A conversation with the founder of the California Cars Initiative.

Felix Kramer: I’m Felix Kramer and I’m the founder of CalCars.org, the California Cars Initiative. 

Question: What major advances is CalCars Initiative making in energy efficiency?

Felix Kramer: Well CalCars has been focusing on first getting plug in hybrids on the map. Most people didn’t ever hear of them. For the people who knew about them they thought it was a science project. This was back in 2002 when we were founded, all the way up to 2005 or 2006 and our goal always was mass production of plug in hybrids, so we started out trying to get the idea out and then around 2004 or 5 we realized we had to really show it, so we converted the… We were the first to convert a hybrid Prius into a plug in hybrid and that took the world by storm and we were able to take that car all over including to Washington D.C. and say this is what we could have with today’s technology. So the first goal of CalCars was to get commercialization, a big word that just means on sale at your dealer of plug in hybrids by major companies. We did conversions, but that was a strategy. The whole point was to get the big carmakers doing this and we won because this next year the Chevy Volt and a number of other cars are coming out that are mass produced plug in hybrids.

The second goal was a little broader and that’s basically the electrification of transportation and that involves the convergence of two giant industries, the power generation industry and the personal transportation industry into one large industry and the reason to do that is because electricity is simply better than gasoline in many ways, especially three. We started popularizing the idea that compared to gasoline electricity was cheaper, cleaner and domestic, so cheaper everybody can understand. Your electric mile is maybe two to four cents a mile. A gasoline mile is anywhere from eight to forty cents a mile and so that’s the cheaper on the personal level. On the larger level, the economics, we basically said before many other people and now lots of people are recognizing it, that the whole auto industry has to go electric and that’s a way to save individual companies and a whole industry as it competes worldwide.

So that’s the cheaper economic. Cleaner is CO2 primarily. Cars have gotten pretty clean in conventional emissions, but in CO2 they are a huge source of greenhouse gases and electricity is far cleaner. Of course everybody immediately then says, “Well what about the grid, the power grid, which has so much coal on it?” And even in a… on a national grid, which is half coal that electric mile is half as much CO2 as a gasoline mile. When you take into account all the emissions from the what’s called well-to-wheel, from the extraction of the fuel all the way to the tailpipe of the car, so you’re better off and in the future as the grid gets cleaner the car gets cleaner. So the car is the only device that as it gets older gets cleaner.

And then finally domestic, there is a lot of talk about energy independence. We’re not going to be energy independent, but we can have much greater energy security and that’s what electricity brings because electricity is a domestic fuel. We don’t import electricity. We use it from sources in the United States, in each country and so we’re not dependent on overseas sources and we can diversify the source from electricity because we can make electricity from almost any other fuel.

So you take all those three things together and you’ve got a fuel that is better in every way and when you combine that then back to the original point of the electrification of transportation then when you bring the power generation industry into it you’re changing not just transportation, you’re changing this other giant, which is the largest greenhouse gas contributor in the world and you’re making it more efficient. You’re saying okay, big power plants don’t have much to do at night and most of them can’t be turned off, so why not charge the cars at night and use them in the day? And then down the road a ways the power facilities are sized for maybe five or ten summer days when it’s hot. And the problem with the power generation industry, the electric power generators is they have to use the power as soon as they make it. They can’t store it anywhere, so if they could store it in millions of cars where the batteries are parked for 20 to 23 hours a day they can draw on that power. They can actually reduce the amount of generation capacity they have, so both things will make this industry more efficient and could reduce the price we pay for electricity every day.

Question: How will a cleaner electric grid make cars cleaner?

