Sales Outlook for Alternative Fuel Vehicles Varied

volkswagen logo
volkswagen logo

Many auto executives in attendance at the Paris Motor Show expressed reservations about the sales outlook for battery powered cars. In the beginning, the numbers were projected to be low, but the latest numbers from Tesla and Renault are indicating near dismal sales in the near future.

The CEO of Volkswagen, Martin Winterkorn, stated at the eve of the Paris Motor Show that the companies should instead focus on plug-in hybrids. These vehicles can run on battery power for limited distances and would be able to utilize standard internal combustion engines as range extenders. Winterkorn said, “We had a realistic view of the technology all along. There will be, for a long time to come, no alternative to the internal combustion engine.”

Volkswagen is among the car manufacturers participating in the annual Paris Motor Show. This year, the exhibits and the discussions would run until October 14th. The company is by far the largest carmaker in Europe thus statements about technology would definitely sound off the direction many carmakers would make moving forward. The German giant though has not shelved its own plans of creating an all-electric vehicle fleet but the management committee of the company has made it clear that plug-in hybrids would be the more pragmatic approach in the reduction of automobile emissions in the near future.

For its part, French carmaker Renault, who partnered with Nissan for its own electric vehicle models, said that there is still hope for battery powered vehicles. The company though admits that sales are far below initial projections to only about 15,000 units since the carmaker unveiled the unit for market release.

According to Jerome Stoll, Executive Vice President for Sales and Marketing at Renault, “You are always disappointed when you fix a big ambition and you don’t meet it.” He added that while Renault was the market leader in electric vehicles, “I am not happy about the size of the market.”

Battery powered vehicles provide more advantages compared to internal combustion powered vehicles. These include quicker acceleration, quieter rides and lower costs. These advantages though are still being underappreciated because of the high purchasing cost together with the limited range capabilities of these electric vehicles compared to gasoline powered ones. Another main issue would be the lengthy time needed to recharge the vehicle in order to get to full range.

Plug-in hybrids also have other issues, such as limited range on battery power alone, but with range extending gasoline engines additional complications occur. These include having two motors, one electric and one gasoline powered, batteries as well as fuel. These add-ons effectively takes up space in the vehicle and removes much of the efficiency benefits of the vehicle. The market needs to develop smaller but more powerful engines to make plug ins more efficient in terms of space and weight in the long run.

As for Volkswagen, it would pushing for an expansion of its plug-in hybrid line with the introduction of the Golf plug-in by 2014. Volkswagen also has partnerships with other European carmakers such as Audi, Seat, Skoda and Porsche together with other brands.

Tesla Seeking More Funding

Tesla Motors
Tesla Motors

The trailblazer of the Renaissance of the electric car, Tesla Motors, is now undergoing issues both on the financial and the technical aspects of its work. As production rolls on, it is spending more money that it has and still production targets remain unmet. To assuage the issue, the former start up is now turning to its investors and taxpayers for financial assistance.

Tesla formally announced its plans to sell five million company shares last Tuesday for public offering. In a related move, Tesla was able to eke out a waiver of some of the government requirements in fulfilling its commitment under a previous U.S. $465 million loan package. The two moves are viewed to ease the financial pressure on the company, at least for the next few quarters, but it certainly raised issues about the long term future viability of the company.

The recent months have seen the company increasing its production of its main vehicle, the Model S. This vehicle is a high performance sedan able to get from zero to sixty miles per hour in just 4.4 seconds. While there have been deliveries made initially, the current delivery backlog stands at between four and five weeks. With this complication, the company is using up much of its cash liquidity at an increased rate, forcing the company to revise its revenue forecasts.

Carter Driscoll, an analyst at CapStone Investments observed, “Tesla’s story is starting to show some serious cracks. This shows that capital raising is a necessity, not a luxury, as the company had maintained.” This shows that cash flow was getting tight at Tesla.

The recent moves are also expected to accumulate another horde of criticisms of the Obama administration’s energy loan program. The previous flak came when Solyndra, a solar panel maker, declared bankruptcy back in 2011, defaulting on a government loan worth U.S. $535 million.

The Department of Energy was able to obtain a concession from Tesla, requiring the carmaker to submit a plan for the repayment of the loan. In response, Deepak Ahuja, CFO of Tesla, said that the changes to the loan were ‘purely a normal course of events’ as Tesla’s business model was steadily evolving.

