The first seem entirtely plausable, but probably don’t contribue significantly to the bottom line. Redoing the interior can be done in such a way that it does cut costs – replacing the capacitive touch interior with buttons like every normal car out there, shrink the center stack display (keep the width but switch it to 16:10 widescreen instead of 4:3), looking for off-the-shelf parts and adapting designs to them instead of having to order any semi-custom or custom parts (re-using parts from other cars). But I would estimate they probably couldn’t save more than a thousand dollars this way. Moving some of the more expensive features to options (like the Bose audio system) helps too, but its rearranging the deck chairs, its not fundamentally making the technology any cheaper. Moving to mass production helps – when you factor in overhead and capital costs (the machines, training, supervisors, QA, etc), mass production does help spread those costs out over more vehicles, reducing per-unit costs.

That last option – cutting the battery in half – might seem like killing the main purpose behind the vehicle, but it seems a lot more plausible when you consider the use of plug-in stations at people’s offices. Even in the summer, energy usage in the morning hours (before 10A) are still considered off-peak, so you could recharge the entire, smaller, battery before on-peak charges started. Going to a smaller battery would mean that GM would need to alter the characteristics of the battery – more power and less energy storage per kg of battery material. There are two main issues with shrinking the battery pack in this way – the power output of the battery pack and the cycle life. Power output is governed by the rating of the individual cells as well as the number of cells in the pack. The cycle life would have to compensate for the batteries being recharged twice or even three times per day instead of once at night.

Reducing the battery pack would also reduce the federal rebate – from $7,500 to $4,600 ($2500 + $417 for each kWh above 4kWh). If you’re cutting the price by total vehicle price by $10,000 but losing $2,900 of the rebate, your effective cost reduction is only $7,100. However, this would still push the after-rebate price down from $33,500 to $26,400, or the price of a nicely equipped Toyota Prius. The 2012 plug-in Prius is expected to have a price in that rage, but it is unknown if that included the $3,000 rebate or not (its likely it did – I’d estimate the full price of a Prius plug-in at around $30,000).

The sticking point appears to be the battery. GM would need a batter that is more capable that what is available today, but only by a little. By the end of 2012 or sometime in 2013, such batteries will be available and probably have markedly decreased cost over batteries of today (mostly due to the large quantities in which they will be produced – Toyota will likely be using a similar type of battery, but with less stringent requirements since batteries only provide partial power in the plug-in Prius – up to 62mph and normal acceleration).

The success of a 20-mile range model is highly dependent on building a charging infrastructure outside of people’s garages. Offices and shopping centers will need to build the necessary infrastructure to handle vehicle charging, as well as utilities monitoring and managing the charging using the smart grid. But if the infrastructure materializes, why not use it to it’s fullest while accelerating the use of electric vehicles and reducing oil consumption until batteries are cheap and plentiful.

And it’s definitely better than filling up once a week at $4/gal!

* MSRP is only a suggestion – some dealers have tacked on $5,000 or more onto Volt sticker prices because of their limited quantity and uniqueness

But my question is more a question about innovation. If Li-Ion batteries improve 8-10% per year, do you want to invest anywhere between $8,000 and $15,000 for a battery in the first few years of this decade? Even after prices level out, will a 40% increase in range (or a similar decrease in cost) be enough to keep you from buying the battery outright? What about the residual value of the battery after 8-10 years of (ab)use in a vehicle.

The first premise is that batteries improve 8% per year. This appears to be close to constant (until major step-changes like changing chemistry from NiMH to Li-Ion), and has been noted by Elon Musk of Tesla Motors.

The next premise is that if batteries are constantly being improved, and will continue to improve until at least 2030 (around the time we hit the theoretical limits for Li-Ion), that constant innovation will push prices on older batteries down, in the same way when Intel produces their fastest chip and put it in the top of their price list, everything else gets knocked down a pricing level. Beyond that, as production ramps up, per unit costs will come down. This is a double whammy on battery prices – as such A123 representatives have speculated on end-of-2012 pricing of $400/kWh from about $750 in mid 2010 (a kWh will propel a Prius-like car approximately 4 miles, and a large Ford Explorer-like vehicle about 2.75 miles.

