Nissan is a worldwide player

Gordon Brown and Peter Mandelson were very keen visitors to the plant today to announce the £200 million investment by the Japanese giant which will be accompanied by significant backup from the UK government. The investment will create a further 350 new jobs for the Wearside plant but more importantly it could yet open up the potential for further investment in the future.

Why is the battery plant so important?

Even though the various electric cars which are hitting the worldwide market have grabbed the attention of the news media there is no doubt that the battery power for these vehicles is an essential element. The technology for electric cars has been around for literally hundreds of years although one of the main drawbacks in recent times has been battery technology.

There have been significant improvements in battery technology over the last few years which have allowed the electric car market to prosper although it has yet to hit the mass market and make a significant dent into the more traditional vehicle market. However, a £200 million investment into the battery plant in Wearside gives the impression that Nissan is potentially looking at the UK as a base for its electric car manufacturing.

On a more sombre note for the UK (but a positive point for the European electric car market) it is worth noting that Nissan has also set up a new electric car battery plant in Portugal which could offer competition for the UK operation, even though the UK has a very successful historic partnership with Nissan and other Far Eastern car manufacturers.

UK government assistance

While the UK government has come in for some criticism over the last few months regarding the slow progress of a multibillion pound loan to struggling car manufacturers in England it would appear that the Nissan project dovetails perfectly with the governments “green” plans for the future. As a consequence, Peter Mandelson also announced that 750 charging points would be installed across the Northeast and a specialist training centre created which will focus upon the manufacture and maintenance of low carbon vehicles.

This will be a real test of the UK government’s resolve and determination to break into the electric car market, which many believe is the vehicle market of the future, and the potential to save jobs which could otherwise be lost in the car industry is a massive plus point. The authorities have already promised to look at grants and loan guarantees for Nissan in a move which should support the so-called Automotive Assistance Program.

Is Nissan just playing the system?

While the UK government will be blowing the trumpet of Nissan and the electric car market for some time to come there is some scepticism on the ground with regards to Nissan and its past and future strategies. Even though there is no doubt that Nissan has invested a massive amount of money into the UK over the last 20 years it is worth remembering that the company has also received hundreds of millions of pounds of grants and assistance from the UK government.

A number of former Nissan workers in the region have pointed out that the company obtained massive government backing for ventures in the past, took on more staff and was then “forced” to announce redundancies when sales of particular vehicles began to drop off. Even though this is a particularly sceptical view of this situation, and there will be more detractors before the electric car market hits the big stage, both Nissan and the UK government may well have a point to prove in the short, medium and longer term.

Employment in the north-east of England

The north-east of England became an unemployment hotspot after the demise of coal mines in the 1980s and 1990s. However, the introduction of companies such as Nissan has turned around areas such as Wearside and injected life into a local community which was literally struggling to survive. Nissan is not the only company to have taken up the offer of financial assistance from the UK government in the past and there are hopes that not only will Nissan expand its operations in Wearside in due course but others will follow.

When you balance out the potential for the future of the electric car market, assuming that Nissan does actually manufacture vehicles in the UK in the future, even the investment of a couple of hundred million pounds of taxpayer’s money could have massive long-term benefits for the region.

How strong is the UK government’s commitment to the electric car market?

It is interesting to see that the UK government has taken up the electric car market challenge very much quicker than a number of competing governments in Europe and around the world. There are similarities to the UK government’s eagerness to become involved more heavily in the Internet market where there is potential for enormous income streams to be created. If the government can in some way ensure that the UK becomes a focal point for one or more electric car manufacturers in the world then this could turn out to be a self fulfilling prophecy.

However there is a need to ensure that the investment of taxpayer’s money does create a return for the UK population in terms of employment and corporation tax for the government. The close relationship with Nissan has worked in the past and many believe the future looks rosy if the UK authorities can at some stage secure actual manufacturing of electric cars in the UK. While today’s announcement centres upon batteries for electric cars the significance of this should not be lost as ultimately it could and should attract the actual manufacture of vehicles next to the plant.

Conclusion

This move by Nissan is one of the more interesting steps in the electric car market in the UK of late. It comes at a time when the industry as a whole is struggling although the electric car market, in the opinion of many experts, is ready to explode due to a number of factors.

As we saw in the 1980s and 1990s, the UK government attracted significant investment from the likes of Nissan into the north-east, and especially the Wearside plant, as well as other areas of the country. If this can be replicated in the fairly immature electric car market then the UK could become a focal point for worldwide car manufacturers looking to expand into Europe and beyond.

Do politics and the electric car market mix?

Government funding for the electric car market

Tata Motors is furious with the UK authorities, having applied for a £10 million loan from the government’s heavily publicised £2.3 billion funding package which was announced as a backup for companies looking to invest in more fuel-efficient technologies. This comes at a time when Nissan has announced a £200 million investment in its Wearside plant amid rumours that the UK government will offer further support in the form of loans and loan guarantees.

It has to be said that Tata Motors is not the first company to look towards the UK government for assistance and find that progress is much slower than promised. When you consider the company applied for the loan in April, when the UK government announced its backing of more fuel-efficient technologies, the news that confirmation will not be forthcoming before September at the earliest does not bode well for the future.

Why is the government dragging its heels?

While there is a suspicion that the UK government likes to grab headlines in a blaze of glory and then ultimately cut back on promises, there is also a need to ensure that UK taxpayers do actually receive value for money. There is no point in investing tens of millions of pounds, or hundreds of millions, into a venture or a company which is potentially unstable in the current economic climate and could struggle to make the impact promised.

However, the electric car market is still fairly immature in the UK and around the world and there are obvious risks with regards to investment in this sector in the short to medium term, until it has a firmer footing. Whether the government is looking to avoid any potential criticism or controversy prior to the next general election is another point which has been mooted that ultimately the silence from Peter Mandelson’s Department has been deafening.

