This Week’s Top 10: VW starts up cash for clunkers program, GM and Honda building fuel cell stacks

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. VW settlement: Volkswagen will be managing a program similar to the federal government’s cash-for-clunkers program that started in 2009. The German automaker will be buying back or fixing as many as 562,000 diesel vehicles in the U.S. into 2019 as part of its diesel emissions cheating settlement. While the federal government gave out about $3 billion subsidizing gas-guzzling vehicles for fuel efficient vehicles, VW may spend about $10 billion on new-vehicle purchases to replace diesels with excessive emissions. VW has hired about 1,300 contractors to process its diesel program-related paperwork and staff call centers, shortening the average hold time to less than five minutes, said Hinrich Woebcken, who became VW of America’s CEO last April. More than 1,000 cars have been fixed and returned to the used-car market, he said.
  2. GM and Honda fuel cell plant:  Hydrogen fuel cell vehicle alliances are continuing to move forward, with General Motors and Honda announcing a plan to invest $85 million to build hydrogen fuel cell stacks at a factory in Michigan. The joint venture, Fuel Cell System Manufacturing, will begin producing the fuel cell systems around 2020 at GM’s Brownstown Township, Mich., plant south of Detroit. GM has been using that plant to produce battery packs for its hybrid and electric vehicles. The companies say that at least 100 new jobs will be created to make the hydrogen fuel cell stacks. In 2013, GM and Honda created a long-term, definitive master agreement to co-develop next-generation fuel cell system and hydrogen storage technologies. Sharing patented information has been part of the relationship with the companies collectively filing more than 1,200 fuel cell patents between 2002 and 2012. Earlier this month, Toyota, BMW, Daimler, Honda, and Hyundai, announced that they’re joining up with several other companies to invest a combined $10.7 billion in hydrogen-related products within five years. Thirteen automakers, and energy and industrial companies, are forming a hydrogen council to support hydrogen fueling and FCEVs; and to provide another channel beyond battery power to hit the zero emission vehicle mark.
  3. Model S No. 1:  The Tesla Model S was the world’s top selling plug-in electrified vehicle for the second year in a row. Tesla hasn’t confirmed the number but it’s estimated to be at 50,931 units sold last year. The Nissan Leaf still has the highest sales volume with 61,507 units sold in 2014. In 2016, the Leaf came in at 49,226 and second place for the second consecutive year. Chinese automaker BYD, which was the top global selling maker of PEVs last year, had three of the top 10 selling electric cars. The crossover SUV BYD Tang plug-in hybrid came in at No. 3; the Qin plug-in hybrid finished at No. 8; and the e6 sedan, China’s top selling all-electric car, came in at No. 9.
  4. Daimler and Uber partnering on self-driving vehicles:  Daimler AG has made an agreement with Uber Technologies to include the German automaker’s self-driving vehicles in Uber’s ride-hailing network in the “coming years.” Details haven’t been released on the agreement, but it does indicate Uber’s willingness to work with other partners beyond its Volvo alliance. The agreement doesn’t include plans to team up on jointly developing technology for autonomous vehicles, according to a Daimler spokesman. In other news, Uber CEO Travis Kalanick has been under attack on the internet for allowing Uber drivers to access JFK Airport in New York as taxi drivers refused to do business there; boycotting the airport was part of a protest by the taxi industry against the Trump administration’s recent decision to close the nation’s borders to refugees and people from predominantly Muslim countries. Uber issued a statement in support of Uber drivers who are citizens of Iran, Iraq, Libya, Somalia, Sudan, Syria, or Yemen and live in the US but have left the country, and won’t able to return for 90 days. “This means they won’t be able to earn money and support their families during this period,” he said. The statement also announced creation of a $3 million legal defense fund to help drivers with immigration and translation services. Lyft has also been pulled into the scandal and has agreed to donate $1 million over the next four years to the ACLU to defend the U.S. constitution.
  5. Accessing EVgo network:  Nissan and BMW are working with EVgo to increase public access to DC Fast charging stations across the U.S. That will come through access to an additional 174 locations in 33 states now available to all electric vehicle owners in those markets, and over 50 more planned to be installed in 2017, supported by the partnership. EVgo’s fast charging network now totals 668 dual-port DC Fast charging stations installed and available to all EV drivers across the U.S., with access to new chargers continually being added.
  6. Green Car Award winners named:  Three winners of Green Car Journal’s Green Car Awards were announced at a Washington Auto Show press conference. Named 2017 Connected Green Car of the Year is the Mercedes-Benz C350e, with the 2017 Green SUV of the Year awarded to the BMW X5 xDrive40e, and the 2017 Luxury Green Car of the Year going to Acura’s new NSX. The Mercedes-Benz C350e delivers all the luxury and driving enjoyment expected of the automaker’s popular C Class with the additional benefit of efficient plug-in hybrid power. BMW’s X5 xDrive40e iPerformance features appointments appreciated by BMW drivers combined with efficient plug-in hybrid power. The Acura NSX is powered by a 500 horsepower Sport Hybrid SH-AWD powertrain integrating a 3.5-liter mid-ship V-6 and three electric motors. It can go 0 to 60 mph in 2.9 seconds while still delivering over 30 percent better city fuel efficiency than the model’s previous generation.
  7. Ford in Super Bowl ad:  Ford Motor Co. will be running a 90-second commercial highlighting its mobility solutions on Super Bowl Sunday, tying into the opening of its FordHub center in New York showcasing these technologies and services. The Super Bowl ad highlights Ford’s advancements in ride sharing, electric vehicles, bike sharing, and self-driving cars. FordHub is a 2,900-sqare-foot hands-on experiential center located at the Westfield World Trade Center in New York City. Visitors will be able to try out exhibits and learn more about Ford’s vision as an evolving mobility company offering transportation solutions instead of just making vehicles.
  8. Dealers and EVs:  Audi of America President Scott Keogh spoke last week at the J.D. Power Automotive Summit on how Audi and other dealers can break through in selling and servicing plug-in vehicles. Dealers have been known to divert car shoppers away from EVs and over to higher profit margin traditional vehicles. Home-charging station installation and other services needed by EVs could be excellent service opportunities for dealers, he said. The German brand will be launching three new battery electric vehicles in the U.S. by 2020; it will be part of parent company Volkswagen’s campaign to launch 30 BEVs by 2025 in the wake of its diesel emissions scandal. Keogh said that Audi will need its dealers supporting the effort for the electrification campaign to succeed.
  9. SMART Center Gains $45 in funding:  Ohio Governor John Kasich last week announced that the State of Ohio and the Ohio State University are funding the $45 million Phase 1 expansion of the Transportation Research Center’s (TRC) all-new 540-acre SMART (Smart Mobility Advanced Research and Test) Center – a state-of-the-art hub for automated and autonomous testing, to be built within the 4,500 acres of the nation’s largest independent automotive proving grounds. TRC has been testing different types of vehicles – cars, trucks, buses, ATVs, military vehicles, specialty vehicles – and components on its 4,500-acre facility in East Liberty, Ohio for more than 40 years, including testing automated and autonomous vehicles over the last two decades. Phase 1 of the expansion will include a flexible platform and infrastructure; the industry’s largest high-speed intersection; the industry’s longest and most flexible test platform (a space the width of more than 50 highway lanes and the length of 10 football fields end-to-end); an urban network of intersections, roundabouts, traffic signals; and a rural network including wooded roads, neighborhood network and a SMART Center support building.
  10. Car2Go adds to its fleet:  Car2go will be adding thousands of 2017 model year Mercedes-Benz CLA and GLA four-door, five passenger vehicles to its fleet. The carsharing company anticipates that Mercedes-Benz vehicles will comprise the majority of its North American fleet by the end of 2017. The compay says this comes right after car2go’s recent upgrades to its member experience with the rollout of thousands of new, improved, car2go smart fortwo vehicles to its U.S. and Canadian network. “At Mercedes-Benz we see the four key pillars for future mobility as connectivity, autonomous driving, carsharing, and electrification,” said Dieter Zetsche, CEO of owner company Daimler AG. “Today we take another step toward that future by adding the new Mercedes-Benz CLA and GLA to Car2go’s North American fleet.”

