GM Exec: Low Oil Prices Have No Effect On Our Long-Term Electrification Plans

APR 12 2015 BY MARK KANE 56

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Oil prices went down sharply after a few years in $80-110 range, but many sources are saying that this will not affect electric cars or perhaps only have a minimal impact.

How could it be that the price of fuel for conventional drivetrains isn’t important? Maybe because early adopters are willing to buy EVs anyways, or is it that they don’t believe that low oil prices will stay around for long?

According to Charged EVs, Mark Verbrugge, Director of GM’s Chemical and Materials Systems Laboratory, said at the 32nd International Battery Seminar that low oil prices will not affect the manufacturers plans to develop and introduce new electrified models.

It seems like EVs have passed critical point after in which they prosper in parallel to other solutions.

“Responding to the question-of-the-year during a Q&A session, Verbrugge said, “from an OEM perspective, if you take a longer view, what we’re really driving at is fuel-efficiency targets, and those don’t change.”

During another presentation, Verbrugge noted that it’s not just the US CAFE target of 54.5 MPG by 2025 that’s driving electrification, but a worldwide trend of increased-efficiency and reduced-CO2 regulations. One of his slides highlighted the upcoming individual regulatory requirements of the US, Canada, California, Mexico, the European Union, China, Korea, Japan, India and Australia.

“You’ve got three ways to get there,” Verbrugge continued. “You can electrify your vehicles to some extent, or you can lightweight them, or you can reduce functionality. And [we focus on reducing] the cost of electrification and lightweighting. Reducing functionality is not something you want to do in the market.”

The EV market can be resistant to falling oil prices because battery costs are moving down and we expect that in the near future, manufacturers will offer better value propositions like 200-mile affordable BEVs and cheaper 80-100 miles BEVs.

Dr. Prabhakar Patil, the CEO of LG Chem Power stated:

“The point I can comment on is that the batteries continue to evolve in terms of cost. I’m somewhat surprised myself at the rate at which the cost has come down. It’s kind of a good feedback system, because as the costs come down there is going to be more demand. I’m really waiting to see the 200-mile EVs priced at around $30,000, because that could potentially be a tipping point.”

So, it seems oil prices no longer play a part in determining the future of batter-electric cars.

Source: Charged EVs

Categories: Chevrolet

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56 Comments on "GM Exec: Low Oil Prices Have No Effect On Our Long-Term Electrification Plans"

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To say oil prices don’t matter is ludicrous. I remember when gas first hit $4 per gallon, there was a rush on old, used Geo Metros. Those things were fetching $8,000 or more. It was unbelievable. I bet a lot of people regret buying those things. I suspect some people thought gas would continue to rise and figured they’d better get something fuel efficient while they still could. Anyway, you can bet that next time gas prices go over $4, EVs will be flying off the shelves.

On the contrary the regulations will make electrification at large scale necessary for the manufacturers no matter what the market wants to buy or the oil prices.

So even if the oil price is a factor it will be a tiny factor.

Exactly. Global Vehicle Emission Regulations are the ONLY real reason why GM is now building EVs. They’re not doing it for the good of Humanity, or their short term bottom line.

The fact they’re adding more battery density in future models, is due to others already planning more affordable models with around 200 miles of range. GM knows it has to create product to compete, if they want to stay in business after 2025.

+1

When manufacturers compete, the consumers win.

Sorry Anon,
But the real reason is: “there’s exponential growth in the rate of exponential growth”. This is related to: Solar, Wind, Batteries and EV’s.

GM also, has the inside info on all the latest battery developers in the field.

In other words, Exxon will be out of business by 2050.

Sorry, that should have been @Murrey.

The human mind has an inherent flaw in seeing the current rate of change as linear, and extrapolating out with linear predictions.

But, GM has smart people on board judging, by their investments in battery startups.

@Anon,
I agree.
The good thing about these global regs is that, even if the conservatives in the US manage to roll back the MPG improvements, GM still has to sell cars in other parts of the world and in California.

