This Week’s Top 10: Feds investing $4.5B in nationwide charging, Tesla and SolarCity closing merger deal

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. EV salesSupport for nationwide network: The Obama administration is adding to its support for electric vehicle charging stations with $4.5 billion in U.S. Energy Department loan guarantees. The funds will support a commercial-scale roll out of charging stations, with federal, state and local governments partnering with automakers including Tesla, Ford, GM, and Nissan. The administration aims to complete a national network of fast-charging stations by 2020 to make “coast-to-coast, nationwide zero-emissions travel” easier for consumers. State, county and local governments will be encouraged to buy electric cars for their fleets, lowering procurement costs while expanding the market for the cars. Utilities supporting the infrastructure growth include Berkshire Hathaway Energy, Con Edison, Duke Energy, and Southern California Edison are also involved. Twelve utilities and charging companies have committed to increase their deployment of EVs and charging infrastructure. Supporting programs include DOE’s Workplace Charging Challenge and an EV “Hackathon” this fall to create new solutions for EV charging.
  2. Tesla and SolarCity merger: Tesla Motors and SolarCity negotiated into the weekend on merging the electric carmaker with the solar power company. Tesla CEO Elon Musk has recused himself from voting, serving as chair of SolarCity and working with his cousins SolarCity CEO Lyndon Rive and SolarCity board member Peter Rive, who have also recused themselves from voting. The companies are in the final stages of carrying out due diligence on each other, and could agree on the terms of a deal in the coming days, though it is still possible that their negotiations end unsuccessfully, sources said. Investors and analysts have been concerned about Tesla taking on too much investment in the solar company.
  3. Debate over agency midterm report: The 60-day comment period on midterm report has flared up debate over how realistic the 54.5 mpg by 2025 really is, being heavily weighted by a surge in light-duty vehicle sales. The 1,217-page draft “Technical Assessment Report” was issued on July 15 by the Environmental Protection Agency, National Highway Traffic Safety Administration, and California Air Resources Board to evaluate the status of hitting the Obama administration’s fuel economy and greenhouse gas emissions goals. The inflated sales of pickup trucks, SUVs, and crossovers coming from cheap gas prices has changed the outlook for the 2025 target closer to 51 mpg than 54.5 mpg.
  4. Master Plan, Part Deux: In a Wednesday blog post on the Tesla website, CEO Elon Musk outlined a new horizon for electrified vehicles the company will be taking on – heavy-duty trucks, pickup trucks, a small SUV, a buy-type vehicle. Musk also says Tesla will be playing into the Silicon Valley mobility company identity through rolling out autonomous vehicles and a mobile app where Tesla owners could earn income by opening up their electric cars for shared rides. “Master Plan, Part Deux” calls for an electrified future merging solar power, on-site energy storage, carsharing, and electric autonomous cars. The announcement came out in the weeks following Tesla taking heat over a fatal crash involving its Autopilot system; more criticism from Wall Street has come from Tesla missing production and sales targets and being questioned over the merger with SolarCity.
  5. ZEV sales forecasts: Navigant Research has forecasted growth in zero emission vehicles in two separate reports. The research firm expects the North American plug-in electric vehicle market to grow by around 62% year-over-year in 2016, nearing 200,000 sales. Growth is anticipated to come from expanding sales of the Tesla Model X, the second-generation Volt, and introduction of the Chevrolet Bolt, Prius Prime plug-in hybrid electric vehicle, and Mitsubishi Outlander PHEV later in the year. The report projects that the introduction of the Tesla Model 3 in late 2017 will likely boost the North American PEV market by around 60% in 2017 and then nearly double the market in 2018 after the first full year of Model 3 sales. In a second report, Navigant forecasts that global sales of hydrogen fuel cell cars and buses are expected to total more than 580,000 from 2015 to 2024. “Overall, the driver for FCV activity continues to be the sentiment that a diverse drivetrain mix will be needed if the transportation sector is to shift away from petroleum dependence,”says Lisa Jerram, principal research analyst with Navigant Research.
  6. Autonomous Facebook flights and Slurpee delivery: Pilotless drone planes are gaining more support from big names like Mark Zuckerberg and 7-Eleven. A small Facebook team has been working on a secret project – sending a high-altitude solar-powered drone plan named Aquila on test flights. The mission statement is to launch of fleet of aircraft that will deliver internet access around the world. Zuckerburg says it’s part of the company’s plan to bring the internet to all 7+ billion people on Earth. Doing so will lift millions of people out of poverty, improving education and health globally along the way, Zuckerberg says. Convenience store king 7-Eleven Inc. and tech startup Flirtey have beaten Amazon to the punch in making the first drone delivery to a customer’s home in the U.S. During the 7-Eleven delivery on July 10 in Reno, Nev., Flirtey successfully transported: Slurpees, a chicken sandwich, donuts, hot coffee, and candy to the home of the family who placed the order. Flirtey is a privately held company based in Reno, which builds and operates drones to make deliveries that are needed in humanitarian and health work, retail and food industries.
  7. JLR, Ford, and BMW in battery plant talks: Jaguar Land Rover is in talks with Ford and BMW about building a battery plant with the capacity to power several hundred thousand electric vehicles. There’s been no word over whether this plant would be based in the U.K., the U.S., Germany, or another location. The plant would help Jaguar launch its first electric vehicle, and to join other luxury carmakers in a competitive battle with Tesla Motors. Ford has been working with LG and BMW with Samsung as lithium battery suppliers.
  8. Audi EV strategy: Audi says it will be rolling out three electric models by 2020, and that electric vehicles will make up 25% to 30% of its sales by 2025, CEO Rupert Stadler told a German newspaper. It will be tied into a larger corporate strategy to focus more on resources on electric cars, digital services, and autonomous driving. The rollout of electric cars will also include small vehicles in the A-(minicar) segment. The company will also set up a subsidiary, to be called SDS Co., to develop an autonomous car.
  9. Quantum has new ownership: Quantum Fuel Systems Technologies Worldwide is emerging from its bankruptcy through acquisition by Douglas Acquisitions LLC, an affiliate of second-position secured creditors. Quantum, based in Lake Forest, Calif., had shifted its focus to selling natural gas fuel tanks in recent years. The company recently received a delisting notice from NASDAQ. Quantum filed for Chapter 11 bankruptcy protection in late March and sought a buyer through a “363” sale process, which is essentially an asset sale. The company will be renamed Quantum Fuel Systems LLC.
  10. EVs strong in used car sale days on the lot: Plug-in electric vehicles led the way in one-to-three year old used car sales during the first half of this year, according to iSeeCars.com. The fastest selling used car in the U.S. was the Toyota Prius plug-in hybrid, taking just 19.7 days to move. It was followed by the Nissan Leaf at 24.3 days and the Tesla Model S at 26.1 days. More than half of these cars were sold in California, where the diamond lane, HOV carpool lane stickers made them more attractive to used car buyers.

