Will Masses embrace Electric Cars despite High Prices?

USA Today

The biggest automotive revolution since horseless carriages first rumbled along rutted roads is about to take place — and you'll have to strain to hear it.

That's because the first mainstream electric cars in nearly a century will be hitting the streets over the next couple of months, and their electric motors are as eerily quiet as they are tailpipe emission free.

Automakers such as Nissan and Chevrolet are touting the new vehicles in splashy ads, but already there are signs that wary mainstream consumers won't be quick to embrace the largely untested electric models. Automakers likely will have no trouble selling out their initial, limited production to electric enthusiasts and early adopters who have to have the latest thing, but mass acceptance that would lead to profitable production in big numbers remains a question.

The government and the auto industry are promoting electrictransportation as a way to cut U.S. dependence on foreign oil, ease the need for more U.S. oil drilling and cut carbon dioxide in the air. But the technology remains a colossal gamble, with billions invested by the industry and billions in subsidies from the government for research, factories and a direct-to-consumer rebate of $7,500 to partially offset the higher price of electrics.

Buyers still have to be convinced that being Earth-friendly is worth several trade-offs — beyond the cars' sticker prices, which can be double the cost of a similarly sized conventional car. Most prominently, most electric cars for now will have a range of about 100 miles before they need to be recharged. That process can take as few as 30 minutes with special chargers, but in most situations will take up to eight hours.

Even if you haven't paid attention to electric cars, you soon won't be able to escape hearing about them. Nissan has started its ad campaign for the fully electric Leaf. Chevrolet is about to crank up promotion for the Volt, a plug-in electric that also has an onboard generator powered by an auxiliary gas engine. Electric advocacy groups, such as Plug In America, plan their own public education campaigns.

President Obama has set a goal of a million plug-in electric vehicles on U.S. roads by 2015, though that rollout pales compared with the more than 11 million conventional vehicles that will be sold this year alone. Even with all the subsidies, promotion and consumer education efforts, only 0.6% of cars sold in the U.S. in 2020 will be fully electric, predicts auto researcher J.D. Power and Associates. And only 9.6% will be hybrids — with or without a plug-in recharging cord.

"Barring significant changes to public policy, including tax incentives and higher fuel-economy standards, we don't anticipate a mass migration to green vehicles in the coming decade," says John Humphrey, a senior vice president for J.D. Power.

Some reasons why:

•Lack of public charging stations. All-electric cars need to be plugged in to recharge and can't always be at home, but so far there aren't many public charging stations. Supported by federal grants from the Energy Department, two companies alone are installing more than 20,000 private and public charging stations in select metro areas in Oregon, Washington, California, New Mexico, Texas, Tennessee, Michigan, Florida and the District of Columbia.

•Home chargers require garage upgrades. An electric car such as the Leaf can be charged from a standard 110- or 120-volt home wall socket, but it will take at least 20 hours to get a full charge. So most electric car buyers will want to install 220- or 240-volt chargers to cut that to an overnight six to eight hours, which can cost $1,200 or more, though a federal subsidy is available. Many urban apartment dwellers or others without home garages may be hard-pressed to find a place to install a charging station that would make electric cars practical for them.

•Stable gas prices. Average prices for regular gasoline have been fairly stable and haven't exceeded $3 a gallon in two years, undercutting one of the key economic incentives for buying an electric car.

•Sticker shock. The first electric cars are going to go on sale at a time of economic malaise that has cut consumers' willingness to splurge on pricey new cars. Electric cars' high-tech, powerful electronics and compact lithium-ion batteries are expensive. At $41,000, the Chevrolet Volt is about the same size — and shares components with — the new Chevy Cruze gas-engine compact that starts at $16,995. Less-established makers may have to charge even more. Coda, a Santa Monica, Calif., start-up maker has priced its 120-mile-range, compact all-electric car at $44,900.

The prices can be partly offset by federal tax incentives for buying an electric car — for buyers whose income qualifies — which essentially knocks up to $7,500 off the cost. Some states, including California, also offer tax breaks for some buyers.

But that might not be enough to persuade average car buyers to pay more. Nearly two-thirds of U.S. consumers in an online survey by Nielsen said they don't want to pay more for an electric car than they would for a similar gasoline-powered vehicle.

•Unknowns. While gas-electric hybrids have been on the road for about a decade, all-electric cars and plug-ins use complex new hardware and software and much more powerful lithium-ion batteries. As with any new technology — or any new car model of any kind — long-term reliability, cost, performance and resale value can be projected but remain unknown. Consumers tend to be conservative — regardless of automaker promises or warranties — with such a long-term purchase, typically the second-biggest they make.

•Range anxiety. For all-electrics cars, the estimated range before it needs a recharge is an average that varies with weather extremes, traffic conditions and driving style. And while the typical U.S. commute — 40 miles or fewer — should be no problem with current battery technology, longer or unexpected trips can raise "will I get there and back" worry. That concern, and the unsuitability for longer travel, limits the market for an electric-only car that wouldn't meet all vehicle needs.

Buyers 'need convincing'

Given that backdrop, automotive executives and analysts are thrilled that early adopters have shown as much interest as they have in electric cars.

Nissan hit its target of 20,000 potential buyers who have plunked down a $99 deposit for its fully electric $32,780 Leaf, which starts deliveries next month. They are expected to claim all of the automaker's production during its first fiscal year. On a smaller scale, BMW found enough affluent, curious drivers to lease 450 Mini E electric cars in a test on both coasts that started last year.

The challenge will come after early-adopter demand is met. Even though General Motors and others rolled out primitive electric cars in the 1990s — remember The Jetsons-esque Saturn EV-1? — many people profess not to know much about the new generation. Only 58% of those surveyed by GfK Custom Research North America said they know about electric cars and potential benefits. Typical motorists may focus on electric vehicles' shortcomings instead.

