Oil Price Soars – Electric Car Sales Zoom

Oil Price Soars – Electric Car Sales Zoom

Egypt CelebratesBy John Addison (2/15/11)

People dance in the streets of Cairo. A dictator has fallen. For a few months, Constitutional rights are suspended, but a new election is promised. In recent weeks, a world dependent on oil has watched to see if a cascade of Mideast unrest would stop the flow of petroleum necessary for gasoline, diesel, and jet fuel.

Barron’s interviewed long-time oil analyst, Charles Maxwell, to gain insight into the future of petroleum. The article was titled “Whatever Happens in Egypt, Oil Will Hit $300 by 2020.”  Maxwell based his forecast on long-term supply and demand forces. Oil production is peaking; demand is not. From today’s $85-plus per barrel, Maxwell forecasts $95 by 2012, $115 by 2013, $140 by 2014, $180 by 2015, and $300 by 2020.

The United States is the world’s largest consumer of oil. Over 95 percent of our transportation depends on oil. Over 80 percent of our U.S. transportation spending makes us more dependent with taxpayer money focused on widening highways and airports. Shifting more dollars to electric transit connected with electric high-speed rail would greatly reduce our oil dependency. Yet the same members of Congress that encourage subsidies to oil companies block improved transportation. If some members of the U.S. Congress get their way, they will either shutdown the EPA, or they will shutdown our government by refusing the increase the debt ceiling.

It will be the American people, not Congress, that free us from oil dependency. We survived oil prices peaking at $147 per barrel in July 2008. It is argued that the shock waves are still rippling through our economy. When consumers are stretched, the demand for oil is elastic. Vehicle miles traveled have peaked. Americans reduced their car ownership by 3.5 million vehicles. We are at record use of flexible work, car-pooling, car sharing, and transit use. More fuel-efficient cars are bought. The success of hybrid-electric cars is paving the way for electric cars.

Fortunately, as oil prices rise, lithium battery prices fall. Ford forecasts that by 2020, ten to 25 percent of its car sales will include lithium batteries and electric motors. Ten to 25 percent will be hybrid, plug-in hybrid, and electric cars. Next year, Ford may be the first car company to sell 100,000 lithium battery packs as it brings out new hybrids, plug-in hybrids, and electrics all using lithium battery packs. Or the first to sell 100,000 may be Nissan or General Motors. As demand increases, better chemistry and volume manufacturing have lowered the price of automotive lithium battery packs from $1,000 per kilowatt-hour to $500.

Prospects for electric vehicles are boosted by efficiency. A gasoline engine drive system is only about 15 percent efficient. Using natural gas a bit less. Using E85 ethanol, even less. A diesel engine drive is often about 20 percent efficient. A hybrid drive system can be 25 or 30 percent efficient. An electric drive, 80 percent efficient.

Although electric cars currently are more expensive than the average gasoline car, that may change in this decade. Many automakers project that when battery packs fall to $250 per kilowatt-hour electric cars will be less expensive than gasoline cars to own and operate. The precise tipping point depends on the price of oil. If Mr. Maxwell’s forecast is correct, EVs will be the winner in this decade.

Keep your eye on the ratio of battery pack kW price to gasoline price. The current ratio is around 500/3 = 166:1. In two years, it might be $400 kW packs and $4 gasoline at the pump for a 400/4 =100:1 ratio. $250 packs and $5 gasoline is 250/5 = 50:1 ratio. Be on the watch for a 50:1 ratio as the tipping point where electric car sales begin to dominate.

Breakthrough innovation may also accelerate the tipping point. Next generation biofuels could fuel hybrids. More efficient inductive electric motors could be free of rare earths like neodymium and dysprosium. Electric cars could have their range extended with fuel cells, solid-state batteries, ultracaps, or new battery chemistries.

As oil becomes more challenging to extract from troubled regions, deep oceans, and frozen tar sands, we see increased use of natural gas power plants, renewable energy, and efficient hybrid and electric vehicles. Welcome to our electric future.

Ford Returns to Profitability with Improved Mileage

Ford Returns to Profitability with Improved Mileage

Ford 2011 Focus EV

Ford 2011 Focus EV

By John Addison (7/23/09). Ford has returned to profitability, benefiting from increased market share which is the likely result of improved mileage. Ford earned almost $2.4 billion for the quarter, but it was the result of a large one-time gain associated with the debt reduction actions completed in April. The pre-tax operating losses were $424 million; an improvement of $609 million from year-ago results.

Ford has gained U.S. market share for January through June 2009. Wards Six month market share:

GM 19.8%
Toyota 16.1%
Ford 15.9%
Honda 11.1%
Chrysler 9.8%

Ford also gained share in Europe and Asia, boosted by the fuel efficient Fiesta.

In contrast with GM and Chrysler, Ford is the only U.S.-headquartered manufacturer with vehicles qualifying for the Clean Fleet Report Cars with the Lowest Greenhouse Gas Emissions. Both the Ford Fusion Hybrid and Ford Escape Hybrid are in the top 10 list.

