Project Better Place CEO Calls the Volt a Niche Product
Shai Agassi is the CEO of Project Better Place (PBP). That is a well-financed endeavor to create an infrastructure of battery charging/swapping stations across, at present, Israel and Denmark. The concept is that electric cars would be cheap if they didn’t have batteries in them. The batteries would be owned by PBP, and drivers, when their charge got low, could pull into a swap station and have a fresh fully-charged battery swapped in. The drivers would never own the batteries and simply subscribe to the service, possibly even getting the car for nearly free, analogous to some cell phone plans.
As nice an idea as it is, it is considered unlikely such an infrastructure could be created across the vastness of America and thus would be unlikely to be embraced here. In fact, as battery technology matures both in terms of range increases and cost reductions, the whole idea could become moot.
At the Paris Auto Show, to illustrate his belief that his approach is superior, Agassi took a shot at GM who contends the Volt will eventually become a global high-volume car. He indicated that the Volt would be priced too high to be mass market car, stating “the Volt is a $20,000 car that will cost $40,000. It will be a niche product.”
He instead contended “we want to make electric cars a mass market thing, and the only way to do that is to make it cheaper than driving a regular car.”
Source (Wall Street Journal)
Popularity: 2%
Related posts:
- A Chat with Project Better Place Investor, Michael Granoff
- “Project Better Place” Electric Car Charging Company Launches with $200 Million in Funding
- Project Driveway Update
- Project Driveway Begins: GM-Volt.com Test Drive of the Chevy Equinox Hydrogen Fuel Cell Electric Car
- The Garage Doors Have Opened on Project Driveway
(5 votes, average: 4.4 out of 5) 
Loading ...
October 7th, 2008 at 9:23 pm
That is somewhat true. At least at first, the average American unfortunately will not be able to afford this car. I think that at this point though, any progress is progress. I hope they don’t try to come up with any type of battery lease sort of thing. That would be a bad move. I would hate to own a huge electric car, and not really own the battery that enables it.
October 7th, 2008 at 9:23 pm
I just think that, in general, we need to not look at the Volt as simply a car. The Volt can help get our country back on track by reducing the amount of money we funnel out of our country every day. Let’s stop thinking short term prices, and start thinking long term savings… Not just the immediate result in our own pocket, but also with respect to the health of our country in general, and the long term savings that we’ll all reap.
NPNS
October 7th, 2008 at 9:25 pm
I do hope that we see a lot of businesses and academic environments as well as retail environments offer charging stations, possibly with credit card payment options. I think it would be nice to charge quickly with 220v while at a mall, or at school.
October 7th, 2008 at 9:36 pm
#2 Eric C. I agree. We also very much need to remember there are people giving their lives, health, careers and family life to assure us the free flow of oil that makes this country run (this also include other countries besides the U.S.). We have seen just recently what happens to our economies when the price of oil shoots up. If the supplies were interrupted, all bets are off on any countries economy surviving.
So yes the Volt ( or any electric ) represents much more than just being a car.
October 7th, 2008 at 9:36 pm
The Volt of 2020 will be vastly different in cost and capability than the Volt of 2010. This is a long-term project and the technology is just becoming viable for production. Ten years from now you will undoubtedly see better, cheaper batteries. I would like to see how many battery swapping stations PBP has in 2020 vs. the number of ER-EV’s on the road. Infrastructure is expensive. it’s inhibiting hydrogen and biofules as the “best” solution. The smart money is on the Volt.
October 7th, 2008 at 9:47 pm
I’m all for more EVs on the market, but scott above is exactly right. hey jealousEEee….
October 7th, 2008 at 9:53 pm
It will be a niche car. If normal people don’t see a value in the Volt, they won’t buy a “normal car” that costs $40,000. So yeah. He’s right.
October 7th, 2008 at 9:55 pm
It’s best to deliver the Volt with no strings attached. Simply sell the entire car (with pink slip) to the people who will pay the net cost of $34000.
Let’s be honest about this. Each time a design change or a proposal to lease comes along the potential buyer looks at another road block.
My initial thinking:
1>I love electric things and want an electric car.
2>GM is proposing an affordable electric car which is made in America and initially priced at about $26000.
3>The Volt will compete with many Japanese hybrids which I could care less about.
Now since then:
1>The Volt has drag problems and will need to be streamlined.
2>Costs are more than expected…more like $34000 than $26000.
3>May have to lease a battery or even the entire car. How much does that Japanese hybrid cost?
This is not the time to play with fire. Let’s get the Volts wheels on the road as soon as possible.
=D~
October 7th, 2008 at 10:02 pm
If they fixed the idiot who can destroy anything problem by restricting the charge and discharge zone then it will be a $30,000 car . I have that problem with my DAD if it can be broken with him in control it will be . But then he does not drive any more .
God Bless
Edwin Mang Jr.
October 7th, 2008 at 10:05 pm
Keep dreaming Agassi. If GM was making a niche car, they’d have stuck with the original styling. They went for a much more “vanilla” styling (I still like it) that appeals to a broader group of people. So GM put their money where their mouth is that they expect this to sell in volume.
Who cares what this guy says. I’ve course he’s going to denegrate the Volt. It’s his competitor and severely undermines his case for a massive PUBLIC investment in quick battery swap stations.
October 7th, 2008 at 10:14 pm
Irony… when considering the size of the world car market, the market of Israel and Denmark would be considered “niche”.
I wonder how much markup there will be on the electricity you get at these specialized gas… er, I mean, battery stations.
October 7th, 2008 at 10:14 pm
VCR, DVD, MP3, TELEVISION, AUTOMBILES, CELL PHONES, THE WHEEL, Nuff said, all “niche” products at one time. If you build it, they WILL come. If nobody makes that first bold step, nobody else will. How will the Japanese makers ever have a plug in if the General doesn’t do it first? They don’t invent anything, they just take it slow, wait for somebody else to make that bold step, and then steal the idea, and make it smaller. Sorry, couldn’t do a post without picking on Toyota!!!hehehe
October 7th, 2008 at 10:22 pm
Yep. The Volt will initially be a niche car just like the Prius. You know what? Cell phones, PCs and flat screen TVs were once small little niche markets for rich people too. The E-REV is the way forward. Shaggi’s plan is just about lining his own pockets because his battery swapping BS will never get beyond one or two demonstration stations. He should keep his mouth shut so that people don’t look too closely at his wacky scheme.
October 7th, 2008 at 10:23 pm
I find it amazing the amount of name calling/degrading of everyone that goes on in this segment. Not just this guy, but seemlingly everyone. GM and Toyota both come to mind as they seem to have a never ending ‘death by papercuts’ approach to each other.
Yet for all the bluster, none of them have an actual product. My hypothetical world car for the masses is better than your hypothetical car.
Honestly, and maybe it’s just because I/we have been following it for so long now, it is just getting tired, I barely even comprehend the words as I read them. I really just shrug these off as, whatever….par for the course.
I’m too the point I really don’t care about any of them…I get more and more entrenched in the camp of “someone, anyone just make me a fricken EV and shut your pie holes already”. (technically speaking)
October 7th, 2008 at 10:50 pm
Shai Agassi is partially right for the first few years, IF GM keeps the MSRP on the base Volt close to $40K and IF PBP keeps the overall cost of operating an electric car in Denmark & Israel competitive with conventional cars. But for obvious reasons, in a very few years GM’s & PBP’s roles will reverse…. PBP will become a niche car provider and GM will become an “everyman’s car” supplier.
October 7th, 2008 at 10:51 pm
I don’t see battery-swapping stations EVER being a viable, consumer-loved service. Can you say get-rich-slow scheme? If you’re paying an inflated price for electricity, which you would, the only usefulness of battery-swap stations would be on long hauls. Then, you have to deal with possibly getting an over-used, low-quality, not fully charged or old/bad (falsely charged) battery. That’s not including the time it would take to change out a battery or the cost passed to you from the overhead of keeping a surplus of lithium ion batteries across a service region. If it is a subscription-based service, there is also the increased pressure to take the risks involved with using the service, lest you waste money.
