Saturday, January 7, 2012

Kill the Electric Car -- Says Washington Post

Tesla Model S [200 mile range]; $57,900] (c) Tesla Inc.
Click here for referenced story - The Washington Post

Rick Wagoner, of the Washington Post Board of Directors, is likely behind this editorial which heralds the elimination of the tax incentives for purchasers of electric vehicles, and ends the subsidies for the Electric Vehicle program. 

EV1 [1996 - 99:  2000 Cars produced] (c)

Since he arrived on the Post's Board there has been a stream of of stories maligning the electric vehicle [EV] industry, slamming EVs as a waste of money and taxpayer subsidies.

Interestingly, Warren Buffet quit the Board after Wagoner took his seat on the Board.

Rick was most recognized for being named one of the worst CEOs of 2008, after driving General Motors into the toilet by losing $82 Billion and 90% of market valuation, and wiping out many a 401K account in the process.

How Rick Wagoner ended GM's EV program       (c)

 Rick didn't like the Electric Car program, so he rounded up the extremely popular EVs leased by more than 2,000 consumers, and had them all crushed -- even the one requested by the Smithsonian for historical purposes.

Let's take a look at the EV and its pros and cons.

The EV may have a higher up-front cost since the economies of scale have not yet been achieved.  Demand, improved batteries, and the growing number of manufacturers will change that. 

The federal government could create that demand by replacing 30% of its 750,000 internal combustion engine vehicles with EVs.  Government purchase orders for 200,000+/- EVs would ramp up economies of scale in a hurry, and prices would drop precipitously for the average consumer.

Prices are coming down, and improved battery technology is boosting the driving range to more than 400 miles on a charge.

GM's Volt is constantly under fire from -- GM, which seeks to discourage consumers from the EV.    Interestingly, it has a lower range [35 miles] than the GM-EV1 [100 miles] from 20+ years ago.  In fact, it has the lowest range per charge of all the EVs in production; strange, since the EV1 technology is fairly old now.  Technology usually advances over time -- except in Detroit.

After overcoming the initial purchase price of an EV, maintenance is limited to plugging it in at night to charge the battery.  Maybe after 50,000 miles, it might be time to change the tires. 

Maintenance Issues: EVs vs Gas Powered Vehicles

Gasoline Powered Vehicle
Emissions Inspection
Every two years
Transmission Tune-Up
EVs are generally gear-less
Every 50,000 Miles

Timing & Serpentine ..Belt  Replacement
40 – 80,000 Miles
Engine Tune Up
Every 20,000 Miles
Tire Replacement
Oil Change
When they wear out
No oil to change!
When they wear out
Every 5,000 Miles

The obvious negative is the limited driving range.  You won't be able to drive more than 400 miles in a day; Tesla's battery pack can be fully charged in 3.5 hours;  for the rest, we'll have to wait for better batteries to be designed. Then again, most commuters don't burn up more than 150 miles in a round trip commute.  If the US Postal Service used EVs, their vehicles rarely exceed 40 miles on their routes, and they would save millions of dollars in fuel and maintenance costs.

Now, let's try to figure out why Rick Wagoner, the US auto industry, and the gasoline companies are so resistant to the EV.

Gasoline companies:

EVs don't use gasoline for fuel, and don't need engine or transmission oil.
Average annual savings for consumers:  $3,000/year. 
And, no pollution.

Dealer Service programs: 

A major loss for dealerships since this is a key profit center for them; perhaps even greater than the profit margin on sales. 
No maintenance required, no Service required by mechanics.
Component Parts:  

Chrysler advises that there are more than 14,000 moving parts in the engine and transmission alone.
The EV motor has FIVE [5]; count them: FIVE!  Not much maintenance there.
And, EVs are Direct Drive; i.e., there are neither transmission nor gears.
The motor's spindle just goes faster with no strain -- and lots of torque, and the car goes faster.
The Tesla accelerates from 0-60 in 4 seconds -- better than a Maserati.

The Big Three have thousands of subsidiary companies manufacturing those 14,000(+/-) component engine parts, each of which is a profit center.  Now, most of those parts are manufactured abroad, so neither US companies nor workers will be affected once the EVs catch on.

State and Federal Tax Collectors:

Federal and state governments collect hundreds of billions of dollars via fuel taxes at the pump.
As electric vehicles replace those with internal combustion engines, these revenues will fall, and eventually disappear.
Statistics are difficult to obtain from the government, but, we'll present what's available"

Federal Revenues: 
No accurate figures are available, although the Federal tax revenue is estimated at about $29 Billion

Here's the rough calculation: 
a.  Gasoline Consumption: 300 million gallons per day x 365 days per year
b.  $0.184 cents per gallon tax
c.  Total:  $20.1 Billion

a.  Diesel Consumption: 100 million gallons per day x 365 days per year
b.  $0.244 cents per gallon tax
c.  Total:  $8.9 Billion

State Revenues [averaged for all]:
a.  Gasoline/Diesel Consumption: 400 million gallons per day x 365 days per year
b.  $0.302 cents per gallon tax
c.  Total:  $40 Billion

So, the support that should be coming from the federal and state governments is vague at best; but, considering that they stand to lose $69 Billion in tax revenues if the electric car replaces the gasoline powered cars, you can understand their position.

Offsetting the Carbon Footprint:

Some argue that generating electricity by burning coal and oil for EVs creates just as much pollution as is created by auto combustion engines.  That of course ignores nuclear power, wind turbines, hydro-electric plants, solar panels, etc., which produce no carbon residue.  It also ignores that those carbon-producing plants will operate whether they're producing electricity for EVs or for shopping mall air conditioning systems, or Al Gore's mansions.

Had Wagoner and his ilk not destroyed the EV program years ago, the EV would be in full production now, and we'd not have suffered from the massive increases in gasoline prices.  We'd be driving more efficient vehicles, and technology would have advanced significantly, in turn, creating far more jobs than were lost.

[In the early days of computers, it was feared that computers would displace workers. Instead, the computer industry created millions of new jobs and grew the economy ten-fold.]

Wagoner and company no longer have the power of the Press at their disposal, although he's managed to commandeer the editorial page at the Washington Post.

But, the Post may soon be as obsolete as the internal combustion engine.  And, Rick Wagoner will be manufacturing buggy whips -- likely with a federal subsidy.