Electric Vehicles Speed Ahead

Electric vehicles (EVs) are generating a lot of buzz lately. At this week's Bloomberg New Energy Finance Summit, influential characters repeatedly spoke of the EV revolution with gleeful enthusiasm. Meanwhile, the Shanghai Motor Show is opening up the throttle right this minute, and EVs have a lot to do with it. This is a glittery bandwagon, folks. Jump on?

Who likes EVs and why?
Michael Liebreich, Chief Executive of Bloomberg New Energy Finance, or BNEF, told me that he sees a real opportunity for EVs as we transition to the energy system of the 21st century. David Crane, CEO of NRG Energy, sees EVs as an integral part of the electricity distribution system of the future. Bill Richardson, former U.S. Energy Secretary, declared that EVs are "booming." Rick Geiger, executive director of utilities and smart grid at Cisco Systems, described the electric vehicle battery as the poster child for distributed energy resources. And Daniel Poneman, Acting U.S. Energy Secretary, described EVs as a critical element of electric grid modernization. Phew! That's a whole lotta love.

Here's the critical point: We cannot assess EVs in a vacuum. Honestly, we cannot assess anything in a vacuum, but certainly not anything to do with energy. As our society as a whole deals more directly with the massive challenges before it -- climate change, population growth, water scarcity -- we necessarily embark on a new energy paradigm that lightens our carbon output and improves our resilience to natural disasters. The only way to view the EV is as a part of this complex web. It's about mobility, yes, but it's more about energy.

This is the reason David Crane described EVs and solar -- together -- as catalysts for sustainable developments in grid architecture. Rooftop solar and EVs are both especially centered on the home. The former generates extra energy during peak demand; the latter stores it during off-peak times. They are complementary in managing the stressors on our modern grid.

Who's got nitrous in the tank?
There have been several announcements this week in the EV space. At the BNEF Summit, General Motors (NYSE: GM  ) announced that its Chevrolet Spark EV is setting a new benchmark for efficiency with an EPA-estimated 119 MPGe (miles per gallon gasoline equivalent), and a range of 82 miles. Pam Fletcher, chief engineer of General Motors and so-called "Queen of the Volt," acknowledged the extent to which consumers hold off on EVs because of range anxiety -- the fear that an EV will die far from a charging station -- but said GM had solved this problem with its range-extender technology.

GM's new Spark EV at the BNEF Summit. Photo credit: Sara E. Murphy.

General Motors has some experience in this arena, having launched the Chevy Volt. Fletcher said the Volt represented a step change in consumers' perceptions of what an EV really has to offer. She said that with 100% torque on demand, Volts are fun, and a pleasure to drive. According to GM surveys, 92% percent of Volt owners would buy another Volt.

Fletcher said GM is bringing its Cadillac ELR extended range electric coupe to market at the end of this year. She said the Caddy will employ the same technology as the Volt, taking the best of the Volt's all-electric propulsion with extended range, then wrapping a luxury coupe around it.

Meanwhile, at this year's Shanghai Motor Show, newly re-emerged Detroit Electric announced its partnership with China's Geely Automobile to develop EVs for the Chinese market. Lamentably, I incorrectly predicted that Detroit Electric would be hitching its wagon to BYD. I got that one wrong, but Geely is no less interesting. Geely owns Sweden's Volvo Cars, and recently withdrew as a potential bidder for Fisker Automotive, the failing California green-car start-up. It will be interesting to see if this tie-up gives Tesla (NASDAQ: TSLA  ) a run for its money.

Speaking of Tesla, its founder Elon Musk tweeted on Thursday that the company would be announcing a new strategy on Friday. His exact words were, "Announcement of new @TeslaMotors strategy tomorrow. Tesla owners will like this." Wall Street got all twitterpated, and Tesla shares were up more than 3% at Thursday's closing.

