David Kirsch knows the history of electric cars as well as anyone in America. His book, The Electric Vehicle and the Burden of History, published in 2000, has become one of the key reference sources on the subject.

His work in academia has focused on industry emergence, technological choice, technological failure and the role of entrepreneurship in the emergence of new industries. In The Electric Vehicle, he wrote that the automobile is not just a piece of machinery, it is “a material embodiment of the dynamic interaction of consumers and producers, private and public institutions, existing and potential capabilities, and prevailing ideas about gender, health, and the environment.” Kirsch got his undergraduate degree at Harvard, his masters at the State University of Limburg, and his Ph.D. (in history) from Stanford. He’s now an assistant professor at the University of Maryland’s Robert H. Smith School of Business.

RB: I recently found a clip from the Los Angeles Times. It reads: “The electric automobile will quickly and easily take precedence over all other kinds of motor carriages so soon as an effective battery of light weight is discovered. The very great weight of the storage battery as at present constructed militates against its use for automobile propulsion except within limited areas.” That piece appeared on May 19, 1901.

Batteries continue to be the key challenge for electric cars today. Why haven’t we seen more breakthroughs in battery technology?

DAK: Your question presumes that we haven’t seen great advances in battery technology over the past 100 years. But to really answer the question, we need to establish some guidelines, or – in the world of technology – some expectations. What would a breakthrough in battery technology look like? Relative to what? The fact of the matter is that an EV1 from the late 1990s would have outperformed every vehicle available 100 years earlier and for some time yet to come. Over time, battery technology made enormous strides. But relative to expectations, battery technology has failed to deliver. The 1880s was the decade of electric light; the 1890s was the decade that saw the electrification of the horse car; and many people – experts and casual observers alike – expected that the first decade of the 20th century would be the decade when electricity would make it “off the rails.” Relative to those expectations, the slow but steady improvements in electrical storage technology – both in battery systems and other related technologies – was perceived as a failure. And such perceptions might be forgiven relative to the unexpected progress of internal combustion technology. Thus, at the turn of the 20th century, many thought that internal combustion was the toy technology destined for the industrial margins and electric vehicles were the most promising. But, in the end, it turned out exactly the other way around. Electric technology improved slowly, while internal combustion improved in leaps and bounds.

RB: In addition to the clip from 1901, I have clips from the 50s, the 70s, and the 80s, all talking about the looming breakout of electric cars. Why can’t they – pardon the pun – turn the corner?

DAK: The short answer is the corollary to “Nothing succeeds like success;” namely, “Nothing fails like failure.” Once the course had been set at the dawn of the 20th century, the electric vehicle was competing against a moving target. Each year, tens of thousands of man-years of engineering talent were invested in optimizing and improving internal combustion technology and its associated system components. Each year, millions of customers acquired skills, knowledge and behaviors predicated upon internal combustion. Each year, our built environment was more and more optimized to the things that internal combustion could do well. Every time the electric vehicle was re-introduced, it was less competitive with internal combustion on a head-to-head basis than it had been the last time. This is the essence of path-dependent technological change: once the transportation system passed the tipping point toward internal combustion (probably around 1902 in the US), it would become increasingly difficult for the electric vehicle to succeed on terms that were set by the internal combustion-dominated world.

RB: One of the other technologies that we hear about – and it’s directly connected to the idea of electric cars – is the idea of vehicle-to-grid, that is automobile batteries will be used to bolster the grid. Do you think that’s viable?

DAK: Sure; it was common in the early history of the electric industry for batteries to be used for load management. Of course, these tended to be immense so-called “station batteries” that were used variously (a) to smooth fluctuations in current flowing from early generators, (b) to carry the load during periods of weak demand or when a primary generator was offline for whatever reason, and (c) to shave the peaks of the load curve, that is, to put power back into the grid when demand outstripped supply. So, we know it can be done. The questions revolve around the complexities of managing the process and of pricing the electricity on its way in and out of the new distributed storage system. I’m sure it can and will be done. The extent to which the V2G option allows electric vehicle owners to offset direct electricity charges will depend upon particularities of each regional power grid.

RB: What’s your take on the movie “Who Killed the Electric Car?” Was there a conspiracy to get rid of the electric car?

