Despite a wide range of subsidies and incentives, battery electric vehicles (BEV) make up only 1.4% of new car sales in the U.S. That the effective battery cost is zero to the consumer doesn’t seem to be lifting that number any higher. Meanwhile, in Norway the percentage is a much more impressive 42%, but those subsidies and incentives are far higher: the effective battery cost is negative 385 $/kWh for a typical 60kWh battery pack, i.e. a very generous gift. Schalk Cloete carefully runs through the calculations for both countries and all those incentives, covering tax credits, taxes and fees avoided (fuel, VAT, sales, tolls, parking), and more. Some things are hard to put a number on and are not included in his estimates, like EU laws forcing firms to sell more BEVs, achieved by keeping sale prices artificially low (better than paying the fines). Whatever it’s worth it would make the incentive total even higher. The message is that rapidly rising EV sales only come when Norway-like policies are in place. Otherwise, EV dominance is not happening any time soon, says Cloete. If EVs are necessary for our future, we need to be clear on how much it will cost us.
Highlights
- We look at battery electric vehicle (BEV) sales and incentive data from the US and Norway for 2019.
- The value of incentives is subtracted from actual battery costs (170 $/kWh) to calculate the effective battery cost experienced by consumers.
- In the US, market share is 1.4% with an effective battery cost of essentially zero (consumers get batteries for free).
- Norway achieved a very impressive 42% market share, but this was made possible by effective battery costs of negative 385 $/kWh (huge incentives for driving electric).
- This data suggests that continued electric car growth will need perpetual subsidies.
Introduction
There are many smart folks out there who think the internal combustion engine will soon go the way of the prehistoric organisms that power it (e.g. FT, Forbes, Economist). In addition, several countries have put in place plans to ban cars with engines in the medium-term future.
Possibly the best example of the love for electric drive is the valuation of Tesla that is currently almost twice that of GM and Ford combined. This despite 10 consecutive years of losses and selling 15x fewer cars than GM and Ford.
I’ve been an electric car sceptic ever since the BEV hype cycle really got going about five years ago. BEVs will certainly grow to take a sizable chunk of the car market. But I really struggle to see the demise of the internal combustion engine any time soon.
Today’s article further underscores this sceptical viewpoint using real world data from the US and Norway.
The case of the US
Sales overview
In the US, Tesla is the only BEV game in town. In the chart below, Tesla sales account for almost the entire gap between the red and blue lines.
It also illustrates how the BEV incentive push has subsidised many luxury vehicles into the hands of the rich. This is to be expected because BEVs are best suited to the luxury/performance segment where the cost of a large battery pack is moderate relative to the price of the whole car, and the quiet performance of electric drive is highly valued.
Dots are monthly data and lines are 12-month moving averages.
The Model 3 sold very well since the second half of 2018, but its sales growth quickly flattened out as subsidies declined and pent-up demand was satisfied, even as more affordable model versions were gradually introduced.
It is also informative to look at Tesla’s progress against luxury rivals. As shown below, Tesla is yet to have a material effect on the German fossil-powered competition. The next couple of years will be very interesting as Tesla adds a more affordable SUV and a pickup to its line-up, while incentives continue to decline.
Incentives
The big feature of 2020 in the US BEV market was the wind-down of the Federal Tax Credit for Tesla and GM. When adjusting for this wind-down, the average Federal Tax Credit per BEV in 2019 was $3,240. But there are still several incentives remaining as outlined below.
Effective cost per kWh of a 60-kWh battery pack in the US after incentives are deducted.
State rebates vary considerably, but most BEVs are obviously sold in states with good incentives. Most vehicles are sold in California, so we used a $2,500 credit based on a standard $2,000 state rebate rising to $4,500 for low- or middle-income families. Regulatory credits are estimated from Tesla’s financial statements by dividing disclosed credit sales by US sales, yielding $3,100 per vehicle.
The fact that BEVs do not pay fuel taxes (about $0.5/gal) is another important incentive. For the rather woeful average US fuel economy of 25 MPG with 15,000 miles per year, this amounts to $300 per year. However, we also include the externalised cost of CO2 emissions at $50/ton both for gasoline and electric cars, reducing this value to $114/year. To calculate the net present value of $921, a lifetime of 10 years with a 5% discount rate was assumed.
