For Today: Long-anticipated Mitsubishi Outlander PHEV going to dealers in December, Trump administration and EPA may make big changes to Renewable Fuel Standard

Outlander PHEV coming to America:  The 2018 Mitsubishi Outlander Plug-in Hybrid Electric Vehicle (PHEV) will be coming to the U.S. market starting in December with an MSRP of $34,595. The plug-in hybrid SUV has done extremely well in the European market, with the question of when the vehicle would come to America having been asked quite a few times in recent years. The all-wheel drive SUV is powered by a 2.0-liter gasoline engine and two electric motors, and features the company’s Super All-Wheel Control (S-AWC) system. It also comes with DC fast charging capability. Mitsubishi says the commemorative timing is right as the company celebrates its 100-year history, over 50 years of electromobility, and decades of four-wheel drive technology customized on the international rally circuit.

Vehicle-grid integration summit coming up:  Special thanks to 2GreenEnergy Editor Craig Shields for recommending attending the “EVs and the Grid” conference next month. Taking place Oct. 17-19 in San Francisco, this will be third time the summit will be taking place, bringing together stakeholders in vehicle-grid integration (VGI) and electrification of the U.S. transportation system. Attendees will include regulatory agencies, utilities, automakers, city planners, fleet owners, electric vehicle service providers, and charging station hosts. Timing is right as California’s three largest investor-owned utilities have laid out plans to invest over $1 billion in the state’s charging infrastructure. Stakeholders are still working out the arrangements on charger ownership, rates, available charging times, and other concerns.

EPA reviewing biofuel blend change:  The Environmental Protection Agency and the Trump administration are considering making a significant change to the Renewable Fuel Standards allowing ethanol exports to be added to annual biofuels volume mandates. If the new proposal becomes adopted, oil refiners would be saving hundreds of millions of dollars per year in compliance costs. Current rules only count fuels blended in the U.S. and doesn’t count ethanol that’s exported abroad in the required credits that come from either blending 10% ethanol into gasoline or buying credits from ethanol producers. Carl Icahn, who heads up refiner CVR Energy, has been pushing hard for changing the rules. He recently stepped down from is advisory role to the Trump administration after a wave of heavy criticism. His company, along with other major players like Valero Energy Corp., would be saving quite a bit in RFS credits that would no longer need to be purchased. Trump had backed the RFS and continuation of it in its present form while running for president; now he seems to be leaning toward the oil industry’s desired outcome. Biofuels advocate U.S. Senator Chuck Grassley (R-Iowa) also voiced concerns this week over recent action taken by the EPA that could reduce 2018 and 2019 renewable volume requirements (RVOs) for biomass-based diesel, advanced biofuel, and total renewable fuel under the RFS. Yesterday, the agency had published a notice of data availability (NODA) concerning potential reductions in these RVOs for 2018 and 2019. Grassley said that he is “very disturbed” about the action taken by the EPA, stressing it would be contrary to what the president promised.

Why the Cadillac ELR TV commercial is a very bad idea

Cadillac ELR commercial 2Rex Parker, professor of transportation design, at Istituto Europeo di Design (IED) in Sao Paulo, Brazil, called me last week and expressed distress and frustration with Cadillac’s “Poolside” ELR TV commercial prominently featured in the Winter Olympics (and in the photo to the left). Parker, a former designer with major automakers, had a lot to say about it being misunderstood overseas, fueling more tension and misunderstanding during a time when US TV commercials go global and viral through Youtube and social media. His comments speak to what I see as being the most significant trend shaping the near-term future of the auto industry – globalization. As I’ve covered and commented upon many times in Green Auto Market, automakers and suppliers are now truly multi-national conglomerates serving markets in North America, Europe, Asia, and Latin America. Chinese OEMs and suppliers are the most obvious example, as Fisker Automotive, Volvo, General Motors, BYD, Tesla Motors, and others would tell you. It’s not a good time to be bragging about the US being No. 1 in everything, nor is it accurate; and it rubs against ideals that a lot of people still have about this country – a land of equality in all things regardless of where you live.

The main issue Parker has with the Cadillac ad is that many people around the world won’t get the satirical, humorous angle – and will likely see it as an extreme symbol of stereotypical American arrogance and wealthy lifestyle perks. As you can see here, Parker doesn’t hold back on expressing his opinions on auto industry trends. Here are a few points he made on the phone last week……

