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NAFA and CALSTART launch Sustainable Fleet Standard Program

During its annual conference last week, the NAFA fleet management association launched the Sustainable Fleet Standard Program in collaboration with CALSTART. It a first-of-its-kind “best practices” program supporting fleets in increasing efficiency and reducing emissions and fuel consumption for their vehicles. “The importance of sustainable practices becomes more evident each day,” said NAFA President Claude Masters. “By becoming more energy independent and efficient, our members will extend benefits to their bottom line and their customer base.”

The Sustainable Fleet Standard Program will be complimentary to existing federal programs, but also sets a standard by which fleets can assess their progress. The program has two purposes – to encourage and make it easy for fleets to take first steps toward clean transportation; while also setting a strong framework to reward those fleets already taking real action. Member organizations will be assisted in assessing their practices to decrease fuel dependence and emissions; and to increase vehicle efficiency, improve performance, and reduce harmful pollutants. In recent years, many fleets have been learning the win-win scenario clean transportation brings in reducing emissions and operating costs.

CALSTART has been working with NAFA for several years on providing educational resources to fleets on advanced and clean vehicle technologies. The non-profit organization has more than 150 member companies and works with industry and government partners to support growth in the industry. “NAFA’s central role in the fleet industry will help this program create a tipping point for sustainable transportation,” said John Boesel, president and CEO of CALSTART. “We’re working with NAFA to make sure the standard is strong, but easy to use by any fleet, whether just starting out or far down the road on sustainable operations.”

The timing of this launch has been quite relevant. NAFA says that developing and launching this new program coincided with a speech given by President Barack Obama in February 2014 supporting a national vehicle sustainability initiative. “By applying this standard to fleets and vehicles of all sizes, NAFA is engineering a program that has the power to shift vehicle sustainability standards on a universal level,” NAFA’s press release says. You can also learn more and stay informed on the program as it approaches implementation, at NAFASustainable.org.

GM, Schneider and Waste Management honored in sustainability awards

General Motors, Schneider Electric, and Waste Management were honored for sustainability initiatives in the second annual Environmental Leader Product & Project Awards. A panel of distinguished judges scored entrants in the competition based on excellence in energy and sustainability management. Click here to download the report.

General Motors was honored for “Driving a Global Movement for Zero Waste,” through its global manufacturing sustainability campaign. It’s based on reducing landfill waste to zero, and from turning those scraps and waste materials into a revenue stream.

In 2012, GM generated an estimated $1 billion in reuse and recycling revenue from its byproducts; the automaker eliminated 11 million metric tons of CO2-equivalent emissions. GM has also become known for its land-fill free production facilities with 108 of them now in place. The goal is to bring that number up to 125 by 2020.

To accomplish its goals, GM uses a variety of methods including data collection and monitoring systems, employee and external engagement initiatives, and creative reuse and recycling. Results are reported monthly by GM plants, offering a company standard to benchmark against. GM has been sharing its strategies with members of its value chain and to the manufacturing industry.

Schneider Electric, which plays a significant role in the electric vehicle charging infrastructure, and the Sustainable Apparel Coalition (SAC) were recognized for development of “Higg Index 2.0.” SAC’s index was first introduced 18 months ago; this new version brings in an online platform developed by Schneider Electric; it’s added the ability to share users’ sustainability data, increase accuracy, and add measurability for materials and processes. This brings greater transparency and accountability through the apparel industry’s supply chain. The companies say that Higg Index 2.0 adds to the 1.0 version by including new measurement data to help assess chemical and social impacts of products.

Waste collection giant Waste Management was honored for what it brought to the Phoenix Open golf tournament. The PGA’s most highly attended golf tournament was turned into its most sustainable one. The company aimed to make the tournament a zero waste event by diverting all of its waste to recycling, composting or waste-to-energy. Along with using the renewable energy sources of wind, solar, and biomass, greywater to save water, 63% of the transportation vehicles used during the golf tournament were run on alternative fuels.

Waste Management has more than 3,000 heavy-duty natural gas trucks in North American cities today; the company plans to ultimately convert its entire fleet of 18,000 collection vehicles over to natural gas and has more than 50 natural gas fueling stations in place.

Big Picture: Plug-in electric vehicle sales (especially the Leaf) have a great month, Bad news for California green car shoppers

Sales of US plug-in electric vehicles were solid in March, with the Nissan Leaf seeing its best March ever. About 9,000 EVs were sold last month, versus about 6,900 in February – an increase of about one third. The Leaf had 2,507 units sold in March and 5,184 for the quarter; Nissan had a 12% increase in Leaf sales over March 2013. The Leaf was far ahead of the Chevrolet Volt in March and in the first quarter; General Motors reported that the Volt sold 1,478 in March and 3,296 in the first quarter. The March figure was exactly the same number of units sold in March 2013, and its best monthly sales figure since December 2013. Tesla doesn’t report its monthly sales figures, but it’s estimated to have been in the 1,200 to 1,300 range, down from February sales.

