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Why Batteries Are Too Valuable To Waste On Solar Power Integration And Electric Cars

Mar. 10, 2013 6:30 PM ETAXPWQ, NSANY, NSC, TM, TSLA750 Comments
John Petersen profile picture
John Petersen

Over the last three decades, I've worked as counsel for several clients in the mining, oil & gas and battery industries. Because of that experience, I've always understood that battery manufacturing is extremely energy intensive. After all, the entire value chain from mining and purifying metals through component fabrication and final assembly requires massive fossil fuel and electric power inputs. Until last week, however, I didn't truly understand the magnitude of the energy inputs required to make a battery.

Last week I spent a few days digesting a paper from Stanford University's Global Climate and Energy Project titled "On the importance of reducing the energetic and material demands of electrical energy storage" that was published in the Royal Society of Chemistry's Journal of Energy & Environmental Science.

While the paper's conclusions were predictable, I was tremendously impressed with its "cradle-to gate" analytical framework that started with black earth, estimated total energy inputs for mining and processing raw materials, and then estimated additional energy inputs for manufacturing batteries from those materials. The result was a highly informative series of "embodied energy" values that represent the total amount of energy invested in manufacturing a particular type battery.

This graph from the Stanford paper ignited an insatiable curiosity because it uses "megajoules," an apples-to-apples measurement standard, to compare the total embodied energy in a battery with the total energy storage capacity of that battery. I've never seen anything like it and I believe it may be the most important concept I've ever discussed.

While the graph used megajoules for its basic measurement unit, it could have just as easily used "watt-hour equivalents" or "kilowatt-hour equivalents" since those measurement units are interchangeable in fixed conversion ratios. As long as the same measurement unit is used for both sets of data, it really doesn't matter what the unit is.

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John Petersen profile picture
I'm a lawyer and accountant who's devoted the last four decades to advising entrepreneurs on corporate finance, SEC registration and reporting, and corporate governance matters. All of my client projects have involved high levels of uncertainty, compressed timelines, and urgent financial needs that demanded unparalleled responsiveness. I know how to get major projects completed on time and within budget. I'm a 1979 graduate of the Notre Dame Law School and a 1976 graduate of the W.P. Carey School of Business at Arizona State University. I was admitted to the State Bar of Texas in 1980 and subsequently licensed to practice as a CPA in 1981. While I don't hold myself out as a practicing accountant, I regularly use my in-depth knowledge of accounting methods, processes, and procedures to offer nuts and bolts counsel to clients who need integrated advice on finance-driven legal matters.As general counsel for the C Change Group, I'm involved in all of that company's domestic and international initiatives.

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Comments (753)

Long time, let's see if the author responds.

I didn't see any critique of the Prius calculations. They look overcomplicated and incorrect.

A CAFE car @ 34.2MPG @ 15,000 miles/year uses 439 gallons of fuel per year. A Prius @ 50MPG @ 15,000 miles/year uses 300 gallons of fuel per year. That's a difference of 139 gallons/year. Over a lifetime of 10 years, that's 1390 gallons saved.

I don't think you get to discount the Prius for "aerodynamics", either the CAFE cars currently have or will have the same tech soon. What the Prius does have is regenerative braking, which is why the City MPG better than the highway MPG. A CAFE ICE car doesn't have regenerative braking and can never have it. (Okay, maybe you could compress air or something, but nobody is doing that yet).

As far as comparing energy delivered to the wheel, I don't think you get the count that differently (e.g. the 20% gas efficiency). You don't use that anywhere else. Electric and Liion aren't 100% efficient either. You also didn't count energy delivered to the wheel on the CAFE ICE car so you are comparing apples to oranges.

In the end, a consumer has two choices: Buy a prius with built in energy used already but save 1390 gallons of gasoline, or buy a CAFE ICE car. So you have to use 1390 gallons as the net energy savings of the Prius offset by energy invested into the battery

Using your spreadsheet, I get ESOI of 48.3. I suspect most of that is regenerative braking and running the ICE in the most efficient zone, which you can't do with non-hybrid cars. (well, newer transmissions are helping with the efficient zone part of the equation).

Interestingly enough, at current prices of $3/gallon, a Prius saves you $4,170 but the 1.4KWh battery costs $1,000. Even using a 10% discount rate it's still a net savings. Given how electricity is generated in battery producing countries, that cost went into coal or oil generation, as well as the labor to build factories, mine the Lithium, etc.
User48601 profile picture
I didn't read the article but let me guess:
- The need for battery storage for solar power is growing.
- The battery partnership between Tesla Motors and Solar City is doomed to failure.
- Axion Power can supply the perfect batteries.

