Green Auto Market’s guesstimate on what to expect in 2016

  • Volkswagen diesel recallWhat’s next for VW: The first part of this new year will see details released on the Volkswagen recall by the U.S. Environmental Protection Agency and California Air Resources Board on a proposed fix for its diesel-engine cars. EPA and CARB will be making an announcement this month regarding solutions proposed by Volkswagen for about 482,000 cars equipped with EA 189 engines; some models will likely require hardware and software updates, while other may require only a software solution. The recall might be tied into the lawsuit the U.S. Justice Department filed in a civil complaint yesterday on behalf of the EPA (see news coverage above). Electric vehicle launches may be a channel for VW to tap into to restore its image as a responsible global corporation. On January 5 at the Consumer Electronics Show, Volkswagen’s new chairman, Herbert Diess, will make a keynote speech announcing VW’s “new era in electric mobility” that will broaden its pre-existing commitment to electrification along with a new all-electric concept car. It’s still unknown whether that new vehicle will be an electric version of its flagship next-generation Phaeton sedan, an electric Microbus, or something else.
  • Presidential election: The Obama administration has been supportive of U.S. Department of Energy grants for clean vehicles and tax incentives for electric vehicles and natural gas vehicles, among other supportive measures. As that president leaves office in a year, questions are coming up on what leading candidates think about environmental issues, clean energy, and alternative fuel vehicles. On the Republican party side, in the latest voter polls, Donald Trump, Ted Cruz, and Marco Rubio, have been the leading candidates. On the Democratic party side, Hilary Clinton is the obvious choice now that Bernie Sanders has stepped out of the race. Alternative fuel vehicles hasn’t been a topic of discussion at presidential debates, but the Obama administration’s Clean Power Plan, released in November, and the issue of climate change, have been. Cruz and Rubio strongly oppose CPP and all three Republican candidates think there’s no real proof climate change and global warming are really happening. Free market economics is a philosophy all three embrace. Cruz opposes the Renewable Fuel Standard as he doesn’t support subsidies and the federal government picking “winners and losers.” As speaker of the Florida House of Representatives, Rubio opposed executive orders limiting greenhouse-gas emissions and setting stricter limits for cars sold in Florida; he thought the state should instead embrace the free-market approach. Trump strongly supports the Keystone XL pipeline and hydraulic fracking. Clinton supports a goal of having at least 33% of the nation’s power generated by clean energy sources by 2027; believes climate change is an urgent challenge; and has been unclear on positions on Keystone XL or offshore oil drilling.
  • Clean transportation events: Calstart’s Clean Low-Carbon Fuels Summit will be in Sacramento, Calif., on February 23; Green Truck Summit will take place March 1-3 in Indianapolis; NAFA I&E with its Sustainable Fleet Accreditation Program will be April 19-22 in Austin, Texas; ACT Expo will be going back to Long Beach, Calif., on May 2-5; AltCarExpo will take place on September 16-17 in Santa Monica, Calif; and Automotive Fleet’s Fleet Technology Expo will be held October 17-19 in Schaumburg, Ill. And don’t forget Clean Cities coalition events throughout the year.
  • Fuel prices: Low gasoline and diesel prices have been deal breakers in the past year and a half for fleets investing in CNG and propane conversions and consumers backing away from hybrids and electric vehicles. The global oil supply is expected to eventually feel the effects of growing demand from developing nations; as for now the supply is high enough to keep fuel prices down into 2016.
  • Autonomous vehicles: Testing programs will continue to put miles on the road in states that have adopted autonomous vehicle road testing (with most of it still in California). Austin, Texas, is working on a test program with Google on its roads, and hopes to see the state of Texas get on board. Watch for automakers to continue rolling out connected car and semi-autonomous features this year. A good example of this trend is Toyota designing a system to improve and accelerate the mapping of U.S. roads needed to put autonomous vehicles on the roads. It will be debuted at CES 2016 for rollout in 2020.
  • Hydrogen infrastructure: Hydrogen fueling stations are slowly rolling out in California, with construction underway within a few states in the northeast. Check out the federal H2USA collaborative projects for updates on Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and California.
  • Crowdfunding capital: As described in Green Auto Market about a year ago, crowdfunding has gone way beyond a funding source for student film projects and startup rock bands. The Securities and Exchange Commission has released rules on the Jumpstart Our Business Startups Act of 2012 (JOBS Act) that will take effect in May 2016. That’s expected to bring in more investors who will provide more funding than has been the norm in cleantech crowdfunding projects in recent years.
  • Hybrid Terrafugia TF-X: For those of you fascinated with futuristic vehicles, check out the Terrafugia TF-X, which just received Federal Aviation Administration approval for test flights. This mid-size car has twin helicopter-style rotors at the tips of its wings that fold out of the car and lift the TF-X into the sky. Once it’s up in the air, electric engines teamed with a 300-horsepower engine provide power. The rotors fold back, and a ducted fan pushes the TF-X along. It has a cruising speed of about 200 mph, with a range of about 500 miles.
  • Infrastructure growth: During 2015, compressed natural gas fueling, electric vehicle charging, and E85 stations had the largest growth curve. CNG went up 98 stations in the U.S., EV charging went up 2,811 stations, and ethanol (E85) increased at 173 more gas stations.
  • Biofuels: Lux Research predicts that waste oils will dominate next-generation biofuels in upcoming year. Biodiesel made from novel feedstock, specifically waste oils, will lead novel fuels capacity in 2018. Cellulosic ethanol and renewable diesel follow with 19% and 18%, respectively.
  • The future of Uber: While ridesharing giant Uber is expected to add more investors and will consider going public on the stock market, a big legal question will have even more impact on its future. The question of whether it will be a transportation network linking car owners to riders or a company with employee drivers will be carefully watched by Lyft, Airbnb, and other “shared economy” startups. Boston-based attorney Shannon Liss-Riordan is representing Uber drivers in California who want to be considered employees (or at least have some of those financial benefits). Liss-Riordan thinks it’s a much bigger question with the on-demand, shared economy encouraging misclassification and mistreatment of its workers – and that includes food delivery startups. Liss-Riordan currently has a lawsuit against Postmates pending in federal court in California; and in California state court, she’s filed class-action complaints against DoorDash and GrubHub. The Uber class-action lawsuit, and these other suits, will take much longer than 2016 to see final court rulings, but analysts are paying a lot of attention to these cases. Uber management certainly cares about it as its business model is based entirely on independent contractors – and eventually with driverless cars being in its fleet.

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