By on October 20, 2015

 

An interesting combination of reports, compiled by the New York Times, shows that Americans saved money at the pumps from cheaper gas is mostly going to more gas and more expensive gas.

The average American should have saved roughly $41 from cheaper gas prices, according to a report by JPMorgan. Instead of taking home those savings, most people only took home $22. A separate study by Brown University and University of Chicago researchers indicated that most people were buying more expensive gas when gas prices dipped.

The phenomenon, which is called “mental accounting,” roughly translates to people spending a target amount of money — regardless of price.

According to the report, people spent a disproportionate amount on gas compared to the price per gallon.

The JPMorgan study compares gas spending between December 2013 and February 2014, when prices averaged $3.31 a gallon, with gas spending by the same people in the same period one year later, when average prices were one dollar lower. The study found that the average American spent $136 per month on gas during the high-price period and $114 per month on gas during the low-price period. While the price of gas fell by roughly 30 percent, spending on gas declined by only 16 percent.

We already know that spending more on gas isn’t necessarily better, but according to the Brown University and University of Chicago study people still treated the lower gas prices as a holiday rather than a savings event.

In 2008, when gas prices were falling due to a plummeting economy, researchers found that “although almost all indicators of consumer spending and well-being were plummeting, households substituted to higher-octane gasoline.”

So, you know, what will we spend gas money on when we’re all driving free* electric cars.

*Electricity isn’t free. 

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99 Comments on “When We’re All Driving Electric Cars, What Will We Be Spending Gas Money On?...”


  • avatar
    Chan

    If EVs go mainstream, does anyone really think utility companies and governments won’t quickly find new ways to milk money out of drivers?

    Public charging stations would very likely become expensive and in line with urban parking rates.

    New home charger systems could become pay-per-kWh, allowing the utility companies to float the EV charging price independently of the rest of your electric bill.

    Basic electricity rates could go up.

    Saving money isn’t a strength of the American public, anyway.

    • 0 avatar

      It’s already happening.

      Faced with the specter of reduced gas tax revenues, some states have already introduced an annual flat fee for EV drivers. When one computes the annual cost of gas tax compared to the EV fee, the EV driver is already paying more in those states..

      Public charging stations aren’t ‘likely to become expensive’, they already are. I pay about 10c/kWh at home, Blink (Car Charging Group) charged me an equivalent of 64c/kWh yesterday lunchtime, I’ve paid as high as $1.26/kWh. Blink are going bankrupt because EV drivers only use the stations when they have to. They have priced themselves out of the market. Smart guys. As battery capacities increase (think GM Bolt) folks will have less and less reason to charge away from home anyway, which will kill off the independent charging networks for good.

      Higher electricity rates for EV’s at home isn’t enforceable. If a law is passed that I have to pay extra to charge using my dedicated EVSE at home I’ll quit using it. One can plug an EV into a standard 120v outlet. It’s slower, but we do have all night to charge. No doubt I would have an electrician install a ‘dryer outlet’ in the garage and use the portable charger that came with the car to charge at the same rate as a dedicated station on a separate meter.

      Electricity rates could go up, as could the price of eggs. Historically electric rates have been very stable.

      Saving money not the American way? Yep you got that right, for some reason folks still drive gasoline cars :-)

      • 0 avatar
        beastpilot

        The national average gas tax is 48.9 cents per gallon, and the average passenger car drives 12,000 miles and gets 33 MPG.

        So… Which states charge a premium of more than $180 to register an electric car? Washington is $100 so there’s one that isn’t…

        • 0 avatar

          Georgia has introduced a $200 EV fee this year. ($300 if the EV is used commercially)

          Georgia gasoline car drivers pay 26c/Gal in gas tax for the road fund. (Up from 7.5c!!!).

          At 26c/gallon 12,000 miles a year and 33 mpg we are looking at an annual excise tax of slightly less than $95. AN EV costs more than double in the same state.

          http://commuting.blog.ajc.com/2015/06/30/higher-gas-taxes-start-tomorrow-in-georgia/

          • 0 avatar
            beastpilot

            “Faced with the specter of reduced gas tax revenues, some states have already introduced an annual flat fee for EV drivers. When one computes the annual cost of gas tax compared to the EV fee, the EV driver is already paying more in those states..”

            Your statement was that it was higher in all states that had implemented the flat fee. In fact, Georgia has basically the lowest gas tax and highest EV tax rate, so it appears to be the only state with this inversion. In every other state an EV is cheaper.

            From http://www.govtech.com/state/Georgia-Slams-Brakes-on-Electric-Cars-.html:
            “Literally it’s uncharted territory because no other state has done what Georgia has done,” said Francis, who is himself a Nissan Leaf owner. “They’ve gone from an incentive to a disincentive.”

          • 0 avatar

            @Beastp

            You are right, Washington state have increased their gas taxes from what I calculated several years ago. Back then it was 37.5c/Gal.

            http://www.washingtongasprices.com/tax_info.aspx

            BTW Washington State have increased the EV Fee form $100/Year to $150/year.

            http://nwnewsnetwork.org/post/tesla-bmw-culled-washington-state-electric-car-sales-tax-break

            Don’t forget that EV owners fork over more in sales taxes to the states since the cars do cost more than the gasoline equivalent.

        • 0 avatar
          Lorenzo

          I’d question that 33 MPG figure, but I’m too lazy to look it up.

