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VW The Latest Automaker To Step Back From All-Electric Plans To Embrace Hybrids

May 17, 2024

VW The Latest Automaker To Step Back From All-Electric Plans To Embrace Hybrids

Not to be left behind by the rest of the industry, Volkswagen is the latest auto manufacturer to walk back its plans to go all-electric.

The move should come as no surprise to Zero Hedge readers, as we have been writing non-stop about the industry’s shift from BEVs back to a more common sense (and cost efficient) model, hybrids, over the last year.

Volkswagen was once heavily invested in promoting its ID line of electric vehicles as the future, Bloomberg wrote this week. But now it has admitted it needs more plug-in hybrids due to slowing EV sales.

This shift is part of a broader reworking of VW’s electrification plans, following botched model releases and falling behind in China, the report says. The company has abandoned efforts to seek outside investment for its battery unit and canceled plans for a €2 billion EV factory in Germany.

Despite its pivot to electric cars, VW is still selling many combustion engine vehicles and is likely to exceed its emissions allowance next year. CEO Oliver Blume has requested leniency from European regulators, a stark change from VW’s aggressive EV lobbying just three years ago.

VW’s electrification drive was partly a response to the fallout from its diesel emissions scandal, leading to an ambitious plan to launch 75 electric models by 2029. Former CEO Herbert Diess championed this rapid transition, causing friction with industry peers.

While not abandoning EVs, Blume is forming partnerships, like with Xpeng Inc., and preparing a new EV brand in China to attract young consumers. VW is also discussing with Renault SA to develop cheaper EVs for the mass market.

Recall back in April we noted that Ford was “re-timing” its efforts to go all electric and back in February we wrote that GM was shifting to plug-in hybrids, too.

…click on the above link to read the rest of the article…

Brazil Faces Unemployment “Crisis”, As Retail Sales Plunge, Rousseff Blasts “Coup-Mongers”

October 15, 2015

Brazil Faces Unemployment “Crisis”, As Retail Sales Plunge, Rousseff Blasts “Coup-Mongers”

Brazilian President Dilma Rousseff got a rare bit of respite on Tuesday when a Supreme Court justice granted an injunction that delays a lower house vote which could have paved the way for impeachment proceedings.

House speaker Eduardo Cunha has remained defiant, vowing to exercise his “constitutional prerogative” to review impeachment requests.

Of course Cunha has his own set of problems. Allegations of corruption tied to the discovery of Swiss bank accounts have led to calls for his resignation and that, in turn, has Rousseff’s “aides fear[ing] the speaker could try to speed up the impeachment process.” As Reuters notes, if Cunha accepts even one of three impeachment petitions he has on his desk, “a parliamentary commission with representatives of all parties would analyze it and put it to a lower house vote.”

It is essentially a race against time to see if the house ethics committee will force his resignation before he can secure the lower house support to force a Senate impeachment trial.

For her part, Rousseff has accused the opposition of “coup-mongering” following last week’s ruling by the TCU that she cooked the fiscal books. 

Meanwhile, as the intractable political stalemate keeps investors on edge regarding whether the government will be stable enough to enact the reforms needed to plug the budget gap, the economy continues to crumble.

We got a look at retail sales for August today and the picture was not pretty. Core retail sales fell by a larger-than-expected 0.9% month on month and July was revised lower to -1.6%. Broad retail sales fell 2.0% auto sales crashed 5.2%. Annually, core fell by 6.9% broad by 9.6% yoy. Here’s Goldman with the takeaway:

The near-term outlook for private consumption and retail sales remains negative owing to the significant deceleration of credit flows from both private and public banks, high levels of household indebtedness, declining job creation and real wage growth, higher interest rates, higher taxes (including via inflation), higher utility and transportation tariffs, heightened economic and political uncertainty and very depressed (record low) consumer confidence.

…click on the above link to read the rest of the article…

The First Crack: Deutsche Bank Preannounces Massive Loss, May Cut Dividend

October 8, 2015

The First Crack: Deutsche Bank Preannounces Massive Loss, May Cut Dividend

Amid numerous rumors that Deutsche Bank is among the corporations exposed to the VW fiasco, and to be clear there is no news to confirm that, DB has just kitchen-sinked it in a pre-announcement:

  • *DEUTSCHE BANK SEES 3Q NET LOSS EUR 6.2 BLN
  • *DEUTSCHE BANK TO RECOMMEND DIVIDEND CUT OR POSSIBLE ELIMINATION

Deutsche Bank stock is crashing down around 6% after-hours on the news.

