Tesla Developing a Mercedes Electric Vehicle

Amid reports of losses and progress by Tesla Motors to develop its own lineup of electric vehicles comes news that the carmaker is also helping Mercedes-Benz to develop its own EV.

In Tesla's latest filing with the Securities and Exchange Commission, the electric startup says it is fully developing a powertrain for a new all-electric Mercedes vehicle. Tesla will design the electric motor, gearbox, inverter and software that will go into the EV, according to the filings.

This project is separate from another one in which Tesla is contracted to give 1,000 lithium-ion battery packs to Mercedes. In exchange, Mercedes made a large investment in Tesla and now owns about 10% of the company.

Tesla continues to help develop an electric powertrain for the Toyota RAV4 EV, which is scheduled to go into production in the middle of this year.

Tesla also announced year-end revenue of $204 million, up 75% from 2010. Despite bringing in more money, Tesla lost about $254 million in 2011, which is a 65% increase in losses compared with 2010. Tesla expects revenue to increase significantly in 2012 once the Tesla Model S goes on sale. The company forecasts year-end revenue to increase to around $550 million to $600 million, with most of the money coming from the latter half of 2012.

Nevada Prepares for Self-Driven Cars

The state of Nevada is preparing for the day when self-driving cars move from the world of sci-fi to real life, the Associated Press reports. It recently became the first state to create regulations for companies interested in testing self-driven cars on public roads.

The state acknowledges that automakers aren't close to getting this technology to market, but Nevada wants to have laws in place when -- and if -- it happens. Regulations approved by state officials include requiring companies to secure a bond of $1 million to $3 million, detail their specific plans and intended test locations, and provide all collected data to the state. Nevada also requires that during testing, two passengers will always be in the car, in case one needs to override the controls.

Cars.com News Briefs: Feb. 17, 2012

Here's what we have our eye on today:

• Republican presidential candidate Rick Santorum echoed rival candidate Mitt Romney's opposition to the federal government's $85 billion auto bailout. With the GOP's Michigan primary just 11 days away, Santorum told the Detroit Economic Club that the private sector would have reacted to restructure GM and Chrysler without government intervention. Bloomberg Businessweek reports that Santorum places the highest blame on President George W. Bush, who kicked off the bailouts with money from 2008's Troubled Asset Relief Program and says he'd do it again. Former Obama auto czar Steve Rattner said last Tuesday the notion of either automaker finding private bankruptcy funding was, at the time, "utterly fantastical."
• Meanwhile, GM's $9.2 billion in global profits, reported yesterday, will have hourly union workers reaping profit-sharing bonuses of up to $7,000. Bloomberg News reports that figure is at an all-time high; last year's United Auto Workers earned on average $4,300 in profit bonuses. Ford and Chrysler also gave bonuses to their hourly workers — about $6,200 promised from Ford, and $1,500 already disbursed from Chrysler — leading analysts to expect economic gains in union-rich states as employees spend some of their checks.
• GM CEO Dan Akerson told analysts yesterday the automaker is looking "in the next couple of months" for ways to restructure its ailing European unit. The unit, which includes GM's Opel division, lost $747 million in 2011. GM hasn't had an annual profit in Europe in more than a decade, Bloomberg News reports. Opel needs to reduce labor costs to break even financially on lower sales, Opel chief Karl-Friedrich Stracke said. The automaker has too many factories, but GM is under contract to avoid shutdowns and layoffs until 2014.
• As Chrysler's turnaround accelerates, the automaker canceled its long-standing application for federal energy loans, which were part of a loan program to foster environmental efforts across multiple industries. The Detroit News reports Chrysler's $8.6 billion application in 2008 shrank to less than $2 billion last year, which was the amount the Energy Department was considering. Now the automaker says it can secure financing with commercial banks for better terms, sources told The Detroit News. Chrysler was one of more than 100 companies that applied for the program, which funds up to $25 billion in loans. Thus far, just $8 billion has been awarded.

