CMU study finds small battery PHEVs and gasoline hybrids the least-cost policy solution to reducing gasoline consumption

Comparison of current federal subsidy to base case assumptions showing lifetime fuel savings (HomeEve charging scenario). An EPA estimate based on the Chevy Volt’s reported efficiency is also included for comparison. The federal subsidy significantly favors larger battery packs to a stronger degree than their potential for additional gasoline savings. Peterson and Michalek 2012. Click to enlarge.

In an new study analyzing the cost-effectiveness of policies subsidizing electric-drive vehicle battery capacity and charging infrastructure installation to reduce gasoline consumption in the US, Scott Peterson and Jeremy Michalek of Carnegie Mellon University found that, under a wide range of scenarios, the least-cost solution is for more drivers to switch to low-capacity plug-in hybrid electric vehicles (PHEVs) or gasoline-powered hybrid electric vehicles (HEVs).

Comparing the subsidy necessary to achieve lifetime cost parity with the least-cost option for each vehicle class in the base case, they found that the maximum cost per gallon saved for increased all electric range (AER) is 5%–40% less than the minimum cost per gallon saved when installing charging infrastructure, depending on vehicle class. Looking forward as battery prices decrease and the AER resulting in maximum life-time cost savings increases, the relative value of plugging in multiple times throughout the day will also decline, they suggest. Their paper is available online in the journal Energy Policy.

(A 2011 paper by Michalek and colleagues found that strategies to promote adoption of HEVs and PHEVs with small battery packs offer more social benefits (i.e., air emissions and oil displacement benefits) in the near term per dollar spent than PHEVs and battery-electric vehicles (BEVs) with large battery packs providing longer electric range.)

Non-domestic charging infrastructure is generally not necessary for operation of PHEVs, and substantial gasoline displacement can be achieved solely with home charging. In contrast, the limited range of BEVs make non-domestic charging infrastructure more critical if the vehicles are to be used as primary vehicles. But public investment in either large-battery vehicles or charging infrastructure generally produces fewer benefits per dollar spent than investment in small-battery PHEVs (Michalek et al., 2011), suggesting that subsidizing sales of BEVs and installation of charging infrastructure are not the most efficient use of limited public funds.

If the purpose of existing federal PHEV subsidies is to reduce gasoline consumption, this implies that the policy subsidizes 4 kWh battery PHEVs at ~$1.25 per gallon saved while subsidizing 16 kWh battery PHEVs at roughly $4.50 per gallon saved, ignoring indirect effects. It is clear that federal subsidies are not currently aligned with the goal of decreased gasoline consumption in a consistent and efficient manner. Other relevant policy objectives, including reduction of emissions externalities, encouragement of technology development, and job creation do not show clear benefits of favoring large battery packs over small battery packs.

—Peterson and Michalek, 2012

Current Federal subsidies
The American Recovery and Reinvestment Act of 2009 (ARRA) provides a tax credit of $2,500 per PHEV sold (minimum 4kWh capacity) and an additional $417 for each additional kWh of battery capacity in excess of 4 kWh. This is capped at $7,500 for vehicles with a gross vehicle weight less than 14,000 lb.
This subsidy for a specific OEM’s vehicles declines to 50% then 25% in a phase-out period, which begins in the second calendar quarter after that manufacturer has sold 200,000 vehicles and lasts four calendar quarters.
The US Department of Energy (DOE) also granted $37 million for installing 4,600 charge points in specific markets around the US (>$8,000 per charge point) and granted $99.8 million to fund the EVProject, which is installing 14,000 Level 2 (208–240 V) chargers and a variety of other infrastructure and monitoring equipment.

To estimate the costs and gasoline savings of each approach, they calculated gasoline and electricity use by PHEVs of varying battery capacity under a range of charging scenarios. They then estimated the necessary charging infrastructure to enable each charging scenario, and then used the estimates of cost and gasoline displacement to compare across options.

