Jan 24, 2008 (From the CalCars-News archive)
Developments from Wal-Mart, Project Better Place and Tesla may appear to be in the category "And now for something completely different" -- but they're not: each in its own way is earth-shaking.
TODAY'S NEWS FROM WAL-MART COULD BE A GAME-CHANGER!
Whatever you think of the company's global impact, employment and health policies and other controversies, it's clear that its efforts to build sustainability and awareness of carbon footprint to its business practices, supply chain, facilities, products and go well beyond what even the wary would call "greenwashing." Here's the latest:
"The Company of the Future" -- Remarks As Prepared for Lee Scott, CEO and President of Wal-Mart Stores, Inc.at Wal-Mart U.S. Year Beginning Meeting January 23, 2008 *DELIVERY MAY DIFFER FROM WRITTEN TEXT* http://www.walmartfacts.com/articles/5625.aspx
27 months ago today, I spoke with you about leadership in the 21st century. I discussed a range of issues where we could lead and set specific goals to guide our progress.
With the environment, we said that our goals are to be supplied 100% by renewable energy, to create zero waste, and to sell products that sustain our resources and our environment. We also pledged to become more engaged with working conditions in factories, to work for more affordable and accessible health care for associates and customers, and to reflect to an even greater extent the diverse needs and nature of the communities we serve.
Like health care, one of the biggest issues in the world today is the rising cost of energy. It is on the front page of every newspaper. Every presidential candidate talks about it in his or her speeches. And they all wrestle over who has the best plan to reduce energy costs when they debate. But so much of this talk is either about geopolitics that are difficult to change or technology that is years away.
Every day in our stores, we see the impact of $100 a barrel oil and high natural gas and electricity prices. We see our customers having to choose between filling up their gas tanks or buying food and medicine and clothes. In America, out of pocket energy costs for working families have doubled over the past decade. These families now spend an estimated 17% of their monthly income on energy. Somebody has to do something. And your Wal-Mart will.
Let me ask you this: What if we extended our mission of saving people money so they can live better -- to saving people money on energy? We believe we can do this. Wal-Mart can help our customers use less energy and spend less on energy. This will also help every country where we operate reduce their dependence on foreign oil.
Our first commitment has to do with products that we sell. A household is made up of hundreds of items that contribute to energy use -- sometimes wastefully. Microwaves, televisions, computers and portable phones, for example, draw standby power even when they are not in use. Energy is also wasted when heat leaks out of our homes and cold leaks in.
Now let me turn to something that you might think is completely out there. I have been talking with the heads of the major auto manufacturers over the past few weeks. And I have been asking them if there is a place for Wal-Mart in the hybrid electric or plug-in electric car market, so our customers do not have to spend so much money filling up their gas tanks. Maybe there isn't room for Wal-Mart in this right now. But something tells me that there may be some role for us in the future, and we are going to continue taking a look at this.
Let me throw another idea out there. What if we looked at whether Wal-Mart could provide eco- friendly energy to our customers? What could we do in the U.S. -- where per capita energy use is among the highest in the world?
Imagine your customers pulling into your parking lot, and seeing wind turbines and solar panels, and being able to charge their cars while they shop. I think that would make them feel good about shopping at your stores. It would also make them feel good if they could save money in the process. What if we fed the power generated by those wind turbines and solar powers back into the electrical grid? Just imagine the impact of our customers being able to buy eco-friendly energy at the unbeatable Wal-Mart price.
Everything I have talked about will help our customers use less energy and spend a smaller portion of their hard-earned money on energy. We also want to work with our suppliers to help them use less energy too. Working together, we believe our suppliers can reduce the amount of energy they use to make our products by 20%.
Of course, all these efforts will also help the environment and address the challenge of climate change. Taking waste and non-renewable energy out of our supply chain reduces the amount of pollution and greenhouse gases our suppliers send into the atmosphere. Helping customers buy more sustainable products and be better stewards of the environment reduces their own carbon footprint. This is something that I think all of us can be proud of.
See also Bloomberg News report with background and comments: Wal-Mart Chief Spoke With Carmakers on Hybrid Sales http://www.bloomberg.com/apps/news?pid=20601103&sid=alRNqZ5W5UrU&refer=us
PROGRESS ON EVs Part 1: Project Better Place We've been following the progress of this important new startup with great enthusiasm. (See our October posting http://www.calcars.org/calcars-news/869.html .) Its message: there are 'transportation islands" where most travel is short distances and all-electric vehicles are very practical nowl, and the issues about extended range that fuel the interest in PHEVs are not relevant, has started many people thinking -- as has the news that Founder Shai Agassi raised $200M to prove his point. The company's business model, leasing the batteries, entirely removes the main risk factor and objection presented by car companies. Last week came the most important developments yet: announcement in Israel that the Renault-Nissan Alliance will build electric versions of its Renault Megane, followed by ground-up EV designs for Project Better Place. And many different parts of the Israeli government have come together to create the basis for the market success of this project. (We, like many others, are still suspending judgment on the "battery swapping" idea, which may be hard to implement.) Read about it at:
- http://www.projectbetterplace.com/ The company's home page
- http://www.evworld.com/article.cfm?storyid=1390 Interview with Michael Granoff (a long-time CalCars supporter) who helped bring together investors and some of the players in Israel. This story describes how the government dropped the 72% tax for internal combustion cars to 10%. And the story explains the economics that could enable the company to give customers who sign long-term agreements their cars for free, following the cellphone model: give the phone away, sell the service. (To read this article, you need to subscribe to EVWorld @$29/year -- which we hope you readers of CalCars-News decide to do -- the only thing we'd wish more is that you send CalCars a tax-deductible contribution at http://www.calcars.org/sponsor.html .)
