India Crypto Exchange

Best Bitcoin Trading Platform

Tag Archive : electric cars

Volvo Car India sees growth returning next year on EV launch, localisation plans

MUMBAI: The Indian arm of Swedish luxury carmaker Volvo is optimistic about returning to growth next year on the back of its plans to locally assemble its entire product range and entry in the fast growing EV space, a top company official said.

Volvo Car India said its sales volume improved in August as against July, and it expects a good festive season.

The company currently sells sport utility vehicles (SUVs) XC40, XC60 and XC90, cross country V90, S90 sedan and plug-in hybrid XC 90 in India.

Of these, XC60, XC90 and S90 are assembled at its Hosakote facility near Bengaluru in Karnataka, while rest of the models are imported as CBUs (completely built units).

Volvo Car has also already announced its plans to introduce its first fully electric vehicle (EV), a subcompact SUV in the Indian market next year.

“The year 2021 is going to be a return to good growth for us. We will return to good growth where we see getting back at least to 2019 levels and perhaps farther,” Volvo Car India Managing Director Charles Frump told PTI.

“There will be some pent-up demand and we will be coming with some fantastic products,” he added.

The time after outbreak of COVID-19 pandemic has been “hard” and “extremely difficult” for the entire automobile industry, Frump said, adding Volvo has taken a number of initiatives in view of the current business environment and changing buying pattern of customers.

It was for the first time in the history that in May nobody sold a single car. It’s been tough, but things now have started to improve with the situation (sales) returning to more and more (pre-Covid) level in August compared to July, Frump said.

“We are now hoping that the festive season could be very good for us in the short-term,” he said.

Frump said the performance of Volvo Group as a whole is improving.

Volvo posted strong global sales in July, with volumes up 14.2 per cent compared with the same period last year, but its sales volume in India declined almost 35 per cent in the month year-on-year.

While the pandemic situation around the world is improving, India remains quite affected by it, he said, adding that Indian people and market, however, are extremely resilient.

“I am now extremely confident that Volvo will be strong, all our product plans are in place, specially around our electrified future in India. We still have a strong dedication to electrification as well as bringing in the safest and best products and technology to India. And our localisation plans will continue,” he said.

Frump said Volvo had to make “pretty dramatic” changes in its interaction with customers to keep them safe considering the social distancing norms in the prevailing situation.

The first and foremost of these has been the introduction of contactless and hassle-free sales programme, and a lot of customers availed this facility.

“Now the customers are starting to come back to the dealerships,” he said.

Volvo Car currently has 25 dealerships across cities, including Ahmedabad, Bengaluru, Chandigarh, Chennai, Coimbatore, Delhi, Gurugram, Hyderabad, Kochi, Kolkata, Lucknow, Ludhiana, Mumbai, Pune, Raipur, Surat and Vijayawada, among others.

As part of the localisation plan, all Volvo cars which are currently imported as CBU units will be brought as CKD (completely knocked down) units from next year, which will also see the launch of Volvo‘s first fully electric car in India, Frump said.

Pitching for lower taxation and import duty on luxury vehicles, he said the move will help in segment expansion which, in turn, would lead to more revenue to the government.

“Certainly taxation remains a headwind for us. The luxury car segment in India is quite small compared to other countries. There is a larger possibility of revenue if there is a larger share of the luxury segment in the sales,” Frump said.

Developing EV infrastructure in India will take time: Honda

Mumbai: Resolution of challenges related to range and cost of electric vehicles, the establishment of supporting infrastructure like charging and battery swapping stations and the subsequent adoption of the technology by the populace in India will take time, said Japanese auto major Honda.

While the company will continue investment in its EV program for India, it will wait for the infrastructure to be developed in the country before marketing its electric two-wheelers, Noriaki Abe, managing officer at Honda Motor Company told ET along the sidelines of EICMA 2019 in Milan. Honda has conducted a feasibility study for electric scooters in its global portfolio for the Indian market, sources had confirmed to ET earlier.

As a technology, EVs have existed for more than 15 years, Abe argued, but it is difficult to make them popular among the people in the absence of a supporting ecosystem.

“We have to talk with government how they are preparing the infrastructure for the right electric vehicle. Even in Japan, we are still talking with government,” he said. “We need infrastructure. If not, (then) people don’t want to buy (EVs).”

Abe’s comments come barely a month after Bajaj Auto showcased its Chetak electric scooter which the company plans to start selling as soon as early next year. Chennai-based TVS Motor Company plans to launch EVs by the end of this fiscal, ET had reported earlier. Hero MotoCorp too has set the ball rolling for its EV strategy with its investment in Bengaluru-based electric two-wheeler maker Ather Energy.

The Japanese company’s local two-wheeler unit, Honda Motorcycle and Scooter India, is the second-largest maker of two-wheelers in the domestic market. During the ongoing fiscal, its sales have been impacted to the tune of 18% due to the falling demand in the country.

