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PRTM: Operational Gains Can Help Drive Li-ion Cost Reduction Exceeding 50% by 2020, with Plug-in Vehicle Adoption of 10%

A series of recent reports—one from the National Research Council (NRC) (earlier post) and another from the Boston Consulting Group (earlier post)—concluded that an expected continuing high cost of lithium-ion batteries will dampen mass market adoption of plug-in vehicles.

However, Oliver Hazimeh, Director and head of the global e-Mobility Practice at PRTM, a global management consulting firm, suggests that total lithium-ion battery cost reductions exceeding 50% by 2020 are feasible without technology breakthroughs, primarily through operational gains, assuming EV adoption of approximately 10% of new vehicles sold by 2020 to support volume manufacturing. (PRTM contributed to the Electrification Roadmap released last November by the Electrification Coalition. Earlier post.)

Total cost of ownership parity, infrastructure availability and additional government environmental policies will drive plug-in vehicle adoption of more than 10% by 2020, Hazimeh says.

The majority of these battery cost reductions can be achieved through optimizing design and operations across areas including production/manufacturing, supply chain and product development:

  • Production/Manufacturing Process Optimization: As battery production volumes increase, process optimization will drive improvements in production yield rates. Coupled with scale efficiencies that producers will achieve as they supply packs in volumes exceeding 500,000 units per year and cells in volumes exceeding 200 million units per year, PRTM expects that production process optimization alone will yield a 20-25% reduction in battery costs by 2020, Hazimeh says.

  • Supply Chain Design: Another example of operational enhancements expected to yield significant improvement in battery costs is in the extended supply chain. Cell manufacturers, for example, will likely see 10-15% cost reductions through pooling material spends and optimizing the design of their supply chains in phases as volumes increase, according to PRTM.

  • Product Complexity and Design: As more OEMs release an increasing number of electric vehicles into the market, optimization of the design platform will reduce product complexity, which will further reduce battery costs. During this early ramp-up phase, a number of different cell and pack design platforms will emerge due to unique OEM and vehicle requirements. However, Hazimeh says, as de facto standards emerge, battery producers will optimize their design platforms, which will drive additional production and supply chain benefits with the potential of additional cost reductions of up to 10%.

    On the product design front, ongoing innovation and improvements in material advancement and battery cell and pack design to increase battery performance and reduce functional cost will yield an additional 10% in cost reduction.

PRTM’s analysis does not factor in additional reductions that could be created by local government manufacturing incentives.

10% of US Drivers Willing to Consider Plug-in Purchase

Separately, a recent survey by Ernst & Young’s Global Automotive Center found that more than 10% of US drivers would consider purchasing a plug-in hybrid or electric vehicle. The report canvassed the views of a thousand American licensed drivers to gauge consumer awareness and interest of plug-in hybrid and electric vehicles in the market.

Based on this sample, this figure would equate to approximately 20 million American drivers who are favorable towards purchasing plug-in hybrid and electric vehicles. The survey is part of Ernst & Young’s advanced vehicle powertrain initiative, which focuses on the business opportunities and issues companies face in the development of alternative transportation solutions.

Mike Hanley, Ernst & Young LLP, Global Automotive Leader, commented that although only 10% of the drivers responded positively to purchasing plug-in hybrid or electric vehicles, for a powertrain technology which is not yet widely available, it is a significant number which should not be ignored.

As the survey suggests, electric vehicles have an opportunity to make a significant entrance into the US public consciousness over the next few years. Even if only a small portion of the 10% of survey respondents who said they would consider a plug-in hybrid or electric vehicle when introduced are serious, there would still be more than enough demand to sell out the 2010 and 2011 production runs of the major and new manufacturers, while buying crucial time to build out infrastructure and increase public awareness.

—Mike Hanley

Some of the biggest challenges highlighted in the survey for advancing the popularity of new powertrain technologies from the niche into the mainstream are access to charging stations, battery driving range and vehicle costs.

While there are clear barriers to consumers fully embracing these technologies, 34% of survey participants said they would subsidize local charging stations, further illustrating that a significant number of drivers recognize the future benefits of plug-in hybrid and electric vehicles. Other key findings of the survey included:

  • Public awareness of emerging powertrain technologies remains weak across the US.