"When I talk to people, neighbors and friends, they need a little more convincing," says Rich Steinberg, manager of electric vehicle operations for BMW North America. It "comes back to range anxiety: 'Why would I want a car that would go (only) 100 miles?' "

General Motors is pursuing those gun-shy consumers. Its Chevrolet Volt, also due to begin deliveries next month, differs from other electrics with its onboard generating capacity. The car is a plug-in that can run up to 50 miles on electric power alone with a full charge in its batteries. But unlike its pure electric rivals, Volt has an auxiliary gas engine to generate power for the electric motor so you can keep driving like a conventional car. That's different than today's hybrids, which have limited electric power-only capability and in which the gas engine drives the wheels in combination with the electric motor.

But automakers already are showing there is also a market for pure electrics. Tesla, a start-up based in California's Silicon Valley, has sold about 1,300 of its $109,000 roadsters since they went on sale in 2008. A four-door sedan — cheaper but still premium at about $50,000 — is planned in 2012.

Beyond Leaf and Volt, Ford Motor will have an electric version of its compact Transit Connect van, primarily for commercial use, on sale next month. It will have a range of 80 miles. In 2011, Ford plans an electric version of its Focus compact car.

Toyota has teamed with Tesla to develop and sell an electric version of Toyota's RAV4 crossover in the U.S. in 2012. Chrysler is planning an electric version of the Fiat 500 minicar. Mitsubishi expects to sell its small i-MiEV electric sedan next year.

And new companies and importers — including Fisker, Wheego and Detroit Electric — also have electric vehicles on the way.

The Obama administration has proposed to require that the fuel efficiency of new vehicles rise to an average of 47 to 62 miles per gallon by 2025. The proposal comes only a year after it set federal gas mileage rules that raise the 27.5 mpg average required now to a 35.5 mpg average by 2016.While progress to the 2016 standard can be achieved mostly with smaller, lighter vehicles and smaller, higher-tech engines, hitting the higher numbers would force automakers to turn to electricity.

In the past, automakers had to be dragged "kicking and screaming into building electric cars," says Roland Hwang, transportation program director for the Natural Resources Defense Council, an environmental advocacy group. "Now it's a matter of survival for them."

Baby steps

To get potential customers used to the idea of electric cars, Nissan has launched a 23-city tour to familiarize consumers with the Leaf and to offer test drives.

In Los Angeles, teacher Valarie Payne and lawyer Anton Labrentz were enthusiastic after a spin around the shopping plaza in tony Century City. They are the type of young, affluent urbanites Nissan is targeting with the car. "I was very impressed," says Payne, 28. "It's very cute."

But they say they don't know how they would install a charging unit in the garage of their townhouse. And Labrentz, 31, who drives a BMW, says, "I don't have room for a second car."

Web entrepreneur Ben Goldfarb, by contrast, has a Leaf on order and plans to use it for his 30-mile round-trip commute. He will keep his Lexus for long trips.

Worries? "Being an early adopter, you take some risks," says Goldfarb, 51.

"But the pushback is after (the early adopters), the next group of consumers," says Craig Giffi, U.S. auto practice leader for consultant Deloitte. "You are going to be in that gray zone for a number of years where ... cost (of the vehicle) and relatively short ranges are going to keep people at a distance."

Automakers aren't discouraged. Think, a Finnish electric car company that plans to assemble vehicles for the U.S. in Elkhart, Ind., says there is room for many competitors.

All are feeling their way, though, says Michael Lock, Think's marketing executive for the U.S., "This is the embryonic stage of this industry."

Stanford Students' Electric Car Breaks the Mold, not the Bank

Stanford University News

In a matter of weeks, Stanford graduate students have built an electric car they hope will make daily travel more environmentally friendly, efficient and fun. The stylish Weng is built for short-range, low-speed drives and may be the cool new way to get around neighborhoods and cities.

Meet the Weng, an open-air electric vehicle created by Stanford graduate students. Short for "Where everyone needs to go," the Weng is designed for local transportation with a style that gets people interacting with the community while they drive.

It's the antidote to the fully enclosed automobile. "I think it'll make neighborhoods feel a lot more friendly if everyone isn't enclosed in those steel cans," said Karen Shakespear, one of the students on the project.

Shakespear and her fellow grad students created the car to fulfill the master's thesis project requirement for the Joint Program in Design, a collaborative program between the departments of Mechanical Engineering and Art and Art History. The program's goal is to produce designers who can synthesize technology and aesthetics in the service of human needs.

John Stanfield and David Goligorsky came up with the idea to build a vehicle late in the Winter 2010 quarter. Fellow grad students Brian Ng, Shakespear, and Andrew Murphy joined Stanfield and Goligorsky to form the core team and develop the idea.  "Paul Karplus found out about the project in the last phase of the build and quickly became a critical part of the project's execution," Goligorsky said.

In just one academic quarter, the team conceived the design, drew up the blueprints, gathered materials, found discounted and donated parts, and assembled the vehicle. Plans are in the works to market the car in the near future.

"People are more accepting of owning electric vehicles these days," said Goligorsky. "The proverbial road is paved for electric vehicles and we're interested in how people change the nature of car ownership as they become more environmentally aware."
It's eco-friendly and turn heads

Goligorsky says most daily errands and commutes are less than 30 miles on roads with speed limits of only 35 miles per hour.

"Why use a 200-horsepower car to go to the grocery store on roads you can only go 35 miles per hour on anyway?" said Goligorsky.

The Weng would be an environmentally friendly alternative that the team thinks could become the cool way to go to the grocery store, get the kids from school and even go to work.

"We want people to buy into the culture and image of an eco-friendly neighborhood vehicle," said Shakespear. "It's not just about the technology or functionality, it's an image, too."

