December 2014 - Page 2 of 2 -

Keeping hybrid and electric vehicle sales figures in perspective

We’ve seen sales numbers decline on hybrid and electric vehicles (EVs) in the past few months. When you look at the broad spectrum of market reports and analysis of that data, it’s a good reminder to keep things in perspective. That being said, here’s the latest…………

Automakers do believe that sales of hybrids and EVs will go up eventually; even though recent sales figures have declined, their production schedules are still staying on track – and that includes expecting demand for hydrogen fuel cell vehicles. BMW now plans to sell a plug-in hybrid version of every major model in its vehicle lineup. Daimler will be investing 100 million euros to increase production of batteries for its EVs; Tesla is clearly optimistic with its grand vision of building the $5 billion “gigafactory.” Toyota is preparing to sell its first fuel-cell vehicle in Japan, which it recently named the Mirai. One of the reasons for the trend is that automakers do believe gasoline prices will eventually climb up. “We think the trend is clear,” said Ford CEO Mark Fields. “Over time, we believe gas prices around the world will continue moving higher.”
Hybrid sales were down nearly14% from last year in November, but EV sales were up slightly over last year and last month. Hybrids did see a 0.7% increase over October 2014. Hybrids are down nearly 5,000 units year-to-date from last year as of the end of November. Plug-in electric vehicles have a different story, according to Electric Drive Transportation Association: “With 9,785 plug in vehicles (3,609 plug-in hybrids and 6,176 battery EVs) sold last month, the total number of plug-ins that have been sold in 2014 rose to 107,487. This year-to-date cumulative number represents a 24 percent increase over the 86,912 plug-in vehicles that had been sold thru the same period last year,” the association reported.
Retail vehicle sales guru Art Spinella and his CNW Research firm just reported its consumer survey study indicating upper-middle class Americans are not crazy about buying EVs. “High Yield” new-car customers, upper-middle income Americans in their middle to late forties pre-disposed to buying a vehicle regularly, are not interested in buying an EV. That would be the case if the EV had identical prices as comparably-sized gasoline or diesel cars. That demographic group doesn’t represent the lion’s share of new vehicle sales in the US, but the study does point to a telling trend: you can’t depend on upper income early adopters to make a new technology successful. As suggested last week in Green Auto Market, long-term success in green vehicle sales will need to come from cost-sensitive fleets and consumers. They’ll be bringing in the larger sales numbers long term as these vehicles become more mainstream and accepted – and affordable. Marketing messages need to deliver more than concern over climate change or “keeping up with the Joneses” on cool new technologies.
The Nissan Leaf saw 2,687 units sold last month; what was its 22nd straight month of sales increases year-over-year. Overall, battery electric vehicles are continuing to see stronger sales than the plug-in hybrids in the US. There are likely a few influential factors behind it: car shoppers are impressed and confident in the Nissan Leaf, Tesla Model S, and BMW i3; their lease programs are attractive and make the deals more affordable; there are more charging stations installed in major metros across the US, relieving range anxiety; and battery range is increasing with each new model year.
Keep your eyes on the big picture. When you look at studies that are being released, such as the new EV City Casebook, you’ll see signs that perspectives are changing on EV ownership in global markets (including the US) that should increase EV adoption. Fleets are definitely influencing this trend, with a good example coming from California-based consulting firm Vision Fleet and its fleet partners. In late October, Indianapolis Mayor Greg Ballard was enthusiastic to announce the city’s “Freedom Fleet,” which will bring in 425 plug-in sedans. That project with Vision Fleet is expected to save the city 2.2 million gallons of gasoline over the next decade. The greenhouse gas reduction will be impressive, too.

Ethanol sales may not be hurt by EPA decision on Renewable Fuel Standard

Are you producing and selling an alternative fuel that’s getting tangled up in regulatory limitations? No worries – just sell it overseas. While ethanol and other biofuels producers have been frustrated with delays in the Renewable Fuel Standard decision by the US Environmental Protection Agency (EPA), exports of corn ethanol have increased 31% this year and have reached their highest level since 2011.

