July 28, 2012
Plug-In Hybrids Beating Pure Electric Cars

Pluggable Hybrid Electric Vehicles (PHEVs) are beating pure electric vehicles in sales in the United States by a ratio of over 3-to-1.

Thanks to a resurgent Chevrolet Volt and Toyota's introduction of a plug-in version of its popular Prius, sales of such vehicles have jumped 381 percent to more than 13,000 in the first half of this year, according to Edmunds.com.

4 thousand EVs and 13 thousand PHEVs are both small potatoes in a car market where total volumes range between 10 million and 15 million cars per year. The high costs of batteries continue to block EVs and PHEVs from making major inroads. At current battery prices (see below for a $652 per kilowatt-hour estimate) PHEVs will not become competitive until gasoline gets up near $6 per gallon.

More PHEVs are headed to market. Ford's new PHEV will go 20 miles on battery. With half the battery range of a Chevy Volt (and hence a cheaper battery) the C Max Energi's price comes in comes in at several thousand dollars lower than the Volt.

As Ford detailed last night, its first plug-in hybrid will retail for $33,750, has a combined gasoline + electric range of 550 miles, is expected to get a combined EPA rating of 95MPGe, and will go on sale later this year.

A McKinsey report predicts a 70% decline in electric battery prices by 2025.

The 23-kilowatt-hour battery used in Focus Electric, Ford Motor Co's first electric passenger car, can cost between $12,000 and $15,000, Chief Executive Officer Alan Mulally said at a conference in April. That suggests Ford paid as much as $652 per kilowatt hour.

Even if true, that's 13 years from now. A 70% price decline would put the electric Focus's battery cost in 2025 near $3600 at the low end.

Share |      Randall Parker, 2012 July 28 08:50 PM  Energy Electric Cars


Comments
Engineer-Poet said at July 29, 2012 8:00 AM:

The major expense of the batteries isn't the raw materials, it's the cost of construction.  A big part of the problem is getting enough production volume to start working down the experience curve.  We'll need sales volumes in the hundreds of thousands per year to really get that ball rolling.  I'm hoping there will be enough early adopters to jump-start it.

willis said at July 29, 2012 10:27 AM:

Rest assured there are not enough far-left progressive greens to supply the early adopters needed to mass produce these worthless clunkers. Ask the customers of Solyndra and the other corrupt pay-off companies that bribed Dear Leader for taxpayer funding.

R Sweeney said at July 29, 2012 10:54 AM:

Just for contrast, that $15,000 23 KW battery in the Focus holds less energy than 2 quarts of gasoline.
That $15,000 battery will only last 10 years, so you need to save $150/month just to break even, given interest.
And that's just for the battery. If you count the extra $5000 in electronics required by the electric, it's $200/month to break even

But a gasoline or diesel car getting 40mpg only uses 25 gallons of gas per month, worth a mere $100 at $4/gallon.
And the gas car has no range issues, no problems with extreme cold or heat, and no problems sitting in a traffic jam for hours with the heater or A/C running.

This are the fundamental problems for electrics... they costs WAY too much and still are less useful and less adaptable than gasoline.
Gas simply packs too much energy in a small, cheap, easy to use format.

Rich K said at July 29, 2012 10:58 AM:

The primary reason even Ford finally jumped on this bandwagon is not to make greenies happy but to get their CAFE levels up to satisfy the Feds new rules.Dont kid yourselves that they are doing this for mother gaia.

PacRim Jim said at July 29, 2012 11:31 AM:

Which would you rather have if the electric power grid were taken down by, for example, state-sponsored hackers or an electromagnetic pulse?
At least the hybrid has a last gasp of gas.

Da55id said at July 29, 2012 11:53 AM:

I just ordered a 2012 Chevy Volt because of vastly lower lease prices at model year end clearance. I estimate that given my family's pattern of driving that I will spend less on gas than the fully burdened monthly cost of the lease and insurance. If my analysis is correct, the car will pay me $53.00 per month by avoiding paying for gas at $3.50 per gallon that I would in the absence of the Volt inevitably use. Outside of the monetary gain, I get a new and very high tech car for two years "for free". I also get fuel resilience in that I am no longer solely dependent on gasoline.

Wolf-Dog said at July 29, 2012 12:09 PM:

1) The longevity of a pure electric car (computed without battery) is much longer than a gasoline car because an electric car has less components that wear out. The electric motors are much cheaper and get swapped easily. Thus a pure electric car without battery can be made for $15,000 for the middle class, and it would last at least 20 years, probably a lot more if the components get replaced. This would mean that the cost of driving is much lower if you include the purchasing price of the car divided by the number of years it can be driven.

2) Separately, the current lithium-ion technologies surely do not reflect the future prices of different lithium based or other kinds of batteries that will be developed within a decade. Right now there is a gold rush type mobilization worldwide, where hundreds of universities are working round the clock for batteries. This kind of focus is somewhat akin to a private and decentralized Manhattan Project, because everyone believes that oil dependence is a disaster for the future. Thus the analysts that came up with the reported estimates for the projected decline of lithium-ion batteries, were almost certainly being very conservative in their calculations.

3) The economic burden of importing oil, the oil component of the trade deficit, also represent hidden costs to each individual, and the elimination of imported oil would thus represent additional cost savings for the average citizen if electric cars are used.

Thus once the price of batteries declines by 50 %, electric cars can be made very popular.

