EVs Take another Hit! –

There’s an article out today about EV’s and Batteries. WAIT!!!  All of you who are ready to pillory me for destroying polar bears and killing baby seals take a deep breath. Saving the planet is about good stewardship, not wasting money. You can read the article it here.

Here are the money quotes:

“Electric car batteries do not perform much better than they did 100 years ago,” he (Paul Chesser, an associate fellow with the National Legal and Policy Center)  said. “Research has not conquered the battery storage issue, and therefore the electric transportation ‘stimulus’ did not boost the ‘technology of the future,’ but instead a century-old technology as far as performance and capability goes.”

He added that the LG Chem plant’s problems show that the unpopularity of electric cars despite heavy taxpayer subsidies has had more widespread negative effects than most realize.

“Billions of dollars were put into Volt research, and Ford received $5.9 billion in stimulus loans to retrofit plants to produce [electric vehicles],” Chesser said. “The battery companies like LG Chem that were supposed to service them have no customers to speak of. Their existence was solely based on access to taxpayer money.

“Had it been private investors rather than government bureaucrats making the decision, there either would have been a reality check about the industry, or only those who made individual decisions to invest would have lost their money, not taxpayers.”

The Marketplace will make the decisions.  People are not rubes. They know inherently what is in there best interest and they know that electric cars are not.  They are an oddity. Something that folks who pine for that sort of thing buy, like model trains and airplanes.

Why should we, the parking industry, be discussing this topic? We are being asked to invest substantial dollars in infrastructure to support EVs. Is this a good investment? Is it truly sustainability, or is it simply support a dream?

To those who support billions of taxpayer dollars to be invested in this product, I ask the following questions;

First deal with the argument that with hybrids like the Prius and Volt, why are charging stations needed at all.  It seems that if one purchases one of these vehicles, you can cover any “range anxiety” with the gas engine.  The 50 or 60 mpg meets social responsibility, and all is right with the world.

Also – How do you deal with people who plug in their cars and go to work, and leave them plugged in.  Who moves them when they are finished?  An e-valet is required in most places and who pays for that person… It’s probably not reasonable to install enough charging stations so everyone can get one at any time. I have had owners complain that if they put in a charging station or two, and when people show up and they are in use, they get a bad reputation rather than a good one.

It has been computed that to supply an e-valet where there is no valet in New York City, the costs would be in the neighborhood of $125K per year. (Less in some places, more in others — includes salary, benefits, taxes, and a big bump in insurance costs).  So, assuming a population of 25 or so in each garage, each car would have to pay around $20 per charge to cover the valet and electricity costs. If that’s the case, and a car needs to charge every day or so, the economy of purchasing such a vehicle comes into question.  Once again, it seems a hybrid makes more sense.  You are being responsible, and its not costing you an arm and a leg.

Is this technology, not the charging technology but the battery technology in the vehicles, really here?  The latest numbers on the Nissan Leaf – a true EV, are that it is not selling and Nissan is considering dropping the line. The article above is more proof that even plug in hybrids like the Volt aren’t selling enough to support the supply lines.

Straw men are often put forward — Cell phones were big and clunky and expensive at first, and now look, there is one in every pocket — but they are just that, straw men…In this case comparing ubiquitous cell phones to electric cars.

Cell phones grew from a technology that had be increasing in reach and decreasing in size and cost almost exponentially every two years (Moore’s Law). The microchips that drive cell phones have huge capacities and are virtually free.  The phones are in every hand and have become a necessity of life. New models come out every year that are smaller, faster, cheaper and have more features.  They are virtually a consumer item.  They are not government subsidized.