Ford is on target to meeting CAFÉ with average fuel economy in 2010 being 20 % better than 2005.

The Focus will be increasingly important to Ford’s success as it lowers manufacturing cost with a global version and when it offers an electric version in 2011.

In 2012, the Ford Escape Hybrid, already the most fuel efficient SUV, will get a lot more efficient by also being available as a plug-in hybrid. The PHEV Escape Hybrid is already being tested in a number of fleets. By 2012, Ford will offer multiple

EcoBoost engines will be delivered in over 1 million vehicles globally, delivering better mileage through turbocharging and direct fuel injection.

Ford could have greater market share than GM by 2012, unless GM transforms its entrenched culture centered on large heavy vehicles as the only way to generate adequate profit margins. In the next few years, Ford will face increased competition with Toyota and Honda both offering hybrids for less than $20,000. Ford will also face intense EV competition with Nissan, BYD, and a number of emerging electric vehicle makers.

In the future, oil price increases and oil shocks will deliver market share to makers who minimize consumption of petroleum fuels. Winners will build the best hybrids, plug-in hybrids, and electric vehicles. Ford is investing nearly $14 billion in the U.S. over the next seven years on advanced technology vehicles, including $5.9 billion in loans from the U.S. Department of Energy for advanced fuel-saving vehicles.

“In 10 years, 12 years, you are going to see a major portion of our portfolio move to electric vehicles,” Ford CEO Alan Mulally stated earlier this year. Now Ford is executing its electrification strategy.

Ford Q2 Earnings Presentation

Earnings Transcript

New Cars that Already Meet 2016 Fuel Economy Standards

New Cars that Already Meet 2016 Fuel Economy Standards

 

President Obama Announces 2016 CAFE Standards

By John Addison (updated 9/7/10).

President Barack Obama announced that automakers must meet U.S. fuel-economy standards that require new cars and light trucks to average 35.5 miles per gallon by 2016. Several 2010 cars already beat 35.5 mpg such as the Ford Fusion Hybrid, Mercury Milan Hybrid, Toyota Prius, Honda Insight, Honda Civic Hybrid, and the Mercedes Smart Fortwo. In 2011, many new hybrids, plug-in hybrids, and electric cars will be sold that exceed the 2016 standards.

In Europe, over 100 models can be purchased that meet the 2016 standards, thanks to the popularity of cars that are smaller, lighter weight, and often use efficient turbo diesel engines.

Over the next three years, dozens of exciting cars will be introduced in the United States. Here are some offerings that we are likely to see in the next one to three years from major auto makers.

Ford will extend its current hybrid success with added models. During my recent test-drive of several vehicles that meet the 2016 requirement the midsized Ford Fusion Hybrid demonstrates that you can enjoy fuel economy in a larger car with comfort and safety. The Ford Fusion Hybrid has an EPA certified rating of 41 mpg in the city and 36 mpg on the highway. The car can be driven up to 47 mph in electric mode with no gasoline being consumed. Ford will start selling pure battery electric vehicles next year.

In discussing the new standards, Ford CEO Alan Mulally stated, “We are pleased President Obama is taking decisive and positive action as we work together toward one national standard for vehicle fuel economy and greenhouse gas emissions that will benefit the environment and the economy.”

General Motors plans to be the leader in plug-in hybrids starting with the Chevy Volt. It has a major opportunity to extend its voltage architecture to SUVs and trucks by 2016.

There are almost 40,000 Chrysler GEM electric vehicles in use today. The GEM 25 mph speed limits them to only being popular in fleets, university towns, and retirement communities.  Chrysler’s new major stockholder will bring in exciting smaller cars such as the Fiat 500 and Fiat 500 Electric.

Toyota will expand on the success of the Prius with more new hybrids. Since 2002, I have been driving a Prius that has averaged 41 mpg in real world driving that has included climbing hills with bikes on a roof rack and driving through snow with skis on the roof rack. The Prius will also be made available as a plug-in hybrid – hundreds of these PHEVs are now being tested by fleets. The modestly priced Yaris, which gets 32 mpg, will also be offered as a hybrid that delivers over 40 mpg.

Honda is likely to be the first maker to meet 2016 CAFÉ requirements, building on its historical leadership in fuel economy. Honda now offers the Civic Hybrid and the Insight hybrid. In the future, Honda will offer a Fit Hybrid, a plug-in hybrid, and a battery-electric car.

Nissan’s Altima Hybrid delivers an impressive 34 mpg. Beyond hybrids, Nissan is determined to be the leader in battery electric vehicles and deliver over 20,000 of the Nissan LEAF in 2011. Clean Fleet Report EV Test Drive

Meeting the CAFÉ standards by 2016 will not be easy for all of the automakers, but they will make it.  Historically, CAFE standards have not aligned with the EPA fuel economy determinations used in this article. For better and worse, flexfuel vehicles get artificially high numbers, making it easier for GM, Ford, and Chrysler to meet CAFE targets. Plug-in hybrid and electric car ratings need to be finalized.

