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Silicon Valley: New Detroit of Plug-In Cars? + Wrightspeed's Direction
Nov 7, 2007 (From the CalCars-News archive)
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Page 1 of today's San Jose Mercury News profiles four Silicon Valley companies plus CalCars. That story is a roundup sparked by last week's announcement of "A Better Place," the new $200M startup with a business model to create a battery charging/swapping infrastructure starting with compact locations (examples are Hawaii, Denmark, Israel) and partnerships with unidentified automakers to build cars where batteries are a service, not a first cost. The idea has attracted great interest; we encourage you to view the launch press conference/Q&A at http://www.projectbetterplace.com -- we were thrilled to hear the founder and investors talking about a broad strategy with distributed energy storage of renewable power as a central feature.

The article and four front-page photos also look at Tesla Motors, AC Propulsion (based on San Dimas in Southern California, but CEO Tom Gage works out of Sunnyvale part of the time), and it describes CalCars' long-time role in promoting PHEVs.

It also includes Wrightspeed -- a less-well-known company whose founder, Ian Wright, is most identified with his early role at Tesla and his current prototype sportscar. In fact, Ian Wright has long been talking more broadly: he ably makes the point that the bigger the car, the greater the benefit in petroleum displacement. (GM has also been saying similar things to explain why it wants to hybridize buses and large SUVs.) That's why his perspective shows up in what may seem an unlikely place: PickupTruck.com, where he talks about Wrightspeed's Phase Two plans (after he gets started by raising money for his Phase One EV supercar) to build plug-in hybrid heavy pickup trucks. (The jury's still out on series vs. parallel plug-in hybrid designs -- the proof will be when cars are on the road.) You can read that interview below.

How Silicon Valley could become the Detroit of electric cars
DAUNTING CHALLENGES FACE FIRMS ENVISIONING LIFE AFTER GASOLINE
By Matt Nauman Mercury News 11/07/2007
http://www.mercurynews.com/­business/­ci_7392438

Silicon Valley is already the capital of the world's high-tech industry. Is it also becoming the Detroit of the electric car industry?

Last week's announcement by Shai Agassi, a former SAP executive based in Palo Alto, that he's raised $200 million for a company that will try to revolutionize the electric car industry is the latest sign of this region's growing role in one of the hottest sectors of the automotive industry.

That's no surprise considering California's mandate for cleaner cars, the local enthusiasm for plug-in hybrids, the Silicon Valley fascination with new technology and the number of Bay Area venture firms investing in this industry.

Agassi, who spent months studying his venture, makes an interesting observation about the valley and the Motor City. "Detroit is a car manufacturing center. I think what we're looking at is not something that can be done in a normal way. . . . It needs an Internet approach, a Google approach."

And, he said, this region is well-suited to do that. "In the valley, we know how to do technology disruption. We know how to do business models, how to develop proof of concept and get it adopted around the world," he said.

Others, even those enthusiastic about the potential of electric cars, are uncertain about how much success start-ups such as Agassi's Better Place and Tesla Motors of San Carlos can have against the huge global auto industry. General Motors and Toyota, for instance, each produced more than 9 million vehicles in 2006.

"It's not simple or cheap stuff to do," said Neal Dikeman, partner with Jane Capital Partners, a San Francisco merchant bank focusing on cleantech and energy technologies. "$100 million is the ante up to play the game," Dikeman said.

"People are waking up to the fact that this is not like software start-ups that raise $40 or $50 million, and then have IPOs," said Darryl Siry, Tesla's vice president of sales, marketing and service. "This business is capital intensive."

Agassi acknowledged that "massive investments" are required to begin the transition from gasoline engines to electric-drive autos. He calculates the total cost for every affected industry at a staggering $6 trillion a year.

Still, he said, it's worth it: "The first carmaker to field a solid electric vehicle at scale will enjoy benefits that will dwarf the success of the Prius for Toyota."

Why electric cars? Among the reasons: the rising cost and possible scarcity of oil, growing worries about pollution and global warming, and developments in technology that will make batteries more affordable.

And using the power grid for transportation will be more affordable and more environmentally sound, electric-car proponents argue. That's especially true as governments require utilities to get power from renewable sources such as solar, wind, water and geothermal.

Agassi has computed the economics of oil - prices are above $90 a barrel - and concluded that electricity is the only answer for future personal transportation, because gas will be too expensive.

"Whether Shai does it, or someone else does it," he said, electric cars are inevitable.

