5
Results and Conclusions

  1. Lithium-ion battery technology has been developing rapidly, especially at the cell level, but costs are still high, and the potential for dramatic reductions appears limited. Assembled battery packs currently cost about $1,250 to $1,700 per kWh of usable energy ($625 to $850/kWh of nameplate energy). A PHEV-10 will require about 2.0 kWh and a PHEV-40 about 8 kWh even after the batteries have undergone expected degradation over time. Costs are expected to decline by about 35 percent by 2020 but more slowly thereafter. Projections of future battery pack costs are uncertain, as they depend on the rate of improvements in battery technology and manufacturing techniques, potential breakthroughs in new technology, possible relaxation of battery protection parameters as experience is gained, and the level of production, among other factors. Further research is needed to reduce costs and achieve breakthroughs in battery technology.

  2. Costs to a vehicle manufacturer for a PHEV-40 built in 2010 are likely to be about $14,000 to $18,000 more than an equivalent conventional vehicle, including a $10,000 to $14,000 battery pack. The incremental cost of a PHEV-10 would be about $5,500 to $6,300, including a $2,500 to $3,300 battery pack. In addition, some homes will require electrical system upgrades, which might cost more than $1,000. In comparison, the incremental cost of an HEV might be $3,000.

  3. PHEV-40s are unlikely to achieve cost-effectiveness before 2040 at gasoline prices below $4.00 per gallon, but PHEV-10s may get there before 2030. PHEVs will recoup some of their incremental cost, because a mile driven on electricity will be cheaper than a mile on gasoline, but it is likely to be several decades before lifetime fuel savings start to balance the higher first cost of the vehicles. Subsidies of tens to hundreds of billions of dollars will be needed for the transition to cost-effectiveness. Higher oil prices or rapid reductions in battery costs could reduce the time and subsidies required to attain cost-effectiveness.

  4. At the Maximum Practical rate, as many as 40 million PHEVs could be on the road by 2030, but various factors (e.g., high costs of batteries, modest gasoline savings, limited availability of places to plug in, competition from other vehicles, and consumer resistance to plugging in virtually every day) are likely to keep the number lower. The Maximum Practical rate depends on rapid technological progress, increased government support, and consumer acceptance. A more realistic penetration rate would result in 13 million PHEVs by 2030 out of about 300 million vehicles on the road, which still assumes that current levels of government support will continue for several decades.

  5. PHEVs will have little impact on oil consumption before 2030 because there will not be enough of them in the fleet. More substantial reductions could be achieved by 2050. PHEV-10s will reduce oil consumption only slightly more than can be achieved by HEVs. A PHEV-10 is expected to use about 20 percent less gasoline than an equivalent HEV, saving about 70 gallons in 15,000 miles. Forty million PHEV-10s would save a total of about 0.2 million barrels of oil per day. The current light-duty vehicle fleet uses about 9 million barrels per day. PHEV-40s will consume about 55 percent less gasoline than equivalent HEVs, saving more than 200 gallons of gasoline per year per vehicle.

  6. PHEV-10s will emit less carbon dioxide than non-hybrid vehicles, but save little relative to HEVs after accounting for emissions at the generating stations that supply the electric power. PHEV-40s are more effective than PHEV-10s, but the GHG benefits are small unless the grid is decarbonized with renewable energy, nuclear plants, or fossil fuel fired plants equipped with carbon capture and storage systems.

  7. No major problems are likely to be encountered for several decades in supplying the power to charge PHEVs, as long as most vehicles are charged at night. Generation and transmission of electricity during off-peak hours should be adequate for many millions of PHEVs, although some



