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Federal

Jan 12, 2012

Kohler: this is Carr's chance to rev the EV engine

You would think, reading the claptrap about why the federal government is giving $34 million to Ford, that there was no such thing as an electric car.

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You would think, reading the claptrap about why the federal government is giving $34 million to Ford, that there was no such thing as an electric car and that the world was not rushing towards switching from petrol to electricity for transportation.

But it’s not too late: any handout to General Motors must be tied to a commitment to build an EV in Australia. The government has already helped fund a proof-of-concept electric Commodore that has now been built by Australia’s parts manufacturers; it needs to follow up by making any further cash payments to GM conditional on it actually being produced here.

If car industry handouts are not tied to making EVs in Australia, the government will be making a huge bet on the future of Australian manufacturing, and possibly consigning the Australian car industry to the scrap heap.

The problem, of course, is that Australia is in bed with Detroit, which remains part of the global oil supply chain and profoundly conflicted about moving to EVs.

The Australian Minister for Manufacturing, Kim Carr, was at the Detroit Motor Show this week to announce that his government is giving $34 million to Ford, and presumably he’s over at GM now trying to get them down from the $200 million that they have started their public bargaining with.

The two American car companies have long had a nice racket going in Australia, where every few years they solemnly threaten to close down production of cars here and whichever government is in power, federal and state, in a panic, quickly hands over envelopes of cash, no interest, no repayment, no conditions – beyond continuing to build cars that fewer and fewer people want to buy.

The joint press release from the prime minister and Kim Carr about the Ford handout said: “With a rising dollar and fierce competition from other countries in our region, we need to be investing in manufacturing products that are innovative and competitive.”

First, it’s not an investment but a handout, a ransom, and second, internal combustion engines and cars that contain them are neither innovative nor competitive, even if they are more fuel efficient.

Ford is not working on an EV. Meanwhile GM’s fully electric vehicle, the Volt, was named the 2011 car of the year. It hoped to sell 10,000 Volts last year but its Chevrolet dealers only managed to sell 7,671, so the tone of discussion around the subject at the Detroit Motor Show this week has been: “see, we told you these things wouldn’t sell”.

Considering there isn’t yet a network in place to charge them, I would have thought selling even that many was pretty interesting.

But no one has any idea whether EVs will replace petrol-driven cars, and if so how quickly; any prediction can look both ludicrous and credible at the same time. One thing is for sure though: any car manufacturing industry that bets entirely on petrol is taking a big risk.

The price of batteries is falling rapidly and the decline in price will accelerate once production starts ramping up. Better Place will start rolling out charging stations and monthly subscriptions plans for electricity later this year, and several EV models are already on the market here with more to come this year and next.

EVs are clearly better than petrol-driven cars. They are quieter, faster and cheaper to run; if they don’t eventually entirely replace internal combustion cars, I’m an oil well.

At a factory in Port Melbourne, just up the road from General Motors Holden, a group of parts makers led by Better Place and Futuris have built a Holden Commodore EV at their own expense – with some money from the government – to prove to GMH and the government that it can be done cost-effectively, and they are now driving it around. They have also built a Ford Territory EV.

By all accounts the Australian engineers at GM are interested, but the word from headquarters is that if EVs are going to be built, it’ll be in Detroit, thanks very much. Kim Carr has a chance now to refocus their minds.

** This article first appeared on Business Spectator.  

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40 comments

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40 thoughts on “Kohler: this is Carr’s chance to rev the EV engine

  1. Suzanne Blake

    Electric Cars, with the way electricity prices are, and going up. You would have to charge it 10pm – 7am

  2. LacqueredStudio

    How the hell would you know, Suzanne? Did one of your mates down at the club the other night pull out a spec sheet for the Commodore EV prototype?

  3. Suzanne Blake

    @ LacqueredStudio

    I can only comment on what I have read on the existing electric cars.

  4. Andybob

    Well, yes SB, that’s part of the attraction. Batteriedo an be charged at any time.It may be one way of actually using intermittent generation by wind farms reasonably efficiently, without requiring back up from gas turbines. When the wind is blowing but demand is low, take the wind farm off the grid and divert the output to charging EV car batteries at a convenient short transmission location. Use a battery design that can handle the varying output of the wind farm (varies with the cube of wind speed). Distribute charged batteries to “refueling stations” where consumers can replace depleted batteries with fullly charged batteries.

  5. Suzanne Blake

    @ Andybob

    The problem is the cost of transporting the batteries, fitting them (safety). Outweights the ‘savings’.

    Wind wont work, too much adversery and lack of predictability.

    Thats the trouble with these green schemes, not properly thought through, eg NSW Solar debacle.

  6. LacqueredStudio

    Suzanne:

    Again, where’s your evidence that transportation and safety costs related to electric cars outweigh the savings? I put it to you that you’re talking out of your arse, yet again.

