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Tesla Model 3: Finding perspective

The reveal of the Tesla Model 3 this week was one of the biggest automotive events of the year. The car attracted 180,000 pre-orders in just 24 hours, gave the company's stock a jolt, and set Tesla on a more ambitious growth path for the rest of the decade. It's a staggering feat considering the Model 3 is one car, from one company that's just 13 years old. It begs the question: Is all of this attention warranted? Barclays analyst Brian Johnson urged investors to "take a deep breath," and be mindful that the Model 3 won't likely arrive in "significant volume" until possibly 2019. Though Tesla promises the car will launch in 2017, Johnson points to the slow rollouts of the Model S sedan and Model X crossover as cautionary notes. The potential extended wait didn't temper the enthusiasm of Tesla's faithful, and many put down deposits before they had even seen the car. Johnson compared the hype to a "Black Friday atmosphere," saying the social media buzz went from "insane mode to ludicrous mode," in a riff on Tesla's driving features. Still, the Barclays analyst was admittedly "curmudgeonly" when it came to Tesla's stock price. In comparison, Morgan Stanley called Tesla's shares undervalued, and expects the Model 3 to be the start of cataclysmic changes in the industry. "We have said for some time that, despite its many worthy accomplishments, Tesla had not yet truly disrupted the auto industry," according to a report led by Adam Jonas. "We are now getting a feeling that this may be starting to change." The Model 3 offers a range of 215 miles on a single charge, can sprint to 60 miles per hour in less than six seconds, and has room for five. It will also be capable of charging on Tesla's supercharging network and features the company's autonomous technology. With a starting price of $35,000 before incentives, it's arguably the most futuristic car that's attainable for a wide swatch of American buyers, though the Chevy Bolt EV is comparable (200-plus-mile range, $37,500 MSRP before incentives) in many ways. The Model 3's attainability is what partially drove the hype. It was like Elon was whispering: Y ou can own the future. The question is now: Can Tesla deliver? If it does, this early fanfare will be richly deserved. News & Analysis News: Top Gear appears to be in turmoil as Chris Evans works four hours a day. Analysis: Is this a soap opera or a car show?

Stellantis mega-merger gets approval from FCA, PSA shareholders

MILAN — Shareholders of Fiat Chrysler and PSA Peugeot decisively voted Monday to merge the U.S.-Italian and French carmakers to create worldÂ’s 4th-largest auto company. Addressing separate meetings, both PSA Peugeot CEO Carlos Tavares and Fiat Chrysler Chairman John Elkann spoke of the “historic” importance of the vote, which combines legacy car companies that helped write the industrial histories of the United States, France and Italy. Before the merger is finalized, shares in the new company, to be called Stellantis, must the launched. It will be traded in Milan, New York and Paris. The marriage of PSA Peugeot and Fiat Chrysler Automobiles is built on the promise of cost-savings in the capital-hungry industry, but what remains to be seen is if it will be able to preserve jobs and heritage brands in a global market still suffering from the pandemic. The deal will create the worldÂ’s fourth-largest carmaker, with the capacity to produce 8.7 million cars a year, behind Volkswagen, Toyota and Renault-Nissan, and create 5 billion euros in annual synergies.  “We are fully aware of the fact that together we will be stronger than individually,'' PSA CEO Carlos Tavares told a virtual gathering of eligible shareholders. “The two companies are in good health. These two companies have strong positions in their markets.” The new company will put together under one roof French mass-market carmakers Peugeot and Citroen, top-selling Jeep and Italian luxury and sports brands Maserati and Alfa Romeo - pooling companies that have helped define the industry in the United States, France and Italy. While the tie-up is billed as a merger of equals, the power advantage goes to PSA, with Tavares running Stellantis and holding the tie-breaking vote on the 11-seat board. Tavares is set to take full control of the company early this year, possibly by the end of January. Fiat Chrysler chairman John Elkann, heir to the Fiat-founding Agnelli family and Fiat ChryslerÂ’s biggest shareholder, will be the Stellantis chairman. Fiat Chrysler CEO Mike Manley will head North American operations, which is key to Tavares' long-time goal of getting a U.S. foothold for the French carmaker he has run since 2014, and the clear money-maker for Fiat Chrysler. Such a deal was long wanted by Fiat ChryslerÂ’s long-time CEO Sergio Marchionne, who had predicted the necessity of consolidation in the industry. He was unable to find a deal before his sudden death in July 2018.

Ram and Jeep diesel emissions allegations spur class action lawsuits

This shouldn't come as a surprise. Last week, the EPA issued a notice of violation to FCA after it determined that Jeep and Ram installed eight undisclosed auxiliary emissions control devices on diesel vehicles. Since then US law firm Heninger Garrison Davis, LLC and Canadian firm Sotos LLP have launched class action suits on behalf of owners. These latest lawsuits are unrelated to a previous class action suit brought against FCA and Cummins over NOx emissions in 2007 to 2012 Ram models. The violation notice – and the subsequent lawsuits – covers 2014 to 2016 Jeep Grand Cherokee and Ram 1500 models equipped with the 3.0-liter turbodiesel V6, a total of about 104,000 vehicles in the US. The EPA says that while the emissions control devices aren't necessarily illegal, installing them without disclosing them to the EPA is, as they produce more emissions in real world use than in testing. Skirting certification in this way might be a violation of the Clean Air Act. FCA could see fines of up to $45,000 per vehicle, depending on the outcome of the EPA investigation. FCA denies that these are cheat devices, and has proposed software updates to bring the vehicles into compliance. As for the lawsuits, Heninger Garrison Davis says that "Fiat Chrysler marketed those vehicles as environmentally friendly with enhanced fuel efficiency, better performance, and lower emissions. Although the diesel vehicles were successfully marketed as 'clean,' their environmentally-friendly representations were deceptive to consumers." The suit seeks an undisclosed amount of compensation for owners of these vehicles. In Canada, Sotos LLP is seeking $250 million in damages on behalf of owners. This suit, filed in the Ontario Superior Court of Justice, also claims deception on the part of FCA, "resulting in losses and damage" to owners. These are similar claims to group actions against Volkswagen with regard to its diesel emissions cheating scandal. While VW is fixing or buying back many of the affected vehicles, the company is defending itself against some suits on behalf of owners, saying it expects " no decline in the residual values of the affected vehicles as a result of this issue." Don't be surprised if FCA mounts a similar defense.