THE ELECTRIC CAR--quiet, fast and clean--has captured some media attention since the release of the sleek Tesla Roadster 18 months ago. But it's not a new idea. Some of the first cars ever built, going back to the 19th century, were battery-powered. And the contemporary push to break away from the internal combustion engine dates back more than 40 years.

The Electric Auto Association, a national club, was founded in San Jose in 1967 by a bunch of Lockheed engineers. Today it is still a going concern with chapters throughout the world, including one in Aptos, furthering its mission "to encourage experimentation in the building of electric vehicles, particularly to improve energy and resource efficiency, reduce emissions and improve vehicle safety." For most of its 42 years, the club has served as a clearinghouse for hobbyists and small entrepreneurs who use a variety of kits to convert gasoline-powered vehicles to EVs.

Club member Mike Brown has been at it from the beginning. A longtime Volkswagen mechanic, Brown built his first electric vehicle in 1979: a FiberFab Aztec kit car on a VW Beetle chassis. Then he started experimenting, converting Porsches, other kit cars and, finally, his biggest success--a VW Rabbit he named the "Voltsrabbit." He founded his own company, Electro Automotive, in 1981. In 1989, he and his partner Shari Prange published the book Convert It, which still circulates in electric-car culture.

Since that time, Brown, who lives and works in Bonny Doon, may have been responsible for the production of more electric cars than any other company. By his own estimation, there are something like 2,500 cars on the road today running Electro Automotive conversions. Beneath the hood of each, a bank of batteries supply power to a series-wound DC motor, which feeds the power through a gearbox straight to the drive wheels. Several times a week, working from his little shop in the Santa Cruz Mountains, Brown ships kits to owners of Rabbits, Porsche 914s or, recently, the Beck's Spider, a cool little reproduction kit-car modeled after a 1965 Porsche.

During the time that Brown has been retrofitting hundreds of vehicles to run on an electric power source, many car companies, including the Big Three, have experimented with building EVs from scratch. So far, none have really succeeded. GM's EV1, built from 1996 to 1999, was popular with its small band of owners, but ultimately the company killed the model, recalled all of the cars and crushed them.

Toyota went a different route--more like Brown's--converting its own mini-SUV, the RAV4, to run on an electric motor. In production from 1997 to 2003, the model was discontinued with little fanfare.

The big manufacturers' failure to launch a viable plug-in vehicle prompted the 2006 documentary Who Killed the Electric Car?, but rumors of the EV's demise have been greatly exaggerated. Over the hill from Brown's shop, the germ of a new clean automotive industry is sprouting from the same matrix that yielded the semiconductor and the network router. Electric cars are alive and well, and Silicon Valley is the reason why.

Fancy Amps
For Silicon Valley's passionate car lovers, Club Auto Sport is a combination country club, museum and temple. Its showroom is filled with some of the most beautiful, powerful and expensive automobiles ever made.

On a recent Saturday afternoon, a rare Porsche Carrera GT sat alongside an even rarer Ford GT40 race car. The Porsche, flat-black and still recognizable as a Carrera despite a bulge behind the rear windshield housing a 10-cylinder, 612-horsepower rear-mounted engine, is one of the fastest production cars ever made, capable of traveling from zero to 60 mph in under four seconds. It was priced at a bargain $325,000. The GT40, built in 1965, was the machine that reasserted American automotive technological dominance in the Le Mans circuit--a Ferrari killer. More than 40 years old, it still does a sub-four-second zero to 60 and typically sells for around $150,000.

Down the hall from the showroom, in a tiny garage stall that's part of a business incubator, sits a small two-seater that, when finished in a few weeks, will be able to beat both cars off the line. The car is being built by the one-man startup company Saba Motors and is designed to sell for $40,000.

The Saba Spider is a sharp-looking roadster, but it looks nowhere near as impressive or intimidating as the two vehicles that it will one day be able to blow away. That's because the Spider is a different kind of car. With an aluminum frame, carbon-fiber body and other proprietary technologies I am not supposed to mention, the car weighs about as much as an old Schwinn beach cruiser. But what really makes the car fast is that the Saba is electric, driven by a motor about the size of a 3-gallon pail, powered by a bank of Thundersky lithium batteries.

