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Electric vehicles are the future

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Our Electric Future
Image from the Andy Grove article in American.com

I wrote a post about Plug-In hybrid vehicles and their potential value to the grid the other day.

Since then I have seen several other articles published from eminent sources which seem to back the thesis that electric vehicles are the way to go.

Andy Grove, former CEO of Intel, in an excellent article called Our Electric Future said:

We live in a world where just about everything—from a hairdryer to the Internet—runs on electricity. A big exception is the transportation sector, critical to the movement of people, production materials, food, and even fuel. Transportation uses more than half of all the petroleum consumed in this country. If we don’t convert a large portion of the transportation sector to electricity, we cannot make real progress toward energy resilience…

Startups like Tesla Motors and Project Better Place have begun to experiment with all-electric cars, and important developments are underway at Nissan and General Motors. But our exposure to the vagaries of oil supply is growing by the month.

We must accelerate conversion to electricity in a major way….

Estimates show that converting these vehicles [SUVs, vans, pickups] to dual-fuel operation, even with electricity providing no more than 50 miles of driving range between daily recharging, could cut petroleum imports by 50 to 60 percent—a stunning opportunity….

A policy that favors sticky energy with multiple sources and that aggressively moves vehicles first toward dual-fuel mode and ultimately to running on just electricity provides the answer.

Then I see the following excellent video of FedEx CEO Fred Smith speaking at the Plug-in Vehicles 2008: What Role for Washington? conference dinner.

In this 36 minute video Fred speaks of, amongst other things, FedEx’s multi-billion $ investments in efficiency, he pooh, pooh’s cap and trade in favour of carbon taxes and at about 26 minutes into the video he promises to issue an RFP for an Electric powered fleet. The FedEx fleet consists of around 80,000 vehicles. An RFP from FedEx for 80,000 electric vehicles would be a fabulous kick start to this nascent industry.

Finally, I see CNet reporting that General Motors is teaming up with utilities to develop a charging infrastructure for electric cars by 2010.

The future of transportation is still pretty much up in the air but one thing is certain and that is that transport based on the internal combustion engine has no future. The best alternatives at the moment seem to be either electric or hydrogen powered vehicles.

Given that hydrogen cars are electric cars with the addition of a fuel cell and hydrogen storage you have to suspect that electric cars will work out cheaper to produce and with the right batteries, just as efficient.

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Shai Agassi To Forge Israeli Electric Car Network

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projbplace.jpg

So ex-SAP executive Shai Agassi’s Project Better Place has managed to pull it off. Former product chief Shai catapulted coolly into DLD in Munich yesterday straight from Jerusalem, where he had launched one of the most curious deals the auto industry has ever seen. He drove out that afternoon. To Davos.

Alongside Israeli Prime Minister Ehud Olmert and Renault / Nissan’s CEO Carlos Ghosn, Agassi announced, a spectacular and audacious agreement on Monday to deploy a new kind of electric power network and set of cars to run on them that will get Israel’s car drivers off oil as quickly as possible. It’s consistent delivery on his October deal, when he raised $200 million from Israeli Corp and VantagePoint Venture Partners.

Shai and I spent thirty minutes talking yesterday in Munich and what I heard proved to be true. On stage, Agassi is a brilliant presenter, dashing, focused, witty and strident. He’s up there with Al Gore in getting you by the throat and implying “talking about this isn’t enough!” and stood shoulders above the impressive line up the crushed and seat-deprived attendees of Burda Media’s DLD event had seen.

Project Better Place will integrate and deploy a new product, sales and support channel (read ‘charging’ stations) that will allow Israeli consumers to drive their own pure electric (not hybrid) car that has a 200km or so range. It will feature a new design of battery that can be swapped in and out in about the time it takes right now to fill up a car with gasoline. People will be able to do so at a country-wide network of swapping stations, or charge cars via power points. The cars will be designed and built by Renault / Nissan. Agassi says it will reduce oil use in Israel drastically – we’re talking figures like 50 per cent here.

The capital to get this going has come from a group of investors that includes Israeli Corporation (which right now supplies Israel with oil – proving, as with Abu Dhabi’s latest moves – that oil money can sometimes turn green) and also features VantagePoint Venture Partners, blessed right now with this shining star to distract everyone from the mess at Tesla. Agassi claims the system will launch within four years.

