Solid used vehicle segment to reach: green cars

EPA used vehicle labelLooking for a profitable used vehicle market segment to reach? How about green cars – hybrids, electric vehicles, and fuel efficient vehicles? Franchised and independent dealers are seeing a lot of used inventory on the market today, and some of it, especially trucks, is seeing strong pricing. What we’re seeing though, such as in Manheim’s latest report, is that dealers are doing well by selling lots of used vehicle the right way. Prices might be down on small, fuel efficient cars and hybrids, but all things considered, they’re not bad – and selling a lot of them can be profitable.

There are two interesting announcements from last week that speak to the issue – one is that Nissan has added its Leaf electric car to its certified pre-owned vehicle list; and the other is an online tool for used cars rating fuel efficiency and emissions from the US Dept. of Energy (DOE) and Environmental Protection Agency (EPA).

Certified Leafs will get an extended warranty of seven years or 100,000 miles on both the electric system and powertrain. To be considered, the used Leaf must be less than five years old, have fewer than 60,000 miles, and have at least nine of 12 bars of battery capacity remaining on the gauge. It also needs to have a clean Carfax history report, and pass an inspection where 167 separate items are checked. Two warranties on the battery pack will remain in place – eight years or 100,000 miles, and five years or 60,000 miles, with a few performance indicators being checked on each warranty. The new certified program adds to the protections.

For the DOE and EPA offering, dealers and consumers can now place a used car label based on fuel economy and emissions performance. It’s a free online tool allowing for creation of a consumer-friendly label that lists gas mileage and CO2 emissions levels of used vehicles sold in the US since 1984.

Other indicators that used green cars is a viable market segment to reach include eBay’s Green Driving (which they say gets a lot of traffic); NADA Used Car Guide’s Plug-in Electric Vehicles: Market Analysis and Used Price Forecast; and ALG’s Alternative Powertrain Perceived Quality Study.

Frankfurt Motor Show looks electrified but how real is it?

Frankfurt Motor ShowThe German auto show is going full steam ahead and has been getting plentiful media coverage describing electrified vehicles as the central theme. There certainly have been a lot of displays, but the typical question arises – how much of this will really reach production lines, what will the volume look like, and when will they show up at dealer lots? Here’s a few highlights from last week…

Volkswagen took center stage – claiming to have 40 new hybrids, plug-in hybrids, and battery electric vehicles in the works to roll out by 2018; the company plans to roll out 14 vehicles with alternative powertrains by next year. Coming soon will be electrified versions of the Up! city car, Golf compact, Audi A3 Sportback plug-in hybrid, and a battery-assisted Porsche 918 supercar. Volkswagen CEO Martin Winterkorn says that his company will become the world’s largest producer of battery-based vehicles in the world.

VW also said that it’s considering rolling out natural gas-powered cars in the US. The automaker is urging the Environmental Protection Agency to do more to get a broader natural gas refueling network set up across the country.

Land Rover will be offering a diesel plug-in hybrid Range Rover SUV. It’s expected to pair a 288 horsepower turbodiesel engine with a 47 hp electric motor, and will get 44 miles per gallon.

BMW officially unveiled its i8 plug-in hybrid, which gets 362 hp that comes from a three-cylinder engine and an electric motor. BMW is also showing a Concept X5 eDrive at the show – a plug-in hybrid based on a four-cylinder engine.

Big Picture: August a hot sales month for green cars, $45M more in DOE funding, EV rentals in vacationland, the latest from Tesla-Mania!

Volt dealer salesAugust witnessed a hot sales market for plug-ins and hybrids
Plug-in electric vehicle sales nearly doubled year-ago figures to 9,431 units in August. The Chevrolet Volt reached its highest ever monthly sales figure – 3,351 units sold in August reaching just under 15,000 for this year. June 2013 had seen its best June ever at 2,698 units sold and July had dropped to 1,788. So August was a win-win for GM and incentives have been helping. The Nissan Leaf sold 2,420 units in August and made it to a little over 14,100 for the year. Previously, March had been the best sales month of the year for the Leaf, at 2,236 units sold. Atlanta has been a new and strong market for the Leaf. Tesla brought in sales of 1,716 Model S units, for a total of 13,330 for this year. Toyota had an even better month, setting a monthly record of 1,791 of its Prius Plug-in Hybrids. The RAV4 EV did well, too, reaching a record 231 units sold. Overall, the Prius saw a strong month with 27,358 units sold in all four variants – 28% over last year.

Ford did very well, almost quadrupling its green car numbers from last year at 8,292 vehicles sold. The Fusion Hybrid reached 3,694 units sold, C-Max Hybrid reached 2,411, the Fusion Energi hit 600 sold, and C-Max Energi made it to 621 sold. Revising the mileage rating on the C-Max hybrid on August 15 didn’t seem to hurt sales. Ford announced the EPA combined fuel economy rating was dropping from 47 to 43 mpg. The automaker thinks it still has a very strong selling point against its chief competitor, the Toyota Prius V, which has a combined mileage rating of 42 mpg.