DAK: Well, I reviewed the film for Science magazine a couple of years ago, and interested readers might was to consult that review if they’re interested (v314 (20 Oct 2006): 424). But in brief, I thought the movie handled the subject well. In the spirit of full disclosure, I am friendly with several of the folks in the movie and largely sympathetic to their cause. In fact in 2000, I published an op-ed for EVWorld that accused General Motors of failing to see the forest for the trees. The one topic I thought the movie soft-pedaled was the question of “market demand” for electric cars. The movie goes to some length to claim that there was a large reservoir of unmet demand for the EV1 and its brethren, referring to an infamous list of 5,000 or more leads that was maintained by the EV1 team. But the reality is probably more complicated. When asked the man-on-the-street question, “Would you like to buy an electric car?” people often respond favorably. But when faced with the real-world purchase decision and being asked to pay a lot more money for a lot less car, sales tend to fall off. But on the whole, the movie did a fine job, and it’s not a coincidence that Rick Wagoner, the recently departed CEO of General Motors, admitted that cancelling the EV1 program was the biggest mistake of his tenure at GM. He should have been fired for it a lot sooner, in my opinion, but at least he was right about that.

The question of conspiracy is an interesting one. My general view is that conspirators have to act in secret and that most of the opposition to the CARB mandate might be better termed “self-interest.” The car companies didn’t like being told what to do, and they organized to stop it. By my definition that’s not a conspiracy. I think the industry was wrong, from start to finish, but I didn’t see the story as one of conspiracy, but of strategic incompetence, lack of leadership, and a failure to see how the future was going to unfold.

RB: The movie implies that the carmakers had a motive not to build electric cars. It seems to me that Toyota, GM, and the rest have a big incentive to build cars that people will buy. And now Nissan is saying that 10% of their fleet will be all-electric by 2020. Have the major automakers done the right thing (the profitable thing) with their electric car programs?

DAK: This question raises several issues that are hard to disentangle from the outside. General Motors clearly misplayed their hand. With EV1, they had technological leadership, first mover advantage, the moral high ground, good will from many corners and every other strategic asset you can imagine, but they blew it. For Toyota, Honda, and the other solvent automakers, pursuing incremental hybridization of their fleets probably makes better sense than going all-electric. These are large, established organizations facing disruptive technological change. They and their shareholders may be best served by electrifying the fleet at a more deliberate pace. Nevertheless, it’s frustrating to see how slow progress has been. The Prius was introduced almost 10 years ago, and I still can’t plug mine in or buy my wife a mini-van with a hybrid drivetrain. The startups and the dead-enders are the ones with nothing to lose and everything to gain, and there we have seen a willingness to move more quickly. Today, GM is betting its survival on rushing the Volt to market; in China BYD has introduced the first modern, production plug-in hybrid; and Renault-Nissan has teamed with Project Better Place to develop gliders that will support battery exchange. In strategic terms, these are all insurgent strategies being pursued either at the point of a gun (in GM’s case) or because the firms have little to nothing at stake in maintaining the status quo.

RB: You’ve no doubt been watching the emergence of the new electric car companies like Tesla Motors. What’s your view? Will these startups succeed where so many before them have failed?

DAK: I’ve addressed this a bit above, but let’s cut to the chase: I don’t believe technology will lead us out of the current morass. I believe the solution must come from better business models not better batteries. Tesla may hang on. A lot will depend upon how much money they are able to wring from the government to support their development plan and upon how much more money the founders and investors are willing to lose. One of the wonderful things about capitalism is that it produces enormous concentrations of wealth that can be then thrown at far-fetched ideas. I hope they succeed, but selling one thousand $109,000 cars is not a business. Everything depends on the new S-1, and there are still too many unanswered questions surrounding that vehicle to yet know what will happen. I’m personally not optimistic. I’m much more interested in what’s happening in China (and to a lesser extent India) where mobility patterns are not yet fixed in concrete and asphalt and where public policy and rapid market growth may yet forge a new vision of personal mobility.

RB: You have helped create a huge archive of business plans from the dot-com era. (www.dotcomarchive.org) What do you think of Shai Agassi’s Better Place concept with its battery exchange program? In your writings, you make it clear that battery exchange programs are not a new idea.