One of the big features of the system is that electric power will be sold as packages akin to the way that mobile phones are sold today – there will be multiple plans you can buy, including one that says if you buy about six years of power, they’ll throw in the car for free.

Shai Agassi

Photo credit jdlasica

But can he really pull it off? Agassi has got to this situation incredibly quickly. When I ask how in a year he has managed to leave his old job and do one of the most audacious deals imaginable he says “Nine months! It’s been nine months!”

In truth, for any entrepreneurs out there who may suddenly feel deeply inadequate, Agassi has had this process in train for three years. The journey started when he listened to a challenge by a speaker at Davos to do something to make the world a better place. Agassi admits that during those first few years “I walked every single wrong path first. I was sure for months hydrogen, then I was sure it would be ethanol.”

This characteristic of Agassi’s seems crucial to understand. You feel he’s churned the options over in his head constantly and worked out the answer. Now he’s settled on it, his purpose is to set that vision out to the world, do the necessary business deals to make it happen and then…”. Actually, “and then?” is a fairly good question and there isn’t right now a lot of substance to see, beyond the deal itself. Be in no doubt that Project Better Place now needs to ‘execute’, as IT guys would say. They’ll need some very talented people, they’ll need to ensure that Renault / Nissan and other partners such as battery provider NEC deliver technologies, and integrate those technologies together, on time. They will also need to work out the details of the service model and sales and marketing, factors that could make or break the project. And of course if oil prices fall dramatically (admittedly unlikely) the economics become a problem.

So is the man up for it? The company website is today a lonely place, with a link to ‘leadership’ that leads to… just Agassi. There are two people photos. Him and, curiously, his young son, who is part of the Davos pitch. Yet while Agassi himself quipped on stage to the (German) DLD audience that he “used to be the next CEO of SAP”, he never was SAP’s CEO and opinions gathered from my Twittering IT analyst friends vary on just how successful his time at that firm was.

First, here’s Dennis Howlett, veteran technology and financial software analyst:

“Shai created a roadmap and at one stage was delivering a ton of product [at SAP]. “But it became indigestible for many SAPpers.”

Then over to Greenmonk’s own James Governor:

“The Agassi legacy at SAP?…. a job unfinished. He built an architecture, but it was not as widely adopted as he, or the board, wanted.” James’s other comment is curious. “Shai evidently doesn’t have a great deal of patience and is inclined to hector communities (for example, customers) that don’t do what he wants.”

What next? Well Project Better Place has a hell of a lot to do and, once Davos is over, Agassi better get together a brilliant team and start executing. Right now, you hear nothing except him. While the project talks about partnership and being open, it would seem that the big deal has for now taken priority over engaging the talent base required. The firm will need a lot of great people, and those partnerships will take a lot of managing.

What’s sure is that the world is a better place for this development. Amongst the visionaries and future talk underway at DLD, Agassi stood out as a doer.

But don’t for a minute think this is the only future for cars. Agassi’s vision has unlocked anything up to a billion dollars but there is surely more to come and many things are happening right now. Agassi is a visionary but his vision is pretty narrow.

Shai’s in Davos now, wooing the great and mighty with that vision and his audacity. For the next three years he’ll definitely be judged on that ability to ‘execute’. We wish him well.

Read on at Re*Move, where we ask Is Project Better Place the big answer?
Mark Charmer is a contributor to Greenmonk Associates. He is CEO of The Movement Design Bureau, a think tank.

Photo credits: Project Better Place.

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On Small Changes, Small Cars, Tax and Pollution

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It’s fair to say that encouraging people to change their behaviour in small ways can have a big impact – cumulatively – on reducing carbon footprints and environmental impact in the long-term.

But how Governments and authorities manage and cajole the public to change personal behaviour can be a problematic process – and something that’s difficult to get right. One obvious avenue available is to incentivise change by introducing tax-breaks on ‘environmentally friendly’ products and services, and hiking tax on high-polluters. That seems to be the idea behind planned changes to the Congestion charge policy in London, which – rightly or wrongly – from next year, is being turned into an environmental charge based on carbon dioxide emissions from cars.