DOE investing $45M in advanced vehicle technology projects
Ford, General Motors, Chrysler, General Electric and Caterpillar are among the 38 companies, universities and national labs to receive more than $45 million in US Department of Energy funding for projects that accelerate R&D of vehicle technologies to improve fuel efficiency, lower transportation costs, and protect the environment. While similar to the Advanced Vehicle Technology Manufacturing program, this new DOE project fund is a separate project tied into President Obama’s Climate Action Plan that was launched in June of this year. The US Army will be contributing an additional $3 million to support projects based on lightweighting and propulsion materials, batteries, fuels, lubricants.

Coalition bringing electric drive experience to tourists visiting Orlando
Drive Electric Orlando (DEO) is bringing the electric vehicle driving experience to a lot of tourists visiting the city famous for its massive theme parks. DEO is bringing together car rental, charging stations, hotels, theme parks, and other stakeholders into the coalition. Enterprise Rent-A-Car is playing the leading role and working with Nissan on bringing Leafs to customers. Other participants include Disney, Sea World, Universal Studios, Duke Energy, Visit Florida, Peabody Hotel, and the University of Central Florida; Electrification Coalition is also part of the network. Renters can get a Leaf for as low as $30 a day that includes GPS navigation and overnight charging at hotels. Customers will be able to have free use of the Clear security lanes when leaving the city’s airport.

Siemens leaving EV charging business
Siemens AG, a German multinational engineering and electronics conglomerate, is leaving the electric vehicle charging market. Demand and market development has been weaker than expected in Germany and in the US. It will continue offering wall boxes for recharging electric vehicles at home, and will continue research on wireless charging. Siemens has played a very visible role at conferences such as Plug-in 2012.

Republicans in Congress likely to oppose DOE advanced vehicle loans
The US Dept. of Transportation’s Advanced Technology Vehicle Manufacturing loan program is facing Republican opposition in Congress. The DOE recently announced an active outreach campaign for the loan program to deliver more than $15 billion to potential applicants. U.S. Rep. Darrell Issa, R-Calif., the head of the House oversight committee, previously said the auto loan program was a “perfect example of government waste.”

Tesla-Mania!:  Combat with dealers, Musk family road trip
 After mixed results in state-level battles with dealers over its non-franchised dealer business model, Tesla Motors is ruminating over taking it to Washington. Tesla had fought the fight most intensely in Texas to overturn state franchise laws – and lost to dealers. Texas is considered to have the toughest state laws benefiting dealers over automakers. Dealers are watching it very closely with fear that Tesla gaining victory in Washington or any of the states would open the door to automakers from developing countries coming to the US to carve out market share. There’s also fear of what major OEMs might gain if Tesla gets away with it and they decide to switch over to company stores. They do tend to find Tesla CEO Elon Musk extremely irritating, but recognize he can pull a lot of sway.

In less dramatic news, Musk will be taking off on a cross-country road trip in a Model S with his five kids in the car. Musk will have to figure out the best way to drive 3,200 miles and make charging time most efficient at Tesla’s Supercharger stations. He thinks it will take up to 90 minutes a day to get the needed charging done during the five-day trip.

Climate Change and transportation policies: Are skeptics right that it’s really a lost cause?

Climate change polar bear

Stakeholders striving to bring green transportation to the mainstream tend to articulate one, two, or all three of the following reasons for supporting their missions:

1. Petroleum: Reducing and eventually eliminating America’s (and Planet Earth’s) addiction to oil and all its negative implications on geopolitics and energy security, economic stability, and environmental issues.
2. Economics: A seismic shift has been in the works for years, long before the Great Recession, with globalization and adoption of new technologies driving change. As America sees several industries and jobs diminish or disappear, looking for new opportunities is a very good thing. Alternative fuels and vehicles offer the possibility of return on investments, OEM and infrastructure sales, good paying jobs, and sales tax revenue.
3. Emissions: On the regulatory front, along with sustainability policies being adopted by several corporations, green transportation tends to be primarily pushed forward to reduce tailpipe and carbon emissions. Air pollution and its health-hazard implications are there on the tailpipe smog side of the analysis, and for many organizations, climate change is the central issue.

I’ve recently heard persuasive arguments made that climate change is certainly occurring, but there’s very little humans can do about it. While reducing fossil fuel consumption and emissions is the clear path to reducing CO2 levels, it will only address one end of the scale; there are environmental forces – including what’s happening deep within our oceans – that are outside human-caused climate change and there’s very little we can do about it.

