JD Power: Electric vehicle economics don't pencil out

[TomT]

"Sales of electric vehicles won’t take off until automakers lower prices and demonstrate the economic benefits to consumers, according to a J.D. Power and Associates study of electric vehicle ownership."

http://www.latimes.com/business/autos/la-fi-mo-autos-electric-vehicle-costs-20121108,0,4965785.story" onclick="window.open(this.href);return false;

 

[adric22]

http://www.latimes.com/business/autos/la-fi-mo-autos-electric-vehicle-costs-20121108,0,4965785.story" onclick="window.open(this.href);return false;

The article is correct to a certain extent. The price does need to come down. However, that alone is not the problem. I'm convinced public education and awareness is really the issue. People don't understand how the cars work or what their benefits are, short of being good for the environment. And some people even dispute that claim. So people just don't see any reason to buy one.

That will change. I think Tesla motors is going to be the driving force behind that change too.

 

[LTLFTcomposite]

If evs really were a good deal financially the public education would take care of itself.

 

[Randy]

Since when is any new or revolutionary technology put into the marketplace at a price point where it is cheaper than the status quo?

Cellphones? No, they were $1,000 and $1 per minute

VCRs? No, the first VHS machine I bought was $729

Computers? No, they cost $2-3,000 back in the day for a 286 processor setup

CDs? No, they cost more than LPs or tapes when introduced

Digital Cameras? No, they stored 1 MB images on floppy discs and cost $1,000


So why does the media and public expect that EVs will be cheaper than gas cars? I don't get it....They do compete in some areas and the lower operating cost can help contribute to a competitive TCO over several years...But, cheaper? Not for a while....

You want something new, revolutionary, and cool? Expect to pay a little for it until manufacturing efficiencies and sales make it cheaper to build...

 

[Nubo]

You could list a hundred models whose "economics don't pencil out". Hell, they don't pencil out for ANY new car. If you're maximizing your automobile dollar, you're getting a good deal on a used car and extracting the useful life out of it.

So EV critics would do well to dispense with that fantasy that an EV is only "worth it" if it's the lowest TCO car on the road. There's a basketfull of attributes that make EVs attractive. Great To Drive is right up there, for starters.

 

[derkraut]

Since when is any new or revolutionary technology put into the marketplace at a price point where it is cheaper than the status quo?

Cellphones? No, they were $1,000 and $1 per minute

VCRs? No, the first VHS machine I bought was $729

Computers? No, they cost $2-3,000 back in the day for a 286 processor setup

CDs? No, they cost more than LPs or tapes when introduced

Digital Cameras? No, they stored 1 MB images on floppy discs and cost $1,000


So why does the media and public expect that EVs will be cheaper than gas cars? I don't get it....They do compete in some areas and the lower operating cost can help contribute to a competitive TCO over several years...But, cheaper? Not for a while....

You want something new, revolutionary, and cool? Expect to pay a little for it until manufacturing efficiencies and sales make it cheaper to build...

+1 Well stated Randy

 

[garygid]

It might be difficult to get an EV to "pencil out" if you
have an insufficient view of the future, no grasp of the
pleasures of driving EV and charging Solar, or... just
need to get the "pencil out" of some exhaust pipe. :lol:

 

[adric22]

Cellphones? No, they were $1,000 and $1 per minute

VCRs? No, the first VHS machine I bought was $729

Computers? No, they cost $2-3,000 back in the day for a 286 processor setup

CDs? No, they cost more than LPs or tapes when introduced

Digital Cameras? No, they stored 1 MB images on floppy discs and cost $1,000

So why does the media and public expect that EVs will be cheaper than gas cars? I don't get it....They do compete in some areas and the lower operating cost can help contribute to a competitive TCO over several years...But, cheaper? Not for a while....

In all fairness these were all technologies that endured criticism as well in their early stages. Two other technologies that I can think of are DVD players and LCD monitors. At the time neither technology offered anything terribly new in functionality. But both had drawbacks over existing technology. I remember hearing lots and lots of people say that they would never buy a DVD player because they were expensive and couldn't even do everything their VCR could do, namely play their existing VHS tapes and be able to record shows off of TV. Complaints of LCD monitors were that they were expensive and had slow refresh rates, low color saturation and contrast, and were difficult to see from an angle.

But it is important to consider certain aspects. The Laserdisc player had been available for 20 years, almost as long as VHS tapes. But they remained a niche market until DVD came along. They had most of the same advantages and disadvantages of DVD players over VHS. Even the picture quality was just about on par with DVD. So what brought DVD into the mainstream that laserdisc was never able to achieve?

It should be important to note that laserdiscs costed quite a bit. I seem to recall paying almost $50 per movie. DVDs came out at a lower price point and both the cost of media and players continued to drop as more people bought them. But I have to wonder if laserdiscs would have gotten cheaper with mass market adoption.

The guys on top gear once commented that the Leaf felt like a "beta tape player" or something to that effect. The real comparison would be to ask if the electric vehicle is a laser-disc player or a DVD player. Two very similar devices, but one had mass market appeal and the other was stuck as a niche product its entire lifespan.

