The simplified economics of electric cars

The era of zero real interest rates (for savers) makes all sorts of calculations simpler. I started looking at the choice between electric vehicles (EVs) and comparable cars with internal combustion engines (ICE) and ran into a bunch of issues about depreciation, time horizons, resale values and so on.

But there’s one way of making the comparison very simple. Consider someone who buys a car for cash and drives it until its value reaches zero and it is scrapped. (For the moment, don’t worry about the fact that not many people do this.) Further, assume that the best alternative is to save the money, at zero real interest, for example by buying long term bonds.

The final simplification is to assume that both cars travel the same distance in their lifetimes before being scrapped. That seems reasonable. Most estimates suggest that the battery in an EV can last for at least 150000km, and an ICE car that has been driven that far is worth a few thousand dollars at the most (I should know!). At a stretch, we could say 200000km for both.

In this case, we can simply compare the difference in purchase price with the lifetime savings in running costs. A standard estimate is that the fuel and maintenance costs of an EV are about 15c/km less than those of a comparable ICE (10c/km for fuel and 5c/km for maintenance). So, the lifetime savings come to between \$22500 and \$30000 for the EV. That seems comparable to price differences observed in the market.

Now for some potential complications

First, most new car buyers don’t keep them until they are scrapped. As far as the total comparison is concerned, this doesn’t matter much. If the car is sold partway through its life, both the total cost and the operating savings are shared between the buyer and the seller. But if the initial depreciation is more rapid than is justified by the reduction in service flows, the buyer will get more of any net benefit, and the seller less. In particular, this will happen if the price of EVs is falling, as is happening more

Second, for people who borrow to buy their cars, at positive real interest rates, the difference in purchase price is more significant, and the case for buying an EV correspondingly weaker. As general car buying advice, if you can it’s much better to add to your mortgage than to take a car loan. But you need to increase your repayments by more than the minimum required – ideally by the amount you would have paid on the car loan.

Third, this excludes any consideration of a carbon price. A price of \$50/tonne would add about 12c/litre to the cost of petrol, or about 1.2c/km for a car using 10l/100km. The cost for the EV would depend on the carbon intensity of electricity generation.

Finally, there are incentives (such as tax exemption) and disincentives (such as the electric car road tax imposed by the victorian government). These need to be taken into account, but will differ from place to place and time to time.

31 thoughts on “The simplified economics of electric cars”

1. Ronald says:

Just to make sure it’s not overlooked, I’ll mention if the price of new EVs is falling it will also hurt the resale value of internal combustion engine cars.

2. Joe Blow says:

A big issue here is that a lot of the calculations around EV vs ICE assumes that the transition to EVs will take many years. If, like many are now thinking, the transition is quite fast ( ~10 years to say 90% ) then the calculations change quite a lot.

Imagine having a 6 year old car and planning to buy a new one in 4 years. In 4 years EV’s could well be at 30 – 40% of the market. If they are still a bit expensive for you, you will probably decide to keep the old car for another few years rather than buy a new ICE. Buying a new ICE would be folly, even if they were cheaper, because you would see that it would depreciate really fast and be essentially worthless in 6 – 8 years ( 2032 – 2034 ).

Bottom line – in 3 years or so the sale of new ICE vehicles could start to decline rapidly, this may already be happening. Second hand ICE vehicles may start holding their value quite well as people who still can’t afford a new EV buy them to tide themselves over until EVs become cheaper. There will also be some used EVs around as well.

3. Joe. This point is correct. I tried to anticipate some of it in the OP

4. Geoff Miell says:

What if global petroleum fuel prices continue to rise and fuel supplies become scarce? I’d suggest that scenario (with accumulating indicators suggesting it’s increasingly likely soon) would put a big dent on ICEV resale value. Reiterating my comments from: https://johnquiggin.com/2022/01/24/monday-message-board-541/#comment-250177

A Goehring & Rozencwajg blog post on Nov 19 says: “Assuming Saudi has pumping capacity for 10.5 m b/d (a big if), we believe total OPEC+ crude capacity to be 46.9 m b/d – not enough to meet global demand by 4Q22.” AND: “our models suggest that we could be entering a new period in the history of oil – a period without any excess global pumping capability.
https://johnquiggin.com/2021/11/22/monday-message-board-535/comment-page-1/#comment-247487

Global Head of Equity Strategy at Jefferies, Christopher Wood, said: “In a world that really reopens — which is a big ‘if’ — the oil price can go significantly higher

Earth scientist David Hughes has examined the data behind the U.S. Energy Information Administration’s (EIA’s) latest projections for shale oil and gas output and finds its long-term outlook is so biased, it borders on fibbing, in a new report published in Dec 2021 titled Shale Reality Check 2021.
https://johnquiggin.com/2021/12/06/monday-message-board-537/comment-page-1/#comment-248760

I’d suggest new ICEVs are likely to become undesirable without adequate and affordable fuels to operate with. Depending on what global supply scenarios come to fruition, increasing petroleum fuel unaffordability/scarcity may begin as early as later this year (if you believe Goehring & Rozencwajg) to later this decade (and maybe at a stretch, if we’re lucky per US petroleum geologist Art Berman, to mid next decade).

