Hertz bankruptcy a major road sign toward the future of cars and transportation

It was sad to see the oldest car rental institution in the world, Hertz, file for Chapter 11 bankruptcy on Friday, given the severe impact of COVID-19 on travel and the economy. But the story is a much bigger one — it reflects the difficulties of building a solid, profitable company in the car business with healthy cash reserves to survive a catastrophe; and it points to the fundamental changes in how people will be using cars, travel, and taking short rides in the city, in the years ahead.

I’d learned a lot about the car rental business and other elements of its supply chain — automaker fleet departments, airlines, hotels, travel management companies, reservation systems, and the used car remarking arm — as the editor of Auto Rental News; and later working with car rental industry expert and consultant Neil Abrams as the manager of his Abrams Travel Data Services business unit. Learning about the nuts and bolts of how car rental companies work gave me a wonderful education in economics, the auto industry, and the growing importance of travel to consumers and corporate executives — almost like an MBA. Automotive Digest Publisher Chuck Parker had served as the publisher of ARN, and encouraged me to take that publication where I wanted it to go — analyzing market data and offering readers a big-picture perspective on how all of this dynamic change would likely affect their future.

A Bloomberg article on the Hertz bankruptcy cited a ranking of top car rental companies that I put together for ARN in 1994. It ranked Enterprise its new No. 1 by fleet size and number of offices, bumping Hertz off its top spot for the first time. It was also during the time when Hertz’s advertising spokesman OJ Simpson was taken off his mantle and had his years-long contract with the auto rental giant taken away as his murder trial was scheduled. The 1990s also saw the beginning of company mergers and buyouts; and smaller car rental companies having to shut down and leave the business. The global economy was seeing similar trends with mergers and acquisitions taking center stage for automakers, airlines, hotels, media and entertainment companies, banking and investment firms, healthcare, and tech companies.

Over the next 20 years, we would see Enterprise purchase National and Alamo, Avis buy Budget and car sharing leader Zipcar, and Hertz buy Dollar and Thrifty. Hertz would take on Enterprise in the local market with its Hertz Local Edition division — offering replacement cars for repair and service, and weekend rentals to nearby residents who wanted a nice big vehicle to take a road trip. Hertz and Enterprise started car sharing units to compete with Zipcar and its parent Avis, along with Daimler’s car2go and General Motor’s Maven business units.

But what’s happened since then?

—Building a profitable business model continues to be tough:  Carl Icahn, a famous activist investor with plenty of holdings in the oil industry, could lose big with Hertz. Icahn, who owns nearly 40 percent of Hertz, is expected to lose his entire $1.5 billion investment if the company can’t survive its reorganization. Icahn had stepped in during 2014 to stabilize the company’s debt from its acquisition of the Dollar and Thrifty car rental competitors, and to take on competition from new modes of transportation led by Uber. Hertz had owed about $500 million in debt recently and had renegotiated a longer payment plan — given that it only had $1 billion in capital; but that payment was missed. The game is changing dramatically and COVID-19 isn’t at the root of it. It’s not the profitable model that major investors and stock market shareholders will need in the new economy. That’s the same for automakers, with Tesla going outside the norm as high-performing stock to own — unlike GM, Ford, and the other major manufacturers.

—Competitors like Enterprise, Avis, Uber, Lyft, and Zipcar, are preparing for a future with autonomous, shared, and electric rides.  That’s also the case for the two giant European car rental companies, Sixt and Europcar. But the car rental giants haven’t even started offering customers electric cars for rental. They might have a few hybrid models, but they have been sticking to the traditional vehicle choices. Hertz was set back by not getting enough SUVs into its fleet recently — as gasoline prices have stayed down and renters want to load up midsize-to-large crossovers and SUVs for long road trips. But that’s expected to change in the new decade as we emerge from the coronavirus, as environmental regulations take hold in North America, Europe, and Asia — meaning less gas-guzzling trucks and SUVs, and more electric cars and fuel-efficient vehicles. Consumers and fleets are starting to become more interested in owning EVs and taking shared, automated rides in autonomous shuttle buses. That will take a while to get a firm hold in the marketplace, but expectations are starting to change. Some analysts believe that COVID-19 is continuing to cause a series of changes in the general public’s priorities and expectations.

—Most companies in the global economy are dependent on steady revenue streams based on demand with very little in capital reserves — as well illustrated by Hertz.   When demand gets sidetracked for whatever reasons, there goes the company. Japan’s lean supply chain model has had a great deal of influence on all of it, but that was discredited in part by the 2011 nuclear power disaster — and its harsh impact on automakers around the world dependent on Japanese suppliers. Some countries like Japan are more willing to bail out their major corporations and keep their share. The US gave GM and Chrysler great deals with low-interest loans on their post-bankruptcy bailouts that were paid off. Will Hertz be able to find it from the Trump administration to emerge from BK in a stronger position?

—Hertz will have to save face on generous executive payments.  Hertz Global Holdings said today it has paid about $16.2 million in retention bonuses to a range of key executives. President and chief executive officer Paul Stone was paid $700,000, and executive vice president and chief financial officer Jamere Jackson $600,000 as retention bonuses, Hertz said in a filing to US regulators. That doesn’t look very good after laying off 10,000 of its employees in April. The business community and consumers do expect more from corporations these days — honest reporting, equity, treating employees respectfully, adopting sustainability practices, and supporting their local communities.

—Car rental holding companies are in a sound position for being leading players in the future of mobility.  They have the largest fleets in the world, historic brand names and public awareness, and infrastructures in place for serving airports and, especially for Enterprise and Hertz, serving local markets including much-needed replacement vehicles. What about adding EVs, autonomous shuttles, hourly rentals, and cheaper shared rides?

—Car rental companies are facing a serious turning point.  How will they compete in car sharing when those companies start to grow their audiences and car rental companies haven’t taken the segment very seriously? What about rental electric cars? It’s not happening yet. How do you compete with ride-hailing and ride-sharing giants out there in the global market? Consumers are changing their mobility methods and business travelers have been leaning in this direction too. COVID-19 and emerging from bankruptcy offer rare opportunities for stepping forward and doing the right thing.

    China auto sales coming back, but US languishing for near-term future

    China’s auto market grew in April, overcoming an early-year collapse triggered by the coronavirus shutdown — and ending a nearly two-year streak of sales declines that has shaken the world’s largest auto market. Before the coronavirus, China had been seeing an economic downturn following years of historic growth in new vehicle sales.

    The market’s new energy vehicles also saw a turnaround during that month. China includes all electric, plug-in hybrid, and hydrogen fuel cell vehicles in these totals for passenger and commercial vehicles.

    The Tesla Model 3’s sales in China fell over 64 percent last month compared with the previous month. That sales decline happened despite a 9.8 percent month-on-month increase in electric sales in China last month. The Model 3 did see very good months in the first quarter, bucking China’s trend in new vehicle sales plunging.

    All of this is happening as the Covid-19 crisis impact has started softening in China’s economy and the world’s largest auto market. China’s recovery could be a good sign for the start of economic recovery that should slowly spread to the US.

    But China’s leading auto trade group warns that the fight won’t be over — with sales expected to be down 15 percent overall versus the previous year. Much of that took place in the first quarter of this year, with sales improvements expected to continue for at least two more months.

    US new vehicle sales volumes were down about 50 percent year over year in April. Car shoppers are staying out of dealerships during the pandemic — and that includes online sales. Tesla does have the advantage of getting its customers to go that route from its very beginning, with some analysts pointing to Tesla’s retail model as a sign of the future for competitors and their dealer networks.

    Data on plug-in hybrid and battery electric vehicle sales in the US is very difficult to find these days, as the leading sources stopped publishing their reports last year and into this year. One analysis piece expects that EV sales will decline in the US for up to 12-to-18 months. A real double whammy has hit the market through the Covid-19 pandemic and drastically lower oil prices.

    EV sales of course won’t be going away entirely in the US, and some automakers will continue to prioritize their lineups. Volvo Cars was pleased to announce that its Recharge lineup of plug-in models doubled in the first four months of this year from 7 percent of its sales to 14 percent. The company also reported seeing a nearly 44 percent drop in overall new sales last month.

    Tesla chief Elon Musk was pleased to tell stakeholders at the company’s recent earnings call that the Model 3’s prices will be going down in China. That should help bring it back to competing with market leaders. BYD and Ford took the two top spots in China last month in EV sales, with the Model 3 coming in third.

    Tesla wants to open up its third auto assembly plant in Germany, which appears to be going forward. For now, China will be a very important market to establish firm footing within. That’s the case for a few other major automakers that have put lots of capital into EV sales in China — including General Motors, Ford, and Volkswagen.

