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This Week’s Top 10: More autonomous features in Tesla’s Autopilot, More on VW scandal

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…….

Lane changing and self-parking features in Autopilot: Tesla Motors is offering car shoppers a leap forward in autonomous vehicle technology – an option with automated lane changing and self-parking features. As part of Tesla’s new Version 7.0 software package in the Model S, Autopilot will be transmitted to cars in the U.S. over the next week, followed by Europe and Asia. Tesla’s new Model X sport utility vehicle will also offer Version 7.0 and Autopilot. Customers must pay a one-time fee of $2,500 to activate the self-driving software when they buy a car, or $3,000 to activate the feature after delivery. The software update uses cameras, radar, ultrasonic sensors, and data to steer down the highway, change lanes, and adjust speed in response to traffic. The driver can follow a lane on the highway and change lanes using the turn signal. The 7.0 software and Autopilot can deliver parallel parking that detects an open parking space and takes control if the driver asks for the car to park itself.
More on VW scandal: Volkswagen continues to be dragged into a quagmire over its TDI diesel models. Three people “familiar with the matter” told Reuters that the automaker made several versions its “defeat device” software to falsify diesel emission tests. Over seven years, VW altered its software for four engine types…… VW will be pulling out of the diesel market, and its competitor General Motors said it will be ramping up its diesel efforts. GM’s Mark Reuss said the upcoming Chevrolet Cruze Diesel and the diesel program for Cadillac are still in the works……. Paramount Pictures and Leonardo DiCaprio’s production company have acquired movie rights to a book proposal by New York Times journalist Jack Ewing about the clean diesel scandal. They’re still in the early stage of production, so the movie won’t be coming out anytime soon.…….. VW plans on bringing more plug-in hybrids and battery electric vehicles to market to shift focus away from its diesel technology. The company is confident it can create components for EVs with ranges as far as 310 miles; that strategy may include redesigning the flagship Phaeton sedan as a battery electric model.
Award given at LA Auto Show: The annual Green Car of the Year Award will be named next month at the LA Auto Show. Here are the five 2016 model year finalists: Audi A3 Sportback e-tron: The plug-in hybrid hatchback starts at $37,900 and goes 19 miles on electricity alone through its 8.8 kWh lithium-ion battery. Chevrolet Volt: The revamped Volt has a 20% larger battery with 53 miles per charge and 420 total miles of cruising available. Improved handling and acceleration make it fun to drive. Honda Civic: Honda thinks EPA estimates, which have yet to be released, will be over 40 mpg combined without electrification. Coupe and five-door hatchback variants are coming, and it’s the first Civic to feature a turbocharged engine. Hyundai Sonata: It’s available with gasoline, hybrid-electric, and plug-in powertrains. The plug-in should achieve 24 miles on just battery power, and the hybrid gets about 43 mpg on the highway. Toyota Prius: A smaller battery gives offers more space to store cargo, and Toyota predicts the new Prius will achieve 10% greater mileage than before.
Prius upgrades: Toyota is providing details on the all-new 2016 Prius, launched at a Las Vegas event about five weeks ago. Buyers can choose either its conventional nickel-metal hydride batteries or a more advanced lithium-ion battery pack. Toyota says the drivetrain is more efficient – improved aerodynamics, weight-saving measures, and a re-engineered powertrain, should bring a 10% fuel economy improvement. The new Prius is being launched during a time when the long-anticipated Mirai hydrogen fuel cell car comes the U.S. In Tokyo last week, Senior Managing Officer Kiyotaka Ise said during an environmental forum that the global automaker plan to stop manufacturing traditional gasoline engine vehicles by 2050. Toyota wants a 90% cut in carbon dioxide emissions from new vehicles by 2050, compared with 2010 levels. That will come from hydrogen fuel cell vehicles, hybrids, and electric cars.
HorseFly electric drone: The Workhorse battery electric “HorseFly” package delivery drone has won U.S. Federal Aviation Administration authorization for test flights. It’s been designed to work in tandem with Workhorse battery electric delivery trucks, reducing driver workload. Testing has been granted at the Ohio/Indiana UAS Center and Test Complex.
Drive the Dream EV event: Last week, the California Plug-In Electric Vehicle Collaborative, Governor Jerry Brown and a group of more than 40 California leaders met at Drive the Dream 2015. The group announced new initiatives aimed at accelerating the continued adoption of plug-in electric vehicles and workplace charging in the state. Announcements to deploy more electric vehicles and charging stations were made by the U.S. Department of the Navy, Honda, San Diego Gas and Electric, NBCUniversal, PG&E, Coca-Cola Co., Los Angeles Department of Water and Power, Ford, Southern California Edison, NRG, CBRE, and Vision Fleet.
Honda charging stations: American Honda Motor Co. is adding 120 new electric vehicle (EV) chargers at its Torrance, Calif., headquarters. The new chargers will be installed in two phases, the first of which has already begun. Ultimately, Honda estimates that the chargers will enable hundreds of associates to use an EV for commuting to work.
Volvo electric targets: Volvo is developing its first all-electric car and broadening its range of plug-in hybrid vehicles, and expects electrified models will account for 10% of its global sales by 2020. The automaker will bring plug-in hybrid technology to its 40-series vehicles; and will offer the full-electric vehicle by 2019.
Westport and Volvo Group Deal: Westport Innovations has entered into new agreements with Volvo Group for the development, commercial launch and supply of Westport High Pressure Direct Injection (HPDI) 2.0 technology in its heavy-duty trucks over the next several years. Westport says that HPDI 2.0 continues to be the only natural gas system that can offer “same as diesel” horsepower, torque, transient response, engine braking power and fuel economy. It also provides up to 20% reduction in greenhouse gas emissions compared to equivalent diesel engines.
Investing in EV technology: Pacific Gas and Electric Company (PG&E) plans to invest one-third of its annual fleet purchases in electric vehicles and plug-in hybrid vehicles over the next five years, totaling more than $100 million. PG&E operates approximately 1,400 plug-in electric and electric hybrid vehicles, one of the largest fleets of plug-ins in the nation. The $100 million investment will add more than 750 plug-in electric units to PG&E’s fleet of over 14,000 vehicles.