In just a few years’ time, the charge station will catch on, though. I envision a utopian ‘filling’ station. In this combination park/charging hub, people can park their cars along a curb or gas-station style, in covered or uncovered areas, to plug in their cars. While they wait the 20 minutes it will take for their vehicles to take in the energy they require, they can step over to a nearby bench and enjoy a quick read and refreshing lemonade, listening to birds sing from the trees enveloping the property.
How nice it is for them to take a rest for a few minutes while they refuel their car with the constant hum and roar of tractor-trailer diesels replaced by the near-silent whirr of the nearest electric motors. Only the whispered rolling of rubber on permeable pavement and a friendly ‘hello’ of a neighbor would break the peaceful calm.
No utopia, no sale! =D~~~%~~~~
October 7th, 2008 at 10:55 pm
BEVs and a network of battery swapping stations? Sounds good to me. E-REVS? Sounds good to me. Get’m to market. Make’m practical. Give me options ASAFP!
October 7th, 2008 at 10:56 pm
Dont forget how expensive fuel is in Europe. THe payback will be VERY fast at 10 bucks a gallon.
October 7th, 2008 at 10:57 pm
The net price of the Volt after tax credits will be around $30K. Not $40K. This comes straight from GM’s CEO and the U.S. government. Why doesn’t anyone in the press listen?
October 7th, 2008 at 11:02 pm
Shai Agassi has managed to convince the
controlling politicians of several rather
energy-desperate countries (Israel and Denmark)
of the merits of his battery swapping scheme (an
old idea not original with Agassi) as the best
way to avoid petroleum dependencies. There are
severe problems with his arguments :
1) his system won’t come anywhere close to
removing petroleum dependencies - fully 1/3rd
is used for commercial trucking, boats, etc,
which won’t be covered by his system, nor
will any of the petroleum used to make heating oil,
lubricants, etc. This will be true irregardless of
which private transportation technology is adopted.
2) his tiny vehicles will not satisfy the needs
of the driving public;
3) the swapping frequency while on a trip (about every
80 minutes) is needlessly inconvenient;
4) Each highway traveller on a trip in his system requires many
battery packs in reserve every day to meet his mileage
requirements. This greatly increases the number of battery
packs the system and its overall costs. Batteries are one of
the main reasons electric cars are not practical, and his
system makes that deficiency even worse.
The reserve battery packs must also be located in just the right
spots, which increases still futher the overhead.
4) Agassi’s economic arguments are only directed at gas powered
vehicles, which are NOT the main competitors his system
must face :
5) Plug-in hybrids are his main competitors, like the 40 mile
electric ranged Volt, which can accomplish every bit as
much as his much more expensive (trillions for infrastructure),
inconvenient system of tiny vehicles :
For one thing, we can electrify a lot more vehicle types
as plug-ins (e.g. large pickup trucks, vans, etc.) than we
could using swappable battery power drivetrains, which are
severely limited in their power outputs.
And we can easily demonstrate, using DOT commuter trip
statistics, that a 40 mile range plug-in fleet can avoid 94%
of current commuter gasoline requirements (97% if 1/4 of the
workers can recharge at their workplace), and probably more
than 93% overall. That range will likely be 50 miles in the near
future, which would avoid 96% and 98% respectively.
Regardless, it’s clear that any liquid fuel
requirements of a plug-in fleet can be met entirely by ethanol.
Since ethanol is more carbon neutral that typical electrical
power, Agassi’s scheme is inferior in carbon emissions, although,
quite frankly, any differences between the two systems is
insignificant and unimportant.
Agassi has simply not produced a viable, or even defensible,
technology for the electrification of the fleet. And when
batteries become quickly rechargeable, Agassi’s entire trillion
dollar system becomes instantly obsolete, whereas the current system we have would simply find gas stations swapping out gas pumps for charging posts as the demand irrevocably shifts from gasoline to electricity. And since a very large portion of the electricity used to fill those batteries will come from household outlets, a great many of the gas stations today will disappear, making the transportation fueling system even more efficient.
Agassi is trying to sell a very old and inefficient system that, in actual
practice, doesn’t represent any advancement. In anything, economics or environmental. There was another, actually far more
intriguing idea floated around , using replacement electrolyte being pumped into the battery to replace the exhausted electrolyte on a traveller’s car. It’s the lead acid batteries that killed that idea.
October 7th, 2008 at 11:05 pm
I have high respect for Shai Agassi and think his work will contribute greatly to solving the world’s energy crisis. He’s a genius that is highly motivated and massively funded. Good things are going to come from this. Even if his project turns out not to be the final solution it will help us get there. It will answer many questions about what the market will accept.
While I do feel the Volt will initially be a niche market (due to the price), I think the price has the potential to come down drastically as battery technology improves and as economies of scale are realized.
When talking about the cost of the Volt people should not forget that the Volt essentially includes a tanker truck of gasoline with the purchase price. How is that? Well, if you look at the price difference of using electricity instead of gasoline you can make the calculation. It’s all about the time value of money. You have to look not only at the original price of the vehicle but the value of the investment when the asset is fully depreciated. Since we don’t know what the price of gas will be in a few years (could be $10 or $2 per gallon for all we know) I say the price of the Volt could be valued for the stability of it’s cost of operation (electricity prices will be much more stable than petroleum prices).
We also cannot overlook the price of the infrastructure needed for the swap-out concept. It will be a massive and expensive project to fully prepare the U.S. for BEV operation. Just think of trying to get from Florida to California with the current state of lithium-ion battery technology. Low range, heavy and will require many swap-out stations to get there.
About the state of battery technology… What path we take is mostly determined by how electrical storage technology progresses. If that Toshiba battery turns out to be the real thing and is inexpensive or if EEstor is for real we can all join hands and forget bout the Volt’s drivetrain or PBP’s swap-out stations. The BEV (with mounted electrical storage system) will rule the day.
Thus, Let’s make Volts and let’s get PBP up and running in Israel. Let’s shotgun blast our way to a solution. Both have enough promise that moving forward is a no-brainer. Let the games begin!
October 7th, 2008 at 11:10 pm
I think the real problem is that many of us spend time here each day, and when there is at least 24 months, and 24 days before the first Volt is to be ready for sale, it is all just so far away……….. Look what has happened around us in the last two weeks! Who knows what the situation will be in two years.
And then there are the questions for which there are no real answers, except to wait and see:
Will Toyota really have a factory plug in vehicle available in quantity before the Volt?
What are the specs and availability timeframe of the Saturn Vue plug in?
What is Mitsubishi really doing with production of the iMiEV? Available in the US, when?
Was Chrysler just blowing smoke, or are they really going to have products available as soon as they have announced?
Tesla sedan?
Fisker?
What about the manufacturers that are saying nothing?
Did you notice that the word availability keeps popping up?
And I have not even mentioned the scariest word of all: Pricing….
It is just going to be a very long two years. I have a feeling that we are going to wear out many keyboards in that time!!!
October 7th, 2008 at 11:17 pm
The Volt may or may not be a ‘niche’ car. It all depends on one thing: price.
Price it too high - The Volt remains a niche car.
Price it correctly - The Volt becomes an every-man car.
October 7th, 2008 at 11:38 pm
#20 kent beuchert Says: “1) his system won’t come anywhere close to removing petroleum dependencies - fully 1/3rd is used for commercial trucking, boats, etc, which won’t be covered by his system, nor will any of the petroleum used to make heating oil, lubricants, etc.”
————————————————————————————–
Yes, I agree.
Heavy duty and long distance travel by land, air, and sea will by powered by the last drops of oil or by bio-fuels.
This is why any plan for oil independence must include bio-fuels. In particular, algae is probably the most promising source for diesel and jet fuel.
October 7th, 2008 at 11:54 pm
The most interesting idea coming from PBP is not the battery swapping — that’s a loser — it’s the business model of giving away the hardware to sell the supplies. The reason this works is because the difference in the cost per mile between an electric car and an ICE car are so enormous if people will pay you what they’d pay to run the ICE car you can give away the electric car. This approach would be a proven winner because people are irrationally insensitive to running costs and irrationally sensitive to acquisition cost.
The numbers don’t quite work out for a free car, but the idea of subsidizing the acquisition price by charging for the electricity is sound and has, I’m sure, been considered by GM. The best positioned companies for this would of course be the electric utilities but I can’t see that happening for a number of reasons.