Big article in NYT today on all the desalinization plants going in in Ca. Desal takes huge quantities of electricity…..so global warming begets more global warming…..it’s a domino effect.

California has willfully ignored a well documented climate shift over the last 75 years. It’s highly unfortunate that they waited till the very last minute to build these plants, and not plan to use non-carbon renuables like wind / wave and solar power for these desalinization plants. 🙁

I once based a storyline idea around the California drought over six years ago.

But what’s stranger then fiction is some environmental group is sue ling one of the builders of a Distillation Plant. The Environmental people are suing the Distillation plant out of fear that the de salting plant will dump salter then normal salt water back it into the Pacific Ocean.

What is criminally stupid about this is how massive and salty the Pacific Ocean won’t notice the different if we take a 100,000 million gallons of water a day out of it. Considering a cubic mile of sea water has six trillion gallons of sea water and a few million pounds of salt in it.

As far as the drought is concerned California is going to take extreme expensive measures no mater how you look at it to fix it. I really don’t care about how much carbon desalting produces when my tap is bone dry and my toilet is bone dry while I have to move jugs of water.

I think as of now California is going to have to build at least ten new desalting in plants in the next five years to beat this drought.

Railroader, the concern of environmentalists isn’t a change in salinity of the entire Pacific Ocean, but the local seawater conditions. That impact is real and has been documented at operating plants (effectively resulting in low diversity/productivity zones). The other impact is the impingement and entrainment of billions of fish and invertebrate eggs and larvae per year- also documented at operating plants. These are real impacts that will have a multiplying effect as more desal plants are built.

A lot of debate, over this. A “real” impact doesn’t mean its material. Decisions about desalination need to be made in light of cost, environmental impact and alternatives. Should 80% of water go to produce, and preserve jobs in what is becoming a desert? How many millions of tons, of marginal CO2, are represented by desalination?

And the leftists go to war against each other. Hard not to like that one.

Of course it matters . . . but it is also not very predictable and it is very volatile. They would be crazy to drop the EV program . . . where would they be if they did and then Iran launched missiles at the huge Saudi Arabian oil fields in East Saudi Arabia thus pushing oil to $200/barrel?

Personally I think the crap in Yemen is going to trigger mayhem with oil prices. The reason is Arabia has gone for over 75 years with out any massive upheaval like every county around it with in 500 miles. So I think this upheaval is going to happen sooner rather then latter.

The Electric Cars along with low oil prices might trigger this upheaval. In that if oil prices stay super low for a long time it will cause the Arabia Government to cut back on services and other things to save their budget. This in turn could trigger something.

I think the point isn’t that they don’t matter. It’s that short-term price moves no longer affect GM’s long term planning. Nobody really believes these prices are here to stay.

When 200 Mile EV’s are priced at $30,000 – $35,000 – what will interest/demand be for 60 – 90 Mile Range EV’s? Will they stop making them – or Slash Prices to the Bones (Sub $20,000 – Like the ads for the $19,995 Dodge Caravan when on Sale!)? When 200 Mile EV’s are out there – will the OEM’s Making them install DC QC Infrastructure for them? (Tesla – YES! Nissan – sure! BMW – Yup, Kinda! GM – Huh, we are not in the Infrastructure Business!) And – Will Low Oil Prices – have an affect on customer Demand for these $30,000 – $35,000 cars with 200 AER? I mean – if Pump Gas drops back below $2.00 – or even below $1,50 a Gallon in the USA, and back to ~$0.50 a Litre in Canada – what will that do to beat up on these new EV Sales? We Keep hearing they are talking about building more tanks for the current fully stocked ‘Strategic Oil Reserve’, because they are now all filled up! Will that not simply have itself another problem if oil prices drop further – due to some more exotic way of discovering Oil, or failed… Read more »

well, the 200mile cheaper EVs are still a few years away. By that time BMW + Nessan should be using better batteries to get much better range. I dont think any 60-90mile range cars will be around once the bolt/M3 come out.

I think they will be around for a while longer, just at lower price points.

+1. There is a market for second cars. There could even be a trend to make your second car, which would mostly parked at home, an additional solar-backup.

