Progressive Automotive X PRIZE

Reflections on the ZEV Technology Symposium

This week, we went to listen to three days of talks by folks in the Zero Emission Vehicles world, from regulators and academics to folks at suppliers, OEMs, and startups. Specifically, we heard talks that detailed progress in areas like hydrogen storage, fuel cell efficiency, energy and power density in batteries, and so forth. Take a look at the presentations. It was interesting...I mean, large portions were dry as a desert, interspersed by wonderful oases of non-monotonal technical dissertations and fleeting, but brilliant, mirages of pointed political commentary that bordered on petulant. I didn't fall asleep once, I assure you. But the free WiFi was a great thing...

My overarching conclusion is that we must recognize that there will be multiple solutions to our energy and mobility crises and that the market is more than large enough to profitably accommodate the right alternatives. It's disappointing to see the barely hidden vitriol that exists between the various technology proponents, those that favor some sort of battery, or hydrogen, or hybrid drivetrain. But the stakes were high. The findings from this symposium are being summarized and presented to the Air Resources Board (ARB) and regulatory changes might follow. So, imagine a mixture of scientific/experimental data reports, politics, business, spin, and sometimes not-so subtle lobbying. Given that ARB has the power to do things as divergent as mandate the length of warranties on batteries and also the levels of emissions of carbon and particulate matter...you can see big dollars resting on the results of these days of reports and questioning.

On this all-important subject, given the economic impact ARB decisions have on the auto industry, one thing stood out like a sore thumb: the truthiness of people's units and energy calculations. Wow. In presentation after another, there were data and arguments being discussed, each with units and justifications that we couldn't benchmark. It seemed like each presentation created its own arbitrary axes and coordinate systems to make its case. And because many arguments were made without regard for opposing or alternate perspectives, it was hard to consider the presentations objectively...a little bewildering. I amused myself by imagining a giant gong sounding each time somebody said something that deserved a chortle to point out its imbalance. 

That said, the hydrogen folks seemed defensive, as if their failure to have affordable technology in the marketplace right now was some sort of congenital failure. Not the kind of curious, entrepreneurial attitude we want exuding from people on the forefront of future mobility. Why are we castigating them for doing research into a possible solution to a percentage of our mobility future? Then came the battery electric folks...exactly the opposite: politely combative, confident, and ready to challenge all comers. As one person said to me...it was like the future mobility wagons had circled but everybody decided to fire inward rather than defend the family. That's just silly.

But there were highlights...one of which came when somebody off the street came to ask the panel of battery electric vehicle innovators, including Tesla, GEM, Miles Automotive, Wrightspeed, Aerovironment (the folks that brought us the EV1),  and AC Propulsion, what kind of practical options he could plan on seeing in his lifetime. What he saw from this panel ranged from a $100k supercar to a $12k neighborhood electric vehicle that can't go over 25MPH. He pointed out the gaps in this range and said, "I have $25k and can only afford one car...and it needs to take me to work and also cart my family around." That's the question, alright! Where are our alternatives and when are they coming?

The Impact of Declining Oil Prices

Oil and gas prices are down.  Oil prices have dropped about 20% since their high in mid-July.  Here in Southern California, gas prices are just under $3 per gallon again.  It's a bit hard for us "west coasterners" to believe, but according to Forbes:

Prices at the pump are below $2 a gallon in Missouri, Kansas, Oklahoma, Arkansas, South Carolina and Ohio and soon may fall to similar levels in New Jersey and Texas.

So, where is the attendant dancing in the streets?  Consumers are feeling better, right?  Not quite.  It seems that saving at the pump really just amounts to less consumer pain.  According to ENN:

While the decline in prices will provide some relief to motorists, it also reflects the country's weakening economic outlook. In other words, any benefit from falling pump prices may be outweighed by higher interest rates and a stagnating real-estate market.

People don't seem to trust the price decline much, even going so far as to posit pre-election market manipulation.  So... why the decline?  Experts cite much more plausible (and boring) reasons.  Major hurricanes haven't pounded the coasts this year and inventories are healthier, reflecting more stability in the market.  The current US administration appears supportive of negotiations with Iran, which is easing international tensions.  Also, temperatures cool at this time of year and people stay home more so it is typical and cyclic to see prices fall from their summer highs. 

That's not to say that the long-term outlook is rosy.  The Saudi oil minister suggested that the current price of a barrel of oil is "reasonable," so further declines from OPEC seem unlikely. Plus, the aforementioned Forbes article notes that:

...the current decline doesn't signal a long-term return to cheap oil or rule out future spikes to about $70 a barrel.

Of course, any number of natural or man-made events could disrupt supply and prices could go up. According to LA Daily, all is takes is one glitch that can change everything. Plus, overall growth in worldwide demand isn't showing any sign of slowing. 

In the mean time, clean tech investment might be hurt the most from a decline. Investments in energy funds that have bet on tight oil supply for years to come are feeling the hit, hurting short-term alternative energy development.

