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How the Chinese tycoon driving Volvo plans to tackle Tesla

HANGZHOU, China — "Do you know how big Volvo is?" asked Don Leclair, finance chief at Ford. It was 2008, and Leclair was responding to an offer from a little-known Chinese businessman to purchase the Swedish carmaker, which Ford owned. The businessman, Li Shufu, had a company with less than half Volvo's sales and a flagship model, King Kong, almost unknown outside China. He was politely shown the door of the "Glass House," Ford's iconic headquarters near Detroit, according to two people who were at the meeting. Ford's Leclair did not respond to requests for comment about the episode. Fast-forward to 2021 and Li Shufu's company, Zhejiang Geely Holding Group, is one of the biggest-selling automakers in the world's biggest auto market. It controls not only Volvo Cars but also a clutch of global auto brands, and a significant stake in German giant Daimler AG, the maker of Mercedes-Benz. These names are now part of its plans for a revolution in autos. Geely is preparing Volvo for a listing on the Nasdaq Stockholm exchange as a route towards the future of transportation: One where cars are part of an electrified network of mobility services, driving themselves, connecting to each other and — like cellphones — generating an array of data and new business opportunities. It's a vision more Silicon Valley than Detroit, where traditional automakers globally are chasing another giant — Tesla Inc. Li Shufu and his advisers eventually convinced Ford to part with Volvo in 2010 for $1.8 billion. It was the first in a string of deals, tapping brands such as Lotus, Smart and the London Electric Vehicle Company to form a network that he calls a "bigger circle of friends" across industry segments. Li Shufu sees them as building blocks to help Geely compete in a future where autos are not vehicles, but "service providers," he told Reuters in his management suite at Geely's headquarters in Hangzhou, eastern China. In that business model, cars will be available on subscription and offer services such as making payments and in-car apps. They will update their own software, and spawn opportunities in the same way as the mobile operating systems developed by Apple Inc and Google. "We are trying to create an automotive ecosystem similar to Android," he said. Li Shufu, 58, recently adopted a foreign first name - Eric - because he liked the sound of it.

Hyundai Sonata PHEV may be a game (and mind) changer

If you really, really want to consume volts instead of fuel on your way to work, school or shopping, you currently have just three options: pure EV, hydrogen fuel cell, or plug-in hybrid EV. Much as we love them, we all know the disadvantages of BEVs: high prices due to high battery cost (even though subsidized by their makers), limited range and long recharges. Yes, I know: six-figure (giant-battery) Teslas can deliver a couple hundred miles and Supercharge to ~80 percent in 10 minutes. But few of us can afford one of those, Tesla's high-voltage chargers are hardly as plentiful as gas stations, and even 10 minutes is a meaningful chunk out of a busy day. Also, good luck finding a Tesla dealership to fix whatever goes wrong (other than downloadable software updates) when it inevitably does. There still aren't any. Even more expensive, still rare as honest politicians, and much more challenging to refuel are FCEVs. You can lease one from Honda or Hyundai, and maybe soon Toyota, provided you live in Southern California and have ample disposable income. But you'd best limit your driving to within 100 miles or so of the small (but growing) number of hydrogen fueling stations in that state if you don't want to complete your trip on the back of a flatbed. That leaves PHEVs as the only reasonably affordable, practical choice. Yes, you can operate a conventional parallel hybrid in EV mode...for a mile or so at creep-along speeds. But if your mission is getting to work, school or the mall (and maybe back) most days without burning any fuel – while basking in the security of having a range-extender in reserve when you need it – your choices are extended-range EVs. That means the Chevrolet Volt, Cadillac ELR or a BMW i3 with the optional range-extender engine, and plug-in parallel hybrids. Regular readers know that, except for their high prices, I'm partial to EREVs. They are series hybrids whose small, fuel-efficient engines don't even start (except in certain rare, extreme conditions) until their batteries are spent. That means you can drive 30-40 (Volt, ELR) or 70-80 miles (i3) without consuming a drop of fuel. And until now, I've been fairly skeptical of plug-in versions of conventional parallel hybrids. Why?

Geely wants to be a tech-sharing 'friend' of Daimler in $9B bet

Chinese carmaker Geely has built up an almost 10-percent stake in Daimler in a $9 billion bet by its chairman that he can access the Mercedes-Benz owner's technology in the growing battle for the future of automotives. The purchase by Li Shufu, Geely's founder and main owner, means China's largest privately-owned automaker is now the biggest shareholder in Germany's Daimler. Geely said on Saturday there were no plans "for the time being" to raise the stake further. Instead, it will seek to forge an alliance with Daimler, which is developing electric and self-driving vehicles, to respond to the challenge from new competitors such as Tesla, Google and Uber. "No current car industry player is likely to win this battle against the invaders from outside without friends. To achieve and assert technological leadership, one has to adapt a new way of thinking in terms of sharing and combining strength. My investment in Daimler reflects this vision," Li said. "Daimler is pleased to announce that with Li Shufu it could win another long-term orientated shareholder, which is convinced by Daimler's innovation strength, strategy and future potential," the German company said in a statement. Geely officials plan to travel to Stuttgart to meet Daimler executives early next week and also hope to meet top German government officials in Berlin, two sources familiar with the matter told Reuters. The Chinese firm plans to use the meetings to underline that it intends to be a supportive long-term investor, they said. Daimler had no immediate comment on any meetings. Geely and the German economy ministry declined to comment. Chinese investors in German technology companies have tended to take a consensual approach, buying incremental stakes in companies such as robotics firms Kuka and Kion, typically after long consultation with management and other stakeholders. In November, Geely asked Daimler to issue new shares so it could buy a stake, as a way to access Mercedes-Benz technology for electric cars and trucks, including battery technology, to help Geely comply with a Chinese crackdown on pollution. But the German company turned down the offer saying it did not want to dilute existing shareholders, sources at the time told Reuters. Li changed tactics, and quietly amassed a stake of 9.69 percent worth $9 billion at Daimler's current share price.