Plan A isn’t working, so it’s time for Plan B. Three major legacy automakers are considering a creative approach to staying in the game amid fierce competition from Tesla and Chinese rivals – all in an effort to make cheap EVs, and a whole lot of them.
Volkswagen, Renault, and Stellantis are weighing possibly joining together to make cheaper electric vehicles – fearing it’s their only option. The urgency is growing as European automakers are being far outdistanced by BYD and Tesla. “A business-as-usual approach is a losing option,” reports Bloomberg. Hmm, didn’t anyone get the memo sooner?
Carlos Tavares, CEO of Stellantis told Automotive News Europe that there is a “perfect recognition that in the future, the companies which are not fit to face the Chinese competition will put themselves in trouble.”
Ideas on the table range from “pooling development resources to bundling businesses across European borders to better compete in the once-in-a-generation shift.” Whatever happens, it will happen soon, within months, the report said.
2024 has so far served up a series of obstacles impacting EV sales, and automakers are saying they have been woefully unprepared. Among the issues, some governments have reduced or dropped EV incentives, rental companies are scaling back on EVs, and anti-EV buzz is brewing during what will be a tense election year in the US and Europe. Even Tesla is feeling the burn at this point, with a 20% share low this year wiping out about $150 billion from its market capitalization, more than double VW’s value, Bloomberg writes.
Next challenge is tighter emissions rules coming into effect in the EU next year, meaning it’s do or die for automakers: make more BEVs or pay hefty fines. To get a sense of what’s possible, if not a worst-case scenario, VW could face fines of more €2 billion ($2.2 billion) if it doesn’t reduce fleet emissions, Bloomberg writes.
Meanwhile, BYD plans to show off its latest EVs at the upcoming Geneva Motor Show, including a Mercedes G-Class rival luxury SUV – which is all rather anxiety-inducing among the Europeans.
Renault CEO Luca de Meo has suggested forming an “Airbus of autos” – which refers to the pooling of resources from Germany, France, Spain, and the UK to vie with Boeing – by bringing together three of Europe’s biggest automakers to build cheap EVs, and build them on a large scale.
Still, most analysts agree that 2024 will be a weird year, and that the “slump” in EV sales certainly won’t last – and that the biggest barrier is cost, with consumers needing to spend more on insurance in some cases, as much as twice as much in the UK, alongside higher upfront costs.
VW, Stellantis, and Renault are all (separately) working on new BEVs priced at €25,000 or less, while Mercedes and BMW plan to launch new EVs with improved technology by 2025. VW, which has been plagued with buggy EV software, may need the help more than anyone, despite its massive EV investment after the 2015 Dieselgate scandal.
Electrek’s Take
All roads seem to be leading to a big push from automakers to convince the EU to slow down its ramp-up to EVs, just as is potentially happening in the US – actions that will have a devastating impact on the climate. According to Bloomberg, the EU is already due to review the plans, with automakers getting their lobbyists ready for a fight soon after the European parliamentary elections in June.
Of course, automakers have failed to sort out a working plan in their EV transition, and that is falling on the backs of an entire industry that employs millions of people, and represents 7% of the entire EU economy. Companies such as supplier ZF Friedrichshafen has spent billions to prepare for EVs, but now may slash as much as 20% of its staff as automakers are pulling back on EV production. Meanwhile, thousands of other jobs – the good-paying kind with benefits and protections – are on the line, with Volkswagen cutting thousands of jobs in Germany to slash $11 billion in costs, and auto suppliers in the EU laying off tens of thousands of workers – just this week a major auto supplier for Tesla, VW, and Ford announced it was slashing 10,000 jobs. 2024 will be a bumpy year, indeed.
What about the US? Well, General Motors and Ford are both scaling back EV investments while also indicating that they are “open to partnerships with peers.” Of course, they have more time to play with than their European counterparts, especially if Biden shifts back the EV strategy in the coming months.
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Corporate America is investing in clean energy at record levels, with tech giants taking the top spots for users of solar.
Meta, Google, and Amazon are leading the charge in solar and battery storage adoption, according to the Solar Energy Industries Association’s (SEIA’s) latest “Solar Means Business” report.
Meta continues to hold the title of the top solar user in corporate America, with nearly 5.2 gigawatts (GW) of solar capacity installed. Meanwhile, Google leads the way in energy storage, boasting 936 megawatt-hours (MWh) of installed battery capacity. Through the first quarter of 2024, these companies have added the most solar capacity to their electricity portfolios, with major players like General Motors, Toyota, and US Steel also climbing the ranks.
The report reveals that US businesses have installed nearly 40 GW of solar capacity both onsite and offsite through Q1 2024, and corporate storage use now exceeds 1.8 gigawatt-hours (GWh). Even more growth is coming: Companies have over 3 GWh of battery storage under contract that will come online in the next five years.
“Some of the largest industrial and data operations in the world continue turning to solar and storage as a reliable, low-cost way to power their operations,” said SEIA president and CEO Abigail Ross Hopper.
Technology companies are at the forefront of this shift as data center growth drives skyrocketing electricity demand. Amazon, for example, leads the US with 13.6 GW of solar procurements under contract, while Meta and Google each have nearly 6 GW under contract – pipelines over 10 times larger than the next company in the rankings.
