EV King Tesla – Where Did the Cash Go?

by Neal Dikeman, chief blogger

Since it’s launch, cleantech darling Tesla (NASDAQ:TSLA) has delivered huge revenue growth in the electric vehicle market.  With a market cap of over $20 billion, it’s more than a 1/3rd of that of the massively higher volume GM or Ford.  Largely the market cap has been driven by phenomenal growth numbers, 60% YoY revenues last in 2014, and the company forecasts 70% increase in unit sales YoY in 2015.

But let’s take a deeper look.

The Company trades at 7.5x enterprise value/revenues, and 26x price/book.  At the current market cap, it needs to deliver the same revenue growth for another 4-5 years before normal auto net profit margins would bring it’s PE into line with the the other top automakers.  Of course, that assumes no stock price growth during that time either!  Our quick and dirty assessment test:

Take 2014 revenues, roll forward at the YoY growth rate of 60%.  Take the average net profit margins and P/Es of the major autos (we used two groupings, 2-3% and 20-25, and 7-8% and 12-17), roll forward until the PEs align, see what year it is (2018-2020).   That’s our crude measure of how many years of growth are priced in.  And it puts Tesla at between a $20-$50 Billion/year company (7-15 current levels) before it justifies it’s current market cap.  Or c. 300,000-1.5 mm cars per year depending on price assumptions.  Up from 35,000 last year.

Does it have the wherewhithal to do that?

Tesla Financials

 Well, looks awfully tight.  The numbers technically work, continued growth will cure a lot of ills.  But while nominally EBITDA positive now, the company has been chewing cash in order to sustain future grow.  2014 burned nearly $1 billon in cash in losses, working capital and capex to anchor that growth, almost as much in cash burn as the company delivered in revenue growth.

Positive progress on working capital in 2013 disappeared into huge inventory and receivables expansion at the end of 2014, and interest on the new debt for the capital expansions alone chewed up 10% of gross margin, while both R&D and SG&A continue to accelerate, doubling in 2014 to outpace revenue growth by more than 50%.

The cash needs this time around were fueled by debt, which rose over $1.8 bil to 75% of revenues.  Overall liabilities rose even more.  Current net cash on hand at YE was a negative half a billion dollars, seven hundred million worse than this time last year.

The company will argue it is investing in growth, and you can see why it better be.  With almost every cost and balance sheet line currently outpacing revenue growth, at some point a company needs to start doing more making and less spending.

So yes, continued growth outlook is still exhilarating (depending on your views of the competition and oil price impact), but the cost to drive it is still extremely high.  I think we will look back and see that 2014 and 2015 were crucial set up years for Tesla, and the really proof in the pudding is still probably 24 months in front of us.  And my guess is Tesla will be back hitting the market for equity and debt again and again to keep the growth engine going before it’s done.

 The author does not own a securities position in TSLA.  Any opinion expressed herein is the opinion of the author, not Cleantech Blog nor any employer or company affiliated with the author.

Johnson Controls SAFT Lithium Batteries

By John Addison (10/12/10)

AT&T (T), Xcel Energy (XEL), Johnson Controls (JCI), Southern California Edison (SCE), and New York Power Authority have all ordered Ford Transit Connect Electric. These pure battery-electric vans have an electric charge range of 80 miles and are a great fit for many fleet, small business, and delivery applications. Although Nissan and Chevrolet are the center of EV attention, fleets are the early adapters of new vehicles.

In the United States, fleets control some 14 million vehicles. Some fleets placed initial orders for 10 or 20 Transit Connect Electrics; bigger orders could follow in 2011. JCI has ordered 20 Transit Connect Electrics to be part of its global fleet of 19,000 vehicles.

At the heart of these compact Ford electric vans are 28 kWh lithium battery packs made by a joint venture of SAFT and Johnson Controls, #1 maker of automotive batteries, a tier 1 auto supplier, and leader in building efficiency. The other day, I interviewed Mary Ann Wright, Vice President of Global Technology and Innovation Accelerator for Johnson Controls, to better understand the future of electric vehicles and advanced batteries. Johnson Controls is one of the 100 largest corporations in the U.S., with over 60,000 employees.

Partnerships are critical to success in electric vehicles. As the world’s largest manufacturer of lead-acid batteries, Johnson Controls (JCI) works closely with its material suppliers. To accelerate development of lithium batteries, R&D and manufacturing is a joint venture of Johnson Controls – SAFT (JCS).

For speed to market, Ford has partnered with Azure Dynamics (AZD), who integrates their drive system and the Johnson Controls – SAFT (JCS) lithium batteries into the Transit Connect chassis, which is also available in gasoline and CNG versions. My test drive of the Ford Transit Connect Electric demonstrated that it is practical for many fleet applications. JCI owns over 3% of AZD.

Since 2007, Ford and Johnson Controls have worked with leading electric utilities and EPRI. In 2007, Ford announced a partnership with Southern California Edison, the electric utility with the nation’s largest and most advanced electric vehicle fleet. The partnership is designed to explore ways to make plug-in hybrids more accessible to consumers, reduce petroleum-related emissions and understand issues related to connectivity between vehicles and the electric grid. For the 3-year study, Ford Escape Plug-in Hybrids have been heavily used. It will not be until 2012, that consumers can order plug-in hybrids from Ford.

Vice President Wright told me that driving lithium battery packs down in price from industry numbers like today’s $700/kWh to a future of $200/kWh would price electric car on par with cars powered with internal combustion engines. Progress is being made at every level. Manufacturing volume will be a key driver.

The drive for cost reduction will greatly benefit consumers and fleets; cost reduction initiatives will be a mixed blessing for battery suppliers. Last year, Ford had announced that JCS would supply the lithium batteries for its 2012 Plug-in Hybrid which Clean Fleet Report forecasts will be a new Ford Focus PHEV. Now JCS will not be the supplier. Ford has decided to make its own battery packs, and have different manufacturers compete to supply the cells. JCS is the winner for the Transit Connect Electric; LG Chem’s Compact Power is the winner for the Ford Focus Electric; competition has been intense for the PHEV. It appears that Ford has selected the PHEV cell supplier, but has not yet made the announcement.

In this decade, Nancy Gioia, Director Ford Global Electrification, told me that she would like to see Ford reach $250/kWh and have hybrid and electric vehicles represent 10 to 25% of total Ford sales. Ford is making no guarantees for such an ambitious program. Ford lithium cell providers are dealing with a tough customer that could deliver high volumes and continuous improvement.

For $28 billion Johnson Controls, Ford is an important customer, but only one customer. BMW and Mercedes are already using JCS lithium batteries in hybrids. In this decade, JCI sees the biggest opportunity in advanced start-stop, mild, and full hybrid vehicles; with pure battery-electrics being a smaller opportunity. By 2025, Ms. Wright only forecasts 3% of cars being full hybrid and electric.

Look inside a hybrid car and you will see two types of batteries: advanced nickel metal or lithium batteries for the electric motor and a 12V lead-acid battery for the auxiliaries. Lead-acid batteries will continue to be used in hundreds of millions of vehicles including hybrid and those with only an ICE. Johnson Controls continues to advance lead-acid batteries with new VARTA Start-Stop technology. These new batteries are optimal for the micro hybrids now on the road in Europe in over a million cars and coming to the USA. Turning off an engine reduces fuel consumption up to 12% when a vehicle is stationary, such as red lights and rush-hour gridlock. BMW was first to use the micro hybrid approach, now Volkswagen, Audi and others are including start-stop in some models.

When I toured Johnson Controls in Milwaukee, Wisconsin, last year, advancements in both lead-acid and lithium batteries were conspicuous. JCI told me that 98% of the materials in both battery technologies are recycled. As a world leader in energy efficient buildings, Johnson Controls will have the opportunity to repurpose lithium batteries in stationary applications before materials recycling.

Improved battery technology will continue to enable vehicles to use less fuel per mile, show us bluer skies with less air pollution, and reduce our current 97% dependency on petroleum as the only way to fuel a car.

By John Addison, Publisher of the Clean Fleet Report and conference speaker. The author has no position in the stocks mentioned in this article.

Ford Wins EcoGlobe Award for Technology in Fiesta ECOnetic

Ford wins a major environmental award for its new technology that makes engines more efficient and uses some hybrid technology, such as auto-start-stop and braking regen energy without the cost of a true hybrid electric. Ford has received a prestigious EcoGlobe award in recognition of its achievements in introducing environmentally-advanced, yet affordable technical solutions under the Ford ECOnetic Technologies programme.

The award – one of ten presented annually by an independent jury for what they consider are outstanding environmentally-friendly vehicle solutions – was presented to the Ford Fiesta ECOnetic as a representative model from the Ford ECOnetic Technologies range. With CO2 emissions of just 98 g/km, the Fiesta ECOnetic is one of Europe’s most fuel efficient, low CO2 passenger cars.

The Ford’s ECOnetic Technologies programme was launched earlier in 2010. It is a customer-driven initiative bringing together a range of vehicle features and technologies specifically targeting better fuel economy, reduced emissions and overall lower cost of ownership, including:

  • Ford EcoBoost – all-new petrol engines featuring turbocharging and direct injection technology to provide the performance of a larger displacement engine with the fuel economy and CO2 benefits of a smaller unit.
  • Ford Duratorq TDCi – a range of high-efficiency common-rail diesel engines which have been further improved to deliver even better fuel economy and lower CO2.
  • Ford PowerShift transmission – an advanced dual-clutch design, combining the efficiency, optimised gear ratios and driving enjoyment of a manual gearbox with the smoothness and ease-of-use of a conventional automatic.
  • Ford Auto-Start-Stop – automatically cuts the engine when at a standstill and restarts it as required by the driver to avoid unnecessary fuel use.
  • Smart Regenerative Charging (SRC) – creates electrical energy from braking movements to enhance existing power sources.
  • Active Grille Shutter – variable grille opening which reduces when the vehicle is at speed to improve air flow efficiency and lower fuel consumption.
  • Ford ECO Mode – an driver information system that helps educate the driver to achieve improved real-world fuel economy.
  • Electric Power Assist Steering (EPAS) – a more efficient steering system which reduces the drain on power reserves and thereby supports more efficient operation.
  • Gear Shift Indicator – advises the driver of the most efficient point for gear changes.

In addition to ECOnetic Technologies, Ford also continues to offer dedicated ultra-low emission ECOnetic models, including the EcoGlobe-winning Fiesta, the Focus, Mondeo and Transit. These Ford fuel economy hero vehicles feature unique technologies including longer gearing, specific engine calibrations, special aerodynamic packages, and ultra-low rolling resistance tires, in different combinations according to model.

Longer term, Ford ECOnetic Technologies will expand to include a range of other hi-tech features under development, including further weight reduction and aerodynamic improvements, electric, hybrid and plug-in hybrid electric vehicles, biofuel-capable vehicles, and hydrogen-powered vehicles.

Ford Focus Electric Cars from New Green Michigan Plant

By John Addison

Ford Focus EV Gets Green Plant

Ford’s (F) new Focus Electric Car and Plug-in Hybrid will be built in one of the auto industry’s greenest manufacturing plants. Ford is working with Detroit Edison (DTE) to install a 500-kilowatt solar photovoltaic panel system at Michigan Assembly. The system will be integrated with a 750-kw energy storage facility that can store two million watt-hours of energy using batteries.

The renewable energy captured by the project’s primary solar energy system will help power the production of fuel-efficient small cars, including Ford’s all-new Focus and Focus Electric going into production in 2011, and a next-generation hybrid vehicle and a plug-in hybrid vehicle coming in 2012. My test drive of the Ford Focus Electric.

A secondary, smaller solar energy system will be integrated at a later date to power lighting systems at Michigan Assembly. The combined systems are expected to give Michigan Assembly the largest solar power array in Michigan and save an estimated $160,000 per year in energy costs. The installation of the system begins later this year.

Although the 500kW does not match the megawatts of solar that Toyota (TM) uses in California operations, Ford is advancing automaker use of large scale energy storage, reuse of automotive lithium batteries, smart microgrid, and solar charging.

