Just Why Are Electric Cars So Darned Expensive?

Want to know why you and I can’t afford an electric car? Automologist MAC breaks it down. 

We all know that the world’s addiction to personalised transportation powered by some form of internal combustion engine (aka ICE) is contributing to global warming and an alternative needs to be found, else we will have to find a new planet to live on. Or, at least, our children will.

So then, why are we not voting with our feet and rushing head-long to our local Tesla dealer to book our own environmentally friendly vehicle? Why do pure EV s still account for less than 2% of all the vehicles that clog our city streets?

The simple answer is cost. Have you noticed the cost of actually purchasing one? Audi and Mercedes have just launched their latest offering and both of them cost over US$60,000. So it would seem that if you want to save the planet, you have to be rich.

Okay, so they are new and new things always cost more until the market and production facilities achieve economies of scale, and thus the burning question is: will they ever become cheaper than ICE-powered vehicles? According to a recent interview, Klaus Frolich, a senior BMW executive, there will never be a time when EVs are cheaper than an equivalent ICE vehicle, and that is simply because of the cost of the battery.

The humble Li-ion battery—invented in the early 1980s at Oxford University almost by accident—is the Achilles heel of the EV. Currently, the cost of producing a battery with enough stored electricity to overcome range-anxiety, say 90 to 100kWh, costs between US$17,000 and US$25,000, which is of course more than a complete ICE car.

The argument is that with greater production, the cost will go down, and with more research, the efficiencies will increase. Well, not so fast, Horatio. There is a major problem and that is the elements that make up the Li-ion battery are themselves in short supply, and with greater demand, the costs for manufacturing are likely to go up and not down. All of the world’s major users are currently trying to secure supply of cobalt, one of the key ingredients for Li-ion batteries, which is in short supply and ergo, this is, of course, driving world prices up.

Read about it in Good News for the Philippines as the Lack of Cobalt Starts Hurting Electric Automakers.

 

The BMW iVision Dynamics concept is set to enter production by 2021 as the BMW i4.

Volkswagen also recently warned that the cost of development of EVs was proving to be much higher than expected. This may seem a little counter-intuitive; after all, can’t a bunch of college kids knock one together in their garage out of old batteries and lawn mowers? Now, some of you may start thinking that VW is just trying to get some of their money back from the Dieselgate fiasco, but they are not the only ones saying it.

Ford has also joined in the cacophony of voices bleating about the cost of the batteries. According to a recent statement by Ford’s CEO, Alan Mulally, the batteries that go into their US$22,000 Focus cost about US$15,000 and weigh in at 700lbs, and not even my momma is that heavy.

Then there are the burning questions of how long the batteries will last and how much they will cost to replace. Sure, some manufacturers are giving 7 or 8 years guarantee on the batteries, but let’s face it: that may not be good enough. Using the Gogoro approach and making cars with interchangeable batteries could be a good idea, but it doesn’t seem that anyone is taking this direction at present.

Read further:

I know some of you will point out to me the humble mobile phone and how that has gone from a few hour’s talk time to a number of days for some. But it was in the area of the battery where actually the fewest advances have been made. The advances here have been to do with the ability and efficiencies of the rest of the electrical wizardry and not so much with a change in the battery.

Assuming that we can overcome all of the problems associated with converting the world’s vehicle fleet over to Li-ion batteries and they do become the power source of the future, it may not be such a bad thing; particularly if you believe that robots will be taking over most jobs of the future, making everything else very cheap. If this does happens and the price of everything that is not a gigantic battery becomes low, then we may be consigned to just owning very expensive gigantic batteries.

Just saying.

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