Battery Costs Will Slow Acceptance of Extended-Range PHEVs - Report
By John O'Dell December 15, 2009Because we are charged with covering the world of alternative fuels and vehicles here at Green Car Advisor, we sometimes get caught up in the excitement of new things to come and need to remind ourselves from time to time that there's no smooth and easy road to the future.
In that vein, we asked contributor Danny King to parse a report, released Monday by the National Research Council - an arm of the National Academy of Sciences - that takes a dispassionate look at how extended-range plug-in hybrids such as the Chevrolet Volt and rechargeable battery-electric vehicles such as the Nissan Leaf might fare.
Slow but steady seems to us to be the short version, but read it for yourself.
By Danny King, Contributor
Plug-in hybrid electric vehicles such as the Chevrolet Volt are at least two decades away from widespread U.S. adoption and broad acceptance will require at least tens of billions of dollars in government subsidies, the National Research Council said in a report issued Monday.
Barring subsidies and a significant increase in gasoline prices, broad market acceptance of battery-electric vehicles will be tamped down by battery costs that will keep the average price of a car with a Volt-sized battery more than $10,000 higher than a similar non-hybrid vehicle through at least 2030, according to the council, an arm of the National Academy of Sciences.
The report backs recent findings of a coalition designed to support the growth of plug-in hybrid vehicles, or PHEVs.
For a car like the Chevy Volt, which has a rechargeable battery capable of delivering up to 40 miles of range (PHEV-40), the cost premium relative to a similar gas-powered car is estimated to be $18,000 in 2011 and still would be about $11,000 in 2030, the NRC report said, citing a recent study by the U.S. Energy Department.
The cost premium for a PHEV with a 10-mile all-electric range (PHEV-10) is expected to average $6,300 in 2011, falling to $4,100 in 2030, and battery prices slowly decline.
Because of such costs, PHEVs will account for only about 4% - 13 million vehiles - of the expected U.S. fleet of 300 million vehicles in 2030, even when factoring in a gas price increase to about $3.50 a gallon, according to the report.
By then, the price, in today's dollars, of PHEV-10s will average $28,000 while PHEV-40 prices will be about $10,000 more.
"Lithium-ion battery technology has been developing rapidly, especially at the cell level, but costs are still high, and the potential for dramatic reductions appears limited," the report says, adding that government subsidies of "tens to hundreds of billions of dollars" will be needed to make PHEVs cost-effective.
"PHEV-40s are unlikely to achieve cost-effectiveness before 2040 at gasoline prices below $4.00 per gallon, but PHEV-10s may get there before 2030."
Because plug-in hybrids such as the Volt (above) and Fisker Automotive's luxury Karma (right) - both due to go on sale late next year - can also run on gasoline., which fuels their on-board generators, some automakers and analysts foresee strong demand because they eliminate the "range anxiety" seen as one of the main shortcomings of battery-only electric cars.
Still, even supporters of widespread PHEV and EV adoption say huge governmental subsidies will be needed.
A coalition that includes Nissan Motor Co. CEO Carlos Ghosn and Federal Express CEO Frederick Smith last month proposed a plan to have 120 million PHEVs on U.S. roads by 2030 and said it would require a federal government investment of $120 billion over the net eight years.
The plan called for upgrading auto plants, improving electric grids and creating an electric-charging infrastructure throughout the U.S. to support travel in rechargeable battery-EVs.
The Volt, on track to become the first mass-market plug-in hybrid in the United States, could cost as much as $40,000 before a $7,500 consumer tax credit is applied, GM has said.
The automaker expects to sell about 10,000 Volts in the first year of production and 60,000 in its second full year. Meanwhile,Toyota said this week that it will start selling "affordable" plug-in hybrid Priuses, which can travel about 15 miles in electric-only mode, in 2011.
Nissan says its all-electric Leaf (right), which will go on sale in limited numbers in in the U.S., Japan and Europe by the end of next year, has a range of 100 miles on a single charge. While no price has been set, Nissan executives have hinted that the car may be available for less than $35,000.
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