For Today: Musk taking first Model 3 as birthday present, PEVs offer way for automakers to hit fuel economy target

Musk gets birthday present: Tesla started production of the Model 3 on Friday, and CEO Elon Musk will be taking the very first one off the line. Musk tweeted on Saturday with two photos of the first model to roll off the production line. Tesla board member Ira Ehrenpreis had been the first make a down payment on the Model 3, but had turned over his rights to the first production model to Musk as a birthday gift. Musk, who turned 46, had previously purchased the very first Tesla Roadster and Model X, but not the Model S. The company is scheduled to deliver 30 of these units by the end of this month and aims to reach 20,000 units per month by December.

Oregon offers rebates:  Oregon is offering a plug-in vehicle incentive similar to California’s. Cars with batteries up to 10 kilowatt-hours, will receive a $1,500 rebate and electric cars with larger batteries will get $2,500. It’s part of a larger $5.3 billion transportation funding. It took the state a few years to get there, with purchase rebates having failed a few times in previous legislative sessions. This time, $12 million was included for rebates of six years for all-electric and plug-in hybrid vehicles with a base price of $50,000 or less.

Hitting the federal mpg standard:  Plug-in electrified vehicles may be the way that automakers hit the federal standards for corporate average fuel economy, according to a new study. A team from the University of Central Florida and MIT has found that the federal fuel economy standard offers an effective policy solution that will increase adoption of PEVs. That will be the case whether implemented alone or with another policy such as government incentives, according to the study. The current standards determine an automaker’s compliance based on annual production volume-weighted average fuel economy of the automaker’s fleet of total vehicles manufactured. The Trump administration is expected to wait until the original deadline of April 2018 to finalize the second phase of rules through 2025; and will probably soften the standards. Selling much higher volumes of PEVs would resolve that problem; automakers will be motivated to build a wide selection of PEV models and market them effectively to hit federal targets, even if softened by the Trump administration.

For Today: Ford Escape plug-in coming, Avis managing Waymo’s autonomous vehicle fleet

Escape plug-in hybrid:  Ford has a new plug-in hybrid in the works, which will be built on the Escape crossover SUV. It may not arrive until the 2020 model year, and it’s slated to replace the C-Max Energi plug-in hybrid. Ford has been disappointed with the C-Max Energi’s sales performance, though it has been doing a little better lately. Ford has been playing with the idea of a PHEV Escape for about a decade, having tested out a small fleet. Hybrid versions of competitors are out there with the Toyota RAV4 and Nissan Rogue, and an expectation that Honda will bring out a hybrid CR-V.

Fuel-efficient Camry hybrid:  Toyota announced that the 2018 Toyota Camry Hybrid will be delivered to dealers later this summer with a better, more fuel efficient hybrid system. The automaker said the LE option received a 52 mpg combined highway estimated-EPA rating, the same as the 2017 Prius hatchback gets in EPA combined rating. The Camry Hybrid will be priced at $27,800 for the LE to $32,250 for the XLE, but there will be an additional cost for a delivery, processing and handling (DPH) fee. Fuel economy improvements come from a few changes being made, including a new Total Hybrid System (THS II) through a more-efficient transmission system.

Waymo inks deal with Avis:  Alphabet’s self-driving car division, Waymo, has signed a deal withAvis Budget Group for the car rental company to manage Waymo’s fleet of autonomous vehicles. Avis will service and store Waymo’s Chrysler Pacifica plug-in hybrid minivans, with Waymo owning the vehicles and paying Avis for these services. It will start out in Phoenix, where Waymo has been doing much of its testing lately. The agreement will cover multiple years but won’t be exclusive. Avis has been very active in the mobility space, having purchased carsharing market leader Zipcar a few years ago.

Tesla seeking joint venture partner and other interesting news from China

If you take a look at which global automakers have joint ventures with government-backed Chinese companies, you’ll notice only one missing: Tesla. Even Chinese automaker BYD, the global leader in electric vehicle sales, has a JV partnership with Daimler through Shenzhen DENZA New Energy Automotive Co., Ltd.

Tesla’s place in China may be changing soon. Last week, Tesla CEO Elon Musk met with Chinese vice premier Wang Yang. China’s Xinhua news service posted a photo from their meeting on Twitter. It’s the first time that Wang has met with only one automaker executive, according to Li Anding, a former automotive reporter for Xinhua and now a consultant with automakers doing business in China. “Wang usually meets with groups of people,” he said.

Li predicts the meeting and Twitter post are part of talks between the carmaker and government about creating a joint venture partnership for Tesla to manufacture electric cars locally.

A high-level official from China’s auto lobby said that Tesla has been holding meetings with potential partners in Chinese cities. Musk’s meeting with Wang, who previously headed the Guandong province, suggests that the province is a potential region for Tesla to build another plant beyond Fremont, Calif., and its Nevada “Gigafactory” battery plant.

Going this route would eliminate the steep 25 percent tariff Tesla currently pays to China on its imported cars selling in that country. The market has become the most important in the world for plug-in vehicle sales, and it’s going that way for Tesla as Musk has said in the past. Tesla earned $1 billion in revenue there last year, compared to $4.2 billion in the U.S.; and the electric carmaker has been exploring building a new factory in China in recent years.

Tesla could be well positioned in the near future to reach China’s two market segments for plug-in vehicle sales:  wealthy consumers looking for luxury vehicles, and workers who’ve moved to the city and need their first car.