    And if the rising cost of energy concerns you so much … where’s your critique of petrol-fueled cars over the fuel and maintenance costs they demand?

  7. Edward James

    We have contracted to sell China so much gas at a discounted rate. I wonder if Australia is really that interested in going green on a proven fuel for our transport. Most internal combustion engines will run on gas which we are almost giving away, when the selling price is compared to what we must pay at the pump here. Edward James http://bit.ly/EJ_PNewsAds

  8. Suzanne Blake

    @ LacqueredStudio

    Do you know how many batteries an Electric Car users (around 8 – 16 depending on its size). The cost of sending those around the place and changing over on a petrol station etc. Won’t work.

    if technology improves and its less batteries, they will be heavier and even harder to change quickly.

    I think more fuel efficient diesel cars will beat EV for another decade at current price rates in any case.

  9. Jimmy

    I am far from an expert on EV cars but surely charging them from 10pm to 7am would be common practice as that is when the car would be garaged at you home.

    And as for the rising cost of eletricity, from memory the prediction is about 7-10% this year while petrol prices went up about 15% this week?

    LaqueredStudio – Don’t bother trying to get SB to provide evidence she is allergic to it, even when confronted with irrefutable proof what she is saying is wrong she still backs her opinion.

  10. SBH

    “I can only comment on what I have read on the existing electric cars.’

    Don’t talk nonsense Blake, we all know you can’t read.

  11. Suzanne Blake

    @ SBH

    I read and listen widely, no blinkers here SBH

  12. Suzanne Blake

    @ LacqueredStudio

    Ask Jimmy whatever you like, he is good at looking it up in the Hawker Britton / ALP spin database (oh, no he says he is an ex accountant).

    Jimmy, my boy, electric cars need 10 – 12 hours to charge if low as well.

  13. ggm

    At least one proposal has been made to use EV car batteries as surplus powerstore for load balancing the generation cycle. So it plays both ways. If we had decent/cheap/safe fuel cells etc for home, this might work too. Lotsa solar making gen which has to feed somewhere. Why not dump it into cars?

    The complete absence of investment in charging stations in CBD goes some way to answering the question “do any of the city councils who invest in public transport believe widely available public EV is on the horizon” (if I’m wrong and one of the Australian cities *is* building out the charge stands, I’d love to know.

    Again only anecdotal, but in Europe sub-compact EV have exemptions from the normal DOT safety/ENCAP type limits which makes everyone tool up to giant lead sleds with airbags. 2 seater tuptup runarounds etc. I was told that at least one EV was denied licencing for wide use in Austraya because it failed ENCAP..

  14. Jimmy

    SB – Fisrtly I am an accountant, not an ex accountant. Second I have no affiliation with the ALP as I have repeatedly said. Third my source of the facts that constantly refute your ill informed ramblings is Google (maybe you should try it sometime) and finally 10 -12 hours to charge well gee whiz only 9 of those hours (or 75%-90%) of the time required for a low battery could fit in to the time frame you outlined whatever will we do? And given you obvious expertise perhaps you could advise as to how far you can travel on a full battery and if the average urbanite would use a full battery within a day (ie driving to and from work or train station)

  15. Jimmy

    GGM – Am I just dreaming this or did Melb city council propose installing some charging staion 6 months or so ago?

  16. Suzanne Blake

    @ Jimmy

    A fully charged EV will get you 400km. It depends on the gradient, traffic, if air con is on etc. Maybe much less in heavy traffic.

    Longer in the remote areas.

  17. Jimmy

    SB – So given the majority of people are at home every night and the majority of people would not travel even 200km in a day let alone 400km why would there be a problem with plugging the car in when you go to bed and unplugging it when you get up and have a fully charged car using only off peak power?

  18. Suzanne Blake

    @ Jimmy

    “given the majority of people are at home every night and the majority of people would not travel even 200km in a day let alone 400km why would there be a problem with plugging the car in when you go to bed and unplugging it when you get up and have a fully charged car using only off peak power?”

    1. We dont have the baseload available now overnight to support this drain.
    We could produce it, more emissions, more carbon tax, more increased price

    2. The offpeak rate is around 11c – 13c KwH. So an empty EV on average will draw around $ 247 a month. I know it will not be empty every day, but you need to keep batteries charged or they will deteriorate.

    3. The cost to replace batteries is around $6,000 and coming down.

    The economics and dependability is questionable.

  19. Jimmy

    “I know it will not be empty every day, but you need to keep batteries charged or they will deteriorate.” but you can keep it topped up for much less than $247 a month, most people would only travel 400k in a week which would bring the monthly cost down to less than $100 which is less than my fuel bill now.

