The main contender is battery power, but many obstacles stand in the way of its universal acceptance: it needs an infrastructure of its own - and is it as green as it seems? Meanwhile, as continental Europe plays catch-up, the UK risks missing out on the action altogether, despite the PM's vows to put Britain in the high-voltage vanguard. John McLaren reports.
Gordon Brown is such a tease. The phrase 'an end to boom and bust' had a terrific ring to it, and we took it seriously - sort of - until it dawned on us that he was kidding. The joker in him surfaced again more recently when he declared, straight-faced, that by 2020, all cars sold in Britain would be electric or hybrid, and that the UK would be at the forefront of the development of these new technologies.
Our car people did smile, if a little wistfully, because they know that our chances of being anywhere near that forefront are ... zero. That race may not be over yet, but the leading pack developing the batteries, electric motors, grid-management systems etc are already way down the track, while we're still rattling our can to buy a pair of spikes.
Our automotive companies, though, didn't see merit in pointing this out. Car plants round the world may be cranking up again, but only a few months ago there was a desperate clamour everywhere for emergency aid. This put politicians in a terrible bind. If they didn't help and hundreds of thousands of workers got fired, they risked annihilation at the ballot box. But if they did help, how could they dodge the pressure to help other troubled industries too? So they came up with a brilliant wheeze - call it saving the planet and make aid conditional on the money being spent developing low-carbon cars. Car companies acquiesced, not necessarily insincerely but like a drunk promising a passing old lady that he'll spend her £1 on a nice cup of tea. And so, in a crescendo of oratory and on a wing and prayer, a green motoring revolution was hailed.
If the imminence of the revolution is real, the pain of adjustment may be worth it. At a stroke, we reduce global warming and depletion of fossil fuels, and turn the tables on those pesky oil producers. But if the revolution runs as punctually as the average British train, governments and some car-makers could be shooting themselves in the foot.
Last year, world sales of hybrid and electric passenger cars accounted for less than 1% of the total. The reasons were clear: most hybrids are pricey, dull to drive, have fuel economy only marginally better than some diesels, and on a cradle-to-grave basis harm the environment more than conventional cars. As for pure electric vehicles (EVs), those that plug into the mains and have no internal combustion engine on board to charge their batteries and provide extra oomph, just 179 such passenger cars were sold in the UK in 2008.
Why are the sales figures so low? Punters took one look at the midget offerings available - cars such as the G-Wiz, GEM e2 and Aixam Mega City - and ran a mile. They probably feared that the crumple zones of these odd-looking cars consisted of empty fag packets lashed together, and that their anti-skid control comprised an array of rabbit's feet and Hail Marys. In other words, car buyers might buy more plug-in EVs, but only if they look, feel and perform like a proper car and are manufactured by a company they've heard of.
Well, such 'proper' EVs are coming. Most loudly touted is next year's Chevy Volt, but by early August, GM was conceding that this car may not be commercially viable. The car triggering most excitement is Nissan's Leaf, not least because - as the motoring cognoscenti know - Nissans are real drivers' cars (eg, their fire-breathing GT-R). A Nissan EV should be a green car that even petrolheads can get excited about.
The enthusiasm of Nissan's highly regarded head of sales and marketing in Europe, Simon Thomas, is palpable. 'We have a proprietary type of laminated lithium ion battery that generates twice the power, has half the weight, and solves stability issues entirely. This will be a full five-seater, quiet, comfortable, and fun to drive.' Thomas believes that in a few years, EVs will sell in their millions - but also that there are more than minor obstacles to be overcome on the way.
'We need governments to commit to a programme of education, infrastructure-provision and long-term incentives, such as purchase subsidies and exemption from congestion or road-use taxes. We have already signed memorandums of understanding with over a dozen.'
But for all the positive noises emanating from both industry and governments, substantial technical hurdles remain, not least of them the problems of battery cost, durability and disposal. In the meantime, Nissan is developing a plan whereby customers lease the cars, or buy the cars but lease the batteries.
Thomas recognises that this may be an easier sell in the US, where almost everyone leases cars, than in Europe, where more of us buy. The same applies to overnight charging, since, unlike our American cousins, not every urban Brit has a garage. Even when home charging isn't a problem, the range of the vehicles can be - especially for long-distance driving, where users will have to stop every 100 miles for a charge. And re-charging batteries will take a lot longer than topping up your petrol tank.
As an alternative, it may be possible to set up EV service points where batteries can be swap-ped in minutes. This is something Nissan is trying to figure out in collaboration with electric vehicle services provider Better Place.
Other ingrained habits may have to change too, explains another leading player on the automotive scene, Richard Parry-Jones. The former group VP and chief technical officer at Ford, Parry-Jones is now head of RP Consulting, an independent technology consulting firm, and a professor at Loughborough University. 'We've got used to incredibly versatile cars which, whether they are Range Rovers or Fiat 500s, are capable of taking us in comfort either to the local Tesco or to Bologna. But many of these capabilities are redundant. Although acceleration will remain important to customers, very few outside Germany need high maximum speeds. Cars in future will be more mission-specific,' he predicts.
Parry-Jones and Thomas would agree that, in the early days, at least, EVs will be bought mainly by households that have access to two or more cars. For long-distance work, such buyers will use something else. In this new world, cars that are all-rounders may become the market minority.
All revolutions throw up early winners and losers, and the Marie- Antoinettes here will be some traditional suppliers, as many of the parts associated with conventional cars and their conventional drivetrains will no longer be needed. Demand for a range of ancillary components - petrol and diesel engines themselves, of course, plus gearboxes, engine management systems and catalytic convertors - will decline.
