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PROCEEDINGS 117
Panel IV
Market Drivers:
Creating Demand for Electric Vehicles
Moderator:
Robert Kruse
EV Consulting LLC
This panel addresses what is required to create market demand for electric
vehicles, explained moderator Robert Kruse, the founding principal of EV
Consulting LLC and former executive director of global vehicle engineering for
hybrids, electric vehicles and batteries at General Motors. "I have a pretty
impressive panel to talk about various aspects of what can be done to spur
electric-vehicle adoption," he said.
The first topic addressed market incentives. Speaker Daniel Spieling is a
professor of civil engineering and environmental science and policy at the
University of California at Davis, Mr. Kruse noted. He is founding director of
the Institute of Transportation Studies and acting director of the Energy
Efficiency Center, both at UC-Davis.
Dr. Sperling also holds an automotive engineering seat on the California
Air Resources Board that has oversight responsibilities over the state's policies
regarding climate-change, alternative fuels, vehicle travel, land use, and the
zero-emission vehicles program. He is co-director of the California Low-Carbon
Fuel Study24 and chairs the Future Mobility Council of the Davis World
Economic Forum. Dr. Sperling is an active member of 13 National Academy
committees, Mr. Kruse noted.
The next speaker, Gary Smyth, was there to provide "an industry
perspective in transforming the auto industry," Mr. Kruse said. Mr. Smyth is
executive director of North American research-and-development labs for
General Motors. He has "a notable 20-year career with General Motors," he
explained, primarily in advanced power trains with early work on advanced
24
Researchers at the University of California-Davis and University of California-Berkeley have been
conducting a study of California's Low Carbon Fuel Standard program since 2007. The first part of
the study, Alexander E. Farrell and Daniel Sperling, "A Low-Carbon Fuel Standard for California,
Part 1: Technical Analysis," Institute of Transportation Studies, University of California, Davis, May
2007, Research Report UCD-ITS-RR-07-07. Also see Alexander E. Farrell and Daniel Sperling. "A
Low-Carbon Fuel Standard for California, Part 2: A Policy Analysis, Institute of Transportation
Studies, University of California, Davis, August 2007, Research Report UCD-ITS-RR-07-08.
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118 U.S. BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES
hybrid cylinder de-activation and direct fuel-injection systems. Mr. Smyth
earned a bachelor's and Ph. D. degree from Queens University in Belfast.
The final speaker, Bill Van Amburg, discussed early adoption of hybrid
vehicles. Mr. Van Amburg is senior vice-president of CALSTART, which Mr.
Greenberger described as "a non-profit, fuelneutral, membership-supported
consortium." He overseas five programs: heavy hybrids, new fuels, technology
commercialization, fleet analysis, and consulting and industry services. "He
brings 25 years of experience in marketing and technology commercialization,"
Mr. Greenberger said. Mr. Van Amburg's academic credentials include degrees
from the UCLA Anderson School for Management, Stanford, and the University
of California-Berkeley.
INCENTIVES FOR THE ELECTRIC VEHICLE MARKET
Daniel Sperling
University of California-Davis
Because he hails from "that other land, the Left Coast, the foreign
country of California," Dr. Sperling began, "I am going to have a little different
perspective here today."
His presentation aimed to achieve four missions, Dr. Sperling said. They
were to emphasize the important role of universities, explain climate and energy
policy from the California perspective, promote his book Two Billion Cars,25
and explain "the market for electric vehicles and what that means for battery
design, which is the main reason we are here." His focus, he said, is to address
what consumers really want in electric vehicles.
Research by his institute on American consumers has revealed some
interesting insights, Dr. Sperling said. "What American consumers seem to want
in electric vehicles is quite different from what I have been hearing today" from
speakers in the symposium.
The success of plug-in electric vehicles will depend largely on
government policy, advances in battery technology, fuel prices, and consumer
response to products, Dr. Sperling explained. "There are a lot of ways for
companies to fall into the Valley of Death," he said. "But a lot of it has to do
with misjudging and misunderstanding consumer responses and consumer
behavior."
State and local governments have implemented plenty of policies aimed
at supporting electric vehicles, Dr. Sperling pointed out. The main policies
include zero-emission standards by several states, greenhouse-gas emission and
fuel standards for vehicles "that have very aggressive incentives for electric
vehicles," tax credits for consumer purchases of low-carbon vehicles, subsidies
25
Daniel Sperling and Deborah Gordon, Two Billion Cars: Driving Toward Sustainability, New
York: Oxford University Press USA, 2009.
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PROCEEDINGS 119
for manufacturers, and government-sponsored research and development, he
said. While "this mélange of policies" does not always seem consistent, he said,
they are "consistent in their support of electric vehicles."
New Environmental Protection Agency standards for greenhouse gas
emissions are especially important, Dr. Sperling said. Standards already being
put into effect in California and that the Obama Administration plans to adopt
for the entire nation call for emission reductions of 30 percent to 40 percent by
2016.26 "That is aggressive," he said.
California is the process of issuing "the next level of standards," Dr.
Sperling explained. "We are talking about at least a 3 percent reduction in
greenhouse gases per mile a year, starting in 2017. 27 So however aggressive
those 2016 numbers are, it is going to get even more aggressive after that." Dr.
