## US National Research Council Report Finds Plug-in Hybrid Costs Likely to Remain High; Fleet Fuel Consumption and Carbon Emissions Benefits Will Be Modest for Decades

##### 15 December 2009
 NRC projections of number of PHEVs in the US light-duty fleet. Click to enlarge.

Costs of light-duty plug-in hybrid electric vehicles (PHEVs) are high—largely due to their lithium-ion batteries—and unlikely to drastically decrease in the near future, according to a new report from the National Research Council (NRC). The Research Council is the principal operating agency of the US National Academy of Sciences and the National Academy of Engineering.

The report considers two PHEV configurations: 10-mile all electric range (PHEV-10) and 40-mile all-electric range (PHEV-40). The PHEV-10, similar to the Prius Plug-In (earlier post) has a larger battery pack than an HEV to allow 10 miles of driving powered by electricity only and a gasoline engine that drives the wheels in parallel with the electric motor when power demand is high or the batteries are discharged.

The other vehicle, the PHEV-40, is similar to the Chevrolet Volt (earlier post). It has a 40-mile electric range, a larger electric motor, and a much larger battery than the PHEV-10. In the PHEV-40, the electric motor provides all the propulsion; the gasoline engine drives a generator that powers the motor and keeps the batteries charged above some minimum level.

The cost to the manufacturer of producing the first generation of the PHEV-10 (2010–2012) is expected to be about $6,300 more than that of the equivalent conventional mid-size car (non-hybrid), including$3,300 for the battery pack. Similarly, the PHEV-40 with a $14,000 battery pack would cost about$18,100 more.

The lithium-ion battery technology used to run these vehicles is the key determinant of their cost and range on electric power. Costs will decline with technology improvements and economies of scale, but Li-ion batteries are already being produced in great numbers for consumer devices and are well along their learning curves, according to the NRC report. The steep early drop in cost often experienced with new technologies is not likely. The cost to manufacture these vehicles is expected to decline by about one-third by 2020 but only slowly thereafter.

It is possible that breakthroughs in battery technology will greatly lower the cost. At this point, however, it is not clear what sorts of breakthroughs might become commercially viable. Furthermore, even if they occur within the next decade, they are unlikely to have much impact before 2030, because it takes many years to get large numbers of vehicles incorporating new technology on the road.

—“Transitions to Alternative Transportation Technologies—Plug-in Hybrid Electric Vehicles”

Penetration rates for the PHEV-10 and the PHEV-40 were compared to a Reference Case that assumes high oil prices and fuel economy standards specified by EISA 2007 (with modest increases after 2020, when those standards level off), as described in the 2008 Hydrogen Report from NRC. The maximum practical scenario is the fastest rate at which the committee concluded that PHEVs could penetrate the market considering various manufacturing and market barriers; it leads to about 40 million PHEVs by 2030 in a fleet of about 300 million vehicles.

However, factors such as high cost, limited availability of places to plug in, and market competition suggest that 13 million is a more realistic number, the report says. Even this more modest estimate assumes that current levels of government support will continue for several decades. Subsidies in the tens to hundreds of billions of dollars over that period will be needed if plug-ins are to achieve rapid penetration of the US automotive market.

Most of the electricity used to power these cars will be supplied from the nation’s power grid. If charged at night when the demand for electricity is lowest, the grid would be able to handle the additional demand for millions of plug-in hybrid electric vehicles, the report says. However, if drivers charge their vehicles at times of high demand, such as when they get home from work, the additional load could be difficult to meet unless new capacity is added.

