As the country comes to the realization that a future of electrified mobility is crucial to mitigating the effects of climate change, government leaders and the electric vehicle (EV) industry have made it their mission to build a network of 500,000 EV chargers across America.
At the same time, the past year has demonstrated how disruptions in globally interconnected supply chains can lead to severe bottlenecks and slow production. The EV charging industry is not immune to these conditions. In order to achieve the ambitious electrification goals set by our elected officials and business leaders, EV charging companies must ramp up their domestic manufacturing capabilities to ensure they can meet the demand, regardless of global factors.
There’s no better time than now to increase American manufacturing. With the Biden Administration’s Infrastructure Investment and Jobs Act (IIJA) earmarking $7.5 billion to build a nationwide charging network, there is more investment in the space than ever before. However, in order to qualify for these federal funds, EV charging manufacturers must meet the “Buy America” requirements – standards that call for equipment and projects to use American-made material and products, as well as be manufactured domestically. While domestic production of EV chargers holds much promise in solving supply chain concerns, this requirement also presents several challenges.
When considering the “Buy America” requirements for EV chargers, two provisions are most relevant. First, all steel in a finished product must be sourced locally. Secondly, under current criteria as clarifying language is pending, at least 55 percent of a finished product must come from the U.S.
Generally, meeting the steel requirement is not a challenge for EV charging manufacturers as chargers do not require large amounts of steel and steel can be locally sourced without undue burden. However, the larger challenge for EV charging manufacturers is sourcing domestically made chips, as most chip manufacturing is done offshore and imported to the U.S. From microprocessors to Wi-Fi and cellular modem chips, these necessary components are hard to source domestically, presenting a significant roadblock for EV charging manufacturers looking to meet the “Buy America” requirements.
In addition to the challenges presented by the “Buy America” requirements, there are also logistical challenges that come with relocating a manufacturing process, that was previously done overseas, entirely to the U.S.
In other countries, robust manufacturing corridors exist – areas of production where the various parts of a product are all sourced near one another – that help reduce the time and cost it takes to assemble critical components. However, in recent decades many of these components have been imported from overseas, and the U.S. has far fewer manufacturing corridors. This means domestic manufacturing facilities will have to re-invent their processes and supplier relationships to better centralize them and avoid the expenses and pollution incurred by shipping parts across the country.
As we transition to this new age, EV charging manufacturers are facing a plethora of challenges as well as unprecedented/exciting growth opportunities. From adhering to the “Buy America” procurement requirements to working out the logistics of a new supply chain, manufacturers have a lot to overcome, all while trying to keep up with the demand of a growing population of EV owners.
Right now, the biggest hurdle facing domestic EV charger manufacturing is time. In order to tap into the federal funds made available by recent legislation, manufacturers must build up domestic capabilities and expertise in new areas, from sheet metal fabrication to PVC manufacturing, quickly.
With these challenges, it may seem daunting to make the transition to domestic manufacturing. However, Blink Charging, a leader in the EV charging industry for close to 14 years, has long been aware of these concerns and is taking steps to overcome them.
In June of 2022, Blink acquired SemaConnect, a leading provider of EV charging infrastructure solutions in North America with a state-of-the-art manufacturing facility in Maryland. This acquisition brought the complete design and manufacturing processes of Blink’s EV chargers in-house, allowing the company to comply with the “Buy America” provisions in federal law. The acquisition also marks Blink’s emergence as the only EV charging company to offer complete vertical integration – from research & development and manufacturing to EV charger ownership and operations – creating unparalleled opportunities for the company to control its supply chain and accelerate go-to-market speed while reducing operating costs.
In addition, Blink recently announced its commitment to establish a new manufacturing facility in the United States, which will further increase its charger production capacity. While the search for the facility’s location is still ongoing, the plant will offer 200,000 square feet of space with the latest technology to manufacture both DC Fast Charging (DCFC) and Level 2 Chargers.
With one facility already up and running and another on the way, Blink is leading the charge in domestic manufacturing of EV charging infrastructure in the U.S.
Harjinder Bhade is Chief Technology Officer at Blink Charging
Trucking companies, and the shippers that hire trucking companies, are making bold commitments to cut their carbon footprint – such as becoming net zero by 2030. Yet achieving net zero or better requires more than operational improvements. Alternative technologies are needed to move beyond even the cleanest diesel platform. Renewable natural gas (RNG) has emerged as the leading pathway for low carbon, clean air trucking. There are three compelling reasons why RNG is helping sustainable companies decarbonize their transportation today.
RNG is derived from organic material found in green waste, food waste, landfills, sewage treatment, and livestock manure. These organic wastes naturally decompose into methane. Methane that leaked into the atmosphere is a potent short-lived climate pollutant and greenhouse gas. Rather than releasing into the atmosphere, methane can be captured and converted into a drop-in replacement fuel for conventional natural gas.
When used for vehicle fueling, RNG reduces carbon by capturing methane that would escape into the atmosphere; and by replacing high-carbon diesel fuel. The chart below shows the carbon intensity of traditional fossil fuels and low-carbon alternative fuels. RNG produced from dairy manure has carbon emissions that are up to 300 percent cleaner than diesel fuel, and has the potential to be negative carbon intensive. Replacing just 25 percent of a fleet’s diesel trucks with negative carbon intensive RNG from dairy manure can reduce a fleet’s carbon emissions by 100 percent.
Many areas of the U.S. have harmful air, and diesel trucks play an oversized role in local air pollution. The greater Southern California area, California’s Central Valley, Houston, Dallas, Salt Lake City, and other metro areas share this air pollution problem. Air pollution contributes to respiratory, cardio, and other illnesses. Studies have linked local air pollution to susceptibility to COVID-19, Alzheimer’s disease, and cancer. Diesel trucks emit high amounts of local air pollutants such as oxides of nitrogen (NOx) and diesel particulate matter. Diesel particulate matter is classified as a toxic air contaminant and is composed of carcinogenic compounds.
Trucks powered by RNG have 90 percent lower NOx emissions than a new diesel truck and over 98 percent lower NOx emissions than many of the diesel trucks in use today. RNG-powered trucks have zero emissions when it comes to carcinogenic diesel particulate matter.
RNG fuel costs less than diesel fuel. Fuel savings are particularly amplified today with skyrocketing diesel prices. RNG prices are also less volatile than petroleum fuel.
RNG trucks have great economics compared to other emerging clean technologies. The cost of these emerging technologies is 200 percent to 300 percent more expensive than RNG trucks. These emerging technologies have far more expensive charging or fueling infrastructure costs than RNG fueling. An RNG truck at one-half to one-third the cost of other technologies has better carbon reduction and equivalent air quality benefits.
Climate pollution and air pollution are problems that exist today, not far in the future. While it is noteworthy for companies to make aspirational goals to achieve net zero carbon emissions in the future, RNG trucks offer the ability to achieve net zero immediately. RNG truck technology has been proven and perfected over the past 14 years. RNG engines are mass produced by Cummins, and RNG trucks are mass produced by Freightliner, Peterbilt, Kenworth, Volvo, and Mack. RNG fueling infrastructure is available throughout North America and is rapidly expanding. Clean Energy alone has over 560 fueling locations at customer sites and at retail locations.
Companies like Amazon, UPS, Waste Management, SAIA, Estes, and TTSI are deploying thousands of RNG trucks today. What do these sustainability-leading companies know? RNG is the lowest carbon fuel available and offers an affordable alternative to diesel today that is proven and scalable.
Greg Roche is the Vice President of Sustainability at Clean Energy, the country’s largest provider of the cleanest fuel for the transportation market.
