electric vehicles Archives

Plug-in Electric Vehicle Sales Growth – from U.S. to China

There continues to be a symbiotic relationship between the U.S. and China in plug-in electric vehicle manufacturing, sales, and technology development. Government subsidies are helping bring sales up, as are introductions of new models that are gaining more interest from consumers in both China and the U.S. More EVs are coming in the near future, and in more type classes, including a minivan and crossover SUVs in the U.S. market and diverse offerings in China. The Beijing Motor Show in April and May showed off an intriguing lineup of new EVs rolling out from BYD, Changjiang, Dongfeng, Brilliance, Beijing Auto, Changfeng, JAC, and others. The symbiotic relationship comes from alliances between global automakers and Chinese companies for EVs to be sold in China and eventually in other markets; and between the Chinese and American governments pushing for clean technologies and emissions reductions. There’s also a list of manufacturers and suppliers based in the U.S. that are building electric cars and technologies that will be shipped overseas and sold in China.

EV sales in China and the U.S.: China is number one in global EV sales, with the U.S. following and Europe seeing growth as a region. Deliveries of “new-energy vehicles” surged in China by 126% to 86,374 units in the five months through May, according to China Passenger Car Association. BYD Co.’s Tang SUV was the best seller in the plug-in hybrid category, while BAIC Motor Corp.’s BAIC E series was top-selling electric vehicle in the January-May period. The Chinese auto market had more than 26,000 new EVs sold in May, a 119% increase over the same month last year, The U.S. saw a very strong EV sales month in June with 7,678 battery electric vehicles and 6,094 plug-in hybrids for a total of 13,772 EVs sold. The previous U.S. record was in December 2015, when 13,274 were sold.

BYD leads the way in China: Altogether, BYD sold a total of 61,722 plug-in electric vehicles last year, with nearly all of them being sold in China. That was more EVs than Tesla, Nissan, or General Motors sold last year individually. BYD only sells plug-in electric vehicles, both battery electric and plug-in hybrid. Warren Buffet’s Berkshire Hathaway owns about a 10% stake in the Chinese company. According to year-end figures released by the company, it delivered 31,898 of the newer Qin plug-in hybrids and 18,375 Tang PHEVs, along with 7,029 of the older all-electric e6 battery electric models, during 2015. For the first five months of 2016 (as illustrated in the chart below), the BYD Tang has been the top seller in China at 15,615 units sold. The company also sold 2,888 Denza compact hatchback plug-ins last year, which were built by its joint venture with Daimler.

Top Selling Plug-in Electric Vehicles in China – May 2016

May 2016 YTD 2016

BYD Tang 3,249 15,615

BYD Qin 2,912 7,334

Kandi K11 Panda EV 2,598 3,127

SAIC Rowe 550 PHEV / e550 2,198 6,382

BAIC E-Series EV 1,714 8,712

BYD e6 1,683 7,579

JMC E100 1,300 4,527

Chery EQ 1,269 4,384

BYD e5 1,172 2,676

JAC i EV 4/5 1,076 6,513

Role major Chinese automakers are playing: As mentioned, joint ventures such as Denza are playing a role in EV sales in China. Major Chinese automakers have their share of JVs with global automakers from the U.S., Europe, Japan, and South Korea. They’re contributing to EV sales through these partnerships and are backed by generous government incentives. If you view the Top 10 sales ranking above, you’ll notice that some of the top 10 Chinese automakers in overall vehicles sales are making inroads to EV sales. SAIC was number one in Chinese new vehicle sales last year; BAIC was number five; Chery was number nine, and the company includes the JAC brands in its lineup.

Electric-only brands: Kandi is another electric-only brand in China, along with BYD, seeing strong results in the top selling EVs. The Kandi K11 Panda EV is being manufactured through a joint venture with Chinese automaker Geely. Geely International Corp. was the number 10 selling automaker in Chinese new vehicle sales last year.

Tesla just starting in China: Tesla Motors sold 300 Model S units in May 2016, and 1,811 overall in 2016 through the end of May. It was number 19 on the top 20 plug-in electric vehicles sold in May 2016 in China – compared to No. 1 in U.S. plug-in sales during June 2016. Tesla has been investing heavily in major cities in China with retail stores and Supercharger installations.

U.S.-Based OEMs and Suppliers with Electric Drive Technologies and Chinese Investors: One of the more fascinating trends in the China-U.S. alliance in EV development has been the role that Chinese investors have played in sometimes saving U.S.-based companies. The former Fisker Automotive (now Karma Automotive) is now owned, along with lithium battery maker A123 systems, by major auto parts supplier Wanxiang Group. Here’s a list of these U.S.-based companies in EV technologies that will be interesting to watch in coming years:

Faraday Future
Karma Automotive
A123 Systems
Wheego Electric Cars
Smith Electric Vehicles
Protean Electric
GreenTech Automotive
BYD (U.S. office) offering electric buses in North America.
Zap Jonway

SAIC partners with Disney: Chinese automaker SAIC is providing EVs for hourly rentals to Shanghai Disney Resort customers. SAIC will also provide a fleet of electric vans for shuttle service to the amusement park. SAIC currently operates a car-sharing service with 100 electric cars, as well as 100 electric buses that ferry tourists from nearby train stations, subway stations, and airports to the Disney resort.

Hyundai competing in Chinese market: As part of its initiative to roll out several hybrid, plug-in, and hydrogen fuel cell models, Hyundai Motor Co. says it will be going full-speed ahead in its electrified vehicle rollout to increase range and compete with upstart Chinese rivals. Hyundai has found out how extensive the EV market is becoming in China with foreign OEM alliances and small Chinese startups. Several global automakers are selling EVs in China, and must use electrical drivetrain components developed with a local Chinese supplier. The national rule has made Chinese suppliers more technologically savvy in key items such as motors and electrical control units, according to Hyundai.

This Week’s Top 10: Nissan Leaf joining 200 mile EV club, EV incentives put on hold in California

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…….

Nissan Leaf will go over 200: The next-generation Nissan Leaf will be able to travel more than 200 miles per charge from its 60-kWh battery, said Kazuo Yajima, Nissan’s global director of EV and HEV engineering. Yajima spoke to AutoblogGreen at the Electric Vehicle Symposium (EVS29) in Montreal. It’s coming, but he couldn’t say when. Yajima said the 60-kWh pack will more drive the car 210-220 miles per charge, which is more than double the range from the current Leaf’s 24 kWh battery. Nissan had placed the 60-kWh pack in the IDS concept car revealed last November. Watch AutoblogGreen’s Sebastian Blanco doing a video report on what it’s like this week in the expo hall at EVS29. You can hear Yajima talk about Nissan’s new battery pack during the video.
EV incentives on hold in California: The California legislature has passed a new budget, awaiting Governor Jerry Brown’s signature, which cuts off funds for the state’s clean vehicle subsidies. EV advocates are waiting to see if a compromise will be made before the governor signs the bill, or if a new measure will be introduced. If the governor does sign this bill, subsidies will be cut including consumer rebates for electrified vehicles, “environmentally friendly” heavy trucks, and other clean vehicle programs. Car buyers seeking incentive funds are on a waiting list for now. A Los Angeles Times article says it may have to do with how the state is spending funds generated by its cap-and-trade program. California’s cap-and-trade auction credit system requires businesses like oil refineries and manufacturers to buy permits based on how much they pollute. The governor may be holding onto the funds to get lawmakers to reach a deal this summer on extending the life of the cap-and-trade program. That state program is facing legal questions over whether it can keep operating past 2020.
SCAQMD webinar on $50M funding: Join the South Coast Air Quality Management District (SCAQMD) for a complimentary one-hour webinar to learn about the $50 million in California’s new Proposition 1B funding for: heavy-duty truck replacements; truck stop electrification; electric charging stations; hydrogen fueling stations, and other topics. With this free webinar, SCAQMD is aiming to ensure all the relevant fleets that operate Class 6, 7 or 8 trucks are well aware of the funding that could be available to them. The program is presented by Vicki White, Program Supervisor, SCAQMD. It will take place Thursday, June 23, at 2:00 p.m. PDT. Click here to register.
Attacking Uber’s surge pricing: Gett is taking swipes at competitor Uber in a New York City ad campaign aimed at resentments over surge pricing. The campaign targets Uber’s surge pricing, which takes hold when rider demand is high. Gett, an on-demand black-car app that’s available in more than 60 cities worldwide, is placing its ads on 570 subway cars, phone kiosks, digital street-level billboards, and bus shelters around the city. Gett, which received a $300 million strategic investment from Volkswagen Group last month, is tapping into riders’ annoyance with having their fares increased 1.5 times the usual fare – and sometimes up to two or three times the fare. Gett emphasizes that it doesn’t have surge pricing in the ads.
EVgo brings in new investor: Charging networking supplier EVgo, which was started years ago by electric utility NRG Energy, has become an independent company. Vision Ridge Partners, a climate action-oriented investment firm, has closed on its major investment in EVgo. This move supports EVgo’s mission of expanding its charging network, including its commitment to deploying public fast charging stations. EVgo has worked closely with automakers like Nissan, BMW, and Ford to develop a vehicle-centric customer experience. EVgo operates 665 fast chargers in more than 50 top metro markets across the country.
New EV telematics service: FleetCarma, a provider of telematics systems for electric vehicles, announced at EVS29 the launch of a new product for fleets seeking to increase the number of electric vehicles they operate. Fleets connecting the new telematics device, named the C2, to gasoline, diesel, and hybrid vehicles in their fleet receive the immediate benefits of standard telematics, while the system also uses the operational data to identify optimal vehicles for replacement with electric vehicles. The single telematics system provides immediate telematics benefits on the gasoline and diesel vehicles while providing the long term benefits of optimized electric vehicle deployment.
Didi investment grows: Didi Chuxing Technology Co., China’s leading ridesharing company and Uber competitor, has raised $7.3 billion in its latest fundraising effort, giving it a host of powerful allies including Apple Inc., to establish its strong market presence. A recent funding round attracted Apple’s recent $1 billion investment, China Life Insurance Co., and the financial affiliate of online shopping firm Alibaba Group Holding Ltd. The round valued the company at nearly $28 billion, people familiar with the matter said.
CEC grant: The California Energy Commission has approved $13.5 million to showcase low- and zero-emission vehicles at two of the state’s busiest seaports, to identify and install electric vehicle charging sites at California’s national parks, and to complete hydrogen refueling station evaluations. Project funds are from the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP). According to the CEC, the ARFVTP has invested more than $606 million to date and funded more than 543 clean transportation projects.
Uber and Hyundai alliance: Uber wants to partner with Hyundai on the development of self-driving technology in the automaker’s home country, according to Maeil Business News Korea. Uber is also poised to place an order for a huge number of Hyundai vehicles. In April, automakers Ford and Volvo, ride-sharing rivals Lyft and Uber and tech giant Google joined forces to form the Self-Driving Coalition for Safer Streets.
NASA electric planes: NASA has unveiled plans to spend the next decade working on electric planes under the ‘X-57’ moniker. One plane will be based on the Italian Tecnam P2006T, a very efficient 4 seat light aircraft. Its smaller 12 motors will only be used for takeoffs. The larger two engines on the end of the wings will propel the plane during cruising which is expected to be a solid 175 mph.

German automakers lay out electrified vehicle strategy, and what’s behind it

Electric cars charging in German Volkswagen Group just made a commitment to change its business strategy in the wake of the diesel emissions scandal that started last September. The German automaker will be introducing more than “30 new pure electric vehicles” by 2025, while also establishing a mobility solutions division. Two other German automakers are heading down a similar path. Daimler will be introducing a long-range electric vehicle this fall at the Paris auto show, but it’s just the tip of the iceberg for its electrification strategy, according to Mercedes-Benz USA’s chief executive. BMW will be adding to the i Series with the “i Next” as the automaker combines autonomous mobility with electrification in the BMW and Mini brands.

Here’s a look at each company’s upcoming product launches and what’s behind all of it……….

VW’s STrategy: On Thursday, Volkswagen Group CEO Matthias Mueller laid out the company’s long-awaited “STrategy 2025″ at a press briefing in Wolfsburg. These 30 new EVs are expected to account for up to one-quarter of its sales – two to three million pure-electric cars a year by 2025. VW’s $300 million investment last month in ride-hailing app Gett was part of something much larger. The company says that its plans to establish a mobility solutions division that will develop its own services as well as acquiring businesses in areas such as ride-hailing, robo-taxis, and carsharing.
Daimler’s long-range EV and long-range strategy: Mercedes-Benz will display a prototype of an electric-powered Mercedes car with a 310-mile range in October at the Paris motor show, development chief Thomas Weber recently said. Mercedes-Benz USA CEO Dietmar Exler just told Automotive News that the long-range EV to be introduced at the Paris show is just the tip of the iceberg for the brand’s electrification strategy. It will be way more than one EV, he said, and the company plans to sell more than 100,000 electric cars a year by the end of the decade. The electric car launch will compete with Tesla for leadership in luxury EVs. Weber said Daimler would launch its fourth-generation electric Smart car at year end in two- and four-seat variants. Daimler currently offers two all-electric cars as Smart and B-class models, and several plug-in hybrid variations. More hybrid models are in the pipeline, the company says.
BMW focusing on urban mobility: BMW won’t be launching the next i Series car until 2021, as the German automaker focuses first and foremost on autonomous vehicle technologies. Sales of the i3 and i8 haven’t been strong enough yet, which is likely behind the delay. Called the “i Next,” for now it’s expected to be priced between the i3 and i8, it will be similar in size to the 5-Series, and will probably have its own number. Another factor for changing its focus to mobility from EVs has been BMW investing in recent years in urban mobility test projects and R&D efforts in Europe and North America. Like other automakers, BMW sees electrified vehicles tied intimately into mobile and autonomous cars of the future, as illustrated by plans for its next EV. “The i Next will be our new spearhead for innovation and technology,” said BMW’s sales and marketing chief Ian Robertson. “Planned for 2021, it will offer autonomous driving, digital connectivity, intelligent lightweight design, a totally new interior. And ultimately it will bring the next generation of electro-mobility to the road.”
Facing diesel car emissions disaster: Volkswagen, Opel, Audi, Mercedes-Benz, and Porsche were told they will be recalling 630,000 vehicles to fix diesel emissions management software, a German government official announced in April. Fiat may be pulled into it, with German media reporting on regulators investigating the emissions of a Fiat model equipped with a diesel engine that may be evading emissions tests. The recall number has increased for VW, which gained approval earlier this month from Germany’s KBA motor vehicle authority to recall 800,000 of its diesel cars fitted with emissions cheat software. KBA has approved software fixes on Passat, CC, and Eos models with two-liter diesel en Last week, the company addressed that issue as part of its global strategy. “Volkswagen has always enriched the lives of millions of people all over the world with its brands and products,” VW’s Mueller said. “Our aspiration is to continue that success story and play a leading role in shaping auto-mobility for future generations, too. This will require us – following the serious setback as a result of the diesel issue – to learn from mistakes made, rectify shortcomings and establish a corporate culture that is open, value-driven and rooted in integrity.”
Catching up with other countries: A statement made by a German government official last week illustrates the country’s ambitious goals for carbon emissions reductions – and for making its EV market stronger as it lags behind several other countries. Deputy Economy Minister Rainer Baake wants to make all new cars sold and registered in Germany to be emissions free by 2030 to assist in meeting pollution reduction goals. Germany’s pledge to cut carbon dioxide output by 80% to 95% by 2050 requires transportation pollution to be cut radically, Baake said. German Chancellor Angela Merkel has been pushing for more EV incentives to boost sluggish electric-car sales. Germany has been behind China, US, UK, Norway, Japan, and Netherlands in annual EV sales. In late April, the German government reached a deal with automakers to jointly spend 1.2 billion euros ($1.4 billion) on incentives to boost EV sales and support emissions reduction targets.
Global competition: While Tesla Motors catches much of the flak for changing the EV game globally, it’s not just Tesla. In December, Ford announced that it’s investing an additional $4.5 billion in electrified vehicle solutions by 2020. The automaker will be adding 13 new electrified vehicles to its portfolio by 2020, when more than 40% of the company’s global nameplates will come in electrified versions. Nissan continues to expand its presence in markets around the world with the Nissan Leaf and the e-NV200 electric van. Honda has been adding plug-in versions of its models and remains committed to the technology along with fuel-cell cars. GM’s chief executive Mary Barra popularized the 200-mile EV debate earlier this year while championing the upcoming Chevy Bolt that will be launched prior to the Tesla Model 3. “This is truly the first EV that cracks the code because of long range at an affordable price,” Barra said in a keynote speech at the CES convention in Las Vegas.
Mobility strategies: For these three German automakers, electrification is part of a much larger strategy to face an historic shift over to another business model. As said several times in Green Auto Market and other sources, carmakers are changing their identity from vehicle manufacturers with dealer networks to providers of mobility services for the cities of the future. Uber CEO Travis Kalanick and Daimler chief Dieter Zetsche denied rumors last week during a conference panel that Uber will be buying 100,000 vehicles from Daimler or that that two companies will merge. Daimler has been making headways into mobility on its own, starting a U.S. division of its Moovel mobility-services in April through acquiring Texas-based ride-sourcing company RideScout and Portland, Oregon-based mobile-ticketing service GlobeSherpa in April. Daimler’s Car2Go has been one of the leading carsharing services in Europe and North America for several years. VW recently made a $300 million investment in ride-hailing mobile app Gett. Fiat Chrysler Automobiles (FCA) will be testing out 100 driverless Chrysler Pacifica minivans with partner Google. Uber will continue to partner with automakers including Toyota and possibly with FCA. Retail giant Walmart is testing out grocery delivery services with Uber and Lyft. General Motors is planning on following up its $500 million investment in Lyft with a test project involving self-driving Chevy Bolts. Last week, the Mini Vision Next 100 electric concept car was shown to media in London. The autonomous electric car concept is based on a prediction that traditional car ownership will become optional. Mini and parent company BMW AG are investing more into the urban mobility market, which is expected to grow substantially in the coming decades.
All three German automakers have research centers in California’s Silicon Valley, as automakers believe that advanced vehicle technologies – including connected cars, mobility services, autonomous vehicles, and vehicle electrification – shape the industry’s future. Silicon Valley neighbors Google, Apple, Uber, Lyft, and Tesla seem to be thinking the same way.

This Week’s Top 10: VW aiming for high EV sales, Automakers make more mobility alliances

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 EV 2025 target: As Volkswagen Group emerges from its diesel emissions scandal and faces increasingly strict government mandates on reducing vehicle carbon emissions, the German automaker expects electric vehicle sales to increase substantially by 2025. VW says it will have to sell about one million battery electric and plug-in hybrid vehicle per year by that year. VW projected that volume by analyzing regulatory environments in key markets, including draft legislation in China. That will require a huge leap from where VW stands right now in EV sales. Total cumulative volumes of all VW brand electrified cars (including VW, Audi, and Porsche) sold since the start is expected to be about 103,000 by the end of this year. For the first four months of 2016, the company sold just shy of 3,000 EV units in the U.S. with the Audi A3 Plug In, VW e-Golf, and Porsche Cayenne S E-Hybrid, according to HybridCar’s Dashboard.
Automakers going mobile: Mobility services continue to expand through investments by major automakers. Not long after Apple announced its $1 billion investment in Chinese ridesharing service Didi, Toyota, Volkswagen, and BMW made similar deals. Toyota is investing an undisclosed amount in Uber and is offering lease deals to Uber drivers. Volkswagen said on the same day it would invest $300 million in Gett, a smaller ride-hailing company. BMW is investing an undisclosed amount in a smartphone-powered carpooling service called Scoop. (Read more about it in the UberMan )
Green bonds: Automakers are taking the green bond market very seriously with $2.5 billion raised in 2016 to finance electric and hybrid vehicles. In May, Toyota’s financial arm sold a $1.6 billion green bond to fund consumer purchases and leases of energy-efficient Toyota and Lexus vehicles; that was upsized from an earlier plan to sell $1.2 billion in green bonds. Chinese automaker Zhejiang Geely Holding Group raised $400 million this month in a green bond sale to finance development of zero-emission black cabs in the U.K. The bond was close to six times oversubscribed. Other automakers are likely to come to market with green bonds, said Stephen Liberatore, a portfolio manager at TIAA. Libatore’s TIAA-CREF Social Choice Bond Fund holds about $75 million of Toyota’s green bonds.
Gigafactory tour: Tesla Motors will be opening the doors on its “Gigafactory” to the general public on July 29. The 130-acre battery-making plant isn’t due to start production on lithium ion cells until 2017. The date was revealed in email sent to customers, who won invitations to the customer-focused event by referring customers via Tesla’s referral program. Although only about 15% finished as of early May, the factory is already producing Tesla’s Powerpacks and Powerwalls.
2017 Fusion Energi mpg: Ford has been promoting its Fusion Energi as the plug-in hybrid with the longest range out there on battery and gasoline engine. The 2017 Fusion Energi does get a few improvements including getting 42 mpg over 38 the previous year; 97 MPGe over 88 last year; and 22 miles “Elec+Gas” range, over 20 miles for 2016. Its total driving range extended from 550 miles to 610.
Hydrogen stations: Leading hydrogen station supplier FirstElement has 13 True Zero stations in operation now, mostly in the Los Angeles and San Francisco Bay areas. The company hopes to have the rest of the 19 done by early next year. That would give True Zero a dominant share of the market in California; there are just six other retail hydrogen stations not owned by the company.
Lithium ion batteries: Popular Mechanics just published an educational article titled, “5 Things To Know About Making Electric Car Batteries Better.” Having tried out a radio-controlled Yeti Trophy Truck with a lithium battery, writer Ezra Dyer researched and answered a few questions. For one thing, the term lithium-polymer “is a reference to the packaging material, which is a polymer aluminum laminate. The inside is still lithium-ion, but the complete battery is dramatically different compared with a production electric car’s lithium-ion battery.” As far as all the advanced batteries being tested out in r&d centers, Dyer thinks that lithium-ion is the winner for now.
Carsharing report: According to Navigant Research, global carsharing services revenue is expected to grow from $1.1 billion in 2015 to $6.5 billion in 2024. Growth in one-way carsharing services is prompting more companies to consider offering this service model. Utilization of the vehicles has improved as carsharing members can use one-way carsharing for shorter, spur of the moment trips. Adoption of plug-in electric vehicles (PEVs) in carsharing services is expected to increase as automakers promote this technology.
Trump on biofuels and oil: Donald Trump has a plan for “complete American energy independence” in his campaign for president. In a recent speech, Trump said that he endorses repealing President Obama’s climate regulations, gaining independence from OPEC oil, and “canceling” the COP21 agreement. Trump would also like to “remove obstacles” to increased oil and gas development in the US. He does support the Renewable Fuel Standard (RFS) and ethanol production. Biofuel group Growth Energy says that both Trump and Hilary Clinton support the RFS.
Start-stop: General Motors will be offering start-stop systems on at least one powertrain in every model it manufactures and sells by 2020. It comes from pressure to increase fuel efficiency in its fleets and because of advances in hardware. Starting with the 2017 model year, the U.S Environmental Protection Agency will award credits toward compliance with fuel economy standards to automakers who equip vehicles with start-stop systems.

China’s new energy vehicles shaping the future of plug-in EVs

Chinese EV How China has become the largest plug-in electric vehicle market in the world; and how Chinese investors have put millions of dollars into U.S. companies with electric drive technology.

Editor’s note: This is the introduction to an upcoming $15 market report I’m writing that will include sales figures, pricing information, incentives, and specs on electric vehicles being built in China; and a section of the report focused on U.S.-based companies serving the Chinese EV market.

World’s largest auto market
China has experienced tremendous economic growth in the past 30 years, with workers moving from farmlands and small towns to metro areas for jobs and buying their very first cars. Ten years ago, Chinese consumers purchased about six million new vehicles annually, but last year that number had increased to 21.1 million passenger cars (sedans, SUVs, and minivans); that made for about a quarter of global sales and a huge share of profits for major automakers.

Global automakers see China as the largest and most important market for manufacturing and sales, and have created joint ventures with government-backed companies to expand their global presence. General Motors sold 35% of its new vehicles in China last year through GM China and its joint ventures. GM’s Buick brand is heavily invested in that market – selling 919,582 Buicks last year in China, versus 228,963 in the U.S. GM China has committed to bringing in 10 “greener” vehicles into its product lineup in the next few years, including the Cadillac CT6 Plug-in Hybrid Electric Vehicle.

In 2015 and into 2016, automakers and their dealer networks faced downturns and instability in sales in the Chinese market. A plunging stock market in the first part of 2016 and rising house prices have had their economic impact on car sales. Dealers in China have become reluctant to put too much vehicle inventory on car lots amid concerns about the broader economy and stock market.

In China, the government remains committed to growing plug-in hybrid and battery electric vehicle production and sales. Air pollution in Beijing and other major Chinese cities have been driving the incentives and sales for more electric vehicles (EVs) to make it to China’s increasingly congested roads. As passenger and commercial vehicles pour into cities, the air pollution has been getting worse – as was observed during the 2008 summer Olympics in Beijing.

What are new energy vehicles?
The Chinese government uses the policy term “new energy vehicles” to designate plug-in electric vehicles, and only battery electric vehicles and plug-in hybrid electric vehicles are eligible for purchase incentives. Initially, conventional hybrids were included in the incentives with plug-in EVs. More recently only plug-in EVs are eligible for the government incentives, which consist of subsidies and tax cuts.

China’s new energy vehicle sales have seen rapid growth in the past two years thanks to these incentives. The country finished in first place for global EV sales last year. China made up 34.2% of global plug-in electric vehicle sales in 2015 with 176,627 sold; in the U.S, 115,262 plug-ins were sold last year. In China, EV sales have been heavily subsidized by the national government and local branches. There’s been an assumption by global automakers that the market’s EV sales will continue to grow – enough for major OEMs to invest heavily in the market, many times in joint ventures with Chinese companies.

Chinese automaker BYD says car shoppers are more interested in owning an EV due to the air pollution in China – and this unpleasant reality is making for an effective marketing message. One of BYD’s online ads shows a man in a cloud of pollution calling for help from China’s fabled Monkey King hero.

Government policies have given Chinese investors and Chinese companies the confidence to sink millions of dollars into U.S. companies with electric drive technology. While some of these vehicles may end up in the U.S. and other global markets, Chinese investors want to focus primarily on the China market. Nissan, Tesla Motors, and other automakers would tend to agree, and are investing heavily in the China market to grow EV sales well beyond the U.S. and Europe. Chinese automakers BYD, BAIC, Chery, SAIC, Zotye, and others, have EV models in pre-production and several EV models on the market being sold by dealers; their EVs are explored in this study.

Will subsidies go away?
Subsidies for the new energy vehicles have started to decline, but they’re not going away any time soon. One assessment states that about $4.56 billion in local and central government incentives were spent last year. The government’s five year’s plan will see subsidies in 2017 and 2018 reduced by 20% from 2016 levels; and another 20% will be cut in 2019 and 2020.

There have been media reports made of fraudulent sales transactions reported in 2015, and government agencies are conducting investigations. EV sales numbers tripled last year in China, and the data may have been “padded” with some of the EVs being counted twice in the total. Another factor analyzed by global auto analysts comparing EV sales around the world is that China’s new energy vehicle policy counts low-speed, neighborhood electric vehicles in its sales figures. Chinese automaker Kandi has been offering its small, low-speed EV for retail sale in China and for its carsharing service; but its sales numbers have been low so far. Whatever findings end up being adopted and reported, China is expected to remain the leading EV market ahead of the U.S. and Europe.

A decade ago in the U.S., EVs were a hot commodity for venture capital firms in Silicon Valley and beyond along with other cleantech sectors. Up until about four years ago, you could attend auto shows and fleet events and check out a myriad of plug-ins from companies no longer in business including Fisker Automotive, Coda Automotive, Bright Automotive, and Aptera Motors.

In the early days of EV mass market sales from 2011 to 2014 in the U.S., automotive analysts and EV advocates were pleased to see strong numbers coming from the Nissan Leaf, Chevrolet Volt, Tesla Model S, Toyota Prius Plug-in, and BMW i3. Overall EV sales numbers in the U.S. began declining last year for reasons yet to be clearly understood. Cheap gasoline may have had something to do with it, although gas prices are thought to have more impact on hybrid sales than EVs.

The fascination may be over for early adopters and consumers who needed to be first in line for cool new technologies like smartphones and EVs. Executives at global automakers expect EV sales to eventually increase as consumers and fleets become accustomed to the new technologies – and lithium batteries are capable of 200-plus miles or more per charge while pre-incentive sticker prices on EVs come down to $35,000 or less. They also see government fuel economy and emissions mandates in the U.S. and Europe being a big driver behind their product planning, which includes a rich line of new EV models in the next few years.

While the EV sales numbers from the past two years may not stay high long term, most automakers do see China as the most important market to secure a solid platform for manufacturing and selling EVs. The numbers have been impressive so far this year. According to the statistics compiled by China Association of Automobile Manufacturers (CAAM), for the first two months of 2016, the production and sales of new energy vehicles reached 37,937 units and 35,726 units respectively, both increasing 1.7 times year on year. The production and sales of BEVs reached 27,850 units and 24,835 units, increasing 2.6 times and 2.7 times year on year; and such figures for PHEVs were 10,087 units and 10,891 units, increasing 60.1% and 68.5% year on year.

India may also be an important market for EV sales, with ambitious government targets and incentives being recently announced. Indian automakers could be well positioned to meet some of those targets, but having EVs delivered from Chinese production plants might be needed to meet those Indian government mandates. In late March 2016, Piyush Goyal, India’s minister of state for power, said India has the potential to become the first nation of its size to be 100% electric vehicles by 2030. Government policies set in 2013 laid out India’s goal to put six to seven million hybrid and electric vehicles on its roads by 2020. The country has been subsidizing new EVs as well as conversions to electrify existing traditional gasoline and diesel engine vehicles.

India’s largest automakers are just getting started in EV production and sales. Tata Motors is moving towards hybrids and electric vehicles. The Mumbai-based company, traditionally dependent on diesel engines, is working on partial hybrids and all-electric drive systems for its future list of passenger vehicles. Mahindra recently launched its first EV, the e20 low-priced electric car, in the United Kingdom.

China’s top carmaker SAIC Motor Corp, and Great Wall Motor, its biggest maker of SUVs, are leading the way on selling new vehicles in India, one of the world’s fastest growing auto markets, as growth at home in China stagnates. Both SAIC and Great Wall are producing EVs, and could make these products part of their market strategies in India. Major automakers like Nissan are looking at both China and India to best serve their global EV sales targets.

This market report looks at the state of China-based automakers and their EV product lineups; and where things stand with U.S.-based automakers and suppliers building electric drive technologies with the support of Chinese investors.

This Week’s Top 10: Tesla Model X voluntary recall, Three more mobility test projects

by Jon LeSage, editor and publisher, Green Auto Market

Here’s my take on the 10 most significant and interesting occurrences during the past week…….

1. Model X recall: Tesla Motors has initiated a voluntary recall of 2,700 Model X sport utility vehicles due to problems with the third-row seats. The company was conducting an internal strength test prior to shipping Model X deliveries to Europe, and found that the third-row recliner unexpectedly slipped. The affected customers, all of whom live in the U.S., were sent an email about the recall. The Model X can still be driven prior to a recall, although Tesla is asking that passengers don’t sit in the third row seats until the SUV has been fixed. The recall affects vehicles that were made and delivered beginning in September and which were made before March 26. Tesla is now assembling new third-row seat backs and expects to replace them all within five weeks.

Mobility projects: Automakers are continuing to launch test projects for mobility services of the future. Jaguar Land Rover launched a technology venture named InMotion on Monday which aims to create apps for services such as carsharing. InMotion will begin testing carsharing mobile apps in North America, Europe, and Asia in the near future. JLR and other automakers are trying to appeal to younger consumers in major global cities who are less likely to buy a car and have been attracted by new services such as carsharing veteran Zipcar and rideshare giant Uber…… Volvo will be adding to locations to its Drive Me autonomous driving pilot projects. The U.S. has been added to the list, soon after announcing that China will be part of it. Drive Me will be launched in Gothenburg, Sweden, in late 2017. In China, up to 100 self-driving cars will be tested by local drivers on public roads in limited driving situations, such as on express roads and highways…… BMW is getting back into the carsharing business with ReachNow, which is starting with 370 cars in its point-to-point carsharing business. ReachNow will offer the ability to pick up a car on the street and park in any legal curbside spot near the driver’s destination, rather than in reserved parking spaces. Like Daimler’s Car2Go carsharing firm, ReachNow will offer the ability to pick up a car on the street and park in any legal curbside spot near the driver’s destination, rather than in reserved parking spaces; it will start up in Seattle and move out to other cities.

Alternative fuel engine innovations: Cummins Westport Inc. told Trucks.com that its 8.9-liter “near-zero NOx” engine is finishing its field test phase and the company will start taking orders this month. The engine reduces emissions of nitrogen oxide, or NOx, a smog- and ozone-causing product of fuel combustion that is particularly difficult to eradicate. The engine — called the ISL G NZ — is aimed at helping trucking companies meet regulations set by the federal Environmental Protection Agency clean-air standard that phases in from 2023 through 2031……. ROUSH CleanTech has developed a propane autogas fuel system for the Ford F-750 chassis that costs less than similar diesel counterparts. Operating up to 33,000 GVWR, the model was created in response to the growing demand for an autogas-fueled medium-duty chassis for bobtail applications, cylinder delivery trucks, and larger tank setters and box trucks, the company says.

Global EV incentives: A new study by Navigant Research examines global demand-side polices for plug-in electric vehicles. PEVs provide a number of advantages over conventional internal combustion engine-powered vehicles, including cost reductions related to vehicle operation and maintenance and the convenience of forgoing gas stations, oil changes, and emissions tests. While these benefits have not been significant enough to justify the high cost of the technology for many consumers, government policies around the world are helping to ensure the supply and demand of PEVs. Government incentives have been critical for gaining support. Western European countries are seeing few incentives and could gain from more government incentives. For example, Germany’s PEV penetration almost matches that of the United States, however incentives are relatively non-existent, which means a modest incentive improvement could create significant impacts for the market on a country and global level, Navigant says.

Model 3 may not see tax incentives: Tesla Motors may be able to stretch out federal tax incentives for the upcoming Model 3 by taking a creative approach – at least one discussed online by Tesla owners and analysts. Tesla will likely be approaching the cap placed on automakers of 200,000 electric vehicles sold for the $7,500 tax incentive as soon as 2018. Once the 200,000 mark is reached, the IRS cuts the tax credit in half for the next two quarters to a maximum of $3,750. Then the IRS slashes the tax credit in half again for another two quarters, and the incentive goes away. “We always try to maximize customer happiness even if that means a revenue shortfall in a quarter,” Musk replied on his Twitter page after suggestions were made on Tesla stretching out the timing.

Ridesharing legal battles: Ridesharing leaders Lyft and Uber are attempting to sort through legal battles with settlement agreements. A federal judge in California’s Northern District has rejected Lyft Inc.’s proposed $12.25 million settlement to resolve a case filed by California drivers over their status as independent contractors of the ride-hailing service. Under the settlement, Lyft would have avoided changes to a labor model that relies on classifying drivers as independent contractors; the judge thinks drivers have been shortchanged on mileage expenses. Uber has agreed to pay up to $25 million to settle a 2014 lawsuit filed by city officials in San Francisco and Los Angeles who want to see more from Uber on driver safety guarantees. The cities argued that Uber gave customers a “false sense of security” by touting its background checks as the toughest in the industry and are superior to the ones used by the taxi industry. Taxi drivers are given fingerprint checks, but Uber drivers are not.

Concerns over federal self-driving car guidelines: As the federal government gets closer to unveiling guidance on deployment of self-driving cars, an auto group has warned that it may be too aggressive. An automaker trade association warned Friday that U.S. auto safety regulators’ timetable for unveiling guidance on the deployment of self-driving cars may be too aggressive. The federal auto safety ageny “should not bind itself to arbitrary, self-imposed deadlines at the expense of robust and thoughtful policy analysis,” said Paul Scullion, safety manager at the Association of Global Automakers, a trade group representing Toyota, Nissan, Hyundai, and other major foreign automakers. “NHTSA should instead consider the development incrementally.” NHTSA Administrator Mark Rosekind said Friday the agency must move quickly, noting cars with significant self-driving features like Tesla Motors Inc’s autopilot function are already on the road.

Bay Area AltCar Expo: The third annual Bay Area AltCar Expo & Conference is scheduled to be held May 20-21 at Oakland City Hall and Plaza. It offers a comprehensive program for the latest in vehicle technologies, ride and drive, and public education. The event is being co-presented by the City of Oakland Public Works, the East Bay Clean Cities, and the Bay Area Air Quality Management District. Event partners include: Honda, Nissan, Mercedes-Benz, Smart, San Francisco Clean Cities, Silicon Valley Clean Cities, Breathe California, Association of Bay Area Governments, and the Transportation Sustainability Research Center at UC Berkeley.

Honda CR-V plug-in hybrid: We may be seeing a redesigned 2017 Honda CR-V, and with it, a plug-in hybrid version. A Japanese media outlet is reporting that the available plug-in hybrid variant will have a 2.0-liter gas engine that mates with an electric motor. Honda hasn’t announced the fifth-generation CR-V yet, but it’s likely to be coming out around that time with current version having been launched in 2011 and a refreshed model released in 2014.

Electric postal vans: Germany’s postal carrier service may be building its own electric vans. Deutsche Post has been planning it for years, and acquired StreetScooter in 2014. StreetScooter is a maker of prototype electric vans that the postal service demonstrated in 2012. Deutsche Post plans to build 2,000 vans this year, which will join a handful of electric vans of various types already in operation. Deutsche Post plans to eventually replace its 30,000-unit fleet of internal combustion vans with electric vehicles.

How Hyundai plans to become the world’s second largest green automaker

Hyundai Ioniq plug in Hyundai Motor Company has been surging forward in the global auto market, and plans to become No. 2 in green car sales after Toyota by 2020. Hyundai unveiled its signature brand last month at the New York Auto Show – the Ioniq – which will be the auto industry’s first-ever model available in hybrid, plug-in hybrid, and battery-electric iterations and built on the same drivetrain. It will be rolling out later this year. Within the next four years, the Korean automaker intends to flood the market with 26 green vehicles, including hybrid, plug-in hybrid, all-electric, and hydrogen-powered models.

With 8.01 million vehicles sold through its Hyundai, Kia, and Genesis brands in 2015, Hyundai Motor Co. became the fifth largest global automaker; and the third largest Asian vehicle manufacturer after Toyota and Nissan. Kia and Hyundai surpassed Japanese brands for the first time last year in the J.D. Power 2015 U.S. Initial Quality Study. The automaker plans to sell 300,000 electrified vehicles by 2020, a sizeable gain over the 70,000 electrified vehicles the company sold last year.

Here’s Hyundai’s formula to become No. 2 in “eco-friendly vehicles” –

The near-term Hyundai lineup will include the Sonata hybrid and plug-in hybrid; Ioniq hybrid, plug-in hybrid, and battery electric; Grandeur hybrid; and its Tucson Fuel Cell. The Kia brand will offer the Optima hybrid and plug-in hybrid; Soul EV; Cadenza hybrid; and the upcoming Niro Hybrid.
Hyundai says the 2017 Ioniq plug-in hybrid will travel 25 miles on electric power alone in its plug-in hybrid version compared to Toyota’s 22 miles in the new Prius Prime. The fully electric Ioniq will travel 110 miles per full battery charge, which surpasses the current Nissan Leaf but will be overtaken by the upcoming 200 miles-per-charge models.
The Ioniq Electric battery electric version will use a 28 kWh lithium-polymer battery, and is expected to deliver 155 miles per charge on the European test cycle; and would likely be lower in the U.S. As previously stated, that could be about 110 miles per charge for the U.S. rating. The electric motor will have 118 horsepower and 218 lb.-ft. of torque. Its top speed is 103 mph.
Hyundai’s strategy appears to be driven by a mix of regulatory compliance, an environmental-friendly philosophy, and profitability. “With a goal of having a fleet-wide average of 54.5 MPG by 2025, we’re leading the future of eco-friendly vehicles,” according to Hyundai’s website. Hyundai’s Blue Drive Strategy is another element of Hyundai’s corporate strategy for fuel efficient vehicles and environmentally-friendly vehicle technologies. This has started with some of the Hyundai vehicles such as the i10, more fuel efficient version of the Elantra and Accent, the company said.
Hyundai has been far behind other OEMs in its green car lineup, bringing its Sonata Hybrid to market in 2010 and the Tucson Fuel Cell in 2014. It has been driven by Toyota’s leadership, and it does need to become profitable for it to be a viable option. “Except for Toyota, I can achieve some competitiveness against other companies,” said Lee Ki-Sang, head of Hyundai’s eco-car powertrain division. “Our target is before 2020, we would like to make profits on these eco-friendly vehicles,” he said.
Hyundai Tucson Fuel Cell drivers have accumulated more than one million miles (as of mid-February) in Southern California since introduction of the hydrogen-powered car in June 2014. The first mass-market produced fuel cell vehicles has been sold to about 100 owners (in February). The Tucson fuel cell model is currently available on a 36-month lease for $499 a month with $2,999 as the down payment.
At the Chicago Auto Show, Kia unveiled the 2017 Optima Hybrid and Optima PHEV plug-in hybrid that can travel 27 miles on electricity alone. The Kia Optima recently received a complete redesign. The Kia Optima Hybrid uses the new Optima body, as well as a similar powertrain to the latest generation of the related Hyundai Sonata Hybrid. Like the Sonata, the Optima also gets a plug-in hybrid variant for the first time.
Kia also introduced the Niro, the company’s first dedicated hybrid nameplate. Along with being Kia’s first dedicated hybrid, it will have an entirely unique body style. The 2017 Kia Niro is scheduled to go on sale late this year.
In November, the 2016 Sonata Plug-in Hybrid became the first plug-in hybrid electric vehicle launched by Hyundai and comes with a 27 mile battery range. The Sonata Plug-in Hybrid’s 9.8 kWh lithium polymer battery system helps deliver 99 MPGe.

Fact sheet on the Tesla Model 3 roll out and its long list of pre-orders

Tesla Model 3 Tesla Motors marked a moment in plug-in electric vehicle history on Thursday night by unveiling what could become the first affordable electric car hitting mass-market sales; and getting hundreds of thousands of people to put money down on a car that won’t be coming out any time soon.

As of April 7, more than 325,000 orders had been placed with $1,000 down payments for the $35,000 midsize sedan. Deliveries won’t start until late 2017 with rollouts coming in the Spring of 2018 – nearly two years from now. If that many Model 3s are to be sold in 2018, it would more than double the number of EV sales seen in the U.S. in 2015. The roll out of the Model 3 will be closely watched as it competes with the Chevrolet Bolt and other cost competitive, longer range EVs that come to market.

Tesla has high hopes on sales going way beyond what’s been seen so far for its first three electric vehicles; and to pay for the billions of dollars invested in engineering design and its Gigafactory lithium battery plant in Nevada. During the launch event, Tesla CEO Elon Musk told the story of what it takes to roll out a safe, affordable electric car with good driving range; and the urgent environmental issues behind it.

Franz von Holzhausen, the chief executive designer at Tesla Motors who leads the Model 3 launch, came on stage first Thursday to welcome the audience. It was a high-energy crowd made up of hundreds of adoring fans and automotive reporters, at its Hawthorne, Calif., facility next door to the SpaceX headquarters. He welcomed his boss, Elon Musk, who came out to unveil, “an amazing product which will blow you away.”

Before pitching the performance of the Model 3, Musk started out with an overview on sustainability. As for why Tesla is building electric cars, “…..it’s very important to accelerate transition to sustainable transport,” Musk said. “This is really important for the future of the world. We have record high C02 levels.”

Musk described as the “Tesla secret master plan.” It all started with the high-priced, low-volume electric sports car, the Tesla Roadster, which has only been built at about 500 units per year. Tesla had to break the mold of slow, ugly electric cars that was the norm for many years, Musk said, and the Roadster was able to do it.

Next came the award-winning Model S sedan, followed by the first electric SUV, the Model X. Musk said half the market wants cars and half wants SUVs, so Tesla extended the Model S platform into the Model X. Musk said that it’s taken multiple iterations and economies of scale to make it all affordable. Revenue produced by sales of the Model S and Model X were needed to move the Model 3 forward. “To all of you who bought the Model S and the Model X, thank you for helping to pay for the Model 3,” Musk said to a cheering audience.

After the staged presentation, journalists were given brief rides around the premises but weren’t allowed to drive the vehicle themselves. One reporter said that when the test driver floored the accelerator of the dual-motor Model 3, it had the same power-torque feeling as the Model S. That will be a very good selling point for the Model 3.

All of this being said, here’s a fact sheet on the Tesla Model 3:

Pricing: $35,000 starting price before incentives

Range per charge: 215 miles, and Supercharger capable

Torque: zero to 60 mph in under six seconds

Safety: Model 3 is being designed to attain the highest safety ratings in every category; with the goal of reaching 5-star safety ratings in all categories once again. There will also be Autopilot safety features.

Seating and storage: Seating for five adults; trunk in rear and no hatchback

Pre-orders: As of April 3, there were 276,000 pre-orders with $1,000 deposits made. (To stay current on Tesla Model 3 pre-sales orders, go to Elon Musk’s Twitter page.)

Logo design: Something unconventional, but also used in the Tesla logo for an “e”…….

Deliveries: Begin late 2017

This Week’s Top 10: Electric vehicle sales were strong in February, Hyundai Ioniq green options shown at Geneva Motor Show

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…….

EV and hybrid sales: Plug-in electric vehicle sales were up substantially month-over-month and year-over-year – 17% over January and 6.7% over February 2014. The Tesla Model S, Chevrolet Volt, and Ford Fusion Energi saw sizable gains over last year, while the Nissan Leaf was down 22.4%.The Nissan Leaf has been declining in its position as the clear market leader, coming in fourth place for the first time, narrowly behind the Ford Fusion Energi plug-in hybrid. Tesla is continuing to take the lead in overall electric vehicle sales, with the Model S far ahead of the Chevrolet Volt and Nissan Leaf – and the recently launched Model X seeing a 25% increase in sales over January 2016. Hybrids continue to be hurt by low gasoline prices, declining to 1.8% of overall market share when it was in the 2.5% range for a long time. Sales were down nearly 10% since last year.
Three green versions of Ioniq: The 2017 Hyundai Ioniq might have been the most interesting green car news story from last week’s Geneva Motor Show. The hatchback was displayed in all three forms in which it’ll be sold: hybrid, battery electric, and plug-in hybrid. It will be the first vehicle offering by a major automaker offered in all three battery-powered options; while there’s been talk of it and concept cars, Hyundai appears to be serious about bringing all three versions soon.
Self-driving cars right for elderly riders: Aging Americans will be well served by self-driving cars, according to Google – as 43 million American in the U.S. are 65 or older and another 10,000 people reach that mark every day. Nearly 80% live in suburbs and rural areas and will need more transportation support for doctor appointments, groceries, and seeing family and friends. Florence Swanson, 94, recently became the oldest person ever to ride in one of the Google self-driving cars; she was given that opportunity after her painting of a guitar player won a Google contest. Google self-driving car project CEO John Krafcik featured Swanson during a January presentation in Detroit. Krafcik, formerly head of Hyundai’s U.S. division and president of TrueCar, is one of about 40 automotive professionals who now work for the Google autonomous vehicle project. That makes for more than 20% of the 170 workers in that business unit. Those with auto industry experience have skills ranging from exterior design to manufacturing, and come from a wide range of companies including Tesla, Ford, and General Motors.
Propane in truck fleets: Nestlé Waters North America is adding more than 150 medium-duty beverage delivery trucks fueled by propane autogas to its fleet. Baking industry leader Bimbo Bakeries USA has acquired 84 new propane-powered Ford F-59 trucks, to operate in three of the company’s major markets. Each Nestlé delivery truck is equipped with a California Air Resources Board- and Environmental Protection Agency-compliant ROUSH CleanTech propane autogas fuel system with a 45-usable gallon fuel tank. BBU’s truck’s were equipped with ROUSH CleanTech fuel technology; and each of these new propane autogas fueled delivery truck will cut carbon dioxide emissions by about 192,000 pounds compared to gasoline.
Natural gas vehicles: The reduced cost of gasoline and diesel caused natural gas vehicle production and sales to drop last year, Matthew Godlewski, president of NGVAmerica, said to an audience at the Work Truck Show. Heavy-duty vehicles sales were flat, but the light-duty and medium-duty vehicle segments saw a drop in sales numbers. Steady growth in the natural gas fueling infrastructure and new natural gas engines are bright spots for NGVs, Godlewski said.
AARP-E praises energy storage: The federal government’s Advanced Research Projects Agency-Energy reported making big gains toward creating a next generation of batteries for energy storage last week during its annual conference. ARPA-E director Ellen Williams said the agency has funded several high-risk battery projects that utilize newer technology than Tesla’s Powerwall batteries. Other good news for the energy storage market came from GTM Research/Energy Storage Association’s U.S. Energy Storage Monitor 2015 Year in Review. The U.S. energy storage market just had both its best quarter and best year of all time. The U.S. deployed 112 megawatts of energy storage capacity in the fourth quarter of 2015, bringing the annual total to 221 megawatts.
DOE and EPA fleet programs: The U.S. Department of Energy increased funding for its SuperTruck II program designed to increase fuel efficiency of Class 7and 8 trucks; it will also provide funding for several projects that would develop alternative powertrains for medium-duty vehicles. During Green Truck Summit, DOE’s Reuben Sarkar announced that the SuperTruck II initiative would receive $80 million in funding, up from the initial proposal of $60 million. In other federal agency news, the U.S. Environmental Protection Agency is offering $26 million in grant funding to fleets to reduce diesel emissions from the existing fleet of diesel engines. The deadline to apply for the funding is April 26.
BMW jumping into self-driving car race: Days before BMW’s 100th birthday, Klaus Froehlich, the automaker’s board member for research and development, announced corporate plans for a completely overhauled company, where half the r&d staff will be computer programmers working on self-driving cars projects. During the Geneva Motor Show, Froehlich said that BMW sees its competitors as including firms like ridesharing company Uber and third-party sales site Truecar, which he described as “new intermediaries.”
Extended range: The 200-mile range per electric vehicle charge isn’t quite right, according to Daimler AG head Dieter Zetsche – 310 miles per charge range is “probably a reasonable number to pursue,” Zetsche said last week at the Geneva auto show. Another needed step: battery costs must fall for EVs to reach prices that will prompt consumers to swap gasoline-powered vehicles for electrics.
The state of VW: Last month, U.S. District Judge Charles Breyer set a March 24 deadline for Volkswagen to state whether it has found a fix for 600,000 diesel cars that is acceptable to U.S. regulators. No deal, according to VW brand chief Herbert Diess; it will take months rather than weeks to reach an agreement with U.S. regulators on an emissions fix, a newspaper reported on Saturday. In other news, a detailed report was submitted to a German court on Feb. 29 by law firm Goehmann stating that VW delayed releasing information on the diesel situation to allow for talks aimed at reaching a settlement with U.S. regulators; and that the talks could have been jeopardized if the matter was already public. The law firm is arguing for VW that the delay was a legitimate move aimed at striking a deal with regulators.

Volkswagen prepares for its toughest year ever as the emissions reporting scandal continues

VW former CEO Volkswagen AG is facing a catastrophe that will probably take years to recover from. The outcomes of government agency rulings, recalls, and class-action lawsuits will tap into VW’s cash reserves – and will dictate its future strategic planning. It’s the “perfect storm” as automakers compete to dominate global markets; compliance with national emissions standards, for the most part, is being enforced; OEMs face unattainable expectations on advanced technology innovations; and consumers expect major corporations to live with a fairly high level of accountability and transparency.

Opinions shared by VW vehicle owners, fleet operators, regulators, political leaders, and automotive analysts will also play its part in the outcome. As for now, here’s the latest significant developments on VW’s challenges:

EVs and charging could be a solution: As part of its ongoing talks with VW on fixing the diesel vehicle reporting problem, the U.S. Environmental Protection Agency has asked the German automaker to produce electric vehicles in the U.S. as a way of making up for its emission testing and reporting violations. This news came from German newspaper Welt am Sonntag, which reported that the EPA was asking VW to produce electric vehicles at its plant in Chattanooga, Tenn. Another layer to the settlement would be VW helping build a network of charging stations for electric vehicles in the U.S. It wasn’t clear whether this resolution would come from current VW models or new ones that would be introduced to the market. The automaker and EPA declined to comment. “Talks with the EPA are ongoing and we are not commenting on the contents and state of the negotiations,” a VW spokesman said.

Facing EPA and CARB scrutiny: Earlier this month, VW submitted its draft recall plan for about 85,000 VW, Audi and Porsche diesel vehicles to the U.S. Environmental Protection Agency and California Air Resources Board. CARB rejected VW’s plan in January to fix these vehicles. CARB said the plan did not meet its standards and called it “unacceptable.” On Feb. 3, CARB said that it had up to 20 business days to test if the revised plan actually reduces emissions; and the EPA will probably back CARB’s decision. If the new plan is accepted, VW could begin a recall and end the stopped sale of vehicles with these engines.

“Denial” and “obfuscation” continue to be commonly used words to describe VW’s state. Former Volkswagen Group CEO Martin Winterkorn (as seen in the photo above) may take more of the blame, as has been expected. Media has reported that Winterkorn was notified as early as May 2014 about the inevitable investigation U.S. authorities would put in motion on the diesel car emissions-test defeat device placed in several VW, Audi, and Porsche models. Volkswagen internal memos and emails suggest that Winterkorn and other company executives pursued a strategy of delay and obfuscation. The automaker would not be able to provide an explanation for elevated nitrogen oxide emissions and deceptive emissions reporting data. Winkerton resigned on Sept. 23, 2015, and said at that time that he didn’t find out about the defeat device until right before the company’s response to EPA’s recall announcement.

Class-action lawsuits: Dozens of class-action lawsuits filed nationwide on behalf of hundreds of thousands of angry Volkswagen owners, dealers, and other parties have been centralized in San Francisco federal court. Attorneys have been in communications on the best strategy to hold VW accountable in a case with billions of dollars at stake. It’s considered to be in the process of becoming one of the most massive legal assaults in U.S. history. All of the cases against VW have been assigned by a special national panel to San Francisco U.S. District Judge Charles Breyer.

Daimler is facing its own accusation that it utilized a shut-off device in emissions testing. The German automaker said that a U.S. class action lawsuit alleging that its Mercedes-Benz diesel cars use a device that turns off pollution controls is inaccurate. Consumer-rights law firm Hagens Berman Sobol Shapiro filed a lawsuit in a federal court in New Jersey alleging that Mercedes has placed a shut-off device in its BlueTec “clean diesel” cars that causes the vehicles to violate U.S. emissions standards when running at cooler temperatures. Daimler spokesman Joerg Howe said the company is complying with regulatory frameworks and all its vehicle are certified according to all the laws that it’s required to comply with. Daimler may be going in a similar direction as VW in cleaning up its image as a responsible, sustainable company. VW may need to manufacture more EVs in the U.S. as part of its EPA settlement. Daimler just decided that its executives must drive a battery electric vehicle or plug-in hybrid vehicle at the Stuttgart, Germany headquarters. These will be their company cars and it’s thought to be part of Daimler’s strategy to give its management more experience with plug-in electric vehicles.

Former General Motors vice chair Bob Lutz says that years ago he and his colleagues had been mystified at VW’s ability to build diesel cars that could pass stringent emissions tests. When Lutz served as GM’s “car czar” from 2001 to 2009, he had GM engineers analyze Volkswagen’s TDI models to see how the German automaker managed to meet U.S. emissions standards. Lutz wanted GM to sell more diesel cars in the U.S. GM staff couldn’t figure out how VW was able to meet the particularly strict standards in California, Lutz said. GM and its competitors wanted to build fuel efficient cars with strong engine performance; but they left diesel passenger cars to VW to take the lead. Lutz has always supported plug-in hybrid electric vehicles (such as the Chevrolet Volt and Via Motors vehicles).

Global sales: VW had been aiming to retain its number one spot in global auto sales, but that took a sharp turn after the news broke out in September. There’s been a lot of media coverage recently with a humorous twist. Car sales may be down, but wiener sales have gone up. Last year, VW’s car deliveries fell about 5% from 2014 to 5.8 million units; during that year its currywurst wiener output climbed 14% to 7.2 million sausages. Beyond that story, here’s the numbers on VW’s sales performance: In January, according to figures released by the European Automobile Manufacturers Association, overall new car registrations in European Union nations rose 6.2% while registrations of VW-brand vehicles fell 3.8%. VW brand’s market share in the EU fell 1.2 points year over year, to 11.7%. VW still has the commanding lead in the EU and its Audi brand did well, increasing 13.7% in January. Its sales fell 7% in the U.S. in January after the automaker had to halt sales of several models over the scandal. The automaker’s global sales rose 3.7% in January, as it still holds a strong position in a few overseas markets, especially China. The automaker sold 847,000 vehicles worldwide in January, up from 817,000 in the same month a year earlier.

Diesel car sales: VW and Audi diesel car models had been dominating diesel passenger car sales in the U.S., but that’s taken a downward turn since September. In January, automakers sold fewer than 225 diesel cars compared to somewhere between 4,800 and 9,500 a month through the first eight months of 2015, according to WardsAuto.com. Diesel-engine pickups are still doing pretty well (which GM and Chrysler had been counting on). Automakers sold 21,999 diesel light-trucks in January.

Taking the heat in South Korea: South Korean government prosecutors raided and searched VW’s Seoul headquarters and other South Korean offices. Computer hard drives, emails exchanged with headquarters, emissions verification, and vehicle certification information were confiscated by investigators during the search. The homes of VW executives in charge of product quality control were also raided. “We have made (it) clear that we will fully cooperate with the investigation and our position remains unchanged,” a Volkswagen spokesman told the AFP news agency.

VW has indefinitely postponed its fourth-quarter and full-year 2015 earnings reports as it scrambles to adjust its financial reporting to include the spiraling costs of the scandal. Some analysts are speculating that CEO Matthias Mueller is working behind the scenes to get to a settlement with the U.S. government that VW can charge against its 2015 earnings. The idea is that these negotiations could help get the company past the scandal more quickly – and it could help speed its efforts to recover its reputation with consumers around the world. That’s a very tall order for VW to face.