Felix Kramer: Well we have in the United States now something called renewable portfolio standards and that means that there are state level requirements for states to clean the grid, to shift from fossil fuels to renewables, whether that’s solar, wind, geothermal and so forth and they require that a certain percentage by a certain date be renewable, so that’s going to happen and we hope that also market forces are going to make it happen. For instance, Google is working on a project they call Renewable is Cheaper than Coal, RE greater than C and the whole idea is for renewable power to be cheaper than fossil fuels. As that happens the grid will get cleaner and so if you actually think about the big picture, you know global warming if you take out some things like farming and construction, agriculture and you just look at the world we live in you say if you could take every device in the world that runs on fossil fuel now and power it by electricity at the same time as you clean the grid and run it by renewables you’re done. You’ve solved the problem of global warming for everyone, every device and it’s conceptually easy. In practice it’s very hard, but Al Gore has been talking for several years now saying if we really wanted to we could clean the grid in ten years. We just have to put in those facilities for the generating facilities and we have to have the power lines to go around the country and other things, all of which are really hard to do, but we could do it if we wanted.

Question: What is the biggest challenge for CalCars in the future?

Felix Kramer: The biggest change for CalCars now that we have declared victory on our first goal is that we’re going back and reinventing ourselves to go… to start all over again with a new challenge that people are as skeptical about as when we first talked about plug in hybrids. We’re saying that we’re going to now finally get new plug in vehicles and they’re going to trickle into the marketplace. It took ten years for hybrids to be 2% of the market. If plug in hybrids come in at a rate ten times faster than that they will still be only 10 or 20% of the fleet of vehicles in 10 or 15 years from now and that’s not fast enough because in terms of global warming and energy security we need to start reducing petroleum demand now. So we can’t really wait for that and that’s a real conundrum and one of the best ways that we’ve been talking about now is what we’re calling the big fix and that involves taking a large number of the gas guzzler vehicles that are already on the road that will last for another 10 or 20 or 30 years and retrofitting them. Just like we fix buildings and change them we can do the same with cars and they can be transformed so that some of their energy is electric or all of it.

They can be plug in hybrids, a partial conversion or all electric for… depending on the range of the vehicle and the use of the vehicle, but if you take a pickup truck, an SUV, a school bus, a transit bus and a van where there is plenty of room for batteries, where the frame is very durable and the vehicle will last for a long time and you take that engine and you add components to it or you replace it we are now showing that there is a business and technology case for doing that and we’re trying to encourage people to jump in and start a whole new global industry to do this.

Question: How expensive will this be compared to buying a new car?

Felix Kramer: The reason there is a business case for gas guzzler conversions is illustrated by what Ali Emadi, professor at Illinois Institute of Technology who started a small company, HEVT.com, what he has done. He has taken the most popular vehicle in America, a Ford F150 pickup truck, which usually gets 15 miles per gallon and you can pick them up used for 5 or $10,000 because they’re… they last a long time and there is a lot of them out there and he has shown that you can take that vehicle and convert it into a plug in hybrid. At that point it will have a 30 mile all electric range and when the battery is depleted it will become a 21 mile per gallon hybrid and Emadi is saying that in large volumes that… the cost of that will be 10 to $15,000, so if you imagine a used F150 for 5 or 10,000 and you convert it for 10 to 15,000 then for under $25,000 you can have the world’s cleanest pickup truck and then if you imagine that that vehicle gets the same tax credit as a Chevy Volt because it’s displacing the same amount of gasoline and has the same social benefits, if you give it a $7,500 tax credit I think you’re in business.

Question: Do we have the tools to make electric cars work on a large scale?

Felix Kramer: Basically there are a lot of people who say we need new inventions, new breakthrough technologies for plug in vehicles to be practical and our position from the start has been they are way better than good enough to get started. Right now the batteries we have and the motors and the electronics we have are able to make great vehicles. It would be great to have better batteries someday as they come in. That’s icing on the cake. Right now there is a good economics case for battery technology and then on the other side every alternative fuel needs a new infrastructure or new scientific breakthrough except t this one. You need new fueling infrastructure for alternative fuels, for bio fuels. You need to create more. For natural gas the same thing, but one of our big… One of our big gimmicks we had when we started CalCars was we walked around with this and we said every alternative fuel vehicle needs a new infrastructure except this plug in car.

This is… connects you to today’s infrastructure. A 120 volt plug can power most cars and when you get to a truck or a big vehicle it’s going to take too long on 120, so you’re going to need the dryer plug in your garage, a 240 and you can do that, but the point is we have the infrastructure now, the fueling infrastructure for cars.

