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April 2, 2009 12:00 AM

Start me up: New automakers use the green car movement to get in the game


Two prototypes of the Tesla Model S all-electric sedan were unveiled last week. (Reed Saxon / Associated Press)

DETROIT -- Startup automakers such as California-based Tesla Motors and Fisker Automotive displayed cars at the North American International Auto Show in January, grabbing attention with sleek electric-drive vehicles that combine environmentally friendly chic with sports-car sex appeal. But these upstarts face an uphill road, with more and more challengers entering the green car race.

Tesla, which started in 2004, showcased its $109,000 all-electric two-seat Roadster sports car at the Detroit show and unveiled its Model S electric car last week. Tesla has also been working with Daimler AG since late 2007 in a partnership to produce 1,000 electric Smart microcars.

"If the 1,000-vehicle fleet is a success and the economics make sense and the product is compelling, that will expand to tens of thousands of vehicles per year," Musk says. "Daimler is really looking at this as a very serious product."

Fisker showed the production version of its $87,900 Karma plug-in luxury sports sedan, a four-seater with solar panels and the ability to drive gas-free for 50 miles. Fisker, which expects the cars to roll off the production line in October, also unveiled the Karma S, a convertible expected in 2011.

"We really don't have any competition, at least in the next two years" in the luxury plug-in segment, said Henrik Fisker, the company's founder.

The startups
  • Tesla Motors
  • Fisker Automotive
  • Aptera Motors: The company says it has taken more than 3,700 deposits for its 2e electric vehicle, a two-passenger, three-wheeled car that starts production later this year.
  • BYD Co.: The Chinese automaker says its plug-in hybrid, the F3DM, is nearly ready for production and can go up to 62 miles on electric power.
  • Miles Electric Vehicles: The maker of low-speed electric vehicles is trying to enter the highway-speed game with an all-electric sedan it hopes to be selling by next year.

Swagger aside, the startups have plenty of doubters. Many question whether the niche companies would be able to survive the contraction of the U.S. auto market while facing the typical growing pains of a startup auto company.

They're also competing with billions of dollars in investments by General Motors Corp. and Toyota Motor Corp. GM is hoping to bring the Chevrolet Volt extended-range electric vehicle to the market by 2010, and Toyota outlined plans in Detroit to bring an all-electric car to market by 2012.

David Cole, president of the Center for Automotive Research in Ann Arbor, Mich., said the complexity of integrating electric drive into a vehicle's powertrain could not be underestimated. And even with extensive engineering teams, the large companies are grappling with uncertainties about how lithium-ion batteries will perform in the vehicles long-term.

"What (the startup companies are) finding is that it's not quite as easy to do as it is to talk," Cole said.

Jim Lentz, Toyota's top U.S. sales executive, said the new companies likely would foster innovation and competition. "At the price point where they're entering the market, they're at a very different place," said Lentz, president of Toyota Motor Sales USA. "It's interesting for us to look at the technologies and how they're developing their electronics."

Associated Press writer David Runk contributed to this report.