The Nissan Leaf electric car.The Canadian Press
I don't have to tell you that electric cars are coming, including the Nissan Leaf and the Chevy Volt almost immediately.
Billions and billions are being invested in developing electric vehicles all around the world, but nobody really has a clue how much of the market they will take. Here are two recent examples: Deloitte says at least 20 per cent of world vehicle production will be electric by 2020, Johnson Controls Inc. suggests it will only be 3 per cent by then.
These all-over-the-map estimates must give auto makers some sleepless nights.
Dr. Martin Hoelz, global automotive industry group leader and partner with Deloitte Germany said, "By 2020, EVs and other green cars will represent up to a third of total global sales in developed markets and up to 20 per cent in urban areas of emerging markets." He says government policies such as stricter carbon emission standards and attempts to reduce dependence on foreign oil will drive the market farther.
Rupert Murdoch's Wall Street Journal, on the other hand, isn't on the same wave length. The Journal reported recently that electric cars still face a big hurdle in the high cost of the battery packs, which can account for half the cost of an electric vehicle.
Johnson Controls Inc. makes batteries for cars, but Alex Molinaroli, president of the battery division, says the company isn't expecting all electric cars to take off. Its research found that electric cars only make sense for about 3 per cent of American drivers - those who drive many miles a year but only on short trips. Molinaroli is quoted as saying, "We just don't think it will happen as quickly as all the press releases out there would make you think."
I'm about to test drive the all-electric Nissan Leaf but I don't know if it will answer my "range anxiety" issues. The company has only promised that "short drive loops are available."
Zero emission for the rich
The most exciting electric car I've seen so far is the Audi E-Tron Spyder concept car that was at the Paris Motor Show.
Audi has departed from the all-electric setup seen in previous E-Tron concepts and added a 3-litre V-6 diesel (300 horsepower ) to power the rear wheels, plus a pair of twin electric motors (88 horsepower) for the front. This will push the car along at a top speed of 250 km/h.
Having the diesel would also do away with "range anxiety" about running out of juice in the middle of nowhere; but there seems to be another thought at the root of the concept.
If you switch off the diesel and go all electric you've achieved zero-emission driving. There's enough juice in the battery to travel up to 50 kilometres at a greatly reduced top speed of 60 km/h. "For the customer the question is what the best package is for me," says Frank Meel, Audi's vice-president of electrification.
"If there are cities that allow only emission-free driving you will need something that can be driven electrically. But outside town you might want to get on the highway and push it up to 250 km/h. You can do that, too."
In other words, rich people can meet the zero emission regulations where they find them yet still hit warp speed on the autobahn. Now that might sell. "My job is to offer the right products at the right time and at the right place," Meel says.
Return on investment
I have written several times about automotive research being done in Canada sponsored by AUTO21 Network of Centres of Excellence based at the University of Windsor. AUTO21 spends about $11-million a year, which it gets from governments and car companies. This year, for example, there are 39 R&D projects spread across more than 40 universities.
I've been to check out several, including work on everything from baby seats to diesel engines to vehicle recycling.
I'm as suspicious as anyone about consultants who are hired to tell you what you want to hear, but AUTO21 went out and got the highly regarded Centre for Automotive Research (CAR) in Ann Arbor, Mich., to see if private and public sponsors were getting their money's worth.
CAR determined that the AUTO21 R&D programs were providing a 12-to-1 return on investment for investors as well as benefits at large through the development of safer, cleaner vehicles.
I wish my investment adviser could put up that kind of return.