Electric Vehicles as Disruptive Technology

Think Progress describes the disruption arc of electric vehicle (EV) battery technology and its impact on the cost of electric vehicle and electrical power distribution.  The premise here is that EV batteries will shortly be a hot recycling item .

…what you may not realize is that major EV makers — BMW, GM, Nissan, Toyota — are now exploring how much value their EV battery has for use in the electricity storage market after that battery can no longer meet the strict requirements for powering its car. This potential second life for EV batteries is a clean energy game changer for two reasons:

 •  These used EV batteries hold the promise of much cheaper electricity storage for renewables than is available today.

•  If used EV batteries have value, then EV makers can charge less for their cars, making them even more affordable

 Together, these two factors make EVs even more disruptive than most people realize, particularly for enabling deep and rapid penetration of renewables in the 2020s. 

To achieve comparable costs to traditional internal combustion powered vehicles, batteries for EVs need to be in the $300 per kilowatt-hour (kWh) range.  In 2013, it was predicted that EV batteries would reach that milestone in 2020.  Whoops, battery costs hit $300 in 2014.  GM expects to pay $145 per kWh for batteries this year.

That’s how GM is able to offer its 200+ mile range EV later this year for a sticker price of $37,500 (and “as low as” $30,000 if the buyer gets the $7500 federal tax credit) — while still asserting they will make a substantial profit on the car.

The $300 per kWh cost projected for 2020 is now forecast to be $120 per kWh.  Part of the reason is the growth of a secondary market for “second-life” (used) EV batteries.  With a developing market for these batteries, that have 80% of their capability still intact after 8 to 10 years of useful vehicle life, then the manufacturer's ability to recoup much of the cost of the batteries will help drive battery cost down.  A flood of cheap energy storage is on its way.

When the trickle of second-life batteries turns into a flood, the business of electricity storage and demand response — both of which enable far deeper penetration of renewable power — will never be the same.

Maybe that's why Japan has more EV charging points that gas stations.