This post is about some analysis and few key numbers which we need to achieve if EVs are to be sustainable in here. When we have a goal, backed up by statistics, numbers and analysis, we could think about practical ways of getting to it.
Those who missed the first post can find it in here. It would be helpful to read the numbers in that article first.
EVs in here had different and changing challenges from start in 2015 to now.
Initially it was lack of fast chargers, membership fees and the range anxiety. Then in mid 2016 it changed to minor issues of lack of faster charging speeds, apps and automation, facilities at charging stations etc. As a community, all of us managed to overcome and improve on each of those. By 2017, it was clear that the main obstacle for the progress of EVs is the government import tax, as no new vehicles were arriving in numbers.
That last problem is still very much there, however it has now overtaken by an even bigger and immediate issue of battery degradation and replacements. As things stands now, even if the government reduces the EV tax tomorrow (which will not happen), it is doubtful how many would buy one given the battery replacement problem hasn't been answered yet.
So let us start our number game with battery prices. What could be the realistic and best battery price we can hope to get? for a brand new and 30kw battery.
1) Brand new 30KW battery price
I think that fair number we should aim is around Rs 1m (or $5000). However we have work to do to achieve that, more on that later. First, let us find how this number came about.
According to current market research and predictions Li-ion battery pack prices (standard market prices, without going after particular expensive brand names) are coming down towards $150 per kwh this year. Expected to be below $100 before 2025. Assuming Rupee will be below 200 per $ when the prices hit $150, that gives us Rs 30000 per kwh and that's below Rs 900 000 per 30kw, add shipping and taxes and prices can remain around 1m.
This is justifiable in yet another angle as well. It is usually being said that the 1/3 of the electric car's cost and weight is it's battery. Most of us have bought our cars around 3m. What this also mean is that a price higher than this will not make sense to many users in here and will not help towards popularizing EVs.
Note however, this is the price for Brand New, and 30KW. This price will then set suitable market price upper limits for used batteries.
Currently, there are not many avenues for us to get our hands on a brand new battery. This is partly due to us relying on the original manufacturer and a particular brand. Above mentioned global market prices are not that valid if we limit ourselves to a specific brand name. So the scope and focus should be towards open standards and specification/technology/battery chemistry driven solutions than towards brand names which would just add to the cost and put additional restrictions on us. (having to go through the sole agent for instance)
What are those specification driven approaches, why 30KW and not 24KW etc are interesting subjects to discuss and require longer explanations, I will perhaps do that on a separate post and not in here to keep the length of this post to a sane level.
2) Number of battery assembling workshops/personal and importing/installing places
As we have shown at other places, we will have to face the challenge of replacing around 4000 LEAF batteries in around 4 years starting from this year. That is around 3 batteries every day! Battery replacing with a used one could be done quickly but it does not likely that there will be enough damaged new cars in Japan to provide us with a steady source of used (but good and new) branded batteries. There are legal limits also. While we should encourage that solution, we also need to prepare for the eventual worse case scenario. Most of us are simply not going to find a good used battery.
To replace 4000 batteries, we will have to assemble most of that number in here. Assembling modules is a time taking activity. Once again, I will not go into too much details in here but hoping to cover that in a dedicated post for batteries. For now, lets just say that we may need around 20 small workshops island wide to meet that demand.
Since this is the most critical issue gripping us all at the moment, most of other numbers in this post will actually depend on how successful we will be at making this particular number. Luckily, there is a way to achieve this! A sure fire way which will then help us achieve all other numbers as well and make the EVs stay and thrive in here for good. It is not going to be an easy one but a worthwhile one....
Anyway, that is a topic for a different lengthy post..... Now, first things first. Let's get the rest of numbers.
Any government will (after elections) have to increase the cost of electricity. I think the highest rate for domestic would be Rs 50 per unit, currently it is at 45. Mostly that would then be the cost for someone to charge their car at home. In last post we saw, EVs are going outstations less and less and the average mileage they run per day is either already very low or going down. This is no way for promoting EVs or getting the benefits of EVs. This also is very bad for fast charging infrastructure.
In order to encourage vehicles to drive more, get rid of range anxiety and also to get them to visit fast chargers often, we will eventually have to make the Charging cost at the same rate as domestic electricity cost. Rs 50/= This does not mean it will actually happen in the short term, infact, Current rates (Rs 60-100 at the moment depending on location and network) might even go up in the short term. However, 50 is the best number for users and more users mean more business for charging stations.
