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Trevor Milton: Hydrogen vs Battery Electric-Why Nikola is the Leader-Reality Sets In

By July 3, 2020 9   min read  (1623 words)

July 3, 2020 |

BEV vs FCEV. What people don’t understand is they don’t compete. They complement each other.

Trevor Milton
Trevor Milton
Founder & Executive Chairman at Nikola Corporation

 

I get into the details here about the advantages and disadvantages of each. FCEV is much better for 300+ miles applications and BEV is usually better under 300 miles.

BEV is more efficient, but it also takes expensive grid energy to charge your BEV truck Why? I detail that out as in this article.

FCEV takes more energy but you can get cheaper energy for it on freeways. You do that through PPA (Power Purchase Agreements) on main federal transmission lines. This is where FCEV can become cheaper to operate.

So why are BEV energy prices higher? It’s simple, BEV trucks stay within the city limits and require utility energy to charge. FCEV run on freeways bypassing utilities where Nikola provides 20-year PPA’s for h2 production so the rate is always fixed.

What is the cost to charge BEV vs. FCEV?

Remember, every city is different but any reduction in energy is applied to both applications so it doesn’t really matter what the city rates are.

One BEV truck stores 1.1 MWh (1,100 kWh). You pay on average $.26 per kWh in California for that energy plus demand charges, so over $.30 per kWh (Why can’t it be cheaper? I outline that is this as well. Keep reading). It takes about $330 * 90% SOC = $297 to charge a BEV semi-truck in most parts of CA compared to $250 for Nikola provided green hydrogen. (500 miles /8 miles per kg=62 kg x $4.00) We are now approaching $2.50 per kg of hydrogen so we believe the near future price of h2 will be $155 to go 500 miles.

Why can’t you just add batteries to buffer BEV charging to compete with h2? You would need the same kWh for grid buffering as you do with vehicles coming in. This means for every BEV truck sold, in order to get low energy costs, you would need the same size in battery storage to take cheap energy off the grid over a 24 hour period. So how many batteries are needed on the truck and how many batteries are needed for grid storage to compete with fuel cell?

500-mile BEV Truck: 1,100 kWh since 90% useable= 1MWh or 61,000 five amp hour cells that cost Tesla about $1.75 per cell plus $.25 per cell in battery housing costs and bms. $122,000 per truck in batteries. If you add batteries to buffer grid, now you’re another $120,000 per truck. $240,000 total. With only 2k-3k cycle life. I’m being generous

Turn a truck 2x a day which is what most fleets will want to do to prevent an asset sitting idle, you would get less than 3-year life on $244,000 batteries on BEV and you lost 25-30% SOC. You’re BEV is now a 350-mile after just 3 years.

You can run hydrogen 24/7 and it only takes 15 minutes to top off and continue on the road. Hydrogen tanks last 20 years. Fuel cell has minimal rebuild costs after 20,000 hours ($5,000-$10,000 compared to $240,000 BEV battery replacements). We have a cost per mile of FCEV lower than BEV.

Here is the controversial part and the question we get from most critics; why do you get cheap energy for FCEV and not BEV?

Most BEV’s operate within city limits. Due to weight (Reduced payload) and charge time (There is no parking as it is, so this creates a nightmare for drivers), it just doesn’t make sense to operate on long haul freeways even if you have a 500 mile BEV truck.

Utilities make a killing charging crazy rates and have complete control over energy costs if you are within their network. It can take years to strike a single contract for reduced utility rates, hence why BEV’s will be more expensive to run than most h2. A good example is the Tesla superchargers. They charge about $.26 per kWh. If they could get it to $.07, I believe they would. Why? They would sell the hell out of more cars making it cheaper to own than ICE. They have no reason to charge $.26 per kWh other than they can’t get it cheaper. Utilities own the rates and don’t care what Tesla or anyone else thinks or wants. You can’t go up against the utilities, most are government entities and it takes years to force them to do anything. Now imagine fighting hundreds of utilities at once for a couple BEV energy contracts.

Another issue few talk about, but should be talked about is the grid capacity.