---------------
PacRim Jim wrote: "Which would you rather have if the electric power grid were taken down by, for example, state-sponsored hackers or an electromagnetic pulse? At least the hybrid has a last gasp of gas."

Excellent point! It's possible that Iran needs the nukes to generate a powerful enough EMP to disable the electric cars so that we remain dependent on their oil. This explains why they are so adamant about building nukes. In this sense their survival depends on nukes:)


Engineer-Poet said at July 29, 2012 3:46 PM:

I figured the drive-by commenters were drawn here by Instupundit, and I was right.

xb said at July 30, 2012 10:10 AM:

I wish you luddites would just get lost and go back to your buggy-whips and whale oil.

Engineer-Poet said at July 30, 2012 1:42 PM:

If you think that doped LiFePO4 electrodes in a non-aqueous electrolyte and brushless electric motors are "buggy whips" compared to the ICE which any Model T mechanic would understand with little effort, you need to go back to Instupundit.  This is a site for people who know facts about the world and can use reason to make sense of it; ideological regurgitations belong elsewhere.

xb said at July 31, 2012 8:02 AM:

E-P: try rewinding and viewing my comment more from your side of the fence as opposed to the idiots who are seeking to hold back the requirement to move off of oil. To spell it out: I'm on the side of progress and energy efficiency not on the side of those who seek to try to continue driving F-150s; re-read my comment in that light.
Quite frankly I'm surprised a guy as smart as you missed the point so widely.

Engineer-Poet said at July 31, 2012 8:32 AM:

Sorry about not re-reading the entire comment thread to catch that, but if you don't want to be misinterpreted, make unambiguous references.  I use blockquotes a lot for exactly that reason.

Nick G said at July 31, 2012 1:26 PM:

Consider the Prius C: it costs 2/3 as much as the average US new light vehicle($20k vs 30k), and uses 40% as much fuel. If oil prices tripled the cost of fuel per mile in a Prius C would still be no higher than the average US light vehicle. As best I can tell, the C has the lowest total cost of ownership for any light vehicle.

Then, if we add $10k in batteries to the Prius C (assuming a conservatively high cost per kWh for cells of $500), bringing the cost only up to that of the average US new light vehicle, we'd have a plug-in with an electric range of 60 miles (3 miles/kWh x 20kWh), reducing fuel consumption to less than 10% of the average US light vehicle, which would be at a scale small enough to be covered by solely by ethanol.

Electric vehicles of various sorts will work very well. The only thing stopping them now is artificially low fuel prices.

Nick G said at July 31, 2012 3:01 PM:

Wolf-dog,

You said " electric motors are much cheaper and get swapped easily". This makes sense to me, but it would be helpful to have a source for that. Do you happen to have one handy?

Also, do you have a source for repair costs for ICE cars older than 5 years? Sites like Edmunds have some really basic costs for the 1st 5 years, but it would be nice to have something for cars older than 5 years, and a breakdown by repair type would be nice as well.

Randall Parker said at July 31, 2012 8:14 PM:

Nick G,

Going back to arguments we were having a few years ago: batteries still cost much. The McKinsey timeline for cheap batteries is still pretty long. What do you make of that? You were more optimistic about battery costs. I'm feeling vindicated in my more pessimistic views on their rate of cost decline.

Regards Prius C: How can oil prices triple? I think the world economy can't support $300 per barrel oil. The economy will shrink to keep down demand for oil rather than see its price get that high.

E-P,

Clearly there are not enough early adopters. Look at the Nissan Leaf and Chevy Volt sales figures. My sense of it is there is not enough demand for PHEVs and EVs to move us up the learning curve any faster than the snail's pace we are currently going.

The big hope for moving down battery learning curves comes from regulations. I expect the higher CAFE requirements will force the car makers to sell a lot more HEVs. We'll see more of what GM did with the Buick LaCross eAssist light hybrid. But will the battery chemistries of the HEVs do much to further the development of cheaper EV batteries? Are the car companies shifting from NiMH to Lithium for HEV batteries? I haven't kept up. What's the trend? As I understand one press release Ford is going to use Panasonic lithium batteries for HEVs, not just for PHEVs. That would tend to bode well for getting sufficient volumes on lithium car batteries.

Randall Parker said at July 31, 2012 8:20 PM:

A couple of years ago Toyota was intent on using NiMH batteries for HEVs for 10 years while some other companies were moving to lithium for HEVs. So what's the trend now? I see a lot hanging on that question. Far larger volumes for HEVs than for PHEVs and EVs. So HEV battery volumes in lithium could speed up the learning curve for lithium PHEV and HEV batteries.

Know anything on this question? Seems like a key question.

Engineer-Poet said at July 31, 2012 9:01 PM:

The economy could probably stand $300/bbl oil if 2/3 of all road mileage was powered by electricity.

A bit of a chicken/egg problem, isn't it?  If mandates for fuel economy don't do it, maybe we'll develop a civic ethos which values the economic and military security benefits of PHEVs and promote them via e.g. feebates.

ZZMike said at August 1, 2012 7:25 PM:

20 miles on a charge? That's not going to make the average driver's heart flutter.

"predicts a 70% decline in electric battery prices by 2025."

Excellent. I'll wait till then.

Nick G: "... Prius C: it costs 2/3 as much ..."

How much of that savings is from government subsidies?

One other problem with electric cars of any type is that China has almost all the world's resources of rare-earth metals, which make up the magnets that power the motors. We're utterly dependent on their supply, and they've already started to reduce exports.

E-P: "... a civic ethos which values the economic and military security benefits ..."