This Week’s Top 10: COP21 climate change agreement, China largest EV market and dealing with air pollution

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. COP21The COP21 climate change conference agreement, released to the public Saturday morning, may provide a solution for developed and developing countries that’s been unsuccessfully sought after for several years at these United Nations meetings. The agreement was signed by 196 nations outside Paris and sets the goal of limiting the world’s rise in average temperature to “well below 2 degrees Celsius above preindustrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius,” as read in the agreement. To help developing countries switch from fossil fuels to greener sources of energy and adapt to the effects of climate change, the developed world will provide $100 billion a year. The Obama administration was pleased with the agreement, including the section where all countries will be required to report on national inventories of emissions by source and also to report on their mitigation efforts. During the conference, mayors of five West Coast cities – Los Angeles, San Francisco, Seattle, Portland, and Eugene, Ore., – met in Portland for a two-day summit and united to reduce carbon emissions by 80% by 2050 within their cities. That announcement followed California, Washington, Oregon, and British Columbia joining the International ZEV Alliance during COP21. Another interesting moment was Tesla Motors CEO Elon Musk speaking to a group of college students at the Université de Paris Panthéon Sorbonne, laying out his vision for sustainability in transportation and the steps required to stem climate change. He also discussed the business opportunities in cost reductions from energy storage and how much mobile devices will be changing in the future.
  2. China largest EV market and dealing with air pollution: Electric vehicle sales in China are expected to top 220,000 units this year, beating the U.S. (expected to be at 180,000 units sold) for the first time as the largest EV market in the world, according to the China Association of Automobile Manufactures (CAAM). China’s “new energy” vehicle sales have seen rapid growth in the past two years thanks to subsidies and tax cuts. Air pollution in Beijing and other major Chinese cities have been driving the incentives and sales. Tesla Motors and BYD say car shoppers are more interested in owning an EV due to the air pollution – and its making for an effective marketing message. One of BYD’s online ads shows a man in a cloud of pollution calling for help from China’s fabled Monkey King hero.
  3. ACT Expo and EDTA partnering again: The Advanced Clean Transportation (ACT) Expo and the Electric Drive Transportation Association (EDTA) have renewed their strategic partnership, committing to realizing the economic, national security, and environmental benefits of alternative fuel vehicles. “The 2016 event will showcase the significant range of electric-drive technologies now available and being deployed in the marketplace and will be a hub of activity for those looking to accelerate the deployment of advanced hybrid, battery, and fuel cell electric vehicles,” said Erik Neandross, CEO of GNA, the producers of ACT Expo. ACT Expo 2016 – set for May 2-5 in Long Beach, California – will assemble more than 3,000 attendees and 250 sponsors and exhibitors to examine the latest alternative fuel and advanced vehicle technologies for all weight classes, including electric drive, hybrid, hydrogen, natural gas, propane autogas, renewables, and efficiency technologies. It’s become the “must attend” event in clean transportation for fleets, OEMs, infrastructure suppliers, government agencies, and industry trade groups.
  4. Tesla’s leasing program and secrecy: BWG Strategy hosted a conference call discussion last week with auto industry analysts, electric vehicle groups, and media. Most electric vehicles sold in the U.S. are being leased – coming in at 75% of sales this year versus 80% last year. It gets a bit tricky analyzing Tesla lease residual value performance since so few of them have been sold relative to other automakers and their luxury vehicles. There’s not enough resale value data from auctions, and there’s a secretiveness attached to Tesla and its residuals and overall operations. An example of this given by one of the call participants was Tesla Motors not joining the ROEV Association, a collaboration of industry stakeholders designed to support electric vehicle adoption by facilitating public charging network interoperability. BMW, Nissan, CarCharging/Blink, ChargePoint, and NRG EVgo, do belong to this group. They do know that Tesla lessees have an average income of $200,000. One analyst said that a key element of Tesla’s upcoming Model III sedan will be that it’s going to be lighter than other Tesla models and its battery will be getting denser. The Model III is expected to have 35-to-55 kilowatt hour battery packs (versus 90 kWh upgrades available in the Model S).
  5. Volvo embracing renewable diesel: Volvo Trucks North America, after concluding truck and engine lab testing, approved the use of renewable diesel fuel for all of its proprietary Volvo engines, offering environmental and cost-savings benefits to customers. Volvo says that it’s the first OEM to endorse the use of advanced hydrocarbon renewable diesel fuel. “Availability of renewable diesel fuel is growing in California and throughout the country. Renewable diesel meets the same ASTM D975 standard for petroleum diesel, making it a true ‘drop in’ fuel,” said Frank Bio, director – sales development, specialty vehicles and alternative fuels for Volvo Trucks North America.
  6. Faraday Future plans to build a $1 billion factory near Las Vegas, which is expected to create 4,500 jobs. Brian Sandoval and state and local economic development officials announced a deal with the company on Thursday that includes tax incentives valued at $217 million over 15 years, depending on the company’s actual investment. Nevada will also help with infrastructure needs at the Apex industrial site in North Las Vegas where the company plans a three million square-foot assembly plant. Earlier in the week, Chinese billionaire Jia Yueting disclosed to Nevada legislators that he is backing the luxury electric carmaker; he also said he is not the only founder, but he did not name any other investors.
  7. Volkswagen scandal: There have been quite a lot of lawsuits filed against Volkswagen for the use of software to evade emissions limits in its diesel car models. More than 500 civil lawsuits filed against VW will be heard by U.S. District Judge Charles Breyer in the Northern District of California. That’s the court where the first case was filed and the state where about 20% of the suits have been filed. VW and the Dept. of Justice had requested the case be sent to Detroit.
  8. Last month in Chicago, EcoCAR 3’s 16 competing university teams unveiled their advanced, energy-efficient vehicle architecture for the 2016 Chevrolet Camaros donated by General Motors. EcoCAR 3 is a four-year engineering competition where 16 North American universities are challenged to redesign the 2016 Chevrolet Camaro to reduce its environmental impact while maintaining the performance and safety of the vehicle. It’s sponsored by the U.S. Department of Energy and GM, and managed by Argonne National Labs. One of the teams active in all three EcoCAR challenges has been Cal State LA. That team received the Camaro for Year 2 of the EcoCAR 3 competition on Friday. The Cal State LA EcoCAR 3 team will spend the rest of the academic year transforming the 2016 Motor Trend Car of the Year into a plug-in hybrid electric police vehicle that runs on E-85 fuel, preparing the car to test its capabilities at the General Motors Proving Ground in Yuma, Ariz., in June.
  9. Ford will invest $4.5 billion to add new hybrids, plug-in hybrids, and battery-electric vehicles to its line-up by the end of the decade, CEO Mark Fields said. Ford will also expand where it will offer those models, with two new produced, the plug-in C-Max Energi and the Mondeo Hybrid, entering the Chinese market in the coming months. By the end of the decade, Fields says that more than 40% of the automaker’s nameplates will be electrified, up from 13% today.
  10. Vision Fleet will continue its working relationship leasing electric vehicles and installing charging infrastructure for the City of Indianapolis after having been stalled out by litigation. Consulting firm Vision Fleet had been able to deliver about half of the 425 electric vehicles that came from an agreement last year with the city. Vision Fleet had filed a lawsuit alleging the city didn’t follow procurement practices. Indianapolis had put out a notice that it was seeking proposals from another firm. Vision Fleet was the only bidder, and the contract has been revised with suggested improvements.

