R.I.P. Volt-as always.
Study: Electric car costs to stay high
As General Motors pushed the start button Thursday on batteries for its
Chevrolet Volt to whet appetites for the Detroit auto show, a new study
finds that absent a big tech breakthrough, electric vehicles such as the
Volt will stay too costly to snag most consumers around the world.
"You will definitely see more hybrid cars on the road in the future,"
said Xavier Mosquet, senior partner in Boston Consulting Group's Detroit
"The Chevrolet Volt is necessary for energy independence purposes,"
Mosquet added. " ... But the big question is how big this market will be."
BCG estimates that the battery pack similar to what's in the Volt costs
about $16,000 to build. Several automakers have set a target of cutting
those costs to about $2,000, but BCG estimates the costs will only fall
to $8,000-$10,000 by 2020.
Figuring out the future costs of electric cars and batteries is a huge
challenge. There are many shapes, manufacturing estimates, chemical
compounds and untested technology.
It's also a political issue. Last month, the National Academies of
Sciences sent out its own report that is more pessimistic than BCG's,
finding even-higher costs for batteries and questioning the
environmental benefits of plug-in hybrids. That set off a storm of
criticism from electric-vehicle advocates, who charged the panel was
biased toward hydrogen fuel cells.
The essential problem is that batteries hold far less energy per pound
and per dollar than liquid fuel. Plus, their capacity shrinks over time.
It also can shrink with cold weather.
By 2020, BCG estimates electric vehicles will be limited to a range of
160 to 190 miles -- higher than today's versions, but still well behind
Even with that premium, BCG sees better batteries and better factories
allowing 14 million vehicles a year worldwide by 2020 to have some kind
of electric power.
And if government incentives remained near $7,500 -- or if oil prices
shot far higher -- U.S. buyers could still pay back the extra cost in
fuel savings over 3-5 years.
By comparison, the Electrification Coalition -- a group of battery
makers, start-ups and Nissan -- forecasts that by 2015, a plug-in hybrid
with a 40-mile all-electric range will pay for itself without government