Electric Vehicles are almost the opposite.  They are based on a technology that hasn’t changed much in 100 years.  Battery technology. (See article above) No matter how ‘fun’ they are to drive, no matter how sexy the on board electronics, no matter how much the government subsidizes their manufacturer, they still rely on expensive, messy to build, environmentally horrible, batteries.  (I can get snarky and say that because the messy part of battery manufacture is done in China, why should we care, but I won’t. Environmentalist extremists can be very NIMBY) And although billions of government money is being spent in research, not much progress is being made.  Doubling the capacity of batteries, from 40 to 80 miles, altering the laws of physics so they can be charged in five minutes and work as well at 20 degrees as they do at 80, probably won’t make a lot of difference.

It’s up to the market and the market isn’t playing. When it costs GM nearly $90k  per car for the Volt to make it off the assembly line, and it still sells at a loss at $40K this is not a mass market item. The Chevy Cruz, which is essentially a gas powered Volt, sells at less than half the price, gets 42MPG, and is a market leader.

There are many ways to make big strides in cleaning up our planet and many of the things that sustainability organizations are doing with garage design, lighting, and other efforts that seem to me to be reasonable.  It’s just that the EV does not.  Hybrids make some sense and therefore remove the requirement for garage charging stations.

Driving a $100K BMW or a $50 K fully loaded Volt and finding out how fun it is to be in one is great, but it will go nowhere in solving the problems we are trying solve. Great PR and well-meaning organizations don’t hack it. Innovation, like fracking, which brings clean burning natural gas, does. Private innovation, flying in the face of government regulation, discovered and brought to market more natural gas than has been found in history, and in the process will, if allowed, do more to reduce air emissions today than all the EVs that are being given away at loss leader prices (have you seen the new leases that are being offered).

What would happen, if automotive companies were to invest billions in LNG powered vehicles and set up infrastructure for that? My guess is that if you asked nice Costco and Wal Mart to put a LNG station in each of its stores, that infrastructure would happen overnight. I don’t know how the cost for LNG compares to 89 octane gasoline but I believe they are comparable.  Cars run much cleaner and not very much is required to convert gas powered vehicles to LNG.  Mileage is high, maintenance is low.

The government is trying to pick winners and losers, but as a someone said the other day, it seems to be only picking losers.

The free market is messy.  But it is self cleansing. failures go away, successes stay. Unfortunately the government, any government, doesn’t work that way.

JVH

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11 Responses to EVs Take another Hit! –

  1. Brandy Stanley says:

    I am a self-proclaimed skeptic on this industry as well, but feel compelled to point out a few things. We are in the “early adopter” phase of this market, which in the life cycle of most products means you’re producing at a loss and you are only selling to those who purchase based on reasons other than money. If the technology sticks around (and it seems that Uncle Sam is going to ensure that happens), the cost will go down and more people will buy.

    I’ve spoken to many people who own a Volt or Leaf and ALL of them love the vehicle. I was even forced to install EV chargers and much to my surprise, I have a capacity problem now. This DOES NOT mean I’m going to hire an eValet. I’ll put in more chargers, which are much cheaper than people – oh, and that cost will go down as well over time too. You can buy a wall-mount charger for about $500, provided you don’t care about charging for the power – which honestly is peanuts. I personally care more about charging for the use of the parking space. I realize that you have to run power to the charger, but it’s still much cheaper than a person.

    That said, the solution for the problems in advancing battery technology is a mystery. Our fleet services people say that even hybrids are only good for 100,000 miles. At that point, the battery pack fails (without fail) and you might as well scrap the vehicle. But if consumer feedback from owners of the vehicles stays as good as I suspect it is, somebody just might find a way to work it out.

