Seeker Blog

Seekerblog has been following developments in the emerging electrical vehicle industry for some two years now. We believe that clean electrical generation (primarily new nuclear power) and grid enabled electric vehicles (GEV) are the only practical way to radically reduce transportation sector carbon emissions.

The Electrification Coalition is a consortium of venture capital, electric utilities, battery manufacturers, automakers and infrastructure builders. The coalition has recently published the Electrification Roadmap: REVOLUTIONIZING TRANSPORTATION AND ACHIEVING ENERGY SECURITY (PDF). The is a remarkable 159 page document - the closest thing we have seen to a textbook covering all the essential topics.

If you have any interest in the future of electric vehicles you will want to dive into the roadmap. If you have not been following EV developments, then the roadmap is a perfect introduction to the future.

Following are a few selected excerpts that touch on some of the concepts we have been discussing in relation to the Better Place business model.

Who should own the battery?

With battery functionality (power and energy) having reached competitive levels, many GEV market participants have started to focus on creative ways to drive down costs for consumers while battery technology continues to advance. A handful of companies have proposed various methodologies for battery financing. That is, instead of buying and owning the full vehicle, a consumer might buy only the vehicle, but finance the battery over time. A traditional leasing model, in which a third party owns the battery and consumers pay monthly rates, is one such option.

An alternative methodology might be for manufacturers to offer consumers a battery buy-back guarantee. In essence, this approach would allow consumers to own vehicles and all their components, but mitigate upfront costs by giving consumers the ability to recoup capital outlay after a defined period. On some level, both the battery leasing model

and a battery buy-back model implicitly assume that the battery will have a second useful life after its use in a grid-enabled vehicle. Options for secondary battery use (such as residential backup power, storage for intermittent renewable electricity supplies, or in secondary vehicle markets) have generated a great deal of interest, but without further testing, it is not clear what the performance of depleted batteries will be. As a result, the residual value of batteries is far from clear. $6,000. When factoring in the lower cost of fuel and other operating expenses over the life of the vehicle, batteries in this price range would offer a substantially better value proposition to consumers than equivalent IC engine vehicles. (USABC has also developed a list of performance and life targets that ensure the batteries will last 15 years and perform as well as conventional IC engine vehicles while minimizing weight.)

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International Support for Electrification

Israel. Israel is an ideal candidate for electrification since it traditionally imports nearly all of its energy and considers energy supply of utmost national security importance. Moreover, the country is relatively small and is essentially an island, as driving through surrounding countries is not possible. High gas prices, currently around $6 per gallon, short driving distances, and a relatively simple north-south highway system make the logistics of electrification with battery-swapping very straightforward.

The government has provided strong policy support to spur the deployment of GEVs and the required supporting infrastructure. The tax rate for a new conventional vehicle is 92 percent in Israel, but the rate for an EV is set at just 10 percent through 2014, rising to 30 percent in 2015.5 The rate for HEVs and PHEVs is 30 percent through 2012, 45 percent in 2013, and 60 percent in 2014. As part of a partnership with Better Place (discussed below), Israel will build 500,000 electric vehicle charging stations and 200 battery swap facilities for a reported $200 million.6 The goal is to deploy 10,000 to 20,000 GEVs per year, starting in 2011.

Denmark. Denmark’s DONG Energy has extensive wind resources, which generate peak electricity at night.8 A relatively small country with ample overnight charging capacity and an environmentally concerned citizenry, Denmark was another attractive candidate for Better Place. The government taxes new vehicles at a 180 percent rate and is making electric vehicles exempt from such taxes as least through 2012.

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State of the Global GEV Industry

Better Place’s announcements in 2008 that it would partner with Nissan-Renault and establish extensive electric vehicle charging networks throughout Israel and Denmark made it seem, for the first time, that vehicles and infrastructure were arriving together. Prior to 2009, there had been noteworthy announcements of electric vehicle infrastructure installations in only eight countries. But in 2009 alone, 22 countries have declared that they are setting up infrastructure and vehicle networks, with multiple announcements coming from many countries in Western Europe, East Asia, and the United States. Buoyed by these regional announcements, global automakers have become increasingly committed to introducing grid-enabled vehicles. Although the industry’s focus is far from centered on electrification, the current era of rapid GEV promises is unprecedented in the automobile age.