GM says it is making ‘rapid progress’ on self-driving cars

In the rapidly developing battle among automakers and tech companies over who will be the first to deploy self-driving cars for everyday use by the public, General Motors is sending a message: Its subsidiary Cruise Automation is quickly learning what it takes to put autonomous-drive vehicles on the road.

“We are making rapid progress toward taking the driver out of the car,” said Kyle Vogt, CEO and founder of Cruise Automation.

Vogt held a 15-minute conference call with reporters Tuesday, just a day after an article said GM’s competitor Waymo will launch a self-driving ride-sharing service this fall.

Waymo has been testing its autonomous-drive technology in a number of places around the U.S., but according to the article in The Information, the Google subsidiary will limit the capabilities of its ride-share service and offer it only in a suburb of Phoenix.

While GM has not yet said when Cruise Automation will deploy autonomous-drive vehicles for the public to use, Vogt said his company’s driverless cars will be ready for complex traffic conditions found in urban areas. Mainly because Cruise Automation has logged millions of miles testing its cars in San Francisco.

“Driving in San Francisco is almost nothing like driving in the suburbs, or other places where self-driving cars are tested,” said Vogt.

To back up his point, Vogt said autonomous drive cars in urban areas have to pass double-parked vehicles 24.3 times more often than those tested in a suburb.

In addition, Cruise Automation vehicles interact with emergency vehicles (police, fire, ambulances, etc.) 47 times more often in the city than on suburban streets.

When asked point blank if he was saying Cruise Automation’s testing of cars on city streets was superior to Waymo’s test drives on suburban streets, Vogt simply said: “I’m saying there’s almost no comparison between driving in an urban environment and driving in a suburban one.”

Shares of General Motors have surged to a post-IPO high following upgrades and bullish remarks by several analysts, including Deutsche Bank.

In a note upgrading GM, analyst Rod Lache wrote, “GM’s AV’s will be ready for commercial deployment, without human drivers, much sooner than widely expected (within quarters, not years).”

Fully driverless cars could be months away

Real driverless cars could come to the Phoenix area this year, according to a Monday report from The Information’s Amir Efrati. Two anonymous sources have told Efrati that Google’s self-driving car unit, Waymo, is preparing to launch “a commercial ride-sharing service powered by self-driving vehicles with no human ‘safety’ drivers as soon as this fall.”

Obviously, there’s no guarantee that Waymo will hit this ambitious target. But it’s a sign that Waymo believes its technology is very close to being ready for commercial use. And it suggests that Waymo is likely to introduce a fully driverless car network in 2018 if it doesn’t do so in the remaining months of 2017.

Waymo plans to launch first in the Phoenix suburbs

Efrati reports that Waymo CEO John Krafcik faces pressure from his boss, Google co-founder and Alphabet CEO Larry Page, to transform Waymo’s impressive self-driving technology into a shipping product. Page had been pushing for a launch by the end of 2016. But a major deal with Ford to produce the necessary vehicles fell through, forcing Waymo to scramble and sign a smaller deal with Fiat Chrysler to supply minivans.

According to Efrati, Waymo’s service is likely to launch first in Chandler, a Phoenix suburb where Waymo has done extensive testing. Waymo chose the Phoenix area for its favorable weather, its wide, well-maintained streets, and the relative lack of pedestrians. Another important factor was the legal climate. Arizona has some of the nation’s most permissive laws regarding self-driving vehicles.

“Arizona’s oversight group has met just twice in the last year, and found no reason to suggest any new rules or restrictions on autonomous vehicles, so long as they follow traffic laws,” the Arizona Republic reported in June. “The group found no need to suggest legislation to help the deployment.”

According to the Arizona Republic, a 2015 executive order from Gov. Doug Ducey “allows universities to test vehicles with no driver on board so long as a licensed driver has responsibility for the cars and can take control remotely if the vehicle needs assistance.”

