THE GREATEST “STORY” EVER TOLD; THE VOLT

26 Oct

DATELINE:  17 February 2012;  Smalltown, USA

GE has made a move to buy as many as 25,000 rechargeable cars, almost half of them from GM.

This is not a good business case.

The $41K plus Volt is designed to only go on electric for the first 25 to 50 miles. After that an onboard gasoline engine starts charging the battery.

The rental car companies have ordered only a few hundred of the electric vehicles, many of them Nissans.

What does GE see that the rental car companies don’t?

FedEx and UPS have a fleet of about 175,000 vehicles.

Their “alternative fuel” portion is only 3,000 vehicles; less than 2%.

Of these 2,200 run on compressed natural gas, liquefied natural gas, propane, hydrogen fuel cells and the remainder are electric or hybrid.

Therefore only one half of one percent (.004) of the delivery fleet is electric.

Again, companies that depend on their vehicles to make a profit do not appear to see an advantage to electric vehicles.

Assume that the average “business use” for a vehicle is 100 miles per day. The yearly mileage would be 100 x 5 (days/week) x 50 (weeks/year):

25,000 miles per year.

The first 30 miles per day, on a Volt, would have no hydrocarbon emissions IF you do not count the tons of coal used in an electric generating plant to recharge the Volt.

That means that 70% of the 25,000 miles per year use some amount of gasoline to recharge the engine. Assume that a Volt gets 50 miles per gallon while charging. This results in 18,000 recharging miles per year divided by 50 miles per gallon. 

Final figure; 300 gallons of gas required to run a Volt each year.

$3.50 per gallon for 300 gallons results in a cost of $900 dollars for gas per year.

Assuming a standard gasoline engine uses 30 miles per gallon; $3.50 x 25,000 miles equals $3,000 per year.

We have saved $2,100 every year using a Volt as opposed to a Chevy Impala.

However the Impala cost is $23,000 as opposed to the $41,000 cost of the Volt.

But wait, the taxpayers are reimbursing the Volt buyers $10,000. So the cost of the Volt is really only $31,000.

The taxpayers are subsidizing GE $110 million dollars for the 11,000 Volts that they plan on buying.

But GE didn’t pay any taxes last year so it is a real savings for GE; not just “tax credits.”

Now most fleet vehicles are turned in every 25,000 miles or one year of use. This makes our calculation simple.

Cost savings for raw car, Impala over Volt = $8,000 per vehicle

Cost savings for fuel, Volt over Impala = $2,100 per vehicle year.

Difference?  Using a VOLT =  A loss of  $5,900 for every Volt that GE buys.

BOTTOM LINE: WHERE IS THE BUSINESS CASE FOR BUYING A VOLT?

There does not seem to be one.

There seems to be a POLITICAL CASE though.

Oh yes, I should mention that the local fire companies are getting special training to handle fires in electrical vehicles. You should determine if your local fire company is required to wear HAZMAT suits in that situation.

My work here is done.

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2 Responses to “THE GREATEST “STORY” EVER TOLD; THE VOLT”

  1. Ankur Mithal December 5, 2012 at 5:15 am #

    Fools rushing in where angels fear…
    Often the “real” cost gets lost in the blaze of rhetoric and hoopla that accompanies a political initiative. Wise to make a dispassionate assessment.

    • Waldo "Wally" Tomosky December 5, 2012 at 4:36 pm #

      Thanks Ankur. I thought something needed to be said (and never let it be said that I could keep my big fat mouth shut). Thank you for following my blog(s). Wally

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