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140 MEETING GLOBAL CHALLENGES
Panel VIII
Building Electric Vehicle Industries
Moderator:
Andreas Möller
Head of the Division of Policy and Social Consulting
acatech, the German Academy of Science and Engineering
Dr. Möller welcomed the participants to the panel on electromobility
and the electric vehicle industry. Electromobility, he said, is “an important
cornerstone of sustainable mobility, not only in the United States and Germany,
but world-wide.” A week earlier, the federal government of Germany had
release its official two-year electromobility budget of one billion Euros, mainly
for research, battery development, and lightweight construction technologies.
“The government,” he said, “wants Germany to become not only an
elite market, but an elite provider in electromobility worldwide. “This is an
ambitious goal in a highly competitive international field with new, powerful
players. An interesting point is that the government decided not to stimulate the
market with buyers’ incentives, like France, even there is a gap in total cost of
ownership” (TCO). The German aim was to have one million cars, including
both plug-in hybrids and pure electric cars, on the roads by 2020. He said that
this goal would be difficult to reach without subsidies.
In the United States, Dr. Möller said, electromobility is also an
important topic, with the Obama administration planning to invest more than
$100 billion in new energy technologies, about $2 billion of that in
electromobility—and amount similar to the budget of the Chinese government.
He introduced the two speakers, Edwin Owens and Dirk Arnold, who
would address the topic for the United States and Germany.
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U.S. BATTERY INITIATIVE FOR ELECTRIC DRIVE VEHICLES
Ed Owens
Supervisory General Engineer for Vehicle Technologies
U.S. Department of Energy
Mr. Owens said he would discuss the battery initiative at the U.S.
Department of Energy (DoE) for electric drive vehicles, and refer as well to
other programs within DoE and other agencies that encourage development of
complementary technologies, such as motors and power electronics.
The DoE had been investing in battery technology for more than 30
years, he said, with improved technology and rising funding for 20 years. The
budget for 2010 was $76 million; the request for 2011 was $96 million, and the
request for 2012 was $140 million. The goal for 2014 was to reduce the
production cost of a plug-in electric vehicle (PHEV) battery to $300/kilowatt-
hour (kWh), 70 percent below current cost.
Mr. Owens suggested that the DoE’s two decades of investment may be
responsible for the current hybrid vehicle industry. Until this year, he said, all
the hybrids on the roads of the United States contained IP developed and owned
by the DoE. “We’ve continued to invest in the newer lithium-ion technology,”
he said, “and we see that technology as well reaching the marketplace. So
between the nickel metal hydride batteries that came out of DoE funding and the
lithium-ion technology, we see spillovers from our R&D programs directly into
the marketplace.”
The DoE battery technology program extends from basic research on
fundamental electrochemistry through battery cell development, battery pack
development, and, more recently, full-system development and support for
commercialization. “This range of program and sustained support are reasons
it’s been so effective over the years,” he said.
The research programs are driven by specific performance goals for
batteries. Depending on whether the goal is a conventional hybrid; plug-in
electric vehicle (PEV) with some form of range extension, like the Chevy Volt;
or an all-electric vehicle, the requirements for the batteries—and therefore the
technology—are different. “I don’t mean you have to meet all these goals to
commercialize the batteries,” he said, “because some of them in vehicles today
don’t meet the goals. But having a set of goals provides a way to measure
achievement and focus development—not only within the research community,
but also for the potential battery manufacturers. Then they understand where
they need to go.”
Battery price is a critical issue for successful electric drive vehicles, he
said, and it is too high. A few years ago batteries for hybrids cost $1,000 to
$1,200 a kWh; today the price is about $600 to $700 per kWh. The DoE’s short-
term goal is to reach $300 by 2014, and ultimately $150. “Just large-scale
production in large plants at higher volumes will not bring the cost to these
levels,” he said. “What’s needed is improved technology with less but higher-
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142 MEETING GLOBAL CHALLENGES
performing materials. We need higher-performing basic chemistry that allows
the battery size to shrink and the costs to go down.”
The American Reinvestment and Recovery Act (ARRA), Mr. Owens
said, brought a unique opportunity to create a battery manufacturing industry in
the United States. The DoE invested $2 billion in helping create and support it,
and has invested another $750 million in transportation, electrification, and other
measures to encourage an infrastructure for all-electric and plug-in hybrid
electric vehicles. The investments have been made across the battery supply
chain—from the basic materials through cell manufacturers—to encourage an
industry that before ARRA did not exist in the United States. Prior to the ARRA
investments, the United States had about 3 percent of the lithium-ion battery
manufacturing capacity in the world. These investments and corresponding
investments by the manufacturers themselves are likely to bring enough capacity
to meet all U.S. demand through at least 2015, he said. An executive of a battery
company had told him that new battery plants would have been built without
U.S. investment, but they probably would have been built in Korea. “By using
this unique and hopefully once-in-a-lifetime investment, we have seen the
creation of what we believe is going to be a stable U.S. manufacturing
capability.”
