Saturday, January 8, 2011

Another Coal Powered Car

Ford is coming out with a new electric Focus, which they claim will be competitive with the Chevy Volt or Nissan Leaf in both range and cost.  So we're looking at $32k+ for a compact car that can go 50 to 100 miles before requiring charging.  Add to that the $1500 cost of having a 240 volt charging station at your home, and we're looking at about $34k for what most people consider a starter or commuter car.

There are places and people for whom I can see that this technology will work.  These are primarily young people or couples without kids, as long as they don't live in an apartment where there isn't a place to put the charging station.  Having raised a kid with a small car, I can tell you that putting a backwards facing car seat in a car as small as a Focus is less than fun.   My expectation is that small families will not tend to buy small electric Focuses, and that demographic is a huge portion of the American auto market.

In addition, paying almost twice the price of a conventional Focus for an electric model doesn't make economic sense.  The cost of the vehicle is not made up by savings on fuel. Let's assume that the owner will drive the car enough that it requires at least some recharging every day.  Let's say that it costs $2 a day on average to charge the car.  That's $14 a week, or about $580 a year for electricity.  Let's assume $200 a year in maintenance after the first year, which is a complete SWAG for that cost.  I have no real idea how much it will cost to maintain and repair this new battery technology at a dealership.  If a consumer drives the car for 5 years, that comes to $2900 for electricity, and $800 for maintenance.  So, in 5 years, the driver of an electric Focus will spend  $3700 above and beyond the initial cost of $34000 for his Focus, for a grand total of about $38000 for the privilege of driving an electric starter car.

Now let's look at someone one who purchases a conventional Focus.  The MSRP for such a vehicle is between $16,600 and $19,600, so we'll split the difference and say our consumer spends $18,100 for his brand spanking new 2011 Ford Focus.  The Ford Focus has a 13 gallon gas tank, which for the sake of the argument we'll say the owner runs almost dry before filling once per week.  If gas averages $3 a gallon for regular gas, that's $39 a week for fuel, or $2028 a year for fuel.  Over the course of our 5 year ownership, that comes to $10,140 for fuel.  We'll average $200 a year for maintenance on our vehicle, for an additional $1000 in costs over the life of the vehicle.  We include it in the first year because the consumer is going to have to change oil and filters and such during the first year, while I expect that the electric model won't require much maintenance in the first year.  So we pay $18,1000 for the car to begin with, $10,140 for fuel, and $1000 for upkeep, for a grand total of $29,240 for a conventional Focus.

The difference in our back of the hand calculations, which don't take into account licensing and depreciation, is $8760.  It costs almost $9000 dollars above and beyond the cost of a conventional Focus to drive an electric Focus.

What our electric Focus driving consumer is paying for is for being an early adaptor.  Early adaptors always pay through the nose for their designation of being ahead of the power curve.  Be it people who bought Pentiums when 486 was all the rage, had cell phones in 1993, or buy electric vehicles before the technology is mature and can be produced as cheaply as internal combustion vehicles, they're going to pay and pay handsomely.

Eventually, when enough early adopters have bought their electric vehicles, enough manufacturers may begin cranking out electric vehicles in enough numbers that prices will begin coming down due to competition and economy of scale.  But that time is still to come, and may be a way off.  There are several competing technologies, all of which are less than a decade old at best.  There is much revolution to come in electric vehicles before the demographic of small families can afford to own one as easily as they can afford to own a conventionally powered vehicle.

As someone who would like nothing more than to cut the automotive market out of the imported petroleum equation so we can tell the 3rd world pushers who sell us our black smack to kiss off, and someone who realizes that no matter how many doodads the EPA has us bolt onto our exhaust systems, our cars are a significant creator of air pollution, I look forward to a time when electric vehicles are economically viable and are as common as internal combustion cars.  But that time is not now, and until the technology matures and becomes much cheaper, it won't be for a while.


K. Erickson said...

Love the analysis; however, you forgot the manufacturing costs and back end recycling costs of the huge battery packs that will eventually lose their ability to hold a charge. Then you get to decide whether you'd like to blindly add coal fired energy emissions to the atmo or support terrorism via middle eastern oil. Nice. Makes me want to ride a bicycle.

DaddyBear said...

I left out the indirect costs of battery disposal, and the $200 a year over the course of the vehicle's lifetime should cover the cost of replacement if it's necessary within the first 5 years.

I'm assuming that the cost of manufacturing is included in the sale price.

As for the social costs of moving the energy cost for transportation from gasoline to the electrical grid and its connected generators, if that entails new, modern coal fired power stations, I'll call that a better benefit to the environment than a few hundred thousand haphazardly maintained internal combustion vehicles. If it means more petroleum fired generators, then it's a wash. If it finally gets us off our collective butts and gets more nuclear power plants built, then I'd say we're ahead of the curve.

MrG's said...

We could build more nuc power plants...but wait, the tree huggers hate them....we could drill for more oil....but wait the tree huggers really hate them. We could use wind turbines...but wait...tree huggers hate them also, they kill birds. We could use solar energy...but wait, the solar panels generate excessive heat and damage foilage, tree huggers hate that also. I have come to one conclusion...tree huggers hate us, because we exist on their precious planet. They want all people gone except their ilk and everybody gets together and worship Gaia. I am being a bit sarcastic but the holier than thou stuff does get a bit old.

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