Ethanol used in gasoline will probably never hit the 15% ethanol E15 target that the EPA had been considering; and the 10% ethanol mark may be reduced by pressure being placed on the EPA by oil refineries and producers. Exporting petroleum products with the additive ethanol blend has been a big growth sector for petroleum products and ethanol in the past few years. The US passed Russia in 2010 to become the dominant exporter of petroleum products, and ethanol sales have increased with that growing overseas demand.

Archer-Daniels-Midland Co., Green Plains Renewable Energy Inc., and Valero Energy Corp., three of the four largest U.S. ethanol companies, say that ethanol exports have been a significant part of their revenue growth. “If we can’t sell it here, we’ll sell it someplace,” said Bob Dinneen, president and CEO of biofuels industry group Renewable Fuels Association (RFA). “We’re going to focus overseas.”

Exporting fuel has been a bit more difficult for liquefied natural gas (LNG). So far, the US Dept. of Energy (DOE) has approved each export application, but the approval process has been complicated. Some analysts worry that strong demand for US-drilled natural gas may drive up the price for LNG and compressed natural gas, but so far it remains stable for users of natural gas vehicles.

The shale-oil boom in the US has created a stream of oil and gas products being sold overseas; ethanol is seeing a record level of crops being grown for these exports. The US is now producing about 66 million metric tons more corn than 10 years ago; that’s nearly as much as the rest of the world will export this year. Overseas demand is keeping ethanol sales strong even though the EPA has been easing off the ethanol mandate for the past year.

Ethanol trade lobbyists have traveled to Peru, Panama, Japan, and South Korea and trips are planned to Thailand, Malaysia and the Philippines this month to gain support for more overseas ethanol sales, according to RFA. A Commerce Department-sponsored trade mission to northern Brazil last year won sales contracts valued at $29 million, the RFA says. If the EPA mandates a lower volume of ethanol sales in US fuel, it probably won’t matter much for the ethanol industry.

This Week’s Top 10: BMW and Tesla deal didn’t actually take place, Wisconsin wants to tax EV and hybrid owners more

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…….

