Big Picture: GM takes on Tesla, How to market green vehicles to nerds

GM CEO Dan Akerson’s strategy to wipe Tesla Motors off the map
GM CEO Dan AkersonThere’s more information coming out on General Motors’ agenda taking on competitor Tesla Motors. It seems to be based on the historic trend of a giant automaker wiping out a small startup. GM is willing to become the loss leader, and has the deep pockets to make up for it long term. GM CEO Dan Akerson told The Detroit News: “We’ll sell more (Chevrolet) Volts and lose less money on the Volts than they’ll lose on the (Tesla) Model S.” GM’s executive management wasn’t happy with the findings from a market study conducted during the summer and led by GM vice chairman Steve Girsky. Akerson is also skeptical that Americans will ever buy plug-in vehicles in large numbers. (Detroit News Reporter David Shepardson wrote that Tesla’s profits came entirely from California’s zero-emission vehicle credits and other credits – though many would disagree with that statement.) GM’s strategy to knock out Tesla seems to be based on a three-fold plan:  1. Flood the market with cheaper Chevy Volts.  2. Launch and flood more with a soon-to-be released $30,000 200-mile range electric car. 3. Go head-to-head against the Model S with the extended range, and comparably priced, Cadillac ELR. “But I do think when the (Cadillac) ELR comes out late this year, early next — it’s certainly in the same postal code as Tesla, but now we’re going to move up,” Akerson said. “It’s not going to be a mass-produced car.”

Toyota going very direct in its marketing of RAV4 EV
Marketing strategies used by automakers are changing at a consistently fast pace these days as unexpected trends and opportunities continue popping up; for example, what was initially a DVD rental company – Netflix – now produces and promotes its own TV series. Toyota has one of its own – marketing the all-electric RAV4 to go after tech-savvy early adopters who subscribe to DirecTV’s satellite service in Los Angeles, San Francisco, and San Diego. The TV ads are ending up on the TV screens of this micro-niche audience through what’s called dynamic advertising. Marketing data firms provide DirecTV with consumer information from credit cards and other sources to identify the most likely prospects that would have interest in the electric RAV4. These are consumers likely to buy new gadgets.

Already maxed out selling to early adopters? Don’t forget about nerds
Check out my post on Autoblog Green covering the launch of RideNerd.com. This could be the ultimate car shopping site for those consumers demanding detailed information on new car choices based on fuel economy, smog and greenhouse gas emissions, and cost of ownership. Nerds are hardcore researchers and analysts – and do comparison shopping to the nth degree.
Here are a few other points I would make about this unofficial market segment that could be of interest to those marketing new vehicles….

  1. They’ve loved gaming from an early age – Dungeons and Dragons, Playstation, X-Box, and Nintendo.
  2. They tend to have expertise in what’s being displayed at Comic-Con.
  3. They tend to have an odd sense of humor – enjoying gallows humor, social satire, and bizarre movie scenes such as the Knights of the Ni demanding shrubbery in “Monty Python and the Holy Grail.”
  4. They’re generally strong in mathematics and science during their school years.
  5. Being right about something is a very big deal; debates go over well unless the nerd can be proven wrong – then it doesn’t go so well.

If you’re wondering how I’ve become so well informed about the lifestyle habits of nerds…. Let’s just say I only performed above average in math and science classes, but I’m good at asking engineers (aka “engi-nerds”) and scientists to explain, in layman’s terms, the nuts and bolts. I’ve never been too interested in gaming and haven’t purchased graphic novel superhero biographies. I do watch the Monty Python movie whenever I get a chance.

Tesla-Mania:  Tweeting for engineering staff to deliver self-driving cars
Of course Tesla Motors CEO Elon Musk couldn’t let self-driving cars slip away as major automakers have announced plans to roll out autonomous cars by 2020. Musk and his company have covered it all – Tesla’s own branded version of fast chargers, battery swapping, the fastest commuter rail line concept ever conceived, customized lease packages, fashionable retail stores and service centers, Model S road trips, and chumming with loyal Twitter followers. Musk recently tweeted a “help wanted” ad on the social media site. He’s calling it an “autopilot system” for the Model S. Engineers who’d like work on that project for Tesla should contact the company at autopilot@teslamotors.com.