The Toyota Prius Plug-in Hybrid came in right behind the Volt and likely ahead of the Model S at 1,452 sold in March. That was nearly double the 786 plug-in Priuses sold a year ago and its best monthly figure since October 2013. The Ford Fusion Energi and C-Max Energi both saw increases in March over the previous month and year, with the Fusion Energi selling 899 units and the C-Max Energi closing the month at 610 sold.

And in other clean transportation news……..

Car shoppers in California will be sad to hear that they’ll have to wait a few months to get rebate checks – and if they’ve purchased a plug-in hybrid, they won’t receive a green carpool lane sticker (granting driver-only access to diamond lanes). Funds for the $2,500 rebate on battery electric vehicles and $1,500 for plug-in hybrids have run out. Funding for the state’s Clean Vehicle Rebate Project is expected to come back but probably not until late summer or early fall. Green HOV carpool lane stickers for plug-in hybrids ran out after 40,000 of them had been issued. Battery electric vehicles will still be receiving carpool lane stickers.
The school bus market has been where propane autogas has taken big steps forward in recent years, and there’s been another sizable purchase announcement – the nation’ largest single order of autogas-fueled buses by a single district. Broward County Public Schools (based in Ft. Lauderdale, Fla.), the nation’s sixth largest school district, purchased 98 alternative fuel school buses to lower its operating costs while improving the environment. The county expects a six-month return on investment for the additional cost of these alternative fuel buses; the county will be able to lock in an autogas fuel price at substantially less than the cost of diesel and expects to reduce maintenance costs due to propane’s clean-burning properties.
Natural gas vehicles (NGVs) have passed a couple of milestones with fleets. Ryder System, Inc., has driven over 20 million miles with more than 500 liquefied natural gas and compressed natural gas vehicles in its fleet. The company reported that it replaced about 3.1 million gallons of diesel fuel with domestically produced natural gas and reduced more than 559,000 metric tons of carbon dioxide emissions. Waste Management is continuing its commitment to NGVs replacing diesel-fueled trucks; the garbage transport company expects to possibly convert its entire fleet over to compressed natural gas vehicles by next year.
Tesla Motors and the Alliance of Automobile Manufacturers filed a petition with the National Highway Traffic Safety Administration seeking permission to replace side mirrors with cameras. Cameras could be mounted on the side, and they would be much smaller than typical side mirrors and placed just about anywhere on the vehicle. They would help aerodynamics and fuel economy. A few experts are very nervous about the safety ramifications.
As for green vehicle conferences……Plug-In 2014 will be taking place at the San Jose Convention Center on July 28-30. Details will be coming out soon. As for ACT Expo 2014, check out the preview guide.
Average fuel economy for new vehicles sold in the US is continuing to rise. It reached a new high in March at 25.4 mpg, according to researchers at the University of Michigan Transportation Research Institute. That number has been climbing steadily since the beginning of the year.
BMW, Daimler, Honda, Hyundai, Toyota and several hydrogen and fuel cell supplier companies have agreed to deploy a total of 110 hydrogen fuel cell vehicles in several European locations including Copenhagen, London and Munich and develop new clusters of hydrogen refueling stations in a deal valued at $51.5 million. They are expected to be operational by 2015.
California Air Resources Board has modified its zero emission vehicle credits for automakers, taking away some of the credits for Tesla Motors and other OEMs. Tesla sold credits worth $129.8 to other automakers last year in California; that was based on seven credits per car sold in the state, and it’s been dropped down to four credits per car sold.
Zap and Jonway Auto have launched the “Urbee,” the smallest electric vehicle in their EV product line. The neighborhood electric vehicle is being marketed to aging populations in smaller cities and for utility government vehicles. Santa Rosa, Calif.-based Zap and its China-based Jonway Auto subsidiary unveiled the Urban EV at the Chinese Electric Motor Vehicle Exhibition in March.
ParkMe, which provides parking information and reservations by mobile devices, is expanding its market beyond Planet Earth. The company announced that its reservation system will go into immediate effect at every one of the Earth’s extra-orbital docking stations, and it’s set to expand beyond Mars by summer. “With the launch of ParkMe’s new technology, the galactic community will never again worry about circling the galaxy looking for a space to park,” the company said. Editor’s note: This announcement was made on April Fool’s Day, so you might want to wait on booking your intergalactic travel reservation.
GM is expected to announce it will update its Detroit-Hamtramck assembly plant, spending $450 million and adding 1,400 new jobs. It’s tied into building a redesigned Chevrolet Volt that likely to launch in model year 2016.

