World No.1 EV Maker Separates Its Battery Business

While Tesla tried very hard but still could not meet its sales target of 80,000 cars last year, China-based EV maker BYD sold 507,000 electric cars in the same year.

Just to put things more perspective, Tesla plans to deliver 500,000 cars in 2018, largely with the hope of its highly anticipated Model 3. Yet, many people view Tesla’s goal near impossible.

Now the largest EV maker BYD, according to Gasgoo, plans to separate its EV battery operation. Yes, the company happens to be the No. 1 battery maker in China as well, with a current capacity of 16 GWh and another 10 GWh under construction.

BYD’s EV batteries are mostly going into its own electric cars. In the future, the new battery subsidiary will supply to outside customers as well.

Electric Car Startups Backed by Chinese Firms – Part 1

It is the booming age for electric car startups. Interestingly, many such companies have a strong tie with Chinese firms. In this article, we will look at Karma Automotive, Faraday Future and NextEV (Nio).

Karma Automotive

Karma Automotive is a subsidiary of Chinese auto parts company Wanxiang. Wanxiang acquired the bankrupted Fisker Automotive in 2014 and renamed it as Karma Automotive earlier this year.

The headquarters of Karma Automotive are located in Costa Mesa of California, which they ended up buying in April for $56.25million. The company’s factory is located in Moreno Valley of California. Besides, Karma’s controlling company Wanxiang is interested in building a new auto plant in Hanzhou, China. The factory will be able to produce 50 thousand Karma vehicles annually.

Karma Automotive launched its first luxury car Revero on September 8th. The MSRP starts at $130,000. Potential customers can go to Karma dealership to order. Revero is based on the previous Fisker Karma plug-in hybrid, but now uses technologies from BMW. The company plans to build 3,000 units per year. Another model Atlantic, a low-cost 2-door electric car, is in the pipeline.

Faraday Future

Faraday Future was founded in 2014 and the headquarters is in Gardena, California. The company is reportedly backed by Chinese LeEco’s boss Yueting Jia.

Faraday Future released an eye-catching concept electric supercar FFZero1 during CES 2016, featuring a versatile Variable Platform Architecture (VPA). This is pretty much what we know about its product so far. There either is a target time to launch any product.

On the other hand, the company is expanding very rapidly. According to its website, there are over 1,400 people globally already. Faraday Future has attracted top talents in the industry, e.g. an automation expert from Apple.  However, recently some top executives left the company.

Facility-wise, a $1billion 900-acre factory is under construction in North Las Vegas, and another 157-acre formal naval shipyard near Silicon Valley is in negotiation. Recently, Faraday Future downsized the Las Vegas plant to 650,000 square feet. It will be completed by end of August this year. Moreover, Faraday Future will work together with LeEco on the latter’s planned $1.8billion EV factory in China, manufacturing 400,000 cars annually.

Faraday Future launched FF91 model in January this year. The cost would be “less than $300,000”. There were over 64,000 reservations within 36 hours of its debut. The delivery is expected to start in 2018.

Faraday Future has been granted to test self-driving cars on the road in California. It is also running a Formula E racing team – Faraday Future Dragon Racing.

NextEV (NIO in the US)

This less-than-2-year old company has already launch two electric cars.

The first one is a supercar named NIO EP9 with massive 1 megawatt of power (or 1,360 horsepower). The car was caught at the Nuerburgring, filming commercial footage. The supercar will cost $1.48million and Next EV plans to build only 10 of them. It will be available in China and US.

The second on is a 7-seater electric SUV – NIO ES8. The car will be capable of swapping the battery. Sales will be stated in 2018.

The China-based startup has offices all around the world including London, Munich and Silicon Valley. Top industrial executives like former Ford Europe boss Martin Leach and former Cisco CTO Padmasree Warrior have been involved with NextEV. Leach visions NextEV to be automaker version 3.0, a level up from Tesla’s version 2.0 over-the-air connectivity.

According to NextEV website, the company plans to build a half-billion motor plant in Nanjing China. It also has formed strategic partnership with Chinese carmaker JAC which will potentially be worth nearly $1.5 billion. There is a joint venture with China Changan Automobile.

NextEV joined Formula E race in its inaugural season and its racer Nelson Piquet Jr. won the championship in 2014/2015 season.

