The Pessimists: These Consultants Think Gas Cars Will Have the Upper Hand in 2020

By · July 11, 2011

Nissan LEAF

The Nissan Leaf's sales are a wild card, because the public is still getting used to the car. (Jim Motavalli photo)

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.

Comments

· Anonymous (not verified) · 3 years ago

The upper hand for what? Range/flexibility, or operating costs?

I'm betting that gasoline will still be available for people who need range and flexibility in 2020, but it will be expensive (on account of the fact that we've used around half of the oil already). Electric cars will be available for people who need a cost-effective vehicle for commuting and errands. CNG vehicles will probably inhabit a popular middle ground. Well off families will continue to own several cars, perhaps from two or more of these categories.

That's how I see it unfolding, anyway. That's not to say I like it, since CNG brings as many problems as oil, but if oil continues its steady increase in price, things can't really help but work out this way.

· · 3 years ago

It's frustrating that the only thing people talk about anymore is CO2. ICEs create carbon monoxide, particulates, nitrogen oxide, sulfur dioxide and contribute significantly to the production of ozone, all of which have profoundly negative health impacts on human beings. Clearly, EVs, especially those powered primarily by renewables, and, to a lesser extent, those powered by natural gas generated electricity, have a big upper hand here, speaking of "upper hand."

But all of this seems to be lost in the one-dimensional focus on CO2.

· · 3 years ago

I tend to agree with the skeptics. Once the relatively tiny early adopter market is saturated with EVs, what will drive ordinary folks to buy them? Much higher gas prices seem to be what it would take. $4/gal won't cut it. $5/gal might help a bit. But I think it would take substantially higher gas prices to really force a switch. And when gas prices go up demand tends to fall and more difficult-to-tap sources of oil become economically viable and slow the rate of increase. Barring some sort of major geopolitical event, I don't see $6/gal in the next few years. By 2020? Maybe, but I'm not sure that would be enough to get the majority of car buyers to go electric.

In my more hopeful moments I'd like to believe that when there are tens of thousands of EVs on the road they will be seen as "normal" and the advantages will become apparent to ICE car drivers. But that remains to be seen.

After well over a decade hybrids remain a niche market. Is it reasonable to expect EVs to do better? I think not.

· 54mpg (not verified) · 3 years ago

I would think the price of an electric car would come down by 5%, while the range will increase by 5% on a yearly basis. So below are the numbers for LEAF or a LEAF look a like:
2011: $30, 000 - 100 miles
2012: $28, 500 - 105 miles
2013: $27, 000 - 110 miles
2014: $25, 700 - 116 miles
2015: $24, 400 - 122 miles

The manufactures would not want to price an electric car below 25K, for fear of loosing the aura associated with the EV. So from 2016 onwards, we might see only features addition and range increment.
2016: $25, 000 - 128 miles
2017: $25, 000 - 134 miles
2018: $25, 000 - 141 miles
2019: $25, 000 - 148 miles
2020: $25, 000 - 155 miles

155 miles is around 3 hours of drive; time for a bath room break (for the driver) and recharging (for the car).

· CT (not verified) · 3 years ago

I agree with Christof. With all the global warming talk it seems people have forgotten about good old
smog. I don't I can buy another ICE car after driving the LEAF.

· · 3 years ago

I think the biggest unknown is gas price. How many correctly predicted the 2008 oil price shock in 1998 ?

As they say prediction is difficult. Esp. about the future.

· · 3 years ago

"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."

Jim, I don't agree with this statement. Cylinder deactivation was introduced in the 1980's by Cadillac, although the implementation was a bit rough around the edges at the time. Reducing the number of cylinders and turbocharging was done at the end of the 1970's. Remember the Mustang turbo 4, and the Buick V6 turbo which were developed to replace V8s?

What's changed is the amount of processing power both running the engine, and designing the engine. During the 70's and 80's, automakers didn't have the luxury of sophisticated combustion modeling, and computational flow dynamics. Electronic engine controls, whle advanced at the time, were very crude by today's standards. Now we have 32 bit processors running the engine. Catalytic converters at the time had horrible back pressure, which killed specific output. That meant it took a bigger thirstier engine to produce the same output as today's engines. The cats also could not stand up to the heat of close coupling to exhaust manifold, so warm-up times killed emissions. The fuel injection systems, while electronic, did not have the control we have today, especially with the new piezo injectors. They also had knock sensors, but were resonant tuned units, rather than today's broadband sensors that employ digital signal processing.