BEVs also get access to other incentives like unlimited access to HOV lanes and some free charging, but these are relatively small and too hard to quantify accurately.
In summary, the US market demands 1.4% BEVs if effective battery costs are essentially zero. There are good reasons to believe that this will increase in the future as more SUVs are brought to market and charging infrastructure continues to improve, but BEV dominance looks highly unlikely.
The case of Norway
After years of very large incentives, BEVs are now a mainstay in Norway. As shown below, BEVs capture over 40% of the new car market, although a large chunk of that is subsidising wealthy people to buy Teslas, Audis and Jaguars.
Dots are monthly data and lines are 12-month moving averages.
The luxury BEV breakdown for Norway over the past two years is shown below. Up until the end of 2018, Tesla’s Models S and X were the only players in the market. Then competition arrived, largely in the form of Tesla’s own Model 3, but also from the Jaguar I-PACE and the Audi e-tron.
Since then, Model S/X sales have dwindled into insignificance. The Model 3 had a very impressive ramp as years of pent-up demand was met, but sales have recently been in a steep decline. The Model Y only comes to Norway next year, by which time we can expect another similar ramp.
Dots are monthly sales numbers and lines are 3-month moving averages.
Incentives
As shown below, the enormity of Norwegian electric car incentives makes purchase of a BEV a total no-brainer for any new car buyer who can adopt the electric car lifestyle.
Effective cost per kWh of a 60 kWh battery pack in Norway after incentives are deducted.
The first incentive is the VAT exemption for BEVs in Norway. This exemption, equal to 25% of the vehicle purchase price, is valid until at least the end of next year. It was calculated on a relatively low before-VAT car price of $30,000.
Next, Norway imposes a large additional purchase tax on cars based on weight and CO2 emissions from which BEVs are also exempt. This tax was calculated for a 100 kg lighter version of the electric Hyundai Kona (assuming future battery improvements) using this calculator, yielding $10,470.
BEVs also save big on tolls and parking fees, although fairly small fees are gradually being phased in by various municipalities. Toll savings are large, but very hard to estimate. This Norwegian article gives some examples of annual toll expenses in Oslo, showing that electric cars can save their owners well over 10,000 kr per year. We took 8,000 kr in this calculation. According to this article, a BEV can also save about 3,000 kr in parking fees. Then there is also an annual insurance-related charge of 2,910 kr from which BEVs are exempt.
Furthermore, BEVs can drive in bus lanes, which can save drivers lots of time in rush hour. If we assume 15 minutes saving per workday and a value of time of $10/hour (about half the Norwegian minimum wage), this amounts to $500/year.
Adding the previously mentioned incentives amounts to $2,081 per year using the average 2019 exchange rate. Since these incentives are slowly being phased out, a 20% discount rate is used to determine the net present value over a 10-year lifetime, yielding a total incentive of €9,125.
Finally, BEVs also save on the huge Norwegian gasoline and diesel taxes. All taxes together amount to 8.8 kr/l ($3.78/gal). A $50/ton CO2 tax is subtracted from this incentive, assuming that Norwegian electricity is 100% clean (when in fact Norway has sold much of its clean power credentials, making its power 58% fossil after some complicated accounting). This brings the tax saving down to $3.28/gal. When assuming an average efficiency of 40 MPG and 15,000 km of driving per year over a 10-year lifetime, the net present value of this incentive is $6,185 (using a 5% discount rate).
Another potentially very important BEV incentive in Europe is the strict CO2 emissions standards being enforced. This forces manufacturers to sell more BEVs, which are erroneously counted as having no CO2 emissions. It is doubtful that manufacturers are selling these BEVs profitably, but even selling at a loss is more economical than paying the fines associated with not making your quota. This incentive is likely quite large, but too hard to quantify for inclusion in this analysis.
The emerging trend
After four years of doing this exercise, the following trend is emerging. It looks at least somewhat consistent, but we will need to wait a few more years for further subsidy wind-downs and more BEV models before drawing any firm conclusions.
However, one thing appears to be clear: for broad consumer adoption, the effective battery pack cost must be far below that which is physically achievable, implying that BEV growth will require perpetual policy support.