You can read more about it in detail here, but in short, the plan is that whereas currently nearly everyone pays £8 per day, by 2009, cars which emit more than 225 g/km of CO2 will be charged £25 ($50) a day to drive into central London. Ouch. But the flip side – the ‘tax-break’ – is that if you drive a car that emits less than 120g/km of CO2, then access is free. The idea is to move people from gas-guzzlers to eco-friendly fuel-sippers, and thus see CO2 levels in the city fall. Nothing wrong with that you might think, but there’s a potential flaw…

Sales of these small, ‘sub-120g/km’ cars are soaring across the south-east of England. A new report by CEBR (report not available openly) suggests that this ‘environmentally-driven’ policy could actually end up causing CO2 levels to rise. That’s because it’s predicted the changed system will have a net result of up to 10,000 extra cars a day entering central London. And that can only lead to an increase in congestion, and a slow down in traffic speeds. As anyone who understands the internal combustion process will tell you, the problem with (even highly efficient, and small) engines, is that they’re at their least efficient when the car is sat stationary or moving at low speeds. So despite the fact that most of these additional cars will be classified as ‘environmentally friendly’ and driving around congestion charge-free, the extra traffic and congestion they create could mean CO2 levels actually rise.

Kit like this will unsurprisingly fall into the £25-a-day bracket come next year

You will, doubtless, be surprised to hear that kit like this will cost £25-a-day to drive in central London come next year…

Whether the report’s predictions prove true, only time will tell. One potential caveat to consider is that it was commissioned by Land Rover – who aren’t exactly known for their small cars (in fact, every vehicle they currently sell falls into the £25-a-day category). In the auto-industry, nothing is ever quite as black and white as it first seems… but there’s plenty of support for it’s predictions in the form of academics for instance, who have no reason for bias.

The big questions it begs, is how governments, authorities and legislators drive a process of adoption for new, more environmentally friendly products and technologies, without having the entire process back-fire on them at ground level? The message they’re putting out to people here is ‘do this, and because you’re helping save the planet, we’ll reward you’ – but in fact, that ‘reward’ might end up having quite the opposite effect on the planet’s health. Don’t ‘reward’ people’s for changing their behaviour, and they’ve no reason to change. So the carrot-stick approach is difficult. I suspect this policy might go down in history as being one of those top-down processes, that on paper looked great – but which back-fired terribly on the ground by having precisely the opposite impact to what was originally intended. Another case which will show the need for grass-roots level innovation and adoption, rather than top-down? I think so.

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Toyota as a case study in complexity. Is prius just a greenwash halo?

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Great piece today at movementdesign’s re*move blog about Toyota. It tells us a lot about bright green, and the danger of kneejerk reactions. There are plenty of lessons for any industry there.

Right now there’s a petition going on in the States, calling for Toyota to support a proposed bill requiring ‘CAFE’ fleet average ‘gas mileage’ for cars and small trucks, to rise to 35mpg by 2020.  Toyota is doing its green image absolutely no good by trying to derail this bill, and supporting an alternative, which calls for the average to rise to 32mpg. Could it be that the self-styled green giant Toyota, is not as green as it likes everyone to think it is?

It seems its all about the trucks, with Prius as nothing more than window dressing.

Sadly, like everyone else auto-wise when it comes to the United States market, Toyota is actually rather keen on truck sales – specifically its big Tundra truck – which it recently launched a new version of. While Ford and GM have been taken to the cleaners by greens and press alike over their poor gas mileage, and reliance on selling inefficient trucks and their lack of hybrids, Toyota has sailed merrily on, positioning itself as the big green giant, basking in the halo effect of the Prius.

Joe though avoids knee-jerk conclusions. Its not either, or.

So although this fuel economy episode is unlikely to do Toyota’s green image much good – and although it indeed seems rather hypocritical of them to oppose the tougher gas-mileage bill, I wouldn’t kick Toyota too hard. They are ahead of the game – in terms of alternative power plants, advanced research and future mobility ideas. Just because they oppose the regulations now, doesn’t mean they won’t hit, or even exceed the legislation come 2020.

Toyota is of course undoubtedly a leader in green automotive technology, and green automotive sales, but we have to remember the company’s job is to sell as many vehicles as possible. Until it becomes deeply embarrassing to drive one of those huge trucks in environments where they aren’t absolutely necessary people will keep buying them. Toyota it seems to me is a company we should be encouraging to do better. But then signing the petition is perhaps a way to do just that.

Somehow I can’t see a computer company lobbying to reduce energy consumption targets on servers, but stranger things have happened. Environmental leadership is complex and only going to get more so.