A Financial Model Comparing Car Ownership with UberX (Los Angeles)

Kyle Hill:

It’s long been hailed by Uber CEO Travis Kalanick that their on-demand transportation service will eventually replace car ownership entirely. In fact, he believes one day all the Uber cars on the road may be driving themselves. As technology and competition drive down the costs of peer-to-peer ride-sharing, there’s no denying that we as consumers win. So what does this mean for the classic American dream: house, car and children? I’m here to tell you, one of these prizes might change.
 About two years ago I sold my Lexus GS 300 and replaced it with a sleek single-speed Pure Fix commuter bike. Two years later, I still bike to work every morning. And for anything over 3–5 miles, or when I’m just not feeling up for the workout, I call an Uber. I love the safety and convenience of Uber, the overall quality of their cars, and especially as a young black male, the peace of mind that I’ll never again have to deal with the police.

July/August 2014 US Market Residual Value Report

ALG TrueCar PDF:

ALG’s updated July/August 2014 edition has residuals declining 1.5 ppts compared to May/June 2014; this is more negative than expectations for a 1.0-ppt decline:

First quarter 2014 GDP contracted at a 1.0% annual pace according to the most recent estimate; data released since then points to an even stronger contraction

Employment rose by 217,000 positions in May; this is the fourth consecutive month with job gains of over 200,000

Gains in housing have slowed recently; though the Case-Shiller index of home prices is up over 12% over the last year, prices have risen just 0.7% in the last 6 months to March, with home sales slightly lower than last year

U.S. Utilities Push the Electric Car

Cassandra Sweet:

As utilities across the U.S. grapple with stagnant electricity sales, many see opportunity in the fledgling need for electric-car charging stations. But some companies’ tactics are spurring complaints from consumer advocates.

Electricity companies are asking permission to let them tack on fees to customer bills to fund pilot projects for building networks of charging stations. Critics say the requests are unfair because they would make all customers pay the high cost of experimental equipment even though it would benefit only a few—often affluent—people.

In San Diego, Sempra Energy’s SRE +1.04% power utility wants to install 5,500 electric-car chargers at hundreds of office parks, apartment buildings and condominium complexes at a cost of $100 million. The company says convenient, easy-to-use charging stations will encourage more Californians to adopt electric cars, improving air quality for everyone. The utility wants to add a surcharge to all San Diego customers’ bills.

The Utility Reform Network, a nongovernmental organization that fights rate increases, has asked state regulators to reject the new fee, about 40 cents a month for an average customer.

Wind and solar power are even more expensive than is commonly thought

The Economist:

SUBSIDIES for renewable energy are one of the most contested areas of public policy. Billions are spent nursing the infant solar- and wind-power industries in the hope that they will one day undercut fossil fuels and drastically reduce the amount of carbon dioxide being put into the atmosphere. The idea seems to be working. Photovoltaic panels have halved in price since 2008 and the capital cost of a solar-power plant—of which panels account for slightly under half—fell by 22% in 2010-13. In a few sunny places, solar power is providing electricity to the grid as cheaply as conventional coal-or gas-fired power plants.
 But whereas the cost of a solar panel is easy to calculate, the cost of electricity is harder to assess. It depends not only on the fuel used, but also on the cost of capital (power plants take years to build and last for decades), how much of the time a plant operates, and whether it generates power at times of peak demand. To take account of all this, economists use “levelised costs”—the net present value of all costs (capital and operating) of a generating unit over its life cycle, divided by the number of megawatt-hours of electricity it is expected to supply.

Massachusetts Has the Worst US Drivers

Alex Nunez:

Allstate Insurance’s annual Best Driver’s Report is out, and what many of us have known firsthand for decades is now official: the worst drivers in America are from Massachusetts. The Bay State accounts for three of the bottom four cities in the rankings.
 If you’ve ever had to spend a reasonable amount of time in New England, this “finding” is the least surprising bit of information this side of the pope being Catholic. I mean, there’s a reason “Masshole” is part of the vernacular around here.

Global price-fixing crackdown threatens supply chain’s ‘business model

Maki Shiraki:

When a Japanese carmaker issued a tender for shock absorbers a few years ago for a model it planned to sell in Indonesia, two suppliers came back with bids that were “so obviously coordinated,” said an executive at the automaker.
 One supplier put in a slightly lower bid for front shock absorbers than its rival and a slightly higher bid for rear shocks, while its rival did the opposite. The intent was clear, recalled the carmaker’s former parts procurement chief for Indonesia who is now back in Japan and didn’t want to be named because of the sensitivity of the issue: they were dividing the contracts between them.
 A few weeks later, he came across the two rival suppliers’ chiefs playing golf together in Jakarta, and summoned them to his office for an explanation. The upshot: the automaker asked the parts suppliers to re-bid.

Tesla signs deal to set up 400 charging points in China


Tesla signed an agreement today with China United Network Communications Corp. to build 400 charging points in 120 Chinese cities at China Unicom outlets, Tesla spokeswoman Peggy Yang said today in a phone interview. The two companies will also build 20 supercharging stations that work as much as 16 times faster, she said.
 The automaker joins BMW in setting up public charging points in China to make it more convenient for owners of electric vehicles. The central government is considering providing as much as 100 billion yuan ($16 billion) to build charging facilities and spur demand for clean cars, according to two people familiar with the matter.

Millennial malarkey: The myth that a generation hates cars

Alex Taylor iii:

Nobody has been watching the maturing of the Millennials more closely than the auto manufacturers because of the widespread belief that these young people don’t like driving, don’t like cars, and won’t be buying many new ones. An oft-cited story in the Atlantic in 2012 headlined “Why Don’t Young Americans Buy Cars?” seemed to crystallize the debate. It quoted Jim Lentz, the top American at Toyota USA, as saying, “We have to face the growing reality that today young people don’t seem to be as interested in cars as previous generations. Many young people care more about buying the latest smart phone or gaming console than getting their driver’s license.”
 Fortune.com’s corporate sister Money.com (both are owned by Time Inc.), weighed in last month citing another two-year-old Atlantic article, bemoaning a falling-off of interest in Beach Boy car songs, and concluded: “The sad fact is that American car culture is dying a slow death.”

Non-driverless cars kill 1,240,000 humans per year

World Health Organization:

 Number of road traffic deaths
 Approximately 1.24 million deaths occurred on the world’s roads in 2010

Via Erik Brynjolfsson & Steven Sinofsky.

Hidden Obstacles for Google’s Self-Driving Cars

Lee Gomes:

Would you buy a self-driving car that couldn’t drive itself in 99 percent of the country? Or that knew nearly nothing about parking, couldn’t be taken out in snow or heavy rain, and would drive straight over a gaping pothole?
 If your answer is yes, then check out the Google Self-Driving Car, model year 2014.
 Of course, Google isn’t yet selling its now-famous robotic vehicle and has said that its technology will be thoroughly tested before it ever does. But the car clearly isn’t ready yet, as evidenced by the list of things it can’t currently do—volunteered by Chris Urmson, director of the Google car team.

California: Beyond Cars?

Tom Turrentine:

DespiteÑor because of California’s vaunted love affair with the automobile, the state could become a leader in the development of new, climate change”friendly transport. Electric cars, hybrid vehicles, plug-in electric hybrids, robotic cars, vehicles powered by natural gas or other fuels, car sharing, bike sharing, and the matching of unused vehicle space with potential passengers are just some of the ideas on the near horizon in the Golden State.

via Driving to the Future.

