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Hino emissions misconduct rattles Toyota partnership

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Hino emissions misconduct rattles Toyota partnership

TOKYO — Toyota Motor Corp. and its president, Akio Toyoda, have spent much of the past year fending off criticism that they are dragging their feet on environmentally friendly electric vehicles. Now, a new emissions scandal is blowing up in Toyoda’s backyard.

Emissions and fuel efficiency improprieties have come to light at Hino Motors, Toyota’s truckmaking subsidiary, that date back as far as 2003. Hino employees fudged the tests on engines used in 643,635 vehicles over the years, with 66,817 of the trucks now subject to recall.

The misconduct, which surfaced in March, snowballed last week when Hino said new problems were discovered in the testing of a light-duty engine, after earlier revelations in other powerplants.

The scandal has forced Hino to suspend most of its shipments in Japan.

But the problem is also driving a wedge between Hino and Toyota, the truckmaker’s biggest shareholder with a 50.1 percent stake. Last week, Toyoda issued a stinging rebuke of Hino as the problem festered, while the company cast doubt on the partnership’s value.

“We are extremely disappointed that Hino has once again betrayed the expectations and trust of its stakeholders,” Toyoda said in the rare public reprimand of a partner company. “We will closely watch whether Hino can be reborn as a company worthy of the trust of its stakeholders.”

The world’s largest carmaker suddenly seems to be questioning the merit of a partnership founded when Toyota bought a controlling stake in 2001.

Similar automaker-truckmaker tie-ups have fallen out of vogue around the industry as carmakers focus on their core passenger products. Nissan sold its truck subsidiary to Volvo in 2007. More recently, Volkswagen spun off its truck and bus unit, now known as Traton, and Daimler separated its truck and car units in 2021.

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The new conventional wisdom is that carmakers need to jettison the extra baggage of heavy commercial vehicles that find little synergy with the mainstay passenger vehicle lineups.

This is especially true in an era when dollars must be stretched for investment in new technologies such as electrification, and when complex corporate structures are increasingly seen as ponderous.

Volkswagen aimed to raise more than $1 billion for electrification by floating shares in Traton.

Toyota Chief Communications Officer Jun Nagata dismissed speculation that Toyota and Hino are headed for divorce.

But he conceded that the companies don’t mesh as well as once hoped.

Toyota’s loose alliances with Mazda, Subaru and Suzuki, connected only by small symbolic cross-shareholdings, center on a shared ambition to make better cars, he said.

Not so with Hino.

“Frankly, we have been unable to get much done in this relationship,” Nagata said, citing a clash in corporate cultures.

“Compared with Toyota, Hino is lacking in a governance structure. What’s more, this problem has a lot to do with Hino’s corporate culture. The company lacks knowledge about legal compliance,” he said.

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“At the end of the day, we have concluded there was not much synergy.”

After Toyota made its public criticisms, things got worse.

Hino was summarily expelled from a newly created, Japan-wide commercial vehicle consortium of Toyota-affiliated companies to speed the industry’s shift to electrification.

Toyota said Hino’s “misconduct” was incompatible with the group’s “aspiration and goals.”

The Commercial Japan Partnership Technologies Corp., or CJPT, was created in 2021 to help transition Japanese commercial vehicle makers for the shift to battery-electric, hydrogen fuel cell and self-driving technologies.

It initially brought together Toyota, Hino and Isuzu, with Toyota agreeing to take a 4.6 percent stake in Isuzu as part of the tie-up. Toyota already held a 50.1 percent stake in Hino.

Suzuki and Daihatsu later joined CJPT to develop electric minivehicles for commercial use.

Hino’s scandal is especially embarrassing for Toyota as critics ding the automaker and its CEO for sticking to an electric-gasoline hybrid vehicle strategy as the industry rushes into pure EVs.

The revelations at Hino echo a spate of final inspection misconduct at other Japanese companies in 2017 and 2018 that tripped up rivals Nissan and Subaru, among others.

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At the time, Toyota was one of the few Japanese automakers untouched by various oversights flagged by regulators.

Last week’s development at Hino was all the more aggravating for Toyota because it came to light during an on-site inspection by Japan’s transportation ministry — not by Hino itself.

In filing for emissions certification, Hino measured emissions only once at a specified measurement point when it should have measured at least twice.

This month, a group of U.S. plaintiffs sued Hino and Toyota in U.S. District Court in Florida, seeking damages on behalf of those who purchased or leased Hino trucks during the 2004 to 2021 model years.

