Tesla says goodbye to innovative CTO Straubel, BYD and Toyota partnering to bring EVs to China

Tesla losing Straubel:  Tesla, Inc., has taken a big loss with the departure of one of its founders, chief technology officer JB Straubel. At the beginning of Wednesday’s quarterly report, CEO Elon Musk made the stunning announcement along with news on the delivery of 95,356 electric vehicles during the past quarter. Straubel is credited with playing a pivotal role in the development of Tesla’s power systems and battery technology. The photo you see is of Straubel from 2004 in his backyard gluing lithium ion batteries to a case as part of the company’s first concept vehicle. Retiring at age 43, Straubel was still in his twenties when he became convinced that new and innovative li-ion batteries could become the power source for mass produced EVs. Straubel met Musk in 2003, when they had lunch in Los Angeles near the headquarters of Musk’s other passion in life — his rocket company, Space Exploration Technologies Corp. (SpaceX). Two other entrepreneurs, Martin Eberhard and Marc Tarpenning, were in on the early days of the company, working with Straubel and Musk to launch the company. Eberhard and Tarpenning left Tesla in 2008, as disputes came up over the future of the company — and as Musk exerted more control.

Straubel brought a much needed calm and balance to Musk’s approach to running the company, which includes Musk making extreme demands of the company’s corporate leadership and workforce. He was known for providing insight and clarity to the technical points that could come up with shareholders and Tesla engineers. His role as a problem-solving engineer has come through as the company has had to overcome several obstacles. He’s been known for being much more easygoing and approachable than the CEO — and that’s included participating at Tesla vehicle rides and demos. He’s also become known as a leading innovator in EV batteries, energy storage, and propulsion. It’s now his time to move on. “It has been a really tough decision because I feel like I’m letting a lot of people down,” Straubel said. “But, also, you have to live life. I love inventing and creating and building things and am at peace knowing that about myself and wanting to reorient my life. I’m decompressing for a bit and having a little break, but I will have more to say in a few weeks.”

Four automakers backing California standards, Colorado makes deal on ZEVs:  Ford, BMW, Honda, and Volkswagen, signed a deal Thursday with the California Air Resources Board to comply with the state’s clean air admissions standards. They’re now siding with California’s mandate to produce fleets averaging around 51 miles per gallon by 2026, one year after the Obama-era target. This precedes an expected announcement later this summer from the Trump administration on a rollback of existing fuel economy and emissions standard targets, and taking away California’s right to set more stringent rules under the Clean Air Act (i.e., one national standard) to avoid what a Trump spokesman called a “PR stunt.” California’s Governor Gavin Newsom spoke to reporters on reducing greenhouse gas emissions, with vehicle emissions being “perhaps the most significant thing this state can do, and this nation can do, to advance those goals. The Trump administration is hellbent on rolling them back. They are in complete denialism about climate change.”

In related news, automaker trade groups representing 99 percent of U.S. car and truck sales made an agreement with the state of Colorado to join the California zero emission vehicle program starting in the 2023 model year. The state agreed to allow automakers to earn credits for selling electric vehicles in the two model years prior and use other transitional credits available in other states. The Colorado agreement must be approved by the state’s Air Quality Control Commission at a meeting set for later this month. The automaker trade groups issued a statement praising the state’s flexibility in addressing their concerns “by providing the support Coloradans need to buy electric vehicles while allowing auto manufacturers to transition into Colorado’s ZEV program.”

Comeback for diesel engines:  The 2020 Chevrolet Silverado 1500 won the ranking as the most fuel-efficient light-duty truck on the market. General Motors’ pickup achieves an EPA-estimated 33 mpg on the highway and 23 mpg in the city when equipped with the new 3-liter inline six-cylinder Duramax diesel engine and rear-wheel drive. Its the first diesel engine offered in a Chevy light-duty truck since 1997. Light-to-heavy-duty pickups trucks have been a saving point for diesel engines since the September 2015 collapse following Volkswagen’s confession that the company had been dishonest about emissions reporting in its “clean diesel” passenger cars. Now GM will be following market leader Ford on the diesel pickup side, with Ford leading from sales of 94,626 diesel light and heavy-duty pickup trucks during the first half of this year.

