Hybrid Electric Vehicles - Green Chip Review

Green Side of the 2010 Detroit Auto Show

In 1986, I bought my very first car. It was a red 1980 Chevy Chevette. And I loved that thing.

I drove it everywhere — from to Boston to DC to Atlanta, that little red Chevette gave me a sense of freedom that I had never before experienced. And I treasured that freedom.

Sure, I had to work a lot of overtime at the pizza shop to afford it ($600 seemed like a fortune back then). And insurance is never cheap for a 16-year-old kid...

But none of that mattered. Because as long as I had my car, I could go anywhere at anytime. And it's that sense of freedom that I believe every 16-year-old feels the first time he gets behind the wheel of his very first car.

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As an adult, little has changed for me.

Sure, these days I take the light rail to work. (Why pay for gas and parking if you don't have to?) But I still love taking those long road trips from time to time. And I still love checking out all the new cars coming to market.

Especially the latest electric and plug-in hybrid electric vehicles. And there's certainly no shortage of them this year at the 2010 North American Auto Show.

GM's Voltage Continues

At this year's 2010 North American Auto Show, a number of new electric, plug-in hybrid electric, and other fuel efficient offerings are being unveiled.

In fact, we're even seeing the debut of a 37,000-square-foot feature called the Electric Avenue. It is here, on the main floor, where more than a dozen new electrified vehicles will be showcased.

Of course, everyone knows about the Chevy Volt, which is expected to roll out later this year. But GM Vice President Bob Lutz did announce yesterday that GM is now making a Cadillac version of the Chevy Volt.

Using technology developed for the Volt, the Cadillac Converj is expected to hit showrooms in 2013.

The Converj originally debuted as a concept car at last year's Detroit Auto Show.

Nissan Electrifies

Also expected to hit showrooms this year is the Nissan Leaf.

This is Nissan's electric hatchback that boasts a 100-mile all-electric range, with a top speed of about 76 mpg.

While I'm definitely excited to see the LEAF zipping through the streets of Baltimore, it should be noted that this is an all-electric vehicle — not an extended range electric vehicle, like the Chevy Volt. So cost comparisons should be taken lightly when read in press releases.

Yes, the Nissan will likely cost about $15,000-$20,000 less than the Chevy Volt. But it is not really meant for trips longer than 100 miles... unless you have a few hours to stop each time and charge up.

The Chevy Volt, on the other hand, can road trip with the best of them; once the initial charge on the Volt is depleted, the gas engine kicks in.

That being said, if you're not looking for anything more than local driving, certainly the LEAF could be an excellent vehicle.

A few other exciting vehicles on display in Detroit this week include:

An electric version of the Fiat 500 minicar boasting 150 miles per charge (according to British magazine AutoExpress.)
The Volvo C30 Electric Car — 90 miles per charge
BMW Concept ActiveE — 100 miles per charge
Mitsubishi MiEV — 80 miles per charge
Think City — 100 miles per charge.

In Another 10 Years...

Ten years ago, highlights at the 2000 Detroit Auto Show included gas hogs like the Chevrolet SSR and the Hummer H2.

There was only one electric offering back then, and that was the Think City.

As an interesting side note, the Think City was originally owned by Ford at the time of the 2000 Detroit Auto Show. But in 2003, the company sold it to a Swiss company called Kamkorp Microelectronics. Then in 2006, Norwegian investment group InSpire bought it.

Now, just last week, Think announced it would build its first car for the U.S. market in Indiana starting in 2011. The company plans on selling its vehicle in the U.S. in late 2011 by importing vehicles assembled in Finland. The import sales will arrive before U.S. production starts.

While it's great to see these things built and sold in the U.S. — finally! — that was one hell of a runaround to get from point A to point B.

Nonetheless, here we are today at the North American Auto Show, and there are nearly 20 electric offerings.

So just imagine where we're going to be in another 10 years...

According to research firm CSM Worldwide, nearly half of all vehicle nameplates sold around the world (about 20 million vehicles) will offer some form of electrified propulsion technology by 2020.

Now, only one million are expected to be built with electrified propulsion systems in the U.S. — and most of those will be mild or full hybrids. But in Japan and Korea, electrified vehicles will account for about 3 million; in Europe, about 15 million!

Of course, the folks in Europe also have the unfamiliar burden of paying a more realistic price for their gasoline and diesel. And to be honest, until we start paying a more realistic price for our gasoline, the U.S. will likely lag and continue to hand off progress to other parts of the world.

As a U.S. citizen who loves to drive, this is certainly a point of frustration. However, as an investor, we know that borders don't present obstacles for us when it comes to profiting from the electric car revolution.

From high-performance battery manufacturers in China to electric propulsion system companies in Canada, we will continue to profit from this movement every step of the way.

In fact, my colleague Sam Hopkins is heading to Peru tomorrow to investigate a new lead for us. I can't wait to see how this one pans out. He'll have an update for all of us from Lima later this week.

To a new way of life, and a new generation of wealth. . .

Jeff

Neighborhood Electric Vehicles (NEVs)

John Stossel has become the latest fearmonger at Fox News.

His journalistic debut there focused on "Free Golf Carts." But in the face of Fox News' tradition of being "Fair and Balanced," the vehicles in question actually turn out to be neither free nor golf carts.

Let's poke John's report to see what hackneyed tactics he's using to bash the government and progressive energy ideas that would actually help most of his ill-informed viewers.

Stossel Trades Lies for Ratings

Stossel is now the newest member of the Fox News team, having sold out after a long run with ABC's 20/20. Apparently, viewers of Fox more readily accept steadfast resistance to progress passed off as news.

At any rate, his big inaugural piece at the network focused on government (he refers to them as "venal cretins" — but that's a news term, right?) tax credits for neighborhood electric vehicles (NEVs).

Of course, it wasn't an in-depth, detailed report on the pros and cons of incenting people to buy electric vehicles. Instead, his report was more a personal tea party against "free golf carts."

Here's the first line of Stossel's take on the matter: "After money from the "stimulus" bill was spent on destroying perfectly good cars and building an Airport for Nobody, the WSJ reports that government has found an even more ridiculous way to spend your money: free golf carts."

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Do you see what he does there? Quotations around the word "stimulus" serve to dismiss the effort that many economists now say helped pull us out of the Great Recession.

And regarding his line about "destroying perfectly good cars: "those cars weren't "perfectly good," were they?

They had been traded in for more efficient models, and their destruction ensured the tax credit wasn't for naught. Oh yeah, and the automakers hailed that idea as great for business.

Then there's the "more ridiculous way to spend your money" line.

Where were these headlines when the Minerals Management Service was doling out billion-dollar land leases to oil companies that had furnished them with cocaine and sex under the Bush administration?

That's a ridiculous way to spend money, not offering tax breaks for the adoption of clean vehicles.

But this is the stuff that's broadcast as news every single day.

All Headline, No Substance

Of course, Stossel's piece was all for shock value. He was even quoted as saying, "It's my first show on Fox Business, and I had to go big."

You don't "go big" when you're a journalist. You report the news.

But we are talking about the same news organization that ran a 12-page pictorial last week featuring "Celebrities Who Go Bra-Free."

(By the way, my colleague Chris Nelder did a good job explaining why such large herds of people chew this cud every single day in last Friday's Energy & Capital.)

What I'm getting at here is that Stossel's diatribe was all about the headline, so some Joe Shmoe could tell a few buddies about big gummit's latest crazy idea. Pure propaganda in the form of a headline.

All Stossel need do is close the report with some subjective vitriol about how stupid this idea is and the herd is hooked. He went with a generic Foxism, saying the "government shouldn't be in the business of taking money and giving it back. That just gives the venal cretins more power over our lives."

He completely disregards any benefits the NEVs and the associated tax breaks have to offer.

Let's see what happens when a journalist with more than a speck of integrity reports on the same story...

The Un-Fox Version of NEVs

I remember reading an article in Wired back in September that showed the not-so-scary side of NEVs. Listen to how terrible this sounds:

It's a brutally hot morning here at the Villages, one of the biggest retirement communities on the planet. But the saunalike central Florida weather doesn't slow down the 77,000 seniors who call this place home.

On the nine softball fields around the development, smack-talking eightysomethings try to leg out a base hit. Graceful swimmers slice through the water in glittering pools. Near the Bait Shop bar in one of the immaculate town squares, line dancers shimmy in unison.

Villagers play hard. And they drive... well, they drive kinda slow. Because the ride of choice at the Villages isn't a Lincoln or a Cadillac.

You guessed it... it's a neighborhood electric vehicle. And the seniors in the community love them.

Just in this one community — there are many more in Florida and elsewhere — there are 87 miles of trails that can only be traveled in an NEV. The trails even take residents right to the doorstep of major chains like Target, Staples, Starbucks, and Wal-Mart.

The entire community is centered around the NEVs. And they help not only to gives hundreds of thousands of seniors a happy and active retirement, but also to perpetuate the American dichotomy of consumerism and community.

It's no wonder the use of NEVs — and the amount of communities centered around them — are on the rise.

Oh, and by the way, Wired reports that "The US government's recent stimulus package offers NEV buyers a $2,500 tax credit (a third to half the cost of the vehicle)."

Stossel's "Free Golf Carts" are based on dealership incentive schemes.

Wired takes a different approach to the conclusion than Stossel's "venal cretins" route:

The Villages embodies what environmentalists have been waiting decades for - a glossy future powered by electric vehicles.

But the lesson of the Villages isn't just about the vehicles we're driving-it's about where we're driving them. The future of transportation should be focused on the quick jaunts that make up most of our day-to-day driving.

The Villages is for people who've lived long enough to know that what they want now is a warm breeze in a quiet, open ride-going fast enough to hit both the golf course and the Walmart in the same afternoon but slow enough to take in the scenery along the way.