DAK: I am very, very excited about Project Better Place, not the least because one of the engineers there read my book and asked me to talk to the PBP team about the lessons of history! In all seriousness, however, I think that Better Place is the only serious new venture in the automotive space that is built around a truly new business model rather than simply another technological Hail Mary that may or may not succeed. It’s also a real natural fit for Israel. Battery exchange is the sexiest, most newsy aspect of the Better Place vision, but it’s not most important for long-term success. I think the subscription model is the critical success factor. If Better Place succeeds in getting customers to sign up for the subscription service and is able to satisfy their mobility needs, everything else will follow. In the long run, the battery exchange stations will be secondary to the overall thrust of the business.

RB: You have written that the “long-run prospects for increasing electrification of transportation are good. The question is ‘when,’ not ‘if.’” Have we arrived at that turning point?

DAK: Yes and no. I think we are in the midst of it. When I wrote the book in 1999, I would have thought we would be moving a little faster and be further along the path to electrification by 2009 than we are. But the global economic recession could have profound effects on the auto industry, hastening the rise of emerging producers with new business models as well as speeding the exit of some of the dinosaurs. In Israel, for instance, it’s not that far-fetched to imagine Shai Agassi’s Project Better Place with 85% of the market for new vehicles 5 years from now. And from there, it spreads. It’s also important to remember that other innovations are also being incubated: the electrified car may be most notable, for instance, for its lack of a windshield or a steering wheel rather than for its lack of a liquid-fueled engine.

RB: In your writings, you seem to believe (correct me if I’m wrong) that you see the electrification of the automobile as perhaps being more of the hybrid style of propulsion than pure electric. Is that correct?

DAK: Yes, that’s right. It all depends upon who the change agents are. The failure of the California EV movement in the 1990s was born of the fact that the government entrusted a disruptive technology (the electric vehicle) to the incumbent auto industry. What possible chance did that ever have of succeeding? The hybrid, by contrast, fits into the existing business models of the conventional auto industry, and to the extent that we expect these same firms to be part of the next generation of auto makers, I believe the hybrid path is more likely get us there. The plug-in follows quite naturally from the conventional hybrid, and from there, we’re on our way to full electrification. If the agents of change end up being new companies (i.e., BYD, Tesla), pursuing new business models (Better Place, Zipcar), in new countries (China, Israel), then we may not need to electrify via the hybrid path.

RB: Have you looked at any of the potential environmental problems with electric cars? Specifically, what about potential issues with recycling lithium-ion batteries?

DAK: I have not looked at lithium-ion recycling per se. In general, however, I subscribe to a long-run view of the relationship between technology and environment in which today’s environmental solution is tomorrow’s environmental problem. So it will not surprise me when we end up with new problems as a result of the adoption of a new set of transportation technologies. If I’m not mistaken, that’s what we call progress.

RB: So what kind of car do you drive now? And are you itching to buy an electric car when they become available? If the answer is yes, how much are you willing to spend?

DAK: 

I personally drive a first generation Prius. I still have the original window sticker in the glove compartment showing the ~$20,000 purchase price and the inverted mileage estimates (i.e., higher city than highway). I have loved the car from the first day I took delivery, and driving it has taught me a lot about the behavioral side of the electrification challenge. The 8-year extended warranty for the battery is about to expire, and I have been very tempted recently to upgrade it, but part of me still enjoys the signal value of driving the older model.

Moreover, I promised myself that my next car will plug in, and even the 2010 Prius that’s coming out next month will not have that option during the first model year. In general, I am willing to pay more for a more electrified car, but probably not willing to pay what it would cost to have a full BEV or be willing to live with the BEV I could afford (my commute includes 5 miles on the Washington beltway). I’ve heard industry insiders mock the limited all-electric range of the promised PHEV Prius, but even 10-12 miles would be enough for me to electrify 50% of my commute (100% if the university makes opportunity charging available), and from my perspective, that would be an enormous improvement. Indeed, part of the reason I’m skeptical about Tesla and some of the other, more aggressive extended range electrics (i.e., the Volt) is because I can’t see myself being willing to pay a $20-30,000 premium to electrify the other 50% of my commute. I think the modest all-electric range PHEV will hit the sweet spot of low-cost premium, near-maximal environmental benefit, and seamless adoption.

Original article here: http://www.energytribune.com/articles.cfm?aid=1657