Porsche Just Spent $113 Million To Ditch VW’s Proudest Tech

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Volkswagen’s van people are getting a big check from their friends at Porsche, Tesla is investing in U.S. nickel mining, and the once mighty have fallen in South Korea. All that and more in this Tuesday edition of The Morning Shift for January 11, 2022.

1st Gear: Money Changing Hands

Volkswagen Group — which encompasses the likes of Porsche, Audi and Bentley — have been developing vehicles built atop a common flagship electric vehicle platform called Artemis. That’s the Landjet project that Audi teased with its Grand Sphere concept last year. These are going to be seriously massive, opulent electrobarges, embedded with the latest and greatest in the group’s autonomous driving technology.

So it comes as a bit of a surprise — and not a particularly great look for the overall group — that Porsche just lost $113 million to avoid using Artemis. From Automobile News:

Porsche executives believe the brand, whose customer base is mainly performance-focused buyers, does not need the Artemis advanced autonomous driving functions. The brand lobbied VW Group for its version to be built in a Porsche plant.

Now Porsche will pay about 100 million euros ($113 million) to VW Commercial Vehicles to buy itself out of the project, sources told Automotive News Europe sister publication Automobilwoche.

Instead, Porsche will build its electric flagship, known internally as the K1, at its plant in Leipzig, Germany, starting in 2026, one year later than planned in Hanover.

All the Artemis vehicles were due to be built at Volkswagen’s Hanover factory, which typically churns out light commercial vans. You could imagine that Porsche might rather build its big cruiser at one of its facilities, which is apparently what will happen. Codenamed K1, that flagship is now slated to employ the Premium Platform Electric underpinnings already in use for the Audi E-Tron GT, ‘cause Porsche doesn’t need that stinkin’ self-driving mumbo jumbo.

Like Porsche, Bentley also worked to dodge full production in Hanover for its version of Artemis, per Electrive. While the bodywork will be made there, final assembly will happen in England.

Porsche’s hesitation is understandable, and this decision will probably mean better things for the electric flagship above the Taycan, ensuring that it stays truer to the brand’s values. At the same time, I have to wonder if this was one of those cases where VW’s luxury brands were all strong-armed into this, and if everything would’ve just gone a bit more smoothly — and cheaply — if Porsche backed out before this plan was locked in.

2nd Gear: Tesla’s Getting American Nickel

Last summer, Tesla CEO Elon Musk promised “a giant contract for a long period of time” to anyone willing and able to “mine nickel efficiently and in an environmentally sensitive way.” Musk has evidently found that company in Talon Metals, a base metals supplier operating out of the British Virgin Islands that is spearheading the carbon-neutral Tamarack mine in central Minnesota. Both parties announced the agreement on Monday, and the Tamarack project represents Tesla’s first domestic nickel supply. From Reuters:

By sourcing from Talon’s Minnesota project, a joint venture with Rio Tinto slated to open by 2026, Musk secures a key U.S. source of the metal for Tesla battery factories in Texas and Nevada, while also reducing the company’s supply lines. The automaker last year signed nickel supply deals with BHP, in Australia and from New Caledonia.

Indonesia is the world’s largest nickel producer, but miners there typically use energy-intensive technology to extract the metal and deploy controversial waste disposal practices, including dumping waste rock in waterways.

Talon Metals plans to use technology it hopes will allow it to suck carbon dioxide out of the atmosphere and chemically bind it – and thus permanently store it – to rocks found inside its Tamarack project in northern Minnesota. The process, which is still being tested, would effectively let Talon market nickel as carbon neutral, a huge appeal for Musk and Tesla.

The deal will last six years, or until a total of 75,000 metric tons of nickel is produced, according to Talon’s press release. It’s unknown where the nickel concentrate will be refined, Reuters adds, as there isn’t a nickel refinery in the U.S.

The average price of nickel has absolutely skyrocketed in recent years, rising 27 percent in the first half of last year compared to the 2020 average, per Global Trade. The U.S. is by no means a leader in nickel production, with one mine in Michigan that exports all of its yield for refining elsewhere.

EV development is spurring the construction of new battery factories all over the world, but especially here at home. Likewise, global nickel production will need to ramp up in kind to meet the ever-rising demand. Talon plans to begin producing at Tamarack by January 2026.

3rd Gear: VW Believes It Can Double EV Sales In China

Though, I’m not sure how. That’s because the brand’s chief executive in the region has been candid about the ongoing semiconductor shortage curtailing growth. From Reuters:

The German automaker sold 70,625 of its ID electric vehicles in China last year, missing its goal of selling 80,000 to 100,000 cars, with production also affected by regional COVID-19 outbreaks in addition to chip-related issues.