The Feds Stall Self-Driving Cars

L. Gordon Crovitz:

Uber needs help pushing back against taxi regulators. “Our opponent—the Big Taxi cartel—has used decades of political contributions and influence to restrict competition, reduce choice for consumers, and put a stranglehold on economic opportunity for its drivers,” CEO Travis Kalanick explained.

So Uber hired a “campaign manager”: David Plouffe, who ran Barack Obama’s campaign in 2008 and served as a senior presidential adviser. Too bad Mr. Plouffe didn’t discover the virtues of deregulation before leaving government.

The Obama administration’s standard reaction to technological innovation has been to block change via regulation: The Federal Aviation Administration bans commercial use of drones, the Food and Drug Administration restricts gene-testing suppliers such as 23andMe, and the Federal Communications Commission is considering massive regulation of the Internet in the name of “net neutrality.”

Federal regulators are also putting the brakes on self-driving cars, which are closely related to the Uber innovation—enabling riders to order a car service using their smartphone app. If fast-moving technology hadn’t collided with slow-moving regulators, this might have been the last summer you’d have to drive your own car.

Self-driving technology is reaching the limits of what U.S. regulators will allow. The 2014 Mercedes Benz S-Class sedan uses digital technology to be the first car most of the way to being self-driving. The S-Class combines active cruise control, automatic braking and lane-keeping technologies to offer what an industry analyst calls “70% autonomous driving.” The car steers, accelerates and brakes on its own in congested traffic up to 40 miles an hour. On the highway, it uses numerous cameras and radars to remain centered in its lane at a safe distance from the car ahead, up to 120 miles an hour.

India Slaps 14 Carmakers With $420 Million Antitrust Fine

Siddharth Philip:

India’s antitrust regulator fined 14 carmakers, including the local units of Honda Motor Co. (7267) and General Motors Co. (GM), a combined 25.4 billion rupees ($420 million) for stifling competition in the market for spare parts as the industry faces similar scrutiny in China.
 The fines were equivalent to 2 percent of the carmakers’ three-year average revenue in India, according to a Competition Commission of India order dated Aug. 25. The regulator also ordered the companies to provide spare parts and diagnostic tools to independent garages, and honor warranties on cars repaired by them after markups reached as high as 4,817 percent.
 “The car companies charged arbitrary and high prices for their spare parts” through their monopolistic control, the commission said in a statement. Car companies were also found to be “distorting fair competition” by using their dominant position to protect their market for repair services, it said.

Shared Automation – Up to 90% Reduction in Vehicles

Ken Pyle:

Removing up to 9 of every 10 cars from the road is the promise of sharing automated vehicles, according to University of Texas, Austin research from Dan Fagnant and Dr. Kara Kockelman. In the above interview, Fagnant, now an assistant professor of civil engineering at the University of Utah, discusses what he means by Shared Automated Vehicle (SAV). In their modeling, they found that private investors could achieve a return on investment of 43%, even with a $70,000 base price for the automated vehicle.
 Their research paper details their SAV model and discusses the implications of such a service in Austin, Texas. Fagnent and Kockelman looked at real-world streets, modeling things such as the routes, number of vehicles against parameters such wait time and vehicle miles traveled. One conclusion is that the SAV approach significantly reduces the amount of land required to support the automobile, freeing it up for other uses and offering the potential for more livable cities.

GM Turns to Employee Bike Share Program to Get Around Campus

Tim Higgins:

GM formed a partnership with closely held Zagster Inc. to provide 50 bikes for the 19,000 employees at its Warren tech center, which is made up of 61 buildings and 11 miles (18 kilometers) of road, Sharon Basel, a spokeswoman for the automaker, said in an e-mail. The bikes will be available at seven locations on the campus, and six more spots are under consideration, GM said.
 “Our ambition is to create a fully accessible biking campus at the tech center,” she said.

10 European tech startups driving change in the automotive industry

Charmaine Li:

Israeli company Mobileye – which develops driver-safety tech solutions and supplies technology for self-driving cars – was recently valued at about $8.4 billion after debuting on the New York Stock Exchange.
 It’s reportedly the largest US IPO by an Israeli company to date.
 With the big news, we thought it would be appropriate to put a spotlight on emerging automotive tech projects coming out of the European tech ecosystem (a good read about the opportunities in this particular category can be found here). Important note: we’ve decided to leave out startups that operate on the fringes of that category, including transportation and delivery technology companies. That’s for another day.

“What makes a car significant?” asks Jay Leno at Pebble Beach

Classic Car:

“We’re here today to see how to get more, older guys interested in the hobby.” Jay Leno’s opening line at the new Pebble Beach Classic Car Forum, presented by Credit Suisse, was predictably lighthearted… but Leno was making an important point.
 “Is a car significant because it is expensive, because it is culturally or socially important, or because it means something to you?”
 On this particular morning of the three-day forum in Monterey, the panel had assembled to discuss the tantalising subject of ‘What makes a car significant?’. Inside a white tent billowing in the coastal breeze and sequestering the audience beside an impossibly beautiful seascape framing the moors of Spanish Bay, the discussion was spirited yet focused, savvy yet accessible, and ultimately amusing for both the ‘novice’ and the experienced car guy or gal in attendance.

This is what Tesla owners are doing while you sleep

Barry Fischer and Ben Harack:

By day…electric vehicles are taking the world by storm: their sales are doubling every year, their fuel efficiency is off the charts, and some of them can even accelerate from 0-60 mph about as fast as you can say Elon Musk.

By night…the electric vehicle (EV) community continues to make waves. While you are in bed dreaming about how some day you too might own an electric car, many EV owners are doing something dramatic; something unusual; something that is reshaping the energy landscape.

They are using gobs of electricity.

Today we once again crack open Opower’s energy data storehouse (the world’s largest, spanning more than 50 million households worldwide) – this time to examine the energy usage behavior of an increasingly important segment of utility customers: electric car owners who charge their car in the wee hours of the night.

To fuel our analysis, we evaluated anonymous data from about 2,000 night-charging EV owners in the western US (see Methodology) — a region where Teslas, Nissan Leafs, and other plug-in electric cars abound.

The average U.S. auto loan term in the first quarter was a record 66 months

Nick Bunkley:

“There’s been a trend toward longer-term financing, but it’s been paired with low cost of credit and improving residual values,” GM spokesman Jim Cain said. “People are making very rational decisions to buy the vehicle they really want to buy and take advantage of historically low interest rates for as long as they can. We don’t see cause for alarm right now; in fact, we think the industry is very healthy.”

GM is offering 0 percent financing for 72 months on many 2014 Chevrolets as part of its Labor Day promotion and 0 percent for 84 months on most 2014 models in Canada. Ford, Nissan and Volkswagen also have 0-for-72 deals right now, and some dealers are using 84 months as the default term when calculating monthly payments in their advertisements. The average U.S. loan term in the first quarter was a record 66 months, according to Experian Automotive.

“Customers who are financing for these longer terms are well-qualified, meaning they get the benefits of a more affordable payment while enjoying the benefits of buying new,” Nissan spokesman Brian Brockman said. “These loans are good business for Nissan and do not present substantial risk for the company. We have also not seen a change in trade cycles as a result.”

Gregg Cullen, general manager of Ray Cullen Chevrolet-Buick-GMC in London, Ontario, said longer loans have been important since the recession in making payments affordable for customers, though it means those customers stay underwater longer and may delay their next purchase.