In addition to making large trucks and buses such as the Hino 700 Series heavy-duty truck, Hino assembles the Toyota Land Cruiser Prado and formerly made the popular Toyota FJ Cruiser, both with Toyota engines.

The emissions flap will be a big test for Hino’s new president, Satoshi Ogiso, 61.

Ogiso is a Toyota veteran who once led the company’s prestigious portfolio of Prius hybrid cars. A well-respected engineer, Ogiso was dispatched to lead Toyota Group supplier Advics, before returning to Toyota to head commercial vehicles. Ogiso took the helm of Hino in June 2021 to lead the truckmaker into an era of carbon neutrality.

Ogiso was in the job for less than a year when the scandal blew up.

“Unless Hino employees are resolved to change their corporate culture from deep down,” Nagata said, “things will be quite difficult, no matter what kind of turnaround plan Hino draws up.”

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Tesla autopilot recalls: 2 million vehicles need to have their defective systems fixed

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Tesla autopilot recalls: 2 million vehicles need to have their defective systems fixed

DETROIT (AP) — Tesla is recalling nearly all vehicles sold in the U.S., more than 2 million, to update software and fix a defective system that’s supposed to ensure drivers are paying attention when using Autopilot.

Documents posted Wednesday by U.S. safety regulators say the update will increase warnings and alerts to drivers and even limit the areas where basic versions of Autopilot can operate.

The recall comes after a two-year investigation by the National Highway Traffic Safety Administration into a series of crashes that happened while the Autopilot partially automated driving system was in use. Some were deadly.

The agency says its investigation found Autopilot’s method of making sure that drivers are paying attention can be inadequate and can lead to “foreseeable misuse of the system.”

The added controls and alerts will “further encourage the driver to adhere to their continuous driving responsibility,” the documents said.

But safety experts said that, while the recall is a good step, it still makes the driver responsible and doesn’t fix the underlying problem that Tesla’s automated systems have with spotting and stopping for obstacles in their path.

The recall covers models Y, S, 3 and X produced between Oct. 5, 2012, and Dec. 7 of this year. The update was to be sent to certain affected vehicles on Tuesday, with the rest getting it later.

Shares of Tesla slid more than 3% in earlier trading Wednesday but recovered amid a broad stock market rally to end the day up 1%.

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The attempt to address the flaws in Autopilot seemed like a case of too little, too late to Dillon Angulo, who was seriously injured in 2019 crash involving a Tesla that was using the technology along a rural stretch of Florida highway where the software isn’t supposed to be deployed.

“This technology is not safe, we have to get it off the road,” said Angulo, who is suing Tesla as he recovers from injuries that included brain trauma and broken bones. “The government has to do something about it. We can’t be experimenting like this.”

Autopilot includes features called Autosteer and Traffic Aware Cruise Control, with Autosteer intended for use on limited access freeways when it’s not operating with a more sophisticated feature called Autosteer on City Streets.

The software update will limit where Autosteer can be used. “If the driver attempts to engage Autosteer when conditions are not met for engagement, the feature will alert the driver it is unavailable through visual and audible alerts, and Autosteer will not engage,” the recall documents said.

Depending on a Tesla’s hardware, the added controls include “increasing prominence” of visual alerts, simplifying how Autosteer is turned on and off, and additional checks on whether Autosteer is being used outside of controlled access roads and when approaching traffic control devices. A driver could be suspended from using Autosteer if they repeatedly fail “to demonstrate continuous and sustained driving responsibility,” the documents say.

According to recall documents, agency investigators met with Tesla starting in October to explain “tentative conclusions” about the fixing the monitoring system. Tesla did not concur with NHTSA’s analysis but agreed to the recall on Dec. 5 in an effort to resolve the investigation.

Auto safety advocates for years have been calling for stronger regulation of the driver monitoring system, which mainly detects whether a driver’s hands are on the steering wheel. They have called for cameras to make sure a driver is paying attention, which are used by other automakers with similar systems.

Philip Koopman, a professor of electrical and computer engineering at Carnegie Mellon University who studies autonomous vehicle safety, called the software update a compromise that doesn’t address a lack of night vision cameras to watch drivers’ eyes, as well as Teslas failing to spot and stop for obstacles.

“The compromise is disappointing because it does not fix the problem that the older cars do not have adequate hardware for driver monitoring,” Koopman said.

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Koopman and Michael Brooks, executive director of the nonprofit Center for Auto Safety, contend that crashing into emergency vehicles is a safety defect that isn’t addressed. “It’s not digging at the root of what the investigation is looking at,” Brooks said. “It’s not answering the question of why are Teslas on Autopilot not detecting and responding to emergency activity?”

