Fiat can't wait forever for Renault

[VoiceOfReason]

Breakingviews - Fiat can’t wait forever for Renault to sort itself

"A lengthy antitrust review would probably postpone the deal’s completion until well into 2021 - the year in which new European carbon emissions rules bite."
Sure would be nice to not have this horde of financial penalties built on a house of lies with which to contend . . .
$77 US Million last year, plus over a Billion Euros if I understand correctly.

 

[Mopar426]

If FCA truly can't make it on their own, and they can't find a partner then I wonder what their plan is?

 

[VoiceOfReason]

And it’s causing issues for GM as well:

Auto workers union says it will strike against GM at midnight

Members of the United Auto Workers union working at General Motors agreed Saturday night to stay on the job past a midnight deadline for a new contract, but remained on the verge of a strike.

www.cnn.com

“All three automakers are dealing with slower sales and the need to make huge multi-billion-dollar investments in developing electric and self-driving vehicles that have more long-term potential than current market demand.”

That “potential” is a legislative fabrication. The true market “demand” for such things is minuscule (less than 4% in the US and about half that in Europe).

They can make it on their own if legislators would stop impeding progress with irrational legislation. There is still the chance that market forces will reverse some of the idiotic policies driving this nonsense. It’s like fighting prohibition all over again. There is a limit to what people will tolerate.

 

[Mopar426]

I dont know why they'd have to invest "billions upon billions" into what most likely will end up being electric motors attached to the wheels and a skateboard chassis filled with batteries. The autonomous tech will probably come from suppliers and it'll be like that across the board. I don't blame FCA at all for lagging behind - let the others pay for it.

 

[Bili]

@VoiceOfReason

There is no need for insults or diving too much into politics.

There is a Q2 2019 Earnings Call Transcript:
Fiat Chrysler Automobiles N.V. (FCAU) CEO Michael Manley on Q2 2019 Results - Earnings Call Transcript

About European electrification plan which are not related to potential marriage although profit is:

Michael Manley

Actually just before – thanks [indiscernible]. I just want to say before we open up to Q&A, I just want to quickly talk about compliance in terms of CO2 emissions standards in Europe because, obviously, last quarter, on the Q&A, we discussed that strategy to reach compliance with European emission standards through a combination of continued deployment of more fuel-efficient traditional technologies. And then I talked a little bit about the progressive rollout of electrified vehicles and, obviously, the use of pooling arrangements within EU. And I just want to add a little bit clarity before we go to the Q&A session.

So, in 2019, we'll, obviously, continue to roll out additional technology improvements, but we'll have fuel efficiency of our vehicles, and that does include our new combustion engines. So, the latest GSE engines are now being rolled out progressively across Europe, which will give us a significant help.

And these actions, combined with the credit pooling agreement with Tesla that I discussed before, will mean that FCA will not pay fines this year.

Now, in 2020, we are going to launch the Fiat 500 BEV that I mentioned earlier, along with the Jeep Compass Renegade and Wrangler plug-in hybrids, which I think will probably get to the sales mix somewhere in the order of around 5%.

And these vehicles along with the increased use of mild hybrids, combined with our Tesla credit pooling agreement, means that we're forecasting to be compliant in 2020 with a combination of those things.

Now, in 2021, we'll add another battery electric vehicle to our fleet, another plug-in hybrid and four more mild hybrid applications. And that will be as we transition to meeting emissions standards in 2022 with our own products, rather than in combination with carbon credits.

So, what we're looking at is really a transition from where we sit today, progressive transition, I think, with the right investments in our electrified vehicle fleet to back end of 2021, 2022 where we will through our own products, as I just mentioned, be completely compliant.

That's really the forecast for us over the next two to three years. And with that, Joe, I will hand over to you for Q&A.

 

[VoiceOfReason]

@VoiceOfReason

There is no need for insults or diving too much into politics.

There is a Q2 2019 Earnings Call Transcript:
Fiat Chrysler Automobiles N.V. (FCAU) CEO Michael Manley on Q2 2019 Results - Earnings Call Transcript

About European electrification plan which are not related to potential marriage although profit is:

Michael Manley

Actually just before – thanks [indiscernible]. I just want to say before we open up to Q&A, I just want to quickly talk about compliance in terms of CO2 emissions standards in Europe because, obviously, last quarter, on the Q&A, we discussed that strategy to reach compliance with European emission standards through a combination of continued deployment of more fuel-efficient traditional technologies. And then I talked a little bit about the progressive rollout of electrified vehicles and, obviously, the use of pooling arrangements within EU. And I just want to add a little bit clarity before we go to the Q&A session.