Model 3 Pre-order is a Nice Marketing Move for Tesla

On March 31th, Tesla Motors started to accept pre-orders for Model 3 – its 215-mile, $35,000 entry-level luxury electric car in the make. People were lining up at the stores, waiting for hours to make a reservation, something quite unusual for car sales.  In the first 24 hours, the number of pre-orders reached 180 thousand. Then in 1 week, the number climbed up to 325 thousand. This is huge, considering, for the whole year of 2015, only 114,022 vehicles with a plug were sold in the US.

Larger than the pre-orders is that it gets Tesla enough attention – Model 3 topics are trending everywhere; people are tracking the numbers; news all over place etc. Everybody seems to get hyped about the concept car.

The reason I say this is that, if you think about it, the pre-order has little to do with the commitment of eventually owning a Model 3.

The $1,000 reservation fee is totally refundable at any time before one actually orders the car. So there is little commitment from potential buyers who put in $1,000. The refundability makes the decision on pre-order very easy – it is like “I might be interested in getting a Model 3. Let me just put $1,000 for now. If I change my mind, I just ask for my money back.”

One argument for the necessity of pre-order is that it can make the buyer eligible for government incentives. One such incentive is the federal tax credit of up to $7,500 in the US (And Tesla sales in the US does account for more than 50% of its total sales in the past). The caveat is that this tax credit is applied to only the first 200,000 electric cars sold by Tesla in the US. Considering 60k+ of those have gone to Model S already so far already, if your pre-order number is over 200 thousand, the chance for your to claim the full amount of tax credit is very slim.

However, afterwards, buyers may still be able to get some tax credit during the “phase-out period” (half or quarter of $7,500 in the first 2 quarters and the next 2 quarters respectively). Then the question comes to how many cars Tesla can possibly manufacture during the “phase-out period”. Given the rate at which the number of pre-orders grows, the production capability needs to be boosted exponentially in order to help buyers get at least something for the federal government.

On the other hand, Model 3 is pretty much a concept car at the moment – meaning things can change over the next one and half years. One thing is related to the pricing. $35,000 for an entry-level luxury car with an expensive high energy battery feels a bit unreal. In comparison, the price for the not-so-luxury Chevy Bolt electric car with similar electro-range starts at $37,500.

Therefore, the pre-order event is a successful marketing move for Tesla to a large extent. The success is built on Tesla’s populated fan base. This makes even more sense since Tesla is known for using social media to promote instead of traditional advertising.

For the class of 200-mile electric cars, Chevy Bolt will start delivery later this year and the new-generation Nissan LEAF is targeting year 2018 (similar timeline as Model 3). Just with a concept car and this pre-order event, Model 3 nicely steals the thunder.

Newer Technology Fuel Cell Cars Enter Market

You may have heard of electric cars and how great they can save on monthly driving expenses. There are not a lot of them on the road yet (last year, 0.6% of new car sales in the US went to electric cars), but many people see electric cars as the future. Talking about future, it makes sense that carmakers do not put all in on electric cars. So, while electric cars are still making their case as your next car, fuel cell cars start to join the competition, like Toyota Mirai and Hyundai Tuscon Fuel Cell.

A little background – a fuel cell uses fuel and oxygen to electrochemically generate electricity. Then the electricity can be used to power a car. Regarding the fuel, hydrogen is a common one and as you can see, the product of hydrogen and oxygen is pure water. To some degree, a fuel cell car is also an electric car, but is very different from the more popular lithium-ion battery powered electric car.

Fuel cell cars (FCV) have distinct advantages and limitations over battery electric cars (EV).

In terms of advantages, 1) FCVs take comparable time to fill up hydrogen as regular cars do with gas; 2) the range on a single tank of hydrogen can easily reach 300 miles.

In terms of limitations, 1) the cost and the dependence on platinum catalysts need to be significant reduced; 2) the availability of hydrogen stations is very limited right now and it is not something you can do at home.

There are a few noticeable models around or planned to launch in the near future.