Whether these arguments have weight or not, it’s very important to stay current on what’s happening out there, as it will affect government and corporate transportation policies. So here’s the latest on the climate change debate….

The US Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) just released a report stating that the scorching hot heat that hit the north central and northeast US during the summer of 2012 was impacted by man-made climate change. The report’s analyses found evidence of human-caused climate change in half of the 12 extreme weather and climate events analyzed from last year. It started with unusual warmth in the spring season of 2012. “Approximately 35 percent of the extreme warmth experienced in the eastern U.S. between March and May 2012 can be attributed to human-induced climate change,” NOAA said about one study in the report. From another study in the report, NOAA stated, “High temperatures, such as those experienced in the [north central and northeast] U.S. in [summer] 2012 are now likely to occur four times as frequently due to human-induced climate change.”

The California Air Resources Board has a legal battle to deal with that’s attempting to undercut the Low Carbon Fuel Standard Program, which came out of AB 32 when it was enacted in 2006. Oil and ethanol companies want to void the rule and claim that the fuel standard discriminates against crude oil and biofuels producers outside California. There are two lawsuits in the works. CARB lost the federal court case and is waiting to find out if the Ninth US Circuit Court of Appeals will hear the case. Ethanol producer Poet LLC has another case filed with the state court claiming CARB violated the California Environmental Quality Act (CEQA) when it adopted the standard. Poet claims the rule unfairly penalizes ethanol producers by counting their indirect carbon emissions.

National Geographic’s September cover story, “Rising Seas,” shows the Statue of Liberty waist high in seawater. The lead feature article starts out with three statistics – 136 large coastal cities are now at risk from sea-level rise; 40 million people are at risk in those cities; and there’s $3 trillion value of assets at risk. A fold-out map shows what the planet would look like if all the ice caps melted – the southeast US is underwater; California doesn’t break off and sink to the bottom of the ocean, but somehow its central agricultural region becomes a giant lake. The global map forecasts 5,000 years into the future when the sea level rises 216 feet, perhaps much faster if we add five trillion more tons of carbon to the atmosphere. The average earth temperature will be shooting up from the current 58 degrees Fahrenheit to 80 degrees. Most of magazine’s special section focuses on tactics for surviving flooding and other consequences that come out of disasters like last year’s Hurricane Sandy. In June, Mayor Michael Bloomberg outlined a $19.5 billion plan to defend New York City against rising seas. Tim Folger, author of the article does mention the role of human decisions impacting melting ice caps…. “Unless we change course dramatically in the coming years, our carbon emissions will create a world utterly different in its very geography from the one in which our species evolved,” Folger wrote in the summary. “No matter how much we reduce our greenhouse gas emissions, Foster (Gavin Foster, a geochemist at the University of Southampton in England) says we’re already locked in to at least several feet of sea-level rise, and perhaps several dozens of feet, as the planet slowly adjusts to the amount of carbon that’s in the atmosphere already.”

In June of this year, President Barack Obama came back to the issue of climate change, which he’d basically avoided during his reelection campaign last year. In June of this year, the White House published the “Climate Action Plan” and the president gave a speech that month on climate and energy. The theme of the transportation portion of the report digs into increasing fuel economy standards and developing and deploying advanced transportation technologies as the way to address climate change. The report does start out with a quote from the president’s reelection inaugural speech in January where he mentioned the overwhelming majority of scientists convinced that climate change is for real ….. “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms,” he said. Our moral obligation is to hand over sustainable energy sources to future generations, according to the president. Obama addressed the topic during the G20 summit, though the issue of what to do about Syria was much more important. Five Scandinavian nations (Denmark, Finland, Iceland, Norway, and Sweden) agreed with the president on the goals outlined in the Climate Action Plan.

Transportation produced 31% of total carbon emissions and 26% of greenhouse gas emissions (GHG) in the US during 2011, according to the US Environmental Protection Agency. Electricity, industry, residential and commercial, and other non-fossil combustion make up the rest of carbon dioxide (CO2) emissions in the EPA analysis. GHG and CO2 emissions go through ebbs and flows of interest and action by government entities, researchers, and businesses. The published B2B and consumer surveys make the issues look vulnerable to fluctuation on priority lists for elections, investments, purchase decisions, and lifestyle concerns. Climate change is not going away as a pressing issue – especially in the wake of natural disasters and weather catastrophes – but it’s probably best suited for success in league with petroleum and economic issues.

Lithium-ion batteries see much brighter days for Asia-based battery makers

LG Chem battery researchNot long ago, Navigant Research identified what it considers to be the top 10 most significant lithium-ion battery makers active in the electric vehicle market. Its top 10 ranking is based on systems integration, safety engineering, chemistry performance, geographic reach, manufacturing and product performance, pricing, and overall corporate financial health. Here’s the top 10 list with a bit of company background information….

