Tesla Roadster Sport. Image courtesy of Tesla Motors, Inc.

I have to confess, I like cars a lot. I also love mass transit (in particular, the light rail in Denver and fast rail in Europe), but there is something very special about a car such as the Porsche 356 or the Tesla Roadster. As a result, I tend to follow the auto sector somewhat closely and track new design and technologies.

So, for me, I am convinced that 2009 was the year of the electric car even though the numbers of actual cars sold or projected to be sold this year do not appear to support this conclusion.

However, this really was the year where the electric vehicle (EV) and the Plug-in Hybrid Electric Vehicle (PHEV) became accepted in the minds of both the auto industry and consumers. This was the year for breakthrough thinking, technology and investment.

My reasoning is as follows:

1. Detroit—in recent years not noted for innovative thinking—suddenly understood that PHEVs and EVs represent the future;
2. The innovative Tesla not only became profitable but attracted mainstream investment (from Daimler);
3. Innovative business models are emerging, with Better Place taking the lead; and
4. Significant investment is being made in PHEV/EV vehicles as well as battery companies as reflected in Warren Buffet’s investment in China’s BYD.

Coulombs' pole-mounted EV charging station. Photo: Coulomb Technologies

In the United States, several key developments highlight my thesis that this is the year of the EV. The first is that the U.S. auto industry let go of some very old thinking, albeit due to the economic meltdown, and accepted that the PHEV/EV is a market opportunity. This goes well beyond the hype of the Chevy Volt.

The second is that this is the year that Tesla became profitable and received a six-percent investment from Daimler.

Third, Project Better Place, led by Shai Agassi, is rethinking the auto business model and planning the redesign of the auto infrastructure. The vision of Better Place is to provide a network of recharging stations and swappable battery stations. The business model will be to separate the ownership of the battery from the ownership of the car (similar to the separation between cell phone service and phone ownership as a close model). Essentially the concept is to charge for services (battery and electricity) per miles traveled.

This business model is gaining traction. Tesla plans to offer a swappable battery for its S model next year. Israel is building the Better Place infrastructure; Nissan is tooling up swappable batteries for its EVs; Better Place has signed deals with Hawaii, Denmark and Australia; and Tokyo’s largest taxi operator has partnered with Better Place for a new fleet of taxis in Tokyo (about 60,000 vehicles). Better Place also has a “soft” initial order for 35,000 cars in Israel with a rollout in 2011. Better Place has also demonstrated software that directs drivers to the nearest charging station and enables them to monitor the location of available batteries for their vehicles.

Finally, in addition to the United States’ move to EVs, global companies are quickly moving forward with new proposed models and new technologies. Carlos Ghosn, CEO, Renault-Nissan, is committed to producing four EVs within three years and reaching six-figure sales by the middle of the next decade. He plans to produce an EV van, family car and city car by 2011, and a five-seater by 2012. The Renault-Nissan alliance is committed to the Better Place “quickdrop” battery replacement technology in which batteries can be replaced in less than a minute.

2009 was a breakthrough year for EVs and PHEVs. While significant advances are being made in conventional gasoline-powered engines (Ford’s “Ecoboost” technology), EVs and PHEVs are gaining ground and have moved from a technical curiosity to a more mainstream alternative.

Amazing progress in just one year. Wait until next year.