Illustration for article titled Teslas Autopilot Is Once Again Under Investigation By The Feds
Photo: STR/AFP (Getty)
The Morning ShiftAll your daily car news in one convenient place. Isn't your time more important?

Tesla will be held accountable for Autopilot crashes, Nio has big plans to expand, and there are fewer traffic deaths in the United States than in past years. All this and more in The Morning Shift for Tuesday, February 25, 2020.

Advertisement

1st: NTSB To Put Tesla Through The Ringer Again

The National Transportation Safety Board isn’t all that impressed with Tesla. Back in 2017, it recommended that any auto company using driver-assist systems—like Tesla’s Autopilot—do a better job implementing technology that can prevent inattentive drivers from causing absolute chaos. But Tesla... well, I’ll let Auto News give you the context:

Automakers — including Volkswagen Group, Nissan Motor Co. and BMW — have told the NTSB how their systems ensured driver engagement, which the agency deemed acceptable responses. Tesla has had no formal correspondence with NTSB officials responsible for monitoring how safety recommendations are implemented, NTSB spokesman Chris O’Neil said.

“It’s not the norm,” O’Neil said. “Most recommendation recipients respond in the prescribed 90-day window.”

Tesla didn’t respond to a request for comment but has said it updated Autopilot in part to issue more frequent warnings to inattentive drivers.

Advertisement

Tesla didn’t respond to NTSB... but it has also fallen under scrutiny because three deaths have resulted from the improper use of Autopilot. Obviously those frequent warnings weren’t enough.

It might also serve as a reprimand for Tesla CEO Elon Musk’s behavior. Not only did his company fail to respond to the NTSB’s request for a more robust Autopilot system, but Musk also released information about one of the fatal crashes. In case you didn’t know, it’s not okay to publicly share info about an ongoing probe. We expect the company will be taken to task during today’s NTSB hearing.

Auto News points out that the hearing could also serve as a cautionary tale:

The hearing could hold lessons for the auto industry as automated driving features are becoming increasingly common on new vehicles. Several other automakers have also equipped their vehicles with technologies that can provide automated steering, acceleration and braking, and some have installed systems to ensure drivers pay attention. General Motors and Subaru Corp. use infrared cameras to track head and eye movement, and Nissan last year said it would include a similar driver monitor in a system designed to offer hands-free driving on the highway.

Advertisement

The first probe took place in 2017. This second one will focus largely on what Tesla has continued to fail to do with its Autopilot system.

2nd: Nio Establishing A Billion Dollar Deal With Hefei Government

Nio might be the most well-known of the new Chinese automotive startups—largely due to its lack of appropriate funding. But that could all change sometime here in the near future, Reuters reports, because the company is in talks with the Hefei government for a fundraising campaign of more than 10 billion yuan ($1.42 billion), along with new manufacturing plants.

Advertisement

Per Reuters:

Nio is in talks with the capital city of Anhui province, where it is building cars with local automaker JAC, to build research centres and car plants.

Nio will provide details in the next two months, it said.

That said, Nio is also known for its big-money deals that just kind of never happen:

Under cash flow pressure, Nio said in May last year it would form a joint venture with Beijing E-Town International Investment and Development Co. Ltd which will invest 10 billion yuan in the new entity. There has been no further announcements on the deal.

It has also issued bonds and accelerated cost-cutting to slow its cash burn as it seeks to attract more investors.

Advertisement

Car sales in China have plunged recently as a result of the coronavirus, but Nio’s problems started long before that. The China Association of Automobile Manufacturers noted that electric vehicle sales have fallen for seven straight months, while other “new energy” vehicles seem to be following a similar trend.

3rd: U.S. Traffic Deaths Are Still In Decline

The National Safety Council released figures last week that show that, for the second year running, the United States has seen a decrease in traffic deaths. A small decrease, yes, but a decrease nonetheless. In 2019, there were 38,800 deaths.

Advertisement

From Auto News:

The 2019 total represents a 2 percent decline from 2018, which saw slightly more than 39,400 road deaths, and a 4 percent decline from 2017, when about 40,230 people died in vehicle crashes, according to the Itasca, Ill.-based safety organization.