Mutwin Kraus said:

“I think [short-range PEVs] will be around for a while longer, just at lower price points.”

I think very few auto makers will try to sell short-range PEVs for long after the nominally “200 mile” EVs go on sale. The history of tech revolutions is pretty clear: Once a tech moves out of the early adopter stage, consumers show little interest in continuing to buy older generations of the tech. Not even when the price is slashed.

I think there is long-term room for cheap EVs in the 120 to 140 mile range. I do agree that the 80 mile class EV will go away, but the floor won’t be 200. A lot of people don’t need 200, they just need all-weather, highway speed 100, which is a 120 to 140 EPA range.

I know Musk thinks 200 should be the cutoff, but Musk lives in California, where people spend a lot of time driving long distances in large urban areas. The whole world isn’t like that.

How much does DonC’s 35 mile range Leaf go for?

Robert Weekley said: “When 200 Mile EV’s are out there – will the OEM’s Making them install DC QC Infrastructure for them? (Tesla – YES! Nissan – sure! BMW – Yup, Kinda! GM – Huh, we are not in the Infrastructure Business!)” It will only be necessary for Plug-in EV (PEV) makers to build out their own individual charging station networks until there are sufficient numbers of PEVs being driven around to create enough economic demand that building for-profit fast-charge stations make sense. As the EV revolution moves out of the early adopter stage and into the mainstream, the need for any individual auto maker to build such a network will disappear. GM, Ford, Toyota, Nissan, Kia… no auto maker has its own gas stations. They don’t need to build them. The method of refueling gas guzzlers was long ago standardized, and that created the economic opportunity for third parties to make money selling gasoline and diesel. The same will eventually happen with PEVs. If the EV makers want that to happen sooner, then they need to get together and agree on real standards for PEV charging. Standards which not only address the charging needs of today’s PEVs, but tomorrow’s.… Read more »

“Tesla’s CTO says Tesla wants to get down to the 5-to-10 minute range.”

When did Straubel say that, because that would be big news. Getting a recharge as fast as a gasoline car is not necessary but certainly faster than an hour or even 30 minutes is. So a 5-10 minutes objective indication is right in the sweet spot and thus big news.

I’ll believe that when I see it… The only way practically I can see a 5 minute recharge time of a 85 kwh battery is to

1). Run the car connector at 1500 volts.
2). Either have superconducting batteries or
else have a chilled water (in/out)
cooling connector on the car besides the
electric hookup.
3). Have a several hundred kwh stationary
battery associated with the Stall to keep
the demand charges (or demand contracted
for (world wide its one or the other,
or both) reasonably payable.

“It’s not going to happen in a year from now. It’s going to be hard. But I think we can get down to five to 10 minutes,” Straubel said in an interview with MIT Technology Review. He noted that the current superchargers, which deliver 120 kilowatts of electricity, “seemed pretty crazy even 10 years ago.”

http://www.technologyreview.com/news/516876/forget-battery-swapping-tesla-aims-to-charge-electric-cars-in-five-minutes/

Didn’t seem that out of the ordinary to me. I said in 2010 that I thought 150 kw is about the most practical limit for cars. He’s mentioned the 5 minute goal a long time ago now, and the clock is ticking. Tesla’s track record on electrical things has not been that great. The MC’s were discontinued for the roadster because they essentially didn’t work. Then the UMC’s for the roadsters the tesla service techs used to carry 4 or 5 spare around all the time since they’d constantly burn out. The Nema 14-50 adapters for the model S overheat (I’ve seen and verified this in person at a Tesla Service Center), and was designed by an incompetent since it doesn’t meet NEMA standards for current density. They have fared better so far with the superchargers, and as far as that 14-50 goes, they have kludged it to make it work, with software to limit the current if the software thinks the plug is deteriorating, and also thermal fused the plug. Since there have been few problems of late, other than getting more of the SC stations built on time, I’d bet Tesla isn’t really that concerned about meeting that… Read more »

I think EV’s have hit or are really close to a critical point in affordability, practicality, and people just plain getting sick of seeing more flip-flops in gas prices than on the beach.

