April 2017 -

This Week’s Top 10: VW paying $4.3B in fines, Tesla speeding up Model 3 production

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…….

VW settles criminal charges: Volkswagen’s guilty plea to three felonies in March resulted in the automaker being sentenced Friday to pay $4.3 billion in fines for importing 59,000 polluting diesel vehicles into the U.S. beginning in 2009. The charges were for conspiracy, obstruction of justice, and introducing imported merchandise into the U.S. by means of false statements. Without the plea deal, VW would have faced potential criminal fines in the cases of between $17 billion and $34 billion. In a federal courtroom in Detroit, U.S. District Judge Sean Cox called VW’s actions a “deliberate, massive fraud perpetrated by VW management. We don’t know how far up the corporate ladder it goes. Hopefully, the DOJ, and more hopefully, the German government, will continue to investigate and prosecute” those responsible. That ends prosecution by the federal government, but buybacks aren’t yet completed and civil suits continue in the U.S.; criminal investigations continue in other countries, including Germany.
Speeding up Model 3 production: Tesla will begin volume production of the Model 3 in September by streamlining the tooling process, which runs the risk of facing recalls or warranty repairs. On an investor conference call last month, CEO Elon Musk said the company would skip the usual auto manufacturing procedure, which he called “beta,” to speed up production. Musk said he would instead use “advanced analytical techniques,” which are computer simulations, to speed up the process. Automakers usually test a cheaper prototype model to make sure parts and components fit correctly, adding time and cost to the process but also guaranteeing a higher level of vehicle reliability. Musk has promised to ramp up vehicle production fivefold next year, producing and selling 500,000 vehicles a year by 2018 as the Model 3 enters the market.
More Pacifica plug-ins going to Waymo: Fiat Chrysler Automobiles is providing another 500 Chrysler Pacifica plug-in hybrid minvans to Waymo’s self-driving vehicle test project. Last year, FCA delivered 100 of these vehicles that Waymo that both companies equipped with its autonomous technology. Waymo had worked with FCA engineers at a Michigan facility to modify the vehicle’s with the technology. Waymo is also planning on opening up test rides to the public, starting in Phoenix.
Amazon goes autonomous: Amazon is entering the autonomous technology sector by testing out applications to make its product deliveries become faster and more convenient for customers. Details aren’t coming out yet on what the team of a dozen employees is working on but it could be an autonomous fleet of delivery trucks. The internet giant is interested in autonomous trucking for its own deliveries and possibly to sell transport services to other companies such as UPS and FedEx. In January, the company secured a patent for a network that helps autonomous vehicles adjust in changing driving environments.
AAA study on EV interest: A new AAA study found that 30 million Americans say they’re likely to buy an electric vehicle, with members of the Millennial generation especially interested with 20% wanting to go that route. But the study also found that the interest level hasn’t yet turned into EV sales for most of them. AAA said that concerns include range anxiety, lack of charging stations, and running out of battery power before the end of their drive. Low ownership costs and emerging technologies will improve their sales in the future, according to AAA.
EV Roadmap in Portland: EV Roadmap 10 invites participants to “test drive the future,” learning from industry leaders as well as the leading communities and regional markets. The conference will be held June 20-21 in Portland, Ore., and will be organized around three tracks: Cars, focusing on the accelerating adoption of electric cars and other EVs. Charging infrastructure, which is evolving quickly to meet the needs of millions of new electric vehicle drivers. Community will focus on the broader “ecosystem” needed for the market to expand. Sessions will include an in-depth discussion of the Electrify America plan, programs designed to bring electric mobility benefits to underserved communities, and analysis of how electric vehicle adoption can lower electricity rates. You can register for the event online.
Penske again named to SmartWay winners: Penske Truck Leasing has, for the fifth straight year, been given the SmartWay Affiliate Challenge Award by the U.S. Environmental Protection Agency (EPA). Penske is one of nine organizations to receive this honor. The SmartWay Affiliate Challenge is a national challenge developed by the EPA to acknowledge organizations that are contributing to a clean energy economy by reaching out to inform and educate businesses, their communities, truck drivers and other stakeholders about steps they can take to reduce freight emissions and their other environmental impacts. Here’s the list of winners. “EPA commends the SmartWay Affiliate Challenge honorees for their extraordinary level of commitment and enthusiasm in supporting more efficient and sustainable business practices in moving goods,” said Christopher Grundler, director of the EPA’s Office of Transportation and Air Quality. “These organizations represent diverse industry sectors and stakeholders who believe that American prosperity can be preserved while protecting the environment.”
Next Generation Mobility Challenge: Toyota and Net Impact announced three finalist groups for the Next Generation Mobility Challenge, which focuses on developing solutions for critical mobility needs in local communities around the world. The winning team will be announced in early summer, and finalists were named to the list based on project design, feasibility, and social impact. The finalists are: “The Hub” – a carpooling concept based in school communities that would be more efficient than public transit and allow commuting parents to spend more time with their families, featuring students from California College of the Arts and UC Berkeley; “Project Mobius” – a company-sponsored employee transportation system for low-income individuals to help them acquire and retain jobs while boosting employee loyalty and reducing environmental impact, featuring students from University of Colorado; and “Para Pickup” – a service that gives people with disabilities safe, affordable and flexible ways to get home, improving on current options which can be inflexible and slow, featuring students from Georgia Tech.
Fuel cell truck test: Toyota announced “Project Portal,” a hydrogen fuel cell system designed for heavy duty truck use at the Port of Los Angeles. The zero-emission truck proof of concept will take part in a feasibility study examining the potential of fuel cell technology in heavy duty applications. The study will begin this summer and contribute to the Port’s Clean Air Action Plan, which has dramatically reduced harmful emissions from operations at the Ports of Long Beach and Los Angeles since 2005.
Propane autogas in Europe: European Alternative Fuels Observatory (EAFO) published a special edition of its report on the role propane autogas vehicles have played in the region in recent years. It’s the most widely used alternative fuel in Europe now with more than 12 million passenger vehicles placed in fleets as of 2015. Turkey has 35% of these vehicles with over four million vehicles. Italy and Poland join Turkey in being the only countries with over one million propane-powered passenger vehicles on their roads. Turkey also has the largest number of propane fueling sites, with over 10,000 stations. Germany has the second highest number of propane autogas stations despite having only the fourth largest propane-powered fleet in the region.