      Renewable energy ready to grow, Fun activities to overcome cabin fever and boredom

      Spain, one of many countries hit hard by Covid-19, is sending workers out to continue building up renewable energy to power its grid. Workers on the 500-megawatt Núñez de Balboa solar park have been wearing protective gear to finish installing the nearly 4 square miles of panels to supply power up to 250,000 people, becoming the largest in Europe.

      That power grid is run by Iberdrola, a multination energy company based in Spain, but its one of many renewable energy projects continuing during the coronavirus crisis — even when oil prices have plunged downward. Fossil fuels make up a big chunk of power for the global energy grid; some countries may be adding it and taking advantage of the low cost, but renewables look like they’ll continue growing rapidly.

      It’s a major trend to follow for those planning the future of energy used in generating electricity — along with fueling transportation. Opponents of adopting ambitious government mandates on bringing their country’s fleets over to electrified vehicles can point to the fact that natural gas, coal, and nuclear make up most of the power grid in the world — and that renewables like solar, wind, hydropower, and geothermal have a long way to go. Electric vehicle advocates lose some of their arguments made when the total lifecycle of the vehicles and their energy sources don’t clearly stand out from internal combustion engine vehicles — or from other alternative fuels.

      As for growth, renewables have been the big winner in recent years, and that trend should continue. The International Renewable Energy Agency reports that between 2015 and 2019, renewable energy grew to make up 72 percent of of all new power generation last year. It outpaced nonrenewable energy during that time period.

      The International Energy Agency (a separate agency from IREA) expects renewable power to grow by another 50 percent by 2024 with solar leading the way. The agency expects it to be the only energy source to grow this year, with fossil fuels taking a major hit because of decline in energy demands coming from the pandemic.

      However, fossil fuels may also be coming up for a boost in energy consumption. Dan Jørgensen, Denmark’s minister for climate, energy and utilities, said he’s concerned that the recent dive in global oil prices might lead countries “that are built on an old-fashioned fossil economy” to see the transition to cleaner energy as unnecessary. It could be set aside in a few markets.

      Jørgensen shared these perspective during IEA’s meeting last month with lawmakers and companies from around the world focusing on the role of renewable energy in the economic recovery expected to follow Covid-19. A common theme by speakers was not repeating the cycle following the 2008 financial crisis that had benefited suppliers of fossil fuels. Jørgensen said that the argument needs to be made that investing in renewables is a smart business strategy and not just an ideological choice.

      The US has a long way to go in making this transition. The US Energy Information Administration reports that fossil fuels are by far the largest sources of energy for electricity generation. It’s led by natural gas, which made up about 38 percent of electricity generation in the US last year, followed by coal at 23 percent and petroleum at less than 1 percent. Nuclear powered 20 percent of US energy last year.

      Renewable energy made up about 17 percent of electric power in the US last year. Hydropower plants made up about 7 percent of total US electricity generation during that time, with wind power making up that same share. Solar made up 2 percent and biomass was about 1 percent or energy in the US last year.

      Hydropower plants using flowing water to spin a turbine connected to a generator — such as the Snake River providing Idaho’s energy. Wind turbines convert wind power into electricity. Photovoltaic (PV) and solar-thermal power are the two main types of solar electricity generation technologies being used in the US. As for biomass, that comes from steam-electric power plants that can convert gas that can be burned in steam generators, gas turbines, or internal combustion engine generators. Geothermal power plants contribute about a half of one percent of US power last year, and that comes from steam turbines.

      Renewable energy made up a segment of US job creation efforts in the years following the Great Recession that struck in 2008. Advocates cite these projects and business startups that have thrived, and the contribution it’s making to reducing dependency on fossil fuels and to reducing carbon emissions.

      From my blog:  Getting cabin fever? Looking forward to Covid-19 no longer running our lives? 
Along with taking all the social distancing and cleanliness guidelines suggested by the CDC seriously, it seems like a good idea to use the downtime for something good. My list of activities for your consideration to help get through the coronavirus includes watching the Oscar-winning Parasite. One way I could tell it was a great movie when a turn in the storyline happened, and I thought, ‘What the hell is going to happen now?’

      Looking at advanced mobility in new publication: Automotive Digest Publisher Chuck Parker has a new publication called Fixes and Solutions geared toward automotive professionals looking out a the next wave of technology and industry changes — well beyond coronavirus. I just wrote a piece on the District of Columbia releasing a study examining four plausible scenarios on how autonomous vehicles could be adopted in the area. Economic growth and greater transport solutions for local communities are advantages, but new problems could arise from adoption of the technology. However, there is more I could write about. In fact, here are eight topics that will have to be considered as challenges to overcome and integrate before we all get to ride around in autonomous electric shuttle buses………. cyber security, Internet of Things, cloud computing, robotics, renewable energy, batteries, mobile devices, and 5G.

      BYD and Hino commercial EVs:  BYD and Hino Motors have signed a strategic business alliance for collaborating on commercial battery electric vehicles development. The two companies will work together to develop the best-fit commercial BEVs for customers to achieve carbon reductions. Commercial fleet customers will be served, and BYD and Hino will cooperate in retail and other related business that will promote the adoption of BEVs. Hino’s director and senior managing officer Taketo Nakane said, “We are pleased with this collaboration aiming to realize commercial BEVs that are truly beneficial to customers both practically and economically. By bringing together BYD’s achievement in BEV development and Hino’s electrification technology and reliability built over years of experience in developing hybrid vehicles, we will develop the best-fit commercial BEV products for consumer in working towards swift market introduction.”

        Musk complains of ‘fascist’ response to Covid-19 during earnings report, Ford and Rivian cancel Lincoln EV for now

        Tesla Inc.’s profitable quarterly report was overshadowed yesterday by CEO Elon Musk’s angry comments, well represented by this one: “To say that they cannot leave their house and they will be arrested if they do, this is fascist. This is not democratic, this is not freedom. Give people back their goddamn freedom!”

        Musk would like to see the company’s Fremont, Calif., factory opened again. A government-ordered shutdown kicked in on March 24 with Covid-19 quarantine orders in effect at least until May 31. Musk told shareholders he didn’t know when Tesla could resume production in California and called the state stay-at-home order a “serious risk” to the business.

        It was the third quarterly profit in a row for Tesla, Inc. Gross margins in the first quarter jumped to 25.5 percent for the company. About 7 percent of its $5.1 billion first quarter revenue came from regulatory credits — funds paid by other automakers to buy the company’s carbon emissions credits. That revenue nearly tripled from the last quarter.

        Tesla’s quarterly report came just a day after Ford Motor Co. reported a $2 billion first-quarter loss, and forecasted losing another $5 billion in the current quarter as the Covid-19 pandemic takes away its new vehicle sales. Ford, like other major competitors, has seen its stock price slide down in recent weeks.

        Tesla has not seen that happen. Shares were coming in at $858.16 on Thursday morning, with the profitable quarterly report helping to strengthen that price. That trend has been upward since the beginning of April. Beginning production and deliveries in China is helping the company’s perceived value.

        Musk may be able to benefit generously from the financials. He may soon be making $750 million or more through his pay structure agreement made with shareholders in 2018. The Tesla chief has the option to buy 1.69 million Tesla shares at $350.02 each. Taking Monday’s Tesla closing stock price of $798.75 as an example, Musk could sell those shares for a profit of $758 million — once it reaches the $100 million at six-months average mark. It reached $145 billion this week, and around $96 billion for the latest six-month count.

        Ford and Rivian:  Ford Motor Co. has canceled its Lincoln-brand all-electric SUV that was going to be made in partnership with a powertrain provided by startup Rivian. The two companies are still talking about working closely together, and putting out a Lincoln vehicle that will also be based on Rivian’s EV “skateboard” platform. Rivian recently announced that it’s pushing back the release of its first two vehicles — an all-electric pickup truck and SUV — to early 2021 because of the coronavirus pandemic. Last year, Ford made a deal with Rivian to invest $500 million in the startup company just two months after Amazon led a $700 million investment in the Michigan-based startup. As part of Ford’s investment, it announced that it would develop an electric vehicle that used Rivian’s battery pack and electric motor setup. “Given the current environment, Lincoln and Rivian have decided not to pursue the development of a fully electric vehicle based on Rivian’s skateboard platform. Our strategic commitment to Lincoln, Rivian and electrification remains unchanged and Lincoln’s future plans will include an all-electric vehicle,” a spokesperson from Lincoln told The Verge in a statement.

