Last Monday, Mike Ramsey’s article “Bumpy Road for Electrics” in the Wall Street Journal laid out a sobering assessment of the future of electric vehicles in the United States.  Except for the ever optimistic Carlos Ghosn of Nissan, the consensus view in the industry, according to Mr. Ramsey, is that electric drive is in deep trouble. 

Ramsey cites the usual suspects: range anxiety, lack of recharging infrastructure, consumer driving habits and, most of all, cost.  He suggests that modern electric vehicle sales may follow the history of earlier electric vehicles:  car makers will sell several hundred and then pull the plug.

So with government and industry having just spent billions of dollars to promote electric drive and advanced battery manufacture, what is the plan to avoid this train wreck?  The plan at this point seems to be to spend more money on research and hope for a breakthrough.

To be sure, the breakthroughs are probably out there.  Metal air batteries, advanced anodes, solid state battery technology and the like all hold the prospect of eventually producing batteries that can compete with petroleum on the basis of energy density and cost.  But the best guess is that eventually is still a couple decades away.  Focusing solely on research and manufacturing capacity isn’t a strategy; it is just hope.

A sound strategy needs to focus on what can be done today to bring battery costs down and make electric vehicles attractive to consumers other than wealthy environmental enthusiasts.   A central part of that strategy must be to promote secondary commercial markets for advanced automotive batteries. 

Finding ways to use advanced automotive batteries in commercial applications other than automotive applications will bring down battery costs.  A factory that makes batteries both for plug-in electric vehicles (PEV's) and for stationary applications can amortize its costs over a greater number of products.  Reusing retired auto batteries in other applications after the end of their useful lives in vehicles permits their costs to be amortized over a longer term.  In the absence of a technological breakthrough, promoting secondary uses for advanced automotive batteries is the fastest and most effective way of addressing the advanced battery cost problem.

Promoting secondary markets must become a central part of our national advanced battery strategy.  Government and industry need to redouble their efforts to identify who the secondary users of advanced batteries will be and adequately incent or compel their participation.

We must also rethink advanced battery design and the way the federal government supports it.  If secondary battery use is essential for the commercial viability of PEV’s, then PEV batteries must be designed from the beginning with that secondary use in mind.  Federal dollars and tax incentives should not be wasted on products that are functionally unique and economically unviable.

Part of the problem is that the optimal secondary use for advanced automotive batteries has not yet been determined and is not being investigated in any coordinated way.  While it is highly likely that the optimal secondary use for advanced automotive batteries will be found in stationary, grid-connected energy storage, there seems to be little coordination between the utility industry, which is experimenting with various types of energy storage, and the automobile industry, which needs to find a secondary use for a very specific type of energy storage.  This must change.

The high cost of advanced batteries is the elephant in the PEV room.  All other challenges of electric drive pale by comparison.  Government policy must focus rigorously on bringing battery costs down.  Identifying secondary battery uses, promoting secondary battery markets, and designing advanced automotive batteries expressly to anticipate those secondary uses and markets is where that strategy must start.