Imagine driving across America using a fuel so new you have to carry your own supply wherever you go.
At the start of the 20th century, before the era of ubiquitous gas stations, drivers did just that as they tested the limits of cars like the Ford Model T, which ran on gasoline, kerosene or ethanol and could, if driven carefully, travel more than 150 miles on a full tank.
Now a new generation of drivers is set to embark on a similar kind of experiment. Until recently, most electric vehicles, or EVs as they are often known, have had a range of just a few dozen miles, limiting their usefulness and appeal. That's a big reason the long-talked-about era of electric vehicles has been, well, talked and talked about for so long with little real-world progress.
Over the next couple of years, though, tens of thousands of electric cars will hit the laneways of Europe, the streets of the United States and the gleaming highways of Asia. These new battery-powered vehicles have much longer ranges than their predecessors -- up to 250 miles in the case of the Tesla Roadster, but mostly about 100 miles -- and are likely to be the first to sell in large numbers.
By 2020, says J.D.Power Automotive Forecasting, annual sales of EVs will reach 2 million. Banking giant HSBC is even more optimistic and puts the figure at 9 million. That's still some way short of the 61 million petrol- and diesel-driven vehicles sold around the world in 2009 but a huge leap from the 5,000 or so EVs sold last year.
But even as these shiny new vehicles take to the road, serious questions remain about the infrastructure -- or rather, the lack of infrastructure -- to charge them. In an echo of last century's battle over the best fuel source, the way in which the coming fleet of electric vehicles will be recharged has yet to be settled -- and all the proposed models have flaws.
Some experts believe EVs should plug in at a driver's home or workplace. Others back a global network of roadside recharging stations. One prominent company is pushing the idea of petrol station-like outlets where you can zip in and quickly switch your almost-dead battery for a fully charged one. Another group advocates avoiding pure EVs and the problem of charging infrastructure altogether, focusing on cars which use both electricity and gasoline.
The stakes are huge: the pace of the shift to electric vehicles, progress in the fight against climate change, and a market which HSBC bullishly forecast this week would grow 20-fold by 2020 to $473 billion -- a fifth of the entire low-carbon economy.
Despite the hype, it's almost impossible to predict the format or formats most likely to win the great electric vehicle infrastructure battle. Model T owners adopted petrol as their fuel of choice for reasons both obvious -- the falling price of petrol -- and unpredictable: prohibition in 1919 forced ethanol off the market.
The variables today -- technology, political interference, the psychology of car-lovers -- are similarly hard to pin down. The introduction of electric vehicles is more than a financial matter, says U.S. analyst Sam Jaffe, research manager at IDC Energy Insights. It's a big anthropological experiment. There's no question that there are drawbacks, but there are also advantages. It requires a re-setting of mindsets and how that unfolds will decide who wins the race.
ON YOUR MARKS, PLUG IN
The starting grid for the coming EV race is filling up quickly. Mitsubishi Motors Corp's jelly bean-shaped i-MiEV has been on sale in Japan since April and will launch in the United States and Europe over the coming few months. The Japanese automaker is also making two versions of the car for French automaker PSA Peugeot Citroen.
Nissan is set to roll out its edgy-looking Leaf in December, while corporate partner Renault will start selling its mid-sized Fluence ZE (for zero emissions) in the first half of next year.
Europe's biggest automaker Volkswagen, a late entrant in the competition, plans to launch all-electric vehicles in 2013, though it says zero-emission vehicles will account for 3 percent of sales by 2018.
These pure electric vehicles face competition from dual gasoline-electric cars. Sometimes called extended range cars, these vehicles can charge at a plug-in socket or switch over to gasoline, and include General Motors' Chevrolet Volt, which goes on sale in the United States from this year for $41,000, and in Britain a year later.
Will the charging infrastructure be able to keep up with all those new cars? The question is critical. If it's too difficult to charge an electric vehicle, too inconvenient, the customers will not buy them, says Christian Feisst, managing director of business development for smart grid at U.S. networking giant Cisco Systems. Today a lot of the work is around battery technology and the behavior of customers. There is not a lot of work done around the charging technology, or the charging process itself, nor how to manage charging.
A BATTERY PROPHET
One company that is sinking millions into technology is Better Place, a three-year-old California-based firm that has raised about $700 million from investors and imagines a vast global network of switch stations: gas station-like outlets where drivers can swap a spent battery with a fully charged one in a few minutes.
Led by soft-spoken Israeli-born founder Shai Agassi, a former executive at SAP, the company boasts of having built the largest cleantech investment in history. Last January, HSBC bought a 10 percent stake which valued Better Place at $1.25 billion.
Since earlier this year, the eco firm has been running a trial in Tokyo using three taxi cabs and will soon start testing a small network of stations in Israel, where it says it has deals with 92 corporate fleet owners. It expects a commercial launch in Israel and in Denmark in late 2011, and has plans in five other countries, including Australia, China and the United States.
The swap station model's main selling point is speed. Charging an EV battery can take up to eight hours. By switching batteries instead, that wait is reduced to three to four minutes. The company says its business model -- a subscription plan which covers the use of switch stations, the lease of a battery and the electricity used -- cuts a large cost item, the battery, out of the upfront price tag for the car.
