This Week’s Top 10: Leaf reaches another sales benchmark, GM Ventures backs fuel efficient startup technology

by Jon LeSage, editor and publisher, Green Auto Market 

Here’s my take on the 10 most significant and interesting occurrences during the past week…….

  1. Nissan Leaf sales successLeaf takes the top spot. Not long ago, cleantech analysts thought plug-in hybrids would dominate the US market over battery electric vehicles. Yet, the Nissan Leaf continues to hold the top spot and just reached another benchmark – 30,200 units sold in the US last year, a new record. That makes for a total of 72,322 sold in the US since the launch in December 2010 through the end of 2014. The Leaf leads a market trend where three of the leading electric models are now selling over 1,000 units a month in the US, with the Chevrolet Volt and Tesla Model S following right behind. During some months in the past, other models have surpassed the 1,000 mark – the Toyota Prius Plug-In, Ford C-Max Energi, and the Ford Fusion Energi.
  2. GM Ventures backs another startup. General Motors plans to increase fuel economy on some of its models up to 15% using a new cylinder deactivation technology. Dynamic Skip Fire, or DSF, ignition system technology integrates advanced digital signal processing and software; the cylinders are programmed to only fire and deliver performance as the driver needs, saving on fuel. DSF is being developed by Tula Technology, Inc; that company received funding from GM Ventures in 2012. GM Ventures, led by Jon Lauckner, GM’s VP of global R&D, has lead investments in about 20 start-up advanced vehicle technology companies. (Read more about the role GM Ventures and others are doing in clean transportation funding in a special feature for this week.)
  3. Connected cars take lead at CES. Those attending Consumer Electronics Show (CES) in Las Vegas starting today will get to see that connected cars with advanced technologies are cooler this year than video games. Ford CEO Mark Fields will be delivering a keynote speech on the dawn of the connected car era. Daimler CEO Dieter Zetsche will be speaking about a self-driving Mercedes-Benz model. Volkswagen is making its debut at CES and will be joined by industry colleagues Toyota, General Motors, Hyundai, Mazda, Audi, BMW, and FCA US LLC (which was not long ago known as Chrysler Group).
  4. Bad news for workaholics: Starting up and running an electric carmaker and space flight company might mean you can’t stay married. Tesla CEO Elon Musk filed for divorce on New Year’s Eve for the second time with British actress Talulah Riley. They’d married in 2010, divorced, and remarried in 2013. That followed a previous marriage with five children (including triplets) to Canadian-born science fiction writer Justine Musk. It sounds like that divorce in 2010 wasn’t as friendly as the latest two with Talulah Riley, as would be assumed. (Editor’s Note: Watch the 2011 film “Revenge of the Electric Car” if you want to catch a glimpse of Musk’s previous family life.)
  5. Diesel is still a bit pricy: Natural gas vehicle sales have been feeling the impact of gasoline prices coming down strong in the past six months. Natural gas has a better shot at competing directly with diesel-powered trucks, according to Erik Neandross, CEO of Gladstein, Neandross & Associates (GNA), a consulting firm and organizer of ACT Expo. National average pricing for diesel has been staying around $3.40 to $3.50 per gallon – “by no means a bargain,” Neandross said during a recent webinar.
  6. OEMs haven’t abandoned EVs: Automotive News doesn’t see automakers walking away from electric vehicles (EVs) as gasoline prices continue to stay down. The investment in the technology continues……. GM is rolling out its NextGen Chevrolet Volt (read all about it in a feature for this week); the automaker also plans to roll out an electric 2017 Chevrolet Sonic. Volkswagen invested in a 5% stake in Silicon Valley-based battery developer QuantumScape Corp., with its stable solid state battery technology. Nissan claims that it will roll out a second-generation battery that will double the range of the Leaf from its present EPA estimated 84 mile maximum. Tesla Motors is moving forward on its “gigafactory,” recently starting recruitment of its first 300 workers for its Sparks, Nev., facility.
  7. Clean Energy sells its stake in biomethane company. Clean Energy Fuels Corp., based in Newport Beach, Calif., has sold its majority stake in a Dallas-based biomethane production facility to a minority owner for $40.6 million. The sale goes to Cambrian Energy Development LLC, based in Los Angeles, which has been a partner with Clean Energy since 2008. At that times the two companies jointly acquired the McCommas Bluff facility, the third-largest landfill gas operation in the US.
  8. Porsche marketing chief loves plug-in hybrids. Bernhard Maier, Porsche’s global sales and marketing executive, is getting a kick out of driving a Porsche Panamera and Cayenne to work each day. He’s able to stay almost entirely on electric power during his 25 mile trip. He’s becoming a true believer in plug-in hybrids – one of the reasons is enjoying the convenience of having your own filling station at home or the office
  9. Toyota opening up on hydrogen technology. Toyota Motor Corp. said it won’t be enforcing more than 5,600 patents it holds on its hydrogen fuel-cell technology through 2020. Competitors are free to use that technology, which falls in line with steps taken last year by Tesla Motors to encourage carmakers to tap into its battery technologies to spur adoption of battery electric vehicles.
  10. ChargePoint rolls out home charging system. Campbell, Calif.-based ChargePoint is now offering what it calls the “world’s most attractive and advanced EV charging station.” ChargePoint Home offers speed, convenience, and intelligence to EV drivers. Drivers will be able to charge up to 25 miles per hour and easily manage the charger from their smartphone. It’s being displayed at booth #2815 at the Las Vegas Convention Center as part of the Consumer Electronics Show.

