2015: A “Game Changing” Year for EVs?
Last month, General Motors did something big. Following the success of its popular Chevrolet Volt plug-in hybrid electric vehicle, the Detroit automaker announced plans to release its first mass market battery electric vehicle (BEV). The Chevrolet Bolt—possibly a temporary name—will have a reported 200-mile range, and at a purchase price that is over $10,000 below the current asking price of the Volt, will make electric vehicles more accessible to a far wider audience. At $30,000 after federal EV tax incentives, it is the company’s biggest bet on electric innovation to date. GM CEO Mary Barra unveiled the Bolt at January’s North American International Auto Show in Detroit. “The Bolt EV concept demonstrates General Motors’ commitment to electrification and the capabilities of our advanced EV technology,” she said in a statement. “Chevrolet believes electrification is a pillar of future transportation and needs to be affordable for a wider segment of customers.” She called the it a “game changer.” The Chevy Bolt, which could hit showroom floors as early as 2017, will feature a hatchback design that will give the car the look and feel of a so-called crossover vehicle, according to The Wall Street Journal. South Korean battery producer LG Chem will produce the lithium-ion battery packs that power the vehicles’ drivetrain, under an improved “pouch” design. To maximize the Bolt's range, GM says the vehicles will be produced using lightweight materials including aluminum, magnesium and carbon fiber. And, according to the company statement, the car will feature a 10-inch infotainment screen, built-in smartphone functionality, and autonomous driving technology. Using a phone application, the car will intelligently park itself and then return to the driver’s location. GM executives hope these technological innovations will burnish its image as an EV innovator. At $75,000 before tax credits, the auto giant’s Cadillac ELR plug-in hybrid EV (PHEV) struggled to sell in the luxury segment. But rather than surrender a corner of the market, GM enhanced its R&D capacity, including research into competitor Tesla Motors’ processes and a $240 million investment in its Warren, Michigan transmission plant. By placing the Bolt in the same line as the Chevrolet Volt PHEV, the company hopes to build Chevy’s image “as a full-line vehicle manufacturer prepared to meet demand, regardless of prices at the pump,” sources told The Wall Street Journal. But GM faces stiff competition. The Nissan Leaf, which sold 30,000 vehicles last year, saw a 33 percent increase in year-over-year sales, and remains a top EV manufacturer next to Tesla, the industry leader. Chevy’s Volt, by contrast, sold 18,800 vehicles, an 18 percent decline over the year prior. GM is expected to unveil a brand new, more fuel-efficient Volt model this fall. Its current car can go 35 miles on a charge, but the new Volt model will go 50 miles per charge, with 41 miles per gallon combined city and highway consumption once the charge runs out. Its new model, the company hopes, will reinvigorate its PHEV sales in 2015. The EV market that is becoming increasingly competitive. BMW’s popular i3 PHEV came in fourth in last quarter’s retail sales. Undaunted, the company aired an ad during last Sunday’s Super Bowl game—the most widely watched television event in U.S. history—lightheartedly poking fun at the pace of innovation. Indeed, 2015 looks to be a year of rapid innovation in EV technology. Tesla Motors will release its widely anticipated Model X, Volkswagen will put out its brand new Passat GTE PHEV, and three new Mercedes-Benz plug-in vehicles will come to market. In total, 15 new cars will join the 11 battery electric vehicle models and nine PHEVs currently on the market. For its part, BMW will continue electrifying its entire fleet, releasing the X5 eDrive—a luxury competitor to Tesla’s Model S—and the 3 Series PHEV. Still, January sales were low relative to the tremendous growth of recent months. As HybridCars points out, beginning-of-the-year auto sales numbers are frequently more modest coming off December highs. This year, EV sales were roughly on par with those of January 2014. So, will battery electric vehicles become “game changers” in 2015? It’s possible—if low purchase prices for 200+ miles of range becomes the new normal in the plug-in vehicle space. It’s also worth noting that relative to PHEVs, or cars that have some electric range but also feature a backup internal combustion engine, battery-powered vehicles will see much steeper declines in total cost of ownership through 2020. Five years ago, lithium-ion batteries cost nearly $1,000 per kilowatt-hour (kWh). Today, technological improvements, higher demand, and greater vehicle fuel efficiency have brought the price down to $400/kWh, says Dan Hearsche, a battery expert for the global business consulting firm AlixPartners LP. The battery price declines we have already seen in the past half-decade are no small feat. However, further price declines might be necessary in order to make electric vehicles truly price competitive in a world of $2 per gallon gas. As long as automakers like GM and BMW invest in the R&D that reduces battery costs and improves technology, EVs will continue to become major game changers, indeed. They will serve as an integral part of an American energy strategy that seeks to reduce U.S. oil dependence, bolstering our economic and national security and enhancing consumer choice.