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Declining Leaf sales and the state of plug-ins in the U.S. market

Nissan Leaf on dealer lot If you look at U.S. green car sales numbers, you’ll notice that the Nissan Leaf is down considerably – while others, including arch-competitor Chevrolet Volt – are up noticeably lately. The Leaf isn’t the only plug-in seeing declines in U.S sales. The BMW i3 has dropped way down this year, and Ford has announced that the Ford C-Max hybrid and plug-in hybrid will be vanishing in 2018.

What’s behind it? Here are a few points to consider on the state of plug-in sales in the U.S……….

Overall plug-in electric vehicle sales were up in February over the previous month and the previous year. Tesla Motors is behind much of that increase with Model S and the Model X, and the redesigned Chevrolet Volt has been seeing increases in recent months after a long period of sales declines.

A period of change for the Leaf: Not long ago, the Nissan Leaf was seeing sales in the high 2000s to low 3000s, and was by far the best-selling electric car in the world; but sales dropped down in 2015 and into 2016. The Leaf sold only 930 units in the U.S. in February 2016, down 22.4% from February 2015. A new study by IHS cites the obvious reasons the Leaf has been seeing declines: cheap gasoline prices; increasing efficiency of conventional engine vehicles; and buyers’ waiting for the redesigned new model-year version of the Leaf that’s coming up, and other new electric vehicles that will be rolling out.

Driving range may be part of it: While the 2016 Leaf in the SV and SL trims were put on the market in November with range increasing from 84 miles per charge to 107 miles per charge, Leaf sales didn’t go up. The “200 mile range” factor may be hurting Leaf sales. The Chevrolet Bolt was shown off at the Consumer Electronics Show in January with the announcement that the price competitive 200-mile range Bolt will be available by the end of this year. There’s also been a lot of interest in the Tesla Model 3 coming out in 2017 with a competitive starting price around $35,000 and more than 200 miles per charge. Tesla will have an unveiling of the Model 3 by the end of this month with more details on its availability and features released. Nissan hasn’t revealed details on the range of the redesigned 2017 Leaf. In 2014, Andy Palmer, who was then executive vice president and Nissan’s spokesman for the Leaf, said that the refreshed 2017 model would be going at least 186 miles on a charge to keep up with competitors.

Nissan will be releasing details soon: Nissan has been quiet about the refreshed Leaf, but it’s expected to be announced soon – perhaps at the New York International Auto Show in April with sales starting in October. It could be later, such as sometime in 2018. There’s also been speculation that the Next-generation Leaf will arrive right after Nissan’s Power 88 business plan, which ends March 31, 2017. It will probably be tied to new battery chemistry for Nissan and Infiniti that should be ready by early 2017. An Infiniti luxury EV is on track for a 2017 debut; and the Leaf and an Infiniti EV may share the same battery technology.

Leaf may look a little bit different: The Nissan Leaf will probably continue to have a hatchback layout, but with a more mainstream design. That’s the engineering and design direction Chevrolet took with the 2016 Volt and that Toyota adopted with the 2016 Prius. The new Volt doesn’t stand out as much on the street as the previous versions did and looks more like competitors, such as the Hyundai Sonata. The 2016 Prius has had fixes, such as its exterior base being lifted off the ground to avoid scraping when exiting driveways; its rear window being more visible for drivers; and its look changing the most since it was launched in Japan in 1997. Automakers have been going in this direction in recent years with aerodynamics, fuel-efficiency, and lightweighting becoming more important. It’s harder to tell them apart. I’ve wondered if that may hurt brand loyalty for the Leaf and Volt, as both of them have stood out clearly on freeways, much like the Tesla Model S.

Longevity of the Leaf: The Leaf has taken a bad rap over its relatively low resale value and range degradation of its battery. Both of these factors have been improved, with Kelley Blue Book recently commenting on resale values for the Leaf improving; and concern over the durability and performance of the Leaf battery waning. These problems do tend to linger in public perception, as the Chevrolet Volt and Fisker Karma experienced with their highly reported battery fires. The Tesla Model S went through that crisis as well, but the automaker did a much better job of dealing with it and reaffirming consumer confidence by adding its titanium underbody shield. There’s also a recall by Nissan that was just announced on about 47,000 2013-2015 model year Leafs that will look into braking performance in cold weather; the cars’ electronic brake booster may freeze, requiring the driver to exert more pressure on the brake pedal. Recalls aren’t necessarily a crisis for the vehicle if it’s handled promptly and professionally by dealers and OEMs.

Limitations on dealer lots: The Chevrolet Volt has seen sales increases in recent months but hasn’t returned to its strongest monthly sales figures. The refreshed Volt is available in just a few states to accommodate the early rollout of 2017 model year in the spring of this year. Nissan launched the 2016 Leaf in October 2015 with a choice of two different battery sizes – 24kWh battery pack offering 84 miles of range and 30kWh pack with an EPA-rated range of 107 miles. That wasn’t enough to drive up sales. Nissan may be taking a more conservative approach by adding the extended range battery as an option only, and working on the new battery with nearly double the range for the 2017 or 2018 model year.

What Ghosn thinks: Nissan CEO Carlos Ghosn and other company executives appear to be championing the Leaf, per usual; and the production process at the Smyrna, Tenn., plant has been about the same since the Leaf started being built there in 2013. Ghosn recently said that he thinks development of the charging infrastructure is a more important issue than battery range, but the company is still committed to leading the EV revolution.

China may be more important than the U.S. market. Ghosn recently said that his company has high hopes for the China market. He thinks it will help that the Leaf is much cheaper than the Tesla Model S, and that pricing will be very important in that market to convince skeptical first-time car buyers that an electric car is the way to go. Nissan is likely spending more in the Chinese market on marketing campaigns. Marketing for the Leaf isn’t nearly as visible these days in U.S. as it was in the early days of 2011-to-2012. Nissan has been offering inexpensive lease deals, discounts, and a No Charge to Charge promo with free charging for two years in select markets. It will be interesting to see how Nissan markets the redesigned Leaf in the U.S. There’s also the possibility that the Chinese government may phase out subsidies for purchasing EVs, which would take some wind out of the sales of its growing EV market.

What happened to the BMW i3? The BMW i3 has seen similar sales patterns as the Nissan Leaf. In December 2015, 1,422 units were sold in the U.S.; only 248 units were sold in the U.S. in February. The plug-in hybrid variant of the BMW X5 crossover utility vehicle did better – with 345 units sold in February in the U.S., versus 248 for the electric-only i3. The BMW i8 has dropped out of the top 10 in U.S EV sales. The honeymoon may be over for the i Series plug-ins, and BMW may not be that committed to selling them in marketing campaigns, incentives, and dealer programs. BMW did cross the 50,000 sales unit mark for the i Series in January. The i3 was launched in Germany in September 2013 and the i8 in June 2014. They were sent to global markets like the U.S. soon after their launches. BMW isn’t backing away from supporting the i3 and i8, but it appears to need even more support in this phase of declining interest in overall EV sales by consumers and fleets. BMW may be adding i5 to its i Series plus-in vehicles, with a lightweight carbon-fiber body, but the automaker hasn’t yet confirmed whether that will be added to its product offerings.

Ford changes gears on C-Max series: It was surprising to hear that Ford will be killing off the Ford C-Max Hybrid and C-Max Energi plug-in hybrid models in 2018. Sales numbers haven’t been strong enough for Ford to stay committed to the relatively new crossover hatchback models. AutoForecast Solutions reports that Ford will end production of the C-Max at its Wayne, Mich., assembly plant in 2018. Ford will make room at that plant for the Ford Ranger, which has been made in Thailand, to compete with GM’s smaller trucks. In February, Ford had strong overall sales – except for the C-Max and the largely discontinued E-series van – which were the only two models that saw sales declines during that month.

