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InTransition Magazine : Transportation Planning, Practice & Progress

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Trading the Pump for the Plug

With Their Affordability and Easier Infrastructure Requirements,
Plug-In Electrics Are Poised to Take Charge of Alternative Energy Car Market

By Brian Donahue

A century after the world parked the electric car in favor of the internal combustion engine, tens of thousands of drivers are once again plugging in, charging up and zooming off.

The auto industry turned a corner in 2010 in the global drive to electrify vehicles. In December, Nissan began rolling out its all-electric Leaf, with General Motors plug-in hybrid Chevrolet Volt following close behind. Their arrival in showrooms follows years of low-volume experimentation with rechargeable battery-powered cars, marking the first time that major automakers are offering competitive electric vehicles that have all the features and functions drivers have come to expect.

Leaf

Nissan

A Nissan Leaf rolls off the assembly line.

And this is just the beginning—nearly every major manufacturer has plans to introduce vehicles with electric motors in the coming years. At the same time, thousands of charging stations are being deployed across the U.S. to keep the cars running (see related story). “We are at the cusp of a new era,” said Dan Sperling, director of the Institute of Transportation Studies at the University of California, Davis, noting that the auto industry is responding to ever-intensifying greenhouse gas emission standards and global pressures to reduce dependency on oil use. Sperling believes gasoline vehicles, while becoming much more fuel-efficient, will slowly give way to those powered by electricity, with biofuels and hydrogen also in the mix.

Industry experts anticipate a bright future for the electric car in both pure and hybrid forms. Auto­makers are betting on it, steering away from other alternative sources that have either been abandoned or remain years away from viability.

“I think electric transport has the best near-term promise among the various alternatives,” said Chelsea Sexton, an electric car advocate and consultant. “For one thing, it’s flexible—basically any vehicle can be electrified to some degree depending on the desired efficiency, cost and performance parameters. Some vehicles will be pure EVs [electric vehicles], others hybrids, and many in the middle, but they’re all electrified. They benefit from the fact that electricity is ubiquitous. So, while there’s some infrastructure to be installed, it’s basically a ‘last mile’ issue, and negligible in cost compared to some of the other alternative fuels in terms of infrastructure requirements.”
Biofuels, once seen as the best future alternative to gasoline, may not see large-scale production in the next decade.

“The main biofuel in the U.S. today is corn-based ethanol, which is inefficient, energy-intensive, and potentially displaces food crops,” said John Voelcker, editor of GreenCarReports.com. “Ethanol use in the states is due not to cost advantages or demand, but to a 2007 Congressional mandate that requires increasing percentages of ethanol to be used in transportation from now through 2025.”

Ford is among the industry giants investing heavily in electric, with plans to introduce no fewer than five such vehicles ranging from an all-electric commercial van to the Lincoln MKZ luxury hybrid. Having electrified its Global C platform, which produces 2.5 million cars annually, Ford is able to build electric and gasoline products on the same line. Its platform strategy finds the Focus, for example, using a variety of powertrains including diesel in Europe and gasoline in the U.S., where in late 2011 it will launch an all-electric version. This approach, according to Mike Tinskey, Ford’s global manager of electric vehicle infrastructure, offers flexibility to meet the changing marketplace demand.

“We see the volume leaders in the near term as HEVs [hybrid electric vehicles] and PHEVs [plug-in hybrids], with pure electric vehicles highly dependent on battery technology breakthroughs and crude prices,” Tinskey said.

Industry Comes Full Circle

The arrival of mass-produced electric vehicles represents both a milestone and a return to the earliest days of the automobile. In 1900, about a third of the world’s cars were powered by electricity, the rest by steam and gasoline. The gasoline autos at first were the least desirable because of the need for a hand-crank start, but by 1912, an electric self-starter had been invented, making them more practical. Their mass production by companies like Ford helped render the electric car moot by the 1930s.

Environmental concerns and a push for zero-emission vehicles in the 1990s brought the electric car back, but with limited success due to challenges in battery technology. There was the EV1, an all-electric two-seater that GM took off the market in 2003 and destroyed, citing safety reasons. Toyota scrapped its electric version of the RAV4 that same year. The Roadster, an electric sports car made by California-based Tesla Motors since 2008, has helped spark renewed interest in the technology, though its sales have been limited by a price tag of more than $100,000.
Until the Volt and the Leaf, no electric car has done much to convince the general public that it is a viable, practical alternative.

“These cars have four doors, four seats, they are fine at highway speeds, and they have all the usual bits and pieces—stereos and air-conditioning and electric windows, and what not. They are real cars. They’re not golf carts, which is what people tend to think of electric cars as,” Voelcker said.