Waymo is getting ready to take the same approach. The company has built a real-time command center that allows self-driving cars to “phone home” and consult human operators about the best way to deal with situations it finds confusing. The ability to remotely monitor vehicles and give timely feedback on tricky situations will be essential if Waymo hopes to eliminate the human driver from its cars.

Cars aren’t quite ready for prime time

Yet there are still some kinks to work out. “When Waymo tested in Phoenix earlier this year, drivers sometimes had to take over the wheel to prevent the cars from holding up traffic because it took too long for humans in the command center to answer the cars’ requests for help,” Efrati writes. Avoiding these kinds of problems is going to require Waymo to hire and train a lot of human operators. Managing large numbers of ordinary workers has never been one of Google’s strong suits.

Waymo’s cars have had persistent problems navigating left turns, according to Efrati, especially when there’s no left-hand turn arrow to control oncoming traffic. Waymo cars struggle to navigate cul-de-sacs. Large mall parking lots also pose a challenge, since these private properties might not be well represented in Waymo’s 3-D maps.

Other challenges facing Waymo have little to do with the company’s technology. For example, Waymo was scheduled to deploy 100 Fiat Chrysler minivans in early 2017, with 500 more coming later in the year. However, Efrati reported last month that only 50 of the cars were in use. A variety of “technical issues” have prevented Waymo from using more than half of the initial 100-vehicle order, while the second batch of 500 vehicles has been held up by a “June recall by Chrysler related to a small electronic part in all of its Pacifica vans.”

These are all reasons to doubt whether Waymo will be able to launch a truly driverless taxi service this year as Page would like. However, it’s important not to lose sight of the big picture: these are the kinds of problems you worry about when you are months, rather than years, away from launching a commercial product.

Most of Waymo’s rivals are aiming to release self-driving cars in 2020, 2021, or later. Even if Waymo’s schedule slips a few months and it introduces a self-driving car service in the middle of 2018 instead of late 2017, that will still give the company a multiple-year head start over most of its rivals. And it would confound skeptics who insist that full self-driving technology is still years away.

Forza Motorsport 7 Is the Best Console Racing Game We’ve Played

My first experience with racing games came via the alien-looking three-pronged controller of a Nintendo 64. My dad and I would play Mario Kart 64, and I’d tease him when he’d slip on bananas and bump into the wall. Fast forward a good number of years, and I’ve just handed Dad the controller for Forza Motorsport 7. He’s still bumping walls, in this case because he braked too late, overwhelmed the front tires on a Porsche 911 GT2 RS, and crashed hard enough to void the new production-car king of the ’Ring of both its side mirrors—plus its rear wing. Welcome to racing games in 2017.

High-Horsepower Stunner

FM7 running on Xbox One and Xbox One S is without doubt the best-looking game we’ve ever laid eyes on. The intricacies, detail, and (eventual) imperfections of the on-screen vehicles capture the glamour and grit of motorsports as no title has done before. Flecks of tire rubber accumulated on the front splitter of our car throughout a night race at Daytona. After five laps of the new Dubai Circuit of the Emirates, a 1945 Jeep Willys MB we chose for the task ended up with a near photorealistic layer of desert sand on its windshield, including portions that stayed put just outside the arc of its wiper blade. Playing from the cockpit view of a Corvette C7.R during an hour-long endurance race at Spa, we ignored FM7’s updated—and excellent—on-screen overlays, instead choosing to rely on the C7.R’s dash-mounted shift lights and console-displayed rearview camera. It’s that immersive, and it’s that detailed.

Speaking of visuals, there’s been some question as to whether you can play this game in 4K. You can do so on November 7 by picking up the shiny new Xbox One X that launches on that date, or you can experience Forza in 4K right now—if you happen to fall within a very small subset of players who own a Windows 10 PC fitted with an Nvidia GTX 1080, a top-shelf graphics processing unit, with a 4K display to go with it. But the GTX 1080 retails for $550, more than an Xbox One S and a new race wheel combined, so while Forza Motorsport 7 can run in 4K at launch, few players will see what visuals this game is fully capable of until November.