Excellent idea! Let's have all our tanks, trucks, ships, airplanes run on batteries. We've already made a start, having the Navy run on biofuel.

Wolf-Dog said at August 1, 2012 9:42 PM:

Nick G: " You said " electric motors are much cheaper and get swapped easily". This makes sense to me, but it would be helpful to have a source for that. Do you happen to have one handy? "
-------------------------

Well, here is a discussion of the brushless DC electric motors that are very durable:

http://www.emservicenter.com/brushless-motor.html

Here is another article:
http://www.ehow.com/about_5456046_electric-vs-gas-cars.html
--
EXCERPT:
"Durability
Except for lower emissions, durability is the area where the electric car smashes the gas car. With an electric car there are no oil changes or tune-ups, and with regenerative braking, brakes last longer. Gone also are the parts failures associated with belts, hoses and cooling systems.
DC-powered cars need only to have brushes changed about every 100,000 miles, and the AC motors don't even have that."
-----------------------


But more to the point, the electric motors are by nature very simple compared to gasoline motors that have a lot more components.

Furthermore, the gasoline cars have many supporting components like radiators, exhaust systems, fuel systems, transmissions, gear boxes, air filters, oil filters, etc. Electric cars will need none of these extra components that need to be replaced. The electric motors will be fixed (swapped easily) and there are no transmissions, complicated gear boxes, as in many cases all wheels will get their own independent motors. Thus the actual cost of driving an electric car will be lower as there will be less service needed. Also because the actual cost of building a pure electric car will be lower and because such a car will last much longer, this is already close to being economical.

Thus you can build an electric car without battery for $15,000. Only the expensive battery is making it too expensive for the moment. But taking into account the fact that a pure electric car can be made to last 20 years instead of 10 years, the cost of the battery is reduced if we combine the price of the car with the cost of driving.

Separately, if the oil component of the foreign trade deficit were eliminated, this would increase the average income of people and they can then afford slightly more expensive cars. After all, an unemployed person cannot even afford the cheapest foreign goods.

Within a decade things will look better for mass adoption of electric cars.

Engineer-Poet said at August 1, 2012 11:22 PM:
China has almost all the world's resources of rare-earth metals
No it doesn't.  China allows entire lakes to be turned into toxic sludge of refining byproducts of rare-earths, which no one else seems to be willing to do.  That's different.
which make up the magnets that power the motors.
We don't need RE's for motors; induction motors, which need only transformer-iron laminations and conductors (aluminum or copper) are sufficient (see the AC-150 powertrain used in the Tesla roadster).

A lot of the USA's rare-earth deposits are full of associated (and expensive-to-separate) thorium.  Thorium is a worthwhile fertile material for nuclear energy.  To make certain RE deposits attractive, all it would take is certification of thorium-based rods for existing light-water power reactors; that would market the thorium, allowing the REE's to be sold at a profit and compete on a more-or-less equal basis with the Chinese.

Have you placed any bets on Lightbridge yet?

Sione said at August 2, 2012 1:53 AM:

Quoting WolF Dog :"It's possible that Iran needs the nukes to generate a powerful enough EMP to disable the electric cars so that we remain dependent on their oil. This explains why they are so adamant about building nukes. In this sense their survival depends on nukes."

Classic stuff.

Question: Are people in the US really as delusional as that comment reveals or was it mere jest?

Sione

Ronald Brak said at August 2, 2012 4:14 AM:

While batteries for electric cars are not as cheap as we'd like them to be, they are cheap enough so that developed countries could electrify private transport fairly easily if they wanted to. There are definite savings to be had in fuel and maintenance costs so overall it would not much of an economic burden and might be a plus, particularly if health improvements from cleaner air are factored in. If we take a figure of say $300 a tonne for non-agricultural removal of CO2 from the air, which is a bit of a guess, then over 10 years a car that's driven 15,000 kilometers a year and gets 30 kilometers to a liter will emit CO2 that will cost about $5,500 to remove. A electric car and its battery pack compares pretty well with that when you add in fuel and maintenance savings. (Agricultural removal of CO2 from the atmosphere might cost $150 a tonne or less, but there is some concern it will result in mass starvation and massive ecological damage.)

Wolf-Dog said at August 2, 2012 10:12 PM:

Sione wrote: "Quoting WolF Dog :"It's possible that Iran needs the nukes to generate a powerful enough EMP to disable the electric cars so that we remain dependent on their oil. This explains why they are so adamant about building nukes. In this sense their survival depends on nukes."

Classic stuff.

Question: Are people in the US really as delusional as that comment reveals or was it mere jest?"
--------------------------

That comment was obviously a humorous response to PacRim Jim's comment. But your attitude of intolerance speaks volumes. Selective quotation without revealing the source context. So this makes me a fascist warmonger, if what you want is to win at any price, I give up.

Anonymous said at August 2, 2012 11:45 PM:

Ronald

The calculation you employ relies on the introduction of significant expropriations and confiscations of private property and wealth from productive individuals into the indefinite future. History demonstrates that such schemes are not sustainable in the long term. Among the problems they introduce are immediate distortion of the market, sending of misleading signals to entrepreneurs and investors, accelerating the consumption of the pool of real capital and the increased raising of costs unnecessarily. In the absence of such indulgence-granting (tradable CO2 credits and the like) the electric car does not make a very strong case financially. For the vast majority of people it isn't even a feasible product, let alone a practical one. It's utility is poor. Subsidies and similar artifices designed to obscure that fact have a deleterious effect which is borne disproportionally by the less well off and also the financially insecure. The level of wealth drops and welfare overall is reduced.

