Prospects for Electric Cars 21 comments
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Speculation on the prospects for electric cars and their impact on the world’s economies make for interesting chatter. As China, the U.S. and European governments step up their stimulus programs to encourage electrification of vehicles, investors are starting to take notice. The question is which industries offer the best investing opportunity.
The Tesla Motors Roadster is expected to deliver 200 to 240 miles per charge, depending on driving conditions and usage. According to General Motors, the Chevrolet Volt, when it finally hits the showrooms, will get 40 miles between charges. The difference is due to the size of the batteries used to power the car. In the Tesla’s case there are more batteries installed on the car, as it depends only on battery power. The Volt will have a small gasoline engine to help recharge the batteries beyond the 40-mile limit. Other hybrid-eclectic vehicles such as the Toyota Prius also use a small gasoline engines to help charge the battery and in some cases add power to the wheels when necessary. The electric cars can be recharged by plugging the car into the power grid using a special adaptor, though some can be charged through the standard household electric outlet.
China has set a goal of producing half-a-million electric cars annually by 2011. To help stimulate this goal they have announced they are investing $1.4 billion in R&D. The United States has committed $2 billion in stimulus spending to help design and manufacture better batteries. Vehicle manufacturers are receiving help to the tune of $25 billion form the U.S. government to retool their production lines so they can produce larger number of fuel-efficient vehicles, including electric ones.
As more electrified cars and trucks move to the mainstream, they will require some significant changes in several industries if they are to be commercially successful. While some people may believe the move to electric cars is a long way off, the current drive by several major governments should not be ignored. The power trains, battery, and utility industries will each see investing opportunities.
Electric Power Trains
As shown by the success of the Tesla, start-up manufacturers are already making small inroads into the electric car industry. Faced with large legacy engineering and manufacturing processes, the incumbent auto and truck manufacturers must deal with the challenge of operating their existing vehicles while they introduce new vehicles including electric ones. Most of the vehicle manufacturers have outsourced all vehicle components other than engines and drive trains. Electric and hybrid-electric vehicles use significantly different engines and drive trains than your traditional gasoline or diesel powered cars and trucks. As a result, many of these companies must completely redesign their current engineering and manufacturing processes to adapt to the new electric power trains.
Controlling battery design and production will be a core skill that will help to differentiate a car or truck. If your car or truck can go 25% farther on the same charge, you will have a significant competitive advantage. In addition, the technology to manage power will require investment in electronics and software that is foreign to the auto manufacturers.
These new power trains open the door to innovations and start-up firms to capture a significant share of the market, as the traditional vehicle manufacturers wrestle with their transition from their current emphasis to new hybrids and all eclectic drive trains. As a result, many traditional vehicle manufactures will collaborate with or acquire these new firms. For example, Daimler A.G. (DAI) has acquired nearly a 10 percent stake in Tesla Motors, which remains privately held.
Companies such as BorgWarner Inc. (BWA), who produces the single-speed gearbox for the Tesla Roadster, will have to adjust their design, engineering, and production approach to meet the challenges of electric vehicles.
Battery Industries
The potential to displace oil as the power source for millions of vehicles is an interesting opportunity. Governments in China, the European Union, and the United States are trying to encourage industries to develop world-class battery technology, so they can become the world leader. Like many industries, the value of the product will shift from the basic components to total systems. Today, batteries are comprised of cells whose chemistry generates electricity. While important, cell chemistry is likely to become a commodity with little to differentiate it from others. For example, battery manufacturers have accomplished the transition from lead battery technology to lithium-based chemistry.
The most successful battery manufacturers will be the ones who move to system level capabilities designed to support specific vehicles. These systems will use electronics and software to offer power and thermal management capabilities that optimize the battery’s performance for a specific vehicle. This will require a more complex engineering and production capability. It will also require the battery manufacturers to work closely with the tier one drive train manufacturers and the auto manufacturers themselves. To succeed the battery manufacturers will have to develop significant new skills and capabilities so they can meet the needs of each vehicle. This will require substantial financial strength as well.
