December 6, 2017 News of the Day: BMW Launches ReachNow Car-Sharing in China with EVCard, Missouri Court Dismisses Lawsuit Seeking to Revoke Tesla's Dealer License

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【Summary】December 6, 2017 News of the Day

  Eric Walz  ·  Dec 06, 2017 4:17 PM PT
author: Eric Walz   

BMW Launches ReachNow Car-Sharing in China with EVCard

ReachNow, the mobility service from BMW, has entered Asian markets with its debut in Chengdu, capital of Southwest China's Sichuan province.

ReachNow has joined hands with EVCard, a Shanghai-based electric car-sharing company, to provide the station-based premium electric car-sharing mobility service ReachNow Powered by EVCard.

The debut of ReachNow in Asia is in line with the BMW Group's ‘ACES' strategy — autonomous, connected, electrified, services and shared. ReachNow Powered by EVCard provides a new and innovative mobility solution to Chinese customers at the price of 2 yuan (25 cents) per minute. Daily and weekend packages are also available, with 100 units of the electric BMW i3.

"The launch of ReachNow in China reflects BMW Group's vision for future mobility," said Bernhard Blaettel, vice-president of mobility and energy services at BMW Group.

"China and Chinese customers are playing a crucial role in the transformation of mobility. Together with our local partners, we aim to bring our worldwide experience in mobility services to this market, and strive to meet the ever-increasing demand from Chinese customers for convenient and sustainable mobility with our premium cars and services," he said.

The program will offer customers in Chengdu a high-end, intelligent and flexible on-demand mobility experience, and it represents a new milestone within the BMW Group's mobility services strategy.

"Chengdu is a great city that met our requirements for the launch of the service. We found the sharing business model is popular here, and Chengdu people enjoy a dynamic lifestyle and like to try new things," Blaettel told China Daily.

The combination of EVCard's mobile app with BMW Group's advanced car-sharing technology offers users car-use without a key, including car reservation, pick up, drop of, start and stop the engine, and payment. A 24-hour customer service hotline is available to support users in case of any questions.

Blaettel said: "We are providing premium cars with quality services to young customers who want clean and reliable cars in good condition. The BMW i3 cars are fun to drive, and they will empower customers with the use of a premium car without ownership."

The company believes this perfect combination of electric mobility and car-sharing will contribute to a sustainable and low-carbon lifestyle in urban areas of China.

By 2018, 25 stations will be available in Chengdu, which will be located around high-end areas such as premium residential and commercial areas, office buildings hosting large companies, government compounds and five-star hotels. Users will need to pick up and drop of the cars within the stations.

BMW launched its first car-sharing service in Europe in partnership with the car rental company Sixt under the brand DriveNow. The service is now active in 13 European cities with more than one million registered users and over 6,500 BMW and Mini vehicles in operation.

EVCard, is a leading electric car-sharing service provider in China under Global Car-Sharing & Rental Co. Combining its local perspective and expertise in electric car-sharing with BMW's global experience, the BMW Group will be able to better fulfill Chinese customer's diverse and individual mobility needs.

Missouri Court Dismisses Lawsuit Seeking to Revoke Tesla's Dealer License

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Tesla scored a victory in its ongoing battle to sell directly vehicles directly to consumers when the Missouri Court of Appeals dismissed a lawsuit Tuesday. The suit sought to revoke Tesla's vehicle dealer license in the state. A three-judge panel overturned a lower court decision last year that had directed the state to not renew Tesla's motor vehicle license and briefly forced it to close its Missouri stores.

Tesla has been fighting Missouri's antiquated state franchise laws that prohibit automakers from selling cars directly to consumers, requiring vehicles to be sold through only through independent dealers.

Tesla's business model allows customers to purchase a Tesla vehicle online or through its own stores, not through franchised dealerships. The company operates nearly 100 stores across the country, including in Kansas City and suburban St. Louis, plus a number of service centers and galleries, which are not able to process sales orders.

Plaintiffs including the Missouri Automobile Dealers Association and Reuther Ford, a dealer in Herculaneum, Mo., had argued that as economic competitors and taxpayers, they were entitled to challenge Tesla's dealer license, local public radio station KCUR-FM reports.

The appeals court denied the plaintiff's standing, saying that the Missouri legislature limited appeals of licensing decisions to cases where licenses were denied or revoked and adding that its ruling was "consistent with every appellate court ruling in the country that has addressed standing in similar Tesla license challenges in other states."

Doug Smith, the president of the Missouri Automobile Dealers Association, told the station the trade group was studying whether to appeal to the state Supreme Court. If you're an automaker in Missouri, "you're supposed to sell vehicles through the system that was created in the early '80s," he told KCUR. "And until that system is modified or changed, that's gonna be our stance." He added that allowing Tesla to keep its license would open the door to direct sales from Chinese and Indian manufacturers and hurt existing small businesses.

A Tesla spokeswoman hailed the decision as "a victory for Missouri consumers who want the choice to learn about and purchase their Tesla in their home state."

In January of 2017, Tesla was forced to close its two Missouri showrooms after its license to sell cars in the state expired.

Tesla's battle is far from over. It's still fighting dealer franchise laws in states like Texas, where it operates eight non-sales galleries, and in Michigan, where it recently opened its first standalone gallery.

Toyota Will Decide on new U.S. Plant Location in Early 2018

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DETROIT — Toyota Motor Corp will decide by the first quarter of 2018 on a location for a new U.S. vehicle assembly plant it will build with Mazda, the head of Toyota's North American operations said on Monday.