Well it looks like many of us fell for it on the BMW-Tesla deal. Last week, Tesla CEO Elon Musk told German media giant Der Spiegel that the two automakers were continuing talks that could set aside competition for the luxury electric car space and focus more on mutual gains. That could have meant combining “lightweighting” from BMW and advanced batteries from Tesla Motors and jointly creating better charging stations. Now, BMW told German business magazine Wirtschafts Woche that it doesn’t have plans for cooperation with Tesla and won’t be doing what other major OEMs have done in buying Tesla’s stock shares. That comes from an unnamed source at BMW. It could also have something to do with BMW digging plug-in hybrids over the battery-electric-only mindset of Tesla. BMW just launched a three-prong approach to bringing these extended-range plug-ins to China. One is a long-wheelbase 5-Series sedan, another is a prototype 3-Series sport sedan, and another project is the new Power eDrive system than can produce 670 horsepower. Tesla will be able to get over it; things are going well enough for the electric carmaker to ramp up its Fremont, Calif., production plant ahead of an expected production increase. Global demand is moving things along and will allow for building its all-wheel drive Dual Motor Model S and the start of its Model X crossover production, the company said.
State governments are looking more at electric vehicle (EV) and hybrid owners as a funding source. Wisconsin has joined five other states to impose a fee on fuel-efficient vehicles; EV and hybrid owners will get a $50 annual charge. The new fee has been designed “to ensure these owners continue to pay their fair share of the operating costs of our infrastructure,” said Wisconsin DOT Secretary Mark Gottlieb. Washington Governor Jay Inslee sees it another way; Inslee wants to extended a state tax break for EVs and look into giving them access to carpool lanes. Cutting carbon pollution and reducing dependence on fossil fuels gets support in the state, but others question whether EV owners should get preferences. Inslee would agree with many leaders mentioned in another Green Auto Market article – this is part of his larger effort to tackle climate change. One representative who heads the House Finance Committee has concerns about extending that tax break, which expires on July 1.
EPA’s Christopher Grundler makes Automotive News’ annual all-star list. Grundler, director, Office of Transportation and Air Quality at the US Environmental Protection Agency, has been acknowledged for the role he’s playing in guiding the agency through adoption of its tough emissions and fuel economy rules. Grundler has led offenses against automakers overstating their mpg stickers about their best-in-class fuel-efficient vehicles. Hyundai and Kia were recently hit with a $100 million civil penalty for overstating mileage along with other fines; other automakers have revised fuel economy labels, including Mini and Mercedes-Benz, and Grundler’s office has played a leading role in this tactic.
Fleets in Texas have access to an incentive for propane autogas vehicles. The Propane Council of Texas is offering up to a $7,500 incentive for purchasing a propane-powered vehicle for their commercial fleet. The program is capped at $15,000 available per fleet.
The Renault-Nissan Alliance has passed the 200,000 mark in electric vehicle (EV) sales. The global automaker says that about 150,000 of that has been Nissan EVs sold in the US, Asia, and Europe – mostly the Leaf but also the e-NV200 small commercial van that may be introduced into the US. Renault offers four EV models – with its Zoe and Kangoo ZE being top selling, followed by the Twizy and Fluence ZE.
Southern California Edison’s (SCE) energy storage may be good for electric vehicle (EV) batteries. Electric utility giant SCE is investing more than anyone else in storage – enough for 250 megawatts (MW) of energy storage. That started out as needing 50 MW to make up for the loss when its San Onofre nuclear power plant was taken offline due to safety concerns, but its order has been five times that need. Much of that storage is coming from lithium-ion battery cells similar to what’s being used now in electric vehicle battery packs. Vehicle-to-grid (V2G) systems may be used to turn these EVs into storage units for excess energy.
Shedding 700 pounds has been very good for F-150 fuel economy. Ford Motor Co. has increased the fuel efficiency of its 2015 F-150 pickup by 29% with its lighter-weight aluminum body. When equipped with a 2.7L V-6 EcoBoost engine, the truck is getting 26 mpg highway, 19 city, and 22 combined, according to the US Environmental Protection Agency.
Miami-Dade County, Fla., has added more hydraulic hybrid trash trucks to its fleet. That’s the third order of the trucks built with Parker Hannifin’s RunWise Advanced Series Hybrid Drive System, bringing the total in its fleet up to 64 of these vehicles. Using these hydraulic hybrids is reducing fuel consumption by up to 50%, according to Parker Hannifin.
Renewable natural gas is getting more support. A new report, “Decarbonizing the Gas Sector,” from the Bioenergy Association of California (BAC), makes some impressive statements about the fuel’s potential. Organic waste converted into biogas could meet more than 10% of California’s natural gas demand. According to BAC, total organic waste in the state could be used to produce 2.5 billion gge (gasoline gallon equivalents) of transportation fuel, enough to replace three quarters of all the diesel fuel used in the state.
Volkswagen has high hopes for its “Think Blue. Factory” program. The German automaker thinks it can reduce energy and waste consumption, along with CO2, waste, and solvent emissions, by 25% by 2018 compared to its 2010 levels. The company has already implemented more than 2,700 projects that have made its production processes 17% more environmentally sustainable over the past three years. Recycling and reusing cooling water at some of its plants has been one of the tactics producing benefits, Volkswagen said.

Climate change is real for large institutions but it’s not making the case for cost-cutting fleets and consumers

Whatever you want to call it – climate science, climate disruption, or global warming – climate change is still coming up all over the map. Institutions of all types – large corporations, government agencies, research centers, and the United Nations – quickly set aside arguments that climate change isn’t happening. Their concern is whether it’s too late to stop devastating weather events, ocean acidification, melting ice caps, and massive losses of natural resources.

Most automakers and other major stakeholders tend to agree with making the case for climate change. Volvo Group renewed its partnership with World Wide Fund supporting its Climate Savers program. Renault-Nissan CEO Carlos Ghosn says that climate change is one of his company’s primary concerns. Honda has been pleased to announce that it’s further reducing carbon footprint by building a wind farm in Brazil that will produce enough energy to power its car factory in that country. Alternative Clean Transportation (ACT) Expo has made a partnership with Carbon War Room and The North American Council for Freight Efficiency for the Trucking Efficiency joint effort. Thousands of diplomats from around the world are meeting in Lima, Peru to make a United Nations agreement on the long dragged-out debate on implementing its Framework Convention on Climate Change.