The car is completely open to the air. A frame made of tubular steel sits on four wheels. Two leather-covered seats on the wooden floor are each long enough to sit two people motorcycle style. Passengers hold onto bicycle-like handlebars; the driver's side has a steering joystick and throttle.

The car's mechanics are simple and transparent. Almost all the moving parts are visible and include the motors, which are in the car's rear wheels, the throttle, speed control, batteries and brakes. There are fewer parts to wear out than on a traditional car, and the Weng will be easier and less expensive to work on, maintain and update.

"You want to make it go faster or have more power, you just change out the back wheels," said Stanfield. "It's really easy – just two bolts and a couple wires and you're done."

The Weng is efficient, too. Like several hybrid cars on the market, it has regenerative braking that recharges the automotive batteries while slowing down the car. When braking, rather than the electric motors turning the wheels, the wheels turn the motors, creating an electric current to the rechargeable battery.
Zooming forward

This first version of the car takes four hours to charge and can go about 10 miles at 15 to 20 mph. But an optimized system with the best rechargeable batteries and appropriate motors available today could go 30 miles at 35 mph.
The basic design is customizable. Motor speed, frame color and size all could vary depending on the customer's needs. It also would be possible to add a convertible roof to shield passengers from the rain.

The team is working with second-year MBA student Graeme Waitzkin to look at the product from a business perspective. He thinks the car could be marketed as a shared or leased vehicle. It would cost from $5,000 to about $10,000; more than a golf cart, less than an electric automobile.

"This project makes electric vehicles cool and affordable so they're accessible to a wide range of people," said Waitzkin. "We want to hone in on a local transportation need that is poorly served by today's technologies."

The team got enthusiastic support from Sven Beiker, executive director of the Center for Automotive Research at Stanford, who was able to provide some funds and good advice.

"They really understood how to combine efficiency, practicality and appeal in a very nice design," said Beiker. "It's easy to use, fun to drive, looks gorgeous and it's efficient. This is what a modern vehicle needs to be."

The students will demonstrate the Weng and welcome feedback at a launch party on Friday, June 4, at 6 p.m. in the atrium of Stanford's Hasso Plattner Institute of Design, familiarly known as the d.school. The event is free and open to the public.

Electric Vehicle Owners Tout Benefits

Baltimore Sun

 

John Alder's 1991 Suzuki GSX 600 Katana motorcycle barely made a sound as it pulled out of his driveway Monday. That's because the Catonsville man converted it to run on an electric motorcycle battery.

But lack of noise is just one benefit, he says. Even better, there are fewer climate-warming emissions, and dependence on gasoline is eliminated. Alder charges the bike at home in his garage at night.

The front-yard demonstration was part of an effort by local electric-vehicle owners and environmentalists to draw attention to the positive impact of switching our car-loving nation to less-polluting options.

"I thought electric vehicles would be something we'd have by now," Alder said, explaining why he converted his bike, at a total cost of about $3,500, including the motorcycle. "It's just not happening."

Alder and others called on Congress to pass energy legislation that would promote the greener technology. The House of Representatives has passed a bill, but the effort has stalled in the Senate.

Environment Maryland, hosts of the Monday event, called on Maryland senators to urge the leadership to take a vote. The group also released a report called "Charging Ahead: Curbing Oil Consumption with Plug-In Cars" that outlines the potential benefits and how the switch would work.

The report says the current electric grid could fuel up to 73 percent of U.S. vehicles without building another power plant if the vehicles were charged at night or solar energy was used during the day.

Brad Heavner, state director of the environmental group, noted that many carmakers are beginning to roll out plug-in hybrids or fully electric cars, including the Nissan Leaf, Chevy Volt and Toyota Prius. Operating costs are likely to be about 5 cents a mile, the report says.

But more federal backing is needed to push change faster, Heavner said.

"The catastrophe of the BP oil spill in the Gulf of Mexico is making it more clear than ever that we need to work harder to reduce our dependence on oil," he said. "The U.S. Senate must pass a comprehensive global warming bill that caps emissions and invests in clean energy options, including electric vehicle technology."

He was backed by the Maryland League of Conservation Voters and the Sierra Club, as well as state Dels. James E. Malone Jr. and Steven J. DeBoy Sr., Baltimore County Democrats. The lawmakers plan to work with homeowners associations on legislation in the next year to allow residents without garages to use extension cords to plug in electric cars – one of the logistical issues associated with the plug-ins. Other issues include the relatively high price to buy the vehicles, lack of a network of charging stations and the limits of their batteries.

Robert Neighbour of Laurel, who in January traded in his Pontiac Fiero that he had converted to battery power for a manufacturer-produced all-electric Toyota RAV4, said such vehicles still have speed and distance limitations. He and Alder said they expect that to change as the technology advances.

"But I haven't bought a tank of gas since October of last year," Neighbour said.

Toyota Buying Tesla Stake for Electric Car Tie-Up

Bloomberg / Business Week

 

Toyota Motor Corp., the world’s largest automaker, is buying a $50 million stake in the Californian electric-car maker Tesla Motors Inc. as automakers compete to offer low-polluting models in the U.S.

Tesla will also buy a closed Toyota joint-venture factory in California to build its Model S and other vehicles, Tesla Chief Executive Officer Elon Musk said yesterday. The companies said they’ll cooperate in developing electric cars, parts, production systems and engineering support.

The deal may help Toyota, the world’s biggest carmaker, compete with Nissan Motor Co. and General Motors Co. in selling electric cars in the U.S., where regulations on greenhouse gas emissions and fuel efficiency are pushing them to offer advanced vehicles. It may also help the Toyota City, Japan-based company’s image, battered by recalls, by reviving the New United Motor Manufacturing Inc. plant in Fremont, California, known as NUMMI.

