BEV & PHEV financials

[Ashful]

Searching the forum, it looks like it's been 2 years since there was a thread purely dedicated to the financial justification of BEV's and/or PHEV's. Surely, a lot has changed, not the least of which is fuel prices.

So let's have it, a pure cost comparison, all emotion and politics aside. Don't tell us why they're better for the environment, you won't sell half the country on that, tell me why they're better for my wallet.

Four categories must be addressed, at some point:

1. Coupes, Sedans, crossovers, and compact SUV's: All the commuter crap you see running to work every morning
2. Full-size SUV's: Anything to compete with Escalade, Suburban, Durango. Must seat 7+.
3. Trucks: Exciting new market segment
4. OPE for homeowners: My Tesla fanboy cousin just bought a BEV zero turn, and even a battery snow blower! Both smaller than what I'd want for my 4 acres of lawn and 7000 sq.ft. of driveway, but I know there are commercial scale equivalents of both. Since I burn way more gas in my lawnmower than even my 12 - 14 mpg cars and trucks, and have seen others here post the same statement, this is a real area of interest.

Remember, many BEV manufacturers will still quote you pricing based on tax incentives and other "assumed cost savings" that you will never see, so you must be diligent in backing those out of the price.

The last I did the math on this, even with a then-long daily commute and 2020 gas prices then at half of today's, and even with concessions (5 seat BEV vs. 7 seat ICE SUV's) there was just no way to close the financial gap on the vehicles I was comparing (all 450 - 500 hp mid-size SUV's and wagons). Today, our commute is zero (we both work from home now), so mileage on each vehicle is likely 2k - 3k... I'm glad I didn't drop the extra coin to save a few mpg's, but there are still many others driving 20k miles per year.

I did the same comparison on 60" zero turn mowers a few years earlier (2016?), and it's too far back now to remember the numbers, but I do recall two problems with the justifications posed by the sellers of BEVs : (1) The up-front cost could NEVER be recouped by a homeowner mowing < 10 acres per week, the price gap was almost laughable. But for commercial applications, an assumed 1000+ hours per year, it got a lot more interesting. (2) For commercial applications, they completely ignored the very substantial cost and logisitcs of the fleet of batteries you'd need to purchase and carry for a typical crew with 2-3 mowers running 8 hours per day, in order to avoid charging them by gasoline during the day and negating most advantages of going BEV.

 

[woodgeek]

The 2023 Chevy Bolt EV will be available in a couple months, for an MSRP of $26,595.

In my opinion, this looks like a small CUV (in terms of cabin size and driving height).

I'd say it compared to the Mazda CX-30, base trim is $22,500 MSRP. This is $4000 less than the Bolt.

Higher trims in both scale similarly, with a $4k difference.

Driving 1000 miles in a CX-30, with ~26 mpg combined, uses 40 gallons of gas, costing about $200 at current prices.
Driving 1000 miles in a Bolt, with 3.3 mi/kWh (conservative), uses 300 kWh, costing about $50 at current prices (not in NE).

So fuel would recoup the price difference in 4000/150 = 26,000 miles.

Let's assume 12,500 miles/yr and 8 years ownership....

If fuel prices stayed high for 8 years (unlikely), then the back 74k miles would save another $12k in fuel, a savings of $1500/yr on average.
Worst case, if gas averaged $3/gal over the 8 years, that is still $70 more expensive per 1000 miles, or $7000 over 100k. You still come out $3k ahead (after paying back the $4k upfront). This is a measly $350/year on average.

Studies have shown that maintenance costs in an EV are 50% lower. But in a new car, that would be negligible. After long use, that would be to the Bolt's benefit.

The Bolt is heavier, so might wear tires faster, but no oil changes probably compensate that.

I just got insurance on a '22 Bolt, my insurer upcharged me $800/year for the new vehicle. I don't think this is higher than the CX-30 would've been.

The website 'caredge' estimated that BOTH cars will depreciate half their value in 8 years. So that is a match.

