The Fractured Tipping Point Moat

[SteveG3]

What about 3rd party battery suppliers increasing their output

LG is adding production capacity at its battery factory for Chevy Volt, Bolt EV and Chrysler Pacifica

Korea-based electronic giant LG is making most of the components that make the Chevy Bolt EV an electric vehicle, including the battery pack, electric motor, and power electronics, and the battery packs for the Volt. Therefore, its production capacity will determine GM’s total output for what is currently its only all-electric vehicle in production. In what could be a good sign for the Bolt EV and the Volt, LG announced this week an expansion of its production facility in Holland, Michigan.

Last year, the plant had two of the three assembly lines operating 24 hours a day and a fourth line on the way. It had an annual production capacity of 650 MWh, which would allow for only a few thousand Bolt EV or a few ten of thousands Volt battery packs. But the company said that it could rise to 3 GWh at full capacity and the fourth line alone could have already pushed the capacity passed 1 GWh.

@flatsix, see comment #53 to ecarfan.

 

[SteveG3]

BMW readies radical battery technology for 2026 launch | Autocar

BMW expects a breakthrough in battery technology in 2026, by which time it plans to have solid-state batteries ready for production in its models.

The batteries are in development but 10 years away from production, with long-term durability testing cited as a key reason for the delay.

Thanks for posting this Rob. Perhaps for some of the incumbents, staying up on that cliff of milking ICE sales for more years will use future technology as PR messaging for what they are doing. That is, something like, "we're all for EVs, it's just that we have a responsibility not to effectively throw money away on investments in battery technology that is on the cusp of being obsoleted. Solid state (fuel cells, tbd) are just around the corner, and they are going to deliver the no compromise alternative to ICE vehicles that today's battery tech just cannot offer."

Check out this CNBC video from a few days ago, where Continental's CEO says that solid state will be ready about 2025, and around 2030 we will probably see the beginning of the decline of ICE sales. The way he delivers it, the fact that he's in the industry but not actually an automaker and he's got this quite specific scenario in mind (including ICE sales not diminishing until 2030), and the way it fits with the "50 foot cliff analogy" kicking the move to EVs down the road, it feels to me like a rehearsed talking point from some shared insider playbook we may come to hear steadily over the coming years,

Lithium batteries too large, expensive: Continental CEO

 

[jbcarioca]

Almost all the posts in this thread ignore two huge elephants in the BEV room, Europe and China.

The European 2021 standards for emissions:
Reducing CO2 emissions from passenger cars - Climate Action - European Commission
are driving European manufacturers to BEV's and PHEV's rapidly. Several major builders say they cannot meet those standards without a huge increase in BEV's. That is why all those announcements from EU builders for dozens of BEV's ~2020, as well as Hyundai and others. New technologies and improvemnts in current ones are happening simultaneously. The Continental CEO discusses battery costs that are roughly double present costs, so he's both out of date and out of touch. Right now Panasonic, LG, and others are approaching $100 kWh. Chinese, Korean and Japanese producers are making great process with new chemistries, new technologies and improved production. Tesla is right there are the top of current technology but probably not vastly ahead (i.e one or two years probably, an eternity in this business).

The Chinese situation is much more fluid in that rapid production increases have happened but the efforts to develop new technological approaches are not yet the driving force. Busses, taxis and small cars/vans have been the major features thus far, but Tesla sales tripled in China last year and the growing exposure to Tesla will drive influencers just as it has in Europe. Thus, China is just now making greater net investments in BEV's than any other single country. How soon will that translate into globally competitive Chinese-sourced BEV's. I'll wager they'll end out around 2020 or so, just like the Europeans.

How soon will promising new dramatic breakthroughs be commercially ready? Frankly, nobody knows because the technologies have not yet been perfected. One way or another existing technologies will get better and cheaper, enough to be fully competitive with ICE, by 2020 or so. The new technologies solid state or something else, will be fully commercial a little later, but because nobody can honestly guess when, the new technologies themselves will be disruptive.

