Here’s the latest bad news for electric vehicles and their promoters: the world is absolutely swimming in oil.
The International Energy Agency says the United States alone is sloshing around in so much newly found oil, the world’s thirstiest oil consumer will be pumping more oil than Saudi Arabia by 2017 and will be energy-sufficient by 2035.
The even worse news for EVs is that car shoppers aren’t going to buy them in significant numbers unless battery-powered cars become cheaper. This is obvious from the sales numbers: EVs account for less than one per cent of all new-vehicle sales in both Canada and the United States, according to sales numbers from J.D. Power & Associates.
But in case you needed more evidence, J.D. Power & Associates 2012 Electric Vehicle Ownership Experience Study has found that those shopping for an EV didn’t buy one because of price.
“The only way to address the price is by improving the technology to reduce the overall cost of the vehicle,” Neal Oddes, senior director of the green practice at market researcher J.D. Power, recently told The New York Times. “The manufacturers have a huge task to be able to do that.”
Optimists believe car companies will find a way to cut costs, thus making EVs affordable and appealing for the masses. Carlos Ghosn, the CEO who runs the Nissan/Renault Alliance, is perhaps the biggest EV optimist of all and he is confident that costs are coming down, and sooner than naysayers believe.
“Zero emissions, for me, is here to stay, even though it’s not selling as well as we thought,” he recently told Automotive News. “You’re going to see more and more zero-emissions cars.” But perhaps not sales of 500,000 cars a year combined for the Alliance alone. Not yet, at least.
“We feel very comfortable in the potential for at least 500,000 cars a year,” he added, noting that demanding government regulations for fuel economy and emissions in China, the United States and elsewhere will “encourage” EVs. “No matter what, the United States is going to have to embrace electric cars in a way that is more sustainable. Japan is already doing it.”
Also bullish on EVs is BMW CEO Norbert Reithofer. “We consider electric mobility a technology with the potential to achieve emission-free driving pleasure,” Reithofer said in a recent statement that actually focused on BMW’s third-quarter earnings.
The Bavarian luxury car company believes it can charge a premium for its coming line of EVs with their racy, up-market performance and advanced carbon-fibre structures – all tied into a bigger effort to be “green” that includes, but is not limited to, using more recycled materials and renewable energy to manufacture vehicles and such. The city-friendly BMW i3 EV is coming next year and the i8 super sports car will follow. The i3 will list for $50,000 or so, while the i8 is intended to compete with the slickest Ferraris and the like.
Among the Detroit-based car companies, General Motors and Ford are both moving steadily and thoughtfully ahead on the so-called “electrified” vehicle front. Last week, at a seminar in San Francisco intended to underscore GM’s commitment to vehicles using some sort of electric power, Mary Barra, the company’s head of product development, said GM plans to focus on plug-in hybrid technology on the road to having as many as 500,000 vehicles in service using “some form of electrification” by 2017.
So far, GM’s most-visible electrified gamble is the Volt, which combines battery drive with an on-board gasoline engine to charge a drained battery pack and extend range to 600 km.
“What started out as a technology proof point … has turned into a real-world starting point to push EV technology further and faster than we thought possible five years ago,” she said.
GM plans to use Volt EV technology in the upcoming Cadillac ELR. Next year, GM will launch the fully electric Chevrolet Spark EV in certain North American markets, South Korea and elsewhere. Meanwhile, GM is putting to use less elaborate forms of “electrification” in mainstream models. For instance, the company expects to sell more than 50,000 electrified vehicles, including the Volt and vehicles such as the Buick LaCrosse, Regal and Chevrolet Malibu with the company’s mild hybrid system called eAssist.
“In fact, our future portfolio calls for eAssist to be on hundreds of thousands of GM vehicles annually by 2017,” said Barra.
Ford, for its part, is launching its 2013 C-MAX wagon with a lineup of models all powered in some way by electric drive – from the more traditional gasoline-electric hybrid version ($27,199) to a plug-in hybrid called the C-MAX Energi ($36,999) capable of going more than 40 km on battery power alone. Like many car companies, Ford says its long-term strategy for electrified vehicles includes hybrids, plug-in hybrids and full-battery-electric cars. The vast majority of vehicles using some form of electric propulsion will be hybrids such as the 2013 Ford Fusion and Toyota’s Prius.
