"Do you want a $40,000 car, a $20,000 car or drive this car off the lot for free?" he asks. Uh...yeah, I'll take the free one! It's a bit of a jab at current electric and hybrid vehicles...but there is no shortage of places to jab PBP either. So let's get started.
The economics of Project Better Place (which leases batteries out to drivers, and then swaps them out for charged batteries when the charge runs low) have always seemed a little dubious to me.
Agassi quotes his electric cars as costing about seven cents per mile to drive around. Assuming that his cars will live as long as the average American car and be driven the same amount, we can expect the cars to cost PBP about $8,400. (the math: 12,000 miles x $0.07 x 10 years = $8,400.)
So that's the cost of driving...now you have to include the cost of the free car (probably the next biggest piece) the cost of the infrastructure, the cost of research and development, battery replacement, advertising, etc. So where does the money for that all come from?
Well, first, raise the cost per mile up to around the level of a gasoline car, $0.35. Then you get about $40,000 from the customer over the life of the car. Knock off the cost of the car and you just might have enough to run this system...as long as lots of people sign up...and those people keep driving a lot.
But the big question is how will Agassi sell the plan to consumers. If he simply sells it at a per mile cost, then this would be a great thing for the environment...keep the costs of driving high but emissions lower (because the cars are electric.) If, on the other hand, Agassi only gives you a free car if you promise to drive (and pay for) 100,000 miles per year, then that gives Americans huge incentives to drive more...bad news for everyone even if the cars are electric.
The question becomes, would it be better to buy an electric car yourself, charge it at fast charging stations and spend less over the life of the car, or do you want to hand your money over to Shai Agassi so you can pretend your car is free.
I hate my cell phone already...I'd rather not have to hate my car.
written by Rmachuta, October 08, 2008
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