Tag Electric Vehicles

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The Possible Achilles’ Heel of EVs and Energy Storage

Michael S. Davies, CFA, CMVP 0 Comment
  • Battery technology is progressing slowly and advances in lithium-metal are not yet commercially available
  • Federal EV battery incentives pertain to countries with US free trade agreements: Australia, Canada, and Chile
  • Battery supply is constrained by metal mining and production is limited by complex and costly process technologies
  • More research and product production methods are imminently needed

Battery production for electric vehicles should be a concern. For one, the US has neither the resources nor the production capacity to meet the demand of EV manufacturers. Second, as a national security concern, not having the requisite production infrastructure to support energy transformation leaves the US vulnerable to economic decline and energy price increases. Third, to navigate energy transformation it’s imperative to establish battery production for grid stability and resiliency, particularly when introducing renewable energies.

Currently, lithium-ion batteries are the core foundation for EVs and most vehicle manufacturers are planning to transition to all elective vehicles in the near future. California might ban the sale of new cars running only on gasoline by 2035. The issue is the production of EVs is inextricably linked to the availability of batteries that are limited by supply constraints in both battery metals and production capacity. Our focus is on battery supply chains and production.

Battery Supply Chains

The big issue around EV batteries is assuring an adequate supply of materials at a reasonable price.  To better understand the EV supply chain let’s look at the common raw materials namely metals and their associated costs. The four primary metals in a lithium-ion battery commonly used in most EVs are lithium, nickel, cobalt, and manganese. EV batteries use nickel-manganese-cobalt cathodes, with 60% nickel and 20% of cobalt and manganese.

The Possible Achilles’ Heel of EVs and Energy Storage – MarketScale

Alternative Energy Analytics Battery Power Energy Costs Energy Economics Energy Efficiency EVs Solar Energy

Energy Transformation Why EVs will Impact the Utility Grid

Michael S. Davies, CFA, CMVP 0 Comment

Energy Transformation: Why EVs will Impact the Utility Grid – MarketScale

With the bipartisan National Electric Vehicle Infrastructure (NEVI) funding fast approaching, what are the implications on energy demand and the utility grid and why is EV charging compounding the complexities of grid transmission and distribution?

Currently EVs account for about 1% of the global vehicle market and according to EV Adoption, there are approximately 2 million EV on the road in the US. According to the Department of Transportation’s Federal Highway Administration, the average vehicle travels approximately 13,500 miles annually and EV efficiency is roughly 3.5 miles per kWh suggesting annual energy consumption of 3,870 kWh. According to the DOE Energy Information Administration, the average US home consumes roughly 10,900 kWh a year. Therefore, an EV would potentially account for the 35% of the average US home’s electric usage.  Most homes can be equipped with a Level 2 EV chargers (240 volts / 50 amps) mitigating any grid impact

EV Charging Grid Impact

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Alternative Energy Analytics Automobile Fuel Efficiency Battery Power Disruptive Innovation Energy Costs Energy Economics Energy Efficiency Energy Storage EVs

Are Electric Vehicles Worth the Investment?

Michael S. Davies, CFA, CMVP 0 Comment

MarketScale podcast

https://marketscale.com/industries/transportation/are-electric-vehicles-worth-the-investment/

EV Economics

So, what does this EV energy transformation mean to consumers?  Let’s look at a few key factors in evaluating EVs:  economics, driving range, charging time and charging network. For one, it is the understanding of EV economics such as the difference between MPG to miles per kilowatt hour (kWh). Essentially, how far can you drive with a gallon of gas to kWh of energy. According the EPA, the average vehicle fuel efficiency in 2020 was 25.7 MPG. The U.S. Department of Transportation’s Federal Highway Administration states the average person drives around 13,500 milesevery year suggesting an annual fuel cost of over $2,300 at $4.50 per gallon.

The average EV range is approximately 3.5 miles per kWh. One way to assess the economics between MPG and kWh efficiency is to compare the driving costs of traveling 100 miles. With the average fuel cost of $4.50 in the US and 25.7 MPG equates to $17.50.  With an EV achieving 3.5 miles per kWh, the 100-mile traveling cost will depend on whether the EV was charged at home or on a charging network station. According to the Energy Information Administration, the average at home cost is roughly $0.14 per kWh. So, the 100-mile EV travel cost equates to $3.91.