By the way, the year 2000 was projected to be the last year for the V8. Not only is it still around, it is better than it ever was, with more power that even its heyday of the 1960s.

Most of what we are looking at today are yesterday's technologies refined over the years. We will continue to see refinement, and that will keep ICEs competitive for a long time.

By the way, two of my posts appear to have been censored today, for what I don't know, including one for this article. If the goal is to just have a bunch of "yes" people, rather than a meaningful dialog, then this forum is just going to dwindle, which it appears to already have done.

· · 3 years ago

So . . . is this "gloom and doom" day here on Plug In Cars? Well, as long as we're in a collective dour mood, I'll let you all know that I'm more worried about the new natural gas boom than anything else right now.

Suddenly, the oil companies are all excited about shale gas. It's being sold under the rubric of "less dependency on foreign oil." But the relatively new procedure of extracting it, fracking, has got to be one of the filthiest and most environmentally irresponsible processes known to man. The politics behind it is just as insidious (an hour-long free audio download is available on the page of the below link . . . worth your time to take a listen) . . .

http://www.thisamericanlife.org/radio-archives/episode/440/game-changer

Even if the price of foreign crude goes through the roof, it is a relatively easy process the convert an ICE to run on natural gas. That, in my book, will be the greatest obstacle in more widespread EV adoption in the next decade.

· · 3 years ago

One issue with running a car on compressed natural gas is that it is not as dense as gasoline or diesel, so you need extra tanks that intrude on passenger and/or cargo space if you want the range of a gasoline car. On the other hand, if one doesn't need that much range, then EV batteries are catching up, and enable a much more pleasant driving experience. With an EV, it's also much easier to set up home "refueling".

I also agree about the need to reduce urban smog. Even up here in the mountains where I live, we have excessive ozone pollution from the LA basin below. We need EVs for cleaner, healthier air!

· Anonymous (not verified) · 3 years ago

"Just as uncertain, right now, is how consumers will take to EVs, because so many factors are inhibiting a free market."

Thank you!!! In a real free market, 87 octane would be at least $8.00 a gallon, and no one would question the cost advantage of EVs.

· · 3 years ago

So far as CNG is concerned, I wonder which is more efficient: compressing, transporting, and burning CNG in an ICE car or burning NG in a power plant to produce electricity, then using the electricity to power EVs, with all the inherent line and charging losses?

It might be pretty close.

As for NG drilling, fracking does seem to be an environmental nightmare but it will be much worse when doing it for shale oil, as is being proposed in western Colorado and eastern Utah. Oil shale makes the tar sands in Canada look pretty benign by comparison. And high oil prices make such difficult oil recovery economically viable (because externalities, such as pollution and massive environmental damage, aren't priced in).

Electrifying our ground transportation can't come soon enough for me!

· · 3 years ago

@Benjamin,

"But the relatively new procedure of extracting it, fracking, has got to be one of the filthiest and most environmentally irresponsible processes known to man. "

Actually, fracking has been in use for over 60 years.

The EPA is conducting a drinking water study on the effects of fracking, which will have preliminary data in 2012, and full report in 2014.

· · 3 years ago

But I want flammable neurological-damaging water to shower in and drink!

Drill baby drill!

/sarcasm

Colbert Report from Monday July 11, 2011 did a good segment on fracking. It's the middle part of the show. (At work and they blocked Colbert Report so I cannot get a link)

· JJ - Can (not verified) · 3 years ago

I look forward to some day drive an EV mini van or one like the RAV.
I won't have to worry about oil changes, spark plugs, oil changes, changing oil and air filters, tranny fluid changes, timing belts, stuck EGR sensors, clogged catalytic converters, rusting exhaust systems,
bad spark plug wires, bad coil packs and all the hassle of getting the car fixed.

If others want to drive ICE cars just to make noise and pollute then good for them. At least I won't have all the problems they'll have with an ICE car.