Assistance from overseas governments

The UK authorities need to be very careful about dragging their heels with regards to further investment into the electric car market when you consider that for example Tata Motors has already secured a multi-million pound loan from the Norwegian government and Tesla Motors was the grateful recipient of a multimillion dollar low-interest loan from the US government. Even though it appears that companies such as Tata Motors and Nissan are looking to the UK for the future of their electric car operations there is a need for the authorities to “grab the moment”.

The UK car market

It is no secret that the UK car market has literally died a death over the last 20 years and despite the UK government’s promise of a multibillion pound loan guarantee and bailout program, very little finance has actually been received on the shop floor. There is a real danger of the electric car market becoming the new political football the future which could be kicked around from pillar to post and may see the UK miss out on this potentially lucrative area of industry. Even though the headlines suggest otherwise, the UK government certainly needs to speed up the processing time it is taking to consider financial assistance for companies willing to invest into the UK.

Is the UK government short on financial backing?

Even though each and every country around the world is in a very similar situation, with budgets stretched to the limit and national debts moving higher and higher, a number of reports regarding the UK economy suggest that government finances have literally been stretched beyond their limit. Whether this has had any impact upon the UK government’s apparent delaying tactics with regards to the £2.3 billion fuel efficiency drive is open to debate but there is no doubt that money is in short supply and even a delay of a few months would help the UK authorities replenish their funds.

However, when you consider the billions upon billions of pounds which have been ploughed into the UK financial sector, with limited return as yet, maybe the authorities have made a massive error in going for the headline grabbing investment in the financial sector when ultimately some money should have been put aside for growth areas such as electric vehicles. Whether the authorities will live to pay the price remains to be seen!

Why should taxpayers invest in the electric car market?

When you consider the millions upon millions of pounds which the likes of Nissan have injected into the UK economy and the millions upon millions of pounds in corporate taxation which they have paid to the government, long-term relationships with these types of companies can be very lucrative on many levels. When you also throw in the thousands of jobs which can often be created, reinvigorating local economies and creating a supply chain which can also employ tens of thousands, then we start to see the full picture.

However, it is worth remembering that financial assistance from the government should be seen as a long-term commitment as those looking to play the system in the short-term can benefit to the detriment of the UK taxpayer and the UK employment market.

Conclusion

Even though the UK authorities have made significant progress in funding some areas of the electric car market and persuading the likes of Nissan to open a new battery plant in the Northeast, there is a real danger that the electric car market could become a political football. Vague promises of massive funding often grab the headlines although it is imperative that the finance which has been promised is ultimately available at a reasonable speed.

News that Tata Motors is potentially looking elsewhere for the manufacture of its own electric vehicles because of government delays in confirming a £10 million loan application starts to give the impression that the UK authorities have their favourites, such as Nissan, and other companies may ultimately be ignored. This is a very dangerous game to play because by putting “all of your eggs in one basket”, i.e. backing a small number of car manufacturers, the UK authorities are handing over more influence and more power to the likes of Nissan.

Finding a balance between lucrative concentrated investment and the creation of a large long-term market is not easy and is proving testing for the UK authorities.

Long grass and political footballs!

The UK strategy on electric cars

Gordon Brown used the 2009 budget to confirm his government’s confidence in the electric car market and eco-friendly technology. In typical political fashion there was a vague suggestion of a £5000 discount for UK motorists who acquired an electric or hybrid car. However, while the government tried to make much mileage of this particular development there are no details available as to how you would qualify for such a discount but more importantly there are no cars currently available which fit the criteria!

In a rather bizarre quirk of fate many people may not be aware that while Gordon Brown is telling us which cars we need to drive and which technologies we need to use, the man himself is not able to drive. Yes, the man ultimately in charge of the UK government’s green strategy and electric car program cannot even drive himself.

What is the 2020 target?

The UK government grabbed the headlines after the recent budget with a suggestion, put forward as a policy, that all new cars sold in Britain by 2020 would either be 100% electric powered or hybrid vehicles. As you might guess, this subject has been discussed in great detail within the motoring industry and the vast majority of people do not believe the government will get anywhere near its target for 2020.

When you consider the recent demise of LDV, the UK van manufacturer, and problems at Vauxhall, which is a subsidiary of GM Europe, as well as the ultimate decline in the UK car manufacturing industry, how on earth could this target be met?

Despite all the hype in the newspapers and talk of trial projects up and down the country, of which one is actually going on, when you take a step back and look at the overall picture the UK authorities are actually putting up minimal investment for the project. More and more people now believe that the politicians of today are attempting to “kick policies into the long grass” by giving long-term targets for projects such as electric cars. Ultimately, possibly after the next general election, these projects and these policies will be reined back and possibly ended or extended.

Do as we say not as we do

While the UK government as a whole is very guarded about the amount of electric vehicles used in the public sector and by local councils, it was recently revealed that less than 5% of government owned vehicles and local council owned vehicles in Scotland were powered by electric. So while the Scottish executive appears to be making much fuss about renewable energy, wind energy and other sources available in Scotland, ultimately there is very little progress being made within government circles regarding electric vehicles.

Surely the best way to attract the attention of UK motorists would be to increase the use of electric or hybrid vehicles by local authorities and government ministers as well as actually making the goods available to the public, which would qualify them for the potential £5000 discount on an eco-friendly vehicle. Telling the UK population what to do, while the politicians do the opposite, has never worked in the past and in an area such as electric and hybrid vehicles it stands even less chance of success.

How efficient are today’s electric vehicles?

While there is no doubt that vehicles such as the Tesla Roadster and other top of the range electric cars are highly efficient, there is some debate as to whether some of the current mass-market vehicles are as eco-friendly.