Luxury carmakers see China as being vital. The BMW Brilliance alliance is the German luxury performance carmaker’s platform in China. On the affordable end for new car buyers, the Tesla Model 3 is expected to be very competitive against BYD and others in the China market. Taking away the 25 percent tariff by establishing a JV production plant would be part of bringing down the price of all Tesla vehicles sold in China – and offering a much more profitable prospect for the U.S. company.

As covered last week in Green Auto Market, the Chinese government may very well enact a steep mandate that is making automakers quite anxious – and is moving them to increase their plug-in vehicles sales volume in that market.  China’s Ministry of Industry and Information Technology proposed last fall that “new energy vehicles” make up at least 8% of new vehicle sales as soon as 2018, and that would go up to 12% by 2020. Included in those zero emissions vehicle numbers (based on California’s ZEV structure) would be all-electric, plug-in hybrid, and fuel cell vehicles covering light, medium, and heavy duty vehicles. That includes all new cars, trucks, and buses sold in the country.

The national government is considering blocking or delaying these proposed measures after industry feedback concluded that the targets are overly ambitious. It may be finalized one way or another by June, according to a government official. Even if that measure fails, the move toward solidifying China as the world’s largest plug-in vehicle market isn’t expected to go away, but demand has started to soften this year.

Sales of plug-in hybrid and battery electric cars fell nearly 5% in January to March compared with the same period a year ago, China’s Association of Automobile Manufacturers said. Analysts say that demand has dropped this year from the dramatic increases over the past three years due to a 20% cut in subsidy payouts by the national government this year, barriers being raised for entry of new car models, and debate over easing the proposed sales mandate for new energy vehicles.

Another sign that foreign companies won’t be backing away from China came last week from Tesla’s battery partner, Panasonic. The Japanese company announced last week that it had an opening ceremony for a new automotive lithium-ion battery factory in Dalian, China.

The company says that the factory is Panasonic’s first automotive battery cell production site in China, and it’s part of a corporate goal to have strong footing in the plug-in vehicle battery market. “Panasonic will further strengthen its global competitiveness in the automotive battery industry by the establishment of production sites in Japan, the U.S., and China,” the company said.

What studies are finding: Adoption of clean vehicle technologies will stay small-scale for now but we’re likely approaching the cusp of change

Nissan Leaf on dealer lotWhile plug-in electrified vehicles did break the 1% mark for total U.S. new vehicle sales last month, and hybrids moved back to being over 2%, we’re still a long ways away from them making up a substantial share of the market. The same is true for advanced fuels like renewable diesel – sales volumes are up but it’s still very early in adoption of these new alternative fuels.

There are a few studies that expect market forces to continue shifting away from petroleum and toward clean, renewable energy and fuels.………

Driver survey on PEVs:  Altman Vilandrie & Company, a strategy consulting group, surveyed more than 2,500 U.S. consumers in July and polled more than 20 automotive industry experts. Despite significant advancements in PEV technology, 60% of American drivers said they were unaware about electric cars and 80% have never ridden in or driven one. The survey shows that a perceived lack of charging stations (85%), high costs (83%) and uncertainty over duration of charge (74%) were the top reasons for not wanting to purchase a PEV. Most of the survey respondents who’ve been inside an electric car enjoyed it; and many more would purchase a PEV if lower-priced models were available, with $35,000 being the price point asked about.

“While the EV adoption rate is low, there are signs of strong latent demand in the marketplace,” said Altman Vilandrie & Company Director Moe Kelley, who co-directed the survey.  “The auto industry still needs to make more low-priced models available to consumers, as well as finding a way for more drivers to try out an EV.  If those things happen we should see the EV adoption rate accelerate.”

PEVs could be one third of global sales:  PEVs could make up 15% to 35% of global new vehicle sales in 2040, according to IHS Markit. While still making up a very small percent of global sales, the consulting firm points to 2016 sales being up more than 1000 percent since 2010, a trend that IHS Markit expects to continue with the potential to make PEVs more than one third of the new vehicle sales in 2040. China and Europe, where government policies are favorable to PEVs, were behind the consulting firm’s estimates that PEVs could comprise over half of their new passenger vehicle sales in 2040.

“Significant advances in battery technology, financial support from governments, regulations and values of millennials will be key factors leading to increases in electric vehicle adoption,” said Jim Burkhard, study co-director and chief of research at IHS Markit for crude oil markets and energy scenarios.

IHS Markit will be conducting a comprehensive new study to be completed in 2017, Reinventing the Wheel. Other critical factors to be examined by the study include the potential impacts of car sharing, ride hailing and autonomous vehicles on the transportation ecosystem.

“The key question is whether we are approaching a transformative shift akin to the first decade of the 20th century, when the internal combustion engine, cheap gasoline, bicycle technology and mass production combined to usher in the automotive age,” said Dr. Daniel Yergin, vice chairman of IHS Markit and author of The Quest, which tracked the beginnings and growth of the auto and oil industries. “Converging developments along multiple tracks are leading us to focus on this important question.”

Low carbon fuel standard becoming methodology of choice:  Lux Research conducted a detailed study concluding that California’s low carbon fuel standard is more likely to become the industry standard for governments to hit emissions reduction targets over the federal government’s biofuel blends policies. New policies are coming out supporting the LCFS models for being “technology-agnostic carbon intensity metrics,” according to the study. Lux concludes that well-to-wheel analysis will become the analytical model with more governments adopting the carbon intensity model. That model measures the amount of carbon by weight emitted per unit of energy consumed. Feedstock, process technology, and power sources in well-to-wheels metrics were analyzed in the Lux study. The report said that renewable diesel and conventional electricity will be the near-term winners in low-carbon transportation fuels, followed by renewable electricity.

