Well, we heard today that there has, in fact, been something in the works. My colleagues Tony Van Alphen and Robert Benzie of the Toronto Star had the scoop: Toyota plans to manufacture its RAV4 Electric model out of its facility in Woodstock, Ontario. This is interesting news, as we know that EV manufacturer Tesla Motors is supplying technology and services — including to the battery system and related components — for the RAV4 EV as part of a $110-million multi-year contract with Toyota. Tesla actually built the prototype electric RAV4 at its own facility in Menlo Park, California.

There was an expectation out there that Toyota would eventually choose to manufacture the RAV4 EV in California. But Toyota’s Woodstock facility in Ontario already makes the gas-powered RAV4, so it made sense to build the electric version there as well. In my blog post last month, I pointed out that $140 million in loans and grants that the Canadian and Ontario governments were giving to Toyota “to upgrade its manufacturing operations in Cambridge and Woodstock” didn’t come with any electric strings attached. Seems some of that money was earmarked for this new venture — I stand corrected, with foot in mouth.

Indeed, I ended my earlier blog post this way: “Wouldn’t it be nice if the Libs, after three years of talk, actually pulled a rabbit out of the hat and delivered on that earlier promise? Perhaps there will be a pre-election surprise, but don’t count on it.”

Well, certainly we could use more good news like this, but consider this a rabbit pulled from a hat — Ontario’s Bugs Bunny moment. Keep ‘em coming.

ANOTHER THOUGHT: How might Tesla Motors, based in Palo Alto, California, feel about the RAV4 electric being built in Ontario? Well, Tesla CEO Elon Musk has close ties to Ontario, as he revealed in this feature I wrote back in October 2009. He did his undergraduate at Queen’s University in Kingston, and met his former wife there. Chatting about the company’s future vehicle line, Musk told me at the time the company would itself give Ontario a serious look as a place to set up manufacturing. “It’s a cool area to do work, and I know the Canadian auto plants are some of the most efficient in North America, so it would be wise for us to take a close look,” he said. I wonder whether this initial commitment from Toyota to manufacture the RAV4 electric in Ontario is poised for greater things. On a conference call today to discuss the release of Tesla’s second-quarter results, Musk hinted that his company’s deal with Toyota could expand “by an order of magnitude” if discussions currently underway between the two companies bear fruit. Something to watch.

He dismissed the fear of “peak lithium,” adding that lithium can be recycled and pointing out that there will likely be a variety of different battery chemistries over the next decades. “People keep saying we’ve used up the whole periodic table on battery composition and that lithium-ion is about as good as it gets. I don’t believe that,” he said. Lutz also expressed hope for the North American manufacturing sector, but only if workers are prepared to “ratchet back” their expectations. “You cannot have a society where everybody has job security, wonderful benefits, high salaries, and then you go to Wal-Mart and buy $19.99 DVD players.” He also conceded that the first generation of the Volt will be more expensive than first expected, but said it won’t be an issue because it will initially appeal mostly to celebrities and other “rich” consumers. “But if we want to generalize the technology the price has to come down.”

Here is a Q&A I ran in the Toronto Star today.

There were a few comments he made that I want to highlight in this post: his opinion of Shai Agassi’s Better Place model; his response to Honda’s criticism of plug-ins based on lithium-ion technology; where solar PV and the Volt cross paths; the challenge of reaching people without easy access to charging infrastructure; how the Volt will cope with cold weather and its impact on the battery; and what could derail an otherwise successful introduction of the vehicle.

Lutz on Better Place

We don’t like it, because our batteries are purpose-built for the vehicle, and we can’t wait for Agassi to make up his mind for what his standardized battery would look like. Frankly, we’d have to be very much assured that all of these connections, the disconnect, the reconnect, and everything, that it all works well without any risk or without any danger.

