GM and Toyota agree: gas, battery prices defining parameters for plug-in acceptance
2011 Chevy Volt - Click above for high-res image gallery
GM has not been secretive about how important gas prices in late 2010 will be on the price of the Chevy Volt. During a webchat this week, GM vice chairman Bob Lutz said again that higher gas prices are needed for the Volt to become "generalized." Specifically, he said:
Part of the reason, of course, is the high cost of the lithium-ion battery in the Volt. In Frankfurt this week, Toyota was singing a similar tune about costs, but from the other side. The tremendous expense of advanced battery packs will delay mass market acceptance of pure electric vehicles until 2020, Toyota execs told CBS.The Volt technology is very exciting, but costs will have to come down before it can become generalized, and U.S. fuel prices will have to rise to world levels, meaning $5 or $6 per gallon.
The cost premium is certainly not a new topic on these pages, but it's interesting to see the world's biggest automakers both throw a bit of a damper on EV and plug-ins during an auto show that was so prominently about plug-in vehicles. Is this just sensible caution or something else?
Gallery: 2011 Chevy Volt
[Source: CNET, CBS]
Reader Comments (Page 1 of 2)
Tony Belding 10:07PM (9/18/2009)
The knock on EVs used to be that they couldn't work, the batteries weren't good enough. You need some great breakthrough in technology before it can be feasible, they said, and we've been waiting nearly 100 years for one. (With the implication that, if it hasn't happened in the last 100 years, it's never going to.)
Now hardly anyone is saying they can't work. Now they just cost too much. This is progress, of a sort.
But manufacturing cost can be reduced -- drastically -- given time and investment, no great breakthroughs required. GM and Toyota know this. Their current business model is based on an absurdly complex, high-precision device, the internal combustion engine, which could never be affordable without huge capital investment, mass production, and decades of cost reduction in a highly competitive industry.
I'm convinced the same will happen with EV batteries, but it won't happen until *after* the industry is producing EVs and PHEVs in substantial numbers.
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Boyprodigy1 3:58AM (9/19/2009)
This is actually just a lot more of the same. I wonder if these companies realize that they are the ONLY two large auto makers still knocking on PEVs and PH-EVs...
Mike 11:13AM (9/19/2009)
"the internal combustion engine, which could never be affordable without huge capital investment, mass production, and decades of cost reduction in a highly competitive industry."
That is absurd. All it took for the internal combustion engine to be affordable was an assembly line. I'm sure you've heard of Ford's Model T. Batteries are not like other technologies. There is no Moore's law of batteries. If prices would drop significantly with mass production and a little R&D, GM or Toyota would already be selling a low priced EV.
meme 3:09PM (9/19/2009)
Mike:
That's simply untrue. You'd be aware of this if you'd actually followed battery tech. Cobalt li-ion cells cost $3/Wh in the early 1990s. They're now $0.35/Wh. The top-of-the-line in secondary cell energy density in 1989 was 45Wh/kg. Today in 2009, it's 200Wh/kg. That's a 4.5x energy density improvement in 20 years (and more like a 10x improvement in respect to power density).
This myth that battery tech isn't rapidly improving is just that -- a myth. Yes, from the 1800s up to the 1960s or 1970s there wasn't much improvement in rechargeable battery tech. But the consumer electronics boom of the 1980s changed that picture. People actually started putting serious money into research, and guess what? They got results.
Mike 4:23PM (9/19/2009)
@meme
I did not say battery technology doesn't improve. All I said is that batteries don't improve as fast other technologies. Up until now, most of the improvements in battery technology have been major improvement (i.e., the use of lithium ion or the use of lithium iron phosphate cathodes). You cannot assume that we will have a continuous amount of these types of breakthroughs over time.
Boyprodigy1 3:39PM (9/20/2009)
@mike
Actually i could pretty easily assert that we will be seeing those kinds of breakthroughs. I only know a couple of chemistry majors at the university that i attend, but every single one that i know is either working on battery tech or solar cells. Literally, all 6 of them. And they are doing undergraduate research this year making attempts to push breakthroughs in this technology. Its gonna happen.
Mike 9:11PM (9/21/2009)
@Boyprodigy1
I hope your right.
XYZ 12:02AM (9/19/2009)
When will we all learn that it is irrelevant what those managers have to say?
They only want us make believe their rubbish. If we all send an email to them saying:
"No plug-in EV - no deal!" and stick to it. Guess what? Won't take long before we're all silently cruising...
