Examining The Issues Faced By The Battery Electric Vehicles (BEV) Industry

by Trefis Team
Tesla Motors
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The global auto industry is currently dominated by vehicles that run on conventional fuels, but newly available engine technologies which are cleaner and potentially far more cost effective may permanently alter the structure of the industry. We take a look at some of the potential obstacles faced by the electric vehicle industry with a focus on battery electric vehicles.

Electric vehicles can be broadly divided into three categories based on the mechanism of motor propulsion. These are Hybrid Electric Vehicles (HEVs), Plug-in Hybrids (PHEVs) and Battery Electric Vehicles (BEVs). Without getting into the specifics on how these vehicles function, for the purpose of our analysis, we focus on the fact that HEVs rely the most on conventional fuels (petroleum) while BEVs require absolutely no fuel, and PHEVs are midway between the two in terms of fuel requirements.

From an ideal standpoint, BEVs offer the best long-term solution to the automotive industry as zero fuel requirements imply minimal operating costs and no damage to environment. However, there are a number of issues to consider before putting them ahead of the pack.

High Battery Costs

High battery costs have made BEVs far more expensive on average than comparable conventional engine vehicles like HEVs and PHEVs. This has proved to be a huge deterrent to the mass market and is expected to remain so until there is substantial reduction in battery costs. However, based on a 2011 report by clean-tech market intelligence firm Pike Research, battery prices are expected to drop by one-third by 2017. [1] Tesla is betting hugely on such estimates considering that it plans to launch the Gen III in 2015, expected to be made available at prices as low as $30,000 and intended to target the mass market.

Issues with Recharging

Another major issue faced by the BEV industry is around battery recharging. Firstly, these vehicles take an unreasonably long amount of time to recharge. For example, the 2011 Nissan Leaf is estimated to take anywhere between 7.5 and 22 hours to charge a fully dead battery. This is obviously a huge problem for the car owners as they may not have sufficient time to charge their BEV cars depending on their daily commuting distance. BEV manufacturers are well aware of this issue and are developing charging equipment capable of much faster charging rates. Tesla is among the pioneers in this technology and plans to make these “superchargers” available by next year.

The battery charging station availability poses to be an issue as well. BEVs can be charged at home, but owners would prefer to have the choice of charging their vehicles away from home as well, in a manner similar to conventional fuel stations. This especially holds true for long-distance commuters. Many governments are setting up initiatives to develop charging station networks in anticipation of the growing BEV market, but it is still uncertain whether such an infrastructure would be developed anytime soon.

Negative Perception of BEVs

The final issue is the perception of BEVs among prospective buyers. Although it is clear that BEVs offer a far superior long-term solution to the automotive industry compared to conventional fuel vehicles, the majority of the world’s population may not be so receptive, yet. This is because of a number of reasons.

First, there is a widespread belief that batteries are unsafe and may lead to disasters. There have been considerable improvements made to ensure battery safety, but the negative perception remains.

Second, and a more realistic concern, is the limited range currently offered by BEVs. This has to do with battery storage capacity and efficiency. Tesla again leads in this domain. It offers battery packs of up to 85 kWh, which translates to a range of 300 miles. We believe that as BEVs gain more market penetration, the general perception of these vehicles will improve.

Overall, although BEVs are definitely the ideal long-term solution for the automotive industry, the industry currently faces a number of issues. We believe that BEVs will see a number of breakthroughs in the next couple of decades, and will become a formidable force in the auto industry in the long term.

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  1. Prices for Lithium Ion Batteries Will Fall by More Than One-Third by 2017, Pike Research, March 2012 []
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  • commented 5 years ago
  • tags: TSLA F HMC
  • Jack--Your comment hit the nail on the head and is one the reasons why rechargeable battery EVs have been a failure for over a hundred years,The finest designed internal combustion engine (ICE) powered automobile is useless without fuel (gasoline, alcohol, natural gas, etc.).
    The finest designed electric vehicle (EV) powered automobile is useless without a power supply (rechargeable batteries, Fuel Cells).
    For the idea of an EV ( for which I am for--for many reasons) we see the ONLY power supply available, other than the battery, is the Fuel Cell. Why the Fuel Cell? The Fuel Cell allows an EV to operate like an ICE. As long as there is fuel available, the car will go and give the same performance as a comparable ICE. The Fuel Cell is a direct conversion device, there just ain't anything better than that. As your comment showed, all heat engine driven electric generators are indirect devices, thereby limiting their efficiency, with the waste products adding to the polution. All the financial drivel that the financial writers like to throw out to the public in order to impress us with their financial acumen dosen't have a thing to do with the success or failure of ANY RCBEV project. It is a technical problem, not a financial one. And that technical problem is the battery, or as might be said "it's the battery stupid." When the ignorant public finally wakes up to this simple fact, the RCBEV will be nothing more than a glitch in history. Of course, the financial writers will write long dissertations analyzing the failure to death as financial one (or more) completely ignoring the truth, because that is how they make their money--writing financial drivel.
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  • commented 5 years ago
  • tags: TSLA F HMC
  • Electric vehicles offer the best environmental solution only if the electricity is made from renewable sources. This is because most electricity made in the U.S. is made from coal or natural gas. Considering the coal case we have to mine the coal, ship the coal, burn the coal to produce electricity, transmit the electricity to the place where the car is to be charged, and charge the battery. Each one of these steps uses energy so that more than half of the energy is wasted before the electricity ever gets a chance to power a car. Natural gas generated electricity is somewhat better but still has many of the disadvantages of coal. Compare this to a vehicle operating on natural gas. Producing natural gas and transmitting it through pipelines to be used directly in a car, truck or bus, uses only a small portion of the energy required to generate and power a car on that electricity. Since renewable electricity makes up only a very small portion of electricity generated in the country and since it is likely to grow very slowly because of competition from natural gas produced electricity it seams to me we should be doing all we can to switch our vehicles over to natural gas if we are truly interested in reducing green house gases in the next 25 years.