Engineers estimate that the cost of a battery for a plug-in electric car that gets 40 miles before it needs recharging is $11,800. This cost increases to $24,000 for a car that gets 100 miles per charge. The cost of a battery for a common laptop runs $50 to $100. This gives you an idea of the opportunity for battery manufacturers. If the world were to see 6 million electrified vehicles sold per year, the market could be greater than $70 billion. The cost of a battery will decline as volumes rise and economies of scale are achieved. Some analysts estimate we should expect a six to ten percent drop in the price of an equivalent battery over the next ten years. To achieve this, battery manufacturers will have to invest substantial sums in engineering and manufacturing.
Another challenge the battery manufacturers face will be how they deal with warranty issues. Today, these manufacturers have a relatively small exposure to warranty problems. Probably the largest has been problems associated with several laptop computers that have high failure rates or in some cases caused a fire. While serious, these batteries have a relatively low cost compared to the cost of an electric car’s battery. Replacing an entire battery system and possibly the vehicle will require new approaches as well as very strong balance sheets.
As each of us has witnessed, batteries have a useful life that grows shorter with use. Eventually batteries must be replaced. This creates a new aftermarket opportunity that has not existed. It also creates a disposal problem. Recycling cell phone and laptop batteries is one thing. Putting in place the process to recycle lithium car batteries is quite another. So far, there seems to be very little study on this problem, though it looms quite large as areas of the world move to electric cars. Where there is a problem there is an opportunity
Electric Utilities
Electric vehicles offer new opportunities for the electric utility industry. Most people assume that the plug-in vehicles would be recharged at night. If true, the electric utilities would not have to invest in new infrastructure, as this is an off-peak demand period. However, if drivers of electric vehicles found it necessary to plug their cars in during the day, a peak period use, they could force the utilities to invest in additional infrastructure to meet the higher demand. Companies might want to encourage their employees to drive electric cars by providing plug-in centers at their parking facilities, so drivers could recharge their cars during the day. I could even see some companies claiming this as a company benefit, using the service as a way to help offset their carbon producing facilities elsewhere.
Electric utilities are aware they must invest to create new smart grid capabilities that will help to manage usage of electricity. Electric cars will add to the demand for this new infrastructure. Utility company engineers see this as just another demand placed on the electric grid. However, we might see entrepreneurs employing renewable energy methods to take advantage of these opportunities. Maybe a windmill and or solar panels hooked up to a recharging unit in the parking lot will offer a way for cars to recharge without using the local electric utility.
The Bottom Line
Any time there is a fundamental change in the way an industry operates, new investing opportunities develop. Investors who understand these opportunities can reap the rewards. They also must manage the risks, as they can be large. These opportunities will come from several industries, but especially the drive train and the battery companies. To a lesser extent the electric utilities may also benefit, though not to the same extent, and possibly not at all.
As governments stimulate the move to use of electricity to replace oil, investors should be prepared to find opportunities to benefit. These opportunities will grow with time and the time is now to start your research.
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This article has 21 comments:
What success with Tesla? They have only succeeded in hooking investors with little knowledge of what is in store for pure plug-ins. They have not sold a single car.
Ultimately, as these all come to market, the will be found as nothing more than sophisticated golf carts, "tethered" to their home charging stations. They will never be able to:
1. Go on long trips
2. Go up long hills
3. Go 75 mph for extended periods of time
4. Pull a trailer
5. Provide comforts such as heaters and air conditioning without severely effecting the range.
Forget about plug-ins. They are a great car for producers, simple (minded), easy to manufacture: no messy transmissions, engines, differentials, all that rotating stuff that makes a car difficult to design and manufacture. For the user, it is a "go to market", commuter car.
The charging problem will NEVER be solved. The delivery of the equivalent of 200 KWH during a trip is not feasable. Even Tesla sees this problem and proposes that we have "battery change stations", where you drive up to your filling station and CHANGE YOUR BATTERY.