    • JVH says:

      Brandy: You are reacting to your market, and good for you. However most new products build in a “loss leader” pricing in their start up budgets and then start making money at some point. They have to because its private money, usually the company’s, that supports this start up phase. However in this case, they are forced to build a product by the government, who is funding the operation. What happens when the government, hopefully soon, decides that it doesn’t have enough money to keep plowing billions into this project? It will simply stop.
      As for e-valets — you are discovering the problem and handling it in your way ($500 chargers in each space), fair enough. However it will reach a point when it makes no sense to put a charger in every space in a garage. I expect that you have a limited number of EVs and can keep ahead of them. I just wonder when it will reach that tipping point.
      The Battery issue is one of physics. Yes, there will most likely be a solution some day, but why shouldn’t a firm wait until that problem is solved before jumping (or being forced to jump) into the market. Most such issues are solved before the product reaches the ‘selling’ phase. However GM et al have been forced to jump ahead of technology.
      What are those people who love their Volts and Leafs, and etc going to say when they find that they bought a disposable car after they drive it 100K. Maybe they will simply say OK, since they could afford to buy a car that cost twice as much as a comparable gas powered one and like their old iphone, they will simply junk it. But once again, this is not an item that most consumers will find attractive. I expect to put a quarter of a million on my car.
      Most people who drive EVs are like people who drive Hummers, or fly airplanes, or have other expensive toys. They love them because they love them, not because they provide a good mode of transportation for them. The average Joe or Josephine on the street wants a car to schlep the kids, or to get to work, or to take the family to the mall or to the beach. They also have to make a payment each month, and the lower that payment, the better off they are. and they live for the moment it is paid off and they can pass it along to their kids. The prices of EVs have a long way to go to get to where they are comparable. If they are losing $40K on each Volt while selling it for $40k, then to get it down to an affordable price for a mass market vehicle, they will have to take about $50K out of the manufacturing cost. Big job .
      I think its super that you are investing what, a grand a space, so that well heeled Las Vegas denizens can charge up their cars for free. At some point, you will be forced to raise your pricing on all spaces to cover the cost of charging. Fair?
      JVH

      • Brandy Stanley says:

        You’re assuming the technology will largely replace gas-powered vehicles so I will be forced to put chargers in all spaces. I (the skeptic, remember?) don’t see that happening, well, ever. If it does get to the point where I can get an ROI on chargers and Uncle Sam stops funding them through CMAQ grants, then I’ll do that. And none of these companies were “forced” to develop the technology. There are many car companies who don’t have EVs in their pipeline. The ones that do took a risk that they would gain a future advantage. We’ll see if they win or lose. For what it’s worth, I’m with you and suspect they’ll lose.

        I lose by providing this service, unfortunately. I do actually attract enough parkers that wouldn’t otherwise be here to pay for the infrastructure, but the State of Nevada thought it would be a great idea to require that all government agencies in the state give parking away, both on and off street, to EVs. Fortunately, I was able to point out to the City Council that this is a bad idea and they agreed; so we complied with the law, but our elected officials hate it almost as much as I do. Except for the city’s “sustainability police,” who were the ones who forced me to install the chargers in the first place.

        Funny that they all drive gas hogs to and from work.

        • JVH says:

          I believe the Feds have stopped the grants for charging stations. I may have overstated the ‘forced’ approach on whether companies develop EV technology. Blackmailed might be a better word. The CAFE standards, the law requiring average mpg for the car company’s entire fleet, has been set at a level that without ev, it cannot be reached. This is particularly true if you want to sell a car in California.
          JVH

  2. Lou F. says:

    Right on John and Brandy! I have to say that I didn’t appreciate the Volt keynote at the IPI this year. I thought it was a self-serving promotion for Chevy. I think we are all getting “green” stuffed down our throats. If there is a need for a service (and I can justify its expense) I’ll put it in. If the masses want to pay for a service – I will provide access to it. But to ask everyone to cover the costs of a few is ridiculous.

  3. Ruud van Winden says:

    From the parking industry perspective, it seems electricity is something that should be welcomed. It does not have to be all open arms or “any investment is ok” this would be government thinking.

    Electric cars add a bit of diversity to our market and will bring new opportunities such as charging (revenue generator) in the future. Give it a try, do not slam the door to something just because it is more expensive or not yet completely evolved.

    Encouragement is needed as electricity is something new, and getting a place next to the good old combustion engine is not going to be easy. How could it be with our dependency completely build around the combustion engine?