As my octogenarian opponent deftly whacks the pickleball past my reach, I look up to catch a glimpse of the future on the horizon. It's a gray-haired guy with a backward cap, cruising in his cart past a brand-new community center. A golden retriever stands on the passenger seat, tail wagging, and an American flag is displayed proudly right where the gas tank should be.

You can decide for yourself by reading Stossel's article here and the Wired piece here.

But it shouldn't be hard to conclude that a tax break for buying a vehicle with no emissions, one that is mostly used by seniors, and one that helps create a sense of community while fostering American consumerism isn't a bad idea.

The green future is here. You can, like Stossel, whine and stomp your feet. Or you can embrace it, leverage it to save money on your utility and transportation bills, encourage it to create a prosperous and energy-secure America, and perhaps maybe even make a little profit for yourself.

Doing the latter is the opposite of venal. It's doing the right things for the right reasons.

Call it like you see it,

Nick

Investing in Lithium Batteries

The cars of tomorrow will be drastically different than the cars of today.

You can see it happening all around you. . .

From the biggest automakers to the tiniest of start-ups, the focus of the industry is changing. Once obsessed with horsepower and headroom, the focus has now shifted toward efficiency.

And the evidence is everywhere.

Cash for clunkers depleted $1 billion in less than one week. The following $2 billion went almost as quickly.

An Urgent National Priority

GE, Google, IBM, and Cisco have quietly invested $3 billion in a new technology that Energy Secretary Steven Chu has called an "urgent national priority."

It's all part of the emerging $2 trillion smart grid market.

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And when's the last time you saw a car commercial that didn't tout how many miles per gallon the car got — whether for an SUV, pick-up, or sedan.

The demand is obvious. . . and manufacturers can't increase efficiency fast enough with the traditional internal combustion engine (ice).

In order to satiate a seemingly exponential appetite for more efficient cars, the industry is undergoing rapid transition.

Lithium's Nirvana

The appetite has grown so fast that in order to maximize efficiency, automakers are increasingly turning to alternative fuel sources.

And as you probably know, the automobile fuel of the future is electricity. It'll be a multi-billion dollar transition that will spur legendary profits.

Some of them are already being made.

Warren Buffet recently posted a $1 billion return on a $250 million investment in a Chinese electric vehicle manufacturer. (Green Chip International members earned 300% on the same play.)

But it wasn't the cars that attracted him to this play. . . it was the battery. He knows they'll be as crucial to the car industry of tomorrow as oil is today.

And here's where it gets good: the batteries that company produces aren't even the best available technology — they use iron phosphate.

The big money will be made from lithium batteries. . . the same ones powering your high-end cordless drill and laptop.

From the Chevy Volt to the Tesla Roadster, lithium is the battery of choice. And lithium's market share will only grow.

For Green Chip investors, this is creating a monumental profit-taking opportunity.

Investing in Lithium

You have to act quickly if you want to get ahead of this profit curve, as the trend is already starting to garner mainstream attention.

According to MoneyWeek:

This soft, silver-white metal is used in the manufacture of pharmaceuticals, lightweight alloys for aircraft, glass, heat-resistant cookware, high-spec lubricants, air conditioners, synthetic rubber and aluminium.

But its most exciting use is in rechargeable batteries. Lithium products already power some 90 per cent of laptop computers and more than 60 per cent of mobile phones, with big future potential in battery-powered vehicles and power tools.

And news outlets were quick to report this month when:

Dow Chemical (NYSE: DOW) received a $161 million federal grant this month to develop a new generation of high-power lithium batteries
GM, Chrysler, and Ford received $400 million to make advanced hybrid, electric vehicles, and batteries
Johnson Controls (NYSE: JCI) and A123 Systems got $550 million to establish a manufacturing base for advanced auto batteries
Compact Power received $151.4 million to make lithium batteries for the Chevy Volt
Saft America was awarded $95.5 million to produce lithium-ion cells and battery packs for industrial and agricultural vehicles

I could go on. . . but you should see the trend here.

Thing is, investing in any of the companies above won't give you direct access to future lithium profits. The businesses of Dow Chemical, Johnson Controls, and the other companies listed above are too diverse to be considered pure plays on lithium.

In fact, the author of the aforementioned MoneyWeek piece goes as far as saying, "It's very difficult to invest in lithium. I have not been able to find any pure plays."

Luckily for you. . . he's wrong.

Three Lithium Plays for You

Listen, the time to invest in lithium is now. This is your shot at the Ford of the early-20thcentury.

The Minerals Yearbook released by the U.S. government calls it, "the most attractive battery material."

And I've found three pure plays that will allow you to harness its growth by going directly to the source: the miners and producers of the increasingly valuable raw material.

All three are available in a report I just released to the Alternative Energy Speculator community of investors. In it, I detail the ins and outs of the lithium market, where and how it's produced, and the companies that will offer the highest gains from its increased use.

The report, called "The Lithium Low-Down," is currently only available to members. But the potential here is so lucrative that I want everyone to have risk-free access to it.

Simply sign-up for the Alternative Energy Speculator to receive instant access to the report. When you do, you'll also have access to everything else the service has to offer, from our in-depth company profiles to our industry-leading portfolio.

And I'll even take on all the risk. If you don't like the report, the stocks in the portfolio, or anything else for that matter. . . you pay nothing. Just let me know in the first 30-days that you're not satisfied. . . although I'm sure you will be.

Click here to get access to the report today.

Call it like you see it,

Nick

P.S. On September 11, our managing editor Jeff Siegel will be speaking at the Modern Energy Investor Forum in Denver. The conference managers have offered a special rate of $300 for any Green Chip members that want to attend. The regular price is $500. Click here for more. Please note that in order to attend the conference, you must be a registered attendee. Also, in order to get the discount, make sure you reference "Green Chip Stocks" in the "interests" section on the form.

Electric Vehicle Profits

Last month I wrote a blog piece about an electric car manufacturer called Coda Automotive. This is the company that plans to introduce a full-performance, all-electric sedan to the California market in 2010.

After writing the piece, I received a few e-mails from folks who wanted to know why I would write about a company that is not publicly-traded.

The reason is simple: Any company operating in the alternative energy space — public or private — is relevant to our overall analysis of the market.

From publicly-traded solar companies that beat earnings (which happened to SunPower [NASDAQ:SPWRA] last week, and catapulted the stock 30% in just one day), to small electric car start-ups like Coda — they're all relevant when it comes to investing in alternative energy.

To give you an example of what I'm talking about, yesterday morning, Coda Automotive announced that it would be using electric propulsion systems manufactured by UQM Technologies (AMEX:UQM). While Coda is not publicly-traded, UQM is. And following yesterday's announcement, UQM soared 27 percent.

Now we've written about UQM in the past, as its technology has been utilized for other electric vehicle manufacturers that are also not publicly-traded. Most recently would be Investing in Electric Vehicle Companies that highlighted a company called Electrorides, which manufacturers all-electric Class 4 delivery trucks. Incidentally, the city of Santa Monica purchased the first Electrorides truck (the Zero Truck) last month.

Point is, just because some of these companies are not publicly-traded, doesn't mean there aren't or won't be opportunities stemming from these companies in the future — either directly or indirectly.

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Take high-performance battery manufacturer, A123 Systems, for instance. Here's a company that wasn't public when we first started writing about it. But last summer, as we reported here, the company filed for an IPO.

And since the start of this year, the company has been quite active. Take a look. . .

January 7, 2009 - A123 Systems announces plans to build a lithium-ion battery manufacturing facility in the U.S.
April 2, 2009 - A123 Systems announces it will supply lithium ion cells for Shanghai Automotive Hybrid Vehicles
April 6, 2009 - A123 Systems signs an agreement with Chrysler to supply the company with advanced lithium ion battery cells, and to jointly develop battery modules and packs for Chrysler's new electric vehicles
April 13, 2009 - GE increases it's cumulative investment in A123 Systems to $70 million
April 14, 2009 - The state of Michigan ponies up more than $100 million in refundable tax credits for A123 to establish the company's manufacturing hub in the state

Now the company's IPO has been held back, primarily due to market conditions. In fact, just last month we saw that A123 amended its registration statement yet again. But based on recent interviews and meetings, we have little doubt that A123 Systems will soon be a publicly-traded company.

The Future of Cars to Come

While there are still some stragglers who won't accept the fact that the future of personal transportation will overwhelmingly be electric, the major auto manufacturers are moving forward with their introductory electric offerings. It's one of the main reasons half these high performance battery and electric motor companies even exist in today's shaky economic environment.

The fact is, every major automaker now has an electric vehicle in the works some with their first round scheduled to hit the market next year: GM, Ford, Toyota, Subaru, Mitsubishi, Chrysler, Nissan — they're all embracing the future. . . instead of falling victim to it.

Many analysts are also sharing in our enthusiasm these days. Most recently, an analyst from Credit Suisse who said:

"We believe the electrification of the car appears increasingly inevitable, with plug-in hybrids providing the bridge technology to full electric vehicles."

We couldn't agree more. And we will continue to bring you the latest in electric vehicle development to ensure that you have every opportunity to profit from this burgeoning market.

To a new way of life, and a new generation of wealth. . .

Jeff

P.S. Toyota just announced that it now plans to launch a hybrid compact in 2011. The vehicle will use the same platform as the Yaris, and is expected to debut for $15,760.

Hybrid Electric Cars

About two weeks ago, Coda Automotive (a new electric car manufacturer), announced that it will have an all-electric sedan hitting the California market in 2010. The Coda electric car delivers a range of between 90 and 120 miles on a single charge, with a top speed of 80 mph.