*  *  *

Full Press release: Deutsche Bank expects to incur charges that will materially impact third quarter 2015 results:

An impairment of all goodwill and certain intangibles in Corporate Banking & Securities (CB&S) and Private & Business Clients (PBC) of approximately EUR 5.8 billion. This is largely driven by the impact of expected higher regulatory capital requirements on the measurement of the value of these segments as well as current expectations regarding the disposal of Postbank.

An impairment of the carrying value of Deutsche Bank’s 19.99% stake in Hua Xia Bank Co. Ltd. of approximately EUR 0.6 billion. This reflects an updated valuation triggered by a change of the intent of the holding as Deutsche Bank no longer considers this stake to be strategic.

Litigation provisions of approximately EUR 1.2 billion, the majority of which are not expected to be tax deductible. Final litigation provisions in the quarter may be affected by further events before we finalize and report third quarter results.

The impairment of goodwill and intangibles and of the Hua Xia investment will have no significant impact on Deutsche Bank’s regulatory capital ratios. Deutsche Bank currently expects to report a fully-loaded CRR/CRD4 Common Equity Tier 1 ratio for the third quarter of approximately 11%, which includes the impact of European Banking Authority Regulatory Technical Standards (\”Prudential Valuation\”) that were adopted in the quarter.

…click on the above link to read the rest of the article…

“Everyone Is Doing It”: How Carmakers Manipulate Emissions Test Results

October 3, 2015

“Everyone Is Doing It”: How Carmakers Manipulate Emissions Test Results

With Germany’s largest company by revenue, Volkswagen, deep in damage recovery mode, and the market still unable to decide just how systemic and profound the fallout will be from the emissions scandal which has already cost the job of VW’s CEO and which according to some will impact the GDP of Hungary and the Czech republic as much as -1.5%, many are still trying to determine not if but how many other companies – whether “clean diesel” focused or otherwise – will be impacted by the crackdown on emissions fraud.

We don’t know the answer suffice to speculate that it will be “many” for one simpler reason: there are dozens of ways to manipulate emissions tests in both the lab and on the road, and with the temptation to “reduce” emissions all too great for management teams laser-focused on boosting profit margins, one can be certain that in this particular case not only is there more than one cockroach, there are dozens.

The chart below from Transport and Environment shows some of the traditional ways in which carmakers manipulate CO2 emissions tests to make their cars appear more efficient:

 

Worse, according to a follow-up report, it is only a matter of time before far more widespread crackdowns take place within the auto industry where emissions fraud now appears as systemic as that of the global banking sector.

As reported earlier this week, the gap between official test results for CO2 emissions/fuel economy and real-world performance has increased to 40% on average in 2014 from 8% in 2001, according to T&E’s 2015 Mind the Gap report, which analyses on-the-road fuel consumption by motorists and highlights the abuses by carmakers of the current tests and the failure of EU regulators to close loopholes. T&E said the gap has become a chasm and, without action, will likely grow to 50% on average by 2020.

…click on the above link to read the rest of the article…

The Volkswagen scandal: say goodbye to the internal combustion engine!

September 23, 2015

The Volkswagen scandal: say goodbye to the internal combustion engine!

By now, I guess that everyone in the world has heard of how Volkswagen cheated consumers by falsifying the results of the emission tests from their diesel engines. It is a true witch hunt unleashed against Volkswagen. Maybe there are good reasons for it, but I think it is also something that should be taken with caution. A lot of it.

I have been a consultant for the automotive industry for some 20 years and I think that I know the way they operate. And I can tell you that they are not equipped for “cheating”, intended as willingly ignoring or breaking the law. They just don’t do that, they understand very well that the result could be something like what’s happening to Volkswagen nowadays; something that could lead to their end as a car manufacturer. On the contrary, carmakers tend to be extremely legalistic and apply to the letter the current laws and regulations.

This said, it is also clear that car makers are there to make a profit and their managers are supposed to “get results”. So, if the laws and the regulations are not clear, or do not explicitly say that something is forbidden; then, if that something is supposed to provide some advantage to the company, it may be done.

This is, I think, what happened in this case. It is very well known that the results of the pollution tests made in the lab are always much better than those made on the road. And it is very well known that the performances of cars as measured in standardized tests are always much better than those of real cars. It is all very well known and documented: look for instance here and here. (h/t G.Meneghello).
…click on the above link to read the rest of the article…

 

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