Diamond DA-50 - 600,000$

Recently, there’s been a lot of discussion about the poor financial health of general aviation in North-America. Basically, aviation is now the sole domain of the super-rich and there is no aviation middle class. These days, the price of an airplane is way beyond the mean of the middle class. Airplanes are too expensive (150,000$ to 600,000$ for a new Cessna, Cirrus or Diamond) and pilot license acquisition (15,000$ for a private pilot license with instrument rating) requires multiple years of personal investment.

The industry is pinning its hope on the growth and popularity of a new type of airplane called Light-sport aircraft (LSA). These airplanes are more affordable but limited in takeoff weight (1,320 pounds) and speed (120 knots). They are basically glorified ultralights, with all the limited safety and comfort that one can expect from lesser aircraft. Unfortunately, those that look like real airplanes cost between 150,000$ and 200,000. Still not cheap.

Cheaper Airplanes
Unfortunately, as long as there’s only 600,000 pilot license holders in a nation of 300 million, there’s no way Cessna, Piper, Diamond or Cirrus can charge less than 100,000$ for an airplane. There is simply no economy of scale. Unlike the automotive industry, airplanes have to be made by hand one at a time.

One way to reduce cost would be for manufacturers to move to mold-based composite airplanes and share the facilities amongst themselves. In computers, there’s a concept of  “foundry“: a facility that only manufactures computer chips. Companies like Apple, IBM and nVidia do their designs by computer and send them to the foundry for manufacturing. This way, they only pay for hat they need and this results in lower-cost electronic devices because the design company didn’t have to own its own chip fabrication plant. The same could be done with composite airplanes and would provide a way to uniformly improve build quality.

Cheaper Training
Saving on training cost is a bit more difficult because it has a lot to do with practicing on real airplanes with a real experienced person. The only place we see is in the automation of ground schools using technology.

Luckily we live in a time where it is technologically possible to do most of the training virtually using desktop flight simulators. Glass cockpits are in fact computers and companies like Garmin are wise to provide software for people to train at home. Right now, it is possible to learn very technically difficult subjects such as mathematics, physics and video editing using online videos (see Khan Academy and Lynda.com). If one can learn second derivatives and sparse matrix solving from videos, there’s no reason someone could not learn how to fly too.

Conclusions
These are only two ideas, but GA has to move beyond older guys flying older avgas airplanes. Things started this way because many young people got into airplanes during WWII. We have to find a way to do the same today somehow.

Saab concept car

In the past few weeks we got increasingly dire news regarding Saab‘s cash situation. Saab has recently stopped producing cars after it could no longer pay its suppliers. Victor Muller, Saab’s chairman is approaching anyone with a wallet and a pulse looking for new investment. So far, no investor has came forward and this might spell the end of the storied Swedish automaker.

Fisker Karma

Meanwhile in the same week Fisker, a new automaker that has yet to deliver its first car, announced that it has just raised an additional 100$ million USD investment. This is on top of a 190$ million investment they announced in March 2011. Basically, Fisker is accepting investment, even if it doesn’t need it now. Raise when you can, not when you need it.

Some Detroit journalists cried foul as they see Fisker and Tesla as not as deserving as GM, Ford or Chrysler. For them, this whole EV thing is a fad and they can’t understand why anyone would invest in such risky ventures.

Here’s the great thing about investment: it’s all about the future growth. Nobody invests to maintain the status quo. The fact is that Fisker even with an expensive hybrid car has more growth potential than Saab ever had even if the later can produce more cars. This is the same reason Apple is now worth more than Microsoft: investors are excited about the possibility of future growth, even if Microsoft is still a very profitable business. Future growth means the possibility of a stock going higher in the future, which is what you are looking for as an investor.

Our advice to Saab: stop screwing around with the ICE cars. They are from the past now. Finish your EV conversion and reinvent yourself as a leader in electric transportation. At the very least, this will allow you to get the financing needed for low volume production. It’s better to be a living EV company than a dead ICE one.

Looks like GM took SXSW as an opportunity to get famous bloggers excited about the Chevy Volt. On TWIT 239, we learned that this past weekend, GM had Leo Laporte, Robert Scoble and Guy Kawasaki try the Chevrolet Volt prototype in a closed off parking lot. Leo had the presence of mind to take a picture while Scoble claims to have “burned rubber”.

Laporte’s Twitter report:

The Chevy Volt is very sweet. Glad to see Detroit embracing the electric car.

Scoble’s own tweet:

Getting a tour of Austin in a Chevy. How did I get up this early? The things I do to keep on top of tech.

