This year was CES’ 50th anniversary. It had record breaking numbers. I had the pleasure to attend last year’s event and it was so exhilarating (thank you brother). Here are some statistics:
3,800+ Exhibiting Companies
2.6+ Million Net Sq Ft
55,000+ International Attendees
World’s Largest Innovation Event
Some of the key highlights encompassed 5G, VR, AR, autonomous driving, Ultra-ultra high-definition TVs (yes, I just made that up), and drones. Sony, Samsung, and LG showed off their baddest TVs. Whether it was 8K, QLED, or OLED. Mass production of these resolution types are within 5 years. So if you didn’t buy that 4K TV this Black Friday, don’t worry, they will be even cheaper in the next 2 years.
Samsung tried to better their name by having a booth solely displayed as “GALAXY.” Since their debacle with the Galaxy Note, reputation has been ruined. This booth included two “rides,” where users could put on a VR headset and twist and turn in the air with a machine. Believe it or not, I was not willing to wait in line to experience this…I was at CES, not Disney Land!
LG had a super awesome clothes steamer DIY system for home use. Just put your suit pants, shirt, and coat in this electric machine, and it will clean your clothes like you took them to the dry cleaners.
LG also had refrigerators that had full-size screens on the front in order to see what food you currently have in the fridge. These screens can tell you your shopping list, or tell you that ice is out and the water filter needs to be changed. I believe some day that all refrigerators will have touch screen fronts to allow users to have more visibility into what they have in their fridge. Eventually, these devices will talk with their owner and help them cook–giving them directions and ingredients to include in meals.
BMW, Nvidia, Intel, and others all displayed self-driving vehicles. BMW’s booth was outside so that driver’s could wait in line and give their cars a test drive. I predict self-driving vehicles will become available to purchase by 2020. The company in the forefront will be Tesla (because of their competitive advantage of first to market with full-blown electric vehicles).
An interesting surprise of companies was American Greetings. They allowed CES-ers to write cards to their friends, loved ones, or peers and send it to this special person, for FREE! Their booth was also outside. They were also making digital cards that included hand-drawn sketches on the computer.
If you could not attend this year, try going down/up next year. If your company does not subsidize your badge entry, it is only $100 to get in for 4 days of awesomeness! Next year’s event will occur Jan 9-12.
Fun fact of the day: The One:1 Koenigsegg is the World’s first Megacar. It is a 5.0L Turbocharged V8 vehicle. Has a top speed of 273 mph (theoretical), 1,360 horsepower, 1,360 kg curb weight, rear drive, and a price tag of only $2.9M! WOW…I think I found my new dream car.
Intel recently acquired Yogitech, a company that helps reduce accidents and collisions in self-driving cars or IoT devices. This is a huge step for Intel in their quest to become the biggest and baddest company in the IoT space. Expect many more acquisitions to come within the next 5 to 10 years, specifically IoT companies.
Since the emissions scandal broke in September 2015, Volkswagen (VW) has delivered three things: a third-quarter loss, a new CEO and an investigation into the “rogue coders” who supposedly fitted cheat software on up to 11m vehicles worldwide. None of these are satisfactory.
The third-quarter loss is due to provisions of 6.7bn Euros against anticipated fines, alteration costs for the 11m vehicles, and compensation for customers whose vehicles will, as a result of those alterations, have poorer fuel economy and diminished performance. Most analysts think the provisions will be nowhere near enough: estimates of the final cost for Volkswagen vary from 15bn to 25bn Euros. And this is without taking into account consequential losses for customers, over which Volkswagen may face lawsuits: the second-hand value of Volkswagen automobiles is already falling sharply. Volkswagen’s third quarter results were bad, but future results may well be far worse.
The new CEO, Matthias Mueller, was formerly the boss of Porsche, VW’s premier high-performance brand. Appointing an insider to replace a CEO who has stepped down due to a major scandal is hardly indicative of a major change in management and culture, which is what VW really needs: it would have been far better if the new CEO had come from elsewhere.