“I do get concerned when there isn’t 0 percent,” Cullen said. “Even 2.99 percent adds up. That’s thousands of dollars over the course of the loan. At that point people have to keep their cars longer because they’re in a deficit position.”

More: Length of car loans rises, helps fuel sales.

For Google’s Self-Driving Cars, It’s a Bumpy Trip

Alistair Barr:

Google Inc. GOOGL +0.02% caused a stir earlier this year when it unveiled a self-driving car without a steering wheel, or pedals for braking and accelerating.

But Google’s goal of an autonomous car is bumping up against new testing rules from California’s Department of Motor Vehicles.

The rules, which take effect on Sept. 16, require a driver to be able to take “immediate physical control” of a vehicle on public roads if needed. That means the car must have a steering wheel and brake and accelerator pedals, according to Bernard Soriano, the top official developing the rules for the state.

Google could test its fully autonomous prototype on private roads, or try to test the vehicle on public roads outside California.

But the company said it plans to comply with the California rule by building a small, temporary steering-wheel and pedal system that drivers can use during testing.

The 1990s vs. Now

Ed Wallace:

The Boston City Council on Wednesday voted to require colleges with a presence in Boston to provide a list of off-campus addresses where students are residing, in a step intended to fight chronic overcrowding and protect the health and safety of the thousands of students living in the city.
 The measure was approved three months after a Boston Globe Spotlight Team investigation, “Shadow Campus,” revealed that illegal, overcrowded apartments with hazardous conditions riddle the city’s university neighborhoods, including a large number in violation of a zoning rule that prohibits more than four full-time undergraduates from sharing a house or apartment.

How Many Miles Can You Drive on an Hour’s Wages? 100 Years in One Chart

Ed Dolan:

Back in the good old days, an hour’s wages wouldn’t get you very far. Your Model T only got about 17 miles per gallon from its 20 h.p., 2.9 liter engine. If you had a good job (making Model T’s, for example) you could expect to earn about 50 cents an hour, which would buy you just two gallons of gasoline. That comes out to just 34 MPHW.
 By 1935, with the Depression in full swing, wages were still pretty low and your 1935 Ford V-8 gave you even worse fuel economy than the Model T, but at least gasoline was cheaper. MPHW edged up to about 50.
 After WWII, wages started to climb, pushing MPHW over 100 by 1950. For the first time, you could actually earn money faster than you could burn through it on the highway.

Tata Motors reverses cheap car strategy

Takafumi Hatta:

“The idea of a BOP (bottom of the pyramid) business targeting low-income people was unfit for the auto industry,” said an official at one of Tata’s rivals.
  Tata made partial modifications to the Nano in January, including new colors, to target young city dwellers. But the new Nano has so far failed to attract many consumers.
 Making the market
 Meanwhile, Tata’s rivals from Japan, the U.S. and Europe have aggressively introduced new cars in India, taking customers away from the troubled Indian automaker.

Study sees US dealership throughput breaking records in 2014

Jamie Lareau:

For the third consecutive year, U.S. dealership throughput — the average number of vehicles sold per store — is expected to break records in 2014, a new study found.
 But the experts behind the study warn that a downturn is inevitable.
 The 2014 midyear Automotive Franchise Activity Report projects nationwide dealership throughput is heading to 904 vehicles, based on forecast vehicle sales of 16.2 million.
 That’s up from a throughput rate of 874 vehicles at the beginning of the year, based on a report released Thursday and produced by Urban Science, a dealership consulting and data concern in Detroit. The sales forecast is from consultants LMC Automotive.
 “We know that automobile sales patterns are cyclical. It’s vital to remember current sales levels are near the peak of this cycle and will drop before growing again,” John Frith, vice president of Urban Science, said in a statement. “Planning for the downturn will help dealers avoid financial problems in the future.”
 Frith said as dealerships near throughput of 1,000 units in the short term, automakers “may be tempted to add rooftops to alleviate some of the pressure.” He advised against doing so.

Asustek subsidiary and Toyota unveil smart car system

Want China Times:

“A car is no longer just a vehicle. It can also provide assistance for driving safely, real-time information and rich multimedia entertainment equipment,” Tsang said.
 Hotai said that after undergoing testing for more than one year, the new smart system is expected to be introduced in the Vios and Yaris models in the fourth quarter of the year as an optional extra.

Get ready to say goodbye to the traffic light

Bradley Berman:

The traffic light turned 100 years old this month. At the rate things are going, though, it seems unlikely to survive another century. It might not even make it past the next decade.
 The first electric traffic light, installed on Aug. 5, 1914, in Cleveland, was intended to bring some order to the chaos of mass-produced automobiles that were starting to flood the roadways. Now, a century later, these cars are on the cusp of driving themselves and communicating directly with one another.
 Together, those trends could force the venerable traffic light to evolve into a smarter form — or render it obsolete.
 Cars Texting Cars
 Experts like Christoph Stiller, a professor at Germany’s prestigious Karlsruhe Institute of Technology, expect smart, self-driving cars — aided by vehicle-based radar, laser sensors, and sonar and video systems — in five to seven years. Data shared between vehicles will make the roads much safer, which in turn presents something of an existential crisis for the traffic light, says Stiller, who has been working on autonomous car technology for more than 20 years.

Ten practical tips to fix the modern electric vehicle

Matt Saunders:

I like electric cars. They’re relaxing to drive, they’re cheap to run and they’re unexpectedly engaging to use.
 I write that having done several hundred miles in a couple of new EVs this last week, for reasons that will become apparent in the not-too-distant future.
 Mock if you will. To a lot of people EVs must seem a largely pointless irrelevance, and the slow sales traction they’ve generated so far only seems to confirm the limited appeal.
 Trouble is, unless they take off better now, they may never mature. As things stand, the critical mass of production volume needed to make the battery technology better is under serious threat of never materialising.

Google lobbies to test self-driving cars in Matrix-style virtual world

Mark Harris:

Google has built a “Matrix-style” digital simulation of the entire Californian road system in which it is testing its self-driving cars – and is lobbying the state’s regulators to certify them based on virtual rather than real driving.
 The extensive simulation – reminiscent of the virtual cities created for human captives in sci-fi blockbuster The Matrix – exists entirely inside computers at the company’s Mountain View location, and the cars have so far virtually “driven” more than 4 million miles inside it, facing challenges just like those in the real world, such as lane-weaving motorists, wobbly cyclists and unpredictable pedestrians.

Stanford Driving Software on sourceforge


Software Infrastructure for Stanford’s Autonomous Vehicles

Car Culture: Give dumb drivers a pass

Melissa Preddy:

One of summer’s greatest joys is the reduced volume of freeway traffic during morning and evening rush hours.
 With Labor Day looming, however, the congestion will amp up and for at least some of us, so will tempers. From exasperation to frustration to full-blown road rage, emotions run high behind the wheel. We’re territorial, we’re stressed out and we’re in no mood for dithering and delays.
 According to the 2014 AutoVantage “In the Driver’s Seat Road Rage Survey,” drivers actually report experiencing fewer unsafe motoring maneuvers compared to the responses in the roadside assistance firm’s 2009 survey on the same topic.
 Nationwide, respondents (regular commuters over age 21) said they’re seeing 6 percent less tailgating, 5 percent fewer red-light runners and 6 percent fewer rude lane changers than five years ago.
 Detroit, in fact, improved nine spots on the courtesy ranking, moving from the third worst to 12th worst — a “dramatic improvement” as AutoVantage noted.

