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SACRAMENTO - More than a third of new car buyers in California would purchase reasonably priced zero emission electric vehicles if more of them were available in showrooms, according to a new survey of car buyers in the nation's largest auto market.

Some 33.4 percent of those polled said they would buy an electric vehicle as their next car purchase if that vehicle were priced close to the same price as a gasoline vehicle.

Part of a study titled "The Current and Future Market for Electric Vehicles," the survey of 934 California new car buyers was conducted in July 2000 by the non-profit Green Car Institute and The Dohring Company automotive market research firm on behalf of the California Electric Transportation Coalition (CalETC). The survey has a margin of error of plus or minus 3 percent.

The poll results were released during hearings this week before the California Air Resources Board (ARB), which is set to decide whether to maintain or modify California's long-standing Zero Emission Vehicle production requirements.

The study results sharply contradict auto industry statements to the ARB in recent months that there is little consumer demand for electric vehicles.

"This is the study the auto industry didn't want to see," says David L. Modisette, executive director of CalETC.

"This study used the same research methodologies employed by the auto industry to identify markets for its gasoline vehicles. The results show there is a very strong consumer market for EVs in California, a demand automakers either don't want to believe or want to go away," Modisette says.

The study shows that the annual consumer market for EVs is between 12 and 18 percent of the new light-duty vehicle market in California. This equates to annual sales of approximately 151,200 to 226,800 electric vehicles, a potential market some seven to 10 times larger than the estimated 22,000 vehicles required to be sold in 2003 under current California regulations.

Other key findings in the research are that car buyers want to be able to buy EVs rather than lease them, and that EVs need to be tailored to consumer tastes in size, features and functionality.

Current EVs are only available for lease. If that limitation were kept, almost 40 percent of those who said they wanted to buy an EV would switch to a gasoline vehicle.

When asked what body style they would prefer for their electric vehicle, those polled responded overwhelmingly (53 percent) in favor of four- or five-passenger sedans that include the amenities found in gasoline vehicles. The finding isn't surprising since the most popular gasoline cars in the state are four-door sedans like the Toyota Camry and Honda Civic.

"Consumers have indicated they can deal with a contemporary EV's range limitations if pricing is reasonable," Modisette says. "Moreover, the public clearly needs more information and education about EVs than has been available to date."

In the study, about 50 percent of the consumers who wanted to buy EVs said they would accept a vehicle with a 60-to-80 mile range-per-charge.

In a related study of how the auto industry arrives at the publicly stated costs and showroom pricing of electric vehicles, Green Car Institute concludes that automakers are not using pricing to create a market for EVs.

"EV costs presented and prices used to market EVs during the past few years by automakers appear to be high, perhaps saying more about auto companies' feelings about proposed government regulation than about electric vehicles themselves," the study reports. "Setting such high initial prices is not the typical auto industry method of introducing a new vehicle."

The high initial prices of EVs fail to take into account historic precedents of subsidizing the cost of vehicles deemed important to an automaker's overall marketing program or corporate positioning, the study says. Also, as Honda and Toyota have shown with the pricing of their hybrid models, auto companies will endure short-term losses to establish a new and potentially growing market segment.

"Whether it was musclecars during the '60s, sports cars in the '80s, or now electric cars in the new century, a car that becomes a key part of the company's basic image receives corporate support with less expected in terms of program return-on-investment. The high EV prices belie a committed attempt to establish and build a market for EVs," the study concludes.

EV pricing does not have to be at a complete parity to comparable gasoline vehicles, either, the study found. The hybrid model pricing is a good example of an historical trend. While higher priced than similar-sized gasoline models, both Toyota and Honda priced their hybrid cars well below their cost in order to build a market for the new technology. In market research of California consumers wishing to buy EVs, GCI also found that 70 percent were willing to pay a premium for an electric vehicle.

Says Modisette: "Clearly, the auto industry can sell a lot of electric vehicles in California if it wants to. Consumers want them. The pricing needs to be reasonable to build a market."
http://biz.yahoo.com/prnews/021115/phf019a_1.html

Hydrogen and Electricity Co-Production Station in Las Vegas.

