Is Silicon Valley the new Detroit for electric cars?

SAN JOSE, Calif.--Silicon Valley is sparking a revolution in alternative-fuel autos, but it may take awhile--too long perhaps--to effect change in Detroit, according to a panel of auto executives.

A group of electric and traditional carmakers spoke here Friday at the Joint Venture Silicon Valley conference about innovation, why alternative carmakers are attracted to the Valley, and whether nimble upstarts can overshadow the big Detroit automakers. The consensus was that Silicon Valley is commanding the attention of the auto world, whether it will dominate or not.

"We're not going to take over China or Detroit, but every carmaker has an outpost here and is watching what people are doing," said Felix Kramer, founder of nonprofit plug-in hybrid initiative CalCars. "This can be a real incubation area for new technology in automotive."

To be sure, Silicon Valley is rife with change when it comes to the merger of technology and autos.

Volkswagen, for example, recently funded Stanford University in order to develop a new car lab whose mission is to study "cutting-edge research in safety, comfort, and fun for the consumer driving the car," said Sebastian Thrun, while speaking at an artificial intelligence conference Thursday night. The lab, which will open later this year, will focus on new technologies such as computer-assisted driving--for instance, a car that could park itself. Eventually, self-driving or smart cars could help make driving more efficient and safe, Thrun said.

"When kids can drive themselves to soccer, and do away with the soccer parent, humanity will be better off," Thrun said.

Elon Musk's Tesla Motors, also based in Silicon Valley, is delivering its first production models of an electric two-seater roadster, for a price of nearly $100,000. It eventually plans to sell a four-door electric car for about half the price and then even more affordable models later.

Another Palo Alto upstart called Project Better Place, founded by former SAP executive Shai Agassi, recently announced that it will team with Renault and Nissan car companies, along with the Israeli government, to develop electric cars and electric-battery stations in that nation. It has raised $200 million to produce lithium-ion batteries and the facilities to recharge those batteries--and its cars are expected to be ready by 2011.

Google, based in Mountain View, also recently announced Recharge It, a project to convert hybrids to plug-in hybrids and test vehicle-to-grid technology, in which the vehicle's battery powers the electrical grid. Milpitas-based OEMtek is charging people $12,500 to convert their Toyota Prius into a more efficient car (getting 100 miles per gallon vs. 45 miles per gallon) with a larger battery.

San Dimas-based AC Propulsion, which makes an all-electric Scion eBox for $70,000, is also opening up an office in Palo Alto to service customers here, according to Tom Gage, CEO of AC Propulsion who spoke on the panel. (Gage drives an eBox, an electric car that gets 120 miles on one charge. The company's first customer was actor Tom Hanks.) AC Propulsion also supplies technology to Tesla Motors.

So why is Silicon Valley such a hotbed for alternative cars? It's the customers.

"The driving public here is among the most enlightened in environmental and policy issues," Gage said.

CalCars' Kramer, added to the sentiment: "The plug-in hybrid is the first thing to come here because of popular demand," he said, referring to the movement behind CalCars, Ourpower.org, and Google's plug-in effort. "There's a different customer here in the Valley, and that's why we favor this area."

Backing up his point, 30 percent of the people in the audience said in a poll that they drove a hybrid to the conference.

Byron Shaw, managing director of the Advanced Technology Office at General Motors and who's based here, spoke on the panel about the goals of GM, which is one of the first major car companies to say that it will develop a plug-in hybrid. Shaw said that the company plans to introduce the first rendition of the plug-in Chevy Volt in 2010 along with similar versions for the Saturn. He said that GM will also sell a bevy of alternative-fuel vehicles in the next decade, including electric cars, fuel cell cars, and vehicle-to-grid plug-ins.

"There's an opportunity to bring Silicon Valley and the auto industry together because the two don't always march to the same drum," he said. "We have a wealth of experience of building vehicles, but there are things changing that now, such as the conventional cost of fossil fuels. In the same way Silicon Valley has driven down costs of technology, it may happen with the auto industry, too."

That said, GM is slower than the technology industry, he said, and the company is driven by a fickle consumer. One consideration, for example, is that the battery for a hybrid plug-in must operate well in cold climates like Minnesota as well as warmer places like Phoenix. "The supply base just isn't there for electric vehicles," he said.

AC Propulsion's Gage said that after working in Detroit for eight years, he's seen that car companies can change for the consumer, but it will be especially challenging in the alternative fuel market.

"It's a major transformation for the car companies," he said, "the power train is different; fuel sources are different. We have to start small and build a market base, and it has to appeal to consumers. To come back to this, Silicon Valley is more advanced in this area. Grassroots efforts will continue."

CalCars' Kramer went further with his criticism.

"They're being too slow. It's a major wedge for climate change. They need to learn about versioning--getting cars on the road and seeing what people like," Kramer said.

The panelists finished by predicting how many cars would be electric or plug-in hybrid by 2028. Two of the men, Shaw and Kramer, forecast that it would be 80 percent of cars on the road by then. Gage was more conservative at only 20 percent. The question is: Will that be enough to turn the tide of global warming?