But there is now a more serious shadow over Mr. Mueller. On November 2nd, the US’s Environmental Protection Agency (EPA) notified Volkswagen of a second breach of clean air legislation (my emphasis):
Today, EPA is issuing a second notice of violation (NOV) of the Clean Air Act (CAA) to Volkswagen AG, Audi AG and Volkswagen Group of America, Inc. This NOV is also being issued to Porsche AG and Porsche Cars North America. These five companies are collectively referred to as Volkswagen (VW). The NOV alleges that VW developed and installed a defeat device in certain VW, Audi and Porsche light duty diesel vehicles equipped with 3.0 liter engines for model years (MY) 2014 through 2016 that increases emissions of nitrogen oxide (NOx) up to nine times EPA’s standard. The vehicles covered by today’s NOV are the diesel versions of: the 2014 VW Touareg, the 2015 Porsche Cayenne, and the 2016 Audi A6 Quattro, A7 Quattro, A8, A8L, and Q5.
So this time, the luxury VW brands are affected. Including Mr. Mueller’s Porsche. Oh dear.
In a statement, VW emphatically denied that it fitted “cheat software” to its luxury brand. But it also attempted to tone down the severity of the EPA’s charge. VW described the alleged violation thus:
The United States Environmental Protection Agency (EPA) informed Volkswagen Aktiengesellschaft on Monday that vehicles with V6 TDI engines had a software function which had not been adequately described in the application process.
Somehow, “developed and installed a defeat device” became “not adequately described in the application process”. So VW’s defense amounts to “We didn’t do it, and anyway it wasn’t a crime”. I can’t see this going down well with US regulators. This is a very poor start for the new CEO.
And things have since gotten a lot worse. After the EPA’s first violation notice, VW’s Board announced an investigation to establish whether there were other “irregularities” in relation to emissions testing for VW vehicles. And yes, it seems there are. On November 3rd, VW admitted that “unexplained inconsistencies” had been found in the testing process for CO2 emissions.
What VW seems to have done is understated CO2 emissions data for some of its brands, enabling it to make unrealistic (and therefore misleading) fuel economy claims:
Under the ongoing review of all processes and workflows in connection with diesel engines it was established that the CO2 levels and thus the fuel consumption figures for some models were set too low during the CO2 certification process.
VW says about 800,000 vehicles are currently thought to be involved, mostly in Europe. But the question that immediately springs to mind is – why are only some brands affected? Why overstate fuel economy figures for some models but not others? This doesn’t seem likely. It’s worth remembering that the NOx emissions scandal originally involved less than 500,000 vehicles and was limited to the US: the figure is now 11m worldwide. This, too, could quickly spiral. And importantly, some of the vehicles involved this time have petrol engines. The scale of this scandal could be much, much bigger.
I suppose the claim that only some brands are affected might support VW’s argument that the emissions scandal is entirely caused by a small number of software engineers. But that argument was already hard to swallow, and is now frankly incredible. No way is this a “rogue coder” incident. This is systematic rigging of emissions test data to give VW an unfair (and illegal) competitive advantage over its rivals.
And it is tax fraud, too. A number of countries give discounts on vehicle tax for vehicles with low CO2 emissions. So some of VW’s customers have unwittingly paid a lower vehicle tax than was actually due. They are now liable for the unpaid tax, and could in theory face prosecution. According to the Wall Street Journal, the German government has pressured VW into offering to pay the additional tax bills:
Volkswagen Chief Executive Matthias Müller asked EU finance minister to ensure that their national tax authorities “charge Volkswagen directly, and not our customers, for any additional taxes.”
VW estimates that this latest scandal will cost it around 2bn Euros. This is in addition to its estimate of 6.7bn Euros for the NOx emissions scandal. Neither figure seems likely to be remotely adequate. VW faces far larger bills once litigation costs and compensation are taken into account.
VW has now been downgraded by the credit ratings agencies Moody’s and S&P, and all three major ratings agencies have it on negative watch for further downgrades. Moody’s, discussing the latest revelations, goes to the heart of the matter:
These new developments pose additional risk to Volkswagen’s reputation, future sales and cash. They also suggest serious internal control and governance issues, which may be more widely spread than believed initially, that Volkswagen will have to address aggressively in the coming months.
The scandal is already beginning to affect sales of VW vehicles. In the UK, sales in October were down 9.84% year-on-year across all models, including petrol engines – a huge drop. Further falls seem likely, and sales in other countries are falling as well. Toyota has now overtaken VW as the largest car manufacturer in the world by sales.
Unsurprisingly, VW’s share price – already down by a third due to the NOx emissions scandal – tanked again when the CO2 emissions news broke. VW is still financially strong, but to regain the confidence of customers and investors it will have to make far more radical changes to its management, governance and culture than have been evident so far.
When a company is beset by scandal and compelled to fire its top boss, should it really promote a trusted insider rather than breaking from the past and bringing in an untainted outsider with no institutional loyalty?