Michigan Assembly will operate on a blend of renewable and conventional electricity managed by Xtreme Power’s Dynamic Power Resource on-site energy storage and power management system. Xtreme Power, a venture capital backed firm in Austin, Texas, manufactures integrated power management, smart control, and storage systems from 500 kW to 100 MW. XP technology is unique in its ability to provide immediate power when needed through precision control and complex power capabilities (VARs), and the ability to time shift large amounts of power/energy, all at a relatively low lifecycle cost. This is the industry’s first large-scale solid-state power management system. The XP solution comprises four components integrated into a comprehensive system: (1) hyper-efficient energy storage; (2) proprietary power electronics that enable very high power at very high efficiency; (3) smart control system of specialized hardware and software; and (4) factory integration which ties the first three components together under stringent quality control settings.

The renewable energy collected by the solar system will go directly into the energy-efficient microgrid. When the plant is inactive, such as holidays, the collected solar energy will go into the energy storage system for later use, providing power during periods of insufficient or inconsistent sunlight. Michigan Assembly’s energy storage system will be able to recharge from the grid during off-peak hours when energy is available at a lower cost. This in turn will provide inexpensive power during peak operating hours when the cost per kilowatt-hour is higher, and reduce peak demand on the grid.

Ten Charging Stations using Solar Power

Ford also will install 10 electric vehicle-charging stations at Michigan Assembly to demonstrate advanced battery charging technologies using renewable energy and other smart-grid advances. The stations will be used to recharge electric switcher trucks that transport parts between adjacent facilities. Xtreme Power will provide an active power management system on the charging stations. Ford also will demonstrate the possibility for using electrified vehicle batteries as stationary power storage devices after their useful life as vehicle power sources is over.

“Ford is strongly committed to its sustainability strategy to support positive social change and reduce the environmental impact of its products and facilities,” said Sue Cischke, Ford group vice president, Sustainability, Environment and Safety Engineering. “Michigan Assembly is the latest Ford manufacturing facility to utilize renewable power for production.”

Cradle to Cradle

Drive a typical gasoline car in the U.S. and you will emit about 10 tons of CO2 every year. Drive a Ford Fusion Hybrid, however, and only emit 4.7 tons annually – half of a an average car, and only a third of a larger SUV, such as the 2010 Ford Expedition 4WD FFV, with 13.3 tons of CO2 annually.

Ford plans to offer customers families of cars with a variety of fuel efficient drive systems. “The new Ford Focus is a clear demonstration that our ONE Ford strategy is providing global consumers with great products that harness the best of Ford Motor Company,” said Alan Mulally, Ford’s president and CEO. “The efficiencies generated by our new global C-car platform will enable us to provide Ford Focus customers with an affordable product offering quality, fuel efficiency, safety and technology beyond their expectations.” Ford is planning on a Global C platform for 12 to 14 different vehicles with a volume of 2 million units per year. Such volume, common chassis and many common components, can give Ford improved profit margins and room to price hybrid and electric cars competitively.

Clean Fleet Report predicts that in 2012 an all-new Ford Focus family will be offered with choices that include a gasoline-sipping EcoBoost engine, a Focus Hybrid, a Focus Plug-in Hybrid, and Focus Electric. The hybrid, plug-in hybrid, and battery electric will all use lithium-ion batteries. All will offer better fuel economy than the current 30 mpg and lower emissions than the 2010 Focus with 6.5 tons of CO2 per year.

You can find the mileage and carbon emissions of most cars with the U.S. EPA and DOE’s valuable The EPA combined miles per gallon rating is based on 45% highway and 55% city driving. The carbon footprint is carbon dioxide equivalent (CO2e) based on 15,000 miles of driving, using the GREET 1.7 model.

Drive the new Ford Focus Electric with a 70 percent efficient electric drive using grid power, instead of that 15 percent efficient gasoline motor drive system, and emissions will be far below a Toyota Prius. Charge the Focus EV with solar or wind power and your source-to-wheels emissions of CO2 drops to zero.

But what about all the emissions associated with energy intensive manufacturing and mining of everything from iron to lithium (LIT)? Historically about 90 percent of a car’s emissions over its 15 years of use are from burning fuel, and only 10 percent from the mining and manufacturing. This is why environmental groups, the EPA, and websites like the Clean Fleet Report focus on source-to-wheels emissions, which is also called well-to-wheels due to our history of fuel from oil wells.

Ford, and other automakers, are following the classic practices of reduce, reuse, and recycle. As Ford electrifies hybrids and electric cars, many mechanical parts are replaced with lighter electric parts. Some steel gets replaced with lighter aluminum, plastic, and bioplastic. Hundreds of pounds are removed from a car, which allows it to go farther on less fuel. At end-of-life metals and parts are often recycled. Some lithium batteries will be repurposed in plants, renewable energy backup, and electric utility applications. Over 95 percent of auto battery materials are eventually recycled.

Ford’s new lean and green plant will build a new generation of cars, low in carbon footprint and high in industry impact.

By John Addison, Publisher of the Clean Fleet Report and conference speaker.

2010 Hybrid Cars with Best MPG

By John Addison (11/10/09, original post Clean Fleet Report)

The new 2010 model hybrid cars offered in the U.S. are destined to sell with gasoline prices rising. Toyota (TM) dominates the list including new models from Lexus. There are also impressive offerings from Honda (HMC), Ford (F), Nissan (NSANY), and Chevrolet (GMGMQ.PK). Your top 10 choices include hatchbacks that start at under $20,000 and stretch to roomy premium SUVs that cost over $40,000.

Toyota Prius continues to lead the field in fuel economy and lowest lifecycle greenhouse gas emissions. This perennial favorite midsize 4-door hatchback delivers 50 miles per gallon (mpg) and is lowest on the list with 3.7 tons of carbon dioxide equivalent for the EPA annual driving cycle. Yes, 3.7 tons of CO2e is a lot; but many cars, light trucks, and SUVs create three times that emission; to get lower emissions you would need a plug-in car. The hatchback design allows for more cargo, especially if you drop part or all of the 60/40 back bench seat. This year, Toyota is also putting 500 plug-in hybrid Priuses into fleet tests. 2010 Toyota Prius Review

Honda Civic Hybrid is a good alternative for those who want a traditional looking sedan that seats 5. This compact rates saves fuel at 42 mpg. At 4.4 annual tons of CO2e, this hybrid emits actually emits less greenhouse gases than its CNG cousin.

Honda Insight is a sporty four-door hatchback with an Ecological Drive Assist System. Although the Insight looks like the Prius, it is a bit smaller, lighter, and often $2,000 less than the Prius. The Insight will deliver 41 mpg combined, with annual emissions of about 4.5 tons of CO2e. Clean Fleet Report Test Drive

Ford Fusion Hybrid is appealing to those who want a made in America midsized sedan. This roomy 5-seater delivers 39 mpg and 4.7 tons of CO2e per year. The Fusion Hybrid and its first cousin the Mercury Milan Hybrid may travel up to 47 miles per hour in pure electric mode. The Advanced Intake Variable Cam Timing allows for more seamlessly transition between gas and electric modes, making for a smooth and quiet ride. Clean Fleet Report Test Drive The Mercury Milan Hybrid offers the same drive system and body, with upscale interior.

Lexus HS 250h is a stylish compact 4-seat sedan that delivers 35 mpg and 5.3 tons of CO2e per year. The Lexus brand lets your friends know that are using less petroleum by choice; you can afford a bit of luxury.

2010 Top 10 Hybrids for Best Fuel Economy:

1. Toyota Prius
2. Honda Civic Hybrid
3. Honda Insight
4. Ford Fusion Hybrid
5. Lexus HS 250h
6. Nissan Altima Hybrid
7. Toyota Camry Hybrid
8. Ford Escape Hybrid SUV
9. Lexus RX 450h SUV
10. Chevrolet Malibu Hybrid

Get more details about the Clean Fleet Report 2010 Top 10 Hybrids. Major auto shows are coming, so check back as we update the list in the months ahead.

By John Addison who publishes the Clean Fleet Report and speaks at conferences. He has no positions in any of the stocks mentioned. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

Ford Plans both Electric Vehicles and Plug-in Hybrids

By John Addison (8/24/09). Ford (F) is now taking orders for electric vehicles. By 2011, the Ford Motor Company will start taking orders for the new Ford Focus EV. Beyond 2011, Ford will offer the popular Focus in a variety of affordable options including hybrid-electric (HEV), plug-in hybrid (PHEV), and battery electric-vehicle (EV).

Although Nissan (NSANY) will take an early lead with EVs, and GM will beat Ford to market with a plug-in hybrid Chevy Volt, Ford will be fighting for market leadership with both electric vehicles and plug-in hybrids.

The Ford EV roadmap in this article is based on my interviews with Susan Cischke, Ford Group Vice President, Mike Tinskey, Plug-in 2009 Conference presentations, and my discussions with some of Ford’s utility partners.

2010 orders are likely to come from municipalities and other government agencies that will use the new Transit Connect light-duty van in a variety of applications from city maintenance to on-demand transit. Deliveries of these electric vehicles, made for Ford by Smith Electric Vehicles (TAN.L), will start in 2010. Transit Connect may also do well with small businesses and local delivery fleets.

It is the Ford Focus EV that captures the imagination of mainstream Americans eager to secure a zero-emission vehicle that they can take on freeways and travel up to 100 miles between charges. The new Ford Focus EV will be a 4-door sedan that seats five.

The Focus EV will be made in America. The lithium battery maker and specs are to be announced. Ford has expressed a preference for a battery whose cells that are made in America. Ford’s final battery decision may be influenced by federal funding.

Ford’s additional PHEV Plans in Clean Fleet Report.

Ford is investing $550 million to transform its Michigan Assembly Plant into a lean, green and flexible manufacturing complex that will build Ford’s next-generation Focus global small car along with a new battery-electric version of the Focus for the North American market. Both will be based on a new global C platform. The EV is being developed in partnership with Magna International (MGA).

Ford has been actively testing the plug-in hybrid Ford Escape with a number of utilities and partners. These tests have helped establish the standards necessary for electric vehicle success, such as the J1772 electrical connection that will be standard on Ford EVs.

Thanks to a new DOE award of $30 million, 50/50 matched, a total of $60 million will go into expanded deployment of Ford plug-in hybrids, electric vehicles, and infrastructure. Early pilots of the Ford Focus EV are likely to be part of this.

The new electric vehicles are smart EVs. Customers will be provided with charging options to save money. Drivers will be connected with traffic and location services and assisted with electronics that make driving safer. Passengers will have more information and entertainment options than ever. Like the new smartphones from Apple, Blackberry, Palm and others, the value of a full value of a smart car is in the networks. Just as smartphones can be purchased at a discount with network subscriptions, we may see similar offerings from car makers and their partners.

Subscription models are being explored where vehicles like the Ford Focus EV could be purchased, with the lithium battery and charging being offered as a subscription. Ford, Nissan, and other automakers are discussing such possibilities with electric utilities, financial institutions and others. Should a utility or JV own the batteries, then it would be easier to repurpose lithium batteries into less demanding stationary power back-up applications after the batteries decline in charge after several years of use.

Possibilities include 50/50 joint ventures and long-term secure financing. Because utilities are regulated, public utility commissions will be involved in approving new business models. If everyone gets there act together, which is certainly an “if,” the customer could be a big winner with an affordable EV and subscription offerings that cost less than monthly gasoline costs.

Under the leadership of CEO Alan Mulally, Ford has shown a new flexibility in partnering with suppliers, vehicle integrators, battery JV, electric utilities, financial institutions, and even information technology firms like Microsoft (MSFT). With global platforms, smarter cars, richer partnerships, and greater speed to market, customers will see some interesting new offerings in the next two years.

By John Addison. John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

Ford Returns to Profitability with Improved Mileage

By John Addison (7/23/09). Ford has returned to profitability, benefiting from increased market share which is the likely result of improved mileage. Ford earned almost $2.4 billion for the quarter, but it was the result of a large one-time gain associated with the debt reduction actions completed in April. The pre-tax operating losses were $424 million; an improvement of $609 million from year-ago results.

Ford has gained U.S. market share for January through June 2009. Wards Six month market share:

GM 19.8%
Toyota (TM) 16.1%
Ford (F) 15.9%
Honda (HMC) 11.1%
Chrysler 9.8%

Ford also gained share in Europe and Asia, boosted by the fuel efficient Fiesta.

In contrast with GM and Chrysler, Ford is the only U.S.-headquartered manufacturer with vehicles qualifying for the Clean Fleet Report Cars with the Lowest Greenhouse Gas Emissions. Both the Ford Fusion Hybrid and Ford Escape Hybrid are in the top 10 list.