More Than Meets the Eye

What we found most impressive about the game experience was that the obsessive detail is maintained across its vast library of cars and tracks. There are more than 700 fully customizable and upgradable cars, as well as 32 tracks (including the previously downloadable-content-only Virginia International Raceway, home to our annual Lightning Lap track test) that offer more than 200 configurations at launch. To put that into perspective, Sony’s rival Gran Turismo franchise will launch a new title, Gran Turismo Sport, on October 17 with just over 150 cars playable on 19 tracks.

All of the realistic damage, precise detail, and aural bliss of FM7 shine through, whether the sun is shining or not. Forza 7 introduces a dynamic-weather mechanic, which vastly improves on the wet-weather driving in the previous game. In Forza 6, racing in the wet meant showing up to an already soaked track with the same standing water in the same places. While offering wet surfaces is a good—and fun—idea, no dynamic rain means things can start feeling stale pretty quickly. Not so in Forza Motorsport 7. Here, for example, a race can start with nothing more than ominous clouds looming overhead, and about halfway through your first lap a single raindrop will spatter on your windshield. By the end of that lap, the track can be experiencing a downpour, with puddles expanding and threatening to ruin a quick lap. Driving in the rain, when combined with FM7’s much improved sense of speed, is difficult and can be genuinely terrifying, a keen reminder that actual racing is challenging and dangerous.

For Drivers and Gamers Alike

As impressive as FM7 is as a technical exercise and simulator, it remains a game at heart—and a fun one at that. The new Forza Driver’s Cup career mode encourages stepping out of your vehicular comfort zone by competing in everything from prewar cars to 1000-hp racing semi trucks. Showcase events like passing challenges, car bowling on the Top Gear test track, and historical showcases break up what could become a slog of regular races. Rivals mode returns, pitting you against players around the world in autocross challenges, track days, and drifting events, shaving tenths every lap to climb higher in the rankings. Load times throughout the game can be disappointingly long, however, but that may change when playing on a PC or an Xbox One X.

Across all game modes, completing races nets credits that can be used to buy cars, upgrades, and prize crates that contain all sorts of goodies including new driver’s gear. FM7 allows you to customize your driver, donning anything from vintage race suits and goggles to a tuxedo. It’s a nice touch. So, too, is the new soundtrack full of pounding rock music, as opposed to the operatic stuff of previous games. Completing a challenging race has always made us feel like more like a rock star than a Hellenic god; it fits.

Forza Motorsport 7 is challenging, rewarding, immersive, and utterly gorgeous. It stands as a vast improvement over the game it replaces, and it kept us enthralled in the same way as when we were racing around the Mushroom Kingdom. Whether bombing through Rio in a 700-hp Meyers Manx or navigating a soaked VIR in this year’s Lightning Lap champion Mercedes-AMG GT R, FM7 has set a new bar. Now we wait to see how Gran Turismo Sport stacks up.

 

In the future, owning a car could cost twice as much as taking driverless taxis everywhere

How much cheaper will it be to hail a driverless taxi than to own a car in the future? A lot, according to the financial services firm UBS.

UBS forecasts that taking “robotaxis”—i.e., self-driving taxis—will be half as expensive per kilometer as owning a car in the future. The firm expects to see widespread adoption of robotaxis in urban areas starting around 2030. It estimates that the typical household could save €5,000 a year (about $5,875) by switching to robotaxis in the future.

UBS thinks the shift toward electric vehicles alone will reduce the fees robotaxi companies charge by 15%-20%. It expects the “robo” part—aka, getting rid of human drivers—to cut user costs by another 25%. UBS is also counting on competition to drive down prices.

An interesting side note in this report is that UBS remains unconvinced that “shared mobility,” i.e., taking mostly Uber and Lyft, is cheaper than owning your own car today. That contradicts the notion, promoted by ride-hailing companies, that ride-sharing plus public transit can be a more affordable option than traditional car ownership.

