When automotive entrepreneur Malcolm Bricklin speaks—which is often—his hands flutter and gesticulate wildly, like starving birds pecking at scraps of food. He leans into his words, tapping a foot, pointing to his gray-haired head and then to his muscle-thick chest (just beginning to fold in on itself after 68 years), making a circle, drawing a line, pausing for a moment to rest a hand on the trash can by his chair before launching it again into the air above his head.

Most recently, Bricklin’s gesticulations are borne of the belief that his New York-based company, Visionary Vehicles, will introduce a globally sourced, plug-in hybrid electric vehicle (PHEV) to the US market in 2009. According to Bricklin, the car will achieve fuel efficiency of at least 100 mpg, boast a level of detail to rival Mercedes, and roll into consumer’s driveways for $35,000. Bricklin sees it as a no-compromise automobile that will embarrass the Prius in the areas of mileage, luxury, and desirability. “This 35-mpg garbage is going to be history,” says Bricklin. “If I have the opportunity to change this industry, I’m going to. And I do have the opportunity to change this industry. So I will."

The claim brings Bricklin head-to-head with the world’s biggest automakers as they race to develop a technology many are heralding as the future of motoring. “This is near term and it’s very real,” says David Cole, Chairman of the Center for Automotive Research, a non-profit organization that identifies, researches, and forecasts trends in the car industry. “There’s no question there’s a race to make it happen. The competitive nature of the auto industry is almost unrivaled."

It’s a rivalry that gained momentum and public attention at the 2007 Detroit Auto Show, when General Motors unveiled its PHEV concept, the Volt; in June, the company reassigned 500 engineers to the project, and has pegged the car’s production date to 2010. Nissan has embraced the technology without naming a specific date, Chrysler is testing it in a small fleet of commercial PHEV vans, Ford is working on a pilot program with the Southern California Edison, and Toyota recently announced the development of prototype PHEV’s in Japan, based on the Prius. “The whole industry knows we have to develop alternative propulsion systems,” says John Hansen, Toyota’s National Manager of Communications. “There’s no arguing the fact that this technology looks very promising. Everyone wants to be first."

To grasp the full appeal of the PHEV, it’s critical to understand what it is and isn’t. Unlike the current 700,000 or so hybrid vehicles whizzing along America’s roadways, PHEV’s can be connected to an electrical outlet to charge an onboard battery pack, allowing them to run for dozens of miles on their batteries alone, before a gasoline engine kicks in. Given that 82 percent of Americans commute 40 miles or less per day, such a car (“P40” in industry jargon) would return fuel efficiency of more than 100 mpg, without compromising weekend road-tripping plans.

The technology shows promise, in large part, because the strained US electrical grid is actually underutilized during the off-peak (read: nighttime) hours when most drivers would need to charge their vehicles.

In early August, I met with GM Vice Chairman Bob Lutz in his Troy, Detroit office. At first blush, Lutz seems an unlikely champion of PHEV technology; he is, after all, the man who cooked up the 10-cylinder, 400-horsepower Dodge Viper back in the late 1980s when 400-horsepower was something to brag about; he often flies his de-militarized Czech-built fighter jet to speaking engagements and GM functions; and he’s not the least bit convinced of the cause-and-effect relationship between CO₂ and climate change.

In a circuitous way, it’s exactly these actions and positions that feed Lutz’s desire to build the world’s first mass-market PHEV. “Showing people who hate you that they’re wrong is very powerful motivation itself,” says Lutz, gazing out his office window at a drizzly day before running through the litany of forces that he thinks have unfairly maligned his company as an “environmental anti-Christ” and “ruthless polluters of the planet for monetary gain”: enviro-bloggers, mainstream media and, consequently, much of the general public. “Something like the Volt going into production has to make a lot of that go away."

But Lutz isn’t so bitter that extending his critics a raised finger in the form of a vehicle that can travel 40 miles solely on electricity serves as his primary motivation. He firmly believes that the Volt, which he hopes to sell for less than $30,000, can transform not only General Motors but also our very concept of motoring. “What we’re selling here is 40-miles of fuel-free driving. I’m 100 percent convinced that the day we announce production, we’ll be inundated. I think within ten years we’ll be selling PHEV’s at incredible numbers."

Lutz and Bricklin share this belief, although the former doesn’t view the latter as a formidable competitor. “I view Malcolm’s project with a great deal of skepticism,” says Lutz. “His track record isn’t so hot."

In Lutz’s estimation – indeed, in the estimation of every analyst I spoke with – Toyota is the company most likely to throw a wrench in GM’s plans to become the first carmaker to offer a mass-market PHEV. “Let’s face it: Toyota is a technologically formidable company,” admits Lutz. “I wouldn’t count anybody out, but history dictates that it will be Toyota.” Or, as the Center for Automotive Researcher’s Cole puts it: “[Toyota is] very competent, very coy, and very reserved. The less they’re talking, the more everyone else should worry."

That may be true, but more than one observer believes that Toyota is handicapped by its strong ties with battery-maker Panasonic, of which the company owns a controlling stake, and which is heavily invested in Nickel Metal Hydride and Lithium Nickel Cobalt technologies (all Toyota hybrids utilize Panasonic NiMH batteries). Both are considered largely obsolete for PHEV applications. “This is a huge issue for Toyota,” says Cole. “This is why you’re seeing the next-generation Prius being pushed back."