Question: How can business and government work together to allow for this to happen?

Felix Kramer: Well when CalCars was founded and we did our first conversions we put it all into the public domain and we enabled individuals to do their own conversions. At that point it was a strategic goal to get enough plug in hybrids around the country to show what was possible. Since then a small ecosystem of companies has grown up to do conversions of hybrids, of Prius and that’s a market of around a million vehicles perhaps, so those companies are moving ahead. Some of them have gotten all the federal approvals and crash testing and so forth and they have a business opportunity. We think there is a much larger business opportunity for companies to convert some of the 250 million vehicles that are not hybrids, the big gas guzzlers and some of those in the US, 900 million in the world and a lot of companies will do that. Where the federal government comes in and where our local governments come in is in helping us get there quicker, so right now for instance if you buy a new plug in vehicle in the next year or two you’ll get a $7,500 tax credit from the federal government, which will help a lot to bring down the price.

There are other places in the world which have even higher incentives than that and there a places that are using tax policy and so forth because the reason why we have that credit is not simply the practical reason of helping these companies get started and so forth. It’s because the buyer doesn’t get a lot of the social benefits that driving a gas sipper or a plug in hybrid brings. It brings some benefits to the whole society in reducing energy and security and emissions and so forth, so you incentivize the buyer for higher first costs for those vehicles. Now at this point within few years it’s very possible with the… It will be cheaper to actually buy a plug in car than a regular car and it will be a no-brainer at that point. When we get to that point the incentives will be less necessary.

Question: How efficient is the electrical production of energy?

Felix Kramer: Electrical production is pretty efficient when you compare it to a gasoline vehicle. If you look at the conventional emissions for instance it’s much easier to clean one power plant’s smokestack than a million tailpipes. In terms of CO2 emissions the electric motor is about four to five times more efficient than a gasoline engine and so for that mile that you’re driving you’re using a lot less electricity. You’re using a lot less fuel to drive that mile. Now if you take for instance, some people say we should have… be fueling our cars from ethanol. If you power a car by ethanol you’re still using an inefficient gas… If you power a car by ethanol you’re still using an inefficient internal combustion engine vehicle, but if you take that ethanol and put it in a power plant and make electricity out of it and run it into a battery for the car, an electric motor you’re getting twice as efficient a process. So the… basically power plants into car are cleaner than any other way of getting power into cars.

Question: Are there any fears that the lithium used to create so many batteries is an unsustainable resource?

Felix Kramer: Lithium is one of many chemicals used in…. Lithium is one of many… Okay, lithium is one of many materials used in batteries. You can also have nickel, metal hydride and there is other technologies in the future, but right now it looks like the auto industry is settling on lithium. It’s very plentiful. It’s mined in various places. It’s also in sea brine. It’s a benign element. It’s safe for landfills, so it’s not going to poison us when it’s disposed of. In fact though lithium batteries when they’re no longer used for cars can be recycled and reused as secondary use in stationary facilities. You could take those used lithium batteries that maybe are only working at 80% capacity and put them in the basement of office buildings and pump them up at night with cheap power and use it in the day for another decade or two. Eventually then you can extract the lithium and reuse it, so there is… Some people say we don’t have enough lithium, but the carmakers seem very confident we have enough lithium for billions of cars.

Question: What are the advantages of hydrogen fuel cells?

Felix Kramer: Hydrogen for cars has been around the corner or five to ten years away for about twenty or thirty years and it looks like it’s going to continue that way because the hydrogen car no longer is competing against the gasoline car, but against the plug in hybrid and against the flex fuel plug in hybrid, which is maybe all the local driving is electric and the extended range driving is 85% cellulosic ethanol and 15% gasoline, so the…. It gets higher and higher a goal for hydrogen to be better than that. We don’t have a hydrogen infrastructure and hydrogen is not a fuel. It’s an energy storage. It’s a carrier, so you have to get the hydrogen from somewhere and you can get it from two places. You can get it from water and you electrolyze the water and split it into H2 and O and you use… you waste about half the energy to do that or you can get it from natural gas and then you’re starting with a fossil fuel. So in either case you end up with something that is inferior to a battery.

