UC Berkeley Study Concludes Battery Switching Model Would Accelerate Mass-Market Adoption of Electric Cars; Baseline Scenario Projects EVs Reaching 64% of New LDV Sales in 2030
|EV penetration with a battery swap model in three scenarios. Becker (2009). Click to enlarge.|
A new study from the University of California, Berkeley, Center for Entrepreneurship & Technology projects that, given a battery switching model and pay-per-mile contracts such as proposed by Better Place (earlier post), electric cars would account, in the baseline scenario, for 64% of US light-duty vehicle sales by 2030 and comprise 24% of the US light-duty fleet by then.
In two other scenarios considered, a high oil price scenario (using EIA projections) and a battery swap operator-subsidzied scenario, EV new vehicle sales penetration reaches 85% and 86% respectively by 2030.
“Electric Cars in the United States: A New Model with Forecasts to 2030” was written by Thomas Becker, a Ph.D. candidate in economics with a specialization in international finance and environmental economics.
The analysis in the paper relies on a network externality model focusing on relative prices, operating costs, and the network effects of battery switching stations. The high rate of adoption is driven by the low purchase price and operating costs of electric cars with switchable batteries. The estimates include the cost of installing charging and battery switching infrastructure to extend the range of electric vehicles.
In Becker’s analysis, eliminating the need for the consumer to purchase the large battery pack upfront makes the purchase price of an electric car competitive with that of an internal combustion vehicle. Given expected battery prices, and the federal tax incentives for the purchase of electric cars, switchable battery vehicles are expected to be $7,500 less expensive than a similar gasoline-powered car when introduced to the market in 2012. The total cost of ownership of these vehicles is expected to be between $0.10 and $0.13 lower on a per-mile basis than gasoline-powered cars, depending on the future price of oil.
Becker calculates that the baseline scenario would require networks of more than 800 overlapping regional charging infrastructure cells, each supporting 100,000 electric car drivers supporting roughly 81 million electric car drivers by 2030. Estimated capital expenditures to deploy this network would be nearly $321 billion over the next two decades.
Under the operator-subsidized scenario, the resulting 151 million electric car drivers by 2030 would require nearly twice as much infrastructure investment.
By 2030, the annual capital investment in charging infrastructure is estimated to account for between 1% and 1.5% of total US investment.—Becker (2009)
Becker suggests that EV adoption will occur first in the West Coast states and Hawaii, and uses these for the modeled initial market for electric cars between 2012 and 2014. He projects networks of switchable electric cars being deployed across the remainder of the United States beginning in 2014. By 2020, 700,000 (26%) of the 2.7 million electric cars sold in the United States are forecast to be sold in the four West Coast States.
Electric vehicles will overhaul the US light-vehicle transportation network over the next two decades. An electric personal transportation network that combines switchable Lithium-ion batteries with network operators offering pay-per-mile contracts will provide consumers with a more affordable alternative to efficient internal combustion-powered vehicles and will overcome the range limits inherent to fixed-battery electric cars. It will also lower health-impairing and greenhouse gas emissions, provide new sources of domestic employment and investment, lower the nation’s dependence on imported oil, and improve the trade balance.—Becker (2009)
This most recent study is fundamental because it shows that the economics of electric cars with today’s technology favor a paradigm shift in the automotive industry.—Ikhlaq Sidhu, Director of Berkeley’s Center for Entrepreneurship & Technology
Thomas Becker, Electric Vehicles in the United States A New Model with Forecasts to 2030 (CET 2009.1.v.1.0)