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PHEVs Emerge as Nearest Technology in Long-Awaited ZEV Tech Review by Air Resources Board of CA
Apr 23, 2007 (From the CalCars-News archive)
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We're very backlogged on sending out news, will work to catch up this week! Here's the most important news: reports from the California Air Resources Board now point the way forward to getting large demonstration fleets of PHEVs, and for meeting ARB's new programmatic responsibilities for Low Carbon Fuel Standards and implementation of the Global Warming Solutions Act.

Way back in 2003, the ARB said it would take a fresh look at the options available in reviewing its Zero Emission Vehicles Mandate (the guidelines that are the backdrop for the story presented in "Who Killed the Electric Car?"). When we testified about the implementation of the Pavley Bill in 2004, suggesting that PHEVs could provide a 60% reduction in new-car CO2 emissions in two years, instead of the goal of 30% by 2016, Board Members agreed it was time to take another look at PHEVs.

The Board appointed an expert panel, and that panel received testimony last fall. (At http://www.calcars.org/­news-archive.html, see our summaries, including: 10/05/06: Progress or Breakthroughs at California Symposium on Zero Emission Vehicles 09/29/06: Experiences of 2 PHEV Early Drivers: Testimony to Air Resources Board ZEV Technology Symposium

Now at http://www.arb.ca.gov/­msprog/­zevprog/­zevreview/­zevreview.htm you can download the long-awaited 207-page Air Resources Board ZEV Expert Panel report (1.4MB), its 12-page summary, and the 27-page ZEV Staff Recommendations.

The bottom line from the expert panel, after evaluating the status of battery technology and meeting with automakers and component suppliers, is found in the panel's expected timetable to commercialization. Here's part of the Projected Achievement of Global Volumes chart that appears in all 3 reports (in color on p.7 of the staff report), showing PHEVs as the vehicle type that will progress fastest (after hybrids that are already in mass production):

Low-Volume Commercialization (10,000s/year):
PHEVs: 2012
EVs: 2015
Fuel Cell: 2020

Mass Commercialization (100,000s/year)
PHEVs: 2015
EVs: 2030
Fuel Cell: 2025


It will take all of us some time to digest and discuss the study, but here are a few broad comments:

  • PHEV timetables could accelerate further, especially if CalCars and all the other advocates of PHEVs do our job!
  • For PHEVs, the chart projects volumes for "Demo" ((100s/year) starting in 2008-2010, and "Pre-Commercial" (1,000s/year) in 2010. Yet we read these projections in a report that agrees with car-makers that "perfect" batteries are not yet available. How do we reconcile these two perspectives? As you will see in our excerpts below (especially page 169), the expert panel recognizes an urgent need to for "real-world experience" to enable all the interested parties to agree on definitions and standards about PHEVs. The way to do this is to get substantial demonstration fleets on the road ASAP -- version 1.0 PHEVs with "good enough" batteries! California has the opportunity to be creative and pro-active. We hope Board Members and staff who connect the dots will get to work on ways to incentivize car-makers to build and deliver sizeable demonstration fleets as soon as possible. (The Board meets to review the reports May 24-25 in San Diego, and a significant turnout among PHEV and EV advocates is likely.)
  • The report confirms that today's proven nickel-metal hydride batteries could power PHEVs and EVs, but confirms that auto-makers aren't interested in using them.
  • We expect that the time will soon show that the projections for full-electric vehicles are also overly extended.
  • Given the obstacles to hydrogen and fuel cells described in the report, we see the level of detail presented on these issues (far greater than for other technologies throughout the report), as indicative of the difficulty the ARB faces in evolving from its previous expectations that hydrogen would far more than a long-term goal.

