Results matching “price increase”

In September, we finally got our Nissan Leaf. We had signed up very early in the process, and could have had a Leaf in the spring of 2011, but we decided to put our order on hold until they offered the cold weather package. It was worth the wait!

It's now our primary vehicle and we've put just over 2,000 miles on the odometer. Here's our review of the experience so far.

The Good

Driving Experience We've been driving electric since 2008, so it's easy for us to forget how much better the driving experience is with an electric drive train. The accelerator pedal on the Leaf gives instant, smooth response: you push, it takes off. There's no waiting for a gear shift, and no slow climb to full acceleration the way you have to wait for a gas car to rev up the engine speed to maximum torque, then have to shift gears and repeat. It's just smooth, rapid acceleration all the way. I'm sadly reminded of this every time I fly somewhere and am forced to rent a clunky gas-burner.

Braking The Leaf also features regenerative braking. In a gas car, if you want to slow down you have to hit the brakes. This costs you money twice: you're throwing away the kinetic energy of the car and you're wearing out your brake pads. With regenerative braking, you use the motor as a generator to slow the car and charge the battery pack, plus you avoid wearing out the brakes. Even more than the cost savings, regenerative braking shines when going down a hill. In a gas car, you have to ride the brakes or downshift. Riding the brakes is bad as it heats up the pads and can present a safety issues on long downslopes. Downshifting, or engine braking, is better except that you have to chose one of a few gears. With regenerative braking, you can smoothly control your speed with your right foot, whether you're accelerating up to speed, or holding your speed going downhill. Friction brakes work just as on a gas car when you need to stop quickly.

Controls The Leaf has a built-in touch screen for controlling the navigation system and the audio system (AM, FM, CD, iPod/MP3 player, and the ability to subscribe to satellite radio), as well as viewing car information and setting preferences. There are tactile controls on the steering wheel for the audio system and cruise control, and tactile controls around the touchscreen so you can control the vital systems by touch without taking your eyes off the road.

Backup Camera The 2011 Leaf SL package adds a backup camera displayed on the large center console screen. With the camera, it's so much easier to back up whether it's out of a parking spot in a crowded lot, backing into a spot, or just being able to back up against an edge or wall when getting out of a tight spot. I'm now spoiled and miss this feature when driving a car that doesn't have it.

Touchless Keyless Entry The Leaf detects the keyfob wirelessly so that when you are right next to the car, you can just push a button on the handle to lock or unlock the doors or the hatch. You don't have to fumble to pull your keys out of your pocket or purse, which is incredibly handy when you have an armload of groceries. It's the same for starting the car, no fooling with a key, you just push a button and the car starts as long as the fob is inside the car with you. The car knows the location of the keyfob with enough precision that it won't let you lock the keys in the car and can warn you with a beep if you get out of the car without turning it off.

Quiet Ride It's widely reported that electric cars are quiet; some even wrongly claim they are silent. Electric cars don't have noisy internal combustion engines that have to be muffled. At low speeds they can be surprisingly quiet, although you quickly learn to recognize their unique sound even when they creep up slowly behind you. At speeds above 20 mph or so, they make the same noise as a typical gas car does, which consists mostly of tire noise.

That's the story outside the car. Inside the car, it's tricky to do a good job of insulating road noise while keeping the vehicle weight low to maximize efficiency and range. Even if you get rid of the dominant road noise, you just make it possible to hear all sorts of little sounds that you wouldn't notice in a less insulated car. This is especially difficult when there's no engine noise to mask other drivetrain noises. This is the reason for the Leaf's unusual protruding headlights: they deflect airflow around the side view mirrors to get rid of a wind noise you wouldn't even notice in a noisy gas car.

Our two other electric vehicles sound just like the Leaf from the outside, but inside the Leaf is a completely different experience, by far the quietest riding car we've ever owned. I haven't seen the data, but I suspect it's on par with heavily sound engineered luxury sedans that cost far more than the Leaf.

Cold Weather Comfort Because the Leaf uses electric power to heat the car, it doesn't have to wait for an engine to heat up before it can start blowing warm air. The cold weather package (now a standard feature on the 2012 Leaf) adds heated seats (front and rear), heated side mirrors, and a heated steering wheel. If you're driving in the cold, there's nothing more wonderfully decadent than a heated steering wheel. With the cold weather package, the heated seats and the steering wheel get warm even faster than the cabin air.

The cold weather package also adds a battery heater for really cold climates. That's not an issue in Seattle where we rarely see temperatures below 20°F, but is important in more extreme climates.

Remote Control and Monitoring Using a wireless communications system called Carwings, we can monitor the car remotely to check things like the state of charge. The system sends us a text message if we pull into the garage but forget to plug in.

We can also tell the car to pre-heat from our phones. This is something that just can't be done with a gas car sitting in your garage where running the engine would fill the garage, and possibly the house, with deadly carbon monoxide. If the car is plugged in, it uses grid power for the pre-heating, so it doesn't reduce our range. Most of the time, our driving is nowhere near any concern about range, so we use the pre-heat feature even when it uses battery power to warm the car for our return after it has been sitting in a cold parking lot.

Fuel Cost At the US average cost for electricity (11 cents per kWh), the Leaf can drive 30 to 35 miles per dollar of electricity. If gas costs $4/gallon, that's the equivalent of getting about 130 miles per gallon, not in a gutless, rattling economy box, but in a quiet, comfortable car with excellent acceleration.

If the savings in fuel cost is applied to a buyer's monthly car payment, the Leaf is an incredibly affordable car.

Convenient Fueling The Leaf is best suited for local driving, which fortunately accounts for more than 90% of the typical American's driving. If you can use the Leaf for your local driving, you'll find plugging in overnight to be far more convenient than going to a gas station. Especially if you share a car, you've no doubt experienced the rude surprise of needing to make a detour to a gas station, spend time waiting in line, and pump gas when you're already running late. The Leaf is fully charged every morning with just a few seconds of effort required to plug it in at night, about as much time as it takes to plug in a cell phone. Charge time varies with how far you've driven, anywhere from a few minutes to eight hours, but it doesn't matter at all because it happens while you're sleeping.

I know many people think charging time will be an issue, but I just laugh when I see people waiting in a 20-minute line to save a few pennies per gallon at Costco. Driving electric, I pay the equivalent of $0.99 per gallon of gasoline and fueling takes just a few seconds of my time per day. I can only imagine how long the line would be if Costco sold gas for $0.99 per gallon. I get that price and I can charge up in my garage where there's always shelter from the elements and never a wait.

