EV EconomicsQuantitativeIssues, part 2

EV-221b

This course is presented as part of Evannex Universitya free, open learning environment that presents concise, video-based mini-courses for those who have interest in electric vehicles (EVs)

A look at part 1

Overall cost of Ownership = Fuel costs +Resale costs +Maintenance costs +RepairsConsumablesSupport costsInsuranceFinancing costsInfrastructure costsTax Credits

In part one of this EVU mini-course, we examined two important elements of the

>> the Overall cost of Ownership >> Fuel costs and >> resale costs

In part 2, well consider

>> Maintenance costs >> Repairs>> Consumables and >> Support costs that include>> Insurance>> Financing costs>> Infrastructure costs associated with batter charging at home>> and the specifics of tax credits as they apply at the federal and state level

Maintenance & RepairEVs are simplefewer parts, means fewer things to break or wear outfew consumablesmeans fewer thing to buy

One of the very first things you learned at EVU is that >> EVs are simpleAs a consequence, an EV has>> fewer parts, >> and that means fewer things to break or wear out>> In addition, an EV requires few consumables>> and that means fewer things to buy on a regular basis

Maintenance CostsMaintenance ICEBEV10 yr.SavingsOil change10 changes0$500Fluids1 change0$120Tires2 changes2 changessameMuffler1 change0$350Brakes1 change0$700TransmissionService possiblenone$1000 - 2000Plugs + tuningService possiblenone$600 - 1000

The table on your screen appeared in an earlier EVU mini-course,and has now been extended to provide rough estimates of the 10 year maintenance saving for EV when compared to ICE vehicles.

Its important to note that the cost savings indicated are approximate and vary dramatically by region and vehicle.

However, maintenance savings do exist. For example, Ford Motor Company estimates that over 10 years, the owner of a Ford Focus Electric would save about $500 because no oil changes are necessary. Additional saving would accrue because electric motors require significantly less maintenance and adjustment than ICE.

Other sources (Plugincars.com) estimate that EV maintenance costs will work out to about 3 or 4 cents per mile vs. about 6 cents per mile for an ICE car.

Battery ReplacementBattery costs range from $500 to $600 per kWhIn five years, costs will range from $500 to $225 per kWhOther estimates as low as $140 -$180 per kWh in 2020

Source: www.technologyreview.com

If you intend to own your EV for many years, and you put a lot of mileage on the car, battery replacement cost is worth considering in an economic analysis.Currently, EV batteries are expensive. The chart on the right of your screen was prepared by MIT Technology Review and represents a conservative set of estimates for battery costs from 2010 to 2020

>> According to the study, today, battery costs will typically range from $500 to $600 per kWh>> In five years, costs will range from $225 to $500 per kWh>> Other estimates published at cleantechnica.com predict battery costs as low as $140 -$180 per kWh in 2020

Some industry analysts believe that Teslas Gigafactory (which is currently under construction) may be able to achieve costs of $100 per kWh and that that will be a tipping point for EVs. Well see.

-http://cleantechnica.com/2014/10/13/battery-costs-may-drop-100kwh/http://www.technologyreview.com/sites/default/files/legacy/jan11_feature_electric_cars_p61.pdf

Support CostsInsuranceFinancing costsHome infrastructure240 volt wiring for your garageExternal charger for your EV

With the exception of the creation of a charging infrastructure in your home, support costs vary relatively little from similar costs for ICE vehicles.

>> The cost of insurance for a BEV or PHEV is comparable to the cost of insuring a similar ICE vehicle>> Financing for an EV is no different than financing or leasing an ICE vehicle, although some EV manufacturers offer special lease arrangements for EV purchases.

>> Establishing a home infrastructure for your EV can introduce some additional up front costs. >> the cost of wiring your garage>> the cost of purchasing a wall charger for most smaller BEVs and all PHEVs

Well discuss the home charging infrastructure and the costs associated with it in the next EVU mini-course iEV-230.

Tax Credits$2,500 to $7,500 tax credit, depending on size of battery EV infrastructure tax credit on an EV chargers is 30% up to $1000 for consumers and 30% up to $30,000 for businesses. Individual states have a wide array of incentives including:waiver of sales taxState tax credits of up to $2500 (CA)special parking and HOV lane accessplug-in america has a complete summary

Source: http://www.pluginamerica.org/incentives

In order to encourage the adoption of EVs, both the federal government and some, but not all, state governments offer tax credits and other incentives.

At the federal level,

>> a 25 hundred to 75 hundred dollar tax credit, ids offered, depending on size of battery for electric-drive vehicles (EVs and PHEVs) >> in addition, an EV infrastructure tax credit for EV charge station is 30% up to $1000 for consumers and 30% up to $30,000 for businesses.

>> Individual states have a wide array of incentives including:>> waiver of sales tax>> State tax credits that can be as much as $2500 (CA)>> special parking and HOV lane access>> the map on the right of your screen has been created by plug-in america and shows all states with credits or other incentives. Use the link shown for details for your state.

Its important to note that tax credits can change or be eliminated over time, so an on-line check is well worthwhile as you assess your EV purchase.

Cost CalculatorsAn excellent list with pointers to a number of EV cost calculators can be found at:http://driveclean.ca.gov/pev/Costs/Calculate_Your_Costs.php

You can set up your own spreadsheet model or borrow one of the many that have been published online.

>> But most potential EV owners are better served to go directly to one or more of the online cost calculators listed by the State of California.

You can use the URL shown on your screen to access the list.

SummaryCosts of owning an EV can be computed by focusing on these cost components:Fuel costsResale value differentialMaintenance costsSupport costs Tax creditsA variety of useful cost calculators are available on-line

Lets summarize,

>> The Costs of owning an EV can be computed by focusing on these four cost components:>> Fuel costs>> Resale value differential>> Maintenance costs>> Support costs (insurance and financing costs)>> and taking any available tax credits into account

And you dont have to crunch the numbers from scratch

>> A variety of useful cost calculators are available on-line

a free study guide for all EVU mini-courses is available for download from our website For a complete list of mini-courses and the study guide, visit: www.evannex.com

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