Batteries to be plentiful for electric cars
Supply may outpace consumer demand for years, experts say
Alisa Priddle / The Detroit News
Novi -- Electric vehicles are poised to be both popular and profitable,
automakers believe, but it'll take time for sales to match to the
capacity of U.S. plants assembling batteries.
Ford Motor Co. expects electric vehicles to represent 10 percent to 25
percent of its worldwide sales by 2020, said Nancy Gioia, director of
global electrification, compared with about 2 percent today.
And demand for Nissan Motor Co.'s soon-to-arrive Leaf electric car
continues to grow. About 14,000 of the 100,000 consumers who initially
said they'd be interested in buying a Leaf have paid a $99 deposit to
save their place in line to get one when deliveries begin in December,
said Brian Carolin, head of sales and marketing for Nissan North America.
Still, sales projections pale compared with the billions of dollars
being invested to make battery cells and packs to power electric
vehicles, said Michael Crane, managing director of hybrids and electric
vehicles for Continental Corp.
"That's a lot of money to battery packs," said Crane.
"I count nine providers entering the space in North America, mostly in
It could result in a huge gap between demand and capacity, he said at
Automotive News' Green Car Conference held at Rock Financial Showplace
More than $37 billion in low-interest government loans and grants have
been awarded in recent years to nurture the battery/electric vehicle
industry, Crane said.
Capacity for vehicles requiring lithium-ion batteries could outpace
demand by 1.3 million units in five years, Crane said, citing recent
testimony at a house committee by Mary Ann Wright, a senior executive
with supplier Johnson Controls Saft.
Compact Power Inc., for example, will be able to make 15 million to 20
million cells a year at a new $300 million facility in Holland, Mich.,
starting in 2012. That's enough for about 150,000 vehicle packs a year
for vehicles including the Chevrolet Volt, due out late this year.
Compact Chief Executive Prabhakar Patil is among those concerned that
"too much capacity may be being set up in the short term" -- five years,
Gioia at Ford agrees there appears to be overcapacity, but believes
scale and volume will be adjusted as the fledgling industry learns and
Gioia predicted Ford's electric lineup in 2020 will consist of 70
percent hybrids, 20 percent to 25 percent plug-ins and the rest pure
electric vehicles. Ford is spending more than $1 billion in development
of electrified vehicles and many are on Ford's highest-volume global
families of vehicles. "We want it to be a core competency," she said.
GM is betting on large volumes and is pleased the supply base is gearing
up for it, Bly said.
As Nissan prepares to sell its electric Leaf, Carolin said potential
customers will, starting this summer, receive a home visit from an
electrical contractor to discuss installation of a charging station to
be ready. Deliveries of the five-seater begin in December but with
limited production in Japan of 50,000 cars annually for the first two
years, the vehicle is essentially sold out.
Once a $1.7 billion expansion of Nissan's Smyrna, Tenn., facilities is
complete in late 2012, the automaker will be able to produce 200,000
lithium-ion batteries and 150,000 Leafs annually.
Carolin predicts the $32,780 Leaf will be profitable in its first
Johannes-Joerg Rueger, who oversees diesel engineering for Robert Bosch
LLC, cautioned that much more work and time is needed before electric
vehicles are competitive in cost with combustion engines. For that
reason, he said, engines "will stay the predominant technology for at
least 20 years."
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