7/14/2010
By David Silver, Research Analyst

Investors have been enthralled with the electric vehicle for a while now, but the fervor has recently increased following the Tesla (TSLA) IPO and release dates of the first "affordable" electric vehicles (EV) approach. The Nissan (NSANY) Leaf will be the first to hit the showrooms, set for release this December. There are already 16,000 people lined up to take delivery of the car that can be plugged into a common outlet. There are plenty of reviews out there, Car and Driver, J.D. Power and Associates, and all have come back with some glowing reviews for the vehicles that bring technology and environmental protection together.

However, EV owners will be met with a big infrastructure dilemma; where to charge the car? The Tesla Roadster takes approximately 32 hours to fully charge from a 110 volt socket (the normal socket in your house), but when plugged into a 220 volt outlet, the charge time is diminished to approximately 4 hours. The new Leaf is a more affordable option, but the charge time still gets up there. There is a fast-charging option, but the standards haven't been set yet, so it is not included on all Leafs. Using a 220 volt plug, the Leaf takes approximately 16 hours to charge, however, using this fast-charge option (which uses very high voltages, between 300 and 500 volts of DC power) which can charge the car battery approximately 80% and last only a half hour. Once the standard for level 3 charging is set, it will make the EV market that much more attractive.

So we have seen how long it takes to charge an EV, but where to charge it would be my next question. You could pull into any fast food restaurant and plug in while you go in and get a burger, but the charge will not last long. There are thoughts to put charging stations across the nation to utilize the fast charge option or at least to utilize a 220V plug, but the roll out of this plan will be extremely expensive, and even with the expectation of government subsidies, the planning stages have been slow to develop.

Another hurdle to the acceptance of EVs is the EPA. Yup, the Environmental Protection Agency is causing a problem with how far these vehicles can actually travel. The EPA is considering changing the standards for determining how far an EV will be able to travel on one battery charge, and it should. Right now, you see the "highway" and "city" driving figures on the stickers for new cars, but the tests used for EVs are a little different. It determines the amount of miles driven on one charge to be under optimal conditions, and honestly, when is the last time someone drove under optimal conditions? The expectations are that the new tests will cause the "useful life" of EVs to decline by as much as 30%. Instead of being to drive almost 250 miles on a Roadster, the range would only be 175 miles. There was an interesting blog on Tesla's website about the actual distance that could be traveled on one battery charge. The blog noted the car would be able to get more than 300 miles per charge; however, it would have to go 30 miles per hour for 10 hours straight (no starting, stopping, speeding up, or slowing down). Averaging about 60 miles per hour, the Roadster will have a range of approximately 200 miles. The following chart is a chart of the range at different speeds.

So when it all comes down to it, the questions still remain for electric vehicles. The only way to really make EV a viable option is to make electricity cheaper, easier, and more available than gasoline. As of right now, EVs still have a long way to go... but look at the bright side, we will use less gasoline getting there.

David Silver
Wall Street Strategies