Just as grid parity is the holy grail for the solar industry, price parity with conventional mass-market vehicles is the holy grail for today’s plug-in car makers. Startups like Fisker Automotive, whose CEO Henrik Fisker spoke on a panel today at the Fortune Brainstorm Green conference in Southern California, as well as General Motors (s GM), are starting out with higher-end vehicles (Fisker with the $87,900 Karma and GM with the $40,000 Chevy Volt) while working to drive down costs, largely through battery technology. The way Fisker sees it, the future of cleaner cars doesn’t have to be expensive — and not just because of the batteries.
Battery packs tend to hog the spotlight when it comes to opportunities for making plug-in cars more affordable. After all, they’re the most expensive part of today’s plug-ins. Fisker, which has pledged to deliver more affordable plug-ins in as little as two years if a Department of Energy loan comes through, said the engine also represents an opportunity to cut costs. “We are putting an engine in this car that is probably more expensive than it needs to be,” he said on the panel. “In the future, they can be simpler because all they need to do is turn the generator.”
How much more expensive? About $3,000. Fisker told me after the panel that at production volumes above 100,000 units, small engines designed specifically for generators in plug-in hybrids could come down to $500 to $700, as compared with up to $4,000 today. Savings on that level wouldn’t make the difference between an $87,900 Karma and a mass-market vehicle, but it represents one more piece of the puzzle (other pieces include inverters and cabling, Fisker said).
Whether or not Fisker will have government help in assembling that puzzle will be decided within “weeks,” Fisker said, although he emphasized that the DOE funding is not in the bank and the company is not counting on it. Still, he said the startup’s concept for a lower-price model is further along than many concept cars at other companies. “We have the business plan all laid out.” They’re just waiting for the green light.