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Porsche will sacrifice profit growth to fund EV development

Porsche is so serious about developing electrified vehicles that it's willing to sacrifice big jumps in profits to fund the investment. After a massive upgrade to the Zuffenhausen plant, the company will build the Mission E EV (above) there in 2020. "Therefore it's clear that we can no longer carry out major leaps on results," the CEO Oliver Blume said about the automaker's financial growth, according to Reuters. Porsche will invest 1.1 billion euros ($1.2 billion) through 2020 to make additional electrified vehicles possible. Around 700 million euros ($765 million) will go into the Zuffenhausen factory to build a new paint shop, assembly plant, and upgrade the engine factory to produce electric motors for hybrids and EVs. The expansion will also bring all Cayman and Boxster assembly under one roof. Outside of Zuffenhausen, the money will improve the research and development center in Weissach and update the sales and marketing department in Ludwigsburg. Blume said Porsche has "many new products in the pipeline," according to Reuters, and he wants as many of those as possible available with some level of electrification. In addition to the Mission E, there are rumors the company might build a 911 plug-in hybrid as soon as 2018. While Blume doesn't forecast big jumps in profits, Porsche should still remain financially successful in the coming years. The automaker doesn't report its 2015 earnings until March 11, but Reuters reports the company's global deliveries topped 200,000 vehicles for the first time ever last year, which could push its operating profit well above 2014's 2.72 billion euros ($3 billion at current rates). Related Video:

Automakers not currently promoting EVs are probably doomed

Okay, let's be honest. The sky isn't falling – gas prices are. In fact, some experts say that prices at the pump will remain depressed for the next decade. Consumers have flocked to SUVs and CUVs, reversing the upward trend in US fuel economy seen over the last several years. A sudden push into electric vehicles seems ridiculous when gas guzzlers are selling so well. Make hay while the sun shines, right? A quick glance at some facts and figures provides evidence that the automakers currently doubling down on internal combustion probably have some rocky years ahead of them. Fiat Chrysler Automobiles is a prime example of a volume manufacturer devoted to incremental gains for existing powertrains. Though FCA will kill off some of its more fuel-efficient models, part of its business plan involves replacing four- and five-speed transmissions with eight- and nine-speed units, yielding a fuel efficiency boost in the vicinity of ten percent over the next few years. Recent developments by battery startups have led some to suggest that efficiency and capacity could increase by over 100 percent in the same time. Research and development budgets paint a grim picture for old guard companies like Fiat Chrysler: In 2014, FCA spent about $1,026 per car sold on R&D, compared with about $24,783 per car sold for Tesla. To be fair, FCA can't be expected to match Tesla's efforts when its entry-level cars list for little more than half that much. But even more so than R&D, the area in which newcomers like Tesla have the industry licked is infrastructure. We often forget that our vehicles are mostly useless metal boxes without access to the network of fueling stations that keep them rolling. While EVs can always be plugged in at home, their proliferation depends on a similar network of charging stations that can allow for prolonged travel. Tesla already has 597 of its 480-volt Superchargers installed worldwide, and that figure will continue to rise. Porsche has also proposed a new 800-volt "Turbo Charging Station" to support the production version of its Mission E concept, and perhaps other VW Auto Group vehicles. As EVs grow in popularity, investment in these proprietary networks will pay off — who would buy a Chevy if the gas stations served only Ford owners? If anyone missed the importance of infrastructure, it's Toyota.

New J.D. Power Initial Quality Study puts Porsche, GM in spotlight

J.D. Power and Associates has released its annual Initial Quality Study, and this year, Porsche and General Motors took the spotlight. The study, which asks new car owners to report problems experienced during the first 90 days of ownership, found that overall, the industry averages 113 problems per 100 vehicles.
Porsche managed a score of just 80 problems per 100 vehicles, while GMC took the second spot on the podium with 90. Lexus filled out the top three with 94 problems per 100 vehicles, followed by Infiniti at 95 and Chevrolet at 97. The study also looks at specific models, and found the Lexus LS to enjoy the best initial quality at 59 problems per 100 vehicles.
Interestingly enough, the report found that around two-thirds of most owner problems experienced in the first 90 days are attributable to vehicle design instead of mechanical failure. Specifically - echoing a refrain we've been hearing for the last few years - owners are having a hard time figuring out how to use the technology present in their new vehicles. Head over to the J.D. Power site for more information, or scroll down below for the company's related press release.