Honda’s working on a new modular EV platform, Tesla’s dealing with a lawsuit involving alleged trade secret theft, and Toyota has to pay a single dealer almost $16 million in damages. All that and more in The Morning Shift for Tuesday, July 16, 2019.
1st Gear: Honda Is Designing a Modular Electric Car Platform
People have been going gaga over the Honda e ever since it showed up in concept form back in 2017. The cute electric city car will not be sold in the U.S., but that’s just as well, since the hatchback’s range is a fairly unimpressive 125 miles, and also, American’s aren’t buying small cars right now.
But that doesn’t mean Honda isn’t planning on launching an EV onslaught in the U.S. On the contrary, Automotive News reports that the company announced last week at a briefing in Japan that it was developing its own modular architecture and hoped to have it ready before 2025. From the story:
Unlike the e, the U.S.-bound products will ride on a modular platform that can accommodate a wide range of body shapes and sizes as well as different batteries and motors.
“This new architecture is designed to achieve smooth driving and highly efficient packaging,” said Ayumu Matsuo, Honda’s managing officer in charge of power unit development. “We believe it will meet the needs of customers who like our C-segment and D-segment models.”
Many automakers first adapted to the electric revolution by converting their internal combustion engine-powered cars to EVs. But the reality is that standard ICE cars contain fundamental design attributes that make them less-than-optimal for use as electric cars.
To build the best electric car, many experts agree, requires a dedicated electric car platform. And to ensure that this platform can yield cars of various shapes and sizes to meet demands in different market segments, that dedicated platform has to be modular.
It’s for that reason that Volkswagen and Ford are using the new Modular Electric Toolkit, and why Subaru and Toyota have teamed up to build their own modular EV platform. It’s no surprise, then, that Honda is getting in on the fun, though I wonder if it plans to partner with another automaker, as the cost associated with developing an all new modular electric platform will likely be tremendous. Hmm.
2nd Gear: Toyota Ordered to Pay a Dealership $15.8 Million Over Alleged Retaliation Over Dealer’s Recall Tracking Software
About a decade ago, Toyota was in the middle of an “unintended acceleration” disaster, which gained lots of attention in the media, especially after a family of four died in a crash in a Lexus when the driver was unable to bring the vehicle to a halt. Massive recalls ensued and, according to Bloomberg, one dealership found a way to organize the recall work using his own software. The news site writes about a lawsuit between this dealer, named Roger Hogan, and Toyota—a suit that alleges that Toyota retaliated against Hogan because his special program was costing the car company too much money. From Bloomberg:
Hogan claimed that his Autovation program, which he started in 2011 after a massive recall related to complaints about sudden acceleration, was much more efficient than Toyota’s own system in identifying and contacting customers whose vehicles hadn’t had repairs done.
According to Hogan, Toyota wanted to kill his program, which was also used by other Toyota dealers, and oust him because it was costing the carmaker too much money to fix all the cars Autovation identified.
The state court ended up finding Toyota liable for “unfair interference in a contract Roger Hogan’s two dealerships had with the automaker,” Bloomberg writes, going on to say that “the jury found Toyota didn’t intend to deceive the dealerships by hiding material facts, and as a result didn’t have to pay punitive damages.”
According to the story, this software being used to track recall work was a violation of an agreement with Toyota, with Bloomberg providing Toyota’s response to the court outcome:
“While we respect the jury’s decision, we remain confident the evidence and testimony clearly demonstrated that Toyota abided by its contractual obligations to the Hogan dealerships and has been transparent with its dealers, regulators and customers regarding the vehicle issues raised at trial,” the company said in an emailed statement. “We will consider our options moving forward.”
At the trial, Toyota denied the allegations and argued that Hogan brought the lawsuit because the carmaker didn’t want to go along with the succession plan for his dealerships. The Autovation program was a for-profit side business Hogan was running in violation of his agreements with Toyota, the automaker’s lawyer said.
It’s a weird case, but an expensive one for Toyota, which already paid enough bills related to that unintended acceleration issue.