          • 0 avatar
            Vulpine

            The average CAR gets about 22-24mpg in city driving and about 26 in mixed driving. I own a Fiat 500 that gets just shy of 30mpg in mixed driving and a Fiat 500 is hardly “average”. Sure, that Fiat 500 gives me 40mpg or better on the highway, but that’s now where most people drive full time.

            On the other hand, pickup trucks are lucky to even reach 20mpg in mixed driving on average and many rate far lower in town.

            No, that 33mpg figure is very specious.

  • avatar

    “The phenomenon, which is called “mental accounting,” roughly translates to people spending a target amount of money — regardless of price.”

    Err…..

    I don’t call this a phenomenon or mental accounting, I call it a budget.

    Prices go up, folks drive less because they have to. Prices go down, people drive more because they can. If you budget $100 on gas per month, that is what you will spend. Have to commute and can’t choose to use less? Actually you can, some will change jobs to get back on budget.

    • 0 avatar
      dolorean

      JP, I belive what he is referring to by ‘mental accounting’ was “that most people were buying more expensive gas when gas prices dipped”, not your inference that they are choosing to drive more now that gas prices are cheap. In other words, people are strangely buying the 89 or 91 octane gas when the prices are low, using the savings they would’ve had for the 85 or 87 octane.

  • avatar
    28-Cars-Later

    Electricity when the rates double or triple. Duh.

    • 0 avatar

      What basis do you have for asserting an increase of double the or triple electric rates?

      Since July 2011 I have seen electric rates vary from 8.935c/kWh up to 10.643c/kWh. The variance between high and low price is 1.708c/kWh or a 19% swing.

      If one looks at gasoline in the same time period I’ve seen gas prices range from $1.96/Gal to $3.71/Gal. A variance of $1.75/Gal or 89% swing.

      Electricity rates are very stable when compared to gasoline as a fuel.

      There is no historical basis for asserting that electricity rates will double or triple. However such an assertion can be applied to gasoline.

      It is very common for drivers used to gasoline fueling practices and prices to transfer their experience to electric cars and electricity. While this is understandable behavior, its dead wrong.

      • 0 avatar
        28-Cars-Later

        I’m just spit balling I don’t have any other than to suggest electricity demand of an EV transportation system might outstrip supply. The electricity rate for my apt rose 12% this year (a “one time” increase) and if I remember correctly 6% the previous year. Since 2007 it has probably gone up at least 30-35% (this also includes the flat “customer charge” which doubled since then and makes up at least 1/3 of the bill) while I have added a second television and new microwave for appliances. Cheapest bill I ever remember getting was $17 in 2007/8 when I first moved in, now the cheapest is in the low $30 range with avg in the high to low 40s (and I am not home as often as I used to be). Take the same math, apply it to a whole house, then add plug in EVs to 20% of the population.

        • 0 avatar
          28-Cars-Later

          Actually now I’d like to see some data simply because until now petroleum and electricity were separate resources but both required to maintain a 20th Century standard of living (yes I am aware petroleum is required for products other than fuel, bear with me). If petroleum demand is somehow reduced than in theory it becomes less valuable, however I believe no savings will be realized due to demand in other countries picking up the slack. However electricity rates will rise due to more of it being used unless the unused slack is sufficient. However nuclear is largely being phased out and IIRC makes up 19.5% of US electricity so as it goes offline it needs to be made up by new sources be they solar, nat gas, or coal. Many of the older coal plants are being converted to nat gas, but this only works from a pricing standpoint while nat gas is “cheap”. What happens if electric consumption starts to catch up to supply as nuclear is phased out and its replacements are slow in coming? Now they will get you where you live and how you commute because even if you have little to no commute you have to live somewhere.

          http://www.world-nuclear.org/info/Facts-and-Figures/Nuclear-generation-by-country/

          http://www.eia.gov/electricity/data/eia923/index.html

        • 0 avatar
          FormerFF

          I’m not sure you realize how much surplus generating capacity is available during non peak times. Look at this demand chart: http://www.eia.gov/todayinenergy/detail.cfm?id=830 . You’ll notice that between around 9 PM and ending around 8 AM, demand falls off well below the daytime average, to the point where at times, usage is half the daytime normal. All of that capacity is going unused and is available to charge cars. The utility company would very much like to flatten out that demand curve by increasing its sales overnight. My electric supplier has a super cheap overnight rate available, to where EV miles cost something like 1.5 cents for fuel. A lot of us pay that much for tires.

      • 0 avatar
        Lorenzo

        I’m paying 18.9 cents per kWh, total bill divided by kWh (quotes that don’t include taxes, etc. are meaningless). If everyone charges their electric car in off-peak hours, those hours will no longer be off-peak. The power companies will use graduated rates based on consumption levels, and we’ll be paying through the nose to charge our cars overnight. The only people who can drive will be Volkswagen diesel owners who make their own bio-diesel with oil stolen from McDonald’s, and their neighborhoods will smell like Big Macs.

    • 0 avatar
      Syke

      Admittedly, there is no historical basis. However, I have a feeling that most of us here have roughly the same view of human nature: When a resource becomes critical for our driving, expect the price to rise. Why? Because the producer can. And very few of us have the competing power company to switch over to if our regular supplier starts getting greedy.

      Unlike retail gasoline, retail electricity doesn’t have daily oompetition.