        Natural gas stability:  As petroleum prices continue to go through upheaval in the Covid-19 economic environmental, natural gas can once gain offer fleets certainty during during a period of instability. Ryan Forrest, Western United States Region Manager at Trillium, makes the case that fleets can get hit hard depending on gasoline and diesel when the prices inevitably go back up — as seen many times during pricing instability from 2008 to 2014. Being a domestic fuel has helped natural gas retain its $2 per gasoline gallon equivalent (GGE) for several years. Fleets using renewable natural gas (RNG) in their CNG-powered vehicles are also enjoying making contributions to climate benefits and improved air quality. That point is reinforced by an April 20 announcement from Natural Gas Vehicles for America (NGVAmerica) and Coalition for Renewable Natural Gas (RNG Coalition) today that 39 percent of all on-road fuel used in natural gas vehicles in calendar year 2019 was RNG.

        BYD and Hino commercial EVs:  BYD and Hino Motors signed a strategic business alliance for collaborating on commercial battery electric vehicles development. The two companies will work together to develop the best-fit commercial BEVs for customers to achieve carbon reductions. Commercial fleet customers will be served, and BYD and Hino will cooperate in retail and other related business that will promote the adoption of BEVs. Hino’s director and senior managing officer Taketo Nakane said, “We are pleased with this collaboration aiming to realize commercial BEVs that are truly beneficial to customers both practically and economically. By bringing together BYD’s achievement in BEV development and Hino’s electrification technology and reliability built over years of experience in developing hybrid vehicles, we will develop the best-fit commercial BEV products for consumer in working towards swift market introduction.”

          Deepwater Horizon oil spill 10-year anniversary sends out reminders on safety and avoiding eco-disasters

          Two days before the 40th anniversary of Earth Day, the oil drilling rig Deepwater Horizon exploded and sank. The explosion and subsequent fire on April 20, 2010, caused the sinking of BP’s oil rig, the deaths of 11 workers, injuries to 17 other workers, and the spilling of four million barrels of oil over an 87-day period. The catastrophe in the Guif of Mexico, approximately 41 miles off the coast of Louisiana, led to British oil major BP, the Swiss drilling contractor Transocean, and oil field services company Halliburton, struggling to bring the damage under control.

          The spill cost BP over $65 billion in criminal penalties, civil claims, and clean-up costs. More than 47,000 people worked on the response effort in the summer of 2010. It became the biggest oil disaster ever in the US. Scientists estimated 184 million gallons were spilled — 18 times the amount spilled by the Exxon Valdez in 1989. Tourism was hit hard, along with the prime fishing grounds in Louisiana. For the oil industry, the Deepwater Horizon explosion represented the largest public relations crisis in its history. As the company said in a statement: “The accident and spill forever changed BP.”

          What about the environmental and safety impact? Endangering marine wildlife and throwing local ecosystems out of balance came from it. For anyone viewing news coverage of the disaster, oil soaked birds and beaches slick with crude were typical to see.

          PAH, or polycyclic aromatic hydrocarbons, was found up to eight miles from the Deepwater Horizon and was later found to be causing cardiac arrest in fish. Pockets of methane led to oxygen-starved zones, which caused marine life to smother. Large numbers of fish kills in the area were reported; and utero infections, fetal issues, and late-term pregnancy failures in dolphins. The Audubon Society reported that more than one million birds died as a result of the disaster.

          The oil spill’s most lasting effects have been in deep-water zones, wetlands, and in the the population of larger marine animals like turtles, whales, and dolphins with long lifespans, according to Donald Boesch, a professor of marine science at the University of Maryland Center for Environmental Science. Boesch was appointed to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling by President Barack Obama. Taking a look at a photo gallery from NPR will show you what it looked like and how the impact is still being felt.

          The US is far from enacting fail-safes against a disaster like the Deepwater Horizon happening again; though the Obama administration did enforce rules coming from oversight agencies after the BP disaster. But it’s far from over. An even larger oil spill took place gradually over several years. The US Coast Guard was finally able to contain the Taylor Energy oil spill into the Gulf of Mexico last May that had gone on for more than 14 years. It started in 2004 after Hurricane Ivan triggered an underground mudslide that caused Taylor Energy’s oil platform to topple and sink. The leak is thought to have topped the 2010 BP disaster by more than 241 million gallons, potentially making it one of the largest – and slowest – oil disasters ever recorded.

          The Trump administration has been supporting offshore oil drilling. The Department of the Interior will be allowing offshore exploratory drilling in about 90 percent of the outer continental shelf (OCS) acreage, under the National Outer Continental Shelf Oil and Gas Leasing Program for 2019-2024. The oil and gas sector in the region is expected to open up new opportunities to the market once challenges have been addressed and the program is belatedly approved and enacted.

          Two other energy and environmental disasters had their share of impact over the past decade. Japan’s Fukushima Daiichi nuclear disaster on March 11, 2011; and the Volkswagen emissions scandal, also known as Dieselgate, that kicked off in September 2015, eventually overshadowed the Deepwater Horizon oil crisis. While Covid-19 has taken over this year, once its contained and vaccines become common, attention will inevitably go back to climate change, air pollution, and avoiding future energy disasters that bring heavy costs to human, marine, and animal life, the global economy, and clean transportation.

          And in other news……….
          Speaking of Earth Day, now it’s time for the 50th anniversary on April 22. An anniversary event started on Sunday, April 19 to kick off Earth Week with a virtual stage of high-profile speakers, including public officials, activists, scientists, and performers. Event participants include Al Gore, Senator Elizabeth Warren, Bill Nye (the Science Guy), NRDC president and CEO, and former EPA administrator, Gina McCarthy, and actors such as Joseph Gordon-Levitt. During April 22-24, millions of people around the world are going online for a three-day mobilization to stop the climate emergency.

          How will clean car rules be affected by the Covid-19?  Climatewire’s feature (subscription required) doesn’t offer any real surprises. Global auto sales are gone for now, including electric vehicles. Tesla stock is doing alright with its China plant now open and running, and the Model Y coming out soon. Another interesting fact is that zero emission vehicles now make up 10 percent of new vehicle sales in Los Angeles County. Mayor Eric Garcetti wants to see that go up to 30 percent by 2028, by the the summer Olympics come back to the city. Overall, one quote in the article says it all on the state’s ZEV program: “California is aiming for 100 percent electrification of light-duty vehicles and most heavy-duty vehicles,” said Dan Sperling, director of the Institute of Transportation Studies at the University of California, Davis. “So this current lapse in the market is of great concern.”

          Making improvements to EV battery supply chain:  Questions always come up about where electric vehicles are getting their batteries — and the environmental and economic costs of making it happen. UC Berkeley’s Center for Law, Energy & the Environment (CLEE) and the Natural Resource Governance Institute (NRGI) are conducting a stakeholder-led research initiative focused on identifying strategies to improve sustainability and governance across the EV battery supply chain. The massive global EV deployment has been raising concerns over the sustainability of the battery supply chain, from mining impacts to vehicle carbon emissions. CLEE and NRGI have prepared a background brief to address key questions.

          Market analyst gives auto industry forecast during crisis:  Trucks.com conducted an interview with Adam Jonas, the transportation industry analyst at Morgan Stanley Research, on the state of the auto industry and transportation since the Covid-19 pandemic became a global crisis. A few of the interesting findings include:

          • The “work from home” mindset that several employers have been attempting to develop for years is starting to work. The duration and global scale is having an impact that could push auto sales down, as private vehicle ownership accounts for an 86 percent market share of commutes to work.
          • A scrappage plan similar to the “cash-for-clunkers” program a decade ago could stimulate auto sales and bring in newer, cleaner and safer vehicles cars and trucks in operation on our roads.
          • Car rental may see a permanent change with air travel being hit heavily, and the likelihood of travel patterns changing going forward.
          • Heavy-duty truck manufacturing looks like it will fall by more than half this year. Low oil and gasoline prices will continue to make trucks and vans more appealing for buyers.
          • Americans are now becoming more dependent on online retailers, digital logistics operations, and e-commerce players such as Amazon, Instacart, and Fresh Direct for food and household goods. It could a massive shift sparking the need for even more regional, local, and last-mile services. Drone delivery may have to be pushed forward, Jonas said.
          • Vehicle maker consolidation will continue, and economic uncertainly will keep the pressure on that trend.
          • Jonas thinks that Tesla’s retailing model will have to be used by more dealers. Leading dealer chain AutoNation has been showing signs of the chaos facing dealers, with 7,000 of its workers laid off this month due to sales dropping 50 percent.