Looking at the numbers behind China and California’s zero emission vehicle mandates

Auto Shanghai 2017 has been full of “new energy vehicle” announcements for the Chinese market from major and startup automakers. General Motors has plans to launch 10 all-electric and plug-in hybrid models by 2020. Ford, Volkswagen, and Nissan, all have aggressive plans for the market. Chinese startup NextEV displayed 11 vehicle concepts from its all-electric NIO brand.

Behind all of it is the top global market for plug-in electrified vehicle sales and proposed government mandates for increasing those sales. China is interested in following California’s zero emission vehicle (ZEV) structure mandating an even higher percentage of sales to hit these targets with a credit trading scheme backing it up. But how realistic is it for China to meet its mandates – and for California?

China’s Ministry of Industry and Information Technology proposed last fall that ZEVs represent 8% of new vehicle sales as soon as 2018, and that would go up to 12% by 2020. Included in those numbers would be all-electric, plug-in hybrid, and fuel cell vehicles covering light, medium, and heavy duty vehicles. That includes all new cars, trucks, and buses sold in the country.

Companies that fail to meet the 8% requirement would face fines or have to buy credits from those that exceeded the minimum. That percentage score comes from weighted averages assigned to various zero- and low-emission vehicles. As in California, automakers that fail to meet the requirement face fines or have to buy credits from those that exceeded the minimum.

Average production of new energy vehicles last year may have contributed only about 3% of the score required, 5 percentage points short of the proposed 2018 target, according to the China Association of Automobile Manufacturers.

During 2016, there were about 507,000 new energy vehicles sold in China. As for total new vehicles sold in the country, there were about 28.03 million sold. As for the percentage of sales, NEVs accounted for about 1.8% of new vehicles sold; the government’s weighted averages brought it up to 3% in the scoring system.

China is considering blocking or delaying these proposed measures after industry feedback concluded that the targets are overly ambitious. It may be finalized by May or June, according to a government official.

Automakers are backing China’s goals, but are feeling a lot of anxiety about getting anywhere near close to selling 8% of total sales as ZEVs by 2018 – even if credit trading and a flexible point system helps ease the burden.

For those consumers and fleets making vehicle purchases in China, large sedans and SUVs are quite attractive. Many of these consumers are experiencing their first-ever high incomes, and are supporting China’s economic growth by spending a lot of it on vehicles, housing, mobile devices, entertainment, travel, and personal investments.