  1. LG Chem – formerly a subsidiary of LG Group, the South Korean company went public in 2001 with LG Group remaining a significant investor.
  2. Johnson Controls – a US-based company offering products and services to optimize energy and operational efficiencies to several industries including automotive.
  3. Automotive Energy Supply Corp. (AESC) – a joint venture between three Japan-based companies – Nissan, information technology company NEC Corp., and electronic device company NEC TOKIN Corp.
  4. Panasonic – a Japanese electronics company.
  5. Samsung SDI – a subsidiary of South Korea-based Samsung Electronics.
  6. SK Continental E-Motion – a joint venture between South Korea’s largest oil refiner SK Innovation and German automotive parts supplier Continental AG.
  7. Hitachi – a Japanese engineering and electronics conglomerate.
  8. Toshiba – a Japanese engineering and electronics conglomerate.
  9. GS Yuasa – a Japanese company known primarily for automobile and motorcycle lead-acid batteries.
  10. BYD – Chinese BYD Company is a major battery maker and also owns BYD Auto Co.

You might notice a pattern here – of these 10 companies, only one is US based and nearly all others are in Asia and bring many years of success in automotive, engineering, and electronics to their battery divisions. The US has its share of electric carmakers, but the battery packs haven’t gone well for US-based manufacturing. A123 Systems went bankrupt and is making a few batteries now for its Chinese company owner; EnerDel came from Ener1 and its troubled partnership with Norwegian electric carmaker Think. EnerDel is struggling with lack of business and just cut its Indianapolis-area workforce by one third. Coda Automotive has pulled out of the electric vehicle market and filed for bankruptcy. Management is now focused on building its battery energy storage system through its Coda Energy division, which it started in 2011, and it’s focused on markets outside of electric vehicles.

LG Chem has done very well in the global li-ion battery market, but the US has been a bad experience for the top-ranked company. LG Chem finally began producing li-ion batteries in July for the Chevrolet Volt at its Holland, Mich. plant, but that’s been stopped again in the past few days. The US Environmental Protection Agency (EPA) has raised questions about how the cells are being made. The EPA has issued a subpoena on LG Chem to find out what chemicals have been used in production. The company says that it’s still confident it can get production ramped up once this investigation gets wrapped up.

LG Chem had received $151 million in US Department of Energy funds, but had not built any Volt batteries from Holland, Mich., until very recently – only from its South Korean facilities. It got fairly ugly earlier this year when the Office of the Inspector General reported that LG Chem employees were sitting around doing nothing but playing games and watching movies while being paid from these federal funds. LC Chem was instructed to return $842,000 as a result of the report.

Lux Research reported that electronics giant Panasonic’s lithium-ion battery division earned about $40 million in profits during Q2 2013 – much better than in Q2 2012 when the company lost $20 million. The company is expected to invest over $200 million during the next year to expand its li-ion production lines in Japan. Panasonic has supplied nickel-metal hydride batteries to Toyota and Honda hybrid models, but more recently has invested more in its li-ion division. Tesla Motors is a major client – Panasonic has been producing 60 kilowatt hour to 85 kWh battery packs for its Model S electric car. Lux Research reported that Panasonic has overtaken LG Chem and AESC in US li-ion sales. The US market is competitive for li-ion EV battery market share, but it’s now coming from companies based overseas.

Big Picture: Nissan joins Tesla in selling ZEV credits, Volvo Trucks upping its green credentials, Toyota improving Prius performance

Nissan Leaf ZEV creditsHere’s my take on top news stories of the week:

  1. One of the gains made by selling plug-in electric vehicles in California is gaining zero emission vehicle (ZEV) credits and selling them to your competitors. Nissan Motor Co. now joins Tesla Motors in selling green-car credits. California requires large automakers to sell electric or other ZEVs in proportion to their market share in the state. Nissan has sold enough Leafs that it can sell its excess carbon credits to other automakers. The Tesla Model S can generate up to seven ZEV credits because of its range of as much as 300 miles per charge and the option of swapping its battery pack with a charged one (the company will open its first battery swap facility by year’s end). The Leaf earns three credits through the state program.
  2. Volvo Trucks is upping its green credentials even more – Through its Climate-Smart City Distribution project, emissions from 400 distribution trucks were cut between 30% and 80% over three years. Volvo worked with several partners to improve the efficiency of distribution operations in Gothenburg, Sweden. Conventional diesel distribution trucks were replaced with vehicles using renewable fuels – biodiesel, biogas, and dimethyl ether (DME); hybrid technology; and methane-diesel fuel. Volvo and Mack Trucks are committed to bringing DME powered trucks to roads soon; earlier this year, Volvo unveiled plug-in hybrid buses as part of a field test.
  3. Toyota is optimistic that its next generation Prius will get even better fuel economy and cost even less. Improvements will come through using lighter materials and significant advances in battery, electric motor, and gas engine technologies, the company said. Toyota thinks its miles per gallon rating on the hatchback Prius will gain from 50 mpg to near 55. It’s likely to come out in 2015. It next generation batteries will have higher energy density. For the Prius and other Toyota models, the automakers is working on a diverse set of batteries – lithium ion, nickel metal hydride, solid state, lithium air, and magnesium.
  4. Electric Drive Transportation Association (EDTA) and its GoElectricDrive Foundation have a partnership with Green Sports Alliance dedicated to improve the environmental performance of sports teams and facilities. Since being founded in March 2011 by six professional teams and five venues, Green Sports Alliance now has over 170 professional and collegiate teams from 15 different sports leagues. Members include Anaheim Ducks, Baltimore Ravens, Boston Red Sox, LA Dodgers, Miami Marlins, New York Jets, and University of Texas Longhorns. EDTA and Green Sports Alliance will show organizations the benefits of integrating electric drive in their fleets, and giving fans a place to charge up their EVs while watching a ballgame, said Brian Wynne, president of EDTA.
  5. The 2013 AltCar Fleet Conference and Expo will be put on by the City of Santa Monica on Sept. 20-21. It tends to offer the best green vehicle display and ride and drive with just about e everything you can think of available to check out. As for speakers at the Friday fleet conference, these will include Terry Tamminen, former secretary of the California Environmental Protection Agency; David Friedman, deputy administrator of the National Highway Transportation Safety Administration; JR DeShazo, director of the Luskin Center at UCLA; Randall Winston, special assistant to the executive secretary, office of Governor Edmund G. Brown, Jr.; Jon Coleman, fleet sustainability & technology manager for Ford Motor Co.; and Richard Battersby, Public Sector Fleet Manager of the Year, from East Bay Clean Cities. Vehicle debuts will include Southern California Gas Company’s west coast introduction of four new prototype consumer vehicles built to run on compressed natural gas and capable of using gasoline as backup.
  6. CleanFUEL USA has just brought in Blair Poulsen as its director of sales; Poulsen brings more than 23 years of propane industry experience to the company. He was most recently regional sales and marketing director for Heritage Propane and AmeriGas Propane, and currently serves on the Nevada Board of Regulation of Liquefied Petroleum Gas. Poulsen will lead a team serving clients in propane refueling infrastructure and OEM vehicle technology, including Thomas Built Bus, Collins Bus, General Motors Corp., and Freightliner Custom Chassis Corp.
  7. You think regenerative braking is pretty cool? How about a regenerative suspension? German automotive parts maker ZF says it’s bringing the first technology of its kind to the world. ZF Friedrichshafen AG has teamed up with Levant Power Corp. to product a system that works like regen braking, recapturing energy when the suspension gets put in motion. It would take away the large amount of energy needed by suspension systems and increase fuel economy.
  8. Is your community burdened by dirty coal? How about converting over to cleaner natural gas? Navigant Research is hosting a webinar on Sept. 10 that will explore that topic. Utilities are shutting down a lot of aging coal-powered plants through 2020. There are costs and complexities involved in switching over to natural gas that will be discussed by panelists, including examples of plants that have gone through these conversions in recent years.
  9. States like California are digging into the best financial models for reducing traffic congestion and repairing worn out roads. Vehicle Miles Traveled (VMT) taxes, gasoline tax increases, road tolls, increasing vehicle licensing and registration fees, transportation-focused sales tax, and infrastructure bonds – and all they pluses and minuses – are explored in an article that was just published in Westways. It’s a very tough issue that states are going through.
  10. Reincarnated electric carmaker Detroit Electric will still be making its all-electric SP:01, only it won’t be happening in Detroit. Its Lotus-based sports car will be made in the Netherlands, and production will start in the fourth quarter of this year. The company was going to bring jobs to Detroit initially – 2,500 cars per years with a workforce of 100. Plans started being delayed in June, as the company said it couldn’t find the right manufacturing location in Wayne County, Mich., where Detroit is located. 

Chrysler Group and NADA encouraging dealers to be energy efficient

Westgate dealer proud to be greenChrysler Group just recognized 30 of its dealers who’ve performed well through its second annual Dealer Environmentally Conscious Operations program. Dealers are saving money by adopting energy efficient practices and looking for ways to make the changes pay for themselves. One of the more interesting examples has been Westgate Chrysler Jeep Dodge Ram, based in Raleigh, N.C. Westgate installed 420 solar panels on its service department and sold the power to the region’s electric utility at a fixed rate. It’s reducing energy costs $1,800 to $3,000 per month, depending on the volume of sunshine that make it to the solar panels.