Will 5G networks make it?:  One significant area to follow is how the new 5G wireless networks are facing an uphill battle for becoming the industry norm. The stakes are huge, with 5G ready to help save thousands of lives in self-driving cars, along with reducing traffic congestion and emissions. Europe is trying out auctioning off its bandwidth spectrum to monetize the new technology, a very expensive prospect for wireless carriers and partners. Check out this commentary by Roger C. Lanctot, a Strategy Analytics executive, on the challenges BMW and its German partner Deutsche Telekom have in building a consistent and reliable network of 5G wireless connectivity in the market. It’s a challenge faced in the U.S. and other key global markets adopting 5G. “We don’t need 10 Mbit/s, but rather basic bandwidth and guaranteed latency. We need coverage,” said BMW senior VP of electronics Christoph Grote at the recent Automobil-Elektronik Kongress in Ludwigsburg, Germany.

China partnership:  BYD and Toyota announced on July 19 in Toyota City, Japan, that they have signed an agreement for the joint development of battery electric vehicles, which will be electric sedans and sport-utility vehicles. The two parties will jointly develop sedans and low-floor SUVs as well as the onboard batteries for these vehicles and others. They’ll be launched in the Chinese market under the Toyota brand at some point in the first half of the 2020s. This joint venture partnership will help resolve Toyota’s ambitions to use electric vehicles to break into China, the market where the company remains well behind other global automakers. It also ties into climate change strategies as both BYD and Toyota seek to reduce carbon emissions by promoting the widespread use of BEVs.

This Week’s Top 10: Automakers commit to next-gen batteries, NGV sales down from low oil prices but commercial sales were strong

