ParisTech Review

After decades on futurists’ drawing boards, the age of the electric vehicle seems near. Most major car manufacturers are promising to introduce electric vehicles within the next year. Many consumers like the idea. Countries from the United Kingdom to China are pushing for adoption, seeing wide-ranging economic and environmental benefits from the exhaust-free vehicles. Some forecasters believe that as many as 86 percent of all new cars sold will be electric by 2030.

But one factor is restraining the rollout. Although electric cars are becoming much more practical, many would-be customers are held back by a lack of certainty around how and where they will charge their batteries—and their anxiety translates into carmakers’ continuing hesitancy to produce new clean cars in large numbers.

“At the moment, it is very much a chicken-and-egg situation as people will only buy the vehicles if they know they can charge, but public infrastructure installation is often waiting on demand from owners first,” says Matthew Noon of the City of Westminster (London), a project manager of Electric Vehicles in Urban Europe, a program funded by URBACT, which is a unit of the European Union’s Regional Development Fund.

Various charging solutions have been proposed, from dedicated stations that look a lot like today’s service stations, complete with pump-like power switches, to plugs in every driveway, like 21st-century hitching posts, or quick-change battery-swapping networks. Also uncertain is the question of who will own all these plugs. Will recharging become a big business in its own right, as petrol stations have been for the past century? Or will it be a largely invisible element, more on the order of recharging your cell phone?

Plug or swap?
One of the key difficulties is that charging takes longer, a lot longer, than pumping gas, roughly four to eight hours, or 30 minutes in a “fast-charging” station. To a world already accustomed to recharging phones and laptops every night, plugging in the car may not be a big deal most of the time, but for people accustomed to five-minute fill-ups, the idea of being stuck for a half hour for every two hours of driving may seem intolerable.

One solution may be to simply set up a system that makes it easy to trade drained batteries for charged. The Israeli startup Better Place is the most visible proponent of creating such battery-swapping networks. Besides dealing with the time issue, the network approach would overcome two other key concerns: range limits and cost.

Although most trips are local, the limit of most current batteries to store more than the energy required to travel 100 miles (160 kilometers) is a major worry for many drivers, particularly in America’s wide open spaces, and Better Place argues that a network of swapping stations could reduce that worry. Nissan-Renault, the French and Japanese co-manufacturers of the all-electric LEAF, and Tesla, the California-based maker of the electric roadster, have both signed on to the concept, designing cars with batteries that can be swapped-out in two minutes from beneath the car, using Better Place’s automated swapping station, a process that looks a bit like popping a gigantic ink jet cartridge into a printer.

A swapping network could encourage sales of the cars in several other ways as well, according to a 2009 report by the Center for Entrepreneurship and Technology at the University of California at Berkeley. Swapping would dramatically lower the sticker price of electric vehicles. Batteries can add $10,000 or more to the cost of a car, and a pay-by-mileage model would make the battery cost part of the operating expense. Swapping out also eliminates concerns about battery durability. Finally, the Berkeley analysts argue that swapping might lower the price of the electricity by consolidating the buying power of all those electric drivers into a single purchase.

Visibility matters
Others argue that the romance of owning an electric car may vie with practical considerations in determining where and how vehicles are charged. Christian Terwiesch, a professor of operations and information management at Wharton School (University of Pennsylvania), argues that consumers interested in an electric car aren’t going to want just somewhat cleaner transportation—they will also want some means to display their environmental commitment.

For that reason, Terwiesch says, visibility of the charging process will be an important part of electric-vehicle ownership, particularly in the beginning, when the new cars are likely to be a status-driven product, as the Toyota Prius hybrid has been over the past few years. “If you have a fuel-efficient water heater in your basement, no one will see it,” he says. “If you have a charging station in your driveway, everyone is going to see it.”

Terwiesch imagines green home-charging stations, such as solar carports, which could help satisfy consumers’ desire to charge their car batteries in a visible, eco-friendly way, and at the same time provide a guaranty that the power they are using to drive their car is 100 percent green.

