It’s been more than eight years since I first drove one of BMW’s MINI E electric prototypes around downtown Los Angeles. One of the first characteristics I noticed about that car was the extremely aggressive regenerative braking that enabled driving virtually without touching the brake pedal. While BMW has persisted with that strategy as the only control mode on the production i3, other automakers have provided similar abilities only when shifting the transmission to Low mode. After driving the new Chevrolet Bolt EV from Tesla’s Silicon Valley backyard into the heart of San Francisco, I think all Bolt drivers should consider driving this way all the time.
The launch of the second-generation XC90 marked the beginning of a new era for Volvo a couple of years ago. The XC90 is the first model to ride on the company’s all-new scalable product architecture (SPA), the first all-new platform to come from Gothenburg since Ford sold the Swedish brand to China’s Geely in 2010. After initially being available only with boosted four-cylinder engines, the XC90 is now the first regular production plug-in model Volvo is offering in America and I recently spent a week driving one.
It’s now been about a decade since BMW first announced its plans to get into the hybrid game and it was another three years before any production models with electric drive assist hit the streets. A lot has changed since BMW launched the ActiveHybrid X6 and ActiveHybrid 7 essentially as experiments in 2009. Electrification is now becoming relatively mainstream with batteries and electric motors no longer limited to super-efficient cars like the Toyota Prius. After a week with the 2016 X5 xDrive40e, there’s no doubt that the future of the ultimate driving machine includes plugs across the board.
If you’ve been following along over the past year or so, you’ve probably noticed that I’m quite enamored with the current generation Hyundai’s midsize sedan, the Sonata. Since early 2015, I’ve driven the 1.6-liter turbocharged Eco, the 2.0-liter Hybrid and now the newest member of the lineup, the Plug-in Hybrid. The Sonata PHEV is the first Hyundai-branded model sold in North America with a plug and it’s one of only two plug-in hybrids in the midsize family sedan segment, the other being the Ford Fusion Energi.
A good rule of thumb when attending an auto show is that the more radical looking a concept car is, the less likely it is to ever make it to production. Virtually every major brand is guilty of producing pieces of rolling sculpture that end up doing little more than introducing a couple of new design cues that end up on more mainstream models. When we first saw BMW’s Vision EfficientDynamics concept at the 2009 Frankfurt Motor Show, it seemed to fall squarely into this category. Nevertheless, five years later something very much like that concept emerged as the first-ever i8.
As I sit down to write these words about the 2016 Chevrolet Volt, I just realized that it has been almost exactly 10 years since Jon Lauckner and Bob Lutz sat down and sketched out the basic architecture for what they hoped would be a truly practical plug-in car. In the days and weeks that followed, Lutz and Lauckner gathered up the core of an engineering and design team that would eventually bring the first-generation Volt to production four and a half years later. A decade on from those first discussions, the second-generation Volt is now on sale and it’s vastly superior to the original in every way.
Like most things in the real world, when it comes to automotive electrification, there is a continuum of approaches rather than a binary electric or not. At the minimal end, you’ll find automatic stop-start systems while the maximal solution relies on electric motors alone for propulsion. Lying somewhere in between is the Ford C-MAX Energi, the Dearborn automaker’s first production plug-in hybrid. After three years on the market, is the C-MAX Energi a good solution for those interested in going electric without range anxiety?
When I first started speculating on the idea of an Apple car last February as rumors about Project Titan emerged, I was enormously skeptical that it would ultimately happen. However in the days since Apple’s most recent media event where they announced the iPhone 6s, I’ve begun to rethink my assessment. I now see a way that might lead to Apple’s entry into the car business based on their latest approach to selling smartphones.
Nine years ago, I was beginning my career as a professional writer just as a little Silicon Valley startup was emerging from stealth mode to introduce its first product. Taking its name from one of the greatest engineers and inventors of all time, Nicola Tesla, that company reignited the pursuit of battery electric vehicles with a heavily modified Lotus Elise chassis packed with 1,000-pounds of lithium ion cells. It would take another two years before paying customers would finally take delivery of the first Roadsters and another four after that before Tesla would finally deliver its first completely in-house developed product, the Model S. During a recent trip to California I finally got my chance to drive the insanely fast Tesla Model S P85D.
The car business is an enormously expensive place to play. Building factories can cost anywhere from hundreds of millions to billions of dollars, especially if you want to mass produce anything. In late 2008 and early 2009 at the height of the financial crash, we saw General Motors go from $16 billion in cash reserves to virtually nothing in a matter of months as they raced toward bankruptcy. Tesla Motors is now standing on the precipice of major investments to grow the company and they have been spending their reserves at such a prodigious rate that they too need to raise more cash.
In the recently released Q2 2015 earnings report, a more troubling aspect than the operating losses which have been typical of the company’s finances from day one, was the cash burn rate. Tesla went from having $1.905 billion on December 31, 2014 to just $1.15 billion on June 30. A good chunk of this went to paying for equipment in the Fremont, California factory for production of the Model X crossover and ongoing construction of the “Gigafactory” battery plant near Reno, Nevada.
However, the outflow is just getting started as the company prepares to start equipping that $5 billion battery factory (although a significant chunk is coming from Panasonic and other suppliers) as well as developing and producing the more affordable Model III. Tesla has publicly stated a goal of expanding production from 50,000 units this year to 500,000 by 2020. While selling half a million cars would raise significant revenue, they have to spend a lot of money before they ever get there.
To help keep things going in the near term, Tesla announced plans today to issue $500 million worth of new common shares in the company. CEO Elon Musk has committed to spending $20 million of his own money to buy new shares. Given the enormous investments that will be required for equipment and engineering in the next five years, $500 million seems like a pittance and it likely won’t be the last time we see Tesla going to either the equity or debt markets to raise more money. In this case, Tesla’s stock price has already taken a hit in the last few weeks dropping from a high of $282 on July 20 to close at just over $238 yesterday. Right now they are probably balancing the need for cash with not overly diluting the stock and sending the price down even faster.
These are perilous times for Tesla Motors.