In separate news, Canada moved forward in adopting the low-carbon fuel policy. Last month, Minister of Environment and Climate Change Catherine McKenna announced that Canada will adopt a national clean fuels standard. Similar guidelines previously adopted in California, Oregon, and British Columbia, were studied in the adoption of the new Canadian standard.

Municipalities, fleets, and energy companies have been tapping into California’s policies in recent years. Renewable diesel is the fuel source for vehicles in the cities of San Diego, Oakland, San Francisco, Long Beach, and other California municipalities. Propel Fuel is brining renewable diesel and other alternative fuels to retail gas stations around the state. DuPont is bringing its cellulosic ethanol to the state; and Clean Energy is tapping into state incentives to get its Redeem renewable natural gas product moving forward.

Diesel fading away even farther:  Earlier this month, the mayors of Paris, Madrid, Athens, and Mexico City announced plans to remove diesel cars and vans from their roads by 2025. Other cities are being urged to do the same to reduce air pollution. This development coincides with a UBS forecast that diesel will “almost disappear” from the global vehicle market within 10 years. The fossil fuel faces serious competition from cheaper electric cars and tougher stances by regulators, according to the report by the global firm providing financial services.

Falling costs of PEV and hybrid vehicles is taking away the once-competitive price advantage diesel vehicles had over the new technologies. Emissions rules are tightening up, along with soured public sentiment, over the Volkswagen diesel emissions cheating scandal. UBS forecasts that sales of diesel vehicles will fall from 50% to just 10% in European new vehicle sales. Diesel had been a viable option for reducing emissions, as they emit about a fight less carbon than petroleum equivalents. It’s no longer the easy option it once was, with tightening rules over nitrogen oxide emissions, which are emitted by diesel engines.

The study predicts that 48-volt electrical systems, sometimes called “mild-hybrid,” will be part of the transition away from diesel cars. UBS predicts that sales of 48V cars that increase fuel efficiency will overtake diesel sales globally in 2021, and will account for about 25% of all light passenger vehicles sold by 2025. The study does forecast that diesel would remain dominant in trucks and large SUVs.

This Week’s Top 10: Fisker Inc. bringing ‘spiritual successor’ to market, Tesla doubling Fremont plant size

