U.S. Battery, Plug-in Car Push Costs Exceed Rewards, Study Says

i believe the same was said for gasoline-cars...some (hundred) years ago...

 

More expensive oil... a given, more efficient power grip... possible, battery breakthroughs - technology innovation through larger mass production... maybe

 

I just want my nuclear powered flying Jetsonmobile.

 

Here is a simple math. Over the life of the car (150k miles):

Regular 50 MPG midsize Prius would consume 3,000 gallons.

A compact Volt rated 60 MPGe would consume 2,500 (equivalent) gallons.

It costs tax payers $7,500 to save 500 equivalent gallon of gas. That's $15 per gallon.

 

As much as I despise the volt, it is really hard to make a 60mpg assumption for lifetime average. If grandma uses it to go grocery shopping every week and never puts a drop in, that is different then the guy who criss-crosses the country with every 30 of 2000 miles in EV and the rest and 35mpg.

If grandma used a prius, she would be lucky to get 40mpg. If whats-his-face used a prius, he would get at least 50mpg.

 

Your math is wrong.

A tax credit of $7,500 moves money from some US taxpayers to another US taxpayer. Net cost to taxpayers is $0. It costs $0 per gallon saved.

A Prius is 100% imported, say -$20,000. Volt is about ~50% imported, say -$20,000 so cost of the car is about the same to the US economy, except of course that the Volt also moves wealthy people's money to a US company for reinvestment while the Prius money largely goes to Japan (and China).

 

Point being though, if we don't encourage innovation and get real world experience to expand from, nothing will ever happen, US auto held back better gas mileage, hybrid technology, electric vehicles, all because they preferred to keep status quo, when in reality they lost market share. Japanese on the other hand, bought US rights, expanded technology, improved vehicles, pushed hybrid technology, and now pushing electric technology, much with Japanese government support.

 

It is not an assumption. It is rated by EPA as 60 MPGe. Here is an explanation by GM.

 

Let's not forget about diminishing returns. Consider the gas difference between the plug-in Prius and Volt. The amount of gallons won't be much, especially when put in perspective with even a 40 MPG vehicle.

Then there's the reality that the plug-in Prius will each far more consumers with such a lower base price.
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That just means that the assumptions were made by the EPA rather than someone in PriusChat.

The basic idea that mileage may vary by usage is sound (and included in the caveats given by the EPA).

 

Which is why the real gains are at the lower end of the mileage spectrum. The return on improving from 50 mpg to 60 mpg is nowhere near as good as going from 15 mpg to 25 mpg. Even at the same percentage the gains are better for low mileage improvements, since inefficient cars burn more fuel for the same distance traveled.

Tom

 

You have a point there but that's not the topic of discussion. A quick search says Volt's domestic content is 40%.

The point of the article is the cost effectiveness of incentive. The way we "redistribute" tax dollar to save gas (and equivalent) could be better if we put some toward regular hybrids. That gives the most bang for the buck.

50 MPG Prius deserves $3,500 and 60 MPGe Volt deserves $4,000 if we go by MPG(e). It has been proven that going by the battery size does not produce the desire outcome.

 

They are missing the point of those incentives. We KNOW that incentives aren't a cost-effective way to cut oil (especially combined with incentives to produce oil). We want to promote research and development in these technologies so that later we will have something other than empty tanked gasoline powered cars.

 

It's too bad that incentives are not scaled with MPG, such as a credit of $250 for every MPG over CAFE. Offer up $5000 for the 50 mpg Prius vs. $7500 for a Volt or Prius PHV and you'll get a lot more people buying them as compared to a 25 MPG Camry V6. The political crap in this country is so frustrating. It costs money to increase efficiency, but at least that money can stay here, as opposed to being transferred to Venezuela and the Middle East. The problem with letting the price of fuel drive demand and innovation is that fuel is in an unstable equilibrium, with sharp upward movements causing recessionary shocks to the economy, and downward movement leading simply to increased consumption. The Volt may not be all that but if people buy it over a Malibu or Cruze due to the incentive, then it is still a win overall.

 

This is a very good point. If an incentive is cost effective in and of itself, it really isn't an incentive. The word "incentive" comes from "incite", which means "To move to action; to stir up; to rouse; to spur or urge on" [1913 Webster]. Incentives are used to get things started, not because they make sense long term.

Tom

 

I presume you meant "Sorry, my statement was completely wrong."

You can't be simplistic and just say that a tax credit "costs" when it doesn't inherently cost anything. The value of the tax credit is the net impact.

There are three problems with continuing to give money for hybrids:
- There's already a net gain for higher mileage drivers
- HEVs are well-established so additional incentives would do nothing to advance technology (just consider that Toyota are only releasing the PIP because the market forced their hand.)
- The net cost to the economy would be negative and have no prospect of being positive.

The incentive isn't structured to maximize short-term reductions in petroleum consumption. It's structured to encourage battery development and BEV in order to reduce petroleum consumption in the long term.

If they wanted to focus on short-term reductions they could simply match emissions regulations with the European Union to encourage diesel ownership.

 

I'm not quite sure your math is correct either

If I am thinking about this correctly, if no one claims the tax credit, the our tax revenues are unchanged.

If people claim the tax credit, tax revenues go down. Those tax dollars could be spent elsewhere. Either you have to increase taxes, increase debt, or spend less.

If the government gave tax credits to people purchasing white elephants, is the net cost to taxpayers zero as long as the white elephant is sold by a US company?

 

In any closed system net value remains unchanged. In this respect you can make your argument that the net cost is zero, but it is a bit disingenuous. For a good example, take the stock market. When the bottom dropped out, no money was lost, but the distribution of money was moved about.

Getting back to the example at hand, any tax credit potentially reduces tax revenue. Any reduction in tax revenue must be matched by an increase in public debt, a reduction of public spending, an increase in other taxes, or some combination of the above. Dollars may not be created or destroyed, but there is an economic impact.

Tom