Electric Car Economic Issues

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Describe economic issues of electric cars here

Economic Advantage of Owning an EV

Based on the Union of Concerned Scientists' study, electric cars save around $1,000 a year. This is because the cost of electricity is cheaper than the cost of gasoline. This study uses the cost of gasoline as $3.50 per gallon, which is relatively low compared to today's rates. This means that overall, the actual savings should be greater than $1,000 per year. "Electric-car owners save $750 to $1,200 a year by plugging in their cars rather than driving around in new compact conventional cars, the Union of Concerned Scientists says in a new study."

Read more: http://content.usatoday.com/communities/driveon/post/2012/04/study-electric-cars-union-of-concerned-scientists/1#.T5b2QGNDTTo

Team Supergr00p

Economic Impact of the Nissan Leaf

During the 2011 State of the Union Address, President Obama proclaimed that by 2015 an anticipated one million electric powered vehicles will be prowling the United States’ roads. Using the Nissan Leaf as a test subject, this article analyzes the economic impact of electric cars, their impact on the electric grid, and the impact of their emissions.

The article begins by analyzing the operating economics of the Leaf, making a few assumptions for their calculations. The first assumption is that the Leaf will be used as a household’s second car, assuming 50 miles of use per day, which requires a daily charge of 12 kWh. Running through an average household’s electric usage, and summing the expenses, a daily cost of $1.35 was calculated, which leads to a $40 monthly bill (for just the electric car). This is compared to a vehicle that gets 25 mpg, at a gas cost of $3.00 per gallon. A monthly cost of $180 was calculated. Finally, the study adds in the cost of a replacement battery, which is estimated to have a lifetime of five years and to cost $10,000. Re-estimating the cost of owning an electric vehicle, a monthly cost of $166 is calculated.

The second part of this article analyzes the impact that a large amount of electric vehicles on the road will have on the electric grid. The question is asked if the power required to charge one million vehicles is first and foremost available on the grid in its current condition. The answer is a reassuring yes, reinforced by the fact that the majority of the vehicles will be charged at night. Taking this study a step further, estimating that for 68 million electric vehicles, an excess electricity amount of 136,000 MW would be needed during the night. 400,000 MW was generated in 2009 by the U.S. electrical grid. Taking many factors into consideration, they estimate the current grid could accommodate 40 million electric vehicles without reducing power. Smart chargers allow grid operators to have control over timing, which if used would generate the lowest cost necessary.

The article then analyzes the emissions impact of electric vehicles. The use of electric vehicles would reduce the amount of local emissions. The emissions are thus transferred to the source of the electricity, which in this case are the power plants. This would eliminate the unhealthy emissions from current vehicles, and the focus could be shifted to the emissions of the power plants (coal, natural gas, nuclear, hydro, solar, wind), with wind, solar, nuclear and hydro being the only processes of these that are emission-free. The advantages and disadvantages of all of these must be weighed. Ultimately, although electric vehicles eliminate a major portion of our world’s emission problems, it does not eliminate the overall issue.

Posted By: Graham Ginder, Table 1, Source: http://theenergycollective.com/ansorg/51761/economic-and-emissions-impacts-electric-vehicles

Economic Issues with the Chevy Volt

Electric cars may save fuel, but they still cost much more to own than comparable non-electric vehicles. The market price for the Chevy volt is listed at $41,000 according to Edmunds.com. The Chevy Cruze is probably the most comparable non-electric car, which is listed for about $17,000–$22,000. The monthly fuel costs for the Volt averages about $54 per month with all electric driving, while the Cruze averages $142 of gasoline per month. The savings for using the Volt would average $88 per month, but it would still take almost 18 years of use to make up for the initial higher price.

Posted By: Dan Peterson, Team: Electric Car, Source: http://www.heritage.org/research/reports/2011/01/economic-realities-of-the-electric-car


Team ZLAKA: The initial investment on an electric car can be quite high, the Nissan Leaf for example costs $32,780 to purchase. However, after the initial investment, the cost of owning the car drops significantly. The monthly electrical cost of the Leaf is about $40 dollars, while the monthly cost of a gasoline car is around $180. There is also a lower maintenance cost for electric vehicles as there are fewer moving parts to contend with. (http://theenergycollective.com/ansorg/51761/economic-and-emissions-impacts-electric-vehicles)

California and Electric Vehicles

The San Francisco Bay Area joined forces with private companies to create an infrastructure friendly to electric vehicles. With the center piece being 250,000 charging stations across the Bay Area by the end of 2014. This strategy resulted in thousands of new jobs and increased consumer confidence in electric car purchasing. In turn this has lead to more jobs for companies that service electric vehicles through retail as well as parts and repair. This past week Governor Jerry Brown signed Assembly Bill 631, which takes a page out of the Bay Area plan, and hopes to increase electric vehicle charging stations across the entire state. Assembly Bill 631 does not mandate an increase in charging stations, but it eliminates regulatory hurdles by not regulating electric vehicle charging stations as utilities. The economic impact of the bill will be felt in coming years as other cities begin to expand their electric vehicle infrastructure.