Even though ground transportation makes up a big share of greenhouse gas emissions, it’s been a very tough sell to gain green vehicle acquisitions from fleet purchasing managers, truck transportation companies, corporate and government procurement officers, car shoppers, and consumers with influence over what their peers may purchase. Declining gasoline prices recently have had a big impact on retail car buyer decisions dipping on hybrids and electric vehicles. Those pump prices may drop down to $2 per gallon by Christmas-time at some US gas stations. OPEC failing to cut down on oil production should have something to do with dropping gasoline prices.

Fleets are shying away from investing in natural gas vehicles and fueling, and to some extent propane, when they can better contain costs with fuel-efficient internal combustion engine vehicles. Consumers are facing similar challenges – the economic collapse of 2008-2009 is over, but the environment has definitely changed. There are still a lot of layoffs going on, sending kids to college is incredibly expensive, medical coverage hasn’t been turned around yet by Obamacare, and the cost of living can quickly creep up on each month’s bill-paying cycle for many Americans. Making an investment in a new vehicle technology is a tough sell, and the early adopters are done with their fascination with electric vehicles and other alternative powertrains.

So how does one make the case for green vehicle acquisitions in this landscape? Wearing my consultant hat, and being a rabid consumer of news and peer conversations on the topic, here are a few strategies that seem to be working:

Make the case for return on investment (ROI). Fleets are finding they can reach payback in about two-to-three years in duty cycles after making the acquisitions; sometimes that happens within a year-and-a-half. After that point, the fleet saves money on that vehicle acquisition through fuel cost savings and sometimes through reducing maintenance costs.
Green vehicles support the organization’s sustainability priorities. Many government and corporate employees will tell you impressive stories about their leaderships’ programs designed around handing over a clean environment to future generations. Their fleet vehicles make up a lot of that environmental impact, and today there are many practical and viable options for reducing greenhouse gas emissions in transportation.
Don’t forget infrastructure. For alternative vehicle technologies to take off, they need a lot more fueling and charging stations out there. That takes a lot of funding and support, but the resources are impressive for those willing to build a network of leaders in the community. Go to your local Clean Cities Coordinator to get the ball rolling.
Speak to other reasons besides climate change. While many key stakeholders accept climate change as a given, some don’t and will shut down their attention and support if that’s the cause they’re asked to buy into. When you’re making the case for gaining funding support from your city council, corporate board, investors, or your spouse, also mention other top issues. These days, air quality and health hazards would make top of the list; independence from foreign oil imports still gains support out there (anti-OPEC is still a good one); and a broad sustainability perspective usually works, especially the idea of being responsible for what’s handed over to future generations.
Don’t forget economic growth. In this day and age of economic globalization, fast-changing technologies, and industry shutdowns, supporting clean transportation makes more sense. It’s usually part of political lobbying and grant funding applications; but it also goes over well with business leaders looking for growth opportunities as the economic landscape continues to become more of a moving shell game. Job creation, public and private investment, infrastructure development, training and education programs, and technology innovations generally support the case for growth in clean transportation.

Clean transportation events to schedule for 2015 – and what to do if you hate attending them

It’s that time of the year again – time to plan for next year. Auto shows, fleet events, AltCar Expo, ACT Expo, electric vehicle conferences…….. Here’s a list of events to consider attending. And don’t forget about making good efforts to get on their speaker, panel moderator, exhibitor, and sponsorship lists. Plus, at the end of this event list there’s yet another list: Ways to make the most of events and conferences, even if you hate going to them.

Auto shows: Here’s the big ones for next year…..