So I think any economic comparison between BEVs and ICEVs must factor in rising petroleum fuel prices.

5. Ikonoclast says:

The government (a new one, not this totally useless and indeed negative utility Australian government) will have to make EVs attractive and ICEVs unattractive. Of course, the easiest way is a hefty carbon tax or other carbon price. They could even extend the luxury car tax to all ICEVs. They are a luxury we cannot afford anymore. Destroying the climate is not a viable option. Australia’s truck, van and 4WD fleets also need to be replaced by EVs. Current technology already makes this feasible. Real outback, off-road 4WD-ing might need 4WD EVs equipped with a diesel range extender. But most people with “monster trucks” and 4WDs just drive them around cities.

EVs should actually be cheaper. They are simpler and lighter, with fewer moving parts and much less maintenance. As soon as they achieve higher production volumes than ICEVs, they should kill ICEVs on whole-of-life costs. Production volume is the key IMHO. Governments need to help EVs get volume fast and also take volume off the ICEVs. It’s to be hoped that we will have less cars overall and maybe more bicycles. Admittedly, COVID-19 makes mass transit a bit problematic for now. “For now” could be quite a long time too.

6. Anonymous says:

Correction of above. Individual EVs themselves are heavier but an EV transport system is arguably lighter overall in moving vehicle tonnage. There are no tankers needed to deliver fuel to the fuel station network. Take all those heavy, dangerous, ICEV tankers off the road! That’s a triple win for a fully EV system.

7. KT2 says:

“Tesla earns returns that do not match up to its cost of capital.” ^2.

What premiium is added to electric Tesla’s? Share price & returns won’t cease to influence price for a decade or more due to investors exuberance. And: Mars!
*

^1.
” So far, the Tesla bull is winning. In December, Time magazine declared Elon Musk its 2021 Person of the Year. Tesla Common Stock closed the first day of trading on the NASDAQ in 2022 at around \$1200, a 64 per cent increase over the year, after the company reported vehicle deliveries in 2021 of 936,000, up from 510,000 in 2020. (Along with other tech stocks, they have fallen a long way since, closing at \$930 on 24 January.) At the time of writing, according to Forbes Real Time Billionaires, Musk was comfortably the world’s richest person, his net worth nearly twice that of the fourth-richest person, Bill Gates.”

From;
“Electric ambition

“Elon Musk has cast a spell across global business and investment. Someone needed to

“Power Play: Elon Musk, Tesla and the Bet of the Century
By Tim Higgins | WH Allen | \$35 | 377 pages

^2.
“Tesla’s weighted average cost of capital is 16.65%. Tesla’s ROIC % is 11.69% (calculated using TTM income statement data). Tesla earns returns that do not match up to its cost of capital.”

“As of today (2022-01-26), Tesla’s weighted average cost of capital is 16.52%. Tesla’s ROIC % is 11.69% (calculated using TTM income statement data). Tesla earns returns that do not match up to its cost of capital. It will destroy value as it grows.

“Tesla WACC % Historical Data
“The historical data trend for Tesla’s WACC % can be seen below:

https://www.gurufocus.com/term/wacc/NAS:TSLA/WACC-/Tesla

8. Ronald says:

I used to make fun of Tesla’s share price, but then people started “investing” in cryptocurrency and NFTs and I was like, “Okay, you win. You are stupider than I can imagine.”

9. Suburbanite says:

Tesla definitely has an edge over everyone else in the EV market, if for nothing else but recognisability. Their edge over everyone else will eventually disappear, but I’m surprised at how long it is taking. Their main advantage is that they aren’t stuck with lots of ICE models and therefor not internally conflicted about what they are doing.

I’m definitely in the camp of people trying to get their aging ICE car to last long enough to be able to replace it only when affordable EVs arrive.

10. Joe Blow says:

I think Tesla has quite a few advantages apart from no legacy manufacturing. First of course is Elon Musk.

Second is no dealership network. In the US where they don’t have a store, or aren’t allowed to due to government regs requiring vehicles to be sold through a dealership ( yay, crony capitalism ) they home deliver. Lots of complaints from the existing dealer network on that.