Target remains the US’s leading onsite corporate solar user for the ninth year in a row, with Prologis, Walmart, Amazon, and Blackstone also making the top five. For the first time, the “Solar Means Business” report is also tracking corporate battery energy storage, with Google, Apple, Meta, Target, Walmart, Home Depot, and Kohl’s among the top 10 companies using storage to meet more of their energy needs in real-time.
Looking ahead, both offsite and onsite energy storage are expected to play a bigger role in corporate renewable energy strategies. Medical companies like Kaiser Permanente are already using batteries to power microgrids, making their facilities more resilient to outages.
Carolyn Campbell, Meta’s head of clean and renewable energy, East, highlighted the importance of expanding solar capacity to match the company’s global operations with 100% clean energy: “We’re thrilled to rank number one for corporate solar procurement in SEIA’s report this year, and we continue to find ways to grow the grid to benefit everyone.”
Target’s vice president of property management, Erin Tyler, said of Target’s 20-year-old solar program, “Through our commitment to solar, we’re well on our way to achieving our corporate goal of sourcing 100% of electricity from renewable sources by 2030.”
The “Solar Means Business” report also looks at the policies driving corporate America’s adoption of solar. Many companies are taking advantage of the Inflation Reduction Act’s long-term clean energy incentives. To further accelerate their renewable energy investments, businesses are calling for improvements in interconnection processes, new community solar legislation, and simpler tax credit monetization.
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Volkswagen Group Africa has officially begun production of a modern electric farm tractor at its multifunctional facility in Gashora, Rwanda in a bid to advance modern, low-emission agricultural initiatives in Africa.
Part of a larger Rwandan initiative called the GenFarm Project, the new VW tractor is part of a “holistic ecosystem” of electrified farming machinery set to be used throughout rural Africa – where liquid fossil fuels are often just as difficult to come by as electricity. The goal is to provide machinery that’s both sustainable and reliable.
“We are growing our footprint in Africa and regard Rwanda as a key growth market. This project demonstrates our commitment to sustainable practices and highlights our ability to provide mobility solutions to the rural community in addition to the urban community currently serviced by our Volkswagen Mobility Solutions Rwanda business,” explains Martina Biene, Volkswagen Group Africa Chairperson and Managing Director. “The GenFarm Project fosters technological innovation and aligns with Volkswagen Group’s strategy to generate meaningful value for both society and the environment through sustainable mobility.”
The GenFarm project will eventually provide mobility services for transportation of goods and people. In June 2023, Volkswagen Group Africa signed a Memorandum of Understanding (MoU) with the Government of Rwanda to provide land for the establishment of the GenFarm Project.
The Volkswagen tractors’ electric motor produces 20 kW (about 27 hp), making it about the same size as the Solectrac product (which hasn’t worked out well in the US, it must be said). That motor gets its electrons from a 32 kWh swappable battery. Batteries are swapped/charged at the Empowerment Hub to minimize downtime. DC fast charging isn’t available, but the relatively small, swappable batteries (hopefully) mean that’s not much of a problem.
The GenFarm project hopes the new VW electric tractor will help clean up Rwanda’s agricultural sector, which currently accounts for some 25% of the national Gross Domestic Product.
Electrek’s Take
We’ve talked a lot about the lack of new farmers in America, but the problem is global – especially as western companies, and western ideas about consumerism, continue to spread. Products like this electric tractor from VW will make farming cleaner, quieter, and (hopefully) more attractive to young workers.
A new, all electric Peterbilt 579EV is in-service at Honda’s Lincoln, Alabama assembly plant, where it’s busy transporting newly-built Honda cars from the plant to a nearby railhead for shipment to dealers across the country.
Part of a pilot program between Honda, Alabama Power, and Virginia Transportation Corp., the new electric semi truck will help stakeholders gather data about the practicality and performance of the battery-powered Pete and use it to generate case studies for broader electrification initiatives. Other supporters of the pilot project include the Alabama Clean Fuels Coalition and, of course, Peterbilt.
“We remain committed to delivering for our customers and the environment,” offered Leo Doire, owner and CEO of Virginia Transportation Corp. “Our new Peterbilt 579EV model will be tested to determine how well it performs against the high productivity demands of our operations. The partners we have at the table will help us maximize this opportunity and prepare to scale up if we get the results we are hoping for.”
The truck itself has been spec’ed to be perfect for the kind of short haul and drayage applications Honda has in mind. This particular Peterbilt 579EV is fitted with PACCAR’s 400 kWh battery and a 670 hp electric motor good for an impressive 2,050 lb-ft of peak torque at 0 rpm.
The truck offers 150 miles of operating range and can be charged in about 3 hours on a 120 kW charger installed specifically for that purpose. A charger, it should be noted, that was partially paid for by Alabama Power.
“Alabama Power’s ‘Make Ready’ program provides businesses with valuable rebates to help reduce the upfront costs of installing EV infrastructure,” says Alabama Power Electric Transportation Manager Hasin Gandhakwala. “We are committed to partnering with customers who are exploring state and federal grant opportunities. Alabama Power is dedicated to advancing EV technologies to better serve the needs of our customers.”
With the big Pete’s 82,000 lb. GVWR and 150 miles of range between charging sessions, it seems like these guys will be making a lot of back-and-forth runs between the Honda plant and the CSX terminal to me. Here’s hoping they see the benefits of electrifying the rest of their vehicle transport fleets somewhat sooner than later.