There were quite a few significant “green” car stories in 2014, but here are my top five, ranked in terms of the potential affect they may have on the automotive industry.
1) Tesla Gigafactory cements electric vehicle future: The ambitiousness of California start-up Tesla is always impressive, but the official confirmation of Tesla’s huge US$5 billion Gigafactory in September has had ripple effects throughout the automotive industry. Not only does it cement Tesla as a serious player in the automotive industry, it also makes its plans to produce 500,000 all-electric vehicles a year at much more affordable prices seem now much more plausible, given that the factory is slated to produce as much lithium-ion battery capacity as all such batteries in the world in 2013.
Technology analysts and its investors have largely been convinced of Tesla’s grand plans (see this article and Tesla’s outsize market cap), though the multiple delays on the Model X suggest that it still has challenges to overcome. The Gigafactory is easily the riskiest of Tesla’s many bold plans: offering an all-electric lineup, a more mainstream US$35,000-ish EV with at least 320 km of range, and a growing network of Superchargers to help customers travel long distances quickly.
With the long lead times in the auto business, especially for revolutionary luxury products, Tesla’s Gigafactory announcement in 2014 that it should be up to full speed in about five years was effectively the very loud starter’s pistol to officially begin the race between it and the powerhouse automotive companies to produce their own competitive entry-luxury EV/plug-in options.
2) The major decrease in fuel prices, and its many effects: The drop in average fuel prices to under a dollar a litre across Canada for the first time since 2010 is a late-arriving story in 2014, but surely a significant one, though how significant long-term will depend on how long the lower fuel prices last.
The falling prices will have helped the rise in crossover/SUV/pickup sales to some degree, and likely effected a notable drop in hybrid sales, though more conventional cars adopting fuel-saving technologies such as CVTs, higher-speed transmissions, and widespread start/stop will have played a role in that also. Hybrid sales for industry leader Toyota in Canada so far this year are largely down, as only the new Highlander Hybrid and the Lexus CT200h saw a hybrid sales increase for the entire year, out of 11 hybrid models.
There’s little doubt that these lower prices will mean more fuel use, with fuel efficiency less of a priority for car shoppers and more gas guzzlers bought, and older cars staying on the road longer – but how much more fuel use is a massive question nearly impossible to answer.