TABLE 2.6 Percent Projected Cost Reductions for Different Components with Increased Production and Learning by Doing

Component

Year Reduction Achieved/Year Against Which Compared

2015a/2010

2020b/2015a

2030c/2020b

Motor/generator/gear set

5

5

5

Power electronics, AC/DC converter

10

15

5

Li-ion battery pack

25

15

10

Electrical accessories

5

5

5

Air conditioning

10

5

5

Regenerative brakes

5

5

5

Electric power steering + water pump

5

5

5

Body/chassis/special components

10

5

5

NOTE: Estimated cost reductions are based on increased production volumes and anticipated improvements in technology and production techniques. Unanticipated technology advances (breakthroughs) could lead to faster reductions.

aAssumed production, 25,000 vehicles per year.

bAssumed production, 1 million vehicles per year.

cAssumed production, 1 million-plus vehicles per year.

production.12 Although it is hard to quantify, about half of the cell cost is estimated to be for materials, and the cells account for about half the battery pack cost, further reducing the impact of cell-only cost reductions.

The additional costs for changes in mechanical and electrical components in going from a conventional vehicle to a PHEV are considered quite predictable and have the expected impact on vehicle cost. These estimates (Table 2.4 and Table 2.5) are only for the cost of the components to the vehicle manufacturer and do not include the cost for vehicle engineering, R&D, or the automakers’ capital investments. These and other markups to the vehicle price, which is what the customer will see, are addressed in Chapter 4 of this report.

Overall, Li-ion battery-pack costs may decline by almost 50 percent, as shown in Table 2.2, from $1,750 per kWh energy actually used in 2010 to about $1,000 per kWh in 2030. Collectively, the reductions in component costs lead to future PHEV costs shown in Table 2.7. These estimates do not consider the possibility of technological breakthroughs, which, if they occur, could significantly reduce the costs and improve the viability of PHEVs. Table 2.7 and the scenarios that follow do not report the conservative estimates, for if costs remain that high, PHEVs are unlikely to achieve much success in the market.

TABLE 2.7 Estimated PHEV Incremental Costs

 

2011a

2015

2020

2030

PHEV-40

14,100-18,100

11,200-14,200

9,600-12,200

8,800-11,000

PHEV-10

5,500-6,300

4,600-5,200

4,100-4,500

3,700-4,100

NOTE: These are the incremental costs to manufacture the vehicle itself, relative to a conventional (nonhybrid) vehicle. They do not include engineering, overhead, or other costs, or profit, and thus are not the total incremental prices to the customer. Ranges represent probable and optimistic assessments of battery technology progress.

aCosts for 2011 are based on low battery production rates in response to contracts initiated about 2 years earlier.

OTHER TECHNOLOGY OPTIONS AND POTENTIAL BREAKTHROUGHS

The cost of Li-ion batteries is currently very high, making it difficult for PHEVs to be cost competitive when the cost of gasoline is less than $4 per gallon. Although considerable progress is expected in reducing battery costs, it is not clear that sufficient cost reductions can be achieved with Li-ion batteries or battery packs to make PHEVs cost competitive without substantial subsidies.

Announcements continue from researchers about improvements in Li-ion batteries, including better electrodes and electrolytes and, possibly, higher cell voltages (to 5 V), resulting in better energy density. Unfortunately, it is hard to evaluate the practicality of these concepts or to assess which, if any, will become commercial and when.

Other Li-ion battery cell chemistries may offer better performance than those currently projected for PHEV applications,13 but serious questions remain about their durability, safety, and costs. There appears to be little chance that any of these could become commercially cost competitive in the near future.

A breakthrough in battery technology would definitely improve the prospect of PHEVs becoming economically competitive. It is not possible to predict or schedule scientific and technical breakthroughs, but a continued, substantial scientific research effort is needed to increase the chances that this will occur. However, even if a breakthrough occurs, it will be decades before it has a great impact. Major battery developments will require considerable work and time prior to commercialization to confirm cost advantage, durability, and safety, and years more to achieve significant penetration into the fleet.

Options such as the lithium-air battery and solid polymer Li-ion electrolyte batteries are under study. Several large U.S. corporations are working on lithium-air technology, which could offer 5 to 10 times as much energy density as the Li-ion batteries discussed above. This battery is much

12

D. Vieau, A123 Systems, Lithium-ion battery progress, presentation to the committee, May 2009, Washington, D.C.

13

D. Vieau, A123 Systems, Lithium-ion battery progress, presentation to the committee, May 2009, Washington, D.C.



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