Question: Can cars ever be fully sustainable?

Felix Kramer: When we talk about cars and making cars cleaner, cheaper and so forth we don’t forget about the fact that we also want to reduce the use of cars. Every solution that involves alternative fuels, alternative energy has to start with conservation, using less, so in the United States we’re the only country whose freight is mostly delivered by truck instead of by rail and we can change that. People… Many people own big vehicles because for a week or two a year they need to bring a… tow a boat or something. They can rent the car. I’m really encouraged about the growth or car sharing and that whole idea. Many people don’t need to own two or three cars. They can own one car and the second and third car can be rented. There are a lot of solutions like that and in the long term smart communities and planning growth so that people can walk to work or take public transit to work. We need a much better public transit system than we have, but right now Americans are wedded to their cars and we have a responsibility to make those cars much better.

Question: What will cars look like in the coming years?

Felix Kramer: In the future the cars are going to get a lot more slippery, which is what an engineer would say about aerodynamics, so a lot of cars… a lot more cars are going to look like sports cars and like the Prius, very sloped with a spoiler fin I in the back of some sort and there is a lot of things that can be done to make cars move more easily through the air. At high speeds aerodynamics is everything and weight doesn’t matter at all, so the cars are going to look more streamlined, which is okay.

Question: What major carmaker will be making the first plug-in hybrid?

Felix Kramer: The first vehicles that we’ll see in the next year are the first plug in hybrid by a large carmaker. There is some small ones, but the first large one is going to be General Motors with the Chevy Volt, a four-passenger vehicle that most people estimate will cost in the 30 to $35,000 range after tax credits. At the same time Nissan will probably have the first large company’s large volume production with the Nissan LEAF and that’s a 100 mile range all electric vehicle and if Americans understood now what… how this all works they would realize that anyone who has… any family that has a… If Americans thought about it they would realize that every two car family right now, the second car could be an all electric vehicle.

A 100 mile range vehicle is plenty for everybody to do their local driving and then when they want to go across the country they use their first vehicle, but most people go into a showroom and they say, “Well what if one day I happen to want to use that car to drive 1,000 miles?” “I can’t do it.” “I don’t want the car.” But in fact, they could do that right now, so as the 100 mile range all electric vehicles come in I think we’ll see a change in people’s attitudes and from CalCars perspective who have been promoting plug in hybrids if we turn out to be wrong about our sense that the platform for future development of most cars for the next ten or twenty years is going to be plug in hybrids, that is vehicles that have an electric range that carries you for your local commuting, but the same car can take you across the country because it does have a gasoline engine as well. If we turn out to be wrong and all electric vehicles get there sooner we win even bigger.

Question: Is Silicon Valley the new center of the auto industry?

Felix Kramer: The whole auto industry is changing. It used to be the Detroit three, then it was the American three, now it’s the you know the American two with Chrysler going to Fiat and meanwhile there are a bunch of startups in Indiana and other places and Silicon Valley has emerged as a center for automotive technology as well because cars are becoming more and more electronic and the control systems become more and more important and the battery technology has become more important, so the whole auto industry is going national and actually international because probably within a decade or two most of the cars in the world will be built in China and other countries in Asia, so this is all changing, but the ability to have local manufacturing is actually increasing as a result of this because when you have a car that is more electronic you can build it in many more places.

Question: Do you think America can lead the transition to electric cars?

Felix Kramer: Right now America is in danger of lagging behind other countries in the race to electrify vehicles. Thomas Freedman and others have talked about this at length and they’re saying ET is the new… electric technology and energy technology are the new IT of the next coming decades and other companies are further along than we are… and other countries are further along than we are, so we have some catching up to do, but Detroit remains a real powerhouse, tremendous amount of work on batteries and plug in vehicles is going on in Michigan and in other parts in the Midwest and we think there is still a lot of possibility for the United States to be a leader in plug in vehicles.

