Mark Perry is a speaker at the GoGreen Conference 2010 in Seattle, WA. Join us April 21 for the conference to hear from Mark and a roster full of more amazing speakers.
If you think a convenient, cost effective electric vehicle (EV) that doesn’t look like a cartoon characterization of an automobile is a thing of the future—think again. Nissan America and eTec are teaming up to deploy 4,700 LEAFs (their new electric 5 passenger, 4 door EV) to the market along with 12,500 charging stations in markets across the U.S. Mark Perry, Nissan America’s Director of Product Planning and Strategy sits down with the GoGreen Team to talk about cost, range and how the availability of reliable mass market electric vehicles could change the transportation game in the U.S. forever.
GG: Can you give us a “state of the EV” report?
MP: What we’ve seen over the last couple years from manufacturers is a recognition that electrification of the transportation sector is no longer a “what if.” It’s more a question of when and people have now started using the term inevitable.
We’ve been working on Lithium Ion batteries at Nissan for over 17 years now, so when we started this project we were the first. Over that 17 years we’ve continually worked on it, but the last 18 months is where we’ve been out talking about mass production and mass marketing of electric vehicles. And now, I don’t think there is a manufacturer that doesn’t have some kind of similar program. Most of them are test and demonstration, but everybody is jumping into a change in both the fuel and the power plant that will drive transportation into the future.
GG: We saw that both Porsche and Ferrari now have hybrid vehicles in test programs, is this the kind of trend you’re speaking of?
MP: Exactly. You know when those guys are doing this that you’ve reached a tipping point.
GG: What do you consider some of the most exciting technologies coming out at the beginning of this decade for American vehicles?
MP: It’s a combination of the amount of investment that’s going into Lithium Ion batteries—which is tremendous—there are a lot of really good batteries out there now. My crystal ball—going out 10 to 15 years—is a little cloudy, but there’s a lot of continuing research and development that will continue to go on.
The batteries we’re seeing come to market now are a leapfrog in technology from where we were, even eight years ago. And then, of course, when you’re working in Lithium Ion batteries and electric motors, you’re also setting yourself up for fuel cell vehicles of the future. Even if battery technology doesn’t make a leap, we’ll still have a very efficient plug-in hybrid.
We think the end game is electrification—either pure battery electric or fuel cell.
GG: Are Lithium Ion batteries a stepping stone to get us to that end game?
MP: We think with the hybrid technology that’s out there for a while and plug-in hybrids are the bridge technologies to electrification. Once you get to battery powered electric vehicles, you’re trying to reduce cost and improve range. With fuel cell vehicles it the combination of shrinking the size of the overall hydrogen that you have to carry, how to refine it and how to shrink the size of the entire fuel cell pack. Reducing cost, reducing size, reducing weight.
The battery pack that we have now in the Nissan LEAF, just from where we were in 2002 is half the size, half the weight, twice the energy density and one sixteenth of the cost.
GG: What is the biggest shift that still needs to happen? Cost? Distribution channels? Technology barriers? Public perception? Where is the disconnect between where we are now and everyone driving a car like the LEAF?
MP: We think our program is a little bit different than most in that we are going into mass production and mass marketing the LEAF. It will be the first time in history that these vehicles are widely available. Second, this vehicle is going to be affordable. It’s not just for elite, but affordable for the masses.
Third, you have the issue of range. The range is the range. That’s more of a marketing and behavioral issue that we’re going to have to do some education on. The technology is not for everyone—but it does cover 95 percent of your daily driving habits. But the technology just isn’t there yet to pull a boat behind it or a horse trailer or to go four wheeling.
GG: Is technology the biggest challenge you’re facing right now?
MP: It’s one of them and obviously cost as well. When you get to mass production scale, you need to drive your costs down. We’re very appreciative of both the federal and state incentives that are available. But we also know that to truly achieve mass market success and scale, you can’t always rely on those to be there.
Our task is to appreciate the level of support that’s there to help get the market started, but long term, manufacturers have to get their costs in line to the point where you’re not paying a premium for the technology.
GG: If you’re willing to look into your crystal ball again—how long do you think we are off until we’ve got fuel cell semi-trucks crossing coast to coast in America?
MP: Right now we’re seeing a combination of hybrid-electric—so a combination of diesel and hybrid-electric bucket trucks—come to market already. People have joked—and I can’t claim this as my original thought—that there is no silver bullet to solve our transportation issues, but there are silver buckshots. By that I mean that for some vehicle segments—medium and large duty trucks—natural gas and diesel may make some sense. For passenger cars it’s battery electric or fuel cells at the end.
For other vehicle segments it may be a combination of technology. It just doesn’t appear that there is one technology right now that solves all issues. However, we’re seeing manufacturers working on all five—improving gasoline engines, looking at clean diesel, hybrids, plug-in hybrids and then finally, electrification.
GG: Has the consumer mind set changed in the past five to 10 years? Or are proponents of these technologies still preaching to the choir?