In an intriguing development the Car Magazine website has an off the record comment from the chief engineer from the electric Mini E series which was used by politicians Peter Mandelson and Geoff Hoon to push the government’s electric policies. It reveals that if all of the electric power used to propel the electric Mini E came from UK coal powered power stations then the electric vehicle would ultimately create more CO2 emissions than the traditional diesel Mini!

While it would be wrong to suggest that all electric vehicles are in the same situation as the Mini E it is worth remembering that emissions from UK power stations, which ultimately produced electric for these vehicles, must be taken into account. It is very easy to get wrapped up in the concept of driving an electric powered car even if ultimately, as suggested in Car Magazine, the overall emissions created for your journey are higher than diesel or petrol powered vehicles.

The debate on electric cars goes on

Even though there are a number of electric vehicles available around the world, ultimately when compared to the traditional petrol and diesel vehicle market the electric market is still very immature. As a consequence the debate on electric cars has not really entered the mass-market and the current PR battle is between those in favour of electric cars and those against.

As there are very powerful companies and individuals on either side of the argument it can really depend upon which information mediums you read and subscribe to as to the impression you may be given. Thankfully, as the electric car market continues to grow the discussion will move into the mass-market and more research and information should become available.

Conclusion

Like so many governments before, the Labour government has tended to announce various eco-friendly and electric car programs in a blaze of glory only to find that very often the small print is very different to the headline. While there is no doubt that the authorities are funding a number of trial programs across the country, the target of all new cars in the UK being either electric or hybrid by 2020 is effectively a “kick of this political football into the long grass”, i.e. off the agenda today and forgotten tomorrow.

To get the real situation with regards to electric vehicles you need to ignore the political hype, which is very often done for effect, and look at the vehicles on the ground and their particular qualities. Whether it will take a Ford or a General Motors to put its full weight behind the sector is open to debate, but currently some of the larger institutions and bigger players in the industry are drowning out the up-and-coming eco-friendly car manufacturers.

What has Warren Buffett seen in BYD?

Some background on Warren Buffett

Warren Buffett is a 78-year-old investment guru who is estimated to be worth in the region of $37 billion and is often referred to as the “Oracle of Omaha” or “Sage of Omaha”. He has a history, via his Berkshire Hathaway investment vehicle, or investing in traditional businesses which have long-term value and a strong brand name. He famously avoided the 1990s dot-com bubble which saw technology shares multiply in a very short space of time only to collapse, leaving many investors destitute and penniless.

This is a man who believes in investing in long-term viable businesses which ultimately “a fool could run” because ultimately “one day a fool will run the business”. Warren Buffett is a private man who rarely gives interviews even though his name is regularly splashed across the worldwide financial press. So what did he see in the electric vehicle market and why did he invest in BYD?

Background on BYD

BYD is in operation which is run by a Chinese entrepreneur by the name of Wang Chuan-Fu who has been described by Buffet’s close friend and colleague Charlie Munger as a cross between Thomas Ellis and Jack Welch, serious names in the world of business and investment. So what exactly is the BYD operation and what are the prospects for the future?

The BYD (a shortened version of the company’s full Chinese name) is predominantly a manufacturer and retailer of rechargeable batteries, handset components and of late automobile products. The company has specialist knowledge of nickel cadmium batteries and lithium ion batteries as well as emerging battery technologies. The company, which few people have heard, is actually the second largest manufacturer of mobile phone rechargeable batteries in the world. While this particular business has done very well in the past it is the potential for the electric car subsidiary which appears to have caught the eye of Warren Buffett.

The BYD F3DM

While something of a rather bizarre name the BYD F3DM is the world’s first mass production plug-in hybrid sedan (retailing at around $22,000) which actually went on sale on 15 December 2008 to Chinese government agencies and various corporations. Originally unveiled at the 2008 Geneva motor show the vehicle is set to go on sale in Europe in 2010 and the USA in 2011. The company produced 170,000 vehicles in 2008 rising to 350,000 in 2009 and expects to increase output significantly in 2010 and 2011 when new markets are brought online.

So what is so special about the BYD F3DM?

In simple terms the vehicle uses the latest lithium iron phosphate batteries which are said to be the safest in the world because of their chemical make-up, even though they contain slightly less energy than more traditional lithium ion batteries. The most recent version of the BYD F3DM is said to have an all electric journey range of 62 miles (100 km) although there is a gasoline fuelled power supply inbuilt enabling the driver to switch between electric and traditional fuel power.

One of the most amazing aspects about the BYD F3DM is the fact that the running costs for the vehicle are between $1.44 and $2.72 per hundred kilometres based upon an electric price range of between 9c and 17c per kilowatt. This type of efficiency is something which few companies can match and is perhaps one of the reasons why Warren Buffett sees so much potential in the group.

Warren Buffett’s investment in BYD

In September 2008 Warren Buffett invested $230 million for a 10% stake in BYD which surprised many who follow the so-called “Sage of Omaha”. He appears to have broken one of his core investment rules by investing in a business which he does not fully understand, however, on the flipside of the coin his trusted colleagues appear to be more up-to-date with the various attractions of BYD.

Having started back in 1995 as a rechargeable battery manufacturer BYD has expanded quickly and now employs around 130,000 people via 11 factories around the world, 8 of which are in China. The US operation is fairly small at the moment although there are plans to increase this as and when the BYD F3DM is introduced to the US market. There are many aspects of the business which seem to have attracted Warren Buffett, including the electric vehicle division, the man behind the business and ultimately the fact that he refused Buffett’s initial request of a 25% stake!

There are few people in the world who would readily turned down an investment in their company from Warren Buffett and manage to negotiate him down to a much lower equity stake. This appears to have been taken as a reflection of the confidence that Wang Chuan-Fu has in his own ability and in his company. The revenue split for BYD in 2008 of was $1.7 billion cellphones and components, $900,000 batteries, $1.3 billion automobile and others accounted for $300,000 although it is fully expected that the automobile operation, which is fundamentally electric cars and hybrid vehicles, will significantly surpass all other areas of the business in the future.

