Tesla and BMW making deals in China:  Tesla and BMW are preparing to avert some of the steep tariff increases coming out of the trade war between the U.S. and China. Tesla is closing a deal on its second vehicle manufarutinrg plant, in Beijing, in which the U.S. electric carmaker will own 100% of the plant. BMW, which has been in Chinese joint ventures for years, will become the first foreign automaker to own a majority share of a Chinese automobile venture. The trade war continues to escalate, with China on Wednesday vowing to add another $200 billion in U.S. tariffs in retaliation to President Trump’s moves. Tesla CEO Elon Musk made the deal on Tuesday for the Shanghai plant, which the company said will double its vehicle manufacturing capacity. The plant could cost $1 billion to built, and construction will start early next year. Tesla could be the first of many companies setting up shop in one of China’s free-trade zone that sidesteps its typical requirement for joint-ventures with Chinese companies. Beyond expanding the BMW Brilliance Automotive partnership, BMW inked a deal with Great Wall Motor to produce Mini electric vehicles through a new 50:50 joint venture, Spotlight Automotive Limited, which will be dedicated to developing and producing EVs in China.

Looking at the Big Picture:  Green Auto Market’s take on developments impacting the auto industry, global economy, and clean transportation.

Formula E will see more powerful electric racers:  The FIA Formula E racing series will be seeing stronger batteries in its next season ready to power sleek, open-cockpit race cars. These new vehicles, bearing a resemblance to the Batmobile, will be able to hold up to 250 kilowatts of power (about 335 horsepower) and reach speeds of 174 miles per hour. Owners of the electric racers will no longer have to swap cars during the race. The current season is ending in Brooklyn this weekend. The new technology will bring the electric racers up to where they’ve needed to go since Formula E’s inception. “That’s a big, big step,” said Nico Rosberg, a retired Formula 1 driver who’s now an investor in Formula E. “Battery performance is finally at a necessary level.”

Trucking seeing costs spike:  The cargo hauling trucking industry will see increased costs due to a shortage of drivers, new regulations, and strong demand. Inflation is expected to come from America’s vital cargo hauling sector, which is integral to economic growth. Truckmakers are testing out autonomous commercial trucks and platooning, but truck operators won’t be seeing those come to market anytime soon. New government regulations have been targeted at making roads safer while limiting hours on the road for truckers. Rising diesel prices are impacting truck operator profits, but costs are rising overall. The cost of a full truckload has soared this year, according to Cass Information Systems’ measure of per-mile rates. These costs, excluding fuel, leaped 9% in May from a year earlier.

Tesla losing tax credits:  Soon after hitting its 5,000 Model 3s produced per week target, Tesla will see its federal $7,500 tax credits come to an end after passing the 200,000 electric vehicles sold mark. It will be at $7,500 for the rest of this quarter and the following quarter (through the end of 2018), and then will drop to $3,750 for six months. From there, the federal tax credit is cut in half to $1,875 for another six months and then will disappear. The expected tax cut may be one of the reasons that Tesla upped deliveries to Canadian customers in June.

VW settlement funds:  Volkswagen Group’s $30.4 billion “Dieselgate” U.S. settlement is taking shape, including nearly $3 billion going out to states through the Environmental Mitigation Trust. California leads the list, so far securing $422.6 million going toward zero-emission heavy-duty trucks, buses, and charging stations. Texas was second, at $209.3 million, Florida third at $166.3 million, New York fourth at $127.7 million, and Pennsylvania in fifth place at $118.6 million. The next five on the list were Washington state at $112.7 million, Illinois at $108.7 million, Virginia at $93.6 million, North Carolina at $92 million, and Maryland at $75.7 million. School buses are a priority for several states that have received funds. More than 10 states have finalized their plans, according to the Sierra Club. State officials are deciding how the money will be spent meeting guidelines under the settlement. The funding must go towards reducing nitrogen oxides (NoX), a major component of air pollution. Only 15% can go toward the electric vehicle charging infrastructure. The settlement funds are being divvied up based on how many Volkswagen diesel cars with emission-cheating software were registered within each state.

Looking at the Big Picture:  Green Auto Market’s take on developments impacting the auto industry, global economy, and clean transportation.

Implications of trade war on auto industry:  President Trump has placed tariffs on $34 billion of Chinese imports, including auto parts. China, in retaliation, hiked tariffs on U.S. light-duty vehicles imports to 40% from 15%. The trade war has been building for months now, with automakers working hard to ship more vehicles to the U.S. to pre-empt the higher tariffs being slapped on. The ports of Baltimore, Jacksonville, Fla.; and Brunswick, Ga. — the three leading U.S. ports for importing automobiles — in May shipped out a combined 23,000 more cars than they did a year earlier. The port of Long Beach, Calif., saw imports rise 3.4% in May and exports drop 24%. Auto executives and analysts have been reminding the Trump administration that vehicles built in the U.S. are packed with foreign import parts. The cost will be extreme — tariffs that will be placed in imported parts could cost $35 billion along with a whopping $48 billion on tariffs for imported cars assembled outside the U.S., according to the American Automotive Policy Council, a lobbying group that represents the three Detroit automakers. The trade war between the U.S. and China will also have implications for electric vehicle sales, with Tesla particularly vulnerable through building its EVs in the U.S. and exporting to China.

