Secretive BMW plant is building iNext electric SUV prototypes

BMW is keeping the details of its iNext electric SUV a secret until sometime next year, but on Tuesday the automaker gave a rare look inside the production facility that’s responsible for building prototypes of the upcoming plug-in utility vehicle.

BMW’s Pilot Plant is used to transition between development and production for up to 6 vehicle projects at once, but right now the facility is focused on creating a streamlined assembly process so that the iNext can be built at one of the automaker’s regular factories. Specifically, the Pilot Plant is working on a new bonding technology for the iNext, as well as systems to measure the vehicle’s build quality. The plant is also working out ways to thoroughly test the iNext’s array of self-driving sensors.

The iNext will be the first BMW model to use what’s known as rotary bonding. That process uses heat generated from piercing aluminum with high-strength steel to meld the two materials together, forming an extremely strong bond. The Pilot Plant will build up to 100 iNext prototypes using the new bonding technique.

In order to ensure the bodies-in-white produced with the new rotary bonding technology are up to BMW’s standards, the Pilot Plant devised a new optical scanning process used for taking vehicle measurements. The new tech relies on laser radar and eliminates the need to physically place measurement points on a vehicle’s body, thereby shortening the inspection process.

All iNext bodies-in-white are also sent to a virtual measuring room where they are examined by a high-resolution scanner. The high-tech scanning method can instantly take measurements of various vehicle parts and automatically compare them to their original CAD data.

Finally, the Pilot Plant uses four robots to X-ray a completed iNext prototype to analyze the internals of the entire vehicle. The tomography tech, which can pick up objects approximately the same width as a human hair, is used to inspect new materials and bonding techniques. Previously, a vehicle had to be disassembled to view that kind of detail.

Even the ergonomics of building the iNext are being examined. The Pilot Plant studies virtual models of workers building the iNext, ensuring easy access to the various parts that need fitting.

The techniques pioneered by the Pilot Plant will be transferred to the iNext’s regular production facility. BMW hasn’t officially said where the iNext will be built, but the company has hinted that it could be produced at its Dingolfing plant.

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Moody’s upgrades Tesla (TSLA) to ‘Stable’ over Model 3 efficiencies, adequate liquidity

Tesla (NASDAQ:TSLA) recently received a positive report and upgrade from Moody’s Investors Service, which changed its outlook towards the electric car maker from “Negative” to “Stable.” In its report, Moody’s affirmed Tesla’s ratings, including the company’s B3 Corporate Family Rating (CFR) and Caa1 senior unsecured ratings. Tesla’s speculative grade liquidity was also changed from SGL-4 (Weak) to SGL-3 (Adequate). 

According to the financial firm, Tesla’s B3 CFR reflects the company’s achievements in the production ramp of the Model 3, whose output is “now in line with Moody’s earlier expectations.” This, according to the firm’s report, should allow Tesla to “achieve production efficiencies, lower costs, and strengthen automotive gross margins.” These improvements are also key to offset the losses generated by the company’s automotive service operations, which could then push Tesla towards profitability. Moody’s added that the sale of regulatory credits is expected to give a boost to Tesla’s finances as well. 

“An important contributor to achieving net profit will be the sale of regulatory credits, which represent no incremental cost to the company and fall directly to earnings. We expect these sales, which accounted for over $400 million in revenues/earnings during 2018, will continue to grow as emission regulations become more restrictive in all major markets,” Moody’s wrote. 

Moody’s stated that it still expects Tesla to generate modestly negative free cash flow of around $500 million over the next 12 months, though the firm expects the electric car maker’s capital expenditures to decrease over this time, thanks to the company’s growing experience in its automotive production business. “Tesla’s increased experience with its production processes have significantly reduced the level of capital expenditures needed to support its growth plans, with annual CapEx falling from approximately $4 billion in 2017 to a current run rate of $1.5 to $2 billion, thus providing a significant boost to expected cash flow,” the firm noted.  

Impressively, Moody’s noted that Tesla’s liquidity position is now “Adequate.” The company’s $5 billion in cash, for one, is expected to give the electric car maker a generous cushion to address maturing debt obligations through 2021, as well as address potential operational challenges that it could face in the coming year. Moody’s explains its positive outlook on Tesla’s liquidity as follows. 

“Tesla has an adequate liquidity profile supported primarily by its $5 billion cash position. After giving consideration for approximately $1 billion in cash needed to fund normal ongoing operations, and $566 million to cover a November 2019 convertible note maturity, Tesla has incremental liquidity of approximately $3.4 billion. This affords the company an important cushion to contend with potential stress arising from softness in US demand, operational challenges accompanying its European and Chinese expansion plans, and the time that will be necessary to implement additional efficiency-enhancing initiatives,” the firm noted. 

Nevertheless, Moody’s argued that Tesla still has notable areas of improvement, particularly in terms of its corporate governance. The firm cites the significant turnover of the company’s senior management ranks including JB Straubel’s recent decision to step aside from his CFO post; the actions of Elon Musk which have resulted in conflicts against the Securities and Exchange Commission; and a board of directors that has “not demonstrated meaningful oversight over the CEO’s activities” as areas of improvement for the electric car maker. While Tesla has been making efforts to improve this, such as the appointment of two new members of its board, Moody’s argues that “Tesla retains a very weak corporate governance structure” nonetheless. 

Tesla’s updated rating with Moody’s could be upgraded or downgraded in the future, depending on the company’s performance. The firm noted that it could upgrade Tesla further if the company could demonstrate “sustained profitability and positive free cash flow in the face of rapid expansion plans in Europe and China,” as well as a capability to maintain an adequate liquidity profile. On the other hand, Tesla’s rating could be lowered if demand for its vehicles begins to soften in the United States, or if the company makes missteps in its China and Europe ramp. A downgrade could also happen if Tesla is unable to remain on a clear path towards strengthening margins in its automotive business, while narrowing losses in its other endeavors. 

Moody’s full report on Tesla’s recent upgrade could be accessed here.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Moody’s upgrades Tesla (TSLA) to ‘Stable’ over Model 3 efficiencies, adequate liquidity

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JULES’ BMW E91 325I TOURING – PART 7

Time for some fresh rims… sort of…

Did you read the issue 406 of Fast Car (if not, why not?)? Anyway, if you did you would have read about the new Autostar wheels I fitted to my E92, and lovely they are too. But this poses the question, what did I do with the 3SDMs 0.04 that they replaced? Well, I decided that I’d slap them on the E91 (waste not, want not), while I wait for the rims I’ve bought for the car to turn up from America.

3sdm wheels refurb

The problem was, they they’d seen better days (I’ve still no idea how the curbing happened) and I couldn’t fit them looking like that. A quick search on Google later and I’d found a local company called Diamond Styling, they were just 10-minutes down the road and after speaking to Jack, I slapped them in the car and dropped them off.

3sdm wheels refurb

Just a few days later Jack was back on the phone to say they were ready for collection. How’s that for service!

3sdm wheels refurb

The fresh BMW Alpine white finish is flawless and there’s no evidence of that nasty curbing, they basically look brand spanking new again. A top job by a bunch of guys that love their wheels as much as we do. I’d thoroughly recommend them to anyone looking for a quality wheel refurbishing company as they also specialise in 3-piece wheels.

3sdm wheels refurb

All I need to do now is bolt them on, but not before the coilovers are fitted (more on that next month), that’s a crime!

3sdm wheels refurb

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3SDM wheel refrurb £384

TOTAL £384

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