The Comeback of the Electric Car

Vancouver, Canada – High prices at the pump will fuel consumer interest in electric vehicles.  That at least is what investors are hoping as they pour hundreds of millions of dollars into technology that uses battery packs to power automobiles instead of internal combustion engines.

Take the Chevy Volt concept car that was unleashed at the North American International Auto Show in 2007.  It provoked such a flurry of interest that fans have been flocking to an unofficial web site dedicated to this innovative vehicle that will not hit the roadways before 2010 (

Further curiosity was gained when the company unveiled the production model of the Volt this week to celebrate the company’s 100th anniversary.

The Volt can run for at least 64 consecutive kilometers on a fully-charged lithium-ion battery and reach 160 kilometers per hour.  The car relies on a small gas-powered engine to power a generator, which supplies electricity to the battery pack and the drive motor. It can be charged on a standard electrical household outlet for less than the cost of a cup of coffee.  If the Volt succeeds, it could lead the financially troubled automaker into a profitable horizon.

That point has not been lost on the Government of Ontario. Its power utility, Ontario Power Generation (OPG) and General Motors Canada (GMC) are working together to drive home the message that plug-in electric cars are on the horizon, and they will be powered by an Ontario electricity system that will be cleaner over time. This is the central theme of a two month Ontario-based advertising campaign showcasing the environmental benefits of plug-in electric vehicles.

But the die has yet to be cast.  First, technical challenges remain for all electric cars.  The Volt’s range, for instance, may be cut in half by drivers who drive aggressively and run their air conditioning at full blast, according to scientist Aymeric Rousseau of Argonne National Laboratory near Chicago.  And the expensive lithium-ion battery may require manufacturers to price some buyers out of the market.

Second, strict security requirements from regulators seem to keep independent electric car companies from making headway in the market.  It’s a problem well known to Dynasty Electric Car Corporation of Delta, B.C.  None of its cars can be sold in the province because local legislation prevents zero-emission vehicles to be driven on roads with a posted speed limit of 40 kilometers an hour - a limit that applies to most roadways.

And so an Israeli-venture backed company called Better Place is betting that electric vehicles can only be successful within a market-based transportation infrastructure.   It will build, with $200 million of committed capital, an Electrical Recharge Grid in Israel and Denmark, two small countries eager to reduce their reliance on fossil fuels.  The governments will provide tax breaks on zero-emission vehicles and the cars will be built by the Renault-Nissan Alliance.  Test cars could be on the road by late 2009.

Ideally, according to Better Place founder Shai Agassi, the countries will be blanketed by a network of charge spots where drivers can plug in their vehicles at any time.  They will subscribe to a specific monthly plan similar to those of cell phone companies, such as unlimited or pay-as-you-go minutes, and will buy the car at reduced prices so that drivers can be added onto the network.  Profits will be made by selling minutes of electricity.

Better Place hopes to bring other countries into the fold quickly.  The Ontario government has gone into talks with the company but no firm commitment has been made to set up an electric transportation hub in its spread-out metropolis.

Other countries are moving ahead in their own way.  German auto giant Daimler and utility RWE are teaming up to provide Berlin with a network of 100 electric cars and 500 battery-charging stations.  Charging stations will be installed in homes, parking lots, office buildings and shopping centers.

The first vehicles, running on lithium-ion batteries, will hit the roadways in 2009. It will be Daimler’s second foray into the electric car market after a trial of fleet vehicles for the police of Islington, an inner-city district of London.  Those tiny vehicles, running under the Smart-name brand, can travel up to 115 kilometers between charges and take 8 hours to fully reload.

Both Berlin and London have the strong support of their governments.  In July, newly-elected mayor Boris Johnson gave his go-ahead for installing public points at which electric-car owners may top up batteries.  Today there are 40 of them in the capital.  Drivers pay around 140 dollars for a key that allows them to fuel their electric cars for free.

And the State Grid Corporation of China, the largest electric power transmission and distribution company in the world, has told its subsidiaries to build electric car charging stations in several cities including Shanghai, Tianjin and Beijing.

All of these governments recognize the need to revive electric vehicle technology that has been around since the late 19th century.  Not only are fossil fuel emissions choking their cities but the high price of gasoline is dampening economic activity.   Car manufacturers, for their part, see a window of opportunity as consumers demand cleaner products.  But in some cases companies are nudged along by regulators.

The European Union, for instance, plans to impose penalties on car manufacturers if their fleets emit over 130 grams of carbon dioxide per kilometer after 2012.  That might be just enough of an incentive for car makers to look for alternative fuels.

The risk, of course, is that the price of oil keeps dropping as it has over the last few weeks.  Consumers would then be less likely to pay a premium on electric cars and go back to their old driving habits.  The internal combustion engine would survive for a while longer.

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