This Week’s Top 10: Feds release phase 2 of commercial truck emissions rules, National Research Council issues study on 54.5 mpg rules

by Jon LeSage, editor and publisher, Green Auto Market 

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

  1. Trucking efficiencyPhase 2 of commercial truck rules: A long-awaited ruling on medium- and heavy-duty trucks on greenhouse-gas emissions and fuel economy has been released by federal agencies. The US Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) are proposing emissions and fuel economy improve by up to 24% through 2027, and federal efficiency standards for new trailers have been included for the first time. The proposed second-phase rules on vehicle and engine standards would run from 2021 through 2027 and apply to semi-trucks, large pickup trucks and vans, and all types of buses and work trucks. Emissions and fuel consumption from heavy-duty pickups and vans will need to be reduced by 16% between the 2021 and 2027 model years, according to the federal standards. As for feedback on the ruling, American Truck Dealers voiced concern that’s been heard for years from truck makers and suppliers – about the higher costs of compliance and economic impact if prices for commercial trucks rise. Fiat Chrysler’s FCA said it “supports and commends” the coordinated approach taken by the federal agencies. NGVAmerica and its member companies commend the rule, as does CALSTART. The Consumer Federation of America released results of a survey conducted in mid-May with more than 1,000 US consumers; 71% favor increasing fuel efficiency mandates for heavy-duty truck, while 24% oppose it.
  2. As for federal rules on light-duty passenger vehicles: The National Research Council (NRC), an 18-member committee nonprofit group that advises federal policymakers, found that the federal 54.5 mpg by 2025 model year standards are based on sound assumptions on its technological progress and costs – even if electrified transportation doesn’t hit high sales volumes. The NRC study also expressed concern over how much consumers will be willing to pay for the fuel-efficient vehicles. The report comes out during a time when automakers, environmental groups, and regulators are determining the final federal fuel economy standards from 2022 through 2025. This midterm review process was demanded by automakers before they make the investment in retooling to reach the high mpg and emissions targets.
  3. Fisker Karma coming back: Fisker Automotive and Technology Group will be working out of a manufacturing plant to relaunch its Karma plug-in hybrid electric vehicle in Moreno Valley, located in California’s Riverside county. Fisker will create 150 new jobs, with about 100 of them being engineers. The company is also looking into keeping a portion of its former Anaheim headquarters. Chinese owner Wanxiang Group had promised to utilize Fisker’s Delaware plant, but the future of that plant has yet to be determined.
  4. Watch these videos: NAFA’s past president Claude Masters and CALSTART’s Bill Van Amberg talked to Fleet Management Weekly in these video interviews about NAFA’s Sustainable Fleet Accreditation Program and hitting clean transportation targets. Masters talks about the programs being set up to provide data fleet managers need. Van Amberg says that the true role of CALSTART is to build a clean transportation technologies industry – creating jobs that, in turn, create cleaner air.
  5. Hyperloop competition: It’s been nearly two years since SpaceX/Tesla CEO Elon Musk sent out the Hyperloop concept – and now it’s gaining more attention and enthusiasm. The SpaceX Hyperloop Pod Competition asks entrants to design passenger vehicles for the super high-speed Hyperloop train system. It’s intended to appeal to both university students and independent engineering teams, SpaceX says. Hyperloop Technologies, an unrelated startup with proprietary technology based in downtown Los Angeles, pledged on Twitter to support student teams submitting pod designs for the competition. Hyperloop is gaining enough traction to inspire a feature in Popular Science with this intro: “Elon Musk proposed a ridiculously audacious form of transportation. Now, startups are racing to bring the Hyperloop to life.”
  6. Ford land-fill free in Mexico: Ford Motor Co.’s Hermosillo Stamping and Assembly Plant has earned zero waste-to-landfill status, making the automaker landfill-free at all of its Mexico manufacturing facilities. That means Ford’s Mexico plants are diverting 1.5 million pounds of landfill waste this year and going forward. This is part of a global campaign by Ford to reduce waste-to-landfill by 40% per vehicle produced from 2011 to 2016; Ford previously hit that target by reducing global per vehicle waste-to-landfill by 40% from 2007 to 2011.
  7. Toyota might gain more ZEV credits in California: Toyota is not getting out of the plug-in business entirely to focus instead on hydrogen fuel cell cars. Developed with the new 2016 Prius hybrid, the new Toyota Prius Plug-in Hybrid will likely have longer electric range than its 11 miles on battery only in the current version. That will probably help tip the scales a little bit more in the automaker’s favor in California. The state is loosening up on its zero emission vehicle (ZEV) credits, and Toyota will be able to gain more credits if it sells more of these models than it’s been achieving lately. The 2016 model could generate that enthusiasm and sales increase, and could be a way for other companies to meet their targets. Mazda and Subaru, for example, will fall under ZEV requirements for the first time starting in 2018 and might be interested in buying Toyota’s technology for their vehicles to meet the targets – similar to what Toyota had previously done with Tesla Motors in its RAV4 EV.
  8. Nevada wants to see Electric Highway: Nevada Gov. Brian Sandoval announced that five new electric vehicle chargers will be placed on highway US 95 in between Reno and Las Vegas; that will go with the 150 charging stations already in place in the state. State officials are working with Tesla Motors to set up additional fast chargers, Tesla Superchargers, along the Nevada Electric Highway. That’ likely to happen given that Nevada will soon be home to Tesla’s Gigafactory lithium-ion battery plant near Reno.
  9. Biofuels get mixed message in Washington: Fans of biofuels got some “good news/bad news” out of Washington, DC. Last week, Bill Cassidy (R-La.) introduced a bill that would completely recall the federal Renewable Fuel Standard, with its ethanol and biodiesel blends and advanced biofuels provisions. Sens. Dianne Feinstein (D-Calif.) and Pat Toomey (R-Pa.) have made several attempts to remove the ethanol blend mandate, but leave in other biofuels, such as biodiesel. For those in the biofuels business needing funding, the federal government now is offering $100 million in grants under the Biofuels Infrastructure Partnership (BIP). That funding has been made available to support the infrastructure needed to make more renewable fuel options available to consumers. It will be administered by the Farm Service Agency; but those interested need to move fast – applications must be submitted by July 15, 2015.
  10. Continental wants to win electrified turbocharger market: Tier 1 automotive supplier giant Continental AG is throwing down the gauntlet to compete with Valeo SA, BorgWarner, and Honeywell. Similar to Valeo’s 48-volt electric motor that will soon power a new Audi vehicle, Continental is working on an electric motor to pressurize a turbocharger that will eliminate what’s called “turbo lag.” Besides bringing more power, the electrified turbocharger improves fuel economy. BMW already uses Continental turbochargers on its BMW i8 and Mini Cooper.

