WASHINGTON — When oil hit a record price of $147 a barrel in July 2008, it was a game-changing moment that sparked a serious push to create electric cars and hybrid electric engines that could help wean Americans off oil. Today, crude is back at more than $100 a barrel, and the payoff is the first generation of mass-produced electric cars.
Interest in electric vehicles has ebbed and flowed with the price of oil over the past three decades, but something new is clearly afoot. General Motors and Nissan already have electric cars on the streets of major U.S. cities, and intensified battery research is bringing down costs.
In 2005, there were no makers of lithium-ion batteries in the United States. Now, more than half a dozen battery plants are open or near completion, thanks in part to $2.4 billion in co-investment from the federal government.
Chevy’s Volt battery costs about $8,000 now, down from $12,000 or more a few years ago.
“The question is: Can these guys make a battery that is five times cheaper? I think yes. I think we can do it,” said Eric Isaacs, the director of the Argonne National Laboratory.
Argonne, outside Chicago, is the Department of Energy’s lead lab for advanced battery research and development. Its 15 years of research into lithium ion batteries resulted in the one that’s now being used in GM’s Chevy Volt.
“We think that increasing electric is inevitable. The speed is variable,” said Genevieve Cullen, the vice president of the Electric Drive Transportation Association, an advocacy group for electric cars.
That’s why a global race is on among the United States, Japan, China and other manufacturing powers not only to develop the next generation of battery and electric-motor technology, but to define what the auto of the future will be.
“The days of sub-$100 oil are really behind us,” Mahi Reddy, the CEO of SemaConnect, said during a company tour in Annapolis, Md.
SemaConnect is one of a handful of U.S. startup companies that are designing charging stations for electric cars, and Reddy is buoyed by the flurry of new electric cars coming out.
“That to me is a signal that a critical mass has been reached,” he said, confident that the price advantage that conventional cars still hold will narrow rapidly.
SemaConnect recently installed a charging station outside a Safeway grocery store in Westminster, Md. It’s preparing to put in 50 more in places such as regional airports and rail stations.
Federal stimulus funds totaling almost $400 million have been used to help companies such as San Francisco-based ECOtality. It manufactures its Blink battery-charging stations in Detroit and is deploying stations in 18 large cities across six states. Installations began in the past several weeks in California, Washington state, Oregon and Arizona.
Rental-car giant Hertz offers electric cars at New York locations and will expand that to San Francisco and the nation’s capital in coming weeks.
“Currently, we have a few dozen vehicles. By the end of the year we anticipate having hundreds of them available,” spokeswoman Paula Rivera said. “We do view this as the future of transportation, and see adoption coming not only from having the cars available, but the ecosystem to charge them. ... As the ecosystem builds out, our fleet will increase.”
That “ecosystem” is exactly what consumer-electronics behemoth Best Buy is eyeing. The retailer expects to capitalize on the need to install 220-volt electrical sockets in homes and businesses across America to allow for speedier car charging.
“We dedicated a significant amount of resources to help this technology come to market,” said Chad Bell, the senior director of Best Buy’s New Business Solutions Group. “We think these (home charging stations) will be purchased and sold in the future similar to how electronics are sold today.”
When a consumer buys an electric vehicle, the car equivalent of Best Buy’s computer-repair service Geek Squad would do an assessment of the customer’s needs, then send a contracting partner to install the charge station. Best Buy would remain the point of contact if problems arose.
Making them affordable
President Barack Obama has challenged automakers to put 1 million electric cars on the road by 2015. That would be equal to one out of 12 cars sold last year.
Oil-price shocks and concern about climate change help push electric car production, but a third critical push has come from breakthroughs in battery technologies, aided by federal investment.
Battery price is the biggest cost component in an electric car. For every kilowatt hour of battery power, there’s a driving range of four miles. Nissan’s Leaf has a 24 kilowatt-hour battery, or a range of about 96 miles between charges. The battery costs $12,000, but as it’s mass-produced and demand for electric cars grows, the cost should come down to $6,000 in three years, said Reddy of SemaConnect.
That will put the cost of an electric car on par with conventional cars. That’s important because Toyota’s pioneering hybrid Prius, which combines gasoline and electric propulsion, won over many motorists who wanted to be early adopters, but its higher price as a hybrid was greater than the fuel economy savings it provided.
Buyers of electric cars qualify for a federal tax credit that ranges from $2,500 to $7,500, with the credit rising along with battery life. States are adding their own incentives, both on taxes and sweeteners such as preferred parking spaces and lower registration fees. Consumers who install charging stations can write off 30 percent of the cost from federal taxes up to $1,000; commercial sites can write off up to $30,000 in installation costs.
The Energy Department is funding research for next-generation batteries that could go 500 miles on a single charge, convinced by surveys that Americans will buy electric cars only if they have a range of at least 250 miles, roughly the equivalent of a full tank of gas.
At least one expert thinks range concerns are overblown.
“We shouldn’t let the perfect become the enemy of the good,” said Ed Kjaer, the director of electric transportation programs for Southern California Edison, a utility that’s pioneered the use of electric car fleets. “I have never run out of juice, and I commute 100 miles a day, so let’s be real. The battery-powered car is an urban commuting vehicle.”
• Electric cars likely to spark new “smart grid,” Page G2