How automakers can drive electrified vehicle sales and profitability

Ultimately, the batteries will win, but into your calculations consider the time value of money: how long will a given usage take to reach 1000 cycles. On the flip side, gasoline prices are volatile, and electricity from solar keeps getting cheaper, too. In a steady, non-volatile price march.

I just finished the Elon Musk biography — there's a good discussion about how Tesla was founded on the premise that the market did not yet recognize how cheap lithium ion batteries had become.

The original prototypes involved connecting hundreds of small batteries in parallel.

https://www.goodreads.com/book/show/22535480-elon-musk

At some point, the tax structure for cars has to be changed to account for electric vehicles wearing the roads and not yet paying to maintain them? I'm not sure, but I think that's what fuel tax pays for? So, the cost will go up at some point in that sense.

Then, on the other hand, $3/gal is a US-only phenomenon among countries that can really afford electric cars, everywhere else it is ~2x that? Europe, japan/korea/australia? I could be wrong here too but I think that's how it is. So there electric may already be quite a bit cheaper, depending on generation cost.

But converting electricity to mechanical power isn't 100% effective either, and the weight of the battery affects efficiency too. Petrol is much lighter, and its weight naturally diminishes as it is expended.

So at least for transportation, the breakeven is probably somewhat further than your calculation suggests.

The problem is not the stored energy. It is the time needed to store it.

Low on gas? Get to a station, take 10mn to refill and you're gone for 500 more miles. Low on battery? Get to a station, wait hours to get it charged back up and you can go for 300 more miles. The fact charging takes time means a long queue before you can get to a charger.

You need to take into account the cost to the environment of burning gasoline. The true cost is closer to something like $8 a gallon. So now it's up to about $1/kWh. As someone else has already mentioned, Tesla's packs are about $190/kWh. You'd only need about 190 cycles before that starts breaking even, which could probably be done in a couple years.

Tesla is under $190kwh for their battery packs and falling.

I think the price / performance / capacity of battery for now and the next 5 - 10 years roadmap are already very decent. What i want to know though, if there are any possible improvement to Weight / Energy ratio?

The current battery are way too heavy.

The battery doesn't generate any energy though, it just stores it. I mean, technically, the gasoline is just storing energy too, but it was generated naturally long ago. You still have to burn some fuel somewhere to recharge the battery each time.

8kwh per $3 results in $2.67 per kwh for gasoline. $362/$2.67 results in a cost ratio of 136 between bateries and gasoline. It's in the magnitude of x100, not x1000.

Lithium ion battery capacity decays with each charge down to 50% after 500 cycles

I wonder, if the oil price crashes, and the gasoline prices fall, will that become a setback for EVs? Or will people have already lost confidence in ICE by then?

I imagine that if gas stations start to shut down due to low profitability, people will start worrying about whether their local gas stations is still operating in 5 years. So even if gas becomes dirt cheap, it might not become a setback.

We'll see. Interesting times ahead.

> It could seriously disrupt life for the oil majors.

Things weren't exactly groovy for them the last few years with sub-$40 oil.

Thats an interesting point, however that may not be how it actually plays out, at least from my somewhat relevant experience.

I had the misfortune of having my Honda hybrid's battery die, and if it weren't for CARB's extended emissions warranty for all HV car batteries, I would have been SOL paying 3-4K (or 2-3K for a refurb) for a tiny ~1kWh battery.

The new battery in my hybrid didn't go down in price significantly despite ~9 years of battery advancement, nor is it more powerful than the one it replaced.

I understand I'm comparing NiMH to Li-ion, but perhaps 5-10 years from now Li-ion will be superseded by a another chemistry, leaving today's electric car buyers with a similar experience.

I tried to research this a bit. There have been a few models which have gotten an upgraded battery, so we should start seeing these options.

The new Nissan Leaf has a larger battery pack, but it's not backward compatible.

https://transportevolved.com/2015/09/11/confirmed-30-kwh-nis...

But they do have a batter replacement option which has better thermal management.

http://insideevs.com/breaking-nissan-prices-leaf-battery-rep...

I wasn't able to find out anything about the Renault Zoe, or Kia Soul (new model isn't out yet though).

But our dealership did tell us that he expects there to be battery upgrades available for the Kia Soul, and this also seems to reflect what others on the forums have heard. But he did say it might be 3rd party options. Supposedly you can upgrade individual cells.

