Founder Elon Musk (of Paypal fortune; SpaceX rocket fame) is now leading the company replacing CEO Ze’ev Drori. In the company’s blog Musk reports the anticipated closing of its Rochester Hills office near Detroit, and new growth focus on its Roadster sports car and sales of its powertrain.
Only a month ago the company brought joy to the California Cleantech community by announcing plans to build a $250 million facility to manufacture a zero-emission lithium ion powered sedan in the heart of Silicon Valley. Now this Model S version of Tesla’s electric car might be delayed until 2011 depending on a number of conditions.
The change in leadership is related more to ‘extraordinary times’ rather than the core vision of Tesla’s business plan. The electric vehicle market is just getting started and Tesla could certainly emerge as a specialty vehicle maker or powertrain designer.
In recent days, we have highlighted the steady stream of media commitments of production vehicles (2009-2011) from automakers GM, Nissan, Tata Motors-, BYD, and Chevrolet
Electric infrastructure investments are also not likely to slow down unless automakers divert from recent plans. In recent weeks electric vehicle infrastructure startups like Better Project have had their business efforts validated by Warren Buffet’s $233 million investment in Chinese battery maker BYD, and $500 million plan to extend France’s grid to vehicles by utility giant EDF
The future of electric vehicles based on a combination of batteries, hydrogen fuel cells and capacitors should not be completely derailed by an economic slowdown. So despite the bumps ahead, we expected Tesla to stay on its course.
Has China developed the ultimate vehicle? A cheap, solar powered car? Not quite.
While the ‘solar car’ concept makes a great viral story for web readers, it is not a revolution for the auto industry. Powering electric cars takes a lot more than putting solar panels on the roof. We need viable infrastructure and tremendous amounts of stored energy density to make a real transition into electric vehicles.
The vehicle was demonstrated at the 29th Zhejiang International Bicycles and Electric-powered Cars Exhibition. The solar panels are simply placed on the roof and not integrated into the vehicle’s body. And it reportedly takes 30 hours of direct sunlight to charge the batteries that will drive up to 90 miles.
Electric Vehicles need Energy density
The good news is that electric vehicles are coming. We have highlighted recent electric vehicle commitments of production vehicles (2009-2011) from automakers GM, Nissan, Tata Motors-, BYD, and Chevrolet.
So why is this solar powered cars more a gimmick, than a revolution?
Electric vehicle infrastructure start up Better Place continues to grab headlines with projects in Israel, Denmark and Hawaii. Now the company announced plans to build out infrastructure in Australia.
Infrastructure for Electricity & Hydrogen
Electric cars are coming but we will need to develop new infrastructure and business models that go beyond today’s notions of corner gas stations delivering liquid fuels to combustion engines.
Electric cars are likely to be powered by a combination of batteries, hydrogen fuel cells and capacitors. Not one energy storage device is expected to rule them all. And while the short-term strategy of extending the world’s electricity grid to vehicles seems logical, in a few years we might turn to the chemical storage of electricity via hydrogen to overcome cost and performance challenges of electron storage in batteries.
Electrification in Australia
Startup Better Place has announced agreements with AGL Energy and financial advisor Macquarie Capital Group to raise $1 billion (AUD) and begin deploying an electric vehicle (EV) network powered by renewable energy.
Australia has the world’s seventh highest per capita rate of car ownership, the country has nearly 15 million cars on the road after adding over a million new cars last year.
Victorian Premier John Brumby said, “The Victorian Government supports any initiative that will have positive outcomes in reducing emissions in the transport sector and welcomes this innovative approach to help make broad adoption of EVs in Australia possible.”
Has the airline industry committed itself to the long-term transition towards bio-derived fuels with the hope of better performing biofuels that cost less than traditional hydrocarbons?
Roadmap to Future – Jet makers & Fuel designers
Although the global economic slowdown has given the airline industry a temporary reprieve from recent high energy prices, leaders have not taken their eye off the long term goal of diversifying its fuel feedstocks beyond traditional hydrocarbons. But there are still skeptics that bio-derived fuels (like biobutanol) can compete with traditional petroleum based fuels.
In September next generation biofuels startup Solazyme developed the world’s first algae-derived aviation fuel as characterized by fuel analytics lab Southwest Research Institute (SwRI). Now the Guardian (UK) is reporting on Boeing’s efforts to create next generation biofuels that could help resolve the industry’s carbon emissions liabilities, and give the aviation sector a more stable source of fuel.
Virgin Atlantic’s Richard Branson was the first to push for next generation fuels for the airline industry but his vision was met with skepticism for pundits. Boeing’s focus follows other alternative fuel initiatives by Air New Zealand (Jatropha), Japan Airlines, KLM (algae), Continental, Virgin Atlantic Airways which claims the first biofuel flight by a major airline carrier. Suddenly algae based biofuels and the promise of ‘designer’ biofuels seem more plausible than they did a few years ago.