So, in 2019, we'll, obviously, continue to roll out additional technology improvements, but we'll have fuel efficiency of our vehicles, and that does include our new combustion engines. So, the latest GSE engines are now being rolled out progressively across Europe, which will give us a significant help.

And these actions, combined with the credit pooling agreement with Tesla that I discussed before, will mean that FCA will not pay fines this year.

Now, in 2020, we are going to launch the Fiat 500 BEV that I mentioned earlier, along with the Jeep Compass Renegade and Wrangler plug-in hybrids, which I think will probably get to the sales mix somewhere in the order of around 5%.

And these vehicles along with the increased use of mild hybrids, combined with our Tesla credit pooling agreement, means that we're forecasting to be compliant in 2020 with a combination of those things.

Now, in 2021, we'll add another battery electric vehicle to our fleet, another plug-in hybrid and four more mild hybrid applications. And that will be as we transition to meeting emissions standards in 2022 with our own products, rather than in combination with carbon credits.

So, what we're looking at is really a transition from where we sit today, progressive transition, I think, with the right investments in our electrified vehicle fleet to back end of 2021, 2022 where we will through our own products, as I just mentioned, be completely compliant.

That's really the forecast for us over the next two to three years. And with that, Joe, I will hand over to you for Q&A.

Please quote the insult to which you refer.
It is politics that is responsible for the charges mentioned above, which were levied, not because of anything FCA did, but because of the mix of vehicles their customers decided to purchase.
The market is not driving the push for electrification, legislation is.
Upon what is that legislation based?

I have some eight pages worth of references citing some of the most prominent climate scientists from preeminent positions at some of the world’s most prestigious universities at my disposal.
The UNPICC, on the other hand, is not a scientific body, but a political one - and very corrupt according to some of the PhD scientists with experience working with them who refused to participate further after being told what conclusions to draw before any data acquisition had even begun.
There is a great deal of misinformation in circulation on the subject. Multiple books have been written detailing these discrepancies.
I have yet to meet a climate change/global warming advocate that has read any of them.
Those who take the step to look into it, see through the fog - rather clearly.

 

[VoiceOfReason]

EU electrified car push is driven by rules, not market demand

Jaguar, Mercedes, Audi, Porsche and VW are among automakers electrifying their lineups in what looks like an enthusiastic move to the new technology. The reality is different because automakers are responding to legislation rather than consumer demand.

europe.autonews.com

"From the auto companies' perspective, it's clear that switching to electric is largely a response to legislation rather than consumer demand."

'In June during FCA's investors' day, where the company revealed its electric ambitions within the new five-year plan for the company, Chief Technical Officer Mark Chernoby described the European Union as the "most challenging regulatory/consumer environment in the world."'

'The company had little choice, Chernoby said, describing the fines in Europe for not achieving average CO2 targets by the 2020-21 time frame as "significant."'

'The manufacturers themselves are less keen on being made to switch. "Currently the reality is that the market uptake of electrically chargeable vehicles is low, and this is not due to lack of availability and choice," Daimler CEO Dieter Zetsche said last September. Zetsche was speaking in his role as president of the European auto industry association, ACEA, which continues to press the European Commission to relax the pressure to electrify by softening the 2030 emissions targets.'

"Consumers looking for an alternative to diesel now often opt for petrol vehicles or hybrid ones but are not yet making the switch to electrically chargeable vehicles on a large scale," ACEA wrote. Last year the market for plug-in vehicles was just 1.8 percent of the total market, according to figures from market analyst JATO Dynamics. At its current low rate of growth, ACEA argues, the market share would be 3.9 percent by 2025 and 5.4 percent by 2030.
----------------------------------------------------------------------------------------------

Exclusive: FCA Has Big News Coming in Electrification - The Detroit Bureau

Exclusive: Micky Bly helped launch the world's first plug-in hybrid, the Chevy Volt. Now, as FCA's new powertrain chief, he's leading the charge to transform the company from battery-car lagged to an industry leader, reports TheDetroitBureau.com.

www.thedetroitbureau.com

----------------------------------------------------------------------------------------------
There’s still no clear indication consumers are demanding electrified products, said Bly, especially in the U.S., but the need to move forward, anyway, is driven by two words: “government compliance.”
----------------------------------------------------------------------------------------------
Micky Bly, the Italian-American automaker’s new global powertrain chief

 

[TripleT]

There isn't enough rare earth metals to implement the EU plan for Zero emissions, eventually the car companies will have to push back or there is going to need to a technological breakthrough that is unforeseen. Perhaps the end to private automobile ownership, which actually may be the goal.

