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: BMW’s X7 And 8 Series Sales Will Finance An Electrified Vehicle Onslaught
BMW plans to crank its electric vehicle output to 150,000 cars, a 50 percent jump from this year, Bloomberg reports. Part of the reasoning for that jump in volume, member of BMW’s board of management Klaus Froehlich told reporters in Munich, is to “stay ahead of the competition that’s starting to do its own rollout.”
But investing in EV tech won’t be cheap, so BMW hopes it can make a bunch of cash by snagging some of Mercedes’ luxury vehicle market share, with Bloomberg writing:
To help pay for the shift, BMW will start sales next year of the all-new X7 SUV and 8-Series coupe, priced at around 100,000 euros ($119,000).
CEO Harald Krueger talked about the company’s high hopes for the new luxury vehicles, saying:
Our goal for the luxury segment in the next few years is taking more market share...In 2018, we’re significantly enlarging our offering in this lucrative growth segment.
Whether that segment is lucrative enough to offset the 7 billion euro that the Bavarian automaker said it will end up spending on research and development in 2017, we’ll have to wait and see.
But next year, the electric Mini will hit the market, and an electron-fed X3 will follow soon thereafter. From there, Bloomberg says BMW “will bundle its electric model versions under its ‘i’ brand,” and that the company has secured naming rights for “iX1" up through “iX9.”
So even though competitors like VW are upping their EV game, BMW—the company that got an early jump on electric vehicles with its i8 and i3—has no plans to be left in the dust.
2nd Gear: Things Are Getting Real For Oliver Schmidt, A VW Executive Arrested For His Ties To Dieselgate
Volkswagen’s former head of U.S. regulatory compliance, Oliver Schmidt, awaits sentencing on Wednesday after being arrested by the FBI in January during his vacation in Florida. According to The Detroit News, prosecutors are pursuing the maximum seven year prison sentence, while the defense is “recommending that his sentence not exceed 40 months.”
Schmidt recently wrote a letter to his judge, asserting that Volkswagen “misused” him. Reuters quotes the letter that was filed in federal court and featured in German newspaper Bild am Sonntag, writing:
I must say that I feel misused by my own company in the diesel scandal or ‘Dieselgate’
The Reuters story goes on to say that when Schmidt met with an executive from the California Air Resources Board and did not disclose that there was indeed a defeat device, it was because the VW manager had “agreed to follow a script, or talking points, agreed by Volkswagen management and a high-ranking lawyer.”
Schmidt’s letter continues, describing his regret of not having disclosed the cheat:
In hindsight, I should never have agreed to meet with Dr Ayala on that day...Or better yet, I should have gone to that meeting and ignored the instructions given to me and told Dr Ayala that there is a defeat device in the VW diesel engine vehicles and that VW had been cheating for almost a decade. I did not do that and that is why I find myself here today.
We’ll see what fate awaits Schmidt likely sometime later today.
3rd Gear: Toyota Exec Says The Location For The Huge Toyota-Mazda Plant Will Be Announced Early Next Year
Reuters interviewed the CEO of Toyota North America, Jim Lentz, about the $1.6 billion, 4,000-job Toyota-Mazda joint venture plant. It’s a facility that many U.S. states have been engaged in a “bidding war” over, and—according to a Bloomberg story from mid-November—that bidding has come down to North Carolina and Alabama.
Though the Reuters interview doesn’t confirm that those two are the states left in the running, it does say that “more than one” state is still on the table, and that the big decision, according to Lentz, will be made in the first quarter of 2018.
So, in the next few months, we’ll know which lucky town will be the recipient of all those new jobs.
4th Gear: Ford Is Cranking Up Its EV Sales In China
At an event in Shanghai, China, Ford said it plans to churn out lots of new vehicles for the Chinese market, many of which will be electrified. Reuters quotes Ford’s head of Asia Pacific Peter Fleet as saying:
Between now and 2025, we will launch 50 new vehicles in China, and of those 50 new vehicles, 15 of them will be all-new electrified vehicles.
The onslaught of new vehicles—many of which will be electrified to comply with China’s strict “New Energy Vehicle” quotas—are aimed at curbing Ford’s sales slump in the world’s biggest car market. Fleet went on to describe how big of a role China plays in pushing electric vehicle technology, saying:
It’s clearly the case that China will lead the world in EV development, and so we at Ford are investing enormous amounts of money both here in China and globally to bring electrification into fruition.
Fifteen all-new EVs in the next eight years; sounds like a tall order.
5th Gear: Speaking Of China And EVs
While we’re on the topic of EVs in China, it looks like the country plans to extend its 10 percent tax rebate for buyers of New Energy Vehicles (plug-in hybrids and fully electric vehicles)—this according to Bloomberg’s sources familiar with China’s plan.
The current rebate on these New Energy Vehicles, Bloomberg states, was set to expire at the end of 2017, but now it’s likely going to be extended to “run through at least 2020.”
Incentives like these contributed to a 53 percent increase in “NEV” sales in China last year, to a total of 500,700 vehicles. In total, overall NEV ownership sits at over a million—which Bloomberg says is “more than triple the tally in 2015" according to the China Association of Automobile Manufacturers.
But though the Chinese government wants to continue to promote NEVs—especially in densely populated city centers where vehicle pollution is a big problem—through programs like this tax incentive, Bloomberg does say that “Different arms of the government have been working on plans to scale back overall subsidies on purchase of NEVs next year,” so who knows if such rebates will continue much further than 2020.
Reverse: Chrysler Enters The World Of Front-Wheel Drive
The Dodge Omni and Plymouth Horizon were introduced on this day in 1977. These were the first mass produced front wheel drive cars from Chrysler Corporation and among the first from any American automaker. Along with the introduction of the K-Cars platform, these little vehicles are often given much credit to bring Chrysler back to life after losing millions of dollars per year prior to hiring Lee Iaccoca as president...
Neutral: Where Are We At On Electric Vehicles?
China’s electric vehicle volumes are going through the roof, but they’re aided by major incentives and quotas. What’s it going to take for EVs to take hold organically? Will that ever happen?