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Business News/ Auto News / This luxury automaker is testing if household waste can be used to make parts of a car
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This luxury automaker is testing if household waste can be used to make parts of a car

UBQ has developed a way to convert waste, including food, paper, dirty plastics and packaging, into a thermoplastic substitute
  • Automakers are under pressure to reduce the carbon-emissions impact from the manufacturing of their vehicles
  • Daimler AG’s hard-nosed strategy to fight off diesel-cheating allegations is proving to be costly (Reuters)Premium
    Daimler AG’s hard-nosed strategy to fight off diesel-cheating allegations is proving to be costly (Reuters)

    Daimler AG agreed to test recycled waste produced by Israel’s UBQ Materials Ltd. to see if it’s viable for use in car parts for new vehicles.

    UBQ has developed a way to convert waste, including food, paper, dirty plastics and packaging, into a thermoplastic substitute that can be used in everyday goods. The material can be incorporated into thousands of items, including shopping carts, pipes and automotive parts, the Tel Aviv-based company said in a statement.

    UBQ’s product has been given a 100-day test phase, a spokesman for Daimler’s Mercedes-Benz AG division said in an emailed response to questions. That will determine whether it can be used in the production of vehicles that go to market, he said.

    Daimler and other automakers are under pressure to reduce the carbon-emissions impact from the manufacturing of their vehicles, and are in the middle of a costly transition from producing cars with traditional combustion engines to electric models.

    Daimler AG’s hard-nosed strategy to fight off diesel-cheating allegations is proving to be costly.

    More than four years after German rival Volkswagen AG admitted to rigging emissions tests, the maker of Mercedes-Benz cars denies it too used illegal defeat devices. Regulators and consumers aren’t convinced, and the expense of defending the allegations is mounting.

    Daimler said Wednesday that it will set aside between 1.1 billion euros ($1.2 billion) and 1.5 billion euros in legal and government costs, in addition to struggles that halved 2019 profits and pushed results below expectations.

    The company has had to recall at least 774,000 diesel cars in Germany, after insisting for years its engines comply with emission rules. The costs squeezed returns at the main Mercedes-Benz car unit and drove the smaller vans division to a significant loss.

    Daimler’s third profit warning in less than 9 months offers a fresh reminder that the woes embroiling the world’s best-selling luxury-car maker and biggest truck manufacturer are largely rooted in homegrown problems, rather than broader industry headwinds. While trade tensions, tariffs and a general automotive slowdown have hurt results, the legal costs are rising and production hiccups affected key sport-utility vehicles last year.

    “What’s truly remarkable is the fact that Chief Executive Officer Ola Kaellenius hasn’t taken more action with respect to his divisional leadership teams," Evercore ISI analyst Arndt Ellinghorst said in a note. “Broadly speaking, the same people are in charge."

    Daimler shares were down 1.5% as of 1:46 p.m. in Frankfurt.

    Group earnings before interest and taxes fell to 5.6 billion euros for the year, the German manufacturer said in a statement. Profit at Mercedes-Benz cars roughly halved to 3.7 billion euros, as the operating return on sales eroded to 4% from 7.8% in the previous year. The Stuttgart-based manufacturer retained its luxury-car lead over BMW AG, but margins slumped below the level of French mass-market manufacturer PSA Group.


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    This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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    Published: 22 Jan 2020, 07:05 PM IST
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