Major Car Manufacturers Prepare for Electric Transition

Whether they admit it or not, major car manufacturers are preparing for the inevitable transition to electric vehicles in the United States.  The charging infrastructure will take a while to develop, but when it does, these companies want to have strong electric vehicle brands in place.

Even luxury brands BMW and Mercedes are aggressively preparing.  BMW touts clean diesel for its luxury cars, but through its MINI brand it has begun field testing an electric vehicle called the MINI E. Daimler (manufacturer of Mercedes) is using its Smart brand to develop an electric vehicle called the Smart ED.  These companies have learned from the lack of success of luxury hybrid vehicles and are developing electric vehicles through their subcompact vehicle brands.

The table below lists the top 15 car manufacturers in the U.S. by number of vehicles sold in 2009.  Of the 15 companies, 11 have already identified specific electric vehicle models that will be coming out in the next few years.  Five have manufacturer’s websites dedicated to these electric vehicles.  The biggest question mark is Honda, which has yet to release information on a specific electric vehicle model.  Considering how its competitors are preparing, it would not be surprising if Honda came out with some news relatively soon.

Take a look at the manufacturers’ websites.  The Nissan Leaf looks really cool.  The MINI E and Smart ED look just like the ones that you see on the road today.  Some people say that the Chevy Volt looks just like a Malibu, but others claim that it was modeled after the Prius.  Which electric vehicle would you be interested in?

Car Manufacturers Ranked by Number of Vehicles Sold in the U.S. in 2009

Rank Manufacturer Model Manufacturer’s Website?
1 General Motors Chevy Volt Yes
2 Toyota Prius
3 Ford Various models
4 Chrysler Various models
5 Honda ?
6 Nissan Leaf Yes
7 Hyundai Blue-Will
8 Volkswagen Golf Twin-Drive
9 BMW Mini-E Yes
10 Kia ?
11 Mazda ?
12 Daimler Smart ED Yes
13 Subaru R1e
14 Suzuki ?
15 Mitsubishi iMiev Yes

About Josh Schellenberg

Josh Schellenberg is a Senior Analyst at Freeman, Sullivan & Co. in San Francisco. To contact Josh directly, send him an email at josh@energydsm.com. The opinions and views expressed at EnergyDSM.com do not represent those of Freeman, Sullivan & Co.
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20 Responses to Major Car Manufacturers Prepare for Electric Transition

  1. Mark Nelson says:

    Most cars in the northern climates have some type of heater for warming the engine. This will need to be accounted for in both the battery and other components. Many enjoy electric vehicles in Alaska and New England through conversion units and climate should be a problem. BTW- I don’t care what anybody says, -30 degrees is never a good day in Minnesota :-)
    And, most School Buses have a problem with bio-diesel and sub-zero weather. The age of these types of systems needs to go away.

  2. Robert Liddicoat says:

    This is a great discussion. Check out some of the presentations at this site: http://www.arb.ca.gov/msprog/zevprog/2009symposium/2009program.htm
    In particular sessions 4-6 (which focuses on electric vehicles, the previous sessions focus on fuel cell/hydrogen as well as a few other topics). As far as charging infrastructure goes, figure that most charging will occur in the garage overnight (and yes, it is significantly less costly than gas). Look at the presentation from Mitsubishi – it shows some of what has been done in Japan. The Japanese utility companies have been installing quickchargers (top-off your tank in 30min) which make electric vehicles much more practical and closer to becoming a reality.
    Also look at Tesla’s website at http://www.teslamotors.com/models/index.php
    The Roadster model is much pricier than most would be able to pay, but the sport sedan they are coming out with within the next year or so is capable of over 300 miles per charge, and starts roughly around the cost of a Mercedes E class. Combine the seating and range of this vehicle with quick-charging technology, and you have a viable future for electric vehicles. Keep in mind also, many manufacturers are taking a serious run at this technology, and as a result the battery technology continues to improve and come down in cost. It will be very interesting to see what vehicle transportation looks like in the next 5 – 20 years.

  3. Dr J D Bapat says:

    Pune (India)
    Josh, you have some great points in favor of electric vehicles. I think the future of these cars is closely linked with the developments in long range battery technology. The purchase cost of the car also has to be brought down substantially, to make it acceptable in the developing world.

  4. Jon Hale says:

    Of the manufacturer’s listed, I’m most disappointed with Chrysler Corp, who recently announced that they would have extended range plug-in hybrids available in 2010. That now looks like a trial balloon for a Government backed loan, which has not materialized. I believe Chrysler has the best design for the ER Plug-in, with basically the same drive train configuration for all, with simply varying size electric motors and battery packs.