UBS finds that the cost of “shared mobility” today is two to three times higher than owning a non-electric car. It modeled those estimates on a total commute of 40 kilometers, or about 25 miles, per day. The firm also notes that Uber has raised prices on its private UberX service in nearly a third of markets over the last year, based on the 600 it tracks, and lowered fares in only 3% of markets. Cities with the greatest UberX price increases include Bali, Indonesia; Cairo, Egypt; Iowa City, Iowa; and Ahmedabad, India, which all saw fare increases of 40% or more.

 

Audi’s Next-Gen Leap In Self-Driving Cars: A Car That Watches You

Cars that drive themselves have been inching onto the market for years now. There are already dozens of cars with “adaptive cruise control”–that is, sit behind the wheel on the highway, and the car will stay in its lane and brake and accelerate to maintain a safe following distance. But that’s a far cry from true autonomy. You still have to keep your hands on the wheel; you still have to be ready to take over at all times. This is about to change. Audi recently announced that in 2018, it’ll be releasing an A8 that completely takes over during traffic jams. For the first time, you’ll be able to take your hands off the wheel, your foot off the pedals, and let your mind wander.

This is a giant shift, portending the next wave in self-driving cars. Gear heads will tell you that after years of Level 2 in the five stages of car autonomy, we’re now finally reaching Level 3. But behind that advancement lies a conceptual leap: Not only must the car monitor the road, it has to monitor you, the driver.

That’s because for a car to take over for a driver, it has to know its own capabilities. To hand that control back over, it has to know the driver’s. Consider what happens when the A8’s traffic-jam feature kicks in. You hit a knot of slow moving traffic–it has to be below 37 mph. Then a button on the center console tells you that self-driving can be engaged. After you push that button, the car takes over. But once the traffic jam comes to an end and the car prepares to hand control back over to you, it has to know whether you’re even ready.

The Conceptual Leap

“We know from studies that it takes about 10 seconds for a driver to understand what’s happening,” explains Alejandro Vukotich, Audi’s vice president of automated driving development. In other words, it takes about 10 seconds to switch from listening to a podcast–or whatever else you’re doing–back over to the task of driving. And to give you that time, the car itself has to constantly be looking 10 seconds into the future–both inside and outside the car.

Monitoring what goes on outside the car isn’t just about situational awareness. It’s about making sure the car doesn’t have blindspots. So instead of just one type of sensor, the A8 is packed with them: LiDAR (which scans for distances using lasers), short and long range radar using ultrasonics, and cameras. Each one has their pluses and minuses–cameras, for example, don’t work well in the rain–but combining them all means the car always has at least a couple optimal sensing options no matter what: if it’s raining, or if there’s a glare, or if the light suddenly changes. All the data from the sensing mechanisms is “fused” with a piece of hardware tucked under the driver’s seat, and algorithms constantly monitor whether there’s enough sensing data to detect any edge-cases in road conditions.

Other cars such as the Tesla Model S already use ultrasonics and cameras; the A8 will be the first to add LiDAR into the mix. But the conceptual leap that the A8 will introduce is a system for monitoring the driver’s affect. An inward-facing camera detects the driver’s head tilt and whether her eyes are open. “We make our own estimation of what you’re looking at,” explains Vukotich. If you’re asleep or distracted so much that it’ll take more than 10 seconds to rouse you, then the system will start alerting you first–then bring the car to a complete stop if you don’t respond. (This being a traffic jam, the idea is that the conditions will let you stop in your lane with the hazards on.) This isn’t facial recognition–the teeny tiny single camera is instead analyzing your posture to understand just how alert you are.

We’ve known for decades that truly smart autonomous systems have to sense the state of their users. Sometime in the 1980s, researchers at NASA Ames and other places started cottoning to the idea that auto-pilot systems in airplanes needed to behave a bit like a horse would: If you ride a horse, the horse senses whether you’re on the reins or not. If it senses that you’re not paying attention, it’ll take over and used its own instincts to guide itself. The key is that the horse has senses–whether it’s the feeling of the reins or the spurs, the horse can sense how much control the rider has. The so-called H-metaphor has become foundational in human-machine interaction. (As I’ve reported before, the translation of the H-metaphor into rules for autonomous driving systems actually belongs to an Audi researcher and former NASA staffer in California.)

