Is Tesla Really the EV King?

by Neal Dikeman, chief blogger, Cleantech Blog

Tesla Motors (NASDAQ:TSLA) has been the electric vehicle darling since almost the day it launched.  I’d argue there are some really neat aspects to its product and strategy, but it is far from a resounding market leader in EVs.

The Range and Battery Scale Advantage

There are a couple of really exciting things to like.  Pulling a quick summary of the prices of all the pure electric vehicles currently selling in North America, I ranked them by EV Price/ Range.  Tesla is and always has been the leader here.  Down in the <$300/mile range, half of the  i3.  Quite frankly it’s been the only game in town for a 200 mi electric car.

And as lithium batteries are the big ticket item in an EV, and Tesla loads up on them, that confers some advantage to go with that high ticket price.   It drives up its price and its range, and puts it still in a class by itself on range. But as you see when graph range vs price, packing all those batteries in also gives Tesla a huge nominal advantage over its competitors compared to where one would project it to be on price.  Tesla talks like this is all technology and battery management that is hard for competitors to match, I think it may be just as much a combination of purchasing scale and simply an illustration of relative cost absorption in a high range EV (at the lower 70-90 mi range of everyone else, the car cost swamps the battery cost, and differential cost of a few mi in range is much less important than the luxury premium).  You can see this illustrated in flatness of the PHEV version of the curve, and the wide differential between the i3 and LEAF, both very close in range.  Of course, as we are largely comparing prices not costs, some dirt in the numbers is also certainly present.

EV $ per Mileage

EV Price vs Range







PHEV $ per eMileage

Plug in hybrids as you’d expect show a much less dramatic differential and flatter curve, with most of the differential driven by luxury vs mass consumer car class than range.  The game in PHEV’s appears to be minimize battery for maximum consumer taste and performance output.




Future Impacts of Scale?

The interesting bet however, is what happens in the future.  Lithium ion batteries are one of the few fast falling cost items in a car, Tesla ought to be able to ride that curve down faster than the others, since it has both more purchasing power than its competitors (several x more battery kwh per car and one of the volume leaders in cars adds up), as well as a larger exposure in its vehicle unit cost structure in batteries than any of its competitors as the batteries make up such a major portion of its vehicle cost.

However, its attempt to vertically integrate upstream into  batteries with the gigafactory might well work against it here, as it gains leverage on the materials in the value chain, but loses leverage against the manufacturing cost, locks in on a single battery design, and has to recover significant capital outlays its competitors do not.

If the rest of the lithium ion industry can cost down as fast or faster than Tesla, it loses out quickly.  Alternately, when another car company rolls out a high range vehicle, Tesla’s advantage can erode fast.  And finally, it is unclear whether either the PHEV or short range EV strategies, requiring fewer costly batteries, simply continue to outpunch Tesla with consumers.  Like its zero emission credit advantage supporting profits when it first launched, this battery scale advantage may also be more short term than sustainable.

North American Market

But possibly most disturbing is trying to tie out this advantage to how Tesla is actually doing with this strategy in its core North American market.  It’s now been hot and heavy in North America for a couple of years.  Should be delivering results, but  things are not quite that rosy for a $20 billion market cap “market leader”.

It was not first, Nissan with the LEAF and GM with the Chevy Volt beat it to the market.

Its core initial US market has seen basically flattish sales growth YoY going on 2 consecutive years now, ostensibly as it scrambled to open new markets overseas, including its struggling Asian market.  But struggling to drive high growth in your first core market is never a good sign.  One wonders how much excess demand per month actually exists for an $80K electric sports car, and if some of Tesla’s shift of production to seed overseas markets is simply a strategy to keep its domestic demand levels pent up, out of concern that there is not adequate growth possible at this price point in one market to satisfy Wall Street’s valuation.  Not a bad idea, but does have implications.  In counter point, while GM and Toyota also struggled for growth, Ford and Nissan delivered strong double digit growth in Tesla’s home market while it stayed flat, and BMW has started to chew the mid luxury market in between.  One wonders if the strategy of twinning a low range low cost EV with PHEVs doesn’t simply deliver better product line punch than the high mileage high cost strategy.

Tesla is not the largest, and has never worn the crown of most EVs sold for a year, coming in 3rd and slipping to 4th in 2013 and 2014, and only barely edging out Ford so far for 2 months of 2015 and helped by weak Chevy sales months so far. Also probably helped as Tesla apparently had to shift about a month’s worth of car production into Q1 from production issues according to its annual letter.

NA EV Company Ranking

NA EV Company Ranking







Source: tracker 

Also pictured is the results from a second tracker with slightly different estimates claiming Tesla is actually ahead so far this year.

But almost as interesting to me has been the rise of the BMW.  That i3 which is almost double Tesla’s price/mile is doing rather well.  By some trackers has edged Tesla in sales of its i3 and i8 EV and PHEV in North America in 3 of the last 7 months, with less than a year under its belt.  Arguably the i3 was aimed more at the Volt and LEAF than the Model S, but getting even remotely close to caught by an upstart short range BMW product this early in its cycle was I am sure never part of Tesla’s plan.

BMW vs Tesla







Do note that all Tesla monthly numbers are somewhat suspect, as the company does not publish anywhere near the detail that other automakers do. Charitably it is just playing cards close to the vest?  Not just making it harder to analyze hidden growth misses?

All in all, a quite decent performance for a new auto maker, but far from the dominance you’d expect from a $20 billion market cap brand name.

The author does not own a securities position in TSLA.  Any opinion expressed herein is the opinion of the author, not Cleantech Blog nor any employer or company affiliated with the author.

EV King Tesla – Where Did the Cash Go?

by Neal Dikeman, chief blogger

Since it’s launch, cleantech darling Tesla (NASDAQ:TSLA) has delivered huge revenue growth in the electric vehicle market.  With a market cap of over $20 billion, it’s more than a 1/3rd of that of the massively higher volume GM or Ford.  Largely the market cap has been driven by phenomenal growth numbers, 60% YoY revenues last in 2014, and the company forecasts 70% increase in unit sales YoY in 2015.

But let’s take a deeper look.

The Company trades at 7.5x enterprise value/revenues, and 26x price/book.  At the current market cap, it needs to deliver the same revenue growth for another 4-5 years before normal auto net profit margins would bring it’s PE into line with the the other top automakers.  Of course, that assumes no stock price growth during that time either!  Our quick and dirty assessment test:

Take 2014 revenues, roll forward at the YoY growth rate of 60%.  Take the average net profit margins and P/Es of the major autos (we used two groupings, 2-3% and 20-25, and 7-8% and 12-17), roll forward until the PEs align, see what year it is (2018-2020).   That’s our crude measure of how many years of growth are priced in.  And it puts Tesla at between a $20-$50 Billion/year company (7-15 current levels) before it justifies it’s current market cap.  Or c. 300,000-1.5 mm cars per year depending on price assumptions.  Up from 35,000 last year.

Does it have the wherewhithal to do that?

Tesla Financials

 Well, looks awfully tight.  The numbers technically work, continued growth will cure a lot of ills.  But while nominally EBITDA positive now, the company has been chewing cash in order to sustain future grow.  2014 burned nearly $1 billon in cash in losses, working capital and capex to anchor that growth, almost as much in cash burn as the company delivered in revenue growth.

Positive progress on working capital in 2013 disappeared into huge inventory and receivables expansion at the end of 2014, and interest on the new debt for the capital expansions alone chewed up 10% of gross margin, while both R&D and SG&A continue to accelerate, doubling in 2014 to outpace revenue growth by more than 50%.

The cash needs this time around were fueled by debt, which rose over $1.8 bil to 75% of revenues.  Overall liabilities rose even more.  Current net cash on hand at YE was a negative half a billion dollars, seven hundred million worse than this time last year.

The company will argue it is investing in growth, and you can see why it better be.  With almost every cost and balance sheet line currently outpacing revenue growth, at some point a company needs to start doing more making and less spending.

So yes, continued growth outlook is still exhilarating (depending on your views of the competition and oil price impact), but the cost to drive it is still extremely high.  I think we will look back and see that 2014 and 2015 were crucial set up years for Tesla, and the really proof in the pudding is still probably 24 months in front of us.  And my guess is Tesla will be back hitting the market for equity and debt again and again to keep the growth engine going before it’s done.

 The author does not own a securities position in TSLA.  Any opinion expressed herein is the opinion of the author, not Cleantech Blog nor any employer or company affiliated with the author.

Predictions For Cleantech in 2014

Continuing a tradition since 2007, once again we bring you some end-of-year thoughts about where we think the cleantech investment theme is going.

Our cleantech-specific analysis and advisory firm Kachan & Co. focuses on this space. We publish research reports. We get briefings from companies introducing new technology. We publish a cleantech analysis service. We’re quoted in the press. We pore over what’s going on in the world in clean/green tech markets and have made some informed calls over the years, like China’s cleantech dominance, the rise of efficiency technologies and the downturn in cleantech venture capital funding.

This year, we’re of the opinion that industry-watchers should take heart. Especially if you’ve been on the page that cleantech is past its prime or otherwise unworthy of your attention of late. Why? Because we’re more optimistic about the year ahead in cleantech than in our last two years of predictions (read 2012 and 2013), which were uncharacteristically negative for a firm that’s often been something of a cheerleader for the cleantech space.

What’s different this year? As you’ll read below, we believe the world turned an important corner in cleantech in 2013.

Gradual recovery in 2014
If you’ve not been looking carefully into the tea leaves this past year, you may have missed the quiet recovery already underway in cleantech, a process we expect will gain even more momentum through 2014.

We had the chance to take a close look at the fundamentals of cleantech this fall in co-authoring a new (and free!) 38-page research report. Titled Cleantech Redefined: Why the next wave of cleantech infrastructure, technology and services will thrive in the twenty first century, the paper analyzes the most recent investment research available across a number of industries and major impact areas.

One section of the report compares the cleantech wave to other technology booms of the last 50 years, like the dot com boom, the networking craze, biotech, the PC and the microprocessor. We found a number of parallels and a number of reasons for optimism comparing the cycles. After 20 years in technology, personally, the more I looked at the data, the more it felt I’d seen this movie before. After an initial frothiness and correction, there’s always a resetting of expectations and execution and a gradual “climb out” of the trough. Gartner calls it a hype cycle. And climbing out of the trough is where we are today in cleantech.

The recent downturn in venture capital investing in cleantech doesn’t mean the sky is falling. The dip becomes less threatening when viewed in the historical context of how venture capital always spikes early in emerging categories, later to be augmented with other sources of capital, such as often-unreported corporate and family office investment, as industries develop. It happened in the dot com, networking, biotech and PC eras, and this transition is now well underway in cleantech, as shown below. We offer a lot more detail, with additional figures and graphs, in our report.

Venture capital playing a lesser role

While venture capital was the dominant source of clean technology financing in California in 2008, it played a lesser role in 2012. Source: CB Insights, Collaborative Economics. Excludes project finance and unattributed investments.

Another takeaway from the above: Pay less attention these days to venture capital investment as an indicator of the health of the cleantech space. You risk not seeing the real picture.

In addition to an analysis of patterns in venture funding in previous bubbles vs. what’s occurring today in cleantech, our 38-page analysis on the state of cleantech today also looks at overall investment levels into clean and green innovation and projects. It contemplates what’s to be learned from models like the technology adoption life cycle (of “chasm” fame.) It factors in the recent recovery in publicly traded cleantech funds and other metrics.

In all, based on what we learned writing this report, we forecast a continued recovery in cleantech. Not an exuberant one—we’re betting those days are over—but look for a clear upward trend in many things cleantech in 2014, i.e. corporate, private equity and family office investment, venture debt, project finance, M&A, interesting new innovation, new product announcements, etc. But don’t hold your breath for classic venture investment to increase appreciably.