The underlying assumption that we're working by is that this is too big a market to do half solutions, says Jason Wolf, head of Better Place North America. You're not going to get to mass adoption by people paying a premium because they want to be green or any other reason.
Early adopters, he says, will always buy cars like the Nissan Leaf and the Tesla Roadster, which retail at about $33,000 and $109,000 respectively. Better Place will reach beyond that niche to the drivers -- commuters, salespeople, small business owners -- who put tens and even hundreds of thousands of miles a year on the clock. There's not a problem getting early adopters. That's great, we need them and we support those types of vehicles, but really where the heart of the market lies is the third of drivers who are burning two thirds of the gasoline.
CAN SWITCHING GET HIP?
But questions remain. In Israel, industry heavyweights including two of the country's biggest car fleets have adopted a wait-and-see approach to Better Place's trial. Eldan, a major leasing company whose cars are ubiquitous on Israeli roads, says it is in close contact with Better Place, but will not sign on until the electric-powered vehicles arrive and the technology is in place. At that time we can determine its quality and will positively consider a relationship with the company, Eldan said in a statement.
There's also little sign that major automakers are ready to start producing cars with switchable batteries. The Israel and Denmark schemes both benefit from generous local tax breaks for non-polluting cars, and will use Renault's Fluence ZE model. So far, Renault is the only carmaker to announce a switchable car. Renault's decision was helped by Better Place guaranteeing a production run of 100,000.
With 57,000 soft orders for the car by July -- most of them from fleet companies -- interest in the Fluence ZE has been greater than expected, insists Better Place. Still, prospective customers have paid no deposit nor made any financial commitment to buy.
Better Place was a catalyst for Renault to go mass market with the electric version of Fluence, says a Renault spokeswoman, adding that it was hard to say whether the model would have seen daylight without that guarantee.
Wolf concedes that Better Place will have problems if it can't convince other automakers to join the French carmaker in embracing switchable batteries. But given where we are in discussions (with automakers) and the logic behind it that all of them see, I don't see it as a major concern, he says.
Perhaps. But even if Better Place can convince other automakers of the logic of its model, there's still the question of what sort of batteries they would use. The electric vehicles on the road or in the works all use batteries of different types -- nickel sodium chloride, lithium-ion, lithium-metal-polymer -- and sizes.
Better Place says it expects to cater for about three different battery types -- more would impose greater warehousing demands at its switch stations -- and predicts other carmakers will eventually settle on one of those types.
You may hold an inventory of two, three types at first and over time what's going to happen is that pressures for OEMs (carmakers) to differentiate on batteries goes away, because you're manufacturer number three, four, five and you haven't already developed your own battery. At that point you're just going to take the least-cost, or best product for the overall vehicle, argues Wolf.
Automakers, though, say standardized batteries are far from inevitable. The world's biggest carmaker Toyota says it will continue to prioritize building cars for safety and performance, not to make it easy to get a battery in and out. There's also the fact that auto owners and manufacturers will be unable to track a battery -- where it's been, the conditions it faced -- which might make it difficult to diagnose problems in a car.
It is hard to imagine, says Toyota's Managing Director in Europe Graham Smith, of standardized batteries. What if a manufacturer feels like they can move faster?
For now, Toyota and General Motors have both chosen a dual, plug-in electric-gasoline approach which by-passes the need for charging away from home.
Even carmakers focused on pure EVs are hesitant to sign up. Every manufacturer has a different battery type, battery size, method for removing the battery, says Andy Wertheim, general manager of environmental affairs at Mitsubishi in Britain. Certainly at the moment we see that battery swapping is not relevant for us and for the foreseeable future.
Nissan, which shares a CEO in its alliance with Renault, also has doubts, citing its own research that shows that people prefer to own rather than lease a battery. There are different battery layouts, batteries are shaped differently. That means even between Nissan and Renault already there are two types of battery. So I just think: how do you store those? asks Jerry Hardcastle, vice president of vehicle design and development at Nissan Motor Co's technical center Europe. Nevertheless, he concedes the Better Place model might eventually work. We're watching very closely what's going on in Israel.
THE COMING NETWORK?
Better Place's main competition will come from extended range cars or the myriad companies building and promoting charge spots or stations: parking meter-like posts on a street, in a car park or elsewhere into which you plug your car to top up its battery.
One such is California-based ECOtality, which has won $130 million funding from the U.S. Department of Energy to install and trial charge spots across the United States. The company expects to install 20,000 stations by May next year.
Other big players in the fast-growing market are U.S.-based Coulomb Technologies, which has about 850 vehicle charge spots installed, Britain's Elektromotive, which has about 1,000, and AeroVironment, which has some 14,000 industrial chargers for the likes of fork lift trucks. Better Place also plans to install charge spots alongside its switch station hubs.
We view this as like cellphone coverage: the person with the largest network is ultimately going to win, says Jonathan Read, chief executive and president of ECOtality. Better Place is going to take a long time and a lot of money to roll it out. We're able to hit the ground and have a greater network distribution before they even start putting their first chargers in the ground.