It’s been more than 100 years since Henry Ford’s Model T revolutionized the way the world moves people and goods. Ford didn’t invent the car, but over the course of about 30 years, he transformed the way vehicles are manufactured – increasing volumes, driving down costs, and converting them from expensive novelties to affordable conveyances for workers and families. Just as importantly, over the last 100 years, other entrepreneurs and innovators developed an infrastructure ecosystem to ensure these vehicles could be fueled, serviced, and customized.
More than a century later, we find ourselves on a new transportation frontier that is once again transforming the way society moves people and goods. This time we are transforming how vehicles are propelled, from internal combustion engines (ICE) to electric, and modernizing the fueling infrastructure. Gone will be the days of imported crude, cumbersome fluid tanker trucks, and lines at the gas station, in favor of producing fuel via localized grids and microgrids, and distributing that fuel via depot chargers, home chargers, and public charging stations.
As we approach 30 years since the first modern retail offering of battery-powered electric vehicles, it’s clear that EVs – of all shapes, sizes, models, and payloads – are here to stay. I am certain of this because nearly every day I witness the reaction of drivers when they operate a Lightning eMotors commercial EV for the first time – smooth, quiet, powerful, and equipped with safety features never before available on commercial vehicles. I see their response when we talk about efficiency of nearly 60 MPGe on the exact same vehicle that got 13 mpg as a gasoline vehicle.
These products and this industry are my passion. I have dedicated myself to creating a company that not only builds amazing products, but also builds products that make both environmental and business sense, a company that helps move the planet in the right direction. As CEO of Lightning eMotors (NYSE:ZEV), a leading manufacturer of commercial vehicle electrification, telematics, and energy and charging solutions, I have seen that it is possible to build exciting products that also have a compelling business case and are environmentally transformational.
Not only has growing public awareness of the environmental and health benefits of electric vehicles led to government legislation and funding to promote the transition from internal combustion engines to electric, but evidence for the EV business case continues to grow as well. Companies of all sizes and purposes are dedicating resources to support the transformation of their fleets to electric vehicles.
In addition to the growing list of companies that has pledged a commitment to reducing their fleet impact on the environment, within just the past year the Environmental Protection Agency allocated $5 billion to replace existing school buses with zero-emission and low-emission models through the Clean School Bus Program. In addition, the Federal Transit Administration announced almost $5 billion for public transit agencies, states, and Tribal governments to support public transportation across the country through its Low or No Vehicle Emissions Program; and the United States passed the $1.2 trillion Infrastructure and Jobs Act and the Inflation Reduction Act, both of which provide billions in new funding for EVs and EV infrastructure. History has rarely seen industry and government so closely aligned on a path forward. This is yet another sign that electric vehicles are the future.
While it’s true, for the time being, that up-front costs are higher than their petroleum-powered counterparts, as industry continues to invest in EV technologies and as government continues to provide incentives to purchase, more electric vehicles are being manufactured. Scale is growing and costs are coming down. What’s more, data is proving that over their lifetimes, electric vehicles will last longer and require far lower maintenance and fuel costs.
Critics point to the bumps in the road for EV makers as proof that the endeavor itself cannot succeed. Of course, establishing a successful EV industry comes with challenges. But we are at the point where EVs have proven themselves to make sense logistically, financially, and environmentally, and transitioning from internal combustion engines to electric is both financially prudent and impactful for the environment.
A little-talked-about factor helping to lower the cost of entry is the increasing production of specialty commercial vehicles. In fact, according to the 2022 IEA Global Electric Vehicle Outlook, the business case for light commercial vehicles (LCV) is stronger than for cars, with sales of LCVs increasing 70 percent in 2021.
Those of us who spent more time at home during the pandemic, marveling at how easy and ubiquitous home delivery has become, are probably not surprised by that. And it’s only increasing. In a post-COVID world, e-commerce sales are forecast to rise 37 percent from 2020 to 2024, according to Statista Digital Market Outlook 2020.
We estimate there to be 2,500 electric vehicles in use in commercial fleets across North America – many as transit buses and cargo delivery vans and trucks, but also as passenger vans, shuttle buses, school buses, ambulances, and motor coaches. And the number is growing every day, as business and industry recognize the value of zero-emission transportation options for customer satisfaction, growing investor demands for sustainability and, importantly, their bottom lines.
Adoption no longer depends on emotion. Choosing EVs for commercial use is a demonstrably smart business decision. It’s no longer a matter of if the world’s primary source of transportation will be EVs but when…and when is now.
At Lightning eMotors, we see firsthand through our advanced telematics capabilities the efficiency of all our zero-emission vans, trucks, and buses through every phase of their lifecycles. Our vehicles have demonstrated between four-and-six-times better efficiency than their gasoline-powered siblings over the last 2.3 million real-world miles. In total, vehicles deployed by Lightning have removed more than 1,850 tons of CO2 from our environment.
As pathways toward adoption continue to grow, some companies will succeed, some will consolidate, and a few will fold. Regardless, the commercial EV market is now firmly established and will continue to make a positive impact on air quality, greenhouse gas emissions, and its customers’ bottom lines.
Henry Ford is quoted as having said: “Don’t find fault, find a remedy.”
The commercial EV industry is a remedy. It’s a remedy for business costs, efficient and effective resource use, and reducing carbon emissions into the environment, and it has been quietly making inroads into the mainstream for the past three decades.
Before long, the days of internal combustion engines dominating our roadways will be as much a symbol of the past as Ford’s Model T.
Tim Reeser is CEO and Founder of Loveland, Colorado-based Lightning eMotors
Dealers are ‘all in’ on EVs and incredibly excited about the new electrified products that are being announced almost daily. Dealers are hungry for the sales and service opportunities that are going to come with having numerous new EV models to sell.
While today’s EVs are exceptional, particularly compared to those of just a decade ago, the reality is that almost all appeal primarily either to stalwart supporters of reducing greenhouse gas emissions or luxury vehicle l buyers who want to be on the cutting edge of technology and performance.
One of the great mistakes we make in assessing our progress on converting America’s fleet to electric is assuming that today’s EV buyers will look like the EV buyers of tomorrow. This simply isn’t true.
It is undisputed that Tesla has been extremely successful at selling its products, and the company deserves significant credit for what it has been able to accomplish. But Tesla’s success does not prove that you can sell EVs in great quantities in America: What Tesla has proven is that you can sell Teslas very successfully in America to a certain, and small, subset of affluent new-car buyers.
Mass adoption of EVs in America won’t be achieved using a Tesla-type of direct to consumer model. Why? Because the typical Tesla, Rivian, or Lucid buyer isn’t who’s going to be buying the next generation of EVs.
Look around at so many of EVs being announced and marketed heavily lately – the electric Chevy Silverado and Blazer, the VW ID.4, and the Hyundai IONIQ 6, for example. Far from status or luxury vehicles, each actually has a starting MSRP below the average transaction price of a new vehicle – including ICE cars and trucks – sold today.
As the EV market continues to leave the luxury niche status and enters the mainstream, its customers will come to resemble the average car buyer more and more. And it’s these EV customers of the future who we need to cater to if we are to have meaningful and broad EV adoption. Because to sell effectively to mass-market buyers, you need to capitalize on what has worked for mass-market buyers for generations.
Things like consumer education about the product, help with comparing models, working with a customer’s budget constraints, financing assistance, helping with trade-ins, allowing test drives, and – yes – even good-old-fashioned tire kicking. And this is all in addition to the new challenges specific to EVs, such as the complexities of charging – the fact, for instance, that electric rates vary based on the time of day and the level of charge – and other variables that don’t exist in the ICE market.
Dealers are absolutely essential in this world of new EVs. Because once you get past luxury vehicles and into the mass market, you will not achieve broad acceptance of any product, regardless of how it’s powered, by rejecting the attributes of the sales and service process that mass-market vehicle buyers aren’t just accustomed to, but that they depend on to confidently choose the right vehicle at the right price that best meets all their needs.
