## CMU study explores optimizing PHEV design and allocation to minimize life cycle cost, petroleum consumption, and GHG emissions

##### 06 December 2010
 Optimal three-segment vehicle design and allocation for various scenarios. Source: Shiau et al. Click to enlarge.

Researchers at Carnegie Mellon University (CMU) constructed an optimization model to determine the optimal vehicle design and allocation of conventional, hybrid, and plug-in hybrid vehicles to drivers in order to minimize life cycle cost, petroleum consumption, and GHG emissions.

The study by Dr. Jeremy Michalek and colleagues found that while a fleet with plug-in hybrid electric vehicles (PHEVs) with universal high electric range (i.e., 87 miles all electric) minimizes petroleum consumption, minimum lifecycle greenhouse gas (GHG) emissions are achieved with a mix of low-range (~25 miles) and mid-range (40-50 miles) PHEVs. Minimum life cycle cost is achieved by assigning low-range (~15–25 miles) PHEVs to the ~75% of drivers who travel less than ~50 miles/day and hybrid electric vehicles (HEVs) to drivers who travel further.

The study found that optimal allocation of vehicles to drivers appears to be of second-order importance for net life cycle cost and GHG emissions compared with an overall shift from conventional vehicles (CVs) to HEVs or PHEVs.

Under our base case assumptions, life cycle costs and GHGs of HEVs and PHEVs are comparable, particularly for drivers who charge frequently, and the least-cost solution is sensitive to the discount rate and the price of gasoline, electricity, and batteries. Relative to our base case of $3.30/gal gasoline,$0.11/kW h electricity, $400/kW h Li-ion batteries,$600/kWh NiMH batteries, and 5% discount rate, PHEVs are part of the least-cost solution for gas prices above $2.6/gal, electricity prices below$0.16/kW h, Li-ion battery prices below $590/kW h, or nominal discount rates below 11%. At a 10% discount rate, Li-ion pack cost must fall below$410/kWh for PHEVs to be part of the least-cost solution. Consumers are often observed to use discount rates above 10% in practice, so battery pack costs significantly below $400/ kWh may be needed to drive mass consumer adoption unless gasoline prices rise. —Shiau et al. The study found that life cycle cost and GHG emissions are minimized using high battery swing (above 60%) and replacing batteries as needed, rather than designing underutilized capacity into the vehicle with corresponding production, weight, and cost implications. This operating strategy contrasts with the current practice of restricting swing to values near 50% to improve battery life, the team points out. Allowing optimized swing rather than restricting swing to 50% reduces life cycle cost and GHGs of PHEVs by about 1–2% in our model—small enough that other factors such as logistics, customer satisfaction, regulation, and incentives may play a significant role in determining battery swing in PHEV design. Current incentives for PHEVs, such as those outlined in the ARRA, provide subsidies based on battery size, rather than usable battery capacity, all-electric range, or effective GHG reduction. This encourages more PHEVs with larger battery packs but results in increased social costs and could produce unintended incentives for battery swing selection. PHEV battery subsidies are likely only economically justified as a temporary stimulus if battery and energy costs are expected to quickly reach levels that make PHEVs cost competitive with HEVs over the life cycle. —Shiau et al. Carbon allowance prices offer little leverage for improving cost competitiveness of PHEVs, according to the study. PHEV life cycle costs must fall to within a few percent of HEVs in order to offer a cost-effective approach to GHG reduction. A paper on their work was published in the ASME Journal of Mechanical Design A 2009 CMU study found that when charged frequently (every 20 miles or less), using average US electricity, small capacity (i.e., lower all-electric range) PHEVs are less expensive operationally and release fewer greenhouse gases (GHGs) than hybrid-electric (HEVs) or conventional vehicles. (Earlier post.) For this latest study, the CMU team developed a “benevolent dictator” optimization model integrating vehicle physics simulation, battery degradation data, and US driving data. The model identifies optimal vehicle designs and allocation of vehicles to drivers for minimum net life cycle cost, GHG emissions, and petroleum consumption under a range of scenarios. The study compared conventional and hybrid electric vehicles (HEVs) to PHEVs with equivalent size and performance (similar to a Toyota Prius) under urban driving conditions. The study focused on a split configuration because of its flexibility to operate similarly to a parallel or series drivetrain, and adopted an all-electric control strategy, which disables engine operation in charge-depleting (CD) mode, drawing propulsion energy entirely from the battery until it reaches a target state of charge (SOC). Resources • Ching-Shin Norman Shiau, Nikhil Kaushal, Chris T. Hendrickson, Scott B. Peterson, Jay F. Whitacre, and Jeremy J. Michalek (2010) Optimal Plug-In Hybrid Electric Vehicle Design and Allocation for Minimum Life Cycle Cost, Petroleum Consumption, and Greenhouse Gas Emissions. J. Mech. Des. 132, 091013 doi: 10.1115/1.4002194 ### Comments This confirms what I've believed for some time: the model of the EV/PHEV battery as a "life of the vehicle" item does not match the way consumers expect cars to work. Consumers want a lower up-front cost or monthly payment and then pay by the