State of the Union: Where do federal fuel economy and greenhouse gas emissions targets actually stand?

Federal fuel economy standardsFederal fuel economy and greenhouse gas emissions standards for new vehicles sold have had a huge impact on light duty passenger and medium-to-heavy duty vehicles being built and sold in the US. Consumer Federation of America (CFA) is hopeful that the 54.5 mpg by 2025 target for passenger vehicles can be met, though some automakers are lagging way behind their peers. A new study by CFA calls out a few of the automakers for dragging down the numbers. The dramatic drop in petroleum fuel prices over the past year is also having its impact on new vehicle sales numbers with truck and SUV sales climbing. Where does all of it stand in terms of hitting these ambitious federal corporate average fuel economy (CAFE) standards?

Analysis by the CFA states that from 2014 to 2015, the percent of vehicles with a US Environmental Protection Agency (EPA) fuel economy rating of at least 23 mpg increased from 50.5% to 52%; the percent of vehicles with fuel economy at or below 16 mpg declined from 8.5% to 6.1%. CFA says that some automakers are performing very well on improving fuel economy (Volvo, Honda, and Mercedes-Benz), while other automakers are doing poorly (Kia, Subaru, and General Motors) based on making progress in increasing the number of models they’re making and selling that comply with the year’s CAFE standard.

In reviewing 2015 models, CFA found that the biggest jump was in the 27-30 mpg category, which improved from 14.8% to 16.5% in 2015. The Ford F-150, which had a 2014 fuel economy range of 13-19 mpg, jumped to a range of 17-22 mpg in 2015 through switching to a lighter aluminum body. “There is no doubt that since the announcement of higher CAFE standards, many car companies have improved their selection of vehicles with greater fuel efficiency, proving that 54.5 mpg by 2025 is achievable. The fact that the number of cars getting over 23 mpg has risen by almost 40 percent in the last ten years is strong evidence that reaching the goal of 54.5 mpg by 2025 is indeed attainable,” said Jack Gillis, author of The Car Book and automotive expert for CFA.

Automakers are focusing more on increasing sales of light duty truck and SUVS lately. CFA found that the percentage of CAFE-compliant light trucks and SUVS declined significantly in 2015, bringing the percentage of CAFE-compliant from 66% to 44%. The University of Michigan’s Transportation Research Institute that the actual fuel economy of new vehicles sold in the US in April 2015 was 25.2 mpg, versus 25.4 mpg in March 2015 and 25.3 mpg in April 2014. The high point was reached in August 2015 at 25.8 mpg. Gasoline and diesel prices had begun their spike by that point and took their toll, with truck and SUV sales increasing along with their used vehicle values.

Margo Oge, former director of EPA’s Office of Transportation and Air Quality and author of “Driving the Future: Combating Change with Cleaner, Smarter Cars,” along with Mary Nichols, chairwoman of the California Air Resources Board, earlier this month wrote a guest column for The Detroit News calling on the federal government and automakers to avoid weakening the federal standards.

