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Rechargeable battery trade group head talks viability, cost of hybrids and electric vehicles

With hybrids and electric vehicles making up only a small fraction of the U.S. car market, how will the automobile and electric drive industries overcome the public acceptance and cost issues associated with these technologies? During today's OnPoint, George Kerchner, executive director of the Portable Rechargeable Battery Association, discusses regulatory hurdles that need to be overcome in order to help make electric vehicles more viable. Kerchner discusses the effect increased use of electric vehicles could have on the grid and explains what kinds of incentives, he believes, should be in place to promote these technologies.

Transcript

Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is George Kerchner, executive director of the Portable Rechargeable Battery Association. George, thanks for coming on the show.

George Kerchner: Thank you for having me.

Monica Trauzzi: George, I'd like to start off by having you briefly introduce your organization and some of the member companies.

George Kerchner: OK. PRBA represents the major manufacturers of lithium-ion batteries, nickel cadmium batteries, nickel metal hydride, nickel metal hydride rechargeable batteries, also the manufacturers of products that are powered by rechargeable batteries. Some of our major members are A123Systems, Sony, Sanyo, Panasonic, Black & Decker, Motorola, Dell. And we've been representing these companies through the trade association for over 17 years now.

Monica Trauzzi: So, it's widely thought that lithium-ion batteries are sort of the next generation of batteries that will be used in electric vehicles. How far are we from having commercially viable electric vehicles using these lithium-ion batteries? There are some concerns about cost, there's some concerns about safety, how far away are we from implementing this?

George Kerchner: Well, I think it's important to recognize you've got hybrid electric vehicles, as well as electric vehicles. And I think within two years you're going to start seeing those vehicles on the road, the hybrid as well as the electric vehicles on the road. So, I think we're very close to seeing them in the marketplace and being used by consumers.

Monica Trauzzi: But one of the problems with lithium-ion batteries is that they have short life cycles. How do we address that?

George Kerchner: Actually, the technology being looked at for hybrid and electric vehicles is a little bit different than the ones that are being used for your portable electronic equipment. And so, therefore, they are addressing those lifecycle issues for the large-format batteries.

Monica Trauzzi: I think it's Tesla, they have several batteries that sort of can be swapped out if there's an issue.

George Kerchner: Well, that's true. I mean the Tesla Motors is a good example. I mean they build their batteries from cells. Those cells are then put into modules and those modules are put into a battery assembly. And then some modules can be switched out if there's a problem with a particular module.

Monica Trauzzi: Electric vehicles and even hybrids represent only a small fraction of the American car market and EVs have sort of been the redheaded stepchild in the United States. How do you overcome the public acceptance issues that are linked to electric vehicles?

George Kerchner: Well, that's a good question. In fact, with gas hovering at four dollars a gallon and it seems to be going up each day, with a lot of pressure to produce greener vehicles, reduce our carbon footprint, I think the population, as a whole, is ready for hybrid vehicles and electric vehicles. The cost has come down. As production increases you'll see a decrease in the cost of the batteries and I think there will be a general acceptance by the public for these vehicles.

Monica Trauzzi: So, what are some of the regulatory issues that you feel need to be addressed in order for lithium-ion batteries to be more broadly developed and more widely used?

George Kerchner: Well, one of the big issues that PRBA is working on right now deals with the transportation regulations for these batteries. Just a little bit of background is in order here. Lithium batteries are regulated as hazardous materials by the U.S. Department of Transportation, as well as several international organizations. And before you offer a lithium battery for transportation, those batteries are subject to very stringent testing requirements. Some people consider those safety testing requirements. Those tests have not been updated for 10 years and they were originally developed for very small lithium batteries for portable applications. So, they're not well-suited for these large batteries that are being designed for hybrid electric vehicles. But the big regulatory issue for PRBA is getting those testing requirements changed. We have a proposal at the United Nations, where these issues are addressed, which will come up the first week of July.

Monica Trauzzi: And so, at this point, you're running into some issues in transporting these batteries? Are you ...

George Kerchner: Testing and transporting.

Monica Trauzzi: OK.

George Kerchner: Right.

Monica Trauzzi: OK.

George Kerchner: So, again, in order to offer these for transportation you first need to run this series of tests.

Monica Trauzzi: Over the next decade, what role do you see electric vehicles playing? How do you see the storyline playing out?

George Kerchner: Well, I think you're going to see the first step is going to be the hybrid and the plug-in hybrid electric vehicles. I mean, certainly, electric vehicles can play a major role for consumers. I mean the lithium-ion technology really is a paradigm shifting technology. There's a lot going on in research. The technology is maturing and I think it's very feasible to see lithium-ion batteries powering electric vehicles, plug-in electric vehicles, and hybrid electric vehicles within the next five years.

Monica Trauzzi: I wanted to go back and touch on the safety concerns again, because there have been many reports in the mainstream media about these batteries blowing up, catching fire. Is that true? Is that being worked on? Where does that stand at this point?

George Kerchner: Well, it's important to recognize that this year there will be 3 billion lithium-ion cells manufactured in the world. Lithium-ion is a safe technology. I mean it's used in your cell phones, your notebook computers, your MP3 players, the list goes on and on. And so in terms of safety, I mean the automobile manufacturers, the battery manufacturers always, obviously, take safety as their number one concern. And I know they're addressing those issues for the hybrid vehicles as well as the electric vehicles.

Monica Trauzzi: So, because these are electric vehicles and they're pulling electricity from the grid and a lot of that electricity comes from coal-fired power plants, are we really reducing the carbon footprint here?

George Kerchner: Oh, I would believe so. I mean compared to the emissions from gas powered vehicles I think you significantly reduce that carbon footprint. If you're using an electric vehicle or a hybrid electric vehicle, I think the payoff is certainly there.

Monica Trauzzi: And do you think it would be too much stress on the electric grid if this became a very viable technology and many Americans went out and bought these vehicles?

George Kerchner: No, I don't. No, I would think that ... I don't.

Monica Trauzzi: So, in terms of incentives, should the government be incentivizing the production and the purchase of electric vehicles?

George Kerchner: Oh, I believe so. I mean if there's any - the advantage to reducing our dependency on fossil fuels and to reduce greenhouse emissions, if there's an incentive through legislation I think that's an excellent idea.

Monica Trauzzi: Is there a link between the price of oil and gas and the price of batteries? Are we going to sort of see the two separating, more of a difference between the two?

George Kerchner: Well, I think as you see more batteries being manufactured, the large batteries for the hybrid electric vehicles and electric vehicles, you'll see the price of the batteries go down significantly. So I think there will be that chip there.

Monica Trauzzi: OK. We're going to end it right there on that note.

George Kerchner: OK, great.

Monica Trauzzi: Thanks for coming on the show.

George Kerchner: You bet, thank you.

Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.

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