Term cleantech to stay alive and well
There’s been speculation about whether the term ‘cleantech’ that my previous firm is credited with coining will, or should, persist. My colleagues sometimes suggested the phrase should quietly go away—that our job was to ensure that clean and green propositions are eventually added to all products, that all forms of energy become clean, that all synthetic chemistry and toxins be replaced with natural, biological solutions because these are ultimately the less expensive and potentially only real ways to accommodate more people on the planet.

My current cleantech research & consulting firm Kachan & Co. worried further about the future of the term cleantech this summer. I, myself, had something of a crisis of confidence after a set of cleantech power players I interviewed in Silicon Valley shared the extent to which they’ve been distancing themselves from the phrase. It seemed this summer that many of the investors, lawyers and global multinationals I’d worked shoulder-to-shoulder with for years had started considering cleantech a dirty word.

But today, at the end of 2013, we now predict the term cleantech to persist through 2014 and beyond. We have come to appreciate how our datapoints from the summer were very regional, and how the rest of the world is still enthusiastically embracing the term as shorthand for environmental and efficiency-related technology innovation.

We also now suspect that investors and service providers who recently distanced themselves from the phrase may have been too quick to do so, and anticipate a restoration of the cleantech-related teams at many of these firms. Why? Call it what we will in the future, the fundamental drivers of resource scarcity, energy independence and climate change aren’t going away. The largest companies in the world are demanding more and better clean and green products and services than ever before. And that’s driving a recovery.

Cleantech term search history

The peak in global search traffic for the term cleantech and its subsequent decrease and stabilization mirrors the Gartner hype cycle. Is a gradual climb up again in the cards, as the hype cycle suggests? We predict yes. Source: Google Trends.

Realistically, cleantech teams at private equity investors, law and consulting firms may rebuild in 2014 under the auspices of “energy,” “advanced materials,” or other related monikers drawn from the taxonomy of cleantech. But massive funds earmarked for this space are being raised again (e.g. just this week: Tata/IFC: $400 millionIndustry Ventures: $625 millionthe UN’s Green Climate Fund: $TBD, expected to be massive) and these sort of numbers are representative of opportunity. And we think it’ll still mostly be called cleantech.

Crowdfunding emerges as viable in unexpected ways
Forget what you know about Kickstarter and Indiegogo. Donation-based crowdfunding only has limited usefulness for companies seeking seed or other early stage funding in cleantech.

In 2014, look for equity and debt-based crowdfunding platforms to catch their stride and serve as legitimate ways for cleantech vendors and project developers seeking to raise relatively modest amounts of capital. (Which isn’t to say we expect the U.S. SEC to sort out all regulations in 2014 around Title III raises under the country’s Jobs Act. We expect that equity and debt-based crowdfunding plays in cleantech will leverage Reg D in the U.S. and other similar regional constructs worldwide in the short term to help companies raise money.)

In 2014, expect selected efficiency, “cleanweb”-style big data, collaborative consumption and other capital efficient plays to be able to raise hundreds of thousands of dollars for themselves in equity or debt via horizontal crowdfunding platforms like AngelList or FundersClub, or industry-specific debt and equity portals like MosaicSunFunder or a host of other emerging platforms. Under current regulations, such crowdfunded raises may ultimately be feasible up to $1 million per company per year in the U.S.

Which will likely make crowdfunding less attractive in 2014 for big, capital-intensive cleantech plays.

Underperformance in EV sales, and risks to growth rates
Betting that the future of transportation will be all-electric, and that 2014 will be THE year of the electric car, finally? Think again.

Enthusiastic bloggers breathlessly paint the picture that electric vehicles (EVs) are flying out of the showrooms (as in here and here), but they’re selling slower than expected by analysts, with only 150,000 expected sold worldwide in 2013.

Most industry watchers believe EV adoption will be spurred by governmental support in the form of subsidies, infrastructure funding and concessions such as free parking, access to high-occupancy vehicle (HOV) lanes and congestion-zone toll exemptions, along with broader adoption of wireless charging and smart-grid innovations. But, in our analysis, there are other forces causing risk to the growth rates of electric vehicles.

As we forecast last year (read “The internal combustion engine strikes back”), there have been innovations taking place in internal combustion engines (ICE) that could forestall the timing of an all-electric vehicle future. Even more surprising to us have been the substance and volume of fuel cell vehicle announcements this year from the world’s leading automakers—which are likely at least partially responsible for the quiet doubling of certain fuel cell companies’ share prices in 2013. Yes, you read that right: Automotive fuel cell companies’ shares are UP!

In 2010, my line to journalists that “the jury was in, and the future of transportation was to be all-electric.” In 2012, my talking point was that the near-term future of transportation was to be all-electric. In 2013, I started talking about fuel cells possibly succeeding all-electric in the far future of transportation, once costs come down. In 2014, fuel cell approaches may get even more ink and undermine the aggressive uptake expected for electric vehicles.

And that’s not necessarily a bad thing, for if their fuel (hydrogen, methanol, or in some cases formic acid or others) can be created in low-cost, sustainable ways, fuel cell vehicles could ultimately have less of an impact on the planet, given that the power required to drive EVs often comes from dirty sources.

Rare earth profits to be made in unexpected places
Fortunes will not be made in 2014 in rare earth element mining companies. Reconsider buying into rare earth element mining companies or associated funds. If holding rare earth mining investments hoping they’ll return to stratospheric levels of yore, consider getting out of them.

Why? In the short term, we think recycling will be one of the few rare earth plays with upward motion. Much of the industry has been focused on new mines to meet growing demand for rare earths. But recycling of rare earths is gaining momentum quietly, and stands to accelerate in 2014 given the increasing costs of mining and cost and schedule overruns at high profile sites like Molycorp’s Mountain Pass California mine.

  • Brussels-based company Umicore is at the forefront of recycling technologies for critical metals. At its site in Hoboken, Belgium, the company recycles about 350,000 tons of e-waste every year, including photovoltaic cells and computer circuit boards, to recover metals like tellurium. In 2011, it started a venture to recycle rare earths from rechargeable metal hydride batteries (there’s about a gram of rare earths in a AAA battery) at its Antwerp site, in partnership with the French company Solvay.
  • Japanese car company Honda announced this March that it has developed its own in-house recycling program for metal hydride batteries, which the company plans to test using cars damaged by Japan’s 2011 quake and tsunami.
  • The Critical Materials Institute of the U.S. Department of Energy is developing a method that involves melting old magnets in liquid magnesium to tease rare earths out.

Watch for more and more companies to be introducing rare earth recycling plays. And watch for a near future trend encouraging electronics manufacturers to design their products to be easier to break apart for rare earth element recovery in the first place.

Getting rare earth metals out of modern technology is hard, since they’re incorporated in tiny amounts into increasingly complex devices. A circa-2000 cell phone used about two dozen elements; a modern smart phone uses more than 60. Despite the relatively high concentrations of rare earths in technology, it’s traditionally been easier to chemically separate them from the surrounding material in simple rocks than in complicated phones.

Recycling is perhaps the best route forward for elements where demand is expected to level off in the long run. Expect demand for terbium and europium, for example, to fade as fluorescent bulbs are eventually replaced with much smaller LEDs. But for other elements, like neodymium, new supply is needed. Currently only tiny amounts of neodymium are required for ear-buds of smartphones—but high-performance wind turbines need about two tons each. But it’s only these sort of large quantity applications that are expected to drive the need for new mines.

Other potentially appealing rare earth plays in 2014 include new processes at existing mines to improve processing yields, and the development of alternative materials to obviate the need for rare earth elements.

More on the subject in a brief on rare earths to our analysis service subscribers.

And so concludes our predictions for cleantech in 2014. What do you agree with? What do you disagree with? Leave a comment on the original version of this post on Kachan’s website.

This post is reproduced by permission and was originally published here.


A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. The company publishes research on clean technology companies and future trends, offers cleantech data and analysis via its Cleantech Watch™ service and offers consulting services to large corporations, governments, service providers and cleantech vendors. Kachan staff have been covering, publishing about and helping propel clean technology since 2006. Details at

Plugin Electrics vs All Electric Battery EVs, Epic Throwdown?

I get this every time I discuss EVs.  Something along the lines of oh, you shouldn’t be including PHEVs in with EVs, they don’t count, or are not real EVs, just a stopgap etc.

I tend to think PHEVs may be better product.  At least for now.  And I follow the GM’s Chevy Volt vs the Nissan Leaf with interest.

The main arguments on each:

Plug in Hybrids

  • No range anxiety
  • Still need gasoline
  • Can fuel up at either electric charging station, your home or gas station
  • Depending on driving patterns, may not need MUCH gasoline at all
  • Expensive because:  need both gasoline and electric systems, and batteries are still pretty expensive, even with a fraction of the amount that’s in an EV
  • Get all the torque and quiet and acceleration punch of an EV without the short range hassle
  • But not really an EV, after a few miles it’s “just a hybrid”
  • Future is just a stop gap until EV batteries get cheap? Or just a better car with all the benes and no cons?


Electric Vehicles

  • No gasoline at all (fueled by a mix of 50% coal,20% gas, and the rest nuke and hydro with a little wind :) )
  • Amazing torque and acceleration
  • Dead quiet no emissions
  • Fairly slow to charge compared to gas
  • Lack of charging stations is getting solved, but still somewhat an issue
  • Switching one fuel for another, no extra flexibility on fuel
  • Expensive because lithium ion batteries are still pricey and way a lot
  • Future is cheaper better batteries?  Or they never get there and the future never arrives?

I tend to think the combination of plugins and EVs has actually worked together solved range anxiety.  As a consumer, I get to pick from a full basket when I buy, Leaf, Volt, Prius, Model S, lots of pricey batteries to deal with range anxiety, a plug in that gets me almost there with zero range issues, or a Leaf in between.  Whatever range anxiety I had disappears into consumer choice, just like it should.  I don’t think pure EV is any better or worse than a plugin, just a different choice.  They work together in the fleet, too, plug ins help drive demand for EV charging stations that are critical to electric car success, and EVs drive the cost down on the batteries that brings the plugin costs into line.  Unlike with the Prius over a decade ago, it’s not a single car changing the world, it’s the combination that’s working well for us.

Chevrolet Volt and Nissan LEAF Electric Cars Earn Highest Safety Ratings

Volt IIHS Front Test Chevrolet Volt and Nissan LEAF Electric Cars Earn Highest Safety Ratings

The Chevrolet Volt and Nissan Leaf earn the highest safety ratings from the Insurance Institute for Highway Safety in the first-ever U.S. crash test evaluations of plug-in electric cars. The milestone demonstrates that automakers are using the same safety engineering in new electric cars as they do in gasoline-powered vehicles.

The Volt and Leaf earn the top rating of good for front, side, rear, and rollover crash protection. With standard electronic stability control, they qualify as winners of Top Safety Pick, the Institute’s award for state-of-the-art crash protection. The ratings help consumers pick vehicles that offer a higher level of protection than federal safety standards require.

The addition of the 2 electric cars brings to 80 the number of award winners so far for 2011, including 7 hybrid models. That lifts General Motors’ current model tally to 12 and Nissan’s to 3.

“What powers the wheels is different, but the level of safety for the Volt and Leaf is as high as any of our other top crash test performers,” says Joe Nolan, the Institute’s chief administrative officer.

The dual-power Volt and all-electric Leaf not only surpass benchmarks for protecting occupants in crashes but also exceed current fuel efficiency andLEAF IIHS Side Test Chevrolet Volt and Nissan LEAF Electric Cars Earn Highest Safety Ratings emissions standards. Both models are brand new for 2011. The Volt is a plug-in battery/gasoline hybrid that can run in electric-only mode with a range of about 35 miles on a single charge. A gasoline engine kicks in to power the electric motor when the battery is spent. The Leaf runs on battery power alone and has an Environmental Protection Agency-estimated average range of about 73 miles on a single charge

“The way an electric or hybrid model earns top crash test ratings is the same way any other car does,” Nolan says. “Its structure must manage crash damage so the occupant compartment stays intact and the safety belts and airbags keep people from hitting hard surfaces in and out of the vehicle.”