Moving on, the electrification of transport is not a matter "fairly easily" accomplished in developed countries since those very countries are insolvent- whether at the municipal level, regional level or national level. In the US alone the municipal debt, thus far admitted and "on the books", racks up to some USD106-billion. Then there are the overhanging liabilities and off book obligations (no-one seems to know what that figure amounts to- likely two or more times greater than the 106B operational debt acknowledged thus far). On top of all lot that is the Federal govt debt- on and off-book. Consider what is being left for your future generations. Your children won't be able to pay it off ever (liable and perpetual debt slaves they be fated to be- even prior to conception!). Indeed, your great grandchilren will still not have paid it off (ditto). In reality default is much more likely than the obligation to repay such debt being honoured by the self-indulgent mobs who incurred it on your behalf and in your name. Either way (sovereign default or not) ordinary people will find their circumstances much reduced.

The debtor nations of the West, saddled with the overheads or elaborate welfare overheads and warfare (internal and external) overheads, are not going to be able to easily afford to do anything, let alone something like electrifying transport. Don't forget that whatever funds the govt can deploy are going to steeply reduce in purchasing power and remain highly contested between the various schemes, projects, rorts, mouths to feed, lobbiests, cronies and ever expanding wars of one sort or another. It is going to be interesting to witness which sectors win the contest and gain spend and also which areas falter.


Cheers

Si


Ronald Brak said at August 3, 2012 2:15 AM:

Anonymous, if you look into it you'll see that the dumping CO2 from fossil fuels into the atmosphere results in significant expropriations of private property and wealth from productive individuals into the indefinite future.

And if debtor nations of the West can't easily afford to do anything, how come my state was able to go from next to nothing to getting over a third of its electricity from wind and solar in seven years? And looking at the United States I see they installed enough wind power capacity to average around 15 gigawatts within a similar time period. Or do you mean we just won't be able to do anything easily from this point on? As they are Western creditor nations will Germany, Russia, Switzerland, the Netherlands, Norway, Sweden, Denmark, Luxembourg, Belgium, Finland, and France be able to do things easily?

Si said at August 3, 2012 4:18 AM:

Ronald

Quoting, "Anonymous, if you look into it you'll see that the dumping CO2 from fossil fuels into the atmosphere results in significant expropriations of private property and wealth from productive individuals into the indefinite future."

What you have posted on this occasion is an example of an arbitrary claim- one which is based on a blind faith absent real proof.

...

Quoting, "And if debtor nations of the West can't easily afford to do anything..."

The situation is that govts continue to indulge in infrastructure schemes, various wars of one sort or another (domestic as well as international), all manner of assorted boondoggles, rorts and the like for their own benefit and those of their cronies, special interest supporters, chums and so on. That's the unavoidable nature of collections of such critters. They strive to attain power over others and over other people's property. Once they have it, then they enforce and expropriate! The main points to grasp are that expenditure made by govts are a consumption of other people's wealth including savings (government does not produce wealth, rather it expropriates it and consumes it). Of course, as the productive base of wealth creation and savings is increasingly destroyed by being plundered, the spending power (the remainder) available to the govt declines. The process is gradual at first (not easily noticed by most) but inevitably accelerates. Soon the situation gets very desperate. The next thing to note is that govt spending is contestible. For much of the recent past it has been possible to hide the growth in govt spending and enabling the plundering. It was possible to keep almost all the hungry interests well supplied with tributes and bribes. That is becoming increasingly difficult now. There is just less and less loot to loot. That development soon brings the various interests into direct competition for the increasingly scarce funding. Projects (boondoggles) get harder and harder to support. Sure, you might see a gigantic project here and a local invasion and war there get off the ground. The overall result remains that there is reduced ability to proceed with such fun. In this regard, the electrification of transport represents merely another contestant for support. Realistically one has to admit that a new war with (say) Iran, is a far better bet for funding (not because I think it is a god idea, it just remains a more favoured choice with your overseers). Another important point to realise is that all this stuff is debt funded anyway and that each spend that gets done consumes precious savings (reducing the pool of real capital even more) and so less is left at the end of each cycle of spending. One other issue to note is that as the govt borrows more it displaces private business by increasingly sucking up resource that would be used by private entrepreneurs and producers. They have less access to capital so they undertake fewer projects, less research and ultimately produce less. It is getting harder for all the projects and electrification of transport is merely yet another contestant among many.

...

Quoting, "As they are Western creditor nations...".

Creditor nations? Check your facts.

Germany's govt is in debt. You ought to look up the number. It is a feeeeelthy wee fact that the media stay well clear of reporting. Germany's banking system is insolvent- holding worthless mountains of Italian, Greek, Spanish etc sovereign bonds- pretty bits of colored paper worth sending to the public lavatory. Understand that any "bail out of the Spanish govt" is a bail out of German banks with wealth expropriated from productive German citizens (who will be impoverished and may well be less inclinded to produce after the experience). Things are even worse in France. The rest are in a similar situation one way or another- they just have various ways of trying to hide the facts from themselves and their citizen believers. Creditors indeed! And Russia, last time I checked, was not a Western nation....

So, to answer your question, it is indeed going to be a lot harder to do anything. You'll have to sacrifice a lot more of someone and their stuff to get your favourite project resourced.

...