mile as they drive. Amortizing a large, expensive battery with a 10-year life over a 5-year loan hits people's cash flow too hard. We'd be better off with technologies like Firely Energy's 3D² cells even if they only lasted as long as a set of tires; they would be cheap and have lower total costs without any of the sticker shock exemplified by the Volt. Interesting. So the 16kWh total capacity which GM pushed through for the maximum tax credit (to exactly meet their Volt specs and cut out anyone else) is now having unintended consequences that hurts the EV market. Who'd have thunk it??? LOL I'm not usually a Tea Party type who favors keeping the Gov't out of everything. But this is what happens when we let the Gov't get involved. It's really not so much even the fact that the Gov't did something: It is the fact that it is always some special interest driving Gov't decisions and how it is implemented...In this case GM. What if, instead, they went down the path of encouraging maximum energy usage in batteries rather than total pack size? Then Nissan's strategy to put the batteries in as cheaply as possible and keep it simple (and I suspect to replace them under warranty later if needed when prices drop) would make even more sense and would get more EVs on the road with a cheaper price. Yes, we have been maneuvered or mislead to believe that a throw away society is the best way to go in order to progress, increase demand and keep everybody working and happy. The garbage mountains are getting larger and larger but increased imports have stopped job growth. The majority is less happy than 20 years ago. Many can no longer afford their through away addiction and chronic unemployment seems to be here too stay. The Big 3 used to make vehicles that would barely last much more than 5 years with 2 or 3 tire, battery, muffler and brake changes. Many imported cars, batteries, mufflers and tires lasted twice as long and our manufacturers started to lose market shares and eventually went bankrupt or almost until they changed and made better units. Many of the current improved ICE cars can last 12 to 15+ years with minimum maintenance. Many improved batteries, brakes, exhaust system, and tires last up to 150,000 Km. Future BEVs should do even better. Changing the battery pack should not have to be done more often than changing ICE unless technology breakthroughs be it profitable. For example, changing a 400 Kg low performance pack with a 200 Kg much higher performance until with 2x to 3x e-range could become a good investment. Harvey, I remember those old days well. I hope that EVs would exhibit lower cost across the board with fewer moving parts and no way for car companies to go back to the days of planned obsolence of a transmission after 50,000miles. I had to buy a couple of those myself, sigh. I don't think anyone would throw away a 400kg battery and that it could only be serviced by someone who could replace it with a newer, better, 200kg battery and they would be set up to recycle the old one. Dave...after too many short lived Big-3 products, we switched to Toyota (Camry + Corolla) equipped with superior tires, batteries, brakes, mufflers etc. It seems that the last one refuses to wear out after 11+ years of trouble free driving pleasure. We dropped our CAA membership many years ago because those Toyotas never let us down, not even a single time. My wife Corolla is one years older and still gives trouble free services. Those made in Japan cars don't even have a single spot of rust and the paint looks new. "Consumers are often observed to use discount rates above 10% in practice, so battery pack costs significantly below$400/ kWh may be needed to drive mass consumer adoption unless gasoline prices rise."
I disagree. I think there is an over-focus by most on the cost of the battery. What about the rest of the car? EVs and Series-PHEVs will be much cheaper to build than ICEVs when reasonable economies of scale are reached.
This is still my favorite EV/PHEV link:
http://online.wsj.com/article/SB123172034731572313.html “Technology Levels Playing Field in Race to Market Electric Car” - January 2009
“Mr. Wang, the 42-year-old Chinese entrepreneur, compares the simplicity of building electric cars to the simplicity of a digital watch. ‘Anyone can design and produce digital watches, but it's virtually impossible for a newcomer to match the precision of a Swiss wristwatch,’ Mr. Wang says.”
“Indeed, BYD's all-electric e6, has just two motors (45 parts each), one powering the front axle and the other the rear, and two gearboxes (60 parts each) to go with each of the motors. That means the whole system has 210 primary parts, excluding nuts and bolts. In comparison, BYD's F6, a gasoline-fueled vehicle, has a total of 1,400 powertrain parts: a V6 engine composed of 840 parts and a transmission with 560 parts.”
BYD may have bailed on the F3DM and may be bailing on the F3e now, but that is because their market will not support the initial high price of a new-tech vehicle. The point made in this Wall Street Journal post still stands: A vehicle with 210 parts is going to be much cheaper to build than one with 1,400 parts at similar production levels, even if the battery is expensive. ...and I'm hard pressed to believe battery prices will not drop well below $400/kWh by 2020. EV and Series-PHEVs are much simpler mechanically than ICEVs. They will be cheaper to build in the relatively near future, even with current battery technology that will support prices <$500/kWh. The battery is not the only difference and those other differences are going to win the game.