Tianjin Lishin Battery is supplying the batteries for this particular vehicle. You may be familiar with Tianjin, as this is one of the world's largest manufacturers of lithium-ion cells and a key supplier to Apple, Motorola, and Samsung.

Coda is expected to have about 2,700 vehicles available in 2010, with production capacity set to reach 20,000 by 2011.

Of course, Coda's electric car is just one more option in an ever-growing line of higher mpg (or mpg equivalent) vehicles. Truth is, from the smallest suburban garages to the biggest automakers, these next generation, fuel-efficient vehicles really are being developed quite rapidly compared to where we were just a few years ago...

GM's still committed to getting the Volt out next year.
Ford will be pumping out new electric vehicles in just two years.
Mitsubishi recently announced that it will begin leasing its i-MiEV electric car in Japan, next month.
Subaru's new Stella EV is expected to be available to consumers this summer
Daimler has invested in Tesla Motors (maker of the electric vehicle sensation, the Tesla Roadster), and will use Tesla's batteries in its Smart electric car...which is expected to hit later in the year in a testing phase.

And don't forget the guys (and gals) that are converting conventional and hybrid vehicles to Plug-In Hybrid Electric Vehicles (PHEVs)...right now. While conversion are nothing new, the momentum behind conversions is definitely growing and developing.

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We recently saw Raser Technologies (NYSE:RZ) show off its electric Hummer (with a 40-mile all-electric range) in Washington. And a small California company - Plug In Conversions Corp. - has just completed a new software upgrade that enables all-electric driving at speeds of up to 70 miles per hour in a converted Prius.

Building Tomorrow's Vehicles...Today

A new generation of engineers is also being groomed to take on the personal transportation challenges of tomorrow. In fact, last Friday, students from Ohio State University took first place in the EcoCAR Challenge - an advanced vehicle technology competition run by the DOE, GM and the Argonne National Laboratory.

Essentially, this challenge requires students to design and build advanced propulsion solutions, utilizing a variety of clean vehicle options. These include...

All-electric
Range-extended electric
Hybrid
Plug-in hybrid
Fuel cell

The students also incorporate lightweight materials, improve aerodynamics and use alternative fuels, like ethanol, biodiesel and hydrogen.

Interestingly enough, Ohio State also announced a 2,000 mpg-equivalent solar car just last month. It's not a practical vehicle you could drive to work everyday. But the technology that these college students are developing is exactly the kind of technology that so many car manufacturers ignored , or simply denied for decades. Of course, that all changed when gas hit $4.00 a gallon.

Nonetheless, we're certainly excited to see what the future holds for a new generation of fuel-efficient vehicles. And while I am partial to electric and plug-in hybrid electric vehicles (particularly because these vehicles more than meet my needs, as well as the needs of more than half the daily commuting population), there are dozens of potential options coming down the pike. From electrification to advanced biofuels to new designs of old ideas - the race is on to take us out of the stone age of vehicle development...and into the 21^st Century.

Which do you think will take the lead?

Let us know your thoughts in the comments section below.

To a new way of life, and a new generation of wealth...

Jeff

Project Better Place

We may not be able to buy Project Better Place stock...

But a slew of publicly traded companies are playing an integral role in the world's most ambitious electric vehicle plan.

In fact, corporate campuses and employee homes at 19 of Israel's top companies will become testing grounds for advanced EV infrastructure.

And from these Middle Eastern hubs, multinational companies can spread and adapt their EV strategies around the world.

For instance, charging stations will be installed at the headquarters of Teva Pharmaceuticals (NASDAQ:TEVA), the world's top generic drug maker.

What's key here is that Teva also has offices in Mexico, Singapore, Brazil, Kenya, and dozens of other countries. And in all of those places, Teva's corporate strategy could mean spreading Better Place's EV infrastructure.

In 2009, Project Better Place is being propagated through the business world with the same sort of seeding strategy that Better Place CEO Shai Agassi first took to governments from Israel to Australia to Hawaii.

Among the other U.S.-listed partners for Better Place in Israel are Partner Communications (NASDAQ:PTNR), Orbotech Ltd. (NASDAQ:ORBK) and the local divisions of Nike and employment services giant Manpower (NYSE:MAN).

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Car-Sharing and Electric Vehicles—Powerful Twin Trends

Corporate car sharing is an accelerating trend by itself, and EV plug-in stations make perfect sense as a twin technology. Pay-per-use services like Zipcar are becoming more and more ubiquitous, and traditional car rental companies like Hertz now moving into that market. Hertz spokeswoman Paula Rivera told the Boston Globe this week that car sharing is a "$1 billion market with potential to grow."

Shai Agassi put it this way:

"We are today seeing the certification that there is real market demand for electric cars that will use Better Place's grid. We expect demand to grow as Israeli companies join in the vision, as well as in other countries, which together represent a potential global market of 50 million cars. We see today the tip of the iceberg of global demand."

What Agassi didn't say is that we are at a time where demand is supercharged by policy around the world.

Israel wants to end its use of foreign oil by 2020. The Obama Administration wants 1 million plug-in cars on the road by 2015. The Danish government, one of Project Better Place's early partners, has brought in IBM, Siemens, and national energy company DONG to make 10% of Danish cars plug-ins within the next decade.

Bringing car-sharing and EV infrastructure together means cars with higher emissions will increasingly be taken off the road, increasing the proportion of electric vehicles as international research projects and corporate EV fleets advance.

We're bullish on Project Better Place, but until we can buy stock in that one, we'll keep an eye out for more companies like Teva that will benefit from growing EV fleets and Better Place's ever-growing resources and research.

There are also other companies around the world making high-efficiency vehicle batteries. Though they may be seen as competitors to Better Place once it goes public, a rising tide lifts all ships.

Green Chip International subscribers are already riding the wave.

To learn more about GCI and our top EV battery play, follow this link: http://www.angelnexus.com/o/web/11068

Regards,

Sam Hopkins

Detroit Auto Show

So what will it take to get the big auto-makers to manufacture new, more fuel-efficient vehicles? How about massive losses, uncertain oil prices, and a big fat recession.

While the auto industry should have been on this like white on rice at least ten years ago, it looks like arrogance and complete disregard for long-term planning may finally be giving way to the reality of an oil-strapped future.

At the 2009 North American International Auto Show, fuel-efficiency and electrification are taking center stage. But the question is, will these new vehicles just end up being a bunch of the same useless prototypes we've seen in the past? You know, the "latest" technology that conveniently never seems to transition from the labs to the lots?

I guess we'll find out soon enough. In the meantime, let's take a look at some of the vehicles that these guys are touting to the media...

That Which Could Save Detroit

GM's planning to release it new Chevy Spark to the U.S. market in 2011. This is a compact multi-purpose vehicle that delivers 40 miles per gallon. There's also the Orlando - a compact mini-van that is expected to be extremely fuel efficient. Though we have been unable to find an exact fuel economy associated with this one. And of course, the Chevy Volt. We are hopeful costs can stay under control on this one, as sticker shock could potentially keep consumers from having the opportunity to realize what an impressive piece of machinery this vehicle really is. In total, GM is showcasing 16 new and upcoming vehicles at the auto show.

Representatives from Ford have stated that the company is going to develop at least four high-mileage battery-powered electric cars by 2012. A full battery-operated van is also expected to hit fleets next year. And Chrysler is on track to add an electric car to its U.S. product line-up in 2010.

The Best Lithium Play on the Market

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In all reality, this could be the best stock to own for the next five years.

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That Which Could Save Foreign Automakers

Chinese PHEV manufacturer, BYD will be introducing its new Plug-In, the F3DM to the North American market in 2011. That vehicle gets about 60 miles on one charge, and is expected to go for about $22,000.

Toyota certainly isn't sitting this one out either. The auto-maker now plans to launch as many as 10 new gas-electric hybrids within the next five years. Toyota is also planning to launch an all-electric car for city commuting by 2012. That vehicle, the FT-EV, is expected to deliver 50 miles on one charge. Perfect for most urban commuters' daily commutes. And of course, Toyota's new, third-generation Prius is being unveiled at the show, though we never expected the company to tinker with it too much...as it is the vehicle that has proven to be their bread-winner right now. Though the fuel economy has been increased to 50 mpg.

That being said, Honda's new Insight may give Toyota a run for its money. This new hybrid delivers 40/43 miles per gallon, and comes in at a cost about $3,000 less than the Prius. This cost advantage could certainly help Honda as consumers aren't likely to disregard price anytime soon.

That Which Can Make You Money

Overall, it's nice to see so much emphasis placed on fuel efficiency and electric vehicles this year at the North American International Auto Show. Let's just hope bailout dollars and dozens of press releases about the struggling economy don't produce more excuses instead of desperately-needed progress.

Now if a new line of electric vehicles and PHEVs do finally make it to market, it will be the high-performance battery manufacturers that will reward investors.

Of course, it's still too early to pick the winners here. In fact, just a few months ago, it looked like A123 Systems, which is planning to go public this year, was considered a front runner to supply GM with the batteries for the Volt. But last week, GM announced that it had instead chosen the Compact Power/LG Chem consortium for the first generation of the Volt.

GM also announced that it will develop its own in-house capacity to manufacture batteries.

As the sector further develops, and demand continues to grow from both the major auto-makers and the small start-ups, like Tesla and Phoenix Motorcars - certainly there will be plenty of opportunities to profit from the run on high performance batteries. And we'll be sure to pass those on to you along the way.

Until then, we believe the lion's share of 2009 profits will still be found primarily in the renewable energy sector.

While Obama's new energy plan is likely to spark a new wave of investment and large-scale financing, it will be the avalanche of new energy supply data that'll send renewable energy stocks to the moon.

We actually listed some of this data in our latest energy report. You can read that here.