This is why the numbers in this list is important. All these numbers are dependent on each other. While charging rate can not come down on its own, it can come down if the other numbers align right. That would be a win-win situation for all.
4) What is the minimum number of EVs we need in here to feel safe. (critical mass)
Current number of EVs in the country is not big enough for new investors to come in or to initiate new solutions/services/experiments. However, still we are making ourselves heard, got few vital services going and putting up a fight to survive. Most these issues going to turn for better if the vehicle numbers are bit higher than they are now. 10 000 is that critical mass I think. Of course it's good if there are even more of them but 10K will start to make things happen. Fast charging for instance can get profitable if the vehicle numbers are twice as they are now.
That nice and round five digit number will also see few more organizations investing in the EV industry and eco system.
5) Electricity cost for Fast Charging
To Make Rs50 charge rate possible, just having 10K vehicles is not enough, electricity costs need to be sensible. Currently there is a legal basis to provide fast charging stations with i1 industrial tariff which is normally about Rs 13 per kWh. However, our of about 20 running stations we have only 2 have got this tariff so far. That's the gap between policy and practice in the country! This need to be improved at the decision making level.
High electricity cost is a killer for EVs and that much is well known.
EV users also have a responsibility in here, We need to contribute in generating as much electricity as we can (home solar systems) and we need to charge at off peak times.
6) How many fast charging stations we need in the island.
Earlier we said the initial number of vehicles we would like to have is 10 000, so this question get reworded as how many fast chargers do we need to serve 10 000 cars. According to stats from last post, only a fraction of vehicles are using fast chargers and only a fraction of that using charging stations regularly. Currently we have around 40 working stations island wide as a country. Some of those are struggling to survive. While we may like to have as many stations as possible, having too many stations is not optimal. It could make all to incur losses and then the familiar issues of lack of repairs, upgrades, closures etc
It's my estimate that for 10 000 total vehicles, 60 fast chargers is enough. When the vehicle count rises, then we will have a case for more.
7) What should be the ideal investment of a 30KW fast charger
In order to meet Rs50 charging rate, having 10000 vehicles and having Industrial tariff, are again not enough. Biggest issue of fast charging is the cost of the charger and Return Of Investment (ROI).
When we started we brought down 30KW fast charger cost to around 1.3m (from 2m and above). Even this cost is too much since ROI then typically is around two years in main cities but can be considerably more than that in outstations. While we encourage different business models for outstation charge centers (such as using the charger as a support service to a existing other business), charger investment cost need to come down if we are to push for Rs 50 rate and more and more EV journeys and miles.
When the technology improves prices always come down. Computers, electric vehicles, batteries for example. Similarly fast charger cost also has to come down. When it eventually comes down to Rs 1m mark, we will see many willing investors and even existing investors will go for upgrades, replacements.
In case of a imported fast charger, one has to deal with shipping and taxes as well so the price cost may have to be below $5000. For locally made chargers it will have to come to the mark of Rs 1m. This would mean more sales, more upgrades, more charging and will fit in well with the bigger picture.
8) What's ideal vehicle price
About 3000 Nissan Leaf cars have come to the country in a space of 6 months in the later part of 2015. Vehicle price was around 2.5m to 3m in those days. Some users Even paid close to 3.5m happily when the car had a favorable public opinion.
So, if we assume the other numbers in the list are there, then people would be happy to pay around Rs 4m today (adjusting for inflation since 2016) for a high end electric car like the LEAF. It has to be a 3 year old previous model, reconditioned car of course to fit into that budget. Prices close to Rs 5m mean that they are simply out of reach for most of middle class in here and hence will fail to make a noticeable impact on larger society and country. So the taxes will have to come down for 3 year old cars.
This could mean a mid range EV would do well for 3m and a low end one for around 2m. This is also a good space for a creative local manufacturer to fit in! It is difficult to say anything more than that with any level of assurance because vehicle prices depend on so many things, personal preferences, support, reputation of the dealer etc...
So, there we have it, 8 magic numbers!
