Electrical Vehicle Competetiveness

Jean-Marc Desperrier, in a comment to a post about German industry building massive solar capacity for self-consumption, just wrote:

I check by myself that the second page indeed does claim a fleet of light EV utility vehicle doing less than 10 000 km a year will be competitive against a diesel one.
It’s surprising and I’d like to see the numbers and not just the claim.

One specifically surprising aspect is the reference to less than 10 000 km when you expect that the savings can only come from the fuel cost, and so should be bigger as you drive more. With maybe a requirement that this is only valid for city driving (where diesel is very inefficient and has a much larger per km fuel consumption).

I have not researched these questions much. But even I know that the purchase cost of electric vehicles are still higher than equivalent gasoline cars, mostly because of battery costs. So the economics would depend, as the comment above indicates, on savings from reduced fuel cost being able to compensate for that difference.

That, of course, would be easier to do with more mileage than less, so I agree with the comment being surprised at the break-even of less than 10,000 km per year.

To research this kind of question, it may be useful to look at the biggest car database in Europe, which is provided by the European Commission as a tool to improve penetration of low carbon cars in the market at cleanvehicle.eu.

Searching for electric vehicles in the “passenger car” category results in 17 reports, ordered by cheapest operational lifetime cost first. On that top spot I find the “Mia Electric” with a power of 10 kW. The Wikipedia article on that car notes that it was sold initially last year only to fleet costumers in Germany and France, at a price of EUR 24,927. And it sells at this dealer near Munich to individual costumers at EUR 24.504 right now.

It consumes 12.5 kWh for 100 kilometers. That would be 1.625 EUR at 13 cents a kWh. That’s actually an excellent score. This page of the American government reports values between 28 and 32 kWh for comparable small car electric vehicles, and 54 kWh for vans.

Now to compare, I search the “diesel” category of “passenger cars” at cleanvehicle.eu and come up with the “KIA Rio UB” on the top spot. It needs 3.5 liters on 100 kilometers for in town use (which is what the operators of a fleet will base their modeling on). At EUR 1.44 for a liter of diesel in Germany right now, that’s EUR 5.04 for the 100 km.

It follows that the cost for 10,000 km runs at EUR 504. Substracting EUR 162.5 in electricity cost we get EUR 341.5 in savings a year. That’s a couple of thousand euros for the life of the car.

Maybe not enough to offset the higher price on its own. However, for the owner of a large fleet of cars, there are two additional benefits.

For one, the price of fuel is locked in, especially if they generate their own electricity with a solar installation. And the cars will need less maintenance, as pointed out in comments to this article about the same issue. Less moving parts means less costs for checkups.

The reason for higher costs of electrical vehicles is supposed to be the high costs of batteries. But actually, the 8 kWh capacity of the Mia Electric only costs $5,512 in Q1 of 2012, down 14% over one year, and expected to drop to about only $1,200 until 2030 (Bloomberg). Right now the higher cost of batteries is in the general ballpark area of the fuel savings, and the rest of the difference comes from the fact that electrical vehicles like the Mia Electric are still very small scale products.

That will need to change. Just like with the solar mass market bringing down prices more than anything else, a mass market for electric vehicles will do the same.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

One thought on “Electrical Vehicle Competetiveness

  1. In Germany, the gouvernment wanted to have 10.000 cars on the streets by 2020 – right now, there are a few hundreds. Guess get significant numbers on the streets, you would really need to ramp up on subsidies and tax breaks, and gouvernments don’t do so thus far…

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