Market News

 December 12, 2006
Was 2006 the year of the electric car?

 (by Hybridcars.com) - One could argue that the defining characteristic of the 20th-century North American driving experience is freedom---and as long as you have your own car and a full tank of gas, you've got plenty of it. The privately owned vehicle offers the ability to go where you want, when you want, as quickly as you want---and as far as the seemingly endless North American highway will take you.

If you buy this premise, then the electric car of the 1990s---such as GM's EV1, Honda's EV Plus, Toyota's RAV4 EV, and Ford's Th!nk and Ranger EV---wasn't the proverbial ticket to ride. These vehicles relied entirely on electric rechargeable batteries, unlike today's hybrid gas-electric cars that combine a conventional gasoline engine with an electric motor and batteries. An electric drive is fast, efficient, very quiet, and fun. There was only one problem: a single charge of that fun lasted, give or take, only 100 miles. As the energy in these 20th-century EVs was depleted, the driver had to think about getting back home to refill the batteries with electric fuel supplied by a socket---a process that could take seven to eight hours.

Compare that to a gas-powered vehicle. Running low on fuel? No worries. Pull into one of the 170,000+ gas stations dotting the landscape, and in about five minutes, you're good for another 300 or 400 miles of freedom.

Forget for a moment that most North American motorists drive less than 40 miles per day---well within the capability of today's electric car technology---and that there are numerous environmental and social benefits to an electric car. What if you really wanted to take a weekend trip from Los Angeles to Las Vegas, or New York to D.C.? Sure, you could take the other car in the driveway or rent a car for the weekend, but the prospect of a slight impingement on transportation freedom---real or imagined---was all that EV detractors needed to kill California's zero-emission mandates that ushered in the all-too-brief electric car period from 1996 to 2003. That and a few million dollars!

The carmakers teamed up with oil companies to wage a multi-million dollar lobbying campaign to fight the California mandates. In short order, the California Air Resources Board backed down from its requirement that 2 percent of the vehicles produced for sale in California had to be zero-emissions vehicles in 1998, increasing to 5 percent in 2001 and 10 percent in 2003.

So what happened to the 4,000 battery-powered ZEVs placed in California by major automakers between 1998 and 2003? Most of the cars were leased rather than sold. Despite the overwhelming enthusiasm and advocacy of electric car drivers, Ford, GM, Honda, and Toyota reclaimed the vehicles from lessees. The companies scrapped their electric vehicle programs, and wastefully and wantonly crushed or shredded their electric vehicles. Today, not a single EV is offered by the major auto manufacturers.

Freedom, and Electric Cars, Revisited

The most notorious of the EV-car crushers was General Motors. The sad story of its electric vehicle, the EV1, and the EV1s' owners, was immortalized in Chris Paine's 2006 documentary, "Who Killed the Electric Car?" But the story is not over. Three short years after GM demolished its electric car program and nearly every individual electric vehicle, the company's leadership has apparently had a change of heart, which could signal the re-emergence of the electric car on American roads.

In June 2006, Rick Wagoner, GM's chief executive officer, told Motor Trend magazine that "axing the EV1 electric-car program and not putting the right resources into hybrids" was the biggest mistake of his tenure. In late November, Bob Lutz, GM's vice chairman, spoke about the company's commitment to "the electrification of the automobile." Days later, at the 2006 Los Angeles Auto Show, Wagoner voiced "serious concerns about energy supply, energy availability, sustainable growth, the environment, even national security---issues that, collectively, have come to be called energy security."

Did Mr. Wagoner and Mr. Lutz suddenly go green? A desire to hug trees or rewrite the political history of oil dependency is not likely behind GM's new promise to bring back electric cars.

Instead, some or all of these factors influenced their decision:
  • GM's public relations disaster embodied by the documentary "Who Killed the Electric Car?"
  • Rising public awareness about the realities of climate change, and the effects of automobile emissions on global warming
  • Roller-coaster gas prices in 2005 and 2006, in which many consumers abandoned the largest, most gas-guzzling vehicles
  • Rapid adoption of hybrid gas-electric vehicles; big public relations points for the Toyota Prius and other Toyota hybrids; and the possibility that the future Prius models could offer EV-like plug-in recharging capabilities
  • Signs of technology improvements in rechargeable batteries, promising longer driving ranges and quicker charge times; and promises of increased government support for better batteries
  • The need to fend off Toyota from overtaking GM as the technology leader (mindspace) and largest car company in the world (market space). Toyota is already the more profitable of the two, by far.
  • The emergence of Tesla Motors and other small, independent electric sports car companies, promising to reinvent the auto industry.
As 2006 comes to a close, the American car dealership showroom lacks a full battery-electric vehicle (or a plug-in hybrid, which would come close to offering the same electric-drive benefits). Another three or more years, at least, will come and go before such a vehicle is accessible and affordable to most consumers. Nonetheless, 2006 may go down in history as the year that the auto industry began to combine the freedom to go anywhere with the freedom from oil addiction.

