Electric cars for the masses: A tough equation

The following is a guest article by Mark Charmer of The Movement Design Bureau, who’s on the ground this week in Detroit:

Making affordable electric cars for the masses is one tough equation, explains Nancy Gioia. Ford’s director of Sustainable Mobility Technologies and Hybrid Vehicle Programme. (Note: You can check out the full video interview below.)

Despite at least $300 million in tax credits being awarded last week to companies making lithium-ion EV batteries in Michigan, and a £250 million ($363 million) plan by the UK Government to incentivise each electric vehicle purchase to the tune of £5,000 from 2011, there’s a steep hill to climb.

“At the end of the day, if there isn’t a sustainable, economic business model for everyone in the chain, then it won’t work,” says Gioia. “The models by which we have approached the business in the past may have to totally change in order to get there.”

She continues, “Working with battery suppliers and manufacturers is a bit of chicken and egg scenario. Until you have a reasonable market and growth, the amount of cost to install capacity and do the development is an issue. We now feel we have enough data to say that, for electric vehicles, the batteries meet the durability life requirements. So that’s a big plus.”

All of Ford’s mass-market platforms are being rapidly engineered to accept multiple powertrain options, with partnerships underway to have new-tech petrol, hybrid, plug-in hybrid and full battery electric vehicles all available in its key products within the next few years. Gioia stresses Ford is focusing its resources on engineering these high volume platforms. Its C-sized (Focus) and D-sized (Mondeo) vehicles already have US hybrid models in the form of the Escape/Mariner and Fusion/Milan. Its first electric truck — the Transit Connect van, also on its C-platform — will be launched in 2010, with a helping hand from partner Smith Electric in Newcastle. It’ll be built in a plant in Kansas City.

Gioia stresses that getting the technology there is one thing, but having it be affordable is another.

“£5,000 towards an electric vehicle in the UK is great,” she says. “But how do you ever wean yourself off that? One of my concerns is policy needs to address three areas. One is for the customer — to help them on affordability. Another is to help battery manufacturers, installing capacity, overcoming the initial investment hurdle. The state of Michigan just made four $100 million awards — it’s very important to get manufacturing capability for battery electric cells set up.

“The third area, which I haven’t seen emerge yet in policy, is that it costs a lot to design, develop and put in place these vehicles. So the development costs of that are high. That’s the automotive manufacturers. So what we’re saying is that there needs to be recognition that if we want to accelerate these to be mass market and commercially available, then we also need to invest in that. And we need help with that initial upload of investment. Because then we can get scale, and scale would be the best way to get the cost down.”