· · 3 years ago

Two X factors as I see it are PV systems and China. First, PV systems are getting less expensive every year. EVs and PV go hand in hand. Eventually new homes will include PV systems just like they presently include an air conditioner, oven, water heater, etc. In California, 40% of LEAF owners have a PV system.

Second, the Chinese Ministry of Science and Technology (MOST) has recently put its 2011-2015 electric car plan of action. China sees the EV as strategically important because it's a new product market for worldwide export as well as they don't want to be oil dependent domestically. China is a state run economy. Beijing sets the direction and industry must follow. EV innovation out of China over the next five years could potentially be a game changer.

· · 3 years ago

Found it, Travisty. Thanks . . .

http://www.colbertnation.com/the-colbert-report-videos/391552/july-11-20...

Funny skit from Steve Colbert, but this IS a frightening issue in real life.

· JJJJJJ (not verified) · 3 years ago

I do agree that the battery thing is worrisome. I dont know about you, but my 2010 cell phone lasts much, MUCH less time than my 2008 cell phone. Phone power use went up, battery technology stagnated.

Battery technology (of all sizes) has stagnated. And thats not good.

Unless a eureka moment happens (which may happen tomorrow, or 2020) there are serious limitations in EV adoption.

· · 3 years ago

@JJJJJJJ,
Don't be too discouraged. Battery technology is still improving. The energy density has steadily increased at about 10% per year but the consumption has skyrocketed.
I used to design cellphones. As soon as Apple got into the business, the whole industry threw power consumption concerns away. We used to worry about saving 1 or 2 milliwatts, now the large displays and powerful application processors are consuming several watts.

· · 3 years ago

Hey "Multiple J" . . .

My guess is that your 2010 phone has more features (bigger LCD screen, internet connectivity, games, food processing, etc.) and, to preserve the ridiculous too-small-for-normal-hands-to-hold size, a smaller (less storage capacity) battery. Without a careful comparison of current draw and battery specifications between those two phones, its some empirical to boldly declare that "battery technology has stagnated."

Unlike the 18 month Moore's Law, where computer technology essentially takes a quantum leap during that period, lithium battery technology is going to advance over a less predictable timeline. But, if what I've been reading turns out to be true, I'd watch for silicon (as opposed to carbon based) lithium battery anodes in 2013 to give us the next significant jump.

· SteveEV (not verified) · 3 years ago

I have owned my Leaf for about 2 months now, and I have driven the Tesla roadster. I do believe that the time is now for the EV. Both these very oppositely priced vehicles drive amazing (better than most ICE vehicles). For the comments stating that it will take tens of thousands of EV car sales to get this going, then perhaps those comments are from those residing in areas with few EVs. At LAX today, I note there were about 11 Nissan Leafs, 3 Volts, and a Tesla roadster consuming every available charging station. Not more than a month ago this number was less than 1/3rd. In CA alone, there will be tens of thousands sold in no time. I'm seeing Leafs all over, but those out of state would not know it. If those skeptics looked at the massive number of charging stations planned in LA this year and next, they will be believers. It is somewhat strange that I have not been to a gas station in over a month...but I don't miss it. We know that electricity can be sourced by solar. We know that nearly all the battery parts can be recycled. We know that we can get at least 100K mile life on a battery for which we know the technology is improving exponentially (thus today's battery will be considered disposable as compared to tomorrow's battery). We know that EV cars are almost free for most working Americans (I'm still not sure why people say that EV's are more expensive...if you do the math, it is basically a free car as I further explain below). Range limitations will be corrected by technology (think about the Tesla S which will go 300 miles, proof that it is doable, and like all technologies, price will plummet). So what is the debate?

Now for the math on why the Leaf was FREE for me..it was a no brainer, provided you can come up with the money up front. The car after sales tax is about $40K with all possible options. Less $5,000 nearly immediate cash back from Dept of Energy in CA (no longer fully available), less $7,500 federal tax credit, less $1,200 federal infrastructure credit, less $3,000 credit for B of A corporate employees. Less EV Project Infrastructure $900 credit for the quickcharge upgrade. Total net cost of the Leaf is $22,400. Take a loan out for the full amount at 5% interest. Payment is about $300 per month. My savings from elect vs. gas is about $300 per month, therefore the car is FREE! Right? Do the math my friends. If for no other reason, this is why I own the Leaf. I will take that savings and reinvest it on my Model S when it is ready. Best of luck to the ICE owners inefficiently repairing the many parts to their cars, and trips to the gas station. No more for me, thank you. ;) Cheers.