October 8th, 2008 at 12:24 am
If there were battery stations around they could make lots of different types of EVs, sport cars (concept Volt) pickups, sedans, even limos. Semis (big trucks) have lots of room for batteries, and what happened to the Nissan Pivo it looked like a lot of fun @ 90 mph riding in an egg on the freeway, savin gas
NO PLUG NO SALE =D—–$-00000
October 8th, 2008 at 12:57 am
I could see the resurgence of roadside cafes and motels with the increased number of electrics on the road (whether E-REV or pure electrics.) If it takes 2-3 hours for a full charge, that’s plenty of time to enjoy a nice, leisurely meal, and browse around a souvenir shop, or even spend the night. How cool would it to see the resurgence of Howard Johnson restaurants with a row of charging stations out front?
October 8th, 2008 at 1:02 am
that’s a lot of eatin and sleeping every 40 miles it might take awhile to get to work
NO PLUG NO SALE =D—$00.00
October 8th, 2008 at 3:34 am
Nasamen #15 and Statik # 14
I share your views and I compare the present situation with the period of development of personal computers.
Facts are more important than opinions, especially when competitors or potential competitors confront.
Moreover personally, after two bad experiences, I swore that I will no more own or rent a Renault, PBP doesn’t have my favors then.
October 8th, 2008 at 3:38 am
#25 DonC
I’m skeptical of this business model. People are irrationally insensitive to running costs because half of them are fixed (insurance, taxes, depreciation, some maintenance). Another 25% of the costs are variable based on mileage, maintenance. But when I’m driving I don’t “feel” like I’m paying that in every mile. Finally, we really only see gas as the running cost, though even at high gas prices it’s still around 25% of the cost of owning the vehicle. So most people, if you ask them their $/mile would calculate off of gas mileage, even though it’s only a fraction of their cost. This new business model would require people to consider the whole cost. As an anal engineer I’d do it, but I doubt most people would. They see $0.35/ mile and think “what a rip-off.”
Another reason why I doubt this business model will work is that it takes the fun out of driving. It may make me spend money smarter, but I’ll enjoy driving less, watching the tripometer count up my bill. Driving is supposed to be fun in our culture.
October 8th, 2008 at 5:16 am
Shai Agassi is right and wrong. It is all about the timing.
Initially, the Volt will be a niche car. GM is not making a lot of them, and the ones they are making are going to be too expensive for the masses.
But as time goes on and the number of Volts produced increases, the cost will come down and the masses will be able to afford it. At that point, the Volt will no longer be a niche car.
Shai Agassi is trying to remove gas from the car equation.
I give him credit for that and say thank you.
Although I don’t see PBP working here in USA and Canada, it can work nicely in much smaller countries.
Our planet is so dependent on gasoline for our vehicles, there is plenty of room for others to find ways to get off of oil. I personally don’t care how many different ways there are to do it, as long as we do it. I can say that so far no one has come up with an EV that will work for me and my 101 mile daily commute. But I support all of their efforts and hope they all succeed.
This has been my 2¢
October 8th, 2008 at 5:49 am
For what this car will do for america the Govt should rebate $20000 of the purchase price decreasing by 2000 per year for 10 years. IT surly would not cost more than the endless war in iraq and we will actually get something for our money.
October 8th, 2008 at 6:11 am
PGP sells well as an idea because people have in mind the size and weight of a traditional car battery. They know that a battery that small can be swapped in a few minutes.
When the scale changes as much as it does to a battery big enough to power the Volt (or any other car), the battery becomes a huge heavy object that can be maneuvered except with special equipment. Furthermore, for a while it will be non-standardized, so every different electric vehicle will have a different battery.
For auto batteries, the concept of quick swap will not work in the US. It might work within a city, or maybe within a small country, but even there it would require a huge infrastructure investment for the land, equipment, stations, and personnel. Think about the space required to store 10,000 batteries, or the time required to swap them all.
October 8th, 2008 at 6:15 am
Well a car that costs 40K is certainly not for everyone. I still think that with the resources at their disposal, they should have tried to improve in existing technology and deliver a pure electric with a longer range.
October 8th, 2008 at 6:56 am
Niche… lol.
Lets see how “Niche” it is 5 years after it is released. There are so many people that still have their head in the sand regarding the public’s desire to have an alternative fuel vehicle.
Viva La Ostrich!
October 8th, 2008 at 7:09 am
Agassi has a niche in his brain. Missing!
October 8th, 2008 at 7:21 am
Side notes:
VW is officially in the EV game. Well, they are smarter apparently than most…and will be throwing a Audi badge on it….gives them more price ‘flexibility’…smart move.
—————-
“… the small electric Audi “will not be based on the A1”, the firm’s premium supermini, which was previewed by a concept car in Paris.
Instead the electric Audi is likely to be based on the VW Up – which will be badged the Lupo when it goes into production.
The Lupo’s platform is going to be shared across the VW Group brands. It should be versatile enough for a battery pack and converter to be mounted in the rear. ”
http://www.autocar.co.uk/News/NewsArticle/Volkswagen-Concepts/235289/
October 8th, 2008 at 7:25 am
One more player, this time Mercedes/SMART:
” In 2012, Daimler will start building between 12,000 and 15,000 electric Smart ForTwos annually. Zetsche said some of those will make it over to the U.S.”
http://www.egmcartech.com/2008/10/06/mercedes-benz-e-class-and-c-class-hybrids-coming-to-the-us/
You just knew that SMART would be out with a announcement like this almost immediately when the $7,500 rebate rolled out (I believe I said that myself in the rebate thread—back pats–).
The 2012 seems far away, I don’t know if they are being conservative or what…seems odd considering they have a couple hundred SMART eds already puttering around. They could be just toying with the market, underestimmating, but yet telling consumers it is coming. On the other hand they are saying 12,000-15,000 in 2012…and there seems to be a real roadblock to any kind of production numbers in 2011 or earlier.
October 8th, 2008 at 7:32 am
I’m with Statik. Until someone actually starts selling PHEV’s it’s all BS & vaporware.
LJGTVWOTR
October 8th, 2008 at 7:36 am
#25 DonC says “The most interesting idea coming from PBP is not the battery swapping — that’s a loser — it’s the business model of giving away the hardware to sell the supplies. ”
==================================
I agree. How do you picture this working for an EREV?
Ignoring the CA warranty requirement for the moment, one way would be to downplay the initial battery price — or even give then away — requiring people to buy replacements when needed.
That would be the “ink cartridge” model.
October 8th, 2008 at 7:39 am
#38 statik says, regarding the electric Smart, “The 2012 seems far away, I don’t know if they are being conservative or what…”
========================================
Just guessing, it is probably an issue of battery availability at the right price, together with tooling the mods required to put them in the car.
October 8th, 2008 at 7:44 am
So going down the checklist now of who is in the EV game (announced production/4 wheels)
GM 2011-US
Chrysler 2010-US
Mitsubishi 2009-Japan/2011 US
Toyota 2010-worldwide
SMART 2012-US/Euro
Audi/VW 2012?-no details
Tesla NOW-US/Euro
Nissan/Renault 2011-no details
Subaru 2010 - no details
Th!nk-NOW -Norway/2010 US
Miles-US 2010
——————-
Zenn-NOW-LSV
Zap-NOW-LSV/US 2011 (Zap-x?)
AEVCO-NOW-LSV
Dynasty-NOW-LSV
Chrysler/GEM-NOW-LSV
Who is not as of yet:
Ford
Honda
Mazda
Hyundai
Just ‘off the top of my head’ so feel free to critque.
——————————————-
Total EVs on the road in the US:
2005-51,398
2006-53,526
2,128 new EVs were plated in 2006
October 8th, 2008 at 7:48 am
I dont know if i’d lease a battery, I’d rather own my own spare, so i could keep it charged at home for a “quick swap”. I guess its good to approach the problem at multiple angles. The best one will succeed (hopefully).
October 8th, 2008 at 7:54 am
Swapping batteries just does not make sense!!
1) An infrastructure would have to be created at a great expense.
2)Owners would be more likely to abuse the batteries causing them to fail prematurely.
3)The labor involved to keep keep those battery exchange center opened would be very costly, and inconvenient for the customers. Just picture yourself waiting in line for your turn on a busy day.
I’m sure one could think of many other reasons why it would not work.