Washington: "We love you... up to a point"

Well hybrid fans, it is official.  The IRS this week announced that the day of reckoning had come for Prius buyers: Toyota has made too many of the darn things and now the tax credit starts to fade away.  To be completely accurate, the the credit falls away for ALL Toyota hybrids, not just Prius, but of course everyone's favorite gas-sipping ovoid is the main culprit in Toyota's success in reaching the 60,000-unit of sales point -- thus triggering the demise of the credit.  To quote the tax guys:

"Under the current tax law, the credit for buying a hybrid vehicle begins to phase out during the second calendar quarter after the quarter in which the company sells its 60,000th hybrid or lean burn technology vehicle."

Some observers have asserted that this limit is calculated to tilt the playing field against the to-date hybrid champion, in that other manufacturers (e.g. Ford) are in no risk of hitting the 60,000 number, and therefore will be able to offer buyers all 100% of the credit.  Whether that is true or not is not for us to say, but it is a shame that such a mixed message is being sent.  Uncle Sam seems to be encouraging hybrid sales --- just not too many of them!

Truth in Fuel Labeling?

Most people know that our personal health is affected by what we eat – i.e., how we fuel our bodies. And now there's growing awareness that our planet's health is affected by how we fuel our cars.   The main culprit is carbon dioxide emissions, and in that respect some fuels are unhealthier than others.

In the case of food, we understand that the type of food - chicken, lamb, corn, spinach(!), etc. - doesn’t fully determine how healthy it is.  That depends on a full “ground-to-stomach” accounting – how the food is grown, processed, and distributed. Did that chicken grow up eating processed nutrients, chemicals, and hormones in a dark, crowded chicken factory, or strutting around in a sunlit barnyard eating natural, pesticide-free food? It makes a difference.

Likewise for automotive fuel. One can easily get the impression that carbon emissions (and therefore planetary health) are determined simply by the type of fuel – gasoline, diesel, electricity, ethanol, hydrogen, etc. – but it’s not that simple. Valid comparisons require a full ground-to-tank accounting, i.e., including the emissions from fuel production, distribution, and use.  Such comparisons are not easy; to get a sense for the complexity, look here, and here. 

Whether an electric vehicle is good for the environment depends on how the electricity is produced – from renewable energy sources like solar and wind, good; from burning coal, not so good. Likewise, whether ethanol is healthier than gasoline depends on how the ethanol is made. With today's methods, sugar-based and switchgrass-based ("cellulosic") ethanol are healthier (less carbon-intensive) than corn-based ethanol, and healthier than gasoline.  Meanwhile, it's not clear that corn-based ethanol is healthier than gasoline, although improved methods of production may yield corn-based ethanol that's clearly less carbon-intensive. 

So what’s a consumer to do? In the case of food, those who care are informed by such truth-in-labeling, ground-to-stomach designations such as “certified organic” (far from perfect, but better than nothing). What about fuel? For those who care, could fuel be labeled to indicate ground-to-tank carbon emissions?

There are obvious practical problems in doing so, but in principle it's possible. For example, all fuel could be encoded with information about carbon emissions – chemical markers in liquid fuel, specialized modulation in electricity, etc. And fuel-dispensers could display carbon information just as they display changing prices. Could a practical system be developed, perhaps involving regional, manual labeling? Would anybody care?

Perhaps some consumers would pay more for healthier fuel. You are what you eat.  We are what we burn. 

A Voice from the Wilderness

For those of you who have not yet read the recent excellent report on Global Warming by the Economist newspaper, I strongly encourage you to do so.  The entire survey is relevant to the AXP campaign, of course, but I wanted to draw attention to one small nugget of info tucked away in the middle of the report.  This is a reference to the National Wildlife Federation's 2006 "Nationwide Opinion Survey of Hunters and Anglers," which is probably not something most of you read on a regular basis (smile).  But being based as I am in Ohio, a state not well known for its liberal convictions as regards topics like gay marriage, Homeland Security, and That Man in the White House, the survey gave me some comfort that out here in the Midwest, there may be more support for AXP's goals than those of our readers domiciled on the coasts might assume. 

The survey covered some 1,000 hunters and anglers (note the agile and politically correct dodging of "fishermen," as I suppose "fisherpersons" would be a bit of a stretch), of whom a good quarter identified themselves as Republican, and just about half as evangelical Christians.  Not a group one might guess would be all up in arms about climate change (pun intended).  But that guess turns out to be utterly wrong.  Over three-quarters of these respondents said that not only had they noticed significant climate change occuring as they tramped the fields and forests of the US, but that they agreed that global warming is the culprit.  And a full two-thirds believed that the problem was urgent and that, further, the USA should take a leading role in combatting the phenomenon, via regulation of fossil fuels or incentives to develop cleaner technologies, or any number of other steps.  Now, the NWF was not so brave as to ask the respondents if they thought part of the solution would include reducing their use of pickups and SUVs, but the findings are significant nonetheless.  Check out the survey for more details.