To a new way of life, and a new generation of wealth...

Jeff

Shai Agassi and Project Better Place

At Barack Obama's first press conference after the election, Michigan Governor Jennifer Granholm stood right next to the President-elect.

But Granholm didn't sit with Big 3 company heads as they pleaded unimpressively for auto industry bailout money before Congress this month. She took a trip to the Middle East instead, to meet with software wiz and electric car visionary Shai Agassi.

Agassi's Project Better Place has grown by leaps and bounds in the past year. At first, the idea of paying for cars like paying for mobile phone use seemed far-fetched. With heavily subsidized units and monthly fees, drivers wouldn't really own their electric cars. But they would gain access to an expansive network of charging stations and save loads on fuel.

As the economy soured and Detroit's death knell started to sound, national governments from Israel to Denmark to Australia have come on board with Agassi's plan.

So have companies like Nissan and Renault, beating GM's Chevy Volt with a plan to produce cars that will hook up to half a million electric vehicle charging stations, which will be built by Better Place in Israel by 2011. The New York Times reports that the Volt is being jeopardized by the overall health of the very company it is supposed to save.

And the Volt won't even hit showrooms until 2010... who knows if GM will still be around in its current form?

Granholm toured Better Place's research facilities in Israel last weekend, and she even took a ride in one of the EVs. Here we see the Governor and Agassi in front of the kind of plug-in we may see all over the world in a few years, with a conspicuous Renault ornament on the grill:

Granholm wrote pretty generally about the experience in her blog. It's more stock rust-belt speech material than the kind of emphatic reaction we'd hope for, if she really thought Better Place could save Detroit.

"We want to reduce our state's and our nation's dependence on foreign oil, and the advanced battery has the potential to do just that," she wrote. "We talked about future partnerships that might be viable for Michigan, and in Michigan, we know that new energy means new jobs."

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There is also quite a disconnect between Granholm's apparent political will and the American auto industry's exasperating stubbornness.

GM Vice President Bob Lutz has been going around disparaging Better Place, telling the Toronto Star in October, "I don't see how the business equation could possibly work."

This is coming from an exec at a company begging his government for billions of dollars to stay afloat? Come on!

The state of Michigan may lose another 100,000 jobs next year, according to a University of Michigan study, and the suits are responding by publicly mocking competitors and flying around in private jets to beg for bailout money.

Obama and Granholm are growing ever more frustrated with Detroit execs. The new administration and transition team are offering help, but a major public relations overhaul is needed. Most importantly, Detroit needs to show that it is friendly to new ideas and not just new money.

For one thing, Lutz can look over to California, where the link between government and business is both strong and fruitful. That's where the latest breakthrough in Project Better Place is unfolding.

Bay Area Mayors Endorse Project Better Place

Silicon Valley is where much of the gruntwork will be done to develop Better Place's batteries and charging infrastructure, and as of late November it looks like the Bay Area will also be one of the first major rollouts for the plan.

Last Thursday, a group of Bay Area mayors endorsed Project Better Place with a plan to build 250,000 charging ports throughout the region. The $1 billion plan will kick in by 2012.

This is nothing short of a revolution. Better Place will revamp the entire transportation system of one of the biggest and most prosperous population centers in the United States.

From core projects in Israel, Australia's West Coast, and now the Bay Area, we will see more widespread implementation.

Shai Agassi said in October that a nationwide rollout of the charging infrastructure around the U.S. would cost around $100 billion. Given the astounding speed with which his Project Better Place has caught on internationally, it is no longer ridiculous to say this country could actually have a nationwide electric car grid by 2020.

This is exciting stuff, folks. We'll keep you up to date with the latest.

Regards,

Sam Hopkins

PS. My service, Green Chip International, is on the verge of recommending a Chinese battery play that will have serious implications on the global electric vehicle market. Buffett has already put his money down, and you can be next. Take a moment to read about the coming Green Energy Gold Rush. I think you'll be as excited about the opportunity as we are.

SolarWorld Makes an Investment in GM

You know times have changed when a German solar company is offering to throw General Motors a bone, and shell out $1.26 billion for one of its subsidiaries.

German solar powerhouse SolarWorld (FRA:SWV) issued a press release yesterday, stating that the company plans to bid on four German production facilities and Opel's Ruesselsheim development center and headquarters. (Opel is a German automaker that was acquired by GM in 1929, and continues to operate as a subsidiary.)

SolarWorld wants to make this Europe's first true "green" auto company.

Here's what SolarWorld representatives had to say about their plans:

"With the restructuring of the product pallet, the traditional German auto builder would offer in future especially electric and hybrid automobiles and the newest technology combining extended-range electric and combustion motors highly efficiently."

Had GM just gone this route a decade ago, the company would likely be able to weather today's market meltdown. Even with all those costs attributed to higher wages (in comparison to their Japanese counterparts) and bloated benefits packages the company had to contend with, they still would've had cars to sell - instead of trucks and SUVs sitting on dealership lots, collecting dust.

But instead, the overpaid suits in Detroit sat in their boardrooms, forcing gas guzzlers down our throats, refusing to offer vehicles with better fuel economy. And now they have the stones to ask the taxpayers to shell out $25 billion so they don't go under.

If we truly believe that a free market should dictate winners and losers, than clearly, letting them fail should only be seen as nothing more than survival of the fittest. However, if the US automakers do fail, then we're looking at massive economic devastation, and the loss of roughly 1.4 million jobs. With unemployment already at 6.5 percent, this doesn't help matters.

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Either choice is a tough pill to swallow. And I certainly don't have the answer. But it does look like Congress is not going to throw Detroit a lifeline.

Of course, nothing is set in stone. And certainly we've seen Detroit get what they've wanted in the past. So, if they somehow pull this off at the last minute - I wouldn't be surprised. Let's just hope that if this does happen, our elected officials have the good sense to attach some teeth to the deal. In fact, if they hand over that money, at least two conditions should absolutely be met:

The automakers have three years to retool their facilities to produce nothing but fuel efficient vehicles with a minimum fuel economy requirement of 60 miles per gallon. Don't care how they do it. Whether its hybrid, plug-in hybrids, lightweight materials, better aerodynamics, etc. - not a single vehicle coming out of those factories should be inefficient. And no exceptions either. If your SUV can't deliver it, then you can't sell it. I guarantee you, the market will find a contender that'll deliver that kind of fuel economy if they can't. Don't kid yourself on that one. That's the beauty of competition. It forces progress.
Every single penny of that $25 billion is paid back to the tax payer.

When I threw this idea out to my colleagues, they laughed at the 60 mpg minimum. But this is not a laughing matter, and 60 mpg is not out of the question. Not when we're already seeing small start-ups pumping out all-electric sport utility trucks and sports cars delivering between 100 to 230 miles on one electric charge. Not when high school students at the 2008 Eco-marathon build a vehicle that can get 2,843 mpg. Yes, you read that correctly - 2,843 mpg.

And definitely not when we continue to send billions overseas to continue our dangerous reliance on oil.

Listen, there can be no more excuses. These automakers need to get their acts together now. Enough with the lobbying efforts, enough with the complacency, enough with the handouts!

And by the way, since we'll require the US automakers to produce nothing but 60 mpg vehicles, we should make this a mandatory requirement for all automakers. You want to do business in this country? Fine. Do it by our rules. They'll have no choice. Without the US hardly any of these automakers could survive. It's time we start making demands instead of excuses.

Jeff

Hybrid Electric Vehicles

As gas prices tumble, some investors are beginning to question whether or not the momentum behind fuel-efficient vehicle production can remain strong. After all, at $2.00 a gallon, how many folks would really be willing to shell out an extra $10,000 or so for better fuel economy?

So are these latest gas prices (which could stay this low for a while, as the economy sputters along, and short-term demand wanes) going to put the kibosh on fuel efficiency?

Not a chance.

In fact, last week the auto club, AAA, reported that even with gas prices falling, drivers say they're still sticking to their new fuel-efficient ways. And the auto makers continue to tout their new fuel efficient, hybrid and electric vehicle line-ups for 2009/2010.

Depletion Determines Demand

Certainly you've heard enough about the Chevy Volt. And a few weeks ago, we told you about Chrysler's new electric vehicles. Don't forget Honda's latest Insight hybrid too. The company has stated that the vehicle will be priced below $20,000.

My friends, we wouldn't be seeing one bit of this if there wasn't a very real demand being instigated by a very real oil crisis.

Sure, oil prices have fallen. But you better believe this is not a trend that can sustain itself.

No matter how you slice it, the rapid depletion of oil has not stopped.

Gasoline prices have not fallen because a wealth of new easy oil has been discovered. In fact, most peak oil experts agree that the peak of oil production is now between two and five years.

And as we've said dozens of times before - this is a global issue.

So certainly, the solution is global as well.

Global Hybrid Electric Vehicles

In France, Nicolas Sarkozy has just pledged 400 million euros ($549 million) to support the development of hybrid and electric vehicles. At the same time, the CEO of the Renault Nissan Alliance signed on to create an organization to install and manage infrastructure for charging electric vehicles. This is the same group that announced it will launch sales of zero-emission vehicles in France in 2011.

The EDF Group (Europe's leading electricity producer and owner of the world's biggest fleet of electric vehicles) and PSA Peugeot Citroen are also supporting the development and marketing of Plug-In Hybrid Electric Vehicles (PHEVs) and electric vehicles.

And last week we got word that a new PHEV in China is expected to go into production next month. This one delivers an all-electric 62-mile range - with a price tag of just $22,000.

China has actually been quite proactive when it comes to PHEV development. The country launched an initiative in 2007 to encourage electric vehicle R&D at the university and corporate level. Government officials have also proposed supporting the development of charging stations.

