The Race is On for Electric Car Stardom

The battle for the electric car is headed for a showdown, and when push comes to shove, the major automakers might get shoved if they're not on the cutting edge. Here's The Wall Street Journal today, reporting from the 2008 International Auto Show in Detroit:

Big automakers are rushing to develop their own electric cars, and it would be an embarrassment to them if they are beaten to the market by a start-up. General Motors Corp. has a working prototype of its Concept Chevy Volt and will hype its progress this week. Toyota Motor Corp. will show its plug-in hybrid based on the Prius, while Chrysler LLC will unveil three battery-powered concept cars.

Nothing like the spirit of competition -- and fear of public embarrassment -- to juice innovation on the electric car front.

But head's up Detroit: Silicon Valley’s most successful outfits have been pouring money into electric car startups for years. One of its stars is Fisker Automotive Inc., which will unveil its $80,000 plug-in hybrid luxury car in Detroit today called the Fisker Karma. Fisker says it can begin delivering the car by late 2009 and plans to sell 15,000 a year. Whether Toyota and GM can beat them to the punch is still up in the air.

And Fisker is just one of the many startups with plans (and money) to revolutionize the electric car market. A recent VentureBeat features the 27 companies that it believes are about to take over the road.

So where does this leave the traditional automakers? Well, at least one -- Renault Nissan, the fourth largest automaker in the world -- is seeing opportunity in helping the competition along.

It's putting dollars into the wildly ambitious Project Better Place (PBP), the brain child of the software giant Shai Agassi. PBP plans to sell electric cars made by Renault Nissan. And to support the new electric fleet, PBP wants to build an entirely new "fueling" infrastructure in participating nations that will gradually replace the gas station of yesteryear. To do so will entail developing and implementing a first-of-its-kind, widespread grid of electric charging spots and battery replacement stations.

PBP has already raised over $200 million from venture capitalists to get it going. And its collaboration with Renault Nissan may be a harbinger of things to come in this burgeoning industry, where automakers take advantage of the incredible ingenuity and success of Startup Nation, instead of going head-to-head with it.

In fact, General Motors may be heading in the same direction.

It just announced that it has bought a stake in a venture capitalist-backed biofuels startup called Coskata. The Illinois-based Coskata plans to mass produce cellulosic-based ethanol by 2011 from agricultural waste, old tires, wood, and household garbage cooked at 1,800 degrees. If all goes well, GM will be its first customer -- a ready-to-go fuel source to support its new fleet of flex-fuel cars.

It's the first time that an automaker has put money into the fuel business in the modern era. And it's a good reason to be more optimistic that a shift in the energy economy -- from dirty fuels to clean ones -- is well on its way.

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