Nissan Announcement and U.S. Grants Add up to a Big Week for Electric Vehicles

Nissan announced on Sunday that it would offer an all-electric five-passenger sedan in Japan, Europe and the U.S. in 2010, and President Obama yesterday announced more than $2 billion in grants to jump-start development of electric-vehicle technologies in America. Electric drive-trains (the motor and other mechanical elements that make the vehicle go) are gaining momentum, even as an infrastructure to support them is not yet in place.

Other zero-emission drive-trains, such as those that use hydrogen fuel cells, "still [seem] a long way off," Wharton management professor John Paul MacDuffie said in an interview posted this week on Knowledge at Wharton. "There still may be some action in alternative fuels which can be used — ethanol-based fuels, or bio-diesel, or things like that. But I think the all-electric [car] is probably where the most action will be."

A number of startups are aiming to address the infrastructure challenges — such as where people will recharge their batteries if they can't do so at home. In the interview, MacDuffie, who is also co-director of the International Motor Vehicle Program, cited the work of Shai Agassi, founder of Palo Alto, Calif.-based Better Place, which proposes a network of stations that would let drivers quickly swap a spent battery for a new one in the same way that gas grill owners swap empty propane tanks for filled one. Better Place recently struck a deal with the government of Israel to build such a network there. Another startup, Coulomb Technologies of Campbell, Calif., has a revenue-sharing business model that puts recharging stations in parking garages and other public locations.

"One interesting question from an industry-structure point of view," said MacDuffie, "is what role will be played by small startups like Fisker or Tesla, versus the big [car companies]. It seems unlikely that any small startup is going to be able to scale up to the level that would bring prices really low. But a promising startup that has a really great technology might be a prime acquisition target in a couple of years."