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Dealers mobilize to protect their margins from automaker subscription services

Six individual auto brands — Lincoln, Cadillac, Porsche, Mercedes, BMW and Volvo — have established or are trialing a vehicle subscription service in the U.S. Three third-party companies — Flexdrive, Clutch and Carma — run brand-agnostic subscription services. And three automakers — Mercedes-Benz, BMW, and General Motors — have also launched short-term rental services. Dealers, afraid of how these trends might affect their margins, are building political and lawmaking campaigns to protect their revenue streams. So far, three states are investigating automaker subscriptions, and Indiana has banned any such service until next year. It's certain that those three states are the first fronts in a long political and legal battle. Powerful dealer franchise laws mandate the existence of dealers and restrict how automakers are allowed to interact with customers to sell a vehicle. On top of that, Bob Reisner, CEO of Nassau Business Funding & Services, said, "Dealers and their associations are among the strongest political operators in many states. They as a group are difficult for state politicians to vote against." In California earlier this year, the state Assembly debated a bill with wide-ranging provisions to protect against what the California New Car Dealers Association called "inappropriate treatment of dealers by manufacturers." One of those provisions stipulated that subscription services need to go through dealers, but that item got stripped out when dealers and manufacturers agreed to discuss the matter further. In Indiana, Gov. Eric Holcomb signed a moratorium on all subscription programs by dealers or manufacturers until May 1, 2019, to give legislators more time to investigate. Dealers in New Jersey have taken their campaign to the state capitol, asking that the cars in subscription programs get a different classification for registration purposes. Automakers run the current subscription services and own the vehicles. Sign-ups and financial transactions happen online or through apps, leaving dealers to do little more than act as fulfillment centers to various degrees, with little legal recourse as to compensation amounts when they're called on to deliver or service a car. That's a bad base to build on for business owners who've sunk millions of dollars into their operations.

Recharge Wrap-up: BMW i3 goes against Mercedes B-Class ED, Tesla good for business

Car and Driver has published a comparison test pitting the 2014 BMW i3 against the 2014 Mercedes-Benz B-class Electric Drive. The test not only measured the quality of the driving experience, but also all the quantitative details that are especially important when looking at electric vehicles. For instance, the Benz's real-world MPGe surpassed its own rating, but it still couldn't match the BMW. The B-Class, though, won in the range department. We won't spoil all the results, or Car and Driver's overall pick, but you can head over to the article to find out for yourself. Tesla's expanding business, including the Gigafactory being built in Reno, NV, is encouraging growth in the locales and associated businesses. Some of Tesla's suppliers are talking of relocation, wanting to be close to the action stirred up by the electric automaker's expansion. It makes good business sense to be in the same neighborhood as Tesla. "We can react quickly, and our engineers are constantly working with Tesla," says Futuris General Manager Sam Coughlin. Brookings Institute fellow Jennifer Vey says, "The land around Tesla is being redeveloped and reimagined. It's a mash-up of an anchor campus, startups, housing and transit, in a physically compact area where companies can cluster and connect." Read more at San Jose Mercury News. EVs are doing even more to reduce energy use clean up the air, according to new analysis from the Union of Concerned Scientists. According to findings, 60 percent of Americans now live in areas where EVs do more to reduce emissions than hybrids, up from 45 percent in 2012. Average electricity use is now 0.325 kWh per mile, down five percent from 2011. EV performance - in terms of mileage and emissions - is improving compared to traditional fuel vehicles, based on the sources of electricity in various regions. Read more from the Union of Concerned Scientists. Zipcar's carsharing network has launched in Paris. Zipcar is expanding across Europe, and has already established itself in Austria, Spain and the UK. According to Zipcar France's General Manager Etienne Hermite, "In a highly populated city, Zipcar's model has been proven to remove up to 15 personally owned vehicles from the road for each Zipcar in service, reducing parking demand, congestion and emissions." Zipcar European President Massimo Marsili hopes that most Parisians will eventually be just a short walk from a Zipcar.

Recharge Wrap-up: Honda FCV Concept comes to Detroit, Toyota seeks young green energy fellows

Honda will bring its FCV Concept to the 2015 North American International Auto Show in Detroit in January. The hydrogen-powered concept made its Japanese debut in November, and will now make its way to North America for the first time. The FCV concept improves upon the design of the FCX Clarity with a more striking appearance and roomier interior. Its smaller powertrain packaging means more space for people, and the FCV Concept seats five passengers. Honda also expects the next-generation fuel-cell car, which is scheduled to go on sale in Japan in March 2016, to cost less and have a range of over 300 miles. Read more in the press release below. The Mercedes-Benz B-Class Electric Drive has been awarded an environmental certificate from the TUV Sud technical inspection authority. The certificate is based not just on the vehicle's operation, but the entire lifecycle of the car, including production and recycling. The B-Class Electric Drive produces 24 percent less CO2 over its lifecycle than the Mercedes-Benz B180 when using the EU electricity mix, and 64 percent less when powered by hydroelectricity. Mercedes credits not just the use of electricity, but also the car's energy management system - such as its radar-based regenerative braking - for its carbon reductions. Read more in the press release below. Scania will test a wirelessly charged plug-in hybrid bus in Sweden. Beginning in June 2016, the bus will be put to daily use in Sodertalje. One of its stops will have a wireless charging station where the bus will recharge for six to seven minutes before continuing on its route again. The charger is located under the road surface and the bus positions itself above it to charge inductively. About $1.3 million will come from the Swedish Energy Agency to fund the test project, which could save up to 90 percent of fuel costs. If expanded to a fleet of 2,000 buses, it could save up to 13 million gallons of fuel each year. Read more at Green Car Congress, and in the press release below. Sandia National Laboratories and Linde are teaming up to expand hydrogen fueling infrastructure. The two groups have signed an agreement to research and develop new hydrogen stations, as well as ways to make fuel cell vehicles more desirable for consumers. They are looking at ways to incorporate hydrogen into existing fuel stations where possible, and make sure that it is able to be done safely.