By 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.
By John Addison (10/26/10)
You may be reading this article thanks to the lithium battery in your notebook computer, smartphone, or other mobile device. Demand for lithium is forecasted to double in this decade thanks to a wide range of applications for this metal that is half the weight of water: materials, glass, pharmaceuticals, mobile electronics, power tools, hybrid cars, and electric cars.
Currently, electric cars cost more to purchase than many gasoline-powered cars, but less to fuel. Electric charging is equivalent to fueling with gasoline at 75 cents per gallon in many situations. Nighttime charge rates are even lower.
In 2012, Ford will deliver about 100,000 lithium battery packs in its electric vehicles, new plug-in hybrid, and in all hybrids. Nissan will bring on-line a new battery plant in Tennessee that can make 200,000 lithium battery packs annually for its LEAF and hybrids. These volumes, improved battery chemistry, and streamlined supply chains will drive down the cost of lithium batteries. Automotive lithium battery packs currently cost about $700 per kilowatt-hour. By the end of the decade, automakers are optimistic that they will lower the cost to $250/kWh, at which point electric cars will be less expensive to buy than most gasoline cars.
What do the financial markets make of lithium? To find out, I interviewed Bruno del Ama, CEO of Global X Funds. His exchange-traded fund, Global X Lithium ETF (NYSE: LIT), was launched on July 23, 2010, at 16. It has already soared to 20. For some investors, lithium is the new gold. 10 of the fund holdings are in lithium mining and processing companies; 10 in lithium battery makers.
The fund is dominated with large mining firms such as Sociedad Quimica y Minera de Chile, FMC Corporation, and Rockwood Holdings. The fund is not a dream for environmentally and socially conscience investors. These companies mine a range of metals, using energy intensive processes, chemicals, and put miners in harm’s way.
The fund’s largest lithium battery company holdings include Saft, Ener1, ABT, GS Yuasa, and A123. Saft in a joint venture (JV) with Johnson Controls supplies Ford for the Transit Connect Electric and Mercedes hybrids. GS Yuasa supplies the current Japanese EV leader, Mitsubishi; GS Yuasa is well positioned to be Honda’s supplier for new electric and plug-in hybrids. Ener1 is betting on the Think. A123 is supplying Fisker and non-automotive applications.
The fund does not include the battery companies most successful in lithium: NEC, Panasonic, Samsung, and LG Chem. These diversified giants are excluded because their lithium battery business is less than the 15 percent minimum to be included in LIT. NEC is in the AESC joint venture with Nissan. Panasonic supplies Toyota and Tesla. Samsung is in a JV with Bosch to supply makers such as BMW. LG Chem’s Compact Power is supplying lithium batteries for the Chevrolet Volt and the Ford Electric.
Scientific American reports a 500-year supply of lithium, compared with only decades of available cooper. Demand for lithium will increase as we expand from devices that only need one battery cell, to notebook PCs needing the equivalent of 8, to hybrid cars that use the equivalent of 125, to the Nissan LEAF, which uses the equivalent of 3,000. Reuters Lithium Facts
It would take 60 million cars to use the current annual production of lithium. Although there is plenty of lithium, prices will increase to keep up with the growing demand. Since a typical electric car battery pack only uses 4 pounds of lithium, the price will have little impact on the total battery cost.
There is no guarantee that today’s lithium ion batteries will be the leaders in future decades. Labs to start-ups are working on lithium air, zinc air, fuel cells, ultracapacitors, and hybrid energy storage. It is challenging to overcome lithium ion’s cost and scale advantages. More energy can be stored in an ounce of this metal than any practical metal alternative.
By 2020, the California Energy Commission forecasts 1.5 million plug-in cars on California roads. Clean Fleet Report forecasts 10 million for the USA. Cars, mobile electronics, and many applications will fuel the demand for the lightest of metals and create growth opportunities for the leading battery suppliers.
Disclosure: author owns shares of LIT.
By John Addison (7/21/11).
Popular Smart Car with Tesla Lithium Batteries
The Smart Fortwo is popular with city drivers that need to avoid $25 daily parking fees by fitting in spots to small for others. In 2010, 250 battery electric Smart EDs will be put on the streets of U.S. cities. Early in 2012, Smart plans to make over 10,000 Smart Electric Drives for sales globally and be a major player in urban electric cars. The new Smart Electrics deliver an 80-mile range per charge with a 16.5kWh lithium ion battery pack that consists of 18,650 Tesla format cells. Daimler owns Smart, Mercedes, and about 5 percent of Tesla.
This week, I talked with Derek Kaufman, Vice President with smart USA and Doug Gold, Director Northwest Operations, and looked at the new Smart Fortwo Electric Drive. Battery range varies with driving conditions, so Smart estimates the range of this pure battery-electric at 84 miles per charge. In Portland, however, Derek drove the car 110 miles on one-charge, demonstrating that he has good driving skills. Both gave me details of the new car included in this report.
With only 16.5 kWh of lithium batteries, the Smart ED has about the same range as the Nissan Leaf with 24 kWh because the Smart weighs only about 2,000 pounds. With 50 percent less weight than Nissan, the car needs less batteries. This gives room for Smart to under price Nissan. Smart ED pricing has not been announced.
2010 United States Demonstration
This year, 250 smart electric cars will be put on the road in these U.S. geographies:
- San Francisco
- Orlando / Tampa
- Washington DC / Boston
The pilot may be implemented as a 4-year lease, primarily to fleets, for about $600 per month. The pilot program will include electric utility partnerships, such as Duke Energy in Indianapolis. The 250 electric cars for the U.S. in 2010, is part of a 1,000 to 1,500 electric car pilot globally.
In 2012 Smart Electric Drive to be Leased and Sold in Volume
In 2012, Smart will start making over 10,000 electric cars annually. If it succeeds as expected, the numbers could grow substantially in future years.
In a battle for urban parking spaces, the Smart Electric Drive will face serious competition from Toyota and Mitsubishi with their micro-compact electric cars. Market share will be fought with price and lease options.
The 2012 Toyota FT-EV will be commercially available before the 2013 Smart Fortwo Electric Drive, but the FT-EV will have less range at about 50 miles per charge. Toyota will have a 70 mile per hour speed maximum, higher than advertised 62 mph for the Smart.
Electric Car Sharing
Daimler is now competing with Zipcar for long-term leadership in car sharing. In Austin, Texas, 500 Smart Fortwo gasoline cars are used by the day, the hour, or the minute. Uniquely, car share members can drive the car from one point and leave it at another. Daimler plans to expand the service nationwide and to include the new Smart Fortwo Electric Drive in the program. In Europe, Car2Go has piloted the Smart ED. In future years, the Electric will be included for U.S. Car2Go members. Daimler Car2Go Report
Electric Drive Specs
- 16.5 kWh Lithium Ion Battery Pack
- 2010 18,650 Tesla Cells
- 2013 could use Evonic (Daimler JV) Li-Tech Lithium Nickel Cells
- Energy Density 110 Wh/kg (could improve to 160 Wh/kg in future years)
- Zytek Permanent Magnet Motor 20kW constant / 30kW peak
- Single speed transmission 3.3 kW onboard charger / 13 amp
- J1772 Connector
- Level 2 charge 20-80% SOC 3 hours
- Level 1 charge 0-100% SOC 8 hours
Top 10 Electric Car Makers for United States Market