December 13, 2010

Meet the battery consultant who doesn’t much like battery cars.

Jim Motavalli is the author of Forward Drive: The Race to Build Clean Cars for the Future, among other books. He has been covering the environmental side of the auto industry for more than a decade, and writes regularly on those topics for the New York Times.

Menahem Anderman comes by his pessimism about electric cars honestly — instead of just talking about batteries, he’s worked on them in the trenches since the early 1980s, when he served as a battery project and group leader at W.R. Grace & Company. He has a Ph.D. in chemistry, and experience developing nickel-cadmium batteries for the U.S. Army, and the aviation and railway industries, among others.
Anderman is president of Total Battery Consulting, which he founded in 1996. As a consultant, he organizes international battery conferences – and takes a consistently dim view of the prospects for battery cars in at least the short term. And he’s not that sure about the long term, either. But like Mary Ann Wright of Johnson Controls, Anderman is quite optimistic about hybrid cars.
Some critics have pointed out that Wright’s orientation toward hybrids is in her company’s interests, since it provides batteries to Mercedes and BMW. But there aren’t really “hybrid batteries” and “EV [i.e., electric-vehicle] batteries.” They use the same cells, just in different sized packs. Johnson Controls is avidly pursuing EV applications. Anderman also runs Advanced Automotive Batteries as a division of his consulting business, but I’m not aware that he has any pending EV or hybrid contracts.

BNET: Do you see a prospect for a battery breakthrough that might lead to more optimistic battery penetration numbers?
Menahem Anderman: To make a significant change in the market prospects of EVs we need batteries with higher energy density, lower cost and better durability than anything currently existing, with near-perfect reliability and safety. That is quite a challenge! Improvement in just energy density, and not in the other aspects, will have a limited impact. Although every improvement helps, no single breakthrough or even combinations of breakthroughs are likely to have enough impact to dramatically change the problematic value proposition of EVs inside the next 10 years.

BNET: Suppose gas prices go to $4 or $5 a gallon? Does that change your thinking?
MA: If gas prices climb to $4.50 or $5 per gallon, hybrid car sales will boom as hybrids will provide great value. My market assessment assumes gasoline prices below $4 a gallon on average in the U.S. through 2015. Of course the market will grow in size as gasoline prices increase but gas prices have to go to at least $7 in the U.S. before EVs and plug-in hybrids can start to economically compete with hybrids. This assumes a battery life of 10 years and a notable reduction in battery cost — not proven at this point in time.

BNET: What about tighter carbon dioxide emission regulations as a driver?
MA: They are the main driver in Europe and a significant one in California already.

BNET: Are U.S. incentives (especially in California) likely to convince a significant number of people to buy EVs?
MA: The $7,500 federal U.S. tax credit for 100,000 vehicles per manufacturer will clearly play a significant part. The problem is that most automakers will not scale up production against a subsidy that will run out, if they do not see a viable subsidy-free market. The California subsidies are for very small volumes. The California Zero Emission Vehicle (ZEV) mandate that requires minimum zero-emission-vehicle sales in California is the main driver for EV and plug-in hybrid development in most car companies.

BNET: Why do you see the U.S. as the largest plug-in hybrid market, when other countries have higher gas prices?
MA: The U.S. is likely to have the largest plug-in hybrid market in the world, at least for the next five to eight years because of the California ZEV mandate and the U.S. federal tax credit. The 12 states that follow the California emission standard will require carmakers to sell as many plug-in hybrids and hybrids (as a percentage of cars sold in their state) as in California, but they won’t impose the same requirement in relation to EVs. European automakers just started developing plug-in hybrids and are unlikely to offer any significant volume for the next five years.

BNET: Which battery vehicles do you expect to make the most inroads? Which are likely losers?
MA: In the next five years, we will have nearly a dozen producers of automotive lithium-ion (li-ion) batteries. In the longer term, the companies that will establish the most reliable manufacturing will win, as the automotive markets demand for  high-voltage batteries with  ultra-long life at very low price requires the highest quality standards. That, of course, places the experienced Japanese and Korean battery manufacture giants at an advantage. Three or more Chinese producers will make it in the Chinese market and, later on, a couple of them might also acquire enough expertise to export them.

BNET: Will China’s BYD (“Build Your Dreams”) succeed in creating a world-class electric vehicle? I know you drove the E6. BYD which is establishing a U.S. headquarters in Los Angeles, has said it will bring the E6 to the U.S. What about other Chinese automakers?
MA: BYD’s current approach, which is to use a very large battery, is not economical. I suspect it will be quite a few years before Chinese carmakers can successfully sell EVs in the U.S. or in Europe, as they will find it difficult to meet the expectations of American and European customers for vehicle reliability, safety and durability. But if the Chinese local and federal governments continue to provide large subsidies to produce EVs and for customers to buy them, BYD and possibly other Chinese companies could become key players in the longer term by slowly building their expertise.

BNET: Will micro-hybrids, incorporating start-stop technology and sometimes regenerative braking, be a hit internationally?
MA: Micro-hybrids are designed to reduce carbon dioxide emissions in city driving. They make sense in crowded cities, which are more typical of the European and Japanese markets. The fuel savings that they offer in suburb driving is minimal, and non-existent in highway driving.  Micro-hybrids will become standard in Europe as their fuel saving in certificate tests — used for emissions ratings in Europe — is on the order of four to eight percent. However, the actual savings will be lower for most drivers.

Written by Jim Motavalli