      • 0 avatar
        healthy skeptic

        @Syke

        Electricity already is an extremely critical resource, and utilities generally aren’t gouging consumers. In a lot of markets, it’s heavily regulated anyway.

        Why would EVs change this?

        • 0 avatar

          @Haelthy Skeptic.

          That’s right.

          However let’s give our other skeptics the benefit of the doubt and allow for a moment a situation to occur where electricity sky rockets in price. Al because of those evil EV’s.

          There is this thing called a PV solar panel. They are already quite cheap, if electricity goes way up, guess what home owners will be tempted to do? So to Skye, yes electricity does have competition.

          PV Solar Adoption in Hawaii is comparatively high due to high electricity rates. The same has happened in Australia where utilities over-invested in the electricity infrastructure and ended up having to raise rates to pay for the over investment..

          With gasoline you can’t very well start refining your own if prices go up. To Skye there is no competition for Gas stations, except for another gas station. With electricity you can roll your own and compete head-on!!

          • 0 avatar
            krhodes1

            PV solar panels are cheaper than they used to be, but for an installation sufficient to charge an electric car in a reasonable amount of time I would not call them cheap (baring government subsidies). They also have a finite lifespan, and to use them for charging a car you run into the little detail that you most likely want to charge the car overnight… So then you are paying for TWO big batteries, that also have a finite lifespan.

          • 0 avatar
            redav

            krhodes1,

            PVs typically are warrantied for 20 or 25 yr. And they don’t just stop working like other devices. Instead, they gradually lose output. Even so, they almost universally can be kept in service for 30+ yrs. (I only use the first 30 yrs for cost estimates, so everything past that is ‘free’ electricity.) Roofs generally need replacing more often.

            What you get out of solar panels depends on location. In my area, a 4 kW system produces enough electricity to drive an EV ~12k mi/yr. Based on the open PV project, a 4 kW system can be installed in my state for ~$12k. That’s essentially prepaying for your next 30+ yr of fuel. For fun, calculate your gas costs and compare.

            Installing solar doesn’t mean going off-grid, so you don’t need a home battery. Go ahead and plug in the EV at night and use grid power (which is cheaper at night if you have a variable rate plan). During the day when demand is higher, PVs will power your home and pump any excess back into the grid which reduces the need for peak marginal power plants.

      • 0 avatar
        28-Cars-Later

        Actually now I’d like to see some data simply because until now petroleum and electricity were separate resources but both required to maintain a 20th Century standard of living (yes I am aware petroleum is required for products other than fuel, bear with me). If petroleum demand is somehow reduced than in theory it becomes less valuable, however I believe no savings will be realized due to demand in other countries picking up the slack. However electricity rates will rise due to more of it being used unless the unused slack is sufficient. However nuclear is largely being phased out and IIRC makes up 19.5% of US electricity so as it goes offline it needs to be made up by new sources be they solar, nat gas, or coal. Many of the older coal plants are being converted to nat gas, but this only works from a pricing standpoint while nat gas is “cheap”. What happens if electric consumption starts to catch up to supply as nuclear is phased out and its replacements are slow in coming? Now they will get you where you live and how you commute because even if you have little to no commute you have to live somewhere.

        http://www.world-nuclear.org/info/Facts-and-Figures/Nuclear-generation-by-country/

        http://www.eia.gov/electricity/data/eia923/index.html

        • 0 avatar

          The reality of the current situation is that utilities have seen a softening of demand for their product over the last decade. Primarily due to consumers and companies installing more efficient appliances (HVAC, LED TV’s, LEED Certified offices etc).

          Utilities would welcome an return of demand for their product.

          Increased utilization of wind energy or natural gas is making up for the planned reduction in Coal or Nuclear.

          • 0 avatar
            28-Cars-Later

            “utilities have seen a softening of demand for their product over the last decade. Primarily due to consumers and companies installing more efficient appliances”

            Ok, so demand has dropped while the price has already risen be it for reasons COLA or greed. If demand returns to historic levels with EV’s becoming commonplace, pucker up.

            “Increased utilization of wind energy or natural gas”

            Natural gas prices could rise at any time. Things like solar and wind are at least a fixed cost.

            @khrodes

            Precisely you will pay either way. Initially I could see how the fixed cost of solar panels pays for itself over time and thus eventually free energy for the commuter, but somehow someone will be in your pocket even in such a case.

          • 0 avatar

            HPWhite,
            Whatever may be the case elsewhere,in California the Power Companies are NOT looking for more consumer use.
            We are constantly deluged w/PSAs telling us to reduce our power usage,esp during daytime hours.The LA Power Co wants ACs to be set at 78,altho I know of no one who does so.
            California uses hydro-generated power and due to long term drought and insane water management by assorted state bureacracies there has been a huge drop-off in power from our dams.For past couple of years there has been a sharp drop-off in state winds leading to another shortfall in power generation.(As of a month or two ago Oregon and Washington were still suffering from a “shortage” of wind.)

      • 0 avatar
        krhodes1

        Technically, in my state there are “competitive” electric suppliers. You pay for the electricity and the delivery of that electricity separately (though billed together), and you can choose your supplier. In reality the choice is between expensive, really expensive, and really, really, really expensive farm raised free range all natural electricity. I have the cheapest option and still pay something like $.20/kwhr, delivered.