Ford is on target to meeting CAFÉ with average fuel economy in 2010 being 20 % better than 2005.

The Focus will be increasingly important to Ford’s success as it lowers manufacturing cost with a global version and when it offers an electric version in 2011.

In 2012, the Ford Escape Hybrid, already the most fuel efficient SUV, will get a lot more efficient by also being available as a plug-in hybrid. The PHEV Escape Hybrid is already being tested in a number of fleets. By 2012, Ford will offer multiple

EcoBoost engines will be delivered in over 1 million vehicles globally, delivering better mileage through turbocharging and direct fuel injection.

Ford could have greater market share than GM by 2012, unless GM transforms its entrenched culture centered on large heavy vehicles as the only way to generate adequate profit margins. In the next few years, Ford will face increased competition with Toyota and Honda both offering hybrids for less than $20,000. Ford will also face intense EV competition with Nissan (NSANY), BYD, and a number of emerging electric vehicle makers.

In the future, oil price increases and oil shocks will deliver market share to makers who minimize consumption of petroleum fuels. Winners will build the best hybrids, plug-in hybrids, and electric vehicles. Ford is investing nearly $14 billion in the U.S. over the next seven years on advanced technology vehicles, including $5.9 billion in loans from the U.S. Department of Energy for advanced fuel-saving vehicles.

“In 10 years, 12 years, you are going to see a major portion of our portfolio move to electric vehicles,” Ford CEO Alan Mulally stated earlier this year. Now Ford is executing its electrification strategy.

Ford Q2 Earnings Presentation

Earnings Transcript

By John Addison. John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

Ford Grabs Market Share

If you are working at Ford (F), it looks like the downturn in auto sales is ending. In June, sales fell only 11 percent over a year ago. Optimism does not permeate all of Detroit; General Motors (GM) sales feel 33 percent for the month; Chrysler, 48 percent. Even Toyota (TM) U.S. sales were down 32 percent June over June last year.

Ford is the only one of the Big Three Detroit auto makers that avoided bankruptcy and a federal bailout.

Ford ended June with a 60-day supply of vehicles on hand, down 38 percent from a year ago. Fewer inventories could lead to improved profit margins. Those inventories will shrink with a new “cash for clunkers” program that provides added government discounts of up to $4,500 for trade-in vehicles getting less than 19 mpg. It’s not all rosy, however, with many potential buyers being unable to get an auto loan.

Fuel Economy

Oil prices have doubled – fuel economy is back in. Ford helps at the pump with new EcoBoost technology and hybrid technology. Ford is the only Detroit maker that was on Clean Fleet Report’s Vehicles with the Lowest Carbon Emissions.

June sales of the company’s hybrid vehicles totaled 3,649, up 91 percent versus a year ago. Ford will extend its current hybrid success with added models. During my recent test-drive of several vehicles that already meet the 2016 CAFE requirements, the midsized Ford Fusion Hybrid demonstrated that you can enjoy fuel economy in a larger car with comfort and safety. The Ford Fusion Hybrid has an EPA certified rating of 41 mpg in the city and 36 mpg on the highway. The car can be driven up to 47 mph in electric mode with no gasoline being consumed. Ford will start selling pure battery electric vehicles next year that will lower its fleet mileage average. CAFÉ

As gas prices increase, the Ford Ranger pickup sales also increased. The model with a 2.3L engine and stick shift gets the best gas mileage of any U.S. pickup at 23 mpg. Ford has the mileage champions in both pickups and SUVs.

The best mileage SUV on the market is the Ford Escape Hybrid with 32 mpg. In 2012, Ford will also offer a plug-in version of the Escape Hybrid that will blow-away the 35.5 mile standard.

Electric Future

The expansion of hybrid, plug-in hybrid, and battery-electric offerings will be helped by Ford recently securing $5.9 billion in federal loans with a lower 5 percent interest rate.

Ford’s first EV will be the new battery-electric Transit Connect vans. These city vans will appeal to green retailers and service companies that make deliveries and follow routes that match the 100 mile range of the electric vans. The vans are made in collaboration with Tanfield’s (TAN.L) Smith Electric are now selling in Europe and will start U.S. sales next year.

In 2011 Ford will offer a new battery-electric Focus sedan made in collaboration with Magna International (MGA). Now that most U.S. citizens live in urban settings, the idea of a primary or secondary car that never needs gasoline will have growing appeal.
In 2011 Ford will offer a new battery-electric Focus sedan made in collaboration with Magna International. Now that most U.S. citizens live in urban settings, the idea of a primary or secondary car that never needs gasoline will have growing appeal. Although Nissan will have a head start with thousands of freeway-speed electric vehicles already in use by U.S. customers, Ford could catch-up if it offers the Focus EV for less than $30,000.

The competition will boost revenues for Ford battery supplier Johnson Controls-SAFT; Nissan is in a li-ion JV with NEC.

In 2012, the Ford Escape Hybrid, already the most fuel efficient SUV, will get a lot more efficient by also being available as a plug-in hybrid. The PHEV Escape Hybrid is already being tested in a number of fleets.

“In 10 years, 12 years, you are going to see a major portion of our portfolio move to electric vehicles,” Ford CEO Alan Mulally stated earlier this year. Now Ford is executing its electrification strategy.

By John Addison. John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book about the future of transportation – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

New Cars that Already Meet 2016 Fuel Economy Standards

By John Addison. President Barack Obama announced that automakers must meet average U.S. fuel-economy standards of 35.5 miles per gallon by 2016. This will be an exciting opportunity for automakers that already deliver vehicles that beat 35.5 mpg such as the Ford (F) Fusion Hybrid, Mercury Milan Hybrid, Toyota (TM) Prius, Honda (HMC) Insight, Honda Civic Hybrid, and the Mercedes Smart Fortwo. You can buy these gas misers today. A number of other vehicles offered in the U.S. now come close to the 2016 standard, and will see mileage improvements next year.

In Europe, over 100 models can be purchased that meet the 2016 standards, thanks to the popularity of cars that are smaller, lighter weight, and often use efficient turbo diesel engines.

Over the next three years, dozens of exciting cars will be introduced in the United States. Here are some offerings that we are likely to see in the next one to three years from major auto makers.

Ford (F) will extend its current hybrid success with added models. During my recent test-drive of several vehicles that meet the 2016 requirement the midsized Ford Fusion Hybrid demonstrates that you can enjoy fuel economy in a larger car with comfort and safety. The Ford Fusion Hybrid has an EPA certified rating of 41 mpg in the city and 36 mpg on the highway. The car can be driven up to 47 mph in electric mode with no gasoline being consumed. Ford will start selling pure battery electric vehicles next year that will lower its fleet mileage average.

The best mileage SUV on the market is the Ford Escape Hybrid with 32 mpg. In 2012, Ford will also offer a plug-in version of the Escape Hybrid that will blow-away the 35.5 mile standard. Bringing the popular Fiesta to the U.S. with a 1.6L gasoline engine will also attract budget minded buyers looking for good mileage.

In discussing the new standards, Ford CEO Alan Mulally stated, “We are pleased President Obama is taking decisive and positive action as we work together toward one national standard for vehicle fuel economy and greenhouse gas emissions that will benefit the environment and the economy.”

General Motors (GM) plans to be the leader in plug-in hybrids starting with the Chevy Volt. It has a major opportunity to extend its E-Flex architecture to SUVs and trucks by 2016. For the price conscious buyer, the Chevy Spark hatchback with a 1.2L gasoline engine should deliver over 40 mpg.

There are almost 40,000 Chrysler GEM electric vehicles in use today. The GEM 25 mph speed limits them to only being popular in fleets, university towns, and retirement communities. Chrysler will extend its early U.S. electric vehicle leadership in 2010 with new freeway speed plug-in hybrids that can be driven 40 miles in electric mode, before engaging the gasoline engine – the Jeep Wrangler, an SUV, and the Town and Country Minivan. Over time, Chrysler can expand its ENVI family. Chrysler’s new stockholder Fiat will bring in exciting smaller cars and help expand the EV success.

Toyota (TM) will expand on the success of the Prius with more new hybrids. Since 2002, I have been driving a Prius that has averaged 41 mpg in real world driving that has included climbing hills with bikes on a roof rack and driving through snow with skis on the roof rack. The Prius will also be made available as a plug-in hybrid – hundreds of these PHEVs are now being tested by fleets. The modestly priced Yaris, which gets 32 mpg, is likely to also be offered as a hybrid that delivers over 40 mpg.

Honda (HMC) is likely to be the first maker to meet 2016 CAFÉ requirements, building on its historical leadership in fuel economy. My mother has easily achieved over 45 mpg with her Honda Civic Hybrid. Now Honda is going after the Toyota Prius with the Honda Insight. The popular Fit, which gets 31 mpg, is likely to also be offered as a hybrid offering over 40 mpg. Look for more high mileage offerings from both Honda and Toyota as they compete for hybrid leadership.

Nissan’s (NSANY) Altima Hybrid delivers an impressive 34 mpg. Beyond hybrids, Nissan is determined to be the leader in battery electric vehicles. Working with fleet consortiums and major electric utilities, next year Nissan may seed the market with thousands of freeway speed electric vehicles. The Nissan EVs have ranges of at least 100 miles per charge. Clean Fleet Report EV Test Drive

This article does not pretend to be a complete review of what is coming, rather a taste of what is here and what will soon be here from six major automakers. Given economic challenges, not all forecasts will happen. There will be surprises, more new models, and new model names. Not all plans will be executed as Chrysler deals with bankruptcy reorganization and as GM considers one.

Meeting the CAFÉ standards by 2016 will not be a slam dunk for all of the automakers, but they will make it. Historically, CAFE standards have not aligned with the EPA fuel economy determinations used in this article. For better and worse, flexfuel vehicles get artificially high numbers, making it easier for GM, Ford, and Chrysler to meet CAFE targets. Plug-in hybrid and EV ratings need to be finalized. To meet fleet average requirements, cars will need to average higher than 35.5; light-trucks and SUVs lower.

Trends to more efficient drive systems are a certainty. With oil prices now close to double the recent lows of earlier this year, these new vehicles bring important relief to every driver who wants to save at the pump.

John Addison publishes the Clean Fleet Report and details the future of transportation in his new book Save Gas, Save the Planet.

2010 Cars Deliver Performance and Fuel Economy

This is my first time to drive on a race track and I’m wondering if these are my final moments on planet earth. Here at the Mazda Raceway Laguna Seca I take the Andretti Hairpin and learn to accelerate in successive turns. After accelerating uphill, I enter “The Corkscrew” where I cannot see the sharp downhill turn to the left until I am in the middle of it. As I get into this sharp turn, I need to prepare for the sequence of curves that immediately follow. Yes, it’s a corkscrew.

I try to remember the coaching that I received. Hold the steering wheel with something less than a death grip. Breathe. Look ahead – but looking ahead at the top of the Corkscrew I only see blue sky. Looking ahead to my future, I only see darkness.

The 2009 BMW 335d that I am driving handles beautifully, offers more turbodiesel acceleration than I care to try, and I guarantee you that the brakes work.

After three laps, I exit the track, park the BMW, remove my helmet as I leave the car, and resist kissing the ground in front of real drivers. I have been invited to test drive new vehicles with the Western Automotive Journalists, even though I write about green cars and clean transportation. I long for yesterday.

Yesterday, I tested cars with good fuel economy on streets with posted speed limits. Drives included three cars that made the list of Top 10 Low Carbon Footprint Cars. Yesterday, the 20 mile test drives were along the ocean in Monterey and on beautiful tree lined roads where I could easily see the next turn.

The 2010 Ford (F) Fusion Hybrid easily seats five, has plenty of trunk storage, and actually delivers better mileage than the MINI due to Ford’s impressive hybrid drive system. The new Ford midsized sedan that I drove has an EPA certified 41 mpg rating in the city and 36 mpg on the highway. The base suggested price is $27,995.

It may prove to be popular with anyone considering the Toyota (TM) Camry Hybrid; Ford delivers equal room, safety, and comfort with better rated mileage. Although the Fusion Hybrid has a better mileage rating than the Camry Hybrid, that advantage is not always delivered in real world driving. Edmonds Test Drive

In theory, the Ford Fusion Hybrid can travel up to 47 miles per hour in electric mode; I could only sustain the engine-off mode when gliding downhill. Even on flat roads driving 25 mph, the engine would engage.

