The core problem we all want to solve is oil prices, which hit an inflection point in the late '90s and show no signs of deviating from their new trend. To help readers visualize the problem I've created a simple graph from historical statistics published by the Energy Information Administration and then added a price channel overlay in blue. While there are any number of opinions about the future of oil prices, history clearly shows that severe price spikes lead to recessions that lead in turn to equally severe price troughs. Over the long term the only prediction I feel comfortable making is that oil prices will probably bounce around in the price channel until we hit another inflection point. The only certainty is that each of us will be forced to choose between suffering the pain of increasing oil prices or taking individual responsibility for our choices and changing our behavior as consumers.
I believe America should do everything in its power to escape the fiscal tyranny of imported oil and minimize the obscene indirect costs of protecting tenuous supply chains in a dangerous world. I do not believe, however, that a rapid transition to GEVs is either possible or desirable. There is only one commercially available GEV on the market today. While several manufacturers plan to introduce GEVs beginning in 2010, their forecasts and performance claims are based on computer models, estimates and laboratory testing instead of real-world experience. Can you imagine the outrage if somebody tried to pull that kind of crap with a new drug? It took ten years for the venerable Toyota (TM) Prius to build a reputation for reliability and earn consumer trust and loyalty. The idea that a radically new product class that costs twice as much and offers far less flexibility can or should be forced into the market ignores human needs and is, by definition, irrational.
The roadmap begins with a lengthy discussion about the cost effectiveness and relative cleanliness of electricity as an energy source for transportation. It also mentions in passing that batteries are not sources of energy, but devices that store energy. In a conventional car the energy storage system costs about $5 per gallon of fuel tank capacity and the energy costs about $0.10 per mile. In a GEV the energy only costs $0.02 per mile but the energy storage system will cost over $4,500 per equivalent gallon of capacity even if widely promised and incredibly vague economies of scale materialize. [My Hymotion L5 for Prius costed $10,000. -FNC] Ultimately the trade-off is operating costs vs. capital costs. By the coalition's reckoning, the unsubsidized cash-on-cash breakeven point for a new GEV will be 10 to 12 years. If you include Federal tax credits in the calculations, the breakeven point is pushed forward into the 5 to 8 year range. Those payback periods may appeal to the philosophically committed or the mathematically challenged, but they will be non-starters for budget conscious consumers.
Like people, lithium-ion batteries work best in climate-controlled spaces. The bulk of our experience as battery users comes from consumer electronics we use in our homes, offices and cars. The limited experience most of us have with using batteries in extreme heat or cold is generally bad. I'm the first to acknowledge that GEVs may perform well in the friendly climates of San Diego and Honolulu, but their performance on frigid winter days in Chicago and torrid summer days in Phoenix will leave much to be desired. While the roadmap doesn't delve into the impact of terrain, I've spent enough time pedaling my bicycle uphill to know that the eco-optimists in San Francisco will be less than enchanted with GEV performance in their fair city. The inescapable truth is that by the time you eliminate places that are too cold, too hot, too hilly or simply too sprawling, GEVs will be little more than niche products in the U.S., even with unlimited governmental support. GEVs may make some sense in Europe and Asia where daily drives are shorter, public transport is better, gasoline taxes are three to ten times higher and socialism is politically correct, but even then I have grave reservations.
One of the more startling aspects of the roadmap is its frank discussion of charging infrastructure requirements and costs, a subject that I've completely overlooked in earlier articles. Initially, the coalition believes two public charging stations will be required for every new GEV. For Level II (220 volt) charging stations, the costs will typically be in the $6,000 to $10,000 per vehicle range. When the capital cost for public charging stations is viewed as part and parcel of the aggregate GEV investment, the dismal economics only get worse. While I've suspected as much for a long time, the roadmap also makes it clear that persistent happy talk about Level III quick charge stations (30 kW to 250 kW) is meaningless because first generation GEVs will be designed to accept a 220 volt charge at less than 30 Amps and it doesn't take an engineer to know that something expensive will turn to slag the minute you plug a 6.6 kW battery pack into a 30 kW charging circuit.
Batteries are commodities, as are all of the raw materials that are used to make the batteries, motors and other components required for a GEV. The roadmap assumes away critical issues of raw materials availability by proving that the elements exist in nature and then ignoring fundamental natural resource development issues like location, economics, environmental impacts and the difference between known mineral resources and developed mineral reserves. It also assumes that recycling issues will resolve themselves despite the fact that the only class of ARRA battery manufacturing grants that went begging was battery recycling.
In How PHEVs and EVs Will Sabotage America's Drive For Energy Independence, I showed that until batteries are dirt cheap and available in unlimited quantities, basic Prius class HEVs are more efficient users of available battery capacity than GEVs. In PHEVs and EVs; Plugging Into a Lump of Coal, I showed that the same dynamic applies to CO2 emissions. In both cases, the unpalatable but undeniable truth arises from the law of diminishing returns. A Prius class HEV uses about 1.3 kWh of battery capacity to reduce both fuel consumption and C02 emissions by 40%. GEVs will use 10x to 20x the battery capacity to reduce fuel consumption and C02 emissions by about 65%. When you consider that every GEV that rolls off an assembly line will preclude the production of 10 to 20 Prius class HEVs, there is simply no contest in terms of either fuel consumption or C02 emissions.
The first 40% is low hanging fruit that can be harvested with 1.3 kWh of battery capacity per vehicle. That last 25% is a technical nightmare that cannot be solved without an unconscionable waste of natural resources. In a world where six billion people want a small piece of the lifestyle that 500 million of us have and take for granted, I'm appalled by the arrogance. What ever happened to the concepts of personal responsibility and shame?
Real albeit modest vehicle electrification solutions are already being implemented by a variety of companies in the energy storage and automotive sectors. These simple and cost effective baby steps are nowhere near as exciting as the quantum leaps envisioned by the Electrification Coalition, but at least they don't expect Peter to pay for Paul's eco-bling.
In a market economy companies thrive by selling reliable products that satisfy human needs at competitive prices. Businesses that feel compelled to hire lobbyists to argue that their business models can't work in the absence of massive governmental intervention are doomed from the start (think grain ethanol). I may be an optimist, but even I understand that sometimes a 170-page pile of manure is not hiding a pony.