Why electric cars are set to accelerate?
Electric cars are small, slow, uncomfortable and dangerous. At least that is what most people used to think.
The reality is changing fast as major manufacturers shift up a few gears: within a few years we will see electric vehicles on the road that look like their petrol equivalents, but with running costs of a couple of pence per mile.
The US venture capital community has noticed the opportunity. A couple of weeks ago, investors piled $200 million into an electric car start-up in California – making Project Better Place one of the best-funded new businesses in history. The company, though, does not intend to make cars. Instead, it will lease batteries to vehicle owners and operate a network of recharging stations. A driver who runs low on power on a long trip will simply turn into one of these forecourts, where a machine will automatically extract the run-down battery and provide a freshly charged replacement. Up until now, the main problem with electric cars has been the limited battery life. Most of today’s models can run for only 30 or 40 miles before they need recharging. Many can’t travel at more than 30mph and puff a bit going up steep hills. As a result, they are only really suitable for short trips to and from the shops.
Most electric cars are powered by lead acid batteries that are heavy and take many hours to charge. But technology is developing rapidly. Lithium-ion batteries are just about to be fitted to London’s most unlikely fashion accessory, the spectacularly ugly G-Wiz electric runabout. Lithium-ion batteries – smaller versions of which power your phone and laptop – hold more power and can be re- charged more quickly. Further big improvements are in prospect and will make it possible to have cars that travel at a good speed and last for over 100 miles without recharging. These advances have opened the market for the Californian start-up. The new venture is run by Shai Agassi, the Israeli-born former head of development for German software company SAP, who is a passionate evangelist for new technologies. His persuasive skills already seem to have enticed Renault and others into talks about building cars that are compatible with his plan. Many of the world’s automobile manufacturers have electric vehicles on the drawing board and may need to make only small changes to allow easy swapping of batteries in a new network of filling stations.
An electric vehicle will eventually be quite simple, with perhaps a dozen or so moving parts, and will be far cheaper to build than a conventional petrol car. With no internal combustion engine or complex transmission system, maintenance costs will also be much lower. But the battery will be expensive. Agassi quotes a figure of around $10,000 at today’s prices but says this should fall by 50% every five years. If motorists rent the battery, so reducing the purchase price of a car, electric vehicles will look very cheap on the garage forecourt. The company’s presentations offer persuasive evidence that leasing a battery and paying for recharges will be substantially cheaper than filling up. The cost of the electricity should be no more than a fifth of the price of petrol, and as fuel gets more and more expensive, this advantage is likely to grow. Agassi also wants his refueling stations to use electricity generated by renewable technologies.
We Europeans need him to succeed in persuading the world’s car makers to offer cheap, comfortable and robust electric cars for the US market. Eventually we will be able to buy them here, allowing UK businesses to adopt his strategy of leasing batteries and operating recharging stations. Our petrol prices are twice as high as in California, making electric cars an even more attractive alternative. If the idea behind Project Better Place works in the US, it will surely be a huge success here. With continuing high oil prices, my suspicion is that electricity will replace the internal combustion engine sooner than most people imagine. (petrolplaza)
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