DUSTIN WALSH

Electric vehicles are here, but how do they deal with all the challenges?

Dustin Walsh covers auto suppliers for Crain's Detroit Business; an affiliate of Automotive News.

DETROIT -- The tickertape parades are over and it's time for automakers, suppliers and industry groups to prove electric vehicles have a future.

After an event in 2009 focused on hype, 2010 focused on implementation, now this year's Center for Automotive Research's The Business of Plugging In conference is all about viability.

The conference's opening workshop, "PEVs: Getting Plugged In to the Newest Technology," in suburban Detroit on Tuesday quickly swayed from technology to challenges.

"The key enabler is understanding what the customer wants," said Sherif Marakby, director of electrification programs and engineering for Ford Motor Co. "Saving money is the main reason for the consumer (to buy an electric or plug-in hybrid electric vehicle)."

But range anxiety remains. A survey by Ford revealed that 59 percent of responders were concerned about driving an electric vehicle due to its range limitations. The Nissan Leaf has a range of 73 miles per charge according to the Environmental Protection Agency. The Chevy Volt has a range of 35 miles per charge in full-electric mode, according to the EPA.

Roughly 25 percent don't even understand the differences between hybrids and electric vehicles.

So what needs to happen for widespread integration?

Better range per charge. Consumers don't want a white-knuckle drive to the nearest charging station.

Don Karner, president of San Francisco-based charging station developer Ecotality Inc., said education while range needs to get better, changing the public's perception of charging is key to integration.

"Look at cell phones," he said during a panel discussion. "People had the same anxiety with charging phones…We've all figured out a routine for that. People will develop a routine for charging their EVs as well."

The second major problem to integration is relatively low gas prices.

"Fuel efficiency is the most appealing aspect of EVs to the consumer," Marakby said. "If gas prices go above $5, it will grow this market."

In the Ford survey, 80 percent said they were happy with the fuel economy of their current gas-powered car.

Robert Wyatt, program manager for electric-drivetrain retrofitter Azure Dynamics Inc., said the low fuel costs are trumping the significant upfront investment from buyers.

On Azure's electric-drivetrain Ford Transit Connect commercial van, the return on the investment for the consumer is five to 10 years. Wyatt said customers want a payback to happen by year three.

For every 50-cent increase in gas prices, the payback will be cut back by six months, he said.

Electric cars are also held hostage to the price of lithium-ion battery technology, Wyatt said. Batterymaker executives repeatedly have said the cost of lithium-ion batteries (an average of $10,000 of the cost of the vehcle) will be cut in half by 2013, yet no significant progress has been made on that price reduction.

"Unless we see cost reductions in lithium-ion batteries, the payback will continue to rely on government rebates, gasoline prices and charging station integration," Wyatt said.

So while we continue to push electrification, problems remain. But conferences like The Business of Plugging In are aimed at exploring those challenges. The conference continues through Thursday.

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