    If government does want to do good it needs to do some serious thinking on mobility and transportation. In Europe, and I am sure the US is no different, people in the past 15 years or so are still spending the same amount of time in their car. The only difference is that people drive longer distances.

    So yes, we very much move forward and cover longer distances, great! However, in the scheme of things, we are moving backward. Advances in technology etc should have created more free / quality time with family and friends, instead, we get less of it…

    When I grew up we walked and biked to school, and so we did for many other activities. As John describes, the average Jo is wasting their time on mobility because they all want to live their suburban dream. Because of this dream they have to figure out what could be the cheapest way to get from A to B to C to X to Y to M to D every day? Good luck with that.

  4. Parking facility owners are reluctant to invest in EV charging stations with no potential for ROI on electric resale, or covering the cost of E-valet.
    Regarding natural gas powered vehicles, the comparable fuel cost per mile is about one-half diesel or gasoline. LNG and CNG need bigger fuel tanks, so it’s more practical for trucks versus cars. Clean Energy Fuels is building a national network of fueling stations for long-distance trucking, co-locating at Pilot truck stops. All major heavy truck manufacturers are offering natural gas powered vehicles and demand exceeds supply.
    Truly a bright spot in alternative fuels.

  5. Gary Neff says:

    Last March I added an all-electric car to my household when I needed a third car for my family. While passionate about reducing emissions and supporting our countries efforts to become energy independent, frankly, I did it for money. The cost per month for gas for a comparable quality car was the same as the car payment and electricity costs together. We have three drivers in our household and every morning we fight over who is taking the electric vehicle (EV) that day.

    While 95% of our EV charging is done at home, when we do need to go outside our range, we use the on board navigation system to find charging stations near our destination. Charging locations have altered our habits and now we frequent a new set of restaurants and stores because of the local charging infrastructure.

    I believe our government has an opportunity to steer our capitalist society into some high barrier of entry markets and the funding they have provided has arguably helped this movement forward, which could payoff in our future. Giving a few billion less to foreign governments and investing the same into our countries industries, environment and future seems sensible to me.

    The electric car is just a starting point. Where it goes, is up to the market place and I am pleased that the we are trying to do something proactive. Over the last 30 years of my driving experiences, I watched the mpg of my cars go from 15mpg to 30mpg. I am sure we can do much better than this going forward. Early adopters have different reasons for using EV’s and the EV will be a different car in the future. It’s entirely possible that future car technologies won’t be electric but some other power source that we haven’t figured out yet, however the EV development efforts are helping the car companies build lighter cars and electric drive trains, to name a couple, which may help other platforms succeed as well.

    Our parking industry remains 10 years behind the modern world in nearly everything we do and yet right now we have a rare opportunity to be part of responsible, and yes, slightly risky movement.

    The consideration for my personal investment into an electric car started with a search of the market to understand if infrastructure was available near my home and to my surprise there were several in the towns near the edge of the cars range. Knowing I had options to charge the car and the fact that most were free to use if I parked in the lot or shopped at the local merchant gave me comfort. Had public EV charging stations not been available, or the cost to charge my car was more than the cost of gas, I doubt I would have moved forward with the next steps of my research.

    I now work in two sectors, automotive and parking and trying to bring our two industries together as they so far diffident from each other and yet cant survive without each other. Car companies are working 10 years ahead of the market place and most of parking sectors remain proportionally behind.

    Hopefully the readers of these blogs will recognize that Nissan is advancing their technology by investing into the Leaf. I doubt Parking Today’s repeated comments about the Leaf being discontinued has any validity or even from a credible source, such as Nissan directly. The comments of batteries not advancing much in the last 100 years is true, but keep in mind the incandescent light bulb was the same for 150 years and now on its way to be obsolete. I often think we spend too much time talking to each other in our industry and not enough outside. When I read John’s blog, I simply think, he has no idea what he doesn’t know. Personally, I feel Parking Today has done a nice job sharing information about our industry, but should limit editorial comments to areas of expertise.