To many analysts, Tesla is now on its critical phase of growth. The company has fully obtained the government loan and shareholders, with the new stock offering, may feel their worth would be diluted. Major concerns had been raised as share prices fell to U.S. $3.00 or a reduction of ten percent. The previous high was U.S. $38.01 and is now valued at U.S. $27.66.

As expected, many investors would be searching for signs that the Model S would lead the company out of its current doldrums. The company expects that the Model S sales would produce positive cash flows as the first two quarters of 2012 reported a net loss of U.S. $111 million.

The current issues are also expected to test the loyalty of its customer base. Those who have received their Model S vehicles are extremely pleased with its performance, many saying it has exceeded expectations. Many would be buyers are plunking down hefty sums to place reservations on the Model S. The vehicle costs about U.S. $54,700 before tax credits with the deposit at U.S. $5,000. More inclusions onto the basic model would require a higher deposit.

The deposit amounts have been a great cash reserve for the company, with the company as of June 2012, holding about U.S. $133.4 million. Should production delays continue, many question the wisdom of putting down such a large amount with no definite promise of date of delivery. In the end, the fortunes of Tesla would rely on the market size after the first adopters.

Nissan Now Listening to EV Owners


In a surprise move, Nissan Motors is now establishing an independent board to further study how the automaker would be better able to communicate with its Nissan Leaf clientele regarding issues on performance and other matters. This move was prompted by the collective concerns of seven Nissan Leaf owners who cited loss of charge capacity in the EV’s lithium ion battery array.

Contrary to reports, Nissan is not intending to investigate on the Leaf battery issue. According to David Reuter, Vice President for Corporate Communications for Nissan Americas, in a telephone interview, “There is no issue with the car or the batteries.” Nissan had already evaluated the seven electric vehicles in question at its Arizona facility for battery defects or system’s issues in the electric vehicle. The tests also sought to compare the performance of these vehicle’s batteries compared to that of other Leafs around the world. The tests found that a ‘small number’ of Nissan leaf owners in Arizona had resulted in above average battery drainage due to heavy usage in high temperatures in short periods. According to the carmaker, the batteries should retain an eighty percent charging capacity after five years of usage.

In a message posted in the forum, Senior Vice President for Research and Development at Nissan Americas said, “While we understand that some Leaf owners are concerned about battery capacity loss, we want all owners to remember that all battery-electric vehicles – and all lithium-ion batteries- demonstrate capacity loss over time. As each user’s operating characteristics are unique and many factors impact battery capacity, we can expect some vehicles to have greater than 80 percent capacity in five years and some vehicles to have less.

There are about 450 Nissan Leafs in Arizona and a total of 38,000 all over the world. After five years, according to Nissan’s Bailo, the battery of the average Leaf in the Phoenix area would have a battery capacity of seventy six percent.  She further added, “Factors that may account for this differential include extreme heat, high speed, high annual mileage and charging method. We at Nissan stand by our product and we also stand by our customers.”

The company has sought to have Chelsea Sexton, advanced technology expert who was instrumental in the marketing of the EV-1 back in the 1990’s, to convene an advisory board to make recommendations for Nissan’s actions and improvement. The terms of the arrangement with Mr. Sexton was not disclosed.

Cadillac Joins the EV Fray


Cadillac has confirmed last month the unveiling of its very own extended range electric vehicle. The technology for the luxury brand is based on what is standard with the Chevrolet Volt.

The new vehicle would be the 2014 Cadillac ELR, which is the production version of the 2009 Converj concept. The production models would be unveiled sometime in 2013.

The specifications are still sketchy and only official data disseminated is that the ELR would be a luxury coupe with an electric drive unit with a T-shaped lithium ion battery with a four-cylinder range extender. This range extender is actually an electric generator that would provide power to the drive unit. Upon depletion of the batteries, the generator would then take over to provide power to the electric drive unit, very similar to how internal combustion engines turns the alternator to create electrical current.

Many are of the mind that the ELR would just be a two door Chevy Volt. The key differences though would be the Cadillac luxury interiors and technological gadgetry. This would definitely add more weight to the vehicle. Another major difference would be the price tag, which is pricier estimated at the mid U.S. $50,000 range. This requires the use of expensive lightweight materials to work around the weight issues associated with the Cadillac brand.

