Chevy Volt/Nissan Leaf: A Complete Joke
I was filling up the tank on my Honda Civic yesterday. I had never considered an electric car/hybrid, but at $5.09 a gallon and climbing, I thought I'd research the Leaf/Volt. After about 20 minutes of research, I couldn't believe that there are people who actually purchase these cars, with the purpose of SAVING MONEY.
I put together some very basic linear models, comparing the 2013 Chevy Volt to the 2013 Honda Civic.
Volt MSRP: $39,145
Federal Tax Credit: $0 - $7,500
Let's assume a driver is eligible for a $4,000 Tax Credit. This brings the pre-tax price of a Volt to $35,145. In contrast, a Honda Civic runs MSRP $16,000. Let's assume that each car has a 12 gallon tank, and that gas is fixed at $5 per gallon ($60 per fill up). Also assume the Volt has to be filled up once a month, while the Civic has to be filled up once a week. Lastly, assume $1,500 for charger installation, $2/day electricity charge, and that repair/maintenance will even out between the two cars (major assumption). I graphed the data using the following formulas:
Long Term Volt Cost: ($2 * # of Days) + ($60 / (# of Days / 30)) + 35645 + 1500
Long Term Civic Cost: ($60 / (# of Days / 7)) + 16,000
Map this out in Excel, and the Volt doesn't beat the Civic until over 12.5 years later! Even if I revise the estimates to $6 per gallon, it still takes the Volt 10 years to catch up. Obviously, the assumptions may be overly simple, but the point still stands. People are purchasing these cars with the idea that they'll save money long term, but it's kind of ridiculous. Anyone feel differently? Anyone else think that Nissan and Chevy's marketing departments are doing a killer job at fooling the public? Would love to hear thoughts.
This is the story with all the electrics. Even with wealth redistribution they are barely break even and in many cases still don't get there.
When gas prices started to spike you know what happened? People sought out and bought the Geo Metro, which tied the Prius for fuel economy at 42 MPG.
http://en.wikipedia.org/wiki/Geo_Metro
(towards the end)
How much of our money does the government waste when simple market forces push people to drive less and seek out fuel efficient cars.
I also ran the same numbers when the Volt came out. Let's just say I'm not surprised I've never seen one in real life.
I'm going to say that the Prius is your best bet at saving money.
A few quick counterpoints:
1.) Economic reasons are not necessarily the only reasons for buying a Volt. (i.e. environmental concerns)
2.) This may hold true for current generation electric-only cars, but the technology will only improve. Imagine the possibilities of electric cars sold ten years from now. Think about a company like Tesla and what they're delivering and the promise of what's to come.
3.) I'd argue that anything that helps us progress towards greater energy independence is a good thing. Given that peak oil is a reality and there may very well come a time in the not-too-distant future where demand for energy greatly overtakes the supply of energy (in the form of oil), I think it's prudent to invest in vehicles that don't rely on gasoline.
4.) TNA - yes, one could drive a Geo Metro, but it's also an ugly piece of shit. It's not unthinkable to believe that a person would be choosing between $30,000 cars and choose a Volt over a Taurus or a low-end Lexus. Cars are (often) not only purchased based on the dollar for dollar return on investment. If that was the case, no one would drive a Mercedes or a BMW.
5.) If people buy it, there's a market for it. This isn't so much a defense of the products or investments in alt. energy so much as it is a defense of markets in general. If people want to spend their money on stupid shit, then there is a market for that stupid shit.
In all seriousness, though. I am definitely in favor of some subsidizing of alternative energy resource development and technology. The free market may act quickly, but it's not terribly effective at long-arc allocations of resources. We won't be able to shift from oil to solar overnight if there is a legitimate oil supply crisis unless we prepare for it ahead of time, and the market alone won't allow for that.
For any doubters, check out Chris Martenson's stuff. I posted his crash course in my blog a few months back, really worth checking out if you've got even an inkling of interest in the stuff.
I don't know man, yeah the Geo is ugly, but you aren't getting environmental gains from the select few who can drop $30K plus on a car. You need large scale adoption and you find this with the lower spectrum.
All I know is that electric cars will never impact things until battery technology improves. We continue to stick a square peg in a round hole. Now battery tech is coming alone and companies are putting a ton of R&D into it. I personally think government subsidies would be better at that level. Once you have better and lighter batteries you will see electrics come about.
I think government funding works best at a very high level. When we start giving financial incentives for specific products (like electric cars) we just fuck things up. While you might get people who derive some benefit from being socially conscious, the vast majority of people still buy based on price.
How about financial incentives for people to live in urban areas. Having a concentrated population is the best for efficiency and will push people to use mass transit. The whole reason we keep pushing these electric cars and crap is because we have 300MM people spread out all over the place. One factor closes down and these people need to travel a hour by car to find other work. Terribly inefficient.
I agree that much of the funding should go towards things like battery technology, but you could also argue that you need the entire ecosystem to develop. I think it's also reasonable to argue that the tax incentives are a way of both scratching the backs of the companies making the cars and working on the technology and simultaneously pushing the idea of electric cars into the mainstream. This is off the cuff, btw, so don't take this argument as anything highly researched.