Ford does a nice job of encouraging drivers to get better fuel economy. The SmartGage had a display section that filled with green leaves as I drove with a light touch that reduced demands on the 2.5L engine. The Ford Fusion Hybrid delivered the smoothest driving experience of any hybrid which I have driven. I did not notice the transitions from gas to electric mode. The transitions were seamless.

Even better mileage was delivered by the 2010 Honda (HMC) Insight EX which I drove in Monterey. It is rated 43 mpg highway and 40 mpg city. The Insight’s combined EPA rating of 41 contrasts with the 2010 Prius expected rating of at least 50 mpg. The Honda Insight has an aerodynamic body similar to the Prius. Although the two five-door hatchbacks look similar, the Prius is a longer midsized car. In theory, the Honda Insight pricing starts at $19,800 which has pressured Toyota to offer a Prius with a base price only $2,000 higher. The 2010 Insight that I drove included upgrades such as a navigation system and six speaker audio system. The vehicle price, including pre-delivery service, was $23,770.

I started the Insight, and then touched the ECO button. Even in that mode, I had enough acceleration to get on any freeway in a hurry. The ECO mode helped me minimize demands on the 1.3L gasoline engine as I navigated the roads hugging Monterey’s dramatic coast. Like the Ford Fusion Hybrid, I was rewarded with a display of green leaves for my eco-driving behavior. Handling was smooth and a bit sporty.

Driving the Honda Insight was smooth and quiet even when I went up a sustained 16 percent grade, demonstrating that its electric motor is quite effective in blending power with the 98 hp engine.

Price will definitely be a factor in buyers deciding between the Honda Insight and the Toyota Prius. In some markets, such as California, another factor may be the ability to get an HOV sticker with the Insight. For my money, if I could get a larger more fuel efficient Prius for only $2,000 more, then I would get the Prius. On the other hand, if there was a $5,000 price differential at the dealer, then I would go with the Insight. All in all, both are wonderful cars.

If you want great fuel economy, few compromises, and driving pleasure, test drive the latest hybrids from automakers like Toyota, Honda, and Ford. The intensified competition between them is bringing better performance and safety and economy.

Complete Article including MINI Cooper test drive.

John Addison publishes the Clean Fleet Report and is the author of Save Gas, Save the Planet.

Ford Expands Hybrid Success to Electric Vehicles

By John Addison. Toyota’s (TM) global market share leadership has been helped by the success of its hybrids. Looking to a future that will increasingly emphasize fuel economy and lower emissions, Toyota will put 500 plug-in hybrid Priuses on the road in 2009.

Competition is just getting started in hybrids, plug-in hybrids, and electric vehicles. One company that Toyota must watch carefully is Ford (F). It is Ford with the world’s most fuel-efficient SUV – the Ford Escape Hybrid. It is Ford that is now selling a mid-sized hybrid which can be driven to 47 mph in electric vehicle mode – the Ford Fusion Hybrid. It is Ford that is successfully testing the Ford Escape Plug-in Hybrid with major electrical utilities across the nation. It is Ford, not Toyota, which will be selling commercial electric vehicles in the United States in 2010.

“In 10 years, 12 years, you are going to see a major portion of our portfolio move to electric vehicles,” Ford CEO Alan Mulally said at the Wall Street Journal ECO:nomics conference in Santa Barbara, California, this month. Ford will start selling commercial electric vehicle in 2010, a sedan EV in 2011, and a plug-in hybrid in 2012. “You’ll see more hybrids, but you will really see a lot more electric vehicles,” he said. Reuters

Last week, I discussed Ford’s plans with Nancy Gioia, Director, Sustainable Mobility Technologies and Hybrid Vehicle Programs at Ford.

This is the fifth year of success for the Ford Escape Hybrid and its cousins the Mercury Mariner Hybrid and Mazda Tribute Hybrid. The vehicle has enough passenger room and cargo space to be popular with families to taxi fleets. The SUV delivers an impressive 32 mpg. It is the only SUV that could make the list of Clean Fleet Report’s Top 10 Low Carbon Footprint Vehicles.

The new Ford Fusion Hybrid midsized sedan has an EPA certified 41 mpg rating in the city and 36 mpg on the highway, making it even more fuel efficient with less CO2e emissions than the Escape Hybrid. The Fusion Hybrid is powered by both an electric motor and by a 2.5L Atkinson-Cycle I-4 Hybrid engine. The advanced intake variable cam timing allows the Fusion and Milan hybrids to more seamlessly transition between gas and electric modes. The Fusion has a continuously variable transmission.

Fuel economy is not only a function of what we drive, but how we drive. Ford conducted a study that resulted in an average of 24 percent improvement in fuel economy when typical drivers were coached by eco-driving experts. With the Fusion, Ford introduces SmartGauge™ with EcoGuide, which coaches hybrid drivers to maximize fuel efficiency. In the future, SmartGauge will be included in a number of Ford vehicles.

In addition to the visual feedback with SmartGauge, the new Fusion Hybrid includes Ford’s MyKey™ , a programmable feature that allows drivers, parents, or fleet owners to limit top speed and audio volume of vehicles, and set speed alert chimes to encourage safer driving. Tire pressure monitoring is another new feature that helps improve mileage.

United States Infrastructure Company (USIC), a utility services business that operates a fleet of 3,500 vehicles nationwide, could benefit from using MyKey, said Phil Samuelson, USIC purchasing and asset manager. The company uses many Ford vehicles, and its drivers put an average of 24,000 miles on each vehicle every year. “Operating a fleet equipped with MyKey technology could be great for our business and our drivers,” Samuelson said. “By encouraging safety belt use and limiting the top speed and audio volume on our vehicles, we’d be better able to protect our employees and our fleet investment while potentially saving fuel, too.”

What Ford is not offering in its hybrids and plug-in hybrids is a flexfuel engine. The U.S. flexfuel offerings from any automaker have failed to deliver respectable mileage when running on gasoline. Typically their mileage is reduced 27 percent when running on the E85 ethanol blend.

Ford may make hybrids even more affordable in 2010 with a new Focus hybrid or other hybrid 4-door sedan. By 2012, Ford will have a new more fuel efficient hybrid drive system. Currently, Ford hybrids use NiMH batteries. The more expensive lithium-ion batteries are planned for the electric vehicle and plug-in hybrid offerings. By 2012, even the hybrid offerings may be lithium if a cost advantage can be secured. For 2012, Ford is evaluating battery technology and has not made final decisions, explained Nancy Gioia. Ford battery partner for the Escape PHEV is Johnson Controls-Saft (JCI, SGPEF).

A charging infrastructure will be critical to the success of plug-in hybrids and electric vehicles. “There are 247 million cars in the U.S., but only 53 million garages,” observes Richard Lowenthal, CEO of Coulomb Technologies. Because they need less range, urban dwellers are most likely to benefit from owning an EV, but least likely to own a garage. One U.C. Davis study determined that 80 percent of plug-in car owners want to charge more than once a day. That means we only have 12 percent of the charging stations that we need.

Electric utilities in many areas are not ready for the load of everyone in a neighborhood charging an EV, especially at peak-load hours. Utilities will want to encourage smart charging during the night, when excess electricity is often available. Since 2007, Ford has been working with utilities and research organizations to develop extensive data from demonstrations of prototype Ford Escape Plug-in Hybrids. Ford now has over ten partners including:

  • Southern California Edison
  • New York Power Authority
  • Consolidated Edison of New York
  • American Electric Power of Columbus, Ohio
  • Alabama Power of Birmingham, Ala.; and its parent, Atlanta-based Southern Company
  • Progress Energy of Raleigh, N.C.
  • DTE Energy of Detroit
  • National Grid of Waltham, Mass.
  • New York State Energy and Research Development Authority, a state agency.
  • Electric Power Research Institute (EPRI)

Utilities need to lead with a smart-charging infrastructure and communications standards. In addition to Ford’s official plug-in demonstrations, fleets and communities have converted Ford Escape Hybrids to be plug-in. Google uses Escape plug-ins that are solar charged. Xcel is evaluating vehicle-to-grid in its Smart Grid City.

Drivers of the demonstration Ford Escape PHEV will make far fewer trips to the gas station. It uses common household current (120 volts) for charging, with a full charge of the battery completed within six to eight hours. Look for faster charging 220 volt on-board charger in the future. When driven on surface streets for the first 30 miles following a full charge, the Ford Escape PHEV can achieve up to 120 mpg – roughly 4.5 times its traditional gas internal combustion engine-powered counterpart. A fully charged Ford Escape PHEV operates in two modes, electric drive and blended electric/engine drive.

Commercial sales of the Ford Escape PHEV are planned for 2012. Ford is not waiting until 2012 to start selling battery electric vehicles.

In 2010, Ford also plans to begin sales of zero-emission battery-electric vans. To speed time to market, Ford will be collaborating with Tanfield’s Smith Electric Vehicles to offer battery-electric versions of the Ford Transit and Transit Connect commercial vehicles for fleet customers in the UK and European markets. Smith Electric Vehicles will build the Transit Connect in Kansas City, Missouri.

Perhaps the biggest opportunity is in offering a 4-door sedan that can achieve freeway speeds and has a range of at least 100 miles. In the typical U.S. household with two vehicles, one of those vehicles almost never travels over 40 miles in a day. In 2011, using Magna International (MGA) to do the power system assembly, Ford will offer a C-sized 4-door sedan electric vehicle with both 110 and 220 volt on-board charging. The battery supplier is to be determined.

Through continued advances and strategic partnerships in hybrid-electric, plug-in hybrid, and battery-electric vehicles, Ford is positioned to compete and even lead in growth segments of the auto industry.

John Addison publishes the Clean Fleet Report and is the author of Save Gas, Save the Planet.

Ethanol – the Good, the Bad, the Ugly, the Beautiful

The Good

By John Addison. The 9 billion gallons of ethanol that Americans used last year helped drive down oil prices. For those of us who fuel our vehicles with gasoline, as much as 10 percent of that gasoline is ethanol. The Energy Independence and Security Act of 2007 requires that more biofuel be used every year until we reach 36 billion gallons by 2022.

Reduced oil prices are good. We can go from good to great, if we move past fuel from food and haste to fuels from wood and waste. Although the economics do not yet favor major production, pilot plants are taking wood and paper waste and converting it to fuel. Other cellulosic material is even more promising. Some grasses, energy crops, and hybrid poplar trees promise zero-emission fuel sources. These plants absorb CO2 and sequester it in the soil with their deep root systems. These plants often grow in marginal lands needing little irrigation and no fertilizers and pesticides, standing in sharp contrast to the industrial agriculture that produces much of our fuel.

Cellulosic biofuels are becoming economic reality. Norampac is the largest manufacturer of containerboard in Canada. Next generation ethanol producer TRI is not only producing fuel, its processes allow the plant to produce 20% more paper. Prior to installing the TRI spent-liquor gasification system the mill had no chemical and energy recovery process. With the TRI system, the plant is a zero effluent operation, and more profitable.

A Khosla Ventures portfolio company is Range Fuels which sees fuel potential from timber harvesting residues, corn stover (stalks that remain after the corn has been harvested), sawdust, paper pulp, hog manure, and municipal garbage that can be converted into cellulosic ethanol. In the labs, Range Fuels has successfully converted almost 30 types of biomass into ethanol. While competitors are focused on developing new enzymes to convert cellulose to sugar, Range Fuels’ technology eliminates enzymes which have been an expensive component of cellulosic ethanol production. Range Fuels’ thermo-chemical conversion process uses a two step process to convert the biomass to synthesis gas, and then converts the gas to ethanol.

Range Fuels in Georgia is building the first commercial-scale cellulosic ethanol plant in the United States. Phase 1 of the plant is scheduled to complete construction in 2010 with a production capacity of 20 million gallons a year. The plant will grow to be a 100-million-gallon-per-year cellulosic ethanol plant that will use wood waste from Georgia’s forests as its feedstock.

The Bad

Over one billion people are hungry or starving. Agricultural expert Lester Brown reports, “The grain required to fill an SUV’s 25-gallon tank with ethanol just once will feed one person for a whole year.”

Corn ethanol that is transported over 1,000 miles on a tanker truck, and then delivered as E85 into a flexfuel vehicle that fails to deliver 20 miles per gallon is bad. GM and Ford have pushed flexfuel vehicles that can run on gasoline or E85, which is a blend with as much as 85 percent ethanol. For the 2009 model year, the best rated car running on E85 in the United States was the Chevrolet HHR using a stick-shift, with a United States EPA gasoline mileage rating of 26 miles per gallon, and an E85 rating of only 19 miles per gallon.

