This Week in Autos

There's an awful lot brewing in the global auto biz, and it has been a busy week. General Motors announced a profit, Fiat hinted at a Chrysler IPO, and Toyota went back to Washington for yet another round of abuse from the U.S. Congress. But there were some significant developments behind the big headlines, with major implications for the high-tech cars of the near future. Here are a few that you might have missed.

Toyota triggers Tesla tie
On Thursday, Toyota (NYSE: TM  ) announced that it had invested $50 million in electric-car maker Tesla Motors. The investment comes with a factory for Tesla -- Toyota's shuttered Fremont, California facility, the remnant of a now-ended joint venture with General Motors -- and while details were thin, the companies may jointly develop a car in the near future.

Handing off the Fremont factory to Tesla solves a tricky problem for Toyota -- its closing, Toyota's first ever, had cost the company much goodwill in California, its largest U.S. market -- and gives Tesla a base for its planned expansion into mass-market vehicle production.

At first glance, the Fremont plant seems like overkill for Tesla, as the factory was designed for huge production volumes way beyond the electric carmaker's near-term expectations. Is there a Tesla-tweaked Toyota model on the way? We'll take a closer look next week -- stay tuned.

GM getting Googly goodness?
Ford
(NYSE: F  ) has been trumpeting its technology tie-ups in recent months -- including the much-lauded SYNC in-car "infotainment" system developed with Microsoft (Nasdaq: MSFT  ) , and the upcoming Hohm electric-vehicle management system.

Clearly GM needs to up its technological game, and this week the automaker announced that a smartphone app intended for future Chevy Volt owners would include Google (Nasdaq: GOOG  ) powered turn-by-turn navigation capabilities.

On the surface, that doesn't sound like much -- but it adds fuel to speculation that the two companies have a much more substantial tie-up in the works. GM has previously announced that its OnStar system would be relaunched this summer with substantially enhanced functionality -- provided via an unnamed technology partner. Is that partner Google? Integrating Google's Android operating system into GM cars -- which could allow drivers to retrieve email and phone messages (via Google Voice), in addition to providing "smart" controls for music, radio, and navigation -- would give the company a potent answer to SYNC.

Is this where they're going? It seems likely, but we'll have to wait a while longer before we know for sure.

Would you buy this car?
BYD
, the Chinese battery maker/car manufacturer owned in part by Berkshire Hathaway (NYSE: BRK-B  ) , looks set to launch its E6 all-electric car in the U.S. later this year. According to a report this week in China's People's Daily, BYD "will start selling the E6 in the United States in 2010 for around 40,000 U.S. dollars."

BYD recently announced that it would open a U.S. headquarters in Los Angeles and clearly has high hopes for this market, but starting off with a $40,000 small electric car seems like a dubious proposition, even if its range is generally better than its competitors. The Nissan Leaf, which is due late this year, and Ford's electric Focus, due early in 2011, will both be significantly less expensive, and like Chevrolet's upcoming Volt, those cars have the advantage of brand-name recognition and vast, well-established dealer networks.

Unless the price comes down far enough to significantly undercut the big-name competition, BYD's chances for success seem slim. "General Motors" and "quality" may be two concepts that don't yet sit well together in the public mind, but in a highly unscientific poll of a few people in my local coffee shop, 5 out of 5 people surveyed would trust an electric Chevy over an electric car from a Chinese company they'd never heard of.

How much would you pay for BYD's battery-powered car? Scroll down to leave a comment and let me know.  

Fool contributor John Rosevear owns shares of Ford. Berkshire Hathaway and Microsoft are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers recommendation. Berkshire Hathaway and Ford Motor are Motley Fool Stock Advisor choices. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 21, 2010, at 4:18 PM, baldheadeddork wrote:

    Happy Friday, John.

    On my radar this week are mid-month forecasts from Edmunds and JD Power, showing that Toyota sales are down 15% from April, despite May being a better month for sales and Toyota still running near record incentives. If these numbers pan out for the month it will be more evidence that Toyota's March recovery was just pulling sales forward, and they are not going to rebound quickly from the SUA recall.

    http://www.autoobserver.com/2010/05/so-far-in-may-toyota-str...

  • Report this Comment On May 22, 2010, at 4:04 PM, rtichy wrote:

    I have no idea whether BYD electric cars are any good... but Ihope the people who buy them insure their driving with GEICO!

  • Report this Comment On May 24, 2010, at 11:06 AM, ejm23 wrote:

    buy a car from china? when they can't even produce toys that won't kill you? 2k would be too much.

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