Our international team is actually working on a new report about the latest in PHEV development in China - including a few possible opportunities for investors. That report should be ready for you to download by next week.

To a new way of life, and a new generation of wealth...

Jeff

www.greenchipstocks.com

Investing in Electric Vehicle Companies

So it looks like Chrysler has chosen to join the ranks of GM in an attempt to bring an electric alternative to the market.

Last week, Chrysler announced that it will deliver an electric vehicle in North America in 2010. The company also revealed three electric prototypes:

a Dodge sports car
a Jeep Wrangler
a Chrysler minivan

Here are a few photos:

Now while we haven't heard much in the past about new electric vehicles coming out of Chrysler, Vice Chairman, Tom LaSorda told reporters that the company is much further ahead on these vehicles than many had thought. If that's the case, then they've done one hell of a job keeping it a secret.

Chrysler also unveiled a smaller "neighborhood electric vehicle" that can go up to 30 miles on a charge. Though why these guys keep trying to push "neighborhood electric vehicles" is beyond me. These things only have a top speed of 25 mph. And by the way, Chrysler isn't the only one delivering these low-speed losers.

I get that they're trying to further develop the technology. I understand that a few environmentally-conscious folks might be interested. And certainly these vehicles have a place in gated communities, industrial complexes, and low-speed residential zones. But if they're trying to sell electric vehicles to more than just a niche market, they're going to have to stop with this low-speed nonsense. Or at least stop promoting it to the masses as a part of their electric agenda.

Listen: The automakers have a real opportunity here to help curb our foreign oil consumption - and make a hell of a lot of money in the process. Whether it's GM's Volt, Chrysler's electric jeep or Mitsubishi's iMiEV - any vehicle that can:

Deliver acceptable top speeds (nothing below 65 mph),
Deliver an acceptable "all-electric" range (nothing less than 30 miles), and
Come in at a reasonable price (any premium must be recouped via gas or diesel savings within 5 to 6 years)

Has a real chance of being the vehicle that revives today's struggling auto industry.

And for investors - well, you might be interested to know that Chrysler is now working with A123 Systems. This is the high-performance battery manufacturer that's also co-developing lithium-ion battery cells with GM for the Volt. A123 Systems is also planning to go public this year. We'll certainly keep you updated on that.

Commercial Electrons

While we're definitely excited to see the shape of electric vehicles to come, as investors, we can't concentrate solely on personal transportation. Especially when there's just as much (if not more) opportunity in the commercial sector.

After all, those big commercial trucks log more miles, and require more fuel than even the biggest gas-guzzling SUVs found in so many driveways today.

As a result, with oil prices so volatile these days, many commercial truck operators are now scrambling to find new or replacement vehicles that aren't completely reliant upon gasoline and diesel. And that's opening the flood gates for dozens of new outfits that can supply electric and hybrid-electric commercial trucks.

One of the latest entries into the commercial electric truck arena is a company called Electrorides. I discovered this company's all-electric truck, the ZeroTruck, earlier this year at a conference in Vegas.

The ZeroTruck is a Class 4 electric delivery truck. It's actually an Isuzu N Series chassis that's been converted to run on a high-performance lithium polymer battery pack. Since the Isuzu chassis makes up nearly 80 percent of the market, this is the most logical way to go.

The vehicle does have a premium of about $100,000 attached to it. But at current diesel prices, the premium should be recouped within about 5 years. Not too shabby when you consider the typical 10-year lifespan of these kinds of trucks.

And of course, the fuel savings can add up fast.

A typical monthly payment on an Isuzu truck of this nature is about $850 to $900. The typical monthly diesel bill? Between $1,200 to $1,800!

Now Electrorides is not a publicly-traded company. But we'll keep an eye on the company's growth, because there are some potential speculative plays involved - like UQM Technologies (AMEX:UQM), which currently provides the electric motor for the ZeroTruck.

We'll also keep an eye on Electrorides as this is the kind of company that could easily be scooped up or taken public if these ZeroTrucks gain the kind of acceptance we think they will.

Another company providing commercial solutions in the electric and hybrid world is Azure Dynamics (TSX:AZD).

Azure currently boasts a balance-hybrid electric drive system for Ford's E450 Cutaway and Strip Chassis trucks. This vehicle has been able to improve fuel economy by as much as 40 percent, and reduce maintenance costs by up to 30 percent. Some of their customers include: AT&T, FedEX, and Purolator.

The company has also developed a series hybrid electric CitiBus. This vehicle uses a bus body manufactured by StarTrans for shuttle bus customers. Azure has also partnered with Siemens on this project, and has provided shuttle buses in Bronx, NY, in Brooklyn, and for the city of Soledad, just outside San Francisco.

We'll also keep you posted on this one as more develops.

To a new way of life, and a new generation of wealth...

Jeff

Hybrid Battery Companies

When it comes to clean energy investments like hybrid batteries, America has fallen behind the international curve. Now Washington needs to get America's intellectual and industrial leaders down to the same task and make us competitive again.

This week, the Kiplinger Letter told its investor readers about a glass-half-empty proposition: America's shift away from addiction to foreign oil will yield to dependence on overseas-based cleantech.

"Japanese and Chinese manufacturers are set to sew up the market for mass-producing lithium ion auto batteries that will provide sufficient power for most motorists to make daily commutes without burning any gasoline," Associate Editor Jim Ostroff wrote on Tuesday.

He's talking about Japanese companies like Matsushita, Panasonic, Matsui, and China's BAK. They're making moves with international giant Toyota and smaller companies such as China's Geely, which has yet to make a name for itself in North America.

Mr. Ostroff says we don't have large-scale production facilities for this transportation technology, and he's right.

Nevertheless, we see the glass as half-full, both because we're profiting from international cleantech already, and because we know America's best and brightest are stepping up to the global challenge.

Since Green Chip Stocks and sister publications have been tracking and profiting from international hybrid battery makers like Matsushita for years now, we know what led to Asia's dominance in the field...

It turns out the U.S. auto industry wasn't "asleep at the wheel," as Kiplinger's says. Rather, Detroit took a disastrous wrong turn when it banked on behemoth SUVs and abandoned promising plug-ins and hybrids.

But current foreign dominance in plug-in-friendly batteries, which Kiplinger's calls the "dark shadow" of plug-in hybrids' bright future, needn't be a nail in the coffin of homegrown energy ingenuity. Jeff Siegel told you recently about General Motors' major moves in plug-in hybrid technology and production: http://www.greenchipstocks.com/articles/plug-in-hybrids/276

Clean Car Technology from Silicon Valley

The Big Three needed a kick in the pants, and neither the Japanese compact car revolution of the 1980s nor the European breed of tiny-trunk hatchbacks that are easy to park seemed to register with American execs.

We think the looming fact of foreign batteries in each and every GM, Ford, or Chrysler to roll off the assembly line should force Congress and companies to move quickly and concertedly.

Instead of this week's "Drill here, drill now," sloganeering on Capitol Hill to allow more offshore drilling should switch to "Think here, think now."

Let's launch full throttle into the kind of clean car roll-out that tiny Israel's government and business leaders are pushing, using technology being developed in California.

That's right. Israeli software wizard and multi-millionaire investor Shai Agassi's Project Better Place program—set to swarm Israel's roads with plug-in hybrids within the next half-decade—is headquartered in Google's neck of the woods in Palo Alto.

It's the kind of thing we'd like to see more of—Americans at the center of pioneering international cleantech projects.

I pointed out this spring that a consortium of entrepreneurs and researchers from the information technology heartland of Silicon Valley is pushing hard for more clean energy technology funding.

TechNet's Green Technologies Initiative urges the U.S. government to "promote and highlight new technologies and innovation as a critical part of the solution to national security, economic competitiveness and global energy and environmental challenges and encourage a national commitment for investment in and adoption of innovative green technologies."

TechNet, which includes CEOs of Intel and Cisco plus funding giants like JP Morgan, also wants politicians to "encourage public policies, best practices and initiatives to spur the development and adoption of new technologies to enhance energy efficiency, encourage use of renewable energy and protect the environment."

A Merrill Lynch/CapGemini poll this summer found that environmental concerns still motivate the majority of Americans who invest in renewable energy; not profit potential. But the feel-good dividends aren't as sweet if there's no monetary return on your investment. TechNet's line on economic competitiveness gets to the crux of Kiplinger's worries and the solutions that could avoid a redundant American auto industry, while providing you with more opportunities to invest.

We're looking to Silicon Valley and Washington for the next domestic moves, especially in the Senate where many energy bills have died, but we're also keeping an eye on international firms that will stand the test of true global competition in automotive cleantech.

Regards,

Sam Hopkins

P.S. - Green Chip International readers are about to get in on a leading play that will profit from energy efficiency moves wherever they are in the world. Low-cost production and high demand for efficiency products means this company's prospects for global success improve by the day. Don't miss the next pick, learn more about GCI today: http://www.angelnexus.com/o/web/8983

Plug-In Hybrids

Have you seen any of those car commercials recently on television?

Nearly every single one of them touts the fuel efficiency of the car they're trying to sell you. A clear indication that this is a top priority for consumers.

The only problem is, those fuel efficiency ratings are pathetic.

17 miles per gallon, 28 miles per gallon, 32 miles per gallon.

Who cares?!!

If you're looking for fuel efficiency, chances are you're looking at a Toyota Prius, as this hybrid powerhouse delivers about 45 miles per gallon.

And it is for this reason that Toyota has been extremely successful at building a reputation for being the "go to" eco-friendly car maker.

For the sake of fuel efficiency, no U.S. automaker comes close.

Since it's debut in 1997, Toyota has sold more than 1 million of its hybrid superstar, and even moved into the number one spot for global auto sales - overtaking GM's long-standing reign.

