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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.

Gordon Murray, F1-driven production and .. the Pontiac Fiero

Gordon Murray's design and engineering chops are unquestionable. But does his carmaking approach owe something to the short-lived Pontiac Fiero, a scrappy little car program that emerged from GM against serious resistance? Murray had a Formula One career that ran from 1969 to 1991, with stints at Brabham ('69 to '86) and McLaren ('87-'91), that resulted in several shelves' worth of trophies for the cars he was instrumental in designing. He moved on to McLaren Cars, the consumer side of things, where, during his tenure from 1991 to 2004, he helped design the McLaren F1 and the Mercedes-Benz SLR McLaren, two cars that took learnings from his two decades in Formula One. What do all of these cars have in common? Three things: They are light. They were built in limited numbers. And they were (and are) exceedingly expensive—when the McLaren F1 debuted in 1994, it stickered at $815,000. Murray went on to establish Gordon Murray Design in 2007. GMD has created some interesting concept vehicles, such as the diminutive T.25 city car (94.5 inches long, 51.1 inches wide and 55.1 inches high), and the OX, a lightweight truck for the developing world that packs like an IKEA shelf and is working toward realization through a worthy crowdfunding campaign established by the Global Vehicle Trust. Now he has created a vehicle manufacturing company, Gordon Murray Automotive, that will use manufacturing methods that he developed under the moniker "iStream." Unlike a unibody, there are the "iFrame," a cage-like construction made with metallic components, and the "iPanels," which are composite. The panels aren't simply a decorative skin; they actually provide structure to the vehicle. Presumably this has something of the F1 monocoque about it. Going back to the three elements, (1) this arrangement results in a vehicle that can be comparatively light; (2) Murray has indicated that his manufacturing company will be doing limited-run production; and (3) to launch Gordon Murray Automotive they are going to be building a flagship model, about which Murray said, "With our first new car, we will demonstrate a return to the design and engineering principles that have made the McLaren F1 such an icon." Which seems to imply that it will be on the pricey side. According to the company's verbiage, "iStream forges an entirely new production method that defies conventionality with its Formula One-derived construction and materials technologies." It also sounds a whole lot like ...

Mercedes-Benz S63 AMG officially teased in mini video

The followup to the Mercedes-Benz S550, the S63 AMG, will sport a biturbocharged V8 that will likely turn out around 550 horsepower. The new engine is probably the 5.5-liter, biturbocharged V-8 that's been popping up in everything from the ML63 to the E63 AMG. The front fascia is more aggressive, which shouldn't come as a surprise, while a meaty exhaust setup can be found out back.
We managed to pick all that up from a short, 17-second video posted by MB. The original video that unveiled the S63 AMG has since been pulled down, making this YouTube clip the best look we now have at the new super sedan, at least until the Germans give up the goods for real.
Be sure to check out the video below, along with our original posting on the S63 AMG.