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Oil and car companies are suddenly investing in electric vehicles – why?

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ThinkProgress

Photo by Smith Collection/Gado/Getty Images

Game-changing advances in batteries are happening so fast that, this week, oil giant BP announced it would invest $20 million in an Israeli company that could allow an electric car to be charged in five minutes.

On Wednesday, German battery maker Sonnen announced $71 million in new investments from Shell Ventures (the oil major’s venture capital fund) and others.

Also this week, National Grid, which runs England’s electric grid, announced a partnership with startup Pivot Power, which will create a $2 billion 2-Gigawatt network of batteries connected to the UK grid that will power 100 fast electric vehicle (EV) chargers.

And earlier this month, Volkswagen announced it had awarded an astounding $48 billion in contracts to purchase batteries. CEO Herbert Diess promised, “By 2020 we will offer our customers more than 25 new electric models and more than 20 plug-in hybrids … the world’s largest fleet of electric vehicles.”

What’s driving these announcements and investments?

Electric vehicle sales have seen exponential growth this decade

Certainly the steady rise in gasoline prices in recent months has made the environment better for such investments. But the primary driver is the exponential growth in EV sales as the above chart illustrates.

The EV industry had essentially zero share of global car sales in 2010, but EV-Volumes projects that “it reaches close to 3% in December 2018 and 2% for the complete year.”

The massive investments are also based on projections that this exponential growth will continue in the years to come, with EVs potentially hitting a 50 percent market share in two decades, as Bloomberg New Energy Finance predicts.

Projected global electric vehicle sales

The exponential growth in sales is, in turn, due primarily to the stunning improvements in the price and performance of batteries over the past decade.

In addition, the projections of future sales growth are based on projections of continued improvements in battery price and performance, especially in energy density, which results in cheaper batteries that are also smaller and lighter.

Plummeting prices for batteries and rising energy density are expected to continue for years to come Credit: The Economist

The most optimistic future projections, however, are not just based on incremental improvements in lithium-ion batteries.

Indeed, earlier this month, the Japanese government announced a new initiative to develop next-generation solid-state batteries. That’s what the BP investment in Israeli start-up StoreDot was about — a solid-state organic polymer battery.

The “promise” of solid-state batteries, the journal Nature explained in 2015, “is that they will replace the heavy and sometimes dangerous liquid electrolyte” with a “lighter, more versatile solid alternative.”

As one MIT materials scientist put it, “Imagine batteries that do not catch fire and do not lose storage capacity. That is the promise of solid-state batteries.”

The promise is also that a solid-state battery could be available in five years that “delivers 2.5 times the energy density of typical lithium-ion batteries, with the potential of costing one third of the 2020 projected price of those batteries,” Green Car Congress reported in Novmember

And solid state batteries are the ones that can be charged in a matter of minutes,  just like your gas tank can.

With next generation batteries, an electric car will match or beat gasoline cars in every respect. The future of EVs is very solid.

Source: ThinkProgress. Reproduced with permission.  

Pocket
  • Chris Drongers

    Is there a lower limit to how many kWhrs/100km an electric vehicle will use? At the present consumption of about 5k/kWhr or 20 kWhr/100 km ‘fuel’ cost for a sparky @25c/kWhr retail is $5/100 km. A petrol Camry gives about 7 l/100 km or $10/100 km fuel cost. Substantial difference but not a game changer for a family runabout.

    • Steve

      My i3 averages around 13 kWh per 100 km on my suburban commute into town. Lower limit is zero if you drop the car from space 100 km above the ground. Realistically main impediments would relate to weight you are moving, constancy of speed, tyre and wind resistance, and how spirited a ride you want. I’m a bit of a lead foot with my i3 – but with city driving there is not much chance to really let loose.

    • Ian

      That’s interesting, smaller cars do about 150wh/km from what I’ve seen. In the USA average electricity prices are about 10c/kWh, which using that 200Wh figure you gave is US$2/100km their gasoline is $2.54per gallon or 67c/l or $4.70/100km tomaitoes,tomartoes.

