Email just sent to media contact at BCG
I decided to see if I could get them to correct their report by writing to the media contact quoted in the press release TEG linked to:
Dear Alexandra,
I note from
http://www.bcg.com/impact_expertise/publications/publication_view.jsp?pubID=2819&language=English that you are the press contact for the above report.
I want to draw your attention to the fact that the report is based on a seriously flawed premise, and in my view should be withdrawn, amended significantly, and re-published with a similar level of promotion given to the revised report as has been given to its original publication.
My commentary on the factual inaccuracy at the heart of the report is, as posted at
Electric Vehicle Bashing WaPo - Tesla Motors Club Forum
"The Boston Consulting Group is a very illustrious and well respected management consulting group. Which is a pity, since their report ("The Comeback of The Electric Car? How Real, How Soon, and What Must Happen Next") seems to be based on a seriously flawed premise: namely that Lithium Ion batteries cost (as at January 2009) $2,000/kWh, with a projected drop to $700/kWh (or in their most optimistic scenario) $500/kWh by 2020.
Given this baseline of assumption they cost a metric of $/% CO2 reduction (quite a nice metric, if you ask me, and the kind of reason people pay groups like BCG high $ to consult for them).
They then use this metric based on the above battery costs to show that:
- improvements to ICE technology yield $70-$140/% CO2 reduction
- various levels of hybrid from mild (stop/start) to full hybrid yield around $140/percentage point
- PHEV comes in around $200/% in 2020 (but around $500/% today)
- BEV and EREV both around $280/% in 2020
Based on that they then argue that the Total Cost of Ownership (TCO) over five years always favours an ICE even in 2020 (based on oil in a $60-130 range).
However, if I look here I see that James was able to buy LiFFePO4 for $340/kWh in small volume, this year. So that $2,000/kWh baseline premise seems a little exaggerated! (I note also that if you were building a car the way Tesla does, going for energy dense not power dense cells, the cost per kWh is likely lower. It will also be better in volume.)
If you plug $350/kWh into the graph on page 5 of the BCG report, you find that the story reverses. At that $/kWh, there is no price of oil in the $60 - $130 range for which Electric doesn't beat ICE.
Unfortunately BCG offers no way that I can find to comment on or amend its reports. So I guess this will likely stick and get repeated as "truth"."
I am trusting that you will forward my comments for review to the report's authors, and that if they on analysis they agree (NB I am happy to enter into a dialogue with them as part of the review if they wish), you will proceed to amend the report and republish with full PR as I suggested above. Thereby you will demonstrate that there is a way to comment on and have amended a BCG report, and I will happily retract my last para above!
I remain sincerely impressed by BCG in general, if underwhelmed by this specific report.
With best regards,
Andrew Bissell