The Business of Plugging-in - Talking Electric Vehicles in Detroit

TALKING ELECTRIC CARS IN DETROIT
The Business Case for Electric Cars
By Steve Purdy
TheAutoChannel.com
Detroit Bureau

Detroit October 13, 2010; The Center for Automotive Research is hosting a conference this week focused on the business case to be made for electric cars. CAR has brought together experts from the ranks of auto manufacturers, suppliers, venture capitalists, power companies, industry analysts and journalists to talk about what the future looks like for plug-in (not hybrid) electric vehicles. Each year it looks more and more like there is no turning back from our drive to electrify our automotive rolling stock. There has been general agreement that in the long-term (30 to 50 years or more) we will all be in fuel-cell electrics, but the transition is still being debated.

We just finished lunch with Michigan’s senior senator, Carl Levin. He courted his audience well voicing tenacious support for electric cars. Though existing government subsidies (up to $7,500 for the first 200,000 full electric vehicles from each manufacturer) help, he insisted, they are not enough to bring electrics from simply niche vehicles to being affordable for the masses.

“We’re pointed in the right direction, “ Levin continued, “but we need to move more decisively.” He supported the new CAF� standards but called them a “rowboat” when we need a “high-tech white-water raft.” And, most dramatically, he advocated a requirement that within 10 or 15 years all cars should be electric, hybrid or alternative fuel.

Most of our speakers so far have not been that radical. After listening to a variety of experts deeply immersed in the business it becomes obvious to this reporter that the transition is amazingly complex and there are way more questions than answers. Here are a few:

� Where are we now? General Motors and Nissan are preparing for the imminent introduction of the first two mainstream, commercially viable, plug-in electric cars – the Chevy Volt and Nissan Leaf. The former is an extended range electric car and the latter a pure electric. Both would be way overpriced without government subsidies and are barely affordable with them.

� Where do we expect to be in 10 years? Estimates range from a fairly reasonable 2 to 3% of the market to an optimistic 10% - and that’s for both hybrids and electrics. Neither technology is mainstream now, but if you look at where we were 10 years ago we must conclude that anything is possible.

� Will our electric grid be able to support a big increase in electric cars? Some say yes, some say no, but the real answer may be . . . maybe. If one particular neighborhood of young, well-off early adopters suddenly has a couple dozen electric cars all being charged at the same time, the transformer for the neighborhood may blow from the load. If it’s a hot, muggy summer night with air conditioners all running and the demand is high anyway, that may cause an outage. Under normal circumstances, with a well-managed, “smart grid,” the supply is probably adequate – with emphasis on “probably.” The smart grid comes with its own problems, not the least of which is security of the information gathered.

� Will electric car owners find charging opportunities away from home? Well, if they work for GM, DTE Energy, Consumers Power Company or MicroSoft, they may be able to charge up at work. If they work for Uncle Joe’s Tool and Die or nearly anyone else, probably not. At sometime in the future, shopping malls, coffee shops, municipalities and others might install charging stations to lure customers who drive electrics. That’s a conceptual stretch at this point.

� Will battery technology advance quickly enough for range and cost numbers to begin to approach that of conventional internal combustion, liquid fuel-powered cars? Probably not. While the technology continues to advance slowly, it is unlikely it will ever be close to the efficiency of what we enjoy now from ICEs. Even if we were using ethanol the costs wouldn’t favor electrics.

� Will customers accept electric automobiles and all their complications (limited range, costs, charging issues, electricity pricing schemes, subsidies, smart grid issues, etc.) in big enough numbers to make a business case? Much hot air was spent here talking about how to change the culture and attitudes of US auto buyers. I think that will be one of the biggest challenges. There are early adopters and greenies who will accept the technology enthusiastically but the masses will be hard to convince.

� How will road funding be handled when we accelerate the loss of fuel taxes? No one addressed this one. States are already suffering decreased revenues because cars are getting so much better mileage that tax revenues have shrunk. Road funding strategies will certainly have to be rethought.

� What is the proper role of government in the development and rollout of electric cars? Here there seems to be general agreement. The government needs to take a big role in partnering with the private sector on regulation, R&D and subsidizing every level the business in one way or another. It seems a bit incongruous to this reporter that the business community, usually less than enthusiastic about government involvement, is courting or even demanding, government support.