Chrysler Group is emphasizing two accomplishments its dealer network is reaching – significant contributions to the environment and creating a sustainable enterprise. There’s also the operating cost savings part – which will take a while depending on the incentives available to the dealer and the cost of having the solar panels installed or other building structure investments needed for improved energy efficiency. Dealers can access incentive programs in some states that lower the solar panel installation cost quite a bit; and can start up energy efficiency programs such as changing over to LED lighting fixtures. Chrysler looks at how its dealers are doing in energy efficiency, waste recycling, wastewater control, bulk oil containment, vehicle lift maintenance, and community relations program.

The Chrysler dealers are based in 21 states, with four of them being in Michigan and four in Florida; California, North Carolina, and Texas each have two dealers recognized this year. They were selected based on data from dealership online surveys and in-dealership notes.

As for vehicles, Chrysler Group hasn’t done much at all in the green space. It is testing out some plug-in hybrid Ram pickups and a few other concept models. Parent company Fiat has introduced the Fiat 500e electric car to the US market; some say it’s a “compliance car” in California, but it does seem to be getting a good deal of interest from car shoppers.

National Automobile Dealers Association is in the process of having dealer members provide data in a benchmarking study through the US Environmental Protection Agency’s Energy Star program. They’re asking dealers to take a survey that will give EPA a benchmark to compare energy usage of dealers across the country, and to allow for certification of those dealers that perform well. Dealers are sharing their utility bills, total square footage, and different types of equipment being used at the dealership.

The NADA and EPA relationship goes back to 2007 in what’s called the Energy Ally program that was designed to help dealers reduce their energy consumption. Dealers are being educated on energy reduction and cost saving opportunities and strategies. KPA, a dealer services and internet marketing provider, now has an alliance with NADA through Energy Ally. KPA and other companies are helping NADA to benchmark at least 500 dealers on their energy usage.

WEX whitepaper educates fleets on alternative fuel vehicles as demand increases

WEX going green saving green whitepaperWhile alternative fuel vehicles started noticeably showing up in fleets in the early 1990s, they haven’ t become significant in numbers or budgets until recently. Now fleets are acquiring all types of green vehicles, and that includes government fleets, corporate, service and delivery, utility, trucking, car rental, and car sharing companies. They’re also continuing to buy the most fuel efficient vehicles on the market, but alternative fuels have more importance now than 20 years ago when Clean Cities started up.

WEX Inc., formerly known as Wright Express, just sponsored a new whitepaper on the topic“Going Green, Saving Green: A Fleet Manager’s Guide to Alternative Fuels Best Practices.” WEX is the leader in fleet fueling payment cards systems, and is now bringing that over to electric vehicle charging and natural gas refueling stations.  It’s interesting to see a company like WEX release this type of whitepaper – the importance of alternative fuel vehicles has gained enough presence to inspire a whitepaper. It’s reminiscent of NADA Used Car Guide recently releasing a special report on resale value trends for the Nissan Leaf and Chevy Volt – after having ignored the issue for quite a long time.

The WEX paper pro­vides fleets with best prac­tices for cost-effective imple­men­ta­tion of alter­na­tive fuels in a fleet. While media primarily focus on consumer behavior with green vehicles, this paper asserts that fleets are much better positioned to use alternative fuels – their choices are premeditated, unlike consumers’. They’re usually traveling along predetermined routes and can stop for recharging and refueling at given points. That makes it much more viable to plan strategically and contain costs. Here are five recommended tips on making it work….

#1: Know the station coverage in your area.
US government agencies have made significant infrastructure investments, bringing up the number to 11,800 stations – of which about 6,000 are charging stations. About 82% of alternative fueling sites are accessible to the public. The Dept. of Energy offers a comprehensive directory of charging/fueling sites around the country.

#2: Compare historical fuel costs.
Starting in 2008, the commonly used fleet industry terminology for spiking gasoline prices was “fuel price volatility.” It was quite volatile that year, which shot up fuel costs for fleets and hurt vehicle financing and remarketing programs. Switching over to alternative fuels can bring price stability to fleets, though they do have to build in the conversion costs and lifecycle costs of choosing hybrids and EVs over fuel efficient gasoline and diesel engine vehicles.

#3. Think in terms of total ownership cost.
While green vehicles tend to sell for a premium price over typical internal combustion engine vehicles, total cost of ownership can be very appealing – especially for fleets putting a lot of mileage on their vehicles. Fleets tend to study four cost categories: capital costs; maintenance costs; end of life recycling and replacement costs; and indirect costs.

#4: Find and use tax credits wherever you can.
It goes without saying that incentives like federal tax credits and state rebates are very attractive for fleets – and there are a lot of these offerings to choose from now. Calstart encourages fleets to stay informed on state voucher programs to reduce ownership costs. The DOE offers a useful site to find out about the latest federal and state programs. Keep in mind that you need to have good fleet reporting mechanisms in place to cash into these incentives.

