Cars
Plug-in Hybrid Cars Zooming Ahead
Automakers are speeding ultra-high-mileage plug-in cars to market to beat looming federal emissions mandates.
By Jim Ostroff, Associate Editor, The Kiplinger Letter
June 26, 2008
Advertisement
Get ready to see the USA in your plug-in Chevrolet -- or your Saturn, Ford, Toyota or Mercedes. High gasoline prices have automakers fast-tracking development of fuel sipping vehicles that will allow most motorists to charge up at night from home, then commute to work and run errands without heeding the gas gauge. Even long trips won't drain wallets, with plug-ins averaging 80 to 100 miles per gallon (mpg), cutting fuel costs about 40%, including the cost of recharging.
General Motors and Toyota will get their souped-up hybrids into showrooms first, within two years, followed by Ford. Virtually every major automaker plus niche manufacturers such as Fisker Automotive and Visionary Vehicles have a plug-in entry in the works.
Within a decade, plug-in cars will account for around 20% of all new U.S. vehicle sales, largely replacing their lower mileage gasoline-electric hybrid forebears. By 2025, that share will be about 30%.
Automakers have little choice but to go electric. They're already being forced to boost fleets' average fuel efficiency to 35 mpg by 2020, a 40% jump. The auto companies also don't want to be caught flat-footed by enactment of carbon dioxide (CO2) emissions restrictions by Congress. Lawmakers are inching toward them and may enact such restrictions as soon as next year. Although carbon caps will be phased in over several years, Detroit carmakers and their foreign cousins fret that their vehicles will have to exceed 35 mpg fuel efficiency in order to slash CO2 tailpipe emissions.
Automakers are under the gun from states, too. California's zero-emissions vehicle program mandates nearly 60,000 plug-in cars be sold in the state between 2012 and 2014. Connecticut, Massachusetts, Maine, Maryland, New Jersey, New Mexico, Oregon, Rhode Island and Vermont have adopted similar requirements, and other states will follow.
Technical breakthroughs will help automakers get plug-ins on the road faster than anticipated even a year ago. "After years of work and false starts, the lithium ion battery is about to move beyond the development stage into commercialization. That will enable vehicles to be recharged at home during the night, or elsewhere during the daytime," says David Cole, chairman of the Center for Automotive Research, an auto industry consulting firm. Early models will be able to travel up to about 40 miles on the battery charge alone. That's not much of a drawback -- more than 80% of motorists drive less than that in a day, Cole says.
Infrastructure is revving up, too, with companies such as Coulomb Technologies set to install curbside and garage recharging posts. Motorists will be able to buy volts with a pre-paid card, says Paul Scott, a cofounder of Plug In America, a lobbying group.
Early buyers may suffer sticker shock, though, with prices of $40,000 or so for a plug-in, including $10,000 for the lithium ion battery. Within a few years, as volume picks up and the cost to make lithium ion cells declines, the price of the battery will slip 25%, and in less than a decade, battery cost should drop below $1000.
Because plug-in vehicles involve a whole lot more than replacing a fuel tank and gasoline-powered engine with a battery and an electric engine, widespread adoption of electric cars should spawn an economic boomlet. In addition to the lithium ion batteries, plug-in vehicles will need whole new systems -- including computer components and software -- to control braking, turning, acceleration and so on, replacing the mechanically linked drive trains, transmissions, steering and braking systems of today's gasoline-powered vehicles. The battery market alone is expected to hit $30 billion by 2020. Best positioned to take advantage: Early electric controls, transmission and advanced timing system leaders BorgWarner, Continental, Johnson Controls and TRW. But start-ups are sure to muscle in on the business.
For weekly updates on topics to improve your business decisionmaking,
click here.
Reader Comments (14)
Posted by: Ken at 06/26/2008 01:37:21 PM
Thanks Jim. Good article. I think it's important for people to understand that even though these plug in vehicles will have a 40 mile range, most WILL have a gas engine back up so people will not be dead in the water after 40 miles. Many people don't seem to understand that. Will the Gov't or states consider tax breaks or some kind of subsidy to help spur the industry while the initial costs are high? I live in PA. Governor Rendell has been trying to push renewable grants and credits through for 18 months now to help jump start the Solar and other renewable industries, but for some reason it's not passing. So the industry is all but dead here unlike FL, CA, and NJ who do have grants to help with costs. I wonder if the electric cars will suffer the same fate because of big oil money pushing back.
Posted by: Nomen at 06/26/2008 07:10:58 PM
Mr. Ostroff, aren't you the writer that criticized my comments supporting plug-in electric cars just a few months ago with the argument that the U.S. power grid could not support them? I also pointed out then that the popularity of E85 ethanol would be short lived. It is already becoming a victim of its own hype. Once again, to you auto companies, where is my little plug-in biodiesel hybrid? I want to get started on my windmill and solar panel home charging station as soon as possible. But no matter watt(pun intended),conservation will have to be at least 90% of the answer to our energy shortfall and the all electric car will have to be the ultimate goal for cutting CO2 emissions.