  • Not many consumers are willing to embrace the new technology prior to it being well-established in the market.

  • No other plug-in hybrid and electric vehicle incentive or benefit is considered nearly as important as saving money on fuel.

  • Among several considerations, access to charging stations, battery driving range and vehicle cost are by far the three most significant consumer concerns.

Comments

mds

@Treehugger and ToppaTom,
You're both wrong. EVs will find an easy market in Hawaii, the Caribbean, in Isreal, and as second car for wealthy environmentalists. EREVs will supply 3 figure mpg performance while ICE vehicles struggle to break 70 mpg. They will be cheaper to manufacture in volume because they're mechanically simpler and they'll be easier to maintain. No contest. EREVs will find acceptance twice as quickly as the Prius did. All of your cost complaints about the Prius were debated 10 years ago and are now proven wrong ...and the Prius is more complicated instead of being simpler. Tough to have two motors driving the car at the same time.
78% of USA drivers travel less than 40 miles per day. That's the important thing to consider. It means the Volt is an EV for most of us, most of the time, without the need for any charging stations and it's a Series Hybrid after that. An EV without the range anxiety. The market and innovations can only grow from there. Guarantees? Yes, EREVs beat ICEs if you start with zero manufacturing infrastructure right now. The change over has begun. BEVs? Some yes, because of areas of even lower travel mentioned already. More EVs will depend on further improvements to battery technology.

Arne

Treehugger,

low maintenance (except recharging the battery every day)

Charging the battery is not maintenance. And the fact that you can do that at home, without having to go to a gas pump is another big advantage.

The range is a problem not only because it is limited but more because you never know when you will get stuck. Like in cold days for examples the range you are used to will be cut by 30% then you will be stuck where the day before you were ok and that will be difficult to handle in my view

Complete bollocks, excusez le mot. Others have already commented on this, but I would like to add that you seem to think like the battery will suddenly die on you without warning. An EV that does that will ever see the light of day!

Manufacturers will go to great length to accurately report the charge level and remaining range to the driver. Range anxiety is caused by the uncertainty of not knowing how far you can go. If you properly manage the expectations, drivers will only suffer range disadvantage, but never a range anxiety.

The technologies are there already: battery management and a navigation system with the locations of fast charging stations.

sure you can argue that even with all these limitations there is still a demand, but I think it is a niche market.

Completely true, but *all* new technologies start with niche markets. First there is the Tesla roadster, then the Model S, then the Leaf, then.....

The Leaf imo is targeted at the middle class households with two cars already. These will become hybrid households. An ICE cars for the holidays and long trips and an EV for commuting and running errands. This market will be big enough to bring advantages of mass production and lower the price.

1/2hrs station is not practical, first of all no battery can do that yet...

Completely charging to 100% not. But the i-Miev does 80% in half an hour. That's enough for something you shouldn't do on a regular basis anyway. Because if you need fast charging often, you have bought the wrong vehicle.

...2nd if requires 1/2 hrs to refill, then you will never find an available station, because it will be always busy.

Making up non-problems is not going to help anyone.

Why isn't that the case nowadays with gas pumps? Because gas station operators make sure they install a sufficient number to serve their clients. There is money to be made on fast chargers, so simple capitalism will make sure that problem will never arise.

All these projections that the EV will flood the market assume that the ICE powered cars won't progress which is utterly wrong. Renault is putting a small car on the market that get 65MPG and is not range limited.

No, the assumption is based on the fact that the EV will progress a lot. And your assumptions are based on the premise that the EV will not progress, which is utterly wrong. The only thing ICE cars can hope to achieve is *reduce* emissions, but not zero emissions. That's why the improved ICE cars can be nothing more than a stopgap.

