Rep Sander Levin (D-MI) has introduced legislation which would increase the cap on consumer tax credits for plug-in electric vehicles.The current subsidy allows consumers to take a $7,500 taz credit, but caps the number of qualifying credits at 200k per manufacturer, but Levin’s bill would raise that to 500k units. Said Levin in a statement

Green vehicles represent the vanguard of automotive innovation, but they have to be economical for consumers and profitable for manufacturers. Raising the cap on this credit will help carmakers reach the demand and production scale necessary for long-term viability.

To which, his brother Senator Carl Levin, adds

The U.S. auto industry is poised for a technological explosion that promises to fundamentally change transportation here and around the world. But if we fail to support this revolution, workers in China, India, South Korea and our other competitors will build these vehicles instead of American workers.

The call to raise the cap for EV consumer tax credits was first publicly raised by GM’s Tom Stephens, who argued that 200k units was inufficient government support to keep the Volt viable until the second generation comes out. At the time, Rep Debbie Stabenow argued that credits should be “front-loaded” and deducted from the price of the vehicle at the dealership, but that proposal seems to have fallen b the wayside.

GM has just dropped a press release [in .docx format here] announcing that it has withdrawn its request for $14.4b in low-cost government retooling loans through the Department of Energy’s “Section 136” or ATVM loan program. Says CFO Chris Liddell

This decision is based on our confidence in GM’s overall progress and strong, global business performance. Withdrawing our DOE loan application is consistent with our goal to carry minimal debt on our balance sheet. Our forgoing government loans will not slow our aggressive plans to bring more new vehicles and technologies to the market as quickly as we can. We will continue to make the necessary investments to assert our industry leadership in technology and fuel economy.

Color us stunned. The “136” loan program was nearly used as a slush fund to bail out GM and Chrysler before President Bush ruled that the automakers qualified for TARP relief. Shortly after the bailout, GM said that the loan program was “one of the sources of liquidity GM is factoring into its plans in order to meet its capital requirements in the future.” More recently, it seemed that the loan program was on hold while GM and Chrysler were qualifying for loan requests that would have drained the program of funds. Now, with GM’s request dropped from the queue, there could be as much as $10b left for other manufacturers. Plus, by turning down cheap government loans, GM has made its first major (voluntary) step towards beating back the Government Motors moniker. Good for them.

“First smart ED Delivered in America.” Read More >

Volkswagen’s 2002 “One Liter Car” was a classic project of the firm’s legendary chairman Ferdinand Piech. The grandson of Ferdinand Porsche was taken to setting staggering tasks for his engineers, who dutifully turned out such mechanical wonders as the world’s fastest car (Bugatti Veyron), the first car to achieve 1 liter per 100km fuel economy (the so-called “One Liter Car”), and the world’s most unnecessarily expensive Volkswagen (the Phaeton). Though it was never introduced for production, the One Liter Car convinced VW that diesels could be as efficient as any hybrid, and became a point of great pride for the company. A few years ago, there was even a rumor that a limited number would be made for sale to the public, but only an updated concept and vague talk of 2013 production ever materialized. And now, VW has introduced a new One Liter Car, called the XL1, in Qatar of all oil-rich places.

This time, the XL1 seats two side-by-side and has a plug-in hybrid drivetrain featuring a two-cylinder diesel making 47 HP and a 26 HP electric motor hooked to a Li-ion pack with up to 22 miles of EV range. The concept can reportedly hit 62 MPH in 11.6 seconds and has a top speed of 99 MPH. A 2.6 gallon tank gives the XL1 a 341 mile range, thanks in part to the low overall weight of 1,753 lbs. And with its larger, more conventional layout, VW isn’t being shy about the fact that this One Liter car represents a step closer to production.

Hard on the heels of yesterday’s story on Hyundai’s preparation for CAFE standard ramp-ups comes this counterpoint, courtesy of the Detroit Free Press. Walter McManus, director of automotive analysis at the University of Michigan’s Transportation Research Institute, did his own study on a possible 43 MPG 2020 standard and his findings, as presented at a Citi Investment Research conference call, seem quite positive for American-based automakers. McManus’s research took several  basic assumptions for granted in order to reach his conclusions, namely that

• Gas prices will average $4 a gallon between now and 2020.

• Industry sales will be 16.3 million vehicles in 2020.

• Every manufacturer complies with 2016 CAFÉ standard.

• Plug-in hybrids and electric vehicles will be less profitable than gas-engine vehicles.

Now, right off the bat it’s possible to take exception to some of those assumptions. If gas doesn’t crack four dollars per gallon before 2020, for example, this blogger will be one confused student of history. Also, predicting over 16m units of new car sales is by no means a sure thing. Though a comfortable industry assumption based on the “old normal,” there aren’t many indications that 16m+ annual new car sales was a sustainable level for the US economy. Still, Mr McManus has been doing this for a while, so we’ll give him the benefit of the doubt. So, given his assumptions, what does he foresee for Detroit as it moves to meet a 43 MPG standard by 2020? In two words: great success.