In all cases, HEVs and PHEVs save gasoline over conventional vehicles. HEVs and some PHEVs can save both gasoline and total lifetime costs over conventional vehicles both at normative and observed implicit discount rates. They also found that the additional cost per gallon saved of alternatives—other than the least-cost option in each case—is higher than oil premium estimates, and charging infrastructure is orders of magnitude more expensive per gallon saved, even with optimistic assumptions for charging infrastructure. Peterson and Michalek deemed the findings robust across a wide range of sensitivity scenarios (available in the the supplemental information of the paper).

The authors suggest that redesigned policy should consider:

• Subsidize usable capacity, rather than total capacity. The Chevy Volt, for example, uses only about 65% of its 16 kWh capacity in order to improve safety and battery life. However, current federal subsidies are tied to total battery capacity rather than usable battery capacity or AER—i.e., it incentivizes the use of larger battery packs.
  Subsidizing usable capacity would remove the disincentive for automakers to figure out how to use a larger portion of the battery. Alternatively, subsidizing based on AER (as measured in a standardized test) would also encourage automakers to make vehicles more efficient, and removing the exclusion for lower-capacity lower-range vehicles would be more consistent with potential benefits.
• Subsidize estimated gasoline savings rather than battery capacity or AER. PHEVs have diminishing returns in gasoline savings as battery capacity increases. Subsidies intended to generate gasoline savings would be better if tied to estimated gasoline savings rather than battery capacity or AER, the authors suggest, and subsidies that are tied to battery capacity or AER should avoid a fixed rate per kWh or per mile and instead reflect the structure of diminishing returns.
  However, they add, methods for estimating gasoline savings may be controversial, and depending on what reference point is used, subsidies tied to gasoline savings could have unintended consequences, such as the potential for separate reference points in each vehicle class encouraging consumers to purchase larger vehicle classes.
• Consider temporary larger subsidies. The current subsidy of $2,500 for 4 kWh (~$1.25/gal saved) and $7,500 for 16kWh (~$4.50/gal saved) pays prices substantially higher than US oil premium estimates of $0.37/gal ($0.08–$0.96/gal). Subsidies intended to generate gasoline savings would preferably be comparable to the social value of gasoline savings (and the value of other social benefits). To the extent that larger subsidies are able to kick-start adoption and sustainable market acceptance of plug-in technologies that would not otherwise be adopted, temporary larger subsidies may be warranted. But the magnitude or duration of this dynamic effect remains highly uncertain.
• Target the goal, not the technology. More efficient policies generally target the policy goal, such as gasoline displacement, directly rather than a proxy, such as battery size.
  On economic efficiency grounds, subsidies are justified insofar as they correct for positive externalities, such as innovation knowledge spillover, and research funding is an alternative to subsidizing sales for achieving this effect.
  A more efficient way to address negative externalities is to apply Pigovian taxes (e.g., a carbon tax), which would increase the price of gasoline and make plug-in vehicles more competitive in the marketplace while encouraging the most efficient responses to reducing externalities, including not only alternative powertrains but also efficiency improvements and incentives to drive less and purchase smaller vehicles (as well as to make changes in other sectors of the economy). They authors acknowledged the political challenge of increasing or creating a tax.
• CAFE. Considering the presence of binding CAFE standards, the authors raised the question of whether EV subsidies will provide any net gasoline savings for the foreseeable future

Ignoring interactions with CAFE policy, HEVs and PHEVs with low AER and only home charging generally provide the largest direct gasoline savings per dollar spent, offering both lower costs and lower gasoline consumption than CVs, depending on the consumer’s discount rate. It is therefore possible that incentivizing a larger number of consumers to purchase HEVs or low-AER PHEVs would save more gasoline under a fixed policy budget than incentivizing a relatively smaller number of consumers to purchase high-AER PHEVs. However, given a fixed market of electrified vehicle adopters, if more gasoline savings is needed than what can be achieved with HEVs and low-AER PHEVs, additional savings can be achieved more efficiently by paying for additional AER than by paying for extra charging infrastructure.

