Jul 21 - Business Week


Talk to people in the auto industry, and you'll hear lots of reasons why electric cars are years away from practicality. But "those are just excuses," scoffs Tilo Schweers, director of Daimler's (DAI) electric Smart car test project. A fleet of battery-powered Smarts is already in use in London, he points out, and many of the feared drawbacks haven't materialized.

Drivers haven't been left stranded on the streets when their cars run out of juice, he says, nor is the cost out of line. Daimler leases 100 e-Smarts to customers for 400 [$660] a month, which isn't cheap for a two-seat minicar. But owners don't need to pay London's congestion charge, and they save on fuel and maintenance, which brings the cost close to that of a conventional vehicle. Daimler isn't losing money on the deal either, Schweers says -- the leasing payments cover the company's costs even if there is no profit yet.

Schweers, who's obviously enthusiastic about his work, explains this as I steer one of the electric Smarts around pylons set up on an unused airport runway outside Stuttgart. Daimler invited journalists to the rural landing strip on July 20 to try out its growing array of electric, hybrid, and hydrogen-powered vehicles. Many are prototypes, but the Smart I'm driving saw everyday use in London before Daimler shipped it back to Germany. The wear shows in the nicked interior and slightly faded upholstery.

Technology Advances

There are plenty of obstacles to be overcome before the streets are swarming with emissions-free vehicles. And Daimler's top executives sound more cautious than Schweers when they talk about alternatives to the internal combustion engine.

But this well-broken-in Smart suggests that the day when electric cars are commonplace may not be as far away as some skeptics think. "Electric-vehicle technology has made enormous progress," Mercedes R&D chief Thomas Weber told reporters.

For now, Daimler is still putting most of its energy into optimizing internal combustion engines. The company's Mercedes unit is pushing down the fuel consumption of the company's luxury cars with measures such as turbocharged diesel engines, lightweight materials, and tires with lower rolling resistance. Mercedes has also begun offering hybrids, beginning with the top-of-the-line S-Class, which went on sale in June. Weber promises full-size luxury cars with economy-car fuel consumption within a few years.

But more exotic technologies are further along than many people outside Daimler probably realize. The most advanced on view July 20 was the Mercedes BlueZERO E-Cell prototype, a four-seat electric car with lightweight construction and transparent solar cells on the roof. Because it's a one-off experimental car, journalists weren't allowed to drive it. That honor was reserved for R&D chief Weber. "Fascinating, eh?" he exclaimed, as he zoomed around the runway with me in the backseat.

No Performance Trade-Offs

Electric cars don't have to be compacts. Daimler also displayed a hybrid version of its Sprinter commercial vehicle, which in this case was fitted out as a minibus with seven rear seats. The hybrid Sprinter can run solely on battery power, which could be important in coming years as some European cities impose strict emissions limits on center-city traffic.

Mercedes also showed off a modified B-Class midsize four-seater that runs on a hydrogen-powered fuel cell and emits only water. My short test drive on rural roads made it clear that drivers don't have to make any performance or comfort trade-offs with such a car. On the contrary, the fuel cell provides snappy acceleration and is much quieter than a conventional diesel- or gasoline-powered power plant. Daimler managed to squeeze all the drive components underneath the floor, so the car has just as much space as the conventional B-Class. Working in combination with a battery -- a sort of hydrogen hybrid -- a fuel-cell car could have a range of 360 miles [660km], Daimler says.

The problem, of course, is that there aren't yet many places to tank up with hydrogen. And the environmental benefits are largely canceled out by the lack of an economical and environmentally friendly way to produce hydrogen. [Currently most hydrogen is synthesized from natural gas.]

Electric Cars in the City

Emissions-free vehicles that rival conventional autos in range and cost are, in fact, probably years -- even decades -- away. But electric cars for city use could come much sooner. Daimler plans to extend the London test to numerous other cities in Europe as well as the U.S. next year. Daimler hasn't decided which cities will get the e-Smarts, but certainly New York and one of California's major cities will be included. Project manager Schweers says he has been flooded by requests from cities wanting to be included.

The company says the London experience shows that the 60-mile range is plenty for most users. The cars proved most useful for commercial fleet customers, who could deploy the Smarts for shorter urban trips and conventional vehicles for longer voyages. By the same token, the electric cars worked well as a second vehicle for families. Most people charged the cars at home overnight, which also makes sense from an environmental point of view. Power plants tend to be underutilized in the late evening. As with the other emissions-free vehicles, Daimler managed to fit the components under the floor, so there was no loss of luggage space [which was never very ample in the Smart anyway].

The next generation of electric Smarts will have more advanced lithium ion batteries supplied by California's Tesla, in which Daimler earlier this year bought a 10% stake. If all goes well, Daimler will begin selling the electric Smarts commercially in 2012. Initially, the numbers will be relatively small but still significant -- at least 10,000 units. "The age of electric mobility won't take place all of a sudden," R&D chief Weber cautions. Already, though, "performance has reached a new dimension."