Category: Auto News Today

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Bob Brockman’s competency to stand trial for tax fraud now in judge’s hands

Medical experts retained by prosecutors and defense lawyers generally agreed that Brockman likely has Parkinson’s disease. But the experts diverged on whether Brockman’s cognitive abilities are mildly impaired or have progressed to dementia.

Three prosecution experts testified that Brockman is exaggerating his symptoms, and two of them have said they believe he is competent to stand trial. Experts retained by Brockman’s lawyers, however, said they believe his impairment extends to his memory, mental processing speed, problem-solving and judgment skills and that he would struggle to understand the complex nature of the case.

A Department of Justice spokeswoman said the department generally does not comment on pending matters. Brockman’s lawyers did not respond to messages seeking comment.

Brockman, 80, was indicted in October 2020 on 39 counts, including tax evasion, wire fraud, money laundering and evidence tampering. He has pleaded not guilty and stepped down from his role as chairman and CEO of dealership management system giant Reynolds in November 2020.

Prosecutors pointed to Brockman’s continuation at the helm of Reynolds — and his seemingly strong performance during two civil depositions in 2019 answering technical business questions and recalling past events — as incongruent with a time period in which his symptoms of cognitive impairment were reported to have appeared. They contend Brockman had both the motivation and the capacity to malinger, or feign symptoms, to avoid prosecution.

Current Reynolds CEO Tommy Barras, who testified that Brockman chose him to be his successor, and former Reynolds CFO Craig Moss testified during the hearing that Brockman remained involved in important company decisions and they had no reason to doubt his cognitive abilities.

Dr. Christopher Whitlow of Wake Forest School of Medicine, a neuroradiologist retained by the defense, testified that images of Brockman’s brain, including MRI and PET scans, show a pattern that raises concerns about dementia. Whitlow testified that brain scans also show Brockman has lost brain volume, raising concerns about potential loss of cognitive function.

A second defense medical expert, Dr. Thomas Guilmette of Providence College in Rhode Island, testified that Brockman’s deposition performance two years ago could not be replicated today and that Brockman likely was able to draw on deep, retained knowledge of the topics at issue even if he was experiencing dementia at the time.

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Why more EV brands might not be good business for China automakers

SHANGHAI – While selling electric vehicles under their existing brands, major Chinese carmakers have launched a plethora of new EV marques since last year to fend off competition from Tesla and domestic EV startups. 

A similar brand explosion took place 10 years ago, underscoring how such a tactic could backfire as a brand needs to be nurtured over time rather than built in a haste.

At the Guangzhou auto show last month, Changan Automobile Co. unveiled its EV brand Avatr.

Prior to Changan, four other major state-owned automakers also created new brands for EVs. 

At the Shanghai auto show in April, SAIC Motor Corp. launched IM, the company’s second EV brand following the R marque introduced last year. 

Also last year, BAIC Motor Co., Dongfeng Motor Group and GAC Motor Co. each debuted an EV brand, known as Arcfox, Voyah and Vion, respectively.

Like SAIC, two leading private Chinese carmakers – Great Wall Motor Co. and Geely Automobile Holdings — have unveiled their second EV brands this year. 

At the Guangzhou show, Great Wall launched the Salon. The company’s first EV brand, Ora, was created in 2018.

And in April, Geely revealed the Zeekr, two years after the roll-out of the Geometry.

With initial products featuring rich infotainment functions and advanced driver assistance systems, these new marques are all marketed as premium EV brands, and their owners expect to build presence in the domestic market for smart EVs, dominated by Tesla and startups such as Xpeng, Nio and Li Auto.

SAIC is another example. The state-owned company now markets EVs under its Roewe and MG mass-market brands. This year, it has launched sales of EVs under R, labeled as a premium brand. Next year, the first product — a midsized sedan — is due to arrive in the market under its high-end brand IM.

Can the new brands really help build new business? 

For one thing, traditional Chinese automakers have long been producers of battery-powered vehicles converted from gasoline models. Hence, it takes time for their new marques to win customer recognition as premium EV brands.