The world's first hydrogen energy station featuring the co-production of

hydrogen fuel and electric power was formally dedicated and is operational,

generating hydrogen on-site that is utilized both to fuel vehicles and

produce electricity. The project, a public-private partnership between the

United States Department of Energy (DOE), the City of Las Vegas, Air

Products and Chemicals, Inc. and Plug Power, Inc., will serve as a

commercial demonstration of hydrogen as a safe and clean energy alternative.
http://www.questairinc.com/pressreleases/2002-11-15.htm

QuestAir's Hydrogen Purifier Installed in Las Vegas Station.

QuestAir Technologies Inc.'s commercial HyQuestor® hydrogen purification

system has been installed as a key component of the Hydrogen Energy Station

in Las Vegas, NV, the first integrated hydrogen vehicle fueling and power

generation facility in North America. As deployed in the station,

QuestAir's HyQuestor® system purifies a hydrogen containing gas stream

extracted or 'reformed' from natural gas. The purified hydrogen is then used

to fuel City of Las Vegas transit buses and other vehicles, or a stationary

50kW fuel cell electricity generator.

Enova to Assist in the Development of Process Control Systems.

Enova Systems has concluded an agreement with a unit of ChevronTexaco

Technology Ventures to assist in the development and manufacture of a

process control system for ChevronTexaco Technology Ventures' hydrocarbon

fuel processors for stationary fuel cell applications. The agreement

contemplates that the initial development program may lead to manufacturing

if the prototype proves to be commercially viable.

Dec 2, 2002 Eclipse's Market

The Economics Of Innovation...

After creating the jet and proving the market, development of the Eclipse 500 has hit a hurdle of potentially grand proportions with their announcement last week to part ways with the engine their aircraft was built around. While the state of affairs at the company will prove itself in the coming months, some 1357 orders manifest not only interest in the design, but faith to the tune of $65 million in non-refundable deposits. Of the backlog, Eclipse CEO Vern Raburn said, "To our knowledge, the Eclipse 500 order book is greater than that of any single civilian jet in the history of aviation." Each one of those orders the company had planned to fill by 2006. Each one of those buyers expected certain performance and operating costs, which, generated around the Williams EJ22, were pegged at 56 cents per mile. Those figures and others are now more uncertain. The economic inconvenience of Eclipse's engine trouble could extend beyond that of buyers if production of the jet is significantly delayed. The city of Albuquerque is investing $30 million in infrastructure, in part to accommodate Eclipse at Double Eagle II Airport, where Eclipse plans to employ some 750 employees who might ultimately play a part in putting out a projected 1,500 Eclipse 500 jets per year. Unfortunately, without engines, it's not a jet ... it's a glider. Clearly Eclipse will work swiftly to remedy the potential damage of such a perception lest it becomes reality -- if only in the fears of potential buyers.

For Eclipse, which long held their cards close to the vest in part to avoid having their labors and market research become their competitors' best friend, it seems their hand is now flat on the table. Projecting confidence in this position, Raburn told The Albuquerque Tribune, "There is still no alternative to this airplane." But then, "this airplane" no longer exists -- the one that replaces it may share its form, but the extent of re-engineering necessitated by heavier, costlier, less-efficient or just plain different engines is yet unknown and that has some possible buyers wondering. Chris Stevens, who had plans for 2004 to launch start-up jet taxi service in Fort Worth, Texas, flying leased Eclipse 500s, thinks, "Eclipse's problem is that all their economics are hung right on this engine and (Williams') technology." Stevens' opinion is that without the EJ22, Eclipse can't make the same claims. Stevens is now considering his other options, such as existing Citations or the forthcoming six-place Cessna Mustang. The Mustang -- which shares similar performance specs with the no-longer-relevant EJ22-powered Eclipse 500 -- aims for type certification in mid-2006 and first deliveries late that year. At $2.29 million, the projected Mustang-to-Eclipse price ratio is close to 3:1.

