June 6, 2010
HONOLULU -- Hawaiians like to think of themselves as early adopters -- especially when it comes to electricity. The first car imported to Hawaii in 1899 was an electric vehicle. The royal Iolani Palace, home to the former king, lays claim to having electricity installed less than seven years after Thomas Edison invented the first practical light bulb. Now, state officials and business leaders want Hawaii to become the real-world test ground for a burgeoning electric and alternative-fuel car industry.
Hawaii's goal is to have 50,000 electric cars on the road by 2015 -- and perhaps as many as 200,000 by 2030 -- and to establish a network of electric charging stations. "It's a very exciting time for us because we know we are well-positioned to be a place where these vehicles can work because we simply don't drive that far in Hawaii," Gov. Linda Lingle said. Big goals, to say the least, given that the U.S, electric car market is still in its infancy and Hawaiians purchased only 33,600 new vehicles last year. But Hawaii has a big incentive. Because it imports virtually all its energy, Hawaii routinely has the highest gas prices in the US On Friday, a gallon of unleaded gasoline averaged $2.73. In Hawaii? $3.51.
Announcements in recent weeks give some credence to Hawaii’s ambitions:
- Nissan named Hawaii one of the early markets for its all-electric Leaf subcompact car.
- CT&T, a South Korean automaker, committed to building a $200-million factory to assemble small electric cars for the island.
- And General Motors revealed a test project with Hawaii's major gas provider for hydrogen fuel-cell vehicles.
A paradise for alternative fuel
Some of the same things that make Hawaii a wonderful vacation spot also make it an attractive destination for the global automotive industry to try out electric cars in real-world situations. The Aloha State has perfect weather with temperatures often in the 70s or 80s and short commutes -- both of which are good for electric vehicles. It also has a population that is environmentally conscious and burdened with some of the highest gasoline costs in the US
"It creates a perfect test bed," said Deborah Gordon, a Virginia-based transportation policy consultant and coauthor of "Two Billion Cars: Driving Toward Sustainability." "If it succeeds in Hawaii, it's the US, so there's a success in the US," she said. "If it fails, it's really far away, so the failure is not the same as the failure in Rhode Island or Delaware." Hawaii is talking with nine car manufacturers who have expressed interest in the state over alternative-fuel vehicles, said Ted Peck, Hawaii's energy administrator.
"Hawaii's market is a fairly small market for vehicles and that's why traditionally we have been ignored," Peck said. "But if a vehicle manufacturer wants an opportunity to demonstrate that their vehicles can move in the market and that they'll be successful in the market, then it would be foolish of them to ignore Hawaii."
Encouraging investment
State leaders have spent the past couple of years working to position Hawaii as an attractive place for electric and alternatively fuelled vehicles -- passing legislation to encourage such growth. This spring, the state implemented tax rebates that give electric car buyers $4,500 in addition to the $7,500 federal tax credit. The state also is working aggressively on infrastructure issues related to electric cars, including partnering with a company called Better Place to set up charging stations around the state.
The partnership, announced in 2008, aims to have 50,000 to 100,000 charging stations by 2012 -- although fewer stations might ultimately be needed. The investment by Better Place could be $150 million to $200 million. Better Place, a California-based company, is also working in Israel, Denmark and elsewhere to set up infrastructure for future electric vehicles, dealing with electric load management and charging stations, and helping drivers manage their energy needs. "Hawaii has the opportunity to act as a blueprint," said Julie Mullins, a spokeswoman for Better Place. "It's a destination. So, it's a perfect place to come in and experience."
A coup for Hawaii was Nissan's announcement in May that the state would be one of the initial markets to get its new electric car called the Leaf early next year. Stan Masamitsu, president of the Hawaii Automobile Dealers Association and owner of a Nissan dealership in suburban Honolulu, sees an opportunity for electric vehicles in the state, in part because of drivers' preference for smaller vehicles on the Islands and that they "may be more" environmentally conscious because of the state's "natural beauty."
"There is certainly interest," Masamitsu said. "I think Hawaii could be a good market for it." Nissan's rollout plan for the Leaf focused on markets that had four basic elements: incentives for customers to buy electric cars, an infrastructure for charging stations, an inspection process for charging stations and general awareness about electric cars. "Hawaii is in the top tier in terms of being active and proactive in terms of EV adoption," said Keiichi Kitahara, senior manager of corporate planning at Nissan.
Imported oil costly
Hawaii's motivation is simple. The state gets about 90% of its energy from imported oil. That's about 51 million barrels of oil each year, costing about $7 billion. Fluctuations in oil prices affect just about everything in the state. A delayed shipment can mean an energy shortage. "It's not just for us the price of oil, although that's an issue, but it's the security that we need," Hawaii Gov. Linda Lingle said. "Right now, we are sitting 2,500 miles from anywhere, if the oil can't get here, it doesn't matter how efficient the oil is."
The state, working with the US Department of Energy, has laid out an ambitious plan to get 70% of its energy needs through energy efficiency or renewable sources by 2030. That includes generating 40% of the state's energy locally and harnessing energy from solar, wind, the ocean, geothermal and biomass sources. "There's nothing better about electricity that comes from oil than gasoline that comes from oil," the governor said. She said the effort to get energy from renewable sources is happening. A major tenet of the plan includes embracing hybrid and electric vehicles.
The federal government hopes lessons learned in Hawaii can be applied elsewhere, said Ken Kelly, the National Renewable Energy Laboratory's representative working with Hawaii on the project. "We're hoping to go beyond the early adopters and make penetrations into the more mass-market place," he said, "so that's part of the learning experience: 'What does it take to achieve that kind of success?'"
'Moth to the flame'
While still in the early stages, Hawaii has begun to see some early signs that its efforts are gaining ground. Nissan's announcement came about the same time that state officials were also celebrating news from a South Korean company called CT&T. The electric car company said it plans to invest $200 million into opening an assembly plant in Hawaii to build as many as 10,000 small cars for sale in the state.
"We're like the moth to the flame. We're trying to seek out areas of the country, municipalities, states, regions that are most hospitable and most enthusiastic about electric vehicles," said Curt Westlake, CT&T USA senior director of marketing. "Clearly, the state of Hawaii and its current administration are making some pretty significant commitments to zero-emissions transportation." General Motors also sees potential in Hawaii and has announced a partnership with the state's major gas supplier to test hydrogen fuel-cell vehicles, although it is not an electric car project.
"Having an island state that is bounded by water is a very good solution for putting in a new hydrogen infrastructure because you don't have to worry about the vehicles driving out of the state and then being stranded without a hydrogen infrastructure in a neighboring state or country," Charles Freese, executive director of GM's global fuel-cell activities, said last month. "Hawaii is a very nice opportunity from that standpoint. A very manageable investment can put the stations and infrastructure in place to serve a fairly sizeable fleet of vehicles."
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