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Archive for February, 2014

Feds Launch Probe of GM Recall

Maker admits response to ignition switch defect was not "robust" enough.

by on Feb.27, 2014

The old Chevrolet Cobalt was one of a variety of GM models covered by the now-expanded recall.

U.S. safety regulators have begun a probe into General Motors’ response to a safety defect that caused 13 deaths, a series of recalls the automaker now admits wasn’t “robust” enough.

The National Highway Traffic Safety Administration has been advised by the maker that it actually knew of the problem for as much as a decade but only this month ordered a recall of nearly 800,000 cars – more than doubling that figure with a second recall announced this week. Should GM be found to have broken federal regulations, the maker could face a fine of up to $35 million. But it is also facing legal action related to crashes caused by the defect.

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NHTSA says it wants “to determine whether GM properly followed the legal processes and requirements for reporting recalls.” Federal regulations give a manufacturer only a short window to respond once it learned of a potential safety defect.  The chronology of events the maker provided this week suggests that may not have happened, having first learned of the problem in 2004. The maker learned of the first fatal crash by 2007.

“The chronology shows that the process employed to examine this phenomenon was not as robust as it should have been,” GM North America President Alan Batey acknowledged in an unusually candid statement. “Today’s GM is committed to doing business differently and better.”

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Tesla’s $5B Gigafactory at Full Tilt by 2020

by on Feb.26, 2014

Tesla's announced four states are finalists for the company's proposed gigafactory.

After teasing with a few small details last week, Tesla revealed more details on its proposed gigafactory that will provide lithium-ion batteries for its electric vehicles – and others? – for $30% less than what they cost now.

“The Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide in 2013,” the company declared in a blog post this afternoon.

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The plant is expected to cost between $4 billion and $5 billion, with Tesla kicking in $2 billion, the company said. Once running at full capacity in 2020, the plant is expected to produce more than 500,000 batteries, matching Tesla’s expected output of 500,000 vehicles. (more…)

How High is Up for Tesla Stock as it Hits Near-Daily Records?

Maker betting on excited market with new $1.6 billion note offering.

by on Feb.26, 2014

Tesla's stock price closed at an all-time high of $253 per share as the maker rolled out a $1.6 convertible note offering.

A year ago, its stock nudging just over $30 a share and earnings just beginning to move into the black, there were some vociferous debates over the potential value of investing in upstart battery-carmaker Tesla Motors. As Wall Street has clearly demonstrated this past week, the “ayes” have it.

Tesla is counting on those “ayes” to line up and plunk even more money down on the company as it rolled out a $1.6 billion convertible note offering this afternoon. There are actually two sets of notes being rolled out: an $800 million set maturing in 2019 and another $800 million set due in 2021.

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“Tesla intends to use the net proceeds from the offering to accelerate the growth of its business in the U.S. and internationally, for the development and production of its ‘Gen III’ mass market vehicle, the development of the Tesla Gigafactory and other general corporate purposes,” the company said in a statement. (more…)

GMC Denali Becomes a Major Brand in its Own Right

With little marketing, sales – and profits – soar.

by on Feb.26, 2014

The newest member of the family: the 2015 GMC Yukon Denali is just rolling into showrooms.

With its distinctive grille, hand-stitched interior details and such high-tech features as a magnetically controlled suspension system, the newly redesigned 2015 Yukon Denali offers buyers a way to step up from the more conventional version of GMC’s full-size Yukon sport-utility vehicle.

For parent General Motors, meanwhile, the Denali offers a way to make even more substantial profits in a market segment it overwhelmingly dominates.

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The GMC brand has been one of the surprise success stories for GM. It’s now the tenth-largest U.S. automotive brand, and saw sales surge by 9% last year. But the real success story is GMC’s brand-within-a-brand, Denali, which last year gained grew by roughly 20%, and which has more than doubled in volume since just 2010. (more…)

The Consumer Reports List To Avoid: Worst Vehicles

Magazine chronicles problem vehicles in all categories.

by on Feb.26, 2014

Taurus adds Torque Vectoring Control, which uses smart brake control to help the car smoothly accelerate through curves, which helps build confidence for drivers.

Consumer Reports cited the Ford Taurus as car to avoid due to reliability issues and a lack of interior space.

Annually, potential car buyers, industry observers and executives await Consumer Reports’ top picks for the year. What the list shows is there are plenty of great cars and trucks to choose from; however, the magazine doesn’t stop there.

While it doesn’t take long for everyone to figure out the mag thinks that Tesla’s Model S is the best car – maybe ever – and that the Dodge Ram is pushing to make the full-size pickup race a three-truck competition, there is a side of the industry that tends to get pushed by the wayside.

