In 1990 the State of California brought in the ‘zero emission’ regulation requiring 10% of all vehicles in the state to be zero emission by 2003. Various subsequent amendments watered this down until it became almost meaningless. In the meantime the space has been littered with false starts in the race to develop an electric car which matches the needs of consumers whilst contributing to the battle against climate change. GM and Ford have both been in the electric car market over the last ten years and have both failed- some say deliberately. Indeed, GM actually sued the Californian state government to get rid of the zero emission regulation.

Theories, ranging from the logical to the conspiratorial, have been expounded as to why electric vehicles have been such a failure. The automotive industry claims that, for most of the past ten years, the technology has been such that a compelling consumer experience is undeliverable. Slow speeds and short ranges have made electric vehicles impractical for all but the niche user. Others have suggested that the automotive and oil industries have a vested interest in the whole concept failing.

The strong emergence of the hybrid (powered by a standard internal combustion engine plus supplementary power from an electric motor) puts the lie to the second explanation. Car companies understand that they need to respond to the ‘green’ agenda. But what about all-electric vehicles, 100% powered by electricity?

In the last week venture capital has been making its way into companies right in this space. Venture Vehicles of California raised a $6m series A round on 17 August from NGEN Partners and DVC Technologies while rumours have it that Phoenix Motorcars is in the process of raising a $15m round from Kleiner Perkins Caufield & Byers. Venture Vehicles is developing a mix of products including hybrid and all electric vehicles while Phoenix is focused solely on the all electric market.

Why do investors believe the time has finally come for electric vehicles? One major reason is the rapid advances being made in battery technology (see rise in investment in this area, Figure). A123 Systems, battery supplier for Venture Vehicles, is the leader in this field and has raised over $102m from Sequoia Capital, General Electric and numerous other investors. The company has exploited proprietary ‘nanoscale’ technology, originally developed at MIT, which allows lithium ion batteries to deliver greatly increased power over an extended lifetime. Initially employed in power tools, this new generation of batteries promises to solve the major historic problem with electric vehicles- low power and short battery life.


But A123 Systems isn’t the only player in this field. Indeed, Phoenix are using the ‘Nanosafe’ battery developed and produced by rival, Nevada-based Altairnano. Further evidencing the activity in this space, Altairnano recently signed an agreement with ISE Corp to jointly develop a battery-motor combination drive system for all electric vehicles.

In short, serious money is now being put into the electrification of road transport. In the venture market, battery companies and electric vehicle developers are closing funding rounds while, at the corporate level, development partnerships are emerging to meet the need for mass produced electric drive systems.

So, how will all this play out in the fight against climate change? Will switching gasoline vehicles to electricity actually reduce emissions unless we generate that electricity from renewable sources? The flippant answer to this question has always been no. Yet recent research demonstrates that this is simply wrong. A detailed report from the Pacific North West Laboratory in the US demonstrated that changing 84% of US car, pick-up and SUV transportation to electric power, without any other changes (i.e. with no increase in renewable electricity generation) would cut US carbon emissions by 27%. A similar study from Stanford University showed that for the average car, switching to hydrogen fuel cell power from gasoline would save 50g of carbon emissions per kilometer traveled, even if the hydrogen was produced from non-renewable sources.

In other words, electrifying road transport would make an important contribution to combating climate change even if nothing else changes. It may be that electric cars for the mass market are, finally, on their way.