In other words, if you passed on using E85 and drove a hybrid with good mileage, you would double miles per gallon and produce far less greenhouse gas emissions than any U.S. flexfuel offering. Top 10 Low Carbon Footprint Four-Door Sedans for 2009

The problem is not the idea of flexfuel. You can get a flexfuel vehicle with good mileage in Brazil. The problem is that GM and Ford used their flexfuel strategy as an eay way out, instead of making the tougher choices to truly embrace hybrids and real fuel efficiency. Flexfuel buying credits and ethanol subsidies have created incentives to buy cars that fail to cut emissions.

A new paper – Economic and Environmental Transportation Effects of Large-Scale Ethanol Production and Distribution in the United States – documents that the cost and emissions from transporting ethanol long-distance is much higher than previously thought. Ethanol is transported by tanker truck, not by pipeline, although Brazil will experiment with pipeline transportation.

The Ugly

It’s a tough time to make money with ethanol. Major players, like Verasun, are in bankruptcy. For the industry, stranded assets are being sold for pennies on the dollar. With thin margins, low oil prices, and high perceived risk, it is difficult to get a new plant financed.

Activists worry about oil refiners, such as Valero, offering to buy ethanol producers such as Verasun. But oil companies can bring needed financing, program management, and blending of next generation biofuels with existing petroleum refined gasoline, diesel, and jet fuel.

Government mandates for more ethanol do not match today’s reality. Subsidies to industrial corn agriculture are not good uses of taxpayer money. Encouraging federal, state, and local governments with their 4 million vehicles to give priority to flexfuel vehicles with lousy mileage is government waste.

Not all government help is misplaced. Range Fuels large-scale cellulosic ethanol production was helped with an $80 million loan guarantee. The loan guarantee falls under the Section 9003 Biorefinery Assistance Program authorized by the 2008 Farm Bill, which provides loan guarantees for commercial-scale biorefineries and grants for demonstration-scale biorefineries that produce advanced biofuels or any fuel that is not corn- based.

The Beautiful

Beautiful is the transition to electric drive systems and the development of next generation biofuels. Last year, Americans in record numbers road electric light-rail in record numbers. In 2008, Americans drove 100 billion miles less than 2007. Americans also drove 40,000 electric vehicles.

Critics and special interests try to stop the shift to electric vehicles by wrongly stating that if there is coal power used, then there are no benefits. Mitsubishi estimates that its electric vehicle is 67 percent efficient, in contrast to a 15 percent efficient gasoline vehicle. Efficient electric drive systems lower lifecycle emissions. With the growth of wind, solar, geothermal, and other renewables, lifecycle emissions from electric transportation will continue to fall. For example, my main mode of transportation is electric buses and rail that use hydropower. My backup mode is a Toyota Prius that I share with my wife.

Long-term we will continue to see the growth of electric drive systems in hybrid cars, plug-in hybrids, battery electric, fuel cell vehicles, light-rail, and high-speed rail. Over decades, the use of internal combustion engines will decrease, but the transition will take decades, especially for long-haul trucks. During these decades we can benefit from next generation biofuels that will replace corn ethanol and biodiesel from food sources.

Shell has a five-year development agreement with Virent, which takes biomass and converts it to gasoline – biogasoline. Gasoline, after all, is a complex hydrocarbon molecule that can be made from feedstock other than petroleum. Unlike ethanol, biogasoline has the same energy content as gasoline. Unlike cellulosic ethanol alternatives, Virent produces water using a bioforming process, rather than consuming valuable water. Virent has multi-million dollar investments form from Cargill, Honda, and several venture capital firms. Biogasoline will be its major initial focus. Its technology can also be used to produce hydrogen, biodiesel, and bio jet fuel.

Sapphire is an exciting new biofuels company backed with over $100 million investment from firms such as ARCH Venture Partners, the Wellcome Trust, Cascade Investment, and Venrock. The biotech firm has already produced 91-octane gasoline that conforms to ASTM certification, made from a breakthrough process that produces crude oil directly from sunlight, CO2 and photosynthetic microorganisms, beginning with algae.

The process is not dependent on food crops or valuable farmland, and is highly water efficient. “It’s hard not to get excited about algae’s potential,” said Paul Dickerson, chief operating officer of the Department of Energy’s Office of Energy Efficiency and Renewable Energy “Its basic requirements are few: CO2, sun, and water. Algae can flourish in non-arable land or in dirty water, and when it does flourish, its potential oil yield per acre is unmatched by any other terrestrial feedstock.”

Scale is a major challenge. Producing a few gallons per day in a lab is not the same as producing 100 million gallons per year at a lower cost than the petroleum alternative. Yet, some of our best minds are optimistic that it will happen in the next few years. We will see fuel from marginal lands, from crops and algae that sequester carbon emissions. The fuel will blend with existing gasoline, diesel, and jet fuel, and run in all engines, not just those with low mileage.

Some think that such a transition is as impossible as an interception with a 100 yard run for a touchdown in a Superbowl. It is exciting when the impossible happens.

John Addison is the author of the new book – Save Gas, Save the Planet – which is now available at Amazon. He publishes the Clean Fleet Report.

Ford Partners to Commercialize Electric Vehicles

By John Addison. Ford will introduce a battery-only commercial van in 2010, followed by a passenger car built on the same technology in 2011, and exciting plug-in vehicles by 2012. To accelerate commercialization, Ford will partner with leaders in drive systems, lithium batteries, specialty electric vehicles, and electric utilities.

Ford will build on its existing success with the Ford Escape Hybrid, the most fuel-efficient SUV on the market, and the Ford Fusion Hybrid, an impressive mid-sized sedan that ranks in the Clean Fleet Report’s Top 10 Sedans.

Last summer, I met with Ford’s Nancy Gioia, Director, Sustainable Mobility Technologies and Hybrid Vehicle Programs, and Greg Frenette, Chief engineer for research and advanced technologies. They discussed Ford’s commitment to continued improvements in fuel economy with gas turbo direct injection (GTDI), lighter vehicle weight without any sacrifice in safety, transmission efficiency, and increased use of electric drive systems. Electric vehicles and plug-in hybrids are definitely in Ford’s future. In fact, Nancy Gioia, has been driving her own Ford Escape Plug-in Hybrid.

The Ford Escape Plug-in Hybrid has been successfully in a number of fleet and research environments. One is Boulder, Colorado, which is becoming Smart Grid City. Working with a major utility, Xcel Energy, residents hope to lower their utility bills, improve energy efficiency, and develop city-wide support for electric vehicles and plug-in hybrids.

University of Colorado Chancellor Bud Peterson and his wife, Val, were the first to let Xcel transform their home to be part of Smart Grid City. Xcel put solar panels on the house, gave them a new smart meter for vehicle charging, and a Ford Escape Hybrid which is converted to have vehicle-to-grid capability. Vehicle-to-grid (V2G) technology is a bi-directional electric grid interface that allows an electric vehicle to take energy from the grid or put it back on the grid. When fully charged, their car plug-in hybrid batteries have enough power to keep their home running for days by using V2G.

Seven more electric utility providers are joining the Ford and Electric Power Research Institute to expand real world testing with Ford Escape PHEVs. Utility partnerships and industry standards will be critical to the expansion of a smart-charging infrastructure and to the long-term viability of V2G.

Ford will have Johnson Controls-Saft develop an advanced lithium-ion battery system to power Ford’s first commercial plug-in hybrid (PHEV). The lithium-ion battery system that Johnson Controls-Saft is designing and manufacturing for Ford includes cells, mechanical, electrical, electronic, and thermal components. Initially the cells will be produced at the supplier’s production facility in France, but the system will be assembled in the United States. The five-year supply agreement includes delivery for committed production in 2012 with a target of at least 5,000 units per year.

Commercial sales of the Ford Escape PHEV are planned for 2012. A fully charged Ford Escape PHEV operates in two modes, electric drive and blended electric/engine drive. It uses common household current (120 volts) for charging, with a full charge of the lithium-ion battery completed within 6 to 8 hours. When driven on surface streets for the first 30 miles following a full charge, the Ford Escape PHEV can achieve up to 120 mpg. This 30-mile range fits the average daily needs of most U.S. drivers.

In 2010, Ford also plans to begin sales of zero-emission battery-electric vans. To speed time to market, Ford will be collaborating with Tanfield to offer battery-electric versions of the Ford Transit and Transit Connect commercial vehicles for fleet customers in the UK and European markets. Tanfield’s Smith has over 100 electric trucks and delivery vans in service with customers today. More details may be announced at the Chicago Auto Show this month.

Battery-electric vans are well suited for many applications where ranges are limited and frequent stopping provides for regenerative braking. USPS has used electric postal vehicles for years. FedEx Express has ordered 10 Modec electric commercial vehicles for use in the United Kingdom.

At the Detroit Auto Show, Ford was showing a new battery-electric sedan developed jointly with Magna International with a 23kWh lithium battery pack. Commercial sales are planned for 2011 for a vehicle similar in size to the Ford Focus. Ford will compete with hundreds of battery-electric vehicle competitors including smaller specialty vehicle makers and Nissan, which is determined to be the early volume leader in freeway-speed electric vehicles. Ford will also be competiting with the plug-in Prius and Chevy Volt.

Given the success of Ford and Mercury hybrids, Ford is positioned to do well as it expands into these plug-in hybrid and battery-electric offerings. Success will lead to success, with larger and smaller Ford EVs being likely past 2012.

John Addison publishes the Clean Fleet Report. His new book – Save Gas, Save the Planet – will be available in paperback and ebook on March 25 at Amazon and other booksellers.

2010 Prius Delivers Record Mileage and Accelerates Plug-in Plans

By John Addison. Toyota achieves a record 50 miles per gallon with the new 2010 Prius, which just made its formal debut at the North American International Auto Show. This article also covers Toyota’s latest plug-in hybrid and EV announcements.

Since the Prius was first went on sale in Japan in 1997, continuous improvements have been made. My 2002 Prius has a combined EPA rating of 41, and that has been its actual mileage. Newer models are rated at 46 mpg. The new 2010 should be rated at 50 miles per gallon, or better. Toyota

In addition to normal driving, Prius now comes with three selectable modes – EV, Eco and Power – to accommodate a wide range of driving conditions.

Hybrid components like the inverter, motor, and generator are now smaller and lighter. The new midsized 2010 Prius improves fuel efficiency with a 0.25 coefficient of drag making it the world’s most aerodynamic production vehicle. Hybrid components like the inverter, motor, and generator are now smaller and lighter. The new beltless 1.8-liter, 4-cylinder gas engine with 98 horsepower, runs at lower RPMs at highway speeds for better fuel efficiency and improved uphill performance. An exhaust heat recovery system, exhaust gas recirculation, and an electric water pump contribute to a more efficient hybrid system with a net horsepower rating of 134.

An exciting new option is the solar moonroof using Kyocera PV that automatically powers a ventilation system on hot days. This system allows fresh air to circulate into the vehicle, cooling down the cabin so that the A/C doesn’t have to work as hard, conserving battery power. The solar roof will be paired with a remote air-conditioning system that is the first in the world to run on battery power alone. LED head lamps are another exciting energy saving option.

The Prius will face increased competition. The new Honda Insight 4-door sedan, 5-seater, with an Ecological Drive Assist System is expected to be priced for thousands less than the Prius. Honda will start selling the Insight in North America in spring 2009. The Insight will have a combined EPA rating of 41 miles per gallon, over 20 percent less than the 2010 Prius.

The new Ford Fusion Hybrid midsize 4-door sedan will be on sale in the US this next spring, with an EPA certified 41 mpg rating in the city and 36 mpg on the highway. The Fusion Hybrid and Mercury Milan Hybrid may travel up to 47 miles per hour in pure electric mode. The Advanced Intake Variable Cam Timing allows the Fusion and Milan hybrids to more seamlessly transition between gas and electric modes.

Toyota is also accelerating its roll-out of plug-in hybrids. Beginning in late 2009, Toyota will start global delivery of 500 Prius plug-in hybrids powered by lithium-ion batteries. Of these initial vehicles, 150 will be placed with U.S. lease-fleet customers.