What happened to the C-Max?: When the C-Max was launched in the fall of 2012, it looked very good as a direct competitor with the Toyota Prius. The C-Max Hybrid sold 19,162 units in the U.S. in 2015; it was number 14 in December hybrid sales, and it used to be in the middle of the top 10. Ford sold 8,433 C-Max Energi units in 2015. It was number nine in plug-in sales for December, lower down on the list than it has previously been. The C-Max Hybrid was down 26% in 2015 in U.S. sales compared to 2014, and the Energi plug-in hybrid was down 10%. As for competing with the Prius, Toyota has been down in Prius sales as well with dropping gas prices hurting sales; but Toyota is still committed to the Prius brand, rolling out the refreshed version in late 2015 as a 2016 model, and stating its commitment to keeping it in production. Ford quickly lost interest and commitment to the C-Max.

Fusion may be the winner: During February, the Nissan Leaf ended up in fourth place right behind the Ford Fusion Energi plug-in hybrid on the U.S. plug-in sales list. It appears that Ford may be sticking with the Fusion Hybrid and Fusion Energi. The midsize sedan has done consistently well in its sales position on the U.S. market for hybrid and plug-in sales. The Ford Focus Electric, a battery electric model, may be getting more internal support from Ford, along with the Fusion, than the C-Max has received. That’s a real shame. I was thinking of buying a C-Max Energi. I’ve been looking for a cost-competitive plug-in hybrid with a utilitarian design ideal for transporting goods, such as helping somebody move or taking my surfboard to the beach. It wasn’t that long ago that plug-in hybrids were assumed to be the best way to go in the U.S. market with range anxiety being a big concern for reaching Americans who put a lot of miles on their cars each year. It’s become more difficult to discern the best route to take for creating improving sales in the U.S. and overseas markets. The Nissan Leaf had been beating the Chevrolet Volt and Toyota Prius Plug-in, and the all-battery Tesla Model S grabbed that position in the EV race over the past year. Auto analysts do expect automakers to stay committed, overall, to rolling out more plug-in models in the next few years – to meet national fuel economy and emissions guidelines; with expectations that gasoline prices will eventually creep back up; and assuming that consumers and fleets do expect to have a long list of hybrid and EV models to choose from.

This Week’s Top 10: Electric vehicle sales were strong in February, Hyundai Ioniq green options shown at Geneva Motor Show

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…….

EV and hybrid sales: Plug-in electric vehicle sales were up substantially month-over-month and year-over-year – 17% over January and 6.7% over February 2014. The Tesla Model S, Chevrolet Volt, and Ford Fusion Energi saw sizable gains over last year, while the Nissan Leaf was down 22.4%.The Nissan Leaf has been declining in its position as the clear market leader, coming in fourth place for the first time, narrowly behind the Ford Fusion Energi plug-in hybrid. Tesla is continuing to take the lead in overall electric vehicle sales, with the Model S far ahead of the Chevrolet Volt and Nissan Leaf – and the recently launched Model X seeing a 25% increase in sales over January 2016. Hybrids continue to be hurt by low gasoline prices, declining to 1.8% of overall market share when it was in the 2.5% range for a long time. Sales were down nearly 10% since last year.
Three green versions of Ioniq: The 2017 Hyundai Ioniq might have been the most interesting green car news story from last week’s Geneva Motor Show. The hatchback was displayed in all three forms in which it’ll be sold: hybrid, battery electric, and plug-in hybrid. It will be the first vehicle offering by a major automaker offered in all three battery-powered options; while there’s been talk of it and concept cars, Hyundai appears to be serious about bringing all three versions soon.
Self-driving cars right for elderly riders: Aging Americans will be well served by self-driving cars, according to Google – as 43 million American in the U.S. are 65 or older and another 10,000 people reach that mark every day. Nearly 80% live in suburbs and rural areas and will need more transportation support for doctor appointments, groceries, and seeing family and friends. Florence Swanson, 94, recently became the oldest person ever to ride in one of the Google self-driving cars; she was given that opportunity after her painting of a guitar player won a Google contest. Google self-driving car project CEO John Krafcik featured Swanson during a January presentation in Detroit. Krafcik, formerly head of Hyundai’s U.S. division and president of TrueCar, is one of about 40 automotive professionals who now work for the Google autonomous vehicle project. That makes for more than 20% of the 170 workers in that business unit. Those with auto industry experience have skills ranging from exterior design to manufacturing, and come from a wide range of companies including Tesla, Ford, and General Motors.
Propane in truck fleets: Nestlé Waters North America is adding more than 150 medium-duty beverage delivery trucks fueled by propane autogas to its fleet. Baking industry leader Bimbo Bakeries USA has acquired 84 new propane-powered Ford F-59 trucks, to operate in three of the company’s major markets. Each Nestlé delivery truck is equipped with a California Air Resources Board- and Environmental Protection Agency-compliant ROUSH CleanTech propane autogas fuel system with a 45-usable gallon fuel tank. BBU’s truck’s were equipped with ROUSH CleanTech fuel technology; and each of these new propane autogas fueled delivery truck will cut carbon dioxide emissions by about 192,000 pounds compared to gasoline.
Natural gas vehicles: The reduced cost of gasoline and diesel caused natural gas vehicle production and sales to drop last year, Matthew Godlewski, president of NGVAmerica, said to an audience at the Work Truck Show. Heavy-duty vehicles sales were flat, but the light-duty and medium-duty vehicle segments saw a drop in sales numbers. Steady growth in the natural gas fueling infrastructure and new natural gas engines are bright spots for NGVs, Godlewski said.
AARP-E praises energy storage: The federal government’s Advanced Research Projects Agency-Energy reported making big gains toward creating a next generation of batteries for energy storage last week during its annual conference. ARPA-E director Ellen Williams said the agency has funded several high-risk battery projects that utilize newer technology than Tesla’s Powerwall batteries. Other good news for the energy storage market came from GTM Research/Energy Storage Association’s U.S. Energy Storage Monitor 2015 Year in Review. The U.S. energy storage market just had both its best quarter and best year of all time. The U.S. deployed 112 megawatts of energy storage capacity in the fourth quarter of 2015, bringing the annual total to 221 megawatts.
DOE and EPA fleet programs: The U.S. Department of Energy increased funding for its SuperTruck II program designed to increase fuel efficiency of Class 7and 8 trucks; it will also provide funding for several projects that would develop alternative powertrains for medium-duty vehicles. During Green Truck Summit, DOE’s Reuben Sarkar announced that the SuperTruck II initiative would receive $80 million in funding, up from the initial proposal of $60 million. In other federal agency news, the U.S. Environmental Protection Agency is offering $26 million in grant funding to fleets to reduce diesel emissions from the existing fleet of diesel engines. The deadline to apply for the funding is April 26.
BMW jumping into self-driving car race: Days before BMW’s 100th birthday, Klaus Froehlich, the automaker’s board member for research and development, announced corporate plans for a completely overhauled company, where half the r&d staff will be computer programmers working on self-driving cars projects. During the Geneva Motor Show, Froehlich said that BMW sees its competitors as including firms like ridesharing company Uber and third-party sales site Truecar, which he described as “new intermediaries.”
Extended range: The 200-mile range per electric vehicle charge isn’t quite right, according to Daimler AG head Dieter Zetsche – 310 miles per charge range is “probably a reasonable number to pursue,” Zetsche said last week at the Geneva auto show. Another needed step: battery costs must fall for EVs to reach prices that will prompt consumers to swap gasoline-powered vehicles for electrics.
The state of VW: Last month, U.S. District Judge Charles Breyer set a March 24 deadline for Volkswagen to state whether it has found a fix for 600,000 diesel cars that is acceptable to U.S. regulators. No deal, according to VW brand chief Herbert Diess; it will take months rather than weeks to reach an agreement with U.S. regulators on an emissions fix, a newspaper reported on Saturday. In other news, a detailed report was submitted to a German court on Feb. 29 by law firm Goehmann stating that VW delayed releasing information on the diesel situation to allow for talks aimed at reaching a settlement with U.S. regulators; and that the talks could have been jeopardized if the matter was already public. The law firm is arguing for VW that the delay was a legitimate move aimed at striking a deal with regulators.

