As history shows, the cost to bring disruptive technologies to market is usually steep; but as consumer adoption and demand grow, prices drop.   From an ecological, economic, energy supply, and national security standpoint, we cannot wait 10 to 15 years for electric cars.  We need affordable electric vehicles now.

It’s not a question of when; all electric, green cars are coming this year.  It’s a question of how.

How do we, as an industry, help consumers overcome the price barrier that exists with this technology so that we can accelerate the widespread adoption of all electric cars?

CODA Automotive conducted extensive consumer insights research and analysis, which indicates that one of the highest impact ways to answer that question and move America into the electric car era is to change the $7,500 Federal tax credit program that is already in place for plug-In vehicles to an instant cash rebate program.

Similar to the 2009 Cash for Clunkers (CARS) program, which resulted in nearly 700,000 new vehicles sold during its eight-week run, a $7,500 instant cash rebate would be paid to retailers at the time of sale.  This would provide immediate price relief, reducing the upfront cost to the buyer.  While the concept behind the current program (making electric cars more affordable to more people) is a good one, it doesn’t work as a tax credit.

Most Americans think in short term, monthly payments.  A tax credit is not something they would see immediately and doesn’t help if they’re financing the car.  For instance, with the tax credit program a consumer who finances a $40,000 electric car over a 5-year term, would pay about $150 more per month and accrue nearly $1,300 more in interest payments over the course of their loan than if the program gave them an instant cash rebate.  That’s $10,300 more a consumer would pay over the course of five years.

Plug-In Vehicle Finance Transaction (60 Month Term)

*California will likely apply sales tax before deductions

Based on CODA Automotive’s extensive consumer research, restructuring the current Federal tax credit program to be an instant cash rebate would nearly triple demand for all electric cars in 2010-2011.  This would also allow CODA Automotive to price its all electric car, with touch screen navigation, on-board telematics, Bluetooth connectivity, and satellite radio capabilities, in the low $30,000-range or below, or simply put similar to a fully loaded Toyota Prius.  We believe this lower upfront price, coupled with electric cars’ lower total cost of ownership, will attract a broader range of customers and quickly spur the adoption of all-electric vehicles.

While others (including Darryl Siry and former New York Governor George Pataki) have pointed to the benefits of changing the tax credit to an upfront rebate, we believe it is the manufacturers’ responsibility to advocate for this change.  That’s why CODA Automotive is actively meeting with legislators to explain the real benefits of changing the basis of the plug-in vehicle tax credit program to one that is truly beneficial to consumers and a catalyst for initial sales of all-electric vehicles.

With so much buzz about electric cars being the future of the auto industry, there is a concern among consumers about how electric cars operate and what habits, if any, drivers will need to change when they make the switch to electric motoring.  One common question we are asked is, “What if I forget to charge my car and run out of juice in the middle of rush hour traffic on the freeway?”

People are used to driving their cars long after the empty light turns on – most people could even tell you exactly how many miles they can go before their tank completely runs dry.  The idea of charging up a car instead of filling up is foreign to most people, so it’s natural to be concerned about what happens in an electric car when the juice runs out.

These concerns are understandable, but running out of charge in a CODA is very similar to running out of gas in a gas-engine car.  In both instances there are many warning signs before the car’s wheels stop rolling.

The CODA is engineered to maximize the life of the battery by not fully draining the battery every drive cycle.  However, if you are in a situation where you simply forgot to recharge, the CODA has a system in place to maximize range (miles per charge) as the state of charge (SOC) nears zero.

When the CODA gets to about 15% SOC, a three-stage, orderly reduction of power begins which helps to maximize range and avoid high power draws from the nearly empty battery.  In the first stage, the driver can continue driving at maximum speed (80 mph) but acceleration is limited, meaning the car may feel a bit sluggish when trying to speed up.  In the second stage, acceleration and power are limited, allowing a top speed of ~60 mph.  In the third and final stage, acceleration and power are limited, allowing a top speed of ~35 mph.

With each stage lasting ~5 miles, the driver has ~15 miles to get out of traffic and pull over to safety.  At each stage, the CODA’s telematics and in-dash screen alerts will help to indicate to the driver that they should pull over.  The moral of the story is that drivers should plug-in regularly to avoid this situation, but they do forget there is ample time to find a suitable place to pull off to the side of the road.

There’s a new topic that is creeping up in the media – from personal blogs all the way up to national dailies – and it’s only going to get bigger.  What is it that has hard working Americans across the country worked up?  China.