Is this SA-certified author hocking his own agenda?
froggey77 profile picture
"Is this SA-certified author hocking his own agenda? "
I guess you would have to read the article and see if you can refute what he wrote in this article. of course it's nearly a year old so why bother adding snarky comments to an article you haven't read?
No I take that back, I really don't care what you have to say.
Did Peterson discuss damage to the environment caused by "fracking" such as chemical water runoff?
froggey77 profile picture
Or the damage made by producing electricity with Coal plants?
Julian Cox profile picture
This article is utterly fatuous because the Wh rating of a battery relates to its capacity. A rechargeable battery whose capacity is utilized 2000 times (for example) has is 2000 times better economy/environmental friendliness than this article/author would have you believe.
MRTTF profile picture
Actually, Wh relates to energy. Ah relates to capacity. The Wh rating can be "gamed" by the voltage used to calculate the value.
John Petersen profile picture
You're absolutely right that a battery "whose capacity is utilized 2000 times" can work out pretty well.

In the case of a Nissan Leaf you can charge and discharge the 24 kWh battery 2,000 times over a paltry 192,000 miles.

In the case of a Tesla Model S with an 85 kWh battery pack you only have to drive 680,000 miles.

I think you need to spend a little less time snarking and a little more time thinking your arguments through to their logical conclusions.
Julian Cox profile picture
Apart from the silly comment at the bottom to make it appear otherwise, readers should appreciate that you have just conceded your argument. Does anyone have a problem with the idea that a small family car is built to last 192,000 miles and a Model S luxury sedan is built to last 680,000. I have sat in VW Jetta taxis with nearly 1 Million miles on the clock - just googling: World Record Car Mileage Holder Nears 3,000,000 on '66 Volvo. 680,000 mi MTBF sounds good to me.
Check out this new battery technology:


Does this mean to AXPW?
John Petersen profile picture
It's an extremely cool idea that will be extremely expensive to manufacture, if they can ever figure out how to manufacture it.

The battery business is all about trade-offs and sacrifices and you can't get to extreme speed without sacrificing energy and safety.

A bleeding edge development in lithium-ion manufacturing means nothing to AXPW.
marketquant profile picture
The search for a "3-D" anode/cathode has apparently been around for a long time.

The power density would be much higher, but the energy density is slightly lower. So, it's not a solution cars, but if it came to fruition then it could find a niche in certain grid applications, if it was cheaper than ultracaps.
Long time follower of JP article on SA. I just happened to run across this article that may be of interest to you guys.


I am looking forward to reading your takes on this new technology.
anderlan profile picture
Any battery technology ONLY has to pass break even in order to launch themselves as a replacement for fossil energy. Most do this rather well. It's amazing that you would argue that they are not suitable bottom-line energy transition technologies. Unless you are just down on energy transition generally...

Anyway, the 2 important values are, as you very helpfully emphasize (Thank You, Thank You, Thank You), are
1.) the Joules (Mega-, Giga-, or Tera-) required to mine and refine and assemble the constituents of a battery (or recycle it*), and
2.) the Joules that can be stored and retrieved over the battery's lifetime.

If 2 is greater than 1, AT ALL, then the battery is a go for helping the economy attain total renewable energy conversion. If the delta is small, the energy transition launch vector is small, if large, then large.

*The energy for recycling represents another kind of simple launch vector: if the recycling energy should be less than the initial manufacturing energy. Then, the recycling energy becomes #1. over a short time.

Your experience, and possibly interest, clouds your view of this.
John Petersen profile picture
Unfortunately you left out 3) the Joules required to create the energy you hope to store in the battery, and 4) the round trip energy efficiency of your storage and use system. Once you account for those beasties your dream of energy transitions goes up in smoke because the numbers can't possibly balance.
Jim Baruch profile picture

What percent of the energy that moves through the charge cord to charge the battery, then retrieve the energy from battery to the motor, and from the motor to the wheel? In otherwords, what is the overall efficiency of this process?

Then, what is the percent energy loss across a typical power grid from the power plant to the charge cord at my house?

Then what is the total energy loss of a coal fired power plant or natural gas fired power plant?

When you add all these up, what is percent energy loss from the BTU's in Coal, natural gas, uranium to the energy delivered to the wheels of the EV?

I have never seen this quoted before broken down into each energy loss segment so that I can relate or make any sense of it. Can you help or provide a study or website, I can review. I want some real engineering type information not peoples opinions or generalizations.