FROM

Si

Ronald Brak said at August 3, 2012 3:27 PM:

Ah, this is obviously some new definition of the terms creditor and detbor nation of which I was previously unaware. Could you please give a definition?

Engineer-Poet said at August 5, 2012 7:04 AM:

In your imagination:

In this regard, the electrification of transport represents merely another contestant for support.
In reality, electrified transport is much cheaper than the un-subsidized cost of petroleum (rolling in Middle East wars and such).  Electrified rail would be the rule, were it not for the fact that the rails are privately owned and local governments assess property taxes on every improvement.  It's far cheaper to operate than diesel and will be built out on high-traffic lines as soon as the legal environment shifts in its favor.

Dual-powered locomotives are coming, for lines which aren't fully electrified yet.  In electric mode, they're more powerful and thus faster; this moves more traffic and makes more money for the railroad.  Electricity is going to take over.

Sione said at August 5, 2012 11:58 PM:

Ronald

Try not to be disingenuous. How about you try reading and learning instead? Go check fact BEFORE offerring up inanity.

I'll be charitable and start you off so you can get the idea of what to do. Since you started your list with Germany, let's start off right there.

Is the German government in debt? The answer is, "well yes buddy, it sure is!". That outfit (a debtor) owes money to other entities (creditors). Yup, those guys are up to their eyeballs in debt. Presently the magnitude of German government debt is some € 2,022,000,000,000 (at least that is the amount publically admitted) and rapidy growing, well out of any semblance of rational control. The German government is borrowing at an accelerating rate, just to keep itself going. The debt they have managed to rack up so far is already over 81% of GDP and still rapidly rising. The German govt debt vs. GDP is of the same order as France or the UK (both slightly inferior at ~85%). Even poor Hungary, with its history of Soviet occupations and tettering socialism, is a little less of a worry than the German govt situation. They are at 80%. Spain, with all the media fear-mongering and the oft expressed concerns about their shocking govt debt crisis is only running at a mere ~70%. Of course, this is all modest in comparison to the USA which is well over 100%...

Get the point yet?

Next consider the German banking system. If you can be bothered to do the research you'll soon find that the German (and French) banks are exposed to vast amounts of Italian, Greek, Spanish etc sovereign bonds (some dang fool idiots somewhere went and done all that lending to them spendthifts govts so they could get so deep into the red and those idiots what lent so thoughtlessly were banks, such as German ones...). In other words, they lent a lot of money to outfits which are utterly unable to pay it back and hence are about to default (sooner or later). The money is gone- spent, consumed, frittered away on bribes, extravagance and nonsense. So what the German banks are left with is, in essence, piles of preeety weeee pieces of potty paper with empty promises written on them. As previously indicated, this stuff is best sent over to a lavatory (it'd have to be a public lavatory outside a really big drinking establishment or a sports arena at the Olympics, given the magnitude of the number of pieces of paper we are looking at here). At least someone there could put it to use. Righto, so what does that all mean. It means that the German banking system is insolvent. Go and check the facts, then consider- how is it possible for the German banks to survive let alone to maintain a fictitious paper fiction of being "creditors" and of being credit-worthy? There remains only the device of a Central Bank bail out. When that occurs you'll see loss of value of the Euro, the destruction of savings and wealth and a general impoverishment of ordinary Germans people.

In conclusion, the German govt is in debt. The German banking system is insolvent. Hardly attributes of a "creditor nation".

OK. Now move to the next "Western creditor nation" on your list. Check the facts to see if its govt is in debt (which it will be) and then check its banks to see how large their sovereign debt holdings are. Do your analysis and derive conclusion from there.

Get it?

Si



Sione said at August 6, 2012 1:03 AM:

E-P

No, not in my imagination. Anything the govt is going to do requires funding. That funding can only come after it is first expropriated from productive people. The means are taxes, regulatory imposts, extraction from the capital markets (borrowing) and the minting of fresh fiat money (which acts as a silent tax extraction of the spending power of fiat currency from those who have holdings of it and are unable to compensate- for example, savers, those on fixed incomes, wages and salary earners etc). As previously stated, as the productive base is damaged and shrinks the magnitude of real purchasing power available to be expropriated reduces. Hence the govt becomes more severely restricted in what it can actually do. Budgets are cut. Funding is contested more vigorously, as it has to be. Various interests have to fight all the harder to get a share of the loot. Some will go without. It's a sinking lid. Presently you guys in the USA are about to experience the results of this in a major way. It won't be comfortable. I sure don't envy you the experience.

In regards to electrified transportation, as a govt initiative it is merely another contestant for funding, exactly as previously stated. How can it be anything else? It isn't going to be erected for free. It requires funding if it is to proceed. THAT is the reality of the situation.

---

EP, I understand you like the trains. That's fine, but your preferences are not of relevance here. Neither are mine. We are where we are. Reality is as it is. Understand that it really doesn't matter what your aesthetic sensibilities, tastes and preferences are, whatever the govt ends up doing will be as the result of insiders, special interests and cronies contesting the funding resource remaining available to consume. Chances are that those guys are going to choose differently from what you are dreaming of presently. My suspicion is that there is an escalted war looming and that is what has been chosen. That's what is going to be funded. BTW it isn't solely or necessarily driven by access to oil either. There is more to it than merely that. Does electrification of an old rail network rate highly or as a priority? Probably it doesn't. Perhaps some funding may be awarded, but it'll be tiny in the overall scheme of things and not that much will be achieved. Worse news is that the longer this goes on the less will be made available simply because there is going to be less available to consume anyhow. That USD106 billion is definately going to have an effect. Rising interest payments are just the start. Put it this way, if your municipality can't even pay its operating costs or the the pensions of its retirees, just how is it going to fund building new infrastructure? Raise more debt? Not once municiple defaults emerge as severely as they are about to.

