March 1, 2010

Electric Vehicles: The Uncertain Road Ahead

Angela Neville, JD

"Diversify, diversify, diversify." That has long been the mantra of many Wall Street pundits when advising investors on how to weather the risks of the stock market. Now advocates of electric vehicles (EVs) are using this same logic to champion plug-in hybrid electric vehicles (PHEVs).

After the dizzying roller-coaster ride of oil prices in 2008, when prices spiked at $147 a barrel, many now see the logic in trying to transition at least a portion of the U.S. vehicular transportation sector from its sole reliance on petroleum to the use of electricity, which is fueled by a variety of sources, including coal, nuclear, natural gas, and renewables.

PHEV Pros and Cons

PHEVs (aka, grid-enabled vehicles) combine the benefits of pure EVs and hybrid EVs. Like pure EVs, PHEVs plug into the electric grid and can be powered by stored electricity alone. Like hybrid EVs, they have gasoline-powered engines that enable greater driving range and battery recharging.

The Electric Drive Transportation Association (EDTA), an EV advocacy group, said recently that PHEVs and extended-range electric vehicles are expected to be developed this year by General Motors, Toyota, Chrysler, Fisker, and BYD. The group points to several advantages that PHEVs have over traditional vehicles: the use of cleaner electric energy such as that fueled by natural gas; optimized fuel efficiency and performance; recovered energy from regenerative braking; "home-based" battery recharging at a fraction of the cost of petroleum equivalent; reduced tailpipe emissions; and pure emissions capability.

The EDTA, however, does acknowledge the current challenges that PHEV technology faces: the higher initial cost, the cost and complexity of two power trains, the added weight, the cost of batteries and battery replacement, and the lack of available components such as batteries and power trains.