Are electric cars really the next big step for mankind?

ELISABETH JEFFRIES
The Spectator
WEDNESDAY, 29th APRIL 2009

If internal combustion is going to be superceded by battery power, says Elisabeth Jeffries, carmakers and governments need to invest on a scale akin to the Apollo space programme.

Putting Lord Mandelson into an electric Mini may not seem to bear much comparison with putting a man on the moon, but there are interesting parallels.

In 1961, the US government embarked on the Apollo space programme, with the ambition of landing astronauts on the moon by the end of the decade. By 1969, it had achieved exactly what it set out to do. But it was a risky project, with no guarantee of success. To land on the moon, scientists had to solve three problems: how to rendezvous and dock with another spacecraft, how to work outside a spacecraft, and how to survive prolonged periods of time in space. In total, the US government spent $20 billion on the project (about $350 billion in today’s money), driven by a desire to upstage and defeat the menace of the age — the Soviet Union.

That world has gone. A new perceived menace has emerged, greenhouse gas, and a new programme is creaking into gear to control it: low-carbon technology. Today’s challenge is to produce an electric car that can travel 200 miles without recharging its battery: a cinch compared to space travel, you might have thought.

Yet governments and vehicle producers are groping in the dark. Back in the 1920s, electric cars briefly commanded a 20 per cent share of the motor vehicle market, but the technology was sidelined as oil supplies became increasingly abundant and manufacturers concentrated on the carbon-fuelled internal combustion (IC) engine. An electric car launched by General Motors in the 1990s was quietly snuffed.

GM had gradually overtaken Ford and become the world’s most successful car producer, but its fortunes were on a long downward slide towards the brink of bankruptcy it faces today. After decades of consolidation across the industry, only a handful of global manufacturers remain, and far too many conventional vehicles are being produced.

Enter the green car. First there was the Toyota hybrid (a petrol-driven vehicle that can use electricity at low speeds). Next is GM’s Chevrolet Volt — due to be launched in the US next year — similar to GM’s Vauxhall Ampera in the UK, the prototype of which was unveiled at the Geneva motor show in March. For trips of up to 37 miles, the Ampera will run only on a lithium ion battery, more commonly used in laptop computers; for longer journeys, it will continue to use electricity, but generated by a small internal combustion engine.

And earlier this year an electric car in a different class altogether was unveiled — the Tesla Roadster, a California sports car that can go 220 miles without recharging, costs E112,000 in Europe, and was hailed by Boris Johnson under the Daily Telegraph headline ‘How to drive fast, have a good time — and still save the planet’.

The puzzle is why the hybrid electric car should be the next big thing, as competing announcements by car manufacturers suggest. It is pricier to develop than more efficient versions of conventional cars or new models using current electric-power technology. But, as Dr Paul Nieuwenhuis of the Centre for Automotive Industry Research at Cardiff University indicates, ‘The industry has hit a brick wall. To become more profitable, in the longer term it would have to change the way it approaches manufacturing and distribution’ — for example by using a greater number of smaller local plants and cutting out the dealers, an unlikely scenario.

Instead, the industry is locked into competing on the ‘power train’ — the parts that drive the car forward — and producing IC engines differentiated according to model or manufacturer. This means their factories are built along a particular format that is expensive to re-engineer for ‘pure’ electric cars. ‘That’s why the industry loves the hybrid,’ says Nieuwenhuis.

GM wants a new hook to compete on, and seems serious about hybrids. ‘This is the start of where we’re going. The way the system is designed it doesn’t have to have an IC alongside it, but there’s the flexibility of having the IC if you need it... we’re already in an advanced stage of development,’ says GM spokesman Craig Cheetham, who predicts that 4,000-5,000 Amperas will be sold in the UK in 2012 — about 1.5 per cent of GM’s UK sales. After that, he says, GM will take the power system and make it available for other models. The mouth-watering improvement in sales and image experienced by Toyota after the launch of the hybrid Prius is the most likely spur to GM’s enthusiasm.

GM says it will make its own battery pack for the Ampera at existing facilities neighbouring its Ellesmere Port plant, if the car is manufactured in the UK. But producers are still some way off solving battery performance, an essential requirement if hybrid and electric cars are to become widespread, allowing customers to feel confident that they can set off on a journey without running out of juice. Batteries still do not last long enough. To achieve its range, the Tesla has to carry thousands of lithium ion battery cells — one reason for its high price.

According to Nieuwenhuis, the main cost of a typical hybrid car is in its battery, amounting to around £15,000 at present — the same cost as producing the rest of the car. Improving the battery and bringing down the cost will take a decade, he thinks. ‘It is probably reasonable to assume that by 2020, battery costs will have halved as a result of mass production — which will begin for plug-in hybrids, but pure battery-electric vehicles will also benefit.’

So the plug-in hybrid (so called because it recharges at the mains), starting off as a lossmaker, could be fully functional and competitive within 11 years — a similar time span as the Apollo moonshot programme.

But there are major snags. GM and other mass carmakers are in deep trouble, pleading for bail-outs and more ‘scrappage’ schemes like the one introduced in last month’s Budget to encourage new car buyers. ‘Production of the Ampera is definitely going ahead regardless. What we are campaigning for is not government funding per se, but a government incentive to encourage customers to adopt the new technology,’ claims Cheetham. The recent photo-opportunity which put the Business Secretary Lord Mandelson and the Transport Secretary Geoff Hoon into an electric Mini on a Scottish race circuit was a partial response, announcing subsidies of up to £5,000 for buyers of electric cars from 2011. But no government has so far committed really big money for this endeavour.

Global government stimuli allocated for low-carbon vehicles have so far amounted to $15.9 billion, according to a study by HSBC. Most of that has been allocated to R&D for developing lighter batteries and plug-in hybrids, as well as tax credits or rebates for customers buying new, low-emitting vehicles. But more is needed. According to Lew Fulton, an expert at the International Energy Agency, plug-in hybrids may eventually cost about $5,000 more than conventional models, so putting two million plug-in hybrids on the road annually by 2020 could cost an additional $10 billion a year. Continuing research into battery and pure electric vehicle development generally could add another $1 billion a year, he suggests.

The total bill will run into hundreds of billions over the next two decades — more than the moon landings in real terms — if plug-in hybrids and electric vehicles are to become commonplace. And there will be much more existing clutter to clear away; for instance, a network of plug-in or battery-pack replacement points for cars needs to be set up in parallel with petrol stations. The widespread use of electric cars probably also involves adding to electricity generating capacity — though of course it also reduces demand for petrol distribution.

The auto industry can take electric cars in two directions. Nieuwenhuis suggests it can create a high-value market for them: ‘Historically, battery electric vehicles are usually sold to well-to-do ladies in urban areas who use them to do a bit of shopping, do lunch, visit friends. If such niches can be identified, there is a future for electric vehicles even with their existing limited range — as long as we don’t expect them to do the same things as our internal-combustion cars,’ he says.

Alternatively, it can try to sell them more widely and ramp up performance. Today’s governments should read the history of the Apollo programme: find a vision, set a deadline, put your money where your mouth is. But make no mistake, launching the age of the electric car will be tougher than going to the moon.