What you need to know about connected car technologies

Mcity If you work in the auto industry, staying informed can be all-consuming these days – with the Takata airbag recall, the Volkswagen diesel car scandal, automakers striving to become the first one selling self-driving cars, and the impact low fuel prices is having on green car sales. There is one topic I would advise you to stay current on, as it touches upon all the rest – connected car technologies.

Connected cars is what we have now with mobile device connectivity to our dashboards for entertainment and driving directions – such as Bluetooth bringing Pandora from your smartphone to your car’s sound system; the deployment of safety features like lane departure warning systems, backup cameras, and driver assistance systems that are considered stepping stones to autonomous vehicle technologies eventually becoming the norm; intelligent transportation systems coordinated by the U.S. Dept. of Transportation with its goals of making roads safer and more efficient; and mobile apps on devices that lead you to the closest electric vehicle charging station and other features that make your car your own personal mobility device.

Here’s an overview of what’s happening lately in connected car technologies……..

Hacker threat: Automakers and suppliers think we’re very close to seeing connected car technologies being added to all new vehicles sold. A survey of OEM and supplier managers says they think it will take one to three years to secure the technology, according to a new study by International Data Corp. and commissioned by security company Veracode. The study came from test study last year showing by professional hackers taking over a Jeep Cherokee, raising the flag on the possibility of hackers making cyberthreats that they can carry out. The auto industry is aware that adopting these systems widely may bring privacy and safety problems, but companies are working hard and resolving and moving the technologies forward.
Fuel station of the future: At the Geneva Motor Show, Nissan showed a video presentation on it 12-month long project examining the role electric cars, autonomous vehicles, and vehicle-to-grid technology could play in the city of the near future. Nissan Europe has been collaborating with noted architects Foster + Partners on a project that imagines electric cars that can recharge themselves wirelessly both at home and elsewhere. What Nissan calls “The Fuel Station of the Future” integrates electric autonomous vehicles, the internet, and renewable energy.
Mcity: Along with Silicon Valley r&d labs, the University of Michigan’s Mcity project in Ann Arbor, Mich., has become the epicenter of connected car technology development. The University of Michigan Center for Entrepreneurship just created a partnership with the U-M Mobility Transformation Center to launch the pilot of the TechLab at Mcity. TechLab is a training ground for student interns to experience the process of transforming a lab innovation into a company, which will prepare them for the real world of product development. The Mcity test facility was launched last year, and comes from an alliance over several years between automakers, technology companies, the U.S. Department of Transportation, and the university. The full-scale, 32-acre urban environment provides real-world road scenarios – such as running a red light – that can’t be replicated on public roads; vehicle-to-vehicle (V2V) and vehicle-to-grid (V2G) technologies are part of testing grounds. Last fall, Ford became the first automaker to launch an autonomous vehicle test program at Mcity. The Ford Fusion Hybrid Autonomous Research Vehicle merges today’s driver-assist technologies, such as front-facing cameras, radar and ultrasonic sensors, and adds four LiDAR sensors to generate a real-time 3D map of the vehicle’s surrounding environment.
Connected car trade group: Connected car technology is becoming enough of an industry norm to create a trade group and a few conferences. The Connected Vehicle Trade Association (CVTA) announced that Paul Laurenza has been promoted from vice chair to chairman of the organization. Laurenza head national law firm Dykema’s motor vehicle and consumer product safety federal regulatory practices. Laurenza has advised clients on connected vehicle legal and policy issues for more than a decade, and is a frequent speaker and author on emerging intelligent vehicle technologies. CVTA was created to facilitate the interaction, and advance the interests, of the entities involved in the vehicle communication environment and developing bidirectional vehicle communications.
Conferences: Automotive Megatrends Magazine is hosting three events in Detroit this year combined into one. On March 15-17, day-long conferences will cover connected cars, autonomous vehicles, and fuel-efficient vehicles. All three will take place at The Henry in Dearborn, Mich. Connected Car Expo will take place again at the beginning of the LA Auto Show on Nov. 15-17, 2016. Keynote speakers will include John Zimmer, co-founder and president of Lyft, Inc.; and Arwed Niestroj, CEO of Mercedes-Benz Research and Development North America in California.
Who’s right – Musk or Zuckerberg? In an interview with Axel Springer CEO Mathias Döpfner for the German newspaper Die Welt am Sonntag, Facebook CEO Mark Zuckerberg doesn’t agree with Tesla CEO Elon Musk’s concerns over machines being stronger than humans, taking over and wreaking havoc. Musk and colleagues have serious fears that artificial intelligence could one day dominate and take over the human brain. They’ve poured money into a Y Combinator-led project to make sure it doesn’t happen. Zuckerberg thinks it’s more hysterical. “I think that the default is that all the machines that we build serve humans so unless we really mess something up I think it should stay that way,” Zuckerberg said.
Fiat Chrysler and Apple? Fiat Chrysler Automobiles CEO Sergio Marchionne, who describes himself as an “Apple freak,” would love to partner with the technology giant on building a car. Apple Inc. would be well served to partner with an established global automaker, given the complexity of auto manufacturing, Marchionne said at the Geneva Motor Show. Besides, Marchionne loves Apple’s technologies and owns every kind of product the company makes. Marchionne has been spending a great deal of time in the past two years looking for a major corporate partner to merge with – to eliminate Fiat’s debt and boost its profits. FCA has been behind its OEM competitors in electric vehicles, advanced connected car technologies, and mobility services. Partnering with Apple could be ideal, since that technology has invested in electric and autonomous vehicle technology projects – and would be better partnering with one or more OEMs.

This Week’s Top 10: Nevada workers protest at Tesla’s Gigafactory, More on Volkswagen diesel scandal

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…….

