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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.

Lewis Hamilton wins British GP, slashes Vettel's lead to 1 point

SILVERSTONE, England - Lewis Hamilton won his home British Grand Prix for the fourth year in a row on Sunday, while a penultimate-lap puncture slashed Sebastian Vettel's championship lead to a single point. The Briton's drive from pole to flag on an overcast afternoon was lonely, uneventful and dominant - in complete contrast to his Ferrari rival's afternoon - with Mercedes teammate Valtteri Bottas finishing 14 seconds behind to secure the one-two. "The support has been incredible this weekend. I am so proud I could do this for you all," said Hamilton, who threw himself into the fans for some crowd surfing after the podium celebrations. "The team were faultless this weekend, Valtteri did an incredible job as well, so it's the perfect weekend for us." Far behind in his wake, as Hamilton cruised to a 57th career win and soaked up the applause from an army of flag-waving fans, came sudden drama. Vettel, who had battled on worn tires but looked like securing the final podium position until the blowout, finished seventh after an emergency pit stop with a shower of sparks from the wheel rim. "There was no sign of that happening," said Vettel over the team radio. "There were vibrations but I had it for 20 laps and it didn't get massively worse. The tires didn't look great but they never look great." The German's Finnish teammate Kimi Raikkonen, who had been second before also being hit with a late puncture that sent Bottas and Vettel ahead of him, took third. At the halfway stage of the 20-race season, Vettel has 177 points to Hamilton's 176 with Bottas on 154. Hungary, a circuit where the Briton has won five times before, is next up. Hamilton became only the third driver, after his late compatriot Jim Clark and Frenchman Alain Prost, to win the British Grand Prix five times and the first to take four successive victories at Silverstone. Clark won four in a row in the 1960s, but one was at Aintree and another at Brands Hatch. Red Bull's Max Verstappen finished fourth, ending a run of retirements, with Australian teammate Daniel Ricciardo fifth after fighting through the field. Germany's Nico Hulkenberg was sixth for Renault and Force India pairing Esteban Ocon and Sergio Perez were eighth and ninth with Brazilian Felipe Massa securing the final point for Williams. Jolyon Palmer's miserable run continued, with Britain's only other driver on the grid failing to make the start after his Renault broke down on the formation lap with a brake failure.

Mercedes-Benz CLA45 AMG coming to the New York Auto Show

Mercedes-Benz showed off the CLA45 AMG at a private event on the eve of the Geneva Motor Show, but was determined not to let it be photographed. We can talk about it, though - after all, a teaser image was released to promote the new Sony game Drive Club. The CLA45 AMG will use the same powertrain as the A45 AMG, which means a 2.0-liter turbocharged four-cylinder with 360 horsepower and 332 pound-feet of torque. And that means a small four-door coupe sedan with the highest horsepower-per-liter in the segment. It will shift through the same seven-speed dual-clutch transmission, should also run out of speed at 155 miles per hour and have that three-stage stability control system.
As with its hatch sibling, the CLA is already so aggressive on the outside - and the parent company so anxious not to demolish the sedan's 0.22 coefficient of drag - that not much has been done to the cranked-up CLA. Even the rather thin tires on the standard only get a little less thin on the hotter variant. Inside will be the telltale AMG signs, with lots of red detailing and that flat-bottomed wheel among the giveaways. We'll know more later this month when the wraps come off at the New York International Auto Show.