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The pub also creates a list of vehicles to avoid. Some on the list are not a shock, such as the Mitsubishi Lancer, but others are a bit of a surprise, including the Land Rover Evoque. (more…)

Mini Offers Sneak Peek at Clubman Concept

When is a Mini not so mini?

by on Feb.26, 2014

The Mini Clubman Concept grows 10 inches longer.

Mini isn’t wasting time rolling out new variants based on the all-new platform developed for its third-generation Hardtop.  Showgoers will get an idea of what it has in mind when the British maker pulls the cover off the new Mini Clubman Concept at the Geneva Motor Show next week.

Expected to give a good indication of what to expect when the next-generation Clubman goes into production, the Concept is longer, wider and a good bit more up-market in appearance than the current five door – six, if you count the split barn doors at the rear as two.

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“The Mini Clubman Concept shows how the Mini Clubman could be taken a step further: more interior space, a greater sense of high-end quality and yet still clever, bold and distinctive. In short: more car, more Mini,” said Adrian van Hooydonk, Head of BMW Group Design, explaining the approach to this model.

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Tesla Megafactory Deal Could Slash Costs for Batteries

EV maker reportedly planning $1 bil US factory with Japan’s Panasonic.

by on Feb.26, 2014

Lower cost, higher-power batteries could make vehicles like the Tesla Model S a lot more competitive.

Tesla CEO Elon Musk is expected to announce plans for a new “gigafactory” later this week, and reports out of Japan indicate the project will involve a $1 billion joint venture with electronic giant Panasonic to set up a lithium-ion battery manufacturing plant in the United States.

The two partners are expected to seek the involvement – and investment – of additional partners, according to Japan’s Nikkei. Among the key goals of the program will be a sharp reduction in the cost of the advanced batteries needed to power vehicles like the Tesla Model S.

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The reports have generated some skepticism, and neither Panasonic nor Tesla are directly discussing the reports – or the megafactory announcement the California-based automaker is expected to make on Thursday. Contacted by the AFP news service, a Panasonic official would only say the company is “studying every possible way to strengthen ties with Tesla.”

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Honda Set to Kill Off Insight Hybrid

Maker shifting focus to new generation of hybrids.

by on Feb.26, 2014

Honda CEO Takeo Fukui (l) was one of those celebrating the introduction of the latest Insight hybrid.

It appears Honda finally is ready to end production of its dedicated Insight hybrid-electric vehicle as the Japanese automaker moves to address some long-festering problems.

News reports from Japan indicate Honda executives have finally pulled the plug on the latest version of the Insight, the successor to Honda’s first hybrid model originally introduced in 1999.

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The likely demise of the Insight has been the subject of rumors for months and appears to reflect Honda’s inability to generate much consumer interest in the model which was once seen as the maker’s answer to the Toyota Prius.  Toyota’s hybrid was the best -selling vehicle in California last year and dominated sales charts in Japan, as well, while the Insight was never in the hunt.

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GM Expands Ignition Switch Recall – and Offers Apology

Recall expands to total of 1.4 mil vehicles – and 13 fatalities.

by on Feb.25, 2014

The 2004 Saturn Ion Coupe is now added to the list of vehicles being recalled by GM.

Under mounting pressure, General Motors has significantly expanded a recall involving defective ignition switches — now linked to 31 crashes and at least 13 fatalities – affecting a total of nearly 1.4 million vehicles in the U.S. alone.

The maker also issued an apology for the problem which critics say it has long known about and failed to respond to in a timely manner.

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“Ensuring our customers’ safety is our first order of business,” said GM North America President Alan Batey. “We are deeply sorry and we are working to address this issue as quickly as we can.”

The maker first announced plans to recall nearly 800,000 older compact models about two weeks ago.  At the time, GM officials said it knew of 22 separate accidents and six fatalities connected to the problem.

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Luxury, Japanese Brands Top Consumer Reports’ Top Vehicles List

Lexus named top brand but Tesla Model S is called Best Overall vehicle.

by on Feb.25, 2014

CR puts Chrysler on its Top Pick list for the first time in 16 years with the Ram 1500 pickup.

Luxury and Japanese brands dominate as Consumer Reports lists its top vehicle list for 2014 – but there were a few models among the influential magazine’s picks, including the first Chrysler to make the grade in 16 years.

But domestic brands Ford and Chrysler took some hits in the annual list of top picks, Ford and Cadillac hammered for problems with their glitch-plagued infotainment systems. Caddy dropped six spots in the 2014 rankings, landing in the bottom five, the worst of any General Motors brand.

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On the other hand, Toyota’s high-line Lexus brand was the top pick this year – repeating its performance in 2013.  It was followed by Honda’s upscale Acura and German luxury maker Audi.  But a relative newcomer to the industry showed up its more established rivals, the Tesla Model S being named Best Overall vehicle.  Consumer Reports editors cited the battery-electric sedan’s “exceptional performance,” as well as its “many impressive technological innovations.”

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