Friday, October 15, 2010

2011 will be critical for the future of plug-in vehicles



DETROIT -- Next year will be critical for the future of plug-in vehicles.

In the next few months, Nissan will launch the Leaf electric car and rival General Motors will offer its Chevrolet Volt electric car with a gasoline engine backup system.

Failure of any of the vehicles could be disastrous.

"This is a very unforgiving business," said Bob Purcell chairman and chief executive of Protean Electric, a Michigan company that is developing motors for electric cars and the former GM executive who led that company's development of the EV1, a 1990s electric car leased to customers in California.

"The customer has a set of expectations of what a vehicle should do. If it doesn't, you've lost them," Purcell said at the Center for Automotive Research's Business of Plugging in Conference this week.

Nissan is trying to manage customers' expectations before the vehicle's launch, including how far the car will go on a single charge. In ideal conditions, the Leaf may be able to get as many as 120 miles on a charge. In other conditions, it would be less.

Cleveland winters contain many of those worst-case scenarios for electric cars. On cold, snowy days, when drivers are using their heaters and crawling through traffic at 10 mph, the Leaf's range plummets to about 60 miles.

Nissan wants to warn customers about its limitations now instead of dealing with a backlash next winter if a driver gets stuck in the snow with no power.

"Our focus is to make sure the customer is educated and really understands the range," Nissan executive Scott Becker said.

GM is less concerned about range because of the Volt's gasoline backup. But the company said customers will be highly disappointed in the vehicle if it doesn't allow them to avoid using gas entirely on a regular basis. Also, customers could be turned off if the car isn't fun to drive and if it takes too long to charge.

"The customer experience is going to be key," said Tony DiSalle, GM's marketing manager for the Chevy Volt. "People have to really like the car."

Overpromising could do more than disappoint customers, it could sour a generation of buyers to any electric cars in the United States.

Purcell and others at the conference said there's less risk in other parts of the world. China has ordered automakers to build electric cars, and that country plans to limit the number of gas-powered cars in the next few years. In Europe, major cities including Rome, London and Milan have either banned gasoline cars in city centers or limited their use. In those markets, electric cars are becoming necessary, regardless of how well they work.

In this country, on the other hand, even those making electric vehicles worry that there may not be much demand for the cars when they go on sale.

John Formisano, a retired FedEx executive who managed that company's vehicle fleet, said the likely buyers of the Leaf and the Volt are people who today drive the Toyota Prius or other hybrid cars.

Traditional hybrids use electric motors and batteries to improve the fuel economy of cars that run on gasoline engines. Drivers of the Prius, Ford Escape hybrid and other traditional hybrids don't need to be plugged in overnight.

Despite the popularity of the cars in 2008, when gasoline topped $4 per gallon, hybrid sales have been flat or falling for the past few years. Brett Smith, director of CAR's manufacturing and technology group, pointed out that hybrids peaked at 3 percent of auto sales and have fallen since then.

DiSalle said GM expects Volt sales to be fairly low in 2011 for a major product launch, probably fewer than 30,000 cars. It's typically hard for an automaker to justify building a vehicle at such low volumes.

But he added that GM believes the market will grow rapidly once electrics are on the road.

"We've got a high degree of confidence for the long-term," DiSalle said. "Once customers understand the benefits of the Volt, we think the market is going to expand."

source: cleveland