Feds Propose Distracted-Driving Guidelines to Automakers

Citing more than 3,000 highway deaths from distracted driving in 2010, the U.S. Department of Transportation proposed a set of distracted-driving guidelines today. The auto industry and the public will have 60 days to comment on the proposal — the first ever regarding distracted driving — with hearings in Washington, D.C., Chicago and Los Angeles. The National Highway Traffic Safety Administration will issue final guidelines thereafter.

In a conference call to reporters this morning, NHTSA administrator David Strickland laid out a handful of guidelines to reduce the "complexity and amount of time required" for in-car systems:

• Allow usage with one hand, leaving the other on the steering wheel
• Limit how long drivers' eyes are off the road to two seconds or less
• Limit "unnecessary visual information" in the driver's field of view
• Limit the number of manual inputs required for various operations

2013 BMW X3 to Get Four-Cylinder Option

An updated 2013 BMW X3 will go into production in April with a fuel-efficient four-cylinder engine, more tech options and a new M performance package.

The 4xDrive28i will replace its 240-horsepower inline-six-cylinder with an equally powerful turbocharged 2.0-liter inline-four-cylinder motor. The engine — already available on the 3 Series, 5 Series and Z4 — also comes with an auto stop/start feature for improved gas mileage. The current X3 xDrive28i gets an EPA-estimated 21 mpg combined.

The new four-cylinder won't make the X3 cheaper, but it won't make it any more expensive, either. At $37,995 including destination, the SUV costs the same as the outgoing 2012 trim. The xDrive28i gets more standard equipment, however, including a power liftgate, 18-inch alloy wheels, chrome tailpipes and a fuel-saving program BMW calls Driving Dynamics Control.

For folks who still prefer the sound of six-cylinder power, the xDrive35i soldiers on with its 3.0-liter inline-six, which produces 300 hp. It also gets an auto start/stop feature that will improve fuel economy by up to 3% in certain conditions, BMW says. The xDrive35i will go on sale for $43,595, which is also the same as last year's model. An M Sport Package featuring 19-inch wheels is available on the xDrive35i.

A new lane departure warning system is optional. Additional trim, feature and fuel economy info will be made available closer to the SUV's launch early this summer.

Love That New-Car Smell? Your Body Doesn't

An environmental group has released the findings of its annual study on automotive toxic materials, and the news isn't good for 2011 Mitsubishi Outlander Sport owners.

Mitsubishi's compact SUV was rated the worst for toxic materials in the cabin, according to tests by the Ecology Center, a non-profit group based in Ann Arbor, Mich. The center found higher levels of contaminants such as bromine, chromium and lead in the Outlander Sport's seats, plastic parts and center console. Other offenders on the list include the 2011 Chrysler 200 and the 2011 Kia Soul.

Cars.com News Briefs: Feb. 16, 2012

Here's what we have our eye on today:

• Despite losing money in confidence-starved Europe, GM posted global profits in 2011 of $9.2 billion, the highest in its 103-year history, Bloomberg News reports. European units, including GM's Opel division, lost $747 million in 2011. That's less than half of GM's Europe loss in 2010, Bloomberg notes, but not the breakeven the automaker had planned for in November. With just more than 9 million cars sold worldwide, GM was the best-selling automaker in 2011. After a 2009 bailout and subsequent initial public offering, the U.S. Treasury still holds 32% of GM's shares.
• About 30% of GM's 26,000 salaried employees — i.e., not hourly workers — have defined-contribution 401(k) retirement programs, with the remainder getting traditional defined-payout pensions. After Oct. 1, however, the automaker plans to move the remainder to 401(k)s, The Detroit News reports. Those with pensions will retain benefits earned through that date.
• Ford is bullish that its redesigned Fusion Hybrid will beat the Camry Hybrid. The automaker has 461 patents on its hybrid systems, up from just 30 a decade ago, Bloomberg News reports. Toyota, in contrast, has more than 2,000 patents for its hybrids, a spokeswoman told Bloomberg. But the Fusion Hybrid gets better gas mileage: 47/44 mpg (city/highway) compared with the Camry Hybrid's 43/39 mpg. By 2020, Ford expects hybrids and plug-in vehicles — whether all-electric or gasoline-supported — to account for 10% to 25% of its global sales.

