September 16, 2011
Rapid EV Battery Cost Declines Not Realistic?

The great hope for electric vehicles (EVs) is for a rapid decline in the costs of batteries. An article in the Pro section of the Wall Street Journal reports on skepticism from the US National Academies of Science and Toyota that a rapid battery cost decline is possible. Recommend you read in full if you are seriously interested in the debate about the prospects for EV battery costs.

The Academies and Toyota Motor Corp. have publicly said they don't think the Department of Energy goals are achievable and that cost reductions are likely to be far lower. It likely will be 20 years before costs fall 50%—not the three or so years the DOE projects for an even greater reduction—according to an Academies council studying battery costs. The council was made up of nearly a dozen researchers in the battery field.

Even in lithium batteries other minerals make up a substantial portion of total costs. So just cheaper manufacturing will only go so far. On the other hand, costs of copper or cobalt or other minerals are kind of like once-in-a-lifetime costs for car buyers because at the end of a battery's useful life it can be recycled to extract out the most valuable minerals. So the trade-in value of an old battery will partially offset the cost of a replacement battery.

While Johnson Controls claims they can cut battery costs by 50% in the next 5 years they probably aren't the low cost leader. So 50% off their current (unrevealed) costs might be much less than 50% off the cheapest current producer. It is noteworthy that GM has given electric vehicle battery production contracts to two companies, neither of which is Johnson Controls.

If the National Academies council is correct then this does not bode well for our ability to adjust to Peak Oil. The Nissan Leaf's battery costs $15,600 according the article. The range varies greatly. In the US EPA range test it went 73 miles with very hot and cold weather cutting into range. Turn off the AC or heater, keep your speed down and 100 miles or higher range become achievable, at least in moderate temperatures. At the latter link note that Ford will include active heating and cooling of their Focus EV battery to enable it to maintain a higher range in winter and summer. So 100 miles range in a compact EV might be possible with a battery that is in the $15k price range.

Suppose 100 miles from a $15k battery becomes possible in the next couple of years. Well, one way to get to work when oil hits $200 per barrel would be to trade off range to save money. Only buy enough battery for 50 miles range or even 20 mile range if your commute is short. Then recharge daily. Such lower EVs would be useful only for local errands and commuting. But they'd keep people going to work even with $8 gasoline.

Perhaps bigger batteries could be rented only for longer trips. Downsizing even further would allow for longer range and/or lower costs. Even smaller commuter cars or electric scooters would be a better fit for many.

Smaller batteries in PHEVs (pluggable hybrid electric vehicles such as the Chevy Volt) are another option. A 20 mile electric battery range in a PHEV could be supplemented with added gasoline range in the rarer situations where people with relatively short commutes need to go farther.

Also see Gail Tverberg's coverage of the same story. I'm not as pessimistic as Gail because I think we've got other options for keeping ourselves mobile such as even smaller commuter EVs with more limited range, electric scooters, electric bikes, and other cheaper options. Note that the evidence from Europe for the potential of mass transit suggests mass transit is going to remain a minor contributor for human transit.

Share |      Randall Parker, 2011 September 16 09:26 AM  Energy Batteries


Comments
bmack500 said at September 16, 2011 4:29 PM:

There isn't any peak oil. My political ideology refuses to acknowledge it, therefore it is an infinite resource which will always be cheap as long as we can drill whenever, wherever we want!
Ok, sorry for the sarcasm...

LAG said at September 16, 2011 6:30 PM:

100 miles for 15K? Turn off my AC for another couple of miles? Yeah, that's what I'm looking for to replace my 450 mile/tank gasoline engine that delivers that range for, say, $50 or $60.

Don't do me any more favors.

Phillep Harding said at September 16, 2011 6:44 PM:

Twenty years from now, just like fusion.

Fusion has been "twenty years away" ever since the Manhatten Project.

Randall Parker said at September 16, 2011 8:42 PM:

Phillep,

A friend was in a graduate program for plasma physics in the early 1970s and the profs told him he would not live to see commercial fusion reactors. The researchers knew it was a very hard problem with a distant solution.

Fat Man said at September 16, 2011 9:19 PM:

Liquid hydrocarbon fuels used in internal combustion engines are the most effective and least costly method of moving people and cargo around our world. Electric cars are not new, they were invented before the beginning of century XX, and in its early years were a major portion of the fleet. They gradually lost out to ICE for sufficient engineering and economic reasons.