The fear that China is going to “beat” America is a growing concern that seems to cross all industries.  Green technology is no exception.  So it’s no surprise that when President Obama and President Hu Jintao announced the launch of the U.S.-China Electric Vehicles Initiative, those engaging in China fear mongering didn’t report about this collaborative partnership that aims to “reduce oil dependence, cut greenhouse gas emissions and promote economic growth” through various joint activities including:  standards development, demonstrations, a technical roadmap, and public education.

The reality is that we’re addicted to oil, blue skies are hidden behind a film of gray-brown smog, and health issues caused by air pollution are soaring.  We shouldn’t fear that China will “win,” we should fear that we all will lose because we’ve created an environment that is unlivable for future generations.  Consider:

- Together, the U.S. and China posses ~37 billion barrels of oil, less than 3% of the world’s total proven oil reserves, but guzzle nearly 28,000,000 barrels of oil per day, ~33% of the total barrels of oil consumed globally per day.

- Together, the U.S. and China are the two largest producers of carbon emissions, contributing nearly half of the world’s total CO₂ emissions.

As one of the two countries that have played the largest role in accelerating global climate change and environmental degradation, it is our responsibility to find ways to work with China to reverse the collision course we’re on.  The U.S.-China Electric Vehicle Initiative is a momentous step in the right direction for both countries and shows a willingness on both sides to cooperate.

David Sandalow, Assistant Secretary of Energy for Policy and International Affairs, put the issue of U.S.-China collaboration into perspective in Thomas Friedman’s “The New Sputnik” opinion piece when he said, “If they [China] invest in 21st-century technologies and we invest in 20th-century technologies, they’ll win … If we both invest in 21st-century technologies, challenging each other, we all win.”

U.S.-based companies need to partner in mutually beneficial ways with China to develop and bring to market green technologies.  We’re already doing this.  Our focus is on building jobs and an industrial base in both the U.S. and China to speed up the adoption of electric cars.  We think that’s the real win-win.

So, we’re embracing the idea of global collaboration, not competition, at the very core of our business model.  In fact, Kevin Czinger, President and CEO of CODA, participated as one of the U.S. delegates in the U.S.-China Electric Vehicles Forum in September to discuss CODA’s “Invented in America, Built Globally” model.  CODA is existing proof that the U.S. and China are both serious about cutting carbon emissions, and can work together to do it.

As a nimble, growing electric car company, we took issue with David Welch’s recent BusinessWeek article on the Energy Department’s funding of two green car start-ups, Tesla and Fisker.  Not that we weren’t just as baffled as the rest of America about why the Energy Department would give nearly a billion dollars – $993 million to be exact – to  companies that are building cars likely to be out of the price range of the majority of the population.  We were.  But, that wasn’t the point the story was making.

In the article, veteran auto industry analyst Maryann Keller said in response to DOE’s announcement, “We’re pouring $1 billion into two companies without a future.  The economics of the industry favors large companies.”

The idea that smaller companies can’t be successful and therefore won’t lead the revolution in alternative transportation is what we take issue with.  Within the past year, two of the three big, domestic auto companies went into bankruptcy and dealer sales tanked.  If that doesn’t say the auto industry needs a fresh breath of air from smaller players with disruptive models that aren’t confined by the bureaucracy of large corporations, then we don’t know what does.

Between rising carbon emission-related environmental degradation, Americans’ anti-oil sentiments, and the lack of alternative options, the market desperately needs innovative, nimble companies, like CODA Automotive, that can move quickly to shift expectations and get electric cars on the market that meet drivers’ needs and are better to the environment.

It’s hard for us to believe that one of the industry giants will do this – especially considering their businesses were founded on and  are still concretely rooted in the production of internal combustion, gas guzzling vehicles.

With all of this talk about range anxiety, its completely understandable that people are a little stressed out just thinking about replacing their familiar gas guzzlers with an emissions free electric car.

We get it.  It’s new and it’s unfamiliar.  So there’s a lot to think through, but that doesn’t mean you should discount them so soon.  In his October 20^th post, Gas2.0 Editor Nick Chambers points out a compelling statistic:  according to the 2001 US Department of Transportation National Household Travel Survey (NHTS), the average person drives their personal vehicle less than 23 miles a day, which is more than covered by the CODA’s minimum 90 mile range.

Still, the questions persist, “What if I want to go on a road trip over the weekend? Or what if an emergency comes up and I need to drive further than I normally do?”

These concerns are understandable, but perhaps a bit irrational.  Nick may have put it best, “So, if the average person drives a quarter of the distance an electric car is capable of going in a given day, why do people still say that they aren’t practical? It certainly isn’t a feeling based in how people actually use their cars. No, it’s more of a feeling based on our obsession with risk aversion—trying to avoid potential problems even if those problems don’t crop up during 95% of the rest of our lives.”