The Robespierres look like being previously obscure electronics and power-storage companies - firms that have not so far supplied the car industry but demand for whose expertise will rise dramatically. Most are to be found in the US and Asia. In the US, a host of non-household names such as AC Propulsion, Aker Wade, Better Place, Coulomb Technologies, Kokam America and UQM Technologies are set to become more widely known; in Asia, the big players are BYD and Lishen of China, Korea's LG, and Japanese combinations such as Matsushita/Sanyo (working with Toyota) and NEC (with Nissan). Europe is trailing this pack, though there are bright spots like France's SVE, Italy's Micro-Vett (which makes an electric version of the chic Fiat 500), Switzerland's Brusa and Germany's Magnet-Motor. Traditional motor industry electronics suppliers Bosch and Siemens are also trying hard to catch up.
Many of these countries and companies plan to spray-paint their programmes with money. The US government has earmarked $25bn for the Efficient Car Program, plus a further $2bn for an advanced battery consortium. At small-company level, Kokam America - manufacturer of high-tech lithium polymer batteries - has just pocketed $600m from Dow Chemical and is thought to be in line for up to $1bn in national and regional funding. Spending in Japan could run to tens of billions, and the Chinese are also raiding the national piggy-bank big time.
There's a big risk that the UK will miss out on most of the action. Nearly all parent companies of our 'transplants' - local assembly operations of major manufacturers - will do their key R&D back home, and even assembly of EVs is unlikely to come here for years. Nissan, however, has announced that one of its two new European battery plants will be in the UK, at its Sunderland site, but this is small beer.
Indian-owned Jaguar Land Rover is too small to be a leader in this big boys' game, and the same applies in spades to the UK's other niche players. We have a light dusting of emerging companies such as battery specialist Amberjac Projects and electric van outfit Modec, plus automotive consultancies such as Cosworth, Lotus and Ricardo, but this all adds up to a modest hill of beans. The glowing exception is the UK drivetrain business of Ford, the company's worldwide centre of excellence for small cars, but if the nature of drivetrains changes fundamentally - as well it might - this position could be threatened.
These and many other salient points are addressed in a magisterial document that Parry-Jones delivered to the Government in May. In the NAIGT (New Automotive Innovation Group Team) Report, he implores the Government to do more to attract so-called Tier 1 suppliers to the UK. These are the firms that provide the most important sub- systems to car-makers - a huge part of the technology and value chain.
But he raises an even more important concern. When cars were first invented, it took at least 30 years before the world plumped first for the petrol engine, then for diesel. This time around, it may also be decades before it becomes clear which of the potential ways forward is best.
Although pure EVs themselves produce zero emissions, the electricity in their batteries doesn't grow on trees. If you take into account the emissions from the power-generating plants, Parry-Jones estimates that these 'zero-emission' vehicles actually generate the equivalent of 80g of carbon per 100 kilometres - not much better than today's most efficient small diesels. So until such time as all our electricity comes from renewable sources (for which read mainly nuclear), EVs and hybrids won't stop emissions so much as relocate them.
Talking to Parry-Jones is instructive. 'Governments should set emissions standards but stay technology-neutral,' he says. 'Although, long-term, it is very likely that we'll have to replace today's liquid fossil fuels with electrical energy, in many ways gasoline and diesel are ideal fuels. They have an energy density up to 50 times that of current lithium ion batteries, the infrastructure is in place everywhere to supply them, and there are fewer compromises for the user. There may be significant incremental improvements to come using these fuels, too.'
What other technologies might emerge? Hydrogen fuel cells seem to be perennially 15 years off, and the same applies to supercapacitors, devices that could potentially solve the problem of charging times. There is also promise in the work of firms such as Sapphire Energy of San Diego, which - at lab level - has cultivated algae and processed them into high-grade gasoline. Growing and processing the algae extracts exactly the same amount of carbon from the atmosphere that burning the resultant fuel releases into it, so it's totally carbon-neutral. Crucially, cultivating algae doesn't use arable land, so unlike other biofuels based on maize or beans, you're not starving Peter to fill Paul's fuel tank.
But despite all this technological uncertainty, it seems that little will stop our government - and others - from prematurely picking winners. Our national fund of £250m to develop low-carbon cars is effectively restricted to EVs, and there's likely to be a Gadarene rush to install charging points. Since EVs and plug-in hybrids are likely to play a big role in the coming years, locating these points in places such as airports, stations, supermarkets, motorway services, offices and public car parks makes sense. However, plans to tear up our streets to install charging points may need longer in the oven. After all, either those parking spaces can be occupied equally by regular cars - and, if so, pity poor EV drivers down to their last couple of amps; or they're all dedicated, like handicapped spaces - in which case, the 90% of drivers who don't need a plug will soon be in hand-to-hand fighting for the few old-style slots.
The technology is developing, but not as fast as politicians would have us believe. The Society of Motor Manufacturers and Traders reckons that, even in 2015-20, EVs will not be mass-market products. But the public, assailed by the hype and wary of a Government that has already retroactively taxed un-PC cars, may not know what to believe. They may instinctively steer clear of new-fangled, unproven technology, yet consider it madness to invest much more in obsolescent vehicles that might be taxed punitively or even excluded from city centres. They may conclude that, until things are clearer, it's smarter to hang on to what they have and buy no cars at all.
By forcing the pace and strong-arming car makers into following their lead, governments could create another disaster. And since we taxpayers would have to pick up the pieces, the joke would again be on us.
- John McLaren is chairman of the Barchester Group and has advised many major automobile companies.