“The recent dip in gas prices has led some to suggest that automakers should shift back to supplying more of the large and less fuel efficient cars and trucks that were popular with consumers a decade ago…… This is exactly the wrong time to take our foot off the accelerator of advancing technology. It is time to embrace the transformation of the automobile and harness the environmental and economic benefits of the industry’s shift towards safer, greener, and ‘connected’ vehicles,” they wrote.

Sergio Marchionne, the CEO at Fiat Chrysler, raised the issue in January when he said that while automakers could reach the 54.5 mpg target, he doesn’t think that year is a realistic timetable to accomplish it. “The question is whether 2025 is a realistic date for which to achieve it,” he said.

Other industry executives have joined in, citing cheap gas prices, mediocre support of alternatively fueled vehicles and the technology limitations as obstacles that make a fleet average of 54.5 mpg unattainable. On the commercial vehicle side, truck makers are anxiously awaiting phase two of federal standards for heavy-duty vehicle fuel economy and emissions. The proposal is expected to be published in June, three months later than its initial target.

Plug-in electric vehicles have played a “behind the scenes” role in automakers reaching fuel economy targets, as they’ve achieved credits in the federal program for selling more zero-emissions vehicles. President Barack Obama has relaxed his ambitious target of seeing one million plug-in electric vehicles on US roads by 2015. In March, the president scaled back that goal originally laid out in 2009; federal fleet purchase goals were scaled back in March, too, according to a Bloomberg article. Obama cut government purchase goals about two months ago, but said the government will continue to work to improve fuel economy into the future. “Presently, commercially available electric and hybrid vehicles do not align with the most purchased vehicle segments for federal fleets” which are trucks, GSA said in a statement. “They also come with a higher acquisition cost compared to conventional vehicles.”

Light-weighting gaining enthusiasm as channel for reaching fuel economy standards

You may have noticed Ford Motor Co. has been getting a lot of ink lately on its roll 2015 Ford F-150out of the 2015 F-150 pickup made with aluminum body panels, reducing its weight 700 pounds and getting better mileage (up to 30 mpg on the highway). Last week, I spoke with an executive from the engineering consultancy that worked closely with Ford to test and design this next generation pickup. As automakers approach the 54.5 mpg by 2025 fuel economy standard in the US, zero emission vehicles are critical; however, to get past the compliance tipping point, light-weighting is expected to play an even larger role.

David Mason, senior vice president, global automotive at Altair (a global company with its US headquarters in Troy, Mich.), said that the company has been working with automakers for more than 10 years on light-weighting design. Years ago, Altair focused mainly on its computer-based algorithm for simulations such as crash tests. Today, clients are accessing its HyperWorks optimization technology for predictery performance in all categories. Safety is certainly still a priority, but now aerodynamics, noise, and stability, are way up on the list. Fuel economy, environmental concerns, CO2, and CAFE standards are behind most of it. “OEMs are struggling to achieve fuel economy targets,” Mason said.

I asked Mason about the impression I was getting that hardcore pickup truck fans may have concerns about the new F-150 using that much aluminum to transport a lot of gear and passengers. Is it really as tough as Ford brags about in its ads? Mason said that it comes down to finding the “right form for the material located in the right place.” The engineering team had to analyze Ford’s targets for durability, noise, vibration, and crash safety. Adjustments had to be made for the pickup and its payload requirements that are different from a passenger car; the pickup needed more aluminum and stiffness to be able to deliver the payload.  Aluminum is gaining a lot of attention lately as the Ford F-150, the 2013 Range Rover with aluminum structure, and the 2014 Chevrolet Corvette with an aluminum frame, have been grabbing attention.

Altair has created two initiatives to educate interested people on light-weighting and to support light-weight materials’ role in new vehicle design and manufacturing.  The Altair Enlighten Award was kicked off at the Center for Automotive Research (CAR) Management Briefing Seminars last year in Traverse City, Mich. BASF Corp. took the first award for its thermoplastic composite front seat pan used by General Motors. Those interested can fill out the nominee form for the next award that will be presented August 4, 2014, at the next CAR conference. The award was launched to encourage public awareness and to bring recognition and creative competition for light-weighting designers.

Its blog, Enlighten, has become a meeting ground for proponents of product weight reduction to debate which materials will prevail – with aluminum, plastic, titanium, and composites getting a lot of discussion and attention lately, Mason said. “There’s been a lot of focus lately in the media about alternative materials,” he said. “There’s a lot of excitement – will it be aluminum? Titanium? Composites?”

Automakers appreciate that they can reduce vehicle weight and manufacturing costs using optimization technology and substituting with lighter materials. “They don’t have to change assembly tooling or process,” he said. “They’re removing as much material as possible from the existing design approach.”