When the blogging gets tough, the tough bloggers get outsourcing, and since we’re swamped with fresh news and sales numbers, I’m going to throw this little mystery over to you, TTAC’s Best and Brightest. It’s no secret that the Obama Administration is bullish on plug-in cars, as it seeks to put a million of the fuel-efficient vehicles on the road by 2015. And though several studies have shown that the White House’s goal is wildly overambitious and needs more money or a major spike in gas prices, and though even the DOE’s assessment shows that the goal is unrealistic, EV optimism springs eternal. So, whence cometh this profound, unshakeable belief that the EV is going to go from production-constrained curiosity to significant market player in just a few years?
A clue to that can be found in a Wall Street Journal [sub] profile of oil man Harold Hamm, the discoverer of a reputed 24b barrels of oil in the Montana/Dakota Bakken fields.
When it was Mr. Hamm’s turn to talk briefly with President Obama, “I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this.”
The president’s reaction? “He turned to me and said, ‘Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.’” Mr. Hamm holds his head in his hands and says, “Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing.”
What makes this so strange is that the President expressed his optimism in an MPG format. It’s one thing to say EV battery prices will drop by 70% between 2010 and 2015 (even when the CEO of LG Chem says his firm is targeting 50% improvement), or even to say that US battery manufacturing will go from 2% of the global total in 2010 to 40% in 2015… these, like the “one million plug-ins on the road” pledge are straightforward targets. But 130 MPG based on some mysterious battery? There are so many moving parts in that goal, it’s not even funny. As the image above proves, you can order a car from Mitsubishi that is EPA-rated at 126 MPG in the city and 99 MPg on the highway… but it’s small, has only 62 miles of EPA-rated range, and starts near $30,000. Size, price, are all more important to consumers than an MPG rating for a vehicle that doesn’t even take gas, and these three factors all have the potential to decrease overall efficiency.
Presumably, President Obama was using a number from a briefing that used an average size, weight, range and price and projected the required battery size and power for a typical car, and found that by 2015 a 130 MPG-equivalent, average-sized EV would sell for not much more than an equivalent ICE or hybrid. But given that nearly every estimate about EVs ever given out by the administration looks wildly overoptimistic, it’s tough to take that estimate at face value. So I’m wondering, do we know how Obama came up with this number? Is he referring to price drops on traditional lithium-ion cells, or a new chemistry that is expected to be on the road by 2015? FInally, is the president referring to a battery produced by the “domestic industry” or one of the dominant foreign firms and their transplant factories? This private “130 MPG” revelation seems to underpin so much of the president’s optimism about EVs, I think it’s worth taking a much closer look at.