The Bad

Nissan has done an amazing job with their first full production electric vehicle. It's the most comfortable car Cathy and I have ever owned. It's a wonderful car, with no competition whatsoever at any price when considering the comfort and convenience it offers plus the liberation of not being hostage to wildly fluctuating gas prices. However, Nissan got it wrong on two important aspects of driving electric. The good news is that new electric vehicle drivers will get all of the benefits mentioned previously before they notice these more subtle shortcomings.

Increasing Range Anxiety Range anxiety is the irrational fear of running out of power even when an electric car has plenty of range for your driving needs. The way the Leaf presents information about the car's state of charge causes range anxiety. The dash shows in large numbers an estimate of your remaining range. That sounds pretty reasonable, but it has to make an assumption about how you will be driving for the rest of the trip. The Leaf assumes you'll be driving the same as you have been for some unknown period of time. Unless you do all of your driving under exactly the same conditions, same steady speed and constant slope, that estimate is going to be wrong pretty much all the time since it fluctuates wildly as conditions change.

The best information we get is a 12-segment display that displays the state of charge in approximately 8% increments. The problem is you can't tell where you are in the bar. Suppose I drive from work to the grocery store and the gauge drops from 8 bars to 6 bars. That could be from the top of bar 8 to the bottom of bar 6 (almost three bars, or 24%) or from the bottom of bar 8 to the top of bar 6 (just over one bar, or 8%). That's a big difference.

While the estimated range can be useful in some circumstances, Nissan should give us a way to display the car's state of charge as a percentage. I understand that there is some inherent uncertainty in computing the precise amount of energy remaining, but the raw state of charge should be presented to the driver with the same precision as the estimated miles. Having this information would help drivers better understand their energy use and increase the Leaf's usable range. This is such an important piece of information that owners have figured out a way to display the state of charge by tapping into the Leaf's on-board diagnostic port.

Denying the Best Feature of Electric Driving The regenerative braking offered by an electric car dramatically improves the driving experience. Once you get feel of driving electric, it's a joy be able to control your speed with just one pedal: push down to speed up, lift to slow down. Whether it's uphill or downhill, speeding up an on ramp or slowing down for an exit, you do it all with the accelerator pedal. It's far more natural than how it works on a gas car, it's just different from how we all learned to drive. Nissan was apparently concerned about making the Leaf feel as much like a gas car as possible so as not to scare away consumers afraid of change. To do this, they have two modes, normal and economy mode. In normal mode, there's a limited amount of regenerative braking on the the right pedal. In economy mode, there's more regenerative braking, but acceleration is dampened out. You can get the same acceleration in eco mode as normal mode, you just have to push the pedal farther down.

I want maximum regenerative braking, so I always drive in eco-mode. This makes the accelerator less responsive unless I really push it. I would much prefer a more typical pedal response with the maximum regenerative braking. It's also annoying that the drive mode doesn't persist, I have to put it into eco-mode every time I start driving.

Conclusion

Nissan clearly leveraged what they learned from making the world's first factory-made lithium-ion electric car over ten years ago* to create an incredible first generation production electric vehicle.

The comfort features of the Leaf make it worth the sticker price, even if it had a gas drive train. With efficiency that can't be matched by an internal combustion engine and fueled with cheap domestic electricity, the savings in total cost of owning and driving the Leaf make it the uncontested winner in value for its class of comfort and driving experience, in many ways superior to all gas-powered cars at any price. Add in the environmental benefits and the satisfaction of knowing your fuel dollars stay in the US instead of pouring into the global oil market that threatens our national security as well as our economy, and no other car on the market offers the value of the Nissan Leaf.

If you're in the market for a new car, and typically drive under 60 miles per day, and already own a gas car that you can use for those few longer trips, you owe it to yourself to test drive a Nissan Leaf before investing in another gas car.

* The all-electric Nissan Altra built to satisfy California's short-lived zero-emissions mandate from 1997 to 2003.

Cathy and I were invited to show our Tesla Roadster in the Eco-Center at the 2011 Portland International Auto Show. Tesla Motors didn't have the resources to participate, so we and Chad Schwitters agreed to show our cars and represent Plug In America in promoting electric vehicles.

The following email was sent to Tesla Motors customers on Tuesday, January 20th.

From: Elon Musk, Tesla Motors
To: Tesla Roadster Customers
Date: Tue, 20 Jan 2009 12:45 pm PST
Subject: The Importance of Options

A much fuller account of the history of Tesla is worth telling at some point, but for now I will just talk about the essentials of why we needed to raise prices on options.  Fundamentally, it boils down to taking the tough steps that are difficult but necessary for Tesla to be a healthy company and not fall prey to the recession.

When the initial base price, for cars after the Signature 100 series, of $92k was approved by the board a few years ago, it was based on an estimated vehicle cost of roughly $65k provided by management at the time.  This turned out to be wrong by a very large margin.

An audit by one of the Series D investors in the summer of 2007 found that the true cost was closer to $140k, which was obviously an extremely alarming discovery and ultimately led to a near complete change in the makeup of the senior management team.  Over the past 18 months, observers will note that Tesla has transformed from having a senior team with very little automotive experience to one with deep automotive bench strength.  We now have executives with world class track records running everything from design to engineering to production to finance.

To bring the cost of the car down, we have reengineered the entire drivetrain, which is now at version 1.5 and will be at version 2 by June.  The body supplier was also switched out from a little company that was charging us nutty money and had a max production of three per week to Sotira, who supplies high paint quality body panels to Lotus, Aston Martin and others.  In the process, we had to pay several million dollars for a whole new set of body tooling, as the old tooling had been made incorrectly.  The old HVAC system was unreliable and cost almost as much as a new compact car, so also had to be replaced.  The wiring harness, seats, navigation system and instrument panel also had to be modified or replaced.

After reengineering and retooling virtually the entire Roadster and completely restructuring our supply chain, we are now finally coming to the point where the variable cost of the car (to be clear, this excludes fixed cost allocation) is between $90k to $100k.  With a lot of additional effort by the Tesla team and the help of our suppliers, we should be at or below $80k by this summer.  There is some variability here due to exchange rate shifts.  Although we gain an automatic currency hedge by selling in both Europe and the US, we are still vulnerable to the Yen, which is very strong right now.

