Volvo Is On The Upswing

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Volvo’s future is looking bright after a positive trading debut, Toyota’s first battery-electric crossover will have respectable range, and Tesla can count Singapore among its string of successes. All that and more in this Friday edition of The Morning Shift for October 29, 2021.


1st Gear: Plucky Swedish Startup Notches Promising IPO

I can’t help but find it amusing every time a brand that’s existed for the better part of a century goes public for the first time — it’s basically the Steve Buscemi “how do you do, fellow kids” meme in business form. Volvo has the right to pat itself on the back, though, since it raised $2.3 billion upon its initial public offering on Friday morning. From Bloomberg:

The shares jumped as much as 22% in Stockholm and traded at 63 kronor as of 12:45 p.m., above the listing price of 53 kronor. The IPO valued the carmaker owned by China’s Zhejiang Geely Holding Group Co. at 158 billion kronor, according to a statement.

The successful debut follows Volvo Cars’ move to cut the size of its offering by a fifth and price it at the bottom of an initial range after investors balked at the prospect of Geely retaining a hold on to the bulk of the voting rights. The Chinese firm eventually agreed to loosen its grip on the automaker.

Even at the reduced size, Volvo Cars’ IPO ranks among Europe’s top deals this year and is an important barometer of investor appetite for the transition to electric vehicles. It’s also Sweden’s biggest sale since telecom operator Telia Co AB went public in 2000.

Volvo had actually walked back its projected IPO by about a fifth earlier in the week, amid investors’ concern over ongoing supply chain woes and the glut of electric brands on the market these days. But the Geely-owned automaker has pivoted to EVs more swiftly than its luxury peers, even if it’s been a little overzealous on pricing. Then again, so has everyone else in 2021. Can you blame them?

2nd Gear: Fewer Cars, More Money

That provides an excellent segue into this story from the Financial Times, which once again reminds us that in a hyper-demand market, shortages of components and raw materials and a bottleneck in manufacturing isn’t really a huge problem, especially for German luxury marques. Just look at Mercedes-Benz:

Mercedes-Benz owner Daimler defied the semiconductor crisis to increase earnings by a fifth in its latest quarter, despite delivering almost 145,000 fewer vehicles than it did in the pandemic-ridden months last year.

The Stuttgart-based company had prioritised more profitable models, chief financial officer Harald Wilhelm said, helping it to report just under €2.6bn in net profit for the three months to the end of September, compared with almost €2.2bn in the same period in 2020.

“Despite considerably lower production and sales … we significantly improved our top line quality at Mercedes-Benz cars and vans with better product mix and optimised pricing,” Wilhelm told analysts on Friday.

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“Optimized pricing” is a really soft, diplomatic way of explaining a 20 percent rise for the average new Mercedes purchase. Of course, M-B is not the only one — not by a long shot:

Porsche, which belongs to the VW Group, said it had exceeded its profit margin target of 15 per cent so far this year, despite a backlog of 10,000 orders for its flagship electric Taycan model because of the shortage of crucial chips and components.

VW’s premium brand Audi, meanwhile, which delivered almost 24 per cent fewer cars in the last quarter in comparison with last year, also raised its revenue and profit guidance for the year, although operating profits fell to €740m, from €864m, in the three months to the end of September.

“Thanks to a strong operating performance, a favourable price position, and continuation of cost discipline, it was possible to largely compensate for volume lost because of the semiconductor crisis,” the Bavarian marque said.


I keep expecting automakers will soon find the limit people are willing to pay, but it’s just not happening.

3rd Gear: Which EV Goes 300 Miles And Has A Yoke?

Probably not the one you’re thinking of! Today Toyota revealed more details behind its bZ4X crossover it’s co-developing with Subaru. The Japanese automaker has promised a range of 300 miles and a steer-by-wire system that will allow buyers to choose either a conventional steering wheel or a yoke, because it’s 2021 and Tesla’s worst ideas must always be copied. From Automotive News:

The bZ4X will offer two steering options. One is the traditional circular steering wheel. The other is a newfangled Formula One-styled wing-shaped handle that connects via a steer-by-wire technology. Toyota calls this the “one-motion grip” setup and said it will be introduced in China and then rolled out to other markets from 2022, although it didn’t specify which ones.

Toyota says the one-motion control eliminates the need to change grips when negotiating U-turns, garage parking or winding roads. The steer-by-wire system also eliminates annoying vibration from the road that normally transmits through a mechanical steering column.

And because there is no steering column, it also allows for more legroom.

I suppose a yoke would be fine if it’s designed in such a way that hand-over-hand movement is negated. Still, it’s kind of solving a problem that doesn’t really exist.


The bz4X will be available with a 71.4 kWh pack that offers 310 miles of range in front-wheel-drive guise, or 285 miles in a dual-motor all-wheel drive configuration. The dual-motor variant promises a 0-62 MPH time of under eight seconds.

