The Four Kinds of Plug-In Cars
NEW YORK (TheStreet) -- Plug-in cars will become an important part of almost every automaker's lineup in the next few years.
Thus, it is time to provide clear definitions of the different kinds of electricplug-in cars that are, or soon will be, available.
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There are four categories:
1.
Low-Performance All-Electric Cars
:
This category is what people often disparagingly call "glorified golfcarts." They are small and slow. They either can't go faster than 83 mph, take a long time to accelerate to that speed, or can't easily sustain that speed over varied and challenging terrain.
Cars in this kind of category include offerings from
Smart
and
Mitsubishi
today. These are primarily city cars that you don't want to drive far and fast on a freeway, because they become a pain to use if you take them over 65 or 75 mph. This is not to say that there isn't a role for these cars -- there is -- but it may notbe that big.
2.
High-Performance All-Electric Cars
:
The dean of this category is the
Tesla
(TSLA) - Get Report
Roadster, which became available in 2008. However, just because the Tesla Roadster is a relatively extreme sports car doesn't mean that's the proper definition of this category. Far from it!
All that's meant by "high-performance" here is that the car can go at least 83 mph, can accelerate to that speed quickly, and is able to sustain at least that speed across all sorts of hills. Being able to go 100 mph is nice, but few people need that. 83 mph to 100 mph is justfine.
The most common car on the road now in this category is the
Nissan
(NSANY)
LEAF, which has been in the market since December 2010. Almost 10,000 are on the road in the U.S. alone, and production capacity will be 500,000 per year exiting 2013. The current factory is in Japan, but the two bigger factories producing a majority of those 500,000 annual cars in 2014 and beyond are in Tennessee and in the U.K.
Production of the
Ford Motor
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Focus Electric started in Michigan in December 2011 and should see a few thousand cars delivered in the U.S. in 2012.
While there are plenty of differences, the big picture is that the Ford Focus Electric competes directly with the Nissan LEAF in terms of most metrics.
Around midyear 2012, the first deliveries of the Tesla Model S (sedan/hatchback) should be underway. This car will in most configurations cost more than 50% more than the Nissan and Ford above, with prices starting at $57,400.
This category will be very significant, with entries from almost every automaker in the world. It promises the greatest simplicity in combination with the best short-range performance. Most of these cars today have less than 100-mile average range, with the Tesla Model S offering the greatest range up to 300 miles in the most expensiveversion. As battery technology improves and costs decline, this could be the largest category by far over the next five to 10 years.
3.
Power-Split Extended-Range Plug-In Cars
:
The name alone is a mouthful. These cars have a gasoline and diesel engine to help drive the electric car for longer trips than the first 15-50 miles or so.
Here is the important finer details about the definition of this category: Even if the battery is fully charged -- or almost fully charged -- the gasoline (or diesel) engine will kick in if you accelerate hard or go above a certain speed. When it kicks in, the car will operate somewhat similar to a regular old-fashioned hybrid car -- splitting the power between the gasoline/diesel engine and the electric motor. This happens, say, if you apply the accelerator more than 65% or 75% of full power, or if you go faster than, say, 62 mph.
This is likely to be a popular category. The first car to hit the market with this configuration will be the
Toyota
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Prius Plug-In, and this will start before this quarter is over, in February or March. It can go only 15 miles or so on electricity, but only if you don't accelerate too hard or go too fast.
By December of 2012, the Ford C-Max Energi joins this category, and then in the first half of 2012 the Ford Fusion Energi. Surely there will be other cars in this category soon.
4.
Full-Power Extended-Range Plug-In Cars
:
This category includes cars that can operate on pure electric power for the full power band of the car, until the battery has been drawn down to a certain level. In other words, the gasoline or diesel generator will not kick in, no matter how hard you accelerate or howfast you go. You can floor the car to the max and go 100 mph and stay there, without the gasoline or diesel internal combustion engine kicking in -- until the battery has been drawn down, of course.
The two cars in this category are
General Motors'
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Chevrolet
Volt and the
Fisker
Karma. The Volt starts at $40,000, and the Fisker starts at $100,000. Add about 10% extra to load them up with all available equipment.
Now, I know that there are a couple of caveats here, but they are not terribly relevant to the definition. In the case of the Fisker, the driver can manually select to start the generator, and this will generate some extra power. However, this doesn't happen unless the driver engages this model using the steering wheel's paddle shifter. In the meantime, the car can accelerate plenty fast and achieve a high top speed without engaging this enhanced mode.
As for the Volt, the driver can also manually choose to engage the gasoline engine, but in that case it's only for the purpose of increasing the battery reserve, which in turn will give more endurance in terms of getting over a very long and/or steep incline, such as amountain pass. It's called "Mountain Mode" for this reason. You would engage this mode at least several minutes before you encounter this geographic challenge.
In addition, after the battery has been drawn down to a low level, the Volt will of course also engage the generator, which under certain conditions -- driving at a high and even speed -- will also divert some of its power to blend with the electric motors for driving the car, in addition to charging the battery. But again, this is not relevant to the definition of the car.
Basically, the Volt can execute the full performance envelope of the car on electric-only. For this reason, the Volt is in some way the most extreme engineering feat of any of the plug-in cars. On the one hand, 100% of the power is available as long as there is sufficientbattery power. That means that you can go as far as 25-50 miles on pure electric, no matter how fast you go and accelerate. Then, you can continue to go as far as you want, by simply refilling the 9 gallon gasoline tank, which at 37 mpg will extend your trip 333 miles(9 gallons x 37 mpg) per fill, similar to many gasoline-powered cars.
Tradeoffs
As Milton Friedman explained many decades ago, there is no such thing as a free lunch. A pure electric car has the advantage of ultimate mechanical simplicity. It means no fuel tank, no generator, no exhaust system, a simpler transmission, less weight, fewer vibrations, probably more space for the interior of the car.
Significantly fewer moving parts. But you will need a bigger battery, which is expensive, and it still doesn't allow you to refuel quickly enough for really long trips.
A range-extended plug-in car can go as far as any regular car, but you are adding the generator, an exhaust system, a fuel tank, a more complex transmission, a new form of vibrations, and all the weight and size to go along. There will be less space for people and theirluggage in the car. However, you can get away with a smaller battery, which saves money.
People who will need to go longer than 50-300 miles will get a range-extended plug-in car such as the Chevrolet Volt. People who don't need to travel longer distances will go for cars such as the Nissan LEAF, Ford Focus Electric or soon the Tesla Model S.
Conclusion
: They all will win.
There will not be any one winner here. All of these four major classes of plug-in cars will likely be in the market for many years. Over time, the high-performance pure electric car will likely become dominant, but this may not be reflected in sales in the next five to 10years, when the extended-range cars are likely to dominate.
For pure electrics to dominate, batteries need to become cheaper, and charging times need to be reduced. This will happen. It's just a matter of when. While we wait, companies such as Ford, Toyota and Chevrolet will satisfy the market with various classes of extended-range plug-in cars.
(In
, I showed how the unit growth rate in these categorieswill be approximately 600% from 2011 to 2012 in the U.S. alone.)
At the time of publication, Wahlman had no positions in stocks mentioned.
Anton Wahlman was a sell-side equity research analyst covering the communications technology industries from 1996 to 2008: UBS 1996-2002, Needham & Company 2002-2006, and ThinkEquity 2006-2008.
