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Silicon Valley becoming driving force for electric vehicles

Companies in the California region are developing not only electric vehicles but also the infrastructure needed to keep them on the road.

June 29, 2010|By Dana Hull

Reporting from San Jose —

A 2006 documentary about General Motors Co.'s ill-fated EV1 famously asked, "Who Killed the Electric Car?"

Silicon Valley is helping to bring it back to life.

Tuesday's scheduled stock market debut for Palo Alto-based Tesla Motors Inc., the first by a U.S. automaker since Ford Motor Co.'s in 1956, is the highest-profile sign of the region's role as a vibrant hub of the growing electric-vehicle industry.

But Silicon Valley is also home to some of the top companies working on the infrastructure needed to keep the cars charged up and on the road, including Better Place of Palo Alto and Coulomb Technologies in Campbell, Calif., which have established early leads in creating battery-swapping stations and public charging networks.

Other companies here are quietly working on creating more powerful batteries for the cars. One is Amprius Inc., a Menlo Park, Calif., start-up that is developing advanced lithium-ion batteries. Google Chief Executive Eric Schmidt is one of its investors.

"Tesla is catalystic," said Chelsea Sexton, an electric-vehicle marketing expert who worked on the EV1. "Venture capitalists have become willing to enter the transport space, beginning with vehicles and now transitioning into components, batteries and energy management systems. Silicon Valley has the potential to be a center of the industry."

Transportation was the leading clean-tech sector for venture capital dollars in the first quarter of 2010, with 24 deals globally that totaled $729 million, according to data from Cleantech Group in San Francisco. Leading the pack was Better Place, which raised $350 million, making it one of the largest clean-tech investments in history.

And even though the industry is still in its infancy, electric car-related companies are adding jobs at a time when unemployment in Silicon Valley is at near-record highs.

Tesla, which intends to manufacture its all-electric Model S sedan at the former GM-Toyota Motor Corp. NUMMI plant in Fremont, Calif., added 132 workers in the first five months of this year and now has 646 full-time employees, most of whom work in manufacturing and powertrain research and development. Once it reaches full production at the NUMMI plant, Tesla expects to produce 20,000 electric vehicles each year and plans to add as many as 1,000 more jobs. Coulomb Technologies has 62 employees and is actively hiring engineers.

The increasing interest in electric vehicles comes amid growing recognition that climate change must be fought, in part, with new technologies. Washington has devoted a great deal of attention to clean tech, and this week the Obama administration voiced support for a bill that would give $6 billion in subsidies to electric vehicles. In addition, Rep. Anna G. Eshoo (D-Menlo Park), whose district spans much of the valley, has co-written a bill to put 700,000 additional electric cars on the road in the next six years.

That is partly because transportation makes up about a third of America's greenhouse gas emissions.

The oil gushing into the Gulf of Mexico is likely to spur even more efforts to wean the United States from its dependency on fossil fuels.

And while Detroit remains the psychological center of the nation's auto industry, California is starting to attract people interested in the next generation of automotive careers.

"Silicon Valley is always first for developing new technology, whether it's chips, computers or cars," said Mary Nickerson, national manager of advanced technology vehicles for Toyota Motor Sales.

Silicon Valley isn't the only region of the country focusing on electric vehicles.

Michigan intends to be a center of electric-vehicle production and has targeted the advanced battery market. Battery companies A123 Systems Inc. and Boston-Power Inc. are both in Massachusetts. Nissan Motor Co. will produce the Leaf at its plant in Tennessee. And Southern California remains home to start-ups such as Coda Automotive in Santa Monica and Fisker Automotive Inc. in Irvine.

Still, there's a growing sense that Silicon Valley is playing an increasingly important role. Hundreds of automotive manufacturers, component suppliers and utility executives will descend on San Jose in late July for "Plug-in 2010," a four-day electric-transportation conference.

Technology forecaster Paul Saffo is bullish on the valley's emergence as an electric-vehicle hub. He notes that Tesla is selling not just a car, but also a bold vision of the future.

"You can be fond of your Prius, but you are not going to burn rubber in it," Saffo said. "Tesla sells excitement. Tesla is very much a technology company, and they are going to keep advancing the art of electric drivetrains. The real promise of the electric car business has just begun."

Hull writes for the San Jose Mercury News/McClatchy.

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