Watching Jet & Fuel makers
Of course, nothing will happen until jet makers get involved and biofuel makers figure out a way to design fuels suitable for small aircraft and then jet engines. Several months ago Honeywell’s UOP LLCannounced plans to accelerate development of legitimate biofuel substitutes. And both GE Aviation and Pratt & Whitney are working on advanced aviation fuels.
Many industry analysts are looking at partnerships with bioenergy startups. Dutch algae biofuels company AlgaeLink is working KLM airlines on a pilot project to develop alternative aviation fuels. Air New Zealand is testing non-food crop Jatropha-based biofuels. But the most widely cited startups capable of changing the biofuels market include Solazyme, LS9 and Amyris and Synthetic Genomics might be the key to the airline industry’s longer term vision of more stable feedstock for fuels.
Yesterday, Canada’s Electrovayaannounced the signing of three Memorandum of Understanding MOU’s with Chinese manufacturers of electric cars, trucks and manufacturing equipment including Chana International Corp. which has joint ventures with both Ford and Mazda. Electrovaya’s announcement comes less than a month after signing a strategic partnership with India’s TATA Motors to sell cars in Europe in 2009.
Where is Detroit?
Detroit’s Big Three (GM, Ford & Chrysler) are distracted by short-term challenges. Their ‘legacy costs’ associated with building cars around the combustion engine could keep it from leapfrogging into a new era of vehicle manufacturing and design based on electric motors.
Global automakers figure out that the revolution is how you build cars, not how you fuel them that matters. (Oil is not the problem, the problem is the combustion engine.) The key to building low cost high performance electric cars revolves around energy storage systems. If it is cheaper to build energy storage systems in China than Ohio and Michigan, than the Rust Belt might struggle to grow cleantech jobs.
Electric car industry is going global, quickly!
Now that the US election is over, the tone of conversations could change significantly to reflect more pragmatic policies. One policy vision that could be destroyed is the notion of ‘energy independence’ via electric cars. This rhetoric could fade quickly as it becomes more clear that both the auto and energy industries are very global, and will likely continue to become more globally integrated in the post-combustion era.
Energy Storage key to Accelerating Change
The key to electrifying the world’s transportation fleet is to advance and integrate energy storage systems around batteries, hydrogen fuel cells and capacitors.
Detroit’s future might depend on how the value chain unfolds around global energy storage systems. If Asia appears to be the lowest cost manufacturing hub for energy storage systems it could reinvent the world’s auto industry.
This [30 minute] interview reflects a very different way of thinking about the future based on the potent combination of new technology platforms and disruptive business models.
The simplest translation of Shai Agassi’s disruptive vision
We should buy the car, but not the battery or fuel cell. Remove the cost and risk of owning energy storage systems out of the consumer equation. Instead consumers would subscribe to an energy infrastructure provider and ‘pay per mile’ (e.g. mobile phone minutes plan). They could refill at a local electric recharge station, or pull up to a station to ‘swap out’ an old battery (or depleted solid block of hydrogen) for a new container. Agassi believes this new business model could lower the barriers that prevent us from leaping beyond the era of the combustion engine.
How do we do it? Big bets, major infrastructure investments and new business models.
Just a short post to clear up a common mistake made by the media on the future of electric cars:
We do not have to choose between ‘electric’ versus ‘hydrogen’ cars. Hydrogen fuel cell vehicles are electric vehicles. The only alternative to the combustion engine is an electric motor. The question is – what should power that electric motor? Batteries or fuel cells? Why not both?
Good News: Electric vehicles are coming!
The good news is that stories on electric vehicles are popping up all over the web. Bloggers and mainstream media outlets are covering announcements for production volumes of electric vehicles that are coming from every corner of the world. Sooner or later a leader will step up a confirm our plans to kill the combustion engine-’.
Bad news: People confuse electric motors for energy storage devices
The bad news is that while trying to describe ‘the future’ most bloggers and journalist fall back on merely describing a snapshot view of today. Then they extrapolate it forward assuming the past will dictate the future. They see battery powered electric cars and assume this is the future.
Cars are not iPods, and batteries alone cannot carry the auto industry forward. While there is no doubt that the first generation of electric vehicles are going to be built around advanced lithium ion batteries, next generation electric vehicles (circa 2015-2025) are likely to integrate three different energy storage systems- batteries, hydrogen fuel cells and capacitors.
So while bloggers and journalists often describe uncertainty about the direction of the auto industry by asking: Is the future car powered by a battery or fuel cell? – the answer is both.
Hydrogen stored as a solid, then converted in a fuel cell produces electricity.
Hydrogen fuel cell cars are electric vehicles.
A ‘hydrogen economy’ is an economy driven by electricity. H2 is just the chemical storage system.
Earlier we made a bold forescast that an old industry giant, Johnson Controls, could become one of the most relevant (and greenest) companies in the 'new energy economy' as it delivers energy management solutions, and enables the transition to electric vehicles powered by batteries, fuel cells and capacitors.
Now we're adding DuPont to that list of companies to watch in the new energy economy.
A New Vision for American Competitiveness? Speaking to an attentive crowd at the Detroit Economic Club, DuPont Chairman and CEO
Charles Holliday, Jr. described a 'unique time for transformation' and called on the United States to improve its global competitiveness via sustainability.