Two funding sources that make the most sense for clean transportation startups

crowdfunding investorsFor those of you reading this article that are working for startups – or for major companies looking to dive into advanced vehicle technologies and infrastructures – there are five types of funding sources to consider tapping into:

  1. Government grants and low-interest loans
  2. Overseas investors
  3. Private equity and venture capital
  4. Green bonds
  5. Crowdfunding

So let’s take a brief look at each type – and two of them that present substantial opportunities in 2015 for both startups and large companies………

Government Grants and Low-interest Loans:
As you probably know, the US Dept. of Energy’s Clean Cities coalitions lead the way on gaining access to federal and state grants and low-interest loans. If you haven’t already done so, become active with your local Clean Cities coalition. Automakers and their suppliers have tapped into low-interest loans through the federal Advanced Research Projects Agency – Energy (ARPA-E). State programs are particularly strong in California, and most other states have some grant funding and incentive programs in place. California Energy Commission continues to be the most significant state funding source, with South Coast Air Quality Management District’s Mobile Source Air Pollution Reduction Review Committee being another channel that the clean transportation community has to stay up on.

Overseas Investors
Startup companies in the US that are breaking into the market are finding that overseas investors might be the best (and sometimes, the only) capital source out there. Investments might come from India, Brazil, Israel, China, Spain, or United Arab Emirates. In recent years, most of these investments have come from Chinese government-backed companies with Wanxiang Group’s bailouts of Fisker Automotive and A123 Systems being the best-known examples. The ZAP and Jonway Auto alliance is another example of a US-based company (three-wheeled, low-speed electric vehicle maker ZAP) finding its needed cash flow through Chinese capital.

Private Equity and Venture Capital
Initial public offerings (IPOs), angel investors, joint ventures, corporate shareholders, private equity firms, and venture capital investors – these are a few of the elements that it takes for a small startup like Tesla Motors to become a major player. Angel investors typically provide capital at an early state of a startup’s development, followed by venture capital firms providing investments and sometimes business guidance and other resources to a new enterprise. One good example of how this is working on the cleantech front has been Vivint Solar’s successful IPO in 2014 that was led by major investment firm Blackstone Group. Another funding source worth following is Cleantech Group’s i3 program, where firms like GM Ventures match up with the right startup companies.

