“That was a real trauma to U.S. thinking on energy, and it rationalized the notion that we need to get off oil,” John DeCicco, a professor at the University of Michigan Energy Institute, told me. An initial attempt came, in the early nineteen-eighties, from the Carter Administration, which tried and failed to make synthetic fuel out of shale oil. Then came California’s investment in methanol, and, in 1990, its controversial Zero Emission Vehicle program, which set an aggressive deadline for eliminating emissions from passenger cars. The early aughts saw George W. Bush rallying for “pollution-free” hydrogen-fuel cells, to no avail. “This hasn’t been a partisan issue,” DeCicco said. “Over forty years, this political support of getting off oil has been used to justify almost anything.”
In recent years, our collective attention has turned to electric vehicles powered by batteries instead of fuel. In 2009, the Obama Administration handed out two billion dollars in Department of Energy grants to companies developing battery-powered electric vehicles and the components that run them. Alternative-vehicle proponents gushed about the imminent widespread adoption of the technology, and investors followed. Better Place, an electric-vehicle-infrastructure company founded by a former software executive, raised nearly a billion dollars in private capital to build a network of battery-swapping stations. Electric vehicles were all the rage at the 2009 Frankfurt Auto Show, where Paul Scott, a founder of Plug In America, announced, “This is not a false dawn. This is the real thing.” In 2010, as San Francisco rushed to install electric-vehicle-charging stations, Nissan’s president and chief executive, Carlos Ghosn, declared that E.V.s would be “the game-changer” for the industry.
For those who saw this as the beginning of a hype cycle for electric vehicles, with the government and the media inflating the market’s expectations, the past year has represented the low point: the “trough of despair,” as John German, a senior fellow at the International Council on Clean Transportation, put it.
In October of 2012, the battery maker A123 Systems, which had received a hundred and thirty-two million dollars of a two-hundred-and-forty-nine-million-dollar grant from the Department of Energy, filed for bankruptcy. (The company exited bankruptcy this year after it was bought by the Chinese firm Wanxiang.) In April of 2013, Fisker Automotive, the maker of the sleek, expensive Karma electric vehicle, laid off its employees and stopped answering the phones. In May, Better Place filed for bankruptcy. Even major auto manufacturers—Nissan, Ford, Toyota—added to the gloom, slashing prices on their E.V.s this year in response to cooling demand. The latest blow to the E.V. image came earlier this month, when a video of a Tesla engulfed in flames on a highway exit outside Seattle went viral. All this has news outlets, including some that celebrated the rise of E.V.s not long ago, asking if electric cars are “losing their spark” and offering accounts of the greater success of hybrids, which use a combination of gasoline engines and batteries.
None of this news pleases German. He wants E.V.s to succeed, and believes that they are a valid alternative—just not for mainstream consumers. That’s because E.V.s cost more than their gasoline equivalents, have a much shorter range, and take too long to recharge. “There’s a legitimate market there,” German said, “but only for people who already have one or two other cars, and can juggle their internal fleet when they need to take a longer trip.”
German’s opinion is not unique or heretical in the E.V. sector, which raises the question of why so much money was invested in the industry before batteries became cheap and powerful enough to compete with gasoline engines. One culprit could be the California mandate for zero-emissions vehicles: in 1990, the state required that, by 1998, two per cent of vehicles made by large manufacturers and sold in California be free of emissions, and that, by 2003, that proportion rise to ten per cent. (The state later scaled back those requirements.) One analyst I spoke to, who asked not to be identified, told me that because California is such a big market the requirements encouraged auto manufacturers to roll out E.V.s to meet the state’s regulations before the cars would appeal to a wide market. The combination of state-mandated sales targets and low consumer demand has forced manufacturers to reduce the price of their E.V.s and sell them at a loss.
“The big companies say, O.K., this is part of the cost of doing business in California, and they just write it off,” he told me. This is fine for huge firms like Nissan and Ford, but makes it nearly impossible for smaller companies, such as Fisker and Tesla, to compete in the mainstream market. “The one company that’s been able to succeed so far has been Tesla,” he said. “They’re not selling to normal consumers, but to the people who already have a Porsche in their garage. If Tesla is serious about going into the mass market, they’re going to have their head handed to them.”
The underlying problem with electric vehicles is the cost and ineffectiveness of their batteries. In a Nissan Leaf, for instance, the lithium-ion battery accounts for more than eight thousand dollars of the sticker price, about twenty-eight thousand dollars, and the vehicle can travel only seventy-five miles before it needs to be charged again. Stuffing more batteries into the car isn’t a good solution, because, aside from increasing the cost, it adds efficiency-sapping weight. Over the next eight to ten years, auto companies could develop a six-thousand-dollar battery that would provide a hundred-mile range, according to Menahem Anderman, a battery consultant who organizes conferences to expand the automotive-battery market. That’s not much better than the status quo.
Better Place had planned to address this by overhauling the business model behind electric vehicles. Instead of buying a car that uses the same rechargeable battery for its entire life, people would pay to replace their batteries at switching stations owned by Better Place. “Better Place is a huge experiment in how you sell and fuel cars,” Rod Lache, an analyst at Deutsche Bank, told the Times in January of 2010, when Better Place had just received three hundred and fifty million dollars in new venture capital. “It is a financial validation. Now we need to see the technical validation and consumer validation.”
But Better Place’s battery-switching plan never received enough buy-in from car and battery manufacturers. “The fact that, with good salesmanship, a company can raise almost a billion dollars on an idea that was rejected by the industry that was needed to support the business model is a testimony to the shallowness of some on Wall Street … rather than of the auto industry’s weakness,” Anderman told me.
Given the cost and ineffectiveness of E.V.s, and the failure of the highest-profile attempt to address that problem, automakers seem at a loss about how to get more people to drive electric cars. They’ve focussed on government incentives, like a seventy-five-hundred-dollar tax credit on the purchase of a new E.V. These are well-intentioned: one of government’s roles is to get people to behave in ways that make the world better, and electric cars—which are about three times as fuel efficient as non-hybrid gasoline cars—serve that purpose, because they produce no exhaust. The Nissan Leaf, for instance, has an efficiency rating of a hundred and twenty-nine miles per gallon.
But questions persist about whether electric cars are really better for the environment, particularly if you take into account the environmental cost of creating electricity in the first place. (Fuel-efficiency ratings don’t consider this.) Replacing an internal-combustion-engine vehicle with an electric car transfers the emissions from the tailpipe to the smokestacks of the power plants that feed the electric grid. In the U.S., a majority of power plants use fossil fuel to generate electricity, and their greenhouse-gas emissions are declining slower than emissions from automobiles. Therefore, as DeCicco found in a recent study published in the journal Energy Policy, the U.S. electric grid produces twice as much carbon dioxide as burning gasoline for each unit of energy. “The benefits to shifting to another kind of fuel depend critically on the emissions in the sectors that produce those fuels,” DeCicco told me.
Meanwhile, gasoline-powered cars are becoming more efficient all the time. That’s good for the environment and consumers, but probably frustrating for E.V. engineers, as their central competition—internal-combustion engines—is better funded, improving quickly, and supported by a hundred and sixty-eight thousand quick-charge spots known as gas stations.
Written by Kirk Kardashian