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Chu promises big battery price cuts, but doesn't say how

The Obama administration continues to push electric vehicles despite the fact that they have sold very poorly around the country. There are number of reasons why consumers haven't adopted electric vehicles in larger numbers, the biggest of which are the cost of the vehicles and range anxiety. The component that adds the most cost to EVs is undoubtedly the battery pack.

U.S. Energy Secretary Steven Chu has announced that the federal government is working to dramatically reduce the cost of battery technology for electric vehicles. Cheaper batteries would mean that automakers could [ideally] sell their EVs and hybrid vehicles that utilize rechargeable battery packs at a lower price.

President Obama wants 1 million plug-in electric vehicles and hybrids on highways around the United States by 2015. Currently, the federal government offers a $7,500 tax credit for people who purchase electric vehicles and Obama has been pushing to increase the tax credit to $10,000.

"It's ambitious, but we'll see what happens," said Chu during a talk with reporters during the Washington Auto Show.

"For the engineers in the room or those who follow this, you might be saying to yourself, 'What are they smoking,'" Chu said about aggressive plans to cut the price of batteries. "We're not smoking anything…. They are ambitious goals but they are achievable goals."

The original report from Washington supporting the goal of 1 million plug-in vehicles on the roads by 2015 expected Ford to sell 20,000 Focus EVs in 2012. Ford sold fewer than 700 of the vehicles and has resorted to significant price cuts to spur demand. Chevrolet also sold only 24,000 Volts in 2012 while the report had predicted 120,000.

Source: Detroit News

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That last paragraph
By Manch on 2/1/2013 9:47:36 AM , Rating: 5
That's why people are wondering what they are smoking.

RE: That last paragraph
By Jedi2155 on 2/1/2013 9:54:55 AM , Rating: 2
Even some people in the EV industry wonder what they are smoking. There are mandates and there are damn crazy mandates.

RE: That last paragraph
By Mint on 2/1/2013 10:49:16 AM , Rating: 3
They probably expected a little more competition to come out a little sooner (and the auto makers probably told them that).

The Focus EV now has a list price $11k higher than the Leaf. Hell, Ford's own C-Max Energi has a full gas drivetrain in there and it's $7000 cheaper. Of course the Focus EV needs a price cut, but I guess Ford just wanted to get some cream from rich Ford die-hards with that model.

~1/4 of C-Max sales are the plugin version, so plugins will sell if they're priced appropriately (i.e. like a hybrid with a bigger battery). Plugin sales are increasing fast and they'll only continue to do so:

I say their prediction of 1M total EV sales is off by around 18 months. Not a big deal.

RE: That last paragraph
By Manch on 2/1/2013 11:33:29 AM , Rating: 3
I think they knew damn well that their numbers were overinflated. Consider the 17month spread between the release of the Volt and the Focus EV, I see no reason why the numbers on that report remained inflated other than to continue to push an agenda to try and legitimize the fleecing of tax payers at 7.5K a pop.

If that rebate was working and people were wanting to buy these then they wouldn't be pushing for an increased rebate.

For regular cars that nobody wants, car makers/dealers increase rebates to try and get them out the door. The difference is that rebate dips into that companies pocket book, not mine.

Also, I think in de-incentivizes car makers to drive down there costs when good ol Uncle Sam is doing it for them.

RE: That last paragraph
By Mint on 2/1/2013 3:24:48 PM , Rating: 4
You don't have a very good grasp of economics.

Why do you think the Focus EV sold 700 cars while the Leaf sold 10,000? I'll tell you why: The Focus EV is a ripoff. Despite the tax credit, Nissan decided to sell the Leaf for a much lower price, and now they cut another $6000 off the price.

So who did better, the company trying to pocket part of the subsidy or the company reducing costs and passing the discount on to consumers? There's no lack of incentive to make progress.

RE: That last paragraph
By jimbojimbo on 2/1/2013 4:02:12 PM , Rating: 2
Yes, it seems like automakers are determining a price to sell their cars then adding $7500 to the total because of the tax credit. That's $7500 in their pockets, not ours and consumers aren't buying it.