While GA revolutionaries wait breathlessly in the wings for Eclipse to fit a new engine, the folks at Safire ... and their light six-place S-26 ... might have a slightly more upbeat take on the whole thing. Safire announced early last month that it had secured funding through first flight for development of their own unique six-place jet. "The funds committed will allow Safire to move forward at full speed toward completing the design and building the prototype for first flight," according to a company press release; the funds arrive compliments of a "Swiss syndicate." Safire's aircraft offers six-place seating plus a lavatory and may be carried aloft by two Agilis TF1000 engines (or something similar) -- an engine that weighs in at three times that of the EJ22 for 250 pounds more thrust and is scheduled for certification in 2005. At this time, the company is still finalizing their plans for production -- and has yet to claim a location for those facilities. Once in production, the company intends to craft as many as four aircraft per day offered at an asking price near $1 million. The carrots are still dangling, and the wait for a revolutionary six-place jet goes on.

http://evworld.com/update/archive.cfm?id=51

California With Its Back Against the Wall

For the South, the American Civil War was about "state's rights." This is the long cherished political notion that the individual states making up the Union have the right to exercise governance over their citizens on issues that directly pertain to their well-being. The debate over how much authority the federal government can exercise over and above this has been argued since before the Constitution was written. The issue of slavery was only the match that lite the slow-burning fuse that explored in the bloodiest war in America's brief history.

Why the lesson in American history? Because "state's rights" is now largely at the core of the debate over the California ZEV Mandate and more recently enacted "greenhouse gas" bill. What the auto industry and its White House supporters are arguing is that federal legislation governing fuel economy has precedence over any legislation enacted by an individual state.

Because fuel economy and tailpipe emissions are so closely inter-related, it's nearly impossible to write regulations for one without impacting the other. Yet, this is what California attempted to do in an effort to improve quality of air in the state and thus the health of its citizens. But if carmakers and their White House allies have their way, no state, especially California, will be able to protect its citizens from the continuing encroachment of ever-wider federal control, not to mention air pollution

So, the public workshop that will be held in Sacramento this week to discuss CARB's responses to carmaker lawsuits will be as much about the historic issue of "state's rights" vs. federalism as it is about zero emission vehicle technology. I don't expect rebel Californians to fire on the Presidio, but at some point, people are going to get fed-up with an administration that seems to continually side with polluters and corporate donors at the expense of national security and clean air. The match that lights this fuse could ignite a powder keg of resentment towards spreading federalism that may someday rock the foundations of our political system.
An open letter from the co-chairman of Production Electric Vehicle Driver's Coalition. November 30,2002

http://evworld.com/databases/storybuilder.cfm?storyid=458&subcookie=1

By Greg Hanssen greg@pevdc.org

This Thursday (Dec 5th) the California Air Resources Board (CARB) staff will conduct a "workshop" in Sacramento to discuss possible changes to the California Zero Emission Vehicle program. Staff has already proposed many of these changes in a preliminary "strawman" document.

This workshop will be the one chance the public has to influence the direction the final proposal will take. Staff is looking for input from the public in order to assemble the final proposal for the air resources board members. The strawman proposal is merely a start for the discussion. When the final proposal is published in January before the February board hearing, the board will have little flexibility to make major changes in the regulations. Now is the time to stress the need for sustained vehicle availability and diversity of product and technology.

BACKGROUND

Before I get into the details, I'd like to give you a little of the background from my perspective. In the early 90s CARB set out to have 10% of all cars sold in California be zero emissions by 2003 with smaller requirements in 1998 and 2001. General Motors set out to build a business around a small lead acid battery based sports car. I doubt the GM board would have approved the EV1 project had there not been a sense that with the right volume, the project could have turned a profit. Honda was also developing an EV dubbed the CUV4 using lead acid batteries. Several auto makers including Mitsubishi and Volvo were promoting the idea of electric vehicles with gasoline "range extenders". CARB decided that being able to put gasoline in a battery EV's range extender was considered a defeat device and did not encourage the idea. This coupled with the multiple delays in the mandate likely set back the plug in hybrid concept for many years.

By 1996 under extreme pressure from the auto makers, CARB caved on the requirements for 1998 and 2001 and started a general downward slide which culminates with the latest staff proposals. The requirements for 1998-2002 were replaced with a "Memorandum of Agreement" (MOA) to build a small volume of vehicles with advanced batteries. GM added NiMH batteries to their 2nd generation EV1 (and S-10 electric truck) and built just enough to satisfy the MOA. Honda put NiMH batteries in their CUV4 (calling it the EV+) and built just enough for the MOA. Other auto makers similarly built just enough vehicles to satisfy the MOA, mostly converting existing gasoline vehicles.