Mileage from Megawatts: Enough Grid Capacity to Charge Plug-In Vehicles

If all the cars and light trucks in the nation switched from oil to electrons, idle capacity in the existing electric power system could generate most of the electricity consumed by plug-in hybrid electric vehicles.

A new study for the Department of Energy finds that "off-peak" electricity production and transmission capacity could fuel 84 percent of the country's 220 million vehicles if they were plug-in hybrid electrics.

Researchers at DOE's Pacific Northwest National Laboratory also evaluated the impact of plug-in hybrid electric vehicles, or PHEVs, on foreign oil imports, the environment, electric utilities and the consumer.

"This is the first review of what the impacts would be of very high market penetrations of PHEVs, said Eric Lightner, of DOE's Office of Electric Delivery and Energy Reliability. "It's important to have this baseline knowledge as consumers are looking for more efficient vehicles, automakers are evaluating the market for PHEVs and battery manufacturers are working to improve battery life and performance."

Current batteries for these cars can easily store the energy for driving the national average commute - about 33 miles round trip a day, so the study presumes that drivers would charge up overnight when demand for electricity is much lower.

Researchers found, in the Midwest and East, there is sufficient off-peak generation, transmission and distribution capacity to provide for all of today's vehicles if they ran on batteries. However, in the West, and specifically the Pacific Northwest, there is limited extra electricity because of the large amount of hydroelectric generation that is already heavily utilized. Since more rain and snow can't be ordered, it's difficult to increase electricity production from the hydroelectric plants.

"We were very conservative in looking at the idle capacity of power generation assets," said PNNL scientist Michael Kintner-Meyer. "The estimates didn't include hydro, renewables or nuclear plants. It also didn't include plants designed to meet peak demand because they don't operate continuously. We still found that across the country 84 percent of the additional electricity demand created by PHEVs could be met by idle generation capacity."

"Since gasoline consumption accounts for 73 percent of imported oil, it is intriguing to think of the trade and national security benefits if our vehicles switched from oil to electrons," added PNNL energy researcher Rob Pratt. "Plus, since the utilities would be selling more electricity without having to build more plants or power lines, electricity prices could go down for everyone."

Lightner noted that "the study suggests the idle capacity of the electric power grid is an underutilized national asset that could be tapped to vastly reduce our dependence on foreign oil."

The study also looked at the impact on the environment of an all-out move to PHEVs. The added electricity would come from a combination of coal-fired and natural gas-fired plants. Even with today's power plants emitting greenhouse gases, the overall levels would be reduced because the entire process of moving a car one mile is more efficient using electricity than producing gasoline and burning it in a car's engine.

Total sulfur dioxide emissions would increase in the near term due to sulfur content in coal. However, urban air quality would actually improve since the pollutants are emitted from power plants that are generally located outside cities. In the long run, according to the report, the steady demand for electricity is likely to result in investments in much cleaner power plants, even if coal remains the dominant fuel for our electricity production.

"With cars charging overnight, the utilities would get a new market for their product. PHEVs would increase residential consumption of electricity by about 30 - 40 percent. The increased generation could lead to replacing aging coal-fired plants sooner with newer, more environmentally friendly versions," said Kintner-Meyer.

"The potential for lowering greenhouse gases further is quite substantial because it is far less expensive to capture emissions at the smokestack than the tailpipe. Vehicles are one of the most intractable problems facing policymakers seeking to reduce greenhouse gas emissions," said Pratt.

Finally, the study looked at the economic impact on consumers. Since, PHEVs are expected to cost about $6,000 to $10,000 more than existing vehicles - mostly due to the cost of batteries -- researchers evaluated how long it might take owners to break even on fuel costs. Depending on the price of gas and the cost of electricity, estimates range from five to eight years - about the current lifespan of a battery. Pratt notes that utilities could offer a lower price per kilowatt hour on off-peak power, making PHEVs even more attractive to consumers.

Adding "smart grid" communications technology to ensure the vehicles only charge during off-peak periods and to provide immediate, remote disconnect of chargers in event of problems in the power grid would make them attractive to utilities.