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Big Picture: The latest on the Fisker bankruptcy settlement, Lithia Motors gains silver LEED certification

Settlement of the Fisker Automotive bankruptcy and bidding for new ownership continues to be dragged out – but the Delaware plant may survive. Hybrid Technology, led by billionaire Richard Li, has put in $55 million for Fisker’s assets. Hybrid’s bid had been rejected days ago by bankruptcy court judge Kevin Gross. Hybrid is offering $30 million in cash and is willing to cancel $25 million in debt that Fisker owed the Chinese company. Hybrid also is offering $5.5 million to unsecured creditors if they would agree to back Hybrid Technology instead of its rival, Wanxiang Group.

Hybrid Technology has also changed its tune on what will happen with the Boxwood Road plant near Newport, Del. Hybrid changed course after gleaning that many people in the court building were very upset about the shutdown of the factory. Hybrid is now willing to use the shuttered plant if market conditions demand it. On Friday, bankruptcy judge Gross said he would put Fisker’s assets up for auction to try to maximize the automaker’s market value. Wanxiang had told the judge that if it can acquire Fisker at auction and cultivate a market for the cars, they would have them made at the Boxwood Road plant. Wanxiang had been non-supportive of the Delaware plant before that court day, as well.

And in other clean transportation news…..

Lithia Motors, Inc., the Medford, Ore.-based and ninth largest US automotive retailer, has been awarded Silver LEED certification by the US Green Building Council. Building construction completed in August 2012 in downtown Medford used environmentally-sustainable building products, furniture, and furnishings; many contain a significant amount of recycled-content materials. The new building has solar panels on its roof to offset energy usage.
VIA Motors signed an agreement with Recargo, Inc., at the North American International Auto Show in Detroit to include Recargo’s PlugShare charging infrastructure information in VIA’s in-dash electric vehicle application. VIA thinks the comprehensive charging station information will help its customers find a charge whenever and wherever they need one.
At the Consumer Electronics Show, Toyota said that its Toyota FCV (fuel cell vehicle) will go on sale in the US in 2015, one year earlier than the company had previously announced. The fuel cell vehicle will have a range of 300 miles and take three-to-five minutes to refuel.
Chrysler Group is going to start building its 2014 Ram 1500 EcoDiesel pickups this month; that’s several months after it had been originally scheduled to start up. These 3.0L diesels are expected to be distributed to dealers in February.
The CBS series “60 Minutes” has been getting heavily criticized for its January 5^th segment called “The Cleantech Crash.” The segment presented a laundry list of government-backed failures starting with the infamous Solyndra bankruptcy, failing to mention the large number of successful ventures.

Dark clouds on the used green car front – and what could be done about it

Electric vehicles, hybrids, and small, fuel efficient vehicles are having a tough time on the used vehicle market lately. Black Book’s Ricky Beggs and Kelley Blue Book forecast downward pricing. Wearing my hat as editor of Used Car Market Reports, I would say it’s not something to be alarmed over, but it is important to stay current and study the options.

Here’s the latest:

I interviewed Ricky Beggs last week on Black Book’s 2014 used vehicle market forecast. He said that entry-level cars, hybrids, and EVs will continue to soften in used vehicle prices this year. The 54.5 mpg by 2025 federal fuel economy standard is playing into it – there’s a lot more automakers competing in these segments now and the market is still sorting it out.
Gasoline prices are the main drag on their resale values, Beggs said. While gas prices have gone up a bit lately, he thinks it will be much like the past two years. We’ve been seeing an increase in gas prices since mid-December and that should continue through mid-February; but gas prices will likely drop beyond that point. Beggs expects to see a high in the national average somewhere in the $3.75 to $3.85 range; it averaged $3.49 overall last year. It would need to go up quite a bit for that to be felt in strong used prices for fuel efficient, green cars.
As for this year, three leading energy agencies have reported that oil production outside of OPEC countries should be increasing this year – with much of that coming from US shale fields. That’s one of the reasons gasoline and diesel prices are expected to stay about where they are now by energy analysts.
Kelley Blue Book (KBB) thinks electric vehicles are going to see big drops in used vehicle values after five years of ownership. The Ford Focus Electric could take a nosedive – dropping down to $7,200 from a starting price at nearly $36,000. The new Chevy Spark EV is also expected to get hit hard – retaining only 28% of its value and coming in at under $8,000 after selling for $28,305. The Nissan Leaf could be the loss leader after five years, seeing only 15% retained value at just under $5,355.
Keep in mind that these value forecasts don’t factor in federal tax credits, usually at $7,500 for these models being analyzed. Regional and state incentives also come into the equations. Buyers saving around $10,000 off the sticker price would soften the value retention’s downward spiral, but the price drop is still there.