RE: That last paragraph
By Mint on 2/1/2013 5:45:03 PM , Rating: 3
You're not paying attention, are you.

This is a competitive market. Ford priced their EV $5000 higher than Nissan's, and as a result sold less than 1/10th of them. You will NOT succeed if you add $7500 to the price that you can profitably sell it at.

Nissan also just lowered their price by $6400 when they got local production started. That is a direct refutation of your claim.

RE: That last paragraph
By Jeffk464 on 2/1/2013 5:34:15 PM , Rating: 2
The ford focus chassis is a much nicer more expensive chassis then what the leaf is based on. Nissan went with the cheapest possible platform to lower the total price. Personally I think Testla's idea makes more sense, if a car is going to be expensive it better be nice.

RE: That last paragraph
By Mint on 2/1/2013 5:51:44 PM , Rating: 3
Much more expensive? A regular Focus starts at $16,000. How many comparable cars are much cheaper?

No way does the Focus EV's chassis account for anything but a small fraction of the $11000 price difference.

RE: That last paragraph
By Jeffk464 on 2/1/2013 7:52:35 PM , Rating: 2
Yup you're right the Nissan versa costs $14,600, I thought they went for about $12,000. I was a nissan mechanic for a couple of years and can tell you they are really cheapo cars, sentras are pretty bad to. The focus is much, much nicer.

RE: That last paragraph
By Jeffk464 on 2/1/2013 11:07:25 PM , Rating: 2
Uhm sounds like I called all nissan's cheapo, nope just the versa and sentra.

RE: That last paragraph
By Manch on 2/1/2013 10:52:38 PM , Rating: 2
Its a lower price because its less of a car. The leaf is air cooled vs liquid cooled for the focus. Theres more tech in the focus than the leaf. Regardless of that they're both rip offs. Just one is less so.

Nissans reduction of the leafs price isn't just because they moved production to the states. It's also because they aren't fucking selling you damn moron. The amount of leafs sold went down by half from 2011 to 2012 in the US, a fourth in Japan and in other countries by half. only Europe did it have an uptick.

Also again there is a 17month spread between when each car was released. The focus wasn't even available nationwide until Q3 2012.

No matter how you try to slice those numbers, the plain simple truth is these cars aren't selling, and increasing the government dole out will not significantly impact the willingness of the public to purchase these types of vehicles.
Since both cars receive the subsidy, both companies profit from it!

Tesla has it right. They charge a lot of money for expensive tech. just like airbags, power windows and everything else that was once the realm of luxury, they will eventually come down in price, and the performance will go up. Then and only then does it make sense for the average buyer to look at these as a viable option.

Pull your head out of your dick and realize that just because people are against subsidies, it doesn't mean they are against the tech.

RE: That last paragraph
By Manch on 2/1/2013 11:59:02 AM , Rating: 2

Wishful thinking for this administration is limited to EVs.

RE: That last paragraph
By Mint on 2/1/2013 2:43:43 PM , Rating: 2
You do realize that target is 0.13% of annual ethanol production, right?

Of course you don't, because you don't do any thinking for yourself. Also, it's not a very rigid mandate if production didn't hit the mandated levels last year.

Anyway, cellulosic ethanol is something everyone wants to get going ASAP, because it displaces corn-based ethanol (which is not so bad economically now that it's subsidy-free, but still has some negative side effects).

RE: That last paragraph
By Manch on 2/1/2013 10:30:00 PM , Rating: 2
Listen here dick milk. You're side stepping the point because it doesn't fit into your little world. The point of that link was that this administration has constantly over inflated goals, targets, mandates or whatever to push unfeasible and unrealistic agendas.

you take any criticism as a be all end all rant against anything hybrid, green etc. I have no issue with products that pursue that goal. I have a problem with the government pushing things that do not work. I do not like the government trying to pick winners and losers. I do not like the government gambling with tax payers dollars. it's idiotic and pricey.

I think hybrids can stand on their own without government assistance. I do not believe that phevs are ready. If and when the tech becomes available to do this then fine.