Tesla Energy seems to be the next logical step for the Silicon Valley company

Tesla EnergyWith its new energy storage division (called Tesla Energy), Tesla Motors continues to build on a strategy that’s working for other Silicon Valley neighbors such as Google and Apple. That would be: move into the next logical technology marketplace. Advanced batteries may produce more revenue and profit than electric cars for Tesla in the next few years – and they’ll contribute to Tesla CEO Elon Musk’s vision of reducing dependence on fossil fuels and supporting growth in renewable energy.

Along with its electric drive system, Tesla’s greatest strength is batteries – making its $5 billion investment in the Gigafactory potentially more than worthwhile; the company expects the Nevada factory to reach full capacity by 2020 and make more lithium-ion batteries than were produced worldwide in 2013. Tesla Energy will be ready to bring Tesla batteries to homes, business, and utilities to store energy to better manage power demand, provide backup power, and increase grid resilience – with much of it coming from solar power.

Called the Tesla Powerwall, it includes Tesla’s lithium-ion battery pack, liquid thermal control system, and software that receives dispatch commands from a solar inverter. Tesla Powerwall will be built into a building’s wall and will be integrated with the local power grid so that customers can draw energy from their own reserve. Benefits will include cost savings through load shifting during low rate periods; storing surplus solar energy; increasing the capacity for using more solar; and providing backup energy during grid outages.

It’s available in 10kWh, optimized for backup applications, or 7kWh, optimized for daily use applications. Tesla’s selling price to installers is $3,500 for 10kWh and $3,000 for 7kWh. Those prices exclude inverters and installation costs. The company says that deliveries will begin in the late summer of 2015.

Tesla has been testing out energy storage projects with some big-name partners including Amazon and Target. Amazon’s cloud computing division, Amazon Web Services (AWS), has been working closely with Tesla for the past year on high-capacity battery technology in data center applications. Target has partnered with Tesla on a pilot test at select Target stores to incorporate Tesla Energy Storage as part of its energy strategy. Tesla has also been supplying batteries to Walmart through pilot projects and a supply agreement with SolarCity Corp. Jackson Family Wines is using Tesla’s stationary energy storage solution in four areas that account for the most consumption in its winemaking process: refrigeration/cooling, lighting, compressed air, and process water treatment.

Utilities and solar companies are also working with Tesla on energy storage systems for meeting the next wave of energy demands. Southern California Edison has developed the nation’s largest battery storage system and has contracts in place for an additional 264 megawatts of storage, including projects using Tesla batteries.

Tesla has “channel partners” in place for producing the Powerwall. TreeHouse, a sustainable home improvement store, is working with Tesla to sell the Powerwall home battery. SolarEdge, a leader in the global photovoltaic (PV) inverter market, has a deal with Tesla for joint development of a PV storage and backup power solution for the worldwide residential solar market. Vermont-based renewable energy company Green Mountain Power and Tesla will offer Vermont residents a way to use less energy and rely on the grid as a backup system.