Smart meters, which bill customers based on time of use, may be necessary in order to encourage nighttime charging. In addition, some homes would require electrical system upgrades to charge their vehicle, which could cost more than $1,000.  Gasoline use for PHEV-10s and PHEV-40s introduced at the Maximum Practical rate and the Efficiency Case from the 2008 Hydrogen Report. Click to enlarge. Relative to hybrid vehicles, plug-in hybrid electric vehicles will have little impact on US oil consumption before 2030, especially if fuel economy for conventional vehicles and hybrids continues to increase past 2020. PHEV-10s save only about 20% of the gasoline an equivalent hybrid vehicle would use, the report says. If 40 million PHEV-10s are operating in 2030, they would save about 0.2 million barrels of oil per day relative to less expensive hybrids, approximately 2% of current US daily light-duty vehicle oil consumption. More substantial savings could be seen by 2050. PHEV-40s, which consume 55% less gasoline than hybrids, could have a greater impact on oil consumption. Plug-in hybrid electric vehicles emit less carbon dioxide than equivalent conventional vehicles, but not less than hybrids after accounting for emissions at generating stations supplying their electrical power, the report says. Beyond 2030, assuming consumer acceptance, plug-in hybrid electric vehicles could account for significant reductions in US carbon dioxide emissions, if electricity generation plants fired by fossil fuels were equipped with carbon capture and storage systems or replaced with renewable energy or nuclear-powered plants. According to the report, a portfolio approach toward reducing US dependence on oil is necessary for long-term success. This should include increasing the fuel efficiency of conventional vehicles and pursuing research, development, and demonstration into alternative strategies, including the use of biofuels, electric vehicles, and hydrogen fuel cell vehicles. This study was sponsored by the US Department of Energy. The National Academy of Sciences, National Academy of Engineering, Institute of Medicine, and National Research Council make up the National Academies. They are private, nonprofit institutions that provide science, technology, and health policy advice under a congressional charter. Resources ### Comments Who killed the electric car. GM or the US NRC? It was a natural death. It was born premature. Quote:"Li-ion batteries are already being produced in great numbers for consumer devices and are well along their learning curves"...but there are over a hundred different Lithium based battery chemistries at this point requiring different materials and production processes, are we really supposed to believe that all of them have exploited all of their scope for economics of scale? Are we really supposed to believe that the 16KWH battery needed for the PHEV-40 variant costs$18000? Would Nissan really lease it's 24KWH battery for $150 per month if it costed them$24000 to produce? Are we really supposed to believe that ICE generated electricity is not more polluting than powerplant generated electricity? What about green energy sources? This rapport only proves once again that getting the desired conclusion (oil is good for you) is a matter of rigging the inputs.

Exactly what oil price did these people use? $75? Lets see the market penetration rate at$200 a barrel.

"Who killed the electric car? "

GM greed for SUVs. Among many other It's no coincidence the EV-1 (including plug in hybrid variants) was killed 2 weeks after GM bought Hummer...

Next question: Who asked to kill the 80 mpg family car PNGV program shortly before production tooling was to begin?

Supercar: The Tanking of an American Dream

The NRC is noted for their neutral cold-eye examination of topics, and this benefits us all as a non-advocate, non-opponent analysis.

$3600 extra for a PHEV-10 sounds like a sound investment to me. GM hinted they might have an EERE-20 option at some point,which would give them more flexibility, though they buried that option when they pushed through rebate legislation requiring a minimum battery pack size. Legislation too favorable to GM Volt? DUH!!!!!!!!!!!!!!!! Its what I have been trying to get you to understand for years now. Lith ion batteries wont improve massively in cost because THEY ALREADY DID. Most of the cost reductions happened before they even entered power tools and lap tops. Lith ion batteries arnt blue ray players they are glorified 8 track tapes with a new and improved tape. For those who think that PHEV and BEV is the magic solution it should calm them down a bit. Those who think that we will switch from ICE to battery like we switched from horses to ICE powered car just miss something: batteries are simply a different animal very hard to tame, on the long term they will probably make it through it will be a long, slow and very incremental process. Like they say, we can't exclude breakthrough that speed up the process though we don't see what it could be at this point, but even though the implementation takes so long that it won't make a difference for the decade to come. Good article wrote by people who know what they are talking about A Prius-III HEV gets about 60 mpg with a 1.3 KwA battery. An EV-14 Phev Prius should get about 130 mpg with a 5.2 KWh battery. What could you get with 2.6 and 3.9 (approx) KwH? If you make the battery sizes modular, even if smaller, you may end up with a very sweet solution in terms of mpg, or in terms of gallons of gasoline / 10,000 miles (or whatever you do in a year). Once you get to 100 mpg, there is very little benefit in going higher - does it really matter if you can do a year's driving on 100 gallons, or 80 ? The main thing is to stop using 500 gallons to drive 10,000 miles per year. We are actually very close to that, if we just build "small battery" PHEVs and focus on gallons / year, rather than Electric miles. This study is a terrible example of linear thinking applied to an exponentially growing new technology, and an soon-to-be exponentially declining petroleum industry. Just a few of the bad assumptions: -Oil prices will remain flat as global production drops and population swells. -Battery technology will only get incrementally better as millions of packs are produced around the world. -Worst-case assumptions of battery cost. -Carbon regulation won't significantly impact the market. -Ultracapacitor supplementation won't have any impact on price-performance. -ICE cars' public perception won't dramatically worsen as the climate warms. -Government will take no further action to support electric vehicles. -Electric cars' performance advantages won't substantially improve their competitive market position vs. old-fashioned oil-burners. Bottom line, this is yet another one of those examples of institutional inertia short-sightedly justifying the automotive industry status quo. Heck, they are even still recommending "fool" cells. Just stupid. Future cost of mass produced standardized lithium batteries, made in China, South Africa, Brazil, India, Indonesia, etc may be grossly exagerated. Increasing HEVs batteries from 1.3 Kwh to 5.3 Kw to make it a limited e-range PHEV will not cost much more than$2k in about 2 to 3 years.

