Study: To speed electric cars to market, sell batteries separately

To get more electric vehicles on the road, consumers should have the option to essentially lease the batteries, a University of California at Berkeley study argues.

The UC Berkeley Center for Entrepreneurship & Technology on Monday released an analysis that found that there are environmental and economic benefits to adopting electric vehicles, but the high cost of batteries is a persistent problem that remains a barrier to buyers.

A test at Better Place's automated battery-swapping station in Japan earlier this year.

(Credit: Better Place)

The study's author, economist Thomas Becker, argues that pay-per-mile service contracts--the rough equivalent of buying a service contract with a cell phone--and swappable batteries will hasten adoption rates. Separating the cost of the battery from the car will lower the upfront cost and battery-changing stations will give consumers more confidence that electric vehicles are reliable, he said.

Becker predicts that this sort of purchase will account for 64 percent of light vehicle sales by 2030. Calculating that electric vehicles are 10 to 13 cents per mile cheaper to own than gasoline cars, Becker forecasts that electric vehicles could account for 24 percent of the light-vehicle fleet by 2030.

The business model that Berkeley advocates is essentially what the company Better Place is pursuing. When consumers purchase an all-electric car covered in the Better Place plan, the company owns the batteries. Consumers get an electric charger at their home and access to battery-swapping stations. And consumer purchase one of a few monthly driving plans that correspond to different distances, according to Better Place

A number of governments have signed on for the initiative with the first network of home charging stations and swapping stations expected in Israel in the next few years.

Although Berkeley's Becker argues that separating batteries from electric vehicles will usher in mass adoption of electric vehicles, no other companies have been formed to offer a similar service. Better Place has signed on one car manufacturer--Renault-Nissan--to make cars with batteries that can be swapped out by machines.

Still, other car company executives have said that they are exploring battery leasing options that would give consumers the ability to upgrade batteries after a few years. Electric car maker Tesla Motors plans to include a swappable battery with the Model S sedan.

Separately, Better Place on Monday released results from an Ipsos survey that Better Place commissioned which showed strong consumer interest in electric vehicles, although for different reasons.

It found that 30 percent of U.S. car buyers are interested in going electric for their next vehicle with other countries that Better Place is pursuing showing even higher levels of interest.

The study found that the top concerns for wanting to buy an electric vehicle are reducing U.S. dependence on foreign oil, concerns over air pollution or climate change, and concerns over terrorism.

[monkeyfun14]

We need a open standard for this though. So we don't have some cars that work with some batteries and others that don't.

[arifsaha]

Yes! This is a great thought! If they want to separate car from batteries, then the batteries should follow an open standard, so the car owner will never depend on single battery provider. One battery provider put the price to high, move to the other one. So the price will always in check.

[Mergatroid Mania]

Great, yet another monthly fee.

I don't care who "owns" the battery, but I sure as hell would never lease them. And, a "driving plan"?

We already get ripped by all these cell phone plans, and now they want to add to that?

If I ever BUY an electric car (the operative word being BUY), there's no way I would agree to a purchase that would require me to pay a monthly bill to "lease" batteries for the duration of my ownership of the car.

Now, this might be fine for governments, or companies with large fleets of cars. But as a consumer, I can say I'm tired of being nickeled and dimed to death.

If a company wants to charge a trade-in fee for me to swap my battery at a service station, that's fine. If I ever have to go on a long trip, and I need to swap out the batteries then that would be an acceptable fee.

However, if I spend 99.99% of my time driving around town, and only have to plug my car in at night then why would I want to lease batteries to begin with if I don't need the battery swap option, or only need it every five years when my current batteries start wearing out?

Making me pay a monthly fee for batteries would definately be one way to get me NOT to buy an electric car.

Also, I thought the point here is to get the prices of batteries lower? Where is the incentive to reduce the cost of the batteries if these companies are charging by the month? Sure, maybe the companies would start to see lower battery costs, but are they going to pass that savings on to the consumer, or just keep it for higher profit? I'll give you three guesses, and the first two don't count.

[mralbones]

I understand the sentiment, and love the passion.

I think making the batteries swappable, and you just pay when you 'need a fill up' IE when the charge is low, you pull into a 'battery station' get a new one, pay the man, and go on your way, seems like a reasonable idea...

[yiang]

Kudos, I couldn't agree more.