Nevada workers protest at Gigafactory: Hundreds of union construction workers walked off the job at Tesla Motors’ “Gigafactory” battery manufacturing plant in northern Nevada yesterday, and some picketed outside the main gate, to protest what union organizers say is the increased hiring of out-of-state workers for less pay. About 350 plumbers, carpenters, electricians, painters and others walked away from the construction site Monday along U.S. Interstate 80 about 25 miles east of Reno. More than 100 picketed outside the main gate. Workers are protesting against what they say is an unfair labor practice that undermines promises to hire mostly Nevada workers in exchange for more than $1 billion in state tax breaks. Tesla said in a statement that it is in compliance with all state requirements. Tesla had begun manufacturing energy-storage devices, including the Powerwall for homes, at the plant. Tesla also had some good news – winning in Indiana, where a bill that would have stopped the company from selling its electric cars in the state was tabled. Tesla has been licensed to sell its cars directly to consumers in Indiana and has operated one store in Indianapolis for two years. General Motors was behind the lobbying to block Tesla in the state as the Detroit automaker gets ready to roll out its competitive model, the Chevrolet Bolt.
Volkswagen update: Former VW CEO Martin Winterkorn was informed that the carmaker had told regulators it was using emissions defeat devices two weeks before the diesel engine scandal became public, German tabloid Bild am Sonntag reported……. U.S. District Judge Charles Breyer in San Francisco said he wants a definitive answer on the status of a fix by March 24 from VW. With VW admitting in September that its vehicles on U.S. roads were using software to emit up to 40 times legally allowable pollution, Breyer wants to see the case move forward soon.
Hybrid pickups: General Motors is going to give hybrid pickups a test run once again. GM will market test 500 Chevrolet Silverados and 200 GMC Sierras in California. They’ll be equipped with a new version of GM’s eAssist mild hybrid start-stop system. The Chevrolet Silverado 1LT two-wheel-drive crew-cab model and the GMC Sierra Crew Cab two-wheel drive with SLT package will come with eAssist for a $500 charge.
Clean Cities budget cut: The U. S. Department of Energy announced its 2017 budget proposal that includes a 32% reduction in spending for the Clean Cities program from $48.4 million in FY2016 to $31.5 million for FY2017 (which starts on Oct. 1, 2016). That will completely eliminate funding for the Alternative Fuel Vehicle Community Partner projects. The vehicle technologies deployment fund also had its funding decreased, from $32 million to $23 million. That budget does include an additional $60 million to develop ways to double the fuel efficiency of Class 7 and Class 8 commercial vehicles by 2020.
Zipcar upgrades its services. Zipcar is finally dealing with the ongoing criticism that you always have to return the carsharing vehicle to the same place you picked it up; and extending the rental has been an annoying process. Zipcar said that “designated vehicles” will be available for one-way trips, reservations can be extended indefinitely, and final destinations can be changed in the middle of a trip. The company has already been piloting the new features in Boston in collaboration with Honda, and the national rollout will use Honda Fits exclusively at first.
Uber self-driving cars: Uber will be opening a new Advanced Technologies Center in Pittsburgh, where its autonomous vehicle research operations are headquartered. The company will build temporary roadways to test self-driving cars as part of its expansion, as well as housing and park space. It will be the first major move since the test project was launched a year ago with Carnegie Mellon University.
Nissan protecting Leaf from hackers: Nissan felt the need to tighten the security of its Nissan Leaf electric car so that hackers don’t take control. The NissanConnect EV app, which allows Leaf drivers to control the car’s heating and cooling over the phone, had a security flaw publicized by Australian researcher Troy Hunt, so it’s been disabled.
Motiv Power Systems and Morgan Olson are collaborating to provide an all-electric option for Morgan Olson’s popular “Route Star” walk-in van, built on the Ford F59 chassis. Both companies will be exhibiting at The Work Truck Show in Indianapolis, March 1-4. An F59 chassis equipped with a Motiv all-electric powertrain will be on display in booth #5667. This deal brings together a battery electric powertrain supplier for trucks and buses, and a leading manufacturer of walk-in vans announced today in a partnership to put more all-electric delivery trucks on America’s roads.
Plug-in Mini Countryman: The next Mini Countryman crossover may get a plug-in hybrid powertrain, with a shared platform coming from the European-market BMW 2 Series Active Tourer. Plans for a plug-in hybrid Mini were confirmed by Andreas-Christoph Hoffman, Mini’s global communications head.
PERC participating at Work Truck Show: The Propane Education & Research Council will again participate in the Green Truck Summit sessions at the National Truck Equipment Association’s Work Truck Show in Indianapolis. Tucker Perkins, PERC’s chief business development officer, is joining representatives from across alternative fuel industries to discuss “Work Truck Trends and Outlook for Alternative Fuel Technology” from 9:30 to 10:45 a.m., Tuesday, March 1. Perkins will also lead a panel called “The Propane Autogas Advantage: Reduce Your Total Cost of Ownership” from 8 to 9:15 a.m. Wednesday, March 2.

OEMs aren’t backing away from non-fossil fuel vehicles

ZEVs Gasoline prices may stay down for a while, but OEMs don’t seem to be backing away from producing zero, or near-zero, emissions vehicles. Industry forecasters tend to agree that green cars will make up a sizable percentage of global new vehicle sales in the fairly near future.

Here’s a snapshot of the latest news developments on this topic:

Honda is striving to produce two thirds of its new vehicles that will be electrified in some way by around 2030, according to Honda president and CEO Takahiro Hachigo. That will include hybrids, plug-in hybrids, battery-electric, and hydrogen fuel-cell vehicles. In 2015, Honda produced about 4.5 million vehicles worldwide; if Honda were to stay at that current production schedule, it would mean that nearly three million of its new vehicles would be electrified in some form. This will tie into the company’s plans to better allocate manufacturing around the world and reorganize its management structure, Hachigo said. It would also fit well into its corporate sustainability targets.
Toyota is moving in that direction, most likely without too many plug-in vehicles. Last October, the company announced in a report that it plans to sell 1.5 million hybrids globally by 2020 and more than 30,000 fuel-cell vehicles by that same year. It’s one part of a grander scheme to reduce its corporate carbon emissions 90% by 2050 from where it stood in 2010. Ramping up factories with renewable energy and hydrogen-based production methods will help the automaker hit that target. The plans so far don’t include any commitments to support battery-electric vehicles; but there’s always plug-in hybrids such as its Toyota Prius Plug-in. The company does want to get away from selling combustion-engine cars.
Bloomberg New Energy Finance released a study forecasting that 35% of new vehicles sold worldwide will have a plug by 2040. Pricing will be coming down as lithium batteries become more affordable. Long-range electric cars will cost less than $22,000 (in today’s dollars), according to the Bloomberg projections. Government policies in the U.S., China, and Europe will continue to be a big incentive for consumers and fleets to buy electric cars. Falling oil prices won’t play as big a role in the future as they do today as sticker prices on EVs start dropping, according to the report.
Lux Research still thinks we’re a few years out of the “EV Inflection Point” when plug-in cars (both battery electric and plug-in hybrid) make up more than 50% of new car sales. In the 2016 edition of the EV Inflection Tracker, Lux estimates that the EV Inflection Point is in the 2035-2040 time-frame. Lux is using EVs with greater than 200 miles of driving range at a price point of $35,000 or less as a benchmark for a significant acceleration of adoption. “Given the lack of any vehicles, let alone a wide variety, that meets these criteria, we’re far from the EV Inflection Point,” a Lux Research e-newsletter article says.
Volkswagen has been indicating for several months that electric vehicles (EVs) will be a solution to its current diesel vehicle reporting scandal. The U.S. Environmental Protection Agency seems to agree. EPA has asked Volkswagen to produce EVs in the U.S. as a way of making up for its rigging of emission tests, the German newspaper Welt am Sonntag reported. The article said EPA has asked VW to produce electric vehicles at its plant in Chattanooga, Tenn., and to help build a network of charging stations for EVs in the U.S.
Europe is a growing market for EV sales. Europe has seen substantial growth in EV sales; at about 75,000 new vehicles registered, it was nearly 50% higher last year in sales than was seen in the 2014 numbers. Seven of these European nations made a top 10 EV global sales list for last year with Norway, France, the U.K., and Germany accounting for about 75% of all registrations/sales for the year.
Navigant Research’s John Gartner anticipates that sales volume will go back up in the next couple of years. By 2017, there will be several new EVs for consumers to test drive from Audi, BMW, Ford, GM, and Tesla. Expansion of the charging infrastructure is likely to increase EV adoption, as well. Survey results from Navigant have shown that U.S. consumers see the availability and inconvenience of charging EVs as the main reasons not to switch from gasoline to electric-powered cars.
In its “Cars 2025” study, Goldman Sachs predicted that a quarter of new vehicles sold will be hybrid or electric. “Regulations on fuel economy and CO2 emissions are forcing carmakers to make engines more efficient. By 2025, 25% of cars sold will have electric engines, up from 5% today. But most of those will be hybrids, and 95% of cars will still rely on fossil fuels for at least part of their power,” according to the report.
Daimler is playing a reticent role in supporting clean vehicle technologies. Daimler CEO Dieter Zetsche said the company has ruled out investing in battery cell production for EVs with other German premium brands for at least another few years. He thinks that massive overcapacity in the market that has turned cells into a commodity. German automakers have not been creating as supportive a market for EV sales growth within that country as have other European markets. Daimler has also been behind on fuel cell vehicle support – not selling that many of them even though it has been producing and marketing its own fuel cell car. It’s also been interesting that Daimler has been a large investor in Tesla Motors but is not doing very much with Tesla’s technologies. Daimler is using the Tesla drivetrain in its electric Mercedes-Benz B 250 e model. It’s become a more sensitive issue in Germany since November when Tesla CEO Elon Musk said that the German government had approached Tesla to discuss state subsidies for building a battery plant in the country. Japan has been a much larger producer of EV battery packs. Battery cells used in plug-in hybrid models made by German automakers including the Audi A3 e-tron and BMW i3 battery-electric car come primarily from Asia; in these two cases from Panasonic and Samsung SDI, respectively.