Internal combustion engine drivetrains continue to improve, especially with respect to hybridisation. To illustrate this, the sales performance of non-subsidised hybrids (HEV) and heavily subsidised BEVs in Europe over the past three years is shown below.
Hence, as more data becomes available, the great BEV revolution that so many pundits are predicting is looking increasingly unlikely.
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Schalk Cloete is a Research Scientist at Sintef
Schalk,
given the fast pace at which battery costs are falling, your analysis might be greatly underestimating EVs’ competitiveness in the medium run. This fall will gradually make EVs like Nissan Leaf and Renault Zoe accessible to a broader audience even in the absence of direct subsidies.
Admittedly, there are additional barriers to EV adoption which you do not take into consideration in your article (e.g. the presence of a charging point network, range etc.). These however, probably fall under the category of “hard to quantify” variables… let’s see.
This is exactly the point of this article. Thanks to incentives, BEVs are already cheaper than they can ever be in an open market (effective battery costs at zero or below). And still consumer adoption is limited.
I agree that more models with larger batteries, more SUVs and better charging infrastructure will help and that BEVs will grow, but the transition will probably be significantly slower than most expect. Perpetual subsidies can accelerate matters, but this will become unaffordable at some point.
“BEVs are already cheaper than they can ever be in an open market (effective battery costs at zero or below).”
I really doubt that. What you’re overlooking, I believe, is that Tesla’s sales have been capacity limited. They’re selling all the cars they have the capacity to build, and their margins are good. Sales price is well above production cost. Investors know that, and it’s the reason for the “unreasonably high” stock valuations. Tesla, as a company, has only recently been reporting a quarterly profit, but that’s because they’ve been consistently plowing so much revenue into expansion.
Tesla’s production lines are also becoming more efficient, both for car bodies and for batteries. The consensus among insiders is that the Model 3 could soon be a $25,000 car, without subsidies. It actually makes sense, because when you start comparing parts lists, BEVs are a lot simpler than ICEVs.
Exactly right. VW says the ID3 is 40% cheaper than an E Golf. As Tesla has demonstrated there are still improvements to be had in efficiency and combined with simpler bodies there is a virtuous circle, lighter bodies mean more range means smaller batteries for given range, means lighter structure means lower cost. The point where EVs are 10-15% more expensive up front and 20-30% cheaper over seven years is much closer than most observers think. Once people experience driving an EV and get used to finding that plugging in is just as easy as putting money in a parking meter then no-one will prefer an ICE vehicle
I don’t know how much room there can be to make the structure of the car lighter. This is something that can be easily and accurately simulated using structural mechanics and should be very close to optimized already in early models.
Another challenge is that cars are becoming larger. Since Covid-19 has pulled forward the great telecommuting transition, small BEV commuter cars (the BEV sweet spot) will lose relevance faster than I expected. The future of cars lies in large and versatile family haulers and freedom-maximizing long-distance cruisers, both of which favor hybrid drivetrains.
All the alternatives to oil coming up will also keep oil prices very low at the point where filling with gasoline is just as cheap as home charging and much cheaper than fast charging. I believe that the combination of maintenance and insurance costs will remain similar between BEVs and hybrids. And, as the data in this post shows, conventional cars will continue enjoying a sizable “freedom premium.” From all these points, I really struggle to see the massive EV disruption so many are predicting.
Time will tell…
It’s very hard to predict what the long term social and economic consequences of the COVID pandemic will be. In the U.S., I believe we’re already seeing some serious unexpected consequences.
I’m thinking of the unrest nominally flowing from the “George Floyd death protests.” Floyd’s casually brutal public murder by a racist policeman was certainly horrific. But I don’t believe the spreading firestorm of looting and vandalism could have happened, had the sense of a “normal social order” not already been so severely disrupted by the COVID pandemic. Of course, that disruption has been “aided and abetted” by the utter incompetence of a corrupt administration headed by a pompous reality TV star.
That’s my long-winded way of agreeing with your conclusion, that “Time will tell…”
That said, the topic here is prospects for BEV’s vs. ICEV’s. You rightfully mention issues of an evolving vehicle marketplace. Such evolution, to the extent that it will favor one technology over the other, would seem to me to favor BEVs. Certainly, a growing market for very small “personal EVs” (e-bikes, scooters, small cargo trikes) favors battery electric over ICE. That’s likely to become a very large market in Africa and developing nations. As to the other end of the spectrum, you say, “The future of cars lies in large and versatile family haulers and freedom-maximizing long-distance cruisers, both of which favor hybrid drivetrains.”
