Weekly Roundup: Electric Vehicles in Israel

Published January 28, 2008

Israel's Project Better Place converted a standard Renault Megane into an electric vehicle to demonstrate the prospects of an EV future.

In this weekly summary, we look at the biggest stories of the past seven days, separating real developments in the world of automotive technology and fuels—from wishful thinking and vehicle vaporware.

Expect It: Electric Vehicles in Israel

You can accomplish a lot with $200 million. That’s the sum raised by Shai Agassi, a Silicon Valley executive who left a fast-track career at software giant SAP to start his own company focused on electric vehicles. Last week the company, called Project Better Place, announced a deal with Renault-Nissan and the Israeli government to put electric vehicles (EVs) on the roads in Israel in just three years.

Project Better Place will provide a network of 500,000 charging stations for the vehicles, while Renault-Nissan will provide the lithium-ion-battery powered EVs, and the state of Israel will approve import and sales tax policies that improve the economics of the electric vehicle. While it’s easy to announce ambitious plans for EVs, it’s much harder to actually make things happen. The employees of Project Better Place, who have little experience with EVs or charging infrastructure, have their work cut out for them. But what makes this effort unique is its partnership between senior policymakers, an auto company, and an infrastructure provider. Even Carlos Ghosn, head of Renault-Nissan and a persistent skeptic of advanced powertrains, is on board, explaining that this is the first case of an EV market that makes financial sense for everyone involved.

With its trifecta of support, we expect to see Project Better Place’s plan implemented in Israel, at least on a limited scale. Whether the plan can be replicated in other countries is another story.

Doubt It: BMW’s Green Brand

Last week a member of the BMW board confirmed that the company was discussing adding a fourth brand to the company’s portfolio—complimenting Mini, BMW, and Rolls-Royce—that would offer “green” vehicles. Until now, the company has been rolling out green technologies in its BMW models: examples include the limited-availability hydrogen-powered 7-series and the concept X6 ActiveHybrid. BMW has also been increasing the overall fuel efficiency of its entire lineup through its “Efficient Dynamics” program, which adds unexciting but effective features such as electric power steering and radiator vents with improved aerodynamics.

But the BMW brand is having something of an identity crisis, and executives are unsure whether its performance-oriented image melds well with environmental sensibility, or whether it even needs to. It’s not clear that BMW really understands what environmental vehicles are about. The Hydrogen 7, a V12-powered 7-series fueled with liquid hydrogen, is a good example. The Hydrogen 7 may have low tailpipe emissions, but its poor fuel efficiency and use of energy-intensive liquid hydrogen means it does a poor job of reducing greenhouse gases. Expect to see BMW continue to do what it does best, which is building cars that go fast.

Forget It: GM and Ethanol

General Motors’ product guru Bob Lutz reiterated GM’s support for ethanol at the Automotive News World Congress last week. Lutz explained that E85, a blend of 85% ethanol and 15% gasoline, offered the best near-term solution to reducing U.S. oil consumption while GM (and other automakers) ready their electric vehicle and plug-in hybrid offerings.

As if to underscore Lutz’s message, GM also announced last week that it had invested in Illinois-based ethanol producer Coskata. Unlike current ethanol producers that make their fuel from corn, Coskata is perfecting technology for cellulosic ethanol, which is made from a broad set of feedstocks like grass, forest thinnings, wood chips, and agricultural waste. Independent analysis of Coskata’s fuel shows that it decreases greenhouse gas emissions by 84% relative to conventional gasoline. Coskata also claims its proprietary process, which uses gasification and bacteria to convert raw material into ethanol, will yield ethanol for less than $1/gallon. So what’s not to like?

Making flex-fuel vehicles that are E-85-capabale is a tactic automakers have used for years to obtain higher fuel economy ratings under CAFE, particularly for light-trucks. Few of these vehicles ever run on ethanol, a problem that GM and others place squarely on the shoulders of fuel producers and retailers. Yet even as GM touts ethanol, its flex-fuel vehicle offerings remain limited. In 2008 the company offers just one car—the Chevy Impala—that uses E85; the other flex-fuel vehicles are light trucks, all of which use the same thirsty 5.3L V8 engine. When GM makes its entire lineup E85-capable, we’ll know they’re serious about ethanol. Until then, announcements like their Coskata partnership are little more than interesting science projects.