The Fuse

For EV Manufacturers, 200 is the Magic Number in More Ways than One

by R. Kress | July 09, 2015

Electric vehicles are a young technology holding the promise of personal transportation without oil. However, after four years of commercial availability, they still represent less than one percent of total automotive sales in the United States. Somewhat sluggish sales figures are easy to explain: In the technology’s current state, it does not always offer range and cost parity with conventional vehicles.

A 2014 survey from the Center for Sustainable Energy offers insight into what has motivated early adopters thus far. The study found that California EV owners embraced the technology because of three main factors: A desire to drive a more environmentally friendly vehicle, cost savings (through purchase incentives and lower fuel costs), and access to HOV lanes in the notoriously congested Golden State.

While these benefits are enough to entice a certain segment of consumers, if the technology is to become truly mainstream, automakers will have to find a way to improve performance while lowering costs. Even though electric vehicles offer savings when it comes to total cost of ownership in many circumstances, higher up-front prices still prove a deterrent to many potential buyers. The fact that many car shoppers don’t understand applicable state and federal tax incentives, or have a strong understanding of long-term fuel savings, presents an additional barrier.

Costs aside, perhaps the greatest downside for potential EV drivers is “range anxiety,” or limitations on how far one can drive between each charge. Right now, most conventional gasoline cars can travel around 350 miles before depleting a full tank of gas. Some hybrid cars can extend that range to closer to 650 miles between refills. But most of the pure electric vehicles on the market today will reach a maximum of 100 miles per charge. The notable exception to this rule is the Tesla Model S, which pulls closer to 250 miles between charges, but comes at a higher price point.

An arms race of sorts has emerged among EV manufacturers to cure range anxiety while eliminating a price barrier.

To address these challenges, an arms race of sorts has emerged among EV manufacturers to cure range anxiety while eliminating a price barrier. Specifically, automakers are targeting a comfortable range of 200 miles in a vehicle that retails for $30,000.

Soon, EVs will offer more for less

In a press conference to address range anxiety earlier this year, Tesla CEO Elon Musk made the 200 mile goal clear: “200 miles is the minimum threshold for an electric car. We need 200 plus miles in real world—not 200 miles in ‘air conditioner off, driving on flat road’ mode…Anything below 200 miles isn’t passing grade. Most people are looking for 20 percent more than that.”

Come 2017, Tesla expects to launch the Model 3 range of its EVs at a price point around $35,000: A much more affordable level than its current offerings. The stated goal is to achieve the range of 200 to 250 miles per charge. GM also answered the call to resolve EV range anxiety by introducing the Bolt at the Detroit auto show earlier this year with an expected $30,000 starting price once it hits the commercial market. The Bolt would also meet the coveted 200-mile per charge threshold. Ford Motor Company is also fighting to compete, having announced that it will also introduce a 200 mile range electric vehicle this year, although details are scarce so far. Meanwhile, in the ongoing game of one-upmanship between Toyota and Tesla, the Japanese automaker’s hydrogen fuel cell, the Mirai, is boasting a 312-mile range.

Lux reports that for most OEMs, lithium-ion battery packs cost about $400/kWh to $500/kWh. That will need to drop to below $300 /kWh if the 200 mile, $30k electric vehicle is to become a reality.

According to Lux Research, this balance of extended range and lower price will open up new markets for electric vehicle manufacturers. Early models were focused in either the luxury or economy segments, which has created an under-served middle ground. Tapping this market won’t be easy: Automakers must double vehicle range without increasing price. Of course, the trick to achieving this is lower battery costs, and Lux reports that for most OEMs, lithium-ion battery packs cost about $400/kWh to $500/kWh. That will need to drop to below $300 /kWh if the 200 mile, $30k electric vehicle is to become a reality. However, in Lux’s analysis, battery manufacturers including Bosch, LG Chem Power, and Tesla-Panasonic (through the Gigafactory) are both willing and able to achieve this step-change.


New opportunities to thrill drivers

Looking past range, 200 has become the magic number for EVs in another capacity—a top speed of 200 miles per hour is another goal the industry is striving to achieve, as OEMs look for ways to add value and broaden appeal.

“EVs are going to be very important to the next generation of performance consumer vehicles,” Levi Tillemann tells the Fuse. The author of The Great Race: The Global Quest for the Car of the Future explains that performance cannot be overlooked, even with EVs, and not just for consumer enjoyment. Fuel economy standards are becoming increasingly strict across the board. In order to meet consumer expectations in intensely gas-reliant cars, electric power will be necessary. “You can’t get that performance aspect paired with the emissions regulations that are going to be required without some degree of electrification.”

Right now, the race is also on for an electric vehicle that can hit speeds above 200 miles per hour.

That’s why right now, the race is also on for an electric vehicle that can hit speeds above 200 miles per hour. As likely impractical as that speed may seem, it is currently within the realm of possibility for an EV. In 2014, students at Brigham Young University managed to set a new land speed record for an electric car, racing their so-called Electric Blue into history at an average of 204.9 mph.

According to Tillemann, EVs are already well on their way in terms of performance.

“The EVs do very well off the block but in a longer run, they start to lose ground to the more traditional sports cars. So you can put a Tesla against a Lamborghini and it will smoke it for about 500 meters. But once you get to the quarter mile mark, Tesla is in the rearview mirror,” Tillemann says. “The truth is the advent of performance electric vehicles has been enormously important for changing the perception of the sector. One thing that owners of the Tesla Model S like to do is take them to drag strips and race them against these huge American gas-guzzling muscle cars. And the incredible thing is that they win.”

He also acknowledges that such extreme upper speed limits are generally not necessary, but can broaden the appeal to automotive enthusiasts who might otherwise overlook electric vehicles. Ultimately, the American love affair with the car is one that needs to be addressed by the EV industry: If it’s not fun to drive, it will be hard to spur widespread adoption.

“Honestly, I think it’s a silly thing to build a car that goes north of 200 miles an hour,” Tillemann concedes. “It’s unnecessary but in the same way, it’s important for changing the way Americans view EVs. It’s not just a win from the environmental standpoint but it can also help them win on the track.”