Carlos Ghosn was never one to pull his punches. Even at the peak of his power at the helm of one of the world’s largest automakers, he always had a lot to say. So following his daring escape from Japanese prosecution for alleged financial crimes, nobody should have expected the former Nissan-Renault boss in exile to just chill on a yacht somewhere. (Well, he had one, but he had to give it back.)
Now, Ghosn is back in the public eye to weigh in on Nissan’s potential merger with Honda, and he hasn’t lost his fiery touch. That kicks off this Friday edition of Critical Materials, our morning roundup of auto industry and tech news. Also on tap: a Tesla recall that you should know about (but one of the over-the-air sort,) and possible news about a Tesla Cybercab deployment in Austin. Let’s dig in.
Panic! At The Nissan-Honda Merger Talks
You may not care what Ghosn has to say about Nissan—or anything—anymore, especially since he hasn’t been involved with the automaker since his 2018 arrest in Japan and subsequent flight from prosecution about a year after that. But I’d argue few people on earth know Nissan like Ghosn does. And few people know about mergers to save Nissan like Ghosn does.
After all, Ghosn was a top executive at Renault in 1999 when it formed the Nissan-Renault Alliance, an odd cross-continental team-up that rescued Nissan was on the brink of bankruptcy. Nissan’s problems back then should sound familiar: an unsustainable focus on volume, forgettable models, a hangover from a financial crisis, and so on. He would soon lead both companies to a surprising degree of financial and sales success until his downfall.
Now, Nissan is in crisis again. It’s the poster child for how far behind the Japanese auto industry is technologically, and for how much ground it’s losing to new, high-tech players in China. Japan Inc. needs capital and expertise to deliver a future focused on batteries and software, and Honda—despite being in much better shape these days—has been called up on to help make that happen. Merger talks could start as soon as Monday, according to reports.
But Ghosn told Bloomberg he doesn’t see the point:
“It’s a desperate move,” Ghosn said Friday on Bloomberg Television. “It’s not a pragmatic deal because frankly, the synergies between the two companies are difficult to find.”
Nissan and Honda operate in the same markets with similar brands and products, Ghosn said, casting doubt on the merits of the two combining. He believes Japan’s Ministry of Economy, Trade and Industry has pushed Honda to go forward with a deal.
“They’re trying to figure out something that could marry the short-term problems of Nissan and the long-term vision of Honda,” Ghosn said. While there is “no industrial logic” to a deal, “there is a moment where you have to choose between performance and control.”
It’s also worth noting here that Ghosn is hardly some benevolent, unbiased actor. He has maintained both his innocence and a huge axe to grind against Nissan since his departure, and has spent the years since railing against the automaker’s management and failures in the marketplace.
But he’s right that synergies are hard to find here—in Nissan and Renault’s case, the alliance was a tight partnership between two giants that often operated in very different markets and wasn’t an outright merger. (Neither Japan nor the French government, which partially owns Renault, ever seemed good with that.) But Honda and Nissan are direct competitors basically everywhere and in every segment. How does this make sense for Honda, in particular?
Ghosn also addressed the reports that this merger was prompted by interest in Nissan from Taiwanese electronics giant (and iPhone manufacturer) Foxconn, which has wanted to get into the carmaking game for some time. The current thinking by many industry watchers is the Japanese government is moving this along to protect some of its most important companies from foreign control. But Ghosn warned Foxconn will be back, somewhere:
“I can understand that a company like Foxconn — headed by very serious and realistic management — is going to say, ‘You know what, instead of us investing to do our own electric car, let’s buy a car company,” Ghosn said. “They’re not going to be the only one to try to do that.”
We’ll know more as this reportedly starts to play out next week.
60%: Tesla Recall For Tire Sensors
Hey, Tesla owners: you may own one of the 700,000 models affected by a new recall. Luckily, this one’s an over-the-air update. Here’s what to know from the Associated Press:
According to a letter Thursday from the National Highway Traffic Safety Administration, the recall includes certain 2024 Cybertruck, 2017-2025 Model 3, and 2020-2025 Model Y vehicles.
The issue is that the tire pressure monitoring system warning light on the vehicles may not remain illuminated between drive cycles, failing to warn the driver of low tire pressure. Driving with improperly inflated tires can increase the risk of a crash.
Are OTA updates “recalls”? I say if they fix a problem, I have no issue with that phrasing.
90%: Tesla Cybercab May Be Headed To Austin
Photo by: InsideEVs
Tesla Cybercab, LA Auto Show 2024
It’s not uncommon to see Google’s Waymo driverless cars zooming around tech-crazed Austin these days. But if Tesla CEO Elon Musk gets his way, Austin could eventually see Tesla Cybercabs on its roads too. Here’s one more from Bloomberg:
Emails acquired by Bloomberg through public records requests show a Tesla employee has been communicating with the city of Austin’s autonomous vehicle task force since at least May to establish safety expectations for the vehicles as the company decides if Austin will be the first Texas city where Tesla deploys driverless fleets.
“Tesla is still working to strategically find a city within Texas to deploy… The city of Austin is obviously on our roadmap, but has not yet been decided where we will deploy first as we have many options available,” a November email from the employee said.
A successful rollout is key to Tesla as Chief Executive Officer Elon Musk has increasingly bet the company’s future on autonomous technology and robotaxis, but the needed approvals could be years away. A number of competitors have already deployed driverless cars on public roads in select cities.
But Austin’s own mayor has been a critic of the technology too, and as the story notes, Texas isn’t necessarily the regulatory free-for-all that you might expect it to be:
In Texas, where autonomous vehicles are regulated much like any other car and cities do not set regulations, Tesla will face few regulatory hurdles. Companies must have insurance, be able to follow traffic laws and be equipped with video recording devices. Robotaxis must have their own licensing, and the Texas Department of Licensing and Regulation has yet to list Tesla as a licensee.
Still, testing the Cybercabs—which will controversially rely on cameras and AI instead of Lidar and other advanced sensor suites like Waymo’s cars—in the warm-weather home of Tesla makes a lot of sense for the company. I would not be shocked at all if testing begins there as early as next year.
100%: How Do You Feel About Robotaxis In Your City?
Photo by: InsideEVs
You may live with them already if you’re in Los Angeles, Phoenix, San Francisco or Austin. Are you fine with them being in your town, or coming to them eventually? What safeguards would you want if they were to hit your streets?
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