Obviously, this still creates a serious problem for Tesla in the first half of 2009, given the $92k to $98k price of most cars delivered over this time period.  The board and I did not want to do a retroactive increase of the base vehicle price, as that would create an unavoidable hardship for customers.  Instead, apart from a $1k destination charge increase to match our true cost of logistics, we only raised the price of the optional elements and provided new options and a new model (Roadster Sport) to help improve the average margin per car.

The plan as currently projected, and which I believe is now realistic, shows a high likelihood of reaching profitability on the Roadster business this summer.  By that time, we will be delivering cars that have a base price of $109k plus about $20k or so of options (having worked our way through the $92k to $98k early buyers) at a rate of 30 per week.  We are fortunately in the position, rare among carmakers, of not having to worry too much about meeting 2009 sales targets, as we are already sold out through October and have barely touched the European market.

My paramount duty is to ensure that we get from here to there without needing to raise more money in this capital scarce environment, even if things don't go as well as expected.  I firmly believe that the plan above will achieve that goal and that it strikes a reasonable compromise between being fair to early customers and ensuring the viability of Tesla, which is obviously in the best interests of all customers. It's also important to note that the price increases will affect 400 customers, all of whom will take delivery after Jan. 1 and receive a $7,500 federal tax credit. We made the pricing changes to ensure the viability of Tesla in the long term, regardless of government incentives, but we hope the credit will offset the increase for most customers.
 
There is one additional point that relates to the government loans that Tesla is seeking for the Model S program, a much more affordable sedan that we are trying to bring to market as soon as possible.   A key requirement is that any company applying be able to show that it is viable without the loans.  If we allow ourselves to lose money on the cars we are shipping today, we place those loans at risk.  Mass market electric cars have been my goal from the beginning of Tesla.  I don't want and I don't think the vast majority of Tesla customers want us to do anything to jeopardize that objective.

Elon Musk
CEO & Product Architect

Here is the new pricing table updated with the information in the letter sent to Tesla Roadster owners on January 16th. This is an unofficial compilation for comparison purposes, based on my understanding and interpretation of the old and new packages, options and prices. Please post any corrections in the comments.

The email describing the new options and pricing did not detail the cut-off between the old pricing and new pricing, but I believe the new pricing applies to all 2008 model year Roadsters which had not already entered production. I will update as details become available.

Note that there are significant changes from the options communicated to owners nearing production earlier in the week.

The following options were previously available and are now available at adjusted prices and in different bundles:

	Original ($)	Current ($)
SolarPlus Windshield	(included)	400
High Power Connector	(included)	3,000
Forged Alloy Tesla Wheels	(included)	2,300
Painted Hardtop	3,200	3,200
Metallic Paint	500	1,000
Premium Paint	1,000	2,000
Paint Armor	approx 1,400	1,495
Premium Interior	1,800	1,800
Floor Mats	125	150
Mobile Connector (120V/15A & 240V/40A)	350	N/A
Mobile Connector (120V/15A)	N/A	(included)
Mobile Connector (120V/15A) Additional	N/A	600
Mobile Connector (240V/30A)	N/A	1,500
Upgraded Stereo Head Unit with Navigation System	1,200	N/A
Bluetooth	100	N/A
Sat Radio	400	N/A
Premium Speakers	800	N/A
Homelink door opener	(included)	N/A
Electronics Group (includes above 5 items)	N/A	3,000
Destination Charge	950	1,950

The apparent change in the 240V mobile charger from 40A to 30A may be to satisfy regulatory requirements. I will update this when I find out more from Tesla.

These are new options not previously available:

	Price ($)
Executive Leather Interior	6,000
Premium Carbon Fiber and Leather Interior	9,000
Clear Carbon Fiber Hardtop	5,000
Clear Carbon Fiber Accent Group	9,000
Performance Tires	850
Custom Tuned Adjustable Suspension	4,000
Battery Replacement	12,000
Extended Warranty (2yr/24,000 miles, excludes battery)	5,000

At this time, we don't know what the performance tires are or how they compare to the current and previous standard tires. I will update when we learn more.

Price Increase

The price increase for owners who had previously locked in their options depends on which options were chosen and which previously standard options the owner is willing to give up. Here are some examples:

Increase	Scenario
$ 1,000	New base model, losing alloy wheels and SolarPlus windshield, and replacing HPC with 120V/15A mobile connector.
$ 6,700	The previous base model configuration with no options added, which includes the HPC, the SolarPlus windshield and the silver forged alloy Tesla wheels; also gets 120V/15A mobile connector.
$ 9,350	Fully loaded model from previously available options, mobile connector reduced from 240V/40A to 240V/30A.

Revision History

• Jan 17 2009 13:44 PST: revised table of examples to include original base model.
• Jan 17 2009 23:32 PST: confirmed that Homelink transmitter was standard equipment.
  

Update: Tesla Motors announced the new options and pricing to all owners on Friday, January 16th. I've posted an updated analysis.

Tesla Motors is in the process of rolling out price increases to their customers who have pre-ordered a 2008 model year Roadster which has not yet entered production. Customers whose cars are about to enter production, after a two-year wait and a fourteen-month delay, are right now getting phone calls in which they are told they have to accept this price increase and re-select options before their car can go into production. This price increase applies to all 2008 Roadster orders starting with VIN 210.

These 2008 model year customers were given a base price of $92,000 and required to make a substantial deposit at a small start-up company with no experience in producing cars. Those early deposits of $30,000 to $50,000 were used along with investment capital to fund the development and early production of the Roadster. Around the time that Tesla delivered their first production car in February of 2008, they opened orders for 2009 model year cars at an increased base price of $109,000 to reflect both increases in their cost projections and also the then-proven ability of the company to produce cars.

Customers whose cars are going into production this month were required to lock in their option selections in September. All customers with orders for 2008 model year orders, some 600 cars, were required to lock in their selections by November of last year. Tesla Motors is unlocking those selections, raising the prices, and requiring owners to reselect their options with the higher prices.

This is coming as a big surprise to owners being informed of this given that they locked in their options and price months ago. A casual reading of our contract sure makes it sound like once we locked in our choices we were committed to buying the Roadster with those options, and Tesla Motors was committed to delivering that package for the price we agreed to.

Here is the table of original and current options and prices as provided by Tesla Motors on January 14th, 2009.

