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Toyota moving out of California and the jobs will follow

California is the best place in the US to sell hybrids, plug-ins, and other alt-fuel vehicles, but not necessarily the best place to base your vehicle manufacturing operations. Toyota will be moving from the Los Angeles suburb of Torrance to the Dallas suburb of Plano. The Japanese automaker will also expand its technical center in Ann Arbor, Mich.; Toyota’s facility in Kentucky will also move over to Texas. About 4,000 employees will be impacted by the move, yet it’s too early to say how many of them will be moving to Texas.

The formal announcement sounds grand – “to better serve customers and position Toyota for sustainable, long-term growth,” was the official company announcement. Unofficially, according to reports that began leaking out prior to the corporate announcement, it’s more about slashing expenses and moving away from California’s strict regulatory environment.

While Tesla Motors will continue building luxury electric cars in Fremont, Calif., and its newly acquired idle-parts distribution center is located in rural California, its advanced battery project will be out of state. Tesla’s upcoming lithium battery plant, Gigafactory, will be opening up in Arizona, Texas, New Mexico, or Nevada. It’s anticipated to require about $5 billion in investments with partners and would generate about 6,500 manufacturing jobs.

While cheaper land and hourly wages, and looser regulations, are probably playing their part, Tesla has another strategy: getting into markets where strict dealer franchise laws have blocked Tesla’s retail store growth strategy. Texas is very important for that reason, though one analyst thinks Nevada will be the winner. Nevada has a railroad line that connects directly to Tesla’s Fremont plant. Nevada is also rich in lithium pools, a big part of what goes into Tesla’s battery cells.

Fisker Automotive will likely be finding an office elsewhere. As new parent company Wanxiang America, a unit of China’s largest auto parts supplier, has taken over, there’s word of Fisker leaving its headquarters office in Costa Mesa, Calif., and moving out of state. (See Big Picture for more details.

California is not going away as an essential place to be for the auto industry. Engineering and design firms are based primarily in Southern California, and they play a key role in producing the next wave of new vehicles. In fact, Toyota’s design and racing units are expected to stay in Orange County. Some of the largest dealerships in the country are based in the state; and several alternative fuel providers (especially natural gas) have set up shop in California – with one of the principal reasons being state programs providing incentives. Fleets are very good customers, especially municipal fleets with dedication to clean transportation.

The auto industry will continue to be an integral part of the US economy and job creation – especially given that most other manufacturing sectors have shut down or moved overseas. California will continue to be a vital part of the industry’s future, but the limitations are always a factor. The weather’s great and there’s always something fun to do (surfing, Disneyland, Hollywood Blvd., riding BART into the city, etc.), but corporations are always looking into slashing costs and moving somewhere else.

Big Picture: China is becoming the hottest EV market to enter, BMW i3 getting a lot of attention – and a World Green Car award

China must be a hot market to sell electric vehicles (EVS) in, with all the recent corporate announcements. The reality has been that sales have been soft, and the Chinese government continues to offer attractive incentives to get the “new energy” market rolling. It’s been enough for Tesla Motors to decide not just to sell its Model S in China, but to also build future models there. CEO Elon Musk thinks the company will have a production line up in three-to-four years. That goes along with its near-term future investment in a charging infrastructure, including superchargers going into Beijing and Shanghai. Daimler and BYD will start selling its joint venture DENZA electric car in September; it will be the first complete vehicle that Daimler has built with BYD outside of Germany. The five-seater EV will have 190 miles of range and pre-incentive pricing of $60,000. Volkswagen has an even bigger plan – to sell hundreds of thousands of EVs in the China market before the end of this decade – and will spend up to $27 billion in the next five years to do it. The ambitious campaign will start up this year with the launch of the VW electric Up! and e-Golf models in China.

And in other clean transportation news…….

The BMW i3 electric car was given high honors at the New York International Auto Show – 2014’s World Green Car. It beat out the Audi A3 Sportback g-ton and Volkswagen XL1 and 11 other entrants. It comes at a time when BMW is finding strong demand in Europe while introducing it around the world. That demand has pushed for a higher production volume than originally expected. “From the production process onwards, the BMW i3 is a truly sustainable vehicle, created with the needs of the 21st century city in mind,” said Dr. Ian Robertson, Member of the Board of Management of BMW AG, Sales and Marketing BMW. The BMW Group also won the 2008 World Green Car award for the BMW 118d with Efficient Dynamics.
Further evidence that the BMW i3 is getting a lot of buzz: Winning the top spot in Kelley Blue Book’s Top Ten Green Cars for this year.
Major auto supplier Robert Bosch LLC is getting investigated by NHTSA after a 2013 Nissan Leaf drivers reported smoke emitting while charging the EV. NHTSA reported that a possible 50 chargers may overheat and result in fires. Bosch said that it’s reviewing the filing and will cooperate with NHTSA. The charger used, a Bosch Power Xpress 240V, had been charging for over an hour at 30 amps at a private residence when signs of overheating, including a “strong burning smell,” were noticed.
The Keystone XL pipeline startup continues to get dragged out. The Obama administration delayed a final decision on the pipeline until an ongoing court challenge to its route in Nebraska is resolved. The controversial project will remain in limbo until after the November midterm elections. It has been a “hot potato” for the Obama administration.
Navigant Research thinks that medium- and heavy-duty trucks running on natural gas will see a huge growth spurt soon – from 1.5 million on the roads this year to 3.7 million on 2022.
Natural gas is crossing borders into several different market segments – now into motor oil. Pennzoil has added its Pennzoil Platinum with its PurePlus Technology; this patented process that converts pure natural gas into the first-of-its-kind, high quality full synthetic base oil.

