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.

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