Sunday, November 3, 2019

Who Killed The Electric Car This Time?

Cheap gas is the usual suspect, but today there are others as well.

A reader writes that they love their Chevy Volt, and wonders why it is being discontinued from production after eight years.   Why is GM getting rid of such a great car?   In an era where every auto manufacturer is claiming to be migrating to electric and hybrid vehicles, GM is migrating away, it seems.  What is going on?

It is an interesting question, and short history of electric cars in America is in order.   In the early days of the automobile, electric cars actually dominated the industry - for a brief while.  In a county with few paved roads, an electric car, such as the Baker electric, which looked like an armoire on wheels, could take the ladies who luncheon to the Waldorf for a salad.

Slow and with a limited range, these early electrics were powered by lead-acid or nickle-iron batteries and had a limited range of a few dozen miles at best, at a top speed of 20 miles an hour or so (except in special racing applications, which proved disastrous).  They worked well enough as a vehicle replacing a carriage travelling through the streets of New York or any other major city.  They didn't do as well as a practical vehicle for cross-country use, or even suburban use.

Such vehicles were the equivalent of my golf cart - a part-time friend with limited range and speed.  Our golf cart will go about 19 miles an hour on a good day, and circle our island twice (about 30 miles) before running out of juice.  A fun "toy" for travelling around the island, but not really a cost-effective or practical means of transportation.

Gasoline-powered cars took off in the early part of the 20th century, as self-starters were invented, and as the engines were made more reliable.   The infrastructure providing service stations and repair shops also started to materialize, as Standard Oil realized they could sell a waste product (gasoline) of their kerosene business (which was dying off in the age of electric light) and make an awful lot of money.  Gasoline-powered automobiles suddenly made a lot of sense - and they proved this in long-distance and cross-country races.   You aren't going to win the Indy 500 in an Baker electric.

So gasoline-powered cars took off, and things pretty much stayed that way for the rest of the century.  In response to the gas crises of the 1970's, many experimenters and home builders started looking at other technologies, such as steam-power (which also was popular in the early days of motoring, and quickly fell from favor) and electric power.  Like with the Trollies and Zeppelins, every other issue of Popular Science of that era would feature an electric or steam-powered car on the cover, proclaiming their "return".

Hobbyists in that era would buy a car with a blown engine, and then convert it to electric power with decidedly mixed results.  I recall reading the blog of one such hobbyist, who bought a Saturn coupe with a blown motor, and stuffed it full of batteries.   He wasn't satisfied with the range and speed, so he ended up removing the passenger seat to install yet more batteries - effectively making it into a one-seat car.  Even then, he found himself slowed down to 30 mph going up a hill one day, with some jackass in a pickup truck tailgating him and honking.   Eventually, he retired the Saturn to his garage, with the idea of tinkering with it "someday" but probably gave up.

Part of the problem, in addition to "range anxiety" and a lack of places to recharge, and the massive weight and space needed for "flooded cell" batteries, is the longevity of them.  I just replaced the batteries in my golf cart, which lasted a little under five years - which is about the norm.   Battery life depends on the number of charging/discharging cycles, and lead-acid batteries have a very limited cycle life - compared to newer ones.

What we see happening here on the island, is that people (particularly heterosexual men) refuse to replace the batteries (same is true for their gas-burning cars) because, you know, "the batteries are still good!"   So the golf cart range gets shorter and shorter, until one day, they have the "push of shame" as the dead golf cart has to be pushed home.   One neighbor broke down and bought a used gas-powered cart.  Even our island cart rental guy has switched to gas-powered Yamaha golf carts, as he got tired of towing in the renters who "forgot" to recharge the batteries, and assumed they would run forever.  Experiences like this cause people to have yet more range anxiety.

Others simply drive their golf carts less and less, until they sit in the side yard, like the hobbyist's electric Saturn.  I know of several folks who simply stopped driving their golf carts, as they don't want to spend $600 at Sam's Club on new batteries (which take about a half-hour to install) and they don't want to drive the cart, because they are afraid of "being stranded".   And yet, they don't sell the cart, either, because, you know, having a golf cart is a thing here.  It is kind of silly.

But getting back to cars, GM introduced the EV-1, the first serious attempt at a mainstream electric vehicle in decades.  Sure, other manufacturers (Toyota, Ford) took existing cars and put batteries in them, but GM started from the ground up to make a practical electric vehicle.  And this wasn't because the market was demanding one, but because California passed a law requiring electric vehicles be made - if you wanted to sell gas vehicles in that State.   The law was eventually repealed, and this first generation of electric cars went away, fairly quickly.   GM had leased all the EV-1's, so it reclaimed them and crushed most of them (except a few in museums) and that's when the conspiracy theories started up.   Who killed the electric car?   Had to be big oil, right?