My thoughts on the situation:

Watch what the OEMs are doing. The used vehicle remarketing process has changed quite a bit in recent years. During the past four years, there’s been a lot more discipline in the market with OEMs, captive finance divisions, and dealer networks reducing incentive offerings and avoiding dumping low-sales volume vehicles into fleets. It will be very interesting to watch what Toyota, GM, Ford, Nissan, Honda, and BMW do to respond to EV and hybrid resale value loss.
Plug-hybrids are doing better in the KBB forecast. They have a much better chance of retaining more of their value. The Tesla Model S is also looking good since Tesla is building its leasing deals on high forecasted prices. That makes them more affordable for consumers and Tesla is taking more of the risk of absorbing any losses.
OEMs, dealers, and remarketers should emphasize the lifecycle costs of these vehicles. A lot of fleets are acquiring more of these vehicles because of their total cost of ownership – the fuel cost per mile is much lower and there’s less to spend on maintenance for an EV, and many times for a hybrid, than for an internal combustion engine vehicle. The soft resale value forecasts will hurt, but the other cost saving factors could salve the wound a bit.
Some of the tried and true marketing methods could help. When you think of TV commercials and other marketing methods in the past few years (such as for Nissan Leaf and Chevy Volt ads), there’s always been messaging around a few themes – air pollution, carbon emissions, fuel prices, and freedom from oil addiction and the power of foreign oil markets. Gasoline prices made for the most convincing argument after the staggering price spike of 2008; but that was nearly six years ago and gasoline prices look like they’ll be staying under $4 a gallon for a while longer. Resale values will take a while to improve. Focusing on other themes besides gas prices and resale values would be a good idea for now.
There’s also the fascination a lot of people have with cool new technologies on the market and how they work. That’s always part of the EV marketing campaigns out there from Nissan, Tesla, BMW, Toyota, GM, and Ford. The autonomous, driverless car projects make for a good example. Google chose the Toyota Prius for its initial driverless test car and Nissan has gone with its all-electric Leaf. Focusing on the cool technology theme could help offset declining used vehicle values.
Improving the brand image might not bring the resale values back right away. Emphasizing the green benefits and the fun of driving these new technologies won’t stop a price plunge for used vehicles in the short term. Some of that will have to be addressed through bringing the production costs and lithium battery costs down in scale to be more cost competitive on the market; and eventually creating accurate alignment with supply and demand. It’s still very early in the lifecycle process of these vehicles – especially EVs – on the market to gain a realistic analysis of precisely how many should be built and delivered to dealers.

‘Corporate social responsibility’ mission statements: What do they mean for you?

If you’re ever looking at annual corporate reports or high-ranking executive surveys, a few recurring themes tend to appear. While the global economy and fast-changing technologies are usually mentioned, another category is starting to stand out – corporate social responsibility.

Back in October, John Krafcik, then-president and CEO of Hyundai Motor America, spoke clearly about where most automakers and other Top 500 companies are headed. “We’re committed to being a leader in CSR (corporate social responsibility), and to being a leader for the environment. As an automaker, Hyundai has a strong position in CO2-reduction and personal safety systems in all the global markets in which we compete. Yet we see ourselves as more than a carmaker. We are committed to finding sustainable personal mobility solutions that ensure this great privilege is maintained for future generations. We’re absolutely committed to our philanthropic causes and corporate social responsibility.”

Krafcik also shared details on the Hyundai Sonata Hybrid, the Hyundai Tucson Fuel Cell, and charitable organizations that the company is making donations to. If you read through annual reports issued by other automakers – and by tier-one suppliers – you’ll see similar messages. Many corporate executives say it’s understood these days that they be responsible citizens in their local and global communities (or at least that they’re being perceived this way). OEMs are also expecting these goals to be fulfilled by their supply chain partners, a good example being Johnson Controls just announcing recognition received from its Volvo Cars client.

Corporate ethics, community service, and sustainability are the themes typically being articulated and committed to in corporate mission statements. So what does that mean for alternative fuel vehicles and clean transportation? There are a few opportunities…….

Fleets and executive management are being told by their board of directors to take green issues more seriously – that comes through energy efficiency, vehicle emissions, and corporate sustainability campaigns.
Supply-chain relationships are being affected much more by expectations in carbon/GHG emissions reduction, using recyclable materials, and staying compliant to regulatory structures. Those relationships can take different forms – automakers, suppliers, and dealer networks; and transportation companies and their clients’ corporate policies, are two visible trends these days.
Sustainability tends to come from a sense of corporate responsibility and leaving the planet to future generations. As the giant GenY demographic youth group comes of age – and makes for an even larger number of people than Baby Boomers – that’s a message that’s given a lot more weight than 10 years ago.
Consumer surveys are showing a lot more interest in environmental responsibility in what they’re willing to purchase. This market trend has expanded beyond the niches that used to define it. Not long ago, upper income bi-coastal urban residents were buying hybrids and electric vehicles; but that’s started to change in the past couple of years.

As you’re putting together marketing and education campaigns for this year, these are important realities to keep in mind. When you view advertising for green vehicles, you’ll nearly always find messages related to reduced carbon emissions, clean air, and freedom from foreign oil imports. That fits well into corporate social responsibility themes.

Big Picture: 2013 was a good year for green machines, Ford powering C-Max Energi concept with solar

Green vehicles saw strong sales numbers in 2013, led mainly by electric vehicles seeing an 84% leap at 96,000 units sold. Plug-in hybrids had slightly higher numbers (49,000) over battery electric (47,600) – but it was a giant leap for pure electrics – 241% over 2012 versus 27% for plug-in hybrid/extended range. Much of that came from the Tesla Model S rolling into 2013 at higher production and sales volumes than the year before – closing the year at 18,800 units sold. The Nissan Leaf also did very well with its price reduction. Leaf sales jumped 130% to 22,610 in 2013 and were up 70% in December. Dropping the base price 18% to $28,800 was smart, as was adding extra cargo room and an on-board charger that’s been cutting charging times in half.