Perhaps. But a hybrid drivetrain adds cost on top of either a pure BEV or pure ICEV. It arguably adds little value to a larger BEV with a range of 500 to 1000 km. A fast charge time of 15 to 30 minutes for a long range BEV isn’t much of a problem. After 500 km of driving, who isn’t ready for an extended rest break?
What your study overlooks, I believe, are the implications of the emerging “million mile battery” technologies. In addition to the long battery cycling lifetimes and their economic implications, there are associated gains in charge-discharge rates and DC – DC round trip efficiency. There’s a growing trend to install fast-charging stations at locations that lack megawatt-scale grid service by using stationary battery banks as buffers. The buffer storage can be charged at a steady average rate, or even at a variable rate according to overall load on the grid.
Because fast charging is always DC to DC and the batteries being used have high efficiency and low ohmic resistance, the energy cost of the intermediate storage is only a percent or two. That’s more than offset by the savings in being able to use cheap as-available energy for charging.
The same principle of using buffer storage to decouple fast charging from load on the grid applies to homes equipped with PowerWall units, or to apartment complexes or businesses with higher capacity equivalents to PowerWalls. The bottom line is that with emerging high efficiency battery technologies of 3000-plus cycle lifetimes at sub-$100 per kWh cost, there are natural economic incentives in favor of BEVs that should easily offset loss of direct subsidies.
Neither you nor I know better than the manufacturers but if Tesla has improved range according to EPA tests without improving battery size who are you to dispute it. Similarly if Volkswagen claim that the ID3 is 40% cheaper to build than the E-golf it is up to you to prove them wrong.
When charging infrastructure was rare and charging rates were low long range was a priority, now that practical charging rates are almost double what they were a few years ago and charging infrastructure is becoming widespread, a range of more than 500 km even for family holidays is unnecessary and most people would easily get by on long trips with 350 km range, if 200 km range could be added in 10-15 minutes. A Tesla model Y big enough for most family holidays charging at 250 kW adds 220 km in less than 10 minutes today so the trip from Frankfurt to Croatia could be done with two 15 minutes stops and arrive with power to spare. Starting out with even 300 km range would need four 10 minute stops . How many people would sensibly drive that distance without at least two rest breaks.
With battery density gradually increasing the weight penalty will further decline, i.e. increasing range so within five years VW Tiguan style vehicles will be achieving 500 km range with little weight difference to the ICE vehicle.
Add in the need to avoid fuel stations altogether for most of the year, quieter, cleaner, lower maintenance, higher resale value in two or three years you would be crazy not to buy an EV even if you think need to travel to the alps every weekend. In five or six years even the seven seaters and Toyota pickups will be a more rational buy in electric form
I’ve always been confused by the capacity-constrained narrative. Any company that is capacity constrained should almost per definition be highly profitable because they can ask much higher prices for their products. As far as I can tell, Tesla is just adjusting prices to balance supply and demand for maximum profitability like any other company.
A profitable $25000 Model 3 is a very long way away from the current unprofitable $40000 version (Tesla reaches breakeven by higher margins on more expensive trims and models). Aside from battery cost reductions, where does this huge fall come from? The production process is already highly automated and the car cannot really get much simpler.
From what I see online, Musk projected a $25000 Model 3 in 3 years almost 2 years ago. Today, the price is $38000 after a (probably temporary) $2000 Covid-19 price cut, showing that Tesla is also experiencing demand issues.
Don’t confuse net company profits with profits from production. When a company is spending heavily for expansion, it’s still red ink on the balance sheet. When Tesla was bleeding cash and “operating at a loss”, it was (reportedly) still making a tidy profit on every car it was able to produce. As far as I know, Tesla has never had to resort to the kind of extended sub-cost pricing that Toyota was willing to endure in the first few years of the Prius.
Actual production costs for manufactured products are normally closely held proprietary data. But I’ve heard informed guestimates by product engineers that Tesla’s actual costs for a Model 3 with standard battery pack are probably already down close to $25,000. And heading lower as production ramps.
