It was nearly seven years ago when former GM Vice Chairman Bob Lutz and a couple of journalists, including myself, were having lunch in Arlington and talking about the future of automobiles. While the world press would soon be repeating Lutz’s famed "Global warming is a crock of s%^#" comment from that afternoon at Cacharel, what interested me was his take on the future of batteries for electric cars.
Lutz was discussing the then upcoming Chevrolet Volt, but added that the world was on the verge of a major breakthrough in battery technology, one that potentially could quadruple the range of current lithium-ion power storage. He seemed almost excited about the idea that the second-generation Volt might be able to go hundreds of miles on a single battery charge before the onboard generator kicked in. Lutz knew something about batteries, too; before returning to GM he’d been running Exide, and he firmly believed things were about to get truly interesting.
In the years since that day, the Chevy Volt made its debut. So have the all-electric Nissan Leaf, Mitsubishi iMiev, Honda Fit, Fiat 500, Volkswagen Golf, Kia Soul, Tesla Model S, BMW i3, and numerous other models, all with varying degrees of marketplace success. Not to mention the number of plug in hybrid electrics that have been introduced. The financial commitment so far for all electrics has been steep; Nissan claims its commitment to electric cars will reach $5 billion. As of this writing, it is doubtful that any auto manufacturer has earned one penny on those products.
As for Lutz’s optimism that the next generation of the Chevy Volt might go hundreds of miles just on its battery, that’s not going to happen soon — but it may be closer than anyone thinks.
The news hit at the end of November, when Carlos Ghosn, CEO of Renault-Nissan, revealed on the Tokyo Business News Channel that Nissan is putting the final touches on a new battery that would in fact double the range of the automaker’s electric vehicles. While the figure of 400 kilometers was thrown around on that show and agreed to, by EPA mileage testing standards that would mean that in the near term this new battery pack would be capable of taking a Leaf 168 miles between charges. And in anybody’s book that’s a game changer; it would easily allow anyone working 50 miles from home to make the trip back and forth with loads of battery range to spare. Of course, last May Nissan’s Andy Palmer let slip that the company had a vastly improved battery with much higher density, which would allow 186 miles in range. Everyone quickly walked back from his statement, not because it wasn’t true, but for fear it would impact sales of the shorter range Leaf currently being sold.
As it turned out, though, that wasn’t even the biggest news in batteries. The Financial Times ran an article the first week of November about SolidEnergy, a new company founded by Dr. Qichao Hu and Donald Sadoway, battery experts from the Massachusetts Institute of Technology. These two have changed the basic makeup of the lithium-ion battery, replacing the graphite and silicon anodes that current batteries use with an ultra-thin metal anode. The result is a far more stable lithium-ion battery; it would no longer require either heating or cooling units and would reduce manufacturing costs by at least 20%. Oh, and they claim that the higher density and greater capacity of their battery could improve the range of current electric cars by at least a factor of 3.
If that proves to be the case once production starts next year, and as soon as SolidEnergy signs up a major car manufacturer (they’re talking to them now), that would give the Nissan Leaf a range of 250 miles. Not to mention a lower cost of production.
Of course, no one knows for sure about either one of these predictions for new batteries. We have heard this before and it never quite panned out. But what most don’t realize is that even the production technology we now have for lithium ion batteries has cut the cost of manufacturing from $750 per kilowatt hour just five years ago to somewhere around $250 today. That is an unbelievable reduction in battery manufacturing costs, far faster than anyone inside the automobile industry expected.
The Moment Beats Memory
The ironic thing is that none of this may matter to the car buying public today. Everyone has watched the price of gasoline fall over the past few months, and already that fact is boosting sales of large trucks and SUVs. It’s as if everyone has forgotten about our 2008 summer of fun at the gasoline station.
Complicating things even more, and something I’ve covered numerous times in this column, is that over the past two years we’ve seen a huge increase in fuel efficiency for many vehicles. This is due solely to the two government mandates for higher fleet fuel economy standards; but overall efficiency averages are also falling because the public has finally embraced the modern four-cylinder engine. It’s becoming the dominant power plant in automobiles.
Let’s be honest. If five years ago we had predicted in this column that Land Rover would bring out a sport utility with only a four-cylinder engine, such as its outstanding Evoque, readers would have responded with hoots and peals of laughter.
BMW dealers were thunderstruck when the Bavarian automaker told them it would make a four-cylinder version of its 5 Series luxury sports sedan. It was nothing less than heresy in dealers’ minds; yet here came the BMW 528i and the public loved it. Just as they do the Jaguar XF 2.0T Premium sedan. If you’re lining up for the all-new 2015 Lexus NX compact crossover, a four-cylinder engine is in your future too. And Ford has made a fortune convincing people to pay extra for its Eco-Boost engines — or, in many cases, paying more for a four-cylinder than they would have for a V-6.
Already, and largely unnoticed or unappreciated, the fuel efficiency of a great many automotive products brought to market has experienced a seismic shift. The public seems finally to have gotten over its cylinder fixation, and people have acclimated themselves to high-output, high gas mileage four-bangers. Good thing, too, since turbocharged three-cylinder cars are already making their debut in the market. It may be just a matter of time before BMW introduces a 518i, a three-cylinder version of what has long been considered the ultimate luxury sports sedan.
Still, while we consider the West Coast the primary market for purely electric cars, it should be noted that over the last year Atlanta, Georgia, has become electric car central; retail deliveries for electrics over total new car sales there have hit the highest percentages in America. Who would have guessed that?
The magic number that everyone, including Elon Musk at Tesla, is chasing is $100 in production cost for each kilowatt hour of energy storage. The entire industry agrees that if that number can be hit, then there’s a great chance that all electric cars will start to go mainstream in the same way hybrid electric cars have over the past decade. Then again, with gasoline prices falling today, hybrids are a tougher sale than a full-sized truck.
Therein lies the object lesson for today. Apparently it takes only 60 days of good news about the price of gasoline to completely alter the nation’s car-buying habits. One would think we’d at least look 60 months into the future before committing to our next vehicle purchase.
© Ed Wallace 2014
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism. He hosts Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: email@example.com; read all of Ed’s work at www.insideautomotive.com