Big oil vs. utilities:  Oil companies and utilities are wondering which of the two economic sectors will dominate the booming electric vehicle charging infrastructure around the world. BP and Shell have charging company acquisitions in the works, with Europe being a key market for EV infrastructure growth. Utilities are preparing to meet the surging demand for electric power for high-volume EV sales in the next decade and beyond. BP will be investing about $170 million to acquire EV charging company, Chargemaster. The major oil company plans to add charging stations to its network of retail fueling stations. Sweden’s Vattenfall and Finland’s Fortum Oyj utilities are currently installing chargers at homes and at workplaces; and the U.S. is seeing utilities playing a major role in building the charging infrastructure.

BYD working with Changan:  BYD has forged a strategic cooperation agreement with Changan Automobile to jointly manufacture batteries for electric vehicles. A new joint venture company has been set up in the city Chongqing in central China. Both companies plan for the total battery production capacity of 10 GWh to be staggered over two phases, with the first stage estimated to amount to 5-6GWh and the second stage 4-5GWh. “This strategic agreement marks a significant milestone in the way BYD conducts its supply and marketing. Today’s announcement has implications for the company’s battery business and the long term development of the entire organization,” said BYD President and Chairman Wang Chuanfu.

Pruitt leaving administration:  Controversial EPA Administrator Scott Pruitt is stepping down, President Trump announced yesterday afternoon. The former Oklahoma attorney general, who had led multiple state lawsuits against the EPA, has been at the center of several ethics charges in recent months, describing them as “unrelenting attacks” in his resignation yesterday. Pruitt had plans to roll back the corporate average fuel economy standards and had heavily cut back on several agency measures that had been enacted by the Obama administration and other previous presidents.

 

Americans for Prosperity beating transit:  Oil billionaires Charles and David Koch stunned observers by backing a voter campaign to thwart a $5.4 billion mass transit project from being funded in Nashville, Tenn. What had seemed like an easy shew-in was defeated this month through successful get-out-the vote activism from Koch brothers-funded Americans for Prosperity. That group is seeing success fighting against other public transit projects around the country. The Koch brothers want to see public transit go away and government funds go into restoring highways and roads. The Koch Industries conglomerate is a major producer of gasoline and asphalt, and also makes seatbelts, tires, and other automotive parts. The Trump administration had promised to back highway infrastructure funding, but that has faded away. Americans for Prosperity is now filling some of that void. Supporters of transit project investments say that having light-rail and more buses reduces traffic congestion and air pollution in a city. They also see transit as a platform for bringing in more electric and alternative fuel-powered buses. The Koch brothers have an opposing agenda, and have also been opponents of electric and alternative fuel vehicle adoption.