	Original Price	Current Price
Base Vehicle	$92,000	$92,000
SolarPlus Windshield	(included)	$400
High Power Connector	(included)	$3,000
Mobile Connector	$350	(included)*
Hardtop	$3,200	$3,200
Metallic Paint	$500	$1,000
Premium Paint	$1,000	$2,000
Premium Interior	$1,800	$1,800
Floor Mats	$125	$150
Navigation System	$1,200	N/A (see stereo bundle)
Bluetooth	$100	N/A (see stereo bundle)
Sat Radio	$400	N/A (see stereo bundle)
Premium Speakers	$800	N/A (see stereo bundle)
Stereo Bundle	N/A	$3,000
Destination Charge	$950	$1,950
New Options
Performance Tires	N/A	$1,150

The most obvious price increases are from the unbundling of the high power connector (HPC) and a $1,000 increase in the destination charge. The HPC connects the Roadster to home power for rapid charging. Previously, the HPC was included in the price of the Roadster for early orders. (Tesla had previously unbundled the HPC for 2009 model year orders.)

A second big change is the removal of à la carte audio upgrades. Previously, owners could choose to separately upgrade the speaker system and head unit (including a navigation system). With the upgraded head unit, owners could choose to add support for Sirius satellite radio and/or Bluetooth mobile phone integration. Now all of these items are available only as a single bundle for $3,000, which is $500 more than the total system cost originally. The option of spending just $800 for the built-in premium speaker system is no longer available, a disappointment to owners who wanted the factory speaker look with an aftermarket head unit.

There's also a subtle change in the mobile connector. Previously, owners were able to order a mobile connector for charging away from home. The promised mobile connector was to be compatible with both 120-volt and 240-volt connections using a variety of outlet adapters. Tesla later discovered regulatory hurdles to selling a 240-volt connector, so now owners have only a 120V/15A connector that takes about 37 hours to charge a fully depleted battery pack. Said another way, the mobile connector charges at a rate of about 6 miles of added range per hour of charging. Tesla is now including that 120V low-power mobile connector at no charge, with no timeframe or cost estimate for the 240V/40A mobile connector.

According to Doreen Allen, Tesla Motor's reasoning for the price increases is that they are working hard to get to being profitable on each Roadster delivered, and that the federal tax credit of $7,500 which became effective on January 1, 2009, means that the net effective price of the Roadster decreased at the beginning of this year. Additionally, the à la carte audio options were creating too much complexity in production and had to be consolidated to be sustainable.

This owner finds it particularly galling that he and his wife got the message from Tesla that our car is being held from starting production until we agree to these sudden, retroactive price increases on the same day that Tesla Motors published a blog Tax Incentives: Why the Roadster costs less than its sticker price.

On a personal note, we complained a lot, but in the end picked a set of options and agreed to pay the price increase because we want Tesla to be successful and we want our car as soon as possible. It didn't seem worth it to spend a week complaining and arguing about it, not when our car was ready to go into production.

Gas/Electric Hybrid Vehicles

About ten years ago, the Toyota Prius and Honda Insight entered the US car market and have grown to change the way we think about automobiles, the environment, and energy efficiency. Starting slowly at first, sales of the Prius took off and now they are one of the most popular models sold in the US.

These hybrids are simple to understand: they run on gasoline just like every other car on the road, but they have a battery pack and electric motor that makes them more efficient: they get very good gas mileage.

But it's an odd design to meld two drivetrains into a single vehicle. Why is it more efficient to make a gasoline engine push around an electric motor and battery pack, and also make an electric drive push around the gas engine and fuel tank? It's not clear to me that it is that efficient. If you look at the top fuel efficient 2009 vehicles according to the EPA, you'll see that the top vehicles are hybrids, but their advantage is mostly in city driving. The diesel Jetta is just 10% less efficient than the Prius on the highway. In Europe, there are even more efficient diesel vehicles.

Hybrids work well for city driving because they use regenerative braking to capture some of the energy that is normally just dumped into wearing out your brakes when you slow down for a stop light. Even though only a portion of that wasted energy gets stored in the battery pack, it's enough of an improvement to make the double-drivetrain vehicle more efficient.

Hybrids are able to offset some of the weight of the electric drive by using a smaller gas engine. The electric drive can help push the vehicle up a hill, and get some of that charge back on the down slope.

Gasoline engines are only about 25% to 30% efficient. That is, only about 25% of the energy contained in a gallon of gas makes it to the wheels to propel the car. The rest of that energy is wasted as heat and mechanical inefficiency. A good part of that gets wasted in the transmission because a gas engine only produces high power/torque in a narrow band of RPMs, so multiple gears are required for good acceleration at a wide range of speeds.

An electric drivetrain can be over 80% efficient. There's no heat wasted in exhaust and no reciprocating pistons. Also, an electric motor can deliver high torque and power over a very broad RPM range, so there's no need for a transmission and thus no mechanical losses there. That's how adding the weight of a second drivetrain that is just fed with a fraction of the kinetic energy normally wasted by braking can improve the efficiency of a gas engine in city driving.

Plug-in Hybrid Electric Vehicles

If that little bit of saved energy can be used to create a more efficient vehicle, wouldn't it be even better to use some grid electricity to further increase vehicle efficiency? Power plants generate electricity more efficiently and cheaply than using a gas engine to generate electricity indirectly through regenerative braking. So, maybe we should further augment a hybrid's power with grid electricity.

That's a promising idea, and is the basis of plug-in hybrid electric vehicles, or PHEVs. There are actually two PHEVs that are generating a lot of buzz now: the Hymotion Prius upgrade and the Chevy Volt.

Hymotion created an after-market upgrade that turns a standard Toyota Prius into a PHEV by giving it an additional battery pack that can be charged from an ordinary outlet.

The Chevy Volt has an even more innovative design: it has a pure electric drive, only the electric motor is connected directly to the drivetrain. It also has a small, gasoline-powered generator that is only used to recharge the battery pack. Because the gas engine is only used as a generator, it can run at its most efficient power level and avoid the gross inefficiencies associated with a car's engine that has to run a wide variety of RPMs and load levels outside its most efficient power range.

Lying about Efficiency

The PHEV is a surprisingly more complicated solution in part because we have no way to talk about the efficiency of this type of vehicle. We're used to evaluating vehicle efficiency by looking at miles per gallon. That works great with a hybrid, because the only energy input is gasoline, but what about a PHEV? The easy thing is to just quote an MPG number and move on, but that doesn't tell you anything.

