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In 1985 when Doc and Marty McFly powered up the Mr Fusion Home Energy Reactor in Back To The Future they travelled forward 30 years in time using household waste and nuclear fusion.

Little could they have imagined the reality – that by 2016 the world would be seriously contemplating the end of oil and the emergence of brand new energy technologies.

Matthias Muller is no slouch.

He ran Porsche before the emissions scandal blew up in VW’s face.  He then took over as VW CEO in September last year.

I’ve been tipping him as a CEO to watch since last December.  And I’ve been watching VW closely –  last year I advised the car giant to get serious about EVs.

Looks like they’re listening.

Muller just announced VW’s new strategic plan.  It’s a big deal and people are sitting up and taking note. He’s called it VW’s “biggest transformation in the company’s history.”

I’m inclined to agree.

The analysts are already getting stuck into the detail.  Efficiency gains, €8Bn savings, a combined Group components business with 70,000 employees, and margins up to 8%.

But the really interesting stuff is VW’s total commitment towards EVs, battery tech, digitization, and autonomous driving.  Muller says he’ll create “entirely new areas of competence for the Group” which includes of course Audi and Porsche.

Development of EVs is going into overdrive. Over the next 10 years, VW will develop around 30 new battery powered electric-car models.  This could rapidly account for 25% of VW total sales.

Muller says he’ll launch the first fully autonomous vehicles by the end of the decade.  That’s in less than four years.  They’re hiring 1,000 software specialists to help them do it.

This caps VW’s recent announced of $300 million investment in GETT, an Uber rival.  His plan is to put GETT at the heart of a new ‘mobility services division’ delivering €1 billion revenues by 2025.

For those of you who don’t know, ‘mobility services’ are going to destroy the traditional model of car ownership.  Who wants to spend tens of thousands on an asset that sits idle in a car parking space 90% of the time?  Mobility services – shared cars – are possibly the single biggest threat to old fashioned car makers, and VW has jumped on that bandwagon good and proper.

And Muller announced his plans to make battery technology a core competency at the group. At the moment, car makers rely heavily on suppliers for their batteries.

VW is investing €11bn on innovation in batteries, electrification, and related technologies, and the car company is in a good place, literally.  Just across the border, in the Czech republic, lies Europe’s largest lithium deposit.  This deposit at Cinovec, is perfectly located to supply VW and others with this vital element which Goldman Sachs has dubbed the ‘new gasoline.

So good for you, Herr Muller.  VW had a brush with the grim reaper last year and some thought this venerable brand may not survive.  But (as I have written previously) these events may not have been entirely of VW’s making.

When the going gets tough it is heartening to see bold, clear and smart strategy from the new leadership.  VW’s plans make sense to me.

 

 

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So, Volkswagen is building a Tesla style gigafactory to mass produce lithium batteries. And they’re investing €11bn, 3 times as much as the Tesla Panasonic behemoth in Nevada.

This massive story, sourced authoritatively from Handelsblatt, Germany’s version of the FT, might be the news that draws a line under one of the sorriest tales of modern times.

The VW emissions scandal wasn’t simply about duping its car customers.  Although you’d be mightily peeved if you’d spent all that money on a clean motor, only to discover it was a dirty polluting banger after all.

The real scandal was the gross manipulation of the entire European car market by corrupt EU bureaucrats and lobbyists.

This is how the scam worked, and thank you to the brilliant Dan Hannan MEP for explaining how these EU lobbying scams work.

There are 25,000 lobbyists in Brussels.  (yes you read that correctly – 25 thousand!)

One such group representing the European auto industry spotted a chance to get one over on their US and Asian rivals.  Under the pretence of reducing CO2 emissions by 15% – they skilfully lobbied Brussels to adopt standards favouring the diesel engine.

Diesel had almost died out – having lived up to its reputation as dirty and polluting.

But then in 1998 one Neil Kinnock, the (unelected) EU Transport Commissioner, proudly trumpeted a new set of emissions standards favouring diesel.

It didn’t take long for the entire European car fleet to be transformed from mainly petrol to mainly diesel.

Did anybody mention that diesel produces four times as much deadly nitrous oxide as petrol?  Nah – inconvenient truth.

Or that diesel produces 22 times as many tiny particulates that penetrate people’s hearts, lungs and brains?

So in order to line the pockets of the Euro carmakers, the unelected EU bureaucrats, and the parasitic lobbyists, in cahoots, polluted our cities and consigned men, women, and children, old and young alike, to terrible health risks.  In the US alone the MIT has estimated 60 premature deaths.  The figure will be significantly higher in Europe when all is said and done.

In a way VW’s behaviour is understandable (don’t get me wrong I’m not condoning it!)  But it acted in a way that sought commercial advantage and worked under the rules prescribed by Brussels.  The real scandal in my view is the corrosive and corrupting influence of Brussels in this whole saga.

VW has such a long way to go to rebuild trust.  The company now faces massive lawsuits around the world.

But a concerted effort into EVs, and a serious effort to develop and deploy battery technology into their vehicles is the right answer.

CEO Matthias Mueller reckons it’ll take VW two years to recover its ‘shine’.  Lithium battery technology will help them do it.

I reckon it’ll take a bit longer than that.  But if VW is serious in its intent, if it explains what it’s doing and why, and if it can prove that it’s turned over a new leaf, the company has a fighting chance.

VW last week still reported figures that would be the envy of most automakers. The German carmaker made a profit before tax of €3.2bn (£2.4bn) in the three months to March, down from nearly €4bn a year earlier. Revenues were down 3.4% to a mere €51bn.

