Driving on Sunshine
by Stephen Petranek
"I love my good ol' '67 Chevelle with its four-on-the-floor tied to a 396 big block!"
But there's an unseen revolution happening that's about to make my beloved gasoline-powered automobile a dodo of the industrial age. I'm talking about the electronic car revolution. The sales of electric autos, what some people call plug-in electrics, are doubling every year. Within 10 years, the chances are excellent that no internal-combustion cars will be sold.
One of my cars is a low-mileage restored 1987 BMW convertible with the sweetest- running six-cylinder engine ever made. That motor is mated to a butter-slick five- speed manual transmission. I love driving that car. But with every year that passes, I know I'm going to pay a higher price at the pump.
So a month or two ago, I bit the bullet and sent $5,000 to Tesla. I signed up for a Model X, the SUV with falcon-wing doors and all-wheel drive. I won't get it until sometime in early 2016, but it will be worth the wait. I know. A couple of buddies of mine own the Tesla Model S, and I've driven it quite a bit. And what I learned from driving them is this: Don't drive a Tesla unless you're prepared to buy one. It will wreck your attitude toward internal-combustion vehicles.
I love muscle cars, and I love fine German autos. I've worked on cars all my life. Even raced them. I never thought an electric vehicle would be right for me. Until I drove my buddies' Teslas. When I did, that was it.
I mentally sent my 1987 BMW convertible to the graveyard. How's that possible? How could I possibly give up a fine German automobile for a plug-in electric? Electric cars aren't like they used to be.
You can now buy more than 20 different models of plug-in electrics from manufacturers that include Honda, Toyota, Chevrolet, Kia, BMW, Mercedes, Tesla, Volkswagen, Nissan, Fiat, Cadillac and Ford. And Audi just announced two new models entering production by 2017, including a super sports car to be unveiled in January 2015.
There are more than 250,000 all-electric autos roaming America's roads. That's up from pretty much zero four years ago.
The top four electrics on the road are the Chevy Volt, with about 70,000 cars sold; the Nissan Leaf, with about 65,000; the Toyota Prius, with 35,000; and the Tesla Model S, with 32,000. Those are up-to-date figures, but they don't show the acceleration in sales. Tesla is projecting it will sell 32,000 cars this year alone and far more next year.
If production keeps doubling each year, in 10 years, electrics will replace every single one of the 253 million gas-guzzling automobiles currently on American roads.
What about price?
Electrics are pricey, but the federal government takes a lot of the sting out of your purchase. They're offering up to $7,500 in tax credits, depending on battery size. Several states add their own incentives to sweeten the pot. California will pay you up to $5,000 to buy a fuel-cell electric vehicle, or $2,500 for most plug-ins. Colorado, Georgia, Hawaii, Illinois, Louisiana, Massachusetts and New Jersey are among states offering incentives up to $6,000.
In Denver, you could get the $35,000 Chevy Volt's price down to about $22,000 with incentives. That's 32% less than the average new car price of $32,495 (as reported by Kelley Blue Book last August). Get a well-above-average automotive experience for a deep discount.
A proposal to increase the maximum tax credit to $10,000 per year is part of the 2015 federal budget. The government is planning to make the tax credit a rebate available at the point of sale. You can use it for your down payment.
What's driving all this?
As much as they bungle other things, both state and federal governments are on board with electric cars. They recognize that the days of Big Oil are limited. They know we need to move to renewable sources of energy. They're willing to help us do that via tax credits while corporate R&D efforts work to bring costs down.
And electrics are proving to be much cheaper to operate than anyone could have guessed a few years ago. One of the biggest secrets about their phenomenal growth is that many people are not just getting the equivalent of more than 100 mpg, as stated on the window sticker of every electric -- they're getting the equivalent of thousands of mpg!
That's because so many charging stations are absolutely free. Nissan offers free charging stations for the Leaf. And Tesla now has more than 125 free supercharger stations across the country. You can get a half charge in less than 20 minutes. That's 130 miles' worth.
And suddenly, no shopping center in the United States can be considered competitive unless it offers dozens of free charging stations for electrics. In the Washington, D.C., area, where I live, it's almost impossible to find a major shopping center without free juice.
Another big saving comes directly from electric utilities. Many now offer extremely low rates for charging electric cars at home after midnight, when a lot of utilities' generating capacities is otherwise going to waste.
Want more savings?
Some plug-in electric owners are putting a few solar panels on the roofs of their houses and charging their cars on early or late sunlight before or after work. Even at those hours, they get enough charge to drive on sunshine.
Parking garages are rushing to offer free charging for electrics as a competitive advantage. A federal initiative to provide electric vehicle charging at workplaces has sponsors like Google, Verizon and 3M joining in. Homebuilders are adding electric vehicle charging stations when they construct houses as a matter of course.
Electrics are much cheaper to drive, not only because the "fuel" is so cheap, but because upkeep costs are negligible. There are no oil changes, no tune-ups, no fuel filters and no air filters. Brake pads, tires and windshield wipers are all you'll probably have to worry about.
It's true, a few manufacturers use a liquid coolant and a radiator to cool their batteries in hot climates. Most, however, opt for elegant, air-cooled designs coupled with software that doesn't allow batteries to get too hot in the first place.
Warranties on electrics are often longer than for gas-powered cars, and most manufacturers offer at least an eight-year warranty on the battery. Nissan recently upped the ante by offering a battery warranty that insures against loss of battery capacity over time.
Meanwhile, the technology of these vehicles is improving rapidly. Tesla makes about 20 modifications a week to the design of the Model S. A federal program that invests in electric auto technology is pushing for a battery that costs a fourth the current price, weighs a third less and can take a car five times farther within five years.
Remember what I said about driving a Tesla? Driving an electric vehicle is a better experience. Your next car will be electric whether you like it or not. The good news is you're going to love it. And they cost less in the long run when you count the tax credits, maintenance savings and fuel savings.
When you drive a car essentially free, a $70,000 car becomes a $40,000 car very quickly. That's only a 23% premium over the average price of a new car to get all the personal benefits of driving an electric -- and help the planet in the bargain.
Very soon, it will look insane to buy a gasoline-powered car. It's as simple as that.
© 2014 Agora Financial, LLC.
[NOTE: Electric vehicles are cheap to operate now because recharging stations get their energy from fossil fired fuel plants. But, fossil plants are being closed because of more stingent EPA regulations and after carbon taxes are implemented, electric utility rates will likely be $0.17 /KWH. The costs of operating an electric vehicle are going to skyrocket, then we'll see what's 'insane'. - Ed]