Looking at the Big Picture:  Green Auto Market’s take on developments impacting the auto industry, global economy, and clean transportation.
Impressive list of supporters:  General Motors, Honda, BYD, Proterra, Zero Motorcycles, Siemens, Greenlots, and others have signed the Transportation Electrification Accord that outlines how vehicle electrification can be moved forward. Principles have been endorsed on building the needed energy infrastructure to guide local, state, and federal policymakers. Other organizations endorsing the accord include CALSTART, Ceres, Consumer Federation of America, Consumers Union, Electrification Coalition, NRDC, Plug In America, Sierra Club, Union of Concerned Scientists, utility companies, and Clean Cities coalitions. Britta Gross, director, GM’s advanced vehicle commercialization policy, said that “the accord lays out the essential building blocks for a compelling energy infrastructure that we can all rely on for decades to come. Innovations in transportation electrification will benefit society as a whole — and cross-industry, multi-stakeholder cooperation is key.”
Volkswagen AG and Ford Motor Co. have signed an agreement exploring a strategic alliance designed to strengthen each company’s competitiveness and better serve customers globally. The companies are exploring potential projects across a number of areas – including developing a range of commercial vehicles together to better serve the evolving needs of customers. Ownership of new ventures would not involve equity arrangements including cross ownership stakes. Commercial vehicles could be ideal for both companies to share goals in selling electric and alternative fuel vehicles through fleet purchase programs, though the issue of green vehicles wasn’t mentioned in the press release.
Events to consider attending:  CALSTART’s High-Efficiency Truck Users Forum (HTUF) is taking place Aug. 6, 2018, at the Novi Suburban Collection Showplace in Novi, Mich. It’s being held in conjunction with the Ground Vehicle Systems Engineering & Technology Symposium (GVSETS) which convenes Aug. 7-9 at the same location. The one-day HTUF event brings together industry and military stakeholders to identify barriers and opportunities for greater adoption of advanced technologies in these areas. It’s supported by the U.S. Army’s Tank Automotive Research Development and Engineering Center (TARDEC), and focuses on vehicle efficiency, electrification, automation, and cybersecurity. The Battery Show will run alongside Electric & Hybrid Vehicle Technology Expo and Critical Power Expo. It takes place Sept. 11-13 at the Suburban Collection Showplace in Novi, Mich. The Battery Show connects you with more than 8,000 engineers and executives, and more than 600 leading suppliers, across the advanced battery supply chain. Ambri Inc. co-founder and professor of Materials Chemistry in the Department of Materials Science and Engineering at MIT, Dr. Donald R. Sadoway and Chelsea Sexton, Electric Vehicle Advocate and Advisor, will keynote this year’s event. Electric Drive Transportation Association (EDTA) and Oregon Governor Kate Brown today announced that the 33rd International Electric Vehicle Symposium and Exposition (EVS33) will be held in June 2020 and hosted in the City of Portland. The announcement was made during the annual Roadmap Conference organized by Forth. Since 1969, EVS has been a global forum bringing together EV experts. Portland has long been a leader in transportation electrification, with some of the highest per capita electric vehicle sales and densest fast-charging infrastructure in the country, as well as the nation’s first brand-neutral electric vehicle showroom, the Go Forth Electric Showcase. Governor Kate Brown recently signed an Executive Order setting a goal of 50,000 registered electric vehicles in the state by the end of 2020.
UPS will be investing $130 million more into compressed natural gas vehicles, including 400 semi-tractors and 330 terminal trucks and five more fueling stations. Previous CNG investments by UPS included $100 million in 2016 and $90 million in 2017. The 400 semi-tractors come from Freightliner and Kenworth Truck Co., and the 330 terminal trucks by Terminal Investment Corp. UPS is well known for investing in a wide selection of alternative fuels and powertrains. “We strongly believe further investment in our natural gas fleet is a key element to help us achieve our long-term goals for reducing our CO2 emissions,” Carlton Rose, UPS president of global fleet maintenance and engineering. “We demonstrated the effectiveness of natural gas vehicles and fuel in 2017 by using 77 million total gallon equivalents in our ground fleet.”
While city planners are making the convincing argument that mobility services are adding to traffic congestion and air pollution for now, Uber is taking on an alternative approach. On Tuesday, the company announced a pilot program offering financial subsidies to drivers who use electric vehicles; build features into its app that are specific to EVs; and partner with nonprofits and UC Davis researchers to identify ways Uber and policymakers can encourage and reward adoption of EVs. Called the EV Champions Initiative, the one-year pilot program is taking place in seven cities: Los Angeles, San Diego, Sacramento, San Francisco, Seattle, Austin, and Montreal. Incentives are specific to each market, with the company testing different benefits in different places. The incentives and benefits will vary by market.

Three states lead ZEV scorecard ranking:  The Electrification Coalition (EC) today released the ZEV Scorecard, a three-tier ranking system acknowledging plug-in electrified vehicle state-level actions to support adoption of the technology. California, Maryland, and Connecticut made Tier 1; followed by Massachusetts, New York, and New Jersey at Tier 2; and Vermont, Rhode Island, Oregon, and Maine at Tier 3. The coalition used a weighted ranking system and appraised state-level policy actions for three categories: state-provided incentives to consumers; availability and support of public refueling infrastructure; and, outreach campaigns to educate the public. “While there are more than 700,000 EVs on U.S. roads today, electric vehicles are still only about one percent of U.S. light-duty vehicle sales. As state legislatures look to automakers to increase the availability and diversity of PEV models in all ZEV MOU states, the scorecard is meant to be used as a resource for the public and policymakers,” said Ben Prochazka, vice president of the EC. “It’s a tool that can be used to decide whether states should take new, or enhance current, actions that will accelerate consumer demand — in turn catalyzing both vehicle availability and more EVs on the road.”

The full report can be found here.

 

Looking at the Big Picture:  Green Auto Market’s take on developments impacting the auto industry, global economy, and clean transportation.