October 8th, 2008 at 8:02 am
I think at this point we will be lucky if this car is under $40,000. After watching the 60 Minutes report I am more convinced than ever that their target will change to $45,000. Lutz was hesitant talking about really “trying” to keep the price under $40,000 - but at this point they still have no working prototype and unknown software issues to deal with.
What are the odds that with no working prototype and no finalized software that no other cost issues arise and therefore they can stick to their soft-target of $40,000?
October 8th, 2008 at 8:07 am
How about a small trailer of batteries with a quick connect plug? I could unhook the little trailer battery pack when it was drained, then plug a new one in. Would be good for long hauls. Not sure how trailers affect aerodynamics. Parking would be more difficult in the city.
Why do some people say infrastructure would cost so much. Its already there. All you need is a building (there’s plenty for lease now), electricity, and a cash register.
October 8th, 2008 at 8:09 am
Shai Agassi is correct that, at this moment, the Chevy Volt is a niche vehicle. In two or three years, as volumes (domestic and foreign) increase, and battery costs decrease, the E-REV platform will gain broader market penetration.
I suspect that a new battery or capacitor tech will emerge that will significantly increase range, reduce costs and reduce recharge time, and render Shai’s business model obsolete / moot / overcome-by-events.
October 8th, 2008 at 8:17 am
Let’s face it. We are going to live for 25 more months with people taking shots at the VOLT and GM. Let’s continue to hope that GM can find small ways to cut this time down.
Consider the source on this one - Agassi has a vested interest in keeping the VOLT idea a ‘niche product’. He has a company all set-up ready to capitalize on the potential ‘electric car boom’, provided he can get auto companies to build electric cars without batteries and then have the consumers rent his batteries. He wants to reap the electric car rewards without the expense of building and selling electric cars.
As for GM, they are staking their future on a car that has the potential to eliminate a consumers use of petroleum in their everyday commute. If successful, this is absolutely NOT a niche product.
Scott @ #5 has it right. The 2010 VOLT is the first step. The VOLT of 5 to 10 years out will be a car for the masses at a very affordable price point - and available in a variety of body styles to suit various needs.
Go GM. Go VOLT. Bring it on!!!
October 8th, 2008 at 8:28 am
Shai Agassi is an idiot, the idea of swapping out batteries makes no sense, either here or in Israel & Denmark.
Its much easier to just plug the vehicle in rather than have to build a series of battery swap-out stations.
This is for people who don’t want to wait for their BEV to recharge, they in fact are the niche market, not the potential Volt buyer.
This is an old idea, dating back to when lead-acid batteries were the only available batteries, and the idea then was that you simply pumped out the expended electrolyte and filled the battery with fresh electrolyte.
Although in this case, because of the modular nature of the batteries, the whole battery is swapped.
Shai Agassi creates new BEV middle man: ‘The Battery Swapper Guy’.
Dumb…stupid…dumb
October 8th, 2008 at 8:31 am
Agassi’s plan could work very well for Israel and Denmark. It would not work in America due to the difference in size as well as the auto-centric development of America to date. We commute far greater distances than workers in Israel or Denmark, on average.
That being said, ANY plan to get an economy off their dependence on foreign oil is a needed step. Right now we (America) have NO PLAN as a nation. We’ll see how the new administration will handle that situation but apparently the recent administrations’ plan (from Reagan onward) has been to continue INCREASING our dependence on foreign oil. “If you fail to plan, you plan to FAIL.”
Let’s keep focused on the goal of totally ending our use of foreign oil. 100% replacement of foreign oil with other sources. Period.
=No Plus No Sale (for now; until batteries are cheap enough for an all-electric range of 200 miles or more - then I’m going all electric)
=Vote for solar, wind, tide and more nuclear power
October 8th, 2008 at 8:31 am
#48 Leok
As for GM, they are staking their future on a car that has the potential to eliminate a consumers use of petroleum in their everyday commute. If successful, this is absolutely NOT a niche product.
======================
I don’t know if that is totally accurate. They are trying out something new, and that is to be commended.
Changing over one line, of one low capacity, highly subsidized plant, three years into the future is not exactly staking their future.
(Besides, GM already staked their future on full size sedans and trucks with low quality and overpaid US workers, coupled with a bloated, multi-tiered management structure in the 80s and 90s…that didn’t turn out so well, and now they have the cement shoes, I mean debt to show for it on the balance sheet)
October 8th, 2008 at 8:32 am
Batteries cannot be moved around by pipeline or electric wire. Fuel cells using h2 with distributed production are more viable today.
What is key about battery-replacement, is the vast simplification of the vehicle that does not need a charging infrastructure on-board. Where the battery distribution network is fairly small, it’s possible.
My prediction, which I hope someone throws in my face when I’m wrong, is that the first retail Volt will be priced at $44,999.00
When the tax credit expires, it will drop to 34 and change.
October 8th, 2008 at 8:42 am
Remember that it was REPUBLICAN president Ronald Reagan who removed the solar panels off the roof of the White House (the ones that DEMOCRAT President Jimmy Carter had installed). Then he fought for years to kill all efforts to make us energy independent. We are where we are now because of Ronald Reagan. There’s your hero.
Reagan will eventually go down in history as the great betrayer that he truly was.
By killing President Carter’s plan to end our dependence on foreign oil (this was 30 years ago so we’d have been independent for many years by now) Reagan guaranteed the unstable regimes in the terrorist belt that we will continue to fund their murderous actions.
It is too early for most people to accept this fact but remember this when the true history is written.
October 8th, 2008 at 8:48 am
The PBP model is a socialist nightmare. The point is INDEPENDENT transportation. Not transportation that is dependent upon a huge company (for profit or non) or government agency.
October 8th, 2008 at 8:51 am
#42 statik on upcoming electric cars
==================================
Both Renault and Nissan have “concept” electric cars at the Paris auto show that look like they might be close to production, especially the Nissan NuVu.
October 8th, 2008 at 8:52 am
CS#53: I generally agree with you. I’m happy to participate in political debates here. But when politics are neither germaine to the topic of the day, nor in response to a provocation, please leave it out.
October 8th, 2008 at 8:53 am
He’s correct! The Volt is designed to help people overcome their “range anxiety” with electric cars. That was the EV-1’s lesson.
It will take years of personal EXPERIENCE with electric cars for the masses to build confidence. GM knows that the future car is electric and they know that “range-anxiety” is the biggest hurtle on the path to full electrification of personal transportation.
Anyway, there is NO one size fits all solution!
Ultimately, MOST (but not all) people will discover that the BEST way to handle THEIR personal transportation is for their primary car to be electric and their secondary, long range car to be an occasional ICE rental or public transportation with an electric rental at their destination.
October 8th, 2008 at 9:04 am
#55 RB
#42 statik on upcoming electric cars
Both Renault and Nissan have “concept” electric cars at the Paris auto show that look like they might be close to production, especially the Nissan NuVu.
—————————————————————-
I was under the impression that the NuVu was just a concept, but they were on the record to show a production ready EV at the Paris show and that it would be in production in 2010 (I bumped it to 2011, because I’ve seen something about limited quantity/fleet for 2010)
http://likecool.com/Nissan_Nuvu–Concept–Car.html
http://www.autoblog.com/2008/10/02/paris-2008-nissan-nuvu-ev/
Most likely it will be ‘the cube’ or similar platform. Nissan is on record for a US production test EV fleet in 2010 and cars in Japan in 2010. ‘They’ say global production in 2012…but I have not been able to find anyone that actually receives a paycheck from Nissan to back that up…so I’m doubting it.
http://carsguide.news.com.au/site/stories/story/first_drive_nissan_cube_ev/
October 8th, 2008 at 9:29 am
Mar#56: Did you read the previous posts? Thought not. Your political leanings are clear. My comments were in response to previous posts.
What is the purpose of the Volt?
It could be the vanguard of a revolution in our transportation to get us off foreign oil. Both electric vehicles and US made bio-fuels will be needed as well as solar and wind and the other carbon free sources to power these vehicles. Leadership (intelligent leadership that is) will be needed to make this happen.
That is the purpose of the Agassi plan; to free their country from dependence on foreign oil. It may not replace 100% of their oil needs but it is a worthy effort.
So, Mar#56 please check your political opinions at the door. The rest of us need to know the truth. And also try to read the article and do some research on the subject before you post.