 

[Bili]

There isn't enough rare earth metals to implement the EU plan for Zero emissions, eventually the car companies will have to push back or there is going to need to a technological breakthrough that is unforeseen. Perhaps the end to private automobile ownership, which actually may be the goal.

Yes, with pushing electric cars this will happen. Card sharing and so on. At least with current state of technology. Do I like it? Of course not.

But I do think that targets set for 2021-2025 in Europe are realistic ones. Something which can be achieved. At least that was the case when target was set.
Since then then things have changed. Switch from NEDC to a more realistic WLTP driving cycle. Death of diesel. This two together made achieving 95 g/km of CO2 much harder but not impossible.

What I do not like are 2026-2030 target and post 2030 target. They are IMO unrealistic. Especially post 2030 target which was initially planned for 2040.

And that's it what you will got from me about regulations. This is not place for politics.

Now about FCA and how will they achieve this.

One is a very important new model. That's a 500 BEV on a dedicated new BEV platform. In this case packaging is much better in comparison with a car platform which is ICE capable.

Second are mild hybrids.
First is a very simple one. Belt Starter Generator (BSG) mild hybrids but contrary to one on Ram 1500 this one is 12 Volts. It will be attached to a small 1 liter naturally aspirated engine codenamed GSE N3. This engine will replace good old 1.2 8v FIRE which is the most often engine on Panda, 500 and Ypsilon.
Second is a more advanced P2 48 Volts mild hybrid. Electric motor on a transmission input. One engine should be GSE T4 with 190 HP. It will be on Small Wide based cars.

Finally there will be a particular PHEV architecture important for Europe. Of course this is not the only one PHEV architecture under development by FCA.
It's already unveiled for Jeep Compass and Renegade. It has e-axle at the back. The third car with this PHEV tech should be Alfa Tonale.

 

[VoiceOfReason]

Yes, with pushing electric cars this will happen. Card sharing and so on. At least with current state of technology. Do I like it? Of course not.

But I do think that targets set for 2021-2025 in Europe are realistic ones. Something which can be achieved. At least that was the case when target was set.
Since then then things have changed. Switch from NEDC to a more realistic WLTP driving cycle. Death of diesel. This two together made achieving 95 g/km of CO2 much harder but not impossible.

What I do not like are 2026-2030 target and post 2030 target. They are IMO unrealistic. Especially post 2030 target which was initially planned for 2040.

And that's it what you will got from me about regulations. This is not place for politics.

Now about FCA and how will they achieve this.

One is a very important new model. That's a 500 BEV on a dedicated new BEV platform. In this case packaging is much better in comparison with a car platform which is ICE capable.

Second are mild hybrids.
First is a very simple one. Belt Starter Generator (BSG) mild hybrids but contrary to one on Ram 1500 this one is 12 Volts. It will be attached to a small 1 liter naturally aspirated engine codenamed GSE N3. This engine will replace good old 1.2 8v FIRE which is the most often engine on Panda, 500 and Ypsilon.
Second is a more advanced P2 48 Volts mild hybrid. Electric motor on a transmission input. One engine should be GSE T4 with 190 HP. It will be on Small Wide based cars.

Finally there will be a particular PHEV architecture important for Europe. Of course this is not the only one PHEV architecture under development by FCA.
It's already unveiled for Jeep Compass and Renegade. It has e-axle at the back. The third car with this PHEV tech should be Alfa Tonale.

Given that FCA had to pay fines on the order of $77 million US and over a billion Euros due to politics, it is on topic. Politics affects the auto industry - rather significantly.
As far as all the variants of "e" vehicles go, they've been around most recently since 1999 and have never achieved 4% of new car sales - ever (and it's even lower in Europe), and - according to some auto executives, it is not for want of options. It isn't market demand driving this monumental shift, but in two words, "government compliance".
So when governments of the world start requiring dramatic shifts in the way car makers do business that has no basis in market demand, politics is absolutely on topic.

If you want the politics out of car forums, get the politics out of the auto industry. All will be well.

 

[Bili]

Europe has or had strong diesel sales in passenger car segment. People are shifting away from diesel.