        So my answer is exactly the same as 28’s we will be paying for electricity, because the current infrastructure is NOT up to the charging demands of 300M electrics cars, and there ain’t no such thing as a free lunch.

        And pay can mean paying the utility, or it can mean paying to install and maintain your own solar panels. Either way, you are going to pay.

    • 0 avatar
      redav

      Considering in my part of the country, solar PV can be installed to produce power at < $0.15/kWh (and good for ~30 yr), I'm just going to claim that grid power won't exceed that, which means it won't go above 1.5x current rates.

  • avatar
    CJinSD

    When enough people have electric cars, we’ll have long since run out of other people’s money to pay for them. The increased cost of electric cars will more than offset any savings on fuel, provided we don’t also have to pay full nut for renewable energy at that point, meaning the price of gas will have seemed insignificant.

    • 0 avatar
      ezeolla

      My thoughts exactly

    • 0 avatar
      healthy skeptic

      @CJinSD

      You’re assuming that the price of EVs won’t continue to fall (mainly because of falling battery costs). Widespread adaption can help lower the price. I’m not saying it will happen for sure, but no one can say it won’t happen either.

      • 0 avatar

        I think EVs are going to remain a niche for at least the next 15-20 years. by the time they become more than that, I suspect solar electricity and wind power–the costs of which have been plummeting this decade, will be pretty cheap.

        But Oregon is already headed towards mileage charges, and I suspect that’s what we will see, unless the National Motorists Association, which not only helps people fight tickets, but lobbies against legislation that gets in the way of driving, has a several order of magnitude surge in membership.

      • 0 avatar
        CJinSD

        When battery technology improves and production costs fall, materials constraints will drive pricing.

        Entertainingly enough, Consumer Reports has had to yank their recommendation of Teslas because of their awful quality. Tesla stock fell 9% on the news.

        • 0 avatar

          The most entertaining part of the CR report is that it is being reported as breaking news. For anyone who has subscribed to TrueDelta reliability ratings, its been glaringly obvious from year 1 that the Model S has a higher than average number of unscheduled repairs. The media don’t know how to report news anymore nor do they do their own research.

          This is to be expected. Musk built a very different car using technology and techniques which are new. You don’t get reliability with radical design changes.

          The LEAF by comparison has a lower than average number of unscheduled repairs.

        • 0 avatar
          Vulpine

          “Below Average” is not “Awful”. If you’re going to say Tesla has “awful quality” then you have to include a lot of other brands as well, including Ford and Mercedes.

    • 0 avatar
      redav

      “he increased cost of electric cars will more than offset any savings on fuel”

      Let’s look at the numbers. First, compare similar cars, e.g., a Leaf to a compact hatchback. The Leaf starts under $30k, while compact hatches start under $20k. Ignoring rebates, let’s just say that the EV option adds $10k to the price of the car. That means an EV would need to save more than $10k to be practical. The eFocus is optioned like the Ti trim, and it is only ~$6k more than the starting point of the Ti hatch.

      Modern compact cars can average 30 mpg. Some are better, but it’s a nice round number. Assuming a car is kept for 150k mi and gas costs $3/gal (let’s not think current cheap gas lasts forever), that’s $15k for gasoline over the life of the car. For a Leaf, let’s say it takes ~27 kWh to fill its 24 kWh battery (due to inefficiencies) and that’s good for ~85 mi, or in other words, ~3.15 mi/kWh. At $0.13/kWh, driving 150k mi costs ~$6200, or a savings of ~$8800 compared to the ICE. (A rule of thumb has been running a car on electricity costs a third as much as gas.)

      I don’t know exactly how much less an EV costs to service/maintain, but reports of the Leaf seem to show it’s less than an ICE. Just factoring oil changes ($35 every 5k mi = $1050 over the life of the car), it’s pretty close to that $10k difference in start price, and well over the $6k difference for the eFocus.

      So, right there, we can reasonably reject claims that higher EV purchase prices necessarily offset fuel savings.

      But that’s not all. GM announced the cost of batteries (from LG) for the Bolt cost $145/kWh. Batteries ARE getting cheaper, and since that’s the biggest cost delta for EVs, they will get more affordable. At that price, a 24 kWh battery like the Leaf costs under $3500. GM also stated that by 2022, the cost should be down to $100/kWh (a Leaf-sized battery then costs $2400).

      It seems reasonable that in the next few years we will either see dramatic increases in EV range (due to affording to include more batteries), or the price premium will drop to ~$5k. At that point, it’s almost impossible to deny the financial viability of EVs.

  • avatar
    Steve_S

    So either people were putting the wrong octane in their car when it was higher (requires 91/93 and they bought 87) or they are even dumber and putting in 91/93 when their car is rated for 87.

    My last three cars have required 91/93 so that’s what I put in regardless of price per gallon. If I had a Civic I’d be running 87 whether it was $1 or $5/g.

    • 0 avatar
      MBella

      I was about to say the same thing. What’s funny is how many high end car buyers will use 87. I had a lady ask me if the new C class loaner took regular like her E class. What a facepalm moment. Premium in both. Same thing goes the other way. Why waste money, especially since you get a bit less energy density with the higher octane fuel.

      • 0 avatar
        turf3

        No, what higher octane does is to permit the use of a higher compression ratio without detonation or “ping”. Modern cars have ping sensors. If detonation is sensed, ignition timing is retarded. If you use a lower octane fuel in a car that calls for higher octane, you will lose a small amount of performance during the intermittent and relatively infrequent times when the engine would ping on the lower octane fuel and has had to retard its own timing.