Car sharing is here to stay, and growing to large numbers
Navigant Research thinks car sharing is set to fly – from the current number of 2.3 million subscribing members around the world to more than 12 million by the end of the decade. Global revenue is expected to be growing by a large volume – from $1 billion this year to $6.2 billion in 2020. Automakers and car rental companies have jumped in the pool, taking on Zipcar (owned by Avis) and a few other upstart brands.

Chesapeake leaves natural gas vehicle market
Chesapeake Energy Corp. has eliminated its seven-member natural gas vehicle team, which had been responsible for part of the Oklahoma City-based oil and natural gas company’s efforts to develop additional markets for gas usage. Chesapeake has played an important role in adoption of NGVs and development of the infrastructure, and these vehicles play a major role in its own fleet, as Tim Denny, Vice President of Administration, explains in this video. Rich Kolodziej, president of Natural Gas Vehicles for America, said Chesapeake has been an important player, but other companies and organizations have taken on that role now.

Ford employees gaining access to workplace charging stations
Ford Motor Co. is joining ranks with what a few competitors have been doing – installing electric vehicle charging stations – at more than 50 of its US and Canadian offices and manufacturing plants. It’s being done to offer employees a perk – making workplace charging available. The automakers will start installing its 200 chargers in November and will continue rolling them out next year. Employees will be able to charge free for the first four hours on any Ford vehicle.

ARI’s Brian Matuszewski on what fleet managers are doing on the sustainability front

Matuszewski_Brian_ARIDoes your organization have a sustainability officer on staff? The last time I counted, there were 19 of these filled management positions at US-based vehicle manufacturers; nine at automotive supplier companies; 16 at transportation companies (including fleet management, cargo transport, and delivery companies); and 12 in the energy sector (and that includes NPOs and research centers). Not all of them have the word “sustainability” in their job titles. They’re typically responsible for carrying out environmental and energy efficiency initiatives for their organizations; it tends to cover the end result of the entity (such as manufacturing clean, fuel efficient vehicles) and internal processes such as energy efficiency, recycling, and waste management. Sustainability has to do with what gets handed over to future generations.

Brian Matuszewski is one of the few sustainability officers, so far, in fleet management. He serves as manager – strategic consulting, sustainable strategies at ARI, one of the top fleet management companies based in the US. Matuszewski spoke to me last week about his duties at the company – and what it’s like to be among the growing movement of management professionals focused on sustainability issues. ARI’s clientele includes fleets in the corporate, government, and NPO sectors. The Cornell University graduate previously served at the US Environmental Protection Agency, as an analyst at P&L in Mexico City, and joined ARI earlier this year.

He’s primarily focused on supporting clients’ efforts to operate sustainable fleets with alternative fuel vehicles, fuel efficiency, and research and consulting services. Fleet managers are interested in implementing organizational targets to reduce carbon and greenhouse gas emissions, supporting their country’s energy independence, and maximizing operational efficiencies and cost reductions. Matuszewski starts out by assessing fleet data and working with clients on integrating what makes the most sense for them.

Along with green vehicle acquisition decisions, Matuszewski said that ARI’s Environmental Management System helps clients monitor energy efficiency, manage waste going to landfills, implement recycling programs, and track baseline data globally. These days, fleet managers wear a lot of hats – their duties go way beyond fleet management; ARI assists fleets in reducing emissions and increasing efficiency in different facets of fleet management duties. Some fleet managers are working closely with sustainability managers within their organizations. “Fleet managers are getting some pressure from sustainability officers – buy more hybrids, etc.,” Matuszewski said. “The fleet manager’s job is a lot more comprehensive.”

