The Outlook for Plugging-in: US Automakers Meeting the Challenge of Electrification by Dave McNamara, MTS LLC
The US auto industry has been vilified over the years for not adopting electrification, especially Plug-in EV (PHEV) technology. The negative example of the GM EV1 is the poster child of half-hearted attempts to electrify the US fleet.
You must see the “documentary”, Who Killed the Electric Vehicle that depicts the birth and death of the first GM electric car of the late 1990s. Today, we agree electrification is a global and US security imperative to eliminate dependence on fossil fuels.
“All auto companies will need to offer EV alternatives to participate in world markets,” according to Nancy Gioia, Director, Global Electrification, Ford Motor Company making this important point at the Business of Plugging-in conference held October 10th through 14th, 2011 in Dearborn, Michigan.
My attendance the Center for Automotive Center’s (www.cargroup.org) The Business of Plugging-in Conference (www.bpiconference.com) reminds me of the early days of automotive connectivity or Telematics (e.g. OnStar).
Like the early days (1995 to 2005) of auto connectivity there is much hope, but no viable business plan. As Brett Smith, Manufacturing, Engineering & Technology Group and Assistant Research Director the conference organizer stated about PHEVs, “a great (promising) technology, but not ready for prime time largely because of the battery cost and storage issues.”
The biggest issue we face is consumer acceptance of the new EVs on the road, namely the GM Volt and Nissan leaf. Both are cars for the masses with MSRVPs of $40,280 and $35, 200 respectively (www.edmunds.com).
The automotive engineers have done their job, produced a compelling and reliable EV products.
Fortunately, we haven’t seen a recall of these new technology cars to bring back memories of the haunting experience of the GM EV1, that is the literal tearing out of the hands of loyal customers (see the movie!).
Now is the time for the consumers to show acceptance, the utilities to provide chargers and governments to provide stable incentives. The others must now arise to the occasion, because in my opinion the auto industry has!
About 375 industry leaders attended the BPI conference, a cross section of the auto industry and infrastructure (e.g. utilities and charging station equipment manufacturers).
The speakers and panelists provided expansive and clear thinking as to how to meet the challenges of electrification with a focus on the business approaches for available and affordable PHEVs.
This excellent conference used workshop format with a number of panels with the benefit of allowing the experts to speak and to interact with questions from the attendees.
The conference benefited from the extensive industry research and insider network of the Center of Automotive Research (www.cargroup.org). An exhibit area with the key infrastructure players (Utilities – DTE and Consumer Power and Charging Stations from Eaton, Coulomb Technologies and SPX to name a few).
The expansive parking lot of the Hyatt Regency Dearborn was well used for ride and drives of the GM Volt, Ford Transit, Mercedes AMD and Tesla Roadster. After experiencing the smooth and jet like acceleration of these vehicles (no harsh “engine NVH”), I am convinced that the auto industry engineers have delivered a road worthy product.
The quietness and acceleration capabilities will surprise and delight drivers. Bottom-line we need more of these vehicles on the road to gain consumer feedback even though it is a long way off that the economics of purchase make sense.
Today, PHEVs are a purchase decision for the technology enthusiast or electrification loyalist. Note: PHEV penetration is projected at about 1% of US Fleet in 2020.
As one journalist mentioned at the conference wrap up session, “I love the GM Volt, but I would still buy a Chevy Cruze first”, implying the affordability and payback will be problematic for years to come.
Ford of all the manufacturers articulated the best strategy, that is a focus on building hybrids as the means to get the vehicle platforms ready for mass electrification with a viable business plan. Business viability is selling a critical mass of cars, create the ecosystem (e.g. suppliers) and all make money.
We can expect about 10% of the US fleet in 2020 to be hybrids. With hybrid technology there is no dependence on utilities building grid capability and charging stations (today, an additional $2000 to equip your house).
Our auto industry (especially GM) has come a long way from the days of the GM EV1 of 1999, when GM “reclaimed” them after the lease was not renewed, because they weren’t “reliable”.
The US auto industry, today is ready for electrification of the fleet, when batteries become affordable and charging stations are available. Drive a GM Volt or a Nissan Leaf and you will be convinced of this fact.