This Week’s Top 10: Leaf still No. 1 in plug-in sales, Tesla Model S drivers wreak havoc in Los Angeles

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. The Nissan Leaf continues to lead plug-in sales, delivering 2,347 units during June. While that’s 770 units lower than May’s best-ever Leaf sale volume, it set a record for June and was up 5.5% over a year ago. That makes for 16 straight months of record sales for the Leaf and deliveries up almost one third over the first half of 2013. The Chevrolet Volt saw an increase in sales in June versus May – 1,777 units sold versus 1,684. That was down from its best-ever June sales. Volt sales are stabilizing, but they are down about a third from the first half of 2013. Another interesting trend to watch is that the Ford Fusion Energi plug-in hybrid beat the Volt for the first time in monthly sales — 1,939 deliveries beat the Volt’s 1,777 units sold. Tesla doesn’t report its monthly sales, but it’s estimated to have sold about 1,200 Model S units in June. That’s much more than luxury electric car competitor BMW and its i3, which closed the month with 358 units sold.

2. Two drivers wreaked havoc in Los Angeles during separate incidents on July 4^th, with both of them driving a Tesla Model S. A Tesla driver hit the back end of a Toyota Corolla at 10:35 pm on Highway 14 in Palmdale; three passengers in the Corolla were killed and two seriously injured while the Tesla driver suffered minor injuries and was released from the scene late Friday. One person was injured and is in critical condition after another crash on Friday morning in West Hollywood; the injured person may have been an unidentified driver who stole the Model S. The car had been stolen early Friday morning, most likely from the Tesla service center on the 5800 block of Centinela Ave. The driver led police officers on a wild chase, getting near 100 mph and eventually crashing in West Hollywood. The Model S collided with a light pole that split the car in half. The front half of the car caught fire after the battery pack was ignited. Prior to the crash, police officers chasing the Tesla crashed their police car near La Brea Ave. The two police officers were treated for minor injuries. Several other drivers were hurt in the Tesla crash, although it is still unclear how many.

3. Fleet managers are gaining more experience with electric vehicles and are making the business use case for acquiring them, says Morgan Davis of Electric Power Research Institute in this segment of our recent video interview. Check out the Plug-In 2014 website for more information on for the conference taking place later this month – July 28-30 in San Jose, Calif.

4. A webinar is being offered to learn about an important area for alternative fuels – emergency planning for communities hit with disasters. The National Association of State Energy Officials (NASEO) is presenting a webinar on July 17th at 4:00 pm eastern time to explore the benefits and opportunities of integrating alternative fuel vehicles in energy assurance planning. Panelists Linda Bluestein, National Clean Cities Director for the US Dept. of Energy, and Jeff Pillon, Energy Security Director for NASEO, will help participants examine strategies to promote information sharing and stakeholder coordination among state energy offices and Clean Cities coordinators. To register for this webinar, visit this site.

