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Chart on EV competitiveness from The Economist

Discussion in 'Energy, Environment, and Policy' started by Martini, Feb 1, 2013.

  1. Martini

    Martini Member

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  2. ChadS

    ChadS Petroleum is for sissies

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    They showing today's battery prices at $500-630 per kWh. Tesla sold me an extra 25kWh for $10k, which is $400 - retail.

    Looks like they aren't including incentives, either.

    Every BEV I've compared to a comparable ICE has a lower TCO today (although some of them are awfully close).
     
  3. daxz

    daxz Member

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    The chart does not seem correct for Battery Only\ Plug-in line.
    Why would a plug-in be better at:
    $6/gal gas with $300/kWh vs
    4$/gal gas with $360/kWh which it shows is better for an EV.
    I would expect line to be slanted to right not left as in the image at: Analysis: EVs headed for cost-competitiveness as battery prices fall
    2124.jpg

    There are lots of assumptions in these graphs.
     
  4. VolkerP

    VolkerP EU Model S P-37

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    The diagrams differ, but they agree in one point: No fuel price increase will make BEV competitive, unless battery costs approach $300 per kWh. With Tesla at $400 retail and 25% gross margin, I'd say it is one more iteration in Tesla battery pack design, then: game over for ICE :tongue:
     
  5. ChadS

    ChadS Petroleum is for sissies

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    Then both diagrams are wrong. BEVs are TCO competitive today (at least in the US). An 85kWh Model S, with leather and tech package, is $85k, and then you get a $7,500 federal tax credit and in many places a local tax credit. And from then on out you only buy electricity. An Audi A8 - the most similar car I can think of - is $80k, and then you have to buy gas. How is the BEV not price competitive?

    The 2013 Nissan Leaf starts at $28k. Subtract credits and in many places you are under $20k. Maybe if you ignore the advantages of electric drive and pick a cheap ICE rather than a comparable ICE you can point out gas cars that cost less than that...but it clearly won't take long for the fuel savings to overwhelm the price advantage of any car with anything near the room and driving experience of the Leaf.
     
  6. strider

    strider Active Member

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    Well, it depends on how long you intend to keep the vehicle. At some point the battery in the Model S will need to be replaced and when that occurs in the car's life will have a dramatic effect on its TCO. We also don't know what an 85kWh Model S battery will cost in 5-8 years. ICE maintenance costs do go up over time but you're never going to have a $35k hit in a single year (unless you have a catastrophic failure which is rare) but you will have that w/ a Model S. Looking only at gas costs I'm saving ~$3,000/year in my Roadster over my Corvette so I'm expecting to break even with gas savings paying for a new battery in 7 years assuming gas prices stay where they are. If the battery lasts beyond that (and I'm still driving it) then I'm making money.
     
  7. GeekGirls

    GeekGirls Kid in Candy Store

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    No owner needs to worry about what the 85kWh battery will cost in less than eight years, because Tesla warranties it for that long regardless of the mileage put on the car. Beyond that timeframe it gets interesting. Does anyone have a handy source for 2004 Li Ion $/kWh figures? All I could find offhand was a 2008 figure of $1000/kWh. Even with an ultra-conservative guess that prices are merely halved by the time my battery needs to be replaced that starts to look reasonable, and it's more likely that I'd be spending $10-15k for a higher capacity replacement.
     
  8. ChadS

    ChadS Petroleum is for sissies

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    #8 ChadS, Feb 5, 2013
    Last edited: Feb 6, 2013
    I disagree that how long you keep the vehicle has any effect on vehicle TCO - it just affects which owner experiences which parts of it. (And owners that sell cars after just a year or two are going to take a bath no matter what they buy). When I have run the numbers in the past, I have included battery replacement costs. If you want a known number for a worst-case BEV (one with a very expensive battery), $12k - plus interest - will get you a new 85kWh Model S battery. But the battery has an 18-year anticipated lifespan, so you don't have to replace it if the decrease in range doesn't bother you.