Consider a different case. Suppose I invent a new kind of hybrid vehicle: gas and propane. It has two engines, a conventional gasoline engine and a propane engine. Together, they power the vehicle's drivetrain. When I take my new model into the EPA to get its fuel efficiency rating, I fill up both tanks. The EPA drives the vehicle on their standard course and find that the car traveled 200 miles and used two gallons of gas, so it gets an EPA rating of 100 mpg.

But what about the propane? How much propane did the car use up? How much does that propane cost? How does the use of propane and gas change with different driving conditions? We already have city and highway numbers, but maybe this new hybrid is even more complicated. How does the hybrid bit work, does it burn propane until it runs out, then switches to gasoline, or does it burn both equally over the entire range? How are consumers going to evaluate what it will cost them to drive this vehicle on their daily commute. How will environmentally-minded consumers evaluate its overall energy efficiency and carbon footprint?

Obviously, was can't just quote an MPG number for a hybrid vehicle that takes in two different fuel/energy sources. That would be misleading. In fact, unless the MPG number works in all driving scenarios, it would be fraudulent.

The same issue applies with PHEVs. If we just get an MPG number, that tells us nothing useful unless we understand how the trade-off between gas and electricity works under our individual typical driving conditions.

The Volt and the EPA

Consumers will want some sort of fuel efficiency number and consumers understand MPG, so GM talked to the EPA and argued that the EPA should use a testing regimen that will give the Chevy Volt a rating of over 100 MPG. The problem is that if the EPA allows the Volt to use the battery pack without accounting for the extra energy input, it gets over 100 MPG, but only about 48 MPG if they don't allow it to deplete the battery pack. The truth perhaps lies between these two numbers and depends on an individual's driving profile.

It's really important that the conversation doesn't stop with this one deceptive measure of fuel economy. The Chevy Volt can go 40 miles on just electricity. That's great if my daily commute is under 40 miles (and that's true for 78% of personal travel in the US according to a 2003 Department of Transportation study), but if I go over that, is it the same as driving a Prius? Unlike the Prius, the onboard engine isn't powerful enough to power the car, it can only add charge to the battery pack. If you just keep driving, eventually the battery pack will run out, and simply filling up the gas tank doesn't refill the source of power that drives the wheels. So, how far can you go? The answer is going to be complex since the gap between what the car pulls from the battery pack and what the generator puts in depends on the speed you're driving. That's not an issue with the Prius, but it's something potential Volt buyers need to understand.

The same issues apply to any PHEV that uses a small gas engine only as a battery-charging generator.

The Hidden Cost

Not only does MPG not tell us enough about how much gas the car uses, while also skipping over the cost of electricity,* it completely hides the cost of the huge compromise built into a PHEV.

The very best battery technology available today is called lithium-ion. This battery chemistry has the best balance of cost and energy density. For a given weight in batteries, lithium will allow you to store the most charge at a reasonable cost. And the cost isn't cheap, either. Lithium ion batteries are more expensive than lead-acid (like your regular car or boat battery) or the nickel metal hybrid batteries used in hybrids like the Prius.

None of these battery chemistries used in vehicles like to be overcharged or fully discharged. If you've ever left your lights on overnight and not only drained your battery, but also ruined it, you know what I'm talking about. With an electric vehicle, there's a computer that monitors battery charge state and keeps you from damaging the batteries, so you don't have to worry about it, but it does have performance implications that prospective buyers need to know about.

Consider a pure electric vehicle like the Tesla Roadster. It has a large pack of lithium ion batteries, big enough to support an EPA verified range of 244 miles (mixed city and highway). Since most commutes are far less than this, 78% under 40 miles and 92% under 70 miles, this means most driving in the Roadster will only need to use the middle of the charge range: it doesn't need to be fully charged nor fully discharged to handle daily driving. This is the best way to ensure maximum battery life. If a Tesla driver frequently uses the entire maximum range of the battery pack, the lifetime of the battery pack will be shortened. The Roadster is not your best choice as a road trip car. Fortunately, road trips represent a small fraction of travel in the US, so this isn't a problem, just something to think about when you're choosing between the Prius and the Roadster for that big road trip.

But what about a plug-in hybrid, like the Chevy Volt with a 40-mile electric range? Obviously, GM has to keep the battery weight down since the car is already packing two power plants. The Volt is designed and marketed as being pure electric for a 40-mile daily commute. If GM were to put in a battery pack that could just barely manage the forty miles, then drivers would put a full charge cycle on it every day. That would kill a lithium ion battery pack in about two years. Let's assume they want their product to last longer than that.

Since the car is designed to be gas-free for a 40-mile commute, that battery pack has to be capable of much more than just 40 miles while also bearing the burden of pushing around a gas engine, generator, fuel tank and exhaust system. So, GM decides what an appropriate charge capacity margin is, and puts in a battery pack that large.

Let's suppose they only want to use the middle 50% of the charge range, so the battery pack is only charged to 75% and only discharged down to 25% (which is about what Toyota uses in the Prius). Based on that assumption, if you drive a Volt on your 40-mile commute, you're going to use half a discharge cycle every day. You bought a battery pack that is capable of an 80-mile trip if you are willing to compromise battery life for an occasional long trip. In fact, if you could pull out all the extra weight of the gas generator, your battery pack could maybe handle a 100-mile trip. Instead, you only get the 40 miles, while still also hammering the battery pack pretty hard, and dealing with all the maintenance hassle of maintaining the gas engine.

Maybe 50% charge buffer isn't the choice that GM makes. If they pick a smaller charge buffer, the battery pack wears out sooner. If they pick a larger buffer, then they are just wasting more battery pack on a hobbled electric drive that could handle even longer occasional pure electric trips. Not matter how you slice it, trying to drive a daily commute with a small battery pack burdened by extra generator weight wastes the full electric potential of the vehicle.

Driving Pure Electric

Compare that to a pure electric vehicle with a 240-mile range. You can do your 40-mile commute with just one sixth of the battery pack's charge cycle, and you have a car that can go over a hundred miles with less impact on battery life than your daily commute in a Volt. Even a 200-mile trip is possible while leaving 20% of the charge range untouched. That's excellent battery life in a vehicle that never burns any gas and is capable of a good long drive, especially if you can get access to an outlet at your destination.