The Chevy Volt did not have its top selling year – 23,094 sold, declining 9.2% in December and 1.6% down for 2013. However, it was the top selling EV for 2013. The Cadillac ELR plug-in hybrid just launched and sold only six units in December. The Chevrolet Spark EV sold 589 units for the year.

The Toyota Prius plug-in was down 5.2% for the year at 12,088 units sold.

Hybrids hit their own sales record – 489,413 units sold last year, a 15.3% increase over 2012. Diesel vehicles are right up there – climbing 10% to 450,000 sold in 2013. Toyota saw 60% of all hybrid sales. Ford said its hybrid sales topped 80,000 this year, nearly triple the 2012 total.

And in other clean transportation news…..

Ford Motor Co. is displaying its C-Max Solar Energi Concept at the 2014 International CES in Las Vegas on January 7-10. It harnesses the power of the sun by using a special concentrator that acts like a magnifying glass, directing intense rays to solar panels on the vehicle roof; a day’s worth of sunlight can deliver as much power as the conventional C-Max Energi plug-in hybrid, which powers its electric motor through its battery. Using solar power in a C-Max Energi could reduce annual greenhouse gas emissions generated by typical drivers by four metric tons.
Feedback from early adopters has been utilized by BMW and other electric vehicle makers more than other product lines typically do. Tom Moloughney, an owner of an Italian restaurant in Montclair, N.J., has participated in BMW’s test program, first driving the Mini E and then the BMW ActiveE more than 130,000 miles altogether. Moloughney and other EV drivers have earned the title “electronauts” from BMW. One of his suggestions was adding an optional eco mode to the BMW i3; it now has the Eco and Eco-Plus modes, which minimize electrical use except for the drivetrain. He also emphasized offering a more robust quicker charging system with high wattage.
CleanFUEL USA has gained a top safety standard listing for publicly accessible and payment card compliant propane autogas refueling stations. The company has taken additional steps to meet the most rigorous standards for propane autogas refueling by gaining Underwriters Laboratories (UL) listing for the Gilbarco Encore S liquefied petroleum gas (LPG) retail fuel dispenser. The dispenser also holds National Conference on Weights and Measures (NCWM) approval. It’s typically installed at retail settings with public access and controlled clientele, and features full retail capabilities for Payment Card Industry (PCI) compliance. The fueling dispenser is also available as a single or dual-sided unit. While the dispenser is typically used in retail settings, it can be designed for a wide variety of fleets.
If Chinese investor Hybrid Technology LLC completes its acquisition offer on Fisker Automotive in US bankruptcy court, the Fisker factory could be shut down. Court papers indicated that it plans on buying and then reselling the shuttered Wilmington factory. It could be the same thing if Wanxiang closes its deal – that company has indicated it’s not interested in starting up production again at the plant. (See the next article on US and Chinese competition for more on the Fisker acquisition.)
Speaking of electric vehicle factories – Tesla Motors’ Fremont, Calif.-plant could become unionized. The United Auto Workers (UAW) has been in talks with Tesla CEO Elon Musk and other company executives. The union has set up an organizing committee at the Fremont, Calif., plant, which used to be the NUMMI plant that was run by Toyota and GM. There are about 2,000 workers at the Tesla plant in Silicon Valley. While Detroit area workers are unionized, it’s been very hard for the union to reach foreign “transplant” factories in the south; and the UAW has been viewing the Tesla possibility for nearly four years.
Mitsubishi has delayed the US launch of its Outlander plug-in hybrid until 2015 because of bottlenecks in battery production. The electrified crossover utility vehicle won’t be able to be launched this year as planned. The problem has been tight capacity at its main battery supplier, Lithium Energy Japan; that company is a joint venture between Mitsubishi Motors, battery maker GS Yuasa Corp. and trading house Mitsubishi Corp.
EVs sold in Europe are undergoing the noise factor scrutiny similar to what’s happening in the US. Regulators have safety concerns about pedestrians, especially those with limited vision, who may not hear the silent EV approaching. Daimler is adding artificial sound to its Mercedes-Benz EVs as the European Union fine tunes regulations.
Along with its readers, Consumer Reports’ editors are still in love with the Tesla Model S. After a year’s worth and 11,380 miles of driving, the magazine gave kudos to the Model S for several pluses, including its “rocket-like launch feel” and well-appointed interior.
As the biofuel and ethanol/E15 battle continues, more outrage has been sparked by the Corn Ethanol Mandate Elimination Act of 2013. The bill, sponsored by Senators Dianne Feinstein (D-CA) and Tom Coburn (R-OK), has been introduced to curb corn ethanol use and production. It would eliminate the corn ethanol mandate within the Renewable Fuel Standard (RFS), which would be even more severe than the US Environmental Protection Agency’s proposed revision on implementing the RFS and cutting back on the mandated use of ethanol as a gasoline blend.
Quantum Fuel Systems Technologies Worldwide, Inc. just received approval from the United Nations to sell its product to UN countries around the world. The UN, as part of its ECE Regulation No. 110, has allowed for Quantum’s Type-IV Q-Lite CNG tank technology to be sold. The company says this will allow it to bring its “highly successful large diameter CNG tank technology to Europe and Asia and will enable European and Asian trucking firms to realize substantial operating cost reductions that many US fleets have demonstrated through the use of CNG as a transportation fuel.”

