REVOLUTIONARY ROAD: Sidney Goodman, VP of Better Place, reports that the transition to a post-petroleum economy is already under way.

Future Fast

To start the Tesla Roadster, you push a button in the middle of the console. Press D, and the one-speed transmission is engaged. At a standstill, the car is silent. Step on the accelerator, and it makes a high-pitched, rapidly modulating whine. It's a very cool sound—like the sound spaceships make in sci-fi movies.

Slip out onto the road and press hard on the pedal, and the whine modulates very rapidly until the car is emitting a nice, soft scream. At that point, the car is probably doing 80 mph—and not even straining.

The Tesla Roadster is explosively fast. It can go from a cold stop to 60 miles per hour in about the time it took you to read this sentence. It is unlike anything on the road.

As a former mechanic, I have driven some fast cars. I worked for years in a shop that serviced Porsches. We had a customer with a race-tuned Carrera; on several occasions, I drove that Carrera 160 mph. The Tesla would kick that Carrera's ass off the line.

Mike Falcone, a salesman at the dealership in Menlo Park, knows about fast cars, too. His personal car is a 1969 Pontiac GTO with a 400-cubic-inch V-8 and a four-barrel carb. On our test drive, I asked him how the two cars compared. He just laughed.

The stretch of Sand Hill Road that runs from El Camino Real to Highway 280 is 2.6 miles long and has six stoplights. Between each of those stoplights, I took the Tesla straight up to 80 and then, out of prudence, backed off. Each time, it felt remarkable.

I noticed something else I liked about the car—because it uses regenerative braking, the Tesla slows itself down immediately when your foot comes off the accelerator, as the motor draws energy. This is done in the name of efficiency, but as it happens, it makes for a better driving experience. Without the driver stepping on the brake, the car will slow itself to from 80 mph to 3 mph, quickly and smoothly.

At the 280 onramp, things got really fun. The Tesla's front end and suspension are 100 percent Lotus Elise. That means old-school unassisted rack and pinion. Which means you can literally feel the road in your hands—none of that power-steering mush. The heavy battery pack is located in the center of the car, giving the Roadster 60–40 weight distribution—a good thing—and the motor and tranny are located just behind the rear wheels, which causes the vehicle to dig in hard under acceleration. And the thing about explosive acceleration is that it, too, just plain feels good.

On the cloverleaf Sand Hill Road onramp, I couldn't help but let out a shout. Falcone, my co-pilot, said, "All clear," and I jetted out over to the fast lane and hit 100-something in no time at all. By the time I gathered myself enough to look in the rear-view mirror, I saw nothing but empty road, with a bunch of BMWs and big Mercedes in the distance.

"In the Tesla, you end up driving alone a lot," Falcone said. "Nobody can keep up with you."

Feeling a professional obligation to put the car through its paces, I exited at Alpine Road and headed up into Portola Valley. This is the kind of road the Lotus chassis was designed for, and the Tesla loved it, exploding through the gentle curves. But when I checked the rear-view again, I was surprised and then doubly surprised: there was a car just off my back bumper; it was another Tesla.

The driver was grinning and waving through his windshield, and I waved him over. We pulled into a turnout. Matt Devin, on a Sunday drive with his daughter, seemed elated. This, I thought to myself, is the look of a man who owns a highly efficient, ecologically responsible automobile. The look on his face told me that this is the kind of thing that could save the world from the polluting death-grip of the gasoline-powered automotive-petrochemical complex. Assuming an electric car will be brought to market for significantly less than the Roadster's $109,000 price tag.

On the way back down Sand Hill Road, another fortunate event: at a stoplight just west of the Stanford Shopping Mall, I looked to my right, and sitting there was a new Corvette. I honked the horn. The driver, and handsome woman in a golf cap, turned to us with a grin and asked: "What've you got in there?"

"A battery and a little electric motor."

Pointing at the road ahead, I asked the time-honored question: "Wanna run?"

She kept grinning. "Sure."

The light turned green. It was over in a hurry.

The Old New Thing

The Electric Auto Association, a national club, was founded in San Jose in 1967, by a bunch of Lockheed engineers. Today, it is still a going concern, furthering its mission "to encourage experimentation in the building of electric vehicles, particularly to improve energy and resource efficiency, reduce emissions and improve vehicle safety."

For most of the intervening 22 years, the club has served as a clearinghouse for hobbyists and small entrepreneurs who use a variety of kits to convert gasoline-powered vehicles to EVs.