If Tesla can really make the Model 3 for $25000, it would be great. But their financial statements say that their automotive gross margin over the past year is about 19% after regulatory credits are backed out. Margins are certainly higher for higher trims, so the gross margin for the $40000 base model is probably in the order of 10%, implying that it costs about $36000 to produce.
a professor at Norways tech university NTNU has estimated the cost per ton CO2 removed is around 80 000 kroner or 8 000 $ per ton. https://www.tu.no/artikler/elbiler-koster-norge-opptil-80-000-kroner-per-tonn-spart-co2-en-klimakvote-koster-30-kroner/231840
Indeed, my calculations also end up in that region. I live in Norway and find all these heavy luxury EVs subsidized onto Norwegian roads rather depressing.
Another sad statistic is that Norwegian oil consumption has barely budged after years of huge electric car incentives. As an alternative, Denmark has shown how oil consumption can be strongly reduced at much lower costs via safe cycling and attractive public transport.
I enjoyed the insights and analysis. In a regular BEV (not luxury sedans) personal passenger vehicle category (more common in developing country urban markets), given the battery price drop projections for future, how much (%) financial incentive or non-financial ones is required for TCO parity at current retail gasoline/diesel price (and at say a lower price in the future of oil at $20-25 Brent price per barrel)? Any threshold ranges or ball park figures.
Thanks Ashok. You can find a nice graph related to your question in this article I wrote a while back: https://energypost.eu/an-independent-global-energy-forecast-to-2050-part-5-of-5-electric-cars/ (second figure). You’ll see that hybrids are actually cheaper to fuel than electric cars at the oil price levels we’re seeing now. Oil will get more expensive again after Covid-19, but I’m pretty sure it will stay low.
When BEVs have no running cost advantage over ICEs, they make even less sense in an open market, especially against modern hybrids that deliver most of the good driving dynamics and low local emissions benefits of BEVs.
You’ll also see in the third figure in the above-linked article that BEVs are actually substantially less climate friendly than hybrids in big future car markets like India and China where electricity is highly carbon intensive.
So yes, there will need to be a big (and expensive) policy push to get BEVs deployed, especially in developing countries. I think this is rather senseless. However, one type of EV I strongly support though is small electric vehicles (e-bikes, e-motorbikes, e-tuk-tuks, etc.) The enormous incentive for a single Tesla in Norway can incentivise 10-100 small EVs in developing nations, affordably improving social mobility and reducing air pollution. See this old analysis of mine for some quantification: https://energycentral.com/c/ec/future-personal-mobility-visions-part-1-car-free-lifestyles
I will keep this article and see how your predictions turn out Q1 2019 didn’t seem to support your proposition very well in Europe but that may be an anomoly
Sure, let’s wait and see. Europe will be very interesting to watch over coming years. I think the strict emission standard incentive I neglected in this analysis will help BEV sales substantially as they are erroneously awarded zero CO2 emissions. And of course, a straight ban on ICE cars is the strongest BEV incentive out there.
In a way, I’m torn about these incentives. On the one hand, they’re highly economically inefficient (putting poorer Europeans under pressure), but on the other hand, they’re helping to reduce overall car sales (which I see as a very good thing). Of course, there are many more efficient ways to reduce car sales and promote car-free mobility options, but I guess we should take what we can get.
There is the question,
There is no doubt that the early wind and solar subsidies were economically inefficient, as are the current fossil fuel subsidies by the way, but the result is that wind and solar are largely competitive on their own two feet and would be easily competitive if thermal plants paid the true cost of water and pollution, but the current low cost of wind and solar would never have happened without the initial subsidies.
Because of the unwarranted emphasis on range and limited charging infrastructure most EVs now have more battery capacity than they need. Once charging is ubiquitous and charging speeds rise, then 200-220 km range will be more than adequate for most users, so a Polo size vehicle will be satisfactory with a 35 kWh battery.
Once or twice a year that will be an inconvenience and then if Volkswagen is right and the ID 3 costs 40% less to build than the E-Golf then an E-Polo should easily be competitive with an ICE vehicle without subsidies in 3-5 years time.
