A few thoughts about battery strategies
Getting old sure is fun, and funny, especially in terms of technology. As a boy, renting a VCR for the weekend was one of the greatest technological highlights of my pre-teen years. Of course, eventually my family bought a VCR, with no regard to the whole betamax versus vhs debate. Ultimately, the only thing that mattered to my parents was price.
And that brings me to the future of the battery-powered car and the battery strategies being utilized in the Tesla Model S, the Chevy Volt and the Toyota Prius plug-in hybrid.
Which is better? Which is smarter?
Today, we learned that the upcoming Tesla Model S electric car will begin at $49,900 — after a $7500 federal tax credit. The top line Model S will begin at $79,900, also after the tax credit. Thus, the Model S is the most expensive vehicle, but also the most battery-intensive vehicle, in this plug-in bunch.
So does that make Tesla the best and most forward thinking auto brand? Is there yet really a best plan or approach to electrification?
Hybrid king Toyota believes that current battery technologies are completely incapable of achieving even modest mainstream penetration without massive government incentives. Even then, plug-in vehicles still face a limited future for many years, possibly even decades, without a major battery breakthrough. In fact a next gen battery technology breakthrough, such as lithium-air, might be required for double digit market penetration.
In the interim, Toyota claims hybrid cars, including plug-in hybrids like the Prius plug-in, will offer more cost-effectiveness and they’ll also fall more in line with consumer expectations. And as batteries become more cost-effective, battery size can simply be adjusted.
GM is taking a similar, but slightly different path than Toyota with its range extended Chevy Volt. The Volt is basically an electric car, as long as you only drive less than 40 miles between charges. After that a gasoline engine generates additional electricity. Unfortunately, the Volt requires a larger battery pack than the plug-in Prius, resulting in greater costs.
To be certain, as battery costs decline, perhaps the Volt’s 40 miles of EV range will eventually find itself in the sweet spot of battery costs, but it also seems that the Prius would be able to take advantage of this cost decline as well.
Thus, the main difference between GM and Toyota is one of timelines and sales.
GM, for instance, is betting that only a small percentage of consumers — around 10 percent or less — are going to be willing to pay extra for any battery powered or assisted vehicle through the next decade. For now the Volt is more of a halo product with interim-to-long term potential.
Ironically, while Toyota’s plug-in range seems the least compelling, it’s actually the most aggressive battery plan. Toyota believes that battery vehicle penetration could be as high as 30 percent or more by 2020, and that’s why Toyota’s focus is on price, or the cheapest plug-in vehicles possible, with the least drawbacks to consumers.
Therefore, when it comes to overall sales — at least through the next decade — Toyota is going to blow the competition away.
Tesla, on the other hand, will claim that the future is full electrification. Once battery costs scale and decline, it will ultimately be too expensive to have two different drivetrains — making both the Volt and the plug-in Prius irrelevant.
Maybe. While that’s a very logical argument based upon long term technological expectations, such an approach is nevertheless an unreasonable assumption for a major automaker like either Toyota or GM.
Tesla just doesn’t care about mainstream solutions. Tesla doesn’t have to sell millions, or even hundreds of thousands, of vehicles every year. It’s not a mainstream brand and it won’t be for at least a decade, if ever. Tesla is only going to manufacture and sell electric cars, regardless of how small or large the market. Tesla just doesn’t care about today, nor even tomorrow. Tesla’s focus is much further into the future. Again, that approach can work for a startup like Tesla, but not for companies like GM and Toyota.
Furthermore, like betamax versus VHS, picking technological winners isn’t always as obvious as it seems.
For instance, a combination of fuel cells and batteries might eventually offer the best mix of cost and range in terms of electrified drivetrains, and both GM and Toyota are well prepared for such an eventuality, while Tesla is not.
Likewise, despite the ‘range anxiety is over’ hype coming from electric vehicle PR and marketing spin, range could be the deciding factor. Just like VHS versus betamax, price wasn’t the only factor, regardless of the fact that betamax seemed like a superior technology. It was also recording capabilities that helped determine the winner.
Ironically, my parents never recorded one single show on our VCR when I was a kid. I’d bet like most parents at that time, the whole recording process just seemed too complex. It was the idea that they could record more than betamax while costing less, even if the picture wasn’t as good.
Thus, when mainstream shoppers look at plug-ins with 150, 300, 400 or even 500 or miles of range — whether pure electric or mixed — coupled with upfront price, the most logical and even the most cost-effective long term technology might not win.
It’s not always about what we really need, but what we think we want.
Anyway, for now it’s all about interim technologies and markets, and in that regard Toyota is kicking ass, but that doesn’t mean that Toyota has the future cornered. Despite the fact that Toyota is taking the most methodical and aggressive path towards electrification, consumer expectations and technological breakthroughs could still turn future predictions and forecasts upside down.
As the comparison between the Model S versus the Volt versus the Prius plug-in demonstrates, the future of electrification is still wide open and far from certain. Anyone that claims otherwise probably has an old betamax player in their closet.