For now, buying vehicles that consume a lot of fossil fuel is just fine with car shoppers. A clear example of this is that first quarter 2017 SUV sales soared 21% from a year earlier to 2.4 million in China, while electric vehicle purchases declined 4.4% to just 55,929, reports Associated Press. Incentives were down on NEVs after the first of the year, which was thought to have an impact on NEV sales. If the current rate continues, it could finish the year below last year’s 507,000 plug-in vehicles sold.

Last year, California saw 62,166 plug-in electrified vehicles sold. Overall, the state had 2.1 million in new vehicle sales, with PEVs making up about 2.96% of total sales.

California Governor Jerry Brown’s ZEV goal is for the state to have 1.5 million ZEVs on its roads by 2025. That means about 15% of new vehicle purchases will need by to be ZEVs by 2025, or about 12% of sales higher than where it is now.

Commercial vehicles, such as medium- and heavy duty trucks, vans, and buses, are included in California’s ZEV sales data, similar to China. Both governments also include hydrogen fuel cell vehicles in those totals. Those sales volumes are quite small, but California is still leading the way on fuel cell vehicles and fueling stations. China has yet to see any fuel cell vehicle sales, though Toyota and other automakers plan to enter that fuel cell market.

China’s national government has been cracking down on vehicle manufacturers committing fraud in their NEV production and sales numbers to tap into generous government subsidies. That’s always been a concern for advocates of emission reduction targets around the world – that subsidies could be a scam and that credit trading can water down the end goals of the mandates.

China and the European Union are expected to keep strict mandates in place for the sale of ZEVs in those markets. The U.S. is expected to soften fuel economy and emissions rules under the Trump administration, though some analysts expect that consumers and fleets will increase demand in fuel efficient vehicles and that the nation’s current level of about 1% of new vehicle sales going to PEVs will be seeing an increase soon.

Most of the studies on ZEV goals being met point to a few recommendations:

Staying with subsidies including low-interest loans and rebates to vehicle manufacturers, and rebates and tax incentives available to consumers and fleets. These will need to be supported by cash-back incentives and finance programs from OEMs sometimes tied to dealer programs.
Continuing to bring down acquisition cost by making the battery packs and electric drives more affordable and cost competitive.
Increasing the range of all-electric, plug-in hybrid, and fuel cell vehicles.
Speeding up charging time through faster charges and an infrastructure spreading through workplaces, public chargers, homes, and multi-unit dwellings.
Wireless charging is also raising hopes for wide adoption of PEVs.
Adding more hydrogen fueling stations.
Seeing more diversified and attractive offerings in plug-in and fuel cell vehicle launches for both passenger and commercial vehicles.
Globalizing new vehicle launches for efficiency and sales growth – with variations built in by automakers based on government regulations, left- or right-side steering wheels and pedals, types of electric outlets in each country, and consumer and fleet expectations.
Public awareness and education programs tied to larger greenhouse gas emissions reduction targets including ride and drive events, public chargers and hydrogen stations, and powering PEVs and fuel cell vehicles through renewable energy sources.

This Week’s Top 10: Ford wants to electrify China market, White House wants to pass cost of EPA vehicle emissions testing over to automakers

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…….

