BMW Backing Away Rapidly from EV Commitment

This just in from an interview with BMW’s Chief of R&D, Klaus Froehlich, courtesy of Automotive News Europe:

BEV cost more because of the raw materials to make the batteries. This won’t change. Prices could eventually increase as demand for these raw materials rises.

Really, Herr Froelich? The price of batteries will never change? What exactly has it been doing for the last decade. In 2010, a Li-Ion battery pack would set you back about $1200/kWh. Today it is $120-$150/kWh.

Most of the U.S. does not need BEVs.

“Most of the U.S. does not need BMW”. There, I fixed it for you.

Right now a fuel cell powertrain costs about 10 times more than a BEV’s system. We plan to have those costs equalized by 2025 with the third generation of our scalable fuel cell system, which could result in volumes in the hundreds of thousands.

Did Germany legalize hallucinogens? Even if true, hydrogen fuel cell drivetrains are useless without a way to mass produce hydrogen and build tens of thousands of new fueling stations across Europe (at several million a pop). The cheapest way to make H2 is with methane, so that means we still need massive amounts of fossil fuel for transportation, kind of the opposite of the solution we are looking for. Also, HFC drivetrains are only a third to a half as efficient as a BEV, so again, massive amounts of money wasted on a technology vastly inferior to BEVs, and only slightly better than gasoline.

If this 20 year old mentality is what passes for engineering prowess at BMW, the company is heading to the boneyard as fast as its carcinogen-spewing turbo diesels can take it.

MIT sacrifices its reputation at the behest of Oil and Legacy Auto companies

You get what you pay for

In a recent story in MIT Technology Review, we were surprised to read that we should not expect EVs to compete with gasoline cars on price any time before 2030.

The findings sharply contradict those of other research groups, which have concluded that electric vehicles could achieve price parity with gas-powered ones in the next five years. The lingering price difference predicted by the MIT report could stunt the transition to lower-emission vehicles, requiring governments to extend subsides or enact stricter mandates to achieve the same adoption of EVs and cuts in climate pollution.

The most quoted number for lithium-ion battery packs to reach price parity with ICE is $100/kWh, a price that has been predicted to happen by 2022 for the industry based on prices declines over the last decade (the price was about $1200/kWh in 2009).

MIT researchers contested the 2022 price was accurate, claiming they couldn’t be sustained.

The problem is that the steady decline in the cost of lithium-ion batteries, which power electric vehicles and account for about a third of their total cost, is likely to slow in the next few years as they approach limits set by the cost of raw materials.

“If you follow some of these other projections, you basically end up with the cost of batteries being less than the ingredients required to make it,” says Randall Field, executive director of the Mobility of the Future group at MIT. “We see that as a flaw.”

Well, that would be a flaw, but it flies in the face of decades of actual real world experience with high tech commodities. Computer memory for example, went through numerous boom/bust price cycles over the last 50 years, then has become so cheap that you can almost get a flash drive in your corn flakes. Hell, even oil prices have defied this thinking (in the U.S.), with gasoline currently costing about the same as it did in the 70s (adjusted for inflation).

The article then goes on to state that the adoption of EVs is going to be much slower than economists and advocates have predicted, so we are going to have gasoline cars around for at least another decade.

I started to go dig into the logic and research behind these conclusions, but decided to skip all that work, and instead go straight to the report, Insights Into Future Mobility, skipping to page 8 of the 220 page report where researchers thanked the groups who “sponsored” the “research”.

The MIT Energy Initiative gratefully acknowledges the 10 consortium members whose generous sponsorship made this research possible: Alfa, Aramco, BP, Chevron, Equinor, ExxonMobil, Ferrovial, General Motors, Shell, and the Toyota Mobility Foundation.

Representatives from all of these companies engaged with the MITEI team in extensive discussions, providing valuable critique and perspective that helped us sharpen our analysis and improve this report.

Yeah, I bet they did help “sharpen” your analysis. A study paper that basically says, “Never mind EVs, they won’t really be a thing for another 11 years, so keep burning that gasoline in the cars automakers are currently selling”, sponsored by the largest oil companies and the biggest car maker in the world.

