2010 is shaping up to be the year remembered as the launching point for high-volume production of highway-capable electric vehicles (EVs). We can expect to see the Chevy Volt, Nissan Leaf, and Coda sedan enter production, among other vehicles. Other plug-in electric cars from major manufacturers will soon follow.

Governments around the world have committed massive amounts of funding to the electrification of the automobile. This influx of capital is allowing the business world to ramp up at a torrid pace. That said, this is a long road, with a tough grade to climb.

This post, which will be updated as conditions and information warrant, shares notes gleaned on the realities of EVs from a number of industry conferences. While we encourage the adoption of EVs, we are realists, not cheerleaders.

The Building Blocks:

Lithium – There is no worldwide shortage of the basic elements required for the state-of-the-art lithium ion battery packs. Lithium is abundant, although there are scant resources in the United States. The lion’s share of the world’s lithium can be found in Bolivia and Chile.

Battery Supply – Demand for finished lithium ion battery packs is likely to exceed supply until a sufficient number of factories are built and are brought online. Demand for lithium batteries may rise from 2-4x over the next ten years, due to EV production.

Battery Cost – The cost of the Lithium Ion battery pack can currently vary from 25-50% (approximately) of the total cost of a highway-capable EV, depending on vehicle range and technology. Stakeholders are betting heavily that increased production will lead to lower battery costs.

Battery Recycling – Lithium batteries are touted to be highly recyclable, both for their basic elements, as well as for use in less-stressful energy storage applications.

Battery Swapping – No EV manufacturers have committed to a domestic battery swapping scheme (a la Better Place).

Rare Earth – The DC brushless motors used in most electric cars contain rare earth magnets. All of the world’s current rare earth magnet production is based in China. The United States has not produced rare earth magnets in half a decade.

Electric Vehicle Charging – Electric vehicle owners must forget about the gas-and-go fueling convenience they’ve come to expect with their oil-based transportation devices. A stop to recharge will require a significant investment of time.

There are three tiers of charging:

• Tier 1 – Home-based, via 120 Volt line. Charging takes place overnight, in a roughly 10-12 hour span.
• Tier 2 – Home-, Fleet- or Public-based, via 240 Volt line. Charging in a 3-6 hour span.
• Tier 3 – Fleet- or Public-based, via up to 500 Volt line. Fast-charging in 30 minutes or less.

(Times will vary, depending on factors that include the specific charging device and size of vehicle battery pack.)

While most home garages have 110V outlets, 220V outlets are not common. The installation of a 220V line and charger adds to EV acquisition cost. 500V quick charging is not practical for home use.

High-powered commercial quick chargers will be located in enclosed areas, to minimize the possibility of electrocution due to wet environments. It is likely that consumers will not be allowed to handle the quick charging equipment themselves. For safety reasons, conditions may suggest using robotic arms or attendants in rubberized suits.

Public-charging dramatically alters the refueling venue. EV drivers will not sit around waiting for half an hour (or more) at a typical service station. Quick charging may be handled with concierge-like arrangements at dining and shopping destinations, as well as at sporting and entertainment venues.

EV Infrastructure – For EVs to become hugely successful, we must have sufficient public infrastructure to encourage rapid adoption and minimize the effect of range anxiety.

EV Acquisition Costs – The majority of consumers will not be able to afford to buy EVs, given current costs and the economic climate. Battery packs may be leased separately from the vehicles to reduce initial acquisition costs. Government purchase subsidies will be needed for the near future to stimulate demand.

Geographical Considerations – EVs are best suited to temperate climates. EV drivers north of the frost line can expect significantly reduced vehicle range, due to environmental conditions. Cabin heating, seat heaters, defrosters, and the like will reduce range due to increased draw on the battery.

We are here to share truth, not spew venom. Plug-in electric cars are one – yet mighty – arrow in the quiver in the quest for domestic energy independence.

If you are in the industry and seek to clarify any of these points, please jump in … we absolutely welcome the participation of those who truly know. This is, as the saying goes, a living breathing document, without political ambitions.

The AMP=D ‘33 garnered plenty of attention. The E Hot Rod wasn’t in the “Making Green Cool Zone” at the back of the second floor of the Las Vegas Convention Center’s South hall … it was front and center in Factory Five’s booth in the middle of Hot Rod Alley. This placement allowed the maximum number of show attendees to get a good long look at what just might be the future of hot rodding.

While the 0-60 time is projected as a mere three seconds and the driving range at 100 miles, the car has yet to be put to the test.