So the picture isn't clear yet. But I think once the market reaches a certain size, there will at least be 3rd party options.

In the full McKinsey report they forecast less of a drop going forward, 16% over the next 3 years, 55% drop over the next 13 years. So 4-5% per year. That is a lot less then the depreciation of a new car. It's probably not going to be worth it to replace the battery.

Unless, of course, the car manufacturers get the bright idea to make EV batteries "irreplaceable", too - you know, for "better efficiency" or to make the cars "leaner" or whatever their excuse would be.

As an aside (and not to hijack the thread..) but keep this in mind when some economists argue that inflation is good.

It is technological improvement leading to falling prices that is beneficial to society and to an economy.

As an ex-professional auto mechanic who has on multiple occasions explained to customers the problems their vehicle is having, I can say with confidence that the number of ICE owners who have the faintest clue as to how their vehicle works is nowhere near 100%. At best, gas goes in and goes "boom" at some point. Most owners of ICEs know about as much about how an ICE works as I know about how a nuclear reactor works (which amounts to "something something fission, heats water, and spins a turbine with steam).

And if that's the bar, then customers sure as hell know how an electric motor works.

Honestly, less than 5% truly 'understand' moving flux distributions or top cylinder quenching effects. I think it means that they are comfortable with what their (limited) understanding tells them. I have built a dozen engines and am still learning.

The biggest problem for city drivers (I'm in San Francisco) is we only need a car that goes about 45 mph, but we can only buy vehicles (electric or ICE) that are designed for 70-80 mph. They tend to weigh over 3,000 lbs, and a Tesla weighs near 5,000 lbs.

The best we can do right now are "Neighborhood Electric Vehicles", limited in the US to a top speed of only 25mph. Scoot rents one, a Twizy: http://blog.caranddriver.com/in-a-twizy-nissan-renting-elect.... They're fun to drive, but VERY rough and crude.

Perhaps we need a class of lightweight vehicles with a top speed just barely insufficient for freeway use? For pedestrian and bike safety, I'd think we need to keep vehicle mass and velocity as low as practical.

Yeah, I visited Rome last month, which is a city filled with small fuel efficient cars and really expensive gasoline. I didn't see a single electric. My guess is that because people live in apartments, they haven't figured out how to get charging at street level. It seemed there were parking permits for residents, but people don't own their spaces. For now its an interesting, unsolved problem.

> people living in apartments/condos/etc and parking on the street every night do not have accessible EV charging infrastructure

DC Fast Charging mostly solves this problem -- roughly 80 miles in 30 minutes. Grab lunch while charging your car, and your battery is filled for the week. There aren't a ton of stations that support that speed yet, but more are being built every year.

> suburbia has luxury of charging EVs overnight

This is one of the few luxuries suburbia offers. Urban apartment/condo dwellers get dozens of benefits that suburban households don't, it seems only fair that suburban folks get a few things to enjoy.

That's already improving, though. I see lots of on-street charging points being installed here in London. Still not quite as convenient as having your own home charger, but certainly viable.

I agree. If you live in a condo building, it's very unlikely you can get a charging station installed.

And they are ceding all of it to Tesla.

They last. I have a 2-year-old electric Ford Focus and have noticed nearly zero battery degradation; the range has been consistent since day 1. Recycling the batteries is undoubtably less of an impact than even the recycling of engine oil from an ICE car over the same timespan.

Back of the envelope calculation for the U.S.: Using the national average gas tax of 48¢/gal, if you were to charge an electric vehicle an equivalent of what, say, a 30 mpg vehicle would pay per mile, it'd be 1.5¢/mile, or $150/yr for a vehicle that does 10,000 miles a year. I don't think that's really a huge change to the overall economics either way, though it could push some marginal cases from above to below breakeven.

I visited New Zealand recently and was told that the reason Diesel was so much cheaper than unleaded was because it didn't have the road tax built into it so agricultural vehicles wouldn't have to pay for road they weren't using. As a result Diesel cars had to keep a logbook and pay a tax based on their mileage. Didn't ever get to see it in action.

Flying cars

100% solar? we are super far from that and we need anyway to produce energy even at night.

Clean in the city, most of that power is still from coal, just further from your tailpipe. You are just moving numbers around.

Toyota is also selling a fuelcell Mirai in limited markets.