Third, they really rethought the manufacturing process. Some models have 3 parts for the main chassis – two giant castings for front and back, then another for the tray. This save 70 parts and endless handling. Google ‘giga press’ – Tesla bought them all ( AFAIK ). Other automotive co. are just starting to do this. Tesla is rumoured to have 20 – 25% margins on some of their models while existing automakers produce at a loss – but have to, to avoid CO2 penalties on their ICE cars.

Fourth – batteries. Generally ahead by 3 – 4 years from most manufacturers.

Fifth – automotive chips. Other manufacturers have had to cut production due to lack of chips. Tesla does all its programming in house so can change chip suppliers more easily.

Elon musk is obsessive about cutting costs and design for manufacture. Check out some of Sandy Munro’s Youtube videos on the difference between sub assemblies on a Tesla and other brands. Sometimes dozens of parts difference for the same job. Other manufacturers buy in sub assemblies then attach them to each other with multiple hoses, complicated pipes and brackets. Tesla integrates the whole thing together as an elegant unit.

It has to be said though, that Tesla did have quite a few manufacturing issues in the past, but they seem to have been fixed.

11. Suburbanite says:

Tesla is such a divisive brand it’s hard to seperate fact from fiction. There are some things I love about their cars and some that I’m not so keen on. I simply can’t afford one so it’s all academic at the moment. I thank Elon Musk for shaking things up – and more importantly providing a side-splitting launch for the cyber truck – comic genius.

12. KT2 says:

Yes Joe Blow, Telsla owns all but one Giga Press. How long before Tesla buys giga press manufacturer Idra?

The other Giga Press bangs out farady cages for 5G towers.

And of course Elon is aiming for a;
“giant, giant, giant machine” to “make full-size cars in the same way that toy cars are made”.[14]
“With our giant casting machines, we are literally trying to make full-size cars in the same way that toy cars are made
Elon Musk, (18 January 2021)[15]”

…” largest high-pressure die casting machines in the world, with a clamping force of 55,000 to 61,000 kilonewtons (5,600 to 6,200 tf).[2][3 ] Each machine weighs 410–430 tonnes

Glovitech
“LK Technology delivered one Impress-Plus DCC 6000 machine for Glovitech of South Korea, installed in the Vân Trung Industrial Zone, Việt Yên District, Bắc Giang Province, Vietnam.[40] The machine is used for producing large Faraday cages (radio-frequency enclosures) for 5G mobile base stations.[40] The machine was delivered in December 2020, and produced the first castings in March 2021.[41]”

3 parts only for chassis aiming for one.

“A Look Inside Tesla’s ‘Giga Press’ At IDRA Open House
“It’s hard not to be fascinated by this amazing innovation.[ I agree]

“Tesla’s innovative new chassis design is one step closer to series production. The first Model Y megacasting has come out of the enormous IDRA “gigapress” at Gigafactory Texas. Tesla will combine front and rear megacastings with its new structural battery pack to form the underbody of Model Y.

“As Elon Musk tells the story, one day he was considering a die-cast toy car on his desk, and wondered what the practical size limit for a casting would be. After some research, he learned that there really is no size limit, and decided to fabricate the front and rear underbodies of a vehicle as two huge castings with huge machines made by IDRA GROUP.”…
https://insideevs.com/news/512244/tesla-giga-press-idra-details/

13. hix says:

The price differential are AUD without VAT? Might be lower than that, since the base versions of electric cars tends to be better equiped.

14. Geoff Miell says:

Ikon: – “The government (a new one, not this totally useless and indeed negative utility Australian government) will have to make EVs attractive and ICEVs unattractive. Of course, the easiest way is a hefty carbon tax or other carbon price.

Or the price of petroleum fuels continue rising rapidly. That would make BEVs more attractive/desirable.

Short-term, perhaps:

International oil prices could soar to \$150 a barrel during the first quarter of 2022 if an ongoing conflict between Russia and Ukraine leads to a supply shock, economists at JPMorgan said Friday.

I heard a comment on ABC TV 7:30 tonight suggesting that a Russian invasion into Ukraine would mean Ukraine, Europe, USA and Russia would likely all be losers, while China would likely be a winner from the conflict.

Longer-term, an inevitable sustained global oil supply decline.
https://johnquiggin.com/2022/01/26/the-simplified-economics-of-electric-cars/comment-page-1/#comment-250195

15. James Wimberley says:

V2G will change the financial calculation quite significantly. In a British study co-authored by interested industrial corporations and researchers at Imperial College, “fleet operators can expect financial benefits of 700 to 1,250 pounds (776 to 1,386 euros) per V2G-capable electric vehicle.“ https://www.electrive.com/2021/01/11/analysis-on-the-savings-potential-of-v2g-technology/ I’ve seen a much lower but still significant estimate for householders, who won´t get such a good deal of course. In any case the estimates are largely guesswork. (One open question is whether it will be worthwhile to build in the millisecond response needed to participate in the frequency regulation market as well as bulk storage. I‘m guessing not, for households.) The bidirectional chargers (currently made of unobtanium) will be significantly more expensive initially. UK retail electricity is cheaper than Australian, making the potential benefits even higher in Oz. I plan to buy an EV soon (in Spain) : V2G is a requirement.

