Sunday, June 9, 2013

Urban Electrification

Last week I did something that I have been wanting to do for a long time. I traded my Ford Fusion hybrid for an electric car, a 2013 Nissan Leaf. The Leaf is not suitable as one's sole source of transportation. Its range is limited to about 80 miles. However, as a commuter car it is almost ideal. It is comfortable, quiet, and surprisingly quick. Once you have experienced an electric drive train, it is hard to imagine ever going back to a internal combustion engine. The Leaf has no oil, no spark plugs, no transmission, and. . . uses zero gasoline.

Forgetting the Leaf in particular, I have discovered something in my short time with this car that leads me to believe that the electric car is destined to take over the personal transportation market. Electric cars are almost unbelievably inexpensive to drive.

Consider the following: The average car gets 22.4 MPG. The average cost of regular gas is currently $3.63. If you assume that the average life of a car is 150,000 miles, then you can expect to spend over $24,000 on gasoline over the life of your car. By way of comparison, the local cost of electricity where I live is 10.4 cents per kilowatt/hour (kwH) and the Leaf, for example,  gets about 3.9 miles per kwH. Assuming the same 150,000 mile lifetime of the car, one could expect to spend just under $4,000 on electricity. That offers a savings of over $20,000 in fuel costs over the life of the vehicle! If you assume that the price of gasoline will go up, which it almost certainly will, then the savings would be even greater. These numbers are simply too dramatic to ignore.

With the opportunity for such huge improvements in efficiency, why haven't electric cars taken over the market already? There are two reasons. First, there simply is not a nationwide network of fast charging stations, stations that provide a full charge in no more than 30 minutes. For now, electric cars are mostly limited to commuting from home from where you can charge your vehicle every evening. Second, and even more importantly, battery technology is not yet advanced enough. Batteries that hold a sufficient amount of energy for normal use are extremely expensive. The Tesla Model S, which offers a range of 265 miles costs $80,000, way beyond the means of most consumers.

In fact, I believe that for purely electric mass market cars to be practical the battery needs to provide at least 300 miles of range in a vehicle that costs no more than $30,000.

The exciting part of all of this is that these two problems--fast charging infrastructure and affordable, more energy dense batteries--are almost certainly going to be solved in the next 3-5 years. More than one company has announced breakthroughs in battery technology. It is not too much of a stretch to imagine that within 3-5 years batteries with 4x improvement in power-to-cost ratio. Second, building a nationwide network of fast charging stations is a relatively simple task. Unlike liquid fuels, electricity does not have to be transported through pipelines or fuel trucks. Its presence is already ubiquitous. The cost to build fast charging stations is not trivial, but much less expensive than building a new gas station. Tesla has already begun to do this.

These are relatively modest technological hurdles to overcome. Perhaps a bigger problem lies not with the technology, but with many peoples' reluctance to embrace a completely new approach to such a familiar and essential part of our lives.

I, for one, am excited about the future.

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