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Remember how the government bailout team forgot to make sure its “Irrevocable Ecological Commitment” from Fiat was measured in “adjusted” Miles Per Gallon, using the EPA test cycle that provides your window sticker number? Well, the same “unadjusted” MPG number Sergio Marchionne used to his advantage is used to calculate the CAFE ratings that have the industry in such an tizzy. Well, the official lobbying parts of the industry, anyway [see also, here]. Hyundai has been saying for some time that it is targeting a 50 MPG fleet average by 2025, although CEO John Krafcik said as recently as August that he didn’t know how the automaker would reach that goal.  Now, however, it looks like he’s found a way to bring 50 MPG within reach: use CAFE’s “unadjusted” standard. Just like Sergio. Follow along as Hyundai shows that 50 MPG isn’t as far off as many seem to believe.

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California, the perennial thorn in the side of the EPA’s emissions-regulation scheme, has bowed to federal pressure and will wait until September of this year to release its 2017-2025 Model Year emissions standard proposal, by which time the EPA will be ready to announce its own national scheme. Prior to today’s announcement, California’s Air Resources Board (CARB) had “announced its intention” to release its proposal in March, a move which had automakers scrambling to complain to congress of the apparent lack of unity on emissions standards. GM and Chrysler even endured a (somewhat predictable) Naderite drubbing in the WaPo in order to to join the howls against the emerging “patchwork of state and national standards!”

Luckily for the automakers, CARB was willing to play ball. Per the WSJ:

Stanley Young, a spokesman for the California Air Resources Board, said the state agreed to the White House’s timetable after being assured the new fuel-economy targets would be based on studies currently being done on the feasibility of the proposed 62-mpg [by 2025] standard.

The studies are examining the technological and financial ramifications of the proposed standard, he said.

“We’re looking forward to seeing the results of the final data from the engineering studies,” Mr. Young said. He added that the board has always cooperated with the EPA and DOT and plans to continue to do so.

Then why stir up the pot by telling the world that you’ll create a de facto standard while the EPA is still looking at the engineering studies? If CARB was looking for ways to add to its resume of ill-advised overreaches, it succeeded admirably. If, on the other hand, it wanted to be seen as the lead partner in a national standard, it would have agreed to a joint announcement in the first place. Regardless of where the standards are set, surely even CARB understands that a truly national standard is the single most important achievement to be won in this process. Oh, and “making sure all the evidence was duly reviewed before ruling” should probably be the second most important.

The Department of Energy’s $25b Advanced Technology Vehicle Manufacturing Loan program was very nearly used as a slush fund to keep GM and Chrysler afloat during the dangerous days leading up to the federal auto bailout. Though President Bush’s decision to use TARP to rescue America’s failing automakers took away the need to tap the so-called “retooling loan” program to fund America’s auto bailout, that decision also contributed to a long delay in the allocation of the ATVM loans. Because the loans require applicants prove “financial viability,” GM and Chrysler’s requests (which account for $17.4b out of the remaining pool of $16.7b in non-allocated loans) have been on hold, and with them, every other automaker still seeking approval for its requests. And now, with no word from the DOE on the loan program since last April, congress is agitating for the DOE to make with the loans already. Senator Diane Feinstein captures the frustration in a letter published by the Detroit News

“On multiple occasions, the department has missed internal deadlines for initial decisions, term negotiations, final decisions and loan closure,” she wrote, saying the department failed to give applicants “a clear timeline.”

But did the DOE miss deadlines and string automakers along out of negligence, or because it had to wait in order to fulfill the loan program’s mission, namely supporting the bailed-out automakers?

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The EPA has followed up its ruling allowing E15 ethanol blends (15% ethanol, 85% gasoline) to be pumped to vehicles built for the 2007 model-year and later, now allowing the corn juice-enhanced gasoline to be distributed to any vehicle built after 2001. EPA Administrator Lisa Jackson announced the decision to Bloomberg arguing

Wherever sound science and the law support steps to allow more home-grown fuels in America’s vehicles, this administration takes those steps

But, as is the case with most ethanol-related decisions, this has more to do with politics than science. After nearly ending the boondoggle known as the “Blender’s Credit,” which pays blenders for every gallon of ethanol they mix into America’s fuel supply, congress relented to lobbyist pressure and extended the $6b per year giveaway for another year. And with that financial incentive in place (along with a “renewable fuel mandate”) but little to no consumer demand to support it, blenders need to find ways to slip ever more ethanol into American gasoline. But, as a recent study proves, even E15 won’t beat the so-called “blend wall”: at best E15 gives the ethanol industry four years of taxpayer-fattened profits before it will be forced to come back and ask the government to yet again increase the amount of ethanol allowed in the gas supply.