    If you don't want to pre-buy the battery, but do want to buy a replacement battery, but complain about not knowing battery costs in the future...well, we don't know gas costs that far in the future either. Given the direction battery and gas costs have gone in the past decade, I'd much rather sign up to buy a new battery.

    And regardless of what happens to future prices of batteries and gas, resale values should reflect future costs for the vehicles vs its alternatives. For example, look at the value of a 2006 Jetta with a gas or diesel engine. The diesel has a few minor disadvantages, but it goes for several thousands more because owners save a few hundred a year on fuel bills. Resale values depend on future costs (along with some other things that we should assume are the same among compared vehicles here), and future costs for a BEV are likely to be lower than for an ICE. (Likely, not guaranteed; gas could always go back to $1/gal. Then again, it could go to $20/gal. Uncertainty is always a risk when discussing future values).

    All that said, the 85kWh Model S is indeed testing the limits of being cheaper because it has the most expensive battery available, and the case for it being a superior TCO value is not as strong as with other BEVs (which I was originally discussing as a class).
     
  9. richkae

    richkae VIN587

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    #9 richkae, Feb 5, 2013
    Last edited: Feb 5, 2013
    I fixed their chart by putting in more realistic values to draw the box of "current U.S. prices".
    The gasoline price range is real 2012 data from the west coast of the U.S. Not all of the U.S. - just the west coast of the US - which I think is a big enough market to look at on its own.The right box is actual Tesla retail prices, and the left box includes current incentives ( including incentives, like the WA state sales tax exemption and a portion of the $7500 tax credit )
    Doesn't look so bad now eh?
    stupid.png
     
  10. strider

    strider Active Member

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    It's warrantied against defects, not loss of capacity. The battery WILL wear out - it's simple chemistry. Tesla takes very good care of their batteries but we simply don't know how long the batteries will last. Tesla's haven't been on the road long enough to be able to make accurate estimates. It also depends on how much capacity loss you can take and still go about your business. My wife's commute is 35 miles and she drives an 85kWh Model S so she could lose a massive amount of capacity and still be able to use the vehicle but others may be closer to needing their full battery.

    You're correct in that the TCO is what it is but while an ICE cost curve is generally an upward sloping curve (with the odd step-function for something like timing belt replacement), an EV cost curve is essentially flat until you hit a VERY large step with a new battery. Like everything you have to stop the TCO calculation at some arbitrary age and mileage. If you stop calculating before a battery swap the TCO for an EV will be dramatically lower than an ICE but if you take the calculation beyond where a new battery is required then the TCO for the EV will be much higher.

    Don't get me wrong, I'm all-in w/ respect to EV's but I worry that people are giving out misleading info if they act as though they get to "keep" the fuel savings when in reality they should plan to reserve the savings for a new battery, especially if they have a car with a smaller battery that will need to be replaced sooner.
     
  11. ChadS

    ChadS Petroleum is for sissies

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    I agree that you have to include the cost of batteries in TCO; I always have. But if you include vehicle resale value (which of course also belongs in any TCO calculation) then it's taken care of no matter when you sell the car. A car far from needing a battery will have very little lowered value. A car very near needing a battery will have a strongly lowered value. A car that just had its battery replaced will have full value. Yes there is a step in when the money is spent if you keep the car and resale value doesn't come in to play; but there should be no significant step in the TCO regardless of when you sell the car.
     
  12. Mycroft

    Mycroft Life happens

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    I just had to spend $1,500 for the 100k maintenance on my 2006 AMG, another $1,300 to replace the tie rods and a running light and I have to plan for a $2,500 job in 10k miles to replace the seal between the engine and the transmission.

    I think that the Model S P85 and high performance cars, (AMG/M/Porsche) are exactly on par.
     
  13. Dan5

    Dan5 Member

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    I agree with Chad S on this. Although an EV may loss value due to some battery degradation, regular cars take a noise dive alot faster. This is a paradigm shift in cars and car resale with EVs specifically when you consider a OEM offering different battery packs

    As an hypothetical example- in 8 years, if you had the 85 kwhr pack and had some degradation, it will probably have more capacity than the 60 kwhr pack. The interior and body may need some minor work, the gear box and motor probably will last a lifetime. I think for 10 K it could be restored to factory condition.

