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John Petersen is the executive vice president and chief financial officer of ePower Engine Systems, Inc., a Kentucky-based enterprise that has developed, built and demonstrated an engine-dominant diesel-electric hybrid drivetrain for long-haul heavy trucks that promises fuel savings of 25 to 35... More
My company:
Fefer Petersen & Co.
My blog:
ipo-law.com
  • How PHEVs and EVs Will Sabotage America's Drive For Energy Independence 1 comment
    Aug 26, 2009 10:34 AM | about stocks: TM, NSANY, HEV, VLNCQ, JCI, XIDEQ, AXPW, CHP
    Yesterday I asked a frequent commenter and staunch electric vehicle advocate whether he ever questioned the ethics of building an EV that can save one owner 400 gallons of gas per year while using enough batteries to build ten Prius-class hybrids that could save their owners a combined total of 1,600 gallons of gas per year. I then spent an hour in stunned silence as the critical importance of that question crystallized in my mind. I didn't get a responsive answer from the commenter, but I did get one of those rare moments of clarity when everything suddenly falls into place.

    For years the mainstream media, scientists, elected officials and promoters have written and spoken ad nauseum about how a new generation of plug-in hybrid electric vehicles, or PHEVs, will liberate America from the tyranny of imported oil. The problem is the promises are based on flawed assumptions and utterly false. At their best, PHEVs and EVs are all sizzle and no steak when it comes to national energy independence. At their worst, they are deep cover saboteurs that will undermine America's drive for energy independence while stridently claiming to be part of the solution.

    The simple facts

    The average American drives about 12,000 miles per year. If his engine meets current CAFE standards and averages 27.5 mpg, the average American will burn about 436 gallons of gasoline and generate about 4.4 tons of CO2 per year.

    The Prius is a hybrid electric vehicle, or HEV, manufactured by Toyota Motor Corporation (TM) that carries a base sticker price of $22,750. The Prius has an enviable 10-year track record of slashing gas consumption by roughly 40% through a combination of idle elimination, electric only launch and recuperative braking. It's a marvel of efficiency engineering that eliminates waste wherever possible. Each new Prius uses about 1.6 kWh of NiMH batteries to save the average owner roughly 174 gallons of gas per year while eliminating 1.7 tons of CO2 emissions.

    General Motors is getting ready to launch its eagerly anticipated, irresponsibly hyped and largely untested Volt, a PHEV that will use a combination of electric drive and gasoline engine technology to offer 40 miles of electric only range before the gasoline engine kicks in. The Volt is expected to have a base sticker price of roughly $40,000 before tax subsidies of $7,500 per vehicle. Each GM Volt will use 16 kWh of lithium-ion batteries and save the average owner up to 436 gallons of gasoline per year.

    In 2010, Nissan Motors (OTCPK:NSANY) plans to launch its highly touted Leaf, a pure EV that will do the Volt one better by eliminating the gasoline engine altogether. The Leaf is rumored to have a base sticker price that will be competitive with the Volt and enjoy comparable tax subsidies. Each Nissan Leaf will use 24 kWh of lithium-ion batteries and save the average owner 436 gallons of gasoline per year.

    The following table summarizes the maximum impact that Toyota, General Motors and Nissan can have on gasoline imports for every 48 kWh of battery capacity used in their products:

     
    Vehicle Cost
    Battery Capacity
    Savings Per Car
    Number of Cars
    Total Gas Savings
    Prius
    $22,750(a)
    1.5 kWh
    174 Gal.
    32
    5,568 Gal.
    Volt
    $40,000(e)
    16 kWh
    436 Gal.
    3
    1,308 Gal.
    Leaf
    $40,000(e)
    24 kWh
    436 Gal.
    2
    872 Gal.

    The (a) and (e) in the table refer to actual and estimated prices. I used 48 kWh for the example because it's the lowest common denominator for 1.5, 16 and 24.

    Automotive drive-train batteries are scarce resources, which is why President Obama recently announced $1.2 billion in Federal grants to help finance the construction of new battery manufacturing facilities. Despite the scarcity, developers of outrageously expensive PHEVs, EVs and the lithium-ion battery packs that will be used in their manufacture have convinced a gullible Congress that their products, which will only save a little gasoline, deserve huge Federal subsidies while more modest HEVs, which could save a lot of gasoline, deserve no Federal support.

    Does anybody in Washington DC have a calculator and the capacity for independent thought?

    The battery wars

    Much of the blame for the current state of affairs belongs at the feet of lithium-ion battery developers like Ener1 (HEV), Valence Technology (VLNC), Johnson Controls (JCI) and others that have mounted a highly effective PR campaign to convince everyone that lithium-ion is the only battery technology that's small enough and light enough to power a fleet of PHEVs and EVs. Their illusory promise of energy independence coupled with frequent assurances that the cost, performance, abuse tolerance and cycle-life issues that plague lithium-ion batteries will be solved in the immediate future have led to an absurd situation where the Federal government is heavily subsidizing a wasteful alternative that will ultimately sabotage America's drive for energy independence.

    I have written at length about the development path lithium-ion battery developers must follow if they want their products to become cheap enough and durable enough for the automotive market. I have compared the performance of lithium-ion batteries with far cheaper lead-carbon batteries being developed by Exide Technologies (XIDE) in cooperation with Axion Power International (AXPW.OB); by C&D Technologies (CHP) in cooperation with Firefly Energy; and by East Penn Manufacturing in cooperation with Japan's Furukawa Battery Co. (FBB.DE). I have demonstrated that lithium-ion batteries are not necessary in micro, mild and full hybrids where a 77 pound weight advantage and 0.7 cubic feet of saved space can't justify $1,250 in incremental battery cost. I have also explained how billions of dollars in existing lead-acid battery manufacturing facilities can be leveraged to facilitate the inexpensive implementation of micro, mild and full hybrid technologies in the U.S. and Europe in years instead of decades without the short-term supply chain constraints that will impede the commercialization of other battery technologies.

    In December of last year I wrote that the energy storage sector needs to take baby steps before it can run and I regularly quote a favorite a line from "The Lost Constitution" by William Martin that says, "In America we wake up in the morning, we go to work and we solve our problems." America has the techincal ability and the manufacturing infrastructure to implement HEV technology in all new light vehicles within a decade. If we wait for cheap lithium-ion batteries and cost effective PHEVs and EVs, the process will take far longer, cost much more and offer less flexibility to consumers. I strongly advocate the continued development of lithium-ion and other battery technologies because HEVs are not the journey's end and we can do better. We cannot, however, take a giant leap into the future without first taking the reasonable steps that are available and affordable today.

    Notwithstanding the deafening drumbeat of hype from mainstream media, academics, elected officials and lithium-ion battery developers, the undisputed facts are that lithium-ion batteries are not ready for prime time and PHEVs and EVs are little more than vanity items for elitists who will happily let up to fifteen other Americans waste up to 2,610 gallons of gas per year so that they can save 436 gallons by driving a 100% green car. Their hypocrisy is appalling.

    DISCLOSURE: Author is a former director and executive officer of Axion Power International (AXPW.OB) and holds a large long position in its stock. He also holds a small long position in Exide (XIDE).
     
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  • herbwuz
    , contributor
    Comment (1) | Send Message
     
    Also, the increase in use of lithium-ion batteries in pure elctric vehicles merely shifts the production burden to electric power utilities (coal-generated electricity, anyone?) and subjects the environment to a large battery disposal load. Also, the EV's will suffer a huge depreciation at the mileage where the expensive battery packs must be replaced. Not a good deal.
    29 Jun 2010, 04:39 PM Reply Like
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