Environmentalists, business on collision course for putting cars on European CO2 market


Environmental campaigners are bracing to take on big business over whether Europe should follow California’s lead and include road transport in the EU carbon market.
 Bringing transport – Europe’s biggest source of greenhouse gas emissions after the power sector – into the EU Emissions Trading System (ETS) could bring down the costs the car industry faces in meeting existing regulation as well as tackling the oversupply on the carbon market.
 Environmental campaigners, however, say such a move would undermine more-effective policies.
 The arguments are likely to flare later this year when the European Commission, the EU executive, is expected to make a policy statement on a new 2025 standard for CO2 emissions from cars and EU leaders set a 2030 goal for overall emission reductions.

Tata launches Nano car in Bangladesh market

Deccan Chronicle:

Dhaka: India’s automobile giant Tata Motors has launched its low budget Nano car in Bangladesh, two years after it announced plans to capture the market in the neighbouring country.
 “We are confident that the combination of a perfect product with best-in-the-country service and parts back up will firmly establish the Nano’s footprint in Bangladesh,” chairman of Tata’s sole distributor Tata Niloy Group, Matlub Ahmed, told the Nano’s launching ceremony last night. But the four seater 624 CC Tata Nano, known to be the world’s cheapest cars, will cost Taka 800,000 (USD1 = Taka 80) in Bangladesh.

Are diesel cars a good choice for Canadians?

Neil Vorano:

In 1989, the Volkswagen group debuted its first turbocharged direct injection (TDI) engine at the Frankfurt Motor Show under the hood of an Audi 100. It was revolutionary, with good power and good fuel economy at 5.6 litres/100 kilometres combined.
 You could say the engine was ahead of its time; nine years to be exact. Because almost a decade later, the European Union and the European Automobile Manufacturers Association would agree to lower CO2 emissions on its roads with tax exemptions that made diesel more cost-efficient than gasoline.

Car to Car Safety Communication


A driver moves along in traffic, the forward view blocked by a truck or a bend in the road.
 Suddenly, up ahead, someone slams on the brake. Tires screech.
 There is little time to react.
 Researchers here are working to add time to that equation. They envision a not-too-distant future in which vehicles are in constant, harmonious communication with one another and their surroundings, instantly warning drivers of unseen dangers.

Why China’s used car industry has a shiny new appeal

Neil Flynn:

Sales taxes are extremely high on foreign imported cars

Ads for used car dealers are more common in tier 1 cities

Bitauto is working with dealerships and auction houses

There has always been a stigma about buying second hand goods in China, such as cars or houses, because it’s seen as a sign that you can’t afford the brand new equivalent. Seemingly, showing people that you’re wealthy is more important than actually being wealthy, so much so that there are always several Ferraris and Bentleys parked outside my apartment on an evening, driven by 18-year-olds whose parents just want another way to show that they have money.

The problem is that the sales tax on foreign luxury goods is very high, so keeping up appearances is an expensive game. If we compare the prices of the BMW range in the UK and China, we see that the premium is very high.

Related: U.S. Targets Buyers of China-Bound Luxury Cars. Remarkable.

Alibaba to launch e-commerce platform for used cars.

The Connected Car, Part 3: No Shortcuts to Security

Jack Germain:

Target Rich Data
 Both consumer devices and the car’s user data need to be secured, but that requires cooperation among all of the industries.
 “We need to continue [working] on all of the regulatory issues involved. Much of the technology has to be embedded in the vehicles. We have to organize the Big Data involved in all of the follow-up,” cautioned Schilling.
 Being able to analyze what is happening with the vehicle and to the vehicle and in the vehicle is going to become critically important. Other factors involve issues around tethered and untethered, and embedded and unembedded hardware.

Toyota Remains Unchallenged Global Hybrid Leader

Wards Auto:

Japanese automakers report growth in global hybrid sales in the first six months of 2014 while Korean brands report mixed results. Hybrid deliveries between January and June, not counting Nissan and truck makers such as Hino, grew to more than 892,000 units, up more than 20% year-on-year. Leading the field again was Toyota, which sold 665,740 hybrids, 4.1% ahead of last year’s record pace. Toyota was followed by Honda, with global sales of 158,696 units, soaring 105.8%, and …

What happens when a Tesla fanboy meets the Mercedes-Benz electric car

Vivek Wadwha:

But this e-mail was from a stodgy old German car company, not from a brash kid in Silicon Valley. So I decided to take them up on their offer.
 My first reaction upon driving the car was that these people surely were smoking something if they thought I would trade in my Tesla for this four-door hatchback. It just didn’t have the acceleration or torque. It felt slow and small. But then I realized that wasn’t a fair comparison. They’re cars of different categories and prices. It wasn’t an either, or: this car was for a different market. The Mercedes public relations team had just been very creative in getting my attention.

We request that you unite with us in a joint commitment to safety between the automotive and cyber security industries.


An Open Letter to the Automotive Industry: Collaborating for Safety
 Dear Automotive CEOs,
 We request that you unite with us in a joint commitment to safety between the automotive and cyber security industries.
 A hallmark of the automotive industry is extraordinary innovation in the face of market needs. 50 years ago, basic automotive safety features were an afterthought. Since then, the auto industry has steadily driven advances in safety features, safety engineering, and supply chain management in ways that software and cyber security disciplines must emulate.
 Now the automotive industry faces a new challenge. Modern vehicles are computers on wheels and are increasingly connected and controlled by software and embedded devices. These new technologies enable innovations designed to increase vehicle safety and bring other positive features. Vehicle-to-vehicle communication, driverless cars, automated traffic flow, and remote control functions are just a few of the evolutions under active development.

Continental hires Google Autonomous Car Executive

Joseph Szczesny:

Continental, which supplies driver assistance technology, such as blind-spot detection, hired Seval Oz to be CEO of the new company. Oz previously served as Senior Business Development manager at Google, where she was integral in the development of the self-driving car.
 The move isn’t all that surprising. In recent years, several automakers, including such as Ford, Volkswagen, Honda, Renault/Nissan, and Toyota have set up research and development facilities in California. Suppliers following their customers is a long established pattern.

E-Bike Sales Are Surging in Europe

Danny Hakim:

With a faint electric whir, Iris Marossek pedals her bicycle through concrete apartment blocks in the heart of old East Berlin, delivering mail to 1,500 people a day.
 Painted yellow and black like a bumble bee, her bicycle is a nod to both past and future. It is decorated with an image of a curving black horn, harking back to earlier centuries when German postal workers trumpeted their arrival. But the twin battery packs under her seat also reveal it is more than the average bike.
 Ms. Marossek rides one of the 6,200 e-bikes in service for Deutsche Post, the German mail service. E-bikes use electric motors to make them easier to pedal and have been gaining popularity in bike-loving countries like Germany, appealing to older people, delivery businesses and commuters who don’t want to sweat.

Cognitive Dissonance about Driverless Cars

Joshua Bleiberg and Darrell M. West:

Driverless cars are coming sooner than you might think to a highway near you. California, Florida, and Michigan already allow driverless cars on the road for testing purposes and other states are considering more ambitious laws. But many are conflicted about this new advancement for the automobile. A new survey from Brandon Schoettle and Michael Sivak at the University of Michigan polled drivers in the United States, United Kingdom, and Australia on their opinions about driverless cars.
 Americans were optimistic about the potential benefits of traveling in a driverless car. The survey found people believed automated cars would reduce the number and severity of crashes, improve response times from emergency workers, reduce traffic congestion, lower vehicle emissions, and decrease auto insurance premiums. Despite the belief that driverless cars have numerous advantages, many still reported trepidation about the new technology. About two thirds of Americans were moderately concerned or very concerned about driving or riding in a vehicle with self-driving technology.

