Saturday, May 25, 2013

EV Options For the Future

Tesla has paid off their DOE loan early and their stock is just jumping off the page. Elon Musk who is known for making some pretty brash statements about what his companies can do and so far, he has pretty much accomplished it.

He also stated that Tesla will have a 200+ mile range family car for $30,000 within a few years to address mainstream needs. But one thing he has struggled with is meeting his timetable and  EVERY manufacturer has struggled with that as well and there are some questions as to how his calculator will come up with that $30,000 figure. Either way, I think investor confidence is a sure sign that Musk's statements have been re-categorized from "delusional" to "prescient"  which has no doubt, ratcheted up the pressure for the much slower legacy car companies to get products out to compete.

And we are not helping. Unlike normal cars, EV'ers are much more hungrier for details and we also collectively seem to have a limited amount of patience for waiting. This seems to have worked against us a tiny bit.  When statements do come out, we dissect every word searching for a the "hidden agenda" like its some sort of puzzle or scavenger hunt we are playing.  When the "actions don't match the words" we EV'ers tend to react like 5-year olds who has to clean their room before they can go out and play. IOW, not good. This might lead to companies being much more guarded about statements and attempting to get more of their ducks in a row before saying anything which means no incremental informational tidbits to digest. 

So, as we wait for Tesla, Nissan and Ecotality to make good on their word (some within 4 weeks...) concerning future developments in the EV World, it might be time to make some more predictions.

Nissan has made the most changes in the 3 model years of the LEAF but its been on the road the longest and lets face it. Just about all the changes fall into the "that is how it should have been done in the first place" category.  Now Nissan knows that there are several things that needs to be addressed in order for EVs to be successful and the 3 key issues are price, range and public charging.

Because of slow initial rollout of effective public charging, Nissan has given a boost with their announcement to put in 500-600 fast chargers at dealerships thru out the country. Hopefully this will include chargers at other locations to allow a better chance at 24 hour access. 

Nissan has also cut the price by introducing an entry level "S" model so now comes the range. I think the price cutting is only the beginning of the price reductions we will see and I guess the only real question is when and where do the range increases come in.

First off, I think the price reductions will continue as long as a few key metrics are reached.

1) Nissan completes its ramp up in Smyrna. Although Nissan has not said a word about it, it would appear the line is still getting up to speed. Reports of shortages of the LEAF are popping up all over the country and I don't think its unexpected demand more so than just not being able to get enough out right away due to a longer than anticipated ramp up and that is to be expected. It is a new product for Tennessee and one that will need to undergo many continuous changes for the near future.

2) The battery plant reaches its goals on production and quality. The battery building process takes a considerable amount of time and the ultimate results will not be known until the batches are completed. Just like any process that requires the level of exactness and consistency, even minute changes in the process can create drastic (and usually detrimental) changes in the finished product. It will take time to identify those issues and resolve them and this could be where the current bottleneck is located.

3) Sales continue to accelerate. Each EV on the road means direct exposure to dozens more people. The LEAF has had one of its 2 best sales months ever but I feel that they are still less than half of where they need to be to take the next step and that next step is another round of price cuts along with battery pack options for 2014.  Sales of 4,000-5,000 a month should be the incentive Nissan needs to accelerate the introduction of the larger pack.

Now, there has been a lot of discussion about when the next pack innovation will arrive and what it will do to pricing.  Its my opinion that Nissan needs to keep the pricing where its at now at the top end AFTER adding the extra range options for those who need it.  The other question is how much more can the LEAF take as far as pack size.  Introducing pack options now would limit the size of the pack but one that offers a real 100 mile freeway range is what Nissan really needs to make happen and waiting for battery innovations is going to be a mistake.  So look for a pack no bigger than 30-32 Kwh hours which should give the LEAF a range of 105-110 miles.  Do that as an option for 2014 at a few thousand bucks and Nissan will be flying high!

Murphy's Law says as soon as I post something, I will hear about something that needs to be added here and less than 2 hours after I posted, sure enough. news from Kia on their first EV and it does seem to fit the bill for range boasting a 200 Km range which hoping that means a real 110ish mile freeway range (200 km = 125 miles) with a starting price of just over $35,000 that is probably going to be a bit more than I think is best (probably near $40,000 for the options most would want)  with no mention of QC options and until we can determine what the true real world range is, we just have to take a wait and see attitude but still the options are really starting to pop and even at $40,000 before incentives, if the Kia Soul EV gets a real 125 miles of range, it will find a market

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