This Week’s Top 10: Faraday Futures may lose support for Nevada factory, Uber driver goes on killing spree

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…….

Will Faraday have a Nevada factory?: Luxury electric carmaker Faraday Future may be losing support for its $1 billion electric car factory in North Las Vegas. Nevada State Treasurer Dan Swartz is concerned that Faraday or its billionaire backer, Jia Yueting, founder of Chinese Internet company Leshi, will not be putting up at least $70 million to insure Nevada’s infrastructure investment. Nevada has been under scrutiny lately for incentives to attract outside companies like Faraday Futures and Tesla Motors to set up shop in the state. Tesla and the state government have been defending the $1.3 billion tax incentive package the company was awarded by Nevada lawmakers to bring its Gigafactory lithium ion battery plant to Nevada. The state is offering Faraday $217 million worth of incentives including the infrastructure – roads, a rail line, and water pipes. Faraday will be funding the $1 billion plant. Nevada wants the $70 million from Faraday as security in case the manufacturing plant doesn’t come through.
Uber driver shooting spree: Ridesharing giant Uber may need to revise hiring standards on its drivers following a horrible killing spree in Kalamazoo, Mich., by an Uber driver. Suspected gunman Jason Brian Dalton, 45, killed six people and wounded two on Saturday night over a 12-mile series of shooting rampages. It ended with the fatal shooting of a father and son browsing the brightly-lit parking lot of a Kia dealership, police said. Local authorities believe Dalton was transporting Uber customers and pocketing fares between the shooting episodes. Uber has confirmed Dalton had passed a background check.
EVS29 coming up in June: All elements of the electric drive value chain will be represented at the 29th International Electric Vehicle Symposium in Montreal. EVS29 is expected to bring together about 2,000 attendees, including R&D experts, leading manufacturers, top industry executives and government partners from around the world. The event will take place June 19-22, 2016. “EVS29 is the largest global event showcasing electric drive technologies, where we will hear from the experts on technology, trends and continued growth in the industry, exhibitors will offer a hands on experience with their products and services and attendees can test out the latest models and charging equipment at the Ride, Drive & Charge.” said Genevieve Cullen, president of the Electric Drive Transportation Association (EDTA), the U.S. association dedicated to advancing electric drive technologies and organizer of the symposium. Visit www.evs29.org to register or to learn more about sponsorship, exhibition opportunities, and media credentials.
Koch brothers backing pro-petroleum campaign: A new political advocacy group supporting petroleum transportation fuels and attacking electric vehicle incentives may by rolling out soon. The new group is being backed by brothers Charles and David Koch, prominent donors to conservative causes. Charles and David Koch lead Koch Industries, the nation’s second largest privately held companies; much of its revenue comes from producing petroleum fuels. A Koch Industries board member is working with a lobbying who used to head up the American Fuel and Petrochemical Manufacturers to start up the new advocacy group, according to The Huffington Post. The new group may be spending about $10 million a year for its lobbying and marketing efforts.
New EV partnership: Aston Martin has set up a venture with Chinese technology group LeEco to jointly develop the British luxury car brand’s first electric vehicle based on its Rapide S. “It brings Aston Martin’s electric car project forward,” said Aston Martin CEO Andy Palmer (and former Leaf advocate in his role as Nissan’s chief planning officer). The joint venture also plans to collaborate with electric carmaker startup Faraday Future.
Automotive Digest resources: Green Auto Market’s media partner, Automotive Digest, has been reorganized with more emphasis on next-generation automotive technologies – autonomous vehicles, digital marketing, connected cars, and other popular auto industry topics like vintage and classic cars, technology trends, and profiles of influential industry leaders. Take a look at Upcoming Industry Events, which tracks all of the significant automotive events including conferences focusing on clean transportation and fleet management. You can also view links to Green Auto Market and its stories of the week. Automotive Digest also promotes media partners, Fleet Management Weekly and Used Car Market Reports. Check out the latest in video interviews on AD.com, FMW, and UCMR.
The U.S. Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E) will host its annual Energy Innovation Summit from Feb. 29-March 2, 2016 at the Gaylord National Resort & Convention Center in National Harbor, Md. Featured Technology Showcase demos and displays include: air and ground robotics display for bioenergy crop breeding; a personalized wireless heating and cooling device for building efficiency; a converted shipping container with solar charging station for four Current Motor Electric Cargo Motorcycles; aerial robotics systems for natural gas monitoring; and a Ford F-150 adapted with an adsorbed natural gas system.
Transportation and climate change: University of Michigan’s Transportation Research Institute has published a report in support of the 2015 Paris Agreement of the United Nations Framework Convention on Climate Change. The focus of this study was on actions individual Americans can take without a major change in lifestyle to assist in meeting the Paris Agreement, with transportation providing the most viable option. The study concludes that if the average U.S. fuel economy increased to 31 mpg, total U.S. emissions would be reduced by 5%. If the average fuel economy were 56.0 mpg, total U.S. emissions would be reduced by 10%.
Toy version of Model S: Tesla Motors may have found a tactic for winning over future car owners. Radio Flyer Inc., an American toy company best known for its popular red toy wagon, has collaborated with Tesla to create a drivable miniature version of the Model S for children. The ‘Model S for Kids’ ages 3 to 8 comes in real Model S colors. It has working headlights, a front trunk, or “frunk,” and a place to plug in a portable music player. It has a maximum weight capacity of 81 pounds.
Electric bus contract: China-based BYD is bringing electric buses to Antelope Valley Transit Authority, located north of Los Angeles. The authority has approved a measure to purchase as many as 85 all-battery buses to be built at BYD’s new facility in Lancaster, Calif., based in Antelope Valley. About $72 million will be spent on 40-foot battery buses, 45-foot over-the road coaches, and BYD’s and the industry’s first-ever all-battery 60-foot articulated transit bus.

Volkswagen prepares for its toughest year ever as the emissions reporting scandal continues

VW former CEO Volkswagen AG is facing a catastrophe that will probably take years to recover from. The outcomes of government agency rulings, recalls, and class-action lawsuits will tap into VW’s cash reserves – and will dictate its future strategic planning. It’s the “perfect storm” as automakers compete to dominate global markets; compliance with national emissions standards, for the most part, is being enforced; OEMs face unattainable expectations on advanced technology innovations; and consumers expect major corporations to live with a fairly high level of accountability and transparency.

