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Ken Farrington

Before I get to the 4,000 gallons, I want to quickly mention something I thought was entertaining. In my last post I talked about the impact of the word "Electric" and to my surprise, I saw a quote last week from a carmaker saying "... we’re going to position this as a car first and 'electric' second …" - probably pure coincidence ... or maybe my audience is larger than I thought :)

Anyway, the 2 obvious barriers with EVs are 1) range and 2) cost.  Compared to golf carts that get about 10 miles to the tank/charge and SUVs that get about 300-400 miles, these current generation EVs are stuck in the middle at 50-100 miles.

If you're deciding between a traditional economy car that gets 400 miles/tank and costs $20,000 versus an EV that gets 50-100 miles/charge and costs +$30,000, it's a pretty straight-forward decision. But if you had to buy all your gas upfront, meaning 10 yrs worth or ~4,000 gallons (~$10,000) - that decision isn't so simple anymore!

And this is where the carmakers got it backward - they should learn from consumer electronics and go with the strategy of ... " Batteries NOT Included ! "

By separating the cost of the car from the cost of the fuel/battery (~$10,000), law and order is restored and we're back to a $20,000 economy car battle. Unfortunately, fuel expenses are now equal because your monthly gas expense just turned into a monthly lease payment for your battery but at least you don't have to worry about buying a new battery down the road if you decide to keep your EV for a long time. And if you do decide to sell your EV in a few years, your blue book value won't be a joke because now you only "own" the car but not the battery. The good news is that at least one EV carmaker is already headed down this path - you'll find them mentioned in this article "Who's got their electric car act together?"  

Sure there is still a range gap, but this will narrow over time and EVs have 1) improved acceleration versus traditional economy engines, and 2) their maintenance costs should be lower because you no longer have a gas engine or mechanical transmission. So they will fill a need, even though it will be a very small percentage of the passenger car market. Initially, it will be the traditional early adopters, but the next wave might be the generation currently in high school that will graduate from college later this decade. Their first car purchase might very well be an EV, and again, that sounds good to me because there will be a lot of silicon in those cars!

If you've got an opinion on this "electric" topic, I'd love to hear it! Later this month I'll discuss the real reason carmakers are rushing to get EVs on the streets. Until then, take care!

Ken 

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  • Ken,

    I'm going to have to agree with you for the most part on this one.  If potential buyers knew when purchasing an EV that they were paying for their energy upfront, it might seem more feasible for some to invest in their energy consumption now (assuming it is cheaper now versus later).  

    The proposition to lease the battery would also pose an interesting situation from a supplier and competitor standpoint.  By leasing the battery, it may potentially open the door for more than one battery manufacturer to supply batteries for each EV (i.e. the Leaf for now, but certainly more will be joining it).  Not only could this drive the cost of the batteries down due to competition, demand, and production, but it might be able to push OEMs to pursue a common form factor so that a single battery might fit in more than one EV.  As previously discussed, Better Place has been the early adopter of this idea as they've purchased numerous Leaf batteries in their effort to integrate into Israel's infrastructure with their battery swapping concept.  For now, they'll be the guinea pigs in their experiment to see if that option is truly practical.  From a charger perspective, this might also push the EV charging market in a very different direction...

    Either way, there will most definitely be a great opportunity to get as much silicon into these cars as possible!

    -Cam

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  • Ken,

    I'm going to have to agree with you for the most part on this one.  If potential buyers knew when purchasing an EV that they were paying for their energy upfront, it might seem more feasible for some to invest in their energy consumption now (assuming it is cheaper now versus later).  

    The proposition to lease the battery would also pose an interesting situation from a supplier and competitor standpoint.  By leasing the battery, it may potentially open the door for more than one battery manufacturer to supply batteries for each EV (i.e. the Leaf for now, but certainly more will be joining it).  Not only could this drive the cost of the batteries down due to competition, demand, and production, but it might be able to push OEMs to pursue a common form factor so that a single battery might fit in more than one EV.  As previously discussed, Better Place has been the early adopter of this idea as they've purchased numerous Leaf batteries in their effort to integrate into Israel's infrastructure with their battery swapping concept.  For now, they'll be the guinea pigs in their experiment to see if that option is truly practical.  From a charger perspective, this might also push the EV charging market in a very different direction...

    Either way, there will most definitely be a great opportunity to get as much silicon into these cars as possible!

    -Cam

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