Silicon Valley steers the way on electric vehicles
Silicon Valley becoming a hub of electric vehicles
A 2006 documentary about GM's ill-fated EV1 famously asked, "Who Killed the Electric Car?"
Silicon Valley is helping to bring it back to life.
Tuesday's scheduled stock market debut for Palo Alto-based Tesla Motors, the first by an automaker since Ford's in 1956, is only the highest-profile sign of the region's role as a vibrant hub of the growing electric vehicle industry.
The valley is also home to some of the top companies working on the infrastructure needed to keep the cars charged up and on the road, including Better Place of Palo Alto and Coulomb Technologies in Campbell, which have established early leads in creating battery-swapping stations and public charging networks.
Other companies here are quietly working on creating more powerful batteries for the cars. One is Amprius, a Menlo Park startup still in "stealth" mode that is developing advanced lithium-ion batteries. Google CEO Eric Schmidt is one of its investors.
"Tesla is catalytic," said Chelsea Sexton, an electric-vhicle marketing expert who worked on the EV1. "Venture capitalists have become willing to enter the transport space, beginning with vehicles and now transitioning into components, batteries and energy-management systems. Silicon Valley has the potential to be a center of the industry."
Transportation was the leading cleantech sector for venture capital dollars in the first quarter of 2010, with 24 deals globally that totaled $729 million, according to data from the Cleantech Group in San Francisco. Leading the pack was Better Place, which raised $350 million, making it one of the largest cleantech investments in history. And while the industry is still in its infancy, electric-car-related companies are adding jobs at a time when unemployment in Silicon Valley is at near-record highs. Tesla, which intends to manufacture its all-electric Model S sedan at the former NUMMI plant in Fremont, added 132 workers in the first five months of this year and now has 646 full-time employees, most of whom work in manufacturing and powertrain research and development. Once it reaches full production at the NUMMI plant, Tesla expects to produce 20,000 electric vehicles a year and plans to add as many as 1,000 more jobs. Coulomb Technologies has 62 employees and is actively hiring engineers.
The increasing interest in electric vehicles comes amid growing recognition that climate change must be fought, in part, with new technologies. Washington has devoted a great deal of attention to cleantech, and this week the Obama administration voiced support for a bill that would give $6 billion in subsidies to electric vehicles. In addition, Rep. Anna Eshoo, whose district spans much of the valley, has co-authored a bill to put 700,000 additional electric cars on the road in the next six years.
That is in part because transportation makes up about a third of America's greenhouse gas emissions.
The oil gushing in the Gulf of Mexico is likely to spur even more efforts to wean the United States from its dependency on fossil fuels.
And while Detroit remains the psychological center of the nation's auto industry, California is starting to attract people interested in the next generation of automotive careers.
Mark Duvall is the director of electric transportation at the Electric Power Research Institute, a nonprofit research think tank for the utility industry based in Palo Alto. When he graduated from UC Davis with a mechanical engineering degree in 1993, most of his classmates flocked to Michigan.
"You had two choices: get a Ph.D. in the Midwest or work at an auto company in the Midwest," Duvall said. "But now it's possible to stay in California and work in automotive engineering. The electrification of the automobile has spurred a lot of interest in infrastructure, battery technology and IT. Silicon Valley is the place to study IT."
Electric vehicles are powered by batteries instead of internal combustion engines. There are no tailpipe emissions, and the cost of the electricity to charge them is typically much cheaper than a tank of gasoline.
Much of the current buzz around electric cars stems from the fact that so many are rolling out in the coming months, with the Chevy Volt and Nissan Leaf scheduled to be on roads by December.
The region is also proving itself to be a leading market for electric vehicles; nearly 2,000 Bay Area residents have paid $99 to reserve a Nissan Leaf, more than any other region in the country.
Earlier this month, Toyota made three prototypes of its next-generation plug-in hybrid Prius available to the Silicon Valley Leadership Group as part of an 18-month demonstration project. Toyota is eager to gather data on how the vehicles perform and how consumers drive and charge them.
"Silicon Valley is always first for developing new technology, whether it's chips, computers or cars," said Mary Nickerson, national manager of advanced technology vehicles for Toyota Motor Sales.
To be sure, Silicon Valley isn't the only region of the country focusing on electric vehicles.
Michigan intends to be a center of electric-vehicle production and has targeted the advanced battery market. Battery companies A123 Systems and Boston Power are both in Massachusetts. Nissan will produce the Leaf at its plant in Tennessee. And Southern California remains home to startups such as Coda Automotive in Santa Monica and Fisker Automotive in Irvine.
Still, there's a growing sense that Silicon Valley is playing an increasingly important role. Hundreds of automotive manufacturers, component suppliers and utility executives will descend on San Jose in late July for "Plug-in 2010," a four-day electric-transportation conference.
Technology forecaster Paul Saffo is bullish on the valley's emergence as an electric-vehicle hub. He notes that Tesla is selling not just a car, but a bold vision of the future.
"You can be fond of your Prius, but you are not going to burn rubber in it," Saffo said. "Tesla sells excitement. Tesla is very much a technology company, and they are going to keep advancing the art of electric drivetrains. The real promise of the electric-car business has just begun."
By Dana Hull
Mercury News
June 25, 2010