Why automakers will build more hydrogen fuel cell vehicles

Jeffrey Hirsch:

Hydrogen fuel cell vehicles could soon gain ground on electric cars in the race to develop zero-emission cars, according to a new report.
 The auto industry is seeing a convergence of factors that make fuel cell cars more viable, according to the Institute of Transportation Studies at University of California, Davis.
 Major automakers are pushing the technology. Hyundai began leasing its Tucson fuel cell crossover in Southern California earlier this year, targeting the handful of communities that have hydrogen fueling stations. Toyota and Honda plan to bring out their first mass-market fuel cell vehicles next year.
 UC Davis transit experts say the key to this rollout is building clusters of hydrogen stations in urban and regional markets.
 “We seem to be tantalizingly close to the beginning of a hydrogen transition,” said Joan Ogden, a UC Davis environmental science professor and director of Sustainable Transportation Energy Pathways. “The next three to four years will be critical for determining whether hydrogen vehicles are just a few years behind electric vehicles, rather than decades.”

Looking under the Hood of the Subprime Auto Lending Market

Andrew Haughwout, Donghoon Lee, Joelle W. Scally, and
 Wilbert van der Klaauw

Today, the New York Fed released the Quarterly Report on Household Debt and Credit for the second quarter of 2014. Aggregate debt was relatively flat in the second quarter as housing-related debt shrank, held down by sluggish mortgage originations. But non-housing debt balances increased across the board, with especially strong gains in auto loans. Auto loan balances, which include leases, have increased for thirteen straight quarters, and originations have not been this high since the third quarter of 2006. The Quarterly Report and the following analysis are based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data.
  Once again, news reports are pointing to a boom in subprime auto lending, and the concerns raised by such a boom and its associated risks have prompted a Justice Department investigation. Last year, amid similar stories, we published the post “Who Is Driving the Auto Lending Recovery?” which showed that 23 percent of auto loans were originated by borrowers with credit scores below 620. This share, though significant, is still lower than the 25 to 30 percent share seen during the years preceding the Great Recession. We’ve now revisited these statistics, and find again that the share has increased only slightly since 2010 (see our interactive charts).

How China Protects Its Auto Industry

Edward Niedermeyer:

Sales of passenger cars in China grew almost 10 percent last month from a year earlier despite broader concerns about a slowdown in both the overall automobile business and the Chinese economy as a whole.1 With auto sales in Brazil, India and Russia struggling to live up to the BRIC hype of a few years ago, the Chinese market remains the global auto industry’s best bet for sustained growth. One problem: the Chinese government. A wave of recent intervention suggests that the good times for the world’s automakers have increasingly come at the expense of China’s strategic auto-industry goals.

The Great American Road Trip

Ed Wallace:

Not long ago CNN/Money online featured a story detailing Six Great American Road Trips. The first was a 900-mile journey from Grand Forks, N. Dakota, to Kalispell, Montana, on U.S. Route 2. Others included the Blue Ridge Parkway through the Great Smoky Mountains, the Natchez Trace Parkway in Mississippi, and, of course, the Pacific Coast Highway from LA to San Francisco.
 Even so, although AAA issues press releases pre-holiday predictions about how many Americans will take to the roads, most everyone I’ve known prefers simply to jump on a flight to wherever they’re going and leave the driving to someone else. That’s too bad, because you don’t get the impact of the landscape, or meet your fellow Americans, from 35,000 feet.

An Epic Road Trip in an Electric Tuk Tuk

Benjamin Preston:

A few years ago, Naveen Rabelli, 33, an electrical engineer from Bangalore, India, had an idea while sitting in traffic surrounded by the ubiquitous and polluting three-wheel vehicles known colloquially as tuk tuks. Why not, he recalls thinking, make one that runs on solar-electric power?
 Then he had the idea to take a road trip with this creation, driving the tuk tuk from India to London, hoping his project will show people how a small team without many resources can undertake a long journey using clean energy.

Study: Young adults increasingly use smartphones to shop for cars

Michael Martinez:

Young people are increasingly buying cars on their smartphones, and have done extensive research before stepping onto dealer lots, a new study says.
 In its third-annual automotive buyer influence study released Tuesday, car-shopping website AutoTrader.com said 95 percent of those in their 20s and early 30s do their car shopping online — and 50 percent use their smartphones, up significantly from previous years. While researching, the would-be buyers visit third-party sites — like AutoTrader,TrueCaror Edmunds — 51 percent of the time, and are going to dealerships less and less.
 These new trends have prompted traditional dealerships and other car-buying websites to invest in mobile technology and hire new workers to keep up with the changing buying patterns.
 “Millennials are driving a lot of that change,” Isabelle Helms, AutoTrader’s vice president of research and market intelligence, said in an interview. “The declines and rises in trends are being led by this generation of car-shoppers.”

Cowin Auto plans to develop connected car with Xiaomi and Baidu

Want China Times:

New Chinese car brand Cowin Auto is looking to develop smart and connected passenger vehicles with smartphone maker Xiaomi and internet search giant Baidu, reports the Guangzhou-based 21st Century Business Herald.
 Cowin, which is scheduled for its official debut at the Chengdu Auto Show in September, is a spin-off company of Chery Automobile, a state-owned carmaker based in the city of Wuhu in northern China’s Anhui province.
 Chery owns 50% of Cowin, which was established last year when Chery founder and deputy managing director Lu Jianhui branched off with a team of 200 workers. The name Cowin was formerly a sub-brand under Chery that focused on making cheap vehicles for young drivers, but it is now developing new vehicles from scratch.
 Sources close to Cowin said that the company is in talks to co-invest in a connected car research lab with Xiaomi, one of China’s biggest private smartphone developers, and Baidu, the search engine giant known as “the Google of China.” The goal is to produce an affordable car that appeals to the electronics- and smartphone-obsessed 20-32 age group.

The Urban Political Economy and Ecology of Automobility: Driving Cities, Driving Inequality, Driving Politics

Edited by Alan Walks:

Just how resilient are our urban societies to social, energy, environmental and/or financial shocks, and how does this vary among cities and nations? Can our cities be made more sustainable, and can environmental, economic and social collapse be staved off through changes in urban form and travel behaviour? How might rising indebtedness and the recent series of financial crises be related to automobile dependence and patterns of urban automobile use? To what extent does the system and economy of automobility factor in the production of urban socio-spatial inequalities, and how might these inequalities in mobility be understood and measured? What can we learn from the politics of mobility and social movements within cities? What is the role of automobility, and auto-dependence, in differentiating groups, both within cities and rural areas, and among transnational migrants moving across international borders? These are just some of the questions this book addresses.

Here’s Why Stealing Cars Went Out of Fashion

Josh Barro:

Auto theft isn’t much of a problem anymore in New York City. In 1990, the city had 147,000 reported auto thefts, one for every 50 residents; last year, there were just 7,400, or one per 1,100. That’s a 96 percent drop in the rate of car theft.
 So, why did this happen? All crime has fallen, nationally and especially in New York. But there has also been a big shift in the economics of auto theft: Stealing cars is harder than it used to be, less lucrative and more likely to land you in jail. As such, people have found other things to do.
 The most important factor is a technological advance: engine immobilizer systems, adopted by manufacturers in the late 1990s and early 2000s. These make it essentially impossible to start a car without the ignition key, which contains a microchip uniquely programmed by the dealer to match the car.

