Automotive: Any colour as long as it is green

By Jonathan Soble
Published: October 13 2008 10:44

If you live in Japan and want to show your love for Mother Earth – or your contempt for the global oil industry – then, beginning next summer, you will be able to do so in an unprecedented way: by walking into the showroom of a leading automaker and buying a clean, cheap-running electric car.
Mitsubishi Motors, the company that has created the vehicle – the i Miev, a small, snub-nosed hatchback that is powered by lithium-ion batteries – says it is confident enough in the range, power and safety of its prototype to bring it to market a year ahead of rival electric cars from General Motors and Renault-Nissan.
The i Miev can zip along at 130km/h and travel 160km on a single charge – far short of a petrol car’s range but much farther than most people drive in a day, especially in cities. It can be recharged overnight from a regular household socket or in just a few minutes using a “quick charge” kit developed by Japanese power companies, which have partnered with Mitsubishi in research and development.
In an age of high fuel prices and fears about global warming, the i Miev is attractive. This summer, Mitsubishi drove a test model 800km from Tokyo to Hokkaido, site of the Group of Eight summit, on just ¥1,700 ($17) worth of electricity. The same journey in a petrol car would have cost nearly 10 times as much.
The i Miev is not for everyone. Few will be available at first, and early adopters will have to pay for the privilege: the 2,000 or so units that Mitsubishi plans to make the first year (and sell only in Japan) will cost four times as much as the ¥1.3m petrol-powered version of the car. Even after government green-vehicle rebates, buyers will still have to shell out about ¥2.5m, Mitsubishi estimates – more than enough to wipe out gains from lower running costs.
Still, while initial sales volume will inevitably be small, early positioning can be vital, as challengers to Toyota’s pioneering Prius petrol-electric hybrid have discovered to their loss. Introduced in Japan more than a decade ago, the Prius remains by far the top-selling hybrid worldwide.
Whether Mitsubishi can replicate that feat with all-electric vehicles remains to be seen. It has less manufacturing and distribution muscle than GM or Renault-Nissan, let alone mighty Toyota, which is strengthening the electric side of its hybrid’s powerplant (it plans to offer the first “plug-in” model on a limited basis next year) and is quietly tinkering with a battery-only city car of its own.
What is certain is that even as carmakers from the US to Europe to China are furiously drawing up plans for next-generation electric cars, Japanese producers remain the players to beat. “They are the ones that people are watching,” says Hirofumi Yokoi, analyst at CRM Worldwide, a motor industry market research firm.
Kurt Sanger, motor analyst at Deutsche Bank, notes that only the top Japanese producers have succeeded in marrying big green-technology advances to volume production. Referring to heavy publicity surrounding GM’s Chevy Volt, a “petrol-assisted” electric car promised for 2010, he says: “You’re not going to see many Chevy Volts in people’s neighbourhoods until 2013 or 2014. What is Toyota going to have by then? Their biggest threat is on the public relations front, not in the parking lot.”
Of course, Japan’s car industry is not monolithic, and differences exist among carmakers over everything from battery technology to the fundamental limits of powering cars with electricity.
Among the sceptics is Honda’s chief executive, Takeo Fukui, who touts hydrogen fuel cells as the best successor to the internal combustion engine and has dismissed batteries as an insufficiently brawny “golf cart” technology. His company is expanding its range of hybrids (it is currently the biggest producer after Toyota) but Mr Fukui says that he has no plans to build a battery-only vehicle.
As a matter of national policy, however, Japan – which has no oil, but a big nuclear industry – is an unambiguous backer of electric cars. It wants half of all new cars sold by 2020 to be powered by non-petrol sources and pledged at this year’s summit of the Group of Eight leading nations to cut overall carbon dioxide emissions by 60-80 per cent by 2050.
Last month, the government began accepting applications from cities and towns wishing to become “model districts” for next-generation vehicle infrastructure, a programme that will involve installing recharging outlets in carparks, supermarkets and restaurant chains. Kanagawa prefecture, the region adjoining Tokyo, has already committed to providing 150 quick-charge stations as part of an effort to put at least 3,000 electric vehicles on its roads within five years.
The government also plans to encourage private enterprise to offer discount rates to electric vehicle drivers on everything from parking to insurance and loans. It is pushing Japan Post, the recently privatised postal service, to convert its fleet of 21,000 delivery vehicles to electric cars.
Big utilities are also behind the project. Tokyo Electric Power (Tepco), the group that supplies Japan’s capital region, is one of the backers of Mitsubishi’s i Miev and the developer of the “quick charge” technology, which it says can provide enough power in a five-minute stop to drive a small electric car 40km.
“We got involved in electric cars to try to sell electricity at night,” the company says, noting that most drivers would recharge their cars at home during the utility’s off-peak hours. “But it has become a way to contribute to society.”
Copyright The Financial Times Limited 2008