Most of the extra $2k could be recovered with a much smaller, ultra light (15 to 25 kw) genset instead of the current 1.8L to 2.4L, 4 cyls units. Another cost reduction approach would be the use of standardized mass produced smaller (1 to 4 Kwh) battery plug-in modules, distributed in various places, under the vehicle seats or elsewhere. First generation PHEV buyers would start with minimum number of modules and add more as cost come down and performance increases. An extra module a year, from fuel saved, could be an excellent selling strategy. BYD and other manufacturers will certainly come up with similar configurations soon. I'm disappointed - the NRC seems to be really off the mark. The manufacturer of the Volt's 16KWH battery says that the battery pack only costs$8k , and the cells only cost $350/KWH. See http://energyfaq.blogspot.com/2009/07/volt-battery-costs-part-3.html Here are retail costs of$350/KWH: http://energyfaq.blogspot.com/2009/09/volt-battery-costs-part-5.html

@mahoni:

Financially, diminishing returns kick in seriously at mileage rates much lower than 100mpg. Once you get to 45-50 mpg, the average consumer of gasoline is not going to see much ongoing pocketbook benefit by going to 100mpg, while the up-front costs of doing so are large. The cost-benefit sweet spot can be filled with enhanced ICE technology (downsizing, turbo, direct injection, idle-stop, etc). Large scale adoption of EVs, PHEV, EREV, etc. will depend on incentives that make such vehicles cost-competitive with less-expensive 45mpg ICE vehicles. There are only so many people with both the means and the motivation to spend more than they need for wheels.

And slightly off topic: we suddenly seem to be swimming in natural gas, so why aren't we looking to this clean-burning, domestic resource as a transportation fuel?

Click on the link provided for the report, and look at the authors: the first author is the Committee on Assessment of Resource Needs for Fuel Cell and Hydrogen Technologies!

Why should we be surprised that they are pessimistic about electric vehicles, and recommend more research into fuel cells??

Baloney. Aand its assumptions are already outdated. GIGO.

According to ecomii.com, around half of an EV’s manufacturing cost comes from its lithium ion battery. Mass adoption of EVs depends largely on improving the competitiveness of their batteries. But lithium is also used in batteries for other electrical technologies including laptop computers, digital cameras and cell phones. As demand rises faster than supply, price increases. Unfortunately the supply of lithium is limited by both geological and political factors.

While Lithium is a naturally occurring element, it is a finite natural resource: only so much of it exists in the world. And here’s the crunch point for many environmentalists - half of the world’s known Lithium supply is located in Bolivia, in a nature reserve.

The world will go from peak oil to peak lithium overnight.