"As industries shift to address the new reality, innovative, science-based products that provide the solutions must lead the way. Speed, agility and transformative science are needed today as never before. Success during this time is ultimately going to come down to two very key concepts: sustainability and competitiveness. Without sustainability, it will be hard for a business to remain competitive in the new reality."
The Detroit Project Holliday also supported the proposal for the 'Detroit Project', a 'Manhattan Project' style effort to develop a new, energy-efficient vehicle that could achieve 75 miles per gallon. The U.S. Council on Competitiveness has proposed funding for the program to come from a U.S. savings bonds program to stimulate U.S. personal savings and provide financing for U.S. infrastructure investments like the Detroit Project.
Why DuPont?Does the Auto Industry need help from the World of Science?
What went wrong? Everyone has their own reasons for why automakers are failing: Labor costs, oil, management, credit markets, et al. All have valid points. And, obviously there are multiple problems, not one issue.
But I have a very different theory and set of presriptions.
The problem isn't oil, it's the combustion engine and its legacy liabilties of intensive manufacturing, limited design and obsession with 'new car' sales paradigm.
Our great opportunity? The problem is based on how we build and sell cars, not how we fuel them. So let's focus on the platform of a post-combustion engine era of mobility.
How do we get there? You cannot summon the future on demand with band-aid solutions, you must enable it and wait for it to change.
Our priority should be to enable a multi-decade long transition that changes how cars are bought, sold, driven and upgraded.
21st Century Vehicles: Focus on Wheel-based Electric Motors, Energy Storage and Software...
American Industrial leaders might be ready to reinvest in the country's industrial capacity to innovate and manufacture components needed to reinvent the energy and auto industries.
The keys to electric vehicles are electric motors, energy storage systems (batteries, fuel cells and capacitors) and drive by wire systems.
The US has now formed a new coalition to pursue the biggest prize: Energy Storage!
Pride or Profits? US playing catch up with Asian What if electric cars didn't bring America and Europe 'energy independence'? The public relations failure of trading 'foreign oil for foreign batteries', has motivated US business leaders to form a coalition to seek federal funding for securing a domestic battery industry.
The Chicago-baesd National Alliance for Advanced Transportation Battery Cell Manufacture will include 14 companies and the US DOE's Argonne National Laboratory. 'The Alliance' will be modeled around Sematech which helped the U.S. semiconductor indutsry play catch up to Asian manufacturers in the late 1980s
The founding members of the Alliance include 3M, Johnson Controls, ActaCell, All Cell Technologies, Altair Nanotechnologies, Dontech Global, EaglePicher Corporation, EnerSys, Envia Systems, FMC, MicroSun Technologies, Mobius Power, SiLyte, Superior Graphite, and Townsend Advanced Energy.
Short term vs Long view of 'Electric' We have been writing for several months about the globalization of electric vehicle industry, and Asia's early lead in the first energy storage device lithium ion batteries.
We have also suggest that the 'car is not an iPod', and that 'pluggin in' battery systems are not the default future of electric vehicles. It is not certain that batteries can solve the energy storage problem.
Ask a lawyer or engineer if there is something wrong with this plug in picture!
Instead, next generation vehicles will integrate batteries, hydrogen fuel cells, and capacitors. But industry leaders, politicians and the public seem only ready to take one step at a time, and for now talk is focused on first generation storage of batteries. So we will crawl instead of leap into the future.
The US Fuel Cell Council is now lobbying Congress for more than a billion dollar investment to accelerate America's manufacturing position around this important piece of the future energy sector.
Energy Storage - Sprint vs Marthon Even though Asia appears to have won the sprint towards next generation 'batteries', the US could regain its position in energy storage and conversion around the marathon race towards fuel cells.
Fuel cells convert chemical energy (e.g. hydrogen, methanol, natural gas) into electricity. They can be used for stationary power to reinforce the electrical grid with onsite generation, or to power portable devices and electric vehicles.
Fuel cells are not Dead, just Misunderstood There is a tremendous amount of uncertainty and skepticism towards fuel cells among eco and energy bloggers. The technology fell victim to the 'Hype Cycle' after the Dotcom Bust in 2000, but the energy conversion platform has been making steady progress in recent years. Their long term advantages in terms of cost per kilowatt, performance durability, scalable modular manufacturing are still complelling reasons to support fuel cells as alternatives to batteries and combustion engines.
USFCC's Recommendations: Now, the USFCC believes the invesment could create an estimated 24,000 jobs and is recommending funds for: Deploying Fuel Cells ($100 Million), Supporting a Fueling Infrastructure ($65 million), improving Federal Fuel Cell Investment Tax Incentives, expanding applied Learning Demonstrations ($375 Million) building foundation for American Manufacturing Capacity ($100 Million), accelerating Research in Partnership with Industry ($350 Million), investing in Fuel Cell Transit ($180 Million) and including Fuel Cells in President-Elect Obama‘s Energy Initiative.