About a year ago I leased a Nissan Leaf base model which has a rated range a little under 100 miles. I got a pretty good deal, but it was still a new car purchased from a dealership.

Total cost of ownership per month of the lease is $136. This is not counting KWHs or insurance, but includes all dealer costs, maintenance, and taxes. That's really hard to beat, other than buying some used vehicles. Lots of people spend more than that on fuel. These things are becoming affordable fast.

In my case, it's a 2nd car as my wife has a longer-range vehicle, so I'm fine that I can only use it for commutes and short trips.

Leases are definitely looking more attractive. You could also consider that the battery is an expendable component that you'll be able to upgrade separately to the chassis once the tech improves anyway.

Personally I think software upgradability is the most important criteria, which means either Tesla or lease and let someone else deal with rapid obsolescence.

Why don't you do both buy a used Tesla Roadster. You'll get one last hurrah with a convertible, and take advantage of the electric car depreciation you seem to be convinced exists.

Except they've managed to hold their value pretty well... Still, and attractive option, especially with the 3.0 battery upgrade available!

You could buy a Chevy Volt.

50+ miles of pure electric-only driving for the majority of your normal driving needs. But can also be filled up with gas for 200+ mile driving days.

If your considering buying an traditional car anyway, it gives you the best of both worlds.

My wife and I have a 2012 Nissan Leaf and a 1999 Toyota Camry. The Leaf gets driven every day. The Camry at least a couple times a week.

Before getting the Leaf I monitored my driving habits. The only days I ever drive more than ~20 miles are because I am going somewhere outside my daily routine. If you have access to a second vehicle, I would really recommend taking a second look at current EVs. Where else will you get heated seats, rear view camera, gps, alloy rims... all on a 3 year old car with 20k miles for less than 12k USD? It can be an amazing deal. Additionally if you have access to free charging at work it is a huge incentive.

Depending on your drive cycle, you could consider a plugin hybrid that has enough EV range for your daily commute, but can easily go 300+ miles on gas if needed. We have one, and we barely use any gas, since most of our daily driving is within the EV range.

The selection of PHEV options are really great now. They include the Chevy Volt, Ford Fusion Energi, Ford CMax Energi, Chrysler Pacifica Minivan PHEV. If you are looking for a performance or luxury PHEV, even those are available: Volvo XC90 PHEV, Audi E-tron, and a couple BMW models.

200 miles "only"?

How many days of the year do you actually drive more than 100 miles?

If it's many, then electric is not yet for you yet, unless your destinations are near the Supercharger network.

Give it time...

Cost reduction of existing battery technology is all that's needed to make batteries widely useful for grid energy storage. No new chemistry needed, just economies of scale.

This is happening in CA [1] and elsewhere. The trend will enable renewable energy sources like wind and solar to meet larger portions of total electrical demand.

That will cut into coal's power generation market share. Probably pretty rapidly.

[1] https://www.nytimes.com/2017/01/30/business/energy-environme...

The automakers have a short term problem. Which is their profit margins are aligned with being an older stodgy industry. However they now need to make large investments in new technology driven by a real risk of going out of business if they don't. The last time we saw something like this was the big push to add emissions controls and improved crash safety back in the 1970's.

Well that will depend on what are the materials they are being built with when that happens.

The materials being used presently won't scale to such big numbers as you purpose, so it will all depend on the alternative materials being used by then.

Thanks, we've updated the link from https://hardavenue.com/tesla-electric-battery-price-reduced-....

Definitely sloppy. From the report (PDF: http://www.mckinsey.com/~/media/McKinsey/Industries/Automoti... )

From 2010 to 2016, battery pack prices fell roughly 80% from ~$1,000/kWh to ~$227/kWh

Current projections put EV battery pack prices below $190/kWh by the end of the decade, and suggest the potential for pack prices to fall below $100/kWh by 2030

It's a machine written blogspam article, and probably shouldn't be on HN.

I feel like I' on a poorly written simple english wikipedia page...

Based on the rest of the article, I think this should read:

> According to the research result, we can see that the same batteries can be produced at $227 per kWh in 2010... and that by 2020 it will fall to $190 per kWh and...

...and that's where it lost me - but something about it falling to $100 per kWh (maybe by 2030?)...

Help me out; I can't see a common theme except this person really likes a site called hardavenue.

Why? (It's not obvious to me by your link.)

You don't think the gasoline car system has subsidies?