Simon Saba, software engineer by day, revolutionary automotive designer at night and on weekends, is building the car because he believes he is living in a unique moment in history.

"There is a perfect storm happening right now," he says. "For one thing, technologies have evolved to make something like this possible. At the same time, the Obama administration has stepped up and declared its commitment to green technology and is putting money behind that commitment. Private VC money is also becoming available. And meanwhile, the old automotive companies are nearly bankrupt.

"Right now, there is a level playing field. We're living through a time like the 1920s, when there were 100 car companies. And I believe that I have as much chance as anybody to design the car and launch the company that succeeds."

Saba's strategy is simple--to dispel what he calls the two myths of electric cars--"that they're slow and that they're ugly."

To accomplish this, he decided to build a high-performance sports car rather than a glorified golf cart. He has run scores of calculations plotting curb weight, rolling resistance coefficient, drag coefficient, air density and other metrics, and experimented with various materials and off-the-shelf devices. "Efficiency," he says, "equals power."

Saba's primary goal is to win the X Prize, an international competition "designed to inspire a new generation of viable, super-fuel-efficient vehicles." The contest, set up a by a nonprofit and funded by the Progressive Insurance Company, involves designing, building and bringing to market 100 MPGe (miles-per-gallon energy equivalent) vehicles "that people want to buy and that meet market needs for price, size, capability, safety and performance." More than 100 teams have entered the competition for three prizes totaling $10 million.

Saba believes his lack of automotive experience and expertise gives him an edge on the competition. "Automotive engineers are looking for ways to rebuild vehicles that already exist. I'm looking for brand-new ways to solve the problem," he says.

Saba's confidence does not appear to be too misplaced. A month ago, he attended Gov. Arnold Schwarzenegger's Global Climate Summit at the invitation of EPA chief Lisa Jackson. He proudly shows off photos of himself talking to Schwarzenegger and Jackson, who visited his display booth for 15 minutes.

While he has not spent a lot of time yet actively seeking any government assistance or even venture capital--focusing instead on building his prototype--Saba has indeed entered a fertile field. In the past 12 months, green technology in general and automotive tech in particular have become the fastest-growing sectors of the American economy.

In August, the Department of Energy dispersed $2.4 billion in grants to companies to spur green development in the automotive field. While most of that went to the rust-belt states where the recession has hit the hardest, two California companies--Tesla and Fisker--received $465 million and $528.7 million, respectively.

But the government money is the tip of the iceberg. The real money is in the private sector, where the prospect of a new, sustainable automotive industry has already sparked a gold rush.

Driven to Change
Steve Jurvetson, a partner in the Sand Hill Road venture-capital fund Draper Fisher Jurvetson, is heavily invested in the clean-tech revolution. His company, one of the iconic investment firms to emerge from the Internet boom, has funded startups from Hotmail to Ooma, and made a strong move into the green sector several years ago. With holdings in companies including Brightsource Energy, a builder of solar power plants, DFJ is banking on a renewable future.

One of the firm's most high-profile clients is Tesla Automotive, the San Carlos-based builder of the media-darling Tesla Roadster. Jurvetson also drives a Tesla--one of the first 20 ever built--and sits on the company's board of directors.

He says the potential offered by the new breed of nonpolluting vehicles cannot be exaggerated. "It's one of the largest opportunities we've ever looked at," he says.

Jurvetson points out that the prospect of a new green automotive industry opens up to competition not only the entire automotive transportation industry but also the multibillion-dollar petrochemical industry.

"It's a trillion-dollar market," Jurvetson says. "We have never seen a market of this size. The whole [information technology] market was a few hundred billion. This--it's kind of mind-bending."

Jurvetson has seen plenty of evidence that this is not just a pipe dream. Brightsource, which his company backed in its early stages, just inked a $10 billion solar deal.

What was until recently a dream held by many environmentalists and some forward-thinking scientists has, in just the past couple of years, turned into money. That's good for DFJ's startups--and good for Silicon Valley.