Re the $8,000 per tonne of CO2 removed I am very sceptical about these calculations as it appears that the energy embedded in batteries is falling rapidly, the life of the batteries is longer than expected and the life of the vehicles is also significantly longer than ICE vehicles. Also many of these studies ignore the cost of exploration, extraction, refinement and distribution of fossil fuels.
Having just had my Citroen Diesel engine rebuilt after 130,000 km, I know which risk I would rather take now new batteries or engine/transmission/exhaust system rebuild on a diesel.
A true costing of the pollution from ICE vehicles would show that CO2 emissions are a minor part of their societal costs, ground level pollution and noise in cities probably has far greater cost than the CO2. Even a large share of “defence” spending is driven by oil wars or the threat of them. No-one is going to war over wind and sunshine
All that being said you are probably right that subsidising battery vehicles to the extent that Norway has is probably too generous. Perhaps it is their way of repaying the world for the damage caused by their oil and gas industry, but as I understand it some of the perks have been whittled back and I would imagine just like solar and wind subsidies around the world EV subsidies will fall quite dramatically over the next 6-8 years.
As to hybrids, why bother? They are more economical but not much, many plugin hybrids are rarely plugged in and because the batteries are so small they cycle more often so have shorter lives and in eight years time you have two systems that can fail on you so long term costs are even higher. Probably what will happen is that the battery will die and the car will just be driven as an overweight, under-powered ICE vehicle.
Finally as to alternate means of transport, CV19 is going to encourage a return to private vehicles. Private vehicles do not just provide transport, they are a mobile store, weather and threat shelter, status symbol and simplify decision making for most travel that is not to and from a CBD. I understand all the economic, planning and environmental reasons for public transport, but they are by no means the only reason people buy private vehicles
I agree that EVs would be quite attractive if the practicality of a 35 kWh battery BEV was valued the same as a regular ICE car. But current data says that this is simply not the case. As you say, people buy cars for all sorts of reasons. In my book, freedom is the largest one. A 35 kWh battery might work just fine for 80-90% of all miles traveled, but it’s those last 10-20% of miles that justify the huge expense of car ownership.
The true production costs of EVs is currently very hard to judge. Tesla really is the only viable reference because other brands probably sell their EVs at a loss, compensated by profits on ICE models. We’re still waiting for Tesla to be profitable even in the present environment where the effective cost of the batteries in its cars is probably around zero, thanks to subsidies. Tesla also has a great brand image within the tech-minded demographic buying its cars, probably allowing for substantial price markups.
The magnitude of Norwegian BEV incentives is such that you can arrive at a CO2 avoidance cost over $1000/ton even when assuming the EV has zero emissions (also from the battery). For noise and ground pollution, EVs don’t offer much gains over hybrids. Because of their added weight, they kick up more fine particulates and make more tire noise (which is the dominant noise source above about 40 km/h). As for oil wars, it’s hard to know how much of the cost is really attributable to oil. And if that is averaged over the roughly 1.5 trillion barrels of oil so far produced to build the global economy, the cost per barrel would be minor.
Hybrids have great reliability. There are reports of old Prius taxis with a million km on the meter. One would think that modern hybrids would last even longer. The ICE is operated mostly in its ideal operating range and the battery is mostly cycled over a small fraction of its range for longer lifetime. Thus, the complementary nature of these two systems increase the lifetime, performance and reliability of both.
For PHEVs, many see the other side of the argument you present: by charging more frequently, PHEVs use their batteries much more efficiently than BEVs (that also need to haul the added weight of huge battery packs back and forth). Thus, one can achieve much more electric mobility with a given amount of limited materials needed for battery manufacture (with their environmentally and socially destructive extraction routes) with PHEVs than BEVs.
I’m really hoping that Covid-19 will promote virtual mobility by making people more aware of the options that are out there and the tremendous savings they bring. I’m sure there will be an extended period over which people avoid public transport, but this will pass. Hopefully, it will be decades before such a scenario happens again and, when it does, it should be handled much better, especially in the West.
EVs are critical for our future. It reduces GHG, NOx and particle emissions. Biofuel can but does not reduce NOx and particle emissions. Palm oil and so me other bio fuels increase global global emissions. While EVs have been extremely subsidized initially, they are now increasingly competitive to IC vehicles.
