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Business Report

What If Electric Cars Were Better?

Improving the energy density of batteries is the key to mass-market electric vehicles.

Electric vehicles are still too expensive and have too many limitations to compete with regular cars, except in a few niche markets. Will that ever change? The answer has everything to do with battery technology. Batteries carrying more charge for a lower price could extend the range of electric cars from today’s 70 miles to hundreds of miles, effectively challenging the internal-combustion motor.

To get there, many experts agree, a major shift in battery technology may be needed. Electric vehicles such as the all-electric Nissan Leaf and the Chevrolet Volt, a plug-in hybrid from GM, rely on larger versions of the lithium-ion batteries that power smart phones, iPads, and ultrathin laptops. Such gadgets are possible only because lithium-ion batteries have twice the energy density of the nickel–metal hydride batteries used in the brick-size mobile phones and other bulky consumer electronics of the 1980s.

Using lithium-ion batteries, companies like Nissan, which has sold 20,000 Leafs globally (the car is priced at $33,000 in the U.S.), are predicting that they’ve already hit upon the right mix of vehicle range and sticker price to satisfy many commuters who drive limited distances.

The problem, however, is that despite several decades of optimization, lithium-ion batteries are still expensive and limited in performance, and they will probably not get much better. Assembled battery packs for a vehicle like the Volt cost roughly $10,000 and deliver about 40 miles before an internal-combustion engine kicks in to extend the charge. The battery for the Leaf costs about $15,000 (according to estimates from the Department of Energy) and delivers about 70 miles of driving, depending on various conditions. According to an analysis by the National Academy of Sciences, plug-in hybrid electric vehicles with a 40-mile electric range are “unlikely” to be cost competitive with conventional cars before 2040, assuming gasoline prices of $4 per gallon.

Estimates of the cost of assembled lithium-ion battery packs vary widely (see “Will Electric Vehicles Finally Succeed?”). The NAS report put the cost at about $625 to $850 per kilowatt-hour of energy; a Volt-like car requires a battery capacity of 16 kilowatts. But the bottom line is that batteries need to get far cheaper and provide far greater range if electric vehicles are ever to become truly popular.

Whether that’s possible with conventional lithium-ion technology is a matter of debate. Though some involved in battery manufacturing say the technology still has room for improvement, the NAS report, for one, notes that although lithium-ion batteries have been getting far cheaper over the last decade, those reductions seem to be leveling off. It concludes that even under optimistic assumptions, lithium-ion batteries are likely to cost around $360 per kilowatt-hour in 2030.

The U.S. Department of Energy, however, has far more ambitious goals for electric-vehicle batteries, aiming to bring the cost down to $125 per kilowatt-hour by 2020. For that, radical new technologies will probably be necessary. As part of its effort to encourage battery innovation, the DOE’s ARPA-E program has funded 10 projects, most of them involving startup companies, to find “game-changing technologies” that will deliver an electric car with a range of 300 to 500 miles.

The department has put $57 million toward efforts to develop a number of very different technologies, including metal-air, lithium-sulfur, and solid-state batteries. Among the funding recipients is Pellion Technologies, a Cambridge, Massachusetts-based startup working on magnesium-ion batteries that could provide twice the energy density of lithium-ion ones; another ARPA-E-funded startup, Sion Power in Tucson, Arizona, promises a lithium-sulfur battery that has an energy density three times that of conventional lithium-ion batteries and could power electric vehicles for more than 300 miles.

The ARPA-E program is meant to support high-risk projects, so it’s hard to know whether any of the new battery technologies will succeed. But if the DOE meets its ambitious goals, it will truly change the economics of electric cars. Improving the energy density of batteries has already changed how we communicate. Someday it could change how we commute.

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