(Reflecting the current difficulties in forecasting, Anderman, who publishes an annual market forecast for the sector, said he decided not to produce the 2009 report. As one example of factors contributing to that decision, a survey of projected oil prices returned values between $30 and $250 a barrel, he said.)

Dividing that forecast in to application segments—micro-, mild-, full-, and plug-in hybrids; mini-electric (e.g., the i-MiEV) and extended range electric vehicles; and full electric vehicles—Anderman sees the greatest market opportunity (in terms of the value of batteries sold) in the mini EV and extended range electric vehicle market, with $134 million in battery sales and 8,000 units. About half of those, he suggests, could be the mini-EVs of the i-MiEV type.

By 2015, he suggests, full hybrids (e.g., the Prius) will represent the top Li-ion business opportunity from a dollar value perspective, followed by moderate hybrids and light electric vehicles (bikes and scooters), particularly in Asia. Although EVs and extended range electric vehicles represent a lower volume opportunity, they could be moving up in list, depending upon the persistence of government subsidies, he noted.

Lithium-ion batteries continue to face a number of technical and cost challenges, essentially represented in cost at initial volumes, safety, manufacturing reliability and life.

Anderman ran a series of net present value analyses based on a range of gasoline prices, fuel saved, and pack costs. On a 5-year NPV analysis of fuel savings, he found that:

• Micro hybrids makes economic sense for the consumer on a fuel savings basis when gasoline is at $5/gallon US.

• Mild, moderate and strong hybrids begin to make economic sense when gasoline is around $7 per gallon.

• PHEVs (blended 10-mile strategy), extended range electric vehicles (40-mile AER) and full EVs begin to make economic sense when gasoline is at about $10/gallon US.

Boosting that up to an 8-year NPV analysis modifies that somewhat:

• Micro hybrids make sense at $3/gallon.

• Mild, moderate and strong hybrids make sense at $5/gallon.

• PHEVs and EREVs require $7/gallon

• Full EVs still require $10/gallon.

Noting that PHEVs with a 10-mile range in blended strategy and possibly the Chevy Volt at demonstration volumes (several thousand units per year) by 2011, Anderman called the California Air Resources Board and the ZEV mandate the main market driver for these vehicles. Referring to the PHEV/EV market, Anderman said:

Lithium-ion is the preferred battery for a problematic market. Energy density, cost, life and reliability—safety—are still big challenges. If pushed too fast, it could backfire. The industry does not need a 2011 version of “Who Killed the Electric Car”.

One possible ARB scenario for achieving an 80% reduction in greenhouse gas emissions from transportation by 2050. Data: Tom Cackette, ARB. Click to enlarge.

California Air Resources Board. In a separate presentation at AABC 2009, Tom Cackette, ARB’s Executive Office, said that for the transportation sector in California to contribute to the required 80% reduction in greenhouse gas emissions by 2050 from a 1990 baseline, vehicle efficiency will need to improve approximately 3x.

Cackette described this transformation as occuring in three phases.

• From now through model year 2016, the regulatory driver is Pavley 1 (AB 1493), the state regulation of new vehicle greenhouse gas emissions. (Although EPA has yet to grant the waiver, Cackette spoke as if it were a certainty.) This targets a 30% reduction in GHG, largely using conventional drivetrains.

• Pavley 2—a follow-on set of regulations currently under development—will run from model years 2017 to 2025, and target further reduction up to 40-50%. These vehicles will likely be lighter in weight and require hybrid drivetrains.

• The third phase runs from model year 2015 to 2050, and is driven by the new ZEV2 regulation. This targets the approximate 80% reduction from 1990 and will be electric drive and ultra-low carbon fueled vehicles. Most vehicles will need to be like these by 2050, Cackette noted.

One possible scenario he described for 2050 consisted of 10% conventional internal combustion vehicles achieving approximately 40 mpg US; 18% biofuel and hybrid-electric vehicles achieving approximately 60 mpg US; and 72% electric and hydrogen vehicles, achieving 80+ mpg US.

In addition to the improvements in vehicle technology, Cackette also noted the importance of reduced vehicle miles traveled by about 20%.