What the somersaults in automotive industry mean for Colorado’s EV goals

by Allen Best

Were there virtual high-5s among Colorado’s architects of decarbonization?

Surely there were in the wake of the announcement by General Motors that it was shifting its production and sales from the internal combustion engine to electric vehicles in the next 15 years.

Ford Motors followed up late last week that it was doubling its investment in EVs by 2025. “We’re not going to cede the future to anyone,” Jim Farley, the chief executive of Ford, told CNBC.

This should make it far easier for Colorado to achieve its goal of 42% penetration of the automotive fleet by 2030. That goal, announced soon after Gov. Jared Polis took office in 2019, calls for 940,000 EVs by 2030.

Asked for comment after GM’s announcement, Will Toor, executive director of the Colorado Energy Office, agreed that it is “very good news for Colorado’s EV goals, and we look forward to working with GM and other automakers to transition to a fully electric fleet.” GM was, he noted, the first major automaker, beyond the EV-only companies like Tesla and Rivian, to announce EV plans that match the scale of changes needed to confront the climate crisis.

This is from Big Pivots, an e-magazine tracking the energy and water transitions in Colorado and beyond. Subscribe at bigpivots.com

The GM announcement was part of a broader somersault by the automotive sector since the November election of President Joe Biden.

The short story is that Trump lost, of course, and California won—and so did Colorado.

Some history: California by virtue of a ruling in the 1990s had the authority to set stricter emissions standards for vehicles than those imposed on automakers by the EPA.

The Obama administration adopted pollution rules that were modeled on those adopted by California. The California and Obama rules required auto companies to make and sell vehicles that reached an average fuel economy of about 54.5 miles per gallon by 2025. It was, says the New York Times, the most salient effort by the Obama administration to reduce emissions of greenhouse gases.

Arriving in the White House, Donald Trump set out to roll back those standards, the centerpiece of his deregulatory agenda. The Trump administration last year rolled the standard back to 40 miles per gallon by 2026.

Meanwhile, Colorado in 2019 joined the coalition of California and 12 other states requiring zero-emission vehicle regulations.

Within the automotive industry, some automakers—including General Motors and Toyota—sided with the Trump administration rollback. They filed suit against California. But five automakers—Ford, Honda, BMW, Volkswagen, and Volvo, together with 30% of the market in California—had agreed last August to abide by California’s standards. The agreement required them to increase their average fuel economy from about 38 mpg to about 51 mph by 2026.

Last week, Toyota, Fiat Chrysler, and others who had banded together under the name of Coalition for Sustainable Automotive Regulation dropped the lawsuit.

This comes after the Alliance for Automotive Innovation, which includes 99% of automakers, offered principles for a national program of clean car standards and a long-term focus on electric vehicles.

The decision to drop the lawsuit was described by Travis Madsen, the transportation program director at the Southwest Energy Efficiency Project, as important for Colorado as the clean-car standards are a “central part of Colorado’s strategy to accelerate vehicle electrification and deliver on our climate goals, and it will be important to have all automakers moving in the same direction.”

Polis, in a statement, had much the same to say.

“We are also encouraged to see the auto industry come to the table with a willingness to support stronger year over year improvements to fuel economy and greenhouse gas emissions than the rules adopted by the previous administration,” he said.

“Moving forward, we are focused on achieving large scale electrification, which is what is required to meet the climate crisis we face.  With most of the real-world manufacturing decisions for the next few years already made, we encourage all parties to put the fighting of the past behind us and chart a new path to successfully electrify the light-duty fleet as soon as possible.”


Disruption poised to occur from lower-cost lithium-ion batteries

Disruption is coming in energy sectors, reports the Wall Street Journal, the result of rapidly falling prices of lithium-ion batteries.

In the story, “The Battery is Ready to Power the World,” the newspaper also explains that the ICE age is coming to an end. Confused? We’ll get to that.

First, the raw numbers.

In January 2010, a consultant in Boston estimated battery costs at between $1,000 and $1,200 per kilowatt-hour.

Now, they’re about $125 per kilowatt-hour, the result of increases in manufacturing capacities that lowered costs and also tweaks to chemistry and design.

More is coming. One mechanical engineering professor at Carnegie Mellon University expects $80 per kilowatt-hour in two or three years.

And companies are working on new configurations-such as solid-state batteries, which don’t transfer ions through liquid—that could significantly enhance the power and further lower battery prices.

“The battery has reached a tipping point,” reports the Journal’s Russell Gold and Ben Foldy. “It is poised to transform the way the world uses power.”

They speak to the change in the automotive and power sectors.

One change—already starting to show up in Colorado, such as at trial experiments by Holy Cross Energy and Xcel Energy—is in homes. That could threaten the natural gas peaker-plants. They are called that because they can be fired up to generate electricity on short order to meet peak demands. Batteries could make them unnecessary or deliver the same service at lower cost. One renewable generation developer asserts that batteries could render uneconomic 100 gigawatts of capacity in existing gas- and coal-fired power plants.

As for cars, EV battery packs and motors currently cost $4,000 more than comparably-sized vehicles using internal-combustion engines. That cost differential will disappear by mid-decade, according to investment bank USB Group AG.

There are problems. No one country had more than 20% of the world’s total production of oil, while China currently controls 60% of the production of lithium-ion batteries. And charging infrastructure is still not adequate (and some say the batteries themselves remain unsuitable for cold-weather climates like Colorado).

But innovations have just begun on battery-powered EVs, which caused an auto-industry consultant, Sandy Munro, to deliver this line: “Right now, we’re basically scratching the surface,” he told the Journal.

“The ICE age is coming to an end,” he said, using the acronym for internal-combustion engine.

Allen Best