            Tesla doing just fine in China during pandemic, Doing the math when buying your EV

            Tesla Inc. is clearing hurdles in the China auto market during the Coronavirus pandemic. The company had 12,709 vehicle registrations in China in March, versus 2,314 in February, marking its highest-ever monthly sales in the world’s largest auto market, according to data from LMC Automotive. Overall new passenger car sales in March were down 40.8 percent from a year earlier in that market. On Friday, the company said it has started selling two more Model 3 variants built at its Shanghai plant. That means all the Model 3s sold in China are locally made and free of import tax.
            Tesla plans to start delivering Long Range Model 3s starting in June, priced at 339,050 yuan after subsidies. The rear-wheel drive version, with a driving range of about 373 miles before needing to be recharged, will be priced at 439,900 yuan. The locally made Performance Model 3, for which deliveries are scheduled to begin in Q1 2021, will be priced 419,800 yuan, the California-based automaker said without specifying the price after subsidies.

            Telling Your Story: Doing the math on buying your EV
            Editor:  So we have our first response to my request on sharing your stories on how you got absorbed into the topics of clean transportation, electric vehicles, alternative fuels, renewable energy, and the like. Thanks to Emile Rocher, a professional in efficient and sustainable buildings — and also an electric vehicle owner — for sharing her experiences with a Ford Focus electric and a Mitsubishi Outlander plug-in hybrid. For those of you interested in sharing your thoughts on sustainable transportation, you can send your comments to jlesage378@gmail.com; or you can leave it in the Comment box at the end of the newsletter.

            After spending some 40 years building efficient buildings, when affordable grid tied PV came along some 7 years ago, we invested about $10,000 (Canadian dollars) in system equipment and installed it on a long weekend with the help of a couple friends. Ended up with a surplus of capacity becoming a net exporter which is contrary to the rules in oily Alberta, and were being paid half of retail cost in any case, which inspired us to purchase our first EV — a 2 year old deeply discounted Ford Focus with no km (range). Added another 1.5 KW to the system a few years ago and still had a surplus even while driving about 10,000 km/yr. So we parked our ancient oil burning Jetta and bought a plug-in Mitsubishi Outlander. The great AWD rig which will get 7 L/100 km (33.6 mpg) after the 50 km battery range is exceeded. Collectively these investments make the equity markets pale in comparison regarding risk and return. Our total electricity bill for one full year was $185 (Canadian dollars), electric driving included.

            What really needs to be driven home in this oil vs renewable debate is economics. Oil for personal transportation at this time, disregarding the global risk of climate change, just can’t compete evenly with the multiple massive subsidies that industry enjoys. Even Exxon and Shell are buying solar electricity (2 cents/kw hr recently for Exxon) and using it as one of the many other energy inputs in producing liquid fuel.

            Do the math — starting with the 30 miles in which a first-gen EV can travel on 7 KW hr of electricity. Remember that the oil industry used that much electricity in the refining process alone to produce one gallon of gasoline (source: Nissan). This business model makes as much sense as turning gold into lead at a huge cost. We need a comprehensive study on all the other collective inputs that go into turning the various sources of hydrocarbons into liquid fuel, and to publicize it as aggressively as the fossil industry lobbies politicians to keep the oil flowing.

            —Emile Rocher

            And in other news………..
            Responding to Covid19:  BYD Motors will pledge a donation of $1 million in medical supplies, including personal protective equipment (PPEs) and hand sanitizer to transit agencies and first responders in the US and Canada. The supplies include FDA-approved adult surgical masks and KN-95 respiratory protective devices, as well as hand sanitizer that is 99.999 percent effective. Several thousand PPEs have already been delivered to agencies that include the City of Los Angeles, the Valley Medical Center in San Jose, Calif., the Toronto Transit Commission, and the LA County Sheriff’s Department………… Hyundai Motor America has donated $100,000 and 10,000 coronavirus test kits to support drive-up testing in Detroit, part of a larger effort by the company to support 21 US drive-up sites. About 65,000 tests have also been donated to hard-hit areas like New Orleans, Chicago, and Detroit, the company said.

            Supporting solar in USAF:  Pvilion, a leading solar powered fabric provider, announced it has been awarded a Phase II Small Business Innovation Research (SBIR) contract by the United State Air Force (USAF) to continue its development of rapidly deployable, solar powered structures. SBIR enables small businesses to explore their technological potential and provides the incentive to profit from its commercialization. The USAF has favorably evaluated the products Pvilion presented for cost, complexity, sustainability, required manual labor, as well as for energy independence all with the goal of maximizing mission-objective readiness. The company says that its solar technology is significantly lighter and more adaptable than traditional solar options. It is integrated entirely into a system already being installed, such as for a tent, shade canopy, or hangar. With fully integrated photovoltaic fabric panels, Pvilion’s structures allow for the multi-capability use by providing power, shelter, lighting, and climate control. Pvilion’s commercial customers use its solar fabric technology in structures used for events such as music festivals, in temporary industrial worksites, and in structures found in parks, municipalities, universities, and corporate campuses. Military operations are a good fit, too. “We’re now working hard to quickly delivery solar structures to Airmen who need them most. In this challenging time, instant access shelter, power, and climate control is key. This project is very important to Pvilion and, I believe, the nation as whole,” said Colin Touhey, engineer and Pvilion CEO.

            Fuel cells for marine vessels:  ABB has signed a Memorandum of Understanding (MOU) with Hydrogène de France to jointly manufacture megawatt-scale fuel cell systems capable of powering ocean-going vessels. The agreement will establish a close collaboration on the assembly and production of the fuel cell power plant for marine applications. Building on an existing collaboration announced in 2018 with Ballard Power Systems, ABB and HDF intend to optimize fuel cell manufacturing capabilities to produce a megawatt-scale power plant for marine vessels. The new system will be based on the megawatt-scale fuel cell power plant jointly developed by ABB and Ballard, and will be manufactured at HDF’s new facility in Bordeaux, France.

            DC charging for Kia Niro:  Electrify America has made an agreement with Kia Motors America to offer ‘Kia Select,’ a new charging program with optimized pricing for the Kia Niro electric vehicle (EV) model on Electrify America’s direct current (DC) fast charging network. The program offers a flat rate of 35 cents per-minute charging for current Kia Niro EV drivers, designed specifically for the unique DC charging characteristics of the model. The program also waives session fees and has no subscription fees for participants. To participate in the program, drivers can simply download the Electrify America charging app and complete a brief enrollment process. Drivers can also use the app to locate Electrify America charging stations, start a charging session, and remit payment using their credit or debit card entered during the registration process.

              Telling your story on how you got here, Trump admin rolls back clean car standards

              For those of us homebound during the Covid-19 outbreak, what’s the best way to avoid cabin fever and bleak news saturation?

              A few good ones I’ve heard or experienced have been: catching up on a good TV show like Westworld, finally getting around to using an exercise machine, cooking healthy meals at home, playing board games with co-residents, chatting with friends and family on Zoom, and writing (or attempting to write) the Great American Novel.

              And there’s always telling a good story. One of the best work experiences I’ve had in recent years has been asking stakeholders in advanced, clean transportation how they got here in the first place. How did they get so passionate about the subject matter?

              That might have happened during a video interview for Automotive Digest; or a phone interview for an article; or during a luncheon at ACT Expo; or by exchanging emails after connecting on LinkedIn; or watching them give a presentation on the vehicle, fuel, or technology they’ve been championing for years; or talking with them during monthly calls of Green Auto Market’s editorial advisory board.

              I’ve had a few more good questions to ask them, or that I got asked. These might include:

               

              • What do you really think it will take for clean vehicles to reach 10 percent (or 25 percent, 50 percent, etc.) of US new vehicle sales?
              • What are the most compelling points to make about switching over from gasoline and diesel to electric vehicles; or hybrids; or hydrogen; or natural gas; or propane autogas; or biogas; or renewable fuel?
              • What comes first — the chicken or the egg? The vehicle or the charging/fueling infrastructure? Or, are they equally important?
              • How did you pick this field of endeavor over something more established and safe?

              Readers of Green Auto Market have told me quite a few fascinating stories. Their passion for the subject matter and staying informed might have started years ago when they took over fleet acquisitions for a city directed to reduce greenhouse gas emissions; or they’ve been obsessed with electric vehicles ever since they made their first do-it-yourself low speed, short range EV from a kit — and years later bought a Nissan Leaf, Chevy Volt, or Tesla Model S; or they’ve worked for a government agency promoting adoption of alternative fuel vehicles; or they’ve worked in one or more startups breaking into the world of EVs and charging; or for a major automaker setting up a division in EVs, autonomous vehicles, or mobility services; or they just love to read and talk about the latest in cars, fuels, and vehicle tech.

              For those of you interested in sharing your stories about getting hooked on clean transportation — and about what you’d like to see happen in the near future — in Green Auto Market, please email at jlesage378@gmail.com. It would be best to include your name and affiliation (employer, organization, area of interest, etc.); or you can remain confidential about your name and affiliation, if need be.