No conflict of interest here.

Now adding MIT to my list of unreliable sources.


German Prosecutors Raid Volkswagen Offices in Diesel Probe
Bloomberg News, 12/3/2019

Volkswagen AG offices were raided by German prosecutors as part of a probe into diesel engines, marking a fresh setback for the manufacturer’s efforts to draw a line under an emission-tests cheating scandal that erupted four years ago.

The search was “directed against individual defendants” and related to diesel vehicles with EA288 engines, VW said Tuesday in a statement. VW “proactively disclosed the technical facts underlying the allegations to the responsible investigation authorities and registration authorities at an early stage” and “considers the public prosecutor’s legal opinion and the resulting investigations to be unfounded.”

If true, why have you paid $33 billion in fines over the issue?

Another ominous rumble in the news

German car industry faces ‘day of reckoning’
Financial Times, 11/25/2020

Days later, Mercedes-Benz owner Daimler and Volkswagen’s Audi brand announced more than 20,000 job losses, in the first real signs of the huge human cost of the sector’s transition from combustion engines to electric vehicles.

“The auto industry is in the midst of a far-reaching upheaval,” said Volkswagen chief executive Herbert Diess, whose company is seeking to reinvent itself as a world leader in battery-powered cars.

“No one will survive in the form they exist today,” predicted Ralf Kalmbach at consultancy Bain & Co, who has spent 32 years advising German carmakers.

It is estimated that the German car industry, which directly employs 830,000 people and supports a further 2m in the wider economy, will be forced to plough some €40bn into battery-powered technologies over the next three years.

“In this industry you can only cut jobs in a crisis,” he added. “Deep down, they all know that. They all know they’re going to have to, they are just trying to postpone the day of reckoning.”

When staid, and pro-auto publications like the FT start talking about massive job cuts in Germany’s auto industry, things are looking dire indeed.

Here is the key point of this article, in my opinion:

The market for petrol and diesel engine components will decline at 7 per cent a year, according to a recent McKinsey study.

If the market for ICE is going to decline by “7% a year”, it follows that gasoline/diesel would likewise decline in the EU market. This is an existential crisis for the oil industry in that market. A crisis I expect they will not take lying down.

Ford’s EV plans less than they seem

Ford to cut costs $14 billion, invest in trucks, electric cars: CEO

Ford Motors plans to slash $14 billion in costs over the next five years, Chief Executive Officer Jim Hackett told investors on Tuesday, adding that the No. 2 U.S. automaker would shift capital investment away from sedans and internal combustion engines to develop more trucks and electric and hybrid cars.

By 2022, Ford plans to cut spending on future internal combustion engines by a third, or about $500 million, putting that money instead into expanded electric and hybrid vehicle development, on top of $4.5 billion previously announced. Ford had already promised 13 new electric or hybrid vehicles within the next five years.

Right, this looks good on paper (or on photons if you prefer), but it is a bit misleading and somewhat contradictory. Moving 1/3 of your spending from ICE to EV is nice, but you are still investing a lot of money in polluting vehicles (and I doubt they will be discontinuing their pickups and SUVs anytime soon. But hey, I’ll take what I can get). But, I am puzzled about how you can develop “13 new electric or hybrid vehicles within the next five years” and cut $14 billion in costs. Designing and building new vehicles takes a LOT of money. Perhaps he thinks he can just take gasoline cars and stick electric motors in them. If so, he will soon learn that it’s a bit more complicated. Sure, you can do that, but you wind up with a car with lackluster range and performance (like the Ford Focus EV).

Also, are these cars for the U.S. market, or the Chinese market? He doesn’t specify.

He did have two ways of saving money that made sense.

One way to cut costs will be to offer fewer variations of Ford’s models, Hackett said. The slow-selling Ford Fusion midsize sedan can now be ordered in 35,000 combinations of features, colors and powertrain options. The future model will come in just 96 combinations, meaning fewer parts to design, produce and store in inventory, Ford showed in a presentation.

He said Ford also will cut the time it takes to engineer a new car by 20 percent, and invest in “factories of the future” that will occupy less space and use more robots.

Golly, he sounds just like Elon Musk.