The age of electric cars is dawning ahead of schedule
FRANKFURT — An electric Volkswagen ID.3 for the same price as a Golf. A Tesla Model 3 that costs as much as ABMW3 Series. A Renault Zoe electric subcompact whose monthly leasepaymentmightequal a nice dinner for two in Paris.
As car sales collapsed in Europe because of the pandemic, one category grewrapidly: electric vehicles. One reason is that purchase prices in Europe are coming tantalizingly close to the prices for cars with gasoline or diesel engines.
At the moment, this near parity is possible only with government subsidies that, depending on the country, can cut more than $10,000 from the final price. Carmakers are offering deals on electric cars to meet stricter European Union regulations on carbon dioxide emissions. Ingermany, anelectricrenault Zoe can be leased for 139 euros amonth, or $164.
Electric vehicles are not yet as popular in the United States, largely because government incentives are
less generous. Battery-powered cars account for about 2percent of new car sales in America, while in Europe the market share is approaching 5 percent. Including hybrids, the share rises to nearly 9 percent in Europe, according to Matthias Schmidt, an independent analyst in Berlin.
As electric cars become more mainstream, the automobile industry is rapidly approaching the tipping point when, even without subsidies, itwill be as cheap, and maybe cheaper, to own a plug-in vehicle than one that burns fossil fuels. The carmaker that reaches price parity first may be positioned to dominate the segment.
A few years ago, industry experts expected 2025 would be the turning point. But technology is advancing faster than expected, and could be poised for a quantum leap. Elon Musk announced a plan at Tesla’s “Battery Day” event Tuesday that would allow electric cars to travel significantly farther without adding weight.
The balance of power in the auto industry may depend on which carmaker, electronics company or startup succeeds in squeezing the most power per pound into a battery, what’s known as energy density. A battery with high energy density is inherently cheaper because it requires fewer raw materials and less weight to deliver the same range.
“We’re seeing energy density increase faster than ever before,” said Milan Thakore, a senior research analyst at Wood Mackenzie, an energy consultant that recently pushed its prediction of the tipping pointaheadby a year, to 2024.
Some industry experts are even more bullish. Hui Zhang, managingdirector in Germany of NIO, a Chinese
electric carmakerwith global ambitions, said he thought parity could be achieved in 2023.
Venkat Viswanathan, an associate professor at Carnegie Mellon University who closely follows the industry, ismore cautious. But hesaid: “We are alreadyona very accelerated timeline. If you asked anyone in 2010 whether we would have price parity by 2025, they would have said thatwas impossible.”
Building a better battery
The holy grail in the electric vehicle industry has been to push the cost of battery packs — the rechargeable systemthat stores energy — below $100 per kilowatt-hour, the standard measure of battery power. That is the point, more or less, at which propelling a vehicle with electricity will be as cheap as it iswith gasoline.
Current battery packs cost around $150 to $200
per kilowatt-hour, depending on the technology. That means a battery pack costs around $20,000. But the price has dropped 80 percent since 2008, according to the U.S. Department of Energy.
All electric cars use lithium-ion batteries, but there are many variations on that basic chemistry, andintense competition tofind thecombination of materials that stores the most power for the least weight.
For traditional car companies, this is all very scary. Internal combustion engines have not changed fundamentally for decades, but battery technology is still wide open.
There are even geopolitical implications. China is pouring resources into battery research, seeing the shift to electric power as a chance for companies like NIO to break into the European and someday, American, markets. In less than a decade, Chinese battery
maker CATL has become one of the world’s biggest manufacturers.
Trying to catch Tesla
The California company has been selling electric cars since 2008 and can drawon years of data to calculate how far it can safely push a battery’s performance without causing overheating or excessive wear. That knowledge allows Tesla to offer better range than competitors who have to be more careful. Tesla’s four models are the only widely available electric cars that can go more than 300 miles on a charge, according to Kelley Blue Book.
On Tuesday, Musk unveiled a plan for technology offering more storage per pound at lower cost, according to analysts at the Swiss bank UBS. If so, competitors could recede even further in the rearviewmirror.
“The traditional car industry is still behind,” said Peter Carlsson, who ran Tesla’s
supplier network in the company’s early days and is now chief executive of Northvolt, a new Swedish company that has contracts to manufacture batteries for Volkswagen and BMW.
“But,” Carlsson said, “there is a massive amount of resources going into the race to beat Tesla. A number, not all, of the big carmakers are going to catch up.”
Peter Rawlinson, who led design of the Tesla Model S and isnowchief executive of the electric car startup Lucid, likes to wow audiences by showing up at events dragging a rolling carry-on bag containing the company’s supercompact drive unit. Electric motor, transmission and differential in one, the unit saves space and, alongwith hundreds of other weight-saving tweaks, will allowthecompany’s Lucid Air luxury car — which the company unveiled Sept. 9 — to travel more than 400 miles on a charge, Rawlinson
said.
His point is that designers should focus on things like aerodynamic drag and weight to avoid the need for big, expensive batteries in the first place. “There is kind of a myopia,” Rawlinson said. “Everyone is talking about batteries. It’s the whole system.”
Need for chargers
When Jana Höffner bought an electric Renault Zoe in 2013, driving anywhere outside her home in Stuttgart, Germany, was an adventure. Charging stations were rare, and did not always work. Höffner drove her Zoe to places like Norway or Sicily just to see if she could make it without having to call for a tow.
Höffner, whoworks in online communication for the state of Baden-württemberg, has since traded up to a Tesla Model 3 equipped with software that guides her to the company’s own network of chargers, which can fill the battery to 80 percent capacity in about half an hour. She sounds almost nostalgic when she remembers how hard it was to recharge back in the electricvehicle stone age.
“Now, it’s boring,” Höffner said. “You say where you want to go and the car takes care of the rest.”
The European Union has nearly 200,000 chargers, far short of the 3million that will be needed when electric cars become ubiquitous, according totransport & Environment, an advocacy group. The United States has fewer than half as many as Europe.
But the European network is already dense enough that owning and charging an electric car is “no problem,” said Höffner, who can’t charge at home and depends on public infrastructure.
Price and infrastructure are closely connected. In theory, people won’t need big, expensive batteries if there is a place nearby to quickly recharge.