Tesla CEO Elon Musk does have a few things in common with executives at neighboring Silicon Valley giants – with one of them being expanding into the next logical technology marketplace. He serves as chairman of SolarCity, the largest solar power company in the US (and one started up by Musk’s cousins); he leads innovative space travel company, SpaceX (and its Hyperloop high-speed rail project); the Gigafactory, which is still being developed in Nevada; and the Tesla Motors electric carmaking company, which holds the unique position of breaking into the tough auto manufacturing sector – and surviving.

The big question will be whether all of it will work. The massive investment in Tesla since startup has come from private equity shareholders, the stock market, corporate partners (such as Panasonic on the battery side and Daimler on the car manufacturing side), a US Department of Energy loan, and personal investments from Musk from his PayPal startup profits and from other Tesla executives.  Tesla Energy will require significant investments in the next few years.

Competition in the energy storage market will be fierce. Coda Automotive may not be around anymore in the electric vehicle space, but Coda Energy does have several clients at commercial and industrial sites. Schneider Electric is known for its electric vehicle charging systems, but has a significant presence in the energy storage market. Major solar companies are entering the storage market, along with commercial building suppliers and large battery manufacturers. It may come together for Tesla, and it’s possible that advanced batteries and energy storage could make for the lion’s share of its revenue in the next 10 years.

This Week’s Top 10: Federal fleet bringing in lots of zero emission and plug-in hybrid vehicles, Tesla given the greenlight again in New Jersey

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. Federal fleet electric vehicleThe White House says it will reduce greenhouse gas emissions in the federal fleet by 30% by 2025 as it ramps up purchases of zero emission and plug-in hybrid vehicles. By 2020, zero emission (battery electric and hydrogen fuel cell) or plug-in hybrid electric vehicles will make up at least 20% of new vehicle purchases, and that will go up to 50% by 2025. Federal agencies have also been directed to make sure adequate charging becomes available for these fleet vehicles. It’s part of a broader effort by the federal government to cut greenhouse gas emissions 40% by 2025 over 2008 levels and save $18 billion in energy costs.
  2. Tesla Motors has been given the greenlight in New Jersey to sell its electric cars at non-dealership corporate stores. A bill signed by Governor Chris Christie will once again allow Tesla to directly sell its electric cars in the state through its retail locations. A year ago, the governor enacted a rule that blocked Tesla from selling cars this way, only allowing for franchised dealers to sell new cars in the state. Tesla can no go back to operating up to four retail locations in the state and one service center.
  3. It’s cheaper to pay for a two-year lease now $199 per month versus the previous $259 for the Honda Fit EV. Customers can extend their lease with unlimited mileage, routine maintenance, and collision coverage if they prefer; new customers can get the same deal on used Fit EV. The Fit EV is powered by a 20-kWh lithium-ion battery and a 92-kilowatt electric motor.
  4. Medium duty plug-in hybrids are popular with fleets – as was discussed during an ACT Expo webinar last week, “Electrify Your Fleet.” Matt Jarmuz, director of sales at Odyne Systems, is seeing fleets save up to 50% or more on fuels switching over to plug-in hybrids, and some are utilizing EPAct credits. Ned Biehl, chief of staff for the Transportation Services & Aviation department at PG&E, says that his fleet is being agnostic to suppliers but sound in their business strategy in choosing the best technology. The fleet has a broad mix of electric, hybrid, natural gas, propane, and biodiesel-powered vehicles.
  5. BMW Group CEO Norbert Reithofer sees the obvious: political initiatives in a number of the carmaker’s key markets are important in helping to boost sales of its i3 electric compact car. Norway is a good example of it for Reithofer, where the government offers a well-established charging structure with free parking and charging and where there are no sales or registration taxes on electric vehicles (EVs); that helped BMW sell 2,000 i3s last year in that country, almost one quarter of its total sales in Norway. Half of its US i3 sales were in California with its rebate for buying an EV and its dedicated carpool lane stickers. EV buyers in Shanghai get to avoid the restrictive and expensive vehicle licensing process; in Europe, the UK and France offer EV buyers financial incentives and Germany exempts EVs from its annual vehicle tax for 10 years. BMW disputed media reports saying its third EV model after the i3 and i8 would be a variant of the X5 premium large SUV. Last year, BMW’s global sales of the i3 and the i8 were a combined 17,800 units.
  6. Automakers are covering their bets when it comes to meeting strict standards in global markets for reducing greenhouse gas emissions and dealing with fluctuating fuel prices. Navigant Research predicts that gasoline-engine vehicles will still be dominant in new vehicle sales and will meet demand from car buyers who aren’t yet ready for electric vehicles. The research consultancy predicts 59% of light-duty vehicles purchased in 2025 will feature turbochargers. Other changes include implementing more lightweight materials in the vehicles, using smaller engines, stop-start technology, cylinder deactivation, direct injection, and transmissions with eight or more speed ratios and high-efficiency internal components.
  7. Tesla Motors doesn’t have a radical new technology rolling out to deal with range anxiety – that worry will be addressed through a software upgrade, according to Tesla CEO Elon Musk. Over-the-air software updates to its Model S sedan will deliver Version 6.2 with two new features — Range Assurance and Trip Planner. One will automatically plan charging stops using the navigation system and the other will warn a driver if a road trip is likely to leave them stranded. These are being tested now with drivers and will be sent out to cars in about a week. Beaming software upgrades will also move the Model S forward on its Autopilot semi-autonomous features. Version 7.0 will arrive this summer. New features haven’t been revealed yet, but it will add to current Autopilot offerings such as the ability to automatically change lanes by flicking on the turn-signal lever.
  8. Ford Motor Co. continues to add to its sustainability roster – its environmentally responsible, high-performance REPREVE fiber that comes originally from plastics dumped into landfills will be available in the all-new F-150 pickup truck. Using the recycled material in the F-150 will allow Ford top divert more than five million plastic bottles from landfills this year.
  9. At the Geneva Motor Show, Mercedes-Benz announced that it will add 10 new plug-in hybrid electric vehicles (PHEV) to its lineup by 2017. That means a new PHEV will be rolled out about every four months. The first one was launched last year in the S500 Plug-In Hybrid, and this month, the new Mercedes C350e will roll out.
  10. To comply with stringent emissions and fuel economy standards while nearly doubling its global sales by 2018, Jeep may roll out a new pickup along with the brand’s first plug-in hybrid electric vehicle. Jeep CEO Mike Manley talked about it during a preview of seven concept SUVs Jeep will take out onto the trails during its annual Easter Safari in Moab, Utah.
  11. Extra: a teaser for Green Auto Market Extended Edition. This week:  The Formula E race series appears to be taking electric vehicle technology to a new level, gaining passionate support from Virgin Group founder Richard Branson and the family dynasty of racing legend Mario Andretti. Several people are very excited about that racing event coming to Long Beach, Calif., next month.