“This seems like a good deal for both parties, especially Toyota, from being able to avoid the political fallout from shutting NUMMI down to being able to offer a new electric vehicle with just a low initial investment cost,” said Jeremy Anwyl, Chief Executive Officer at auto industry researcher Edmunds.com in Santa Monica, California.

Joining Daimler

The size of Toyota’s stake in Tesla hasn’t been fixed ahead of a share sale by Tesla, Musk said in an interview. Daimler AG in May 2009 invested about $50 million in Tesla, which is supplying battery packs to the Stuttgart, Germany-based company for a test fleet of electric Smart minicars.

In July, Daimler sold a portion of its share of Tesla to the German automaker’s largest investor, Aabar Investments PJSC, reducing its stake to about 5 percent.

Daimler “welcomed” Tesla’s partnership with Toyota, which “likewise has the goal of advancing electric vehicles,” said Brigitte Bertram, a Daimler spokeswoman for the automaker in Stuttgart, Germany. The Toyota-Tesla linkup “doesn’t impede” Daimler’s cooperation with the California automaker.

Toyota fell 1.9 percent to 3,355 yen in Tokyo, while Nissan dropped 3.4 percent and Honda Motor Co., Japan’s second-largest carmaker, declined 2.5 percent.

The tie-up brings Toyota, the world’s biggest seller of hybrid autos, together with Tesla, the only company now selling U.S. highway-legal battery-powered cars. Electric-car technology has been supported by U.S. policy makers including President Barack Obama as a way to reduce the nation’s oil use and dependence on foreign energy sources.

Obama set a goal of getting 1 million plug-in hybrids and electric cars on U.S. roads by 2015.

Nissan, GM

Nissan is preparing to introduce its Leaf electric hatchback, powered by a lithium-ion battery pack, in Japan and the U.S. this year. Nissan Chief Executive Officer Carlos Ghosn has set a goal of leading sales of rechargeable vehicles, which he estimates may make up 10 percent of global auto demand by 2020, and is spending more than 500 billion yen ($5.5 billion) developing electric cars.

GM plans to introduce its Volt plug-in car in October. The car will initially be marketed to drivers in California, which requires large automakers to offer some vehicles that emit little or no tailpipe pollution.

Toyota intends to offer a short-range, “urban commuter” electric car in the U.S. in 2012 and begin retail sales of a plug-in Prius hybrid the same year.

Toyota, which will continue to develop its own electric vehicle, said Tesla’s long-distance models give the Japanese automaker more options. Toyota said hybrids should remain a more practical option for most customers until electric cars become more popular.

Share Sale

Palo Alto, California-based Tesla has 2,000 reservations for the Model S sedan and intends to begin “volume” production of the car in 2012, with a projected annual output of as much as 20,000 a year. The company has delivered about 1,000 of its $109,000 Roadster electric sports cars, while losing more than $230 million.

Tesla hasn’t posted a profit in the six years since it was founded. The company plans to use proceeds from an initial share sale and a $465 million government loan to help produce the Model S, an electric car that is to cost less than $50,000 after a federal tax credit.

Fund Raising

Tesla aims to raise about $100 million from its share sale and has said it may use proceeds to pay for factories and equipment estimated to cost as much as $125 million this year, and for acquisitions.

“I’ve felt an infinite possibility about Tesla’s technology,” said Akio Toyoda, chief executive officer of Toyota, founded by his grandfather. “By partnering with Tesla, my hope is that all Toyota employees will recall that ‘venture business’ spirit.”

The company is backed by investors including Mountain View, California-based Google Inc.’s co-founders Larry Page and Sergey Brin, and the government of Abu Dhabi. Daimler, the world’s second-biggest maker of luxury vehicles, invested last May. Tesla said Musk told Daimler about the Toyota partnership on May 19.

The revival of NUMMI, for 25 years a joint venture between Toyota and the former General Motors Co., will create 1,000 jobs, California Governor Arnold Schwarzenegger said. The plant closed in April.

Obama Ramps up Electric Car Battery Grants

USA Today

 

 

As the Obama administration gears up for Energy legislation, the focus has been on doling out research money to try to keep America in the fight to produce the next generation of batteries that will power electric cars.

For instance, Vice President Joseph Biden visited a company called UQM Technologies near Boulder, Colo., Friday that won a $45 million grant under the stimulus bill to increase production of propulsion systems for electric cars. UQM works with Coda Automotive, a Santa Monica, Calif., company that hopes to sell electric cars next year. That's the Coda car in the photo above.

The administration just doled out another $106 for energy research projects including a bunch for electric car batteries. After all the talk about how electric vehicles will be powered by lithium-ion batteries, what struck Drive On was the wide array of battery chemistry that is being researched. They include:

    * Lithium-sulfer. Sion Power Co. in Tucson was given a $5 million grant to see if it can develop a car battery that can go 300 miles between charges.

    * Zinc flow air. A slurry form of zinc would be stored in a tank and transmitted through a tube to charge and discharge a battery. ReVolt Technology of Portland, Ore., received a $5 million grant.

    * Lithium-air. Another $5 million to PolyPlus Battery of Berkeley, Calif., to develop an automotive battery that has the energy density of gasoline.

    * Magnesium-ion. Pellion Technologies of Menlo Park, Calif., would develop a cheap battery using this technology with its $3.2 million grant.

    * Advanced lithium-ion. The next generation of the lithium-ion battery that would be low-cost and ultra-high in energy density through this $4.3 million going to Applied Materials in Santa Clara, Calif.

    * Solid state lithium. Planar Energy Devices of Orlando will get $4 million to explore an ultra-high density, long-cycle battery that uses inorganic materials and solid-state electrolytes.