              Speaking of which, here’s my story………

              I started following the subject matter in the 1990s while serving as an editor at Automotive Fleet. I spent time talking to fleet managers who were testing out vehicle conversions to natural gas and propane autogas; they started receiving funding grants from Air Quality Management Districts in California (and other agencies around the country) to convert vehicles over to compressed natural gas fueling systems and to have a fueling dispenser placed at their base location.

              During that time, I might also have been interviewing someone involved in testing out other alternative fuels such as ethanol and methanol. Support for methanol didn’t last very long after engine corrosion became a major concern. I’d also heard about limited test projects being done — electric vehicles (one of them later becoming General Motors’ EV1), a self-driving truck by the military, and hydrogen fuel cell vehicles that picked up more support from automakers and government agencies by the early 2000s.

              For the most part, interest in clean transportation faded away by the second half of the 1990s. Cheap gasoline and diesel prices; attractive fleet incentives for full-size cars, trucks, and vans; and domestic manufacturer truck and van models that could be customized and equipped for utility fleets, construction, and maintenance operations, took away much of the interest in alternative fuel vehicles by the late 1990s.

              The turning point for me was in 2007. As I’ve shared with some of you, on Aug. 12 of that year, I was struck with encephalitis — an inflammation of the brain caused by a previous infection activated again. That one had been herpes simplex that started when I was a child with chicken pox. It was reactivated in 2007 primarily by stress; though it was largely unknown at the time, and it wasn’t diagnosed correctly at first. On that day, my heart stopped twice and I had to be revived — or I wouldn’t have lived through it.

              I was hospitalized for about two months, with the encephalitis swell blocking my memory (front, left cortex of the brain) for most of that time period. I wasn’t able to return to my office for work until after the first of the year. During that time after getting out of the hospital and staying home, I found myself going on the internet to research and read about subject matter I’d been digging into earlier — such as while attending the Alternative Fuels & Vehicles Conference in Anaheim earlier that year. Topics that grabbed my interest included concern over global warming; cleantech startups being a hot commodity, with capital available for EV startups and solar and wind power companies; and reading about corporate sustainability policies.

              My interest transitioned over to fascination during 2008 — from the gasoline and diesel price spike and volatility, and doing features for LCT Magazine on chauffeured transportation fleets starting to try out alternative fuels. During that year, I profiled the Econation startup company— which was bringing in Priuses, hybrid SUVs, and CNG-powered Lincoln Town Cars to its fleet for corporate trips in Los Angeles.

              I was blessed with support for my interest and fascination in these cars, fuels, and technologies while working with Automotive Digest and its team (led by Publisher Chuck Parker). Green Automotive Digest started up in 2010, which gave me an excellent channel for meeting and interviewing several stakeholders in the field.

              During all of this time period, I became most fascinated with two key themes — clean transportation offering pragmatic solutions; and the absolute necessity of transportation in our economy and lifestyles. I would end up talking about, and writing about, these topics quite a few times — at least as a backstory to a news item or feature I was digging into.

              Here’s a question for you to consider. What if you could help clean the air, reduce greenhouse gas emissions, create jobs, and support technology innovation? Would you consider that intelligent, practical, and inspiring? That’s been a key piece of the formula when a new vehicle technology is introduced to the public. A piece of the press release might state something like: “This fuel will reduce carbon emissions by 1.2 million tons this year compared to diesel fuel.”

              As for the role of transportation in our cultural and economic development, I think it’s been as important as power, communications, lighting, medical care, and distributing water. The essential value and role that ground transportation has played in human history for 200 years started with rail, and later with internal combustion engines and crank-up starters, the first electric vehicles, and bringing steam-engines over from trains to cars. With it came the eventual domination of petroleum and serious threats to air quality and sustainability of the world we live in.

              I have to admit that I do love fast cars that can guzzle a lot of gasoline — with the 1968 Pontiac GTO being my favorite. That wasn’t the second car in the legendary car chase scene in the 1968 movie Bullitt — that was another of my favorites, the Dodge Charger, taking on the classic Ford Mustang. I believe we have the right to own and retain these cars, but they’re certainly not practical for daily commuting.

              I would gladly ride to work in a shared, automated, electric SUV or bus. Why stay stuck in traffic, resenting other drivers and feeling bored and restless when you could be chatting with ridemates, playing a video game, watching something really good on a screen, reading your favorite humor columnist, texting comments to friends and family, and more?

              I have appreciated researching and writing about the subject matter for previously mentioned publications. I’ve also appreciated my freelance writing with Autoblog Green, Hybridcars.com, and Oilprice.com. I had some good years conducting market intelligence studies on car rental, business travel, and travel management for Abrams Travel Data Services. I’ve also valued participating in speaker panels at AltCar Expo. I do look forward to what’s next, and expect that Covid-19 will be overcome and we’ll get back the business of green cars, fuels, and technologies.

              And in other news:

              White House finalizes clean car rules:  Last week, the Trump administration announced its rollback of Obama-era fuel-economy regulations from 2012, which aimed to require automakers to up the average fuel economy in their fleets to 54.5 mpg within the next few years. The administration finalized the second part of the rollback, which is formally known as the Safer Affordable Fuel-Efficient (SAFE) Vehicles rule. The second part of the SAFE rule would require automakers to increase the fuel economy of passenger cars by 1.5 percent each year. That’s far less stringent than the standards set by the Obama administration, which mandated a 5 percent annual increase in fuel economy. But it’s less dramatic than the Trump administration’s original plan, which was to freeze the standards at 2020 levels through model year 2026. Court challenges are expected to be filed once again. President Trump posted tweets similar to comments he’d made last year: ”My proposal to the politically correct Automobile Companies would lower the average price of a car to consumers by more than $3500, while at the same time making the cars substantially safer,” he tweeted. “Engines would run smoother. Positive impact on the environment! Foolish executives!”

              Automakers close plants, making ventilators:  Here’s a list of US auto factory shutdowns and scheduled dates of reopening in 14 states across the US. Several of the plants will be opening up again this month, between April 13 to 20. Ford and General Motors announced in late March that they’ll be building thousands of ventilators to fight Covid-19. These are taking place in plants that had been shut down from car production. Tesla is showing a new video posted on the company’s YouTube channel, where its engineers show off two versions of a ventilator, a prototype model with its components laid out across a desk, as well as a packaged model that shows how it might look when used by a hospital. CEO Elon Musk made a commitment to build the ventilators last month after New York City Mayor Bill de Blasio asked for the company’s help.

              BYD wants to improve EV battery safety:  BYD last week unveiled its Blade Battery, designed to resolve concerns about battery safety in electric vehicles. At an online launch event, Wang Chuanfu, BYD’s chairman and president, said that the Blade Battery reflects BYD’s determination to resolve issues in battery safety while also redefining safety standards for the entire industry. The Blade Battery has been developed by BYD over the past several years. Due to its optimized battery pack structure, the space utilization of the battery pack is increased by over 50 percent compared to conventional lithium iron phosphate block batteries. While undergoing nail penetration tests, the Blade Battery emitted neither smoke nor fire after being penetrated, and its surface temperature only reached 30 C (86 F) to 60 C (140 F). It would be far less susceptible to catching fire – even when they are severely damaged — than other batteries on the market.

              China extending EV sales incentives:  China agreed to extend tax breaks and subsidies on electric-vehicle purchases for two years to provide relief for the struggling industry in the wake of the coronavirus pandemic. The government will keep waiving the 10 percent sales tax on EVs, a benefit that began in 2014 and was due to expire at the end of this year, through 2022, according to a media report. The state council overseeing the program also agreed to prolong subsidies for EV purchases for two years. The sales tax waiver and subsidies apply to battery electric, plug-in hybrid, and hydrogen fuel cell vehicles.

              Emissions drop during pandemic:  The coronavirus pandemic is offering one advantage: shutting down industrial activity and temporarily slashing air pollution levels around the world, satellite imagery from the European Space Agency shows according to Wired. Readings from ESA’s Sentinel-5P satellite show that over the past six weeks, levels of nitrogen dioxide (NO2) over cities and industrial clusters in Asia and Europe were markedly lower than in the same period last year. Nitrogen dioxide produced from car engines, power plants, and other industrial processes, is thought to exacerbate respiratory illnesses such as asthma.
              (Editor’s Note: Look for the April issue of Wired to read a special section on climate change, entitled, “We Have One Earth — And The Technology To Save It. Go!”)

                Looking for a silver lining during the global pandemic

                So Gavin Newsom, California’s governor, just told us Thursday to stay in our homes and not go out to restaurants, bars, events, places of worship, gyms, parties, or any other social activity. We’re to avoid non-essential social contact to slow the spread of the deadly COVID-19 pandemic, and to stay six feet or father apart — aka social distancing. He’s not the only governor to issue emergency orders.