Will a robust increase in the price of oil change the state of play? I sincerely doubt it. Many drivers in Europe are already paying $8/gal. and more. They have not taken up electric cars. Americans won't either.

Do I believe in "Peak Oil" or that the world is running out of oil? I have no idea. But, I do not think it makes a real difference. Liquid hydrocarbon fuels can be synthesized. And, if the price is right they will be synthesized. Natural gas and coal are feed stocks that are being used to produce liquid hydrocarbon fuels in commercial quantities right now. But, even if those feed stocks were not available, chemists could use CO2 from the air, and water, as the feed stock, if they have sufficient energy available, and they will, even if every environmentalist in the world throws himself on the ground and howls with outrage until they die.

amir said at September 17, 2011 2:05 AM:

The "Better Place" model utilizing replaceable batteries and electricity purchasing contracts should solve the range problem and spread the cost of the battery over several years. http://en.wikipedia.org/wiki/Better_Place. Any opinion?

bmack500 said at September 17, 2011 7:57 AM:

Fat Man,

There are other reasons to own an electric vehicle (with more advanced technology than today's) than just range. I, for one plan to purchase one because I can produce the energy on site with sufficient solar panels.

It's not for some environmental statement, though I do believe those of us who breathe do like clean air, but for independence. I can buy the panels outright, and produce my own energy and not have to worry about another subscription plan (the electric bill & the fuel bill). They will eventually, in a number of years pay for themselves provided I do it right.

Admittedly, I'll have to have an ICE vehicle on hand for long trips with the family, but who cares? That's a fraction of my driving. I just don't like being dependent on anything I don't have to be!

Don't you think the idea of producing your own energy is at least somewhat appealing? I'm currently contracting in Afghanistan so that I can afford to buy this independence. Yeah, not for everybody, but electric cars are far more than just some environmental statement. Less maintenance, too!

Wolf-Dog said at September 17, 2011 8:05 AM:

It will take 5 years to reduce the battery cost by 50 %? This is not bad from the world standards, and it is fast enough, given that the price of oil is going up instead of declining like batteries. There is enough oil for another 10 years. Within 10 years the price of batteries will probably decline 75 % and the battery capacity will increase from 100 miles to 200 miles, making it much more acceptable.

So by 2020, if the price of a battery declines from $15,000 to $5,000 with a life span of the battery at least 10 years (some versions will last 20 years), then the annual cost of using the battery will be only $500. Combined with the low cost of electricity, this will be very competitive with even today's price of gasoline.

As mentioned above, the Better Place model is adopted in Israel, Australia, Hawaii, and already several parts of Europe, where a swappable battery is replaced by robots at the gas stations instead of charging, extending ranges very easily. And the electric company will rent the batteries, the owner of the car will not own the battery, will only pay the annual rent.

Even with the high cost of batteries now, assuming that the battery is $15,000, and the life span of the battery is 10 years, according to the Better Place battery rental plan, the annual cost of using this expensive battery would be $1,500 per year, which is high, but not terribly high, given that in many parts of Europe gasoline is FAR more expensive than in the United States, possibly $10 per gallon, and will be higher in a few years. If the price of oil is $10 per gallon in Europe, and if you drive 10,000 miles per year with a car that has an efficiency of 30 miles per gallon, then this would mean that you need 333 gallons pear year, which will cost you$3,300 per year at $10 per gallon. Thus even a $15,000 battery that costs $1,500 per year to rent, will become competitive with gasoline in Europe within a few years.

So the work is going well, since the world is slowly building the electric car charging and battery swapping stations, and by 2020 once batteries are ready and cheap enough, this will gradually be competitive.

Bruce said at September 17, 2011 8:19 AM:

Wolf-Dog, there is lots of oil.

"By 2035, oil from shale formations - also referred to as "tight oil" – could produce 2 million to 3 million barrels of oil per day. That includes plays such as the Bakken shale in the Northern U.S. and the Eagle Ford shale in South Texas.

