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August 22, 2012

When Will the Electric Car Be Affordable?

Askpatty-nissanleafDespite the leaps and bounds the technology is making, there is no shortage of “when will ...?” questions directed towards designers of the Electric car. “When will I be able to charge it outside of major cities?”, “When will I be able to charge it quickly?”, even “when will it be fashionable to drive one?” By far the biggest of all of these questions, and the one most regularly asked is the one this post aims to answer. When will the Electric Car be affordable?


2012 – The Year of the Affordable Electric Car?

The answer, allegedly, is by the end of the year. The Renault Zoe will be released before the end of 2012 in the UK with a £13,650 price tag. That’s approximately US$21,000, and similarly priced to most mid-ranged city (subcompact) cars – definitely affordable. Meanwhile, Renault’s entry-level luxury car, the Fluence Z.E. is already slated for release in Autumn 2012 in the UK, though again, there is no word on whether it will come to the United States in any form. It will cost just £17,495 (US$28,000).

With the UK’s most popular electric car to date being the Nissan Leaf, sold at around £10,000 more, these prices seem a massive breakthrough in affordability. But naturally, this piece is sliding towards a catch. For starters, why all this talk of the UK market? Well, the prices are inclusive of a 25% / £5,000 maximum UK government grant. Take that away (and there’s no suggestion when the UK government will), and the prices become less impressive, though still palatable. Many markets have these grants, but they do vary and in many places in the United States, the car would still struggle to be called ‘affordable’.

The second catch is potentially far more divisive: Renault is able to knock thousands off the price of its upcoming cars by retaining ownership of part of them. Both the Zoe and Fluence uphold an old electronic cliché: the batteries aren’t included. Because batteries cost somewhere between $12,000 and $15,000, Renault’s solution is to lease batteries to those purchasing its cars, at around $120 per month.

The Battery Problem

Given these hidden expenses, we haven’t quite reached electric affordability yet, especially if the ability to own an Electric Vehicle outright is the ultimate objective of most consumers (and it wouldn’t be unreasonable to assume that it is for the majority of drivers). Where does this leave us and our question of when these cars will become truly affordable? Not uncommonly for emerging technology, the way forward will either be via the economy of scale (increased profits and lower production costs as more of us invest) or through advances in technology.

In the former case, the battery problem seems like one that will churn on for quite some time – uptake of electric vehicles will remain slow because vehicles are unaffordable, and vehicles are unaffordable because uptake is slow. If the petrol situation were to worsen suddenly and dramatically (a scenario that is not completely far-fetched), perhaps more consumers would be contented with a $30,000 entry level EV. In this version of events, the Electric car will be “affordable” the moment it’s necessary for survival – but plenty of families would be in crisis in such a situation.

Meanwhile, the potential for research to bring smaller, more efficient and ultimately cheaper batteries to market is definitely an area of considerable scientific excitement. Advances in portable batteries in the last twenty and even ten years have been impressive, even if we’ve all had a good moan at the “drained within a day” antics of smartphone usage. That today’s Lithium-ion batteries have kept pace at all with what we demand our phones to do is more impressive than we care to admit.

Dodging the Question?

But the path to better batteries is a long one. Lithium batteries were first proposed in the 1970s, and the first commercial battery was available only by 1991. Even with the full weight of electronic science now behind battery research, innovations like the Lithium-air battery (link) paintable Lithium-ion and fast-charging Nickel-Iron (link) may be at least a decade off.

Putting a timescale on technological advance is usually rather foolish, but that hasn’t stopped trade bodies and other authorities taking an educated guess. U.S. Energy Secretary Steven Chu claims that $3,600 battery tech could be ‘demonstrated’ by 2015, and $1,500 by 2020 (link). Of course ‘demonstrated’ is a little different to the batteries actually being purchasable (and a large amount of the price reduction can actually be attributed to the manufacture of batteries on American soil – the materials can be very dangerous to ship).

The conclusion? The majority of consumers won’t be buying an electric car next time they visit a showroom, and honestly this writer can’t see most people currently in the market for a new car looking to electric when their next car needs replacing either. But I’m going to take a stab in the dark and say that it’ll be third time lucky for electric: in a decade (ok, perhaps just a little over), you’ll be able to seriously consider a full-electric vehicle alongside conventional options. But whether public opinion favours electric options or whether we’ve all become jaded to the technology after years of expense is another matter.

Steph Wood is a content writer at the UK-based Nationwide Vehicle Contracts, a leasing company who have already introduced electric vehicles into their fleet.


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