Who will win electric vehicle race – the US or China?

The future of Fisker Automotive might be viewed as a symbolic tale of where economic alliances – and competition – now stand between the US and China. Two Chinese investors are vying to take over the troubled US maker of the luxury, extended range Fisker Karma. A courtroom showdown will take place on January 10 where US Bankruptcy Court Judge Kevin Gross will likely decide whether investor Richard Li and Hybrid Tech Holdings LLC can close the deal with its proposed $25 million; or whether Wanxiang Group, a major Chinese auto parts company and new owner of the A123 Systems lithium battery company, should win the deal with its recently filed $24.725 million bid with assumption of some of Fisker’s liabilities. Either bid from these Chinese investors is much less than what Fisker has owed the US Department of Energy (DOE) for its original loan; but the federal government would like to wash its hands of it.

This symbolic tale goes back a few years – nearly five – and the story is much bigger than what’s taking place with Fisker. Starting in 2009, the Obama administration made available $2 billion in direct stimulus grants through the DOE and an additional $400 million for its ARPA-E funding program. The Chinese government has been offering about $16 billion in vehicle subsidies, R&D, and infrastructure spending for clean automotive technology. Lithium ion batteries and electric vehicles have been at the heart of these government investments.

The Obama administration policies came out of the collapse of the auto industry in Detroit and devastation of financial markets; China’s motives comes from its goal of dealing with thick air pollution in rapidly expanding cities and reducing its dependence on foreign oil. President Obama’s lofty goal of putting one million electric vehicles (EVs) on American roads by 2015 set off a race; Chinese officials said their country would do the same (which the Chinese government calls “new energy vehicles”). Overall, its goal has been even loftier – the government would like to see five million alternative energy vehicles on its roads by 2020.

While the actual EV sales figures in either country are highly unlikely to meet the million unit EV mark within the next two years, the race is still being run. Cultivating EV sales through government incentives and federal fleet acquisitions – and through capital investors with mergers and acquisitions – continues to be of high importance in the US and China, even though some of the government investments have failed.

China has been extremely important for global automakers and investors to see growth, especially as the European auto market has been shrinking. EVs have been a big part of that strategy and China has been the top selling market for overall new vehicle sales for a few years. The investments have been impressive:

An electric version of the Saab 9-3 is critical for Saab a year out of its bankruptcy proceedings; Saab’s new owner, National Electric Vehicle Sweden, is targeting its home market of China.
Tesla Motors has been working hard to get its website domain name back in China; for now, Tesla is using the “Tousule” name for its website since the “Tesla.cn” domain was registered to a Chinese company in 2006. The website is taking pre-orders and reservation fees for the Model S and the upcoming Model X electric crossover model. Tesla is planning on beginning deliveries to China of the Model S in the first quarter of 2014. That website follows the recent opening of a Tesla Motors showroom in Beijing.
Ford will pursue the production and sale of hybrids and EVs in China. The global automaker will build more factories and expand in that growing market. Ford CEO Alan Mulally made the announcement during a television interview in China.
Warren Buffett and his Berkshire Hathaway firm have made a sizable investment in Chinese automaker BYD – and EVs play a big part of the gamble. The company plans to introduce four models for its US debut by the end of 2015. Its new Qin plug-in hybrid model will likely be the flagship model introduced in the US.
Geely Holding Group took over Volvo Cars from Ford in 2010 and joint EV projects play a role in that alliance – such as the Volvo C30 Electric and Geely’s Kandi brand offerings.
Last month, actor Leonardo DiCaprio announced he’s forming a team to participate in a new EV racing circuit that will launch its inaugural season in Beijing next September. There’s a lot of hope that enthusiasm for owning EVs will come from it; in 2012, there were only 11,000 EVs sold in China.

China’s air pollution problem is an example of the market opportunities that clean transportation has to offer. Beijing will be replacing its petroleum-powered buses with new models powered by electricity or natural gas by 2017. The Chinese government is looking at other possible solutions for reducing tailpipe emissions from its fast-growing pool of vehicles on its crowded roads. Gaining these contracts is very appealing to US investors, and to companies all over the world.

EVs – and other alternative fuel vehicles and cleantech ventures – play a significant role in the future of the US economy, according to the Obama administration and several other entities. China will continue to be a focal point for the US economy. These market dynamics have been taking on the form of both competition and cooperation. Trade agreements between the US and China have been a sore spot, but business deals continue to be made. As several economists and visionaries have been saying for a few years, the future of global economics is leaning toward cooperation. There’s not one single nation that has all of the supplies, labor, intellectual property, investment capital, and management leadership to give an industry such as automotive all that it needs to thrive.

