President Trump is pissed at Ford for siding with California over him, Care by Volvo is in hot water, German automakers team up for autonomous cars, more Tesla turnover, and much more on The Morning Shift of Thursday, August 22, 2019.
A war has been brewing between the state of California and the Trump administration, which has for a while been declaring its desire to roll back Obama-era fuel economy standards and revoke the California Air Resources Board’s ability to continue setting the strictest tailpipe emissions standards in the U.S.
The administration has claimed that the goal of easing up on fuel economy requirements is to significantly reduce overall vehicle costs and to get more people into newer, safer cars—the veracity of those claims have been disputed by a number of news outlets.
Automakers have been speaking out against the proposed rollback of EPA standards, as they’re worried that it will result in differing emissions standards between California (and states that follow its standards) and the rest of the nation, and that’s a logistical and technical nightmare. A number of automakers came to an agreement with the state California on emissions requirements earlier this summer, deciding to continue building vehicles that meet strict emissions standards, though the standards aren’t quite as strict as the original Obama-era standards.
Still, automakers’ move to work with California and effectively ignore Trump’s drastic standards rollback did not thrill the president, as this tweet—in which he calls automakers “politically correct” and claims their move will yield more expensive cars—from Wednesday demonstrates:
Oh, you didn’t think that was all he tweeted, did you? Nope, it gets weirder when he singles out Ford:
“Henry Ford would be very disappointed if he saw his modern-day descendants wanting to build a much more expensive car, that is far less safe and doesn’t work as well, because execs don’t want to fight California regulators,” he wrote, before claiming that his rollback is better for consumers, and that California will lead to automakers’ financial demise.
Here’s what FoMoCo had to say about this:
Ford said in a statement that it is focused on acting to protect the environment while also protecting the affordability of vehicles. “This agreement with California provides regulatory stability while reducing CO2 more than complying with two different standards,” it said.
This all comes after a recent white house summoning of automakers, per the New York Times:
The White House, blindsided by a pact between California and four automakers to oppose President Trump’s auto emissions rollbacks, has mounted an effort to prevent any more companies from joining California.
Toyota, Fiat Chrysler and General Motors were all summoned by a senior Trump adviser to a White House meeting last month where he pressed them to stand by the president’s own initiative, according to four people familiar with the talks.
Yikes, things are getting—I mean, staying—weird.
Dealerships are not happy about Volvo’s subscription service, Care By Volvo, because they think it’s cutting them out of a business opportunity and violating franchise laws, with Automotive News Europe writing:
The [New Motor Vehicle Board] unanimously voted Aug. 15 to direct the [California Department of Motor Vehicles] to investigate Care by Volvo and four claims that the program violates provisions of the state vehicle code, according to the dealers association. If violations are found, it may constitute disciplinary action against Volvo’s DMV license, according to dealers group.
The DMV will review whether Care by Volvo diverts customers from dealers to Volvo, if Volvo failed to properly notify franchisees and the board about the program, if Care by Volvo preferentially allocates vehicles and sales to certain dealerships, and if the program “undermines the purpose of prohibiting payment packing,” according to the dealers group, which represents nearly 1,200 new-vehicle dealerships, including nearly two dozen Volvo dealers.
For its part, Volvo responded to Automotive News, saying they’re making improvements:
“Volvo Car USA is committed to developing Care by Volvo in collaboration with our retailers to offer the flexibility of subscription side-by-side with traditional lease and financing,” a Volvo Car USA spokesman said in an emailed statement. “We continue to improve the program, which will soon enable retailers to complete subscription purchases and provide instant vehicle delivery. Volvo Car USA believes the addition of a subscription option on the sales floor will benefit both customers and retailers.”
This isn’t the first time we’ve written about this, as back in January we referenced an Automotive News story about the initial petition that the dealers association had just filed. From that story:
The California New Car Dealers Association, which represents 23 Volvo dealers, filed a petition Jan. 15 with California’s New Motor Vehicle Board, arguing that the Care By Volvo subscription program violates state law meant to prohibit manufacturers from competing with their franchisees.
The association also claims Volvo illegally modified its franchise agreements with dealers by changing how the subscription vehicles are retailed. The group wants the Department of Motor Vehicles to investigate Volvo’s subscription program and have it halted.
