Tag: daimler

Daimler Getting Back Into Bed With Chrysler for Battery Biz

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Daimler is getting cozy with Chrysler again, or at least the American side of Stellantis, so they can tackle battery development and production. Those in the know will recall that Chrysler has been passed around more than a bottle of booze at a middle school party. But its long history of partnerships also kept it in business and resulted in some of its better products.

Before the Amero-French merger that resulted in Stellantis, Fiat Chrysler Automobiles was an Italian-American company with facilities dotted around North America. Prior to that, it was known as DaimlerChrysler – resulting in the LX Platform, Pentastar V6, and a wider variety of Jeep Wranglers. Now, Chrysler’s alienated German wife has shown up on the doorstep with a wad of cash and news that she’ll be investing it into the new battery business. 

Daimler has purchased a 33 percent stake of Automotive Cells Company (AAC), which was established and uncreatively named by Stellantis and TotalEnergies, in a bid to ensure Europe parent isn’t left behind in the electric revolution.

“Mercedes-Benz pursues a very ambitious transformation plan and this investment marks a strategic milestone on our path to CO2 neutrality. Together with ACC, we will develop and efficiently produce battery cells and modules in Europe – tailor-made to the specific Mercedes-Benz requirements,” Ola Källenius, CEO of Daimler AG and Mercedes-Benz AG, explained. “This new partnership allows us to secure supply, to take advantage of economies of scale, and to provide our customers with superior battery technology. On top of that we can help to ensure that Europe remains at the heart of the auto industry – even in an electric era: With Mercedes-Benz as a new partner, ACC aims to more than double capacity at its European sites to support Europe’s industrial competitiveness in the design and manufacturing of battery cells.”

From Daimler:

The entire ACC project will require an investment volume of more than seven billion euros – in a combination of equity, debt and subsidies – to reach a capacity of at least 120 Gigawatt hours in Europe by the end of the decade. Mercedes-Benz will invest a mid-three-digit-million euros amount next year. In total, the investments are expected to remain below one billion Euros. The transaction is subject to customary closing conditions, including agreement on definitive documentation and regulatory approvals.

The German automaker would like to scale up the development and production of next-generation battery cells and modules so it can keep its promise of being an all-electric company by 2030. However, it said it needs a total battery production capacity of more than 200 Gigawatt hours by that time, requiring it to build at least eight facilities and engage in numerous partnerships.

Following Daimler’s formal investment, the company will have an even 33 percent equity stake in ACC – giving it two of the six Supervisory Board seats and equal footing with Total and Stellantis. It’s expected that hardware will begin manifesting within the next couple of years and be shared among the three companies. For now, Daimler will be providing its “technical and production know-how” to help spur development. But more direct involvement is anticipated when the automaker finishes its Drive Systems Campus finishes construction in 2023, with additional European facilities to be considered later.

[Image: Pixfly/Shutterstock]

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Cash in Your Chips: Automakers Ask FTC to Seek Appeal After Losing Qualcomm Case

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Frequently on the cutting edges of technology, the automotive industry has been slamming chips into vehicles to facilitate communications ever since General Motors launched OnStar back in 1996. This evolved into cars boasting reliable navigation systems and remote vehicle diagnostics until they literally started becoming mobile internet hot spots.

Now the industry wants to further ingrain connectivity by equipping all vehicles with 5G — opening the road for new features and the ability to harvest your personal data more effectively.

This has required deals with tech chip manufacturers like Qualcomm, which requires companies to sign a patent license agreement before actually selling any of its hardware or software. But regulators around the globe worried the practice may be monopolistic, violating antitrust laws. The Federal Trade Commission (FTC) brought a case against the business in 2017. Despite winning that case in 2019, a U.S. appeals court overturned the decision earlier this month, deciding Qualcomm could continue conducting business as usual. Now, tech companies (mainly Qualcomm rivals) and a gaggle of automakers are urging the FTC to seek an appeal following the loss.

In May of 2019, U.S. District Judge Lucy Koh in San Jose, California sided against Qualcomm after stating it had engaged in extensive anti-competitive behavior against smartphone makers and automakers in need of chip modems, threatening to withhold suppliers and service if it didn’t like the way it bundled the fees associated with wireless patents.

She decided the best course of action was to issue an injunction limiting Qualcomm’s business practices, ordering it to renegotiate the licensing agreements.

However, the Court of Appeals for the Ninth District overturned that ruling in August of 2020 after deciding there wasn’t enough evidence against the chip manufacturer. “We decline to ascribe antitrust liability in these dynamic and rapidly changing technology markets without clearer proof of anticompetitive effect,” Consuelo M. Callahan, circuit judge for the ninth district, explained.

According to Reuters, the automotive sector is concerned that giving Qualcomm a pass will increase the price of their products. It also diminishes an automaker’s ability to have control over the equipment installed into vehicles to network them, though that aspect has been downplayed in both the courts and the press.

From Reuters:

Automakers have increasingly put chips in vehicles to connect them to the internet, which requires them to sign patent agreements for communications standards such as 5G. The companies had previously argued that connected car prices could go up if Qualcomm won its case.

Qualcomm won its appeal of that ruling before the U.S. Ninth Circuit Court of Appeals in an Aug. 11 ruling by a three-judge panel. In a letter sent Monday, the automakers, as well as Qualcomm rivals Intel Corp and MediaTek Inc, urged the FTC to seek an “en banc” rehearing of the case by the full appeals court.

“If allowed to stand, the panel’s decision could destabilize the standards ecosystem by encouraging the abuse of market power acquired through collaborative standard-setting,” the group said.

In addition to tech companies and cell-phone manufacturers, the letter was signed by Tesla Inc, Ford Motor Co, Honda Motor Co and Daimler AG.

“This decision would endanger domestic competitiveness, as well as weaken the ability of the FTC to protect consumers through future enforcement actions,” reads the letter. “Qualcomm’s licensing practices reinforced its product monopoly, excluded rivals, and harmed the competitive process.”

Ironically, loads of the names that have signed on to ask the FTC to keep up the fight seem to have flirted with monopolistic practices themselves. But wanting to buy a product from a company like Qualcomm and then not wanting to be smacked with licensing fees or restrictions on how its utilized seems a fair request. Hopefully automakers remember that as they roll out egregious concepts (like placing already-equipped features behind a paywall using the same 5G technology they’re fighting for now) — because several of the automakers included in the letter are already flirting with the concept.

[Image: Michael Vi/Shutterstock]