Conclusion

While BYD may not be one of the electric vehicle companies that is grabbing the headlines of late it is an operation which is very focused, has a proven track record in rechargeable battery technology and is run by an entrepreneur who had the confidence to turn down a 25% equity investment from Warren Buffett, ultimately agreeing upon a 10% equity stake.

Even though in many ways the Far East has been left behind in the electric vehicle market in recent times, when Warren Buffett invests in a company which is relatively unknown it may well be time to sit up and take notice. The launch of the BYD F3DM hybrid vehicle in Europe and the USA is expected to increase the profile of BYD and could ultimately catapult the operation into a total different stratosphere. This is certainly one company and one investment to keep an eye on!

The power of oil!

In readiness for this eventual occurrence it seems as though some of the oil rich countries of the world are now looking to invest into the electric car market as a future hedge.

So what exactly is going on?

While the name Tesla Motors continues to grab many of the headlines in the electric car market it is a little-known fact that back in 2009 luxury car manufacturer Daimler acquired a 10% stake in the business. The two car companies have been working together on technology for the future and there are plans for the introduction of Daimler electric Smart cars in the short to medium term. However, it looks as though Tesla Motors has attracted the interest of Middle Eastern investors who are interested in becoming involved in the operation.

Aabar Investments has been confirmed as the buyer of a 4% stake in Tesla Motors from Daimler. This sale of part of Daimler’s stake in Tesla appears in some way to be connected with Aabar Investments $2.7 billion investment in Daimler which resulted in the company taking a 9.1% stake. The two largest shareholders in Daimler are now Middle East-based and with the largest stakeholder in Aabar Investments reported to be the International Petroleum Investment Company we are starting to see the emergence of a shift of power.

How will this work in the future?

Even though Daimler is central to this story there is no doubt that Tesla Motors is the jewel in the crown of the electric car market. However, it is not yet clear how the Middle Eastern investors would look to participate in the future of Tesla Motors and indeed whether there is a potential conflict of interest.

The situation could go one of two ways, either the new investors into Tesla and Daimler could use these companies as a means to expand their own investment into the electric car market or they could in some way attempt to stifle the development of vital technology in the sector. While sceptics will suggest that they will look to delay the introduction of electric cars as late as possible these two investment companies have a history of investing for profit and investing for the future.

Funding for the electric car market

While the emergence of such well-known names behind Tesla Motors is very welcome to see, together with potential access to significant investment funds, the company appears to be fully funded at the moment after receiving a $465 million low-interest loan from the US government’s Energy Department. Even though ultimately the funding will be used to expand operations in the US, thereby introducing significant job prospects, it should also allow the company to push ahead and drag the rest of the electric car market forward.

It is also worth noting that while Tesla Motors grabbed the headlines with regards to its low-interest loan from the US government there were further investments made with Ford Motor receiving $5.9 billion and Nissan North America a further $1.6 billion to develop and market their own brand of electric vehicles.

Could the United Arab Emirates be the next big electric car market?

The two invest companies which have stakes in Daimler, with Aabar Investments also obtaining a direct stake in Tesla Motors, have strong connections with the United Arab Emirates. This particular part of the world depends heavily upon oiling income and for some time the leading authorities have been looking at ways to diversify away from this dependency in the future. There is a growing feeling that the United Arab Emirates is looking to push itself forward as an eco-friendly electric car friendly market which could in due course attract significant investment.

When you consider that Tesla has only been around for a few years the chance to crack the Middle East market appears to be on the horizon, something which could ultimately transform the company.

Could the electric car still be mothballed?

While there is a suggestion that some of these oil based investment companies could look to delay or ultimately mothball any developments in electric car technology, many people believe the sector has moved too far out of the shadows to return again. It would seem more sensible from a financial viewpoint, as well as a business viewpoint, to push the likes of Tesla Motors and enjoy the fruits of success which look likely to follow.

Even though there will always be scepticism regarding the electric car market it does appear at this moment in time that developments and investment by governments around the world have gone too far for the sector to disappear without trace again. Many believe that the matter came to a head over the last 12 months with the rising price of oil which ultimately impacted upon the worldwide economy and highlighted the global dependence on the black gold.

Conclusion

While the Aabar Investments, Daimler and Tesla Motors triangle offers the potential to build on the excellent start made by Tesla Motors, do not expect this to be the last significant investment in the sector. Even though Tesla is currently leading the way there are many other start-up companies making good progress and attracting the interest of significant investors.

How ironic that it could turn out to be oil money which brings the electric car market to life and ultimately opens up the sector to the mass market. The signs are there, even though there is much work to be done, and many people seem to be in something of a rush to make use of the move towards eco-friendly products and eco-friendly vehicles, before a new trend comes along!

Will the Toyota Auris hybrid be built in the UK?

The UK economy

It is no secret that the UK economy, together with many other economies around the world, has suffered dramatic falls in output in the aftermath of the credit crunch. Unemployment in the UK is forecast to hit 3 million before falling back as and when the UK economy starts to improve. However, the problems with GM Europe and the issue of Vauxhall related jobs in the UK together with the demise of LDV have literally crippled the UK automotive industry.

This was an industry which prior to the loss of Jaguar to a US owner and the closure of a great numbers of car manufacturing plants was a leader on the world stage. But could the electric car market offer a new opportunity for the UK government to potentially inject tens if not hundreds of thousands of jobs into the UK economy?

Government backing

We are now at the stage, with Toyota seriously looking at the UK as a base for its European push of hybrid cars, where the UK government needs to make a decision about the future of electric and hybrid cars. The Toyota Auris will be the first petrol/electric car to be manufactured in Europe and there are high hopes that Toyota could be the first of many overseas car manufacturers to re-enter the UK market.