The company has revised its sales target for FY20 to 6 million units, a target which it had set for itself in FY18 too. “Just a small revision for this year because India’s economy (is) in slow down,” Abe said. It may take up to three years for demand to recover, he further said.

The company produced 5.9 million units across its four plants in India in FY19, of which 5.5 million were sold in the domestic market while the rest was exported.

(The correspondent was in Milan at the invitation of Honda Motorcycle and Scooter India)

EESL plans to issue tender for e-luxury cars in January

NEW DELHI: State-run Energy Efficiency Services Ltd (EESL) is set to float a tender for procurement of electric luxury cars, possibly in the range of Rs 25 lakh each, which it plans to lease out to cab aggregators like Ola and Uber, people aware of development said.

“EESL may go for a small procurement of 200 cars, to be used in the shared-mobility segment,” said a source aware of the development.

“Proposals have been sent to Ola and Uber for leasing out 50 cars to each aggregator, while purely electric ride-hailing service Blu Smart has also evinced interest for such cars,” the person added.

Both Ola and Uber declined comment on the development. The tender is likely to be floated in January 2020, around the time when foreign automakers such as BMW are expected to launch their electric cars in India. Currently, Hyundai’s Kona is the only car present in the premium electric car segment.

China’s MG Motor is likely to launch its electric SUV MG ZS EV next month.

Blu Smart promoter Anmol Singh Jaggi told ET that it has a requirement of around 100 luxury SUVs, which it wants to deploy in its existing fleet of over 500 electric sedans it procured from EESL. “EESL is also expected to generate demand for these cars from central ministries and PSUs,” said a second source.

“EESL is also expected to generate demand for these cars from central ministries and PSUs,” said a second source.

While the tender specifications have not been finalised yet, EESL is likely to make it more conducive for a larger set of players.

EESL’s first tender for procurement of 10,000 electric sedans launched amid much fanfare, did not garner a similar response from central and state governments and the company procured only 3,000 sedans.

View: What carmakers need to tell you about their electric plans

How is it that auto companies spend so much money and there is such vague disclosure on where it’s going? Or how their ambitious projects are progressing? Investors should be pushing accounting standards boards and companies to give them more.

With the onset of electric cars and autonomous vehicles, companies are increasing their focus on technology and technical know-how over the traditional nuts and bolts of putting vehicles together. But it’s hard to see this in their financial statements.

These firms splash out on research and development budgets — they are some of the biggest spenders in the corporate world. But there are few details about how this money is being allocated as it finds a home in intangible assets, or other undetermined line items. Several other associated costs like information technology and employee training get buried.

Part of the problem is, investors aren’t asking for more — and they could be a potent force. Instead, they turn elsewhere for alternative information. For instance, on Thursdays they crowd up the U.S. Patent Office website to see what companies have been up to over the last 18 months. What’s registered for any number of technologies, the scope of inventions and how far firms have progressed, gives a sense that real work is being done. Such details around technological attributes will “alleviate investors’ information uncertainty surrounding R&D activities,” a December draft study on patent disclosures by New York University’s Deepak Hegde finds.

In the U.S. and elsewhere, companies sometimes provide numbers they don’t necessarily have to disclose but that may give investors something more to work with, like adjusted earnings before interest and taxes, or free cash flow. Sifting through management discussion and analysis can also give some clues.

None of it is really scientific — it’s mostly an art.

In the past, companies operating in industries where technology is changing swiftly and there is obvious value-creation through intangibles have been pressured to disclose more. In “The End of Accounting and the Path Forward for Investors and Managers,” Baruch Lev, a professor at New York University, and co-author Feng Gu trace this. A review of pharmaceutical giant Pfizer Inc’s annual 10-K filings showed that in the 1990s the firm said a lot less about its product pipeline than it did by the end of the decade. But what motivated this, the authors write, was demand from investors and analysts for more relevant information by asking more detailed questions on earnings calls. This wasn’t an effort to diminish the firm’s “credit for enhanced transparency.” Now, extensive disclosure is the norm in the pharma and biotech sectors.

In the auto industry, despite the enormous pronouncements over the last few years, no-one’s asking the hard questions. Earnings calls are still peppered with inquiries about targets and aspirations, and broad electrification strategies. But analysts seem content with vague answers.

In General Motors Co. fourth quarter earnings call in February, an analyst asked “I’m just trying to understand strategically, over the next 10 years, 15 years, is GM ready to shrink or is GM going to be aggressive?” In response, chief executive officer Mary T. Barra said, “I think we’re going to be aggressive because I think we’ve got the technology, we’ve got the talent, we have the manufacturing capability.”

There’s a growing sense of complacency around these large, old-school firms. With auto companies’ financial statements, investors now tend to ignore topline information like earnings and margins. Instead they turn to cash flows. As Arndt Ellinghorst, an analyst covering the sector from Sanford Bernstein points out, there are “factual differences in accounted costs” across companies. “Cash earnings are very different from P&L [profit and loss] earnings.”

