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What is Holding Back the Electric Vehicle Revolution?

The movers and shakers in the electric vehicle market offer a candid glimpse into the immediate future of electric vehicles. (With photos!)

May 11, 2012

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The 26th International Electric Vehicle Symposium (EVS26) took place in Los Angeles this week. If there is ever a place to take the pulse of the electric vehicle (EV) market, this is it. Amidst a constant barrage of media attention centered on electric vehicles, I set off to EVS26 to understand why we’re not yet all driving them. 

Check out the photos here.

While the automakers, consultants, parts manufacturers and association representatives I spoke to were upbeat, the mood was one of candid, sober realism. The consensus was that the EV market of today won’t look too much different five years from now. This felt in sharp contrast to the alt-technology expos about eight years ago, when the messiahs of hydrogen had us believing we’ll all be driving hydrogen vehicles by now. (I cringe when I read the editorial I wrote back then.)

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Battery Breakthroughs
First and foremost, within five years no one is predicting a major breakthrough in battery technology that would extend an EV’s range to that of a gas engine. Or, if a breakthrough happens, it wouldn’t be brought to mass market cost effectively by then. Right now we’re stuck on incremental improvements to the lithium-ion battery, which delivers fewer than 100 real-world miles on a charge. 

Oh, you can get more range if you want to pay for it — the new Tesla Model S sedan will give you a 300-mile range for about $88,000, including the $7,500 tax credit. This is less about a giant leap forward and more about a bigger battery pack. Tesla also offers a smaller 40 kWh battery in the Model S that gets up to 160 miles for “only” $57,000.

Other competing battery technologies are out there, but not as ready for mass market as lithium-ion technology. FIAMM Group showcased its sodium-nickel chloride battery at EVS26, and GE Transportation is developing its Durathon sodium-metal halide battery, though both are geared toward energy storage solutions for industrial applications at this point. IBM’s Battery 500 project (as in 500-mile range) is advancing the lithium air battery, which is lighter and more energy dense, but IBM says the technology is at least 10 years from market.

So what is a realistic range in five years from now, on our current average-sized lithium-ion technology? An engineer at the Siemens display thought we might get to 150 to 200 miles. He also pointed out that there are more battery makers out there today than there are EVs, which is spurring development and keeping pricing in check. 

Infrastructure Issues
Much is made of providing the charging infrastructure. That is a bit overblown, according to a few folks I spoke with. The “Electric Highway,” the I-5 Freeway’s 160-mile stretch of charging stations in California, Oregon and Washington states, has been touted as a way to spur EV implementation. But as the majority of EVs allow for only about 75 miles before empty, who is going to want to charge that often on their highway trip? The Siemens engineer estimated that in five years 80% of EV charging will still be done at home.

At a seminar on charging infrastructure, auto manufacturers said charging stations are needed more in city centers to allow urban EV owners to charge on street corners and in the parking garages of their condo buildings. One OEM rep ran into a Leaf owner from Camarillo (about 53 miles from downtown Los Angeles) who was afraid to drive his EV to the event because he didn’t think he could get a free charging station in a convention center crowded with EVs.

Not to be overlooked is the dealership infrastructure, especially as many independent EV makers have no brick-and-mortar sales points and, more importantly, service points. An interesting aside: As EVs have fewer moving parts to service and fewer maintenance issues, how will dealerships adapt to having a traditional profit center removed?

Standardization Needed
The charging infrastructure seminar centered on the need for standardization. This is an issue for EV powertrains, parts and communications protocols, but more importantly in regards to how power is transferred to the car. There are three standards to look at: the connector, the charging topology and the vehicle/charger communication, and each of these will have their own standards in place. EV pioneers Nissan and Mitsubishi created the CHAdeMO charging method, while virtually every other manufacturer is pushing for the single-port Combined Charging System (VHS vs. Betamax, anyone?).

The standardization issue is in anticipation of the advent of DC fast charging, which will juice your EV to 80% in less than 20 minutes. In the dearth of battery improvements, being able to charge quickly with a standardized outlet is essential to forwarding EV implementation. There are virtually no DC fast chargers in the country right now, but they’re coming.

