Earlier this fall, a day before attending press events for Ford’s new, more fuel-efficient truck engines and Chevy’s Volt (interesting contrast), and the week before traveling to Nashville for quality time in the Nissan Leaf, I took in a day of seminars and panel discussions at the second annual Center for Automotive Research (CAR) “Business of Plugging In” conference. You have seen the news that came out of that 2010 BPI, which was sponsored by DTE Energy and General Motors, but you might find some notes and quotes from it as interesting. I did.
CAR President, Chairman and CEO Dr. Jay Baron opened the “Vision Panel” first session with a brief welcome talk. Among other things, he asserted that electric vehicles (EVs) and hybrids will be needed for automakers to meet future CAFE standards, but questioned whether they can be cost-competitive without continuing government incentives. (My take: he’s correct on both counts.)
Tony Earley, chairman and CEO of Detroit-based DTE Energy, and chairman of the Edison Electric Institute, said:
There is plenty of generation capacity in the U.S. to handle millions of EVs, but only if we manage the demand curve. Without controlled charging, we may experience local problems [eg. transformers] in some neighborhoods. Managing a controlled process will be critically important…. [However], the revenues that would be generated by public charging will never recoup the investment in installing the charging stations. The cost of that infrastructure will have to be born by the public at large.
Read on to see what else caught my ear.
In the second session, an industry panel “From ICE to PEV – Enormous Change, Great Opportunity,” moderator Oliver Hazimeh (who is director Automotive and Aerospace for PRTM Management Consultants) asserted that:
Electrification of personal transportation is not a question of ‘if’ but of ‘how fast.’ I don’t think 10 percent plug-ins by 2020 is out of the question. A lot of it has to do with removing the barriers. What do we need to do to break through the three percent early adapters? [EVs] need to be safe, seamless and fun to use.
Then he asked how many in the audience were considering purchasing a plug-in vehicle in the next few years. About half raised their hands.
Bill Reinert, national manager of Toyota USA’s Advanced Technology Group, said it will be up to automakers to develop plug-in vehicles that are competitive in every way, then up to customers to be prepared to give up what they know and learn to deal with “range variability, not anxiety.” One way to do that is with smart phones.” He added that, “the government must pace technology, not try to force it.” (Right on!)
But who pays for the infrastructure? “There are two models,” Reinert said: “competitive business, and non-competitive government.” Until investing in and operating charge stations becomes profitable – including by attracting serious numbers of EV-driving customers to malls, restaurants and theaters – I’m guessing mostly the latter.
Dr. Neil Armstrong, president of Mercedes-Benz Research and Development, North America, pointed out that M-B is investing heavily in advanced powertrains, including battery electrics, hybrids and fuel-cell EVs. He added:
However, the bulk of our powertrains will be conventional – with still much room for advancement. Certainly, electrified powertrains have very high potential in the next 50 years and beyond. However, the customer will determine what products we need to provide – not government regulations. BEVs will be optimized for urban environments, but the infrastructure will need to be able to support usage beyond cities.
It will be interesting to see what the take rate will be for BEVs. We still have a very long way to go before we will see significant volumes. The take rate in 2020 may not be significantly higher than the early adapter rate, but we will have to be ready for whatever it is. No one powertrain will be the solution over the next 20 years. We will see an emergence of a variety of advanced powertrains.
I could not agree more.
Next up was Nissan senior VP Scott Becker, who talked about his company’s “road to a zero-emissions future.” In many ways, he said:
Leaf is an ordinary car – but zero [tailpipe] emissions, with no gas tank. It has to be a mass-market vehicle, not a small-volume experiment. It will be the only affordable pure electric on the market, and there is a large customer base out there.
Becker added that Nissan has 60 partnerships globally, with 20 in the U.S.:
… to foster mass-market acceptance of BEVs and help to advocate policy that will favor BEVs and eliminate barriers – eg. for home charging. Some of those policies will involve financial incentives, some will be convenience advantages such as HOV lanes and preferred parking.
A successful launch will require a consumer interface change. We don’t want unhappy customers. They must understand the limitations, charging needs, etc. We’re managing installation of home chargers very carefully and will have them installed early, prior to delivery of the car, and the navigation system will know where [public] charge stations are.
Ed May, director of business development for Itron, Inc., raised some excellent questions regarding BEV acceptance and charging issues. Among them: how will utilities handle billing at different rates in different locations, how will trouble calls [My car didn’t charge last night!] be handled, who will be responsible to handle them, and who will pay for them?
When the floor was opened for questions, the panel members were asked for “optimistic but realistic” estimates of U.S. BEV volume by 2020? Toyota’s Reinert said, “1.5 to three percent, depending on the price of gas and other factors.” Nissan’s Becker said, “10 percent…but we’re not banking on that.” Mercedes’ Armstrong said, “Plug-ins and EREVs will be much more popular than BEVs in the U.S.” Itron’s May stated the obvious: “The market will be very difficult for automakers and utilities to forecast, given all the variables.”
More BPI next time. Until then, what’s your take?
Award-winning automotive writer Gary Witzenburg has been writing about automobiles, auto people and the auto industry for 21 years. A former auto engineer, race driver and advanced technology vehicle development manager, his work has appeared in a wide variety of national magazines including The Robb Report, Playboy, Popular Mechanics, Car and Driver, Road & Track, Motor Trend, Autoweek and Automobile Quarterly and has authored eight automotive books. He is currently contributing regularly to Kelley Blue Book (www.kbb.com), AutoMedia.com, Ward’s Auto World and Motor Trend’s Truck Trend and is a North American Car and Truck of the Year juror.