Volkswagen’s China chief Stephan Wollenstein told a briefing in Beijing that the automaker would still like to double its original plan but that goal “is not currently secured by the semiconductor supplies that we currently see.”

He added, however that he was “pretty positive that we will see a doubling of actual sales.”

The problem’s not squarely down to silicon, either. Volkswagen knows it’s not the hottest thing in China at the moment. From Financial Times:

VW’s five new ID models have not sold as well as hoped, and company executives told the Financial Times that Chinese buyers were gravitating towards fresher electric brands, not associated with traditional carmakers.

As a result, VW is setting up showrooms that emphasise the ID brand, and expanding its online sales offering in the hope of selling at least 140,000 ID models this year.

Volkswagen’s first slate of EVs seem good enough to make a dent, so it’s a bit surprising to hear Chinese buyers aren’t flocking to them. That said, it’s admittedly more surprising to learn Volkswagen has a whopping five ID models on sale in China, while we have one.

4th Gear: One Of South Korea’s Oldest Carmakers Was Just Snapped Up By Someone You’ve Never Heard Of

SsangYong is a maker of SUVs and pickups that have never been sold in the States but have a presence in many other parts of the world. The company traces its roots back to Dong-A Motors of the 1950s, a company that predates Hyundai. On Monday evening it was announced that SsangYong will be acquired by Edison Motors, a South Korean manufacturer of compressed natural gas and electric buses that was founded the same year Next’s “Too Close” stormed the Billboard charts — 1998. From Reuters via Automotive News:

A consortium led by South Korean electric carmaker Edison Motors has agreed to acquire debt-ridden SsangYong Motor for 305 billion won ($254.65 million), SsangYong Motor said on Monday.

SsangYong is burdened with high debt and its vehicle sales last year fell to 84,496, down about 21 percent from a year earlier, a regulatory filing from the automaker showed.

SsangYong was quite cheap, as it’s been hemorrhaging money and its previous owner, Mahindra, has been unable to find a buyer for almost a year. Edison is supposedly interested in bringing SsangYong to North America by the middle of the decade. Godspeed.

If you want to know more about SsangYong’s new owner, I invite you to read Edison’s About page, which leads with a quote about how the company “will overtake Tesla Motors” attributed to itself, then alternates between namedropping Apple and Google every other paragraph in between blurred out illustrations of cars that might just be Clip Art.

5th Gear: Mercedes Believes It Can Build A Car All By Itself

Unlike Mercedes-Benz models powered by pureed dinosaur bones, the brand’s EVs utilize powertrain modules and motors from ZF and Valeo Siemens. That includes the new EQS. But the house of the three-pointed star doesn’t expect it will always be this way. In fact, it may change in two years’ time. From Automotive News:

“We want to control the overall system of electric motor, battery and power electronics as much as possible, similar to what is the case with the combustion engine,” Schäfer said. This also includes the inverter, which transfers the energy from the battery to the engine. “Whether we will then also build this ourselves has not yet been decided, however,” he added.

The article adds that the efficiency-minded EQXX prototype, revealed during CES last week, offers a preview of the benefits of Mercedes’ future packaging:

With the same battery capacity, it requires half the installation space, is around a third lighter than before and is highly efficient, the automaker said.

The EQXX will consume only 10 kilowatt hours per 100 km, while current EVs use about 15 kilowatt hours or more. This should enable significantly longer ranges, especially for next-generation compact cars; the EQXX can travel more than 1,000 km (600 miles) on a single charge.

The EQXX is also merely a concept at the moment, so I’ll believe it when I see it.

Reverse: The Thinker’s Fiat

On this day in 1955 — 66 years ago — bicycle maker Bianchi, Pirelli and Fiat banded together, united by a common goal to make Fiats, but get weird about it. Autobianchi and, by extension, the cooler Italian version of the Mini was born.

Neutral: Did You Know About The 10th-Gen Lancer?

One of the coolest things about enjoying cars, in my opinion, is that it’s impossible to know about every single one. That’s also a reason why I love music so much. Every time you think you’ve seen it all, you’re reminded that you haven’t. I learned that wonderful lesson again this week when I became aware of the 10th-generation Mitsubishi Lancer, sold exclusively in mainland China and Taiwan.

OK, technically it’s not built by Mitsubishi and technically it’s more of a deep facelift. It doesn’t really count. Regardless, the fact of the matter is there is a car with a Lancer badge on it in another part of the world and I wasn’t aware of its existence until a couple days ago. Makes you wonder what else is out there!

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