Good morning! It’s Wednesday, December 18, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Honda And Nissan Hold Merger Talks
Japanese automaker Nissan has been having a pretty rough time in 2024, with sales floundering and its aging lineup looking increasingly outdated compared with the competition. Honda also hasn’t had a phenomenal time of it, with the automaker slow on the uptake of EVs and backtracking on a deal to collaborate with General Motors on next-generation models.
These two automotive icons are now reportedly considering a merger that would create a new automotive giant to turn around their fortunes, reports Bloomberg. Talks, which could even extend to Mitsubishi as well, have kicked off between the Japanese brands with the automakers hoping that by pooling their resources they’ll be better prepared to tackle the competition from rivals Toyota and the booming Chinese auto industry:
Discussions are at an early stage and may not lead to an agreement, the people said.
“Both players stand to gain from this merger,” Vivek Vaidya, senior vice president of mobility at Frost & Sullivan, said. “The combined entity will be a complete automaker.”
A deal would effectively consolidate the Japanese auto industry into two main camps: One controlled by Honda, Nissan and Mitsubishi and another consisting of Toyota group companies. It would also provide them with more resources to compete with larger peers globally after downsizing long-held partnerships with other carmakers. Nissan has loosened ties with France’s Renault SA and Honda has backed away from General Motors Co.
If Honda, Nissan and Mitsubishi were to merge, it would create an automotive giant with a market value of $57 billion, reports Bloomberg. In comparison, Toyota is valued at $276bn and Tesla is valued at more than a trillion dollars.
The makeup of any potential merger remains to be seen, with Honda and Nissan set to decide whether it could be a full merger similar to the joining of Fiat-Chrysler and PSA to create Stellantis, or if it could be something softer, as Bloomberg added:
Honda is considering several options including a merger, capital tie-up or the establishment of a holding company, Executive Vice President Shinji Aoyama said on Wednesday following reports overnight of talks between the carmakers. Aoyama declined to elaborate on when a potential decision will be made.
The companies could make an announcement on Dec. 23, TBS reported. Stock in Honda fell as much as 3.4%.
Would you buy a Nissan Honda car in the future, or would you be more inclined to shop at your local Honda Nissan? Whichever way around the names are above the door, this is sure to be a big shakeup in Japan’s auto industry that could just save these two companies.
2nd Gear: Porsche Throws Its EV Plans In the Air
Electric vehicle targets have already been backtracked by giants like Toyota and General Motors this year, and automakers are even calling on the incoming president to soften EV sales goals going forward. Now, Porsche appears to be rethinking its EV strategy, which initially aimed for 80 percent of car sales to be electric by 2030.
The 911 maker is reportedly “reassessing” its electric vehicle rollout as it faces struggling sales in China and slower EV adoption in Europe, reports Automotive News. The Rollout is being reconsidered as the automaker struggles with the delayed launch of its battery-powered 718, reports the site:
Porsche is struggling to electrify the 718 Boxster and 718 Cayman. This project is behind schedule because of issues with the battery, according to the report.
The automaker is finding it difficult to match the driving characteristics in the sport cars with the move to a battery powertrain from a mid-engine combustion one.
The challenges that this presents have led to Porsche to seek frequent changes from battery supplier Valmet Automotive, which has built a factory in the German state of Baden-Württemberg specifically for the order. Valmet is seeking compensation for the extra work that Porsche does not want to pay or only wants to pay partially, according to the report.
The 718 family’s combustion-driven models were scheduled to be phased out next summer and replaced by the electric versions of the sports cars, but that target is in doubt, according to Automobilwoche.
The German brand may also delay the electrified version of the Cayenne SUV, which was slated for release in 2026, and could even extend the lifespan of its current gas-powered high-rider. In addition, Porsche is reportedly looking for ways to fit a gas motor into a planned seven-seat SUV that was rumored to launch in 2027 as a fully electric model.
Porsche’s hesitancy around its electric future comes after more than 4 million cars have been wiped from EV targets around the world. In spite of this, EV sales are still growing and the U.S. recently set a new record for electric car deliveries, so maybe now isn’t the time to slash output and development of new battery-powered cars.
3rd Gear: Stellantis Has A Plan To Save Face In Italy
After a rough few months that saw sales plummet, dealers issue a scathing review of management and CEO Carlos Tavares quit, there are murmurings that fortunes may be changing for Jeep owner Stellantis. Now, the automotive giant has a plan to improve conditions in one of its most troublesome markets: Italy.
Stellantis is key to Italy’s auto industry, owning both Alfa Romeo and Fiat, and producing hundreds of thousands of cars in the country every year. In recent months, the automaker has faced strike action and warnings from lawmakers in Italy that it must do more to protect manufacturing jobs in Italy. Now, Automotive News reports that a plan is in place to “revitalize” output in the country:
Stellantis Europe boss Jean-Philippe Imparato outlined a multifaceted plan for the automaker’s operations in Italy.
Stellantis will keep all of its Italian factories open and increase output starting in 2026 thanks to the launch of new models. All Stellantis plants in Italy will have production allocations until 2032 and will not require public funds for planned investments.
Imparato said the automaker would invest €2 billion ($2.1 billion) in Italy in 2025 alone. Stellantis invested a total of €10 billion in Italy in the 2021-25 period, he added.
The investment means that models will continue rolling off the factory floor at Stellantis’ plants such as Pomigliano d’Arco and the Melfi plant. A new STLA Small platform will be rolled out at Pomigliano d’Arco in 2028, while Melfi will focus on cars like the Jeep Compass and Lancia Gamma from 2025, with bars cars launching as EVs and hybrids.
The auto industry in Italy will also receive backing from the national government, adds Automotive News. Lawmakers in the country have pledged €1.6 billion ($1.7bn) to support Italy’s automotive supply chain and more than €1 billion ($1bn) of this will be available from next year.
4th Gear: U.S. Government Missed Its EV Targets
It’s not just automakers in America that are missing their lofty electric vehicle goals, the government is too! Before President-elect Donald Trump can come in and scrap all the EV targets governments have been working on, a new report found that, under the Biden administration, the U.S. Government purchased four times as many gas-powered cars as electric ones.
U.S. government agencies have reportedly failed to meet fleet EV policies brought in by Joe Biden, reports Reuters. The targets would see agencies stop buying gas-powered cars by 2035 and steadily switch to sustainable alternatives in the buildup to that deadline, but this hasn’t quite happened:
In the 2023 budget year, agencies bought 25,300 gas-powered vehicles and a total of 5,500 EVs and plug-in hybrids — 60% of 11 agencies’ combined target of 9,500, the report said.
President Joe Biden in December 2021 issued an executive order directing the government to end purchases of gas-powered vehicles by 2035 and mandating that all light-duty federal acquisitions by the end of 2027 be electric or plug-in hybrid vehicles.
The GAO said officials from nine of 11 selected agencies said meeting the EV targets “will largely depend on factors outside of the facilitating agencies’ control,” including the status of charging infrastructure and whether sufficient zero-emission vehicles are available for federal purchase.
It’s not just electric cars targets that have been missed, the government has also failed to meet the infrastructure requirements for the switch, adds Reuters. Back in 2022, it was reported that more than 100,000 government charging ports would be needed to support the transition, but as of last month, there are just 10,500 active charging stations at federal agencies. A further 50,000 ports are still in the process of launching.
If the government can’t get itself turned over to electric power, how can it expect the rest of us to believe it’s a viable option? Do better, please.