Climate change is real for large institutions but it’s not making the case for cost-cutting fleets and consumers

Climate change polar bearWhatever you want to call it – climate science, climate disruption, or global warming – climate change is still coming up all over the map. Institutions of all types – large corporations, government agencies, research centers, and the United Nations – quickly set aside arguments that climate change isn’t happening. Their concern is whether it’s too late to stop devastating weather events, ocean acidification, melting ice caps, and massive losses of natural resources.

Most automakers and other major stakeholders tend to agree with making the case for climate change. Volvo Group renewed its partnership with World Wide Fund supporting its Climate Savers program. Renault-Nissan CEO Carlos Ghosn says that climate change is one of his company’s primary concerns. Honda has been pleased to announce that it’s further reducing carbon footprint by building a wind farm in Brazil that will produce enough energy to power its car factory in that country. Alternative Clean Transportation (ACT) Expo has made a partnership with Carbon War Room and The North American Council for Freight Efficiency for the Trucking Efficiency joint effort. Thousands of diplomats from around the world are meeting in Lima, Peru to make a United Nations agreement on the long dragged-out debate on implementing its Framework Convention on Climate Change.

Even though ground transportation makes up a big share of greenhouse gas emissions, it’s been a very tough sell to gain green vehicle acquisitions from fleet purchasing managers, truck transportation companies, corporate and government procurement officers, car shoppers, and consumers with influence over what their peers may purchase. Declining gasoline prices recently have had a big impact on retail car buyer decisions dipping on hybrids and electric vehicles. Those pump prices may drop down to $2 per gallon by Christmas-time at some US gas stations. OPEC failing to cut down on oil production should have something to do with dropping gasoline prices.

