A couple months after that, boy megastar Justin Bieber got one for his 18th birthday as a present from his manager. The car even had its television debut driven by Ashton Kutcher, playing an internet mogul, on Two and a Half Men.

Fisker’s Project Nina, later called the Atlantic, which was never manufactured.

That summer gas prices were predicted to rise about 40 percent, leading to a boost in sales of fuel-efficient cars. A year earlier, electric-car company Tesla held a blockbuster IPO, and Nissan’s low-cost electric car the LEAF had gone on sale. The country seemed like it might finally be ready for electric cars, and perhaps ready for the first car enthusiast’s plug-in hybrid, as the Fisker Karma was being called.

But the limelight was short-lived for Fisker. In the months and years that followed, the company spiraled downward, burning its dreams and reputation to the ground — just like faulty parts did to a couple of its cars. Fisker has been reported to be on the brink of bankruptcy, lawsuits are piling up, and a government hearing is reportedly in the works.

There are a lot of crash-and-burn stories in Silicon Valley. It’s in the nature of entrepreneurs, startups and investors to take risks and sometimes fail. But it’s not often that you see such a dramatic downfall.

Those that have been tarnished by Fisker’s demise include venture-capital grandaddy Kleiner Perkins; Fisker’s executives, many of whom had long distinguished careers in Detroit; and Fisker’s broker, Advanced Equities, which helped the company raise hundreds of millions of dollars and has now disbanded entirely. Fisker raised and spent more than a billion dollars over its lifetime.

A handful of celebrities and politicians that championed the company have also been caught up in its wreckage, as has the Department of Energy, which ended up loaning the company close to $200 million. The entire electric-vehicle industry could take a hit because of Fisker.

How did this do-gooder dream that was supposed to combine Silicon Valley-backed tech innovation, gorgeous design, and eco-friendly hot-rod cars turn out so horribly wrong for so many people? That’s what I’ve tried to find out in a dozen interviews in recent weeks with people at the center of the Fisker story.

Summer of 2011

It was in that summer of 2011 — even as the company outwardly was showing some signs of hitting its stride —  that I first started to wonder if something wasn’t going awfully wrong at Fisker. Mitt Romney had just announced his presidential run, a federal grand jury had indicted John Edwards, and we were enduring the second hottest summer in the U.S. on record.

I had been following Fisker since its founding four years earlier, and the company was on the cusp of delivering its first electric hybrid sports car, the Karma, to customers. Though the delivery was running 18 months behind schedule, there was a sense of anticipation among the media, investors and car enthusiasts.

Then two things happened that gave me pause. An auto industry executive that I trusted made me an offhand bet that included the idea that Fisker’s second car — then called Project Nina and partly funded by a Department of Energy-approved $529 million loan — might never see the light of day. Fisker had deep pockets, such high-profile investors and so much media hype — I really hadn’t considered something so shocking. Clearly I lost that bet.

The second unsettling event of the ’11 summer was when Fisker invited the media to watch “the delivery” (re-enacted reality TV- show style) of one of the first Karmas to Kleiner Perkins partner Ray Lane. Outside Kleiner’s offices, in the hot parking lot, Lane held up the keys in celebration of the delivery and talked about the joys of driving his Karma as a large group of photographers, reporters and TV crews captured the moment.

Afterwards, I did a long interview with Lane back in the air-conditioned comfort of the Kleiner offices, where he explained to me his counterintuitive thesis for backing Fisker: Either get the valuation high enough so they don’t get crushed on dilution or get low-cost loans that are high leverage for equity investors. “My partners thought I was out of my mind. But I had a thesis,” said Lane.

Kleiner Partner Ray Lane receives the keys for his Fisker Karma, Summer 2011.

The media learned a couple weeks later that the Karma hadn’t received any of the needed regulatory approvals — so the car wasn’t legally driveable on public roads. It wouldn’t get full certification from the EPA until three months later.

The early days

But to understand Fisker’s missteps you have to go back to at least 2006. Fisker’s founder Henrik Fisker was a well-known car designer formerly with BMW and Ford who had his name on hot cars like the Aston Martin DB9 and the BMW Z8 Roadster. In 2004 he started a luxury-car company called Fisker Coachbuild with his long-time buddy Bernhard Koehler, who was later his co-founder at Fisker. In late 2006, Henrik Fisker started working on a contract basis with Tesla, creating designs for Tesla’s second car, a sedan, later called the Model S.

