Kyle's Corner (FYI) Will Electric Cars Just Fill a Niche or Will They Be Here to Stay?

We hear about electric cars coming but when they finally arrive,
will fuel prices be $1.25 again? All kidding aside, electric vehicles
need to get here!

In 1995 Joseph Bower and Clayton Christensen at the Harvard
Business School coined the term "disruptive technology." They
say that it is "... an innovation that fulfills the requirements of some,
but not most, consumers better than the incumbent does. That gives
it a toehold, which allows room for improvement and eventually,
dominance. The risk for the incumbent firms is that of the proverbial
boiling frog. They may not know when to switch from the old to the
new until it is too late." Is this the way it will be with the electric car?

The internal combustion engine has dominated the roadways for
a century, but in the last year or so a small number of pure electric
vehicles are being readied to come on the market. These electric
vehicles are manufactured by small new companies as well as more
established manufacturers. However, some of the big automotive
players, pushed by legislative mandate and lower emissions, are
jumping out of the boiling water to join the electric vehicle race.
These electric vehicles are a big part of the current Frankfurt
Auto Show.

The cost of lithium-ion batteries has come down to the point
that electric vehicles are within affordable striking distance for
consumers. Nissan will soon be releasing an all electric car (the
Leaf) that will have either a 100 mile or a 200 mile range. The car
will be competitively priced and the consumer will lease the barriers
The batteries are about one-half the total cost of an electric vehicle.

Other approaches to electric cars include vehicles with a limited driving
range that are targeted for city driving or short commuting. Next is the
addition of a small gas or diesel engine to generate electricity and extend
the vehicle's driving range. A third approach is to have battery swap
stations on the highways. Robots would reportedly swap depleted batteries
with recharged ones in a matter of seconds. For this to work effectively,
vehicle battery packs would need to be standardized. As suggested above,
leasing the batteries significantly lowers the price of an electric vehicle.
Additionally, leasing takes the risk out of a battery pack going wrong.

One thing to keep in mind is that as electric vehicles come to market
and less gasoline and diesel fuel are used, the price of these fuels should
come down. Therefore, the price of electrics will have to come down
even more to provide a savings over present fuels.

Some people suggest that electric vehicles will drive up the price of
electricity and the consumer will again be held hostage from another
type of energy. However, it is possible that with two players in the
market (conventional fuel and electricity), each will keep the price of
the other in check because if one form of energy gets too pricey,
consumers would shift to the other.

How do you think the whole thing will shake out?

Kyle Busch is the author of "Drive the Best for the Price..." He
welcomes your comments or car questions at his auto web site:
www.DriveTheBestBook.com.
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