After the energy losses of the overall EV system have been calculated and compared to the same for gasoline ICE and NGV's ICE system, then what is the pollution generated over these whole system for each EV & ICE energy system.

I would like to review a study which has some meat in the data based on solid analysis that I can review.

Would appreciate the help.
John Petersen profile picture
I've never seen a credible dirt to wheels analysis for the energy efficiency of electric drive, but most of what I have seen says that EVs are cleaner than ICE and dirtier than HEVs.

carlosgaviria profile picture
Carson7 profile picture
John, it appears from the 10K filing yesterday, we are reaching the "twilight" hours of the Axion legacy. I want to thank you for your many years of technical discussions, work, and dedication in the support of Axion stock.
John Petersen profile picture
You obviously know nothing of Axion's history. They'll complete a financing in the next month or so, nervous stockholders will breathe easier and the PbC will continue to prove its merit in real applications.
Of course when Tesla's 10K was substantially rosier then this and did NOT contain the dreaded going concern statement that Axion's was forced to you were baying for blood. I wonder whether you even recognise the double standards you display?
John Petersen profile picture
I wasn't baying for blood. I was saying that Tesla needs more capital if it wants to stay in business. It's really funny when a tiny penny stock like Axion has more working capital than the mighty Tesla. The big difference between the two companies is that Axion is honest about needing more money and Tesla isn't.
I'm retired, living on the west coast of Florida. Gas is $ 3.85/gl. My car is a Ford Expedition necessary to pull the boat. My gas bills were huge. I now have a street legal golf cart that will get me to every store, gym, restaurant I need. Cost $5,000. Twenty minutes on the charger, ready to go. This is called a Neighborhood
Electric Vehicle. No brainier!
John Petersen profile picture
NEVs can be very sensible if the empty vehicle weight does not exceed 70% of Its laden weight. Problems only arise when you try to use batteries to power a large vehicle for long distances at highway speeds. The ultimate in electric drive efficiency is an e-bike.
Near drivel. If not codswallop, folderol, and pap,etc.,etc.,.
Dave_M, I paper-trade TSLA to help the faux investors distinguish the difference. In one of John's other posts, the delayed 10K article, I indicated that a 5% short was appropriate at the beginning of last week, which indeed happened last week. The stock's price is in the trough just under a rising 2-sigma channel. Interestingly, it looks like the Cyprus situation didn't cause any further damage, so TSLA may have (don't have the signal yet) a 5% up move sometime this week. I had to ignore my normal sell signal on Friday to ride the down move any further because TSLA moved more than 5% in two days. There's some nice beta in TSLA, but I wouldn't dream of owning it long-term.
colodude - Sounds interesting. "wouldn't dream of owning TSLA long term?".

Well, "long term" for today's investor is about 2 months, ha. Since I'm not an investor (for a living), I can't watch anything close enough to trade, short term. So I have to pick and choose stocks to hold for 12 months +/-. Like they used to do in the old days.
So John, is 600+ comments a personal record, or do we have a ways to go?
600 came pretty quickly this time. All those page views will definitely put another bottle of wine on the table for JP. Seems like the articles are now bringing out growing (and vocal) opposition to the Tesla haters club, which would be expected with more company awareness, and more Model S owners on the road, educating the public face to face.
froggey77 profile picture
Something over 1,000 would be necessary.
John Petersen profile picture
My record is over 1000 comments on an article, so this one's no big deal.

While my payments from seeking Alpha might buy a bottle of vin ordinaries, they certainly wouldn't buy a bottle I'd be willing to serve guests.

Fot the record, I don't Hate Tesla. If it was reasonably priced at four or five dollars I'd be pounding the table on Tesla as a good speculation. At $30 it's a suckers bet.
John Petersen profile picture
I have to admit getting a perverse sort of pleasure from lengthy fanboy comments trying to prove that one plus one equals something other than two. They just don't seem to understand that Elvis left the building days ago.
obieephyhm profile picture
i'm beginning to think trying to reason amongst some here is tantamount to self-abuse. then i remember agrippa theorems, sigh and thank jp for helping me work on my speed-reading skills . . .
joeinslw profile picture
I am not an engineer, or expect that your numbers are wrong, but I know that a rechargeable battery will last somewhere between 10 to 20 years the way these Tesla batteries are made. I had an ordinary battery last 10 years in my Ford truck, and it was just a Diehard battery, believe me it was a diehard. So if they can make batteries last that long, in the future they will last longer.
I know where you are coming from because what is the difference if you charge one from the electric grid, or charge them from the sun like Tesla Model S are charged? The difference is when you drive a model S you are saving two ways, the first and most important is it has NO TAILPIPE which means zero pollution, and the second is that Tesla has super charging stations located in strategic locations, and is building more and more of them. When you charge there the charge is FREE which gives the driver free mileage, what car company can claim that?
The big fear the oil companies have is that it will bring them their knees, giving US the need to say goodbye to OPEC the one ambition I have heard my whole life, now that we are hear, these very same people are shaking at their knees.
I say bring it on, we need to have more competition at the pump, something I have also been saying my whole life, we need this and we shouldn't back away, let's embrace it and say please make Tesla autos more affordable for the masses, and we will no longer have the need to pollute our planet, or wait in line for gas.
viktorobert profile picture
Great post. People want EV and Solar and wind. Oil and coal people don't like this fact. However as inflation keeps moving forward Solar and wind will reach oil/coal/gas parity soon.

