As the price of gasoline chugs toward an all-time high, there’s more incentive than ever to innovate new ways of getting around without the stuff.
Given all the grief at the pump, the production of electric vehicles seems to be ramping up at just at the right time. Yet it’s still not clear how widely they’ll be embraced by tradition-bound consumers. To make that happen, it helps to think of these new cars not just as stand-alone products but as part of a wider ecosystem that requires new business models to drive adoption.
One way to jump start that thinking is to see the documentary Revenge of the Electric Car. I recently caught a premiere screening at the Tribeca Film Festival that was followed by a panel discussion with the filmmakers and some of the stars of the film. I came away believing that electric vehicles are more than just a new kind of car; they’re also the start of a wholesale reinvention of how cars are built, sold, owned, powered and serviced.
Revenge is a follow-up to the 2006 film Who Killed the Electric Car? In the earlier movie, director Chris Paine explored the mystery of why General Motors recalled the much-loved EV1 sedan and crushed the vehicles into heaps of scrap. Now, in Paine’s new movie, the electric car is back from the dead.
The tone of the new film is often hyperbolic, but the intensity of the drama makes it work. Paine’s behind-the scenes footage reveals what it takes to get new products out the door, and the conflicts he captures turn Revenge into perhaps the best case study of innovation ever put to screen. That’s because Paine wisely chose to focus the lens less on abstract environmental issues and more on the super-charged personalities who are building a new sub-industry, namely GM’s Bob Lutz, Elon Musk of Tesla Motors and Nissan’s Carlos Ghosn.
Revenge ends just as the “extended-range” Chevy Volt and the all-electric Nissan Leaf are coming to market. At certain points, the film touches on the follow-on innovations that will be needed to support these vehicles and the necessary charging infrastructure. For instance, Nissan’s Ghosn gives a nod to Better Place, the ambitious startup led by Shai Agassi that is building a network of battery-swapping stations. The big idea is to solve the under 100-mile range-per-charge problem of most electric cars by creating the equivalent of a gas station, a place where you can “re-fuel” in less than five minutes. This summer, Israel will be the first nation to put that model to the test.
Bold new business models, each with its own customer value proposition, are just starting to hit the market. Some of the most notable ones include:
1) The cable company model: Utility companies are starting to offer free installations of high-voltage home charging units, then recouping that cost under monthly charging plans. This is akin to a cable company bundling the cost of the set-top box into the monthly package. For instance, Texas-based NRG is offering an unlimited charging package in the Houston and Dallas areas. The price: $89 per month, locked in for three years. Unlike the price of gasoline, which can and does fluctuate wildly, electricity can be offered at a predictable rate.
2) The consumer electronics model: Best Buy is installing charging stations in some of its parking lots and is also gearing up to sell EVs under partnerships with GM, Nissan, Ford and Mitsubishi. The retailer’s Geek Squad unit is being trained to visit consumer homes to help set up and troubleshoot garage charging units. This is a disruptive way of servicing a car. The motor oil change becomes a thing of the past, as there is none. You won’t bring your car to a dealer for a 30,000-mile engine tune-up, as all-electric cars have no engines. Instead, you might take it to the electronics store for its 30,000-mile software upgrade.
3) The car sharing model: Services such as ZipCar and Connect by Hertz cater to drivers who only need a vehicle occasionally, mostly for short local trips. E-cars make a lot of sense under this model because eliminating gasoline fill-ups should make the sharing process simpler and cheaper. Plus, you don’t run the risk of owning version 1.0 of a product that might be on a steep improvement curve. Hertz is testing a mini-networks of charging stations in New York City and at the University of Arizona, while ZipCar is testing Toyota’s forthcoming plug-in Prius in Boston.
4) The smart phone model: Smart phones can become key components of the ecosystem. Car companies as well as startups such as Ecotality, Coulomb Technologies, and PlugShare are now offering mobile apps that enable drivers to locate, reserve, and pay for charging. This often includes the ability to find charging stations that are powered by wind and solar.
So far, electric vehicles are selling in small numbers. That’s not because demand is low, but because production has been extremely limited. So the real test will come later this year when GM and Nissan are planning to supply dealers with thousands of cars per month. New business models can make electric cars cheaper, more convenient and more accessible. That may make the difference in the push beyond early adopters into the mainstream market.
Evan I. Schwartz is director of storytelling at Innosight.