Carlos Ghosn on Zero Emission Cars


(B) Carlos Ghosn, Chairman and CEO of Renault and Nissan, came to Silicon Valley earlier this year at the Churchill Club to share his views on the future of electric cars. I was really impressed by the vision, the intelligence, the passion, and the energy of Mr. Ghosn. Following are my notes, and below the complete video of his talk on YouTube.

Why Renault Nissan is launching some new electric cars?

Across his interview, Mr. Ghosn gives three major motivations for Renault Nissan to produce electric cars. First, car manufacturers, like any other industry, cannot ignore anymore the effects of climate change. He noted that he should leave to his children the task of marketing Renault Nissan’s electric cars (because his kids are the ones to worry about the life of the Polar Bears not him). Second, car manufacturers must offer vehicles that are not dependent anymore on oil. Electric cars can be powered by multiple sources of energy: nuclear, solar or hydroelectricity. And last (although not said but inferred from the interview), Mr. Ghosn is very competitive; and since the electric car is the product of the future, Mr. Ghosn wants Renault Nissan to lead the industry with that new generation of products.

According to Mr. Ghosn, the first dream of the middle classes in China, Russia, and India is to have a car. Nobody can stop that dream. Car manufacturers must target those huge markets not only with the right models and at the right prices but in a way that is ecologically friendly. Car manufacturers can only sell to those emerging markets with zero-emission cars leveraging today electric technology and tomorrow fuel cell technology.

The battery is the only challenge in designing electric cars!

The future of the electric cars is, first and foremost, in producing the batteries. The largest opportunity in green cars for the venture capital industry is in investing in start-ups designing and producing more efficient batteries. Today, it takes 8 hours to recharge from a house an electric car. An alternative to that is a “fast charger” that recharges a car battery in 30 minutes, and in a few years in 15 minutes or less. Batteries are going to evolve in their sizes, the number of their cells, their geometries, and the chemicals they used. Not only battery technology is going to evolve to reach a lower cost but also to provide to the electric vehicles different ranges. 80% of the people on the planet today drives less than 100 kilometers a day and, in Japan or in the UK, 80% of the population drives less than 50 kilometers a day.

Costs will not slow down the penetration of electric cars!

Costs can be lowered with the right design and manufacturing. As an example, the cost of a fast charger last year was $30,000. This year, it will cost $8,000. Renault Nissan wants to reach a final cost for a fast charger between $1,500 and $2,000.

Mr. Ghosn is investing in manufacturing capacity now and believes that governments should create incentives to encourage car manufacturers to build the right scale to produce electric cars today. Renault Nissan will produce 500,000 electric cars this year (200,000 in the US, 200,000 in Europe and 100,000 in Japan).

What are the future disruptions to the car industry?

The first emerging disruption to the car industry is obviously the introduction of hybrid, electric and fuel cell cars. But be aware of who is talking about, who is investing, who is building manufacturing capacity, what be the car performances, and would that be a show-car or a mass-market car?

The second disruption will attend to make cars very affordable. The middle-classes of China, India, and Brazil want a car for their families and their friends with all the functionality of existing cars at a very affordable price. Developing full functional low priced cars is technically challenging. It requires a new mindset for the development engineers. The car industry started with American and European competitors. Japanese and later Korean manufacturers entered the market with aggressively low priced models and poor quality, but over time improved the quality of their products and started to market high-end models. The same shall be expected from today Indian and Chinese car manufacturers: first very cheap cars with poor quality but over time better quality and higher-end models. If the present US and European car manufacturers cannot compete with low entry priced cars from India and China manufacturers, they are opening the door to future competitions. The way to compete in this changing game is to send western development engineers in China, India and to re-invent the design of cars from cheap parts even from waste.

How the car industry will evolve in the next five to ten years?

Nobody would have ever predicted that the US government would be the major shareholder of General Motors. The wildest scenarios can happen; the car industry is very unpredictable. The growth of the car industry will come from China, India, Brazil, South America and one day Africa.

First, industry consolidation will persist through different “shapes and forms”. Second, the center of the industry is moving from West to East and from North to South. Car manufacturers will have to adapt their value chains accordingly. Third, the car engines of the future will be hybrid, electric and fuel cell. Cars will not move in the same way as they do today. Forth, car manufacturers will have to change what they do and what they outsource. They might integrate some of their suppliers or to create new suppliers. Last, the development of zero-emission cars will be a partnership between the public and private sectors from financing, research, building incentives for capacity, to regulations. Zero emission cars should be a common goal between the public and the private sectors and both sectors need to work together to achieve that goal.

A short technology primer about lower and zero-emission cars

A hybrid electric vehicle such as the Toyota Prius combines a conventional gasoline engine with an electric motor. You fill the hybrid vehicle up with regular gasoline. And, the hybrid augments the normal car engine with a battery-powered motor by connecting a small generator and a rechargeable battery to the braking system of the car. The energy, which is normally discarded as friction heat when braking, is collected by the battery for later reuse in normal driving mode.

A plug-in electric vehicle such as the Nissan Leaf or the Tesla Roadster is powered by a battery alone and must be plugged to be recharged into a conventional 120 volts home outlet or 220 volts outlet that electric clothes dryers use. As an example, the Nissan LEAF has a range of 100 miles per charge under average everyday driving conditions; its battery charges in 4-8 hours on 220 volts home charging unit. At a faster charger station available in service stations or malls, it will charge to 80% in about 26 minutes.

A hydrogen fuel cell electric vehicle such as the Honda Clarity is powered by electricity generated onboard the vehicle. A fuel cell stack converts the hydrogen and oxygen into water, and in the process, produces electricity. The car must be refueled with gaseous hydrogen.

A selection of a few electric and fuel cell cars

Nissan’s Leaf Car 
Nissan Leaf Electric Car from Nissan (available on April 20th, 2010)
Electric Nissan Leaf priced at $33,000 from CNET Green Tech.
Nissan will sell electric car for just over $25K from Yahoo News.

General Motors’ Chevy Volt
The 2011 Volt from Chevrolet (available on December 2010)
First Chevy Volt cars will not be E85 ready from CNET Green Tech.

Telsa Motors
Telsa Motors Roadster Sport (available today)
Telsa Motors CEO: Model S is cheaper than it looks from CNET Green Tech.
Tesla extends Raodster’s lifespan with new lotus deal from GreenBeat.

FCX Clarity Zero-Emission Hydrogen Powered
Honda produces first commercial hydrogen cars from CNET Green Tech.

Electric car start-ups
30 electric cars companies ready to take over the road from GreenBeat.

Stanford electric vehicle showcase
The showcase featured alternative vehicles from Daimler, Honda, Pi Mobility, Tesla, Toyota, VW and AC Propulsion: Stanford University YouTube Channel.

Note: The picture above is the Electric Nissan Leaf.

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Categories: Environment