Electric Car Ideas That Are Bound To Fail

October 7, 2009

It seems like just about everyone has a “new idea” that will inevitably make electric cars more popular than those relying on the good old internal combustion engine. Of course, maybe it just seems that there are way too many people trying to reinvent the wheel, because at every function I go to there’s someone telling me about another company or individual who is going to revolutionize electric cars.

Let’s get something straight here folks – there haven’t been any discontinuous innovations in the electric car in over 100 years. There haven’t been any important continuous innovations in nearly 100 years. Even the gas-electric hybrid with regenerative braking was developed when a very famous dead guy, Ferdinand Porsche, was a very young, very alive engineer for Lohner.

Blame low gas prices and Cadillac’s introduction of the electric starter for all of this. Prior to the debut of Kettering’s self-starter as standard equipment for the “Standard of the World” automaker in 1912, thousands of people drove electric cars. Not coincidentally, 1912 was the peak year for sales of electric vehicles. In fact, electric cars were a larger percentage of the market in 1910 than now.

Demographically speaking, most electric car owners/drivers were urban women who used the cars for shopping. Considering that starting a car used to require a strong pull on a large crank while standing directly in front of the vehicle, it is not surprising that women tended to like the quiet reliability of flipping a switch inside an electric car. As for the quiet, powerful steam cars – these often took nearly a half-hour to warm up, after which the right set of circumstances could set the whole system on fire like Nikki Sixx’s boots during early Motley Crue concerts.

It’s only recently that companies have again thought about electric cars. Since people aren’t really that interested in history, they’ve decided to reinvent the wheel or bark up trees that have long been deemed worthless.

Here are some of the “revolutionary” ideas about which people have told me while at dinners or other functions:

The “battery swap” concept: There are a lot of people trying to do this, but the most visible is from Shai Agassi, an Israeli guy who believes that the key to electric car acceptance is to have battery stations where motorists simply pull out the depleted tray of batteries in their cars and swap for charged batteries. Sounds like a great way to overcome the range issue, right? It’s just like barbeque propane tanks – when you’re out you swap, correct?

No – not really. In fact, the relationships of car versus propane tank is about as valid as the shared characteristics of Rush Limbaugh and Anne Hathaway. I have a better shot of winning the Formula One Driver’s Championship and America’s Top Model in the same year than this becoming a reality.

Let’s tackle the minor challenges first:

  • Unlike propane tanks, batteries – even lithium ion (or any yet-to-be invented cell made out of a combination of unobtanium and whatever pops out of a moon crater explosion) lose quality over time. You drop off your perfectly good new batteries and possibly get a tray of old crappy ones in return. Instead of getting a 50-mile range, you get 18 miles and the oh-no light comes on – which, incidentally, you scream at, because this warning light is taking much needed juice away from propelling your ass back to scream at the place that gave you these used-up batteries in the first place.

  • Distribution: Then you have to find a station with batteries. Not only are battery packs much, much, much more expensive than metal propane tanks, but also they are a lot heavier and more space-consuming. Don’t think that every Kwick-E-Mart is going to invest in a large extra building and employ another foreign-born better-educated-than-your-average-banker worker to lug 200-pound battery packs all day.

Now, it’s time to bring up the toughest barrier:

  • Standardization: As it stands, no single electric car or hybrid shares the same battery type/number, connectors (and most importantly) packaging with another non-badge-engineered vehicle. For instance, Tesla uses thousands of modified laptop battery cells, which is totally different from the dozens of lead-acid batteries in many of the electric tin-can commuter boxes I see around my parts of town. Considering that automakers have found six different ways of manually shifting an automatic (push up on a stick to upshift, pull down on a stick to upshift, push right on a stick to upshift, pull the right paddle to upshift, push the right button on a steering wheel to upshift, or BMW’s push either thumb paddle to upshift – not to mention the 7-Series unique one-button to downshift) ever expecting the companies to unite and tackle the almost impossible task of standardizing on a single battery technology that fits (and complies with safety regulations) in everything from an SUV to a sports car is about as big of an ask as requesting your spouse arrange for your birthday a three-way with you, her and the entire San Diego Chargers’ cheerleading squad.

“Electric Car Only” Charge-While-You Shop Parking Spaces: Some companies exist to print signs and install charging stations for restaurants, coffee shops and grocery stores. In some cases, these charging stations are little more than standard outlets. In any event, even with high-voltage charging stations, most cars get little more than a mile’s worth of juice in a standard ten-minute excursion into a store. If it’s a 110-volt outlet, ten minutes on the charger won’t give any electric car enough juice to make it out of the parking lot! In other words – it’s snake oil, which might explain why the nutritional supplement store I passed the other day had one such spot.

And before you write in and talk about real high-voltage charging stations in office parking garages and park-and-ride lots: yes, these are great ideas. I do a) believe they need to be installed and b) predict that their adoption and use will be proportional to increases in peak electricity charges and brownouts in California.

