Electric Cars--The Real Question

                  If you have spent the last several years wondering when electric cars will finally become viable, then join the club.  I have pondered this for forty years.  But the facts we would need to know to answer that question are the facts that no one is telling us.

                  We all know that sooner or later, the electric car has to happen. Petroleum is a finite resource, and it will eventually be gone.  The shale/fracking technology will buy us a brief reprieve, perhaps a decade or so, but eventually the oil will be gone.  While the day that the last barrel of oil is burned may still be far in the future, every year that we inch further toward that day the world's remaining oil will be scarcer, more expensive, and more likely to be either geologically inaccessible---or politically controlled by those who despise us.

                  Yet we also know that the wind power resources of the high plains alone could provide  a hundred times as much energy as our entire country consumes, and any three counties in New Mexico could hold enough solar panels to run the whole country.  So if replacing of our fleet of gas-buggies with fully electric vehicles is pretty much a no-brainer, why hasn't it happened yet? 

                  The news on this subject is conflicting at best.  In May, Tesla Automotive announced that it had just had its first profitable quarter ever, and that it had fully repaid its government loan.  Tesla stock gained 81% in May alone.   But priced at $62,000 to $106,000-- the Tesla is mostly just a rich man's toy.  It's only influence on the car market so far is to prove that an electric car can deliver high performance.  Tesla claims that their ultimate aim is to produce and sell a moderately priced family sedan.  Yet that goal had also been the stated goal of Fisker Automotive, which declared bankruptcy in May.   GM is offering a plug-in hybrid, the Volt, for about $39,000, less the $7,500 federal tax credit. Ford sells an all-electric Focus for about the same price. And both are selling only an infinitesimal number of cars.  So what's the problem?

                  The problem is this:  There are millions of Americans who can afford to spend $39,000 for a car. And there are millions of Americans who are being badly hurt by rising gas prices.  But it's not the same people.  Anyone who can spend $39 k for a car has probably never had to choose between filling the gas tank and putting food on the table.  And those who are forced to make such a choice have probably never owned a new car in their entire lives--and never will.  The real market for electric cars would be the market for cheap used ones.  But there can be no used ones till somebody buys some  new ones.  The people buying $40 k SUVs may complain about rising gas price, but if they really worried about it,  they would have stopped buying gas-guzzlers.   The purchasers of forty-thousand-dollar SUVs that get 20 mpg could at any time have switched to buying a twenty-thousand-dollar Ford focus that gets 40 mpg. If they have not yet done that, then they are not really worried about gas price.

                  Last year, I bought a Ford Focus. It's a plain, gas-powered Focus. It's an excellent car and I'm quite happy with it. On the highway, with no wind, I get up to 44 mpg.  After all the rebates and other incentives, the price was  $18,000.   That was the most money I had ever paid for a car in my entire life, and it scared the hell out of me. I have a reasonably comfortable retirement, and yet I found myself asking,  "Just what sense does it make for a retired person living on a fixed income to take on $18,000 of debt?"  But I bought it anyway, because I do worry about raising gas price. In my view, the target price that electric car makers will have to hit for electric cars to become viable is this:  Ford will have to sell its Electric Focus for about the same price that it sells its regular focus, which is $18 k-$22 k.  But that isn't going to happen anytime soon.  The CEO of Ford Motors disclosed last year that 1/3 of the cost of the $39 k Electric Focus is the cost of the battery.  So if the battery cost alone is $15,000, then the car cannot be sold for $18,000.  I suspect that the battery cost will have to drop to around $3,000 to $5,000 before the car price can become competitive. 

                  Of course, many will ask, "What about fuel savings?   Couldn't people afford to spend more on a car if they didn't have to buy gas?"  To compute that answer, this is what we will need to know:  How many miles will the car last?  Will the original battery last the life of the car, or will it have to be replaced after a certain number of charge/discharge cycles?  If so, then how many charge/discharge cycles will the battery last before it has to be replaced, and how many miles will have been driven by that time?  And what will be the net exchange price for the replacement battery? And how many kwh of electric power will be purchased over the life of the car, and at what price?  I cannot get any hard answers for any of these questions.

                  Some of you may protest, "Even if there is no net savings for transportation cost, wouldn't we wish to switch to electric anyway, (assuming we can afford to) because it will mean burning less carbon and importing  less fuel? Supposing we were to find that a $15,000 battery only saves $10,000 in fuel over its lifetime. Shouldn't we do it anyway?" 

                    Well, we don't even know that for certain.  To compute how much we would be lowering our carbon footprint, we would have to know this:   When $15,000 is paid for a battery, just what did this money pay for?   And how much of the price involves goods and services that consume petroleum? Supposing  that $10,000 of the cost ends up being petroleum cost?  Then we might  not be lowering the carbon footprint at all, nor lessening our dependence on imported oil.  Do I know this to be the case?  No, I don't even suspect that this is the case--but I do not know for sure that it is not the case, and neither does anyone else. 

                  In order to predict just when the day of the electric car will arrive, these are the things we will have to know.  But these are precisely the things that no one is telling us.