October 8th, 2008 at 9:41 am
Every once in a while, the lefty folks trot out yet another attack on Reagan, and now our failure to end our addiction to foreign oil has been added to the list. LOL Did Reagan cut private sector funding? Nope. Did he cut government and private sector funding in Europe? Nope. In Asia? Nope. He took actions that were very unpopular to end the greater than 10 percent unemployment, greater than 10 inflation situation inherited from Carter, one of our worst Presidents.
But lets turn to the actual problem. Someone, I know not who came up with the Plug-in hybrid concept. And others are developing the Lithium battery technology to make the concept work. So lets start with 2000 and look at the funding development of Lithium batteries, and production facilities. Private companies are going to put lithium batteries in plug-in vehicles by 2012, which will be the beginning of effective action to end our addiction. But we need more wind power and more nuclear power too.
Go Volt
October 8th, 2008 at 9:52 am
#53, CS Guy,
My hero, Ronald Reagan, didn’t engage in empty, PR related activities, like Jimmy Carter. 1970’s solar tech was so much more expensive than coal to be completely laughable. 2000’s thin film panels ARE cheaper than coal, so if the next President wants to put one of the many new renewable tech’s on White House grounds to demonstrate their costs as below that of coal, I would be all for it.
October 8th, 2008 at 10:01 am
Agassi’s plan may very well work for small countries. At the least, it will be a first step. It could succeed and expand out to other countries where it fits. I don’t know that it will be successful in the U.S. because of the size of our country.
If I understood the battery swap-out plan, the battery replacement facility would be completely automated with battery storage and recharging handled by a moving rack system. The personnel to operate such a facility would be minimum. Might not even require a person on site.
I don’t agree with any of you who have called Agassi an idiot, stupid or whatever else he may have been called. He is certainly a very smart young man and will be a creative force in future as he has been in the past. I wish him luck as I do GM, Ford, Chrysler and so on and on. It’s to our benefit for him and others to be successful. And right now we need some signs of success for a change.
Statik, I liked the “cement shoes” comment. Pure 100% Statik.
October 8th, 2008 at 10:04 am
#30 Cautious Fan - “I’m skeptical of this business model. People are irrationally insensitive to running costs because half of them are fixed (insurance, taxes, depreciation, some maintenance)”
I actually don’t think that PBP model works at the moment — gas prices would have to be higher — but the consumer behavior part is solid. There is a lot of empirical work on this question and it more or less all shows the same thing. I wasn’t even thinking about cars I was thinking refrigerators. (It’s that pesky economics background). Although you keep a refrigerator for ten years, people will only buy a more energy efficient one if the payback is six months or less. That’s not rational since the discount rate is crazy high.
#40 RB - “How do you picture this working for an EREV?”
I was thinking about a BEV, like an Aptera or a Th!nk City. In volume I think those could be $20K cars with a battery. If an electric utility could require those cars to be charged at a rate high enough to be equivalent to what it would cost in gas, say a dollar a kWh, then they could probably get close to “leasing” the car for free or for $100/month. At the end of the lease period they could just clean the cars up and lease them again.
This is basically what PBP is doing by having a proprietary plug and requiring you to charge at their stations. Note the cars are pretty low end, which you need in order to make the numbers work. While the idea of having electric utilities lease cars is interesting, I don’t see this happening because you’d need a smart grid and the electric utilities are regulated monopolies not real competitive businesses.
I actually think the PBP model is workable in the US but only in select places with high density like NY City where distances are short and the car doesn’t need to be suitable for extensive freeway driving. It’s also very dependent on the price of gas. If gas were $8/gallon then the model becomes widely applicable and you could do something like lease a Volt for a couple hundred dollars a month (that’s just a guess I haven’t actually run the numbers).
October 8th, 2008 at 10:08 am
#42 Statik
Here’s a site you may want to look at. It has a pretty comprehensive list:
http://www.daughtersoftiresias.org/greenwiki/Electric_vehicle#What.27s_coming_out_soon.3F
October 8th, 2008 at 10:19 am
PBP has been discussed many times on this site. Long story short is that it looks good on paper in a socialistic sense, but it will never work. Take a look at the size of the Volt’s battery today and where it will be tomorrow. Not only will these swapping stations not work, they will never allow for the innovation that will drive this industry. Just think of the infrastructure you’d need, it makes a H2 infrastructure look like a piece of cake.
October 8th, 2008 at 10:22 am
#64 DonC
#42 Statik
Here’s a site you may want to look at. It has a pretty comprehensive list:
http://www.daughtersoftiresias.org/greenwiki/Electric_vehicle#What.27s_coming_out_soon.3F
———————————————
Thanks…that seems pretty comprehensive, lol.
Side Note: GM got down to $6.42 today, off $1.14 (lowest since 1952) before the market rallied, still off 50 cents at $7.06. A fresh low.
Citi group moved it and Ford both to ’sell’….timely, lol. I’m sure there investors are tickled pink about the ’sell’ rating coming out now, when the stock is off 85% THIS YEAR. Raises all around fellas! Have to keep those stellar brains working in the investment division at Citi!
http://www.reuters.com/article/marketsNews/idINBNG35228520081008?rpc=44
FYI, Ford is off .11 cents at @$2.81. (Two dollars and eighty one cents…just thought I’d write that out for effect).
October 8th, 2008 at 10:24 am
Tim #57
“Anyway, there is NO one size fits all solution! ”
*** *** ***
Absolutely correct. How on earth would you build an infrastructure of swapping stations for technology that will progress at an astronomical rate driving techology and bringing the cost down? The advantage of the Volt is that you don’t need infrastructure. Let a competitor build their version (Like Ford or Toyota) and push the envelope further.
Obviously if the Volt catches on in Europe it will be the end of Shai’s dream.
October 8th, 2008 at 10:37 am
How heavy are these batteries again? Like, 400 lbs?
They want to “swap” them in and out in 5 minutes at a recharge station?
October 8th, 2008 at 10:48 am
From a design and engineering perspective, the whole battery swapping idea is absurd.
The extra mechanisms needed to allow swapping would add a ton of cost, complexity, and safety issues. It also means that every electric car from every company would need to use the exact same battery system, and the exact same swapping mechanism, and keep them the same for a long time (so less improvement). Sorry, not practical and not going to happen. A quick charging interface standard maybe, but battery swapping … forget it. May as well try swapping fuel tanks instead of refilling them.
October 8th, 2008 at 10:49 am
#14 statik:
No s**t! Oh well, at least I didn’t buy any GM stock.
#17 ThombDbhomb:
Well said. Sums it up in about two lines. Short and sweet. Thanks.
#31 Rashiid Amul:
Amen to you as well. What do we always say at meetings (whether we believe it or not!)? “There are no bad ideas”? If PBP has the money and the management skills, let them try it. if it works, great. If it doesn’t, some Silicon Valley venture capitalists are out a few million $. Oh well
October 8th, 2008 at 11:00 am
I’m fairly new to the site and this may have already been discussed, but:
Instead of a battery swap, have a removable ICE that could be stored somewhere other than in the car.
This would save weight and probably increase the “battery only” driving distance.
The motor could be slipped in to the Volt and plugged in as needed for longer than 40 mile trips.
Maybe have ICE rental stations so Volt owners could buy the car with or without an ICE.
October 8th, 2008 at 11:03 am
I want a $20k volt. You got any of those anymore of those $20k volts lying around Lutz?
October 8th, 2008 at 11:17 am
Agassi downplays the Volt, because for his project to work people need to subscribe to his service. No need to subscribe if I already own the batteries.
October 8th, 2008 at 11:17 am
From what I’ve read the Better Place car is no deal. I believe they want to charge hundreds a month for their batteries and electricity. It will only be worth it to those who make a lot of short trips. I say short because, for many reasons, the battery swapping model is fatally flawed.
With government rebates and tax incentives I don’t GM will be able to keep up with demand for their “niche” vehicle. Myself, I’m holding out for all-electric but I have no doubts about the future popularity of the E-Rev drivetrain.
October 8th, 2008 at 11:43 am
I’m coming late to this thread, but here are some thoughts…
1. Lyle, I remember you did an interview with Mike Granoff (Shai’s co-hort) months ago. Perhaps you could snag an interview with Shai himself? Better to get the info. straight from him directly rather than the media filters.