For early media analyses and comments, see: http://www.greencarcongress.com/­2007/­04/­arb_expert_zev_.html http://www.evworld.com/­article.cfm?storyid=1234


EXCERPTS FROM REPORTS
Below are some sections we think are most significant, though we encourage you to read the entire report and staff recommendations! (FPBEV is an acronym for Full-Power Battery Electric Vehicles, as distinguished from NEVs and CEVs (neighborhood/city):

In the expert panel report, not to overlook the important sections on a whole range of topics, here are the main sections on PHEVs: pp. 3-5, 10 summarize findings on batteries and PHEVs pp. 161-170 are the main PHEV section pp. 196-198 discuss small-format batteries in PHEV conversions and full electric vehicles


EXPERT PANEL REPORT PAGES 3 -5
Medium power/medium energy NiMH technology has promise to meet the technical requirements for PHEVs with relatively short (e.g., 10-20 miles) nominal electric range. It is the conclusion of the Panel that in mass production, medium power/medium energy NiMH technology's incremental cost over that of HEV batteries, estimated to be about $800-1,200, is probably less than the difference in lifetime fuel costs. However, no substantial efforts to develop or capabilities to fabricate medium power NiMH technology appear to exist.

Medium energy/power Li Ion technology has sufficient performance for PHEVS and small FPBEVs, and it can be expected to meet the life requirements for FPBEVs, in the view of the Panel. Recent test results indicate good potential to also deliver the very demanding cycle life for PHEVs. The projected costs for shorter range PHEV Li Ion batteries are about $3500-4000 in mass production; this is generally less than the fuel cost savings expected over the life of the vehicle. Low volume cell production and prototype battery fabrication is underway in Asia and Europe, and limited fleet demonstrations are underway or planned.

Batteries assembled from large numbers (typically, 5,000 or more) of small, high energy Li Ion cells mass-manufactured for laptop computers and other electronic applications are now being used in FPBEVs (and PHEVs) fabricated on a small scale. It is the conclusion of the Panel, however, that such small-cell batteries, although providing early opportunities to demonstrate the technical capabilities of PHEV conversions and modern FPBEVs, have inherently high costs and uncertain calendar and cycle life.

The major impediment to engagement in developing Li Ion batteries for PHEVs appears to be that the PHEV battery requirements are insufficiently defined at this time.

The prospects of PHEVs also were judged negatively by most major automobile manufactures until recently. However, several manufacturers are now active in modeling, designing and evaluating various PHEV architectures and technologies, with consequent attention to candidate battery technologies and their prospects. In the U.S., an effort sponsored by DOE and supported by USABC is now underway with automobile industry expert participation to establish PHEV battery performance, life and cost targets for a planned Research and Development (R&D) program. In Japan the New Energy and Industrial Technology Development Organization (NEDO) is launching an initiative to develop PHEV batteries with the involvement of leading Li Ion battery developers. These initiatives and automobile manufacturers' initiatives such as GM's recently announced plans to offer a PHEV version of the Saturn VUE HEV and to launch the "Volt" PHEV if suitable Li Ion batteries become available are the signals needed by the major battery manufacturers to become engaged with their own resources in the development and manufacture of batteries for PHEVs.

PAGE 10
PHEVs have no expected customer compromises while promising several benefits to customers and society. The relatively small battery capacity can be fully used daily for maximum customer fuel savings payback of the initial vehicle premium.

Recently, some OEMs have become interested in PHEVs, and GM and Ford have shown concept PHEVs at recent auto shows and other events - which is attracting major media attention and establishing high consumer expectations.

However, definitions and fuel economy/emissions testing standards do not yet exist and need to be agreed upon. Also, All Electric Range (AER) could have a major impact on manufacturing cost, as well as capital investment requirements if unique and more powerful electric drive systems are necessary, and therefore AER could have a significant impact on the early success of the technology.

Despite the fact that recent auto show PHEVs appeared to require new platforms, it may be more likely that OEMs will want to derive early PHEVs from existing HEVs in order to minimize capital investment and the associated business risk. For the same reason, blended AER, as opposed to EV mode, may be more likely in early products.

It is the Panel's opinion that PHEVs have the potential to provide significant direct societal benefits and are likely to become available in the near future. They may foster future mass market BEVs by stimulating energy battery development and conditioning mass market customers to accept plugging in.

PAGE 12
As a long term ZEV outcome, the Panel can envision plug-in hybrid FCEVs, powered by sustainable electricity for shorter trips and sustainable hydrogen for longer trips.

