Want Electric Cars en Masse? Rethink Warranties

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According to Tom Gage, CEO of AC Propulsion, the "most fertile area for development in this whole space is the battery." Regardless of the size, shape, or chemistry that upcoming generations of batteries take on, however, he noted three potential value streams for the device: transportation; grid services while it's in the car; and secondary markets (after useful life in the vehicle). Part of the challenge, said Gage, is to strike the right balance among these three uses in a way that maximizes "extraction of these value streams over the life of the car."

Brett Williams, a postdoctoral researcher at the University of California's Berkeley Transportation Sustainability Research Center, added that the introduction of a viable "novel ownership structure," which could be "battery leasing in a simple form," could represent the tipping point for electric vehicles in the mass market.

Nissan's Strategy

Leasing the battery pack separately from the vehicle is a route that Nissan once considered for its upcoming LEAF electric sedan (Mark Perry, who heads Nissan's product planning and strategy for North America, will be speaking on our New Networked Car panel at Green:Net.Offering the battery pack under a separate financing agreement could allow an automaker such as Nissan to take a significant chunk out of the sticker price of an electric model, potentially helping it compete with more affordable conventional vehicles.In February the automaker announced it would take the more conservative path of offering the car and battery under a "single transaction."

Electric vehicle infrastructure startup Better Place, meanwhile, plans to buy hundreds of millions of dollars' worth of batteries to "swap" into vehicles owned by subscribers, who in theory will pay Better Place for mileage plans the way cell-phone users pay for minutes.

Hypothetically, at least, if all the players and industries can come together, novel alternatives to consumer ownership of batteries "would really accelerate everything," said Williams. "At a very minimum, you've got to have an ownership structure that lets you see that value throughout the whole product."

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