Several new car markets, including the UK and the Netherlands, though I guess not Australia, are heavily weighted towards company cars, from irrational biases in the tax code for corporations. In these countries, a company car is a normal part of compensation for middle managers, who get offered a new car from a shortlist every few years. The package typically includes a capped fuel allowance. The cars are supplied by specialist leasing firms, run by accountants who track TCO very closely. The result is that a given manager may well be offered a better EV than ICEV (for equal TCO). accelerating overall EV adoption.

16. James Wimberley says:

PS: An important wild card risk for prospective ICEV buyers is the possibility of other cities copying London and introducing a low-emission zone. In London, the daily fee for operating a polluting vehicle inside the ULEZ is £12.50. The scheme shews that pollution charging is both technically and politically feasible, at least in a metropolis with good public transport and very few car commuters.The fee allows Dives to tool around Mayfair in the Bentley, and Lazarus to drive Grandma from Neasden to the hospital a few times, which are useful safety valves. It is disappointing how few other cities are following London’s lead, but sentiment can change quite fast.

17. John Horowitz says:

I think you’ve made the right simplifications here. Resale values have to wash out, don’t they, unless consumer tastes for some non-fuel-related attribute change?

But there’s another tough question at the moment: Do I buy an EV now or wait a few years? In the very long run, with zero interest rates, that timing probably doesn’t matter much. However, I am not going to live forever.

18. hix says:

The absurd thing in Germany right now is that we tax consumer electricity higher than gas for cars. Since we also subsidice electric cars a lot (and fuel is a smaller part of their cost calculation anyway), they come out ahead easily right now anyway. Should even break even myself as a poor almost non driver. The massive subsidies for new electric cars (6300 Euro) have pushed down prices of used ones and electric cars also get annual subsidies – lower car tax (non i think for the first years, vs maybe 100 for a small conventional one) and the ability to sell co2 credits to fleet operators (at least 150 Euro a year, not sure for how long those prices wil last). Albeit selling the co2 credits would turn that purchase environmental disadvantageous.

19. Svante says:

A standard estimate is that the fuel and maintenance costs of an EV are about 15c/km less than those of a comparable ICE (10c/km for fuel and 5c/km for maintenance).

JQ, I have an old but golden dual fuel van and doubt this calculation now holds for cars running LPG, particularly for mid-sized and smaller cars, and with the gap widening again between LPG and petrol or diesel prices. Also ‘well to wheel’ any carbon price for LPG would be approximately 30% less than that for petrol or diesel. Converting a car to run dual fuel LPG costs maybe a fifth or even less than the premium price outlined above for a comparable BEV, less than that if it comes OEM dual fuel from the factory, and less again if solely running on LPG. Outside Australia globally there are plenty of new small four cylinder cars running LPG on offer from various car makers. I suspect this situation demonstrates we are Lucky Country victims of the Australian gas cartel exporters and money in politics once again. I think in various situations vehicles running LPG will likely have a cost advantage over BEVs for another decade, and maybe quite a bit longer if the gas cartel is brought to heel.

20. Geoff Miell says:

Svante: – “I think in various situations vehicles running LPG will likely have a cost advantage over BEVs for another decade, and maybe quite a bit longer if the gas cartel is brought to heel.

What data do you have to reach that conclusion? What makes you think LPG will still be readily available (and affordable) “for another decade” or more?

Per Matt at Crude Oil Peak, Dec 9:

Australian crude production is on a long term decline trend. Condensate has rebounded in 2018 due to an increase from offshore LNG, but since Australian refineries can’t use much condensate it is exported and that’s why we see an increase in C&C exports. Another light fraction, LPG, also grew over the same time period allowing more exports – while LPG automotive use has declined. See graph in the Appendix.

See Fig 14: Automotive use of LPG is in decline
https://crudeoilpeak.info/australia-crude-oil-import-vulnerabilities-sep-2021-data

21. Svante says:

Geoff, that Fig 14 shows production increasing strongly, up by 70% over the last 3 or 4 years, even though that from refineries has decreased over a longer period most likely due to less oil being refined here.