From our Tesla-centric perspective I'm sure they're (Tesla with Panasonic) devoting lots of resources to remain at the technological forefront.

 

[SteveG3]

that is logical, but

vehicle #1 (Ford F series) is best done by a PHEV
vehicle #2 (Chevy Silverado) is best done by a PHEV
vehicle # 3 (Ram P/U) is best done by a PHEV
vehicle #4 Honda CRV is probably best done by a PHEV
vehicle #5 Nissan Rogue is probably best done by a PHEV
vehicle #6 Honda Civic is best done by an EV
vehicle #7 Toyota RAV4 is best done by an PHEV
vehicle #8 Toyota Corolla is best done by an EV
vehicle # 9 Ford Escape is best as an PHEV
vehicle # 10 Toyota Camry is best as an EV

take a hypothetical $80/kWh cell (coming in next 5 years)
for a USA pickup truck, a 60kWh PHEV is far more pragmatic than a 120kWh EV
(just try towing anything wide and tall, behind a Tesla X or a Outlander PHEV) the efficiency plummets.

anyway, I'll log off now for the next 3 or so weeks

while I'd agree that large size SUVs are better suited for PHEVs than mid-size or smaller vehicles, I don't see them as less suited for BEVs than the others. I do not at all share your opinion that CUVs and SUVs are better suited for PHEVs than the well-done BEVs of the early 2020s and beyond.

as to trucks? Tesla has repeatedly said that's what's up next after the Model 3/Y. Let's see what they deliver, it could appeal to half or more of the market more so than a PHEV.

Not sure what your assertion that a 60 kWh PHEV being far more pragmatic than a 120 kWh BEV is based on. Such a BEV would be cheaper to buy, cheaper to fuel, and have considerably more storage space than the PHEV with the dual drive train.

 

[SteveG3]

Certainly most in the auto industry would agree with you. There is a certain machismo associated with trucks and burning lots of fuel. A lot of men in America hang their identity on that.

But this is precisely why it will be necessary for Tesla to get into trucks. They need to break this perception down just as they have done with high performance sedans. I believe it is strategic for Tesla to get into semis first. That is where all this practical stuff about being able to haul load gets worked out. Moreover, I believe the economics may actually be more favorable for heavy vehicles than a light pickup truck. So when Tesla Semis are showing are able maintain the same speed on an up grade as on a down grade all while saving a ton on fuel, there will be little doubt but that electrics make the best tow vehicles. So this breaks down the whole mythology around burning fuels for power. Then Tesla can introduce a pickup that redefines what men want in a truck.

Tesla putting a GF &/or truck factory in Texas or the Pittsburgh tri-state area (as referenced in Elon's tweet below a couple of weeks ago) could do a lot for Tesla's appeal to these consumers as well.

1. John Paul Brewer‏ @johnpaulbrewer Feb 24
   @elonmusk Is there any chance you would want to build something in WV? We need jobs, we have a good work force, coal isn't the future.
   
   2 replies7 retweets86 likes
   

Elon Musk‏Verified account @elonmusk
@johnpaulbrewer Something on a tristate border might work. Gigafactory plus nearby supporting supply chain needs a very large workforce.

 

[SteveG3]

3 reason's why PHEVs have more room for improvement over EVs vs 1 reason for EVs have more room for improvement

both PHEVs and EVs benefit equally from improvements in battery energy capacity and cost, but only PHEVs benefit far more from improvement in battery power and (arguably longevity). Improvements to battery power (but not energy) strongly benefit PHEVs.

disagree on this... EVs battery is a 100% of the time energy source for the vehicle, for PHEVs, the battery is 10-30% of the time the energy source. improvements in energy capacity and cost will have at least 3X the impact for a pure EV than for a PHEV.

Since 2012, for the same # of cells, Tesla has upped capacity from 85kWh to 90kWh, and increased number of cells from 90kWh to 100kWh. For the number and depth of significant car upgrades that have occurred (AWD, autopilot 1&2, falcon doors, weight reductions, electronic fusing) battery/cell progress has been maturing, (and we see this at a commodity cell level)

battery/cell progress has been maturing? TSLA's kWh cost is on track to have fallen 50% from 2012 to 2018.

