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Does it make sense to invest in electric vehicle startups? That is a question that only the individual investor can answer for him or herself. Nonetheless, our friend Jim Motavalli tries to provide a bit of guidance on the subject even though investing in an emerging segment like electric cars, where success is still far from assured.

As with any other area, the early adopters of electric vehicles are extremely enthusiastic about the cars and sweep aside any concerns about range anxiety, battery durability or cost. However, we can't know how more mainstream consumers will accept this nascent segment until there are tens of thousands on the road, something that will happen in the next two to three years. Take a look at Motavalli's analysis and let us know what you think.



[Source: BNet]


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    • 1 Second Ago
  • 27 Comments
      • 4 Years Ago
      - "If you don’t include the subsidies I mention above (again, some are only available in a few states) you’ll pay $30,000 for a Corolla-sized car with about half the range. "

      I didn't know the $7,500 "FEDERAL" tax credit could be denied by a few states. what a crock.

      - "EV proponents claim that 80 percent of charging will be at home, but that’s just a theory untested in the real world."

      Yeah... a theory with no basis. /s Only that people tend to go the cheapest and/or the most convenient route... and electricity will surely be cheapest at night in the home.

      --------------------------------

      - "Daily, I’m told of breakthroughs with fuel cells and low-cost hydrogen, with biofuels such as cellulosic ethanol, with ultracapacitors, that could make the early EVs obsolete before they’re even on the road. Fuel cells may have been 20 years away for the last 50 years, but Toyota will have one on the road in 2015, and an East Coast entrepreneur, Tom Sullivan, is building a Maine-to-Miami “hydrogen highway” (and trying to convince the world with full-page ads in the New York Times). Fuel-cell cars offer greater range than battery EVs, and hydrogen is an unlimited source."

      So they are skeptical of the claims of electric car advocates within the next 1 - 5 years... but are optimistic of claims of hydrogen advocates 5 - 10 years out??

      If hydrogen is "unlimited", then "electricity" from the grid is too.

      - "but Toyota will have one on the road in 2015"

      Yeah, one! Car not model. If the oil and energy companies don't build a hydrogen fueling "infrastructure network of sufficient density by 2015"... automakers won't build any for production, not past 1,000 units anyway.

        • 1 Month Ago
        David Martin, electric motors don't "degrade" in power, so they must be referring to the power output of those fuel cells. So, that 100 Kw (135 hp) fuel cell will slowly degrade down to 80 Kw (108 hp) - or possibly less. But it is nice to hear that they've improved longevity past the 80K miles now common to PEM fuel cell prototype vehicles.

        H2 fuel will only be cheaper than petrol (on a per mile basis) if petroleum fuels are highly taxed and H2 is subsidized - but electricity will still be a far cheaper "fuel", and there are a lot more electrical outlets and charging places in Korea than the mere 40 H2 stations planned to be built, eventually.

        Even in Korea, there will be plug-ins for sale before any H2 vehicles, and in far greater numbers. Even HMC is planning plug-in models.
        • 1 Month Ago
        Hey East Coast Entrepreneurs, feel free to invest all you want in hydrogen highways and H2 fueling infrastructure. I don't mind a bit, as long as none of you is getting even a penny of my tax dollars.

        You want fuel cells and hydrogen highways? You pay for it. There will be enough suckers willing to be locked in to a tightly controlled supply channel for the hydrogen fuel. If that works for them then fine. I'm sure you'll make a killing off those fools and I will have no sympathy for them when the price spikes up to the stratosphere on a regular recurring basis just like gasoline does now (ooh, there was a supply disruption or a refinery out for scheduled maintenance). So, please feel free to pay 100% of the cost for the fuel cells and FCV cars and the infrastructure.

        Me? I'll be driving my electric vehicle past all the remaining gas stations and whatever hydrogen fueling stations there may (or may not) ever be. I'll smile and wave to the customers who wish they'd never bought a fuel cell vehicle, looking at their wallets and gritting their teeth.
        • 1 Month Ago
        Petroleum is Unlimited too...

        It just takes millions of years to renew.

        ------------

        It is really unfortunate that a single ignorant statement, "hydrogen is an unlimited resource" can discredit the author so easily. But it kinda does.
        • 1 Month Ago
        "H2 is an unlimited resource"

        HA! that's rich!

