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The Revival Of The Electric Car

Ryan Faughnder |
November 19, 2010 | 2:06 p.m. PST

Associate Editor

The electric car supposedly died years ago. Whether it occurred because of a vast conspiracy or natural causes, the death of the plug-in vehicle seemed certain after General Motors pulled the plug on its EV1 program in 2003.

2011 Chevy Volt (Ryan Faughnder)
2011 Chevy Volt (Ryan Faughnder)

If that’s true, then the L.A. Auto Show, which opened Friday and runs through Thanksgiving weekend, is Zombieland.

Nearly every manufacturer participating in the event at the Los Angeles Convention Center this week has unveiled a production-ready, commercially viable electric or hybrid car.

Chevy’s 2011 Volt won the auto show’s 2011 Green Car of the Year award, only adding to the superlatives lavished on it by Motor Trend and Automobile magazine. The Volt uses a gas-powered generator to create electricity that it stores on its onboard lithium battery. It has been called a “game changer.”

All these accolades have arrived fortuitously in-sync with General Motors’ recent return to Wall Street. Its initial public offering set records. Its stock sold for about $35 per share on its first day.

Eco-friendly cars like Honda’s Fit EV, Nissan’s LEAF, Kia’s POP and Toyota’s RAV4 EV are also on display and receiving considerable attention. These are the ultimate undead driving machines.

Honda’s entry is worth noting because, for years, the company focused on developing hydrogen fuel cells. Now it has switched gears to concentrate on its plug-in model.

Experts and clean-energy advocates said they are optimistic that history will not repeat itself and that the electric cars are here to stay.

This time is different, said alternative fuels expert Mike Omotoso of J.D. Power and Associates.

“In the past, we’ve seen electric concept cars, but I think this is the first show where every electric car we’ve seen is going to go on sale in the next year or two. So, it’s for real this time.”

Paul Scott, Vice President of the advocacy group Plug In America, notices the change, too.

“The difference is stark,” he said.

The first time around, car companies invested in green energy because of a California law. The California Air Recourses Board’s Zero-Emission Vehicle mandate in 1998 originally required that automakers make low-emission cars at least two percent of their production output. This time around the incentives are stronger, and they seem to be working.

“It’s exciting, because we’ve been fighting for this for years,” Scott said. “We not only have traction, but every manufacturer on the planet has announced a plug-in vehicle.”

Scott credits federal and local government incentives for resuscitating the electric car. The federal government now offers consumers a $7,500 tax credit for purchasing an electric car. California offers an additional $5,000 rebate. This is important because alternative fuel vehicles tend to cost about $10,000 more than their comparable gasoline-powered counterparts.

Omotoso also attributed the revival to government investment.

“The Department of Energy has allocated $25 billion for advanced-technology vehicles. So companies like Ford and Nissan and Tesla have all received these loans, and that has helped them develop and manufacture electric cars and batteries and motors that are used in those EVs,” he said.

Manufacturers are also required to have a fuel efficiency average of 35 miles per gallon, and they can’t do that with gasoline motors alone.

In addition, Mayor Antonio Villaraigosa on Thursday announced a program to install more charging stations around California and make it easier to install chargers in residencies. That way, electricity providers like Southern California Edison and PG&E have an incentive to participate. The program could help apartment residents who don’t have garages in which to charge their vehicles.

Omotoso said this should be effective because one of consumers’ main worries is that their batteries will run out of juice between power sources. 

Chris Paine’s activist documentary “Who Killed the Electric Car?” argued in 2006 that the demise of General Motors’ EV1 occurred because of lobbying against the government by car manufacturers and oil companies, while GM argued that they pulled the electric vehicle because of lack of demand.

However, Angus Mackenzie of Motor Trend wrote in 2008 that, in fact, no one killed the electric car, and that “Big Oil” had been framed by activists like Paine. The problem was the battery, he wrote. The technology simply wasn’t adequate. 

“The reality is the EV1 was hostage to a technology the engineers knew from the get-go just wasn’t able to do the job Roger Smith and the California Air Resources Board believed it could. That’s what killed the electric car,” Mackenzie wrote.

Now the technology appears to be there, and so do the incentives.

However, a recent report by J.D. Power shows that the demand for these low-emission vehicles is still lower than manufacturers would like. Omotoso said that, though the car companies may struggle in the short-run, the long-term investment will be worth it.

“Car companies may lose money initially, and it won’t be until the second or third generation of vehicles that car companies start to make money. And that’s actually similar to what’s happened with hybrid vehicles,” he said.

“The Toyota Prius is the most successful hybrid, but Toyota actually lost money on the first two generations of the Prius. And they only started making money on the current generation, which came out last year.”

Electric cars are a big deal this year. But, let’s face it, not many people have $40,000 to drop on a new Volt. Still, Omotoso said, the car companies benefit from showing off the vehicles. The new concepts might draw consumers into a showroom, even if shoppers can’t afford the EVs.

“You might go to look at the Volt, but you might end up buying a Cruze or a Malibu, so it still works out for the car company.”

Now that the car companies have invested so much in new technology, the Lazarus that is the electric car likely won't go back to the grave.

Reach Associate Editor Ryan Faughnder here. Follow him on Twitter here.



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