Apparently my blog isn't the only thing that has risen from the dead. FastCompany ran an article a month ago about the downfall of one of the companies I worked for: Better Place. The company had folded over a year ago; I'm not entirely sure why now would be a relevant time to discuss them, but I'm glad Better Place is getting talked about again. I had a lot of respect for what they were trying to do, which was to make EVs financially attractive.
Electric cars are remarkable. The powertrain is 80-90% efficient, compared to a gasoline car's 10-20% efficient engine and transmission. This makes a huge difference in operating costs. If you put $20 worth of gas in a 22mpg gasoline car, you'd get 120 miles before the tank runs out [1] at today's gas prices of $3.70/gal [2]. If you put $20 worth of electricity in something like a Tesla Model S, you'd get 670 miles before you run out of juice [3]. Electric vehicles are so economical to run because 1) the powertrain is so efficient, 2) the electricity to run them is so cheap. The problem is the battery is pricy, so even though an EV is less expensive to run, people won't buy them because their upfront costs are too high (consumer discount rates w.r.t. energy efficient appliances, EVs included, is a fascinating energy economics post for another time).
Let's do what Shai Agassi likely did when he decided to found Better Place and look at the economics of EVs relative to gasoline cars. We already did the math saying EVs are about 6x cheaper/mile to run. If we take Tesla's quoted cost of the replacement battery of $10K, how far would we have to drive to make up that cost difference? With $3.71/gal gasoline, $0.10/kWh electricity, a 22mpg gas car vs. a 3mi/kWh EV, it comes out to be about 70K miles: less than the standard lifetime mileage of a car, but not much less. There's a business case to be made, but not much of one given the slim margins.
What about Shai's home country of Israel? Turns out they pay about the same electricity prices as we do, but pay far more than we do for gasoline: $8/gal [4] [5]. That means $20 would only get us half as far: 55 miles in Israel instead of 120 in the US. Taking this into account, we would only have to drive 30K miles to make up the additional cost of the battery. Everything after that would be savings to the customer, or profit to a company. This is a far more promising business case, and indeed it was the case that Better Place was founded on.
The math here is greatly simplified. We simply talk about the marginal cost of the battery pack, when in fact there's other cost differences that bring EVs more in-line with gas car costs. We also neglect infrastructure costs, which might matter if you're trying to build something expensive like battery swap stations like Better Place or superchargers like Tesla. The lessons learned from the exercise don't change though; EVs make sense now, and Better Place wasn't founded on some idealist's whimsical fantasy.
Dead ideas like amateur blogging or voyeuristic post-mortem news articles might keep coming back long after we thought we buried them, but live ideas with a spark in them, like electric cars, will always stay alive and kicking.
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[1] Idaho National Lab vehicle energy cost comparison: http://avt.inl.gov/pdf/fsev/costs.pdf
[2] EIA gasoline costs table: http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_w.htm
[3] Tesla Model S powertrain specs: http://en.wikipedia.org/wiki/Tesla_Model_S#Powertrain
[4] Israel electricity prices: http://www.eia.gov/countries/prices/electricity_households.cfm
[5] Israel gas prices (surprisingly hard to find): http://www.timesofisrael.com/gasoline-prices-to-drop-slightly-saturday-night/
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