The One Screwup That's Killing Japan's Electric Car Dream
This is The Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place every weekday morning. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn't your time more important?
1st Gear: It's The Battery
The Nissan Leaf was the success that Carlos Ghosn was banking on, thinking that a cheap electric car with a reasonable range (twice the distance most people drive on average) would be a huge market success.
It wasn't. Instead, expensive electric vehicles like the Tesla Model S made the market. And that would all be alright if Nissan didn't decide to also become a battery manufacturer, and take government money to build their own battery plants in Tennessee and Japan.
Carlos Ghosn is reportedly planning to cut production of future batteries in both countries at a great cost and instead do what Renault is doing and source a lot of their batteries from South Korea's LG Chem.
And it's that decision that's reportedly causing execs and Nissan and Renault, as well as engineers with the companies, so much trouble as Reuters details in this must read report:
"We set out to be a leader in battery manufacturing but it turned out to be less competitive than we'd wanted," said one executive on condition of anonymity. "We're still between six months and a year behind LG in price-performance terms."
It gets worse.
Nissan is seeking to unwind a ruinous NEC contract that requires it to purchase electrodes for the full capacity of 220,000 Leaf-sized 24 kWh batteries regardless of actual sales, sources said. The joint venture partner's consent is also needed to bring LG production or other activities onto the Tennessee or Sunderland sites, which together employ 500 workers.
The financial hit for Nissan "will depend on what else we can do with the plants", with heavy charges likely if both are closed, one manager added.
Renault has already taken at least one writedown of 85 million euros on its over-investment in electric cars following the collapse of Better Place, a charging startup that had ordered 100,000 of its battery-powered Fluence sedans.
And...
Former Nissan second-in-command Carlos Tavares, racing to beat the Renault Zoe to market, cut Leaf development by a year and skipped a critical battery redesign, according to alliance veterans. Nissan later cut prices, settled a class action and offered retroactive warranties to answer customer concerns about battery deterioration. Tavares now heads PSA Peugeot Citroen.
His Renault archrival at the time, Patrick Pelata, signed a confidentiality deal with LG that meant Nissan battery engineers never even knew what they were up against.
Ouch.
2nd Gear: Alan Mulally Not Running For President
Despite claims to the contrary, Alan Mulally ain't running for CEO of American anytime soon.
Asked at a forum in Indianapolis by an ABC News reporter if he would consider running for president, Mulally, 68, who is also a former longtime Boeing Co. executive, didn't directly answer.
"I really think it's important that we all pull together. We really need to pull together around a compelling vision for our country and a comprehensive strategy to do it and work together. We really need to do it," Mulally said to applause at a radio industry conference, according to a video of the event posted late Friday on ABC's website.
Mulally said in an email to The Detroit News late Sunday that he's not running for president.
He said he was "honored at the suggestion, but that is not a role I am considering."
Why would he? He leaves the company on a high note as one of the most well-respected CEOs ever. He's rich. He's happy.
I was actually in Prague a few weeks ago up in their castle complex just wandering around when, through a wide door in a dim palace room, Alan Mulally suddenly appeared.
All smiles, he shook my hand and explained that he was in the Czech Republic on vacation with his family. We exchanged pleasantries for a few minutes, talked about that other Matt we both know, and then said our goodbyes.
Pleasant as he always is, I don't think I've ever seen someone who just led a car company who was that cheerful and unburdened. He was even wearing a Ford polo because, even though he's got something like a trillion shares in the company, he's so carefree he seems content just putting on whatever free clothing someone hands him.
3rd Gear: The Great Uber Driver Compromise
When there's no surge pricing, Uber is actually a decent way to get around New York. I've ended up ordering a few cars at the discount "Uber X" price and ending up with a Town Car or something else that would normally be Uber Black.
According to the other Matt (and Serena Saitto), that's irked some drivers:
Many said the company was forcing them to take passengers who request rides through the cheaper UberX service, rather than just the pricier Uber black-car or SUV service, thereby hurting fares. Uber yesterday changed its policy so drivers can opt in or out of driving for services like UberX.
Some of the drivers also said Uber is leaving them with just 62 percent of fares, after the San Francisco-based company initially agreed to give them 80 percent of the price of a ride. The drivers said they plan to protest each week, with another demonstration in front of Uber's Long Island City office on Sept. 15.
"We're not going to get tired," said Abdoulrahime Diallo, 28, a driver from the Bronx who was helping to lead the protest. "We're going to do the same thing over and over and over again."
This is all churn, eventually it'll get settled.
4th Gear: Maybe The Glassholes Will Inherit The Future
Is it time to panic, maybe it's time to panic? At least that's what people are talking about:
Arguably the biggest threat of all though comes from sweeping changes facing the industry because of new attitudes towards car ownership and mobility itself.
A recent report from investment bank Morgan Stanley calculated that cars are only used for about four percent of their lives.
"The world's $20 trillion car fleet achieves only four percent utilization, leaving 8.4 trillion hours a year not used. What a waste!!!." It said.
If car buyers are moved by that argument, that could trigger a sea-change in attitudes towards their expensive vehicles.
Not exactly. We've built an infrastructure that's too car centric in much of the world and that has to change first. I'm not saying it shouldn't change (it should) and that we shouldn't better optimize the cars we have (we should), just htat it isn't happening tomorrow.
5th Gear: Goodbye Luca di, And Thanks For All The Fish
As we continue to digest the news of Ferrari's future there are some interesting perspectives on what to do next, but many agree that maybe Luca's time was over.
Montezemolo's belief that Ferrari must keep its distance from the lesser brands is all too reminiscent of the barriers Mercedes-Benz executives erected against Chrysler. They kept the company from realizing the benefits promised from their merger, crippled DaimlerChrysler and led to the company's eventual dissolution and Chrysler's bankruptcy.
The best thing about Fiat Chrysler Automobiles so far has been the brands' sharing of talent and technology. Chrysler and Fiat have both benefited from it.
There's no way a strong Chrysler, Maserati, Jeep, Alfa Romeo, Fiat or Dodge will diminish Ferrari. It's inconceivable that anyone will think less of a $1.4-million La Ferrari super car because the same company builds the Chrysler Town & Country minivan.
Maybe, maybe not.
Reverse: I didn't make this up
On September 15, 1969, the classic British heist movie The Italian Job is released in Swedish theaters. (It had opened in the U.K. in June and in the United States on September 3.)
[HISTORY]
Neutral: Is Nissan Right To Cut-And-Run On Battery Production?
Or should they follow Tesla's move? Why is Tesla different?
Photo Credit: AP Images