The Truth About Cars » ZEV http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 07 Aug 2014 15:00:26 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » ZEV http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Review: 2014 Chevrolet Spark EV (With Video) http://www.thetruthaboutcars.com/2014/01/review-2014-chevrolet-spark-ev-with-video/ http://www.thetruthaboutcars.com/2014/01/review-2014-chevrolet-spark-ev-with-video/#comments Tue, 28 Jan 2014 14:00:38 +0000 http://www.thetruthaboutcars.com/?p=705962 Outside North America, this little blue pill of an A-segment car is known as the Daewoo Matiz Creative. It may look an obsolete computer peripheral (or a pregnant roller skate), but GM claims that the Chevrolet Spark has more torque than a Ferrari 458 Italia. As a self-described technology lover, and card-carrying resident of the […]

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2014 Chevrolet Spark EV Exterior

Outside North America, this little blue pill of an A-segment car is known as the Daewoo Matiz Creative. It may look an obsolete computer peripheral (or a pregnant roller skate), but GM claims that the Chevrolet Spark has more torque than a Ferrari 458 Italia. As a self-described technology lover, and card-carrying resident of the Left Coast, I had to check it out.

 

Click here to view the embedded video.

The Spark EV starts its life in Changwon, South Korea where gasoline and electric sparks are built by GM Korea, which was once known as Daewoo. But the heart of the Spark comes from America. GM is building the permanent magnet motors in Maryland, and instead of LG batteries made in Korea (like the Volt) GM is using American-made batteries courtesy of B456 (formerly A123. I’m not making this up). For reasons we don’t understand, GM isn’t “doing a CODA” and shipping cars sans-drivetran to America for assembly. The plant in Maryland ships the batteries and drivetrain to Korea, GM Korea inserts it in the car and ships the completed unit back to the USA.

The Spark EV exists because of my home state of California. The California Air Resources Board has mandated that Toyota, Honda, Nissan, Ford, GM and Chrysler make a total of 7,500 zero emissions vehicles available for sale by 2014 and 25,000 by 2017. By 2025, this number is expected to rise tenfold.

2014 Chevrolet Spark EV Exterior-006

Exterior

Overall length slots the Chevy between the two-door Fiat 500e and the four-door Honda Fit EV but the small Chevy is narrower than both by a decent amount. Like the Fiat and other small cars, there’s something “cartoonish” about the Spark that is endearing. It’s all about proportions. The headlamps, tail lamps and grille are all fairly standard in size, but they are large in relation to the overall vehicle. The Spark isn’t alone in this, the same thing can be said of the Mini Cooper, Fiat 500 and Fiat 500L.

Because small cars tend to value practicality in design, the Spark has a tall roofline and the wheels have been pushed as close to the four corners as possible. This mechanical necessity pays dividends in handling and interior space but causes the Spark to look unusually tall when viewed head-on.

2014 Chevrolet Spark EV Interior-005

Interior

As with the gasoline version, the front seats are flat, firmly padded and offer little lumbar support. The hard plastics on the doors make for an uncomfortable place to rest your elbow, but there is a padded armrest in the center for the driver only. This isn’t unusual for compact cars, but electrification makes for strange bedfellows and the Leaf, Focus EV and Fiat 500e are direct competition that all offer more driver and passenger comfort.

Because of the Spark’s narrow width, the Chevy is a strict four-seater putting it on par with the 500e but one passenger behind the Fit, Leaf and Focus. It was surprisingly easy to put four tall adults in the Spark, a task that is more difficult in the considerably larger Focus because of its sloping roof-line. Still, passengers will be more comfortable in the Honda Fit which offers a bit more room for four, seating for five and more headroom all the way around. Despite the Leaf’s rear seat numbers being average, because of the way the seating position in the Leaf most people will find the Nissan roomier.

As with most gas to EV conversions, the Spark loses a bit of cargo volume in the process dropping 2 cubes to 9.6 cubic feet of cargo space. That’s slightly larger than the 500e, but a long way from the Leaf’s spacious 24 cubic foot booty. Unlike the Fiat 500e however, GM chose not sacrifice passenger footwell space for battery storage.