Toyota seems to be the most devoted carmaker when it comes to FCV. In fact, it considers FCVs to be the prevailing car technology in the future rather than battery electric cars. Toyota Mirai was launched in Japan in late 2014 and was introduced into the US one year later. The MSRP is $57,500. The leasing is $499/month with $3,649 down payment. The EPA range is 312 miles or 512 km. The hydrogen tank can accommodate 5kg. The total power is 113 kW or 151 hp. 0-60 mph acceleration takes 9 seconds. 2016 Hyundai Tucson Fuel Cell is available through leasing. The 36-month lease is with $499 monthly and $2,999 down payment. The max range is 265 miles. The hydrogen tank can store 5.63 kg. The fuel cell outputs 100 kW and the car has 134 hp. 0-60 mph acceleration takes 12.5 seconds.

Moreover, Honda Clarity plans to come to the US later this year. Mercedes-Benz GLC EV will arrive in 2017. Audi showed Q8 h-tron concept during 2016 Detroit Auto Show. Lexus LF-LC concept was exhibited during the same event.

FCVs enjoy similar government incentives in the US as EVs. For example, $4,000 federal tax credit is available through Dec 31 2016 for vehicles no more than 8,500 pounds. In California, owners can get $5,000 rebate from the state.

Thoughts on Forecasting 35% of New Car Sales from Electric Vehicles by 2040

A few days ago, Bloomberg New Energy Finance (BNEF, owned by Bloomberg L.P.) published a forecast on global electric vehicle sales. The study suggested that, by 2040, 35% of new car sales will come from electric cars, which equals a total of 41 million electric cars sold annually. In 2015, 462,000 electric vehicles were sold worldwide, accounting for half of a percent of total car sales.

In order to reach 35%, electric car sales will need an “S” trend to happen in the future. There are basically three stages in terms of the “S” trend – an initial acceptance period with slow growth, followed by a period of rapid market growth, and then entering another slow period after saturation. Things like smartphones and color TVs and even the hybrid cars to some extent all have followed this trend.

For electric cars, the kickoff on sales will mainly rely on two factors according to the report – drop of battery cost as well as decrease in oil demand.

Regarding the battery cost, BNEF anticipates the pack cost to be $120/kWh by 2030. The timing is less aggressive (and maybe more realistic) than that set by USABC (a consortium formed by GM, Ford and Fiat Chrysler). USABC targets year 2020 for the pack cost to go below $125/kWh. Carmakers think electric cars will have a comparable cost to regular cars when the battery cost decreases to this level.

The battery pack cost has been dropping over the years. It is around $300/kWh for the upcoming Chevrolet Bolt. Korean battery maker LG Chem will build the pack together with other powertrain components in the car, which helps reduce the cost.

Regarding the oil demand, the report argued that when 2 million barrels of oil per day are replaced by driving electric cars, the sales will take off. 2 million barrels per day surplus is believed to cause the plunge of oil price in 2014. This day would come as early as 2023.

2 million barrels of oil equal to 84 million gallons. In 2013, the average fleet light duty vehicle fuel efficiency in the US is 21.6 mpg. Assuming a 5% annual improvement, the fuel efficiency will become 35.2 mpg by 2023. Say cars drive 35.2 miles per day on average (or about 13,000 miles per year), then they will consume 1 gallon of oil per day per vehicle. Therefore, 84 million gallons mean 84 million electric cars on the road in total. Considering that there are 1.3 million EVs on the road right now, 84 million is really a very exciting number.

The BNEF report also indicated that plug-in hybrid sales will reach the peak around 2030 and then starts to drop down. Plug-in hybrids, as a transitional new energy vehicle technology, should have their reasons to stay on the market for longer time: 1) since the battery size is usually smaller than that of all-electric cars, the costs of plug-in hybrids are less sensitive to battery cost; 2) plug-in hybrid cars can run all-electric for short range commuters and run hybrid for longer range, both of which have much better mpge than regular cars; 3) plug-in hybrids can be easier for consumers to accept than all-electric cars. After all, electric cars not only need to be cost competitive, but also rely on breakthroughs in other areas like fast charging and charger infrastructure construction.

In this regard, plug-in hybrids may have a chance to follow the growth pattern of hybrid cars. Carmakers are acting too. For example, BMW and Mercedes-Benz have plans to build plug-in hybrid versions of the majority of their lineups in 2020-2025 timeframe.

