My daily commute to work is less than 10 miles each way -- in fact it is 6 miles.
According to the U.S.Bureau of Transportation Statistics, 51% of Americans drive 10 miles or less to get to work. If you are nodding your head, then keep reading -- this article is devoted to you. We make up over half of the commuting population.
If you are in the cohort that drive between 11 and 15 miles to work (another 17% of Americans), you may also want to keep reading. Together, we constitute two-thirds of the commuting population.
What is a PHEV-10? It is a plug-in hybrid electric vehicle with a 10-mile range on batteries alone. It is my dream car.
The first electric cars to hit the roads next year are not for us. Why? because they have too much battery capacity! Whether its range is 40 miles as in the Chevrolet Volt or 100 miles as in the Nissan (OTCPK:NSANY) Leaf, this excess capacity is very expensive and will hardly be used. Think about buying a 40-passenger bus when you normally drive alone or with one other person. Those extra 38 seats will surely come at a hefty price. Put another way, would you buy a car with a 200-gallon gas tank if it cost an extra $8,000 for the privilege?
So why buy an EV (electric vehicle) that has a 100-mile range when all you really need is 10 miles between charges? Of course, for those times that you may exceed the 10-mile range, your dream car will automatically go into gasoline mode. You will never be stranded.
Most of my non-work excursions are also under ten miles round-trip: Groceries, the movies, restaurants, the gym, visiting family and friends. If a friend invites me for dinner, is it bad manners if I am not also offered a plug, too, so I can recharge? I have never been offered a gallon of gas for my drive home, but plugging in for an hour seems so hospitable (and eco-friendly, too)!
Let's examine the calculations to see if my dream car makes any sense economically. We shall also make a comparison with a Leaf-class EV, with a Prius-class HEV and with a traditional ICE (internal combustion engine vehicle).
Because my dream car does not yet exist, we shall have to make some assumptions:
1. Battery capacity should be one-quarter of the Volt's, or 4.0 KWh, since all we want is one-quarter of the range
2. Energy consumption will be the same as the Volt, or 200Wh per mile
3. The average gasoline mileage once the battery has been depleted will be 50 MPG, like the Volt, as reported by Chevrolet engineers.
Most experts agree that it costs up to $1,000 to build one KWh of battery capacity that is reliable and rigorous enough to survive its eight- to ten-year life in a car on our roads. Miraculously, Nissan claims that the 24KWh Li-ion battery that will be installed in its Leaf will cost $9,000, or only $375/KWh. Call me a sceptic but I believe that they have forgotten a couple of items from their calculations, like loss of yield, the battery management system, or perhaps the vacation pay of its employees who build batteries.
In the case of the Toyota (NYSE:TM) Prius, the replacement cost is known and works out to over $2,500 per KWh. Perhaps Toyota dealers are eager to make a profit on its battery replacement service offering, and why not?
Some believe that the replacement costs will fall continually as though Moore's Law applies to battery manufacturing or mining technologies as it does to microprocessors. The jury is still out on this issue, however, I will try to please everybody and assume that the battery replacement cost (other than the known cost for the Prius) will be $750 per KWh ($3,000 for my dream car; $18,000 for the Leaf).
To complete the analysis, I have used these real-world figures:
1. The average cost of electricity is 9.8c/KWh according to the Energy Information Administration for May 2010
2. The average cost of gas is $2.74 according to the Energy Information Administration for September 1st 2010
3. The average combined CAFE standard for 2010 is 27.5 MPG for ICE cars
4. The combined MPG for a 2010 Prius is 50 according to Toyota
5. The Prius battery replacement cost is $4,000, the warranty is for 8 years (ie. $500/year) or for 100,000 miles
It is obvious that there are many other costs to consider such as repairs, tires, and depreciation, however they apply equally to any class of car, so long as the cars themselves are comparable in luxury and quality. (I admit that a tune-up may be less costly in a car with no gas engine.)
The average miles driven per year is approximately 12,000 for passenger cars, according to the Environmental Protection Agency. I intuit, however, that those drivers who do commute more than 15 miles each way to work plus those that drive all day for work, skew the annual average up to 12,000 miles. Thus, my two scenarios follow for those of us who commute shorter distances to and from work.
My first scenario may be too blue-sky for many of you, however, I am convinced that most two-car families will find that this annual mileage breakdown will ring true for the second car's usage.
Scenario No. 1: 10-mile commute, twice a day for 50 weeks + 100 other city rides of 10 miles + 20 other highway rides of 50 miles = 3,000 miles per year
|Miles driven on battery power||2,200||3,000||Combined||0|
|Miles driven on gas||800||0||3,000||3,000|
|Annual charging cost||$43||$59||0||0|
|Annual gasoline cost||$44||0||$164||$299|
|Annual battery replacement cost||$375||$2,250||$500||0|
|Total annual motive costs||$457||$2,309||$664||$299|
|Mileage (miles per dollar)||6.6||1.3||4.5||10.0|
My second scenario will likely apply to many, if not most, one-car families and for the first car in a two-car family.
Scenario No. 2: 10-mile commute, twice a day for 50 weeks + 400 other city rides of 10 miles + 50 other highway rides of 100 miles = 10,000 miles per year
|Miles driven on battery power||5,500||10,000||Combined||0|
|Miles driven on gas||4,500||0||10,000||10,000|
|Annual charging cost||$108||$196||0||0|
|Annual gasoline cost||$449||0||$548||$996|
|Annual battery replacement cost||$375||$2,250||$500||0|
|Total annual motive costs||$932||$2,446||$1,048||$996|
|Mileage (miles per dollar)||10.7||4.1||9.5||10.0|
We can draw three significant conclusions from my analysis:
1. I expect the price of gasoline to climb two or three times faster than the cost of electricity during the coming years for a variety of sound reasons (the subject of a future article). If I am correct, the cost of driving an ICE vehicle will become prohibitive within five or six years. (Can you remember how much it cost to fill your tank in the summer of 2008?)
2. The more frequent that your excursions last 10 miles or less, the more sense it makes to abandon the ICE and upgrade to a PHEV-10. In all other cases it will soon make sense to abandon your ICE in favor of an HEV.
3. The pure EV loses out. I cannot envision any reasonable scenario where it will make sense economically or practically. The EV is dead.
There are a number of other cool reasons that can be inferred from my analysis in defense of my dream car:
- Any given amount of lithium or other battery resource will be sufficient for building ten times as many PHEV-10's as for just one Nissan Leaf, or, building four times as many PHEV-10's as for just one Chevrolet Volt.
- The charge time will likely by in the 75- to 90-minute range, similar to my cell phone or laptop.
- A 110-volt outlet will be sufficient; that is there will be no need to invest in a $2,000 220-volt charging station.
- The increased electricity demand will be relatively marginal compared to all other models of EV and PHEV soon arriving in the showrooms.
- The additional weight of the 4 KWh battery will be less than 100 pounds.
- One more cool advantage which applies to me personally: As I live in Montreal, 100% of my electricity is green (more precisely, blue, as it is hydro-electric), and furthermore it costs me exactly 5 cents per KWh. Finally, I can charge my dream car at work on my landlord's nickel for the drive home. If ever he discovers this indecency, he is free to bill me his added cost of about $1 per month for my personal consumption.
I believe the tipping point is soon approaching with each year's higher cost of gasoline, concern with CO2 emissions and continued reliance on foreign oil. For many of us, it's just a matter of waiting for one of the car companies to read this analysis and conclude that building a PHEV-10 makes much more sense than any other flavor of EV!
Disclosure: No positions