In Q2 2019 diesel sales fell -16.4% while petrol went up only by 1.7%. Electric went up 35.6%.

Petrol now has 59.5% market share, diesel 31.3%, ECV (electrically chargeable vehicles) 2.4%, HEV 5,1%.
This means that electrified cars in Europe already have 7.5% market share and it's going up.

https://www.acea.be/uploads/press_releases_files/20190904_PRPC_fuel_Q2_2019_FINAL.pdf

 

[VoiceOfReason]

Europe has or had strong diesel sales in passenger car segment. People are shifting away from diesel.

In Q2 2019 diesel sales fell -16.4% while petrol went up only by 1.7%. Electric went up 35.6%.

Petrol now has 59.5% market share, diesel 31.3%, ECV (electrically chargeable vehicles) 2.4%, HEV 5,1%.
This means that electrified cars in Europe already have 7.5% market share and it's going up.

https://www.acea.be/uploads/press_releases_files/20190904_PRPC_fuel_Q2_2019_FINAL.pdf

We'll see. Electric cars saw 800% growth in the US at one point, which brought the total sales percentage . . . above 2% if I recall. The definition of "electric car" is also shifting. Originally, it meant cars which had an electric motor as the primary drive mechanism. Now, anything with any sort of electric assist is getting counted, which skews the numbers in favor of "electric cars". When you isolate the numbers to electric primary drive vehicles, the numbers aren't nearly as impressive. eTorque would be considered a "hybrid", despite the fact that the primary propulsion is almost always ICE. A breakdown of electric drive vehicles with no ICE at all or one only indirectly related to propulsion (to charge the batteries) and excluding "assist" (eTorque) does not show the anticipated growth. Also, Europe has cold winters just like the US does. When these electric car owners realize their range drops 40% due to the power draw from generating cabin heat, they may re-think buying another one.
They're fine for warm weather, short commute applications, but leave a lot to be desired outside of that narrow scope.

Europe is shifting away from diesels because the legislative restrictions (emissions standards) on them are so restrictive that compliance is practically untenable. Multiple manufacturers were caught "cheating" the emissions standards tests because compliance with them was complicated by . . . legislation (politics). Trying to cheat emissions standards was never so commonplace. Enter unrealistic standards, and corporations found complying with unrealistic standards exceedingly difficult.

 

[Bili]

Are we talking about electric cars or?

AFAIK in US it was always calculated as high voltage electrified cars. So HEV/FHEV, PHEV and BEV but not MHEV.

In Europe ACEA is giving numbers for BEV+PHEV and HEV which are FHEV(often called just HEV) and MHEV. The later is currenlty mostly consisted out of Toyota HEV sales because MHEV are still not widely available which will change in the near future.

Diesel? It offers great fuel economy with very high torque. It's not easy to replace. Actually on some markets like in Germany diesel has started to gain market share once again.
Fall of the diesel is not related to a compliance issues. Actually the process itself is not different in comparison to petrol. But many people are in fear that diesel may be banned in the near future plus there are zones in many cities where older diesels are forbidden but this is not new. For example my cousin has recently bought used VW with Euro 5 diesel engine and already it's banned in some German city centers.

Cheating? Not possible or very hard since introduction of RDE.

 

[VoiceOfReason]

Fall of the diesel is not related to a compliance issues. . . . But many people are in fear that diesel may be banned in the near future

Those two statements contradict each other.
People fearing diesel will be banned . . . is a compliance issue . . .

 

[VoiceOfReason]

Cheating? Not possible or very hard since introduction of RDE.

https://www.usnews.com/news/top-news/articles/2019-09-24/fiat-chrysler-senior-manager-charged-in-diesel-emissions-probe-court-document

You’re missing the point. The restrictions are unrealistic causing manufacturers to seek ways around them.

 

[Bili]

Given that FCA had to pay fines on the order of $77 million US and over a billion Euros

So fat FCA paid zero euros in Europe. They were always CO2 compliant. What will be in the future is something else. But so far nothing.

Those two statements contradict each other.
People fearing diesel will be banned . . . is a compliance issue . . .

I have a feeling that you are intentionally misinterpreting my post.

Cars can be Euro X compliant. City can decide on its own behalf will some car be allowed to enter city center based on Euro norm or even if in some areas they will introduce zero emission zones and thus allow entrance only for PHEV or BEV cars. This limitations are there because of citizen's health. NOx and PM are harmful for people.

https://www.usnews.com/news/top-news/articles/2019-09-24/fiat-chrysler-senior-manager-charged-in-diesel-emissions-probe-court-document

You’re missing the point. The restrictions are unrealistic causing manufacturers to seek ways around them.