LPG use in Australia declined due largely to government fiat. The Krudd excise increases, the shrinking and end of the installation rebate combined with the aging of the LPG fleet, sustained reasonably moderate prices until recently for diesel and petrol along with improved performance and comfort in small cars, the resident gas cartel, and a switch by the taxi fleet to hybrids (latterly some EVs) which suit such urban use and deliver lower fuel consumption in that role also having tax offsets to cover maintenance and steep depreciation costs. (Who would buy a used hybrid or EV taxi at the end of its commercial life? We’ll see.) There are mega-giga-oodles of known gas reserves around the globe. And many models of cars are manufactured to run on it. They aren’t imported here in part due to the issues touched on above, but that situation could change rapidly due to various factors as it has in the past here and elsewhere.

22. Svante says:

I’ve had a stab at some numbers below. I think they are fairly firm, empirical, up to the last para where to my mind things necessarily become rubbery.

In Australia there’s likely time yet for another one or maybe two converted dual fuel ICE cars before EVs ever become competitive overall on price, range, running cost, and convenience. The LPG system cost is a small fraction of the premium paid for an EV in the foreseeable future. The electric super charging highway is limiting and getting off and away from it is even more so. LPG fuel price is relatively stable and relative to petrol and diesel prices it is increasingly becoming more economical again. Convenience is related to remoteness, range, repairers, and comfort in that LPG fuel lengthens the life of ICE engines considerably.

An after market or pre delivery dealer installed ICE LPG conversion, usually to dual fuel, comes in at a fifth and less the excess price difference of the EV over the ICE car given in the OP example running only petrol (or diesel). It comes in lower still if the LPG system is OEM. It is yet lower if the OEM system is solely LPG. Another factor is that any carbon price for LPG, well to wheel, would be approximately 30% less than that for petrol or diesel.

Taking an average distance travelled of 15,000km/yr in similar large cars, 2012 FG Falcon XT petrol and FG Falcon XT EcoLPi sedans, petrol consumption of 9.9L/100km at \$1.85/L totals to \$2747/yr, and LPG at 12.3L/100km at \$1.05/L totals to \$1937/yr for a saving over petrol of \$810/yr. In four to six years at this rate the cost of a new not used LPG conversion would be covered, and covered significantly sooner if the OEM system was solely LPG and part of a factory build. In smaller cars with a petrol consumption of 5L/100km at \$1.85/L it totals to \$1387/yr, and an LPG consumption of 6L/100km at \$1.05/L totals to \$945/yr for an LPG saving over petrol of \$442/yr. In smaller cars with OEM LPG factory built systems adding little if anything to the new car cost the pay back time from the cheaper fuel cost also shouldn’t exceed six years. And LPG prices if not set to fall will rise only slowly.

The possible LPG car average \$21750 of a \$16500 to \$27,000 saving inclusive of the LPG system cost made on the premium asked for an EV (\$22500 to \$30000) would better be invested at, say, 7% than at zero real interest which would after ten years compounding yield a substantial amount after a good run north of \$40k which would exceed the price of a replacement new car.

However, in comparison to the OP EV costings, the large LPG car fuel cost indeed is 10c/km, but the smaller LPG car fuel cost is 6c/km and the EV ‘fuel’ cannot cost 10c/km less than that! Say the EV fuel and maintenance combined costs are 9c/km rather than 15c/km less than the smaller LPG car. The savings then over 150000km and 200000km (10 to 13 average mileage years) amount to \$13500 and \$18000 respectively, or an average of \$15750. Yet the price differences observed in the market are said to be \$22500 to \$30000, or an average of \$26250. The average price difference of an EV needs drop by \$10500 before it equates with the average of what may be saved over the lifetime costs of an EV relative to those of a comparable smaller LPG car. I expect in some cases this would also give urban hybrids a similar advantage over EVs.

https://www.elgas.com.au/blog/688-the-forgotten-fuel-autogas-lpg-conversions/

Lack of Choices

If you want to buy a new LPG powered car off of the showroom floor, you currently have very few options.

In fact, you only have two choices.

The current Ford and Holden LPG models are limited to full size vehicles, like the Falcon and Commodore.

These are both excellent cars.

However, consumers are no longer buying full size cars the way they once did.

Australians are driving smaller 4-cylinder cars in ever increasing numbers.

Australians would buy 4-cylinder LPG cars, if they were available for sale.

Strangely, the automobile importers have overlooked this market segment opportunity?

This deficiency is not because of a lack of available LPG models, as the European and Asian manufacturers are producing a myriad of LPG vehicles, including many small 4-cylinder models.

Australia just needs a few of these importers to take the lead and start importing smaller, more affordable LPG cars.

Australian consumers and the importers will both benefit from this initiative.

https://www.autogas.app/
wikipedia.org/wiki/Autogas
wikipedia.org/wiki/Liquefied_petroleum_gas#Motor_fuel

23. Geoff Miell says:

Svante: – “…Fig 14 shows production increasing strongly, up by 70% over the last 3 or 4 years, even though that from refineries has decreased over a longer period most likely due to less oil being refined here.