Sperling said California is working very closely with the EPA and hopes the rest
of the U.S. will quickly follow its lead.
In addition to putting a lot of pressure on automakers to improve fuel-
efficiency, these standards are designed to push electric vehicles, Dr. Sperling
explained. For example, electric vehicles will be rated as if they emit zero grams
of greenhouse gasses per mile "even though in reality their lifecycle emissions
are much more than that," he observed. "The intent is to incentivize EVs. There
is tremendous pressure to move toward electric-drive technologies. This
requirement is going to make that even more forceful."
California and 10 other states have required that a certain percentage of
cars sold in the state be zero-emission vehicles.28 California requires major
automakers to make available 25,000 such vehicles in the state by 2014 and
50,000 by 2017. "And we are going to adopt numbers that are far more
aggressive than that in 2018 and beyond," Dr. Sperling said.
Low-carbon fuel standards adopted by California are another source of
pressure. The state requires a 10 percent reduction in carbon-intensity of all
fuels, whether they are natural gas, petroleum, bio-fuels, or hydrogen. "What
this does is require that the carbon content of fuels be steadily reduced over
time," he explained. The greenhouse gas benefits of bio-fuels, especially those
derived from foods, are modest, Dr. Sperling noted. "So again, on the fuel side
we will see strong incentive to move toward electricity as a transportation fuel."
Local governments in California also are promoting the electric-vehicle industry.
Municipalities are setting targets for reducing carbon from transportation.
26
The U.S. Environmental Protection Agency and the Department of Transportation's National
Highway Traffic Safety Administration (NHTSA) are finalizing greenhouse gas-emission standards
for model years 2012 to 2016 under the Energy Policy and Conservation Act. For details, see
.
27
In July 2011, the White House, together with most of the major car companies, announced a
proposal to reduce car emissions (and fuel consumption) by 5 percent per year from 2017 to 2025,
and light trucks by 3.5 percent per year. These new standards are scheduled to be adopted by
California in January 2012 and EPA and DOT later in 2012. see Federal Register / Vol. 76, No. 153
/ Tuesday, August 9, 2011 / Proposed Rules.
28
A zero-emissions vehicle, or ZEV, emits no tailpipe emissions from the onboard source of power.
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120 U.S. BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES
In terms of the consumer market, Dr. Sperling explained that his Institute
of Transportation Studies at UC Davis has been studying alternatives fuels, from
methanol to hydrogen, for 25 years. "We have done them all. We have done lots
of studies and worked with lots of car companies," he said.
Although Dr. Sperling said he is optimistic about the future of electric-
drive vehicles, he added a cautionary note. It has taken hybrids 10 years to reach
a market penetration rate of 3 percent "with a technology that is cheaper than
plug-in hybrids and battery electrics, and that doesn't require any change in
consumer behavior nor change in infrastructure," he pointed out. It is important
to keep this conservative reality of markets in mind, he added.
On the other hand, much of the pessimism one hears about electric
vehicles--including at this meeting--is based on consumer assumptions that
may not be valid. The dominant way of thinking of electric vehicles is that they
need super-advanced batteries to make them more like gas-powered vehicles,
with similar driving ranges and longer recharge times, he said. That implies "we
need public recharging infrastructure so people can recharge whenever they get
range anxiety," Dr. Sperling said. "This is the way engineering experts think
about it."
A different way to look at the issue is to study what really motivates
consumers. "Electric vehicles give access to a whole new set of values and
benefits," Dr. Sperling said. "Now you can avoid gas stations. Plus, everyone
who drives EVs loves the driving feel of an electric vehicle." Another appeal,
the Institute's surveys have found, is that "driving an EV means not financing
terrorists, shorthand for not having to import oil. They don't have to support Big
Oil, nor wars in the Middle East. They can support energy independence and
reduce climate change, air pollution, and noise. There are many good things
about electric vehicles that resonate with people."
Research also is finding that "people are remarkably willing to adapt to
changing conditions and constraints if they see some value in doing so," Dr.
Sperling said. He cited research his Institute conducted with BMW to evaluate
consumer experience with Mini E cars. The Institute conducted intense
household interviews of Mini E drivers that "used the vehicles day in and day
out, so they have considerable experience with them," he explained.
The study found that around one-third of Mini E drivers "are perfectly
comfortable with a 100-mile range as long as they have home base charging" he
said, while about half of drivers say this range "kind of pushes them," Dr.
Sperling said. But with minimal adaptations, even the 100-mile range will work
for them."
After using the vehicle for some time, only about one-sixth of Mini E
drivers said the 100-mile range "was really problematic for them," he said. "But
in this case, many were willing to engage in different planning and adaptation to
make it work because they really like the idea of having an electric vehicle."
Many drivers learned to cope with the limitations. In Los Angeles, for
example, drivers began plotting out driving distances on Google to determine
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PROCEEDINGS 121
whether they would be able to make it. They studied whether there were places
to charge along the way, or whether they could swap vehicles with others in the
family for that day. "It turned out that a lot of them said it was fun," he said. "It
was a positive experience. It was a game. It was competitive."