        If he can seriously make that claim, then everyone can make the claim that electrons are an unlimited resource too...
        • 1 Month Ago
        @miles
        You'll be surprised how many people genuinely believe this (or maybe not). With hydrogen being a gas (described as a fuel and dispensed like one), people don't realize it is a carrier and isn't readily available naturally. "Hydrogen is the most abundant element in the universe" is commonly thrown out by the media (recently mentioned by the Governator). "Hydrogen can be made easily from seawater" is thrown out by Top Gear. All of this made up an image of hydrogen being the ideal future fuel that can solve all our problems and made people content with waiting for it.

        However, whenever electricity is brought up, these same people think they are clever when they point out coal plants.
        • 1 Month Ago
        'Yeah, one! Car not model. If the oil and energy companies don't build a hydrogen fueling "infrastructure network of sufficient density by 2015"... automakers won't build any for production, not past 1,000 units anyway.'

        For the Koreans we are not talking about 2015, but 2012, with production of 1,000 a year:
        'Dr Kim said: "We are already achieving more than 400 miles on a single tank of hydrogen and we plan to start producing about 1,000 vehicles a year from 2012 and 10,000 annually from 2015."
        And:
        'In South Korea 40 hydrogen fuelling stations are being set up around the country although the infrastructure issue there is easier to solve.'
        And:
        'As for durability, HMG is targeting a 10-year life span although Dr Kim said tests had shown the fuel cells generally last longer.

        The electric motor will generate around 100 kilowatts of power although Dr Kim said they will degrade by about 20 per cent in the first few years. "This is not a problem. Cars on the road today use only around 10-15 kilowatts in normal driving and perhaps 30-35kw on the motorway. Full power is only needed for very fast acceleration.

        "Generally the cost of ownership should be lower than conventional internal combustion engines. The fuel is cheaper, you don’t need to put oil in them and they are easy to maintain."'

        http://www.thegreencarwebsite.co.uk/blog/index.php/2010/05/26/an-interview-with-dr-sae-hoon-kim-of-hyundai-kia-eco-tech-research-institute/
      • 4 Years Ago
      The Reason Long Term Investment in Electric Car Companies will be benificalis because when batteries reach critical mass (meaning when batteries are more a dual purpose thing, you can use your car battery as backup generation or wind firming for the grid) then the consumer will have no use for a uni-tasking gasoline engine. The consumer will see multi-modal use Orv Vehicle to gird use of their investment making the cost of electric cars rise, (more dough in your their pocket) as if they are not high enough, but less of a fashion statement and more a necessity for power and transport
      • 4 Years Ago
      I think the Leaf is a bigger threat to EV startups than anything else. With the Leaf, it becomes much harder for startups to compete on price. The only way is to target a more premium market, like Tesla and Fisker is doing (however, if Nissan finishes the Inifiniti EV development, this might change also).
      • 1 Month Ago
      miles 7:37PM (6/09/2010)

      "H2 is an unlimited resource"

      HA! that's rich!

      If he can seriously make that claim, then everyone can make the claim that electrons are an unlimited resource too...

      That is correct. The current restrictions in thermodynamic physics are hastening disclosures in hydrogen cosmology. Were these restrictions totally eliminated we would get the results we want.
      • 1 Month Ago
      I wouldn't rely on electric vehicle investments for the sole source of your retirement, but I invested my tax return in Nissan due to their leadership position on EV's. Nissan's stock was also somewhat undervalued, so it made investment sense anyway. However, what made me chose them over other options was their support of electric vehicles.

      In terms of investments, I would also look at people involved in infrastructure development. Aerovironment (in partnership with Nissan to make chargering stations) and GE (in partnership with Nissan for ev grid integration) are two other places I've been looking at. Both have products not related to EV's (Military drones and... well it's GE- they basically have their hands in everything) and are solid investments. I was also looking at investing in Kaneka, as I like the price/performance of their solar panels (which could be used to charge an EV).

      Investments in startups is always risky. You could make a lot of money or lose it all... But really, I feel better about potentially losing my money to promote new technologies that could move the economy forward rather than donating it to some charities that concentrate on compensating for the ramifications of economic failure (i.e., giving money to the poor). So I really don't feel bad investing small amounts of money (that I can afford to lose) in the speculative technologies I believe in.
      • 4 Years Ago
      Investing in small, in car industry terms, start ups is as dangerous as ever.
      Nissan/Renault , the premier investor in EVs, has most of it's turnover and money in ICE cars.
      Even if they hit 500,000 by 2015, that is only around 10% of their turnover.
      There are a lot of start-up US battery manufacturers, but how many seriously think they will take Toshiba and AESC?
      Pure EV plays are not only about electric cars, but about the small boys taking on the big.
      God is on the side of the big battalions, usually.
        • 1 Month Ago
        Yes... I downloaded those yesterday..