Look at other industries they have tried to game. Solar? Wind? It's been nothing but a disaster.

RE: That last paragraph
By Paj on 2/4/2013 8:18:20 AM , Rating: 2
I love it when people think the only private industries that the US government supports are wind, solar and EVs. I also love it when they think that 100% of these initiatives fail.

I have a problem with the government pushing things that do not work.

You have to keep pushing things until they work. Early internet infrastructure was garbage. The Manhattan Project was ridiculously inefficient - yet where would society be without their modern antecedents?

No first generation technology works as well as it could - that's why you iterate and improve.

I do not like the government trying to pick winners and losers.

Many projects don't get off the ground otherwise.

RE: That last paragraph
By GotThumbs on 2/4/2013 6:09:38 PM , Rating: 2
The problem is that the administration talks out of their a$$eS and expects it to become fact because they say it's so. Ever hear of the great Oz? It's all a show.

Current leadership (used generously) will always tell you the sky is clear and sunny, even when it's cloudy and raining on you. They live in a different reality than everyone else and haven't come down from their acid trip yet.

so much stuff the general public still has no clue about. Just happy drinking the cool-aid and singing Kumbaya.

Best wishes for surviving the next four years,

RE: That last paragraph
By jack daniels esq on 2/12/2013 11:37:44 AM , Rating: 2
O'Banana has been a bong-man since college - gotta be the major reason ObamyCare will offer free bong to everyone

Volt is small
By gmyx on 2/1/2013 1:08:17 PM , Rating: 2
I had a chance to see the Volt over the weekend - it was on display at a local mall.

My first reaction was cool, the Volt. Then after looking at the cabin, I quickly realized that is seems way to small for a day to day car for a family. It's only use might be a single-user commuting vehicle.

It didn't even look that comfortable with the middle hump so high. And then I saw the price... no thanks.

RE: Volt is small
By grooves21 on 2/1/2013 1:30:04 PM , Rating: 2
Electric cars are several generations away from being viable.

Their small range and long charging times will keep most consumers from adopting them. I don't care if 95% of the time nearly all consumers stay within that range and aren't affected by it. If they travel great distances even ONCE per year it is unusable and unreasonable to expect people will buy them when they will have to have a second car (gasoline) available ... or worse be forced to rent for those times. This is an even bigger problem when you are paying a premium to drive an electric car, and it can't meet all of your needs.

Tesla has the right idea with their Supercharging stations, but even so 30min charging times on a long trip are a bit much.

It's the same reason Trucks are so popular. Most people don't regularly haul/tow things... but they need it for when they do and don't want to have multiple cars or rely on others when they do need it.

RE: Volt is small
By jimbojimbo on 2/1/2013 4:09:30 PM , Rating: 2
You do know that the Volt uses gasoline as well and has the same range as any gas powered car? Just making sure since your post could fall under a discussion about a Leaf but you're responding directly to a post about the Volt.

RE: Volt is small
By Mint on 2/1/2013 5:59:02 PM , Rating: 2
Pure EVs are primarily intended to be second cars. When you need to drive longer distance, you use your household's primary car.

But for everyone else, there's PHEV. The Volt's a bit expensive, but the C-Max Energi isn't. It works just like any other car when you exceed the electric range.

RE: Volt is small
By foxalopex on 2/4/2013 1:16:11 PM , Rating: 2
Actually the Volt and C-Max Energi isn't a good comparison. The Volt has a much larger battery and more powerful electric drive system making it a faster and a much longer range electric. where I live the rebate is based on the size of battery so price wise the Energi is only $2 grand or so cheaper which is a poor trade-off considering how much you lose. And the trade off for the 5th seat is a huge battery pack in the trunk which takes up cargo space and gives you a weaker center of gravity. (The volt pulls tight turns better.)

RE: Volt is small
By Dr. Kenneth Noisewater on 2/1/2013 1:40:07 PM , Rating: 2
It's a pretty comfy ride and I'm a big guy (6'4" >300lbs), though the back seat is darned small and suitable really only for children or shorter adults. Back seats fold down for increased storage, which comes in handy.