Right now there aren't many choices when it comes to driving pure electric, but that's changing. Just like when any new technology is introduced, initial models are expensive and produced in low volumes. Even the Model T was viewed as a rich man's toy when it came out. With higher production comes both better availability and lower prices. Although electric vehicles have been around longer than gas-powered vehicles, the production electric vehicle market is in its infancy, but is about to get far more interesting.

Today, you can buy a high-end, pure electric sports car with a top speed of 125 mph and an EPA-certified range of 244 miles: the Tesla Roadster, available in limited quantities for a mere $109,000. If they cost less, you probably still wouldn't be able to get one because demand would far outstrip the production rate of about 1200 per year.

But Telsa isn't in the business of solving a shortage of expensive sports cars. Their mission is to get lots of affordable electric cars on the road, the Roadster is just the start. In 2011, just months after GM is expected to start producing the Volt, Tesla Motors expects to start delivering their $60,000 Model S, a luxury sport sedan with a range of about 240 miles. By 2012 or so they expect to deliver their third model, a $30,000 all-electric economy sedan.

But Tesla Motors isn't the only one in the game. Lots of companies, both big auto makers and daring start-ups are promising electric vehicles in the near future.

Aptera expects to start producing their Typ-1e, an EV with a 120-mile range in late 2008, available initially in California for $27,000. BMW is working on an all-electric Mini-E version of the Mini Cooper, available for lease through a pilot program this year in California, New York and New Jersey. In 2009, Miles Electric Vehicles expects to begin delivery of their highway speed sedan, cleverly called the "Highway Speed Sedan," with a top speed of 80 mph and a range over 100 miles for about $40,000. Daimler has plans to introduce electric versions of both a Smart car and a Mercedes in 2010.

Brother, Can You Spare a Trillion Dollars?

Meanwhile the big Detroit automakers have resisted years of pressure to produce more efficient vehicles, instead betting their profitability on giant gas hogs. Who could imagine that either environmental or national security concerns could sour the American public on huge gas guzzlers? Combine that with the brutally obvious result of global oil production leveling off while demand has continued to grow, literally exponentially. Is it any wonder years of short-sighted profiteering have put the big American automakers on the edge of bankruptcy? All of their lobbying to prevent more stringent domestic fuel economy standards while also locking  more efficient diesel fuel vehicles out of the US market has destroyed their competitiveness overseas, and now the American buyers aren't interested in their bloated product lines either.

Their solution is to have the US Government pour hundreds of billions of dollars into the ailing US auto industry to pay for their past mistakes, while they try to retool to build incrementally more efficient vehicles based on a compromised PHEV design, hiding behind inflated and misleading MPG numbers.

That's not how I want my tax dollars spent.

---

*The cost to drive a car on electricity is generally really cheap, due to the superior efficiency of an electric drive, even taking into account power plant efficiency and transmission loses. But, the cost does depend on where you live. Also, the emissions associated with the energy used in an electric vehicle vary widely depending on how electricity is generated in your area.

The good news is that we are already motivated to green up our electrical generation and EVs benefit from that without changing the car at all, while their gas-powered peers get dirtier with age. Oh, and gasoline prices can only go up, give or take short term fluctuations: global production is flattening out while worldwide demand is increasing.

My thoughts on Joe Nocera's uninformed rant on Tesla Motors.

Disclaimer: My wife and I are a customers of Tesla Motors. You might think this means I want Tesla to succeed because they have a chunk of our money, but I think it's the other way around: Tesla has a chunk of our money because we believe in their vision and strategy for making it happen. We also own a RAV4-EV.

OK, enough about me. Let's get straight to Nocera's article and learn why Steve Jobs recently described him as "a slime bucket who gets most of his facts wrong."

[Elon Musk] is using [his] wealth to finance two quixotic efforts.

Don't mince words, tell us what you really think.

I'm no auto expert...

Well, at least we can agree on something!

Tesla expects to be delivering four cars a week soon, a number it eventually hopes to double.

Actually, they hope to get to about 35 a week within 6 to 12 months, but maybe math isn't his area of expertise, either.

By the end of 2010, Mr. Musk and his executive team expect to be manufacturing a five-seat, all-electric $60,000 sedan. This, however, will be a much more expensive and difficult task -- and many auto experts doubt that Tesla can pull it off.

What auto experts? Does he mean auto experts who make their living off of the big auto makers? Would they really be expected to say they think this tiny upstart company can easily do what the big guys have been whining can't be done for 10 years?

Among its flaws, the EV1 used a nickel metal hydride battery that couldn't get more than 75 miles before needing a charge.

Now he is getting the facts totally wrong. The first version of the EV1 used lead-acid batteries, 19th century technology, and had a range of 75 miles. The second generation EV1 used NMiH and had a range of over 100 miles.

"My daily commute was 37 miles one way," wrote a man named Michael Posner on a Web site called The Truth About Cars, who drove an EV1 for several weeks back in 1997. "Every trip was loaded with drama," he added. "If I went to lunch, I gave up a few precious miles. That could mean disaster." At General Motors, they took to calling this problem "range anxiety."

99% of all travel is less than 100 miles, so there's 1% of travel that couldn't be done in a second-generation EV1. This one guy tried to do his 74-mile commute in a first generation EV1 with a range of 75 miles. It didn't work out for him. Duh.

Is it any wonder the car didn't catch on?

Who says it didn't catch on? GM only leased 800 of them, but they never mention the waiting list of 4,000 more people who wanted to buy one. This happened with not only no promotion of the vehicles, but with ads clearly designed to dissuade potential customers from considering EVs. One can only guess what would have happened if the car companies actually promoted the strengths and benefits of EVs. When the big auto industry got the California Air Resources Board to eviscerate their Zero Emissions Vehicle mandate, they took back all of those leased cars from their passionate owners, despite offers of cash for the cars and organized public protests. Then they crushed the cars. If you haven't already seen Who Killed the Electric Car, I highly recommend it.

Jump ahead a decade. Oil is so expensive that everybody is thinking about alternatives to $4.50-a-gallon gasoline. At the same time, the technology that makes electric cars possible has greatly improved. The development of lithium ion batteries, in particular, was such a great leap forward that it has made it possible, with enough additional innovation by electric car companies, to produce vehicles that get more than 200 miles. Suddenly, an electric car seems viable.