"Startups do well in markets where there's been a disruption--when something changes in the market," Jurvetson says. "In a stable market, the big get bigger, and the little startups don't have much of a chance."

The recent disruptions have included skyrocketing oil prices and much bigger forces, from terrorism to global climate change. Other changes are the new administration in Washington, D.C., and the resultant changes in the regulatory landscape.

Much of the action is focused on Silicon Valley. But confronted with the question of whether Silicon Valley is set to become the next Detroit, Jurvetson says that's the wrong question.

"My first reaction is that I don't think Detroit is a good role model," he says. "Silicon Valley is going to do what Silicon Valley does. We will do what we did with IT, in the way that Silicon Valley uniquely can. This is going to be something completely different, in a completely different space, that becomes a substitute for what came before."

Jurvetson credits the explosion in the alternative-vehicle market to more than an accident of history. He says "engineering and design elegance," combined with business innovations, have forced the change.

He points to Tesla's sales strategy, which dispenses with independent dealers, allowing Tesla to sell directly to consumers and "control the brand experience."

"We can talk about selling in a whole new way," Jurvetson says, "which only really makes sense because this car has a lot of caché."

A more significant business innovation is the one that allowed Tesla co-founder Elon Musk to start a car company without having hundreds of millions of dollars on day one.

Tesla was able to do that by building its Roadster around the guts of a Lotus Elise. "With this, [Musk] isn't just selling a dream," Jurvetson says.

He contrasts this business model with the old way. Henry Ford, he points out, owned everything that went into the production and sales of his cars, from rubber plantations to dealerships. "That's a staggeringly expensive way to build a car company," Jurvetson says.

While Detroit automakers and other upstarts were building mostly variations on the golf cart, Musk and his team decided to build a high-performance vehicle and to work with an established, but smallish, auto builder.

The effort paid off. With its Roadster, Tesla was first to market--and delivered a product that has impressed everyone who's driven or even seen it.

"It's a singular experience," Jurvetson says. "The sheer acceleration--it's like being shot out of a rail gun. I used to tell people, 'Zero to 60 in under four seconds' and watch their eyes glaze over. Now I just say, 'It goes like a bat out of hell.'"

Future Fast
To start the Tesla Roadster, you push a button in the middle of the console. Press D, and the one-speed transmission is engaged. At a standstill, the car is silent. Step on the accelerator and it makes a high-pitched, rapidly modulating whine. It's a very cool sound--like the sound spaceships make in sci-fi movies.

Slip out onto the road and press hard on the pedal, and the whine modulates very rapidly until the car is emitting a nice soft scream. At that point, the car is probably doing 80 mph--and not even straining.

The Tesla Roadster is explosively fast. It can go from a cold stop to 60 miles per hour in about the time it took you to read this sentence. It is unlike anything on the road.

As a former mechanic, I have driven some fast cars. I worked for years in a shop that serviced Porsches. We had a customer with a race-tuned Carrera; on several occasions, I drove that Carrera 160 mph. The Tesla would kick that Carrera's ass off the line.

Mike Falcone, a salesman at the dealership in Menlo Park, knows about fast cars, too. His personal car is a 1969 Pontiac GTO with a 400-cubic-inch V-8 and a four-barrel carb. On our test drive, I asked him how the two cars compared. He just laughed.

The stretch of Sand Hill Road that runs from El Camino Real to Highway 280 is 2.6 miles long and has six stoplights. Between each of those stoplights, I took the Tesla straight up to 80 and then, out of prudence, backed off. Each time, it felt remarkable.

I noticed something else I liked about the car--because it uses regenerative braking, the Tesla slows itself down immediately when your foot comes off the accelerator, as the motor draws energy. This is done in the name of efficiency, but as it happens, it makes for a better driving experience. Without the driver stepping on the brake, the car will slow itself to from 80 mph to 3 mph, quickly and smoothly.

