For Today: Tesla takes quarterly hit from costly Model 3 production, ExxonMobil settles with EPA on plant pollution

Model 3 cost hits Tesla quarterly earnings:  Tesla reported its largest loss ever during its third quarter earnings report yesterday – $671 million compared to a $336 million loss in the previous quarter and a $21 million profit in Q3 2016. That’s coming from the huge investment needed for ramping up production of the Model 3 at its Fremont, Calif., assembly plant and its Nevada-based Gigafactory. The company also reported a record $3 billion in quarterly revenue and delivery of about 26,000 vehicles. Speeding up Model 3 production has hit a bottleneck, much of it at the battery factory in Nevada. The goal of building 5,000 of the more affordable electric cars at 5,000 units per week has been moved from the end of 2017 to early 2018. “While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear,” Tesla said.

Trucking industry happy with court ruling:  A federal court of appeals in District of Columbia has ruled in favor of trucking companies on changes made last year to setting emissions standards on their trailers. The court ruled that the trucking industry has met its federal fuel efficiency and emissions obligations and that rule will stay in place. Last year, under President Obama, the Environmental Protection Agency had ruled that the long-haul trailers were affecting the federal standards and tougher rules would be in place by the end of this year. The Truck Trailer Manufacturers Association had filed a petition asking the court to stop the trailer portion of the rule, saying that they don’t produce emissions at all; Obama’s EPA had said that trailers put a drag on truck engines and effect performance. The overall standards will remain in effect, although the court will hear arguments as to its legality next year.

Oil giant paying for air pollution improvements:  ExxonMobil has agreed to pay a fine of $2.5 million and spend about $300 million on air pollution improvements in a settlement with the federal government and the Louisiana Department of Environmental Quality. The company will install and operate air pollution and monitoring technology for pollution reductions coming from eight of its petrochemical manufacturing facilities in Texas and Louisiana. The Dept. of Justice and Environmental Protection Agency had been enforcing violations of the Clean Air Act, coming from the oil company failing to accurately monitor industrial flares at the facilities, causing excess emissions. Some environmentalists say the settlement is not nearly enough to address violations by the oil company going back a decade. EPA administrator Scott Pruitt said its shows the EPA’s commitment to enforcing the law and working with states to address compliance with environmental regulations. It may not address other claims, such as those filed in June by New York’s attorney general accusing former ExxonMobil chief and current Secretary of State Rex Tillerson of misleading investors on the costs of climate change while Tillerson led the oil giant.

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.

For Today: Tesla Model 3 production not looking good, BYD sees growing demand for electric buses and trucks

Tesla Model 3 production:  Tesla’s aggressive strategy of growing from 100,000 vehicles manufactured this year to about 500,000 next year – mostly through the Model 3 – isn’t looking very good right now. Its stock prices have slipped 4.5% since the company said this month that only 260 Model 3s were produced in the third quarter and that the 1,500-unit forecast had been far from being met. It goal to ramp up to producing 5,000 of these electric cars per week by December doesn’t look to be realistic. A separate media report confirms the slowdown, with Taiwanese auto component supplier Hota Industrial Manufacturing Co. having its parts orders slashed 40% for the Model 3 in December – from the planned 5,000 per week to 3,000 per week. The target of sending weekly shipments of 10,000 parts in March will be stretched out to May or June, according to the report. A Tesla spokesman declined to comment, and a CEO Elon Musk on Thursday tweeted once again that the company is going through “production hell.”

Urban mobility:  Navigant Research just released a report defining how sustainable mobility plans being adopted in fast-growing cities around the world are being shaped by three factors: automated vehicles, cleaner powertrains, and the mobility as a service (MaaS) model. These will eventually tie the outcome to where cities policies are hoping it will go. The study includes a potential scenario where a high level of adoption of automated vehicles where a city with 3 million inhabitants collectively own 1.5 million cars. Other studies have forecasted that growing usage of autonomous vehicles, biking and walking, and shared mobility services, will mean less vehicle ownership and miles driven.

BYD ready for growth:  BYD’s commercial vehicle arm in the U.S. is seeing growth in demand for electric buses, but also for moving goods. Andy Swanton, vice president of truck sales at BYD, told Trucks.com that the question has changed over to “when, but not if” on converting truck fleets over to electric vehicles. That’s behind the expansion of its Lancaster, Calif., factory where an additional 700 workers could be added to the facility. That will support building up to 1,500 all-electric buses each year and to serve growing demand for electric trucking. Swanton said that the company’s global manufacturing capabilities and environmental policies in California and other markets are behind much of that growth.