Ford joining China EV market: Ford Motor Co. is now in agreement with Daimler, Tesla, and General Motors on the importance of China in the global electric vehicle market. Ford is launching the Mondeo Energi plug-in hybrid in China early next year and an all-electric small SUV in that market within five years. The EV will go more than 280 miles on a charge, and will also be sold in the U.S. and Europe. The automaker said that 70 percent of all Ford nameplates will have an electrified option in China by 2025; that will include hybrids, plug-in hybrids, and battery electric vehicles. That lineup will include all vehicles manufactured jointly through Changan Ford JV, which is a collaboration with Changan Automobile. EV sales are expected to stay strong in China, whether or not the government cuts back on its generous subsidies. “The time is right for Ford to expand our EV lineup and investments in China,” said Ford CEO Mark Fields. “We are prioritizing our electrification efforts on China to reflect its importance as a global electrified vehicle market and to make lives better, simpler and more cost effective for Chinese consumers.”
EPA lab fees: The White House would like to see automakers pay for testing in the Environmental Protection Agency’s emissions testing lab. The Trump administration is proposing a $48 million budget cut that would close down the lab and cut 168 jobs. It would mean “pretty much shutting down the testing lab,” said Margo Oge, who led the EPA’s Office of Transportation and Air Quality under the Obama administration. Funding would come in by increasing fees that automakers and engine manufacturers would be required to pay for testing.
Cap-and-trade protected for now: California’s cap-and-trade system was solidified by a state court – at least until 2020. The state program allows companies to purchase carbon credits through an auction or a secondary market and has produced millions of dollars in funding programs for clean transportation and fuels. A state appeals court has found that it’s not an illegal tax due to voluntary participation and the purchase of something with value, which keeps it from being a tax, according to the ruling. The program will stay in place through 2020 before becoming vulnerable to legal challenges. Since its launch in 2012, California has taken in about $4.4 billion on auction proceeds to be spent on clean energy, low-carbon transportation, and other programs supporting reductions in greenhouse gas emissions.
4 in I.D. lineup: According to Volkswagen design chief Klaus Bischoff, the fourth I.D. all-electric vehicle, a concept sedan, will be revealed at the Frankfurt Motor Show in September. It won’t be revealed before then, but it got a lot of “wows” from VW colleagues when they saw it for the first time, he said. That’s the fourth in the I.D. series to be built on the new MEB modular electric platform. The I.D. hatchback compact concept, unveiled in September at the Paris auto show, was the first and is scheduled for production in 2020. The I.D. Buzz microbus concept was revealed in January at the Detroit auto show, and the automaker will be showing the third one, an I.D. SUV concept, soon at the Shanghai Motor Show. The company recently told analysts that the I.D. concept hatchback is expected to have its design approved this August for a 2020 launch.
Hybrid police car: Ford is rolling out the first hybrid police car, which was designed to meet certification standards law enforcement agencies require to meet their full pursuit ratings. The Police Responder Hybrid Sedan is being built on the Fusion Hybrid. The automaker designed the pursuit vehicle for agencies to cut fuel costs and decrease emissions while driving and idling. Ford received an EPA-estimated mpg of 38 combined city and highway, more than double that of the Ford Police Interceptor with its 3.7-liter, V6 engine and 18 mpg combined EPA rating. The police departments in Los Angeles and New York City will be taking deliveries this summer.
AutoDrive Challenge: General Motors is sponsoring AutoDrive Challenge, a university competition with SAE International in autonomous vehicles. At SAE World Congress Experience in Detroit, they announced these universities will be demonstrating automated Chevy Bolts during a three-year challenge. Kettering University, Michigan State University, Michigan Tech, North Carolina A&T University, Texas A&M University, University of Toronto, University of Waterloo, and Virginia Tech are now competing. GM and SAE have been heavily involved in student competitions for advanced vehicle technology for years. Formula SAE race car design competition started in 1980, and GM is now sponsoring EcoCar 3 with the U.S. Department of Energy.
TurboDock chargers: AeroVironment Inc. announced today that Hartsfield-Jackson Atlanta International Airport will install 102 of its TurboDock EV charging stations in the airport’s parking structures. Packed with features specifically designed to make it ideal for airports, including modular charging configurations, 120V capability and mobile app based access control, TurboDock helps EV drivers proceed with certainty, the company said. The installation is the most recent effort by the City of Atlanta and the Hartsfield-Jackson Atlanta International Airport to turn ATL into one of the greenest airports in the world.
March EV sales: Tesla took No. 1 and No. 2 in U.S. electric vehicles sales, with about 3,100 and 2,500 units sold, respectively. The Chevy Volt came in third with 2,132 units sold and has been the top performing plug-in hybrid in U.S. sales through the first quarter. The Prius Prime was fourth on the list with 1,618 units sold.
ACT Expo autonomous vehicle panel: “The Future of Intelligent Transportation: Connected & Autonomous Vehicles” will be one of the speaker panels at the upcoming Advanced Clean Transportation Expo (ACT Expo 2017). Attendees can learn more about the latest advancements in innovative vehicle technologies that are disrupting the way vehicles interact with other vehicles, the environment around them, and drivers. Featured speakers include Mike Roeth, North American Council for Freight Efficiency, an industry leader who understands the phases of truck automation and the expected ROI; Bill Burns, City of Columbus, Ohio, who played an integral role in combining electric and automated technology to win DOT’s Smart City Challenge; and Joanna Wadsworth, City of Las Vegas on launching the first electric autonomous shuttle on U.S. public roads. For further details on vehicle displays at the conference, you can view the vehicles list.
ZEV mandate not going away: Read all about Plug In America’s history, along with the film “Who Killed the Electric Car?”, that goes back to 2003 and the California Air Resources Board’s controversial decision to become heavily influenced by pressure from automakers and scale back the zero emissions mandate. Times have changed, with CARB unanimously deciding to stay with the ZEV program as planned without any changes through 2025.