—Peterson and Michalek, 2012

Source: Green Car Congress 

Green Cars 101: A Helpful Graphical Analysis of How it Works

In a compressed natural gas car, the fuel is "compressed to less than 1 percent of its volume." Or this: "A small solar energy system (1 to 2 kW) can provide 15,000 electric miles a year" to your plug-in car.

Those are just two of the pieces of information in the Green Cars 101 image from One Block Off The Grid. Most of the rest, admittedly, will be quite familiar to readers, but easy-to-understand information dumps like this are good to keep on hand to share with people who are just getting started in knowing their PHEVs from their BEVs.

See the full image below.

J.D. Power forecasts hybrid- and battery-electric vehicles will represent 7.3% of global auto sales in 2020

Here is a bleak forecast from J.D. Power:

J.D. Power forecast of hybrid-, plug-in hybrid- and battery-electric vehicle global sales through 2020. Click to enlarge.

A new report from J.D. Power and Associates estimates combined global sales of hybrid-electric vehicles (HEVs), plug-in hybrid-electric vehicles (PHEVs) and battery-electric vehicles (BEVs) will total 5.2 million units in 2020, or some 7.3% of the 70.9 million passenger vehicles forecasted to be sold worldwide by that year. Global HEV, PHEV and BEV sales in 2010 are forecasted to total 954,500 vehicles, or 2.2% of the 44.7 million vehicles projected to be sold through the end of 2010.

The report, titled “Drive Green 2020: More Hope than Reality” considers various factors affecting the future potential for “green” vehicles in the world’s largest automotive markets. These factors include market trends, regulatory environment, consumer sentiment and technology development in these markets.

Interest in HEVs and BEVs is driven by a dramatic reduction in or elimination of tailpipe emissions, and the increased fuel economy of these vehicle types helps reduce the world’s dependence on oil. The drawback to these technologies is that fossil fuels (principally oil and coal) are still used to produce the electricity that powers these vehicles, thereby eliminating some of the potential gains. Therefore, it is not clear whether there would be a substantial reduction in emissions by switching to these new powertrain technologies. In addition to questions about dependence on oil and reduction in emissions, battery packs are prohibitively expensive to manufacture on a large scale, and the disposal of depleted battery packs presents yet another environmental challenge. Perhaps most importantly, there are major hurdles that must be overcome regarding battery-based vehicles to ensure consumer acceptance.

—“Drive Green 2020: More Hope than Reality”

According to the report, it will be difficult to convince large numbers of consumers to switch from conventionally powered passenger vehicles to HEVs and BEVs. A consumer migration to alternative powertrain technologies will most likely require either one of the following scenarios, or some combination of these scenarios:

• A significant increase in the global price of petroleum-based fuels by 2020;
• A substantial breakthrough in green technologies that would reduce costs and improve consumer confidence; and/or
• A coordinated government policy to encourage consumers to purchase these vehicles.

Based on currently available information, J.D. Power concluded that none of these scenarios are likely during the next 10 years.

While considerable interest exists among governments, media and environmentalists in promoting HEVs and BEVs, consumers will ultimately decide whether these vehicles are commercially successful or not. Based on our research of consumer attitudes toward these technologies—and barring significant changes to public policy, including tax incentives and higher fuel economy standards—we don’t anticipate a mass migration to green vehicles in the coming decade.

—John Humphrey, senior vice president of automotive operations at J.D. Power and Associates

A different take
Oliver Hazimeh, partner and head of the global e-Mobility practice at PRTM, a global management consulting firm, has a different perspective on the prospects for electrified transportation.
“PRTM believes that it’s not a matter of if—but how fast and to what extent—different electrified vehicles will be adopted as we approach an electrification tipping point.
“PRTM estimates that there are different degrees of electrification with different penetration rates, i.e. by 2020 PRTM estimates that EVs will have a 4-5% adoption rate; plug in hybrid electric vehicles will be at 5-6%; and hybrid electric vehicles will reach 20%.