This was also the year that Al Gore’s Inconvenient Truth debuted, and some in the Hollywood elite were starting to embrace hybrid cars and eco causes. Henrik Fisker has told reporters that he was inspired to build Fisker Automotive after seeing DiCaprio drive a Prius to the Oscars and thinking he should have something more high-end. DiCaprio later became an investor and marketing partner to the company.

In 2006 and 2007, cleantech investing was the all the rage among VCs. Research firm the Cleantech Group called 2006 a “watershed period” for cleantech venture investing. VCs put $3.9 billion into global cleantech startups that year, an increase of about 50 percent over 2005. The annual investment numbers grew even more in the following years, but 2006 was a turning point.

Around that time Kleiner Perkins had a plan to bet a third of its fund on cleantech investing. More than a decade ago, Kleiner made a fortune from investments like Google and Amazon, and in the early 2000′s was trying to find the next big thing. Some of the Valley’s most well-known investors like Draper Fisher Jurvetson and VantagePoint Capital Partners were also excited about cleantech back then, and had decided to put millions into Tesla, led by charismatic PayPal co-founder Elon Musk.

At some point at the very end of 2007, Kleiner became Fisker’s early flagship venture backer. Musk told PandoDaily’s Sarah Lacy last year that Kleiner actually tried to invest in Tesla before Fisker, during Tesla’s Series C round, but Musk said that Kleiner wouldn’t let him choose the Kleiner Partner for the board seat. Musk wanted John Doerr, but Kleiner’s transportation guy at the time was Lane, who later joined the board of Fisker. Musk ended up going with VantagePoint, and Kleiner ended up funding Fisker. Clearly Tesla’s VC funding, followed by its IPO in the summer of 2010, were significant motivators for Fisker’s investors.

Tesla’s Roadster, with VC-backing, was first delivered to customers in Feb 2008.

In early 2007, after a chance encounter with the girlfriend of then-Quantum Technologies CEO Alan Niedzwiecki, Henrik Fisker and Niedzwiecki decided to meet for lunch to discuss the possibility of launching an electric car based on the Quantum drivetrain. In late Summer of that year, Fisker Automotive was officially born as a joint venture between Fisker Coachbuild and Quantum.

The idea at the time was ambitious, exciting, and perhaps even a little threatening to potential competitors. A little over a year after Henrik Fisker did design work for Musk’s company, Tesla sued Fisker (Jalopnik called it the world’s most expensive girl fight) for breach of contract and allegedly using the design work to raise funds from venture capitalists and launch a company. The suit went to arbitration, and the arbitrator sided with Fisker.

The heart of Fisker’s business model was in that early deal with Quantum. The idea was to design a gorgeous car, and have suppliers like Quantum provide the technology because off-the-shelf parts from suppliers would help keep costs down.

But there were problems with this strategy: Sometimes, those parts had to be custom-made to fit the design vision, which resulted in higher prices for Fisker. Other times, parts were delivered late or, worse, faulty, but Fisker was locked in to those supplier relationships. Sources close to Fisker have also said that many of the parts were owned by the suppliers themselves, so Fisker didn’t own a lot of the internal technology.

Compare that approach with Tesla‘s strategy: Tesla has invested millions of dollars to amass electric car intellectual property. It can make money selling its core technology to other large auto makers like Toyota and Daimler, and a decent amount of Tesla’s value is in its tech IP.

Toyota’s electric RAV-4 has Tesla tech inside.

Indeed, Fisker’s business model wasn’t the type that funders in the Valley typically like — it’s the polar opposite of the ‘Intel inside’ approach. That so many investors were so eager to back the company has left many in the electric car and tech industries scratching their heads over the years. “It would have only taken a couple a phone calls to industry veterans to have prevented all of this,” says electric car advocate Chelsea Sexton, adding “there’s no excuse for not doing homework. It appears none was done.”

Fast forward to the end of 2012, when Fisker was desperately searching for a lifeline to help it survive, and was bidding itself to Chinese auto giants. Media reports have said, and I’ve heard as well, that the Chinese firms were partly scared off after they took a look under the hood and found that Fisker didn’t own much of its own technology.