MP: No, it’s changed. I think that the number one issue always has been and will continue to be price. It doesn’t matter the vehicle segment or the power train or the technology, the first question is always about price. People always ask, “what does it cost,” “am I expected to pay a premium,” and “is there a payback period?”
What Nissan is setting out to do is to take away the cost premium issue and the payback period, so you’re better off from day one. We really hope to change the game completely with the launch of the LEAF.
The second biggest issue has always been range. And the third thing that comes up are the positives—the economic benefits, the environmental benefits, reduction benefits and the philosophical benefits from feeling like you’re doing the right thing. But those things always come third behind the rational issues.
GG: How will marketing messaging and branding strategy factor into educating the public on the need for electrification of our vehicles?
MP: It’s a big task. We’ve spent the last 18 months talking to people trying to get them to understand that this isn’t technology that’s 10 years away. It’s here. We’re nine months out from launch and we have a vehicle that goes 100 miles on a single charge, is affordable and you can use it everyday as your primary vehicle that you go back and forth to work in, do your chores, grab the kids and what have you.
So the first piece of the launch is the education piece. The second piece is the concern about charging. What people aren’t considering is that you charge overnight in the convenience of your garage at very low electricity rates, and wake up every morning with 100 miles in your tank. The early adopters get it, but the majority of Americans are still learning that you’ll never have to go to a gas station again. This is as convenient as plugging in your cell phone and it take a little time to get used to that concept.
The last piece of the puzzle is asking how far people really go on a daily basis. You can sit there and show the statistics—95 percent of the population goes less than 100 miles a day and 72 percent go less than 40 miles—but until people actually do that for themselves it’s a challenge. We’re actually challenging people to keep a driving log for a week to track their mileage day by day to see how far they actually go. Most people find they don’t go very far at all.
GG: When did Nissan lock on to the importance of heading down the electric vehicle path? What prompted the support in your corporate culture for that?
MP: It was back in 1999 when the Nissan Renault happened. We’d been working on the Lithium Ion batteries for almost a decade before that and were the first car company to do a Lithium Ion battery pack vehicle in 1998. That was our test and demonstration time. When Mr. Ghosn and the Renault team came and saw an advanced engineering, almost skunk works in the top part of the company, he found this electric vehicle program and a battery team working diligently without a lot of visibility in other parts of the company. He saw that as a gem or a nugget that he had uncovered.
We continued to work and in 2002 we had a breakthrough on the battery itself. Once that happened, it became a question of how we could get this to market, because Mr. Ghosn saw the combination of consumer interest, the pressure from a regulatory standpoint on things like CO2 reduction—and we see that increasing with cities like London and Paris restricting access to their downtowns to vehicles that meet a certain low or no emissions standard—and then also the sheer multiplier of more vehicles hitting the road every year in China and India with an increasing pressure on the oil supply and fuel prices. It was pretty clear what direction we needed to take.
GG: Where there challenges you faced when bringing this technology to market?
MP: Of course. You have to have high confidence in the battery technology and its durability and reliability. Two, you have to find and optimize a vehicle platform. You’re always dealing with weight, size and cost—and you’re always trying to maneuver around those three sometimes competing variables to find the right combination.
Until we were able to get the pack down as small as we have and move beyond the flashlight and laptop batteries cell structures of the past into a format that is flat—think of an 8.5×11 sheet of paper—you’ve heard them termed as laminate, pouch, prismatic, polymer and they’re all flat structures that are easily stacked. And all of a sudden, you don’t have to give up rear seat room or trunk room. You can have a normal passenger interior and package the battery down below the seats and you have a viable vehicle concept.
Now from a manufacturing standpoint, there isn’t an automotive company out there that has a long history of manufacturing batteries—some have played around in that arena—we probably have the longest history of research and development in battery technology internally at an auto company, but what you then have to go do is find manufacturing expertise. You can’t build a battery pack in a normal automotive factory.
GG: Do you think people will start to outsource? And it might be like having a Intel processor in your computer regardless of whether you have a Mac or a Dell?
MP: We see a little of that happening already. Most of the major players have entered into partnerships or hooked up with different battery suppliers. Our joint venture is with NEC. They were brought to the party, because they have mass production manufacturing expertise in battery packs. So it’s our cell, but they are a big part of the equation of bringing that to mass market.
In the United States, you have A123 hooking up with a couple of auto companies. LG Chem out of Korea is working with Volt. Panasonic is working with Toyota. So the partnerships are forming right now. Will there be one battery that emerges so far superior to everybody else’s? I don’t know yet. I think the first person who gets their costs in line and has a very reliable and consistent battery pack may win the advantage.
GG: Can you tell us about the program that Nissan is running with eTec that is building charging stations and distributing vehicles in the Seattle area and across Oregon?
MP: We were fortunate to partner with eTec, who has been a longtime partner/supplier with the US Department of Energy (DOE). The DOE put out a series of grants back in May of 2009 looking for projects that were focused on mass scale. It was all about the charging infrastructure and how people would actually use them. We were fortunate to win $100 million out of a $400 million pool of money to build the single largest public and private charging infrastructure and electric vehicle rollout ever.
