For Today: Volvo starts Polestar electric brand, Reflecting on Uber CEO leaving

Polestar electric brand:  Volvo Cars just started a high-performance electric car brand, called Polestar. Volvo acquired Polestar Performance in 2015. Polestar Performance had been a business that Volvo hired to jointly develop high-performance versions of its vehicles. The two companies will tap into economies of scale and other resources Volvo offers. Polestar will reveal its business plan this fall. Thomas Ingenlath to be CEO at Polestar. He previously had helped Volvo increase sales of several vehicles including the XC90. Polestar will challenge Tesla and BMW i subbrand as a global brand.

Putting restrictions on influencing biofuels policy:  U.S. Democratic lawmakers have been concerned about the influence of billionaire Carl Icahn, head of oil refiner CVR Energy, on biofuels policy. Members of Congress have sent a letter to Environmental Protection Agency administrator Scott Pruitt asking him to clarify procedures that would prevent Icahn from influencing biofuels policy for personal gain. Icahn would like to see the federal government reconfigure the Renewable Fuels Standards for blending ethanol in gasoline. He’d like to see biofuels producers and blenders take on more of the cost – and that oil refiners and oil companies be relieved of some of the burden.

Uber CEO leaves: There’s been a lot of reflection lately on how Uber CEO Travis Kalanick has left his company, and how the world’s largest ride-hailing company has taken a dive since early 2017. Since starting up in May 2010, Uber invented a new segment of mobility – a business model adopted by Lyft, food delivery companies like Postmates and DoorDash, and dozens of other startups; and that’s put several taxi companies out of business. Uber became the most valuable private company in the world with Kalanick able to bring several venture capital backers onboard. The CEO was known for his aggressive style and for leading a workplace that hasn’t been good for women to work in; or many of the other male executives who’ve left in recent weeks. No matter what happens, the Uber brand name is likely to be carried forward as it’s become the icon of mobility services; maybe by another group of owners.

 

For Today: NRDC and Blue Green Alliance study on jobs in clean vehicles, INRIX surveys drivers on autonomous vehicles

Clean vehicle job creation:  Manufacturing clean vehicles directly supports 288,000 jobs in the U.S. economy, according to a new study released by Natural Resources Defense Council and the Blue Green Alliance. These are manufacturing and engineering jobs at more than 1,200 factories and engineering facilities in 48 states who produce technologies designed to improve vehicle fuel efficiency. Nine of these stats have 10,000 or more workers employed in these jobs, with the five of them – Michigan, Indiana, Ohio, Tennessee, and Kentucky – have plants building cleaner vehicle technologies supporting nearly 160,000 manufacturing jobs.

Tesla going to India?:  Earlier this year, news came out about Tesla getting ready to enter the India market. Going to China has produced very strong sales results for the carmaker, and India has been seeing a growing auto sales market overall. Last week, CEO Elon Musk tweeted that Tesla would not be going to India due to the government’s requirement that 30% of the parts in Tesla cars would have to be sourced within that country. Tesla tends to do things its own way, so it may be holding off on entering the country until that can be worked out; or not entering at all. The electric carmaker recently denied that it will be forging a joint venture with the Chinese government after Musk met with a high-ranking government official. Tesla has wanted to build its own factory in China, and that may not happen if the government requires a joint venture with one of its government-owned companies. Both governments would like to see more electric cars sold locally to hit targets on vehicle emissions.

Rebates from utilities:  Southern California Edison announced yesterday that it’s offering a $450 rebate to customers who own an all-electric or plug-in electric hybrid vehicle. The utility has been receiving state funds coming from California’s Low Carbon Fuel Standard program. Several electric utilities around the country are offering special rate programs for vehicle owners, including time-of-use (TOU) rates, to reduce the cost of powering an electric car or plug-in hybrid. In January, Pacific Gas and Electric Company (PG&E) launched the Clean Fuel Rebate for residential, electric customers who are electric vehicle drivers. It’s one-time $500 rebate for eligible EV owners can receive one rebate per owned or leased EV.

Mobility & Innovation:  INRIX study says consumers trust tech giants more than Uber for autonomous vehicles 
INRIX, a leading provider of traffic information, has released a survey report on what U.S. and European drivers think about the future of autonomous vehicles – and who should be doing it. The survey interviewed 5,054 drivers in the U.S., France, Germany, Italy, and U.K., to find that major automakers and tech giants should lead the way over ridesharing firms or Tesla.

“A new battleground is emerging between automakers, tech companies and ridesharing companies in the race to develop connected and autonomous vehicles,” explained Bob Pishue, senior economist at INRIX. “With hundreds of millions of connected cars expected to be on the roads within the next 15 years, the market share will be owned by companies that can educate drivers and gain consumer trust.”