Funding an electric car startup from scratch

One of the things Fisker will be most remembered for is the huge amount of capital it tapped into — the at least $1.2 billion it raised and the close to $200 million loan it received from the government.

When Fisker first showed off the Karma at the Detroit Auto Show in January 2008, Kleiner Perkins investors were front and center. Lane told the Wall Street Journal that their early investment in Fisker was more than $10 million and was one of the firm’s bigger investments at the time. Lane also said that the Fisker deal was one of the first in which former Vice President and Kleiner advisor Al Gore provided advice.

But those funds were just the initial drop in the bucket for what Fisker would ask for to grow and produce its cars. In the following years, Fisker raised venture rounds of around $65 million and $86 million. But venture firms couldn’t supply all of the funds for building an electric car, which can cost a billion dollars.

Part of the answer came from the U.S. government. When President Obama took office in 2009, he pledged to support electric cars and low-emission vehicles. His administration used the massive stimulus package to create green jobs and build a so-called clean energy economy. But even before that, a program called the Advanced Technology Vehicles Manufacturing, or ATVM, was created in 2007 and funded by Congress in 2008 and offered loans for companies making vehicles in the U.S. that had better mileage or reduced dependency on foreign oil.

In the summer of 2009, the first wave of ATVM conditional loans were announced, and went to Nissan, Ford and Tesla. Soon after, Fisker itself got approval for a conditional loan of $529 million. Fisker’s goal at that time was to produce 11,000 to 15,000 Karmas per year by September 2011, and 75,000 to 100,000 Project Ninas (later called the Atlantic) in 2012. The DOE ended up only delivering about $200 million of that loan after Fisker didn’t meet milestones for its Karma. Fisker delivered none of its Ninas, later called the Atlantic.

Much of the political reporting that will come out on Fisker, as well as a planned upcoming hearing on April 24, will likely focus on how Fisker got approval from the DOE. Was there cronysim, and did Gore play a role? In the past I’ve looked into rumors suggesting Fisker got the loan because it agreed to build a factory in Vice President Joe Biden’s home state and deliver Delaware green jobs. I’ve never found a direct connection there.

But I would imagine that, as with Solyndra, the DOE and the administration trusted the company’s backers and liked the idea of a beautifully designed, American-made electric car. Fisker fit into their thesis of using public funds to stimulate the clean-energy economy and create green jobs.

Joe Biden speaking at Solyndra’s ground breaking in August 2010

The broker

Getting the conditional loan was a key turning point for Fisker. It gave the company clout and the ability to raise additional funds. Soon after Fisker received the loan agreement, it started working more closely with a broker in Chicago called Advanced Equities.

Over the course of three years, according to my sources, brokers at Advanced Equities raised somewhere between $600 million and $800 million of Fisker’s over $1 billion in funding. The sources say Advanced Equities sold Fisker shares to over a thousand wealthy individuals. These aren’t professional investors that are used to taking on startup risk; they are people who did well in life and wanted to invest in the tech-driven dream of a sleek electric car.

One of those investors was DiCaprio, and numerous sources close to the company have told me that Kleiner Perkins partners Doerr and Lane put millions of dollars of their own money into Fisker. Another person that Fisker listed as a Director on a funding filing in late 2011 was Timothy Shriver. In a recorded internal sales call with Advanced Equity brokers from early 2010 that we’ve obtained, Advanced Equities co-founders tell their brokers that the Fisker opportunity is such a good one that they should bring the deal to their best customers.

Of course, many of the investors through Advanced Equities weren’t household names in San Francisco or Los Angeles. Chicago’s prepaid college saving’s fund, the Illinois Student Assistance Commission, invested $10 million. An investor named Daniel Wray invested $210,000, and later sued the company and its broker.

Fisker’s venture backers commonly pitched in to help Advanced Equities. Sources tell me that it wasn’t unusual for investment calls with Advanced Equities and potential investors to feature Kleiner’s Lane, as well as NEA’s Scott Sandell, sharing Fisker’s vision.