    The parking industry has a rare opportunity to impact our country by supporting the advancement of new car technologies and welcoming them into our properties. Try something new and enjoy the adventure. A good friend of mine that runs a Bay area parking company has installed dozens of charging stations in his garages and EV’s starting showing up. He said EV’s are like a Hummingbird feeder. Unless you put a feeder out, you will have no idea how many are really around you.

  6. Gary Neff says:

    Last March I added an all-electric car to my household when I needed a third car for my family. While passionate about reducing emissions and supporting our countries efforts to become energy independent, frankly, I did it for money. The cost per month for gasoline for a comparable quality car was the same as the car payment and electricity costs together. We have three drivers in our household and every morning we fight over who is taking the electric vehicle (EV) that day.

    While 95% of our EV charging is done at home, when we do need to go outside our range, we use the on board navigation system to find charging stations near our destination. Charging locations have altered our habits and now we frequent a new set of restaurants and stores because of the local charging infrastructure.

    I believe our government has an opportunity to steer our capitalist society into some high barrier of entry markets and the funding they have provided has arguably helped this movement forward, which could payoff in our future. Giving a few billion less to foreign governments and investing the same into our countries industries, environment and future seems sensible to me.

    The electric car is just a starting point. Where it goes, is up to the market place and I am pleased that we are trying to do something proactive. Over the last 30 years of my driving experiences, I watched the mpg of my cars go from 15mpg to 30mpg. I am sure we can do much better than this going forward. Early adopters have different reasons for using EV’s and the EV will be a different car in the future. It’s entirely possible that future car technologies won’t be electric but some other power source that we haven’t figured out yet, however the EV development efforts are helping the car companies build lighter cars and electric drive trains, to name a couple, which may help other platforms succeed as well.

    Our parking industry remains 10 years behind the modern world in nearly everything we do and yet right now we have a rare opportunity to be part of responsible, and yes, slightly risky movement.

    The consideration for my personal investment into an electric car started with a search of the market to understand if infrastructure was available near my home and to my surprise there were several in the towns near the edge of the cars range. Knowing I had options to charge the car and the fact that most were free to use if I parked in the lot or shopped at the local merchant gave me comfort. Had public EV charging stations not been available, or the cost to charge my car was more than the cost of gas, I doubt I would have moved forward with the next steps of my research.

    I now work in two sectors, automotive and parking and trying to bring our two industries together. Car companies are working 10 years ahead of the market and most of parking sectors remain proportionally behind.

    Hopefully the readers of these blogs will recognize that Nissan is advancing their technology by investing into the Leaf. I doubt Parking Today’s repeated comments about the Leaf being discontinued has any validity or even from a credible source, such as Nissan directly. The comments of batteries not advancing much in the last 100 years is true, but keep in mind the incandescent light bulb was the same for 150 years and now on its way to be obsolete. People in our industry spend too much time talking to each other and not enough outside. When I read John’s blog, I simply think, he has no idea what he doesn’t know. Personally, I feel Parking Today has done a nice job sharing information about our industry, but should limit editorial comments to areas of expertise.

    The parking industry has a rare opportunity to impact our country by supporting the advancement of new car technologies and welcoming them into our properties. Try something new and enjoy the adventure. A good friend of mine that runs Bay area properties installed dozens of charging stations in his garages and EV’s starting showing up. He said EV’s are like a Hummingbird feeder. Unless you put a feeder out, you will have no idea how many are really around you.