General Motors has appointed Dhivya Suryadevara as chief financial officer, the first time an auto manufacturer has seen both CEO and CFO jobs held by women; and GM is now the second of two current Fortune 500 companies to do so. Suryadevara, 39, will take over as CFO on September 1, replacing Chuck Stevens, who is retiring after 40 years with the company. She’s been serving as vice president, Corporate Finance, since July 2017 and played a leading role in the automaker’s divestiture of Opel, acquisition of Cruise, investment in Lyft, and SoftBank’s investment in GM Cruise. “Dhivya’s experience and leadership in several key roles throughout our financial operations positions her well to build on the strong business results we’ve delivered over the last several years,” said CEO Mary Barra.
German Chancellor Angela Merkel said in a Berlin speech yesterday that the U.S. runs a trade surplus with Europe when services are included, in a move to rebuff to President Donald Trump’s sustained criticism of German manufacturing exports. Goods may be the old-fashioned way to calculate trade balance, but if you include services, the U.S. has a large surplus with Europe, she said. That follows the G7 summit, where Trump’s attacks had been particularly harsh against NAFTA partner Canada. Tariffs imposed by the Trump administration to aluminum and steel are already pushing up their costs for General Motors, according to CEO Mary Barra. The White House had imposed a 25% tariff on imported aluminum and steel. The Trump administration is also exploring the idea of imposing a 25% tariff on vehicles that are exported to the U.S. from the European Union as well as Mexico, Canada, and China. Barra is concerned that cost increases will impact affordability of the vehicles and consumer appeal. GM would need to be price competitive to maintain its role in global new vehicle sales.
German prosectors have fined Volkswagen a penalty of 1 billion euro ($1.2 billion) for cheating on diesel emissions worldwide. It’s one of the highest fines ever imposed on a company in Germany, the prosector said in an statement. It’s part of a tough campaign Germany is taking on its local companies to implement reforms and bring accountability to the VW scandal that broke in September 2015. Separately, the country’s Federal Motor Transport Authority (known as the Kraftfahrt-Bundesamt, or KBA) discovered five “illegal switch-off devices” on about 1 million Daimler vehicles sold in Europe since 2014. KBA believes Daimler had equipped the device in the majority of its “Euro 6” classified diesel engines manufactured after September 2014 when the pollution standard became effective.
Tesla CEO Elon Musk has bought $25 million worth of stock in Tesla, as the company announced it was slashing 9% of jobs due to “duplication of roles.” Musk increased his stake by about 72,000 shares, bringing the total to around 34 million shares and a 20% stake in the company. Musk would like to calm fears over Tesla’s future right after the electric carmaker on Tuesday said it would be cutting 9% of its workforce, mostly in salaried jobs. Since January, Tesla has added about 8,000 jobs and currently has about 46,000 employees. The new cut will remove about 4,100 jobs.
Ford Motor Co. is offering more electrified vehicles to fleets. It’s all-new Police Interceptor Utility, the industry’s first pursuit-rated hybrid SUV. Hybrid battery packs have been placed inside the vehicle to not compromise available space for passengers or cargo. The idea was to bring improved performance while reducing operating costs for police fleets. Ford is also rolling out the Transit Connect Taxi and Fusion Hybrid Taxi to help taxi operators reduce fuel costs. Ford says that the Transit Connect Taxi opens up space. It offers 60 cubic-feet cargo volume behind the second row, more than the Nissan NV200 Taxi.

Daimler electrifying trucks and buses:  Daimler Trucks is ready to play a leading role in the electric commercial vehicle space, with announcements yesterday of a line of electric trucks and buses. Pilot programs will launch later this year, and the company will go to full-scale production by 2021. During an event at Portland International Raceway in Portland, Ore., an electric version of its Freightliner Cascadia heavy-duty truck was revealed, along with an electric version of its M2 medium-duty truck. The eCascadia will go about 250 miles per charge, and the eM2 will go about 230, the company said. Daimler has previously shown off its Thomas Built battery electric Saf-T-Liner school bus and the electric Fuso eCanter delivery truck. “We are the undisputed global leader of the trucking industry and we want to remain in that position with regards to electric trucks,” said Martin Daum, global head of Daimler’s Trucks & Buses division.

Tesla shareholder vote:  Tesla chief Elon Musk survived the first serious attempt by major investors to cut back what he’s able to do while running the electric carmaker, but the controversies and bad news continue for the company. A few leading Tesla shareholder funds had been demanding that three board members — directors Antonio Gracias, James Murdoch and his brother, Kimbal Musk — be removed from office. They also wanted Musk’s authority to be softened by taking away one of his titles with him remaining either CEO or chairman. The opposition failed to reach vote during the annual shareholders meeting on Tuesday. Musk said the company is ready to bring its long-promised goal of producing at least 5,000 Model 3 electric cars per week into play by the end of this month. News was also revealed about plans to open up the next Gigafactory near Shanghai, China. The electric carmaker has been dealing since then with more bad news, including: 23% of Model 3 orders were refunded according to a new report that Tesla is disputing; a Tesla Model X that crashed in California while using the Autopilot semi-autonomous system sped up to 71 mpg right before slamming into a highway barrier, investigators said; and former occupational health officials say that Tesla should release more information on worker safety and injuries than the company has done so far.

China EVs:  The new energy vehicle market saw new developments yesterday. General Motors will be rolling out 10 more electrified vehicles in China from 2021 through 2023. That will join the 10 electrified vehicles GM and its Chinese joint ventures have already planned through 2020. Daimler and its partner in China, BYD, will each invest 400 million yuan ($62.5 million) to make improvements in their previously unprofitable electric vehicle joint venture, Shenzhen Denza New Energy Automotive. Denza launched sales of the Denza 300 electric compact sedan in 2014. Last year, the two companies had invested an additional 500 million yuan ($72.6 million) into the joint venture.