Well, not really.  Once the mandate to make these money-losing cars was gone, so were the cars.  And as practical cars, they left a lot to be desired, running on lead-acid batteries.  Range was limited, as was speed, and they weren't really useful for much other than local commutes.  As a replacement for the internal combustion powered car, it left a lot to be desired.  But nevertheless, GM put a lot of money into this, and in terms of technology, it was pretty sophisticated.  Unlike my golf cart, the EV-1 used an AC motor with a power inverter to convert the DC battery power to AC.  They also spent a lot of time and money developing a "paddle" charging plug to eliminate the prospect of naive owners electrocuting themselves with 220V.    Imagine having to plug and unplug your dryer every morning - eventually, something would have to give.

While the EV-1 was a technological wonder, the energy density of the batteries was still a problem.  Simply stated, for the weight and volume the batteries took up, there was little energy stored, compared to say, a tank full of gasoline.  You can't simply add more batteries to compensate for lower energy density - you run out of room, and the car literally will weigh tons.   You add more batteries to add more range, and you end up reducing speed and hill-climbing ability.  There reaches an end-point in the design.   The lack of charging station infrastructure was also an issue - electric vehicles were at the same stage as gasoline-powered vehicles were in the early 1900's, where in many rural areas, you had to go to the drugstore to buy gasoline for $5 a gallon.

A slight diversion here, but a relevant one, is a discussion of the Toyota Prius.  The Prius was not, in the early days, an "electric car" but a gasoline-powered car with an electric energy recovery system and power assist.  The theory behind the Prius is simple: In stop-and-go city traffic, you recover energy from braking by using the motor/generator to charge a lithium-ion battery pack.   When you accelerate again from a stop, this electric energy is converted to kinetic energy by the motor/generator, saving on gas.  The Prius thus manages the neat trick of getting better gas mileage in the city than on the highway - something no traditional internal combustion engine car can achieve.

Problem is, people fail to drive these cars properly.  You have to anticipate stops and let up on the throttle, so the motor/generator can convert kinetic energy to electricity.  If you floor it to the stoplight and put on the brakes at the last minute, the service brakes (friction brakes) kick in, and all that energy is converted to heat - and a cloud of brake dust.  Speeding in a Prius makes no sense, but sadly, a lot of people buy these cars to "make a statement" and not necessarily to save gas.  Status-seeking raises its ugly head once again.  It is, in a way, like the person who eschews thin plastic grocery bags and buys $1.99 "reusable" bags made of non-woven spun fibers, that are the equivalent of hundreds of those thin plastic bags.   And since they "forget" to bring them, they buy new $1.99 bags over and over again.   It this really saving money - or the environment?

The Prius was not an electric car - at first.  You could not "plug it in" to recharge it.  Some hobbyists took apart their Priuses and added battery packs and chargers to make them plug-in hybrids.   But that was the exception to the rule.  What the Prius did was make the lithium-ion battery, as a major power source, look practical.

Enter Tesla.  In the erly days, Tesla bought sports car chassis from Lotus and stuffed them with lithium-ion batteries.  What happened next changed the whole theory of electric cars. Rather than trying to sell electric cars as some eco-friendly trasport pod, they sold the Tesla Roadster as a sexy performance car.   Electric motors generate maximum torque at 0 rpm, which means they can burn rubber with the best of them.  And with the energy density of lithium-ion batteries, the range and power issues were, if not solved, at least moved down the field.   The Tesla Roadster wasn't sold as an eco-pod, but a hot rod.

They followed up with the Model S, which was (and is) a luxury car.  Instead of going after the earth-shoe crowd, they went after the Italian loafer demographic.  I realized this when visiting Winter Park, Florida one weekend.  Winter Park used to be this funky little town of shops and restaurants and Old Florida motels and hotels.  They have a museum there with the largest collection of Tiffany glass.  It is a fun place to visit.  But in recent years, it has gentrified, and the little shops and cafes are now high-end boutiques and fancy restaurants. The old motels have been torn down for new luxury hotels.

In front of one restaurant, behind the velvet rope of valet parking, you see a line of luxury cars - a Porsche, a Bentley, a Lamborghini, a Ferrari - and a Tesla Model S.   Tesla was genius to see that an electric car could sell as a luxury and status item, not some eco-pod that punished its owner for the sake of being green.   Like the roadster before it, the Model S was a hot rod, with a "ludicrous speed" button that would make the car go from 0 to 60 in a matter of a few seconds - besting many "performance" cars.