GM Shows a Bigger-than-Volt Concept in Beijing

USA Today

The Chevy Volt may be getting bigger.

General Motors is showing a five-passenger crossover version of the electric car at Auto China in Beijing this week. The Volt MPV5 concept is about 7 inches longer than the production Volt and about 7 inches taller.

The concept is designed to show that the battery/electric vehicle can be used across a wide family of vehicles, much like the Cadillac Converj concept did at the Detroit auto show earlier this year.

"The Volt MPV5 concept takes the efficient design of the Chevrolet Volt and adapts it to the family vehicle crossover segment. It's immediately recognizable as a true member of the Chevrolet family," said Bob Boniface, director of GM North America Crossover Exterior Design.

The car is technically just a concept at this point, but it appears GM is putting some serious thought into this concept: A 16-kWh T-shaped lithium-ion battery pack powers the electric drive unit. The Voltec propulsion system, which utilizes the same foundation as the Volt, gives the car gas and tailpipe emissions-free electric driving.

The flexibility of the Voltec system enables the Volt MPV5 concept to meet full vehicle speed and acceleration requirements while driving the vehicle and its five occupants up to 32 miles on pure electric propulsion. This is double what the average urban commuter in China -- where the car is being shown -- travels each day, but less than the 40 miles the upcoming Volt will get.

When the battery is depleted, a 1.4-liter engine generator sustains the battery charge and provides up to 300 miles of electric car battery propulsion.

Want Electric Cars en Masse? Rethink Warranties

Business Week

Separating out ownership and warranties of the batteries may be the key to making electric cars affordable 

For an electric vehicle owner and a utility, a dream scenario for charging vehicles at the lowest possible cost might go something like this: EV batteries draw juice from the grid when demand and electricity rates are low and feed energy back into the grid when demand peaks. That give-and-take could deliver lower electricity bills for consumers and a more stable grid for the utility.

The third factor in this equation, the carmaker, could struggle in this scenario unless the current structure of vehicle ownership and warranties is changed, said Joby Lafky, senior director of business development and partnerships for smart charging startup GridPoint, at a seminar on vehicle-to-grid technology hosted by Agrion on Apr. 7 in Palo Alto, Calif.

The EV industry needs to consider alternative ownership schemes for the battery and to "reexamine what it means to warranty a battery pack," said Lafky. Automakers today typically offer "an odometer-based warranty," he said. If electric vehicle batteries—the most expensive part of the car—are used to provide grid services, the battery will deplete due to all the charging and discharging, not just mileage. So if the battery gets used up faster, and it's within the warranty period, the automaker could get stuck paying to replace it.

Short Useful Life

While the bulk of an electric vehicle may have just as much longevity and durability as conventional models, today's batteries are widely expected to degrade down to 80% of their original storage capacity (and thus reach the end of their useful life in electric cars) after only about eight years on the road. Outside of the vehicle, batteries can hold value long after those eight years.

By offering the battery under a separate leasing agreement, an automaker could have car buyers pay for only the small percentage of the value they're getting (the car minus the expensive battery)—as long as the automaker has a mechanism in place to reclaim the battery after its useful life in the vehicle and reap its "residual value" in secondary markets. However, rolling the battery pack into one contract with the vehicle—rather than covering it under a separate warranty agreement or potentially leasing it separately from the car—could deliver higher warranty costs for the automaker and a higher sticker price for consumers.

Alec Brooks, a renewable energy engineer at Google who previously directed vehicle technology for Tesla Motors, said that ancillary services (such as switching directions between charging and discharging) won't necessarily take a significantly greater toll on battery life than the wear and tear of simply driving the car.

Potential Value Streams

Even so, Lafky isn't the only one who sees shifting ownership and battery warranties as a key to paving the way to more affordable, mainstream electric vehicles that help—rather than hurt—the power grid.

According to Tom Gage, CEO of AC Propulsion, the "most fertile area for development in this whole space is the battery." Regardless of the size, shape, or chemistry that upcoming generations of batteries take on, however, he noted three potential value streams for the device: transportation; grid services while it's in the car; and secondary markets (after useful life in the vehicle). Part of the challenge, said Gage, is to strike the right balance among these three uses in a way that maximizes "extraction of these value streams over the life of the car."

Brett Williams, a postdoctoral researcher at the University of California's Berkeley Transportation Sustainability Research Center, added that the introduction of a viable "novel ownership structure," which could be "battery leasing in a simple form," could represent the tipping point for electric vehicles in the mass market.

Nissan's Strategy

Leasing the battery pack separately from the vehicle is a route that Nissan once considered for its upcoming LEAF electric sedan (Mark Perry, who heads Nissan's product planning and strategy for North America, will be speaking on our New Networked Car panel at Green:Net. Offering the battery pack under a separate financing agreement could allow an automaker such as Nissan to take a significant chunk out of the sticker price of an electric model, potentially helping it compete with more affordable conventional vehicles.In February the automaker announced it would take the more conservative path of offering the car and battery under a "single transaction."

Electric vehicle infrastructure startup Better Place, meanwhile, plans to buy hundreds of millions of dollars' worth of batteries to "swap" into vehicles owned by subscribers, who in theory will pay Better Place for mileage plans the way cell-phone users pay for minutes.

Hypothetically, at least, if all the players and industries can come together, novel alternatives to consumer ownership of car batteries "would really accelerate everything," said Williams. "At a very minimum, you've got to have an ownership structure that lets you see that value throughout the whole product."

Electric Car Demand Means Polypore's Battery Parts Outpace Wind and Solar‏

Bloomberg

Polypore International Inc., which makes one of the key components of electric-car batteries, is climbing faster than most alternative energy stocks this year as investors bet on a global shift to low-polluting automobiles.