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. fisker-inc-logoFisker Inc.:  Henrik Fisker is bringing his brand name back to the electric car space through Fisker Inc., which will be launching a car he refers to as the “spiritual successor” to the Fisker Karma plug-in hybrid sports car. The new model will probably be all-electric, and will be revealed in the second half of 2017. He says it will have a driving range of more than 400 miles, and will come equipped with an industry-leading battery life that will potentially match the life of the vehicle. The company has a battery division called Fisker Nanotech based in northern California. Jack Kavanaugh will serve as chairman of Fisker Nanotech, while Fisker will be chairman and CEO of Fisker Inc. He will lead other business units including being head of design and product strategy at VLF Automotive, the company he founded with former GM executive Bob Lutz and Gilbert Villarreal in January 2016. Fisker Automotive went through a structured bankruptcy auction in February 2014, where Wanxiang Group bought certain assets, excluding the Fisker brand name. Fisker also retained his logo, as you can see in this article.
  2. Tesla doubling plant size:  Tesla Motors has filed for a zoning proposal in Fremont, Calif., to double in size its assembly plant and meet a 500,000 vehicle annual production goal. In May, CEO Elon Musk said the company would be building a million vehicles a year by 2020, but that will also involve setting up more factories overseas. Tesla has set a goal of producing 500,000 Model 3s a year from 2018 to 2020. Earlier this year, the company said that about 373,000 pre-orders of the Model 3 had been placed. Tapping into the capital needed to ramp up factories will be difficult for the company. Last week, Goldman Sachs downgraded Tesla Motors soon after Morgan Stanley did the same. That came at a bad time – right before Musk begins rallying investors for a new fundraising round.
  3. Battery partnership:  Faraday Future announced a partnership last week with LG Chem to supply lithium-ion cells for the startup’s electric supercars. Both companies have agreed to collaborate on EV battery technology that they say will have the world’s highest energy density for a production automotive battery. These cells will be incorporated into Faraday Future’s VPA platform, the company’s “universal and scalable modular battery structure.” LG Chem says it now has more than 20 global automaker as customers.
  4. Formula E:  Mercedes-Benz will be gearing up to race in the 2019/18 Formula E electric racing series. Pending approval from FIA World Motorsport Association, Mercedes-Benz’s British-based subsidiary, Mercedes-Benz Grand Prix, hopes to bring its experience in motorsports over to electric racing. The automaker gained a lot of electrified racing experience through its hybrid Mercedes-AMG Petronas Formula One racer. Mercedes-Benz is expected to use Formula E as a marketing platform for its newly created EQ electric car sub-brand.
  5. Concerns over Autopilot 8.0:  Consumer Reports tested out Tesla’s new Autopilot system 8.0 upgrade. The changes were appreciated, and the magazine encouraged the automaker to keep working on making the system safer. One issue is that drivers have time to drive hands-free for about a minute and even longer on highways. The publication thinks the Autopilot name should be changed, since it’s not really in autopilot mode. There’s also concern that system remains a beta release. Tesla CEO Elon Musk had said last month the system isn’t really a true beta release, but the company labels it a beta release to reduce people’s comfort level when turning the system on – keeping them more aware and safe.
  6. STORM electric motorcycle trip:  Cal State LA College of Engineering, Computer Science and Technology and EcoCAR team today are welcoming on campus a team of students from Eindhoven, Netherlands, going around the world in 80 days with their STORM Wave electric motorcycle. STORM Eindhoven left the Netherlands to tour the world on Aug. 14, and traveled through Europe, the Middle East, and China before coming to the U.S. A short impression of their tour so far can be found through this  link. The motorcycle runs on a battery pack designed by Eindhoven students. The pack consists of 24 cartridges that have 28.5 kWh of energy, which enables the motorcycle to travel 380 kilometers (236 miles) on a single charge. It is possible to adapt the whole pack to enable a lighter motorcycle for a more sporting driving style. The bike will travel down the West Coast and through the South and Midwest before finishing its tour of America in New York on Oct. 26. STORM will make stops in Sacramento, San Francisco, Los Angeles, Phoenix, Dallas, Columbus, and Pittsburgh, among others. During each stop, the STORM team will meet with universities and companies interested in smart urban planning and sustainability to demonstrate the potential of sustainable transportation and recharge the motorcycle. Track and trace the team live on this page.
  7. EPA on ethanol blends:  A new U.S. Environmental Protection Agency proposal would reclassify ethanol blends above E15 as “ethanol flex fuels,” potentially opening the door to wider use of these blended fuels. The proposal would place fuels with 16 to 50 percent ethanol in the same category as E85. The agency believes its proposal could encourage more interest in flex-fuel vehicles and the “blender pumps” needed at fueling stations to add greater amounts of ethanol to gasoline. Some gas station owners have expressed concern that there’s a lack of consumer interest in blends of E15 or higher, and the cost of installation isn’t worth it. It’s not clear whether the new proposal will settle the oil vs. biofuel industry battles, or if advanced biofuels would be supported through the revised rules. The EPA is expected to put its new proposal for adding more ethanol blends to the flex-fuel category up for public comment in the near future.
  8. Hydrogen and fuel cell day:  U.S. Department of Energy’s Argonne National Laboratory released a Q&A guide to commemorate October 8th as National Hydrogen and Fuel Cell Day. Check out the Six Things You Might Not Know About Hydrogen guide. Here’s an interesting one: The day is celebrated on October 8 (10/08) because the atomic weight of hydrogen is 1.008 atomic mass units…. Hydrogen can also be used as a way to store energy, and this use has the potential to have a large impact on our future…….. Current commercial fuel cells use platinum, a rare and expensive metal, as the catalyst. Researchers are working on new catalysts that use less of this expensive metal, or that don’t need platinum at all……. Argonne operates four different divisions where labs conduct research on hydrogen and fuel cells.
  9. Wheego and Valeo win self-driving car permits:  Wheego Electric Cars and Valeo North America have received permits to test self-driving cars on public roads in California. Wheego is based in Atlanta and is led by former EarthLink Inc. president Mike McQuary to design and sell electric vehicles. Valeo is a unit of French auto supplier Valeo SA, which joins several other parts makers trying to develop technology that auto makers may need to put self-driving cars on the road. Cruise Automation received a permit before General Motors Co. in March agreed to acquire the startup in a deal valued at $1 billion.
  10. 48V taking off:  Navigant Research just published a report on the increasing importance of 48V systems adding to fuel efficiency and performance. While 12V has been the standard for many years, 48V is taking off for stop-start systems combined with other technologies including electric turbochargers that can increase efficiency in traditional gas engine vehicles without the adoption of hybrid or plug-in vehicle capability. For comparison purposes, several plug-in electric vehicles have battery packs with about 360 volts. According to Navigant Research, global sales of light duty stop-start vehicles will exceed 61 million by 2025, accounting for 59% of all light duty vehicle sales. Of these, about 15% will feature 48V components.

Why utility vehicles will play an increasingly important role in the future of plug-in vehicles

2016-toyota-rav4If you were to study U.S. new vehicle sales data and compare it to Plug In America’s plug-in vehicles directory, you’d see something that the two sources have in common: popularity of utility vehicles. By utility vehicles, I would include SUVs, crossovers, vans, and hatchbacks. If you take a close look at new vehicle sales in the U.S. and upcoming vehicle launches announced by automakers at the Paris Motor Show, you can get a look at the increasingly important role these vehicle categories will be playing.

“Crossovers and vehicle electrification are again expected to be key reveals at the event,” said Ian Fletcher, the principal analyst for IHS Markit, at the Paris Motor Show. “The key trends are being determined by a combination of consumer demand – in terms of the number of crossovers being revealed – and legislative emissions factors, through a focus on electrification.”

Plug In America lists 27 all-electric and plug-in hybrid 2017 model year passenger vehicles available in the U.S. market on its website, and of those I would break out 12 of them being utility vehicles. For September 2016 new vehicle sales in the U.S., the largest sales category, by far, was crossovers. Combined, crossovers and SUVs made up 555,497 of the 1.4 million units sold in the U.S. during September, according to Autodata Corp. Midsize and small cars continued to be sizable categories, but overall, light-duty truck segments continue to outsell cars in the U.S. as gasoline prices stay down and the popularity of utility vehicles increases.