It's easy to think that large organizations are monolithic. If we've seen good work from an organization, we assume it's other work will be reliable.

Unfortunately, large organizations are built up of many individuals and departments, with varying levels of competence and integrity, and different interests and biases. We have to review each new product with fresh eyes.

In this case, the reports flunks.

If we bought 4 million PHEVs every year for the next 10 years, we would reduce oil imports 10%, but more people and more miles would increase it 10%, so we would have no increase in imported oil from today. We are NOT likely to have 40 million PHEVs on the road in 2020.

If they want to reduce carbon, replace most of the 600 coal fired power plants with natural gas combined cycle and make the methane from biomass, that will actually make a difference. Which may be why Exxon bought XTO. The business channels are saying that coal is out and natural gas is in for power generation.

"However, factors such as high cost, limited availability of places to plug in, and market competition suggest that 13 million [ by 2030] is a more realistic number"

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Oh please ..... there are only 13 million people in the US with access to a wall plug where they park their car? Right there, this report has lost its credibility.

In case the authors didn't notice, Nissan is offering the Leaf BEV for sale next year with 100 mile range, with an overall cost of ownership of LESS than an equivalent ICE car.

And lithium batteries aren't our only options. There are also these things called Nickel Metal Hydride batteries, that Chevron kept off the market for 5 years via patent manipulation. And they are CHEAPER than Li ion and Nickel is in no short supply. Their only drawback is increased weight but this is of minor importance for PHEV's with relatively small battery pack sizes.

Get with the 2010's, NRC.

By the way, the new Mercedes SLS-AMG (BEV) super car will have a least three separate battery modules distributed in various places in this 4100 lbs sporty car.

If it can be done with 3 modules it could also be done with 6 to 8 smaller. standardized mass produced units.

This approach is very interesting to give added flexibility-options for future BEV/PHEV buyers.