Still, it’s not only Toyota that needs to clear the battery hurdle. In order to propel a 3000-pound car 40 miles, a PHEV needs to be fitted with a battery that, among other things, is capable of storing at least 8-kilowatt hours of electricity, doesn’t impinge on cargo space, has predictable and controllable thermal properties (remember those exploding laptop batteries?), can’t be penetrated in the event of an accident, and won’t add much to the price of the vehicle. In its starkest terms, the issue boils down to performance, safety, and cost. Carmakers need all three; right now, you can pick any two.

Pretty much everyone agrees that some form of lithium technology will win the day, thanks to its ability to repeatedly drain to low voltages and perform in extreme temperatures. And pretty much everyone agrees that the perfect battery does not yet exist. “Right now, we can deliver performance and safety,” claims Altairnano president Alan Gotcher, whose company produces nano-structured Lithium Titanate batteries. “But cost? That’s definitely still an issue."

None of the battery makers will speculate as to exactly what a production unit might cost, but most observers think it will add approximately $5,000 to the cost of a vehicle.  The question is: who’s going to take that hit? If gas prices stay high, and consumers can realize a timely payback on the battery premium, then it might be a non-issue. But if gas prices plummet, or the batteries prove less reliable than expected, it could prove an un-scalable barrier.

But there may be creative ways to overcome the cost hurdle. “Even when these batteries have reached the end of their lifespan for use in a PHEV, they still have high residual value for other applications,” says Cole. He foresees a leasing arrangement, whereby the batteries are owned by utilities, leased to the vehicle’s owner for perhaps three years, and then retained by the utility to store electricity generated on site. Indeed, Cole confirms that talks between automakers and utilities are ongoing.

Lutz either doesn’t know or won’t say how many Volts GM will build, but one gets the sense that he’ll be embarrassed if it’s not very many. There is what he calls the low volume route, which he defines as 10,000 or less. And then there is the high volume route, which means flirting with six figures. He’s quick to point out that the car is being made to conform to international standards, allowing GM to sell it globally.

For his part, Bricklin expects to build 100,000 to 150,000 PHEVs in the first year of production. That’s an incredulously high number, but he insists the technology is so uncompromised that buyers will flock to showrooms with open checkbooks. “If you want to save the world, you better make it easy for people. Nobody’s going to do it the hard way,” he says.

It is tempting to dismiss Bricklin’s excitement as just another ill-conceived venture. After all, this is the man that brought us Yugo, the breakdown-prone Czechoslovakian sub-compact car that sold for $4,000; created an eponymous, Canadian-built, Bricklin SV-1 sports car (total sold: 2,800), and whose 2004 agreement to import vehicles from Chinese auto giant Chery eroded before a single car was delivered.  “Here we go again,” said Keith Crain, publisher of Automotive News Weekly, when I called to ask about Bricklin. “If you don’t listen to him week to week, you just can’t keep up with him. Malcolm is one of the most delightful, exuberant people I’ve met and he has entrepreneurial spirit without peer. But his vision too often exceeds his grasp."

Still, Bricklin is not without his automotive successes. Most notable is Subaru, which he introduced to the North American market in the late 60s. And although many a Yugo failed its owner, there’s one thing the brand did not fail to do: Make Bricklin a lot of money (according to Bricklin, $2 million a month for 36 months, before he sold the business for $20 million). The fact that Bricklin even got Chery to sign a contract in the first place is a testament to his dogged persistence and refusal to abide by industry norms.

To the casual onlooker, placing a bet on the PHEV race requires the establishment of an internal metric that can somehow calibrate to the unique confluence of factors defining the pursuit. There are the technological hurdles: The battery that doesn’t quite exist, the platform that’s still evolving. There are considerations of intent and ability to deliver results: Is GM truly desirous of a powertrain that takes a very large and real step toward dispensing with over a century of intellectual property in the realm of internal combustion? Can Bricklin and his designer (an affable, portly fellow who is married to a former Playboy Bunny and goes by the unlikely name Herb Grasse) deliver even a single car, much less the quarter million they’re claiming? Does the fact that no one’s done this before improve their chances or worsen them? And finally, just what does Toyota have up its voluminous sleeve?

During one of my conversations with Bricklin, I asked if what he is attempting to pull off isn’t, at the very least, improbable. “You’re 100 percent right it’s improbable,” he says. “If it was probable, I wouldn’t be trying to do it."

In Bricklin’s view, PHEV technology is such a game changer that it will rewrite the very rules of how the auto industry operates, allowing a maverick businessman not just a level playing field to compete with the established big guns, but a very real advantage in responding to emerging technologies. In Bricklin’s view, his eventual alliance of 250 dealers (he claims to have serious interest from 80, though no contracts have been signed) will operate PHEV-only showrooms, where real money—as much as 15 percent of the purchase price—is made on the actual sale of new cars (this is in stark contrast to the current paradigm, whereby dealers make most of their profit on used cars, parts, and service).

In Bricklin’s view, everything he’s done has led him to this swansong venture. “Look. I’ve learned that building a factory is a bitch and building cars every day is a bitch. But designing cars is a joy. And now I’ve got the contacts in China to go to them and say ‘build me this.’ And they don’t have to do a damn thing except do it. It’s the perfect culmination."

See more articles from In Depth

Posted on Mar 24, 2008 at 8:00 AM
Permalink | Comments (3) | TrackBacks (0)