The studies in Los Angeles also found that most Mini E drivers charged
their vehicles at home at night. "Even those who had charging at their work
place didn't really need it," Dr. Sperling said. "They thought they didn't even
want to ask their employers about it and whether they had to pay for it. "They
didn't even want to ask their employers about it and whether they had to pay for
it. They didn't even want to deal with it. What we see are these people having a
sense of independence."
These findings are pertinent to the question of public charging
infrastructure, Dr. Sperling said. The federal government and California are
investing a lot in public charging stations. "The dominate way of thinking is that,
yes, we need lots of public charging stations to remove this range anxiety," he
said. "But what we are finding in all our research and experience is that people
don't use public charging, even when it is available."
Dr. Sperling pointed to the experience of Tokyo. The public power utility
urged people to buy electric cars but generated little consumer response. So it set
up public charging stations. This did indeed generate a response, and people
started buying electric cars. The stations, however, were rarely used. "What is
going on here is that the public charging stations have psychological value, but
people don't use them," he said. "The question is what we do with this
information. There is no business model there because it won't be used very
much." One lesson is that there is no business model, there because drivers don't
use public charging very much." It also means that a minimal number of stations
are needed, at least in the beginning, to address consumer anxiety over the range
of their cars. "Providing public charging does not appear to be critical to
building an electric vehicle industry," he said.
The real challenge is that consumers have no real experience with EVs,
and thus it is difficult to predict consumer behavior, Dr. Sperling explained.
There were a few EVs in the 1990s, such as the EV1 and Rav4 EV. But electric
vehicles have never been mass-produced. The Nissan Leaf and GM Volt won't
be available until December 2010. "So one conclusion you will see is that we
need a lot more research and understanding of consumer behavior, because all
the insights I have presented here, based on many studies over many years, are
tentative and preliminary," Dr. Sperling said.
The first overall conclusion of the Institute's research is that people like
the concept of an electric car, he said. The second as that "the more experience
they have, the more comfortable they become with owning an electric car." The
general pattern is that most people have very positive impressions of the
vehicles before they use them. Their favorable impression then declines the first
weeks of using the vehicles as they experience limited range, but as they gain
more experience, their positive attitudes return. "Some consumers will never
buy the vehicles because of the limited range. They just don't want them," Dr.
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122 U.S. BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES
Sperling said. "But there are a whole lot of them, if they stick with it and if
marketing sticks with it, who will get more interested in owning an electric car."
Research into consumer expectations for electric vehicle batteries also
yielded surprising findings. Dr. Sperling noted that various organizations have
adopted aggressive targets and design goals for range, electricity consumption,
recharge times, and cost. These goals are based on "what experts say we need
for consumers to be willing to buy the vehicles," he said.
The Institute conducted a large national study of what kind of hybrid
vehicles U.S. consumers actually prefer in terms of cost, range, and recharge
time. Most consumers said they were satisfied with batteries that supply only
around 2 kilowatt hours. With that kind of battery, consumers were told, they
would get around 75 miles per gallon for 10 miles in a vehicle that used a blend
of electricity and gasoline. "That is not very much electricity storage," he said.
"But that is what people said they wanted, when they compared how much they
are willing to pay for how much range and how much fuel economy."
Consumers in the study rated fuel economy and reduced cost very highly
as key factors. "It turns out that when you do the analysis of the fuel-economy
performance of a PHEV 10 or PHEV 20 vehicle, with their small batteries, one
gets a large percent of the benefits that one might get from a PHEV 40 with its
much larger battery," Dr. Sperling said. "To the extent this is true, if we think
about electric vehicles and plug-in hybrids in terms of their positive attributes
rather than their problems, and think about what people are willing to pay for,
we conclude that higher-performing batteries are not essential to launch the EV
industry," he said. He noted that the findings are tentative, but that he also
believes they are robust.
The message is that "you can sell the equivalent of a PHEV 10 or 20,
probably fairly easily," Dr. Sperling said. "It looks like this vehicle technology
will get the most market penetration and will provide the most benefit in terms
of fuel reduction and greenhouse gases. And it gets you on the path toward the
bigger battery size of the future and it gets people more comfortable with battery
use."
Dr. Sperling noted that a group at General Motors is promoting ultra-small
electric vehicles--with small batteries. Such vehicles are more likely to succeed
in markets such as China or European cities rather than the U.S., he said. "This
approach should be part of the mix as we learn how to work with attributes of
batteries and electric vehicles and how to make them successful," he said. "I
would suggest that if we continue to follow the path we're on, trying to create an
electric vehicle that is analogous to a gasoline vehicle, we are doomed to
failure."
The GM Volt and Nissan Leaf "are incredibly important in terms of
creating market presence for electric vehicles and early market acceptance," Dr.
Sperling said. "But what I am suggesting is that in order to get a viable mass
market for electric vehicles, there are different ways of thinking about it that
need to be pursued."
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PROCEEDINGS 123
THE INDUSTRY PERSPECTIVE:
TRANSFORMING THE AUTOMOTIVE INDUSTRY
Gary Smyth
General Motors
Mr. Smyth began by noting that he agreed with much of what Dr.
Sperling said. "You really have got to look at what personal transportation in the
future will be," he said. "Is it the same as today? Is the current strategy
sustainable for the future? Clearly, there will be a lot of changes."