European fleets are dealing with taxation on emissions, and in the US, several government and large corporate fleets are implementing sustainability initiatives – generally designed to meet carbon emissions targets. Smog emissions are not a priority for fleets these days due to advanced technologies that are commonplace in new vehicles; reducing CO2 emissions is a top priority for a growing number of fleets. Diesel powertrains are being tracked, too, and a lot of that is being dealt with effectively by regulatory compliance including diesel being sold now at fueling stations that “combust fuel in a clean way,” Matuszewski said.

As for alternative fuel vehicles, that varies fleet by fleet – plug-in electric vehicles, hybrids, natural gas vehicles, propane autogas, and biodiesel are being looked at. “Alternative fuels are not the only way to go green,” he said. “They’re optimizing fuel efficiency, and gasoline and diesel engine vehicles can be pretty clean.” At the end of the day, fleet managers have to meet their organization’s goals when making fleet vehicle acquisitions. “Whether you believe in global warming or not, you need to make a strong business case,” Matuszewski said.

You may notice that quite a few Millennials (along with Baby Boomers and Gen Xers) can get pretty fascinated and passionate about sustainability – and might end up choosing to travel down that career path, as did Matuszewski. “At the university setting, it’s become a hot topic and not a fad,” he said. The terminology now includes cleantech, clean transportation, and sustainability. Whether it be students majoring in engineering, architecture, public policy, or business management, a lot more of them are adding it to their degrees and are becoming active in campus in organizations such as Net Impact. “A lot of people coming from college see it happening and feel good about it,” he said. It makes a lot of sense to them – in creating economic growth and innovation. It was a hot topic at Cornell University while he attended, and he’s been seeing a lot of topical conferences taking place across the country.

Matuszewski also emphasized that automakers are not getting enough credit for embracing sustainability. For example, Ford’s Rouge plant now utilizes a zero emissions building, and soybeans are being used inside Ford vehicle interiors, he said. Fleets are going in that direction, too, and are making a solid contribution to sustainability through the volume of vehicles they’re purchasing, setting up onsite alternative fueling, and are part of building the infrastructure. ARI works with clients to extract and analyze data and “customize sustainable solutions,” he said.

Climate Change and transportation policies: Are skeptics right that it’s really a lost cause?

Climate change polar bear

Stakeholders striving to bring green transportation to the mainstream tend to articulate one, two, or all three of the following reasons for supporting their missions:

1. Petroleum: Reducing and eventually eliminating America’s (and Planet Earth’s) addiction to oil and all its negative implications on geopolitics and energy security, economic stability, and environmental issues.
2. Economics: A seismic shift has been in the works for years, long before the Great Recession, with globalization and adoption of new technologies driving change. As America sees several industries and jobs diminish or disappear, looking for new opportunities is a very good thing. Alternative fuels and vehicles offer the possibility of return on investments, OEM and infrastructure sales, good paying jobs, and sales tax revenue.
3. Emissions: On the regulatory front, along with sustainability policies being adopted by several corporations, green transportation tends to be primarily pushed forward to reduce tailpipe and carbon emissions. Air pollution and its health-hazard implications are there on the tailpipe smog side of the analysis, and for many organizations, climate change is the central issue.

I’ve recently heard persuasive arguments made that climate change is certainly occurring, but there’s very little humans can do about it. While reducing fossil fuel consumption and emissions is the clear path to reducing CO2 levels, it will only address one end of the scale; there are environmental forces – including what’s happening deep within our oceans – that are outside human-caused climate change and there’s very little we can do about it.

Whether these arguments have weight or not, it’s very important to stay current on what’s happening out there, as it will affect government and corporate transportation policies. So here’s the latest on the climate change debate….