2. A lot of people here are hung up on the swapping stations. To my understanding of his plan, the swapping stations are a relativley small part of the total infrastructure package he plans to provide. His biggest expense will be the re-charging “posts” that he intends to install at homes, places of business, in towns, and retails. The swap stations seem like more of an afterthought for the people who occasionally drive further than a hundred miles.
3. Shai provides a very detailed and comprehensive explanation of his plan here:
http://www.betterplace.com/press-room/videos-detail/a-moment-of-transformation/
Take a half hour when you have the time and at least give it an open minded chance. I personally like his ideas, however I think it would take a “moon shot” kind of impetus for our nation to move ahead with this kind of plan, and frankly right now, sadly our gov’t has other pressing concerns right now to give a plan like this the time of day.
4. GM: How difficult would it be to make an iteration of the Volt with no range extender ICE, but a larger, swappable battery to accomadate the Better Place infrastructure? I would think it would, if anything, be more simple, agreed? Food for thought.
October 8th, 2008 at 11:44 am
Marcus #73
“Agassi downplays the Volt, because for his project to work people need to subscribe to his service”
*** *** ***
Yes, he’s the big winner WRT PBP. In Israel that plan might work but not in the US, no chance.
Let’s just imagine for argument that it was implemented in the US at great expense. The first thing that would happen is someone would come out with a long range EV that doesn’t need a subscription and competition would destroy the whole concept. This is why it will never get off the ground.
October 8th, 2008 at 11:47 am
#59 CS guy: Yeah, I rolled through the stuff above your first post. I didn’t see anyone else engaging in PARTISAN attacks. Still don’t. Your post at #50 was great. Stick with that, instead of engaging in PARTISAN attacks.
October 8th, 2008 at 12:23 pm
I have to agree with #49 Guy Incognito and others who say Shai Agassi’s idea is just plain dumb!
Say I bought a brand new Volt and drove it home. I’m not about to trade in that new battery pack the next time it needs a charge for another battery pack that is god only knows how old. It ain’t going to happen!
Even though the subject has not been discussed much lately, we don’t know for sure if the Volt battery pack will even be available for purchase; there are some battery company officials that would like to lease the battery pack. If they have their way, do you think for a moment they will stand for the battery pack being traded-in every time it needs charging? Again, they are not going to allow this to happen.
So, as much as I respect and encourage entrepreneurs, this is just one dumb idea.
October 8th, 2008 at 12:32 pm
#62 N. Riley says “If I understood the battery swap-out plan, the battery replacement facility would be completely automated with battery storage and recharging handled by a moving rack system. The personnel to operate such a facility would be minimum. Might not even require a person on site”
==========================================
It seems to me that to make this work the vehicle would have to be engineered anticipating the later automatic battery changer. For the Volt, I’m not sure how it is held in the car or how many connections to the battery there are with electric, monitoring, and cooling systems all involved. But I can imagine that it would be hard to automate removing a Volt battery because of the details involved, and putting in a new one is going to require some detailed check up that all the systems are OK.
That’s not at all to say that automated replacement cannot be done. But it does not seem to me that it can be done easily, or without prior planning in the vehicle design.
Then Volt gen2 is likely to do things somewhat differently than Volt gen1, etc.
October 8th, 2008 at 12:34 pm
#58 statik on details for Nissan.
============================
Thank you. Interesting links.
October 8th, 2008 at 12:47 pm
Let the technology catch up, Agassi! in 5-10 years electric cars and battery technology will be advanced enough (and cheapER) to where your infrastructure will seem outdated. Your plan sounds like a quick fix to TODAY’S battery tech. When range gets long enough (battery life is ALREADY long enough with a 10 year 150,000 mile WARRANTY, and a warranty means that they expect every battery to easily reach that amount of time and miles, that’s why it’s a warranty!) I wouldn’t be surprised if most Volts will live to half a million miles and roughly 20 years. I think people in American will be happy without that kind of battery swap-out infrastructure.
October 8th, 2008 at 12:55 pm
“[President] Reagan was absolutely adamant: America must be energy independent.”
“With the success of the Reagan presidency, how is it possible that an energy-independence sought by Reagan [would not] come to fruition more than twenty years later?
Decreased rates of consumption, together with the slashed oil industry regulations and a strengthened dollar unfortunately led to the opposite effect Reagan desired. Instead of increased American oil and energy production –thereby making America energy independent –the price of foreign crude oil –especially from OPEC –plummeted due to a surplus. Instead of seizing the initiative and the opportunity provided by Reagan, American companies instead looked again overseas to deceptively-low gasoline prices after years of high prices.”
“Americans are realizing now what Reagan knew in 1980. The incredibly-high dependence on foreign –especially Middle Eastern –oil is not just an economic threat, but a national security threat as well, especially since 9/11. And drilling at home is only part of the answer. The rest comes in the varying and diverse methods of energy production, from compressed natural gas to solar and wind power.”
(http://community.mccainspace.com/kickapps/_Reagan-and-Energy/blog/104154/41158.html)
We need a plan from the top that will actually work to rid us of foreign oil. The Agassi plan is one possible path to achieve freedom from foreign oil but it would never work here in the US but I hope it succeeds in Israel.
October 8th, 2008 at 1:06 pm
Mike D #81
“Your plan sounds like a quick fix to TODAY’S battery tech.”
*** *** ***
How on earth could it be a quick fix? The cooperation amongst vehicle manufacturers for a single standard would take a decade. The infrastructure alone with battery changing stations would be more difficult and costly than implementing H2.
October 8th, 2008 at 2:10 pm
#83 Grizzly “The infrastructure alone with battery changing stations would be more difficult and costly than implementing H2.”
=============================================
Quite so. In fact it makes H2 seem pretty good !
October 8th, 2008 at 2:20 pm
#79 Rb
I refer you to the below link provided by Schmeltz (#75):
3- Shai provides a very detailed and comprehensive explanation of his plan here:
http://www.betterplace.com/press-room/videos-detail/a-moment-of-transformation/
I did review this presentation several months ago. I made my statements based on my memory of that presentation. Maybe we should all take the time to look at it again.
October 8th, 2008 at 2:24 pm
Since when is a niche product a bad thing? Go to business school buddy. The volt may be niche but the other cars that GM plans to build on the delta wont be trust me. Why cant people get it through their thick skulls the Volt is a Trojan horse for bigger better and cheaper EVs to come.
October 8th, 2008 at 2:34 pm
Reagan tried to get energy independence for the U.S. but he meet with the same set of congressmen and senators as have the current administration when trying to get something done about Freddie Mac and Fannie Mae. Some in congress did not want to allow drilling and exploration in American territory because of the environmental lobby. The same lobby that causes us problems today and allows bills to be passed that will allow drilling off our coast beyond the limit where everyone thinks the oil resides (in other words, past 50 miles out while most of the known coastal reserves are closer in than 50 miles).
We can point a lot of our past and present problems to members of congress, in both parties, who take bribes, payoffs, campaign cash, paid trips and more from businesses, groups and individuals. And we keep voting these same people back into office time after time.
October 8th, 2008 at 2:35 pm
Grizzly #83:
I take it as a quick fix because it seems when battery tech is good enough (5-10 years) where we have competitively priced full EV’s with a couple-hundred mile range and batteries that are warrantied at 150k miles but really last 300-500k miles (with slightly degrading range) it seems that “battery swap-out stations” would feel archaic. It would take alot of hydraulic expensive metal machines with lots of parts to throw around 400lb battery packs. It just feels archaic! Even if they DO get implemented, and in this country, it seems like there might be one station per county. Why not plug in at home?
The stations, although i can’t imagine they’d be inexpensive, would only even be USEFUL on E-REV’s sold before 2015, because after that, range and price and durability will be sufficient enough, at the consumer level, to where stopping at a station to swap out a battery doesn’t seem like it would have any market! People would just plug in at home. CHARGING stations I think will be much more common than battery swap-out, but both will be not as common as gas stations are today.