Navigant Research report and supply chain sustainability standards point to an evolving auto industry

The roles played by global automakers are continuing to shift in two core areas: what products and services will be delivered and how vehicles will be manufactured. A new study by Navigant Research and revised supply chain sustainability standards agreed upon by leading automakers illustrate the evolving automotive marketplace and the role clean transportation standards will play. As previously mentioned, the identity of automakers is changing from vehicle builders to transportation service providers.

Navigant Research’s new report, “Alternative Revenue Streams for Automakers,” analyzes the push toward a more sustainable transportation system that’s coming through plug-in electric vehicles (PEVs), vehicle-to-grid, vehicle-to-building, home energy management, solar energy, charging, carsharing, and smart parking services. Now that PEVs have been adopted by thousands of consumers, automakers are seeing more opportunities to play a role in home electricity networks, workplaces, and commercial locations that need integration of charging services. Automakers in North America, Europe, and Japan face stringent fuel economy and emissions reduction targets – and mature markets where new vehicle sales are starting to flatten out. Playing an expanded role in sustainability transportation meets their need for additional revenue streams and complying with government mandates.

Another factor behind these trends are growing concerns about increasing urbanization that will lead to increased traffic congestion and air pollution. Greater restrictions on vehicle use are being seen in London, New York, Beijing, Tokyo, and other major cities. Automakers such as BMW are creatively testing out new programs to address urbanization that include carsharing, smart parking, and charging locations connected to mobile devices. The main challenge automakers face is lacking the expertise and experience to move forward in new areas such as home energy management or vehicle-to-grid – so partnerships with suppliers with expertise in these new systems are being tested out.

These alternatives will not replace the manufacturing and marketing of new vehicles, but are expected to generate more than $1 billion in revenue for the auto industry by 2018, according to the report. Carsharing services will play a large part in this revenue, followed by vehicle-to-grid.

Fourteen major automakers have just agreed to the “Automotive Industry Guiding Principles to Enhance Sustainability Performance in the Supply Chain.” Two leading corporate responsibility business associations, AIAG and CSR Europe, have expanded automaker membership for suggested principles for supplier relationships based on sustainability standards that were first adopted in 2009. Now, participants include BMW, Chrysler, Daimler, Fiat, Ford, General Motors, Honda, Jaguar/Land Rover, PSA Peugeot Citroen, Scania, Toyota, Volkswagen, Volvo Cars, and Volvo Group.

This set of broad principles for suppliers addresses environmental issues, working conditions, human rights, and business ethics. The guidelines apply to first-tier suppliers as well as their subcontractors and suppliers. Affected business practices in the new standards include: reducing greenhouse gas emissions, energy, and water consumption; increasing use of renewable energies; improving waste management; and training of employees.

The list of global automaker that have signed on to these standards is missing some of the major companies such as Nissan Renault, Hyundai Kia, Subaru, and Chinese automakers. Yet, it is a significant announcement illustrating, along with the Navigant Research report, how different the auto industry is becoming compared to 10 years ago.

DOE funding more Advanced Technology Vehicle Manufacturing loans

Finding funding sources for manufacturing advanced, clean vehicle technologies had another boost last week. U.S. Department of Energy (DOE) Secretary Ernest Moniz announced that DOE has revised and updated its Advanced Technology Vehicles Manufacturing (ATVM) program, which offers low-interest loans to carmakers and their suppliers. Loans will likely go to auto parts suppliers and not automakers, according to Peter Davidson, executive director of the DOE’s Loan Programs Office.

The program is focused on loans for more fuel-efficient gasoline and diesel engines, along with plug-in electric vehicles and natural gas vehicles. That would include components needed for advanced engines and powertrains, light-weighting materials, advanced electronics, and fuel-efficient tires. The DOE is also open to offering loans to suppliers based outside the US that may be interested in moving production to the US.

The $25 billion lending program was approved by Congress in 2007 and has about $16 billion remaining. In 2009, the ATVM program issued nearly $9 billion in loans to original equipment manufacturers (OEMs) of vehicles and components.

Loans went out to Ford, Nissan, Tesla, and Fisker in 2009 – and it became a target of heated debate in Washington especially during the 2012 presidential election campaign. Losing $139 million to Fisker after its bankruptcy made it worse, along with the $400 million loan to solar power supplier Solyndra that meant another big financial loss for DOE. Ford is paying off its $5.9 billion loan, and Nissan is coming through on its payments for its $1.6 billion loan; Tesla paid off its $465 million loan last year long before the final payment was due.

