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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.

For Today: Tesla preparing to build EVs in China, DOE funding extreme fast charging

Tesla readying for China plant: Tesla, Inc., yesterday reaffirmed that it’s been in talks with the Chinese government to set up shop in a free trade zone in the Shanghai region – without indicating whether an agreement has been met. Those talks were reported to have been underway earlier this year. Tesla would still have to pay the 25% import fee that it’s had all along in China, but the company would have costs reduced not having to ship the cars into that market. It would also allow Tesla to stay true to its identity of being an independent operator by avoiding the traditional joint venture with a Chinese automaker that Tesla’s competitors have been doing for years. China is becoming more flexible to grow its local EV market and remain No. 1 globally, to clean up air pollution in its growing cities, and to free up the nation from foreign oil imports. The electric carmaker has been moving in this direction in recent years, with CEO Elon Musk thinking that it’s the most significant market in the world for company growth. The company now has a 5% stake from Chinse internet company Tencent Holdings, which should support Tesla’s strategy in that market.

Ethanol beats Big Oil: President Donald Trump is keeping his campaign promise to ethanol-producing states by backing off proposed biofuel reductions recently announced by the Environmental Protection Agency. In a letter dated Oct. 19, EPA administrator Scott Pruitt said that the agency will keep renewable fuel volume mandates at or above proposed levels, reversing a decision to cut the mandates demanded by oil companies and refineries. It’s a big win for corn-growing states like Iowa, Nebraska, and Illinois, which are economically dependent on demand for corn-based ethanol. Companies such as PBF Energy Inc. and Valero Energy Corp. have been pleading with Trump to revise the costly mandate, and it at first appeared he would be going in that direction.

UK alliance for EV growth: Automakers are working together in the United Kingdom to better educate car shoppers on the benefits of owning and charging electric vehicles. The Electric Vehicle Experience Center in Milton Keynes, north of London, will feature a multi-brand EV showroom. Sales pitches aren’t allowed, as it will be a showcase for explaining the technology to visitors. Funding participants include BMW, Kia, Mitsubishi, Nissan, Renault, and Volkswagen, along with Chargemaster, a UK-based supplier of charging stations. Chargemaster CEO David Martell said the showroom will be carefully watched, and could be repeated elsewhere in the UK if it works.

LG partners with Qualcomm: LG Electronics is entering the self-driving car market through an alliance with Qualcomm to jointly research and develop autonomous, connected car technology. The two companies have opened a joint research center in Seoul, with another one slated by open in that city by the end of 2018. The partners will be focusing on fifth-generation wireless communications technology – called 5G – that will deliver data much faster than the current technology. The move supports the three major trends in the auto industry – electrification, autonomous technology, and on-demand mobility services. It will also tie into Qualcomm’s efforts to bring wireless electric vehicle charging as a mainstay to vehicles of the future.

DOE funding extreme fast charging: The U.S. Energy Department today announced that up to $15 million will be available for research projects on batteries and vehicle electrification technologies to enable growth in fast charging. It includes electrification projects that will support the development and verification of electric drive systems and infrastructure for what it defines as “extreme fast charging” (400-kW). It’s being done through the DOE’s Vehicle Technologies Office (VTO), which funds early-stage, high-risk research to support improved vehicle efficiency, lowers costs, and increases use of secure, domestic energy sources. It’s part of a VTO-funded report that will be released today, where researchers at Idaho National Laboratory, Argonne National Laboratory, and the National Renewable Energy Laboratory identified technical gaps to bring an extreme fast charging network to the U.S. The full report can be found on the VTO reports and publications page.

For Today: BMW bringing out electric version of popular 3-series, Tesla in talks to set up shop in China

BMW going electric in 3-series: BMW may be on the verge of announcing an all-electric 3-series car this fall at the Munich auto show. The compact-sized sedan will be getting a range of at least 248 miles per charge, and will be a direct competitor to the upcoming Tesla Model 3. The company has a few of its models in plug-in hybrid form already. The company has sold 1,373 units of the 3-series plug-in hybrids in the US, this year through May, according to HybridCars’ Dashboard. An all-electric 3-series would join the BMW i3 as another BMW battery electric model. Months ago, BMW CEO Harald Krueger said that the company would be making a push toward more electrification and connected features. Sales of the i3 have not been as strong as Tesla and Chevy models; and sales of the i8 supercar have been weak lately. The 3-series is one of the most popular BMW models, which could help spike its electric car sales.

California rebates: California may soon see $3 billion set aside as incentive funds for electric car purchases. Assembly member Phil Ting announced it in San Francisco yesterday, which is called the California Electric Vehicle Initiative; the bill would offer rebates to buyers at the time of purchase. The bill proposes giving more cash to low-income buyers and would eliminate the need for buyers to file tax rebates with the state. The federal tax credit is likely to see an end in sight as the first wave nears and end, and it’s unlikely to see renewal under the Trump administration. California still has a long way to go to reach Governor Jerry Brown’s goal of having 1.5 million zero emission vehicles on state roads by 2025. Current incentives require consumers to apply for credits after the purchase is complete, which may deter purchases.