The argument to buy says its bad to lease anything because you don’t end up owning anything. At the end of the five year financing, you own the car and battery. But over time and with each recharge, batteries lose capacity, and that could be exacerbated depending on the climate you’re in, how you treated it (faster recharge = more degradation), if it is liquid or air cooled, etc. The return-on-investment calculations vary depending on your driving patterns, so you need to make sure that an electric car is right for you. If you lose your job or change jobs and your driving patterns change significantly, you might find yourself not having a positive return-on-investment compared to buying a traditional gasoline or regular hybrid car (you might end up not driving enough or driving too much per day).

The leasing argument is much more interesting (and complicated). The reason to lease is that the battery has a fairly fixed lifespan – 1,500 cycles or whatever the cell manufacturer promises. However, even after the batteries might no longer be suitable for driving (this would adversely affect the resale value of the car), they can still be used in applications like power grid storage and stabilization. This residual value of that battery could be 50-75% the price of a new battery. Returning the car after the lease and letting the dealer replace the battery, send it back to be remanufactured into something useful, and then installing a new (lighter, more powerful) battery and updating the car’s system for that battery is an easier course for the consumer instead of having to do that and pay for it before trying to sell it, or take a hit on trade-in value.

Leasing can also bring down the per-month costs – instead of paying for the entire car, and then getting a substantial bump in the trade-in value for the battery, the user (for the most part) only pays for the depreciation of the car during its use. As seen in both the Chevy Volt and the Nissan Leaf, the price for the lease (estimated $350/mo) is much less than what you would expect on cars costing between $27,000-33,000 after tax incentives.

Another non-conventional argument for leasing is the increasing rate of technology invading vehicles. From in-car entertainment, in-car communication (think: replying to text messages verbally), to safety features. While I don’t have a problem buying a new $300 iPhone every year, I certainly will not buy a new car with such frequency because its in-car entertainment is better than the car I currently have (software upgrades aren’t likely to help much in terms of adding new features – my 2009 Ford Escape hasn’t had any new features added to its in-car computer systems since I bought it). By 2015, most cars should have anti-collision systems to stop the car before it rear-ends the car in front of it (its already on some high-end cars today). By 2025 cars will be able to drive themselves down the highway and navigate to the exit, and even around some roads. It wont be fully autonomous but it will take care of 90% of your driving.

One of the ideas being tossed around is a hybrid – buying the car (shell, interior, electric motors, transmission, etc) and leasing the battery, often in conjunction with battery quick-swapping systems instead of dealing with lengthly recharge times – while battery technology might increase 8% a year, there is no way to increase recharging times for a given level of safety and source electrical systems: recharging a battery after 3-4 hours or 250 miles of all-electric highway driving will take 11 hours at 240V/30A (the most you’ll be able to get at home), and 5.5 hours at 240V/70A (the most you’ll be able to get in a commercial environment – e.g. an office building or parking lot). Even a 480V DC 50kW fast-charge circuit will still take 90 minutes. The only way to rapidly recharge the batteries is to have parallel 50kW fast charging systems hooked to one car, however fast-charging batteries can advance their degradation rate.

Its an interesting decision – there are clear pros to each choice, whether to buy, lease, or just buy the shell only and lease the battery. I would recommend that folks lease a first generation electric vehicle if they want to drive one, simply because of how much knowledge car companies and battery makers are going to learn the first few years about automotive batteries, and you don’t want to be stuck with an outmoded design or fatal flaw. By 2015 the prices of batteries will come down enough making the purchase of a second or third generation electric car reasonable if you carefully compare it to your driving habits compared to the vehicle’s EV characteristics.

WLC, in a recent press release, also stated that their target for their stage I lens production is 27,700 metric tonnes per year of Lithium Carbonate (LCE, or chemically Li2CO3). The math to turn that into the number of EVs is easy – 27,700 metric tonnes is 27,700,000 kg of LCE. In 1kWh of a Lithium-Ion battery there is 0.6kg 0.9kg of LCE (figures in this article have been updated). This means that 27.7M kg of LCE per year is about 30.8M kWh of batteries that can be produced. They have an expected 18 years at this rate of supply to mine (approximately 500,000 metric tonnes LCE total).