The DOE is expected to be more cautious this time about the loans given, and has committed to exercising transparency practices for tracking return on investment. Automotive suppliers tend to fly under the radar compared to automakers, which means there will likely be less scrutiny and criticism for the DOE this time around.

The decision was good news for the Natural Resources Defense Council (NRDC). “This is good news for drivers who want cleaner cars, faster and cheaper. A successful restart of the retooling loan program can help clear bottlenecks in the supply chain and ensure that clean energy jobs that might otherwise go overseas, are instead ‘onshored,’” wrote Roland Hwang, Director, Transportation Program, Energy & Transportation Program.

Big Picture: NHTSA drops Tesla battery fire investigation, Honda and UC Davis showing how EV batteries can store solar power

The National Highway Traffic Safety Administration (NHTSA) has ended its four-month investigation into three battery pack fires in the Tesla Model S that occurred last fall. That decision followed Tesla Motors adding a titanium underbody shield to protect the luxury electric car from road debris that can cause battery fires. Tesla CEO Elon Musk announced in an article on Medium.com that all Model S vehicles built after March 6 will have the new shield. Owners of the Model S built before that date can have the titanium shield added by Tesla. NHTSA said that the shield, along with the software upgrade a few months ago that lifted the car’s ride height, have alleviated the agency’s safety concerns with the Model S. Last fall, Tesla’s software upgrade added the ability to raise ground clearance at highway speeds; at that time, Tesla also took steps to prevent overheating of its charging systems, including giving customers upgraded wall adapters and providing charging-software upgrades.

And in other clean transportation news……..

Honda has worked together with University of California, Davis to build the Honda Smart Home in the city of Davis to demonstrate how an electric vehicle’s battery pack can store solar power. The 1,944-square foot home offers the very latest in energy efficient technologies – LED lighting, radiant heating and cooling, a geothermal recovery system, a large solar panel system, and a grey-water filtering and recovery system. The home contains a 10-kilowatt-hour lithium-ion battery pack; it’s a smaller version of the one that powers the electric Honda Fit. As more homes are generating electricity from solar panels, electric vehicle batteries are expected to become storage units when the sun goes down. “It’s a new world in terms of vehicles operating not as isolated artifacts but as being part of a larger energy system, and I think the greatest opportunity for automakers is figuring out how their vehicles become part of that system,” said Daniel Sperling, director of the Institute of Transportation Studies at UC Davis, which provided the building site and the heating and lighting technology for the Honda Smart Home.
New Jersey Assemblyman Tim Eustace has introduced a bill that would permit consumers to buy electric vehicles directly from Tesla Motors. If passed, it would bypass the recent ban by the New Jersey Motor Vehicle Commission (MVC), which is composed of Governor Chris Christie’s cabinet members and appointees, on allowing Tesla cars to be sold outside of a franchised retail dealer network. Next door, in the state of New York, Tesla struck a deal on Friday with Gov. Andrew Cuomo and others that will allow it to keep five existing company-owned stores, as long as it doesn’t open more of them in the state. According to the agreement between Tesla, Cuomo, legislative leaders, and auto dealers, additional Tesla retail locations would need to be established under a “strengthened dealer franchise law.” In return, elected officials agreed to drop language in a bill in the state legislature that would have forced Tesla to close its existing direct-sale operations.
The Tesla “corporate-owned stores vs. franchised dealer stores” debate could be a talking point in the 2016 presidential election. Senator Marco Rubio (R-Fla.), a rising GOP star who’s expected to run for president, says that Tesla has the right to directly sell its electric cars. That will likely put him at odds with another expected Republication candidate, New Jersey Governor Chris Christie. Gov. Christie will probably dispute Rubio’s claim and defend his decision against Tesla’s stores in New Jersey. The politics may also have something to do with what state will get the $5 billion lithium battery “Gigafactory” project. AutoNation CEO Mike Jackson thinks it’s quite ironic that Texas and Arizona – the states with the toughest pro-dealer franchise laws, are now considering lightening up on laws allowing Tesla to have retail stores in those states. Previous attempts to gain exemptions in those states had failed; now state politicians are courting Tesla. These states, along with Nevada and New Mexico, are finalists for the Gigafactory project.
General Motors CEO Mary Barra told lawmakers in Washington yesterday that she’s “deeply sorry” for the error on an ignition switch defect, and will be fully transparent once the company discover what went wrong. It’s part of a large recall that only involves one alternative fuel vehicle – the 2014 Cadillac ELR extended range coupe. The recall will correct a problem with the diagnostic function of the software that controls the electronic stability control (ESC) in about 656 ELRs built between September 26, 2013, and February 14, 2014.
Toyota’s Asset-Backed Green Bond, a $1.75 billion fund announced last week, is part of a much larger global financial trend in green bonds. Unilever, the world’s second-largest consumer goods company, last week issued a $415 million bond for reducing waste, water use, and greenhouse-gas emissions. Bonds used to finance bonds that are friendly to the environment are gaining popularity worldwide, according to Christopher Flensborg of SEB, a Swedish bank; Flensborg is considered to be the inventor of green bonds. Unilever’s issuance was part of $6 billion in green bonds in the first quarter of 2014, which is much higher than in the first quarter of 2013; that year ended with a total of $11 billion in green bonds. World Bank president Jim Kim thinks it will rise above $50 billion next year. Toyota Financial Services’ (TFS) $1.75 billion was upsized from $1.25 as institutional investors have expressed interest in this clean transportation investment opportunity. TFS will use the proceeds from Green Bond toward the purchase of retail finance contracts and lease contracts for Toyota and Lexus vehicles that meet high green standards.
Clean Cities will be offering about $4.5 million more in available funding in three areas of interest: an alternative fuel vehicle demonstration and enhanced driver experience; alternative fuel training for first responders, public safety officials, and critical service providers; and incorporating alternative fuels into emergency response and preparedness operations. On March 24, the Vehicle Technologies Office, Clean Cities’ parent office, issued a Notice of Intent for a potential upcoming Funding Opportunity Announcement, available on Grants.gov (second item in the table) and the EERE Exchange site. Clean Cities also announced last week that it’s rolling out nine new projects with the National Parks Service. The projects will bring alternative fuel and fuel-efficient vehicles to the road, cut vehicle idling, and improve vehicle efficiency. Almost all of the projects involve installing charging equipment for plug-in electric vehicles and many will also add EVs to the National Parks Service’s fleet.
Tesla’s “Gigafactory” lithium battery factory concept is raising a lot enthusiasm with investors and fans of cleantech; however, Tesla Motors’ primary supplier of lithium ion cells for its Model S is still thinking about it. Panasonic Corp. hasn’t committed to investing in the ambitious US battery plant that’s been proposed by Tesla CEO Elon Musk. Joining Tesla’s Gigafactory battery project would raise investment risks, according to Panasonic President Kazuhiro Tsuga. Whoever partners with Tesla on the Gigafactory will be sourcing raw materials within North America, according to Tesla – and that counts for graphite, cobalt, and other materials. “It will enable us to establish a supply chain that is local and focused on minimizing environmental impact while significantly reducing battery cost,” said Liz Jarvis-Shean, a spokeswoman for Tesla.