Green Bonds
Toyota’s Asset-Backed Green Bond, a $1.75 billion fund announced in March 2014, is part of a much larger global financial trend in green bonds. Funds used to finance bonds that are friendly to the environment are gaining popularity worldwide, according to Christopher Flensborg of SEB, a Swedish bank. Toyota Financial Services’ (TFS) $1.75 billion was upsized from $1.25 billion as institutional investors have expressed interest in this clean transportation investment opportunity. TFS will use the proceeds from Green Bond toward the purchase of retail finance contracts and lease contracts for Toyota and Lexus vehicles that meet high green standards. Overall, green bonds accounted for about $12 billion in funding last year.

“Crowdfunding” has become a capital source that’s taken off in the past few years, but it’s riddled with more automotive failure stories than success – as Autoblog Green regularly documents. If done the right way, crowdfunding can be an excellent way to raise seed capital. What initially started out as a simple way to make donations to causes and startups through social media communities has evolved into a mechanism for investor returns. Indiegogo and Kickstarter are the two major crowdfunding sites out there; Indiegogo is more focused on arts and entertainment such as movie projects. Kickstarter is more focused on advanced technology startups. Investors are tracking what will come of a ruling by the Securities and Exchange Commission (SEC) on the JOBS Act of 2012. The JOBS Act will probably ease federal regulations and allow start-ups to raise seed capital from a large number of individual investors up to a limit of $1 million. The SEC won’t be finalizing its crowdfunding rules until October 2015; these rules usually take up to 60 days to be published, meaning that the JOBS Act won’t really be in effect until early 2016. Regardless of that delay, crowdfunding has been booming in the past couple of years as a capital source for startups and major companies.

For startup companies and major players creating clean transportation subsidiaries, there are two investment sources that are likely to be viable this year and beyond: crowdfunding and government programs. My firm, LeSage Consulting, is now offering services to assist clean transportation stakeholders in finding needed investments………..…..

  • I’m working with an experienced colleague who has several years of success in securing funds through writing and submitting grant proposals. Funds have come through government grants and loans and crowdfunding sites. Funded projects have included telematics, autonomous vehicles, nautical and aerospace projects, and emissions reduction technologies.
  • If you visit Kickstarter and Indiegogo, you’ll see that two elements need to be in place: an innovative technology with positive economic and environmental gains; and telling a great story that generates enthusiasm from individuals and institutional investors. LeSage Consulting will manage that project for you – creating quality video and website content to tell that story the right way.
  • Preparing for “pitch meetings” organized by firms such as Angel Launch. These networking meetings are ideal for reaching startups, investors, and business executives. Winning awards provides access to capital and strong visibility.
  • Marketing to the right niches. LeSage Consulting will work closely with you on sharing your story and reaching out to the best-suited communities of stakeholders. That can come through market intelligence research, media coverage, social-media messaging, and setting up meetings with the right players in the field – including attending the appropriate pitch meetings.

When you become active in crowdfunding projects, you’ll notice that it’s not just startups who use Kickstarter and Indiegogo, or other relevant sites for cleantech such as Fundly, GoFundMe, Rockethub, Greenfunder, or Green Fundraising. Large companies are using crowdfunding to see if their projects in the R&D stage are gaining interest and support. Private equity firms also are active in crowdfunding sites to gauge where new technologies are heading in the marketplace; being active on Kickstarter and other crowdfunding can provide a meeting ground for institutional investors and corporations to move new technologies forward.

Most crowdfunding is targeted at small, startup technology launches that are receiving donations from an enthusiastic community who want to see that new company thrive. For larger companies and investors, there’s occasionally another business model utilized on crowdfunding sites – such as a board of advisors who’ve contributed $10,000 or more and participate in user-interface meetings. They’re not the same as shareholders attending a publicly traded corporation’s annual meeting, but they do contribute more input than individual donors on crowdfunding projects.

The cleantech community is very interested in crowdfunding, and has witnessed a few success stories. Solar Roadways provides an excellent “how to” on making crowdfunding work. The company makes modular panels that replace asphalt, generate energy, and save money on road maintenance. Its first round of funding – about $850,000 – came through the US Federal Highway Administration for research and development in 2009; and through winning GE’s first Ecomagination award in 2010. Lately, Solar Roadways has doubled its initial Indiegogo campaign – more than $2 million has been raised so far, with some of that interest supported last year by its entertaining Youtube video, “Solar Freakin Roadways.”

