From Model Ts to PHEVs: The Long Road to Global Impact

By Bill Moore

Posted: 19 Dec 2009

In 1903, the Ford Motor Company of Dearborn, Michigan introduced its Model T. It would remain the best selling automobile in the world until the advent of the Volkwagen Beetle half a century later.

In 1943, Los Angeles experienced its first serious "attack" of photochemical smog, due in large measure to automobile exhausts.

It took four decades for the successors of the Model T to impact the air quality of the Los Angeles air basin. Other cities around the globe have since followed: Paris, Tehran, Bangkok, Beijing. So, when critics point out that plug-in hybrids and electric vehicles won't have a significant impact for decades to come, I ask, so what? No technological revolution happens overnight. It took decades from the introduction of the first cellular telelphone, fax machine and micowave oven for their impact to be felt by society as a whole.

I point this out because there's been a lot of snipping going on in the media about the recently released National Research Council report entitled, "Transition to Alternative Transportation Technologies - Plug-in Hybrid Electric Vehicles," especially their costs due to their admittedly expensive batteries. The NRC estimates that vehicles like the Volt with 40 miles of Electric-First * driving range will cost $18,100 more than a conventional vehicle, with costs dropping -- under "optimistic" projections -- by only $5,800 in 2030 to $12,300. This is largely due to very conservative battery cost estimates by the NRC, which forecasts that even by 2030, the "probable" cost of a PHEV 40 battery will be $800/kWh. Even the "optimistic" projection has the cost at $575/kWh. What's curious about this is GM's John Lauckner recently stated that GM's first generation battery pack for the Volt is already well below the currently assumed cost of $1000/kWh, and EV World & Associates' Sam Smith reported recently that current costs are now under $600 kWh.

But let's assume that the NRC's numbers are reasonable estimates and that a PHEV40 similar to the Volt will be $18,000 more than a comparable non-hybrid vehicle. What's that mean over a 10 year, 150,000 mile operational lifetime?

First off, it translates into an immediate 12 cents/mile cost over the IC-engine only vehicle, which the NRC assumes gets 30 mpg. I think that's overly optimistic, so I assume that in city driving, the ICE gets 25 mpg. It makes the math a bit easier. Okay, let's get down to it.

A 25 mpg car operating for 150,000 miles will consumer 6000 gallons of fuel. Since we're talking about vehicle projections out to 2030, I assume that oil is not going to be $75 a barrel or $2.39 a gallon in 2025 either due to the impact of peak oil, carbon taxation or both. For the sake of argument, I peg the price of a gallon of gasoline at $5 a gallon in the United States in the 2020's time frame, giving you a total fuel cost over the 10 years of $30,000.

Now, the PHEV40 will run 40 miles on electric power, which meets the daily demand of 85% of US drivers. Let's assume that 350 days out of the year the Volt owner drives 40 mile or less. That's 14,000 miles on electric power only. 1,000 miles would be in extended range-mode, and here I assume a somewhat conservative 40 mpg. That means of the 150,000 miles over ten years, 10,000 uses some form of liquid fuel. That means Volt-like PHEV40's will burn 250 gallons of gasoline or ethanol, again at $5 a gallon, equaling $1,250 for over ten years. The NRC report assumed a per kilowatt price of under 10 cents. I assume a price of 15 cents/kWh. This equates to $4,200 in electricity costs.

Let's add them up. The ICE will burn $30,000 worth of gasoline over the decade or the equivalent of 20 cents a mile. The PHEV40 will have an operational cost of $5,450 in energy PLUS the $18,000 for the battery pack for a total of $23,450 or 15.6 cents per mile.

Not included in this is the cost of installing a home charging unit, or any potential revenue earned by participating in Vehicle-to-Grid reimbursement programs that could generate a conservative $1,500 annually, which over 10 years could reimburse the owner as much as $15,000. Conceivably that could drop the PHEV per mile cost to 5 cents.

This is before any federal incentives and subsidies, which I assume will have faded by the 2020s. The NRC report also assumes the need for significant public charging infrastructure costing tens of billions of dollars, which may not be as necessary with PHEV40s as might be assumed. Here in the Moore household, we drive a PICC-converted Toyota Prius with about 20 miles of EV-driving range (PHEV20) and find that we simply don't need public charging. We can easily charge our 6.1kWh battery pack overnight using 120V household current. The cost to connect the car was under $25 for a 12 gauge, 25 ft extension cord.

For the sake of argument, let's assume that besides PHEV10s and PHEV40s, there's a third classification, PHEV20. Assuming a 7 kWh battery pack and subsystems like BMS, charger, etc. at $800/kWh equals $5,600 in additional cost over a comparable hybrid vehicle, not the ICE, since you need the electric drive system, inverter, etc. How do the numbers work then? They still favor the PHEV20 over the HEV despite the NRC's strong support for the latter in its report.

Assume the HEV averages 45 mpg over 150,000 miles. It will burn -- again at $5/gal -- $16,666 of fuel. Now since 20 miles is about 10 miles short of what most US consumers drive in a day, some of its driving will be in HEV mode. Based on our two months of experience with our PHEV20, I allow for 75 mpg fuel economy over the 150,000 miles. That's 2000 gallons of fuel over the decade or $10,000. Add the $5,600 to the $10,000 and you're still ahead by a $1000 and you've used nearly 7,000 gallons less fuel, 60% of it imported at $150 a barrel or higher by 2024. Importantly, a significant share of this energy comes from locally generated electric power with maybe as much as 20% or more of it coming from renewable sources, again in the 2020's time frame.

But as with the growth of the automobile from Mr. Ford's garage in Dearborn to the smog in 1940's Los Angeles, it will take decades to change what has been a century in building, but it will be worth the expense and effort; and as most of the critics underplay or just ignore, we don't have a choice anymore: electric mobility in its myriad manifestations from YikeBikes to high-speed rail is the only way forward in this century.

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