Electric cars: iPhones of the auto industry?

Depending on who you talk to, electric cars pack the disruptive force of either Dell PCs or the Apple iPhone.

Regardless of your choice of analogy, the auto industry is facing the kind of technology-based competition it hasn't seen in years.

And in this game, start-ups claim to have the upper hand on the incumbents.

Click on the photo to see a photo gallery of electric cars at the 2008 New York Auto Show.

(Credit: CNET Networks)

"This is probably something that has not been seen since we moved from the horse to the engine," said Henrik Fisker, the CEO of Fisker Automotive, which is designing a luxury hybrid electric car, the Karma.

"We suddenly have an open field where current carmakers don't know about batteries, or software, or designing these vehicles," he said, adding that incumbent companies are still four or five years away from mass-producing plug-in electric cars.

That may sound like bravado coming from a designer of flashy cars. But when you look at the race to deliver a breakthrough battery-driven car, the field is thick with newcomers.

The best known is perhaps Tesla Motors, which just began producing the Roadster sports car with a starting price of about $100,000. But there are several others, offering up different designs and business models to give the internal combustion engine a run for the money.

At a panel of three young car companies--Detroit Electric, Fisker Automotive, and Phoenix Motorcars--at a clean-tech investor conference last week, executives laid out some of the business opportunities and technical hurdles to cleaner cars.

On one point, they agreed: consumers will have more options to kick, or at least cut down on, their gas habit. But beyond that, their views differed on which technology--all-electric, plug-in hybrids, or hybrid electric--would succeed.

"It's a fallacy to say that everyone is going to jump off of oil onto batteries. Then we'll just have a shortage of lithium and the prices will go up," said Daniel Elliot, president and CEO of Phoenix Motorcars. "What's really going on is a fracturing of fuels."

Pick a horse
The diversity of approaches reflects the challenges that current battery technology pose.

Fisker's $80,000 Karma, expected for release at the end of next year, will have a custom-designed lithium ion battery that can go 50 miles. That's a range that covers what most people drive in a day. To ensure a longer range, the car will include a four-cylinder internal combustion gasoline engine that charges the battery.

Click on the photo to see a gallery of electric cars of all shapes under development.

(Credit: Phoenix Motorcars)

But, having both a battery and gasoline engine in one car raises costs, say advocates of all-electric cars. Fisker and Tesla have gone after the luxury market first, catering to environmentally oriented customers willing to pay for the latest technology.

Phoenix Motorcars, by contrast, is making an all-electric truck and car, as is another supplier, Miles Electric. To get around the range limitation, Phoenix Motorcars is designing its vehicles, based on an Altairnano lithium titanate battery, for use in fleets where the use and range are known.

"It's difficult to move to plug-in hybrids and make economic sense...You have to have a conventional drive train and a battery," said Elliot. "When you're talking about going down-market, you really have to pick a horse."

In the next few years, a variety of battery technologies will be put through the paces to see which chemistry will be safe, have a long life, and can be recycled.

Parallel to technical development in batteries, new companies are trying to innovate with new business models.

Project Better Place, started by ex-SAP executive Shai Agassi, is planning to test a battery-swapping program in Israel, Denmark, and perhaps San Francisco. It now has a prototype of its car, which will be built by Renault.

Premium green
Apart from all the technical and business challenges remains the question of customer demand.

To fleet owners, replacing trucks with rechargeable electric vehicles could simply be a question of saving money in the face of rising fossil fuel prices. They can also potentially benefit from government incentives for cleaner transportation, such as California's zero-emissions vehicle plan.

But for many consumers at this point, it's more of a lifestyle statement, argued Fisker. Buying a luxury hybrid electric car is like buying Apple's iPhone when it first came out. Buyers of some of the first consumer-oriented electric cars will be technology early adopters, eager to be part of the future, he said.

Meanwhile, Think Global is making an all-electric town car, called the Think City, which can top out at 65 mph and go 110 miles on a single charge. Rather than try to compete with a typical sedan, it's aimed at urbanites who want a smaller, fuel-efficient car, perhaps used as a second car. It plans to bring the Think City to the U.S. and is exploring business models where consumers can swap out batteries.