As one conducts research for vehicles such as the Volt, "you really begin
to understand that what you need for the mega cities and hyper cities is very
different than what you need in Texas and the Midwest," Mr. Smyth said. "It
really is about a portfolio of solutions."
When one steps back and looks at "what we are really trying to achieve,"
Dr. Smyth said, "the objective becomes energy sustainability." "That energy will
have to come from multiple sources," he said. "And because of the environment,
it has to be low carbon. At the same time, we have to make sure we are
developing economic prosperity while we do all of that. That is the challenge we
have looking forward."
Dr. Smyth said GM will produce a full line of vehicles using different
technologies. "Electrification is an important part of the future, but it is not the
only part," he said. "It is certainly necessary, but not sufficient." Therefore, the
industry must continue to dramatically improve conventional systems. "The
whole portfolio of hybridization and electrification is extremely important to
us." GM also must work on technologies such fuel cells and hydrogen fuel cells,
he said, where companies are getting in position to introduce commercially
viable products by 2015 and 2016. All of these technologies will be important,
"whether you look at it from an environmental perspective or energy
perspective," he said.
Global demographic trends also will reshape the transportation industry.
Today, half of the world's population lives in cities, he noted. That will grow to
more 60 percent by 2030. Also, 80 percent of wealth by that time will be in
cities. "So what types of transportation do we need for these cities? It will be
very different from what we have here in the Midwest," Dr. Smyth said. "So
again, it will be a portfolio of solutions."
Over the past five years, GM has been developing such a portfolio, Dr.
Smyth said. GM is launching several electric vehicles in 2012. The Volt, which
is between a plug-in hybrid and a pure electric vehicle, was to be rolled out in
seven U.S. states in the fall of 2010 and launched nationally over the following
12 to 18 months. GM also is working on fuel cell and hydrogen vehicles. "When
you look at the portfolio, we already have all the options," he said. "It is not
about having niche plays.
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124 U.S. BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES
The big question regarding energy sustainability and CO2 it is not about
niche plays, he said. "It is about how we transform the vehicle fleet. Car
companies such as GM "already have developed the niche plays," he said.
"Range anxiety," however, is a real issue with consumers. Dr. Smyth
said GM learned from its experience with the EV1 electric car program in the
1990s, when range anxiety was a huge issue. "This is an area where we are not
compromising the utility of the vehicle for the customers," he said.
Lithium-ion batteries also are a challenge. Dr. Smyth noted that a current
battery pack producing 16 kilowatt hours of power with a 40-mile range weighs
400 pounds, is six feet tall and six feet six inches long. "That is a lot of mass and
a lot of volume that is required even for that range," he said. GM offers a
100,000-mile warranty on the battery pack.
Regarding charging, Dr. Smyth said GM's view is similar to that of Dr.
Sperling. Most of the time, electric vehicles are at home. "Having the right
infrastructure at home, especially at 240 volts, makes the most sense," he said.
The next priority is charging at work. He agreed that public charging "is of very
limited value."
Electricity is a low-cost source of energy for a vehicle, Dr. Smyth noted.
At $2 per gallon, gasoline costs 7 cents per mile. At $4 per gallon, it costs 13
cents per mile. If one pays 11 cents per kilowatt hour for electricity, by contrast,
the cost is 3 cents per mile.
Another consideration is cost of ownership, Dr. Smyth said. Assume an
average hybrid offers fuel savings of 30 percent to 40 percent. "What does that
actually mean to the rational customer?" he asked. "That is the challenge we
have today." A typical mid-sized family car that gets 35 miles per gallon and is
driven 12,000 miles consumes about 400 gallons of gasoline a year, he said. If
gas costs $3 a gallon, a hybrid saves around $300 in fuel. "Even at $6 a gallon,
that is not a lot," Dr. Smyth said.
It is very hard to make an economic case to consumers by focusing only
on fuel economy, he said, especially when one factors in the $3,000 to $6,000
additional cost of buying a hybrid rather than a conventional car. Dr. Smyth said
he agrees with Dr. Sperling that it is necessary to maximize all of the other
benefits of electric vehicles. "When you look at the actual cost savings, they are
really quite limited," he said. "And that is a very big challenge, especially as you
go through that Valley of Death."
GM has done quite a bit of recent research looking not only at the first
few generations of electric vehicles, but also at Generation Three vehicles
expected to arrive around 2020 and 2025. "You are still looking at very costly
options" versus internal combustion engines, Dr. Smyth said.
GM view the Volt as an important learning experience, Dr. Smyth said.
GM engineers have put the Volt through around 1 million miles of tests so far.
Battery packs have been tested for more than 4 million hours. These tests have
included driving the cars through water troughs. The Volts and batteries "have
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PROCEEDINGS 125
passed with flying colors," he said. "Clearly, this is a full-utility, no-compromise
vehicle."
GM is working on a full range of key components for electrification. In
March 2010, it opened an extensive battery laboratory in Warren and is planning
an $8 million expansion, Dr. Smyth said. GM also is working on electric motors
and power controls and will be exploring fuel cells, he said.