2014 Chevrolet Spark EV MyLink-001

Infotainment

All Spark EVs get the same touchscreen head unit that is optional in the gasoline car. The system’s layout is simple, attractive and intuitive. Along the bottom of the screen sits a row of touch buttons for power, volume and a home button. After a week with Chevy’s entry-level system I was left wondering why every GM car can’t have this software. The system isn’t the height of modernity compared to uConnect or SYNC. It does not offer integrated voice commands, integrated navigation software or snazzy animations. This system’s claim to fame is in its simplicity and its integration with your smartphone.

Once you have an Android or iPhone paired with MyLink you can voice command your phone, your tunes, and anything on your device with the voice command button on the steering wheel. This means the mobile services provided my MyLink are limited to the app selection on your device. GM has taken another step that other manufacturers would do well to copy: integrated smartphone navigation. For $5 you can download the BringGo navigation app to your smartphone and the MyLink system will use the app as the processing engine and the car’s display as the user interface. This gives you a large, bright map with controls that look like a standard integrated navigation system coupled with the ability to pre-program addresses using the app before you get into the car.

In the Spark EV the MyLink system also handles vehicle charging control. You can choose to charge immediately, at a specific time, or you can program your electrical rates into the system and have the car charge when it is most economical. We of course get the typical power flow meter which is getting a little silly in the 21st century and a display that shows what percentage of your battery was used for driving, cabin heating/cooling and battery conditioning. Driving your Spark, or any EV, in a “polar vortex” will reduce battery life due to both cabin heating and battery heating.
2014 Chevrolet Spark EV Drivetrain

Drivetrain

As with most EVs on the road power is delivered by a 3-phase AC motor connected to a fixed-speed reduction gear. EV’s don’t have a transmission in the traditional sense in order to reduce weight. If you want to go in reverse you spin the motor backwards and if you need neutral you simply disconnect the motor from the electrical path. Power output is rated at 140 horsepower and torque comes in at a whopping 400 lb-ft. (Most EV makers choose to electronically limit torque to reduce torque steer and improve battery life.)

Power is supplied by a 560lb, 21.3 kWh lithium battery pack located where the gas tank is in the gasoline Spark. As with the Chevy Volt, GM is taking the cautious path to battery preservation equipping the pack with an active heating and cooling system. That’s a stark contrast to the Nissan Leaf which uses a passive cooling system. Thanks to the lightest curb weight in the group (2,989lbs), the Spark scores 82 miles of EPA range and the highest efficiency rating of any EV to date. Depending on the weight of my right foot, my real world range varied from 70-100 miles.

2014 Chevrolet Spark EV Charging Port

For any battery, heat is the enemy. Especially when charging or discharging rapidly or when charging in hot desert climates. As a result I would anticipate that all things being equal, the Spark, 500e and Focus should suffer less capacity loss and battery degradation over time than the passively cooled Nissan Leaf.

The big news for 2014 is the world’s first implementation of the new SAE DC fast charging connector. I’m a bit torn on this twist in EV development. While I agree that the DC “combo connector” is more logical and compact than the competing CHAdeMO connector found on the Nissan Leaf and most EVs in Japan, there are already several hundred CHAdeMO stations in the USA and right now there is one SAE station. I’m told there is unlikely to be an adapter so this makes three charging standards on offer in the USA. One for Nissan and Mitsubishi, one for Tesla and one for GM and BMW (the i3 will use it as well.)

2014 Chevrolet Spark EV Wheels

Drive

The biggest thing people forget about an EV isn’t charging related, it’s heat related. When you want to heat the cabin in a gasoline car you are using “waste” energy to do it. If you didn’t have the heater on, that heat would just end up dissipating via the engine’s radiator. Electric cars produce little heat when running and rely on resistive heating elements to heat the cabin and an electric air conditioning to cool the cabin. Heat pumps would be more efficient because they “move” heat rather than “creating” heat but so far the Nissan Leaf (SV and higher) are the only production cars to adopt this tech. In 50 degree weather on a 60 mile journey nearly 15% of the energy consumed went into heating the Spark’s cabin, while on my way home when it was 80 degrees only 8% of the energy was used to cool the cabin.