I’m also somewhat troubled by the situation where a company becomes the equivalent of a cellular provider, and here is Mr. Agassi, who buys the electricity in bulk and resells it to you at a tremendous profit in the form of charged batteries. And he would have to charge a lot, because when you start thinking about the upfront investment in a dense network of charging stations all over the country, and all over every country that he’s talking about, where at each location … he would have a shed full of fully charged batteries… When you think of the expense of the battery pack, times the number of battery packs he’s got to have at each station, times the number of stations he’s got to have to make this whole thing feasible, I don’t see how the business equation could possibly work. Unless he resells it to you at a tremendous mark-up. Which wouldn’t be profiteering. It would basically be recovering his investment cost.

Look, if we were designing electric vehicles to go from New York to L.A., I’d say yeah, that’s the thing we have to do, we have to have batteries that slide out and have battery-changing stations on the main freeway between New York and L.A. and every 100 miles you pull in, pull out the rack, slide in a new rack, and away you go. But that’s not what people are going to use electric vehicles for. We think 80 per cent of Americans drive 40 miles a day or less. That’s who’s going to buy the Volt… I don’t see the role of the electric vehicle being transcontinental-enabled.

Lutz on criticism from the Japanese

I think the reason so many of our Japanese competitors are saying this lithium-ion technology will never work and it’s going to blow up on us… maybe they think we’re going to use the whole battery? In other words that we are 16 kilowatts and are going to use 16 kilowatts and stretch the battery by going to full charge and full discharge, which is very rough on lithium-ion batteries.

Actually, in anticipation of that we designed the battery pack twice as big as it needs to be… We have a 16 kilowatt battery and we use 8 kilowatts, by charging to 80 per cent only and discharging to 30 per cent only. So we’re using this 50 per cent slice of the battery’s capability, and that is the slice where a high-tech battery like lithium-ion breaths very easily.

We think that by not charging it above 80 per cent and not discharging it below 30 per cent, we can get that battery to cycle thousands and thousands of times and last 10 years… It’s the battery’s comfort zone.

Lutz on the charging have-nots

We’re really trying to get a handle on the problem of people who don’t have houses and don’t have garages, like apartment dwellers, condo dwellers, people who park in the street. Right now there’s no solution for them. A partial solution would be to encourage parking deck owners to put in one floor or half a floor that would be reserved for electric vehicles, where there would be metered parking spaces where you can plug in and swipe your credit card.

We have achieved, amazingly enough, with other manufacturers a ‘normed’ plug. We all agree on what the plug is going to look like. The way the parking meter is going to work is it’s going to have a slot, you put your plug in, and the slot will go over the cord and lock when you swipe your credit card, so that nobody can pull your plug out and put theirs in. When you re-swipe it will snap open again and you can withdraw your plug.

Lutz on solar PV

Next year we will have a photovoltaic roof (introduced at the Detroit auto show). It can’t contribute a lot, because the state of photovoltaics itself is not at that point. But here’s what it can do: If you leave your car, say, take it to the airport and the car sits in the airport for a few days in the blazing hot sun, you could get a quarter to a third of a charge off that… And what it can do on a daily basis, when left in the sun in the summer it can power the air conditioning system. So when you get in the car it’s already cooled down, which will save you driving range, because now you won’t have to draw as much energy to cool the car down. The sun will have done that for you. And in the winter, we could reasonably do the reverse, which is use the solar energy for heating the car.

Lutz on the cold

The computer will know how cold it is outside. If the computer determines it’s too cold for the battery to function, the car will simply start on the gasoline engine. It will run on the gasoline engine until the battery is prepped, at which point the gasoline engine konks out and you’re on battery again. Which is what the pure electric vehicle is not going to do.

Lutz on a worst-case scenario

Let us say that over the next 18 months the world goes into a major recession, car sales and fuel use drop dramatically, the steel companies produce less steel and therefore use less energy, China finds it main export markets drying up, so they are into a contraction and use less steel and aluminum and plastic. And at the same time Canadian tar sands come onstream, and coal-to-liquids come onstream. All of a sudden there is a reduction in primary demand in petroleum plus all these additional new supply sources… And the oil barrel drops to $25 a barrel and we’re looking at gas pump prices at $1.25 a gallon. I personally don’t think that’s going to happen, but that would be a dramatic event for the Volt because everybody would say, ‘Ha!, why should I bother?’