I’d imagine the only thing that would really stop EV’s at this point is if OPEC and other oil companies are willing to drop gas prices back down to $1-1.50 for many years.

But we know that won’t happen, because they’ve had a taste for high prices, and will want it again at some point. Maybe not today, maybe not tomorrow, but soon, as cliche as that line is.

Don’t forget that humans are using up this resource faster than the planet can make it.

Scarcity and increased drilling costs, also factor into the price.

Let’s assume that You are right.

1-1.50$ per oil forever…

And still every dam car OEM will provide hybrids at least or BEVs.

15%-25% of their cars.

That is simple math from applaying regulations.

Get 15% – 25% of Your cars ellectrified (BEF or PHEV), or stop selling them.

Its like CARB but without incentives and for whole world (that matter).
Car OEM will have to find a way to sell those PHEVs and BEVs.

There will simply be no other way.

And if people wont buy them anyway?

NOT AN OPTION.

Price slashes, deep sales, intense marketing. Anything will be used to sell those cars.

Because small profit is still preferable to no profit at all.

Saudi Arabia is trying to herd OPEC into actually cutting supply by pumping at it’s maximum capacity, and is now taking on debt. If that works then you will see much higher prices in the future.

Oil Price Volatility is embedded into capitalism, and I know I’m sick of it. Gas and Home Heating Oil.

Give me a way to use clean energy to heat my home and I’m done.

Solar panels on your roof, thick insulation around your house an electric heat pump for the rest of heating needs. There you have it.

Heat pumps are ~$30,000. Ask me how I know.

…unless you mean air-source heat pumps. In which case they save as much fossil fuels as a Plug-In Prius.

Ash09 said: “…people just plain getting sick of seeing more flip-flops in gas prices than on the beach.” Thanks, Ash. This is a point often ignored in discussions of whether or not the current price of gas is going to motivate people to move to PEVs. If you look at the historical move from whale oil to kerosene, whale oil fluctuated in price as whaling fleets exhausted the easily harvested whales in certain regions, then moved to other regions and/or to species of whales that were harder to catch or yielded less whale oil. The result was that any customer who made the switch to kerosene was thereafter able to predict how much he’d be spending per month and per year on fuel. Even when the price of whale oil temporarily dipped below that of kerosene, those who had made the switch had no motive to switch back, because they knew the price of whale oil would go right back up again. And so it is with the EV revolution. Sure, the economic pressure for individual drivers to switch from gas guzzlers to PEVs waxes and wanes with the current pump price of gasoline, but the switch from gas guzzlers… Read more »

So if CAFE is becoming a dominant driver of transportation electrification, then I predict that concept/notion of “compliance cars” will eventually disappear as all manufacturers will need to sell electrics, due to regulations, manufacturer competition and market demand. I suppose we may always use the compliance term for vehicles sold only in select states, but I suspect most electrics will be sold in more than 50% of the states after 2020 or so.

Absolutely, the personal transportation market is in a major (the biggest ever) transition and a new normal will be here in 5 to 10 years.

EU regs equall some 15-25% of sold cars being PHEVs or BEVs.

No way that OEM can sell that many of their cars if they are undesirable or at loss to them.

When its 1-3% in few states of USA (and few other markets)?
Doable.

25% in whole EU?
NOT.

XX% in whole USA?
NOT doable.

Unless people want those cars, or profit margins from other 80% can cover the loss. (But they why not make those cars profitable??)

electric-car-insider.com

+1

Glad to see at least one legacy auto maker exec face reality: The gas guzzler will inevitably become obsolete. Gas guzzlers are the past; the future is Plug-in EVs. Legacy auto makers which aggressively move to build and sell the new tech will be the ones with the best chance of surviving the EV revolution; the auto makers which lag behind will be left in the dustbin of history.

AMEN TO THAT !!!!!!!!!!!!!!!!!!