EVs should also be used as grid storage units against new renewable generation. Short traveled power is far better than long haul power (interconnectors) given line losses and wasted renewable and fossil fueled power. More on rational industry, climate and energy policies here. https://www.linkedin.com/pulse/critical-need-life-cycle-impact-analysis-climate-geir-vollsaeter/
Overall I think many of your counterarguments above have some merit, so we will see how it develops but a couple of cautions
In Australia Hybrid Toyota Camry’s were popular taxis for a while (Model 3 size with more rear passenger room), but battery life was worse than expected. As many cars are owned by employers there is little incentive for PHEV owners to plug in so I suspect battery cycling in PHEVs is very low.
In the long run entropy prevails so the simpler system should win, but hopefully, virtual mobility and localisation of services and manufacturing will significantly reduce the need for travel. which is the best possible solution
“A true costing of the pollution from ICE vehicles would show that CO2 emissions are a minor part of their societal costs, ground level pollution and noise in cities probably has far greater cost than the CO2. ”
Economic Value of U.S. Fossil Fuel Electricity Health Impacts
“The economic value of health impacts is approximately an order of magnitude larger than estimates of the social cost of carbon for fossil fuel electricity. In total, we estimate that the economic value of health impacts from fossil fuel electricity in the United States is $361.7-886.5 billion annually, representing 2.5-6.0% of the national GDP.”
I drive a plug in hybrid. 99% of my trips are on electricity and about 85 to 90% of my total miles are on electricity. My results are consistent with the average experience of those who drive similar vehicles with 15 to 20 kWh batteries.
Thankyou JoeJoe for both the paper and using your PHEV as intended. There are many reports of PHEV charging cables lying unused in the boot (trunk).
Re the paper If distant coal and gas fired plants with relatively low levels of unburnt hydrocarbons cause that much pollution, imagine how much damage an average diesel outside you window does
The paper points out that fossil fuels do not pollute equally:
“For coal, oil, and natural gas, respectively, associated economic values of health impacts are $0.19-$0.45/kWh, $0.08-$0.19/kWh, and $0.01-$0.02/kWh.”
We tend to group fossil fuels into one big equally evil pile. We shouldn’t do this. Per this study coal is at least twice as polluting oil and oil is 5 to 10 time more polluting than gas.
As you note there’s a locational component of pollution. The particulates associated with a diesel outside your window are far more impactful than the particulates from a coal plant in Mississippi.
As you may know Carbon Taxes work great in the electricity market where a price of only 20 to 25 Euro/MT is sufficient to encourage Coal to Gas switching. Unfortunately this same level of taxation does zip to help with ICE to EV switching. For this we should be taxing pollution – not just the magnitude of pollution but the locality. This naturally means inner city vehicles would be taxed more heavily than rural vehicles. Politically it’s the inner city folks who favor these sorts of taxes but it’s also these same folks who benefit the most. Carbon taxes don’t produce this type of alignment.
COVID affects people differently but the reasons are not fully understood. The same can be said about pollution. Does pollution cause pre-term birth? Not exactly but the places with the cleanest air in the US have the lowest pre-term birth rates. Does pollution cause dementia? Again, no, but places with higher pollution have populations with more dementia. How do you price pollution when you’re dealing with a cocktail of emissions, locational considerations etc? I’m not sure but hopefully we’re going to see a pile of research coming out over the next year that aims to quantify the health benefits (car pollution reduction benefits specifically) we’ve experienced during this lock-down.
There’s an interesting way to look at the battery pack size issue. Lithium-ion batteries, if they’re well managed, have a lifetime that can be measured in terms of throughput to capacity — kWh in and out relative to kWh of nominal energy capacity. That’s “sort of” equivalent to a count of full charge – discharge cycles, except that part of “well managed” includes avoiding full charge-discharge cycles. Anyway, the point is that for a given Li-ion technology, a larger battery pack will deliver not just increased vehicle range, but also a longer driving lifetime. An 80 kWh pack is roughly equivalent to two 40 kWh packs used serially. The difference is that with the 80 kWh pack, the 2nd 40 kWh pack is included in the vehicle at the time of manufacture. It saves the cost of major service visit to remove and replace the used up 1st 40 kWh pack. Meanwhile, the owner gets the benefit of the 2x longer driving range.
