Thursday, February 17, 2011
True cost of a Nissan Leaf in Hawaii—is it really a bargain?
by Larry Geller
Answer: It all depends. The devil is in the math. And also, of course, whether I’ve calculated this correctly. I welcome anyone double-checking this, or providing alternative calculations.
First, check out this video on the Leaf, from a CNNmoney website. This is one cool car. It even has an iPhone app.
Note the numbers quoted at the very end. We’ll adapt those to Hawaii gasoline and electricity rates.
There’s a thingy at the lower right you can click to get full screen, it’s worth it. See you after the video.
I also referred to a Consumer Reports magazine article for their comparison with the Prius.
Ok, let’s dig into the calculation. The video says that at 11 cents/kwh the Leaf costs about 3 cents per mile, so for 15,000 miles in a year it costs $400. I think that should be $450.
At Oahu’s usual 25 cents /kwh that would be about 7 cents/mile or $1,050. But on Oahu only, HECO is running a PUC-approved pilot program which reduces the cost for those who apply to about 20 cents/kwh, or about 5 cents/mile or about $750 for that 15,000 miles.
Now, the video uses an average car that gets 25 mpg for reference, at $3 per gallon of gas. That’s $1,800 for the 15,000 miles—so the Leaf is a great saving, at $450.
At Hawaii’s average gas cost of $3.77 today, that would be $2,262.
But CU compares the Leaf with a Prius getting 44 mpg. At $3 / gallon that would be $,1022 and at Hawaii’s $3.77 that would be $1,285.
So by this calculation, the Leaf, on the Oahu pilot program, would be $750 vs. a Prius at $1,285. Yes, it’s a saving. Whether it’s significant or not is up to you. The Leaf has advantages and disadvantages. I’d love to have one just to have one, even if it cost the same for gas. But that’s me.
However, the devil is indeed in the details. One detail is the cost of the battery. Now, Nissan could change these numbers at any time. It could even waive them. But let’s forge ahead with what I understand.
A battery is warranted for 100,000 miles, pro-rated and costs $18,000. Sure, that could drop in the future. But we’re going with the numbers I saw on the web. That’s 18 cents per mile.
If you plan to dump the car after 8 years (who would buy it with no battery warranty left?), maybe you don’t care. But if you have battery trouble in between, the cost is yours to bear. That 18 cents swamps the savings.
At the pilot program rate of 5 cents / mile for electricity, plus 18 cents for battery, that’s 23 cents / mile. The 15,000 miles would then cost $3,450. That’s a whole new ball game. Remember, the Prius clocked in at $1,285. And no expensive charging station needs to be installed.
Ok, please double-check me on this. I’m no expert at car costs. I don’t know if it is reasonable to include the battery cost as I have done. I don’t know what it would cost on Neighbor Islands, especially without a pilot program.
Have at me with your own calculations, and please correct me if I’m wrong.
One of the things about the first world that I find so fascinating is how all these 'green alternatives' incorporate so much high intensity industrial pollution to create unless they used Star Trek like technology for things like mining the metal for the components and wind/solar/wave energy in the manufacturing process. Because overall, power plugging into a fossil fuel based electrical grid is marginally different than using fossil fuel directly. Its hard to really compare the true environmental cost without all of this additional information. What is the total environmental cost of manufacturing in CO2, lets say, for a leaf vs prius? And, then, what is the CO2 measured over the average life of the car over 10 years (the warrantied life of the battery) or something similar? If the CO2 use between them, over all, varies little, then the only issue really is actual cost. (Although CO2 variation, I guess could be given a value itself but as you say, at some point, there are subjective qualitative factors that can't easily be quantified)
I think there is a problem with your calculations. When you are comparing the cost per mile Vs the Prius, you average in the 18,000 dollars for a replacement LEAF battery that will probably be needed at 100,000 miles. Fair enough. However, there is maintenance and repair the Prius will need that the Leaf will not. Oil changes, plugs and wires, filters of many kinds, tune ups, etc, and the labor costs for these repairs must be added into the cost per mile of the Prius. Also, since in the LEAF the battery is more like the engine, why are you also not adding the cost of a new Prius engine or rebuild at 100,000 miles into your calculations?
