The Electric Car Gold Rush of 2010

Published May 9, 2008

The hood of the Tesla Roadster—the electric car that launched a thousand plug-in vehicle start-ups.

The buzz around electric sports-car-maker Tesla Motors is sparking something akin to what happened in California 150 years ago—this time the rush is toward plug-in electric and hybrid vehicles.

Tesla’s headline-grabbing all-electric Roadster [1], which has garnered orders and investments from the likes of the Governator and the Google guys, has inspired a rush of companies trying to capitalize on what they believe is a burgeoning electric vehicle market. Undaunted by Tesla’s difficulties in delivering on early promises or problems faced by the last wave of electric car projects [2], these companies—mostly with design and engineering experience only—are charging forward with a “if they can build a car, why not us” attitude. For some reason, nearly all these companies claim that 2010 is the year they will hit the market.

• Fisker Coachbuild in Southern California is already on the charts with its swoopy plug-in, the Karma [3]. If and when it comes to market, it will be a low-volume vehicle produced by a consortium of auto industry veterans, backed by millions of dollars of venture capital funding. Expected in late 2009.
• Pininfarina, a design studio in Europe with a long track record of supplying vehicle designs to major carmakers is dedicating an assembly line to producing EVs in collaboration with the Bollore Group, a French conglomerate producing batteries for the new vehicle. With €150 million invested, they plan to have it on the market in, you guessed it, 2010.
• Gordon Murray Design has jumped into the fray, offering an electric vehicle or plug-in hybrid using lightweight thermoplastic composites, a skill learned from the company’s work with racecars and high-end sports cars. They also have backing from venture capitalists—but will focus on selling designs to others willing to take on the bigger task of producing the vehicle.
• Other companies in Europe talking about producing their own grid-connected green machines are Loremo of Germany and Mindset of Switzerland. Both companies claim they will have hybrids on the market in the next couple of years.

2010 or Bust

While announcements from these small companies keep bloggers busy, the big boys—major auto companies and Tier 1 suppliers—are making plug-in vehicle plans of their own. For example, Magna International—a top-tier supplier with a track record of actually producing vehicles for sale around the world—is jumping into the fray with its own brand of plug-in hybrid.

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Magna set aside $30 million of its own money to develop systems for the vehicle, which it plans to launch by 2010. Magna has the engineering expertise to develop the components to make a plug-in hybrid work, and has hybrid components for the new car already in the field for testing. This also gives them the leverage of either selling the completed car or some of its components to major brands on their customer list, such as BMW and Jeep.

Meanwhile, the heavyweights are making their own plans: General Motors with the Chevrolet Volt and Saturn Vue Plug-in; Toyota with a plug-in version of the Prius; and Ford with a plug-in Explorer. They have all expressed intentions to enter this portion of the marketplace and do not plan to hand over sales to upstarts. Right behind these players, Nissan, Mitsubishi, Subaru, and Norway’s Th!nk are in various stages of development and testing on a new generation of small electric cars.

The larger companies have a number significant advantages: big R&D departments, and well-established sales infrastructures and marketing arms geared toward moving product.

Finally, a caveat: The underlying battery technology in nearly every one of these endeavors—lithium ion chemistry in various combinations—has still not yet been proven in large-scale vehicle production. Consumers looking to buy their first all-electric car are advised to be wary of extreme marketing claims in this still-developing segment—especially any company promising a date-certain for introducing an electron-powered dream car.