Three states renew EV investments:  During this past week, California, New York, and New Jersey have announced significant government incentives and funding programs for electric vehicle purchases, home charging, and the charging infrastructure. California will see $738 million made available over the next five years. The state’s goals are to expand the charging network for both personal cars, electric trucks, and other large vehicles. New York is offering $250 million for 200 fast chargers on highways and in cities, along with 400 public charging stations at parking lots, airports, and train stations. New Jersey’s public utility company is investing $300 million to build out the state’s charging network to 50,000 charging points in neighborhoods, office parks, and along major roads. The 16,000 EVs in New Jersey will potentially expand up to 275,000 in the next seven years, the New Jersey utility said.

Consumer Reports gives thumbs up to Model 3:  Tesla, Inc., has received some good news from Consumer Reports, which at first had appeared to be another ding during a difficult time for the company. The consumer publication reversed course and now recommends the Tesla Model 3 after the electric carmaker sent an over-the-air update this week that improved the car’s braking distance by nearly 20 feet. There are still other flaws with the electric car, but it scores high enough to recommend, said Jake Fisher, CR’s director of automotive testing. The strong rating comes after a wave of crashes involving Tesla’s Autopilot semi-autonomous system where Teslas operated on Autopilot have crashed into emergency vehicles parked on the shoulder or stopped in traffic. The most recent took place in Laguna Beach, Calif., where a Model S that was allegedly driven on Autopilot crashed into a parked police vehicle. The Tesla drivers suffered minor injures and the police car had no one onboard at the time. Tesla is also struggling to increase production of the Model 3 and win back better ratings on Wall Street.

Dramatic growth expeced in EV sales:  The International Energy Agency expects to see huge growth in global electric vehicle sales — bringing the global fleet up to 13 million by the end of this decade from 3.1 million documented last year. Sales may grow 24% per year on average through 2030. The agency expects that government policies limiting air pollution and greenhouse gases will drives the change. Aggressive EV production launches by several automakers are also part of the forecast. “The dynamic policy developments that are characterizing the electric car market are expected to mobilize investments in battery production, facilitating cost reductions and ensuring that battery production takes place at scales that exceed significantly what has been seen so far,” said Pierpaolo Cazzola, senior energy and transport analyst at the IEA.

Speakers addressing e-mobility and the grid:  Electric Drive Transportation Association is hosting the next installment in its Leader Series, “Building the Modern Grid with E-Mobility” on June 13 from 1:00 to 4:00 ET at the National Press Club in Washington, DC. California Public Utilities Commission President Michael Picker will provide the keynote presentation. Michael Pesin, Deputy Assistant Secretary for the Advanced Grid Research and Development Division in the U.S. Dept. of Energy’s Office of Electricity Delivery and Energy Reliability, will provide insights on federal initiatives on e-mobility and the grid. The afternoon program will feature key industry and policy leaders, interactive presentations and discussion.

GM Cruise gets whopping investment:  General Motors’ Cruise Automation has received $2.25 billion investment from SoftBank Vision Fund, a Japanese tech investor group, to go toward expanding its presence in autonomous vehicles. The deal will give SoftBank Vision a 19.6% stake in GM Cruise, which includes Cruise and Strobe Inc., a Lidar company that GM acquired last year. The SoftBank investment will involve two phases: a $900 million initial funding followed by a $1.35 billion round.

Waymo and FCA forge AV deal:  Waymo just made a deal with Fiat Chrysler Automobiles for an additional 62,000 Chrysler Pacifica minivans to be deployed as robotaxis. The deal also sets the platform for the two companies to start discussions on eventually selling autonomous vehicles to buyers as personally owned vehicles. The new partnership expands the relationship between Waymo and FCA, which began in May 2016 with the purchase of 100 Pacifica Hybrids for use in Waymo’s test fleet. It indicates Waymo may be converting vehicles over to self-driving units for sale to other companies. One of them could be ride-hailing giant Uber. CEO Dara Khosrowshahi said during a talk yesterday that his company is in discussions with Waymo to provide vehicles for Uber’s fleet.

Tesla setting up factory in China:  Tesla Inc. is preparing to set up shop in China and overcome the joint venture stumbling block that had been in the way. The electric carmaker has invested 100 million yuan ($15.8 million) and registered to establish a wholly owned company in Shanghai, a Chinese government agency has posted on its website. The national government has been working on ways that companies like Tesla can go outside its traditional model of establishing JVs with Chinese automakers to assemble cars in their country. Tesla’s registration includes technological development and services on EVs, auto parts, batteries, energy storage facilities and solar panel products. In this month’s earnings call, CEO Elon Musk said that the company will announce setting up a Gigafactory for batteries in China as early as the third quarter of this year; he’d previously said Tesla will probably be building the Model 3 and Model Y crossover in China.