Breakdown of Global HEV and BEV Sales by 2020. Of the 5.2 million HEVs, PHEVs and BEVs forecasted to be sold worldwide in 2020, some 3.9 million units (about 5.5% of the market) are expected to be HEVs and PHEVs according to the J.D. Power and Associates global forecast numbers for the third-quarter of 2010. The leading markets are the United States (1.7 million units), Europe (977,000 units), and Japan (875,000 units). China is expected to sell fewer than 100,000 HEVs in 2020.

Of the 1.3 million BEVs projected to be sold worldwide in 2020 (about 1.8% of the market), sales in Europe will account for 742,000 units; sales in China will account for 332,000 units; and the United States and Japan should each account for sales of approximately 100,000 BEVs in 2020.

Consumer interest in alternative powertrains, pre- and post introduction of price premium. Click to enlarge.

Consumers. While consumers have a variety of concerns about HEVs and BEVs, J.D. Power said, more important are the personal financial implications of deciding to purchase an alternative-energy vehicle. While many consumers around the world say they are interested in HEVs and BEVs for the expected fuel savings and positive environmental impact they provide, their interest declines significantly when they learn of the price premium that comes with purchasing these vehicles.

While most consumers say they want to create a smaller personal carbon footprint, research shows this consideration carries relatively low weight in the vehicle purchase decision.

—“Drive Green 2020: More Hope than Reality”

The overall cost of ownership of HEVs and BEVs over the life of the vehicle is also not entirely clear to consumers, and there is still much confusion about how long one would have to own such a vehicle to realize cost savings on fuel, compared with a vehicle powered by a conventional internal combustion engine (ICE). The resale value of HEVs and BEVs, as well as the cost of replacing depleted battery packs, are other financial considerations that weigh heavily on consumers’ minds.

Finally, the report says, it is clear from research in the world’s largest automotive markets that buyers of hybrid and electric vehicles occupy a unique demographic niche. Buyers of HEVs and BEVs are generally older, more highly educated (possessing a postgraduate degree), high-income individuals who have a deep interest in technology, or who like to be among the early adopters of any new technology product. As a result, it is not clear that HEVs and BEVs will appeal to the general population.

Government Regulations. While the governments of the world’s largest automotive-producing nations have schedules in place for improving fuel economy and reducing exhaust emissions, there is little consensus about the timing or manner in which these objectives are to be achieved. Some governments are promoting HEVs, others are focusing on BEVs, and still others are considering additional options.

According to Humphrey, the lack of consistency in regulations across markets is causing global automakers to hedge their options by seeking alliances and technology-sharing agreements. The heavy fixed costs associated with developing multiple powertrain options simultaneously are prohibitively expensive. When combined with the projected lower sales volumes of these products, collaboration between auto companies is almost a necessity to control costs and remain competitive.

One unpredictable aspect of the 2020 outlook is how markets would be affected if more stringent and consistent legislation is adopted that supports specific technologies. In particular, China has the ability to move quickly, invest heavily in the development of one specific propulsion technology, and mandate fuel economy or emissions standards that could favor a particular technology or require a minimum sales penetration level for vehicles with a designated technology. Given the size and growth rate of the Chinese auto market, such a coordinated regulatory environment might allow Chinese companies to achieve economies of scale and drive down the cost of alternative-energy vehicles.

Source: Green Car Congress

Introducing the Nissan Fuga Hybrid Luxury Sedan

PRESS RELEASE:

YOKOHAMA (October 26, 2010) - Nissan Motor Co., Ltd. today announced the launch of the new Nissan Fuga Hybrid luxury sedan, which goes on sale November 2nd at Nissan dealers nationwide in Japan.

Nissan Fuga Hybrid

Since its launch in November 2009, the current generation Fuga luxury sedan has been acclaimed by customers for its beautiful dynamic design, spacious and comfortable interior, advanced performance and safety technologies, and its responsive, exhilarating driving experience. The new Fuga Hybrid builds on those features, adopting Nissan's original one-motor two-clutch parallel hybrid system named 'Intelligent Dual Clutch Control,' which combines a number of advanced environmental technologies. The new Nissan Fuga Hybrid achieves fuel economy of 19.0 km/L (10-15 mode) - comparable to that of a compact car, while also providing the direct feel and exhilarating driving performance of a luxury vehicle.