5. Toyota Motor Corp. has requested a two-year exemption from a rule governing electric cars to clear the way for the company to sell its upcoming hydrogen fuel-cell vehicle in a petition to the National Highway Traffic Safety Administration. Toyota says that the federal rule, FMVSS No. 305, would render its vehicle inoperable. The rule requires automakers to isolate high-voltage parts in electric cars in the event of a crash. The company’s new fuel-cell car doesn’t fully meet this requirement because a mechanism for protecting against electrical shocks in lower-speed crashes would render its vehicle inoperable, Toyota said. Toyota has taken another approach to insulating the car’s high-voltage cables and surrounding components, and would like more time to work this out with NHTSA.

6. The Tesla Model S has taken yet another award – this time winning the annual Total Quality Index study issued by market-research firm Strategic Vision. The study is based on responses from 38,361 vehicle owners and “encompasses positive and negative product experiences including reliability, actual problems, driving excitement and other measures.” Earlier this year, Strategic Vision ranked the Model S the single “most-loved car” in the US. The Nissan Leaf also ranked high on that poll.

7. Tesla Motors heard some good news from the Pennsylvania legislature – the automaker has been given more approval in the state to directly sell its cars to consumers even though dealers have been objecting. Tesla will be able toincrease the number of stores in Pennsylvania and add more service centers. The bill that was already approved by the state senate would allow for as many as five retails stores in the state; it still needs to be signed into law by Gov. Tom Corbett.

8. Electric buses and trucks have secured more private funding. Proterra, a builder of electric municipal buses, has raised $30 million in fourth-round venture capital funding that was co-led by KPCB and GM Ventures. That makes for a total of $180 million raised with another $10 million expected to close in coming weeks. Motiv Power Systems raised $7.3 million for an electric school bus. Motiv provides a power train control system that can power a truck or bus chassis with commercially available battery packs and motors.

9. Hybrid electric vehicles used in commercial vehicles just lost a supplier. Eaton is exiting the market in North America for utility trucks and parallel drives for delivery trucks; that comes from weakened market demand, especially in the US, the company said. Contributing factors include expiring government incentives, a general stabilization in diesel prices, and the rise of natural gas as a heavy duty vehicle fuel.

10. Natural gas vehicles might be selling like hotcakes in China. About 3.8 million cars, trucks and buses in China will be fueled by compressed or liquefied natural gas by 2020, according to Bloomberg New Energy Finance. China is the world’s largest energy consumer and emitter of greenhouse gases; China would nearly double the number of its natural gas vehicles by 2020 as President Xi Jinping seeks to reduce smog.

What leasing means for Tesla Model S and other electric vehicles

Tesla Motors has been getting a lot of attention in the auto industry lately as it attempts to bypass state franchise laws and sell directly to consumers. With Tesla going outside the traditional dealer system, the company has come up with its own creative leasing program – what it calls a guaranteed “buy back” program where Tesla offers to buy back the electric sports car between 36 and 39 months. Leasing, whether through buyback or traditional leasing, has played a dominant role in sales of the Tesla Model S, Nissan Leaf, Chevrolet Volt, and other EVs.

Scot Hall, Executive Vice President at Swapalease.com, has been closely watching what’s going on with Tesla’s leases – and other EV leases through OEM captive finance arms. Swapalease.com helps its customers exit their vehicle leases early by marketing their car lease to lease buyers seeking a short term lease assumption or lease transfer; it’s the world’s largest automotive lease marketplace and monitors every type of lease out in the marketplace.

Hall thinks that leasing makes quite a lot of sense for consumers interested in trying out the new technology in EVs. “It’s a little but unknown,” Hall said. “Leasing resolves it.”

Tesla’s guaranteed residual value on the Model S has been based on the Mercedes Benz S Class as the benchmark – Tesla promises the Model S won’t depreciate any lower than the S Class; and Tesla will buy back the car at the agreed price. It’s not a lease as the car owner has to finance and pay taxes on the full vehicle. The $7,500 federal tax credit is only available when you lease an electric vehicle through a local dealership. Tesla has a direct sales model and does not sell through dealers, essentially preventing them from offering a standard lease program.

Beyond the Tesla Model S, EV leases through other automakers have been standard and very similar to any other lease transaction, Hall said; they’re usually carried by OEM captive finance arms. The Model S has been outside the Swapalease program, though there were a few Tesla Roadsters in Swapalease. Hall said that for Nissan Leaf lessees participating in Swapalease, they have found the payment offering attractive, and overall, it’s been a satisfying experience for them.

Some automotive analysts wonder what residual values will look like for EVs coming off-lease. While there’s been concern over their market values expressed by Kelley Blue Book and NADA Used Car Guide, Hall doesn’t it expect it to be a significant problem. He hasn’t seen dramatic changes yet in plug-in EVs or hybrids coming off-lease, and consumers are shielded from residuals when they go off-lease. Used car prices are expected to go down this year, and EVs could potentially see an even greater challenge than other vehicle categories, he said. It is a bit early in the used car market off-lease cycle to know for sure.