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. LG Chem battery researchIt’s all about batteries: Cost-competitive electric vehicles (EVs) with at least 200 miles of range on a single charge are on the horizon. Automakers are working with major battery suppliers such as LG Chem to roll out these models within two-to-three years. General Motors (with its recently announced Chevrolet Bolt), Ford, Nissan, and Volkswagen think they can catch up to Tesla Motors’ breakthrough with its Model S that can go 265 miles on a charge……… A new study by Stockholm Environment Institute predicts that the cost of lithium-ion battery cells will continue falling; that cost dropped about 14% per year from 2007 to 2014 and should continue dropping an average of 8% per years for the foreseeable future, which would help make EVs more affordable for car buyers.……… Kurt Kelty, Tesla’s director of battery technology, recently visited Japan to court more battery technology suppliers for its “gigafactory” to mass produce its more affordable $35,000 electric Model 3. Other Japanese suppliers – Panasonic Corp. and Denso Corp. – have already joined up on the gigafactory alliance. Kelty has been impressed with the quality level of these suppliers of components and displays, but expressed concern over their slow decision-making and risk aversion……… Sakti3, maker of solid state electrolyte batteries, just gained a $15 million investment from Dyson, a company famous for its vacuums. Details haven’t come out yet on what that partnership will be working on, but it does help Sakti3 make the case that its solid-state technology has already generated twice the energy density of the best lithium-ion batteries on the market today.
  2. NGVAmerica reported on natural gas vehicle sales in 2014. Natural gas vehicle (NGV) production and sales fell by 6.5% from the previous year in 2014 as the dramatic drop in the prices of oil and transportation fuel softened demand for these alternative fuel vehicles. That was seen mainly by light-duty NGVs, which fell 34% in sales from 2013. During 2014, NGV production and sales reached just over 18,000 vehicles in the US. Commercial truck customers are still supportive of the technology, with heavy-duty NGVs increasing 30% in sales over 2013 and the medium-duty market seeing a rise of 24% over the previous year. NGVAmerica expects that trend to continue with production and sales holding steady or improving during 2015.
  3. Spy shots were taken of the Tesla Model X near the Palo Alto, Calif., headquarters. Tesla Motors has begun road testing its electric crossover as it goes through its final testing phase before being launched this summer. The test model was lightly disguised but looked like it has changed very little since its 2012 unveiling.
  4. Aston Martin has filed suit in federal court in Los Angeles against Henrik Fisker’s “Thunderbolt” prototype, because of “bad-faith intent to free-ride off the tremendous goodwill associated with the famous Aston Martin mark, wings logo, side vent mark, and Vanquish mark.” Aston Marton says it was too close to the iconic sports car featured in James Bond movies. Fisker, the co-founder of Fisker Automotive and a former Aston Martin design director, unveiled at the sports car at an auto show in Florida this month. The V12 coupe is available only by special order through Los Angeles-based dealer Galpin Aston Martin.
  5. Global electric vehicle (EV) sales grew by 76% during 2014 – 320,000 units sold, bringing the global market up to 740,000 vehicles. Battery makers had revenue of $2.17 billion supplying the battery packs for these vehicles, according to Centre for Solar Energy and Hydrogen Research, a German research company. The US made up nearly 70% of the total at 290,000 units sold. Chinas had 54,000 new EVs sold. China and Japan had 120% and 45% growth rates, respectively. Supportive government policies have helped these three countries see solid growth rates.
  6. TransPower, a manufacturer of electric drive systems for battery electric commercial trucks, has won $9 million from the California Energy Commission (CEC) for new four new battery-electric Class 8 trucks for demonstration projects in the state of California. The four were also partially funded by the CEC, with contributions from the US Department of Energy (DOE), South Coast Air Quality Management District (AQMD), and the Ports of Long Beach and Los Angeles.
  7. China is a tough market to break into. Tesla Motors CEO Elon Musk has visited China to mend broken relations. Sales of the Model S are tumbling down as early adopters have complained about how many months it has taken to place their order and later receive their car. Range anxiety is a big problem, too, as Chinese drivers have very little experience with commuting in their first-ever electric vehicle. Musk has visited Chinese President Xi Jinping and other government officials and made the point that Tesla team is getting the delivery process streamlined and correcting mistakes. He also admitted that they’ve been seeing a backlog of unsold Teslas around the car after several people have ordered the cars but never bought them. (Editor’s note: West Virginia is blocking Tesla from selling cars in state, and the Georgia legislature sent a bill to governor asking for approval on allowing Tesla to increase its stores in the state from three to five.)
  8. Hybrid version of the Malibu. Chevrolet will be rolling out a completely redesigned version of its midsize 2016 Malibu later this year; with that will be a new hybrid option that could be one of that vehicle segment’s most fuel-efficient models. It’s estimated to have a 45 miles per gallon (or slightly better) rating – putting it ahead of the Ford Fusion and Toyota Camry hybrid models and close to the segment-leading Honda Accord Hybrid, which has a combined fuel economy rating of 47 mpg. Speaking of new hybrids, Toyota will be adding a hybrid version of the Toyota RAV4 to its list of debuts slated for the upcoming New York International Auto Show. While Toyota and other manufacturers’ hybrid sales have softened lately, Toyota is still committed to meeting its commitment to introduce a hybrid version of every one of its volume vehicles by the end of the decade.
  9. Hyperloop is becoming real. The high-speed rail Hyperloop concept, introduced by Tesla Motors and SpaceX chief executive Elon Musk, is moving beyond the drawing board phase. Hyperloop Technologies Inc. has set up a headquarters space in downtown Los Angeles in a 6,500-square foot space in the city’s Arts District. The 20-person staff is starting to see new hires show up at the downtown office. An owner of the property said Hyperloop will be leasing nearly 38,000 square feet in the current building and an adjacent property over the next 12 months.
  10. E-bikes are expected to see real sales growth with electric scooters selling three times as many units as electric motorcycles. A new Navigant Research study reports that global annual sales of e-motorcycles should increase form 1.2 million in the 2015 to 1.5 million in 2024; and e-scooters should increase from 4.1 million units sold globally this year to over 4.4 million in 2024. Several large OEMs are expected to enter the space and battery costs should be decreasing, making the e-bikes more affordable.
  11. Extra: Solar power vs. utilities article in Green Auto Market Extended Edition. Several major electric utilities are fighting legislative/regulatory battles to avoid state mandates to produce a significant share of their power though renewable energy such as solar. One argument utilities make is that homeowners and commercial property owners with solar are not paying their share for the cost of grid maintenance. When I chose to bring in solar to power my house last year, I didn’t expect how long it would take to have it installed and activated, and how my utility would react. Here’s more on how to subscribe to that weekly newsletter and read all about it, plus gasoline, diesel, and oil price trends.