Our solution?  A hybrid garage.  No, we don’t mean a garage of hybrid vehicles.  What we mean is a garage with a CODA electric car for every day commuting and a conventional car (that gets high gas mileage, please) that will get you where you need to go on those rare occasions when you need more than your 90-120 mile CODA range.  And since most US households (92%) already have two vehicles, the idea of having two different cars for different purposes shouldn’t be news to anyone.

The Lux Research report published this month paints a less-than-rosy picture for the rate of adoption for electric cars.  The Wall Street Journal’s Keith Johnson gives a comprehensive overview of the study in his October 7^th story, “Speed Bump:  Don’t Bank on Electric-Car Revolution, Lux Says.”

The Lux report claims a much slower growth rate for plug-in vehicles over the next decade than industry expectations, with an estimated 3-8% market share of global new-car sales by 2020.  The study cites the leveling off of oil prices and a slow decline of battery prices to keep the cost of electric cars high.

We think the study neglects two very important influencers that will factor into people’s purchasing decisions: 1) lower total cost of ownership and 2) people’s desire to do right by the environment.

Total Cost of Ownership Factor

While the cost of electric car batteries may be high right now, commercialization of battery systems and increased production will bring the per kilowatt hour price down, which in turn will lower the cost of electric cars.  Even the Lux report estimates that battery prices could go down by 30-40% by 2020, which could lead to significant reductions in EV price points.  Beyond the battery, driving an electric car over a gas car would save people thousands of dollars in operating and maintenance costs each year.  Below is a comparison of potential savings between a gas car and the CODA electric car:

Assumptions:

• Price per gallon – $3
• Annual miles driven – 15,000
• Conventional mileage – 21 mpg
• Watt-hours per mile of battery – 300
• Mileage per kilowatt hour – 4 miles
• Electricity cost per kilowatt hour – $0.07

Environmental Factor

The Lux report completely ignores consumer’s increasing desire for products that help them reduce their carbon footprint.  In 2007, the Alliance for Climate Change and Roper Reports found that only 28% of Americans are environmentally uninterested.  Of those that are interested in protecting the environment, 13% can be categorized as “selfless greens” – meaning, they are willing to change their behaviors and sacrifice for the environment.  That’s about 40 million Americans who probably dislike “big oil” and would actively try to change their lifestyle to protect the environment.

Saving money and the environment?  We think the Lux report underestimates how much demand there will be for electric cars once Americans understand the economics and environmental rewards.

The pessimists are at it again.  Last week Reuters ran a story suggesting electric cars still have a long way to go before they’re the “perfect solution” to our country’s transportation-related pollution woes.

Why wait for the perfect solution when a good solution with the room to grow into the perfect solution is already here?

The Reuters story quotes Jared Cohon, the chair of a National Research Council report dubbed “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use,” as saying, “For electric vehicles to become a major green alternative, the power fuel mix has to move away from coal, or cleaner coal technologies have to be developed.”

We don’t dispute that the use of cleaner technologies is better, but what is missing from Reuters’ assessment is the fact that this ball is already rolling.  In California, for instance, only about 18% of the total electricity system power comes from coal plants and nearly 82% comes from a combination of large hydro, natural gas, nuclear, and renewable sources.  Today, coal-fired plants contribute less than 50% of the Nation’s electric power.

Even if the fuel production process for a gas car versus an electric car (refinement of gasoline and production of electricity) are net neutral in terms of total carbon emissions produced, we think driving an electric car is still a better option.   The total greenhouse gases created from charging and driving a battery electric car are less than those created from fueling and driving a gas engine car because electric motors are inherently much more efficient than internal combustion engines.  You see, the CODA electric motor is about 95% efficient while the typical internal combustion engine is about 20% efficient.   With only 20% efficiency, most of the gasoline burned in an internal combustion engine vehicle is emitted from the tailpipe rather than used as propulsion energy.  Less efficiency means more pollution.

So, while there is room to improve the level of upstream greenhouse gas emissions created when generating electricity, electric vehicles are still the cleaner solution.

Double Grammy-winning nerd rock band, They Might Be Giants, is instilling the virtues of clean transportation in a generation that likely can’t even drive yet.  With nearly 120,000 views on YouTube in two months, TMBG’s “Electric Car” music video, although a bit quirky, is an inspired creative proclamation about an optimistic future of zero emissions driving.

Lyrics like “On roads so dark, to change the end, rewrite the start” point to the more than century-long struggle the electric car has had to come out on top against it’s gasoline counterpart.