Mr. Owens turned to battery cost and production anticipated to 2014.
Both the ARRA and the Advanced Technology Vehicle Manufacturing Loan
Program have been used to support development of battery production capacity
in the United States. Some plants are already in production, and more are
scheduled to come on line. Estimated capacity by 2015 is about 10 million kWh
of automotive-scale lithium-ion batteries. “That compares well with the
production capacities that have been announced for manufacturers selling to the
U.S. automotive industry,” he said. “These are cumulative numbers of
announced capacity before GM announced that they were increasing the
capacity of the Volt production facilities. Even at that time it looked like we had
enough production capacity to reach 1.2 million vehicles on U.S. roads by
2015.”
He emphasized that “this 1.2 million vehicles is a milestone, not an end
objective;” the number represents only 0.4 percent of the U.S. vehicle fleet. “So
even at this rate we’re just getting our toe in the water. But it’s interesting to
note that production capacity and demand for these vehicles pretty well
matches.”
The ARRA has also allowed DoE to invest in other areas of electric
drive technology—not only in motors and power electronics, but also in
industrial vehicles, classes 3 through 7. These small trucks typically operate in
urban areas, and are “an interesting target for early adoption of leasing PEV and
electric drive.” An advantage, he said, is that it is easier to sell trucks on the
basis of life-cycle cost than initial purchase price.
The ARRA has also helped develop infrastructure to support plug-in
and electric vehicles. The country is in the process of its largest deployment of
electric-drive vehicles and charging infrastructure, deploying 13,000 electric-
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drive vehicles and 22,000 charge points associated with those vehicles. One
objective is to understand how individual consumers use their electric vehicles
and how they charge them in order to encourage more adoption.
Part of the DoE effort is to develop codes and standards needed to
smooth the introduction of new vehicles and harmonize them with partners in
Europe and Asia. A goal is the ability to develop vehicles in one place that can
be easily transferred or sold in another.
In summary, Mr. Owens said that DoE had been supporting battery
development for several decades, and as these batteries have improved, DoE and
other agencies had increased investments to support commercialization,
including an increased focus on the charging infrastructure and other efforts to
remove barriers. He attributed part of DoE’s success to its commitment to a
long-term research program that recognizes improvement and continues to
support companies.
GERMAN DEVELOPMENTS IN ELECTRIC VEHICLES
Dirk Arnold
Deputy Head of Division
Environmental Innovation and Electric Mobility
Federal Ministry of Economics and Technology (BMWi)
Mr. Arnold said that the symposium was well-timed at a peak of
activity for electromobility. The previous week, a report from the National
Platform of Electric Mobility was presented to Chancellor Merkel, followed two
days later by a government response to the report.
Electromobiity, he said, was closely related to the Integrated Energy
Climate Program, initiated in 2008 by four collaborating ministries. In 2009 the
government issued a stimulus package for R&D in electric vehicles, and would
evaluate the results. In August 2009 a National Development Plan for
Electromobility was released, with goals for 2015 and 2020. Also, the federal
government had created a Joint Unit for Electromobility, and in May 2010
established a National Platform of Electromobility. His division was able to join
about 150 people from industry and research to evaluate the platform’s goals in
developing electromobility in Germany.
Mr. Arnold summarized the activities assigned to participating
ministries. The Ministry of Economics and Technology was providing grid
integration and performing research in energy, IT, and transport systems,
including drive components and power train. The Ministry of Transport was
using its funding to stimulate eight model regions across Germany and create a
battery test center. The Ministry of Environment was carrying out fleet tests,
recycling lithium-ion traction batteries, and launching a commercial program for
hybrid buses. Finally, the Ministry of Research focused on development of
production technologies, factory systems for lithium-ion cells, and battery
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144 MEETING GLOBAL CHALLENGES
systems. It also maintained a network of excellence in systematic research and
developed research centers in electrochemistry.
The government platform for electromobiity had several key
objectives:
• Contribute to climate protection, grid stability, and extended use of
renewable energy.
• Better understand grid stability, especially in the wake of the events of
Fukushima, and prepare to scale down nuclear energy.
• Support market leadership of German automotive and supply
industries.
• Maintain competitiveness through innovation along the new value
chain.
• Aim to be a lead supplier for EM for the automotive industry.
• Facilitate new urban mobility and road transport concepts.