        My favourite is the screen that tells you how many extra km you get by turning off the A/C
        • 1 Month Ago
        At around $5 sq ft then it might cost around $300 or so to put an aerogel layer in car panels for materials, although no doubt the car companies could get them cheaper in bulk.
        You still have heat escaping from the glazed areas though, so what the cost trade-offs are is difficult to say if you only reduced heat losses by 50% it might not be worth it.
        • 1 Month Ago
        Well, the Leaf will have cabin pre-heating using grid power... so hopefully they also have a well insulated cabin.

        But you're right. Electrical resistive heating coils are a huge power drain.

        It is funny, coil heaters are not inefficient.. it is just that normal ICE cars are heated from waste heat from the engine.. so it seems to be free.

        I suppose I would like an aftermarket product that can be installed as a module to supplement the coil heating... if the EV is sold in a cold climate. That way the automaker can still claim "zero emissions" and drivers can use normal electric heating when they aren't trying to push range to it's limits.

        • 1 Month Ago
        Have a browse of these, Joe. There is a lot of interesting stuff in them, but also somewhere a breakdown of how much of the energy is used for heating/cooling:
        http://www.nissan-newsroom.com/JPN/en/PRODUCTS/ZEROEMISSION/images/01/NNR/100611/leaf_presen_100611-04.pdf
        http://www.nissan-newsroom.com/JPN/en/PRODUCTS/ZEROEMISSION/images/01/NNR/100611/leaf_presen_100611-05.pdf
        http://www.nissan-newsroom.com/JPN/en/PRODUCTS/ZEROEMISSION/images/01/NNR/100611/leaf_presen_100611-06.pdf

        Renault have interesting ideas, including using vacuum-evacuated panels in the Kangoo - it is not clear if that will make it into production - it sounds expensive to me.
        I'd like to see the use of aerogel, which is still a bit expensive for housing other than to wrap the ends of joists etc, but might come in at an acceptable cost for cars.
        With that in the panels, a pre-heat should keep the car warm, providing you were not opening and closing the doors too much.

        • 1 Month Ago
        Okay... thanks for you input.

        I really haven't seen any hard data about how different temperatures directly affect range. I am sure it would be significant..,.

        But there are many "tricks" to keep a battery pack at proper temperature. Insulation, grid powered warmers BEFORE unplugging... and of course small fuel heaters.

        There are a lot of misconceptions. Some people have been saying 10% loss in below freezing weather... and some are being very pessimistic (50% loss if you can see your breath). Those are usually baseless.

        But I would love to see a chart for one of the current BEVs that list EPA rated range based on ambient temps. Does this exist?
        • 1 Month Ago
        'Has any automaker thought of offering different battery chemistries based on climates. For instance... a the Nissan pack may have better range in temperate climates.. but those batteries might suffer when cold.'

        Nah, manufacturers pretty much have to stay with whatever battery chemistry they use - the investment is too large, the research commitments too great, and there may be patent concerns to swap around too much.
        Some car makers like VW though are battery-agnostic, and may offer different batteries by market.
        Concerns about temperature may be overblown though, with decent engineering.
        The Prius uses clever warmers, and whatever may be the case for the brakes, has attracted no criticism AFAIK for not working in the cold.
        The Thi!nk was designed for Norway, and uses a kerosene heater.
        Concern about both cost and energy density for lithium titanate batteries were based mostly on Altairnano.
        Toshiba seems to have overcome both problems.
        They have hit 100wh/kg now, and are shooting for 150wh/kg.
        If that is the case I would sooner have their 20 year plus battery than Nissan's manganese chemistry, even though the temperature does not get much below zero here very often, and the manganese/cobalt chemistry Nissan is going for in the next generation may be a bit more energy dense.
        • 1 Month Ago
        No. You have it backwards. God is ALWAYS on the side of the little guys. Why? Because He's already got the big ones.

        • 1 Month Ago
        Yeah... it is not because they are an EV company that makes it very "speculative"... although that makes it worse... but because they are a startup automaker.

        When did the last successful auto company in the U.S., startup?