Preliminary estimates suggest the United States may be benefiting from “risk mitigation actions implemented in the last few years,” the council said in the news release. One example the group cited is the Vision Zero initiative, a strategy gaining momentum in major cities such as Los Angeles, Chicago and New York that works to improve traffic safety by taking actions such as redesigning high-crash areas. Another proven safety measure is lowering the legal alcohol-concentration limit for drivers.

Advertisement

That said, 38,800 is still a big number, one deserving of some further scrutiny and more comprehensive change in the safety realm.

4th: “We Just Wouldn’t Be Able To Sell Our Cars”

Nissan finally said what automakers have likely been thinking ever since the first hints of Brexit arrived on the horizon: The company just won’t be able to do it.

Advertisement

From Auto News Europe:

Should Britain fail to reach a free-trade agreement with the European Union, a resulting 10 percent tariff on cars and parts could not only spell the demise of the plant, which sends about three-quarters of its output to the continent, but also of Nissan’s entire European strategy, [Gianluca de Ficchy, chairman of Nissan Europe] said.

“We would not be viable,” he said. “We just wouldn’t be able to sell our cars.”

I can’t think of the last time an automaker was so straightforward about it, but it’s about time. Without a trade deal, Brexit is going to absolutely demolish the automotive industry as we currently know it, and people across the globe are going to suffer.

Advertisement

Nissan has been having a particularly tough time lately. Sales are down so drastically that Nissan had to cut its full-year profit expectations earlier in February. It’s unlikely that Nissan will see a change in its fortune any time soon. And Brexit is likely just going to pile more problems onto its shoulders.

Nissan’s biggest hope at the moment is that Boris Johnson will negotiate a trade deal with Europe that will lessen the financial blow.

Advertisement

5th: Virgin Galactic Has No Profits But Tons Of Investors

Virgin Galactic has been eclectic businessman Richard Branson’s newest Thing since 2004. It’s a space transport company, one that claims it will revolutionize the way we travel—both into outer space but also across continents. But since that technology doesn’t exist yet, there aren’t really any traditional markers of business success. No customers. No sales. No profits.

Advertisement

But people are eating it up, Bloomberg reports:

That unfettered enthusiasm is responsible for driving up Virgin Galactic’s stock by almost 200% so far this year, conjuring comparisons to Tesla Inc.’s meteoric rise. Virgin has more than doubled over an eight-day winning streak, hitting a high of $42.49 on Feb. 20 from below $7 in late November. That took its market value to almost $8 billion from $2.4 billion in early January. The stock took a breather in a couple recent sessions but rose by 1.2% even in Monday’s market crash.

Advertisement

Let’s reiterate a very important point: this company is not offering a real product yet. Right now, Virgin Galactic is powered solely by a vast amount of hype and a lot of money from people who are hoping to buy in before it takes off. Think about how many people wish they’d invested in Apple before it became a massively profitable company. They’re mainly trying to replicate that enthusiasm here.

Except, the whole operation could totally go bust within the next year:

In November, Virgin reported a net loss of $51.5 million for the third quarter and $832,000 in sales. The company has about 600 customers who have each paid as much as $250,000 for a ticket to ride into space; it stopped taking reservations in December 2018.

Advertisement

Basically, the whole operation depends on people remaining excited for Virgin Galactic to start actually, uh, doing something because it’s partially their money that’s actually funding the creation of a product.

Whether anything comes of it remains to be seen, but it’s definitely a fascinating business model. If Virgin Galactic has success, it’s likely we’ll see more ambitious companies taking up its mantle.

Advertisement

Reverse: Jean Todt Born, 1946

A former racer, Jean Todt has been a key player in both motorsport and road-going cars for years. From the FIA website:

Jean Todt was elected President of the Fédération Internationale de l’Automobile (FIA) on 23 October 2009, re-elected on 6 December 2013, and again on 8 December 2017.

On April 29 2015, Jean Todt was appointed by the UN Secretary-General Ban Ki-moon as his Special Envoy for Road Safety, and was confirmed in April 2017 by the new UN Secretary-General António Guterres.

Advertisement

Neutral: Is Nio Going To Make It?

Nio has seemed to be one of the most bombastic new EV makers while also managing to have very little to show for it. Will Nio actually pull through this time?

Staff writer. Motorsport fanatic. Proud owner of a 2013 Mazda 2.

Share This Story

Get our newsletter