Coming Soon to a Car Lot Near You: The E-Car

Imagine never having to worry about rising fuel prices.

Vehicles that use little or no gas, relying instead on electricity that will cost only a penny or two a mile and reduce pollution, may very well be an option soon.

“Electrification” is the buzzword in the auto industry. Whether to curb our dependence on foreign oil or to reduce the production of CO2 and other emissions linked to smog and global warming, there’s a growing consensus that automakers must move away from the internal combustion engine. How soon that can happen is a matter of debate, but nearly every major manufacturer has announced plans for a battery-powered vehicle.

The first step: hybrids

It’s been a decade since Toyota and Honda took a major step toward putting battery-operated cars on the road by introducing the first hybrids into the U.S. market. At their simplest, hybrid-electric vehicles, or HEVs, recapture energy lost during braking or coasting. Stored in a battery, that energy is used in the latest version of the Honda Insight to help launch the vehicle or add a burst of power during acceleration. The Prius goes an extra step, tapping its batteries to drive for short distances, at low speeds, solely on electric power.

The Prius and the Insight underscore the different approaches manufacturers are taking to build future cars. “There is no silver bullet, no single solution to the need for alternative power,” cautions Jim Lentz, the top-ranking American executive with Toyota Motor Co., which just launched a third-generation version of its compact Prius, the best-selling hybrid-electric vehicle in the world.

But those who have developed hybrids are taking alternative power even further.

On the docket

Toyota will begin testing a plug-in hybrid-electric vehicle (PHEV), a version of the conventional Prius hybrid, next year. In this new model, an owner can charge up the car from a common 110-volt outlet or by using a special high-voltage charger. Such PHEVs use a large pack of advanced lithium-ion batteries, which can store nearly twice the energy of the nickel-metal hydride batteries that are used in the latest version of the Prius hybrid. That would boost their electric-only range to around 16 miles, up from just a mile or so now. They’ll also travel as fast as 62 mph—a marked increase from the maximum 20 mph today.

General Motors will further advance that idea with the Chevrolet Volt, due to reach showrooms by the end of 2010. When its lithium-ion pack is drained, a small gasoline engine automatically fires up. Volt is technically called an extended-range electric vehicle (E-REV) because its wheels are always driven by electric motors, with its internal combustion engine serving only as a generator.

“More than 70 percent of American commuters drive less than 40 miles a day,” notes GM Vice Chairman Bob Lutz, which is not so coincidentally Volt’s range on battery power.

But some believe plug-ins like the new Prius, and E-REVs like the Volt, are just the beginning.

By battery alone

Billionaire Elon Musk, one of the founders of the online transaction service PayPal and a gung-ho pioneer in the development of private manned spaceflight, has put a chunk of cash into Tesla Motors. The California start-up recently launched its two-seat Roadster, a sports car capable of charging from 0 to 60 mph in 3.7 seconds.

Impressive, yes, but all the more so considering the Roadster is powered by nearly 7,000 Lithium-Ion batteries, the same cells commonly found in a laptop computer. More significantly, Musk and company expect to launch a battery-powered family sedan, sometime in late 2011 or 2012, that will come in at a price tag under $50,000, half that of the Roadster.

Musk isn’t the only one who believes the industry must move entirely to battery power. Another convert is Nissan Chairman Carlos Ghosn, who drove a prototype of the battery-electric Nissan Leaf onto the stage over the summer during the dedication of the Japanese maker’s new headquarters in Yokohama. “We have been working tirelessly to make this day a reality: the unveiling of a real-world car that has zero—not simply reduced—emissions,” says Ghosn, who promises to put Leaf on sale by 2011.

Another alternative: fuel-cell power

Ironically, some proponents believe the ultimate green machine of the future will tap an old technology: the fuel cell. Developed in the mid-19th century and used to provide power for the Apollo moon mission, the fuel cell “stack” combines hydrogen and oxygen to produce a stream of electric current that can run the same motors used in a battery-electric vehicle, or BEV. A fuel cell vehicle, or FCV, does have a tailpipe but emits only pure water vapor.

