SPECIAL REPORT-Power struggles: charging tomorrow’s cars

* Infrastructure hurdles undermine bullish forecasts for EVs

* Switchable battery model not catching on with auto majors

* High capex at time of austerity hinders charge-post model

* Some see market splitting in two for growth

By Gerard Wynn and Kwok W. Wan

LONDON, Sept 10 (BestGrowthStock) – Imagine driving across America
using a fuel so new you have to carry your own supply wherever
you go.

At the start of the 20th century, before the era of
ubiquitous gas stations, drivers did just that as they tested
the limits of cars like the Ford Model T, which ran on gasoline,
kerosene or ethanol and could, if driven carefully, travel more
than 150 miles on a full tank.

Now a new generation of drivers is set to embark on a
similar kind of experiment. Until recently, most electric
vehicles, or EVs as they are often known, have had a range of
just a few dozen miles, limiting their usefulness and appeal.
That’s a big reason the long-talked-about era of electric
vehicles has been, well, talked and talked about for so long
with little real-world progress.

Over the next couple of years, though, tens of thousands of
electric cars will hit the laneways of Europe, the streets of
the United States and the gleaming highways of Asia. These new
battery-powered vehicles have much longer ranges than their
predecessors — up to 250 miles in the case of the Tesla
(TSLA.O: ) Roadster, but mostly about 100 miles — and are likely
to be the first to sell in large numbers.

By 2020, says J.D.Power Automotive Forecasting, annual sales
of EVs will reach 2 million. Banking giant HSBC is even more
optimistic and puts the figure at 9 million. That’s still some
way short of the 61 million petrol- and diesel-driven vehicles
sold around the world in 2009 but a huge leap from the 5,000 or
so EVs sold last year.

But even as these shiny new vehicles take to the road,
serious questions remain about the infrastructure — or rather,
the lack of infrastructure — to charge them. In an echo of last
century’s battle over the best fuel source, the way in which the
coming fleet of electric vehicles will be recharged has yet to
be settled — and all the proposed models have flaws.

Some experts believe EVs should plug in at a driver’s home
or workplace. Others back a global network of roadside
recharging stations. One prominent company is pushing the idea
of petrol station-like outlets where you can zip in and quickly
switch your almost-dead battery for a fully charged one. Another
group advocates avoiding “pure” EVs and the problem of charging
infrastructure altogether, focusing on cars which use both
electricity and gasoline.

The stakes are huge: the pace of the shift to electric
vehicles, progress in the fight against climate change, and a
market which HSBC bullishly forecast this week would grow
20-fold by 2020 to $473 billion — a fifth of the entire
low-carbon economy. [ID:nLDE68511K]

Despite the hype, it’s almost impossible to predict the
format or formats most likely to win the great electric vehicle
infrastructure battle. Model T owners adopted petrol as their
fuel of choice for reasons both obvious — the falling price of
petrol — and unpredictable: prohibition in 1919 forced ethanol
off the market.

The variables today — technology, political interference,
the psychology of car-lovers — are similarly hard to pin down.
“The introduction of electric vehicles is more than a financial
matter,” says U.S. analyst Sam Jaffe, research manager at IDC
Energy Insights. “It’s a big anthropological experiment. There’s
no question that there are drawbacks, but there are also
advantages. It requires a re-setting of mindsets and how that
unfolds will decide who wins the race.”


For a chart showing sales projections for both plug-in
electric cars and non-plug-in hybrids:

For a factbox on charging infrastructure manufacturers:

For a story on Better Place’s Tokyo taxi experiment:

For a special report on Tesla Motors:



The starting grid for the coming EV race is filling up
quickly. Mitsubishi Motors Corp’s (7211.T: ) jelly bean-shaped
i-MiEV has been on sale in Japan since April and will launch in
the United States and Europe over the coming few months. The
Japanese automaker is also making two versions of the car for
French automaker PSA Peugeot Citroen (PEUP.PA: ).

Nissan (7201.T: ) is set to roll out its edgy-looking Leaf in
December, while corporate partner Renault (RENA.PA: ) will start
selling its mid-sized Fluence ZE (for zero emissions) in the
first half of next year.

Europe’s biggest automaker Volkswagen (VOWG_p.DE: ), a late
entrant in the competition, plans to launch all-electric
vehicles in 2013, though it says zero-emission vehicles will
account for 3 percent of sales by 2018.

These “pure” electric vehicles face competition from dual
gasoline-electric cars. Sometimes called extended range cars,
these vehicles can charge at a plug-in socket or switch over to
gasoline, and include General Motors’ Chevrolet Volt, which goes
on sale in the United States from this year for $41,000, and in
Britain a year later.

Will the charging infrastructure be able to keep up with all
those new cars? The question is critical. “If it’s too difficult
to charge an electric vehicle, too inconvenient, the customers
will not buy them,” says Christian Feisst, managing director of
business development for smart grid at U.S. networking giant
Cisco Systems. “Today a lot of the work is around battery
technology and the behaviour of customers. There is not a lot of
work done around the charging technology, or the charging
process itself, nor how to manage charging.”


One company that is sinking millions into technology is
Better Place, a three-year-old California-based firm that has
raised about $700 million from investors and imagines a vast
global network of “switch stations”: gas station-like outlets
where drivers can swap a spent battery with a fully charged one
in a few minutes.

Led by soft-spoken Israeli-born founder Shai Agassi, a
former executive at SAP, the company boasts of having built “the
largest cleantech investment in history”. Last January, HSBC
(HSBA.L: ) bought a 10 percent stake which valued Better Place at
$1.25 billion.

Since earlier this year, the eco firm has been running a
trial in Tokyo using three taxi cabs [ID:LDE6880E5] and will
soon start testing a small network of stations in Israel, where
it says it has deals with 92 corporate fleet owners. It expects
a commercial launch in Israel and in Denmark in late 2011, and
has plans in five other countries, including Australia, China
and the United States.

SPECIAL REPORT-Power struggles: charging tomorrow’s cars