If the UK government is able to offer both financial and practical assistance to these operations we could see the creation of a new UK car manufacturing industry from the ashes of the old one. Even though the embers of the former world leading car manufacturing industry have long gone cold there are still many highly skilled workers in the UK with decades of experience in the sector.

Increasing demand for electric cars

While Toyota and other car manufacturers may well use the UK as a springboard into Europe there will need to be a growing UK market and UK demand for electric vehicles. Even though there has been to some extent a natural increase in demand for hybrid and electric cars, with a move to reduce damage to the ozone layer and the environment, the UK government will need to lead by example. When you consider that only a single digit percentage of UK government vehicles, which include political and local authority vehicles, are powered by electric or of the hybrid variety, there is much work to be done.

Taxation of the UK electric car market

Even though there is a growing debate as to how the UK government could replace the significant tax revenue it receives from petrol sales in the UK, by actively encouraging electric car manufacturers to use the UK as their European and potentially worldwide base, this could bring in significant corporate tax income for the authorities. While this would not replace the potential loss of petrol tax income but it would go some way to reducing the burden as and when the electric and hybrid car market starts to gain widespread approval.

The car scrappage scheme

The car scrappage scheme which was introduced by the UK government, which is ultimately a copycat of other schemes in Europe, gave the UK authorities the perfect opportunity to increase demand for electric and hybrid vehicles. However, while there was an initial focus upon more environmentally friendly cars the fact that there are so few vehicles available in the UK which fit the criteria is something of a letdown. The criteria for the car scrappage scheme appears to have been slackened somewhat and rather than highlighting the use of electric and hybrid cars the potential £2000 discounts are now available on all new cars registered after May 2009.

There are hopes that when the electric car market grows in the UK and more vehicles are made available to the mass market, the UK government may well introduce some form of tax incentive, either in the form of reduced road tax or potential discounts on purchases, to nudge people in the direction of more environmentally friendly cars.

Is this the perfect opportunity for the UK government?

The UK authorities, both the current government and past governments, have been accused of leaving the historic UK car manufacturing industry high and dry. While the likes of France and America regularly offer substantial subsidies to their car manufacturers, the UK government was happy to let them stand on their own two feet, something which eventually saw the vast majority either closed down or taken over by overseas parents.

However, there is now the opportunity to build up some momentum for the UK electric car and hybrid car markets and attract the likes of Toyota and other leading mass-market manufacturers. Whether the UK authorities will be brave enough to grab this particular opportunity with both hands and push it forward remains to be seen but there is the potential to increase tax income, employment and the possibility of pushing the UK to the front of the eco-friendly car market.

Conclusion

We saw the likes of Toyota and Nissan using the UK in the 1980s and 1990s as a base for their European operations. It looks as though history could repeat itself again if Toyota goes ahead with plans to build the Toyota Auris hybrid vehicle in the UK and use this as a base for the European market. It is also interesting to see that while Tesla Motors is a US based company the operation has a joint venture agreement with Lotus to manufacture the company’s electric vehicles in the UK.

This could just be the tip of the iceberg of the future UK electric car market and could ultimately see the re-emergence of the UK car market, although hopefully second time round we will not see the sector “sold down the river”.

A help or hinderance to the electric car market?

The benefits of a hybrid car

There are many benefits available from hybrid cars which include:-

Reduced emissions

Even though there are some hybrid vehicles on the market that appear to offer very little in the way of economic savings, any vehicle which has an electric power supply and another supply, such as petrol or gasoline, will automatically fall into the reduced emissions bracket.

Less maintenance

Even if your hybrid vehicle operates on electric power only 10% of the time then this will reduce the number of moving parts and ultimately have an impact on maintenance. Less moving parts mean less wear and tear which ultimately means less maintenance. Less maintenance means a more efficient vehicle and a reduction in maintenance costs.

Reduce fuel bills

Even though the likes of the Chevrolet Volt has been criticised somewhat because of the fact it is ultimately powered by traditional fuels such as petrol or gasoline for the majority of the time, it still appears to be more efficient than the traditional cars on the market today. Even just the slightest hint of electric power will significantly reduce fuel bills, and with the price of oil very volatile at the moment this can be of great assistance to drivers.

The ability to combine two power supplies

The ability to incorporate two different power supplies into one vehicle has obvious advantages in that if one power supply is low then the other can be switched on and vice versa. Hopefully as electric car technology continues to improve we will see new hybrid vehicles allowing a larger percentage of journey times to be powered by electric which will ultimately improve all of the above aspects.

The downsides to 100% electric powered cars

While there are many benefits to using cars which are 100% powered by electric, with no liquid fuel such as petrol or gasoline involved, there are still a number of practical issues to resolve. To put the whole matter into perspective, when was the last time you saw or heard about an electric vehicle recharging point?

The truth is that while there are many more benefits to the electric car than the vast majority of us will be aware of, until we have electric car power points available across the UK, and across the world, the market will remain subdued. While we see the likes of the UK government introducing a multi-million pound electric car trial across the UK and Boris Johnson hoping to introduce in excess of 100,000 electric vehicles to London’s over the next few years, the signs are good but there is still much work to be done.

Do hybrid cars detract from the benefits of electric vehicles?

One vehicle which has caught the headlines over the last few months has been the Chevrolet Volt which has been introduced by General Motors. As we suggested above, this is a vehicle which has been put forward as a hybrid car when in fact it is actually 90% powered by traditional fuel although because the fuel powers the electric generator, which then powers the motors, it can be classed as a hybrid. But is this type of vehicle impacting upon the perceived benefits of electric cars?