Shopping for a new car? Stay tuned for Green Vehicle Database

If you’re shopping for the best deals in cars or trucks, you’re probably visiting Kelley Blue Book, Edmunds.com, and Consumer Reports for the latest in reviewer and consumer ratings. You’re most likely looking for the sticker price, miles per gallon, safety ratings, incentives, engine size, interior spacing, and maybe a few other specifications. But what about alternative fuel vehicles?

As I’ve spoken with members of the Green Auto Market stakeholder group during monthly conference calls, the topic usually comes up. What’s a federal or state incentive on a specific alternative fuel vehicle? How does it compare to other hybrids, EVs, etc.? What does the cost of ownership look like?

In July 2014, LeSage Consulting will release its first-ever Green Vehicle Database with specifications, pricing, and incentive data on passenger and commercial vehicle offerings for the 2014 and 2015 model years. Vehicle types will include: Plug-in Electric Vehicles (Battery Electric Vehicles and Plug-in Hybrid/Extended Range Electric Vehicles); Hybrid Vehicles; Natural Gas Vehicles (Compressed Natural Gas Vehicles and Liquefied Natural Gas Vehicles); Propane Autogas Vehicles; Fuel Cell Electric Vehicles; Flex-Fuel Vehicles; and Fuel Efficient & Green Vehicles on clean diesel cars and the most fuel efficient gasoline engine models.

Specifications will include: Make, Model, Model Year, Style, Engine/Motor, Battery Size, Transmission, Suspension, Curb Weight (passenger), GVWR (commercial), MSRP, Conversion Cost, MPG/MPGe; and Federal Tax Incentives and State Incentives. These categories may change as I get more feedback in the weeks ahead from stakeholders experienced in making vehicle acquisitions and analyzing a total cost of ownership forecast model.

There are excellent resources out there that I’ll be accessing including the Clean Cities annual buyer’s guide. In the end, there’s always the automaker websites for specifications and agreed-upon standards such as EPA mileage ratings. The idea behind Green Vehicle Database is that alternative fuel vehicles are becoming a sizable presence in the auto industry; for vehicle buyers such as consumers, fleets, businesses, transportation companies, and government agencies – there’s a growing need for a comprehensive data source for reviewing, analyzing, and comparing the right information for making the best decision.

Volkswagen counting on TDI to break through clean diesel barriers

How does this one sound? If you’re driving the new Volkswagen Passat turbocharged direct injection (TDI) sedan, you get 43 mpg on the highway, can travel 795 miles on one fueling, and it carries you with 140 horsepower and 236 lbs/ft of torque. The 2014 Passat TDI Clean Diesel starts at $26,675 (excluding taxes and destination charges), so it’s very price competitive with midsize gasoline engine cars that don’t get as good a mpg rating or driving range per fueling.

The latest TV commercial for the Passat TDI emphasizes freedom from range anxiety – you can drive from Los Angeles to Philadelphia on just three stops for fuel – just a hop, skip, and a jump. Other midsize sedans need a lot more fuel stops, VW says – and you can receive a $1,000 fuel reward card on your purchase. It seems to be working – Volkswagen is leading sales for diesel passenger cars in the US. About 55% of diesel passenger cars sold in the US are the Volkswagen Passat and Jetta (with the Passat at 29%), and these two models are way ahead of any other diesel passenger car.

“Cruise from A to B, not from A to filling station to B,” says VW’s website promoting clean diesel TDI. The Passat and Jetta are joined by the Jetta SportWagen, Golf, Beetle, Beetle Convertible, and Touareg in the VW clean diesel TDI family. VW’s Audi division currently offers five clean diesel TDI models – the A6, A7, A8 L, Q5, and Q7. For the 2015 model year, Audi is launching a new version of the Audi A3 TDI. At the New York Auto Show, the 2016 Audi A3 TDI Sportback was unveiled – bringing a station wagon to Audi’s TDI lineup.