The U.S. respondents preferred companies like Google and Apple providing self-driving cars., with 1.4 of them preferring tech giants over automakers. For those surveyed in the four European countries 1.5 times prefer major automakers (not including Tesla) over tech giants.

Ridesharing leaders Uber and Lyft had the smallest level of support as makers of autonomous vehicles. Following in a close second in the study is the category of newer carmakers that the study identifies as Tesla and “Fisker Motors.” That could mean the former Fisker Automotive, which is now split off into two companies – Henrik Fisker’s Fisker, Inc. startup and Wanxiang Group’s Karma Automotive.

For current connected car features and upcoming autonomous vehicles, many taking the survey believe that these technologies are bringing in a new era of vehicle safety. In the U.S., blind spot warning is the most desired new car feature; that’s followed by stolen vehicle warning/tracking, night vision, road incident alerts and re-routing, and rear/front collision alerts.

Millennials have less concern over their privacy through over their vehicle data than do Baby Boomers. That generation is also less convinced about how trustworthy autonomous vehicles with ll be, with 73 percent of Baby Boomers reporting in the study that they don’t believe autonomous vehicles will be safer than cars on the road today.

Delivery facing rapid change and growing demand in crowded metro areas

ford-transit-connect-vanDelivery is seeing a fast-changing environment, from packages to food. Delivery vans and small, high mileage cars (especially hybrids) are passing through a paradigm shift in who owns the vehicles and how they’re being used. While the U.S. won’t be switching over to delivery bikes and three-wheelers, commonly used in crowded Asian and European cities with narrow streets, competition for leadership in delivery services is getting fierce.

Some of this drive is coming from Amazon and Google taking on UPS and FedEx. The U.S. Postal Service is undergoing its own change. On the food side, the classic pizza delivery model is being taken over by app-based alternatives like UberEats, Postmates, and GrubHub. Companies entering the space also point to the state of fast-growing cities squeezed with bigger buildings, more cars and pedestrians, and less parking spaces. Delivery companies need to have smaller, nimble, and quick vehicles to meet surging demand. Younger consumers are getting spoiled by services like Uber and Lyft, where you can tap your phone and have a car in front of your place in less than 10 minutes. Older generations are tapping into these convenient services as well, in this new age of the on-demand economy.

Demand for quick delivery is driving change, along with the challenge of driving and parking in crowded city streets. Some of the carriers also support sustainability, removing vehicles from roads and switching over to alternative energy sources for their vehicles. UPS and FedEx have led the way here. Independent contractors delivering restaurant meals and fast food are preferring to drive a Toyota Prius or a small gas-engine car to keep costs contained.

The Ford Transit Connect van (as shown in the photo above) has been a hot commodity for deliveries. The 2017 model has an EPA-estimated rating of 29 highway mpg when equipped with the available 1.6L EcoBoost I-4 engine. It has substantial storage capacity for such a small vehicle – with 103.0 cubic feet of storage capacity designed for easy maneuvering and parking on tight city streets. The Azure electric Transit Connect van left the market in 2012 and doesn’t appear to be coming back. The other increasingly popular model for urban deliveries has been Mercedes-Benz’s Sprinter utility van. The next-gen edition may get an all-electric powertrain, according to the Detroit Bureau. The automaker is designing the vehicles with both batteries and autonomous-driving features; these features will be available as soon as 2018, the publication reported.

The federal postal service, which was originally created in 1775, took on another form in 1971 when it was transformed into the U.S. Postal Service as an agency of the U.S. government. Within that decade, rival carrier UPS would experience substantial growth in the U.S. and overseas and Federal Express had its first profitable years.

A few years back, USPS was outsourcing a lot of its package delivery to UPS. That started to change recently, especially with the promotion of postmaster general Megan Brennan last year. Under Brennan, USPS has ramped up same-day delivery in order to compete with rivals FedEx, UPS, and Amazon for the growing share of packages with tight delivery schedules. During this time, USPS made a deal with Amazon.com to deliver groceries in selected cities for Amazon when the online retailer wasn’t able to meet that demand.

Amazon is investing heavily to compete with UPS and FedEx in same-day deliveries. Amazon is trying out a few new services including Amazon Prime package deliveries and Amazon Fresh food delivery. Amazon Flex and Middle Mile Providers have recently started up in a few U.S. cities. If you ever see a white Ford Transit Connect with an Amazon logo, that van will be delivering goods through one of the new services.

