Focus on Electric Cars as Oil Prices Rise

With the rapid increase in oil prices that has occurred since signs of recovery have been reported in the market the electric car is about to be back in focus with many investors, the major automakers are gearing up to produce electric cars by 2010.

Nissan (NSANY) says it could beat General Motors' (GM) highly publicized Chevrolet Volt to market, selling an electric car as soon as fall 2010 with an eye-popping fuel-economy rating equivalent to 367 miles per gallon and a range of 100 miles on a charge. The electric car does not use petroleum fuel directly. The mpg equivalent is calculated using a federal formula that takes into account the fuel an electric utility would use to charge the car.

EV Innovations (EVII.OB) is competing in the Progressive Automotive X Prize, the race to build a 100-mpg car. Ron Cerven, director of product development at EV Innovations says he’s lined up more than 2,000 investors and will have 10 Wave cars finished by next year. He says the Wave will feature a lithium polymer battery that can recharge in eight hours. It will provide juice to a 43 kilowatt (about 58 horsepower) motor. It all rests in a steel and aluminum chassis, and Cervan says well-heeled buyers will have the option of a hybrid composite or carbon fiber body. The vehicles were on display at the New York International Auto Show.

Ford (F) said Wednesday that it will begin producing a battery-power version of the next-generation Focus compact sedan at a converted Michigan truck factory in 2011. An early prototype gets 357 mpg, using the federal math.

Chrysler continues to insist that it will field an electric in 2010, though it's currently in Chapter 11 bankruptcy reorganization and is mostly shut down

Disclosure: We actively trade a number of these equities.

Comments

[The Aft Deck:]

Oil on a strong run Electric cars, Solar etc will become very hot very fast when there is a real recovery

May 07 11:25 AM

[LilBob:]

Although I'm very big on point source production of electric power-specifically residential and institutional wind and solar installations, the use of numbers in the marketing of electric cars is obviously false and that really raises my hackles. The federal conversion factor used is .03 GGE (Gasoline gallon equivalent) per kilowatt hour. That figure is skewed, and that fudging of the numbers was most likely at the behest of some lobbying group. The actual "real world," comparative figure is closer to .12 GGE, so all the mpg figures cited above are incorrect.

I'm not saying electric cars are a bad idea, I just don't like it when people use obviously false numbers to try to reel in dupes. I'm also getting tired of individuals who have connections to investment groups using websites like this one to seed market bias towards their long or short positions. This borders on insider trading and you know it.

May 07 01:21 PM

[Steve in Gr...:]

Of course, higher oil prices will certainly lead to the widespread adoption of pure electric vehicles, just like they have done in Europe with their almost universal use of electrics.

Wait, there are no electric cars in Europe? Well, heck! That must mean that high oil prices won't lead magically to electric cars.

May 07 03:07 PM

[Stan Wellaway:]

Check out the Case Studies page at the UK website of Smith Electric Vehicles -- where you'll see about 400 vehicles bought by a dozen fleet customers. These are in everday use. www.smithelectricvehic...

Or go to the website of their recently formed US company at sev-us.com and check out the News Room page for details of major customers lined up to buy the 7.5 ton Smith Newton delivery truck.

For the depot-based delivery fleet (such as every postal delivery service) the distance limitation of battery powered vehicles is not a problem - and this segment of the market is growing. Three UK companies and two US companies are now addressing it.

The car market is lagging behind electric vans and trucks - but these fleets will usefully trigger volume production of batteries, which in turn will help lower the cost of electric cars. It's a one way tide.

May 07 05:42 PM

[Sober Realist:]

Sutida,
Do you have any knowledge on the "air" car:
zeropollutionmotors.us/
A future IPO?

May 07 09:20 PM

[DHH:]

None of those companies are any good. Focus on this Chinese auto startup instead: 1211.HK

May 08 12:27 AM

[DHH:]

or maybe the battery technology was not there yet but is now is within reach... duh...


On May 07 03:07 PM Steve in Greensboro wrote:

> Of course, higher oil prices will certainly lead to the widespread
> adoption of pure electric vehicles, just like they have done in Europe
> with their almost universal use of electrics.
>
> Wait, there are no electric cars in Europe? Well, heck! That must
> mean that high oil prices won't lead magically to electric cars.

May 08 12:30 AM

[The Aft Deck:]

EV Innovations, Inc. (OTCBB: EVII) to Execute Aggressive Media Campaign With Over 30,700 Television Spots per Week Starting Monday, May 11

wave_0
TV Ads to Appear on CNN-HEADLINE NEWS, MSNBC, HGTV, A&E, DISCOVERY, ESPN, MTV, VH-1, USA, FOX NEWS, CNBC, LIFE and Other Cable Giants

MOORESVILLE, NC–(Marketwire - May 8, 2009) - EV Innovations, Inc. (OTCBB: EVII) (evinnovations.com), 21st Century Design & Engineering of emission-free automotive propulsion systems using the latest lithium battery technology, announces the launching of this aggressive media campaign showing EVII’s INIZIO-EVS electric super car and the WAVE.

EV Innovations received an overwhelming response at the 2009 New York International Auto Show prompting the company to develop a strategic focus on a major television media push for a global exposure of their vehicles.