At the 280 onramp, things got really fun. The Tesla's front end and suspension are 100 percent Lotus Elise. That means old-school unassisted rack and pinion. Which means you can literally feel the road in your hands--none of that power-steering mush. The heavy battery pack is located in the center of the car, giving the Roadster 60-40 weight distribution--a good thing--and the motor and tranny are located just behind the rear wheels, which causes the vehicle to dig in hard under acceleration. And the thing about explosive acceleration is that it, too, just plain feels good.

On the cloverleaf Sand Hill Road onramp, I couldn't help but let out a shout. Falcone, my co-pilot, said, "All clear," and I jetted out over to the fast lane and hit 100-something in no time at all. By the time I gathered myself enough to look in the rear-view mirror, I saw nothing but empty road with a bunch of BMWs and big Mercedes in the distance.

"In the Tesla, you end up driving alone a lot," Falcone said. "Nobody can keep up with you."

Feeling a professional obligation to put the car through its paces, I exited at Alpine Road and headed up into Portola Valley. This is the kind of road the Lotus chassis was designed for, and the Tesla loved it, exploding through the gentle curves. But when I checked the rear-view again, I was surprised and then doubly surprised: there was a car just off my back bumper; it was another Tesla.

The driver was grinning and waving through his windshield, and I waved him over. We pulled into a turnout. Matt Devin, on a Sunday drive with his daughter, seemed elated. This, I thought to myself, is the look of a man who owns a highly efficient, ecologically responsible automobile. The look on his face told me that this is the kind of thing that could save the world from the polluting death-grip of the gasoline-powered automotive-petrochemical complex. Assuming an electric car will be brought to market for significantly less than the Roadster's $109,000 price tag.

On the way back down Sand Hill Road, another fortunate event: at a stoplight just west of the Stanford Shopping Mall, I looked to my right, and sitting there was a new Corvette. I honked the horn. The driver, a handsome woman in a golf cap, turned to us with a grin and asked: "What've you got in there?"

"A battery and a little electric motor."

Pointing at the road ahead, I asked the time-honored question: "Wanna run?"

She kept grinning. "Sure."

The light turned green. It was over in a hurry.

Selling a Dream
When Tom Price learned that Henrik Fisker was getting into electric cars, he took notice. He knew Fisker as one of the world's leading designers of luxury coaches, the man who had designed the BMW Z8 and the Aston Martin DB9, two of the most beautiful cars to hit the road in the past couple of decades.

Price was ideally positioned to win the first Fisker dealership in Northern California, which is set to open in Sunnyvale next year. Price owns Toyota of Sunnyvale, which is the nation's second-biggest Prius dealer, so he has a firsthand knowledge of what "green" can mean to the bottom line. He also owns Marin Luxury Cars in Corte Madera, one of the region's top sellers of Aston Martins.

"The more I learned about the car and how it was put together," Price says, "the more comfortable I became."

Price is speaking of the Fisker Karma, which is poised to be the first plug-in hybrid luxury sedan to hit the market. Fisker himself designed the car's body. Almost everything else in the vehicle has been subcontracted out to experienced manufacturers. The power train is being built by Quantum, a Southern California-based manufacturer of fuel cells and fuel systems. The interior is being built by Magna Steyr, a Toronto-based global supplier. Almost every component in the car is being built by a similarly well established company.

In the end, the pieces will be shipped to Finland, where they'll be assembled by Valmet Automotive--the company that assembles the Boxster and Cayman for Porsche. "It's easy to have confidence in the vehicle, knowing all of these vendors," Price says.

Price is equally confident the car will sell.

"When we had it here," Price says, "we showed the car to friends and asked them what they figured the price would be. Most said $200,000." The Karma will retail for $87,500. Subtract out the federal rebate of $7,500 and, the way Price figures it, the car is competitive with the Audi A8, Jaguar XJ and Mercedes-Benz S-Class.

Like Tesla, Fisker has attracted serious money from Silicon Valley investors. The giant of Sand Hill Road, Kleiner Perkins Caufield & Byers, has made Fisker one of the pillars of its spectacularly ambitious "Greentech" fund, which is managed by a team including KPCB partner and former Vice President Al Gore. Gore is slated to get one of the first Karmas to roll off the production line.