The company collaborates with universities on R&D. "A lot of research
is still required," he said. GM must focus on performance, real-world drive
cycles, and battery life, and other areas, he said. "While we have been working
on internal combustion engines for 100 years, we are still in our infancy with
regard to electrification," he said.
The $2 billion in federal stimulus funding "has done a lot to accelerate
our capability in North America," Dr. Smyth said. GM invested $43 million in a
manufacturing plant in Michigan's Brownstown Township, with the government
providing $106 million, he noted. GM also invested $246 million in motor and
electric-drive facilities. It received $105 million in federal funds for a plant in
White Marsh, Md., to build high volumes of electric motors starting in 2013, he
said.
GM is working on infrastructure needed "to make this comfortable for
customer," Dr. Smyth explained. The company has been working with around
300 of North America's 3,000 utility companies, many of whom have different
standards, he said. It is rolling out charging facilities at seven U.S. sites in 2010
and will go national in 2011. The industry must continue to work with utilities
and the government to understand how to connect to the national grid, he said.
Collaboration will be crucial. The industry has gone through the initial
learning stage of R&D. "The second learning stage is commercialization. It is
the Valley of Death, and it won't be a narrow valley," Dr. Smyth said. "We have
to work with the government and the utility companies to make sure we are
producing the right technologies for our customer. We need the supply chain.
We have to make it affordable to the customer."
Collaboration with universities also will "not just the next generation of
engineers, but the current generation of engineers," Dr. Smyth said. "Again, it's
not about niche products. We have them. It is about transforming the whole
vehicle fleet and how do you do it quickly."
EARLY ADOPTION OF HYBRID VEHICLES
Bill Van Amburg
CALSTART
The truck industry may be a niche market for electric vehicles. But it offers
a good case study of "how we might get things moving" in the U.S., said Mr.
Van Amberg, CALSTART's senior vice president. It shows how advanced
technology can be rolled out by focusing on a market segment in the commercial
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126 U.S. BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES
space, rather than the broad market. The important thing to building a market is
to "get advanced vehicles out there," Mr. Van Amburg said. "You have to spur
demand by supplying product."
The experience of electric trucks also illustrates "the power of public-
private partnerships in filling the gaps," he said. "We are really good at R&D,
but we drop the ball when it comes to getting things into pre-production." The
model used by CALSTART to promote advanced technologies for commercial
vehicles may offer lessons for other market segments, he said.
CALSTART was founded in 1992, during the last big recession, Mr. Van
Amberg explained. California was facing a big brain drain, particularly in
aerospace, defense, and other high tech fields. "We looked at what Michigan is
really looking at: how to hold onto highly skilled talent in key industry segments
and transition them into other fields." California focused on clean, advanced
transportation.
Today, CALSTART has 130 corporate members. One-quarter of
members are in the upper Midwest, Mr. Van Amburg said, because that is the
"manufacturing corridor" of the U.S. and is "where the transition is happening."
The "meat and potatoes" of CALSTART's membership are small and midsized
companies because that group includes most of the technology innovators, he
said.
Many policy makers are unaware that advanced technologies are moving
into the commercial truck market, "an area not thought of as advanced
technology," Mr. Van Amburg said. Hybrids now account for about 40 percent
of the new market for transit busses, he said. "We also are seeing real movement,
a real transition, in the truck world to advanced technologies," he said.
Mr. Van Amburg displayed photos of an array of small and light trucks,
from Coca-Cola and FedEx delivery trucks to semi-trailer trucks. "Every photo
is of a hybrid," he said. "What looks like a pretty conventional truck, is actually
is a hybrid electric, hybrid hydraulic, all-battery electric, or a plug-in electric
truck." Seventy percent of these vehicles are made in early, low-volume
manufacturing, he said. "They aren't prototypes. They are actually moving into
full-scale manufacturing."
This has "really been a sea change" in the truck industry, Mr. Van
Amburg said. In many cases, he said, it is being led by the customer, who sees
the value in getting better fuel economy.
Tougher regulations also are driving truck electrification. On May 21, 2010,
President Obama announced there will be new carbon and fuel-economy
standards for trucks29 that should hit by 2014, Mr. Van Amburg noted. These are
the first such rules for commercial vehicles.
There also are new ozone rules "that are intriguing," he said. The EPA has
announced it will strengthen current ozone rules to meet health standards. The
29
See White House Office of the Secretary, "Presidential Memorandum Regarding Fuel Efficiency
Standards," May 21, 2010 (
PROCEEDINGS 127
rules would drop ozone limits to no more than 0.06 to 0.07 parts of per million
over eight hours of pollutants such as nitrous oxide and will be phased in over
20 years. The current limit is 0.075 parts per million. The EPA will issue final
standards Aug. 31, 2010, and each state must outline plans to meet them by
2013.
CALSTART estimates that hundreds of U.S. counties--perhaps as many as
650--will likely fall into non-compliance due to the tougher EPA standards.
"This is a little under the radar at the moment," Mr. Amburg said. "Certain areas
are really going to get hammered." Southern California is an example. "The
district in Southern California is now looking at this and saying it could be so
bad that they may have to cease fossil fuel combustion in the basin," he said.