Thanks to a better weight balance vs the gasoline model and staggered tires, 185/55 front 195/55 rear, the Spark handles surprisingly well. Many have posited that this is simply a band-aid measure due to the weight shift in the car but all sources point to the Spark EV still being heavier in the front. This means the tire selection was likely done for handling reasons, which makes sense because the Spark beats the 500e in fun-to-corner metrics. The extra weight has also improved the ride in the small hatchback which, although still choppy on the freeway like many small hatches, it much smoother in EV trim. Steering is numb but accurate, a common complaint with EVs.

With 140 horsepower and 400lb0ft of twist routed through the front wheels, the Spark is probably the 2014 torque steer king. Is that bad? Not in my book. I found the effect amusing and perhaps even a challenge to control on winding mountain roads. The competition limits their torque output to reduce torque steer but in doing so they reduce the fun-factor as well as performance, something that really shows in the Spark’s 7.08 second run to 60, notably faster than the competition.

When it is time to stop the Spark comes up short. Stopping distances and fade aren’t the issue, it’s feel. The brake pedal is softer than average and the transition between regenerative and friction braking is probably the poorest, excluding the current generation Honda Civic Hybrid. When the system is entirely in friction braking mode (if the battery is full and you are going down hill) the brakes get even more vague, requiring more travel than when the system is regenerating to get the same effect.

2014 Chevrolet Spark EV Exterior-010

Pricing

At $26,685, the least expensive EV on the market excluding the Mitsubishi i-MiEV. For $27,010 the 2LT trim swaps cloth seats for “leatherette” and adds a leather wrapped steering wheel. That’s about the fastest and cheapest model walk in the industry. GM tells us that the DC quick charge port is an independent $750 option and it cannot be retrofitted to a Spark shipped without it. The Spark undercuts Nissan’s Leaf by nearly $2,000 and the Fiat by more than $5,000. While I might argue that the Nissan Leaf is more practical than the Spark, GM’s aggressive pricing screams value at every turn, especially if you lease. At the time of our loan GM was offering a $199 lease deal on the Spark with $1,000 down plus the usual miscellaneous fees.

The Spark’s main sales proposition for many is as a commuter car. When you factor in everything the Spark is the cheapest way to drive in California’s carpool lanes (you know, other than actually carpooling.) Despite not being less attractive than a Fiat 500e, less practical than a Nissan Leaf and less luxurious than a Focus EV, I’d probably pick the Spark.

 

GM provided the vehicle, insurance and one tank of gas for this review

Specifications as tested

0-30: 2.72 Seconds

0-60: 7.08 Seconds

 1/4 Mile: 15.78 Seconds @ 86 MPH

Average observed economy: 4.3 miles/kWh

Sound level at 50 MPH: 70dB

2014 Chevrolet Spark EV Charging Port 2014 Chevrolet Spark EV Drivetrain 2014 Chevrolet Spark EV Drivetrain-001 2014 Chevrolet Spark EV Exterior 2014 Chevrolet Spark EV Exterior-001 2014 Chevrolet Spark EV Exterior-002 2014 Chevrolet Spark EV Exterior-003 2014 Chevrolet Spark EV Exterior-004 2014 Chevrolet Spark EV Exterior-005 2014 Chevrolet Spark EV Exterior-006 2014 Chevrolet Spark EV Exterior-007 2014 Chevrolet Spark EV Exterior-008 2014 Chevrolet Spark EV Exterior-009 2014 Chevrolet Spark EV Exterior-010 2014 Chevrolet Spark EV Interior 2014 Chevrolet Spark EV Interior-001 2014 Chevrolet Spark EV Interior-002 2014 Chevrolet Spark EV Interior-003 2014 Chevrolet Spark EV Interior-004 2014 Chevrolet Spark EV Interior-005 2014 Chevrolet Spark EV Interior-006 2014 Chevrolet Spark EV Interior-007 2014 Chevrolet Spark EV Interior-008 2014 Chevrolet Spark EV LCD Gauge Cluster 2014 Chevrolet Spark EV MyLink 2014 Chevrolet Spark EV MyLink-001 2014 Chevrolet Spark EV Wheels

