Below is news of a new milestone in the commercilization of PHEVs: the first lawsuit among carmmakers. As awareness of the future market for PHEVs grows, the economic opportunities are leading to competition -- not only among large automakers. (For a few months in summer '07, we had a race between GM and Toyota about who hoped to be first, until Toyota backed off slightly -- see http://www.calcars.org/­carmakers.html )

Meanwhile, the small carmakers have an open field. (The large carmakers make clear they're watching closely -- GM's Bob Lutz attributes part of his motivation to push for the Chevy Volt to seeing his company outdistanced by Tesla.) Before we get to the lawsuit, we note some European developments:

FISKER: UK Auto Industry News has reported http://www.autoindustry.co.uk/­news/­11-04-08_11 that Fisker intends to sell its Karma PHEV in late 2009 in the US and in early 2010 in Europe. Also see The Car Connection: http://www.thecarconnection.com/­blog/­?p=1150

BYD: MotorTrend reports that the Chinese BYD (Build Your Dreams), which had previously announced plans to deliver PHEVs to the Olympics this summer and sell them this fall in China), hopes to expand to Europe Here's an excerpt from http://wot.motortrend.com/­6237544/­auto_news/­byd_china_looking_to_build_euro_hybrids_by_2010/­index.html :

Chinese automaker Build Your Dreams (BYD) is planning on using its experience in mobile phone battery development to construct dual-mode, gasoline-electric hybrid plug-in vehicles to be sold in Europe by 2010. Automotive News reports that company owner Chuanfu Wang indicated at last month's Geneva Motor Show that there is a strong potential market for BYD's hybrid cars in Europe. The Chinese automaker is in negotiations with several European car distributors for rights to the brand. BYD's gas-electric plug-in cars will use ferrous battery technology that is said to allow for an operating range of 110 kilometers, or about 68 miles, versus the reported 20 kilometers for the plug-in Toyota Prius, which uses lithium ion battery technology. This fall, BYD plans to sell their F6DM gasoline-electric hybrid in China, followed by the smaller F3DM hatchback hybrid. Both cars will carry a 5000 euro ($7800) premium over regular gasoline versions and will have a targeted production run of 2000 vehicles per month in 2009. Wang predicts the European market will demand upwards of 2000 BYD hybrids per month and is currently looking for locations to produce the cars in Europe to cut production and shipping costs. BYD's parent group, the BYD Group, already has battery production facilities in Romania and Hungary and will supply ferrous batteries.

FISKER/TESLA is the big news:

At a time when Tesla has just begun shipping small numbers of its first-generation all-electric Roadster, some people may not know that management has indicated it's likely the second-generation 5-passenger vehicle, code-named "Whitestar," will probably be a PHEV. (A "series hybrid" -- what GM calls an EREV for electric range extension vehicle -- in which, once the battery is depleted, the engine runs at constant speed to recharge the batteries, and only the electric motor powers the wheels.)

The original reporting on Fisker's role in designing Tesla's second generation vehicle seems to have come from Street Import Online http://streetimportonline.com/­sio/­tesla-motors-whitestar-body-originally-designed-by-fisker.html including the likelihood that the Whitestar would come in two versions: all-electric and series PHEV, with AutoBlog Green http://www.autobloggreen.com/­2008/­04/­14/­rumormill-fisker-designed-teslas-upcoming-whitestar-sedan/­ speculating that "The new sedan will start off as a battery-only vehicle but it is being designed to accommodate a range extended configuration as well."

Now The New York Times has details about Tesla's lawsuit against Fisker -- the story is below. Earth2Tech's blog explains the Silicon Valley alignment: http://earth2tech.com/­2008/­04/­15/­valleys-green-car-feud-tesla-sues-fisker/­ Tesla is backed by Elon Musk, VantagePoint Venture Partners, Draper Fisher Jurvetson and individual investors, including Jeff Skoll and Google’s Larry Page and Sergey Brin. Fisker, on the other hand, is backed by Kleiner Perkins Caufield & Byers and has KP’s Ray Lane on its board.