[MMcCubbing]

I agree completely. Most people only drive short distances at a time and would easily be able to do most or all charging at home or work it properly equipped. In such a case the battery only needs to be replaced at the end of it's life and, much like replacing a worn engine component, I think that should be covered by a one-time fee, not a monthly charge.

[martin1212]

I think you are overreacting a bit. There is nothing in the study saying this would be compulsory. If you want to buy a battery and keep it, you could. The study is actually attempting to address two separate but related issues:

- upfront cost of battery
- limited range on a battery

If these are not an issue then buy a battery and keep it. This is not aimed at you. It is for those who balk at paying a large premium upfront for something like this and would rather spread out the cost. It is also for those who drive more in a day than the range of a single battery, and so require a way to recharge on the go - the fastest simplest way being simply to switch out the battery.

[Mergatroid Mania]

Actually, whether or not it applies to me would all depend on the policy of the company I was trying to purchase an electric car from.
If there were some companies that did their sales this way, and some that didn't, then I would have a choice.

However, if this became the industry standard business model, then I wouldn't buy into it.

[vicim]

All this is great, but wait - Where are we going to dump all these huge batteries when they expire. Every battery can be recharged and used only so many times. Once its life is over, its junk. Who is thinking of that now? I can already see thousands and thousands of batteries being dumped into seas across the world by these leasing companies.

For this to really work, we need batteries that decay or find a good way of disposing off the toxic stuff, otherwise we will end up poisoning our next generations.

[martin1212]

Google is your friend. A few seconds searching unearthed this, showing how various different types of batteries are recycled:

http://www.wasteonline.org.uk/resources/InformationSheets/Batteries.htm

Bottom line, once the life is over they are NOT junk, they can be recycled. Note that the most toxic batteries in cars are probably the Lead acid batteries that are present in every car, and that they are already very effectively recycled today.

[mlamonica]

Another idea that's being seriously considered is to take car batteries that have been used for five or ten years and convert them for grid storage. See here:
http://news.cnet.com/8301-11128_3-10269723-54.html?tag=mncol

[2centsbook]

I would also argue that a serious study should take into consideration batteries other than li-ion. The NiMH battery is less expensive, and extremely durable (several Toyota RAV-EVs built in the last 90s are still running with their original NiMH battery pack). For more information about the benefits of NiMH batteries, or why GM sold the patent of the NiMH batteries to Chevron, who sued anyone who tried to make anything but a dinky hybrid with it, check out the movie "who killed the electric car" or the book "Two Cents Per Mile" by Nevres Cefo ( http://www.twocentspermile.com )

[mmichaels]

"And consumer purchase one of a few monthly driving plans that correspond to different distances, according to Better Place "

How exciting! We're going to be able to buy "driving plans" soon. We're turning cars into cell-phones....great.

[epross]

Leasing a battery will probably be no different that buying a tank of gas as they are doing it based upon usage not on a fixed monthly charge (at least that's what they say now.) I checked out Better Place a while ago; all they have really done is convert the kilowatts of electricity used to charge a battery into miles and you pay based upon the mileage that you use. It's like filling up a prepaid spending card (this battery enables you to drive X miles.) They could have easily said you pay for the amount energy used or store in the battery. It's probably a smart move to do the conversion because I (and most people) certainly can't relate Joules into distance driven. I just wonder, won't different cars have different ratings? A Tesla Roadster won't go as far as a small compact such as the Volt (if it ever sees the light of day) so they not only have to convert energy into miles, but they also have to do so based upon the specific vehicle's consumption per mile (at an average rate I'll bet.) And what about weather (heaters, wipers, lights, air conditioning) and vehicle loading also will factor into how far you get on a charge.

I'm not sure of the business plan, it sounds ok if I can avoid the capital cost of a battery and lower the vehicle price; however what if I erect a solar panel or windmill on my property and charge the car from there? In essence, if I already own the gas, why should they charge me to use it? Because they own the storage medium (battery.) What rate would they charge me to store 'my' electricity in their battery? -- Like I said, there obvious questions in the plan, but I'm sure they're working hard to ensure we pay either way. I'd need more information to choose whether to lease vs purchase is the way to go. Either way it can't hurt of have more rather than less choice.

[KimTaylor aka Finiky]

So what renewable fuel are we going to use to produce ALL of the additional electricity for our electric cars? Clean coal is not clean, leveling mountains to get coal destroys ecosystems, and there can't be infinite pockets of coal?

