[Tom]

How much of a price premium will the typical car buyer pay for EV energy savings economies? This analysis is purely economic and does not account for other motivational factors.

Surveys show that the typical car buyer's buying decision looks only at the first three years of energy savings. Based on this, with gas at $4/gal, range 40 mile/8 kW hr, and 12,000 miles yr driving, they will only pay about a $3000 premium for vehicle energy cost savings. The curves shows NPV Pay Back Years vs Premium at different gas prices. With gas at $8 the premium goes to $10,000. The zip shows the assumptions and calculations.

 

[pdt]

3 years?

That sounds about right for 3 years. I don't think early Volt buyers will be typical and will have both a longer term view as well as non-economic reasons for buying a Volt, just like early Prius buyers. I'm guessing the Volt will not have a reasonable payback time when it comes out, but that they will still sell out.

 

[Koz]

An accurate cost analysis tool is a good thing, but since it is so individual I don't see too much value in a graph. There are so many variables. A cost analysis software utility that allows users to input their personal criteria could derive a reasonable personal cost analysis. While I won't argue that plenty of people often employ a shortsighted view, I don't think past surveys will have much validity for plug-in purchases in 2010. Gas prices have been instable for too long to ignore inflation and the operating cost differential will probably be more than $1000/yr for many. It's one thing to disregard savings of a couple hundred dollars per year vs $1000. Also, I think current hybrids are laying the groundwork for resale values. If someone is only doing a 3 year cost analysis, they will often be considering resale values. The acceptable premium in this will be reduced by the resale differential.

The cost analysis seems a little plug-in friendly. 8KWh usable is about 9.75KWh from the plug. I thought the average electricity rate is about $0.10?

 

[Glen M]

The lower operating cost continue after 3 years. This should have the effect of increasing the resale value or reducing the lease rate of BEVs and should be accounted for in the calculations. Perhaps they should be based on a ten year life span.

 

[Tom]

Intent of

pdt,

Yes, early adopters will pay a much larger premium than typical buyers. My intent in doing this analysis was to get some idea of overall market penetration to estimate total volume of sales, which is what drives costs down by learning per unit volume.

Koz,

Initial EVs may not have good resale value. First, there is the concern about having to replace batteries. Second, earlier versions will inevitably have design flaws and newer, more desirable, technological improvements will come out in later models. I would guess that it won't be until the third model year when the combination of lower EV and higher gas costs will make it attractive to the general buyer.

 

[Tom]

Koz,

"The cost analysis seems a little plug-in friendly. 8KWh usable is about 9.75KWh from the plug. I thought the average electricity rate is about $0.10?"

Your correct about the numbers. But the cost of gas is about 10X the cost of electricity so the correction has little effect (~1%) on a ball park estimate.