Transportation Greening Advances

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FountainBlue’s August 1 Clean Energy Entrepreneurs’ Forum was on the topic of Transportation Greening Advances. Below are notes from the conversation.
We may be crossing the chasm in the green automotive world. Driving factors for this shift include 1) the advancements in a range of technologies (from hardware to software to biofuels to networks), 2) the slowly evolving infrastructure necessary to support alternative transportation options, and 3) the increased global demand for green transportation options ranging from materials innovations to alternative fuels to novel manufacturing to software enablers in transportation from telematics to vehicle controls to customer communications.
Based on their current and past work in the clean transportation area, our panelists covered a wide range of perspectives, from batteries to electrification of vehicles, from telematics to auto manufacturing, from drive trains to cylinder optimization, and including a wide range of software solutions for dealers, automakers and drivers, as well as software which helps cars self-manage and optimize settings!
They commented both on the technology advancements creating new opportunities and the challenges and barriers to innovation and adoption and spoke about the exciting possibilities ahead. Below are some of their thoughts and advice.
Thoughts about the industry overall:
• Green transportation companies often needs to work with both automakers and oil companies – industries which are both powerful, having lived with entitlement for a century or so, *and* slow-to-change, plus less likely to be techno-philic.
• Investors are reticent to fund capital-intensive clean transportation solutions, especially if it requires manufacturing, advanced technology development which takes a long time, etc. Investors, especially those experienced in high tech investments, tend to favor green transportation are leaning toward proven technologies, perhaps involving software, for a ready market, headed by an experienced team.
• Companies from other more traditional sectors from batteries to oil to semiconductors, are recognizing and responding to the green transportation opportunities and innovating into different slices of the opportunity, depending on where their established technologies, markets, channels, etc.
Thoughts on the Opportunities Ahead:
• Today’s vehicles are too heavy, and too energy-inefficient and the industry is too fragmented, too slow-to-adopt, and too dependent on dated infrastructure, and the customers are too ROI-conscious, too complacent with the status quo, and the manufacturing process is too labor-intensive, too expensive, too distributed, etc. There are opportunities in all these ‘toos’.
Advice for Entrepreneurs:
• As with any other industry, you must have the right technology, for a proven market and execute on milestones, particularly when funding is tight, when investors have felt burned by previous investments, when capital-efficient solutions and innovative business models are so important.
• The exploding markets in India, Brazil and China will provide huge opportunities for a large range of vehicles, and they are markets which may be easier to enter than the US markets, where regulations and policies and entitlements make it harder to grow an industry and serve a market.
• Consider the question of who will pay for necessary infrastructure upgrades, required up-front investments, etc and find a business or financing model which would make it easier for them to approve a purchase decision.
• Policy changes will impact purchaser buying decisions and create new opportunities, so track them and strategize how these changes will impact your customers and potential customers.
The bottom line is that we need to make cars affordable and usable, and make it easy to get it in the hands of customers.

Resources:
• Boston Consulting Group Report: Batteries for Electric Cars: Challenges, Opportunities and Outlook to 2020, http://www.bcg.com/documents/file36615.pdf
• Forbes Blog, August 1, 2011: How to Build a Car that Gets 54.5 MPG, by Jim Gorzelany, http://blogs.forbes.com/jimgorzelany/2011/08/01/how-to-build-a-car-that-gets-54-5-mpg/?partner=daily_newsletter
Policy Updates of Interest
1. On July 25, 2011, the CPUC issued Decision 11-07-029. http://docs.cpuc.ca.gov/PUBLISHED/FINAL_DECISION/139969.htm This decision relates to the role of electric vehicles in California. Specifically, it does the following:
o Directs electric utilities to collaborate with automakers and other stakeholders to develop an assessment report to be filed in this proceeding to address a notification processes through which utilities can identify where Electric Vehicles charging will likely occur on their electric systems and plan accordingly;
o Affirms that, with certain exceptions, the electric utilities’ existing residential Electric Vehicle rates are sufficient for early Electric Vehicle market development, and, similarly, that existing commercial and industrial rates are sufficient in the early Electric Vehicle market for non-residential customers. The decision also sets out a process to reexamine Electric Vehicle rates in 2013;
o Considers opportunities to migrate toward new and lower cost metering technologies for Electric Vehicle charging and sets out a process to develop an Electric Vehicle metering protocol to accommodate increased Electric Vehicle metering options, such as submetering;
o Determines that, on an interim basis, until June 30, 2013, the costs of any distribution or service facility upgrades necessary to accommodate basic residential Electric Vehicle charging will be treated as shared cost;
o Defines the role that utilities may play in education and outreach related to Electric Vehicles;
o Requires utilities to perform load research to inform future Commission policy; and
o Addresses utility ownership of electric vehicle service equipment.
2. CAFE Standards Set to Rise to 54.5 mpg for 2025
• Will Your 54.5 MPG Car in 2025 Be Electric or Gasoline? International Business Times Staff Reporter, August 2, 2011 http://www.ibtimes.com/articles/191144/20110802/cars-vehicles-miles-per-gallon-mpg-fuel-efficiency.htm Fuel efficiency in the United States will rise substantially under an agreement reached by the U.S. Government, auto manufacturers, and the state of California.
• The new efficiency standard will cover cars and light trucks for model years 2017-2025, and require a performance equal to 54.5 miles per gallon (mpg) in 2025. The standard will reduce greenhouse gas emission to 163 grams per mile, and it also betters the previous requirement of 35.5 mpg by 2016. The new standard will reduce U.S. oil consumption by 2.2 million barrels per day (bpd) by 2025. The United States currently imports 9.1 million bpd of oil.
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FountainBlue would like to thank and acknowledge our panelists for our August 1 Clean Energy Entrepreneurs’ Forum, on the topic of Transportation Greening Advances:
Facilitator Jim DiSanto, GM, Earthrise Technologies
Panelist Ray Jenks, Electric Vehicles and Energy Storage, Interstate Batteries
Presenting Entrepreneur Biswa Ghosh, VP of Engineering, Tula Technology
Presenting Entrepreneur Simon Saba, Founder and CEO, SABA Motors Inc.

Please join us in thanking our sponsors at KPMG and our hosts at SRI for their ongoing support of the series.

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