But last week, Toyota finally felt the same sting U.S. automakers have been feeling over the past few years, after it was announced that the company would be cutting its 2009 vehicle sales forecast by nearly 7 percent due to a slowdown in demand for its larger cars and pickup trucks.

Once again, poor fuel efficiency resulted in failure.

Bottom line: Vehicle purchasing decisions are now being dictated by recessionary realities and higher gas prices. And Toyota - the very company that was smart enough to go full speed ahead with the Prius, while GM and Ford continued to try and force the market, instead of properly preparing for it - is now being forced to make some quick changes. Because you see, this time the suits at GM aren't sitting in big board rooms playing Ego Fetch like they were a decade ago.

And Toyota may soon find itself facing a competitor it hasn't seen in a very long time.

Plug-In Hybrids and The Shape of Electric to Come

Some have questioned how serious GM is about its new Plug-In Hybrid Electric Vehicle (PHEV), the Chevy Volt. After all, they did kill a potential electric vehicle powerhouse with the EV1 back in 1999.

But times have changed.

Gas is no longer $1.00 a gallon. Most folks now realize the very dangerous implications of maintaining our strong reliance on foreign oil. And climate change is no longer a debatable issue controlled by mocking naysayers.

No, this isn't 1999. And with so much market share at stake, and so much time, energy and capital already committed to the Volt, I don't believe GM will make the same mistake twice.

As it stands, GM says the Volt will be launched in 2010 - less than two years from now. And they've really been laying the groundwork for what looks to be like a potential marketing monsoon.

In fact, I just recently read that the Volt may actually be featured in the next Transformers movie. My friend, if you want to sell a car - put it in the movies. From the Bandit's Trans Am in Smokey and the Bandit to the fleet of Mini Coopers in The Italian Job - that's the kind of smart marketing that can really pop demand numbers.

Point is, GM has a real chance here to lead the way with the next major transformation of auto manufacturing.

Will they pull it off?

I sure hope so. But you can bet the other automakers aren't sitting around, waiting to find out.

Now that Toyota's sitting on massive inventories of pickups and SUVs, it's launching its third-generation Prius and a new hybrid model under the Lexus marquee. Both will debut at the Detroit auto show in January.

Toyota also recently announced that it's speeding up the development of its plug-in hybrid making it available to fleet customers in 2009 - a full year ahead of its earlier plans.

Of course, if it's the PHEV they were telling us about a few months ago, they might as well go back to the drawing board. That PHEV delivers 8 miles in all-electric range before the regular hybrid engine kicks in.

No one's shelling out extra cash for a measly 8 miles in all-electric range.

And the sad thing is, there are conversion companies that can add a 30-mile all-electric range to the Prius right now. Not two years from now. So why they're screwing around with 8 miles is beyond me.

Reps from Toyota also said that they would now be speeding up the development of all-electric vehicles with hopes of mass-producing them in the early part of the next decade. The company did end road tests for the all-electric E-Com in 2006. So it will be interesting to see if those eventually find a home on showroom floors

These are basically mini-cars that wouldn't be worth much on our highways, primarily due to maximum speeds of less than 70 mph. But they could gain real traction in urban areas if the price is right.

Don't sleep on Nissan either.

Nissan says it will have an electric vehicle on the market by 2010. The current prototype boasts a range of 62 to 75 miles. For most folks in the U.S. who drive 29 miles per day or less to get to and from work (according to the Bureau of Transportation Statistics), an all-electric, NO-GAS-REUIRED vehicle could also provide a catalyst for a real transition in personal transportation.

Mitsubishi's also trying to get a piece of this action with its i-MiEV.

Mitsubishi claims the i-MiEV can travel 100 miles on one charge.

The first 2,000 will be produced next year. And Mitsubishi is currently working with Pacific Gas & Electric and Southern California Edison to test the i-MiEV.

PHEVs: Back to the Batteries

There's no doubt that plug-in hybrid development is getting into full swing.

These guys finally figured out that most people don't get paid millions of dollars to make bad decisions in corporate offices in Detroit or Japan. Most people work hard for a lot less, and can't afford to spend hundreds of dollars a week to fill the tank. And that's why we're not only going to see pretty much every single vehicle on the market be a hybrid vehicle within the next 10 years - but a good portion of them will be either all-electric vehicles or PHEVs.

It may be GM that nails it with the Volt, or it maybe another automaker altogether. Perhaps even one of those smaller firms, like Tesla or Phoenix Motorcars. Two companies that have already developed and sold all-electric vehicles.

But one thing's for sure.

The company that can provide the cheapest, lightest and most efficient high-performance batteries to fuel these vehicles will be the companies that make investors an absolute fortune.

We've discussed a number of these companies in these pages before. From those that are small, thinly-traded stocks, like Electrovaya (TSX:EFL) and Electro Energy (NASDAQ:EEEI) to new IPOs, like A123 Systems.

But it's still too early to pick a clear winner in this space.

The fact is, there will probably be more than one, as I find it highly unlikely that only one high-performance battery manufacturer will be able to deliver the quantities that will be needed to keep up with demand.

In any event, we will continue to monitor this sector closely, and report on any new developments along the way.

If you'd like to read more about these vehicles, and the companies we're watching now, check out our free report, Plugged-In Profits.

To a new way of life, and a new generation of wealth...

Jeff

Energy Efficient Transportation

The great American writer Paul Theroux once said, "Travel is only glamorous in retrospect."

These days, energy costs figure in to make a vacation seem anything but glamorous or carefree, and energy-intensive tourism companies have gotten hit hard.

But with new energy efficient technologies being employed almost daily, we see a niche where smart investors can make serious money.

Profiting from Energy Efficient Travel Stocks

No one's thrilled that American Airlines (NYSE:AMR) is starting to charge for pretzels and checked luggage. But high-flying transportation companies are none too thrilled about the pocket pinch that's leading to those cuts.

AA is trying to promote its Fuel Smart program, which they say saves nearly 70 million gallons of fuel a year by turning off engines during taxiing and cutting back on heavy food carts.

It's the same squeeze that is hurting fossil-fuel freight trucks and bus systems down on the ground in the U.S., forcing cuts wherever they can be made.

And expensive oil is also choking airlines outside of the U.S.—Air New Zealand just dropped its 2008 earnings outlook to a full 25% below last year's total.

They're replacing Boeing 747 jumbo jets with more energy efficient 777s for the London-Los Angeles route, and we're sure to see the Kiwi national line make many more tehnological changes to pad its profit margins.

As in almost any industry these days, the companies that are alive in a few years will be the ones that wisely invest in efficiency now.

Flying While Fighting Fuel Drag

At the Berlin International Air Show this week, airline fuel analyst Bob Mann told the Associated Press he estimates that "at current fuel prices it would require a 20 percent increase in revenue, accompanied by a 20 percent reduction in capacity for US airlines, to generate economic returns."

You don't have to be an economist to know that's darn near impossible to achieve, especially with a recession still hanging over everyone's heads.

So we turn now to a man whose coffers are sufficiently padded...

Richard Branson, the eccentric owner of Virgin Atlantic Airways, Ltd, has long been known for his antics like dropping dollars as he floats in a balloon over crazed audiences.

These days I bet Branson's clutching his airborne bucks tight.

With oil as 30%-50% of any airline's operating cost and oil rising towards $150, Virgin hopes to make a dent at least in practical testing.

The company flew a 747 powered partially by palm oil from London to Amsterdam this February.

That was the first airliner to burn biodiesel, but there may not be much more of that anytime soon.

David Kaminsky Morrow of industry magazine Air Transport Intelligence said in Berlin that serious use of alternative fuels in air travel "is something that we'll see in the longer term. It's not a simple exercise to take kerosene out and put something like sunflower oil, or whatever, in."

No one's saying the switch will be easy... narrow-bodied designs and aeronautical advances far beyond the knowledge of your humble editor will have to be made.

And, frankly, the first stop for many manufacturers and airlines alike will be coal-to-liquids technology, which was put to large-scale aeronautical use by the German Luftwaffe in World War II as the Nazis were isolated from oil supplies.

But we've still got a biofuel play that will take off with renewable energy progress in the skies.

Brazil: Sugar in the Sky?

Long-term investors should consider Cosan (NYSE:CZZ), the top international refiner of sugar and a leader in sugarcane-based ethanol.

Cosan is headquartered in Brazil, an economy that is booming and has turned around many national businesses over the past decade. Among those is aircraft manufacturer Embraer (NYSE:ERJ), which is known for making smaller planes (you may have taken one on a short connection), and used to be known for making small change for investors.

The combination of Embraer, Cosan, and even Brazil's national oil company Petrobras (NYSE:PBR) which has huge biofuel investments, give Brazilian ADRs the trajectory they need to top your list of smart airline stocks.

Next week, we'll look at some tourism trades down on the ground that will let you capitalize on the greening of hotel chains and resorts.

Until then,

Sam Hopkins

Plug-In Hybrid Electric Vehicles

I'll be the first to admit it.

Over the past few years especially, I've had little sympathy for some of the major auto-makers that have been losing loads of cash. The way we see it, they brought it on themselves by trying to force the market, instead of supplying it properly.

Especially General Motors.

Back in 1997 GM had an opportunity to lead the world in fuel efficiency with their electric vehicle, the EV1.

The EV1 was an electric car (with an 80-mile range) that GM introduced before the California Air Resource Board's (CARB) original Zero Emission Vehicle (ZEV) mandate went into effect.

The mandate required 2% of all new cars sold by the seven major auto-makers in California to meet "zero emission" standards by 1998, and 10% by 2003.

But GM, along with nearly every other major auto-maker, played both sides of the coin. While the EV1 was selling, and Toyota, Nissan and Honda were developing prototypes, the big auto-makers also aggressively tried to kill the ZEV mandate.