Competition Leads to Variety, Technological Development

While they share the spotlight as the first to bring plug-in vehicles to mass market, Nissan and Chevy have taken two very different approaches. The Leaf runs purely on battery power, with a range of 100 miles per charge, while the Volt offers extended-range capability, going 40 miles on a charge before its gasoline engine switches on to add another 310 miles.

Assembly_line

General Motors

GM plans to roll out 10,000 Chevrolet Volts in selected states

early this year followed by another 60,000 in 2012.

“I’m actually most encouraged by the fact that they’re different and that automakers are trying a couple different approaches, both battery-electric like the Nissan and range-extended electric like the Volt,” Voelcker said. “They might be bought by slightly different people whose needs are different, so I think it’s good to have a diversity of approaches.”

Both carmakers are starting slowly. Nissan allotted 20,000 Leafs for the 2011 model year, selling them in December in California, Oregon, Washington, Arizona and Tennessee. In January, sales will begin in Texas and Hawaii, and the car will be available nationwide by the end of 2011. The Volt’s early production will be limited to 10,000, sold initially in California, Connecticut, Michigan, New Jersey, New York, Texas and Washington D.C., but early demand has GM planning to make 60,000 available in 2012.

Passing along the steep cost of their lithium-ion battery packs, the cars arrive with some sticker shock. The Leaf is more affordable, at $32,780, while the Volt sells for $41,000. But buyers of both receive a $7,500 federal income tax credit, and several states offer added incentives ranging from $500 to $6,000. The two manufacturers are offering similar lease packages: the Leaf for $1,999 at signing and $349 per month; the Volt for $2,500 down and $350 per month.

Car owners may also have to pay for home-charging equipment. The Volt can be recharged on standard 120-volt current, though it will take six to 10 hours, or owners can pay $500 plus installation for a special 240-volt home charging unit that can juice it up in about four hours. The Leaf requires the 240-volt charger; purchase and installation typically runs approximately $2,000, though federal tax credits were available at least initially to offset half the cost.

Owners can expect to pay electric costs of about $1 per charge for a plug-in hybrid, or $2 to $4 for pure electrics. If they shell out $40 a month, that represents savings over the equivalent in gasoline, which could figure to be about $100 a month for a compact car that travels 12,000 miles a year at 30 miles a gallon.

Ford_Transit

Ford Motor Company

Ford designed the Transit Connect Electric van with

small-business owners in mind. It will have a targeted range

of up to 80 miles per full charge, and will be rechargeable

using either 240-volt or standard 120-volt outlets.

Over the next few years, numerous other carmakers will get in the game. Ford will start with two pure-battery vehicles—the Focus Electric passenger car and the Transit Connect Electric small commercial van. Its plans for 2012 call for two third-generation lithium-ion battery hybrids and a plug-in hybrid. This year, Fisker will unveil its $87,900 Karma luxury sports sedan, a plug-in hybrid with an optional solar-paneled roof to charge the battery. Meanwhile, Daimler is testing a Smart Fortwo ED microcar, now leasing for $599 a month, with mass production planned for 2012. Toyota will release its Prius Plug-In Hybrid in 2012, and BMW and Volkswagen plan to unveil electric cars in 2013.

Electric cars’ affordability going forward will hinge largely on advances in battery technology. The Leaf’s 24 kilowatt-hour battery pack, for example, costs $9,000 to produce, while the Volt uses a 16/kWh pack that is made for slightly less.

With federal aid, manufacturers are racing to come up with a more cost-efficient battery that is lighter and can store more energy. Some American Recovery and Reinvestment Act funding has been aimed at reducing such costs, with more than $2 billion invested in advanced battery and electric drive component manufacturing. Some 20 battery factories will be up and running by 2013 with federal funding aimed at cutting battery costs in half. Startups like Envia and FastCAP are also receiving federal funds to design better energy storage devices for cars. Meanwhile, a separate federal program is providing over $2.4 billion in loans to Nissan, Tesla and Fisker to support three of the world’s first electric car factories in Tennessee, California and Delaware, respectively.

Mass Adoption Will Take Time

Others have taken a more conservative outlook on the electric car market, believing it will continue to grow, though at a limited pace. J.D. Power and Associates predicts the electric and plug-in hybrid market to grow from 24,000 in 2010 to 500,000 in 2015. The Boston Consulting Group (BCG), a global management consulting firm and advisor on business strategy, goes a bit further, forecasting about 14 million electric and hybrid cars on the road in 2020, making up about 26 percent of new cars sold.

