electric cars

Enterprise and FedEx: Bullish on electric cars

July 13, 2011

The company that owns more cars than any other in America is buying more electric vehicles.

Andy Taylor, who is chairman and chief executive officer of Enterprise Holdings, which owns the flagship Enterprise Rent-A-Car brand as well as Alamo Rent A Car and National Car Rental, said at a Washington energy forum today that the company is expanding its offerings of electric cars as fast as it can.

Andy Taylor of Enterprise Holdings

“We are finally getting the vehicles in some numbers,” Taylor said, at the National Summit on Energy Security, where he and Fred Smith, chairman, CEO and president of FedEx Corp.

Smith, too, made an impassioned plea to electrify the U.S.’s cars and light trucks. If the goal is to displace imported oil, Smith said, “there has never been a technology that offers this much opportunity,” he said. [click to continue…]

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What’s the true cost of an electric car?

April 19, 2011

 

An electric car motorcade

Detroit’s the Motor City. California’s car culture is unsurpassed. But when the electric car industry staged an “innovation motorcade” of electric cars and trucks today, it did so in Washington, D.C.–fittingly, because, without the government, there would simply be no electric car industry.

Indeed, the market for electric cars is so distorted by government subsidies that it’s all be impossible to determine the true cost of an electric car.

Notice that I said cost and not price; there’s a difference, and it’s relevant to any conversation about business and the environment. Coal-powered electricity is cheap but the price doesn’t reflect the costs of burning coal, including lung disease, mining accidents and greenhouse gas emissions. (See Fossil Fuels: A Legacy of Disaster from the Center for American Progress.) Hamburgers are cheap but the true cost of beef includes methane emissions, farm subsidies and, arguably, heart disease. Gasoline-powered cars externalize costs that include smog, carbon emissions and, some would say, a foreign policy that favors stability, i.e., autocracy over democracy in the Middle East.

Markets, needless to say, work better when prices reflect true costs.

So what’s the true cost of an electric car? Hard to say. Sticker prices are high–Chevrolet’s Volt has an MSRP of $40,280, while the Nissan Leaf is priced at $32,780–but buyers get a $7,500 tax credit that reduces the cost. The government even gives tax credits to buyers of the $109,000 Tesla Roadster.

The tax credits are merely the most visible form of federal support. [click to continue…]

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Must-see TV: What’s wrong with our energy policy?

April 9, 2011

Today, few words but a couple of videos instead, one from the left and one from the right (because we strive to be nonpartisan here at www.marcgunther.com).

The first, from the activist group Rainforest Action Network, is about the tragedy of mountaintop removal coal mining. RAN is running a campaign against banks that finance mountaintop removal, notably PNC, Citi and UBS. More here.

One thing I learned from the video: MTR coal accounts for just 7% of the coal burned in the U.S. Is this really necessary?

The second one-minute video comes from the conservative end of the political spectrum, namely, Fred Smith, the founder and CEO of FedEx. An advocate of electric cars, Smith is bothered by America’s dependence on imported oil.  He’s got a business agenda of course–high oil prices hurt FedEx–but the benefits of electrifying the U.S.’s transportation sector go well beyond cost to include reduced greenhouse gas emissions, air pollution and national security:

Thanks to Mitch Jackson for posting this on the FedEx blog. More info here. I’d encourage Fred Smith to talk to some of his Republican friends about why the threat of climate change is worth taking seriously.

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GM’s sustainability chief: charged up about the Volt

March 23, 2011

Outside the door to General Motors’ Washington office is a photo of the Chevy Volt framed by the U.S. Capitol.

GM loves to market the Volt, the 2011 Motor Trend Car of the Year (“A car of the future you can drive today.”) It’s an engineering breakthrough, a darling of the “green” media and evidence that stodgy old GM knows how to innovate.

So why, I asked Mike Robinson, GM’s vice president of environment, energy and safety policy, is GM selling so few Volts? Just 321 in January, 281 in February, according to GM’s monthly sales report. By comparison, Chevy sold nearly 70,000 Silverado pickup trucks during those two months.

“We’re on target,” he assured me. “We’ve probably got orders for every one we can build in the next year.” Chevy plans to sell 10,000 Volts this year, and another 45,000 next year and, if all goes well, a lot more after that.