Fleets are shying away from investing in natural gas vehicles and fueling, and to some extent propane, when they can better contain costs with fuel-efficient internal combustion engine vehicles. Consumers are facing similar challenges – the economic collapse of 2008-2009 is over, but the environment has definitely changed. There are still a lot of layoffs going on, sending kids to college is incredibly expensive, medical coverage hasn’t been turned around yet by Obamacare, and the cost of living can quickly creep up on each month’s bill-paying cycle for many Americans. Making an investment in a new vehicle technology is a tough sell, and the early adopters are done with their fascination with electric vehicles and other alternative powertrains.

So how does one make the case for green vehicle acquisitions in this landscape? Wearing my consultant hat, and being a rabid consumer of news and peer conversations on the topic, here are a few strategies that seem to be working:

  • Make the case for return on investment (ROI). Fleets are finding they can reach payback in about two-to-three years in duty cycles after making the acquisitions; sometimes that happens within a year-and-a-half. After that point, the fleet saves money on that vehicle acquisition through fuel cost savings and sometimes through reducing maintenance costs.
  • Green vehicles support the organization’s sustainability priorities. Many government and corporate employees will tell you impressive stories about their leaderships’ programs designed around handing over a clean environment to future generations. Their fleet vehicles make up a lot of that environmental impact, and today there are many practical and viable options for reducing greenhouse gas emissions in transportation.
  • Don’t forget infrastructure. For alternative vehicle technologies to take off, they need a lot more fueling and charging stations out there. That takes a lot of funding and support, but the resources are impressive for those willing to build a network of leaders in the community. Go to your local Clean Cities Coordinator to get the ball rolling.
  • Speak to other reasons besides climate change. While many key stakeholders accept climate change as a given, some don’t and will shut down their attention and support if that’s the cause they’re asked to buy into. When you’re making the case for gaining funding support from your city council, corporate board, investors, or your spouse, also mention other top issues. These days, air quality and health hazards would make top of the list; independence from foreign oil imports still gains support out there (anti-OPEC is still a good one); and a broad sustainability perspective usually works, especially the idea of being responsible for what’s handed over to future generations.
  • Don’t forget economic growth. In this day and age of economic globalization, fast-changing technologies, and industry shutdowns, supporting clean transportation makes more sense. It’s usually part of political lobbying and grant funding applications; but it also goes over well with business leaders looking for growth opportunities as the economic landscape continues to become more of a moving shell game. Job creation, public and private investment, infrastructure development, training and education programs, and technology innovations generally support the case for growth in clean transportation.

How to work effectively with environmental groups to move clean transportation forward

environmental activists, Clean transportation has a symbiotic relationship with environmental groups. There is a wide gap between the business side and the environmental activist side on certain issues, but the crossover in common interests does show up on a regular basis. That can show up as lobbying for government clean vehicle funding programs, public awareness and education campaigns, reducing vehicle emissions, and debating the oil industry. If you’ve attended Clean Cities meetings and alternative fuel vehicle events, you’ve probably met a few of these environmental activists – many of whom drive hybrids and electric vehicles. Some of them participate on speaker panels. They may also be serving in an executive role in cleantech businesses like solar power installers, or in management at a government agency overseeing environmental issues like air quality and waste management.

All that being said, Green Auto Market – Extended Edition is now featuring a six-point guide to getting the most out of these relationships to further the cause of clean transportation. For those interested in getting a subscription and reading this article, visit this site. Here are the six points covered in detail in this article…….

  1. Support a moderate, deal-making approach – There may be one or two environmental issues that a clean transportation industry group or company supports, but five or six they don’t. Finding those common causes can support getting something passed through a legislature and other gains the clean transportation industry needs to see happen.
  2. Know their advocacy issues – The article presents a list of top priority issues that you’ll see in environmental group email marketing campaigns, public protests, petition signings, celebrity statements, lawsuits, and other tactics. It’s good to stay informed on these issues as they move through the political maze.
  3. Know the basics on leading environmental groups – A who’s who list with information to help you become familiar with these groups and to meet their leadership at events you’re attending.
  4. Support clean energy/cleantech jobs and economic growth – Groups see clean transportation as a vital segment in their sustainability campaigns – with economic benefits a large part in gaining their support. It makes for a convincing argument to gain more support from environmental groups, companies, governments, investors, and from the public, in this day and age of several US industries dwindling and more jobs going overseas.
  5. Understand the types of vehicles and transportation they support –Electric vehicles tend to gain the most support from environmental groups – representing freedom from oil addiction, and energy that can be produced through clean sources. Hybrids have been popular, too, with environmentalists, especially the Toyota Prius. Beyond EVs and hybrids, environmental groups tend to be supportive of, and impressed by, fleets deploying EVs and other alternative fuel vehicles. They also support a number of transportation policies in cities across the country.
  6. Have a “fracking” policy in place –Fracking so far hasn’t yet hurt support for natural gas vehicles, but it is a growing issue of debate and political and legal battles in several states.Controlling water usage and methane mitigation have been the focus of recent studies by academic and environmental groups that have emphasized making fracking a viable and responsible technique for cleaner natural gas extraction and storage. The federal government is moving closer to having more standards in place on fracking, and companies serving transportation and energy markets would be wise to adopt sound and practical policies.