EV Sanity

Finally, at long last, there’s word that Nissan might give Leaf buyers an option about battery size.

Long-time readers of this site know that I’ve been pushing for this for quite some time. Instead of trying to guess which one battery size will make your EV product offering the most profitable, why not give the customer at least two options, as Tesla does? I would go even further, and present Leaf shoppers with a deal like this:

  • Buy/lease the car with the standard 24 kWh battery, the size currently found in all Leafs.
  • Or you can buy/lease a Leaf with a Bigger Optional Battery (BOB), say 48 kWh, for twice the driving distance per charge, at an additional cost of $X.
  • If you choose the standard battery, you can upgrade to the BOB within the first 3 months for $Y, which will be something like 1.1 times $X. If you want to upgrade after the first three months, it will cost you more, perhaps 1.25 times $X.

(Obviously there are several knobs one can twist in this offer. Maybe you make the trial period only one or two months, and you can tweak the upgrade pricing, but you get the idea.)

I am convinced that unless Nissan and other EV makers do something like this they’re stubbornly giving away sales to gasoline vehicles. “Range anxiety” is a very real thing, and the surest way to wring it out of the customer base is by giving them first-hand experience with EV ownership. I know from experience that once you adjust to the EV lifestyle, meaning you exchange occasional trips to a gas station (plus the delightful gasoline smell, and the higher cost), for plugging in your car in your garage every night, you never want to go back. I sure don’t.

As for the cost of car batteries, it’s been well documented that they’re getting much less expensive, as in a 40% Drop In EV Battery Prices From 2010 To 2012. With continued gains from minor technological improvements plus economies of scale as the EV industry continues to ramp up, I wouldn’t be surprised to see battery prices drop another 30 to 50% in three years. That will bring us much closer to the tipping point for EV adoption in the US.

Speaking of which, let me propose a metric for that. Say you drive your car only 10,000 miles per year, and that your fuel cost for electricity vs. gasoline yields a net savings of 10 cents per mile, and further that you’ll keep your car for five years. That’s a fuel cost savings of $5,000 over the five-year ownership period. There will certainly be other savings — an EV needs much less maintenance and repair than a comparable gasoline vehicle — but I’ll ignore those for the moment.

So, if you start with a $28,000 Leaf S and knock off the $5,000 fuel savings, you’re down to an effective price of $23,000. Which leads me to my metric: How close is this to the price of an entry-level Honda Civic? About $5,000 short, to be exact. As that price gap narrows, EVs will become ever more attractive to US drivers.

Notice that I’m not taking into account the current $7,500 US tax kickback, or the (sometimes generous) state-level tax breaks, nor am I accounting for the low resale value on EVs, which is largely influenced by those same tax breaks.

I fully expect/hope the next Leaf iteration, due in 2015, will offer:

  • Somewhat revised styling, but maintaining the five-door format and the bug-eye headlights (which I really like, just for the record).
  • A lower price, with the S model coming in around $24,000.
  • Improved battery range, say 100 miles instead of the current 75. (And to be clear, on a 100% charge and without running the heater or AC, I can get 110 miles in my Leaf. And I certainly don’t drive like a little old lady.)
  • At least one optional battery upgrade.

Oh, and can we stop the idiocy of public chargers anywhere except places where people will be parked long enough to actually, you know, get a decent amount of battery capacity restored? Putting in chargers at office buildings, airports, and hotels, for example, makes sense. Stay at the Marriott and get a free EV charge, work here and you get free charging, etc. But the push for public chargers in places where people won’t be leaving their car for at least two or three hours, at a bare minimum, is nothing more than a useless effort to assuage peoples’ range anxiety.

Just to put some numbers on this, charging my Leaf via a 120 volt (Level 1) charger means I can get about 5.5 miles of driving per hour that the car is plugged in. So at Level 2, which is what most public chargers use, gets you 11 miles/plug-in hour. If my local grocery store has free Level 2 charging, it won’t help me much. Even a long trip for my wife and me to the grocery store is under an hour, which means we’d get about 11 miles of free electrons after driving 5.2 miles (in our case) to buy food.

And as EV batteries get larger, charging rate will become an even bigger issue. What we need is either the BBB (big battery breakthrough) that decimates battery costs or a technological advance that allows for repeated really fast charging without damaging the battery. Even with the uber fast Tesla chargers we’re still not there on the second point. But on the first point, we’re getting closer.

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