--

In my direct experience, diesel locomotion has commonly proven out cheaper to run overall than electric (not always but often). I am aware of several programs where electric traction was replaced by diesel for reasons of lower life cycle costs and lower maintenance overhead. It was no small decision to make capital purchases of new diesel locomotives and assocaited equipment while writing off considerable prior investment in electric infrastructure and worse having to pay to have it dismantled and removed from the network. Best to do the economic analysis specifically for each application and site. The result can be counterintuitive. Ah well, that's economics, engineering and life!

Sione

Ronald Brak said at August 6, 2012 2:34 AM:

Sione, no I don't get it. For Germany to be a debtor nation it would have to owe foreign nationals more money than foreign nations owe it. This is not the case so I don't see how Germany can be a debtor nation. Its current account balance was around $150 billion in 2011 and its cummulative current account balance is around a trillion dollars. And note that while German public debt is around $2.7 trillion, most of this debt is owned by Germans.

Engineer-Poet said at August 6, 2012 10:47 AM:

Sione, there is this thing called "reading comprehension".  You're not so good at it.

In regards to electrified transportation, as a govt initiative it is merely another contestant for funding
Private railroads, currently prevented from electrifying their tracks by EIS demands and local property taxes, are somehow part of a government initiative?  Logic escapes you.  Absent any change in taxes, the only reason a rail line would be de-electrified is if traffic was so low that the increased energy costs was paid for by reduced maintenance and the interest on the scrap value of the equipment and wires.  For lines like those heading east from Los Angeles, the chances of that happening are slim and none.
Anything the govt is going to do requires funding. That funding can only come after it is first expropriated from productive people.
You mean like tax breaks for domestic oil production, a good chunk of the US Navy devoted to protecting tankers in and out of the Middle East (without being paid for the work), and so forth?

Here's what a leftist radical said about it:

"We subsidize domestic oil and gas production with generous tax breaks, penalize sugar-based ethanol from Brazil, and block investment in nuclear energy. Our navy assumes the prime responsibility for securing the oil routes from the Middle East, effectively subsidizing its cost. Thus, we don’t pay the full cost of Middle East oil, either at the oil-company level or at the pump.”
Excuse me, did I say leftist radical?  That was Mitt Romney.  If we paid the full cost of petroleum at the pump, batteries would already be competitive; only government subsidy of oil blocks this.  We could have commercialized plug-in hybrids in the 1970's (in addition to improved fuel economy, the reduction in throttle transients would have made pollution control far easier).  Instead the US continued a policy of subsidizing petroleum instead of taxing it, leading us to where we are today.

Ronald Brak said at August 6, 2012 1:47 PM:

One thing that often seems to be overlooked is lithium ion batteries cost under $400 a kilowatt-hour when mass produced for the electronics industry. While the characteristics of an electric car battery pack are not quite the same, I'm pretty confident the cost of electric ar battery packs can be brought down to around this level. Price reductions after this point might be slow or require a significantly different battery technology. And while still not as cheap as I would like, they would be cheap enough.

WJ said at August 7, 2012 8:09 AM:

"The major expense of the batteries isn't the raw materials, it's the cost of construction. A big part of the problem is getting enough production volume to start working down the experience curve."

If that were so then it would be in the government's interest to subsidize purchases, and they've stopped doing that.

"You mean like tax breaks for domestic oil production, a good chunk of the US Navy devoted to protecting tankers in and out of the Middle East.."

Not really as much as you think. The vast majority of our oil comes from within the US or else nearby states, like Mexico, Canada, and Venezuela. Of course taking Middle East oil off the market would raise prices everywhere, but the Middle East needs to sell that oil as much as we need to buy it. Those countries have mouths to feed. They don't make much else. When's the last time you bought anything that said "Made in {Middle Eastern Muslim country}"? I have some underwear made in Jordan, a rug I got in Turkey, and that's about it...

Nick G said at August 7, 2012 12:17 PM:

Randall,

I'm afraid I don't have time to do a lot of digging, but here are some thoughts,

1) Battery prices appear to be continuing their long-term decline rate of 7-10% per year. The Reuters article says that consumer li-ion is going for $300/kWh: that's 25% less than several years ago. Please note that consumer devices have the advantage of large volumes, but their size is small and costly. For instance, a Droid Razr Maxx has impressed reviewers with a massive battery, at .0125kWh. The Volt's battery pack is 1,280 times as large. So, if the Volt gets to 50k vehicles per year, that's equivalent to 64M cell phones. That's scale!

On the other hand, individual cells for automotive uses are much larger, which is cheaper to manufacture (per unit capacity) and can use cheaper materials (because weight isn't nearly as critical).

The bottom line: automotive traction batteries will be cheaper than consumer batteries (which continue to fall in price, driven by intense pressure from places like Apple).

2) The overall price of an EV is a very complex mix, and can't be reduced to the cost of the battery. Car makers have many costs: drive train; ancillary devices such as steering and braking; suspension/wheels; body (including aerodynamics); etc. Almost all of these have to be redesigned for an electric drive train (which includes EV/HEV/PHEV/EREV) because the design requirements are very different. For instance, ICE vehicle efficiency is dominated by weight. Weight is much less important for EVs because they have regenerative braking, so aerodynamics move strongly to the forefront. Another example: elimination of mechanical control and power transmission (brakes, steering, etc) affects a lot of secondary systems. Heck, window wipers get redesigned!