Major Middle East oil reserve now home to Masdar renewable energy experiment

Abu Dhabi is home to the world’s fifth largest proven oil reserves and the sixth largest natural gas reserves. It’s also the home of what many consider to be the most significant renewable energy experiment in the world with its Masdar project. The Abu Dhabi government is investing $15 billion in Masdar’s university and its role as a renewable energy developer, investment arm, and cleantech center. Later this month, it will be hosting the seventh annual World Future Energy Summit; the summit promotes innovation, global collaboration and investment opportunities in renewable energy and clean technology.

The United Arab Emirates (UAR) and its capital city, Abu Dhabi, sit on the Persian Gulf next to neighbors Oman and Saudi Arabia. The Emirate of Abu Dhabi has enough hydrocarbon reserves to last beyond 100 years. Through Masdar (also called Masdar City), Abu Dhabi seeks to send the message that it’s a responsible oil producer that can help create a balance between hydrocarbons and renewable energy in addressing both climate change and energy security. While UAR is a member of OPEC, Masdar seems to be an attempt to break out of the assumptions made about the Middle East in other parts of the world; one of them being that oil completely dominates its politics and economics.

Masdar is a strategic government initiative – and a subsidiary of the UAR’s Mubadala Development Company – that was started up in 2006. Masdar will highlight its new solar and wind projects in the UAE, United Kingdom, Seychelles, and Mauritania at the World Future Energy Summit later this month. The company said it has installed more than 750 megawatts of renewable grid capacity in the past year. Along with other partners, Masdar has run the world’s largest off-shore wind farm, the world’s largest concentrated solar power plant, Africa’s largest solar PV plant, and has brought utility scale renewables to the Seychelles.

Masdar runs three integrated business units complemented by a graduate-level research university with the Massachusetts Institute of Technology (MIT). The MIT and Masdar Institute Cooperative Program is an ongoing collaborative program with Abu Dhabi to provide advice and guidance in the establishment of a graduate research university focused on alternative energy, sustainability, and advanced technology.

Transportation in Masdar takes place on foot or through electric vehicles (EVs). Personal Rapid Transit EVs are available at a parking station at the university. The four-passenger driverless pod vehicles are guided by a computer that charts direction tied into tiny magnets embedded in the road.

Masdar City is hosting the Middle East’s first fast charging EV station in collaboration with Mitsubishi Heavy Industries Ltd. The pilot project uses the CHAdeMO-certified Rapid Charger and aims to assess how efficiently the rapid charger technology will function in the region’s harsh climatic conditions. It offers an 80% charge in 30 minutes.

An EV pilot project launched was launched in mid-January 2011 and runs a fleet of 12 Mitsubishi i-MiEV electric cars. The test project has worked on addressing users’ concerns on battery life and dealing with skepticism about the EVs’ inability to withstand desert heat. They’re the first battery electric vehicles deployed into the UAE.

Big Picture: So much for a quiet holiday, Class action settlement on inflated MPG

I was hoping to have more downtime during the holiday break with news – all quiet on the western front. Well, there was quite a lot worthy of attention. I will boil it down and keep it simple. You can also read the usual media year-end offerings in the next two articles – Top 10 stories from 2013 and predictions for the new year. As for this past week……

Hyundai and Kia are settling a huge number of complaints about posting incorrect, inflated mileage ratings on some of their cars such as the Hyundai Elantra and Kia Soul. Hyundai originally offered to reimburse owners for the higher fuel costs plus a 15% “we’re sorry” bonus. Through settlement of a class-action lawsuit, owners can accept a one-time lump sum payout. That dollar figure still has to be worked out.
Daimler isn’t pulling away from its ownership stake in Tesla Motors even though its share values over the new three years are harder to predict. Tesla stock prices plummeted after battery fires in its Model S. The electric carmaker is supply motors and batteries to Daimler for its Smart Fortwo electric vehicle and the new Mercedes-Benz B-Class (this goes on sale next year). Daimler holds a 4.3% stake in Tesla and wants to expand its role with the company.
Speaking of Tesla, the state of California’s treasurer is giving the company a $34.7 million tax break in a bid to help the company ramp up production. Tesla won’t have to pay sales and use tax on new manufacturing equipment up to $415 million.
Natural gas vehicles had a growth spurt in sales in late 2013 driven by lower fuel costs and the environmental benefits over diesel, according to a Navigant Research study. That trend is expected to continue with a compound annual growth rate of 12.6% for natural gas trucks and 6.4% for natural gas buses between 2013 and 2022. New engines and vehicles are being introduced including a 12-liter engine form Cummins Westport next year. That will be targeted at the day cab market.
The 2014 Lincoln MKX will be lighter and more eco-friendly using tree-harvested natural fibers in place of traditional glass-based fibers. The tree-based, renewable alternative to fiberglass for use in auto parts comes from a collaboration between Lincoln, Weyerhaeuser, and Johnson Controls. Using cellulose reinforced polypropylene instead of fiberglass materials makes those materials about 6% lighter and decreases reliance on less-environmentally friendly fiberglass parts.
Saab is a year out of bankruptcy and is depending on an electric version of its Saab 9-3. Saab’s new owner, National Electric Vehicle Sweden, is targeting its home market of China, where the government is promoting clean automotive technology with up $16 billion in vehicle subsidies, R&D, and infrastructure spending.
Michigan Governor Rick Snyder signed legislation allowing driverless cars to be tested on the state’s roadways. Michigan just joined Nevada, California, and Florida as the only states allowing such on-road testing.
Ever hear of Zenn Motor Co.? The Canada-based neighborhood EV company now has an agreement to buy a majority stake in energy-storage company and distribution partner EEStor. This is reminiscent of Coda Automotive leaving the EV business and moving into the rapidly expanding power storage market.