The Volt and Leaf are the first mainstream electric cars the Institute has tested. Last year engineers put 2 low-speed electric vehicles through side barrier tests for research purposes. Results for the GEM e2 and Wheego Whip were starkly different from results for the Volt and Leaf. Crash test dummies in the GEM and Wheego recorded data suggesting severe or fatal injuries to real drivers. The GEM and Whip belong to a class of golf cart-like vehicles that aren’t required to meet the same federal safety standards as passenger vehicles. Although growing in popularity, these tiny electrics aren’t designed to mix with regular traffic.

“Eco-minded drivers keen on switching to electric would do well to buy a Leaf or Volt for highway driving instead of a low-speed vehicle if they’re at all concerned about being protected in a crash,” Nolan said about the electric cars.

Small but safe: The Volt and Leaf are classified as small cars, with their overall length, width, and passenger capacity in line with their peers. But their hefty battery packs put their curb weights closer to midsize and larger cars. The Leaf weighs about 3,370 pounds and the Volt about 3,760 pounds. This compares to about 3,200 pounds for Nissan’s Altima, a midsize car, and about 3,580 pounds for Chevrolet’s Impala, a large family car. Larger, heavier vehicles generally do a better job of protecting people in serious crashes than smaller, lighter ones because both size and weight influence crashworthiness.

For years the debate over fuel economy has been about making cars smaller and lighter, changes that could put people at greater risk of dying or being injured in crashes. The Institute long has maintained that advanced technology is key to improving fuel efficiency without downgrading safety.

“The Leaf and Volt’s extra mass gives them a safety advantage over other small cars,” Nolan says. “These electric models are a win-win for fuel economy and safety.”

About the award: The IIHS awarded the first Top Safety Pick to 2006 models with good ratings for front and side protection and acceptable for rear protection. The bar was raised the next year by requiring a good rear rating and electronic stability control as standard or optional equipment. Last year, the Institute added a requirement that all qualifiers earn a good rating in a roof strength test to assess rollover crash protection. The ratings now cover the 4 most common kinds of injury crashes.

Electric Car Reports

China Plans 220,000 EV Charge Points and 2,351 Battery Switch Stations

China leads the world with over 100 million riding e-scooters, e-bikes, and light-electric vehicles. By December 2015, China plans to have 500,000 electric vehicles that can travel slow streets to fast highways. Those EV will be supported with 220,000 charge points and 2,351 battery swap stations in the nation’s latest plans. China’s 12th Five Year Plan is summarized in a new Deutsche Bank (DB) report.

China will move to a more efficient lower carbon economy not only with electric cars and electric scooters. China is expanding electric transit and rail. For example, electric high-speed rail is targeted to expand by 29,000 miles between now and 2015. China high-speed rail is already more extensive than the mid-speed U.S. Acela system that supports daily riders in New York, Boston, Philadelphia, Washington DC and other Eastern cities.

Over the next five years, China will reduce its percentage of transportation that requires foreign oil for gasoline and diesel. China will also reduce the percentage of electricity generated by coal. By 2015, China will add:

  • 70 GW wind
  • 120 GW hydro
  • 5 GW solar
  • 40 GW nuclear

China plans to lead the world in using renewable energy. Although the Japanese nuclear disaster occurred as the 12th Plan was being drafted, China appears to be moving ahead with Generation IV nuclear which it views as safer than the Japanese plants built over 30 years ago. For example, Huaneng, China, is proceeding with the construction of a 200MW high-temperature gas-cooled reactor according to the DB report. More cost-effective natural gas plants, however, may yet be substituted for half of the planned nuclear expansion.

China Wind 150x150 China Plans 220,000 EV Charge Points and 2,351 Battery Switch StationsChina is likely to easily meet its 70GW wind 5-year target. It installed 25GW of new wind power in 2010, in comparison to only 5GW in the U.S. China’s wind installations grew faster than grid connection, with 10 percent of new wind not being grid connected. China Wind Renewable Energy World Report

$76.7 billion will be invested in new ultra high-voltage grid transmission to support the added capacity of new power according to the 12th Plan.

These investments will directly benefit China and support Chinese ambitions for Chinese global leadership in technology of the future. The 12th Plan identifies 7 Strategic Emerging Industries:

  • Clean Energy Vehicles
  • Energy Conservation and Environmental Projection
  • New Energy
  • New Materials
  • Biotech
  • High-end manufacturing equipment
  • Next-gen IT

Free DB Report

Disclosure: author owns stock in Chinese wind, solar, and HSR companies Trina Solar (TSL), Goldwind (2208.HK), Ming Yang Power (MY), CSR Corp (1766.HK), China High Speed Transmission (CHSTY), and Zhuzhou CSR Times Electric (3898.HK).

Japan’s Crisis Hurts Sales of Hybrid Cars and EVs

The people of Japan are courageously moving forward after the devastation of a 9.0 earthquake, a tsunami that ripped apart buildings and roads, and a nuclear crisis that now threatens their food and water. The Japanese economy depends in no small measure on the success of its automotive industry and its complex eco-system of component suppliers and service providers.

Just when gasoline prices are rising and hybrid cars are again hot sellers, the crisis is making hybrids and new electric cars tough to get. Let’s look at the impact on three big sellers of hybrids and electrics.

Toyota, Honda, and Nissan are hurt less than expected because they have diversified globally, including billion dollar plants and operations in the United States. The most advanced hybrids and electric cars, however, are first produced in Japan. Every supplier must be able to produce for new cars to be assembled in Japan. Once assembled, it will be challenging to move them across roads not ripped apart. It will take time to return shipping ports to normal after the recent tsunami tossed cars and railcars around like toys. Plants and operations require MW of electricity, now constrained by nuclear plant shutdowns.


Toyota reports that all 13 North American vehicle and engine plants are running normally, although overtime has been curtailed to maintain adequate inventories of parts that come from Japan. Toyota now makes 12 different models in North America, including high-volume vehicles such as Camry, Corolla, RAV4, and Lexus RX 350, and nearly 70 percent of all Toyota and Lexus vehicles sold in the U.S. are made in North America.

Suppliers in North America provide most parts and materials for Toyota’s North American-built vehicles. Toyota has temporarily stopped all Japanese production of vehicles, but it is restarting production of replacement parts for cars already sold and parts necessary for overseas production. In general, Toyota is seeing adequate inventories at most dealers.

Prius vehicles are built in Japan, Steve Curtis with Toyota told me that the Tsutsumi plant where the Prius is made was not damaged by the earthquake. Production depends on more than the plant condition. It depends on a complex web of suppliers, supply of electricity, roads that can be crossed by employees and trucks deliveries parts. Toyota has delayed 12 Japan plant openings until March 26.

The tragedy in Japan has not delayed the U.S. launch of the new larger Prius V Crossover SUV and the Prius Plug-in Hybrid, not the new Toyota small electric city car. It has delayed the launch of the Prius wagon and minivan models in Japan from the original plan for the end of April. Reuters  Article

Since the production of current Toyota and Lexus hybrids, depends on a complex supply chain, and shipment to the UnitedToyota Prius 37k 150x102 Japan’s Crisis Hurts Sales of Hybrid Cars and Electric Cars States depends on roads and ports, Clean Fleet Report forecasts that shipments of Prius and other hybrids will be delayed and reduced for months.

Only one of three Toyota hybrid battery plants in Japan sustained limited damage from the earthquake. The other two plants are located in central Japan and were not affected. Panasonic and Sanyo are Toyota’s primary suppliers of nickel metal hydride and lithium batteries; their production status is uncertain.

Car dealers are betting that the supply of hot selling hybrids will be tight, especially with gasoline costing $4 per gallon in parts of the country. Auto News reports that dealers that were averaging $1,700 discounts on the Prius are now getting $800 premiums.


Honda is globally diversified in manufacturing and suppliers. With nine U.S. plants, Honda has invested more than $12.7 billion in its U.S. operations. The company employs nearly 25,000 associates and annually purchases $12 billion in parts and materials from more than 530 U.S. suppliers.

For hybrids such as the Civic Hybrid, Insight, CR-Z and Fit Hybrid, Honda also heavily depends on Japanese suppliers, including advanced battery suppliers such as Sanyo. At the heart of the 2012 Civic Hybrid and Honda’s new electric cars are the lithium-ion batteries built at its Blue Energy join venture (JV) with Japan’s GS Yuasa; the battery plant is in Fukuchiyama, Kyoto, Japan.

Last week, Honda had announced plans to resume production of major Japanese plants on March 20. Now these openings are delayed to March 27 or beyond. Like all major manufacturers, Honda depends on a complex eco-system of suppliers and joint ventures. Some plants have been damaged and roads to move parts have been ripped apart.


Nissan has delayed March 21 plans to restart production of parts for overseas manufacturing and repair parts, based on parts availability from suppliers, at these plants Oppama, Tochigi, Kyushu, Yokohama, Nissan Shatai. Vehicle production will be constrained by inventory availability. The Iwaki engine plant remains closed.

LEAF battery 150x150 Japan’s Crisis Hurts Sales of Hybrid Cars and Electric CarsNissan recently shipped 600 Nissan LEAFs before earthquake and tsunami damage. At the Port of Hitachi, however, Nissan lost 1,300 U.S.-bound Infiniti and Nissan cars to the tsunami. Nissan had plans to soon have 10,000 LEAFs built at the Oppama plant. Now Nissan’s hopes of catching-up with U.S. deliveries of the Chevrolet Volt have faded in the near term.

Starting next year, Nissan’s Tennessee assembly plant will have the capacity to build 150,000 Nissan Leaf electric cars per year, and 200,000 lithium-ion battery packs per year. The lithium packs could also be used in future Nissan hybrid cars. The Tennessee battery production is by AESC, a joint venture of Nissan and NEC.

Once production returns to normal, U.S. shipments could still be delayed. Japan faces a fuel shortage. Fuel is needed to transport cars to ports, to run port drayage trucks and lifts, and to run ships. Even electric cars still depend on diesel to move them to market.

What Should Cleantech Mean for Vehicle Safety?

Earlier this month, President Obama signed into law the Pedestrian Safety Enhancement Act, which will require quiet electric and hybrid vehicles to emit a sound that allows the car to be detected by blind pedestrians. The interesting part of this law, which received the support of the Alliance of Automobile Manufacturers, was that it did not base its compliance requirements on some measure of quietness, but rather on the propulsion technology used. That significant detail has me wondering: what role should clean technology play in promoting safety, particularly in the auto industry?

Clearly, every car on the road must guarantee some base level of safe operation (example: batteries should not cause their vehicle to explode). But beyond that promise of reliability, the argument could go in two very different directions.

First, the call for more safety: “The future of personal transportation would not be bright with today’s level of danger on the road, so clean technology should assume higher standards of vehicle safety.”

There’s no denying the societal repercussions of auto accidents: according to the National Highway Traffic Safety Administration (NHTSA), in 2009 over 33,000 people died in over 5.5 million crashes in the U.S. at an economic cost of over $230 billion. Though NHTSA did not publish the statistic, the environmental impact related to property loss as well as hazardous material spillage was significant. And 2009 was the safest year on the road in ALMOST 50 YEARS. The safety hawks among us would argue that if today’s electric vehicles represent the mainstream choice for the car of the future, automakers should use them to set the standard for future safety technology. Furthermore, there’s nothing sustainable about scrapping so many crashed vehicles. Given that today’s EVs and hybrids are often more energy-intensive to build than conventional cars, one might argue that automakers have an obligation to incorporate accident avoidance technology if they are going to market their product’s sustainability.

On the other hand, there could be an argument for even less safety: “Electric vehicle technology is not where it needs to be for mainstream acceptance, but our environment needs a solution now. Two of the biggest challenges for today’s EVs are weight and cost. Limiting the safety spec required by law would provide EVs with a competitive advantage to spark market acceptance and fund future development.”