Drawing The Battle Lines

But the complexity of creating a car that’s smart enough to understand what its driver is doing has led to a pronounced split within the car industry. Volvo and Ford have announced that they’re skipping out on trying to make cars that can pass control back and forth between car and driver. Instead, they’re aiming to launch cars sometime after 2020 that won’t require human input at all–and won’t even have steering wheels. They’ll instead drive themselves in all road conditions, and execute all the moves that entails. The idea is that the period in which we’ll be passing control back and forth with our cars will be so brief that they’d rather make a bet on what comes after that. Meanwhile, BMW, Mercedes, and GM are all making a different bet. They’re trying to own the pathway to autonomy, on the hopes that they’ll be able to make more luxurious cars–with more expensive features worth spending on, such as a traffic-jam assistant. Those automakers are creating Level 3 systems along the lines of the A8.

At its core, Audi and the rest pursuing Level 3 automation are making a bet on their own skills at human-machine interaction–and how confident they are in solving a problem as old as HMI itself. Since the dawn of aviation, it’s been a truth that about 90% of all accidents in airplanes are caused by mode confusion–when the pilot doesn’t know whether the auto-pilot is on or off, or doesn’t know if the plane’s landing gear is up or down. Solving the problem for cars means having a ton of redundancy not just in the car’s abilities, but in alerting the driver as to what’s going on. The traffic-jam feature in the 2018 A8 will thus be a pioneer in teaching us, the drivers, how to detect what a car can do and how much it knows.

Alphabet wants to launch an Uber rival this fall, but the self-driving cars get tripped up by left turns, report says

Google-parent Alphabet is on the verge of launching a service with its self-driving cars that could rival Uber and Lyft, The Information reported on Tuesday.

But Waymo, Alphabet’s self-driving car company, must fix a glitch first, according to The Information: The vans have trouble making left turns.

The Chrysler vans, which would pick up and drop off passengers in Arizona, would be ideally monitored remotely, rather than with a “safety” driver, The Information reported. But the software in the cars reportedly gets tripped up by certain safety issues, especially when there is no green arrow for left turns.

To be sure, the cars are still being tested and improved: Waymo recently released a detailed blog post about how it is using simulations to quickly train its cars to learn tricky turns.

“At the corner of South Longmore Street and West Southern Avenue in Mesa, Arizona, there’s a flashing yellow arrow that permits cars to turn left,” Waymo wrote in the post. “Navigating this type of intersection can be tricky for humans and self-driving cars alike — drivers must carefully move into a five-lane intersection and then find a gap in oncoming traffic. Turning left too soon may cause a driving hazard for oncoming traffic; making the move too late may mean frustrated drivers behind.”

A Waymo spokesperson told CNBC that the cars are capable of “making left turns at all types of intersections.”

Still, a glitch could be one of the few setbacks keeping Waymo from leapfrogging ride-sharing services like Uber and Lyft, given data that indicates Waymo is the leader in autonomous driving technology. The ride-hailing pilot in Arizona could help Waymo log more miles on the road, which could be valuable in helping the company keep its lead.

Though Alphabet is an investor in Uber and may do the same with Lyft, the search giant clearly has ambitions in the transportation space itself. Google’s Waze has already launched a carpool service, and Waymo continues to hammer Uber in court over allegations of stolen trade secrets.

Even as Waymo litigates one type of self-driving technology with Uber, it has developed ideas for others, according to patent applications published on Tuesday.

Lyft was not immediately available to comment. Uber declined to comment.

Auto safety advocates criticize U.S. self-driving car legislation

WASHINGTON (Reuters) – A coalition of auto safety advocates criticized a bill before the U.S. Congress that would allow automakers eventually to sell up to 100,000 self-driving vehicles annually if they could demonstrate they are as safe as current vehicles.

The measure, the first significant federal legislation aimed at speeding self-driving cars to market, would allow automakers to win exemptions from safety standards for self-driving cars without human controls and bar states from imposing performance requirements.