Interestingly, the bands manager of 20 years, Jamie Kitman, is also a columnist for Automobile Magazine and BBC’s Top Gear Magazine.  In an interview with the Los Angeles Times, Kitman alluded to the hopefulness of the song and anticipated reception by a younger audience, “I think young people these days are reflecting more optimism in general for the environment than we ever did as youngsters.”

Let’s hope songs with messages like this one continue to permeate mainstream media and entertainment and influence the future leaders of our country to rally behind clean technology.

There’s a lot of buzz following the Business of Plugging In conference in Detroit about mass adoption of electric cars and the impact it will have on the grid.

On a panel, Chairman of Edison Electric Institute Anthony Earley said, “The beauty of electricity is it’s already there … So we’ve kind of got a jump-start” – meaning it’s not a huge infrastructure overhaul to build charging stations.

But when asked about overloading the grid with too many EVs he said, “The last thing you want is millions of electric vehicles plugged in at 5 o’clock on a hot summer afternoon when the grid is already being taxed.

Mr. Earley may have missed the mark, slightly.  The beauty of electricity is not only that it’s already here, but also that it’s available 24 hours a day.  Electric cars can be charged at your home while you sleep using excess electricity in the grid.  While it’s true that electric cars could significantly tax the grid if many are charged within close proximity in the daytime during peak hours, we don’t think most people will do that.  Lower night time electricity rates will be a big incentive for consumers to charge during off-peak hours (between 11 pm and 4 am), and the development and installation of timed meters, like PG&E’s SmartMeter™ will make this convenient.

In fact, according to a 2007 study done by researchers at the DOE’s Pacific Northwest National Laboratory (which assumed all cars, trucks and SUVs were PHEVs across the country),  84% of the additional electricity demand created by plug-in vehicles could be met with the current grid’s off-peak generation, transmission and distribution capacity.

With Chevy throwing out numbers like 230 MPG for the Volt and Nissan countering with 367 MPG for the Leaf, it’s no wonder that the discussion about how to measure electric vehicle fuel economy is heating up.

Maybe Nissan and GM are still talking in MPG because that’s all they know, but the EPA and NHTSA are also partly to blame for the confusion.  The first problem is that consumers are accustomed to gauging efficiency in MPG, so the big auto makers and the EPA are inclined to rate fuel economy of electric vehicles using a MPG equivalency figure.  The second problem is that since car companies must comply with strict Corporate Average Fuel Economy (CAFE) regulations set forth by NHTSA, electric vehicles must also have some sort of MPG value applied to them for the purposes of calculating regulatory compliance.  Consequently, the resulting calculations and policies have more to do with politics and influence that any basis in science.

In fact, under the current CAFE rules, the MPG equivalency of an electric car is calculated assuming about ~82kWh of energy per gallon of gas, when the actual energy content of a gallon of gasoline is about 34kWh. Meaning, the CAFE regulations have essentially changed the law of physics to artificially enhance MPG for electric cars, and all to give manufacturers a boost to comply with the regulations.

We get that fuel economy is one of the biggest factors when people buy a new car. It’s such a big deal that according to a Pike Research study, 85% of respondents said that improved fuel efficiency will be an important factor in their next vehicle purchase. But, we also think that MPG equivalency ratings aren’t an honest way to communicate electric car fuel economy to consumers.   To us, it’s like comparing apples to oranges.

The efficiency of an electric vehicle has nothing to do with gallons of gasoline, so why are we still talking in miles per gallon?  Using the EPA’s approach for the Chevy Volt fuel efficiency rating, the CODA electric car would have iMPG – infinite miles per gallon – because it doesn’t use ANY gallons of gasoline.  So while EPA fuel economy ratings can give consumers a way to compare the efficiency of one vehicle to another, when the calculations are driven by politics and influence rather than hard science MPG equivalencies only confuse consumers more.

At CODA, we believe the best way to measure efficiency of an all-electric vehicle is by calculating the amount of energy used per mile (watt hours per mile.) This also gives consumers an accurate way to compare different electric vehicles side by side.  We think the issue is confusing enough and that we shouldn’t be trying to compare electric cars to internal combustion cars when it is obvious that they are completely different.

As for plug-in vehicles that have some amount of “all-electric range” but also use an internal combustion engine either in parallel (Toyota Prius) or in serial (Chevy Volt or Fisker Karma), a new approach is needed. Plug-in hybrid vehicles should be rated on “electricity per mile” for the all-electric component and traditional MPG for when the engine is running. Both ratings should be shown on fuel-economy stickers.

Now that’s more like apples to apples.