I’d suggest you are missing the key details – how large are the known Australian LPG total reserves and how quickly are they being depleted?

Per Geoscience Australia:

Australia’s LPG resources in 2019 are estimated as including 856 PJ (203 MMbbl) of 2P reserves and 565 PJ (134 MMbbl) of 2C contingent resources.

https://www.ga.gov.au/digital-publication/aecr2021/oil

2P reserves: _ 203 MMbbl = 32,274,420,870 litres
2C resources: 134 MMbbl = 21,304,297,520 litres

Per Fig 14, Australian LPG well production in 2020-21 was circa 5,400 million litres.
Thus it seems LPG 2P reserves-to-production is circa 6 years, and LPG 2C resources-to-production is circa 4 years.

Australian LPG well production may have already peaked (in 2019-20) and is perhaps now heading into decline (although 2020-21 lower output may be COVID-related).

Per BP Statistical Review of World Energy 2021, on page 16, Australian total proved oil reserves-to-production is 13.9 years (at end-2020). Reserves include gas condensate and natural gas liquids (NGLs) as well as crude oil.

24. hix says:

CNG, not LPG would have been the thing in the last 20 years. In some exotic nations it actually is. When natural gas prices are low and the labourers that retrofit cars are cheap, it works. Really the rational choices in the last 20 years would have been: drive little–> ditch the care entirely for at least 50%, the others, just buy the cheapest normal petrol car. Drive a lot: natural gas, drive a lot within crowded places–> natural gas hybrid (which don´t even exist as a serial model?). That ship has sailed. Electric cars are too good already, both in economic and environmental terms*. No ones going to scale up a technology that is obsolete in 10 years.

*Lets not forget even the environmental part was rather doubtfull a few years ago in many places and even still is today, it just seems unlikly the coal heavy grids will remain such during the lifetime of a new electric car. To make matters worse, battery production is often done on coal heavy grids (yes in a perfect world we just should have a proper global c02 tax with no exceptions to deal with those problems, consumers shouldn´t even have to think about it)

25. KT2 says:

Selling points before sensible cost savings. Marketing 101.

1. Alcohol!
2. V2G capable.

Alcoholics party EV incentive;
The F150 Lightening has…
“up front, … equipped with a drain so that the frunk [front trunk] can be filled with ice and drinks for tailgating, or “front-gating,” as Zhang put it.”

At least they put V2G as a second selling point “powering a home for several days in the event of an electrical outage. “I know you guys have struggled a little bit with storms and the power outages”.

And Elon may try to buy GM, and…
“And with this market cap of \$1.01 trillion, Tesla was worth as much as the next 10 most valuable global automakers combined: Toyota, BYD (China), Volkswagen (VW, Porsche, Audi, Skoda, Seat, etc.), Daimler, GM, BMW, Ford, Stellantis (includes FCA), Honda, and SAIC Motors (China):

“America’s Favorite Pickup Truck Goes Electric

“Ford’s F-series trucks make up the best-selling vehicle line in the U.S. Can its new F-150 Lightning compete with Tesla in the E.V. market?

” (Tesla delivered close to a million electric vehicles worldwide in 2021; Ford dealers sold only about forty-three thousand E.V.s globally last year.) ”

…”According to the International Energy Agency, only two per cent of the vehicles sold in the U.S. in 2020 were E.V.s., far behind E.V. adoption rates in China and Europe. In Norway, seventy-five per cent of new car sales in 2020 were E.V.s.

“Onstage, Linda Zhang, the forty-four-year-old chief engineer of the F-150 Lightning, was describing the electric truck’s “mega-power frunk.” In common with all E.V.s, the F-150 Lightning has no engine. Instead of a hunk of throbbing, greasy metal up front, there’s a lockable storage space large enough to fit two sets of golf clubs, and equipped with a drain so that the frunk can be filled with ice and drinks for tailgating, or “front-gating,” as Zhang put it. (“Frunking,” the logical neologism, was perhaps too risqué for a family brand.)

“In addition to performing traditional tasks like hauling and towing, Zhang claimed, a Lightning with a fully charged battery could serve as an electric generator, powering a home for several days in the event of an electrical outage. “I know you guys have struggled a little bit with storms and the power outages,” she added, referring to Texas’s extreme cold snap last winter.”
….
https://www.newyorker.com/magazine/2022/01/31/americas-favorite-pickup-truck-goes-electric

26. KT2 says:

1902 EV. What happened?
And “Baker’s Torpedo land speed record racer was the first car to have seat belts.”

“The Time Traveler Who Hunted Speed Records in an EV

“Despite never holding the crown, Walter Baker was ahead of his time.