Who would provide the charging services in public settings? Terwiesch thinks the space is still up for grabs. Least likely to succeed, in his view, are the utility companies. “The utilities have proven over and over to be incompetent at getting consumers the products they need and want,” he says. His nominee for most likely to succeed: the car companies. “It’s certainly true that none of them [the utilities] has been able to create an emotional attachment to their consumers, whereas I know a whole bunch of people who have an emotional attachment to their car.” Oil companies, too, he says, aren’t likely to capture this opportunity.

As with most consumer products, he says, the winning home-charging solution will be the one that provides the best experience and a pleasing design. “You could have a Herman Miller enter that space,” Terwiesch says. “Someone who is design-savvy, and resonates well with wealthy, educated, rich people.” Even a Patagonia might be able to do it.

Brave clean world
The creation of the new electric-car infrastructure is likely to have an outsize economic impact. Although economists generally agree that technical advances make society wealthier in the long run, a widespread rollout of electric vehicles could lead to some major macroeconomic dislocations.

If charging is largely done at home or in office parking lots, many service station attendants – 843,000 in the United States, according to the Bureau of Labor Statistics (BLS) – might find themselves looking for another line of work. (Upstream, the impact of vehicle electrification is likely to be less dramatic, first, because most energy forecasters argue that natural gas and possibly coal are likely to remain important sources of power generation, and second, because not that many people work for oil and gas companies. These companies are extremely valuable – of the 10 most valuable public companies in the world, five are in oil and gas – but they are not huge employers. In the United States, for instance, oil and gas drilling accounts for roughly 63,000 jobs. Exxon, the most valuable oil and gas company in the world, employs only 83,000 people.)

Electric vehicles may be disruptive in other ways as well. The fact that electric engines are two orders of magnitude simpler than internal combustion engines is probably bad news for anyone in the car repair business (750,000-plus automotive mechanics and service technicians in the United States alone, according to the Bureau of Labor Statistics).

“The motor of an electric car only contains a couple of moving parts,” notes an article in Cars Direct, “the rotor which spins inside the electric motor and the bearings that support it. This is simple compared to a conventional internal combustion engine, which has hundreds of moving parts, like pistons, connecting rods, crankshafts, valve springs and valves. Electric motors are virtually maintenance-free in comparison.”

In an electric world, air filters, oil filters, radiators, belts and pulleys, and mufflers will all go the way of the horseshoe. Even brakes reportedly wear out less quickly, because the engine itself can be used to reduce the speed.

Nor will simpler cars necessarily be good for people who build cars, including many of the 877,000-plus workers who manufacture cars in the United States, specifically, the 62 percent who make automotive parts, according to BLS figures.

But for everyone else, electric transport is likely to yield substantial advantages. At present, 70 percent of the oil used in the United States is burned as gasoline. Reducing the demand would reduce a major source of domestic economic weakness. The U.S. Census Bureau, for example, estimates that roughly 60 percent of the country’s trade deficit comes from imported oil. In 2008, Europeans spent roughly $200 billion on imported oil – more than the value of the entire European automobile industry.

At an individual level, too, the advantage is likely to be with electrics, as electric engines have more than three times the energy efficiency as conventional gasoline-powered engines (70 percent compared with 20 percent). In the United States, per-mile charges may be as low as 4 cents for the electric compared with 18 cents for a conventional car that gets 22 miles per gallon when gas prices are running $3.50 per gallon, according to U.S. Department of Energy figures.

As its technology aligns with the needs of the moment, the electric car may now be at its long-awaited tipping point. Just as the spread of the Internet and mobile phones happened much more quickly than anyone thought possible, so, too, might adoption of the electric car.

Already in Oslo, Norway, Noon notes, electrics are the biggest-selling small cars. “Most manufacturers have long waiting lists, so it wouldn’t surprise me if the adoption did happen quicker,” he says, “but only if the manufacturers can meet demand.

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