His plan calls for Better Place to partner with carmakers whose products will use the company's batteries and charging/swap stations. If consumers commit to a long enough contract for power, Agassi argued, they could even get cars for free - just like with mobile phones and service plans.

It all makes perfect sense to Stephan Dolezalek, the senior partner who heads VantagePoint Venture Partners' cleantech portfolio in San Bruno. He's invested in both Better Place and Tesla.

He sees a future where electric vehicles serve as city cars while bigger vehicles, such as SUVs perhaps burning ethanol or biodiesel, are used for longer trips and carrying more passengers.

He uses an analogy of a barbecue's propane tank to describe where Better Place fits in. While you used to have to wait in line to get your tank filled, now you just swap an empty one for a full one.

"Think of electric cars and batteries the same way," he said. "You own the car, and the battery comes packaged with the fuel."

Ron Cogan, editor and publisher of the Green Car Journal and a longtime industry consultant, acknowledges the progress being made with battery and electric-drive technologies. Still, one fact stands out - "batteries are very expensive," he said.

"You have to realize that it's just potential until we start seeing real products on the market," he said.

Tom Gage, who works two days a week in Sunnyvale, knows how long it take to create a successful electric vehicle company. His 15-year-old AC Propulsion, which tests and builds electric-car parts such as motors and battery-management systems, began delivering a handful of electric eBox vehicles earlier this year. It's a boxy Scion xB sedan converted into a pure electric car that can go 150 miles on a full charge. It costs about $70,000, Gage said - $15,000 for the Scion, and $55,000 for the conversion.

He's optimistic about the momentum being generated by Tesla and Better Place, but cautiously so.

Look at the trajectory of hybrids, he suggests. The Prius came out 10 years ago, and Toyota has sold 1 million of them worldwide. About 500 million new vehicles have been sold in the same period.

"And that's with something that's been fairly well accepted and acclaimed," he noted.

It's clear that the electric auto industry is in its infancy. None of the big automakers sells a pure electric or a plug-in hybrid in the United States.

Yet both Elon Musk, Tesla's chairman, and Agassi forecast tremendous growth for their ventures. With initial testing beginning in 2008, Agassi predicted Better Place could have 100,000 cars on the road by 2010. Musk has said that Tesla's third model, which would cost about $30,000 and go on sale after 2010, might reach "100,000-plus" sales.

Whether it'll be these Silicon Valley companies, other start-ups based elsewhere or the world's big automakers selling electrics remains unclear.

Still, venture capitalist Dolezalek does ask the question: "What if you take something that has always been designed in Detroit and you moved it to Silicon Valley, how would you do it different?" Both Tesla and Shai Agassi are trying to answer that question.


THE VALLEY'S ELECTRIC CAR INDUSTRY
http://www.mercurynews.com/­business/­ci_7392439?nclick_check=1

Silicon Valley is home to a number of companies and organizations pursuing electric-powered cars:

Tesla Motors. Based in San Carlos, it has raised more than $100 million, much of it from Elon Musk, its chairman, who helped create PayPal. Tesla has taken 600-plus orders for its $100,000 electric Roadster, and it has said it will build a $50,000, four-door electric by decade's end at a New Mexico plant. The first 50 cars are due before March 2008, the company says. www.teslamotors.com

Project Better Place. Shai Agassi kept a low profile after he left software maker SAP until last week, when he went public with his plan to create a network of charging stations for electric cars and to arrange for the batteries and cars that will use them. Details remain sketchy, but $200 million should provide lots of answers, with some announcements in early 2008, he said. Better Place, a tentative name, is based in Palo Alto. www.projectbetterplace.com

Calcars.org. Felix Kramer's California Cars Initiative, based in Palo Alto, has been pushing for plug-in hybrids - which add battery power and extended electric-propulsion range to conventional hybrids - since 2001. www.calcars.org

AC Propulsion. In business since 1992, the company made news in 1997 when it showed off tzero, a slick electric roadster at the Los Angeles Auto Show. Early this year, it delivered its first eBox, a Toyota Scion xB converted to electricity, to actor/director Tom Hanks. The company has sold 15 of the cars and will show off a converted Chinese car later this month. AC Propulsion is based in San Dimas, but President/CEO Tom Gage often works in Sunnyvale. www.acpropulsion.com

WrightSpeed. Ian Wright, one of Tesla's original employees, has been showing off his own electric creation called the X1 prototype, a fast, open-air electric racer. Based in Burlingame, WrightSpeed has a somewhat unclear future: The last "news" item on the company's Web site was posted in January 2007. www.wrightspeed.com

Is An Electric Heavy Duty Pickup In Your Future?
PickupTruck.com By: Mike Levine Posted: 10-14-07 03:05 PT
http://www.pickuptruck.com/­html/­stories/­wrightspeed/­page1.html

What does this car have to do with pickups? [Photo of racing car] CAPTION: Entrepreneur Ian Wright Says His X1 Prototype Electric Car is a Stepping-Stone to Electric Heavy-Duty Pickups

You don't often hear 'hybrid' used in the same sentence as heavy duty pickup, but if alt-power entrepreneur Ian Wright has his way, that's about to change.

