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Electric Car $25000

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The Electric Car Lives

Backed by U.S. venture capital, Norwegian company Think is betting its Ox concept vehicle can prove the electric car's time has finally arrived


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Clean, quiet, and relatively profitable to produce, electric vehicles have had a rough start in the U.S.: Five years after General Motors (GM) nixed its innovative EV1 electric car program, just a handful of automakers have committed to making and selling electric vehicles on a mass scale any time soon.


Enter Think Global, a Norwegian upstart plotting a U.S. invasion via pint-size, affordable electric cars. Think has been selling gas-free, Lilliputian city cars in Europe and will start peddling them to fuel-crunched Americans in 2009. The company's newly formed North American division has high hopes for Think's existing models—and even higher ones for the upcoming Th!nk Ox, a concept unveiled at the Geneva International Motor Show earlier this year.


An electrified people's car for the 21st century, the Ox is a preview of Think's next-generation production vehicle, due out in 2011. Roughly the size of a Toyota (TM) Prius, the Ox can travel between 125 and 155 miles before needing a recharge, and zips from zero to 60 miles per hour in about 8.5 seconds. Its lithium-ion batteries can be charged to 80% capacity in less than an hour, and slender solar panels integrated into the roof power the onboard electronics. Inside, the hatchback includes a bevy of high-tech gizmos such as GPS navigation, a mobile Internet connection, and a key fob that lets drivers customize the car's all-digital dashboard. Pricing has yet to be announced, but the company's current vehicles cost less than $25,000.


Although little-known, Think North America is backed by an undisclosed amount from Silicon Valley venture capital firms RockPort Capital Partners and Kleiner Perkins Caufield & Byers, which famously invested early in companies such as Amazon.com (AMZN) and Google (GOOG). General Electric (GE) made an unrelated $4 million investment in March to support the company's battery research and development operations.


Distinguished Design

Even more than its well-funded sponsors or cutting-edge technology, the Ox's killer app could be its design. To date, most electric cars available in the U.S.—small, unsafe, and underpowered—have been intended strictly for the earliest early adopters and the most faithful green believers. In contrast, Think's senior vice-president for design, Katinka von der Lippe, says the Ox is a "real car, a big step away from the cuteness of [other] electric vehicles." All that distinguishes the Ox from name-brand, fuel-sipping compact cars, in fact, is its silent hum and zero emissions.


The Ox also embodies the characteristic simplicity of Scandinavian design, featuring uncomplicated lines and clean, uncluttered surfaces. A band of unpainted metal stretches from the front of the vehicle to its rear, revealing the Ox's interior architecture, an aluminum frame. An unassuming grille is tucked between sophisticated sloping headlamps. "The Ox is a leap forward for the design of electric cars," says von der Lippe, "and, we think, the product of a mature company."


Still, the American market for electric vehicles "is virtually nonexistent," says John O'Dell, a senior editor specializing in green vehicles for car-buying site Edmunds.com. Even well-established gas-electric hybrids such as the Prius and Honda's (HMC) Civic account for barely 3% of U.S. auto sales. "Until you've got a compelling product, you won't have a market," adds O'Dell. Aside from the sleek Tesla Motors Roadster, which carries a price tag of nearly $100,000, there are almost no fully functional electric vehicles that meet average drivers' requirements. The Ox could fill that gap.


"It'll take a lot of time," Wilber James, RockPort's managing general partner and acting president of Think North America, says of the challenge of selling electric vehicles to American drivers, who still overwhelmingly prefer trucks to thriftier small cars. "We're going to focus at first on niche markets—cities, universities, and fleets."


Innovative Manufacturing

The company's business model, says James, is similar to that of PC maker Dell (DELL), which fueled its rise by ruthlessly optimizing its manufacturing and supply chain. Think's ultralean manufacturing system lets it build production facilities for about $10 million, compared with the billions invested in new plants by old-line manufacturers. That means more factories closer to customers, further cutting costs.