- http://www.nytimes.com/2008/01/22/opinion/l22ethanol.html Granoff's great short letter published in the NYTimes
- http://www.nytimes.com/2008/01/21/world/middleeast/21israel.html -- NY Times story (by a reporter on the international, not the automotive or environmental beat)
- http://shaiagassi.typepad.com/ Agassi's "The Long Tailpipe" blog has his launch speech, his thoughtful comments a day later on what it all means (in the form of a speech at the World Economic Forum in Davos, where he first started thinking about the project four years ago), and a wonderful 2.5-minute video for fifth graders that can inspire people of all ages.
- http://www.ourpower.org -- at Our Power (Silicon Valley Leadership Group's PHEV organizing center) thanks to former Novellus CEO Novellus Sass Somekh, another CalCars supporter working also with Project Better Place, Shai Agassi has signed up as one of several dozen "movers and shakers" who's in the market for a PHEVs as soon as possible.
PROGRESS ON EVs Part 2: Tesla Motors (and Series PHEVs)
Those who have been following Tesla Motors know that it's had engineering and management challenges -- but we are all hoping that this company, which has done so much to change peoples' expectations for what plug-in cars, will have a great 2008. Motor Trend's review at http://www.motortrend.com/roadtests/alternative/112_0803_2008_tesla_roadster says "I'm being eerily teleported down the barrel of a rail gun, head pulled back by a hard, steady acceleration. Bizarre. And before too long, profoundly humbling to just about any rumbling Ferrari or Porsche that makes the mistake of pulling up next to a silent, 105-mpg Tesla Roadster at a stoplight." Car&Driver, Road & Track etc. will follow. AutoWeek's drive review starts with the headline, "Don't worry about the future of transportation being fun" http://www.autoweek.com/apps/pbcs.dll/article?AID=/20080124/FREE/398811820/1024/FREE and ends "That car is set to be unveiled 'in the first half' of this year. It will be followed by a compact car and, ultimately, a whole range of electrics taking over the earth. Maybe the earth could use something like that." Edmunds' Green Car Advisor reports the company will start deliveries March 17 http://blogs.edmunds.com/GreenCarAdvisor/189 .
It has not been widely reported that the current management of Tesla says the second generation Whitestar may be a PHEV. Here's Tesla's Chairman of the Board, Elon Musk, blogging on the subject back in December http://www.teslamotors.com/blog2/?p=54 " As was alluded to in the customer town hall meeting last week, Tesla will likely provide both pure electric and range extended electric drive options in the future. We refer to the latter as a REEV (Range Extended Electric Vehicle) to distinguish it from "hybrids," which are really just gasoline engine cars with a small electric motor and tiny battery. The REEV battery in our scenario would fully cover the range needs for reasonable daily usage, but there would be an onboard generator for the occasional long trip.
It's also interesting that Tesla's co-founder, Martin Eberhard (no longer with the company), is also paying lots of attention to PHEVs. He provides confirmation from his end to media reports of Bob Lutz saying that watching Tesla helped motivate GM to begin the Volt project. Here's a story at Edmunds followed by Eberhard's blog posting.
Former Tesla Guru Offers His Take on the Chevrolet Volt
Date posted: 01-15-2008
DETROIT - Martin Eberhard, the deposed co-founder of Tesla Motors, is putting in his two cents about how General Motors should proceed on a commercially viable version of the electric Chevrolet Volt. In a posting late Monday, Eberhard suggests that the Detroit automaker consider an "interim" solution for the Volt in the form of a range-extended electric vehicle (REEV) priced around $35,000.
"The REEV concept is a good one for the interim, until nanotech (or whatever) batteries come along and whack the price of batteries down by at least a factor of two and increase the capacity by something like a factor of two," he writes.
His vision centers around a vehicle with a small gas engine of about 75 horsepower, "plus its various support systems plus a generator and a rectifier" that will "cost only about $1,000 more or less."
"Think about the cost," Eberhard said in a posting entitled "Getting from Here to There." "A battery pack that goes 50 miles will cost more like $5,000. Add in the generator system and you are still talking about at least $14,000 saved per car - making a $30,000 (or maybe $35,000) Volt is suddenly possible."