Breaking through range anxiety and other EV stumbling blocks

For those of you championing the benefits of plug-in electric vehicles, here’s a few points you may want to mention…..

Nissan is sharing real-world experience from Leaf owners on its website. Those interested can submit questions that will be answered by Leaf owners who drive the electric cars every day. Range anxiety continues to be the leading concern; owners say that the Leaf’s EPA rating of 84 miles on a charge is more than adequate for suburban or urban commuting. Two Leaf owners did run out of energy while driving – one of them was stranded by a closed charging station and the other admitted not having learned how to read the car’s range meter.
US electric vehicle owners saved themselves $100 million last year by not having to buy gasoline. The Union of Concerned Scientists said that 160,000 Americans saved that much by not having to go to gas stations and buy 45 million gallons of gasoline last year. Carbon reduction is another point to make; for example, California EV drivers were able to reduce emissions of carbon dioxide by 140,000 tons last year.
A new report from the World Health Organization (WHO) estimates one of every eight deaths around the world can be traced back to exposure to air pollution. WHO estimates that in 2012 about seven million people died as a result of air pollution exposure. Government agencies around the world are expecting EVs (along with other zero emission vehicles such as plug-in hybrids and hydrogen fuel cell vehicles) to play a significant role in reducing air pollution and greenhouse gas emissions.
As I’ve discovered talking to stakeholders in alternative fuel vehicles, being able to effectively answer questions from consumers, fleets, company executives, and regulatory agencies, is essential for growth in adoption of EVs and other fuels and technologies. Education and public awareness programs are very much needed. Some of the issues that typically come up during conversations include:

Where the electricity comes from – coal versus cleaner energy.
Lifecycle ownership costs, price comparisons to similar gasoline-engine cars, maintenance, and resale values.
Safety issues for EV owners and first responders in the event of a crash.
Where the EV battery technology is going – becoming lighter, longer range, and less expensive.
Charging infrastructure – how many charging stations are being installed, how available and reliable are the chargers, and the cost of charging.
What will it take for fast chargers to become more widely available.