Many thanks to Mike at AMP=D and Jeremy at Factory Five for their help in shooting this segment and to CNN’s iReport for airing the clip.

As a nation, we must take a comprehensive and unbiased approach to national transportation/energy policy. We have been given the natural resources to make this happen. It is simply a question of having the will to see it through, without giving into factions and lobbies.

Step 1: Immediate and massive conversion of diesel fleet vehicles to natural gas power (NGV). This will spur employment and lower pollution in communities across the nation. School bus, public transportation, utility, delivery, and courier fleets present a prime opportunity for retrofits and new vehicle sales.

Step 2: Encourage the rapid adoption of highly-efficient clean diesel passenger vehicles. The engines and exhaust treatment systems have been developed. Americans need to be able to buy passenger vehicles with the same fuel-efficient engines that are available in Europe, where diesel market share exceeds 50%.

Step 3: Continue to encourage the development of electric-powered passenger vehicles (PHEVs & EVs). Lets get the battery plants built and bring these cars to market at an affordable cost. This will require massive government subsidies in the short-term, until the cost of production is driven down to a realistic level.

Step 4: Turn up the heat on biofuel development. Ease away from inefficient corn-based ethanol production. Increase algae production efforts.

Step 5: Provide micro-grants to garage entrepreneurs for technology development and installation. Revitalize the auto dealerships that have lost their franchise and get those service departments humming again.

Step 6: Encourage drivers to become more fuel-efficient through technology and technique. You don’t have to drive like Grandma to save a few dollars at the pump each time you fill up. Over the course of a year, the savings can be significant.

It’s a great feeling knowing that someone has been listening. We’ve been banging the drum here at MPGomatic for two years now.

An average of 35.5 MPG is not a lofty goal, even in this shortened time frame. Back in March of 2008, MPGomatic opened some eyeballs and raised a lot of eyebrows when we published 35 MPG: Why Wait Until 2020, an article that provided details on the export-only fuel-efficient diesel-powered cars and SUVs that Chrysler builds right here in North America, half of which already hit the 35 MPG mark. Hundreds of thousands of folks have read that article and learned the truth over the past fourteen months.

In Europe, 35 MPG isn’t a goal. It’s the norm.

America need not and must not fear this change. We must embrace it with the realization that it is the best way forward.

35 MPG does not = wimpy cars.

BMW’s current lineup in Germany already hits an average of 35 MPG. To this point, this has been achieved without selling hybrid vehicles. Roughly fifty percent of the vehicles sold by BMW in Germany are powered by fuel-efficient clean diesel engines.

We’ve had the good fortune to spend time with two of BMW’s clean diesels, the 123d and the 335d. These are fantastically fun-to-drive driving machines.

While the little 123d is yet to be imported into the States, the 335d is currently available … with a federal tax credit, no less … and it’s a ball of clean green fun. In our week with the 335d, we were able to easily achieve highway mileage in the mid-forty MPG range, while blasting out six second 0-60 MPH times.

Why isn’t the conventional press screaming the praises of this car?

The road to the future will take multiple alternative fuel technologies, including clean diesel, NGV, hybrid, plug-in electric, extended-range electric, small-displacement direct-injected gasoline, and yes … even hydrogen.

Through our auto industry may be in tumult, the automakers now have a clear path to follow. Ford, Chrysler, and General Motors aren’t down for the count. They’re between rounds. Each one of these companies has the technology and the will to get this done.

Bring It On.

According to the AFVI, the Economic Recovery Act that was signed into law by the President yesterday includes:

• $ 2 billion for research for electric vehicle batteries
• $ 10 million for advanced technology vehicle manufacturing
• $400 million for near-term deployment of electric drive vehicles
• $300 million to reduce diesel emissions
• $300 million for regional deployment of alternative fuel vehicles

The Diesel Technology Forum notes that the $300 million earmarked for heavy-duty diesel vehicle and equipment owners to retrofit their fleets represents a six fold increase from last year’s funding level of $49.2 million.

In the meantime, I couldn’t resist dropping another iReport off at CNN, regarding the topic of economic renewal through energy independence …

I’m optimistic that this bill is the first step in establishing a comprehensive and coherent energy policy in this country. 100% energy independence is America’s best bet for a long and lasting recovery. We need to fix what ails us, rather then haphazardly blast out a bunch of expensive band-aids with a shotgun.