They were successful.

The lawyers got paid, the chairman of CARB got a cushy new job with the fuel cell institute (after manipulating the hearings on the ZEV to cater to the auto-makers while silencing ZEV advocates), and the EV1 was forced into extinction.

In 2006, this tragic story came to life in the documentary, "Who Killed The Electric Car?" And those who saw the movie called bullsh%$ on the world's biggest auto-maker.

Now, fast-forward to today - 2008.

The Toyota Prius is one of the most popular vehicles on the road. Its exceptional fuel efficiency has helped the company sell more than 1 million units. And as gas prices continue to rise, so does the demand for fuel efficiency.

Every major auto-maker is now offering hybrid versions of their vehicles. And most industry insiders agree that over the next decade, nearly every vehicle on the road will be some version of a hybrid. That includes GM.

In fact, GM, despite years of mediocrity, complacency and bad ideas, may actually have a shot at jumping to the head of the line when it comes to fuel efficiency.

Plug-In Hybrid Electric Vehicles: They Finally Get It!

It's hard for a cynic like me to believe, but it's starting to look like GM may actually be the next major auto-maker to raise the bar in fuel efficiency.

Not counting the insanely efficient vehicles that some smaller companies and garage engineers have already built, of course.

The bottom line is that these guys have no choice.

The oil supply crunch is becoming more and more apparent every day. Gas prices are only going up from here, and consumers are freaking out.

But while some will continue to demand that the government step in and "fix" this problem - which you and I both know is not an option - it will have to be an increase in fuel efficiency to keep our personal transportation moving.

And GM knows this. They finally get it. They've finally decided to stop dictating consumer behavior, and start embracing it.

They're doing it with the Chevy Volt.

The Volt is a Plug-In Hybrid Electric Vehicle (PHEV) that can deliver 40 miles in all-electric mode.

To give you a frame of reference, the Bureau of Transportation Statistics has indicated that U.S. commuters drive an average of 29 miles per day. For those who fall into this category, driving to work won't cost a single penny in gasoline costs. And if you go beyond the 40-mile range, the Volt's gas-powered engine kicks in, both propelling the vehicle and feeding an onboard generator that produces electricity while the car is operating.

Last week I attended the Alternative Fuels and Vehicles Conference in Las Vegas, where I had the opportunity to speak with a couple GM reps, and also see the Volt.

For a plug-in hybrid electric vehicle, this sure as hell isn't some tinker toy car.

Take a look at these pictures:

It is our hope that GM will be successful with the Volt. It's a big game changer, and finally gives GM some much needed credibility with consumers seeking fuel efficiency.

Don't get me wrong. If they balk or continue to press Congress on inadequate fuel efficiency measures, I won't hesitate to call them out. We have to.

But I have to be honest. There was definitely a different attitude at this year's conference. There were no excuses about past decisions. In fact, there was much acknowledgement of GM's less-than-stellar past performance in the area of fuel efficiency.

These guys finally seem focused.

And we're eagerly awaiting 2011—when the vehicle should finally hit the market.

In the meantime, we remain bullish on the high-performance battery companies that continue to pick up momentum as GM and other major auto-makers begin to embrace PHEVs - the absolute best near-term solution to our oil crisis.

These batteries represent the next generation of fuel for personal transportation. They will enable a significant decrease in oil consumption, carbon emissions and infrastructure vulnerability.

The transitional energy economy is upon is, my friends.

Embrace it.

Profit from it!

To a new way of life, and a new generation of wealth...

Jeff

Tata Motors Stock

Two entirely different paths are pulling India's third tier automotive manufacture to an uncertain - if not remarkably promising - future.

In one direction, Tata Motors India (NYSE: TTM) is bidding on Ford's Jaguar and Land Rover divisions, spurring sell offs from top holders such as A.S. Thiyaga Rajan, manager of $250 million at Singapore-based Aquarius Investment Advisors Pte., who dropped 99% of shares. . . and he's not alone.

The purchase of Jaguar and Land Rover could cost as much $1.7 billion, four times their 2007 earnings, cutting 2009 per-share profit by 42%.

This has spurred fears echoed by parent Tata Group owner, Ratan Tata.

However, the 70 year-old chairman rejects the notion that Tata is overreaching their Indian market with such investments. . .

"We're not trying to be a global player. We will grow internationally in select markets."

That was said January 10, with the unveiling of the new, $2,500 Nano, the design that is pulling Tata Motors back to its roots - affordable transportation for the world's 2nd fastest growing population of one billion, and consequently, one of the largest demands for automotive transportation.

And while Tata Motors spokesman Debasis Ray said, "we are very satisfied with the progress of discusions," in response to questions about the Jaguar and Land Rover takeover, I am personally more excited about their developments in the Nano and MDI Air Car.

Tata Motors Nano

The Nano, in my opinion more or less two motorcycles spliced together, is a ten foot long - about the size of the original Mini Cooper -- four door car powered by a twin cylinder, 624 cc, 33 horsepower engine that gets about 54 mpg.

Of course, at $2,500 you can't expect much more than getting to point B from A. There will be none of the amenities that so many in the U.S. And Europe have grown accustomed to.

That's right, you can kiss your power steering, radio, air conditioning, power windows and any other frills good bye in the name of cheap thrills.

Aside from looking to luxury and bare bones markets, Tata Motors is also shooting for zero emission dominance with their Moteur Developpement International Air Car partnership.

As I reported in my previous article, MDI Air Car, fears of later production are unwarranted, as it is now being built and will be ready for India at the end of this year and could possibly hit the U.S. In 2010.

Tata Motors has a lot going for them, with or without the acquisition of Ford's luxury branches, so stay tuned to Green Chip Stocks and Green Chip International where my colleague Sam Hopkins will give his two cents on Tata Motors stock and how to profit.

Keep your hopes in the future but your sense in the present. . .

Field Palmer

Hybrid Car Reviews

The Winners

Chevrolet Volt:

For as much flak as I give GM I must admit that seeing the Volt in person, albeit naked, certainly gives a different perspective of what they are trying to accomplish.

All of its innards exposed and laid out in open air under stadium lighting for the public to ogle, the complexity of their E-Flex Propulsion System is obvious.

With the help of A123Systems, the designer of the Volt's lithium ion battery, the Volt is projected to deliver 40 miles on plug-in power alone before needing to switch to fuel-powered electrical generation.

And when you do need a charge while out on the open road, this system allows the Volt to be configured to run off of gasoline, E85 or biodiesel.

This car is slated for a 2010 release with a $35,000 tag. But, as I said before, I'll believe it when I see it sitting in the car lot.

Ford Airstream Concept:

A sleek, if not slightly awkward, design from the folks at Ford, the Airstream's appearance caused quite a ruckus at this years show.

Powered by what Ford has dubbed the HySeries Drive, the Airstream is a plug-in hydrogen hybrid fuel cell vehicle that operates on electric power at all times giving the test bed vehicle an equivalent fuel economy of 41 mpg.

Is it likely we'll see a car this outrageous on the roads anytime soon? Probably not-- though it would be pretty impressive. . . but, as you can see from the pictures, the Airstream does its job of generating public interest in alternative, fuel-efficient drive lines quite well.

Smart ForTwo:

Slathered in eye grabbing metallic red, the Smart Fortwo had a legion of of fans, ranging from young to old.

With an estimated 45 mpg average, the Fortwo is powered by a 1-liter, 3 cylinder engine that gets this fun little, though surprisingly spacious, car to 60 mph in about 12 seconds.

K-1 Attack Hybrid:

Built by West Philadelphia High School, this gorgeous super car weighs 2,500 lb., makes 350 hp, does 0-60 in under four seconds and gets 55 mpg, all while looking fantastic. Watch out Tesla and Toyota, these kids know what they're doing. . .

Toyota Prius:

And finally, of course, is the tried and true Toyota Prius, still attracting admirers after over a decade of production. But, it's no wonder it still attracts admirers with its 60 mpg in the city and 51 mpg on the highway.

The Losers

Lexus LS 600h L:

One hell of a car... but at the same time one hell of a stupid hybrid.

Sure, this behemouth has a total of 430 hp and every possible gadget and gizmo any car that costs more than $100,000 should.

But with 20 mpg city and 22 mpg highway, this hybrid is all about the image, and does nothing a hybrid should.

Chevy Tahoe Hybrid and Cadillac:

I understand we all have different needs. But the bottom line is, when oil is at $300 a barrel, it won't matter what you need to do. A 25% increase in fuel economy sounds good, however, when that gain only pushes mpg to 22.7, well, thats just not enough... nice try though GM.

Well thats it for the Philadelphia Auto Show folks. Thanks to our photographer Crystal Dunn for lugging all of her equipment around a massive convention center, fighting her way through the crowd to get these shots.

As always, keep your hopes in the future but your sense in the present...

Field Palmer

Green Chip Stocks

SkySails

Fact: There are about 97,000 merchant vessels circling the globe, consuming approximately 280 million tons of oil a year and producing the same amount of nitric oxides as the entire U.S.

Smells like an opportunity to me!

Enter the SkySail

Established in Hamburg in 2001, a company called SkySails is turning wind into profits by taking a lesson from a simpler, more romantic time of masted sailing ships. Though the company has actually eliminated the mast, it has developed a new wind propulsion system based on large towing kites.

The result is a system that cuts fuel costs by as much as 35% on annual average. Depending upon wind conditions, of course.

The current model of SkySail covers an area of 160 meters and is attached by line to a winch on the bow. And without a mast to contend with, not only is deck space spared for cargo, the sail is not restricted to low level winds close to the ocean's surface.

According to SkySails, wind speed at 100 meters up can be up to 20% higher than wind at 10 meters. In short, the kite can sail to where the wind is a blowin'.