Under the most optimistic assumptions the U.S. and Canada combined could produce up to 22.5 million barrels per day, the study concludes."

http://www.chron.com/business/energy/article/Report-says-we-have-more-oil-than-we-thought-2173154.php

With the vast amounts of shale gas available, if the US spends a reasonable amount of money on cnverting the low hanging fruit like heavy trucks to NG, that will be more than enough oil.

Phillep Harding said at September 17, 2011 9:18 AM:

Those particular professors were right, plenty of others have kept saying "Twenty more years and we will have it".

And, untill "global warming" came along, most people thought "peer review" had something to do with peeping toms.

Randall Parker said at September 17, 2011 9:22 AM:

amir,

Here's my problem with the Better Place model: If anything it increases the number of batteries needed because the swapping stations have to be stocked with batteries. I do not see how it reduces costs. It just makes users pay a per month cost to lease the batteries. How is that different than putting the batteries in with the price of the vehicle and then paying a per month cost to lease the vehicle+batteries?

Fat Man,

Yes $8 per gallon gasoline in Europe shows us what our future could be like and shows us what necessity has produced there: smaller cars and people living closer to work with less leisure driving. Cars are still used for over three quarters of passenger miles in Europe.

Dr. Kenneth Noisewater said at September 17, 2011 11:13 AM:

There's no peak oil, only peak CHEAP oil: synfuels from gas and shale are economical if oil stays above $70/bbl.. But better yet would be synfuels from water, CO2 and solar or LFTR power, though those are more like $4/gal.. Or how about lithium borohydride fuel cells with recycling? It has higher energy density and could be reprocessed with LFTR power..

(ps: I have a Volt, and it's deceptively quick, particularly in cut-and-thrust traffic, gotta love diesel-like torque at 0 RPM..)

Fat Man said at September 17, 2011 12:59 PM:

Bmack500: "Don't you think the idea of producing your own energy is at least somewhat appealing?"

No. I don't grow my own food, and I don't wish I did. I don't make my own clothing, and I don't wish I did. Division of labor is the source of the economic advance that has made us the healthiest, best feed, best housed, and best clothed people in history. I am content with it. besides, the sun does not shine hereabouts, nor do we get much wind.


Mr. Parker: "Cars are still used for over three quarters of passenger miles in Europe."

My point precisely. But, don't underestimate the degree to which historic patterns of land use and urban development have constrained European housing patterns.

Dr. Noisewater: +1

egoist said at September 17, 2011 1:18 PM:

I predict that any cost & power-density improvements for batteries in e-cars will be lost due - in part - to human body density; Everybody's getting fatter!

Randall Parker said at September 17, 2011 2:56 PM:

Dr. Kenneth Noisewater,

The estimated cost of oil shale has gone up over the years. It is like a receding horizon. In 2005 Shell researchers claimed they could extract oil from shale for $30 per barrel. Shell's backed off that claim.

LFTR: Until a working reactor gets built we aren't going to know how expensive it is. The nuclear power industry has a history of unrealistic cost claims and their unrealistic claims have continued up into recent years with cost overruns in Finland and at Flamanville.

$4/gallon: What's your source for this claim using solar power? It sounds completely unrealistic. A gallon of gasoline is about 33.5 kwh of energy. If you start with electric power you'd be lucky to turn a third of it into hydrogen-carbon bonds in a big synthetic gasoline plant. So call it 100 kwh input of electric power per gallon of gasoline synthesized. Let us assume 10 cents per kwh for an electric power source that is cheaper than solar. That's $10 per gallon just for the electric power because accounting for the physical plant and other costs.

Dr. Kenneth Noisewater said at September 17, 2011 3:32 PM:

"LFTR: Until a working reactor gets built we aren't going to know how expensive it is. The nuclear power industry has a history of unrealistic cost claims and their unrealistic claims have continued up into recent years with cost overruns in Finland and at Flamanville."

A multi-megawatt LFTR was built and run in the 60s, for a nuclear bomber program, the tech and materials are well understood but need to be retaught as many of those with first-hand knowledge have passed away..

$4/gal was taken from LFTR video, I assume that includes both heat and power, as well as sale of valuable fission products.. I'm on iPad, check out energyfromthorium.com for more..