One big risk is apparent and often discussed – that is, the risk that government, in funding pet technologies, may be picking winners to the exclusion of other, perhaps more promising, technologies. Think about ethanol, which, like gasoline and diesel, has a high energy density and infrastructure needs that make electric systems seem unreasonably cumbersome, or natural gas which is abundant and domestically produced, or any number of other options.

Plenty of support has been voiced here for a “moon shot” goal that would commit us to a mission of conversion to electric transportation within a defined period of time. But we still hear voices, though much more subdued, supporting the development of other options. There is no question in this reporter’s mind that the “other options” deserve similar sgovernment support and exploration. There are many of us outside the cities for whom electrics make little or no sense, certainly at this early stage, or probably ever.

Co-publishers Note: After reading Steve's take on EV's I thought you might like to read the story below.

When every vehicle on America's roads uses domestic, sustainable and green fuels, MPG will become just what it should be, a personal economic choice, not a national security issue

Co-Publisher's Comments: This research report comes as no surprise to us, because since 2006 we've told you that it is in Big Oil's interest to continue to decimate the big lie that "there is no silver bullet, not just one solution to get America off of gasoline". As we've preached over the past 4 years if there are "many solutions" there is no solution, continuing the status-quo through Big Oil's strategy of Divide and Conquer

So today we want to thank Mercedes-Benz USA and Harris Research for placing into the record indisputable evidence of the success of the Divide and Conquer effort, which continues to work for Big Oil and its masters and against the interests of the citizens of every country in the world (with the exception of�oh you know who).

Big Oil NEEDS AMERICANS TO STAY CONFUSED AND DOCILE about alt fuels, so they can profit from their monopoly, and continue to force us to buy a TRILLION DOLLARS worth of their old fashioned gasoline every year (for how long?). Adding to the confusion are the oil company's "green fuel" TV ads that exclaim "how hard they are working on many ALT fuels�, we see these commercials and print ads as a well thought out and executed element of Big Oil's successful campaign of confusion.

Unwittingly (or not) the U.S. government is an enabler of Big Oil's status quo strategy, with daily rhetoric of increased MPG and the fairy-tale of a replacement of gasoline by electric vehicles. Over the past few years we have stated that "MPG is a code word for screw Americans, and "let them keep using gasoline"...because if we were all using domestic, sustainable and green, High-test Flex-fuel (e-85),CNG, Propane, Biodiesel or even a Flux Capacitor, MPG would become what it should be, just a personal economic choice, not a national security issue. What is actually important is not a vehicle's MPG but which fuel a car or truck uses.

So we scream isn't it time for patriotic Americans to get pissed off, and demand that their government, as a first giant step, clear up the alt fuel confusion and get us out from under the ticking diplomatic and military time-bombs, by mandating the immediate drop-in replacement for OPEC dominated, monopolistic and criminal gasoline, by patriotic, sustainable and green High-Test Fuel; Gasohol(E85), this would buy us the luxury of time and provide the capital resources to research an eventual replacement (or not) of Gasohol with a yet unproven or undiscovered future fuel. What Do You Think? bgordon@theautochannel.com.

MONTVALE, N.J., Oct. 7. 2010; For 50 years, Americans focused on things like horsepower, color, and design when deciding which car to buy. Today, that decision includes even more mystifying choices, including how the vehicle is powered; Is it a hybrid? Is it electric? Does it take regular gasoline or diesel fuel? A new survey from Mercedes-Benz USA (MBUSA) conducted online in July 2010 by Harris Interactive suggests that Americans are having a hard time figuring out what to make of all these choices, and as a result, many are holding off on purchasing an alternative fuel vehicle (AFV). (Divide and Conquer)

The survey found that nearly one in two adults (48%) would be interested in purchasing an alternative fuel vehicle but are not sure about what type to get (e.g., hybrid, electric, diesel) and only about one in three (35%) say they know which types of AFVs are best for various driving situations (e.g., city, suburban, highway). In fact, more adults claim to be knowledgeable or very knowledgeable about the causes of the global financial crisis, the difference between good and bad cholesterol and the amount of oil that has spilled into the Gulf of Mexico, than they are about the difference between various types of alternative fuel vehicles.