There is no doubt that allowing hybrid vehicles to be predominantly powered by traditional fuels does take away much of the benefit perceived to be available via the electric car. Those who have not done their homework may not be aware of the situation regarding the likes of the Chevrolet Volt and ultimately may see this as the “car of the future”. Even though there are obvious benefits to this particular vehicle, which uses fuel to power the electric motors which drives the car, there are still emissions and it is still using substantial amounts of fuel.

After fighting tooth and nail for many years to push electric cars into the limelight, surely General Motors (which has been long accused of trying to “kill the electric car”) cannot yet again spoil the party?

The next few years are vital for the electric car industry

There is no doubt that despite a number of false dawns in the past, the electric vehicle and ultimately the electric car is entering a very important phase of its development. If the vehicles do not take off over the next 10 years, for whatever reason, then it is highly likely that their eventual delivery into the mass market could take many more years to complete. However, while the likes of General Motors appear unconvinced about the potential for 100% electric powered cars, companies such as Tesla Motors are leaving companies such as General Motors behind in this particular field.

If Tesla motors, and other similar companies committed to the electric vehicle, can become the leaders of the pack on a long-term basis then we could see the influence of the likes of General Motors, Ford and other prominent traditional car manufacturers reduced in favour of the likes of Tesla.

Conclusion

While there is no doubt that the hybrid vehicle offers a very useful halfway house between traditional fuel powered cars and electric vehicles, there is a need to be honest with the public and explain that many hybrid cars are in effect powered by traditional fuels. Many motorists who think they’re buying an electric car might be disappointed to find out it is almost wholly powered by traditional fuel and this could scare people away from the sector.

However, as long as the likes of Tesla Motors and other electric car companies continue to grab the headlines, the ability of such companies as General Motors and the like to dictate the future direction of the market is reduced. Make no mistake, as soon as General Motors and Ford for example see that this particular market is here to stay and is taking off, they will bombard the market with their own electric vehicles!

Who was Nikola Tesla?

Why does Nikola Tesla’s name live on today?

While many people may not have heard of the man himself there is no doubt that he literally changed the world and was an integral part of the coming of the Second Industrial Revolution. His groundbreaking contributions in the world of electricity and magnetism came to the fore in the 19th and 20th centuries with Tesla’s patents effectively forming the basis of the modern day AC electric power system which we now take for granted in the modern day world.

The early life of Nikola Tesla

Born on 10 July 1856 in the village of Smiljan, in an area we now know as Croatia, his father was a priest in the Serbian Orthodox Church and he was the fourth of five children (two boys and three girls). In a sign of things to come, records show that Tesla finished his first four-year school term in just three years, showing intelligence well above the average at his school.

While there were early signs that Tesla had the potential to be something special his later years of education are somewhat shrouded in mystery. It is known that he moved to the Austrian Polytechnic in Graz in 1875 to study electrical engineering although there is some debate as to whether he received a degree or in fact he finished the course early and did not attend beyond the third year. Some unknown reason he cut all ties with his family in December 1878 and indeed many of his friends and close acquaintances believed he had drowned in Mura.

After suffering a nervous breakdown during the immediate aftermath of cutting ties with his family he was persuaded by his father to attend the Charles Ferdinand University in Prague although yet again, after the death of his father, he cut short his time at university.

Early employment for Nikola Tesla

There is evidence to show that Tesla had something of a photographic memory having been able to memorise complete books in a very short space of time. It is also rumoured that he had a rather peculiar medical condition during which he would experience flushing lights before his eyes and hallucinations brought on when hearing simple words which were linked to possible ideas he was having. Nowadays this is known as picture thinking and Nikola Tesla was gifted with this particular skill, able to visualise in lifelike detail how a system and an idea would work in reality.

In 1880 he moved to Budapest and joined the National Telephone Company where he encountered a fellow Serbian inventor by the name of Nebojša Petrović. Such was his rapid rise up the ranks of the company, in 1881 he became the chief electrician and was credited with developing the first telephone repeater/amplifier which has also been described as the world’s first loudspeaker.

Life overseas

In 1882 Nikola Tesla moved to France to work for the Continental Edison company in Paris where his main job was to improve the design of electronic equipment under development. This is the year that Tesla created the induction motor which used rotating magnetic fields to transfer power – this particular idea was patented in 1888. After the death of his mother Tesla was forced to take 2 to 3 years out recuperating during which time he suffered yet more bouts of illness. However, in June 1884 he arrived in New York City on the recommendation of Charles Batchelor, with whom he had worked with in the past, and a specific recommendation to Thomas Edison which read along lines of “I know two great men and you’re one of them, the other is this young man”, who we now know to have been Nikola Tesla.

Having been taken on by Thomas Edison there is some confusion as to exactly what occurred over the next few years with Tesla claiming he was offered $50,000 (worth over $1 million today) if he was able to redesign and improve the efficiency of the Edison motors and generators available at the time. Having worked night and day to complete his project, in 1885 he delivered a much improved system although when enquiring about payment for the substantial work he had put into the project, Edison is said to have replied “Tesla, you don’t understand the American humour” at which point he was refused the rumoured $50,000 payment.

Tesla goes solo

After turning down a weekly wage rise from $18 a week to $25 a week at Edison’s company, 1886 saw Tesla form his own operation known as the Tesla Electric Light and Manufacturing Company. However, when Tesla tried to push through his plans for an alternating current motor he was overruled by the initial financial investors in his operation which led to him leaving the company.

Taking what can only be described as an unorthodox route to his ultimate success, 1886 to 1887 saw Nikola Tesla take employment as a common labourer to feed himself and build up capital for his next venture. After saving enough money to fund a new project, 1887 saw Tesla create the world’s first brushless alternating current induction motor and the year after saw the release of the Tesla coil. The release of these two groundbreaking devices saw George Westinghouse of Westinghouse Electric and Manufacturing Company take a significant interest in the young inventor.

