Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

17 March 2012

Who Should Drive Electric Cars


[Update: As of April 2013, recent price reductions for the Nissan Leaf have greatly reduced the higher capital cost of electric cars. Together with federal and state tax credits, they eliminate the price advantage of gasoline over electric cars in states like California. For analysis and figures in the context of driving on the sun, which I have contracted to do, click here.]

Overview: Electric Cars’ Current Advantages and Disadvantages
Range: A Non-Issue for Short Commutes
Higher Capital Cost: the Real Issue for Most Buyers
Why Buy an Electric Car
A Simple Test for Carbon Benefit
Conclusions

Faithful readers of his blog are no doubt wondering where I now stand on electric cars. My last post on the subject, over a year ago, laid out the growing choice between the Chevy Volt, Nissan Leaf and still-to-come electric Ford Focus. And my most recent posts (1, 2, and 3) suggested converting cars to natural gas.

So where do I stand on the Volt, the Leaf and the promised Focus now?

Well, I’ve been thinking and learning. Those are always dangerous things to do. Now my choice to drive electric, not to mention my choice of vehicle, seems more complex than before. So I thought readers might like to see my reasoning and maybe apply it to their own lives.

Even before starting, I should note an important fact. As I write this post (from abroad), only one arguably electric vehicle—the Chevy Volt—is actually available for test driving and purchase where I live. As an ex-scientist and ex-engineer, I simply won’t buy a car without lots of research and a test drive. So I’d be stymied in any event.

But that’s not the main reason for my hesitation. I could always visit another state and buy a car if I were really determined to have it. Read on.

Overview: Electric Cars’ Current Advantages and Disadvantages

Let’s start with the main practical reasons to buy, or not to buy, an electric vehicle. I’ve explained most of these points in other posts, so for now, let’s just go with bullet points and links:

Advantages of electric driving, compared to gasoline or diesel cars:

Personal advantages:

Lower per-mile energy cost (by about a factor of three, right now)
Much better stability and reliability of “fuel” prices
Far simpler, more elegant and more “high-tech” vehicle design
The convenience of “gassing up” nightly in your own garage
Next-to-no engine noise in idling or driving
No carbon-monoxide risk or effluent smells
Much lower maintenance expense (if battery packs prove reliable)

Societal advantages:

No direct urban pollution
Energy independence (as virtually no electricity comes from oil)
Possibly reduced indirect pollution, depending on power source
Possible reduction in greenhouse gases, depending on power source


Disadvantages of electric driving:

Personal disadvantages:

Higher initial capital cost (price of car)
Reduced range of driving between rechargings
Range more dependent on climate, terrain, driving style and habits
Fewer public stations for recharging
Effects of interior climate control on range

Societal disadvantages:

Possibly increased indirect pollution, depending on power source
Possible increase in greenhouse gases, depending on power source


Range: A Non-Issue for Short Commutes.

For people in multi-car families, reduced range is not really an issue. As long as at least one family member has a relatively short daily commute—less than 30 miles round trip for the Volt or 60 for the Leaf—either car can easily accommodate it on electricity alone. The family can use its other vehicle(s) for longer trips. (The Volt allows single drivers to make a similar accommodation; they can switch to gasoline for longer trips.)

So range is a non-issue. Consumers who drive only long range won’t buy electric cars, and those who don’t won’t notice the difference. They’ll just have to keep a sharper eye on the “fuel” gauge.

Higher Capital Cost: the Real Issue for Most Buyers

Because range is a non-issue for buyers, electric cars’ high capital cost is by far their most important personal disadvantage. The following table shows how long it would take a consumer to recover the “extra” capital cost of a Nissan Leaf or Chevy Volt, as compared to a $26,000 Toyota Prius, depending on how many miles per year he or she drives:

Time to Recover Additional Capital Investment in Nissan Leaf or Chevy Volt, as Compared to $26,000 Toyota Prius

Vehicle and Comparison PriceMiles per Year DrivenRecovery Time (Years)
Nissan Leaf $32,00010,0007
Nissan Leaf $32,00015,0004.7
Nissan Leaf $32,00020,0003.5
Nissan Leaf $32,00030,0002.3
Nissan Leaf $32,00040,0001.7
Chevy Volt $42,00010,00018.6
Chevy Volt $42,00015,00012.4
Chevy Volt $42,00020,0009.3
Chevy Volt $42,00025,0007.4

This table computes recovery times simply. It divides the relevant price difference ($6,000 for the Leaf or $16,000 for the Volt) by the difference in per-mile energy cost between gasoline and residential electricity from this table. The result is the number of miles a buyer needs to drive to recover the initial price difference in energy savings. To convert that number to years, the table divides it by the annual miles driven; the result is rounded to the nearest tenth of a year. For buyers who can get electricity at lower industrial rates (for example, in corporate fleets), the recovery times would be about 8.6/10.3 = 83% of those listed above.