  7. JVH says:

    My apologies Gary — You are, of course correct. Nissan has not hinted at discontinuing the Leaf. I stand corrected. I must have been visualizing a most likely future. However there was this note:

    “Nissan had set a target to sell 20,000 Leafs this year. But Nissan had only been able to sell 9674 units in 2011. But in the first six months of 2012, Nissan had only sold 3,148 units. Nissan is planning for this electric car to have more availability in the U.S. and so it is expanding its Smyrna, Tennessee plant. ”

    Sales are disappointing. Successful commercial enterprises don’t pour good money after bad. I hope they do better. As for me “not knowing what I don’t know” of course you are correct. None of us do. I do know, however, that without huge government subsidies and CAFE requirements, EVs would not exist. I do suggest that had the hundreds of billions of public funds invested in EV and other green technology been invested more thoughtfully, as private sector investment might have been, we might have a cleaner world and a healthier economy.

    Gary — I think its great that you and 4200 others (through August) have purchased a Leaf this year and really like them. I have never seen one but can attest that the Volt is a great car and I’m certain the Leaf is too. But I simply wonder if it makes economic sense.

    I glad you are comfortable with altering your habits based on availability of charging stations. More power to you. However a vibrant market offers many choices so customers can pick freely and not be restricted by others choices, but by their own.

    I question if LED technology would be so popular in individual homes (not the commercial sector) if the government hadn’t mandated that I couldn’t buy an incandescent light bulb. I am being forced to pay many times the cost of the bulb by fiat. I don’t like that. It is popular in the commercial sector because it makes huge differences in cost of power. In private homes, not so much.

    If our current government has its way, gasoline will cost $9 a gallon and yes, everyone will be either walking or riding a train. Note that when Gas costs $9 a gallon, coal fired plants are closed, and nuclear is off the table electricity will cost much more, too. Businesses won’t be able to afford to top up your Leaf for free. I wonder what the attitude of EV owners will be when it costs $30 to ‘top up’ their car and they find they have to do it every time they reach their range. Let’s say that happens three times a week. So now you are paying upwards of $350 a month for electricity (not counting what you pay to charge at home.) Someone has to pay the piper, Gary. I just don’t think its right that I pay so you can drive and and enjoy your EV.

    JVH

  8. Gary Neff says:

    John. BTW, I am driving one of BMW’s Active E’s all electric cars, not the Leaf. I feel that EV’s aren’t the end of the line, but the beginning of many new mobility technologies.

    As for the costs you mention, well we all share costs in the name of progress. I am sure of our tax dollars are being used to protect the middle east shipping lanes to ensure oil shows up here, or my federal dollars used to pave your highways in California. There are expenses, investments and risks all around us. There is no doubt our government can do better, as well as we all can.

    My EV saves me money, and for that I am pleased to drive it. While I wanted to share my personal experience as an EV user, what I am more interested in seeing is our industry become a facilitator of change to a better place. We can make an impact and I really hope we come together to do so. There is much more in urban mobility than just cars and parking. Our US population will grow nearly 50% from 2000 to 2050 and 50% of that will be in metro markets creating mega cities. Parking lots can evolve from a place to drop a car to mobility hub. We remain somewhat quiet, as influential organizations such as the US Green Building Council and many others discourage parking. Companies like Nissan, Ford, GM, BMW and most of the car companies are investing into a future that we, the parking industry can and should support. If they are successful, my gut feeling is our industry will be too. I believe the car companies are investing not only to build better cars for short term profit, but also to stay ahead of regulatory restrictions and ensure their sector is part of the long term future. When we think of issues such as pollution, congestion and energy consumption, automotive is usually one of the first industries thought of. If they can reduce the pollution, use technology to reduce congestion and find ways to fuel their cars with various energy sources, they will be relevant longer and so will we.

    John, I appreciate that you have blogs, forums and welcome open communication with your readers. Parking Today is on everyone’s desk in the parking industry and your magazine has influence on so many of us. You have shared with me that you believe greening our space is just marketing and EV’s are doomed. While I am on the opposite side of each issue, I respect your position. I argue that our environment can be cleaner, our parking facilities can be more effective, our cars more efficient and for all those that are trying do better, keep working it.

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