In reading between the lines, Chuck, it sounds like there were high expectations for the EV market that didn't come to realization. Otherwise, why would the market pump up to the point that a shakeout is coming? Have EVs been less popular than expected? If so, why? Is it the costs? Performance issues?
You're right, Rob. High expectations play a big role in this. But the analysts we talked to allowed for a wide range of possible scenarios -- a demand of 2 GWh on the low end and 20 GWh on the high end. Even at 20 GWh, however, the demand is still about 10 GWh short of the supply. As a result, companies will still be winnowed out, even under those relatively good conditions.
What about the costs of producing the batteries? One way to increase demand is to drive down teh costs. I am not sure what the cost breakout is but R&D must be significant. I would also expect eh electronics to manage the battery charging and discharging to be significant as well but probably very sensitive to demand. after all once the basic controls are designed and implemented with approppriate processors they are readily amenable to cost reductions liek the rest of the digital cotnrol systems have been. The matieral cost, Lithium and some alloys I am told are not so expensive either.
As we mentioned before increasing the demand by other than EV uses might also be possible. I can see homeowners adding batteries when they can store lower cost energy for use during higher cost times that depend on their local utility cycles.
Coupling batteries with wind and solar systems would also increase demand but drives the costs of the systems up significantly.
An industry shakeout is coming for sure regardless.
Ivan: You're right. The costs will undoubtedly decline as production volume rises, and that will certainly boost sales. Most analysts say, however, that the costs won't drop below $400/kWh, and may remain as high as $650/kWh, even as economies of scale kick in. (With the exception of Tesla, which employs 18650 batteries, today's costs are approximately $800-$1,000/kWh.) Assuming an optimistic cost of $400/kWh, a 40-kWh battery will still cost $16,000.
Okay, does this make economic sense? Suppose I can get a 40KWhr battery for my home for $16K. My utility used to offer a Time of Use option which is now closed to new subscribers, however others have claimed a savings of $200 amonth. The estimated payback time is around 80 months or just under 7 years. This is about the same payback period and cost to the homeowenr as installing a 5KW PV array.
I suspect a more detailed analysis of the rate schedule and duty cycle of a home battery storage system might yield more favorable numbers. For example the Time of Use is split into on-peak hours usually around 8 hours of the day and off peak hours. The previously offered rate is about 5 to 1 or 15 cents per KWhr on - peak and 3 cents off-peak. By charging the battery during off-peak and running the home on battery only during on-peak should give better numbers than the 7 year payback.
I looked at the utility rate schedule and all the extra fees, taxes and calculations that go into the bill. It is truly amazing to me that they can make this so complicated. A realistic analysis requires a lot more work and detailed study. One would think it would be helpful to the homeowner adn to the utility in the long run, especially if renewables were making up a larger portion of the utilities total generating capacity.
Rob is certainly correct in that the demand just did not wind up being as great as those who drove up the stock prices through their overly-optomistic predictions led some to believe. And perhaps the general public was not yet willing to spend that kind of money for a car that was certified to need a very expensive battery replacement after a few years. IT appears that a lot of folks are just not that dumb, and, of course, with the economy in this present precarious position, spending a lot of money on anything may not feel right.
Possibly large banks of batteries could be used for "banking" power, possibly for a profit, even. Of course, like many comments point out, it would require quite a bit of calculations and study to determine if banking power is even worth the effort. There does exist the possibility that the answer is" NO".
Forgive me if I'm missing something, but it seems weird to me to be talking about the relative failure of a market that is still in the very early stages of development/adoption. I can understand how industry watchers could project that a shakeout is inevitable--that's nearly always the case with highly-touted new technologies, and while difficult for some to weather, just a normal part of market maturation. What I don't quite get is why the commentors seem to be so quick to close the book on what's still a very early chapter in the EV market.
It is easy to believe that the annual sales of EV's would be closer to hundreds of thousands versus millions. We reside in a relatively urban portion of Virginia, and the only charging stations that I have seen are at state rest stops. This is not good for travelling around town. I understand that home charge stations will be used, but if you can't charge up when you get to your destination, you would be stranded.
"but it seems weird to me to be talking about the relative failure of a market that is still in the very early stages of development/adoption."
You mean like the early deaths of all of those PV companies simply because China decided to step into the market? Investors can't think more than a few quarters away at a time. It's that instant greed mentaility that continues to sell the future down the drain.
Reminicient of the Dot-Com Era and the current solar panel market. A new technology and associated market emerges. Numerous new companies are formed to compete for market share - and a few emerge as market leaders...
Who will be the Google and Yahoo of the electric car battery market?
Lithium-ion battery prices will drop rapidly over the next 10 years, setting the stage for plug-in vehicles to reach 5%-10% of total automotive sales by the mid- to late-2020s, according to a new study.
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