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   October 2013

    



The Volkswagen XL1 gets its U.S. unveiling at the Society of Environmental Journalists annual conference in Chattanooga, Tenn. (Photo: John Platt)

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Six Ways Electric Vehicles Are Stimulating the Economy

By John R. Platt

A few days ago I had the opportunity to witness the U.S. unveiling of the Volkswagen XL1 Plug-in Hybrid, an amazing vehicle that has a promised fuel efficiency of 261 mpg. Although the XL1 has a sticker price that is just slightly outside of my own budget $144,000 Volkswagen anticipates that the entire 250-vehicle production run of the world's most fuel-efficient car to date will quickly be snapped up by expectant buyers. After having a chance to sit behind the wheel, it's easy to see why.

High-end hybrids and electric vehicles like the XL1 are selling like hotcakes (Tesla, anyone?) and they get a lot of press, but there are many other such vehicles racking up the sales. Beyond the cars themselves, the technologies behind electrified vehicles are expanding rapidly and creating growth in both existing and newly developing fields. Experts predict that the next five years will see tremendous change, and with that change will come a wide range of opportunities.

Some of those opportunities have already arrived. Here are six ways in which electrified vehicles are stimulating the economy.

1. Retail Sales

After a brief dip a couple of years ago, hybrid and electric vehicles (EV) sales are booming. Automakers sold 54,855 hybrids and 11,392 electric vehicles in August 2013, an all-time high for both categories. It's not just EVs: vehicle sales in general are on the rise and could hit their highest level in six years in 2013.

Manufacturing capacity, meanwhile, is still adapting to the growth in sales. "This May was the first month that the demand for electric vehicles exceeded supply," says Lee Stogner, chair of the IEEE Transportation Electrification Initiative. Just a decade ago many older factories were closed down. Today, Stogner says, new factories are filling the gap. "The factories today are much more modern and able to build superior cars at a faster rate."

Of course, some of these EV sales come at the cost of existing markets. Tesla Motors' high-end EVs have apparently taken over 8.4% of the existing luxury car market, leaving legacy manufacturers struggling to keep up. Although the company does not report monthly sales figures, it did deliver about 10,000 cars in the first half of this year. Mercedes, BMW, Porsche and Lexus all saw sales drop during this same period. Porsche sold just 2,532 cars in the first half of 2013, down more than 38% from last year.

While Tesla has taken over a good chunk of the luxury market, other manufacturers still dominate the market in terms of total sales. Ford sold nearly 8,300 hybrids or plug-in electrics in August; GM sold 6,148; Nissan sold 2,420; and Toyota sold an amazing 38,799 high-efficiency vehicles. Industry projections anticipate these numbers to grow by about another 10% in 2014 and to keep growing after that.

2. Jobs

To put things simply, electric vehicle manufacturers are hiring. A search on the technology job site Indeed.com on September 27 found 1,213 open positions in the hybrid or electric vehicle field and more than 1,700 jobs in battery engineering. A search of Tesla Motors' jobs openings the same day revealed an astonishing 821 jobs. Many of those Tesla jobs were for sales or service, but a large majority of those postings were for engineers or other highly technical employees. The company already had nearly 3,000 employees at the end of 2012.

It's hard to tell exactly how many people are working on electric vehicles, but according to the Bureau of Labor Statistics the U.S. automotive industry added more than 35,000 jobs between August 2012 and August 2013. They're not done hiring: According to the Center for Automotive Research, the industry is expected to add a total of 35,000 jobs in calendar year 2013.

3. R&D

Everywhere you look, companies and governments are investing in EVs and related technologies. General Motors recently invested $20 million to expand its Battery Systems Laboratory, which has already put in 2.5 million hours of battery testing and developed numerous innovations. The Obama administration just pledged $45 million through the Department of Energy to develop new materials, batteries and power electronics, as well as related systems. Dozens of similar other R&D projects of various sizes and copies have been announced so far this year.

Some of this R&D is being conducted by corporate interests, while other aspects are being researched within academia, or as corporate-academic partnerships. In September NOHMs Technologies announced a $5.3 million project to research next-generation lithium-ion batteries at the University of Kentucky. "The university materials lab that comes up with the breakthrough battery, their endowment is going to be billions pretty quickly after that," Stogner predicts.

If you want to fully understand the scope of EV R&D, Stogner says the IEEE Xplore database is the best place to start. Between journals and conference proceedings, he suggests, the IEEE has probably published more research related to electrified vehicles than any other source.