Map: The most expensive state to be a car owner is … Wyoming?

Niraj Chokshi:

The burden of owning a car is greatest in Wyoming and smallest in Iowa, according to a review of insurance, gas and repair cost estimates by state.
 Car ownership costs a typical Wyoming driver $2,705 in repairs, gas and insurance, according to Bankrate.com, a personal finance publisher. In Iowa, that total cost is an estimated $1,942. On average, gas accounted for 45 percent of the overall cost of owning a car in each state, with auto insurance accounting for 39 percent. Repairs accounted for 16 percent on average.
 Bankrate calculated repair costs using data from CarMD.com, gas costs using data from GasBuddy.com and the Bureau of Transportation Statistics, and insurance costs using data from the National Association of Insurance Commissioners. Repair costs ranged from $270 in Vermont to $393 in New Jersey. Insurance costs ranged from $630 in Iowa to $1,277 in Louisiana. And gas costs ranged from $713 in New York to $1,588 in Wyoming.

Smartphone camera makers see next opportunity in cars

Hyunjoo Jin:

South Korean smartphone camera makers are tapping the surging yet more technologically demanding market for vehicle cameras to dull the impact of slowing growth in global handset sales.

High-end cars can carry as many as eight cameras to visually aid parking or trigger emergency brakes. That number could reach 12 when cameras replace side-view mirrors, according to Mcnex Co Ltd, a phone camera supplier of Samsung Electronics Co Ltd and Korea’s biggest car camera maker.

As the technology reaches mid- and lower-end cars, the market for vehicle cameras could grow seven-fold from 2011 to nearly $6.6 billion in 2018, said Techno Systems Research.

That amount can only rise with regulation such as compulsory rear cameras in the United States from 2018 to stop drivers backing into pedestrians. Also adding to demand will be the spread of camera-laden self-driving vehicles like those of Google Inc.

Consumer Reports’ Tesla Model S has more than its share of problems

Consumer Reports:

A revolutionary car from an innovative automaker, the Tesla Model S has garnered much attention for its accomplishments as a ground-breaking, 21st-century car. For its impressive performance in our tests, strong safety marks, and decent reliability so far, the Model S earned Consumer Reports’ recommendation. But over the last 15,743 miles, our test car has developed many minor problems that merit some reflection.
 Our car has now been driven at some length by many staff members, many of whom aren’t involved in car testing. Car nut or not, EV fan or not, everyone has raved about this car, impressed with its smoothness, effortless glide, and clever, elegant simplicity. In that time, it’s also displayed a few quirks—some unique to Tesla. For instance, we had a problem with the automatic-retracting door handles, which were occasionally reluctant to emerge from the coachwork so we could open the driver’s door. Tesla fixed that with an over-the-air programming update beamed to the car.

What Cars Did For a Today’s World, Data May Do For Tomorrow’s

Quentin Hardy:

New technology products head at us constantly. There’s the latest smartphone, the shiny new app, the hot social network, even the smarter thermostat.
 As great (or not) as all these may be, each thing is a small part of a much bigger process that’s rarely admired. They all belong inside a world-changing ecosystem of digital hardware and software, spreading into every area of our lives.
 Thinking about what is going on behind the scenes is easier if we consider the automobile, also known as “the machine that changed the world.” Cars succeeded through the widespread construction of highways and gas stations. Those things created a global supply chain of steel plants and refineries. Seemingly unrelated things, including suburbs, fast food and drive-time talk radio, arose in the success.
 Today’s dominant industrial ecosystem is relentlessly acquiring and processing digital information. It demands newer and better ways of collecting, shipping, and processing data, much the way cars needed better road building. And it’s spinning out its own unseen businesses.

Why It’s Cheaper to Lease a New Electric Car Than to Buy One Used

Jordan Golson:

The high price of electric cars is one of the issues holding them back from widespread adoption. But if you think you can get around paying the extra cash by picking up a used ride, think again. In many cases, buying someone’s old EV isn’t any cheaper than getting a new one.
 It comes down to the government’s preferred way of encouraging people to drive EVs: tax credits. The federal credit is $7,500. That’s a bottom-line credit, so if you’re not paying at least that much in federal taxes, you’re not getting the full benefit. (Various states offer different credits, or none at all.)
 That leads people to lease EVs instead. The financing company that buys the new car from the automaker gets the full tax credit, so it can pass those savings to the lessee in the form of lower monthly payments. That’s why you can get a new Nissan Leaf for $2,400 down and $199 a month for 36 months.

Honda’s global strategy? Go local.

Kelly Johnson:

When financial journalist Jeffrey Rothfeder set out to understand why globalization has failed, he got pulled into the story of Honda, a company that has thrived as a multinational. In more than 60 years in business, Honda has never lost money. Its profit margins are the highest in the industry and its factories among the most productive. Rothfeder talked with The Washington Post about “Driving Honda,” in which he explores the enduring culture established by company founder Soichiro Honda, a perfectionist who embraced mistakes as a way to learn and improve. He also goes inside Honda’s plant in Lincoln, Ala., a model of flexible manufacturing. The following was edited for length and clarity.

How did this book come about?

I didn’t think I’d be writing about Honda or even a specific company. What interested me more was the issue of why globalization is failing, because for two decades now it’s been the guiding principle that runs U.S. economic policy — that there is going to be free trade and we’ll lose the borders and there’s no difference between General Electric here and General Electric in China. And essentially globalization was going to lift all boats economically.

But it isn’t working out the way people had hoped. Most multinational companies do not make money in their globalized operations. Classically, General Electric will say that they make more than 50 percent of their revenue outside the U.S., but they are losing money in many parts of the world.

Why Honda?

Because it is one of the few multinational companies that has succeeded at globalization. Their profit margins are high in the auto industry. Almost everywhere they go — over 5 percent profit margins. In most markets, they consistently are in the top 10 of specific models that sell. They’ve never lost money. They’ve been profitable every year. And they’ve been around since 1949, 1950. And it’s a company that really does see the world as its market and thinks very hard about what it takes to be successful at that.

Everything it does — from corporate culture to its operational principles to the way it globalizes — was different from any other company I’ve ever looked at.