The company based in Charlotte, North Carolina, is about to finish the first quarter with a 46 percent increase to $17.34 a share, the top gainer on the WilderHill New Energy Global Innovation index. The benchmark of 86 clean-energy stocks sank 10.2 percent in the period, pulled lower by Vestas Wind Systems A/S, the biggest wind-turbine maker, and German solar developer Solarworld AG.

“Polypore is positioned to take a solid chunk of the growth in electric vehicles,” said Bryan Drab, an analyst at William Blair & Co. in Chicago who has a “outperform” rating on the stock. “They supply to most, if not all, the major makers of lithium car batteries that are going into electric cars.”

The company is the world’s biggest producer of porous membranes used in traditional lead-acid batteries for cars. It also makes the chemical separators for more potent lithium ATV batteries used in electric vehicles made by General Motors Co., Toyota Motor Corp. and Volkswagen AG.

The separators keep apart positive and negative charged electrodes while allowing the ions powering the battery to move within the unit.

This month, the company forecast electric vehicles will make up 3 percent of global car sales by 2012, and 6 percent by 2015, compared with about 2 percent now.

Investment Plan

Polypore plans to spend $102 million over two years to double production of separators for lithium cells. It competes with Asahi Kasei Corp. and TonenGeneral Sekiyu K.K., the Japanese unit of Exxon Mobil Corp. TonenGeneral and Asahi Kasei shares both have risen 10 percent since the beginning of March. Polypore gained 14.8 percent this month.

The three together provide 90 percent of the market for lithium separators, said Polypore Chief Financial Officer Lynn Amos. Polypore is also increasing output in Korea for cell-phone sized separators.

Founded in 1994, Polypore sold its shares at $19 in June 2007, rose as high as $29.26 in August 2008, and dropped to as low as $2.38 in March 2009 during the credit crisis and recession.

Another drag on Polypore’s shares was ruling from the U.S. Federal Trade Commission recommending the company divest most of its Microporous unit, the only maker of rubber-based membranes for lead-acid batteries. Polypore is appealing the ruling.

“The FTC complaint came out in September 2008, and we were concerned we’d be forced to sell at a loss during the banking meltdown,” Amos said in a March 26 interview. “At this point, we could probably make some money if we had to sell.”

Morgan Stanley increased its stake in Polypore to 1.48 million shares as of Dec. 31, or 3.3 percent of the company’s outstanding stock, according to data compiled by Bloomberg. Morgan Stanley funds control 2 percent of the company. The bank holds the rest for Van Kampen Investments Inc., the data show.

Erica Platt, a Morgan Stanley spokeswoman, declined to comment on the holdings.

Polypore also benefited from the extension of a contract with one of its largest customers, Drab said.

On Jan. 19, Exide Technologies renewed a contract that expired last year. Polypore plants have supplied the Milton, Georgia-based producer of batteries for more than 40 years, and the agreement extends the contract for three years.

Stimulus Funding Spurs Advanced Battery R&D for Hybrid Electric Vehicles

Examiner Chicago

In order to accelerate the R&D, manufacturing and deployment of hybrid electric vehicles, batteries, and components in the United States and create tens of thousands of new jobs, President Barack Obama announced last August- 48 advanced battery and electric drive projects that will receive $2.4 billion in competitive Department of Energy (DOE) funding through the Recovery Act, which will be matched with another $2.4 billion in cost share from the award winners. This stimulus funding will facilitate the country in achieving President Obama’s goal of putting one million (grid) plug-in hybrid vehicles on the road by 2015 in order to lessen greenhouse gas emissions and smog effects.

The primary stimulus funding grant categories are as follows:

1. $1.5 billion for U.S.-based manufacturers to produce batteries and their components and to expand battery recycling capacity

 

2. $500 million for U.S.-based manufacturers to produce electric drive components for vehicles, including electric motors, power electronics, and other drive train components
 

3. $400 million to purchase thousands of plug-in hybrid and all-electric vehicles for test demonstrations; to deploy them and evaluate their performance; to install electric battery charger infrastructure; and to provide education and workforce training to support the transition to advanced electric transportation systems.

The state of Michigan, home to the Motor City, was the big winner, as they received $1 billion in grants to companies and universities- the most of any state. Two companies, A123 and Johnson Controls (which also has a facility in the Phoenix, AZ area) will receive a total of approximately $550 million to establish a manufacturing base in the state for advanced batteries, and two others, Compact Power and Dow Kokam, will receive a total of over $300 million for manufacturing battery cells and materials.

The U.S. government is now spreading the wealth of R&D dollars, as opposed to primarily funding only national labs, universities and domestic automakers. Of course, the DOE never had anywhere near this amount of funding previously to allocate, since the Stimulus spurred the nation’s largest single investment in hybrid electric vehicle technology ever. Moreover, the past two Obama Administration fiscal year budgets significantly reduced funding levels for hydrogen fuel cell alternatives set by the Bush Administration, while supporting increases for advanced batteries instead.

Lithium ion batteries are receiving the majority of the stimulus funding emphasis with respect to battery options for hybrid electric vehicles, since they are presumed to be the top candidate but are not ready for prime time. These types of batteries are rapidly penetrating into laptop and cell-phone markets because of their unique electrical characteristics, high energy-efficiency, high temperature performance, and low self-discharge. What’s more, components of lithium ion batteries can also be recycled. These features are also beneficial for hybrid electric vehicle applications. However, to make them commercially viable for electric autos, significant R&D is necessary, focused on calendar and cycle life, cell and battery safety, abuse tolerance under harsh conditions, and acceptable cost for consumers.