North American International Auto Show
Jan. 12-25 in Detroit
AKA Detroit Auto Show, this car show is usually considered the biggest one of the year – with its car and truck of the year awards, unveilings, speaker list, and the tradition of being the first big auto show right after the first of the year in Motor City.
Washington Auto Show
Jan. 23-Feb. 1 in Washington DC
New York International Auto Show
April 3-12, NYC
LA Auto Show
To be determined

National Biodiesel Conference 2015
Jan. 19-22, Ft. Worth, Texas

3^rd Annual Clean, Low Carbons Fuel Summit
Feb. 3 in Sacramento
Policy makers and industry leaders meet in the capitol to discuss AB 32 cap and trade funds, Low Carbon Fuel Standard, and other pressing issues in California. (And don’t forget about the Blue Sky Award next week Tuesday in Los Angeles.)

SAE 2015 Hybrid & Electric Vehicles Technologies Symposium
Feb. 10-12 in Los Angeles

GreenBiz 2015
Feb. 17-19 in Phoenix

Energy Independence Summit
Feb. 22-24 in Washington DC

The Work Truck Show
March 4-6 in Indianapolis
Work truck fleet owners, managers, and upfitters meet; it’s held in conjunction with the NTEA convention and Green Truck Summit.

NAFA 2015 Institute & Expo
April 14-17 in Orlando
The annual conference for fleet managers and industry suppliers; including clean transportation symposiums with Calstart.

Electric Drive Transportation Association
The leading electrified transportation group is supporting two conferences next year –
28^th International Electric Vehicle Symposium (EVS) and Exhibition
May 3-6 in Goyong, Korea
Plus, partnering with ACT Expo 2015 during that time

ACT Expo
May 4-7 in Dallas

National Drive Electric Week 2015
The fifth annual event will be during the week of Sept. 12-20 in cities across the country.

The Battery Show
Sept. 15-17, Novi, Mich.

Electric & Hybrid Vehicle Technology Expo
Sept. 15-17, 2014 in Novi, Mich.

2015 NGV North American NGV Conference & Expo
Sept 15-18 in Denver

3 AltCar Expos
AltCarExpo Texas
To be determined
Bay Area AltCar Expo
To be determined
AltCar Expo
Sept. 18-19 in Santa Monica, Calif.

Meeting of the Minds
Oct. 20-22, Richmond, Calif.
Now in its ninth year, Meeting of the Minds brings together a carefully chosen set of key urban sustainability and connected technology stakeholders, and gathers them around a common platform in ways that help build lasting alliances.

There are a lot of excellent events to attend – and this list will grow when you start counting the important meetings in your local market that you need to attend for networking and staying current on what your peers are saying. But what if you don’t like going to any of them, or you’re so busy that it adds to the pressure of getting a lot of work done on your heavy schedule?

Here’s a list of action steps that are working for me, and that come from peer feedback and a few good articles that I’ve read……..

Plan ahead and schedule meetings. Look at the conference schedule and think about what you’d like to accomplish during that time. There are probably a handful of people you want to talk to, and they’re going be very busy during that week. So send them an email or make a phone call a week or two early, and set up a good time for a meeting.
Don’t regret missed opportunities. There may be a location in that metro area that you could have visited if you’d gone a day early, and it needs more relationship-building time. There likely will be time-conflicting meetings that you need to attend and have one of your co-workers or colleagues attend the other one for you, to take notes and shake hands. Schedule that ahead of time. Keep in mind what your travel time will be like and how it will affect meeting attendance. If traveling there wipes out a whole day, consider leaving earlier to not miss it; or to make sure somebody will be there representing you.
Collect all the content that you can. Don’t miss out on the excellent show coverage and other content you’ll need to gain insight on what was covered at all the speaker panels, product launches and announcements, social gatherings, keynote addresses, etc. Sometimes (such as at ACT Expo) there’s a daily newspaper given out, and the conference folders many times include white papers and press releases. There might also be emails sent out and more information (like special reports) posted on the conference’s website, blog, or social media sites. Local and business media will be covering the event by video, print, and online media – don’t forget to search for it when you get back.
Devote a few hours for review and follow-ups once you get back. You’re probably going to be burned out and needing to catch up on things that happened while you were gone. It’s a good idea to build in two-or-three hours soon after you return to review your notes, content, news coverage of the event, emails you received, insights and ideas you gained, etc. Adding follow-up actions to your business plan is a good idea. Don’t contact people that you connected with right away (like the next morning), but don’t let it get too far away. It’s a shame to lose good opportunities.