While that may be "scare tactics," officials are calling for a renewed push for
zero-emission transportation in Los Angeles, Mr. Van Amburg said.
Southern California is starting to look at electrifying freight corridors.
CALSTART just started a project with the Los Angeles transportation authority
and ports to look at zero-emission freight movement through a 17-mile corridor
of I-710 running from the area's major sea ports--the arrival points of 40
percent of cargo entering the U.S.--to the rail beds.
The Department of Defense also is pushing to improve fuel efficiency, Mr.
Van Amburg noted. The DOD's Quadrenial Defense Review cites climate
change as a global threat for the first time, and has set a target of cutting energy
use at non-combat facilities by 34 percent by 2020. That translates into a 2
percent annual reduction in fuel use, he noted. Most of the impact will be on
medium- and heavy-duty vehicles.
A shift toward high-efficiency trucks will create U.S. jobs, Mr. Van
Amburg predicted. "We often think these high-technologies are only going into
cars, but there but is a huge job and economic savings potential in the medium-
and heavy-duty space as well because that is where all the freight movement is,"
he said. A new report by the Union of Concerned Scientists and CALSTART
predicts 124,000 new jobs and $24 billion in savings to the U.S. economy if
policies support high-efficiency trucks.30 The biggest gains will come in the
Midwest.
Hybrid trucks now on U.S. roads are found in all weight classes. Work on
hybrids for long-haul trucks also is underway, he noted. Truck makers "are
looking at how to solve some of the specific market niches that can use these
technologies, not the whole marketplace," he said. Kenworth, Peterbilt, Navistar,
and Freightliner all have regional haul hybrid tractors and are developing next-
generation electric and hybrid versions.
30
Don Anair and Jamie Hall, "Delivering Jobs: The Economic Cost and Benefits of Improving the
Fuel Economy of Heavy-Duty Trucks," Union of Concerned Scientists and CALSTART, 2010.
(http://www.ucsusa.org/assets/documents/clean_vehicles/The-Economic-Costs-and-Benfits-of-
Improving-the-Fuel-Economy-of-Heavy-Duty-Vehicles.pdf).
128 U.S. BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES
ˇ Oshkosh HEMMT military
heavy transport and support
truck
Series hybrid electric drive
system with ultracap energy
buffer
ˇ Capacity "PHETT"
Plug-in, series hybrid design
ˇ Balqon all-electric port trucks
Up to 40-60 miles range
ˇ Freightliner Custom Chassis
and Enova electric parcel
truck (in testing)
ˇ Smith "Newton" electric truck
(in early production)
ˇ Navistar/Modec electric truck
(in early production Q1 2010)
FIGURE 11 All electric drive trucks emerging.
SOURCE: Bill Van Amburg, Presentation at July 26-27, 2010 National
Academies Symposium on "Building the U.S. Battery Industry for Electric
Drive Vehicles: Progress, Challenges, and Opportunities."
Some companies also are unveiling demonstration all-electric heavy-duty
vehicles. In fact, Mr. Van Amburg said, "the first all-electric vehicle in the
United States by a major manufacturer is coming from the truck industry."
Navistar is testing a unique dual-mode hybrid design that uses an electric drive
for speeds up to 48 miles per hour and a blended mode at higher speeds, Mr.
Van Amburg explained. It is delivering its first vehicles to FedEx. The second
all-electric will be from Freightliner, and the third probably will come from
either GM or Nissan, he said. Vision Industries is demonstrating a fuel cell
hybrid electric drayage truck.
Plug-in trucks also are arriving in specific niches. For example, trucks are
being fitted with extra rechargeable battery packs. This meets a market need for
trucks that drive to works sites and idle while tools are operated. The engine can
be shut off and the tools powered by the battery. "A lot of people are looking at
this in a hybrid configuration and with an energy-storage chassis," Mr. Van
Amburg said. A similar concept is being used in Class 3 trucks,31 which are
popular with fleet operators. Although they are light-weight trucks, they
consume nearly as much fuel as Class A heavy-haul trucks because there are so
many of them, he noted.
31
A Class 3 truck is a light truck with a gross vehicle weight rating of 10,001 to 14,000 pounds.
PROCEEDINGS 129
Hydraulic hybrids are another "intriguing new flavor," Mr. Van Amburg
said. Some vehicles under development use an accumulator to store hydraulic
energy. They will start appearing in late 2010, he said.
What is really needed to push the transition to electrified trucks "is a
coordinated set of standards, policy incentives, and regulations across the whole
continuum to the market," Mr. Van Amburg said. "We have generally done a
good job at the first piece, the research and development. But we have kind of
been dropping the ball moving into the next level of volumes in the market to
not only launch products but also justify the investment by the manufacturers
and suppliers."
For the past decade, TARDEC and CALSTART have explored applying
advanced technologies in military vehicles through the Hybrid Truck Users
Forum (HTUF), which was scheduled to hold its annual conference in Dearborn
in September 2010. The task is to deploy the latest technologies "but without
having to pay the Mil-spec,32 one-off price," Mr. Van Amburg explained. A big
question is "how to get the robust manufacturing industry that has the
capabilities of meeting our demand." The partnership looks at dual-use
opportunities for both the military and commercial vehicle markets, he said.