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Mike!!ekiM 1:53AM (9/19/2009)
I think part of the problem is they really don't know how to sell anything but 500 horsepower. And horsepower is no longer relevant. It's actually a big part of the problem. Zero to 60 in 12 seconds, in the real world, is a very fast time, yet the auto industry keeps attempting to push for faster acceleration levels, and yet, in the "real world" roads are so crowded that 90.9 percent of the people may never use more then 100 horsepower for the LIFE of the Car.
This is the crossroads. Wall Street's Sell Out to push US companies to China is a big factor in the auto industry being destroyed in this country.
john 1:11AM (9/19/2009)
US fuel prices WILL rise to $5 or $6 a gallon by late 2010, or at the very latest summer 2011 - no doubt about it. So no need to worry about that, GM, just work hard on getting the car out here, ok :)
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mcclanahoochie 8:53AM (9/19/2009)
I agree. Fuel prices will inevitably rise, and even if it takes longer than GM wants, there will still be plenty of people (me included) who want the car no matter what gas prices are.
Matt234 8:36AM (9/21/2009)
When you're done with it, can I borrow your crystal ball?
Andy 3:12AM (9/19/2009)
This is just the usual disingenuous talk from the auto industry to try and justify higher margin on their introductory EV products. Marketing BS.
They are also hoping to get more government handouts to pay for re-tooling and development.
Battery costs will not be a blocker when auto companies invest sufficiently in capacity and supplier development. The business case is viable and in plain sight. A battery pack can be built at a low enough cost to to provide a decent value proposition to the consumer. The intrinsic cost of materials are not too high and process costs will reduce with scale.
Management are unwilling to take the capital risks in case they miss out on bonus rounds. Toyota are particularly transparent with their recent Prius Nimh announcements. They have just calculated the optimum return on capital already invested. The rest of their spiel is BS.
I really hope Mitsubishi, Nissan and Renault stuff it to them in the EV stakes.
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Nick From Montreal 4:38AM (9/19/2009)
Toyota and GM just realized that they are about to get a whole lot of competition for EVs, so they are trying to discourage the competition...and the buying public.
Once Warren Buffet's BYD invades the US and Europe, they'll change their tune. Yeah, tell the Chinese that batteries are too expensive...
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ufgrat 6:08AM (9/19/2009)
If the batteries are worthwhile, they'll be just as expensive as everyone else.
Last I heard, the BYD electric was selling "poorly".
Bill 8:03AM (9/19/2009)
No Chinese-made vehicle has yet come close to meeting developed nation safety standards.
Anything BYD wants to import to the U.S. or Europe will need to be much heavier than their domestic vehicles.
And BYD has made amazing claims for its batteries no one else has been able to verify.
Nick From Montreal 9:06AM (9/19/2009)
Sure BYD has a lot to prove and some of their claims sound like science fiction. However, there's one thing that we know for sure: it took them 10 years (1995 to 2006) to capture more than half the world's mobile-phone battery market.
http://en.wikipedia.org/wiki/BYD_Company
Basically, they came in a market where many Japanese battery manufacturers were experiencing defects and high-cost and they used robots and cheap labor to produce more reliable units & reduce cost. Without them, there wouldn't be $99 smart-phones.
One big problem they face is that they have a very bad tendency to copy car designs from Toyota, Audi, BMW and others, which is a sure way to turn European and US courts (and consumers) against them.
Even if their cars suck, their biggest contribution will be in reducing the cost of automotive batteries - thereby trumping both GM and Toyota.
The US invasion is planned for 2011, so we'll see...
Nick From Montreal 10:01AM (9/19/2009)
Here's a Buffet representative explaining the rational of their investment:
http://www.greencarcongress.com/2009/01/byd-shows-produ.html
Excerpt:
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"Also present at the Detroit press conference was David Sokol, the chairman of MidAmerican Energy Holdings Company, the Berkshire Hathaway unit that last year took a 10% stake in BYD. (Earlier post.)
Sokol said that MidAmerican invested in BYD primarily because of the battery technology. Sokol later told Reuters that whether or not BYD manufactured their own cars wasn’t relevant to MidAmerican, because the real expertise was in the development of the batteries, the motors and the control systems.
At the show, BYD chairman Wang Chuan-Fu said the company would consider licensing its low-cost battery technology. "
PeterM 6:16AM (9/19/2009)
Has any considered that this GM/TOYOTA BS is because they have a vested interested in their Hydrogen programs... and both have said that 2015 is the date for their respective vehicle introductions.... perhaps that the reason why they talk down BEV technologies.
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Dave 8:41AM (9/19/2009)
GM and Toyota don't build batteries.
A123, panasonic, Samsung, and others do.
And a 250 mile real world range battery pack for a midsize car costs well over $50,000.
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