EVS 23 Brain Droppings

Had an opportunity to spend the day down at the Electric Vehicle Symposium last Monday in Anaheim, CA. What follows are some top line observations and some really awful pictures I took with my exceedingly lame camera phone.

Two "Oh Crap" Moments: A number of presentations included some telling projections. For example:

• Current vehicle ownership: 12% of the global population (820 million vehicles). By 2020, it'll be 15% (1 billion vehicles). Highest growth, not surprisingly, will be in the developing world (India, China, Brazil, etc.) That’s 150 million more vehicles on the road in 12 years. Good chance that a large percentage of these will have to be alt fuel.
• California GhG Emissions goals. 80% reduction by 2050. To get there, one scenario
  estimates that 11% of the cars on the road will be gasoline powered ICE. The vast majority will be alt fuel mixed with battery driven electric drive. (BTW, hydrogen was estimated to be ~12%. I doubt it'll even be that much.)

Batteries Will be Ubiquitous: No matter what technology or fuel was being discussed, batteries are invariably the central theme. Now, granted it’s a conference about electric vehicles, so batteries are going to be part of the conversation. That said, the constant attention paid to batteries (chemistry, capabilities, etc.) speaks to the critical role advances in these technologies will play. Not surprisingly, the companies seeking the fill this rapidly growing need were present and accounted for: A123, EnerDel, etc.

First Sign of the Apocalypse Confirmed: In a presentation on the Chevy Volt, GM admitted that they’ve “made some mistakes in the past” related to efficiency technologies. Come to think of it, that probably qualifies as Understatement of the Decade as well...

Legislation Will Impact the Alt Fuel Market From All Directions: Whether it be emissions reduction (e.g. UK Low Emissions Zone around London), spurring innovation (e.g. Austrian Agency for Alternative Propulsion Systems), or other areas, governments will continue to be play a critical role. A combination of legislative carrots and sticks will provide huge opportunities for those companies that are to successfully anticipate and react.

I Get the Feeling China Is Big: No conference today is complete without a discussion about China and the implications of its market. No exception here. An official from the Chinese Ministry of Science and Technology gave a brief talk on the state of EV research and emissions there. Essentially, the combination of a rapidly growing energy gap (resulting from a deficit of oil imports compared to growth in vehicle ownership) and air quality (or lack thereof) mean the government will be playing a very active role in developing and promoting alt fuel and efficiency technology adoption. One way will be through legislation: in 2000, the floor of Chinese vehicle efficiency was 9.5 liters per 100 KM. In 2010, that will drop to 6.7L / 100KM. The expectation is that the Chinese government will be investing heavily in R&D to facilitate necessary breakthroughs. One estimate was the MOST will receive 2.5% of GDP by 2020 (compared to 1.4% todat and under 1% in 1996.)

Tesla Update: The upstart EV car maker had a only a small booth, but had the foresight to put one of their roadsters in it. As a result, their set up regularly out drew the larger manufacturers, including Chevy Volt and the largely ignored Honda FCX Clarity. To be sure, the company still draws considerable buzz, but you get the feeling that there’s a certain antsiness to see these cars on the road after so much hype. At a presentation on the battery system, the Tesla rep pointedly wouldn't address questions regarding the transmission challenges they've been having. Still, he indicated that first deliveries will take place Q1 2008. Also, no warranty info about the battery pack as of yet, but the speculation is that it will be about 5 years / 100K miles driven.

Battery Buzz: Argonne National Labs partnered with EnerDel to research battery technology focusing on lithium Manganese spinel /lithium-titanate chemistry. Findings seem to indicate excellent power capability and life potential for a lower cost than comparatives.... A representative from Japan's Yuasa Corporation gave a technical discussion of their EH6 battery product. Given the reaction from the (very large) audience, there was a high degree of interest in the product. Lots of questions regarding cost, availablity for testing, distribution, etc. No other presenter in the forum had a similar level of interest.

Telsa Starts Getting Its Act Together

The regime of new Tesla Motors CEO Michael Marks (earlier post) has already started to pay dividends .

Back at the beginning of the year, Tesla announced that, in addition to launching a new car company, it was going to into the battery systems market. What, taking on the established old guard automotive industry isn't enough? You also need to pick a fight with the rapidly growing a hyper-competitive new battery technology crowd? Sounded like a two front war... one that would have stretched company resources to the breaking point.

Enter Marks (replacing former CEO Martin Eberhardt) and exit the battery business. In the company blog, Marks makes clear that the focus is on the company's nascent vehicle business.

While tearing up the $43 million contract the company had with Norwegian EV maker Think (careful following the link: annoying audio after the jump) couldn't have been easy, it allows Tesla to concentrate resources on nailing down outstanding issues related to the launch of their roadster and, ultimately, the four doors sedan.

Managment (and Philosophy) Shake up at Tesla

Word today that Tesla Motors is replacing CEO Martin Eberhardt with early stage investor Michael Marks. Marks is currently with leveraged buyout specialists KKR, but prior to that was the CEO of global electronics services provider Flextronics. (FLEX).

A large part of Telsa's success to this point has been in carving out the a design niche that separates their roadster from the nebbish EVs of the past. It's been positioned as a high performance sports car that just happens to run on electricity (don't kid your self that anyone buying this car is doing so to save the environment: this is a "I-got-one-before-you-did" toy.")

With the installation of Marks as CEO, Telsa is, in effect, saying that style is nice, but now it's time to get down to brass tacks. Consider the interview that Marks gave to BusinessWeek a little over two years ago:

"Design no longer is a competitive advantage. Design is a commodity. Yet design in big companies is just as inefficient as manufacturing and supply-chain management used to be. So brand companies might as well buy the designs for their products off the shelf."

So it looks like Tesla's priorities are changing. The approach to the business will apparently be much more rigorous in terms of outsourcing design and manufacturing. Marks certainly has the chops to make this happen: Flextronics grew from a $93 million company in 1993 to a $14.5 billion company in 2004. He undoubtedly has the connections to make this transition effective.

Oh, I'm sure there will be some grumbling that a bit of the company's 'soul' gets demoted along with Eberhardt, but this would appear to be a necessary step in the long term viavblity of the nascent car maker.