06Mar 2016

General Motors announced in January the all new Chevy Bolt, and Tesla Motors followed recently in pre-announcing the long anticipated Model 3. Both cars are new and novel, the first electric vehicles ever to boast of a driving range of 200 miles at a price before incentives between $35,000 and $40,000.  My 2013 Ford Focus Electric with its now degraded 70-mile range feels all too aged. It only goes to speak of the rapid transformational pace of the automotive industry, and it is only the beginning.

But even as an enthusiastic advocate and proponent of pure electric vehicles, also known as battery electric vehicles (BEV), I cannot ignore the incredible evolution that hybrid vehicles (HEV) have witnessed since the introduction of the first Toyota Prius in 1997. New plug-in hybrid models now span nearly every major auto manufacturer and include the Toyota Prius, the Chevy Volt, and other models such as the BMW X5 xDrive plug-in. Hybrids are no longer considered cars from the future….their sale volumes rocketed when gasoline prices soared a few years ago, but the presently low gas prices are making average consumers pause and ask whether being green also means keeping green in your wallet.

So let’s do a simple exercise in this post and compare the actual cost of maintaining three types of vehicles. The first is a conventional car with an internal combustion engine (ICE), assuming it has an average efficiency of 25 mpg (9.4 L/100km). The second is a hybrid vehicle (HEV) similar to the Prius. I assume an average efficiency of 50 mpg (4.7 L/100km). The last type is a pure electric (BEV). Based on my driving experience and other published data, I assume an average efficiency of 270 Wh/mi, or using the US EPA unit for energy consumption, it works out to 106 MPGe (equivalent mpg). I further assume that the average cost of electricity is $0.10 /kWh — that’s roughly what I pay when I charge my car at night, recognizing that in some geographies outside of our home state of California, that cost may be quite lower. Finally, for the benefit of this exercise, I ignore traditional maintenance costs such as oil change — I am happy to confirm that I have spent zero on oil changes for my Ford Focus Electric, precisely as the Ford dealership claimed !

I will spare you the math, but the cost of driving your vehicles (in $ per mile driven) depends largely on the prevailing price of gasoline.

HEV-vs-BEV

When gas peaked at $5.00 per gallon several years back, HEV and BEVs provided a significant improvement over conventional cars when it came to cost per mile (again, I am giving ICE a benefit of zero maintenance cost which is not true in real life). But at today’s gas prices hovering near $2.00 per gallon, the financial advantage of HEVs and BEVs shrinks substantially. Furthermore, the advantage of BEVs diminishes substantially when compared to HEVs. At $2.00/gal, HEVs are only a mere additional penny per mile to operate…so now one can understand why cabbies prefer their HEVs over the old Ford Victorias. Additionally, given that HEVs don’t suffer from “range anxiety,” more cars like the Chevy Bolt and the Tesla Model 3 need to hit the showrooms before they can be seriously considered as primary household vehicles (as opposed to commuting second cars).

Both limited range and low gas prices remain strikes against the wide adoption of BEVs. So long gasoline prices stay in the foreseeable future near their all-time lows, government incentives and regulations will continue to play an important role in the promotion of BEVs — these incentives include the highly coveted white stickers to use the carpool lane in California. It will take a serious increase in gas prices before incentives for BEVs come into question. This, however, is a chicken-and-egg problem. With the United States well on its way to energy independence, it is difficult to see scenarios in the near future that will catapult the price of gasoline…unless one begins to consider gloom-and-doom war scenarios, which I will leave to others to consider.