Last week, U.S. Senator John Thune, a Republican who chairs the Commerce Committee, and Senator Gary Peters, a Michigan Democrat, said they had reached a bipartisan deal on the legislation.

The Senate Commerce Committee will vote on the measure on Wednesday, but may also vote on whether to include larger trucks. The U.S. House unanimously passed a similar bill in early September that did not include vehicles above 10,000 pounds (4.5 tonnes).

Current law prohibits vehicles without human controls.

“The public will be the crash-test dummy for this dangerous experiment,” former National Highway Traffic Safety Administration chief Joan Claybrook told a conference call with reporters on Tuesday, arguing the auto industry “is essentially trying to deregulate auto safety.”

Jason Levine, who heads the Center for Auto Safety, said on the call there was an “absence of corporate caution in the rush to be first to get self-driving cars on the road.”

General Motors Co, Alphabet Inc, Ford Motor Co and others have lobbied for the legislation to speed deployment of self-driving cars without human controls.

States could still set rules on registration, licensing, liability, insurance and safety inspections, but not performance standards.

The bill grants the NHTSA authority to exempt vehicles from existing federal safety requirements and the agency would have to make a determination within six months of getting a request.

It is not clear how the agency would make that assessment, given limited current testing on U.S. roads. The fatality rate in 2015 was 1.12 deaths and 78 injuries per 100 million miles traveled.

The bill is backed by groups including the Association of People with Disabilities, that say self-driving vehicles “have the potential to transform how Americans, with and without disabilities, move about their communities.”

The Alliance of Automobile Manufacturers, a trade group, said on Tuesday that NHTSA’s authority was not affected by the bill. “Given that human error contributes to nine out of 10 crashes, advancing self-driving technologies right now is critical to enhancing future roadway safety,” spokesman Wade Newton said.

Ford to cut costs $14 billion, invest in trucks, electric cars: CEO

DETROIT (Reuters) – Ford Motor Co (F.N) plans to slash $14 billion in costs over the next five years, Chief Executive Officer Jim Hackett told investors on Tuesday, adding that the No. 2 U.S. automaker would shift capital investment away from sedans and internal combustion engines to develop more trucks and electric and hybrid cars.

Most of those savings will not show up on Ford’s bottom line until 2019 and 2020, Hackett and other Ford executives said, reflecting the industry’s long product engineering lead times.

Ford will be open to more partnerships to spread the costs and risks of simultaneously developing new technology and services while churning out profit from selling trucks and sport utility vehicles in North America, Hackett said during a nearly two-hour presentation. He cited a partnership with ride services company Lyft to deploy future Ford self-driving cars, an alliance with Indian automaker Mahindra (MAHM.NS) and a potential alliance with Chinese electric vehicle maker Zotye.

The automaker reaffirmed a goal of achieving 8 percent automotive operating margins and generating returns that exceed the cost of capital. Ford will provide a financial forecast for 2018 in January. Ford Chief Financial Officer Bob Shanks said it could take until 2020 or later to achieve the 8 percent margin goal.

Other automakers have warned that shifting to all-electric vehicles could undercut profit margins. “I don’t think we should walk off a ledge where we destroy the earnings power of the company,” Hackett said, saying Ford is planning for a third of vehicles to still have internal combustion engines by 2030 – the year some European governments have proposed banning petroleum fueled cars.

Hackett, former CEO of office furniture maker Steelcase Inc (SCS.N), took the top post at Ford in May after his predecessor Mark Fields was pushed out. At the time, Hackett promised to tell investors after 100 days how he would improve the “fitness” of Ford to compete as the auto industry becomes more digital, more electric and less wedded to selling one vehicle at a time to individuals.

Ford shares were little changed after hours as Hackett and other executives presented their outlook. Ford shares had risen 2.1 percent on Tuesday, up with other automotive stocks as the industry reported the highest sales pace in a dozen years. However, the company’s share price is down 30 percent since July 2014.