#5. Think holistically about fleet fuel costs.
This is where experience will come to play. It depends very much on the regional location of the fleet – in some areas like California, the infrastructure is more solidly in place for natural gas fueling and EV recharging than in most other states. A fleet might have very limited routes with plenty of downtime, making EVs with Level 2 chargers a good buy. Other fleets may choose hybrids and fuel efficient cars and crossovers, depending on their mileage and coverage area and the available infrastructure in that area.

Stay tuned for more specialized reports on green vehicles and infrastructure to be released.  These reports are likely to focus on the US and other key economic markets – China, India, Japan, Korea, Brazil, European Union, and Canada being the most important. Eventually, the economic impact of green vehicles and fueling will grab more attention as the numbers grow and the industry adds more layers to operations.

Big Picture: America’s largest port sees transportation emissions drop dramatically…. NHTSA irked by Tesla’s best-ever safety ratings claim

vacation timeWell it was certainly a busy week for alternative technology vehicles – and that’s saying a lot given that it’s unofficially Vacation Time here in the USA. So here’s a list of the most interesting stories of the past week….

  • The Ports of Long Beach and Los Angeles were proud to announce some big numbers…. Long Beach has cut diesel particulates by 81% and sulfur oxides 88% since 2005. The port has also reduced nitrogen oxides by 54% and other greenhouse gases by 24% since 2005. Reasons mentioned in the report for emissions reductions include bigger ships carrying cargo more efficiently, newer ships with cleaner engines, implementation of the Clean Trucks Program, increasing use of shore power, and a new low-sulfur fuel rule for ships, according to its Emissions Inventory report.
  • Port of Los Angeles just put out a similar report – the 2012 Inventory of Air Emissions. LA saw a 79% drop in diesel particulate matter since 2005. Moving cargo volume fluctuations from the equation showed the number was closer to 81% in reductions. The LA port saw a huge drop in sulfur oxides emissions (SOx)  throughout the South Coast Air Basin. In this report, 6% of all SOx came from the Port of Los Angeles – way down from 25% in 2005. Nitrogen oxides also saw a big drop during the past seven years. The port has implemented several clean-air measures, requirements, and incentives to reach these targets. All transportation modes are included – ships, trucks, trains, cargo-handling equipment, and small harbor aircraft.
  • NHTSA is tweaked that Tesla claims it received the highest crash-test safety record ever for its Model S. It got great ratings – five stars in each category, but it didn’t really get a 5.4 overall score like it claims, NHTSA said. Tesla used the mathematical formula that NHTSA cites to come up with its own 5.4 rating. NHTSA doesn’t even rate vehicles beyond five stars and doesn’t rank them against other vehicles, the agency said. (Editor’s Note: Wrong or right, Tesla did gain a lot of publicity when it issued its press release on gaining the best five-star safety record ever. I sure fell for it!)
  • In other Tesla news, the EV maker’s plans to enter the China market have stalled out for now. There’s a dispute over a trademark that Tesla needs to enter the market and set up a flagship showroom in Beijing. A businessman in China is claiming the trademark rights to the name.
  • And….. Tesla hit $173 and then closed at $164.23 in stock price yesterday – that’s market value in excess of $20 billion for part of the day.
  • Tesla competitor BMW is rolling out another plug-in concept next month at the Frankfurt Auto Show. The BMW Concept5 X5 eDrive plug-in hybrid is based on the BMW X5 SAV. It will be powered by a four-cylinder TwinPower turbocharged gasoline engine in tandem with a 70 kilowatt electric motor and a lithium-ion battery pack. The X5 eDrive will join the BMW i3 and i8 plug-ins in Frankfurt.
  • California Energy Commission is seeking proposals for $4.7 million available in awards – three awards up to a little over $1.5 million each to be distributed among three regions – Northern, Central, and Southern California. The funds will support new or existing centers for alternative fuels and advanced vehicle technology. Winners of the awards will support a neutral site for companies to collaborate on technology demonstrations, with fleet managers expected to play a big role. In other government funding news, the new US Secretary of Energy, Ernest Moniz, said the feds may revive the $25 billion Advanced Technology Vehicle Manufacturing Program. That program has been on hold since March 2011 after two of the five companies that had received loans halted production. The DOE is looking at revising the loan solicitation process.
  • Detroit Electric is sputtering in its manufacturing plans as the company that revived the historic EV brand has to yet to make an agreement for a plant in Wayne County, Mich. There was going to be a facility in Plymouth to make its electric sports car, but that’s failed to come together.
  • Mercedes-Benz ordered 123 more hydrogen-based GenDrive fuel cell units to run forklifts at its logistics center under construction in Tuscaloosa, Ala. Last month, Mercedes bought 72 of these fuel cell lifts for its Tuscaloosa vehicle assembly plant.
  • While some scoff at the term “clean diesel,” others would disagree. RL Polk & Co. says the US sales figures have gone up 25% between 2010 and 2012 and the number of these diesel-powered light-duty vehicle models will be going up from 27 models now to more than 55 in the next two years. Why is the momentum building for diesel passenger vehicles? Three main reasons:  lots of appealing products to choose from; diesel engines are 20% to 40% more fuel efficient than comparable gasoline engines; who cares of diesel is pricier than gasoline? Automakers like them for the 54.5 mpg by 2025 fuel standard mandate and consumers have more confidence in them now. The Volkswagen Golf TDI and Jetta TDI impressed a lot of people as high performance and fuel efficient, and led the way in diesel adoption.
  • Google poised to profit from self-driving cars: Mega-automotive supplier Continental AG is now in alliance with Google and IBM to build autonomous driving systems for cars. Continental has a similar deal with Cisco Systems for automated/driverless cars and data transfer between automobiles. Google has been in this game since 2010, providing test results from California highways and played an important role in the state of Nevada doing its homework and becoming the first state to adopt a self-driving car testing program.
  • EVCARCO Inc.., an up-and-coming dealer network offering green vehicles, has launched its EV Leasing Program. The company wants to support increase in demand in the US for new and pre-owned electric and hybrid vehicles available now in the US. CEO Walter Speck said the EVCARCO has submitted licensing to solicit consumers to enter into a lease of new or pre-owned models, which include the Chevy Colt, Nissan Leaf, Teslas, BMWs, Toyotas, and other alternative fuel vehicles.