The first-generation lithium-ion batteries powering these plug-in hybrids will be built on an assembly line at Toyota’s Panasonic EV Energy Company battery plant, a joint-venture production facility in which Toyota owns 60 percent equity. During its development, the new Prius was designed and engineered to package either the lithium-ion battery pack with plug-in capability, or the nickel-metal hydride battery for the conventional gas-electric system.

Toyota plans to make a hybrid drive system optional on all vehicles by 2020. At the North American International Auto Show, Toyota confirmed its plan to launch a battery-electric vehicle (BEV) by 2012. The FT-EV concept shares its platform with the revolutionary-new iQ urban commuter vehicle. Toyota continues to give customers an increasingly exciting selection of fuel-efficient hybrids, plug-in hybrids, and electric vehicles.

John Addison publishes the Clean Fleet Report. His new book – Save Gas, Save the Planet – goes on sale March 25.

Low Carbon Footprint Four-Door Sedans

By John Addison. The four-door sedan continues to be a popular vehicle for fleets and for individuals. These sedans often deliver the right amount of space for 4 or 5 passengers and enough cargo space for a taxi. The following 10 four-door sedans have the lowest greenhouse gas emissions per mile of any vehicles available for volume commercial sale in 2009. In many cases, they also have the best fuel economy. Most are already selling in quantity. In a few cases, we are betting that the manufacturer will sell 1,000 to fleets by the end of 2009. Buying these clean cars often gives fleets tax breaks and special funding opportunities.

Reduced greenhouse gas emissions are becoming a priority with fleet managers and millions of conscientious consumers. These Top 10 Low Carbon Footprint Four-Doors are listed from lowest to highest in carbon footprint.

  1. Toyota Prius
  2. Honda Insight
  3. Honda Civic Hybrid
  4. Toyota Camry CNG Hybrid
  5. Ford Fusion Hybrid
  6. Nissan Altima Hybrid
  7. Honda Civic CNG
  8. Toyota Camry Hybrid
  9. Toyota Yaris
  10. Chevrolet Aveo

Fleets are also early adopters of vehicles with even less emissions including electric vehicles, hydrogen fuel cell, plug-in hybrid conversions, and diesel hybrid concept cars. Because these are not offered for commercial volume sale, they are not part of this Top 10 Four-Door Sedan list. Electric and alt-fuel vehicles are also covered in detail at Clean Fleet Report.

The Toyota Prius continues to lead the four-door sedan field in fuel economy and lowest lifecycle greenhouse gas emissions. This perennial favorite midsize is lowest on the list with 4 tons of carbon dioxide equivalent for the EPA annual driving cycle; combined fuel economy is 46 mpg. Yes, 4 tons of CO2e is a lot; by comparison the 2009 Lamborghini Murcielago rates at 18.3 tons and only gets 10 mpg. Sorry fleet managers, you’ll need to take that Lamborghini out of the budget. Watch for new announcements from Toyota at the Detroit and Chicago Auto Shows, including a solar roof option to power accessories and thereby boost mileage. Prius

The new Honda Insight four-door sedan with an Ecological Drive Assist System is expected to be priced for thousands less than the Prius. Honda will start selling the Insight in North America in spring 2009. Honda is setting expectations that mileage will be similar to the Honda Civic Hybrid. Honda Insight

The Honda Civic Hybrid compact rates at 4.4 tons of CO2e for the EPA annual driving cycle and a combined 42 mpg. Civic Hybrid

The Toyota Camry CNG Hybrid was presented to me as a concept car at the LA Auto Show. Should gas prices start climbing as summer approaches, then Clean Fleet Report is betting that Toyota will make this available to fleets. A similar move happened 10 years ago in 1999 when Toyota marketed a CNG Camry to fleet customers in California. Clean Fleet Report makes an unofficial estimate that emissions will be 4.6 tons of CO2e for the EPA annual driving cycle, based on achieving 32 mpg combined. Camry CNG Hybrid

The Ford Fusion Hybrid will be the most fuel-efficient midsize car on sale in the US by next spring, with an EPA certified 41 mpg rating in the city and 36 mpg on the highway. Clean Fleet Report makes an unofficial estimate that emissions will be 4.8 tons of CO2e for the EPA annual driving cycle. The Fusion Hybrid and Mercury Milan Hybrid may travel up to 47 miles per hour in pure electric mode. The Advanced Intake Variable Cam Timing allows the Fusion and Milan hybrids to more seamlessly transition between gas and electric modes. Green Car Congress

Cleanfleet Report with discussion of other Low Carbon Vehicles

If you are planning to buy any four-door sedans, this list may be a good starting point. The focus is on low CO2e emissions and likely commercial availability. Some will need larger sedans, while others will need affordable small cars, including small station wagons and two-doors which are not part of the list. Executives and sales managers that once required luxury sedans may now insist on one of the green alternatives in the Clean Fleet Report Top 10 Low Carbon Footprint Four-Door Sedans for 2009.

John Addison publishes the Clean Fleet Report. His new book, Save Gas, Save the Planet, will be published March 25, 2009.

A Better Strategy for Detroit: Electric Drive not Flexfuel

In 2006, Detroit held high hopes of being profitable by selling millions of flexfuel vehicles. The vehicles are named flexfuel because they can be fueled with either E85 ethanol or with gasoline. It cost little extra to make these flexfuel vehicles. The flexfuel modifications were not made to all engines. They were made in bigger engines for SUVs, trucks, and big cars with better profit margins, but subpar fuel economy. Millions of flexfuel vehicles were sold.

Thousands of E85 stations appeared, primarily in corn growing states. A federal law was passed requiring production of 36 billion gallons of biofuel to be produced by 2022. Executive orders gave preference to buying flexfuel vehicles for the fleet of 4 million federal, state, and local vehicles. As food prices soared, one billion people struggled to afford food. The law was modified to requiring 16 billion of the 36 billion gallons to be from cellulosic sources. Biofuel 2.0

Recently at the Los Angeles Auto Show, I saw flexfuel vehicles extensively displayed in GM and Ford booths. They are also pilling-up in at auto dealers throughout the nation. These flexfuel vehicles fail to delivery the fuel economy that people are now demanding.

Although Detroit automakers sell flexfuel vehicles with good mileage in Brazil, in the United States, the best EPA mileage rating for a vehicle using E85 is 19 miles per gallon.

As we approach 2009, transportation is beginning a major shift away from the internal combustion engine to electric drive systems. Just as downloadable music disrupted CD sales, just as mainframe computing gave way to distributed computing, transportation is shifting to a new electric-drive paradigm.

At the Auto Show crowds were excited by new electric vehicles, including plug-in hybrids and fuel cell vehicles. Crowds surrounded BMW’s Mini E, the freeway-speed battery electric version of the Mini Cooper with a 150 mile range. Nissan was showing off its Cube and talking about making 100 mile range battery electric vehicles in volume, with fleet quantities in 2010. Mitsubishi’s iMiEV was shown as is being put into trail at the electric utility SCE.

Big automakers were also displaying fuel cell vehicles that extend the range and speed the fueling time for electric vehicles. Chevrolet, Daimler, Honda, and Toyota are each putting over 100 of their hydrogen vehicles into daily fleet and personal use. Toyota also has big plans for plug-in hybrids. Look for new announcements in Chicago this coming February.

GM continued to generate excitement with its Chevy Volt, a beautiful sporty sedan with a range of 40 miles in electric mode and hundreds of added miles using a small gasoline engine to extend range.

Chrysler was demonstrating four different electric vehicles at the L.A. Auto Show. The popular low-cost battery electric Chrysler GEM has now passed 38,000 in use in the United States, with sales continuing to do well. Although it is limited to 25 mph and a 40 mile max range, the bigger new Chyrsler ENVI electric vehicles get from 0 to 60 in as little as 5 seconds with EVs and plug-in hybrids that include Jeeps, mini-vans, and sports cars. Chrysler Details

The full transition to electric transportation may take 40 years, but it is unstoppable. The fuel of choice is shifting from foreign oil to our own renewable energy resources. Over 40,000 people now drive electric vehicles in the United States. Most are the 25 mph types, not the $100,000 Teslas, but in 2010 several affordable freeway speed choices will be offered by Nissan, Chrysler, GM, Toyota, and dozens of exciting smaller companies.

Although millions of electric vehicles will displace cars with gasoline engines, the internal combustion engine will be with us for decades in hybrids, plug-in hybrids, and heavy-duty trucks. Using new biofuel blends in these engines will help us achieve energy security. Biofuels from cellulosic sources will help moderate damaging greenhouse gas emissions. Biofuels are not a panacea; rather, they are an important transitional solution for the next decades.

Currently, 142 billion gallons of gasoline are consumed annually in the United States. In ten years, consumption could moderate to 120 billion gallons annually, even with population growth, due to these factors: CAFÉ fuel efficiency standards, replacement of some gasoline engines with more efficient turbo diesel, growth of electric vehicles, growing use of commute programs, growing use of trains and transit, and reduced vehicle miles traveled.

Fuel refiners and engine manufacturers could agree on standards so that 20 percent of gasoline could be from ethanol and other approved next generation biofuel. This 20 percent would be 24 billion gallons annually of fuel from biomass, not from petroleum. Flexfuel vehicles that deliver under 30 mpg are not needed. A new E85 infrastructure is not needed.

The United States can regain its world leadership in transportation by investing in future solutions, not the failed strategies of the past. Millions of jobs can be created in public transportation, high-speed rail, electric cars, hybrid electric heavy vehicles, renewable energy, and next generation biofuels that can be blended with existing gasoline and diesel.

John Addison publishes the Clean Fleet Report and speaks at conferences. His new book, Save Gas, Save the Planet, goes on sale March 25.

General Motors Bailout

Op-Ed by John Addison (11/17/08). On September 24, Congress approved a $25 billion bailout for GM, Ford, and Chrysler. “It seemed like a lot when we first started pushing this,” says Democratic Sen. Debbie Stabenow of Michigan, one of the bill’s sponsors. “Suddenly, it seems so small.” The three troubled automakers are already back in Washington D.C. asking for another $25 billion.

A couple of weeks ago, GM said that the future of our nation depended on it getting added billions so that it could buy Chrysler. GM has changed its mind. It just wants taxpayers to give the Detroit three another $25 billion. The problem is that the total of $50 billion is paid by taxpayers like you and me.

Congress would do well to have some national goals for the $50 billion, not goals set by auto lobbyists. Goals include America’s need to become competitive with the world if we hope to create more jobs and end this recession. Workers need help by either keeping their jobs or by getting new jobs. Americans need cars that cost less at the pump and better alternatives to always using a car. America needs to be energy secure, not desperately dependent on oil. To meet these goals, several alternatives are being considered:

  • Another $25 billion with no strings attached.
  • Let GM reorganize under Chapter 11 bankruptcy.
  • Boost consumer auto purchases with tax credits for buying vehicles with excellent fuel economy.
  • Invest the $25 billion in rail and transit.

When Chrysler got its 1980 loan guarantee, Lee Iacocca cut his annual salary to a dollar and slashed the wages of other top workers by 10 percent. The tax payers never paid a cent. It was a $1.5 billion loan guarantee.

This time around, Chrysler will be fine. Chrysler President Jim Press, when talking in September at a Western Automotive Journalist meeting, stated, “We need a new business model based on one word – Reality.” The new management team at Chrysler inherited a 4 million car per year overhead with sales falling to one million per year. Chrysler is privately owned by Cerberus Capital Management. Chrysler has been actively downsizing to be smaller, agile and profitable.

Ford is also moving to a business model that matches the name of its best selling car – Focus. In recently discussing its third quarter results, Ford stated that it remains on track to achieve $5 billion in cost reductions in North America by the end of 2008 compared with 2005. After a quarterly pre-tax loss of $2.7 billion, Ford had overall liquidity of $29.6 billion. The company promised shareholders further cost cuts and cash improvements.

In his November 17 Wall Street Journal article, Michael Levine discusses why Chapter 11 bankruptcy is the best option for GM. Chapter 11 would allow GM to be more competitive with Toyota, which now has now the world leader in market share. Over the years, GM has lost about two-thirds of its market share. Only with bankruptcy can GM be free of restrictions that prevent it from being competitive. It has 7,000 dealers compared to Toyota’s 1,500 successful dealers. GM has enormous pension and health care costs that add thousands to the cost of cars. The burden is so great, that GM needs SUVs to make money and sees no margin in fuel efficient cars. Yet, it is fuel efficient cars that customers are now buying. If GM reorganizes under bankruptcy, creditors will be forced to give it breathing room and paralyzing restrictions will be removed.