The Fuga Hybrid's 'Intelligent Dual Clutch Control' system connects the high-response electric motor and the 3.5-liter VQ35HR V6 engine directly to the transmission, without the use of a traditional torque converter. This simple, highly efficient and lightweight hybrid system contributes to fuel efficiency. In addition, since one of the two clutches completely disconnects the motor from the engine, quiet and highly efficient EV mode driving is realized. Compared to traditional hybrid systems, the electric motor driving range is expanded for high-speed driving (up to over 100km/h on a level highway) and the EV mode is frequently applied, helping the Fuga Hybrid achieve best-in-class fuel economy.

The compact, high-output lithium-ion battery is able to charge/discharge quickly. This contributes to high-speed, precise control of the electric motor and optimum clutch control, which both enable luxury driving with smooth shift quality and sharp, direct acceleration response. The Fuga Hybrid's new electronic 7-speed hybrid transmission with manual shift mode features optimized shift performance according to the motor's output characteristics. This combines with the updated 3.5-liter VQ35HR engine with higher efficiency to provide smooth and sustained acceleration.

Also contributing to the Fuga Hybrid's outstanding sport performance feel are the use of double-piston shock absorbers, and the first-ever application of both the advanced Electro-hydraulic Power Steering system and Electric Driven Intelligent Brake system, providing both high quality riding comfort and sophisticated, exhilarating driving.

The Nissan Fuga Hybrid VIP Package for executives adopts special features, such as power reclining rear seats, a built-in control switch in the rear center armrest, and an electrically operated rear window sunshade. Also offered is the Premium Interior Package, designed to provide an open, high-quality feeling with the extensive use of special materials, including semi-aniline leather with soft-to-the-touch and natural textures. Combined with the Comfort Suspension, the new Nissan flagship car creates exceptional levels of cabin comfort.

Along with its performance, technology and comfort, the new Nissan Fuga Hybrid achieves a 25% improvement in fuel economy over 2010 standards and SU-LEV certification, emitting 75% less exhaust compared to 2005 standards. This luxury sedan also qualifies for the 'next-generation vehicle' tax break provided through Japan's 'tax system to promote the diffusion of environmentally friendly vehicles,' *1 thereby fully exempting it from the automobile acquisition tax and automobile weight tax.

Also, in fiscal year 2010, Nissan introduces its two-pillar strategy to reduce CO2 emissions: 'Zero Emissions' and 'PURE DRIVE'. 'PURE DRIVE' vehicles are designed to achieve top-of-class fuel economy for mass-produced vehicles by equipping them with optimal next-generation eco- technologies, such as Idling Stop, Clean Diesel and Hybrid engines. The new Nissan Fuga Hybrid is the third in the series of 'PURE DRIVE' vehicles to be introduced in Japan.

● Exterior

• 18-inch aluminum-alloy wheels with chrome color coating
• Available in a choice of seven body colors, including a new Eternal Snow White (a special Titanium Metallic color with Scratch Shield)