Finding the right niche markets for advanced vehicle technologies

advanced vehicle technologiesAutomotive analysts have been writing about declining sales in electric and hybrid vehicles in recent months, with the downturn in gasoline prices being one of the primary reasons for it. Navigant Research forecasts that the average price of gasoline will reach $10.75, accounting for inflation, in 2035, as alternative fuels and diesel become more popular. In the meantime, it’s likely that niche markets become more viable for OEMs; gas prices may stay soft for a while, but there are other significant motivating factors for vehicle acquisitions, with traffic congestion, an aging population, development of autonomous vehicles, and concern over environmental quality among them. Here are a few niche segments to follow………

Neighborhood Electric Vehicles: GreenTech Automotive is counting on low-speed electric vehicles finding the right audience as it ramps up at its Mississippi plant to build its MyCar neighborhood electric vehicle (NEV). Pike Research had forecasted that NEVs on roads throughout the world would increase from 479,000 in 2011 to 695,000 by 2017. Communities around the US are trying out NEVs on restricted roads to see how that affects air pollution and traffic congestion.

Self-Driving Cars: Google has said that one of the reasons the technology giant is investing in self-driving car test projects is that people with disabilities will have greater transportation options. It will also take human error out of driving and improve road safety. Unmanned aerial vehicles (UAVs), or drones, have been closely tracked by proponents of self-driving cars as a technology that will cross over into ground transportation. Lux Research sees potential for market growth in UAVs as they move from military surveillance drones to broader commercial vehicles if government regulations allow for it. Government agencies are ruminating over safety and privacy concerns.

Fuel Cell Vehicles: Fuel cell vehicles powered by hydrogen have been ending up as forklifts in warehouses, distribution centers, and manufacturing facilities as companies such as BMW, Coca-Cola, Fed-Ex, and Wal-Mart recognize the quick refueling times and enhanced performance that fuel cell forklifts deliver.

Propane Autogas: Police departments are trying out propane autogas as a way to use a clean, domestically produced fuel with lower cost per mile than gasoline. Other propane vehicle applications in recent years include: buses, light- and medium-duty trucks, shuttle buses, taxis, landscape equipment, and agricultural equipment.

Drayage and Other Port Vehicles: Vehicles used in drayage, trucking, and other functions at the Ports of Los Angeles and Long Beach are being powered by liquefied natural gas (LNG), electricity, hydrogen, and clean diesel. Clean vehicle programs have been adopted by these and other ports in the US to improve air quality and support alternative, domestic fuels.

NGV Trash Trucks: Waste Management, Inc., has embraced natural gas to power its refuse/trash truck fleet. Some of that has been produced from its landfill gas projects. Municipalities are considering using natural gas vehicles, hybrids, and other alternative fuels and technologies in their fleets. They’ve been watching their transit agencies go this route in recent years and are seeing payoff within two-to-three years from fuel cost savings and meeting government mandates on reducing emissions.

 

Four reasons I was wrong about California and electric vehicles

EV charging in CaliforniaNot long ago, I wrote about a sticking point I’ve had for a long time – it’s not all about California electric vehicle sales for bringing zero emission vehicles to US roads. Well, I may have been wrong about some of it……. California does lead the way in collaborative projects between government, industry, and non-profits organizations. Here are a few clear examples………….

  • The governor’s Office of Business and Economic Development (GO-Biz) and the Japanese government organization New Energy and Industrial Technology Development Organization (NEDO) agreed last week to conduct a feasibility study for an electric vehicle (EV) demonstration project to develop new fast charging EV stations in California. During the roughly half-year feasibility study, NEDO in coordination with GO-Biz will develop a detailed plan for the possible demonstration project. It comes from a memorandum signed by the two governments in September on climate change, renewable energy, vehicles, and other issues.

  • The County of Los Angeles has deployed 82 EVlink charging stations at 34 locations, including hospitals, sheriff stations, and the LA Civic Center. Users will get free charging up to four hours during the first year of the pilot program. Schneider Electric makes the EVlink stations and it makes a lot of sense to work with that county. “LA County is leading the way in providing their communities with EV charging solutions,” said Mike Calise, Senior Director of Electric Vehicle Solutions, for Schneider Electric. “We hope other counties will take this lead and pursue similar projects, since the sum of multiple county involvements will create a tipping point for the state.”

  • Major utility NRG’s eVgo company has installed what it says is the largest corporate deployment of EV charging stations in Southern California – 60 Level 2 workplace charging stations at Sony Pictures Entertainment’s historic facility in Culver City. Sony began offering incentives to employees in 2008 to buy EVs, and so far 300 employees have done so. The Ready for Electric Vehicle (REV) program provides Sony and other workplaces with turnkey EV charging solutions, providing charger maintenance and driver support.