Other features reportedly to be included in the ELR includes sound deadening materials and active engine mounts together with radar and camera based monitoring systems. Even with these ultra modern features, the curbside weight of the ELR should just be about a hundred pounds more than the 3,800-pound curbside weight of the Volt and all these because of the Volt’s weight saving measures.

It is also projected that the ELR’s range extending motor would be more powerful than the Volt’s 1.4-liter engine. The most likely choice would be the new four-cylinder engine from Opel with an engine displacement of 1.8 liters. This more powerful engine would allow for quicker charging time for the battery of the ELR as well as stronger drive when using the internal combustion engine.

The battery would be bigger than the 16.5 kWh of the Volt. The changes to add more charge would be done through the addition of more prismatic lithium ion cells using the T-shaped battery found in standard Volts.

Other signature features include the vertical LED headlights and taillights and the well-known trapezoid shaped grille that would be closed off providing better aerodynamics and greater fuel economy. The roofline has a shallow upward angle, providing great airflow over the top of the vehicle and continues all the way to the rear. This makes the vehicle look like the classic fastback models back in the 60’s and 70’s. The beltline runs from the front of each door to swoop to the rear to end at the uppermost end of the taillights. The chrome rims have seven spokes and is set on low profile tires.

Nissan Leaf Provides More Services


The Nissan Leaf presence is now felt throughout the world. One of the first activities would be held between June 23 and 24, where a fleet of these zero emission vehicles would be driving around London to offer free ‘taxi’ rides.

One can avail of the service by sending a Tweet that incorporates hashtag ‘#6XCHEAPER’ together with chosen destination. This is one activity where the Japanese car giant would be able to obtain information from consumer feedback in designing the taxi of the future.

Utilizing the social media platform Twitter is integral in Nissan’s grand plan, ‘The Big Turn On’. The program aims to spread the electric vehicle message through social media channels to convince one million separate individuals to choose electric vehicles within just a hundred days. The program’s one million target was achieved last June 20, nearly three weeks ahead of the projected schedule.

The ‘#6XCHEAPER’ tag underscores the fuel savings provided by an electric vehicle, which is six times cheaper than fuelling a similar sized internal combustion engine. When the Nissan Leaf is charged at off peak hours, Nissan estimates that it would cost just 1.75 pence in fuel to travel one mile in a Leaf, compared to about 10 pence per mile in a fossil fuel use car.

There are other savings enjoyed by electric vehicles. Since the Nissan Leaf produces zero emissions, the vehicle is thus exempt from charges such as London’s congestion charge as well as earns no annual vehicle excise duty charges.

According to the Managing Director of Nissan Great Britain, Mr. Jim Wright, “This is part of a campaign designed to get people to turn on to 100 percent electric driving by busting many of the myths and highlighting the many benefits of electric cars, including incredibly low fuel costs.”

He further added, “By offering free taxi rides, we aim to show hundreds of people just how practical and affordable the Nissan Leaf is to run. As each journey costs us so little, we’re not charging passengers – there’s no point in quibbling over a few pence.”

The Nissan Leaf EV fleet would be based at their very own ‘taxi rank’ near the Truman Brewery by Liverpool Street Station. They would be providing free taxi rides to destinations throughout the Greater London Area. This would include as far west as Turnham Green or to the O2 Arena in the east, go south of the river as far as Clapham and as far up north as Hampstead. The operation hours would be between 10 am and 6 pm for both Saturday and Sunday. The vehicles would be operated by professional drivers from Climate Cars, a car service operator.

All the messages sent using the hashtag would be monitored and winners for the free rides would be chosen randomly to avoid long lines. Each trip of the EV would be logged and passengers would be educated as to the amount of fuel costs when one chooses to go electric.

On another end, the Nissan Leaf is also gaining a major overhaul, becoming a luxury vehicle in the United States. The vehicles have been built by Imperial Coach Builders of Springfield, Missouri, who also claim to be the builders of the first ever-stretch electric limousine in the world.

This Nissan Leaf Stretch Limo is one of a kind. According to the builders, this was an easy build saying “We took a regular Nissan Leaf and we cut it into two and basically extended the frame to add a center section to stretch it into a limousine.”

Get ready to find the Nissan Leaf in your area soon.