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MENLO PARK, Calif.--The practice of playing up a company's green policies for show was the new black for the past few years. But now actually making and selling green products is what's hot because of its potential to put a business in the black.

At the 2008 Consumer Electronics Emerging Technologies Summit held here in Silicon Valley, venture capitalists, business consultants, entrepreneurs, and representatives of some of the largest consumer electronics companies in the world discussed the new wave of innovation in a rapidly commoditizing industry. It basically comes down to two words: energy efficiency.

And the reason it's important? Because it can make a product stand out. And if consumers can see a real benefit to using products that are environmentally conscious, they'll buy it. And that's potential profit for vendors and manufacturers.

"Before it was something (consumer electronics companies) just said to make themselves look good. Now it's a business imperative," said George Bailey, general manager of IBM Microelectronics.

That's because flashy, visible new breakthroughs in technology in the CE space aren't providing the same profitable bump for as long as it used to. High-definition televisions are a prime example.

"TV manufacturers are troubled in terms of profit," said Bailey. "They're asking, 'How can I add value, recapture profit?' Before it was larger format LCD screen. If yours was bigger you'd make more money. Now we know that's not true."

When the big TV manufacturers come to his division of IBM he says they are all looking for greener, more energy-efficient chips that will make their TVs consume less power because that's a way they can differentiate their product from others on the shelf. New technologies include High-K Metal Gate chips that IBM is working on that "leak" less power and can power smaller devices for longer.

But green-friendly products can be more expensive, which can deter certain types of consumers. A representative from Samsung in the audience said the company has yet to see that consumers are willing to pay for products just because they are "green."

That's why you have to give them a real benefit, not an imagined one that makes them feel good, said Steve Westly, who runs the clean tech venture capital firm The Westly Group.

"You have to give customers a real value proposition. A 'green' truck that gets 16 miles per gallon? Consumers will see through that," he said. A green product "has to have an added benefit."

Even if energy efficiency doesn't attract consumers in the numbers that these manufacturers and investors hope, businesses will be forced to green their products one way or another, Westly said.

"You'll see (environmental standards) dialed up in a government-mandated way," he said. "Government regulations and mandates are only going to increase. Not just here, but globally."

Electric-car maker Tesla Motors has filed suit against a competitor, claiming the company stole trade secrets and copied design ideas.

The lawsuit was filed Monday in San Mateo County Superior Court in California. Tesla hired Henrik Fisker, CEO of car design firm Fisker Coachbuild, last year to design the body of its all-electric WhiteStar sedan. In the suit, Tesla alleges that Fisker and Fisker Coachbuild Chief Operating Officer Bernhard Koehler accepted the contract "to gain access to confidential design information and trade secrets, then announced a competing vehicle," according to a New York Times article.

Last year, Tesla said it plans to come out with WhiteStar, an all-electric passenger sedan, in late 2009 or 2010. At the time, it said the price would range from $50,000 to $70,000.

The company, based in San Carlos, Calif., said in February that it plans to produce two types of its WhiteStar sedan--one being completely battery-powered, the other being a so-called range-extended vehicle, or REV, wherein a small gas motor recharges the battery as the car is driven.

Fisker, who last fall started Fisker Automotive--a green-leaning sports car company--recently announced an REV named Karma.

Tesla said it decided to scrap Fisker's design for the WhiteStar and began working on a new design when it found out he was going to be a competitor, according to the Times article.

"I think it's ironic that Fisker chose to name his car the Karma, when what he's done is very bad karma," said Adam C. Belsky, a lawyer at Gross, Belsky & Alonso who represents Tesla, told the Times.

The Times attempted to reach Fisker Automotive, but was unsuccessful. Someone who picked up the phone at the San Francisco law firm that is representing Fisker Coachbuild said it is "the firm's policy not to comment on litigation," according to the newspaper.

Last month, Tesla began commercial production of its all-electric Tesla Roadster, which costs $98,000. The company has dealerships in Los Angeles and Northern California. Production of the roadster had been delayed because of problems with the car's transmission, among other components. The company also had a change in top management last year.

INDIAN WELLS, Calif.--Tesla Motors is contemplating selling the drivetrains and software components necessary to build electric cars to other companies.