    I’ll leave it to someone who has more knowledge on the subject to debate you first point,

    “The cost to replace batteries is around $6,000 and coming down.” how often do you need to replace the batteries?

    I don’t see any issue with dependability if you live in a major city and don’t intend to do much travelling outside of that, although that should improve in the future to, as for the economics they don’t look too bad either but I’ll wait for further info before going to far.

  20. Suzanne Blake

    @ Jimmy

    Batteries need replacing every 5 years, or shorter if not cared or high usage.

    This is why the re-sale value of Toyota Prius is shocking

  21. Jimmy

    SB – So assuming, as with all technologies, battery costs come down as you suggest and their life and range increases we could rapidly see the battery cost dropping from it’s current $100 per month to say $50 very quickly and this would prove Alan’s point, the technology is going to improve, what may be marginal now will only become more and more mainstream and if Australia doesn’t get it’s foot in the door now we will be left behind and no amount of govt subsidies will keep the secotr going.

  22. Suzanne Blake

    @ Jimmy

    I doubt batteries will improve that much. Look at truck / marine batteries, price is the same as 10 years ago.

    I think as you say EV is just for inner city dwellers, who do <100km a week.

  23. Jimmy

    SB – “3. The cost to replace batteries is around $6,000 and coming down.” “I doubt batteries will improve that much. Look at truck / marine batteries, price is the same as 10 years ago.”

    I suppose that is what I get for relying on your information!

  24. drsmithy

    A fully charged EV will get you 400km. It depends on the gradient, traffic, if air con is on etc. Maybe much less in heavy traffic.

    The average Australian car drives less than 300km per week. 400km is plenty.

    I think as you say EV is just for inner city dwellers, who do <100km a week.

    So a good fit for the ~80% of the population that live in urban areas, then ?

  25. Suzanne Blake

    @ Jimmy

    Your information is incorrect or misleading.

    The cheap Chinese batteries are getting cheaper, but they contain less lead and wear out in a couple of years or less (so your costs are higher!!).

    You need Australian or US made batteries and compare them.

  26. Jimmy

    SB – It was you who said “The cost to replace batteries is around $6,000 and coming down” so are you admitting to using “incorrect or misleading” information?

    As I said “I suppose that is what I get for relying on your information!”

    I would be interested in your response to Dr Smithy’s post though.

  27. Jimmy

    SB – It was you who said “The cost to replace batteries is around $6,000 and coming down” so are you admitting to using “incorrect or misleading” information?

    As I said “I suppose that is what I get for using on your information!”

    I would be interested in your response to Dr Smithy’s post though.

  28. Suzanne Blake

    @ Jimmy

    The battery price is coming down, but not quickly. The prices are dropping with the cheap Chinese ones, but as I said they dont have enough lead and dont last long.

    On Dr Smithy, some cities have hilly areas and traffic, so they wont last 2 days, perhaps 3.

  29. Jimmy

    SB – So if the battery price was to come down to say $5k rather than $6k and the life extended from 5 year to 6 the price per month goes from $100 to $70. That may not happen tomorrow but it isn’t beyond the realms of possibility.

    Also assuming you original monthly estimate of $247 was based on recharging from empty every night even in hilly and heavy traffic areas of the major cities the monthly cost could be somewhere between $80 and $120.

    The economics seems to add up bnased on your figures.

  30. Suzanne Blake

    Perhaps, depends on how fast electricity prices rise, they are rising faster than diesel prices!!

  31. Jimmy

    SB – “they are rising faster than diesel prices” Figures on that please SB (say increases over the past 10 years) and maybe you could throw in ULP as most cars run on that, maybe

  32. Suzanne Blake

    Diesel is more economical. Diesel has risen less than electricity in last ten years.

  33. drsmithy

    On Dr Smithy, some cities have hilly areas and traffic, so they wont last 2 days, perhaps 3.

    Hills can have an effect, but electric cars lose little efficiency due to heavy traffic, unlike petrol (or diesel) vehicles. So based on your figures, this assertion is bunk. On the other hand, the 400km range you’re bandying about above seems ridiculously optimistic for an all-electric car.

    Let’s run some numbers with the newest hotness, Nissan’s all-electric Leaf – which is a reasonable drop-in replacement for the most popular kind of vehicle sold today: a Mazda 3 (or similar).

    The Leaf has a tested range of about 170km. Being conservative, the average car owner would need to do a full charge about twice a week, but let’s be really pessismistic and assume three times a week. At $0.13/kWh, the Leaf’s 24kWh battery will cost $3.12 per full change. Rounding up a bit, that’s a weekly charge bill of $10. Nissan claims the Leaf’s battery will last 10 years – which is, coincidentally, the average age of the typical Australian vehicle.

