Electric Scooter Companies Risk Backlash from Regulators for Customers' Risky Behavior

Several electric bike and scooter-sharing companies have started up within the past couple of years. One of the biggest companies flooding the streets of major cities like Los Angeles, Santa Monica, and San Fransisco is Bird, now referred to as the Uber of scooters, which seemed to appear out of nowhere less than a year ago. But, while the scooters have grown ever more popular among their growing base of users, Bird has faced backlash from the cities and some of their residents. According to Tracey Lien's L.A. Times article, despite Bird's efforts, the users of the electric scooters consistently ignore local laws and safety guidelines.

But what can Bird really do about it? The cities have tried upping regulations on the scooter companies, they've issued fines and citations, and they've even forced Bird to update their terms and conditions to try to guarantee safer practices. Still, little has changed in terms of user behavior. Bird can add extra rules to their app and make users agree to wear a helmet. Bird can even provide their customers with helmets for free. But there's no way for Bird to actually guarantee that their customers will use the helmets.

After trying to deal with the problem through the company, the cities have had to try other alternatives in promoting safer riding. They have been able to get companies like Bird to improve safety guidelines and commit to providing a percentage of their daily income to the city to go toward improving infrastructure, which could, in turn, promote greater safety and improve user experience. But, they've also tried going after the individual riders, which has worked, to an extent. By issuing citations and fines to scooter-riders not wearing helmets, local police have been able to get some riders to make a more conscious decision and wear a helmet because they don't want to have to pay over $100 for not doing so. Other users choose to avoid the scooters altogether, determining that the risk of a ticket is too high to justify the enjoyment or convenience that the scooters provide.

Still, others continue riding the scooters, and just hope that they never get stopped by the police. They find helmets to be uncomfortable, or inconvenient. Many riders don't wear helmets simply because they don't have their helmet with them. These types of ride-sharing services tend to attract spur-of-the-moment users, not those who knew they would use one from the time they left their house in the morning. The only way for every rider to wear a helmet is if all potential users carried around a helmet with them all day, which just isn't realistic. Some dockable bike-sharing companies have had systems where a user could retrieve a helmet when renting a bike, but such a business design had higher costs, which led many of those companies to go out of business. There have been dozens of injuries reported in recent months, mostly involving scrapes and bruises, but some with broken bones and head trauma. There doesn't seem to be an obvious solution to the problem at the moment, but if Bird and similar companies don't make a change, major cities could start banning the scooters altogether.

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Washington D.C. Public Transit System Purchases Fleet of 14 Proterra Electric Buses

Technological innovations in this day and age, especially those in the realm of transportation, have been focusing more and more on green energy. From Tesla's cars to Nikola Corp's trucks, many companies are trying to steadily phase out the necessity of fossil fuels for long-distance travel. The problem with that goal is that, at the moment, green energy sources and vehicles that utilize those types of energy tend to be more expensive. To that end, the companies that focus on electric vehicles usually need some sort of governmental relationship to get off the ground. With Tesla, customers were able to get government rebates/subsidies after purchasing cars like Tesla's Model 3. According to Russ Mitchell's L.A. Times article, Proterra (a manufacturer of electric buses) sold 14 of its vehicles to the Washington, D.C., Circulator transit system earlier this month.

The complete cost of those buses was not reported, but Proterra's buses are known to cost somewhere between $700,000 and $900,000 each, so it's likely that this purchase cost D.C. quite a bit. On the one hand, spending millions of dollars on electric buses may seem exorbitant, but to another perspective, the fleet of buses serves to show millions of diplomats and tourists from around the world that the United States is working on developing technology with lower environmental impacts and better user experience. Though nearly a million dollars per bus is a lot of money, Washington D.C. gets tens of thousands of tourists each day who use the bus system to visit the various landmarks and museums.

Although Proterra is based out of Northern California, the company has a factory on each coast: one in the City of Industry, California, and the other in Greenville, South Carolina. The South Carolina plant has a perfect location to be accessible to the nation's capital, while the California plant is right in the center of all kinds of innovation going on in the state. The East Coast side of the business puts it in the view of politicians and lobbyists who make the decisions regarding public transportation around the country, and the West Coast side of the business has been able to draw from engineers and manufacturers already in the area for work in the aerospace industry.

Proterra doesn't have a monopoly on electric buses, though. California's plethora of skilled workers has made the Los Angeles area a hub for the development of electric buses and other such vehicles. Another company, called BYD, which is based out of China, has a factory in Lancaster. According to their own numbers, BYD has sold at least 722 buses, while Proterra has sold over 546. For such a pricey commodity, both companies seem to be doing relatively well in an industry that is fairly new. Even some universities are switching their bus systems to electric ones. There's no way to tell for sure, but it seems like the trend of electric buses could really take off throughout the nation in the near future.