The problem was, of course, that these cars were very expensive, and Tesla was losing money on each one sold.  Since then, they have come out with the Model 3, which was priced more for the "everyman" - although still more expensive than a comparable gasoline-powered sedan, which can be had for $10,000 less.  Subsidies, in the form of a $7500 tax credit, help boost sales.  And the sale of carbon credits to other manufacturers also boosted Tesla's bottom line, to the point where they are reporting profits on a semi-regular basis.   But like with the EV-1, changes in the laws could bring all these subsidies to a grinding halt in a real hurry.  It will be interesting to see what happens.

The Chevy Volt is an interesting beast.   It was built in the post-bankruptcy era and was a condition of the bailout loans granted to the new GM.  Not quite a hybrid like the Prius, the Volt was more of an electric car, with a gasoline-powered range extender.  You could plug in your Volt and drive 38 miles or so to work, plug it in there, and then drive home - without ever starting the engine. Toyota, realizing they were missing the boat here, brought the plug-in Prius to market.

Historically, General Motors introduced new technologies in their premiere Cadillac line, and then let them trickle down to the lesser marques. The self-starter, air conditioning, power windows, power seats, and of course, "twilight sentinel" were all brought out in Caddys first, and then offered in later years in more plebeian cars.  The only exception was the Hydramatic automatic transmission, which was introduced in the Oldsmobile first.  It was thought to be a risky design, and if it failed miserably (like Chevy's unitized "knee action" suspension or copper-finned engine) it would damage the reputation of the "Standard of the World".   Once proven, the Hydramatic was quickly added to the Cadillac line and in fact made standard equipment within a few years.

So it is odd that the Volt would be introduced as a Chevrolet and not a Cadillac, particularly given its relatively high price. Eventually a Cadillac version was introduced, albeit late in the model production and quickly cancelled.  GM was still in the mindset of the eco-pod in terms of marketing, and not in selling high-end "luxury" EV's like Tesla was.   Of course, maybe GM is learning that new technologies are risky, and Cadillac's reputation for quality has suffered because of this "bleeding edge" mentality - something that BMW and Mercedes suffer from as well, which is why I am done with German cars.   We all thought the Cadillac Northstar V-8 was a technological marvel when it came out - a real shame about that head-gasket deal, though.   Sort of like BMW's issues with the 5-series V-8's in the 1990's, where high-sulfur gas eroded the cylinder walls in less than 100,000 miles.  Sort of turns you off from expensive "luxury" cars, when they don't last as long as econoboxes!

But this begs the question, why is GM killing off the Volt?  They are still selling the all-electric Bolt, which is more of an eco-pod kind of car - tiny, small, and relatively inexpensive.  There are still Volts for sale, according to the Chevy website, which is telling, as production ended in February of this year, and there are still cars on dealer lots, unsold.  There is no huge demand for any of these cars, it seems.

On paper, at least, the Volt would seem to be a big-seller.  The problem of energy density in the batteries has been solved - or at least largely improved.   And unlike a Tesla, the Volt can drive from LA to New York, without having to worry about running out of battery power.  And in terms of infrastructure, there are more charging stations available today that at any time in history.  On our little island alone, every hotel has a set of chargers and all the parks have 110V plug-ins for slow charging.   Funny thing, though, I rarely see anyone plugged into them!   There is one guy on our island who has a Model 3 Tesla, and occasionally we get visitors in a Model S or Model X (This summer, in Washington State, I saw someone towing a camper with a Model 3 - I didn't know you could do that!  Maybe you can't).

