Another in a continuing trend of news articles and automaker statements that at times call PHEVs EVs, at times call both "plug-in vehicles." It appears the postal service's vehicles will be all-electric, to be manufactured starting later this year, with a PHEV diesel option. These cars will use batteries from the Johnson Controls-Saft joint venture (one of two groups competing for GM's business as well).

Electric Cars Gather Speed Experiment in France Shows Promise, But Cost Remains Considerable February 26, 2007; Page A8 Write to David Gauthier-Villars at David.Gauthier-Villars@... http://online.wsj.com/­article/­SB117245446418718915.html

PARIS -- In late 2005, France's state-run postal service began a trial of eight experimental electric-powered mail-delivery vans in an effort to meet a government requirement to reduce pollution.

Not only did the vans work well and prove cheaper to operate than gasoline-powered ones, but the mailmen who drove them reported higher job satisfaction. Now, La Poste is working on a five-year plan to replace the bulk of its 48,000-vehicle fleet with electric cars.

"The car works great, with almost no maintenance," says Patrick Widloecher, La Poste's director for environmental affairs. "We're ready to order more."

ELECTRIC RIDE

The companies behind the car hope their battery technology will be powerful and long-lasting enough to overcome the issues that have plagued past attempts at electric cars. The cars La Poste used were developed by Société de Véhicules Électriques, controlled by aerospace tycoon Serge Dassault, and were outfitted with a specially designed lithium-ion battery developed by a joint venture of Milwaukee car-parts maker Johnson Controls Inc. and French battery company Saft Groupe.

The auto industry is keen on electric cars because of their potential to lower pollution and so-called greenhouse-gas emissions that contribute to climate change. They also would help reduce industrialized countries' reliance on fossil-fuel imports at a time of world-wide concern over oil supplies.

La Poste's experience with Mr. Dassault's SVE is part of a recent pickup in momentum for electric cars. Last month, General Motors Corp. unveiled a prototype for an electric Chevrolet Volt. Although GM remains vague about a possible mass-market rollout, it has selected industrial partners to develop batteries. French car maker Renault SA, which tried and failed to roll out an electric van five years ago, says it wants to add such a vehicle to its lineup in 2010 as part of a wider partnership with affiliate Nissan Motor Co. of Japan.

Still, many obstacles remain before a mass-market electric car may be available. The main stumbling block is the prohibitive price of lithium-ion batteries. "Manufacturers have solved most technical problems, but they need to work further on reducing the cost," says Ahmad Pesaran, head of energy-storage studies at the National Renewable Energy Laboratory, an arm of the U.S. Department of Energy.

Other car makers remain skeptical, saying electric cars will remain confined to niche markets, such as mail delivery, where the lengthy process of battery recharging can be done at night. France's PSA Peugeot Citroën SA, which made 10,000 electric vehicles in the 1990s, says it prefers to focus on hybrid solutions that combine both electric power and a gasoline engine, much like Toyota Motor Corp.'s fuel-efficient Prius.

SVE has yet to settle on a price for its electric car, and it isn't clear how much La Poste will have to pay to increase its fleet. But the car will be significantly more expensive than a traditional gasoline-powered vehicle because of the high cost of the lithium-ion battery, which La Poste says would account for about 60% of the unit price. The mail company says it will save on operating expenses because charging the electric car with electricity costs about one-sixth what it would spend to fill up the tank with gasoline.

SVE plans to make only a few cars at first. The French company expects to begin volume production toward year end with the assembly of 1,000 vehicles and, from 2009, gradually ramp up production to about 20,000 a year. That would be a fraction of the two million vehicles sold in France every year, though still more than all the other electric cars ever produced.

To widen the potential market for its electric vehicles, SVE has developed a version of its van equipped with a small diesel engine. The engine can help recharge the battery on the go or provide additional torque on highways, removing the range cap that hampers purely electric vehicles. Such cars are often called "plug-in hybrids" because they can be recharged on a plug or with gasoline.

A substantial shift to electric cars would cause only a small rise in power consumption, according to utility Electricité de France. "Even if 10% of all vehicles sold in France were powered by electricity, by 2020, they would account for less than 2% of overall power demand," says Robert Durdilly, EDF director for new-business development.

In France, which relies on nuclear and hydroelectric power for most of its electricity generation, electric cars would help achieve a drastic cut in greenhouse-gas emissions. In the U.S., where about half of electricity is produced from coal and where gasoline remains relatively cheap, electric vehicles might be a harder sell.

Electric cars have failed to deliver on their promise in the past. Eleven years ago, La Poste purchased 700 vehicles from Peugeot, which it hoped would become the backbone of an electric-powered fleet of mail-delivery vans. But the batteries weren't powerful enough. In courier mode -- with close to a half ton of mail on board and hundreds of stops a day -- the range of the cars drops to about 19 miles.

The Johnson Controls-Saft venture says it has taken care of safety problems associated with the lithium-ion technology, notably fire hazards that have plagued smaller lithium-ion batteries used in laptop computers. Still, JCS Chief Operating Officer Franck Cecchi says a key area for research is temperature control because lithium-ion batteries may overheat when they are turned on, and excess temperature can harm their lifespan dramatically. "We've succeeded in making batteries that can last for 10 years, but we're working to either increase the lifespan or reduce the cost," Mr. Cecchi says.

SVE Chief Financial Officer Sébastien Rembauville-Nicolle says he has no doubt about the performance of the Johnson Controls-Saft batteries. Because all the van prototypes undergoing tests are registered in SVE's name, he says, "the mailmen's speeding tickets end up in my mailbox."