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Electric Cars - Hybrids the Better Bet through 2020? | Wall Street Journal & Reveln

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Here are some of my questions for 2010-2020 electric vs. hybrid planning & investing:  

  • What's different this time with this new, press release style launch of electric cars? 
  • Is the timing better now with the much larger emphasis on being green and with climate change issues making the news regularly? 
  • Is a short range electric car really practical, or do they occupy the same space as concept cars?
  • Will some gloomy predictions about world and the U.S. future economy sink the electric car R & D budgets?  
A more balanced story on the original EV1 GM electric car story (remember the "Who killed the Electric Car boondoggle?)  is here via greencar.com.   An October 2010 showing of two electric cars at TEDxDetroit featuring the GM Volt and the luxury Hyundai Equus here.  I have posted multiple photos of the two electric cars at TEDxDetroit here as well.
  • Is the appearance of a luxury car next to the Volt a harbinger of things to come?

Photos:  Deb Nystrom at TEDxDetroit, October 2010

A current excerpt from the Wall Street Journal this weekend features electric car news circa 2010:

The auto industry is about to embark on a multibillion-dollar gamble: that battery-powered cars will become big sellers.

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Electric cars are too expensive, take too long to recharge and don't provide enough driving range before they run out of juice to be practical for most Americans....

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More than 20 electric models are set to arrive at dealerships over the next three years, led by the Nissan Leaf and Chevrolet Volt due by December. The Obama administration is spending more than $5 billion in tax credits to buyers and subsidized loans and grants to auto makers and others to support the effort, with the goal of getting one million plug-in hybrids or all-electric cars on U.S. roads within five years.

Have Battery, Will Travel

[SB10001424052748703384204575509933055156848]
Emile Wamsteker for The Wall Street Journal

Among the believers is Carlos Ghosn, chief executive of both Nissan Motor Co. of Japan and France's Renault SA, who foresees all-electric models making up 10% of all vehicles sold globally by 2020. Nissan plans to sell 200,000 of its Leaf electric model in the U.S. by the end of 2013.

But skeptics—including some executives at Ford Motor Co., Honda Motor Co. and Toyota Motor Co., and at battery makers—caution that the boosters are too optimistic.

Many experts say the trade-offs and economics of the cars don't make sense for most drivers—even with a $7,500 U.S. tax credit to buyers. After an initial burst of buying by enthusiasts, customers will be scarce, some predict.

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 ...the pool of U.S. customers for whom an electric car makes financial sense—those who travel many miles a year, but on short trips—is very small, about 3% of drivers.

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Electric cars are too expensive, take too long to recharge and don't provide enough driving range before they run out of juice to be practical for most Americans, they say.

For example, the Nissan Leaf will take eight hours to charge with a 240-volt charger that will cost customers $2,200 to install. The fully charged car can drive about 100 miles, Nissan says, though it may go fewer depending on air temperature, speed and other factors.

Plugging In

 

EVicon

 


Prices also will be a constraint: $33,000 for the Leaf and $41,000 for General Motors Co.'s Volt, before the federal tax credit—about twice as much as similar gas-powered cars in the auto makers' lineups.

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 Electric vehicles, Mr. Molinaroli said, "will be an alternative. We just don't think it will happen as quickly as all the press releases out there would make you think."

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Johnson Controls Inc.'s Power Solutions division, which makes batteries for cars, plans to expand its battery output with two new plants. But Alex Molinaroli, president of the division, said the company isn't expecting all-electric cars to take off. Johnson Controls's research found that the pool of U.S. customers for whom an electric car makes financial sense—those who travel many miles a year, but on short trips—is very small, about 3% of drivers.

Electric vehicles, Mr. Molinaroli said, "will be an alternative. We just don't think it will happen as quickly as all the press releases out there would make you think."

Instead, JCI is betting its batteries will increasingly find homes in hybrid models, which use a gasoline engine as well as batteries to provide a much longer driving range.

Absent the government incentives—which could be ended at any time—Boston Consulting Group's Xavier Mosquet estimates that gasoline prices must rise to $8 to $9 a gallon before electric cars will be cost-effective for buyers.

If fuel hits $4 a gallon—compared to under $3 today—and with the current government incentives still in place, the U.S. market might support up to 5% of total sales going to electric vehicles by 2020, Mr. Mosquet said.

...Ford thinks the future lies in cars with more efficient gas engines as well as plug-in hybrids that use small, rechargeable batteries augmented by gas engines. In 2020, Ford expects just 1% to 2% of its sales will be pure electrics, while 10% to 25% will be hybrids and plug-in hybrids...

EVs "are going to take some time to really become a rational purchase," she said.

...Few companies are making bigger bets than Nissan and partner Renault. Together, they are spending $4 billion to develop the Leaf and seven other all-electric models. In Tennessee, Nissan is building a battery plant and refitting an assembly plant to make the Leaf.

..."Nissan has said the Leaf will make money once the car can be produced and sold in higher volumes starting in 2013.

read the full post via online.wsj.com

Deb Nystrom, of Reveln Consulting blogs about innovationleadership, emerging trends, social media, business strategy, news,higher education and fun stuff. You can learn more about her background & projects on the mothership at Reveln Consulting.

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