        Unless you are routinely attempting to extract every possible bit of performance out of your car, you will have no ill effects from using a lower octane gas. In theory there could be a small penalty in gas mileage, but that would only occur if you were driving in such a way as to bounce off the ping sensor all the time (lots of hill climbing under full throttle at extreme high ambient temps) and in that case with that kind of a driving profile you are driving inefficiently anyway.

        On my sample size of one, I tested this by switching from recommended 91 to cheaper 88 and found no difference in mileage (I record miles traveled and fuel amount with each refill, and I did a statistical comparison of premium vs. standard for two one-year periods that covered the same months (for example, August 2010-July 2011 vs. Aug. 2011-July 2012 – I’m not sure those were the exact months, but you get the idea).

        None of the above would apply if you are talking about really low quality gas like you might get in the third world, with octane ratings in the 60s or such. I am talking about recently built cars with American gas.

        • 0 avatar
          bludragon

          What car?

          As far as I am aware, only relativity few newer cars can run safely and take advantage of both octane ratings. More typically, you just run the octane the car is rated for, and there is little to no benefit to doing anything else, and some risk of increased wear, or even damage if you use a lower than specified grade.

          On a 2008 Civic Si, even on the rated premium (91 CA grade) it will regularly retard timing due to detected knock in the mid rpm range (2700-3500). I’ve never tried a lower octane.

          • 0 avatar
            Nick Engineer

            @bludragon

            Turf3 is spot on actually. All cars that specify premium will “take advantage of” (whatever that means) regular as well. They most certainly have knock sensors (at least two) to detect pinging and pull back timing. There is no risk of any damage unless you are always driving on a very steep incline or otherwise lugging the engine (and that is much easier to do on a manual transmission). But if you drive like that anyway, its not like premium will help you much either. You’d still need the knock sensors.

            You will loose some pep with the lower octane on a high compression engine. Cost-wise the diff for a 15 gal fillup is about $2.

            Pinging is not a function of rpm, but rather of engine load.

      • 0 avatar
        Vulpine

        “Why waste money, especially since you get a bit less energy density with the higher octane fuel.”

        Why indeed? Let’s just ignore the fact that I get better fuel mileage when I run higher octane. Let’s ignore the fact that the engine itself performs better when I run higher octane. Yes, all three of my vehicles claim they can USE 87 octane, but two of the three specifically recommend 89 or better while the third (the oldest) clearly runs better all around on 89 vs 87 octane since I picked it up.

        Sure, that 89 or 91 or 93 octane cost more and certainly the improvement in fuel economy doesn’t balance the higher price, but all three vehicles are better able to get out of their own way (not even considering getting out of somebody else’s way) and can go farther between fuel stops.

        • 0 avatar

          The idea that higher octane fuel gets better mileage is a truism.

          Sometimes it does, sometimes it doesn’t.

          Higher octane is typically beneficial when an engine is under load (towing a load) or if it is turbocharged. In most other scenarios putting higher octane than recommended is just a waste of money.

          https://www.fueleconomy.gov/feg/octane.shtml

  • avatar
    shipping96

    I remember when gasoline was used as an example of in-elastic demand in economics class, people purchased the same amount regardless of cost. This study, and the last years (2007 onwards) of wild price gyrations seem to have proven this example incorrect.

    I think that electricity, even if rates went up significantly, will be a small percentage of what drivers spend on gasoline. But the car payments will likely be higher, offsetting the savings.

  • avatar
    Syke

    What will I spend the money on? In the short run, nothing, as I’ll be banking it. In the long run, who knows, but having that money in savings will be appreciated at that time.

    I’m already dealing with that kind of experience, having garaged by xB in favor of a Yamaha Zuma 125 scooter for the daily commute. 80mpg has its advantages. I’ve watched my monthly fuel expenses drop from a $180-200.00/month average to about $65-80.00/month. Just because we had our first freezing morning yesterday doesn’t mean I’m going back to the car. I’ve got a good set of winter riding gear which will cover me thru just about everything other than precipitation in below freezing temperatures.

    Not that that’s stopped me in the past.

  • avatar
    WhiskeyRiver

    Were gas to remain at the $2 level we enjoy today, I don’t think there’s any up side to electric. It’s the dirtiest energy you can conceive of to move a vehicle. Its expensive for the consumer. And, most importantly for the feds, it pours nothing at all into federal coffers for highway administration.

    Once the country moves to a pay-by-the-mile highway tax these cars will not be a very attractive alternative. The extra gas money in your pocket will already be spent.

    I would add this as a closing thought: When the feds switch from credits to taxes, as they will necessarily have to do, these electric cars are going to make gasoline powered cars – even at $4 a gallon – seem like a bargain. Nothing makes anything more expensive than government oversite.

    • 0 avatar
      redav

      “It’s the dirtiest energy you can conceive of to move a vehicle.”

      An EV powered by a modern coal plant is cleaner than a VW diesel affected by the recent scam. And not all electricity comes from coal. (It’s a rapidly shrinking share, actually.) With an increasing share of electricity coming from renewables and coal switching to natural gas, your claim doesn’t hold water.