Posted by: Rich at 06/26/2008 09:19:03 PM
Don't count on the government helping out too much. The more gas powered cars off the roads will eventually mean fewer tax dollars. Eventually, when electrics are the main stream there will be new taxes imposed since they cannot tax us at the pump any more.
Posted by: kent beuchert at 06/26/2008 10:21:52 PM
A few mistakes, as usual. The li ions in the $40,000 Chevy Volt will cost $16,000, not the $10,000 claimed by the article. Nor will Toyota have a plug-in available in showrooms by 2010 - that date is when they will have delivered SOME plug-ins to selected fleet owners, a clear sign that they will still be in debug mode at that date. GM will beat all other plug-in to market by at least 1 year, most by between 2 and 4 years. I dispute the notion that plug-in movement is being advanced because of state regs - those are clearly an unconstitiutional infringement of interstate commerce and recent appeals court rulings have stated unequivicably that states DIO NOT have the power to decide what products a company must produce for their state. The entire notion is absurd.
Posted by: Daniel J Shoop at 06/27/2008 01:25:22 AM
Why not get the government out of the oil business and allow US companies to develop our own oilfields? I'm sick of government telling me what I've got to drive. Let the Euroweenies do that. We're Americans for crying out loud.
Posted by: Rocky at 06/27/2008 10:22:12 AM
I think the auto industry is in a panic trying to figure out how to drag this transition out as long as possible to protect their significant dependence on service revenues. Plug-in electric hybrid simplicity by comparison to internal combustion will require very little maintenance. The fact that Toyota has already crossed the line with the Prius which has proven success and now following with the upgradeable Plug-in with NiMH batteries, has forced the other automakers to be competitive. New Lithium-ion chemistry are not only making them safe but extending their range, recharge rate and most importantly cost. We can expect every automaker to push for the better mouse trap but someone had to force the first move. Too bad it wasn't our government, but then again their motivated to protect tax revenue from oil related business!
Posted by: Rick Boland at 06/27/2008 02:40:34 PM
Jim: Where did you get the market share stats? I have yet to see a vehicle sales forecast for PHEVs. Thanks, Rick Boland
Posted by: Louis Rich at 06/28/2008 07:32:08 AM
If it could happen this fast, there are other economic impacts, such as the value of trade-ins of older cars (who would buy used old gas cars) and providing electricity. There are already dire predictions about upcoming lack of electricity and potential brownouts.
Posted by: Ed at 06/29/2008 08:25:13 AM
ENER1 will probably be a supplier of batteries and was just added to the Russell 3000 index.
Posted by: Ed House at 06/30/2008 03:45:00 PM
What--no mention of GM's EV1. Thanks to Stanford Ovshinky's NiMH batteries the EV1 had a range of 160 miles and that was almost ten years ago. What happened? Chevron bought the patents and the EV1 has been erased from history. See EV1.org for more info.
Posted by: Dan at 06/30/2008 04:11:51 PM
My only concern is that it's not about oil being $140+/barrel, but an overall energy crisis. On the news we hear about scheduled power outages, bla bla bla... Is a plug-in car going to worsen the energy crisis we're getting ourselves into in this country? Can these plug-in cars have solar panels on the roof to take some of the burden off? I believe it's a good move to getting off our dependency of foreign oil, but at the same time we need to encourage our govenment to reward average people for getting themselves off foreign oil one at a time and HUGE tax breaks for allowing every-day consumers to contribute to relief of the shortage by installing solar panels on their houses, etc...
Posted by: Ken at 07/01/2008 01:00:29 PM
Maybe we can thank the Lobbyist in Washington for making sure there are not incentives or tax breaks. They run the country on behalf of their Corporations, and they have the politicians in their pockets. They need to pass incentives and tax breaks to help the industry grow or the game is over. Just like in the 70's. When oil prices drop back down, people will forget about all of this and go on with their daily lives. I hope not.
Posted by: Rocky at 07/01/2008 01:50:58 PM
The expectation is that electric vehicles will recharge during non-peak hours when demand is lowest. Power plants don't shut down they just throttle back to meet demand. This actually helps them become more efficient. A transition will only happen as fast as batteries can be produced, which will probably be a couple of year ramp. These things considered, we still need to migrate away from coal fired plants to alternatives like nuclear. Our public has to be educated that we have technology that has evolved passed Chernobyl and 3-mile island and can now be produced safely and efficently. Try researching "Small Pebble Bed Reactors" and especially look for the proposal by MIT which would move us away from oil dependance!
Posted by: Lee Adam at 04/16/2009 09:50:55 AM
Plug-in Hybrid Cars Zooming Ahead. However today shows they might be on a rocky road as outlined in AP article on 4/16/09. One million plug-ins by 2015, good luck with that