 

For Today: Tesla Model 3 slowdown may come from steel, EVS30 successful in Stuttgart

Why Model 3 slowed down:  What’s been slowing down an expected higher Tesla Model 3 production volume? Auto analysts say that Tesla is struggling with welding together a mostly steel vehicle with the Model 3, which has differed quite a bit from the mainly aluminum bodies of the Model S and Model X. That showed up with the electric carmaker falling short on its third quarter production target for the Model 3. The Wall Street Journal had reported on the slowdown and more light was shed on it during a video about the Model 3 production line posted on Twitter by CEO Elon Musk. Tesla is in a tight spot, pinning much of its future on the Model 3 production line ramped up to big numbers starting at the end of this year. Automakers such as General Motors with the Chevy Bolt, and several other automakers with their long-range EVs, have been anxiously waiting to see the impact of the Model 3 on the market.

RNG at ports:  You can watch a new video from the California Natural Gas Vehicle Coalition (CNGVC) to learn more about how renewable natural gas is being tried out in near-zero emission trucks at the Ports of Los Angeles and Long Beach. “Powering with the Cummins-Westport ISX12N Natural Gas Engine” shows how a new 12-liter natural gas engine vehicle from Cummins-Westport is being tried out by the ports. A Class 8 heavy-duty truck carries loads from the ports to drop-off points in Southern California. “For us, having an engine that can haul the loads in these conditions, while offering us the emissions benefits of a near zero natural gas engine, is essential to the future success of our business,” said Victor LaRosa Jr., operations manager of port drayage trucking company Heavy Loads Transfer.

Startups competing with Tesla:  You can get a good idea of the challenges of competing with Tesla as small startup company getting into the high-performance electric vehicle race. Automotive News takes a look at how Faraday Future, Lucid Motors, Bollinger Motors, Local Motors, and Elio Motors (not to mention, Karma Automotive and Fisker Inc.) are taking on a very big challenge with Tesla; along with entering the auto manufacturing business in the first place. Starting from scratch will cost hundreds of millions of dollars without any revenue, and recruitment of talented professionals to design and build the electric cars while passing strict government safety tests.

EVS30 successful in Stuttgart:  Electric Vehicle Symposium (EVS30) had been going strong in Stuttgart, Germany, with more than 1,700 participants attending panel discussions from Oct. 9-11. Overall, about 9,500 people have been in attendance as participants and trade fair visitors. Panelists and those visiting exhibits have been discussing the future of mobility at the 30th EVS. The mood was positive, and discussions focused on the next phase of the EV industry’s future coming together this year. “Technological prerequisites have been created and some electrification products are already available, as demonstrated by the 353 exhibitors…….” according to conference planners.

For Today: Mahindra investing $600M in EVs, Tesla fires hundreds of workers

Mahindra investing more in EVs:  India’s electric vehicle market is seeing more support coming from Mahindra & Mahindra, which just announced a $600 million investment in the technology. Electric versions of its current crossover SUVs will be scheduled in the near future. Mahindra had just lost a bid for a 10,000 EV contract with the government’s Energy Efficiency Services Limited agency to its main Indian competitor, Tata Motors. Mahindra was awarded part of the contract after lowering prices to match Tata’s lowest bid; the company admitted it won’t make any profits off the sales of its eVerito electric sedan to the Indian agency. Tata was able to win the majority of the contract even though it has yet to manufacture any EVs. Mahindra has been in the segment for a few years with its e20 and e20 plus small electric hatchback models, the eVerito electric sedan, the eSupro electric van, and the e-Alfa Mini three-wheeler. The government wants to stop sales of fossil-fuel powered vehicles and is supporting electric vehicle development. The company’s subsidiary, Mahindra Electric, will operate as a separate entity supplying components to the Mahindra & Mahindra company, which will manufacture the EVs. The company currently operates a battery manufacturing plant and hopes to set up another larger facility soon.

Paris saying goodbye to fossil-fuel cars:  The city of Paris wants to speed up the elimination of gasoline- and diesel-powered cars by ending their sales starting in 2030. France had already set a target date of 2040 for banning sales of cars running on fossil fuels. The nation’s capital, which will host the summer Olympics in 2024 and not long ago hosted a worldwide agreement on climate change, had already been moving toward banning diesel cars by the time of the Olympics. City officials said it will probably not be a formal ban, but will be introducing a deadline to phase out internal-combustion engine vehicles. “This is about planning for the long term with a strategy that will reduce greenhouse gases,” said Christophe Najdovski, an official responsible for transport policy at the office of Mayor Anne Hidalgo. “Transport is one of the main greenhouse gas producers…. so we are planning an exit from combustion engine vehicles, or fossil-energy vehicles, by 2030.”

