Electric cars are the hot topic at the Detroit auto show this week with every, and I mean every, major manufacturer touting something electric.
But could this paradigm shift away from internal combustion engines to battery electric vehicles actually bring new players into the industry? Could established players end up in the bone pile for going electric too late? Something like that has certainly happened in electronics and computers and media and on and on.
Things are happening in the industry very fast right now. Back in November at the Los Angeles Auto Show, supposedly the "greenest" auto show of them all, I noticed in the farthest corner of the South Hall a homely and lonely looking sedan painted in putrid yellow. This was no beauty but around it was a gaggle of interested people carefully reading the propaganda on the walls under the title Zen Meets Tech.
"We believe that we are all in this together. As a company. As an Industry. As a generation. Oil dependency is threatening our planet, our economy and our kids."
Yikes. This company wasn't pitching hardware at all, but values. It was staking out territory as the California electric car for the true believers. It's called the Coda and the Santa Monica-based company's credo states it wants to "put an electric car in every garage in the world." That's ambitious.
"History proves that a team of absolutely committed people can cause global change. It's our turn. And our responsibility. Let's make it happen." What a pitch from a company I'd never heard of with a car that looked like it had been drawn with a crayon.
Furthermore, just the day before, Coda had announced it was delaying the launch of its 2011 Coda sedan for about a year and the week before that the firm's CEO and the senior vice-president of sales and marketing had both resigned. Which left Steve "Mac" Heller working the stand as the interim CEO.
Heller had been a heavy hitter at Goldman Sachs and served on Coda's board. With little going on at the stand, he had nothing better to do than talk to me.
"Um, why do you think you stand a chance?" I asked sympathetically.
"We speak to consumers who want to buy an electric car from a company that's all about electric cars, not a company that has one electric model in a range of gas-guzzling cars and trucks," said Heller.
"Early buyers of electric cars are skeptical about incumbent brands. They're part of a movement and they see us as their ally and an enabler in reaching their goal of a gasoline-free life."
For the "movement" to get us to the "gasoline-free life," the Coda has a very large lithium-ion battery system cranking 34 kilowatt/hours as opposed to 24 kW/h in the Nissan Leaf and 16 kW/h in the Chevy Volt. Coda batteries also are supposed to charge faster and have a longer all-electric range, but I have not had the opportunity to test these claims.
Nor can I prove that a brand-new car company doesn't need dealers. "Consumers don't like the car-buying experience from traditional auto makers," Heller said. "Today, consumers learn online and want the purchasing online. We will provide as much of the process online as possible and keep it completely transparent."
One problem, even when you're revolutionizing the industry, is that online or offline the Coda costs a lot more than the all-electric Nissan Leaf. At $44,000 (U.S.), the Coda is about $11,000 pricier than the Leaf at $32,780.
Heller has an answer for that, too. "We think the demand for battery-electric cars will exceed the supply in the early phases. We anticipate substantial demand from both fleets and consumers."
I enjoyed my conversation with Heller, but given the automotive giants who are also proceeding down the electric path, I thought Coda would soon be toast and likely our first meeting would be our last. But I noticed a few days ago that Coda has reported it has secured $76-million (U.S.) in a new round of venture capital funding. I'm sure the venture capital companies extracted a terrible price from Coda for its dough, but it does let Coda survive to fight another day and "Mac" Heller is still in as interim CEO.
Is there a chance that companies we've never heard of can hit the big time in the technology shift to electric? Well, of course I have no idea, but government incentives are available for anyone who can put an electric car in the consumers' hands. In California, that's a $7,500 federal tax credit and a $5,000 state rebate. Even in Britain - with huge government cutbacks and "students" rioting in the streets over tuition increases - the British government still hands a plug-in car grant of £5,000 ($7,826) to consumers purchasing ultra-low carbon (i.e. electric) vehicles.
The prospect of the Chinese taking over of the U.S. auto market with electric and plug-in hybrid cars has been talked about in Detroit for years. BYD, the Chinese auto maker backed by Warren Buffet, is back in Detroit yet again having completely failed to bring a car to the U.S. market so far.
Will paradigm shifts and government grants be enough to bring new players into the industry?