J.D. Power Releases 2012 Dependability Study

The good news today from J.D. Power and Associates is that overall vehicle dependability across all brands and vehicles has improved 13% over last year's scores. The data company's annual Vehicle Dependability Study rates the reliability of 3-year-old vehicles, so this year’s scores examine the performance of model-year 2009 cars, trucks and SUVs.

Most brands improved, with 25 out of the 32 gaining points. Six brands fell in the ranks, and one stayed the same. Brands awarded the top four slots are Lexus, Porsche, Cadillac and Toyota. The scores are toughest on Chrysler, whose brands rounded out the bottom of the list: Chrysler, Dodge, Jeep and Ram vehicles performed the worst, according to the study.

Cars.com News Briefs: Feb. 15, 2012

• Republican presidential candidate Mitt Romney, the son of former Michigan governor George Romney, defended his 2008 column in the New York Times opposing Detroit's autos bailout with an op-ed in yesterday's Detroit News. Calling the $85 billion bailout — of which the government expects to lose around $24 billion — a "sweetheart deal" to autoworker unions, Romney said he would have allowed the companies to undergo a managed bankruptcy without government dollars. A private bankruptcy would have allowed secured creditors and salaried employees to take less-severe haircuts, and a UAW trust fund wouldn't have received a 55% stake in Chrysler. Romney called on the Obama administration to release its remaining shares in GM.
• Opponents responded today. Former Obama administration auto czar Steve Rattner, whom Romney called "politically connected and ethically challenged," said the notion of finding private capital to fund a government-free bankruptcy for GM and Chrysler was "utterly fantastical," The Detroit News reports. Said Rattner: "At that moment, with the stock market in free fall and the economy shedding 700,000 jobs a month, no one — I repeat, no one — had the slightest interest in funding these companies on any terms."
• J.D. Power and Associates' Vehicle Dependability Study, which rates dependability for 3-year-old (2009 model year) vehicles, said overall dependability improved 13% this year over last year's 2008 model year ratings. Twenty-five of 32 brands improved, six dropped and one stayed even, J.D. Power reports. Lexus, Porsche, Cadillac and Toyota were the top-ranked automakers, with Chrysler, Dodge, Jeep and Ram at the bottom. Chrysler responded, saying the automaker has orchestrated major changes in product development since 2009.
• Volkswagen Group's global sales, which include VW, Audi and six other global brands, rose 0.1% in January, Automotive News reports. Emerging markets like Russia and India saw substantial improvements, but Europe's sovereign debt crisis continued to weigh on consumer confidence and auto sales, while an early Chinese New Year had Chinese consumers taking vacations — and not buying cars. Sales in both regions, VW's two largest, fell in January.
• Indian automaker Tata, which owns Jaguar and Land Rover, had a record stock surge on strong profits in the final quarter of 2011, outpacing analysts' expectations by 31%, Bloomberg News reports. The profits came from strong sales for the two luxury brands in China and Russia over the final months of 2011, which outpaced slower growth in developed markets.

Obama Budget Proposes Big Changes to Alt-Fuel Car Tax Credits

In the 2013 budget proposal delivered to Congress, the Obama administration is taking a new approach to incentives for electric and other alternative-fuel cars. Despite claims that these tax credits would go to bolster wealthy potential Chevrolet Volt buyers, these tax credits are focused on the companies that would make these cars, not consumers.

According to a summary of the changes prepared by Nissan (the builder of the all-electric Leaf):

• The proposal eliminates the current $7,500 electric vehicle tax credit and replaces it with advanced technology vehicle credit.
• There would be a maximum $10,000 per vehicle through 2016, with no cap on how many vehicles it might apply to; that would drop to $7,500 in 2017, $5,000 in 2018 and down to $2,500 in 2019.
• The credit would go to the vehicle's seller or to the financing company.
• The proposal's title suggests the credit would be tied to "production" of vehicles, but where that production would need to take place remains unclear.
• There's also a proposal to add incentives for alt-fuel medium- and heavy-duty vehicles that would aim to cover the added expense that often accompanies new technologies.