Leaf buyers can recover the price difference more quickly than Volt buyers not only because their price difference is lower, but also because the Leaf can drive more miles electrically per year. The standard minimum recharging time of four hours limits daily operations to three times the single-charge range. That’s about 180 miles for the Leaf and 90 miles for the Volt. At those daily ranges, maximum annual ranges for weekday-only electric operations (250 days per year) are 45,000 miles for the Leaf and 22,500 miles for the Volt. (The Volt of course could run much farther on gasoline but would reap no fuel savings for that additional mileage.) Battery-swap schemes—exchanging a charged for a discharged battery pack in ten minutes or so—could extend the annual range of either vehicle and further reduce investment recovery times.

In normal business, investors expect to recover capital costs in two to three years, especially for rapidly depreciating assets like cars. Only the Leaf can meet that criterion (as compared to the Prius), and then only for high annual mileages, 30,000 to 40,000 per year.

Electric-car buyers will start to save money on mileage the minute they drive their cars out of the showroom. But because of their cars’ higher initial capital cost, it’s fair to say that saving money is not a good reason to buy a Leaf or Volt. Drivers for whom overall economy is a primary goal would be much better off converting their existing vehicles to natural gas, or buying a brand new natural-gas vehicle.

Why Buy an Electric Car

At the moment, saving money is not the best reason to buy an electric car. It may be some day—perhaps even some day soon—as gasoline prices continue to rise and the capital costs of electric cars fall with manufacturing experience, wider sales, and economies of scale.

But today, the main reasons for buying electric cars are less economic and more cultural.

It’s hard to prioritize these advantages because they depend in part on buyers’ personal tastes. Yet the fact that they are individual and unquantifiable makes them no less real.

I won’t try to prioritize the reasons for all drivers. Doing so would require a massive marketing or psychological survey. I will simply list them as they influence me and trust readers to re-order them according to their own personal proclivities. All these advantages are real, but different buyers will weigh them differently.

High on my list of advantages is the idea of driving the first really new kind of personal vehicle in my lifetime. Not only are electric cars much simpler and more elegant in design than vehicles based on reciprocating internal-combustion engines. They are also cleaner and much less noisy. The don’t emit carbon monoxide, they don’t foul your garage, and they don’t foul city air. Add to that the convenience of “gassing up” in your own garage with an overnight charge, and the Leaf or Volt is worth paying more for.

When you add the societal advantages, the case for electric cars becomes persuasive despite the added cost. As an American, rationalist, humanist and modernist, I absolutely despise being dependent on regimes like Saudi Arabia in my daily life. When I think about it, it makes me angrier than almost anything else, other than our bankers getting away scot free, with billions, after destroying the global economy (1 and 2). The thought that I could get on with my life, without ever again contributing (even indirectly) to Saudi Arabia or Iran is worth $5,000 to $10,000 to me all by itself.

But the other chief societal advantage of electric cars—reducing pollution and the acceleration of global warming—is contingent. It all depends on where your electricity comes from.

You can tell by reading the pie chart on your electricity bill. Unfortunately for me, where I now live in retirement, about 87% of my power comes from coal.

That grieves me deeply. Coal is by far the most environmentally damaging fuel known to industry today (1 and 2). It’s the chief culprit in raising the level of greenhouse gases. And even if you don’t believe in climate change, its effects on acid rain, mercury pollution of lakes, oceans and seas (and the fish we eat), particulate and hydrocarbon smog in and near cities and the resulting asthma epidemic are horrendous.

I’ve been traveling widely in retirement, and I see the effects of coal smog everywhere. And everywhere, every year, they get worse. So I just can’t stand the idea of driving on coal. It puts me off my feed and makes the Volt’s or Leaf’s other attractions seem like personal self-indulgence at society’s expense.

Helping destroy the planet, even to cut off the Saudis, just doesn’t seem like a good idea. So given the power sources in the place I now live, I’m no longer so so impatient to buy.

A Simple Test for Carbon Benefit

But that’s just me. People in other areas get their electricity from other sources. And they all place different values on the various personal and societal advantages of electric driving. Some may value energy independence so highly that they’re willing to ignore coal’s gargantuan environmental costs just to get away from the Saudis.

