Trading pumps for plugs: We aren’t there yet
Published 5:00 am Thursday, March 31, 2011
- Kevin Walsh and his wife, Jeri Countryman, seen with their young child, plug their new Nissan Leaf electric vehicle into the charging station in their garage in San Francisco on March 23. Electric car battery ranges are longer, and government incentives are nudging consumers and the industry to expand the market beyond the luxury niche it has occupied.
Kevin Walsh and his wife, Jeri Countryman, are young professionals in San Francisco with jobs requiring a fair amount of commuting. By himself, Walsh, a process engineer for a large international pharmaceutical company in San Carlos, Calif., logs a total of 43 miles each day.
With pump prices in the area creeping over $4 a gallon, the family was spending $200 or so a month on gasoline.
At the beginning of March, however, Walsh joined a tiny revolution, cutting the connection between his daily commute and foreign oil when he bought what is arguably the first plug-in electric car aimed at capturing the middle-American market: a Nissan Leaf.
“When available and practical, we make decisions to cut back on nonsustainable usage,” Walsh, 38, said about his motives.
President Barack Obama made it a campaign pledge, and later a goal of his administration, to put 1 million electric vehicles on the highways by 2015 and set aside more than $2 billion in the 2009 economic stimulus package for advanced battery and electric car research.
But the promise of an electric car revolution in the U.S. has come and gone before, and the question is where Walsh ends and mainstream America begins.
For electric car enthusiasts, the good news is that the right combination of technology and policy is now in place to ensure that plug-in cars are almost certainly here to stay — in some form. Battery range is longer, and government incentives are nudging consumers and industry to expand the market beyond the luxury niche it has occupied.
Turning a corner
General Motors has just come out with the Chevrolet Volt, a gas-electric plug-in hybrid, and other consumer models, including the Ford Focus Electric and Toyota Prius plug-in are coming.
“Things have really turned a corner,” said Phyllis Cuttino, the director of the Pew Environment Group’s Clean Energy Program. “There’s just a whole broad segment of the population who now see how electric cars can work for them.”
What’s a little less clear, though, is just how quickly all this will unfold, and analysts seem to disagree over what it will take for electric cars to command any sizable portion of the market.
Part of the problem, said Robert Bryce, a senior fellow at the Manhattan Institute’s Center for Energy Policy and the Environment, is that even at $4 a gallon, the price of oil still is not high enough to nudge mainstream Americans beyond the gasoline-fueled engines they know and love.
“I drove past the gas station the other day and gasoline was $4.19 a gallon,” Walsh said. “My round-trip commute cost me less than a dollar in electricity that I produced on my own roof,” he said, referring to the photovoltaic array he installed at his home four years ago.
That kind of enthusiasm is what’s needed to lure the first wave, but electric cars like the Leaf still face hurdles to wider adoption, including a lack of public charging stations, the time it takes to charge (seven hours in most cases) and range limitations.
Faster-charging technologies are in the works, and a number of companies, including General Electric, Better Place and Coulomb Technologies, are vying to grab parts of the charging station market. As for range, the Leaf’s battery permits a nominal driving distance of 100 miles on a full charge, though in actual traffic conditions that is likely to look something more like 60 or 70 miles.
For someone like Walsh, the Leaf works well. For other consumers, that might seem tenuous.
Upfront cost
Sam Jaffe, an analyst with the market research firm IDC Energy Insights, said the other challenge for electric cars remains the upfront cost, which still exceeds comparably built conventional cars. A Leaf, for example, will be priced at about $33,600, Jaffe said, compared with Nissan’s Versa model with roughly the same frame at about $15,000.
A federal tax credit for an electric car will shave $7,500 off the difference. But even if an electric car costs just pennies to operate, Jaffe said that’s not enough for many buyers.
So what’s the market outlook?
In January 2010, the market research firm IHS Global Insight declared that “plugged-in vehicles” — a category that includes plug-in hybrids and fully electric vehicles — would make up 20 percent of the global market for light vehicles by the end of the decade. In November, Bloomberg New Energy Finance speculated that sales of such cars could hit 1.6 million, or 9 percent of the U.S. market, by 2020 and perhaps 4 million, or 22 percent of the market, by 2030.
That would seem roughly in line with Obama’s goal, but Jaffe thinks that’s a bit unrealistic. He predicted that even by the end of 2011, only about 74,000 electric vehicles would be on the nation’s highways, including conversions and street-legal golf carts. That would be out of a total of 250 million cars and trucks, or about 135 million traditional passenger cars, according to the latest government figures.
Jaffe estimates the number of electric vehicles will hit 885,000 by 2015. It’s a solid, if modest number, and by then, most of the early adopters will have, well, adopted.
At that point, it will be up to everyone else. And at that pace of penetration, electric utilities should have enough time to work out systems for managing new demands on the grid. This will probably include lower off-peak prices, Jaffe said, to encourage electric car owners to charge their cars at night, when overall loads on the system are lighter.