The incumbent automakers are not sitting still, either. Nissan this week said that it will offer an all-electric car in 2010. GM's Chevy Volt is supposed to come out in 2010, while the other incumbents are pursuing different paths to better mileage.

"We're putting the pressure on the bigger boys," said Albert Lam, CEO of Detroit Electric, which plans to make electric cars and buses in 2009. "We are the 'Dells' of the industry--the smaller boys that have a tremendous opportunity to validate the industry and to be the next big thing."

Lam said consumers are also getting more savvy about green claims from automakers. He said a hybrid with a big 6-liter engine, like the one Lexus is making, is "a joke, an oxymoron."

Fisker likens battery-powered cars to iPhones, a product consumers are willing to shell out extra for, even if it means taking on some risk of being an early adopter.

"We're seeing a movement where people are demanding a product which is not there. People want a green car," he said. "I think what we are going to see are people are going to take that risk because there is no other alternative."

[BrianDuper]

The more competition the better, but I wouldn't underestimate companies like Toyota, who outsell everyone in hybrids, and can mass produce in many countries. Maybe these startups understand a thing or two about batteries and software, but there are many more parts of a car that they don't understand. Best of luck to them all.

duper

my favorite sites: http://www.startjoint.com - Cool Search Site which has an Autos category
my browser: http://www.slickscreen.com - Four Panel browser that rocks it.

[bschmidt25]

Right now, I think most people don't really care if a car is "green" or not, they just want something fuel efficient. Whether that's gas, hybrid, diesel, or electric doesn't matter much to them. They're just tired of paying $100 a week to fill up their cars. Emissions aren't driving the market for these cars - gas prices are.

[Stain777]

Detroit electric is the old Zap company that tends to over-promise and under-deliver. There's been a lot of shenanigans with their business practices over the years, so should be looked at not as a major player but as a company playing on the hopes of the Green industry. To date the only thing they've produced are scooters and lots of press releases. Take a read of last month's wired magazine for an in-depth article on their business practices and actual production. A quick look at their site will show you OEM's from Brazil, conceptual renders, purported alliances (currently in the courts), and electric scooters.

[open-mind]

"...incumbent companies are still four or five years away from mass-producing plug-in electric cars." "The incumbent automakers are not sitting still, either. Nissan this week said that it will offer an all-electric car in 2010. GM's Chevy Volt is supposed to come out in 2010..."


I guess if you describe every possible scenario, one of them will be right. ;-)

[willdryden]

The major automakers will resist all electric cars until the very end. There are several reasons for this. The maintenance is very low making their dealers unhappy. The vehicles last too long. Conversions have already lasted over 20 years and the owners have no idea how much longer they will last. There is no scheduled maintenance unless they are using flooded cell batteries and the only things they have to replace are tires, brakes, batteries, and windshield wipers. If they could use NiMH batteries, they would not even need to change the batteries.

[mlamonica]

from the reporter: It's interesting that you bring up maintenance, a point I wasn't able to bring up in this article. But I've heard the same about easier maintenance for electric cars. Fisker was saying that it's significantly less costly to own an electric car. But if dealers don't make money on selling cars and rely on maintenance instead, there could be some resistance at the dealer level, too. Also worth noting is that these start-ups don't actually have their own dealer networks, so they'll likely have to partner.

[rajeshmail201]

I don't understand the comparison. How is the iPhone green tech?

[mlamonica]

Sorry for the confusion. It's just an analogy: electric cars are like iPhones in that people are willing to pay a premium for products that they see as a big leap forward in functionality and cachet. In this case, the argument is that consumers who want a 'greener' car (for whatever reason) and are willing to buy new and relatively untested products.

[mlamonica]

Sorry for the confusion. It's just an analogy: electric cars are like iPhones in that people are willing to pay a premium for products that they see as a big leap forward in functionality and cachet. In this case, the argument is that consumers who want a 'greener' car (for whatever reason) and are willing to buy new and relatively untested products.

[thriftyT]

The startups have made impressive showings, but the bottom line is that even in the most innovative electric car, there are many parts that are "not innovative". Everything from the crash-safety regulations to the suspensions to the actual manufacture of the cars favors the incumbents.
Therefore, my money is still on Toyota, GM, et al. to make the most successful electric cars.

[ReVeLaTeD]

I dunno...maybe I'm in the minority.

