The introduction of the Chevy Volt and other electric vehicles will require a vast ecosystem of entrepreneurial businesses.
At ground level, electric cars like GM's Chevrolet Volt -- due to be launched in November 2010 -- are pretty much everything the U.S. economy is banking on. The cars promise innovative engineering and a resurgence of the American auto industry. They mean an America that is manufacturing things rather than just bundling financial instruments. Cosmically, electric cars mean green technologies that will migrate to China, India, and Brazil, where they will allow for Western styles of personal freedom yet not threaten to overheat the earth.
And you don't have to be George Clooney to want one. Electric cars may be vaguely cool, but GM executives are counting on drivers with nothing more than a householder's logic, something like the good sense to refinance a mortgage when the 30-year-fixed drops more than 2 percent. Jon Lauckner, GM's vice president of global product planning, tells me that his team set out to trump gas-powered cars as a matter of straightforward economics, especially as economic recovery pushes the price of gas back over $3 a gallon. "At that level," Lauckner says, "the cost of running a Volt in full electric mode will be about one-sixth that of a gas-driven car of the same size, 2 or 3 cents a mile rather than 12 to 15 cents a mile. We figured that, for most people, this means a savings of about $1,500 a year." Sticker prices will be high; the suggested price of the Volt will be about $40,000. But federal tax rebates are anticipated to be as much as $7,500, not to mention various state incentives. So the actual price will probably be closer to $30,000 -- not a bad deal, given that borrowing costs will be low for some time.
When he speaks of "full electric mode," Lauckner is acknowledging another barrier he expects the Volt to take down, namely range anxiety, the fear of getting stuck with rundown batteries while driving in a snowstorm, bumper to bumper, on a 150-mile trip to the in-laws'. The Volt will come equipped with a small gas engine, unlike its forthcoming competitors: the smaller Nissan Leaf, BMW's plug-in Mini Cooper E, and Ford's electric Focus. This engine will not drive the wheels, as with the hybrids now on the market (actually, GM likes to call the Volt an "extended range electric car," not a hybrid), but will act as a dynamo to supply the electricity for the car after 40 miles of running on stored power. The Volt's designers assumed, per Department of Transportation data, that nearly 80 percent of Americans drive 20 miles or less to work. This is why GM was able to make the technically true but sly announcement that the Volt earned a 230-mpg rating for city driving from the EPA. "Most drivers will hardly ever use this engine," says Tony Posawatz, the Volt's line director. "We may have to educate people to change their oil because it hasn't been used for a year! Anyway, when the range-extending engine kicks in, drivers can go up to 300 miles, like a conventional car. In a pinch, they can make use of the existing gas-station infrastructure."
And so, assuming these cars prove safe and reliable, American consumers will almost certainly consume them. U.S. auto companies will make them, and that's good for the planet, right? Yes, but.
NO ONE SAID IT WAS GOING TO BE EASY
The first obvious question to ask -- and because we all now own a piece of GM, we may be forgiven for asking it -- is whether the American car industry will really be able to compete in the manufacture of electric cars. Or any steel bending, for that matter. After all, the industry became uncompetitive at making conventional cars. GM lost $82 billion during the past four years. Emergent Chinese auto companies intend to be producing 500,000 hybrid or all-electric cars and buses by the end of 2011, by which time Japan and South Korea together will be producing about 1.1 million. America will be making a quarter of that number. In the past 30 years, GM's domestic market share has dropped from around 50 percent to less than 20 percent. What has changed to make us optimistic about American car companies?
Another thing: Are these cars really green? Let's assume that, 10 years from now, 250,000 electric cars will glide home every evening in, say, the Raleigh-Durham Triangle, and plug in. If Duke Energy did nothing from now till then to prepare, brownouts would be unavoidable, especially in the summer, when the air conditioners would be working hard. If Duke met the challenge in purely conventional ways, by burning more coal and gas, it would just be shifting the carbon footprint of drivers from vehicles to other, more concentrated generators. One recent analysis, by the Oak Ridge National Laboratory, assumed a scenario in which 25 percent of householders drove electric cars and plugged in at 5 p.m. Up to 160 large power plants would be needed nationwide to supply the added electricity. Ed Kjaer, director of the electric transportation advancement program at Southern California Edison, warns that electric vehicles, each equal in demand to about a third of a house, would particularly tax distribution transformers at the local level. (Each transformer handles the load for about 10 average-size homes.) "The worst imaginable situation you could have is your neighbor yelling at you because you blacked out the neighborhood," Kjaer told Scientific American.
Big power companies like Duke Energy and Southern California Edison are hardly complacent in the face of this danger. But Mike Rowand, Duke Energy's director of advanced customer technology, admits his company's answer is a work in progress. If every American home had a Volt, he says, total power usage in the country would increase only about 10 percent. But what's crucial is load distribution: where and in what order the cars' battery packs are recharged -- and from just where the power is taken. The maximum environmental benefits of these cars are realized only when they are charged with power taken during off-peak hours and from renewable sources -- for example, in the wee hours of the morning from hydroelectric plants in Quebec or the Tennessee Valley.
Cars can be made smart enough for this. Even first-generation electric vehicles will have the capacity to tell the grid to fill their batteries immediately or, say, after midnight; eventually, they will be able to sync to your schedule -- stay at home tonight, PTA meeting tomorrow. The question is, Can the power grid become smart enough in turn to syndicate demand from millions of electric cars and then transmit power back down to individual vehicles from available renewable sources? America has more than 3,200 electric utilities, relatively few of them with the resources of Duke.