Lewis @ Custom Fittings

Whatever you think about the falling oil prices, it’s not like there’s now an unlimited amount of it, there’s just more than we need at this specific moment. Electriciation

Yes, EV adoption will be driven in part by the value proposition of a $30k, 200 mile battery EV. The other factor, equally important, will be the growing awareness of EV performance and maintenance advantages. Even though my Volt can’t compare to a Tesla in acceleration, in sport mode it far exceeds any ICE car I could ever afford. It’s just plain FUN to drive. And EVs will never need an oil change… and far fewer brake replacements….

It hurts to see “affect” in the title when you obviously mean “effect”.

I have two electric cars, one gas for long range, and my biggest problem now is keeping the mostly unused gas truck in shape for camper vacations. We reduced our gas use to close to zero.

The, what? 1% of people buying electric cars isn’t going to change because of gas prices. Most of the time I have no idea what the price is. Going to fill up every 2 months is not very memorable. The people buying/leasing EVs are a different breed of people who don’t follow the herd.

EVs need to be a much larger market in order to be significantly affected by things like gas price.

Bill Howland said: “I’ll believe [a 5-to-10 minute charge] when I see it… The only way practically I can see a 5 minute recharge time of a 85 kwh battery is to “1). Run the car connector at 1500 volts.” Not likely. Above 600 volts you have to use what safety regulators call “high voltage” equipment. Above 600 volts, there starts to be serious risk of electricity jumping a “spark gap” between the cable and the car’s frame. To increase current without increasing voltage, simply use cables, terminals, and buses with a larger cross-section, to reduce the electrical resistance. I’ve seen this idea dismissed by non-electricians, simply because the charging cable would supposedly get too thick to be handled. This is a rather uninformed objection. There’s no requirement to use a flexible cable; a segmented, articulated metal arm would do as well or better for a connector between charger and EV. There may well be equipment at super-fast-charge stations which use high voltage, but I really don’t see anything inside the car, or anything directly connected to the car, using high voltage. Building a car to use high voltage inside would be considerably more expensive, and I question the government… Read more »

Addendum:

I’m not seriously advocating a 5 minute time for full recharge of a long-range battery. I think 10 minutes will be sufficient. Altho it’s possible that competition will continue to drive charge times even below 10 minutes, I think at that point you reach the law of diminishing returns. For the owner of a super-fast-charge station that acts as a “rest stop”, or the owner of one with a convenience store at the location like most gas stations these days, a large portion of his customers will be spending 10 minutes or so there even if their car is ready to go in 5 minutes. If you want the customer to come in and buy something while they’re waiting, a 5 minute charge time might even be a money loser.

Another cause of diminishing returns is that as you get shorter and shorter charge times, it gets increasingly more expensive to build equipment that can lop off one more minute. Reducing charge time from 30 minutes to 29 minutes won’t cost much. Equipment for reducing charge time from 10 minutes to 9 minutes will cost a lot more, both inside the super-fast-charger and inside the car.

So you disparage my cautionary post with generalities on things which have yet to be invented, and now you say you’re not seriously suggesting it be done?

I’ll take your advice for what its worth.

Good advice costs nothing, and its worth the price.

Bill Howland said:

“So you disparage my cautionary post with generalities on things which have yet to be invented, and now you say you’re not seriously suggesting it be done?”

Bill, do you always go this far out of your way to mischaracterize something you don’t agree with?

1. I’m not talking about anything which hasn’t been invented. High current electrical systems are a problem which has been very thoroughly and completely solved. Likewise, batteries capable of super-fast-charging have been invented; they have not yet been commercialized.

2. I most certainly -am- seriously suggesting a 10 minute charge time for long-range BEVs will become reality… and probably far sooner than most people think. Just look how fast EV charge times are coming down with each new generation! But unlike JB Straubel, I’m not seriously suggesting a 5 minute charge time will become commonplace. As I pointed out, the limitations there aren’t technical, but economic.

I was trying to politely say you are not conversant with the topics you choose to comment on, perhaps I should be more blunt.

Whenever this is pointed out, you deflect it instead of admitting it.

Perhaps I should just say, “Fine, go and do it”. Your comments are so lacking in detail that I would love to see some to see if you at least had read an article somewhere supporting your position.