It is also interesting to notice the shift of views on the future for oil over time. Initially, it was concerned that oil would be depleted before alternative car technologies become mature. Then, there was a theory that the depleting oil would drive up the price and force the alternatives to become mainstream. Now, people start to think that someone may end up holding the useless barrel. Electric cars have helped shape the shift of views.

Why Carmakers Sell Electric Cars

It seems like the majority of carmakers have big plans on electric cars and many have started to sell them – Over 200,000 Nissan LEAF have been sold so far, Tesla will announce Model 3 (with three horizontal bars to represent it) and complete its “SEX” lineup, BMW launched its i Series brand and GM will start to deliver world’s first mass-produced 200-mile Chevy Bolt electric car. The electric car sales in the US as well as China passed 1% of total car sales in 2015.

(i3 fleet ready for shipping. Credit: BMW)
(i3 fleet ready for shipping. Credit: BMW)
(GM Chevrolet Volt and Bolt at 2016 Chicago Auto Show. © General Motors.)
(GM Chevrolet Volt and Bolt at 2016 Chicago Auto Show. © General Motors.)

Electric cars still have obvious limitations at the moment.

Firstly, cost is high. The major add-on cost is from the battery pack. For example, Chevy Bolt is equipped with a 60 kWh pack and unit cost can be $300/kWh. So the battery cost is already at $18,000. The MSRP is $37,500. Therefore, the battery cost would account for 48% of car price.

Secondly, there is concern about the possibly fast depreciation of the car over time. As a result, 75% of electric car buyers chose to lease the car in 2015.

Thirdly, range anxiety. Although most people drive less than 100 miles a day, simply the idea of a total range of 100 miles can freak them out. In this regard, affordable 200-mile Bolt and Model 3 can potentially make a big impact on the market. Plug-in hybrid is another valid option.

In addition, there are things like slow charging, hot/cold weather conditions, safety etc.

Then why are carmakers still so enthusiastic about electric cars?

The biggest driver for boosting electric car sales comes from the government. They are committed to reduce greenhouse gas emissions. One highlight is the recent Paris Climate Deal.

There are two major approach governments take when it comes to the adoption of electric cars – restraining and promoting. Especially in large car markets like US and China, carmakers have to follow government rules for them to do business there.

In terms of restraining, e.g., US has an emission credit system. Carmakers selling vehicles in the US need to turn in a certain number of credits to the government annually. They earn credits by selling electric cars. If one company cannot sell enough electric cars, they either need to pay a high penalty for the difference, or buy credits from other companies. Therefore, some brands are willing to sell electric cars at a loss to collect emission credits. Reportedly, Fiat Chrysler spent over $300 million in 2014 to purchase credits from Toyota, Honda and Tesla.

In China, by 2020, a car company’s average fuel economy needs to reach 47 mpg. Electric cars are very helpful in this regard. For one thing, electric cars have much better fuel economy than conventional cars. On top of that, each electric car is counted as three in the fleet average fuel economy calculation right now.

The regulations in some areas can be a bit too stringent for carmakers to stay profitable and competitive. One unfortunate example would be the recent VW diesel emission scandal.

So, in the case of electric cars, governments are helping selling them as well. Many countries have incentive programs. US offers up to $7,500 tax credit to electric car buyers (Please see our previous post on What You Can Get From Government for Getting an Electric Car in California). Ontario of Canada has rebate program with a maximum of $13,000. Germany plans to use $705 million to promote electric car sales.

Governments are also backing the construction of charging infrastructures. California has the plan support the charging of 1 million electric cars by 2020. Most recently, the state issued $4 million grant to build charging stations along its north-south corridors.

Debate on Issuing More Green HOV Lane Decals in California

Before Dec. 18, 2015, when people bought plug-in hybrid electric cars (PHEV) in California, they could apply for a green HOV lane decal and enjoy driving in the carpool lane without having to drag another person on board. Now this perk is somehow in jeopardy for new PHEV buyers, as all 85,000 decals are gone. DMV is still accepting new applications, but at the moment it is unclear if more decals will be issued or not.

(Morning commute in California. The left lane is the HOV lane.)
(Morning commute in California. The left lane is the HOV lane.)

