Researchers and market advocates in a recent Detroit News interview argue that the electric
vehicle movement is reaching the point where it will become an unstoppable
force on the market before. Describes, Genevieve Cullen, the vice
president of the Electric Drive Transportation Association, an advocacy group for
electric cars, "We think that increasing electric is inevitable. The speed
I. The EV Movement has Faded Before -- Will
History Repeat Itself?
The question of whether the electrification
movement will stick this time around is a compelling one.
In the early 1900s electric vehicles were
extremely popular, outselling gas vehicles in some areas until the advent of
mass production. With the arrival of modern engine designs, electric
vehicles quickly faded from the mind of the auto industry and the public.
In the 1960s interest in electric cars once again
rose, with concepts like the 1967 Comuta from Ford Motor Company (F).
These efforts failed to gain traction, though. In the 1990s there
was yet another electric revivalist movement with General Motors Company's (GM)
EV1. And yet again EVs were met with apathy and a hasty demise.
Today EVs are once more on the market, with the 2012
Chevy Volt from GM (a plug-in hybrid electric vehicle; PHEV) and
2012 Nissan (NSANF)
LEAF EV (a battery-electric vehicle; BEV). However, the sales
aren't looking great, largely due to the manufacturers' inability to put
out significant volume to the public.
But many are convinced that this time EVs may hang
in there. Oil is off highs of $147 USD/barrel reached in July 2008.
But it's still relatively high, hovering at around $100 USD/barrel.
II. Increasing Infrastructure
They key to the survival of the EV movement
arguably lays in the significant uptake in EV infrastructure. Thanks in
part to a $2.4B
USD government investment program in the battery industry, six major battery plants are
open or are near opening. And Tesla Motors Inc. (TSLA),
Ford, and Toyota
Motor Company (TM) will look to jump into the mass market next year
with new electric vehicles. Ford is planning to release the 2013
Focus Electric and Toyota plans to release a 2013
Prius Plug-In. Tesla meanwhile is planning to launch its first
mass-market EV, the
2013 Model S.
The real key to increasing promise for the mass
market is dropping batter prices and increased battery production.
Analysts estimate that in 2011 50,000 EV batteries will be produced and
in only three years -- by 2014 -- that number will rise to 500,000 batteries a
Meanwhile costs are dropping. Eric Isaacs,
the director of the Argonne National Laboratory -- a government research
institution located outside of Chicago, Illinois -- states, "The question
is: Can these guys make a battery that is five times cheaper? I think yes. I
think we can do it."
One major obstacle to the fledgling movement is
the availability of charging stations. EVs, like gas vehicles need to be
"fueled up". Standard chargers can take hours to completely
charge a vehicle. A dedicated high-voltage charging station can mostly
charge a vehicle within a half or so.
The need for chargers is more critical when you
consider that the "tank" on EVs (battery) only holds one or two days
worth of "fuel" (charge) for the average commuter.
Here, again, the government
is looking to help spur the market by investing $400M USD to deploy chargers to public
Two of the leading firms include SemaConnect and
ECOtality Inc. (ECTY).
SemaConnect was installing chargers in Maryland this week.
Meanwhile ECOtality in recent weeks has installed its BLINK charging
stations in California, Washington state, Oregon and Arizona.
III. The EV Outlook
There are telltale signs that the new EV trend may
be a bit different. Anecdotal examples can be found in the retail and
Fleet giant Hertz is offering rentable EVs in New
York City and will soon be offering them in Washington, D.C. and San Francisco,
States Company spokeswoman Paula Rivera,
"Currently, we have a few dozen vehicles. By the end of the year we
anticipate having hundreds of them available. We do view this as the future of
transportation, and see adoption coming not only from having the cars
available, but the ecosystem to charge them. ... As the ecosystem builds out,
our fleet will increase."
Similarly, electronics retail giant Best Buy says
it is considering selling recharging stations and is training its "Geek
Squad" service team members to ready them for the possibility. Chad
Bell, the senior director of Best Buy's New Business Solutions Group states,
"We dedicated a significant amount of resources to help this technology
come to market. We think these (home charging-stations) will be purchased and
sold in the future similar to how electronics are sold today."
Some analysts are more
pessimistic about the movement. Still it's hard to argue that
the industry isn't showing an awful lot of interest in it, this time around.
To borrow a chemistry analogy, it appears that EVs
are currently are entering a transition state. They aren't over the
energy barrier (sales hump) yet, but they may soon get there. If they can
keep up their momentum, perhaps the EV movement can finally survive and thrive.