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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:
http://www.electricdrive.org/index.php?ht=d/sp/i/2...

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
http://bigstory.ap.org/article/despite-court-rulin...

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.

quote:
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.

quote:
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


"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke














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