Electric Cars: Emission-Free, Not Problem-Free

Make no mistake. Todd Crook loves his electric Mini E. But like anyone either selling or driving a nascent generation of electric cars, going emission-free isn't as easy as a lot of people think.

Crook, 41, who works for NBC in Burbank, Calif., got his silver Mini E on May 30. Twice since then he has had to take the car back to the dealer for repairs. Once he needed to have the regenerative brakes, which help recharge the battery when the car slows down, in for repair. Later, when he punched the accelerator the car just slipped into neutral so he had to take it in again. But he is not dismayed. "I thought, 'hey, I'm driving a test car,'" he said, "So it's no problem."

The same can be said for just about anyone driving electric cars. So far, the few that are on the market are beloved by their green, tech-savvy owners and lessees. But they are very expensive and there are growing pains, making them a tough proposition for both carmakers and consumers. "They're ahead of the consumer right now," says John A. Casesa, principal of Casesa Shapiro, an industry consulting firm in New York. "You have to believe at some point there will be a breakthrough in batteries. But I think some of these cars will go begging for buyers."

GM Volt Coming in 2010

It will simply take carmakers and the battery and technology companies supplying them years to lower costs and work out some of the kinks. In some cases, there are reliability issues. In other, consumers and local power utilities have to install new hardware so people can charge the cars at home.

But ready or not, a slew of them are coming to market. Nissan is launching its LEAF electric car next year. Mini, which is owned by BMW (BMWG), just leased out 450 of its Mini E on one-year trials. General Motors has its Chevrolet Volt coming next year and Coda says it will have an electric sedan around the same time. Former Aston Martin designer Henrik Fisker also has an electric super car on the way.

Mini used its Euro chic and the allure of clean, green electric power to lure 450 people to lease its electric-powered, two-seat Cooper for $850 a month. But now that the cars are on the road, Mini has found some new challenges.

Recharging Is An Issue

One of the first was making sure that anyone who wants to lease the car has enough power and the proper outlets in their house just to charge he car, says Richard Steinberg, product development manager for Mini USA. "We obviously know how gasoline and diesel cars work," Steinberg says. "But you have a lot of things to do with electric cars."

Not all Mini lessees have enough power in their homes, or the hardware needed to recharge their cars. If someone has a 32-amp, 220-volt system in their home, he can fully charge the car in three to five hours. But a 12-amp, 110-volt system takes 24 hours to charge the car so it can go about 100 miles. And people who live in cities can just about forget it. No one is going to run a cord from an apartment on the ninth floor to their car.

For those people in older homes, they need to upgrade their electrical systems to handle the load when the car is being charged. It can cost them "a couple thousand dollars to upgrade," Steinberg says. Mini has been paying to install the charging system in the garage of Mini lessees. That costs the automaker more than $1,000 in every house.

Range Could Disappoint

Mini has also found that when it's really hot out, the batteries get hot and a warning light comes on. Steinberg says that the car will drive fine, but the company suggests that the driver give the car a break so it doesn't overheat.

Nissan (NSANY) will launch its LEAF electric car in late 2010. The Japanese automaker says the car will go 100 miles on a charge like the electric Mini. But some consumers may be disappointed with the range. Mini is boasting 100 miles of range using a test that measures city driving range.

That could be problematic. Since electric cars recharge the battery off the brakes, they do much better on the highway than in the city, says Daryl Siry, former marketing chief at Tesla who now has an electric-car blog at www.darylsiry.com. If Leaf drivers get less than 100 miles because they're on the highway more often, or because they drive fast, they could be disappointed, he says.

Cost a Concern

If someone drives a car only on the highway, they could get half the range they expect in the city, says James N. Hall, principle of 2953 Analytics. "Electric cars are the most sensitive cars to driver input," Hall says. A Nissan spokesman said that all cars can get lower range of mileage depending on how people drive them, so the company isn't worried.

The biggest issue remains the cost of the cars. Tesla Motors' roadster, which sells for more than $100,000, has been a technological success, but the company lost money on the early models. In a June conference call with the press, Chairman and CEO Elon Musk said the car will start to break even not counting overhead costs. But the technology, especially batteries, for all electric cars will keep them from penetrating the mainstream for years.

So far, their few fans remain undeterred. Despite a few glitches, Crook said he'd get another electric car when his Mini E lease ends in a year. "I'm keeping my fingers crossed that when one year is up, I can get a Nissan Leaf or there will be something new from Mini," he said. "Hopefully, they get the cost down."

Welch is BusinessWeek's Detroit bureau chief.