• Raise public awareness and encourage EM acceptance.
A central milestone for the effort is to have one million EVs and
PHEVs on Germany’s roads by 2020. In order to reach that milestone, the
government had established an action plan with the following contents:
• Deploy additional R&D subsidies of 1 billion Euros from the present
until 2013. This would represent a doubling of the previous support,
from 2009 to 2011, of 500 million Euros.
• Award tax exemptions for EVs.
• Provide a framework for EM in the form of university training and road
traffic laws.
• Designate a small number of regions as showcases for EV use.
• Employ tax money in the form of R&D rather than consumer
incentives.
• Employ competition as the best incentive for innovation.
Among the key challenges for R&D, he said, was energy storage.
Essential goals here include lowering battery costs, enhancing energy density,
extending battery life cycle, and improving safety. For vehicle technology, goals
include development and improvement of electric components and
electrification of ancillary units. A final goal is grid integration, including
construction of charging facilities and introduction of IT technologies, time-
sensitive charging, and feeding charge back to the grid.
The National Platform included several framework conditions,
beginning with education and skills, battery recycling, standardization of plugs
and other components, and a regulatory framework by which to identify
appropriate locations for facilities. It also aimed to strengthen markets by
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developing business cases, accelerating market penetration; supporting market
preparation, and modeling EM showcases in various regions of the country.
Mr. Arnold emphasized that while the platform represented important
perspective, “we can’t do anything without industry. We need them to focus the
whole effort.”
He concluded on a note of strength—manufacturing the automobiles
themselves. “Part of our job is development of production technologies,” he
said. “That’s something where Germany was always very strong—creating the
machines, creating the cars.”
DISCUSSION
A questioner asked whether it would not be faster to import batteries
rather than develop them at home so as to move electric vehicles to market more
quickly.
Mr. Owens said that battery R&D programs had been “critical in getting us to
where we are today, but they’re not sufficient. You can develop the best
technology in the world, and if you can’t make it into real batteries, and those
batteries into packs that service vehicles, you’ll never get the vehicles on the
road. That includes the safety, the standards, and the charging infrastructure.
Our perspective is you have to support the battery and vehicle development from
the fundamentals of the science all the way through to production.”
Another participant asked how long the technology might be
subsidized.
Mr. Owens said that the U.S. energy program supported five areas: active
research programs in electric drive, biofuels, improved energy efficiency, fuel
cells and hydrogen, and natural gas. The DoE program focused on a variety of
areas that provide tools for industry. “I think that electric vehicles are getting a
lot of emphasis today because they’re successful. I don’t see the DoE’s electric
program as picking a particular technology. Rather, this is one of the ones we’re
working on, and the market seems to prefer it, so we’re going to try to help it
along.” He said the Congress was the only body that could determine how long
the government would subsidize EV research.
Mr. Arnold said that the German government would provide subsidies
for as short a period as possible. He added that the situation is complicated
because of climate goals, not only for Europe but globally. “If we think that only
the consumer should pay more money for expensive cars that can reach those
goals, we need to help with batteries that are efficient enough, of course using an
open technology.”
Dr. Prabhakar said that the premium to buy an electric vehicle is about
$10,000, but that the total cost of ownership (TCO) is probably lower. “What is
the payoff period at the current premium?” she asked. Mr. Owens said that as
gas prices rise, the payoff period shortens. But by modeling consumer use of
hybrids and PHEV, even before a recent rise in fuel prices, “it appeared that in
total life cycle costs, hybrids were already economically viable in the United
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146 MEETING GLOBAL CHALLENGES
States. The difficulty is that consumers tend to focus on first cost.” One reason
for DoE’s interest in class 3-8 industrial vehicles is that they are easier to sell on
a life cycle basis. Those sales would increase production of batteries, bring
down costs, and increase manufacturing expertise. “So anything we can do to
stimulate demand for Li-ion battery technology will make the cost situation
better.”
Mr. Arnold said the TCO problem can be reduced by three other
factors. First, battery cost will drop as batteries become more effective. Second,
faster recharging will help consumer acceptance. Third, grid integration of the
battery can bring reimbursement for unused electricity.
A questioner asked about disposal at the end of battery life. Mr.
Owens said the DoE believes that batteries will be easily recycled, and there is
also much interest in reuse. Current knowledge is limited, he said, but lifetimes
are estimated at well over 10 years, “and probably longer.”
Mr. Arnold agreed, and said that in Germany, the Ministry of
Environmental Protection was developing recycling possibilities and on second
uses of batteries before recycling. One important focus is the use of older
batteries to help stabilize the grid by storing and releasing energy as needed.
