May 01, 2012
Ford CEO Alan Mulally Sees Higher World Energy Prices

HIgher costs of energy coming our way.

“The point of view we have is that we are all going to be paying more for energy worldwide.”

With oil producing countries consuming more oil domestically and developing Asian countries such as China and India importing more oil the West has less available net exports of oil to buy, as Jeffrey Brown points out.

Mulally says batteries for electric vehicles (EV) still are very expensive.

“Right now a battery costs $15,000 for a 100-mile range,” Mulally says. “Now, as energy goes up, you can start to make a case for the economics of all-electric. But the most important thing is finding a way to manufacture electric batteries in a cost-efficient way.”

A few years back we had debates in the comments about how far and how fast electric battery prices would fall. I was on the pessimistic side on those debates. $15k for enough battery capacity to provide 100 mile EV range in 2012 seems like confirmation of the more pessimistic view.

Hybrids still seem like the way to go even up around $7 and $8 per gallon gasoline. A huge reduction in battery costs would change that calculation. But when will enough batteries for 100 mile range hit a more reasonable $5000?

Share |      Randall Parker, 2012 May 01 10:04 PM  Energy Electric Cars


Comments
Wolf-Dog said at May 2, 2012 12:33 AM:

I would bet that by the end of this decade a 200 mile battery will cost $5,000. The reason I am confident about this speculation is because unlike the previous decade, hundreds of top universities in the world are working in parallel, to develop various kinds of batteries. This is an enormous parallel project. Thousands of most brilliant chemists and physicists are focusing on this subject. Previous academic efforts for batteries were just small projects. The funding is still less than ideal, but compared to the previous centuries, it is increasing dramatically. In addition, the longevity of these batteries and the ability to charge will also improve. Once charging pods are placed in every street, the shorter range of the cars will be more acceptable.

But let's imagine that a 200 mile battery that lasts 10 years costs $10,000 at the end of the decade. Now let's divide the price of the battery by the estimated number of years this battery works, and this means that the annual cost of using this battery would be $10,000/10 = $1,000 per year.

It is estimated that at the current price of electricity, the efficiency of a pure electric car is 3.3 cents per mile:
https://docs.google.com/viewer?a=v&q=cache:r6EdDWpeU-0J:avt.inel.gov/pdf/fsev/costs.pdf+electric+cost+of+electric+car&hl=en&gl=us&pid=bl&srcid=ADGEESjFdwbND3ppvNgQDzEW2FfdgGlNvDooVdXwPa-Hm_k2Y8yAsV_R3eYAdP5tBgcl60EhW11mA86xX5rACvZQ8S03GysizJ73AuTY8IG8GJVj_qM7or5Mk6quSUE5Uxc9Bgfk7YBu&sig=AHIEtbSei1K8_pMiIhdPltAzJmMx1TH9Iw

Thus the cost of electricity for driving an electric car for 13,000 miles per year would be (this is the national average) 13,000 X 0.033 = $429.

Thus the total cost of driving an electric car would be the annual cost of owning the battery plus the annual cost of electricity = $1,000 + $429 = $1,429

But if gasoline costs $5 per gallon at the end of the decade and if the efficiency of cars is 35 miles per gallon, then the annual cost of gasoline would be = 13,000 X $5 / 35 = $1857.

Thus if we adopt a business model of selling the cars without the battery, so that the battery is rented instead of owned, then the cost of the battery is absorbed into the annual electric bill, and since an electric car without battery is even cheaper than a gasoline car (electric cars have less components and such cars last even longer due to less moving parts), it follows that electric cars will be very competitive at slightly higher gasoline prices. And beyond this decade we can be sure that there will be better and cheaper batteries.

I bet that by the end of this decade these batteries will probably last 20 years instead of the current 10 years and the cost will be less than $10,000.

CyclemotorEngineer said at May 2, 2012 8:45 AM:

Battery price should be expressed per Joule of storage, over the life cycle of the battery. That Alan Mulally would express battery price in terms of mileage says something about missed opportunities to redefine our vehicles. The low hanging technological fruit is in matching our goals with the capabilities of batteries and more slippery vehicles. Cheap gas lets you afford to put people side-by-side, with extravagant spare vehicle capacity. Batteries will remain relatively expensive, so let's deal with it.

jim said at May 2, 2012 12:11 PM:

Batteries are an old, old technology that have had massive resources from many industries, governments, and militaries poured into their R&D and manufacture over many, many decades.. The idea that we're going to find a huge breakthroughs in battery tech in the next decade or two is ludicrous. We will see small improvements, A few % here a few % there. Cutting costs by a factor of 2 or 3 flies in the face of all available evidence.

