You don't have to be Elon Musk to imagine an electric car transportation network that connects cities and suburbs and in some cases, even stretches for hundreds of miles. In fact, you don't even have to imagine it—just hit the history books and and you'll get some idea of the electric streetcar system that once existed in an elaborate form in many U.S. towns and cities.
That system long ago passed into oblivion with the rise of the car and the highway system. And there's no shortage of conspiracy theory, mixed with fact, about its demise—the big auto companies and oil monopolies with a grand destruction-by-design plan dismantled electric streetcar networks and streetcars burned as scrap metal.
Fast forward to today's market. In a back-to-the-future scenario, a wave of electric vehicle and smart grid innovation is once again reinventing our nation's transportation system. It's exciting times for auto makers and clean tech ventures driving change in this emerging niche like Musk's 10 year-old Tesla Motors.
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For car enthusiasts who want to change gears—and save on rising fuel costs—the road ahead offers an increasing number of electric car options. Tesla's Model S has become the "Palo Alto Camry of the future" in the words of the company's marketing manager Ted Merendino, while the Honda Prius awes the market with is tiny carbon footprint. That's the good news. The bad news is that the technology is way ahead of the infrastructure curve.
Today, there are only about 13,000 of electric car charging stations in the U.S. with the majority in California, Florida and Texas, according to the ChargePoint, a six-year-old venture company that has raised $80 million to build a smart EV network throughout the country. The roll out is being hampered by the learning curve around production and installation of EV chargers, and the lack of an industry-wide standard, says Zach Pollock, a senior analyst at GTM Research.
To help turbocharge the market, ChargePoint, is taking a unique approach. It plans to launch a no-money-down solar lease model for EV charging stations in hopes it will stimulate adoption. This will allow customers to pay off the cost of their charging equipment over time. The idea comes from the solar financing world where companies like SolarCity, Sunrun and others have built a business in leasing or writing contracts that offer owners low-or no-cost solar panels in exchange for long-term payment contracts.
ChargePoint hasn't yet announced whether its financing program would apply to individual residential installations, or larger-scale commercial installations. It will launch the program in San Francisco, a city that is one of their innovation partners. It is also not clear how the program will create a predictable income stream because of the uncertain number of EV drivers plugging in to charge.That's a statistic no one can forecast.
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Despite the nascent market's challenges, Ryan Popple, partner at Kleiner Perkins Caufield & Byers, and a lead investor in ChargePoint, is optimistic about the industry's prospects. Kleiner Perkins has also made an investment in Proterra, which manufactures heavy duty alternative fuel vehicles and has developed a local charging solution for the municipal transport market.
Popple knows a thing or two about the electric car market and how drivers like to "fill up"—he was previously a senior director of finance at Tesla Motors, and before that, worked for Chevron and Exxon Mobil in energy finance. While he finds it fascinating to watch how his old employer Tesla is tackling the long distance EV travel challenge, he thinks buying an airplane ticket still makes more sense for long-distance travel, and it's more fascinating to watch Tesla as a car manufacturer than charging infrastructure company.
"We don't need to be dragging around 500-mile battery packs. We don't need EVs that go 3,000 to 4,000 miles. I think the sweet spot will be in the 100 to 200 mile range, and the infrastructure in places where we logically take cars. Then it will start feeling convenient," he said.