Sunday, November 6, 2011

It's Nice to Have Your Research Validated by the Dept. of Energy!

The DOE agrees with us! Yay!

Some of you may remember that I couple of months ago, I had a paper published by Harvard that examined the potential for electric vehicle adoption in the US.

Basically, our paper concluded that the prospect for electric vehicles are quite good (from a cost perspective, anyway):
This paper finds that, at 2010 purchase and operating costs, a PHEV-40 [plug-in hybrid electric vehicle, like the Chevy Volt] is $5,377 more expensive than an internal combustion engine or ICE, while a BEV [battery electric vehicle, like the Nissan Leaf] is $4,819 more expensive. In other words, the gasoline costs savings of electric cars over the cars’ lifetimes will not offset their higher purchase prices.
In the future, this cost balance may change. If one assumes that over the next 10 to 20 years battery costs will decrease while gasoline prices increase, BEVs will be significantly less expensive than conventional cars ($1,155 to $7,181 cheaper). Even when the authors use very high consumer discount rates, BEVs will be less expensive, than conventional vehicles although the cost difference decreases. PHEVs, however, will be more expensive than BEVs in almost all comparison scenarios, and only less expensive than conventional cars in a world with very low battery costs and high gasoline prices. BEVs are simpler to build and do not use liquid fuel, while PHEVs have more complicated drive trains and still have gasoline-powered engines.
As our paper discusses, whether people will put up with the relative inconvenience of electric cars (such as a relatively limited range and needing to recharge fairly often) is another matter, and as of yet quite unknown, even if electric cars are a good deal cheaper than gasoline-powered cars.

It appears that the Department of Energy agrees with our findings. The DOE put together a calculator that lets you compare the lifetime ownership costs of owning just about any vehicles - and their model is much more complicated than our model was, allowing you to customize your driving habits, select exact years and models of cars to compare, etc. Using the DOE's base assumptions, $4.50 gasoline (since I'm guessing that gas costs will continue to creep up over the medium-term), and DC's electricity prices, here's what the model comes up with when it compares cars similar to the stylized cars we examined in our paper (a 2011 Nissan Leaf, 2011 Toyota Camry, 2011 Toyota Camry Hybrid, and 2011 Chevy Volt):

One big difference is that our model discounted all costs back to one net present cost, while the DOE model looks at nominal cumulative costs, but the results are similar - the DOE's calculator also finds that electric cars are the cheapest option, while plug-in electric hybrids (like the Volt) will be most expensive, with traditional gas cars and hybrids falling somewhere in the middle.

It's always nice when an outside body validates your research!

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