Reviewing the Case for Electric Cars

In 2010, my paper “Electric Cars: Not Ready for Prime Time” examined the case being made for electric cars and the technical and economic hurdles to be overcome to enable them to have more than niche role in the market.

Recently representatives of the organization Secure America’s Energy Future (SAFE) visited Washington to promote the “all out electrification” of the vehicle fleet. Responding to this lobbying, one of my recent posts (“What’s Really Behind The Anti-Oil Movement?”) criticized the group’s advocacy of what can only be described as an energy industrial policy. SAFE responded by claiming that my assessment was inaccurate and biased—in particular, arguing that the cost of battery packs and charging were much less that I claimed.

As a result of this back and forth, I decided to take another look at the cost and technical factors of electric vehicles.

SAFE asserts that the cost of electric vehicle battery packs has dropped substantially, from “more than $1000 kWh in 2008 to approximately $600 in 2009/2010.” The organization’s bottom line is that electric vehicles will soon be commercially viable and more reliable than gasoline vehicles and that justifies “early, aggressive, and temporary” government support.

However, the contention that the cost of battery packs has dropped dramatically and is approaching the point of commercial viability is inconsistent with recent technical analyses and assessments.

A 2009 National Academy of Sciences analysis ranks as the most thorough one to date. It concluded “the cost of plug-in-hybrids are high—largely due to their lithium-ion batteries—and unlikely to drastically decrease in the near future” as well as “steep declines in cost do not appear likely over the next couple of decades.” At that time the battery pack cost for a vehicle like the Chevy Volt was cited as being “about $14,000.” NAS stated “while these costs will come down, a fundamental breakthrough in battery technology, unforeseen at present, would be needed to make plug-ins affordable in the near future.”

SAFE and other supporters of a rapid transition to electrics could claim that the NAS assessment is out of date. It isn’t. Just last month, Joseph White at The Wall Street Journal reported:

In presentations Tuesday and Wednesday at the annual Society of Automotive Engineers World Congress, senior auto-industry executives in charge of technology strategy, research, and regulatory issues delivered the same message: Barring an unforeseen breakthrough that significantly drops the cost of automotive batteries, fully electric cars and plug-in hybrid vehicles are likely to remain confined to a niche of under 10% of the market through 2025 and beyond.

That’s the same message NAS delivered in 2009, even though the Obama Administration has provided $2.4 billion in grants for electric vehicles or battery production since then. And the lobby is now seeking $121 billion more in taxpayer funding. Perhaps that’s part of the reason why executives at the same World Congress event said they believe that achieving a fleet average of 54.5 mpg by 2025 is more realistic than widespread fleet electrification.

A 2011 report by the Belfer Center at Harvard, “Will Electric Cars Transform the US Vehicle Market,” reiterated similar subsidy-related concerns, concluding rapid electric vehicle penetration was dependant on gasoline prices and government funding. Belfer also concluded that there’s no consensus on future battery costs. And according to Green Car Reports, “the actual cost of lithium-ion battery packs is one of the most closely guarded secrets in the electric-car world.”

There does seems to be a consensus that achieving the U.S. Advanced Battery Consortium cost target of $250 kWh depends on both advances in technology, economies of scales, and reductions in manufacturing costs. However, those developments are unlikely to happen anytime soon. As MIT’s Technology Review recently concluded:

Electric vehicles are still too expensive and have too many limitations to compete with regular cars, except in a few niche markets. Will that ever change? The answer has everything to do with battery technology … The problem, however, is that despite several decades of optimization, lithium-ion batteries are still expensive and limited in performance, and they will probably not get much better.

The Obama Administration has placed a major bet on lithium-ion technology while researchers think that a major shift in battery technology may be needed for battery packs to be commercially viable. The Washington Post’s Charles Lane recently expanded on this problem:

[P]rogressives’ fascination with electric cars and other alternative-energy schemes reflects their own refusal to face the practical limitations of alternative energy — limitations that themselves reflect stubborn scientific facts.

He went on to say, looking back on 40 years of government support for alternative energy, “any company that figured out how to build a practical mass-market electric car would be swimming in cash. That no one has done so suggests we are bumping up against the limits of nature, not just politics or economics.”

Writers like Lane speculate that the money spent on alternatives to oil might have been better spent on advances to the internal combustion engine. Beyond the battery challenge is the infrastructure challenge. Enthusiasts continue to discount those challenges or look to large subsidies to overcome them.

The Belfer study addressed the adequacy of infrastructure. It concluded that most EV owners “will find charging that takes 7 hours or more–unacceptable. The next step up in in-home charging systems costs from $1,500 to 2,200. At home charging is fine for people who have short commutes and return home daily. For others, commercial charging stations are necessary. The ultimate goal is “quick charging” that would take about the same time it takes to fill a car with gasoline–several minutes. Such a system is technically feasible, though according to Belfer it “would subject the battery pack to significantly greater wear … and would put an enormous strain on the existing electric distribution systems and would require an industrial sized substation to handle the power surges at each individual location.”

Over the next two decades, light duty vehicles will become significantly more efficient. Over this period, there may be substantial advances in battery technology but those will come from investments in R&D, not government mandates or wishful thinking.