And as this article goes to press, current Vice President Joe Biden is expected to announce that a shuttered GM plant in his home state of Delaware will be retrofitted to build Fisker's upcoming midpriced mystery car, code-named "project Nina."

Not much is known about the Nina, but unlike the Tesla, the Fisker Karma is a hybrid, running a 2.0-liter four-cylinder gasoline engine that generates power for its patented "Q-Drive" electric motor. The combination produces more than 400 total horsepower; the car has tested 0-60 in under six seconds. Not as fast as the Tesla Roadster, but then it seats five. And unlike other hybrids on the road today, the Karma offers a plug-in option. It can travel up to 50 miles before the charging motor kicks in.

Price has driven the car and believes he'll have no trouble convincing some high-end car buyers to give up their big Euro-sedans.

"I don't think you sacrifice anything in terms of agility or power," Price says. "There's a solar panel on the roof, so you don't have a sun roof. But that's probably about it."

Tesla, meanwhile, is also preparing to enter the luxury sedan market, albeit at a significantly lower price point. The Tesla Model S, an equally stunning, nicely appointed five-plus-two-seater, is scheduled to ship in late 2011.

It was Tesla's Elon Musk, in fact, who gave Henrik Fisker the idea that the time of the plug-in automobile has arrived. Musk hired Fisker to design Tesla's first sedan, which at the time was code-named WhiteStar. (After a year or so, Fisker quit and was followed out the door by a lawsuit charging him with theft of proprietary information. Fisker announced plans to start his own company some time later; the lawsuit was decided in his favor.)

The Model S differs from the Karma in a couple of ways. First, the Model S is fully electric. Second, it's priced $20,000 less than the Fisker. After the $7,500 tax break, the Model S will start at $49,900. Not exactly a "Tesla for the rest of us," but it does represent a big step toward the time when electric cars will be commonplace, because it will come equipped with a battery that can be swapped out in five minutes. That would make driving a Model S about as convenient as driving a gas-powered car.

All that remains is to build a vast network of charging spots and battery swap-out stations. And another Silicon Valley company is well on the way toward achieving that ambitious goal.

The Big Idea
At the World Economic Forum in 2005, Klaus Schwab, the founder of the international organization that has gathered business, political and intellectual leaders in Davos, Switzerland every year since 1971, posed a question: "What's the most important thing you could do to make the world a better place by 2020?"

Shai Agassi, who had been invited to attend the event as one of the inaugural class of Young Global Leaders, was part of a working group assigned to look at climate change. A 37-year-old engineer and entrepreneur, Agassi was on the board of directors of SAP, the German-based software development firm, and had come to be interested in the problem of global warming. Agassi led his team to the conclusion that gasoline-powered cars were the biggest threat to the planet, and--because of their vast numbers--the most difficult problem to solve.

After returning to his job in California, Agassi produced a succinct nine-page white paper on the subject. It contained an argument for building national-scale infrastructures to support mass adoption of electric cars and a blueprint for making it happen.

The piece took as a given that the era of oil is ending. It called for large-scale solar energy plants sending energy to the batteries of electric cars via an "intelligent Electric Recharge Grid (ERG)" using hardware and software to connect utilities, charging stations and drivers. Driving itself wouldn't change much. A ubiquitous infrastructure would allow cars to charge up when parked. The main difference would come on long trips. When out of juice, drivers would pull into exchange stations where they would get into automated lanes, as in a car wash, and have their empty battery swapped out for a full one.

"We for the first time look at the car battery as part of the infrastructure system, not part of the car," he wrote, "much like the SIM card inside a cell phone is part of the network infrastructure which is residing inside the phone."

Conditions were ripe to make the change, he argued. At the time he was writing, the cost of new-generation lithium iron phosphate batteries was starting to drop. For the first time, Agassi reported, the total cost of energy for electric transportation had crossed under the cost of fossil fuel.

The "cross-under point" had gone almost unnoticed in the world of automotive design, which was focused on the hybrid-car race. Yet, Agassi concluded, its effect would result in "the most disruptive economic shift ever experienced in history."