That's an interesting idea Harvey. The consumer could decide how much range they want and simply buy more modules and insert them. You buy 10 km range for $xxxx and put in in your car. Mark - A worldwide secondary market for standardized battery modules would quickly develop, taking cost further down. There are no reasons why WalMart (and equivalent) lower cost stores could not sell those add-on modules. Standardization is the key to modular battery success. Plug-in Hybrids Will Make a Big Impact The referenced National Research Council study on PHEVs is based on numerous omissions and false assumptions: New technologies are rapidly developing for alternative vehicles. Realistically, why bother analyzing EV-10. We already have EV-40 and above. And since the average person drives 25 miles or less per day, with a PHEV or an EV, a much higher percentage of their driving will be all electric. The study way underestimates this, just as it way underestimates what petroleum based fuels will cost 10-20-30 years down the road. My view is – The very first plug-in hybrid that rolls off the show room floor will have an impact. Every PHEV will take tons of pollution out of the air every year - mostly out of urban air. And in electric mode most of the time, the power source will shift from 60% imported oil and 40% domestic oil – totally to domestic fuel, such as coal, natural gas, biogas, biomass, wind, solar, and alternatives. 20-30 years from now, or less, we are going to have biofuels, algae, cheap solar, and numerous other alternatives coming out of our ears. Solar will be integrated into the roofs, walls and windows of buildings and also integrated into the entire bodies of PHEVs and EVs. People are already charging their vehicles with their own solar roof panels. Just 10% of the population doing this will have a huge impact. Even when you buy power from the grid, and operate in electric mode, the fuel cost of a PHEV is 5-6 times cheaper per mile than a same size and weight gasoline powered vehicle. Also, it is much easier to scrub coal or natural gas exhaust at a central location – than to scrub millions of tail pipes. With an electric car in front of you, you are not sucking-up toxic fossil fuel exhaust. What exhaust is produced to make electricity for a PHEV, is outside of urban centers. You are not directly exposed to it. So urban air will become cleaner and cleaner as PHEVs and EVs gradually replace conventional vehicles. This will improve urban health, reduce respiratory disease, and lower health care costs. Chances are, 10-20 years from now, the extended range e-vehicle will have a compact multi-fueled turbocharged engine or turbine, that won’t rely exclusively on imported or domestic oil. It’ll burn bio oil, biodiesel, ethanol, 50-50 ethanol-water, natural gas, propane, butanol, synthetic fuel – you name it. Take the emerging Cyclone Green Revolution Engine, for example. That’ll run on just about anything, even raw algae. GEET may also be perfected, so you may be burning water with all your fuels. Either that or directly splitting the water (mixed with a surfactant such as ethanol) into hydrogen and oxygen onboard your vehicle. That could alternately be mated with a small, 75% efficient fuel cell, just large enough to recharge the batteries. There are numerous other movements that will put PHEVs and EVs on the map: Vehicle-to-Grid (V2G), solar paint, advanced battery chargers (see John Bedini), more efficient electric motors and generators, advanced batteries and ultra-capacitors, lighter weight materials and bonding methods, and many other advancements in the works. The study also makes the false assumption that PHEVs have to be priced the same as conventional vehicles, before they become competitive. There are millions of people who will buy alternative vehicles - And Pay More - in order to serve the clean air cause. Then there are many others who will want to use domestic fuel in their vehicles, in order to displace foreign oil. Then there’s the added benefit of the money you’ll save - by cutting your fuel cost to about 20% of a conventional vehicle. That offsets the higher price of alternative vehicles, until they’re mass produced and further refined. At$18K, the study way over states the cost of a PHEV battery pack. The actual cost of the Volt pack is only $8K, and battery cost is expected to drop. Nissan says in half within 10 years. The defective study put out by the National Research Council is obviously done by unqualified and under-informed government officials - puppetted by a hidden agenda to maintain the cash cow of the status quo. Technology is pushing the envelope a lot faster than the study predicts. This is incredibly biased and flawed. The authors are trying to justify a conclusion they've already reached. How can you possibly try and assert 2020-2050 numbers of vehicles and their economic viability by using 2009 pricing and capacity? Nissan has already stated that they have batteries coming in 2015 providing 200 miles range for the Leaf, at today's prices which doubles the 2010 Leaf's 100 mile range. This is not assuming any further breakthroughs or other miracles, only the mass production of the cathode materials they already have under development and testing. The hydrogen background and associations of the authors are so obvious. Why don't we take a look at 2020 projections of hydrogen fuel cell vehicles...based on 2009 technology as well. As usual, they refuse to simply promote hydrogen and see if it can stand on its own merits, instead they seek to tear down alternatives so that they are the only player left standing. AK - Very well said. Is sombody within NRC trying to slow the transition to electrified vehicles, with what seems to be an extended status quo approach, instead of active promotion? With that type of approach and lip service, the transition may effectively be streched one or two more decades than neccessary. More aggressive pro-active approach with appropriate national programs could make those forecasts whorthless. The article ignores the likely large uptake in Europe of HEVs and PHEVs, even with a$1,000 per kWh battery cost. With gas at $7 per gallon, the premium price of a HEV or PHEVs over an ICE is economically justified. In addition, the following statements are demonstrably wrong: “Plug-in hybrid electric vehicles emit less carbon dioxide than equivalent conventional vehicles, but not less than hybrids after accounting for emissions at generating stations supplying their electrical power …” PHEVs emit marginally more CO2 than HEVs only when 100% of the electricity is produced by old, inefficient, coal-burning, generating plants. On average, coal plants of all vintages supply 50% of the electricity in the US. “… Li-ion batteries are already being produced in great numbers for consumer devices and are well along their learning curves, according to the NRC report.” Batteries for EVs will use newer, more stable and much cheaper chemistries than the chemistry used in laptop and cell phone batteries. For example, they do not use cobalt, an expensive, heavy metal, with environmental issues. As well, EV batteries will use much larger cells for further savings in materials and assembly. The learning curve for these newer chemistries is ahead of them. Furthermore, how can one take seriously a mid-term price of$1,000 per kWh declining to the $650 range by 2020, since a replacement 53 kWh battery pack for a Tesla Roadster reportedly costs about$36,000? The Tesla battery pack consists of 6,831 individual cells using today’s standard cobalt chemistry in a complex packaging arrangement designed to prevent thermal “incidents”.