I do wish higher-density battery techs (Envia, LiS, etc) get here sooner though. I'd like 50+ mile range in winter within the same battery weight and size budget in my next EREV (or better yet get a lighter genset and use that weight for more battery)..

RE: Volt is small
By dgingerich on 2/1/2013 2:33:41 PM , Rating: 2
That sounds a lot like my 2005 Monte Carlo: comfy up front but really small, near useless, back seats.

Rare Earth Metals
By Spookster on 2/1/2013 2:10:13 PM , Rating: 2
Unless they plan to invade China and take over their rare Earth metal mines so China no longer controls most of the world supply and run the prices up anymore then I don't see how that will happen.

RE: Rare Earth Metals
By dgingerich on 2/1/2013 2:34:40 PM , Rating: 2
There are already plans in the works for reopening the rare earth mines here in the US. It's just going to take about 5 years.

RE: Rare Earth Metals
By jimbojimbo on 2/1/2013 4:14:08 PM , Rating: 2
The sad thing is environmentalists will delay opening of the mines because mining is so decremental to nature. The environmentalists want us to walk barefoot everywhere. The US is so tied up with litigation everything takes forever and even if mining convenes due to the litigation costs the prices of those mined minerals will be raised much higher than the prices from China.

RE: Rare Earth Metals
By Mint on 2/1/2013 6:05:43 PM , Rating: 2
The rare earth metal problem is blown totally out of proportion.

Their biggest use in hybrid cars was in NiMH batteries, but they've now been replaced by lithium ion.

DC motors need some for magnets, but modern electronics make induction motors almost as competitive, and they have no magnets.

The Tesla Model S, for example, doesn't use any rare earth metals in the drivetrain.

They don't mention one thing
By dgingerich on 2/1/2013 2:30:34 PM , Rating: 4
There are number of reasons why consumers haven't adopted electric vehicles in larger numbers, the biggest of which are the cost of the vehicles and range anxiety.

There are a great many people out there who have an additional problem with electrical vehicles: charging them. This is probably the third biggest concern, if not higher, and they never mention it.

How are people in apartments and condos, who happen to be a pretty significant part of the US population, supposed to charge these things? How about people who have no driveway or garage, which are a significant minority of the homeowner population? How about people with older houses where the garage doesn't have the necessary wiring to handle that much load? Include all those people, and you likely have at least 50% of the population who can't buy an electrical vehicle because they can't charge it. Duh.

Politicians are so out of touch with regular people's lives, and yet people continue to trust them! This country needs an enema.

By Philippine Mango on 2/1/2013 4:26:52 PM , Rating: 2
These problems I'm sure will be resolved eventually. Achieving Obama's plan of 1M electric cars isn't that big of a deal when you consider how many cars there are on the roads today. There are certainly more than 1M people who would find an electric car to be suitable for them. It's going to take at least 30 years before electric cars see mass adoption. Uptake of electric cars could accelerate significantly if cars are offered with a fast charge option within 15 minutes and it doesn't damage the batteries.

Chu resigns
By Mint on 2/1/2013 6:22:15 PM , Rating: 3
Not sure if DT is going to make another topic about it, but it's a pretty big development.

RE: Chu resigns
By kattanna on 2/4/2013 11:13:08 AM , Rating: 2

If battery prices dropped
By jimbojimbo on 2/1/2013 4:00:10 PM , Rating: 2
Let's say total battery prices for a vehicle dropped by $2000. The automakers would only cut $1000 off the bottom price. They'll benefit plenty from the tax dollars going to work to research cheaper batteries.

a modest proposal
By DockScience on 2/2/2013 4:59:00 PM , Rating: 2
Since the government would steal $7500 from my neighbors to help me buy a Tesla sports car, wouldn't it be ok for me to steal $750 worth of gas per year from their cars' gas tanks to pay for overpriced gas and just cut out the middleman?

Hey, I am on a fixed retirement income.
I NEED this redistribution of wealth.

The 1900s
By johnsmith9875 on 2/4/2013 9:23:18 PM , Rating: 2
Automobiles were very poor sellers in the USA until Henry Ford created an inexpensive one. Its just a matter of hitting a magic price point for EV's.

