Batteries — owning or renting?

So — I am not ready yet to outline my blog approach — maybe there shouldn’t be one.

In the meantime, I am loving the fact that I get emails from Economist.com with the latest in a variety of topics including technology, green, business education and so on.  It is hard not to love their writing skill.  This one caught my eye:

The electrification of motoring:  The electric-fuel-trade acid test (Sept 3.09).

So I read on to find them talking about one of my favourite terms — invented at the Harvard Business School in 1995 by two researchers — the term is: disruptive technology — an innovation that fulfills the requirements of some, but not most, consumers better than the original technology.  They use the example of how charge-coupled devices or CCDs were the technical “disruption” needed to change us from careful photographers with only 24 or 36 shots in a roll  of film to free-wheeling snappers taking 1000+ pictures on a holiday (a weekend holiday) — and then sending them to all our friends.

The Economist writer used this story as a preamble/warning to the car companies that they had better be on the alert as disruptive technologies in batteries have been building over the past little while.

To quote:  “Bold claims are being made.  Carlos Ghosen, who leads the Renault-Nissan alliance, thinks 10% of new cars both in 2020 will be pure-battery vehicles…If that trend continues, liquid fuels might become as obsolete as photographic film.”

So if CCDs were the trigger for digital cameras, then the equivalent for electric cars is the lithium-ion battery or Li-ion.

The story goes on in quite a bit of detail —  rippling through options such as specialized city cars (accept minimal range), adding a gas-driven generator known as a “range extender” or do the all-battery thing but introduce battery-exchange stations.

This last idea has a proponent in a California firm called Better Place — they are looking to retro-fit current gas stations and turn them into car-charging and battery-swapping stations.

An interesting point from a consumer perspective is that “separating ownership of the battery from ownership of the car changes the economics of electric vehicles.  If you rent the battery rather than buying it, that becomes a running cost (like petrol) and the sticker price of the car drops accordingly.  This may not matter to the sophisticated economist, who would amortise the battery cost over the life of the vehicle.  Many people, though, are swayed by the number they write on the cheque that they give to the dealer.”

The article goes on to extend these ideas — giving me hope that when I am too aged to ride my Vespa, there will be a well-designed, electric car available — at least for rent!

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