    I think the ER Plug-in will form the bridge vehicle for the next 10-20 years, allowing for the creation of the infrastructure to support pure electrics. It seems doubtful that the buying public will lay out $30-$40K for a pure plug-in electric. The ER Plug-in gives the benefits of the plug-in EV but with the ability to drive it across country. Families will spend 90% of their driving in them on plug-in power only, but still be able to take a longer trip.

    • Josh Schellenberg says:

      I couldn’t agree more. The plug-in hybrid really is going to be a bridge vehicle for the next 10-20 years. The average American is not wealthy enough to buy a car that does not cover 100% of their driving needs.

  5. Eric Fisher says:

    Josh, Knowing the negative impact that cold has on batteries and capacitor performance, does any literature address how are these vehicles will perform in northern winter climates at sub zero temperatures. Unless I am mistaken, these companies will still have to offer hybrid solutions for these markets.
    Eric

    • Josh Schellenberg says:

      I’m not sure about the impact that cold has on batteries and capacitor performance. That’s a good question.

      • Emmanuel Bruschi says:

        I have not heard of major negative impact of cold on EV batteries in nordic climates. However, I am not an electrical engineer so I might be wrong here. Maybe the manufacturers will build an insulated battery compartment to retain the heat from previous uses to address this issue…

        Depending on which solution will be chosen by manufacturers when it comes to battery ownership the lifespan might not be an issue for the end consumer. Battery swap solutions, for instance, will mean you do not own you battery but most likely lease or rent the right to use the battery for your car. However will the new battery you receive after the swap be somehow checked by the station to prevent failing batteries to be given back to consumers? If you do not own the battery, any breakdown will just be an inconvenience but not a 15k part to replace at your own charge.

  6. Electric car will be the future .
    The problem is the storage of electric energy .
    When the storage will be suficient for 1000 miles ,we will forget the oil.
    Same for energetic needs for the houses .
    2 sq m of solar panel will satisfy domestic needs of a medium size home !

    • Josh Schellenberg says:

      When the storage will be sufficient for 1,000 miles, oil will be forgotten because a battery with 1,000 miles of range is so far off that oil reserves will be gone.

  7. Bobbie says:

    Do these future cars use the fuel cell technology? How do they work?

    • Josh Schellenberg says:

      Thanks for the question, Bobbie. The cars I am referring to do not use fuel cell technology. In fact, electric cars are not that much different from your cell phone. You plug it in when the battery is low. After it is charged, you can drive around using battery power. The reason why electric cars are not as popular as cell phones is that they need much bigger, more expensive batteries.

  8. Daniel says:

    I would be interested in the Mini-E.  The mini is already such a great concept for a car.  I like how the E model does not change its model and keeps what great about it; the size.  If I had to buy an electric car, then I would make it model I like already.  This way I don’t have to tell the world I’m green, I know I’ll be saving green on gas.

    Is that right?  Will charging my car be cheaper than filling it up (per mile)? 

    • Josh Schellenberg says:

      That is great point, Dan. If electric cars are going to become ubiquitous, they need to save green. In order to save green, the money saved per mile needs to justify paying a $10,000 to $20,000 price premium at the dealer. Although many electric cars can run at the equivalent of $2 per gallon or less, buyers would need to drive many miles per year for many years in order to pay off the price premium. I’ll be exploring some of these scenarios in a future blog post.

      • Simon Saba says:

        The major automakers are only entering the plug in electric market reluctantly. It is not in their financial best interest to do so, and that is why they, collectively, have dragged their feet to date. The recent increase in automaker announcements of electric cars are only a half baked repsonses by their PR teams because they know competition is coming and they want the perception of being on the technological leading edge. As vehicle technology transitions from the mechanical domain (based on Fossil Fuels) to the electrical domain, you get a leveling of the playing field and that is precisely what they are afraid of. An Electric motor has essentially 4 parts, (2 of which are bearings) of which only one part is moving. Compare that to an engine with hundreds of precision castings and precise machining required after the casting process. Starting from scratch, the complexity of an electric motor is an order of magnitude lower than building an Engine. The electric motor weighs less, costs a lot less (in similar volumes), is considerably more reliable, ~3 x more efficient, produces lots more torque across the entire band, and pound for pound has more horsepower….. Its not even a fair competition to stack an electric motor against an Internal Combustion Engine. What this means is lower barriers of entry and it means that no company such as GM /Ford / Toyota etc enters the field with 100 ears more experience than the freshly minted startup, SABA motors, being one such example. At best, when it comes to electric drivetrains, the big players have a few years more experience compared to the startups and an advantage of a few years can be overcome, whereas an advantage of 50 to 100 years in nearly impossible to overcome in the auto industry.