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Never Say Never: Hydrogen, Diesel En Vogue Again http://www.thetruthaboutcars.com/2013/11/never-say-never-hydrogen-diesel-en-vogue-again/ http://www.thetruthaboutcars.com/2013/11/never-say-never-hydrogen-diesel-en-vogue-again/#comments Mon, 18 Nov 2013 14:44:19 +0000 http://www.thetruthaboutcars.com/?p=654082 Remember this piece from the Honda Summer 2008 Hydrogen Collection? It was supposed to point the way to future of green fuel technology before the Tesla brought plug-in sex appeal down the ramp with their Roadster and, later on, the S, as well as the trend of compliance EVs from Chevrolet, Volkswagen and Kia. But with […]

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Honda FCX Clarity

Remember this piece from the Honda Summer 2008 Hydrogen Collection? It was supposed to point the way to future of green fuel technology before the Tesla brought plug-in sex appeal down the ramp with their Roadster and, later on, the S, as well as the trend of compliance EVs from Chevrolet, Volkswagen and Kia.

But with sales of plug-in hybrids advancing far slower than originally expected regulators are taking another look at alternative ZEV powertrains.

Back in 2009, U.S. President Barack Obama set a goal for 1 million EVs on the road by 2015, going so far as to place a $5 billion bet on Tesla and Fisker among other automakers. Since then, only 95,000 units have managed to leave the showroom for the open road, with sales of over 500,000 predicted for 2015 by West Bloomfield, Mich.-based Baum & Associates analyst Alan Baum. With the current administration downplaying their role in the EV market, President Obama is awarding $4 million to aid in the development of fuel cell technology and storage for hydrogen-powered vehicles.

Leading the charge toward the hydrogen future is California. Aside from passing a measure to provide 100 hydrogen fueling stations as part of their clean technology vision, the state’s legislature has fine-tuned the Zero-Emission Credit formula to better benefit hydrogen vehicle producers — such as Honda and General Motors, who announced a partnership to develop their respective technologies back in July — while drawing down power from Tesla to as much as 40 percent by 2015 for each S sold.

Back in D.C., Audi is putting the pressure on the Environmental Protection Agency to change their mileage formula for the showroom window sticker, and to level the playing field in taxation between diesel and gasoline. The reasoning, according to Audi of American president Scott Keogh, is that the current formula favors gasoline power on the assumption that most driving is done in the city; diesel it at its most efficient on the highway, and is one-third more efficient than gasoline in otherwise equal conveyances according to the U.S. Department of Energy. The diesels used today are cleaner as a result of the advent of ultra-low sulfur fuel and tailpipe exhaust treatment.

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Pre-Production Review: 2013 Honda Fit EV http://www.thetruthaboutcars.com/2012/07/pre-production-review-2013-honda-fit-ev/ http://www.thetruthaboutcars.com/2012/07/pre-production-review-2013-honda-fit-ev/#comments Tue, 03 Jul 2012 13:19:32 +0000 http://www.thetruthaboutcars.com/?p=450721 Despite accounting for an incredibly small percentage of new car sales in America, the EV is all the rage in California. Rather than starting from scratch and designing an all-new car from the ground up (like Nissan), Honda chose the more economical route and electrified the second-generation Honda Fit. On the surface, the recipe sounds like […]

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Despite accounting for an incredibly small percentage of new car sales in America, the EV is all the rage in California. Rather than starting from scratch and designing an all-new car from the ground up (like Nissan), Honda chose the more economical route and electrified the second-generation Honda Fit. On the surface, the recipe sounds like a slam dunk, since the Fit is one of Honda’s most attractive and most fun to drive models now on sale. To prove to the masses that Honda has what it takes to go green, they flew me out to Pasadena to sample the all-new, all-blue Fit EV.

Before we begin, we should talk about the elephant in the room: California Air Resources Board (CARB) compliance. Some years ago California decided that by 2025 15.4% of all new cars sold in California would have to meet the “Zero Emissions Vehicle” (ZEV) standard. Like any government program, the loopholes, credits and credit trading allowed in the convoluted legislation allow OEMs to sell only a small number of the “required” EVs over the next decade. Strangely the legislation doesn’t require that the vehicle be actually “sold” to the consumer either. Enter the lease-only 2013 Honda Fit EV.