"The end game is zero-emissions driving that doesn't simply transfer the problem. And, while that is still in the future, each alternative fuel vehicle we introduce is a step in that direction, providing key findings and helping acclimate consumers to new technology," said Sascha Simon, head of advanced product planning at Mercedes-Benz USA. "Our goal at Mercedes-Benz is to provide a portfolio of options for our customers so they can choose the vehicle that best suits their lifestyle and to further the understanding and, ultimately, the adoption rate for these new technologies."

Detailed information on each option is available on the "Thinking Green" section of Mercedes-Benz's website at http://www.mbusa.com/mercedes/innovation/thinking_green/overview. The site includes information on Mercedes-Benz's BlueTEC clean diesel vehicles (E350 BlueTEC, ML350 BlueTEC, GL450 BlueTEC and R350 BlueTEC), hybrid vehicles (S400 HYBRID, ML450 HYBRID and hydrogen electric vehicles (B-Class F-Cell), flexible fuel options as well as tips for driving green.

Among the findings from the MBUSA/Harris Interactive survey:

A vast majority of U.S. adults (71%) say they are not at all or only somewhat knowledgeable about the difference between various types of alternative fuel vehicles.
- One in four adults (25%) is not at all knowledgeable about the difference between various types of alternative fuel vehicles.
- More adults claim to be knowledgeable or very knowledgeable about the causes of the global financial crisis (34%), the difference between good and bad cholesterol (45%), and the amount of oil that has spilled into the Gulf of Mexico (46%) than about the difference among various types of alternative fuel vehicles (29%).
- Men are more likely than women to say they are knowledgeable or very knowledgeable (41% vs. 18%, respectively).
More than half of adults (58%) have never considered purchasing an alternative fuel vehicle, while nearly two in five (39%) have. Only three percent already own one.

About the Survey

This survey was conducted online within the United States by Harris Interactive on behalf of Mercedes-Benz USA from July 9-13, 2010 among 2,242 adults ages 18 and older. Results were weighted as needed to reflect the composition of the U.S. adult population. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Donna Boland.

About Harris Interactive

Harris Interactive is one of the world's leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in over 215 countries and territories through our North American, European, and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us - and our clients - stay ahead of what's next. For more information, please visit www.harrisinteractive.com.

About Mercedes-Benz USA

Mercedes-Benz USA (MBUSA), headquartered in Montvale, New Jersey, is responsible for the distribution, marketing and customer service for all Mercedes-Benz and Maybach products in the United States. � MBUSA offers drivers the most diverse line-up in the luxury segment with 12 model lines ranging from the sporty C-Class to the flagship S-Class sedans and the SLS AMG supercar.

MBUSA is also responsible for the distribution, marketing and customer service of Mercedes-Benz Sprinter Vans in the US. More information on MBUSA and its products can be found at www.mbusa.com and www.mbsprinterusa.com.

Publishers Note: Now that Steve has teed you up(off?), I thought you might like to read the following.

When every vehicle on America's roads uses domestic, sustainable and green fuels, MPG will become just what it should be, a personal economic choice, not a national security issue

Among the findings from the MBUSA/Harris Interactive survey:

A vast majority of U.S. adults (71%) say they are not at all or only somewhat knowledgeable about the difference between various types of alternative fuel vehicles.
- One in four adults (25%) is not at all knowledgeable about the difference between various types of alternative fuel vehicles.
- More adults claim to be knowledgeable or very knowledgeable about the causes of the global financial crisis (34%), the difference between good and bad cholesterol (45%), and the amount of oil that has spilled into the Gulf of Mexico (46%) than about the difference among various types of alternative fuel vehicles (29%).
- Men are more likely than women to say they are knowledgeable or very knowledgeable (41% vs. 18%, respectively).
More than half of adults (58%) have never considered purchasing an alternative fuel vehicle, while nearly two in five (39%) have. Only three percent already own one.

About the Survey

About Harris Interactive

About Mercedes-Benz USA