Posts Tagged ‘electric cars’

A knock I hear frequently about electric vehicles (EVs) is that they require government subsidies to sell well rather than letting the “free market” decide. I’m assuming “free market” refers to dealer network and government collusion and externality benefits of petrol fueled vehicles. However, I usually have to distinguish between a tax credit (which is NOT a subsidy) and a tax rebate (which is a subsidy). The federal tax credit afforded to EV owners is often (incorrectly) labeled a “subsidy” by anti-EV folks. However, the federal tax credit for an EV purchase is limited to the buyer’s federal tax burden.

If you have no federal taxes, Uncle Sam does not cut you a check for $7,500. If you only have $5,000 federal taxes owed at the end of the year, you also don’t get a $2,500; you just don’t have to pay the $5,000 in federal taxes. In short, it’s you keeping more of your own money (which is why it’s called a tax incentive) rather than you getting someone else’s money (which is why it’s NOT a subsidy).

State issued tax rebates are subsidies. Not having to pay for the health problems caused by driving a petrol powered car is a subsidy.

Anyone following the rise of electric car transportation has often heard gripes from anti-EV folks about a “dirty grid”, “subsidies”, or even how EVs allegedly produce more pollution during their manufacturing than what is produced for the entire life of an internal combustion engine. Wired magazine even go into the mix with their (bunk) article talking about how EVs aren’t as green as you think they are. I’m not going to link to any of these “articles” because they are, quite frankly, gibberish. They often make claims such as lithium being a rare earth material (it’s not) or that Tesla uses permanent magnets in their motors (they’re AC induction, so they don’t; and Tesla gets all of it’s cobalt in North America).

Instead, I’m going to link to articles that provide insight into an often overlooked topic of internal combustion engines (ICE): externality economic benefits afforded to ICE manufacturers. As is turns out, driving in rush hour traffic is potentially twice as hazardous to your health than currently believed. This externality benefit is afforded to car manufacturers who are making ICE. They incur relatively zero cost for developing a product that produces emissions that the manufacturer has zero responsibility for. This is a tremendous economic benefit afforded to ICE manufacturers. While they are responsible for containing the pollution produced during the manufacturing of their product, they have zero responsibility for the pollution created during the usage of their production AND there is no way to use their product without producing pollution (unless you put the car in a museum).

One might argue that the driver should be responsible for that pollution or that the driver is responsible for the pollution because of paying taxes on gas. Let’s not pretend that the taxes on gasoline are even used for their intended purpose of rebuilding roads let alone healthcare costs incurred from the pollution caused by refining and burning gasoline. Also, the manufacturers of ICE don’t provide (or even have) the ability to collect pollution, so we’re stuck with tailpipe emissions spread to someone else’s property and effecting their lives. These effects are very costly, and the burden (as detailed in the RAND report I’ve linked to) is on health insurance companies, or government, and individuals deprived of their health liberty due to no action of their own! Certainly, one’s own rush hour car pollution is enough to kill them dozens of times over, but I digress… Perhaps the health insurance companies could lobby to get their money back?

The solution is fairly simple. Place a health insurance tax on the manufacturer of ICE vehicles that cannot be passed along to the consumer unless that consumer is a government agency. This tax would be paid to companies and individuals paying for health insurance to help offset their increased medical costs due to the products developed and sold by ICE manufacturers. The tax would be based upon the pollution (we’re not just talking about CO2 but ALL air pollution) produced by a vehicle from driving it 10K miles per year with the average life being 10 years for the vehicle and adjusted annually for the increased pollution that an ICE produces as it ages (which is the opposite of what happens with EV since grids are becoming cleaner each year).

The results from this would be reduced out of pocket medical costs for individuals since they are no longer subsidizing ICE manufacturers, a likely bankrupt automobile industry as electric cars would suddenly become significantly less expensive than ICE, and we can finally get rid of those tax incentives for electric vehicles that anti-EV folks love to complain about! Joking aside, there are considerable health costs that ICE manufacturers are causing by continuing to manufacture products that have no method to avoid. Taxing the manufacturers for their externality benefit they receive at our expense is a potential way to provide those manufacturers with incentives to make better products that are less detrimental to our health and puts the financial burden on the industry directly responsible for substantial increase in healthcare costs over the last half century.

Development of the 2016 Chevy Volt is well under way, and it doesn’t seem like GM is giving many hints as to what is going to change with the v2.0 of the Volt. The latest Volt production has slightly more battery range than the first version of the Volt, but there is no guarantee that will remain the case. There have been suggestions of adding a fifth seat and reducing overall battery capacity, among many other rumors (including a minivan version). The only thing that seems to be guaranteed with the 2016 Volt is that it will retain it’s signature look (which means it’s not going to look like a weird space ship like the Nissan Leaf).

Here’s what I think GM should do with the Volt that would make it the most popular electric car in the world!

  1. Ignore the vocal minority about the fifth seat. Sure, there are people who will swear they’d buy the Volt if they just had that magical fifth seat. I’m calling BS on that. Most commuters are driving by themselves. So, this idea that Volt sales will have a massive leap forward by reducing battery capacity to fit a fifth seat is a farce.
  2. Reduce the engine size and increase efficiency. From what it looks like, GM is already on this. The reduced weight and better efficiency will make for better electric range in the first place!
  3. Increase the regenerative braking. Anyone who has driven a Volt in traffic knows that dropping the Volt into L will make your range that much better as well as reduce brake usage significantly. Take it a step further, GM! Give a regen option like the Tesla Model S where it’s so aggressive that you turn the brake lights on. Allow the customer to turn it on or off because there are a ton of drivers that don’t understand regenerative braking and will be bringing it into the dealerships over and over because they think something is wrong with the car.
  4. Ditch the flywheel transmission. Yes, the Volt does have a flywheel that will engage when going up a hill and the vehicle is in mountain mode. The idea is that it gives just that much more oomph that will help you get up a steep hill faster. Outside the Grapevine in Southern California, I can’t think of many other places that have hills that are so steep for so long.