Chevrolet Bolt EV Depreciation

See the Chevrolet Bolt EV depreciation curve along with new & used pricing analysis to find which model years have the most value.

caredge.com

Mazda CX-30 Depreciation

See the Mazda CX-30 depreciation curve along with new & used pricing analysis to find which model years have the most value.

caredge.com

All in all, the TCO of the Bolt is almost certainly LOWER than the Mazda over the first 100k miles and 8 years of ownership.

------------------------------------
You didn't ask, but some buyers DO care:

Carbon emission per mile due to fuel is 1/3rd in the Bolt (assuming its equivalent to 80 mpg on CO2 emissions), and falling. 100k miles at 25 mpg is 4,000 gallons of gasoline, or 50 metric tons of CO2. Times 2/3rds, the Bolt would reduce your carbon footprint by at least 33 tons, or 4 tons/year. (Embodied carbon in the Bolt might be a ton or two higher).

Current per capita emissions in the US are 15 tons/year, so this swap would reduce emissions 25%. In India, the emissions are 2 tons/year. So this (cost negative) car swap offsets two Indians total emissions for 8 years.

 

[EbS-P]

I’ll bite. First off using current pricing is just not a realistic comparison for the life of the vehicle. At this point you are playing the market and the small guy generally looses.

1)Going general here 20 mpg with gas at 4$ a gallon (gas piece today won’t be the price tomorrow or next year maybe I should go with at $3.50 a gallon??

Figure 200$ plus 1/5 the cost of an oil change for every 1000 miles for an ICE.

For a BEV use 350 whr/mile and $0.13/ KWh gives a cost of 46$ per 1000 miles.

10k miles a year a BEV saves 1500$ per year.

New Chevy Bolt will have a MSRP base of 25k I read(I think) Honda Civic call it 22k.

If the civic get 30 mpg my ICE cost get cut by 1/3.

All this depends on gas prices and electricity prices. Gas being at record highs it may not be a fair comparison for the life of the vehicle but electric rates are probably at an all time high too. They just are less susceptible to rapid fluctuations.

I will post this. I think there was a link to a spreadsheet. It’s used ICE vs new BEV but the cost calculations are useful.

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2) nothing yet. Rivian I don’t think will make it as a company. Give it 3 years and there will be 7+ capable BEV it just might not be an SUV. Ford transit is my bet. (Probably the small one first but the big one is already in production as a cargo van. GM probably will have an electric Escalade soon based on the Hummer tech.
Vinfast has a 7 seater planned.

3) yep we’re gonna get trucks I don’t see how Ford can keep prices that low. My guess is the Cyber truck dual motor will start at 60k.

4) I’ve never enjoyed mowing. I like my small yard. 4 gallons a gas a year is plenty. Unless I wanted a ball field I would be looking for haying or short grass prairie. But for the point mentioned I don’t see any residential use case where electric mowers are cheaper.

Speaking more generally saving 1000$ a year really isn’t a big deal for me. I can pick up side jobs or extra teaching and make that in 2 weeks or less. I have other motivations that are equally if not more important than money saved by making more efficient choices.

 

[Ashful]

Excellent posts, Woodgeek and EbS-P. This is exactly the type of data I was hoping would be posted.

I had already assumed that my "category 1" of small cars and CUV's would be the one market segment pulling ahead. I was shopping my category 2 in 2020, particularly larger seating capacity and high horsepower, when I found the numbers looked so unfavorable. I'm interested to see if anyone has numbers on that category, today.

And yes, I did intentionally ignore the environmental impact. That's been well-discussed and understood already. Of course people care about the environment. But ample evidence shows they don't care enough to let it inconvenience them or cost them real money, lest those Nissan Leaf's would have been flying off the dealer lots 10 years ago.

EbS-P, I used to feel exactly as you did about mowing, when I did it all by push mower or lawn tractor. Miserable job. Then in the interest of marital tranquility, I ended up in the current home, with 4 acres to mow and a 60" commercial zero turn. Let me say, it's about as much fun as I've ever had on a gas-powered vehicle, without breaking any legal speed limits.

 

[woodgeek]

The big picture is that the market has been through a series of turning points, and we are in one now.

The elephant in the room IS and always has been the price of Lithium batteries.

Explainer here: https://www.greencarreports.com/news/1134307_report-ev-battery-costs-might-rise-in-2022

Factor #1: pack prices have fallen by a factor of 4 from 2013 to 2021. !!