The current energy industry is huge but they cant fight inflationary pressures.

Also more and more food will be produced via organic methods. Again this is due to inflation. Organic food will reach cost parity with petroleum produced food and once that happens oil will be on its death bed.
481086 profile picture
Uhh, hate to break it to you, but inflation is also *highly* likely to increase the prices of the very materials that go into making solar panels and wind turbines. Unless greater generation capacity can be manufactured using vastly fewer and/or cheaper materials, and less and less energy, they're not likely to beat petroleum in the inflation race. There's also the little matter of, pace this article....STORAGE.
481086 profile picture

This is not happy talk. But the wise might find it well worth heeding. It also tends to validate a certain prophet so many of you *hate*...
481086 - I had high hopes, but unfortunately your link goes to one of those articles where only paid subscribers can read the opinions of the contributors.

"We hope you have enjoyed your complimentary access. . ."

Actually got to read a little bit of the article before getting kicked out.
You know, the Nickel Metal Hydride battery was a great breakthrough for EV use in automotive. It could have easily powered cars for a range of 100 - 150 miles, nearly twice the range of the Nissan Leaf. We could have been using that to put EVs on the road for the last eleven years.

However, unfortunately, Texaco (Chevron) saw the great potential and purchased the Nickel Metal Hydride patent from GM Ovonics, and essentially killed it off. This is one of those conspiracy FACTS. Don't fret, you're in good company. I'm actually amazed that the oil industry has allowed the EV movement to progress this far. Let's see what else they have up their sleeve.

Some interesting reading.
481086 profile picture
dang, apologies to you dave and to all. I appear to be still within their 30 day free window so I didn't have a problem. It's basically throwing a bit of cold water on the idea that a lot of cost-reductions are still in Li-ion's future. Goes on to say that it will really need to be Li-sulfur or Li-air to carry the day for EVs..
Update to my subsidy comment above:

I noticed that the list includes the same foreign tax credit twice, and that when I added the line items up, the fossil fuel total came to $53 billion, not $72 billion.

There are probably more reliable breakdowns out there.
marketquant profile picture
> There are probably more reliable breakdowns out there.

Here is a link to the IEA / OECD / G-20 publication "Analysis Of The Scope of Energy Subsidies and Suggestions for the G-20 Initiative"


Consumers are subsidized worldwide at $557B often in order "to alleviate energy poverty and promote economic development by enabling access to affordable modern energy services."

"This amount comprises subsidies to fossil fuels used in final consumption and subsidies to fossil-fuel inputs to electric power generation." (p15)

Note that this means the analysis characterizes $100B (of the $557B) as a subsidy to producers of fossil fuels, rather than as a subsidy to consumers, even when the economic mechanism is through subsidized electricity prices to consumers.

Taxes (negative subsidies) on energy, mainly fossil transport fuels,exceed $400B.

Around $100B per year are spent to subsidize alternatives to fossil fuels. (p22)

There is a box on page 20 that estimates the value of tax expenditures to the production of fossil fuels at 0.004% of GDP in the US -- that is 4 thousandths of 1 percent.

So someone might come to the conclusion that there are $557B of consumer subsidies, $100B of alternative energy producer subsidies, and $400B of taxes on fossil fuel producers.