He devoted some effort in his white paper to demonstrating that his idea would make money. A lot of it. Fuel at the pump represents a market of $1.5 trillion every year. Cars and components add up to roughly the same amount: $1.5 trillion a year. He predicted that clean electricity generation for cars will reach $150 billion a year.

The construction of the grid--the ERG--was projected at $500 billion. Battery manufacturing will reach similar levels of $500 billion a year. Carbon credits alone will be worth roughly $300 billion when all cars are driven on clean electricity.

"In the aggregate, we are looking at an annual dislocation reaching roughly $6T a year," Agassi wrote.

Keep in mind: Agassi was putting this idea together in his spare time, while he was running the 10,000-member engineering team for a big multinational corporation. He seems to have written the paper for the sheer joy of solving a hugely perplexing problem, or as an act of global community service.

"Regardless of who wins or loses economically, there is one sure winner--the sustainability of our planet and humanity," he concluded. "If we desire to sustain the planet and our current way of living, we stand in front of a decision that has no alternative.... The time is now, and the change is already in motion. In the words of Lee Iacocca, 'It's time to lead, follow or get out of the way.'"

The Big Money
Agassi delivered his white paper to the World Economic Forum in 2007, two years after he had begun investigating Klaus Schwab's question. According to Sidney Goodman, VP of Automotive Alliances for the Palo Alto-based Better Place, at the time Agassi was next in line for the top job at SAP and was not very interested in starting the company that would build the grid he was envisioning.

Ultimately, it was Shimon Peres, the former prime minister of Israel, who convinced him otherwise.

"Shai was hoping to pass the idea along to a government, hoping they would take up the challenge," Goodman reports. And Peres was interested.

He issued Agassi two challenges. One: Get a buy-in from a major car company (known in the biz as an original equipment manufacturer, or OEM). Two: Get the money.

Agassi wasted no time. He brought in Carlos Ghosn, president of the Renault-Nissan alliance, one of the world's top five carmakers.

Goodman says Renault-Nissan "differs from any other OEM in the market" in its interest in plug-in cars. "They decided quickly that there was a strategy fit--and said, 'Let's do it.'"

In October 2007, Project Better Place was launched. Agassi had also met condition No. 2--he had raised $200 million, from VantagePoint--another big Silicon Valley VC firm--as well as from Israel Corp., Morgan Stanley and a smaller group of private investors. The deal has been called one of the largest and fastest seed rounds in history.

Meanwhile, Peres had taken the idea to then-Israeli prime minister Ehud Olmert. Strings were pulled, deals were made, and in two years Better Place will have its infrastructure in place and Renault will have its fleet of cars ready for delivery.

"We already have metal in the ground," Goodman reports. More than 1,000 charging stations have been put together in several Israeli cities. Later in 2011, the same thing will happen in Denmark. Australia will follow in 2012. And then: California.

In April 2008, Deutsche Bank analysts concluded that the company's approach could be a "paradigm shift" that causes "massive disruption" to the auto industry, and which has "the potential to eliminate the gasoline engine altogether."

The head-spinning speed at which this idea has caught on certainly accounts for the fact that most Americans are practically unaware that such a radical power shift could be in the offing.

There is one curious fact, again from Agassi's white paper, that makes the transition seem almost inevitable--even before the dozens of required solar power plants are built.

Every energy-generating plant and grid system produces excess power capacity, called "active reserve." This is used to guarantee immediate availability of power in demand spikes. The active reserve is usually wasted, as power stations have no ability to store it.

According to Agassi, the active reserve alone could power more than a third of the cars in developed countries. "The smart recharge grid provides a 'distributed storage facility,'" he writes. "Taking the concept one step further, the cars and batteries can even feed back electricity to the grid."

Steve Jurvetson offers another piece of evidence that this dream is real. He points to the fact that many of the most talented young engineers, bankers and other professionals are being drawn into the clean-energy sector. He attributes this to something fundamental.

"It just feels good to know you're part of a significant change," he says. "For young people just out of college, they get to feel like they're contributing something important to the world.

"For those of us who have been around a while, for the first time, our kids think we're cool."

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