While it’s cool that we’ll all be eligible for a sales tax rebate on purchase of a new car, the measure would have been even more effective if the House had seen fit to maintain the provision for the auto loan interest rebate.

Regardless of that, the auto sales tax rebate is a first step to helping pump revenues back into the States, into the automakers, and into the dealers at the local level.

As I’ve written on these pages, this is a great time to buy a fuel-efficient car. There are tax rebates for certain hybrids and clean diesels – on top of the sales tax rebate.

“Modifying a MINI, like any vehicle leased by MINI Financial Services, may violate the terms and conditions of the contract regarding modifications done to the vehicle as it may also affect as the new vehicle warranty. Therefore, we do not recommend or endorse a wrap,” replied Vincent. “This is an engineering field trial more than anything else and with the flying doctors who will be checking in on the cars, such activity will be noticed.”

Ah well, the best laid plans, and all that …

With the raft of web efforts to brand everything with a logo for a fee (no, I won’t wear your t-shirt), I figured that selling MINI E sponsorships would be a slam dunk … especially with the fleet of electric MINI Es scooting around the media hubs of NYC and LA, our country awash in a sea of relatively cheap petroleum, and electric vehicles facing a startlingly huge perception deficit.

It’s crucial that we tilt expectations in these difficult times through the use of social proof. Hundreds of people might see a single MINI E in the course of a day, but if the vehicle’s not clearly branded, how will they ever know it’s an electric car?

They won’t. And that’s the problem.

Forward-thinking working folks who would love to participate, but are prevented from doing so because of the costs see the MINI E as a frivolity for the wealthy few. A MINI E sponsored wrap program would accomplish a number of win/win goals:

• fill seats with happy raving evangelists that drive to work every day
• widen the marketing impact on the street in key markets
• spawn an ever-flowing stream of success stories

I suggested that there could be any number of ways to do this from a business perspective. I stated that one could easily make the case for a web-based auction system, similar to Google AdWords or perhaps via eBay. Unfortunately, I missed the mark in selling the cause.

MINI wasn’t in an idea buying mood and I clearly hadn’t spent enough time listening to those Zig Ziegler tapes during my ever-so-brief stint in sales, so long ago.

MINI Marketing Manager Trudy Hardy summed up the company’s position. “We are extremely sensitive to the fact that this is a learning phase over the next 12 months from both an engineering perspective and understanding the price/value relationship in the marketplace,” Trudy explained. “It is important for us to understand both of these factors during our pilot program in order to develop sustainability plans for the future.”

So now I’m wondering … do I pitch them on the Celebrity MINI E Racing Series concept? Or should I keep working the i-MiEV angle with Mitsubishi?

The email included a two-page follow up MINI E Application document, along with the request to “Please fill out the answers truthfully, as we approach the final stages of a lengthy application process.”

I gave the local salesperson a call to get the skinny, and he was quite forthcoming.

Apparently, over 13,000 people applied for the one-year MINI E lease. MINI has been winnowing down the applicants and this second application form will be used to enter the final stages for the lucky few. Once the application is submitted, it must pass muster with BMW finance and proof of liability insurance must be provided. At that point, an electrician will come out to check to see if modifications are necessary for the home electrical system to accommodate the MINI E charging box.

We’re in the midst of doing the math to determine the feasibility of the $850 per month yearly lease. If gas was still over $4 per gallon, we’d be in like Flint.

While the Toyota Prius nabbed the best hybrid gas mileage crown for 2009 once again, the field is shifting. With the upcoming release of the Fusion and Milan Hybrids, Ford hybrid gas mileage figures are on the rise. We had the opportunity to take a pre-production version of the Fusion Hybrid for a quick cold weather drive back in December and the car delivered impressive numbers. The Fusion and Milan Hybrids are unique in that they can glide under pure electric power at speeds up to 47 miles per hour. This hits a sweet spot, allowing folks to cruise the surface streets and back roads with a minimum dependence on gasoline.

While the official estimates for the Ford hybrid sedans do not match the Prius, they are significantly better than the direct competition: the Toyota Camry Hybrid and the Nissan Altima Hybrid.

Our results with the Nissan Altima Hybrid’s gas mileage testing fell closest to the official numbers, but that can be attributed to two factors. The Nissan Altima Hybrid was the first hybrid we reviewed and our test unit lacked a sophisticated fuel economy display. When it comes down to it, we hadn’t learned the ropes and had little feedback on which to develop a methodology.