Robert Reich, former Labor Secretary, wrote on November 11, “When a big company that gets into trouble is more valuable living than dead, there used to be a well-established legal process for reorganizing it – called chapter 11 of the bankruptcy code. Under it, creditors took some losses, shareholders even bigger ones, some managers’ heads rolled. Companies cleaned up their books and got a fresh start. And taxpayers didn’t pay a penny. In exchange for government aid, the Big Three’s creditors, shareholders, and executives should be required to accept losses as large as they’d endure under chapter 11, and the UAW should agree to some across-the-board wage and benefit cuts.”

Al Gore, in his November 9 NY Times Op-Ed identifies a major opportunity, “We should help America’s automobile industry (not only the Big Three but the innovative new startup companies as well) to convert quickly to plug-in hybrids that can run on the renewable electricity that will be available as the rest of this plan matures. In combination with the unified grid, a nationwide fleet of plug-in hybrids would also help to solve the problem of electricity storage.”

Now law, the Emergency Economic Stabilization Act of 2008 gives tax credits exceeding $7,000 for the purchase of plug-in hybrids. President-elect Obama, when campaigning, favored expanded use of tax credits to speed the transition to a competitive auto industry that makes clean cars. Consumer vehicle spending could be boosted now by expanding the offering to include a $2,000 tax credit for vehicles getting over 35 miles per gallon and up to $10,000 for zero-emission vehicles. Auto industry sales would immediately jump without a $25 billion give away.

In the seventies, I left my job with a major Detroit corporation, Burroughs, then the second largest computer firm. At the time, all makers of mainframe computers were in trouble, including IBM. If the government had done a massive bailout and protected their businesses, the United States would not have transitioned into the global giant of information technology. Lacking a bailout, IBM reinvented themselves into a global leader in IT services with a deep new patent portfolio. Burroughs became Unisys. Honeywell redefined itself. GE exited the computer field. An industry thrived instead of died. The transition made the United States the global leader in the Internet and technology innovation, creating millions of jobs.

Big corporations resist change, yet change they must. To grow and be profitable, the United States transportation industry must be innovative and responsive to customers.

Car customers are voting with their pocketbooks. The average car owner spends $8,000 on their car. The average household with two cars spends $16,000. People are demanding fuel economy. They have stopped buying vehicles with lousy mileage. They want hybrids that deliver over 40 miles per gallon. There is a pent-up demand for millions of electric vehicles and plug-in hybrids.

Only a smaller innovative customer-oriented GM can create permanent jobs. Yes, a GM bankruptcy reorganization could lead to the short-term loss of over 100,000 jobs at GM, its suppliers, and some of its dealers. These laid-off workers, however, could be part of a million new workers. Federal government tax credits could be given to any company hiring laid-off auto workers. Community colleges could be funded in Michigan and other states to retrain workers for jobs of the future.

$25 billion invested in public transportation would create over one million new jobs in the United States. The America Public Transportation Association has learned that every $1 billion invested in public transit capital projects generates 30,000 jobs, and the same amount invested in transit operations generates 60,000 jobs.

U.S. citizens want better public transportation as ridership soars to 11 billion this year. This November, voters across the country in 16 states approved 23 measures out of 32 state and local public transit ballot initiatives, authorizing expenditures approximating $75 billion. Clean Fleet Report

Senate Majority Leader Harry Reid plans to move forward with a bill that would give the auto industry access to the $700 billion Troubled Asset Relief Program set up by the government in October to help ailing banks and other financial firms.

As Ben Franklin observed, “Great haste makes great waste.”

Congress may release the total $50 billion by Thanksgiving. Such haste sends all taxpayers a message, “Enjoy this turkey. You can pay for it later with interest.”

John Addison publishes the Clean Fleet Report.

Solar Powers more Vehicles as Gasoline use Drops

By John Addison. Solar is powering more vehicles. American’s have reduced their use of petroleum 5 percent this year. So far, petroleum reduction is the result of fewer miles traveled solo as people cut travel to deal with high gas prices and a slowing economy. At the margin, however, solar power is replacing oil.

There are now 40,000 electric vehicles in use in the United States. They are primarily the 25 mile per hour light electric vehicles. Fleets are starting to use heavy electric vehicles, and plug-in hybrids, that formerly required copious gallons of diesel and gasoline. In 2010, consumers will start buying freeway speed electric vehicles.

The U.S. Marine Corp at Camp Pendleton, during my last visit, showed me an 8-station solar car port that they use to charge their 320 light-electric vehicles. Petroleum fuel is a multi-billion dollar part of the U.S. Defense budget. Once the solar panels are installed, however, the sunlight is free. Solar is increasingly also used by the Marines and Army for stationary power in the U.S. and Iraq, reducing the need for petroleum in the form of diesel and JP8 jet fuel for running gen sets to air condition tents and buildings.

Every 44 minutes, sufficient energy from the sun strikes the Earth to provide the entire world’s energy requirements for one year, including the energy needed to move vehicles. Solar power grows 40 percent per year, as we become increasingly efficient at turning sunlight into electricity and heat.

Most importantly, with continued innovation and larger scale manufacturing, the price of solar keeps dropping. There is enthusiasm for advancements in photovoltaics (PV) and for large-scale concentrating solar power (CSP). As I researched and wrote this article at the Solar Power 2008 Conference, last week, the evidence of growth was everywhere. 17,000 from 92 countries attended the conference in San Diego, California. 425 companies exhibited, with 450 more turned away due to lack of convention floor space.

8 GW of solar power are now installed. Deutsche Bank forecasts that the photovoltaic market will growfrom $13 billion in 2006 to $30 billion in 2010. Polysilicon supply is expected to triple by 2010. New technology continues to delivers more electricity output with less silicon. These technologies include thin film, high efficiency PV, organic, concentrating PV and balance of system improvements.

For those interested in transportation, one notable area of growth is solar covered parking structures – a cool solution for a planet that is getting hotter.

When California Governor Arnold Schwarzenegger opened the Solar Power International conference, he highlighted Applied Materials’ 2 MW solar power that also shades their parking lot. The vast solar shading is designed to efficiently capture energy using SunPower 19% efficient panels implemented horizontally with a system that rotates the panels to track the sunlight.

Envision Solar specializes in solar parking structures. Designed by architects, Envision uses biomimicry to have parking structures that suggest groves of trees. NREL in Colorado uses an Envision solar carport with a charging station for two vehicles including its plug-in hybrid and EV. Other organizations have installed Envison solar parking structures with the support poles pre-engineered with wiring for future charging or integration of nighttime energy-efficient lighting. These organizations include the University of California San Diego and major solar panel maker Kyocera.

New Jersey Transit is preparing for a future where parked cars can be charged with sunlight while people use public transportation. Premier Power Renewable Energy recently completed the first of two 201kW solar canopies, on the rooftops of two large six-story parking garages at the new Trenton AMTRAK Transit center. Each project includes more than 600 solar panels. The solar systems will eliminate approximately 141 tons of CO2 emissions annually.

The New Jersey parking structures are also equipped with 110v charging stations for Plug-in Hybrid Electric Vehicles (PHEVs) and Electric Vehicles (EVs). Participating in the October 14 ribbon cutting was the Mid-Atlantic Grid Interactive Cars (MAGIC) consortium, which includes the University of Delaware, Pepco Holdings, Inc., PJM Interconnect, Comverge, AC Propulsion and the Atlantic County Utilities Authority, created to further develop, test and demonstrate Vehicle-to-Grid technology.

At Google, part of their 1.6 MW solar PV installation is a solar carport structure that includes charging stations for Google’s plug-in hybrid converted Toyota Priuses and Ford Excapes.

The conference included many lively debates about whether the financial crisis would stop solar’s growth in 2009. Large projects usually require millions for project financing. Allowing customers to pay by the kilowatt with power purchase agreements requires long-term financing. Illiquidity will surely slow growth.

In most U.S. states, however, electric utilities are required by law to expand the percentage of power that is delivered with renewables. In California, for example, the renewable portfolio must be 20 percent by 2010. Pacific Gas and Electric is installing 800 MW of utility scale solar PV to meet part of that. Arizona Public Service has contracted with Abengoa to install 280 MW of concentrating solar thermal that includes molten salt towers to store six hours energy for delivery during peak hours.

Utilities have deep pockets and these volume projects are lowering costs. With illiquidity in other sectors, utilizes will increasingly drive centralized solar. In areas with positive regulatory environments and with robust grids, utilities will also encourage decentralized solar PV as part of their mix.

United States power utilities spend $70 billion annually for new power plants and transmission, plus added billions for coal, natural gas, and nuclear fuel. For $26 to $33 billion per year investment, ten percent of United States electricity can be from solar by 2025, details the Utility Solar Assessment Study, produced by clean-tech research firm Clean Edge.

By 2050 solar power could end U.S. dependence on foreign oil and slash greenhouse gas emissions. In their Scientific American article, Ken Zweibel, James Mason and Vasilis Fthenakis detail the scenario. A massive switch from coal, oil, natural gas and nuclear power plants to solar power plants could supply 69 percent of the U.S.’s electricity by 2050. This quantity includes enough to supply all the electricity consumed by 344 million plug-in hybrid vehicles.

The price tag for the transition would be $400 billion, but this could be spread over a number of years. Should this seem too expensive, consider the alternatives. This is a fraction of what the U.S. has spent for the war in Iraq.

In the final keynote of the Solar Power International conference, U.S. Senator Maria Cantwell (D-WA) explained that both Republicans and Democrats ultimately supported an 8-year extension of solar and other renewable investment tax credits in the Emergency Economic Stabilization Act of 2008. This bill also included $7,500 tax credits for the purchase of new plug-in hybrid and electric vehicles. Senator Cantwell also strongly supports United States investment in a smart and robust grid, and in bringing high-voltage lines from major sources of renewable energy to major markets.

The transition to clean energy is increasingly recognized as an excellent investment. Due to rapid cost reduction, solar is a growing part of the solution that includes electric vehicles, energy efficiency, wind, bioenergy, geothermal, and other renewable sources. Compared to business as usual with oil and coal, renewable energy is downright cheap. The International Energy Agency estimates that by 2030, $5.4 trillion must be invested to increase global oil production.

Read the Full Article

John Addison publishes the Clean Fleet Report and writes about cleantech and renewable energy. He has a modest stock holdings in Abengoa and Q-Cells.

A Passion for Plug-ins

By John Addison (8/7/08). Toyota President Katsuaki Watanabe spoke about his dream of building a car that could cross the United States on a single tank of gasoline. A plug-in hybrid running on E85 would potentially use only one gallon of gasoline every 500 miles in a blend with five gallons of ethanol, with the rest of the energy being fueled by electricity and biofuel.

In a recent article, I shared the stories of fleets and enthusiastic advocates and individuals who have converted their hybrids to be plug-in hybrids. Most people, however, will wait for vehicles that are designed from the ground-up to be plug-in hybrids. These vehicles will be warrantied by major manufacturers. Future plug-in hybrids will have larger electric motors, smaller engines, lithium battery stacks, and optimized control systems.

GM has announced plans for new plug-in sales by the end of 2010. Toyota is more likely to first deliver hundreds of fleet evaluation cars in 2010 and may follow with sales in 2011. Because both may start with limited numbers of vehicles and long wait times, it may be 2011 before you could get delivery of a new plug-in hybrid.

Toyota has put ten of its prototype plug-in hybrid into test applications in Japan and California. These test vehicles are Priuses with nickel metal hydride (NiMH) batteries. Toyota is being a bit secretive about its new plug-in hybrid. The car is likely to be smaller and lighter than the Prius and use lithium batteries. By carrying less weight and more advanced batteries, Toyota can give the vehicle greater electric-only range, possibly 40 miles which would accommodate the daily range requirements of 78% of all U.S. drivers.

General Motors has made clear statements that it will start taking orders for the Chevy Volt from U.S. consumers by the end of 2010. Last December, I attended a General Motors showing of its Chevy Volt – an elegant four-door sedan shown in this photo which I took. One GM designer admitted that the Mercedes CLS gave some inspiration for the Volt. The Chevy Volt can be driven 40 miles in electric-mode using 16kW of lithium batteries, before its small one liter engine is engaged. 16kW is twelve times the storage of my Prius NiMH batteries.