Mr. Wright is the founder of Wrightspeed, a company dedicated to developing an electric car, called the X1. The X1 prototype (pictured above) is a proof-of-concept along the way to a practically produced roadster that will be capable of outrunning most of the world's fastest petrol-powered supercars. The prototype can zoom 0 to 60 miles-per-hour in 3-seconds with a 100-mile battery range.

But it's not the hoontastic goal of having a speedy, battery-driven two-seater that's driving Mr. Wright. That kind of car won't save the planet.

If you want to make a dent in oil dependence and CO2 emissions, you need to target the vehicles that make up the biggest portions of those items. To Mr. Wright, that means pickup trucks.

Mr. Wright isn't picking on pickups. The native New Zealander proudly owns a used 1997 Ford F-350 7.3-liter diesel dually Super Duty that he uses to haul lumber, 12,000-pounds at a time, to a saw mill on his personal property. The truck has 178,000-miles on the odometer.

"If you want to do something about oil consumption, you can't ignore pickup trucks. The numbers in the U.S. go something like this: 69% of the oil we use is for transportation. 81% of that is highway transportation. Only 9% is air and 5% is marine. Rail doesn't count for much, only about 2%. If you look (more closely) at highway transportation, about 95% is trucks and high fuel consumption cars. Then, if you look at the truck portion only (about 57% of highway oil consumption), 95% of truck sales have 14,000-pound gross vehicle weight ratings or below [Classes 1, 2, or 3]. Big rigs are only around 250,000 out of 8,000,000 trucks sold. (Big rigs) do a lot more miles, but the fleet population is low. And big rigs are pretty good loaded on a gallons per pound/mile basis. An 80,000-pound big rig does well (fuel economy-wise). What aren't good are the pickups we drive. When I'm towing 12,000-pounds, it's not bad on a gallons per pound/mile basis, but when I drive it to work with just me in it, it still doesn't do better than 14 miles-per-gallon. Three out of the top five selling vehicles last year in the US were full size pickups, so pickups are a big opportunity to save oil for the US, because, to a first approximation, that's what people drive and to a first approximation, that's where all the fuel goes," describes Mr. Wright, outlining his position for focusing on pickup truck fuel efficiency.

Mr. Wright's solution to the low fuel economy ratings of pickups is to design a hybrid electric powertrain. The alternative engine technology developed would be licensed or built in cooperation with a third party supplier and sourced to the truck manufacturers during assembly.

Hybrid powertrains come in three flavors: parallel, two-mode, and serial.

Parallel hybrids are powered by an electric motor, an internal combustion engine, or both at the same time. General Motors used a parallel powertrain in the discontinued 'mild' hybrid GMT 800 Chevrolet Silverado. The truck shut its gas V8 engine off at full stops, running internal systems off a small electric motor, until the truck started moving again solely on V8 power. Toyota uses a parallel system too, for its Hybrid Synergy Drive cars, like the Prius and Camry. It's a sophisticated version of parallel technology, where the electric motor or conventional engine solely powers or moves the vehicle, or both motors work together, depending on engine load conditions. But parallel hybrids only swap or pair engines in low-speed driving conditions, like city traffic, so they are also called single-mode hybrids.

Two-mode hybrids use an advanced automatic transmission that determines whether to use an electric motor or the conventional engine, or both at the same time during low-speed and highway driving
- which is why it's called two-mode. This allows the vehicle to behave like it had a continuously variable transmission (CVT) so it can achieve optimal fuel economy at all times while driving. GM's new GMT 900 Chevrolet Tahoe SUV uses a two-mode hybrid powertrain because the system doesn't compromise much of the vehicle's all-around capabilities. It can still tow up to 6,000-pounds, only 1,000-pounds less than a conventional Tahoe. We'll see a new Chevrolet Silverado two-mode hybrid pickup by December 2008.