Volvo’s subscription service Care By Volvo promised participants a Volvo XC40 with insurance and maintenance included, all for for $600 a month. It sounded like a great deal, but then it ran into a number of snags. Namely, cars weren’t showing up in time, and customers weren’t thrilled with Volvo’s communication. The cause apparently had to do with paperwork issues, as we wrote in a previous story:
The majority of cars that customers ordered months ago have been sitting in the Port of Baltimore while a “paperwork” issue was cleared up, a Volvo spokesperson told Jalopnik, where they’ve been sitting for weeks after being shipped over from the Volvo factory in Belgium.
The problem came down to varying legal, ownership and insurance requirements between all 50 states, the Volvo official told us. As such, Care by Volvo has taken months longer than the company originally anticipated to get off the ground.
Who would have thought a subscription service would be this problematic?
Per a blog post from his new company, Tesla’s former head of Autopilot software has left to work at a venture capital firm called Greylock, Bloomberg reports. From the news site:
The former head of software for Tesla Inc.’s
Autopilot has joined Greylock Partners as an executive in
residence, according to a blog post from the Silicon Valley
venture capital firm.
Stuart Bowers, who joined Tesla in May 2018 as vice
president of engineering, spoke at the electric-car maker’s
investor day in April that was focused on plans for autonomous
vehicles. The blog Electrek reported weeks later that Chief
Executive Officer Elon Musk had taken control of the Autopilot
software team, and that Bowers had been stripped of some
This is, according to the electric car website Electrek, all part of a restructuring of the Autopilot team at Tesla, and the website suggests a possible reason for Bowers’ departure, writing:
While it’s unclear if Bowers was let go or if he quit, the recent changes in the Autopilot team appear to be Elon getting rid of people who don’t agree with his timeline of achieving fully autonomous vehicles by the end of next year.
It’s an extremely aggressive timeline that is doubted by the entire industry, but the CEO has been pushing hard for it over the last year.
We’ve reached out to Tesla to learn more. In any case, this seems a bit like a trend. Earlier this month, Bloomberg referenced a study from investment management and research company Bernstein, which described high executive turnover at Tesla compared to at a handful of other companies. The turnover, the study showed, was apparently significantly higher among those reporting to Elon Musk.
Here’s the gist of that Bloomberg story:
The electric-car maker has been changing over about 27% of its top executives on an annualized basis, said Toni Sacconaghi, a Bernstein analyst who rates Tesla shares the equivalent of a hold. That’s the highest rate among seven companies Sacconaghi benchmarked Tesla against, though Snap Inc. and Lyft Inc. have had similar levels of turnover, he wrote in a report Wednesday.
About 44% of executives reporting to Musk have changed over annually, Sacconaghi found, compared with about 9% on average at the other companies, which also include Amazon.com Inc., Uber Technologies Inc.and Facebook Inc.
Automakers have been joining forces lately to tackle some really expensive technological challenges, namely electromobility, self-driving cars, ride-hailing, and other “mobility” services. We’ve already heard that Daimler and BMW joined forces in the race towards autonomous cars, but now the German business magazine Wirtschafts Woche describes a new tie-up that includes Audi and will allegedly be announced early next month.
Translated from German:
As early as mid-September, Audi intends to announce its entry into cooperation with BMW and Daimler at the IAA Motor Show. According to information from the WirtschaftsWoche, the three premium carmakers will jointly develop autonomously driving cars.
Lots of people worry about how well self-driving car tech will work in the rain, possibly more than I worry about how well human eyes work in the rain. Those people can take solace in the fact that Google’s self-driving car spinoff, Waymo, is heading to Florida to see how the sensors handle all that precipitation. From the Detroit News:
Google autonomous vehicle spinoff Waymo says it will start testing on public roads in Florida to better experience heavy rain.
The Mountain View, California, company says tests will begin this month in the Miami area and include highway driving to Orlando, Tampa and Fort Myers. The Florida test vehicles will be driven by humans. They’ll collect data with laser and radar sensors. Heavy rain can affect image quality.
The story as written on History really gives the DS lots of credit:
On August 22, 1962, President Charles De Gaulle of France survives one of several assassination attempts against him thanks to the superior performance of the presidential automobile: The sleek, aerodynamic Citroen DS 19, known as “La Deesse” (The Goddess).
As his black Citroen DS sped along the Avenue de la Liberation in Paris at 70 miles per hour, 12 OAS gunmen opened fire on the car. A hail of 140 bullets, most of them coming from behind, killed two of the president’s motorcycle bodyguards, shattered the car’s rear window and punctured all four of its tires. Though the Citroen went into a front-wheel skid, De Gaulle’s chauffeur was able to accelerate out of the skid and drive to safety, all thanks to the car’s superior suspension system.
What’s your take on this whole emissions rollback/war with California thing?