Tesla employees terminated at crucial time:  Tesla has fired hundreds of employees, according to a recent report in the San Jose Mercury News, as pressure mounts to build more of the Model 3 sedans. Workers estimated between 400 and 700 employees have been fired, including engineers, managers, and factory workers. Tesla wouldn’t say how many employees were let go, although the company expects employee turnover to be similar to last year’s attrition. They were not layoffs, the company said, but were dismissals based on a company-wide annual review. In interviews with the newspaper, former and current employees said there was little or no warning was given prior to the dismissals. “As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” a Tesla spokesman said. “Tesla is continuing to grow and hire new employees around the world.”

For Today: Tesla Model 3 orders cancelled, Watching US-China relations

Model 3 orders:   Total orders for the Tesla Model 3 are now at 455,000 with about 63,000 cancellations having been made over the past year. CEO Elon Musk said that
cancellations came from people burning out over having to wait an hour and a half to complete the order process online. During a quarterly earnings call yesterday, the company announced that it had burned through about $1.16 billion in cash during Q2 to keep the Model 3 factory on schedule along with Gigafactory battery production. Stocks closed yesterday with a 7.4% jump to $350.13 as investors remained enthusiastic.

Used green car sales:  CarMax reports that the Toyota Prius last year was the most popular used hybrid/EV sold at its nationwide chain of stores. That was followed by the Ford
C-Max, Ford Fusion, Lexus CT, and Kia Optima. Ford will be taking the C-Max hybrid and plug-in hybrid out of production but it has been doing better lately in new vehicle sales; the Fusion has done well, too, being very competitive with the Prius in the hybrid space. The Prius has seen a lot of fluctuation his year in hybrid hatchback sales. The Prius Prime has been doing very well, competing with the Chevy Volt and Bolt, and the Tesla Model S and X in U.S. new vehicle sales.

Tension between U.S. and China:  U.S. relations with China continue to be tense under the Trump administration, with three leading Democratic senators urging the president to stand up to China. Trump’s issues have focused on protecting intellectual property and honoring trade practices between the nations. Senate Democratic leader Chuck Schumer was one of the three. Trump has been pressing China to cut steel production to cut oversupply and to rein in North Korea’s missile testing program. The Obama administration, while also concerned over high tariffs and equitable trade, had established strong relations with the country on vehicle electrification and renewable energy goals. Now it’s up to California and Gov. Jerry Brown to keep those goals going – electric cars, buses, and trucks. China is likely to adopt some version of California’s zero emission vehicle policy by the end of the year. But relations between the two nations could be a stumbling block.

For Today: Lux study on Trump’s impact on energy, Volkswagen claims it can beat Tesla Model 3 price by $8K

Lux study on impact of Trump administration:  No matter what the Trump administration’s agenda becomes on energy and environmental issues, the market is filling some of that void, according to a Lux Research analysis paper. Lux examined Trump’s America First Energy Plan and found that renewables and energy storage are well positioned to continue seeing strong growth. State-level policies have been drivers and will continue. Renewable fuels are most vulnerable to Trump’s agenda. “With uncertainty looming and the administration continuing to consider oil-and gas-friendly policies, Trump’s decision to remove the renewable fuel obligation could alter a decade-old ethanol industry,” the report said.

Despite the administration’s political agenda, the president’s actual influence will have an overall moderate impact in the U.S. energy landscape, the paper said. That seems to be the case with plug-in electrified vehicles sales in the U.S. and two other key global markets – demand is up even if federal government support may go away and the Trump administration has backed away from supporting the Paris climate accord. According to yesterday’s Green Auto Market Extended Edition, U.S., plug-in hybrid sales were up about 44% for the first half of 2017 versus that time period in 2016. Battery electric vehicle sales were up 29.2% for that period. Europe is up 27% in plug-in vehicle sales for this year (through May), with plug-in vehicle share at 1.4% of new vehicle sales during that period. In China, “new energy vehicle” sales, aka plug-in vehicle sales, reached about 195,000 sold in the first half of the year, up 14.4% year-over-year. June saw a real rebound in the China market, which had been down earlier in the year. June sales hit about 59,000 units sold, up 33.0% year-over-year. PEV sales made up about 2.7% of new vehicle sales in China during June.

