Who will play the lead character in Who Revived the Electric Car?, the sequel that is bound to be made to the famous documentary, Who Killed the Electric Car? Many are vying for the role: car manufacturers, battery producers, scientists and now the Obama Administration.
The White House issued a report on July 14th that credits federal stimulus money for the rapid drop in costs for electric cars. Once written off as a technological mishap, the electric car now appears nearly road ready for American consumers. The price tag is dropping rapidly, in part because of the $12 billion the federal government has pumped into alternative vehicles, according to the report. Of that $5 billion went to electrifying the US transportation fleet.
Electric cars will cost between $25,000 and $35,000, after tax credits, by the end of this year, says the White House. That’s down from $100,000 before passage of the 2009 American Recovery and Reinvestment Act. Electric cars are dropping in price because stimulus-funded manufacturers are producing batteries more cheaply.
Not long ago, it cost $33,000 for the battery of an electric vehicle with a 100-mile range. The Department of Energy expects the cost to drop by half between 2009 and 2013. By the end of 2015 some batteries should cost $10,000. The price of batteries for plug-in hybrid vehicles, or PHEVs, is falling quickly too. PHEVs can travel 40 miles on electricity and then automatically shift to gasoline. Priced at about $13,000 in 2009, the PHEV batteries are expected to cost only $6,700 in 2013 and $4,000 in 2015, according to the DOE.
The new electric car is seen as a way to reduce reliance on oil, which now supplies 95% of our transportation fuel. But the electric car has several interesting side stories as well.
Electricity is cheaper than gasoline. So, consumers should find themselves paying the equivalent of only $1/gallon to fuel electric cars, according to the National Renewable Energy Laboratory. In coming up with that figure, NREL assumed it will take 9-10 kWh per gallon to operate a typical mid-size car, with vehicle efficiency of 2.9 mile/kWh. Researchers also assumed an electricity cost of 9.4 cents/kWh as the cost of electricity. While that is a fair average, the truth is that the price of electricity varies significantly nationally, and the cost of driving an electric car will vary accordingly. For example, in North Dakota electric rates run about 7 cents/kWh, while in Connecticut they are 19 cents/kWh.
Keeping operating costs low will depend on wide-spread implementation by utilities of time-of-use pricing, and of consumer willingness to take advantage of electricity at bargain times. Prices for electricity fall at night when demand diminishes. Electric grid planners are hoping consumers will charge their cars at night. Otherwise we may have to build more power plants to accommodate the cars, and that will negate some of their environmental and cost savings. Time-of-use pricing, which reflects lower night-time costs, should help encourage consumers to plug in at night. But consumer behavior is hard to predict.
Another side story is that the electric vehicle gives consumers a chance to act as power producers. The car batteries can store power which consumers can sell back to their local utility, possibly at high prices if done when the grid is in short supply.
And finally, it looks like the electric car will help the US create manufacturing jobs. The White House report says that in 2009, we had only two factories manufacturing advanced vehicle batteries. Those factories produced less than two percent of the world’s advanced vehicle batteries. By 2012, the US should have 30 factories with a 20 percent market share and by 2015 a 40 percent market share.
Should all this come to be, it is hard to say who will get the credit. What’s clear is that the story offers lots of happy endings to today’s energy woes. Here’s hoping it is a tale told true.
Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.
photo: futureatlas.com
7 comments
Interesting. For the moment, I’m not going to get into issues such as what happens when subsidies disappear (but for an example, one only has to look at what happens to the pace of wind power project development every time the industry’s tax credit is threatened), or whether a White House report on the impact of the stimulus package is a credible source, or even on the relative energy efficiency of electric cars vs. those driven by other powerplants. I simply want to ask…where does the incremental electricity come from? Let’s assume that charging is done in off-peak periods, thereby minimizing (and, for some time, eliminating) the need for new electric generating plants. The bulk of off-peak electricity generation (and nearly half of all electricity generation) is fueled by coal. Is incremental coal consumption going to make folks happy (particularly those that favor electric vehicles)? Solar generation, of course, is moot at night, and that’s also not generally a good time for wind power. Ah, yes, storage (at least, some types of storage) might be used to “shift” such renewable daytime generation to night time. But, does that make sense – shifting electricity from a higher-valued period to a lower-valued period in order to avoid the least expensive form of generation (that happens to emit CO2)? This is complicated stuff, and needs to be considered in such a manner – with overall system evaluation, and not simply the more desirable, and easier to grasp, first order effects.
Jim 1 asks age old quedetiosn,
Where will the electricity come from-There is excess in the GRID that gets dumped every night.
Isn’t electric from COAL= Yes but that is 4 times cleaner than gas car exhaust and most coal is from America, (a few states actually import coal) duh
A gas car is 80% inefficient with waste heat and friction
An Electric car is less than 20% inefficient.
Lithium batteries are getting beter everyday, EV’s regenerate power slowing down and save brakes and energy. Lithium batteries are also non toxic, very light and most are made in the USA ! and the cars are made in the USA ! Tesla, aptera, Myer motors , even FORD will make EVS. Nissna LEAF is being made in Tennesee !
Elisa has provided an excellent article here with detail on the combined impact of demand and subsidies when a little wisdom is at the corporate helm. With the long history of government subsidies weighing heavily on the side of dirty fuels ($550 billion annually according to recent figures), it’s good to finally see our elected representatives acting, at least to some extent, for the benefit of our children and our children’s children when it comes to transportation infrastructure.
I heartily agree with Jim’s point about the necessity of stability in subsidies for renewables in order to provide a solid environment for investors. Indeed, KIA – well known for bigger bang for the buck engineering and warranties – has just this year introduced a concept linking both the internal combustion and the electric engine to the same transmission, along with onboard PV, coated glass for a cooler interior and a power-efficient-and-effective sound system:
http://www.autoblog.com/2010/02/10/chicago-2010-kia-ray-phev-concept-finally-unveiled/
Our automakers had best all the more rapidly cease their suckling on the SUV pipe now that Asia has fully swallowed the PHEV pill. I firmly believe the EV is our destination, but PHEV’s are certainly a useful stepping stone that will lift our national fleet efficiency tremendously and reduce our growing vulnerability to overseas energy suppliers and geopolitical shifts.
Here’s a little more on my thinking with regard to EV’s:
http://2greenenergy.com/electric-vehicle-adoption/2890/
With the rise of India and China, both as consumers of petroleum with increasing thirst and as competitive producers in the efficient transport and renewable energy markets, we’d best begin setting the combined resources of We the People (namely our government) behind the solutions we need now and into the future.
Craig Shield, Editor, 2GreenEnergy.com, and author, Renewable
Energy – Facts and Fantasties (2010)
If these new electric cars also had solar panel roofs, the range could be increased and for some batteries could be charging all day while while the car is parked.
Tom, it’s the best use of solar panels to put them at your home always facing south and making the most energy. Then it can help your home and the GRID. You plugin off peak to keep peak demand down on power plants and transmission lines .
Most solar panels are glass and also would add weight to the vehicle. It takes about 2 KW at 200 sq foot to run a car. If you park in the shade to keep the car cool you wouldn’t make any power. If you are on vacation and the car is parked it over produces with no place to store energy. Home sweet home is the best.
Solar and Wind are best directly into the GRID to help everyone.
Electric vehicle will be in good demand due to increasing fuel rates day by day. Mainly small buyers will be very benefited.
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