California

Four big automakers have cut a deal with California to adopt the state’s vehicle emissions rules in a compromise agreement, bypassing the Trump administration’s plan to freeze fuel economy standards.

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As the Environmental Protection Agency prepares to introduce the final form of its proposal to freeze US fuel economy standards sometime in the near future, California is giving more indications of how it intends to fight the regulatory rollback.

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Last week, California Gov. Jerry Brown announced a series of new executive orders to push the state to have 5 million electric cars on the road by 2030.

It’s the most ambitious zero-emission goal in the US, but is it enough? 
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The California Independent System Operator (CAISO) – the group that manages 80% of the electricity used in California – has begun showing utility-scale batteries charging and discharging into the power grid via their website.

By resolution, due to a natural gas emergency, the State of California requested large-scale battery based energy storage projects be attached to the grid at the end of 2016, early 2017. Now we get to watch the systems – some that we covered – do their job.

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Norway, Paris/France, England, India, Germany, China and Scotland have all announced plans to ban the sale of gasoline vehicles in the upcoming decades. The US state of California might be close behind if a new bill expected to be introduced in the coming month by Assemblymember Phil Ting takes hold.

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California is already leading electric vehicle adoption in the US, but they still need to speed things up if they want to achieve their goal of 1.5 million electric vehicles (EVs) by 2025, and 5 million by 2030. There are currently around 300,000 EVs on California roads today.

A new bill unveiled today would unlock $3 billion worth of incentives for an updated version of California’s current EV rebate.
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The market share of electric vehicles and plug-in hybrids keeps increasing steadily in California during the first quarter of 2017 according to the California Auto Outlook quarterly report. On the other hand, the market share of hybrids, excluding plug-ins, has been declining since 2013 and continues to do so in the current calendar year.

Nationwide new car registrations decreased by 1.4 percent. However, dealers in The Golden State saw a 0.7 percent increase in registrations and the state is now on track to top 2 million new car registrations again for this year. The Californian market hit a low of 1.04 million new light vehicle registrations in 2009 and topped the 2 million mark in 2015 after years of strong recovery since the financial crisis.

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On the heels of the California Air Resources Board’s Midterm Review of the Zero-Emission Vehicle Program, the state’s electric utilities are seeking to expand electric vehicle infrastructure with thousands of new charging stations.

Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) all submitted new plans to the California Public Utilities Commission (CPUC) last week to collect about $1 billion more from their customers in order to finance the important expansion.
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Pacific Gas & Electric Co., the biggest utility company in California, recently submitted a proposal to the California Public Utilities Commission (CPUC) to install approximately 7,500 level 2, and 100 DC fast EV charging stations around the state, which would be, by far, the most massive roll-out of chargers in the United States.

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California’s Air Resources Board is starting to realize that it might have made a mistake by projecting a 15.4 percent market share for zero-emission vehicles (ZEVs) by 2025. The state, which pioneered incentivizing automakers to sell electric vehicles, is being outpaced by countries, like Norway and the Netherlands, exploring the idea of ZEVs having a 100 percent market share within the same timeframe.

Furthermore, because of Tesla, which only sells ZEVs, and the popularity of a few plug-in hybrid models, like the Volt, ZEV credits have flooded the market and now automakers would only need to achieve a 6 percent ZEV market share in the state and compensate with credits bought from other automakers in order to comply with CARB’s mandate without being fined.
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A few weeks ago, Tesla closed an important $1.7 billion stock offering to finance its new build plan for the Model 3. The capital raise was needed for Tesla to accelerate its production and achieve a rate of 500,000 cars in 2018 – two years earlier than previously planned.

The new plan is in response to the higher than expected demand for the Model 3. Tesla’s management was expecting 100,000 to 200,000 reservations at best, but the automaker already received over 373,000 reservations.

While Tesla already confirmed that some of the capital would be used for its operations, the company made it clear that most of the money would be put toward an expansion of the Fremont factory to increase production. Now we get a specific number for the expansion as Tesla is applying for a $106 million tax break with the state to help the project.
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Earlier this year, we reported on a new proposed bill in California to eliminate the sales tax on new cars manufactured in the state for out-of-state buyers. The bill aims to spur “industrial tourism” and encourage people to come pick up their new Teslas at the automaker’s Fremont factory without having to pay California’s sales tax.

The bill, which was proposed by Tesla and is sponsored by Sen. Bob Wieckowski whose district is home to Tesla’s Fremont factory, is now facing strong opposition as some legislators suggest it only aims at offering tax breaks to rich people able to afford luxury vehicles.
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As Tesla is looking to almost double its annual vehicle production every year for the next few years, it has to significantly increase its headcount, which currently stands at just over 15,000 employees. Now Tesla is reportedly set to go on a hiring spree this weekend to hire “hundreds” of “production assembly associates” at a “massive” job fair in Fremont, California, according to job listings.

Tesla recently confirmed that it is currently working on increasing its production plans to minimize the wait for the Model 3 following the storm of reservations it received for the $35,000 all-electric sedan – approaching 400,000 cars as of the latest update.
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Next week, the California Air Resources Board (ARB) will hold a public workshop on the FY 2016-17 Funding Plan for Low Carbon Transportation and Fuels Investments and AQIP. Under the current proposal, the Clean Vehicle Rebate Project (CVRP) would receive $230 million in funding through 2017.
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It’s difficult to get accurate delivery numbers for Tesla in the US since the company doesn’t disclose sales by market, but in California, which is Tesla’s biggest market in the US by far, we can follow state rebates for clean vehicles in order to get a good idea of Tesla’s growth in the state.
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Sen. Bob Wieckowski, whose district is home to Tesla’s Fremont factory, is sponsoring a bill which include a provision to eliminate the sales tax on new cars manufactured in California for out-of-state buyers. The new provision would allow Tesla to spur what the senator refers to as “industrial tourism” and maybe even create a program similar to BMW’s popular “European delivery” option.
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As the end of the year, and consequently the end of the fourth quarter, is getting closer, investors and analysts are debating whether or not Tesla can achieve its ambitious delivery goal of 17,000 to 19,000 cars in the last 3 months of the year for a total of 50,000 to 52,000 in 2015.

Achieving the lower-end of the guidance would mean a 46% quarter to quarter increase and a 73% increase over the same period last year. We’ve already reported on registration data for October and November for Tesla’s most important European markets, but now with more data coming from California and Denmark, as well as new information about the Model X and demonstration vehicles, it looks like Tesla is poised to achieve at least the lower-end of its guidance.
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The so-called “poaching war” for top automotive engineering talent between Tesla and Apple gathered quite a few headlines in the past months, especially after Tesla CEO Elon Musk called the Cupertino company the “Tesla Graveyard” for hiring people he claimed were “fired” by the company. But after looking closer into the recent hires between the two companies, it looks like Tesla has little to fear from Apple’s recruiting effort, at least if we compare it to Faraday Future’s.

Faraday Future took a small step out of ‘stealth mode’ earlier this summer to announce that it is looking for a location for a manufacturing facility to build an electric vehicle. In the months since, the 1-year old startup ramped up its hiring effort and now has over 400 employees with an impressive percentage coming from Tesla.
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