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February 25, 2010
Jon LeSage, Editor
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The Cash for Clunkers program demonstrated how much buyers are activated by incentives. It was a catchy name and got a lot of media attention, and tied in well with financial concerns of Americans living through the biggest recession of their lives. It also tied in well with the interest in fuel efficiency as rising gasoline prices hover on the horizon, and concern for the environmental benefits of fuel economy. This week, the Special Section focuses on incentives being offered by the feds, state and local governments, and by auto manufacturers.
In Developing News, there's coverage of BMW's campaign to sell the benefits of driving diesel engine vehicles to American buyers. This has also been a clear message coming from Volkswagen and its Audi subsidiary, which are getting praise lately for their TDI clean diesel engines. Americans haven't been big fans of diesel engines, thinking of them as noisy and spewing smoke. And it used to be that you couldn't buy diesel at a fuel station nearby. That's all changed, and you can look for clean diesel engines becoming more common in this country, and not just for heavy-duty trucks.
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Table of Contents
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Buyer Incentives Today
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Incentives Galore: When automakers bring plug-in and pure-electric vehicles to market, they're concerned about how much it will cost to produce and bring to market these vehicles, and now much buyers will spend. It's always been a concern for bringing hybrids to market, which are more expensive to produce than gasoline engine cars. For car buyers, rebates and low APR loans can be a good incentive to buy, and every hybrid on the market now has such an offering. While federal incentives for car buyers going green have increased, state of local offerings have been slim pickings. Green Videos in Get Reel: Audi had an interesting and humorous story to tell about how green sustainability is becoming part of the infrastructure which could be enforced by the police. Southern California Edison's Pedro Pizarro on the relationship between Edison and LA Dept. of Water and Power on building charging stations throughout southern California. Scott Atherton talks about how the American Le Mans Series is setting the benchmark for green racing. And More: Upcoming conferences, green people profiles, press releases you should check out, and much more.
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Carmakers Pencil in Incentives
Government incentives are making their way into the pricing structure for new vehicles to the extent that they're being discussed by corporate CEOs like Ed Whitacre. The upcoming Chevy Volt may be pricier than car buyers want to hear about, so incentives are a piece of the strategic planning puzzle. Tesla and Fisker are marketing to high-end buyers, but are apt to mention incentives to these buyers as well.
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Incentives for Moving the Metal
While offering car buyers incentives – rebates and low APR loans - can make auto executives quite nervous, they're always going to be there, even for hybrid vehicles. As other segments of clean vehicles make their way to mass market, incentive offerings will become their norm as they are for traditional vehicles. As for now, every hybrid being sold in the U.S. has an incentive attached to it.
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Not Much in State and Local Green Incentives
When it comes to fuel efficient, clean engine vehicles, state and local governments are more likely to produce regulations than buyer incentives. Credits and incentives for energy producers are increasing, and there are some incentives for green cars as well, but it gets pretty thin outside Washington, DC. Tax credits are available in certain states, and a few of them offer grants as well to fleet buyers.
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Stats and Smart Charts
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Demand and Supply for Electric Powertrains - 2015
[Click to enlarge graphic]
Significance of the Data: - Share of electrified powertrains will increase significantly in all major auto markets
- Development driven by dramatic battery cost decreases over the next 10 years
- New report from Roland Berger Strategy Consultants says overcapacity coming
- Planned investments in lithium-ion Manufacturing will result in significant overcapacity
- Time period between 2014 and 2017 will see much overcapacity
- US and Japan will see a wide gap
Source: Green Car Congress - Feb. 23, 2010
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Industry Events
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Geneva, Switzerland March 9-10, 2010
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St. Louis, MO March 9-12, 2010
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Long Beach, CA May 3-6, 2010
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Las Vegas, NV May 9-12, 2010
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Williamsburg, VA June 20-23, 2010
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San Jose, CA July 26-29, 2010
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Green People Going Places
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Robert Purcell
Boston-Power, Inc.
Board Member
Boston-Power, Inc., a provider of next-generation lithium-ion batteries, announced that Robert C. Purcell, Jr. has joined its board of directors. Working closely with Boston-Power's executive team and fellow board members, Purcell is applying his expertise in battery electric vehicles and plug-in hybrid electric vehicles to help drive the deployment of Boston-Power's batteries throughout the transportation sector. From 1994 to 2002, Purcell led the GM Advanced Technology Vehicles Group. GM ATV was responsible for the development and production of the GM EV-1, the world's first modern electric vehicle, which went into production in 1996. His organization also developed and produced the S-10 Electric Truck and developed the GM Precept Hybrid Vehicle, which was part of President Clinton's Partnership for a New Generation of Vehicles program. Purcell currently serves as founder and president of Purcell & Associates, LLC, a senior advisory group specializing in advanced automotive and alternative energy investment projects.