"The final decision has not been made," Jim Lentz, chief executive of Toyota North America, told Reuters in an interview in Detroit. More than one state remains in the running for the $1.6 billion plant, Lentz said.

Toyota and Mazda's plan to build a new U.S. factory is part of a broader wave of investment in North American production capacity by European and Asian automakers. The increased vehicle-making capacity is coming despite forecasts that U.S. vehicle demand is hitting a plateau, and car ownership is expected to decline in the new era of shared mobility services.

The new factory is part of a broader realignment of Toyota's production and supply chain in North America. The new plant is expected to build an SUV for Mazda, and Corollas for Toyota.

The Canadian plant that currently builds Corollas will be able to build more SUVs. Toyota also plans a factory in Guanajuato, Mexico that will build Tacoma pickup trucks, freeing up Toyota's existing factory in San Antonio, Texas to build more Tundra large pickups.

Toyota's production strategy for North America could be disrupted if negotiations among the United States, Mexico and Canada to amend the North American Free Trade Agreement (NAFTA) fail, and U.S. President Donald Trump decides to exit the trade pact.

"I think the government will make the right decision," Lentz said. "They will tweak, rather than throw out" the existing agreement that allows tariff-free trade in vehicles and components.

Ford, Alibaba Plan to Test New Sales Models in China

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BEIJING — Ford Motor Co. is expected to sign as early as Thursday a deal with Alibaba Group Holding that may allow the automaker to test selling cars to consumers in China through Alibaba's online retail arm, Tmall, as well as via a new "auto vending machine" store concept, according to a Ford source familiar with the matter.

Representatives of Ford and Alibaba, including Ford Executive Chairman Bill Ford and Ford CEO Jim Hackett, are expected to be in Hangzhou on Thursday to sign a letter of intent that outlines the scope of the new partnership.

According to the source, who did not want to be named because he is not authorized to speak with reporters, the deal is intended to position the automaker for an emerging Chinese marketplace where more cars could be sold online.

The partnership would be part of Ford's effort to overhaul its China strategy to revive the growth momentum it has lost in recent months.

Ford global chief spokesman Mark Truby said the company is expected to make an announcement on Thursday in Hangzhou, where Alibaba is based, but declined to comment in advance. Alibaba spokeswoman Crystal Liu declined to comment.

The source said the proposal could mean that cars purchased online are delivered to buyers by franchised Ford retail stores and would be maintained and repaired by them.

But Ford could also use Tmall's new retail concept called the "Automotive Vending Machine" — a multi-story parking garage that partly resembles a giant vending machine — to sell directly to consumers, the source said. Those cars could come directly from Ford or from its dealers but the details are still to be worked out, the source added.

According to Alibaba, consumers can use their phones to browse through the cars garaged in the store and choose to either immediately buy one or test drive it. The vehicle would be delivered to them on the ground floor.

The model allows shoppers with good credit to purchase their new ride with a 10 percent down payment and then make monthly payments for the car purchase through Alibaba affiliate Alipay, according to Alibaba.

Ford believes dealers would likely agree to this direct retailing model because they still get to service cars sold through Tmall, the Ford source said.

The move, though, could be potentially problematic for dealers, some industry experts said.

"When online sales and direct sales volume was small that's one thing. But if this format gained steam, it would definitely impact dealers," according to Yale Zhang, head of Shanghai-based consultancy Automotive Foresight. "Retail innovation is great, but it is by its nature disruptive and can't keep everybody happy."

The danger is that the dealers lose out not only on a lot of car sales but also the potentially lucrative auto financing aspect of their traditional business.

Direct selling by auto brands is not always possible in many markets around the world. In the United States, for example, because of franchise auto dealer operators' political clout, except for a small number of states, direct selling is largely not possible.

The source said Ford is "behind in using big data" to monitor sales trends and effectively market its cars and the move to online sales as well as the access to Tmall's massive database of information on consumers would help it to catch up.

Online auto sales volumes are currently limited in China because car buyers want to be able to see, touch and drive cars before buying them, said Zhang. The ability to test drive a car ordered online could change that.

California Lawmaker Considers Ban on Fossil Fuel Vehicles by 2040

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SAN FRANCISCO — A California lawmaker wants to put the state alongside China, France and the U.K. and have its legislature consider a ban on vehicles powered by fossil fuels, according to a report by Bloomberg.

California Assemblymember Phil Ting, a Democrat who is chairman of the chamber's budget committee, said he plans to introduce a bill that, starting in 2040, would allow the state's motor vehicles department to register only "clean" vehicles that emit no carbon dioxide, such as battery-electric or hydrogen fuel-cell cars.

"Until you set a deadline, nothing gets done," Ting, who represents much of San Francisco, said in a phone interview Tuesday. "It's responsible for us to set a deadline 23 years in advance."

Ting said he will introduce the bill when lawmakers return to Sacramento next month for the upcoming legislative session. If adopted, it would eliminate a large portion of carbon emissions from the transportation sector, the top source of the greenhouse gas in the U.S. California wants to slash emissions by 80 percent from 1990 levels by 2050.

Ting isn't the first official from the state with the largest market for new vehicle sales in the U.S. to openly consider a ban on internal-combustion engines. The topic has been discussed at the California Air Resources Board, the state's powerful air quality regulator, after Governor Jerry Brown showed interest in similar moves by other countries, including China.

"I've gotten messages from the governor asking, ‘Why haven't we done something already?'" CARB Chairman Mary Nichols said in September, referring to China's planned phase-out of fossil-fuel vehicle sales. "The governor has certainly indicated an interest in why China can do this and not California."

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