Secondly, a multi-brand strategy would stretch thin the engineering and financial resources allocated for each brand at a company, which in turn would affect product quality.

In fact, this is not the first time Chinese carmakers have applied the multi-brand strategy. 

In 2009, Geely and Chery Automobile Co. — a state-owned light-vehicle manufacturer — each created three brands for their gasoline vehicles in an attempt to move upscale in the domestic car market.

Two years later, both companies started to phase out the new brands after product quality problems multiplied to drag down their sales. 

Haste makes waste. That lesson seems to have been forgotten at traditional Chinese carmakers today when it comes to exploring the domestic EV market.

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Why auto executives are optimistic about long-term profits

Most auto executives are optimistic about the industry’s long-term profitability and the adoption of electric vehicles, even as they remain concerned about short-term problems such as the tight labor market and microchip shortage, a new survey of industry leaders found.

According to KPMG‘s 2021 Global Automotive Executive Survey, 53 percent of respondents said they were extremely or somewhat confident that the industry would achieve more profitable growth over the next five years, compared with 38 percent who said they were concerned. KPMG surveyed 1,118 executives around the world in August, ranging from CEOs to department heads at automakers, suppliers, startups and other companies.

“With all of the massive changes expected to happen in our industry, there is this sense of dynamism in the industry that I feel like is there now,” said Gary Silberg, global head of automotive at KPMG International.

Executives in the U.S. and China appeared to be the most optimistic about profitability moving forward, the data showed. Silberg attributed the optimism among American executives to the growth of EV and mobility startups around the country and investments in those areas by traditional automakers.

“You see a big delta in the views of the world around optimism and profitability when you get into Europe, India and elsewhere,” he said.

Semiconductor, trade concerns

The profit optimism comes even as executives signal major concerns about various issues in the short term. The vast majority of executives said they were concerned about supply continuity for semiconductors and commodities such as steel and aluminum, as well as rare earth elements, lithium and other components needed for batteries.

At the same time, 57 percent of executives said they expected the cost and complexity of tariffs, trade rules and regulations to significantly or somewhat increase over the next five years, compared with just 17 percent who expect them to decrease.

“There is definitely concern on the supply chain moving forward,” Silberg said. “That was the dichotomy for the industry: long-term optimism but near-term concern.”

As the industry navigates the semiconductor shortage and the COVID-19 pandemic, 82 percent of executives said they believed their companies were at least moderately prepared for the industry’s next major crisis, compared with 15 percent who said they were slightly prepared or 3 percent who were not at all prepared. American executives again signaled more optimism than the rest of the world, with KPMG saying there was a 58-point disparity between those who said they were prepared and those who said they were not.

EV adoption

As the industry prepares to roll out dozens of electric vehicles in the coming years and as governments implement EV mandates and targets, auto executives on average say they expect the EV market to take off worldwide over the next decade.

On average, executives said they expected 52 percent of all new vehicles sold in the U.S., China and Japan to be electric by 2030. Western European EV sales are expected to make up 48 percent of the market by then, compared with 41 percent of sales in Brazil and 39 percent in India.

Still, Silberg said views from executives on how big of a share of the market EVs will gain varied wildly, with answers ranging anywhere from 5 percent to 90 percent.

“It’s all over the board,” Silberg said. EV market share will be “up, but there is no consensus on what it might end up being.”

Most executives (77 percent) said they believed EVs could achieve “widespread adoption” within 10 years even without “government intervention,” though 91 percent said consumer subsidies for EVs were helpful.

Still, they pinpointed a potential roadblock in EV adoption: charging times. According to the survey, 77 percent of executives think consumers will be willing to wait only 30 minutes or less for a charge of 80 percent or better.

Achieving that would require the installation of more DC fast-charging stations, Silberg said. Fewer than 20 percent of EV chargers in the U.S. today are fast charging, according to KPMG, and they can cost as much $100,000 to install.

Direct-to-consumer sales
Industry leaders expect automotive retail to continue evolving. The survey found 78 percent of executives think the majority of new-vehicle purchases worldwide will be completed online by 2030.