Wow, that sounds cool.

And yet, and yet. Despite all this progress, we're not close to being ready to mass-produce an electric car. For starters, everyone trying to build an electric car is coming at it from different directions.

Lots of companies are trying to do something that's never been taken seriously, and they all have different approaches. That sounds like innovation. I'd be more worried if they were all doing the same thing.

For instance, while the Tesla has a 1,000-pound battery pack, consisting of over 6,800 cells (at an estimated cost of $30,000) ...

Whose estimate is the $30,000? If that's true, how could Tesla Motors be promising an EV for less than $30,000 by 2012? Maybe the estimate is wrong. Maybe the cost comes down with economies of scale.

...the new Aptera Typ-1 -- a Jetson-mobile if ever there was one -- uses a much smaller battery; its secret sauce is its aerodynamic shape, which greatly reduces drag.

Sure the Aptera has a smaller battery: it's not an electric vehicle, it's a gas/electric hybrid.

Bill Gross, the head of Idealab, which is behind Aptera, told me that he believes that when the car comes on the market late this year, it will sell for around $29,000 -- meaning of course that its business model is the opposite of Tesla's.

So Aptera is making a hybrid, hasn't passed crash testing, and is promising a car this year. That's why he's comparing them to Tesla, because they are where Tesla was two years ago, except they are trying to do something completely different.

Meanwhile, a third company, Phoenix Motorcars, is hoping to make traditional cars, like S.U.V.'s, that just happen to run on electricity.

Wow, that sounds crazy, sort of like the RAV4-EV and the Chevy S-10 EV. Oh, wait, it's already been done, and quite successfully considering how well-loved the few RAV4-EVs are.

It will take years, if not decades, for the marketplace to choose a winner, which, in turn, will keep consumers from committing to an electric car.

Why do all electric vehicles have to be the same in order to be popular? The Honda Insight and Toyota Prius have pretty much opposite strategies, and yet the Prius is wildly successful and our local Honda dealer keeps sending us letters begging us to trade in our Insight because they are in high demand but Honda stopped making them.

Secondly, even though the range of an electric car can extend to 200 miles or more, that is still not enough for people to abandon internal combustion engines. Surveys have repeatedly shown that the vast majority of people drive 50 miles or less a day -- and the nascent electric car industry takes great comfort in those numbers.

Who said everyone has to give up ICE vehicles for EVs to be successful? How about if every household in the US that currently has two ICE vehicles replaced one with an EV? It seems like that would make a successful business.

But what happens when you want to take a longer drive?

How about a hybrid? See how handy it is that we don't have everyone building the same vehicle?

For an electric car to truly take hold, the country will need some kind of national electric car infrastructure -- either a place where people can stop to charge the battery (although that still means waiting hours to get a full charge) or a system in which batteries can be exchanged like propane tanks.

Gosh, how could we possibly create a national infrastructure for charging electric vehicles? We'd have to build power plants and string wires across the entire country, then put outlets on the ends of those wires. Sounds prohibitively expensive, except for the fact that we've already done it.

According to Tesla, a high current charging station could charge the Roadster's battery pack in less than an hour. So, stop for lunch, plug in your car in the parking lot, and an hour later your EV is fully charged.

Then there are the manufacturing problems. Just because Tesla has succeeded in making an expensive electric sports car does not mean that it will be able to make a moderately priced five-seat sedan. The latter is a quantum leap more difficult. "If the Roadster costs $100,000, how much will the sedan cost?" Mr. Sherman of Automotive magazine said. "It will have more doors, more seats, more metal, larger brakes. The operative word here is 'more.' "

Gosh, maybe they could lay off the carbon fiber and find some savings in economies of scale. I wonder what it cost Henry Ford to make the first 2,000 cars in inflation adjusted dollars. More than a Tesla Roadster, I'll bet.

David Cole, the chairman of the Center for Automotive Research, is another Tesla skeptic. For one thing, he says, the battery solution in the Roadster probably won't work in a heavier car. "Lithium batteries are going to change the world," he said, "but they are not ready for prime time." Tesla's solution in the Roadster -- tying together thousands of small batteries into one giant one -- is "suboptimal." He added, "On a degree of difficulty scale, building a sports car is a 2. Building a high-volume affordable car is a 10."

Ah, so he did find a big auto industry wonk that will put his name on a statement that says starting a new car company is hard. Wow! Fortunately, Tesla Motors figured this out all on its own and is working slowly toward mass-producing EVs while taking advantage of the growing demand for efficient, clean, fun electric vehicles. They sold around 1,000 before delivering a single car. What do you think the demand will be like when they are cranking them out and they are no longer an unproven car company?

Tesla, of course, insists that it is well aware of the difficulty, but remains confident it can succeed. Darryl Siry, the Tesla marketing chief, argues that the company has access to all the capital it needs, that it has just hired a manufacturing expert from Chrysler and that it has a hard-headed chief executive, named Ze'ev Drori, who has a reputation for getting things done. The more I prodded, though, the more skeptical I became.

In other words, Drori is a big auto industry guy who thinks it can be done, therefore he must be high.

For instance, what Tesla doesn't say, unless you really push, is that the sedan it hopes to sell for $60,000 will not get 200 miles per charge but closer to 160.

That's a big problem because 99% of all travel is under 100 miles, and apparently the cheapest Tesla sedan only goes an extra 60 miles of top of that.

It will cost considerably more to get 200 miles per charge -- which of course makes it an awfully costly car even for the moderately wealthy.

Yeah, cars that cost over $60,000 don't sell at all. Well, except for high-end sports sedans. Do you think Tesla can sell 20,000 high-end electric sport sedans? I sure do. 6-year-old RAV4-EVs sell for over $60,000 on the rare occasion when a lucky owner of one decides to sell. (The linked eBay item #230254014549 shows a RAV4-EV auction which closed at $89,200 but the top bidder flaked so it sold to another bidder for $69,850.) Could Tesla sell a million sedans at that price? Probably not. Given that they are only going to make 20,000 a year, it seems highly likely to me they could sell them at $60K even if they can get the cost down well below that.

I also don't see any problem with Tesla's plan to sell 200,000 EVs per year at less than $30,000 each. The only problem I can see with that is the length of the waiting list. They might need to sell them for more so their supply can meet the demand.

And that kind of petty dissembling on Tesla's part doesn't exactly inspire confidence.