It’s not actually that straightforward, of course. Carrying the equivalent of a 2nd 40 kWh battery pack around from day one means extra weight. That will somewhat increase the Wh / km for the vehicle, delivering less than 2x the total driving lifetime. It also means more particulate emissions from road wear on tires — something we’ve only lately recognized as a problem. However, so long as the battery pack remains a relatively small fraction of overall vehicle weight, a larger pack can deliver good net value. For the Tesla model 3, the 75 kWh long range pack weighs 1060 pounds, about 28% of the vehicle’s 3814 curb weight. That’s not too bad, but it’s probably approaching the point where diminishing returns from extra battery capacity begin to be significant.
Another way to look at the issue comes up when we consider the implications of the low cost “million mile battery” technology that’s expected to roll out very soon. When that technology moves into production, there’s a case for regarding a long-range BEV not so much as a luxury toy for the well-off, but as an asset of a resilient low carbon energy grid that also works as a car. An asset whose capital cost is voluntarily paid by the car owner. I’m thinking of future “vehicle-to-grid” services (V2G) and support for local microgrids.
V2G services have been talked about for a long time, but have been slow to develop. For good reason. They’ve not been all that practical up to now with available battery technologies. Allowing one’s vehicle batteries to be used by the local utility for distributed storage greatly increases the equivalent cycles per week that the battery will experience. That will shorten its lifespan and likely require replacement a few years into the vehicle’s lifetime. Also, there’s the fear: “What happens if an emergency arises and I need to drive somewhere but can’t, because the utility has drawn down my vehicle’s batteries?”
Even if owners are well compensated for use of their vehicles for distributed energy resources, the risks and complication make V2G services a hard sell. A low cost million-mile battery technology would change that. Under normal driving use, the battery pack would still be going strong when the car body and suspension reached end-of-life. The concern would be finding productive use for the cycling capacity that would otherwise be wasted. Also, if the battery cost were low, the fear factor of depleted batteries could be easily addressed. The batteries could be large enough for profitable V2G service, while always leaving enough charge for emergency driving trips.
“Despite a wide range of subsidies and incentives, battery electric vehicles (BEV) make up only 1.4% of new car sales in the U.S. That the effective battery cost is zero to the consumer doesn’t seem to be lifting that number any higher.”
The average consumer in the US wants a certain range, that is very large batteries, and the effective battery cost of the size desired is most definitely not zero.
Your market share versus subsidies approach is interesting. I would use it a little differently. For example, we could look at the VW Golf in Norway. With present subsidies and 36 kWh we get a share of 94.5%. It would be interesting to see in a number of plots how charging infrastructure (plug and pay, availability, charging speed) and battery size on the one hand, and the ICE price differential required for a particular market share on the other hand behave.
Yes, I agree that the desired range in in the US will need a battery pack somewhat higher than 60 kWh, while in Europe it may be somewhat lower. So the effective cost per kWh should be somewhat higher in the US and somewhat lower in Norway. For example, if we take the desired battery size as 80 kWh in the US, the effective cost comes to $48/kWh. A desired battery size of 50 kWh in Norway lowers the cost to -$495/kWh.
There are indeed many potentially significant factors. It would be useful to do a multi-factor regression, but I don’t know if that kind of data is easily accessible. Yes, e-golf has done very well. It slots right into the EV sweet spot of a city car for the daily commute or trips into town. It’s interesting how Norwegians love it so much. Globally, it falls well behind the i3, Kona, Zoe and Leaf.
https://www.woodmac.com/news/opinion/electric-vehicles-coronavirus-wreaks-havoc-across-the-supply-chain/
In China, EV sales dropped 54% by the end of January, with February projected to be down more than 90%. In Europe, conversely, there was a 121% increase in January – however, the first case of the coronavirus was not reported in the region until late that month. The infection rate is now expected to peak in Europe and North America towards the end of H1 2020, around two months behind China.
The result? We currently project that global EV sales for 2020 will drop 43% year-on-year, from 2.2 million in 2019 down to 1.3 million.
March figures from China suggest that EVs recovered quickly, possibly more quickly than ICE vehicles so it is really too early to tell