Cleantech stock prices beyond Tesla, plus options if the IPO doesn’t work out

If you’re looking to add cleantech stock to your portfolio, is there anything to buy beyond Tesla Inc. (TESLA)? If you’re a startup cleantech or clean transportation company, is going public viable for your financial future?

Tesla’s stock price and market valuation grabbed a lot of attention last week, with the irony of its market capitalization rising over $49 billion versus Ford Motor Co. (F) being at $44.63 billion (as of late Friday). Ford’s shares were trading at $11.23 and Tesla closed Friday at $302.54. Not bad for a company that’s never earned a quarterly profit.

It continued into yesterday with the Tesla stock climbing 3.3% Monday to $50.9 billion in market capitalization, eclipsing General Motors (GM) to become the highest ranking automaker in the U.S. – not in vehicle sales but it market valuation. Tesla is within $1 billion of Honda and making it into the top five global automakers in market value.

“Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate,” said Alexander Potter, an analyst at Piper Jaffray Cos., who upgraded the stock Monday. “As they scramble to catch up, we think Tesla’s competitors only make themselves appear more desperate.”

Some critics worry that Tesla has become a cult of personality around charismatic CEO Elon Musk; while others see the real value coming from the quality and performance of the Model S and Model X and the impressive figure of bringing in over 400,000 pre-order down payments last year on the Model 3; not to mention Superchargers and Tesla Energy. A few Wall Street analysts are worried Tesla won’t be able to hold a stable financial position in the next couple of years as it ramps up to produce more than 500,000 vehicles a year and increases its debt. There’s also the big question of whether the SolarCity merger was a wise way to go. The latest stock surge is a clear sign that electric vehicles are being seen as an integral part of transportation’s future – with Tesla well positioned to tap into it.

If you look at cleantech stocks or take a visit to Alternative Energy Stocks, you’ll find it difficult to locate stocks that are growing in price and have market valuation anywhere near Tesla’s. Leading solar power company SolarCity had been doing very well in stock market performance up to about a year ago, but then started seeing its stock value plummet. The company was facing a few serious hurdles, which prompted the company to merge late last year with Tesla. That meant SolarCity stock was no longer listed in NASDAQ market quotes.

Green Auto Market Extended Edition tracks stock performance on a monthly basis. Tesla is the only publicly traded company on the list that has over a billion in market cap, though SolarCity used to be on that list. Vivint Solar, the second largest solar power company in the U.S., was looking very good about two years ago in stock price increases and market value. It had been split off from parent company Vivint Smart Home and was doing well after its IPO. SunEdison was going to acquire the company last year, but the deal fell apart, which brought stock prices down. The two Vivint companies are partnering now to go after more market share dominated by Tesla’s SolarCity; and that includes increasingly popular smart-home tech offered by companies like Vivint.

Some companies tracked in Alternative Energy Stocks have only a small portion of their business in cleantech. AeroVironment, Inc. (AVAV) is a good example. While it plays a leading role in bringing electric vehicle charging stations to the U.S., that segment of the company’s revenue pales in comparison to AeroVironment’s role in aerospace.

About 10 years ago, cleantech stock and private equity funding was a hot commodity with renewable energy and electric car startups gaining backing. That took a dive after the Great Recession grabbed hold and venture capitalists and institutional stock fund managers started looking elsewhere, such as mobile device applications and Silicon Valley tech firms.

Government grants, especially through the U.S. Department of Energy, filled some of that void for a few years. It became a battleground in Congress, and 2012 Republican presidential candidate Mitt Romney used the public funding and bankruptcies of solar startup Solyndra, plug-in hybrid sports carmaker Fisker Automotive, and lithium battery company A123 Systems as campaign fodder against President Obama.

Private equity has filled some of the void, with much of it coming from China. Wanxiang Group, a major auto parts supplier, has helped salvage and rejuvenate Fisker and A123 Systems through post-bankruptcy acquisitions. Karma Automotive is now using the Fisker Karma drive train system in its Karma Revero plug-in hybrid sports car. A123 Systems has switched over from lithium iron phosphate to nickel manganese cobalt (NMC) technology to meet the market demand for advanced battery chemistries in high energy applications, some of which will include plug-in vehicles. A lot of the company’s focus lately has been on 48-volt batteries.

Some of the investments coming from China aren’t working out so well. U.S.-based startup Faraday Future is owned by LeEco and Chinese tech entrepreneur Jia Yueting. LeEco has faced its own set of financial problems and may be backing away from Faraday Future at this time.