Battery packs are complex: there are the individual cells; the connections; cooling and heating systems (air and liquid); charge and discharge management systems; temperature sensors, heat insulators and radiators; electronic communications and control, with hardware and software (including 10M lines of codes, more than recent fighter jets); containment systems, structural support and crash protection; etc.

So, economies of scale apply to the whole car, and cost comparisons are complex. That's why I raise the example of the Prius C, which has the advantage of Toyota's economies of scale and willingness/ability to aggressively price a new vehicle based on long-term costs before it has achieved the large sale volumes which will enable those low costs.

A Prius C has both ICE and electric drivetrains, each of which are sufficient to drive the vehicle. That's substantial duplication. And, they have a full battery pack (with battery management), yet they can price the vehicle starting at $19k. We can get a pretty good idea what a small PHEV could cost, based on that. Of course, we have a plug-in Prius for the purpose of analysis, but it's larger, and IMO Toyota isn't pricing it quite as aggressively because it's newer tech (e.g., it uses li-ion), and Toyota is very careful with it's roll-out rampup of new tech (especially lately, with it's recent quality failures).

The Ford quote is a good example of this complexity. Look at the range of costs: 12k-15k! Ford's purchasing guys know what the battery cost to the penny, so that tells us that Mulally is including a lot of stuff in that figure, and signalling to us that the line of inclusion is very fuzzy. The alternative is that Mullally does't know anything about the EV program, which seems unlikely to me.

3) I don't think oil prices will stay above $150 for an extended period of time any time soon. I was just using hyperbole to point out the cost effectiveness of EVs (including all their variations), so that we can all be clear that suburbia is not threatened by PO (for better or worse).

4) I think everyone in the car industry is agreed that li-ion is the future. On the other hand, Toyota can be paradoxically conservative, and NIMH has worked quite well for them, so they're going to transition away from it slowly. For instance, the main Prius and the C continue to use NIMH, but some new versions like the plug-in, and the V (in Japan and Europe) are using li-ion.

Nick G said at August 7, 2012 4:10 PM:

WJ,

What you said about oil exporters needing to sell their oil makes sense. If only US foreign policy was that sensible. Unfortunately, it's clear that US policy makers, business leaders and military strategists don't agree with such sensible ideas.

As long as that's true, we have to include in the cost of oil the cost of the military spending to protect world oil supply "stability".

“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil”

Alan Greenspan, in his 2007 memoir.

Nick G said at August 8, 2012 9:12 AM:

Randall,

There are several a basic disconnects in these articles.

First, external costs like security of supply (both short term and long term), criteria pollution (sulfur, mercury, etc) and climate change are very, very real. Not including them is just dishonest - if a media writer wants to focus their article on slow adoption rates due to artificially low market prices, that's fine, but they should make that explicit.

2nd, if analysts are going to exclude real costs (as discussed in #1) and focus on market prices then they must include the current EV rebate, as that's part of the market price. To exclude both external costs and the rebate is doubly dishonest. Please note that the EIA analysis referenced in the article, that claims that EVs are not yet competitive, does just that.

3rd, an honest market price analysis that looks at the entire lifecycle, includes maintenance savings, and uses realistic assumptions about operations, miles driven, etc, will find that pure EVs are already cost competitive - that is to say, their costs no higher than for ICEs. Hybrids are currently the sweetspot for low costs, but PHEVs and EREVs will claim that spot reasonably soon.

The EIA analysis does flaky things like assuming a very low annual mileage driven for new cars; no rebate; a very low percentage of all-electric miles for EREVs; and invalid comparisons of the Leaf with the Versa and the Volt vs the Cruze.

Nick G said at August 8, 2012 9:22 AM:

One final thing - we can't evaluate adoption rates for vehicles like the Volt without acknowledging the vicious propaganda campaign being waged against them by the media, especially Fox and talk radio hosts like Limbaugh.

Da55id said at August 8, 2012 3:48 PM:

I'm amazed that not one person inquired about the fact that I'm driving a Volt. Today I drove 45.9 miles on a single charge.

Nick G said at August 8, 2012 4:04 PM:

Da55id,

That's great! How do you like it? What conventional car would you compare it to?

Engineer-Poet said at August 8, 2012 8:57 PM:
The vast majority of our oil comes from within the US or else nearby states
So?  Almost all of Europe's oil comes from the ME, and neither Europe nor the Gulf states are paying us for our police services (besides pricing oil in $US instead of € or renminbi).  Five bucks a barrel for product going either way (Iran imports gasoline, or used to) ought to pay us roughly $100 million per day, $36 billion a year.  That's a decent chunk of the DoD budget, and we ought to be insisting on it.  We're the obvious candidates for the job; after all, the US Navy doesn't put tankers in our ports and implicitly threaten to shoot the crews if not paid; Somalis do.
Da55id said at August 12, 2012 7:38 PM:

Nick, The car is astoundingly good and feels like a BMW but better. No kidding.

Nick G said at August 13, 2012 8:41 AM:

Da55id,

That's what I've heard - luxury/sports car performance. Certainly worth the price.

Comparing it to a Chevy Cruze, as the EIA would like to do, is absurd.

Engineer-Poet said at August 15, 2012 7:58 AM:

I opined some time back that the problem with the Volt is that its badge is Chevy when it ought to be Cadillac.

