STUDY SKEWS EV COSTS

Finding flaws in hybrid-car study
Reader letter, December 23, 2009 (Washington Post)

[Robbie Diamond, president and chief executive, Electrification Coalition:] “The Dec. 18 editorial "Cash for clunkers" referred to -- and relied heavily on -- a recent study by the National Research Council. Unfortunately, several of the assumptions that drove that study's conclusions were flawed. The NRC report assumes battery costs that are far higher than current industry estimates. The coming GM Volt, for example, has reported battery costs of $500 and $625 per kilowatt-hour, significantly less than the NRC's estimate of $875 per kilowatt-hour.”

An independent study suggests battery sales will quickly be high enough to drive economies of scale and create much lower costs than the NRC study found. NewEnergyNews did not report on the NRC study because it seemed skewed in several ways. (click to enlarge)

[Robbie Diamond, president and chief executive, Electrification Coalition:] “Perhaps worse, the report underestimated expected reductions in cost as battery technology continues to improve and economies of scale come into play. The Energy Department reports that a plant capable of producing 100,000 battery packs per year will have costs that are 38 to 44 percent less than a 10,000-unit plant. Yet the NRC seems to ignore these economies of scale. The NRC has done much important work over the years. In this case, however, its assumptions are badly out of line with industry and government estimates, and its conclusions -- and unfortunately, those of the Post editorial that relied on them -- suffer as well.”