This is a critical juncture in our march towards a cleaner future. And it’s a good time for policymakers and stakeholders at all levels to think critically about what it’s going to take to sell EVs in greater volumes to customers who haven’t experienced EVs yet.
Because the reality is that it’s going to take a lot. It’s going to take a network of tens of thousands of retail and service points located in just about every corner of the country, not just a website. It’s going to take hundreds of thousands of knowledgeable sales staff, not just a 1-800 number. And it’s going to take hundreds of thousands of highly trained technicians capable of providing professional service on the spot, not just mobile repair trucks. It’s going to take dealers. Fortunately, we’re already here, and we are raring to go.
Mike Stanton is Chairman and CEO of the National Automobile Dealers Association
As of 2020, the greatest contributor to U.S. greenhouse gas emissions was the transportation sector, at 27 percent. Of that pollution total, 22.4 percent was generated by passenger cars and light-duty, medium-duty and heavy-duty trucks. The remaining 4.59 percent was attributable to aircraft, rail, ships, and other emitters.
To avert global warming, the U.S. needs to transition from the ubiquitous fossil-fuel-burning internal combustion engine to electric and/or other earth-friendly propulsion sources. The vision of zero-emission vehicles is absolute nirvana, a clear pathway to clean skies, improved health and a bright future for our planet. But there is an inconvenient reality: The U.S. generates 60.8 percent of its electricity by burning fossil fuels. Much like our air conditioners, refrigerators, televisions, and computers, EVs can only be as clean as the electricity powering them.
During 2019, California experienced 25,281 electric power outages, a 23 percent increase over 2018. Those outages victimized 28.4 million customers, a 50 percent increase over the 19 million Californians affected in 2018. Recently, electric grid operators’ groups such as the North American Electric Reliability Corp. (NERC) and the Midwest Independent System Operators (MISO) forecasted an increased frequency of blackouts and brownouts during the summer of 2022.
By 2030, 8.7 million EV passenger vehicles and 10.4 million last-mile delivery trucks are expected to occupy U.S. roadways. Assuming annual passenger car usage rates of 13,474, and 12,435 miles for last-mile delivery trucks, at an average of 3.46 miles per kW, that will consume as much electricity as 2.7 million single-family U.S. homes.
Legislation like New York’s Electric Building Act guarantees increased electricity consumption. Also, ever increasing fossil-fuel prices (required to make demand electricity) will increase production costs that will ultimately trickle down to consumers. Boston Consulting Group predicts that increased EV demand will require utilities to invest $1,700 to $5,800 per electric vehicle in grid upgrades through 2030. That $178.7 billion investment will assuredly increase consumer prices.
For EVs to become ubiquitous, numerous hurdles preventing the masses from adopting EVs as their sole source of transportation must be overcome.
Charging at home is both convenient and cost effective for the 67 percent of Americans who live in single family homes. But will multi-car families be willing to interrupt their evenings to plug in a second EV or will they incur the cost of adding another Level-2 charger, or the exorbitant cost of acquiring and installing a Level-3 charger? Moreover, in an emergency, a person’s ability to respond will be limited by the number of EV chargers available along the route, their charging speed, and functionality.
Without millions of fast, reliable, and safe EV chargers throughout the U.S., many consumers will resist EV adoption. For example, in 2021 the California Energy Commission’s Electric Vehicle Charging Infrastructure Assessment warned that the state will need 1.2 million EV chargers by 2030.
The U.S. has over 1.1 million fuel nozzles and a fill-up takes about three minutes. When contrasted against a 150kW DC fast-charger, three minutes provides less than 30 miles of range. Subsequently, to satisfy the motoring public’s needs and to provide peace of mind, the U.S. will require many millions of ultra-fast-output public EV chargers.
In an effort to provide EV drivers with blackout and brownout immunity, offset power plant CO2 emissions, and to provide ultra-fast charging speeds, I created the Wind & Solar Tower (WST). This charger, the only one in the world powered by both wind and sun, is capable of simultaneously charging six EVs at Level-4 DC 380kW 1000-volt speeds that provide about 328 miles of range in just fifteen minutes. With up to a megawatt of battery storage capacity, each tower provides 797,900 miles of pollution-free driving per year and offsets 340.91 tons of atmospheric CO2 emissions.
My wind-and-sun-powered generating plant makes electricity on site for less than half the cost of utility-supplied power. Factoring in certain government programs, kWh costs can be reduced to nearly zero.
Reliability and ease of service are paramount with the WST. My team’s vast engineering and automotive capabilities means self-diagnostic capabilities and a 40-year service life. The WST features the lowest acquisition cost per EV charging outlet and generates – at virtually zero cost – 11,520 20kW charges with 100-percent-renewable energy that supplants electric grid load, which in turn reduce CO2 emissions and averts global warming.
As the global automotive industry transitions to an electric future, Mercedes-Benz aims to become the most desired electric brand in the world. From 2025 onwards, all newly launched vehicle architectures will be electric-first, demonstrating Mercedes’ commitment to electrification and efforts to provide a variety of options to consumers. To refine this strategy, Mercedes recently announced ambitions to expand its luxury purchasing experience in addition to focusing on luxury automobiles.
We’re in a steady race to decarbonization. With that, we realize that there cannot be luxury in the future without sustainability. Now that we’ve made a full commitment to electric, surpassing milestones along the way, we are shifting capital allocation and engineering resources to the luxury segment because the demand is there. We are focused on bringing real value to our customers, dealer partners, and shareholders worldwide.
Mercedes-Benz will rebalance its product portfolio, allocating more than 75 percent of its investments to the most profitable market segments. Mercedes is transitioning from one electric vehicle line to a full lineup of vehicles focusing on three key product categories:high-end luxury, core luxury, and entry-level luxury. This increased focus on luxury products is reflective of our rising customer demand in these segments.
Our goal to go totally electric by 2030 – where market conditions permit – and become CO2-neutral by 2039 are key components in strengthening the link between luxury and sustainability. With a higher concentration on the top end of the market, Mercedes will generate a strong financial performance even under increasingly adverse market conditions. By the end of this decade, Mercedes aims to have reduced CO2 emissions per passenger car by half from 2020 levels. Electrifying the car fleet, charging with green energy, increasing battery technology, and a large use of recyclable materials and renewable energy in manufacturing are all important components in the overall electrification strategy.
Success in the future requires changes today. In order for this new portfolio approach to work, we recognize that the number-one component driving demand in luxurious mobility is digital and sustainable luxury. This is being defined by values and benefits that go beyond physical experiences. Customers seek and demand valuable resources such as time. As a result, everything is being viewed through the lens of innovation, addressing this urgent need of customer convenience. We’re making incredible progress on all fronts. And we’re doing it as a team.
We are committed to providing a superior customer experience that extends beyond traditional channels and senses. Mercedes-Benz has launched a brand-new effort as a result of this: "Customer First" – an all-new initiative designed to address overall brand perception issues, improve customer satisfaction, and drive loyalty by. Customer First will channel customer issues directly to an HQ Central Team for quick answers to questions and swift resolution of potential issues. This initiative is part of our commitment to deliver the best white-glove service possible.
We’re also hard at work establishing new marketing and sales channels, both online and offline, to ensure a seamless consumer experience. The world is changing because of technology and we have to utilize its full potential to provide meaningful added value to our consumers. At every touchpoint, beginning with digital communication, the greatest user software offers high usability and an immersive customer experience. Additionally, Mercedes will begin combining equipment packages in an effort to simplify configuration and meet customer needs. The packages will be tailored to the tastes of customers and geographical demand, allowing for faster delivery.
