http://www.plugincars.com/rising-gasoline-prices-help-electric-cars-make-economic-sense-127740.html Rising Gas Prices Help Economic Case for Electric Cars By David Herron July 16, 2013
[image http://www.plugincars.com/sites/default/files/Gas-prices-rising-620.jpg ] Those of us who drive electric cars might be blissfully unaware that U.S. average gasoline prices have jumped nearly 15 cents in the last week. If the price continues to rise, as the U.S. Energy Information Administration predicts, then drivers of inefficient gas-powered cars could really start feeling some pain. But how far do gas prices need to rise, and how much pain must arrive at the pumps, before the balance of mainstream consumer interest tips decisively toward electric vehicles? Based solely on fuel price, electric cars are a huge win over gasoline or diesel powered equivalents. That's because electricity as a fuel is not only cheaper than gasoline, but its prices is more stable (thanks to a regulated electricity market). Of course, don't forget to add lower maintenance costs for electric vehicles on the ledger in favor EV economics. Apples to Apples? The national average price of gasoline is $3.67 a gallon, but what is the equivalent for electric fuel? We can't directly compare the two because electricity doesn't come in gallons. It's supplied in kilowatt-hours. Yet, there is a way to calculate the equivalency: according to the U.S. Department of Energy, the national average equivalent is $1.18 an eGallon. That's a whopping $2.50 a gallon in savings. If you want to perform the calculation yourself, here's the formula used by the D.O.E. to determine the price of an eGallon: eGallon ($/gal) = EP * FE * EC Department of Energy eGallon Methodology The entries in the formula are FE = fuel economy of a gasoline car (miles/gallon); EC = electricity consumption (kilowatt-hours/mile) for an electric car; and EP = electricity price ($/kilowatt-hour). This is a tool you can use to compare between specific gasoline and electric cars, while accounting for the price you pay for electricity. Tipping Point Obviously, savings go up when the gasoline prices rise, or electricity prices fall. It helps that many utilities grant favorable electricity rates to electric vehicle owners, especially if they charge their vehicle after midnight. But here's the nagging question: Are the savings at the pump enough for consumers to overcome any upfront price premium for an electric car? Battery packs are expensive. Many analysts believe battery pack prices will drop over the next few years, due to improvements in technology and economies of scale. A year ago, McKinsey Quarterly predicted a dramatic price decrease for battery packs by 2020 to 2025, and in May, G.M's chief executive Dan Akerson said the next generation Volt would be a lot cheaper. So, given that fuel savings help pay for the premium, fluctuations in gas prices are more likely to have an immediate impact on consumer perception about the economics of EVs, instead of falling battery prices that move on a more steady long-term incremental path. Regardless, at some point, there will be a major convergence, when the two trend lines—rising gasoline prices and falling battery prices—crisscross to tip the balance toward electric vehicles. We might get little previews of that future in the coming weeks as gas prices rise, but unfortunately, we don't when a major tipping point will occur. It could be a matter of weeks, or might take many years. [©2013 PluginCars.com] For all EVLN posts use: http://electric-vehicle-discussion-list.413529.n4.nabble.com/template/NamlServlet.jtp?macro=search_page&node=413529&query=evln&sort=date Here are today's archive-only EV posts: EVLN: Andretti Autosport Racing Electrics in September 2014 EVLN: 4500% Increase In UK's Electric Highway Use EVLN: Goodwood FoS: Podium Finish For Drayson Racing EV EVLN: Spark EV, The Best Electric Car You Can’t Buy EVLN: Tesla "confident" Model S production will increase by ~2015 + EVLN: How Long Do EV Batteries Last? Tesla Gives Our Answer {brucedp.150m.com} -- View this message in context: http://electric-vehicle-discussion-list.413529.n4.nabble.com/EVLN-Rising-Gas-Prices-Help-Economic-Case-for-Electric-Cars-tp4664380.html Sent from the Electric Vehicle Discussion List mailing list archive at Nabble.com. _______________________________________________ UNSUBSCRIBE: http://www.evdl.org/help/index.html#usub http://lists.evdl.org/listinfo.cgi/ev-evdl.org For EV drag racing discussion, please use NEDRA (http://groups.yahoo.com/group/NEDRA)
