Guest Column: Automotive Tinkerers and the Battery

By Sasha Meyer

The papers and magazines have been filled the last several days with talk of the return of all-electric and high-mileage hybrid cars. One main reason is this week's North American International Auto Show in Detroit. But there also simply seems to be a lot going on.

Eric Hagerman at Wired magazine offers up a cover story on the role of the $10 million X Prize in getting inventors jazzed about producing a 100 mpg vehicle. It includes a video of one of the entrants, called Aptera.

Micheline Maynard at The New York Times had a piece yesterday on a new plug-in hybrid planned by Toyota for 2010.

And Steven Ashley at Scientific American has an article on work at institutions like Brookhaven National Laboratory and Saint Louis University to get past the obstacles to truly effective hydrogen and solar-powered fuel cells.

Of course, a true return of plug-in vehicles -- the kind you can leave in your garage and charge up overnight in your ordinary household plug -- would require a breakthrough in battery technology. Stanford University says it's got one such advance. The Palo Alto campus says scientists there have produced lithium-ion batteries that generate ten times more electricity than existing batteries. That they are putting mature and well-understood technologies to a new use bodes well for its fast commercialization. We are talking cell-phone, laptop and automobile uses.

Tesla Motors is getting perhaps more attention than any of the startups. David Welch wrote a glowing piece, for instance, in Business Week during the summer. Tesla's investors include Elon Musk whose previous venture was PayPal; Larry Page and Sergey Brin of Google; and former eBay president Jeff Skoll.

Tesla already makes cars that run only on electricity, using li-on batteries. Unlike traditional car makers that have tried to introduce the new car technology as a mass market product (for example GM's EV1, Honda's EV Plus and Toyota's RAV4 EV), Tesla is starting upmarket, with a plan for moving to the average consumer in a few years. Arnold Swarzenegger and George Clooney are among its first customers. This is a trajectory common in electronics where products - PCs, cell-phones, DVD players, etc – start out as luxury items and later become commodities. As a result, Tesla has so far succeeded where others have failed.

Tesla's first product is the Tesla Roadster. It matches or even beats conventional sports cars with its acceleration (0-60 mph in 4 seconds), speed (125 mph) and looks. Its range on a single charge (250 miles) finally makes the electric car a meaningful transportation option.

It's expensive, at $100,000. Yet the first batch of 100 vehicles sold out within three weeks. It has been pre-ordered by 550 more buyers, and there’s a waiting list. Tesla's next model – White Star – is a family sedan expected to be unveiled in the first half of this year and cost $50,000. Finally, the mass-market product – Blue Star – is slated to arrive in 2012 with a still-considerable price tag of $30,000.

Tesla says these cars can be recharged at home in as little as 3.5 hours. If true, that will accord them a huge advantage over alternative fuel vehicles as their "fuel distribution network" is even more ubiquitous than gas stations.

There are no real trade secrets here. How to make the car body, the electric motor and the batteries are well-known processes. Moreover, most of the tasks can be outsourced to specialist firms. For example, Tesla's batteries are made by the same companies that make laptop and other batteries. The electric-drive system incorporates technology patented by AC Propulsion, a Los Angeles-area company started by Alan Cocconi. The car is assembled by Lotus.

Of course, the kind of improvement touted at Stanford means Tesla -- and its rivals -- can either make their cars more affordable (by reducing the physical size of the battery) or increase their range by an order of magnitude, thus making the electric car even more competitive vis-a-vis internal combustion engine vehicles.

In the end, I think that Detroit is dragging its feet. Making and selling conventional cars is still very profitable. Why should they cannibalize this profitable line of business? That’s why the genuine breakthrough will come from startups that aren't part of the auto industry. Tesla isn't necessarily the best. It just happens to be further down the road than the rest. They will catch up soon.