  • avatar
    night driver

    There are parts of the country, such as the northeast, where it costs roughly the same amount of money (at around 20 cents per kilowatt hour after fees and taxes) to charge up, say, a plug-in Prius as it does to fill it with $1.99/gallon gas…

    • 0 avatar
      Vulpine

      No, it doesn’t. Even at your extreme, the Prius would only take about $1.00 to fully charge, what you’re paying for a single gallon of gasoline. That plug-in Prius only goes about 7-10 miles on that charge.

      Ok, I do agree it SOUNDS bad, but then you have to look at what a full tank of gasoline costs for that Prius and remember that the Prius averages about 40mpg–about half the mpg eqivalent of a Tesla Model S which is a bigger, heavier, more comfortable car with much higher performance capability than the Prius, too. That Model S, at the electricity rates you describe, goes almost 300 miles on $14 worth of electricity. Can that Prius do the same? Yes. But the Prius is the exception, not the rule, and ignores that the engine still needs regular maintenance and has other ongoing costs related to that engine that have no equivalent in a BEV.

  • avatar
    Richard Chen

    More time at CHAdeMO stations?

    CR just posted their updated reliability ratings and the Tesla Model S is now ranked as below average, thus no longer recommended. But what’s this about the exhaust system? Are we talking about the little vents for the battery?

  • avatar

    Meth

  • avatar
    stryker1

    If we on average save $1000 a year on what should be considered a subsistence expense, then expect average wages to fall roughly that amount, as the baseline minimum required to sustain (transport) a laborer translates into people who are seeking employment being willing to work for that much less, since they are now able to.

    • 0 avatar
      healthy skeptic

      That’s one way of looking at it. The other is that people (including businesses) will be able to do the same amount of work for less cost, thus raising productivity. Increased productivity translates to real gains in wages.

      • 0 avatar
        stryker1

        I was with you until that last part.
        How does increased productivity translate into increased wages?

        • 0 avatar
          WhiskeyRiver

          I hope skeptic is playing devil’s advocate. Once the government starts taxing electric cars we’re all going to suffer. Who pays the lion’s share of all taxes? Business.

          For We The People, when it all washes out, we’ll be adding that $1000 savings to that $2500 annual savings we’re getting with the Affordable Care Act.

          That is to say we haven’t a clue yet how expensive these things are going to be to operate long term.

          I can guess though. I’m studying my latest healthcare options…

  • avatar
    eggsalad

    As battery-car adoption goes up, states will have to raise registration fees (or something else) to make up for the lost income of gasoline taxes.

    At least in my mind, as of right now EV drivers are “stealing” the roads they drive on. In all 5 states I’ve lived in, part of the taxes on gasoline are used for road maintenance/repair. Since EV drivers aren’t paying gasoline taxes, they are effectively using the roads at no cost to them. That can’t last.

    • 0 avatar
      healthy skeptic

      That’s a fair point, but taxes (or lack thereof) don’t account for the full disparity in price.

    • 0 avatar
      brandloyalty

      People who drive gas-powered cars are stealing the health of the biosphere. This is being reflected first in health costs and infrastructure damage. The “theft” by ev owners is probably a miniscule fraction of the “theft” by the oil/ICE industry. You probably also believe in myths about how roads actually are paid for.

      • 0 avatar
        WhiskeyRiver

        HAHAHAHAHA

        Electricity is dirty. Using more of it is… dirtier. Nobody has done any serious study (non-government funded which serves their point when they do it) that says otherwise.

        • 0 avatar
          healthy skeptic

          And gas…dirtier still.

          • 0 avatar
            slavuta

            Modern ICQ produces CO2, which is harmless greenhouse-effect gas. Power plants are not as nice to the environment. Gas is not going anywhere, anywhere soon. We will not be able to produce enough electricity to charge all cars for long, long time.

          • 0 avatar
            WhiskeyRiver

            slavuta makes the best point yet. We don’t have the capacity to charge the cars if everyone buys one.

          • 0 avatar
            redav

            We have plenty of capacity with time shifting. It’s peak capacity that would be a problem. Peaks typically occur in the afternoon with industrial & air conditioning consumption. Residential consumption typically peaks in the early evening.

            If car charging is done overnight, which is likely, then peak is not a problem and the grid will not be overtaxed. Actually, charging at night can make the entire grid more efficient as it makes the base load more consistent which means less marginal power has to be started/stopped.

            But let’s stop assuming that if EVs catch on, then every car will be an EV. We will see greater specialization and optimization of fuel to the intended purpose of the vehicle.

        • 0 avatar
          Vulpine

          “Electricity is dirty. Using more of it is… dirtier. Nobody has done any serious study (non-government funded which serves their point when they do it) that says otherwise.”

          Statement is completely false, WR; both parts of it. With a very simple web search I found dozens of non-government-sponsored studies of which http://www.environment.ucla.edu/media/files/BatteryElectricVehicleLCA2012-rh-ptd.pdf is the top link. I have two others but I don’t know how well the website likes multiple links in a commentary. It crashed me out when I tried to post all three in response to this statement.

          The second link: http://www.greentechmedia.com/articles/read/smokestack-vs.-tailpipe-how-clean-are-electric-vehicles

          And the third link: http://blog.ucsusa.org/how-do-electric-cars-compare-with-gas-cars-656

          Make of them what you will. But at least two of these show your first statement incorrect while all three prove your second statement incorrect.

  • avatar
    heavy handle

    It makes perfect sense when you look at the flip side: when gas prices go up, people tend to drive less and (sometimes) switch to a lower grade.