The company will probably come out with an announcement on this initiative in the second quarter of this year, and parts and software from Tesla could start shipping to other carmakers by 2010 or earlier, said Tesla Chairman Elon Musk during an interview at the Clean Tech Investor Summit taking place this week in Indian Wells, near Palm Springs. Of course, any third-party deals will depend on Tesla's success in getting its own cars on the road. The first car is out, but right now the company is manufacturing only a limited number of cars.

Last year at the same conference, then-CEO Martin Eberhard announced that Tesla would start selling batteries to third-party companies. Norway's Think was the first signed customer. Tesla, however, ran into manufacturing problems and in the fall of 2007 put the battery business into deep freeze.

"Tesla got ahead of itself," he said of the battery business.

The drivetrain, or powertrain, is the collection of components--the engine and transmission--that turn the wheels.

On other notes, Musk said that the company will try to finish a style prototype of its Whitestar sedan in the second quarter. This will give the public an idea of what the car will look like. A working prototype is possible by the end of the year, he said. (The company also still needs to figure out a real name for the car.)

The first version of Whitestar will run completely on batteries, but Tesla will also come out with a range-extended version, he added. Range-extended cars have a small gas motor that charges the battery while you drive. These cars cost a little bit less and can go far further than regular all-electric cars before running out of power.

Musk also said he's a fan of biofuels, but not necessarily for cars.

"It makes more sense as a jet fuel than it does for cars," he said. To grow fuel you need a lot of crops, and cars use far more energy than humans. A person might need 3,000 calories a day; a two-ton car might consume the equivalent of 300,000 calories, he estimated.

"It is not like there are vast tracks of unused land," Musk said.

By the way, Tesla isn't his main job. He spends most of the time at SpaceX, a private rocketry company that puts satellites in orbit for customers like NASA. SpaceX pulled in $100 million in revenue last year.

In order to get its electric sports car to owners sooner, Tesla Motors plans to deliver cars with a temporary transmission that falls short of its originally promised performance.

The news was distributed to the wide world on Thursday in a blog post from Ze'ev Drori, Tesla's new president and CEO.

The post is a reprint of a letter that was sent to Tesla purchasers on December 21, as a follow-up to a town hall meeting for Tesla owners that took place on December 12. About 100 people, including those who called in, participated in the meeting, according to Drori.

The main goal is "to put the Tesla Roadster on the road as soon as possible," Drori said in the letter.

Tesla CEO Ze'ev Drori.

(Credit: Tesla Motors)

Drori's letter lays out in straightforward details the car's setbacks and how Tesla plans to deal with them. The company also posted an audio file of the town hall meeting on Tesla's Web site.

The transmission is the main source of the Tesla's delay. A durable transmission that can maintain the original claims of 0-60 mph in 4 seconds is just not ready. In the interest of getting cars into the hands of owners, the company has decided to deliver the Tesla with a transmission that enables the car to do 0-60 in 5.7 seconds. Once the company has perfected a higher performance transmission that enables the Tesla to achieve 0-60 mph in 4 seconds, it will then retrofit all the delivered cars with the new transmission at the company's expense.

Tesla also addressed questions about overstated EPA (Environmental Protection Agency) driving range figures. The independent lab that performed the EPA's tests miscalibrated one of its tools, resulting in an inflated range, according to Drori. Since then, the car has been retested and the EPA now puts the Tesla's driving range at a combined average of 221 miles per charge. Tesla, meanwhile, still stands by its "real world" driving figures of 267 miles per charge in the city and 165 miles per charge on the highway, said Drori. Tesla also plans to retest the car closer to production.

While Tesla hopes plans to be in full production by summer 2008, it expects "some number of cars to be delivered in early 2009."

(Credit: Michael Kanellos/CNET News.com)

Tesla Motors founder Martin Eberhard, or at least a person who claims to be him on an online message board, says he's not happy about being pushed out of the management team.

(Credit: Michael Kanellos/CNET Networks)

Eberhard this summer stepped down from the CEO spot amid production delays and was replaced with interim CEO Michael Marks. In November, Tesla appointed a permanent CEO. What was less noticed was that Eberhard at that time also stepped down from the board. His official connection to the company now, besides being a major stockholder, is as a member of the advisory board.

On the Tesla Motors Club Web site, Eberhard, or a person claiming to be Eberhard, wrote this:

"I have also signed a non-disparagement agreement with Tesla, so I must, by contract, be a bit careful about how I word things.