By GloriaHiggs22 on 2/2/2013 6:28:30 PM , Rating: 1
until I saw the bank draft that said $9264, I didn't believe brothers friend could realie taking home money in there spare time at there computar.. there moms best frend started doing this for under twenty months and as of now repayed the dept on there house and purchased a top of the range Nissan GT-R:. I went here,Fox76.comCHECK IT OUT

By BettyGibbs22 on 2/3/2013 8:24:47 PM , Rating: 1
before I looked at the draft ov $6529, I did not believe brother really receiving money parttime from their laptop.. there mums best friend haz done this for less than 10 months and resently paid for the debts on their appartment and bourt a top of the range Mitsubishi Evo. we looked here, Fox76.comCHECK IT OUT

By Beenthere on 2/1/13, Rating: -1
By Skywalker123 on 2/4/2013 7:29:51 PM , Rating: 1
Too bad no one will pay to fix your cranium up your rectum problem.

By Dr of crap on 2/1/2013 1:01:02 PM , Rating: 2
The govt throws rebates and other money at the industry to make the batteries APPEAR cheaper, it's just you and me and our taxes paying the "hidden" higher cost.

IF there was a freaking demand for these things that might be another thing, but they are NOT selling. WHY DOES THE GOVT WANT US driving these battery powered things?

WHY not push and throw money at ALL alternative powered cars, instead of focusing on just battery power??????
By that I mean bio-diesel, CNG, fuel-cell, and the other pieces that the good old ICE can use that I've read about that could make the mpgs higher than they are now. But no they ONLY FOCUS on battery power, good for only a small part of the populous!

By Mint on 2/1/2013 5:34:40 PM , Rating: 2
but they are NOT selling
Why are you so desperate to push this falsehood?
EV sales TRIPLED last year. The Volt's sales in the last two years almost matched all of GM's other hybrids. Price reductions and awareness are only going to increase sales further.

WHY not push and throw money at ALL alternative powered cars, instead of focusing on just battery power?????? By that I mean bio-diesel, CNG, fuel-cell, and the other pieces that the good old ICE can use that I've read about that could make the mpgs higher than they are now.
Fuel cell doesn't have significant refueling infrastructure, so it will need a much larger investment to get off the ground. Expanded biodiesel use is a fuel production issue, and there is money being invested into it.

I'll agree that CNG is something worth considering, but prices are really volatile. Many experts are saying the current price glut is only temporary. The natural gas Civic costs more than the hybrid while giving much lower mileage, so even today's $2/gge doesn't save much, unless you pump at home, which involves a costly install.

EVs have a couple inherent advantages to other alternative fuels. Night-time electricity will always be much cheaper than gasoline. Basic infrastructure is already in place at every home.

By Stan11003 on 2/1/2013 2:37:06 PM , Rating: 2
The same can be said for Oil, Corn and most crops, beef, etc. The Federal, State and local governments have been investing in business for a long time. This is really not different.

By Rukkian on 2/1/2013 2:54:04 PM , Rating: 2
Not sure how it is different from just about any other industry. Why does the goverment subsidize people buying houses (mortgage interest deduction), giving to charity (another deduction), etc, etc, etc.

Throughout our history, the government has been pushing agendas. I do not agree with the tax breaks on these cars, but not because I do not think the cars are a good choice, it is that the government should not be picking winners and loosers. There should be no tax breaks, it should be a flat tax (with a floor), but no ceiling, with no deductions, credits, breaks, etc.

By Mint on 2/1/2013 3:48:46 PM , Rating: 2
The gov't can't make EVs a winner. All it can do it give it a nudge to give it a chance when nobody wants to take the first step due to risk (and other companies profiting down the road from their pioneering investment).

By the time the EV subsidy expires, we're looking at around $7B. Total auto sales will be around $3T in that time. Gov't influence is a drop in the bucket (not even close to 1%), but it's enough to get the ball rolling.

"Vista runs on Atom ... It's just no one uses it". -- Intel CEO Paul Otellini

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