Ronald Brak said at May 2, 2012 8:16 PM:

So what are the costs per kilowatt-hour for power tool and laptop batteries at the moment?

Randall Parker said at May 2, 2012 8:21 PM:

Sergey,

Thanks for the interesting links.

But consider: IBM's lithium air batteries might be ready by 2022. Well past Peak Oil. Also, the aluminum/air battery research paper is already 10 years old. Where's the market revolutionizing product? The zinc air article is focused around grid storage.

The Sumitomo/Kyoto molten salt battery might be the ticket though. Will it really get commercialized by 2015? That still pushes out EVs until the latter half of the decade.

CyclemotorEngineer,

My views are closer to your own. If we are going to be stuck with expensive batteries even when gasoline hits $6 per gallon we are going to have to deal with the shift away from oil without a technological revolution. Much smaller vehicles (all the way down to electric-powered bicycles and scooters) is one way to go. Making cars even more efficient is another way. Also, for people with shorter commutes smaller batteries and recharging at both ends could do the trick.

For a lot of people just moving up to a 60+ mpg hybrid (which is not a great stretch from a 50 mpg hybrid) would let them handle a doubling or tripling of gasoline prices.

Fat Man said at May 2, 2012 10:06 PM:

"But when will enough batteries for 100 mile range hit a more reasonable $5000?"

Never. Jim is correct. Given that modern batteries are based on chemistries using uncommon elements, such as Lithium, they are more likely to go up than to go down.

The good news is that liquid hydrocarbon fuels will continue to be available at reasonable prices for the foreseeable future. Natural gas to liquid conversion is economically viable now. Coal to Liquid is old hat. But, the limiting case, convert atmospheric CO2 and water into liquid hydrocarbons will be a better use of resources than BEVs.

Engineer-Poet said at May 3, 2012 7:27 AM:

Zinc-air has approximately the net (delivered) energy density of gasoline, and can be arranged as a fuel cell rather than a fixed battery.

I've been seeing more lately about battery chemistries using sodium ions.  Ionic sodium is about as cheap as dirt.

CyclemotorEngineer said at May 3, 2012 9:38 AM:

Randall,

Hybrids are getting smaller and less expensive. For example, the little 2013 Chevy Spark plug-in hybrid is supposed to cost about 12K. GM has yet to release that crucial spec: battery capacity.
http://www.chevrolet.com/spark-mini-car/

Transition is not occurring as quickly and dramatically as I'd like to see. If we really wanted to reduce power requirement in a two seat commuter vehicle, passengers would sit back to back, with a one small roll bar over their head and lots of lightweight air bags. While this would be classified as a motorcycle and not a car, it could be enclosed and get the job done in any weather while providing protection from the more massive vehicles clogging our roadways.

CyclemotorEngineer said at May 3, 2012 9:51 AM:

Reading latest GM link, I learned that the Chevy Spark is not a plug-in hybrid, but a gasoline only vehicle. GM will release a pure EV Spark at some later date, presumably for significantly higher cost.

Michael L said at May 3, 2012 12:57 PM:

methanol can be produced for plentiful inexpensive gas and coal. Oil can be produced from tar sands. The reason why these things will not be done on sufficient scale to supply the American economy will not be technical infeasibility - it will be the deliberate decision by "powers that be" people (including the good CEO himself, among others) to not do them. So when we hear such prognoses from "the great and the wise", we should not look at them as dispassionate analysis of world situation. It's more like an armed robber's boasting to his prospective victims just what he is about to do to them, right about now. The fuel prices will be artificially raised and the American power grid will be deliberately sabotaged - that's what we get for having an enemy occupation regime bent on destroying America instead of a loyal national government.

PacRim Jim said at May 3, 2012 12:59 PM:

Perhaps I should work a little harder on the zero point energy hybrid I am developing in my garage.

Tj Green said at May 3, 2012 5:13 PM:

America has vast resources of natural gas 1.5 miles underground,and Britain has vast resources of natural gas in the north sea. It seems unlikely that the Americans or British would not exploit these resoures.

bmack500 said at May 9, 2012 5:57 AM:

Ultimately, we will do what we have to come h*ll or high water. We are a creative people, and an all of the above type of strategy will likely be our only bridge to disruptive technology.

Hydrocarbons and their resultant poisons until we can do better. However, I wouldn't bet against IBM and their lithium air tech. Or batteries with rechargeable slurries.

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