So in five regions and cities around the country they’ll be fast started. Those aren’t the only markets where we’re launching, but those markets will see the system quicker. There will be a total of 12,500 chargers put in and 4,700 Nissan LEAFs made available. The project is all about how they people who own the vehicles actually interact with and use both the car and the charging network that’s deployed.
Especially in those markets—Seattle, the state of Oregon, San Diego, Phoenix/Tucson and the state of Tennessee—the issue of the ability to charge and concerns over not being able to find charging stations hopefully won’t be there, because there will be a fully deployed, rich and diverse charging network on the ground.
GG: Are these stations for the exclusive use of the people in the program? Or if you have another brand of electric vehicle, are those stations still available for your use?
MP: The good news from a consumer standpoint or a retailer standpoint is that for once, we’ve actually gotten ahead of industries like the cell phone makers. The charging is universal. There’s an industry standard for the charging port and plug that anyone’s vehicle—whether it’s pure electric or hybrid electric—can use. It’s the same plug.
The charging network we’re building is not proprietary for Nissan vehicles, it’s just that we believe we’ll be the biggest users, because we’ll be out there in volume and scale. Though, as part of the project, there is a local 50 percent match, which can be financial in kind dollars or it can be things like land or access. Obviously if you purchase a Nissan LEAF, that goes beyond that match that’s required. So folks that participate in the program and purchase a LEAD will be supplied a home charger as long as they agree to participate in the research.
GG: Why is this initiative so important and why are Oregon and Seattle among two of your five test markets?
MP: Start with consumers. Where are the early adopters? Where are the folks who have been living green, breathing green and talking about living sustainably for a long time? In the quick surrogate you look at in the early adopter market for hybrids and what markets they took off in first. Oregon and Seattle, from a per capita standpoint, if they’re not number one and two, then they’re really high up there.
The second part of the process was supporting utility companies. So Seattle City Light, Puget Sound Energy, PGE and Pacific Power, Salem Electric, etc. are very supportive and advanced with a high percentage of renewables in their portfolio. In Seattle even, the EVs will be running around a net carbon zero power source, because even if you look back at the utility company and the amount of hydroelectric power they have, you’re net carbon zero from a source standpoint—which is fantastic.
The third component to our choice of markets was policy. So in the state of Oregon, the Governor’s Office led a task team that drove the entire state to decide that they wanted to be a the forefront of both electric vehicles and renewable energy. Oregon and Seattle are two areas of the country that are leaders—longtime leaders—in these sectors and it made a lot of sense to work there.
The Department of Energy is looking for a deliverable of information on around 100 million miles of real world activity with EVs after two years. They can use this to study how EVs are used, where people charged, how often did they charge? Did they use 50 percent of their battery on average or 80 percents? When did they look for charging? We’re also going to demonstrate fast charging in those areas where the station allows you to get an 80 percent charge in 26 minutes—and we want to know if that will change charging and driving behavior.
The program is designed to help leaders in other parts of the country who may not be quite as advanced, or who are looking at a blank sheet of paper and trying to figure out what they need to do to get started. The report will be able to help them understand what they need to plan for and how to do a deployment of public chargers. It will answer how many of them they’ll need, where to put them, how dense. And for the utilities, it will let them know what their load profile will be like and what the need to do to prepare for it.
GG: Any other topics of interest you’d like to hit on before we wrap this up?
MP: People always ask us, “why now?” We talked a little about that earlier—consumers are demanding this, regulatory pressures are rising and the number of vehicles is sky rocketing as India and China take to the road. With a normal adoption curve on the number of vehicles we have on the road today, we could easily have two billion cars on the road in 2020. And as it stands, there just aren’t enough resources to put two billion cars and trucks on this planet. We have to change.
The questions are how fast and when? Electrification is a very efficient mode of transportation—far more efficient than an internal combustion car.
So—why now? That’s usually the first question and then we get “how many?” It’s funny because the most aggressive study—done out of UC Berkeley—said that the top number would be 64 percent market penetration by 2030. But we also had the CEO of the Royal Dutch Shell Oil Company predict 45 percent of the transportation sector will be electrified by 2050. So the forecasts are there from various sides of the table and we think its going to move faster than many expect it to. It’s coming and the good news for GoGreen readers and participants that live in the Northwest is that they’ll be right at the center of it all.
And it’s not just Nissan. At last count, there were probably 30-40 different EV projects out there. Most of those are still in test and demonstration programs, but people are moving in the right direction.
Mark Perry is the Director of Product Planning and Strategy at Nissan America and a featured speaker at the GoGreen ‘10 Conference on April 21, 2010 in Seattle, WA. To register for the GoGreen Conference ‘10, please visit: http://www.seattle.gogreenconference.net/registration. GoGreen ‘09 sold out, so make sure to sign up soon! Mark and our other 40+ eco-visionary speakers are going to rock your green world.
To learn more about Mark Perry and the Nissan LEAF, visit: http://www.nissanusa.com/leaf-electric-car/index.jsp
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