Ali Izadi-Najafabadi, senior advanced transport analyst at BNEF, said Tesla had built its brand value and customer base by making "cool" cars, irrespective of their EV qualities. Be that as it may, he was enthusiastic about the EV space, in general. He noted that, as we change vehicles' drivetrain, we get more optionality on the fuel side, paving the way for new approaches like Tesla's.

Tesla has a partnership with SolarCity (NASDAQ: SCTY  )  -- another Elon Musk vehicle -- to provide Tesla drivers with solar-fueled battery-recharging stations. As I said above, EVs are complementary to renewable-energy deployment, particularly solar. In the new energy ecosystem, such partnerships will be critical to ongoing resilience.

Watch the EV space, folks, and consider getting some skin in the game. A lot of smart people think this is just the beginning for a very promising space.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 26, 2013, at 11:06 AM, olafaux wrote:

    This is our take:

    We thank every one involved in making EVs a TRUE reality. Thank You. Now. We believe, that the announcement of this FANTASTIC development coud have come as early as 20 Years ago. Other so called power brokers, deeply fasatened to big oil, PREVENTED that. They can not keep on to that GRIP any more. Therefore, Electric Vehicle [EV], technology has been "Let Loose". Here We Go!!!!

    God bless America!

  • Report this Comment On April 26, 2013, at 11:15 AM, bum944 wrote:

    Today's battery technology is not good enough for EV's to be widely adopted. The three main problems, cost, range and charging time are enormous disadvantages. Consider that hybrids only take about 5% of the market when gas reaches $4 and they are far more practical than EV's. So it is hard to imagine EV's taking even 1%. Compared to hybrids, EV's cost way more, you are limited where you can go and it takes a long time to recharge them. And what about the resale value when you may have a battery that needs thousands of dollars for some new cells? Although I own a Leaf and my home is entirely solar powered, these things make no economic sense. I'm just in a microscopic segment of consumers that adopts these things because they are cool, not practical..

  • Report this Comment On April 26, 2013, at 11:27 AM, jc1964 wrote:

    Bye bye to OPEC's price gouging and huge profits year after year! Can't wait

  • Report this Comment On April 26, 2013, at 12:15 PM, RobertLB1 wrote:

    Truthfully EV's are about to take over the world. After more than 40 years of private work into electric energy generation, a new technology was stumbled onto by a person who was trying to increase energy output of an electric generator. This electric generator produces more electric energy than it uses. For example: The patented pending prototype produces 500% more electric energy than it uses, and a generator could be built to produce many thousands times more energy than it uses. This technology is so new that Banks, DOE, most scientific organizations, and the USPO have rejected it as being impossible because it defies the Laws of Thermodynamics. Everyone claims that it will not work, but it's setting in his living room producing electric energy, even though It isn't turned "ON" or connected up to a battery. All of those agencies refuse to believe that it will work, but it would be nice if they can explain why it's producing electric energy even thought its not turned "ON". Any rational person with limited scientific knowledge would have trouble believing that it's real, and it took the inventor days to prove to himself that this new technology was real and it worked. It operates under all of the same Law of Physic as all electric generators, so in a way it's difficult to understand their disbelief once its operation has been explained to them. Before his death, Tesla told a reporter that he had discovered a way to produce unlimited amounts of free electric energy, and there is a very good chance that Tesla also stumbled onto this new technology. What Tesla didn't know was that his period lacked the modern electronic parts to make it small enough to fit into a briefcase. An electric generator that is small enough to fit into a briefcase will power most EV's, homes, and small businesses. This technology is coming to the world and all of these disbelievers will have to explain why they refused to even look at this new technology.

  • Report this Comment On April 26, 2013, at 12:32 PM, Bioengr wrote:

    Bum, the battery technology is better than you seem to realize. Tesla has demonstrated that. The batteries are not that expensive. Their first cars are expensive because it makes business sense to start that way. They will come out with cheaper cars as the business grows. And the range (around 250 miles) is more than adequate for the vast majority of consumers. You charge the car overnight with a 240v outlet in your garage and you're good to go for anything but a fairly long trip. That requires a little planning but charging stations are being built all over the place. Embrace the new reality.

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