E-P,
Normally I agree with you, but I have to disagree with both your points:
1. 210 parts will be cheaper than 1,400 in spite of the battery, as stated above.
2. To my knowledge Fire Fly never published deep-cycle-life numbers. I’m guessing they ran into a problem there. The ability to deep-cycle is critical for an EV or PHEV battery.
Please correct me if I'm wrong.

“Wall Street Journal confirms our Case for Electric Cars: A Lower Barrier to Manufacturing”

Yep, that first link is still good.

You're right that Firefly didn't publish numbers, but that is because they were a technology-licensing company, not a battery manufacturer. Figures such as energy density, power density and cycle life depend on details such as electrolyte load and electrode design, especially 3D vs. 3D².

I do wish that they had published test results of some sample designs. That may have generated the interest they needed to take off in the market.

I'm quite sure that the powertrains of EVs are likely to be simpler and more reliable than ICEVs (aside from issues like aging of capacitors), but the balance of vehicle isn't going to be significantly different so I don't expect great savings.

Good discussion. Would one of you guys mind explaining the term "discount rate"??
Thx- GSB

George,
I think the way they're using dicount rate here is to factor in the cost of the battery pack either as part of the car and how it is then financed or under a lease arrangement.
Either way, someone is abosorbing the cost of the batteries up front and how much that actually costs depends on the interest rate they get to finance it.

Just a fancy way of saying the total cost of the battery, including financing costs, I guess :-)

Thx DaveD. Interesting that it's called a discount rate. Kind of like when I take a credit card and then have to pay the bank it's discount rate. Doesn't seem much like a discount does it.

The comparison of EVs to making digital watches is a good one. If you play in their field by their rules, expertise gained over many years wins. But if you change the game, it is a whole new field of opportunities.

Bottom Line: Russia, China, India, Japan, Canada, and US all have declined to renew the Kyoto AGW agreement. Largely because there is little science to justify the hand wringing over GHG. The world knows it. And its nations are voting to dismiss it.

Which makes this report of little or no importance since it seeks to define EV lifecycle by GHG emissions. Nobody who has graduated high school needs a study to understand that an EV powered from the average mix of energy sources today lowers toxic emissions.

As for those worried about the success of first gen EVs - according to their manufacturers both the Leaf and Volt have sold out their entire first production runs.

The main reason why Canada will not approve the Kyoto Treaty is called ALBERTA TAR SANDS. The current Fed Government base is in Alberta with 100% of the seats there.

Reel states that "there is little science to justify the hand wringing over GHG. The world knows it. And its nations are voting to dismiss it." This is very inaccurate. Compare the statements of a recent U.S. National Academy of Sciences report: "The scientific understanding of climate change is now sufficiently clear to begin taking steps to prepare for climate change and to slow it. Human actions over the next few decades will have a major influence on the magnitude and rate of future warming. Large, disruptive changes are much more likely if greenhouse gases are allowed to continue building up in the atmosphere at their present rate. However, reducing greenhouse gas emissions will require strong national and international commitments, technological innovation, and human willpower." See http://americasclimatechoices.org/climate_change_2008_final.pdf