“This is not a science project,” he said. “We really want to build a mass-market vehicle. We  believe that electric cars are a better long-term solution than pure gasoline.”

Strong words from an executive at GM, which remains the No. 1 automaker by sales in the U.S., selling 2.2 vehicles last year. If GM believes in electric cars, chances are we’ll be seeing many more of them in the years ahead. [click to continue…]

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Charge it! The challenge facing electric cars

March 21, 2011

With all the dismal environmental news of late–from the nuclear crisis in Japan to the Republican attacks on EPA in Congress–it will be a pleasure this week to turn my attention to one of the most exciting developments on the sustainability front: the arrival of electric cars in the U.S.

To be sure, the sales figures so far for the Chevy Volt and Nissan Leaf are tiny–Chevy sold 281 Volts in February and Nissan sold fewer than 100 Leafs–but both vehicles are, for now, available only in limited quantities and locations. What’s more, there are few places outside of their homes for owners to charge the cars.

On Thursday, I’ll be moderating a free webinar on the charging issue for The Energy Collective. It’s called The eMobility Challenge: Electric Cars and How to Keep Them Charged, it’ll be held at 1 p.m. ET/10 a.m. PT, and your can sign up here. We’ll take questions from listeners throughout the hour. Here’s info on details and panelists:

Electric vehicles offer a major opportunity for more energy-efficient transportation, as well as reduced dependency on carbon-producing fuels. However, the cars themselves are only half the solution. We must create a new charging infrastructure to get those cars the power they need. [click to continue…]

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CODA electric cars, charging ahead

January 12, 2011

CODA sedan

No one said it would be easy for CODA Automotive, the California-based startup that makes all-electric cars and battery systems.

Two months ago, CODA delayed the introduction of its first car and said that its dynamic chief executive,  Kevin Czinger, was stepping down. Even before then, pundits wondered whether the company could survive (here and here).

When, after all, was the last time a U.S.-based startup broke into the capital-intensive automobile industry?

But, while CODA has a tough road ahead, it turns out that some smart money is betting on the privately-held firm: Last week, CODA announced that it raised another $76 million and brought in two new venture investors, Harbinger Capital Partners and Riverstone Holdings. Previous investors include Hank Paulson, the former treasury secretary and CEO of Goldman Sachs; Thomas “Mack” McLarty, Bill Clinton’s former chief of staff, whose family owns auto dealerships; and John Bryson, the former CEO of Edison International.

The company has now raised about $200 million, and hopes to raise another $50 million soon, says Steven “Mac” Heller, an investor, co-chairman of the board and now the company’s interim CEO. Heller spoke today (on a panel with GE’s Jeff Immelt) at the Brookings Institution, and we sat down afterward to talk about CODA. [click to continue…]

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“Where is Noah’s ark to save human beings?”

December 23, 2010

BYD's e6 electric car

Great companies have a purpose that goes beyond making money. Google wants to organize the world’s information. Walmart seeks to save people money so they can live better. The Walt Disney Co. tries to make people happy. (Or at least it used to; Disney’s current mission statement is a bunch of gobbledygook.)

Purpose matters. It’s a big reason why people go to work every day.

BYD, the Chinese company that makes electric cars, batteries and solar panels, has a grand purpose: It wants to save us all from climate change, which it calls “slow suicide.”

In a new company video (below), BYD says:

Glaciers are melting. Sea levels are rising. Who can guarantee that the next victims won’t be us?

Where is Noah’s ark to save human beings?

Where, indeed?

I’ve been fascinated by BYD — the letters are the initials of the company’s Chinese name, but they have come to stand for Build Your Dreams — since writing a FORTUNE cover story about the company in 2009. Two years ago, I visited BYD in Shenzhen, met with its founder and chief executive, Wang Chuan-Fu, and spoke about the company with Warren Buffett, Charles Munger and especially David Sokol of Berkshire Hathaway, who sits on the BYD board. Through its MidAmerican Energy subsidiary, Berkshire Hathaway bought 10% of BYD for $230 million in 2008. Despite some recent stumbles at BYD, the company’s market capitalization has grown to about $33 billion, so Berkshire’s stake is now worth about $3.3 billion. Not too shabby.