“Walter Baker—seen here peeping from the Torpedo Kid, his electric-powered speed-record car—was proprietor of Baker Motor Vehicle Company, maker of then-popular electric cars. They looked nothing like the Torpedo Kid or Baker’s earlier electric streamliner, named the Torpedo. At the dawn of the automotive age, electrics held everytop-speed record. In 1902, Baker, at the wheel of his first Torpedo, almost certainly traveled faster than any human had before, likely over 80 mph and possibly 100.”

*

“Baker Motor Vehicle Company was an American manufacturer of Brass Era electric automobiles in Cleveland, Ohio, from 1899 to 1914.”

“Founder Walter C. Baker’s Torpedo land speed record racer was the first car to have seat belts. The car was capable of over 75 miles per hour (120 km/h). “https://en.m.wikipedia.org/wiki/Baker_Motor_Vehicle

27. Svante says:

Geoff Miell JANUARY 30, 2022 AT 12:36 AM:
Per Fig 14, Australian LPG well production in 2020-21 was circa 5,400 million litres. Thus it seems LPG 2P reserves-to-production is circa 6 years, and LPG 2C resources-to-production is circa 4 years.

OK, but compare that with Crude Oil Peak’ s Fig 1* showing Australian 2019-21 net LPG exports circa 4900ML pa (~400ML per month) The Lucky Country exporting into a gas saturated global market a similar amount (88% ?) to that produced! No national resource reservation for local use with high local pricing per gov fiat favouring Big Oil/Gas cartel… is plain dumb government policy against the national interest on many levels including environmental, but this IS typical of Australia.

If concerned about how many years the LPG well resource would last for Australian consumption rather than to enrich foreign corporates as rapidly as possible then ask how much longer if fiat policies largely saw it reserved for local use and prudential transitional fuel security during that period of a huge shortfall in installed capacity you see in store for alternate renewables after a crash in global oil production. On current consumption the Australian reserves would be depleted in not 10 but in 20 and more years – longer still if small LPG cars were encouraged.

*Note Fig 1 shows Australian LPG well production in 2020-21 was circa 5,400ML and total Australian LPG use at 1500ML implying 72% rather than about a little less than half from combined domestic and imported sources may be exported.

28. Geoff Miell says:

Svante,
OK, but compare that with Crude Oil Peak’ s Fig 1* showing Australian 2019-21 net LPG exports circa 4900ML pa (~400ML per month) The Lucky Country exporting into a gas saturated global market a similar amount (88% ?) to that produced!

I suspect you are confusing two different petroleum-derived product markets. Liquified Petroleum Gas (LPG) is primarily propane and butane, much easier to liquify than NG, used primarily for non-gas mains-connected heating & cooking, and vehicles (fork trucks, cars). So-called Natural Gas (NG)(whether it is in gaseous or liquified state) is primarily methane, with some ethane, used primarily for gas mains-connected heating & cooking, electricity generators, plastics and fertilizer production, etc.

No national resource reservation for local use with high local pricing per gov fiat favouring Big Oil/Gas cartel… is plain dumb government policy against the national interest on many levels including environmental, but this IS typical of Australia.

Isn’t it amazing how only a million dollars or so of political donations per year keeps government policy (whether Coalition or Labor) aligned with the interests of the fossil fuel industry, but apparently not in the national interest? 🙄
https://reneweconomy.com.au/labor-and-coalition-enjoyed-more-than-1-15-million-of-fossil-fuel-donations-last-year/

On current consumption the Australian reserves would be depleted in not 10 but in 20 and more years – longer still if small LPG cars were encouraged.

If “small LPG cars were encouraged” then I’d suggest these LPG reserves would be depleted faster.
Heavy transport is far more important to keep operating than discretionary use vehicles.

Australia’s total liquid fuels average consumption in 2020 was 895,000 barrels oil equivalent per day. (BPSRoWE-2021, page 22)
Australia’s domestic average production in 2020 was 470.000 barrels oil equivalent per day. (BPSRoWE-2021, page 18)

Whichever way you look at it, Australia is a substantial net importer of petroleum-derived fuels. Australia can’t even refine most of its domestic production. IMO, the only way for Australia to improve it’s energy security is to rapidly reduce its petroleum dependency.

29. Ikonoclast says:

The bottom line is that capitalism can’t save itself. Either we develop a new system or we collapse. It is both that simple and that complex. Capitalism is a programmed guidance system. Its central flaw is that its applied equations and calculations use nominal values to aggregate and compare real values. Anyone who understands the basics of dimensional analysis will understand that this procedure is objectively and scientifically fallacious. It works socially of course as the social-fictive money values we assign things in “the market” and as property holdings backed by the state-corporate monopoly on money-power and violence. The market is sociopolitically instituted and constructed.