I know my calculations are not perfect. Both cars will need maintenance (for example, brakes, I assume). I don't know what the Leaf needs in the way of lubrication. Modern cars don't have spark plugs, and wires don't need changing these days, or if they do, the cost is minimal.
The annual cost of maintenance, if it is on a timetable, would have to be broken down by the number of miles actually driven. For example, my Honda has to have an oil change every x miles or 3 months. I don't hit the miles, so I go by the timetable in the owner's manual.
As to replacement of the Leaf battery mid-way, this seems to be an unknown. Ordinary lead-acid batteries typically fail mid-way in their warranty. They're returned to Costco all the time for a rebate when a new one is purchased. I think I get three years on a five-year battery for my car. A few months ago I made money since the rebate bought a new battery which was cheaper than the old. If the battery does last its projected lifetime or more. the car will still have a low or insignificant resell value, while a typical gas car in good condition might be worth a little. Or so that's my understanding. A purchaser would know that the car will be dead without buying a new battery right away or soon after purchase. Perhaps it won't be that bad, time will tell.
Even forgetting the battery, the cost savings to operate a Leaf in Hawaii may not be as great as people might think. That's why I put out the calculation. If someone can correct it, great!
I'm really wondering what the cost to operate would be on Kauai, for example. On the other hand, can a Leaf even be repaired on a Neighbor Island at this point?
There will be a choice of electric vehicles. I'd love to see a standard way of calculating the operating cost so that they could be compared. Then a choice can be made taking into account the expected range, cost of regcharging, etc. This may not be rocket science, but it's new and a bit uncertain, I think.
After they arrive and come into use we'll know more.
This is a great point. I don't believe your numbers need to be accurate to the cent. Thinking about the alternatives is what matters most. I like to run my cars into the ground before I think about purchasing a new one so the Leaf with an eight year warranty might not be for me. The Prius battery has a 10 year 150,000 mile warranty which means if the Leaf battery fails in year 9 the Prius will have a large advantage cost wise.
Ah, but then should I have included the pro-rated cost of the Prius battery in the calculation for that car?
I learn the most when I do it myself. For instance, I am the second person to try the Feed in Tariff on my house in Oahu. Have not completed the process, and I am gambling that the FIT rate will be improved in the future.
For electric car, my calcs have come up with 7 PV panels will make enough power to power your car. If you can make you own electricity (for free) and get gov to pay 65% of the initial cost, it is a no brainer.
And to clarify....no expensive charging station is required if you can charge overnight. Somehow this whole "charging station" thing is a fraud.
Steveo, please keep us posted on your progress with the FIT.
And yes, the charging station seems to bring nothing more than speed, since the car can be plugged into a regular 120v socket.
As I understand the HECO pilot project (for those without their own PVs!), all electricity used by the house during the designated hours gets the low rate. That's an added cost benefit even if the car is not charged every night. That applies to those who can participate in the pilot project, of course, and for as long as it continues.
Per Nissan, ideally, after 10 years/100,000 miles, the battery should still be able to hold 80% of its full charge when new. So the battery is not totally dead at the time, on the contrary, it will be still very capable.
For a typical car, after 10 years/100,000 mile, the resale value drops to about 20% of its MSRP, that will be the same case for either LEAF or Prius. So, when you calculation the cost per mile, don't forget to put that into account for prius.
As a LEAF owner, I have a PV system that produces the power for my car. If I breakdown the cost of my array over 20 or 25 years, it is a little under 7 cents a kWh, so to charge my LEAF and drive 100 miles, it cost less than $2.00. I writing this note on Jan 31, 2012, and right now HELCO is 44 cents a kWh and Gas is averaging about $4.50 (and my guess it will hit the $5 mark in 2012). I will take the LEAF and my PV array any day, and let the People that don't believe in progress and EV's, keep paying those high energy cost to HELCO and the Gas companies. Good luck with that.