Now we need the cars with the right sockets — and Nissan Leaf is the only EV product right now with a port that can accept a fast charge, though again, it’s proprietary. Three vehicles will be ready for market by 2013 with the standardized Combined Charging System: Chevrolet Spark, BMW i3 and VW E-Up! The next generation of EVs should have this all sorted out, but that may take a few years.

Plugless charging stations would solve the standardization issue. A few plugless charging stations were on display, including Evatran’s Plugless Power system, which lists for about $3,000. The blue-sky potential of this type of charging might come from a company called OLEV Technologies, which is engineering a system to create a roadway of one continuous charge while moving. But would a longer range battery make this technology obsolete?

Managing Costs
Vehicle cost is obviously a huge barrier. Who wants to pay $50,000 for the Toyota RAV4 EV besides first adopters? Beyond that, it’s hard for the general public to justify the more than $12,000 premium for an electric battery. Today, return on investment of an EV is about 10 years, which is a tough calculation if you consider that batteries are projected to degrade in about eight years. So what does that do to the price of a used EV? No one yet knows.

However, the used car market will eventually play a factor. One EV executive brought up the fact that the Prius sold well above MSRP until models started to hit the used car market. There isn’t a market yet for used EVs, but when it comes, new car competition with used units should put some downward pressure on pricing.

Leasing the battery, at $70 to $80 a month, is one way to hedge against degradation and take advantage of newer technology as it comes along. Folks are also talking about pay-per-mile service contracts in which you’d swap a battery at a service point to get you on the road quicker. Again, you can imagine this infrastructure disappearing as battery life improves.

Economies of scale will bring down vehicle prices; though don’t expect any major price breakthroughs either in five years. Most manufacturers have an EV coming to market, though allocations are moderate. For instance, Honda expects to sell only 1,100 units of the Fit EV (due late July) in three years, while the much-ballyhooed Toyota RAV4 EV will sell 2,600 units over three years. Though allocations are sparse, having more than the Leaf and Volt, “the two town criers,” as one exec put it, will help increase public familiarity.

The industry will eventually move toward dedicated EV manufacturing platforms, as opposed to building off existing ones such as Ford Transit Connect EV or Ford Focus EV. With dedicated platforms, OEMs won’t have to retrofit EV drivetrains and parts on a chassis designed for an internal combustion engine. Weight-saving materials can be used for an EV chassis that don’t make sense for an ICE platform.

The one constant in conversations at EVS26 was the importance of fleets in the equation. With dedicated routes, central charge points and the ability to gather metrics, fleets have no choice but to be EV guinea pigs, without the ROI. Fleets really are the unsung EV first adopters, the key advancers of this technology. The eyes of the EV world are on you. Just remember it’s going to be a long haul.

Comments

  1. 1. Daniel [ May 17, 2012 @ 08:26AM ]

    Great article!

    EV's are the answer, the problem is today's EV's are the Apple II of this technology.

    As with computers, we will adopt this technology as it matures into a viable product with benefits that outweigh current ICE technology. We are not nearly there yet. We need a range in excess of 1,000 miles and charging systems that are not linked to current electrical infrastructure. - If half of us were charging EV's instead of pumping gas the current electrical infrastructure would implode.

    I forsee charging stations at home that collect sun, wind or hydro power and store it on location for distribution when the vehicle is on site. When this day comes we will truely have green automobiles.

  2. 2. Rob Chisholm [ May 24, 2012 @ 01:05AM ]

    Not in your lifetime Daniel. Dream on.

    Does anybody believe that the oil companies don't already have an idea of how they will survive when the oil does eventually run out?

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Author Bio

Chris Brown

Executive Editor

Chris Brown is the executive editor of Business Fleet Magazine and Auto Rental News. Through these publications, online newsletters, trade events and associations, Chris covers all aspects of the fleet world, including fleet management, manufacturer fleet activities, the fleet leasing industry, vehicle remarketing, rental industry news, car rental taxation and legislation.

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