Replacing Detroit: Is California Ready to Build Its Own Advanced Vehicle Industry?

October 15, 2006 – Vol.11 No.30

REPLACING DETROIT: IS CALIFORNIA READY TO BUILD ITS OWN ADVANCED VEHICLE INDUSTRY?

Travelers Insurance says that in 2005 Californians registered 52,619 new hybrids, 22,922 hybrids in Los Angeles alone. Clearly there’s a market in the state for high fuel economy, advanced technology vehicles. With record-breaking gas prices in 2006, this year should show even stronger numbers.

The state’s governor, Arnold Schwarzenegger, who partly because of his stand on global warming seems set for reelection, has promised to reduce the state’s greenhouse gas emissions by 25 percent by 2020. While the law now demands that car manufacturers do their bit by offering reduced greenhouse gas emission vehicles in the state, the car manufacturers are balking, saying only the Fed’s can mandate increases in fuel economy, which the companies incorrectly seem to claim is the only way to cut vehicular greenhouse gas emissions.

As California and a handful of other states are sidestepping Washington and are making plans to cut greenhouse gas emissions, California may also be building its own advanced technology vehicle industry, sidestepping Detroit, as it were. And, if Proposition 87 is voted into law in November, the tax on oil pumped in the state could create a pool of $4 billion to tap into to support the new industry in some fashion.

There already are a number of established advanced vehicle and vehicle component developers in California: ISE Corporation which develops large hybrid trucks, or fast-growing Enova Systems which makes electric drive systems are two examples. There are startup vehicle manufacturers as well. Tesla Motors with its all-electric sports car comes to mind. There are research organizations established: Weststart/CALSTART for example. The list could go on at great length.

The only thing that isn’t happening in California is mass production of advanced technology vehicles. Yet, all the bits and pieces are in the state to build an industry, including the high tech engineering talent available in Silicon Valley. It’s possible that Silicon Valley may evolve into the capital of California’s advanced vehicle industry.

In 2004 the city of San Jose Redevelopment Agency determined that it should take the lead in building an advanced transportation industry after a study showed that it was an emerging industry sector in the United States. Now the City has taken that plan a step further and with a $200,000 grant from the US Economic Development administration has started the planning, development and design process for what will be the San Jose Electronic Transportation Development Center (ETDC).

At the ETDC, Silicon Valley companies will collaborate on design, development, prototype fabrication and commercialization of hybrid commercial vehicles that incorporate Silicon Valley electronics. Over the next nine months the Redevelopment Agency will select companies that will be asked to participate in a pilot project, a demonstration bus.

And about Travelers Insurance? They’re bullish on hybrids and in a handful of states, including California, offer a 10-percent discount to owners of hybrids. (A guess is that hybrid drivers are pretty safe drivers, thus good insurance risks. None of the cars and SUV’s are hot rods, after all.)

Visit Enova Systems at http://www.enovasystems.com/ Ise Corp at http://www.iseresearch.com/ Tesla Motors at http://www.teslamotors.com/ Weststart/CALSTART at http://www.calstart.org/ the San Jose Environmental Business cluster at http://www.environmentalcluster.org/ , Travelers Hybrid site at http://www.hybridtravelers.com/