Electric Cars Ready To Charge

Sparksflew in the electric-car market last week, capped off Friday byPresident Obama's short test drive of a Chevy Volt while visiting aGeneral Motors plant in Michigan.Obama's visit came as GM andNissan OTCBB:NSANY race to the finish line. GM's hybrid plug-in Voltand Nissan's all-electric Leaf are expected to hit select U.S.showrooms later this year.
They're leading the vanguard of a newgeneration of electric cars aimed at a relatively broad consumermarket. Plug-ins from Ford (NYSE:F - News), Toyota (NYSE:TM - News), Honda (NYSE:HMC - News), Chrysler, Mercedes-Benz and BMW are expected to follow starting in 2012.
"Webelieve within three years every auto manufacturer will have at leastone plug-in vehicle," said Mark Duvall, director of electrictransportation for the Electric Power Research Institute.
AsNissan and GM unveiled new pricing and other details on their EVsearlier in the week, suppliers of battery chargers and other relatedgear flooded a "2010 Plug-In" conference in San Jose, Calif.
"Probablya quarter of the exhibitors were (companies) you've never heard of whocame out of the woodwork with electric car chargers," said John O'Dell,editor of Green Car Advisor, part of auto site Edmunds.com.
Twoleading charging suppliers are Coulomb Technologies and Ecotality(SCM:ECTY), the latter a small-cap that listed on the Nasdaq in May.
Nissan's Leaf has a 100-mile range on a full charge; it has no tailpipe and zero emissions.
TheVolt's 400-pound battery can power up to 40 miles of driving. It'sbacked with a small gas engine that can bring the total range to 340miles. Obama proclaimed his 10-foot-long test run "smooth."
Obama has said he would like to see 1 million electric vehicles on the roads by 2015. But that may be a steep hill to climb.
Duvall says the president's goal may be achievable and if so "would establish the technology firmly in the market."
Buteven the popular Prius hybrid from Toyota has logged fewer sales thanthat in the U.S. — 900,000 — over the entire 10 years the model hasbeen on the market.
And though analysts see EV demand outstripping supply, that's largely because carmakers are moving slowly.
GMplans to roll out only 10,000 Volts in the first year. On Friday, itraised its planned 2012 production from 30,000 to 45,000.
Nissansays it'll start selling Leafs in California, Washington, Oregon,Arizona and Tennessee this year, with more states in 2011. The Leaf hasa waiting list of 17,000. Nissan will sell 500 Leafs to rental-carcompany Enterprise.
"It will be a long, slow ramp up," said Philip Gott, managing director of IHS Automotive Consulting.
Gottdoesn't expect a significant EV market in the U.S. for at least adecade. He estimates pure electric cars sold in the U.S. will go fromjust 30,000 in 2011 to 135,000-140,000 in 2016. That's a tiny fractionof the 12 million cars that came off U.S. assembly lines last year — orthe industry's heyday of 16 million.
EV Sticker Shock
GMannounced last week it would list the Volt at $41,000. The Leaf willsell for around $33,000. Neither price includes a $7,500 federal taxcredit. Further credits from some states such as California would makethe final tally even less.
Still, low-emission, high miles per gallon conventional cars have smaller sticker prices.
Leasingplans make the EVs more widely affordable. GM said it would lease theVolt for as low as $350 a month with $2,500 down, roughly matchingLeaf's offer. Nissan says the Leaf would match the Volt's eight-year or100,000-mile lithium-ion battery pack warranty.
While electricpower is about a quarter of the cost of gas per mile, Duvall says EVmakers' big challenge will be to cut upfront costs so that thelong-term expense to own and operate will be less than for regularcars. "That can happen in as little as five years, but more likely in10 years," he said. "The first year for a new car design is always themost expensive, but it's worst for the Leaf and Volt because they havethe new technology."
He added, "Over time, (carmakers) will learnhow to do this more cost effectively and you will see the cost of thecars come down."
Let's Make Money, Eventually
Lowerinput costs and higher sales would mean that plug-ins would go frommoney losers for automakers to profit makers, analysts say. How longthat will take is unclear.
California-based electric car makerTesla Motors (NMS:TSLA), which went public in June, has sold over 1,000Roadsters worldwide since 2008, each costing over $100,000. It has yetto make a profit. A Model S sedan for about half that price after taxrebates is slated for a 2012 launch.
A few carmakers tried electric cars in the 1990s, most notably GM with its EV1.
But they never gained much traction due in part to limited battery power — and cheap gas. GM discontinued the EV1 in 2002.
"Whatyou have today is a confluence of technology development meeting therecognition of a need at some point in the near future to reduce ourcarbon emissions," Gott said.
By 2030, Gott says, electric cars, including hybrid plug-ins like the Volt, could make up 20% to 30% of the global auto market.
InEurope, Renault will soon release the Fluence EV sedan and a tiny EVtwo-seater called the Tweazy. BMW already sells the E-Mini.
Japanhas an aggressive campaign to expand EVs, especially taxis. China stillhas relatively few EVs; the government is "dabbling" in EVinfrastructure investments, says Michael Robinet, vice president atmarket researcher CSM Worldwide.
"If China decided electric isthe preferred mode, it could make a tremendous impact on the rest ofthe world," he said. "I think it will be something in the middle, amixture between gas and battery."
Cracking The Electric Egg
Toaddress the "chicken and egg" issue in the U.S. — selling electric carsbefore enough chargers are around to keep them going — governmentincentives are fueling development of battery stations in severalregions coast to coast.
Charging stations are going in parkinglots and outside government agencies, apartment complexes, grocerystores and other retail spots.
These "opportunity chargers" aremeant for top-offs rather than full-blown charges, most of the latterlikely to be done at home using common 120-volt household outlets. Witha 220-volt, the charge time is cut from eight hours to four.
Someretailers are starting to put chargers outside their stores, includingWhole Foods' (NMS:WFMI) flagship in Austin, Texas, and the South CoastPlaza mall in Costa Mesa, Calif.
"The fact chargers will be outin large numbers in various regions diminishes range anxiety" — thefear of being stuck on the road without any power, said O'Dell.