In a pure EV (like the Nissan Leaf) the battery is 24kWh, so from 27,700 tonnes of LCE comes 1.28M Nissan Leaf battery packs per year. In a EREV like the Chevy Volt, its battery pack is 16kWh, so 1.9M battery packs would be able to be manufactured for the Volt.

To put these numbers in perspective, in 2009 there were a total of 10.4M cars sold in the US, and in 2008 approximately 13M cars sold. So this single lithium mine could power up to 15% of all the US EVs and EREVs sold, if the automakers could build and sell that many (which they wont, at least initially).

So the question is, how many tonnes of LCE would it take to make every car sold in America a plug-in? From a small two-mode system that would allow for 8-12kWh batteries for 10-15 miles at speeds below 60MPH, all the way up to pure EVs with 50kWh batteries. If we assume that 70% of cars sold are two-mode at 10kW, 20% are EREV (18kWh) and the last 10% are pure EVs (35kWh avg), the total kWh for a year of 14M cars is 197.4M kWh, or 177.3M kg of LCE. So in order to produce enough LCE, we would need to produce about 180,000 metric tonnes of LCE, or about 6.5x the amount of stage I.

The stage II lens has approximately 1.365M tonnes of LCE, and at 180,000 metric tonnes per year, it would be exhausted after 7.5 years, assuming the production rate could be sustained.

Seven and a half years might not be a long time, however there are still several other stages to this mine area (stages three and four), plus there are other lithium mines in the Nevada and the US. It appears that Lithium supplies wont be a blockade on the road to electric cars. While Li-Ion batteries can also contain other precious metals that might be scarce, Lithium shouldn’t be an issue.

[Update 5/27 - updated Lithium math based on Leaf's use of 0.9kg/kWh]

Nissan this week announced that their LEAF EV will be priced at $32,780 in the US before a $7,500 tax credit for electric vehicles. The 220V charging dock (required if you’re traveling more than ~50 miles per day due to recharge times from 110V/8A circuits) is an additional $2,200 (also eligible for a 50% tax credit). The total price (vehicle + 220V charger) after all tax credits is $26,380, and possibly as low as $21,380 is California, Georgia and Oregon due to $5,000 state income tax credits.

Nissan Japan has set a retail price of approximately $40,700 including VAT. After government incentives cost around $33,000.

The most interesting prospect is a $349/mo lease, plus $2,000 down. Further terms and conditions of the lease haven’t been specified (mileage, etc), but considering that electricity is pennies compared to gasoline, even for a 30MPG vehicle, people could get used to paying $30/mo more on their electric bill every month in exchange for no more gas stations. Though it makes me wonder what Nissan would do with all those lease turn-ins in 2014 with a comparatively out-of-date battery and larger EVs.

Mitsubishi responded by cutting the price of their iMiEV electric car by $7,000 in Japan in response to the lower price of the LEAF.

The low price will put pressure on other auto makers to push the price of their electric car downwards. Suddenly, an all electric sedan doesn’t look too appetizing if it is priced over $30,000 (after credit). Specifically, the price that GM will set for the Chevy Volt will likely be pushed down slightly from what they might have been expecting to sell it at. Even though the Volt is essentially an unlimited range electric vehicle due to the gas take and electric generator, GM’s difficulty will be conveying how the Volt works and explaining its benefits over EVs to the general public. An old political axiom applies – if you’re explaining, you’re losing.

It does look like a world of hurt for niche EV makers, Tesla might survive due to its luxury status, but more… exotic cars like the Aptera are likely to see harder times ahead due to price ceilings. The real question is battery supplies. How do the cost of batteries change when mass-manufacturing hits, and the demand for automotive batteries starts to greatly outstrip supply. Do we see prices go up, or can sufficient quantities be made with the existing supply chain?

The Nissan LEAF EV is expected to start selling in limited markets at the end of 2010, and nationwide sometime in 2011.