Click here to view the embedded video.

Because the Fit EV was designed to be an incredibly low volume vehicle (only 1,100 will be made for the 2013 and 2014 model years combined), you can get your electric Fit in any color you want, as long as you want blue. Aside from the single shade of “EV blue”, a tweaked front grille and some EV stickers, nothing about the Fit screams “electric vehicle” the way the Leaf’s unique sheetmetal does. Some may want the world to know they are saving the planet, but I prefer Honda’s discreet approach. While the Fit EV may look just its gasoline cousin, the Fit EV has different bumpers, side sills, an increased ride height and a totally different floorpan to accommodate the batteries and improve aerodynamics.

Say what you will about the logic and politics involved with making a “compliance” EV, the 2013 Fit EV has one of Honda’s best economy car interiors. The EV’s interior is dominated by various shades of light beige plastic, a soft leather steering wheel and comfortable fabrics. Compared to the 2012 Civic, the interior is luxurious. Pitted against the gasoline Fit, the interior has been tweaked enough that Honda isn’t kidding when they say the Fit EV is the “perfect Fit.” To help conserve power, a single-zine climate control system and heated seats have been adapted to the Fit in addition to the usual bevy of EV-specific gauges. While this may seem counter-intuitive, climate control allows more efficient control over fan speed and A/C compressor usage while heated seats make the cabin feel warmer than it really is on cold days. All Fit EVs come with Honda’s usual touch-screen navigation system with EV-specific software to find charging stations and graphically display your battery range. We were not able to test the feature during our time with the Fit EV, but all models will be equipped with their new voice command system á la Ford’s SYNC.

In addition to being 14mm higher than the gasoline Fit, the addition of the battery pack required changes to the shape of the Fit’s body. This in turn means the rear seats are unique to the Fit EV riding 1.4 inches higher, 3.3 inches further back and reclined just over 4 degrees more than the regular gasoline Fit. While the extra legroom is welcome and the headroom is still sufficient for all but the tallest passengers, I found the seat back angle to be uncomfortably reclined. Fortunately the front seats remain excellent, providing decent bolstering and above average lumbar support. If you are a shorter driver, be sure to check out the seating position before you lease, as the driver’s seat is not adjustable for height.

Since Honda’s press event was boiled down to a 4 hour event, our time behind the wheel was limited to a collective 3 hours and some 80 miles. While the added weight of the battery pack and the low rolling resistance tires limit grip compared to the gasoline Fit, the battery positioning means the center of gravity is very low. The low-mounted mass and a unique independent rear suspension make the Fit EV more fun on the twisties than I expected. Honda had a collection of 2012 Nissan Leafs on hand for comparison and the back-to-back is less than shocking: the Fit handles well and the Leaf handles like a large, heavy hatchback on skinny low-rolling resistance tires. Much like the Leaf, the Fit EV’s top speed  is limited by the combination of the redline on the motor and the single-speed transaxle.

The Fit EV shares its 92kW (123HP) electric motor with the Honda FCX Clarity hydrogen fuel cell car, but the single-speed transaxle is unique to the Fit. The unique gearbox seems to indicate that although the Fit EV is destined to be rarer than a Rolls Royce, Honda is willing to invest in new EV technology. In order to extend the range, the Fit provides three driving modes: Sport, Normal and Eco. Sport provides accelerator pedal mapping and motor output similar to a regular gasoline hatchback. Normal reduces engine power to around 75kW (101HP) under all but full-throttle situations and Eco reduced power further to 47kW (64HP). While some described the Eco mode as “aggravating,” the goal of an efficient city-car style EV isn’t to jet around at top speed. According to Honda, the combination of the most efficient EV drivetrain on the market, a 6.6kWh on-board charger and an 82-mile range makes the Fit EV the best electric vehicle in its class. In reality, it’s the way the Fit EV drives that makes it the best. While the steering is as numb as anything on the market with electro-mechanical power steering, the handling is light-years ahead of the Leaf in terms of both road feel and grip. It was faster too, hitting 60 MPH a full second before the Nissan Leaf (7.91 seconds).