        Now that the playing field has been leveled…. the major automakers will have to compete with fast, innovative smaller companies and that really scares them. Can you imagine the automakers having to compete in a segment like computer peripherals?

        • Rob Farrell says:

          I agree with Simon. The apparent enthusiasm of the major motor companies is late, limited and would disappear in a heartbeat if it were not for the externalities of energy prices, energy security and carbon emissions. The people with their eyes on the prize are smaller organizations. That is not to say that the majors will not win out in the end, some of them still have considerable resources to throw at the problem – and let’s face it, those externalities are not going away.

          While I agree that the vehicles are good and getting better, the real problems are not the cars.

          The batteries are still a big headache: costly, slow to charge, limited lifespan (1,000 – 3,000) charges I believe, limited range, overheating. Those long ranges that get quoted are a bit misleading because if run them down to empty it shortens the batteries’ lifespan, and I bet the several hundred miles cited cannot done when running air-con or heating. I have also heard that heat exchange is a problem with the compact battery blocks which are planned for interchange solutions like BetterPlace’s. I would love someone to correct me here – but I think we have some way to go on batteries. I am not talking about technology that is in the lab right now, I am sure there are solutions under development, I am talking about off-the-shelf components today.

          Everybody know that the charging infrastructure is an issue but what about the other infrastructure?. As an EV owner where do you find a mechanic? Replacement parts? What is the resale value after three years and 50 thousand miles? Are the major car manufacturers doing anything to answer these questions?

          Then there are the questions around certification. As I understand it (and again, please correct me if this is wrong) highway certification standards are firmly oriented toward a vehicle with one engine, a drivetrain, a steering column etc.; things that are rooted in the good old internal combustion world. Electric vehicles are limited by these standards because they don’t actually need to conform (hub motors, drive-by-wire etc). Somehow, I can’t see the majors lobbying for changes in this area.

          Just in case anyone has the impression that I am not for EV’s – nothing could be further from the truth, the sooner we switch the better imo. The reason that I am raising these points is that I am worried that the car industry will launch a barrage of EVs which are more expensive than traditional equivalents – without infrastructure, with limited range and inefficient designs – and then throw up their hands and say that no-one is buying them. Because, honestly the full electric vehicles they are planning will not convince the majority of car owners to switch.

          While I agree that Plugin Hybrids are the most promising solution today and a possible bridge they only mitigate the problems of fossil fuels, they don’t remove them. It will also be easier to go back to gas than forward to electricity for quite a while to come.

          I think that what we really need in order to get from internal combustion to full electric are paradigm shifts. It may be shared vehicle use, mobility-on-demand. It may be a separation of vehicle and power source ownership like BetterPlace is proposing. I might even be a separation of passenger cabin and motor/power-source ownership. Nobody knows what the shifts will be, but I am convinced that just switching from petrol or diesel to batteries and leaving everything else the same will not work.

          I would love to hear what others think about how electric vehicles could change our models of personal mobility.

          • Josh Schellenberg says:

            Thank you for the insightful response, Rob. The only disagreement I have is concerning the major car manufacturers. You say, “The apparent enthusiasm of the major motor companies is late, limited and would disappear in a heartbeat if it were not for the externalities of energy prices, energy security and carbon emissions. The people with their eyes on the prize are smaller organizations.” If their enthusiasm is late and not genuine, then why has not other country in the world reached a significant penetration of EVs, and not other company has sold a significant number of EVs?

            • Rob Farrell says:

              Josh – sorry I don’t understand the first question: “Why has not other country…”. I was referring to companies, not countries.

              On the second question: I think that most people agree that the difficulties of moving from internal combustion to electricity are many (and most have already been mentioned here) but the main reason that no one has sold a significant number of EVs is that the vehicle technology isn’t competitive enough yet. As long as people are doing a like-with-like comparison between EVs and IC cars the majority will continue to choose the ‘tried and trusted’ internal combustion engine. I am not saying that it’s right – it’s just what has been happening and will continue to happen for a while to come.

              Maybe I should clarify my “smaller organizations” – I meant smaller, niche manufacturers. I think that the impetus for change and the EVs which please the public will come from them. Tesla is the best current example of this – but have a look at Segway’s PUMA or the Smart Cities Group at MIT. These are not multi-purpose vehicles, they are aimed at niches and I think that niches are a good way to revolutionize a market.

  9. Josh Schellenberg says:

    Does anybody agree with me on the Nissan Leaf?

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