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The documentary who killed the Electric Car? accused General Motors of conspiring with the oil industry and politicians to shelve its popular and promising EV1 in the 1990s. How things have changed. Soon electric cars will be whirring through your neighborhood, and some of them will be made by GM. These battery-powered vehicles, charged in your wall outlet like some oversized cordless power tool, will revolutionize not only the auto industry but also the way Americans live and drive.
At least that's what major automakers are betting billions on. Tesla's high-performance $101,000 roadster is already the must-have toy for Silicon Valley boys. This fall, more-affordable cars will roll out. GM is launching its long-awaited and much hyped electric Volt for about $40,000, with federal tax rebates that knock the price down to $32,500. Around the same time, Nissan will begin selling its all-electric Leaf, a $32,780 compact that the Japanese carmaker says will average 100 miles on a charge, and Daimler will lease an all-electric version of its Smart Car. Not to be outdone, BMW, Chrysler, Ford and Mitsubishi, among others, will have electric models within a year or so. Even Toyota, long a proponent of hybrids, announced in May a venture with Tesla to develop electric-car technology in California.
The fossil-fueled internal-combustion engine that's now powering your car isn't going away anytime soon. But automakers understand that the technology, in place since the 19th century, is unsustainable. With the world's population slated to jump from 6.8 billion to 9 billion by 2050, the number of cars will outstrip the supply of oil that currently drives them. Tony Posawatz, who heads GM's Volt project, says, "Everyone agrees we have to get off of oil. In 10 years, the number of cars around the globe will rise from 800 million to 1.1 billion. We know the price of oil will go up again."
Plug-in cars will help the U.S. kick its oil addiction and address crude's familiar litany of problems: the BP spill in the Gulf of Mexico, greenhouse-gas emissions and a dependence on petro-punk dictators who don't always have America's best interests at heart. That's something not lost on the Obama Administration, which has allocated billions in stimulus funds to support electric-car makers and build a national infrastructure of charging stations.
Should you buy an electric car this year? Huge roadblocks remain. How many drivers will be willing, or able, to charge their cars 7 or 8 hours a day for only 100 or so miles of driving? More than a few will surely suffer from the dreaded "range anxiety" — worrying that they'll run out of juice in the middle of nowhere. Price is an issue too. Electrics cost considerably more than comparable gasoline-powered cars and are too expensive for the average buyer.
The good news is that, unlike in the mechanical world, where improvements are incremental, electric-car technology is advancing quickly, and the price is dropping as it does. The key is lowering the cost of the lithium-ion battery. The Nissan Leaf battery costs an estimated $15,000, about half the car's sticker price. (A $7,500 federal tax credit takes away a bit of the sting.) The cost of making these power packs, however, will drop — according to some experts, by half in a few years. And charging the car? The U.S. now has only about 1,000 battery-charging stations, mostly in California. Department of Energy grants will help fund at least 10,000 more of them in selected cities nationwide by the end of 2011.
Bringing Hope to Detroit
Of all the automakers in this electrifying game, the one for which the stakes are highest is GM, a.k.a. Government Motors, the taxpayer-controlled company that is struggling back from bankruptcy. So far, GM has invested $700 million to tool up for the Volt, not including countless millions in R&D spending. Mark Reuss, president of GM North America, looks at the Volt as a small step in the right direction: "The car is not do or die for GM, but it is a demonstration of our technical prowess." In other words, if electrics are the future, GM can't afford to be left behind.
The Volt also symbolizes hope for Detroit. The first production models will roll off the line at its Hamtramck factory, offering much needed jobs to a venerable plant in this embattled city. Plant manager Teri Quigley estimates that by 2014, the Volt could help to more than triple the number of employees at Hamtramck, to 3,500, from 1,100 today. (Other models, like the popular Malibu, will be built there too.) Larry Jones, an assembly worker at the plant, reflects this optimism over the din of welding robots. "With the Volt, we've got a car no one else has, and the world is watching us," he says. "We're not going to fall flat on our face."
The first thing to understand about the Volt is that it is like no other car. True, this aerodynamic, compact four-seater sedan does not have the eco-toad look of a Toyota Prius (a potential drawback for buyers who want to display their green cred). But it's what's under the hood that counts. Cars like the Nissan Leaf are pure electrics. Charge them and you can go 100 miles. The Volt is what in industry parlance is called an extended-range vehicle. You can travel the first 40 miles on electricity alone. The Volt's 400-lb. battery, tucked in the car's underbody, takes about 4 hours to charge on a home 220/240-volt outlet — the same kind your clothes dryer uses. But you will need to buy a special charger to do this. After the Volt's battery runs down, a four-cylinder gasoline engine kicks in that provides electrical energy to drive the wheels, giving the car a total range of more than 340 miles. GM will guarantee its battery for eight years or 100,000 miles. The wheels of the Toyota Prius, by contrast, are driven mostly by a traditional gas engine aided by an electric motor. Want to go another 300 miles or so in the Volt? Just refill the gas tank. Driven just on its gas engine, the Volt should get a Prius-like 50 m.p.g.
