The Prospects

The History before the Future

As mentioned in the primer above, fully electric vehicles are not entirely new. As background to the current prospects for EVs, we comment on the two noteworthy prior introductions of electric vehicles in the U.S. - the electric streetcars of the 1920s and GM’s EV1 introduced in California in the early 1990s. By several popular reports, both of these efforts met their demise due, in large part, to commercial interests that were antagonistic to the possible success of the electric vehicle. 

First, more than ninety years ago, fully electric streetcars had come to populate upwards of 100 U.S. cities.  Then, as reported by Sherry Boschert in Plug-In Hybrids, GM, Standard Oil and Firestone colluded in order to dislodge the popular electric streetcar. The three companies formed a front company (National City Lines) that bought up the private streetcar lines in 80 U.S. cities and closed them down, presumably to pave the way for a more gasoline-highway centric future, which would be more aligned with their commercial interests. Eventually, the GM executives involved were convicted in an antitrust investigation.1

Second, twenty years ago, in September 1990, the California Air Resources Board (CARB) set in motion a zero emissions vehicle (ZEV) mandate that led to the development of electric vehicles from a number of major automakers.2 GM’s response was to introduce into the California market a fully electric car of some popularity called the “EV1”. The story of the EV1, its appealing performance, its consumer popularity and the intriguing details of its early demise are told in the video Who Killed the Electric Car?3 The superior driving performance of the EV1 and its completely non-polluting nature led to quick popularity in California and a substantial wait list. Yet, even during the development and initial manufacturing period, significant lobbying muscle was exercised in covert campaigns by interested parties against the ZEV mandate. By the time of the EV1’s release, the CARB succumbed to pressures to drop the critical portions of the ZEV mandate. Perhaps with a degree of anticipation, GM declined to fill their early orders for the EV1 by selling the vehicles and only made them available through a lease. Once the mandate removed, as leases expired, GM declined to renew them. In total, GM retired all 800 of the EV1s that were out on lease, and apparently destroyed them. This occurred despite public protests by the lessees and other electric car supporters in California.

A key supplier to the effort had been Electric Conversion Devices (ECD), the developer of the then cutting-edge battery technology (nickel metal hydride—NiMH) used in these vehicles. GM partnered with ECD, acquired 60% share, then (others have suggested) slowed the development and marketing of the batteries, later selling their majority stake to Texaco in 2001. Texaco spun-off the NiMH patent control into a company called Cobasys. Sherry Boschert and others have questioned Texaco’s commercial intentions. By 2003, most all-electric car programs at the incumbent auto manufacturers were closed.

The Current Outlook

Today, much has changed. From the technical and manufacturing side, we have the next generation of battery technology (lithium ion) and new battery suppliers, and we have new entrant EV manufacturers along with the incumbent auto manufacturer who are each offering at least one EV or PHEV. From the government and regulatory side, we have direct federal support for the EV sector through purchase subsidies and grants and we have increasing coordination internationally intended to lower greenhouse gas emissions. And perhaps most importantly from the consumer side, we have far greater consumer awareness of climate change peril and we have10 years of growing acceptance of the HEVs.

Yet, hurdles remain. Traditional gas engine consumers express concern about the driving range and the ability to charge the batteries regularly and conveniently. Commercial and governmental interests need to proactively increase their investments in remote charging stations.4 At today’s single tariff structure for residential electricity rates, the cost to charge an EV far exceeds the cost and healthy margin that utilities need to recoup.  But in time, utilities will recognize that moving to real-time pricing tariffs will accelerate EV demand for their off-peak excess power generation. Alternatively, the utilities may experience regulatory encouragement to adopt real-time pricing of electricity (peak daytime rates versus lower off-peak nighttime rates).5Coordinated efforts toward advancements in the electric grid will also help.6 And as more renewable fuel sources feed into the electric grid, off-peak charging by EVs will help create demand for wind, while retired EV batteries can start to serve as storage for utilities and possibly customers.7