Opinions shared by VW vehicle owners, fleet operators, regulators, political leaders, and automotive analysts will also play its part in the outcome. As for now, here’s the latest significant developments on VW’s challenges:

EVs and charging could be a solution: As part of its ongoing talks with VW on fixing the diesel vehicle reporting problem, the U.S. Environmental Protection Agency has asked the German automaker to produce electric vehicles in the U.S. as a way of making up for its emission testing and reporting violations. This news came from German newspaper Welt am Sonntag, which reported that the EPA was asking VW to produce electric vehicles at its plant in Chattanooga, Tenn. Another layer to the settlement would be VW helping build a network of charging stations for electric vehicles in the U.S. It wasn’t clear whether this resolution would come from current VW models or new ones that would be introduced to the market. The automaker and EPA declined to comment. “Talks with the EPA are ongoing and we are not commenting on the contents and state of the negotiations,” a VW spokesman said.

Facing EPA and CARB scrutiny: Earlier this month, VW submitted its draft recall plan for about 85,000 VW, Audi and Porsche diesel vehicles to the U.S. Environmental Protection Agency and California Air Resources Board. CARB rejected VW’s plan in January to fix these vehicles. CARB said the plan did not meet its standards and called it “unacceptable.” On Feb. 3, CARB said that it had up to 20 business days to test if the revised plan actually reduces emissions; and the EPA will probably back CARB’s decision. If the new plan is accepted, VW could begin a recall and end the stopped sale of vehicles with these engines.

“Denial” and “obfuscation” continue to be commonly used words to describe VW’s state. Former Volkswagen Group CEO Martin Winterkorn (as seen in the photo above) may take more of the blame, as has been expected. Media has reported that Winterkorn was notified as early as May 2014 about the inevitable investigation U.S. authorities would put in motion on the diesel car emissions-test defeat device placed in several VW, Audi, and Porsche models. Volkswagen internal memos and emails suggest that Winterkorn and other company executives pursued a strategy of delay and obfuscation. The automaker would not be able to provide an explanation for elevated nitrogen oxide emissions and deceptive emissions reporting data. Winkerton resigned on Sept. 23, 2015, and said at that time that he didn’t find out about the defeat device until right before the company’s response to EPA’s recall announcement.

Class-action lawsuits: Dozens of class-action lawsuits filed nationwide on behalf of hundreds of thousands of angry Volkswagen owners, dealers, and other parties have been centralized in San Francisco federal court. Attorneys have been in communications on the best strategy to hold VW accountable in a case with billions of dollars at stake. It’s considered to be in the process of becoming one of the most massive legal assaults in U.S. history. All of the cases against VW have been assigned by a special national panel to San Francisco U.S. District Judge Charles Breyer.

Daimler is facing its own accusation that it utilized a shut-off device in emissions testing. The German automaker said that a U.S. class action lawsuit alleging that its Mercedes-Benz diesel cars use a device that turns off pollution controls is inaccurate. Consumer-rights law firm Hagens Berman Sobol Shapiro filed a lawsuit in a federal court in New Jersey alleging that Mercedes has placed a shut-off device in its BlueTec “clean diesel” cars that causes the vehicles to violate U.S. emissions standards when running at cooler temperatures. Daimler spokesman Joerg Howe said the company is complying with regulatory frameworks and all its vehicle are certified according to all the laws that it’s required to comply with. Daimler may be going in a similar direction as VW in cleaning up its image as a responsible, sustainable company. VW may need to manufacture more EVs in the U.S. as part of its EPA settlement. Daimler just decided that its executives must drive a battery electric vehicle or plug-in hybrid vehicle at the Stuttgart, Germany headquarters. These will be their company cars and it’s thought to be part of Daimler’s strategy to give its management more experience with plug-in electric vehicles.

Former General Motors vice chair Bob Lutz says that years ago he and his colleagues had been mystified at VW’s ability to build diesel cars that could pass stringent emissions tests. When Lutz served as GM’s “car czar” from 2001 to 2009, he had GM engineers analyze Volkswagen’s TDI models to see how the German automaker managed to meet U.S. emissions standards. Lutz wanted GM to sell more diesel cars in the U.S. GM staff couldn’t figure out how VW was able to meet the particularly strict standards in California, Lutz said. GM and its competitors wanted to build fuel efficient cars with strong engine performance; but they left diesel passenger cars to VW to take the lead. Lutz has always supported plug-in hybrid electric vehicles (such as the Chevrolet Volt and Via Motors vehicles).

Global sales: VW had been aiming to retain its number one spot in global auto sales, but that took a sharp turn after the news broke out in September. There’s been a lot of media coverage recently with a humorous twist. Car sales may be down, but wiener sales have gone up. Last year, VW’s car deliveries fell about 5% from 2014 to 5.8 million units; during that year its currywurst wiener output climbed 14% to 7.2 million sausages. Beyond that story, here’s the numbers on VW’s sales performance: In January, according to figures released by the European Automobile Manufacturers Association, overall new car registrations in European Union nations rose 6.2% while registrations of VW-brand vehicles fell 3.8%. VW brand’s market share in the EU fell 1.2 points year over year, to 11.7%. VW still has the commanding lead in the EU and its Audi brand did well, increasing 13.7% in January. Its sales fell 7% in the U.S. in January after the automaker had to halt sales of several models over the scandal. The automaker’s global sales rose 3.7% in January, as it still holds a strong position in a few overseas markets, especially China. The automaker sold 847,000 vehicles worldwide in January, up from 817,000 in the same month a year earlier.

Diesel car sales: VW and Audi diesel car models had been dominating diesel passenger car sales in the U.S., but that’s taken a downward turn since September. In January, automakers sold fewer than 225 diesel cars compared to somewhere between 4,800 and 9,500 a month through the first eight months of 2015, according to WardsAuto.com. Diesel-engine pickups are still doing pretty well (which GM and Chrysler had been counting on). Automakers sold 21,999 diesel light-trucks in January.

Taking the heat in South Korea: South Korean government prosecutors raided and searched VW’s Seoul headquarters and other South Korean offices. Computer hard drives, emails exchanged with headquarters, emissions verification, and vehicle certification information were confiscated by investigators during the search. The homes of VW executives in charge of product quality control were also raided. “We have made (it) clear that we will fully cooperate with the investigation and our position remains unchanged,” a Volkswagen spokesman told the AFP news agency.

VW has indefinitely postponed its fourth-quarter and full-year 2015 earnings reports as it scrambles to adjust its financial reporting to include the spiraling costs of the scandal. Some analysts are speculating that CEO Matthias Mueller is working behind the scenes to get to a settlement with the U.S. government that VW can charge against its 2015 earnings. The idea is that these negotiations could help get the company past the scandal more quickly – and it could help speed its efforts to recover its reputation with consumers around the world. That’s a very tall order for VW to face.

This Week’s Top 10: Did EV sales forecast become overstated? United Nations issues air travel emissions rules

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…….