The Back-Alley “Plug-In” Conversion: A friend of mine is renting space in his warehouse to a company that expects to get rich installing plug-in electric engines into existing new cars. My advice was to get as much rent up front as possible.

Where to start with this? First, these guys void the new car manufacturer’s warranty. Second, low production – no matter how careful, means poor quality control. Finally, the result is a shorter range at a higher cost per mile than the new car prior to removing the gas engine.

There are some businesses doing decent plug-in conversions for the Prius. Their corporate lifespan is limited, though, since Toyota has already committed to creating plug-in hybrids of its own.

At the end of the day, the only thing that will improve the acceptance of the electric car is to cure what killed it in the first place: range. These small companies will exist in the margins for a year or two more, but then the Chevy Volt technology will certainly kill most of them. I say Volt “technology” rather than just the Volt itself, because the plug-in engine/motor that is the basis of the Volt model will be used in all of GM’s front-wheel-drive vehicles.

When consumers can buy a single car that goes 40 miles on electric and then also go 350 miles on single tank of gas (plus fill up at any existing gas station to continue), it accomplishes what electric cars never could: kill two birds with one stone. The Volt will give electric-only benefits for those who want it without forcing them to exchange batteries, get some shadetree-mechanic conversion…or also own a standard car if they need to go on a road trip.

The Volt might not be that huge of a jump in technology, especially given what the industry had 100 years ago, but it’s a good small step in the right direction that will result in large change in gas prices (good), electric prices (bad), electric production challenges (really bad), and domestic automotive industry growth (very good). It might do very little for the environment, as production of electricity is like Mother Earth smoking ten packs a day and occasionally shooting heroin with the odd nuclear plant. At least it makes oil production a little less important on the world stage.


So Long To Saturn — Its Rings Not Worth A Thing

October 1, 2009

As The Princess Bride’s Miracle Max would say, Saturn is “mostly dead”. Yesterday GM said Saturn will simply be retired, because after the deal between Penske and GM fell apart, it would take a miracle for anything else to happen.

When the Penske/GM deal for Saturn was announced many months ago, I was a tad surprised. Roger Penske has always had something of a Midas touch turning businesses into cash cows. The buyout of Saturn, however, seemed to be more of a pig than a bounty-producing bovine.

The main problem with the deal was that GM would only continue to build three models—the Aura, Vue and Outlook for Penske through 2011. At that point, Penske would need to find some other corporation to build the cars, which he thought he had (insiders claim it was Renault-Nissan). Unfortunately, that all fell through.

Or maybe it is actually fortunate. The value of a brand producing badge-engineered product lines is precisely the issue I brought up back when Saturn was put on the block. In the old days when a corporation bought out another automaker, it got the brand, one or two production facilities, the trademarks, the equipment, and workers. Now it simply isn’t that easy. Since Saturn produces not one single vehicle unique to its brand, Penske didn’t have the opportunity to buy anything that resembled a true going concern.

It’s obvious that Penske was placing the value on Saturn’s distribution network with which he had longer-range plans. Saturn’s current lineup of vehicles was no doubt a stop-gap until other foreign car lines from China, India and other countries could be imported and sold/serviced via Saturn dealers. Since importing cars is a tricky business, relying heavily on emissions and safety regulatory bodies, Penske needed some breathing room if certain brands needed more time to meet American standards.

I said it before and I’ll say it again – GM killed Saturn a long time ago by stripping its primary value proposition: autonomy. When the brand was introduced nearly twenty years ago, all of the company’s products were unique. If 1990’s Saturn were to have been shopped, it would have found a buyer.

Over the last two decades GM let Saturn lose its value. Initially it was by not replacing the original car models, and then they replaced it with badge-engineered crap. While some would argue that the current lineup of Aura, Outlook, Vue, and Sky are pretty good, there’s no escaping that all the vehicles were available with slightly altered sheet metal (actually, usually it was simply plastic) carrying other brand badges. Penske might as well have been buying the Chevy Malibu as the Saturn Aura!

Sure, there are other reasons people buy dying – or dead and buried, for that matter, automakers. It was popular in the 1980s for entrepreneurs to buy existing parts supplies of automakers leaving the US market…or the entire world, such as was case for companies like Maserati, Checker and DeLorean. Since the parts of Saturn are largely shared with other GM products, it makes this tactic a moot point.

And what about simply buying the Saturn name and brand logo for trademark value sake? C’mon – you’d be hard-pressed to find an automaker with a more ambivalent customer base less likely to buy logo apparel. I suppose Saturn is the modern brand image value equivalent of Essex or Frazer.

So Saturn will soon hit the junk bin. At the very least let’s hope that GM has figured out a better way to close-down a brand more efficiently than when it killed Oldsmobile at a cost of a BILLION dollars.

Tell you what – I’ll make GM stockholders a deal. I’ll buy Saturn…at the invoice price of a new Sky, which is the only Saturn product that (with enough development and bug fixing over a couple generations) I ever thought had any chance of being a really great car.

Come to think of it… GM is going to have to throw in an extended warranty.