Indeed, Toyota just announced that it has reached its long-stated goal of selling one million hybrids in a single year. Through the end of October, the hybrid pioneer had sold 1.02 million hybrids around the world in 2012. Since 1997, Toyota has sold more than 4.6 million hybrids, the vast majority of which have been Prius models. Toyota says it now has 19 hybrid models for sale, plus one plug-in hybrid. Toyota sells at least one hybrid model in 80 different countries. In Canada, the Toyota and Lexus brands sell a combined 10 hybrid models. By the end of 2015, Toyota says it plans to launch 21 new hybrid models by 2015.
The latest Toyota hybrid in Canada is the 2012 Prius Plug-in ($35,700), which is capable of going up to 25 km in the city on battery power alone. Like the C-MAX Energi, the Volt, and pure battery-powered cars like the Nissan Leaf and Mitsubishi i-MiEV, the Prius Plug-in is eligible for taxpayer subsidies in certain provinces. Prius Plug-in buyers can get a taxpayer-funded rebate of up to $5,092, while C-MAX Energi buyers can get as much as $5,830 in a rebate.
All these auto companies believe hybrids will dominate the world of electrified vehicles for at least the short- to medium-term. In fairness, Toyota was the first global car company to commit fully to hybrid as a “core vehicle technology,” though the largest Japanese car company is hardly alone today. Every auto makers has an active EV program in place, though some are more committed than others.
That said, the barriers to a deep and comprehensive adoption of electrified vehicles are many and formidable. But none are more daunting than the challenges facing battery technology and, more specifically, the leaders in battery technology.
Last month, A123 Systems Inc. – which supplies advanced lithium ion batteries to General Motors, Fisker and others – filed for Chapter 11 bankruptcy protection in the United States. As I write this, there is an ongoing struggle for control of A123 between American and Chinese suitors. Automotive News reports that Chinese auto parts maker Wanxiang Group Corp. is eager to buy A123, while Wisconsin-based Johnson Controls is also in the running to take over the Massachusetts-based battery maker’s assets.
A123 is a global leader in battery technology and has received nearly $250-million (U.S.) in U.S. government grants, thus making the bankruptcy issue a highly politicized issue. The Obama administration has been eager to nurture a market for EVs and has plowed billions into supporting this nascent industry. Alas, notes Automotive News, A123 “has been bleeding red ink since 2001. In the past five years, the company has lost $877.7-million, including a loss of $269-million through August.”
As The Wall Street Journal reports, the Obama administration set a goal of getting one million electric or plug-in vehicles on the road by 2015 and has been supporting that initiative with taxpayer funding. Consumers, however, have not been stampeding to dealer showrooms to buy EVs – at least not yet, though optimists abound.
As The Journal notes, through the first nine months of 2012, “Nissan Motor Co. has sold just 9,674 Leaf electric cars, and General Motors Co. has sold 7,671 rechargeable Volt compacts” – a tiny fraction of the total market of 12.8-million light vehicles sold in the U.S. EV sales in Canada number not in the thousands but in the hundreds so far this year.
Will buyers ever get charged up in big numbers about EVs and at least plug-ins? Maybe, but the challenges are huge and not just because the world is awash in oil and the cost of buying any electrified vehicle – particularly a pure EV – is too high to be palatable for most buyers, even with taxpayer subsidies factored into the equation. Aside from cost, the appeal of battery cars is hindered by range that at best limits EVs to 150 km or less on a single charge.
And the typical 110-volt recharge of a full EV is eight hours, while those with access to a 220/240-volt outlet can get a full charge in 2-1/2 hours or so. Quick-charge systems can cut that time to 20 minutes or so, but fast-charge stations are expensive and rare. Charging stations, period, represent an as-yet-unsolved problem for EVs.
Ghosn, the world’s biggest backer of EVs, says the lack of a charging infrastructure in the United States is the main reason why Nissan will not meet its sales target for the Leaf this year. In an interview with Bloomberg Television, Ghosn said, “Nissan will not sell 20,000 Leafs this year in the U.S.
“We’re trying to convince more cities and states to invest in this infrastructure,” he said. “We recognize the fact that the increase of sales is taking more time than we thought at the beginning.”
All that oil isn’t helping matters, either.
What can hybrids do for the planet?
Toyota, which has sold more than 4.6 million gasoline-electric hybrids around the world since 1997, says that by the end of October of this year, its hybrid vehicles have cut CO emissions by about 30 million tonnes worldwide – compared to emissions from gasoline-powered vehicles of similar size and driving performance.
There’s more. Toyota says its hybrid vehicles have saved approximately 11 million litres of gasoline worldwide based on calculations for what fuel would have been used by purely gasoline-powered vehicles of similar size.