Dave Clark, senior vice president of worldwide operations and customer service for Amazon, commented on Amazon Flex at an industry conference last year. Amazon Flex is an app-based delivery platform that “enables people to be their own bosses while earning $25 or more an hour,” making Amazon Prime Now deliveries, he said. Drivers will use their own car and smartphone, similar to other popular delivery and ride-hailing services on the market. Amazon is usually promoting an offer for customers that includes free two-hour deliveries. The claim of paying drivers up to $25 an hour sounds quite optimistic, since drivers at other mobility services are typically making $10 to $15 an hour.

With Middle Mile Providers, fleet owners with carrier licenses through the U.S. Department of Transportation will be able haul loads for Amazon. Drivers must be employees of the delivery provider and will likely be required to carry commercial driver’s licenses. They need to drive a cargo van or similar vehicle with at least 200 cubic feet of volume. It appears to be in startup phase with job openings listed in Seattle for a division called Middle Mile Logistics Technology.

In June, Amazon launched a British version of its AmazonFresh food delivery service to break into the UK grocery market. AmazonFresh has previously been deployed in a few U.S. markets, too.

UberEats is counting on the food delivery service being worth the investment. Started in test mode about two years ago, it became its own mobile app in the spring of this year. Uber launched food delivery in Chicago, Houston, Los Angeles, and San Francisco earlier this year. The initial launch was in Toronto; other growth markets include Atlanta, Austin, Dallas, Melbourne, New York, Paris, Seattle, and Washington, D.C. After trying it out as part of the Uber experience, the company realized that didn’t make sense, with both of these experiences being separate from each other; they needed their own brand names and separate mobile apps.

Self-employed drivers are asked to gather in select parking lots for UberEats and pickup packaged orders for the day from partner food services. They’ll deliver lunch or dinner to workplaces or homes in the vicinity. That differs from other food delivery services where the driver will be picking up food orders directly from the vendors and delivering them to the customers.

Food delivery has been taking off like a rocket trajectory over the past year in transactions. Making the business profitable and finding the right financial backing has been tough. Bloomberg reported a story last week about on-demand meal delivery service Caviar’s parent company trying to sell it off and find better partners in food delivery. Payment processing company Square reportedly tried to unload Caviar early this year. Square reportedly had discussions with Uber, Grubhub, and Yelp between late last year and the start of 2016, but disagreements on pricing ended the talks. With Square backing away, startup Caviar is in a tough position in a very competitive market.

UK’s Deliveroo was funded about £250 million ($306 million) earlier this year, and Berlin-based Delivery Hero was rumored to be lining up an IPO, according to VentureBeat. In the U.S. GrubHub, DoorDash, and Postmates have grabbed a lot of attention; Uber and Lyft riders are known for tapping into these delivery services and tend to look for special discount promotions on meals. Private equity funds are coming in for these food delivery companies, but they haven’t been perceived yet as hot commodity investment opportunities like Uber has been able to win over. Postmates is working hard to be seen as unique in the marketplace – the only delivery service out there that will pick up orders from anywhere that the customer requests – a restaurant, donut shop, BevMo! liquor store, grocery store, 7-Eleven, or some other business.

The business model for food delivery companies was borrowed from Uber and Lyft, with a similar mobile app; driving directions and alliances with Waze and Google Maps; it’s all right there on the phone for customers, from ordering to paying; there are special offers with local and chain restaurants, juice bars, coffeehouses, and fast food stores; and all the drivers are independent contractors passing basic vehicle and driving record checks.

Google has been getting ready to take on Amazon Prime for a leading position in fast, on-demand deliveries and has backed away from food delivery. Brian Elliott, general manager of Google Express, told Business Insider that the company plans to spread its coverage from about 20 states and regions to the entire country by the end of the year. To get there, Google Express decided to close down part of its grocery business and stop selling perishables; these were pilot projects started earlier this year in parts of San Francisco and Los Angeles.

Fast delivery is becoming more important for firms to retain their market presence. Amazon was getting a lot more searches and orders placed on a wide variety of products like bottled water and flat screen TVs. Google Express was a way for Google to reinstate itself as the go-to choice for product searches, and to make it easier for people to purchase the goods they’d searched for.

Why Robert Downey Jr. tapped into Tesla’s Elon Musk for “Iron Man” character

Robert Downey Jr in Iron ManWant to grow your market capitalization five times in less than a year, up to $15 billion in market value? Well then, get a celebrity to head your company. Tesla Motors CEO Elon Musk has become an expert at grabbing regular-and-social media attention; whether that be through unveiling the Supercharger fast chargers for the Model S or teasing the public with his Hyperloop transportation concept that can make it from San Francisco to Los Angeles in 45 minutes.

