GM says next-gen electric cars will cost less, go farther

November 15, 2017 by Tom Krisher

General Motors is telling investors its next generation of electric vehicles will cost the company 30 percent less than current ones, making them profitable after the new version debuts in 2021.

CEO Mary Barra made the forecast at the Barclay's Global Automotive Conference in New York on Wednesday. Despite the announcement, GM shares fell with the broader markets, closing down 14 cents to $42.86.

Here are more details from Barra's presentation to investors:

— She expects to cut battery cell cost from $145 per kilowatt hour of electricity to under $100 in four years, yet produce a range of over 300 miles because batteries will store more energy. Currently the Chevrolet Bolt electric car can go up to 238 miles on a single charge, among the longest-range EVs on the market.

— GM plans to reduce electric vehicle manufacturing and development costs by integrating the battery into the vehicle structure and by building multiple vehicles including SUVs and luxury cars off the same electric underpinnings.

— GM has pledged to roll out 20 new zero-emissions vehicles by 2023, with two new ones coming in 18 months. Currently most automakers lose money on electric vehicles.

— The company expects to spread costs over more electric vehicles. GM now sells fewer than 50,000 electric vehicles worldwide but predicts that will rise to near 1 million by 2026.

— Barra says GM, through its Cruise Automation unit, is moving quickly to develop autonomous vehicles so the company can capitalize on the "biggest business opportunity since the creation of the internet."

— She says deployment of vehicles without a driver is coming in "quarters not years," but gave no exact time frame.

— Barra says GM generates enough capital to finance electric and autonomous vehicle research as well as traditional vehicles.

Explore further: GM says will be first to profit from electric cars

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5 / 5 (1) Nov 15, 2017
She expects to cut battery cell cost from $145 per kilowatt hour of electricity to under $100 in four years

Half of the lithium battery cells produced globally today are going to electric cars, even though EVs represent less than 1% of all cars sold (0.2% of all light duty cars).

The situation seems impossible. To go from near-0% to 100% electric cars on the roads, the market has to grow 500 times over, and that means the world has to produce 250x more batteries. Simply getting to 1% market share requires tripling the world production output.

The sales increase as the prices drop, but as the sales increase beyond a certain point the price will skyrocket. They're going to hit huge marginal cost of production issues because the supply can't keep up.
1 / 5 (2) Nov 15, 2017

Again, you were doing well keeping your pessimism in check lately; but you go and ruin it again with the above pessimistic view; which ignores so many obvious factors that it almost amounts to 'death wish bias' on your part. Your analysis should have reflected that there was always abundant 'raw' Lithium Ore globally in the ground but few 'processors' because China had a polluting-industry mentality which ignored environmental damage/costs and so cornered the market for 'refined' Lithium supply at prices which other 'processors' could not match due to being subject to safer/stricter environmental controls and regulations. Now advances in 'processing' (and identification' of vast Lithium 'ore bodies' in Australia on top of those in South America etc), supply could easily satisfy likely demand for significant EV and Renewable Energy Battery demands. Anyhow, total conversion from fossils is NOT the goal; just ENOUGH to reduce dangerous CO2 levels. Cheer up, mate! :)
not rated yet Nov 16, 2017
'death wish bias'

Actually, the above post was optimistically biased, as I was omitting the even greater market and demand for batteries in grid balancing.

Consider the numbers. The US has about 250 million cars and light trucks, each demanding say 100 kWh of batteries, and each battery lasts on average 10 years in use. That's 2.5 TeraWatt-hours worth of batteries a year that need to be manufactured.

The US electricity consumption is 4 PetaWatt-hours (4,070 TWh) per year, so a single day worth of distributed backup batteries on the grid would be 11 TWh

Maintaining that one day reserve requires 1.1 TWh per year as replacements. If you want to maintain a 90 day reserve for energy security and seasonal/year-to-year demand shifting, you need to produce 100 TWh of batteries a year.

The question of whether there's enough lithium in the ground doesn't even enter the equation, because there's not going to be enough factories above the ground to turn it into batteries.
5 / 5 (2) Nov 16, 2017
She expects to cut battery cell cost from $145 per kilowatt hour of electricity to under $100 in four years

Seems in line with the trend of lithium ion batteries over the past several years - as prices have steadily dropped by 10% per year.

Lithium is not used up in batteries. It can be recovered from old battery packs. Tesla already has a partnership going with a company (Umicore) for just that. So unless everyone decides to buy an eV *exactly* next year we'll be fine.

(This isn't even counting the plethora of alternative battery technologies being looked at - which could be drop-in replacements without much in the way of reingeneering...i.e. if you buy a car today with 200miles range then you might be able to upgrade to longer range without too much in the way of cost 10 years later)
not rated yet Nov 16, 2017
China had a polluting-industry mentality which ignored environmental damage/costs and so cornered the market

That's another thing: battery prices are down -because- China has cornered the market by ignoring the environmental issues. China has also government subsidies that reduce the cost of shipping for export-only companies.

The cost of lithium itself is currently neglible. There's about $100 worth of lithium in a typical EV battery. Almost all the cost of making a battery is in running the factory: the energy, the logistics, the machinery, the maintenance and the waste management. Once you clean up the production chain, the prices go up.

So from everywhere you get these price pressures - supply being overwhelmed by demand, rising production costs, rising raw material costs... how exactly are they going to make EVs cheaper?
not rated yet Nov 16, 2017
Seems in line with the trend of lithium ion batteries over the past several years - as prices have steadily dropped by 10% per year.

Trends are not predictions.

Lithium is not used up in batteries. It can be recovered from old battery packs.

Battery recycling is more expensive than producing batteries from new materials even at current prices, so the batteries should be more expensive than they are today before recycling can begin.

It's a really energy-intensive process because in order to safely crush the cells, they have to be frozen with liquid nitrogen. Then various strong and toxic acids and bases are used to dissolve the materials and separate them.

So unless everyone decides to buy an eV *exactly* next year we'll be fine.

That's what everyone keeps predicting. Everyone keeps saying such and so many percentage of cars will be electric by 2025 - well if they're going to come true then people better start buying them right now!
1 / 5 (2) Nov 16, 2017

I know what you are trying to get at; but it's not as you think it is. You ignore the usual/inevitable advances in transportation (by EV's which make transporting Lithium cheaper/safer without onerous environmental/pollution control costs. And Recycling/refining advances/economy of scale. And when Australian deposits exploited as well, then Lithium will be easily within reach of all users anywhere. And the same advances in manufacturing processes/locations that made Internal Combustion engines and Solar Panels and Windpower mills more safe, cheap and available also applies to Lithium cycle/industry/power industries. And HEALTH/ENVIRONMENTAL SAVINGS and more reliable and less R&M (compared to ICE engines and fossil) will OFFSET a lot of 'initial costs' during transition period to 'mature' EV/POWER national/international economy infrastructure. Really, mate, even when you're 'being optimistic' you are being really really pessimistic. Relax and cheer up, mate! :)
1 / 5 (2) Nov 16, 2017
Sorry, I have to log out again! Very busy offline. Back later/tomorrow if I can. Cheers all.

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