Americans have become more interested in buying utility vehicles over the past decade, especially crossover utility vehicles. For crossovers and SUVs, top selling models in the U.S. lately have included the Toyota RAV4 (see photo above), Honda CR-V, Ford Escape, Nissan Rogue, Ford Explorer, Chevrolet Equinox, Jeep Cherokee and Grand Cherokee, Toyota Highlander, and Subaru Forester and Outback. There are no plug-in versions of these vehicles on the market in the U.S. The Toyota RAV4 EV was pulled from the market about two years ago, while a hybrid version of the RAV4 came to market earlier this year. Toyota also offers the Highlander Hybrid.

The Toyota Prius is credited for popularizing hatchbacks, with owners appreciating the ability to lift the back door, fold down seats and gain the ability to move boxes, surfboards, grocery bags, camping gear, etc. The Nissan Leaf tapped into that accessibility along with the Tesla Model S and Ford C-Max Hybrid and Plug-in Hybrid. Car shoppers could add these practical functions to their lists along with being environmentally friendly. Subaru has used the utility functionality in its TV ad campaigns, with a family loading up gear and heading for the mountains.

Auto analysts had predicted growing popularity in utility vehicle sales for a few reasons – transporting gear like bicycles and home repair materials, families carrying more passengers, functionality for projects like moving to a new home, and the growing popularity that SUVS were having over vans and large sedans. Making them more fuel efficient helped, too, long before gas prices plunged downward. Consumers also give kudos to all of the utility vehicles, including pickups, becoming much smoother to ride in and more like cars in their seating comfort and dashboard displays.

Here’s a roundup of new vehicle launches at the Paris Motor Show and other electric vehicles in the pipeline tapping into the interest in, and functionality of, utility vehicles:

Chevy Bolt:  General Motors classifies its upcoming all-electric vehicle as a crossover SUV. It’s been chevy-bolt-in-citygetting as much attention lately as the Nissan Leaf and Chevy Volt did during their late 2010 launches. While the range of 238 miles per charge, and its price-competitive position against the upcoming Tesla Model 3, are seen as key selling points, GM decided to invest more in a crossover SUV; as opposed to a small car like the Chevy Spark EV, which never did well in sales. The Chevrolet Sonic may have been more of a useful platform to model for the Bolt. The EPA is rating the Sonic and the Bolt as small wagons, though GM considers them differently. For some reason, the EPA has yet to adopt the crossover category.

Generation EQ: Daimler previewed its new EQ electric car brand through launching the Generation generation-eqEQ concept in Paris. The EQ brand unveiling is the first step in launching 10 new battery-electric models by 2025 in Daimler’s strategy to become the global leader in electric vehicle technology; it appears to serve as a sub-brand of Daimler’s Mercedes-Benz division. Daimler said that the Generation EQ electric crossover will have a range up to 500 kilometers (311 miles), which is probably based on Europe’s NEDC standards; that will be lower in U.S. mileage range under EPA measures. The concept SUV is being moving closer to production, and is being built on an architecture developed specifically for all-electric models. That architecture is adaptable for crossovers, SUVs, sedans, coupes, and other model series, the company said.

Volkswagen I.D.: Volkswagen’s chairman, Herbert Diess, was on the stage to unveil the new crossover volkswagen-i-dconcept, called I.D., at the show. It will be the first new model built on the automaker’s MEB modular electric platform. Its battery in-flat-floor architecture is built within a futuristic exterior design with a glass roof, artistic wheel covers, digital headlamps, and sliding rear doors. It’s expected to hit production level in 2019 for purchase starting in 2020. It’s part of the automaker’s Strategy 25, where the company will be building up to one million EVs by the middle of the next decade. Last week, the automaker announced it will be expanding sales of its e-Golf nationwide in the U.S., beyond a few select states. However, VW also revealed in Paris that the I.D. will eventually replace the e-Golf (but not the Golf). Several of VW’s concept vehicles in recent years have been rolled out on SUV and crossover platforms, including the Budd-E concept.

Mitsubishi GT-PHEV concept: Mitsubishi unveiled the GT-PHEV SUV, which has been designed mitsubishi-gt-phev-conceptaround the automaker’s next-generation plug-in hybrid system. The system uses three electric motors and an internal combustion engine designed specifically for hybrid applications. Mitsubishi’s Executive Vice President of Overseas Operations, Kozo Shiraji, introduced the GT-PHEV concept (which stands for Ground Tourer Plug-In Hybrid Electric Vehicle) as the “possible form for a future large SUV.” The company said that the driving range for its next plug-in vehicle promises to expand on the current Mitsubishi Outlander PHEV’s range. The Outlander PHEV is a strong selling plug-in vehicle in the European market.

Chrysler Pacifica: Fiat Chrysler Automobiles is finally entering the plug-in space. According to a new chrysler-pacifica-plug-in-hybridreport, Fiat Chrysler engineers are putting the Chrysler Pacifica plug-in hybrid through final testing and calibration checks on the streets of metro Detroit ahead of the start of production, which is scheduled for next month. It looks just like the gasoline-powered version, except for special badges and a battery charging port on the left front fender.

 

BMW X3:  BMW i3 electric utility vehicle sales have been disappointing for the automaker. Luxury bmw-x3vehicle owners will buy gasoline-engine CUV and SUV versions from BMW and competitors, but so far the i3 hasn’t clicked. It has gone over well with a few EV advocates and sales have been okay. For now, BMW seems to be counting on a plug-in hybrid variant of the X3. The next-generation X3 is on its way and BMW wants to create a hybrid version as the company sees it as a more mainstream offering to the consumer. While current BMW plug-in hybrid cars (BMW X5 xDrive40e and 740e) are pricey, the X3 would give buyers another mainstream offering next to the BMW 330e, according to BMW Blog.