Green Automotive bringing electric shuttles to US market as part of broad strategy

Newport Coachworks image on GAC websiteWe’ve certainly seen quite a few startup OEMs and battery makers go belly up in the electric vehicle space in the past three years. To survive and thrive in this newfound industry, building reliable, high performance product, marketing and “messaging” in a way that resonates with the core audience, and having solid financials, are key ingredients.

Green Automotive Company (GAC) is the holding company for three units – Liberty Electric Cars and GoinGreen in the UK and Newport Coachworks in the US. Ian Hobday, director of GAC, says the holding company has a business strategy of going “back to basics.” A steady cash flow is needed for EV makers, and each of GAC’s business units have revenue streams beyond EVs. “You can’t have 100 percent of your focus on EVs,” he said. “The volume’s not strong enough yet.”

His initial company, Liberty Electric Cars, was acquired last year by GAC and brings about eight years of experience in the European market to the table. It’s been delivering electric vehicles to customers in Europe for several years, and has other diverse offerings on the market including all Electric Range Rover conversions.

In November, Newport Coachworks will start building electric shuttle buses at its production facility in Riverside, Calif. The Newport Coachworks team has been in the bus market for years and was recently acquired by GAC. While most of the buses in chauffeured transportation tend to be converted from Ford E450 or F550 platforms, Newport Coachworks will be building its own electric buses from the ground up. Newport is tapping into Liberty’s experience delivering electric vehicles to parcel delivery and postal fleets, and to plumbers, gardeners, decorators, and other business customers. The shuttle bus is powered by an 80 kilowatt battery pack that goes about 100 miles on a charge; the A/C unit doesn’t need extra power during the trips as it has its own source, Hobday said.

What GAC is finding out is that customers appreciate the cost per mile differential with electrics buses – 14.5 cents per mile for typical shuttle buses and 2.5 cents per mile for electric shuttles. Drivers also love the fact that the electric bus has no vibration or noise – they feel more relaxed while doing their jobs, Hobday said.

A number of clients have been using GAC’s drivetrains in their own vehicles, including OEMs in Europe. They’ve also been accessing the Liberty E-Care service offering, which provides service and support for EVs already on the roadfrom trained and skilled technicians equipped with customized diagnostic tools.

GAC found California to be a smart place to launch its electric shuttle buses in the US market. It’s the largest market so far in the US for electric vehicles, and there’s incentives and support for the technology within the state. The company is also focused on getting as close to 100% as possible in using American parts and labor in its vehicles. GAC has been working with manufacturers of lithium ion battery cell makers such as Dow Kokam on its electric Range Rovers. GAC wants access to inherently safe, high energy density cells from US suppliers. “Why go to China? It’s much cheaper, but the failure rate is higher,” Hobday said.

GoinGreen is GAC’s retailer network in the UK. It offers a wide gamut of EV products – city buses, bikes, scooters, and city cars. It will be coming to California then launching a global rollout. As GAC acquired Liberty and GoinGreen, the idea was to consolidate operations, reach economies of scale, and to cover all the basics – from manufacturing electric powertrains and conversions, servicing the vehicles, and expanding retail store fronts. GAC serves the internal combustion engine sector, as well. As GAC and other thriving players in the EV market (i.e., Tesla Motors) know very well, good solid profits are required for EV makers to survive and thrive.