Musk on AI and state sales bans:  Tesla CEO Elon Musk warned a meeting of U.S. governors on Saturday that government regulation of artificial intelligence is needed because it’s a “fundamental risk to the existence of human civilization.” Musk has taken a cautious approach to the AI question in recent years, using his experience with SpaceX missions and developing automated Tesla vehicles as reference. He addressed questions on space travel, self-driving cars, and solar power, at the summer conference of the National Governors Association in Rhode Island. He also brought up the controversial topic of states getting rid of laws blocking Tesla from selling its cars at corporate stores instead of through a franchised dealer network.

VW versus Tesla:  Volkswagen is tapping into its mass production, economies of scale advantage to sell its ID concept vehicles at a much cheaper price than the upcoming Tesla Model 3. VW’s Chief of Corporate Strategy Thomas Sedran said in an interview with German site Automobil Produktion that the starting price for an ID will be down to $27,000 before incentives – $8,000 cheaper than the $35,000 Model 3. That will still take a while as the German automaker’s ID portfolio is still in the early development phase; it will take a few years for the first one to show up at dealerships.

For Today: Tesla Model 3 ahead of schedule, Teaser video on BMW i8 Roadster

Model 3 schedule announced:  Production of the Tesla Model 3 has cleared regulatory approval and is two weeks ahead of schedule, according to a tweet last night by CEO Elon Musk. The first production model is expected to go off the line this Friday. The first 30 will be delivered to customers on July 28th at a handover party. Musk said the company expects the first 100 cars will be finished in August, and then the ramp up will start with 1,500 or more September. It’s looking like 20,000 per month can be built beginning December, he tweeted. The Model 3 is on track to break the company’s pattern of delaying production and delivery of the Model S and especially the Model X.

Safe and sane:  Green Auto Market will take the day off tomorrow for Independence Day. Have fun and expect to get stuck in traffic.

BMW video on i8 Roadster:  BMW just released a teaser video of the BMW i8 Roadster, which is scheduled to come out next year. The convertible is shown in the video with its removable hardtop in place, covered in camouflage, and being blown over in a wind tunnel. That suggests the i8 Roadster is moving forward in factory and road testing so that it can go to production level. It will be the third member of the i-Series vehicles, and BMW is expected announce the fourth member sometime this year. In May of last year, BMW’s chief Harald Kruger confirmed during a press conference in Munich that the i8 Roadster has been approved for production.

For Today: Musk tweets teaser on Model 3 launch, Europe’s largest utility sees plug-in vehicle sales coming faster than expected

Model 3 release date teaser:  The launch date of the Tesla Model 3 will be revealed on Sunday, according to a Twitter post by CEO Elon Musk. However, the announcement could be other news such as when the production will start next month, or when a production model will be shown during that month. Douglas Bailey spoke for those anxious to learn more in his tweet last night: “please have mercy. I don’t care if you say July 31st – but the speculation on Model 3 final release date has to stop.” Musk responded: “News on Sunday.” Musk said recently that Tesla is “definitely” on track to begin Model 3 production in July. Customers will be able to customize their orders for color and wheel size, Musk told shareholders earlier this month.

European plug-in sales:  The European plug-in vehicle market was up 48% in registrations during May, year-over-year, with 20,568 vehicles sold. It was up 21% over April, according to the European Alternative Fuels Observatory. Plug-in hybrids took the lead with 11,494 units sold, with all-electric vehicles at 9,074 units sold. The Renault Zoe finished in first place with about 10% of the share and 2,065 units sold during the month. The Mitsubishi Outlander retained second place, followed by the Nissan Leaf, BMW i3, and the Volkswagen Passat GTE.

Largest utility backing chargers:  The CEO of Europe’s largest utility sees the pace of plug-in vehicle adoption becoming faster than the global auto and energy industries expect. Italian utility Enel SpA chief Francesco Starace said in an interview in Rome that his company will be investing nearly 300 million euros ($341 million) to install about 12,000 recharging spots across Italy. These vehicles will need a larger charging infrastructure. Starace said that electric cars could help stabilize the grid. It will also provide a small revenue stream to users when they’re recharging through a new ‘vehicle to grid’ technology in Italy. Electric cars become large mobile batteries able to interact with the power grid, supporting renewable energy and helping to balance out power flow.