    What will we do with the money we save? Spend it somewhere else. That’s how prosperity works. Running a car today costs a lot less, proportionally, than it did 50 years ago. Americans tend to have bigger houses now, more electronics, travel more, eat-out more, and buy more stuff. People used to own one sofa and one TV.

  • avatar
    zerofoo

    A better question:

    What will Governments do to replace the lost gas taxes?

    Hint: Government will not shrink down to compensate.

  • avatar
    PeterKK

    Well judging by the price of EVs you’ll be paying for your higher car bill. ;p

  • avatar
    Zykotec

    I can not see where it says that people didn’t drive more when gas was cheaper?
    Not to mention,et their car idle longer, or accelerate harder and generally forget about hypermiling (not sure if the hypermilers make up enough people to affect the statistic though)

    • 0 avatar
      heavy handle

      Hypermilers are statistically insignificant, but I notice a lot more pickups crowding the fast lane when gas is cheap, and driving slowly in the right lane when it’s not.

  • avatar
    brandloyalty

    This site being called “The Truth about Cars”, it’s well past time for uninformed participants to stop claiming that drivers are gouged by government. Study after study, easily found on the Internet, prove that non-drivers heavily subsidize drivers.

    For example,
    In the US:
    http://usa.streetsblog.org/2013/01/23/drivers-cover-just-51-percent-of-u-s-road-spending/

    In Canada:
    http://www.transportfutures.ca/news/motorists-are-subsidized-25-billion-year

  • avatar
    Master Baiter

    “When We’re All Driving Electric Cars, What Will We Be Spending Gas Money On?”

    Virtual reality porn and sex robots.

  • avatar
    slavuta

    1. It ain’t happening.

    2. If it does… we’ll spend money for doctors bills to diagnose all sorts of problems caused by coal power plants

    • 0 avatar
      FormerFF

      The percent of US electricity produced by coal is decreasing, both in relative and absolute terms.

      • 0 avatar
        slavuta

        It doesn’t matter. Unless we build many nuclear power plants, power lines, etc., we are not talking electric cars for the next 100 years. There is simply no electric infrastructure either to produce, transport or deliver electricity to cars. And here is the new you may not know – nobody even started to implement it.

        • 0 avatar

          100 years eh? That’s a long time.

          Air Conditioning became popular in the late 1940’s after WWII and was pretty much universal by the 80’s. Air Conditioners use more electricity than an EV. So somehow the US managed to adopt air conditioning in 30-40 years each using more electricity than an EV does and it worked.

          The funny thing is if demand goes up utilities add capacity with the extra revenue. It pays for itself.

          • 0 avatar
            mcs

            Not only air conditioning, but electric ranges use more power than EVs. Electric dryers and hot water heaters consume about two thirds the power of an EV. I eliminated an instant hot water tap and it alone dropped the electric bill by the same amount the Leaf added.

            I’ve also done a complete LED lighting conversion and replaced a conventional furnace and room air conditioners with a cold climate heat pump. I’m getting more efficient appliances as well. I should end up consuming less power before the Leaf arrived.

          • 0 avatar

            @MCS

            I have gone through a similar energy conservation at the house with more efficient HVAC, TV’s, Energy Efficient WIndows, LED lights.

            Thanks to the conservation measures I use less electricity on a daily basis than I did in 2007 and that *includes* charging the LEAF which does 18,000 miles/yr.

            If you do your conservation right, it will more than offset the LEAF.

          • 0 avatar
            beastpilot

            You removed an instant hot water heater and it dropped your use that much? I added one to save energy…

            The math doesn’t work. A Leaf uses about 20kWh per 100 miles. Drive 12,000 miles a year and that’s 2.4MWH. Over a full year, that’s 110W continuous.

            However, instant hot water heaters draw 30W or less. Yes, they draw 1,500W when active, but they run a very low duty cycle. Put them on a timer so they don’t run at night and you’re down to 20W, or 1/6th what you claim.

            Alternately, you drive the car 2,000 miles a year.

          • 0 avatar
            slavuta

            What you guys missing is, it takes few minutes to charge a car with gasoline. With electric is different. Your car will be plugged for hours to get a full charge. And the grid will go down once all cars are plugged in and charging. If this was so simple as you say, we would already be on the way of creating infrastructure. But the truth about electric cars is, current electric grids can’t handle mass charges and current car batteries are far-far-far from the condition that they can be mass produced for mass usage.

          • 0 avatar

            @slavuta

            ” the grid will go down once all cars are plugged in and charging.”

            There have been several studies that have confirmed the backbone grid will be just fine. The only issue that these studies have uncovered have been referred to as the ‘cul-de-sac problem’ whereby the transformer close to ones home may need upgrading, sooner rather than later if a cul-de-sac gets a localized sudden jump in adoption of EV’s in short time frame.

            Your assertion that the grid would fail with all cars plugged in at the same time doesn’t hold water when one considers that air conditioners are running hard during heat waves, and they use a lot more electricity than an EV is capable of.

            Proposed technologies such as vehicle-to-grid could have the effect of stabilizing the grid rather than stress the grid.

            Your Pollyanna fears are unfounded. The sky won’t fall.