The increase in the green decal limit has happened 3 times in the past. Originally, in Jan. 1, 2011, 40,000 decals were authorized. Three and half years later on Jul. 1, 2014, the limit was increased by 15,000, which brought the total to 55,000. Half a year later on Jan. 1, 2015, another 15,000 were added. And again after half a year, on Jul. 1, 2015, the most recent 15,000 were added to reach a new total of 85,000.  These decals are good until Jan. 1, 2019.

The question is: Should California consider issuing more green decals?

On one hand, the EV sales have not seen a sign of taking off yet. According to the data published by Electric Drive Transportation Association, 114,022 PHEV and EV were sold nationwide in 2015, down from 118,773 in 2014, although all vehicle sales rose by 5.8% in 2015.  Another piece of evidence is that it took longer time to use up the green decals in 2015 than in 2014.

Although all-electric cars have unlimited white decals to use the carpool lane, the range anxiety makes PHEV an appealing option to many green car lovers. And carpool lane access definitely is a plus in decision making. President Obama’s 1 million EV goal by 2015 was only 40% accomplished, but we can make effort on the 1.5 million goal for California by 2025.

In year 2007 when California decided to cap the yellow HOV decals for regular hybrid cars at 85,000, 91,417 of them were sold in the state. In comparison, the PHEV sales in 2015 in California can be just one third of that number. Plus, oil prices dropped to 11 year low recently and may stay low for a decade as predicted by Vitol CEO Ian Taylor.  In this regard, there is still a need to promote PHEV sales and green decals for sure will be helpful.

On the other hand, the pressure on HOV lane capacity needs to take into consideration. When the 85,000 yellow HOV decals were terminated on Jul. 1, 2011, there were probably less than 4,000 all-electric cars on the road. Now, besides 85,000 PHEVs, there should be a similar number of EVs which can use the carpool lane as well.

Another option would be to issue new green decals only to PHEVs capable of e.g. 60 miles or plus on electric. For one thing, these PHEVs will run on battery mode for most of the time (hopefully), so they are closer to zero-emission than PHEVs with a small battery. For another thing, PHEV technologies are becoming mature. On this note, BMW is adding PHEV versions to all of its core-brand models in the next few years (Please see our article Things About BMW i3 and More) and Mercedes-Benz will roll out 10 PHEV models by 2017.

The previous increases of the limit occurred in roughly 2 months after the limit was reached. The 40,000 limit was reached on May 9, 2014 and the increase followed on Jul. 1, 2014. The 55,000 limit was reached on Sept. 23, 2014 and an increase was made on Jan. 1, 2015. The 70,000 limit was reached around mid-May, 2015, which was followed by an increase on Jul. 1, 2015.

So it would be too much of a rush to have passed a bill on Jan. 1, 2016, considering the limit of 85,000 had not been reached until Dec. 18, 2015. Last time, AB 95 was approved on Jun. 15 by the Legislature and Governor Jerry Brown signed it into effect on Jul. 1. However, if it is urgent enough, a new bill can take effect right after authorization.

Things About BMW i3 and More

My wife is a fan of BMW and wants a Bimmer as her next car. I suggest her to get an electric one and she really likes the idea. i3 is out there already. The car got a unique look. However, to us, it looks like anything but a BMW. I am pretty sure this is exactly what BMW hopes for, since i3 represents a new BMW brand – the BMW i.

(i3. Credit: BMW)
(i3. Credit: BMW)
(i3. Credit: BMW)
(i3. Credit: BMW)

The current generation came out in 2013. The all-electric model can go 81 miles on a charge, powdered by a 22 kWh battery and a 168 hp electric motor. With the range extender, the total range can reach 150 miles. The range extender is a small 647 cc engine (also in some BMW motorcycles). But unlike regular cars, the “motorcycle” engine operates as a generator and power the electric motor. With a 1.9 gallon gas tank, the engine can work for 69 miles on top of the electro-range.

i3 is BMW’s first mass-produced electric car, but the company already started to test out its electric technologies on the road as early as 2009. The first round is between 2009 and 2011, on Mini E, which is based on standard Mini Cooper with a 35 kWh lithium ion battery. After the leasing ended, most of them went back to BMW for testing, exhibition etc. Some batteries were repurposed into a 200 kWh storage system for smart grid, at BMW’s office in the San Francisco Bay Area. (Please see our post Second-life Applications Could Help Reduce the Cost of EV Batteries)

The second round of field trial is on BMW ActiveE, a model based on 1 Series. It took place in 2012-2014, through a 2-year lease program. The car has a 32 kWh battery. Again, the cars were collected back by BMW after the program.