 

[mwalsh]

In all fairness these were all technologies that endured criticism as well in their early stages.

I've had a cellphone since the mid-1980s. Cell phone service was pretty terrible back then, and my phone was a hugely expensive unwieldy brick of a thing, with a very short battery life:

Yes, that's Danny Glover from 1987s 'Lethal Weapon'

We got cable in the early 1980s too. It was great...when it worked.

 

[Pipcecil]

Cost and Savings is not the only issue really. Considering how much I drive (very cheaply), add the tax rebate, I already recouped my cost in a comparable sized and amenity loaded gas car. But then again, I push 1700 miles per month. It really depends, the shorter amount you drive the longer it will take. Power users like me see a very quick benefit.

Besides the lack of knowledge I think its range more than anything. Majority people want the longer range. Hell you can see it in car commercials today, "it will go 8 gazillion miles between fillups" which is entirely asinine sine you will have to stop and use the restroom/sleep/eat before you reach 8 gazillion miles. They want the longer range for the mythical trip across country they "might" take on the spur of the moment.

 

[kubel]

Not even a bike 'pencils out'. Want something something that makes economic sense? WALK.

Do most vehicle's economics pencil out?

Take my gas car for instance, a 2006 Ford Crown Victoria. When I spend more just for gas than I do for electricity AND lease payment for the LEAF, I don't think that pencils out either, even when you factor in the fact that I paid only $5000 for the car. Do the economics of SUVs, pick up trucks, or minivans pencil out? They pencil out even worse because they are more expensive up front and have just about the same fuel economy or worse.

 

[GRA]

Not even a bike 'pencils out'. Want something something that makes economic sense? WALK.

Do most vehicle's economics pencil out?

Take my gas car for instance, a 2006 Ford Crown Victoria. When I spend more just for gas than I do for electricity AND lease payment for the LEAF, I don't think that pencils out either, even when you factor in the fact that I paid only $5000 for the car. Do the economics of SUVs, pick up trucks, or minivans pencil out? They pencil out even worse because they are more expensive up front and have just about the same fuel economy or worse.

Making an allowance for hyperbole on your part, a bike most definitely pencils out - three to five times the speed for the same energy as walking, at a cost (bike + yearly maintenance/parts) far less than what you'd pay for regular use of public transit, and ignoring the health benefits. Now, if you never travel more than 1.5 miles from where you live, then walking is probably cheaper. However, as someone who does a lot of both, the cost of replacing a good pair of walking shoes yearly is about the same as my yearly bike maintenance and parts costs, approx. $75-$100.

J.D. Power has it right, the economic benefits aren't there yet for BEVs/PHEVs for the average consumer. Early adopters can afford to care a lot less than the average person, and are willing to pay more for other benefits.

 

[kubel]

Making an allowance for hyperbole on your part, a bike most definitely pencils out.

It all depends how often you bike, how far you go, and what you are comparing it to (walking?). Same applies to EVs. There's a point at which biking suddenly makes economic sense compared to walking, and there's a point where EVs make economic sense compared to gas cars.

 

[DaveinOlyWA]

Another article that is 100% in the facts it presents then it makes a conclusion based on those 2 facts (purchase price and fuel cost differences) as if those were the only two facts that mattered.

now, there "could" be a $10,000 difference or then again, it might not be that much. the difference in the purchase price (had i purchased) between my 2010 Prius ($28,594 after Prius Priority Purchase discount AND no sales tax) and my 2011 LEAF is significantly less than 10,000. in fact it was about $7,000 difference. had i purchased and fully realized the $7500 tax credit (which i could not and that one factor in my decision to lease) then the LEAF would have been cheaper from day 1.

now the Prius has more bling but i did get a discount and i cant remember what it was and anyone who was part of the PCD event could tell you but i think it was "about" $1500-1700? and if i had to pay sales tax (made that deadline by just over a month) then all of a sudden the price of a cheaper trim Prius is just a few thousand different.

now their math is a bit cracked. paying $147 for gas at say...$3.75 (it was on sale!) is about 1200 miles at 30 mpg. if only paying $18 for electricity, that means they took advantage of free charging or the solar people were added in to lower the average.

but there is also maintenance costs of which the LEAF has none. time spent getting gas. my time is not worth much but many dont feel that way. parking in a hot garage with a cool car, not waking up the neighbors when you have that 4 am job assignment, its a bunch of little things that are not mentioned as if they didnt matter.

they may not mean a lot to many, but the little things add up.

 

[gbarry42]

Haven't I read this discussion before? Well, my favorite analysis goes like this:

You aren't brewing your own beer because it saves you money.

I thought I got that here, but I couldn't find it in a search, so maybe it came from the Prius Chat podcast. It still could have been Dave...or Patrick.

 

[DaveinOlyWA]

Haven't I read this discussion before? Well, my favorite analysis goes like this:

You aren't brewing your own beer because it saves you money.

I thought I got that here, but I couldn't find it in a search, so maybe it came from the Prius Chat podcast. It still could have been Dave...or Patrick.

ya ok, so i was in a podcast once...