Volkswagen, which admitted last month that it had lied to regulators by rigging engines in 11 million of its heavily polluting diesel cars, had to confront that question with no time to spare. At first CEO Martin Winterkorn, 68, refused to resign, saying he was “endlessly sorry” for the scheme but insisting he had known nothing about it. Shortly thereafter, on Sept. 23, he took responsibility and fell on his sword. (The German magazine Der Spiegelreports that Winterkorn was the highest-paid German executive, earning $85 million over five years. Winterkorn is demanding he be paid the $11 million left on his contract.)
Just two days later the 78-year-old automaker announced it was appointing a longtime, well-respected VW veteran, Matthias Müller, who has headed Volkswagen’s luxury sports-car brand, Porsche, for the last five years. Müller has the support of both labor unions and Volkswagen’s controlling shareholders, including ex-chairman Ferdinand Piëch, the grandson of Porsche’s founder.
Müller started at Volkswagen 38 years ago as an apprentice toolmaker for the Audi division. He left to study computer science at Munich University of Applied Sciences, returning to Audi in the IT department in 1984. He rose to product manager for Audi, and kept moving up the ranks. Close to Winterkorn, who appointed him head of VW’s product strategy, he ascended to the top job at Porsche, which owns a 51% stake in VW. Müller won praise for steering Porsche through the recession, almost doubling the delivery of new cars last year to nearly 200,000. Profit margins at Porsche are reportedly 18%.
Müller recently told Süddeutsche Zeitung that he felt he was an “approachable team player,” adding that “I do not like it when things get talked to death.”
He has also been praised for his outspokenness on controversial issues. A refugee who fled Eastern Germany as a three-year-old, he has been vocal about Germany’s response to the migrant crisis, a topic most German executives avoid. In an interview withSüddeutsche Zeitung published in early September, he recalled his own struggle to readjust to a culture similar to the place he had left, saying, “The people who are now arriving completely out of their culture. . . . We have to help.” He spoke about his feelings during a visit to a Porsche subsidiary in Schwarzenberg, a region that has been hostile to migrants. “We have to take a stand against extremism,” he said.
He’s also criticized his bosses’ interest in self-driving cars, tellingAuto Motor und Sport, a German car magazine, “I ask myself in an emergency, an autonomously driven auto is going to steer to the right into a truck or left into a compact car.”
But he has not distanced himself from Winterkorn. “It’s important to me to thank Dr. Winterkorn for everything that he has done for Volkswagen,” he said, according to a summary of his remarks provided by Volkswagen and reported in The New York Times.
Müller’s inside credentials are strong, but is he the best person to take Winterkorn’s place?
Rebecca Harris, a Green Party member of the European Parliament, told the Times that she was “disappointed” in the decision to promote Müller. Harris comes from the German state of Lower Saxony, which owns 20% of VW’s stock and is home to VW’s headquarters in the town of Wolfsburg. “What I would have loved would be now to go for a real shift, to bring in new people, not protecting the old way,” she said.
The Center for Auto Safety’s Dan Becker, director of the safe-climate campaign at the Washington, D.C.-based organization, told the Times that VW needed “to scour the house with an outsider who’s not afraid to get to the heart of this huge fraud and its perpetrators, however high. . . . Instead they’ve chosen a longtime VW crony.”
Likewise the Düsseldorf-based business paper Handelsblatt, calling the emissions scandal “Dieselgate,” says, “The time is ripe for a new beginning, but the supervisory board in Wolfsburg apparently didn’t have the courage to turn the page.” The Matthias appointment, it writes, “does not send a signal of fundamental change.” Handelsblatt goes on: “Müller is simply too closely tied to the old system.” He is indebted to Winterkorn and Piëch, the paper says. They are the people who turned VW into what it is today, “a complex, hierarchically organized power structure that’s nearly impossible to control.” Handelsblatt says that nothing happens at VW without board member Piëch’s support, but Müller will never get to the bottom of Dieselgate unless he distances himself from his longtime allies.
Several observers, including Handelsblatt, and Forbes contributor Neil Winton, have argued that VW should have picked VW brand chief Herbert Diess, a recent hire from BMW, who would have brought an outsider’s perspective and who was surely not involved in Dieselgate.