    On the other hand, you’re only spending $520 a year to drive it around, you’re going to save some money on fuel…

    Taking the 15,000km per year the average Australian vehicle drives, at a nominal 8.2L/100km and a fuel price of $1.60/L, we get an annual fuel cost of $1968. So a Leaf is going to save about $1400/yr in “energy” costs.

    Clearly the _running cost_ economics are strongly in the Leaf’s favour. However, a bigger challenge at the moment is the acquisition cost – a Leaf will set you back about fifty grand, which is a lot for a small hatchback that’s not especially luxurious.

    Unfortunately, the $1400/yr you save in fuel will take about 17 years to make up the ~$25,000 price difference between a Leaf and a Mazda3.

    However, if you plug in some other assumptions, say:
    * Electricity at $0.30/kWh
    * Fuel at $3/L

    Then the Leaf will cost ~$1100/yr in Electricity, but the Mazda3 will cost ~$3700 in fuel. So now the savings are ~$2600/yr and the break-even point is just under 10 years.

    Knock the Leaf’s price down to $35,000 (what it costs in America) and your break-even point with today’s fuel and electricity prices is only seven years. With the hypothetical electricity and petrol prices above it’s half that.

    So the conclusion here is that EV cars are still not worth it today, but it probably won’t be long until they are.

  34. Suzanne Blake

    Dr Smith

    EV’s don’t stack up then as you say. Cause you need to change batteries in 5 years, resale value is hopeless. More than double the price of a non EV car.

    Electricity prices will be more than 30c a Kwh in 10 years.

    They will get there, but not for a decade or more

  35. Jimmy

    SB – Diesel may be more economcial but that isn’t what the majority of cars in Australia run on so why compare electricity to diesel other than to artificially bolster your argument?

    And sorry but with your track record for accuracy I will need more than your word on the figures.

  36. Suzanne Blake

    @ Jimmy

    “Diesel may be more economcial but that isn’t what the majority of cars in Australia run on so why compare electricity to diesel other than to artificially bolster your argument?”

    Cause if you are concerned about costs, environment etc you will be COMPARING diesel v EV when buying a car.

  37. Jimmy

    DR SMithy – Thanks for the figures, deifinitely provides some clarity.

    Whe we get back to Kohlers original point of Australian trying to invest in EV vehicles now you figures definitely back that up, get in now as over time (even if it is a decade SB) and the acquisition costs become more competitive, battery life, capacity and cost improve and Petrol prices increase EV’s will become the norm and we would be in the driving seat (pardon the pun)

  38. Jimmy

    SB – So if we were to use the example from the article I should be comparing a diesel commodore to the EV commodore that has been designed?

  39. drsmithy

    DR SMithy – Thanks for the figures, deifinitely provides some clarity.

    With all that being said, I think EVs have a fairly dim future in Australia – at least in the short to medium term – for much the same reason they do in America: the limited range is _perceived_ as a showstopper issue.

    People generally don’t make rational decisions when it comes to things like cars. Just the sheer number of people who own them, when they’d almost certainly be better off fiscally using a combination of public transport, taxis and rental cars, is testament to that (if you live within 20-30km of a capital city’s CBD, you probably fit into this category).

    Hence the range problem. Not because Joe or Jane Average is like to drive more than 170km in one go very often, but because they like to _believe_ they’ll be spending every other weekend up/down at the $COAST (or somewhere else out of the city) and need to be able to drive there.

    For that reason, I think EVs as anything more than a niche vehicle in Australia is several decades away. It’s going to be small, forced-induction petrol and diesel engines in the short term (10-15 years) then Prius-like hybrids (which will end up running most of the time on batteries anyway) for the 10-15 years after that. EVs won’t be commonplace here until they’re a) as cheap as normal cars and b) have ranges up around the 500-600km mark with a full recharge time of <15 minutes. By then I expect whatever is powering them to not really resemble anything I would recognise today as a "battery".

    There's also the non-trivial issue of generating enough electricity (not to mention sufficient transmission infrastructure) to power all these EVs, given the apparent rejection of nuclear power (the only practical short-to-medium term option) by pretty much every politician in the country.

    Europe is a different matter, of course, with vastly superior mass transit options, well-established short-term (by the hour) car rental agencies and – thanks to the French embracing nuclear – ample electricity. The idea of catching a train from, say, Zurich to Geneva then walking out of the station and swiping a Mobility card in a car and driving away for a day’s touristing is already established. We _could_ have the same thing in Australia, of course, but the only political parties with that sort of long-range vision are the Greens and the late, lamented (at least by me), Democrats, neither of whom are likely to be wielding sufficient power in any timeframe soon enough for it to matter.

  40. Suzanne Blake

    @ Jimmy

    Did you see the Report on ABC last night of the eco house and family with eco car.

    The mother said she needed towing a few times as it ran out of power.

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