So with this background, why would GM kill the Volt?   Well the answers are numerous:
1.  Cheap gas, yet again:  Gas here locally is about $2.23 a gallon, which is cheap, by historical standards.  Yes, in Canada this summer, we were paying over a dollar-a-liter, which works out to about $5 a gallon or more.  You see a lot of small cars in Canada.   You also see a lot of RVs and big pickup trucks as well.  When gas is expensive, a car like a Prius or the Volt starts to make more economic sense - the payback in terms of the extra cost drops down from decades to years - still longer than most people keep such cars, though.  But at a couple-bucks-o-gallon, the payback may never occur
2.  Mandate over:  Some folks derisively refer to electric cars and hybrids as "compliance cars" - vehicles sold to meet government standards or bailout requirements.  The EV-1 was created to comply with California laws, which were later repealed.  Once the law was gone, so was the car.  The Volt was a product made to appease the Obama administration.   Trump is now in power, so the car no longer is needed. 
3.  Carbon Credits:   The big thing today is carbon credits - at least for the time being (until Trump undoes this as well).   In that regard, GM gets more bang-for-the-buck from an all-electric Bolt than they do from a hybrid Volt.  If GM was indeed losing over $40,000 on each Volt, but "only" $8000 on each Bolt, the Bolt is a better deal in terms of cost per carbon credit.  So it makes sense to sell the latter an cancel the former.
4.  Move to All-Electric:   Automakers all over the world are investing in electric car technologies, and it is possible that we have reached a "tipping point" in the electric car business, where the infrastructure for recharging is now in place, and the energy density issue has been solved.  Hybrids may have been only a stop-gap measure, in retrospect.  The weight and complexity of a hybrid drivetrain adds to vehicle cost.  You can make a pure-electric car for less than a hybrid, and all that weight and space taken up by the IC engine, transmission, and gas tank, can make room for more batteries (or reduce weight and make the car go further).
5.  Cost:  The Volt wasn't a cheap car to buy - stickering for about $40,000 with the usual array of options.  Even the "base" model sells for $33,000 or more - which is far more than a base Camry or Accord.   You can buy a hamster for fifteen grand - fully loaded for twenty-five.  The Volt is not a cost-competitive car for most folks, and the delta in gas savings will take a long time to realize, at least in the USA.  As a result, sales, even with a tax credit, have been slow. 
6.  Lost Money on Each One:   It is highly likely that GM lost a staggering amount of money on each Volt sold - more than the purchase price of the car, in fact.  In order to make money on a car, you have to sell a lot of them, to bring the per-unit cost down.  The car was complex and expensive to build, and since so few were made, the costs escalated.  According to  some sources, GM loses thousands of dollars on the Bolt as well - but makes up for it through carbon and mileage credits that offset pickup and SUV sales.  Toyota had less problem with the Prius, having sold them for more than a decade, in large numbers.  Perhaps if the Volt was not so over-engineered, or could have been sold in higher volumes (if gas prices were higher, or subsidies were greater) GM might have made money on the car.  But in today's climate - where automobile production capacity far exceeds demand, and as sales start to drop worldwide, GM has to reef its sails for the inevitable storm to come.   And it's a-coming, I believe. 
7.  No One Wants "Cars" Anymore:  GM, Ford, and Chrysler have largely dumped their car lines in favor of SUVs and pickup trucks.  Even sales of remaining cars - the Mustang, the Camaro, the Challenger - are slowing down.   Hard to believe that Ford is having a hard time selling Mustangs, but a visit to the local Ford dealer shows what is going on - row upon row of pickup trucks and SUVs, and only two or three Mustangs on the lot - price reduced.   For whatever reason, Americans have abandoned the traditional sedan and coupe.  And that is odd, as at one time, the only choice Americans had were sedans and coupes - even buying a station wagon was considered "out there".   If GM can't sell the Chevy Cobalt, Malibu, and Impala, how can they sell a Volt?
8.  Chasing Your Tail:  The conundrum of the electric car, is that if they become popular, they will depress demand for gasoline, which in turn will depress gas prices, which in turn will make gas-powered cars look more attractive.  The electric car kills itself
9.  The IC Engine Refuses to Die:   With electronic fuel injection, four valves per cylinder, direct injection, variable valve timing, and ten-speed transmissions, the efficiency of the IC engine has increased dramatically over time.   Over the years, people have written off the internal combustion engine as having maxed out, in terms of efficiency.  And over the years, engineers wring a few more MPG out of these engines.  The next big thing, I think, will be valve timing.  While variable valve timing (through camshaft manipulation) is already a thing, the idea of electronically activating valves, which has been tried in the past, (as early as the 1970's, with water-cooled solenoids) will allow for even more precision control of the combustion process.  Another trick might be variable compression ratios, which has already been tried as well.  Will the IC engine eventually hit a wall?  Of course - the cost and complexity is already reaching a point where IC engines will be at a disadvantage to the relative simplicity of the full-electric.   But we haven't gotten to that point yet. 
10.  Decline in Oil Demand, Increase in Supply:  Right now, demand for oil has declined, worldwide, as the economy slows down and as cars get better and better gas mileage.   We are also awash in a sea of oil - with the USA being one of the largest oil producers (if not the largest) and actually an exporter again - for the first time in decades.   As I noted above, cheap gas kills the electric car, and we are awash in a sea of cheap gas.
As you can see, these factors are inter-related.  Long-term, the electric car has a future, but it will not be an easy road to travel (if you'll pardon the pun) and a lot of companies will struggle and some may go bankrupt, particularly the first-to-market (Hello, Tesla?).  Tesla could die if Volkswagen keeps its promise of switching to an all-electric and hybrid fleet.  Once the market is flooded with less-expensive alternatives (an Audi electric, for example, could out-Tesla, Tesla), it will be hard for a niche player with only one factory to compete.

But that has yet to happen, and it may be many years before electric vehicles are economical, profitable, and dominate the market.