Mike Brown has been at it from the beginning. A longtime Volkswagen mechanic, Brown built his first electric vehicle in 1979: a FiberFab Aztec kit car on a VW Beetle chassis. Then he started experimenting, converting Porsches, other kit cars and, finally, his biggest success—a VW Rabbit he named the "Voltsrabbit." He founded his own company, Electro Automotive, in 1981. In 1989, he and his partner Shari Prange published the book Convert It, which still circulates in electric-car culture.

Since that time, Brown may have been responsible for the production of more electric cars than any other company. By his own estimation, there are something like 2,500 cars on the road today running Electro Automotive conversions.

While his setup is somewhat bulkier and less elegant-looking than the Tesla, or even Simon Saba's Spider, it operates on the same simple principle. A bank of batteries supply power to an series-wound DC motor, which feeds it through a gearbox straight to the drive wheels. Several times a week, working from a little shop in the Santa Cruz Mountain community of Bonny Doon, he ships kits to owners of Rabbits, Porsche 914s or, recently, the Beck's Spider, a cool little reproduction kit-car modeled after a 1965 Porsche.

During that time, many car companies, including the Big Three, have experimented with building EVs from scratch. So far, none have really succeeded. GM's EV1, built from 1996 to 1999, was popular with its small band of owners, but ultimately the company killed the model, recalled all of the cars and crushed them.

Toyota went a different route—more like Brown's—converting its own mini-SUV, the RAV4, to run on an electric motor. In production from 1997 to 2003, the model was discontinued with little fanfare.

While the big companies are still at it—the Chevy Volt for a couple of years now—they were beat to market by entrepreneurs doing essentially what Mike Brown does: Musk's Tesla is essentially a retrofitted Lotus (although much of the car, including the frame and body, has been altered).

On Musk's heels is a legendary coachmaker Henrik Fisker, whose soon-to-be-released Karma is following a third way.

Selling a Dream

When Tom Price learned that Henrik Fisker was getting into electric cars, he took notice. He knew Fisker as one of the world's leading designers of luxury coaches, the man who had designed the BMW Z8 and the Aston Martin DB9, two of the most beautiful cars to hit the road in the past couple of decades.

Price was ideally positioned to win the first Fisker dealership in Northern California, which is set to open in Sunnyvale next year. Price owns Toyota of Sunnyvale, which is the nation's second-biggest Prius dealer, so he has a firsthand knowledge of what "green" can mean to the bottom line. He also owns Marin Luxury Cars in Corte Madera, one of the region's top sellers of Aston Martins.

"The more I learned about the car, and how it was out together," Price says, "the more comfortable I became."

Price is speaking of the Fisker Karma, which is poised to be the first plug-in hybrid luxury sedan to hit the market. Fisker himself designed the car's body. Almost everything else in the vehicle has been subcontracted out to experienced manufacturers. The power train is being built by Quantum, a Southern California–based manufacturer of fuel cells and fuel systems. The interior is being built by Magna Steyr, a Toronto-based global supplier. Almost every component in the car is being built by a similarly well-established company.

In the end, the pieces will be shipped to Finland, where they'll be assembled by Valmet Automotive—the company that assembles the Boxster and Cayman for Porsche. "It's easy to have confidence in the vehicle, knowing all of these vendors," Price says.

Price is equally confident the car will sell.

"When we had it here," Price says, "we showed the car to friends and asked them what they figured the price would be. Most said $200,000." The Karma will retail for $87,500. Subtract out the federal rebate of $7,500 and, the way Price figures it, the car is competitive with the Audi A8, Jaguar XJ and Mercedes-Benz S-Class.

Unlike the Tesla, the Fisker Karma is a hybrid, running a 2.0-liter four-cylinder gasoline engine that generates power for its patented "Q-Drive" electric motor. The combination produces more than 400 total horsepower; the car is tested 0–60 in under six seconds. Not as fast as the Tesla Roadster, but then it seats five. And unlike other hybrids on the road today, the Karma offers a plug-in option. It can travel up to 50 miles before the charging motor kicks in.

Price has driven the car and believes he'll have no trouble convincing some high-end car buyers to give up their big Euro-sedans.

"I don't think you sacrifice anything in terms of agility or power," Price says. "There's a solar panel on the roof, so you don't have a sun roof. But that's probably about it."