EQ bringing strong branding to EV market:  Mercedes’ EQ subbrand is a valuable opportunity to showcase the automaker’s technical know-how and competence, according to Britta Seeger, Mercedes-Benz global sales and marketing boss. The company will showcase EQ to consumers to prepare for the EQC crossover going on sale in 2019. The Daimler division plans to sell 10 long-range EQ vehicles by the end of 2022; and thinks that the subbrand will represent 15% to 25% percent of its global sales by 2025. “This is our answer in electrified mobility,” Seeger said. “And we truly believe in strong branding.”

Subaru rolling out PHEV:  Subaru will be entering the electric vehicle market through its alliance with Toyota. The 2019 Subaru Crosstrek Hybrid will soon be launched, built on the Toyota Prius Prime drivetrain. Subaru has been showcasing EV concepts for years, including the Viziv series. The company launched a conventional gas-electric hybrid version during the 2014 model year. The new version will have a larger battery pack and a plug for owners to charge up their PHEV. It can be driven as a normal hybrid using both gas and electric power, or driven on pure electric drive for local commuting, the company said.

VW moving beyond Dieselgate toward EVs:  Volkswagen AG is still climbing hurdles to recover from its Dieselgate scandal and to take a leading role in being Tesla-competitive on the electric vehicle front. Former VW CEO Martin Winterkorn was charged in federal court in Detroit with conspiring to mislead regulators on diesel emissions cheating. VW CEO Herbert Diess has been granted safe passage in the U.S. and advance notice if prosecutors seek to charge him, sources told Bloomberg. Last week, Diess told investors during the company’s annual shareholder meeting in Berlin that VW has awarded 40 billion euros ($48 billion) in contracts to battery producers, double the amount that had previously been in place. VW will be spending on EV batteries an amount that nearly matches Tesla’s entire market value. The automaker plans to sell up to three million all electric cars per year by 2025, Diess said.

VW’s Electrify America subsidiary was a topic of much interest during the ACT Expo in Long Beach, Calif. A map was added to its website last week showing where its projects stand to install or start construction of more than 2,000 chargers across the U.S. by the end of 2019.

NGVAmerica is offering a resource center that shows where VW stands on spending $2 billion on national zero emission vehicle investments and $2.9 billion through the Environmental Mitigation Trust, which states and territories may use to invest in transportation projects that will reduce NOx emissions.

Saving the fuel economy and emissions rules:  While auto executives had pushed hard for the second phase of the federal fuel economy and emissions standards to be extended to the original timeline, they hadn’t been advocating gutting the rules. Automakers will be visiting the White House this Friday to save the national fuel economy and emissions standards close to what they’d originally agreed to with the Obama administration. A leaded draft proposal by federal agencies, the Trump administration plans to keep standards for 2020 model years vehicles in place at about 37 mpg through the 2026 model year, much lower than the 46.8 mpg fleet wide average in the current standard. It would be more than what the automakers had bargained for when requesting a revision of the 2022-25 targets; they’d asked that it be more gradual and flexible, not that it be gutted by the federal government.

ACT Expo panel on urban mobility:  “Clearing the last mile hurdle,” is viable and starting to happen in increasingly crowded and polluted cities, according
to panelists last week at ACT Expo in Long Beach, Calif. Electric trucks, autonomous vehicles, and bicycles will play their part. Here were a few of the points they made:

Austin Hausmann, Chanje’s vice president of product development and R&D

• The Chinese truckmaker offers a Class 5 electric delivery van – the V8070 – with 6,000 pounds of maximum payload capacity, and more than 150 miles of range from a 100-kWh battery pack. 
• Delivery vehicles working in large cities are averaging about 70 miles traveled per day.
• Electric vans and trucks are ideal for urban delivery. Chanje has been able to meet the range requirements and provide a 70% reduction in maintenance and fuel costs to fleet users.
• A key challenge to be faced is charging infrastructure planning over the next five years as more electric vehicles come into fleets.

Duane Hughes, president and COO, Workhorse Group

• Workhorse’s delivery drone, first shown in February 2017 with UPS, is offering major last mile cost savings for fleet operators. The company has found there to be 3 cents per mile in delivery costs for the drone, compared to 40 cents for an electric van and $1 for the typical UPS truck.
• The company has been working with the Federal Aviation Administration on monitoring air traffic, no-fly zones, and weather conditions.
• Workhorse is still in the testing phase, doing about five drone deliveries per day.
• It will be available commercially by the end of this year, with FAA approval already being achieved. The company is sharing its data collection with the federal agency.

Chris Nordh, senior director, advanced vehicle technologies and global fuel products, Ryder Systems

• The commercial space has to make financial sense — the last mile is a good argument for electric vehicles.
• There is strength in partnerships, such as Ryder announcing a 10-year strategic agreement last year with Workhorse. Ryder is the primary distributor and service provider for Workhorse light- and medium-duty range-extended electric vehicles in North America. The company also established an exclusive sales channel partnership and service provider relationship for Chanje’s medium-duty EVs and energy services. In December, Ryder announced it will take delivery of 125 electric medium-duty delivery vans from Chanje. 
• For early adopters, Ryder is providing the vetting process — getting the vehicle ready, maintenance process, and charger installation.
• It’s important to assist site managers in understanding their buildings and charging needs, to work with utilities, and to understand the costs involved.

