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Foreign Companies Surge Ahead with Electric Vehicles even as Detroit Prepares to Pull the Plug

November 24th 2008

Energy / Environment - Project Better Place

While U.S. manufactures may actually be putting the brakes on developing electric vehicles, overseas-based manufacturers are surging ahead.

Even though Chrysler, Ford, and General Motors have gone hat in hand to Congress for their unwanted internal combustion machine, the momentum towards electric transportation among foreign companies is fully charged. The unveiling of the MINI E produced by BMV made some waves at the L.A. Auto Show but a November 20 press conference with Mayor Gavin Newsome of San Francisco, Mayor Chuck Reed of San Jose, and Mayor Ron Dellums of Oakland promises more far-ranging impact. The mayoral threesome announced public-private investment coupled by a multi-step plan to transform the San Francisco Bay Area into the “Electric Vehicle Capital of the U.S.” The region will host the nation's first EV network.

The mayors, with help from California Governor Arnold Schwarznegger, intend to clear the path of electric vehicles in the Bay Area with an assist from Project Better Place - “a global electric transportation company.” Israeli Better Place has joined with Renault/Nissan in the development of EV vehicles around the world. The enterprise is already negotiating with Denmark, Hawaii, Israel, and Portugal (among other governments) to build EV systems. Renault/Nissan CEO Carlos Ghosn, formerly of Ford, wants Nissan to be the biggest builder of EVs and is plugging resources into the project. Tokyo-based Nissan Motor Co. plans to sell an all-electric car with a 100-mile range in 2010. The Better Place model is an open network model to allow for fixed-battery and battery-exchange electric vehicles to operate on the network. Toyota still has not released a target date for a plug-in Prius vehicle.

The stunning Bay Area plan will expedite permitting and installation of EV charging outlets at homes, business, parking lots, and elsewhere. Incentives would be created for employers to install EV charging systems at workplaces, as well as at parking facilities and other locations. The plan would harmonize local regulations and standards across the interjuridictional region to govern EV infrastructure with regulatory consistency both traditional electrical vehicles and extended range EVs. Moreover, it would establish common government programs that promote the purchase of EVs, featuring aggressive pooled-purchase orders for EVs in municipal, state government, and private sector fleets; and a preference for EVs would dominate future purchasing--implementing the Green Fleet Initiative first advocated by author Edwin Black who incorporated it in his book Internal Combustion. A variety of additional programs would link the EV infrastructure and usage to regional transit and air quality programs.

The collaboration between Better Place and Bay Area governments would expedite permitting and approval for facilities that provide extended-range driving capability for EVs through battery exchange locations or fast-charging. It would identify and secure suitable standard (110V) electric outlets (such as street lights) for charging low voltage EVs in every government building in 2009, and plan for installing 220 volt EV chargers in city parking lots and curbside parking in the participating cities. Better Place CEO Shai Agassi said, “We need to start thinking about this as the next generation of the car. It's about time we changed from car 1.0 to car 2.0,” and added, “We're following a model that's worked in Israel, in Denmark. We build the infrastructure first. By 2012 we'll be ready for a mass market of cars.” The Better Place approach outshines procrastination manufacturers such as Honda and GM who consistently posit the “chicken or egg” dichotemy as the basis for inaction.

Better Place says it is counting on a $1 billion investment to build the nation's first electric vehicle network of EV charging stations throughout the Bay Area by 2012. The Bay Area infrastructure will allow drivers of electric vehicles to make long-distance trips without worrying about finding a place to charge or change a battery. Other localities will quickly emulate and therefore extend the Bay Area network.

San Francisco mayor Gavin Newsom said on November 20 that the city will use tax breaks to promote sales of electric vehicles and encourage homes and businesses to make charging stations available. “We're going to get serious about advancing our local climate action plans, about getting into the business of alternative transportation,” Newsom said during a news conference. “I don't believe halfway is good enough. I'm a guy driving a hybrid (vehicle) and I don't feel too good about that. For us to get to the next level, we need unprecedented regional collaboration.”

A stated goal of Better Place is to reduce dependence on petroleum for transportation. This is not lost on those in the U.S. and elsewhere that have seen widely fluctuating fuel prices add further misery to the current economic muddle. A reduction on such dependence is seen by some, like Better Place, as a plus for business. “While we expect oil prices to remain low in the short term, we believe this environment creates an even more profitable window of opportunity over the long term to invest in green infrastructure projects like Better Place before oil returns to historic highs,” said Chairman Idan Ofer of Better Place, who is also Chairman of Israel Corp., which has a joint venture with Chinese automobile manufacturer, Chery Corp. “We fundamentally believe that the entire auto industry will switch to electric cars when the environmental cost of producing polluting gas cars has an even greater impact on their bottom line.”

Although, attention has been focused on the Bay Area, Nissan’s Ghosn said the company had already signed an agreement with the state of Oregon and its Portland General Electric utility to develop America’s first extensive recharging infrastructure. Portland, rich in electric grid, has already sprouted its first charging station, built by Shorepower Technologies of Portland. The Shorepower station is one of four to be installed in the region by Portland General Electric. It can charge up to four electric cars at once using the 120-volt plugs like those commonly found in homes. Oregon Governor Ted Kulongoski is reportedly proposing replacing the current $1,500 tax credit on hybrid vehicles with a $5,000 credit on all-electric cars.

If they can last long enough to overcome their cash shortfalls, forthcoming vehicles from General Motors and Chrysler might also start whizzing around the Bay Area. Michigan-based GM is counting on the Chevrolet Volt, a gasoline and flex-fuel enhanced “extended range" electric vehicle that is scheduled to go to market in 2010. The sales price could prove to be a significant factor for consumers: while GM originally announced a base price of $30,000 for the Volt, it appears that this figure has now reached $40,000. The "Detroit Dinosaur” is counting on a $7,500 tax rebate to make the Volt more palatable to consumers. Chrysler has managed to bring an unheralded prototype online that also promises to be up and running by 2010. Now planned, are a battery-powered Jeep Wrangler, a sedan, and a mini-van that are based on current platforms. Some analysts are asking whether Chrysler can pull off these plans for 2010 or if it even possesses electric or electric-hybrid technology sufficient to power a vehicle the size of a mini-van.

Interest in EVs is driving the development of lithium batteries. The lithium battery for the Volt adds approximately $10,000 to the price, and forecasted demand for lithium is driving mining companies and venture capitalists to search for quality ore. Curently, the U.S. is the leading producer of lithium but Zimbabwe, Chile, Russia, and Argentina are also producers.

But America's EV industry is even now sputtering as the Big Three gasp for bailout dollars. In Flint Michigan – the birthplace of General Motors – automative circles are nervous over a rumor that construction has been delayed or paused at the plant intended to build the gasoline-flex-fuel engine for the hybrid electric-gasoline Chevrolet Volt. In a state crestfallen by the nation’s highest unemployment rate and depopulation, the loss of 300 potential auto jobs at the plant would be a hard blow.

Cutting Edge Senior Correspondent Martin Barillas is a former diplomat who edits www.speroforum.com and Energy Publisher.

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