Friday, Apr. 22, 2011

Los Angeles Tries a Car Conversion

Kimit Alwaajid, a sales manager at Felix Chevrolet, sits at an expansive desk on the dealership floor. Felix, founded in 1921 in downtown Los Angeles, has seen its share of car trends come and go. Alwaajid is a dedicated Chevy man ("Cut me open and I would bleed blue," he says), but as someone who deals directly with car buyers he's skeptical about the Volt, Chevy's entry into the electric vehicle (EV) market. Reviewers have raved about it, but Alwaajid says the Volt, fully loaded at $43,000 ($35,500 after a federal tax credit) is overpriced by $10,000. "It costs a lot of green to be green," he says, noting that a gas-powered Chevrolet Cruze, a few feet away, gets 40 miles per gallon and costs $16,525. "Electric cars will be relevant in 8 to 10 years," he predicts.

LA officials aim to prove the salesman wrong. They have been sinking millions of tax dollars into clean tech projects. One of the biggest is to turn LA, long associated with the sins of a car-clogged city — smog, traffic jams and an over abundance of SUVs — into the EV capital of the country. The city has been aggressive — and successful — in landing multi-million dollar grants to build an EV grid infrastructure. By 2013, LA will have more public charging stations than any other U.S. municipality. The city has also changed regulations to attract electric car drivers and manufacturers.

Much of the motivation for EVs comes its need to meet strict federal and state clean air regulations. Electrics can certainly be a key to lowering pollution. But at a time of fiscal hardship for cities, it's more difficult to make the investment case for a technology that only a small fraction of their residents now use. Converting the rest could take years, if ever. Still, many cities are taking the first steps toward encouraging the use of EVs. In Oregon, Portland's largest utility has been working with Nissan to develop that city's electric car infrastructure. In February, Chicago announced plans to build a network of high-speed chargers that can nearly "fill-up" an electric car battery in about 30 minutes.

Still, few cities have been as charged up as Los Angeles over EVs. Beth Jines, LA's director of sustainability, says the city's urgency stems from Los Angeles being out of compliance with federal clean air regulations. There is a fear, she says, that the city could lose federal transportation funding unless it meets the federal standards. As such, LA is upgrading its existing 84 city chargers and — through Department of Energy funding — adding approximately 200 new ones. That's on top of the numerous privately funded chargers already available at places like shopping malls. The city is also fast tracking permits through the Department of Water and Power to encourage even more. In homes, the city's Department of Building and Safety is revising building codes to require new construction include wiring for charging stations. Starting in May, the city will begin offering a $2,000 rebate residents who install charges. And LA has already been offering discounted electricity rates for car charging. It can cost as little as $0.95 to fully charge a Chevy Volt in LA, compared to an average of $1.50 in other cities around the country. If you assume the average car gets about 26 miles a gallon, LA electric car drivers are paying the equivalent of $0.70 a gallon for fuel.

Those moves to boost EV sales, along with the mild weather (good for battery life), have all combined to make LA attractive for the electric car industry as well. Nissan based its Leaf EV design operations in LA. Alternative fuel prototypes from major car companies such as Mercedes-Benz and BMW can be seen tooling around the city's highways and byways. EV upstarts Fisker Automotive and Coda are also in the area.

Despite progress, some wonder whether LA's efforts are a waste. More chargers may help, but most likely not nearly enough to have a significant environmental impact in a city of 26 million. Some experts say battery-powered cars will need a longer range — now at 40 miles on average per charge — and reduced re-fueling times, now 12 hours on a standard charger. What's more, the high sticker price of electric cars, even considering the savings on gasoline, does not make them a viable economic option for most working-class Angelenos.

Hutch Hutchinson, the managing director of the Rocky Mountain Institute, a non-profit organization that advocates greater energy efficiency, says Los Angeles, in theory, is a good testing ground for EVs because people have long commute distances and there is collective desire to decrease air pollution. But he says, in practice, LA's sprawling structure — there are 89 municipalities in Los Angeles County that need to cooperate — may make it a tough place for EVs to succeed. "Any one piece can break it," says Hutchinson.

Nonetheless, Los Angeles is trying to sell itself as an electric Detroit. And LA is the type of place, with its movie stars and desirable lifestyle that can establish trends. California has led the world in technology innovation. And EVs have more in common with an iPad then an internal combustion engine. "When you look at sales projections over the coming years, California is on the leading edge," says Russell Hensley, a partner at consulting firm McKinsey & Co.