For 130 years, Mercedes has placed emphasis on creating unforgettable brand experiences across all customer touch points inside and outside of the car. It’s important to us that customers are able to view a new vehicle in person, experience it with all of their senses, and drive it. We're excited to continue this good work, focusing on giving customers the unique Mercedes-Benz brand experience they demand and deserve.
Dimitris Psillakis is Head of Marketing and Sales at Mercedes-Benz Cars North America and CEO of MBUSA
There is no denying the recent growth in the hydrogen and fuel cell industry – growth in interest and awareness; in public and private sector investment; in federal, state, and regional commitments; in the overall portfolio and scale of product offerings; and in the range of new players entering the marketplace.
As the national advocate for the industry, the Fuel Cell and Hydrogen Energy Association (FCHEA) has long been active on Capitol Hill in Washington, DC, and around the country, working with champions in Congress, key allies, and our diverse membership on key issues such as policies and programmatic funding, codes and standards development and harmonization, and education and outreach.
Over the past year, FCHEA has grown as well, expanding the association not just in size, but also in scope of market sectors, innovative technologies, and hydrogen generation pathways, representing the full spectrum of the industry from production to utilization, including mobility.
Around the world, hydrogen is increasingly recognized as a key tool in the decarbonization of society, specifically hard to abate sectors, including medium- and heavy-duty transportation, both on the road and off. Here in the U.S., there are already tens of thousands of fuel cell-powered cars, buses, and material handling vehicles deployed across the country, all running on hydrogen. In parallel, fuel cells are also providing resilient, reliant backup power to hybrid zero-emission EV charging solutions. Customers include major retailers such as Walmart and Amazon, as well as transit agencies and delivery companies.
Hydrogen’s potential to reduce emissions and fossil fuel use, and with the advantages of fast refueling, lighter weight, and long range, are opening pathways in logistics, aviation, and shipping. We are seeing more fuel cell trucks, utility vehicles, and even planes, trains, and ships enter operation and testing in the U.S. and around the world.
At the federal level, hydrogen and fuel cell technologies received a well-deserved boost in funding and support through the bipartisan Infrastructure Investment and Jobs Act. The law, signed in November 2021, included $9.5 billion for clean hydrogen, with the bulk ($8 billion) allocated to developing ‘Hydrogen Hubs’ that will demonstrate diverse methods of production, processing, delivery, storage, and end-use of clean hydrogen across America.
While the hub funding has deservedly received a lot of attention from interested parties seeking to stake a claim in their respective region or state, the Infrastructure Act also contained numerous other provisions where hydrogen and fuel cells could make a significant impact in decarbonizing the nation’s transportation network. This includes programs focused on Congestion Mitigation and Air Quality Improvement; Alternative Fuel Infrastructure; Zero-Emission Ferries and Buses; Port Infrastructure; and more.
FCHEA’s membership includes automotive, trucking, and fuel cell original equipment manufacturers (OEMs) with products geared towards light, medium, and heavy-duty transportation applications. These companies are developing and deploying a range of zero-emission vehicles for land, sea, and air, as well as working with other members and partners on the necessary hydrogen infrastructure to support them. As these other sections of the Infrastructure Bill start to take shape, we expect more prospects for our members and the technologies they offer, especially in support of the Hydrogen Hubs once that funding is awarded, as well as initiatives to green the nation’s ports, airports, and highways.
Outside of federal funding, members are investing billions of dollars in new and expanded facilities to increase U.S. hydrogen generation capacity across the country, and into new states and areas. These investments will not only expand supply but will also create jobs and boost economic growth in and around those locations.
FCHEA is excited for these opportunities because we believe in hydrogen and fuel cells and see firsthand the tremendous benefits they already bring to a range of applications and customers. With significant plans for scale-up of hydrogen production and utilization across the country, those benefits will be amplified, helping us reach the necessary environmental goals to decarbonize across industry sectors and stay competitive with the rest of the world down the road.
Frank Wolak is President and CEO of the Fuel Cell and Hydrogen Energy Association in Washington DC.
In the three decades the U.S. Department of Energy has sponsored Advanced Vehicle Technology Competitions (AVTC) more than 27,000 students have participated. The vehicles have looked quite different over the years – from methanol-powered Chevrolet Corsicas in 1988 to hydrogen-powered Ford Explorers in the early 2000s, and performance hybrid-electric Camaros just a few years back. Every transformative stage of technology drives the need to attract new talent to the field, including engineers who fully understand the emerging fields of automotive engineering.
Argonne National Laboratory (ANL) has managed DOE’s AVTC program in partnership with the auto industry for more than 34 years. The program has evolved alongside the global auto industry, adding complexities and nuances to prepare the next generation of leaders to enter the workforce. DOE and ANL recently announced the latest AVTC, along with our partners General Motors and MathWorks, the EcoCAR Electric Vehicle (EV) Challenge starting in fall 2022.
The EcoCAR EV Challenge will build upon the program’s rich history to provide a hands-on educational experience that is empowering students to address the toughest mobility challenges facing our nation. The EV Challenge reflects the changing vehicle market. We need more EVs to overcome the climate crises we face. Transportation makes up the largest share of emissions in the U.S., and over half of those emissions come from passenger vehicles. EVs give us the means to eliminate those emissions. Last year, President Biden set a national goal of getting zero-emissions vehicles to make up half of new car and truck sales by 2030. These budding energy leaders are heeding the call. This challenge will help us build a diverse clean mobility workforce around this soon-to-skyrocket EV market.
The competition will challenge students to engineer a next-generation battery electric vehicle that deploys connected and automated vehicle (CAV) features to implement energy efficient and customer-pleasing features, while meeting the decarbonization needs of the automotive industry. General Motors will donate a 2023 Cadillac LYRIQ to each team, challenging them to design, build, refine, and demonstrate the potential of their advanced propulsion systems and CAV technologies over four competition years. Teams will be tasked with complex, real-world technical challenges including enhancing the propulsion system of their LYRIQ to optimize energy efficiency while maintaining consumer expectations for performance and driving experience. As students work on the LYRIQ, they are developing real-world knowledge and skills that will help accelerate the transformation of the auto industry.
More than $6 million from the competition sponsors will be provided to the 15 competing universities, including five Minority Serving Institutions, for students to pursue advanced mobility research and experiential learning. This investment supports the recruitment and retention of underrepresented minority students and faculty to help build an EV talent pipeline that reflects the diversity of America and makes room for more domestic manufacturing to strengthen our energy independence.
Teams will be challenged to identify and address specific equity and electrification issues in mobility through the application of innovative hardware and software solutions, conduct outreach to underserved communities and underrepresented youth to increase awareness about advanced mobility, and recruit underrepresented minorities into STEM fields.
At DOE, we are excited to see what these teams will accomplish in supporting the country’s transition to clean energy and electric vehicles. I encourage you to learn more about the 15 North American universities selected to join the EcoCAR EV Challenge by visiting ecocarevchallenge.org or discovering more about the rich history of AVTCs at avtcseries.org.
Michael Berube is the Deputy Assistant Secretary for Transportation for DOE’s Office of Energy Efficiency and Renewable Energy.
A few years ago, my wife Shelly and I visited Greece. It filled me with wonder to think about how challenging life must have been, and yet the ancient Greeks built massive architectural structures without the modern tools and machines we have today.
When I think about the last 30 years of the biodiesel industry, I am reminded of the Greek God, Sisyphus. In Greek mythology, he pushed a giant boulder uphill for eternity. I’d say our industry, like other alternative fuels, has felt that way a number of times.
However, I’d say fuels like biodiesel, renewable diesel, and sustainable aviation fuel are better represented by Athena. She was known to represent wisdom and the virtues of justice, skill, and victory. We have never let the challenges overtake our spirits. Instead, we have held our heads high and strategized our next moves. At last, we’re reaching a point we had long dreamed of – perhaps even beyond what we initially envisioned. The tables have turned. Our fuels are in demand to help people meet their goals and help America reach a low-carbon future. We’re here and we’re making an impact now – not waiting until decades into the future.