Thomas Madrecki, director of urban innovation and mobility, UPS

• About 70% of the world’s population will be living in cities by 2050, making it a difficult scenario for package delivery and other mobility services. E-commerce from Amazon and other companies is seeing huge growth, and that will continue.
• Upcoming trends include worsening road and highway congestion, safety limitations on vehicle travel, and cities taking on more infrastructure supporting walking and biking. Cities area also taking a leading role on climate change, which will impact they types of vehicles allowed to drive there.
• UPS is testing out bicycles for last-mile delivery in Hamburg, Portland, Ore., and Ft. Lauderdale. Bicycles have their limitations for what can be delivered, but UPS sees the importance of looking for diversity of solutions for each neighborhood served.

Panelists also had some insights to share during the Q&A portion:

• Countries in Europe and Asia are dealing with congestion zones. The U.S. is taking more of a hybrid approach.
• Uber, Lyft, and other mobility companies are adding to the challenges — bringing additional vehicles to roads and increasing traffic congestion
• The charging infrastructure is a top concern for the future of electric mobility in cities. Charging at night, working closely with utilities, and tapping into state and local incentives is helping fleets grow their infrastructure. 

Staying the course on federal fuel economy and emissions standards, vehicle electrification and all its challenges, and advancements in clean vehicles and fuels, were key themes addressed at this year’s Advanced Clean Transportation (ACT) Expo in Long Beach, Calif.

Keynote speakers at “Global Trends Accelerating Advanced Transportation Innovation” on Tuesday morning said they would prefer to see that the single national emissions standard launched during the Obama administration stay in effect during a time when the Trump administration prepares to roll back the federal fuel economy and emissions standards. Mary Nichols, chairman, California Air Resources Board; Steve Gilligan, vice president, product and vocational marketing, at Navistar; Tamara Barker, chief sustainability officer and vice president of environmental affairs at UPS; Julie Furber, executive director of electrification at Cummins; and James Burrell, assistant vice president, advanced powertrain group, American Honda Motor Company, Inc., spoke to the issues. 

California and 16 other states had announced that morning that they have jointly sued the U.S. Environmental Protection Agency over EPA Administrator Scott Pruett’s decision to roll back standards for vehicles built from 2022 through 2025. While the feedback period has been reopened by the Trump administration, the EPA administrator is preparing to cut back the standards with the argument that they’re too difficult for automakers to achieve.  

ACT Expo 2018 was a platform for several significant announcements:

Electric trucks:  Battery technology is improving so rapidly, it is becoming more realistic to expect faster adoption of commercial battery electric vehicles (CBEVs), according to Mike Roeth executive director of North American Council for Freight Efficiency (NACFE). Roeth gave a presentation on a guidance report released May 1 at the conference by NACFE analyzing the interest fleet owners have in electric trucks and the challenges faced to transition over from diesel to electric. Fleets using EVs for urban delivery in predictable routes between 50-100 miles per day are likely to be the first adopters of electric trucks and vans as the industry norm, according to the study. 

Several speakers and panelists during the week addressed the issues that vehicle electrification faces in fleet adoption. One of these concerns is substantial growth needed in the charging infrastructure that faces challenges in funding, securing space on real estate properties, and meeting building code enforcement.

Meritor and Blue Horizon:  Jay Craig, CEO and president of Meritor, gave a keynote presentation about how Meritor, an automotive components manufacturer, is investing and adapting to clean technologies. Rather than fighting off new clear air standards, his company decided to embrace the technology and move it aggressively to market, he said. Meritor also launched Blue Horizon during ACT Expo, a new technology brand  representing  the  company’s  emerging  platform  of  advanced technologies  centered  on  electric  drivetrain,  efficiency,  and  connectivity  systems. Products offered  under  the  new  brand will include integrated electrified  solutions for Class 4-8 commercial  vehicles  across  multiple  vocations,  including  pickup  and  delivery, drayage/terminal  tractors,  transit  and  school  buses, as  well  as  linehaul  and  other  heavy-duty applications.  

Award winners:  This year’s winners of the ACT Expo awards recognizing fleet operators who show true leadership in clean transportation were — Total Transportation Services, Inc. (TTSI) in the Leading Carrier category; Stark Area Regional Transportation Authority (SARTA) in Canton, Ohio for the Transit & Mobility category; City of Dublin, Ohio in the Leading Public Fleet category; Bimbo Bakeries USA for Leading Private Fleet; and WallyPark for Leading Airport Fleet.

Propane vehicles:  More than 13,000 propane autogas fleet vehicles were sold in 2017, according to data compiled by the Propane Education & Research Council. The new vehicles will annually consume approximately 36.8 million gallons of propane, and many will be displacing fuels with higher emissions like gasoline and diesel. “Propane autogas overcame significant challenges in 2017 — from the absence of federal incentives for alternative fuels from the federal government, to incredibly low gasoline and diesel prices throughout much of the year — and we received an overwhelming endorsement for our fuel in all markets. Propane autogas sales virtually held steady in a year where the conventional fuels held all of the advantages,” said Michael Taylor, director of autogas business development for PERC.