EnerDel, an electric car battery manufacturer with three Central Indiana plants, was awarded a $118.5 million stimulus grant yesterday to develop lithium ion batteries for hybrid electric cars. The grant will allow EnerDel to buy equipment to expand its production from 1,200 batteries a year to 60,000 annually and is expected to generate 1,400 green jobs. As part of the project, 100 electric cars will likely be on Indiana roads by the beginning of next year and a thousand by the middle of 2012.

In opposition to this momentum for hybrid electric vehicles, T. Boone Pickens has been ramping up his campaign supporting the transition of the nation’s auto fleet to readily abundant domestic natural gas. He helped formulate the Natural Gas Act, which is still being considered in Congress, along with cap-and-trade and other alternative energy legislation that has been delayed by the health care debate after many months.

Electric Car Race Is a Bumpy Ride
Story from AsiaOne Motoring

FRITZ Henderson, the new chief executive of General Motors (GM), says his company has to reinvent itself very quickly. US President Barack Obama exhorts American car makers to regain the lead and make fuel-efficient vehicles. Washington provides US$2.4 billion to develop advanced electric-powered vehicles and a better battery. And Michigan gives tax incentives of half a billion dollars, including US$200 million for advanced batteries, to invigorate the auto capital.

Will all this spark an auto revolution in the United States? For GM, the situation has to be bittersweet, after stopping production of its famous electric sports car EV1 in 2000. It is now betting on its hybrid Chevy Volt, due in showrooms late next year, with fuel economy matching 100 miles per gallon (42 kilometre per litre) of gasoline to refurbish its image.

Dumping EV1, which was developed from the ground up, caused much environmental ire and yielded the film Who Killed the Electric Car? It coincided with California's thrust for zero emission-vehicles mandate, which sought to have 2 per cent of emission-free vehicles by 1998 and 10 per cent by 2003, a law that was weakened subsequently. Chrysler, Ford, Honda, Toyota and Nissan all produced vehicles for lease.

In fact, the electric vehicle (EV) is a 19th-century Scottish invention. France and Britain promoted EVs in the late 1800s. Americans followed, and as the nation prospered, steam, electric and gasoline cars appeared. But electric starters, need for superior range as road networks developed and oil discovery in Texas combined to push EVs off the road.

Subsequent attempts to revive electric vehicles never really caught on. GM and others tinkered with electric car after the big increase in oil prices in the 1970s. In 1975, the United States Postal Service bought 350 electric delivery Jeeps from American Motor Company for testing. They had a top speed of 50 miles per hour (mph) and a top range of 40 miles at a speed of 40mph. Recharging took 10 hours. But in dusting off a century-old idea, Americans will find dozens of start-ups as well as old rivals on the same electric track.

Will the Volt vault GM back to its pre-eminence? GM has committed a billion dollars to develop the plug-in hybrid, charged externally, in the hope of beating the industry's best-selling hybrid, Toyota's Prius. The Volt seats four and can go 40 miles on a single charge from a home outlet with a gasoline engine to extend range. GM expects to sell 60,000 cars annually from the second year.

Similarly, Ford will introduce an all-electric van next year and a car with a 100-mile range on single charge in 2011 followed by a plug-in hybrid with fuel efficiency equivalent to 170 miles per gallon in 2012. Chrysler is also working on an electric car.

Impressive, yet it is hardly going to be easy for American car firms. They will find dozens of start-ups as well as old rivals on the same electric track. Every major manufacturer - Toyota, Audi, Hyundai, Volkswagen, BMW, Nissan, Mitsubishi, Daimler and Vauxhaull - is developing electric or plug-in hybrids. And all are due in showrooms within three years.

Meanwhile, Mitsubishi's president Osamu Masuko goes to work in the i-MiEV prototype. The company intends to market the car to Japanese corporations in July.

In fact, Renault and Nissan Motor, the French-Japanese alliance, is reportedly racing to enter the EV mass market soon. Renault wants to sell 20,000 to 40,000 electric cars in 2011 and has bagged a deal from Ireland aiming at a 10 per cent share of its market for electric cars by 2020.

And vying with them for driver attention will be numerous start-ups, such as Think of Norway and Tesla of the US. Dutch firm Detroit Electric has signed up with Proton of Malaysia to make electric cars for sale by early next year. Tesla, a niche player, has begun taking orders for its Model S five-seat sedan, set to hit highways in 2011. The cars' range varies between 160 and 300 miles (257 and 482km) and lithium-ion batteries could be recharged in just 45 minutes. Tesla is seeking a US$350 million loan from Washington to build an assembly plant in California.

Think of Norway is surveying a site to build a US plant for 16,000 cars annually. Its City car has a range of 112 miles. Tesla already assembles a two-seat Roadster, costing about US$100,000. Fisker Karma of California has plans to sell its plug-in for about US$88,000. But more serious competition for the mass market is coming from China, which aims to be a leader in hybrid vehicles. Several manufacturers are working on them. BYD, a battery-maker, and a car manufacturer since 2005, has begun selling F3DM (duel-mode) plug-in cars and wants to sell all-electric e6 to consumers later this year. It counts Warren Buffett among its investors. China is targeting 500,000 hybrid or electric cars by the end of 2011, almost twice as many as in the US.

President Obama wants a million hybrids on roads by 2015.

What makes this rush by so many possible? Electric vehicles short cut the complex universe that is the ICE car. The electric car has no engine, no gas tank and no transmission and produces no smoke. It needs no oil change or tune-up.

Yet, electric-powered vehicles have considerable hurdles to cross, associated with range and with battery size, charge speed and battery life. They have indirect environmental implications since electricity for the battery will come from fossil fuels.

The cars will be more expensive than their gasoline-fed peers. The Volt will cost somewhere between US$30,000 and US$40,000 apiece, about 50 per cent more than the Prius, in the US. The US auto task force, entrusted to beef up the car industry, reckons electric vehicles may be too expensive to be commercially successful in the short term, though it believes the Volt technology holds promise.