October 8th, 2008 at 2:39 pm
The Volt can be a niche product and still be successful. It all depends on the goals set by GM that must be achieved. In the auto market, unless you are selling over 50,000 units per year, it might be considered a niche product by some. I personally consider it a spear head pointed straight at OPEC’s heart. The throw will be made in November 2010 and it might take the spear several years to reach the target and sink in, but one day it will cause enough blood loss that OPEC may very well die. That’s when we can all celebrate.
October 8th, 2008 at 2:43 pm
#88 Mike D
I don’t think the battery packs he and Nissan are envisioning as replaceable packs are going to weigh anywhere near 400 pounds. Just because GM designed a 400 pound battery doesn’t mean Nissan will. Take a the link provided earlier to see what the Project is really talking about. Plus, the cars Nissan is designing for the project are made to be sold in Denmark and Israel. Much smaller, lighter weight cars with much smaller battery requirements. Take a look at the link.
October 8th, 2008 at 3:09 pm
#89 N Riley
The Volt can be a niche product and still be successful. It all depends on the goals set by GM that must be achieved. In the auto market, unless you are selling over 50,000 units per year, it might be considered a niche product by some. I personally consider it a spear head pointed straight at OPEC’s heart. The throw will be made in November 2010 and it might take the spear several years to reach the target and sink in, but one day it will cause enough blood loss that OPEC may very well die. That’s when we can all celebrate.
——————————-
I don’t know about any spears to OPEC Riley, hehe…but I agree that a product can be somewhat niche and successful at the same time.
We know for a fact Volt capacity is going to run about 60,000 units @ probably $40,000-$45,000. You have to consider the sticker price as well. One way to look at it is that an automaker would rather sell 60,000 units at 45K than 30,000 units at $12,000, another point is that a single model that sells 60,000 units per year over the 40K price tag is not niche to its specific market.
I realize that is kind of splitting hairs. I am a little ‘flip-floppy’ on the term niche. It is…and it isn’t.
October 8th, 2008 at 3:44 pm
I’m a big believer is PBP. Just consider what might happen if GM adopted PBP’s plan.
If we buy the Volt without the battery, suddenly we aren’t paying upfront for the most expensive component of the car, and GM doesn’t have to include battery replacement costs in the price of the car. Add tax credits and you could easily get the Volt below the price of Prius, maybe even get it under $20k or around the price of Honda’s new Insight.
But what about renting the battery? PBP figures the battery will cost 6 cents/mile to rent. If we drive 15k miles per year, that would cost us $75/month. Now maybe GM’s battery costs will be higher or lower, I can’t say, but I do believe that Nissan is in a better place with PBP since Nissan owns 51% of their battery manufacturer whereas GM is outsourcing the battery. Regarless, assuming 6 cents/mile is correct and add 2-3 cents/mile for electricity, the Volt is still going to be as cheap or cheaper than a Insight or Prius to drive. So if priced cheaper and cheaper to operate, who wouldn’t choose the Volt?
Or perhaps just think of it this way. If the Volt with battery costs $10k more than the volt w/o battery, with a battery lease at 6 cents/mile, it would take over 166k miles and over 11 years (assuming 15k/year miles driven) to break even. I think almost everyone would choose the lower upfront costs as 11 years is a long time away and most people won’t keep a car even half that long.
October 8th, 2008 at 4:11 pm
I don’t think attacking Shai Agassi is right.
His idea clearly won’t work here, and will most likely hurt innovation, as Grizzly stated. But it is a step in stopping OPEC. Is there really any step that is bad when stepping toward stopping OPEC?
October 8th, 2008 at 4:12 pm
Note that with Tesla’s new Sedan, they have designed the battery to be quickly swapped.
http://www.cbsnews.com/video/watch/?id=4502677n
Also, Hawaii has signed up with PBP to start building their electric car infrastructure.
I guess we’ll see how this experiment works and see whether Mr. Agassi is correct.
October 8th, 2008 at 4:32 pm
#93 Rashiid Amul
Common interest for all Americans, Europeans and others of the world should be in stopping OPEC. It is certainly in our national interest to pursue methods to reduce or eliminate our dependence on foreign oil.
Shai Agassi is correct in pursuing his goal, although I think it will not work in the U.S. Edited to add: Maybe I should say it would not work very well in the 48 states.
October 8th, 2008 at 4:39 pm
The volt is a 20,000 car that will cost 40,000. I don’t think so.
Look at the prius, 22,000, add the L5 battery back and that takes it up to 32,000 but it still uses gasoline all of the time even though it gets around 80mpg, now what would it be worth to get 40 miles with no gasoline at all which is a step above the prius with the L5. As you can see the volt is worth 40,000. It will not be bought by the masses but it’s a first of its kind type of car. Chevy might be able to build a very small car based on this technology later on. As CAFE restrictions increase and gas prices increase some people will have to switch from luxury to this type of car, others will have to buy micro-cars, bike or walk.
October 8th, 2008 at 5:36 pm
Aw gee, let’s all hand wring and catastrophize over… the size of car we “have” to buy and the money we “have” to lose and the cost of gasoline and all the stuff we “have” to give up. Because us gloomers revel in negativity. We think you all should revel in it too! So get ready all you optimists - the:
a) apocalypse
b) quickening
c) floods
d) locusts
e) green cultists
are coming!! And we really hate the USA.
October 8th, 2008 at 5:50 pm
#96 law
I understand your argument, but that isn’t quite how finances work. Correct, the L5 pack costs $10k and greatly improves the Prius but it is never going to pay itself off. Most people probably won’t do the math or may just buy it to reduce emissions, but definately the L5 pack is a niche market. As far as the Volt, if you can buy an Insight for $20k that gets 40mpg, even if the Volt costs $35k and electricity was free, you would have to drive it 150,000 miles before you would recover the $15k investment you made in the Volt.
What is great about PBP, is that they are planning to sell the car, the battery lease, and the electricity for less than what the current European pays for gasoline. Therefore they will also be able to highly tap the used car market.
With our lower gasonline taxes in the US, they can’t compete financially with the low end used car market, but they should be able to make electric cars compete favorably with new cars.
Anyway, I hope to see both succeed. I have nothing but praise for GM’s achievements with the Volt and I hope that it pays off, but the numbers are definately in PBP favor.
October 8th, 2008 at 6:28 pm
The replaceable battery is a ridiculous idea at > 400 lbs.
The only thing that may make any sense is to sell you the car and lease the battery. Or lease the complete package.
Most people could afford the car without the battery, (this cost would be 34k - 10k battery or 24K. So sell them the car and lease the battery at some price per mile.
This would be similar to paying for the gas used, so it would not be much different to these people.
For the people who can afford the extra cost of the battery, sell them the package.
This is similar to the what people do today, when they decide to buy or lease.
If they can afford the car and pay over 2-5 years, they get the benefit of NO car payment for the next 5-10 years.
If they cannot, they get a slightly reduced payment, forever.
October 8th, 2008 at 6:33 pm
I don’t think Agassi’s plan is going to work anywhere. Swapping batteries so that people can drive without stopping will require that many more batteries than cars are built (each car has one battery in it at any time and there has to be enough extra batteries in stations). Take the total cost of owning all the electric cars add in the cost of all the batteries (more than cars) add in the cost of service to charge them and run the gas station adding in the profits that need to be made by Agassi’s company and you got a very inefficient thing which will cost a lot. Next you have to consider liability for battery theft
Being that the car owners have to share the total cost of the system total cost will be double the total cost to own a volt. This guy’s only chance is if some far left government wastes tax money on it. Reminds me of the movie “august”, The clock is ticking Agassi, to bankruptcy.
October 8th, 2008 at 6:44 pm
Some companies can “walk-the-walk”, and others “talk-the-talk”. While I wish him luck, so far all that Shai Agassi has produced is talk.
Even it’s biggest detractors know that GM knows a thing or two about making cars in large volumes. They know that the parts list for the Volt is essentially a standard gasoline car, minus one transmission and plus a motor, a generator, and a $10,000+ battery. The battery is the real reason that the Volt goes from a $20,000 Chevy Cruze to a $34,000 Chevy Volt, and that $10,000 of battery only takes the car about 40 miles on a charge.