Give me a break.
Say it like it is. Tell the real story about charging time for pure plug-ins.
Here in the UK, delivery company TNT Express has so far added 150 electric trucks to its fleet - most of them 7.5-ton Smith Newtons, plus some 3.5-ton Smith Edisons. They are in everyday use at 23 depots across England, Scotland and in Holland.
Supermarket chain Tesco operates a fleet of Modec 5.5-ton electric delivery vans, while their rival Sainsbury's oprate about 20 Smith Edison 3.5-ton food delivery vans.
Swapping the battery pack on a Modec van takes 15 minutes. Taxis in Japan are trialling a battery swap system that takes about one minute.
You are a bit behind the times with your knowledge of what is happening - and I venture to suggest that you will yourself be driving an electric car within 7 years.
Tanfield also hold a substantial stake in the US company, Smith Electric Vehicles US Corporation, whose first 7.5-ton electric trucks were recently sold to Coca-Cola Enterprises, Frito-Lay, Pacific Gas, Staples, and others.
As with any disruptive technology people tend to confuse and conflate its applications and purposes.
Electric vehicles (EVs) are not replacements for ICE powered vehicles. Furthermore, they are not intended to *replace* petroleum in transportation applications. EVs are intend to *displace* fossil-fuel consumption in enter-city commuting. Around 85 percent of us travel under 40 miles per day. Long time EVers know we plug in at night, wake up in the morning with a "full tank," go about our business during the day, and return home where we plug-in again.
True, some adventurous folks go on long EV tours. It's feasible you just have to allow extra time for recharging. Otherwise hop in your SUV and do what you need to do. No one is trying to stop you. We're offering options, not mandating replacements.
Alternatively, the Chevy extended range EV is designed for both applications: daily commuting in pure EV mode and longer trips with the ICE generator to keeping you going outside of the 40 EV mile radius.
By the way, a Tesla Roadster recently drove across the nation. Look up the Renew America Roadtrip.
And then there's vehicle-to-grid (V2G) technology, in pilot testing in several areas. Look it up. The power company will pay you to use the battery packs in your car. With EVs you no longer have to go to gas stations, and the utilities will pay you to plug in. Sounds like a good deal to me.
And then there's smart-garage . . .
Bob
---
On Aug 30 12:46 PM tukuemuaca wrote:
> What everyone is missing and no one talks about is the charge time.
> Even IF there are charging stations along the road, delivering 70
> amps a 240 volts, it will take HOURS to recharge the batteries.
>
>
> What success with Tesla? They have only succeeded in hooking investors
> with little knowledge of what is in store for pure plug-ins. They
> have not sold a single car.
>
> Ultimately, as these all come to market, the will be found as nothing
> more than sophisticated golf carts, "tethered" to their home charging
> stations. They will never be able to:
>
> 1. Go on long trips
> 2. Go up long hills
> 3. Go 75 mph for extended periods of time
> 4. Pull a trailer
> 5. Provide comforts such as heaters and air conditioning without
> severely effecting the range.
>
> Forget about plug-ins. They are a great car for producers, simple
> (minded), easy to manufacture: no messy transmissions, engines, differentials,
> all that rotating stuff that makes a car difficult to design and
> manufacture. For the user, it is a "go to market", commuter car.
>
>
> The charging problem will NEVER be solved. The delivery of the equivalent
> of 200 KWH during a trip is not feasable. Even Tesla sees this problem
> and proposes that we have "battery change stations", where you drive
> up to your filling station and CHANGE YOUR BATTERY.
>
> Give me a break.
>
> Say it like it is. Tell the real story about charging time for pure
> plug-ins.
Electric motors should also be dropping in price.
Everyone forgets about the converter that changes battery power into the AC power that drives the motors and the price for the converter should be getting less expensive as well as being able to handle more power.
Lithium batteries are far lower than this article says as EV converters are buying the for $.30/whr as is GM from LG. This price is lower than sealed lead batteries and the goal set by auto makers to be viable.