"But I am also not going to lie about it. I am not at all happy with the way I was treated, and I do not think this was the very best way to handle a transition--not the best for Tesla Motors, not the best for Tesla's customers (to whom I still feel a strong sense of responsibility), and not for Tesla's investors."

Another post from the same person said that the employees threw him a party and that he left in tears. The news was first reported, I believe, on Earth2Tech. At least that's where I saw it.

We don't know if the note is from Eberhard, but he is no longer on the board of directors. The choice of "non-disparagement agreement" is a bit weird. Never heard that term. On the other hand, the other posts from this person point to Eberhard. He talks about taking test drives near the company facility and a talk at Stanford. He's been posting since August. So it looks pretty real.

Founders and companies often part in ugly ways in Silicon Valley. The visionaries who come up with new companies aren't great at the logistical tasks, like coming out with products on time. There are exceptions--Bill Gates, Michael Dell--but if you look at a lot of companies, you won't see the founder in the CEO slot.

Getting a car company off the ground, moreover, is a logistical nightmare. Just think of the manufacturing facilities you have to organize. Tesla had to delay releasing its car in the summer of 2007, pushing it to the first quarter of 2008, and it cut back the first year of production. The new CEO is Ze'ev Drori.

Before Tesla, Eberhard founded NuvoMedia, which tried to make electronic books. Few consumers bought them, but Gemstar snapped up the company amid dot-com fever. Eberhard used his millions from that deal to found Tesla.

I woke up today ready to write a story on the three-wheeled electric cars coming from Venture Vehicles when a question dawned on me. How many electric car and plug-in start-ups are there in the world today?

Electra glide in silver

(Credit: Zenn Motors )

I count 16. They are: Tesla Motors (sports cars), Wrightspeed (sports cars and plug-in drivetrains for trucks), Fisker Automotive (electric sedans), Zap (low-speed and sports cars), Miles Automotive (low speed), Zenn Motors (low speed), AC Propulsion (retrofitting Scions for electric), Phoenix Motorcars (SUVs), Aptera (three-wheelers), Porteon (low speed electrics), Lightning (sports cars in England), Reva (economy cars), Ultramotor (electric trishaws), Myers Motors (freakish three-wheelers featured in Goldmember), Think (electric economy cars) and Venture Vehicles (three-wheeled electric cars.).

You'll see photos and video of Venture's car next week. The test drive was a hoot.

That doesn't even count the major car companies--GM and Nissan--committed to coming out with electric cars and plug-ins, or the people doing diesel hybrid buses. And there are also the three electric scooter and motorcycle guys: Zero Motorcycles, Vectrix and Brammo. And it doesn't count the golf cart guys. Or the battery guys like Altair Nanotechnologies.

Again, if I missed you and your grandmother's car company, forgive me. These are just the ones I've written about and can recall. History shows that most of these companies will be wiped out. Most car start-ups never get far, in part because of the outrageous capital costs involved in tooling up factories. But there are a lot of good ideas out there.

Fisker Automotive. Think of it as a marriage between the Chevy Volt and the Tesla Roadster.

The company is planning to come to market in about 18 months with a high-performance, high-end, plug-in hybrid sedan. The car will cost $80,000. It will go about 50 miles on a battery charge, which isn't far, but the car will also come with a built-in gas engine that exists primarily to charge the battery. With the charging capability, the car can go hundreds of miles, according to Henrik Fisker, the company's CEO.

With a range of hundreds of miles, the car will go farther than other electric cars coming to market. The new electric cars go only about 225 miles on a single charge at best. Granted, Fisker's car uses a little gas--something electric cars don't--but it won't burn much. This is how the Volt functions. General Motors, however, doesn't plan on coming out with the Volt until 2010. If Fisker hits its goals, it will have cars on the market in 2009. Fisker, though, is also aiming at the luxury end of the market with its alternative car, which makes it like Tesla. Its tag line is "Eco-chic."

Fisker also hopes to come out with SUVs and other types of cars. The drive train comes from Quantum Technologies, by the way. Quantum works with a number of companies and government agencies on alternative fuel vehicles. Initial production will be about 15,000 vehicles a year.

The company will show off a prototype at the Detroit Auto Show, according to the company's somewhat cryptic Web site.