HTUF has focused on the end-user, Mr. Van Amburg said. "In the past
what happened is that a lot of the technologies coming into the marketplace
were pushed on the end-user rather than pulled by the end-user," he explained.
So HTUF studied applications that could really add value to buyers. It also
interviewed users in early "beachhead" market segments. Working groups began
developing performance standards for military refuse, utility, parcel, regional
heavy-haul, and other trucks. New working groups are addressing military non-
tactical base vehicles.
One next big goal is "to get the military and government to actually start
buying the vehicles and help create that early market," Mr. Van Amburg said.
"There are an awful lot of vehicles in the government fleet. How do we get them
to use this advanced technology?" The military working group hopes to deploy
hybrid vehicles at bases within a year.
The HTUF project began when no major truck makers were involved in
hybrids and there was no demand for fleets, Mr. Van Amburg said. Today, more
than 2,000 such hybrid trucks on the road. Another 2,000 probably will be
added in 2010, he said, and the market appears set to double every year for the
next few years. "We've done it through these forums and working groups,
targeting key application segments, and finding out what the user really is
willing to pay for," he said. "What is the business case they are willing to
accept?"
The team found "tremendous interest" in hybrid trucks "as long as vehicles
are as reliable and useful as vehicles they are replacing," Mr. Van Amburg said.
"We think we have really sped up the introduction into the truck world by two to
32
"Mil-spec" is short for "military standard." The U.S. Department of Defense Standardization sets
standards to achieve interoperability of equipment and meet certain requirements.
130 U.S. BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES
five years, depending on who you talk to." Hybrids are popular because they
burn much less fuel than other vehicles, he said. "It's a big bang-for-the-buck
investment area," he said.
In the initial phase, HTUF worked on building pre-production volumes and
reaching agreements to purchase common vehicles based on common
performance specifications. That information was fed throughout the military in
order to produce "imbedded capabilities in the future hybrid," Mr. Van Amberg
said. One interesting result of the dual-use approach is that most commercial
hybrid trucks now have "silent watch" and "silent mobility" capabilities required
by the military, he noted.
Now HTUF wants to build a sustainable market for hybrid trucks. "One
thing we learned in the continuum to the market was to start with the first gap, to
get people into pre-production volumes," Mr. Van Amburg said. "Let's get out
of this one-off or two-off type of marketplace. Let's get into 20s, 50s, hundreds,
and up to 500." By working with the truck industry, CALSTART learned that
customers need help once they are into early production, he said, "because the
prices are still high at that point."
HUFT has formed a new research center focusing on the next round of
innovation, Mr. Van Amburg said. These areas include better energy storage,
more efficient components, electric steering and braking for trucks, optimized
engines, and integration with alternative fuels.
While the hybrid truck market is a niche compared to autos, the potential is
impressive. Mr. Van Amburg estimated 30 percent of the world truck market
can be "very addressable" for hybrid technologies by 2020. About 5 percent of
regional heavy-haul tractors also can be hybrids. The projected numbers "aren't
anything to stand up and scream about," but are sizeable nonetheless. More
batteries are used in an electric truck than in a car, producing 50 to 100 kilowatt
hours per vehicle.
Hybrids are at a "tipping point," Mr. Van Amburg said. "It is a very
exciting time. They are right on the cusp of success in the marketplace," Mr.
Van Amburg said. Some drop in the cost of energy storage and components can
justify premium prices of hybrid trucks by savings in fuel and brakes in four to
five years, he said. "But there is a chasm to be gotten across here, and we are
working with policymakers to cross that chasm."
California has perhaps the nation's best and most innovative incentive
program to promote electrification of trucks, Mr. Van Amburg said. It is
managed by CALSTART. Rather than giving a tax credit, California pays half
the incremental cost of buying a hybrid compared to a conventional truck. The
subsidy is based on feedback from fleet-owners on what it would take for
hybrids to make economic sense, he said. The state provides $10,000 per vehicle
weighing from 10,001 pounds to 14,000 pounds and up to $35,000 for trucks
weighing more than 33,000 pounds.
PROCEEDINGS 131
21,000+/year hybrids nationally 2015
70,000+/year hybrids nationally 2020
30 Work Trucks
Percentage of New Market
20
10
Class 8 Tractors
5
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Initial HTUF Estimates
FIGURE 12 Introduction/impact framework.
SOURCE: Bill Van Amburg, Presentation at July 26-27, 2010 National
Academies Symposium on "Building the U.S. Battery Industry for Electric
Drive Vehicles: Progress, Challenges, and Opportunities."
The $20 million in the program is nearly used up, Mr. Van Amburg said.
Some 600 trucks were purchased through the program, increasing the number of
hybrids on the road by about 30 percent, he said. "These are the kinds of models
that can actually work," he said. "We really have moved the needle in terms of
advancing that technology."
CALSTART is working with U.S. Sen. Carl Levin on a federal incentive
plan for hybrid trucks. Tax credits would apply when a truck is purchased in
order "to reduce the capital cost directly to the commercial fleet," he said.
Although tax credits don't work too well in the commercial market, Mr. Amburg
said, "we're working with the tools that we have."