That is hardly the picture presented by some political camps.
John Petersen profile picture
The issue subsidy demagogues refuse to acknowledge is that subsidies as aggregate numbers paint a very different picture from the one that emerges when you look at subsidies per unit of useful energy. Under the honest metric, hydrocarbon subsidies are insignificant and renewable subsidies are beyond exorbitant.
The issue you have ignored is that once you add in the societal health costs in terms of QALYs lost and direct health expenses from severe asthma, MI's, COPD, industrial lung disease and lung cancer that can be directly attributed to mining, processing, transporting and burning fossil fuels for thermal or electric energy then the total cost of fossil fuels to society is beyond exorbitant.
Teddy, a contemporary comedian has a one liner that among others is applicable : 86% percent of quoted statistics are made up. Where is the evidence that most researches agree that fracking is unsafe. Based on what I have read, the EPA had to admit its preliminary report inferences were not correct, the Pennsylvania early shoddy process has been replaced by safe and regularly monitored procedures and the Marcellus field is being exploited safely,
creating many high paying jobs in the Pennsylvania rust belt. As I understand the process, drilling occurs many thousand feet below the water table and any pollution problem has to do with chemicals added to the high pressure water used in the process and/or loss of integrity in the extraction piping. Both of these problems have been largely, if not completely overcome. The picture of the governor of a western state drinking the recycled drilling water was fairly dramatic.
DanoX profile picture
No they haven't greedy humans are just going to do the hydraulic fracturing no matter what, it will suck to be the very greedy person who owns the land, after they do the hydraulic fracturing on your land and it goes tits up and you are left with farm-pasture land with unusable water.

Old Wiz - If it's such a safe process, why don't the oil companies furnish a list of the toxic chemicals used in the fracking process?
viktorobert profile picture
A friend of mine has land that gas companies are trying to Fack on. She allowed a test well to be installed and all her cows got sick and died. And the gas company cannot shut it off now and are telling her she now is forced to open up all her remaining land to fracking. What a mess.
So let´s make a comparision of Tesla and gasoline car on total energy spent. Tesla needs according to your calculation 82.970 kWh to drive 150.000 miles. For similar gasoline car BMW M5 you will need at 20 miles/gallon 7500 gallons of gasoline. Gasoline contains 36,6 kWh/gal http://bit.ly/Zbcl3a that is total 274.500 kWh. That is 3.3 times more energy used to drive M5 instead of Tesla. You did nice calculation, but did not finish it.
Rick Krementz profile picture
Peet, there is no known way to convert gasoline into electricity at 100% efficiency. The most efficient process is about 30% efficient; smaller generators are about 20% efficient.

So, using a residential generator, you need about 14,000 gallons of gasoline to drive your Tesla. If you use a large, high efficiency gasoline generator, you might need only 10,000 gallons. Or 1.3 times more energy driving a Tesla than the M5.

"You did nice calculation, but did not finish it."
Funny, "we're not able to make a mathematical comparison". Oh, unless it supports our position . . .
viktorobert profile picture
Direct from China.


China's new electric cars subsidy to expand
Updated: 2013-02-27 17:19

Print Mail Large Medium Small
China is expected to subsidize electric vehicles sold in 25 model cities, expanding from the current five cities, and adopt a unified national subsidy standard, 21st Century Business Herald reported Wednesday citing China Association of Automobile Manufacturers.
"The new subsidy policy for electric vehicles, still under research, will be issued soon, possibly shortly after the two sessions of NPC and CPPCC," said Ye Shengji, deputy secretary general of China Association of Automobile Manufacturers..
The central government's subsidies for electric cars, introduced in 2010, used to be as much as 60,000 yuan ($9,631), but the policy was terminated in 2012.
Currently, local governments decide the amount of subsidy in their local regions.
481086 profile picture
It looks like china knows that electric cars probably won't go very far without a lot of gov't subsidies...
481086 - "It looks like china knows that electric cars probably won't go very far without a lot of gov't subsidies.."

Ha. That's EXACTLY what folks said 12 years ago about the Prius when our government was offering $2,500 tax credits to folks who purchased that hybrid. What happened? The Hybrid subsidies ended a long, long time ago. Virtually all the auto makers are making Hybrid vehicles. And the Prius is the 3rd best selling car in the world.
Glenn Doty profile picture

The Prius is quite a valuable illustration. The tax subsidy that was paid out to purchasers of the Prius was relatively quickly exhausted, and the sales continued at approximately the same level, even while other hybrid vehicles that had subsidies available were competing with them directly.

The subsidies, in retrospect, were shown to have little-to-no value in terms of market demand. They were just money paid to favored people.

Another useful fact about the Prius is that the price never dropped. The price went through several increases, but never went DOWN. The rapid increase in demand was the result of a tripling of gasoline prices. No government policy could change demand for the car. The market didn't accept it until it became less economically ludicrous.
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