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Jeff Serfass
National Hydrogen Association
President
Serfass will be a speaker at the upcoming World Energies Technology Summit, taking place March 18 in New York City. National Hydrogen Association will be hosting its NHA Hydrogen Conference & Expo may 3-6 in Long Beach, Calif. Serfass is the founding president of the National Hydrogen Association, general manager of the Partnership for Advancing the Transition to Hydrogen, and president of the Hydrogen Education Foundation. In addition, he is president of the Carbon Management Council and executive director of the Biomass Thermal Energy Council. Serfass was the founding executive director of the Fuel Cell Commercialization Group, the Utility Biomass Energy Commercialization Association, and the Utility PhotoVoltaic Group (now the Solar Electric Power Association). He led the exploratory workshops and relationship building that led to formation of each of these organizations, and then went on to manage them through start-up, development and strategic transition phases.
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| Design & Development |
Audi Hopes PlayStation Kids Will Become Brand Loyal Buyers
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Audi's e-tron all-electric concept car was shown off at last year's Frankfurt International Motor Show. It's also be shown off to game players on PlayStation 3 to its Audi Space on PlayStation Home. This makes Audi the first carmaker to do it, and the company says it hopes that many young people will then become loyal customers.
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BMW Attempts to Restructure American Minds Around Diesel Engines
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BMW is attempting to dispel negative memories Americans have of diesel vehicles from the 1970s spewing black smoke, lacking pep, and being intolerant of cold temperatures. Diesel engines now have an answer to several short-term problems such as fuel efficiency, emissions control, and freedom from foreign oil.
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| The Color of Money (F&I) |
Ford Credit Sheds Light on Income Turnaround
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Officials from Ford Credit say one reason why the company showed almost a $3 billion turnaround in revenue is reduced operating costs. Also noted were lower depreciation expenses on leased vehicles and lower provision for credit losses. Officials expect to be profitable in 2010.
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New Web Tools for Zurich Dealers
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Zurich North America announced that dealers can now submit consumer contracts electronically through its Web-enabled sales and contract management process system, called F&I Rate Track. New Web-enabled, electronic submission process helps speed up the close-out time for processing F&I product contracts.
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| Fleet Factor & Regulations |
1,000 Alternative Energy Vehicles in AT&T Fleet
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AT&T is bringing in a CNG van in Oakland, Calif., its 1,000th alternative energy vehicle in its fleet of 77,000 vehicles. Overall conversions to more alternative fuel and fuel-efficient vehicles is expected to save the company 49 million gallons of gasoline over a 10-year deployment.
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ZAP Electric Conversion Mail Trucks Coming to USPS
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The United States Postal Service has contracted with ZAP to produce an electric version of its gasoline mail trucks called Long Life Vehicles. They'll be used first at USPS facilities in Santa Rosa, Calif., and then will undergo field trials in the Washington, DC, metro area.
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| Fuels & Energy |
Oak Ridge National Lab Develops Fast Home Charging Station
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The Dept. of Energy's Oak Ridge National Laboratory has developed a prototype system that can let drivers cut the time needed to fully recharge their plug-in hybrid electric vehicle on a 110 volt home electrical outlet from the normal eight hours down to 45 minutes. These outlets will be capable of delivering 240 or 220 volts.
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New Product to Make Available Cellulosic Ethanol at $2 / Gallon
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Novozymes has a new product coming out next year called Cellic CTec2, enzymes that enable the biodiesel industry to produce cellulosic ethanol at a price below $2 per gallon. The company says that its product will be the first commercially viable enzymes for production of biofuel from agricultural waste.
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| Automotive Marketing |
Cobalt Upgrades Designed to Maximize Dealers' Social Networking
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Cobalt has enhanced its dealership Web site platform to help users take advantage of social media opportunities. Dealers won't be charged for the upgrade, which can tie in with Facebook and Twitter. Dealers say working with social media creates open, ongoing customer relationships.
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Olympic Ads Aimed at Restoring Toyota Image
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Toyota is fighting to restores its quality and dependability image. This image has been shattered after reports of fatal crashes and the recall of over eight million Toyota vehicles worldwide. The campaign began in earnest during the opening ceremonies of the Winter Olympics. The automaker apologized for recent failures and promised to fix any problems as quickly as possible.
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| Dealers & Aftermarket |
Pickens' Plan to Convert Heavy Trucks to Natural Gas
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T. Boone Pickens was a keynote speaker at the NADA convention, where he laid out his sustainability and energy conservation vision. Part of this plan is to convert half the 18-wheelers on America's roads over to natural gas-powered vehicles. He predicted this would reduce half the oil imported into the country.
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AMP Loses GM Platform but Still Committed to Conversions
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One of Advanced Mechanical Products' key products was affected when GM pulled the plug on its Kappa platform, foundation of the now defunct Saturn Sky and Pontiac Solstice models. AMR has now taken on a working relationship with Remy International to build electric car conversions with a starting price of $25,000.
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