The eternal problem with an EV is charging time. While a car with an 82 mile range would be livable for every driving occasion as long as fill-ups took only a few minutes, charging times for EVs is rated in hours. For reasons that were never officially explained, Honda decided not to equip the Fit EV with the “CHΛdeMO” DC quick-charge connector Nissan has put their weight behind. This means that while your neighbor’s Leaf may take twice as long (7 hours) to charge on your 220V home charger, they can get an 80% charge in half an hour by visiting a quick charge station.

While I’m unsure that California’s ZEV mandate is good politics, it’s obvious we can thank CARB for the existence of the Fit EV. Yet it’s the very nature of the way the Fit EV came into being that makes it both the perfect Fit and the most frustrating. For many Americans looking for a commuter car, $389 a month for the most economical car on the market including collision insurance is a fantastic deal. The flip side of course is that only 1,100 people will get to experience the low operating costs of what may be the best EV in America.

 

Not a fan of our Facebook page? Too bad, if you liked us on FaceBook you’d have been able to ask the Honda engineers and minders your burning questions about the Fit EV.

Honda paid for a Southwest flight, one night’s stay in a hotel, a buffet lunch and all the electrons the Fit could consume.

Specifications as tested

0-30: 3.24 Seconds

0-60: 7.91 Seconds

 

2011 Honda Fit EV, Exterior with Nissan Leaf, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior with Nissan Leaf, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior with Nissan Leaf, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior with Nissan Leaf, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior with Nissan Leaf, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior, wheel, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Exterior, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Interior, cargo area, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Interior, rear seats, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Interior, dashboard, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Interior, dashboard, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Interior, dashboard, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Interior, dashboard, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Interior, infotainment, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Interior, cargo area, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Motor, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Motor, Photography Courtesy of Alex L. Dykes 2011 Honda Fit EV, Motor, Photography Courtesy of Alex L. Dykes Zemanta Related Posts Thumbnail

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CARB To Bump ZEV Mandate, Automakers Fight Back http://www.thetruthaboutcars.com/2011/06/carb-to-bump-zev-mandate-automakers-fight-back/ http://www.thetruthaboutcars.com/2011/06/carb-to-bump-zev-mandate-automakers-fight-back/#comments Sat, 11 Jun 2011 21:01:44 +0000 http://www.thetruthaboutcars.com/?p=398316 The WSJ [sub] reports California regulators want zero-emission vehicles—those that don’t run on petroleum—to comprise up to 5.5% of new-car sales in the state, or roughly 81,300, in 2018. The target would rise annually to 14%, or more than 227,600, by 2025… Tom Cackette, chief deputy executive officer of the California Air Resources Board, says […]

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The WSJ [sub] reports

California regulators want zero-emission vehicles—those that don’t run on petroleum—to comprise up to 5.5% of new-car sales in the state, or roughly 81,300, in 2018. The target would rise annually to 14%, or more than 227,600, by 2025…

Tom Cackette, chief deputy executive officer of the California Air Resources Board, says his agency’s goal is to test whether electric cars can become mainstream vehicles, or wind up serving a “niche” market. Mr. Cackette said the state is investing in charging stations and other infrastructure, and he pointed to the sales of new plug-ins on the market to show that there’s a demand for the vehicles. He said he believes the California targets are feasible.

“That is a question we’ll only find out by trying,” he said. “I think [car companies] are making a pretty big investment in these vehicles, and they wouldn’t be doing that if they didn’t think there was a market there.”

Industry lobby groups are pushing California to roll the ZEV mandate into the forthcoming national CAFE standard. Small automakers like Mazda complain that placing a California ZEV mandate on top of national emissions standards would create a “costly burden…in light of the uncertain marketplace and infrastructure for electric vehicles.” And since CARB is leading the federal government by the ear towards a national standard anyway, it could simply push for a higher CAFE rate, which would at least allow firms the flexibility to comply on their own terms. Adding a major ZEV mandate won’t fundamentally change the national standard, but it absolutely will force automakers to spend huge amounts of money to develop a kind of vehicle that has major shortcomings, is only as green as local electricity generation, and has yet to prove itself with consumers. Whatever you think of emissions standards increases, it should be clear that consumers should determine what mix of technologies can best serve their needs while lowering fuel consumption and pollution.