The sail is also controlled by special computers that sense the wind speed and adjusts foils in the kite, directing it in large swooping figure eights. With whip like momentum it generates approximately 6,800 extra horse power.

The First MS Beluga SkySails Voyage

On January 22, for the first time since the masts of major shipping vessels fell to steam and diesel power, the line laid out and the kite unfurled in the gusty winds of the North Sea on the 10,000 ton, 133 meter MS Beluga SkySails.

Two weeks later, on February 5, the MS Beluga SkySails safely arrived in Venezuela with its cargo of an entire particle board factory completely intact with reported fuel savings of approximately 10 to 15 percent-- about $1,500 per day.

Those saving came from their 160 sq. meter kite. And according to SkySails, later on this year they will have a 320 sq. meter kite that will offer 50% savings in proper conditions.

From there they plan on building a 600 sq meter kite that should provide enough energy to cut 10 tons of diesel per day and cut $6,000 out of voyage costs.

Multiply that by the 97,000 merchant vessels in operation, and you’re looking at an overall cost savings of about $582 million, or 970,000 tons of diesel every day.

If you’d like to see SkySails in action, click here .

Keep your hopes in the future but your sense in the present . . .

Field Palmer

Green Chip Stocks

The MDI Air Car

All across the nation, jaws dropped in a collective gasp as markets plummeted as fast as GM’s popularity after “Who Killed the Electric Car?” showboated corporate scandal on a scale only rivaled by Big Auto and Big Oil’s dismantling of electric trolleys.

If it were not for the multitude of requests I’ve recently received to write about the Moteur Developpement International Air Car I would have loved to devote my weekly Green Chip Review slot to articulate my utter abhorrence of the economic reality that is rearing its sub-prime-pocked head and baring its needle sharp canines in the face of asinine fiscal policy.

But, in times of great distress I remember my colleague’s catchphrase, “periods of danger and crisis are also periods of great opportunity,” and as you can imagine, that is much more comforting than pulling a Jim Cramer and crumpling into a sobbing, gibbering, sweating mess on the office floor.

So come along my friends, hike up your skirts and take a line from the Foreign Legion, “March or die.” That’s right, onward to one of the most promising technologies of today . . . a car that runs on compressed air.

Compressed Air Technology is nothing new. Since 1896 when Rudolf Diesel made a patent claim for using a supercharger to provide a more dense charge of air to the first diesel engine, compressed air has been used to up power output in almost every internal combustion application.

1994 changed the entire name of the CAT game. Instead of using compressed air to force feed more oxygen and fuel to the engine, ex-Formula 1 designer Guy Negre of Nice, France, devised a way to make a car run purely on air. It can be refilled at modified air compressors found at gas stations for about $2 in only a matter of minutes.

If a compressor is not readily available, the Air Car can simply be plugged into an outlet and an on-board compressor can refill the tanks in about four hours, giving it a range of approximately 124 miles with a top speed of 68 mph.

Now, due to the sensitive nature of revealing how such a technology works, MDI has offered limited information on the drive system.

Here’s a brief rundown . . .

The Engine

To maintain adequate pressure so that the main large cylinder is given a burst of pressure instead of a continuous slow push, a smaller cylinder is used to build pressure.

As the smaller piston collects the air and travels downward on its stroke the “articulated con-rod” lets this smaller piston rotate its rod on the crankshaft while allowing the main piston to be held at top dead center 70% of the time, until the smaller piston reaches the bottom of its stroke. Then the blast of air is delivered, driving the main piston down.

A bit tricky to put into words, so here’s a video with the MDI engine on the right . . .

The Gear Box

The automatic, computer-controlled transmission is an in-house design of MDI that constantly monitors the speed of the vehicle and shifts with minimal loss of energy.

Moto-Alternator

Located between the engine and the gear box, the moto-alternator produces brake power, starts the vehicle, provides extra power when needed and helps the CAT’s motor to allow the tanks to be refilled.

The Air Tanks

Constructed of carbon fiber, the three massive air storage tanks will not explode when damaged, which is a good thing considering they keep 4,000 psi under wraps. The fibers are designed to split apart and allow the pressure to drop without blowout.

The Body

The body is built with fiber and injected foam, offering several major advantages.

Reduced cost

Reduced weight
Easier repair
No rust
And arguably safer because the fiber body won’t crumple and cut like steel.

So, finally, after 14 years of research and development, the Air Car is ready for production in India under MDI’s new partnership with Tata (NYSE:TTM) Motors, the leading automobile manufacturer in The Land of the Tiger.

Called the MiniCAT, the Air Car for India is poised for success under this new partnership. With a cost of about $3,800, the car is affordable and will benefit from Tata’s stellar reputation—a reputation that has led to over four million of their vehicles being sold, totaling $5.5 billion from 2005-06.

So what does the future hold for the Air Car?

It was believed that the MDI Air Car would hit the showroom floors in Australia, Europe and India by the end of this year.

But recently, in the Mumbai Mirror, this was reported . . .

When contacted, Tata Motors’ Debasis Ray, who heads the company’s corporate communications, said: “The Air Car still requires nearly two years of work, to refine its technology.” He added that the company would only discuss the price point for the vehicle and its launch date after Tata Motors is ready to launch the car into the market.

A bit disheartening, but keep in mind this quote is in context of the Indian market only. And considering that MDI already has 50 factories across Europe waiting to go, I have a sneaking suspicion those two years will be spent working out minor kinks and tailoring the car to Indian market tastes.

Keep your hopes in the future but your sense in the present . . .

Field Palmer

P.S. For a chance at double-digit profits from another company making a novel, low-emissions enginge, read this report.

Wind Powered PHEVs

Relaxed in a large armchair at a recent conference in Anaheim, Ca., oil tycoon T. Boone Pickens with his heavy Texan drawl likened the U.S.’s energy crisis to a Greek legend and made an argument for wind power.

In “The Sword of Damocles,” the ruling tyrant, Dionysus, lived a posh life with servants hired for flattery.

Damocles, one of Dionysus’ entourage, laid on the praise with a heavy hand. He prattled on and on about how wonderful it must be to have so much power and wealth.

Dionysus said, “Have at it, hoss, just for a day.”

Damocles lounged in Dionysus’ chaise, popping grapes and enjoying a gentle breeze from the palm-frond flapping concubines.

All seemed well, but when he looked up he saw a razor sharp sword glistening above his head, held by a single horse hair.

Quite disturbed, he turned to Dionysus, who explained that the feeling of power would not be complete without the ever-present risk of falling from it.

The moral from Pickens’s perspective is, the more you have, the more there is to lose, and the more people want to take it from you.

And right now the same proverbial sword is dangling right over America, and the single thread that is keeping it from taking off one of our ears is our ever-thinning supply of energy.

As a nation we consume 25% of the world’s oil and produce a quarter of the planet’s greenhouse gases, yet we constitute just five percent of the population. Sounds like a gluttonous ruler, eh?

Well, that’s exactly the way Mr. Pickens sees it.

Even though he’s made over $2.5 billion in oil during his life, he knows we must switch to alternatives if we ever want to sheath that sword.

And what he proposes we do is distribute our energy needs among different alternative resources and get hostile oil and gas supplying countries off our back.

As a matter of fact, Pickens is so gung-ho about alternative energy he’s putting $6 billion in a wind farm in his home state.

Wind Power for a Million Homes

Covering 200,000 acres across four Texas panhandle counties, his 2,000 windmills will generate 4,000 megawatts, or as much power as two Comanche Peak nuclear plants.

According to American Wind Energy Association’s spokeswoman, Susan Williams Sloan, one megawatt is enough power to supply 250 Texan homes.

That means this wind farm will produce enough power to keep one million homes wired.

In spite of those impressive figures, some people still have it in their heads that wind energy will never work, even though . . .

The U.S. Department of Energy says, “Harnessing wind power is the fastest growing technology in the world.”

For the past five years the wind power industry has grown 28% every year, and is projected to double every three years.

50 countries are currently installing turbines.

That’s not to say wind power doesn’t have its drawbacks. One of the major hurdles to overcome is creating storage capacity for unused electricity during off peak hours—that’s when cars with large battery packs, like plug in hybrid electric vehicles (PHEV) or electric vehicles (EV), become an invaluable technology.The reason for this is that during the night, when electrical consumption goes down (off peak hours) a coal-fired plant can reduce electrical output to match the intake.

Just because Sally remembered to turn off her kitchen lights before retiring to bed doesn’t mean that wind is going to stop blowing, but if she remembered to recharge her PHEV, then switch it to Vehicle to Grid mode (V2G), her car’s battery will be a cache of extra, unused electricity and she could sell it back to the utility during surges in demand.

Currently V2G technology is only offered by Pacific Gas & Electric (NYSE: PCG )—now testing 300 PHEVs on their V2G systems—and PJM, which operates across 13 states including Delaware, where researchers at the University of Delaware are advancing V2G technology.

“When I get home, I’ll charge up and then switch into V2G mode,” said Willett Kempton, UD associate professor of marine policy and a V2G innovator for the past ten years.

Kempton believes that utilities could be looking at $4,000 a year from a single V2G car, part of which could be paid to drivers.

Just think about it . . . most cars drive only an hour a day, the rest of the time they’re sitting around as nothing more than a gas can with wheels. Throw in some lithium ion batteries and for the other 95% of the time you have a generator that can not only power your house during blackouts, it can also make you money.

Not to mention, with wind-generated electricity powering these vehicles, there would be absolutely no emissions in most daily commutes.

Stay tuned to Green Chip Stocks for more updates on V2G and the battery companies that are going to make it happen . . .

Keep your hopes in the future but your sense in the present,

Field Palmer