“Iron Man” director Jon Favreau and Elon Musk himself say that Robert Downey Jr. did, in part, base his superhero character Tony Stark on the CEO of Tesla Motors and SpaceX, and a co-founder of PayPal. This character is a true entrepreneur – a big risk taker with a big ego who will bet everything to change the world, according to Rocketboom. Musk heads SpaceX, the first civilian space travel company to link up with the international space station, which took place in May 2012. He’d done very well in taking Tesla public and seeing the stock price skyrocket soon after its first quarter earnings were announced.

Tesla’s market cap recently made it equal to Italy’s Fiat and France’s PSA Peugot Citroen combined, says The Detroit Bureau, and it was added to the Nasdaq 100 stock index. That can certainly change day to day in stock trading; more recently, Tesla stock tumbled 14% after an ominous report from Goldman warning that its stock was overvalued. Tesla’s stock prices had been surging since its first quarter earnings report – and that was the first quarterly profit for the company.

General Motors CEO Dan Akerson has his eye on how well Tesla Motors performs; he thinks it has the potential to be a disruptive force to the automotive industry and he doesn’t want to be caught off guard. Akerson assigned a small team to study Tesla and how it might threaten GM’s business.

A few reasons I think Tesla Motors is seeing Model S sales grow, and that stock prices could stay above $100 a share…

  1. Musk and his staff – including former chief strategist at Apple’s retail stores, George Blankenship – have been highly skilled at going viral with their messaging for a pretty small marketing spend. Musk is addicted to Twitter, and the company is great at teasing the media and their audience with unveiling events.
  2. Tesla showrooms grab your attention. Dealer associations may win in the courtroom, but Tesla is placing enough retail stores in the style of Apple to inspire rabid fans.
  3. Ride and drive events –They’ve been skillfully scheduled and promoted. Once you get behind the wheel of the Model S, it’s easy to get hooked.
  4. They’re very good at utilizing Musk’s looks and charisma in interviews and TV guest appearances. Elon Musk has his fans on Wall Street, along with bloggers and Twitter followers who dig superheroes.
  5. Great product:  Sit in a Model S and check out its double screen dashboard, connectivity and functionality, and feel its powerful torque once you press the pedal, and you’ll be very impressed. Consumer Reports just gave the Model S its highest rating, with 99 out of 100 points.
  6. If the price is too high, check out the funding deals through its “revolutionary” financing package. Guaranteed resale value is also helping close deals.

Stay tuned for more info on fast-as-the-speed-of-light Hyperloop. “Will publish Hyperloop alpha design by Aug 12,” Musk posted on his Twitter page. Musk first mentioned the Hyperloop a year ago at a PandoDaily event in Santa Monica, Calif. – what he called a “fifth mode of transportation” and what he thinks is a cross between a Concorde, a railgun, and an air hockey table. He estimated it would cost about $6 billion to build a San Francisco-to-Los Angeles Hyperloop; that’s only about a tenth the cost of a plan that’s been floating around the state for years for a proposed high speed rail between the two cities. There’s a partnership that he may be developing a working relationship with – a company that could potentially build the Hyperloop to go 4,000 miles per hour. Pretty exciting stuff.

Why driving cars is dropping in popularity in Southern California

traffic in LASouthern California has always been a key bellwether for transportation trends in the US and in the world. The region that had one of the best mass transit systems through the 1940s became the hub of auto sales and traffic congestion starting in the 1950s. Now that trend appears to be changing course.

Automotive News pointed to several key indicators showing that the love affair with the car is fading…

  • Light rail has been expanded 26% in the past eight years with 18 miles more of track coming by 2015. Bike lane networks have doubled to 292 miles. Bus and train ridership is growing – up nearly 5% in May 2013 versus May 2011.
  • Even more significant – the total number of passenger cars has declined in Los Angeles. The market rebounded from the recession, but the 2012 sales numbers were 28,000 less than five years earlier.
  • Consumers have a lot more options that gain their interest away from traditional cars – electric cars, hybrids, bike lanes, light-rail, and car-sharing plans such as Zipcar are on the rise.
  • Toyota and Honda have sold a lot of small-to-midsize cars in this market for several years and are putting a lot of emphasis now on hybrids, natural gas vehicles, and plug-in electric vehicles.
  • Traffic congestion is getting worse – LA had its longest congestion-related delays in the US in April. The average driver wasted 5.2 hours, up from 4.5 hours in April 2012.
  • Sharing rides is gaining in popularity especially with young people, through social circles, and there’s more interest in bus and rail rides and car sharing.