I’d like to see how you are going to charge a 85 kwh battery in 5 minutes at 600 volts. Or are we going to charge the battery wirelessly by some technology that hasn’t been developed yet and the current state of the art for cars is 3.3 kw. Your way of accomplishing this would merely be 6 heavy cables. I’d do it in 2, which would be accepted. But then I wouldn’t do it anyway since to me the concept is impractical. 1500 volts is a very practical voltage as proven by the mining industry. I’m sorry but I forgot, you know much more about this than they do, and sometimes they have to operate in conditions other than ‘operating theatre’ cleanliness. Electrodes have low resistance? That’s a minority of the ESR. Hanging your hat on batteries that have only been theoretically demonstrated is only possible when all the developmental work to get the battery manufactured for a decent price. Any stuff I’ve read is far from compelling at this point. My roadster will run just fine on 24,000 supercapacitors. Only problem is I can’t afford them, and the inverter for the car would have to be redesigned to… Read more »

Lensman:

I’ll take 5 of those 600 volt 2000 amp articulated arms for $100 a piece.

Bill Howland said: “I’d like to see how you are going to charge a 85 kwh battery in 5 minutes at 600 volts.” I very specifically said 10 minutes, Bill. But you go ahead and send a letter to JB Straubel telling him it can’t be done. I’m sure he’d enjoy the laugh! Bill Howland continued: “Your way of accomplishing this would merely be 6 heavy cables. I’d do it in 2, which would be accepted. But then I wouldn’t do it anyway since to me the concept is impractical.” Not six cables running from super-fast-charger to EV. Just one jointed, articulated arm. (A copper bar with large cross-section is expensive… aluminum much less so, without that much increase in diameter.) Preferably a robotically controlled arm which automatically deploys and plugs into the car. A cable that thick would be hard to handle. Think of a bus bar with hinges, rather than a cable. Splitting the conductor into multiple smaller cables would happen inside the car, not outside it. It amazes me that people raise such a trivial objection when this subject is discussed. Seriously, you think the real challenge would be to merely install bigger conductors? Have you never… Read more »
OF the 3 articles you mentioned only the Scientific American article had any useful information, and was cautionary to boot: 1). 7500 cycles yes, absolute lifetime measured in elapsed time: unknown. 2). Promising, however 4 times the heft of current products. NONE of these articles talked anything about ESR/or cooling required, which was my point. However, Its silly to keep arguing the point since I already gave the solution using today’s batteries and technology. 5 minute time frame didn’t originate with me, I was using that as the reference to how things would almost certainly transpire if you actually wanted them to work. That’s the kind of imagination I have – ‘what do you have to do to make something work. But you are deflecting again. Actually if you are worried about who is ‘visionary’ and who is not, I stated 5 years ago I thought that 150 kw is the practical economical charging limit for ev’s. In case that is difficult to understand, it means you can charge an electric car at 1000 kw, but I’m uncertain who you would find to pay for it. Now a very large bus company or tram company may decide that overall, 1000… Read more »

Fast-charge at motion – electric cars
https://www.facebook.com/fastchargeatmotion

Charge your empty electric car battery up to its 80% capacity in just 20 minutes while traveling with 100 km/h on a 33 km long special electrified track. Electric car gets electrical energy via a bottom current collector. Electricity is radio controlled, high voltage is switched off if the vehicle speed falls below a certain limit. Interested in more technical details? Check our Photo Gallery – Patent script, Patent drawings and Technology Review.

Sorry my property taxes would be too high to afford the 20 mile long track.

Someone will have to pay Nintendo royalties for coming up with the idea.

As the price of the EV comes down to match the price of the ICE vehicle, the oil pricing makes less of a difference.

Comparing apples to apples.

2015 Focus Titanium: $23,540
2015 Focus Electric: $26,495 – $7500 Tax Credit = $18,995. Or lease for just $226/mo with $871 down.

Now deduct the cost of gas, ICE maintenance, and add the quiet electric ride and instant torque, and who cares what gasoline costs.