Yes, these vehicles are so good that they won't sell without subsidies.Aside from being wrong so far as I can tell (the Prius was selling nicely from its introduction in 2000, and I can't find anything about a subsidy from earlier than 2004), Gewirtz implies that hybrids make no economic sense and would not sell on their own merits. That's a strong assertion. Does it have any basis? Time to haul out an old envelope and that pencil stub.... Let's assume a gas-optional hybrid designed to be built in volume for cheap, and go 20 miles before it switches from electric propulsion to burning fuel. It uses lead-acid batteries of the absorbed glass mat (AGM) type; there is no free liquid electrolyte to leak, and they are sealed in heat-welded plastic cases. They have a calendar life of about 3 years. At one cycle per day, they'd need to go about 1100 cycles to last 3 years. The weight of the motor and its electronics are made up by reducing the weight of the engine versus a conventional car. The battery life graph I cited in "Is the tide turning?" shows that such batteries would last 1100 cycles if they were discharged to approximately 50% before recharging. If the car uses 250 watt-hours per mile, a 20-mile range would require 5 kWh and the battery would need an ultimate capacity of 10 kWh. Some years ago, I re-powered an old UPS. I removed its failed internal gel-cells and replaced them with a hefty deep-discharge storage battery. This battery is rated at 105 amp-hours @ 12 volts (1.26 kWh nominal), weighs 65 pounds and cost about $70 at retail. Scaled up to 10 kWh, this battery would weigh 516 pounds and cost $556. Extra weight in a vehicle requires extra power to accelerate it and increases rolling resistance. The battery itself can store (and regenerate) the energy to accelerate itself, but the rolling resistance has to be made up elsewhere. If the vehicle tires have a rolling coefficient of friction of 0.008, the car would need an additional 8.2 watt-hours per mile to pull the battery. This can probably be ignored. The motor and electronics are more difficult to specify. DC motors offering 28 peak horsepower are going for around $500 retail, with controllers running about the same (about $36/peak horsepower overall); however, these are low-volume items and do not reflect economies of scale. AC Propulsion estimates a per-unit cost of $3500/unit for their AC-150 drivetrain in volume production (private communication), or $17.50/horsepower overall. If that same price can be maintained for an 80 HP drivetrain that is highly cost-engineered, it would sell for $1400. The overall cost of the vehicle would increase by $1956, with a $556 battery replacement every 3 years. Savings: If the vehicle runs 20 all-electric miles every day, it would go 7300 miles per year on no fuel whatsoever. Economy beyond this might run 38 MPG vs. 30 MPG for a conventional vehicle; if the car ran 15,000 total miles per year it would consume 203 gallons of fuel vs. 500 for the non-hybrid. The savings in fuel would run to $669/year at a price of $2.25/gallon, more at higher prices. This would be offset by the cost of electricity; at a charger/battery efficiency of 65%, the hybrid would consume 2808 kWh. At off-peak rates of $0.08/kWh, this would cost $225 for a net savings of $444/year. Battery amortization costs $185/year, for a total savings of $259/year. If the money to buy the car is borrowed at 11%/year for 4 years, the additional interest cost of the hybrid drivetrain is $215/year in the first year; the net benefit is small, but positive. If the car is used for 12 years, the overall costs amount to $4485 ($1956 cost + $861 interest + $1668 replacement batteries) while savings at $2.25/gallon total $5328; net savings are $843. If gasoline rises to $3.00/gallon, net savings rise to $2667. Do plug-in hybrids make sense without subsidies? Even without weighing the benefits of less pollution, greater convenience due to 60% fewer fill-ups, future-proofing and other positive attributes, it appears that they do.
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