Serial hybrids use an electric motor to drive the wheels, while a conventional (e.g. diesel) or non-conventional (e.g. fuel cell) engine powers a generator. The generator either powers the electric motor directly, like a locomotive, or is used to charge a battery pack, which powers the electric motor. Using a battery in a serial hybrid does three things. Batteries can be plugged into the energy grid for recharging, making the vehicle a 'plug-in' series hybrid, like GM's Chevrolet Volt concept. Batteries enable driving for some distance without burning fuel, and they let the generator engine run only at its most efficient point, and any time the generator is running it's charging the battery. This is unlike an idling locomotive, stopped at a train station and burning fuel without purpose.

The advantage of a serial hybrid over the parallel and two-mode versions is that, within the battery's charge range, the vehicle is emitting zero exhaust and not using any oil. It also has fewer moving parts, even counting the generator, which means less vehicle maintenance and lower lifetime operating costs.

Mr. Wright favors the plug-in serial hybrid approach for heavy duty pickups.

"The Volt is where it's all going to go, eventually. It's the right development path. Of course, it doesn't have enough power (for a truck). It would be great if it had enough scale for a pickup truck," says Mr. Wright.

It's one thing to power a small family sedan, like the Chevy Volt, off a serial hybrid powertrain. But the large size and demanding power requirements of heavy duty pickups make it a more challenging proposition for use in a truck application.

My guess is that you can make a serial (hybrid) heavy duty pickup that weighs the same as a conventional diesel powered pickup. Its configuration will depend on how far you want to go with plug-in power versus how long you want to sustain power climbing a 15% grade towing 20,000-pounds, as to how you size the generator and the batteries. If you use a bigger generator, you can trade-off with a smaller battery pack," says Mr. Wright.

To limit the need for a bigger generator, the truck's chassis would be redesigned to squeeze more batteries around the bed. The live axle and leaf springs would be chucked in favor of an independent rear suspension, reclaiming wasted space beneath the cargo box.

Heavy duty pickup owners care as much about range as they do towing capacity, so they don't have to make frequent fuel stops hauling a trailer. Mr. Wright believes his system would provide at least a 300-mile range, with the same weight and towing capacity as current trucks.

"If you're going to build (plug-in serial hybrid) heavy duty trucks to compete with the current ones, you can't compromise on (towing, weight, and range)," says Mr. Wright.

Where compromise would occur is in the purchase price. A serial hybrid pickup won't be cheap, costing an estimated $20,000 or more than a conventional diesel powered truck.

"Cost is going to depend on the price of fuel. If fuel is $4.00/gallon and you're driving 25,000 miles per year, and you're getting 10-mpg towing, that's $50,000 over five years. If you did the same thing with a plug-in hybrid, using only grid power, it would be about $6,000. That means you could afford to pay quite a bit more for the vehicle," says Mr. Wright. He also expects a hybrid's lower maintenance costs to also provide further economic incentive.

But to Mr. Wright, the thing that makes pickup trucks such a good target is that most of the time they operate well under their maximum rated power.

"That's not an efficient way to build a car," he says. "You need to have the peak power to tow and accelerate, but most of the time you don't use it. Cylinder deactivation is one way of getting at the problem but it doesn't nearly solve it."

The electric motors and batteries would operate optimally across a wide range of power needs, from the equivalent of as little as 20-horsepower during 40-mph unloaded, steady state driving, to as much as 1000-hp for brief periods climbing a steep grade with a 20,000-lbs trailer.

It all comes back to fuel economy though, and Mr. Wright thinks poster-child green-tech vehicles like the Toyota Prius are a dead-end compared to pickups.

"Consider just one 10-mpg truck and one 50-mpg Prius," he says. "Drive them both 100-miles. The truck uses 10-gallons, the Prius 2-gallons. Improve the Prius to 100-mpg, drive another 100 miles. Now it only uses 1-gallon, you saved 1-gallon. But improve the truck by 12%. Now it does 11.2-mpg, and in 100-miles it will use 8.9-gallons, an improvement of 1.1-gallons. If you doubled the trucks mpg, from 10 to 20, you'll save 5-gallons, 5 times as much as doubling the mpg of the Prius."

Mr. Wright is predicting his approach will deliver fuel economy that's close to double today's figures while towing, and the equivalent of 80-mpg during unloaded, stop-and-go, commute-style driving.

"When you compound this effect with the higher sales volume of high fuel consumption vehicles like pickups," he says, "you can see why it's completely pointless to improve the Prius, and crucial to improve the trucks."

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