[pagebreak:The Future of Plug-In Hybrids]
Plug-in cars have left the hobby stage. Approximately 600 people attended Plug-In 2008, the first edition of a conference held earlier this month in San Jose, Calif. And, 1,000 attendees paid to see the technology show floor. A pre-conference battery workshop was standing room only.
In many ways this enthusiasm is warranted: PHEVs (plug-in hybrid electric vehicles) hold the sole realistic short- to medium-term promise to significantly reduce vehicular petroleum consumption, say many experts in the field. PHEVs have larger battery packs than standard hybrids, but smaller ones than full electric cars, and at today's state of battery development this offers them a better cost/performance combination than full electric cars. But it's not as good as with standard hybrids.
For short- to medium-range distances, PHEVs, in fact, can function as electric cars. Sixty to 80 percent of household vehicles travel less than 20 to 60 miles in a day, a distance a plug-in hybrid will cover with battery power. And with most PHEVs, the majority of the energy for short-range travel comes from a wall plug, perhaps at a cost of less than a dollar per gallon of gasoline equivalent.
Besides reducing tailpipe emissions and gasoline consumption, plug-ins of all types can potentially help balance the electrical grid by getting drivers to charge them at night when electricity is cheaper and demand is far lower. Assuming millions can be deployed, PHEV batteries charged at night can also serve as energy storage devices for utilities and/or wind power providers without, according to some studies from the national laboratories, unduly stressing the grid.
Finally, a PHEV can act as a self-propelled generator on wheels, allowing it to swarm to emergency situations like Hurricane Katrina.
Consumers are already drawn to the idea of electric cars. This can be judged by both the excitement around cars like the all-electric Tesla Roadster but also in sales of hybrids, such as Toyota’s Prius, Ford’s Escape Hybrid (which uses Toyota licensed HEV technology) and Honda’s Civic Hybrid.
PHEVs, at their simplest, add a bigger battery to a standard hybrid and a 110- or 220-volt plug to that battery. Compare that to standard wall plugs, which operate at 110 volts, and clothes dryers that use that strange looking and oversized plugs to plug into a 220 line.
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Right now, PHEVs are strictly retrofits: No large manufacturer mass-produces them. The first demonstration was in 2002 courtesy of advocacy group CalCars. Since then, a professional and cottage industry of Prius retrofit companies and shops have sprung up. Among these companies are Canada’s Hymotion, which was acquired by Boston-based lithium-ion battery company A123 Systems, which is operating with $250 million of corporate and venture capital funding.The company is in the game and was at the conference. Also at the conference was San Francisco-based Luscious Garage – led by owner, self-described “recovering academic” and mechanic Carolyn Coquillette.
Retrofits cost between $5 to $10 for labor and an additional $3,000 to $20,000 for battery costs, depending on the desired performance and battery. The cheapest batteries are the tried and true but heavy and bulky lead acid.
The simplest PHEV architecture is the series hybrid. In this model, the car’s gasoline engine does not directly drive the wheels. It exists only to charge the battery, which powers the car. No carmakers mass-manufacture these yet. General Motors hopes to be the first with its Chevy Volt, which is expected to reach showrooms by late 2010. The Volt is designed to go 40 miles on a single battery charge before the engine needs to recharge the battery, which gives it the designation of a PHEV40. Research universities are also tinkering with split-power hybrids where the gas and electric motors power different wheels on a car. The Union of Concerned Scientiests (UCS) has a superb Website and click-to-move graphic that explains these differences.
Toyota is also working on a Prius plug-in but hasn’t yet announced a commercial release date, although a fleet of 10 demonstrator Prii are being released on a limited basis to select members of the public by and with the results being recorded by the University of California Davis’ Plug-In Hybrid Electric Vehicle Research Center. The Center is funded with a $3 million grant from California Energy Commission’s Public Interest Energy Research Program. These demo Priis are designed to have a PHEV20 capability, their batteries are rechargeable with a 110-volt standard house plug, and in combined electric and gasoline mode they have a fuel economy of 100 MPG.
U.C. Davis has had a long association with Toyota, particularly in regarding testing and demonstrating Toyota’s hydrogen vehicles. The university has emerged as one of the more prominent universities with regard to energy research in the U.S.
Additionally, U.C. Davis is well known as the long-time home of Professor Andy Frank – widely acknowledged as the Godfather of PHEVs. Over the years he and his team of students have retrofitted nine concept or conventional vehicles as PHEVs, with the largest being a Chevy Suburban. (You can see a list of them here. Please note that some of the site’s links are broken and might take some googling to get more information and specification sheets, such as those for a Chevy Equinox PHEV called Trinity. More information is available here.) Frank is the Chief Technical Officer of Efficient Drive Trains Solutions Inc., which was founded around intellectual property all patented by and owned by Frank and/or U.C. Davis.
Another luminary in PHEVs is Illinois Institute of Technology Professor Ali Emadi. Both Emadi and Frank were publicly recognized as PHEV oracles by Silicon Valley luminary Andy Grove, the conference’s Tuesday lunch-time keynote speaker. Grove is a PHEV fan, and the former CEO and Chairman of Intel. Grove described a vision of creating a franchised business via already in-place automotive repair shops to retrofit PHEVs as the owners of many on-road pick-ups; sport utility vehicles and vans are feeling some intense pain at the pump presently. Emadi is also the Founder and President of Hybrid Electric Vehicle Technologies Inc., which previewed a Ford F-150 pickup PHEV retrofit at the conference.
