Electric car makers driving the change

A prototype of Renault's first electric vehicle — the leading edge, it claims, of zero-emission driving — arrived in Britain in October in decidedly unprepossessing form. The French manufacturer is planning to launch four battery-powered vehicles by 2012, including a saloon car, a compact hatchback and a quirky two-seater.

For its UK electric premiere, however, Renault rolled out an electric version of the unsexiest of the four: its Kangoo van.

Renault's choice of the plug-in Kangoo as the vehicle to show to journalists, fleet managers and UK policymakers did have its logic. Renault was making its pitch to companies, including British Gas, British Airways and British Telecom, who need to meet tough commitments to bring their fleets' emissions down.

While serious questions remain over mass-market consumers' sustained interest in electric cars, corporate customers seeking to cut their carbon footprint or buff their green credentials are likeliest to be among plug-in cars' early adopters.

"They've got a vested interest in this, and we will be the first to market with a range of vehicles," said Jeremy Townsend, a UK press relations manager for the French car maker.

Corporate clients

Electric vehicles lend themselves to company fleets because they tend to be used for short runs on predictable routes. Corporate buyers are generally more receptive to arguments about the cars' lower running costs than individual buyers. Companies can concentrate recharging infrastructure for the cars — a leading constraint to electric driving — at central locations in their depots or garages.

Renault and its Japanese partner Nissan are the prime movers in developing electric cars. In August, Nissan unveiled its first electric car, the Leaf, due to launch in 2010. In September, Renault followed with its four planned models — the broadest all-electric line-up yet announced by any car maker — and a catchy new corporate slogan: Drive the Change.

For all the buzz around electric cars, there are still very few on the road. Silicon Valley-based Tesla Motors has been a pioneer with its eye-catching battery-powered roadster, and it recently opened its first overseas showroom in London. India's Reva makes London's best-known electric vehicle, the G-Wiz, although it is classified as a quadricycle, not a car.

New developments

Electric vehicles are now due to launch in numbers because of advances in lithium-ion batteries and the related systems needed to make them work in cars. Over the next few years manufacturers from Daimler and Audi to Ford, General Motors and Toyota plan to launch electric cars.

Investors' bullishness about the technology's future in China recently helped to propel Wang Chuanfu, founder and chairman of battery producer and car maker BYD, to the top of the list of the country's richest men, after Berkshire Hathaway, the vehicle of Warren Buffett, the legendary US investor, bought 10 per cent of the company.

Plug-in vehicles were a big theme at September's Frankfurt auto show, the global industry's biggest trade event. >

Yet while electric cars grab the headlines, car makers are making big strides in cutting their vehicles' carbon dioxide emissions, mostly by other means, from development of more efficient and smaller engines to "microhybrid" or start-stop technology that stops cars' engines at junctions.

Toyota plans to launch an electric city car by 2012, but is sceptical about pure electric cars because of their limited driving range, and thinks that more consumers will buy hybrid petrol-electric cars such as its top-selling Prius.

Power from batteries

While car makers are pursuing different strategies, the big picture is that cars in years to come — whether zero-emission models such as Renault's, or hybrids with recourse to a combustion engine such as Toyota's — will get more and more of their power from batteries.

The regulatory pressures driving electrification have also intensified during the recession. Governments around the world have tied billions of dollars in stimulus funds for the sector — whether emergency loans or "cash-for-bangers" scrappage schemes — to automakers' investments in greener vehicles, or consumers' purchase of them.

Britain's government has announced incentives >worth £250 million (Dh1,534 million) for electric cars, from 2011. The money will support subsidies of £2,000 to £5,000 to help lure early adopters into the cars,as well as funds to develop a recharging infrastructure.

According to Renault, 13 European countries have fiscal incentives in place that will promote electric vehicles, as do a number of US states, including Hawaii and Tennessee.

The UK has also held talks with Nissan and GM on producing electric cars at their British plants. Loans and grants from the UK government induced Nissan to choose a site near its plant in Sunderland, north-east England, to build a £200m car-battery factory.

In the US, Tesla and Fisker Automotive, which is also producing a plug-in sports car, recently received about $1 billion (Dh3.67 billion) between them in loans from the Department of Energy to help finance their investments.

Washington has also pledged $2 billion of stimulus money for advanced battery manufacturing in the US. "The White House is incredibly bullish on electric drive," says Charles Gassenheimer, Chief Executive, Ener1, a US-based lithium-ion battery company.

Need for a push

Battery-powered cars, by all accounts, need an ample push from policymakers if they are to have any hope of mass adoption.

While governments and car makers such as Renault/Nissan like the big idea of zero-emissions driving, car buyers have historically been reluctant to spend a penny more on cars that purport to save the planet. Sales of Toyota's Prius have slumped during the downturn. The availability of infrastructure for topping up batteries — and a means of charging for using it — is another key constraint. Utility companies are beginning to invest, albeit on a pilot basis. EDF is working on projects with Renault and Toyota and RWE with Daimler.

Renault plans to remove the cost premium attached to electric cars by using "quick-drop" technology that allows flat batteries to be replaced with ready charged ones. The company will lease them to consumers — bringing down the price of its plug-in cars to those of comparable diesel models.

The technology should also remove some of the uncertainty surrounding the first generation of lithium-ion car batteries, which will typically have shorter life cycles than the vehicles in which they are used.

Townsend says Renault believes that batteries will have a life of about seven years in the vehicle, and another five years used for other purposes, such as storing energy gathered from solar panels.

Renault and Nissan will be rolling out the business model nationwide in Israel and Denmark from about 2011, together with Better Place, a Palo Alto, California-based start-up that likens itself to early providers of mobile phone infrastructure.

However, some are sceptical about whether battery-swapping can be made to work. Contestants in the race to build viable electric cars differ as to their technology and strategy, but are uniform in saying that the winners and losers are still to be decided.

"This is a marathon race, and we've only just finished the first model," says Gassenheimer.