More generally, I think that, as a society at large, we need to drop the whole "drill baby drill" mentality and face reality. Yes, we should tap into our oil / gas resources at home, but let's also pump money into alternative energy technologies. Yes, we will have failures (i.e. Solyndra), but if we don't invest in these types of technologies we'll be completely fucked in the medium - to - long term.
There's also the Russian theory that postulates that petrolium is / can be generated by the earth independantly of fossils...that carbon within the earth's mantle, due to pressure and contact with other elemens, just 'becomes' petroleum. But I'm not sure about that one. Maybe I need more vodka to 'see' it?
Cost of energy will force people to ration accordingly. I'm not worried at all. If hydrocarbons are priced out by wind/solar/nuclear then so be it. The free market will invest in the most promising areas.
1.) I by no means think that new technology is going to be some sort of magic bullet for what may very well be an energy crisis in the next 20+ years.
2.) The free market is much better at handling short-term allocations of capital. I'm talking about a long term problem. When the supply / demand curve for oil shifts on us (i.e. when demand vastly outpaces supply), it's going to happen very quickly. No amount of free market magic will be able to fix the problem.
3.) I honestly view long-term energy planning as being akin to the space race. Without intelligent gov't investment over the long haul, we honestly might end up fucked. And let's face it, we'd have never made it to the moon or created the atomic bomb without gov't funding.
I sincerely urge you to check out Chris Martenson's work. Here's the video I posted to my blog a few months back. Watch it when you have some time, it's really eye opening and extraordinarily unbiased:
http://www.youtube.com/embed/8WBiTnBwSWc
They are kind of terrible...I imagine the Volt was mainly bought by people who wanted to be early adopters. But I tried driving one, and it is definitely more fun than a Prius.
But honestly, unless you have some long commute every day, gas probably isn't a major line item in your budget. I'd rather own a car that I enjoy driving and pay an extra $20 per month in fuel. But if you worked in Texas/LA and drove 30+ minutes each way, prioritizing mileage might start to make sense.
I'm just going to say it.
We need to be manufacturing cars that run on LNG on a large scale.
Yeah, largely agree.
.
seriously! would it kill them to put a prius engine into a normal looking vehicle? put a prius engine into something that looks like a scion tc, and i just might buy it.
.
The Volt actually grew on me a lot, but I agree in general. It looks like Tesla Motors does, too. Their Roadster is awesome.
there have actually been studies that suggest that "normal looking" hybrid cars don't do as well as the "wanna-be futuristic" ones because they blend into the background. Part of the reason that people buy hybrid cars is to signal to their peers that they are driving a hybrid and care about the environment.
touting longevity when they know today's culture buys the next edition within 3-5 years max because their current version is deemed shit by the public or it plain breaks...not surprised.
volts and leafs look like shit to begin with
Many good points in this thread so far. It amazes me how long it is taking to the world to adapt. It doesn't appear as if any of the major auto manufacturers (aside from Nissan/Chevy/Toyota), are looking at developing mass-scale electric vehicles. I not an expert in commodities research, but given consistent demand from BRIC nations, it's fair to say that oil prices are here to stay and are only looking one direction. I think Honda also has the right idea with the Natural-Gas Civic, but its frustrating to here presidential hopefuls debate the Keystone Pipeline or off-shore drilling. In reality, those issues are pennies compared to the larger looming issue at hand.
I drive an old Toyota that gets 38mpg highway. Owned it for 11 years and never had an issue with it. Want to upgrade to a fancy car, but then I realize that the Toyo still has a good 100K miles left in its lifespan...can't do it.
Tell that to this chick, apparently she goes to gas stations such a small amount of time that she's forgotten how to put gas in her car!
http://www.youtube.com/embed/34aJaW_9Sp0
I like how she pays 40k for the car and doesn't pay for gas, then she goes to Hawaii with the money she 'saved'.
Sometimes I just don't understand how people in marketing can tie their shoes without wearing a helmet.
I don't think math is a strong suit of people who most support electric cars.
Per your first point - you are vastly underestimating the type of shock I'm talking about. If we don't prepare as a society, we'll be completely fucked. Just think about how essentially all of global trade relies on oil. We need to spend time and money NOW to find a replacement before it's too late.
Per your second point, are you saying that we should've let the Axis Powers get the bomb first? Or that there were no major tangible benefits to going to the moon? Finding a way to truly replace oil with a renewable energy source is a bigger challenge and more important mission than getting to the moon, in my opinion.
The question isn't whether there were no tangible benefits. It's whether the taxpayers got the best deal possible. I doubt it.
I absolutely implore you to watch the video I posted earlier or just check out Chris Martenson's Crash Course. It will absolutely change your perspective on this.
I've already predicting a zero growth future with declining median incomes (certainly within the US), decreased oil use and a major shift in how people will be living. I don't think the government should be throwing good money after bad though.
Electric cars will be viable some day but right now its good money thrown into a hopeless cause. TSLA is one of the most heavily shorted stocks. Another stock that tracks the sentiment around electric cars, check out PPO, which makes separators that go into Lithium-ion batteries. What is much more practical at this point in time would be natural gas cars and trucks. It would be a huge step towards energy independence, it's better for the environment, and it's cheap.
I hold Libertarian political views, so I am against government intervention in general, but if they must encourage some kind of clean energy use, a tax on gasoline would be the best way to hasten the shift towards cleaner fuels.
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