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Tesla Loses More Money, ZEV Credit Revenue Stream http://www.thetruthaboutcars.com/2010/08/tesla-loses-more-money-zev-credit-revenue-stream/ http://www.thetruthaboutcars.com/2010/08/tesla-loses-more-money-zev-credit-revenue-stream/#comments Fri, 06 Aug 2010 19:49:18 +0000 http://www.thetruthaboutcars.com/?p=362330 Earlier this week, Tesla reported a $38.5m Q2 net loss, up from its $29.5m in the first quarter of the year. The good news was that revenue rose by about $8m over Q1, to $28.45m, but development and selling/general expenses rose countering the higher receipts. Other good news came on the Model S front, as […]

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Earlier this week, Tesla reported a $38.5m Q2 net loss, up from its $29.5m in the first quarter of the year. The good news was that revenue rose by about $8m over Q1, to $28.45m, but development and selling/general expenses rose countering the higher receipts. Other good news came on the Model S front, as Tesla claims that body and powertrain development is complete for the forthcoming sedan. But with the company losing about $5 per share (currently valued at $19.70 each), there’s more bad news coming. In a piece at Wired Autopia, Tesla’s former PR boss Darryl Siry points out that a key revenue stream for Tesla is being closed.

Siry explains

The ZEV [Zero Emissions Vehicle] credit is the basic mechanism of the Zero Emissions Vehicle Program. The mandate required automakers selling more than 60,000 cars in California annually to build a certain number of zero emissions vehicles. Automakers who haven’t met the mandate have been allowed to purchase credits from manufacturers who produced more ZEVs than the mandate required.

The auto industry complained that the original mandate was impossible to achieve and over the years has successfully argued to have it weakened.  Another change allowed automakers to meet the mandate in part by producing hybrids and ultra-efficient gasoline vehicles called partial zero-emissions vehicles. But even under the relaxed guidelines, as of 2008 several automakers found themselves needing credits.

There was only one place to get them: Tesla Motors.

Last year Tesla sold over $8m in ZEV credits, and as Siry points out
In a recent meeting a Tesla finance vice president told analysts they could assume every Tesla Model S sold would generate approximately $5,000 in ZEV credit profit, according to one person who was present at the meeting. Morgan Stanley underwriters cited the same figure in their presentation to potential investors during the recent Tesla IPO roadshow.
The problem is that with more EVs about to hit the market, the party is ending. Not only will EVs like the Leaf increase the supply of ZEV credits, but EVs from Ford and GM will reduce demand. And that spells bad news for the EV market that Tesla had enjoyed a monopoly on.

In a finite market, when all sellers have the same commodity, the marginal cost is zero, and supply greatly outstrips demand, the price of the commodity in theory converges to zero. In practice, as long as there are some buyers, the price will be something other than zero but is certain to crash from current levels, undercutting the potential subsidy to electric vehicle startups.

The Model S, which Tesla tells analysts will have an average selling price of about $75,000, targets a very different market than the $32,000 Leaf or the $41,000 Volt. (All prices are before the $7,500 federal EV tax credit.) Yet the Leaf and the ZEV credits it will produce may be the biggest threat to the viability of the Model S.

Tesla has tried to minimize the role of ZEV credits to analysts, but $5,000 of pure profit per car represents a full 26 percent of the projected gross margins on the Model S and more than 50 percent of the projected bottom line, according to targets presented by the company during the IPO roadshow. As the market value of the ZEV credit plummets, Tesla will need to make up that margin through price increases and putting additional pressure on aggressive volume goals.

Tesla’s response: bash the Leaf for not having thermal management. And as satisfying as that strategy is, it’s no replacement for 5k profit per car. Meanwhile, with Audi and Mercedes targeting Tesla’s core business and VW stealing Tesla’s secrets by way of its ousted founder Martin Eberhard, it has got to feel like the walls are closing in at Tesla headquarters.

The post Tesla Loses More Money, ZEV Credit Revenue Stream appeared first on The Truth About Cars.

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