3rd Gear: Tesla Wants Apple’s Help on Corporate Spy Case
Back in July of 2018, we wrote about a former Apple employee who was charged with allegedly unlawfully taking trade secrets related to self-driving car development to a competitor. In our story, we wrote that the feds were claiming the ex-staffer attempted to download a blueprint for a self-driving car to a personal laptop, before trying to flee the country and join a new startup in China. That new startup was XMotors, the same company to which a Tesla engineer left, but not before downloading autopilot-related source code.
Along with typical information demands in the early fact-finding phase of the lawsuit that are spelled out in a court filing last week — Tesla wants to see the engineer’s emails and have a forensic analysis conducted on his electronic devices — the company founded by Elon Musk also disclosed it served the iPhone maker with a subpoena.
The documents Tesla seeks from Apple aren’t specified in the filing, but the thinking may be that while the Silicon Valley titans are rivals in the ultra-hot self-driving space, they share a common enemy in Xpeng.
For his part, the ex-Tesla engineer admitted that he had indeed downloaded source code related to Tesla’s Autopilot, but he says he did nothing wrong. From Bloomberg:
The former Tesla engineer, Guangzhi Cao, acknowledged in a court filing that he downloaded copies of Tesla’s Autopilot-related source code to his personal iCloud account, but denies any wrongdoing.
Cao “has done precisely nothing with Tesla’s IP,” having “diligently and earnestly” tried to scrub all of Tesla’s source code from his personal devices and volunteered to provide the company with complete forensic copies of any devices it wished to inspect, his lawyers wrote.
4th Gear: Trump Gives Automakers Relief on Fuel Economy Fines
For a while now, we’ve been writing about the Trump administration’s mission to lightening up on Obama-era automobile fuel economy standards, and now Reuters reports that the administration plans to freeze penalties for automakers that do not meet those standards.
From the story:
Congress in 2015 ordered federal agencies to adjust a wide range of civil penalties to account for inflation and, in response, the National Highway Traffic Safety Administration (NHTSA) under President Barack Obama issued rules to eventually raise fines to $14 from $5.50 for every 0.1 mile per gallon of fuel that new cars and trucks consume in excess of the required standards.
Automakers protested the hike, saying it could increase industry compliance costs by $1 billion annually.
After a group of states and environmental groups filed suit, the Trump administration began the process of formally undoing the Obama regulation and first proposed the freeze in 2018.
In a statement late on Friday, NHTSA said it was faithfully following the intent of Congress to ensure the penalty rate was set at the level required by statute.
NHTSA mentioned that a main benefit of the decision is to “cut the future burden on industry and consumers by up to $1 billion a year,” per Reuters. But of course, a number of states aren’t happy about any this, with some even having sued the Trump administration over relaxation of emissions regulations. Reuters write that a couple of those states said last year: “If the penalty is not sufficiently high, automakers lack a vital incentive to manufacture fuel-efficient vehicles.” That sounds like a reasonable point.
5th Gear: Union Contract Negotiations are Underway
Union contract negotiations have begun, and the Detroit News has a nice photo of UAW’s president shaking hands with Bill Ford Jr. as the two begin their discussions, which are expected to be quite tense, with the news site writing:
...On one side is an automaker coming off a stretch of record profits, but is trying to cut costs to prepare for an autonomous and electric future. On the other side, the labor union is looking for job security and a piece of the fat profits all three Detroit automakers reported annually since workers ratified the last contract in 2015.
The UAW President, Gary Jones, is clearly not playing around:
“Despite record corporate profits, we’ve been watching a race to the bottom over the past several years for working men and women in this country,” Jones said. “... This must stop.”
This could get interesting.
Reverse: Some Incredible Stuff Happened 50 Years Ago Involving a Moon
At 9:32 a.m. EDT, Apollo 11, the first U.S. lunar landing mission, is launched from Cape Canaveral, Florida, on a historic journey to the surface of the moon. After traveling 240,000 miles in 76 hours, Apollo 11 entered into a lunar orbit on July 19.
Neutral: What Kind of Electric Car Do You Want to See?
Given what’s currently out there, what are some market segments you’d like to see filled by EVs? How can Honda specifically stand out in this space?