A few years back, NHTSA estimated that federal safety standards added $839 of cost and 125 lbs of weight to the average passenger car. Inflation has turned that cost into over $1,000, and 125 lbs represents the bare minimum safety spec, which greatly underestimates most automakers’ equipment levels. Industry research shows that early adopters of new technology are more risk averse and less concerned with safety than the mainstream. So in the interest of moving the technology along, why not give them what they want? By many estimates, $1,000 will buy an extra 2kWh of battery in the next couple of years, which could add an extra 10 miles of range. That would go a long way toward improving the value proposition of these products.

Looking to the future, Google has presented a vision of the autonomous automobile that could drive itself, coordinate with traffic, and solve both efficiency and safety problems simultaneously – but certainly at some cost and with huge commitments to behavioral changes (we Americans love our independence). In the meantime, what should clean tech mean for vehicle safety? I’d love to hear your thoughts!

Paul Hirsch is a Senior Product Planner at Toyota.

EV economics updated and a Catch-22

After posting my December 6 article about EVs Economics are getting interesting I’ve received numerous comments and I’ve had discussions with utility executives and board members.   Based on this input I’ve refined the economic analysis of the Leaf vs. Camry and I’ve addressed a potential regulatory Catch-22 concern that utilities might run up against if they aggressively go after the EV market.


The more I discuss EV usage, and considering how I would use an EV, I’m increasingly convinced the 100 mile class of EV will be used like a cell phone.   At the start of the day, the EV is unplugged and driven.  At night, the car is parked in or near its home garage and charged up.  The whole discussion about public charging, or changing out batteries, will be irrelevant.  These vehicles will be short range around town cars.  For drivers that go on long trips the EV won’t be used, the owner’s other, gas power car, will be.    Range anxiety can be addressed when necessary with a little high cost topping off from a 120 VAC outlet at the destination.

Since the car will be charged at night this represents an opportunity for utilities to market power in a new way.  Namely the utility can offer to sell electricity via a 220 VAC outlet at very low cost during the night off-peak power block period.   During the rest of the day, power would be unavailable from the 220 VAC outlet and a customer would have to rely on 120 VAC charging.  This avoids potential overloading of distribution transformers and aligns a cheap tariff with cheap power while placing no cost burden on other utility customers.

As part of updating the economics I double checked wholesale market outlook (thanks to and found the outlook continues for very low off-peak prices that easily allow provision of electricity to the EV at 5 cents/kWh and allows for some utility margin:

Quarterly forecast prepared 1/18/2010, Off-peak prices

period        NP15 (Northern California)
2011-1      2.9 cents/kWh
2011-2      2.5 cents/kWh
2011-3      3.6 cents/kWh
2011-4      3.7 cents/kWh

Previously I used 15,000 miles per year as the average annual mileage driven by Americans in a year.  While the DOE/EPA Model Year 2011 Fuel Economy Guide bases its annual fuel costs on 15,000 mile per year, EPA’s transportation and air quality group  peg the average miles driven at 12,000 miles per year.  And the Federal Highway Administration shows drivers in the 20 – 54 age range averaging over 15,000 per year.  Taking this all in I’ve decided to conservatively base the average analysis on 12,000 miles per year.

Some comments noted that EV will have lower maintenance costs than gas power cars.  I think it’s fair to credit the EV with avoided oil changes.  This isn’t a big factor but does improve the EV economics a bit.

I also used an estimated 10 cents/kWh for a nationwide average for retail electric prices.   For the average charging analysis I’m now using 11.5 cents/ kWh which according to the EIA is the actual August 2010 nationwide average.

In my first analysis I included 10% losses in the charging equipment because I was in a hurry.  This is probably a little high and I revised the loss figure to 5% consistent with losses in a couple of thyristors.

Previously I based my analysis on $3.50 gasoline.  This still seems a fair estimate and I’ve continued to use it.   Of course, if gasoline prices spike EVs will get a boost.

All these changes taken together erode the EV economics a bit but not enough to change my previous conclusion that EVs can be a hit given some creative utility rates.  But at my current rates, I’ll wait on the EV, sigh.

Scenario                 Break-even years      IRR at 96,000 miles (8 years)
1  (5 cent/kWh)                 4.6                                14 %
2  (11.5 cent/kWh)            5.6                                  9%
3  (17.6* cent/kWh)          6.9                                 4%

* this is what I pay today to SMUD for each incremental kWh


The Catch-22

Many utilities, and certainly those in California, are facing Renewable Portfolio Standard (RPS) requirements.  So if a utility added significant new load, say 50,000 EVs charging at 3kW at night, the utility would need to provide an additional 150 MW of power.  In all likelihood this power would come from fossil sources, at least for some period of time.   In the western US the marginal generating resource at night is almost always very efficient natural gas fired combined-cycle power (thank you again .  Essentially we would be running domestic natural gas through a high efficiency conversion and displacing imported crude or gasoline.  But a utility may be penalized by RPS requirements for this very sensible activity – the Catch-22.

The RPS standards have been enacted in large part to address climate change resulting from burning fossil fuels.  To test whether the RPS standards are counter productive to their own purpose in the case of EV charging, I dove into carbon calculating.

I first calculated the annual pounds of CO2 the Camry would produce.  Using EPA mileage, 12,000 miles per year, and the EPA’s CO2/gallon of gasoline figure, I computed the Camry would produce 9,502 lb/CO2 per year.

Next, to calculate the Leaf’s CO2 production, I adjusted the Leaf’s kWh consumption back to the generation level by adding back transmission system losses.   Then I determined the amount of natural gas consumed using night time combined cycle heat rates of 7,500 Btu/kWh.  Finally I applied EPA’s latest C-factors (including the 2 oxygens) for natural gas to compute the CO2 produced. The result: 4,049 lb/CO2 produced per year, less then one-half that produced by a gasoline engine.

This result makes sense: (1) combined cycle power plants, even after transmission and charging losses are really efficient, and (2) natural gas produces a lot less CO2 than an equivalent amount of gasoline.

The conclusion is straightforward, EV charging should be exempt from RPS requirements and the EPA should be gung-ho for EV charging.   And at the end of the day I don’t see any way a utility will ultimately be penalized for encouraging EVs.

Cleantech Blog Wants a Leaf, Dammit

I drove my first Nissan Leaf on Saturday. The ultimate cleantech car.  Not Cleantech Blog’s first EV drive, as our blogger John Addison has blogged on the Leaf and other EVs numerous times before. But only my second EV drive.  My Leaf test drive followed a previous conversation with Mark Perry, one of the senior product guys at Nissan, who gave me a bit of insight ahead of time into what all went into the Leaf. I must admit, I was rougher on him than almost any interview I’ve ever done, and was definitely a skeptic. I pushed him hard on why they didn’t push the cost to get just a bit more range and a bit faster charging, and he was unable to share too much on the record.  I’m also incredulous at the minute volumes (20,000 in the US this year) they are producing.  One version?  Every product decision middle of the road?  No real EV options?  Tiny production for the first year?  Scatter that production around the world?  I think at heart Nissan has been scared to death that this thing will flop.  They’ve treated the Leaf like a pilot, and marketed it like a real car.  I say why not bet on it?  They wouldn’t release any other car with such puny production capacity.   As it is, if it works, their 12 to 24 month advantage over the competition just evaporates into market share limbo.  And best yet, it’s a great looking car.  I think they did a damn good job for the first honest to goodness mass market EV on the planet.  And an amazing job marketing.  But have the courage of your convictions!  I want a Leaf, Dammit!

The Leaf Electric Drive Tour has to be one of the best sales pitches I’ve ever received. Think timeshare sales tour, except fun, no pressure, and not obnoxious. (oh and no donuts).  By the end of the group pre-ride tour – you could feel your adrenaline and the excitement just to get it one – it felt like a Disney World ride. And the best part was no salesmen ever showed up! You just leave thinking where do I sign?

Of course, there was the guy in front of me who commented he bought one without ever driving it, and was just coming for a test drive while waiting for it to arrive.  He was not the only excited person in a crowd of excited people.

To be honest, the Leaf looks good, feels good, handles well, and they’ve thought about almost everything I could come up with.

For instance:

  • The “fuel tank’ is measured in estimate miles left, not gallons of KWH – which makes sense I just never thought about it.
  • You can pre heat and pre cool it from your cell phone.
  • A lot of the car’s interior is made from recycled materials.
  • The 600 lb batteries can be swapped out cell by cell and component by component for repair. They have an 8 year warranty – but only 5 years on the EV components and 3 bumper to bumper (which I found odd – Nissan trusts its battery life more than the life of the rest of the car?)
  • The battery power level fades <1% per month when sitting unplugged.  Wish my blackberry did that well.
  • The Leaf can text you when it’s thirsty.
  • You can see component by component how much juice you draw.
  • You can get Leaf apps to help you plan out your route by juice level.
  • The Leaf knows where the fast chargers are around town, and knows if they are occupied.
  • The Leaf will shut down non essentials and ping you the closer it gets to out.
  • It has a back up capacitor to keep it from dying when you run out of juice.
  • There will be a hundred chargers in the first year in Houston where I live – most of them are expected to be free (like at grocery stores and malls and stuff that want your business, and a bunch arranged by Reliant, one one of the big Texas utilities).
  • Oh, and free roadside assistance for 3 years to pick you up if you run out of juice. (I swear I heard that right!)

Now for the general EV advantages:

  • You can hear your self think (and your passenger, too). It makes about as much noise as well, a leaf falling.
  • It turns in almost the space of the dining room table I’m writing this blog on.
  • It accelerates like demon hummingbird on meth.  The beauty about EVs is you can get lots of acceleration and torque at low RPMs.  Nissan quotes 100% of torque at 1,000 RPMs vs. a V8 that might have 40% at 1,000 RPMs.  I can believe it.
  • The maintenance is like, nil.  My kind of car.  No oil.  No transmission fluid.  No spark plugs.  Breakpads don’t wear as much because regenerative breaking uses your drive train to help break.  This one is passively cooled for the batteries, but does have coolant for the EV parts.  They have a cool flat cell design that dissipates heat and makes that possible.  Some guy in the audience asked it there were really only 5 moving parts in the whole Leaf.  (uhm no, but damn that marketing group must be something else to get THAT rumor going!)
  • Did I mention it’s cool and electric and has lots of gadgets and apps?

. . .

But I’m not going to buy one.  As a car, it’s just not there yet.  Almost – but not quite.  I’m a 15 year car guy.  I don’t believe in the throw away economy when it comes to cars.  I want my next car to last til the cows come home.  As I said, just not quiiiiiiite there yet.