At the same time, 46 percent of executives think 60 percent or more of all new-vehicle sales will be by automakers directly to consumers in their home markets by 2030. Another 28 percent think between 40 and 59 percent of sales will be direct to consumer, and just 3 percent of executives think fewer than 1 in 5 sales will be direct.

About 74 percent of executives said they think a “seamless and hassle-free” experience will be very or extremely important to consumers looking to purchase a vehicle in the next five years, outpacing factors such as driving performance (71 percent) and brand or image (64 percent).

“There’s a sense, globally and not just in the U.S., that if you go to the dealer, people are fed up with that experience,” Silberg said. “You see it in this data. Those that can give a seamless, great experience are going to win in the marketplace.”

KPMG said one-third of the survey’s respondents were CEOs, presidents or chairmen, while 29 percent were C-level executives. The rest was made up of the heads and managers of business units and department heads. About three out of four respondents were from China, the U.S. or Europe, with companies ranging from less than $100 million in annual revenue to more than $10 billion.

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Volvo CEO Hakan Samuelsson is confident of hitting higher profit margins

Q: What is your outlook for the rest of 2021 and 2022?

A: That is a difficult question because of the semiconductor shortage. We had good momentum, then coronavirus outbreaks in the Far East closed down some of our component suppliers, including those providing semiconductors. As a result, we lost production of about 50,000 vehicles.

We offset this by really reducing our stock levels; therefore, the actual registrations loss was about 30,000 compared with last year. But now the dealer stock is very low because they have sold out everything they have. The fourth quarter definitely looks like it will be better, so the loss in production will be lower, but any losses will result in lost retail sales.

Overall, things will be better in the final quarter of 2021, but they still will not be back to normal. By the first quarter of next year, we should be back on track with only minor disruption from the chip shortage. It’s too early to say what that will mean for the full-year results in 2022.

Will you still be able to set a global sales record in 2021 by topping the 705,452 vehicles Volvo sold in 2019?

It’s within reach, but it depends on how the production problems in the Far East develop. We are close, so maybe we will celebrate a new all-time high. It’s not impossible.

What about the target of 800,000 sales? Will this goal get pushed to 2022 or 2023?

Absolutely. We thought we were more or less on our way to get there because after the first half of this year, when we added up the previous 12 months of actual figures (June 2020 until June 2021), we were at about 775,000.

At that point you could almost round up to 800,000. But since then, we have dropped back because we lost so much production in the third quarter.

What are the indicators that show the chip crisis is coming to an end?

We see it in the confirmed deliveries from suppliers. After having big cuts in the third quarter, better volumes of components are coming in. As a result, we will have to close our factories and halt production less often in the fourth quarter.

How much is the pandemic still impacting business?

When it comes to the day-to-day basis, here in Sweden, we are back to normal. You don’t see anybody wearing masks, not even when you’re traveling within the country on an airplane. Most people are back in their offices.

The big problem we have when it comes to conducting business is traveling to the U.S. and China. China is still very isolated. We haven’t been there in almost two years.

We are planning to go to the U.S. in the coming months. While we have gotten much better at remote meetings, sometimes you really want to meet people face-to-face.

What effect is it having on how Volvo retails vehicles?

We are shifting to online sales, direct sales and electrification, and you can’t get people to make the transition by simply writing an email and asking them to get things implemented by Monday.

This is slowing us down as we try to get everybody to understand the objectives and execute the changes. How much of an impact this has is unknown. But we probably would be further along if we didn’t have the restrictions.

I have been really frustrated that we cannot speak with our retailers face-to-face in many places because of the restrictions.

Volvo wants half of all global sales to be done online by 2025. Where do things stand now?

We are at 5 to 10 percent in the markets where we offer this. Germany is close to 10 percent and the U.S. is at about 5 percent. We also offer online sales in Holland, Sweden and Norway. On top of that, all of our full-electric cars will only be sold online. Right now, they account for 3 to 4 percent of our sales. (Volvo’s goal is for 50 percent of all global sales to be full electric by 2025.) We will have a big step increase in EV capacity next year when we have a full year of sales of the C40.