Lately, I’ve been in contact with  U.S. investors  who are bullish about the firm. One of them, Shai Dardashti, a Buffett admirer who runs a small money management firm, pointed me towards this seven-minute company video. It’s worth watching (although it ends abruptly for reasons that I haven’t been able to determine).

This video is fascinating in light of  BYD’s remarkable but brief history. Since 1995, it has evolved from a manufacturer of cell-phone batteries into one of China’s largest automobile companies and it is now making a major push into clean energy, both with the manufacturing of solar panels and  utility-scale batteries to store energy. (For more on BYD’s energy storage plans and MidAmerican Energy, see Warren Buffett’s Big Battery Play at GreenBiz. Recently, the city of Los Angeles’s Department of Water and Power (LADWP) and BYD said they would work together to develop a grid-scale battery project for renewable energy storage. [click to continue…]

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How electric cars will save you money

September 23, 2010

If you are someone who watches your dollars and cents, you probably don’t own a plug-in hybrid. Sure, they deliver good gas mileage but it’s not good enough to offset the higher sticker price needed to cover the costs of the battery. (That’s why I own a Honda Fit.) Cars like the Toyota Prius and Honda Insight are expensive ways to say, ‘I’m green.’

Nissan Leaf

Electric cars are another story, and that’s why the arrival of the Nissan Leaf and the Chevy Volt in just a few months could become a watershed moment for the auto industry, as well as for the environmental movement. Unlike the Prius, the Leaf and Volt are not aimed at the early-adopter, eco-conscious, well-to-do niche buyers on the coasts and in places like Amherst, Ma., and Ann Arbor, Mi. They are being built for the mass market.

The economics make all the difference.

That, at least, is my takeaway from a discussion about electric cars held earlier today at a Washington Post Live event called Energy Now. (Video will be posted on the site, the newspaper says.) The panel was stacked with electric-car enthusiasts–Tony Posawatz from Chevy, Carlos Tavares of Nissan, David Crane of NRG Energy, David Vieau of battery-maker A123 Systems and a lone skeptic, Alan Crane of the National Research Council. But with the exception of Alan Crane, they all argued that electric cars will be not only fun to drive, not only convenient (because you don’t need to drive to a gas station to refuel) and not only good for the climate and for U.S. energy security, but also cheaper to own over the life of the car.

Chevy Volt

That’s essentially because (1) electric car engines are more efficient than internal-combustion engines and (2) generating electricity from a big coal, natural gas or nuclear plant is more efficient than burning gasoline in millions of cars.

This isn’t a new argument. I’ve heard it from people like David Sokol of Berkshire Hathaway and BYD, and from Shai Agassi (See Electric cars: all systems go) but David Crane’s explanation today laid out the math in clear terms.

Describing NRG’s plans in Houston (see Why the Petro Metro wants electric cars), Crane said the NRG-owned utility company, Reliant Energy, is working with Nissan and plans to offer Leaf owners an all-you-can-eat model for buying electricity to power the car. Here’s the selling proposition:

First, NRG would buy and install a Level 2 car charger for the home. Those are worth $1,500 to $2,000, Crane said, and they can fully charge a Leaf, which has a range of about 100 miles, in four to eight hours. “You come home from work, you plug it in, and in the morning it’s ready to go again,” he said. Second, NRG will build a network of charging stations around the city of Houston. “At no point will you be more than five miles away from a fast charge,” he said. )The business model for sustaining the stations remains uncertain.)  Third, NRG will offer  unlimited mileage for three years at a price still to be determined, but estimated at $70 to $80 a month, added to the utility bill. After the three years, the price would drop because by then NRG will have recouped the cost of the charging station and would only need to pay for the electricity.

So how does the math look? At $80 a month, fuel costs for the Leaf would be $960 a year. By comparison, assume that you drive a conventional car 15,000 miles a year and get 20 mpg. You’ll buy 750 gallons of gas. At $2.58 per gallon, the current average price on the Gulf Coast, you’ll pay just under $2,000 a year.

You can challenge my assumptions, but that $1,000 a year in fuel savings will over time offset the upfront cost of the Leaf, which is roughly $25,000 after a federal rebate in most places and $20,000 in California which offers a state rebate as well. If gas prices rise, the deal looks sweeter. It looks better yet if, as seems likely, the costs of batteries (and the sticker price) falls.