Top 10 alternative fuel vehicle/clean transportation occurrences of 2013

1. Tesla-Mania (and why I called it that):
The list could go on and on about Tesla Motors during 2013 – state battles with auto dealership associations; battery fires and the NHTSA recall; stock price roller coaster; CEO Elon Musk’s Hyperloop concept; and Supercharger fast charging stations come to mind. It’s rare to go more than a week without reading a Tesla article in the industry’s bible, Automotive News – along with several other major news sources. Automotive News is centered around its auto dealer readership, who generally would like to see Tesla go away. The news has got to be big and attention worthy to get as much ink/gigabyte as it has in Automotive News in the past year. That’s where my “Tesla-Mania” headline buzzword came from. There’s been a bit of media frenzy. Another fascinating element while following Tesla is that the company does not utilize the traditional media strategy – a large media/PR department or outsourcing it to one of the majors. They do it themselves and keep it low budget – but are using everything that needs to be done these days – Twitter postings and emails from Musk; strong press releases; attractive showrooms, and well-promoted events like ride and drives or Supercharger rollouts. Making a very impressive car like the Model S (have you ever driven it?) really helps with the storytelling, as well.

2. Volvo and Mack Trucks bringing DME to America:
Ever hear of dimethyl ether (DME), a non-toxic, clean-burning alternative fuel? It comes from a variety of domestic, sustainable sources such as biogas from food and animal waste, wastewater treatment facilities, and landfills. Back in June, Volvo Trucks introduced this option with fuel supplier Oberon Fuels in Sacramento, Calif., for rollout in 2015. Mack Trucks announced soon after that it’s following corporate parent Volvo and will be rolling out big trucks with a 13-liter MP8 engine that can be powered by DME in that same year. DME has been on the market for years as an aerosol propellant in cosmetics and other household products. Its potential is huge – it has the performance qualities and energy efficiency of diesel but can lower CO2 emissions by 95% compared to diesel. It produces no soot, and the fuel is stored in lighter, simpler fuel tanks and lower psi systems than what’s needed for LNG and CNG systems. Volvo Trucks is still committed to CNG and LNG offerings as well – its lineup already includes CNG-powered Volvo VNM and VNL model daycabs. The company is also producing its own proprietary LNG engine in VNL daycabs and sleepers next year.

3. Natural gas as a vital domestic power source:
Natural gas had a very good year in the US – fueling more electricity power stations than before, moving coal farther down the supply chain. There’s been modest growth in CNG and LNG vehicle sales – some of it through vehicle conversions and more OEM offerings like the Ford F-150 CNG option introduced this year. Fueling stations have seen a good deal of growth this year as Clean Energy and a few other infrastructure builders announce more openings, and fleets add in more onsite refueling stations. The vehicle conversion cost is a factor, but the payoff is happening within two-to-three years; fleets acquiring NGVs make an effective business case with upper management that fuel cost savings, emissions reductions, and supporting a domestic industry is a win-win-win.

4. Warfare over the Renewable Fuel Standard and E15:
When the Renewable Fuel Standard was adopted in Washington in 2005 (and expanded in 2007), it made a whole lot of sense. The Bush administration was concerned about our reliance on foreign oil as we waged war in the Middle East, and legislators on both sides of the aisles could agree. Corn-based ethanol was the mainstay and was supported as a clean, domestic fuel that could pave the way toward advanced biofuels like cellulosic and algae. The “Detroit 3” automakers began rolling out flex-fuel vehicles capable of running on E85. That movement faded in the midst of the “food versus fuel” debate which started up in 2008, and was followed by attacks on the prospect of E15 becoming standard at US gas stations. Some of that fight came from “big oil” companies and some from automakers concerned about the long-term reliability of engines that might not handle E15 very well. The EPA’s decision to scale back its ethanol blending mandate in late 2013 was harsh for the biofuel community to hear.

5. Hydrogen fuel cell vehicles aren’t going away:
The running joke in the car biz about hydrogen fuel cell vehicles is that they’re a great idea but they’re still a long ways away. And we’ve been hearing that for years. Well, this year witnessed a few impressive developments. Early this year, Ford and Daimler added Nissan to its fuel-cell alliance to share costs and brainpower on the development of a common fuel-cell stack and other systems by 2017. General Motors and Honda announced a partnership to make a common hydrogen powertrain by 2020. In other news, Hyundai, Mercedes-Benz, Nissan, and Toyota joined up with the US Dept. of Energy’s H2USA project. The formation of the public-private partnership is centered on building a hydrogen fueling infrastructure. As for auto conventions, this year’s LA Auto Show gave fuel cell vehicles a lot of attention. Hyundai showed off a fuel cell version of its Tucson sport-utility vehicle. Honda unveiled its FCEV, its next-generation fuel cell vehicle. During that same time Toyota showed its FCV (fuel cell vehicle) concept at the Tokyo Motor Show. Toyota said that it’s a “practical concept” of the fuel cell vehicle it plans to launch in 2015;

And then there’s 6-10:

6. Ford and Hyundai-Kia MPG claims: Hyundai and Kia have taken a different approach than Ford on its hybrids, as was covered in the Big Picture article this week.