In 2021, EV pack prices approached $132/kWh, nominal. So the 66 kWh pack in my '22 Bolt costs ~$8-9k. But in 2013, it would've cost $36k!

So the same calculation I did above in 2013 would've been >$25k in the hole. Which is why they were not sold in 2013, LOL. Instead we had Gen 1 LEAFs with a 22 kWh pack going for $10k more than a similar sedan (with $10k tax rebates) AND Nissan taking a LOSS on every vehicle sold. And a 80-100 mile range. On the bright side, it was waaaay better economically than the EV-1.

Factor 2: ICE drivetrain costs scale sublinearly with power and vehicle mass. Battery cost is linear in power/energy, and slightly sublinear in vehicle mass. So smaller vehicles are going to become price competitive with ICE FIRST.

Estimates for cost of production parity ICE vs BEV are around $100-130/kWh. We are just there now as a segment (some makers presumably are doing a bit better than others on cost/learning curve).

The fact that everyone is joining the party in 2022 (legacy makers) is no surprise. You could extrapolate the Lithium cost curve in 2018 and predict that 2022 was the parity year when BEV selection/volume would scale. In fact, I did.

These economics mean that most legacy makers built EVs in the 1000,s per year volume (in US market). If they are losing $5-10k per car they can eat it for a pathfinder to get real world data.

Only Nissan and GM built cars in low 10,000's per year volume before 2020. They too lost money per vehicle, but were more committed.

And ofc they made the money back trading CAFE credits. The whole market before 2022 was driven by the US (Obama) CAFE standards (backed by the CA standards).

Tesla, ofc, built Model 3's at the mid-100,000's per year in the US market, and sold them for $10k more than the Bolt, and made a profit on them. They pushed their battery prices lower, squeezed the buyer with luxury AND sold carbon credits to legacy makers. They said for years they would sell a $30-35k Model 3 and never did. Huh.

So, until 2022, volume was constrained by the legacy makers bc the economics (of carbon credits) did not scale.

Today, the LEAF and the Bolt are in a 'price war', with the 40 kWh LEAF sedan tracking $5k cheaper than the 66 kWh Bolt CUV. And the 60 kWh LEAF sedan about the same price.

All the other makers of similar sized vehicles are $5-10k more than the Bolt/LEAF60, but get a $7500 tax rebate... capitalism in action.

For entry level BEV's those are all there are (and pencil out like my Bolt above), and all are still low volume production.

Tesla is competing about $10k higher than the Bolt in their cheapest offering (bc they need to to make a reasonable profit), competing with mid-level luxury brands (like BMW), many of which have terrible maintenance costs and value propositions.

In 2022 all these new models and segments are on sale, and production is scaling... but they are all back ordered.... good luck getting one!

The FUTURE:

--GM says they are going to ramp up the Bolt production in 23 and 24... and then cancel it! New entry level will be a BEV Equinox CUV on the Ultium (modular) battery platform. They are NOT going to make >100k more Bolts. Experiment over.
--Nissan is going the cancel the LEAF soon, and their new entry level will be the BEV Ariya, which will be more mainstream, and have CCS fast charging (unlike the obsolete LEAF DCFC standard). LEAF experiment over.
--Tesla will keep cranking out Model 3s as their 'high-end' entry level offering.

The other legacy makers are clearly staking out a 'Tesla' approach... go after the high end to secure profits. Not clear if any of them will think about the low/entry level other than Nissan and GM. Profit centers gotta profit.

Scaling new production lines takes a LONG time, as Tesla showed when they were the first (and so far only) maker to scale BEV production. I could easily see the entry level offerings being about where they are now for 2-3 more years, and a lot of glitzy BEVs shipping at mid-level prices. As long as the legacy makers are battery cell constrained... they will earmark them for the most profitable models.

 

[Ashful]

ICE drivetrain costs scale sublinearly with power and vehicle mass. Battery cost is linear in power/energy, and slightly sublinear in vehicle mass.... You could extrapolate the Lithium cost curve in 2018 and predict that 2022 was the parity year when BEV selection/volume would scale.

If you're not an engineer, you should have been. Excellent post!