All cars are range limited, they have to be refueled somewhere sometime. With an EV it is more often and takes more time. There is no fundamental difference. As long as there are enough charge points, the EV is not range limited.

mds

Correction:
"All of your cost complaints about the Prius were debated 10 years ago and are now proven wrong ...and the Prius is more complicated instead of being simpler."
Should say:
"All of your cost complaints about EREVs were debated 10 years ago about the Prius and are now proven wrong ...and the Prius is more complicated instead of being simpler."

mds

@Anne,
Well argued. I agree market for EVs will be large enough to easily drive further progress. In mean time, drivers requiring longer ranges will be converting to EREVs. Three figure mpg for short daily ranges and superior HEV performance for longer ranges will command this. EREVs will also drive battery improvements. In 20 years ...40 years ...who knows how long ...then no more extender and everything will be EV. Gee even has a ring to it. ;-)

mds

@Treehugger,
"As for Firefly, pfff their announcement has never materialized, and it reflect what is going to happen with battery tech, plenty of speculative claims and promise, but nothing real."
I don't think they've gone away. Maybe they're trying to find their niche, given the stiff competition from Li Ion. What about Axion (Pb-carbon) and Anzode (NiZn) and PowerGenix (NiZn)? They claim 1,500 cycles, 1,200 cycles and 500 cycles respectively. First two are twice the life of NiMH at reduced price. Certainly good for soft HEV use.
You must think you're being realistic. I think you're being pessimistic. Not me. New improved ICEs are DOA. Why should I settle for a small 70 mpg ICE sedan when I can purchase 150 mpg EREV SUV, or a 200 mpg EREV sedan? Of course it's a big market, so the transition will take time.

Treehugger

Bob wallace amnd mds

Your data are pure fantasy, bolivia has 5 millions tons of Lithium reserve with 20kgs/vehicle that's 200 millions vehicle not 5 billions as you wrongly state.

mds I am a minority but it doesn't prove that I am wrong, if it is your attitude in life to follow the Panurge sheeps, good for you. I have done my research, you and bob wallace didn't.

Lithium is very rare in concentrated ores. the base reserve from USGS is 11 millions tons, and USGS is often pointed to have too optimistic estimate. So far USGS is the reference, if you have better source the world would be pretty interested to know them.

Lithium is abundant in very low concentration because of its solubility in water, but the economical recovery is dubious and the production flow can only be extremely small. Extracting lithium from sea water is pure fantasy just good to excite cornucopian like Bob Wallace.

Sure there is more than enough lithium to start an industry of EVs but not to scale it to what the car industry is today

Patrick

20kg of Lithium per car eh?

Hmmm...0.3g per A-hr at a typical cell voltage of 3.7V or 0.3g per 3.7W-hr.
20,000g / 0.3g = 66,667 A-hrs * 3.7V = 246.7 kW-hr battery.

You really do have range anxiety if you want to put 246.7kW-hr batteries in every electric vehicle. With a basic sedan drawing on average 250W-hrs / mile you are looking for a 1000 mile range.

Patrick

"change in your plans (do you always exactly drive what you planned to do?), "

Yes. I haven't driven "willy-nilly" and/or aimlessly since I was in my early 20s. Most people have very repeatable patterns and I rarely have had zero notice when I needed to make a deviation from my plans.

I would not plan to drive 90 miles to a place I've never been to before if I only had a range of 100 miles and didn't know of any places to recharge. There are always better options - the wisdom that comes with experience/age.

mds

Treehugger,
Inadequate response.

I think USGS estimate is pessimistic based on Kieth Evans information. He claims to be a 20 veteran specialist in lithium supply.
" 'single geothermal well in southern California can produce enough lithium to meet all of the world's current demand for lithium.' ”
“ 'There are also lithium-bearing clays called Hectorite and oilfield brines that contain commercially-viable concentrations of lithium' "
Do you think he is a false geologist? What other evidence do you have?

What about this new source that the USGS probably has not considered at all?
" 'geothermal waters at the Salton Sea, about 250 kilometres inland and on top of the active San Andreas fault, are JUST AS LITHIUM-RICH AS THE MOST PRODUCTIVE LAKES IN BOLIVIA AND CHILE' "
Don't you think other sources will be discovered and brought on line, now that lithium is considered economically valuable?