$5000 brand new battery, 20 battery replacement/assembling places, Rs 50 per unit fast charging, 10 000 vehicles, Rs 13 electricity cost for fast charging stations, 60 fast charging stations and Rs 1m priced 30KW charger. (Rs 4m LEAF would be nice too!)
Little more than just a wish list... We will need these or similar numbers for EVs to thrive in here and to pass that point of no return for adaption. Currently we are far away from these numbers so we have all these present problems and are facing immediate survival challenges.
I owe you more explanations for first two items regarding batteries, how to achieve those, plans and more details.
We can do this if we are prepared to act!
Let's meet again in the next post to discuss just that.
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Mate, I know you'd done a lot but I disagree the post to a great extent...from battery needs, service needs, DCFC numbers to ideal pricing of an EV!
ReplyDeleteThe battery need is not that critical..we have over 100 cars past the battery warranty threshold of Nissans...that is 100,000 kms + 5 years. There's no way you dosent know how they achieved it. Furthermore a lot can be used with a slight improvement for years. Out of 4000 we will be needing say 100 batteries max for the next 12 months.
An artificial need generation is around, with a fear factor, trust you'll not be a part of.
Watch what our average daily usage is. its 30 kms or less. You'll get over 10,000 users who will find Leaf is a better solution for their travel for next couple of years. Ashoka that's a long period for a cheaper and better batter solution to come up.
Don't expect we will be with the same technology for 2020 and beyond, as you correctly highlighted in graphs...but not reflected in your text.
I'm not gonna talk of the rest of the points, as we spoke here and there, including the payback of DCFC, numbers needed etc...but one thing to end. If you expect the price of an EV to be lesser than an equallant ICE it will not happen and needn't to be!….meeting the price parity is fine for us to justify the use of having EV with the factored cost of battery replacement in 8 years the least….and to achieve a better TCO...Total Cost of Ownership!
Sujeewa, It's ok to disagree I also do not like some of these findings but we have seen the numbers and were monitoring them for few years and we need to understand the message they give. Hope you have read the part1 of this post. When we started, on average a car was charging about 10 units in a fast charging station, now it has gone beyond 6. What does that mean ?
ReplyDeleteIt is ok to focus on our daily commute and stay calm, I'm also aware that around half of current users (may be even more) are those who use the car for about 30km of daily use and nothing more. However, not all users can afford two cars and not all have a short daily mileage. Moreover, that is not a worthwhile goal to the country and not the best way of using EVs for the environment. The case we need to have is that EVs could travel anywhere in this small country and able to work as the only vehicle for a middle class family. Then only we can hope for mass adoption and expect returns of all good things which comes with it. What other reason are we having a fast charging network around the country if not to facilitate that ? So the focus of this post is that group of people who use their EVs to max and provide it's full green benefit to the country.
Battery problem is very real. Around 1/3 of our cars are manufactured either in 2012 or 2013. They will all need replacements in this year. (unless they want to use the car just as a bicycle, just 20km a day) If they all wait till the last moment and start looking for a solution at the same time, prices would simply go up and panick will set in. Now is the time (we are already late in this) we should acknowledge there is a problem and actively start looking for solutions. This is not a problem which can not be solved. This post hasn't gone into those solutions and that would probably be a next post.
Numbers given are not an end in itself, it's the base we will need to save the industry from collapsing. For instance, 10 000 vehicles and 60 fast chargers is the minimum we need to have a stable eco system, from that point it would grow and we will need more, which is a good thing. Without enough cars there wont be enough investments and interest as it is the case right now.
Even as we speak, the second hand market of an EV is coming down fast and already very low from what it used to be just one year ago. I for one believes problems need to be acknowledged and we should work towards practical solutions rather than hushing them up fearing short term problems. Except 1-2 people who import used batteries in small quantities, there is no other solution for batteries right now. That need to be changed fast. We will need replacing of 4000 batteries in coming 4 years! around 1000 every year, starting from this one.
good thoughts Asoka . Please keep up the goodwork
DeleteDear Ashoka - I do not agree with the following text in your reply to comment by Sujeeva
ReplyDeleteExcept 1-2 people who import used batteries in small quantities, there is no other solution for batteries right now.
THERE IS A SOLUTION AVAILABLE and please call me at 0750241055 or sms your e mail address or mobile number to discuss this matter which needs your/our urgent attention