    • Peter Campbell

      From the battery, in summer, my iMiEV is about 130Wh/km and my Holden Volt is about 140Wh/km. Both are a bit more in winter. Both are a bit more for highway driving than around town. Then I would assume another 10% to account for charging losses. So, ~160Wh/km is probably fair.

  • Kim Wilkinson

    Hi Chris,
    Cost becomes much more attractive if you are using energy from your own PV – in my case, that will be 7c/kWhr, or 100kms in an EV will cost about $1.40 (opportunity cost). Also the cost of maintenance will be much less. A new EV dealership is budgeting on maintenance revenue (to them) of about $100 pa and a further $30 for parts.

    • Mike Dill

      Yes, even in an EV there is maintenance. Change the air filters, the windshield wiper blades and eventually the tires. Check the brakes (which will last almost forever), add windshield wiper fluid. In about twenty years you need to change out the battery pack, or so I have been told.

      • Nick Kemp

        “Change the air filters” – which air filters?

        • lin

          presumably the ones in the airconditioning system.

    • Peter Fries

      I currently charge my iMiev on off peak. I am getting about 130 wh/km. I estimate the cost of ‘fuel’ at 2 cents per km. After 5 years of ownership, I have spent $500 on tires, $200 on a service and $80 on a new 12v battery.

    • Nick Kemp

      “Also the cost of maintenance will be much less.”

      Just paid around $400 to get my diesel serviced (sorry everybody). $130 was labor, $2 to fill up the washer bottle and the rest was oil, air filters, oil disposal etc So around $100 for an EV service sounds about right – I can hardly wait

  • Hettie

    Those graphs of the global uptake of EVs are a clear vindication of Tony Seba’s predictions. Doubling every two years.
    Now if our horrible federal government would only get the hell out of the way, and the State governments step up to the plate (Well done ACT and Qld), Australia would be well on the way to fuel security in a very few years.

  • Ian

    It’s so damn obvious, anyone who loves Israel or lives in Israel, should be spending every waking moment and every spare dollar finding decent vehicle battery technologies, or building battery factories or facilitating EV production. Israel is surrounded by oil-funded foes, over a billion ICE cars are transporting money to these countries which bristle with weapons aimed at this small vulnerable state.

    • PacoBella

      The petrol price hike we are currently experiencing was because OPEC said they were going to cut production, then a few weeks later they said they were going to produce a bit more and the 20 year old geniuses that run our commodity markets started the price down again. How long are we going to be held hostage to the bullshit of the fossil fuel industry and the manipulators of Wall Street?

      • Ian

        As long as we drive ICE vehicles, and draw energy from the grid.

    • Hettie

      Vulnerable because it is so bellicose.

    • Joe

      Vulnerable? All I see is Palestinians being shot, killed and maimed.

      • Hettie

        Absolutely, Joe. 58 peaceful protesters including babes in arms, killed in one day, hundreds injured, and Israel tries to claim they were defending themselves. Israel has become the terrorist state.

        • solarguy

          The Israelies have lost a lot of credibility with me too.

      • Ian

        Not a fight to get entangled in to be sure, but that does not change the fact that some of the biggest money and influence in the house of the leader of the free world is held by those who have a special interest in the welfare of Israel. You’d think these sort of people would be punting electric vehicles big time.

        • neroden

          You’d think, but it turns out the US government is in the pocket of Big Oil. Kowtows to Saudi Arabia.

  • MaxG

    Well, to answer the question: Companies invest in other companies or products to make a healthy profit. There is no care about conviction, environment, or the consumer; as long as it makes money. EV will be on the rise, as they are; hence, why they invest.

    • Joe

      Always follow the money, Max. Always follow the money.

  • Barry Alternative Fact Covfefe

    They are investing small amounts because they see the writing on the wall, after decades of successfully fighting progress they are now on the losing side so need to hedge their bets. If they create a battery oligopoly thats not as good as the status quo but better then going out of business.

    Technology prospecting is a risky business. Solid state batteries are only one possible successful future technology, it may look the most promising but many avenues are being researched and which one will be the winner is not yet written.