Last Updated Sep 22, 2009 4:05 PM EDT
In short, will people be willing to plug in their cars? Will they accept the huge lifestyle change that it entails? Gott discusses that in a new IHS Global report entitled "Battery Electric and Plug-In Hybrid Vehicles: The Definitive Assessment of the Business Opportunity." Unfortunately, they don't give it away, but we have free access to this video in which Gott and colleague talk about it. EVs, says IHS Global, will never compete with gas cars in range, but they will make excellent urban vehicles. Gott envisions a city solution that combines fleets of leased EVs (with centralized charging) that urban dwellers can access (something akin to today's Zipcar vehicle sharing), with gasoline-powered cars available for longer trips. "The real challenge is making cost-effective batteries," he says in the video. "It is still early days in the battery world." There may be technology beyond lithium-ion, including solid-state batteries like those developed by Planar Energy Devices.
Gott said that when early EVs hit the road, it should stimulate further R&D to make batteries better and cheaper.
My own views are also free for the taking. I think that an increasing number of start-up companies have recognized the business case, and they're starting to look like the Silicon Valley computer companies of the 1990s. The difference is that it was much easier to get venture capital in the 1990s, so many of the startups are far more dependant on Department of Energy manufacturing loans and grants then they'd otherwise be.
The dilemma is symbolized by Indiana-based Bright Automotive, which has a great product--a plug-in hybrid panel van--and willing customers, but a need for immediate cash to build manufacturing capacity. The DOE's early funding priorities seem to emphasize having a relationship with the Big Three, and it helps if they're located in Michigan. But coming funding rounds may target startups beyond Tesla Motors (which hit the jackpot with $465 million).
Tesla has cars on the road (700 now) and a 10 percent, $50 million buy-in from Daimler, and all that helps a lot in its efforts to secure both private and public funding. According to Rachel Konrad at Tesla, the company has also raised $82.5 million in its latest funding round. Among those investors is Europe's Fjord Capital Partners, headed by former World Economic Forum head Michael Obermayer, and Aabar Investments out of Abu Dhabi. All told, investment in Tesla adds up to $783.5 million.
Recall that Warren Buffett paid $230 million for a 10 percent share in Chinese EV maker BYD (and will buy more if the company lets him). So a global economist and one of the world's most respected investors both think there's a business case to be made for EVs.