Boston Consulting says the price of gasoline, government help to industry and cash incentives to the consumer - all will be required to push electric vehicles. The battery will cost about US$14,000 in 2020 for an electric car with a range of 80 miles, even if costs come down.

So doubts will linger whether EVs will become practical and functional for the mass market.

Technology and innovative ways will hopefully overcome the daunting challenges.

For instance, battery and range are closely linked and more batteries means bigger range and higher cost.

So Toyota's plug-in version will have a 12-mile range on single charge and will cost a lot less than the Volt. Charging infrastructure is beginning to appear in key markets.

Better Place, a US-based company, is planning a battery leasing network using renewable energy for recharging batteries. It will own the batteries and charge per mile.

Its first projects will come up in Israel in 2011 followed by Denmark and several other countries.

And China's BYD claims it has already solved the problems of cost and safety associated with lithium-ion batteries. It has the advantage of cheap labour to boot.

Yet Boston Consulting's "most likely scenario" suggests that conventional hybrid cars will take about 28 per cent of cars sold globally in 2020, with 11 million hybrids and three million electric cars. It sees oil prices at US$150 and strict enforcement of existing CO2 regulations as a pre-requisite.

Consultancy AT Kearney sees hybrid and electric vehicles taking half the market share in 2020, provided oil price rises to US$200.

Still, companies seem to be undaunted. Renault foresees 10 per cent of all global car sales to be EVs in five years even on current battery technology. Mitsubishi is reportedly planning to double its electric car output to 20,000 by 2011, raising to 50,000 cars by the middle of the decade. Tesla says it has received more than 500 orders just in a week for its Model S despite its hefty price tag of US$57,400. Tesla insists that tax incentives, low maintenance and the lack of fuelling costs will make up for the steep price tag.

A Volt will cost two cents per mile to operate, one-sixth of what a conventional car. Then there is the subsidy. The US is offering up to US$7,500 tax rebate to consumers and China is throwing in US$8,800 for taxis and government departments. Britain is giving £2,000 (S$4,450) grant to electric car buyers.

Fresh impetus will come when nations agree on the second climate treaty later this year. An accord will align the interests of power generators and car companies as well as governments for intense reductions in CO2 emissions.

If it's not yet another false dawn, it certainly will be game-changing.

Detroit Electric Returns To Life In 2010
As Posted to The Motor Report

Remember Detroit Electric? Of course you don’t; the brand had all but disappeared by the early 1930s. Before the end of this decade however, the just-resuscitated Detroit Electric plans to have its cars on the road once again.

After being reformed in 2007, Detroit Electric hopes to have its first modern offering available next year. A compact four-door based on the Proton Persona will surface first, to be joined by a hatchback version later on.

As the badge suggests, the new Detroit Electric will be - you guessed it - an all-electric affair. The expected range for Detroit Electric’s EV is 180 kilomteres (110 miles), with a price between USD $24,000 and $26,000 (AUD $34,700 to 37,700).

An extended-range version capable of up to 320 kilometres (200 miles) on a single charge will add USD$ 4,000 to $5,000 (AUD $5,780 to $7,230) to the price.

The car will use a lithium-polymer battery pack supplied by a Korean manufacturer to deliver power to an electric motor developed by Detroit Electric’s Netherlands-based engineering team.

The company is planning to launch its first vehicle in China, Europe and the US as an everyday vehicle which will offer comparable performance and practicality to a regular petrol-powered vehicle according to Albert Lam, CEO of Detroit Electric and former CEO of Lotus Engineering.

“In 2007, we adopted the Detroit Electric name and revived it because it brings us in line with the vision and essence of electric driving they had,” Mr Lam said.

“We want to produce an affordable, practical pure electric car.”

Instead of developing its own cars from the ground-up, Detroit Electric plans to introduce a series of joint ventures to build its vehicles. Proton’s existing range will be used to begin with, teamed with Detroit Electric’s own batteries and motor.

Mr Lam pointed to their proposed business model as the way forward for automotive manufacturing. Shorter development times and lower overhead costs being the key to building vehicles that are affordable and able to move with customer demands.

1917 Detroit Electric Coup

Production targets are set at 40,000 cars per year for 2010, when the car will be introduced in Europe and China. Later that year the US market will be added and production numbers raised accordingly.

Studies show that the average car trip in the US is less than 65 kilometres (40 miles) per day, a driving range easily accommodated by the Detroit Electric vehicle.

North American President of Detroit Electric, Marianne McInerney, claims that ”this car has been designed to appeal to the broadest audience possible”.

Dutch And Malaysian Companies To Produce Zero-Emission Autos With Detroit Electric Tech
As Originally Posted to the Denver Post

PUTRAJAYA, Malaysia — Malaysia's national carmaker, Proton, and a Dutch-based company signed a deal Monday to make zero-emission electric cars that they said would be more powerful than any existing model.

Proton and Detroit Electric, a startup that owns the technology, signed the collaboration agreement in the presence of Malaysian Prime Minister Abdullah Ahmad Badawi (at center in photo) to produce the sedans, initially targeted for Europe and the U.S.

"We have the audacity to bring to the people an affordable, everyday car . . . with zero emission," Detroit Electric chief executive Albert Lam said in a speech.

The four-door vehicle will roll out of Proton's factory by early next year, Lam told The Associated Press in an interview earlier.

The aim is to produce 40,000 units in the first year, ramping up to 270,000 by 2013, he said. The cars will be priced between $23,000 and $33,000, depending on the model and taxation.

General Motors Corp., Toyota Motor Corp., Ford Motor Co., PSA Peugeot-Citroen, Mitsubishi Motors Corp. and Tesla Motors are all seeking to develop electric cars amid rising consumer interest in green technologies.