As with most things, there is a right way and a wrong way to go about electric vehicles. Last Friday Ian Wright and I spent a couple of hours around my conference table discussing our philosophies on electric cars. Ian knows something about this topic, as he was formerly an executive at EV startup Tesla Motors, and is now the founder and CEO of Wrightspeed, a Silicon Valley based startup whose first car is going to be a high performance electric supercar, price tag just shy of $200K. And as it’s electric, Ian expects it should outstart, outrun, outturn, and generally outperform anything in its class.
While it has been a hot topic recently in the cleantech sector, I am known among my friends as being a real skeptic when it comes to EVs, but behind Ian’s business plan he got my attention with two ideas that are worth repeating: payback and plug-ins.
First, Ian doesn’t care about gas mileage per se – he cares about performance, power, and most importantly, payback. Focus on the vehicles actually burning the most gas, irrespective of fuel efficiency. That is, instead of making tiny, compact, fuel efficient target cars more efficient with EV and hybrid technology – focus on the gas guzzlers. Ian’s point is well taken. A small, fuel efficient car that gets 35 mpg and drives a typical 12,500 miles per year only uses about 350 gallons per year. A large pickup truck that gets 12 miles to the gallon uses over 1,000 gallons for the same mileage – nearly 3x as much. And if that truck is a work truck driven 25,000 miles per year, it would use over 2,000 gallons of fuel per year, nearly 6x the little car. That truck owner may spend upwards of $50K in fuel over its life, where the commuter car owner may spend a small fraction of that.
When I asked him for comments on my example Ian added: “The special case of congested city driving might be worth mentioning, since everyone thinks a lot of fuel is wasted there. But if you drive a Prius 10 hours/week in congested city traffic, it’s only about 150 gallons/year! Not much point in trying to improve on the Prius for that use. (The arithmetic: congested traffic is defined as 12mph average; 10 hours/week would be 120 miles/ week, or 6240 miles/year. The Prius shines in this application, getting maybe 40mpg, so 156 gallons/year.)”
Putting expensive hybrid and EV technology in the small car not only has a worse financial payback – compounding the perennial problem of EVs being too costly, but the same 20% efficiency improvement does very little to reduce overall fuel consumption for society compared to the same efficiency gains in a big truck that drives a heck of lot of miles.
So Ian asks, if we want to both find a way to save car owners money, AND save the world – wouldn’t we focus on applying technology to where the problem is the worst and the returns are the best?
When Ian looked at the automotive landscape and asked the question, where is the most fuel being burned, and how do we reduce that with technology? The answer? Performance cars and big work trucks. Not surprisingly, these are his target markets.
And why are high performance vehicles like sports cars and Ford F350s so fuel inefficient anyway? Take this as an example answer. If you need a big truck to have lots of power for short periods of time (for instance, in towing), then the truck engine and systems have to be sized to deliver the maximum power. But anytime you’re not using all that power (ie, most of the time), the truck is usually running well below its optimum – and burning lots of fuel for no extra gain. It’s the same rationale for a sports car designed to run optimally at 90 mph, which performs worse at the average driver’s speed of 50- 60 mph.
Ian’s more detailed explanation to me put it very elegantly: “Roughly speaking gasoline engines are most efficient at wide open throttle and the rpm that gives max torque. If you try to operate a supercar at wide open throttle, it will be doing 200mph, and of course you’ll be losing most of the energy to aero drag. The ENGINE will be operating efficiently… but if you operate the car down where aero drag is reasonable – 50mph – then the engine will be operating at a few percent of rated power, and very inefficient. Why is it inefficient? The simple answer is that since the throttle is almost closed, there is almost a vacuum in the intake manifold, and the EFFECTIVE compression ratio is very low. You are trying to compress a vacuum. Engine efficiency is very dependent on compression ratio.
80 years ago, there were cars that could transport a family of 4 at 50mpg. The Austin 7 comes to mind. Engine technology has improved dramatically since the 30s, yet the best modern cars don’t do any better than the Austin 7. Why is that? One big reason is that the Austin 7 had, well, 7 horsepower (actually about 10hp – the “7” was “RAC hp”). So it was working hard most of the time. The family car that my wife drives makes 250 hp, and that’s just an average family car these days.S o if you displace the Prius with an EV, you can get maybe a 2x efficiency gain. But if you displace a high performance vehicle that operates most of the time at low power settings, you can get a 10x efficiency gain. That’s the main reason that 18 wheelers aren’t a good target. They have powerful engines, but their power/weight ratio is very low (when fully loaded) and the engines work pretty hard. So in fuel per lb mile, they are pretty good already.”
To deal with this issue, Ian isn’t all about the all electric. He’s pushing plug-in electric hybrids. Electric motors powered off of batteries charged from the wall or with an onboard diesel generator. The generator also acts as a booster for those times when extra power is required. Hybrids are really good at solving these power vs. efficiency problems, since you can essentially design a system that can optimize for either performance or efficiency much easier than a straight gas or electric engine could.
Ian’s vision also addresses one of the long running achilles’ heels of electric cars – the lack of fueling infrastructure. Regardless of your feelings on the matter, it’s generally bad business to try and bet on an expensive infrastructure rollout. And if it means slower and lower uptake of fuel efficient vehicles, then calling for infrastructure change that’s not going to happen is bad for the environment, too.
That’s why I’ve been such a big fan of plug-in hybrids. We can have our cake and eat it too. It’s all about payback and plug-ins. And it’s good to see electric car gurus finally getting this message.
Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Author for Inside Greentech, and a Contributing Editor to Alt Energy Stocks, and a blogger for CNET’s Green tech blog.