In addition, factories "could also be the retailers," says James, which would add a unique element to Think's branding. The company, he says, will be profitable if it can sell 10,000 vehicles a year. At 20,000 to 30,000 units in annual sales, Think can cut its component costs in half.

That focus on innovative manufacturing, in addition to the high-tech Ox itself, may ultimately set the company apart from previous attempts—and, Think is betting, finally help jump-start the U.S. market for electric cars.


For a look at an alternative approach to electric vehicles aimed at commercial city fleet-cars, see Duracar Delivers with Eco-Trucking (BusinessWeek.com, 6/16/08).

Vella is a writer for BusinessWeek.com in New York .





Norway's Think Global will begin selling its inexpensive, eco-friendly vehicles in the U.S. next year.
By Ken Bensinger, Los Angeles Times Staff Writer

April 22, 2008

Norwegian automaker Think Global said Monday it planned to sell low-priced electric cars to the masses and will introduce its first models in the U.S. by the end of next year.


The battery-powered Think City will be able to travel up to 110 miles on a single charge, with a top speed of about 65 mph, the company said. It will be priced below $25,000.



 Think City vehicle
  • Think City vehicle
Oslo-based Think said venture capital firms RockPort Capital Partners and Kleiner, Perkins, Caufield & Byers had made investments to fund its entry into the U.S. under the auspices of Think North America.


"This is not a toy," said Wilber James, RockPort managing partner. "This is a serious car that we expect to sell."



Think North America is likely to be based in Southern California, the investors said, and the cars it sells here will be assembled locally. The venture investors will own half of Think North America. In March, General Electric Co. invested $4 million in Think Global.



Although technology for electric cars has been advancing -- and consumer interest has been rising amid growing concern over gasoline prices and greenhouse gases -- few vehicles have come to market. Last month, San Carlos, Calif.-based Tesla Motors began production of its Roadster, an electric vehicle that costs $100,000.



The Think City "is a mass-market vehicle," said Kleiner managing partner Ray Lane, dismissing comparisons to the Roadster. Tesla's car is being produced in relatively small numbers, with roughly 300 expected by the end of this year. "Our desire is to be selling 30-40-50,000 of these cars in a couple of years."



Think Chief Executive Jan-Olaf Willums said the company would bring test vehicles to the U.S. in the coming months.



The Think City runs on sodium batteries, but future versions could use lithium ion batteries, Willums said. The company is working with A123 Systems and EnerDel Inc., to develop the batteries, which would boost range and speed.



With most automakers focusing on hybrid technology, only a handful, including Nissan Motor Co. and Mitsubishi Motor Co., have announced plans to produce all-electric cars. Mitsubishi's MiEV is set to go on sale in Japan next year.




The Think City, a two-seater that can be fitted with two additional seats for children, has a mostly plastic exterior and is 95% recyclable. Willums said a convertible was in development. "Women want to buy it immediately," he said.




A Tesla In Your Future?

PayPal's cofounder hopes to produce a practical $30,000 all-electric car in four years.

Fareed Zakaria


Updated: 2:00 PM ET Jul 12, 2008

The electric car has been pronounced dead many times, but Elon Musk is out to resurrect it. The South African-born Musk left home at age 17 for North America and made a fortune when PayPal, a company he cofounded, was sold to eBay in 2002. One of his new companies—he's chairman of three start-ups—is Tesla Motors, a San Carlos, Calif.-based electric-car manufacturer. Its first model, the Tesla Roadster, is a sleek, high-end sports car with an eyepopping price tag. It'll start rolling onto streets this summer. NEWSWEEK's Fareed Zakaria spoke to Musk about the future of transportation in an oil-constrained world.


Zakaria: What's your goal in producing the Tesla Roadster?

Musk: This car itself is not going to change the world—it's a $100,000 sports car being produced in quantities of about 1,800 a year. Where it really becomes meaningful is when we produce the next models, which will be lower-cost and higher-volume. Our second product is a sedan that is about half the price and will be produced in late 2010 in 20,000 units a year.


