Are Electric Vehicles Destined To Fail?

Electric vehicles failed in the early 1900s because of high cost, insufficient battery capacity and short range.

Will these factors cause them to fail again?

The early signs are not encouraging.

The just released IEA Technology Road Map for EVs and PHEVs highlighted the large discrepancy between what governments are predicting in terms of sales, and what manufacturers are forecasting.

Worldwide annual sales in 2020, as predicted by governments, are to reach 6.9 million vehicles, while manufacturers predict sales of only 1.4 million vehicles.

Governments are predicting 5.5 million more sales in 2020 than are manufacturers who know their business.

The IEA is using the higher forecast to encourage governments to invest in infrastructure to support the higher sales volume. They are encouraging governments to build charging stations and provide subsidies to those who buy EVs or PHEVs.

This begs the question: Why should tax-payer dollars be used to subsidize a product that people wouldn’t otherwise purchase?

Another discouraging piece of information found in the IEA Road Map is that the IEA is assuming dramatic reductions in the cost of batteries.

The IEA Road Map estimates that the current cost of batteries is $800 – $1,000 per kWh capacity. Amazingly, the IEA predicts this cost will be cut to $300 per kWh by 2015, i.e., within four years.

While it’s nice to assume that battery costs will drop by over 60%, the IEA Road Map makes no mention of why they will drop.

Actual battery costs between vehicle models will, of course, vary depending on battery size and configuration. The GM Volt has a battery rated at 16 kWh and a cost of around $10,000. The Tesla Roadster, which sells for nearly $130,000, has a battery rated 56 kWh.

It’s impossible to justify purchasing an EV or PHEV on the basis of cost savings. The average family cannot afford to pay an extra $10,000 for their family car – even when SUV versions hit the market. If battery costs come down to the point where a buyer could recover his/her cost in four years, it’s still unlikely the average person would pay the additional money because of the uncertainty surrounding how long he/she would own the vehicle.

Actually, the Boston Consulting Group forecasts it will take six years to recover the extra cost of a PHEV and seven years to recover the extra cost of an EV.

Just as in the early 1900s, high cost may kill the electric car – again.

Essentially, the only people who will buy EVs and PHEVs are environmentalists, first adopters, the elite who can afford a second car and view it as a status symbol, and government bodies that are forced to buy EVs and PHEVs for political reasons.

If this becomes the de facto market, there is little chance that sales volume will ever reach 1,000,000 vehicles in the U.S. by 2015, as stipulated by president Obama.

There are also the infrastructure problems surrounding EVs and PHEVs. These and other issues were covered in detail in a three part series Hidden Costs of PHEVs on November 15th, 17th and 19th of last year.

At the moment, the IEA Technology Road Map for EVs and PHEVs seems to highlight that prospects for these vehicles aren’t bright.

It’s too early to predict the demise of the electric car again, but the news for EVs and PHEVs isn’t good.

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 Additional TSAugust web sites:

www.TSAugust.org

www.carbonfolly.com

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0 Replies to “Are Electric Vehicles Destined To Fail?”

  1. Good analysis. I never see much written about available trunk space in hybrid four doors.
    Also, what is the expected life of the batteries in a hybrid or in a fully electric car?

    Will battery replacement be an additional cost that the second or third purchaser of a used hybrid or electric car be something the buyer must consider?

  2. I’m not sure about trunk space.
    The battery issue is a great question.
    Currently, the expected life of the battery is ten years, however no one really knows.
    I have been trying to arrive at a reasonable expectation for trade in values with the unknown life of the battery.
    Trade in value is another issue that will rear its ugly head in the next year or so.

  3. Donn,

    My county government put in a couple of charging stations about 10 years ago back when they had leased GM’s first version of an all electric vehicle. The charging stations haven’t been in use for many years. Our county government is being a bit more careful with their money these days so they have not purchased any of this generations EV’s.

    Over in the UK their official policy is like CA’s in that they want to move away from fossil fuels to reduce the CO2 load. I found it interesting that a recent study pretty much says a hybrid (vs a plug in or all electric vehicle) is better if lifetime CO2 is used in the analysis. The reference is here- http://www.theaustralian.com.au/news/health-science/electric-cars-may-not-be-so-green-after-all-says-british-study/story-e6frg8y6-1226073103576

    “ELECTRIC cars could produce higher emissions over their lifetimes than petrol equivalents because of the energy consumed in making their batteries, a study has found.”

    “An electric car owner would have to drive at least 129,000km before producing a net saving in CO2. Many electric cars will not travel that far in their lifetime because they typically have a range of less than 145km on a single charge and are unsuitable for long trips. Even those driven 160,000km would save only about a tonne of CO2 over their lifetimes.”

    The actual study can be found here- http://www.lowcvp.org.uk

    Thought you might want the reference for your files.

    • Donn,

      As you would likely assume the American Lung Association is fully in favor of moving our transportation sector to less polluting technologies- yes the smog in LA is really bad. They recently noted their support for the million EV target in the Clean Energy Future plan via a comment noted here- http://www.energy.ca.gov/2011_energypolicy/documents/2011-07-06_workshop/comments/American_Lung_Association_of_California_2011-07-13_TN-61379.pdf.

      Some of the details of the plan can be found here-

      July 6, 2011
      Committee Workshop on the California Clean Energy Future

      Workshop Notice – Comment due date changed to July 20, 2011.
      Workshop Agenda
      Supporting Documentation Last Updated: ( July 1, 2011)

      Presentations Last Updated: ( July 1, 2011)

      Comments Last Updated: ( July 15, 2011)

      My quick review of the plan doesn’t talk to much about measuring the cost to remove a ton a CO2 for anything we are working on…………….. Thought you might like this reference as the public comments are open for another few days

      And yes, PG&E was required by the CPUC to offer a special discounted electical rate for EV owners- rate schedule E9A and E9B.

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