May 27, 2008 Comments

Will Converting to Electric Cars Cost Us Nothing?

Gas PumpI read a TechCrunch article today about how much it would cost to convert all fuel vehicles into electric vehicles. According to the article, Philip Greenspun calculates it will cost us nothing to convert to electric cars, but I beg to differ. He deduces that for the cost of annual vehicle fuel consumption, everyone in the U.S. can have an electric vehicle instead of a gasoline-powered one. I do like the math and it would be great if it were true, but there is one major problem with electric cars. Current battery technology cannot support it, because the range that an electric vehicle can travel on a full charge is quite limited. Another problem with current battery technology is that batteries take a relatively long time to fully recharge.

What do you do if you’re on a road trip and your battery is running low on charge? Even if battery technology improved to allow for a five-minute full recharge, where would you go to recharge? You can recharge at home for intracity commuting, however, you still need a recharging station when you travel further distances. Unfortunately, there will be no incentive for entrepreneurs and corporations to build recharging stations because electricity is so much cheaper than gas. It would take pennies to recharge your electric car so it will be up to the government to provide public recharging stations. There would be significant capital investment and there would never be a return on that investment. I think the cost to put an electric car in front of every house is much higher than Philip has calculated.

Although there won’t be anyone rushing to build recharging stations, there is definitely a bright future for improvements in battery technology. It will be the key to improving hybrid vehicle technology as well as fully electric vehicles. The electric double-layer capacitor is one type of technology that shows a lot of promise. Eventually someone will start to mass produce a highly efficient energy storage device and it will change the world. When this happens electric cars will be much more viable and it will open up new markets. At a minimum, the majority of vehicles (if not all) will be hybrids that incorporate the new technology. Only then will we be able to wean ourselves from our addiction to petroleum.

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    • Viewing 6 Comments

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      What if the recharging stations just swapped out your battery with another, already-charged battery? You'd be up and going instantly again.

      The idea isn't without it's own problems... what if an already-charged battery isn't available (you need extra just sitting around in case)? What about if I bring a new battery which stores energy well and receive one that's near the end of it's life?

      I think there could be answers to these questions... but it's something to think about.
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      Just because the margins on electricity are so low, it doesn't mean that the infrastructure wouldn't be made available.

      If you think about it, North America is already dotted with gas stations all over the place. Pretty much all of those are hooked into the electrical grid. All you would need is a couple of metered sockets, and you're good to go - your gas station is now an electricity re-charging station.

      Swapping batteries might be good for a laptop, but swapping a 200lbs NiMH car battery doesn't sounds like my idea of a quick stop-over.
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      I'm sure a tool (think robot arm) could be made to pull a 200lb battery in and out very quickly and easily.
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      There wouldn't be enough profit for gas stations to convert to recharging stations. If it only costs pennies to recharge, the stations would not be able to make enough money to cover overhead expenses. For a time they would be able to provide both fuel and recharging, but eventually when demand for fuel disappears they would go out of business. I still think the government would have to provide this service just as it provides other transportation services now (roads, traffic signals, etc).

      Performing battery-swaps is an interesting alternative. It probably could be profitable, but it could be a bit tricky logistically. There would have to be standards around battery sizes, performance specs, etc. The process of performing the swap would have to be quick, convenient, and reasonably priced.
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      I get your point about the low-margins, but here in the U.K. at least, the margin on gas is only a few pence at best anyway. They actually make most of the money from selling candybars, washer fluid etc. Besides which, a low cost product does not necessarily entail low margins - look at gift cards for example. They cost pennies to make, and are sold at a 5-fold mark-up - yet people still buy them. As long as they can sell electricity cheaper than gas, then people will be able to make a profit easily.
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      @Jack

      To be honest, I'm not sure the margins are like on gasoline at service stations in the States. But now that you mention it, I think you're probably right. Even if gasoline has a high profit margin of say 20% here and a typical fill-up costs $60, that would be $12 of profit per tank. Paying $12 plus the cost of the electricity would still put the cost of a full recharge well below the $60 it would cost to fill a tank with gas. The cost of inventory will be much less than with fuel, so the margins could potentially be a lot higher.

      Perhaps the biggest problem that existing service stations would face, is "competition" from people recharging at home. The majority of their business would likely come from highway travelers, and stations within cities might lose a lot of business. It will also open up new markets as well, such as hotels offering vehicle recharging services to their guests. Maybe it will be something offered in many parking lots. Going to the mall or grocery store? Why not pay a couple of bucks to have a "full tank" when you're done shopping!

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