Trends to more efficient drive systems are a certainty. With oil prices over double the lows of 2009, these new vehicles bring important relief to every driver who wants to save at the pump.

Ford Partners to Commercialize Electric Vehicles

Ford Partners to Commercialize Electric Vehicles

Ford Escape PHEV Uses 120V

Ford Escape PHEV Uses 120V

By John Addison. Ford will introduce a battery-only commercial van in 2010, followed by a passenger car built on the same technology in 2011, and exciting plug-in vehicles by 2012. To accelerate commercialization, Ford will partner with leaders in drive systems, lithium batteries, specialty electric vehicles, and electric utilities.

Ford will build on its existing success with the Ford Escape Hybrid, the most fuel-efficient SUV on the market, and the Ford Fusion Hybrid, an impressive mid-sized sedan that ranks in the Clean Fleet Report’s Top 10 Sedans.

Last summer, I met with Ford’s Nancy Gioia, Director, Sustainable Mobility Technologies and Hybrid Vehicle Programs, and Greg Frenette, Chief engineer for research and advanced technologies. They discussed Ford’s commitment to continued improvements in fuel economy with gas turbo direct injection (GTDI), lighter vehicle weight without any sacrifice in safety, transmission efficiency, and increased use of electric drive systems. Electric vehicles and plug-in hybrids are definitely in Ford’s future. In fact, Nancy Gioia, has been driving her own Ford Escape Plug-in Hybrid.

The Ford Escape Plug-in Hybrid has been successfully in a number of fleet and research environments. One is Boulder, Colorado, which is becoming Smart Grid City. Working with a major utility, Xcel Energy, residents hope to lower their utility bills, improve energy efficiency, and develop city-wide support for electric vehicles and plug-in hybrids.

University of Colorado Chancellor Bud Peterson and his wife, Val, were the first to let Xcel transform their home to be part of Smart Grid City. Xcel put solar panels on the house, gave them a new smart meter for vehicle charging, and a Ford Escape Hybrid which is converted to have vehicle-to-grid capability. Vehicle-to-grid (V2G) technology is a bi-directional electric grid interface that allows an electric vehicle to take energy from the grid or put it back on the grid. When fully charged, their car plug-in hybrid batteries have enough power to keep their home running for days by using V2G.

Seven more electric utility providers are joining the Ford and Electric Power Research Institute to expand real world testing with Ford Escape PHEVs. Utility partnerships and industry standards will be critical to the expansion of a smart-charging infrastructure and to the long-term viability of V2G.

Ford will have Johnson Controls-Saft develop an advanced lithium-ion battery system to power Ford’s first commercial plug-in hybrid (PHEV). The lithium-ion battery system that Johnson Controls-Saft is designing and manufacturing for Ford includes cells, mechanical, electrical, electronic, and thermal components. Initially the cells will be produced at the supplier’s production facility in France, but the system will be assembled in the United States. The five-year supply agreement includes delivery for committed production in 2012 with a target of at least 5,000 units per year.

Commercial sales of the Ford Escape PHEV are planned for 2012. A fully charged Ford Escape PHEV operates in two modes, electric drive and blended electric/engine drive. It uses common household current (120 volts) for charging, with a full charge of the lithium-ion battery completed within 6 to 8 hours. When driven on surface streets for the first 30 miles following a full charge, the Ford Escape PHEV can achieve up to 120 mpg. This 30-mile range fits the average daily needs of most U.S. drivers.

In 2010, Ford also plans to begin sales of zero-emission battery-electric vans. To speed time to market, Ford will be collaborating with Tanfield to offer battery-electric versions of the Ford Transit and Transit Connect commercial vehicles for fleet customers in the UK and European markets. Tanfield’s Smith has over 100 electric trucks and delivery vans in service with customers today. More details may be announced at the Chicago Auto Show this month.

Battery-electric vans are well suited for many applications where ranges are limited and frequent stopping provides for regenerative braking. USPS has used electric postal vehicles for years. FedEx Express has ordered 10 Modec electric commercial vehicles for use in the United Kingdom.

At the Detroit Auto Show, Ford was showing a new battery-electric sedan developed jointly with Magna International with a 23kWh lithium battery pack. Commercial sales are planned for 2011 for a vehicle similar in size to the Ford Focus. Ford will compete with hundreds of battery-electric vehicle competitors including smaller specialty vehicle makers and Nissan, which is determined to be the early volume leader in freeway-speed electric vehicles. Ford will also be competiting with the plug-in Prius and Chevy Volt.

Given the success of Ford and Mercury hybrids, Ford is positioned to do well as it expands into these plug-in hybrid and battery-electric offerings. Success will lead to success, with larger and smaller Ford EVs being likely past 2012.

John Addison publishes the Clean Fleet Report. His new book – Save Gas, Save the Planet – will be available in paperback and ebook on March 25 at Amazon and other booksellers.