Tesla, meanwhile, is also preparing to enter the luxury sedan market, albeit at a significantly lower price point. The Tesla Model S, an equally stunning, nicely appointed five-plus-two-seater, is scheduled to ship in late 2011.

It was Tesla's Elon Musk, in fact, who gave Henrik Fisker the idea that the time of the plug-in automobile has arrived. Musk hired Fisker to design Tesla's first sedan, which at the time was code-named WhiteStar. (After a year or so, Fisker quit and was followed out the door by a lawsuit charging him with theft of proprietary information. Fisker announced plans to start his own company some time later; the lawsuit was decided in his favor.)

The Model S differs from the Karma in a couple of ways. First, the Model S is fully electric. Second, it's priced $20,000 less than the Fisker. After the $7,500 tax break, the Model S will start at $49,900. Not exactly a "Tesla for the rest of us," but the Model S does represent a big step toward the time when electric cars will be commonplace, because it will come equipped with a battery that can be swapped out in five minutes. That would make driving a Model S about as convenient as driving a gas-powered car.

All that remains is to build a vast network of charging spots and battery swap-out stations. And another Silicon Valley company is well on the way toward achieving that ambitious goal.

The Big Idea

At the World Economic Forum in 2005, Klaus Schwab, the founder of the international organization that has gathered business, political and intellectual leaders in Geneva every year since 1971, posed a question: "What's the most important thing you could do to make the world a better place by 2020?"

Shai Agassi, who had been invited to attend the event as one of the inaugural class of Young Global Leaders, was part of a working group assigned to look at climate change. A 37-year-old engineer and entrepreneur, Agassi was on the board of directors of SAP, the German-based software development firm, and had come to be interested in the problem of global warming. Agassi led his team to the conclusion that gasoline-powered cars were the biggest threat to the planet, and—because of their vast numbers—the most difficult problem to solve.

After returning to his job in California, Agassi produced a succinct nine-page white paper on the subject. It contained an argument for building national-scale infrastructures to support mass-adoption of electric cars, and a blueprint for making it happen.

The piece takes as a given that the era of oil is ending, and then sets forth to "project the most probable set of changes in the energy markets and the transformational technologies that exist today, and how they will come together to address this emerging oil shortage."

It calls for large-scale solar energy plants "generating electrons, and sending the energy directly over the electric grid into an electric battery which powers an efficient electric motor." This would be no ordinary electric grid, but an "intelligent Electric Recharge Grid (ERG)" using hardware and software to connect utilities, charging stations and drivers.

Agassi shows that at the time of his writing, the cost of new-generation Lithium Iron Phosphate batteries was starting to drop. He states unequivocally that "the economics have now tipped in favor of electric transportation."

For the first time, he reported, the total cost of energy for electric transportation had crossed under the cost of fossil fuel.

"We will create a sustainable transportation energy solution," the paper says matter-of-factly, "which will go practically forever with no reliance on oil and no emissions."

The "cross-under point" had gone almost unnoticed in the world of automotive design, which was focused on the hybrid-car race. Yet, Agassi concluded, its effect "will change the industry in the most disruptive economic shift ever experienced in history."

The bulk of the white paper is devoted to crunching the numbers to show that this hugely ambitious endeavor would be cost-effective. Breaking out his calculator, he shows in detail that when fuel consumption is factored into the price of car ownership, electric cars would soon be not only the cleanest and most efficient but also the cheapest way to drive.

And he said, this is the tip of the iceberg. Referencing Moore's law, in which Silicon Valley legend Gordon E. Moore correctly predicted chip improvements resulting in a 50 percent reduction in size every 18 months, Agassi predicted the price of renewable generation declining over the years, to the point where large solar installations come down in cost by 50 percent every five years.

Despite the undeniable scope of the undertaking he was proposing, Agassi lays it out simply.

"We propose the creation of a ubiquitous infrastructure that can enable a car to automatically charge up its battery when parked, and on the exceptional long drive using an exchange station where an empty battery is replaced with a full one in automated lanes resembling car-wash devices positioned in gas stations across the country.

"We for the first time look at the car battery as part of the infrastructure system, not part of the car, much like the SIM card inside a cell phone is part of the network infrastructure which is residing inside the phone."

Utopian, but it was being written by an engineer who happened to also be a hard-headed businessman of some genius, as well as a successful entrepreneur—he joined SAP when the software giant purchased his own company, Top Tier. He devotes some effort in his white paper to demonstrating that the idea would make money. A lot of it.

