Electric Car Savings

Everyone has felt the pinch of the extreme energy costs in their wallets and budgets over the last few years and we have been inundated with theoretical new technologies that can help provide alternative power sources for our vehicles in an effort to de-emphasize our demand for foreign oil imports. Nothing new, just a new day with the same old story. Gas is expensive, heating oil is going to be outrageous, and transportation costs are increasing our day to day product costs. We hear about our car companies focusing on hybrids and we hear about E85 and we hear about alternative energy sources. However, one thing all of these things have in common is that they are either not cost effective at the moment or the technology isn’t ready. We’ll have to wait 3-5 years for some and up to 10 for others even in the best case scenarios. It seems like we are chasing our tails more than moving forward.

I’m optimistic though. Eventually, with enough time, money, and breakthroughs in technology, we will find an alternative source for a major portion of our demand for oil. Until then, we are going to have to find a way to decrease our daily utilization of oil by becoming more efficient, finding short term solutions, and basically, deal with a little bit of heartache which will allow us to climb out of the grand canyon sized hole we have dug ourselves into. One of these short term solutions has turned up in the form of retrofitting vehicles with electric “engines.” I ran across an article focusing on a man who turned his gas guzzling vehicle into a battery powered green machine. Let’s take a look at his story and then I’m going to run through some numbers which will illustrate some of our short term pains in the hopes of easing the future.

Larry Horsley, a self described do-it-yourselfer, converted his 1995 Chevy S-10 pickup truck into a battery powered truck. Yes, he did it himself and he says you can do it too if you have any mechanical proficiency at all. However, it did take him about 3 months to complete the conversion with most of the time spent waiting on parts arrival (leads me to believe this is not a one stop shop kit). The conversion involved removing the entire gas powered engine, radiator, fuel injection system, and yes, the exhaust system. As we all know, a battery powered vehicle doesn’t have any emissions to worry about. Great, it saves on gas and also helps out our environment. Everything up until this point sounds perfect. Assuming we have some tools and know how to use them, any of us can convert our car/truck given enough time and effort.

But is it really a cost savings? It hurts each and every time you go to the pump and put upward of $50 in your tank when it used to be $25. It sure would feel good if you had something you could drive which would put an end to that wouldn’t it? The vehicle Horsley has made allows him to do that. He never has to purchase gas for his truck ever again. Horsley states that he has about $12,000 in the truck, including the cost of the truck. Dealers say this is about standard cost. Well, that doesn’t sound too bad considering all of the newer vehicles coming out on the market with high mileage ratings and hybrid technology are well above that. Used vehicles running on battery power aren’t all that big of a deal since the engine wear and tear associated with older used vehicles is non-existent. Basically, go buy any vehicle in good shape structurally and convert it, you’re good to go.

This is where my numbers machine kicks in. I see the costs and the savings and I began to think are we really saving any money? We are all looking for ways to save money right? Since the price at the pump is the primary issue here (we really don’t care how much oil we use, just the price of it), we should be looking at the actual cost of the conversion. Information was not given on the complete cost of the conversion to battery power, so let’s utilize some basic guesstimates. Horsley says the $12,000 includes the cost of the truck. It’s a 1995 S-10 so the cost of that should be fairly minimal considering this is 2008. We’ll give him a generous figure of $6,000 for the truck. That leaves us $6,000 as the cost of conversion, including batteries.

Statistics for his vehicle shows that he can go a total of 40 miles between charges (there are 20 batteries in the system). He can travel up to 60 miles per hour and there is no air conditioning installed. He mentions that people only drive about 20 miles per day on average so the 40 total miles is good enough on average (I don’t know where he got that number but we’ll go with it). Now, we have enough data to find out our savings. Let’s say on average, a gallon of gas costs $3.75 (national average is right there at the moment). $6,000 in cost of conversion divided by $3.75 yields us 1,600 gallons of gas in immediate costs. If we use his 20 miles per day number, an average American will drive only 7,300 miles per year (much lower than the 12,000 I’ve normally heard). Using an average of 21 miles per gallon, at 1,600 gallons, that totals 33,600 miles that can be traveled on the costs of conversion. 33,600 miles divided by 7,300 yearly miles gives us 4.6 years of travel.

The cost savings aren’t really there according to the numbers given. If we utilized 12,000 miles per year, we are still close to 3 years of travel time paid for up front. Horsley mentions that he estimates that he has “saved” about $700 in gas costs in 4 months while driving his converted truck. Working the numbers out, that equates to him driving about 12,000 miles per year given $3.75 per gallon gas and 21 mpg. Even at that rate, he still spent 3 years worth of gas costs up front to “save.” He also mentions that he no longer has to pay for oil changes or tune-ups which would add to the total savings. Agreed, so over 3 years, that saves about $400. However, in all of this, he has left out the cost of electricity to charge the vehicle. Energy costs are high so that must be accounted for.

Is he really saving any money? Sure, after about 3-5 years he will, but is that what we need when we are looking for an actual costs savings immediately to help our budget and wallet? As I said before, our intermediate issues are going to “cost” us more than what we are trying to replace. But, the future will be cheaper. Think of it as “biting the bullet.” Horsley chose to bite the bullet and lay down money up front rather than be nitpicked on a weekly basis at the pump. As we migrate away from foreign oil, we will most likely ALL face similar choices. Pay upfront costs for a better future or continue to be held down by the thumb of bubbling crude. One thing to keep in mind, as more and more people switch to battery power, our electric demands will go up and how does electric get produced? We must be careful on switching demands onto something that will increase its costs to a similar state of peril. We might save ourselves gas money, but end up spending that savings on electric bills.

Citation: http://www.cnn.com/