The Better Place battery swap model, he says, is egregiously flawed -... the concept of vehicle manufacturers agreeing to any sort of common battery is like herding cats.
Office buildings, utilities, local governments and car park operators are all likely customers for EV charging stations. ECOtality will soon announce a deal to install charge points in gas stations, whose owners are keen to entice EV drivers into their convenience stores.
Other retailers see the logic in the schemes. Demand is not very high at the moment, says Jack Cunningham, environmental affairs manager at British retailer Sainsbury, which offers free charging to customers. We take a fairly long-term view that will increase.
But building the huge networks of charge posts that many envisage as the future will not be cheap -- and some experts question the economics of such schemes. In the UK, a single street-side charge post can cost up to 5,000 pounds ($7,700) to install. But with electricity providers making less than 2 pounds per charge, few see the business case for deploying them. We calculated that the payback was more than 50 years at the current electricity cost in Spain, says Jorge Sanchez Cifuentes, EV project manager at Endesa, a Spanish utility. British power providers voice similar concerns.
Getting the capex back is a bit of a stumbling block, concedes Calvey Taylor-Haw, founder of UK-based charge spot firm Elektromotive. You've got to have lots of money from central government.
Cisco's Feisst says state subsidies are the only way to get the infrastructure in place. If you want to make long-distance drives then you need a public charging infrastructure, he says. Utilities don't make a lot of money with public charging infrastructure so there must be government support to develop that, especially in the initial years when penetration of EVs is not high.
As governments cut spending in this age of austerity, though, such subsidies are likely to dry up, making a distant dream of plans for a network of systems that offer drivers universal charging with the cost billed back to a single provider.
CHARGE ME, QUICK
Then there's the time factor. Recharging an EV can take up to eight hours, though that is coming down fast.
AeroVironment says it has devised a 50 kilowatt electric charger based on DC electricity which can power a Nissan Leaf in just 26 minutes, though each unit would cost $30-40,000. ECOtality says it can charge a Nissan Leaf to 80 percent full in 15 minutes using its 60 amp fast charger, which will cost $20-25,000 apiece. Better Place switch station hubs will cost about $500,000 to build.
In my opinion we're talking five to 10 years to have the right battery technology available that can make longer distances and allow faster charging, says Cisco's Feisst. It's critical to have a fast charging process at public charging stations, and then we don't need to replace the batteries.
Fast chargers have their own problems, according to IDC Energy Insights' Sam Jaffe, potentially damaging batteries and creating intolerable power surges on the grid. We are extremely skeptical about very-quick charge stations. It's technically feasible but on a large scale it would be very damaging for the grid.
ECOtotality calls that argument fallacious. But Better Place spokeswoman Julie Mullins agrees and says that's why the swappable battery model will win out: Our mission is to break dependence on oil and we can't wait 10 years for a better battery.
LESS MAY BE MORE
With all the uncertainty about battery-swap stations and recharging posts, it's not surprising that a growing number of EV backers see a minimalist approach -- charging at home or at the office -- as the best way ahead.
Because of safety concerns around the long, continuous load required to power an EV, carmakers are expected to mandate a home-charging device with every vehicle they sell. Little wonder that companies like Elektromotive, one of Britain's biggest manufacturers of public charging devices, have moved into home-charging stations.
Bethan Carver, Manager of Product Development at EDF Energy, the UK arm of French utility EDF, says the modest initial uptake of electric cars almost ensures most charging will be done at home. It's more important to develop charging solutions at home or at work. Our view is that only a small fraction of charging demand will take place on the street, a couple of percent ongoing.
HELPING THE ANXIOUS
Of course home-charging won't work for people who live in apartments and have no designated parking space. And there may be another, more curious reason why at least some roadside charge spots will be needed: to alleviate the range anxiety that many drivers of electric cars seem to suffer.
People were really apprehensive to drive because there was nowhere to charge, says Mitsubish's Andy Wertheim, of a pilot project in Kanagawa, Japan. But with the addition of a GPS system and even a single quick charging post it was amazing what happened with how much further people drove.
Nissan has found similar results. People who charged their cars at home at first go to the areas of Tokyo where there are quick charging points. But because we can track where they're going, as a research activity, bizarrely when they get there they don't charge their cars up. They go back home and recharge at home, says Nissan's Hardcastle.
A SPLIT SOLUTION
In the end, it may be that the electric car market splits in two: urban drivers and fleet operators happy with limited range at low cost in one group, and motorists who want to go further and buy an extended range car in the other. For the next 20 years I think that will see us through, says Paul Nieuwenhuis from Cardiff's Center for Automotive Industry Research. I don't know if battery swap is the answer.
The fundamental problem of Better Place is it's going to cost so much. Can they raise that amount of capital? asks Jaffe, adding that he still sees a lot of intelligence in the model.
For me it's a question of timing, says EDF Energy's Bethan Carver. A lot of the debate so far is on future possibilities.
(With additional reporting by Ari Rabinovitch in Tel Aviv and Chang-Ran Kim in Tokyo; editing by Simon Robinson and Sara Ledwith)