PAGE 161
From the customer's perspective, a plug-in hybrid electric vehicle (PHEV) combines all the benefits of a BEV with all the benefits of a HEV. Compared to a HEV, a PHEV adds the capability to connect the vehicle to the electric grid while parked and charge an energy battery, similar to a BEV. It then depletes this stored energy during driving to displace the use of ICE fuel. The attributes of a PHEV could make it attractive to the mass-market customer - like BEVs, they can reduce fuel cost and be refueled at home, and like HEVs they can be used for long trips, they can be refueled quickly when necessary and "plugging in" is not required to operate the vehicle. Compared to a HEV, they provide reduced exhaust emissions, fuel consumption and CO2 production.

PAGE 165
Agreed upon definitions and standards for testing emissions and fuel economy of PHEVs are likely to be complicated and do not yet exist. Ideally they will maximize commonality with existing standards and will need to be established before serious design and development of PHEVs can begin. In addition to modeling efforts underway, manufacturers will need to deploy PHEV demonstration fleets with a variety of operational characteristics to gather real world onroad customer data in order to provide meaningful input to proposed definitions and standards prior to being finalized. Furthermore, truly representative battery cycle life testing, which takes a long time to conduct, cannot be started until agreement is reached on definitions and standards for PHEVs.

PAGE 166
The Panel expects customer interest and acceptance of a PHEV to be good. Depending on the final label methodology, high fuel economy numbers are likely to get mass-market customer's attention, and this could be particularly effective coupled with the significant 2008 MY reductions in label values. Fuel costs can be reduced by plugging into the grid, and unlike FPBEVs, the vehicle does not have range issues and does not need to be plugged into the grid to be able to operate. Customers can also have the satisfaction of knowing they are helping to reduce exhaust emissions, petroleum consumption and the creation of CO2. Other advantages are fewer trips to the service station, and if the vehicle has EV mode, quiet electric drive and the security of being able to do some limited driving during a fuel shortage. Ultimately, however, vehicle price will be a major factor in establishing mass-market customer appeal and therefore market success of the PHEV.

...the incremental cost of the PHEV at these volumes is therefore about $3,100. Assuming no additional profit mark up from the OEM to recover incremental development, warranty, and marketing costs, the customer payback would be about 6+ years. The payback is highly sensitive to the price of gasoline; at $2/gallon the payback period increases to 12+ years, and at $4/gallon it declines to 4+ years.

PAGE 167
Average customers will need to be educated on how a PHEV differs from a HEV and many are likely to be confused for a while. Communications efforts by manufacturers to convince potential HEV customers that HEVs do not need to be plugged in will be complicated by the existence of PHEVs.

PAGE 169
Given the rapid success and increasing mass-market awareness of HEVs, the high level of national publicity about PHEVs, recent auto show PHEV concept and prototype vehicle announcements, and the need for OEMs to gain real world fleet experience in order to participate effectively in PHEV standards development, the Panel projects that demonstration level volume (100's/year) could be on the road within the next 5 years. A key requirement to enable successful introduction of PHEVs are definitions and standards developed through a formal process and consensus among the key stakeholders. Some manufacturers may introduce expensive and/or limited numbers of PHEVs within the next 5 to 10 years, probably as marketing or public relations initiatives. When a battery becomes available that is technically capable for the intended application and the purchase price is low enough, or gasoline prices rise significantly, or some combination of the two, mass commercialization (100,000's/year) is likely to be achieved within five years thereafter. Until then, however, volumes of PHEVs will not progress beyond the level of pre-commercialization (1,000s/year) or, at most, early commercialization (10,000s/year).

PAGE 177
The Panel's projection is that PHEVs with modest energy storage capacity will be derived from HEVs and will proliferate rapidly, stimulating further development and cost reduction of energy batteries and leading to commercially viable PHEVs and, in the longer term, FPBEVs. While PHEVs will continue to grow rapidly, as they have no functional limitations, FPBEVs will grow more slowly due to customer acceptance of limited range and long recharge time.

STAFF REPORT
PAGE 9
The Panel found that plug-in hybrid electric vehicles offer direct societal benefits to the consumer and are likely to become commercially available in the near future. The incremental cost of the small battery pack should be offset by the lower operating cost of the technology. The major technical issue with PHEVs is the ability of the energy battery to endure the large number of deep cycles the battery must deliver over the life of the vehicle. The number of deep cycles is substantially higher for PHEVs than FPBEVs and thus represents a new dimension in deep cycling requirements. Battery cycle life for PHEVs is not completely know at this time. The Panel also found that test procedures to accurately determine emissions and efficiency do not exist and need to be developed. Also, the cost impact of greater electric range is not well understood and could have a significant impact on consumer acceptance. The Panel concludes that commercialization of plug-in hybrid electric vehicles will stimulate battery development and help consumers become comfortable with plugging in a vehicle.

