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Issues Of The Environment: Major Automakers Committing To Electric And Automated Vehicles

Jan 23, 2019

Charles Griffith, director of the Climate & Energy Program at the Ecology Center in Ann Arbor
Credit The Ecology Center / ecocenter.org

This year's North American International Auto Show is underway in Detroit.  Once again, the world's top automakers believe the future lies in electric and automated vehicles.  In this week's "Issues of the Environment," WEMU's David Fair explores what impacts these vehicles may have with Charles Griffith, who directs the Climate and Energy Program at the Ecology Center in Ann Arbor.


Overview

  • The 2019 Detroit Auto Show (aka North American International Auto Show) begins this week and opens to the public on January 19th.  This will be the last year for the winter show in Cobo Hall, and the show will become a summer event.
  • There is not a concurrent theme with this year’s auto show, however.  Charles Griffith, Director of the Climate & Energy Program for the Ecology Center in Ann Arbor, says the “future looks like electric, autonomous, with essentially all major automakers committing to EV’s and AV’s.”  For example, globally, GM plans to launch 20 new hybrid, plug-in, and electric vehicles by 2023.  It also aims to launch 10 vehicles on its dedicated EV platform—including a three-row SUV, a low-roof model, and a van.  Charles also expects Cadillac to announce it will be the new lead brand for GM's EV product strategy.
  • Another notable trend is the move to build electric for the international market.  Charles says, “Global vehicle makers are planning a $300bn surge in spending on electric vehicle technology over the next five to 10 years, with nearly half of the money targeted at China.” 
  • Charles points out that “there still appears to be a disconnect with the present, with low gas prices and consumer tastes shifting to larger vehicles and trucks continuing to be strong—though they have also been getting more fuel-efficient thanks to EPA and NHTSA standards.”
  • Some promising signs, though:
  1. EV sales were up 81% last year, which is big, though still a small % of total sales (under 2%), that kind of growth rate is encouraging
  2. Many predict a tipping point sometime in next 5 - 10 years, with EV battery costs coming down to a point where EV's are at cost parity with gasoline cars; 
  3. Without new federal legislation, however, tax-credits are starting phase out for market leaders and may slow some of the short-term growth.  
  4. Many new models coming in the next few years, however, including in the more popular cross-over segments (Kia, Suburu, and other luxury brands like Audi and Mercedes.
  5. There are even some new EV trucks and SUV’s on the horizon, with Detroit area start-ups like Rivian promising Tesla-like performance with a hot new all-electric truck they’ve recently revealed,
  6. Utilities are beginning to invest in new EV infrastructure, helping to remove one of the barriers preventing some potential buyers to purchase an EV (see below)
  7. Over $4 b. in VW settlement $ are also starting to be invested in more charging infrastructure, and also replacements for older diesel vehicles, which will include new EV school buses, transit buses and potentially other medium and heavy duty EV trucks as well. (EV’s not just light-duty)
  • Regarding support from the legislative side, Charles says, “Federal reg’s:  Things in DC not good of course, with roll-backs of fuel-economy/ghg standards in the works But will likely be in the courts for years.  Many States moving ahead, with incentives for EVs, (or mandates); significant new investments in EV infrastructure.  Hopefully new leadership in Lansing will want to lead on these issues as part of the Governor’s commitments on climate, and as part of her pledge to join the Climate Alliance).”
  • Consumers Energy just got approved for new $10 m. program, and DTE proposal for another $13 m. pending (see press release for the Consumer’s program below.)
  • VW funding, Michigan’s portion of VW mitigation funds, include another $9 m. for EV infra.; and new MSU study shows that statewide network of EV chargers could be created for as little as $20 m. to support a growing fleet of EV’s within the state.  
  • Electrify America, also building out new national network of fast chargers similar in scope to Tesla's.

Detroit Auto Show - General Info

This year's show marks the end of an era and a major anniversary as Detroiters prepare to say their farewells to winter treks for auto shows at Cobo Center ahead of the switch to a June auto show in 2020, which has been promised as a one-of-a-kind auto experience.  The Detroit auto show has been around in some form — with a break during World War II — since 1907, but this marks the 30th anniversary of the show's international focus so expect a bit of a celebration from the two luxury Japanese brands — Lexus and Infiniti — that made their debuts at the 1989 show.