Back to i3, it is slightly larger than 1 Series, but not as big as 3 Series. The MSRP is $42,400 for the all-electric model and $46,250 for the range-extended model. i3 is quite popular in the US, ranked at 4th place among electric cars in terms of units sold in 2015. And the car may not be as expensive as it seems like. There was a post online saying in California, the lease could have been as low as surprising $130/month with no money down, thanks to various rebates and incentives. On the other hand, it should also be taken into the equation the possible increase in car insurance as well as charger installation cost though.

Another thing, the 2017 model which should be coming out later this year is reported to receive a boost in electro-range to 120 miles.

(i8. Credit: BMW)
(i8. Credit: BMW)

i8 is the other current member of BMW i. it is a plug-in hybrid supercar with a 0-60 mph of 4.4 seconds. The battery in it is 7.1 kWh. It sells for $140,700 in the US. An i8 Spyder convertible version may also be produced in the future. (Please see our post Summary on Electric Vehicles at CES 2016)

And more are supposed to come into the i family, soon. i5 reportedly is coming close to the decision on body style – between a bigger i3 crossover and a regular-sized sedan. The debut can be later this year and the delivery next year.  It might be a plug-in hybrid with a total power of high 640 hp and electrorange of 78 miles, an article said. Furthermore, an i6 might also be in the pipeline, targeting for 2020.

BMW is apparently not limiting its electrification to only BMW i brand, but extending it to the BMW brand as well. The company is working on adding plug-in hybrid versions to all of its core-brand models.

2016 X5 xDrive40e and 2016 328e should be around already. 2016 330e  and 2016 X1 xDrive30e should come out later in the year. 740e may follow in late 2016. 530e, 540e and M3 can come out in 2017/2018 timeframe.

These plug-in hybrids have 13-25 miles as the electrorange. BMW also plans to double that range as its next-generation plug-in hybrid powertrains roll out around 2020.

(X5 xDrive40e. Credit: BMW)
(X5 xDrive40e. Credit: BMW)

Second-life Applications Could Help Reduce the Cost of EV Batteries

High battery cost keeps the cost of electric vehicles (EV) high. As a result, carmakers still are relying on government incentives to sell EVs at somewhat more acceptable price. It was recently reported on Forbes that the cost of battery pack in the new 200-mile Chevrolet Bolt would be significantly reduced to under $300/kWh (The packs will be supplied by LG Chem). It is interesting to notice that some existing battery replacement plans/warranties have already put the $/kWh well below 300.

General Motors Chairman and CEO Mary Barra drives the 2017 Chevrolet Bolt EV onto the stage Monday, January 11, 2016 at the North American International Auto Show in Detroit, Michigan. GM Executive Vice President Product Development Mark Reuss rides in the passenger seat. The Bolt EV offers more than 200 miles of range on a full charge at a price below $30,000 after Federal tax credits. (Photo by Jeffrey Sauger for Chevrolet)
(Photo: Barra Drives Chevrolet Bolt EV Into NAIAS Spotlight, on January 11 2016. © General Motors.)

More than 3 years ago, Tesla introduced a warranty option to replace the 85 kWh battery pack for $12,000; That equals to $141/kWh. In 2014, the Chevrolet Volt 16 kWh battery pack was seen sold at $2,994.64 or $187/kWh. In the same year, Nissan announced the battery replacement plan for LEAF. The cost is $5,499 including $1,000 for trading-in the old battery. The $6,499 total cost leads to $271/kWh. (More data on cell/pack price can be found at our homepage.)

The gap in battery cost can be partly filled by the batteries’ second-life applications.

EVs have stringent requirements on their batteries. To name a few – 1) EV batteries need to be weigh/space efficient to fit into a car, meaning high energy densities; 2) EV batteries need to be cycled in wide SOC windows (60-80%) to drive a long enough range on one charge; 3) EV batteries need to be able to deliver enough (like 70-80%) energy as battery ages, so drivers do not get angry with decreasing range; 4) EV batteries need to be able to deal with difficult load conditions like acceleration and fast charging.

