For electric cars to be truly cost-competitive with gas-fueled vehicles, battery costs need to drop dramatically. The rule-of-thumb has been that the cost of the battery pack in an electrical car needs to drop to $150 per kilowatt/hour or less. A few years back, it was standard to read that battery packs in electric cars were costing $700 per kilowatt/hour or more. Given the historically slow pace of progress in battery technology, it looked as if achieving these costs savings might be three or four decades away.
…the market leaders for electric cars have already reached a cost of $300 per kilowatt-hour–that is, they aren’t just writing with another set of predictions for how batteries will improve, but arguing that they have already improved.
…On this trajectory, nonsubsidized electric vehicle would be commercially viable in about a decade.
I have my doubts that batteries will improve at a high rate going forward. I suspect that energy efficiency will improve at least as quickly. That means that in relative terms, all-electric cars will gain little, if anything, on gasoline-powered cars.
[UPDATE: A reader writes,
In March 2013 Bjorn Lomborg wrote a piece for the WSJ suggesting that electric cars have “a dirty little secret”: these cars are much more energy intensive to produce, especially because of the mining of lithium for the batteries. As a result, there are no environmental gains from such cars until they’ve been driven about 80,000 miles. So the real effect of the subsidies to get people to buy such vehicles is to allow upper income people to feel good about themselves. That’s a laudable goal for a government program, isn’t it?
This is a general problem with trying to be a “green” consumer. When X costs less than Y, the market is telling you that X uses fewer resources. When you think that X uses too much of a particular (seen) resource and you buy Y instead, then you use more of another (unseen) resource.
Take a look at the underlying study in “Nature, Climate Change”. I did not find its claims, methodology, or data point selections very persuasive at all. A simple chart of prices per kilowatt-hour from major vendors of large-capacity lithium rechargeable batteries would have shown a much flatter curve.
A quick way to test the validity of the projection is to notice that the battery pack is perhaps the largest single cost in an all-electric vehicle. Even at $300/kwh, the Tesla S 85kwh pack would cost over $25K (as I understand it, it currently costs nearly twice as much, and sticker price of the cheapest vehicle model, before substantial subsidies, is around $100K).
Well, so if battery prices were coming down so fast, then the price of Teslas and Phiskers and Nissan Leafs – or Segway batteries, for that matter – or any product the cost of which is dominated by a battery expense – should also be coming down noticeably. Do we see this? It doesn’t look like it. So why not? The simplest answer is, “battery prices are not really coming down.”
Then again, lithium commodity prices are about half of where they were four years ago, but if that makes batteries cheaper, then it’s (1) probably temporary and a few years of data are not good for drawing out extended extrapolated projections, and (2) probably not due to any major technical innovation which is likely to high a permanent impact on lowering the price of the key commodity input factor.
I’ve been hearing about battery and solar prices “coming down fast!” for over a quarter of a century, but the era of genuine competitiveness always seem to slip the same distance into the future.
Another of the bottlenecks is high wattage hookups. Greater battery capacity doesn’t help with this, it makes it worse. We should probably ask car companies to work on gas mileage improvements that can also help electric cars rather than just gasoline engines which ironically may be counter-productive in reducing gas consumption.
Battery prices coming down have little to do with battery costs coming down in an industry with growing demand where profits are being reinvested in expansion.
I suspect that energy efficiency will improve at least as quickly. That means that in relative terms, all-electric cars will gain little, if anything, on gasoline-powered cars.
I don’t think that follows. The dominant benefit of a gasoline car over an electric car is in lower cost of manufacture, not in efficiency. Energy efficiency is an ongoing consideration. Battery cost is a one-time consideration. If electricity were free and gas were $3 a gallon, a gas-powered Accord would still be cheaper over its entire life than an electrically powered Accord.
I think you misunderstand the cost reference. Taylor isn’t talking about energy costs. They are talking about how much batteries cost per kwh of capacity.
Electric cars can be quite a bit cheaper than gas cars because they are much simpler mechanisms. They aren’t cheaper today because of the massive differences in scale and maturity of design, but that will change.
We are approaching a threshold where the potential market for batteries is hundreds or perhaps thousands of times larger than it was a decade ago. I doubt there is any other area of tech that has the same potential for growth. This is happening in 5-7 years, tops.
I don’t misunderstand the cost reference. I was taking as a given the original post’s “doubts that batteries will improve at a high rate going forward.” My comment was that the dominant cost of electrical cars is in manufacture and not addressable by efficiency gains.
But rereading it, Arnold may be thinking that proportional efficiency gains in miles per kwh would accrue to lower manufacturing costs in decreased battery requirements. If so, then electric cars should gain on gas cars as such efficiency gains in gas cars arise from more complicated and therefore expensive gasoline engines while such efficiency gains in electric cars accrue in cheaper battery requirements.
“If electricity were free and gas were $3 a gallon, a gas-powered Accord would still be cheaper over its entire life than an electrically powered Accord.”
This sentence sounded like a statement rather than an illustration of fixed vs ongoing costs. This is why I was never excited to get a Prius. I still don’t think it makes sense. Maybe it did for a while at the peak of gas prices. But it also makes one wonder, if electricity were produced by nuclear, what impact carbon taxes might have.
Sorry, but nobody is talking about proportional efficiency gains in miles per kwh. Arnold is talking about the idea that gas cars are also still getting more efficient. And he’s right, of course. But that always happens.
An analogy would be computer storage. Hard drives have been around for decades, and now there are solid state drives (SSD), which are much faster and simpler. Hard drives are mechanical devices and are much more complicated. SSD drives were very expensive, and they still are 2-3 times as costly, but the costs are plummeting and soon you won’t see any hard drives any more.
This is completely about how much it costs to manufacture the batteries that go into the car.