It’s all about getting to know the car you’re driving. The Honda Civic Hybrid and upcoming Honda Insight deliver excellent results, even though they lack the ability to glide in the same manner as the Toyota and new Ford hybrids.

Hybrid SUV gas mileage is a bit of a mixed bag. It was easy to exceed the 2008 Ford Escape Hybrid’s gas mileage ratings. By driving the Escape Hybrid carefully, 40 MPG in town isn’t out of the question. While we haven’t had the opportunity to review the revamped 2009 Ford Escape Hybrid, we expect to beat the numbers handily.

The Saturn Vue Green Line was the first GM hybrid SUV we tested. While we liked the VUE Green Line overall, it’s “mild hybrid” system did well on the highway, but didn’t deliver remarkable in-town benefits. The new Two-Mode Saturn VUE Hybrid is a different animal, with a more powerful gasoline engine and a hybrid system that’s more optimized for better economy at lower speeds. We’re looking forward to testing the second generation in the coming months, along with the Chevy Tahoe Hybrid.

There’s no question that the cost and availability of high-powered battery systems is holding hybrid gas milage back. The equation is fairly simple: the more battery power stuffed into a vehicle, the higher the potential results. The question comes down to economics. While the gas mileage of hybrid vehicles rises with larger battery packs, the cost of the batteries pushes up costs. Until battery production rises and the price drops, the average gas mileage for a hybrid vehicle is unlikely to significantly exceed current levels.

While aftermarket providers – including A123 System’s Hymotion subsidiary – have come up with a number of bolt-on/plug-in hybrid solutions to raise mileage results, the auto manufacturers have been proceeding slowly. One solution might be to offer more powerful battery packs as optional equipment … instead of a larger more powerful gasoline engine, hybrid vehicles might offer increased MPGs as part of an economy option package.

2009 Hybrid Gas Mileage

MPGomatic: Can you tell us a little bit about where Ford is going with full electric vehicles?

Nancy: We have our Escape hybrid in production today. That’s our full hybrid and we’re really proud of it. The most fuel efficient SUV in the planet. We’ve added our Fusion/Milan Hybrid and they will be in the showrooms later this spring. We’re very excited about that. It’s the most fuel efficient 4-door sedan in the market that you can get in North America. That’s just bringing our hybrid technology to the next level. Ford has an electrified background. Many years ago we had a Ford Electric Ranger, but at that time it was lead-acid batteries and the technology of the battery really wasn’t ready for electric vehicles.

With lithium ion, and we have quite a bit of confidence now our supplier partners, we think we’re ready for the next step. We’re moving forward and in 2010 we’re going to have a full-battery electric compact van that is based off of our global C-car platform and that will be available as a battery electric vehicle only.

In 2011, we follow shortly with this (Nancy points to electric car display), which is a demo or an example of a C-sized car that is a full-battery electric vehicle with our goal of a 100 mile range. Think of it like a Focus that can go 100 miles on electric power only, battery recharged overnight.

By 2012 we’re continuing to progress our fantastic hybrid technology. We’re going to further improve that system and bring out plug-in hybrids which you can plug in overnight and get range. They will run as a regular hybrid and you’re not range limited.

I think there’s a market for all of this, and the customers are different.

MPGomatic: So the very first thing will be a small van, the Transit Connect? Is that correct?

Nancy: Well, we haven’t announced the exact vehicle. It’s a Transit Connect-like size. It’s off of the global C-car platform. I keep saying that global platform and some folks will say, “So what?” It’s a big deal because the toughest thing about electrification is affordability. The batteries are very expensive as well as the other components. By using our global platforms which serve millions of customers, that whole base vehicle is getting the benefit, if you will, of that volume and scale. That helps us on the affordability element. Working with partners like Magma which is what we’re doing on our C-car itself; Magna International, the largest component supplier in the world. They have power train, they have electronics, they have instrument clusters, they have sheet metal. They are a great system integrator and they have been a partner with Ford for a long time.

So we’re working with a high-volume, high-quality automotive supplier. This is great because electric components need that quality, reliability, and durability. They are a great partner for us to work with to integrate that into the vehicle, and we want them to be successful selling their components to others, again, helping us to address the cost equation of this.

Working together, leveraging each other’s investment, and then bringing the component as well as systems together on a vehicle that is going to go on a platform used by million, this is pretty exciting. Affordable transportation is what we want. Transportation that is sustainable in every sense of the word: economically, environmentally, and socially. Bringing our supplier partners along with us, investing jointly, and developing that electrified transport solution for the future, well, we think it makes sense to do it collaboratively.