Scoble who is the proud owner of a 2010 Toyota Prius enjoyed the Volt and was quite positive about its console screen which he compares to an iPod. Before the drive, he took this picture of Guy Kawasaki posing with the car:

Good one GM: many geeks will be buying the Volt and you went straight to their leaders. If GM play their cards right, they could position the Volt as the car for technophiles with an average salary (ave software engineer: 60K-90K) while the Tesla could sell to those with higher income (Jason Calacanis-type founder CEO).

The fact of the matter is that geeks will be the early adopters of electric cars. Most geeks are comfortable with battery-powered technology, trust software systems and are not deterred by right-wing arguments against electric cars.

Over time, the rest of the population will come to adopt EVs like they did with Twitter an Facebook: after the geeks had adopted them.

BTW: Geeks don’t dance, so those GM dance routines are not gonna work on this crowd.

Some people have a hard time believing that the wildly popular Top Gear T.V show is sponsored by the Shell Oil Company. Although the original T.V show itself is produced by the BBC, their highly lucrative roadshows (and other spin-off events) are sponsored by Shell.

To be clear, this is not a conspiracy. Rather it’s a smart business move uniting a global oil company with popular T.V gear heads. International road shows are expensive and they sure can use some help paying the gas bill. Once in a while, they go too far (like the time they faked the Tesla roadster going out of juice), but they simply apologize and move on to the next program. Nobody gets hurt and it’s great entertainment.

Need proof? Here:

• See if you can spot the familiar Shell logo in their road show web page.
• Shell Inks Top Gear Sponsorship Deal
  Quote:
  “Top Gear Live provides the perfect platform to demonstrate the power and performance of the fuel,”
• There’s also the occasional international press release.
• Well known EV advocate Robert Llewellyn had an entertaining rant on the subject last year.

This is genius. Top gear is the best car program in the world and many people have come to respect its host opinions. So when they say that EVs suck, people listen. Plus the Stig rocks.

So there it is: Top Gear UK’s road shows for Europe and Asia are sponsored by Shell Oil Co. We know it. So now just repeat until it sinks in.

Here’s a presentation given by Neil Saiki, president of Zero Motorcycle at the Google complex in May 2009. The video is around an hour long, but it’s well worth the time. As a product development person myself, I find it fascinating to listen to his recounting of the development of their EV motorcycle technology.

Zero-S EV Motorcycle

Saiki’s history is inspiring. After earning a master degree  in aeronautical engineering, he became project manager and chief designer for a human-powered helicopter. Then, he worked on a high-altitude surveillance aircraft with a hundred foot wind span and an emergency stabilizing parachute. The following years found him working at NASA doing pure research and technology studies about transportation alternatives, including fuel cells and electric. During his free time, he would develop rock climbing equipment and high-tech mountain bikes.

Around 16:00, Saiki explains his reasons for going full electric:

Advantages:

• Power/weight potential is incredible.
• Green house gases are a fraction.
• Mechanical reliability.
• Mechanical simplicity. Faster to develop.

Challenges:

• Battery capacity
• Battery safety.

Not surprisingly, the biggest challenge has to do with batteries. Yet, despite all the rationalizing there’s another reason for his career choice: electric motorcycles are a lot of fun. In doing so, he used his bicycle manufacturing experience to help lower cost while increasing efficiency.

Saiki mentions that his ultimate goal is to become “the Ford of electric Motorcycle: bringing affordable electric vehicles to the masses.” Funny, I’ve read the same thing about Tesla’s Elon Musk. Same battle, two plans.

Last month, it was announced that Mitsubishi had agreed to deploy 50 iMievs in Boucherville (Quebec) in collaboration with Hydro-Quebec. This makes a lot of sense. Electricity is dirt cheap up here, so even with the cold climate, EVs would make a lot of sense for municipal and government fleets (hydro trucks, mail delivery, garbage trucks, parking, etc.).

Manic-5 Hydro-Electric Dam

99% of the electricity in Quebec comes from hydro-electricity, which is a renewable resource. In the 70′s and 80′s many young people would go to northern Quebec to work on dams like Manic-5 (shown above). Today, government-owned Hydro-Quebec exports its electricity to the US while keeping very low prices at home. The Montreal subway is 100% electric on runs on tires, which makes it surprisingly silent.

With all this going on, one may wonder why nobody in Quebec has been working on electric cars. Well, someone did, but then something happened and they had to stop. So, what’s the story?

TM4 1991 in-wheel motor

About 20 years ago, Hydro-Quebec had a R&D division named Tech-M4 that came out with an in-wheel motor electric car concept. They had running prototypes and for awhile they were all over the local TV, proudly proclaiming that within a few years, Quebec was to become a global producer of electric cars. The rumor (never been proven) was that they were told by government-owned oil companies to cancel the vehicle-building project. This would make sense since at the time in Canada, the government was part of the oil industry. They owned Petro-Canada, an oil producing “crown corporation” which provided a lot of revenues to the country. Why jeopardize such a cash cow? In August 2009, Petro-Canada was merged with Suncor Energy, a publicly listed independent company.

citroen-c-metisse-concept

In 2006, TM4 provided the wheel motor system of the diesiel hybrid Citroën C-Métisse concept unveiled at the Paris auto show. More recently, they produced the TM4 MΦTIVE power-train system for a Tata Motors demonstration project in Norway.