Shai Agassi is proposing to replace the Volt battery with something much larger to provide a 100+ mile range. That’s a much more expensive and large battery. Also, the battery has to be field replacable using robots or unskilled labor in gas stations, and still stay within the chassis confines in a serious accident. That means more complex mechanicals, and not even GM and Tesla have pulled that off yet. Finally, his business model says that he’ll cover the cost of one more costly battery, plus more batteries for the charging stations, plus the capital cost of the stations themselves. Add that up, and you’re looking at least another $25,000 per car, and then only after the volumes are ramped up. Compare that to the addition of about $2,000 per car for the gasoline engine and generator, and the numbers just work out much better for the Volt.
If Shai Agassi has some financial miracle to make this work, good for him. To me, the numbers just don’t work in his favor - even if you play the overused but never financially viable “battery leasing” card. However, I wish him luck - as long as he’s investing someone else’s money and not mine. For me, I’ll save my money and buy a Volt.
October 8th, 2008 at 7:00 pm
#98 blake, I didn’t see your post. I don’t agree that this system is going to be cheap. Look at my reasons above.
It reminds me of the health care system. Do you know that doctors get only about 5% of what you pay in total (including insurance, fees, copay etc). The reason is that the medical field is maintaining a lot of people who have nothing to do with health care: insurance employees, insurance company CEOs, pharm companies etc.
Let’s examine agassi’s plan in the free market:
This idea adds another company full of employees that has to be maintained by the money of the users of the system. This might not sound significant but it is, it will cost each user of this system a lot of money to maintain agassi in his big house, his company jet, and all those employees. Next you have to pay for people to switch those heavy batteries, all of those pay checks will be payed by the users of the system. The electricity will also cost more because the swapping stations need their profit. For each car sold purhaps 2 or more batteries will have to be maintained in the system and vehicle and batteries are expensive.
Now let’s check out how it will do in a socialist environment:
Maybe the government of denmark will pay for this inefficient system, they’ll lose tax base because they won’t be parasiting a free market anymore (new cars with huge taxes) but will be paying for an inefficient system. Imagine going from gaining 30,000 dollars per new car purchase to losing 20,000 per new car purchase over the lifetime of the car (this is if they pay part of the cost rather than tax it). Next the tax revenue from the gasoline is cut and they have to pay money to reduce the cost of electricity. A very stupid move by the government.
I was interested in the idea before but as soon as agassi made this ignorant statement: “the Volt is a $20,000 car that will cost $40,000. It will be a niche product.” I decided to think twice about it and I realized that he will go bankrupt unless the government of some socialist country is idiotic enough to buy his idea.
October 8th, 2008 at 7:47 pm
N. Riley #
“I don’t think the battery packs he and Nissan are envisioning as replaceable packs are going to weigh anywhere near 400 pounds. Just because GM designed a 400 pound battery doesn’t mean Nissan will.”
*** *** ***
The bigger issue is getting GM, Ford, Toyota, Nissan etc to agree that Shai Agassi will control the future of battery technology and set the specs that will affect their design efforts, competitiveness and technology advancement. One of Wagoner’s doctrines when he assumed the helm at GM was to be the technological leader. PBP is never going to happen in the US, and if the flexstreme and others proliferate in Europe it’s the end of Agassi’s dream.
October 8th, 2008 at 7:53 pm
Rashiid Amul #93
“But it is a step in stopping OPEC. Is there really any step that is bad when stepping toward stopping OPEC?”
*** *** ***
Rashiid, WRT Israel you are correct, and PBP may work there for many reasons it won’t in the US or even other parts of Europe. One thing he is trying to do is proliferate PBP and that’s why he’s under fire for his comments about the Volt. One thing that ’s for certain is that smashing the ICE paradigm will for the first time make automobiles like consumer electronics in one respect. The price will come down as the technology matures until RE EVs or EVs become the standard and equilibrium is reached. Then it’s business as usual.
October 8th, 2008 at 8:57 pm
Actually a Volt battery is not now a $10,000.00 item. At most in even early low volume Li-Io batteries from either of the two Volt vendors will run $500/kWh. That means right now it’s an $8k battery. However in the last six months there have been at least five major car maker announcements of new EV/PHEVs on the way. A123 claims to be negotiating today with as many as 80 different buyers - the same is assuredly happening with Conti. Even at these early economies of scale the cost per kWh is plummeting. If the market cost prior to November 2010 gets down to $250/kWh - the Volt now has a $4k battery. Much different than a $10,000.00 item.
I would look for the Volt after-credit target to be under $30k. As far as cost of materials go - it is realistically achievable.
October 8th, 2008 at 10:31 pm
#105 dollar4real
Actually a Volt battery is not now a $10,000.00 item. At most in even early low volume Li-Io batteries from either of the two Volt vendors will run $500/kWh. That means right now it’s an $8k battery. However in the last six months there have been at least five major car maker announcements of new EV/PHEVs on the way. A123 claims to be negotiating today with as many as 80 different buyers - the same is assuredly happening with Conti. Even at these early economies of scale the cost per kWh is plummeting. If the market cost prior to November 2010 gets down to $250/kWh - the Volt now has a $4k battery. Much different than a $10,000.00 item.
I would look for the Volt after-credit target to be under $30k. As far as cost of materials go - it is realistically achievable.
———————————————
That is alot of interesting information, and I’m not saying it is not accurate, but could you source out the following:
$500/kWh? At what quantity? Is that including pack hardware, a bottom line cost? How do you see it getting down to $250/kWh thru economics of scale by November of 2010? I don’t see economics of scale here. I see everyone wanting the same thing now and not enough to go around, if anything it is getting pricer short term.
I don’t know of any signed contract to begin any quantity of production pre-2010 that would reasonably allow for ‘production related economic savings’ …other than Mitsu/GS Yuasa (which they partially own…so that is like giving a contract to yourself).
I mean the replacement pack for the standard Prius just went down to $2,588…I can assume at least half is markup, but I don’t see costing even for them at this point churning out 500,000 copies a year at $325 (pack size is 1.3kW)
http://www.autobloggreen.com/2008/09/24/buying-prius-replacement-batteries-just-got-cheaper/
Additionally, I don’t see anyway the Volt is under 30K, especially considering GM is saying they are costing out 2 packs in the price structure. Even assuming your cost of 4K a battery, thats 8K. It’s a small cap run vehicle at 60K units a year, which puts costing really high and all the extra engineering and costing on the electric drive, regen breaking, transmission (now with secret sauce), etc.
Just my opinion, but if you have some hard links for Conti/A123 on pricing per kWh, signed contracts/production or future estimates from the on kWh costing in 2010 or later, I’m will to acquiesce my position.
October 8th, 2008 at 10:37 pm
#104 dollars4real
I think you’re a aiming a little low at $500/KWH. A few months ago, A123 Systems offered their batteries, in large quantities, at between $600 and $700/KWH. That was a price lower than the price they were getting from Black and Decker for the power tool batteries.
But, even at $500/KWH, that’s just the cost of the raw batteries. The battery packs still have to be built and assembled - a process that Tesla Motors says adds 50% to the cost of the raw batteries. Assume that, and even at $500/KWH we’re over $10,000 for the battery pack.
Finally, I don’t see any economies of scale taking place between now and November 2010. To get to the quantities needed just by GM is going to require many new factories. Conti’s brand-new factory that they built to support the Mercedes Hybrids could only support about 2,000 Volts/year, and GM is looking at 60,000-100,000/year. This is going to require a lot of new factories, with a lot of new capital costs, which have to be paid off quickly because this is a rapidly changing field and a battery company could get stuck with sunk costs.
About 5 years ago, solar energy got popular and the cost of solar cells went up, not down. Watch for the same with batteries. With dozens of electric cars on the drawing board, any decent battery company will sell every battery that they make for anything they want to charge. Even if the cost of materials goes down, we’re not going to see battery costs going down until either a breakthrough or supply catches up with demand in 5-10 years.
Until then, we’ll be paying $34,000 or more for a Volt.
October 8th, 2008 at 11:30 pm
Okay, congress just passed a $7500 per volt tax credit which will bring the cost of the car down to just $32,500. The average cost of a new car as of February 2008 was $28,715. This means that a Volt cost $3,785. Lets assume $4 gas and an average of 25mpg, which is a probably a little high. This means to go 100 miles on gasoline will cost $16. To go 15,000 miles will wind up costing $1,600 in petrol costs, not including oil changes and maintenance which will theoretically be lower in the Volt. Now lets look at the