Clean Cities anniversary:  The U.S. Department of Energy’s Clean Cities program will be celebrating its 25th anniversary this year. More than 100 Clean Cities coalitions have collectively saved more than 8.5 billion gallons of petroleum nationally, according to the DOE. Comprised of business leaders and fuel providers, government agencies and community groups, the coalitions continue to support and develop projects designed to cut petroleum use in transportation. 

New company name:  Trillium CNG has changed its company name to Trillium. The company has been a top supplier of CNG services for more than 20 years and will continue in that space. Company officials simultaneously announced the name change and a partnership with California-based EV Connect, a provider of electric vehicle (EV) charging solutions. “We believe our company name should fully reflect our offerings. By adding alternative fueling solutions like EV charging and hydrogen fueling to our portfolio we are helping customers reduce tailpipe emissions. Pairing those solutions with renewable fuels reduces the total lifecycle emission profile of our customers’ fleets,” said Bill Cashmareck, managing director of Trillium.

California’s investment in clean vehicles:  California  officials  announced  that the  state  has invested  more than  $1.2  billion  into projects  that  put  a  growing  number  of  zero-emission  and low-carbon  buses, trucks,  and  cars  onto  California’s  roads  and  highways.  About 48%  of these  investments  have been directed toward low-income  and  disadvantaged  neighborhoods – those  most  in  need  of  improvements  in  air  quality. One of these projects will be delivering dozens of electric school buses to rural school districts to help bring low-carbon transportation to students and drivers.

Electric delivery van:  Workhorse Group and commercial vehicle supplier Dana Inc. unveiled a Class 5 van powered by a jointly-built electric axle. The all-electric vehicle is a combination of the chassis and battery pack from a Workhorse E-Gen van, the body of a Morgan Olson UPS delivery truck, and the new Dana axle. The concept vehicle is not yet scheduled for production but interest from potential customers could bring it to market, according to Workhorse. 

Fleets using biodiesel:  According  to  a  new  2018  Fleet  Purchasing Outlook  study  conducted  by the  NTEA – The  Association  for  the  Work  Truck  Industry – 75% of  fleet respondents  planning  to  acquire  trucks  in  2018  anticipate  maintaining or  increasing  use  of  diesel  engine powered  trucks. Additionally,  the  survey  indicated  that  biodiesel  is  now  the  most  popular  alternative  fuel  option  on  the  market, followed  by  E85, CNG, and  electric  hybrid. Survey  data  shows  18  percent  of  fleet  participants  use  biodiesel now – up  from  15% in  2017.

Ultra Clean Diesel:  Renewable  Energy Group,  Inc. unveiled REG  Ultra  Clean  Diesel,  a  patent-pending  fuel  blend  of  renewable  diesel and biodiesel. “REG  Ultra  Clean  Diesel  is  a  CARB  approved  fuel  that  significantly  reduces  emissions, blends  easily  with  petroleum  diesel,  and  is  one  of  the  cleanest  and lowest  carbon intensity  liquid  fuels  available,” said  REG’s Gary Haer,  vice  president,  sales  and  marketing.  “REG  is  uniquely  positioned  to  offer  both  our  biodiesel  and  renewable  diesel  in  a  blended  product.    We  are  committed  to  delivering  solutions  to  our customers  in support  of  clean  air  and  sustainability  initiatives.”

ROUSH unveils EVs:  ROUSH  CleanTech  unveiled  its  newest  carbon footprint-friendly  vehicle — an  all-electric  vehicle built on the Ford  F-650 chassis. The all-electric vehicles will have  a  lithium-ion  battery  system  of  up  to  225  kilowatt  hours and  700  volts.  Depending  on  the  vehicle’s  GVWR,  the  average  range  will  be  up  to  120  miles  with  a  top  speed  of  75  miles  per  hour. “An electric  battery  option  for  medium-duty  trucks  and  buses is a  great  fit  as  there  is  increasing  demand  in  this  gross  vehicle  weight  range  (GVWR)  with  very  few  OEM  solutions,” said  Todd  Mouw,  president. “This  builds  from  our  robust  foundation  already  in  place  at  ROUSH  CleanTech  that  supports  more  than  1,200  customers  and  19,000  propane  and  natural gas  units  on  the  road.”

Peterbilt also goes electric:  Heavy-duty truck manufacturer Peterbilt launched its all-electric Model 579. It was built by the company in collaboration with Transpower, the California Air Resources Board, and the Port of Long Beach. The heavy-duty Model 579 truck has been designed as a drayage application tractor that will go into service soon at the Port of Long Beach. It’s got 490 horsepower with a 200-mile range through its battery pack with the options of 350-to-440 kWh of power. The recharge takes up to five hours.