  • Charging time – eh.  Can fast charge on 480V in 30 minutes.  But you’re not going to have a fast charger in your home.  Needs like 8 hours on 220V (you buy a 220V charging station installed at your house).  On a 110V wall plug, think more like most of  day.  These are good numbers, but from a guy who sometimes doesn’t always fill up the whole tank if I’m at a slow gas pump – uh, not very impressive.  Of note, Ford just announced its Focus will charge in 3 to 4 hours – bascially they just use a 6.6 KW charger instead of Nissan’s 3.3,  about a 7% cost saving move according to Mark Perry.  I kept asking the whyb we didn’t see a more expensive fast charge version if it’s the cheap – and better yet a fast charging version with just a tad more batteries, and no answer really forthcoming.  Back to my Nissan wasn’t ready to swing for the fences, and has treated the Leaf has a high profile pilot.
  • Saves money, sort of.  You fill up your car on $2-$3 per “tank”.  24 KWH battery pack, $0.10/kwh.  Nissan posted a target miles per $ for a number of cars as a comparison, about 37 for the Leaf, 18 for a Toyota Prius, 14 for a Ford Fusion Hybrid, and 5 for a Hummer.  Estimates using $0.10/kwh and $2.80 per gallon, I believe.  Great, saves money.  Um, not so much.  $2800 savings over 100,000 miles/8 years vs a Prius, and $4400 vs. a Ford Fusion Hybrid.  Does not pay for the cost difference.  Of course, after some really rich subsidies, you might say, yes it does!
  • 100 mile average range target.  Not bad.  But not quite good either.  Especially as I’m 30 miles from the airport.  Basically no running errands on trips to the airport day – especially since it’s all freeway and no way I’m going to the airport without AC in Houston most days.
  • Or put another way, I drove across town to test drive my Leaf.  When I got in for my 10.30 a.m. appointment, the car had been test driving intermittently for a couple of hours, kind of like running errands.  The range said 72 miles without AC, 63 miles with AC.  My house is 34.2 miles from the test drive location in Pearland.  If I’d owned a Leaf, the range would not have gotten me to the Leaf test drive.  That was very unsettling.  (Of course, if I lived in Pearland, then I’d have gotten to drive the Leaf with no problem, but now I’d be 40 miles from the airport).
  • Gets worse.  Remember I’m a 15 year car guy.  I asked them what happened at the end of my 8 year battery warranty.  They assume future battery packs will be backwards compatible and could be replaced if need be (my Corolla and Accord are both approaching 15 years and I have no intention of replacing the engine).  And they estimate the battery will be at about 80% capacity in year 8.  Not good, wouldn’t even be able to pick up friends from the airport under any circumstances.  Not sure I could get to Costco, HEB, and parents house and back at year 15.  And for those non 15 year care guys, who do you think is going to buy your 6 year old Leaf  with an 85 mile range when you’re tired of it?
  • Which brings us to the final reason I’m sadly not going to buy a Leaf.  Ford is launching an EV Focus later this year.  The Volt is out.  A dozen more are coming.  In 24 months, the Leaf will be the first, but likely not the best.  By year 3, EV battery life will have improved.   By year 6-10 when you’re trying to sell it, it’ll be the slow charging, short range, out of warranty really cool old obsolete car, and it probably won’t last 15 years.  :(

So I will be buying an EV. Just not this one.  Just not now.  But kudos to Nissan for making a really cool car that almost got an electric vehicle skeptic over the line.

PS For the record, I’ve pinged Nissan PR a dozen times asking for one to drive around for a couple of weeks and see what it’s like in real world conditions.  Never gotten a call.

PPS  Despite all that, I want a Leaf, Dammit!

5 Cleantech Wishes for 2011

Five things I’d like to see in cleantech 2011.

  1. A fuel cell in one of my blogger’s houses.  This one’s actually in progress, so hopefully it’s a gimme.  So come on Marc, we’re waiting for the pictures and the blog!
  2. More cleantech IPOs.  Come on guys, the market’s been rolling, we ought to be able to deliver ONE good IPO or two?  We did see RigNet (NASDAQ:RNET) get out in a $60 mm IPO.  RigNet’s a telecommunications for remote and offshore oil and gas markets but maybe no one outside of Texas counts it.  Of course, a nine year old c. $80 mm in revenues/$25 mm in EBITDA company backed by long time cleantech investor Altira, ought to to make the list.  And Chinese LED maker SemiLEDS (NASDAQ:LEDS) made it out in an $89 mm IPO.  So maybe the IPO market isn’t dead to cleantech, and after market performance is guaranteed to go badly, at least for profitable companies.
  3. And speaking of LEDs, I’d like to see lots more of them next year – in houses, on street lights, hanging from Christmas trees.  And I’d like to see them brighter and cheaper.  And I probably will!
  4. A major cleantech conference in Houston.  Perhaps someday rivaling the OTC – Offshore Technology Conference.  When that happens, perhaps we’ll know cleantech has arrived as a real sector.
  5. Lots of EVs!  I admit it, I don’t think much of venture backed EV startups, but I’m really excited to see some EVs.  I imagine them like the herd of tractors in the tractor tipping scene from the movie Cars (don’t ask why, that’s just the mental image I have).  And since I’m testing driving an Nissan Leaf Electric Vehicle a couple of weeks, this wish is bound to come true.  I will definitely be blogging it.

Here’s thanking all our Cleantech Blog and readers and members for your support. Happy holidays, and good luck in a new year!

Right Time for Better Place?

by Richard T. Stuebi

Although the benefits of electric vehicles (EVs) have long been intuitively understood, EV market adoption has been limited by various issues associated with batteries.  Batteries cost too much and are too heavy/bulky, the operating range an EV is too short, and there’s no convenient way to recharge batteries with the speed and ubiquity of filling up a gas tank.

Well, there’s a lot of money being invested in many companies to address the first set of issues concerning battery cost and performance.  However, there hasn’t generally been a lot of attention paid to the question of how excellent/cheap batteries will get recharged – even though the lack of a solution on this issue would completely nullify the value of any progress on battery technologies for EVs.

Enter a company called Better Place.

Having secured $350 million of new investment in early 2010, led by HSBC (London: HSBA), Palo Alto-based Better Place is developing proprietary technology and installing infrastructure to streamline the process by which electric vehicle (EV) owners recharge batteries.

I recently had the opportunity to visit the research and testing facility for Better Place, which is located just north of Tel Aviv in Israel.  At this facility, Better Place allows visitors to test-drive a near-production prototype EV made by Renault (Euronext:  RNO), with whom Better Place is working closely.  It’s a fun exercise to gun an air conditioned mid-size five-passenger sedan up to 60 mph in a few seconds with no transmission shifts and virtually no sound, although Better Place has virtually nothing to do with the EV or the battery within it.

More interestingly, the facility lets future would-be EV drivers interface with how the battery pack would be recharged – if the vision of Better Place gets adopted.

Better Place envisions that EV drivers would buy a monthly subscription to Better Place recharging services.  At parking spaces hosted by Better Place, there is a post about one meter in height, in which is embedded a retractable cord to plug into the EV for battery recharging while the car is parked.  The retractable cord is unlocked by an electronic key card that the Better Place subscriber waves in front of the charging post.  (I wish I had asked what happens if a non-subscriber occupies a Better Place parking spot, or if a user forgets to disconnect their EV from the charging cord before driving away.)

This is all well and good for commuters or around-towners that have ample parked-car time for a recharge, but Better Place also has a solution to the EV challenge of quick recharging for long-distance trips.  Better Place has developed a service station design involving robotic arms in underground bays to reach under a parked EV, extract the depleted battery, and replace it with a fully-charged battery – all within a couple minutes. Thus, an EV-driver can be back on the road as quickly as refilling a gas tank, without even having to get out of the car.

Additionally, Better Place is developing software to facilitate vehicle-to-grid (V2G) utilization, wherein the customer would enable the EV’s batteries to sell power back to the grid during high-value peak periods.  Each customer would set his/her own parameters as to when Better Place would allow the grid to tap the EVs batteries for resale to the grid:  some customers would be willing to save (or even make) a few dollars by letting the grid utilize the EV for power supply pretty much anytime, whereas other customers wouldn’t want to risk depleting the EV batteries (and hence EV range) for any price.

The Better Place business model has many interesting and compelling aspects to it – recurring revenues, different price points and subscription packages – but it has one very scary element:  there is no avoiding its capital intensity.

In essence, Better Place strives to become an unregulated utility, with massive infrastructure deployment in its parking recharge posts and service stations.  Better Place needs to gain sufficient critical mass of customers in relatively dense geographic areas in order for the infrastructure investments to pay off.  Over time, Better Place can stitch together multiple clusters into pan-reginoal and eventually national ubiquity.

Although smart money is making a big bet on Better Place, only time will tell.  Be on the lookout for a Better Place regional pilot taxi program in the San Francisco Bay Area in early 2011.

Will your Utility be ready for your Networked EV?

Yes, your electric utility will be ready to charge your new electric car if you live in the right city.  Your odds improve if you live in one of 18 cities, own a house that uses air conditioning, has a garage, and have new underground power lines. If you live in an apartment with no garage, especially in a non-priority city, then get ready to be a brave pioneer.

I recently invested a day listening, interviewing, and networking with forward thinking utility executives and some of the smartest people in the smart grid business at GTM Research and Greentech Media’s Networked EV conference.

Nissan has started shipping the LEAF. Chevrolet has handed car keys to early Volt customers. Forty thousand new electric vehicles will be on the U.S. highways by the end of 2011. Charging these vehicles could be the equivalent of powering another 40,000 houses. Since the sub-prime mortgage crisis has left that many houses empty, you would think that charging 40,000 cars should raise no concerns. Charging one million by 2015, however, is both a challenge and an opportunity.

Utility executives are raising concerns and conducting PR campaigns. They want to make sure that they are ready, that no neighborhood blackouts happen, and that they make money charging these electric cars. Early Prius sales were concentrated to certain communities; it will be the same story with electric cars. For example, universities and tech centers will have a concentration of EVs that will lead utilities to install smart meters, add smart grid software, and add $9,000 transformers. In many cases, public utility commissions must support these upgrades so that utilities make money charging EVs.

Even morning charging at work or public spots is fine with most utilities. Peak demand is often in the afternoon and early evening. It greatly helps that all electric cars, from LEAFs to Volts, use smart charging. Charging does not start when you plug-in. It starts based on your preferences, such as charging at lower night rates. With a couple of clicks on your smartphone app, night preferences can be overridden with your request to immediately charge.

Temporary TOU tiered pricing will be tested in cities such as San Diego to see if people are encouraged to charge off-peak. Some lucky test households will pay super off-peak rates that are only 1/6 of peak rates when charging their new plug-ins in San Diego. Money incentives and the simplicity of smart charging should lead to most charging being done off-peak.

Eighteen cities from San Diego to Seattle, from New York to Raleigh, have been preparing for the deliver of thousands of electric cars by installing 15,000 public charging stations as part of a DOE Ecotality project. Independently, thousands of home charging stations are being installed by EV drivers.

Greg Haddow with SDG&E in San Diego described how they have evaluated best locations for public charging considering geographies of early buyer interested as reported by their customers and automakers, employment centers, and strategic areas of public use. Starting this December, ten stations per week will be installed, with quantities increasing until 2,500 are installed.

Electric vehicle interest has been strong in areas of urban density, so SDG&E has engaged with many apartment and condo complexes. No two multi-unit dwellings have been the same in parking structures, renter/owner allocation of spaces, meters, panels, and power currently available to the complex. Some EV enthusiasts have been surprised to learn that their rental agreements prohibit EVs or use of parking power. Condo CCRs vary.

Electric utilities have already successfully handled bigger challenges than charging EVs.  They have added underground lines, new transformers, and distribution to handle new real estate development including hundreds of McMansions, each demanding more juice than even a Tesla. Utilities are upgrading grids and infrastructure to support megawatts of distributed solar. Electric utilities take on new industrial parks with hours of surges in demand for electricity.

PG&E with 5.1 million electricity customers was ranked the greenest utility in U.S. by Newsweek 2009 and 2010. It has developed three scenarios to support 220,000 to 850,000 plug-in vehicles by 2020 in its service area. Kevin Dasso, Senior Director of  for PG&E, contrasted two neighborhoods where there is a concentration of those ordering Nissan LEAFs and Chevrolet Volts – Silicon Valley and Berkeley. New developments in Silicon Valley will be easier. The distribution infrastructure is already there to support larger air conditioned homes, newer underground wiring, and newer transformers.  A plug-in hybrid will not equal the demand of one large home. Berkeley homes are supported with older infrastructure, less likely to have air conditioning. One battery-electric car could create more demand than one home.

Yes, your electric utility will be ready for your new EV. If you live in an older neighborhood with energy-efficient homes, some planning and upgrading will be needed. The impact will be less than adding new developments, new industrial parks, and even high-growth of solar power. Most charging will be done off-peak, allowing utilities to run their most efficient power plants 24/7 and make better use of nighttime wind-power. The key to off-peak charging will be the incentives of TOU pricing and the fact that your networked EV is smart enough to charge when rates are lowest.

For a nation that is 95 percent dependent on petroleum for transportation, the chance to use home grown energy should be a blessing, especially in 70 percent efficient electric drive systems, instead of 15 percent efficient gasoline engine drive systems. Done right, your electric utility will make money. Most utility generation assets are underutilized at night when home charging is ideal; generation is underutilized in the morning when workplace charging ideally occurs.

