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Electric Vehicle Economics 101 - Battery Lease/Swap

Apr. 15, 2010 10:09 AM ET
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renim's Blog
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Battery Electric Vehicles have a front loaded cost penalty - the battery - this front commitment must be dealt with to make battery electric vehicles compelling economic compared to petrol based vehicles.

Battery Lease/Swap electric vehicles will be of a highly disruptive to the current vehicle transport eco-system. Although initial appeal will only be to a limited number of users initially, they very quickly ramp up to significant transport kilometres.




Each location has different parameter for the above spreadsheet, but it worth downloading and toying with to see if it viable to have 'free' cars or free 'battery' battery in your location.

Taxis are an obvious choice, they may travel about 300km a day. At that usage they qualify for a 'free' car (and battery) for the cost of fuel used. Couriers and other work vehicle may also qualify for a 'free' vehicle. This is the blue zone on the graph. This is so economically viable that the users are likely to switch instead of having their old ICE car serviced.

Suburban commuters and working vehicles travelling greater than 50km a day can expect to find electric vehicles quite a compelling option too, as it will be less expensive than the new car equivalent plus fuel. It will however not be 'free' car situation for them, just a normal car price with cheaper running costs. This is the green zone.

The yellow zone represents where it is reasonable to consider new swap/lease battery EVs but not compelling to do so. Consideration to acceleration/ smoothness and quietness will make it a reasonable option, to be considered amongst other options.

The red zone is not an economically viable place for new lease/swap Battey vehicles, it will however fit the used battery electric vehicle market perfectly.

In my country Australia, the blue zone (taxis) are likely to change to battery lease/swap first. This will be similar to a price war amongst petrol stations except the general population won't see it. Then the green zone suburban commuter will change over to electric vehicles. As the two groups represent easily over 50% of the kilometres (read emissions) travelled and they stop using petrol, the service stations in Australia the do not primarily serve trucks will probably go bankrupt except for the ones aligned with national grocery retailers. At that point, it will be obvious that the days of the internal combustion engine vehicle are limited, and petrol retail will be totally dominated by the retailing duopoly in Australia.



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