Koopman said NHTSA apparently decided that the software change was the most it could get from the company, “and the benefits of doing this now outweigh the costs of spending another year wrangling with Tesla.”

In its statement Wednesday, NHTSA said the investigation remains open “as we monitor the efficacy of Tesla’s remedies and continue to work with the automaker to ensure the highest level of safety.”

Autopilot can steer, accelerate and brake automatically in its lane, but is a driver-assist system and cannot drive itself, despite its name. Independent tests have found that the monitoring system is easy to fool, so much that drivers have been caught while driving drunk or even sitting in the back seat.

In its defect report filed with the safety agency, Tesla said Autopilot’s controls “may not be sufficient to prevent driver misuse.”

A message was left early Wednesday seeking further comment from the Austin, Texas, company.

Tesla says on its website that Autopilot and a more sophisticated Full Self Driving system are meant to help drivers who have to be ready to intervene at all times. Full Self Driving is being tested by Tesla owners on public roads.

In a statement posted Monday on X, formerly Twitter, Tesla said safety is stronger when Autopilot is engaged.

NHTSA has dispatched investigators to 35 Tesla crashes since 2016 in which the agency suspects the vehicles were running on an automated system. At least 17 people have been killed.

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The investigations are part of a larger probe by the NHTSA into multiple instances of Teslas using Autopilot crashing into emergency vehicles. NHTSA has become more aggressive in pursuing safety problems with Teslas, including a recall of Full Self Driving software.

In May, Transportation Secretary Pete Buttigieg, whose department includes NHTSA, said Tesla shouldn’t be calling the system Autopilot because it can’t drive itself.

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AP Technology Writer Michael Liedtke contributed to this story.

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Ford to build $3.5B electric vehicle battery plant in Mich.

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Ford to build $3.5B electric vehicle battery plant in Mich.

Ford Motor Co. plans to build a $3.5 billion factory in Michigan that would employ at least 2,500 people to make lower-cost batteries for a variety of new and existing electric vehicles.

The plant, to be built on land being readied for industrial development about 100 miles (160 kilometers) west of Detroit, would start making batteries in 2026. It would crank out 35 gigawatt hours worth of batteries, enough to supply 400,000 vehicles per year, Ford said.

The factory near the city of Marshall would produce batteries with a lithium-iron-phosphate chemistry, which is cheaper than the current nickel-cobalt-manganese chemistry now used in many EV batteries.

Consumers could then choose between a battery with lower range and cost, or pay more for higher range and power. The company wouldn’t give any prices just yet.

“The whole intent here is to make EVs more affordable and accessible to customers,” said Marin Gjaja, chief marketing officer for Ford’s electric vehicles.

Ford says a wholly owned subsidiary would own the factory and employ the workers. But China’s Contemporary Amperex Technology Co. Limited, or CATL, which is known for its lithium-iron-phosphate expertise, would supply technology, some equipment and workers.

The announcement comes at a time when U.S.-China relations are strained, and the Biden administration is offering tax credits for businesses to create a U.S. supply chain for EV batteries. To get a full $7,500 per vehicle U.S. tax credit to customers, EV batteries won’t be able to have metals or components from China in them.

Ford is hoping that the structure of the deal will defuse criticism of spending tax incentive money on a joint-venture factory that would be part-owned by a Chinese company. Last month the state of Virginia dropped out of the race for the same Ford plant after Gov. Glenn Youngkin characterized the project as a “front” for the Chinese Communist Party that would raise national security concerns. At the time Virginia had not offered an incentive package to Ford.

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The company expects to take advantage of U.S. factory tax credits, and says that buyers initially would get at least $3,750 in tax credits because the vehicles are produced in North America. Gjaja said that over time they could get the full $7,500 credit depending on sourcing of battery minerals.

Lithium-iron-phosphate batteries would go into standard-range versions of Ford’s EVs. For instance, the lowest price Mustang Mach-E electric SUV would get an LFP battery and would be able to travel 247 miles per charge. The long range version of the Mach-E will have a nickel-cobalt-manganese chemistry that takes it to 310 miles per charge.

The plant was revealed Monday at a meeting of the Michigan Strategic Fund, which approved a large tax incentive package for the project near the junction of Interstates 94 and 69.

About $210 million came from Michigan’s Strategic Outreach and Attraction Reserve Fund, known as SOAR, set up to lure industry and jobs to the state. But the total size of the incentive package wasn’t clear.

