Wednesday, July 28, 2010

The inefficiency of Electric cars

Buying these cars is the same thing as throwing out almost $20,000 dollars (the price of a Chevrolet Malibu starts at $21,800). Note that these costs don't include the cost of replacing the car batteries after four or five years. From the Washington Post:

The long-anticipated Chevrolet Volt, General Motors' electric car, will cost $41,000, the company announced Tuesday, leaving consumers to decide whether its environmental appeal is worth a price far above that of similarly sized conventional autos.

Electric-car technology has been around for years, but the high cost to make the vehicles has prevented automakers from producing them for the mass market. The price announcements for the Volt and its electric rival, the Nissan Leaf, have been highly anticipated as a result. Nissan, the only other major manufacturer expected to bring such a vehicle to market this year, said the Leaf will cost $32,780.

GM and Nissan are relying on a $7,500 federal tax credit for buyers of electric vehicles to offset some of the added cost, and they're hoping that the allure of their novel power source will make up the rest. . . .

UPDATE: This does not look very promising.

For the price of the Volt, you could buy almost two hybrids from competitors. But in these early days of electric vehicles, a cold economic analysis doesn't really apply. . . .

GM figures that if you drive within the Volt's 40-mile battery range, it will cost $1.50 a day to drive, compared to about $3.50 per day for a 30 mpg sedan. . . .

So let's take those numbers, that I assume are picked by GM to make the car look at its best. At $2 for a whole year that comes to $730. Even assuming a zero interest rate, over ten years that comes to $7,300. That doesn't come close to make up the cost difference.

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