4. Stocks

Tesla Motors, which is selling just 1,500 to 2,000 cars a month, is nevertheless a Wall Street darling. After a massively successful IPO, the company's stock continued to rise. As of late September the company had a market capitalization of an astonishing $22 billion about 40% that of powerhouse General Motors. Of course some of this is hype, but it's also because investors expect to make a profit on Tesla stock and the technology the company is heavily promoting.

The auto industry in general is doing well on Wall Street. According to the Dow Jones U.S. Auto Manufacturers Index, auto stocks have risen from a low of 121 a year ago to a high of more than 227.  EVs and related technologies have obviously driven some of that growth, although the rise isn't universal. Zenn Motor Co. has seen two or three stock price spikes over the past year but has otherwise remained relatively flat. The Canadian maker of electrical energy storage units is still operating at a loss.

5. Supporting Businesses

No automobile manufacturer is an island. Every hybrid or EV contains or will rely upon components or systems or technology developed by the many companies springing up to serve the market. These companies are writing software; developing batteries, sensors or electronics; implementing plug-in stations; and figuring out pieces of the technology at every point in between. "Big shops, little shops, it's spread all over the country," Stogner says. "There is a robust market out there and it's going to get more complex and bigger."

Even today's fossil-fuel-powered vehicles have already taken many steps toward the technologies that enable fully electric vehicles. "If you raise the hood of today's cars, whether they're a Prius or a Taurus, there's more money being spent on electronics, computers, networks and a whole variety of sensors than mechanical parts," Stogner says. It's hard to imagine a new car being sold today without at least the option of GPS; those same technologies will be vital components in the fully electrified transportation system.

6. Productivity, Efficiency & Safety

This is probably the most developing area of EVs, but experts predict that the vehicles and related technologies will make the world more efficient, more productive and much safer. Already the Tesla Model S has been rated as the safest car ever made.

"It's not just a matter of us driving a Leaf that you can run purely on electricity," Stogner says. "Electrified vehicles are all about improving the overall safety, the connectivity, the emissions controls and the efficiency of the vehicles." Sensors are already a big part of controlling emissions, and will continue to do so, but they next step will be even better. The growth of vehicle-to-vehicle and vehicle-to-cloud communication systems will allow cars and trucks to both move faster and avoid crashes by working together, a process that could reduce both injuries and deaths. "Once these vehicles are in communication with each other, you could save significant lives in this country," Stogner predicts. Meanwhile, reducing greenhouse gas emissions and particulate pollution will reduce asthma and other illnesses, save lives, and help the entire planet avoid the effects of climate change.

Risks?

Of course, questions remain about just how much energy we save with electric vehicles. This summer IEEE Spectrum took a look at EVs and concluded they were no greener than current, fossil fuel-powered vehicles at least once you consider the ways in which they are manufactured. A brief follow-up encouraged more R&D to make them even greener. Meanwhile, some people fear that the U.S. electric grid may not be up to the challenge of adding tens of thousands of new EVs.

But Stogner says EVs and all of the new technologies associated with them are not only coming, they're coming sooner than you might think. "Typically technology, whether it's a microwave oven or an electric vehicle, takes 30 to 50 years to roll out across the world and impact the lives of everyday people." But IEEE and its members are helping to speed up this process. "If we could make that happen in 20 to 30 years, that's a good thing. We could actually help society move toward a better place."

But it won't take decades before we see dramatic changes. "You'll be seeing more changing in car technology in the next five years than you have in the past hundred," Stogner says. "The market expects it. Government will demand it. And the market will bear it."

Additional Resources

o    Visit the IEEE Transportation Electrification Initiative's website and read their Flipboard for the latest industry news

o    Join the IEEE Clean Transportation group on LinkedIn

o    Attend an upcoming IEEE conference related to EVs and related technologies:

o    IEEE Vehicular Technology Conference

o    IEEE Conference on Intelligent Transportation Systems

o    IEEE Vehicle Power and Propulsion Conference

o    Vehicular Electronics Conference/International Electric Vehicle Conference

o   IEEE International Conference on Connected Vehicles and Expo

o    Learn more about EVs: IEEE.tv has published 7 online video lectures produced by the IEEE Vehicular Technology Society

 

 

Comments on this story may be emailed directly to Today's Engineer or submitted through our online form.

 

Comments may be submitted to todaysengineer@ieee.org.

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