    Here’s an example: You can drive from Santa Cruz to Pleasonton, CA on a fully charged Volt! Again, insane, right? That’s more than 50 miles, and there’s a giant mountain in your way! The Volt only goes 38 EPA electric. Except that the real world and EPA are completely different. I have made that drive in a Volt before. In fact, I almost made it to Dublin from Santa Cruz, and I’ve been able to go nearly 60 miles on a single charge (on several occasions) without driving 20 mph. You drive up the mountain from Santa Cruz and the downhill is so long that by the time you pass the Cat Tavern, you’ll realize that all the battery it took to get up the hill is coming back to you and then some!

    Ditch the flywheel, GM! The electric motor is plenty.

  5. Offer an option with triple (or preferably quadruple) battery range. Sounds completely insane, right!??! Here’s the great news. The Volt uses 10.9 kWh of it’s 16.5 kWh battery capacity (roughly 66%). My understanding is that this was done to avoid the horrors of battery degradation, but batteries are getting better and better for both capacity and less degradation. Given the current EPA rating of 38 miles electric, the Volt’s true electric range is roughly 57 miles before becoming a brick. Of course, real-world scenarios (like the Santa Cruz to Pleasanton drive I mentioned above) could mean range upwards of 90 miles!

    GM should stick with at least a little bit of cushion on their battery for warranty reasons alone, but 33% is definitely too much. Take it down to 20% on the existing battery configuration. That’s a software upgrade, so even existing Volt owners could get an electric range of roughly 46 miles by just getting a software upgrade.

    What will capacity be with battery technology for 2016 production? Most likely at least another 4 miles EPA with the existing 33% battery reserve. That means we could be looking at roughly 50 miles when we combine battery efficiency improvements with the software update I’m talking about.

    Back to increasing total battery capacity… Chevy Volt batteries are on the market to consumers for just over $2600, which means that GM is paying significantly less than that for the battery packs they’re putting into the Volt during production. The trick would be to figure out the proper configuration for being able to triple physical capacity. There’s a limited amount of space to work with, but I’m betting that the Volt can definitely be made to support 3-4x the battery capacity. Reduce the size of the gas tank or even take it out all together (which would then mean you can get rid of the gas generator completely, and could likely get up to 5x). Even if we took the $2600 retail price of the battery price, it would add $7800 to $10400 to the sticker price of a Volt to have 3-4x the battery capacity. Sans a motor and gas tank, and that would theoretically drop costs for GM as well.

    Is there a market for a $45000 electric car that can go nearly 200 miles (the additional battery weight will reduce mileage, so it’s not just a projected electric range x4)?

    I’m betting there’s a HUGE market for that type of car at that price point! If GM can still keep a small engine and 2-3 gallon gas tank to give you the extra 90+ miles you might need from time to time, then you really have an amazing electric car offering! No, it’s not the performance of a Tesla Model S, but it’s also a fraction of the price.

    Going with the increased battery capacity and smaller gas range extender, this Volt configuration would likely net buyers the full federal and state rebates. So, the out of pocket cost on this type of Volt would be roughly $35000 ($45000 minus $7500 federal and now $2500 state) in a state like California. Seems like an excellent option to me!

  6. Offer an option to have a 6.6KW charger with the larger battery capacity and utilization. Studies are showing that DC fast charging doesn’t have much of an impact on battery life. The Volt takes roughly 4 hours to charge with it’s existing battery setup. Recharging a fully depleted battery would then take 16 hours… Not a good thing. The larger battery capacity would need at least double the charging rate. Better yet, quadruple the charge rate at the same time! 180 miles in 4 hours would be phenomenal, and probably unnecessary.

    One need only look at the stats that you can find in the Volt smartphone app to see that there are plenty of people pushing over 2000 miles per month in EV miles. That’s roughly 67 EV miles per day, which means that Volt owners are pushing their Volts’ EV range daily! There’s clearly demand for more electric range, more so than a fifth seat.

  7. Offer the Traverse as a Volt. Don’t go with the small MPV that many have been suggesting is going to happen or something small like the Equinox. The Traverse is a legit SUV rather than a crossover. It seats 7-8 people, and GM could easily get 5-6x the battery capacity of a current Volt into something the size of the Traverse. Sure, the weight will mean that the Traverse Volt doesn’t go 300+ miles, but imagine an SUV that goes over 200 miles electric with another 90+ miles range extension that starts at roughly $50k! That’s going to be nearly half the price of a Tesla Model X. Sure, it won’t be as cool, but $40K is a lot to pay for cool.

It’s been suggested that GM doesn’t make any money on the Volt right now. That might be the case, but I’m betting that with everything I list above GM would be making a profit on these types of Volts!

Some of our largest environmental problems have not been caused by who you might think. Often, environmentalists cite the Bush Administration or “capitalists” as causes for major environmental problems. Yet, the contributors to some of the largest environmental problems we face today are none other than environmentalists. They are environmentalists who jump on the band wagon of plastic vs. paper bags or electric cars or ethanol fuel.

Plastic saves trees but bio-degrades only after 900 years, is made from crude oil materials, and has amassed such a large pile of garbage that there is now a massive island of trash floating in the Pacific Ocean

The electric car is a mythological zero emission vehicle

And bio-fuels will lead to deforestation.

Don’t contribute to the problem, educate yourself by listening to my radio show this weekend. Dean and I have some great guests on the show, and we’ll be talking about environmentalists who damage the environment.