You may have an electric truck perfect for urban deliveries; a mobile device application that guides drivers to alternative fueling and charging stations; a propane dispenser ideal for fleets; a carsharing program ready to enter a dozen new markets; or a need for seed capital on an advanced vehicle technology R&D project (such as a NextGen lithium battery) so that it gain investment capital for its next phase. Keep in mind that LeSage Consulting can work closely with you on lining up funding to take it to the next level.

Government loan guarantees are seeing positive returns lately, even in the wake of the Solyndra scandal – the California-based solar company that went bankrupt and led to Congressional hearings on the Obama administration backing risky ventures. One clear example of government grants and low-interest loans coming back comes from the US Dept. of Energy investing in the world’s largest cellulosic refinery that opened up last fall in Hugoton, Kansas. Spain-based Abegona has built this refinery capable of producing up to 25 million gallons of cellulosic ethanol using non-edible waste. About $132 million of that plant’s $500 million was backed by the federal loan-guarantee program.

Government grants and loan guarantees (and incentive programs available to fleets through alternative fuel associations), along with crowdfunding, make the most sense these days. They can open the door later on for larger capital investments such as IPOs and venture capital partners. As we’ve clearly seen since 2008, cleantech and clean transportation are tough markets to enter, survive, and thrive within. Finding the right support and resources makes all the difference in the world. (For more information, please contact me at

More teasers released on the upcoming launch of the 2016 Chevy Volt

2016 Chevy VoltGeneral Motors Corp. will introduce the redesigned 2016 Chevrolet Volt next Monday at the Detroit Auto Show. The automaker has been releasing a series of teasers that started back in August with the photo of the Volt’s new back end and badging; and lately, there have been photos of a sheet-covered 2016 Volt with just a little bit of the front left corner showing. All of this has triggered a wave of media coverage and online commentaries in the past few weeks. Here are a few points to keep in mind:

  • The sheet was briefly pulled off the refreshed 2016 Volt two days ago at the Consumer Electronics Show (CES) – see the photo above. The back-end of the car wasn’t viewed during this brief display.
  • Looking at what was shown at CES, it does have a more pointed, aerodynamic look than the 2011 to 2015 model year Volt, which likely comes from changes being adopted during the redesign to increase fuel efficiency. GM is waiting to reveal more information on the improved fuel efficiency.
  • Some of that fuel efficiency will come through installation of the Regen on Demand regenerative braking feature that was originally introduced in the Cadillac ELR plug-in hybrid.
  • The 2016 Volt does look more like a sedan look than the first-generation Volt models. Whether it will retain the five-door hatchback function from the previous version will have to be determined next week in Detroit.
  • There’s less noise generated from tires on the road in the NextGen Volt, according to GM’s product chief Mark Reuss as he takes another test drive in this video. An improved steering system also takes the car to the next level, Reuss said. Chevy Volt owners were listened to during the redesign to make sure all the little glitches have been cleaned up.
  • A crossover utility version, the Volt MPV5 or Crossvolt, probably won’t be shown off next Monday. It is possible to see it roll out in the next couple of years. In August, GM applied for a trademark for the “Crossvolt” that was published for opposition on Dec. 23. In 2010, GM showed a concept called the Volt MPV5, a compact crossover running off the Volt’s drivetrain. In 2013, a prototype very similar to the MPV5 was spotted as it was being tested with a fleet of Volts. I would bet that a plug-in hybrid crossover would find a lot of interest from those thinking about acquiring a Volt but wanting more storage space and functionality.
  • The “bi-coastal” strategy for the Volt isn’t going away. Chevrolet’s marketing chief, Tim Mahoney, says that the west coast and northeastern region of the US will likely to continue being where most all of the Volts get sold, current model year and through the 2016 MY changeover.