Besides needing more refined architectures, more importanly PHEVs need smaller, lighter, more powerful, more robust and cheaper batteries. On a per pound basis, lithium-ion batteries provide greater energy density than the lead acid batteries or the nickel metal hydride batteries in today’s most successful hybrid vehicles, but they can have “heat management issues” which can result in a fiery melt down. Toyota, according to some, rejected the use of lithium ion batteries for its new generation Prius and chose to stay with the standard nickel metal hydrides until this safety related issue is thoroughly solved. (You can see an evolving list of Prius retrofit and kit options here.)
Battery companies, however, are tackling this issue by changing the structure and chemistry of the components that make up lithium-ion batteries. A123 Systems, for instance, has a lithium-phosphate battery, which they say is far less prone to runaway thermal reactions than classic lithium cobalt batteries that are in today’s laptop and notebook computers. Others such as Altair are working on lithium titanate batteries. Still other companies, notably Tesla Motors, are sticking with lithium cobalt batteries but building greater safety mechanisms around them.
Cost, though, will likely remain an obstacle. While the premium on assembly line plug-ins will be lower than the $8 to $30 price for a retrofit, they will come with a $5,000 or higher price than hybrids, which sell for a premium of around $3,000 on conventional vehicles. With $5 a gallon gas, a consumer could drive a car that gets a lowly 20 miles per gallon and enough gas to drive for nearly three years for the same incremental cost for as a plug-in once they are mass-produced, or for significantly more at today’s cost of a major retrofit.
In fact, GM recently upped the prospective price of the Volt from $30,000 to $40,000, with this price differential being ascribed to incremental battery costs. As GM’s Larry Nitz, a conference speaker on the subject of PHEV power trains said: “Hybrids are way more expensive than conventional vehicles, and plug-ins are even more expensive than that."
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Sure, in some cases money is no object when it comes to green cred. Take, for instance, venture capital-backed Tesla Motors with its 0-to-60 mph in 3.9 seconds BEV rocketship with an $80,000+ price tag; and then there’s VC-backed Fisker Automotive’s Karma PHEV with a similar luxury market price tag. Henrik Fisker, who helped design the Tesla vehicle and is now being sued by Tesla for trade-secret infringement, leads Fisker.
Both companies are examples of the no-compromise green option for those that can afford it. But, with Volkswagen and other German car companies announcing the coming of diesel vehicles that are compliant with California’s emissions standards, turbo diesel engines offer significant high-torque pick-up in vehicles that are affordable to most mortals, and with fuel-economy benefits versus costs that are by some estimates superior to hybrids.
Given the hurdles and competition, it is hard to say that PHEVs will be materially on the market (say in 25 percent of vehicles) in the next two decades. And this is assuming that petroleum prices stay high. History says that things may not remain this way. A Saudi Arabia-sized ocean of petroleum is presently sequestered in Canadian oil sands and profitably is converted at $50 $70 a barrel.
Replacement cycles also move slowly in the automotive market. It took a decade for the hybrid population to hit one million cars. That’s out of 850 million vehicles on the planet. And the electricity industry is similarly conservative and under various levels of regulatory control depending on the state/province and/or country.
The fundamental hypothesis of the coming Greentech Media PHEV report is that a breakthrough will only happen if the CEOs of the major electric utilities first convince themselves and then can convince Wall Street that the PHEVs lead a paradigm shift in reducing costs; increasing system optimizations; creating quicker and cheaper ways to achieve mandates; decreasing costs; and increasing revenues, profits and (courtesy of Wall Street) the all important stock price.
The Federal Energy Regulatory Commission (FERC) and state regulators, such as the California Public Utilities Commission, would have to be in on this effort, and it would require them to allow the expenditures and investments into the rate base to accelerate research, development and demonstration efforts as well as the early investment in batteries even before batteries are fully ready on a cost basis. But with this early investment aiding in bringing costs/prices down through economies of scale. FERC and other state regulators have to be convinced by these CEOs that they provide the proper forum and that it is in the public’s best interest on both the micro- and macro-level to allow for a direct attempt to displace petroleum. Of course, this would only happen if the stars of national- and state-level politics aligned.
Admittedly it shouldn’t be underestimated how intensely the petroleum industry would react to what is in essence a fight to the death over the most lucrative part of its business.
To succeed, the electricity industry would need to gather its allies either from new markets or from those markets that are negatively affected by petroleum. And with the petroleum market left with only the defense industry on its side, defense would have to fight hard to avoid this recognition of their interest. This could be a winnable war for electricity.
A petroleum-free U.S. could carve a huge peace dividend out of the defense budget, which could then go towards teachers’ salaries, domestic roads-and-bridges projects and more healthcare spending – all of which have very well organized lobbies and potential allies for the electricity industry. A further PHEV primer that will include the above issues and more will be dealt with in the coming Greentech Media report.
Reed M. Benet is leading Greentech Media’s coming plug-in hybrid report and is a former USMC infantry officer, MBA, experienced venture capital-backed entrepreneur and presently a Ph.D. student at the University of California Davis. At U.C. Davis, he is focused on attempting to articulate PHEV business models that are in line with the cost savings, and increased revenues, profits and market capitalization based forces of gravity of a reality-based marketplace. He can be contacted at firstname.lastname@example.org.