Tag Archives: cost

Is The Cost of EVs Too High?

Nissan Leaf

The automotive industry has had it’s fair share of shakeups in the past few years.  Recalls, major advancements in efficiency requirements, performance upgrades, and now the next logical step will be towards an all electric vehicle (EV).  There are plenty of experts and industry analysts that will give you their opinion of what to expect in regards to cost-benefit analysis, but what about the common person looking to purchase a new EV?

Cost Of Components

One of the first electric vehicles to hit the US will be the Nissan Leaf.  The all electric car utilizes a lithium-ion battery, which happens to be the most expensive part in the car.  For early adopters, the cost of purchasing a Nissan Leaf will be an estimated $33,000, most of the cost directly related to the cost of the battery.

Expensive batteries applies to all production and future electric vehicles.  Keep in mind we are talking about all electric, not a hybrid where the traditional motor can kick in and still provide power.  Therefore, replacement costs will become a concern in a few years when the batteries are no longer holding a charge.  Will it be cheaper to replace the car than to just replace the battery?

Lease The Battery As Only Option

To combat the fears of replacement Nissan is planning on offering a lease option for the battery.  So, on top of the initial cost, buyers will be pressured into spending up to $150 on a lease of the vehicles power source.  It’s less like a lease and more like a never ending insurance policy, which would help offset the costs of replacement if the battery fails.

From this type of planning it’s obvious that shelf life of the lithium-ion battery is a concern.  What about other components, what kind of wear does an all electric vehicle have on other aspects of the vehicle.  Furthermore, when replacement becomes the only option, what kind of environmental impact will that have?  All around the cost is too high and each question answered leads to more questions.

Planning Ahead

Nissan estimates that all electric vehicles will be 10% of all car purchases by 2020.  To prepare for such an influx in demand, Nissan has started equipping factories to be able to produce 500,000 EVs per year by 2012.  Putting all our eggs in one basket?

In my very humble and admittedly cheap opinion, we should be focused on driving down the cost of battery before assuming the consumer will pay for such a venture.  In the world economy today, I can’t imagine the common buyer to consider a $33,000 luxury-lacking EV.  Furthermore, even taking into consideration the amount of money saved by not needing to stop at the gas station, how long would it take to pay off such an investment?  Who wants two extra car payments a month, one for the car loan itself and another for the lease on the battery?

Cutting Cost of Hybrid Technology

Honda has made a very bold statement and/or goal for their 2009 model Hybrid cars, stating that they plan to cut the technology in half.  This huge cost cut is directly related to what they think will be 50% of what is currently used on their Civic.

Tech-On reports on how Kondo create a much less expensive hybrid alternative using already adopted technology.

“The system’s cost itself, excluding the (subsidiary) effects of standardizing components, for example, differs (from the cost of other systems seen in the Civic Hybrid, etc),” Kondo said.