There seems to be more non-car battery avenues as well. It is harder to imagine that lawnmower gasoline engine development helps auto innovation than it is to think cell phone batteries and electric car batteries can cross-pollinate.
On the other hand, as electric cars grow gasoline prices might drop. I don’t know if this is how economics actually works. But, if the bifurcation to electric cars flips like an on/off switch but requires some market share threshold it might take a little longer.
Nothing wrong with stuff getting cheaper. It still leaves a couple of big questions open:
1. Will the range be comparable to gasoline engines? How far can I go in a Nissan Leaf before I need to recharge vs. a full tank of gasoline in, say, a Nissan Maxima? What about the battery charge times vs. tank refueling time? If a significant disadvantage persists for electric vehicles along these dimensions, it will have to make up for that by getting even cheaper. Not just comparable in cost, but significantly cheaper to be worth the trade-off in time and frequency of refueling/charging.
2. Useful life matters a lot, too. The fact that a big battery for an electric car becomes as cheap as a gas powered car means nothing if the battery has to be replaced every five years or so. On most gasoline powered cars, as long as you do the regular maintenance, the engine is probably the last thing that will wear out on your car. You can get a good 10 years or more out of ’em.
3. Are there real environmental benefits to using electric vehicles? From the little I’ve read on the subject, the answer is “not really.” I know the Prius was a fad for a few years, but I feel as though consumers are a little more rational than usual with large purchases like automobiles, so for EV’s to catch on with John. Q. Officedrone, I think there needs to be a clear, demonstrable benefit, either in carbon emissions or air quality. Not sure that will be the case. Battery acid is a pretty nasty substance. If the auto market starts demanding lots more of it be manufactured, used, and then disposed of, some fraction of that stuff is going to wind up leaking or being dumped somewhere that is going to upset a lot of people. On the flipside, oil spills and well fires are nothing to laugh off, either, so falling demand for gasoline should curb incidences of those, too.
1. I’ve just ordered a Nissan Leaf to have as my commuter car. We also have a larger gasoline car in the family, but my guess is that the Leaf will go about 3x more miles per year. For trips where range is an issue, we’ll use the gasoline car. I think this will be a fairly common scenario until batteries are cheaper and the charging infrastructure is better.
2. Electric vehicles provides distinct advantages in comfort and performance, actually. Virtually no noise, better acceleration, better reliability/less maintenance and no local emissions adds up. Plugging in at home every day might not be worse than the weekly stop at the gas station.
3. Some tech is converging here. Smartphones, autonomous cars and electric vehicles will work wonders in combination. People will simply not want to own cars anymore. We’ll just order driverless taxis using our smartphones and the system will choose one with a suitable range for our trip and take care of charging afterwards .
4. The Leaf battery apparently has a really long life, longer than initially expected. Also, the rest of the electric drivetrain has better longevity than the gasoline drivetrain.
5. As far as I’ve read on the subject, there is a lot of environmental benefit to electric cars, but of course, it depends on the electricity production methods. However, some of the increased demand from EVs will destroy other demand and thus give no net emissions. Some damand will be provided by investments in less-polluting electricity such as nuclear or the gas-wind combo.
6. The battery cost of $150/kWh might be what’s needed for more or less full penetration in the American market. However, for the commuter-car-scenario I mentioned, current prices are already ok. Especially, I might add, in much of the world (including Europe and Japan) where gasoline prices are taxed to cost more than twice the American price.
Dr. Kling,
“When X costs less than Y, the market is telling you that X uses fewer resources. When you think that X uses too much of a particular (seen) resource and you buy Y instead, then you use more of another (unseen) resource.”
This is the payoff sentence of your post. It should be shouted from the rooftops once a day. Think farmers’ market produce: Tasty, yes. But it’s not green, it’s magenta.
Ken
Electric vehicles are more expensive much like initial plasma and LCD screens were more expensive than the incumbent CRT technology. However, I, and many others I presume, correctly predicted that due to flat screen’s lower weight, they would eventually be much, much cheaper.
So, the higher prices were a transient result of immaturity and, not to forget, of production volumes that was not yet enough to satisfy demand at prices close to marginal costs. The manufacturers would opt to make good profits for a while until production had scaled.
It is not difficult to predict today that the simplicity of the electric drivetrain coupled with the much improved comfort and performance of the electric drive will eventually yield an easy win. We can argue about timing, but that it will happen is a given.
As I hinted by choice of example, my point was about the generalization I quoted, rather than about the particular domain (electric cars) it is applied to here. But since you brought it up:
The quoted sentence applies just as well when tomorrow’s technology is expensive as when it has become cheap. The expensive “green technology of the future”, however low-resource-consuming it may eventually become, is not so at the time of the expensive purchase. It’s magenta, not green*. It may be a good deed in the long run to make that purchase, but that is hard to know. Technologies of the future don’t always get there. We may agree on this point.
Also, aren’t the key issues with electric cars that charging is slow and the on-board storage device very heavy? Plus, of course, it still requires energy – fossil, nuclear, or renewable – to create that charge. When we can drive into the recharging station and pick up the equivalent of 20 gal of gasoline in fifteen minutes, at favorable unsubsidized prices for vehicle and fuel, and the car doesn’t weigh 2 tons, these challenges will have been met.
Here I think we probably disagree. I’m dubious and you seem to think we’re looking at the inevitable. If I were a betting man I’d propose a bet. But I’m not. Too much overhead. So we can both watch the unfolding of this market and see where it goes, quietly confident that the other one will ultimately have egg on his or her face ; ) As for me, I can’t lose. I’d much rather be proved wrong and wear egg than right and not.
Ken
* In the printer’s inks, magenta is the color that amounts to not-green, just as cyan is not-red and yellow is not-blue.