For car makers, it's suddenly all about electric

A visitor to the Frankfurt Auto Show, the biggest event of its kind, might think all is well in the car world.

Outside the vast exhibition halls, auto makers may be firing tens of thousands of workers and losing billions. But inside, the cars gleam like polished gemstones, exhibitors swill champagne and executives and engineers burble enthusiastically about the dawn of a new era: The electric car is here.
Electric mobility – e-mobility to use the new buzzword – is the auto show’s theme. Dozens of electric cars were rolled out at the start of the Frankfurt show last week. Many manufacturers, big and small, announced plans for electric car production or development.

The internal combustion engine, and all the woes that come with it – planet-frying carbon-dioxide emissions, urban smog, noise, burning lungs and eyes – is, apparently, on its way to the grave after more than a century of yeoman’s work. The auto industry’s e-car push will turbocharge innovation, employment and profits, and everyone from the laid-off factory worker in Michigan to Al Gore will approve.

Today, hydrogen is barely mentioned and e-mobility is all the rage. E-mobility promises zero-emission cars that will drastically reduce carbon footprints and the dependency on imported oil. It will make streets clean and quiet. With their tremendous torque, electric cars can put the thrill back into motoring. They will allow the owner to sneer at his troglodyte, SUV-driving neighbour. They don’t present the infrastructure problems faced by hydrogen cars because electricity grids cover most countries.

So what changed in two years to thrust e-mobility to the forefront? Nothing much, really, which is why the e-mobility rage should be treated with a healthy dose of skepticism. Adjusted for inflation, oil prices are pretty much the same today as they were in 2007. True, last year’s $147 (U.S.) a barrel peak oil price scared the auto industry, and many drivers, into thinking that gasoline and diesel cars would become luxuries. But the price spike also showed that the best cure for high prices is high prices – oil has fallen by half since 2008.

Battery technology has not improved dramatically in two years, nor have battery prices fallen substantially. In other words, no technological or economic breakthrough in the e-mobility industry has been made.

Electric cars are also highly expensive. GM’s Chevy Volt and its European sister, the Opel Ampera, to be introduced as 2011 models, will cost about $40,000 (before tax credits). The California-built Tesla roadster, with Ferrari-like acceleration, is in production and costs more than three times as much. “Who’s going to pay twice as much for no advantage over a regular car?” says Wolfgang Schneider, the vice-president of government, environmental and legal affairs for Ford of Europe.

The Globe and Mail