PHEVs benefit from upgrading the power of a cell, the cost per kW has and continues to drop more rapidly than the cost per kWH. That preferentially benefits PHEVs, along with tricks that allow wider SOC ranges for PHEVs (increasing the SOC window from 60% to 90% is a one time 50% increase in range for nil additional gross kWH capacity. compared to a BEV which may increase the SOC from 92% to 94%.

tricks that allow wider SOC ranges for PHEVs? there's a fundamental reason PHEVs have narrower ranges of usable battery capacity... their batteries get cycled far more frequently than a long range BEV. there may be some tweaking available... but that fundamental reality of far greater cycling is not going away.

PHEVs also benefit from ICE downsizing, when I try to back calculate ICE costs from Chinese cars, I get a basis similar to
$100/unit +
$100/cyclinder +
$100/ litre+
$10/kW
1.5 factor from supplier gate to retail.

so about $1,500 for a 3cyl 100kW range extender motor (with exhaust and fuel tank, but not transmission or generator)
so I look to developing world focused companies like Geely (Volvo) and Mitsubishi (SAME )
2018 Volvo XC40 – first sighting of future Audi Q3 rival | Autocar
2018 Mitsubishi Eclipse Cross Spotted During Winter Testing

both BEVs and PHEVs benefit from home energy charging and home solar, as well as destination AC charging. BEVs benefit from enroute DC charging, which is mostly just show for PHEVs.

this whole section is based on either the premise of 1) a vastly downsized powering of the drivetrain is fine with consumers, and/or 2) Chinese manufactured vehicles have been broadly accepted in the vehicle markets of developed countries, which they've not, and/or 3) after over a century of ICE mass production, with the compromised narrow squeezing out of minor improvements we've all seen in our lifetimes (CVTs, start/stop "technology", ...) you think remaining incremental improvements in ICE drivetrains will outpace or even be competitive with those in BEVs. disagree.

finally, you've repeated your claims of the Mitsubishi Outlander's sales indicate the market has received a PHEV more favorably than Tesla's Model S. I'll repeat that I thoroughly disagree... I think the numbers emphatically show stronger acceptance of the Tesla. you can refer to earlier posts with the data behind my assessment.

 

[SteveG3]

Some strong circumstantial evidence that we will see a fractured tipping point as incumbents kick years down the road jumping off of the cliff of their existing ICE business into the treacherous waters of switching over to long range EVs...

It appears the much anticipated 2018 Nissan Leaf apparently will have an EPA range of about 160 miles on the high side of estimates, and it wont be until 2020 that the range breaks 200 miles on the EPA ratings (current comments suggest a range of roughly 210 miles).

Nissan Executive Says Long-Range EV Will Be Launched in 2020 - HybridCars.com

 

[neroden]

Tesla putting a GF &/or truck factory in Texas or the Pittsburgh tri-state area (as referenced in Elon's tweet below a couple of weeks ago) could do a lot for Tesla's appeal to these consumers as well.

1. John Paul Brewer‏ @johnpaulbrewer Feb 24
   @elonmusk Is there any chance you would want to build something in WV? We need jobs, we have a good work force, coal isn't the future.
   
   2 replies7 retweets86 likes
   

Elon Musk‏Verified account @elonmusk
@johnpaulbrewer Something on a tristate border might work. Gigafactory plus nearby supporting supply chain needs a very large workforce.

Pittsburgh area is a good choice. Cheap, still pretty high population, centrally located for East Coast and Midwest distribution...
I think Texas ain't getting anything 'till they make it legal for Tesla to sell cars.

 

[neroden]

2) Chinese manufactured vehicles have been broadly accepted in the vehicle markets of developed countries, which they've not

I agree with the rest of your points, but I would note that Japanese manufactured vehicles were accepted quite quickly in developed countries back in the 60s and 70s. The same will happen with Chinese manufactured EVs.