If you asked venture capitalists in the Valley around that time what they thought about Advanced Equities, a common response was that it didn’t have a very good reputation — “snake oil salesmen” was the term often used. I’ve long wondered why Kleiner and NEA would actively work with a broker that had a weak reputation. Advanced Equities brokers, for their part, made millions of dollars in sales commissions from these deals.

It wasn’t until December 2011 and into 2012 that the more dubious efforts of Advanced Equities became clearer to Fisker’s hundreds of investors. The last few hundred million dollars of Advanced Equities’ fund raising for Fisker, starting with the D-1 round, was what brokers call “pay to play.” As Fisker was running into technical, delivery and political problems, its valuation was quickly declining. But the company still needed more money, so the brokers went back to its current investors and said: Unless you give this more, your current shares will be diluted and your preferred stock will be converted to common stock.

It was essentially a gun to their heads. This is why investor Wray sued Fisker in February 2012, alleging he was on the receiving end of this tactic. In his lawsuit, he says Advanced Equities sent him a letter dated Jan. 18, 2012, stating that he needed to decide if he wanted to invest in Fisker’s next round, and pay around $84,000 by Jan. 27, 2012 — a little over a week from receiving the letter. He also says that Advanced Equities assured him that he would have anti-dilution protection. According to the audio clip from Advanced Equities’ internal sales call in early 2010, Advanced Equity leaders say that the Fisker deal will “suffer no dilution,” and was “a dream scenario.”

That dream would soon end. In September 2012 after Fisker closed on $1.2 billion in funding, the bulk of it organized by Advanced Equities, the SEC charged the broker with misleading investors when it raised money for another company back in 2009 and 2010 (Bloom Energy). Advanced settled, agreeing to pay $1 million, and its co-founders were personally fined. Two months later Advanced Equities closed up shop.

The public problems start

In the summer of 2011, Fisker cars finally start rolling off the production line — Lane got one of the first, and so did DiCaprio, Gore and other luminaries. By October, Fisker said about 40 Karmas had been shipped to the U.S. from the factory in Finland, and before the year was out, at least 200 people had Karmas.

But this was still a lower number than expected — delayed regulatory approval was part of the problem. As a result of the delays, Fisker’s battery supplier, A123 Systems, had to lower its yearly revenue guidance.

Ray Lane’s Fisker Karma, Summer 2011

At the end of the year, a dark cloud appeared over Fisker’s celebrity parade. In December, 239 Fiskers were recalled because of a faulty battery hose clamp. The news was alarming, but Tesla had faced the same type of recalls in its early days, and so customers and the media were somewhat forgiving.

Then another red flag: As the ball dropped on 2011, I noticed that Fisker was quietly raising more money using Advanced Equities. That seemed unusual because the company was now delivering its cars, meaning it could bring in revenue, and it had already raised so much. It would take another month for me to figure out why.

Fisker in February 2012 confirmed media reports that its DOE loan had been frozen after $192 million because it hadn’t hit the milestones with its Karma. The last payment Fisker had received was all the way back in May 2011. Many of Fisker’s investors are now wondering why the DOE wasn’t more vocal about the frozen loan when it happened back then, as they had continued to fund the company based on the assumption that the DOE loan was still moving forward.

Regardless, the confirmation of the frozen loan kicked off one of the worst years — both self-inflicted and just plain bad luck — for a startup I have ever seen.

Founder Henrik Fisker stepped down as CEO, and he was replaced by an auto executive from Chrysler. Six months later that executive was replaced by a third CEO, who previously worked on the Volt at GM. Fisker stopped work on its second car and laid off all the workers in its Delaware factory. (When this story was published, the DOE still has a note on its ATVM page saying Fisker created 2,000 permanent jobs in Wilmington, Del.)

In the spring of 2012, Consumer Reports bought a Karma, and when it broke down after less than 200 miles, the magazine understandably gave it one of the worst reviews in automotive history. One of the problems with the Consumer Reports’ test car involved the battery. But the battery issue turned out to be much more widespread that just the review car, and Fisker’s battery supplier decided to replace faulty battery cells to the tune of $55 million.

Later that year, A123 Systems itself went bankrupt, causing more problems for Fisker. Fisker claimed that A123 Systems owed it $140 million, but a bankruptcy settlement reduced that to a paltry $15 million. Chinese giant Wanxiang wound up buying A123 Systems; adding insult to injury for Fisker, sources have told me that Wanxiang also looked at, but seems to have passed on investing in or buying the electric car company.