Range Rover and Land Rover: Jaguar Land Rover is working on two new plug-in hybrid models land-rover-discoverythrough its Range Rover and Land Rover brands. The company is first developing a new plug-in hybrid powertrain set to be offered on the Range Rover Sport. It will be based around the firm’s four-cylinder Ingenium gasoline engine, mated to the engine with an electric designed to work with the company’s existing eight-speed automatic transmission. For the second hybrid system being developed, it will be designed for the Range Rover Evoque and Land Rover Discovery Sport. It’ll utilize a three-cylinder diesel engine with an electric turbocharger and a small electric motor. Additionally, a 48-volt electrical system will provide power to the water pump and air conditioner. These models aren’t expected to debut until the end of 2018.

Audi E-Tron Quatro:  Audi debuted the E-Tron Quattro Concept last year in Frankfurt. Known audi-a3-e-troninternally as the C Bev, this all-electric SUV claims a 311-mile range by European standards. Audi says that it will be sized between its Q5 and a Q7 SUV models. Audi has been quite pleased by how high its sales numbers have been in the SUV segment in recent years, so an electric SUV makes a great deal of sense to the company for hitting emissions targets. Earlier this year, the company announced it will be going into production on the E-Tron Quatro by 2018. Audi said that the new model will use three electric motors and a quick charging, high‑capacity battery.

 

Karma Automotive partners with BMW to survive in the tough global auto market

Karma AutomotiveKarma Automotive is transitioning beyond the original Fisker Karma electric-drive system through a new partnership with BMW, using its latest powertrain components. Karma, which recently opened a manufacturing plant in California, plans to begin selling its flagship luxury car late next year that will start with a $115,000 price tag. Owned by Chinese auto parts giant Wanxiang Group, Karma Automotive has contracted with BMW to supply its battery charging system and some of its electric-drive technology.

Sharing components through automaker alliances has become a common practice in global auto manufacturing in recent years. With BMW’s successful i Series electric drivetrain used in the i3 and i8 models, it was probably inevitable that a partner company entering the luxury electric vehicle space would make an alliance with the German automaker.

For startups like Karma and Tesla Motors, relationships with large, established automakers has been essential for breaking into the capital-intensive, competitive automotive space. Tesla was able to go that route to cut time and cost through acquiring the Lotus chassis for the Tesla Roadster. Tesla also gained investors and corporate clients selling its powertrain components to Toyota and Daimler for their electric vehicles. While the Tesla/Toyota deal is ending, the Japanese automaker’s investment in Tesla, and turning over its old NUMMI plant in Fremont, Calif., to Tesla, were important steps for the startup electric carmaker to survive and move forward.

Karma’s battery will be provided by A123 Systems, a company Wanxiang also purchased out of bankruptcy. A123 was the original supplier to the Fisker Karma, but has developed a new battery for the Karma model coming out late next year. BMW will supply high-voltage battery charging systems and a wide range of hybrid and EV systems.

The year 2012 was devastating for Fisker Automotive and A123 Systems. In January 2012, 239 Fisker Karmas were recalled due to A123 battery defects blamed for causing fires under the hood. In March of that year, Consumer Reports called the Karma “undrivable” from its testing site. The year wrapped up in November with Hurricane Sandy causing a New Jersey port to be flooded, which took out more than 300 Karmas parked there waiting for carrier trucks.

Karma Automotive thinks that the alliance with BMW will lead to other new vehicle announcements, according to Karma Chief Marketing Officer Jim Taylor. One of them will be a battery-electric model. “Carmakers buy parts from other carmakers, especially in expensive areas like powertrain technology. As we launch the vehicle under the new name Karma, using BMW components will be a big help to the brand,” Taylor said.

Karma Automotive will be assembling its cars at its Moreno Valley, Calif., 555,670 square-foot facility.  Its headquarters office is located in Costa Mesa, Calif. The company currently has about 300 employees, with about 40 working at the plant.

Chinese automakers are expected to play a vital role in the future of electric vehicles in the U.S. and China. Along with Wanxiang Group bailing out Karma Automotive and A123 Systems, there are several other alliances picking up steam:

  • Santa Rosa, Calif.-based three-wheel electric carmaker Zap nearly went out of business until its merger a few years ago with Chinese company Jonway Auto. Dong Feng Motor Corp. expects delivery of at least 3,000 electric vehicle minivans from Zap and Jonway by Dec. 31, 2015. Dong Feng expects its order to increase to at least 2,000 units per months starting in January 2016.
  • Faraday Future, owned by Leshi Internet Information and Technology Corp., is developing an electric vehicle to compete with rival Tesla Motors. The start-up is based in Gardena, Calif.
  • Atieva Inc., based in Menlo Park, Calif., is also working on a new electric car. That company is also backed by Leshi, as well as by Beijing Automobile Industry Holding Co.
  • Coda Automotive, a battery electric carmarker based in California, has gone bankrupt. Coda had partnered with Chinese battery company Lishen, and carried that technology over to its Coda Energy battery energy storage company after Coda Automotive went out of business.
  • Chinese automaker BYD, which impressed Warren Buffet’s Berkshire Hathaway enough to bring them in as a major investor, has set up U.S. headquarters in Los Angeles. BYD is lining up contracts to deliver electric buses to transit agencies in the region.

