3 Ways Plug-In EVs Can Make Inroads in the Mass Market

3 Ways Plug-In EVs Can Make Inroads in the Mass Market

There have always been people willing to be the big-spenders on flashy or cutting-edge cars (think of Arnold Schwarzenegger's unfortunate embrace of the Humvee, or anyone who's ever bought a Lamborghini), but the bulk of the auto market is now, and will always be, made up of very run-of-the-mill vehicles.

Electric vehicles are still largely in the former category, although the Nissan Leaf and Chevy Volt are starting to change that. And a recent sustainability conference at Infineon Raceway brought together some of the biggest players in EV technology to talk about how to overcome the challenges to making EVs mass-market vehicles.

Executives from four firms that are heavily invested in EVs and technology supporting them -- Tesla, Panasonic, Infineon Technologies and Kleiner Perkins Caufield & Byers -- provided a frank look at the state of the EV industry during the conference last week. They also delved into what it will take to make plug-in EVs live up to their promise. Sales of plug-in cars, from hybrids to battery electric vehicles, are expected to grow from 114,000 cars today to 5.2 million units worldwide by 2017. EVs, the energy that powers them and the technology that can connect them are key components of the concept GreenBiz Group calls VERGE.

To make inroads among mass market consumers, speakers said, EV makers and supporting industries must:

1. Make plug-in electric vehicles that fit in.
2. Tackle range anxiety and charging challenges.
3. Invest strategically in innovation and sustainability.

Here are key points from the talks:

1. Fitting In

Renault's Twizy. Photo courtesy of Renault.Faddish and costly EVs, like Muammar Qaffidi's customized Fiat 500, and trippy-looking bargain models, like the recently introduced Renault Twizy, make great headlines and photo ops.

But if you want lots of regular folks in the U.S. to buy EVs, they need to look like regular cars, be cost competitive, and perform as well as if not better than standard vehicles -- in addition to offering environmental benefits of reduced air and noise pollution, greenhouse gas emissions and reliance on fossil fuels.

"People are not going to gravitate to anything new until it makes economic sense," said Joseph Hustein, associate director of the Revs Program at Stanford University, speaking about the tipping point for sustainable auto technology in the mass market.

The average consumer also won't buy anything that looks radically different, at least not yet, marketing experts pointed out.

2. Tackling Range Anxiety and Charging Challenges

The Chevy Volt. Photo courtesy of Chevy.The big fears about plug-ins include running out of juice, not finding a charging station on the road, forgetting to recharge entirely, and burning time to power up. The panel focused on EVs spent much of its discussion acknowledging the worries and trying to dispel them.

"I can image you coming home from work with a bag of groceries, screaming kids and a barking dog, and forgetting to plug your car in, and the next morning you don't have a way to get to work," said Mark Bellinger, a vice president for Infineon Technologies, North America.

While there isn't a sure way to remedy forgetfulness, range and charging availability aren't the bogeys they've been made out to be, some speakers said.

"We don't make that big an issue of charging," said Ryan Popple of the Greentech Team at Kleiner Perkins Caufield & Byers. "In a lot of ways, I think it has become a red herring."

Range and Charging Availability

A Tesla Model S trailed by a red Roadster. Photo courtesy of Tesla Motors.Plug-in hybrid electric passenger vehicles, like conventional electric hybrids before them, are expected to ease the way for plug-ins of all types. The hybrids -- despite their drawbacks of added weight from dual propulsion systems, battery packs and fuel when compared to pure EVs -- are likely to dominate plug-in sales until more people get comfortable with the concept.

Also expect to see "over-spec'd EVs with really big [battery] packs as safety blankets," said Popple. That will change as more people become accustomed to plug-ins, and eventually charging a car won't pose any more anxiety than charging a phone, he said.

Many EV buyers are pleasantly surprised to find the available range is pretty much in line with their needs, said Tom vonReichbauer, finance director of Tesla Motors, the maker of luxury, 100 percent electric cars. Tesla, however, was the first company to put a 200-mile-range EV on the road. In 2012, it will offer a 300-mile electric car (about the range of a standard gas tank) and the company's Model S will give buyers a choice to pick a battery size that suits them.

EV drivers also are finding it's easier to charge up away from home than they imagined, vonReichbauer said. Cities, hotels and companies are installing charging stations, but there are already "tons of places" to charge, he said. "You can go to hotels, ask the guy at the front counter where you can have access to a 240-volt outlet, and they'll point you to it."