Tesla factory in China: Tesla is in talks to set up a vehicle manufacturing plant in Shanghai. It’s still in the talk stage, as Tesla emphasized in a quote that current discussions are happening to “explore the potential” of setting up shop in China. Last year, Tesla earned $1.1 billion in revenue from sales in China, a figure equivalent to 15% of its worldwide revenue. The challenge has been that not having a factory in China means you pay 25% tariff and have to spike up the sticker prices on cars being sold there. There’s also the issue of the Chinese government requiring foreign companies to create joint ventures with a local Chinese automaker. That’s the case for every automaker with factories there now, but it may be outside consideration for Tesla. The U.S. company is well known for doing things its own way, unlike other automakers typically forging alliances with other companies.

Tesla seeking joint venture partner and other interesting news from China

If you take a look at which global automakers have joint ventures with government-backed Chinese companies, you’ll notice only one missing: Tesla. Even Chinese automaker BYD, the global leader in electric vehicle sales, has a JV partnership with Daimler through Shenzhen DENZA New Energy Automotive Co., Ltd.

Tesla’s place in China may be changing soon. Last week, Tesla CEO Elon Musk met with Chinese vice premier Wang Yang. China’s Xinhua news service posted a photo from their meeting on Twitter. It’s the first time that Wang has met with only one automaker executive, according to Li Anding, a former automotive reporter for Xinhua and now a consultant with automakers doing business in China. “Wang usually meets with groups of people,” he said.

Li predicts the meeting and Twitter post are part of talks between the carmaker and government about creating a joint venture partnership for Tesla to manufacture electric cars locally.

A high-level official from China’s auto lobby said that Tesla has been holding meetings with potential partners in Chinese cities. Musk’s meeting with Wang, who previously headed the Guandong province, suggests that the province is a potential region for Tesla to build another plant beyond Fremont, Calif., and its Nevada “Gigafactory” battery plant.

Going this route would eliminate the steep 25 percent tariff Tesla currently pays to China on its imported cars selling in that country. The market has become the most important in the world for plug-in vehicle sales, and it’s going that way for Tesla as Musk has said in the past. Tesla earned $1 billion in revenue there last year, compared to $4.2 billion in the U.S.; and the electric carmaker has been exploring building a new factory in China in recent years.

Tesla could be well positioned in the near future to reach China’s two market segments for plug-in vehicle sales: wealthy consumers looking for luxury vehicles, and workers who’ve moved to the city and need their first car.

Luxury carmakers see China as being vital. The BMW Brilliance alliance is the German luxury performance carmaker’s platform in China. On the affordable end for new car buyers, the Tesla Model 3 is expected to be very competitive against BYD and others in the China market. Taking away the 25 percent tariff by establishing a JV production plant would be part of bringing down the price of all Tesla vehicles sold in China – and offering a much more profitable prospect for the U.S. company.

As covered last week in Green Auto Market, the Chinese government may very well enact a steep mandate that is making automakers quite anxious – and is moving them to increase their plug-in vehicles sales volume in that market. China’s Ministry of Industry and Information Technology proposed last fall that “new energy vehicles” make up at least 8% of new vehicle sales as soon as 2018, and that would go up to 12% by 2020. Included in those zero emissions vehicle numbers (based on California’s ZEV structure) would be all-electric, plug-in hybrid, and fuel cell vehicles covering light, medium, and heavy duty vehicles. That includes all new cars, trucks, and buses sold in the country.

The national government is considering blocking or delaying these proposed measures after industry feedback concluded that the targets are overly ambitious. It may be finalized one way or another by June, according to a government official. Even if that measure fails, the move toward solidifying China as the world’s largest plug-in vehicle market isn’t expected to go away, but demand has started to soften this year.

Sales of plug-in hybrid and battery electric cars fell nearly 5% in January to March compared with the same period a year ago, China’s Association of Automobile Manufacturers said. Analysts say that demand has dropped this year from the dramatic increases over the past three years due to a 20% cut in subsidy payouts by the national government this year, barriers being raised for entry of new car models, and debate over easing the proposed sales mandate for new energy vehicles.

Another sign that foreign companies won’t be backing away from China came last week from Tesla’s battery partner, Panasonic. The Japanese company announced last week that it had an opening ceremony for a new automotive lithium-ion battery factory in Dalian, China.

The company says that the factory is Panasonic’s first automotive battery cell production site in China, and it’s part of a corporate goal to have strong footing in the plug-in vehicle battery market. “Panasonic will further strengthen its global competitiveness in the automotive battery industry by the establishment of production sites in Japan, the U.S., and China,” the company said.