As the biodiesel industry celebrates its 30th anniversary, I am reminded that the soybean farmers, the soybean checkoff, and leaders who founded our organization had great faith, foresight, and fortitude. These humble beginnings in 1992 and the small group of leaders and visionaries who started our industry are the reason our industry, even today, seems like a family – and now a growing family! In 1992, no biodiesel had been produced commercially yet, and today, we produce 3 billion gallons a year of biodiesel and renewable diesel.
The emphasis on carbon reduction across the globe has opened new doors. Net-zero commitments from governments and corporations have raised interest in low carbon fuels like never before. We are making great strides in markets like marine, rail, and aviation that previously had been, at best, neutral to us. Likewise, when considering options to help reduce carbon dioxide and other greenhouse gas emissions from their vehicles and equipment, Original Equipment Manufacturers and fleets are also taking a much deeper look at us.
While electric solutions are still under development, clean advanced biofuels such as biodiesel and renewable diesel are readily available now for use in existing diesel engines. Most OEMs, including Ford, General Motors, Stellantis, Cummins, and many others, currently support the use of 20 percent biodiesel blends in their diesel equipment. However, forward-looking fleets from coast to coast – including several in California, Chicago, Madison, Washington D.C., and New York City – are looking to higher blends of biodiesel, even up to B100, to lower their carbon footprint even more dramatically.
Our vision statement says that “biodiesel, renewable diesel, and sustainable aviation fuel will be recognized as mainstream low carbon fuel options with superior performance and emission characteristics.” There is room for all these fuels at our industry’s family table. In that spirit, the National Biodiesel Board has added another leaf.
This January, we made it official: We are now Clean Fuels Alliance America.
This new brand will transform our image and position us as a proven, innovative part of America’s clean energy mix now and in the future. In the process, we’re inspiring America’s energy and transportation leaders to discover new sources of scalable, cleaner fuels.
Biodiesel remains a foundation of our association. Our country couldn’t be having real conversations about carbon reduction targets today if it weren’t for the work of those in biodiesel.
Athena was known as ‘one who fights in front.’ As Clean Fuels Alliance America, we move to the front, proudly blazing a new path forward in clean energy.
Donnell Rehagen serves as the CEO for Clean Fuels Alliance America, biomass-based diesel’s preeminent trade association. Clean Fuels Alliance America is funded in part by the United Soybean Board and state soybean board checkoff programs.
Around the nation, fleets are facing more scrutiny than ever before to reduce emissions. Headlines in recent months shout that it’s ‘now or never’ if we want any chance at slowing climate change. If we really want to make a difference on the environment, solutions need to be implemented immediately to start replacing dirty diesel and gasoline vehicles from the road as quickly as possible.
While fleet owners I talk to understand the significance of operating a clean fleet, I also continue to hear the same line, “I can’t be environmentally sustainable if I’m not financially sustainable.” Mistakenly, many fleet owners think that going green has to be an expensive endeavor. While that is true of some alternative fuel options, it’s not the reality for every energy source. Propane autogas is an affordable, clean, and available fuel that’s used by thousands of fleets around the country every day.
As we think about the larger decarbonization effort, it will take a diverse mix of clean energy sources to achieve this goal. Propane autogas’ role in the movement is to ensure energy equity by offering a low-carbon solution to medium-duty (class 3-7) fleet owners without cost-prohibitive barriers. When you factor in the cost of a new vehicle and the costs for fuel, fluids, maintenance, and repairs, propane autogas provides the lowest costs for the lifetime of the vehicle, providing a short return on investment.
Let’s consider just the cost of the fuel itself. As oil prices fluctuate, propane autogas can beat diesel on price per gallon by as much as 50 percent. In most cases, propane autogas suppliers will work with fleet owners to create a mutually beneficial fuel contract that allows fleets to lock in a set price per gallon for a period of time. This is another layer of protection against fluctuating fuel prices and is especially helpful during times of high gasoline or diesel prices like much of the country has experienced in recent weeks.
Plus, propane autogas infrastructure is also affordable. In most cases, propane suppliers will provide the infrastructure equipment to a fleet at no cost in exchange for a mutually beneficial fuel contract. The refueling infrastructure is also designed to scale and can easily adapt to the varying needs of any size fleet.
So, how clean is propane autogas? Today’s engines are 90 percent cleaner than mandated EPA standards, with effectively zero particulate matter emissions and 96 percent fewer NOx emissions than clean diesel engines. The latest propane autogas engine technology is classified as near-zero and has moved the fuel even closer to achieving zero emissions levels.
Not to mention, a recent study by the Propane Education & Research Council found propane-powered medium-duty vehicles provide a lower lifetime carbon footprint in the majority of U.S. states when compared to medium-duty EVs that are charged using those states’ electric grid. This is due to the amount of carbon that is produced from each state’s unique energy mix for electricity generation using coal, petroleum, or other primary sources.
While EVs may have zero tailpipe emissions, emissions are generated prior to the wheels turning on the road through the electric grid and the powertrain (chiefly battery manufacturing) production. When comparing the difference in lifecycle equivalent carbon dioxide (CO2eq) emissions of a single medium-duty vehicle, propane autogas on a national average emits 125 tons of CO2eq less than an electric medium-duty vehicle.
The study also reviewed the lifetime carbon emissions of a medium-duty vehicle operating on renewable propane – an energy source made from a mix of waste residues and sustainably sourced materials, including agricultural waste products, cooking oil, and meat fats. It has the same chemical structure and physical properties as conventional propane, but because it’s produced from renewable, raw materials, it has an even lower carbon intensity. As the study found, renewable propane medium-duty vehicles currently provide a lower carbon footprint solution than comparable EVs in every U.S. state except Vermont.
As we think about both the immediate need to start reducing emissions today and the long-term goal of providing a better environment for the next generation, propane autogas is a critical energy source that will help to move the needle in both situations. Decarbonization will not be solved overnight. But propane’s role as a clean energy source that can help fleets conquer their financial sustainability will set us on the path to one day reach better environmental sustainability.
Steve Whaley is the director of autogas business development for the Propane Education & Research Council, Propane.com/Fleet-Vehicles
The electric revolution is upon us, the Infrastructure is not.
With the recent signing of the Glasgow Declaration on Zero Emission Cars and Vans at the 2021 United Nations Climate Change Conference, multiple automakers and 33 countries are now officially working toward the goal of making all new cars and vans sold globally zero emission by 2040. ‘Zero emission’ in this case is defined as producing zero greenhouse gas emissions at the tailpipe, as accomplished by electric vehicles, for example.
While much has been reported about the ever-increasing number of EV offerings and the growing interest and demand, there are still major hurdles to mainstream adoption. One of the most pressing is the dire lack of charging infrastructure.
Today, there are less than 2 million EVs in operation within the United States, according to some estimates, and fewer than 100,000 charging stations to service them — nearly a third of them in California. With projections for EVs in operation within the U.S. exceeding 25 million by 2030, the calculus on what it will take to keep those zero-emission vehicles running is staggering: Approximately 13 million EV stations need to be installed by 2030, which equates to 120,000 a month in the United States alone.
The trillion-dollar infrastructure bill just signed into U.S. law does include $7.5 billion earmarked for building out EV charging networks. But given the anticipated growth rate of EVs versus today’s infrastructure, it’s going to take a lot more than that. This is where companies like Charge Enterprises come in.
From on-the-go power banks to micro-mobility and EV charging stations, we design and engineer, select and source equipment, install, and coordinate software selection and if the customer requires, implement remote maintenance and monitoring services. So whether it’s a ChargePoint system or a Blink system, or a third-party charging company, what we do is the infrastructure build-out and ecosystem planning of the site location. Servicing and educating the client is critical in establishing a reliable, safe, scalable and flexible site for future demands.