One of your long-term goals at Volvo was to have an operating margin of 8 to 10 percent. In the first half, helped by better pricing, the margin was 9.4 percent. How sustainable is that level of profitability?

When it comes to this year, we will be back to pre-coronavirus levels, which is a margin of about 5 to 6 percent, like we had in 2019 (when the full-year margin was 5.2 percent). From there, we will move forward. By mid-decade it should be at 8 to 10 percent, so we need to be around 3 percentage points better.

How will you do that, especially when the shift to full-electric vehicles will initially add cost?

We need to offset that cost by developing cars more affordably, which includes using common architectures within the Geely Group and also by simplifying the car. This will happen because with EVs, we will no longer need things such as fuel tanks and engines.

The goal is that by mid-decade, the cost to produce an electric car will match the cost of making a mild hybrid today.

But that does not give us any profitability improvement. That is why it’s crucial to find a more efficient way to distribute and sell cars. That’s an area where we can really be better. This will include transparent, consistent pricing so we avoid internal competition and discounting. We also want a simpler product offering, which will allow us to better manage our stock and reduce capital costs. All of that should improve profitability.

Does listing the company in public trading help boost your profitability?

Very indirectly. When you have to explain your strategy to investors you get sharper. Those smart questions that came up during the listing process were very helpful. Also, being forced to report where you are on a quarterly basis is a bit unpleasant when you have bad results, but it is an opportunity to explain what you are going to do to be better in the future. The scrutiny is good.

In addition, the listing makes the company a bit more attractive as we try to build up our expertise in, for instance, the software area. People often like working for a listed company where they have the possibility to purchase shares and be enrolled in a stock-based bonus program.

Volvo has aggressively moved into plug-in hybrids, but now the transition to full electrification has accelerated, especially in Europe. If you could do it over again, would you put more emphasis on battery-electric vehicles and less on plug-in hybrids?

Only if we would have known five years ago that the charging network would be sufficient as of today. That has not happened. Therefore, plug-in hybrids were a necessary intermediate step.

I think long term there will be very few plug-in hybrids, but that will only happen when we have a large enough charging infrastructure.

On the plus side, about 40 percent of our sales in Europe are plug-in hybrids. That’s a step toward electrification. All of those customers are closer to moving into a full-electric car than if they had purchased another diesel. Therefore, we made the right decision.

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Don’t expect a ‘moonshot’ on EV battery technology

Britishvolt’s LeCain sees EV batteries improving in the same way that the internal combustion engine improved over more than a century: incrementally. He said he believes there are plenty of gains to be made in making lithium ion batteries better. The company is working on technology that reduces the weight and size of the pack.

“Right now we’re trying to take parts out, going from cell to chassis, using hard-cased prismatic cells that bear some of the weight and structure of the vehicle,” LeCain said.

Britishvolt’s first cells for the auto industry will be lithium ion, but the company is also investing in solid-state batteries. And unlike many other battery companies, its leadership team includes two auto industry veterans, both of whom have extensive powertrain backgrounds:

  • Joe Bakaj, former Ford of Europe vice president of product development. He is Britishvolt’s vice chairman.
  • Graham Hoare, former chairman of Ford of Britain. He is the battery-maker’s president of global operations.

Although global automakers and battery companies are investing billions over the next nine years toward cell development, it’s not clear whether a battery will ever hold as much energy as a gallon of gasoline or be as convenient to use.

A Chevrolet Silverado pickup, for example, has a 24-gallon fuel tank that can be refilled at most stations in about three minutes. Driven on the highway, the truck will get 21 mpg and travel around 504 miles before it needs more fuel. A full fuel tank in the Silverado weighs 146.4 pounds.

To get a driving range of 300 or more miles, the battery pack in electric vehicles has to be very large. A Tesla Model 3 with the long-range battery pack contains 4,410 cells and weighs more than 1,200 pounds; the EPA-estimated range is 358 miles. Even a compact Chevrolet Bolt’s battery pack, with its range of 259 miles, weighs around 960 pounds.