When asked what message GM wanted to convey about the Volt, Anthony DiSalle, the car's director of marketing, said, " Freedom from the gas pump." In a sense, the Volt provides the best of both worlds — all-electric power for day-to-day driving and a gas-powered engine to let you take that spur-of-the-moment trip to Reno. When I took the car for a test-drive in June, the handling was smooth, the acceleration was a brisk 0 to 60 in under 9 sec., and the quiet was remarkable in both electric and gas modes.
The Volt's bolt-on gas engine has become something of a debating point in the green wars. Tesla, Nissan, BMW and other proponents of all-electric vehicles argue that 76% of Americans drive less than 40 miles a day. An electric car that gets 100 miles on a charge should do just fine. Why lug around a heavy, expensive gas engine as the Volt does? But in these early days of electrics, Chevy doesn't want to give consumers a reason not to buy a Volt.
One drawback of all electric cars, including the Volt and Leaf, is that the range will vary dramatically depending on driving conditions. Nissan says the Leaf has a 100-mile range, but that's on cool, sunny days and on flat roads. In fact, the Japanese carmaker recently announced that the Leaf's range could vary from 47 to 138 miles. In other words, drive the Leaf on a hot day in heavy, stop-and-go traffic and its range drops to 47 miles, says Nissan.
Initially, a shortage of charging stations could present a problem for drivers of the Volt and other electric cars, but the nation is quickly ramping up. Richard Lowenthal, CEO of Coulomb, a Campbell, Calif., start-up, says that over the next year and a half, his company will install some 4,500 charging stations around the country. "The typical car is parked 23 hours a day. You can charge it while you work and while you sleep." Lowenthal is installing most of his charging stations — rectangular boxes that are about the size of a parking meter, with a plug and cord — at office parks and homes. Corporations such as Dell, Netflix and beermaker Sierra Nevada have installed a few in their parking lots. Cost? About $3 per charge.
A Chevy for BMW Prices?
Although GM seems to have mastered the technology, its bigger challenge is the price. The Volt retails for roughly $40,000 — more in the range of a BMW than a Chevy. After the $7,500 federal tax credit, the price becomes a bit more bearable, and states such as California and Colorado will chip in a few thousand more. That still leaves the Volt in the high $20,000s to low $30,000s before options like leather seats are added. A Prius, which is a bigger car, starts at $22,800. The Volt does have a more finished interior and feels more powerful — electric motors deliver torque instantly to the wheels — but that's a big premium for battery bragging rights. And for those who want a 100% battery-powered car, the Leaf will sell for about $22,000 after subsidies.
In Detroit, GM believes Volt drivers will run on all-electric most of the time. Each electric mile — it varies depending where you live — costs about 3 cents, compared with 10 cents for each gas mile. This saves a driver traveling 10,000 miles a year on battery power roughly $700 annually in fuel costs. Given that you can buy a similarly sized compact car for $10,000 less than the Volt, the payback time for the Volt buyer is about 14 years at current prices. Know anyone who drives a 14-year-old car? And that's with rebates.
GM contends, not unrealistically, that volume will bring the car's price down dramatically over time. And that's crucial because it's not clear that buyers will be willing to pay a green premium for the Volt. When gas prices hit more than $4 per gal., car buyers stampeded to the gas-sipping Prius. The first few thousand Volts will fly out of showrooms, even with a $40,000 price tag. Says Brett Smith, a senior analyst at the nonprofit Center for Automotive Research in Ann Arbor, Mich.: "In this industry you can sell 10,000 of anything." It's the next 100,000 sales that really matter.
For all the excitement surrounding the electric car, remember that this is a young, transitional technology that will take time to go mass market. In fact, the Volt is just one part of a broader green-technology platform. When in Detroit reporting this story, I drove an impressive Chevy Equinox powered by a hydrogen fuel cell. The company is also working on clean-diesel and natural-gas power trains.
The way the Volt is designed, it could potentially be converted into a purely electric vehicle to sell into that market niche. While the Volt certainly won't dramatically improve GM's fortunes — or those of American taxpayers — in the short run, this car and the technology that drives it at least suggest that Detroit isn't dead. It's recharging.
- Brian Dumaine