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5 Results and Conclusions 1. Lithium-ion battery technology has been developing 4. At the Maximum Practical rate, as many as 40 million rapidly, especially at the cell level, but costs are still high, PHEVs could be on the road by 2030, but various factors and the potential for dramatic reductions appears lim- (e.g., high costs of batteries, modest gasoline savings, ited. Assembled battery packs currently cost about $1,250 limited availability of places to plug in, competition from other vehicles, and consumer resistance to plugging in to $1,700 per kWh of usable energy ($625 to $850/kWh of virtually every day) are likely to keep the number lower. nameplate energy). A PHEV-10 will require about 2.0 kWh and a PHEV-40 about 8 kWh even after the batteries have The Maximum Practical rate depends on rapid technologi- u ndergone expected degradation over time. Costs are cal progress, increased government support, and consumer expected to decline by about 35 percent by 2020 but more acceptance. A more realistic penetration rate would result in slowly thereafter. Projections of future battery pack costs 13 million PHEVs by 2030 out of about 300 million vehicles are uncertain, as they depend on the rate of improvements in on the road, which still assumes that current levels of govern- battery technology and manufacturing techniques, potential ment support will continue for several decades. 5. PHEVs will have little impact on oil consumption breakthroughs in new technology, possible relaxation of bat- before 2030 because there will not be enough of them in tery protection parameters as experience is gained, and the the fleet. More substantial reductions could be achieved level of production, among other factors. Further research is by 2050. PHEV-10s will reduce oil consumption only needed to reduce costs and achieve breakthroughs in battery slightly more than can be achieved by HEVs. A PHEV-10 is technology. 2. Costs to a vehicle manufacturer for a PHEV-40 expected to use about 20 percent less gasoline than an equiva- built in 2010 are likely to be about $14,000 to $18,000 lent HEV, saving about 70 gallons in 15,000 miles. Forty more than an equivalent conventional vehicle, including million PHEV-10s would save a total of about 0.2 million a $10,000 to $14,000 battery pack. The incremental cost barrels of oil per day. The current light-duty vehicle fleet uses of a PHEV-10 would be about $5,500 to $6,300, including about 9 million barrels per day. PHEV-40s will consume about a $2,500 to $3,300 battery pack. In addition, some homes 55 percent less gasoline than equivalent HEVs, saving more will require electrical system upgrades, which might cost than 200 gallons of gasoline per year per vehicle. 6. PHEV-10s will emit less carbon dioxide than non- more than $1,000. In comparison, the incremental cost of an hybrid vehicles, but save little relative to HEVs after HEV might be $3,000. 3. PHEV-40s are unlikely to achieve cost-effectiveness accounting for emissions at the generating stations that before 2040 at gasoline prices below $4.00 per gallon, but supply the electric power. PHEV-40s are more effective PHEV-10s may get there before 2030. PHEVs will recoup than PHEV-10s, but the GHG benefits are small unless the some of their incremental cost, because a mile driven on grid is decarbonized with renewable energy, nuclear plants, electricity will be cheaper than a mile on gasoline, but it is or fossil fuel fired plants equipped with carbon capture and likely to be several decades before lifetime fuel savings start storage systems. 7. No major problems are likely to be encountered for to balance the higher first cost of the vehicles. Subsidies of several decades in supplying the power to charge PHEVs, tens to hundreds of billions of dollars will be needed for the as long as most vehicles are charged at night. Generation transition to cost-effectiveness. Higher oil prices or rapid reductions in battery costs could reduce the time and subsi - and transmission of electricity during off-peak hours should dies required to attain cost-effectiveness. be adequate for many millions of PHEVs, although some 

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 TRANSITIONS TO ALTERNATIVE TRANSPORTATION TECHNOLOGIES—PHEVS distribution circuits may need upgrading if they are to serve however, that a portfolio approach will enable the greatest clusters of PHEVs. Encouraging PHEV owners to charge reduction in oil use. Increasing the efficiency of conventional their vehicles during off-peak hours will require both rate vehicles (including HEVs) beyond the current regulatory schedules that reward time-appropriate charging and equip- framework could reduce gasoline consumption by about ment that can monitor—or even control—time of use. 40 percent in 2050, compared to the Reference Case. Adding 8. A portfolio approach to research, development, biofuels would reduce it another 20 percent. If PHEV-10s demonstration, and, perhaps, market transition support are also included at the Maximum Practical rate, gasoline is essential. It is not clear what technology or combination consumption would be reduced an additional 7 percent, of technologies—batteries, hydrogen, or biofuels—will while PHEV-40s could reduce consumption by 23 percent. be most effective in reducing the nation's oil dependency Employing HFCVs instead of PHEVs could eliminate gaso- to levels that may be necessary in the long run. It is clear, line use by the fleet.