Waiting for the Electric Car Tipping Point
April 2012 electric vehicle sales numbers are in, and frankly, they are disappointing. Shouldn’t numbers be climbing every month by now? Regardless of any specific sales figures for any single month during this period of the EV market—too much shouldn’t be read into them— the larger global economic and technological factors are creating a head wind against widespread adoption of plug-in cars. Still, folks who expect (or for various reasons really want) EVs to take off believe there will be a future tipping point—nobody knows the exact year—when the fundamentals of cost and convenience will dramatically sway in favor of electric cars over gas-powered vehicles.
What kind of tipping point are they talking about? One or more of these:
Gas prices will quickly spike. Global economic forces, terrorist activity, or acts of nature will make today’s nearly $4 gas seem quaint. If the oil supply is disrupted, the price at the pump will shoot up to $5, $6, or higher. At that point, consumers will flock to cars powered by cheaper domestically produced electricity.
Battery prices will drop. For a few years, we’ve been locked in a pattern where the price per kWh for an EV-grade lithium ion battery packs (fully installed with profit margins for makers) is hundreds of dollars away from some magical tipping point—at which time the price premium for a pure electric car will disappear. Real prices for EV battery packs are tightly guarded corporate secrets, so knowing what the packs cost is a guessing game. I hear anywhere from $200 to $800 kWh today. Regardless, cheaper batteries will give carmakers and consumers the choice to dramatically reduce cost or keep prices roughly where they are now while extending range.
Range will expand. Today’s real-world driving range of 80 miles or so is plenty good for most US drivers—if they only give it a chance. But let’s say there’s a 50 percent jump to 120 miles, or for extra money, a bigger leap to 200 miles—then it’s a game-over tipping point in favor of EVs, according to tipping-point theorists.
Quick charging will mean fast ubiquitous fill-ups. A big battery pack with longer range for a relatively affordable price is fantastic, but on some days and for some drivers, he ability to re-fuel in a time period that comes anywhere close to a gas car could be the lever to mass adoption. There are at least 100 DC Quick Chargers slated for the Bay Area in the next three to four years. Is that the tipping point?
This is my quick list of potential tipping points. (You might see other levers, like passage of smart carbon policy.) Will any of these happen? Nobody knows with absolute certainty. Can some combination of these—slightly higher gas prices with slightly cheaper batteries that offer slightly more range that can be charged at slightly more Quick Charge stations—line up to form the tipping point? Or will EV adoption follow the same very slow and modest curve experienced by hybrids over the past dozen years?
Dust off the old crystal ball and tell us what you see. Your guess is probably just as good as the next guy’s.
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