Commentary on why a driverless car won’t be in your driveway soon

Chris Murphy:

So you see this being used most likely on roads dedicated to driverless cars?
 Or lanes that are dedicated to it, so that all the cars are behaving nicely, playing nicely.
 Generally speaking, how does the technology work?
 These cars have radar and lidar sensing what’s around you and how close it is and what the terrain is. So it’s the vehicle sensing its surroundings and then, of course, it has a path. Somebody’s going to have to tell it where to go, just like GPS. And then from there, it has to know properties of the highway, turning restrictions, speed limits and things like that that are on databases.
 Would there be special infrastructural needs for driverless cars?
 If we ever want to implement something like this, we have to be careful and make sure that the striping on the roads is really in good shape because these things are going to depend on that. It will be sensing to stay in its lane, so it’s got to know where its lane is.
 Read more: http://host.madison.com/news/local/environment/q-a-uw-s-teresa-adams-on-why-a-driverless/article_d652cc50-87c7-5f5b-8f62-613c465bc562.html#ixzz39zc0r5pJ

‘Certifiable Trust’ Required To Take Autonomous Systems Past ‘Unmanned’


There are many technical and social barriers, objective and subjective, to autonomous systems, but “certifiable trust” has been identified as the biggest challenge. “When we certify avionics, we test every input, every path. When we certify pilots, we decide if they will probably do the right thing, but we do not test every response. It is more about behavior and probability.” For humans, interpersonal trust is based on “information, integrity, intelligence, interaction, intent and intuition,” says Allen, arguing this will be difficult to establish with a machine. “We will need new methods of verification and validation.”
 A recent NASA-commissioned National Research Council report on autonomy research for civil aviation highlighted a cross-cutting challenge to increasing autonomy in aircraft: how to ensure that adaptive systems enhance safety and efficiency. “How do we achieve trust in non-deterministic systems?” asks Yuri Gawdiak, of NASA’s aeronautics strategy, architecture and analysis office. To do so, he says, “Humans are tested every step of the way.”
 “Autonomy is growing with computing power and bringing a whole host of new issues,” says Mike Francis, chief of advanced programs at United Technologies Research Center. As machines begin to make decisions, it shows up the inadequacy of the current regulatory approach. “Certification has its roots about 110 years ago. It is based in physics and derives trust from science. It involves the testing of inputs and outputs and is a pass/fail mentality,” he says.

New systems amaze, but what about the joy of driving?

Richard Truett:

I often visit major suppliers to see what technologies they are working on. Recent visits to Visteon Corp. and Valeo North America threw me into a bit of a funk.
 They are working to create a cloud-based, always-connected information pod. Taking a back seat is the joy of driving.
 Yes, I know safety will be improved by sensor-laden cars able to “see” the road from all angles, communicate with other vehicles and apply the brakes to avoid accidents.
 I can see the value in a system that Valeo is creating that enables a vehicle to automatically park itself after depositing you at the entrance of a building. Valeo’s automated valet parking system is truly an amazing piece of work.
 At a Valeo press event in June, an early-development version of the parking system installed in a Range Rover Evoque showed great potential.

How Tesla-Toyota Project Led to Culture Clash by Opposites

Craig Trudell and Alan Ohnsman:

More fundamentally, the tie-up was marred by clashes between engineers, according to people with knowledge of the matter, and highlights how quickly marriages of convenience can turn sour in the auto industry. Toyota is now distancing itself from Tesla’s core electric vehicle market and embracing fuel cells, a technology Musk ridicules.
 ‘Many Complexities’
 “Just because two companies are successful doesn’t mean when they come together, they will succeed,” said Ashvin Chotai, managing director of Intelligence Automotive Asia. “When you’ve got somebody threatening the status quo in an industry and they try to cooperate with the biggest player, it’s bound to lead to so many complexities.”
 Representatives at Tesla and Toyota declined to comment on specific details of the RAV4 EV’s development.

EV Subsidies for those earning > $100k

Jerry Hirsch:

California wants 1.5 million zero-emission vehicles on the road by 2025 — more than 15 times the number now.
 So the state pays buyers $2,500 per car, on top of a $7,500 federal tax credit, to help speed development and promote widespread adoption.
 The effort has had mixed results. Sales of electric cars are up but remain well off the pace needed to meet state goals. And the generous subsidies are going largely to some of the state’s wealthiest residents.
 Nearly four-fifths of the state rebates went to households earning $100,000 or more, according to a state survey of buyers. Nearly half of those getting rebates for Tesla’s premium electric sedan earned at least $300,000.
 With the state’s incentive program constantly running out of funds — about 13,500 buyers are on a waiting list to get their rebate — state lawmakers are now looking to get more of that money into the hands of lower-income drivers.

Google Set to Kick-Start the Driverless Car Supply Chain

Bruce Gain:

Google has done a good job of associating itself with driverless cars and stirring the public’s imagination for what many say is the inevitable day when we can work, eat, and even sleep in our cars as they drive themselves. As it readies a prototype fleet of self-driven cars without steering wheels, gas pedals, or brakes, the search engine giant has demonstrated how its autonomous Toyota and Lexus cars using Google’s technology have successfully logged thousands of miles on California roads.
 Indeed, Google has already become a recognized brand in a car segment that has yet to see commercialization. However, its role in the market will probably be relegated to the less visible function as that of a software player as self-driven cars begin to see commercial launch by 2020.
 By funding the publicity campaign showing how driverless cars are viable and safe, Google is helping to create demand for software it will almost certainly look to license in the future. The company will likely seek to define driverless cars as it did the smartphone market with Android, by creating and licensing the OS on which autonomous car software and components are designed.

How men fell out of love with the car

Neil Lyndon:

Driverless cars might sound as boring and lacking in human interest as a ski-lift but there are two reasons to welcome the news that they are just around the corner.
 One: the subject of cars might again be allowed in mixed company and in the same breath as books, music, films, restaurants, sports, politics, houses, schools, travel – any of the topics in which men and women might both be equally interested.
 Two: by the same token, it might finally mark the end of Top Gear and the tedious, trying, belittling picture of masculinity communicated by that Cub camp carnival.

Seeking $30k taxpayer subsidies for Toyota’s Hydrogen Car

Hans Greimel:

Here, citizens are being asked to subsidize incentives up to about $30,000 per hydrogen fuel cell vehicle. The immediate beneficiary will be Toyota Motor Corp. The Japan Inc. flag bearer unveiled its $69,000 fuel cell vehicle in June, after dangling hints that the vehicle would need incentives of about $20,000 to make it a realistic option for individual buyers.
 In a matter of weeks, Japan’s national government answered the call with — you guessed it — plans for consumer rebates of about $20,000 for the futuristic zero-emission cars.
 Meanwhile, Aichi prefecture — home to Toyota City and its namesake employer, the world’s biggest automaker — plans to chip in about $10,000 more for local buyers.
 The combined incentives amount to more than 40 percent of Toyota’s proposed sticker, slashing the roughly ¥7 million price tag ($68,556) to ¥4 million ($39,175).
 Yet even that deep discount may be a stretch for customers who have to contend with an almost nonexistent refueling infrastructure once they buy into Toyota’s experiment. The government aims to have just 100 stations up and running by next March.
 Indeed, Toyota’s fuel cell car, dubbed the FCV, seems designed primarily to satisfy California’s zero-emission mandates. And the pressure exerted by one of Japan’s biggest employers to wheedle unprecedented sums of government largesse foreshadows a showdown over how incentives will be handled when the car hits the U.S. market next summer.

“In a market that has skyrocketed up 80% in five years, GM has essentially given back five points of market share”

Peter DeLorenzo:

But wait a minute – doesn’t GM arguably have the finest product lineup in its history? Yes, it does. As a matter of fact, I don’t think there’s ever been a time – even in GM’s much-vaunted heyday (roughly 1957 to 1977) – that the company has even come close to offering the quality product lineup with the kind of depth and breadth they have on the ground today. Given that then, things aren’t all that bad, right? Is it possible that I might be overstating my doom and gloom assessment of GM just a tad?
 Well, let’s take a look at the hard numbers.
 Out of the depths of The Great Recession, when the U.S. car market plunged to a seasonally-adjusted annualized selling rate (SAAR) of around 9 million vehicles back in 2009, to where we are today, which will probably end up at a rip-roaring 16.7 million vehicles (even accounting for Marchionne’s drunken sailor, scorched earth incentive spending orgy, it’s an impressive amount of cars), you would think that GM would have made considerable hay with the upturn in the market. After all, this has been one of the greatest – if not the greatest – five-year improvements in the history of the U.S. automobile business.
 And what has GM done with this grand opportunity, exactly? When GM succumbed to its humiliating dive into bankruptcy, the company’s retail market share was around 21 percent. Wait a minute – GM was at death’s door yet it still was taking almost one out of every four retail sales in the U.S. market? Yes indeed. It wasn’t the 48 percent juggernaut number that it once achieved back in its glory days, of course, but it was still considerable and noteworthy nonetheless.