4th Gear: Tesla Claims Another Hard-To-Claim Market

Cars are very, very expensive in Singapore — like nearly four times more expensive than what you’d pay here in the States. A Tesla Model 3 that would normally cost $40K in the States is more like $148,000 over there. This would seem to hamper the market penetration of a luxury automaker like Tesla, but it hasn’t, as the company’s sales have surged in the region as of late. From Reuters:

This week, Tesla surpassed $1 trillion in market value, overshadowing the combined value of five of its biggest rivals, Toyota Motor Corp, Volkswagen AG, Daimler AG, Ford Motor Co and General Motors.

The number of new Teslas on Singapore roads has risen more than ten-fold to 487 in the third quarter, from just 30 in the first half, data from Singapore’s Land Transport Authority showed.

“I bought the car because I’m a supporter and shareholder of the company,” said software engineer Tim Shim, who reserved a Model 3 five years ago but received just recently as sales began this year in the city-state.


Reuters notes that the manufacturer’s third-quarter success has placed it as the sixth-most popular car brand in Singapore, ahead of the likes of Nissan, Audi and Kia. As to what Tesla can owe its recent spike in popularity, EV subsidies may have something to do with it. While cars in Singapore happen to be extremely pricey, their incentives are amusingly robust to match:

Experts say there is no single cause for the surge, although Singapore did announce this year up to S$45,000 subsidy for buyers of electric cars. Because Tesla seems to have fared better than other companies at weathering supply chain issues, it may simply be able to deliver more cars than competitors.


5th Gear: F1 Team Bosses Determine Disliked Rule Is Nevertheless The Best Solution

Formula 1 is a sport chock full of regulatory compromises, in that teams and drivers dislike many aspects of its ruleset but simultaneously can’t agree on better solutions to complaints about how qualifying should be run and how damages incurred during races should be contextualized under the cost cap.


The latest subject of their ambivalence is the restriction on the number of power units per car, per season. These result in grid-place penalties for drivers who exceed the limit, but many have argued that it’s not really fair for a competitor to be shuffled to the back of the pack for a consumable part of their car being, well, consumed. Unfortunately, the likes of Mercedes’ Toto Wolff and McLaren’s Andreas Seidl have conceded that although the rules suck as they are, there’s no good alternative so they’ll probably be here to stay. From

“I think the penalty system on power units is pretty robust,” [Wolff] said when asked by if it was time to revisit the concept of grid penalties.

“Because what we need to avoid is that we are building power units in a way that they perform at peak performance for only a few races.

“And if you change regulations, and you say okay, there is no grid penalty for the driver, but just constructor points, it will still mean that teams, if you’re in a fight for a driver championship, will just throw engines at that car.

“I think if we come up with good solutions definitely it is worth looking at. It’s confusing for the new fans why, out of the driver’s responsibility, an engine penalty puts him at the back of the grid, or 10 or five places away. And that’s clearly not great, but I haven’t got the solutions.”


“That’s clearly not great, but I haven’t got the solutions” is going to be my daily mantra from here on out. Seidl pretty much shared that opinion:

“I obviously get the point that it is not ideal having all these penalties,” [Seidl] said when quizzed on the topic by

“But to be honest, I do not really see a straightforward solution to that because for example if you will decide let’s go to four engines engine instead of three. We will end up all with five engines, because we would just crank up the engines.”

“In the end, it just shows that all the manufacturers teams are pushing each other so hard that we all push the technology we’re using to the absolute limit or beyond and that’s what ends then in issues or problems. So we simply have to accept that at the moment, and get on with it.”


I don’t hate the penalties to be honest; it makes for an interesting wrinkle to the title fight when Max or Lewis has to take a start on the chin late so late in the season, as we’ve seen. Is it fair? Probably not, but don’t forget that F1 tried double points once for the final round of the 2014 campaign, then quickly abandoned it. The show, as ever, triumphs all.

Reverse: The Future Of Motoring, Today

The 27th Tokyo Motor Show opened its doors on this day in 1987, 34 years ago. The Tokyo Motor Show has always been the world’s best automotive exhibition — of that I am certain — and ’87 was a banner year for it, as Japan was still in the midst of its wildly innovative Bubble Economy. As such, Toyota introduced the EXV-II concept that previewed what would later be known as the Sera, and Mitsubishi pulled the covers off the first HSR that would eventually inform the technological tour-de-force we’d come to know as the GTO, or 3000GT.


Plus, you know what else abbreviates to TMS? The Morning Shift!


Neutral: What’s The Optimal Amount Of Power?

This week I drove a couple BMWs at the automaker’s test day in California. One of the models on offer was the Alpina B8 which, with 612 horsepower, instantly became the fastest car I’ve ever driven. That much power is meaningless — utterly pointless. It makes going 40 over the speed limit thoughtless. I don’t know what I would do with anything that fast on a daily basis. I felt more in my element with the new M240i, which I am legally barred from discussing in detail yet but will be able to in a few weeks. That has 380 HP — much more usable. What’s the sweet spot for you in terms of power and performance from a fun car? (Editor’s note: It’s 300.)

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