We are equipment- and software-agnostic, which means that we can provide custom solutions with careful consideration of various business use cases to ensure efficient, effective, design plans that not only satisfy current needs but also account for future scalability, growth, and ever-advancing technology. Our experienced team with nationwide scale offers turnkey engineering, design, equipment and software specifications, planning, sourcing, and installation for EV charging ecosystems.
As important as EV infrastructure is, true global sustainability isn’t confined to how we fuel our mobility. That’s why our recent strategic alliance with the National Community Renaissance, one of the nation’s largest nonprofit developers of LEED certified affordable housing, is such a critical compliment to Charge’s infrastructure solutions for intelligent wireless campuses. This partnership will further align with National CORE’s dedication to providing high-performance affordable housing that integrates energy and sustainability to reduce harmful emissions, making all communities more sustainable, healthy and equitable places to live, work, and play – especially historically disadvantaged communities.
The demand for clean, sustainable charging infrastructure is building, whether for commercial properties, fleet depots, truck/van centers, retail facilities, auto dealerships, government, or residential. Our strategy is to make it simple for everyone to switch to an EV and other electrified technology. We’re helping accelerate the transition away from fossil fuels toward a fully electric future.
Andrew Fox is Founder, CEO, and Chairman of Charge Enterprises, a portfolio of global businesses specializing in communications and electric-vehicle charging infrastructure.
As we forge ahead in 2021, consumers and businesses alike are feeling a sense of cautious optimism. While the personal, political, and professional anxieties from last year won’t go away with the flip of a calendar, we can share reasons for hope for a brighter year ahead. One of those reasons is around a renewed focus on climate action, specifically around clean transportation through electric vehicles (EVs) and the charging infrastructure to support them. This hope is giving many of us a brighter – and greener – outlook for 2021 and beyond.
It’s exciting to see a growing wave of electric vehicle offerings on the horizon, helping create more interest and demand than ever before. But while new makes and models are inspiring, the industry is reaching an inflection point. Making EVs mainstream will require much more than just the vehicles themselves. The U.S. and the world need significantly more charging infrastructure and a stronger overall charging ecosystem to drive true adoption, things my colleagues and I work toward every day.
Let’s think about existing infrastructure as a starting point. Currently, there are well over a million individual gas pumps across the United States, and almost everybody is familiar with how they operate. For reference, there are less than 100,000 individual public chargers, and most Americans don’t know how to use them. The collective ‘we’ have some work cut out for us.
For EVs to really take off, consumers need to start seeing charging stations much more frequently than they do today. And the charging experience needs to take minutes, not hours. That’s why Electrify America is building the nation’s largest open, ultra-fast DC fast charging network, with chargers capable of up to 350 kW. We’re investing heavily to ensure the EVs of today and of the future will be able to charge faster than ever imagined. By the end of 2021, we expect to install or have under development approximately 800 total charging stations with about 3,500 DC fast chargers, including along two cross-country routes.
One of the many benefits of EVs is the ability to offer drivers multiple options when it comes to powering up. Charging is still a new experience for most, so emphasizing this point has been meaningful in our ongoing EV education and awareness efforts. Offering seamless solutions for home and workplace charging, in addition to continued focus on public ultra-fast charging, is helping to build confidence for any driver or fleet operator interested in making the switch to electric transportation.
As enthusiastic as we are about our progress, we know we can’t create the infrastructure and EV ecosystem needed to ignite this revolution alone. We need industry partners, automakers, utilities, businesses, and government to all come together to accelerate our charging capabilities to help spur future EV adoption – and we’re working with many groups to make that happen. A lack of collaboration can crush this movement, which remains in a hopeful, yet fragile place. More investment and partnerships across the board are what will keep the momentum going to adequately handle a growing number of EVs. That’s why we believe continued investment in charging will drive EV adoption, and that all stakeholders should be fully supporting all charging industry growth.
While lack of public charging remains a main deterrent for EV purchase consideration – an issue we are working hard to address – the true beauty of EVs is that between home, public, and workplace charging options, drivers will actually have more opportunities to power their vehicles than gas-powered cars. And that’s a future worth celebrating.
As Chief Scientist for Toyota Motor Corporation, one of my most important responsibilities is to think about how to address climate change using science, data, and facts. When it comes to electrification, my role is to maximize environmental benefits with the limited number of battery cells the world can produce.
Toyota’s way of thinking about this question is strongly influenced by the Toyota Production System (TPS). It forms the basis for how we conserve resources and eliminate waste to maximize the quality, durability, reliability, and value of our products. Based on TPS, we believe that maximum net environmental benefit can be achieved by considering the most limited resource – in this case the battery cell.
Every battery cell is an investment of environmental and financial resources. Carbon is emitted for every battery cell produced. Once built, every battery cell has the potential to produce more benefit than what was invested, or what we call a positive Carbon Return on Investment (CROI). But that CROI is not guaranteed. The result depends on how the battery cell is put to use. The physics of climate change (which accumulates carbon in the atmosphere for decades) and limited battery cell production suggests that we minimize total carbon emissions from all of the world’s vehicles by maximizing the CROI of every manufactured battery cell.
Let’s consider the average U.S. commute of 32 miles roundtrip each day. In this case, a 300 mile range battery will yield a very low CROI. The reason is that the vehicle carries excessive battery capacity and excessive weight that is rarely needed or used. The bulk of the energy stored in the battery cell (and the battery cell’s weight) will be carried around most of the time for no purpose, consuming extra energy for its transport, and wasting the opportunity to use that energy for more benefit to the environment. In TPS terms, we consider this to be a waste of transport and inventory. Put another way, that same battery capacity could be spread over a handful of plug-in hybrid vehicles (PHEVs), each of which would utilize most, if not all, of the battery capacity while rarely using its internal combustion engine (ICE). In this case, the overall CROI is higher for the same number of battery cells.
As another example: If a battery cell in a battery electric vehicle (BEV) is recharged by a high-carbon intensity powerplant, the CROI of that cell will be small compared to one recharged by a renewable energy powerplant. So in this case, consider a situation of two cars – one ICE-type and one BEV, and two geographic locations – one with renewable power and the other with high-carbon intensity power. More net CROI will be derived by operating the BEV in the area with renewable power and the ICE in the geography with non-renewable power than the other way around.
Finally, if a battery cell ends up in a long-range BEV whose price puts it beyond the budget of a consumer, or in a street parked vehicle that must use high-rate chargers that lower the battery cell’s life, the CROI will again be smaller than what is possible, versus placing the battery cell into, for example, a PHEV.
BEVs are an important part of the future of electrification. But we can achieve greater carbon reductions by meeting customer needs and circumstances with a diversity of solutions. Wasted CROI harms the environment because there is a limited supply of battery cells, and the cost of production to the planet and to the producer is not zero. Given this fact, how and where battery cells are actually used and charged are critically important.
In summary, given limited battery cell production and significant environmental and financial costs, the way to maximize CROI is to target battery cells into diverse vehicle types – hybrid vehicles, plug-in hybrid vehicles, battery electric vehicles, and fuel cell vehicles that match customer needs and circumstances, and maximize the CROI for every battery cell. This strategy is similar to running a factory efficiently in the Toyota Production System, where efficiency is maximized by eliminating waste at each stage of production and maximizing the benefit derived from every resource and cost. And it forms the basis for Toyota’s belief in this result.
For most Americans, our transportation choices are limited to the fuels offered at the local gas station. For generations, regular gas stations served our needs pretty well, but America’s transportation needs are changing. Every day we learn about new choices in alternative fuel vehicles, advancements in vehicle efficiency, and new, cleaner types of fuel, so it’s bewildering that gas stations haven’t kept up with these changes. Gas stations today offer a fundamental lack of choices and are no longer in step with the way Americans seek to move about their lives.