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Start-Up "Romeo Power" Attempts to Break into Market for Electric Vehicle Batteries

As discussed in a previous post, several electric car companies (Tesla/ Solar City being the most notable example) have been pushing to create the perfect combination of technology for their energy-conscious consumer. The first company to come out with the technology (some combination of electric vehicles, personal solar panels/ wind turbines, and a high-efficiency battery to store the collected energy) to match that growing need is bound to hugely benefit their productivity in the future.  Although Tesla Motors has made itself a household name in the electric vehicle market, Russ Mitchell, in his L.A. Times article, describes a start-up called Romeo Power that may be able to stand in the way of Tesla's dominance of the high-efficiency battery market.

Not only is Romeo Power a new competitor in a market with high barriers to entry, but the people behind the company seem very confident that their product is better than any sold by the competition. The battery packs are innocuous looking, long and thin to fit underneath a car. Inside the battery pack is what stores all the electricity: thousands of battery cell cylinders slightly larger than a AA battery. Those cylinders have the ability to accelerate a car from zero to 60 in just a few seconds and can allow the vehicle to drive for hundreds of miles without stopping, so packing them all together like that can be a tricky endeavor.

Not only do customers want a battery that stores as much energy as possible and charges quickly, they also want to know that they are safe, that their car won't explode when it hits the slightest bump. Those are all the aspects that design teams have to take into account. They need to ensure their customers' safety while still improving the product's performance. While that may seem unrealistic, Romeo has claimed that its battery packs can achieve a 25% higher energy density than any of its competitors, an unbelievable improvement to most analysts. However, if Romeo succeeds in breaking into the industry with such high-efficiency batteries, they could easily find themselves on the path toward leading market share.

While it seems impossible to many that the start-up will ever take significant market share away from the leaders in the industry like Tesla, some analysts are unsurprised by the company's quick growth. The executives of the company all come from backgrounds involving battery production, and most of them worked for a while at SpaceX, Faraday Future, and Tesla, where they learned a lot about their competition. Sure, mid-level electric vehicles won't need their battery packs, because their manufacturers make their own in house. However, if their battery packs truly have an increased efficiency of 25%, then even the high-end companies will want to use their battery packs. It's simple business: if you don't use the best parts in your product, most customers will choose to go with a company that does.

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ElectroMotiveLA Aims to Educate Consumers About Electric Vehicle Options

Most if not all drivers have heard something about the variety of electrical vehicles being marketed throughout the ever-evolving automobile industry. However, most of those people only know the bare bones about electric cars, if even that much. Besides the fact that electric vehicles are better for the environment and can be better for a consumer's wallet in the long run, very few consumers know much about what makes the different brands and models distinct. Fortunately, according to Russ Mitchell's L.A. Times article, a brand new website called ElectroMotiveLA was started to try to help people become more informed.

The website has many setting that allows potential buyers to do the necessary research to fully understand the car that they are looking to buy. It is designed specifically for Los Angeles residents and details the different models of electric vehicle and the kinds of features each version comes with. The website's settings allow a user to search for specific charging capabilities, the distance the car can travel on a single charge, and the type of tax credits the government tends to offer. To get specific information, ElectroMotiveLA meets with the heads of marketing at the companies and dealerships, but according to Mitchell, does not accept any payment from them.

ElectroMotiveLA is funded by a subsidiary of the Schmidt Family Foundation, a non-profit organization with a goal of improving renewable energy. Because the Foundation is looking to cut out fossil fuels and increase the prevalence of green energy sources, the creation fo the website to help consumers understand the technology seems to be the logical first step. Additionally, because ElectroMotiveLA receives its funding completely from the non-profit, it doesn't need to collect money from the car companies that it is reviewing, which gives the website more credibility.

Mainly, the goal is not to inform people about how electrical vehicles can save fuel and help prevent further environmental degradation. Instead, ElectroMotiveLA focuses on the stylish, cool aspects of the new types of electric vehicles, In that way, potential buyers have a good time learning about the technology, and may be more inclined to invest in it in the future. At this point, because gas prices are relatively low, people are not interested in paying double the price to get the electric version of their trusty combustion engine.