In their mission statement page, they claim:

Mission

• To become a world leader in electrical drive-trains for the automotive industry.
• To become a leader in the design of permanent magnet generators for the wind turbine industry.

TM4 differentiates itself by providing the highest power density at the lowest price to the automotive industry and the best volumetric power density for wind turbines.

That’s basically the same thing as California’s AC-Propulsion. They don’t want to commercialize vehicles; they just want to provide drive-trains for others to build on. If you ask me, that’s a far cry from what they were promising 20 years ago.

A few weeks back, Kia Motors America unveiled the Ray Plug-in Hybrid concept at the 2010 Chicago Auto Show. It’s only a concept, so there’s very little chance of it being built, but for me, it still has the potential of being a real game changer. Why?

Recently, Kia and Hyundai have reached a position similar to that of Honda and Toyota in the mid-80′s: affordable quality cars with neutral attractive designs. They are no longer the laughable rust buckets of yesteryear. The recent Toyota recall debacle only accelerates this phenomenon.

If Kia can manage to come out with an affordable serial hybrid (EV power-train with a small ICE generator) comparable to the Chevrolet Volt, it will be very difficult for Toyota and Honda to keep their anti-EV stand. Basically, the Japanese will be seen as technologically less advanced as the Koreans. Having visited Japan several times in the past, I can tell you that that the Japanese government will not let this happen.

Japan will do everything in their power to keep their technological lead and make sure that everyone knows who is the leading auto-making nation in Asia. You’ll see.

Most days, being Canadian feels just like being American. I get to watch American T.V, I can drive to a US mall any day, get the same low-low prices and enjoy more or less the same weather as Vermont or Michigan (yeh!).

However, it looks like I won’t be able to get my hot little hands on the Nissan Leaf anytime soon. While more than 50,000 American residents have been able to register their interest on Nissan USA’s web site for a while now, we Canadians are greeted with the following news when visiting Nissan Canada:

Nissan Leaf is Nissan’s first zero-emission electric car, entering select markets in 2010 and launching globally, including Canada, in 2012.

What!? I’ll have wait two years to get the privilege of signing on a waiting list? Back in December 2009, Nissan had announced an agreement with the city of Vancouver, so I was expecting that they would spread the love to other Canadian cities.

Looks like someone will have to move to Vancouver very soon…

He walked out uninjured, but sometime this week, Tesla co-founder and hero to many EV enthusiasts Martin Eberhard, was involved in a low speed car crash while driving home in the rain.

Since many were worried, he posted the following message on the Tesla Motors Club forum:

What happened
No big story really.

I was driving home from work in the rain and the dark, going up highway 84. I was maybe 4th in a line of 5 cars, going about 15 mph. The next thing I knew, my glasses flew off my face and the car spun around and off the road from an impact just behind the drivers door. Luckily I ended up on a driveway.

It turns out that a guy in a 16-year old Wrangler braked going into a turn as he was coming down the hill, and completely lost traction. He crossed the lane right into the side of my car. I actually don’t think he was going very fast – he just had crap tires.

He didn’t have a drivers license, and I guess he wasn’t a legal resident, so he was hauled off in handcuffs.

Despite the damage he did to my car and despite shaking me up quite a bit, I felt really bad seeing him hauled off by the sheriff. He was a nice guy; I think he worked at one of the horse ranches. He had a pocket full of carrots. The whole thing is just really sad for me.

The real hero of the evening was the guy who had been following me. He was following at a good enough distance that I missed him when I spun around backwards. He stopped to help me, let me sit in his car, lent me an umbrella while the sheriff did her duty, provided witness testimony as to my speed and what happened, and ultimately gave me a rider home. Thanks Shawn! The world needs more people like you.
__________________
Martin Eberhard
Tesla Motors Founder

Well, the comprehensive crash tests on the roadster are really paying off…

Gearless is a new web show/podcast currently being developed by Robert Llewellyn for 2010. The show will focus on electric cars and features a brand new Mitsubishi iMiev that Llewellyn will be using for a year as part of the car’s introductory leasing program.

Mitsubishi iMiev

In the video, he mentions that he will be reporting on the upcoming eGrandPrix electric car race in Paris as well as other key EV-related events in the US and Europe.

He is currently fine-tuning the format and presentation of the show. Hopefully, he will get some sponsorship from Mitsubishi and other electric car-makers featured in the show.