Tesla is selling every one they can build, over 500 now.
Future EV's will need far smaller battery packs/mile as auto companies learn how to lower drag and build lighter EV's.. No reason a 4 seat EV can't be built using under 100wyhrs/mile, 2/5/s what the Volt uses.
Late next yr oil will hit $150/bbl and EV's go 3-6x's farther on less expensive electric power for the same base fuel energy.
On Aug 31 04:40 AM jerrydd wrote:
>
> Lithium batteries are far lower than this article says as EV converters
> are buying the for $.30/whr as is GM from LG. This price is lower
> than sealed lead batteries and the goal set by auto makers to be
> viable.
>
> Tesla is selling every one they can build, over 500 now.
>
> Future EV's will need far smaller battery packs/mile as auto companies
> learn how to lower drag and build lighter EV's.. No reason a 4 seat
> EV can't be built using under 100wyhrs/mile, 2/5/s what the Volt
> uses.
>
> Late next yr oil will hit $150/bbl and EV's go 3-6x's farther on
> less expensive electric power for the same base fuel energy.
What about brown outs if everyone goes to the electric car? What happens to the batteries when they are not longer useable? Dump them where? I'm not sure people have thought this thru yet. Electric cars/ vehicles do have a place but not for the general public yet. 240 mile range is a joke in some parts of the country. It is not as if you have a electric gas station everywhere. Maybe a few wind farms will help.
Drill baby, drill.
Check this article for more facts - www.altdotenergy.com/2.../
EV's will actually help a renewable energy grid by utilising their batteries as storage / load balancing devices.
When the batteries are no longer usable they can be safely and efficiently recycled to produce new batteries.
EV's are the future and it's a good thing we have them because 'Drill baby, drill" has to be the most moronic phrase to come along since 'God made dinosaur fossils to test our faith'. Oil is a finite resource, as in we have used half of it up already and the other half is extremely difficult to get at and at present consumption will last about 40 years!
On Aug 30 12:46 PM tukuemuaca wrote:
> What everyone is missing and no one talks about is the charge time.
> Even IF there are charging stations along the road, delivering 70
> amps a 240 volts, it will take HOURS to recharge the batteries.
>
>
> What success with Tesla? They have only succeeded in hooking investors
> with little knowledge of what is in store for pure plug-ins. They
> have not sold a single car.
>
> Ultimately, as these all come to market, the will be found as nothing
> more than sophisticated golf carts, "tethered" to their home charging
> stations. They will never be able to:
>
> 1. Go on long trips
> 2. Go up long hills
> 3. Go 75 mph for extended periods of time
> 4. Pull a trailer
> 5. Provide comforts such as heaters and air conditioning without
> severely effecting the range.
>
> Forget about plug-ins. They are a great car for producers, simple
> (minded), easy to manufacture: no messy transmissions, engines, differentials,
> all that rotating stuff that makes a car difficult to design and
> manufacture. For the user, it is a "go to market", commuter car.
>
>
> The charging problem will NEVER be solved. The delivery of the equivalent
> of 200 KWH during a trip is not feasable. Even Tesla sees this problem
> and proposes that we have "battery change stations", where you drive
> up to your filling station and CHANGE YOUR BATTERY.
>
> Give me a break.
>
> Say it like it is. Tell the real story about charging time for pure
> plug-ins.
Why drill, when there is oil (and natural gas) filling every available storage facility on the planet, with wells being shut down (and refineries soon to follow) in order to keep retail prices high.
get a clue -- not a slogan
On Aug 31 08:12 AM BlueOkie wrote:
> We sure spend a lot of time finding a means to NOT drill for oil.
> How do you produce electricity? NG, Coal, etc.
> What about brown outs if everyone goes to the electric car? What
> happens to the batteries when they are not longer useable? Dump them
> where? I'm not sure people have thought this thru yet. Electric
> cars/ vehicles do have a place but not for the general public yet.
