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: Volkswagen Is Pushing The German Government To Phase Out Incentives To Buy Diesel Cars
Volkswagen’s clean diesels didn’t go over too well in the end, if you hadn’t heard. The company tipped a global set of dominoes when it got caught cheating its diesel emissions, and now the New York Times reports that Volkswagen said the German government should think about phasing out the subsidies urging Europeans to buy diesel cars—a huge portion of auto sales in Europe.
How noble of Volkswagen, to take this monumental step in pushing out diesel technology. (Or the company’s just mad that diesel didn’t work too well for it, and wants it out for good. Either one is equally as respectable. Totally.)
From The New York Times:
“We should question the logic and purpose of diesel subsidies,” Matthias Müller, the chief executive of Volkswagen, said in an interview with the German newspaper Handelsblatt. “The money can be invested more sensibly to promote more environmentally friendly technologies.”
Mr. Müller is the first German auto boss to publicly suggest that the government should stop subsidizing diesel, a step that would certainly hasten the technology’s demise. Though cautiously formulated, his comments represented a major turnaround.
Diesel was practically sacred to German carmakers until recently, but sales have been plummeting since Volkswagen confessed in 2015 to widespread cheating on emissions tests, a scandal that drew attention to the health hazards of diesel exhaust.
The New York Times reports that Müller also said he’s in favor of banning older diesels from city centers, but that the restrictions shouldn’t apply for newer diesel cars that meet emissions targets.
Volkswagen: The champion of clean emissions, everyone.
2nd Gear: It’s All About The Autonomous Hybrids At Ford
Ford is getting in on this autonomy game, too, and Automotive News reports that company sales executive Jim Farley said he thinks Ford’s taking a more practical approach than other car companies.
Since automakers and other companies deploying autonomous car fleets in large cities is the new hip and cool thing to do, Ford plans to get on that train as well. Automotive News reports that Ford’s test city hasn’t been named yet, but that its general plan is more extensive than others: Compared to GM’s ride-hailing services, Ford’s driverless cars will be used commercially, for package delivery and other things.
Farley calls it “a more diverse revenue model than ride-hailing,” and Ford plans to have the driverless cars out by 2021. From Automotive News:
Ford expects its vehicles will be on the road for roughly 20 hours a day, and Farley said using battery-electric vehicles doesn’t make business sense because they would need to recharge multiple times a day, cutting into profits.
He said fast-charging the battery also deteriorates its shelf life, which would necessitate more frequent replacement.
“Anytime you’re not carrying goods and people, you’re losing money,” Farley said. “The most important thing is uptime and profitability. What we see is the [hybrid] is a much better cost-of-ownership model.”
Ford also plans to design a new vehicle to be autonomous rather than putting autonomy on an existing car, which means your beloved Fusion probably won’t drive itself anytime soon.
3rd Gear: Uber’s Appealing Its Ban From London Next Year
Uber lost its license after transport regulator Transport for London decided that the company’s “approach and conduct was not fit and proper to hold a private vehicle hire license,” according to Reuters. That vibe has been pretty standard for Uber in recent memory.
Reuters reports that a British judge said at a preliminary hearing Monday that the appeal for Uber’s license is set to begin April 30 and take five days, but that it could be delayed until June.
4th Gear: VW Executive May Ask To Serve His Prison Sentence In Germany
A judged at the U.S. District Court in Detroit sentenced Oliver Schmidt, head of Volkswagen’s U.S. regulatory compliance office from 2014 to 2015, to seven years in prison last Wednesday for his role in the company’s emissions cheating scandal that surfaced in 2015. Schmidt was fined $400,000 in addition to prison.
That time is meant to be served in the U.S., but Reuters cites German newspaper Welt am Sonntag in reporting that Schmidt could request to serve it in Germany instead. From Reuters:
The paper said such a request would have to be approved by the U.S. Department of Justice as well as a German court. ...
Schmidt read a written statement in court acknowledging his guilt.
Welt am Sonntag quoted Schmidt’s lawyer Alexander Saettele as saying that he was looking into a possible appeal but that no decision had been made yet.
The verdict “was not a surprise, but it was still disappointing to him that he was not able to get through to the judge,” Saettele told the paper.
According to Reuters, a company spokesperson said Schmidt could also face disciplinary action at Volkswagen. That could include a termination of contract and/or damage claims.
Automotive News reports that the company also wants to change its compliance system across all of its brands—Volkswagen, Audi and Porsche—to keep this kind of thing from happening again.
5th Gear: How Genesis Wants To Place Dealerships
We greedy, social status-oriented humans have managed to equate “luxury” with “less access,” so that’s exactly what Hyundai’s new Genesis brand plans to have. Automotive News reports that because “it can have only a limited number” to be profitable, Hyundai Motor America wants Genesis to have less than 100 stand-alone dealers next year.
Some of those dealers won’t be from the Hyundai network, which hasn’t made Hyundai dealers happy. From Automotive News:
Hyundai Motor America plans to tell dealers by year end which markets it has designated for stand-alone Genesis stores, [Hyundai Chief Operating Officer Brian] Smith said. The automaker will begin selecting dealers at that time, with that initial expectation of 85 to 90 stores. ...
... [T]he ultimate number will be considerably lower than the roughly 350 Hyundai outlets that currently sell Genesis vehicles.
Squaring those numbers has been a contentious issue, one that came to a head at a dealer council meeting in Dallas in November. Dealers briefly walked out of discussions with brand executives amid frustration with the decision to open Genesis points to non-Hyundai dealers. They eventually rejoined the meeting, which continued as planned, sources told Automotive News.
Smith told Automotive News the number for 85 to 90 Genesis dealers could grow, depending on how well that number is “servicing the market.”
Reverse: Down With The LOMEX
On December 11, 1962, the New York City Board of Estimate unanimously votes against a plan for a $100 million elevated expressway across the bottom of Manhattan. The road, known as the Lower Manhattan Expressway, had been in the works since 1941. It was supposed to link the Holland Tunnel on the city’s West Side with the Williamsburg and Manhattan Bridges on the east side, slicing right through the neighborhoods now known as TriBeCa and SoHo.
Neutral: What IS Genesis?
The Hyundai-Genesis split is a tricky thing to think about. Genesis wants to break free of Hyundai and become an ultra-luxury brand, but it wasn’t that long ago that the Hyundai-badged Genesis was a vehicle.
So, will it just take time for Genesis to establish itself as separate and higher-end, and will the scarce dealerships help?