And then there’s the matter of charging times. For the roughly 80 percent of EV drivers who charge at home and don’t exceed their vehicle’s range, those long waits aren’t usually a problem. But for those who need to use public chargers, wait times can be long, anywhere from 15 minutes to an hour, once plugged in, to get reasonable range.

“Were combustion cars viable in 1950? Absolutely. People got to and from work every day. Are they better today than they were in 1950? Absolutely,” said Renna. “You’ve had billions of R&D dollars and engineers working on making them better every day. Using that analogy, I think electric cars are viable today, and solid-state batteries have the potential to make them more viable in the future.”

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Tritium sees boom in U.S. demand for its fast chargers since announcing plans to go public

Why is liquid cooling important for chargers?

It allows for a fully sealed enclosure. For everyone else, you’re sucking air in across filters and pushing it out the back. That’s how you’re cooling the power electronics, which get hot. For us, you’re not pulling any particulates into the charger.

The liquid cooling works its way around the enclosure and keeps it at the right temperature, and that lasts for five years before you need to replace the coolant. If you look at one of our chargers, you’ll see there’s a grille down the bottom, which may look like an air-intake vent. That doesn’t take any air into the top of the charger.

The heat moves into the base of the machine via the coolant and allows you to push the warm air out through that vent while the electronics are fully sealed in the top. It matters a lot where it’s corrosive or dusty or highly polluted. And it also matters where you have things climbing into chargers to nest inside.

We know competitors have issues with mice, rats, geckos, ants, all manner of things. You can imagine why a technology like this might have developed in a country where we have every creepy-crawly known to man, including snakes and spiders. They all are looking for somewhere warm and dry to nest. The sealed enclosure improves uptime (the share of hours when the chargers are working), which is critical. Liquid cooling enables that because you’re not pulling things across the insides of the charger; you’re not getting outages.

There are few things worse for an EV owner than to roll up to a broken charger, especially if there are not options nearby.

That hits the nail on the head. At the gas pump, if there is an outage, it has a sheath over it that says “out of order,” so you know not to queue there. But charging is an entirely different experience. We’ll go into PlugShare.com and read about the user experience and watch some of the YouTube videos that people post as they cross [the] country. They might have to move the car three times. A charger is out. They move it again, plug in, and it doesn’t work. It’s just a horrible experience. One thing that we really discourage our customers from doing is having only one charger at a key site.

What’s finally brought the EV industry to this tipping point?

In every country where the uptake of EVs is high, government has driven it. That’s very clear across the globe. It doesn’t have to be subsidies, but what it does take is an indicator from the government that they’re going to support the technology, that the change is coming and that next time you buy a car, you should buy an EV. People are waiting to hear that.

What you’re seeing with President Biden now is the kind of indicator that you need. It’s the government saying, “This is what’s coming.” That allows people to go out with confidence and buy an EV. The other thing is that several of the car manufacturers decided to go in, boots and all, and make the shift to EVs. So there’s no longer a choice for government to say, “We’re not shifting to EVs, we’re going to stick with internal combustion engine, or we’re going to do hydrogen,” because unless you make the cars yourself, you are not going have enough models.

Tritium seems like a relatively mature business for a SPAC. Why go that route?

It is one of the more mature. The SPAC vehicles are often for more speculative technology. Tritium had been around for quite some time and had been slowly building up revenue.

The company had been very tightly held by three large Australian industrial families, with one institutional investor.

And at the end of 2019, you could really see the market starting to pick up, and they recognized that they were going to need to capitalize in order to compete globally. So they had a very wide look across the market at trade sale options at the option to list. That was exactly as the SPAC market was starting to kick off. I remember the directors, and there’s a number of them who are older gentlemen, were saying, “What’s a SPAC?” But they were very quick to realize this is a phenomenal way of getting to market quickly and to access a material amount of capital, which the company was going to need to scale.