However, if the EV requires charging on a public charging network, the cost is significantly higher. The average kWh cost on public charging networks is approximately $0.42 per kWh ranging from $0.25 from Tesla to $0.33-to-$0.60 on other charging networks. At $0.42 per kWh, the 100-miles travel would cost $12.00 in an EV which is still a 30% savings over conventional vehicles.

Figure 1: 100-Mile Driving Costs

Source: EPA, EIA, Green Econometrics

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Infrastructure Investment: Electric Vehicles and Smart Grid

Michael S. Davies, CFA, CMVP 1 Comment

After several months in Silicon Valley three factors resonate clearly in the process of innovation: access to data, applied analytics, and time to insight. Innovative ideas and technology can just as easily be spawned in New Jersey or Milan as in Silicon Valley. Our focus is why investment into infrastructure that facilitates access to energy or commerce, is the critical factor in game changing events.

Investment onto infrastructure to support access to energy enabled New York City to gain prominence over Philadelphia and Boston as the largest economic center in the US. Access to energy can be traced back to 1829 when the first American steam locomotive in Honesdale, PA initiating the American Railroad to transport Anthracite coal mined in nearby Carbondale to a canal network ultimately linking to the Hudson River and New York City. See post Coal: Fueling the American Industrial Revolution to Today’s Electric

As a corollary, in demonstrating the importance of investing into infrastructure to support economic growth, this is the tale of two Southern cities. In the 1950’s, Memphis, TN and Atlanta, GA were roughly the same size. While Memphis enjoyed economic growth from its port on the Mississippi River, Atlanta was land locked. Atlanta strategically invested by focusing on the future of jet aircraft building the infrastructure for the largest airport in the US in 1961. Within 10 years Atlanta had double the population and economic growth of Memphis. Today Atlanta has an economy five times that of Memphis because of innovative thinking and investment into infrastructure of the future.

Figure 1 Infrastructure: Tale of Two Cities Infrastructure
Source: Social Science Data Analysis Network

Electric vehicles (EV) and energy storage are perhaps the most important energy strategy second to renewable energy such as solar photovoltaic. The reason EV is so important to a national energy strategy is the fact that oil used for transportation accounts for more than twice the energy required to supply the entire electric needs of the US market. See the Green Econometrics post Energy Perspective The issue is formulating an effective energy strategy that embraces renewable energy and smart grid technologies.

Figure 2 US Electric VehiclesElectric Vehicles
Source: Ward Automotive, Pike Research, Green Econometrics

Just how critical is infrastructure to supporting electric vehicles?

According to information from Tesla Motors’ registration filings with the SEC in June 2010, the charge time on the Tesla Roadster using a 240 volt, 40 amp outlet to full capacity takes approximately 7 hours. Assuming most drivers are in their vehicles for work five days a week and one day on the weekend, the electric energy consumption to charge the electric vehicle amounts to approximately 67 KWH a day and for a six-day per week charging, 20,966 KWH per EV per year.

According to the DOE Energy Information Administration, the average residential home consumes about 11,000 KWH a year. So the electric vehicle is roughly double is energy use of a typical home. Given capacity constraints in electric generation, tripling the electric energy use per house would more exacerbate our already tenuous energy situation,

Figure 3 Smart Grid is Critical for US Electric VehiclesSmart grid
Source: EIA, Green Econometrics

To sustain economic growth and avoid dependence on foreign oil, electric vehicles provide a migration path towards energy independence. To support the adoption of electric vehicles, a tremendous investment in our electric infrastructure is required. A dramatic supply shock to oil could raise substantially the retail price of gas and thereby drive consumer towards EVs at an accelerated rate. If half the vehicles on the road were electric, our electric generating capacity would need to increase dramatically and outfitted with smart grid technologies to stabilize transmission.

The bottom line is vision and innovation require investment into infrastructure and in particular renewable energy generation like solar and wind and the grid to support intelligent transmission and distribution.