Battery Company Warns of Tepid Demand for Electric Vehicles

Suppliers of lithium-ion batteries for electric vehicles face a problem of building more batteries than the market of the next few years will demand, according to Mary Ann Wright, a former Ford executive and now the manager of advanced auto batteries for Johnson Controls.

Testifying before the Senate Energy and Water Development Subcommittee, Wright warned that by 2015 the world will be able to make 400,000 electric-vehicle batteries, but demand will not justify this number. U.S. demand will lag behind capacity by 62%, Wright said.

According to Wright and others in her industry, the solution is the electrification of vehicle fleets, especially by federal and state governments. Government agencies operate millions of vehicles. Postal vans, for instance, get 10 mpg, travel at low speeds and make frequent stops. U.S. Postal Service officials estimate that an electric van could save $1,500 a year over its gas competitor, and the agency has a pilot program to bring an electric version to its D.C. fleet.

Such a program would contribute “toward rapidly achieving scale,” thus making all-electric vehicles more affordable, Wright said.

Electric Vehicle Component Supply May Outstrip Demand (DriveOn)

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Paul

Mar 1, 2010 11:57:36 AM

The Postal Service has a number of Chrysler Town & Country EVs they got a year ago.I wonder how they are doing.

Dan

Mar 2, 2010 3:05:14 AM

Fleet vehicles used in city areas are the logical first step for electric vehicles. This could easily be extended to things like taxi fleets and emergency vehicles which have central garages where batteries could be swapped off of a rack.
By allowing electric vehicles to "grow up" in this environment, efficiencies of scale can come into play, and cost reductions from manufacturing improvements can bring the prices of consumer vehicles down as well as improving reliability and longevity.
Still, as the economy continues to improve it is reasonable to expect oil prices to increase as well. Demand for electric vehicles among consumers will likely be stronger than Mary Ann Wright imagines.