· Derek (not verified) · 3 years ago

I'd lice to get an ev, but the biggest hold up for me is I live in Idaho where it's winter 9 moths out of the year. Batteries don't fair well @ freezing for 9+ hours a day. Maybe by 2012.

· GC (not verified) · 3 years ago

It's so simple. Electric vehicles and solar power. I have a few panels on my garage so I get 40 miles a day powered by the sun.

· JJ - Can (not verified) · 3 years ago

SteveEV your comment is encouraging.
I hope the EV's spread all over the US and Canada.

· Quinton (not verified) · 3 years ago

I'd like to see larger EV's. I think thats one of the issues keeping the masses from adapting. EV's are great for families under 5, but an electric minivan or SUV is needed. The ford plugin minivan looks to be more like a larger car.

· · 3 years ago

@Derek,
If you live in extreme cold country and have to drive a long way an EV may not work for you.
Having all the drivers in warmer places switch to electric will take the pressure off of oil and reduce its price so you'll win either way.
If you don't drive too far on a regular basis, you may find an EV is excellent for you, however. If there are engine block heater outlets at most parking spaces, you will nearly always be near to charge a little bit.

· JJ - Can (not verified) · 3 years ago

Quinton that's why we were all moaning on another page when we read that Toyota won't be providing the RAV-EV to the general public.
We need vehicles to carry our tools to job sites, or sports gear, walkers for the old folk and baby carriages for the young people.

· · 3 years ago

DGP,
"So far as CNG is concerned, I wonder which is more efficient: compressing, transporting, and burning CNG in an ICE car or burning NG in a power plant to produce electricity, then using the electricity to power EVs, with all the inherent line and charging losses?

It might be pretty close."
It's not close, the EV wins. 15% efficient CNG ICE, minus piping and high compression losses. Combined cycle generating plant at 60% efficiency-5-7% transmission loss-5-10% charging loss, kills the ICE. Plus you don't have to build more gas lines and high pressure CNG stations.

· · 3 years ago

@JRP3, I guess that makes sense, although your reported efficiency for a natural gas generating plant is higher than I would have guessed. Really good fluidized bed coal plants seem to top out at about 45%. And I thought a CNG ICE would be more in the range of 25%. But the whole compression and CNG infrastructure problems make EVs look very good by comparison.

So, that gets back to the point that most people, who don't hang out in places like this, don't get: it is better to make electricity and use it directly in an EV. If the numbers being estimated about the electricity and NG used to refine oil into gasoline, it would be cheaper to skip the whole oil step and just go with charging EVs. The problem seems to be one of education. If EVs make so much more sense than ICE cars, why don't more people "get" it?

· · 3 years ago

"Why don't more people get it?" is a loaded question, with a number of possible answers. Some people, a lot I'm afraid, simply fear change and the unknown. They are so ingrained in their behavior and what they are used to they don't want to try something different. Especially if something different might come with a limitation, (range), even though it provides other freedoms, (oil free driving). Others simply have an agenda and have a knee jerk negative reaction to anything that is seen as "green" or environmentally beneficial. It's really a weird and ultimately self destructive attitude when you think about it but many people are short sighted and selfish.
You can push my quoted numbers around a bit but EV's still come out ahead. The best combined cycle CNG plants to hit 60%.
Along a similar vein a few studies have shown that instead of refining crops into liquid fuels and burning them in ICE's you'd get more bang per acre by simply burning that biomass in a generating plant to charge EV's. You also don't need to use high input food sources such as corn. But many people are so in love with their ICE vehicles they look for anything they can turn into fuel for them no matter how inefficient.
On the flip side there are more and more people who hate the whole ICE paradigm and are willing to accept an EV with limited range to gain the freedom of petroleum free daily transportation.

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