Would you agree with that?

Nick G said at August 15, 2012 9:29 AM:

Absolutely.

The problem historically was that they planned to price it much lower (as Toyota would have), in line with where their costs will be eventually with scale and experience. Then their financial problems made it impossible. By then they were comitted to Chevy.

Da55id said at August 16, 2012 7:44 AM:

E-P, I'm glad it's badged as a Chevy so I didn't have to pay for the branding halo of a Caddy. But, yes indeed it fits the Caddy mold more than the Chevy mold. As proof, the next announced Voltec vehicle for 2014 Model Year is a Cadillac

Da55id said at August 16, 2012 7:51 AM:

One more thing...the human factors interface of the vehicle makes efficient driving into an enjoyable video game. Also, the EPA estimate for electric mode range is 35 miles, but my wife and I are consistently getting well into the 40s, and as a result, for the first 500 miles of driving, we have used 3/10s of one gallon of gas. So, if we continue at that pace, we won't go to the gas station until late 2013. One way we are maximizing electric only range is by using our discretion to make long range trips with our 2009 Hyundai Sonata which get 28 mpg highway which isn't too bad.

When the lease expires on the Volt, we will reevaluate based on what's on the market then, but I never want to go back to gas only now that I've driven the future.

Engineer-Poet said at August 16, 2012 11:48 AM:
I never want to go back to gas only now that I've driven the future.
I hope to be right behind you.
Randall Parker said at August 23, 2012 9:22 PM:

Nick G,

Sorry to be so late getting back to you:

I think Mulally probably gave a price range for the battery because he doesn't want to reveal Ford's component costs. That's competitive info. But he wanted to give people a sense of just how expensive a battery is.

Non-battery costs: I think for most of the other components the learning curves for costs are pretty minimal. Lots of the components are similar to components used for other purposes in electrically driven equipment. Also, batteries are such a large cost that the rest of the components do not matter that much anyway.

If the Ford battery cost is at the low end of Mulally's range at $12k keep in mind that's for 100 mile range for a small car. Imagine the cost for 200 mile range. Plus, weight becomes a factor on how much range the car can have.

As for the competitiveness of EVs today if external costs are factored in: Count me skeptical. The manufacturing cost of something is a proxy for how much energy it took to make it. High battery costs make me think high energy costs. So how long till the EV gets us back to carbon neutral?

Nick G said at August 29, 2012 11:33 AM:

A couple of thoughts, while I have a moment,

Mullally's estimate: Ford's major competitors are all world class engineering companies, who tear down and re-engineer competitor's vehicles when needed, and know what most things should cost to the penny (or don't care, because they're pursuing a different tech/process for that part). Bob Lutz, the sponsor of the project, was a battery company CEO for several years before he came back to GM - he initially estimated a selling price for the Volt of $30k, before they realized they'd need to redesign the whole vehicle. Again, that's why they chose Chevy.

Non-battery costs: I'm not thinking about the learning curve, I'm thinking of economies of scale, which are huge.

"cost for 200 mile range": we're getting sidetracked if we're looking at huge batteries. The Volt or the Plu-in Prius are the sweetspot for cost and economy, and will be for some time. Pure EVs are a distraction.

Battery energy costs: energy inputs may be proportional to cost, but they're not large - Battery inputs are paid back very quickly. Perhaps more importantly, they're mostly not liquid fuel.

Nick G said at August 30, 2012 11:02 AM:

Here's something interesting - a $3k replacement Volt battery:

http://parts.nalleygmc.com/products/Chevrolet/Volt-LTZ-4-DOOR-HATCHBACK/BATTERY-Drive-Motor-Battery/2949468/20979876.html

That's only about $190 per kWh. Too good to be true?

anonyq said at August 31, 2012 4:02 PM:

Drives longer than 100 miles are predominantly highway or sightseeing. For the first there are other options and for the second the option is use another car or don't.

Randall Parker said at September 4, 2012 10:18 PM:

Nick,

UCSD physicist Tom Murphy has a blog post on TOD about "the failure of batteries to live up to their promises."

My take: EVs are not going to get cheap enough fast enough to handle most of the mitigation needs for our migration away from oil.

Nick G said at September 5, 2012 3:18 PM:

Sigh.

I think if you take the time to really read my comments, and process them, you'll find that's not true.

Sadly, Tom Murphy may be well intentioned, but his post in general, and this one in particular, are exercises in tearing apart straw men. In this case, he cites an article which suggests that pure EVs won't be ready to replace conventional ICE vehicles any time soon.

Well....duh! Hybrids, plug-ins, and extended range EVs will dominate for quite a long time. For instance, a Prius C appears to be the lowest cost vehicle around. Add a plug and $10k in batteries and you still have a vehicle that's cheaper than the average new vehicle, but gets about 300 miles per gallon of liquid fuel.

Nick G said at September 13, 2012 9:57 AM:

Here's an article which has some useful info on production vs upfront development costs (despite being badly written and obviously jaundiced).

"The actual cost to build the Volt is estimated to be...$20,000 to $32,000 per vehicle, according to Munro and the other industry consultants."
http://www.reuters.com/article/2012/09/10/us-generalmotors-autos-volt-idUSBRE88904J20120910

The midpoint of $26k is $4k less than the price of the average US new light vehicle. These production costs will drop substantially and reliably with economies of scale; manufacturing experience; technical change (improved battery chemistry and management) and engineering improvements.

vivek said at August 5, 2013 4:36 AM:

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