Here's the NYT story, which may be somewhat one-sided, since Fisker has chosen not to respond in the media.

Tesla Motors Files Suit Against Competitor Over Design Ideas
The New York Times April 15, 2008
By JOHN MARKOFF
http://www.nytimes.com/­2008/­04/­15/­technology/­15tesla.html

SAN FRANCISCO — Tesla Motors, the Silicon Valley maker of electric sports cars, filed suit in San Mateo Superior Court on Monday against a competing company and two of its employees, saying they stole some of Tesla’s design ideas and trade secrets.

Tesla, which has generated much interest among fans of cars and technology, recently started shipping a two-seat electric sports car in limited quantities. Last year it hired Henrik Fisker, a Danish-born designer who is known for his work on high-end exotic sports cars, to do the body design for a four-seat sedan, code-named White Star.

The Tesla lawsuit contends that Mr. Fisker and his chief operating officer, Bernhard Koehler, doing business under the name Fisker Coachbuild, fraudulently agreed to take on Tesla’s $875,000 design contract to gain access to confidential design information and trade secrets, then announced a competing vehicle. Last fall Mr. Fisker founded Fisker Automotive, which is backed by the venture capital firm Kleiner Perkins Caufield & Byers.

The quarrel sheds a light on the insular world of the Valley’s investors in environmentally friendly technologies. Sergey Brin and Larry Page, whose Google search engine was originally backed by Kleiner Perkins, were both early Tesla investors.

Both the planned Tesla sedan and Mr. Fisker’s recently announced Karma are meant to be hybrid cars using a small gas engine to power a generator that charges a battery, which in turn powers an electric motor. The design, known as a serial hybrid, is thought to greatly extend the range and efficiency of hybrid vehicles.

The Tesla lawsuit states that before doing the design work for Tesla, Mr. Fisker had no experience with hybrid technology. It says that he did substandard work for Tesla, essentially sabotaging it, and then used the revenue from the design contract to develop his company’s car.

“I think it’s ironic that Fisker chose to name his car the Karma, when what he’s done is very bad karma,” said Adam C. Belsky, a lawyer at Gross, Belsky & Alonso who represents Tesla.

Calls to Fisker Automotive were not returned. A person answering the phone at Finck & Dadras, the San Francisco law firm representing Fisker Coachbuild, said it was the firm’s policy not to comment on litigation.

Tesla executives said they decided not to use Mr. Fisker’s design and were starting over on the design for White Star when they discovered that Mr. Fisker was going into competition with them. The design switch caused a three- to six-month delay in production of the car, which is now scheduled to go on sale in 2010, the company said. Tesla is building a factory in New Mexico to manufacture the sedan.

“It caused a slight delay in White Star because we could not use the Fisker styling,” said Elon Musk, chairman of Tesla. “The styling was substandard compared to what he unveiled for his product. He gave us an inferior work product, and it’s obvious why.”

Tesla has scrambled to come up with a new design with some help from Lotus, the maker of the bodies for the initial Tesla Roadster. Mr. Musk said that he was leading the effort.

“‘I’m not really a car designer,” said Mr. Musk, who was one of the founders of PayPal and started SpaceX, a developer of spacecraft. “We’ll see what people think of cars designed by me versus Fisker; it’s the amateur versus the professional.”

The Tesla lawsuit seeks to stop Mr. Fisker from using Tesla design documents, along with a return of the money from the contract and unspecified punitive damages.

Having previously designed cars for BMW and Aston Martin, more recently Mr. Fisker has modified BMW and Mercedes-Benz luxury cars to create even more expensive custom cars that cost as much as $234,000. Tesla’s White Star is expected to cost between $65,000 and $70,000. The Fisker Karma, which is also planned for delivery in 2010, is expected to cost about $80,000.

At http://www.blogrunner.com/­snapshot/­D/­1/­8/­tesla_motors_files_suit_against_competitor_over_design_ideas/­ you can see blogs and other reports linking to the Times story.