Car dealers are getting better, but there’s still a ways to go

Ever since the economic collapse of the auto industry that started in 2008, dealers have been undergoing changes in how they do business. Dealers understand that they’ve got to become stronger in customer service to build loyalty and can’t just stick to old upselling methods. They’re accepting that women make the majority of family car purchase decisions; that young people are holding off purchases longer than Baby Boomers did after first getting their drivers licenses; and that there’s a lot more car shopper interest in green cars such as hybrids and electric vehicles (EVs). There has been a lot of concern expressed that dealer staff haven’t been supportive and informed enough about EVs – mainly because it’s a longer selling process and isn’t as profitable as typical gasoline-engine cars. Those sales reps are very tied into closing sales quickly in how they make their living – and they could use more training and education in answering consumer questions.

As I wrote about not long ago in Green Auto Market (and its then-sibling blog Green Machine Digest), I was one of those green-interested car buyers. Well, a few days ago, I had a painful reminder about what I don’t like about the dealer experience and what does work for me.

Last year, I said yes to an aftermarket car alarm system for my 2013 Toyota Prius. Was I duped into it? Not necessarily – the Prius is an attractive car in California and there’s probably thieves looking for them as profit center, or so I thought. Actually, they’re not appealing to car thieves, according to a study by the National Insurance Crime Bureau – the Prius theft rate is much lower than the typical car. There’s a couple of reasons for that – one is that the Prius has several unique parts that can only be used in other Priuses, which cuts down the stripped parts market potential (and which makes for a big part of the car theft market). Another reason is that the Prius doesn’t have a key – it uses a remote fob to open its doors. That also cuts down the appeal to car thieves who usually don’t get their hands on the Prius key fob.

I discovered the problem with my alarm system while attempting to start the parked Prius on Friday afternoon. As I pushed the start button, the left and right turn indicators simultaneously flashed and the engine wouldn’t start. I attempted to open the door, and the alarm went off – loud enough to get stared at by several people wondering why I had jumped out of the car desperately attempting to stop the alarm by pressing buttons on the key fob. Somehow it did stop, and I tried it again only to find the same thing – flashing lights on the panel and loud honking when I opened the door.

I called the dealer where I’d bought the car and had gone to for routine service a few times. The alarm system guy was gone and wouldn’t be back until sometime Saturday. I explained that I couldn’t start my car and drive home; all I received from the service department staffer was a phone number for the vendor who provides them with the alarm system. Nobody answered the phone at that office. So, I called Toyota corporate roadside assistance. They sent out a tow truck who got me to another Toyota dealer close to where I’d gotten stalled out. My choices were explained to me by the service department – have their service technician dismantle the alarm control box or go to my original dealer and have them deal with it. I told them to unplug the alarm system and I would have it fixed later or just live without it. Strangely enough, after the alarm control box was removed the beeping sound quieted down a bit when locking and unlocking the doors – another annoyance I can live without.

The customer service experience was positive at this Toyota dealer – including offering me a free shuttle trip home so that I wouldn’t have to wait around at the dealership for the repair to be completed. The service department assistant manager was very knowledgeable about the security system and about the Prius overall – which is one of the benefits of working with automakers and their dealer networks who have years of experience to go by.

The original dealer sales rep was very good with me about sitting in the car and answering my questions last year while I was shopping for the car – and giving me all the time needed to make the acquisition decision. The problem started with going to the Finance & Insurance rep and having to sift through the sales tactics. I do regret the alarm system purchase decision, but not the other ones. I do love my Prius and will look at the plug-in hybrid version later on. I do want to own an all-electric or plug-in hybrid EV, but the ownership costs and charging station accessibility need to improve. I would hope that the dealer experience goes in a similar direction.

Big Picture: More actions on Tesla stores in Ohio and Arizona, Toyota Financial Services starts up Asset-Backed Green Bond

In the wake of New Jersey’s decision on Tesla Motors’ right to run corporate retail stores, there are two more states seeing developments. Ohio Gov. John Kasich has received a letter from General Motors expressing concern that the state would allow Tesla to expand beyond the two Ohio stores it currently has in operation. GM thinks the state should oppose legislation allowing Tesla to open more stores, as it would allow Tesla to compete under a different set of rule. “We understand discussions are ongoing over legislation which could provide a broad exemption for a single manufacturer, Tesla Motors Inc., to circumvent long-established legal precedent on how new motor vehicles are marketed, sold and serviced in your state,” Selim Bingol, GM’s senior vice president of global communications and public policy, wrote in the letter.

Arizona may allow Tesla to sell directly to consumers at retail stores within the state – if the company is willing to have a service center in the state to handle repairs and warranty issues. The state’s Senate Commerce, Energy and Military Committee voted three-to-two to push forward this bill in the legislature. Arizona Senate Majority Leader John McComish called the bill a “pre-emptive strike” against future laws that outlaw Tesla’s direct-sale model. The bill will need to go before another committee for review, then would go to the full Senate.