Tesla then went on to become involved in the creation of x-ray devices, the basis of which remains even to this very day. He was one of the only inventors to look into the safety aspects of x-rays and while he had some controversial opinions as to how certain skin damage began to appear, with Tesla believing it was down to ozone generated by the device rather than radiation, he was certainly able to “think outside the box”.

In 1891 the so-called Tesla effect (named after the man himself) was created when Nikola Tesla demonstrated the “transmission of electrical energy without wires” which is effectively the movement of energy through space and matter. At the ripe old age of 35 Nikola Tesla became a US citizen and set up his own development laboratory on South Fifth Avenue. By the age of 36 he had yet another patent successfully registered with regards to polyphase power systems although this was just the start of his domination of the electric power sector.

Between 1893 and 1895 he managed to create a system, using the Tesla coil, which produced over 1,000,000 volts of AC power. He then went on to invent a machine to assist with sleep, cordless gas lamps, successfully introduce wireless transmission of electromagnetic energy and is credited with building the first radio transmitter.

The later years of Nikola Tesla

While Tesla continued his amazing discoveries until his later years, his life was not without controversy, illness and everything seemed to be a battle for him. Indeed even when Tesla, together with Thomas Edison, was put forward for the 1915 Nobel Prize it is rumoured that the two were at loggerheads and determined to ruin each other. As a consequence neither party ever receive the award perhaps because ultimately neither party would share with the other.

In what can only be described as ironic tragedy, Nikola Tesla died alone in room 3327 of the New Yorker Hotel on 7 January 1943 after suffering heart failure. In his later years he had been forced to sell his AC electricity patents although he died with significant debts and is known to have had a very difficult time towards the end. Ironically after originally being awarded the patent for the invention of the radio some years before, which was then taken repealed and awarded to a third party, after his death the US Supreme Court upheld Tesla’s original patent and to this day he is credited with inventing the radio.

Tesla’s legacy

While Tesla had often controversial views on the likes of Einstein, gravity and space, there is no doubt that the power supply market today would be very much different without him. His name lives on with the SI unit Tesla which is used to measure magnetic flux density, the TPP Nikola Tesla power plant in Serbia (the largest in the country), the Belgrade Nikola Tesla airport, Tesla Motors not to mention the Tesla heavy metal band and a number of songs penned as a tribute to him.

Conclusion

While we have only but scratched the surface of the controversial and groundbreaking life of Nikola Tesla it is perhaps poignant that we leave the final thoughts with Tesla Motors and the comment released at the launch of the Tesla Roadster Electric vehicle.

“The namesake of our Tesla Roadster is the genius of Nikola Tesla and we are confident that if he were alive today, Nikola Tesla would look over our car and nod his head with both understanding and approval“

Who will lead the sector forward?

Some companies to look out for in the future include:-

Chrysler

Chrysler was first incorporated in America in 1925 and has a reputation that few companies in the world can match as well as finance to cover various development concepts. However, while Chrysler is now starting to make an impact in the electric car market the company has been slow to take up this challenge with many believing there has been undue influence from the US government.

The Chrysler Dodge ZEO is the latest electric sports car to be introduced to the market by Chrysler offering a 268 hp electric motor powered by a lithium ion battery which can accelerate from the 0-60 in just 5.7 seconds. With seating for four people the vehicle is able to travel up to 50 miles between charges and has caught the eye of many electric car fans.

Tesla Motors

Tesla is a company we have covered on numerous occasions and one which has made a significant mark in the electric car market despite only being incorporated in 2003. Based in America, the company has quickly taken the latest electric car technology and introduced a significant array of improvements which have taken the market to a new level. At this moment in time, while debatable, many believe that Tesla Motors is leading the electric car sector forward and is THE company to watch.

The recent launch of the Tesla Roadster has been by far and away the most successful and most widely covered launch of an electric car for decades. This is a vehicle which can accelerate from 0-60 in under four seconds, offers an efficiency rating of around 92% and is able to travel 244 miles on a single charge. At this moment in time the Tesla Roadster is the leader of the electric car pack and fully justifies its extensive press coverage.

Toyota Motor Corporation

Even though many people will be surprised that the concept of electric vehicles has not caught on quicker in the Far East, Toyota Motor Corporation appears to be the leader in this area of the world. Despite the fact that the Far East has historically been very much at the cutting edge of various technologies, the electric car market seems to be one which has passed it buy. However, Toyota has very quickly made a name for itself and the introduction of the famous Toyota Prius could push the company on to bigger and better things.

Despite being around since 1997, the Toyota Prius has only just made a significant mark on the worldwide market. This hybrid vehicle, which incorporates both gasoline and electric power, was recently confirmed as the bestselling vehicle of its kind in both the US and Japanese markets. These are significant markers for the future and Toyota is seen by many as an electric car manufacturer to watch.

General Motors

Despite infamously been described as the “company which killed the Electric car” General Motors has re-entered the market and the forthcoming Chevrolet Volt could spearhead the company’s move back into the electric car market. Only a few days ago General Motors emerged from bankruptcy protection in the US after a serious reorganisation of the company saw non-US operations sold off and a total focus upon the US subsidiary.

While the Chevrolet Volt is strictly speaking a hybrid vehicle there is some debate as to whether it is a hybrid vehicle in only name with confirmation that the lithium ion batteries are unable to power the vehicle for a maximum of 40 miles before a four-cylinder gasoline engine takes over, powering the electric generator, to increase the maximum mileage up to 640. Is this another attempt by General Motors to detract from the 100% electric cars of the future or is the company actually sticking a toe in the water of the electric car market?

Ford

As you might expect, it has not taken Ford Motors long to recognise that the electric car market is primed for significant growth in the short to medium term and potentially explosive growth in the longer term. The company has now focused a significant portion of its development budget on the hybrid car market with the launch of the Ford Fusion Hybrid earlier this year.