RS said at September 17, 2011 7:33 PM:

In 1911, a Detroit Electric got 100 miles to the charge and cost 2 1/2 times as much as a gasoline auto.
In 1996, a GM EV1 got 100 miles to the charge and cost 2 1/2 times as much as a gasoline auto.
In 2011, a Nissan Leaf gets 100 miles to the charge and cost 2 1/2 times as much as a gasoline auto.
In 2012, a Ford Focus Electric will get 100 miles to the charge will cost 2 1/2 times as much as a gasoline Focus.

This is the actual history of electric car "progress".
Now to be fair, the 1911 Detroit didn't have air conditioning.

And forget the panic guys.
We passed "peak oil" in 1980 when the easily drilled Texas on tap for $5 ran out.
We are now at the not so easy to drill $25-50/barrel oil point, with fracking and solvent injection at the low end and deep deep offshore wells on the high end.

If government would just get out of the way...
We would leave that $50 oil in the deep gulf and instead get $25/barrel oil out of Colorado shale and Canadian sands.

And there's enough there to buy another 100-200 years for electric car "progress".

Bruce said at September 17, 2011 8:44 PM:

Israel thinks 40$ a barrel for oil shale.

"The technology was invented by the serendipitously named Dr. Harold Vinegar during his 32-year tenure at Royal Dutch Shell. Shell is exploring the use of the technology in Jordan, where there are also major oil shale deposits, but opted against exploration in Israel. Vinegar retired from Shell as Chief Scientist and made aliyah to Israel, where he began teaching petroleum science at Ben Gurion University. He then joined Israel Energy Initiatives (IEI), where he is now Chief Scientist."

http://ricochet.com/main-feed/R-D-Corner-Israeli-Oil-Shale-Technology

Sasol is planning a GTL complex in Louisiana. 96,000 barrels a day.

http://www.kplctv.com/story/15452188/sasol-announces-selects-calcasieu-parish-as-location-for-potential-8-10-billion-gas-to-liquids-complex

Build 100 of those plants and no oil imports are necessary.

Brett Bellmore said at September 18, 2011 11:21 AM:

"A friend was in a graduate program for plasma physics in the early 1970s and the profs told him he would not live to see commercial fusion reactors. The researchers knew it was a very hard problem with a distant solution."

More like a not so hard problem whose natural solution is just too politically incorrect to accept: We could start building fusion plants next year, if we simply accepted that the minimum feasible fuel pellet is in the range of several hundred kilotons yield, and built the plants to work with them. It's a fairly conventional engineering problem once you stop fighting the need to use nuclear "bombs".

Just because nature keeps telling us something we don't want to hear, (That fusion is supposed to be big.) doesn't mean it isn't telling us something.

Bruce said at September 18, 2011 4:53 PM:

Randall, I always assume the Oil Drum has an agenda other than truthfulness.

"This astonishing production increase is accomplished by changing the definition of oil and by using optimistic projections of liquids-rich shale production."

I think natural gas liquids have always been part of the Petroleum and Other Liquids chart.

http://www.eia.gov/dnav/pet/pet_sum_snd_d_nus_mbblpd_a_cur.htm

One of the reasons US plastics production moved overseas is a shortage of inexpensive Ethane etc. Now that so much of it is available from NG, plastics productionis moving back.

Randall Parker said at September 18, 2011 6:03 PM:

Bruce, I always assume The Oil Drum writers are more honest than high level executives in the oil industry. Who has an incentive to spin? Those who have an economic interest in persuading others.

Bruce said at September 18, 2011 8:46 PM:

Randall, ask them about the mysterious 100,000 donation used to start up the "charity" that the Oil Drums fronts.

They shut up quick.

http://dynamodata.fdncenter.org/990_pdf_archive/261/261233189/261233189_200712_990.pdf

There is a lot of money to be made shilling for people with certain positions in the market.

Randall Parker said at September 18, 2011 9:11 PM:

Bruce, $100k is chump change. I fail to see how that's buying influence. Lots of people have written for The Oil Drum. Some tired of it due to the long hours. They can make more doing less elsewhere. That site represents a huge amount of work.

Bruce said at September 19, 2011 7:39 AM:

Who pulls the string?

Daedalus Mugged said at September 19, 2011 11:12 AM:

I am actually surprised how much effort is put into 'all electric' vehicles as opposed to exploiting electric motors for specific applications they are well suited for.