That summer, Fisker also recalled a cooling fan after it caused a slow-burning fire in a Karma in Woodside, Calif. Watch the disturbing video of a fireman putting out the flames. In hindsight, Fisker is lucky no one was killed while driving its vehicles.

Then there was the just plain terrible luck for the ironically named Karma: Super Storm Sandy wiped out 338 of its Karmas in storage in New Jersey. The cars first drowned, and then caught on fire — salt water damage caused a short circuit that was spread to other cars by high winds, Fisker said at the time.

With all of this happening in public — and in a presidential election year — Fisker’s struggles became highly politicized. The company was mentioned numerous times in presidential debates and speeches leading up to the election. Republican nominee Romney called Fisker and other DOE-supported companies losers.

Where did all the money go?

Fisker had a phenomenal amount of funding in its coffers — so where did all the money go? It’s no doubt expensive to launch a car company, but the way Fisker spent the money didn’t seem to create much lasting value.

The company didn’t seem to invest substantially in technology innovation or tech IP, and seemed to spend a disproportionate amount on suppliers. For example, numerous sources have told me that the company paid upfront for 15,000 of some of the parts for its planned 15,000 Karmas. It ended up only selling around 2,000 of the cars. I’ve also heard that Fisker paid some funds upfront to have BMW make engines for the 100,000 Nina cars it hoped to produce — in the end, Fisker didn’t deliver a single Nina.

Costs to build each Karma also creeped up because the company missed its volume targets, and because engineering had to change designs around supplier constraints. No wonder the company ended up adding $20,000 to its initial sale price.

Expensive hires may also have sucked away chunks of Fisker’s funding: Sources I’ve talked to say that Fisker filled the upper levels of the company with seasoned auto executives from Detroit. At the high point of Fisker, the company had around 300 employees, plus dozens of contract staff. Bringing in a certain amount of the old guard could help a car startup ramp up quickly, and also impress potential investors with “industry names.” But those people are also used to big auto-industry budgets that included extensive travel and salaries — that’s the opposite life of a tech startup.

The end

The bottom line for Fisker: It sucked down over a billion dollars and delivered around 2,000 cars to customers that now have few places to turn if those cars have mechanical problems.

At Kleiner Perkins, the dust is still settling. Reuters reported earlier this year that Kleiner partner Doerr apologized to his limited partners (groups that put money into VC funds) for a weak fund performance and promised to do better in the future. Lane has transitioned away from bringing in new investments for Kleiner’s future fund. Spooked by bad deals, venture firms across the board pulled back on cleantech investing by a third in 2012.

There are political repercussions, too. The DOE was on the hot seat when Solyndra went bankrupt, and now will be equally under scrutiny over Fisker. The ATVM program has essentially been frozen, and the DOE says that despite the fact that it has $16.6 billion remaining in the fund and seven applications pending, it will not award any more loans.

The worst part of the Fisker story could be the fallout for electric cars. Helping reduce America’s dependence on foreign oil and lowering the carbon emissions of personal transportation is necessary. Introducing more electric cars is one way to do that. But with the industry in such a fragile, nascent stage, Fisker could wind up delivering the knock-out blow.

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That’s likely due to a combination of California’s strong state incentives for electric cars, the state’s population of tech early adopters, the area’s environmental leanings, and its population that in areas like the Bay Area have considerable disposable income. And because the population of California is the most receptive to electric cars, the car manufacturers are also concentrating on the state first and foremost, launching cars in California and opening up dealerships in California first.

Tesla Roadsters lined up outside of the Model S Beta Customer event

California also has its own electric car startups, too, including Tesla Motors, Fisker Automotive, and Coda Automotive.

Other states that also have populations interested in electric cars, include New York, Florida, Texas, and Washington.