LeEco is a major investor in another electric car startup grabbing a lot of attention these days. California-based Lucid Motors is looking for $700 million to establish its Arizona factory and build the “Air” electric luxury sedan. Lucid claims that the Air will go 400 miles per charge through two AC induction motors capable of producing 1,000 in combined horsepower.

Lucid Motors is now working on a Series D financing round. Once that funding is secured, ground will be broke on its production plant. It will carry out the process gradually in three phases.

For those interested in filling out their stock portfolio with companies getting good marks in sustainability performance, it might be a good idea to look at the supply chain and tech company partnerships.

Johnson Controls International (JCI) is getting strong sustainability ratings, and is considered to have tangible value on the stock market. The company has been included in 40 sustainability indices in recent years and claims to have reduced its greenhouse gas emissions intensity 41% from 2002 to 2014. JCI is a leading supplier of batteries for hybrids and EVs, along with being a recycler of lead-acid batteries; and a large producer of automotive electronics and parts such as seats and instrumental panels. It’s also well known for being a leading provider of energy management products and HVAC for buildings.

Renewable Energy Group (REGI) has been finding supporters, including a stock market analyst making annual recommendations to Renewable Energy World. The company has becomes a leading producer and seller of biomass-based diesel in the U.S. Turbulence over renewable fuel standard credits and low oil prices have hurt the company and many others, though the company’s fuel and stock prices are finding more backers in the market. The company is also doing well through a Services department that provides facility management and operational services to biofuel and cleantech facilities.

Several major automakers and their supply chain partners have been working on using less energy and water in their factories and other facilities. Ford just made the World’s Most Ethical Companies for the eighth year. The automaker was acknowledged for making Partnership for a Cleaner Environment (PACE) part of its ethics and sustainability drive. That program was set up to encourage sustainability practices, including water and energy conservation, throughout its global supply chain. General Motors (GM) now has 122 landfill-free facilities around the world that recycle, reuse or convert to energy all waste from daily operations, about three fourths of which are manufacturing plants. The company has committed to using 100% renewable energy by 2050.

Last year, Toyota Motor Corp. (TM) launched a six-phase sustainability initiative through 2050. Along with clean energy and water efficiency, the company says that 100% percent of its new vehicles sold that year will be zero emission.

Tech companies like Apple, Google, and Facebook have gained a lot of backing supporting their share prices. They’re also heavily engaged in powering their facilities with clean energy, as detailed in a 2GreenEnergy blog post. Apple and Facebook clouds are powered by renewable energy. Amazon’s web service, which hosts Amazon.com, Pinterest, Netflix, Spotify, and many other major websites, said it will utilize 100% clean energy for its global network.

You can also take a look at Cleantech Group’s list of companies and weightings for those included in the Cleantech Index. There are no automakers on the list, but a few suppliers and tech companies are being followed including Siemens, ABB, Schneider Electric, Johnson Controls, Borg Warner, Trimble Navigation, Intertek Group, and engineering firm Ricardo.

Tesla has been wise to tap into just about every imaginable source of funding out there, short of crowdfunding (unless you want to put the $1,000 down payments for the Model 3 in that category). The electric carmaker took a Department of Energy loan that it paid back early. Its stock market value continues to be strong with Musk continuing to be the largest shareholder in the company.

Musk has said that Tesla could likely have disappeared if it weren’t for significant investments made by global automakers Daimler and Toyota in 2009 and 2010. Both of these companies have sold their shares in Tesla for excellent profits. They did tap into Tesla’s electric drive system for some of their first steps into electric vehicles before ending the partnerships.

Like many automakers, China will be a vital growth more for Tesla in the future. Musk had said China will someday become Tesla’s largest market, and the company just reported making $1 billion sales last year in that market.

A Chinese company has also become one of the largest investors in Tesla. Chinese tech giant Tencent Holdings just invested $1.78 billion, or about 8.2 million shares, making it Tesla’s fifth-largest shareholder. The first four largest shareholders are Musk and investment companies Fidelity, Baillie Gifford, and T. Rowe Price.

Tesla needs strong cash flow to get the Model 3 launched in high volume. Tencent wants to diversify its portfolio and is a big believer in how sizable EVs and the charging infrastructure will be. The company has been investing in Chinese EV startups. One of these, NextEV, also has a U.S. office near Tesla’s Palo Alto, Calif., headquarters, and is committed to rolling out an electric supercar that will be Tesla-competitive.