Electric vehicles will face stiff competition from eco-friendly gasoline-powered cars

Popular notions that electric cars will suddenly replace conventional gasoline-powered cars don’t acknowledge the possibility that there could be eco-friendly advances in conventional car technology. A study by the Boston Consulting Group (BCG) finds that “internal combustion engines are improving their ability to cut CO2 emissions at a lower cost than expected, and, as a result, carmakers should be able to meet 2020 emissions targets mainly through improvements to conventional technologies.”

A key word there is should. It would take a concerted effort by automakers in several technical areas.

Internal-combustion-engine (ICE) technologies offer the potential to cut tailpipe emissions of carbon dioxide by approximately 40% at a cost to consumers of $50 to $60 per percentage point of reduction for an average passenger car — roughly half the cost of what was expected three years ago. But original equipment manufacturers will need to pull multiple levers simultaneously to achieve such dramatic reductions. Modifications to combustion technologies, transmissions, vehicle mass, aerodynamics, and power management will all be necessary.

It’s clear that we’ll have mix of electric and gasoline-powered cars for a long time; BCG’s study says that “conventional technologies will pose stiff competition for electric vehicles (EVs).” But the research also found that there is a distinct “green” consumer segment that will be willing to pay a significant premium of $4,500 to $6,000 for EVs, even if the total cost of ownership is higher. These consumers represent 13% of consumers in China, 9% of those in Europe and 6% of those in the U.S.

Four emerging risks for corporations

The Corporate Executive Board’s “Risk Integration Strategy Council (RISC)” has released the January 2011 “Emerging Risks Update,” (pdf) noting the following risks on the horizon for enterprise risk managers:

Leaks of sensitive corporate information like strategic planning documents or embarrassing memos (think Wikileaks, which is on its way to becoming a verb, like Google). Strategy: Bolster information security, especially as “new technologies and platforms like cloud computing, SaaS, and social networking gain prominence.”

Shortage of rare earth minerals, an essential component of clean energy technology, computers and electronics (e.g., mobile phones). China controls 97%. Strategy: Other countries (including the U.S.) with deposits of rare earth minerals can open or re-open their mines, “but it can take up to [10] years for a new mine to begin operations.” Meanwhile, “world leaders” must discourage China from unfairly exploiting its position.

Breakup of the euro zone. Sovereign debt crises, reluctant bailouts and the fear of contagion has led some to question the wisdom of sharing a currency with their delinquent neighbors. Strategy: “If one of the (or a few) prominent members bolts out of the league, it could spell disaster for [the euro] as a currency and create bigger problems for the world economy at large. Companies need to assess the impact of this possible scenario and develop mitigation strategies accordingly.”

Fraud in emerging markets. As more companies move into emerging economies like China, India and Brazil, they face “the menace of fraud or corruption.” Strategy: “Develop effective anti-fraud and anti-corruption controls and procedures in your company. Establish a secure whistleblower policy [that] encourages employees to report instances of fraud. You may need to staff your internal audit teams with people who are more conversant with the specific types of fraud committed in these geographies.”

17 questions to ask about that gee-whiz tech development

Science-fiction author David Brin explains his method of examining the future:

“The top method is simply to stay keenly attuned to trends in the laboratories and research centres around the world, taking note of even things that seem impractical or useless,” says Brin. “You then ask yourself: ‘What if they found a way to do that thing ten thousand times as quickly/powerfully/well? What if someone weaponised it? Monopolised it? Or commercialised it, enabling millions of people to do this new thing, routinely? What would society look like, if everybody took this new thing for granted?’”

Those are good questions, as far as they go. My methodology for examining new developments (especially technologies) is to ask additional questions, some with a decidedly negative slant:

• What if it runs into legal or political problems?
• What if it can be used by criminals?
• What if it raises ethical or religious objections?
• What if people prefer doing it the “old way”?
• What if a cheaper alternative overtakes it?
• What if it’s too expensive to make or distribute (in volume)?
• What if it lacks the necessary ecosystem or support infrastructure?
• What if it runs smack into a counter-trend?
• What if entrenched interests squelch it?
• What if it has unintended consequences?
• What if the roll-out is botched, glitchy, underfunded, embarrassing?

And, when will it emerge from the Hype Cycle‘s “peak of inflated expectations” and “trough of disillusionment”?