EV Economics are getting interesting

EVs are getting interesting.  With the Nissan Leaf this year, Ford planning to release its Focus EV in 2011, and the Honda Fit EV scheduled for 2012, the 100 mile range EV class will provide consumers with several choices within a couple of years.

So it’s time to take a look at whether EVs are a good deal for consumers.   It took a bit work to analyze but the results were worth it.  The initial step is to review the key drivers affecting consumer economics.

First is upfront cost for the EV, the charging station, and the incentives being offered.  The EV costs more, even after vehicle and charging station incentives.  I estimate the additional cost at $7,334 for a Nissan Leaf versus a basic Toyota Camry.

Second is annual cost.  A Camry gets 24.5 EPA miles per gallon.  A Nissan Leaf, by my estimate, will get about 3 miles per kWh.  So what matters is how much a driver drives and the cost of electricity.  The average driver drives 15,000 miles per year, or 41 miles per day, which should be reasonably feasible in an EV.

Electric costs are a big factor.  Retail rates nationwide are something like 11 cents/kWh.  In high cost states like California, without time-of-use metering, costs are 15 cents/kWh and higher.  I’m a SMUD customer with an old meter.  I’m into Tier 2 consumption and if I charged up tonight it would cost me 17.55 cent per kWh.   But wholesale, nighttime rates are dramatically lower.   One wholesale electric price forecasting company that serves electric traders shared their outlook for the next 12 months with me:

Quarterly forecast prepared 12/3/2010, Off-peak prices

period        NP15 (Northern California)
2010-4      3.3 cents/kWh
2011-1      2.7 cents/kWh
2011-2      2.2 cents/kWh
2011-3      3.3 cents/kWh

These prices may seem amazingly low but they are, in fact, realistic.  Thanks to the shale boom natural gas is being delivered to  power plants for $4.40 per mmBtu.  And the power plants setting prices throughout the western US are modern combined cycle units with heatrates around 7,200 Btu/kWh. (4.40 * 7200 / 1000 = 3.2 cent/kWh).  In Northern California alone on Dec 3 there are over 4,000 unload MW of these plants.  That’s enough to charge 1.3 million EVs consuming 3 kW each.

Tying the analysis together I computed the IRR of owning an EV under three scenarios.

  • In scenario 1 my utility is serious about promoting EVs and they flow cheap nighttime power to me at a 5 cent/kWh rate.  They can do this with their new smart meters; at night they have plenty of distribution capacity; and they would make some money.
  • In Scenario 2 I pay roughly the national average for power, say 11 cents/kWh.
  • In Scenario 3 my utility does nothing and I have to pay Tier 2 rates — 17.55 cents/kWh.

I computed when I break-even, or when my fuel savings equal the extra cost of the EV, and my IRR, or the return on my initial investment after I’ve driven 105,000 miles (this is 7 years at 15,000 miles per year).  The results are presented below:

Scenario                 Break-even years      IRR at 105,000 miles
1  (5 cent/kWh)                 3.9                                17 %
2  (11 cent/kWh)              4.8                                 11%
3  (17.6 cent/kWh)          6.2                                 3%

At a 17% return the EV option is pretty compelling and my local utility can make it happen, if they really want clean energy technology.

At the national average rate 11% isn’t bad, and early adopters may find EVs attactive.

And under my current personal rate schedule, EVs aren’t interesting.

That said, with a bit of creative utility rates, and leveraging the big smart meter investments being made, EV can be a hit.  And if they are a hit car companies with early products, like Nissan, GM, and Ford can pick up market share.

At the national level this makes great sense.  Every EV driven will displace over 600 gallons of gasoline per year, virtually all of which is produced from imported oil.  This reduces our balance of payments and trade deficits and improves our security situation.  Maybe a higher federal incentive would be cost effective and should be pursued?

Disclosures: none
Credits:  Price forecast and electric data courtesy of Plexos Solutions LLC and its weccterm forcast.

GE Buys 12,000 Chevrolet Volts

GE Announces Largest Single Electric Vehicle Commitment

GE will purchase 25,000 electric vehicles by 2015 for its own fleet and through its Capital Fleet Services business – the largest-ever electric car commitment. GE will convert most of its 30,000 global fleet and will partner with fleet customers to deploy a total of 25,000 electric vehicles by 2015. GE will initially purchase 12,000 GM vehicles, beginning with the Chevrolet Volt in 2011, and will add other vehicles as manufacturers expand their electric vehicle portfolios.

Chevrolet Volts will roll off production lines this month and other automakers are bringing electric vehicles to market. As this occurs, GE is in a strong position to help deploy the supporting infrastructure to help its 65,000 global fleet customers convert and manage their fleets.

Wide-scale EV use to bring GE $500 million in near-term business

GE owns one of the world’s largest fleets, operates a leading global fleet management business, and offers a portfolio of product solutions including charging stations, circuit protection equipment and transformers that touch every part of electric vehicle infrastructure development. This enables GE to lead wide-scale electric vehicle adoption and generate growth for its businesses.

“Electric vehicle technology is real and ready for deployment and we are embracing the transformation with partners like GM and our fleet customers,” said GE Chairman and CEO Jeff Immelt. “By electrifying our own fleet, we will accelerate the adoption curve, drive scale, and move electric vehicles from anticipation to action.

“We make technology that touches every point of the electric vehicle infrastructure and are leading the transformation to a smarter electrical grid,” Immelt said. “This transformation will be good for our businesses and for our shareowners. Wide-scale adoption of electric vehicles will also drive clean energy innovation, strengthen energy security and deliver economic value.”

GE businesses including Capital Fleet Services, Energy and GE (NYSE: GE) will purchase 25,000 EV including electric cars and plug-in hybrids by 2015 for its own fleet and through its Capital Fleet Services business – the largest-ever single electric vehicle commitment. Licensing & Trading will benefit from an emerging electric vehicle market that could deliver up to $500 million in GE revenue over the next three years. This includes rapidly developing markets for GE’s charging station, the WattStation.

GM CEO Dan Akerson said, “GE’s commitment reflects confidence that electric vehicles are a real-world technology that can reduce both emissions and our dependence on oil. It is also a vote of confidence in the Chevrolet Volt, which we will begin delivering to retail customers by the end of this year. We are pleased that the Volt will play a major role in this program, which will spur innovation and benefit our companies, our customers, and society as a whole.”

FedEx Chairman, President and CEO, and Electrification Coalition member Fred Smith said, “With more than 16.3 million vehicles in operation in 2009, the nation’s fleet can drive initial ramp-up scale in the battery industry and OEM supply chains. By buying these vehicles, GE is helping ramp up production which will help lower the price of vehicles and their components and make electric vehicles more visible and acceptable to the public at large. This is good for GE, good for our economy, and good for our nation.”

GE also announced today two electric vehicle customer experience and learning centers to provide customers, employees and researchers first-hand access to electric vehicles and developing technologies. One will be located outside of Detroit, in Van Buren Township, Michigan, as part of GE’s Advanced Manufacturing and Software Technology Center. The other will be located at GE Capital’s Fleet Services business headquarters in Eden Prairie, Minnesota, with several other centers to be announced in 2011. The centers will monitor and evaluate vehicle performance and charging behaviors, driver experiences, service requirements, and operational efficiencies, while also affording the opportunity to experience a variety of manufacturers and models, and gain insights on electric vehicle deployment.

GE is launching this comprehensive electric vehicle program as part of its ecomagination business strategy to accelerate the development and deployment of clean energy technology though innovation and R&D investment. In support of the announcement today, an electric vehicle readiness toolkit has been launched on to help municipalities, customers, and individuals prepare for wide-scale electric vehicle deployment.

GE Bets $10 Billion on Digital Energy

Johnson Controls SAFT Lithium Batteries

By John Addison (10/12/10)

AT&T (T), Xcel Energy (XEL), Johnson Controls (JCI), Southern California Edison (SCE), and New York Power Authority have all ordered Ford Transit Connect Electric. These pure battery-electric vans have an electric charge range of 80 miles and are a great fit for many fleet, small business, and delivery applications. Although Nissan and Chevrolet are the center of EV attention, fleets are the early adapters of new vehicles.

In the United States, fleets control some 14 million vehicles. Some fleets placed initial orders for 10 or 20 Transit Connect Electrics; bigger orders could follow in 2011. JCI has ordered 20 Transit Connect Electrics to be part of its global fleet of 19,000 vehicles.

At the heart of these compact Ford electric vans are 28 kWh lithium battery packs made by a joint venture of SAFT and Johnson Controls, #1 maker of automotive batteries, a tier 1 auto supplier, and leader in building efficiency. The other day, I interviewed Mary Ann Wright, Vice President of Global Technology and Innovation Accelerator for Johnson Controls, to better understand the future of electric vehicles and advanced batteries. Johnson Controls is one of the 100 largest corporations in the U.S., with over 60,000 employees.

Partnerships are critical to success in electric vehicles. As the world’s largest manufacturer of lead-acid batteries, Johnson Controls (JCI) works closely with its material suppliers. To accelerate development of lithium batteries, R&D and manufacturing is a joint venture of Johnson Controls – SAFT (JCS).

For speed to market, Ford has partnered with Azure Dynamics (AZD), who integrates their drive system and the Johnson Controls – SAFT (JCS) lithium batteries into the Transit Connect chassis, which is also available in gasoline and CNG versions. My test drive of the Ford Transit Connect Electric demonstrated that it is practical for many fleet applications. JCI owns over 3% of AZD.

Since 2007, Ford and Johnson Controls have worked with leading electric utilities and EPRI. In 2007, Ford announced a partnership with Southern California Edison, the electric utility with the nation’s largest and most advanced electric vehicle fleet. The partnership is designed to explore ways to make plug-in hybrids more accessible to consumers, reduce petroleum-related emissions and understand issues related to connectivity between vehicles and the electric grid. For the 3-year study, Ford Escape Plug-in Hybrids have been heavily used. It will not be until 2012, that consumers can order plug-in hybrids from Ford.

Vice President Wright told me that driving lithium battery packs down in price from industry numbers like today’s $700/kWh to a future of $200/kWh would price electric car on par with cars powered with internal combustion engines. Progress is being made at every level. Manufacturing volume will be a key driver.

The drive for cost reduction will greatly benefit consumers and fleets; cost reduction initiatives will be a mixed blessing for battery suppliers. Last year, Ford had announced that JCS would supply the lithium batteries for its 2012 Plug-in Hybrid which Clean Fleet Report forecasts will be a new Ford Focus PHEV. Now JCS will not be the supplier. Ford has decided to make its own battery packs, and have different manufacturers compete to supply the cells. JCS is the winner for the Transit Connect Electric; LG Chem’s Compact Power is the winner for the Ford Focus Electric; competition has been intense for the PHEV. It appears that Ford has selected the PHEV cell supplier, but has not yet made the announcement.

In this decade, Nancy Gioia, Director Ford Global Electrification, told me that she would like to see Ford reach $250/kWh and have hybrid and electric vehicles represent 10 to 25% of total Ford sales. Ford is making no guarantees for such an ambitious program. Ford lithium cell providers are dealing with a tough customer that could deliver high volumes and continuous improvement.

For $28 billion Johnson Controls, Ford is an important customer, but only one customer. BMW and Mercedes are already using JCS lithium batteries in hybrids. In this decade, JCI sees the biggest opportunity in advanced start-stop, mild, and full hybrid vehicles; with pure battery-electrics being a smaller opportunity. By 2025, Ms. Wright only forecasts 3% of cars being full hybrid and electric.