 

[renim]

FWIW
the new plugin pickup truck has a fairly close specs to what I was suggesting

60kWh battery, 40/45kWh usable window
sub 1 litre motor (Kei sized 647 cc)
and
at 75 MPGe it is close to the 'fuel' economy of the Tesla S when it first released, despite one being a pickup truck and the other an highly aero optimised luxury performance sedan.

 

[RobStark]

sub 1 litre motor (Kei sized 647 cc)

Last year Workhorse CEO Steve Burns said they would use the i3's 2 cyl 647 cc engine.

At the reveal in Long Beach he said it will have a 3 cylinder engine. Presumably the 1.5 litre unit from the BMW i8 since Workhorse has a contract with BMW.

At the 1:35 mark.

 

[EinSV]

@SteveG3,

I saw the reports regarding the Ford BOD dismissing CEO Mark Fields at least in part because they didn't like his vision of taking short term hit on profits to invest in BEVs (although they do seem eager to continue investing in autonomy). I assume there were many factors at play but this does seem consistent with your theory.

 

[SteveG3]

@SteveG3,

I saw the reports regarding the Ford BOD dismissing CEO Mark Fields at least in part because they didn't like his vision of taking short term hit on profits to invest in BEVs (although they do seem eager to continue investing in autonomy). I assume there were many factors at play but this does seem consistent with your theory.

I'd only seen very general commentary as to why he was dismissed. If you still have a link to anything specific please post it.

fwiw, there are a couple of critical dynamics as to why BEVs may well be kicked down the road by many of these incumbents for years to come, while these same players may pursue autonomy with a considerable sense of urgency.

 

[EinSV]

I'd only seen very general commentary as to why he was dismissed. If you still have a link to anything specific please post it.

fwiw, there are a couple of critical dynamics as to why BEVs may well be kicked down the road by many of these incumbents for years to come, while these same players may pursue autonomy with a considerable sense of urgency.

I did not keep the articles unfortunately but the LA Times piece has some of this. Ford replaces its CEO as it tries to focus on traditional cars and new tech

Lots of criticisms and issues reported but one was that he failed to pay sufficient attention to existing product lines in favor of long-term investment in BEVs. But in fairness, when I went back to try to track down the articles I saw there seem to be conflicting reports re Ford's intentions with BEVs so I suppose it is still possible that they will pivot and actively pursue BEVs along with autonomy. Having said that, I think the pressure to invest for the short term ICE business will likely win out over a focus on BEV investments for some time to come.

 

[Oil4AsphaultOnly]

disagree on this... EVs battery is a 100% of the time energy source for the vehicle, for PHEVs, the battery is 10-30% of the time the energy source. improvements in energy capacity and cost will have at least 3X the impact for a pure EV than for a PHEV.

Steve, I think that's a huge misconception that I haven't seen addressed by anyone else on this thread. Although I disagree with renim's point, I think the argument about PHEV's being a viable alternative for a while has legs. And it stems from the utilization angle.

At 18kwh, a volt's battery powers 75% of the miles of its average owner. Roughly 95% with the i3 Rex and it's 22kwh battery. At 30kwh, the percentage of a car's driven miles being powered by the battery increases, not decreases. So a 40kwh PHEV could have 95% of its miles (excluding the 2 weeks in a year for long road trips) being battery-powered, versus the 100% from a 80kwh BEV. In this way, producing PHEV's would be an effective way to utilize scarce battery production capacity, while meeting emissions mandates.

I'm not saying that's a good decision, only that the legacy manufacturers have that door open to them. And Toyota and Mazda partnered up open that door further.

Combine this with what dakh pointed out about how ride-sharing and autonomy reduces the count of how many gigafactories are actually needed, and I think the FTPM becomes less of a moat, and more of a roadblock.

 

[SteveG3]

Steve, I think that's a huge misconception that I haven't seen addressed by anyone else on this thread. Although I disagree with renim's point, I think the argument about PHEV's being a viable alternative for a while has legs. And it stems from the utilization angle.