        • 0 avatar
          FormerFF

          There is plenty of available capacity to charge electric cars, it’s called off peak. I’m looking at my home’s hourly usage, and at any time of the year when the temperature is above 80 degrees, our peak usage is late in the afternoon, not at 2 AM when my car is charging. People seem to think that an EV draws an enormous amount of electricity, it does not. The most commonly used charging station in the US is plugged into the same circuit as would be an electric clothes dryer.

          For local use, there is no need for public charging.

          • 0 avatar

            I wonder how much current goes unused just keeping generators spinning during off-peak hours.

          • 0 avatar
            FormerFF

            That’s a good point, there are times where energy is being wasted because it’s impractical for the power plants that supply the baseline electric load to decrease output for a few hours. That’s why in some areas you can get a super cheap overnight rate.

  • avatar
    jacob_coulter

    I see it being at least 20 years before most vehicles on the road are electric, and even that’s being wildly optimistic.

    That’s a lot of time for the economy to adjust, so I don’t see anything earth shattering coming from that change. People are cutting their cable bill by the millions today and that’s probably close to what I spend a month on gas.

    It’s going to be much harder politically for governments to recapture that lost revenue if they try to go with jacking up utility rates or raising car registration fees.

    • 0 avatar
      mfennell

      Exactly this. Barring a miraculous battery advancement, EVs will be a rounding error in the overall fleet statistics for a long time.

    • 0 avatar
      Vulpine

      20 years is a fairly realistic number; 30 years even better. Either way, that’s far sooner than one opponent’s view above that it will take us 100 years or longer to adopt BEVs. I remember back in the 80s here in the US where diesel cars like the Mercedes were just making a notable enough impact that GM attempted to dieselize some of its sedans–to an abysmal result. Now–at least until this VW uproar–diesel cars are relatively common and have been for about 15 years. True, they don’t outnumber the gasoline-engine cars, but they are much more common to the point that almost nobody even notices them unless they’re “rolling coal” and making an idiot of themselves.

      That said, it’s going to take at least 15 years for BEVs to become more than a niche in the same way diesel has and probably another 15 years for the auto companies to fully adopt at least some form of alternative fuel to gasoline and diesel for the average driver. There will still be need of gasoline–or more likely diesel–for those who make their living in long-distance travel such as bus lines, transfer trucks and railroads. But if combined with batteries in a hybrid design even those could see significant cost savings while even hydrogen fuel cell, combined with batteries, could conceivably perform better than diesel at similar or even lower costs. For now, only passenger cars are using regenerative braking to help recharge the batteries. Imagine a heavy truck or train able to do the same and actually USE that recovered energy to help climb the next grade!

  • avatar
    jdmcomp

    I do think that the addition of road taxes to electricity used for autos will increase the cost significantly, with the govts taking advantage of the situation to add new taxes which have no basis now. Additionally, the green movement will dictate that of peak energy will be somewhat cheaper and peak energy will be quite high for charging cars. With out significantly more range and much faster charging electrics are still a bit off in the future. Gas will be around for awhile. Remember H Ford thought alcohol was the right fuel and O Diesel wanted peanut oil.

  • avatar
    reclusive_in_nature

    Taxes, and then… more taxes.

  • avatar
    Big Al from Oz

    I do think the US has squandered a great opportunity here.

    With oil prices so low, now would of been a good time to increase fuel taxes and funnel the money into repairing and investing in new transport infrastructure…………..so long as the money is actually spent on the needed repairs and infrastructure.

    As, for the way most spend money. I break my finances down and categorise in a relatively simple way.

    Bills, rental properties upkeep and the rest on day to day living (excluding bills), ie, food, fuel, toys, etc. If I have money left, travel.

    So, when you want to go out and do something you will realise your budget is X amount. So, you do with it what you can.

    More astute “savers” will tend to live on pre-existing salaries/wages when given a pay rise and bank/invest the rest.

    Then you have the “others” who just spend according to how much their credit cards will handle and sometimes overspend.

    It’s simple to budget, run yourself as a business and prioritise outgoings sensibly. First pay debts/rent and bills. Then fuel, then food, then toys/play.

    If you have a large enough income, saving/investments first, then follow on as above.

    Always pay cash for anything other than a home, even that car you want.

    • 0 avatar

      “With oil prices so low, now would of been a good time to increase fuel taxes”

      Why are you so keen to see taxes go up? I certainly would not refer to this as a golden opportunity. A dark opportunity maybe.

      Taxes defy the laws of physics since what goes up rarely comes down.

    • 0 avatar
      AJ

      Raise fuel taxes you ask? Feel welcome to send the government as much of YOUR paycheck as you want. But instead you ask to have your neighbor’s taxes raised? Lets see you then go around your neighborhood, knock on every door and tell them that you want them to pay more taxes. Let’s see you do that!

  • avatar
    Duaney

    Lets assume that we’re all driving electrics. Lets assume, that the environmentalists are holding control, and the EPA has succeeded to close most coal fired power plants. No new nuclear either. That leaves natural gas and renewables. I can see electricity doubling and tripling, and brown-outs. Rationing would be next. Welcome to the future!

    • 0 avatar

      Political shenanigans is the most likely scenario that would result in electricity rationing.

      I lived through the rolling power outages in the UK during the time Thatcher was in the process of breaking the backs of the unions. The Iron Lady won. I spent many an evening reading novels by candlelight. Candles went up in price much much more than electricity :-)

  • avatar
    Jezza819

    Oh I don’t know, beer and strippers maybe.

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