All things considered, we view the significant adoption of EVs in the U.S. as realistic necessity. When you look at the options for reducing greenhouse gas emissions, it is clear that the main U.S. focus must be on transportation and electric utility generation and consumption. This will lead directly to EVs. Electric vehicles are the most viable (some would say only) means of lowering transportation emissions significantly. EVs also provide a critical lynchpin between the transportation and utility sectors, which can help drive the utilities toward rational pricing and emissions management. When you see the presence of new entrant EV manufacturers, like Tesla and Fisker, you can expect that the entrenched incumbents will not able to impede the new generation of EVs. When you observe the advances in battery technology already achieved in anticipation of the EV, you can foresee continued advances that will increase EV driving ranges and attractiveness. When you consider the distinct possibility that oil prices will be higher in the future, you know that cost-effectiveness and appeal of EVs will rise proportionately. When you look at the 11-year history of growing hybrid sales in the U.S., you see that EVs no longer have to face consumer fear of complete novelty. And finally, as we all can see, the message of global climate change permeates our daily lives from the classroom to newsroom to the bedroom. At the margin, more individuals are willing to take more responsibility for their direct contribution to greenhouse gas emissions.

When we consider all things…the prospect for electric vehicles is not IF. It is not even WHEN. It is only HOW SOON.

Announced and Projected EV Introductions.

Most auto manufacturers, including several new entrants, are planning announced EVs or PHEVs for the U.S. market.  The table below summarizes some of their projected entry points.

Expected Rollouts of EVs

2009

• TESLA Roadster: high-end all electric sports car
• PRIUS after market conversion kit to make it a “plug-in” 

2010

• Nissan LEAF EV out in limited volumes, with mass production expected in 2012
• GM Volt – November 2010 launch
• BYD (Chinese Auto Manufacturer) e6 sedan in the U.S., to be followed by a full slate of EVs
• Fisker expected to launch FiskerKarma plug-in hybrid performance sports car; to be followed by the Nina, a mass-market sedan
• Coda Automotive - by fall they expect to begin selling EVs manufactured in China by Fall

2011

• Tesla expected to launch Model S, four-seat sedan, EV.
• Toyota is expected to launch the plug-in version of the popular Prius
• Ford will launch an electric version of its Ford Focus sedan
• Nissan expected to have three additional (to the LEAF) production EVs 

2012

• Ford will launch a plug-in hybrid SUV
• Hyundai has said they will launch a plug-in hybrid in 2012
• Daimler to launch the Smart ED EV
• BMW to launch a four-seat city EV
• Volvo to a plug-in hybrid version of its C30

2013

• Bright Automotive to launch their Idea, light utility van, for commercial fleets.

By 2020

• Toyota hopes to have a conventional hybrid option available on its entire line

Beyond the U.S. passenger vehicle market

Commercial transportation and fleets. In our above Primer and Prospects, we have focused on the U.S. passenger vehicle market because that remains the central commercial prize for most EV related corporate players. However, EVs models are also being developed for light- and heavy-duty vehicles. Moreover, fleet operators, in many locals, may be preferred adopters of EVs. As commercial customers of the utilities, fleet operators may already be on real-time tariff schedules or may be able to negotiate specific off-peak schedules that will substantially enhance the cost efficiency of charging EVs in their fleet. Also, fleet operators often have a reliable projection of the range expected for each vehicle’s use each day. This will allow them to schedule EV usage to avoid any issues with possible limited driving range. Another new entrant, Bright Automotive, is targeting its plug-hybrid electric vehicle at the light utility van market and specifically at commercial fleets.

Worldview. Pollution arising from growing cities in the developing world is not just a threat to eventual global warming. In many of the developing country urban centers, the air quality resulting from transportation emissions imperils the real-time health of today’s occupants. In many cases, their polluting vehicles are not expected to handle the excess driving range that U.S. consumers have preferred. And, in many cases the vehicles are more limited in size (three-wheeled jitneys and motorcycles or motor scooters) and don’t carry the considerable dead weight of passenger vehicles in the U.S. market. The health factor and these two differences to the U.S. market, suggest we can see material demand for local versions of EV outside the U.S. Already, as of 2009, India’s REVAi is the widest selling electric car in the world. It is a city car manufactured by REVA Electric Car Company and sold in 24 countries but not the U.S., as it does not currently meet U.S. safety standards.

Europe has traditionally relied on diesel, with its superior mileage to gasoline, as part of its effort at limiting total green house gas emissions. However, Europe is also an active market for EVs. A significant proportion of REVA’s EV sales are in Europe. The REVAi is offered in London, branded as the G-Wiz. In addition, several European manufacturers have announced pure EV models for the U.S. market and are expected to announce European versions as well.