea said they would monitor the situation, while Beijing, which is increasingly eyeing the United States as a potential market for its cars, added that it would defend its interests.
“China opposes the abuse of national security clauses, which will seriously damage multilateral trade systems and disrupt normal international trade order,” Gao Feng, spokesman at the Ministry of Commerce, said at a regular news briefing on Thursday which focused largely on whether Beijing and Washington are making any progress in their growing trade dispute.
“We will closely monitor the situation under the U.S. probe and fully evaluate the possible impact and resolutely defend our own legitimate interests.”
The publication also points out that potential high tariffs would especially hurt Asian carmakers like Toyota and Hyundai because the U.S. is one of their biggest markets. They aren’t alone.
3rd Gear: That Probe Wouldn’t Be Good For Mexico And Mazda, Either
Because many foreign automakers also depend on Mexico for car production, Trump’s protectionist policies will hit it hard. Mazda is especially worried, according to Bloomberg. From the story:
Mazda will continue to pay close attention to tariff policies in the markets it operates in, outgoing Chief Executive Officer Masamichi Kogai said in Tokyo Thursday. The biggest reason for building a plant in the U.S. would be to strengthen the company’s brand, he said.
Mexico has become a major manufacturing base for most global car brands, including U.S. ones, as assembly-line workers there earn about one-10th of what their U.S. counterparts make. Trump has blamed low-cost Mexican production for the outsourcing of U.S. manufacturing jobs south of the border.
[...] Among the world’s carmakers, Mazda, Tata Motors Ltd.’s Jaguar Land Rover unit and Mitsubishi Motors Corp. would be hit hard. All vehicles that the companies sell in the U.S. are imported. About 22 billion euros ($25.8 billion) of sales from European auto producers could be affected by higher U.S. tariffs, according to estimates from Bloomberg Intelligence analyst Michael Dean. Volkswagen AG is most at risk through its production sites in Mexico and due to imports of Porsche and Audi vehicles from Europe.
Remember, until that new joint Toyota plant gets built in Alabama, poor Mazda has no U.S. manufacturing base.
Manufacturer fear, of course, stems from the fact that tariffs would raise the prices of foreign cars, costs that would ultimately be passed onto the consumer. Mexico would be most affected because it produces the higher number of imported cars.
I suppose the only company that doesn’t have reason to be freaking out right now is Tesla, as it builds all of its cars in California. Interestingly, as shares of Mazda, Mitsubishi, Subaru, Mercedes, BMW and Volkswagen dropped, Ford, GM and Tesla shares increased.
4th Gear: One Standard
On Tuesday, we learned that, lo and behold, automakers actually want the Trump administration to pump the brakes on lowering the standard fuel economy average. Mostly, it was because they finally realized that after California has repeatedly said that it would fight any sort of lowering of the standard, it would just be too complicated to have two different sets of standards.
Everyone still seems to be in agreement about that, according to Bloomberg.
California’s top air-quality official held a series of meetings with auto industry and federal officials in Washington on Wednesday who re-affirmed a desire to maintain a single national standard for auto efficiency.
The talks with California Air Resources Board Chair Mary Nichols were set in motion by President Donald Trump’s May 11 instruction to federal agencies that oversee the fuel efficiency regulations to pursue talks with California on revisions to the standards.
After the meeting, White House Deputy Press Secretary Lindsay Walters said the administration would continue the conversation “so that domestic automakers do not have to comply with two different regulatory regimes.”
The standard set during the Obama Administration was a 50-mpg economy average for light-duty vehicles by 2026. Trump was trying to freeze that target at 37 mpg starting in 2020. But California having its own standard that’s different from the rest of the country’s would be a legal nightmare.
Something that automakers just really don’t want to deal with, it looks like.
5th Gear: Go, Hydrogen Fuel Cell, Go!
Toyota, one of the only manufacturers that offers a hydrogen fuel cell car, wants to keep expanding on the technology. That’s pretty neat.
The automaker said today that it wants to build a facility to mass-produce hydrogen fuel cell stacks, reports Reuters. From the story:
The new unit will come up on the grounds of its Honsha plant in Toyota City near the automaker’s global headquarters, the company said in a statement. It is also constructing a dedicated line at the nearby Shimoyama plant to produce tanks for storing high-pressure hydrogen gas inside vehicles.
Toyota declined to give details about their latest investment in this technology, but said mass production of components will begin around 2020, enabling the company to meet its target for global annual fuel cell vehicle sales of more than 30,000 units, including passenger cars and buses.
Currently, Toyota sells the Mirai, a hydrogen fuel cell sedan, in California, Japan and a few other European countries. But because it’s expensive to build, it’s sold in pretty small numbers. Mass-producing those hydrogen fuel cell stacks and hydrogen tanks will definitely help Toyota bring those prices down.
Of course, after that, there’s also the infrastructure issue to deal with. There just aren’t as many hydrogen fueling stations as there are regular gas stations or electric charging stations. But if that network really gets built out, then hydrogen fuel cells will really have a shot of becoming mainstream.
Reverse: No Sleep ’Til Brooklyn
Neutral: Would You Buy A Car From Apple?
If you woke up tomorrow and learned that Apple, a company that has never built a car before, suddenly had a car you could buy, would you buy it?