                When this global health crisis will reach its peak and begin to change course is a troubling unknown. Pharmaceutical scientists may be developing drugs that could play a vital role for change, but the medications aren’t going to be here for a while. Onlookers want to see the number of new cases flatten out and then diminish.

                We’re advised by governors, the World Health Organization, and the Centers for Disease Control and Prevention, to stay informed and to practice preventive actions.

                I think there’s one more step: finding reasons to be hopeful — to look for a silver lining. This is going to go on for awhile, and it would be better for loved ones and co-workers if we weren’t completely miserable to be around.

                Here are a few resources and interesting news stories I’ve discovered.

                Zoom offers an antidote to social distancing and isolation
                If you’ve ever seen the 1968 science fiction classic, 2001: A Space Odyssey, you may remember a scene where a future space traveler businessman takes a break to call his adorable little daughter on a videophone. I saw the movie again a couple of years ago, and thought, wow that will be wonderful when we someday can do something like that with such a crystal clear image and strong, consistent transmission. We could use Skype or FaceTime then, but there were a lot of glitches and inconsistencies.

                That’s all changed with Zoom Video Communications and it’s remote conferencing services — which makes it seem like these participating people are right next door to you, and not 3,000 miles away. There are other products fulfilling the demand lately — Microsoft Teams, Slack, and RingCentral are out there — but for now Zoom is pervasive and everywhere with its free-to-low-cost services supporting video conferencing, online meetings, chatting, and other features. I’ve so far participated in two of these meetings, and now have a few more scheduled. Any question I’d had about it would be answered by someone on the call who’d already tried it out a few times and understood the control panel.

                I’ve heard a few recurring themes — such as we’re already getting cabin fever stuck in our homes, unable to go out to dinner or do much of anything outside the house. There are a lot of stories about employees being put on unpaid leave for the next month or more; or having all their employee benefits covered but no pay for an unspecified period of time. A lot of comments are being made about dealing with fear and stress; I shared about how much I’d been remembering living through the LA Riots of 1992 and Sept. 11, 2001, both of which I happened to be in places pulled into the emergencies — at least for a few days (1992) or hours (9/11).

                We can’t get close to anyone we’re not living with for now — especially to give and receive handshakes and hugs. We’re feeling an amalgam of stress, fear, dread, fatigue, and paranoia about the worst-case scenarios we’re hearing about in the media.

                Giving thanks to the frontline
                So far, I’ve heard a lot about the intense pressure that two segments of workers have been feeling over the past month or more — healthcare professionals and grocery store employees. Doctors, nurses, and healthcare workers are being praised in many European cities at least one minute each night as they come together in gratitude. That can take place in open windows or balconies in Rome, Madrid, Paris, Athens, or Amsterdam, where they send cheer and applaud people too busy working in hospitals non-stop to hear them.

                In America, Larry Brilliant, the epidemiologist who helped eradicate smallpox, had this to say: “I’m seeing an incredible influx of nurses, heroic nurses, who are coming and working many more hours than they worked before, doctors who fearlessly go into the hospital to work. I’ve never seen the kind of volunteerism I’m seeing (now).”

                Major grocery store chains are giving praise to their supermarket employees, who are feeling the pressure of serving frightened, demanding customers standing in long lines and searching for what they can get in toilet paper, paper towels, bottled water, pasta, spaghetti sauce, soup, baking goods, Clorox, and other popular products. Kroger is giving full-time employees a one-time “appreciation” bonus of $300 at its Ralph’s, Fred Meyer, and other retail brand stores. Albertsons Cos. will be installing plexiglass barriers in its checkout lanes to safeguard shoppers and cashiers — and will pay employees an extra $2 an hour as an “appreciation” bonus at its Albertsons, Safeway, Vons, Pavilions, and other retail brand stores.

                “Our associates are working around the clock to keep our stores open for our customers. I am incredibly grateful for all they are doing,” said Rodney McMullen, Kroger’s chairman and CEO, in a statement. “The true heroes in this story are our associates, and we want to provide them with additional resources and support to help them continue their remarkable effort.”

                Musk changes course, makes contributions for coronavirus patients
                While Tesla CEO Elon Musk has been up to his usual antics lately by dismissing COVID-19, he’s now joining up with colleagues to contribute to support for patients impacted by the disease. He’s delivered more than 1,200 ventilators to California officials this week, an effort that will provide treatment for hospital patients with severe cases of COVID-19 — gaining kudos from Gov. Gavin Newsom. That followed soon after President Trump praised Tesla, General Motors, and Ford for contributing to the desperately needed equipment.

                This happened about a week after Musk gained notoriety for dismissing the novel coronavirus in a SpaceX company email, and not long after a controversial Twitter post stating that that “the coronavirus panic is dumb.” Like his auto executive colleagues, Musk is having to face the shutdown of factories and consumers putting off purchasing their products. The Fremont, Calif.-based Tesla plant did close yesterday, after Musk had pledged to keep it open. Tesla’s stock has been hit hard, like all the other automakers and tech giants. But investors and the general public do expect Musk to show signs of being a good citizen, which he has gotten around to. Stock market analysts see that Tesla and other publicly traded companies are just going to have to wait until the novel coronavirus statistics begin dropping down.

                Donations are starting to come in to fund solutions
                Pop star Rihanna’s charitable organization, the Clara Lionel Foundation, has announced it will be donating $5 million to coronavirus response efforts to do its part to help limit the spread of COVID-19. The organization, which Rihanna named after her grandparents Clara and Lionel Braithwaite, said it will be making the donation to several organizations – including Feeding America, The World Health Organization’s COVID-19 Solidarity Response Fund, and International Rescue Committee. Funds will go toward supporting local food banks serving at-risk communities and the elderly in the US as well as the “acceleration of testing and care in countries like Haiti and Malawi.”

                The donation will also go toward “protective equipment for frontline health workers and diagnostic labs,” healthcare worker training and virus prevention “in countries that will be on the frontlines of the COVID-19 response,” and the “distribution of critical respiratory supplies,” the group added.

                Big-dollar donations have been pledged by the Bill and Melinda Gates Foundation and Bloomberg Philanthropies earlier this month that were aimed at supporting global response efforts to the COVID-19 outbreak. Donations are also rolling in from pharmaceutical companies supporting the research process, such as Novartis donating its malaria drug for testing.

                The World Health Organization (WHO) has created a fund to prepare for and respond to the spread of the coronavirus. The COVID-19 Solidarity Response Fund anticipates a need of $675 million through April to address the worldwide outbreak, and said funding needs will likely increase as the pandemic evolves.

                Funds will be used to support efforts in tracking and understanding the spread of the disease, ensuring that patients can access the care they need and that frontline workers can get supplies and information. Another goal is to accelerate the development of vaccines, tests and treatments, according to UN Foundation representatives.

                CALSTART turning 2030 Policy Summit into interactive online experience

                CALSTART is committed to bringing partners together to transform transportation for good. In light of the COVID-19 issue, the organization has modified its format of the Policy Summit to be a highly interactive web conference. It’s taking place tomorrow, March 25, from 10:00 a.m. to 2:30 p.m. Pacific time. The agenda has been revamped to accommodate a new format with a shorter day and a dynamic format with high-energy panels and hard-hitting keynotes. CALSTART encourages people to register now, as space will be limited. The cost is $75. A Zoom call-in number and link will be sent to your email on file. Sponsors include Southern California Edison, Cummins, Volvo, the Propane Education and Research Council, Roush CleanTech, and Toyota.

                  The state of automotive and transportation as the coronavirus pandemic unfolds

                  There are several unknowns shrouding a new virus identified three months ago in China and now seeing fear spread worldwide. The World Health Organization (WHO) reported as of March 15, that there have been 153,517 confirmed cases and 5,735 deaths worldwide of COVID-19 — with 81,048 confirmed and 3,204 deaths in China. It crossed a pivotal point over the past week with the WHO declaring on Wednesday that the coronavirus is now officially a global pandemic. That announcement was followed on Friday with President Donald Trump declaring it a national emergency.

                  What is appearing to become the largest global development in years will continue to remain shrouded in mystery for the unforeseen future. It will take quite a while until the public can rest assured that healthcare professionals can stop the spread and bring a cure — or at least arrest worsening of symptoms — for those infected with the contagious respiratory disease. It’s been causing panic among those crowding supermarkets to purchase bottled water, toilet paper, sanitary wipes, and in the past few days, nutritional basics such as canned soup, pasta, and bread. Governments around the world are placing severe restrictions on travel and public gatherings in attempts to quell panic and spreading of the infection and disease.