Varying capitalization, and depreciation and amortization schedules “have created multi-billion distortions between companies’ cash and accounting earnings.” The latter, he says, tends to create the “illusion of profits.”

This needs to drive more open investor dissatisfaction. Vague statements and numbers shouldn’t be okay.

Stellantis NV, for instance, formed out of the merger of Fiat Chrysler Automobiles NV and PSA Group, said in its 2020 full year financial filing, released in March, that a part of the cost of revenues “contribute to regulatory compliance” but “are not separately quantifiable” because they’re elements within broader initiatives relating to powertrain upgrades and alternatives.

Meanwhile, details on asset write-downs tend to be unspecific. They could relate to money poured into previous, unsuccessful efforts on technology, for instance. That’s surprising for the incumbent automakers that tend to have the highest average after tax write-downs and new entrants that are even higher on a per asset basis, according to data compiled by New Constructs LLC.

More broadly, dealing with research and development costs in financial statements has been an area of research for decades. Over time, how firms manage these line items has evolved too. However, the root of the issue still holds: There isn’t much disclosure, uniformity or a way to value future benefits.

As the auto industry undergoes a structural change, giving everyone more information to work with could help. For instance, the electrification overhaul means there will be large costs around recalls as the trial and error process continues. And that’s okay. However, stakeholders should be able to see how far the impact goes beyond just a lump-sum cost, provisions or a backward-looking impact to net income.

Disclosure may be the best way to faster electrification.

Emmanuel Macron announces 30-billion-euro plan to re-industrialise France

President Emmanuel Macron on Tuesday announced a plan worth 30 billion euros ($35 billion) to re-industrialise France on the basis of innovative and green-friendly technologies including electric cars, hydrogen fuel and efficient nuclear plants.

Six months before a presidential election and one month ahead of a UN climate summit, Macron said France had taken key decisions “15-20 years later than some of our European neighbours” and now needed “to become a nation of innovation and research again”.

The spending was to address “a kind of growth deficit” for France brought on by insufficient investment in the past, he told an audience of company leaders and university students at the Elysee Palace.

France, he said, needed to return to “a virtuous cycle” which consisted of “innovating, producing and exporting and in that way finance our social model” as part of a new “France 2030” plan.

Over the next decade, France would aim to become a global leader in green hydrogen, which companies and governments are increasingly putting at the centre of efforts to de-carbonise economic sectors that rely most on fossil fuels for their energy needs.

France would get two electrolysis giga-factories for hydrogen production, as part of eight billion euros of investment in the energy sector.

He said that following the Covid-19 pandemic, “which put us face to face with our vulnerabilities”, France had to work towards French and European productive autonomy.

France also needed to invest heavily in medical research, Macron said.

After the global Covid-19 outbreak, French pharma giants were unable to come up with a vaccine, unlike biotech startups BioNTech and Moderna.

The aim was now for France to develop “at least 20” biotech drugs against cancers, as well as against emerging and chronic illnesses, including those associated with ageing, Macron said.

“We need to concentrate all our efforts on this objective,” he said.

A French presidential official, who asked not to be named, said Macron had laid out the plan in the wake of the coronavirus crisis “which showed our vulnerability and our dependence on foreign countries in some key sectors but also the importance of innovation which can change everything.”

French officials believe that France needs to act rapidly to close the gap and not surrender more ground to emerging powers, notably China.

French carmakers, which Macron said had suffered “cruelly” over the past 30 years, should redirect their efforts towards cleaner vehicles, with a target of putting two million electric or hybrid cars on the roads.

France would also invest “massively” to get the first low-carbon aircraft into the air with the help of European partners, he said.

Macron said France would also spend one billion euros by 2030 in “disruptive innovation” to produce atomic power, notably by designing compact nuclear reactors known as “small modular reactors” (SMRs) with improved nuclear waste management.

Disruptive innovation was also needed in agriculture, where two billion euros would be earmarked for new technologies, he said, especially in robotics.

France should start “a new revolution” in food production which should be “healthy, sustainable and traceable”.

Agriculture would become cleaner, phase out “some pesticides”, enjoy greater productivity and develop “bio-solutions” that would be “more resilient and more solid”, the president said.

Close to six billion euros were meanwhile earmarked for France’s electronics sector with the aim of doubling production and “secure” the country’s supply needs for microchips.

Opposition figures were quick to criticise Macron for the timing of the announcement, with Marine Le Pen, his far-right challenger in the April 2022 presidential election, saying he was “making promises that his successor has to keep”.

Leftist candidate Jean-Luc Melenchon called the speech “Macronian propaganda”, while NGO Greenpeace meanwhile accused Macron of subscribing to a logic that “always delays any real transition and continues to produce as if the planet’s resources were infinite”.