By the end of 2000, most MOA vehicles had been placed and the market was heading towards severe shortages with many people stuck on waiting lists for vehicles. ARB tried to encourage placement in 2001 and 2002 but ended up with thousands of 25mph Neighborhood Electric Vehicles by the big 3 in Detroit. GM canceled their EV1 program, Chrysler canceled their Epic minivan program but there was still hope that Ford would produce the small Th!nk City vehicles. Nissan didn't have a large requirement but went ahead and built 200 more Altra electric station wagons for fleet use. To many peoples surprise, Toyota opened up their successful RAV4-EV fleet program to consumers. With the exception of a few fuel cell prototypes, Honda was the only major OEM of the 6 to blatantly disregard the board's 2000 ruling to maintain some ZEV requirement for a mandate in 2003.

In mid 2002, two lawsuits filed by GM and Chrysler resulted in preliminary injunctions against enforcement of the mandate in 2003 and 2004. With two extra years to deal with the mandate, many auto makers relaxed their plans. Ford decided not to go ahead with production of their Th!nk City vehicle. The future of the Toyota RAV4-EV and Atlanta's E-motion mobility City EV may also be jeopardized by the 2 year legal delay from 2003.

THE FUTURE OF ELECTRIC VEHICLES

Why all the doom and gloom? Most people attribute the downfall of the battery EV to two things. public demand and cost.

When GM and Honda complained that it was difficult to sell more than a very small quantity of battery EVs, the EV drivers countered with the sparse advertising and spotty availability of the few battery EVs made available to consumers. Now Toyota is telling CARB that it was difficult and costly to move the 270 RAV4-EVs this year. While the sparse advertising and spotty availability are still true, it is difficult to avoid the fact that significantly larger sales volumes will not be reached in the near future without a large public education and awareness campaign. The state of California cannot currently afford such a campaign and no auto maker is willing to put up millions of dollars to promote a small quantity of vehicles. It is interesting to point out that range extended BEVs (A.K.A. plug in hybrids) or fuel cell vehicles would likely suffer a similar fate without a huge awareness campaign.

The one thing we've learned over the last few years is that when people are properly exposed to battery EVs, their willingness to try the technology increases dramatically. What does this mean? The EV drivers are the best advertising available for EVs. I have faith in the future of battery EVs mainly because I have seen many people who initially shunned the idea but eventually embraced BEVs after being adequately exposed. Most of the people on waiting lists in 2000 were not early adopters so much as friends, relatives or coworkers of the original early adopters. The message here is that while the market may not be large now, it WILL grow with continued availability. The ONLY way to grow this market or any other alt-fuel market is to have consistent, prolonged availability of product from multiple sources. Paradigm shifts such as this don't happen over night.

The other big complaint is cost. Despite the small funding for large battery systems in the last few years, there HAVE been improvements in battery performance, battery life and reductions in cost. In the same way it is difficult to say there is no market for City EVs when City EVs have never been marketed, it is difficult to claim that batteries have not improved when improved batteries haven't been tried in production! This is however a big catch-22 situation. We can't get dramatic cost reductions without large volumes. This is true for many other technologies as well. CARB has to realize that because of the market, there will not be large volumes for several years. If CARB backs down on battery EVs now because they are expensive, will they also back down on fuel cell vehicles several years from now because they are too expensive? What is the point of having a ZEV program if we can't put the pressure on the manufacturers to innovate and build these markets? Maybe the "miracle" battery is not here yet. but neither is the "miracle" H2 storage system, or miracle fuel cell platinum replacement or miracle hydrogen production system or miracle hydrogen distribution system. At what point does CARB decide that some of these miracles might not occur either? Is this any reason to back off the pressure?

It is clear to me that for any of these technologies to advance and for markets to be built, a diversity of vehicles and technologies must be made consistently available to the market.

Unfortunately due to a variety of reasons, CARB is now left with a situation where the auto makers may in fact be setting themselves (and CARB) up for a train wreck. Some of the problems going into the new regulations for 2005 may be made WORSE by some of staffs proposals.

