__recent gm-volt.com feature article__. The way I figure it, though, if gasoline costs $3.38/gallon or more in late 2010, the Volt will actually make economic sense, even at the high end of the estimated costs for the LI battery bank.

Here’s how I got there:

ASSUMPTIONS

Cost/kWh capacity- $1,000

# of full cycles in 10 years (very conservative estimate) -3,000

Electrical kWh cost (national average) - $0.12/kWh

KWh’s equivalent to 1 gallon of gas through an ICE - 10

EV mileage improvement via dynamic brake energy recovery - 25%

CALCULATIONS

batt. depreciation = $1,000/3000 cycles = $0.33/kWh consumed.

+ $0.12/kWh energy cost = $0.45/kWh.

Less 25% “free” recovered brake energy = $0.3375/kWh net energy cost

Net cost for 10 kWh (including battery depreciation) = $3.375

Since 1 gallon gas = 10 kWh, break-even point = $3.375/gallon

CONCLUSIONS

1. If gas costs more than $3.375/gallon, the electric option is cheaper, even with current $1,000/kWh LI battery costs.

2. As battery costs come down, the break-even gas price drops much lower.

3. GM engineers probably have already run these numbers. Now we know why GM’s management is getting VERY EXCITED about the Volt.

This is what’s called a “simple payback” calculation. It does not factor in the time-value of the money spent upfront for the batteries nor for increasing electrical rates.

On the other side, though, the calculation assumed 100% battery value depreciation in 3,000 full-cycle equivalents. It may be that these batteries will be Energizer Bunnies and go on and on, or will have substantial salvage value. It also doesn’t factor for the increased cost of gasoline through the 10 year battery life, which could (and probably will) go up at a much higher rate than the electrical or money costs.