Better yet, how would we even deliver all of the additional electricity needed for everyone to have an electric car and rechargeable battery - (should the method of recharging be as simple as plugging into your house or electrical socket) our grid system is outdated.

Pay per mile? What about people who live in the country and must drive 45 minutes- one way- to get to a grocery store?

While I am for being smart about how we use fossil fuels and renewable fuels making people pay per mile is not the answer.

I've got to go... got to crack the whip on my hamster who is on the treadmill helping to generate power for my laptop.

[2centsbook]

There would be little modification needed to allow everyone to charge their electric cars. Most electricity is used during the morning (when people are getting up, machines are turning on), and the evening (people get home from work and use electricity). Electricity usage levels out and declines mid-day and at night, which is the most logical time that electric cars could be charging.

And although coal isn't clean, moving towards electric cars gives us the option to transition to cleaner energy sources. With combustion engines, you're pretty stuck with oil (I don't see methanol or ethanol working on a large scale), and I don't think anyone is arguing for the environmental benefits of oil.

Jake Brooks
http://www.twocentspermile.com

[epross]

Don't you pay per mile when you fill your tank? Think about it, you'll get a few hundred miles out of each tank, so whether its gas you put in your tank, or energy in a battery, you really are paying for energy (in the form of electricity or gas) to move you a certain distance. So you already are paying per mile whether you realize it or not.

[NocturnalCT]

I see the appeal of a battery charging station from a 'reload and go' perspective. This is of course a throw-back to the olden days where people traded their horses for fresh ones rather than letting them rest (recharge). The problem now, as it was then, will be that battery quality will vary. You just had a terrific battery that lasted 200 miles and the next one you get is drained after 110 because it's be abused or simply nearing its EOL.

Perhaps we'll end up having our own battery pack that we lovingly tend to for trips to work and around town. Then for the long haul we get out the old beater battery that we got last year on a road trip to Cape Cod.

As for the driving plans, that's nuts and invites abuse just like cell phone plans cause people to talk while driving. Pay as you go is the name of the game here. You pay for the electricity it takes to charge your battery and you pay to swap out a drained battery for a fresh one.

Ah and then there's the case where your battery is half full when you trade it in. Do you get credit? I guess I can see where they came up with the mileage plan.

[freemarket--2008]

"As for the driving plans, that's nuts..."

At some point, you need to pay for the battery itself. It's a depreciating resource that wears out after so many years. You will either pay for it as part of a higher monthly car payment or as part of a separate leasing/charging plan.

[biffhenerson]

Today, people visit the gas station once per week. In the tree hugger world, people would have to visit a charging station everyday. Imagine the traffic, waiting, and cost as seven times the cars try to use a gas/charging station. I pitty the fools. The charging needs to occur at home where the local electric company can bill the heck out of them. Plus tax.

[Mergatroid Mania]

If you read the article, they mention plugging the car in at home. You would have both, swapping stations for people who are driving a lot and need to swap out the battery, and a charging station at home for plugging in over night.

[depenz]

If you have a issue whit tree huggers
Get them to try a logger
they,ll go back

[OlsonBW]

They are wrong. Pay per mile is not the best way except if you are the one SELLING at pay per mile. It does not help the buyer. And if it doesn't, buyers will be resistant and the whole thing could be stopped cold.

Someone needs to stop listening to "experts" that don't know economics in real life. Economics in classrooms aren't real life.

[Mergatroid Mania]

Yep, good way to get people not to buy them is tell them they have to pay someone every month just so they can drive their car after purchasing it outright.

Did these "experts" work for the oil companies or something? ;)

[HeavyJim]

Tesla battery pack weighs 900 pounds, the Volt pack over 400. Yep, just pull up and switch them out like a flashlight. Oh, and you are not going to want some gas pump jockey doing this. Its gonna wind up costing you big.

[freemarket--2008]

Obviously, this will be done with a lift of some type. Better Place has it fully automated.

[m-n-b]

very good aproch.i like very much ur intellegency.very good and keep it up.best off luck.

