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Automakers face reality of EVs' cost — to jobs, and their bottom line

Related: We obsessively covered the Frankfurt Motor Show — here's our complete coverage FRANKFURT, Germany — European car bosses gathering for the Frankfurt auto show are beginning to address the realities of mass vehicle electrification, and its consequences for jobs and profit, their minds focused by government pledges to outlaw the combustion engine. As the latest such announcement by China added momentum to a push for zero-emissions motoring, Daimler, Volkswagen and PSA Group gave details about their electric programs that could give policymakers some pause. Planned electric Mercedes models will initially be just half as profitable as conventional alternatives, Daimler warned — forcing the group to find savings by outsourcing more component manufacturing, which may in turn threaten German jobs. "In-house production is almost irrelevant to the consumer," Daimler boss Dieter Zetsche told reporters on the eve of the Frankfurt Motor Show, in the midst of a German election campaign in which automotive jobs have loomed large. The company set a target of saving 4 billion euros ($4.8 billion) by 2025 to help fund the cost of its electric cars. "Daimler is the first company to state explicitly how much electric vehicles are going to hurt margins," said Bernstein analyst Max Warburton. "It was brave to go first — but of course it won't be the last." Volkswagen, for its part, said it was seeking new global supplier contracts to source 50 billion euros ($60 billion) of electric car content including batteries, which are not yet manufactured competitively in Europe. "A company like Volkswagen must lead, not follow," Chief Executive Matthias Mueller told reporters. VW diesel emissions-cheating exposed by U.S. regulators in 2015 triggered global public outrage, dozens more investigations into test-rigging by the wider industry and a push by some lawmakers to ban diesel and eventually all engines. TIGHTENING NOOSE Tesla shares jumped nearly 6 percent on Monday after a Chinese minister said it was a question of when, not if, Beijing bans fossil-fuel cars, tightening the noose around the combustion engine. France and Britain have promised its outright abolition by 2040. But PSA, the maker of Peugeots and Citroens, said it was concerned about the risks if consumers were left behind in the rush, and a new generation of battery cars does not sell.

Mercedes, Nissan and VW slammed by China's CCTV

Several automakers in China, including joint ventures with Nissan, Volkswagen and Mercedes-Benz, are in hot water because their dealers are allegedly overcharging customers for repairs. China Central Television, the country's state broadcaster, leveled the claims during its annual Consumer Day expose. CCTV runs these reports each year on March 15 and often takes aim at foreign companies operating within China. This year the focus fell on automakers, according to the Financial Times, and no domestic car companies were targeted. The network also accused dealers of overselling parts, and it took aim at Jaguar Land Rover specifically for problems surrounding transmission repairs, according to Reuters. The yearly stories are often criticized for focusing on outside businesses. "It panders to a certain type of nationalism as it tends to target foreign companies and rarely touches large state groups or monopolies," Qiao Mu, a journalism professor at Beijing Foreign Studies University, said to the Financial Times. Foreign automakers seem to face tighter scrutiny when doing business in China than their domestic counterparts, in general. The government there investigated several luxury brands, including Audi and BMW, last year for how they supplied spare parts and whether the components were overpriced. Some incurred fines, and Lexus decided to lower its prices. Volkswagen also experienced protests when owners felt the company wasn't handling a recall properly. The CCTV report also comes as many auto dealers in China are feeling a pinch due to high mandated sales targets from automakers. The situation was so dire in early 2015 several brands cut back sales targets and in some cases even paid the sellers to offset poor profits. News Source: Financial Times - sub. req., ReutersImage Credit: Andy Wong / AP Photo Government/Legal Mercedes-Benz Nissan Volkswagen Car Dealers Auto Repair Maintenance jaguar land rover

Recharge Wrap-up: Tesla firmware update videos, Mercedes S500 Plug-In Hybrid

See the Tesla Model S with Firmware 6.0 in action in new videos from Teslarati. The large software update includes improved traffic-based navigation, a calendar function, updated power management, "Location-Based Smart Air Suspension" as well as other improvements. Drivers get more route options to save energy, and more control over how the car saves energy. The car can also remember ride height settings when driving in those same locations again. Additionally, you can start and drive the car without a key, just using the smartphone app. See how it all works in the videos below, the second of which focuses on pairing with the updated phone app. The California Public Utilities Commission (CPUC) has deemed ride-hailing app Uber's carpooling service illegal. The way the UberPool service is categorized by the CPUC, charging multiple riders separate fares for a single ride runs afoul of the law. The technical details are a bit convoluted, and what supporters could deem arbitrary, but Forbes delves into the details a bit further to try to make sense of California's intentions (even considering the possibility of other ride services, such as airport shuttle companies, fueling the fire). Lyft - which operates a similar service called LyftLine - and Sidecar have also received notices from the CPUC. Read more at Forbes. China's recent enthusiasm for electric vehicles could be largely attributed to a single person, Ma Kai. After the Politburo member was named vice premier, he encouraged maintaining and increasing EV subsidies when China sought to decrease them. He also seems ready to fight for more EV deregulation to encourage more clean vehicles. Read more about Ma Kai and what he's done for China's EV legislation at Automotive News. Mercedes-Benz begins deliveries of the S500 Plug-In Hybrid this month. The high-tech luxury PHEV features energy saving modes based on driver, route and traffic, and features a haptic accelerator that can signal when the driver should ease off to save power. It's powered by a biturbocharged V6 and 85-kW electric motor. Its 8.7-kWh battery offers about 20 miles of electric driving. The S500 plug-in starts at about $146,000. Read more in the press release below. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.