But for those who are primarily concerned with the environment, and who credit the scientists on global warming, a simple numerical test can help. Per unit of energy, coal produces about twice the effluent of greenhouse gases as does natural gas. Oil produces more than natural gas, but the two are close enough in their greenhouse effluents to consider them roughly equivalent for car-buying decisions. Hydroelectric, nuclear, wind, solar and other renewable sources of electrical power produce no greenhouse emissions at all.

So if you want to lower your carbon footprint by electric driving, here’s the inequality you have to satisfy:

1(NG) + 2(C) + 0(R) < 1(G),

where NG, C, R and G are, respectively, the amount of energy in your driving that comes from natural gas, coal, renewable or nuclear power, and gasoline.

If you divide by G to get proportions and eliminate the zero term, the inequality becomes:

NG/G + 2C/G < 1

That is, the proportion of your power that comes from natural gas, plus twice the proportion that comes from coal, must be less than 100%.

Only if part of your power comes from non-carbon or renewable sources can you lower your carbon footprint by driving on electricity. In that case, your fraction of coal power must be less than half, thus:

2C/G < 1, or C/G < 1/2

If your fraction of coal power is less than one-half, you can still lower your carbon footprint if your fraction of natural-gas power is low enough. Following is a table that shows, for each fraction of coal power, how much power you can get from natural gas and still lower your carbon footprint as compared to driving on gasoline:

Maximum Percentage of Electric Power from Natural Gas to Equal or Reduce Gasoline Carbon Footprint, as Function of Percentage from Coal

Percentage of Power from CoalMaximum Permissible Percentage from Natural Gas
500
4020
3040
2060
1080

As this table shows, the most important variable for determining whether you, as a driver, can reduce your carbon footprint by driving on electricity is the percentage of electric power in your community that comes from coal. If it’s 50% or more, you’re out of luck. You simply can’t lower your carbon footprint by driving on electricity. You might as well switch to natural gas, which will reduce your carbon footprint only slightly but will reduce urban air pollution and save you lots of money.

If coal’s fraction is less than 50%, the fraction that can come from natural gas and still allow you to lower your carbon footprint, as well as to achieve energy independence, varies rapidly with coal’s percentage. The farther coal’s fraction falls, the better. But natural gas can’t take up the slack entirely without raising the carbon footprint. That’s just one more reason to ramp up wind, solar, safe nuclear and hydroelectric power, which add no carbon at all.

Conclusions

Electric driving is not for everyone. If saving money in the short term is your primary objective, it’s not for you. If you need a long-range vehicle, it’s not for you. And if you care about carbon and live in a area where 50% or more our your electricity comes from coal, it’s not for you. You’ll just be increasing your carbon footprint and air pollution.

But if you live in an area where coal produces less than half of your electricity, driving electric becomes interesting. You might be lowering your carbon footprint, reducing energy dependence and enjoying the pleasures of an elegantly designed, modern vehicle that doesn’t belch fumes or make lots of noise and that you can “refuel” overnight in your own garage. You can begin your inquiry with the pie chart on your electricity bill.

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3 Comments:

  • At Fri Dec 14, 08:38:00 AM EST, Blogger Nicole said…

    I agree: electric cars are not for everyone. First of all, electric cars are a better fit for short trips as of now, in so far as their configurations are concerned. But I think one thing that stands out when it comes to their function is when you put social responsibility in the picture. Choosing to have an electric car is like making a statement about your values. :)

    Regards,
    Nicole

     
  • At Sat Jul 06, 12:50:00 PM EDT, Anonymous Getogy said…

    Hi, I also agree with Mr. Nicole. thanks.

     
  • At Sun Jul 14, 03:19:00 PM EDT, Blogger Jay Dratler, Jr., Ph.D., J.D. said…

    Dear Getogy,

    I think “Mr. Nicole” is a she. “Nicole” is a common female first name, both here and in Europe.

    As for the substance of your two comments, I think you both neglect the hard economic facts. Per-mile energy costs of electric driving are already about three times lower than the cost of driving on gasoline.

    That’s at today’s national-average residential retail price of electric energy, between 11 and 12 cents per kilowatt-hour. In the long term, solar panels can deliver energy below a penny a kilowatt-hour, for a cost advantage over gasoline well beyond an order of magnitude (i.e., a factor of ten).

    And that comparison assumes that the cost of gasoline won’t go up.

    Economically, the decision whether to buy an electric car depends mostly on the tradeoff between the higher initial capital cost of electric cars and their lower driving cost. The more you drive, the shorter your trips, and the closer rapid charging stations are to your home and workplace, the more economic sense electric driving makes.

    That sense depends only on thrift, not environmental or personal values. And it will only get better as electric cars get cheaper.

    If driving on the sun supports your personal and environmental preferences, so much the better. But it will fatten your pocketbook, too.

    Best,

    Jay

     

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