Deconstructing Detroit Electric

Things continue to develop on the EV front, with some fascinating news coming from Detroit Electric, a company I had barely heard of. Let me take a minute or three to quote from and deconstruct their announcement from March 30th (emphasis added):

Detroit Electric to produce and market full line of innovative Pure Electric vehicles in US, UK, EU and China beginning 2010

KUALA LUMPUR, March 30, 2009: Detroit Electric Holdings Ltd and PROTON Holdings Berhad today announced a strategic partnership to mass produce Pure Electric Vehicles. Detroit Electric will integrate its patented electric drive systems into the vehicles.

…

“Today’s agreement with Proton will put Detroit Electric on the fast track to bring a full line of innovative, practical and affordable pure electric vehicles to the global market,” said Albert Lam, Detroit Electric’s Chairman and Chief Executive Officer. “We chose Proton due to its state-of-the-art production facility, commitment to research and development, cost efficiency, and stable, high-quality workforce.”

By 2012, Detroit Electric plans to sell more than 270,000 Pure Electric Vehicles in Europe, UK, China and the United States. The vehicles will be priced between USD 23,000 and USD 26,000 for the city range model and between USD 28,000 and USD 33,000 for the extended range model. Styling changes will distinguish Detroit Electric’s vehicles from Proton’s existing line-up.

The vehicles will be based on Detroit Electric’s unique, patented electric drive system that greatly reduces the electric motor’s size and weight. The underlying Magnetic Flux Motor Technology and well-proven Lithium Polymer Battery Technology allow pure electric vehicles to achieve a single-charge range of 180km (111 miles) for the city range model and 325km (200 miles) for the extended range model.

…

On the current global downturn in automotive markets, Lam expressed confidence that Pure Electric Vehicles will attract a diverse base of consumers despite the tightening credit market, lowered consumer confidence, unstable oil prices and stricter fuel economy regulations.

“Our target audience are those who purchase practical and affordable vehicles. This makes our products fit the pockets of a very wide audience – from professionals and executives, to mothers, students and small business owners.”

I think this is interesting, on several fronts.

• As the title of the release says, these cars are headed for the US, EU, UK, and China, all in 2010. Even assuming the usual public relations fudge factor/production slips, that’s still good news for those of us eager to drive on electrons and not ancient algae.
• Notice that they’ll be marketing two basic models that differ in their battery size/driving range per charge. This is something that I’ve been talking about for a long time, and I expect other companies to follow suit. It makes no sense to offer a car to the public with only a single choice for something as basic as the battery range.
• Similarly, I expect to see car manufacturers (or third party companies) offering replacement or add-on batteries for even greater range. Upgrading an EV’s battery pack is vastly easier than is changing the engine or transmission in a gasoline engine car, so I expect a lot of entrepreneurs to leap into this market, even more than the number of places that are already converting Priuses to PHEVs.
• Taking that upgrade notion even further, I would expect to see some after market conversions using quick-recharge batteries. Quick recharge capability dramatically extends the car’s effective drive range, meaning at least some drivers will be willing to trade off the standard battery pack for a slightly more expensive, quick recharge version that might have only 75 to 80% of the single-charge driving range. As correspondent JD pointed out, quick recharge packs would require a broadband electrical outlet and not the dial up level of power most of us have in our homes, but I would expect a lot of people would be willing to pay an electrician to add a 220 volt outlet to their garage.
• Notice the vehicle pricing in the release. If Detroit Electric can sell a 111-mile range EV in the US in 2010 for $23,000, you can bet that larger companies with more economies of scale leverage can do it, too. At that price, the EV revolution will kick into overdrive quicker than you can say, “Holy Thomas Edison!”
• Notice what the pricing says about the battery cost. Assuming the vehicle gets about 5 miles/kWh, then the extra 89 miles of driving range (plus some other minor, unrelated goodies, I’d guess) will cost $5,000, or an additional 17.8 kWh of battery capacity for about $280/kWh. Based on other prices I’ve seen quoted for vehicle-scale battery packs, this is pretty aggressive, and it says a lot about the expected decline in the cost of batteries.
• I don’t know how well Detroit Electric will succeed in the US. My gut feeling is that they’ll be overrun by EVs from Nissan and Mitsubishi, and possibly some surprise late entries from Toyota and Honda.
• Somebody remind me again why anyone is excited about hydrogen fuel cell vehicles?
• I’ve been telling people for years that we’re headed for an explosion of change and options in cars that will rival what we saw with the arrival of HDTV’s and cell phones and other mobile devices. That sound you hear in the background, the one that’s vaguely reminiscent of the “going to warp speed” effect from Star Trek movies and TV shows, isn’t entirely your imagination; it’s the entire US (and world) transportation sector beginning to change itself.