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Automakers face reality of EVs' cost — to jobs, and their bottom line

Related: We obsessively covered the Frankfurt Motor Show — here's our complete coverage FRANKFURT, Germany — European car bosses gathering for the Frankfurt auto show are beginning to address the realities of mass vehicle electrification, and its consequences for jobs and profit, their minds focused by government pledges to outlaw the combustion engine. As the latest such announcement by China added momentum to a push for zero-emissions motoring, Daimler, Volkswagen and PSA Group gave details about their electric programs that could give policymakers some pause. Planned electric Mercedes models will initially be just half as profitable as conventional alternatives, Daimler warned — forcing the group to find savings by outsourcing more component manufacturing, which may in turn threaten German jobs. "In-house production is almost irrelevant to the consumer," Daimler boss Dieter Zetsche told reporters on the eve of the Frankfurt Motor Show, in the midst of a German election campaign in which automotive jobs have loomed large. The company set a target of saving 4 billion euros ($4.8 billion) by 2025 to help fund the cost of its electric cars. "Daimler is the first company to state explicitly how much electric vehicles are going to hurt margins," said Bernstein analyst Max Warburton. "It was brave to go first — but of course it won't be the last." Volkswagen, for its part, said it was seeking new global supplier contracts to source 50 billion euros ($60 billion) of electric car content including batteries, which are not yet manufactured competitively in Europe. "A company like Volkswagen must lead, not follow," Chief Executive Matthias Mueller told reporters. VW diesel emissions-cheating exposed by U.S. regulators in 2015 triggered global public outrage, dozens more investigations into test-rigging by the wider industry and a push by some lawmakers to ban diesel and eventually all engines. TIGHTENING NOOSE Tesla shares jumped nearly 6 percent on Monday after a Chinese minister said it was a question of when, not if, Beijing bans fossil-fuel cars, tightening the noose around the combustion engine. France and Britain have promised its outright abolition by 2040. But PSA, the maker of Peugeots and Citroens, said it was concerned about the risks if consumers were left behind in the rush, and a new generation of battery cars does not sell.

Rain prolongs the Championship battle | 2016 Brazilian Grand Prix recap

Rain and an old-school circuit are the antidotes to Formula 1's constricting technical regulations and Tilke tracks. At Brazil's Autodromo Jose Carlos Pace – otherwise known as Interlagos – rain Saturday night and on race day washed away everyone's careful plans, except for those of the man at the front of the pack. Lewis Hamilton put his Mercedes-AMG Petronas ahead of the field throughout the weekend. On Sunday, a storm-delayed start behind the Safety Car assured Hamilton of a clean path to the lead and a clear track. The Briton didn't waste it, pulling out a gap on teammate Nico Rosberg behind, and Rosberg appeared to have no interest in going hard after Hamilton. Safety Cars and red flags kept resetting the gap to zero, though. After the Mercedes-AMG GT S led the first seven laps, it emerged again on Lap 13 for another six laps when Marcus Ericsson crashed his Sauber. Seconds after racing resumed, Kimi Raikkonen aquaplaned his Ferrari into the wall on the front straight. That caused the first red flag, leading to another eight-lap Safety Car interval, then a second red flag stoppage due to conditions on Lap 28, then three more Safety Car laps, and then, finally, racing again. Hamilton never surrendered his lead. The Briton changed tires once during a stoppage, and drove fast enough to cover the full race distance despite the intermissions. Afterward, he said "it was a very easy race." Rosberg had it harder, defending against the preternatural Max Verstappen in third. Barring misfortune it's already clear the Red Bull pilot has at least one Driver's Championship in his career future. In Brazil the young Dutchman drove like he's worthy of the hardware right now. After Verstappen passed Rosberg for second on Lap 34, the Red Bull driver pitted for intermediate tires on Lap 44 – a huge gamble in the conditions – coming back out in fifth. That tire wager failed, giving Rosberg a safe position in second when Verstappen had to pit for extreme wets on Lap 54 of 71. The teenager re-emerged in 16th. Over the race's final 17 laps Verstappen passed 13 drivers at six different places on track. He ran it close-but-clean a couple of times, especially when getting around Sebastian Vettel and Sergio Perez, but he was simply untouchable. Not only did the Dutchman score an amazing third place, he put in what could be the drive of the season.

Ford and Mercedes join Renault in French emissions investigation

The French government is investigating certain models from Ford, Mercedes-Benz, and Renault because they allegedly produce more nitrogen oxide than the country's pollution rules allow, according to Automotive News, citing a French newspaper. After VW's emissions scandal, French regulators began checking more vehicles for evidence of defeat devices and excessive real-world pollution. According to Automotive News, the Mercedes S350 allegedly showed inconsistent results across these tests, and a Ford C-Max had NOx levels five times over the limit. The Renault Captur crossover, Espace, and an unnamed utility vehicle also had results that were too high. The French testing for this investigation includes an on-road emissions check that's not part of the EU's normal evaluations, which some automakers claim is unfair. "Unofficial on-road testing has varying conditions and can produce significantly different results," a Ford of Europe spokesman told Automotive News. Renault representatives met with French officials on January 18 to explain the situation. The company later submitted a plan to recall 15,800 examples of the diesel Captur, and said it would offer a voluntary software upgrade for about 700,000 other vehicles, according to Automotive News. Representatives from Ford and Mercedes will meet with the government soon, too. Renault's stock price plunged last week after investors heard that French regulators searched three of the automaker's sites as part of the emissions investigation. The stockholders feared an environmental scandal like the one currently embroiling Volkswagen. There's one major difference – as of now, there's no evidence Renault equipped any of the polluting models with defeat devices. Related Video: