electric vehicles Archives

Snapshot of where things really stand with Tesla Motors

Elon Musk on investor conference call As seen in Green Auto Market and automotive media in general, Tesla Motors can seize center stage for periods of time and then do it again. In the past few years, other automakers (like Subaru, Hyundai, and Kia) have surged forward in sales and market presence; but their brand imaging pales in comparison. That being said, here’s my latest reality check on Tesla’s performance:

Stock prices have dropped. The share price closed at $151.04 on Friday after having hovered around the $200 per share mark for several weeks. The high point reached in the past year was $286.65 per share. The fourth quarter earnings report last week was strong enough to get shares to jump nearly 6% to 10% on Thursday, but they declined again on Friday. The upcoming launch of its Model 3 and strong results from its energy storage division have helped, but analysts and large investors now think that prior price targets needed to be adjusted downward. Tesla’s market cap is now at about $20 billion.

Company has yet to be profitable. On Wednesday of last week, Tesla posted its eleventh straight quarterly loss. Last year at the Detroit Auto Show, CEO Elon Musk said it won’t be until 2020 that the company becomes profitable (on a basis that includes charges and executive compensation). During last week’s investor conference call, Musk told investors that the carmaker will start turning profits this year. The company is forecasting a 60% to 80% increase in vehicle sales this year and promised to turn a profit on an adjusted basis. The company also reported that it planned $1.5 billion in capital spending this year but had just $1.2 billion in the bank – but investors where enthusiastic enough to drive up stock prices up to 10% that day in after-hours trading. How does this come to be? “Investors look at Elon, and some say he’s a promoter or that he steps over bounds with what he promises,” said Robert W. Baird analyst Ben Kallo. “But his track record is pretty good. That’s why he still attracts the type of institutional investors he does.”

By the numbers. Tesla said net loss nearly tripled to $320.4 million, or $2.44 per share, in the fourth quarter from $107.6 million a year earlier. The cost of launching its Model X crossover has taken its toll. The company will be spending $1.5 billion on machinery and equipment to manufacture the Model 3, and to enhance cell production at the Gigafactory.

Status of Gigafactory: Tesla Motors has been criticized in the media lately for falling way behind on its commitment to build advanced lithium ion batteries at its Nevada plant – and to support the local economy and hire more workers. Musk scoffed at the recent news coverage, and once again defended the $1.3 billion tax incentive package the company was awarded by Nevada lawmakers. Tesla and partner company Panasonic have started up the one-million square foot factory near Reno, and permanent jobs have been created in line with what the companies reported would be in place by now. However, the job creation number is significantly smaller than what state-hired economists projected during the 2014 special session to pass the tax breaks. Musk said the Gigafactory is “moving at a very good pace.”

Competitive pricing on Model 3: Tesla will begin taking pre-orders of its Model 3 next month, which will be selling for $35,000. With incentives, that could drop down to as little as $25,000 in its closing price. That will be price competitive with the upcoming Chevrolet Bolt battery electric car, which may open at $30,000 before incentives. Tesla has managed to do very well selling its Model S in the $80,000 to $90,000 price range; and its newly launched Model X crossover is starting at around $80,000. Tesla’s creative leasing programs with bank partners such as Wells Fargo have helped close sales transactions. Eyes will be on Tesla on March 31 when it reveals the design and details of the upcoming Model 3.

Performance in 2015: Last year did look good in sales performance for Tesla with revenue up 59% over 2014. Model S sales increased 35% in the fourth quarter compared to Q4 2014. The company set a record for deliveries in the fourth quarter even though gasoline prices were way down. To better service its electric cars, Tesla will be opening about 80 retail locations and service centers and adding 300 more Supercharger locations.

Energy storage: During its quarterly report, the company announced that its Energy division has installed its first Powerwall home-battery storage units in the U.S., Australia, and Germany.

This Week’s Top 10: EPA issues rules on biofuels, Faraday launching concept car at CES

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…….

EPA issues final rules on RFS: The U.S. Environmental Protection Agency (EPA) announced final volume requirements under the Renewable Fuel Standard (RFS) program yesterday for the years 2014, 2015 and 2016, and final volume requirements for biomass-based diesel for 2014 to 2017. EPA set out a goal of 18 billion gallons of renewable fuels overall for 2016, an increase from what the agency had suggested in June but far less than the renewable fuel level anticipated by the statute originally issued in 2007; that law had envisioned 22.25 billion gallons by 2016. The rule finalizes higher volumes of renewable fuel than the levels EPA proposed in June. The final 2016 standard for cellulosic biofuel is nearly 200 million gallons, or seven times more, than the market produced in 2014. The final 2016 standard for advanced biofuel is nearly one billion gallons, or 35%, higher than the actual 2014 volumes. The agency said it formulated this policy based on more than 670,000 comments from the public. The ethanol blend in gasoline went up from 16.3 billion gallons in 2015 proposed earlier this year by EPA to 16.93 billion in the finalized rules; and for next year, the volume increased from 17.4 billion gallons to 18.11. These volumes could bring the gasoline ethanol blend over 10% this year and next, which the oil industry says will raise fuel prices and further damage vehicle engines. Overall, the EPA decision didn’t appear to quiet the debate over biofuels from the oil industry or biofuels producers.
Faraday launching concept car: Chinese startup electric carmaker Faraday Future will unveil a concept car at the Consumer Electronics Show (CES) this January in Las Vegas. Earlier this month, Faraday released a statement saying it would spend $1 billion on a U.S. factory for this production car; it’s expected to be launched as early as 2017. Faraday has a major Chinese investor, Jia Yueting, who founded Leshi Internet Information & Technology, who has a fortune estimated at $7 billion. Faraday now has about 400 employees, and operates out of a former Nissan research facility in Gardena, Calif., next to Los Angeles.
COP21 starts in Paris: Global leaders met in Paris yesterday for the start of the United Nations COP21 climate summit; its ambitious goal is creating an international framework allowing countries to coordinate and gradually strengthen their efforts to fight climate change. It’s been years in the making and the source of much debate over commitments nations will make to reducing climate change and providing financial aid to countries that have suffered damage from it. Nearly 150 global leaders are expected to attend, including Barack Obama, Chinese President Xi Jinping, and Russian President Vladimir Putin. Security will be tight at the conference, a little more than two weeks after terrorist attacks in the city. “What a powerful rebuke to the terrorists it will be when the world stands as one and shows that we will not be deterred from building a better future for our children,” Obama said last week.
Tesla Model X pricing: Tesla Motors’ new electric SUV, Model X, will have a wide range of MSRP prior to its $7,500 federal tax credit. It has a starting price of $80,000 before delivery charges all the way to $132,000 for the Model X P90D Signature Edition. That will include the Ludicrous Mode, which means you can go from 0 to 60 in just 3.2 seconds. Deliveries of the Model X will start in early 2016. The Model X is being recognized for going an estimated 257 miles, which is significant for a battery electric vehicle, and for its “falcon” doors.
Federal rule on sight-impaired pedestrians delayed: The National Highway Traffic Safety Administration has delayed rules that would require electric and hybrid vehicles to alert sight-impaired pedestrians and bicycle riders about approaching cars. That ruling will be delayed until at least mid-March, and sets back hopes that the rule proposed in 2013 would be worked out by now. NHTSA says that the chance of pedestrians being injured in a crash are nearly 20% higher compared to traditional gasoline-powered vehicles.
Hyundai selects AeroVironment: Hyundai Motor America has selected AeroVironment as the preferred provider for charging system installation at its North American dealerships for its all-new 2016 Hyundai Sonata Plug-in Hybrid. Hyundai is the seventh electric vehicle manufacturer to choose AeroVironment as one of its suppliers. Hyundai owners can purchase AeroVironment home chargers and installation when purchasing their vehicles at the Hyundai dealership. AeroVironment-certified, licensed electricians, who are also specially qualified to support EV drivers, perform on-site installation and services.
The California Air Resources Board has ordered Audi, Porsche, and Volkswagen to recall and repair “illegal” emissions software in more than 15,000 vehicles with 3.0-liter diesel engines sold in the state since 2009. This came out of Audi’s recent admission that its 3.0-liter diesels sold since the 2009 model year contained three “auxiliary emissions control devices” that regulate emissions performance that weren’t properly disclosed to regulators. In Germany, Volkswagen Group has agreed to recall 2.46 million diesel vehicles fitted with illegal emissions-control software in that nation. Overall, VW has 11 million vehicles globally that may fall under these recalls, with about 8.5 million of them being in Europe.
EV charging in China: To meet China’s goals of being the largest electrified vehicle market in the world, the national government has adopted a five-year plan to expand its battery charging network. In 2014, China had 780 charging stations and 31,000 charging poles (individual chargers). By 2020, the government aims to add 12,100 charging stations and 4.8 million charging poles. Beijing will likely get at least 7,400 charging stations and 2.5 million poles; Shangai is likely to join Beijing in getting more of the charging stations.
Top Li-ion battery suppliers: LG Chem, Panasonic, and Samsung SDI have taken the top position in a leaderboard created by Navigant Research. The research firm anticipates that most new production hybrid and all plug-in electric vehicles will be shipped with lithium-ion batteries in the next few years. Leading companies in the field are large and financially stable companies, or are subsidiaries of these types of companies. They deliver Li-ion batteries to multiple markets, such as the consumer electronics and emerging stationary grid energy storage markets. The majority (72%) of demand for these batteries is expected to come from battery electric vehicles (BEVs), due to the larger battery packs typical of those vehicle types.
Green SUV of the Year: Green Car Journal has announced its five finalists for the 2016 Green SUV of the Year award to be presented at the 2016 Washington Auto Show. Finalists include the BMW X1 xDrive28i, Honda HR-V, Hyundai Tucson, Mazda CX-3, and Toyota RAV4 Hybrid. “After years of focus on building more efficient and environmentally positive sedans and hatchbacks, a growing emphasis is now being placed on SUVs and crossover vehicles, one of the hottest segments in the auto market,” said Ron Cogan, editor and publisher of the Green Car Journal and CarsOfChange.com. The award recognizes this achievement, Cogan said.

Mass adoption of EVs: It’s all about cheaper, extended-range batteries and pervasive fast charging stations

For plug-in electric vehicles (EVs) to move past their slight share of U.S. new vehicles sales (at 0.68% of the total in September 2015), the consensus of opinion seems to focus on three core principals: the range on a single charge needs to be at least 200 miles; the battery cost needs to come down if EVs are to become cost-competitive on the market; and the charging infrastructure, especially for fast chargers, needs to be widespread across the country – or at least along popular cross-country highway routes. Nissan, General Motors, and Tesla are taking the challenge more seriously than competitors; and bagless vacuum cleaner maker Dyson is taking the battery technology seriously enough to make a $90 million investment.

Nissan believes in electric cars enough to forecast the segment will account for 5% of its sales in the next six years – and 10% “in the near future” after that, according to chief competitive officer Hiroto Saikawa during an event last week at the company’s Yokohama headquarters. To get there, Nissan will need an electric car that can travel 200 miles on a single charge. That will be happening through the second-generation Leaf, which will be introduced as a 2017 or 2018 model, Saikawa said. The first-gen Leaf has evolved from its original 73 miles per charge, to 84 miles and now 107 miles as the battery has been improving with model-year changes since its inception.
General Motors is counting on its supplier partnership with LG Chem for development of tis first long-range EV in the Chevrolet Bolt; the Bolt starts production a year from now and will probably be a 2017 model-year vehicle. That EV is expected to go 200 miles per range with a price tag of around $35,000 before incentives. LG Chem already supplies lithium batteries for the Chevrolet Volt and Spark EV. The changing relationship with LG Chem should help place the Korean company in a leading role in supplying lithium batteries. “GM used to act more like a dictator than a customer,” said Mark Reuss, GM’s global product development director.
General Motors has gotten behind another battery maker in the past – Sakti3 and its solid-state lithium-ion batteries. That was a $4.2 million investment by GM Ventures five years ago. A much larger investment has taken place this month, with Dyson acquiring Sakti3 in a deal worth $90 million. That’s one of the first investment from the $2.3 billion fund that UK-based Dyson set aside last year to invest in what it calls “future technologies.” Earlier this year, Dyson had invested $15 million in the battery maker. Sakti3’s batteries contain solid lithium electrodes rather than flammable liquid, which gives them higher energy density and will support longer-range EVs. Satki3 CEO Ann Marie Sastry has become well known in the lithium and EV communities, speaking at events and in media interviews.
Tesla CEO Elon Musk said Tesla’s giant $5 billion Gigafactory battery plant in Nevada will produce its first batch of batteries next year, estimating that the plant would reach full capacity in two to three years. Musk also said Tesla could begin producing Model 3 electric cars in China in two years. Manufacturing in China has the potential to slash the sales prices of its models in the world’s largest auto market by a third; and the batteries will be made in Nevada. Tesla says the upcoming Model 3 sedan should cost around $35,000 (pre-incentives) and will have a 200-mile range. Musk said Tesla will create an alliance with a China-based manufacturer to produce the Model 3. Tesla is also counting on Chinese government purchase incentives for sales strength; and the government has committed to provide support for its nation to be a leading market for EV sales.
Availability of charging stations will be critical for mass adoption, especially faster chargers. The U.S. Dept. of Energy’s charging station locator reports that there are 11,056 charging stations in the U.S. that host 27,620 charging outlets. That covers Level 1, 2, and fast charger units. PlugShare shows that DC fast chargers and Tesla Superchargers are spread throughout the U.S. Its data doesn’t show CHAdeMO chargers, which are used by the Nissan Leaf and other Japanese automakers. DC fast chargers are used by European and U.S.-based automakers, and Superchargers are only available for Tesla models. For now, Tesla appears to be taking the lead in fast charging, setting up its U.S. network for Tesla model owners to charge across the country on a few major highway routes. CHAdeMO is well developed along the U.S. coasts, but charges at a slower rate than the Supercharger. The Chevy Bolt will only be able to use SAE’s Combined Charging System, which is strong in Europe but will take years to find much presence in the U.S. market. For now, Tesla is in the lead with fast charging across its national network, which it will play into with introduction of the upcoming Model 3.

How to increase interest in used electric vehicles with car shoppers

Plug-in electric vehicles are getting hit with depreciation of their resale values. Many of these electric vehicles (EVs) are coming off lease this year, which presents a real challenge for manufacturers’ finance arms and other financial institutions who wrote the leases. It’s also affecting consumers who purchased the EVs and might be trading them in at a dealership or selling them to private parties; it’s also tough for retailers (dealers) who own these cars, through trade ins or buying them at auctions, and want to sell them at a decent profit margin. NADA Used Car Guide and Black Book are seeing those trends and have reported on it last week. The Tesla Model S is holding its value on the market, but other EVs are vulnerable. For owners of used EVs looking at their options, market research and consulting firm Morpace has asked electric vehicle owners for tips on how to move the metal.

NADA Used Car Guide’s Larry Dixon thinks that used vehicle buyers tend to lean more toward frugality than new vehicle shoppers. With that, concerns over upfront cost and long-term durability are more amplified. Black Book’s Anil Goyal sees gasoline prices as the key driver. “Smaller cars have experienced heavier depreciation over the last 12-18 months, but it’s clear that the small mainstream electric vehicles are experiencing even heavier valuation drops,” Goyal said in a Black Book commentary.

Current electric vehicle (EV) owners interviewed by Morpace are passionate about their plug-in cars, but are not too interested in buying a used one according to an analysis piece by Eric Roach, research director at Morpace. Buying a new EV is more likely for them. Morpace presented questions to its MyDrivingPower community, which is comprised of more than 250 U.S.-based EV owners. They did have a lot to say in suggestions to automakers and dealers on what they can do to make used EVs stronger in the market:

• Educate dealer staff with their own driving experience – One way to improve their credibility about EV knowledge suggested by respondents was that sales staff actually drive the vehicles themselves to become familiar with the product. Knowledge and some level of expertise on EVs is expected to come from the dealership and the people who are selling them.
• Provide a warranty on the battery or replace it – To deal with concerns over expensive battery packs, replacement or a 5-6 year warranty on the battery was suggested. This warranty would be expected to cover replacement costs, repairs, and guarantee a minimum battery range per charge. It would work best if the dealer is seen to be transparent, proactive, and straight forward about the battery and range for consumers to consider buying a used EV.
• Report charge cycles – EV owners want to know more about battery lifecycle, and they see the need for an indicator that provides the number of times a battery has been charged to date (equivalent to mileage on an internal combustion engine). Survey respondents think that more consumer confidence in used EVs would be supported by knowing the total number of cycles on the life of the battery and the number of cells still remaining.

This Week’s Top 10: Ford making its EV technology available to competitors, Daimler and Qualcomm moving wireless charging forward

by Jon LeSage, editor and publisher, Green Auto Market

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

Ford opening up EV patents: Ford Motor Co. is following Tesla Motors in bringing its electric vehicle (EV) technology out to competitors in the marketplace. Ford is opening up hundreds of patents on the technology to automakers to help bring EVs and hybrids out for diverse vehicle offerings and wide adoption with consumers. Ford will be charging a fee for licensing its patents, unlike Tesla offering its patents for free. Ford has more than 650 patents and about 1,000 pending patent applications related to hybrid and plug-in vehicles. The automaker plans to hire 200 more EV engineers this year to further its R&D in electrified transportation.
Wireless charging moving forward: Daimler AG has a partnership with Qualcomm Inc. to recharge batteries in electric vehicles, along with recharging mobile devices, using wireless charging (also known as “inductive charging”). The partnership will utilize the Qualcomm Halo wireless charging system, providing battery electric and plug-in hybrid electric vehicle drivers a way to recharge without having to plug them in; they’ll also be using Qualcomm’s WiPower technology that allows consumers to wirelessly charge smart phones and other mobile devices wirelessly inside a vehicle.
Chicago Clean Cities reduces petroleum consumption and emissions: The Chicago Area Clean Cities Coalition says that in 2014 its member fleets saved more than 25 million gasoline gallon equivalents (GGEs) of petroleum and nearly 240,000 tons of greenhouse-gas emissions. “This, the coalition’s greatest achievement yet, is the equivalent of removing 3,150 tanker trucks’ worth of gasoline,” said Samantha Bingham, coordinator, Chicago Area Clean Cities (CACC). “This incredible accomplishment would not be possible without the efforts of the coalition’s stakeholders, which include commercial fleets and municipalities throughout the six-county Chicago region.” Chicago Area Clean Cities recently celebrated its 20th anniversary.
More news on the connected car front: There’s been a flurry of announcements, gossip, and media coverage on what will happen next on the “Silicon Valley Marries Detroit” front. General Motors (GM) said it will become the first automaker to put the Apple CarPlay infotainment system into its lineup with 14 new Chevrolet models next year; Hyundaisays it will become the first car company to launch Android Auto on production vehicles. Apple dropped a few more hints that it may soon challenge GM, Nissan, Tesla, and others on the electric vehicle manufacturing front – and by integrating mobile devices into cars. “The car is the ultimate mobile device, isn’t it? We explore all kinds of categories,” said Jeff Williams, Apple’s senior VP of operations during a California technology conference last week. “We’ll certainly look at those and evaluate where we can make a huge difference.”
LG Chem gains another battery customer, A123 doubles capacity: LG Chem is on a roll as a maker of lithium-ion battery cells for electric vehicles; Chinese automaker Great Wall Motors has been added to the list. South Korean battery maker LG Chem also provides this technology to Audi, Cadillac, Chevrolet, Ford, Hyundai, Renault, Smart, Volkswagen, and Volvo. Great Wall will use LG Chem lithium-ion battery ells for upcoming plug-in hybrid SUVs. Plug-in hybrids are considered to have the best chance of taking off in sales in the massive Chinese market; they qualify for the government’s New Energy Vehicles policy and are expected to be most popular with workers moving into apartment towers in fast-growing cities. A123 Systems will be doubling its manufacturing capacity at its three lithium-ion battery plants. Parent-company Wanxiang Group is investing $200 million to increase capacity 1.5 gigawatt hours at plants in suburban Detroit, Hangzhou, China, and Changzhou, China over the next three years. A123 Systems has changed its end product away from lithium ion battery packs to low-voltage lithium batteries for weight savings and to power other fuel efficient technologies.
Ford getting into carsharing: Ford Motor Co. is following the lead started by Daimler and BMW by offering services in the growing carsharing business. GoDrive will offer one-way rides with guaranteed parking; Ford will have 50 cars available through 20 London locations for GoDrive.
CALSTART continuing to administer HVIP program: California Air Resources Board has decided to continue working with CALSTART on the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP); CALSTART will manage $10 million in additional incentives in 2015 and 2016 – the largest state clean truck and bus incentive program in the nation. CARB initiated HVIP in late 2009, and it has become the most significant program nationally that encourages fleet operators to purchase hybrid and electric trucks instead of conventional ones, CALSTART says.
Tesla shut out of Texas: Tesla Motors has been blocked from directly selling its electric cars in the state of Texas for the second time in two years. That follows strong moves that CEO Elon Musk and his colleagues have put into being allowed to sell in that large marketplace. Auto dealers have a lot of pull in Austin, and were able to recently thwart a second bill that Tesla had supported.
California more flexible on ZEV compliance: While the California Air Resources Board rejected a request on May 18 to be exempted from the state’s zero-emission vehicle mandate by Jaguar Land Rover, Mazda, Mitsubishi, Subaru and Volvo, there may be a way out for them. Automakers with less than $40 billion in annual global revenue – which includes those five companies – now will have the option to sell plug-in hybrids only to earn credits toward compliance, rather than being forced to sell some battery electric or hydrogen fuel cell vehicles. If they don’t sell enough, they’ll still need to buy credits from automakers that sell electric vehicles in sizable numbers.
Daimler also getting into battery storage market: Daimler AG is following the lead from Tesla Motors on getting into the energy storage market. Daimler will sell Mercedes-Benz branded lithium-ion batteries in a relationship with utility EnBW Energie Baden-Wuerttemberg AG. Daimler’s batteries have been tested for millions of kilometers through the toughest environments of heat and cold, the company said. Germany’s economy and government regulations are tied heavily into renewable energies; Daimler is hopeful it’s a smart market to move into.
Plus: In this week’s Green Auto Market – Extended Edition, “What 3D printing is bringing to automakers and their engineering design teams.” 3D printing has become the “topic du jour” in the auto industry. It’s ideal for racecar teams, and for automakers looking to speed up design-to-manufacturing while cutting production costs. One reason 3D printers is taking off is that the cost has plummeted downward; new 3D printers have dropped to less than $1,000 in price. That’s how a company like Local Motors and its electric car can enter the automotive space. You can read more about subscribing to Extended Edition here.

This Week’s Top 10: Plug In America study on promoting electric vehicles, Freightliner gets first-ever autonomous truck licensed

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…….

Effectively Promoting EVs: A new study by Plug In America analyzes how promotional efforts have performed in the US since automakers began the latest round of plug-in electric vehicle (PEV) launches in late 2010. “The Promotion of Electric Vehicles in the United States — A Landscape Assessment” delivers 11 key findings followed by recommendations Plug In America believes will stimulate PEV market growth. While the numbers are impressive – with over 300,000 PEVs now on US roads and nearly 120,000 of those being delivered last year – the report states that inconsistent governmental policies form a patchwork quilt across the country. Automakers have created over two dozen PEV models, yet only a few are actually available for purchase by consumers in all 50 states. “The U.S. stands at the crossroads of the largest technology in personal transportation in its history,” says principal researcher Kirk Brown, Plug In America’s Director of Strategic Partnerships. “The question ahead is how do we capture this early market growth and deliver the benefits of these vehicles to all consumers, everywhere.”
Autonomous Heavy-Duty Truck: Freightliner Trucks, a Daimler Trucks North America division, just earned the first-ever license in the US to operate an autonomous heavy-duty truck. Nevada Governor Brian Sandoval has given the green light to Freightliner for what it calls the Inspiration Truck; the truck was unveiled last week along with a promotional video showing the Inspiration Truck rolling over the wall of the Hoover dam. The truck was extensively tested on Nevada roads before being granted the license; Daimler cites the high percentage of truck-involved accidents that include driver fatigue and the solution that Inspiration Truck provides.
Concern over Tesla Earnings: While Tesla’s new energy storage division grabbed a lot of attention and enthusiasm last week, Tesla Motors’ first quarter earnings call went in another direction. Analysts are concerned about how long the company will be depleting its cash and cash equivalents – which went down to $1.51 billion on March 31 from $1.91 billion three months earlier. Adam Jonas, an analyst at Morgan Stanley, is concerned that cash could run out in about three quarters if this rate continues. During the quarterly call, Tesla executives said the spending has been focused on the upcoming Model X launch, toolings, a new paint shop, the Gigafactory, and its sales and service network. On a more positive note, Bloomberg Business reported that since launching its new battery storage product for homes and businesses, the company has taken orders for about $800 million in potential revenue.
Hawaii Backs Off E10: Hawaii lawmakers passed a bill last week that would put an end to 10% ethanol blend (E10) in Hawaii gas stations. Gov. David Ige hasn’t yet made a decision on the bill, but he indicated he may be signing it. When the state followed California’s original lead and mandated the ethanol blend in 2006, the idea behind it was to support alternative fuels and to boost local agriculture. Opponents have made a convincing point that it’s missed the mark since Hawaii has been importing the blended fuel and paying a high cost for it.
Customer Support from Fisker: Fisker Automotive is starting to emerge from the ashes after its 2013 bankruptcy and buyout by Chinese giant auto parts maker Wanxiang last year. Fisker has opened up a customer support program (CSP) for Karma owners that includes complementary services. For current owners of the Fisker Karma plug-in hybrid, the program will provide parts and labor for covered repairs free of charge up to $2,000; owners are entitled to additional CSP benefits of $2,000 for parts and $1,000 for labor for covered repairs above and beyond the program benefits.
Formula E a Big Hit: The Formula E electric race car series, which went through Long Beach, Calif., in early April, is gaining a lot kudos. Sellout crowds have been showing up, major new sponsors and investors, and a long list of cities interested in hosting future races. “We have over 180 cities that have requested to have a race, and many of them are ready to pay quite substantial money for that,” Formula E CEO Alejandro Agag said.
Toyota and Mazda Partnership: Toyota and Mazda haven been in discussion about trading green technologies. Under a partnership deal, Toyota would supply fuel cell and plug-in-hybrid technology to Mazda; in return, Mazda would provide its proprietary Skyactiv technology to Toyota to grow its lineup of fuel-efficient gasoline and diesel vehicles. The companies have worked together on projects for years, including 2010 when Toyota provided its hybrid vehicle system to Mazda.
ARI SustainableWorks: Leading fleet management services provider ARI just launched ARI SustainableWorks, a consulting service designed to help organizations configure best-in-class fleets supported by clean, efficient, and cost-effective fleet solutions. The consulting team examines the entire life cycle of a vehicle fleet in order to determine how best to customize their recommendations and solutions. This includes evaluating fleet utilization, determining how best to strategically implement clean technology vehicles, developing more efficient driver behavior strategies, and conducting comprehensive fleet emissions reporting.
Paid Public Charging: One of the classic debate topics about electric vehicle (EV) charging stations is who will pay for all the thousands of public stations that need to be deployed to reduce range anxiety. So far, it hasn’t really been EV drivers. Nearly two of out of three public charging stations in US are free to use, according to PlugShare’s quarterly report. For restricted-access public stations, that ratio increases to about 75%. Examples of restricted access charging stations include workplaces with employee-only charging, stations located behind gates, and dealerships with charging for existing customers only.
GM Falling Behind on Battery-Powered Vehicles: General Motors is falling far behind on its original intent to sell at least 500,000 vehicles with some form of battery power – including the Chevrolet Volt plug-in hybrid, Chevrolet Spark battery-electric vehicle, Cadillac ELR plug-in hybrid, and GM vehicles with its eAssist system that boosts fuel efficiency in gasoline-powered cars. The company said it counted 180,834 electrified GM vehicles on U.S. roads last year, up from 153,034 electric-powered vehicles in 2013. The automaker is looking forward to launching its 2016 Volt with an increased driving range of 50 miles on battery; and its Chevrolet Bolt all-electric car that will begin production in 2016 and is expected to have a 200 mile per-charge driving range.

Tesla Energy seems to be the next logical step for the Silicon Valley company

With its new energy storage division (called Tesla Energy), Tesla Motors continues to build on a strategy that’s working for other Silicon Valley neighbors such as Google and Apple. That would be: move into the next logical technology marketplace. Advanced batteries may produce more revenue and profit than electric cars for Tesla in the next few years – and they’ll contribute to Tesla CEO Elon Musk’s vision of reducing dependence on fossil fuels and supporting growth in renewable energy.

Along with its electric drive system, Tesla’s greatest strength is batteries – making its $5 billion investment in the Gigafactory potentially more than worthwhile; the company expects the Nevada factory to reach full capacity by 2020 and make more lithium-ion batteries than were produced worldwide in 2013. Tesla Energy will be ready to bring Tesla batteries to homes, business, and utilities to store energy to better manage power demand, provide backup power, and increase grid resilience – with much of it coming from solar power.

Called the Tesla Powerwall, it includes Tesla’s lithium-ion battery pack, liquid thermal control system, and software that receives dispatch commands from a solar inverter. Tesla Powerwall will be built into a building’s wall and will be integrated with the local power grid so that customers can draw energy from their own reserve. Benefits will include cost savings through load shifting during low rate periods; storing surplus solar energy; increasing the capacity for using more solar; and providing backup energy during grid outages.

It’s available in 10kWh, optimized for backup applications, or 7kWh, optimized for daily use applications. Tesla’s selling price to installers is $3,500 for 10kWh and $3,000 for 7kWh. Those prices exclude inverters and installation costs. The company says that deliveries will begin in the late summer of 2015.

Tesla has been testing out energy storage projects with some big-name partners including Amazon and Target. Amazon’s cloud computing division, Amazon Web Services (AWS), has been working closely with Tesla for the past year on high-capacity battery technology in data center applications. Target has partnered with Tesla on a pilot test at select Target stores to incorporate Tesla Energy Storage as part of its energy strategy. Tesla has also been supplying batteries to Walmart through pilot projects and a supply agreement with SolarCity Corp. Jackson Family Wines is using Tesla’s stationary energy storage solution in four areas that account for the most consumption in its winemaking process: refrigeration/cooling, lighting, compressed air, and process water treatment.

Utilities and solar companies are also working with Tesla on energy storage systems for meeting the next wave of energy demands. Southern California Edison has developed the nation’s largest battery storage system and has contracts in place for an additional 264 megawatts of storage, including projects using Tesla batteries.

Tesla has “channel partners” in place for producing the Powerwall. TreeHouse, a sustainable home improvement store, is working with Tesla to sell the Powerwall home battery. SolarEdge, a leader in the global photovoltaic (PV) inverter market, has a deal with Tesla for joint development of a PV storage and backup power solution for the worldwide residential solar market. Vermont-based renewable energy company Green Mountain Power and Tesla will offer Vermont residents a way to use less energy and rely on the grid as a backup system.

Tesla CEO Elon Musk does have a few things in common with executives at neighboring Silicon Valley giants – with one of them being expanding into the next logical technology marketplace. He serves as chairman of SolarCity, the largest solar power company in the US (and one started up by Musk’s cousins); he leads innovative space travel company, SpaceX (and its Hyperloop high-speed rail project); the Gigafactory, which is still being developed in Nevada; and the Tesla Motors electric carmaking company, which holds the unique position of breaking into the tough auto manufacturing sector – and surviving.

The big question will be whether all of it will work. The massive investment in Tesla since startup has come from private equity shareholders, the stock market, corporate partners (such as Panasonic on the battery side and Daimler on the car manufacturing side), a US Department of Energy loan, and personal investments from Musk from his PayPal startup profits and from other Tesla executives. Tesla Energy will require significant investments in the next few years.

Competition in the energy storage market will be fierce. Coda Automotive may not be around anymore in the electric vehicle space, but Coda Energy does have several clients at commercial and industrial sites. Schneider Electric is known for its electric vehicle charging systems, but has a significant presence in the energy storage market. Major solar companies are entering the storage market, along with commercial building suppliers and large battery manufacturers. It may come together for Tesla, and it’s possible that advanced batteries and energy storage could make for the lion’s share of its revenue in the next 10 years.

Meeting the Multi-unit PEV Charger Challenge

By Joel R. Pointon

Editor’s Note: With plug-in electric vehicle (PEV) charging station operator ChargePoint announcing its multi-unit dwelling charger for apartments and condominiums, I contacted an industry expert on this topic. Joel Pointon, former PEV Program Manager at San Diego Gas & Electric (SDG&E) and Principal at JRPCharge Consulting, serves as co-chair of the California Plug-in Electric Vehicle Working Group for Multi-unit and Workplace Vehicle Charging. Pointon and colleagues see the vast opportunity of bringing more multi-unit chargers to PEV owners – along with several challenges that must be addressed.

Since the introduction of truly commercial plug-in electric vehicles (PEVs) in late 2010, we have firmly established that drivers do more than 80% of their charging at home. It makes perfect sense…… if you live in a single family home and control your parking area. But in reality a significant portion of our population lives in multi-unit dwelling communities (owners and renters) and do not have control over their parking their vehicles – sometimes without any assigned parking. Over 50% of San Diego and 66% of San Francisco residents live in these communities, and future land use planning only points to increasing numbers for both urban and near urban neighborhoods. Although electric-powered vehicles are often a perfect fit for this population, most give up considering it because of the challenges of getting the cooperation of property management and other residents. There’s also the challenge of addressing infrastructure limitations that never considered supplying electricity to parking areas.

After working with the stakeholders in these communities for over five years via workshops and lectures, it has become obvious that there is a real need for education and outreach. The challenge is reaching municipalities, utilities, property management companies, and residents for creating the awareness base – and for better understanding the confusing spectrum of options available to meet this presently unmet need.

Legislative solutions, while well intentioned, have not advanced the cause as of yet. Presently in California, SB 880 and AB 2565 for HOA and rental properties respectively, have attempted to assist individuals that wanted to go it alone and try to install their own charging units in these communities. Unfortunately, both cite a liability insurance provision of $1 million dollars naming the community; that is something the insurance industry has largely not been willing to offer to their customers in these communities. In the past year, the slow pace of progress has prompted all three of the California investor-owned utilities to offer rate-based pilot projects to the California Public Utilities

Commission (CPUC) to consider for multi-unit (and workplace) charging. These range in scope from “make ready” wiring to basically turnkey offerings for charging in these residential environments (applications are available at the CPUC website).

Private offerings have included the NRG eVgo – CPUC settlement offering of “free installation” for charging units where residents pay a monthly fee for access and power; and the recent ChargePoint press release announcing a “packaged” market focus for multi-units. The good news is that gradually the spectrum of charging offerings will continue to expand for this underserved market. Focus in the future will need to stress flexible, cost effective, and innovative approaches in order to become truly successful.

So where to start? What’s the vocabulary? What’s the technology spectrum? This may be a bit overwhelming for someone just approaching the topic. As co-chair of the California Plug-in Electric Vehicle Working Group for Multi-unit and Workplace Vehicle Charging, let me suggest the free downloadable guides available on their resources page as a primer (PEVCollaborative.org) ….and also the free survey available for property managers to “take the temperature” of electric drive appetite within their communities.

When will we know that we have reached the tipping point for making electric fuel an option in these communities? When we finally see PEV charging listed as a standard amenity to attract residents, just as they do a pool or clubhouse today. Until then, we have much work ahead of us.

Joel Pointon, former PEV Program Manager at SDG&E and Principal at JRPCharge Consulting, can be reached by email at JRPCharge@gmail.com.

Editor’s Notes: Will California and other states support plug-in hybrids on the ZEV path?

In October 2013, eight states signed an agreement to support bringing 3.3 million zero emission vehicles (ZEV) to their roads by 2025. Led by California, governors from seven other states also signed a memorandum of understanding to do so – Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, and Vermont. At that time, ZEVs were to include battery-electric vehicles, plug-in hybrid-electric vehicles, and hydrogen fuel-cell-electric vehicles – and could be used in passenger cars, trucks, and transit buses.

More recently, the California Air Resources Board, the agency implementing the ZEV rules in the state, has been leaning toward battery electric and hydrogen fuel cell vehicles while downplaying plug-in hybrid electric vehicles. California has a goal of cutting its carbon emissions 80% from 1990 levels by 2050. Vehicles would need to be fully electric, and plug-in hybrids wouldn’t cut it, said CARB Chairman Mary Nichols.

Here are my thoughts on where this trend could be heading…………..

There might be a way to realistically compromise. Ford, General Motors, Honda, and Toyota have filed a complaint with CARB arguing that vehicle owners are more likely to accept and adopt plug-in hybrids to relieve their range anxiety – and these vehicles are more likely to be accepted in the short run. These automakers pointed to a 2014 analysis by the US Department of Energy’s Idaho National Laboratory to make their case. “Researchers crunched data from 21,600 EVs and plug-in hybrids and found that Volt owners were averaging 9,112 e-miles per year, just shy of Leaf owners’ 9,697 e-miles — even though the Volt can go only half as far before running out of battery power,” according to Automotive News. Dan Sperling, a CARB member and director of the Institute of Transportation Studies at the University of California-Davis, tends to agree with automakers on this point. He would rather see two plug-in hybrids on the road than one all-electric vehicle. Taking a more flexible approach is the way to go, according to Sperling. The state is likely to see far more “e-miles in 2030” by supporting plug-in hybrids than would be seen with pure EVs.

Next-gen batteries are still two-to-three years away. Automakers are working with major battery suppliers to offer electric vehicles that are more affordable to consumers and can go at least 200 miles on a single charge. It’s expected to be two-to-three years from now for that to be here, but it could take longer – and there are only so many Tesla models that can go 265 or more miles out on the roads.

Commercial vehicles need extended range. While some vehicles like drayage trucks at ports might be ideal for battery electric and hydrogen fuel cell, many of them will be on roads for hundreds of miles per day and will need to get there. Trucks being tried out in agribusiness in the Central Valley of California are tipping toward plug-in hybrid systems.

Dual fuel and plug-in hybrid could be a good way to go. What if you were to drive a bi-fuel CNG Chevrolet Impala that was also built on the Voltec plug-in hybrid drivetrain? That would offer the driver an opportunity to power the car on natural gas (which emits about 25% less greenhouse gas than a gasoline-engine vehicle), battery power (zero percent emissions) and then have gasoline left over to power the car to take away range anxiety. That might be ideal for fleets that worry about having drivers stuck out on roads. In the next few years, there will be a lot more clean fuels out there, including dimethyl ether (DME), biogas (renewable natural gas), algae biofuel, biodiesel, and renewable diesel. A plug-in hybrid that also runs on a clean fuel would be able to offer extended range and reduced emissions – meeting all the targets.

OEMs are leaning toward plug-in hybrids. Battery electrics are doing better than plug-in hybrids in US sales right now, but that tends to be weighted toward the Nissan Leaf, Tesla Model S, and the BMW i3. If you look at the product pipelines for major automakers, most of the models coming out are plug-in hybrid. The challenge here will be picking up their sales volume, which will need incentives and more public education about charging and ownership cost. In the long run, plug-in hybrids/extended range electric vehicles appear likely to equal or surpass battery electric and hydrogen fuel cell vehicle sales numbers.

CARB will probably tip in this direction. Automakers are pushing for it and Mary Nichols did acknowledge compromise may be there. Battles between major OEMs and California reached a stalemate in the 1990s, and both automaker executives and government officials in Sacramento are taking a more moderate approach this time around. Nichols said she is wrestling with the best way to reach the state’s emissions goal. “I don’t know where you would find a better example anywhere in the world,” Nichols said, “of a public deliberating body struggling with a really big issue.”

This Week’s Top 10: Federal fleet bringing in lots of zero emission and plug-in hybrid vehicles, Tesla given the greenlight again in New Jersey

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…….

The White House says it will reduce greenhouse gas emissions in the federal fleet by 30% by 2025 as it ramps up purchases of zero emission and plug-in hybrid vehicles. By 2020, zero emission (battery electric and hydrogen fuel cell) or plug-in hybrid electric vehicles will make up at least 20% of new vehicle purchases, and that will go up to 50% by 2025. Federal agencies have also been directed to make sure adequate charging becomes available for these fleet vehicles. It’s part of a broader effort by the federal government to cut greenhouse gas emissions 40% by 2025 over 2008 levels and save $18 billion in energy costs.
Tesla Motors has been given the greenlight in New Jersey to sell its electric cars at non-dealership corporate stores. A bill signed by Governor Chris Christie will once again allow Tesla to directly sell its electric cars in the state through its retail locations. A year ago, the governor enacted a rule that blocked Tesla from selling cars this way, only allowing for franchised dealers to sell new cars in the state. Tesla can no go back to operating up to four retail locations in the state and one service center.
It’s cheaper to pay for a two-year lease now – $199 per month versus the previous $259 for the Honda Fit EV. Customers can extend their lease with unlimited mileage, routine maintenance, and collision coverage if they prefer; new customers can get the same deal on used Fit EV. The Fit EV is powered by a 20-kWh lithium-ion battery and a 92-kilowatt electric motor.
Medium duty plug-in hybrids are popular with fleets – as was discussed during an ACT Expo webinar last week, “Electrify Your Fleet.” Matt Jarmuz, director of sales at Odyne Systems, is seeing fleets save up to 50% or more on fuels switching over to plug-in hybrids, and some are utilizing EPAct credits. Ned Biehl, chief of staff for the Transportation Services & Aviation department at PG&E, says that his fleet is being agnostic to suppliers but sound in their business strategy in choosing the best technology. The fleet has a broad mix of electric, hybrid, natural gas, propane, and biodiesel-powered vehicles.
BMW Group CEO Norbert Reithofer sees the obvious: political initiatives in a number of the carmaker’s key markets are important in helping to boost sales of its i3 electric compact car. Norway is a good example of it for Reithofer, where the government offers a well-established charging structure with free parking and charging and where there are no sales or registration taxes on electric vehicles (EVs); that helped BMW sell 2,000 i3s last year in that country, almost one quarter of its total sales in Norway. Half of its US i3 sales were in California with its rebate for buying an EV and its dedicated carpool lane stickers. EV buyers in Shanghai get to avoid the restrictive and expensive vehicle licensing process; in Europe, the UK and France offer EV buyers financial incentives and Germany exempts EVs from its annual vehicle tax for 10 years. BMW disputed media reports saying its third EV model after the i3 and i8 would be a variant of the X5 premium large SUV. Last year, BMW’s global sales of the i3 and the i8 were a combined 17,800 units.
Automakers are covering their bets when it comes to meeting strict standards in global markets for reducing greenhouse gas emissions and dealing with fluctuating fuel prices. Navigant Research predicts that gasoline-engine vehicles will still be dominant in new vehicle sales and will meet demand from car buyers who aren’t yet ready for electric vehicles. The research consultancy predicts 59% of light-duty vehicles purchased in 2025 will feature turbochargers. Other changes include implementing more lightweight materials in the vehicles, using smaller engines, stop-start technology, cylinder deactivation, direct injection, and transmissions with eight or more speed ratios and high-efficiency internal components.
Tesla Motors doesn’t have a radical new technology rolling out to deal with range anxiety – that worry will be addressed through a software upgrade, according to Tesla CEO Elon Musk. Over-the-air software updates to its Model S sedan will deliver Version 6.2 with two new features — Range Assurance and Trip Planner. One will automatically plan charging stops using the navigation system and the other will warn a driver if a road trip is likely to leave them stranded. These are being tested now with drivers and will be sent out to cars in about a week. Beaming software upgrades will also move the Model S forward on its Autopilot semi-autonomous features. Version 7.0 will arrive this summer. New features haven’t been revealed yet, but it will add to current Autopilot offerings such as the ability to automatically change lanes by flicking on the turn-signal lever.
Ford Motor Co. continues to add to its sustainability roster – its environmentally responsible, high-performance REPREVE fiber that comes originally from plastics dumped into landfills will be available in the all-new F-150 pickup truck. Using the recycled material in the F-150 will allow Ford top divert more than five million plastic bottles from landfills this year.
At the Geneva Motor Show, Mercedes-Benz announced that it will add 10 new plug-in hybrid electric vehicles (PHEV) to its lineup by 2017. That means a new PHEV will be rolled out about every four months. The first one was launched last year in the S500 Plug-In Hybrid, and this month, the new Mercedes C350e will roll out.
To comply with stringent emissions and fuel economy standards while nearly doubling its global sales by 2018, Jeep may roll out a new pickup along with the brand’s first plug-in hybrid electric vehicle. Jeep CEO Mike Manley talked about it during a preview of seven concept SUVs Jeep will take out onto the trails during its annual Easter Safari in Moab, Utah.
Extra: a teaser for Green Auto Market Extended Edition. This week: The Formula E race series appears to be taking electric vehicle technology to a new level, gaining passionate support from Virgin Group founder Richard Branson and the family dynasty of racing legend Mario Andretti. Several people are very excited about that racing event coming to Long Beach, Calif., next month.