And in other clean transportation news…….

Toyota has a very interesting offer through its Toyota Financial Services (TFS) captive finance arm – the auto industry’s first-ever Asset-Backed Green Bond; the company is outlaying $1.75 billion, which was upsized from $1.25 as institutional investors have expressed interest in this clean transportation investment opportunity. TFS will use the proceeds from Green Bond toward the purchase of retail finance contracts and lease contracts for Toyota and Lexus vehicles that meet high green standards as established by three criteria: gasoline-electric hybrid or alternative fuel powertrain; minimum EPA estimated MPG (or MPG equivalent for alternative fuel vehicles) of 35 city / 35 highway; and California Low-Emission Vehicle II (LEV II) certification of super ultra-low emission vehicles (SULEVs) or higher, which would include partial zero emissions vehicles (PZEVs) and zero emissions vehicles (ZEVs). Qualifying models from Toyota include: Prius, Prius C, Prius V, Prius Plug-in, Camry Hybrid, Avalon Hybrid, and RAV4 EV. From Lexus, qualifying vehicles are CT 200h and ES 300h.
Producing more than 5,000 compressed natural gas (CNG) fueling tanks last year is one of several positive signs that Quantum Fuel Systems is on a turnaround that should continue, according to stock market analyst website Seeking Alpha; that’s more than double the amount of tanks that were produced in 2012. The company was close to collapsing 12 to 18 months ago, but a corporate restructuring has been completed and seems to have a brighter future. Quarterly earnings were reported earlier this month – positive earnings were reported for the first time in quite a while. The company’s share price has increased by more than 250% in the past 12 months. About 10,000 tanks are expected to be delivered in 2014.
The Energy Independence Summit will be taking place in Washington, DC, March 30-April 2. Leaders in clean transportation will be gathering to share best practices and educate federal policy makers about the benefits of the US Dept. of Energy’s Clean Cities program. The need for additional tools and resources to overcome barriers to the widespread use of clean vehicles and fuels will also be discussed. You can contact Ken Brown at Transportation Energy Partners at ken@akbstrategies.com or (202) 674-7777 if you have questions or would like additional information about the Summit.
The CHAdeMO electric vehicle fast charging protocol, which was initially adopted in Japan by domestic automakers, has been officially recognized as an international DC charging standard by electrical standards organization the International Electrotechnical Commission. The final draft international standards were approved by committees in January 2014, and were finally published last week on the IEC website. The number of CHAdeMO fast charging stations doubled in 2012 to more than 2,000 units are expected to grow, the association said last year.
Dish Network unveiled 47 new propane-powered vehicles at an event on Friday in Hawthorne, Calif. Roush CleanTech converted Ford E-Series vans for Dish Network, and the company’s goal is to deploy 200 of these alternative-fuel vehicles that will run on propane autogas.
Volvo Trucks is bringing its full range of alt-fuel vehicles to the 2014 Mid-America Trucking Show in Louisville, Ky. That lineup will include: Volvo VNL 300 CNG with 400-horsepower 11.9-liter Cummins Westport ISX12 G engine; Volvo VNL 300 LNG with 455-horsepower Volvo D13-LNG (compression ignition) engine; and Volvo VNL 300 dimethyl ether (DME) with 435-horsepower Volvo D13-DME engine.
BMW plants to produce more than 100,000 electric vehicles per year to meet tougher European emission standards that reach a key mandate level by 2020. CEO Norbert Reithofer told reporters that BMW will increase production levels of its i3 and i8 in 2018 in anticipation of getting up to 100,000 units annually in order to meet the stricter carbon dioxide emission standards. BMW was pleased to see that its i3 took 10,000 internet orders when it went online last fall.

Telling Your Story: How Tesla builds brand value without spending a dime on marketing

Tesla Motors, which doesn’t have a marketing budget, is benefiting from a creative video spot; the automaker didn’t need to spend one dime on it. In the commercial, “Modern Spaceship,” a little boy imagines himself breaking the speed of light while driving his father’s new car, a Model S. Everdream Pictures, a production company started by recent college graduates, spent $1,500 to make the commercial. So far, Tesla hasn’t paid for it, but may collaborate in the future; Everdream met with Tesla CEO Elon Musk in January to talk about possibilities, and Tesla may hire them for a future project.