Hackett has signed off on a series of moves, including a plan to shift production of Ford Focus compact cars from Michigan to China. He also hired a company outsider, Jason Luo, to lead Ford’s business in China, the world’s largest car market, where Ford is revamping operations and looking to expand partnerships in electric vehicles.

Ford is playing catch up in some areas. By 2019, Ford plans to equip all U.S. models with built-in modems and to install mobile internet connections in 90 percent of global vehicles by 2020, Hackett said.

Rival General Motors Co(GM.N) has been installing built-in mobile broadband connections in its U.S. vehicles since 2015 and now has about 7 million 4G LTE connected vehicles on the road globally, a spokesman said on Tuesday.

Of Ford’s $14 billion in promised cost reductions over five years, $10 billion will come from material costs and $4 billion from reduced engineering costs, Hackett said.

“We have too much cost across our business,” Hackett said.

By 2022, Ford plans to cut spending on future internal combustion engines by a third, or about $500 million, putting that money instead into expanded electric and hybrid vehicle development, on top of $4.5 billion previously announced. Ford had already promised 13 new electric or hybrid vehicles within the next five years.

Ford is “looking to build sustainably profitable BEV (battery electric vehicle) business” in segments where “we have a strong revenue presence,” Jim Farley, head of global markets, told investors.

Farley also said Ford is looking “carefully” at marginally profitable or unprofitable operations in Europe and Latin America, and could look to partnerships in those markets.

Electric vehicles will mean auto factories can have a final

assembly area that is half the size, requires half the capital investment and 30 percent fewer labor hours per car, said Joe Hinrichs, president of global operations.

GM on Monday said it planned to launch 20 new all-electric vehicles by 2023.

One way to cut costs will be to offer fewer variations of Ford’s models, Hackett said. The slow-selling Ford Fusion midsize sedan can now be ordered in 35,000 combinations of features, colors and powertrain options. The future model will come in just 96 combinations, meaning fewer parts to design, produce and store in inventory, Ford showed in a presentation.

He said Ford also will cut the time it takes to engineer a new car by 20 percent, and invest in “factories of the future” that will occupy less space and use more robots.

Ford to slash $14 billion in costs, cut car models under new CEO

Southfield, Michigan: Ford Motor Co. will cut $14 billion in costs and drop some car models from its lineup under chief executive officer Jim Hackett, who’s focusing the company’s future on sport utility vehicles, trucks and electrification.

The automaker will target reducing materials costs by $10 billion and engineering outlays by $4 billion over the next five years. Ford plans to shift spending toward products like the resurrected Bronco SUV while axing passenger cars, without naming specific models.

“I get up every day feeling like time can be wasted here if we don’t get moving,” Hackett told investors Tuesday at a briefing in New York. “I feel a real sense of urgency.”

Hackett, 62, is on a mission to win over Wall Street and convince wary investors that he has a plan to reverse a three-year stock slide. With profits and market share falling, Ford is being outmanoeuvred by competitors such as General Motors Co. and Tesla Inc. when it comes to getting electric vehicles and autonomous technology on the road. The former football player is trying to rewrite this reality by focusing on the company’s “fitness” and opening up to more partners and potential acquisitions.

Ford shares rose 0.5% to $12.40 as of 6:44pm in New York, after the close of regular trading. The stock is up 1.7% this year, trailing Ford’s US peers and the benchmark Standard & Poor’s 500 Index.

Ford plans to reallocate $7 billion that had been earmarked for cars to spend instead on SUVs and trucks. The company also will scrap its mostly go-it-alone strategy under former CEO Mark Fields and be more active pursuing M&A and joint ventures. Since Hackett took over in May, he’s partnered with companies on electric vehicles in China and India and teamed up with Lyft Inc. on self-driving cars.

“The world’s impression of Ford is that they are behind on a lot of these technologies,” Emmanuel Rosner, an analyst with Guggenheim Partners, said in an interview.