For example, I am surprised there is not a heavy duty (F350 class) electric pickup truck that has 125hp electric motors in each wheel and a 200-250hp diesel generator connected to a very modest battery pack. No transmission. The battery would not be so much for 'all electric' range as for allowing the generator to run very effeciently (not having to cycle up and down with every push on the pedal) and to allow all 500hp of oomph available for short periods (hills). Sometimes the battery would be charging, somettimes it would be draining. That would be a very powerful and effecient towing machine...there is a reason that is essentially the design of our locomotives.

The day electric is sold as macho manly sexy instead of wussy green is the day it takes off. The fuel efficeincy gains in that would dwarf those gained from going from an ICE to a hybrid focus, but more importantly, it would be a genuinely better vehicle for comparable or less money than anything in its class. Greens often argue that you can gain much more by going from an F350 to a Tacoma...except the people who buy F350s don't want a Tacoma.

xdb said at September 19, 2011 12:40 PM:

eeek we're doomed by peak oil because electric powered vehicles currently cost 2.5X the cost of gasoline. What?!?

It's all about the numbers. Gasoline costs in Europe are currently 2.5X what they are in the US and *yet* people still drive plenty in Europe.

The argument that Europeans won't use Electric cars is bogus. When/If peak oil depletion comes, the price will rise enough that there will be demand destruction.

Also known as shortages i.e. being priced out of the market. You can be *damn* sure that those who are priced out the market will happily pay 2.5X the current rate of electricty?

Will electricity prices rise suddenly just because we hit peak oil depletion?

Doubt it. Seriously.

The problem is not about range and/or the alleged goofiness of electric cars. The problem is that even at $4 a gallon, hell even at $8 a gallon, gasoline is CHEAP!

Even now, the main driver isn't really the cost of gasoline, it's the cost of the vehicle. If the cost of gasoline compared to the cost of the vehicle was significant you'd be *damn* sure that way more people would be buying electric vehicles. But it isn't, and it won't be any time this decade.

Ronald Brak said at September 19, 2011 7:09 PM:

We already know how much it costs to mass produce batteries cause people have been doing it for some time for laptops and what not. Very roughly it's about half the current price of the Nissan leaf battery so it's not unreasonable to expect a 50% drop in the Leaf battery price. I suspect that mass production and improved technology will result in further battery price declines beyond this, although I can't be sure.

LarryD said at September 20, 2011 10:06 AM:

Tokamak-style fusion is a money sinkhole, with poor prospects.

Three alternative lines of research I'm more optimistic about:

Polywell.

Dense Plasma Focus.

Reversed Field Configuration.
----
US Oil exploration has been driven into deep waters because of government regulation, not because there's no oil to find in shallow waters or on land.

And then there is coal liquefaction.

anonyq said at September 20, 2011 4:14 PM:

Bruce,

Why would you go GTL if you can also use that gas directly into a car engine? The only reason why the department of defense is buying GTL oil products is because GTL diesel has a much better shelf life than diesel made out of oil

Engineer-Poet said at September 26, 2011 4:31 PM:

Bruce keeps harping on The Oil Drum's seed financing.

$100k is chump change.  Nate Hagens, an ex-Wall St. broker who made his pile and retired, could have written that check and just not wanted it attributed to him.  Hell, I (with no connection to either oil or finance) could write such a check if I really wanted to.  It means nothing.

TOD's authors range from oil people to near-crazies (I won't name names, you can figure it out yourself).  The quality of posts is highly variable, and the staff mailing list is strongly divided on the quality of many of the pieces suggested as post-fodder.

The one thing you won't find anyone on TOD saying is "there's another 50 years of cheap oil, happy motoring!"  That's because there is no evidence for this; US oil production peaked in 1970, and we're never going to see that peak again because even painful lifestyle changes are easier and cheaper than e.g. retorting a million tons per day of oil shale.

Engineer-Poet said at September 26, 2011 4:33 PM:

As for cheap batteries, if something like the annealed sulfur-impregnated carbon nanotubes turn out to be easy to make in industrial quantities, they could arrive very quickly.

Ronald Brak said at October 3, 2011 8:22 PM:

I've had a closer look into car battery prices and now my earlier comment about a 50% drop in price being not unreasonable seems kind of dumb. Sorry about that. However, as an optimist I do think that significant declines in price are likely.

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