With fewer vehicle introductions planned, some industry watchers say the show appears as if it will be somewhat subdued compared to past events. 

VW Leads Trend to Build Electric for the Global Market

Global vehicle makers are planning a $300bn surge in spending on electric vehicle technology over the next five to 10 years, with nearly half of the money targeted at China.

Global vehicle makers are planning a $300bn surge in spending on electric vehicle technology over the next five to 10 years, with nearly half of the money targeted at China, accelerating the industry’s transition from fossil fuels and shifting power to Asian battery and electric vehicle technology suppliers.The unprecedented level of spending — much of it by Germany’s Volkswagen — is driven in large  measure by government policies adopted to cut carbon dioxide emissions and will extend technological advances that have improved battery cost, range and charging time to make electric vehicles more appealing to consumers, according to an exclusive Reuters analysis of public data released by those companies.

China has for decades played catch-up to German, Japanese and American vehicle makers, which dominated internal combustion vehicle technology.  Now, China is positioned to lead development, industry executives say. “The future of Volkswagen will be decided in the Chinese market,” said Herbert Diess,  CEO of VW, which has decades-old joint ventures with two of China’s largest vehicle makers, SAIC Motor and FAW Car.

Speaking to a small group of reporters in Beijing, Diess said China will become one of the automotive powerhouses in the world. “What we find is really the right environment to develop the next generation of cars and we find the right skills, which we only partially have in Europe or other places,” he said.  “We have very clear policies established here in China," he said, adding that policymakers and regulators require a shift to electric vehicles.

As China and other countries place more restrictions on conventional petrol and diesel engines, companies have accelerated the shift to electrification.  A year ago, global vehicle makers said they planned to spend $90bn on electric vehicle development.

The $300bn that vehicle makers have earmarked to put electric vehicles into mass production in China, Europe and North America is greater than the economies of Egypt or Chile.

Almost one-third of the industry’s electric vehicle spending — about $91bn — is being committed by the Volkswagen Group, which is aggressively trying to distance itself from the dieselgate scandal, which has cost it billions in penalties and legal settlements.

VW’s sweeping electrification plan envisions capacity on three continents to build up to 15-million electric vehicles by 2025, including 50 pure electric and 30 hybrid electric models.  Eventually, VW plans to offer electrified versions of all 300 models in its 12-brand global portfolio, which includes Audi and Porsche.

VW’s staggering electric vehicle budget dwarfs that of its closest competitor, Daimler, which has committed $42bn. In comparison, General Motors (GM), the leading US vehicle maker, has said it plans to spend a combined $8bn on electric and self-driving vehicles.

Roughly 45%  of the global industry’s planned investment and procurement spending, more than $135bn,will occur in China, which is heavily promoting the production and sale of electric vehicles through a system of government-mandated quotas, credits and incentives.

As a result, spending by major Chinese manufacturers from SAIC to Great Wall Motor could be matched or even exceeded by multinational joint venture partners such VW, Daimler and GM, as they dramatically expand their electric vehicle portfolios in China and ramp up battery purchases from Chinese suppliers.” 

Utilities Invest in EV InfrastructureMichigan Public Service Commission approves PowerMiDrive initiative to advance charging infrastructure in Michigan

Michigan approves first electric vehicle charging infrastructure program [DTE to follow with even larger program.]

LANSING – Michigan’s first electric vehicle charging infrastructure program, Consumers Energy’s PowerMiDrive initiative, was approved today by the Michigan Public Service Commission (MPSC). Charge Up Midwest, a coalition of organizations working to advance electric vehicles throughout the Midwest, worked closely with Consumers Energy and the MPSC as the pilot program was developed, and contributed to the proposed settlement agreement that preceded the MPSC’s order.

“We applaud the Public Service Commission and Consumers Energy for taking this important first step to advance electric vehicles in Michigan and keep our state on the cutting-edge of the rapidly changing mobility sector,” said Charles Griffith, climate and energy program director at the Ecology Center. “This program is the first of its kind in Michigan and will promote buildout of charging infrastructure, which is one of the key challenges facing electric vehicle advancement in Michigan.”