If people can be shown that the price difference is not so large, or that the difference in price can be made up over the long-term based on the personal and societal benefits of driving an electric car, then maybe that portion of the automobile industry will be able to grow. Already, California is moving forward, taking the lead in the electric vehicle market. That state boasts about 50% of total sales in the country, of which Los Angeles itself holds about 20% of the state's sales. Improved education on the subject, such as that provided by ElectroMotiveLA, could help the state's record continue to improve, Perhaps California's zero-emission mandate will be met sooner than expected.

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SolarCity Releases New Type of Solar Panels in Response to Decreasing Growth in the Industry

One of the biggest complaints that homeowners have against solar panels is that they "look ugly." Homeowners claim that the normal glass and metal panels clash with the look of their house and negatively affect the feel of the neighborhood. Fortunately for them, Elon Musk, the chairman of SolarCity, has revealed a whole new line of solar panels that look more like regular roofing tiles. Ivan Penn and Russ Mitchell, in their L.A. Times article, discuss what this innovation means for consumers and how it ties into all of the other technology being designed by Musk's companies.

Not only do these re-designed solar panels address the "ugliness" issue, but Musk also hopes that these panels will provide homeowners with more of an incentive to invest in one of Tesla's wall-mounted batteries. When the sun is shining, the tiles provide energy for current use and charge up the battery. When the sun isn't shining, the charge in the battery can be used to provide energy for the house. Eventually, he hopes that every home will have its own personal "alternative energy ecosystem" made up of Tesla and SolarCity devices. His goal is for green-minded homeowners to mix electric vehicles, charging stations, solar rooftops, and wall-mounted batteries to create the perfect blend for an energy-efficient home. Realistically, all of those devices are very pricey, so the components are sold separately, but Musk makes it clear that they work best as a total system.

Analysts believe that SolarCity's big announcement regarding the new-and-improved solar panels was due to the slowing growth of Southern California's solar industry. Where solar panel sales rose by 66% in the first three quarters of 2015 compared to the previous year, sales only rose by 12% in the same period of 2016. They believe the slowing growth is caused by the dwindling number of early adopters for the technology. The hope is that the new style of solar panels and the introduction of Tesla's new Powerwall home electricity storage batteries will help them quickly move on to the early majority segment of potential customers. Additionally, the slowing growth could be due to changes in state and local regulations. Rules are changing regarding how solar companies can sell their energy to utility companies, and tax credits for green energy are running out, so it becomes a less affordable proposition by the day.

Still, overall, analysts believe that the solar industry will continue expanding through the end of 2016. Prices on solar panels and wall-mount batteries are continuously going down, which helps those on the fence to make a decision. It is believed that overall sales in the solar industry will reach $38 billion by 2025, from $3 billion in 2016. While utility companies and local regulators have been targeting solar providers, making their costs rise, the solar companies have responded by partnering with electricity storage companies. It is sensible that a package of solar energy with a way to store it can be optimal based on customer demands. But, Musk already has a head-start on everyone else, since Tesla and SolarCity already make up their own strategic alliance. If other companies want to catch up, they will have to figure out a way to cut costs significantly, or accept lower profits until they have been able to get a substantial market share.

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Not All Tesla Customers Will Get Expected Tax Rebates on Model 3

Tesla's new electric vehicle, the Model 3, is making waves throughout the market. Thousands of buyers are looking to get their hands on the luxurious, energy-efficient, affordably-priced car. At $35,000 before any governmental rebates, the Model 3's price can't be beaten by other electric vehicle producers. Thousands of dollars in state and federal rebates are offered to buyers, thus making the car an even better deal, but the rebates are not as easy to get as a buyer might think. According to Rob Nikolewski's article in the L.A. Times, buyers shouldn't count on the rebates when determining whether they can afford to purchase Tesla's Model 3.

Just this week, Tesla allowed potential customers from around the world to put down a $1,000 deposit in order to reserve their Model 3, which won't actually hit the market until December 2017. In the first 3 days, over 270,000 customers reserved their future vehicle, drawn in by its price, appearance, and the Tesla brand name. Many also took into account potential rebates that they expect to receive from the government, which Nikolewski considers an unfortunate oversight. According to him, most of the government rebates could run out by the time people get behind the wheel of their Model 3.

Southern Californians can receive $7,500 from federal subsidies and $2,500 from state subsidies when purchasing one of Tesla's electric vehicles. Unfortunately, the subsidies are only allowed for a certain number of customers. After 200,000 Tesla vehicles have been sold, the government will start to phase out the subsidies until, eventually, there will be none left. Additionally,  the state recently announced that wealthy buyers (a head of household income of greater than $340,000 or a single filer income greater than $250,000) will not qualify for the state rebates at all. So, some buyers are trying to play the odds to have the greatest chance of getting the $10,000 in tax rebates.

