China to lead in electric cars?

Following up on Jeff's post, there have been a few recent articles in the New York Times reporting on how China plans to become the world's leading producer of electric cars. Citing air pollution and the increased importing of foreign oil as two of the primary concerns that electric vehicles would address, the idea is also promoted as a key to China's international competitiveness. While it is unclear how this will help them address the problem that they've had with meeting the safety standards of the U.S. and European countries, it seems likely that they'll be able to make inroads as a supplier of batteries to those markets as increased production reduces the manufacturing costs.
The articles mention several of the factors that will both help and hinder the process. On the positive side, commutes in China are usually intracity, and often slow due to the traffic congestion. Many consumers are buying cars for the first time, and won't necessarily notice (or care) that the cars are less powerful than gasoline powered vehicles. And Chinese law makes it difficult for consumers to sue automakers over safety issues. To help with the adoption, the government is offering subsidies to the consumers of such vehicles, up to $8800 for taxi fleets and local governments.
There are several major challenges to overcome as well. The vehicles are predicted to be twice as expensive as conventional vehicles, and still significantly more expensive even with the maximum rebate. The majority of the people in urban areas live in apartments, and thus infrastructure will need to be created to allow the vehicles to be charged. And because much of China's electricity comes from coal, it will not reduce the pollution problems as much as it might otherwise. However, as we've learned in class, it's easier to clean up pollution at a few thousand point sources than it is to clean up millions of tailpipes. It's also easier to change the generating source later on than it would be to replace millions of vehicles if they were to wait on this.
Overall, it looks like China is very interested in making rapid inroads into this market, both at home and internationally. It will be interesting to see how Detroit responds to this new challenge, and whether it will even be able to.

Web sources:
China Outlines Plans for Making Electric Cars
China Vies to Be World’s Leader in Electric Cars

Exciting Infrastructure Support for Plug-in Hybrid Electric Vehicle (PHEV) Adoption

Slowly but surely innovation in the automotive industry is pushing toward PHEV technology. On a recent trip to Shanghai, I spoke with the CEO of Ford, China. He believed the PRC officials in Beijing were going to leap-frog the U.S. - going straight from combustion engines to PHEV technology through blunt force (as is typical in China). U.S. national policy seems focused on providing incentives for consumers to purchase PHEVs (mostly in the form of rebates), and putting a gun to Detroit’s head by forcing PHEV innovation with strings attached to the bailout money.

Some controversy about the actual mpg performance of existing models has questioned the economic savings at the pump. Several DOE tests done under real-world driving conditions showed only 51mpg performance for vehicles that were capable of 100mpg performance under lab conditions.

Despite the challenges there are several firms who are locking-in their first mover advantage in the U.S. urban markets they think will be early PHEV adopters.

Two top competitors in this space are starting their efforts in California. Coulomb Technologies has plans to install 500 PHEV charging stations along California highways in 2009. Better Place is focusing on charging stations that also offer battery swap services. A San Jose news report stated that a Coulomb’s “ChargePoint” charging station was installed in twenty minutes and cost only $2,000 dollars (paid for by Coulomb). The unit is only three-feet high x one-foot wide and in this case they had strapped it onto a modified street lamp. Coulomb customers who have an account, sign-up for a access key, that when swiped at a charging station, opens the door to the outlet. Once plugged in, you close and lock the door (so that no one is tempted to unplug you). What I found fascinating was that Coulomb is emulating the electric utilities’ rate model by charging customers a “subscription fee” which blends the cost of the electricity that they consumed at the charging station with maintenance costs, and the up-front capital cost it took to install the station. Most importantly, the units have bi-directional metering so if your car is plugged into a charging station at a parking deck during peak hours, Coulomb’s software will stop charging your battery during those peak hours to help the electric utility “peak shave” demand. There is a revenue sharing business model with “hosts” who buy the charging stations, although this isn’t released. They have also integrated with Google Maps to not only show the location of charging stations in their network, but through their network software they can determine which station is occupied at a given moment. This will allow customers to plan their route and choose the closest unoccupied station. The company has already formed a joint venture with a German company to distribute Charge Point stations throughout Europe, the Middle East, and Asia (EMEA). Although GridPoint’s V2Green has through their partnership in the “Pecan Street Project” marked Austin as their target. There are two PHEV vehicles on a proof-of-concept project with Austin Energy to determine the value of PHEVs as load-management resources. It will be interesting to see if these two California players make inroads in the Austin market in the next 3-5 years.

Web Sources:
http://cleantechnica.com/2009/02/18/smartlet-stations-charge-plug-in-vehicles-from-sidewalk/
http://www.coulombtech.com/aboutus.php
http://www.betterplace.com/
http://www.gridpoint.com/solutions/electricvehiclemanagement/
http://www.verdek-ev.com/MainPage.aspx
http://www.greentechmedia.com/articles/are-the-benefits-of-plug-in-hybrids-overstated-6014.html