Digging into EV sales forecast: Manheim’s annual Used Car Market Report made a surprising forecast last week: By 2025, electric vehicles (EVs) are expected to make up 25% of global auto sales, and 30 million new EV units will be produced that year. How accurate could this be, with global EV sales reaching about 520,000 units last year, global new vehicle sales hitting around 89 million in 2015, and 2025 coming up in nine years? Manheim thinks that incentives will play a big part, including government programs such as federal tax incentives and state rebates (with California, Washington, and Colorado currently offering the most robust incentives). Population migration to cities will be another driver with cities becoming denser, which is likely to drive adoption of cleaner vehicles and carsharing, both of which will benefit EV sales. Curious about this forecast, I dug into the footnotes. For the 25% of global sales forecast, Manheim cited the “Cars 2025” study by Goldman Sachs. One important distinction is that Goldman Sachs included hybrid vehicles in that sales forecast numbers: “Regulations on fuel economy and CO2 emissions are forcing carmakers to make engines more efficient. By 2025, 25% of cars sold will have electric engines, up from 5% today. But most of those will be hybrids, and 95% of cars will still rely on fossil fuels for at least part of their power.” The most telling statement from the Manheim report is how many EVs are being leased now versus purchased – 75% of EVs are being leased versus 28% of traditional cars sold in the U.S. This glut of off-lease EVs will create a real challenge for remarketers in managing the inventory and strengthening their resale values.
Air travel emissions rules: The United Nations has drafted the first-ever carbon emissions rules for airplanes which still need to be finalized. Proposed rules from the International Civil Aviation Organization (ICAO) would apply to all new airplanes delivered after 2028. Planes delivered after that date would need to have a 4% reduction in emissions of carbon dioxide and other substances compared to 2015 airplanes that were delivered to buyers. The new rules would also set limits for airplanes already in production that would be delivered after 2023, with emissions reductions of 0 to 11%, depending on a plane’s size. Reducing emissions has been a priority for a few stakeholders in aviation. Several major airlines have already adopted test programs using jet biofuels.
Volt system going to other OEMs?: The second-generation plug-in hybrid system built into the 2016 Chevrolet Volt is being shared in other General Motors’ products (2016 Chevrolet Malibu Hybrid, 2017 Cadillac CT6 Plug-in Hybrid, and the Opel Ampera-E in Europe). GM is likely ready to sell the alternative powertrain system to other carmakers as well. Dan Nicholson, GM’s global powertrain chief, recently made comments about partnering with other OEMs in this era of higher fuel-economy rules and multiple advanced technologies. To meet stringent national standards in fuel economy and emissions, some smaller Asian automakers (Mazda and Subaru among them) are expected to go with the next-gen Toyota plug-in hybrid system. In this competitive market with global alliances, GM is preparing to work with other OEMs.
Million miles traveled in fuel cell cars: Hyundai Tucson Fuel Cell drivers have accumulated more than 1,000,000 miles on the roads and highways of Southern California since introduction of the hydrogen-powered car in June 2014. The first mass-market produced fuel cell vehicles has been sold to nearly 100 owners so far. Hyundai reported that approximately 385 tons of CO2 emissions that would have been emitted from vehicles of similar size were displaced during those million miles. Toyota and Honda fuel cell vehicles have been grabbing a lot of media attention recently, but Tucson Fuel Cell crossover models have been on the roads for a year and a half.
SEMA challenges EPA rules: The Specialty Equipment Market Association, which represents aftermarket parts companies and puts on the popular SEMA Show, is taking on U.S. Environmental Protection Agency rules on converted aftermarket vehicles. SEMA is challenging language that would be added to current auto emissions rules that ban tampering with or disabling emissions control systems on passenger cars and engines, including vehicles intended solely for racing. The EPA says the new language merely clarifies a prohibition that has long been agency policy. It will be part of a heavy-duty vehicle emissions rule that EPA will issue in July, which includes a separate exemption for “nonroad” vehicles, such as all-terrain vehicles, snowmobiles, and dirt bikes. SEMA has warned that the rule would expose racers and some aftermarket companies that serve them to penalties and reverse decades of agency policy on the issue.
Clean Power Plan put on hold: The Obama administration’s Clean Power Plan has been put in limbo by the Supreme Court. The climate change policy affecting energy utilities has been placed on temporary halt while an appeals court considers a legal challenge to the rule aimed at regulating coal-burning power plant emissions. Since the U.S. Environmental Protection Agency published the rule in late October, more than 20 energy companies, other businesses and industry organizations, along with 27 states, have filed lawsuits to overturn it.
RNG sales climb: Clean Energy Fuels Corp. announced that sales of Redeem, its renewable natural gas (RNG) vehicle fuel, more than doubled in 2015 to 50 million gasoline gallon equivalents (GGEs) from 20 million GGEs in 2014. Redeem sales have expanded from Clean Energy public-access stations in California, to become the contracted fuel choice of customers like UPS, Republic Services, the City of Santa Monica’s Big Blue Bus, the University of California San Diego and others. Sales also have recently expanded into Oregon and Texas.
Operating AFV maintenance and fueling sites: On March 3, ACT Expo will host another webinar with this one featuring guidelines on setting up maintenance and fueling facilities for alternative fuel vehicles. William Davis, director of the National Alternative Fuels Training Consortium (NAFTC), will help provide information about the necessary fueling and maintenance facility modifications for alternative fuel vehicles, including natural gas, hydrogen, propane, biofuels, and electric drive vehicles. Davis has been with the NAFTC for 16 years, and oversees daily operations of the NAFTC and its member educational institutions.
Kia takes on Prius: Kia is increasing competition with the Toyota Prius lineup with additions to its green cars. At the Chicago Auto Show, Kia unveiled the 2017 Optima Hybrid and Optima PHEV plug-in hybrid that can travel 27 miles on electricity alone. Kia also introduced the Niro, the company’s first dedicated hybrid nameplate. It’s part of a $10 billion plan through 2020 Kia introduced last fall. It will increase its fleetwide fuel efficiency by 25%, helping the company to satisfy stricter environmental regulations around the world.
Daimler diesel cars: Daimler seems to be finding opportunity opening up in the diesel car space as Volkswagen struggles through its disaster. Daimler will be spending 6 billion euros ($2.94 billion) by 2019 on developing next-generation diesel engines to help the automaker to meet new pollution-measuring standards. Daimler will introduce selective catalytic reduction (SCR) on its smaller Mercedes-Benz front-wheel-drive compact cars by 2019; that will replace current nitrous oxide trap exhaust systems, the company said.

Snapshot of where things really stand with Tesla Motors

Elon Musk on investor conference call As seen in Green Auto Market and automotive media in general, Tesla Motors can seize center stage for periods of time and then do it again. In the past few years, other automakers (like Subaru, Hyundai, and Kia) have surged forward in sales and market presence; but their brand imaging pales in comparison. That being said, here’s my latest reality check on Tesla’s performance:

Stock prices have dropped. The share price closed at $151.04 on Friday after having hovered around the $200 per share mark for several weeks. The high point reached in the past year was $286.65 per share. The fourth quarter earnings report last week was strong enough to get shares to jump nearly 6% to 10% on Thursday, but they declined again on Friday. The upcoming launch of its Model 3 and strong results from its energy storage division have helped, but analysts and large investors now think that prior price targets needed to be adjusted downward. Tesla’s market cap is now at about $20 billion.

Company has yet to be profitable. On Wednesday of last week, Tesla posted its eleventh straight quarterly loss. Last year at the Detroit Auto Show, CEO Elon Musk said it won’t be until 2020 that the company becomes profitable (on a basis that includes charges and executive compensation). During last week’s investor conference call, Musk told investors that the carmaker will start turning profits this year. The company is forecasting a 60% to 80% increase in vehicle sales this year and promised to turn a profit on an adjusted basis. The company also reported that it planned $1.5 billion in capital spending this year but had just $1.2 billion in the bank – but investors where enthusiastic enough to drive up stock prices up to 10% that day in after-hours trading. How does this come to be? “Investors look at Elon, and some say he’s a promoter or that he steps over bounds with what he promises,” said Robert W. Baird analyst Ben Kallo. “But his track record is pretty good. That’s why he still attracts the type of institutional investors he does.”

By the numbers. Tesla said net loss nearly tripled to $320.4 million, or $2.44 per share, in the fourth quarter from $107.6 million a year earlier. The cost of launching its Model X crossover has taken its toll. The company will be spending $1.5 billion on machinery and equipment to manufacture the Model 3, and to enhance cell production at the Gigafactory.