The PowerMiDrive pilot program has been in development for more than two years. Today’s decision at the MPSC is the culmination of a stakeholder workgroup process facilitated by the MPSC. The decision approves initiation of a $10 million, three-year pilot program to support installations of EV charging infrastructure at homes and residences, multi-unit dwellings, workplaces, and other public locations, as well as fast-chargers along highway corridors. The program will utilize rebates and consumer education to encourage program participation, and encourage “off-peak” charging through incorporation of time-of-use rates.  Today’s decision allocates an additional $2.5 million for the program from what was originally proposed by Consumers Energy.

“We want to make sure that the benefits of electric vehicles are available to everyone, including folks in apartment buildings or anyone that doesn’t own their own garage,” said Mark Nabong, senior attorney at the Natural Resources Defense Council.  “Consumers’ new program can help more people access electric cars as a clean, cheaper alternative to gasoline cars.”

Consumers Energy is not the only utility company with proposals to expand electric vehicle charging. DTE Energy currently has a $13 million pilot program for consideration before the MPSC. Michigan’s two major utility companies are taking significant steps to promote EV charging infrastructure in the state, and if DTE Energy’s proposal is approved, Michigan will have the most forward-looking electric vehicle charging program in the Midwest.

“Today’s decision puts Michigan on the road to cleaner air and a smarter grid by improving drivers’ access to our cleanest and cheapest fuel—electricity,” said Joe Halso, associate attorney with the Sierra Club.  “We look forward to more work with the Commission, Consumers Energy and stakeholders to implement PowerMIDrive and position Michigan as a leader when it comes to planning for an electric vehicle future.”  

“The MPSC’s decision is a major win for Michigan utility customers who will benefit with lower rates because more charging will occur at night,” said Robert Kelter, senior attorney at the Midwest-based Environmental Law & Policy Center.

Charge Up Midwest is a partnership of environmental and clean energy organizations actively working to increase electric vehicle deployment throughout the region in Illinois, Missouri, Michigan, Minnesota, and Ohio. 

Auto Show Announcements:

-Cadillac saying it will be the new lead brand for GM's EV product strategy, with new Caddy electric crossover in 2021

-Globally, GM plans to launch 20 new hybrid, plug-in, and electric vehicles by 2023. It also aims to launch 10 vehicles on its dedicated EV platform—including a three-row SUV, a low-roof model, and a van.

-of course, the Backdrop of GM’s recent job cuts not playing well there with many there.

-Hyundai Kona/Kona EV “NA utility vehicle of the year”; beating out the Jaguar I-Pace EV and other notables in the category; the company hopes the “affordable" cross-ver utility will hit the “sweet spot” in the EV market

-not sure better than the former car of the year, Chevy Bolt, but expands the range of EV options which is good for consumers

-Dodge Ram pickup, by contrast, easily won truck of the year, and along with a number of new features also includes a mild-hybrid powertrain and other fuel-efficient technologies

-VW, big news, saying it will build in a new U.S. assembly plant based in Tennessee to build Electric vehicles.  Would have been nicer if they located here in the auto state, with UAW workforce, however.  

-VW’s first planned EV is the ID Cross, another crossover vehicle, due around 2020, to be followed by the ID Buzz, the successor to its iconic microbus.  We’re not yet sure what vehicle will be build at the Tennessee plant.  

-Ford tie -up, lots of curiousity; for now mid-sized trucks, but future EV’s and autonomous possible

-Nissan, and Infiniti also unveiled futuristic Electric concept vehicles, or almost unveiled in the case of Infinitii with its QX Inspiration. . .Notably, both the Nissan IM and QX feature wide “lounge-like” interiors, with batteries in the floor allowing more space for designers to play with, and reminiscent of a Chrysler EV concept a few years back which unfortunately we haven’t seen any more of.    

-Hybrid version, Ford Explorer , not as exciting.  But last year’s big news was Ford’s commitment to:

invest $11 billion over the next several years to bring 40 hybrid and electric vehicles to market by 2022, with 16 of those vehicles to be fully electric. 

-not hearing as much this year about that, unfortunately

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— David Fair is the WEMU News Director and host of Morning Edition on WEMU.  You can contact David at 734.487.3363, on twitter @DavidFairWEMU, or email him at dfair@emich.edu