There’s an extensive test program—a joint government-industry partnership involving the major players in the hydrogen technology game—already under way in California, with most of the vehicles going to government or corporate fleets for controlled tests. But Honda is leasing its FCX fuel cell car to select consumers who live close enough to the few available hydrogen pumping stations in greater Los Angeles.

Where to fuel up and other quandaries

Going forward, technologies like battery and hydrogen power may be immensely promising, but they’ll require a new infrastructure that “provides the same user experience” as the tens of thousands of gas stations that American motorists now use, says Tony Earley, CEO of Michigan utility company DTE Energy.

Automakers like Ford, Nissan and Daimler AG (parent to Mercedes-Benz) have been setting up an assortment of partnerships aimed at overcoming this problem. One new German government/industry consortium recently set aside $1.5 billion to open 1,000 hydrogen filling stations, also equipped with high-voltage battery chargers, around Germany by the end of the next decade.

Still, many skeptics question whether electric cars will deliver on their bigger promise. Batteries are bulky, expensive and deliver little energy. To store the same amount of energy as in a 15-gallon tank of gasoline, you would need about 9,000 pounds of batteries, the equivalent weight of a couple of Hummers.

Therefore, engineers are constantly being forced to create ways to make battery-powered vehicles phenomenally energy efficient. Using the current state-of-the-art lithium-ion battery, the typical BEV will get little more than 100 miles per charge—though Tesla claims a range of more than 200 miles for its Roadster.

Power of the purse

The technology isn’t cheap, either. Tesla’s initial battery car, the Roadster, costs more than $100,000, and the first offering from the California-based start-up Fisker, the Karma, will come in close to $90,000. Even the Volt is likely to top $40,000, though GM hasn’t provided final numbers.

“The economic equation is not there,” says Mary Ann Wright, head of Advanced Energy Storage Solutions for Johnson Controls, one of the world’s leaders in hybrid technology.

Proponents contend that the next generation of batteries and battery vehicles should deliver better range and at a lower cost. Admittedly an optimist, David Cole, director of the Center for Automotive Research in Ann Arbor, Mich., believes the Volt’s battery pack could plunge from $12,000 to $5,000 or less. If he’s right, the economic equation could shift dramatically, especially if fuel prices surge past the $4-a-gallon mark, as most experts predict.

A hand from the government

The Obama administration has been doling out what will eventually total more than $2 billion to help set up a manufacturing base for lithium-ion batteries, which currently come primarily from Asia. The goal is not only to develop a more efficient, reliable and cost-effective battery technology, but also to establish a production base in the United States. General Motors, for example, is using some of the funds to set up a facility in suburban Detroit to assemble battery packs for the Chevy Volt.

A separate, $25 billion government effort aims to boost development of battery- and hydrogen-powered vehicles. Big manufacturers, like GM and Ford, aren’t the only ones benefiting. It’s normally next to impossible for new players to enter the high-stakes auto industry, but the program is leveling the playing field. Fisker is using a $528 million government loan to purchase an abandoned GM assembly plant, in Delaware, which is projected to begin producing a new line of plug-in hybrids in 2012.

Turn up the volume

Ironically, one of the concerns about electric propulsion is its virtual silence compared to a raucous gas engine. As boomers age and their hearing diminishes, this is becoming a real concern. Regulators are considering ways to make electric vehicles louder, at least when driving through residential neighborhoods. Flick a switch inside the battery-powered version of the tiny Smart car and it suddenly sounds like a race car when you press the accelerator. Another flick and it sounds more like the flying machine from the sci-fi cartoon, The Jetsons.

Making it easy to hear an oncoming EV, finding ways to bring car costs down and outfitting the country with fuel stations are considerable challenges facing the auto industry as it moves to electrify tomorrow’s vehicles. But despite the industry’s many hurdles, most experts believe it’s the only path available if we truly want to reduce emissions, prevent global warming and cut our dependence on costly imported oil.

Paul Eisenstein covers the automobile industry from Detroit.