Batteries – Momentum builds for both electric vehicles and backup storage
With the launch of the Nissan LEAF and the Chevy Volt, the newsflow actual performance and market interest in electric vehicles is building. The VOLT was (surprisingly?) well reviewed in the New York Times, and the roster of new vehicle launches is building. The concept is attractive, whether as hybrids, plug-in hybrids, or for ‘return to base’ operations, all electric vehicles, as a car can travel about 3-4 miles per kilowatt hour of battery power. And, at even $0.15/kwh, that’s a nickel a mile in variable cost. Of course, the offset is a $5k-$25k premium for the battery/system, at roughly $500-$750/kwh of capacity. Even at today’s battery costs, various electrified vehicle designs are economically attractive above $4/gallon gasoline (and better for some). Highly visible customers are climbing aboard. GE’s announced multiyear purchase of 25,000 electric cars, the US government program, a forecast by UK officials – that 20% of the UK fleet will be electric by 2020 – all suggest more momentum than expected for such an infrastructure-challenged transportation option. Lucky GoldStar’s US division, called Compact Power believes that battery-related costs will fall by 50-75% over the next decade bringing overall vehicle prices in line with existing gasoline/diesel powered transport, and that battery demand will exceed planned (and aggressive) supply by 2015. However, one analyst notes that there are ‘fifty battery companies with competitive products’ — today – and there are ten plants under construction – in Michigan, alone. Will demand support this uber-investment? Perhaps not in the US, where charger-investment is lagging smaller, more cover-able markets such as Israel, although China is about to announce a plan to develop ‘Ten Million Parking Spots’ by 2020 – probably due for upward revision. A nearer term opportunity for batteries is developing in high cost, gas-deprived, electric markets, where economics are progressing toward attractive levels as grid storage, or supply shifting, applications. Oil-fired power is often the only option for island economies, where power rates average over $.40/kwh. A123 and several other battery makers are getting some early traction with this business proposition.