Fuel efficiency is important, yes. But I'd rather force society to move towards that.

I know I'll get hellfire for that, but what I mean is, we really need to do something about the SUVs, the big trucks (like the Titan), and the poor management of gas. For example, people who purposely drive from Temecula, CA to Tijuana to go clubbing every weekend. While that's their right, it's a waste.

Carpooling shouldn't be mandatory, but incentivize it and people will do it.

These alternate sources are great and all but I would rather just fix the regular combustion engine model to be more fuel efficient and mandate retrofitting for no charge, so we don't lose the aesthetic pleasures of modern vehicles. These electric cars are just plain unattractive, and I'm sorry but that matters to me.

[theBike45]

Most of these startups are either producing (with great difficulty, as in the case of the often delayed Tesla) exorbitantly priced niche cars that will not affect the auto industry in the slightest, or are simply making press releases for cars that never appear, as in the case of ZAP. None of the dozens of announced cars has even gotten into the development stage and most never will. Building a modern car is mostly about parts that have nothing to do with the drivetrain. Its the rest of the car thta requires all that time to develop and expertise, which companies like Phoenix and Tesla simply do not have - they had to hire former Detroit auto execs because they didn't even know how to go about certifying a vehicle for sale. These companies are amateur hours for the most part, Fisker excluded.
They are also building the simplest cars possible - batteries and an electric motor and that's it. But those range limited vehicles aren't viable and will fail as soon as the word gets out that they take forever to recharge, can't go anywhere and have very expensive batteries that will need replacement in a few years. The used car value of those things will collapse. The biggest conspiracy out there is the one perpetrated by the environmental extremists who are hiding all of the deadly features of the battery-only electric.

[westlakers]

or we shall call it iCar. I think an all-electric car with Apple-style gadget (or User Interface), will be next iPod phenomenon! the world would be much better if average Joe in US, China, India, everywhere in the world drives an affordable iCar for work.

[CooperSWorks]

The whole iPhone/electric car thing - just call it what it is in marketing parlance: EARLY ADOPTION. http://en.wikipedia.org/wiki/Early_adopter. And yes, early iPhone customers were "early adopters".

[webdev511]

Just bring back the EV-1, put NMiH batteries in it and count me in.

[bob1xxxx]

honestly tesla and companys like them producing insainly over price. stupidly small (Im 6'4" 280 teslas are nice if your billy barty) are honestly worthless cars with almost zero usefulness. Personal I think there going to be a very gradual transition to all electric battery only cars due to the short comming current battery tech(ie 10 to 20 years for all battery power cars are the norm). What not mention here and allot of other articals on electric cars is right now there allot of tech out there right now, if implament you get you in mixed driving 40 mpg in a gasoline only powered car the size of Ford crown victory. Honestly unless there real jump in battery tech (10 min recharge time to go 350 miles in a camery size car (real size car for really americans) I think plug in hybrids are the way to go. With the 100 mile range to cover you average runs to work , shoping etc.... all with clean electric power, but if you want to take that road trip to Vegas, San fransciso, Tahoe and live in the So Cal you wont be limit to visit areas that only have the electrical support for your car (ie parking lots with the not so comming 220volt outlet) you can still go were every you want with low emmision gas hybrid engine. For the near future (ie 10 to 15 years) I think pluging hybrids is the wave of the future most americans can except. They can be made in realistic size cars, compact (ie prius) mid size (camery) full (cown victory) and even full size tucks and suv could easily go the plug in hybrid route. You get cleaner air, less forgien oil, but do not put a serious crimp on peoples life styles and driving choices. Isnt that the true american way, freedom to work and go where you please. When battery tech catchs up maybe all battery power cars will work ,but not today and we have a reasonable altnerative in are grasp and hopeful short sited green nazi's wont over look a reasonable intermediate solution that could quickly produce quality results.

[HaroldPBoushell]

Cnet Post 18OCT09

Liquid Air Powered cars could do the
same, without ?Range Limitations?.
more ?Btu? per pound only ?negative?,( - ),
run a Refrigerator-Backwards and
get Mechanical Energy Out.

Additionally, you can make Liquid Air
at home and store 300 lbs or so.
1973 class study Northrop Inst. of Technology
by
Harold P Boushell