MPGomatic: So it’s a bit of an open source solution in that you’re able to share the technology through the suppliers. They’ll be able to take what they have and let other manufacturers use similar pieces?

Nancy: Yes. We think that’s going to be fundamental to making this affordable technology; for electrification in all aspects. As soon as you start plugging in we have our other partnerships like we have with Southern California Edison and The Electric Power Research Institute. I’m delighted to say we’ve had many other utilities join the Ford Plug-In Project. They’re going to be a partner along the way as well, right? Because as soon as you plug in, the auto industry and the utility industry now connect through a common fuel to a common customer.

We have to figure out how to communicate the billings, all of the interfaces and enable the customer to do this seamlessly so you take away that barrier, the fear factor if you will, or just, “Oh, gosh. It’s different and I don’t want to deal with it.”

We make it as easy as possible so we’re collaborating there, on the infrastructure side, and we’re collaborating here, on components, and we’re doing this with other suppliers as well.

By the way, it’s billions of dollars, billions, to get to the electrified future and I’m including in that investment for domestic battery cell manufacture, the raw materials, and the equipment that assembles those. Then there are the systems, the components, the vehicles that can house these elements and bring them forward to customers, service, all of these things.

There is a lot of transition to make. We recognize we can’t do it alone and we’re trying to find the best partners in the world to work with.

MPGomatic: This is, in large part, about a resurgence in the economy through creating an entirely new industry, or pumping up what’s already there. We don’t have enough battery plants right now. While we will shortly, we must make the commitment to make it happen.

Nancy: The key in every region around the world; in our collaboration with the utilities, between the utilities and the transport section, and I think, rightly so, we’re saying that energy storage, the battery, is revolutionary. It’s a reinvention of some things. It’s revolutionizing a lot of what we do and how we do it. Think about how our own business models interfaced with the customer changes, what customers need to do to change, and all sorts of things.

As we work on that, energy storage manufacturing capability in every region around the world becomes important. Our goal, long-term – and we have a sustainability blueprint – is our plan for our sustainable products, that is really focused on making sure we have the technologies and the elements.

Electrification is a bit part of our sustainability footprint, and going forward you need battery cells made in every region around the world to enable that. That means you have to have the raw material access, you have to have the processing of that raw material, you have to be able to make the equipment that then makes the cells, you then have to have the research and the new chemistries coming in the development of the future of those cells so that you do it, you get better, you do some more, you get better. You have to bring that virtue of the circle.

Then you have to have component manufacturers, OEMs to put them in cars, customers willing to buy and know how to interface.

This is going to be a journey, and our plan is our global C-car which is like the Focus size or Transit Connect van size, and our C/D-cars which are like our Fusion and Milan.

That we will have the capability on those global platforms, and those are the largest vehicle platforms bought in the world, meaning the highest volume in the world. You can have a battery electric, you can have a plug-in hybrid, you can have a regular hybrid, or a very efficient petrol or diesel power-pack. We think making that suite available on global platforms helps on affordability.

MPGomatic: So you start with a roller and you give the owner, or future customer, complete choice in the method of propulsion?

Nancy: Absolutely. Then based on policy, their needs, their driving cycle, they can pick the right vehicle for them.

This week, a Bloomberg article noted:

Bayerische Motoren Werke AG will lease 250 of its new Mini Es in Southern California and 200 in metropolitan New York and New Jersey by March. Applicants, who will pay $850 a month for the zero-emissions car for one year, are outnumbering the models available by 4-to-1, according to the Munich-based carmaker.

2,000, 10,000, or 25,000? Just before the LA Show, Motor Trend remarked:

10,000 people have forwarded their email addresses to BMW, hoping to become customers. BMW expects 25,000 applicants by the time the list closes and BMW chooses its 500 U.S. guinea pigs.

I went through the initial MINI E lease application process back in mid-November … never got a peep back from MINI regarding the status of my application. Not one word … not even a thank you for the application. Did they not like my choice theoretical cross-country co-pilots? Did I fail the test? Perhaps because I participate in too many social media outlets and MINI considered me to be a loose cannon?

I’m more than a little irked, because I was – and still am – willing to put up $850 a month to participate in the experiment. While the company had taken a drubbing in many online forums for the cost of the lease, I had justified the expense and was ready to go forward.

Lets see what we can dig up out in Detroit …