That notion was reinforced Monday when Ford’s crosstown rival GM—which already sells the long-range electric Chevy Bolt—announced plans to have 20 battery-powered cars on the road by 2023. The same day, Ford announced it had formed an independent unit dubbed Team Edison to create a business case for EVs. Ford will debut its first long-range model in 2020.

Profitability goal

“Ford is not behind on the technology,” Sherif Marakby, the head of the company’s electric vehicle program, said in an interview Monday. “What’s important is that this team makes sure to create a viable and profitable business. Our absolute goal is profitability.”

Hackett established deep ties in Silicon Valley when he reinterpreted the workplace in leading a turnaround of office furniture maker Steelcase Inc. He befriended Steve Jobs and convinced him to outfit Apple Inc. in Steelcase furniture.

“He has a very comfortable relationship with Silicon Valley,” said Jeffrey Sonnenfeld, associate dean of the Yale School of Management, who studied Hackett’s work at Steelcase. “There’s no arrogance, vanity or even self-awareness about him. Jim is not concerned with managing his personal brand.”

In a presentation to investors, Ford copped to having fallen short of a goal to earn an 8% profit margin with its automotive operations and reinforced that this remains its long-term goal. Costs have risen 29% since 2010, nearly as fast as revenue, which increased 30% during that period. Capital spending has grown even faster.

“Over the past seven years, we’ve averaged a 6.1 percent margin and that’s simply not good enough,” Hackett said. “That performance gap of two points is worth billions in value.”

Ford is no longer forecasting whether profit will jump in 2018 and will share its forecast for next year in January. Hackett set a new goal to cut automotive cost growth by 50% over the next five years by slashing engineering and material expenses.

The CEO also has set a target to get new models to market faster by reducing development time by 20% and cutting the time it takes preparing factories to build those vehicles by 25%. Ford will get rid of five of the 17 different engines it builds by 2022 and reduce capital spending on powertrains to $1.2 billion by then, from $1.7 billion last year.

“The mandate here is that Ford must compete,” Hackett told investors. “Companies never choose to die and yet many by not evolving are enabling that kind of fate. It’s clear that as a company we must then raise our gaze just high enough to ensure we’re not disrupted as the world changes.” Bloomberg

EESL offers 40% e-car order to Mahindra & Mahindra if it matches Tata bid

NEW DELHI: A week after awarding a Rs 1,120-crore order for electric cars to Tata MotorsBSE 1.22 %, state-run Energy Efficiency Services Ltd has offered to give 40% of the order for 10,000 e-vehicles to Mahindra & Mahindra provided it matches the former’s bid.

“Following due procedure, we have written to Mahindra today, asking them to match Tata’s bid,” Saurabh Kumar, managing director at Energy Efficiency Services Ltd (EESL), said on Tuesday. “If they agree, 40% of the order will go to Mahindra,” he told ET.

EESL had in August floated a global tender for 10,000 e-vehicles to replace five lakh petrol and diesel cars used by the government over three to four years. Tata Motors quoted the lowest in the bidding process on September 28, at Rs 10.16 lakh per car without goods and service tax (GST). The vehicle will be provided to EESL for Rs 11.2 lakh including GST and a comprehensive five-year warranty.

Now, Mahindra, which was the second lowest bidder offering e-cars for around Rs 13 lakh each, stands a chance to win 40% of the order, given it matches Tatas’ offer, Kumar said. EESL has given the company a week to respond to the government, on the basis of which the letters of award will be given to the companies.

“If they don’t respond in a week, we will send them a reminder,” Kumar said. “By the middle of this month we should be able to close the deal.” If Mahindra does manage to lower its bid, then Tata Motors, which has the entire order at present, will be left with 60% of it.

In the first phase of the procurement, EESL will buy 500 e-cars. The remaining order will be procured in a second phase. “We expect the e-vehicles to start coming in by middle of November,” Kumar said.

EESL will replace the fleet in the ministry of power, coal, new and renewable energy to begin with, ET had reported on September 9. EESL was planning to bring 10,000 vehicles on the road in Delhi-NCR in seven to eight months, Kumar had told ET.