July 21, 2009

Volt Battery costs, part 3

Well, at last I've found an authoritative source for the cost of the Volt's battery pack.

The CEO from CPI (the company that builds the Volt packs today) says the pack will cost $350/KWH for the cells. We saw in another article costs of $1,000 per KWH for the available 8KWH capacity of the battery pack, which equals $8,000 per pack.

"All four of these items together justify a 2.5x premium for the AT application (or approximately $ 1,000/available kWh) compared to the $350/stated kWh of a CE system, CPI says."


That includes the cost of the pack, with electronic controls.
For a minority of drivers, who would drive 15k electric miles per year, a Volt will pay for itself at $3.35 gas (an $8K battery over 10 years is $800 per year - a Prius uses 300 gallons to drive 15K miles, and a Volt would use 240 fewer gallons). This would include long-distance commuters (say, driving 30 miles each way and charging at work for 230 work days per year, and 10 miles per day on the other 135 days per year) and fleet drivers such as taxis whose vehicle can be used two shifts per day, and yet don't go that far and can be charged during multiple breaks (taxis typically drive 100,000 miles per year, putting 300,000 on a hybrid in just 3 years) - perhaps 10% of drivers?

Now, there are other costs: there's $.01-.02 per mile for electricity ($.01 for the average person charging at night, $.02 for during the day). But, what about the value of time? Saving 30 trips to the gas station at, say, 7.5 minutes each, is 3.75 hours. At $20/hours, that's another $75 per year. Also, maintenance costs will be less: very few oil changes, etc. Together, these roughly pay for the electricity.

The current battery might require $4-$5 gas to capture a large % of the rest of drivers. They will have to wait for the 2nd or 3rd generation of Volt, which will be less expensive, or for more expensive gasoline - whichever arrives first.

What costs are you assuming for this?

I'm assuming $24K for the Prius - I've seen news reports indicating that's the average actual US selling price (Edmunds says the base price is $22K). The same reports indicated that the average price for the US overall was $28K. Edmunds says that one high mileage competitor, the Jetta TDI, has a base price of $23,370 (I note there are a lot of options), with 33 MPG.

Now, on Volt cost analysis. I'm assuming a Prius cost, with an $8K battery added. I think it's clear that the Volt with no battery will be no more expensive to manufacture in large volume than a Prius.

Why do I think that?

Electric drive trains are cheaper than ICE (internal combustion engine) drive trains. Heck, a ten year old can build one from scratch with wire, cardboard and pliers (with really good instructions.....) - I don't think anyone can say that about an ICE. A Volt is an EV with an onboard backup generator and a lot of good programming of the electronic controls. That won't be any more expensive than a Prius, which also has dual drive trains. Heck, the Volt should be cheaper, as the auxiliary ICE support systems can be smaller.

Electric drive trains are oooooold. EV's were sold in large volumes 100 years ago, commercially, until cheap gasoline killed them. GM sold electric trucks in large, commercial volumes from 1912 - 1918. There are something like 30,000 EV conversions on the road in the US (you'd be amazed what hobbyists do). Submarines have had them for what, 80 years? Freight trains have them. The largest container ship in the world has them. There are many tens of millions of small, non-highway legal EVs in use. It's very likely that there are more electric motors in use in the world than ICEs.

EVs are easy to do. Optimizing them, as well as the batteries, to make them as competitive as possible (which is what GM and other companies are obsessing over right now) is good old fashioned engineering - no rocket science*, no tech breakthroughs. PHEVs require a bit more work to optimize the connection between the backup generator and the electric drive train, but that's good old fashioned programming.

Now, the latest batteries do represent tech breakthroughs, but that's done. All that remains is ramping up production volumes and getting prices down. Is there any question that will happen? Not really. I think one can be rationally skeptical of Tesla: it's a small company, and perhaps it will fail. But the major car companies, like GM? Not now, with a very clear US gov public policy in place, and rising gas prices to back that up.

Do we need better batteries?

No. It would be really nice to have something like the Firefly new-tech lead-acid, or the Eestor ultra-capacitor make batteries really cheap, to really make it clear that the ICE era was over.

But, it's not necessary in order for EVs and PHEVs to compete with $5 fuel with the current battery price, and for them to compete with $3 fuel in 4 years without the credit.

*I was amused to note that the CEO from CPI quoted above has a PhD in Aerospace Engineering, so he's literally a rocket scientist.

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