Why it’s Time to Invest in the Electric Car

The electric car has been around for quite some time, but somehow it’s never quite caught on. The reasons for this are many—sticker shock at the dealership, concerns over handling and safety, and an irrational fear of running out of juice 50 miles from the nearest outlet. Or could it simply be that it’s way cooler to drive a gas-guzzling souped-up powerhouse than to pilot a matchbox and admit you care about the environment? The latter perception might prove difficult to debunk, but 40 years on from the unveiling of the first full-powered, full-size hybrid vehicle, it’s worth taking a fresh look at the electric car and all it can offer us today.

The concept of the electric car was born from Scottish inventor Robert Anderson in the 1800s when he built a rudimentary electric carriage powered by a non-rechargeable battery. By the early 1900s the electric automobile had advanced greatly and represented one-third of all cars found on the roads of New York City, Boston, and Chicago. But Henry Ford would soon squash the electric era with the advent of his Model T, a much faster, more powerful and more reliable automobile that ran on a dirt-cheap commodity – gasoline.

Since then, much has happened to reenergize the development of the electric car—rising gas prices and a push for energy independence, recession, and tighter environmental regulations across Europe and the United States have all played into the story. Britain, for instance, is taking serious steps toward the reduction of air pollution, with a goal to cut 80 percent of its CO2 emissions by 2050. In order to reach this goal 40 percent of all cars in Britain will need to be electric or hybrid—an electric car releases 35 to 60 percent less CO2 than a conventional car.

In the US, a long recession beginning in 2007 lead to the virtual collapse of the American auto industry and a reinvestment in electric car technologies. Since 2009 the US government has sunk over 2 billion dollars into the development of electric vehicle batteries and infrastructure necessary to support plug-in electric vehicles. And the US auto industry is tasked with meeting new fuel efficiency standards set down by Obama Administration stating that all vehicles should run 35.5 miles to the gallon by 2016.

Uncertainly over the availability of fossil fuels, fuel-efficiency mandates, and tighter environmental regulations spell a great opportunity for smaller auto makers in particular. A transition to electric will mean opening up the game and challenging the monopoly of today’s most popular brands.

Vehicles powered by electric energy have a lot of advantages—at least in theory. They don’t rely on fossil fuels as sources of energy—they can also be powered by bioenergy, wind power or even solar energy.  According to recent research published by the German Ministry of Economy and Technology, 1 million electric vehicles would require an increase of current electrical power production of only 0.3 percent. Worries that electric cars would essentially fry the grid are largely unfounded. Utilities have been working for many years behind the scenes to make sure this wouldn’t happen. Advanced charging technology helps to distribute power loads and home charging stations can operate during off-peak hours—which is more efficient and usually cheaper. Smart chargers—which calculate when to charge based on the time and distance you commute, local rates, and electricity demand in your neighborhood—are already on the market.

What about if you are traveling a long distance and you’re not sure your electric car can make the entire journey without a recharge? In Israel they are tackling this problem head-on. The Israeli government has teamed up with Renault and a start-up called Better Place, to build an electric car and a network of charging posts in Tel Aviv. Consumers buy the car and then purchase a separate subscription to the power infrastructure (think cell phone coverage). A GPS on the dashboard of the car lets drivers know where they need to recharge. The Renault car can go for 100 miles before it needs recharging. Better Place has plans to expand its reach to Asia, Europe and Australia over the next few years.

Charging Station

The electric cars of the 1990s—infamous for their exploding batteries—have been replaced with more sophisticated versions like the Tesla Roadster, which can go from 0 to 60 in five seconds and has a drive range of 240 mile. Tesla’s website proclaims that costly and time consuming gas station stops and oil changes are so “last century.” They have a point. Driving an electric car over a period of one year, the average person would pay about $300 extra on their electric bill but rake in a whopping $1,200 in gas savings. And while electric cars are not cheap—from $40,000 to more than $100,000—the government often doesn’t mind stepping in with generous tax credits for consumers.

Yet despite all the progress we’ve made with electric vehicles globally, we still have a long way to go before we can put them on an equal footing with today’s fuel-efficient compact cars. Electric cars are still vastly unaffordable to the average Joe because of the high battery costs.

Guenther Schuh, Chair of Production Systems at RWTH Aachen University, Germany, and one of the masterminds behind StreetScooter—an electric car project—states that much progress still has to be made in terms of technology and production efficiency. Schuh states that “potential buyers have to put up with some reduced autonomy, reduced performance and reduced passenger comfort, as air conditioning, for instance, places serious additional load on the batteries of electric vehicles.”

An electric vehicle causes significant pain for potential buyers,” Schuh says. “To ensure a rapid acceptance of e-cars in the compact car segment, it is crucial to introduce an affordable electric vehicle that can compete with conventional compact cars in terms of economic operation, reliability and safety, while being suitable for profitable serial production.”

The StreetScooter project—which acknowledges the importance of electromobility for the German automotive industry—aims to develop viable answers to the many questions around electric vehicles. Building on his comprehensive expertise in complexity management, change management and virtual factory concepts, Schuh has recruited a number of automotive suppliers with particular expertise in key areas to participate in the StreetScooter project.

The goal of the StreetScooter project is to develop an environmentally friendly family of electric vehicles for urban traffic that is suitable for serial production in a network of medium-sized supply chain partners. The solutions developed are intended to provide answers to technological and economic issues arising from e-vehicles and to contribute to the definition of standards. The project is promising because of its forward-thinking, long-term approach to the design of its vehicle. The car build is based on a modular product architecture that enables ongoing innovation through the adoption of the latest advances in component technology. The first prototype of the Street Scooter was unveiled in Aachen, Germany last month.

Wherever you look today—Europe, America, Asia and Africa—you’ll see innovative electric car technology, either in the planning or already being used. Realistically, we may be another 10 years away from seeing electric vehicles dominate our urban streets, but the push towards a cleaner environment and energy independence isn’t going away. Smart automakers are investing in new technologies, and smart consumers should keep their eyes peeled.

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