Status of Gigafactory: Tesla Motors has been criticized in the media lately for falling way behind on its commitment to build advanced lithium ion batteries at its Nevada plant – and to support the local economy and hire more workers. Musk scoffed at the recent news coverage, and once again defended the $1.3 billion tax incentive package the company was awarded by Nevada lawmakers. Tesla and partner company Panasonic have started up the one-million square foot factory near Reno, and permanent jobs have been created in line with what the companies reported would be in place by now. However, the job creation number is significantly smaller than what state-hired economists projected during the 2014 special session to pass the tax breaks. Musk said the Gigafactory is “moving at a very good pace.”

Competitive pricing on Model 3: Tesla will begin taking pre-orders of its Model 3 next month, which will be selling for $35,000. With incentives, that could drop down to as little as $25,000 in its closing price. That will be price competitive with the upcoming Chevrolet Bolt battery electric car, which may open at $30,000 before incentives. Tesla has managed to do very well selling its Model S in the $80,000 to $90,000 price range; and its newly launched Model X crossover is starting at around $80,000. Tesla’s creative leasing programs with bank partners such as Wells Fargo have helped close sales transactions. Eyes will be on Tesla on March 31 when it reveals the design and details of the upcoming Model 3.

Performance in 2015: Last year did look good in sales performance for Tesla with revenue up 59% over 2014. Model S sales increased 35% in the fourth quarter compared to Q4 2014. The company set a record for deliveries in the fourth quarter even though gasoline prices were way down. To better service its electric cars, Tesla will be opening about 80 retail locations and service centers and adding 300 more Supercharger locations.

Energy storage: During its quarterly report, the company announced that its Energy division has installed its first Powerwall home-battery storage units in the U.S., Australia, and Germany.

This Week’s Top 10: More on VW diesel scandal, San Diego Gas & Electric installing 3,500 chargers

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…….

More on the Volkswagen diesel emissions scandal……… Frank Tuch, previously head of VW’s group quality control, has left the company with details yet unknown beyond Tuch leaving “to take on new responsibilities elsewhere.” Tuch was appointed in 2010 by former CEO Martin Winterkorn, who did take partial blame for the scandal and left the company in September. Current CEO Matthias Mueller has been overhauling senior management positions in the wake of the emissions test-rigging scandal……… VW will be offering compensation packages to about 600,000 Americans who own one of these TDI diesel cars violating emissions limits. The U.S. attorney is finalizing the package and it’s not yet clear whether this will be a buy-back, cash, car replacement, repair, or some combination……… The European Union has become more flexible about considering new emissions rules soon after a protest measure was rejected by lawmakers. The new rules may be flawed, but lawmakers believe they will at least provide some greater regulation of emissions testing, according to Giovanni La Via, chair of the EU’s Environment Committee. Members of the European Parliament recently rejected a proposal to require on-road emissions testing for new vehicles.
SDG&E installing 3,500 chargers: San Diego Gas & Electric has received regulatory approval to install up to 3,500 electric vehicle charging stations at 350 sites. The California Public Utilities Commission has approved its Electric Vehicle Grid-Integration pilot project, which may cost SDG&E $45 million to construct. The power utility thinks it’s a great opportunity to maximize use of renewable energy to charge EVs and reduce the need for new fossil-fuel power plants. That follows Southern California Edison winning CPUC approval for its $22 million “Charge Ready” initiative. SCE says it’s a pilot project installing up to 1,500 charging stations in its service territory.
Incentives for fleet EV acquisition: Nissan’s Marc Deutsch and GNA’s Joe Annotti will be covering critical issues fleets face in deploying plug-in electric vehicles. ACT Expo is hosting a complimentary, one-hour webinar, which will highlight key incentives that help to substantially buy down the cost of electric vehicles, charging, and other costs of traditional vehicle ownership to maximize fleet deployment. Deutsch will be talking about significant fleet incentives; and Annotti will go over GNA’s Funding 360° Program that helps companies, municipalities, and organization track, evaluate, and apply for funding programs throughout North America. Click here to register for the free webinar, “Making Cents of Electric Vehicles: Key Incentives for Fleet Deployment,” which takes place tomorrow, Feb. 10, 2016, at 10:00-11:00 a.m. PT.
Leaf turns around in used values: The Nissan Leaf has seen a reverse in its used vehicle valuation dilemma. During the fourth quarter of 2015, Kelley Blue Book Auction Values on model-years 2012 through 2015 Leafs were up three percent from where they were in the third quarter. That was while gasoline prices continued to plunge – 14.2%, or 32 cents, during that time period. “This rebound could be attributed to consumers now finding the current value of electric vehicles more attractive at their current price point following months of steady declines,” KBB analyst Sean Foyil said in the latest edition of Blue Book Market Report. That was during a time period when most used vehicles saw prices dropping as off-lease vehicle returns oversupplied the market.
Goodbye Cadillac ELR: Cadillac won’t be building the next-generation version of its plug-in hybrid luxury ELR model. It has been released as a 2016 model year car, but General Motors hasn’t announced when it will be pulled off the market. It gained a lot of attention when launched as a 2014 model year electric vehicle with a $76,000 price tag. It was the only competitor out there, at the time, to the Tesla Model S. GM didn’t produce very many of them, and sales numbers were slight. It runs off a powertrain similar to the Chevrolet Volt, and it did get a lot of raves when it was first launched.
More Google driverless car testing: Google is adding to its testing grounds for self-driving cars with a new route added in Kirkland, Wash., later this month. That follows six years of road testing in Mountain View, Calif., near its corporate campus; and Austin, Texas, which allowed for autonomous vehicle testing last summer. So far, 1.4 million miles of testing has been done. The company said that going up the Pacific Northwest provides “different driving environments, traffic patterns, and road conditions.”
Oil tax in budget: President Obama today will be proposing a tax of $10 per barrel on oil in the 2017 budget to Congress. The goal is to create “a clear incentive for private-sector innovation to reduce our reliance on oil, and at the same time invests in clean energy technologies that will power our future,” the White House said. Tax proceed would go to the nation’s transportation infrastructure and to reduce emissions of carbon dioxide from transportation. That proposal could be killed off in the Republican majority House. “President Obama’s proposed $10 per barrel tax on oil is dead on arrival in the House,” House majority whip Steve Scalise (R-LA) said.
RMI on fuel price increases: As we’ve seen clearly in the past year, rapidly declining gasoline and diesel fuel prices can hurt sales of, and support for, plug-in electric, hybrid, and alternative fuel vehicles. Amory Lovins, chief scientist at Rocky Mountain Institute, thinks that these market conditions are set to turn around. Read on for his perspectives.
Army testing autonomous vehicles: The U.S. Army is going back strong to its R&D efforts that started in the 1980s. The Army recently has been testing convoys of autonomous vehicles that follow a truck driven by a human. These tests have included up to 10 vehicles equipped with cameras, radar and onboard computers to identify potential road hazards. The equipment is costing the Army about $175,000 per vehicle; the Army thinks this will go down to one tenth that cost once it becomes mass produced.
Uber taking heat for changing logo: Along with increasing “surge pricing” that is driving up the cost of Uber trips, the latest controversy on the ridesharing giant is that its emblem has been changed dramatically. The title of a Washington Post piece tells the story, “Why everyone hates Uber’s new logo.” Riders has grown accustomed to its grey “U” logo. At the beginning of this month, the logo on the mobile app transformed into a circle with a thin line through the left side; and it rests within an aqua green background with etchy, thin lines in some sort of diagram. It could be the logo for any company, and the iconic U has gone away.