With VW’s colossal financial horsepower and serious “kick arse” bold moves into lithium battery Gigafactories, and its desire to win the EV car race, it will be a serious global force to reckon with.

There’s nothing like a crisis to focus corporate minds.

Sitting on Germany’s door step is Europe’s biggest lithium deposit at the old mining town of Cinovec in the Czech Republic. There’s reportedly 5.7 million tonnes of Lithium Carbonate Equivalent (that’s technical jargon) already drilled up on the German boarder, with another 3-5 million more tonnes of the stuff to still be drilled up.

That’s $10’s of billions of the magic white Lithium stuff sitting at VW’s feet. Wouldn’t that be an interesting tie up? VW is going to need a hell of a lot of it to fill an €11bn battery factory.

But all in all, VW has been the reluctant victim of the undemocratic, unaccountable and corrupting practices of these unelected EU bureaucrats.  Time for VW to shine!

Electric Car

It’s been a long time coming but electric vehicles – EVs – will soon reach a tipping point and start to overtake petrol cars.   But for that to happen a great leap forward is needed in range and battery technology.

The race is on.

In January this year we heard a slew of announcements about forthcoming EVs.  Every car maker is jumping onto the EV bandwagon.  GM announced the Chevrolet Bolt, rolling off the production line in 2017.  Nissan has announced the Gen II Leaf which we’ll see in 2018.  And Ford are working on the Model E which I expect in 2019.

And that’s not to mention the ludicrously brilliant Tesla range already in production.

But the problem remains – range.  200 miles (the current de facto standard) is simply not good enough.  Those in the business refer to ‘range anxiety’, that dreaded feeling you get when you don’t know whether you’ll make it to the next charging station before you run out of juice.

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Can technology change the world?

Half a century ago we put a man on the moon.  Half a century before that Henry Ford revolutionised the world with the Model T, the first mass produced motor car.  And the Wright brothers took to the air, shrinking the world.

Technology, when I was a kid, was the stuff of dreams.  We devoured stories about inventors, superheroes, and imagined that one day we’d be flying around in jet packs.  Science was what the smart kids studied, and the boffins in lab coats were going to save the world.  We all wanted to be Dr Who.

But something went wrong along the way.

Science seemed to lose its sparkle.  Suddenly the technological marvels were causing more troubles than they solved.  Road deaths.  Health scares.  Cyber crime.  Climate change.

Cate-Blanchett

Last Sunday’s Oscars was the usual glitzy parade of silly grins, gushing speeches and fakery.

Because that’s what acting is – faking it on the screen, with those best at the Hollywood make-believe game walking off with the gongs, cash and fame.

That sounds a bit unfair.  I actually love the movies as much as anybody, and thought it was a great travesty that the incomparable Cate Blanchett missed out on a gong for Carol.

So, fair play to Leonardo and the gang, but the only drama I’m interested in right now is watching so-called experts eat their words.

But that’s another story.

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The Germans are coming and I predict they will win the electric vehicle war.

Our Teutonic friends are famous for their precision engineering and brilliant technology teams, and they are now on target to dominate the EV market with cars we will all want to buy.

Remember that iconic VW TV advert with the Princess Diana lookalike from 1987?

Directed by David Bailey, it shows Diana, aka the leggy model Paula Hamilton, storming out of a mews house, relationship over, petulantly chucking away her wedding ring, pearl necklace, and mink coat.  She hesitates, and instead of throwing her VW keys down the drain keeps hold of them, before driving off in her trusty, reliable Mark II Golf.

“If only everything in life was as reliable as a Volkswagen.”

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Why am I so good looking?

Come on folks, we’ve all been wondering. But don’t think I’m challenging Kylie for the title of fairest Aussie export of them all. I’m talking about rare metals.

Because without them the picture gracing the home page of this blog – which a lot of you are reading on your iPhones – wouldn’t look half so good.

Europium and terbium help make the brilliant colours on your phones stand out and cerium buffs the glass so I don’t look any more craggy than usual. The fact you can see me at all so long after your last charge is thanks to lithium, without which the battery would be so heavy it would make your suit sag like one of Les Patterson’s cast-offs.

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Have you ever tried to count how many battery-powered devices or machines you own?

Have a guess.  10?  20?  50?

Believe me it’s more than you’d think.

The humble battery makes the world go round, and yet we take it for granted.  Without ‘portable power’ we’d have no wireless internet, no mobiles, no cars, no electric torches, no hearing aids, pacemakers, digital watches, or drones.  No Apple, no Sony, no Tesla.

And stand by because the number of devices using batteries is going to skyrocket as the technology improves. Batteries are everywhere.  Can you think of a culture, a country, a religion, a race of people that doesn’t use batteries in some way or another?

But frustratingly there are some annoying flaws with the batteries of yesterday.  Toxic materials, poor charge retention, the dreaded ‘memory effect’, weight, and cost.

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Good to see The Economist and the FT writing about lithium and energy innovation in the past couple of days.

The Economist says that demand for lithium and high-density energy storage is set to soar amidst a global scramble to secure supplies.   The world’s largest battery producers Samsung, LG, Panasonic, Sony, and ATL are hoovering up supplies, as are carmakers such as Toyota and Tesla, and other end users.

Gloomy news if you rely on lithium for your anti-depressant drugs.

In fact, The Economist calls lithium “the world’s hottest commodity”, explaining that the price of 99.5%-pure lithium carbonate imported to China more than doubled in the two months to the end of December, to $13,000 a tonne.  Some even suggest the Chinese spot market may even hit $20,000 in the next few months.

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