How GM Can Build Cars Without Killing People

Edward Niedermeyer:

On Saturday, an explosion at a plant in Jiangsu province, China, that sold products to a General Motors Co. supplier killed at least 75 workers and injured another 185. Two days later, Bloomberg News reported on a study estimating that better interactions with suppliers could have increased GM’s operating profits by about $400 million last year. The coincidence of these two stories seems to defy the cost-cutting logic that has driven most auto-supply work to the “China Cost.” Is it possible that an automaker could have made more money and avoided an appalling tragedy simply by not focusing so much on lowering costs?
 The explosion, China’s most deadly industrial accident this year, occurred at a wheel-polishing workshop. An initial government investigation suggested that the plant didn’t have appropriate ventilation, fire-safety equipment or safety training. The factory apparently also had been previously warned about the potential for a dust explosion at the site. A senior Chinese official excoriated its management for a “dereliction of duty.”

Three wheels good for US car start-up Elio

Robert Wright:

It might seat only two people and resemble some of history’s most eccentric automotive experiments, but a three-wheel car capable of 86 miles to the gallon will be bought by thousands of Americans, according to a former auto parts executive.

Paul Elio says more than 25,000 people so far have paid a deposit to get one of the vehicles, which resemble the Messerschmitt Kabinenroller three-wheeler of the 1950s and 1960s. The first are due to be delivered to customers next year.

The vehicle – called the Elio and priced at just $6,800 – is intended to appeal in part to drivers who want a second vehicle alongside their large, fuel-inefficient one.

“People need those big vehicles for a reason,” Mr Elio says of the cars with which he hopes the Elio will share garage space. “They know they don’t need them all the time, but there’s no cost-effective solution. We make it make sense to own an Elio in addition to the rest of your fleet.”

However, Mr Elio – a former manager at Johnson Controls, an auto industry supplier – faces scepticism from many in the auto industry.

Michelle Krebs, an analyst at autotrader.com, says any auto industry start-up is likely to struggle to secure enough capital. “This is a business that just gobbles up money,” she says.

Regulating “Self Driving” Cars

Michael Martinez:

Connected and driverless vehicles may be the future, but local and federal agencies are still working out how to regulate safety and privacy concerns in high-tech cars and trucks.

Speaking at a panel on the first day of the Center for Automotive Research’s annual Management Briefing Seminars held near Traverse City, Nat Beuse, associate administrator of vehicle safety research at the National Highway Traffic Safety Administration, said the agency it trying to outline its vision for connected and automated vehicles.

That includes regulating everything from park-assist features to crash-warning systems.

“One of the fundamental things we have to address is how to test these systems to make sure they’re safe and reliable,” Beuse said. “There are some serious questions that need to be answered before we can say ‘Yeah, that’s a good idea.’”

He said NHTSA is working with manufacturers and will soon release a report outlining its latest thinking on performance metrics. After that, NHTSA will spell out how it will regulate driverless cars.

The University of Michigan is building a fake city for driverless cars


As the UK tries to figure out a way for driverless cars to legally and safely take to public roads, the University of Michigan has set come up with a handy, if costly, alternative. Instead of letting the cars loose on real roads, they’re building a replica city as a testing facility.
 The “city” is currently being constructed at the engineering department’s Mobility Transformation Facility, and will cover 32 acres. (That’s around 0.05 square miles, so it’s not exactly New New York). According to the project’s website, it’ll include merge lanes, traffic lights, roundabouts, a railroad crossing, and “eventually even a mechanical pedestrian”. Here’s a diagram:

Toyota’s net income surpassed the combined earnings of General Motors, Ford Motor Co., Nissan Motor Co. and Honda Motor Co.


“They sell an awful lot of high-end SUVs,” Mark Yockey, a New York-based managing director at Artisan Partners, said before the company released results. “There’s a waiting line to buy Highlanders in the U.S., and those sell at much higher margins than if you’re just selling Corollas.”
 Toyota’s net income also led the industry for the quarter. Its profit was about 30 percent higher than Volkswagen’s 3.19 billion euros ($4.4 billion), and surpassed the combined earnings of General Motors, Ford Motor Co., Nissan Motor Co. and Honda Motor Co.
 The full-year sales target for Asia excluding Japan was trimmed to 1.58 million vehicles from 1.63 million, while Europe was nudged up to 860,000 from 850,000. Japan was left unchanged at 2.21 million. The first sales-tax increase in 17 years in Japan in April dented demand for new cars in the company’s home market and Toyota’s April-June domestic sales dropped 10 percent year-on-year to 319,460 vehicles.

Watch This Wireless Hack Pop a Car’s Locks in Minutes

Andy Greenberg:

As part of a talk on the insecurity of wireless devices at the Black Hat security conference later this week, Cesare plans to reveal a technique that could allow anyone to spoof the signal from a wireless key fob and unlock a car with no physical trace, using a codebreaking attack that takes as little as a few minutes to perform. “I can use this to lock, unlock, open the trunk,” says Cesare, an Australian researcher for the security firm Qualys. “It effectively defeats the security of the keyless entry.”
 For now, Cesare’s hack requires off-the-shelf tools that cost just over $1,000, and in some cases may require the attacker to remain within wireless range of the car for as long as two hours. He’s also only tested it on his own car, which is ten years old.
 But the radio equipment Cesare used in his research and proof-of-concept attack is rapidly getting cheaper, potentially inviting less friendly hackers to refine his technique and seek out similar wireless vulnerabilities. Cesare’s method was straightforward enough that he suspects some variant of it would likely work on other automobiles, too—at least of the same era. Carmakers, he points out, tend to use commercially available key fob technology that might be common among many makes and models. Manufacturers of the devices include the companies Amtel and TRW, for instance.

U.S. subpoenas GM Financial over subprime auto loans

David Shephardson & Melissa Burden:

Washington —The Justice Department subpoenaed the lending unit of General Motors Co. as part of a review to determine if banks were misled into buying some auto loans, the Detroit automaker said Monday.
 General Motors Financial Co. Inc. said in a securities filing it was served with a subpoena July 28 asking for documents related to the company’s and affiliates’ subprime auto loan originations and securitizations since 2007.
 Auto lenders — including GM Financial — package loans by creditworthiness and sell them to banks and other investors in a process called “securitization.” The practice is used to assure that auto lenders that are lending billions of dollars have access to enough capital to lend large amounts of money at a relatively low price.
 The filing said documents were demanded by the Justice Department which is looking at potential violations of the Financial Institutions Reform, Recovery and Enforcement Act of 1989. The investigation could lead to a civil suit.
 In particular, the subpoena requested information about the underwriting criteria used to originate the auto loans and “the representations and warranties relating to those underwriting criteria that were made in connection with the securitization of the automobile loan contracts.”
 Susan Sheffield, GM Financial executive vice president and treasurer, said in an email, “Our understanding is that the request is focused on the subprime auto finance space in general. There are no allegations set forth in the subpoena and GMF is cooperating with the request.”