Infrastructure

The ubiquity of electricity in the U.S. means that the basic infrastructure for charging EVs is in place. The challenge will be updating the antiquated grid to create a smart grid that enables drivers to charge vehicles without overloading the system or sending their electricity bill through the roof.

In response to a concern raised about whether the U.S. has enough energy to meet demands even before broad adoption of plug-ins, Popple said: "I partially agree that we have trouble meeting our energy needs, but I disagree that it's a lack of generation. America is very, very good at generating electricity -- and wasting it. "

He and other speakers said the U.S. needs to be more energy efficient and increase use of renewables. "You have hundreds of pathways of generating electricity and once it's in the grid you have all sorts of applications [to power cars]," he said.

Charging Time

For now, it's tough to beat the speed of filling up with liquid fuel and it will be awhile before recharging EVs comes close. But the industry is trying reduce charging times.A charging station. Photo courtesy of Walgreens via Business Wire.

Level 1 chargers can take eight to 20 hours to fully charge an "empty" EV. Level 2 chargers, "fast-charge" devices that recently became available, can completely charge an EV in as few as 3.5 hours, depending on the vehicle. And work is underway on Level 3 chargers that can deliver an empty-to-full charge in about 45 minutes.

"I'm very bullish on the potential for fast charge," said Popple of Kleiner Perkins, which led a $30 million investment in the zero-emission electric bus firm Proterra in June. The buses, which rolled out in Southern California a year ago, can charge in 10 minutes.

Startups as well as companies like Eaton, General Electric, Schneider, Siemens and Leviton now have chargers on the market. As competition and technology accelerate, expect charging times and costs for devices to come down (residential units run about $1,000), said Peter M. Fannon, a vice president for Panasonic, North America.

3. Investing in Innovation and Sustainability

Tesla and companies like Renault and Nissan, long-time automakers that together have become a leader in EV development, are banking on the vehicles to become the way of the future. For forward-looking tech, industrial and investment firms, EVs and related technology are part of a larger bet on green innovation and sustainability that's already producing results.A NIssan Leaf. Photo courtesy of Nissan.

Insights on Investment Strategies

Kleiner Perkins, which has more than 40 companies in its greentech portfolio, has invested across the electrical vehicle space, said Popple. "What we found is that for each market segment, there is an ideal solution now that's basically a tradeoff between what technologies can do, how safe they are, what they cost, what the infrastructure is going to cost and how long it takes to charge the vehicle."

In its early stage investments, Kleiner Perkins focuses on disruptive technology. "We look for breakthroughs, not something that's incremental," Popple said.

At Panasonic, "what we try to do is avoid fast commoditization, where anybody can get into business, and then you've lost the investment you've made moving the product forward," said Fannon. "That's why we're investing in all the various parts of the electric vehicle chain, not just the batteries."

Panasonic is striving to become the green innovation leader in the electronics business by 2018, the company's 100th anniversary. To showcase its support of green energy to power EVs, Panasonic is providing its lithium-ion battery technologies to student teams from seven universities in the U.S., the Netherlands, Singapore and Japan for the 2011 World Solar Challenge EV race next month in Australia. U.S. competitors include teams from California arch-rivals UC Berkeley and Stanford.

Using Racing to Drive Innovation

A hybrid Toyota Camry pace car. Photo courtesy of Infineon Raceway.Motor sports have long been a test bed for innovations in the auto industry. More recently, R&D of high performance alternative fuels and efforts to popularize green values with a huge audience have come to mainstream U.S. tracks.

NASCAR launched a string of green initiatives in 2008, the same year a hybrid debuted as a pace car for the country's No. 1 spectator sport. Infineon Raceway, a leader among tracks that are trying to be more environmentally responsible, has played host to hybrid pace cars for NASCAR, uses hybrid engines in 25 percent of the facility's fleet, and in 2010 held the first TTXGP electric motorcycle race in North America.

Less widely known, the National Electric Drag Racing Association, a special chapter of Electric Auto Association, has been trying to raise awareness of EVs for 14 years.

Ideally, racing will bring innovation to the EV industry and vice versa. "I'd like to see the racing industry influence the EV industry," said Popple. "And for the next generation of race fans, who have iPhones and iPads, solid state racing is going to be exciting in a way that internal combustion racing was for the previous generation. I hope a lot of those innovations will trickle back."

Image CC licensed by Flickr user CoreForce