Mr. Van Amburg said he also has been working with a cooperative effort
with manufacturers, academia, and government facilitated by TARDEC called
the Advanced Vehicle and Power Initiative. The group is gathering ideas on
"what would move the ball forward in saving fuel in the military and also create
an industry and jobs," he said.
The initiative could be "greatly beneficial to the truck world and be really
helpful to light-duty manufacturing," Mr. Van Amburg said. The AVPI calls for
replacing 8 percent of the federal truck fleet each year with hybrids. "If one
132 U.S. BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES
looks at all government truck fleets and an annual truck turnover rate of 8
percent, this would provide significant assistance to the early market and is
something we would like to see more people talking about," Mr. Van Amburg
said.
In sum, CALSTART's experience with trucks shows that "listening to the
customer and focusing on how we target the key applications that will get the
beachhead launched" was successful, Mr. Van Amburg said. "But over the long
haul, we really need a coordinated plan that synchronizes our investment
strategy, our incentives, and our requirements so that we can move out in a
unified, long-term way." Besides long-term R&D, he said, "we need to target
those gaps of moving into pre-production volumes faster and bringing in the
user to target these key applications."
DISCUSSION
Dr. Sastry of Sakti3 remarked that it was good to hear discussion of the
different sizes of battery packs needed, with some speakers talking about 50
kilowatt hours and others about 2 kilowatt hours. "The reality is that these will
move up and down the scale," she said. Dr. Sastry asked what kind of
infrastructure companies like GM and Ford have "to regularize, test, and control
packs."
Some companies have invested in that capability, "but clearly there is lots
of opportunity for additional test and development capacity for the electric
battery, power machine, and power electronics, Mr. Kruse said.
GM has invested significantly in this area, Dr. Smyth said. "But we are still
in the infancy. We really don't have real-world data yet." Issues such as high-
temperature durability, low-temperature performance, how batteries fail, and
accelerated testing are poorly understood, he said. "We have made a lot of
progress, but a lot more needs to be done."
Mr. Kruse asked his fellow panelists how important they think petroleum
prices are to electric-vehicle adoption rates.
Dr. Sperling said he doesn't believe fuel prices will stay really high or
really low on a sustained basis. "This is probably about where they will be for a
long time, except for spikes," he said. "In the end, it is more of a consumer
perception thing. Yes, a high fuel price has a huge impact on peoples'
psychology. At least in the price range we are talking about, it doesn't affect the
economics much."
Mr. Van Amburg said gas prices may not fundamentally change the
economic considerations of buying a hybrid car, but they make a big difference
in commercial vehicles. "When you run the numbers on hybrids just at current
costs without the platform costs going down, you can make the case for a three-
year turnaround at $4 and $5 easily," he said. "The two biggest variables in
commercial vehicles are the up-front costs of the vehicle and the fuel price. With
PROCEEDINGS 133
these guys, it's their work tool. They know what they use in fuel, while most
consumers really don't."
The case for electric vehicles can't be all about fuel, Dr. Smyth said. "If the
price of fuel were high, certainly that would make it easy for us," he said. "But
we have to go through this transformation, and we don't have a choice." We're
pulling 85 million barrels of oil out of the ground every day." Oil in 2030 is
projected to cost $105 or $110 a barrel, "and that is even with the current
recession," he said.
The U.S. must diversify from petroleum, Dr. Smyth said. Currently, it is
more 95 percent dependent on oil. "We must come up with low-carbon
alternatives." Cellulose ethanol offers potential carbon savings of around 50
percent over petroleum with advanced internal combustion engines. "There
aren't any 80 percent reductions out there," he said. "We really have to look at
developing alternatives and developing them rapidly if we want to drive down
CO2. We have to stay on this path, and that is why we have to be working with
the government to make sure this is a success."
Dr. Good asked if anyone has made a serious attempt to model the entire
system. "Let's assume you can get 30 percent electric vehicles in 20 years," she
said. "Does anyone have a model of what the grid would have to look like?
Mr. Van Amburg said he has seen good models developed by utilities. "If
you are shifting your charging to night-time, and you are using off-peak energy
during that trough, it doesn't have that much impact on the overall production of
the grid," he said. "The biggest issue is deploying individual vehicles on the grid
because of the potential draw you are getting if you had a whole bunch of
electric vehicles in one neighborhood. But based on the models I've seen, it
wouldn't necessary make us get into a lot more production of electricity," he
said.
Electric vehicle penetration of 5 percent is a very different problem than 25
percent, Dr. Good noted. "I don't think people have really run the right models
yet. Even if I run off peak, I have to use more fuel to run the electricity. If I look
around the country today, there are areas that have some extra capacity. But
there isn't that much extra capacity running loose. I don't know that we have
actually made a good model, and it seems we ought to do that fairly soon so we
have answers to people about how we are going to provide that electricity. If
you are trying to rev this up to 25 percent in the next 10 years, you had better get
on that problem now."
It will be a very long time before 25 percent of cars are electric, simply
because of the rate at which vehicles in use turn over, Dr. Sperling replied.
"That is a long, long way off, and we do have models on that."
A more critical issue is the effect on local transformers, he said. "You have
that neighborhood clustering effect that can be very disruptive," Dr. Sperling
said.