The SOAR Fund has received nearly $1.8 billion from the state’s general fund since it was first created in December of 2021.

A tax-relief bill passed in the Michigan House last week could send up to $1.5 billion over three fiscal years to the SOAR Fund in addition to an $800 million one-time deposit that Gov. Gretchen Whitmer outlined in her budget proposal last week.

The tax-relief bill, which still needs state Senate approval, has been heavily criticized by Republicans for giving too little to taxpayers and too much to large corporations.

Last summer, Ford announced that CATL will make lithium-iron-phosphate battery packs for Mustang Mach-E electric SUVs in North America this year and for F-150 Lightning electric trucks early in 2024 “creating more capacity for high-demand products.” The batteries at first would come from China, then be switched to the Michigan plant in 2026, Ford said.

The company expects to be able to produce electric vehicles at a rate of 600,000 per year by late this year.

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Whitmer said the plant will bring “generational opportunities” for west Michigan families. It will “make sure that production lines aren’t stalled by global shocks or shipping delays,” she said.

Lithium-iron-phosphate batteries already are in use in consumer electronics and some competitors’ vehicles, but all the batteries are imported, said Lisa Drake, vice president of industrialization for Ford’s electric vehicles.

“This project is aimed at de-risking that by actually building out the capacity and capability to scale this technology in the United States,” with Ford controlling the manufacturing and the workforce.

Conrad Layson, senior analyst with AutoForecast Solutions, says the new battery factory could supply multiple Ford models. “As Ford increases the number of all-electric nameplates, the output from this factory could be used to make lower-cost versions of those future all-electric Ford vehicles,” he said.

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Associated Press Writer Corey Williams contributed to this report.

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Tesla hikes price of Model Y after US alters tax credit rule

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Tesla hikes price of Model Y after US alters tax credit rule

DETROIT (AP) — Tesla has raised prices on its Model Y in the U.S., apparently due to rising demand and changes in U.S. government rules that make more versions of the small SUV eligible for tax credits.

The Austin, Texas, electric vehicle company bumped up the price of the Model Y Long Range version by about 2% to $54,990 and the Performance version by about 2.7% to $57,990, according to its website. The prices exclude shipping and an order fee.

The moves, made Friday, come three weeks after Tesla cut prices nearly 20% on some versions of the Model Y, the company’s top-selling vehicle. The price cuts were made to boost sagging demand, and also to make more versions of the Model Y eligible for the $7,500 electric-vehicle tax credit in the Inflation Reduction Act. The full tax credits will be available at least into March.

On Friday, The Treasury Department revised vehicle classification definitions to make more EVs — including SUVs made by Tesla, Ford and General Motors — eligible the full $7,500.

The change came after lobbying by automakers that had pressed the Biden administration to change vehicle definitions to allow higher priced vehicles to qualify for a maximum credit. Tesla CEO Elon Musk met with top aides to President Joe Biden last week to discuss the EV industry and the broader goals of electrification.

Under the sweeping law approved last summer, pickup trucks, SUVs and vans with a sticker price up to $80,000 qualify for EV tax credits, while new electric cars, sedans and wagons can only be priced up to $55,000. The rule had disqualified some higher-priced SUVs, such as GM’s Cadillac Lyriq and some versions of the Model Y, prompting complaints from Tesla and other automakers.

The January price cuts apparently worked. On Tesla’s earnings conference call last week, CEO Elon Musk said that so far in January the company had seen the strongest number of orders year-to-date in company history. He also said the company had raised the Model Y price “a little bit in response to that.”

After Tesla’s price cuts, Ford responded by reducing the price of its Mustang Mach-E, in part to qualify for the tax credit and also to spur buyer interest. But crosstown rival General Motors said it had no plans to cut EV prices.

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The EV tax credits are among a host of changes enacted in the Inflation Reduction Act, which Congress approved in August with only Democratic votes. The law is designed to spur EV sales as part of a broader effort to reduce planet-warming greenhouse gas emissions.

But a complex web of requirements, including where vehicles and batteries must be manufactured to qualify, has cast doubt on whether buyers can receive the full $7,500 credit.

The Treasury Department said Friday that it hopes to make it easier for consumers to know which vehicles qualify for the credit. Under the revised rule, vehicle classifications will be determined by a consumer-facing fuel economy labeling standard, rather than a more complicated formula set by the Environmental Protection Agency, Treasury said.

A message was left Saturday seeking comment from Tesla on the price increases. The increases were reported Friday night by Bloomberg News.

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