  • An impressive meeting took place Thursday at the South Coast Air Quality Management District office in Diamond Bar. Officials from eight states say their country is on track to have 3.3 million zero-emission vehicles on the road by 2025 – with about 1.5 million of them in California. Beyond a vivid display of a wide range of Evs in its parking lot, officials from members of the multi-state EV task force praised California and talked about what’s been accomplished in their states. A commissioner with the Massachusetts Department of Environmental Protection said that Evs are playing a vital role in his state’s goal of dropping green house gas emissions to 25 percent below 1990 levels by 2020.

While I would still love to see other states embrace EVs, California is leading the way. That’s also true for natural gas vehicles, hybrids, and hydrogen fuel cell vehicles (which fall under the zero-emission vehicle category). I think there are three other reasons why California is leading the pack: plentiful funding programs through California Energy Commision and other state sources; university think tanks such as the UC Davis Plug-in Hybrid & Electric Vehicle Research Center with its excellent study on dealerships and EVs; and California Air Resources Board is up there with the US Environmental Protection Agency for certification standards governing OEMs in alternative fuel vehicles including natural gas and propane autogas.

Training program needed for dealer staff to answer questions from EV shoppers

dealer financeSales of electric vehicles (EVs) have been fairly impressive since their launch in late 2010, but the question of how to move those numbers up continues to plague the auto industry. A new working paper and brief by researchers at the Institute of Transportation Studies, UC Davis explores the issues. Aside from Tesla buyers, car shoppers and buyers of EVs are much less satisfied with the dealer purchase experience than are buyers of conventional vehicles. EV buyers have been dissatisfied with the level of support they receive from dealerships. The UC Davis team sees that EVs require innovation in how they’re retailed to customers during a time of change in what consumers expect from their car shopping and buying experiences. There’s a real need for a dealer training program to enhance the EV car shopping and buying experience – and Green Auto Market has a proposal on how to get that done.

Earlier this year, a Consumer Reports investigation came to similar conclusions. The magazine dispatched 19 mystery shoppers to 85 dealers across four states. One finding was that dealer staff knew little about the EVs they’re selling. In some instances, dealer staff discouraged EV purchases.  The UC Davis team conducted 43 interviews with six automakers and 20 new car dealers in California’s major metro markets for EV sales. They also analyzed national and state-level J.D. Power 2013 Sales Satisfaction Index (SSI) study data on customer satisfaction with new car dealerships and Tesla stores.

One of the challenges for EV success is that these vehicles need to be offered outside of California. Currently, 19 different EV models from 10 different automakers are available for purchase in California, but only three of these models are available nationally. While automakers have their part in getting national EV sales above and beyond 1% of all new vehicle sales, dealers play a very large part in meeting this goal. Legal battles between dealer associations and Tesla Motors present a real challenge for dealers to compete, but also an opportunity for franchised dealers to stand out. Nearly every automaker is offering an EV for sale now. It can be challenging for dealer management to get their sales representatives focused on selling EVs; they do need to spend more time these days answering car shopper questions on connectivity, infotainment, extended warranty coverage, etc. It might be attractive for a dealer sales rep to get the car shopper to focus on something other than EVs, especially if it takes a long time to answer their questions – and if the customer knows more about EVs than the sales rep.

Here’s what Green Auto Market and LeSage Consulting would like to offer automakers and dealer networks: a training model where dealer sales representatives can give a 10-minute presentation that answers questions car shoppers usually have about EVs. These questions might include:

  • Federal tax and state incentives and how they’re acquired
  • Home charging stations – how much they cost and how the building code inspection process and installation work
  • Driving range once the car is fully charged
  • Public charging stations and how they can be found on mobile devices
  • Cost of fueling compared to internal combustion engine cars
  • Maintenance process and services offered by the dealer

It would probably make the most sense to have a training program for dealer staff available on video with other presentation materials, such as a slide show and hand-outs. Whatever the method, it’s becoming more important now for the dealer experience to improve for EV shoppers – if automakers and dealers want to see those sale numbers increase and to build customer loyalty. For anyone interested in exploring this opportunity, I encourage you to send me an email.

Cheaper, lighter, high-density lithium batteries: How close are we?

Lithium battery in Nissan LeafLithium ion batteries are coming down in cost, but it’s all relative. Here’s a clear example…… The starting price on the Tesla Model S with a 60 kilowatt hours (60 kWh) lithium battery is $68,710; and the price goes up to $83,760 for the Model S with the 85 kWh option. The battery pack in a Model S costs about $30,000.

Analysts carefully watch what’s happening to the cost of lithium batteries, their weight, size, and storage capacity. Building a smaller, lighter and cheaper battery for Tesla’s upcoming lower-cost sedan has been at the heart of its $5 billion “Gigafactory” in Reno, Nev.

It’s going to take a few model years to see the price drop substantially. Here are some of the latest developments in electric vehicle batteries……….