Longtime Forbes staffer Joann Muller, who has been doing excellent coverage of the VW saga, equates Müller’s appointment to “a shuffling of the deck chairs on the Titanic.” She reports that Volkswagen installed a new North American chief above U.S. President Michael Horn, and that sales and marketing head Christian Klinger is leaving the company, “not related to recent events,” according to VW. Jürgen Stackman, head of VW’s European SEAT brand is taking Klinger’s place on the board of management, and Audi sales and marketing boss Luca de Meo will lead SEAT.
VW’s decision to promote Müller also has its defenders. Stefan Bratzel, who directs a research group near Cologne called the Center of Automotive Management, told the Times that Müller stood out at Volkswagen because he spoke his mind, an attribute not shared by most VW executives.
Manuela Kasper-Claridge at German broadcaster Deutsche Welle, also praises Müller’s candor. He “doesn’t shy away from conflicts, doesn’t beat about the bush when it comes to identifying mistakes and appreciates working in a team.” Since he’s already been a successful executive for years, she writes, “He looks well suited to steer VW into calmer waters.” Still, she adds, he must be prepared to fire colleagues and shake up VW’s management structure. “The old boys’ network doesn’t count anymore,” she writes.
Müller seems like a capable CEO who has stepped into a vacuum. But he would do well to keep in mind that his company has illegally made use of so-called defeat devices in the past, as have other carmakers. In 1974, VW paid $120,000 to settle an EPA complaint that VW failed to disclose devices that tampered with emission controls on 25,000 1973 models. VW didn’t admit wrongdoing at the time, but the EPA’s complaint was similar to the current scandal: The devices deactivated emissions control systems. VW agreed to remove the devices. Cadillac, Ford and American Honda have also settled defeat device charges brought by the EPA.
Müller has a huge challenge before him. He has to investigate and fire the perpetrators of Dieselgate, he must contend with possible criminal charges in both the U.S. and Germany, a raft of likely class action suits brought by car owners and dealers, and serious damage to the VW brand. At 62, he may only be a CEO placeholder until VW finds a capable outsider to take on the daunting challenge of righting one of the worst corporate scandals ever. And maybe that’s all he should be.
Its base model costs $237,000. That’s considerable, to be sure, but it’s half the price of the Lamborghini Aventador.
It’s arguably the subtlest modern Lamborghini ever designed, especially when you consider the electro-’80s-style edges of the Gallardo and the multiple gaping vents of the Murcielago. But its rib-cage-like back, exposed engine cavity, and spaceship profile remain the most extreme style elements on a production car today.
It’s touted as the “driver-friendly” Lamborghini, suitable for canvassing both town and country. Stephan Winkelmann from Lamborghini even told me it was “easy on the road.” That must be a relative term. Its excruciatingly low clearance, 14-mpg gas mileage, absentee cup holders, dangerous lack of visibility, and miniscule trunk—I hesitate to even label it as such—make it painful as a weekend conveyance. On the way out east last Sunday morning, I was sweating speed bumps and the gas gauge—all the while fending off the overflow tote I had to place at my feet.
Those last bits—the parts about low clearance, zero visibility, and that insatiable thirst for fuel—are nothing new. Heck, we expect this sort of thing when we drive a Lamborghini. It’s part of the adventure.
Yet I would argue that at this point, Lamborghini has got to move at least a hair’s width past that old model. I know it’s painful. But it can’t get away with those sorts of annoyances anymore. No longer is Lambo the esteemed family-run Italian house making dozens of cars a year for connoisseurs and enthusiasts who delight in indulging their inner automotive masochist, as it was in the 1970s. It’s part of Volkswagen, making thousands of cars a year, largely in Germany, for everyone from Kanye West to second-string power forwards in L.A.
None of this means the Huracan is a bad car. (Well, it is bad in the best sort of naughty way. It’s fun to use to blow past people on the highway, and it gets a lot of attention on the street.) But it does all mean that this bull is a mixed breed of Italian heritage forced to contend with conflicting demands from a neo-luxury, ultra-global market.
If you decide to buy a Huracan, go in with both eyes open, as it were. If you don’t, you’re going to get burned.
Focus Your Mind
Priority No. 1: You must focus when you drive this car. The Huracan deserves it. It’s too powerful and fast and special—unlike the slick McLaren 650S, it has real personality—to treat casually. This car is born of track monsters, an animal built around a 602-horsepower direct-injection 5.2-liter V10 engine that can reach 200 mph on a casual afternoon jaunt.