Then there are the psychic benefits. A123′s Vieau said the company has already hired 300 people at the battery-making plant it just opened in Livonia, Mi., and expects to hire many more. “We’re shifting dollars spent on oil overseas to create jobs at home,” Vieau said.

People who care about the environment, meanwhile, can take pride in the fact that they are driving cleaner cars.

“American’s want to make a difference if they can,” NRG’s Crane said. “Look at the organic food business.”

Now, a couple of caveats: Today’s electric car business is heavily subsidized, it must be noted. Buyers get tax breaks. Battery maker A123 got a $249-million stimulus grant, a federal loan guarantee and state subsidies and Nissan was given a $1.4 billion energy department loan guarantee to retool a plant in Smyrna, Tennessee. GM, of course, got bailed out.

The second caveat is that it will take years for electric cars to have a major impact. The Chevy Volt will be available in only seven states at first, Posawatz told me that Chevy will make only “thousands” of the cars in the first model year, and “tens of thousands” after that. “If the demand is there, we’ll keep building more,” he said.

Nissan will make about 60,000 Leafs in  Japan during 2011, for the world market. Nissan had been taking pre-orders for the Leaf on its U.S. website, but stopped today because 20,000 have been ordered. The company will be able to build more starting late in 2012 when it opens the Smyrna plant, which has a capacity of 150,000 units a year.

To put that in context, there are more than 250 million cars on the road today in the U.S.

Still, I received an interesting 62-page report earlier today from HSBC Research called Sizing the Climate Economy. (If you Google it, you can download a PDF.) Its best guess is that the market for low-carbon vehicles — essentially, electric cars — will grow to $473 billion worldwide by 2020, making low-carbon transport business a bigger investment opportunity than low-carbon energy.

Electric cars, in other words, are going to be a very big deal.

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A super light prize-winning car

September 16, 2010

The Edison2 Very Light Car

Here’s a surprise: The biggest winner in the $10-million Progressive Insurance Automotive X PRIZE competition, which is designed to inspire a new generation of low-polluting cars, is not an electric car, but a car that weighs less than 1,000 pounds and is powered by an internal combustion engine.

The car is known, fittingly, as the Very Light Car #98, and it won the $5 million prize in the “mainstream” category, which required cars to seat four people, run on four wheels and have a driving range of at least 200 miles. The Very Light Car runs on E85, a blend of ethanol and gasoline, and it was built by a team known as Edison2, led by a German-born entrepreneur named Oliver Kuttner and based in Charlottesville, Va.

The Edison2 Very Light Car bested 111 competing teams and 136 cars from around the world. All sought to build practical safe and super fuel-efficient vehicles capable of achieving 100 miles per gallon or the energy equivalent—a threshold that the Very Light Car just managed to achieve, performing at 100.3 MPGe.

The team that developed the Very Light Car, which includes race car drivers who have won at  Le Mans, Daytona, and Sebring winners, decided to stick with an internal combustion engine because batteries add weight, as well as cost. While praising electric cars as “here to stay” on its blog, Edison2 says:

Currently, however, electrics cars have real issues. Batteries are heavy, big and costly. With electric drives cars get heavier, performance suffers and costs go up.

Kuttner, a race car driver, said the car, which is made of low-cost and recycleable materials, could potentially go on sale for $20,000 – if it reaches the market. There are no current plans for mass production, but Kuttner said he’s talked with several big companies, including General Motors, which tested the Edison2 in its wind tunnels. One obvious hurdle to be overcome is safety–the car isn’t equipped with air bags or other standard safety features and, presumably, it would come out on the losing end in a crash with a much heavier car or truck.

Li-Ion Wave II

Two battery-powered cars each won $2.5 million each in prize money. Li-ion Motors Corp.’s Wave II, built by a startup based in Charlotte, N.C., won in the “alternative side-by-side” category with a car that delivered 187 MPGe. This category included two-seaters where the driver and passenger sit side by side.

