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The right way to electric cars

The right way to electric cars

That idea would solve a lot of problems, starting not just with today’s installed base of cars, but with the installed base of car makers. Even though many of them are in trouble, it’s probably not the best time to start a new car company, either. Yet, while the market for new cars has slowed dramatically, it could be a good time to start a business replacing gasoline engines with electric ones.

The group’s initiative, led by Räsänen, is called eCars-Now! a small operation in Finland, it is less a company than a role model for companies that the team hopes will spring up worldwide.

Borrowing from the open-software movement, Räsänen and his colleagues want to make the idea and the basic designs free, and encourage many companies all over the world to implement it locally. Some companies will make batteries or electric engines or retrofit kits; others will retrofit petrol cars with the new engines—a great opportunity for jobless auto workers.

ECars-Now! hopes to foster an ecosystem of car service workers and parts makers similar to the ecosystem of open-software programmers and generic computer hardware. Of course, the parallels end at some point, because batteries and engines aren’t quite the equivalent of personal computers, but the ethos is much the same.

Räsänen and his team started by measuring the potential demand for electric cars in Finland. “No one had done that before in Finland," he recalls. “We decided that if we could get 500 people to show interest in a converted car, we could demonstrate that the mass conversion scheme would make sense."

It took eCars-Now! only 11 days to sign up 500 customers. To be sure, they merely indicated interest; they did not send money. But the firm’s website continues to attract new prospects, with 1,000 people registered as likely or certain to buy such a vehicle.

The site also solicited advice on which car to convert. The Toyota Corolla was the first choice—hardly surprising since it is the leading car model in Finland (with 7% of the market). Just 15 months later, in May, a retrofitted Corolla demo model with an engine from Detroit-based Azure Dynamics was on display at the Electric Vehicle Symposium, a trade show in Stavanger, Norway.

What will it take to make this idea work? To some extent, it’s already working—by spreading. Local efforts may succeed or fail based on the talents of local implementers. In Italy, inventor Roberto Vezzi had a Smart-EV (electric vehicle) project along the same lines. He has now joined the eCarsNow! movement, and his eSmart car will be upgraded with the open-source graphical user interface being developed for the eCorolla in Finland.

Other initiatives are springing up in Denmark, Latvia, Spain and Turkey, says Räsänen. The group is looking for an initial manufacturer/assembler for the retrofit kits (as opposed to the engines inside them). In the meantime, eCorolla and the eSmart will go through testing.

Overall, the economics make sense. Produced on an appropriate scale, a kit should cost about $20,000 (Rs9.36 lakh), including distribution costs and a profit margin. It should take about eight hours for two workers in a professional garage to install such a kit, or less than a week for the car owner himself/herself (or, as they say, two weeks if the owner’s spouse “helps"). That’s considerably less than the cost of a new car—especially an electric one.

The real benefit, however, is in the cost savings thereafter. To be sure, a lot will depend on the availability of convenient charging stations, but they are starting to appear.

The project is deconstructing the car industry—probably in a more effective way than US government officials are doing in Detroit. In Finland, at least, all you need from the government is a certificate of inspection, which costs about €100 (Rs6,700).

If all goes well, a host of electric car engine and retrofit kit makers will appear, serving different markets of existing car owners. Dealers and mechanics will install the batteries, comprising a new corps of workers devoted (indirectly) to cleaning up the environment and adding value to the installed base of cars.

Any far-sighted government could help not by subsidizing these efforts, but by buying up the old petrol engines. That provides an incentive to retrofitting companies, while competition for customers, rather than for subsidies, will encourage the various providers to be efficient. (Many European governments currently have “cash-for-clunker" schemes that buy and destroy old cars; a cash-for-gas-engines scheme would make more sense by lowering costs and conserving the many car bodies that still work fine.)

This project might have seemed quixotic a few years ago, but now it fits the times perfectly. It’s modest at a time when the world is in recession. It’s energy- and environment-friendly at a time when concerns about global warming are growing. And it’s distributed at a time when the world is sceptical of leaders’ promises and people are realizing they have to do things for themselves.

If you want to start an electric engine company, learn how to retrofit a petrol engine, or simply figure out what you could do with your own car, go to www.ecars-now.org. There may not yet be a ready-made solution for you unless you live in Finland, but that’s just the point: You can start a local version. If you build it, others will come!

©2009/Project Syndicate

Starting this month, Mint will present columns on new business areas and trends in technology by Esther Dyson, chairman of EDventure Holdings. Dyson is an active investor in a variety of start-ups around the world. Her interests include IT, healthcare and, private aviation and space travel. To introduce our readers to Dyson, we are running her past columns on three successive days. This is the third of the series. We will then feature a column by Dyson every month.

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