Please answer these questions rationally before you go raving on about how you are right and the rest of us are lame brained sheep. Web links were already given above. Have you even looked at them? Only good point you made was about majority not necessarily being right and I was just trying to get you to consider an alternative view. Only data point you have on lithium supply is USGS and this dates from when? Bush administration? ...and you're sure there was no big oil influence? Why is somebody with a monicker "treehugger" so negative about electric transportation? ...and why so hot about it?

Lithium has been produced as a bi-product of other mining until very recently. Actually, most of it probably still is. Why would the USGS have any idea what the total lithium reserves are? Nobody does. Nobody has been looking for it. As Keith Evans points out, more sources will probably be discovered. We don't need seawater lithium. Additional concentrated geothermal sources will be found. New Hectorite deposits will be found. Hectorite deposits can be mined again. Concerns about lithium scarcity just seem very premature to me. ...and yes, the USGS could be over estimating oil and under estimating lithium. Why not?

mds

From wikipedia link Mr Wallace provided:
"spodumene and petalite being the most commercially viable sources"
I left these out, but we could mine these again.

" 'There are a fairly large number of both lithium mineral and brine deposits but only comparatively a few of them are of actual or potential commercial value. Many are very small, others are too low in grade.' "
This translates: There are many small and lower grade sources that could be exploited if the demand was higher.

"Contrary to the USGS data in the table, other estimates put Chile's reserve base at 7,520,000 metric tons of lithium, and Argentina's at 6,000,000 metric tons."
Two single large sources that are estimated by others to exceed the USGS estimate you gave, 13 million, not 11 million. Maybe the USGS is wrong.

"The total amount of lithium recoverable from global reserves has been estimated at 35 million tonnes"
Closer to 28 million Kieth Evans gives.

The wikipedia entry suggests lithium is similar in abundance to lead and nickel. There is no scarcity of lead and we use less lithium per battery.

wintermane2000

Be sure they are talking about lithium METAL and not salt as it takes 6 kg of salt to make one kg of metal.

Also its 1 gram of lithium per wh on average or so said ep a year ago.

Arne

wintermane2000

You're off by an order of magnitude. It's closer to 0.1 g/Wh.

See: http://www.wrf.com/docs/events/1117.pdf page 7.

Engineer-Poet

I'm using 80 g/kWh (80 mg/Wh).  That's the same as Patrick's figure once you convert from Ah to Wh.

wintermane2000

Ah well in my defense it was over a year ago and im going senile sooner or later.

mds


http://www.evworld.com/article.cfm?storyid=1434 “Lithium in Abundance” – April 2008
“He estimates it at 28.4 million tonnes of lithium, which is equivalent to 150 million tonnes of lithium carbonate."

28.4 million Tonnes of lithium
1 Tonne = 1,000 kilograms
28.4 billion kilograms of lithium total

Using 80 grams per kWh for 16kWh battery = 1280 grams = 1.28 kilograms / battery
(The GM Volt uses a 16kWh battery for an all-electric range of 50 miles.)

28.4 billion kilograms / 1.28 kilograms = 22.1875 billion ~ 22 billion EREVs like the GM Volt
This should be more than enough.

Since Evans also calls out 150 million tonnes of lithium carbonate, I think he must be talking about pure lithium, but I have not tried to figure out the difference in weights. I’ll leave that for wintermane2000.
If Evans is talking about lithium salt and you reduce the number by a factor of 6, then you still have:
22.1875 billion / 6 = 3.6979 billion ~ 3.7 billion EREVs. That is still more than enough.
…especially with improvements in NiMH, Pb-carbon, Pb-graphite, Pb coated nanotubules, NiZn, Zn-air, NaS (GE trains & grid), LiS, NiH2, NiNaCl, super-capacitors, fuel cells, and whatever else, over the next decade or two of Lithium Ion battery dominance. I don’t think the improvements in mpg for the traditional ICE are going to cut it. Lithium Ion based EREVs are here now, EVs will be part of the mix, we have enough lithium to do this, and finally the ICE is DOA.

mds

From wikipedia:
“Around the world, there were about 806 million cars and light trucks on the road in 2007”

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