And your third model will be even cheaper.

Yes. As a rough rule of thumb, when you increase the production quantity by a factor of 10, you can reduce the price by a factor of two. In the early 20th century, cars were initially something for wealthy people. It took quite some time for the cost to be optimized and become accessible to a broader population. It's the same thing here—we'll see the traditional technology learning curve. We're trying to push it as fast as we possibly can, and we think we could either directly or in partnership with a major auto company actually get to a car that is under $30,000 in four years.


Your car runs exclusively on electricity, but GM and Toyota are working on so-called plug-in hybrids, which also feature a gas tank to extend the range. Why didn't you do the same?

We spent a lot of time last year looking at plug-in hybrids and ultimately concluded that it would not be a very good car. You're forced to compromise. Because you need both a gasoline-powered engine and a big battery, neither can be very good, and the engine will be a weak engine. It's just not where the future lies. We'll be able to offer a car with a 305-mile range roughly three years from now.


Most people travel less than 50 miles a day.

And 99 percent of travel is under 200 miles [a day]. There is the occasional road trip, but that's actually pretty rare, and for some people it's never. Our second model will address that rare case in two ways. One is to allow people to switch out the battery pack, so you can go to a battery-change station just like you'd go to a gas station. The second path is to have a high-speed charge. If you have a high-powered onboard charger, you can get an 80 percent charge in 45 minutes. If you're going from L.A. to San Francisco, which is about a 400-mile trip, you can drive 200 miles, stop for lunch, charge your car in the restaurant parking lot, finish lunch and continue the remaining 200 miles to San Francisco.


What is your solution to the problem of needing a large or heavy battery in order to store a lot of energy?

I think what we'll see is an increasing amount of energy being stored in the battery pack and a lowering of the cost of the battery pack over time. It's not the only thing. The efficiency of the electric motor, the efficiency of the powertrain, the rolling resistance are all important.


Why is it so difficult to make a battery that can hold a huge charge for lots of time?

I think engineering is harder than physics, and I'm a physics guy. If you look at the improvement of battery energy density, it tracks to about 8 or 9 percent a year.


Do you think all cars will be electric?

Absolutely. In 30 years, a majority of all new cars produced in the United States, perhaps worldwide, will be electric. And I don't mean hybrid. I mean pure electric.


When you plug into an outlet, you're in effect plugging into coal, because a lot of the electricity produced in the United States is coal-fired. Does that bother you from a global-warming perspective?

I'm very familiar with the "long tailpipe" criticism. I have another company, SolarCity, which is the largest provider of solar power to homes and businesses in California. The solution is to get a SolarCity solar panel on your roof and then have an electric car. It takes actually only a small solar-panel setup—of about 10 by 15 feet—to generate 200 to 400 miles a week of electricity for your car.


A lot of people say solar is really only viable because of massive government subsidies.

That's a very simplistic statement. Solar is viable in certain parts of the country—depending on the local cost of electricity—without subsidies. Subsidies make it economically viable in more places than it would otherwise be. Like almost any industry, there are huge economies of scale. As solar gets bigger and bigger, it gets increasingly economically viable.


If you had a magic wand, what change would you make in America's energy policy?

I would certainly shift any subsidies on hydrocarbons to renewable energy. It's ludicrous to be subsidizing oil and coal and other things that clearly don't have a long-term future and bring great damage to the environment.


Would you like to see a carbon cap-and-trade system in the United States?

I'm actually a bigger fan of a carbon tax, just because it's a simpler thing to do than cap-and-trade.


What you're describing is a pretty optimistic future. You believe that American industry can successfully refashion the transportation sector to run on renewable energy?

I am actually fairly optimistic that we will solve this problem. But there's an important caveat there, which is, we cannot be complacent and just assume it will happen. There needs to be strong government action. There needs to be private investment; there need to be entrepreneurs that attack this problem. We will solve this problem—but only if we do all that.



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