Much has been written in this section about electric vehicles (eVs), as well as the need for government support via legislation and infrastructure development to help jumpstart the industry in the country—an industry that is well on its way to being mainstream in most parts of the developed world. However, not much has been discussed about one of the key elements of an eV, its battery.
An online reader of one of our eV stories asked: “(The) battery replacement cost needs to be addressed. The current cost of replacement batteries run up to P500,000 per eV. After about seven years of use, will eV owners feel comfortable in replacing the spent batteries by coughing up that much?”
To help answer that query, this writer asked not just an eV owner, but the president of the Electric Vehicle Owners’ Society of the Philippines, Ferdinand Raquelsantos, who explained: “EV owners are prepared to spend on battery replacement, as they are aware of such an eventuality. However, that’s six years from now, and most likely it will only cost around P300,000 by then.”
He added: “That projected cost of P500,000 are for high-end models, I assume. For our standard eVs, it’s P300,000 to P350,000 to replace, and the lifespan is up to 12 years at 40 percent remaining charging capacity. Ten years from now, the cost of that replacement battery would most likely be only P175,000, which is just twice the cost of changing the battery of an electric golf cart.”
Edmund Araga, president of the Electric Vehicle Association of the Philippines and the Asean Federation of Electric Vehicle Associations, told this writer: “Battery life depends on how you abuse and use the unit. It’s as simple as comparing cell phones that if you keep on charging it even if it is not necessary, then the lifespan of the battery is short. Orientation is the key to prolonging battery life.”
He expounded, “Another point of comparison would be with an internal combustion engine. Gasoline and diesel make your car work for a period of time, depending on the distance and availability. With eVs, batteries have a maximum range before they run out. It’s merely an upfront cost that makes eVs costlier. As long as you’re satisfied using it, why would you have second thoughts replacing it? Then there’s another option wherein batteries can be leased.”
Rommel Sytin, president of United Asia Automotive Group Inc (distributor of Chery and Foton brands in the Philippines), shared a similar take: “Batteries for eVs and hybrid cars are expensive, yes. But you must bear in mind that batteries are equivalent to the engines of internal combustion cars. Batteries get old, but so do engines. Most hybrid cars and high-mileage eVs haven’t had the need to have their batteries replaced. Do you replace an ICE because it’s 10 years old? It might not be as efficient as a brand new engine, but it will still work. Have you canvassed the cost of a new engine of an SUV or even a compact sedan? It would cost six figures also.”
He added: “Batteries of modern electronic devices, including cars, are designed to last pretty much as long as the product. This is why you no longer see smartphones with replaceable batteries. Sure, you can replace the battery of an iPhone or Android device, but it will be very expensive.”
In my previous interviews with Ma. Fe Perez Agudo, president and CEO of Hyundai Asia Resources Inc and Changan Motor Philippines Inc (both of which offer EVs in the Philippines), she stressed the social, environmental, and economic benefits of EVs far outweigh the costs. She said that to change the market mindset, the following must be addressed:
•The cost of switching from ICE-powered vehicles to eVs is still high. Taking into account the total cost of ownership (maintenance and power), owning an EV can be more economical in the long-run, not to mention the zero environmental costs–which we usually take out of the equation.
•The need to focus on the real capabilities and potentials of eVs instead of relying on perceived limitations. For instance, we need to address range anxiety and charging flexibility and convenience. There is the fear that one would run out of power while on the road, without a charging station in sight. The truth is, there are already products in the market that could reach 460 kilometers on a single charge and at a constant speed of 60 kph. We can start building the proper ecosystem for eV once we realize its true potential.
•The success of eVs does not depend on the manufacturers/distributors alone. It will take a multi-sectoral approach to create the proper ecosystem for eVs. We need to develop the industry by setting up a regulatory framework, implementing tax incentives, removing or relaxing restrictive tariffs, and providing fringe benefits. Existing free trade agreements (FTAs), for example with South Korea and China, can facilitate access to crucial technology and needed investments. These are crucial to changing the behavior of investors and market players and promoting demand across the value chain.
“eV adoption will address severe air pollution and its threats to public health; it will also generate new industries, like eV parts manufacturing and the construction of charging infrastructure. Note that the Philippines has 5 percent of global nickel reserves and 4 percent of global cobalt reserves, which are important to the manufacturing of eV batteries,” said Agudo.
So, in a nutshell, dear reader and inquirer, let’s cross the bridge—or to be more apt—count the current costs, when we get there.