7. Plug-in EV sales: Take a look at the impressive chart showcased by Electric Drive Transportation Association. It was a big year for battery electric and plug-in hybrid sales.

8. Fisker and other auto greentech failures – Fisker, Envia, A123, Coda, and ECOtality –these plug-in EV, battery, and charging station makers looked so promising a few years ago, but 2013 was a year of bankruptcies and bad news.

9. Propane autogas moves forward – The fueling station unveilings and vehicle offerings have been very good in 2013. School buses converting over to propane were a part of that trend.

10. Renewable natural gas –There’s been a lot more going on in the background than Clean Energy’s Redeem announcement. If you want to be very impressed with how much is also being done on this front, check out the webinar, “Securing California’s Clean Energy Future with Renewable Natural Gas.”

I Betcha: My take on clean transportation trends to watch in 2014

Luxury extended range cars: Extended range, plug-in hybrids will see their next luxury models hit the market next year. The Fisker Karma was the first one, but those sporty luxury cars have been out of production for quite a while now. The two models to watch in 2014 will be the Cadillac ELR and the BMW i8. The 2015 Cadillac ELR will start showing up in January at dealer lots and will start at $75,955. The 2014 BMW i8 will go for $135,625, including a $925 destination charge, when it shows up in the US during the spring season. They’ll be competing with the Tesla Model S, BMW i3, and later in the year, Tesla Model X crossover, all of which are battery electric vehicles. The extended range models are pricy even after federal tax credits and state incentives but offer the benefit Fisker has been selling – reduced range anxiety. Their production volumes will be limited, but GM and BMW have a lot of experience in successfully making and marketing luxury models.

Pricing: MSRP pricing for electric vehicles dropped in the first half of 2013 to the extent that the “price war” label could be applied for the first time. I would expect to see more of that happen including the cost of buying a Level 2 charger and having it installed in your garage. Multi-unit Level 2 chargers installed in parking garages, condos, and workplaces, are becoming a little bit more cost competitive, too. Converting business vehicles over to natural gas or propane may take a while to see a significant price drop – it’s still small in transaction numbers. Perhaps seeing more pickup trucks from the Big 3 with those alternative fuel options will push the cost down in a more competitive marketplace.

Connectivity: Seamless and simple connectivity between the smartphone and dashboard is expected by car owners today and has huge potential for improving the driving experience – such as not getting lost and making the trip more fuel efficient. It also has a lot to do with finding the right charging stations and alternative fuel spots – ones that actually work and will accept your payment method.

Responding to a crisis as an opportunity: Check out this blog post by Roger Lanctot, associate director, automotive practice, at Strategy Analytics. He makes the point that Tesla’s software update after its Model S battery fires tells a story about the issues automakers are facing on responding to customer perceptions and working with their dealer networks. Tesla was able to announce a software update to raise the speed at which the car automatically lowers itself by an inch for better aerodynamics. Other automakers, including Chrysler and Toyota, can provide their customers with software updates via smartphones for app updates and installation. This has happened despite dealer resistance. Lanctot, who led a speaker panel in November at Connected Car Expo, makes the point that GM (and OnStar) and other OEMs could do well to learn something from Tesla’s solution for software updates and the marketing points the automaker can score (and, I would say, customer retention). I would also say that turning problems into opportunities is there for every clean transportation technology – finding enough alternative fueling and charging stations, lithium battery durability, range anxiety concerns, dependability of the engine while using the alternative fuel, bringing a new fuel or powertrain into the fleet, and justifying the investment.

Lightweighting: For automakers in the US and Europe to meet ambitious government mandates on fuel efficiency and carbon emissions, ligthweighting the vehicles is being tried out – bringing in more magnesium alloys (BMW), aluminum (Ford in the next F-150 pickup), and using more plastics (every OEM) being clear examples. The biggest concern has been safety – metal might be heavier than its alternative, but it’s more likely to retain its structure during a collision or once the vehicle is weighted down with a lot of cargo. Government safety standards are more stringent these days, but there needs to be more confidence in the testing procedures.

Infrastructure: It’s the classic quandary in clean transportation. Will people really buy enough of these green vehicles to turn a profit? Is there enough alternative fueling and charging infrastructure to alleviate their range anxiety? The numbers are getting better (as readers of the monthly Green Auto Market Extended Edition can confirm – where stats on charging and fueling stations are reported each month). One of the ways this is seeing improvement is through local market alliances, many times organized by Clean Cities coordinators. Infrastructure suppliers play a key role, too. In this Green Auto Market interview, Schneider Electric’s Mike Calise talked about an alliance bringing together stakeholders such as employers, a carshare service, Schneider Electric, and Toyota to set up train stations with EV charging, carsharing, and bike stands. The concerns of community stakeholders have to be addressed and integrated within the infrastructure planning to get the necessary buy-in.

