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EV Makers Still Need A Long-Term Battery Solution

EV Makers Still Need A Long-Term Battery Solution

If electric cars really are the future in this country, then the U.S. government’s recently-announced $2.4-billion plan to boost battery technology and production is an absolute must.

            For those who missed it, the Obama administration said on Tuesday that the government will award $1.5 billion in grants for the production of batteries, $500 million to companies making electric drive components, and another $400 million to pay for the purchase of plug-in hybrids and EVs. Battery makers Johnson Controls and A123 Systems snared $299 million and $249 million, respectively. GM landed $240 million to cover the manufacture of battery packs and to work on electric drivetrain components, The Wall Street Journal said. A host of other companies also picked up lucrative grants.

            The $2.4-billion program is absolutely critical because EV batteries still haven’t reached the point needed for widespread success of electric cars. Many auto executives fear that consumers won’t be willing to ante up the extra premium that will be needed to buy EVs. And the big cause of that premium is the battery. Consider this: Tesla Motors, which has had impressive success with the design of its Roadster, says it is paying about $500/kW-hr for its lithium-ion batteries. If that’s true, it means that the Roadster’s 53-kW-hr battery costs more than $26,000. Those battery costs are a big reason why the Roadster has been more popular with wealthy celebrities like George Clooney and Matt Damon than with two-car families.

            Sure, Tesla and others will be able to drive those prices down by going to higher production volumes. But experts we’ve talked to have said that even with very high production volumes, lithium-ion battery costs are unlikely to get much lower than $300/kW-hr. To go beneath that, they say, more research is needed. Reaching the much-discussed $100/kW-hr level may require automakers to eventually reach beyond lithium-ion, to an unknown battery chemistry that’s still under development in a university lab somewhere.

            So, yes, the $2.4-billion plan is important. But let’s hope it puts some money into a long-term answer that will take EVs beyond the realm of Hollywood stars.

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