PAGES 17-18
Issue: The question of how to treat plug-in hybrid electric vehicles (PHEVs) was a controversial topic during the 2003 amendments and remains so today. The Board was asked to classify PHEVs as "gold" as they appeared to have greater chance for near term commercial viability considering the smaller battery pack, unlimited range and limited infrastructure needs. However, the Board said no, gold means zero emissions. Instead, the Board directed staff to create sufficient regulatory incentive outside of the gold category to encourage introduction of PHEVs. One of the toughest questions the Board asked the manufacturers as they testified at the 2003 hearings was "why don't you produce a plug-in hybrid vehicle?" Coming into this technology review, with still no PHEV from a major manufacturer, staff asked the Panel to help staff to assess what more could be done to further support PHEV.

Current Treatment in the Regulation: PHEVs earn silver credit that ranges from 10.8 to 18 depending on the amount of all electric range. This compares to a conventional hybrid that earns a credit of up to 0.7. PHEVs produced after 2009 may earn up to 4 credits each and after 2012 three credits each. Certification test procedures for PHEVs need revisions to better reflect current design approaches to PHEVs. When the initial certification procedures were adopted staff anticipated that PHEVs would be designed to operate in an all electric mode until the battery pack was exhausted. Instead, manufacturers are designing fully integrated PHEVs where the battery and gasoline engine operate intermittently or simultaneously (blended) throughout typical driving. Currently, the regulation invites manufacturers to present an alternative certification calculation method for approval of their PHEV system.

Panel Findings: The Expert Panel concludes that PHEVs have the potential to provide significant direct benefits and to foster future mass market ZEVs by stimulating battery development and conditioning mass market customers to accept plugging in. Several major manufacturers are showing a new interest in the technology and have recently announced PHEV development activities and timeframes for selling them to the public. PHEVs have the potential to achieve significant electric drive use. The technology may be very close to technical and economic feasibility and ready for mass market introduction by 2015. The Panel concluded that the significant issue that must be addressed before commercialization can take place is the cycle life of batteries used in PHEVs which may experience more deep cycles than full function BEVs.

Staff findings and recommendations: While interest in and technical promise for PHEVs is at an all time high, the fundamental question remains; should PHEVs count toward meeting pure ZEV requirements? Staff recommends against allowing PHEVs to be used in the gold category. This recommendation is based on the original concern that PHEVs are not zero emission. Additionally, uncertainty exists regarding how PHEVs will be used (will they be plugged in consistently and throughout their life? Will all electric range be maximized under a wide variety of driving cycles? etc.).

As examples of PHEVs are demonstrated it is clear that multiple approaches are under development that could have very different impacts on air quality. Traditionally, we have thought of plug-in hybrids as range extended battery electric vehicles or electric vehicles with an engine that could recharge the battery if/when needed. However, PHEVs being discussed today have more of a blended approach to using the battery pack. Like a conventional hybrid, the battery is used off and on throughout the driving cycle to assist the engine or drive in an all electric mode. Staff needs to learn more about how these blended PHEV strategies would be implemented and how they might impact air quality before recommending how they be treated in the ZEV regulation. For these reasons, staff does not recommend opening up the pure ZEV category as an incentive to bring PHEVs to market.

Staff does believe, however, that there are good reasons why manufacturers will produce PHEVs and there are adjustments to the regulation that could be explored that would facilitate this. The gold category is challenging for manufacturers, but as the percentage of the overall obligation that can be met by silver category vehicles increases, significant pressure builds on manufacturers to produce large numbers of "conventional" AT PZEVs. This pressure would make production of a high scoring silver vehicle increasingly attractive. Figure 6.3 illustrates an example of how use of PHEVs with 20 miles all-electric range to meet one half of the credits from the AT PZEV category can significantly reduce the overall number of AT PZEVs needed while creating a market for PHEVs.

Full documents and profile of Expert Panel Members at http://www.arb.ca.gov/­msprog/­zevprog/­zevreview/­zevreview.htm.

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