BCG predicts that, barring a major breakthrough in battery technology, the pure electric car is unlikely to spark widespread attention in the next decade.

“For years, people have been saying that one of the keys to reducing our dependency on fossil fuels is the electrification of the vehicle fleet. The reality is, electric-car batteries are both too expensive and too technologically limited for this to happen in the foreseeable future,” said Xavier Mosquet, co-author of the BCG’s study on electric-car batteries.

The BCG, noting challenges in energy storage capacity, charging time and infrastructure needs, predicts that batteries will continue to limit the driving range of fully electric vehicles to 160-190 miles on a single charge at least for the next 10 years.

“The [battery-electric vehicle] market will evolve slowly because their batteries are expensive, vehicles have limited range, potential buyers have ‘range anxiety,’ and someone needs to install recharging stations to allay range anxiety,” Sperling said. “The [plug-in hybrid] market will expand much faster because their batteries are smaller and much less expensive, vehicles have long driving ranges, buyers do not have range anxiety, and home recharging, even with the existing 110 volts, are sufficient for charging.” How fast public acceptance happens, he said, depends both on battery costs and the aggressiveness of new federal standards on greenhouse gas emissions and fuel economy.

In the Driver’s Seat

For electric car advocate David B. Lo, the progress being seen in electric car production is cause for celebration.
“I’d not have thought this would be happening this quickly,” said Lo, founder of the California-based nonprofit 4EVRiders.org and an IT application analyst by day. “However, it is inevitable—we cannot keep burning fossil fuel that pollutes [the environment], and buying fuel from hostile countries.”

Volt_dashboard

General Motors

A digital icon on the Volt’s dashboard indicates the remaining

battery life and how many miles further it can go without a recharge.

Lo purchased a Leaf after test-driving it in November. “The EV drives like a regular car, but super-quiet and with no exhaust,” he said, further describing it as a “nice clean car, great for daily commute, [and it] saves money on gas and maintenance, about $2,000 a year.”

Sexton was among the first to have daily use of the Volt in 2010 as a member of a customer advisory board charged with providing GM with data and opinions about the car. Herself a former GM worker and a vocal critic of its decision to end the EV1 program, Sexton noted that she has been hooked on electric cars since she first experienced the torque of an AC motor years ago. She was eager to begin using the Volt last fall for both personal and professional purposes.

“Living with the Volt has confirmed my initial experiences and impressions from various test drives. It is in a nutshell the car GM has represented it to be. I average 40-50 miles of electric range without trying, and then the gas engine seamlessly comes on without any drama whatsoever. It’s quiet and smooth, with some nice creature comforts,” she said. “I can see a lot of people being very happy with this car.”

Here to Stay?

Some have used the word “revolution” to describe electric cars’ entry to the mass market. Voelcker views it more as an evolution, one that will take a few generations to roll out. Gasoline, he notes, is a tremendous energy carrier, with 10 times the density of the best battery pack available today. It wiped out electric and steam cars early on and has been the industry’s power train for 100 years. The electric car may be in every showroom within the next decade, but it’s unlikely to have much of a market share any time soon.

“I don’t expect liquid fuels ever to go out of usage in my lifetime. We will still be building liquid fuel cars or vehicles 50 years from now,” he said. “What the percentages will be are anyone’s guess at this point, but we will start to have a diversity of power trains and of fuel to move people around that we have not had for a century. So, that’s why it’s an evolution.”

Electric and gasoline vehicles will coexist with other alternatives such as natural gas, which is growing in popularity due to the fuel source’s widespread distribution in North America and its present use in some commercial vehicles. Honda already sells a natural gas Civic GX in a handful of markets and plans to go nationwide with its 2012 model. Fuel cell electric vehicles, which run on hydrogen gas, could also hit the highways in greater volumes. These zero emissions vehicles offer greater energy efficiency than the internal combustion engine, but they face significant challenges in areas such as component costs and hydrogen generation and distribution.

But the time is now for the electric vehicle. Scott Miller, East Coast director of Coulomb Technology’s ChargePoint America program, estimates there will be about 20 manufacturers selling plug-in hybrids or fully electric cars by late 2012. He noted that in the past the buzz was about the Toyota Prius hybrid, but that involved just one automaker.

“It’s not a one-trick pony anymore,” Miller said. “With all these manufacturers coming out with cars, the prices will be coming down, there will be attractive leases—the Volt’s lease model is unbelievable at $350 a month for three years. You’re going to start seeing more and more of these out there, and it’s going to self generate.”

Brian Donahue is a freelance writer based in New Jersey.

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