Elon Musk (Tesla CEO) postulated a “weak Moore’s law” for Li-Ion batteries, that the price/performance ratio will increase by 8% per year, or 9 years to double. The price/performance ratio is the ratio between the price per kWh of the battery pack and the amount of energy the battery can store. If current batteries can store 140Wh/kg and cost $500/kWh, an 8% improvement means either the storage goes up to 150Wh/kg, the price goes down to $460/kWh, or somewhere in between (145Wh/kg and $480/kWh). A Tesla battery pack would go from $35,000 (53kWh at $650/kWh in 2009) to $24,000 ($400/kWh in 2014), a reduction of about 10% of the entire price of the car over approximately 5 years. Combined with other cost saving methods, the next stage of the Tesla evaluation - the Model S – starts to look feasible. Its still not going to be the most affordable car, however significant progress is being made.

The cost per battery pack can be broken into two parts – the batteries themselves and the pack. The pack costs can be trimmed considerably with mass-manufacturing. Instead of hand assembling each battery pack and set of battery modules (a series of cells), semi-automated assembly can increase the throughput of the teams assembling dramatically while keeping the same number of people around, reducing the amount of employee-hours spent per battery pack.

The cell costs don’t come down as easily. This is the decidedly slower part of the electrification of vehicles. Following the 8% rule, automotive battery packs due in 2009 cost approximately $650/kWh. In 2014 this cost is about $430, and by 2017, the cost is $330/kWh, and by 2020 $260/kWh. Following the more agressive price decreases noted above, prices in 2017 would be $235/kWh, and by 2020 $172/kWh.

So by 2020, a Volt-style battery would cost $4,200, or about the cost of a new engine (a rebuilt one can be had for less). This assumes that other battery performance parameters do not improve – rather the Volt still requires a 16kWh battery and only uses 8.8kWh of the battery pack. If the current estimates of what battery specifications will be by 2020 (2,500W/kg, 250Wh/kg, 2,000 cycles and 4,000 recharges at 70%DoD) the Volt would be able to have its pack size reduced to 12.5kWh (50kg, 110kW), thus reducing costs further to $3,250 for the battery pack, and the total price premium of the E-REV system would be approximately $5,500. Factoring that cost over 5 years is $1,100 per year in savings needed over gasoline, which is achievable when factoring in savings in electricity costs over gasoline (approximately 9c or 11c/mile savings depending on cost of electricity), reduced maintenance costs ($150/yr for oil changes, etc) and reduced variability of fuel costs – my electric company needs a regulatory body’s approval to change the price of energy, the local gas station chain can add 10 or 15c to the price of gas over a holiday weekend because they feel like sticking it to us.

By 2030, barring any new technology that would leapfrog Li-Ion on price and performance, battery prices would reach $110/kWh, and total costs would be equivalent to a Prius premium today.

Over the long term, E-REVs are workable from a consumer finance standpoint. Initially, subsidies, longer warranties and extended payback periods will be needed to entice the consumer to buy in to the electrification of vehicles. If we can manage to stick with it for the next 5-7 years, it will take off and the nation can start to wave good-bye to oil and petroleum for their in-city commutes, and we’ll all breathe easier with less smog.

A Japanese firm called Eamex has announced (Japanese translation via Google) that they have developed a new Li-Ion battery that is capable of withstanding 10,000 cycles and 10,000W/kg power. A huge achivement – considering most laptop batteries today can only hold up for 300 cycles, even the high-end batteries in the Apple MacBooks are only 1,000 cycles. Could this be the technology to finally lay to rest the issues of battery life in cars?

While I’m always skeptical of people touting new battery improvements due to the very high lead time between development, sampling, manufacturability and entrance to the market, these batteries could dramatically change the EV/E-REV world, as well as the power storage/back-up world.

The battery cycle life is a dramatic improvement. At 10,000 cycles, a plug-in vehicle could recharge twice a day for over 13 years. The battery not only eliminates the worry about having to replace it during the 10 year warranty. This also allows people not to worry about taking advantage of Vehicle-to-Grid technologies without excess wear on their battery; V2G during the summer months could take a tiny bit out of the battery at peak times and recharge it later.

The second improvement is the 10,000W/kg specific power. This is far and above what most Li-Ion batteries can provide today. Combined with the increased cycle life, you can build EVs and E-REVs with smaller battery packs; closer to the actual amount of energy that would be needed instead of having a limit on the depth of discharge like the Volt. This effectively reduces the cost of the battery by requiring less kWh of storage – batteries that might be $500/kWh to provide a 16kWh battery can be downsized to 10kWh and still provide the exact same performance in a smaller package (100kg instead of 160kg pack weight) while delivering more power than the engine will need. Hybrids will stand to gain from this as well, since a 2kWh battery could easily power the car entirely (200kW, or 266 HP) for a few miles.