Economic Comparison of Electric Cars for Commuting

Four different cars, including two electric vehicles, were driven and compared for the same 30-mile commute outside of Chicago. The four cars were the Chevy Volt, the Nissan Leaf, the Ford Focus and the Toyota Prius. The Chevy Volt has a gas engine and a generator back up after the initial charge is used up. The Nissan Leaf is strictly electric so after the initial charge is used up, you can't go any further. The Ford Focus has a normal gas internal combustion engine. The Toyota Prius uses electricity and gasoline together. For the total 65-mile trip, the cost for each car's trip was $2.40 for the Nissan Leaf, $4.79 for the Chevy Volt, $5.02 for the Toyota Prius and $8.72 for the Ford Focus. The cost of each car is estimated to be $33,630 for the Nissan Leaf, $41,000 for the Chevy Volt, $23,810 for the Toyota Prius and $18,090 for the Ford Focus. After looking at these economic comparisons, it really depends on what you would need your car for to choose the cheapest and best option. It was also pointed out that a purchasing a train pass for the same commute would be cheaper than every option except the Nissan Leaf.

Posted by: Emily Lafferty

Source: [1]

Team Totes

"Over time, as greater numbers of plug-in vehicles are introduced, their influence on the structure and operation of the grid, and resulting cost and emissions impacts, will become more important. This depends on the quantity and timing of vehicle electricity demand. As the number of vehicles and their electricity requirements increase, more power plants are operated in the present, and will be built in the future. If each of the 240 million registered vehicles in the United States charged 5–10 kWh per day, this would require an additional 12–23% electricity generation. However, assuming that most vehicles will charge overnight, the requirements for additional generation capacity would most likely be much lower. The spatial and temporal pattern of charging can ultimately influence the total generation capacity, the mix of power plants serving a region, and their cost and emissions. The spatial pattern of charging can influence the distribution system, as well."

This article explains the short term and long term impacts of plug-in electric vehicles on the electricity generation industry. As more electric cars are introduced into the markets, households draw more power from the grid. For the time being, this has little impact on power distributors. The current plants are capable of handling the extra power draw because it occurs during off hours when the plants usually aren’t running at capacity. However, in the future, as the electric car market grows, power companies are going to need to expand and add more power plants to handle the growing demand.

Economic impact

In the short term, the growing electric car industry isn’t going to impact the power generation industry very much. Power plants will need to operate more at different times, causing a shift in peak power generation. These needs can be met with the current infrastructure, though. In the long run, the need for electric power will exceed the abilities of power plants and expansion will be necessary. It is estimated that at least a 12%-15% increase in infrastructure will be required to sustain the grids. This will cause a rise in markets for power companies and create many new jobs. As electric cars become more popular, there will also be markets for electric fueling stations which will allow new companies to grow and emerge in the industry.

Link to full Article: pubs.its.ucdavis.edu/download_pdf.php?id=1290

Luke Pontz lap5379

Team Mongoose

In this article, Louis Woodhill explains why he thinks electric vehicles are not going to catch on. Primarily he says that the cost of a nissan leaf is so expensive versus buying a standard gas powered vehicle that it would take years (approximately 200,000 miles) to pay it back. This article is in response to President Obama's $2.4 billion stimulus package given to car companies in an attempt to subsidize production of electric cars and components, such as batteries. source: http://www.forbes.com/sites/louiswoodhill/2011/09/14/electric-cars-are-an-extraordinarily-bad-idea/

Think About This:

The United States Department of Transportation created the Highway Trust Fund to fix and maintain our roadways, and it relies on our gasoline taxes to do so. Unfortunately, the Highway Trust Fund has not been faring too well lately. The bad economy and rising popularity of fuel-efficient cars have reduced the frequency at which we buy gasoline, resulting in lower funds for repairing our roads. Worse yet, the rise of the electric car will deal an even greater blow to the Highway Trust Fund's revenue than the other two factors. As a result of this, we can expect to pay higher taxes and see our roads deteriorate as the Highway Trust Fund struggles to stay alive. Of course, both of these consequences will not help in our decision to switch to electric cars. If we want to adopt greener technology, we need to be prepared to address the problems that arise from our big decision.


Adam Sidehamer/ahs5129/Team Hammer

Team Diesel

With advancements in Electric Vehicle Technology, people will need a place to charge their vehicles. Mostly this is done from the persons home, but if they want to travel more than 100 miles or so they will need to make places to charge their cars. These will be places similar to gas stations and create a market for companies to make these stations. The stations will have to allow people to have a place to stay other than their car while its charging. Companies can make money off these rest stop charging stations.

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