October 9, 2011 21:13
Notwithstanding the bad press garnered recently by some clean technology business models that relied on government largesse (most notably the failure of Solyndra LLC and its accompanying half-billion dollar government guarantee), government funding of "green" is not going away. Last Thursday, ECOtality announced the award of a five year $26.4 million contract with the Department of Energy to continue to test and evaluate advanced vehicles.
As stated by ECOtality, "The primary goal of the Advanced Vehicle Testing and Evaluation project is to provide key data for technology modeling, and research and development programs, by benchmarking and validating the performance of light-, medium-, and heavy-duty vehicles." So ECOtality is testing; is anyone buying? The predictions are that quite a few will be.
The Department of Energy and others have put together $230 million to promote the development of electric vehicle infrastructure in six states (Washington, Oregon, California, Arizona, Texas and Tennessee) and the District of Columbia. The EV Project, as it is called, is a significant venture and one in which ECOtality is heavily involved. This month marks the beginning of the third and final year of the project.
How many drivers are we talking about? Initially, the numbers are small, but the upside is not. To quote ECOtality again: "The ultimate goal of The EV Project is to take the lessons learned from the deployment of these first 8,300 EVs, and the charging infrastructure supporting them, to enable the streamlined deployment of the next 5,000,000 EVs." As of the end of September the lead electric vehicles in this country are Nissan's LEAF, with sales of approximately 7,000 and General Motors' Volt, at a little more than half that. So there is a ways to go.
But we are confident that we will get there. Although justifications for shifting to electric vehicles include minimizing carbon emissions and energy independence, the reason the switch will happen is cost. The advantage over the internal combustioin engine is immense. According to General Motors: "The Volt should cost less than 2 cents per mile to drive on electricity, compared with 12 cents a mile on gasoline at a price of $3.60 a gallon."
Which leads to the most interesting part of the story: the companies that are part of all this. Besides electric utilities and state and local governments, partners in the EV Project include, among others, retailers (IKEA, Sears, Macy's, Best Buy), property managers (Jones Lang Lasalle), restaurants (Cracker Barrel), hotels (Loews), oil companies (BP), and supermarkets (FredMeyer). The business model is simple. With a high-speed charging connection, a customer's EV can be recharged to 80% in about 30 minutes. Enough time for a quick lunch or a little shopping. And if the customer will be there longer (like at work or overnight), then there is a further opportunity. Practitioners should take note. Even if EV's are not here yet, the leases and zoning approvals that one is negotiating now could be set up to ensure that the opportunity will be available, but only if one is thinking about it.