Fuel at the pump represents a market of $1.5 trillion every year. Cars and components add up to roughly the same amount: $1.5 trillion a year. He predicts that clean electricity generation for cars will reach $150 billion a year.

The construction of the grid—the ERG—was projected at $500 billion. Battery manufacturing will reach similar levels of $500 billion a year, accounting for reduction in battery cost as the market size will continue to increase. Carbon credits alone will be worth roughly $300 billion when all cars are driven on clean electricity.

"In the aggregate, we are looking at an annual dislocation reaching roughly $6T a year."

Keep in mind: Agassi was putting this idea together in his spare time, while he was running the 10,000-member engineering team for a big multinational corporation. He seems to have written the paper for the sheer joy of solving a hugely perplexing problem or as an act of global community service.

"The real value of such change," he concludes, "is the massive reduction in greenhouse gas emissions and the long-term implication on our planet.

"Regardless of who wins or loses economically, there is one sure winner—the sustainability of our planet and humanity. If we desire to sustain the planet and our current way of living, we stand in front of a decision that has no alternative, since risking the one planet we have in an uncontrolled experiment is simply not a viable option. The time is now, and the change is already in motion. In the words of Lee Iacocca, 'It's time to lead, follow or get out of the way.'"

The Big Money

Agassi delivered his white paper to the World Economic Forum in 2007—two years after he had begun investigating Klaus Schwab's question.

According to Sidney Goodman, VP of Automotive Alliances for the Palo Alto–based Better Place, Agassi was next in line for the top job at SAP. He was not very interested in starting the company that would build the grid he was envisioning. Ultimately, it was Shimon Perez, the former prime minister of Israel, who convinced him otherwise.

"Shai was hoping to pass the idea along to a government, hoping they would take up the challenge," Goodman reports. And Perez was interested.

He issued Agassi two challenges. One: Get a buy-in from a major car company (known in the biz as an original equipment manufacturer, or OEM). Two: Get the money.

Agassi wasted no time. He brought in Carlos Ghosn, president of the Renault-Nissan alliance, one of the world's top five carmakers.

"His strategy for electrification is in his flag," Goodman says, adding that Renault-Nissan "differs from any other OEM in the market" in its interest in plug-in cars. "They decided quickly that there was a strategy fit—and said, 'Let's do it.'"

In October 2007, Project Better Place was launched. Agassi had also met condition No. 2—he had raised $200 million, from VantagePoint—another big Silicon Valley VC firm—as well as from Israel Corp., Morgan Stanley and a smaller group of private investors. The deal has been called one of the largest and fastest seed rounds in history.

Meanwhile, Perez had taken the idea to Edward Ohlmert, the Israeli prime minister. Strings were pulled, deals were made, and in two years, Better Place will have its infrastructure in place, and Renault will have its fleet of cars ready for delivery.

"We already have metal in the ground," Goodman reports—more than 1,000 charging stations have been put together in several Israeli cities. Later in 2011, the same thing will happen in Denmark. Australia will follow in 2012. And then: California.

In April 2008, Deutsche Bank analysts concluded that the company's approach could be a "paradigm shift" that causes "massive disruption" to the auto industry, and which has "the potential to eliminate the gasoline engine altogether."

The head-spinning speed at which this idea has caught on certainly accounts for the fact that most Americans are practically unaware that such a radical power shift could be in the offing.

There is one curious fact, again from Agassi's white paper, that makes the transition seem almost inevitable—even before the dozens of required solar power plants are built.

Every energy-generating plant and grid system produces excess power capacity, called "active reserve." This is used to guarantee immediate availability of power in demand spikes. The active reserve is usually wasted, as power stations have no ability to store it.

According to Agassi, the active reserve alone could power more than a third of the cars in developed countries. "The smart recharge grid provides a 'distributed storage facility,'" he says. "Taking the concept one step further, the cars and batteries can even feed back electricity to the grid.

Steve Jurvetson offers another piece of evidence that this dream is real. He points to the fact that many of the most talented young engineers, bankers and other professionals are being drawn into the clean-energy sector. He attributes this to something fundamental.

"It just feels good to know you're part of a significant change. For young people just out of college, they get to feel like they're contributing something important to the world. For those of us who have been around a while, for the first time, our kids think we're cool."

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