Money values are always influenced by (very poor) ethical values. To value things in money is ipso facto a debased ethic. It leads to the destruction of the natural world and human lives. We see this empirically from contemporary outcomes. The environment and climate are sacrificed and destroyed for “wealth”; really for an unsustainable pseudo wealth. People are sacrificed to a pandemic for more of this “wealth” for the already super rich. These are the undeniable outcomes of late stage capitalism. The axioms and algorithms of capitalism axiomatically and algorithmically lead to this outcome. The emerging reality is undeniable. Either we develop a new system or we collapse.

A scientific and social-democratic calculus based on ethical axioms must replace the capitalist calculus with mere property axioms. If we cannot imagine and emerge that new system we are as good as extinct already.

30. Svante says:

Geoff Miell says FEBRUARY 2, 2022 AT 8:57 AM:
I suspect you are confusing two different petroleum-derived product markets.

I don’t believe I am. “Australia is a net exporter of LPG. Most of the LPG is sourced from substantial in-ground gas reserves, being separated from the produced natural gas stream after extraction.” (elgas.com.au/blog/we-are-wasting-our-autogas-infrastructure/)

Crude Oil Peak’s Fig 1 shows a range in Australian LPG production from lows around 1600 and 1800ML/month to highs of 2300ML/m. A production average of 500ML/m (2300-1700) multiplied by 12months = 6000ML/yr. Fig 1 also shows Australian 2019-21 net LPG exports at around 4900ML pa (~400ML per month). Therefore Fig 1 shows that Australian LPG exports equate to approximately 82% of Australian LPG production! Those exports go overseas to run cars cheaply and cleaner on LPG there!

Now, Fig 14 shows Australian naturally occurring LPG well production in 2020-21 was circa 5,400 million litres. Fig 14 shows Australian total LPG production including that from refineries (including imported crude fractions) at around 6000ML/yr which accords with Fig 1.

2013/14 was the run out year for the FG Falcon XT EcoLPi, a large 4.0litre engined, heavy when empty 1800kg(!) large car, and for the same year Fig 14 shows Australian automotive LPG use at around 2000ML/yr or 57% of total Australian use at 3500ML/yr.

Fig 14 also shows Australian non-automotive LPG use to have fallen only slightly in subsequent years post 2013/14 to 2021, but shows Australian automotive use to have fallen massively to around 400ML/yr (1700total-1300non-auto).

The 2013/14 FG Falcon XT EcoLPi Fuel Consumption Combined is 12.3 L/100km; Extra Urban 8.7 L/100km; and Urban 18.5 L/100km which allows over 1000km for currently \$92 per fill from the 88L tank. It’s pretty good compared to best selling diesels today, but current new small cars that could now be running yet more advanced ICE engines at around a quarter or less of the displacement, perhaps twin turbocharged, with even more advanced sequential liquid injection, and in cars of only half the empty kerb weight the average combined fuel consumption may be well below 4L/100km. That efficiency increase means that for the same 2013/14 Australian automotive use of LPG perhaps up to 4 times as many LPG vehicles could now be on the road as was then for the same LPG consumption. Add on the LPG now currently exported (4900ML/yr) to run cars cheaply overseas to that fraction consumed by automotive use in 2013/14 (2000ML/yr) for a further 250% addition to the number of cars that could be on Australian roads now running LPG produced in Australia. The LPG fleet in 2013/14 comprised around 2% of all vehicle registrations, so if upgraded as above in the national interest (as other countries do, and do so in part susidised by imported low priced Australian LPG) today the LPG fleet could be around 20% of all Australian vehicle registrations (4*2.5=10). Plug that positive but Lucky Country forgone displacement of oil imports into the national balance of payments, national security, environment, and etc!

“On current consumption the Australian reserves would be depleted in not 10 but in 20 and more years – longer still if small LPG cars were encouraged.”

If “small LPG cars were encouraged” then I’d suggest these LPG reserves would be depleted faster.

No, if the LPG fleet were upgraded as above reserves would last about the same time, 10+ years if not somewhat longer when allowing for slow but steady growth in numbers switching to various EVs.

Heavy transport is far more important to keep operating than discretionary use vehicles.

Absolutely. Agreed. And LPG boosted diesel truck/locomotive engines would stretch that much further. A little added LPG liquid injected directly into diesel engines not only cools but boosts power substantially, and so improves mileage. In addition to the standard diesel tankage a rather small LPG tank is added to the vehicle.

Whichever way you look at it, Australia is a substantial net importer of petroleum-derived fuels. Australia can’t even refine most of its domestic production. IMO, the only way for Australia to improve it’s energy security is to rapidly reduce its petroleum dependency.

Agreed.

31. Svante says:

Ikonoclast, allegedly someone else pretty woke to the unreal game of greed may once have quipped: “Love of money is the root of all evil…”