One customer in Santa Monica, Paul Scott, decided to go for the $50,000 version of the Model 3, which comes "fully loaded." Scott's logic in ordering the most expensive model is that he assumes that Tesla will produce their more expensive models earliest, which means that he will have a greater chance of getting the rebates before they run out. Either way, Scott asserts, he is fully willing to buy the car, whether he gets the tax credit or not. Other buyers, however, don't even seem to realize that the tax rebates are not a definite source of income. They are assuming that the price will automatically be $10,000 less, and are making their purchasing decisions with incorrect numbers, a mistake that they will regret.

Tesla needs to make the terms much more clear for customers. While $35,000 is still an incredibly low price, especially for a high-end, energy-efficient vehicle that grants owners the use of Tesla's supercharger stations, customers will not be happy if they find out that they won't be able to get the $10,000 in tax credits that they had expected. For all we know, California may decide to raise the number of individuals to which they will grant rebates, in order to encourage more potential buyers into greener vehicles. So, it is possible that a lot more than 200,000 customers will get tax credits. Either way, Tesla needs to make the situation as transparent as possible so as to avoid upsetting customers and losing potential customers forever.

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Faraday Future to Break Ground on Billion Dollar Nevada Plant in 2016

Like its competitor, Tesla Motors, electric car start-up Faraday Future has decided to open up shop in Nevada. Faraday Future, a new, relatively small rival to the other electric car producers, was debating among California, Nevada, Louisiana, and Georgia for their billion dollar production facility, but eventually made their decision and will start construction in the beginning of 2016. a main factor influencing Faraday's decision was an offered package of over $300 million in tax incentives by Nevada legislators, According to company executives, this wasn't the only reason, though, and a more detailed analysis of the choice is made in Chris Kirkham's and Ivan Penn's L.A. Times article.

Faraday Future, which is branded as an electric car company, has not yet produced an electric car. One of the company's founders and primary backers is Chinese media mogul, Jia Yueting, who has a net worth of several billion dollars and is ranked as China's 17th-richest person. Many of Faraday Future's top executives previously worked for Tesla and luxury car companies like BMW and Porsche. As such, they have quite a bit of experience with electric vehicles and the selling points behind them. The market for electric vehicles, while it is still undetermined based on Tesla's sales over the past decade, has the potential to grow larger, especially as people become more environmentally conscious and try to find ways to be more energy efficient.

Nevada legislature offered similar perks to Tesla Motors a year ago. With the help of $1.3 billion in tax abatements, Tesla began work on a $5 billion factory outside of Reno. While Faraday only received a $335 million deal, that is still nothing to scoff at, and will go a long way toward creating more jobs in Nevada and producing vehicles that rely more on renewable energy sources rather than fossil fuels. These deals, which might look to some like a waste of money on the part of legislators, can actually be quite beneficial to the state as a whole due to the production of jobs and the increase in goods for export to other states and other countries. The money in tax incentives that Nevada is providing to these companies can be earned back many times over by increased productivity over the long-term future.

Faraday's business model must be pretty sound for the state to take a risk and invest in them and in the hope of domestic growth in the future. Faraday doesn't just get the $335 million immediately; they have to prove that their company is moving forward. According to legislators, Faraday will not receive all of the tax abatements and other promised perks until it has invested at least $1 billion toward construction of the plant. Even without help from the tax incentives, Faraday's investment could pay off very well in the long run. As gas prices stay low, more individuals are going back to larger SUVs, since they can better afford to fill up the tanks of such automobiles. However, if and when gas prices rise again, people will be more interested in the fuel efficiency of electric vehicles and hybrids. So, as companies like Faraday and Tesla start getting ready now, they may be able to have their production running smoothly by the time demand for electric vehicles increases again.

While the tax incentives helped Faraday to make their final decision of Nevada, there were aspects of the other potential states that could have made them better choices. California, Louisiana, and Georgia all have direct ocean access, which means that they have ports and, therefore, make shipping and receiving of products and parts much simpler. Between California and Nevada, the latter has more wide-open spaces in which to build large factories. All in all, Nevada, which lacked direct access to seaports, still provided close enough access to make shipping of parts not too much of a nightmare in transportation. Highway 15 provides Nevada an almost direct route to the West Coast's ports, which, when combined with the tax incentives, made Nevada a better choice for Faraday's base of production. While we don't know whether California's legislature offered similar tax incentives to convince Faraday to choose the Golden State, in the end, Faraday made its choice, taking the best deal for itself while also benefiting the state of Nevada.

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