● Mechanism and equipment

• Nissan original one-motor two-clutch parallel hybrid system, 'Intelligent Dual Clutch Control'
• High-output lithium-ion battery with a quick charge/discharge function
• Advanced 'HM34' electric motor with maximum power output of 50kW（68PS） and maximum torque of 270N・m（27.5kgf・m）
• Special engine for hybrid 'VQ35HR' with maximum power of 225kW（306PS）/6800rpm and maximum torque of 350N・m（35.7kgf・m）/5000rpm）
• Electronic 7-speed hybrid transmission with manual shift mode
• Safety Shield Package with Intelligent Control Assist (Distance Control Assist), Intelligent Cruise Control, FCW (Forward Collision Warning), Intelligent Brake Assist/Emergency Brake Operated Pre-crash Front Seat Belts, LDP (Lane Departure Prevention)/LDW (Lane Departure Warning), VDC (Vehicle Dynamic Control including TCS), and ECO-pedal)
• Electro-hydraulic Power Steering system, which drives the pump by electric motor to generate hydraulic pressure
• Electric Driven Intelligent Brake, with applied electric type booster
• Regenerative braking system
• World's first adoption*2 of an opposite direction driving warning system, which gives the driver audio and visual warnings when the vehicle detects that it is going in the opposite direction on highways based on the vehicle driving information (vehicle speed, GPS location, map information in the car navigation system)
• 'Approaching Vehicle Sound for Pedestrians' (AVSP) system, which makes sound from the start of the vehicle until the vehicle speed reaches 30km/h and when it slows to under 25km/h; it also generates an intermittent sound when the vehicle is in reverse
• Double-piston shock absorbers, which utilize a double-piston structure to help control damping force according to vibration frequency from the road surface
• 'Forest AC' air conditioning system, with an electric compressor used to operate the air conditioner while the engine is not in motion

● Eco-Drive Support Function

• Special meter display for the Nissan Fuga Hybrid which shows various information, including operating conditions of the hybrid system (Energy Monitor), battery remaining capacity, Accelerator Guide, ECO-drive Indicator and a liquid-crystal odometer/twin trip meter (with an EV mode travel distance display function)
• CARWINGS Navigation System, which can simultaneously show Energy Monitor, the average/instant fuel economy and the map on the monitor (HDD system with a terrestrial digital TV tuner)

Price range: 5,775,000 yen to 6,300,000 yen, including consumption tax

Daimler Trucks North America and Walmart develop hybrid-electric Class 8 Cascadia

Hybrid electric Cascadia. Click to enlarge.

Daimler Trucks North America LLC (DTNA) and Walmart have collaborated to build the first hybrid electric Freightliner Cascadia. This truck also marks the beginning of a long-term strategic partnership between DTNA and Walmart to develop innovative, green technologies.

Developed based on a Walmart spec’d truck, the 72-inch raised-roof Detroit Diesel DD15-equipped Cascadia features a parallel hybrid system based on an electrically-driven second drive axle. The system uses an advanced lithium-ion-based energy storage and advanced electronic control algorithms that were developed in collaboration with the Daimler Trucks Global Hybrid Center in Japan.

With this hybrid system, the conventional drivetrain remains completely intact, allowing for high system reliability from the very beginning. In addition, initial assessments of fuel efficiency further indicate the potential of this technology.

Long-time customer Walmart will work closely with DTNA engineers to create new products that will ultimately serve as a roadmap to future innovations. Walmart has explored other Class 8 hybrid options. (Earlier post.)

The new advanced engineering partnership with Walmart highlights our commitment to green technologies as well as our desire to work closely with core customers to continue developing alternative fuel vehicles. We look forward to seeing what else this joint venture will result in, and to providing Walmart and all of our customers with the right tools that will positively impact their bottom line.

—Mark Lampert, senior vice president of sales and marketing for Daimler Trucks North America

DTNA already offers products powered by alternative technologies, including the Freightliner Business Class M2 106 Hybrid (earlier post), and the Freightliner Business Class M2 112 natural gas lineup.

Source: Green Car Congress

Mitsubish to Increase Production of Li-ion Anode Material

The All-Electric Mitsubishi iMiEV

Mitsubishi Chemical will increase its production capacity of anode materials for rechargable lithium-ion batteries to 7,000 tons annually by next May from its current output level of 3,000 tons.

The company currently produces an annual 3,000 tons of anode materials at a facility in Kagawa Prefecture; output is already scheduled to increase to 5,000 tons in December. Mitsubishi will boost that by an additional 2,000 tons next May.

The company said it is responding to growing demand for lithium ion batteries for electric and hybrid vehicles.

Mitsubishi Chemical controls 20% of the global market for anode materials and intends to boost that share to 35% by 2015.

In addition to anode materials, Mitsubishi also produces cathode materials, separators and electrolytes.