ELECTRIC CAR: How can electric cars compete with traditional cars with internal combustion engines?
Image: Photo courtesy of GM
The third of a four-part series. Click here for part one and here for part two.
Not long after the auto bailouts, the financial crash and the election of President Obama, General Motors Co. had a choice to make.
It had designed an electric car, the Chevrolet Volt, to prove it could build something besides gas guzzlers. To make this car even close to affordable, it would need a battery unlike any that had been made before.
This battery would have to overcome its own bulk to power the Volt for 40 miles. It would have to repeat this for something like the life of a regular car. It had to be flawlessly safe: One explosion, and the electric car renaissance could be over.
Somehow, given all these qualities, it had to put the Volt somewhere near the price of a gasoline car today.
To discover that battery, GM had been working with two companies, one Korean and one American. And the time had come to choose.
So it did: In January 2009, GM chose LG Chem, a division of Korea-based LG Corp., to supply cells for the first model of the Volt, launching in late 2010.
The runner-up was A123 Systems Inc. of Watertown, Mass., a racing startup with a world-leading technology and now, a fresh defeat.
The move to get the United States into making cutting-edge batteries to power the electric car isn't over. But the starting gun has fired.
DOE is pursuing a double-edged strategy: striving to help existing U.S. companies stay in business until their costs become competitive, and funding possible game-changing technologies that could establish American leadership in these clean energy sectors.
If GM's Volt takes off, there will be more contracts available to players like A123 and LG Chem. Micky Bly, GM's executive director of electric systems, said it's been developing batteries with A123 and one to two other suppliers.
But to the old hands of the battery industry, the first Volt contract was no surprise. They saw an old theme playing out. In the 1980s, American scientists had devised the lithium-ion battery, the technology that will power today's generation of electric cars. But in the 1990s, Asian firms commercialized them, manufactured them and began exporting them to every corner of the world.
They held the high ground -- on experience, on reputation and in existing factories already moving down the cost curve.
"The money has been spent in China, and the factories are up and running, and they're huge factories, state-of-the-art," said James Akridge, a U.S. battery consultant, when asked whether Asian companies have the edge.
In the late 1990s, Akridge was working for Energizer, developing lithium-ion batteries at a new plant in Gainesville, Fla. Suddenly, world prices dropped, and company leaders realized it was cheaper to buy batteries from Japan than make them in the United States. They sold the plant in 1999.
"When you drop it like we did, lithium-ion, and then others have continued to invest and push forward and develop their infrastructure and raw materials," Akridge said, "and then you say, 'Oh, we'd better get back in the game,' I think your competitive position is weak."
To battle for this ground, experts knew, American firms like A123 would need competitive technology, factories of their own, and time to catch up. It would take hundreds of millions of dollars, whether from the government or investors.
All the while, foreign firms would be homing in on the U.S. market, and doing it on U.S. soil.
That's the picture the Obama administration saw in early 2009, when it had just taken office and the economy lay in ruins. As they designed a stimulus plan to rejuvenate the economy, Obama officials knew they wanted to emphasize manufacturing. Clean energy, including batteries, topped the list.
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7 Comments
Add Commentso sad to see the comment about Florida....why say more...
Reply | Report Abuse | Link to thisIt sounds like A123 needs some sales people...why aren't they promoting household standbys....100 of millions of opportunities...(probably billions world wide)....
The first thing the USA & Australia also needs, is cheap reliable & bountiful electrical energy to power its industry. This is not possible while resources are used to play around with fringe technologies that will never perform according to specs. & the real alternative is shackled by ignorance & restrictions that bear no relationship to reality. To give the alternative energy sector a boost, such as carbon taxes being proposed for existing power stations without first clearing the way for the expansion of nuclear power. You will not see restrictions on nuclear power in China or any other Asian economy. Industry in Australia is also being driven off shore by this madness. Even the threat of a carbon tax has halted construction of coal fired power stations while maintaining an outright ban on nuclear. We deserve the consequences if we do not call a halt to this green inspired ignorance.
Reply | Report Abuse | Link to thisThe other big risk is Governments trying to pick winners. The Australian Government last year granted a geothermal company $90M. Turns out the deep well hydro thermal water is highly corrosive. Ate all the well pipes. Down the gurgler you might say. Only tax payers money.
I'm with Wayne Williamson on this one, A123 is missing a huge market for both home and commercial electricity storage. Off peak electricity costs less than peak electricity. By having battery storage a home or business can store up during low cost times and cut high cost time usage by using stored power. Solar and wind facilities can do the same. To be viable the price difference between peak generation and off peak needs to be returned in sufficient ammount to pay for the cost of the batteries. For the utility I work for Winter peak is over $0.17 per kwh and off peak is less than $0.2. That would give a price difference of around $0.15 per kWh. To make up the $800 per kWh you would need to charge and drain the lithium-ion batteries from A123 about 5,333 times to break even. Since high cost peak hits in summer and I don't have easy access to summer peak and off peak data all I can say is the price difference is much larger so use to break even would be lower. Unless the summer peak generation costs are much higher I don't see these batteries being overly cost effective just yet but different utilities would have different generation costs.
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