Question: Which countries are currently leading in this field?

Felix Kramer: Right now China is showing the signs of becoming the leader in plug vehicle technologies. They’ve got demonstration programs going on in their 13 largest cities and they are moving ahead in batteries. They… A Chinese company BYD became the first company the sell a plug in hybrid in modern times and they’re very aggressive and now recently when President Obama went to China they announced an agreement for a US, China plug in vehicle initiative and that’s a cooperative program between the two countries and we think that there is a lot of possibilities for collaboration on design, on components, on assembly and there is hundreds of millions of vehicles around the world that can be fixed by these two countries and others as well as building new vehicles.

Question: Do you see a change in America’s attitude toward electric cars?

Felix Kramer: People are finally realizing that plug in cars are practical for them. Maybe when the first hybrids came in the carmakers had to say you don’t have to plug this vehicle in and plugging in was bad, but now we’ve come for ten years where we’re all accustomed to plugging in our cell phones and we just do it. It’s not a big deal and now plugging in is good and people are understanding that. When I… I’m the world’s first consumer owner of a plug in hybrid and when I used to drive around and they say my… people saw my car with hundred plus miles per gallon on the side of it they said, “What’s that?” And a few years later they’d say, “Oh, that’s a plug in hybrid.” “How do I get one?” And then a few later, a few years later they said, “Well when are they going to be available in the dealers?” So there has been a progression and surveys recently are showing that half of Americans would like to have these cars.

Question: How can nations unite to battle climate change?

Felix Kramer: I sometimes wonder why the world can’t unite the way you see in movies when you… when there is an asteroid heading toward the earth and we know it’s coming in a few years we all get together somehow or when we’re about to be invaded by some aliens the world cooperates and we have that kind of an asteroid heading toward us. It’s called climate change or global warming or global "weirding," which is what some people talk about, extreme temperatures and the world is changing and we need all to get together on this and we don’t and we don’t declare an end to business as usual. The biggest challenge at this point is for people to realize that the next generation is going to be living in a very different world and if we don’t’ get together and do something about it we will be committing a great crime to our descendants by plundering the world and by not fixing it and we still have time to do that, but the time is running out.

Question: Do you think that the government should focus or prioritize certain R & D projects?

Felix Kramer: For a long time everyone said, “Let’s promote all alternatives.” “Let’s not lose the chance that maybe some good technology will turn out to be much more promising than we thought.” “We can’t afford to pick winners.” But in fact, we’ve been picking winners for years. For centuries the US government has been… We started financing Samuel Morris’ telegraph and ever since then we’ve been pouring money into technologies. Aerospace helped the computer industry grow and radio technology and now a lot of people are starting to realize that it’s time to pick winners. We don’t have the resources to support everything and electricity has emerged as that kind of a solution, which is… which solves many, many problems and exists… and using existing technology. We have to put the pieces together differently. That means we don’t have to wait for breakthroughs. All the breakthroughs are welcome when they happen, but we can get started and go very far with today’s technology, so there seems now finally to be a recognition that this a time to choose one primary route for transportation in particular and that is electrification.

Question: How can we overcome the huge costs of creating sustainable energy is America?

Felix Kramer: It’s a big question when whether we will declare business as usual and if we did we would say it’s time to spend the money to make this transition as rapidly as possible. Some people have estimated it would cost 600 billion dollars to rapidly accelerate the growth of the electrification of transportation. That happens to be the same amount of money we send overseas every year for imported oil, so it sounds like a lot of money, but we’ll be way ahead of the game if we do it and if it involves spending a little more on electricity and if it involves a complicated system where people who need to drive for work are subsidized and where we have maybe a… what’s called a fee based systems where the big heavy vehicles are highly taxed and the more efficient vehicles are less taxed. There are a lot of solutions here, but we have to have the will to do it and to say we can’t be afraid of calling for a gas tax. We can’t be afraid of saying that some things are going to have to change.

Recorded on January 26, 2010