CARB AND CREDITS

The mandate calls for each automaker to produce credits representing at least 2% of their sales volume. So for example if Toyota sold 200,000 vehicles in California in one year, they would need about 4000 credits per year to reach the 2% ZEV requirement. Because of the large credits given to pre-2003 (now 2005) vehicles, many auto makers have enough "banked" credit such that they don't really need to do anything for a LONG time. GM, Ford and Chrysler have been moving thousands of 4 credit NEVs and will likely continue through March 2003 after which the credit drops from 4 to 1.25 credits per vehicle. In addition to these "NEV credits", some auto makers have enough non-NEV credits to get them through several years of the mandate starting in 2005. MOA vehicles don't get credit, but several companies have built vehicles beyond the MOA. Ford has additional credits from electric postal vehicles. Toyota has additional credits from RAV4s in 2001 and 2002 (at over 18 credits each). Nissan has credits from additional Altra-EVs. Combined with various other credits, many of these companies wouldn't need to produce a new vehicle until some time in 2007, 2008 or well beyond.

CARB does have an existing restriction from the 2001 amendments that says that in 2006, 25% of your credit must come NOT from banked NEV credits and in 2007+ half of your credit must come NOT from banked NEV credits. This does not effect Toyota or Nissan who have no NEVs. This also has little effect on Ford because in addition to their Th!nk Neighbor credits, they have credits from postal vehicles, electric Rangers and the preview Th!nk City vehicles to cover whatever they cannot use NEV credits for.

THE NEW STAFF PROPOSALS

The latest staff proposals to be discussed at the workshop include:

A proposal to move the start of the mandate from 2003 to 2005. This may be unavoidable due to legal reasons, but it does present a big problem. Not only does this increase the availability gap by at least two years, but because auto makers can still earn credits in 2003 and 2004, they can bank yet more credits to use in 2005 or after.

A proposal to lower the 2% ZEV requirement to 1% until 2012. From 2005 through 2011, staff proposes to split the 2% ZEV section into a 1% pure ZEV section and a 1% "transitional" ZEV section. Hybrids would be allowed to earn credit in the transition 1% section and a new hydrogen infrastructure credit could be earned in either section. Perhaps hydrogen infrastructure is something to encourage. But if this is in fact a ZEV mandate and the ARB is fuel neutral (as they claim), shouldn't this be a ZEV infrastructure credit that includes EV infrastructure as well as hydrogen infrastructure?

In 2000, staff cut the ZEV "gold" section from 4% to 2% by letting "advanced technology partial zero emission vehicles" (ATPZEV) get half of the 4% (leaving ZEVs with 2%). These ATPZEVS include gasoline hybrids like the Prius and Insight. Now staff is proposing giving them another 1% cutting the pure ZEV gold section down to 1%. These non plug in hybrids have already been allowed to get credit for half of the old 4% requirement, is it fair to now let them get 3/4s of it? The Honda hybrid system uses a small pancake motor and NiMH D-cell batteries. Is this a technology that should allow auto makers to further reduce their requirement for zero emission vehicles? Staff's excuse for this free ride through 2011 is that battery EVs have failed and they need to give auto makers time to prepare fuel cell vehicles for the next decade. What if auto makers cannot produce fuel cells in volume by 2012? Does CARB back down again? Should we really give away a decade of ZEV marketing and wait for fuel cells?

A proposal to change the way ZEVs are given credit. The old system used range, efficiency and a host of other things to grant credit. CARB wants to simplify. The new system would have 4 tiers. NEV, City EV, Full function EV and fuel cell vehicle. I personally don't have a problem with this except in the way they've defined the groups. A NEV is still a NEV and doesn't get any more credit than was planned in 2000. A city EV is a vehicle with at least 50 miles range. Maybe that is ok. A full function EV needs to have 120 miles of range. This is unacceptable to me. Not only would a 120 mile minimum rule out vehicles like the Chrysler Epic NiMH minvan (92 miles), Ford NiMH Ranger truck(94 miles), Chevy NiMH S-10 truck (92 miles) but it would also eliminate an efficient lead acid vehicle like the EV1 with Panasonic lead acid batteries(111 miles). It seems to me we need to encourage more vehicles, not fewer. The final fuel cell category only requires 100 miles of range (!!) How can you require 120 miles for a vehicle that can be fueled at home but only 100 miles for a vehicle with an extremely sparse infrastructure?

ISSUES AND LOOPHOLES

The ZEV mandate is about Zero Emission Vehicles. Chairman Lloyd and the board are very clear on this. Why should auto makers be allowed to give up on battery EVs in this decade in the hopes that fuel cells will take off in the next? Shouldn't CARB be doing all they can to encourage all kinds of ZEVs?