With 160,000 fueling locations across America, gas stations outnumber McDonalds, Burger King, Subway, Starbucks, and Taco Bell…combined. But as consumers’ transportation needs change, there is no effort by Big Oil to change with them. Fifty percent of the cars in Big Three showrooms are now capable of being powered by something besides oil. Domestically produced renewable fuels have surpassed imports from Saudi Arabia, and gas consumption is at a 10-year low – yet gas prices remain at all time record levels. Mobility is transforming in other ways with ride sharing, public transit, cycling, and telecommuting all on the rise. Yet still no change in our fueling infrastructure.
At Propel, we have created a new vision for the way gas stations serve the mobility needs of a community, one that meets the changing habits of America’s drivers. Earlier this year, we launched our first ‘Clean Mobility Center’ in Fullerton, California, to offer consumers new, more sustainable, domestic fuel and transportation choices that are more in line with their values, and also reduce our collective impact on the environment while supporting local economies and decreasing our nation’s reliance on foreign oil.
Our Clean Mobility Centers provide a distinctly different customer fueling experience, offering a full range of high performance renewable fuels (Flex Fuel E85, biodiesel) alongside the conventional gasoline that drivers use today. More than 17 million cars on American roads can fuel with something besides oil, and for those that can’t, we provide drivers an opportunity to be part of the solution and a movement towards clean mobility.
With a focus beyond fuel, our Clean Mobility Centers also offer a series of unique, community-friendly features not found at any other gas station in the nation. To maximize fuel economy, we offer free air to fill-up vehicle tires and we have installed bike repair stations so cyclists can tune up and fix bikes along their route. Additionally we have kiosks that provide local bus and other mass transit maps and routes, along with information about rideshare opportunities. Finally, we have two new features at the fueling island: recycling on the go, and the nation’s first carbon offset program, which for only $1 per fill-up allows drivers to offset the carbon emissions from their purchase right at the pump and support local clean energy projects.
Looking forward, as new, even more sustainable fuels and transportation options come to market, we’ll use the infrastructure we’re building today to offer new choices. In fact, we’re actively exploring options such as renewable gasoline and diesel, cellulosic fuels, algae-based fuels, natural gas, EV charging, and car sharing.
Just as we’ve seen in other industries, such as manufacturing labor, fair trade practices, or organic agriculture, consumer choice can be the biggest force for change in our society. At the pump, consumers can now vote with their wallets and choose a fuel company that better aligns with their values and interests. No matter what type of car they drive, consumers can use our new stations and learn about cleaner mobility options along the way. With 160,000 outlets and regular contact with customers, the fueling industry is in a unique position to engage consumers and lead them to a brighter future. So far, though, our industry hasn’t shown much leadership. America’s transportation needs are changing, and we believe it’s time our gas stations changed, too.
Matt Horton is CEO of Propel Fuels, www.propelfuels.com
I recently climbed out from behind the wheel of a 2013 Lexus GS450h. Fully loaded, this very luxurious hybrid will easily top $70,000 MSRP. And that’s not the most expensive hybrid offered by Toyota’s luxury brand. The LS600h L starts at $119,910.
Back to the GS450h: It’s hard not to be impressed with the car’s performance – delivered via 338 combined horsepower and a 34 mpg EPA highway rating, wrapped in a very stylish sedan with luxury appointments.
That got me thinking about the difficulty of bringing advanced technologies to the automotive market. We sometimes hear complaints that a powertrain or technology breakthrough ‘shoulda’ been out years ago. Truth is, it takes considerable time and money to bring any new idea to market these days. Big breakthroughs take even longer and often require a major capital investment on the part of the automaker.
The Prius is a good example. Toyota bet on a forward-thinking, long-term approach with this iconic gasoline electric hybrid. You can bet that Prius isn’t a profitable platform for Toyota when viewed in traditional automotive parameters. But now with over a million Prius models on the road, ‘Prius’ is used as a generic term when talk turns to hybrids. It’s difficult to measure the green halo that the Prius casts across the entire Toyota brand, but it’s certainly a marketing home run. Toyota has the resources to make that kind of multi-year investment. Many companies, especially smaller startups, need to be profitable early in the game.
That’s why we often see green technology introduced in cars that are much more expensive than the Prius. Both Fisker and Tesla took this approach with their launches working the ledger with high-end models eclipsing six figures. In a blog some six years ago, Tesla founder Elon Musk pointed out that his company’s strategy was to “enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.”
At the time of his blog, Musk’s plan was to follow through with a second model that would be roughly half the cost of the $89,000 Tesla Roadster. As recent history has shown, that $89,000 MSRP ultimately became $111,000, which meant the cost of a more affordable coming sedan would likely be higher as well. That sedan is the highly acclaimed and awarded Tesla Model S. Initially, Tesla is only delivering the limited edition Model S Signature Series at a cost of $95,000 to $105,000. The plan is to next roll out less expensive Model S variants with an MSRP starting at $59,900 with smaller battery packs and shorter, although still exemplary, electric range.
Though battery cost is a prime contributor, this economic reality is not limited to hybrids or electric vehicles. Even clean diesel feels the influence of advanced technology running up cost. A diesel is generally more expensive to produce than a gasoline engine. When you add the cost of federally mandated high-tech pollution controls and exhaust aftertreatment systems, it’s easier to merge clean diesel into higher-end luxury vehicles and more expensive three-quarter ton and larger pickup trucks.
Clearly, the path to vehicles using highly-advanced technology is not a quick or easy one, nor as it turns out, one without cost.
Todd Kaho is executive editor of Green Car Journal and CarsOfChange.com
Automakers, and especially Detroit’s Big Three, will see greater sales and profits from stronger federal fuel economy standards.
That’s what a recent report by Citi Investment Research in collaboration with Ceres found. It looked at what Washington’s plans to boost fuel economy standards to 54.5 mpg by 2025 would mean for the industry in 2020.
The analysis found that in 2020, General Motors, Ford, and Chrysler could look forward to a 6 percent hike in profits – an extra $2.44 billion – under the proposed standards.
Foreign automakers would also benefit. They can expect a 5 percent rise in profits – an extra $2.31 billion in 2020.
As gas prices continue to rise, better mileage drives sales. Customers want cars that go farther on a gallon of gas. In fact, Kelley Blue Book's latest consumer survey found that 66 percent of people shopping for new cars are taking rising gas prices into account. Some shoppers are changing their minds about what vehicle to buy. Others say they’re considering more fuel-efficient cars they haven’t considered before.
These consumers can do the math. The Citi report finds that the added costs of technologies required to meet proposed fuel economy improvements in 2020 are extremely cost-effective. Even if gas prices sink as to low as $1.50 a gallon, drivers would still come out ahead. And higher gas prices would mean even greater savings.
All car companies selling in the U.S. will have to meet the standards, which means a level playing field. Buyers will be able to choose from a wide range of fuel-efficient vehicles.
American automakers will benefit the most. That’s because U.S. companies have historically relied on larger vehicles that guzzle more gas. The proposed standards will narrow that gap in fuel economy. Under the proposed standards, trucks and larger cars, in which the Detroit Three are more invested, will see relatively greater improvement in fuel economy, enhancing their consumer appeal. In addition, the prices, and therefore automakers’ variable profits, will be higher for trucks and larger cars than for smaller cars.
It’s important to note that U.S. carmakers can get most of the way to the new mileage standard simply by improving the internal combustion engines they already make – by using technologies already in play or almost market-ready. Variable valve timing and lift, cylinder deactivation, turbocharging, gasoline direct injection and other technologies – along with some increase in hybrid, plug-in and electric vehicles – will get us to the new national mileage goal.