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While seeing an actual vehicle you can touch or sit in would be ideal, I like what Nissan worked out with Microsoft. The two partnered to create an interactive, virtual reality experience using 3-D graphics of the new Pathfinder combined with voie and gesture-based controls. For example, you can “reach out” and open the door to the Pathfinder by simulating the gesture in front of a Kinect sensor. Walk towards the Kinect and you “enter” the vehicle where you can look around inside. See how it works here:

Someday we’ll likely to use a holodeck such as envisioned in the Star Trek: TNG series where we’re surrounded by interactive sensors and holograms as if they we were somewhere else. For now, however, Kinect is showing a glimpse of that future with a virtual car shopping experience. Besides, I’d give up on the holodeck idea if we could use the Kinect to accelerate or completely remove the car price haggling experience!

Interested in the 2013 Pathfinder experience with Kinect? Nissan will be rolling out the Pathfinder Kinect Experience to 16 dealerships in 13 states, so keep an eye out in your local area.

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The first Model S customer is driven off

Tesla Motors needs to make a profit and is counting on the Model S to get it there. The electric car company began shipping the sedan in late June and the hoopla surrounding the rollout has boosted the Model S reservations to about 12,200 now, compared with roughly 11,500 by the end of June.

“We obviously don’t have a demand problem. One of the biggest reasons people don’t put down a reservation payment for Model S is you have to wait a year, and if you need a car you need a car,” said CEO Elon Musk, during a conference call with analysts to discuss the company’s second-quarter earnings.

Tesla expects to ship a total of 5,000 Model S in 2012, but the big delivery push won’t happen until the fourth quarter. The company plans to ship roughly 500 of the car in the third quarter and the rest before the year ends. In 2013, Tesla plans to ship 20,000 of the Model S.

Analysts questioned whether Tesla could ramp up so quickly and do it without glitches, given the short period of time it will have to accomplish it. Musk said it’s not unusual for a new car to have a low production rate at the start. Plus, the company continues to trouble-shoot problems. It already has had to change one supplier and replace an interior trim that looked good in a sample but not so swell when it showed up inside a car, he added.

Musk offered assurances of the company’s production ramp up by saying that he expects the annual production rate of Model S to reach over 20,000 by the end of 2012.

“At the end of next year, there is a pretty good likelihood that we will be at the 30,000 per year runrate,” he added.

Tesla is building some kind of “super charger” station, a project Musk had hinted previously, and on Wednesday he suggested that the company will unveil it in September, depending on whether Tesla could finish the construction and secure all permits. The station is supposed to add 150 miles of charge to Tesla cars in 30 minutes. He remained mum with the details of the project but promised a showstopper.

“I’m really excited about the announcement. It’s way cooler than anyone realizes,” Musk said. “I’ll have a profound effect on how the public sees electric vehicles. There will be a few surprises.”

Here are the details about Tesla’s financial results:

Revenues: $26.65 million, down from $58.17 million from the second quarter of 2011.

Losses: $105.6 million, or $1 per share, compared with $58.9 million, or $0.60 per share, in losses from the year-ago period.

Model S: Ship 5,000 of the Model S during 2012. About 500 of them will be delivered to customers during the third quarter and the rest in the fourth quarter. The company was rolling off the assembly lines five cars per week back in June, and it has since “approximately doubled” that pace.

Roadster: 89 Roadsters were sold during the second quarter. Another 130-140 Roadsters are left and should be sold by the end of 2012.

Guidance: Tesla expects to generate $560 million to $600 million in revenues for 2012. In 2013, the company expects to ship at least 20,000 Model S and achieves a gross margin that will “exceed 25 percent,” Musk said.

Powertrain project: Tesla announced a powertrain development program for Mercedes-Benz earlier this year, and it began to record revenues from the project during the second quarter. Asked how Tesla’s powertrain compares with competitors’, Musk said, “I think Nissan should double down on their electric vehicle investments to improve their product; it’s not where it needs to be.”

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So what can a mobile professional expect in the new cab? There’s whopping 10-inch more leg room in the NV 200 than in a Ford Crown Victoria, which is helped by the fully flat floor. That should make it easy to work a laptop or tablet, even if you want to stretch out or cross your legs. Your mobile office will smell fresh and clean thanks to air-filtration — with a grape phenol-coated air filter – and cooling system controlled by the passenger. The fabric seats are made with an antimicrobial vinyl resin so workspace germs need not apply.

Perhaps the best functions — from a productivity standpoint, that is — are those to keep mobile device batteries topped off. Nissan included 12-volt electric outlets and a pair of USB ports to recharge phones, tablets and other portables.