At 18kwh, a volt's battery powers 75% of the miles of its average owner. Roughly 95% with the i3 Rex and it's 22kwh battery. At 30kwh, the percentage of a car's driven miles being powered by the battery increases, not decreases. So a 40kwh PHEV could have 95% of its miles (excluding the 2 weeks in a year for long road trips) being battery-powered, versus the 100% from a 80kwh BEV. In this way, producing PHEV's would be an effective way to utilize scarce battery production capacity, while meeting emissions mandates.

I'm not saying that's a good decision, only that the legacy manufacturers have that door open to them. And Toyota and Mazda partnered up open that door further.

Combine this with what dakh pointed out about how ride-sharing and autonomy reduces the count of how many gigafactories are actually needed, and I think the FTPM becomes less of a moat, and more of a roadblock.

Oil4, I very much agree an argument can be made that PHEV will be a more efficient way to use limited battery capacity during the process of scaling up battery capacity. I've written the same myself here on TMC multiple times in the past. Like yourself, I have some reservations re whether that would be a good decision.

Worth noting, that for the argument to have any standing, incumbents would need to move from the typical roughly 15 mile of EV range on these PHEV vehicles towards the 50 miles of range that we see in the Volt. Last year or two have brought a few 20 mile range, and even 30 mile range PHEVs, but, still lots are set at ~15 miles.

To the main point, I don't see this as diminishing the FTPM. A well done long range EV like the Model 3 is already significantly more compelling than a PHEV, even a PHEV with 50 miles of range. What's more, within 5 years, such an EV is likely to have cost parity with such a PHEV at the purchase point, let alone after savings in maintenance and fuel. These PHEVs may let the incumbents save face for longer, and in a sense, (going back to the metaphor in the opening post of this thread) jump down from the cliff they are currently on to another cliff a little less treacherously far from the waters they will need to jump into in the long-term, but, that actually stretches out the FTPM. That is, if BEVs is the ultimate destination, but, the incumbents to a large extent take a side trip to PHEVs for years to come, that adds to the amount of time Tesla can continue at 100% steering towards conversion of global auto to EVs while the incumbents as a whole are steering considerably less than 100% toward that long-term direction.

As to your mentioning ride-sharing, autonomy, possibly lowering total global auto sales in the future. You can see I offered my thoughts on the likelihood of this in the first post of this thread, quoted below,

"c) But, we are at the cusp of a major fall off in car ownership as it’s replaced with autonomous car sharing, so the market Tesla is competing for is going to shrink very substantially. Obviously, no one knows quite how the new mobility market will impact the size of the global vehicle market 10 or 15 years from now. I received this very objection to my basic thesis about Tesla’s growth opportunity in a comment I made last fall here on TMC. In response, I decided to crowdsource opinion on this question by creating a TMC thread on it. In sum, there was far more expectation that the market would be larger in 2030 than today rather than smaller. The link is below,

Will the global vehicle market (all automakers combined) be bigger or smaller in 2030 and why? "

 

[JRP3]

The sooner you remove the training wheels the faster everyone learns you can ride without them.

 

[SteveG3]

The sooner you remove the training wheels the faster everyone learns you can ride without them.

Yes.

While an argument can be made for an interim PHEV period to make more use of what battery supply there is and will be for the next 5-10 years, such a scenario would quite likely stunt the growth rate of battery supply. That's the main reason I wrote that, like Oil4 expressed, I too have reservations as to whether such a PHEV partial-step would be a good idea.

 

[RobStark]

Honda Clarity PHEV is a midsize sedan as roomy as an Accord that gets 47 mile AER. *

* If you floor it, past the pedal detente, the engine comes on and helps acceleration even if battery is full. Honda says this is more efficient.

 

[SteveG3]

Honda Clarity PHEV is a midsize sedan as roomy as an Accord that gets 47 mile AER. *

* If you floor it, past the pedal detente, the engine comes on and helps acceleration even if battery is full. Honda says this is more efficient.

Ah. Volt not quite so lonely now.