As for now, Tesla has been streaming part of the video on its Facebook, Twitter, and Instagram pages; and Musk tweeted about the video recently. Tesla Motors sold 18,650 of its Model S electric luxury sedans in 2013 after launching it in the summer of 2012. The Model S sold less units last year than what Nissan Leaf and Chevrolet Volt each experienced, but for its price range – with monthly lease payments ranging from $1,051 for the 60 kilowatt-hour (kWh) version up to $1,421 for the 85-kWh Performance model – those sales figures are quite impressive – especially for an automaker that really hasn’t been around for very long. Tesla has been promoting a less-expensive lease deal to raise consumer interest (more on that later).

Tesla’s brand value has been surprising to observe (as witnessed by its incredibly strong stock prices) given that the auto industry has historically been dominated by a small number of majors with startups going the way of failed 1940s Tucker sedan. Here’s my take on how Tesla Motors has been effectively telling its story…….

Fine product: While Tesla has been getting a ton of press and social media coverage in the past year (with the Hyperloop, Supercharger, and Model S recall fueling most of it), Tesla would have faded by now if its cars had gone the way of the DeLoreon concept car. The Tesla Roadster, built on a Lotus chassis, was impressive being the first production-scale electric vehicle after it was launched in 2008. It was the Model S that turned heads and managed to impress Toyota and Daimler enough to invest in its electric powertrain components. Driving one of them isn’t easy – you don’t get to show up at a dealership and get behind the wheel with a sales rep answering all your questions. You have to show up at a Tesla ride and drive and wait in line to drive one of them; or have a friend who lets you experience what may be the strongest torque ever in a passenger car – and the unique, double-TV-screen dashboard for navigation and apps. There’s been a lot of buzz about its upcoming Model X crossover with double-hinged doors. It’s more affordable Model E compact is scheduled to roll out in late 2016.

Removing range anxiety: Fear of having an electric vehicle’s battery poop out and being stuck on the side of a road has been the major stumbling block for selling a lot more EVs. Tesla has no plans to roll out a plug-in hybrid to alleviate that range anxiety. There are two factors that seem to be helping – one is impressive per charge range. For example, the US Environmental Protection Agency reported that the Model S Performance can go 265 miles on a single charge. Another step forward is coming through with its Supercharger stations that can recharge a Model S faster than any of the CHAdeMO or SAE Combo adapter fast chargers can deliver.

Creative financing: The Tesla Model S has a sticker price ranging from the low $70Ks to the mid-$90Ks depending on the package you choose. Even with federal and state incentives, it’s much more expensive than other EVs and you can find a lot of other quality luxury cars for a much lower price. Tesla has been working with U.S. Bank and Wells Fargo on a lease program that guarantees the residual value during its three-year contract. Tesla says it will have the top residual value of any high volume premium sedan brand – Audi, BMW, Mercedes, or Lexus. Tesla is also pitching the novel idea that the cost goes down to about $500 per month. The argument goes along the lines that you can save $267 per month in fuel costs compared to the BMW 5-Series, and you can subtract more dollars and save more time by gaining access to carpool lanes while driving solo. So, creative marketing and creative financing are paying off.

Leaders with personality: It certainly helps to have a self-made multi-millionaire celebrity like Elon Musk captain the ship. While competitors like GM and dealer networks likely despise him, Musk probably isn’t losing any sleep over it. It also helps to have JB Straubel serve as chief technical officer and Franz Von Holzhausen as chief designer. They’re getting a lot of media attention and respect from car designers – and Straubel and Von Holzhausen tend to be eloquent and analytical about the Tesla technology.

Guerilla marketing: It is quite strange to see the Tesla brand go viral and ubiquitous in such a short period of time. It’s taken Hyundai a lot longer to reverse its negative image and to start winning accolades. Tesla is benefiting from getting strong ratings from Consumer Reports and NHTSA safety ratings (at least before the battery fires last Fall). Its tactics are paying off – with appointment-only ride and drives helping, attention-grabbing retail stores, and sales maneuvers that probably would have impressed P.T. Barnum. An example of this tactic is how good Tesla is at teasing its audience about the upcoming launch of its Supercharger, Model X, etc. Tesla is taking advantage of the digital media/marketing environment where brand value can be increased for free – if done the right way. Getting an email from Musk explaining how the automaker is dealing with the battery fire problem is a very good example of it.

Problem into opportunity: “When written in Chinese, the word crisis is composed of two characters – one represents danger, and the other represents opportunity.” U.S. Senator John F. Kennedy said in a 1959 speech. I chose this quote from JFK on my LeSage Consulting website because it eloquently states the challenge clean transportation is experiencing right now. For alternative fuels and vehicles, every one of them faces huge challenges to break through consumer and fleet acquisitions and building the essential charging/fueling infrastructure. Elon Musk and his team have so far been masterful at becoming well established in the ultra-capital intensive and challenging car business. It also makes for a colorful story of a company delivering cool new technology in this rapidly changing, global economy.