The only problem I see with the new cabs is the transparent roof. Sure, you’ll get a nice view of New York’s architecture and sky, but that won’t help those looking down at their mobile device screen. We’ll have to get Ryan Kim, our mobile man in the Big Apple to get a test drive in one of these to check it out!

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Despite tepid sales of electric cars, NRG Energy’s electric vehicle charging network project eVgo is rolling out chargers in public places like malls in Houston and Dallas. The company is getting in early, snapping up agreements to place its chargers at key points of visibility, good security and high traffic. NRG is betting that if it builds it, they will come, and with direct current fast chargers that can charge an electric vehicle in as little as 15 minutes, what’s not to like?

Members only

The proprietary subscription pricing model is what’s not to like. EVgo is selling access to the charging stations on a cellphone model where for a 3-year contract at $89 a month, customers get free installation of a home charger as well as access to all of the public chargers with electricity included at eVgo network stations (for $49 a month, you just get the home charger).

The problem with this charging network is that using it is proprietary. You can’t even access an eVgo charging station if you don’t have a subscription. And if you do have a subscription, you are extremely reliant on there being an eVgo charger where you need it. Because after plonking down your $89 a month, who wants to pay more money when you find yourself in a location where you need a charge and the only charger available isn’t an eVgo charger.

The issue of proprietary charging networks isn’t unique to eVgo and it represents a future customer experience problem for the electric vehicle industry. While other charging networks like Ecotality’s Blink and Coulomb’s ChargePoint may not employ strict subscription models, they penalize customers for not carrying company specific RFID cards that switch on their network chargers. Imagine needing the gas card of every gas station you go to get the best deal or the best service.

If you don’t have their company specific RFID cards, Ecotality’s Blink Network allows payments with “Blink codes” that can be obtained from a mobile device at double the price of using a Blink member card. And Coulomb’s ChargePoint requires drivers to call a number and provide their credit card over the phone if they don’t have a ChargePoint card (you can use contactless credit cards, which few people have, to pay at the station). The inconvenience aside, consider having to call a service late at night in a dimly lit parking lot and provide one’s credit card number in order to charge one’s car. Talk about the kind of user experience that would have Steve Jobs rolling in his grave.

A coming problem for the automakers

I spoke with the founder of EV Charging Pros, John Kalb, who has worked with numerous retail and commercial establishments throughout Northern California on public charger installations. “The charging networks believe the RFID cards allow them to control the customer experience but it’s not creating a customer experience that allows the market to grow,” he said. Right now the automakers have early adopters and enthusiasts for customers who don’t necessarily mind carrying different EV charging cards, but as Kalb noted to me in a previous conversation, what happens when you’re Nissan and you want to sell 400,000 electric vehicles.

What’s on the horizon is the potential for automakers to be in conflict with charging network operators in a way that they never were with gas station owners. The charging operators want proprietary systems because they want to optimize their relationship with their customer so that they can allow interesting payment schemes like letting mall owners offer discounted charging to people who frequent the mall. But this vision comes at the expense of the wider market need, which is about making it as easy as possible for EV drivers to access a charge.

Defenders of the current system point out that early adopters don’t mind the charging systems being deployed, and I

NRG Energy's eVgo Network at a Best Buy

suspect that eVgo’s all you can charge plans have a great appeal for car owners who want to pay one fee for all their energy use. But electric vehicles won’t exist in 5 years if the auto industry can’t move beyond early adopters and offer a convenient charging network. Chevy Volt and Nissan Leaf sales have been disappointing, and EVs are getting caught up in the current politicization of cleantech, which led GM CEO Dan Ackerson to note in The New York Times last week that GM “did not engineer the Volt to be a political punching bag.”

The interesting thing about electric vehicle charging is that it actually has the potential to make everyone’s life more convenient. We’re accustomed to having to take a trip to the gas station to fill up, but what if we could charge our cars while shopping or being at work. Any retail, government or commercial entity with some parking real estate can offer charging. It’s a lot cheaper to install an electric car charger than to put in a gasoline pumping station, and if level 3 direct current charging specs are ever resolved, charging one’s car will be a 20 minute affair.

It’s already slow going with EV adoption. Let’s not make this any more complicated.

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