Tesla said the sedan starts at $60,000, but they have never said the cheapest model will have a 200-mile range. In fact, they have not announced the specs for the sedan at all. It is somewhere between naive and disingenuous to connect the dots incorrectly and call Tesla liars.

So where should we pin our short-term electric car hopes? Andrew Grove, the former chief executive of Intel, has lately been pounding the table on behalf of something called a plug-in hybrid -- which uses a far more energy efficient design than the Prius, Toyota's popular hybrid. The Prius is powered both by batteries and an internal combustion engine, but essentially they are both working at the same time, so it is always consuming gas.

Well, except for the fact that a Prius has a small range that it can drive on pure electric. It's a small matter of installing and flipping a switch to give the US version of the Prius an extended pure electric range like the model sold in Japan. Then, for under $10,000 you can increase that range to over 40 miles.

A plug-in hybrid would drive completely on electricity until the battery runs down -- after about 40 miles or so -- and only then would the car switch to internal combustion.

A plug-in hybrid can go either way. It can have the design of a Prius (a parallel hybrid) with a larger battery, or it can be a serial hybrid like the Aptera or Chevy Volt.

Such a solution has the potential to cut the nation's gasoline bill in half.

That sounds a lot like what replacing half of the ICE cars with EVs, except with the hybrid strategy, everyone gets to keep paying for maintaining their internal combustion engines, catalytic converters and mufflers. I wonder why the big auto companies are doing everything possible to stall the adoption of pure EVs?

Mr. Grove believes that big cars like S.U.V.'s can be retrofitted to become plug-in hybrids, and he's right. But it is also expensive; Martin G. Klein, the founder of the battery company Electro Energy told me that it costs $50,000 to turn a Prius into a plug-in hybrid. (He's done it.) "But in a future scenario," he added, "it would cost a few thousand dollars."

So, it's wildly expensive, except that it isn't. In fact, companies like HyMotion are doing it today for about $10,000.

So where should we look, realistically, for a mass-market electric vehicle? Believe it or not, Detroit. In fact, the quick-fix approach that strikes me as the most promising comes from -- surprise! -- General Motors, the chief villain of "Who Killed the Electric Car?" The Chevy Volt, which the company wants to bring to market in 2010, is a plug-in hybrid that aspires to be able to travel 40 miles before switching to gasoline power. But the best part is that the combustion engine will automatically recharge the battery -- so it can switch back even while you're driving.

Yes, that's right: we should look to Detroit to do what small companies are doing today, while also not actually producing pure electric vehicles and protecting their ICE maintenance revenue stream. It's amazing how unattractive EVs look when you can just keep doing the same old thing, with a twist. They want to create a more efficient ICE vehicle by burdening a perfectly good EV with the weight and hassle of the ICE engines they have built their business around. Go Detroit!

It's not sexy like the Tesla, and it's not aerodynamic like the Aptera Typ-1. But for a mass-market solution in the here and now, that's the one to root for.

Except for the part where it's neither here nor now, it's set to match Tesla's Model S time frame, and it isn't an electric vehicle. But other than those things, it's great. So, let's all kneel and bow toward Detroit and hope that we can get in our reservations for Tesla's Model S and the 2012 sedan before they are sold out as far as the Roadster is.

The California Air Resources Board seems poised to cave into big auto pressure and gut their mandate for zero emissions vehicles. This blog from Tesla Motors that explains the situation.

Basically, the staff recommendation is to lower requirements on the big auto makers to levels that are likely to be met by tiny Tesla Motors all on their own, and likely to be blown away if any of the other promising ZEV startups deliver a small fraction of what they are promising.

You can express your opinion to the CARB through this web form.

Here's the letter I sent them...

To the California Air Resources Board

The big auto companies have no excuse for not developing vehicles which are more friendly to the environment.

Energy efficient vehicles are popular with consumers. Next time you go for a drive, just count how many times you see a Toyota Prius.

ZEV vehicles are technologically viable today. In response to previous CARB mandates, the big auto makers proved that ZEV vehicles can be developed and sold in quantity to consumers who want them. Witness the GM EV-1, the RAV-4 EV and the Chevy S-10 EV. The big auto companies produced these cars, sold them to a fraction of the consumers who wanted them and did everything in their power to hide and un-popularize them. This is well documented in the film "Who Killed the Electric Car." I personally know people who are still using the RAV4-EV and S-10 EV without any manufacturer support. These are awesome vehicles, loved by their owners and in high demand, with used vehicles selling for more than their original selling prices in many cases.

Recently Tesla Motors has started regular production of a fully safety-approved, highway-capable EV that has pre-booked orders approaching the numbers mandated by the watered-down CARB ISOR for the time period 2012-2014.

   http://www.teslamotors.com/

That a tiny startup company can be ready to produce 1800+ ZEVs in 2009 proves that the big auto companies can easily produce far more in the 2012-2014 timeframe, even 25,000 seems like too low a number to really push the auto industry to do their part to improve air quality and reduce CO2 emissions.

My wife and I will be Tesla owner number 241. We have driven one of their late evaluation prototype vehicles, and I assure you this vehicle is quite real. We will gladly replace our Acura NSX-T with the Tesla Roadster, a high-end sports car that is cost competitive with gasoline-powered vehicles in the same performance category.

Tesla Motors will use the experience gained from producing this expensive, low-volume vehicle to design and produce their next vehicle in the much larger $50,000 to $70,000 sports sedan market in 2010. I expect they will have a ZEV in the $30,000 price range shipping upwards of 300,000 vehicles by 2012.

Tesla Motors alone is likely to far exceed CARBs embarrassingly small demands on the big auto makers. Now is the time to increase the pressure on the big auto makers rather than reduce the CARB mandate to less than what the market is clearly already demanding.

Tesla Motors is just the first of several promising companies to start regular production of ZEVs. Aptera, Miles Electric, and Phoenix Electric all have credible plans to produce safe, highway capable ZEVs in the 2009 to 2010 time frame.

    http://www.aptera.com/details.php
    http://www.milesev.com/
    http://www.phoenixmotorcars.com/

Many other companies are working in ZEV market segment, as are many dedicated enthusiasts who are converting ICE vehicles to ZEV electric vehicles.

The California Air Resources Board has an opportunity to push the auto industry toward reasonable environmental progress. Please do so.

Tom Saxton