Sales are soft, but OEMs aren’t giving up on zero emission vehicles

EV sales through 2015As reported lately in Green Auto Market and several major media sources, it’s been a tough year for green car sales. Hybrid sales were down 18.5% in the first half of this year compared to last year. Plug-in hybrid electric vehicles had it much worse – plunging 33.7% versus a year ago. Battery electric vehicles have bucked the trend, with the Tesla Model S, Mercedes B-Class Electric, and the BMW i3 doing well in July. Sales increases reported by Tesla haven’t been enough to lighten the mood.

Hydrogen fuel cell vehicles, especially the upcoming Toyota Mirai, are getting much attention this year and impressing some with California’s (and other states’) commitment to zero emission vehicles (ZEVS). The numbers aren’t there yet in hydrogen fueling stations or car sales. Hyundai has sold just 17 Tucson FCVs this year in the U.S. Toyota is investing a lot into its upcoming Mirai FCV. Pre-orders are being placed now for deliveries starting this fall.

For electric vehicles, there’s been concern that federal and state incentives need to increase to gain more sales appeal. The July total, only one-third of last year’s sales, may reflect the June 30th end of Georgia’s generous income-tax credit for purchasing ZEVs in the state.

Then there’s the overall economic climate. Sales started softening in June and continued into July, with low gasoline prices and cheap small cars and crossovers with strong fuel economy driving much of the interest.

That being said, automakers don’t appear to be backing away from launching all-new or revamped versions of their plug-in electric vehicles or fuel-cell vehicles. For example, Nissan, BMW, General Motors, and Tesla don’t appear to be backing down under the current market dynamics.

Sales have dropped quite a bit for the Nissan Leaf, with a seven-month total this year of 10,990, one-third less than the 15,755 Leafs sold in the first seven months of 2014. Some of this likely has to do with a refreshed Leaf coming out in the 2016 model year, with a battery range that could be 25% higher. There’s talk out there that Nissan may go the way of the 2012 Toyota Prius family, with more versions of the Leaf rolling out in 2016 or 2017. One of these might be a crossover Leaf along with the five-door hatchback that you see now out on the road.

BMW CEO Harald Krueger has said that an electrified crossover will be coming out in the i Series. BMW may also add a big battery-electric SUV to its main brand in a direct challenge to the Tesla Model X sedan. BMW is also said to be looking into working with Apple on the new high-tech vehicle the technology giant wants to develop.

The Chevrolet Volt appears to be very much affected by a new model coming to dealerships this fall. In July, Chevrolet reported a year-to-date sales figure of 6,935 for 2015, versus 10,635 for the same period during 2014. Sales did increase to over 1,000 during the past three months, right after seeing four months of sales at less than 1,000 units. General Motors and its Chevrolet dealers may have been aggressively attempting to sell off the 2015 models before the 2016 model gets closer to coming to market.

The Volt may be going up to 53 miles on battery power with the revamped model – 40% more in battery range than the current model. It will also have a more power engine and, for some models, a fifth “seating position” to increase its appeal.

Tesla Motors is counting on its Model X building up its global sales. During its second quarter earnings report, the company said that its full-year delivery forecast will be coming down from 55,000 to between 50,000 and 55,000. That may come from a delay in production of the Model X.

Tesla will manufacture the Model X on the same general assembly line as its Model S sedan at the factory in Fremont, Calif. That could could slow down overall production if there are problems that come up during the ramp-up of the new product, according to CEO Elon Musk. Seeing strong sales increases in the Model S has encouraged Tesla to increase its production. The automaker reported producing a record 12,807 vehicles in Q2, which beat its goal of 12,500 units.

One of the big hopes for plug-in sales is coming through more affordable cars with more miles between charges. Tesla is placing a lot of its strategic plan on rolling out its $35,000 Model 3 in 2017 (which will include advanced batteries being manufactured at the new Gigafactory in Nevada that will power the car for 200 miles on a single charge). General Motors has high hopes for the Chevrolet Bolt is expected to make it 200 miles on a charge and start at $30,000 when it rolls out in 2017. Tesla and GM are putting a lot of hope on these cars, which face the fundamental challenge all of these electrified vehicles must address:  getting more consumers to overcome concerns about investing in a new technology.

 

Electric vehicles have gone mainstream enough to draw Apple Inc. into the game

Apple CarPlayApple Inc. has enough interest in vehicle technologies and electrification to fund an Apple-branded electric vehicle, according to sources familiar with the matter. Apple has a secret lab to test out a vehicle that looks like a minivan, sources told The Wall Street Journal. According to the article, several hundred employees are now at work on the project.

Like Google Inc.’s move into self-driving cars, the Apple test project likely has more to do with providing advanced connected car technologies in upcoming model years. Apple plunged into the automotive space nearly a year ago, unveiling CarPlay that lets drivers access contacts on their iPhones, make calls, and listen to voice mails without taking their hands off the steering wheel. Google has acknowledged that it’s seeking partnerships with automakers and tier-one suppliers and won’t be entering the business of making cars. Apple will likely do the same, with electric vehicles offering an excellent opportunity to serve a wide range of vehicle technologies. The Apple rumor is stirring up a lot of buzz in tech journals, with speculation that Apple is getting ready to take on Tesla Motors.

Chrysler has been on the sidelines with electric vehicles for several years, running a few test models in Michigan but not going much further. That is going to change, according to Al Gardner, president and CEO of the Chrysler brand within the recently named FCA. Chrysler’s new family of minivans will include a plug-in hybrid version, Gardner said. That will be part of an unveiling at next year’s Detroit Auto Show. The new minivan is another vehicle that FCA hopes can change the perception of Chrysler through the offering of sophisticated technology.