  • Americans traveling abroad will usually tell you this type of TV commercial is a very bad idea. Parker was in France when this commercial hit the airwaves, and it inflamed French viewers. This type of message hurts Americans traveling abroad.
  • Parker, who is half Brazilian and half American, was in Brazil last summer when a street riot in his US hometown of Huntington Beach, Calif., got a lot of media attention (which I can attest to, being stuck on Pacific Coast Highway while attempting to drive through Huntington Beach during this unexpected debacle). Brazilians were informed about it while it was going on – which is ironic given that it was a modest riot without casualties. But the internet gave them instantaneous information – and what happens in the US is taken very seriously in Brazil and around the world.
  • The Cadillac commercial conveys “American arrogance and sets us back generations,” Parker said. The days of 1950’s US Secretary of State John Foster Dulles explaining US foreign policy are long gone, he said.
  • I would also add, having been raised by a World War II vet with plenty of lively tales that I heard while growing up, that the days of post-WWII gratitude to the US are long gone. US traditions for individual rights, personal freedom and expression, holding elections, having open markets for developing industries, technology breakthroughs, and enjoying multi-media entertainment, will continue to influence what people around the world perceive and value; but toying with images and messages of what others resent, and sometimes hate, about the US, is not a good way to sell cars or improve international relations.
  • You can certainly make the case that the US government is dominated by an autocracy of interest groups who’ve stuffed pockets with lots of campaign contributions; and that the US has serious social issues to deal with – such as the brutal impact crystal methamphetamine is having in a lot of communities. You can also talk to people who’ve lived in or visited other countries around the world that are quite unstable and struggling – they’ll explain why they live in the US and probably won’t be leaving. Those are better images to convey in a TV commercial, as you can typically see watching TV lately. If you were watching the Winter Olympics, you probably saw Chevrolet’s new campaign called “The New Us.” It shows a diverse range of families under the theme, “What it means to be a family hasn’t changed; what a family looks like, has. This is the new us.”
  • Sell the car:  The best performing and most memorable car commercials show off the car – it might be driving up a hillside at peak performance, or featuring a young couple or family traveling together and feeling good. General Motors’ Cadillac division has done a great job for about 20 years now in selling the product in its ad campaigns; the ELR has what people are impressed about with GM’s Voltec drivetrain, and with what Cadillac designers have placed into platforms and dashboard panels. The Cadillac ELR “Poolside” commercial only shows the car being charged and its dashboard control panel for a few seconds. The commercial’s agenda looks like something else besides marketing the product.

Cadillac ELR and BMW i8 Olympics TV commercials – How good were they?

Cadillace ELR being chargedWhile Super Bowl commercials are infamous for being the most expensive and most watched TV spots in the world, there might be a better media outlet for marketing new cars: the Olympics. While many of the commercials featured Olympic athletes skiing and skating by, there were two that gave a lot of time to luxury extended range electric vehicles: the 2014 Cadillac ELR and the 2015 BMW i8. And they were shown a lot more times than the single viewing you get on the Super Bowl (although the Olympics only happen every four years, or two years if you count the staggered schedule with summer and winter games). As for these Olympic TV commercials, my question would be:  How good were they for marketing the cars?

The Cadillac ELR commercial plays off the competitive edge the US takes to the Olympics, and the upscale lifestyle lived by those driving the ELR – which is in direct competition with Tesla Model S and BMW i Series. “You work hard, create your own luck, and you’ve got to believe anything is possible,” well-recognized TV and movie actor Neal McDonough says as he unplugs his Cadillac ELR and takes off for the office. Americans don’t take the month of August off, like Europeans do, for vacation. “Because we’re crazy, driven, hard-working believers, that’s why.” Those other countries might think Americans are nuts, but we’ve had the Wright Brothers, Bill Gates, Les Paul, and Muhammad Ali – and we landed on the moon first, he says.

While it’s watchable and humorous, it spends very little time onscreen with the plug-in coupe, which is a very lush and impressive car to experience visually and hands on; one would think the car should make up most of the commercial’s focus and not just a few seconds at the end. Yet the commercial is more about style and social commentary than marketing the Cadillac ELR. The production schedule for the ELR is limited and there were only 41 units sold in the US in January; but that’s more than the BMW i Series sold in the US – it’s still very early for the BMW i3 and i8.

I think the BMW commercial gets a little bit closer to hitting the mark. The “Hello Future” ad features a voice over from Arthur C. Clarke’s 1964 BBC presentation. The famous science fiction novelist (with 2001: A Space Odyssey among his books) says, “The only thing we can be sure of about the future is that it will be absolutely fantastic. So, if what I say now seems to you to be very reasonable, then I will have failed completely. Only if what I tell you appears absolutely unbelievable have we any chance of visualizing the future as it really will happen.”

Near the end of the commercial, the BMW i8 appears in the dark and then takes shape, with its raising “butterfly doors” (reminiscent of the upcoming Tesla Model X and its raising “falcon doors”). This car will sell for $136,000 and is supposed to have the same performance as a BMW 335i. So, the audience will be very limited, too. Leasing will be necessary – the price will come down but it’s still very steep. The Cadillac ELR starts at about $75,000 and is more competitive with the Tesla Model S, but it’s also limited in its audience size.

For automakers to turn profits on EVs, it has to be worth the investment and reach a level of scale that makes it competitive with some of their ICE models. These niched luxury extended range cars aren’t going in that direction; they do raise consumer interest in the new alternative powertrain, but they’re too pricy to assist in widespread adoption of EVs. They get federal tax and state incentives, but the price is still very high – even with good lease packages. There’s some public opinion out there that EVs are just a toy for a very small percentage of wealthy Americans, which can get in the way of mainstream acceptance.