Thursday, January 07, 2016

Electric Vehicles Can't Compete With Internal Combustion Engines

The 2015 car-sale data are in: Americans bought a record 17.5 million passenger vehicles in the United States, of which 113,588 — 0.6 percent — were either plug-in hybrids or all-electrics, according to That was about 10,000 fewer than in 2014.

Automakers have sold 404,176 electrics (EVs) since they hit the market in 2010. That is 0.16 percent of the 250 million-plus U.S. passenger vehicle fleet. Assuming all are still on the road, carmakers must sell 300,000 this year and next to reach 1 million, or 0.3 percent of the fleet, by 2018.

The limiting factor is, was and will be for years the value proposition: Given the cost of advanced batteries, which has not come down as swiftly as EV boosters assumed, most EVs are still very expensive. Gas savings, however, can’t offset the higher purchase price, even when you factor in the $7,500 federal tax credit EV buyers get.  Unless and until that’s solved, the raison d’etre of electric cars, and of federal policies to favor them — making a significant dent in carbon emissions — will be null and void.
Take the 2016 Chevy Volt, a plug-in hybrid that can go 50 miles or so on battery power before a gas motor kicks in. The Volt’s annual fuel cost (gas and electricity) is $250 less than the yearly gas tab for a comparable Mazda 3, according to the Energy Department.  However, the Volt’s list price (with all the options and after the tax credit) is $3,525 more than a similarly equipped Mazda 3’s. Do the math: The Volt’s gas savings will offset the price differential in 14 years.  Two-dollar-a-gallon gas isn’t doing anything to help the EV value proposition.

Tesla? Priced north of $100,000.  Tesla did sell 50,580 vehicles worldwide in 2015.  Tesla owes its survival to subsidies.   This Silicon Valley start-up has gotten $4.9 billion in state and federal support over the past decade, according to a May 30 Los Angeles Times report.   The Times’s figure doesn’t include the tax breaks and other incentives for EV buyers in Norway, whose inhabitants had purchased 8,700 Tesla Model S’s as of October — roughly 10 percent of Model S sales worldwide since its introduction — according to the Norwegian Embassy in Washington.
In September 2012, the Congressional Budget Office estimated that the U.S. government was on course to subsidize EV production and sales to the tune of $7.5 billion through 2019.  We might have gotten more carbon reduction, sooner, if the government had spent that much money on things other than tax breaks for retrofitting coal plants to burn natural gas or nuclear power. (Wash Post, 1/6/2016)

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