Mitsubishi will be adding to its plug-in lineup with a concept car unveiled at the Chicago Auto Show. The automaker showed off its Grand Cruiser-Plug-in Hybrid Vehicle (GC-PHEV), built on an Outlander-style SUV. It will offer a wide range of digital technologies include an “augmented reality” windshield and an all-wheel drive system. Its electric motor uses a 12 kWh lithium-ion battery. The electric drive system shares many of its components with Mitsubishi’s battery-electric vehicle, formerly known as the i-MiEV.

General Motors gained most of the media attention at the Detroit Auto Show unveiling its refreshed Chevrolet Volt – and also through surprising everyone with the announcement of its all-electric Chevrolet Bolt hatchback. Last week, GM confirmed that it will invest about $200 million in two suburban Detroit plants to build the Bolt. GM said it will spend $160 million on new tooling and equipment at its Orion assembly plant, and another $40 million for new dies at its Pontiac Metal Center plant.

The automaker had been taking a fairly conservative approach in production volumes and marketing spend on its Volt and Cadillac ELR plug-in hybrids and Chevrolet Spark battery electric car. There’s hope the Bolt might take off with its 200 mile range on a single charge and costing about $30,000 after tax credits. That could give GM a competitive advantage in going after the buyer segment Nissan is reaching with its Leaf and that Tesla Motors will be going after when it releases its more affordable Model 3 electric car in 2017. “We are putting the Bolt EV concept on the fast track to production, because reaction to the concept was overwhelmingly positive,” Alan Batey, president of GM North America, said in a written statement. “It has the potential to quickly shake up the status quo for electric vehicles. It’s an EV aimed at everyday drivers.”

Keeping hybrid and electric vehicle sales figures in perspective

plug-in salesWe’ve seen sales numbers decline on hybrid and electric vehicles (EVs) in the past few months. When you look at the broad spectrum of market reports and analysis of that data, it’s a good reminder to keep things in perspective. That being said, here’s the latest…………

  • Automakers do believe that sales of hybrids and EVs will go up eventually; even though recent sales figures have declined, their production schedules are still staying on track – and that includes expecting demand for hydrogen fuel cell vehicles. BMW now plans to sell a plug-in hybrid version of every major model in its vehicle lineup. Daimler will be investing 100 million euros to increase production of batteries for its EVs; Tesla is clearly optimistic with its grand vision of building the $5 billion “gigafactory.” Toyota is preparing to sell its first fuel-cell vehicle in Japan, which it recently named the Mirai. One of the reasons for the trend is that automakers do believe gasoline prices will eventually climb up. “We think the trend is clear,” said Ford CEO Mark Fields. “Over time, we believe gas prices around the world will continue moving higher.”
  • Hybrid sales were down nearly14% from last year in November, but EV sales were up slightly over last year and last month. Hybrids did see a 0.7% increase over October 2014. Hybrids are down nearly 5,000 units year-to-date from last year as of the end of November. Plug-in electric vehicles have a different story, according to Electric Drive Transportation Association: “With 9,785 plug in vehicles (3,609 plug-in hybrids and 6,176 battery EVs) sold last month, the total number of plug-ins that have been sold in 2014 rose to 107,487. This year-to-date cumulative number represents a 24 percent increase over the 86,912 plug-in vehicles that had been sold thru the same period last year,” the association reported.
  • Retail vehicle sales guru Art Spinella and his CNW Research firm just reported its consumer survey study indicating upper-middle class Americans are not crazy about buying EVs. “High Yield” new-car customers, upper-middle income Americans in their middle to late forties pre-disposed to buying a vehicle regularly, are not interested in buying an EV. That would be the case if the EV had identical prices as comparably-sized gasoline or diesel cars. That demographic group doesn’t represent the lion’s share of new vehicle sales in the US, but the study does point to a telling trend: you can’t depend on upper income early adopters to make a new technology successful. As suggested last week in Green Auto Market, long-term success in green vehicle sales will need to come from cost-sensitive fleets and consumers. They’ll be bringing in the larger sales numbers long term as these vehicles become more mainstream and accepted – and affordable. Marketing messages need to deliver more than concern over climate change or “keeping up with the Joneses” on cool new technologies.
  • The Nissan Leaf saw 2,687 units sold last month; what was its 22nd straight month of sales increases year-over-year. Overall, battery electric vehicles are continuing to see stronger sales than the plug-in hybrids in the US. There are likely a few influential factors behind it:  car shoppers are impressed and confident in the Nissan Leaf, Tesla Model S, and BMW i3; their lease programs are attractive and make the deals more affordable; there are more charging stations installed in major metros across the US, relieving range anxiety; and battery range is increasing with each new model year.
  • Keep your eyes on the big picture. When you look at studies that are being released, such as the new EV City Casebook, you’ll see signs that perspectives are changing on EV ownership in global markets (including the US) that should increase EV adoption. Fleets are definitely influencing this trend, with a good example coming from California-based consulting firm Vision Fleet and its fleet partners. In late October, Indianapolis Mayor Greg Ballard was enthusiastic to announce the city’s “Freedom Fleet,” which will bring in 425 plug-in sedans. That project with Vision Fleet is expected to save the city 2.2 million gallons of gasoline over the next decade. The greenhouse gas reduction will be impressive, too.