The Volt uses an electric drive system with a small ICE in series that is only used to generate added electricity, not give power to the wheels. GM’s modular E-Flex propulsion could be adapted to various engines including diesel, fuel cells, and potentially battery-electric.

Ford currently has the SUV with the best fuel economy in the Ford Escape Hybrid. A number of fleets have contracted with vehicle system integrators to convert the Escape Hybrid to be a plug-in. Ford delivered twenty of its own Escape Plug-in Hybrid prototypes to major electric utility SCE. The SUV uses a 10 kWh lithium-ion battery pack from Johnson Controls-Saft. The PHEV uses a blended operating strategy, and delivers an equivalent 30-mile all-electric range.

A hybrid battery might use a state of charge depletion window of twenty percent. A plug-in hybrid conversion kit might use a state of charge depletion window of 80 percent, and only be willing to warranty the battery for two or three years. GM will want to offer customers ten year warranties by having 150,000 mile target lives for their batteries. GM will likely use a state of charge depletion window of 50 percent with the Volt. While GM and Toyota see long-term market share advantage by being first to market with a plug-in, other auto makers are cautious.

Daimler is actively expanding the use of electric drive systems in a number of vehicles. The Mercedes Smart Car will be offered as an electric vehicle. The larger Sprinter Van will include a plug-in offer in the future. Several fleets have demonstrated Sprinter Vans converted to be plug-ins. In the future, Daimler may offer its own Plug-in Sprinter.

Plug-in hybrids will face growing competition from electric vehicles, which have more limited range, but have no engine and therefore never require a fuel like gasoline or diesel. At times some of these EV makers have floated the idea of plug-ins in the future. Such comments have come from Nissan-Renault, Tesla, BYD, and others.

In this era of record gasoline prices, people are using many successful approaches to spend less for gas and cut emissions. A record number are cutting personal miles by taking part in employer flexwork programs, car pooling, using transit, and grouping trips. Households are maximizing use of their most fuel efficient vehicles while leaving the gas guzzler parked. More are buying fuel efficient cars. Plug-in hybrids will become a growing part of the solution to save gas and slow global warming.

Plug-in hybrids are destined to be a major success. According to the California Electric Transportation Coalition, if automakers begin producing plug-ins within the next few years, 2.5 million cars could be plug-ins by the year 2020, saving 11.5 million tons of CO2 and 1.14 billion gallons of gasoline each year.

Complete Article about New Plug-ins

John Addison publishes the Clean Fleet Report.

Plug-in Drivers Get Charged

By John Addison (7/31/08). In 1971, a bright engineer, Dr. Andy Frank, was looking to the future. He knew that oil production had peaked in the U.S. and that cheap oil would later peak globally. He calculated how to get 100 miles per gallon, and then he built a hybrid-electric car.

A few years later there was a crisis in the Mideast. Oil tankers stopped moving through the Suez Canal. There were hour gas lines in the United States with engines fuming emissions and drivers fuming with anger. Gasoline was rationed. The crisis intensified Andy Frank’s commitment to build great vehicles with outstanding fuel economy. He has been on that mission ever since.

Andy Frank took me for a ride in a big GM Equinox SUV that got double the fuel economy of a conventional SUV because he converted it to a plug-in hybrid. The ride was the same as in any other SUV except it was more quiet. Fuel economy doubled because much of the time the vehicle ran on electricity with the engine off.

This vehicle was typical of many projects. The large engine was removed. An engine less-than half its size was put in its place. His team saved hundreds of extra pounds by replacing the standard GM transmission with a smaller and lighter continuously variable transmission. Even with an added electric motor and lithium batteries, the vehicle weighed less than a standard Equinox. The air conditioning and other accessories ran electrically, instead of placing mechanical demands on a large engine. Converted to be powered electrically, the air conditioning could run with the engine off.

Andy Frank is the father of plug-in hybrids. His students at U. C. Davis have gone on to be some of the brightest minds in automotive design and transportation management. Over the past 15 years, he and his students have built over ten different plug-in hybrids. They have ranged from sport cars to full-sized SUVs. Typically these PHEV can go over 40 miles (64km) in electric-only range and weigh no more than their standard counterparts. U. C. Davis Team Fate Vehicles

The idea of plugging-in is not new. We are in the habit of recharging our mobile phone every night. Soon, we may also be recharging our vehicle every night. Plug-in hybrid vehicles (PHEVs) look and drive like regular hybrids. They have a large battery pack that captures braking and engine-generated energy. Like hybrids they have computer chips that decide when to run only the electric motor, using no gas, when to run the gasoline engine, and when to run both. Many plug-in hybrids are programmed to run on only electricity for ten to forty miles before engaging the engine. Heavy duty vehicles, and eventually some passenger cars, will use more efficient diesel engines, not gasoline.

Andy Frank was all smiles as a crowd of 600 applauded at the Plug-in 2008 Conference in San Jose, California, last week. Many in the crowd now drive plug-in hybrids as part of their fleet demonstration programs. A number in the crowd had converted their personal Toyota Priuses or Ford Escape Hybrids. This was a crowd of plug-in converts.

Some visionary fleet managers have accelerated the development of plug-in hybrids. Rather than wait years for major vehicle manufacturers to offer plug-ins, these fleets have contracted for conversions then used their own maintenance teams to keep the experimental vehicles running. For example, Google is getting 93 miles per gallon (mpg) with its converted plug-in Priuses, over double the 48 mpg of its normal Priuses. Google uses solar power to charge the cars. Google’s

In Southern California, 24 million people live in an area where the mountains trap smog and damage people’s lungs. South Coast Air Quality Management District plans to reduce emissions by contracting the conversion to plug-in of 10 Priuses, 20 Ford Escape Hybrids, and several Daimler Sprinter Vans. The vehicles are being put into a variety of fleets with hopes that “a thousand flowers will bloom.”

Fleets are piloting plug-in conversions around the country. These fleets include New York City, the National Renewable Energy Lab in Colorado, King and Chelan County Counties in Washington, Minneapolis and the City of Santa Monica.

Electric utilities have started a variety of plug-in hybrid pilot projects involving everything from cars to large trouble trucks. These utilities include Southern California Edison, Austin Energy, Duke Energy, Wisconsin Power, and Pacific Gas and Electric to name a few. At a time when there are desperate discussions about being more dependent on oil, including taking ten years to get oil from environmentally sensitive areas, electric utilities are coming to the rescue by increasingly powering our vehicles.

Because some plug-ins will go up to 40 miles in electric mode at slower speeds, it is possible to get over 100 miles per gallon. With short trips in cold weather, little improvement might be seen. Driving on freeways without recharging will not help. However, for most driving cycles, plug-ins can dramatically reduce the need for expensive gasoline fill-ups.

You can get over 100 miles per gallon (mpg) by either adding a kit to an existing hybrid, or by waiting until late 2010 to order a new car from the car makers that will be discussed in next week’s article. Due to probable wait lists, it may be three years before individuals can get delivery of plug-ins from car makers. If you are now getting only 20 mpg, getting 100 mpg would cut your gasoline bill 80%. Over the next few years, you will have a growing number of choices of plug-in hybrids.

Plug-In Supply unveiled its $4,995 Conversion Kit at the Plug-in 2008 Conference. The lead acid (PbA) conversion kit, based on the CalCars Open Source design, converts a Prius into a plug-in hybrid with an all-electric range of up to 15 miles if kept to a maximum of 52 mph. At freeway speed the gasoline engine will be engaged. Green Car Congress Article

Most fleets and people who convert prefer to deal with a system integrator, garage, or mechanic that is experienced with plug-in conversions and can maintain the vehicles. For example, Luscious Garage has converted about 20 vehicles. A garage might charge $2,000 or more to install a plug-in kit.

A123 Hymotion is establishing certified conversion centers throughout the nation so that people can convert their Toyota Priuses to plug-in hybrids for $9,995 per car. The conversion kit includes interfacing to the Prius computer that controls hybrid operation, interfacing with existing Prius NiMH battery, and includes a 5kWh A123 lithium battery.

Many early converts are enthusiastic about their plug-in hybrids. They report that electricity is only costing the equivalent of 75 cents per gallon, compared to over $4 per gallon of gasoline. If you plan to convert a hybrid to a plug-in, be sure that you have a safe and convenient place for recharging at home, work, or other location. For most, a 110 volt garage line will be the best option., a leading plug-in non-profit group, has been a major force in the growth of plug-in hybrids. Technical guru, Ron Gremban converted a Prius in 2004, and now contributes in many areas including the development of an Open Source plug-in platform. CalCars Founder Felix Kramer has patiently nurtured the expanding support of electric vehicle groups, environmental groups, media, legislatures, and auto makers. He has made “plug-in” a household name. There are a growing number of batteries, plug-in conversion kits, and garages for plug-in conversions. CalCars summarizes offerings and provides links.

In California, Sven Thesen converted his family’s Prius to a plug-in with help from He and his wife love it, and share the plug-in Prius as their only vehicle. For them, it was not about saving money, rather it was to protect the future for their young daughters and everyone’s children. In Boston, students Zoë and Melissa converted because they see conventional cars as bad for the environment. In Texas, Jim Philippi replaced his 12 mpg Yukon with a converted plug-in that gets over 100 mpg. He buys renewable energy credits to use wind power for the plug-in charging. See Videos and Read about over 100 Plug-in Drivers

There is some truth to the old adage that you can recognize the pioneers by the arrows in their backs. Early conversions have sometimes produced problems and downtime. The conversions typically add an expensive second battery pack to the vehicle’s existing nickel metal hydride battery pack. To make the plug-in hybrid controls work, the manufacturer’s control system must be “fooled” with new input signals.

The added battery pack often displaces the Prius spare tire. In the Escape, a larger battery pack is often placed in the rear cargo area, behind the passengers seating in the rear seat. Battery life is a function of the state of charge. In hybrids, auto makers only use a narrow range of charging and discharging, so that they can warranty batteries for up to ten years. In plug-in hybrids, batteries are usually deeply discharged, reducing battery life. Kits may only warranty the expensive batteries for up to three years.

If anything goes wrong, auto makers like Toyota and Ford, may claim that the conversion created the problem and that their warranty is void. Although the car owner may have legal recourse, many are leery of warranty issues.

Even if vehicle lifecycle operating costs are higher with plug-in conversions and warranties limited, these issues have not stopped plug-in hybrid enthusiasts who strongly feel that we cannot wait for the big auto makers. They want rapid adoption of solutions to address global warming and oil addiction to end now. These early drivers of plug-in hybrids are leading the way — at 100 miles per gallon.

I returned from the conference to learn that my wife was spending $2,000 for new drapes. This was good news, for I assumed that it would therefore be no problem for me to spend $24,000 on a new Prius, less a nice trade-in for our 2002 model, and another $10,000 to convert it to a plug-in. An interesting discussion ensued.

We both want to save gas and take some leadership in making the future better, but $25,000+ (after trade-in) is a lot of money, especially in this economy. If the battery is dead in three years, that could be another $10,000, or less if kit providers offer extended warranties. Giving up the spare tire space is another concern. At least three times in my travels, I have needed to put on the emergency spare.

Like many, we are more likely to wait until the end of 2010, hoping for several electric vehicle and plug-in offerings for auto makers. These vehicles will be designed to be plug-ins, with smaller engines, only one lithium battery pack, better drive systems, and balanced vehicle weight. These new offerings will be discussed in my next article.

We can all be thankful for those who refuse to wait, often concerned with climate and energy security issues. There are over 200 converted plug-in hybrids now on the road. One year from now, there may be over 1,000 plug-in hybrids of all shapes and sizes in use.

By the end of 2010, we may be able to start buying plug-in hybrids from major auto makers. Once cars designed from the ground-up to be plug-ins are made in volume, prices differentials will drop to a fraction of the current charge of converted hybrids. In a few years, plug-ins, with long battery warranties may cost less than $5,000 more than their hybrid counterparts.

Plug-in hybrids will succeed because of Andy Frank and the early leaders who converted their vehicles to use more electricity and less petroleum. We will all benefit from the reduced gasoline use and cleaner air that started with the courageous pioneering of the plug-in converts.

John Addison publishes the Clean Fleet Report and speaks at conferences.

Copyright (c) 2008 John Addison. Portions of this article will appear in John Addison’s next book.