Edison allies with GM for electric vehicle.

Utility creates unit to market battery rechargers

SCECorp has formed a subsidiary to market and distribute high-performance rechargers for California's seedling electric vehicle market.

The creation of Edison EV is in line with SCEcorp's mission to expand the infrastructure for electric vehicles, according to officials from the Rosemead-based utility.

One of the Edison EV subsidiary's first ventures will be with General Motors Corp. It will sell and install a recharging device in conjunction with the automotive giant's first commercially marketed electric vehicle, the EV1. That vehicle goes on sale at Saturn dealerships in California and Arizona later this year.

"This will further clean the air in California," said John Bryson, SCE's chairman and CEO.

SCE officials trumpeted its new business last week by showing off the $6,500 gas-pump-like Magne Charge devices at a press conference. Delco Electronics Corp., a GM subsidiary, is the manufacturer.

The 220-volt Magne Charges can recharge the EV1 within three hours, compared to the 15 hours taken by chargers that come with the vehicles and plug into a standard wall outlet. SCE will install Magne Charges at a user's company or residence for an extra fee of at least $500, Wittenberg said.

Edison EV President Diane O. Wittenberg predicted her division - which now has 10 employees - will blossom into a $100-million business within five years.

"It will prove a good return for shareholders," she said.

Although SCEcorp officials have repeatedly said shareholder funds were used to create Edison EV, Wittenberg would not disclose a startup figure for the firm.

Skeptics abound

And despite her optimism about Edison EV's future, analysts expressed deep skepticism that it will be able to overcome how it intends to market Magne Charges to individual consumers.

Also questioned was whether a sizable electric vehicle market can be developed in the face of steep prices and a limited driving range.

"It surprises me that the (sales) projection is that high," said Ronald S. Tanner, who covers SCE for the Baltimore investment bank firm of Legg Mason Wood Walker. "I would say (the market is) way too preliminary to comment on the accuracy of revenue projections, because we have no idea yet whether the car is acceptable."

Also taken to task was Edison EV's intention to sell or lease Magne Charges on terms separate from the finance plans for the vehicles, even though they will be marketed through the dealerships.

"All that does is further complicate things for consumers," said Christopher Cedergren, senior vice president of AutoPacific Group Inc., a Santa Ana-based consulting firm. "They will think, 'I'll have to make two payments for one product that is already inconveniencing me more than a gas-powered car.' From a marketing standpoint, it's not well-conceived."

Selling fuel separately

Wittenberg defended the plan, noting it is similar to selling fuel as a component separate from the vehicle.

But Jesse Snyder, president of Snyder Research, an automotive consulting firm in Moorpark, concurred with Cedergren.

"You may make an argument that that's a separate piece and it's like fuel, but no, it's more like infrastructure," he said. "If the auto industry has learned anything about selling vehicles ... you don't sell the car, work out the financing arrangements, and then add the accessories and options. I think psychologically this will present a barrier for people."

Edison EV does have its supporters. Michael Gage, president of the Calstart electric vehicle consortium, observed rechargers' price will plummet as demand rises, eventually making financing arrangements moot.

"They'll be one-tenth the cost in volume," he said.

But both Snyder and Cedergen believe a far more harrowing obstacle will be convincing consumers to buy electric vehicles in the first place. They believe GM's projected retail price for the EV1 - about $35,000 - and its maximum range of 90 miles between recharges will make it unable to compete in the automotive marketplace. GM projects annual sales of less than 5,000 units, a fraction of individual combustion engine models.

"It's just way too premature to market electric vehicles unless they come down in price and can match gasoline-powered vehicles for performance," Cedergren said.