Aside from the matter of the ulcer-inducing lack of clearance—there’s a button that raises the chassis as a sort of buffer over abrupt inclines, which does help—the Huracan eats asphalt at the speed of the national debt. It’ll go zero to 60 mph in 2.9 seconds, which well beats the $176,000 Porsche 911 GT3 RS and the $200,000 Ferrari California. (It basically equals the $245,000 Ferrari 458 Italia, but it does not come near the blistering and $845,000-plus Porsche 918 Spyder.)
I first drove this car when I worked for Forbes almost a year ago. At the time, I didn’t get to drive it on the track—so this time, up at Lime Rock racetrack near Sharon, Conn., I made sure to floor it, literally. You will, too, when you drive this. It’s impossible to resist the urge. When you accelerate, the thrust pushes you back as if you’re passing through a force field into some sort of other dimension. Though, for my money there are other cars—like that McLaren 650S—that just feel a shade quicker as you push them to the edge.
The Huracan also contains Lamborghini’s first-ever attempt at a seven-speed dual-clutch automatic transmission, with four-wheel drive to boot. The gear modes include the “manual” Strada or the automatic Corsa. In both, the transmission operates unobtrusively and willingly—if not with quite as much élan as you might find in a Bentley Continental Coupe. There is a blissful lack of turbo lag, of any hesitancy whatsoever, when you punch the gas.
Work That Body
The Huracan is made from aluminum, with carbon-fiber components in the bulkhead, center tunnel, and B-pillars, which accounts for a 10 percent weight loss over the Gallardo. That means it’s better—lighter—around corners than predecessors. As I wound up Route 22 on the way to Lime Rock Park, it felt less like a brick and more like a very insistent pit bull. Thick but pliable if you get it pointed in the right direction and keep a firm hand on the collar (read: steering wheel). It’s about as wide in the shoulders as a pit bull, too.
Accelerating in a straight line means tightening your stomach muscles as you feel the small of your back flatten against the seat. The subtle hum of the engine—hidden behind the top note of its roar—as the car launched under me confirmed that I had just achieved liftoff.
Here is how it’s different from others in its price range: The best, fastest, most elegant Bentleys, Ferraris, Rolls-Royces want to help you when you drive. They aspire to conspire with you. The Huracan feels reptilian in comparison. It has power. It has edge. But it’s no easy breezy driver (see reasons stated above); it’s certainly not interested in developing any sort of mutually beneficial relationship.
The Huracan is going to do what nature and its reptilian brain decree. You, as driver, are accessory to that instinct. Don’t get it twisted.
Obey the Beautiful Reptile
About that visibility. The windshield is so narrow and slanted I had to crane my neck down any time I wanted to see if the stoplight in front of me had turned green yet. And you might as well remove the rearview mirror and give it back to the dealer before you drive off the lot. I couldn’t see a thing with it back there as I drove upstate, no matter how many times I adjusted it. On the Huracan, side mirrors are your friends.
(Along my drive to Connecticut, I stopped by the garage of a well-known auto racing champion. His longtime mechanic, a white-haired man with his own impressive array of ’70s-era drag racing credentials, told me he could see the visibility problems from the moment I pulled in the drive: “That’s a beautiful car,” he said, leaning toward me conspiratorially. “Beautiful and useless.”)
But yes, beautiful. I love how the Huracan looks. It tells everyone that it’s crazy and intimidating and fast and mean—and it doesn’t have to use a single word to convey that message. No, you won’t get those suicide doors that swoop up like they do on the Aventador, but you do get those sick vents along the rear roof, and the low-slung swagger of a race car. It sounds strange to say, but everything else is minimal. And rightfully so. The audacity of those lines alone demands enough attention, emotionally. This is the kind of car you feel you could sketch in about three lines.
Inside the Beast
The interior is unusual; all of the buttons are grouped in a row across the center console, like a rocket ship, and the start button sits hidden under a fire-engine red flip-top cage. There’s a whole process to engaging the parking brake—but it all fits with the overall character of the car. Other oddities: The turn signal is a single button that you push with your thumb and have to manually turn off half the time, too, as it’s not very sensitive. The gauges are all electronic, rather than “real” analog; the slim, disappearing door handles flip open when you push the unlock button; and the heated sport seats ($2,800 extra if you want them) are firm enough to make you sore after a day on the track.
And, as I mentioned, the trunk is basically an offense to anyone who believes in traveling with more than one pair of shoes.
So, the car is by far the most versatile model Lamborghini makes. It’s a real weirdo. But you knew that. And as Billy Joel sings, “It just may be a lunatic you’re looking for.”