Some of the EV leases may have been structured with overly optimistic price valuations to make the EVs more price competitive; but captive finance arms are being more realistic than they were 10-to-15 years ago on residual values overall, Hall said. Used EVs can also present OEMs and dealers with an opportunity for certified pre-owned vehicle programs as well, he said.

While some of the lease prices are up there (especially for the Model S), ownership cost isn’t necessarily a deal breaker for consumers interested in EVs, Hall said. Some of them have environmental concerns and don’t just look at competitive pricing on the market. EVs can be more profitable for OEMs long term.

Swapalease’s staff have had access to two Chevy Volts, and they’ve enjoyed the experience. They are looking forward to the next generation Volt coming out, which should double the battery driving range, Hall said.

Tesla-Mania: Eric Cartman cusses out Tesla Model S; Millennials can bring electric scooters to America

While it has taken awhile for the creative team at “South Park” to slap around the Model S, the plug-in car did get a few moments on screen. Tesla Motors joins the ranks of Scientology and the Toyota Prius in getting lampooned. In an episode inspired by a variation of the George Zimmerman court verdict (called “World War Zimmerman”), extremely angry young man Eric Cartman stops a Model S and its driver at gunpoint. He yells at her: “We’ve got about ten minutes before this entire country is up in flames! If you wanna live, you’d better step on the gas! Oh wait, is this a Tesla? Sh*t! Well press on the prissy pedal! We’re gonna die!”
In more serious Tesla news….. Tesla was the top seller of zero-emission vehicle (ZEV) credits in California from Oct. 1 2012 to Sept. 30, 2013 (and Toyota led hybrid credit trades). Tesla transferred 1,311.52 ZEV credits during that time, according to a California Air Resources Board filing. The number two company was Suzuki and was far behind Tesla; Suzuki discontinued US auto sales in 2012 but was able to transfer credits accumulated in the past. Companies that acquired ZEV credits to meet their requirements included Chrysler, GM, Honda, Jaguar Land Rover, Subaru, and Volkswagen (though it’s not reported if they acquired their credits through Tesla or another automakers). California requires automakers to sell electric or other non-polluting vehicles in proportion to their market share in the state.
Tesla CEO Elon Musk spent $989,000 at a London auction on a Lotus Esprit used in The Spy Who Loved Me by the James Bond character. Bond drove the car off a pier in the movie as it transformed into a submarine by merely pressing a button. Musk had fun with it, telling the USA Today he loved watching it as a kid in South Africa. He was disappointed to find out you can’t press the button and make it happen, but plans to upgrade it with a Tesla electric powertrain so that it can transform for real.

Millennials can bring electric scooters to America
Check out this video interview Terry Duncan, chief of consumer engagement at Mahindra GenZe, a US startup that has backing from India’s Mahindra. GenZe is rolling out an electric scooter in early 2014 targeted toward Millennials in the US. The product and audience was chosen based on two premises – urbanization is happening in the world’s major cities and transportation is being heavily impacted; Millennials in their late teens to early 30s are the right market to start with, since they’re not buying cars as much as previous generations, are moving to cities, and want functional, practical transportation alternatives. In another video, you’ll hear him discuss the design decisions made on the bike; while these types of vehicles have huge sales numbers in countries like China, they need to be extremely pragmatic and, let’s say, cool, to make it in the US.

Top News of the Week:

A group of Chinese investors based on Hong Kong and led by Richard Li are investing in Fisker Automotive for an unreported amount. This should finish the US Dept. of Energy’s loan to Fisker – most all of the $192 million loan needs to be paid back and the investor deal will probably only meet some of it, which the US government has been ready to accept. A small chunk of the payback will come through former GM vice chairman Bob Lutz. VL Automotive, a small Detroit company that has Lutz’ backing, will be converting 25 unsold Karmas from plug-in hybrid power to Corvette power. VL had to settle a dispute with an Asian investor that had prevented them from accessing codes operating the car’s infotainment system. Lutz says these converted Karmas will come out in 2014 for something close to $200,000.
CleanFuel USA has installed 85 retail propane autogas fueling stations across 13 states. This was funded by a $12 million grant from the US Department of Energy’s American Recovery and Reinvestment Act. Texas State Technical College – TSTC – served as the lead grantee. The majority of the 85 stations are located near heavily trafficked roadways, existing fueling stations, major airports and home improvement stores, CleanFuel said.
Don’t believe in climate change? What about lung cancer? The International Agency for Research on Cancer, based in Lyon, France, has released a study that formally declares air pollution is causing lung cancer. The research arm of the World Health Organization focused on diesel cars and trucks in operation around the world as a major source of the problem.
ChargePoint is offering a lease-to-purchase program for businesses and cities to install its charging system. The systems usually cost between $6,000 to $12,000 to buy and can cost about $3 to $6 a day over five-to-seven years to pay off under the finance program.
GM will be offering a bi-fuel version of the Chevrolet Impala that will be able to travel up to 500 miles on gasoline and natural gas.
General Electric Co. is converting heavy-duty trucking fleets from diesel to natural gas. GE has partnered with Clean Energy Fuels Corp. and truck fleet operators can apply for loans and leases through GE Capital to make the conversions.
Plug-ins missed the Green Car of the Year award nominee list. The winner will be announced next month at the LA Auto Show form the following list: Audi A6 TDI, BMW 328d, Honda Accord (though the plug-in hybrid was included with the hybrid and ICE versions of the Accord), Mazda3, and Toyota Corolla.
Experts speaking at the annual ITS World Congress in Tokyo expressed concerns over issues that do tend to come up with self-driving cars – technical challenges, lack of industry standards, vague and minimal regulations, implementation costs, and liability issues. Toyota is being a little more optimistic, expecting that elderly drivers could likely make up a strong market segment for self-driving cars.
A study by UK-based Kantar Media says that the BMW i3 saw huge media gains in the third quarter after its debut last month at the Frankfurt auto show. It was No. 2 in online news coverage from No. 60 during the second quarter. It came in 8^th place in both Tweets and blog mentions during the third quarter versus being in low 100s rankings for both segments in the previous quarter.

BMW says it’s not taking on Tesla for luxury EV buyers, but who’s kidding who?

“Revenge of the Electric Car” was a must-see in 2011 – the sequel to the influential “Who Killed the Electric Car?” shifted gears and explored who might become the iconic leader of the reincarnated electric vehicle market – Tesla’s Elon Musk, GM’s Bob Lutz, Nissan’s Carlos Ghosn, or custom electric car do-it-yourselfer Greg “Gadget” Abbott. While watching the movie, I kept wondering: What about BMW?

BMW was testing out the Mini E with US drivers during the time the Nissan Leaf and Chevrolet Volt made it to the market. Next came the BMW ActiveE and now the BMW i3, and the i8 plug-in hybrid is next. Maybe the problem was the German automaker didn’t have any recognized US “car guy” celebrity to star in a movie? Well, the game is changing and BMW is poised to take on Tesla Motors for market share in the luxury electric vehicle market – even if BMW or Tesla doesn’t admit that being the case.

BMW says that’s its upcoming i8 sports car is not competing directly with the Tesla Model S. It’s a supercar of the future with the driving performance of the BMW M3, and the plug-in hybrid gets more than 80 miles per gallon, BMW says. The i8 is being shown at the Frankfurt auto show next month and will go on sale in the US in early 2014. Pricing hasn’t been released but it’s going to be steep – something less than $150,000. BMW is obviously paying attention to how well the Tesla Model S has been doing this year in sales performance. BMW says that the i8 and Model S will be reaching different buyers – but both automakers are clearly targeting sophisticated, high-income consumers. Incentives/rebates do apply, but that doesn’t really matter much at these price points. Leasing takes some of the edge off of it, but it’s still got a limited market potential. German luxury automakers have known this for years but have been committed to battling competitors (including Japanese luxury brands) for more share.

What about the BMW i3 versus the Model S? It doesn’t appear to be competing directly with the Model S. The i3 is a hatchback with a starting price of $42,275 versus the Model S sedan that starts at about $70,000. It might be more comparable to the Tesla Model X crossover that will be launched in 2014 for a starting price around $35,000. Tesla says it will go 200 miles on a charge, while the i3 gets 80 to 100 miles on a charge. The i3 is getting a lot of raves out in the automotive media and cleantech space – it’s the first in the series of BMW electric cars and the German automaker has been masterful at marketing its image – tying into BMW’s legacy as a high-performance carmaker and also tapping into the grand theme of global urbanization, as depicted in the photo above.

During a recent investor quarterly conference call, Tesla CEO Elon Musk chuckled when asked by an analyst about the BMW i3. It wasn’t clear what was so funny with Musk and a group of co-workers inside the conference call room, but he is known for putting down competitors (just ask Henrik Fisker). “I’m glad to see did BMW is bringing in electric car to market. That’s cool. There’s room to improve on the i3 and I hope that they will,” Musk said.