An Electric Car Model That Works

Have you ever wondered why electric cars haven't penetrated the market despite rising fuel prices and an ever growing danger of climatic changes? The problem has always been the size and low capacity of the battery. This is why the world's leading car manufacturers like Toyota (still) tend to develop and produce Hybrid motors.

On El Hierro, one of the Canary Islands, the problem has been faced from another perspective: infrastructure. Vice president Javier Morales bought 6000 electric cars for the 10.000 inhabitants of the island and transformed the four existing gas stations into charge stations which are financed by a weekly fee of every inhabitant. The electricity is obtained by locally produced wind energy. This infrastructural shift has been possible, because the costs for importing fossil fuels has been eliminated completely.

The small size of the island as well as its situation far from the Spanish Mainland were the keys for this development. By now, the excesses of the wind energy are reused in the construction of an artificial lake for potable water production by means of the "blue" vortex technology. El Hierro is prospering: the farmers who had left the island are coming back and cultivate the fields, planning even a 100 per cent organic agriculture.

The Market

The world market for all electric vehicles will grow from just under 10,000 units in 2008 to an estimated 350,000 cars, trucks, vans and buses by 2013, good for a $15 billion turnover. This is small compared to the 2.6 million hybrid cars on the road today. The demand for batteries grows at an ever more rapid pace spurring sales from approximately $900 million today to between 10 and 15 billion by 2015 solely for the large lithium-ion batteries. By 2020, this market alone could reach anywhere between $30 and 40 billion. The electric car makers and their suppliers make strategic alliances with battery makers to lock in battery technologies, as we observe with the agreement signed between VW (Germany) and Sanyo (Japan), Continental (Germany) and ENAX (Japan), Bosch (Germany) and Samsung (Korea), VARTA (France) and Johnson Controls (USA).

Toyota spent an estimated $5billion on the hybrid program, selling +60 percent of all the vehicles of this type, while minor players like BYD (China), Tesla (USA) and THINK (Norway) each carved out a small niche in the emerging market of electric vehicles ahead of any of all major players that are about to go into mass production, including Renault-Nissan which will inaugurate a plant in Spain in 2011. Mass production at the Valladolid plant is only reaching 25,000 units for the first year. However, Renault predicts that by 2020 as much as 10 percent of its output will be electric vehicles.

China has decided to leapfrog car technologies and aims to raise its production capacity of virtually nothing in 2008 to 500,000 by the end of 2011, including hybrid/electric and all electric cars. By that date, North America would only be making 267,000 units, while South Korea and Japan combined would already top the 1.1 million mark. While still behind, China is likely to take the lead soon. BYD has 10,000 auto and battery engineers at the headquarters in Shenzhen, capable of competing head-on against the best. China has an additional advantage: 80 percent of the clients are first-time car buyers unaccustomed to power and diversity that characterizes the overseas automobile market.