From a grid-backup standpoint, the batteries could finally make practical and affordable to capturing cheap energy and selling it at peak demand times. The high cycle life will keep maintenance and replacement costs down, which is necessary when the difference between daytime and night time prices is only 10-15c/kWh.

There are still many questions left to ask – how does the power output of the battery vary with the depth of discharge, how is the charge and discharge and cycle life affected by temperature. They expect to start producing this battery at the end of the year, but who knows in what quantities and if it will live up to the performance above.

via Electronista

I missed on a lot of the renewable energy stuff – wind is definitely getting going with lots of agreements and more work being done on transmission infrastructure, and solar is hurting and didn’t get any sort of comeback this year. Large deals have been made but there isn’t a whole lot of upwards movement in the market.

Apple

• Apple does, along with a few other companies, releases various 7-10″ tablets. (OK, at the time of publication this is a foregone conclusion, but when I wrote this in the middle of December it wasn’t). Apple’s cost the most, but you get the most (e.g. the App Store). Other tablets don’t have the battery life or applications to match up.
• Apple continues to see growth of 20-30% year over year in computer sales (this number will vary depending on how they categorize the “iSlate” – as a computer or a iPhone-ish device, or its own category).
• The iPhone does go Verizon in July (probably announced earlier), AT&T counter by offering tiered monthly data plans – $20 for 250MB or less, $30 for 1GB or less, $45 for anything over 1GB. They do the rate structure in such a way that there aren’t really overage charges, you just get moved into the next tier (if you use 1.01GB of data, its $45).
• AT&T’s network continues to suck and iPhone users continue to complain. Verizon’s iPhone helps but AT&T doesn’t seem to care too much about network performance.
• The iPhone does not go 4G (LTE or WiMax) in 2010. Its expected to go LTE in 2011 as Verizon gets 50 markets online and AT&T still sucks with HSPA 7.2Mb/s network.
• The iPhone does get bumped to 64GB/32GB/16GB for the same prices ($299/199/99). The 3G iPhone goes away and all phones are 3GS. It doesn’t look like a processor or RAM speed bump is in the cards, but there are some new (risky?) features that get added.

Tech

• LED LCDs dominate 2010. Internet connectivity becomes prominent as TV manufacturers push streaming video on demand services like Netflix and YouTube.
• 3D TVs are introduced but don’t get adopted. Avatar gets released in September as the first true 3D Blu-Ray disk, but since BR hasn’t taken off it doesn’t go anywhere.
• 2010 still isn’t the year of Blu-Ray. Its getting close though! Players are available at $99 by Black Friday and things start to pick up for the holidays. I’m still not sure if broadband speeds will increase fast enough to take Blu-Ray out completely.

Green

• Wind continues to dominate the green generation sector. Transmission projects also start to get under construction in the second half.
• Solar recovers a little. But the problem is that the people wanting to middle-scale solar (between 1MW and 10MW and not utilities) don’t have the money and cant get loans to do it. Where available, PACE (property assessed financing) helps individual home owners defray the cost of putting solar power on their own homes by adding the price into their annual property tax assessment for a low interest rate (4-5%), so even if they move the next owner is paying for it through property tax.
• Geothermal still gets little love. 20MW here and 10MW there. No magic increase that gets geothermal to be some huge part of generation.
• Biofuels and biomass start to transition into more mainstream. You see a lot of coal plants augmenting their coal-fired boilers with wood, trying to reduce net CO2 output.
• EVs (Volt, Leaf, etc.) don’t make that big of a splash in the personal transport market because they cant get out that many units because of battery production issues (producing the number of cells and modules necessary). The tech turns out to be solid, but its the cost and production issues. Its somewhat disappointing that the cars have so much promise and they have trouble making them in volume.

