For Today: Panasonic says Tesla Model 3 production bottleneck being worked out, Europe seeing strong plug-in vehicle sales

Working out production bottleneck for Model 3:  Tesla’s battery partner said that production problems are being worked out at the Gigafactory in Nevada, which will get the Tesla Model 3 up to speed in the near future. Panasonic CEO Kazuhiro Tsuga said yesterday that delays to the automation of the battery pack production line meant some of it had to be completed manually. It will soon be automated, meaning the number of vehicles to be produced will rise sharply, he said. Tsugu declined to comment on how his company sees the production schedule will be carried out compared to the original projection. Automotive demand from Tesla and other auto industry customers helped the Japanese electronics company’s operating profit rise 6% during the July-September period. Panasonic supplies battery cells for Gigafactory production of Tesla’s battery packs. Earlier this month, Tesla had said that manufacturing bottlenecks had caused the slowdown for the Model 3 – down to 260 produced versus the original goal of 1,500 during the past quarter.

Mazda will offer rotary engine plug-in hybrid:  Mazda will be bringing out a plug-in hybrid powered by battery and a rotary engine in 2019. During the Tokyo Motor Show, the company confirmed that it will be launching an all-electric and extended range electric vehicle that year. Australian online publication Motoring reported that Mazda will be announcing a series of plug-in hybrids based on existing models around 2020. After that, then a battery electric vehicle will come out. It will be co-developed with Toyota and Denso in 2021 as part of its recently launched EV joint venture.

Plug-in sales doing well in Europe:  September was the second best month ever for plug-in electrified vehicle sales in Europe. At about 33,700 all-electric and plug-in hybrid vehicles sold, growth was up 32% year-over-year by the end of September. December 2015 had been its top selling month, with just over 33,800 units sold. Sales are expected to be strong in the fourth quarter, with historic data showing sales always improving over the last three months of the year in the region. Plug-in vehicles increased to 2.2% of overall new vehicle sales in Europe during September. Tesla saw its best month ever in Europe with the Model S coming in at #1 with an estimated 2,527 units sold. The next four on the list for top five selling PEVs in Europe during September were the Renault Zoe at 2,306 units sold, the Tesla Model X at 2,137, the Mitsubishi Outlander PHEV at 2,080, and the Volkswagen e-Golf at 2,041 units sold.

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.

This Week’s Top 10: The mystery of Tesla’s Gigafactory may be unfolding, Wanxiang Group announces a second Fisker model

Tesla Gigafactoryby 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. More details revealed on Gigafactory – Was it Col. Mustard with a dagger in the billiard room? The mystery of the Tesla “Gigafactory” is beginning to be solved. Panasonic Corp. has reached a basic agreement with Tesla Motors to supply machinery to make lithium battery cells; and an investment of about 20 billion yen to 30 billion yen ($196.4 million to $294.7 million) initially, according to the Nikkei newspaper. Details are being worked out, with an official announcement expected by the end of this month. In May, Panasonic said it wanted to be the sole battery partner in this factory. Analysts expect the factory to need about $5 billion to get up to speed, and that Panasonic may put in $1 billion of it. And while Tesla has officially looked at three sites in the US to build the plants, the decision might have already happened. Greentech Media reported that the world’s largest lithium-ion battery factory will be built near Reno, Nev. One unnamed source took pictures of about 50 earthmovers clearing a site estimated to be large enough to house the proposed 10 million-square-foot Gigafactory. This source has also heard whispers about the secret project from construction industry folks and locals. There are still permitting and licensing issues to be worked out, and Tesla says it’s potentially the site of a pizza factory…… We shall see……….
  2. Fisker’s new owner announced second modelFisker Automotive may launch its second model in 2017, though no details have yet been released. Lu Guanqiu, the billionaire chairman and founder of Fisker’s owner, Wanxiang Group, Inc., thinks that this can happen in the next three years with the Karma luxury sports car returning to market well before then. The Karma will be built once again in Finland, and Wanxiang hopes to bring production to the US.
  3. Los Angeles will be added to Nissan’s “No Charge to Charge” promotional campaign on Aug. 15 for its Leaf electric vehicle charging program. Leaf drivers get an EZ-Charge card for public charging stations for two years. The program was launched in Dallas-Ft. Worth and Houston in Sept. 2013; since then, it’s been expanded to San Francisco, San Diego, Seattle, Nashville, Phoenix, Washington, Portland, Ore.; and Sacramento, Calif. Nissan plans to add 14 more markets in the next year.
  4. National Highway Traffic Safety Administration (NHTSA) is late on creating rules governing electric vehicles (EVs) making noises to warn pedestrians as EVs pass by, and automakers say they’ll need more time to adopt the rules to vehicles. That rule was supposed to be released in January, so automakers are urging a delay in the schedule that requires them to start phasing it until 2016. The Alliance of Automobile Manufacturers and Association of Global Automakers jointly issued a letter asking NHTSA to postpone full compliance until Sept. 1, 2018.
  5. General Motors Opel subsidiary won’t be offering the Ampera (the European version of the Chevy Volt) after the Volt is redesigned for the US market for the 2016 model year. Opel will launch its own successor, an electric vehicle, sometime between 2014 and 2018.
  6. Samsung isn’t just rolling out new Android smartphones – the South Korean technology supplier has expanded its partnership with BMW to produce lithium-ion battery cells for the BMW i3, BMW i8, and additional hybrid models that will come out later. That partnership started in 2009 and now Samsung has agreed to enhance developments of its battery cells.
  7. Natural gas vehicle supporters were unable to gain necessary support for a diesel gallon equivalent that would govern the sale and pricing of natural gas for heavy duty vehicles. NGVAmerica says that they were unable to get the votes necessary to move it forward at the National Conference on Weights and Measures in Detroit. The gasoline gallon equivalent was adopted in 1994, but the industry needs the diesel equivalent standard for realistic comparisons.
  8. Renewable energy saw more gains in the first half of 2014. The Federal Energy Regulatory Commission’s Office of Energy Projects reported that wind, solar, biomass, geothermal, and hydropower made up 55.7% of newly installed electricity generating capacity in the first half of this year. Natural gas provided most of the balance of new generating capacity.
  9. Stop-start technology yields a 5% to 7% improvement in fuel economy and C02 reduction, according to a AAA study. The AAA tested three vehicles equipped with automatic stop-start systems using the US Environmental Protection Agency’s “urban” driving cycle.
  10. Nissan has been able to save $938,000 per year at its Smyrna, Tenn., plant using the US Department of Energy’s (DOE’s) Superior Energy Performance program. Savings at the plant that assembles the Leaf and other Nissan vehicles comes through using the ISO 50001 energy management standard. Nissan made changes at its plant such as rescheduling work shifts, reducing motor spends in industrial hardware, and improving startup and shutdown procedures. The $331,000 investment was paid back in four months and led to annual savings; it was much less capital intensive than buying new hardware or doing expensive retrofits, according to the DOE.