The Ford Fusion Hybrid is an eco-friendly version of the very popular Ford Fusion range and while it is not a purely electric car it is one which was voted into the “Top 10 Green Cars” of 2009 by a well-known US motor publication. The vehicle is able to deliver 41 miles per US gallon using fuel although this increases to 47 miles when the electric power system is activated. By using the traditional fuel and battery-powered systems available with the vehicle, it is possible to travel 700 miles on a full tank.

Honda

In what seems to be a clear pattern forming for the future, Far East-based Honda has now joined the electric car market along with many competitors in the region. The company has been a significant member of the mass car market for some time and its ability to deliver a hybrid vehicle which will reduce emissions and also improve efficiency is something which should be championed.

The well-known Honda Insight range now includes a hybrid electric vehicle which became available in Japan in February 2009 and was ranked as the top-selling vehicle in Japan for April 2009. This was the first time that a hybrid vehicle had taken top spot in the market and is a reflection of the company’s ability to read the mass-market and what consumers require.

Conclusion

There are many companies set to introduce both hybrid and purely electric powered vehicles to the market in 2009, 2010 and beyond. The likes of Tesla Motors are a pure electric power play while other companies such as General Motors, Ford and other well-known names have chosen to go down the hybrid route. In all honesty, the more successful the hybrid and electric powered cars are the more chance that consumers will switch on to the benefits for their pocket and to the environment. This is a market which has only just begun to emerge from the shadows but one which could be the leading light of the worldwide car industry for many years to come.

What is happening in the electric car sector?

The ATNMBL electric vehicle

The ATNMBL is one of the more bizarre electric concept vehicles under consideration although when you find out it is from the team who created the Google G1 phone then perhaps it is something we should take note of. While at first glance this particular vehicle looks bizarre to say the least, when you consider it is a concept vehicle for the market in 2040 then perhaps we can take a more long-term and futuristic approach.

The ATNMBL (standing for Auto No Mobile) is an electric vehicle with no steering wheel or pedals . The idea is that passengers will summon their car roadside at which point the door open they will step in and the car would ask them “Where would you like to go to?”

The vehicle itself is self driving, has wraparound seating for seven and is in effect a glass box on wheels. Those close to the project are projecting the driving experience as something similar to sitting in your front room watching the TV even though you will be driven around the country by a robot. The idea is that passengers can choose the more scenic route, quickest route as well as controlling the speed of the vehicle via their voice. Whether this particular electric car will ever make it to market remains to be seen but it is more than interesting to see what the future holds.

McDonald’s

While McDonald’s, and other prominent fast-food chains around the world, have received significant criticism over the years with regards to various environmental issues, McDonald’s is set to open its first outlet next week to contain an electric car charging service. The “green” McDonald’s is set to open in North Carolina and will offer electric car users the chance to recharge their cars via a card subscription system or a one-off toll-free call which will take a fee from the customer. When you consider the number of McDonald’s around the world and the need to create readily accessible recharging points for electric cars in the future, perhaps one of the most prominent examples of “capitalism” in the world could actually play a large part in the green car market in years to come?

The Zipcar Club

Westminster Council, together with Transport for London, is working together with the Zipcar Club in London to make electric vehicles more accessible to the masses and increase the number of zero carbon car journeys in and around London. The electric vehicle pod will be located in Spencer Street behind Westminster City Hall and allow car club members to pick up an electric vehicle (either a Citroen C1 or a Toyota Prius) for their journeys.

Membership of the club is available at a heavily discounted £25 a year with a pay-as-you-go rate of £3.95 an hour or £29 today. It is hoped that individuals and companies will sign up to the scheme which should allow more electric vehicle pods to be made available in other areas of London and potentially other cities in the UK.

Nissan hits the electric car market

Nissan have for some time been working with close partner Renault on a new electric vehicle that is just weeks away from hitting the mass market. The so-called EV-02 is a strange looking vehicle at first glance but offers a vast array of environmentally friendly extras and a range of around 160 km per charge – which is more than enough for the average European’s daily journey.

The vehicle is set to hit the Irish market in 2010 and consists of a number of lithium ion batteries, a connector box, a power inverter, a transformer and a top of the range electric motor. The vehicle is said to be silent, powerful and has no emissions whatsoever which is a plus point over the growing hybrid market which has to some extent overshadowed the electric car market.

Hyundai motor Company

While areas such as Korea have often been at the forefront of new technology it appears as though the electric car market has been ignored somewhat until now. Yesterday we saw Hyundai launch its first hybrid electric car with the unveiling of the Avante LPi Hybrid which is the first hybrid car in the world to use an LPG engine and an electric motor. The vehicle is also the world’s first commercially available hybrid to use lithium ion polymer batteries and is said to have taken around 4 years to produce and an investment approaching $200 million.

While there are still small emissions from the vehicle, via the LPG engine, the Avante LPi Hybrid is by far and away the most environmentally friendly vehicle available in Korea at this moment in time.

Conclusion

Whether or not it was the breakthrough of the Tesla Roadster which has brought the electric car marketing to the attention of the masses is debatable but there is no doubt that improved technology and interest in this particular area has increased the profile of the electric vehicle sector. The fact that vehicle such as the ATNMBL are receiving any publicity, bearing in mind this is a concept vehicle which has been created with the 2040 market in mind, shows how the appetite for environmentally friendly travel has increased of late.

It is interesting to see that the Korean market appears to be further behind than many other areas of the world, which is a prize bearing in mind how technologically advanced the Far East has been in years gone by. While Tesla is based in the US the production of all Tesla cars at this moment in time go through the company’s joint venture with Lotus which is situated in the UK. This would appear to ensure that the US and UK markets will be firmly entwined with regards to the future of the electric car market and should at some point see the two governments working closer together for the good of the sector.

It looks as consumer demand is pushing back the barriers of the electric car market and opening up new opportunities for the future.