A few other points to make. Don’t write off biofuels in the wake of the EPA’s Renewable Fuel Standard decision. Or with concern over the economic viability of the fuel, or whether environmental concerns offset their advantages. Check out Biofuels Digest – you may be astonished at how big advanced biofuels are becoming as an industry and what investors think about it. A lot of it has been going on outside of transportation, but that’s starting to change. Carsharing and van pooling are starting to take off in the US – Zipcar, City CarShare, Enterprise CarShare, Hertz 24/7, and Car2go (a Daimler subsidiary) are expanding in several markets, and I’m starting to see a lot more van pooling services out on the roads. Fleet managers are extremely important stakeholders and decision makers to follow. Pay attention to what Claude Masters, NAFA’s president, is up to including organizing workshops with CALSTART. Fleet management companies (such as ARI, PHH Arval, GE Capital Fleet Services, Wheels, Enterprise Fleet Services, and Donlen) are offering fleets more services in sustainability, clean transportation, and alternative fuel vehicles.

Big Picture: Update on the latest Tesla fire, Prius is best deal out there says Consumer Reports

The fourth fire involving a Tesla Model S that happened during the fall – on November 15 in Irvine, Calif. – wasn’t another battery fire. “Our inspection of the car and the battery made clear that neither were the source” of the fire, Tesla said in a statement that cited the report by the Orange County Fire Authority. The OFCA is done with its investigation and is leaving it up to Tesla and insurance companies to figure out what caused it.

Outgoing GM CEO Dan Akerson had some critical things to say at a media conference last week about what Tesla’s going through with its battery fires; he compared it to be battery fire in the test lab incident with the Volt that happened in late 2011 and basically boasted about all the proactive responses that GM carried out instead of standing off to the sidelines.

Ohio dealers have sued to block Tesla from selling cars in the state. Tesla had been looking good recently when a proposed amendment to an unrelated bill was dropped. Dealers were hoping to block Tesla from selling in the state. The new lawsuits wants the state to revoke Tesla’s license to sell cars, stating that the automaker hasn’t met all its necessary legal requirements.

Here’s more of the latest news in clean transportation….

The Toyota Prius Liftback topped Consumer Reports’ annual value list for the second straight year. The attractive base price ($24,025), mileage (44 mpg but can be higher depending on how you drive), and resale value gave it the thumbs up. The Honda Fit subcompact, starting at $15,425, scored in second place for the compact/subcompact class.

The CALSTART clean transportation consortium has announced changes to its board of directors. Paul Rivera of consulting firm Ricardo has been appointed to the board of directors. Rivera serves as global director of hybrid and electrical systems for Ricardo. Ricardo recently expanded its business practice in California and is well-positioned to help grow the industry, fulfilling CALSTART’s mission. Puon Penn, senior VP and head of the National Clean Tech & Emerging Tech Markets at Wells Fargo, has become vice chair of CALSTART’s board. Penn is stepping in for the former vice chair, Jane Warner of American Lung Association in California, who passed away in September. Mike Britt, Director of Maintenance and Engineering for UPS, is now secretary of the board.

Hyundai pitching its fuel cell car

“Today, right here, the hydrogen fuel cell vehicle is making the shift from a research project to a real consumer choice,” says Hyundai Motor America president and CEO John Krafcik. See how the automaker is promoting its new Tucson Fuel Cell model in this new video, which it calls “The Next Generation Electric Vehicle.”

SAE adopting natural gas vehicle standards

At the Society of Automotive Engineers 2013 Commercial Vehicle Engineering Congress, held in October in Rosemont, Ill., industry participants in a Blue Ribbon Panel on natural gas were unanimous that standards will help the industry to quicker embrace the natural gas based technologies. In response to the heavy-duty trucking industry need, SAE International Truck and Bus Council launched an effort to establish relevant SAE standards. “The use of natural gas as a transportation fuel is extremely important,” said Ron Eickelman, President, Agility Fuel Systems. “All indicators point to increase in the number of vehicles fueled by natural gas. To achieve universal levels of safety, reliability, and performance, there is no question that codes and improved standards are needed now!”

Hydrogen stocks have been up quite a lot this year – an average of 131% for the market. Hydrogen fuel cell and hydrogen system company stocks have performed well. Plug Power, which makes hydrogen fuel cell systems for off-road vehicles is up 122% this year. Ballard Power Systems, a maker of hydrogen fuel cell systems for a number of industries, is up 133% this year. Quantum Fuel Systems Technologies Worldwide, a maker of fuel systems and drivetrain components for NGVs, EVs, and hydrogen FCVs, has gone up 146% and 261% from its low in April. Small investors have been the main buyers of hydrogen stock. Institutional owners have keep their stake fairly small.

Navigant Research forecasts that Japan and the US will be the largest markets for hybrids, with sales reaching just over one million and 1.1 million in 2022, respectively. The US will remain the largest market for plug-in electric vehicles with more than 467,000 sales in 2022. A significant majority of the EV sales will be plug-in hybrid electric vehicles.