I don't understand you. But I do believe that you don't know what RDE is.

Not related to any US Dieselgate. It was in the plans for Europe even before it. And it's obviously achievable because all European car makers are offering RDE compliant diesel engines.

 

[VoiceOfReason]

City can decide on its own behalf will some car be allowed

Thus “compliance”. Whether the requirement be “compliance” with a fuel emissions standard or “compliance” with not being permitted entry does not change the fact that both are legislation/political issues.
No one is requiring anyone to connect a snorkel to a tail pipe and the percentage of atmosphere affected by cars with emissions is minuscule.
They’ve been around for well over a century and in all that time, life expectancy has increased.
Ergo, the push for electrification in cars is politically motivated and is not being driven by market demand.

 

[TripleT]

None of this changes that the regulation and politics are ahead of the technology. Some of which are earth resource limited. There isn’t enough rare earth metals for the remote emission goals. At this point unless Tony Starks pulse reactor or they allow the gravity engines from Area 51 come online. power will come mostly from carbon fuels.

modest efficient based systems replacing lead acid systems will be the bulk of the consumer voluntary systems. This is in the implementation phase across the industry.

Predominate full electrification has 3 major hurdles ... rare earth metals, electric infrastructure, and power generation...... all of which the politicians and Green Consumer push are hopelessly ignorant

 

[VoiceOfReason]

Renault seems disinterested:

Renault-FCA merger 'behind us', French carmaker says

Fiat Chrysler's merger offer for Renault, which was abandoned in June, was no longer on the table and looked unlikely to be revived for now, the French carmaker's Chairman Jean-Dominique Senard said on Tuesday.

www.reuters.com

“Carmakers . . . are also grappling with more stringent rules on emissions and are racing to try and produce costlier, clean auto models, adding to pressures that might make alliances or mergers desirable.”

Roll back the emissions standards and the design, engineering, and development costs go down, as does any necessity to merge for the purposes of leveraging electrification research and development expenses. The atmosphere is roughly 75 miles high (at which point astronauts start experiencing the effects of re-entry) and the planet is not dying. This entire charade is nothing more than a push for globalization by a thoroughly corrupt cadre of political leftists courtesy of the United Nations, an organization littered with problems.

 

[Bili]

Thus “compliance”. Whether the requirement be “compliance” with a fuel emissions standard or “compliance” with not being permitted entry does not change the fact that both are legislation/political issues.
No one is requiring anyone to connect a snorkel to a tail pipe and the percentage of atmosphere affected by cars with emissions is minuscule.
They’ve been around for well over a century and in all that time, life expectancy has increased.
Ergo, the push for electrification in cars is politically motivated and is not being driven by market demand.

City center entry is not a legislation. It's not a law.

There is a need for electrification in Europe. But I'm not sure it will give results which customers want. Give me a car which can drive 400 km on a motorway with AC on and 4 adults aboard all while averaging 80+ MPH and than driving in a city for 100 km. And all of it with 42 mpg average. I'm unaware of such petrol car. Diesel can achieve it.

But still I think that electrification is the way to go. Electrified yes, electric no except for selected cars.

NOx and PM are harmful. European cities are far more dense and with far more public transport than American with New York as the only exception. Who owns a car in New York?

Renault seems disinterested:

Renault-FCA merger 'behind us', French carmaker says

Fiat Chrysler's merger offer for Renault, which was abandoned in June, was no longer on the table and looked unlikely to be revived for now, the French carmaker's Chairman Jean-Dominique Senard said on Tuesday.

www.reuters.com

“Carmakers . . . are also grappling with more stringent rules on emissions and are racing to try and produce costlier, clean auto models, adding to pressures that might make alliances or mergers desirable.”

Roll back the emissions standards and the design, engineering, and development costs go down, as does any necessity to merge for the purposes of leveraging electrification research and development expenses. The atmosphere is roughly 75 miles high (at which point astronauts start experiencing the effects of re-entry) and the planet is not dying. This entire charade is nothing more than a push for globalization by a thoroughly corrupt cadre of political leftists courtesy of the United Nations, an organization littered with problems.

Purpose of Renault marriage is to bring Europe region to a high profitability. It's very hard to fight with 6% market share which is in decline against 2 giants with 20+ % of market share.