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The Future of the Green Car Industry

For many years car companies have brought out “green” cars which they claim are the big revolution, which will reduce our usage of fossil fuels. The majority of these have been false dawns which have only served to damage the image of the green car industry as consumers become sceptical of anything which claims to be environmental.

Another issue has been that being environmentally conscious has tended to come at a price. My firm estimates that getting insurance with a car insurance firm which claims to be environmentally conscious could result in premiums which cost up to 146% more than with conventional insurance firms.

The effectiveness and cost of “green” offerings have therefore hindered their adoption. However, all this could be about to change as Nissan launches the first mass produced all electric vehicle.

The Leaf is set for a full scale roll out in the USA in 2011 with 20,000 reservations having already been made. This interest stems from the fact that the car is actually environmentally friendly as it doesn’t require fossil fuels and therefore doesn’t emit carbon dioxide gases into the atmosphere. Despite this the car is much quicker than expected, with a top speed of 92mph. The Leaf therefore does what it says on the tin and is not a marketing gimmick.

The second impediment to environmental car adoption has been costs. However, Nissan has priced the innovative technology “aggressively” and it is therefore available to buy from $32,780. A number of tax breaks will be offered as an incentive to buy the car, which results in it being available from as little as $25,280. This does still seem a lot when you consider that you can buy a new Ford Focus for $18,790, but isn’t quite so bad when you consider the savings which come with running it. It is possible to save over $1500 per year on fuel alone with the Leaf, with it costing just $220 to do the average 12,000 mile per year average. There are other incentives being planned in different states, with New York governor George Pataki planning an “energy reduction plan” which it is alleged could save drivers of electric vehicles $2000 per year in tax breaks.

However, there are two big problems with the Leaf. The first is practicality, with it only being capable of doing 100 miles between charges. This problem is exacerbated by the second problem, which is the availability of recharging outlets around the country. The car is equipped with a quick charge function which allows the batteries to recoup 80% of their power within 30 minutes, but this isn’t an option if there is nowhere to charge it.

Plans are in place to change this situation, with the U.S. Department of Energy providing a grant of $114.8 million to a company called ECOtality, which is planning on installing 15,000 charging stations across sixteen states within three years. Even with plans to introduce a second edition Leaf capable of 200 miles between charges in 2015, this still isn’t sufficient to make owning an electric car commonplace.

Technological advances are relentless. The Nissan Leaf would have been unthinkable just ten years ago but now the improvements being made to the efficiency of lithium batteries and electric engines are truly remarkable. This is something which will only improve as competition in the green car market increases, with Chevrolet, Renault Mitsubishi and Ford all planning on introducing fully electric vehicles in the coming couple of years.

The technology is there; it is the infrastructure which isn’t. It’s all well and good that the government is providing tax breaks to people who own environmental vehicles in order to encourage their adoption but it is not the biggest issue. The government needs to instead channel these funds into the development of an electric charging point infrastructure around the U.S. Oil supplies are dwindling and prices are rising, and the time has come for a viable alternative and people are beginning to realise for the first time that owning an electric car is a viable and realistic option. The government must act; otherwise the country could be crippled when the cost of filling up a vehicle becomes unsustainable.

Mark Martin is a marketing specialist at finance price comparison website Moneysupermarket.com.

Mark Martin
Mark Martin is a marketing specialist at finance price comparison website Moneysupermarket.com.
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10 thoughts on “The Future of the Green Car Industry

  1. Interesting as this is, a electric car DOES require fossil fuels as electricity does not grow on tree. While reducing oil demand for fuel, will not massively improve the situation unless the US Grid moves away from coal.

  2. Mark you make a good point. The only way to achieve mass market uptake of EV’s is to provide sufficient infrastructure to support their operation. They are definitely the way of the future however charging points alone will not solve the infrastructure issue. It’s important to make EVs as convenient to drive as conventional vehicles and that means they need to be as quick to recharge to full capacity as it is to refill a tank of fuel. To achieve this convenience, battery switching stations need to be available at every service station. Battery switching is actually quicker than filling a tank with fuel. It essentially involves driving onto a platform and having your battery switched with a fully charged one. The platforms currently developed use robots to perform the switch. With a network of switching stations as well as charging infrastructure availability, mass uptake of EVs can be achieved. There is still debate out there that EV’s simply shift the emissions to power stations as electricity is required, however the fuel mix used by power stations is changing quickly. Also, there can be no debate that the harmful emissions people are forced to breathe everyday at ground level (known as roadside emissions) will be dramatically improved with the uptake of EV’s as they do not emit exhaust fumes.

  3. Insurance is guided basically by the cost to repair a car, the potential damage it may inflict, and of course, the speed at which it is driven most often (aka a Honda Civic is an expensive car to insure due to teen racing and modifications…adults pay the price of children once again, but this is another blog…) I believe the insurance industry will gouge the public until more than enough voices are heard and the pricing begins to reflect the true costs. Electric cars have 70% to 90% less moving parts. In an accident, the functioning bits of an electric car, the motor(s), batteries, wires, brakes, all will likely still work. The body of the car is damaged. Much less vehicle weight as well since there is no steel engine, ok, aluminum. Therefore, less potential damage to things being hit, like other EVs.
    I suggest to all to think hard about the facts that surround EVs. For example, when we all come home from work and plug in, will the grid be able to handle this huge demand in a very short period? Why not use solar rooftops, trunks, hoods to provide charge to the battery? Think logically and the truth (and facts) will set you free!

  4. I’m a suburban who drives 25 miles to work and drives one or more of 4 kids to various planned activities in evenings and weekends. The Leaf already meets ALL my routine metropolitan driving needs WITHOUT the need to recharge during the day (i.e. I would recharge at night where there’s plenty of surplus electricity). I drive about 17,000 miles per year, which is more than the national average of 12,000. My situation is no different than that of most of us living in the outskirts of a city of 1 million. So millions of us could be driving BEV’s like the Leaf without the need for any change to the current electrical infrastructure. Battery technology is improving rapidly so driving range will increase in coming years. So I believe your argument about the need to invest massive amounts in electrical infrastructure is rather weak. On the contrary, at this stage, it’s the consumer who takes the biggest risk as battery technology is not field-proven; so government incentives should and are addressing that. Hopefully, demand for BEV’s will rise and production costs will be reduced, making BEV’s even more attractive…

  5. About coal: only specific regions of the nation require coal for electricity production. As of this year, is it now cheaper to produce electricity using solar technologies than nuclear. That’s what government incentives (in the form of loan guarantees for the initial installation) should focus on providing – if needed.

  6. About capacitors (or supercapacitors), many specialists very skeptic wrt supercapacitors, and recent failures to produce engineering quantities have proven how difficult a manufacturing challenge this technology poses. More realistically, supercapacitors would be used to complement chemical batteries to allow greater power bursts in sudden acceleration and breaking…. but I’m not betting on them.

  7. There are different shades of green out there but not well captured here. Both the Volt and Leaf are groundbreaking vehicles in their own rights. However, using petroleum more efficiently is the near term answer, and diesel cars are about 30 percent more fuel efficient than gasoline cars, and many can currently use 5 to 20 percent biodiesel. Yes they are still petroleum based technologies, but there will be more energy savings from clean diesels and hybrids than from electric cars for quite some time. It is fair to ask whether at this time significant publicly funded investments in infrastructure (charging stations etc) are realistic given the economy. Mmore diesel cars in use will reduce oil consumption in the near term.

  8. Enjoyed your article. Just now starting to learn about this sector of the automotive world. Would love to have you contrast this new “Leaf” with the General Motors EV1 that was so unceremoneously murdered some years back.

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