A car known as the E-Tracer 79, built by a Swiss company called X-Tracer and created by Arnold Wagner, a former SwissAir jumbo jet pilot and aircraft designer, won in the “alternative tandem class.” This category also includes cars that seat two people, but one can sit behind the other. While the E-Tracer may look more like a motorcycle than a car (see below), it has two additional wheels that fold into the car; they drop down at slower speeds to provide stability.

The E-Tracer was the efficiency king of the competition, registering an eye-popping 205.3 MPGe. (Results were verified by experts including U.S. Department of Energy labs.) It looks like the E-Tracer could be fun to drive, too!

X-Tracer's E-TracerThis morning, I attended the X-Prize awards ceremony, which was held outdoors in Washington and, oddly, featured a bunch of dignitaries, including House Speaker Pelosi, long-winded Congressman Ed Markey, and a DOE official, most of whom had little or nothing to do with the prize.

The contrast was unintended but hard to miss—between a national government that is paralyzed when it comes to climate and energy, and the inventiveness, creativity and energy of startups, engineers and entrepreneurs unleashed by a mere $10 million prize, which amounts to chump change in the federal budget.

Offer the right incentives, in other words, and human ingenuity can do wonders.

“We’re living in a day and time where literally anything is possible,” said Peter Diamandis, the X PRIZE Foundation Chairman and CEO. “A man or woman can go out and build a spaceship or a 100 mile per gallon car. This is only the beginning.”

Not to belabor the point, but neither of the government-backed automakers, GM or Chrysler, got into the contest.

Then again, the winners are in no sense amateurs or garage mechanics. The aerodynamic steel frame of the Edison2 car, for example, was designed by Barnaby Wainfan, a Northrop Grumman aerodynamics fellow, while the head designer for the team was Ron Mathis, who worked on the R10 for Audi Sport North America. The X-Prize judges said of the car:

More like an airplane than a car, Edison2 uses a highly innovative light-weight, low mass hub-mounted suspension for its aerodynamically flared four wheels. Its low total mass of 830 pounds – nearly a quarter of the average car weight- is a tribute of engineering strength and packaging utility.

Let’s hope Diamandis is right that this is just a beginning. The X-Prize’s first prize, for personal space transportation, gives reason for hope: It was awarded in 2004, and has since inspired an industry. Just today, Boeing said it has plans to fly tourists into space.

Below are a couple of snapshots I took at the X-Prize ceremonies. If you are reading this on Thursday, you can watch a one-hour documentary called “X PRIZE Cars: Accelerating The Future” tonight (September 16) at 9PM ET/6PM PT on the National Geographic Channel.

The Edison2 Very Light Car

E-Trace

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Why the “Petro Metro” wants electric cars

March 2, 2010

Why on earth would Houston, the city of drill-baby-drill, the fossil-fuel capital of America, the city whose NFL franchise used to be called the Oilers, embrace the electric car? For good reason, it turns out–so says the city’s mayor, the local utility company, Reliant Energy,  its parent company NRG Energy and NRG’s CEO, David Crane.

“Houston’s not a natural market for electric cars,” Crane admitted, when we met the other day. “But electric cars are good for our business in all kinds of ways,” he added. So NRG and Reliant is working with officials Houston, America’s 4th largest city, to persuade Nissan to make Houston one of the leading launch markets for the Nissan Leaf, the all electric vehicle that the Japanese automaker plans to start selling later this year.

Houston's skyline at night

Houston's skyline at night

“We are the Petro Metro, but we are also a car city,” said Houston’s newly-elected mayor, Annise Parker, at an event earlier this month to welcome Nissan to the city. Certainly there’s a sizable market awaiting Nissan in the city. Houston is home to 4.5 million vehicles that travel 86 million miles a day, according to Reuters.

The problem for Houston–and for most other cities that want to welcome electric cars–is that it lacks an infrastructure of charging stations where electric car owners can fill up their cars with, er, electricity. This winter, Nissan took the Leaf on a three-month, 24-city tour designed to spark excitement about the car, a five-passenger car that the company says will travel about 100 miles on a single charge.

But because the Leaf will be produced in limited numbers, at least at first, the tour was also a way for Nissan to solicit partners, mostly cities and utility companies, that will assume the costs of building charging stations that will allow electric car drivers to overcome what is known as “range anxiety”–the feeling that they might run out of electricity without a charging station nearby. [click to continue…]

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