Eberhard admits that such a setup is an "imperfect solution.... But the REEV is something that GM could make today," he insists. "With its forecasted price and driving range, many people will buy them; it will out-green the [Toyota] Prius for sure. And as batteries improve over the years, the range extender will be used less and less until it can go away."
Perhaps of even more interest is the fact that Eberhard said he met with GM Vice Chairman Robert Lutz in his "palatial office in the GM tower" about a year ago. "This is when he told me that he started the Volt program in direct response to the Tesla Roadster," Eberhard claims.
"I walked away from that meeting deeply impressed by Bob Lutz and willing to believe that the Volt might be a real program," he said. "Over the past year, I have come to meet several more people on the Volt program. Hold onto your seats, people: I believe that the Volt program is real, with top GM talent moved onto the program, major bucks behind the program, and support all the way to the top within GM. I think GM is placing a huge bet with this program."
As of early Tuesday morning, Lutz had yet to fire back a response - or a job offer - from his bully pulpit, the GMFastLane blog.
What this means to you: Eberhard informally submits his impressive resume to Bob Lutz via the Internet. - Anita Lienert, Correspondent
Getting from Here to There
January 14, 2008, 10:39 pm
Plus 344 comments as of 1/24/08
Many people have asked me what I think about the Chevy Volt both about the vehicle as it is conceived and what I think about GM's intentions. What I say might surprise you who know me as the vocal advocate of the pure battery electric vehicle (BEV).
Second things first: I saw Who Killed the Electric Car. Man, that image of the Hummer overtaking the EV1 is hard to get out of my head. With this in mind, I assumed that the Volt was pure eyewash they killed the EV; their hybrid efforts were lame compared to Toyota's; they have invested a jillion dollars in fuel cell (fool sell) programs. What would make me think the Volt was real?
Just about a year ago, I had the pleasure of meeting Bob Lutz at his palatial office in the GM tower. We spent a good couple of hours talking about battery-electric vehicles, and what it would take to make them happen. This is when he told me that he started the Volt program in direct response to the Tesla Roadster. I thought this would be a story nobody would believe until he said the same thing in the press!
My motivation for talking to him was mostly to try and nudge GM towards change. His motivation seemed to be to learn as much as he could from me. This was okay by me GM mass-producing EVs is good for the world because of the sheer number of cars they can sell, and good for Tesla Motors because it validates the market in the eyes of the consumers and the press.
I walked away from that meeting deeply impressed by Bob Lutz and willing to believe that the Volt might be a real program. Over the past year, I have come to meet several more people on the Volt program. Hold onto your seats, people: I believe that the Volt program is real, with top GM talent moved onto the program, major bucks behind the program, and support all the way to the top within GM. I think GM is placing a huge bet with this program.
And I think this is an unbelievably good thing. Imagine if GM leapfrogged Toyota and the Prius. Imagine serious competition over who could make the most fuel-efficient car, with GM as one of the players.
Okay, how about the whole concept of a Range-Extended Electric Vehicle (REEV, no apostrophe)?
Like so many of you, I think the future of cars is pure electric. But the REEV concept is a good one for the interim, until nanotech (or whatever) batteries come along and whack the price of batteries down by at least a factor of two and increase the capacity by something like a factor of two.
The battery pack for a mid-sized electric car with a 200+ mile range, using best-of-breed existing (I mean actually shipping) batteries will cost about $20K, best case. Obviously, you can't make a $30,000 list price car around a $20K battery pack…
But a small gasoline engine (say 75 hp) plus its various support systems plus a generator and rectifier will cost only about $1,000, more or less. Can this offset a significant portion of the battery pack cost while still making a difference in gasoline consumption?
Think about the cost: a battery pack that goes 50 miles will cost more like $5,000. Add in the generator system, and you are still talking about at least $14,000 saved per car making a $30,000 (or maybe $35,000) Volt is suddenly possible.
Now consider that 50% of all miles driven by Americans are on trips shorter than 50 miles. The numbers are even better in large urban areas like LA. This is the key: these trips should all be electric.
Many EV owners will argue that 50 miles' range is actually not that big of a limitation. But I am firmly convinced that the idea of such limitation is the single biggest reason past EVs never sold well. Not the reality of how far people drive, mind you, but the idea of the limitation.
If the Volt can allow for true plug-in electric driving for those short trips, while giving potential buyers confidence that they can take a long trip whenever they want to, this will be a HUGE improvement in gasoline consumption.
It's an imperfect solution, but the REEV is something that GM could make today. With its forecasted price and driving range, many people will buy them; it will out-green the Prius for sure. And as batteries improve over the years, the range extender will be used less and less until it can go away.
If the Chevy Volt was available on the market today, I would definitely buy one. (But I sure as heck would not lease one. Nobody's going to take mine back and crush it!)