> 240 mile range is a joke in some parts of the country. It is not
> as if you have a electric gas station everywhere. Maybe a few wind
> farms will help.
> Drill baby, drill.
I'm most familiar with battery companies from those I use and other I know use from my long EV experience.
There are few battery plays I know of that are worth it. Why is some are bad or scams and the market is flooded with companies and little market for them.
The best market for most of them is utility storage as far as I see because there will not be that many EV's, PHEVs for yrs. Car company will either make their own like GM is planning or locked in suppliers already.
The only one I'm sure about is A!23 which soon will have an IPO. It has a great durable, powerful battery and has orders, 2 things most don't have.
Some I wouldn't touch because of bad products or no product and technically not what they are hyped to be. These are Axion, Ultrabattery, EEStor which hype, their non existent products and lie they are ultracapacaitors. Exide has bad products which don't last and cuts legal corners so bad some of their officers went to jail.
BYD is good but probably overvalued.
Others like the Japanese are only small divisions of large companies like Panasonic, Sanyo.
On charging EV's will not have any penetration to speak of for 5 yrs and with most charging at night, new generation will not be needed for 10 yrs at which point RE will have added it and EV's through V2G will make the grid more stable to putting power back into it with their motor inverters when the grid needs it and be recharged before one needs it. Each EV can put out 50-200kw's for a short time.
Anyone saying they can charge in under 10 minutes has no idea how much power that would take from the charge station, just not doable. To charge a 250 mile range, 50kw battery pack would take 300kw in 10 minutes is about the limit. I have fast charged battery packs and this is from experience.
Blue Okie, Drill baby drill doesn't have a clue about either oil availability or EV's. 80%+ people drive 40 miles or less/day.
And their are many batteries that can be charged in 15 minutes like A123 as most can charge as fast as they can be discharged. It's mostly a matter of how big the connections, internal electric collection bus is, not the chemistry.
Lithium batteries are now selling for around $.30/whr and what GM is buying LG for too in mass quantity.
David. Actually, retail prices are extremely low. If it weren't for taxes....
This glut is just a temporary thing. Just wait, people love to waste money on their vehicles. It is an extension of their "wannabe" psyche. Electric cars are not intimidating and will be a hard sell to the vast majority. I hope electric cars do become economically feasible. I plan on my next vehicle to be electric.
make EV and PHEV efficiency claims look absurd. The energy, from any source, required to accelerate a vehicle of mass M to velocity V, is 1/2*M*V^2, however you do it. When the electric car mania has subsided, and the realities of thermodynamics have prevailed, we will drive cars with ICEs running on "oil" synthesized from algae, because that is what ill work, regardless of all the mindless hype and uninformed enthusiasm of would-be greens.
What is absurd is the thing you miss is ICE cars are only 7% eff to the road!!
While EV's are 21-60% eff depending on power source from base fuel to the road. And one can make one's own fuel cheaply for an EV. So get some real facts as your's are rather off.
On Aug 31 07:34 PM Gandalph wrote:
> The Tesla requires fluid cooling to keep the Li-ion batteries from
> overheating. A bit of analysis will show that the product of 85%
> electric motor efficiency, and the efficiency of charging the batteries,
> with a significant fraction of the energy going into heat ( which
> must be dissipated by the cooling system), the efficiency of an AC/DC
> converter in the charging station, the considerable losses in the
> grid, the 40 - 50% efficiency of a power plant, (coal, natural gas,
> nuclear all about the same) will
> make EV and PHEV efficiency claims look absurd. The energy, from
> any source, required to accelerate a vehicle of mass M to velocity
> V, is 1/2*M*V^2, however you do it. When the electric car mania
> has subsided, and the realities of thermodynamics have prevailed,
> we will drive cars with ICEs running on "oil" synthesized from algae,
> because that is what ill work, regardless of all the mindless hype
> and uninformed enthusiasm of would-be greens.
Tesla Motors currently expects at least 45 minutes for 300 miles distance. Even though I could live with that, I doubt most other people will have the same patience.