VW seems to be enjoying a few advantages in its clean diesel offerings……
• TDI is a registered trademark for VW and Audi – turbocharged direct injection brings more power and efficiency to sedans and taps into what many American car owners admire about German automotive engineering. VW is focusing specifically on TDI clean diesel models of its cars that also come in gasoline-engine versions – and is counting on the concept to sink into consumer minds.
• Clean diesel is considered by some people to be an alternative fuel – while it’s not as clean as electricity, natural gas, biodiesel, or propane – it is an alternative to gasoline. For car shoppers, buying a diesel engine car can be as big a switch as buying a hybrid or plug-in. It also helps that US fuel stations are only selling ultra-low sulfur diesel (ULSD) these days – adding more weight to the “clean diesel” identity.
• You can find diesel just about anywhere at US gas stations. With the extended range on a fueling of a VW Passat and with fuel stations all over the map, range anxiety is relieved. (Diesel does cost more than gasoline, but the fact that they’re getting great mpg seems to be offsetting that price differential).
• TDI Clean Diesel technology is part of VW’s Think Blue initiative, the automaker’s goal of creating and encouraging eco-conscious products and behaviors. While some people scoff at the idea of clean diesel actually being clean (especially when compared to electric vehicles), it does play into the drive for clean transportation – reducing emissions compared to gasoline engines on a mile-per-mile basis.

Big Picture: GM has high hopes for a redesigned Chevy Volt; Smith Electric Vehicles shuts down production

General Motors would like to pick up steam on sales of its plug-in hybrid Chevrolet Volt. To get there, GM will be selling two versions of the redesigned 2016 Volt. One will be a lower-priced version with a smaller battery pack and shorter driving range. That will be carried overseas through GM’s Opel division in Europe. The next versions of the Volt will go into production in about 16 months at the automaker’s Detroit-Hamtramck plant. That plant will get a $384 million investment that will be aimed toward the Volt and a new flagship Cadillac sedan and a redesigned Buick LaCrosse.

GM would like to reduce product cost and make the Volt more profitable, and expects to achieve necessary cost reductions in the 2016 model. The automaker would also like to see stronger sales results without investing so much on incentives. The Chevrolet brand reported selling just 58,158 units since the Volt was launched nearly 40 months ago.

And in other clean transportation news……

More bad news on the EV startup front: Smith Electric Vehicles, based on Kansas City, Mo., has temporarily stopped plant operations. The company is best known for its Smith electric delivery truck, and says that it’s not shutting down operations for good. CEO Bryan Hansel says manufacturing the vehicles has yet to become profitable; he says suppliers and investors have been informed that it’s a temporary shut down and is part of the company’s plan to scale up production and sell enough of them to turn a profit.
Tesla Motors is setting up a new finance arm to entice companies to lease the Model S as one of their fleet vehicles. Small and medium-sized businesses will be able to calculate the leasing cost on Tesla’s website will offer them an attractive value proposition. The new Tesla Finance unit offers leases through partner banks with a guaranteed resale value. Tesla is also getting ready to start selling cars in China this month. Tesla CEO Elon Musk will be delivering a few of the first ones to customers. He’ll also be meeting with representatives from China Petroleum & Chemical (also known as Sinopec) this month about constructing charging units in the refiner’s nationwide network of service stations. The charging network is expected to start in Beijing and then roll out to surrounding areas.
CleanFUEL USA has rolled out the propane autogas industry’s first complete fuel network management system for electronic dispensers. Using CleanFUEL eCONNECT, fleet managers can economically monitor and control fuel inventories faster and easier than ever before with real-time data insight, flexible report storage, and remote access capabilities.
The Environmental Protection Agency may continue to be sympathetic to the biofuels industry; EPA Administrator Gina McCarthy recently spoke to the issue at North American Agricultural Journalists meeting in Washington DC. McCarthy expects the EPA’s final rule to be different than the proposed version released in late 2013. After reviewing more than 200,000 on the Renewable Fuel Standard proposal, EPA is looking more closely at the realities of the fuel market, with one of them being the realities of the fuel blend wall. The agency expense more legal challenges for any RFS standards. “We need to be able to justify it in court, McCarthy said.
Tesla Motors has taken a swing at “lemon law king” attorney Vince Megna’s lawsuit against the electric vehicle maker. While insisting that it doesn’t believe in automotive “lemon laws,” the company says there are several good reasons to be skeptical about the lawsuit and denied some of the claims. Megna made a big splash on the internet with a Youtube video on behalf of client Dr. Robert Montgomery of Franklin, Wis.; Montgomery stated in the filing that he had a number of problems (such as a malfunctioning door handles) with his Tesla Model S that led to it being pulled of the road for 66 days. He wants Tesla to buy it back under a law that take affect after the vehicle is pulled off the road at least 30 days during its first year of life.

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.