That being said, end-of-life EV batteries are not dead batteries really. They can still serve well in less stringent conditions anywhere from huge MWh front-of-the-meter grid stationary storage to tiny portable power bank for your phone.

In any of these cases, high energy density is no long a must, batteries can be cycled in a narrow SOC window, batteries can retain less energy and the load conditions can be relatively mild and constant.

In November 2015, Daimler announced the plan to build a 13 MWh grid storage unit in Germany. It uses repurposed batteries from the electric car Daimler smart. The project was claimed to be the largest of its kind (with second-life batteries).

Nissan partners with Green Charge Networks to reuse its EV batteries for electrochemical energy storage (EES) applications. The behind-the-meter battery system can store electricity when the demand is low and produce electricity as the demand spikes. So users can save on demand charges. There was rumor that these old batteries would cost around $100/kWh.

Tesla reportedly has plans to give its EV batteries a second life as well. The residential energy storage product Powerwall sells for $3,000 per unit of 7 kWh. Can there be second-life batteries utilized?

For now, second-life applications can help reduce the price for battery replacement. How they can benefit EV buyers from the very beginning can be a quite interesting area to explore.

Moreover, battery reliability during the life span of an all-electric car or a plug-in hybrid lacks enough real-life data to support, since most of popular models came in after 2010. There were reports on cars like Nissan LEAF that the energy retention after a few years of driving was better than originally projected. Whether these cars need to replace the battery at all or not still would be an open question. And this would have an impact on how we see used electric cars.

It feels like electric car is but only a new technology, but also can change many things in our lives when they prevail.

 

Panasonic, LG Chem and Samsung Invest Big in Electric Vehicle Batteries

Panasonic’s President Kazuhiro Tsuga confirmed during the recent CES 2016, that the company plans to invest up to $1.6 billion in the Tesla Gigafactory. The two companies signed an agreement on Gigafactory collabration back in July 2014.

Until this point, the general impression had been that Panasonic was cautious about pouring big chunk of money into the project. In Oct 2014, Kazuhiro Tsuga said that the company’s initial investment would be tens of billions of Japanese yen (hundreds of millions of US dollars) and there would be further installments of similar amounts. The Gigafactory was also reported to be 40% bigger than the original plan.

Gigafactory apparently is not the only move for Panasonic. In June, it laid out an investment plan worth 60 billion Japanese yen (or $514 million based on current rate) for automotive section, in this fiscal year ending March 2016.

In December of 2015, Panasonic also announced that it will build a new battery plant in Dalian, China. The investment was said to be 50 billion Japanese yen (or $428 million based on current rate). The plant is expected to start production in 2017 and be dedicated to EV batteries.

In line with the company’s increasing interest in EV battery market, Panasonic closed a battery plant in Beijing, in August 2015. The plant was running for 15 years already. Originally part of Sanyo, it became Panasonic after Sanyo was acquired in 2010. The shutdown reportedly cost 1,300 people to lose their jobs. This factory in Beijing was mainly producing batteries for old-fashioned cell phones and cameras.

Other giant battery makers are taking actions as well.

For example, LG Chem plans to invest a total of $3.5 billion in a battery plant in Nanjing, China. The construction of Phase 1 is already completed in October, 2015. It cost $500 million. After production starts, the plant is expected to supply batteries to 50 thousand all-electric cars and 180 thousand plug-in hybrids.

The Phase 1 plant is as large as 80 thousand square meters (or 0.86 million square feet). Although not even close to the size of Gigafactory, LG Chem does plan to add more capacity, a total of 4 times of the current capacity by 2020.

Moreover, LG Chem is interested in not just providing cells. For GM’s soon-to-come Chevrolet Bolt electric car (Please see our previous post on Summary on Electric Vehicles at CES 2016), LG Chem reportedly will build the battery management system, the motor and the power electronics as well.

Samsung SDI is also growing. EV battery is becoming one of the new focuses for Samsung Group.  Samsung Group sold its petrochemical and defense units in 2014 and its chemical business in 2015. On the other hand, Samsung SDI acquired Magna International’s battery pack business in 2015. A new battery plant in Xi’an, China will also go into production this year. The capacity is enough for 40 thousand electric cars. Samsung SDI is expected to invest $600 million in total in this project by 2020.