The proposed standards will trigger a wave of innovation that will help U.S. automakers’ long-term global competitiveness. The Citi report found that suppliers of key fuel economy technologies would benefit as well. And what’s good for Detroit is good for America: a healthy automotive sector leads to more jobs across the industry’s huge domestic supply chain.
The standards will also create jobs across the economy. Ceres’ More Jobs per Gallon report found that boosting gas mileage requirements will lead to 484,000 new jobs across the country, with net job gains in 49 states. That’s because the money consumers save on fuel will be diverted to the broader economy, flowing to a broad range of sectors.
So strengthening the national fuel economy standards will create a rising tide that lifts all boats. Car companies and their suppliers will see greater profits and sales. Consumers will save money at the pump. Employment will rise and boost the larger economy. And the U.S. will gain a greater share of the world’s rebounding automotive business.
It’s no wonder the major car manufacturers, investors, businesses, consumer groups, and auto workers’ unions are supporting the federal proposal to boost fuel efficiency. It will benefit the industry, its customers, and the economy.
Carol Lee Rawn directs the Transportation Program at Ceres, which mobilizes a network of investors, companies and public interest groups to tackle sustainability challenges. Ceres also directs the Investor Network on Climate Risk, which supports 100 institutional investors with assets totaling $10 trillion.
Though natural gas vehicles (NGVs) have been around since the 1930s, they have never been able to break through the barriers to their widespread application in America – special infrastructure requirements, a shortage of fueling stations, and awkward, expensive fuel tanks that must be filled at pressures as high as 3600 psi. Moreover, until just a few years ago, the U.S. was importing natural gas, so there was no strategic benefit to converting our transportation fleet to its use.
But in the last two years, a major change has occurred in the energy market. Natural gas reserves have started growing…and fast. The Energy Information Administration has revised its Annual Energy Outlook (AEO) for 2011 to reflect a 25 percent increase in natural gas production in the lower 48 states, relative to its 2010 forecast. Further projected increases in well productivity lead to a near-doubling for predicted shale gas production in 2035 compared to the 2010 reference case.
Most new natural gas comes from deep underground rock structures, including shale. Recent improvements in hydraulic fracturing, or ‘fracking,’ a controversial process that some critics claim can hurt the environment, have made it economical for natural gas companies to extract a greater supply of such gas from unconventional sources.
Unlike those for gasoline, the compressed natural gas (CNG) markets are relatively insulated from geopolitical shocks. The price of CNG has been, and will likely continue to be, cheaper and more stable over the long term than that of gasoline. CNG currently costs the equivalent of about $2 per gallon, roughly half the current price of gasoline. What’s more, natural gas burns cleanly, emits far smaller amounts of criteria pollutants, and is already available to half of all homes in America through existing connections. Most important, America has sufficient natural gas and does not have enough oil.
The combination of increasing natural gas supplies and low cost compared to conventional motor fuels provides a unique opportunity to reduce our dependence on imported petroleum by using CNG as a vehicle fuel.
The drawbacks to natural gas: It has been tried in cars before and has failed. The liquefying of natural gas consumes too much energy. There are currently fewer than 1,000 publically available CNG refueling stations in the United States, in comparison to nearly 200,000 gas stations. The moment you leave the driveway, you will suffer from massive range anxiety. Where is there another natural gas station?
So we need solutions that will allow us to use our new-found natural gas wealth. We cannot pay for infrastructure. We need low-cost fuel that comes without range anxiety, big storage tanks, and the need for expensive compressors in every house. No sacrifices.
A possible solution: Bi-fuel natural gas/gasoline vehicles, with low pressure/low cost home refueling. The argument to create PHEVs (plug-in hybrid electric vehicles) has already been convincingly made. Yet in a side-by-side comparison, home-fueled NGVs might be much cheaper, and much simpler, than home-charged electric vehicles.
Bi-fuel vehicles that run on both gasoline and natural gas can use a fairly simple parallel-injector architecture. Bi-fuel allows the use of a relatively small, inexpensive CNG tank designed for a driving range of 50 miles on natural gas (the average driver only drives 27 miles, so why make the tank any bigger?). A bi-fuel vehicle also has a gasoline tank, so range anxiety is not a problem. And there is no need to compress the gas to 3600 psi, because gas volume is no longer a concern – home compressors can be made both inexpensive and durable.
The solution to America’s oil dependency involves using a range of alternatives to replace gasoline. This means using every American advantage to reduce our use of petroleum. Adding natural gas to the arsenal of alternatives will do much to break our oil addiction and increase our energy independence.
Don Hillebrand is Director of the Center for Transportation Research at Argonne National Laboratory
I am excited to update you on the recent progress that we’re making at Southern California Gas Company (SoCalGas) and San Diego Gas & Electric Company (SDG&E) in the compressed natural gas (CNG) vehicle market. This technology is here now, and the future is bright!
I’m extremely bullish about natural gas as a transportation fuel. Compared to other fuels, CNG is cleaner, less expensive, abundant, and domestically produced. Along with our customers, we are taking the lead in developing the Southern California market, which plays a significant role in the development of the U.S. market as a whole. Let me share with you a few of our initiatives and successes.
First, there are about 80 public-access CNG refueling stations across SoCalGas’ and SDG&E’s service territories. Every month, we hear from owners of gasoline stations who want to add CNG capability to their existing stations. These opportunities are especially exciting in that they create awareness of CNG vehicle technology among owners of gasoline vehicles. These stations have prominent locations, full retail signage, snack shops, and all of the other expected conveniences. Without a doubt, development of this public infrastructure will help drive the adoption of light-duty natural gas vehicles (NGVs) by individuals.
On the commercial side, there are nearly 200 private CNG refueling stations across our service territories. These stations serve major fleets including over 2,200 transit buses in use by Los Angeles Metro, more than 400 buses operated by the Los Angeles Unified School District, as well as other fleets such as Waste Management, UPS, and AT&T. This past fall, SoCalGas announced plans to purchase approximately 1,000 new dedicated NGV trucks to support its fleet operations. In addition, Los Angeles Department of Transportation began deploying its new fleet of 95 new CNG-powered Commuter Express coaches.
But the transit and heavy-duty segments are just the beginning. Elsewhere on the vehicle front, we are playing an active role in the Drive Natural Gas initiative sponsored by the American Gas Association and America’s Natural Gas Alliance. With this initiative, we are collaborating with other NGV industry partners to address the most pressing issues in the marketplace. Among other tasks, we are working closely with vehicle original equipment manufacturers to develop prototype CNG vehicles in new segments, such as a sport utility vehicle, mid-size sedan, and even a sports car! We are also working to identify potential manufacturers who can develop a more affordable home refueling appliance, which we hope in turn will help stimulate the market for personal use light-duty CNG vehicles.
Finally, SoCalGas is also taking the lead in innovation. In October, we unveiled a new modular CNG refueling station at the SoCalGas Riverside base. Developed by Galileo, this station represents dramatic reductions in space, time, and potentially cost to provide compressed natural gas for transportation applications. We also recently filed an all-new Compression Services Tariff application with the California Public Utilities Commission that, if approved, will allow SoCalGas to construct, own, and operate gas compression equipment on customer facilities for NGVs and other applications, such as Combined Heat and Power systems. The new Tariff will be attractive to a wide range of customers, including those with limited capital budgets who will be able to avoid most of the up-front equipment and construction costs. The growth outlook is very positive for natural gas vehicles and the fueling infrastructure, and we expect that this momentum will continue to increase. We feel fortunate to have so many positive and energetic partners in the industry and we look forward to continue to foster its growth here in the U.S.
Hal Snyder is Vice President of Customer Solutions for Southern California Gas Company and San Diego Gas & Electric
