Felix Kramer, the founder of the California Cars Initiative, a Palo Alto CA based nonprofit, has an opinion or overview or criticism on the widely held views on battery technology that’s being applied to electric vehicles.  It’s a long one available at GreenChipStocks.com. For you I’m going to review it, check some bits and opinionate on it myself.

First off lets keep in mind Mr. Kramer’s view or bias.  Without doubt he’s intensely pro electric vehicle, and that’s fine coming in knowing that.  On the other hand his perspective offers what is for this writer and likely you is to see the driving forces and the very fast moving technology progress.

Kramer’s point is to rebut the National Research Council’s (NRC) fuel cell analyst team allegation (a $30 pdf download) it would be a mistake to commit to plug-in vehicles because battery costs will remain high for over a decade. The report has gained wide attention, reported across the press and media.  Then on the same day that GM opened its new Michigan battery plant, the Boston Consulting Group (BCG) released a study ( a free pdf so far) saying it would take decades for plug-ins to become competitive without subsidies.  These two studies set off Kramer’s response.

Kramer is correct thinking the bureaucratic and academic studies are relevant to the pubic perspective and government process.  Yet battery and auto manufacturers are spending tens of billions of dollars on factories to support over a dozen new plug-in vehicle models they see as a long-term path to low-cost, competitive components.  Something is amiss, the naysaying vs. tens of billions in investment simply can’t be matched up.

The nexus is in the produced costs for EV battery costs.  The NRC report says today’s EV battery packs can cost well over $1,000/kilowatt-hour. They see it taking 10 years for packs to drop from $1,000+ to the $400/kwh necessary to make unsubsidized EVs and PHEVs competitive. Even by 2030, the NRC says the battery premium for a GM Volt-like PHEV with a 40-mile range would still be over $10,000.  With the obvious threat that governments will stop providing the $5-$10,000 subsidies necessary to sell cars with $15-$20,00 packs, the NRC concludes only a “battery breakthrough” or a quintupling of oil prices will motivate consumers to buy plug-ins.

This is where Kramer shines, five critical inputs are listed.  The reports . . . “limit expected price reductions to the low rate expected for already-high-volume and already-cheap laptop and mobile phone battery cells. They don’t evaluate PHEVs with 10 or 20 mile ranges, which have much smaller batteries and very different economics than PHEV-40s and all-electric vehicles. They don’t count the cost savings from an all-electric vehicle not including an internal combustion engine. And they don’t factor in the likelihood of an eventual cost to emit carbon – already an assumption in much corporate long-range planning. Finally — and fundamentally — they don’t follow standard research procedures used in similar studies to document their cost assumptions, look at cost sensitivities or conduct a bottoms-up cost model. Add in all these flaws and ignore the results and reports below, and we can see why they forecast EV and PHEV sales totaling a few million by 2020 — instead of the tens of millions that automakers already plan to build and expect drivers to buy.”

The five input criticisms are valid.  Leaving out an engine, transmission and the equipment to use them is a major part of the cost in building cars – one is hard pressed to imagine that those effects are not factored in.  Battery choices for total storage are going to vary greatly with a vast array of inputs to decide what amount of storage to load aboard.  One hopes that manufactures will leave optional space and connection facilities.  The carbon cost element is going to come, cap and trade, tax or just energy pricing itself with the inevitable peaks and valleys is going to drive electric vehicle sales.  The notation that not following standard research procedures don’t surprise as much as add to the disappointment closing in on the science profession led by the global warming campaign.

The fifth input criticism is the most notorious.  It’s hard to get battery pack pricing data. Most batteries sell at dramatically high retail prices, but manufacturer’s pricing forecasts are for cells or packs in large volumes to potential automotive customers. Since automotive batteries are not yet mature products, price and performance continually evolve. With such competitive pressures and rapid-fire changes, researchers and even governments are often left with incomplete, inconsistent, out-of-date, or even erroneous price data.

Following on the price thread Kramer presses to get pricing data out of battery manufacturers – good luck on that – which would help disabuse the bureaucracies, media, and press of the current popular prognosis.

But the meat is in the quotes Kramer has found. One is from AutoGreenBlog speaking with GM representatives, “ . . . the study cites a current cost of $1,000-1,200 per kWh for automotive lithium ion batteries. That figure may be as much double the actual cost if General Motors is to be believed. When we spoke with Denise Grey and Jon Lauckner from GM this week they both hinted that the Volt battery was actually in the $500-600/kWh range now and they expect this number to drop.”  Continuing, “ . . . GM is working closely with suppliers to cost optimize all of the pack’s components and hopes to hit the US Advanced Battery Consortium target of $300/kWh by 2015.”

The second is with Nissan’s Carlos Ghosn who expects costs to fall fast. Nissan has teamed up with Sumitomo Corp. to sell the used batteries that can no longer withstand automotive requirements but can store power for utilities, thus effectively bringing down battery prices for the consumer. In that scenario you’d lease rather than own the battery set.

Kramer adds a paragraph from the Argonne National Lab that looks to prices going down to $210/kWh.  The paper is from way back in May 2009. The odd thing is the NRC report notes laptop and cell phone cells have become commodities selling at fairly stable prices as low as $200/kWh.  He notes other comments from Argonne personnel, the California Air Resources Board, and the Electric Power Research Institute.

Kramer winds up calling for more information from battery manufacturers.  Unless you’re a creditable buyer, no hope there.  But clues remain from the prices for computers, cell phone and others that demonstrate cell prices can fall way down when standardized and smart engineering fit and connect the cells into battery packs.   The auto manufacturers have huge influence on costs, both from the pre engineering and the construction choices.

Suppose the laptop computer suggestions can run true at $200 per kWhr for EVs.  Two hundred dollars times forty kWh is still $8000.00.  But a no engine no transmission etc EV might well price at a strong incentive to buyers.  Cut the kWh to 20 or less and a manufacturer could look into fuel cells or small charging engines with the $4000 in battery savings in a straight comparison.  Consider ultra capacitors and the picture gets very cloudy over a bright sun.

It’s going to be about what you want to buy.  And a certainty is the manufacturers are going all out to get that for you.  They’ve already spent billions by the tens and much much more is going to get spent.  You’re going to get that EV – and it might be sooner than you think – one day you’ll get one whether you want one or not.


3 Comments so far

  1. russ on January 21, 2010 7:43 AM

    Let the poor guy get off his rant – it is meaningless!

    Forget all the factoring – even at 500 USD per kWh batteries are too expensive. Especially if the subsidies go away!

  2. Matt on January 22, 2010 12:15 PM

    i already pay ~US$400/kwh. and thats just for a single car battery (~20kwh) or enough for 100 miles range.

    i know that if you are ordering batteries for dozens of cars you can get LiFePO4 (which last longer than the laptop batteries mentioned in this article, and are already large format) the price is already ~US$350/kwh.

    the batteries that cost ~US$600/kwh are either for very high powered EVs, or those with very short range.


  3. Peugeot Automotive Marque on January 23, 2010 3:02 AM

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