                  The global automotive and transportation sectors are starting the feel the impact first witnessed in China — and now spreading to every continent except for Antartica. The long-term impact is expected to be severe for governments pumping expenditures into testing for the infection, researching the virus in labs, and quarantining people who’ve tested positive for COVID-19 to their homes or to government-run facilities. Automakers and many other corporations are starting to take hits in stock market value, and many companies are expected to take huge financial losses. Some of that will come from revenue and profit loss as more and more events are being canceled if they have attendance of more than 50 people (or even less) — starting with sporting events being postponed and many other announcements such as Louisiana opting to postpone its April primary election; and schools telling students that classrooms will be closed for now and that universities will finish their semesters and quarters with online classes. Businesses around the country also have been shutting down over the past week.

                  There are many questions that will need to be answered in the weeks and months ahead…… Will people want to travel and take road trips, and will there be too many restrictions in place for it to work? Will their concerns for climate change and air pollution be anywhere near their fear of coronavirus spreading? As the economy is hit hard and job losses potentially get underway, will consumers be able to go check out new cars (including electric vehicles) and slap down their down payments? How will service-based sectors be impacted, such as auto sales and vehicle maintenance, public transit, and ride services, as the public will want less contact with others for fear of contagion? What will the oil price war between Saudi Arabia and Russia — intensified by the coronavirus news — mean long-term?

                  Here’s an overview of how the coronavirus is beginning to impact the automative and transportation sectors………….

                  Impact on China car sales:  Retail sales of new vehicles in China, the world’s largest auto market, plunged 80 percent in February, according to the China Passenger Car Association. BYD’s electric vehicle sales dropped 79.5 percent year over year during that month. BAIC BluePark, the EV division of BAIC Group, dropped about 65 percent. Volkswagen’s EV partner JAC saw its sales drop by 63.4 percent. Coronavirus also forced temporary closures of Tesla’s new Shanghai car plant and stores throughout the country.

                  EV battery supply tightening:   Many automakers are struggling to find adequate supplies of electric vehicle batteries. One of the factors is China being a major global leader in refining cobalt, a major ingredient in lithium batteries. The pandemic is expected to affect cobalt processing plants and EV costs. Prices are expected to be rise for automakers such as from Chinese lithium producer Ganfeng Lithium, which supplies Tesla and Volkswagen; although that cost increase has been by less than 10 percent so far.

                  What will oil price war mean?:  Saudi Arabia declared a price war on Russia’s oil industry on March 8. Russian President Vladimir Putin had refused to cut back oil production in the face of depressed prices caused by an unprecedented 3.5 million barrels per day fall in demand that was thought to be caused mainly by the coronavirus crisis. The Saudis are now flooding the oil market and unilaterally slashed their own prices enough to drive down prices on Monday, March 9, by 25 percent. That overall trend was being felt over time. Brent oil plunged from $68.44 per barrel on December 30 to $34.36 on March 9. WTI went from $61.68 to $31.13 during that time. Analysts fear a serious negative impact on the US shale industry. Stock analysts assign the oil price plunge as a factor in Tesla’s share prices failing over the past week. Overall, analysts expect that the oil supply will continue increasing. Oilprice.com just reported that “the oil market is heading for the largest ever crude glut in the first half of 2020, which could be two to nearly four times bigger than the biggest surplus recorded so far.”

                  What about the economy?:  The Federal Reserve decided yesterday to drop its benchmark interest rate by a full percentage point to near zero, and promised to boost its bond holdings by at least $700 billion. Fed Chairman Jerome Powell told press by phone that the virus’s disruption meant second quarter growth would probably be weak and it was hard to know how long the pain would last. That’s why the Fed is advocating a clear role for fiscal policy to help cushion the blow. Stocks are still way down from recent highs on fears of coronavirus, an oil price war and travel bans, and the automakers have been hit particularly hard as supply-chain problems mount across the globe. The Dow Jones Transportation Average is down 11 percent as a flood of store, restaurant and event closings send shockwaves. Major publicly traded companies in trucking, airlines, auto, freight/logistics, and railroads, are down about 10 percent to 22 percent today.

                  Musk downplays risk of coronavirus:  Tesla and SpaceX CEO Elon Musk on Friday sent a company-wide email to SpaceX employees stating that evidence he had seen about COVID-19 “suggests that this is *not* within the top 100 health risks in the United States.” They have a higher risk of being killed in a car crash, he said. Days earlier, he’d tweeted that “the coronavirus panic is dumb,” which was liked by about a million of his Twitter followers. President Trump had taken a similar approach not long ago, stating that more people are likely to die from influenza than coronavirus. Trump has had to back off such comments, and has taken a few steps in the opposite direction since then including declaring the national emergency.

                  First US auto plant employee tests positive:  The first-known employee of a Detroit automaker to be diagnosed with the coronavirus in the US works at a Fiat Chrysler Automobile plant near Indianapolis, which was confirmed on Thursday. The unnamed male employee at the Kokomo Transmission Plant, located about 50 miles north of Indianapolis, was quarantined and received medical care, according to Fiat Chrysler and the United Auto Workers union. An undisclosed number of other people who may have come into direct contact with the person diagnosed with coronavirus also have been quarantined, according to the automaker. Production at the plant continued as normal, but was later idled out of fear spreading among workers.

                  Air travel hit hard by restrictions:  Major airlines have been particularly hit hard by the global pandemic, with the president’s new travel ban with Europe worsening it. The prospect of losing spring and summer bookings is another part of expected losses. British Airways’ chief Alex Cruz, told 45,000 staff on Friday, for airlines this is already bigger than the SARS epidemic, the aftermath of 9/11, or the 2008 financial crisis.

                  Delivery services still up and running:  Amazon says its Prime delivery service is experiencing delays, and it’s running out of stock on some household staples due to the coronavirus outbreak, CNBC reported. Food and grocery delivery services such as DoorDash, Postmates, Grubhub, Uber Eats, and Instacart are seeing a lot business. There is currently no evidence that COVID-19 can be transmitted through food or food packaging, according to the CDC and the FDA. A larger concern is possibly transmitting the coronavirus from delivery person to customer, or vice versa, through coughing, vaporized air particles, or other direct contact. Companies are urging drivers and shoppers to take extreme caution.

                  BYD becomes largest face-mask supplier:  BYD is becoming a major supplier of products that are now in extreme demand — face masks and disinfectants. Its new Shenzhen, China-based plant is able to product five million face masks and 300,000 bottles of disinfectants per day. It’s been done in response to severe shortages at hospitals and agencies across China since the COVID-19 outbreak. It started production on February 9, and now hundreds of employees are working day and night to fulfill orders.

                  Customers dwindling at dealer showrooms:  Auto dealers are hearing worrisome news such as automakers shuttering plants in Asia and Europe, and schools closing and major events shutting down in the US. Some dealers are reporting dwindling visitors and sales. John Luciano, managing partner with Street Volkswagen in Amarillo, Texas, and chairman of Volkswagen’s national dealer council, says that sales are definitely falling and that conditions are changing a little bit more every day; a sentiment echoed by several other dealers. Cox Automotive, which owns Kelley Blue Book, Autotrader, and Manheim, sees negative U.S. economic growth in the second quarter and has withdrawn its forecast for 16.6 million new-vehicle sales in the US this year. Morgan Stanley analyst Adam Jonas would like the Trump administration to consider rolling out another “Cash for Clunkers” program, which was a $3 billion federal program in 2009 that incentivized consumers to swap aging gas-guzzlers for new, more fuel-efficient vehicles. Editor’s note: The Colorado house of representative just passed a measure that would allow electric vehicle-exclusive manufacturers such as Tesla to sell directly to consumers if the automaker has no franchised dealers in the state. It still has a ways to go to be cleared and become a new law in Colorado.

                  Trucking feeling the squeeze:  West coast ports are starting to see a decline in cargo ships full of containers enter their ports, with the Port of Seattle seeing a recent decline akin to what usually happens over an entire years. The Ports of Los Angeles and Long Beach, collectively the nation’s largest port, is seeing a drop in ships entering the port and cargo containers being unloaded for truck transport. Much of that has been originating in China, where plants have been closed down for several weeks after the coronavirus outbreak became pervasive.

                  Automaker response to crisis:  Ford, General Motors, and Fiat Chrysler Automobiles (FCA) have told non-factory employees to work remotely in order to avoid contracting and spreading the coronavirus. Factory workers at plants in the US, however, are being told to remain in place — despite the United Auto Workers union announcing Thursday that a Fiat Chrysler employee at the company’s Kokomo Transmission Plant in Indiana tested positive for COVID-19. Other automakers operating in the US are notifying employees with warnings. Nissan, which operates factories in Tennessee and Mississippi, said that employees who feel symptoms should notify their health care provider and not come to work. In Europe, FCA, Peugeot, Volkswagen, and Audi stopped much of their production plant work today as they grapple with the coronavirus crisis and plunging demand.