A popular distributor and licensee program is available through the company to provide breakthrough electric automobiles and other products to customers in specific regions. Anyone interested in learning more about this highly rewarding opportunity is encouraged to email distributors@evinnovat... for more information.

May 08 09:25 AM

[lefty37:]

Do a study on ohms law and you will find that cars cannot store enough kw's to run very far. But, then they can be charged overnight from a coal burning powerhouse. Then! when you have to replace all those batteries. $$$$$$$$$$.$$

May 08 09:29 AM

[Obi-Wan:]

Don't discount Tesla in the mix. They are working on a 3-tier battery option where you can choose 3 ranges of pure electric power (no gas engine for recharging).
I've got mine on order.....

May 08 09:36 AM

[Sutida:]

My interest in this industry came from our work with VMC Auto and their production of an electric tuk-tuk (tuk-tuks are used as taxis all across Asia from Pakistan to China). VMC was one of Thailand's major Auto manufactures prior to the last financial crisis.

I just had a quick read of the Zero Pollution site, the technology looks amazing and the association they have developed with Tata Motors looks very promising. This would make a great IPO.

On May 07 09:20 PM Sober Realist wrote:

> Sutida,
> Do you have any knowledge on the "air" car:
> zeropollutionmotors.us/
> A future IPO?

May 08 10:22 AM

[Dave K.:]

I think it is smart for car companies to begin the transition to electric power. This positions them to survive the next oil shock, not a matter of if it will happen but when and how severe it will be. Another trend to look for will be companies second sourcing parts closer to the assembly plants to cut down on transportation costs. This means the next oil shock could further erode over seas parts suppliers market share as the cost of shipping erodes their price advantage. A recent study shows that converting Bio-mass to electricity and running electric cars is much more efficient use of the energy rather than making ethanol from it. This again supports electric cars over ICE power. The article is located at www.sciencedaily.com/r... You can extend the principal further in that it is more economical to convert fossil fuels to electric power rather than burn it in an automobile.

The company I work for is developing electrical energy storage 1-LTL.com so some bias may exist with my responses.

May 08 03:49 PM

[TinyTim:]

It's about time other companies are concentrating on all electric plug-in cars. The major automakers are focused on ICE technology, which is why even the Chevy Volt is a hybrid. The only hybrid that makes sense is a "weak" one that is basically a regular ICE car with a small battery and generator to bump MPG using regenerative braking. Other hybrids are just high dollar toys.

All-electrics on the other hand, have the potential to be inexpensive because the drivetrain is simple and cheap. Especially if, as Stan points out "truck fleets will trigger volume production of batteries, which in turn will help lower the cost of electric cars".

So the Feds have an MPG equivalent for plug-in all electrics. LOL. Makes sense that whatever they came out with would be controversial. It's a pretty basic dollars and cents energy conversion dependent on vehicle efficiency and assumed electric / gasoline prices.

My own criteria for an all-electric around town commuter vehicle is that is has to look like a regular subcompact - Corolla/Yaris, Civic/Fit, or Versa, have a top speed of 80MPH (approx 35KW / 47hp) and get 80 miles plus between charges on a continuous 60 mph course. What's so difficult about these specs?
Of course, this isn't a road trip car or a haul the boat car.
There are a lot of DIYers out there converting cars to close to these specs, displaying a hell of a lot of Yankee ingenuity.

Instead we get everything from high performance primo dollar toys like a Tesla or Wrightspeed, to ugly Chinese knockoffs that are probably not importable due to safety regs.

Since Nissan is touting a basic Versa for less than $10K these days, I would expect an all electric version to be $7500. This is what the Feds should be stimulating with incentives and battery warrantys. Whatever it takes. The market should be huge at this price point, which is the problem for carmakers.
So, unfortunately, I think in the near future, some Asian company like Tata will license a battery technology and make a killing.

May 08 06:00 PM

[ripskii:]

All electric cars are presently over hyped because current battery technology cannot store sufficient energy at an affordable cost to provide reasonable range/speeds. Furthermore with 50% of our electrical power supplied by coal burning power plants they don't come close to solving our clean energy problems. The electric grid we now have in place is unable to support the greater loads required were many electric vehicles to tap into the system for recharging.

Even plug-in hybrids have serious deficiencies in that regard. The up to 100 mpg ads are wildly misleading. Check the link for some real world data.

www.wired.com/cars/coo...

May 08 10:36 PM

[TinyTim:]

Actually, hybrids advance battery technology. But it's at the expense of entrepreneurs and consumers rather than the govt, which should be directly stimulating this effort.

May 09 04:17 PM

[TinyTim:]

Rip-
It's pretty much commonly accepted now that despite the amount of coal used to generate electricity, electric cars are far better for the environment.
Electric utilities aren't too concerned about recharging cars. In fact, since they anticipate most recharging to be done at night during off-peak hours, they welcome it as a profit opportunity.

Nice Wired article. I agree that retroing a Prius to plug-in is marginal , as demonstrated by the results. This is because even though it is one of the "strongest" parallel hybrids out there, the ICE still plays a big role.

May 09 04:32 PM