To walk the NAIAS show floor one imagines that the gasoline supply is practically gone and the world will be plugging in to get around any day now. There’s a whole “Electric Avenue” area on the main floor, a big display featuring several electric competitors vying for the $10 million Progressive Automotive X-Prize, and a driving loop in the basement. Below are highlights of the some of the more intriguing exhibits, and you can read our postings on the Commuter Cars Corp. Tango and Green Vehicles Triac. But is there really a market for these cars?
But before the NAIAS opened the Boston Consulting Group addressed the Automotive Press Association to present its research into the challenges, opportunities and outlook for electric cars over the next decade. They are not bullish. Barring unforeseen breakthroughs in chemistry, lithium-ion battery costs will drop by only 65 percent or so, to around $360/kilowatt-hour. Most assumptions for volume adoption of electric cars are predicated on a $250/kWh battery price (and Boston Consulting reckons $215 is required for total cost of ownership to break even with combustion after three years). Further cost reductions are limited by a floor in commodities that comprise a quarter of the battery pack. Manufacturing in third-world countries doesn’t help either, because the intellectual property costs are higher than the manufacturing costs, and shipping costs eat the savings. That means that total cost of ownership may break even with combustion engines in 1-5 years–but only if current incentives are extended. It’ll take 9-15 if they’re phased out. External factors that would change that horizon include: Continued incentives of $7700, $375/barrel oil, or a 210-percent gas-tax hike. Failing any of that, Boston pegs EV penetration at no more than 10 percent of the market by 2020.
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