The Pessimists: These Consultants Think Gas Cars Will Have the Upper Hand in 2020
There is no shortage of skeptics when it comes to the future of electric cars. One of the true naysayers is Boston Consulting Group, which in a series of reports since 2009 makes clear that it doesn’t think that battery costs will come down enough by 2020 to make a big dent in gas car sales. But its estimates are getting less dire.
In 2009, BCG said that a 20-kilowatt-hour battery able to move an EV 80 miles would cost $14,000 in 2020. In 2010, it looked at the market and said that EVs were unlikely to reach the mass market without some kind of battery chemistry breakthrough.
In its latest report, the group revises those figures and says that “battery pack costs are forecast to fall sharply” (down 64 percent from 2009). Now it predicts that the same battery is likely to cost a far more manageable $9,600. But maybe costs will fall further still.
In “Powering Autos to 2020: The Era of the Electric Car?”, BCG concludes that automakers can meet their toughening fuel economy/greenhouse emission targets without plugging in. That’s because automakers are suddenly taking an interest in improving the internal-combustion engine, not only by reducing the number of cylinders (goodbye, V8) but also by using direct injection, turbocharging, cylinder deactivation and other economy measures.
According to BCG, the IC cars can cut carbon dioxide emissions at a cost of $50 to $60 for every percentage point of reduction, which is half what it would have been three years ago. That’s bad news if EVs don’t sell on their own, and need the help from the federal 2017-2025 Corporate Average Fuel Economy (CAFE) mandates.
Automakers are grumbling about the 56.2 mpg goal set by the Obama Administration, and claiming that it will force them to build plug-in cars nobody will want to buy. But if a 40 percent cut is possible just by tweaking gas engines, the big EV mandate is gone.
Maybe BCG will turn out to be right, but it seems to me that both IC engines and batteries are moving targets, impossible to predict as far ahead as 2020. By the consultants’ own admission, battery costs are falling sharply. Trying to pin down the rate of that fall seems impossible from this vantage point. Just as uncertain, right now, is how consumers will take to EVs, because so many factors are inhibiting a free market.
The Nissan LEAF had its best month in June, with sales of 1,708 (up 50 percent from May). The Volt was up 17 percent, with sales of 561. But GM’s Volt production is on hiatus, Nissan is still mopping up from the earthquake/tsunami, and neither one is sold nationally yet. You still can’t buy either one off a lot.
Big EV sales will spur battery development, and more production will reduce costs with economies of scale. So until you can put every important factor into a blender and mix, the electric car’s future is as easy to pin down as the winner of the 2020 World’s Series. Your guess, and BCG’s, is as good as mine.
New to EVs? Start here
What Is An Electric Car?
Before we get going, let's establish basic definitions.
A Quick Guide to Plug-in Hybrids
Some plug-in cars have back-up engines to extend driving range.
Electric Cars Pros and Cons
EVs are a great solution for most people. But not everybody.
Eight Rules of Electric Vehicle Charging Etiquette
Thou shalt charge only when necessary. And other rules to live by.
Seven Things To Know About Buying a Plug-In Car
A few simple tips before you visit the dealership.
Eight Factors Determining Total Cost of Ownership of an Electric Car
EVs get bad rap as expensive. Until you look at TCO.
Federal and Local Incentives for Plug-in Hybrids and Electric Cars
Take advantage of credits and rebates to reduce EV costs.
Guide to Buying First Home EV Charger
You'll want a home charger. Here's how to buy the right one.
Electric Car Utility Rate Plans: Top Five Rules
With the right utility plan, electric fuel can be dirt cheap.
The Ultimate Guide to Electric Car Charging Networks
If you plan to charge in public, you'll want to sign up for charging network membership (or two).