  •  Sakti3 says that its solid-state cell is close to doubling the energy density of today’s lithium-ion cell chemistries, at only one-fifth of their current cost. That technology will support a battery cost of just $100 per kWh – but that won’t be happening until the end of this decade. Satki3, led by University of Michigan engineering professor Ann Marie Sastry, has received investment capital from GM Ventures. That goes back to 2010, when Sakti3 received a lot of media coverage and exposure (such as Sastry speaking at the Bloomberg symposium in Los Angeles during the time the Nissan Leaf and Chevy Volt were first being delivered to dealers in December 2010). The company went under the radar for a few years and has reemerged, with a recent article coming out in Fortune on the company.
  •  Panasonic has created a new company to oversee its operations at the Gigafactory as it goes online over the next two years. Panasonic has made an initial investment of $92 million, and that payment is expected to be the first of many cash infusions. Tesla Motors CEO Elon Musk says that as many as 500,000 battery packs per year could be built there by 2020. Tesla management will be in charge of the factory; Panasonic will provide the necessary manufacturing equipment and lithium-ion battery components.
  •  Nissan has been building its own proprietary lithium-ion battery pack for the Leaf sedan. It’s been seven years since that battery technology started up, and it doesn’t look like Nissan will be bringing in LG Chem, Panasonic, Sakti3, or A123 Systems for its electric vehicles. At the Paris Motor Show, Nissan CEO Carlos Ghosn shed more light on the topic. “With electric cars, we consider that the reason for which we got involved with batteries, at the beginning, is we couldn’t find batteries good enough for our cars—so we decided to assemble our own batteries,” Ghosn said. “And we will continue to do that as long as we don’t think there are enough good batteries on the market, or we don’t think there is competition to sustain the move on batteries.”
  •  Bill Reinert, the recently retired national manager of Toyota’s advanced technology group – and a very outspoken, brutally honest speaker at industry conferences – is still more impressed with hybrids than electric vehicles. Here’s what he said to a Yale University journal, Yale Environment 360….. “There’s nothing promising beyond the lithium battery on the battery horizon. And the lithium battery has tremendous shortcomings for cars – for example, it doesn’t maintain a full charge in hot weather, which creates a battery degradation cycle. Even the Tesla’s Model S, with its biggest battery, when driven like a normal car can’t always deliver 200 miles of range, and the [company’s charging stations] are currently 200 miles away from each other. To give a Tesla much extra driving range, the battery weight required would greatly decrease the distance it could travel per kilowatt and also greatly increase its cost.”

Disruptive technology: What will we be doing to make a living in 25 years?

Clean DisruptionAs covered last week, AltCar Expo keynote speaker Tony Seba made some outrageous statements about the future of transportation technology and economics. The Silicon Valley entrepreneur and Stanford University lecturer inspired humorous comments from panel speakers, and interesting conversations for attendees who had just heard him speak – inspiring for those supporting electrified transportation and solar power and ominous for those making their living in automotive, transportation, and other industries.  A question that stuck in my mind: What will Ford Motor Co., Hertz, Mack Trucks, Manheim, and mega-dealers be selling 25 years from now?

The statistics and market analysis presented by Seba were fascinating. They came from his recently published book, Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030. Here are a few points he made……

  • The auto industry played an integral role in the development of “disruptive technology.” One interesting point was seeing photos of a street in New York City in 1900 and then in 1913 – with one car featured in 1900 and the street filled with them 13 years later. Seba thinks we’re full bore into another disruption cycle that will radically alter the products and services offered in automotive and transportation.
  • Lithium batteries are going down 14% in cost per year, and that’s expected to continue for the foreseeable future. Tesla Motor’s “gigafactory,” once it’s up and running, will be able to double the word’s supply of these batteries and will bring their prices down even further.
  • By 2018, automakers will be offering $40,000 battery electric vehicles (EVs) that can get 200 miles per charge. Disruption will continue – by 2020, that price will drop to $31,000 and its range will be comparable to, or better than, internal combustion engine (ICE) powered cars. By 2023, average EV prices will go down to $21,000. He says that by 2030, all mainstream cars will be electric and ICEs will be obsolete.
  • As for autonomous cars, disruptive technology will see a big price drop and become economically viable for the future of transportation. In 2012, a LIDAR (light radar) system cost $70,000 for a test self-driving car. That now costs $10,000 per driverless car. As for what consumers think about it, a recent Cisco Systems survey found that 95% of Brazilians are willing right now to use a self-driving car, and 60% of Americans are willing to do the same.
  • Autonomous vehicles, along with carsharing services like Zipcar and ridesharing services like Uber, will be game changers. Annual sales of new vehicles will shrink, highways will open up, and many of the parking spaces we have in our cities will go away. Highway capacity can be increased four times when autonomous vehicles show up on our roads; there will be no need for 80% of our parking spaces as autonomous vehicles show up exactly when and where they’re needed by the owner. The insurance industry will also take a big hit as the need for car insurance will diminish.
  • As for solar power, installation of solar panels has been increasing 43% per year worldwide since 2000. If this continues, all of the world’s energy will be solar by 2030, he says.
  • When the question of hydrogen fuel cell vehicles came up, Seba made comments that obviously didn’t go over too well with hydrogen advocates. Hydrogen is not a disruptive technology and works much the same way as gasoline in production and pipeline/trucking distribution. EVs are three-to-four times more energy efficient than hydrogen.

Seba may be way too off the mark on several of his conclusions, but he’s right about one thing:  technology and economics are going through a historic shift right now. The role of automakers and transportation companies is changing – which is why we’re seeing automakers startup car sharing services and test out self-driving cars. It’s also a driving force behind nearly every automaker rolling out an EV and other alternative fuel vehicles.

Clean transportation has a very important role to play. It’s providing a channel for advanced vehicle technologies, reducing emissions and fuel consumption, and supporting economic advancement and job creation in a fast-changing world. Maybe you’ll get laid off by an automaker and go to work for a specialty EV maker, or lithium battery maker, or alternative fuel infrastructure supplier, or an advanced engineering and design firm. That sounds much better than taking drive-through orders at McDonalds. As my grandfather used to say, “Always be looking for another job.”

This Week’s Top 10: Tesla facing possible opposition on placing Gigafactory in Nevada, Nissan Leaf breaks its own sales record in August

by Jon LeSage, editor and publisher, Green Auto Market 

Tesla Gigafactory2Here’s my take on the 10 most significant and interesting occurrences during the past week…….