    Here's the kicker- if you did the restoration, and the Model S was still offered with the same body and technology, you could potentially sell it for a small discount from the 60 kwhr new one (plus you got the tax rebate).

    To put a regular car in comparable context, if you had an 8 yr old car that looked like new in terms of engine wear and a new car with the same engine wear and both looked the same, but the 8 yr old was 10% less, I'd go with the 8 yr old car.

    The other option is the intrinsic value of the batteries. Worse comes to worse- the car is beat up, dinged up, has food stains in it- I am talking completely TRASHED/demolition derby type destruction, etc, you sell the batteries to a solar company for $250/kwhr and scrap the aluminum/copper. Intrinsic value, it's 20 K, or 4 times what you could get for a comparable Audi in "rough" condition
     
  14. vfx

    vfx Well-Known Member

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    The Roadster pricing now may be an indicator that selling an electric car is like selling any piece of dated technology. That 3G Iphone that was 500 new now 55 used. It works just fine as a phone but it's not the latest greatest.
     
  15. dpeilow

    dpeilow Moderator

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    I wish they'd continued that chart upwards because in the UK and other parts of Europe we are way above those petrol prices. I'm intrigued by how the BEV line slopes leftwards.
     
  16. AndreN

    AndreN Member

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    Actually, why does the line slope leftwards? If I assume Rich's leftmost black box is accurate, if gas is at $4 a gallon I made a good decision buying my Model S, but if it goes to $6, I should have gotten a Volt? Why? So I can occasionally use some $6 gas instead of none of it? I don't get it. What am I missing?
     
  17. RDoc

    RDoc S85D

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    This chart seems pretty wrong to me. As others have pointed out, how can an increase in gas prices make hybrids more competitive relative to battery only cars? It makes me wonder what if the entire chart is valid.
     
  18. Martini

    Martini Member

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    The Economist is using McKinsey as their main source, so the battery/hybrid line should probably slope to the right in their chart, as it does in the McKinsey graphic. I imagine this is an error. The interesting thing is how different perspectives on long-run battery prices affects interpretation. The Economist sees this and says EVs will remain a niche, while others say EVs' time is coming soon. Time will tell.
     
  19. Dan5

    Dan5 Member

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    While I agree somewhat with the obsolesce approach. I believe one of the main reasons for cars depreciating in value is because they have wear and they change the models around. If the Model S does not change, now you are just talking about wear

    If you restore the interior/exterior and have some battery degradation, it would be very hard to distinguish a used 85 with 60 usable from a new 60 kwhr one besides the odometer. Nothing like that exists

    I think the Roadster is not the best product to use as a base case because of the limited Lotus market and people interested in those type of cars. I think people in the market are looking at a Lotus and it's depreciation and then using that as the baseline and there is no Roadster "level 2" offered with a smaller battery pack.

    With the Roadster- I wonder how it would look if Tesla made a Roadster Level 1, 2, and 3, with a 10 K price difference in each level. Would a potential buyer purchase a new level 2 Roadster or a used Level 1 roadster for the same price (or a few thousand cheaper), plus the bragging rights to say you have a Level 1 roadster

    Think computers in an accelerated level (6 months/1 year in computers = a 3-5 years in automotive). If you buy a top of the line computer in 2012, it may still be competitive with a tier 2 (half the price computer your computer 1 year from now) and you can still sell it for roughly the same price as a tier 2 computer.
    I know that was the case with the Clevos D900Fs. 3 years later and they are still quasi competitive with the tier 3 computers.
     
  20. Robert.Boston

    Robert.Boston Model S VIN P01536

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    Yes, the McKinsey graph posted by @daxz above has intuitive slopes (directionally). McKinsey optimistically used 240 Wh/mile for the EV; I wonder what it used for the car's MPG?
     

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