Think Small, City Drivers

Small companies like Think Global, which makes the City car shown here, have fixed their gaze on cities like New York and San Francisco as ideal places to drive their all-electric cars.

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Electric-car development takes many years and costs lots of money. And after all of that, the makers don't offer up much of an automobile.

Take Norway's Think Global AS and its City electric vehicle, for example. The City is a two-seater with a long history: It was developed by Ford in the 1990s, and now, five model generations later, has returned to the United States with the backing of venture investors Kleiner Perkins Caufield & Byers and Rockport Capital. The two venture capital firms have doled out an undisclosed sum to create a joint venture with Think Global, which plans to start selling the car in the United States in 2009.

Think North America dares reprise the General Motors and Toyota efforts of the 1990s, when the companies dabbled in pure electric vehicles. Back then, the cars offered drivers weak batteries and limited driving range. Both carmakers dropped their efforts, took their public relations lumps from environmental groups and today focus on more versatile gas-electric hybrids instead.

Managing director of Kleiner Perkins, Ray Lane, says the City is destined for urban centers like San Francisco and New York — locations with short commutes, and, presumably, tens of thousands of well-heeled environmentalists willing to spend $25,000 for a plastic-bodied two-seater (the company calls it a "2+2" and plans to add a minuscule back seat) that can travel 110 miles on a fully charged battery.

2008 City

With a total length of 10 feet, 6 inches shorter than a Mini Cooper, the City likely won't spur much carpooling, despite its green credentials. And anyone wanting to take a long weekend trip will need either a second car or a rental.

The City's price isn't much lower than that of other future eco-friendly cars, like Chevrolet's $30,000 Volt, which promises 40 miles of electric-only range from a bank of advanced battery cells. But the Volt will also have a small gasoline engine on board to generate electric power beyond its battery's range, making longer road trips possible.

Lane says that by the time cars like the Volt make it to market, presumably by the end of 2010, Think will be ready with its second-generation electric, a high-performance sedan designed by Porsche. "The Think is like the first Sun computer that hit the market. This is new technology," he says.

Chevrolet Volt

That new technology is in the batteries. Think has sold 1,200 cars in Norway that use a sodium-based battery that can power the car to a maximum speed of 65 miles per hour. But Lane says the company is working with two battery companies, Indianapolis' Enerdel and A123 of Watertown, Mass., on lithium ion batteries that will double the car's range and increase its top speed to about 100 miles per hour. A123 is developing similar battery technology for the Volt. Both battery makers still have to prove the safety of their designs.

Think will have to get the car's production volumes up quickly. City owners will pay a monthly "mobility charge," a rental fee on the battery, which Think will own. The fee is more than $300 in Europe; Lane says he expects Think North America to charge half of that in the United States. Pricing will be hard to pin down "until we know what the volumes will be," Lane says. "Once you get past 10,000 batteries, you get real scale."

Think Norway's Oslo assembly plant is planning to build 2,000 of the cars this year. Lane says the company will import 50 Citys to sell to U.S. fleet users this year and will perform final assembly of consumer versions of the car in the United States to help keep costs under control in the face of a strong Euro. Eventually, the company will source components in the United States as well.

Ford spent $150 million developing the City, much of that on safety considerations. The car has earned a four-star crash rating in Europe, equal to that of the Toyota Prius. Ford sold the design in 2003 to Indian investors; those investors, in turn, sold the company to its Norwegian owners, who have poured another $100 million into the project. That brings the total price tag for developing the City to around $300 million.

The challenge of recouping that investment may pale in comparison with the difficulty City's urban owners will face when seeking curbside electric outlets to charge their cars. That's something to think about.