Other

• I figure out some way to get a girlfriend this year. No idea how long I manage to keep her, but I do manage to get one. I had one date in 2009, but 2010 is better.
• I don’t do all that well in the stock market.
• I manage to write an iPhone app for myself. Don’t know whether I publish it – if its the one I think I’m writing it wont get published because it uses private APIs.

And thats it. See you next year!

There are a few interesting points that are made in the presentations..

Well-to-wheel Efficiency: They peg electricity generation at only 30% efficient. If you combine the generation efficiencies, transmission efficiency and the energy spent to get the fuel, electricity generation is surprisingly inefficient. However the highly efficient transfer of that electric energy from the car’s battery to the wheels makes up for it. I’m interested in seeing how renewable energy can make the generation of energy more efficient – wind specifically.

CO2 Output: Depending on generation source, a hybrid electric car (like the Prius) can release less CO2 (~90g/km) than a pure EV when powered by coal generation (170g/km). However a traditional gasoline car is about 160g/km.

Cycle Life: Battery cycle life is largely impacted by depth of discharge (DoD)- limiting pack DoD to 50% more doubles cycle life.

Different Types of Hybrids: Outlines the many types of hybrids available – from weak to plug-in.

Payback Times: A comprehensive list of different types of alternate energy transportation vehicles and their estimated payback time.

The estimated battery capacity would be around 250Wh/kg. This is about double of the current batteries (100-140Wh/kg), and assuming a commensurate increase in Wh/L, the batteries would get lighter and smaller for the same energy storage capacity. If we were to drop this battery in a hypothetical generation two LEAF, we could increase range to 130 miles city, 100 miles highway, and still reduce batter weight (and probably volume) by 25-30%. This would cut a 100-150lbs off the weight of the car (roughly 3-4% of curb weight), and would in turn extend the range of the battery another 3-4%.

The batteries are estimated to get 1000 cycles, presumably at 100% depth of discharge (DoD), which would provide 1500 cycles at an 80% maximum DoD, likely for pure EV applications like the LEAF. This would be suitable to deliver at least 150,000 miles of driving on the battery pack before it degraded to 80%, likely far more due to the relationship between average DoD, cycle life and maximum storage capacity – that is, the lower the average DoD, the more full cycles the battery can withstand before equivalent degradation.

Finally, this advancement pushes ahead the development curve of Lithium Ion batteries. For years, the average increase in capacity was 5-8%, but as more companies throw their hat into the ring of battery research and development, we’re starting to see batteries advance faster. We’ll likely never see batteries advancing as fast as microchips, but it is satisfying to see the rate of innovation ramp up. The electric car future might be here a little bit sooner than expected.

via Green Car Congress

The Tata EV is scheduled for Europe in 2010 or 2011. But the battery performance is what I’m interested in – just like the Panasonic battery from last month, this battery has outstanding energy storage and power delivery characteristics. These are Nickel-Cobalt-Manganese li-ion cells, and the one mentioned is their largest capacity prismatic cell, rated at 3.65V/20Ah (73Wh).

The specification sheet is here (warning: one big image), and the specifications are impressive. 175Wh/kg means that you can put together a 25kWh pack at only 143kg. Adding 20% of that weight for cables, electronics, packaging and safety you’ll get a final pack weight of 171kg, and an approximate volume of 81L. These figures aren’t far off from what is estimated for the Volt, but with a 50% larger gross storage capacity and a much larger net storage capacity. A Volt-spec battery pack, being constrained on volume and power, weights 69kg, produces 130kW at maximum discharge, stores its 8kWh usable in 12kWh (75% DoD), and should last between 1500- 6000 cycles (this range is so large because while the data sheet says 1000 cycles to 80% at 100% D0D, the chart below that shows 1000 cycles to 95%, plus the 50% cycle count boost by using only 75% DoD).

I’ve asked myself if we’re headed towards a leap in technology. Even after factoring packaging weight, the batteries still exceed the rumored pack figures for the upcoming battery packs (Volt, Leaf), factoring in three years for mass manufacturing,is this the leading edge for 2012-2015? The performance aspects about double what is rumored to be in existing EVs in the early part of the decade, and could provide for a new wave of larger, heavier EVs (small SUV or Crossover) that can be driven for 50-100 miles (EREV or BEV) that are more in line with whats popular in terms of car size.

[via Green Car Congress]