[depenz]

It's a fairly blatant remark. To claim 12-13 cents cheaper per mile.
To own a vehicle that is immunized free of road & transit taxes.
That pay for a infrastructure we all share use collectively.
What other privileges will be granted?
Reduced electrical rates? For being green?
There are new strip mines developed.
To provide materials needed. They put lead to shame.
Don,t get me wrong. I,m for them.
There needs to be a level playing field.
That reflexes the true ecological & economical impact.
Not a quick fixxxxxxxx

[Pizzahut1]

It just seems that the Electricity for pay is just another "Oil Company" way of making us pay. It seems like rape but they dont want to kiss us first.

[gold_rush]

I think electrical cars are most certainly the way forward, I really like the plug-in-at-the-wall when you get home (there is a company in Quebec that makes cars like these).

Regarding: a) batteries and b) power generation

a) batteries
They can be recycled and re-used, as long as it is done in a western country and not by children in India (because the enviro-nuts refuse battery recycling facilities in their home-country backyward)
NiMH is a great technology because the batteries have a long life-span before recycling, and recycling techniques for NiMH are more efficient and cleaner than for the old Pb batteries

b) power generation: well, nuclear, why not?
- Mine the uranium underground, process it underground, make rods underground, send rods to power station.
- Nowadays, when rods are depleted, they are refurbished (I believe over 95% of the rod is re-used) and so on, over and over (the French are doing this very effectively).
- A small volume of radioactive/hot material is produced after each rod is depleted, typically 1-2 years ... most of the radioactive waste will be safe in 30-50 years, some on 200 years, and a very, very, very small amount will be radioactive for thousands of years... what the French do is cool the waste in a pool for 20-30 years then... surprise surprise, just put the now cooler waste back at the bottom of the mine where the uranium came from in the first place. REMEMBER, after 50 years the vast majority of the formerly radioactive waste is no more harmful than crushed rock, only a small portion (which can be refined early on) remains radioactive... this is what is put at the bottom of the mine (and we are talking small volumes here).
- And, just to cover gaps, uranium hosted in >300 million year old granites has been there for, well, >300 million years, so if you put waste back there, it should stay there for a looooong time
- MORE INFORMATION: for example, most of the uranium in the Athabasca Basin (Saskatchewan) has been there for >1000 million years, the vast majority of it is not even showing at surface... it sounds to me like there are many rocks in old shields that can store the most toxic waste for a looooong time

[JRinAB]

Question: Is an Electric Car without a battery an Electric Car? When does the subsidy kick in?

Observation: Quickly swapable batteries are a REQUIREMENT for long distance travel. A swap must be accomplished in the same amount of time as filling a gas tank does now.

Conclusion: Buying any electric vehicle BEFORE a single international, or at least North American, swapable battery STANDARD is in place (with an accessable service network) is pure folly. Wake me when the nonsense is over.

[ChargeMyOwnBattery]

This idea to have a battery leased is a JOKE! Once you've leased a battery then its like intellectual property which provides you no ownership of the battery EVER. I'd love to see the licensing rules applied to this type of model. Think about all the do's and donts that will be enforced? What if you supply your own power with, wind and solar where energy then becomes free. They may write some rule that restricts the use of such methods. Theres all sorts of other issues that arise with such a accessable battery, the cost of the battery is high yes you can put all the security measures to lock that battery in, but i guarentee there will be theives that will figure out a way to pry them out. Think about the dollars that will be made with these on the black market. Why would i want to risk receiving a defective battery? Once you realized you got a defective battery It's not like you can run to the battery swapping station, pick up a battery and install it your self, you'll be towing that sucker everytime, the towing companies are probably salavating at this idea.

To have a battery swapping station installed in convient locations nation wide will be VERY COSTLY! I dont have the figures of the cost for these stations but when your talking about machine automation to swap out your batteries, the cost to develop these sites, cost of the land to implement, cost of maintaining ownership of the stations you can bet that those cost will be passed on in your driving plan.

I just want to take the plug and stick it in my car and charge it, SIMPLE. Installing charging stations at home, workplace, grocery store, mall, transit stations, and wherever you can think of is cost effective, does not require the purchase of land, maintence cost will be low since your maintaing a very simple structure with very little moving parts. ECOTALITY i hope will pull through with this vision. There Mint Charger which claims it can recharge a battery between 10-15 minutes (if true) is the answer. With software installed on your vechicle to cut of any excessive charging, you can run into the store while your car charges, by the time your done, your good to go. Then you can actually pay for the energy your planning to use, rather then all the cost thats been past onto you by the battery swapping stations.

Let me know what you think?

David