In the vast exhibition halls in southern Paris one color dominates: green. From the carpeting and lighting to the artificial lawn trimming and acid-green cocktail dresses worn by countless exhibition assistants, the message is hammered home that the industry has staked its economic future on the green revolution. The transformation has been swift. Only a few years ago automakers sued California and Rhode Island to stop governors from imposing local limits on carbon dioxide emissions, and they have lobbied hard against the European Union's efforts to legislate emission standards from Brussels.
Why the change of heart? Basic economics. Fewer than 1 million cars were sold in the U.S. last month — the lowest monthly figure in 15 years — as car loans and job prospects dried up for many Americans. And in Europe, where nearly half of car purchases are financed, auto executives have told reporters that they are bracing for tough times ahead.
Yet there is one reason drivers might be tempted to spend tens of thousands of dollars on a new car: the urge to go green. Says Matthieu Tenenbaum, deputy director of Renault's electric-car project: "If we continue making polluting cars, some day or other we will stop selling cars."
By far the industry's hottest contest is to develop a mass-market electric vehicle, and the Paris show has 19 of them on display. Most are versions of the same system: well-insulated cars with electric batteries that plug into regular outlets at home or at charging stations on the street, a little like filling the tank. Batteries
would recharge in a few hours (about six hours in the 110-volt U.S. or about half that time in 220-volt Europe) and run for about 100 miles when full. Executives are betting that range will suffice in cities, where people use cars mostly to commute to work and run errands around town. General Motors is testing its electric model, the Chevrolet Volt, in Denmark, and plans to sell between 100,000 and 200,000 Volts a year in the U.S. from 2010; the car would switch to regular fuel once the electricity runs out. Renault will roll out its ZE (for zero emissions) electric car in Europe in 2011, and Tenenbaum estimates that by 2015, auto companies will have sold about 2.5 million electric cars in Europe — about 15% of all vehicles driven on the Continent.
Yet this green dream is hardly problem-free or environmentally perfect. First, if oil prices continue dropping, perhaps to last year's $60-per-bbl. mark, drivers may opt to keep their old cars, especially if the recession in the U.S. and Europe deepens and car loans get even harder to obtain. In debt and facing slumping sales, the auto industry is also competing against flush high-tech companies in Silicon Valley, which are also racing to perfect a lithion-ion car battery. What's more, the billions that the auto companies are spending in research could be squeezed during the recession, especially since it is difficult to estimate how many electric cars they will ultimately sell. "Everybody is wondering what the market will be for electric cars and nobody has the answers," says Erik Morsing, GM's public relations manager in Denmark. "It depends very much on oil prices."
Nor should it be overlooked that electric cars need electricity, and making it isn't necessarily a clean process. Like GM, Nissan has a new electric car, the Nuvu, on display at the Paris show, and like GM, it is rolling it out in Denmark — a country of 5 million people with ample wind power and spare power during night hours, when most drivers are likely to recharge their cars. Renault's ZE is being tested in Israel, where there are plans to install the nation's first battery-charging stations, outside Tel Aviv, by the end of the year. Yet Israel is hardly typical; its 7 million people live in a tiny country with a reliable electricity supply and closed borders — perfect conditions for installing a nationwide network of charging stations.
It's hard to imagine electric cars solving the serious pollution problems in China or in electricity-starved Africa. More than 90% of China's power comes from overstretched coal-burning stations. "You could end up substituting CO2 emissions from a tail pipe with CO2 emissions from a power station," says Morsing. "If you cannot produce alternative energy, the whole idea of electric cars falls apart." In the end, governments will have to decide what is more urgent: cutting imports from the Middle East or cleaning up the planet.