        -----

        I asked a question of you here:
        http://green.autoblog.com/2010/06/09/canadas-date-with-electric-vehicle-destiny-looks-to-be-2012/1#c28531316

        but I don't know if you have stopped looking at that page.
        • 1 Month Ago
        The problem for range and cold weather is mostly the drain for cabin heating rather than in the battery performance.
        The Prius with it's NiMH battery has successfully engineered it's way around cold weather, and lithium batteries perform far better in the cold - as photographers have known for years:
        'Lithium AAs won't outlast alkaline, with equivalent power of 2900mAh but with a flat discharge curve. Operating range is down to -40degF and shelf life is 10+ years. They're significantly better at low temperature; at -5degF their service life only is decreased by 20% and output decreases slowly as the temperature drops. '
        http://wintertrekking.com/index.php?topic=246.0

        The only battery chemistry I have firm data for is the Toshiba SCiB, which is so awesome in every respect that they are not shy of publishing the specs:
        http://www.toshiba.com/ind/data/tag_files/SCiB_Brochure_5383.pdf

        As can be seen, you still get 85% of the performance down to -30C.
        If you use a few tricks common in cold climates like charging in a heated garage and perhaps, for very, very cold places having some sort of warmer then they should at least perform as well as ICE for most chemistries, and for lithium titanate better.

        Range in cold weather will still be impacted heavily though due to cabin heating, unless the solution used by Th!nk is used, of a kerosene heater.
      • 4 Years Ago
      There are a couple of gems in the EV world and quite a few lumps of coal, valuation-wise and future prospects-wise.

      I would have no qualms about investing in Tesla and Fisker on the EV side and EnerDel and A123 on the battery side - to name a few. I would stay away from companies that have changed their business plan a bunch of times in the past 5 years. I would stay away from companies that promise that their ultracapacitor will be super-duper great and should be ready "any year now" like that one company - who shall remain nameless.

      It's a moot point anyway. We can't invest in any of them until after they have their IPO. The "real" money is made by the venture capitalists who get in at the bottom. That is also where almost all of the risk is as well. Take the good with the bad.
        • 1 Month Ago
        - "I would stay away from companies that promise that their ultracapacitor will be super-duper great and should be ready "any year now" like that one company - who shall remain nameless."

        Voldemorteestor?
      • 4 Years Ago
      I think you are exactly right. I'm still going to invest in Tesla anyway. Maybe not a lot. But I will buy some just on principle.

      In my mind it's still a toss up whether you'd be throwing more money away buying a Roadster or investing the same amount in their stock. I guess we'll see.
      • 4 Years Ago
      I'd say it's simple, you look at the individual companies' merits rather than make blanketed conclusions because they are EV companies. sure there is momentum for EVs that will only get dramatically stronger in a few years. but I wouldn't touch Tesla with a 60 foot pole unless you fully understand the IPO dynamics and see that it can offset what appears to be a bad income to expense ratio so far. the model S, should it ever happen doesn't to me look like a sure thing at all. imo it's going the wrong direction with high weight and no quick charge or range extender but just maybe I'm underestimating the enthusiasm for pure EV in the silent masses. I sort of doubt it.

      if Fisker actually makes cars I like the karma better for the range extender convenience. I figure that has to translate to consumer interest. although that's not worth much if they can't make a profit on each car. that I don't know but I'd guess yes.

      Aptera is a dead wingless bird with morons in charge it seems. only a federal loan seems to give them even a small chance at this point.

      Nissan will probably be fine, there should be enough fleets, municipalities, ethusiasts and second car purschases for that to fly at least initially. but Nissan is much bigger than the Leaf so stock wont explode no matter how succesful, at least at first. a good start might make the stock rise beyond merit in anticipation of leadership though. might be ok to buy right now.

      I know too little about Coda to say. as is I wouldn't touch it. they haven't profiled themselves enough it seems and it could be a huge flop, especially if they go with the ridiculous high 30s price point. too boring looking and too unknown I'd say. but maybe they've done their homework. wouldn't count on it.

      the wheego is a heavy NEV. I'm thinking no. unless their are so many tax rebates that it's virtually free..

      if Bollere Bluecar get in gear and set a good price they might be interesting too.

      in general though I'd guess that car makers are not good investments

      a serious company bringing a good looking ultra light ultra aerodynamic EV could be huge though. it could kill them all, not just in the EV sector.
        • 1 Month Ago
        It is ironic that the only company on your list that actually plans to make "a good looking ultra light ultra aerodynamic EV" is the same one you pan as "a dead wingless bird with morons in charge".
        • 1 Month Ago
        not exactly a huge irony though. it was started on a good premise. a super douche frmo detroit took over and ran it into the ground.

        and while I agree with the premise of aptera I wouldn't design it like that at all. good aerodynamic designs have been demonstrated many times before, the EV1 is good, the GM ultralite is good, solectria sunrise, ford probe concept etc
        I consider the aptera interesting but it's not to my vision
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