Look inside a hybrid car and you will see two types of batteries: advanced nickel metal or lithium batteries for the electric motor and a 12V lead-acid battery for the auxiliaries. Lead-acid batteries will continue to be used in hundreds of millions of vehicles including hybrid and those with only an ICE. Johnson Controls continues to advance lead-acid batteries with new VARTA Start-Stop technology. These new batteries are optimal for the micro hybrids now on the road in Europe in over a million cars and coming to the USA. Turning off an engine reduces fuel consumption up to 12% when a vehicle is stationary, such as red lights and rush-hour gridlock. BMW was first to use the micro hybrid approach, now Volkswagen, Audi and others are including start-stop in some models.

When I toured Johnson Controls in Milwaukee, Wisconsin, last year, advancements in both lead-acid and lithium batteries were conspicuous. JCI told me that 98% of the materials in both battery technologies are recycled. As a world leader in energy efficient buildings, Johnson Controls will have the opportunity to repurpose lithium batteries in stationary applications before materials recycling.

Improved battery technology will continue to enable vehicles to use less fuel per mile, show us bluer skies with less air pollution, and reduce our current 97% dependency on petroleum as the only way to fuel a car.

By John Addison, Publisher of the Clean Fleet Report and conference speaker. The author has no position in the stocks mentioned in this article.

California’s Electric Transit Ride

Proterra Foothill chargingstation 300x195 California’s Electric Transit RideBy John Addison

People take hundreds of million electric rides each year in California. The big news is not the electric car drivers or those happily screaming on Disneyland rides; the larger story is network of connected electric rail, buses with cutting edge electric drive systems, and electric cars.

No LA and SF are not yet NY or Paris, but they are showing off a future of low-carbon and zero-emission transportation solutions. A couple of weeks ago, I went to the highly informative CAPCOA Climate Change Forum which included a couple of hundred leaders from California government, industry, and non-profit. Many of these people have decades of success in improving the health of our air, water, and environment. Now they are taking on the tough challenge of reducing the greenhouse gas emissions of a state that emits more than entire nations such as Spain, or Saudi Arabia, or hundreds of smaller countries. The number one GHG emitter in California is vehicles. Add the emissions of its oil refineries and you have the majority of greenhouse gas emissions in California.

Electric Light-Rail and Electric Trolley Buses

To the rescue are major public transportation operators who are electrifying their rail and bus fleets. These transit operators are unclogging the roads for those who really need cars, reducing air pollution, and reducing California’s carbon footprint.

In fact, I got to the Climate Change Forum on an electrically powered bus. I walked two blocks and boarded a trolley bus connected to special overhead power lines. The electricity is from hydropower. San Francisco has over 300 electric trolley buses, 40 cable cars that use under-street cables powered by electric-motors, an extensive electric light-rail system, and 460 diesel buses which are increasingly hybrid-electric. Like most cities, no one mode is best for the 235 million rides taken in SF each year; what’s best is a portfolio of solutions.

Electric light-rail is popular in many cities. Sleek cars on rail invite people to hop on and off. On their dedicated rail lines they are often the fastest way to get to a city’s major destinations. The rail cars often last 40 years compared to diesel and trolley buses which may only last 12.

Only a handful of transit operators still use the electric trolley buses with rubber-tired vehicles powered by electricity collected from fixed overhead wires. San Francisco and Seattle actively use trolley buses; cities like Boston and Dayton have a few. These buses, connected to overhead electric lines, fight through the car traffic, stop at every red light and stop sign, and require slower boarding than light rail. Transit operators no longer like electric trolley buses. They like the long life, speed, and ridership appeal of electric light-rail. Trolley buses cost more to buy and maintain than diesel hybrid-electrics. Unfortunately, adding a light-rail line can cost $20 million per mile; in a city like SF, $60 million.

A good combination for public transportation is light-rail corridors for the most heavily traveled segments that is well integrated with bus service, bicycling, walking, car sharing, electric car parking, and other modes.

Hydrogen Fuel Cells Extend Electric Range

My wife and I are planning to buy an electric car with 100 mile charge range. That more than meets our daily needs. If you’re driving a 40-foot bus full of people for 12 to 16 hours daily, however, you probably need more than batteries to extend the range to 300 to 400 miles. Hydrogen fuel cells compliment lithium batteries by freeing electrons from hydrogen to feed electric motors and batteries added electricity. Finish the long day with a 10 to 15 minute fill-up of hydrogen and your ready for another day.

AC Transit is currently servicing some Berkeley and Oakland routes with 4 hydrogen fuel cell buses with pure electric drive systems with 8 more on order for the Bay Area. These workhorses go for hours on end, even taking battery draining steep grades. These Van Hool buses use Siemens electric motors, EnerDel lithium batteries, and UTC fuel cells. AC Transit Director Jaimie Levin reports that their UTC fuel cells have worked so well, that they will redeploy several of the older fuel cells in the new buses, even though they have in excess of 7,000 hours of continuous operation on each system, without any failures or repairs, or loss of power.

The AC Transit fuel cell buses provided an inspiration for the Winter Olympics. At CAPCOA, I talked with Dr. Paul Scott, ISE Chief Scientists about the 20 hydrogen fuel cell buses that were used in Whistler for the Vancouver Winter Olympics. Dr. Scott told me that those BC Transit buses have successfully logged 500,000 km in a few months. I estimate that they provided over 100,000 rides during the Olympics. The Vancouver New Flyer buses use Ballard fuel cells, Siemens electric motors, and ISE drive systems and software.

LA Metro subway, light-rail, CNG buses, 40% electric, candidates 300kW pilot

Metro serves a vast geography that extends to the far reaches of the Los Angeles basin.I rode their system for a week, traveling from remote Pasadena to the LA Convention Center faster than I could drive.

At the heart of Metro is an electrically powered subway and light-rail system. From those main arteries, 2,500 CNG buses reach streets and neighborhoods that could never be covered with electric rail. In the long term, up to 40 percent of these CNG buses could be replaced with battery-electric buses for rush hour coverage. Although CNG buses have a range of at least 300 miles and can stay on road for 16 hours daily; battery electric buses are well suited for six to 8 hours of daily use during peak service periods. LA Metro plans to pilot test an electric bus with 300kW lithium battery pack, giving it 100-plua mile range appropriate for peak hours.

Foothill Transit Goes Electric

The Ecoliner silently glides along the streets in San Gabriel Valley giving passengers a break from the famous grid-lock traffic that extends east from Los Angeles for a hundred miles. The Ecoliner is Foothill Transit’s new pure battery-electric 35-foot bus built by Proterra, which is headquartered in Golden, Colorado. The Proterra BE35 is propelled with UQM electric motor using innovative lithium batteries that keep the big bus moving for 3 hours and are then quick-charged in ten minutes. The buses range is extended because the Proterra is aerodynamic made with lightweight composite material.

Proterra’s system allows a battery electric bus to pull into a transit center terminal or on-route stop and automatically connect to an overhead system that links the bus to a high capacity charger without driver involvement, even while passengers load and unload. The charging station technology includes advanced wireless controls that facilitate the docking process and eliminate any intervention from the driver. Proterra’s FastFill™ charge system is comprised of the software and hardware to rapidly charge the TerraVoltTM Energy Storage System from 0% to 92% energy charge efficiency in as little as 6 minutes.

Under California’s zero-emission bus program, 1,000 zero-emission (fuel supply to wheels) buses will be in service by 2020.

Commuter Rail and HSR

Metrolink rail and the Subway link some major Southern California light-rail and bus systems and BART and Caltrain link some Northern California systems. As a rider of these systems, I can testify that navigating through multiple systems is often slow and confusing. Using Google Maps on my smartphone makes the navigation possible.

In the future, California’s 25 major transit systems will be linked with an 800-mile high-speed rail network. Voters approved the system because it is a less expensive solution than widening highways and expanding airports. Because it depends on local and public-private partnership funding, as well as state and federal funding, it will be built in sections. First online are likely to be areas that are currently overwhelmed with passenger vehicles crawling on freeways that should be renamed “slowways.” Likely to be among the first in service are the Orange County – Los Angeles section.

Big Oil Fights Back

California is electrifying cars, transit, and high-speed rail at the same time that it expands its use of renewable energy including wind, solar, geothermal, hydro, agricultural waste, and even ocean power. The transition may reduce the state’s overwhelming dependency on petroleum for over 97 percent of all transportation. By comparison to other nations, California is the third largest market for petroleum. Only the USA as a whole and China use more. California uses more petroleum than Japan, Germany, India, and other nations.

Reducing the use of petroleum, of course, would cost oil companies billions. Texas oil companies are spending million to encourage Californians to vote “yes” for Proposition 23 this November. The proposition would require the State to abandon implementation of a comprehensive greenhouse-gas-reduction program that includes increased renewable energy and cleaner fuel requirements, and mandatory emission reporting and fee requirements for major polluters such as power plants and oil refineries, until suspension is lifted.”

Prop 23’s biggest backers, Valero and Tesoro, are responsible for 16.7% of California’s emissions, according to the California League of Conservation Voters. Prop 23 will allow California oil refineries to avoid paying over one billion dollars for carbon emissions, so they are attacking California Global Warming Solutions Act supported by the majority and California’s Republican Governor. Prop 23 is promoted as a jobs creation proposal, but a recent UC study reported that California’s successful efforts to become cleaner and more efficient have saved us money and grown the economy, resulting in the creation of 1.5 million jobs with a total payroll of over $45 billion. Opposition to Prop 23 fears that the law would open a Pandora’s Box of lawsuits against anything that reduces greenhouse gas emissions. CLCV Prop 23 Details

Currently California leads the nation with 25,000 electric cars on the road and thousands of new electric charge stations are scheduled for installation. Hundreds of millions of rides are taken on electrified light-rail and commuter rail. Zero emission buses are on the roads. Renewable energy is growing by gigawatts. In a few weeks, we will learn if California moves ahead with efficient and electrified transportation, or if its initiatives are derailed.

All Electric Cars – The Impact of the Little Guys

by John Voltz
Recently, I made a small diversion from my walk to the office in San Francisco and took a ride in a Wheego. The Wheego was being showcased at Justin Herman Plaza right across from the Ferry Building not far from my office in the heart of the city’s Financial District. The Wheego is a brand new all-electric car from an interesting manufacturer in Georgia. Locally, the Wheego is sold at Ellis Brooks Auto Center. This intrigued me. Ellis Brooks is a venerable car name in San Francisco, having been around for 40+ years. I still remember their radio jingle from my childhood, “See Ellis Brooks today for your Chevrolet, corner of Bush and Van Ness . . .” The Ellis Brooks dealership now sells pre-owned cars and is no longer associated with GM. It has just begun selling the Wheego. Before I took my test drive, I had a chance to talk to Ellis Brooks’ grandson, John Brooks, about why they decided to sign up with Wheego. He seemed comfortable with the manufacturer in large part because the car was assembled from components made by manufacturers already in volume production of vehicles.
So how was the ride? Pretty good. It was quite roomy with a nice, quiet ride and a firm feel of the road. Allowing for the fact that it is a small two-seater coupe, it had the feel of real a car – not a golf cart or an experiment.
Now I should back up for a minute and explain that I have long been a skeptic that there will be significant adoption of all-electric vehicles any time soon. But this car changed my mind a bit.
My skepticism about this has been based on looking at the passenger car market and thinking about what it takes to succeed in that market. Then I compared the passenger car market to other potential electric vehicle markets.
Passenger cars have been the province of integrated high volume manufacturing, low margins, very high quality expectations (especially fit, finish and amenities), and very high service and support expectations. In short, the barriers to entry for this market seem quite daunting, especially when compared to the delivery truck market or the ATV market. These markets have significantly lower volumes, less integrated manufacturing (many manufacturers are essentially final assemblers), much lower quality expectations on fit, finish and amenities, and lower service and support expectations.
There are some low-volume passenger car manufacturers, but all make vehicles aimed at high priced specially markets, not low to mid priced daily drivers. There is another big difference between the passenger car market and the delivery truck market – what delivery truck buyers want fits really well with what electric vehicles do best:

  • predictable low to medium mileage daily duty cycle
  • low noise
  • excellent torque
  • low total cost of ownership
With an electric delivery truck, you don’t need to worry that you’ll ever need to drive from San Francisco to L.A. to visit your sick aunt. In fact, for commercial trucks, limited range can be a plus – there’s no way for trucks to wander very far. With passenger cars, limited range is a big reason not to buy.
Given this, I have felt for some time that we wouldn’t see significant adoption of all-electric vehicles until we started seeing real traction in markets like delivery trucks. I expected passenger cars (and delivery trucks too to some degree) would likely first go hybrid, then shift the hybrid balance to more electric (e.g. using fuel to run a generator to extend the electric range), and then later shift to all electric. These successive market advances would be linked to gaining manufacturing scale, cost down of batteries and other components critical to all-electric vehicles (though batteries is the big one).
My Wheego ride today and my chat with the dealer changed my view. Here was an all-electric car, at a regular car dealer, with a high but regular car price, from a car manufacturer that nearly appeared out of thin air. You see Wheego as a manufacturer is just a final assembler. From my initial quick look, Wheego came on the scene as a passenger car player in 2007 or so, backed by the former founder of MindSpring. Before then, it was exclusively an electric golf cart manufacturer. So it’s really been an eye blink in automotive time scale (2007 to 2010) to see cars turning up at dealerships. Granted, the model at dealers today and the one that I test drove is just a medium speed vehicle (MSV) with a top speed of 35 MPH and not for highway usage (more on that later). But this was still impressive to me.
Wheego gets the car bodies from a big manufacturer in China (a body that is currently used for gas drive cars in other international markets). It gets its motors from a Wisconsin electric motor manufacturer and its motor controller from Curtis Instruments who makes controllers for forklifts. Maybe the truck style manufacturing could work for passenger cars after all.
In addition, I began to think about the current passenger car market for all-electrics. There probably is a significant market for all-electric vehicles, even in the current economy, and even if they aren’t strictly ‘economic’ on a dollar per mile basis compared to gas or hybrid cars. Think about how much the early EV1 cost in its day[1], and how people still rave about it years and years later. In my revised view, I think there will be a small but significant true believer market in the U.S. for all-electric cars. Yes, the big boys are coming – Nissan with the Leaf, Chevy with the Volt, Ford with the Focus EV, but not for a year, maybe two, maybe more. In the mean time, the true believer market will be served by the likes of Wheego, Think, Smart, and others. Even after Nissan, Chevy, Ford and other big car companies arrive in the market, the early entrants may have continued success. Plus they may have customers and EV infrastructure that car manufacturers with non-existent, dormant, or failing EV programs may look to acquire. There is no substitute for firsthand customer knowledge.
The Wheego I drove was a medium speed vehicle (MSV) with a max speed 35 MPH and a real world range of 40 miles. The highway speed version is on the way – due to arrive this summer. It is currently undergoing NTHSA cash testing. It will have a top speed of 65 MPH and a range of 100 miles. The high speed vehicle (HSV) Wheego will not be a lot different than the MSV. Differences include: lithium ion batteries, airbags, and some additional structure supports to the body.
I now see the all-electric car market developing from two converging paths – the true believer all-electric passenger car market and the more economically driven all-electric truck and fleet vehicle markets. The true believer market will drive visibility and customer expectations, and provide valuable real world feedback about what electric car consumers care about and will pay for. While the truck and fleet markets will help dive down cost, I expect both will speed the adoption all-electric cars to a significant portion of the passenger car market.
So for you true believers out there, price before incentives for the MSV Wheego is ~$19K (and it’s eligible for a 10% Federal tax credit) putting the MSV price around $17K before any state or local incentives. Prices for the HSV have not yet been announced, but the target price is in the $30K range (and it will be eligible for a $7500 federal tax credit) putting the net cost of the HSV before state and local incentives in the roughly in the mid $20K range.

[1] The EV1 had a nominal low price of $34K or ~$48K in today’s dollars though it was never sold only leased. Reportedly production costs were $80+K per vehicle at the time. Initial lease costs were $640/month or $900/month in today’s dollars. Later this dropped to $350/month or $ 500/mo in today’s dollars with many different incentives layered on.

PG&E to Smart Charge 219,000 Electric Vehicles

By John Addison (originally published in the Clean Fleet Report)

By 2020, 219,000 customers of PG&E (NYSE: PCG) may say goodbye to those trips to the gas station. No more spinning dials at the pump – $20.00, $40.00, $80.00, etc. Instead drivers will conveniently plug-in their electric cars at home or work. The fill-up will be electrons, not gasoline.

Across the country, electric utilities are preparing to offer smart charging boxes for the garage and charging stations for work and downtown locations. For a fraction of gasoline cost, you will be able to charge plug-in vehicles.

Pacific Gas and Electric (PG&E), for example, is a utility that is planning to service between 219,000 and 845,000 battery electric cars and plug-in hybrids by 2020, under three different planning scenarios presented at Greentech’s The Networked Grid Conference. PG&E currently provides electricity to 5 million customers, including a few thousand that currently drive electric cars. Currently, most of these electric cars are 25-mile per hour neighborhood vehicles that are popular in college and university towns. A few hundred can zoom past you on a freeway, such as the Tesla Roadster.

This year, Newsweek ranked PG&E as the greenest utility in the country due to its strong commitment to customer energy efficiency programs and renewable energy (RE) programs. PG&E serves 15 million people in northern and central California with 123,054 miles electric distribution lines needed to cover 70,000 square miles of its service area. Natural gas is 46 percent of PG&E’s source for electricity, nuclear 20 percent, hydro 16 percent, and out-of-state coal only 2 percent.

Renewable Energy > Coal + Natural Gas by 2020

Renewable energy is 14 percent of PG&E’s total delivered electricity today. It will miss its legal requirement to be at 20 percent by the end of 2010 due to NIMBY roadblocks to large solar thermal plants in the desert. PG&E needs approvals to install the high-voltage lines necessary to bring utility-scale RE to PG&E customers, thereby adding to its current 18,610 circuit miles of interconnected transmission lines.

Hal LaFlash, PG&E Director of Emerging Clean Technologies, outlined how the utility will have 34.8 TWh of RE in 2010 and 77.6TWh of RE in 2020, the year when California utilities must generate 33 percent of their electricity from RE. By 2020, renewable energy may be the utility’s #1 source of energy. The RE mix will be (1) solar thermal, (2) photovoltaics, (3) wind, (4) geothermal, with bioenergy and ocean adding to the total.

With terawatts of nighttime wind power, PG&E may have more electricity at night than it needs. One million electric vehicles could easily be supported provided that they charge off-peak, preferably at night. Smart charging allows customers to plug-in; yet not have charging begin until a preferred time, such as when excess electricity is available to the grid. PG&E hopes to secure regulatory approval for time-of-use pricing so that customers have an incentive to charge at night.

Utility executives worry that people will charge whenever they feel like it. Since charging an electric car is like powering an entire home, the concern is valid. People are still buying gas guzzlers as pump prices rise, so they many may ignore price incentives to charge at night. So far, early customers of plug-in vehicles have been environmentally concerned, and have shown a preference for charging with renewables including their own solar rooftops. Automakers, utilities, and regulators are working to make it easy for new electric car customers to select night time and even renewable energy charging through web browsers, smart phones, and even vehicle dash displays.

Smart Charging and Renewable Energy

Between the electric cars and renewable energy will be a smart grid. Every vehicle charging device will include a smart meter. PG&E is leading the nation with 1.6 million smart meters now installed. It is installing an average of 13,000 per day, and will have 10 million smart meters installed by 2012.

Andrew Tang, PG&E Senior Director of the Smart Energy Web, expects 35 different models of plug-in vehicles to be available within the next two years. PG&E actively meets with auto makers to make sure that smart charging networking is compatible and in place. Only some homes and communities are now ready with dedicated 240V/30A circuits for the 4-hour charging that electric car leaders, such as Nissan recommend.

Although smart charging provides for two-way communication, electricity will only be delivered one-way from the grid to the vehicle. Mr. Tang expressed skepticism about vehicle-to-grid (V2G) being cost-effective and acceptable to customers and automakers, even though PG&E has done V2G demonstrations within its own fleet, with Tesla, with Google, and elsewhere. PG&E is looking at MW grid storage alternatives such as pumped hydro and compressed air, such as the 300MW compressed air storage in Kern Country that PG&E has applied for a federal grant. Sulfur Sodium batteries that could scale to hundreds of MW were also presented at the conference.

Infrastructure issues may be greatest in communities that are now adopting hybrid cars at fast rates. For example, in Berkeley, 18 percent of new car sales are hybrids. As electric cars sell briskly in some communities, PG&E will likely need to upgrade substations to handle the increased distribution of electricity.

With the advanced planning outlined in PG&E’s presentations and with regulatory support for time-of-use pricing, renewable energy, and high-voltage lines, PG&E will be ready to power a new generation of vehicles for a fraction of the cost of gasoline. Increasingly, these electric cars will be powered by solar, wind, and other renewables.

By John Addison who publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

Electric Vehicle Charging Passes Inspection

Plug-in Hybrids (PHEV) and Battery Electric Vehicles (EV) are destined for success. Thousands of key players have converged at the Plug-in 2009 Conference in Long Beach, California. In the opening workshop they talked about giving the customer a pleasant, easy-to-use, no hassle, safe and cost effective experience. The key players included auto makers, electric utilities, and community leaders who are installing thousands of vehicle charging stations.

President Obama has challenged the industry to sell or lease 1,000,000 PHEV & EV by 2015. This is an a challenge for the United States which currently has about 40,000 electric vehicles on our road, with less than 2,000 able to sustain freeway speeds. The race is on, however, as majors bring vehicles to market that can travel for 40 to 200 miles on an electric charge, not on foreign oil. The PHEV and EV makers include GM, Ford, Chrysler, Toyota, Tesla, BMW, Subaru, Mitsubishi, Smart, Think, and many others.

Given the potential for energy security, a climate solution, and lowering monthly fuel costs, who would want to stop this? Who could? A terrorist needing oil money? An oil executive? A conspiring auto maker? None of the above. The biggest concern is that the number one “speed bump” will be bureaucracy. Enid Joffe with Clean Fuel Connection was in the middle of the first wave of installing 7,500 chargers and in the current challenges of installing chargers from BMW’s MiniE.

Her customers have been caught in the catch-22 of the utility not approving charger installation without a city permit and the city refusing a permit without utility approval. A process that should take a few days and cost a few hundred dollars can take 45 days and cost thousands:

o Apply for license (in person in some locations, online in others)
o Proof of insurance
o City Permit to installer (much easier if charger is a legally categorized as an appliance)
o Utility Contract review
o Electrician installs adapter
o Utility returns to install separate meter

To encourage EV adoption, the City of New York has created a streamline process.

Fleet investment can be significant. They must often add electrical infrastructure, such as expanded switchboards and dedicated circuits.

EV adoption will accelerate if consumers can comfortably deal with one point of contact with a friendly website and friendly people. Easy installation and a modest added charge on their utility bill would be most desirable. It is encouraging that all the stakeholders recognize this and are negotiating solutions.

Also encouraging is common charging plugs, interfaces, and communication protocols. Over 10,000 charging stations are being planned for installation in the U.S. at major employers, busy city streets, busy garages, shopping malls, universities, and other places where people are likely to use their electric vehicles.

Many vehicles are not parked in garages. They are parked in carports, driveways, apartment parking lots, fleet parking lots, and on city streets. As GM readies introduction of its Chevy Volt, it demonstrated a 25-foot cable connector that it will provide with the vehicle. Yes, it will work outside. Getting it wet does not hurt it, or anyone standing in the wet. It adheres to new standards such as SAE J1772 so that it will work with any of the standard charging stations being installed. It communicates, so that a driver cannot forget and drive off while still plugged-in. Little details. Attention to the little details can make us optimistic about a driving future that is increasingly electric.

John Addison is reporting from Plug-in 2009 in Long Beach, California. California is currently home to 25,000 electric vehicles. Several thousand new charging stations are planned for 2010.