So an odd coalition may be emerging, including not only what I'll call the "academically" green (whose archetype is probably the university professor riding a bike to school and running a compost heap in the backyard), but the "field and stream" greens, too.  As these hunters and anglers notice shorter winters, drying wetlands, and more frequent brushfires, they may be coming to the same conclusions as their less outdoorsy fellow citizens. 

Now if we can just figure out how to install a nice Cabelas fishing rod rack in the back of a Prius...

Thoughts on a Google Car

According to recent activity over at Google.org, the philanthropic arm of most everyone's favorite search engine, the foundation may soon fund efforts to "develop an ultra-fuel-efficient plug-in hybrid car engine that runs on ethanol, electricity and gasoline."  I have no information that the resulting powertrain will then be used in a Google-branded car (as opposed to being inserted in other makers' vehicles: the nifty Th!nk would be a great candidate), but it is intriguing to speculate what the Google name would do for a car's image. 

One of the challenges car designers have today is how to telegraph to the outside world modern-day self-images of car owners.  We know how to do all the familiar old ones: to comunicate wealth we make the car longer and wider, round off the corners, and maybe darken the windows; to comunicate speed and power we lengthen the hood, lower the car, and flare the wheel arches; to indicate practicality we go for a boxy look and very large door apertures.  But how do we communicate "wired-ness" or technology savvy or -- especially pertinent to X -- environmental awareness?  A technophile can radiate his or her own brand of coolness through casual display of those white iPod earbuds, or by toting the latest style of messenger bag -- but what kind of car does she drive?  And while for the greener folks among us the Prius is an obvious choice (and outselling the Honda hybrids in part, I assert, just because it is a more visually distinctive "badge of honor"), we can't all drive Prii.  Back when environmental sensitivity and the hippie culture pretty much completely overlapped, the VW bus was probably the signifier of choice, but now that we all know that such elderly vehicles are equipped only with the most primitive of emissions controls, that's hardly an option.

Perhaps a GoogleCar can make great strides on both dimensions: visually distinctive on the outside, and inside, the first vehicle to not only sport an iPod dock, but also a mobile WiFi hotspot, a massive built-in hard drive, a prepaid NetFlix subscription, and of course a navigation system running Google Maps.  The possibilities are endless.  And then under the hood, a hyper-clean hyper-efficient powertrain.  Tweak the styling to make it distinctive (maybe steal a page from Scion's book here) and the possibilities are endless.  A new dialect in the design language of the car could be created.

Oh and by the way, what we do not have in mind is the Goggomobil:   just so there isn't any confusion! (grin)

Horses for Courses

As has been pointed out by various industry analysts, we could "cure" our automotive fuel consumption problem without the application of a single new type of powertrain or fuel, if we'd just change our behavior. 

The first pernicious habit we have is, of course, our dedication to driving thousands of miles per year per car.  This number persists in going up and up and up virtually every year since World War II.  Americans seem addicted to mobility. 

Our second behavioral problem relates to the mix of cars we buy and how we use them: we typically drive vehicles that are wildly inefficient for the purposes we ask them to serve.  As some have said, the real potential mpg of a mid-sized sedan that is labelled as getting 25 miles per gallon could be 100 mppg - miles per person per gallon - if it always carried 4 people.  But since that sedan typically has only 1 person in it, we say the car gets only 25 mpg.  The number of empty seats and unused trunk space in the American fleet is uncounted but is staggering to contemplate.

Since we're unlikely to move en masse to constant carpooling anytime soon (which would raise the numerator in the mppg ratio), then the next best solution is to shrink the denominator: move to smaller cars, and carry around a lot fewer empty seats and unutilized pounds of steel.  Thus if we all switched to Aveo's or Fit's tomorrow our problem might evaporate.

The favorite whipping boy in this particular struggle is the SUV, partly because such vehicles are inherently inefficient, but partly (I suspect) because energy-conscious drivers seethe in frustration when they see an 8-passenger sport-brute barrel by at 70 mph... with just one person on board!  This really has to stop.  Yet owners of trucks (pickups, SUVs, minivans) point out that they are not trying to waste gas, they are just buying "horses for courses:" the pickup bed may be empty much of the time, but when the need to haul firewood out to the country house emerges, well the Prius just won't cut it.  Or the SUV owner might point out that when all three kids load up their ski gear, even the Expedition is crowded.

How realistic is the "horses for courses" argument?  How often are all these seats and cubic feet fully utilized?  Accurate data are hard to come by, but the Polk company, respected automotive market researchers (Polk), have taken a shot at it, at least from the perspective of the pickup segment.  Here are the fun facts:

• 57% of pickup owners use the bed portion of the truck less than once a month (essentially they've bought a truck in order to haul ~10 loads a year!) 
• 27% of owners have never put anything in the bed (!!!) 
• 37% of owners have never used the truck to tow anything 
• and 62% of pickup owners in America have never gone off road

The message is pretty clear: just like your nutty old uncle who bought a big Lincoln "because you can put 7 sets of golf clubs in the trunk!" -- but who never golfed himself -- a lot of Americans are not quite matching their cars to their needs.  A lot of our horses are just not suited to their courses, I'm afraid.