One Million Plug-In Hybrids by 2015? Maybe. Profitable? Probably NotBy Michelle Krebs April 22, 2009
By Bill Visnic
DETROIT -- Most members of a panel of electric vehicle and battery experts at the Society of Automotive Engineers World Congress here say President Obama's goal of having 1 million plug-in hybrid-electric vehicles on the road by 2015 is possible -- but will be difficult.
But when asked if automakers or battery suppliers will be able to make a profit on the coming generation of electrified vehicles -- hybrids, plug-in hybrids and extended-range electric vehicles such as General Motors Corp.'s Chevrolet Volt and others -- that need advanced (but more expensive) lithium-ion batteries, the chances are even slimmer.
Minoru Shinohara, senior vice president of Nissan Motor Co. Ltd., unsuccessfully evaded a direct answer about profitability, but expressed a hope that making money on early electrified vehicles might be possible.
And Prabhakar Patil, chief executive officer for battery supplier Compact Power Inc. (the U.S. company for Korea's LG Chem that won the lithium-ion battery contract for the Volt), demurred by saying he has corporate metrics he must meet.
None of the panelists would directly say the first electrified models or battery contracts will be profitable, but they did mostly agree the president's mandate for 1 million plug-in hybrids by 2015 could happen.
"It takes consumer demand," said Michael Crane, supplier Continental Corp.'s managing director, hybrid-electric vehicles North America. "There has to be a 'pull' in the marketplace," he said.
The pull may have to come from a variety of angles, Crane added. He said getting 1 million PHEVs on the road in just five years may take a combination of regulatory dictates, incentives to consumers -- and gasoline that's much more expensive than the $2 per gallon prevailing price.
And Steven L. Clark, senior manager -- E/E core energy management at Chrysler LLC, said fulfilling the 1 million PHEV objective will require incentives on both the demand and supply side.
Suppliers will need incentives such as the millions in tax breaks the state of Michigan is offering to battery developers and manufacturers because the still-forming market for advanced electrified vehicles "can't drive the level of investment needed" to produce 1 million PHEVs by 2015, Continental's Crane said.
And the panel agreed it will be several years before consumers reach a point where they can consider a PHEV or range-extended electric vehicle as offering the same all-around utility as a conventional vehicle. Clark said it currently is a challenge to view plug-in hybrids or extended-range hybrids as not presenting some type of compromise in comparison to conventionally powered vehicles that can be refueled at will and thus have virtually unlimited range.
Photo by GM
The Chevrolet Volt, shown in the lab undergoing tests, requires an expensive advanced battery.