In this day and age, it seems everybody has started an alternative car company. There is Tesla, Miles Automotive, Zap and Venture Vehicles. Everyone but my grandmother, and that's because we took her license away.

But Fisker does have something a lot of these other companies don't. Namely, experience in the auto industry. Henrik worked for years at Ford and BMW. He came up with the BMW Z8 and the Aston Martin DB9.

Thanks to Greg King of Wostec for pointing out the Fisker presentation at the Dow Jones Alternative Energy Innovations Conference taking place in Redwood City, Calif., this week.

The cozy relationship between car dealerships and automakers will have to be changed for electric cars to take off, theorized venture capitalist Jennifer Fonstad.

A managing director at Draper Fisher Jurvetson, Fonstad said that Detroit automakers have created an environment--through discounts and volume buying--that make it tough for new, electric car companies to squeeze into the market.

"The tipping point will be breaking the Detroit model," she said at the Alternative Energy Innovations Conference in Redwood City, Calif. Tesla Motors, which DFJ invested in, is already trying to "change the way cars are bought and sold." It will sell cars through company-owned dealerships.

She has a point, to a degree. Car dealers do have tight relationships with their manufacturers. Also, oil companies have found ways, through contracts, to keep ethanol out of their service stations.

Then again, the performance and range of electric cars in the past has often been an issue. Both Ian Clifford (CEO of Zenn Motors) and Elon Musk (chairman of Tesla Motors) have both said that, and they both are advocates of electric cars. Zap (and Zenn) sell electric cars now, but they don't hit freeway speeds, for instance.

As a result of some of the limitations of electric cars, Fonstad said that auto companies will have to educate potential customers that not all electric cars will perform the same way as traditional cars. They may not go as far, so when people buy them they can't keep the endless road trip in their mind.

Nissan, which hopes to come out with a fully electric car in about five years, has already said it needs to kick off the educational process.

As part of its effort to get its first cars out of the door, Tesla Motors is putting its battery business on ice for a bit.

(Credit: Michael Kanellos/CNET Networks)

The electric car company back in January said it was going to sell its battery pack--composed of thousands of lithium-ion battery cells--to third party manufacturers. Interim CEO Michael Marks, however, made the decision to suspend the program in September when he also decided to push out the release of the car and scale back production a bit. Although a few Tesla Roadsters may come out this year, the bulk of the first cars will come out next year. Fifty are due in the first quarter. The delays in the battery program, however, were not flagged then.

Tesla's first and so far only announced customer was going to be Think Global, which is trying to come out with an electric town car.

"We delayed the program with Think until we had roadsters on the road," said Darryl Siry, vice president of sales and marketing at Tesla.

As a result, Think has been lining up alternative battery suppliers. A deal with EnerDel was announced yesterday. EnerDel will be the "supplier of choice" for Think.

It is unclear if the switch in battery providers will delay Think's car, but it could. It's a major change. In September, the company told The Norway Post that it wanted to get the initial cars out in November. Think has made cars with other types of batteries--the company grew out of a dying electric car project from Ford. EnerDel won't deliver prototypes until next March and preproduction batteries until July 2008. Still, Think is not aiming to get large numbers out of the factory at first anyway. The company in July, a few months before Tesla changed management, said it only planned to start producing 250 cars a month by mid-2008.

On a happier note for Tesla, it has also started to let customers who have put down deposits on the $98,000 Tesla Roadster take test drives with the latest prototype. They are doing 12 a week and many of the drivers are posting blogs about the experience (see link above). The test drives are taking place in the Skyline Drive and Highway 84 area. You know, the Alice's Restaurant intersection in the Bay Area.

Despite a few nitpicks here and there, the reviews are all fairly positive. (I've ridden in one and they are a lot of fun, particularly the subtle "whoosh" sound the electric engine makes.)

"I've certainly faced some raised eyebrows at my decision to write a check for $100,000 to purchase a car I've never driven, so if nothing else my thrilling test drive of VP10 was worth it just to explain that I have been behind the wheel, and come away impressed," wrote Josh Hannah.

Hannah, though, did get passed by a Subaru Roadster. He wanted to be cautious.

No entries yet from Sergey, Larry, George Clooney or San Francisco Mayor Gavin Newsom yet, who have all allegedly put down deposits.