Meanwhile, the auto industry that once saw ethanol as a prime opportunity for low-cost greenwashing has made an about-face and is suing to stop the spread of E15, arguing that its effects on engine life haven’t been adequately studied. And because ethanol offers little to no benefits relative to gasoline in terms of environmental or efficiency impacts, the fact that the EPA may be endangering automobile engines in order to keep an oversubsidized industry on (expensive) life support is beyond galling. It’s clear that, with the legislative and executive branches of government held in sway by ethanol-friendly farm states, motorists are now dependent on the court system to do the right thing and end government’s senseless love affair with ethanol.

Though not technically a new debut at this year’s Detroit Auto Show, the “Prius C” concept was probably the most interesting vehicle Toyota showed at Cobo Hall this year. If nothing else, it certainly shows the promise of an expanded Prius brand far better than the “Prius V.” And if there’s a single market where this “baby Prius” can give Toyota’s eco-brand spin-off a boost it would be Europe, where small, efficient cars rule. But, it seems, this is not to be. Autocar reports

The strength of the Japanese yen seems almost certain to keep a production version of Toyota’s near-80mpg hybrid supermini based on the Prius C Concept hatch out of Europe. Read More >

Recently the ethanol industry has “suffered” from a problem that epitomizes the problematic nature of government subsidies. Known as the “blend wall” this obstacle was created not by negligence on the part of the industry, but by the fact that its lobbying efforts have been far more effective than its marketing efforts. The problem, in a nutshell, is that the 2007 Renewable Fuel Standard mandates a steady increase in the amount of ethanol blended into the national fuel supply, from 9 billion gallons per year (BGY) in 2008 to 36 BGY in 2022… but with gasoline consumption falling and with standard pump gasoline capped at a maximum of ten percent ethanol (recently raised to 15% for vehicles built after 2007), the industry that’s supposed to get America off gas needs more gas to blend its ethanol into. As a study in the American Journal of Agricultural Economics puts it

Total national consumption of gasoline in the United States has been about 140 billion gallons in 2010 and is expected to fall over time due to increasing fuel economy standards. Thus, at present, if every drop of gasoline were blended as E10, the maximum ethanol that could be absorbed would be 14 billion gallons. In reality, 10% cannot be blended in all regions and seasons. Most experts consider an average blend of 9% to be the effective maximum, which amounts to about 12.6 billion gallons. U.S. ethanol production capacity already exceeds this level. Thus, our ability to consume ethanol has reached a limit called the blend wall.

The solution: well, the EPA’s ruling allowing 15% ethanol blends was supposed to fix the problem, but according to this report, that “fix” would only buy some four years before the industry is back to bumping against the blend wall. The solution?

With ethanol as the primary biofuel and either blend limit (E10 or E15), a substantial increase in E85 would be required to fulfill the mandate.

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Lexus entered the „premium compact“ segment today by launching their CT 200h hybrid hatchback in Japan. They could call it CT 200hhh – as in harmonious hatch hybrid. We’ll get to the harmonious in a minute. Read More >

The alleged Renault spy case is getting curiouser and curiouser. Renault is in full reverse. Renault CEO Patrick Pelata said information may have been leaked about the costs and economic model of the program, but all technical secrets are safe. “Not the smallest nugget of technical or strategic information on the innovation plan has filtered out of the enterprise.” So what, they are missing a spreadsheet? Read More >

Fears of appliance cars finally manifest themselves. More car manufacturers that ever showed their wares at the Consumer Electronics Show in Las Vegas, the fact that there is a Detroit Motor Show (opening Monday to the press) notwithstanding. Ford notably used CES to take the wraps off its 2012 Focus Electric car. Read More >

As one of California’s leading bastions of privileged liberalism (2009 per-capita income: $91,483) , Marin County is probably one of the top counties worldwide in terms of EV market potential. But apparently the local government isn’t ready to tap its unique combination of money and idealism to become a leading market for electric cars. Even as Californian EV activists are being forced to install second power meters to separate EV charging from home electricity use in order to take advantage of lower electricity rates for EV charging, the NYT reports that Marin County has banned the use of “smart meters” which would allow more widespread EV adoption.

Smart meters, which communicate electricity use wirelessly to the power company would allow EV charging to be easily separated from home use, but they also raise a number of issues that Marin County simply doesn’t want to have to deal with. Privacy, health risks from electromagnetic frequency radiation, and radio communication interruptions are all cited in the Marin County ordinance [PDF here] which bans installation of the smart meters in unincorporated areas of the county. The upside for EV enthusiasts is that this affects on 70k of the county’s 260k residents… but again, knowing Marin County, the county’s numerous rural mansions are probably a huge part of its potential base of EV support. And the towns of Fairfax and Watsonville have already banned smart readers, as has Santa Cruz County, another prime EV market. Time to start rethinking those running costs?