                  South Korea and China recovering, not so for Europe and the US:  South Korea reported more recoveries from the coronavirus than new infections on Friday for the first time since its outbreak emerged in January. It’s raised hopes that Asia’s biggest epidemic outside China may be slowing. The Korea Centers for Disease Control and Prevention (KCDC) reported 110 new coronavirus cases on Friday compared with 114 a day earlier, taking the national total to 7,979 on that day. The death toll rose by five to 72 as of late Friday. China has seen a drastic drop in infections — from hundreds of cases per day in February, to less than 50 each day last week. The rate of resumption of work at its factories and provinces is slowly opening up. China had shut down most provinces in a bid to contain the outbreak, and roads, transportation networks as well as factories had been closed. Europe and the US are seeing their numbers continue to go up. Nearly 170 million people were under orders to remain in their homes this weekend as France and Spain joined Italy in placing strict quarantine rules on their entire populations amid alarming rises in coronavirus cases and deaths.

                  Facts about Coronavirus:   For those wondering about some of the terminology and what’s expected to come next…………

                  • It’s now typically being called “novel coronavirus.” Why is that? Simply that it’s a new form of the coronavirus. As for coronavirus, the name covers a family of seven known viruses that can infect people, including the common cold and other respiratory infections.
                  • The 2019 novel (new) coronavirus has been named SARS-CoV-2, and the disease it causes is called coronavirus disease 2019, or COVID-19.
                  • The Centers for Disease Control and Prevention (CDC) defines the symptoms that may appear two-to-14 days after exposure as: fever, cough, and shortness of breath.
                  • The CDC recommends that you immediate get medical attention if you have any of these emergency warning signs:
                    —Difficulty breathing or shortness of breath
                    —Persistent pain or pressure in the chest
                    —New confusion or inability to arouse
                    —Bluish lips or face
                  • CDC recommends taking the following steps to protect yourself:
                    —Clean your hands often
                    —Wash your hands often with soap and water for at least 20 seconds.
                    —You can also use a hand sanitizer that contains at least 60 percent alcohol.
                    —Avoid touching your eyes, nose, and mouth with unwashed hands.
                    —Avoid close contact with people who are sick.
                    —Be particularly careful if COVID-19 is spreading in your community.

                  While some people dispel vaccine as a solution, there has been a lot of interest in when we’ll be seeing a vaccine available at medical offices, similar to the flu shots our doctors and nurses have been recommending in recent years. However, it won’t be showing up anytime soon for the novel coronavirus.

                  “A vaccine that you make and start testing in a year is not a vaccine that’s deployable,” Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said last week. The earliest it would be deployable, he said, is “in a year to a year and a half, no matter how fast you go.”

                    Uber and Lyft rides are so far adding to air pollution, Nikola Motor going public

                    Ride-sharing not helping to cut emissions:  Bad news for those hoping the explosive growth in Uber and Lyft rides in recent years would mean less car ownership, gasoline consumption, and air pollution in crowded cities. It’s actually getting worse. According to a new study by the Union of Concerned Scientists, ride-hailing trips today produce an estimated 69 percent more pollution on average than the trips they displace in the US. In cities, these rides provided by Uber, Lyft, Via, Curb, and other firms, are usually taking away even more low fuel consumption and displacing mobility such as public transportation, biking, or walking. UCS recommends that these companies take efforts to electrify their fleets and increase their pooled rides. “For ride-hailing to contribute to better climate and congestion outcomes, trips must be pooled and electric, displace single-occupancy car trips more often, and encourage low-emissions modes such as mass transit, biking, and walking,” the report says.

                    But that’s a tough sell for fleets of driver-owned cars and self-employed workers struggling to make a living in ride hailing/sharing. When you take an Uber or Lyft ride, you’ll usually be picked up in a small, fuel-efficient car or crossover utility vehicle. It could be in a Kia Optima or Kia Sportage, a Honda Civic, a Toyota Yaris, a Nissan Rogue, and occasionally in a traditional Prius hybrid. Customers are not going to get a ride in an all-electric or plug-in hybrid vehicle, unless things change. And group rides of three or more passengers can be very inconsistent for customer satisfaction; such as one passenger in a business suit angry about having to wait until being the last drop-off and maybe miss their flight.

                    Startup truck maker Nikola going public:  On Tuesday, hydrogen fuel cell truck maker Nikola Motor Co. announced that it’s merging with a publicly listed acquisition company called VectoIQ. The transaction is expected to close sometime in the second quarter of this year, and when it does, Nikola will be listed on the NASDAQ exchange as NKLA. The Phoenix-based truck maker will receive $525 million in new investment as a result, adding to an existing stockpile of that same amount that it previously raised across three rounds of funding; and through a joint venture the company started in Europe. Nikola and its backers see much potential in the zero emission commercial truck market as several countries are implementing greenhouse gas rules that are coming to trucking the same way light-duty vehicles are seeing it happen in several countries.

                    Nikola has developed three different trucks, with a pickup concept being announced not long ago. Nikola also has a grand plan to deploy a hydrogen fueling station network across America, ideal for commercial truck drivers who wouldn’t be able to find hydrogen fuel pumps otherwise. The company also has versions of its trucks that are battery-powered, too, for end users that don’t need as much long range driving as the hydrogen-powered versions of the trucks can offer.  Editor’s note: I’ll have a second market report coming out soon (see below for more on the first one) entitled Hydrogen is finally here — but there are five hurdles to clear, with more on Nikola and other companies in the field.

                    Demand and interest in EVs in a few states:  If you take a look at this map created by auto site partcatalog.com, the Ford Bronco had the highest search rating in 19 states by car shoppers looking at vehicle refreshes and introductions set for this year. It’s also interesting to see that the upcoming Tesla Model Y took three states (California, Washington, and Hawaii) and the Rivian R1T took the top spot in two states (Vermont and Delaware). The Ford Mach-E, an electric Mustang SUV, won top interest in Idaho and Rhode Island. Partscatalog.com utilized Google trends data covering January 1 through the first week of February, looking at consumer interest in vehicles set to be released this year.

                    New Green Auto Market report: Will we see transformation of ground transport by 2030?
                    Will we be riding to work in electric, autonomous, shared vehicles a decade from now? Will the traditional internal-combustion engine auto manufacturing industry be clearly transformed into a new age? Could we witness steadily declining new vehicles sales; younger consumers moving away from car ownership; electric vehicles becoming more important to automakers and vehicle owners than cars and trucks powered by internal combustion engines; autonomous vehicles clearing regulatory hurdles and starting production; connected car features playing a significant role over the next decade; and mobility services leading the way in traffic- and smog-congested cities. For those of you who may have missed my coverage and analysis of these topics last fall, all of it is explored and updated in a new report, Will we see transformation of ground transport by 2030?  Here’s the link for those who are interested.

                    Audi eTron beats Model 3:  The Tesla Model 3 got trounced in Norway sales during February, with the Audi eTron doing very well in Europe’s hottest battery electric vehicle market. The eTron sold 1,131 units last month and the Model 3 only had 53 units sold. However, Tesla typically back-ends its quarterly cycle where about 50 percent of the volume takes place in the third month. The company should be doing a lot of catch up in March. The Volkswagen eGolf came in second at 740 units sold. That model will be replaced by the VW ID.3 later this year.

                    Smart cities meet 5G:  Smart cities will soon become one of the most important testing grounds for 5G technology and business models, according to a new Navigant Research study. The next generation wireless/cellular phone network is expected to much faster and load-intensive than 4G, but there’s been a battle over the technology going into the networks along with government communication regulations affecting the outcome. Carmakers and their tech partners are quite interested in how all this will go. The Navigant study looks at a few key areas that some of the challenges will have to be resolved for full integration of smart cities and 5G: cybersecurity, data privacy, the impact of automation, and issues of digital exclusion. The study also explores the strategies of global carriers and infrastructure vendors that are leading the development and deployment of 5G networks.

                    Daimler launching electric truck test project:  Daimler Trucks North America is launching the Freightliner Customer Experience (CX) Fleet for its electric truck program. The fleet of all-electric pre-series trucks includes six heavy-duty Freightliner eCascadias and two medium-duty eM2 106 trucks. Fourteen of Daimler’s commercial customers will be participating in the test project. Data collection will take place over the next 22 months/ DTNA will analyze data and feedback from the CX Fleet to continue to improve upon future vehicle design and assist customers navigating a transition to electric fleets. “It’s critical that we collaborate with customers across multiple segments to further our understanding of how commercial battery electric trucks will be part of a long-term solution in CO₂-neutral transportation,” said Richard Howard, senior vice president, On-highway sales and marketing, DTNA.