BEV Charging: If you have a small depot of say 100 trucks, each truck taking 1 megawatt hour of energy, you would need to pull 200 megawatts to charge in a one hour time period. You could split that up over a few hours and drop it to say 50 megawatts over 4 hours. There are few grids in the world built to give up 50 – 200 megawatts of energy without notice. It would require major modification and new power plants that takes years. That is only for 100 trucks, now imagine selling tens of thousands in a city, you start to see why the rates are so high.

H2 Production: Most hydrogen that Nikola makes is on the freeway. This is near the main federal transmission lines where the voltage is incredibly high allowing for continuous output. It requires minimal additional equipment to pull hundreds of megawatts out so long as you have a source of the energy somewhere in the network putting it in (Solar, Wind, Hydro, Nuclear).

How is h2 more cost competitive than BEV? Isn’t it less efficient? Isn’t it a fool cell like Elon says?

Nikola uses energy transmitted on the federal transmission lines before we enter the utility. We buy this clean energy directly from Wind, Solar and Hydro facilities directly. This allows us to get sub $.04 per kWh 20-year agreements on the freeways. Anyone can do this, including our competition, but not every truck can use it. You have to operate long distances to use the cheap energy. You have to pull an exact amount of energy out ever hour and it has to be stable, something hydrogen production is perfect at and BEV is terrible at. You need to be able to drive 500-750 miles without stopping to ensure you don’t enter the utility grid or pay their fees. This is where hydrogen makes sense.

Can you broker energy into a city? Can you use solar panels to reduce your cost? Why can’t BEV within a city limit be cheaper than what is stated?

Most utilities do allow solar to go up on facilities. You have to have space for it. With solar on site unless you use it when the solar is producing, you get very little credit for it. This means your BEV trucks would have to be down all day to absorb energy to offset your price. That is not how trucking works, most deliveries happen during the day. Ok, so why can’t you do long term PPA inner city? It is possible, but the utilities usually require an agreement of when, how much, how fast, how long, what price for all energy in and out. They then charge you on top of that. So you may not be $.26 per kWh, but close.

As for being a fool cell? Well, I suppose you should be powering rockets with batteries if you believe that. No one size ever fits every application and in this situation, FCEV is cheaper than BEV for long haul trucking.

So why can’t BEV work on freeways? This is the next question we always get.

Weight, charge time and Battery Degradation are the main reasons why.

Weight: BEV’s can weigh 10,000 lbs. more than FCEV. In the trucking world, every pound is worth revenue, so you “could” lose thousands of dollars per load by going BEV instead of FCEV on freeways. At this point, even if the energy was free, you would still lose money going BEV due to weight. Payload is king in long haul trucking and that is where H2 shines.

Battery Degradation: The faster you charge your batteries, the quicker the batteries degrade. If you don’t charge them fast, you would have a massive backlog of trucks waiting to charge. You need to turn trucks at truck stops within 15 minutes so others can get into line to charge. Battery degradation alone can cut your BEV truck range down each time you charge which is a non-starter in the trucking world. The best EV batteries in the market are 1,000 cycles at 80% SOC. Newer ones are suppose to get 2,000 cycles at 75%. If you turn a truck 2x a day that would give you less than 3 years on a battery before you lost 25% of your range and your pack would need to be replaced.

Using Tesla’s car numbers right now, every 400k-600k you would have to replace the pack. That costs $120,000 for the truck pack and $120,000 grid storage battery. This means you would take a ¼ million dollar hit every 400K-600K miles owning the BEV vs H2. Even with a million-mile battery, the economics of BEV still don’t compete with FCEV. Suddenly, people can see why @nikolamotor is the leader – we offer FCEV where it makes sense and BEV where it makes sense. Both have their place and always will. Hydrogen won’t replace BEV trucks and BEV trucks won’t replace hydrogen – however they both will replace diesel trucks.

It is not FCEV vs BEV, its FCEV & BEV. Now let’s stop hating each other and focus on getting rid of diesel trucks by offering a kick ass solution to drivers so they happily accept the change.

Source: Trevor Milton

 

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