The US Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) just released a report stating that the scorching hot heat that hit the north central and northeast US during the summer of 2012 was impacted by man-made climate change. The report’s analyses found evidence of human-caused climate change in half of the 12 extreme weather and climate events analyzed from last year. It started with unusual warmth in the spring season of 2012. “Approximately 35 percent of the extreme warmth experienced in the eastern U.S. between March and May 2012 can be attributed to human-induced climate change,” NOAA said about one study in the report. From another study in the report, NOAA stated, “High temperatures, such as those experienced in the [north central and northeast] U.S. in [summer] 2012 are now likely to occur four times as frequently due to human-induced climate change.”

The California Air Resources Board has a legal battle to deal with that’s attempting to undercut the Low Carbon Fuel Standard Program, which came out of AB 32 when it was enacted in 2006. Oil and ethanol companies want to void the rule and claim that the fuel standard discriminates against crude oil and biofuels producers outside California. There are two lawsuits in the works. CARB lost the federal court case and is waiting to find out if the Ninth US Circuit Court of Appeals will hear the case. Ethanol producer Poet LLC has another case filed with the state court claiming CARB violated the California Environmental Quality Act (CEQA) when it adopted the standard. Poet claims the rule unfairly penalizes ethanol producers by counting their indirect carbon emissions.

National Geographic’s September cover story, “Rising Seas,” shows the Statue of Liberty waist high in seawater. The lead feature article starts out with three statistics – 136 large coastal cities are now at risk from sea-level rise; 40 million people are at risk in those cities; and there’s $3 trillion value of assets at risk. A fold-out map shows what the planet would look like if all the ice caps melted – the southeast US is underwater; California doesn’t break off and sink to the bottom of the ocean, but somehow its central agricultural region becomes a giant lake. The global map forecasts 5,000 years into the future when the sea level rises 216 feet, perhaps much faster if we add five trillion more tons of carbon to the atmosphere. The average earth temperature will be shooting up from the current 58 degrees Fahrenheit to 80 degrees. Most of magazine’s special section focuses on tactics for surviving flooding and other consequences that come out of disasters like last year’s Hurricane Sandy. In June, Mayor Michael Bloomberg outlined a $19.5 billion plan to defend New York City against rising seas. Tim Folger, author of the article does mention the role of human decisions impacting melting ice caps…. “Unless we change course dramatically in the coming years, our carbon emissions will create a world utterly different in its very geography from the one in which our species evolved,” Folger wrote in the summary. “No matter how much we reduce our greenhouse gas emissions, Foster (Gavin Foster, a geochemist at the University of Southampton in England) says we’re already locked in to at least several feet of sea-level rise, and perhaps several dozens of feet, as the planet slowly adjusts to the amount of carbon that’s in the atmosphere already.”

In June of this year, President Barack Obama came back to the issue of climate change, which he’d basically avoided during his reelection campaign last year. In June of this year, the White House published the “Climate Action Plan” and the president gave a speech that month on climate and energy. The theme of the transportation portion of the report digs into increasing fuel economy standards and developing and deploying advanced transportation technologies as the way to address climate change. The report does start out with a quote from the president’s reelection inaugural speech in January where he mentioned the overwhelming majority of scientists convinced that climate change is for real ….. “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms,” he said. Our moral obligation is to hand over sustainable energy sources to future generations, according to the president. Obama addressed the topic during the G20 summit, though the issue of what to do about Syria was much more important. Five Scandinavian nations (Denmark, Finland, Iceland, Norway, and Sweden) agreed with the president on the goals outlined in the Climate Action Plan.

Transportation produced 31% of total carbon emissions and 26% of greenhouse gas emissions (GHG) in the US during 2011, according to the US Environmental Protection Agency. Electricity, industry, residential and commercial, and other non-fossil combustion make up the rest of carbon dioxide (CO2) emissions in the EPA analysis. GHG and CO2 emissions go through ebbs and flows of interest and action by government entities, researchers, and businesses. The published B2B and consumer surveys make the issues look vulnerable to fluctuation on priority lists for elections, investments, purchase decisions, and lifestyle concerns. Climate change is not going away as a pressing issue – especially in the wake of natural disasters and weather catastrophes – but it’s probably best suited for success in league with petroleum and economic issues.