  1. Tesla Motors will soon find out whether it’s deal to set up its Gigafactory in Reno, Nev., will pass through the state legislature – and there could be a wave of opposition. The factory would be impressive – powered by renewable energy and expected to produce up to 500,000 lithium batteries annually, and the Gigafactory will cost $5 billion to build. The challenge is that Nevada Governor Brian Sandoval needs legislative approval for the $1.25 billion package of tax breaks needed to lure Tesla into the state. Speaker of the Assembly Rep. Marilyn Kirkpatrick said she did not know whether or not the deal will pass at a special session next week. Legislators have questions, Kirkpatrick said. The deal will need support of Democrats from the Las Vegas area that are skeptical of the plan, according to a media report. They are leaning toward voting for the plan but have questions needing to be answered. Established business groups might oppose the tax breaks due to how they’ll affect other companies in the state; car dealers may also oppose the Gigafactory as part of their fight to keep Tesla retail locations out of the state. There’s a lot at stake here – “This factory is very important to the future of Tesla — without it we can’t do the mass-market car,” Musk said at a press conference with Nevada Governor Brian Sandoval in Carson City, Nevada. As for other Tesla news……. Tesla CEO Elon Musk says his company may have another “significant” joint project in two or three years with Toyota, and it would be at higher volumes than its recently ended Toyota RAV4 EV alliance…… Musk reiterated his pledge to bring a partially self-driving car to market in three years; it will be developed in-house using sensors and components from suppliers. He thinks all Tesla cars will someday be self-driving……. Tesla is arguing against a complaint filed against it by Georgia dealerships with the Georgia Department of Revenue last week. Dealers say Tesla is breaking the state rules which limit non-dealers to selling fewer than 150 of its electric cars directly to customers each year.
  2. The Nissan Leaf broke its own sales record in August selling 3,186 units and marking its 18th consecutive month of year-over-year sales increases. In the nearly four years that the electric car has been on the market, it’s sold more than 61,000 units. The Chevrolet Volt came it at 2,511 sold, its best performance month since a year ago. A new 2016 Volt will be introduced in January; and nearly 67,700 units have been sold since its launch in December 2010. Sales of the Tesla Model S go unreported, but it was estimated to be about 1,200 units sold in August. BMW saw sales of its BMW i3 leap from less than 400 units in the three previous months up to 1,025 in August, according to industry and analyst reports.
  3. Growth in the heavy-duty natural gas truck market was underemphasized in the Wall Street Journal, according to natural gas vehicle (NGV) leaders. The market for these trucks is growing at an annual rate of about 20%, which is “extraordinary,” says NGVAmerica president Rich Kolodziej. Ron Eickelman, president of Agility Fuel Systems and chair of NGVAmerica, says demand for his firms compressed natural gas fuel systems has been very strong. NGV leaders disagree with the premise of the WSJ article that it takes four years for payback to be seen from the fuel-savings; operators can see that payback in as little as two years, say leaders at NGV organizations. In other NGV news, Ryder System, Inc., announced that it’s partnering with Anheuser-Busch to bring in 66 CNG diesel-tractor trucks to its fleet. GE Capital Fleet Services has made an agreement with VNG to support expansion of the CNG refueling infrastructure for light-duty fleet vehicles.
  4. Leading ridesharing company Uber has been banned from Germany until a hearing this year by a court in Frankfurt. Uber faces fines up to 250,000 euros (about $330,000) and its local employees could be jailed up to six months if the temporary injunction is violated. In April, a Brussels, Belgium-based court imposed a 10,000 euro fine on Uber drivers for every ride they accept in the city. Uber’s fight continues with taxis and governments.
  5. Daimler distanced itself from Uber as it announced acquisitions of two smartphone applications when acquiring Mytaxi and Ridescout. Daimler said these deals will not disrupt the taxi industry, a large client of its Mercedes-Benz cars. Through its Moovel GmbH, Daimler bought the Mytaxi app, which allows customers to hail a cab and other functions using a smartphone. RideScount helps customers find the best way of reaching a destination through both public and private transportation options, along with carsharing services. Daimler has been in the carsharing business through its car2go subsidiary.
  6. A Volkswagen Group executive thinks that hydrogen fuel cell vehicles won’t be doing well beyond Japan’s borders. Government subsidies of as much as three million yen ($28,500) by the Japanese government for hydrogen-powered vehicles will probably be too high for other countries to match; and refueling will be impractical even in Japan as handling hydrogen is challenging and building the infrastructure is costly, says Shigeru Shoji, Volkswagen Group’s Japan president.
  7. A $5,000 rebate on purchasing a propane autogas vehicle or converting an existing vehicle to propane are available to New York residents, including fleet users. New York Propane Gas Association is making the rebate available to one vehicle per fleet, and the incentive is available through the end of this year.
  8. The United States Advanced Battery Consortium LLC awarded $667,452 in an advanced battery technology development contract for next-generation plug-in hybrid electric vehicle applications to Xerion Advanced Battery Corporation of Westminster, Colo. The consortium is a collaborative organization operated by Chrysler, Ford, and General Motors.The competitively bid contract award is co-funded by the US Department of Energy and includes a 50% Xerion cost-share.
  9. Average fuel economy for light-duty vehicles sold in the US in August reached an all-time high, according to a University of Michigan report. Those new vehicles reached 25.8 mpg, up from 25.6 in July and 24.9 a year ago.
  10. Oberon Fuels had its dimethyl ether (DME) biogas fuel approved by the US Environmental Protection Agency (EPA) for use in commercial vehicle applications. Oberon Fuels secured approval under the Renewable Fuel Standard and is now eligible for several renewable identification numbers (RINs) under the cellulosic and advanced categories. EPA says that Oberon’s DME has a 68% reduction in greenhouse gases compared to traditional diesel fuel. Oberon Fuels is working with Volvo Trucks and Mack Trucks to bring DME to Volvo and Mack trucks.