Electric Vehicles in St. Johns–Let’s be Rational

There’s been considerable debate regarding a recent RFP to purchase a pair of electric vehicles as part of the St. John’s city fleet. As expressed by councillor Dave Lane, who spearheaded the proect, the plan was to make the new vehicles available to the parking enforcement unit and to treat the whole thing as a pilot project and to see where things went.

Initially this did draw considerable, polarized, interest with those for it noting that much could be learned from the acquisition and use of the vehicles and, besides, the cost of operating them should be considerably cheaper. Those against typically viewed the whole thing as not worth the bother; playing with newfangled toys. The debate was brought to a head, though, by a letter written to the council by former mayor Andy Wells in which he slammed the plan as a waste of taxpayers’ money and concluding that electric vehicles are, in general, ” ‘driveway jewelry’ for the eco-affluent, who benefit from public subsidy to indulge their guilt about living in a fossil-fuel-dependent society,”

Then the fight started, the polar opposites moved yet further apart and both sanity as well as reason, it seems, exited the building.

Still, though, it’s impossible to ignore the fact that, year by year, electric vehicles (EV’s) are becoming more and more prevalent. Sales, while not exactly meeting the growth targets guessed at 4 years ago (they were expected to triple each year) have still been showing decent growth. What’s more, most of the major manufacturers are in on the industry. Presently, models are available from GM, Toyota, Nissan, Fiat, Daimler, Mitsubishi and of course Tesla to name just a few.

With a little time on my hands I investigated the costs associated with the requested purchase for the city. I asked just one question: does it make financial sense? In other words should the expected reduced cost of operation translate to a lower cost of ownership. Not to spoil the rest of the post but the short answer is “no” but it’s worth reading on, if you have the time and interest.

Let’s look at the cost for just one car and let’s leave the cost of the charging station out of it altogether since the car doesn’t really need a dedicated charging station as such; all it needs is access to a 110 V or a 220 V (preferred) standard outlet. Since the EV is to be used just around the city, all of the costs should be based on that type of driving.

Now—what car to choose? While no doubt some users would love to cruise around in something very nice such as the luxurious and trendy Tesla S,  we have to be more pragmatic here and choose something better suited to the job at hand. It’s for parking enforcement and won’t be carrying significant cargo. It’s also bought on the taxpayers’ dime so it therefore needs to be inexpensive. For the sake of argument let’s choose the Nissan Leaf.

Nissan Leaf (Wikipedia)

Let’s stick with the base model. According to Nissan’s website it can be had here for $33,788.00. Not exactly cheap but the expectation is that what we lose up-front we’ll gain back in the long term with lower operating costs.

Let’s figure them out. Let’s start with charging the battery. According to Nissan, the battery capacity is 24 kWh so you might assume that it therefore will take that much electricity to charge it. You need to take into account, though, the simple reality that no process is 100% efficient. You may notice that when batteries are charging and discharging they warm up. This means that some of the energy is being wasted as heat. You can expect, therefore to need more than 24 kWh.

Based on some data found here I am assuming 85% efficiency this means that to fully charge the battery you must therefore supply (24/0.85) or 28 kWh of energy. At NL Power’s current rate of $0.1178 / kW h this means a full charge will cost $3.30.

Next you need to determine how far a charge will get you. Nissan’s stated figure is of 135 km for a full charge.  The US EPA, however lists a much more conservative value of 117 km. Given the fact that batteries function les efficiently in cold temperatures, however, it makes sense to question the validity of even this figure. Fortunately, some low temperature data are available. The website fleetcarma.com has listed some empirically derived figures of how the range per charge varies with temperature so let’s use those.

We also need to use temperatures that are realistic for this setting. Average temperatures by season can be found here. Let’s assume that the vehicles will be driven 20,000 km/year and, further, let’s assume equal distances in each season. Since the temperatures will be different in each season let’s take that into account. The table below lists the anticipated costs for driving 5000 km in each season, as well as the yearly total.

Season Temperature (degrees C) Range (km) Cost for charge Cost for $5000 km
Winter 1 70 $3.30 $236
Spring 8 75 $3.30 $220
Summer 19 77 $3.30 $214
Fall 13 77 $3.30 $214
Yearly total $884

Table 1: Yearly charging cost for Leaf, assuming 20,000 km

Now let’s compare the EV to something reasonable. Since we started with a small Nissan EV let’s compare it to a small conventional Nissan, the Versa. Once again, let’s stick with the base model but equip it with an automatic transmission to make it more functionally equivalent to the Leaf. According to Nissan’s website that vehicle should come in at $17,165.00.

Nissan Versa Note (Wikipedia)

Now we need to find the cost of fuel for 20,000 km. Based on US EPA figures the Nissan Versa is rated at 7.6 L/100 km in city driving so you can expect to use 1520 litres to drive the 20,000 km in a year. The variability in gas pricing makes it impossible to provide a definitive single cost so upper and lower figures will be used instead.

According to Gas Buddy the yearly low was $0.95/l and the high was $1.44/l. This then gives two yearly fuel costs.

Based on $0.95/l
“low fuel”
Based on $1.44/l“high fuel”
Yearly fuel cost $1444 $2189

Table 2: Fuel costs for Versa, assuming 20,000 km

Now the maintenance. Data on this are available in US$ from autoblog.com and are presented in the table below (converted to Canadian dollars). Interestingly enough the figures are roughly the same and could realistically have been omitted from the calculation.

Vehicle Leaf Versa
Repairs and Maintenance $4844.20 4857.94

Table 3: Maintenance and repair

So, finally, let’s look at the total five year cost for the two vehicles. Insurance and licensing will be the same for both so we can omit them.

Item Leaf Versa (low fuel) Versa (high fuel)
Purchase Cost $33,788.00 $17,165.00 $17,165.00
Fuel $4420.00 $7220.00 $10945.00
Repair and Maintenance $4844.20 $4857.94 $4857.94
Total $43052.20 $29242.94 $32967.94

Table 4: Five year cost of ownership, based on purchase with no resale.

Clearly, presented this way, there’s no contest. Based on straight up purchase the leaf will cost anywhere from around $9000 to around $14000 extra to own over the five-year period.

Now, you may be crying foul, “wait a minute, you don’t ditch the car after 5 years. The Leaf will be worth more at the end of that period so this is not a fair comparison.” Fine. Let’s factor in depreciation. Once again the estimates came from autoblog.

Leaf Versa
Original Cost $33788.00 $17165.00
Depreciation $21317.32 $9115.47
Resale Value $12471.00 $8049.53

Table 5: Expected depreciation and resale values

Set’s just do the total cost table 4 above over again but use depreciation instead of purchase cost.

Item Leaf Versa (low fuel) Versa (high fuel)
Purchase Cost $21317.32 $9115.47 $9115.47
Fuel $4420.00 $7220.00 $10945.00
Repair and Maintenance $4844.20 $4857.94 $4857.94
Total $30581.32 $21193.41 $24918.41

Table 6: Five year cost of ownership, based on purchase with resale

The Leaf is still considerably more expensive, even when you consider a worst case scenario for gasoline.

From a strictly cost-based perspective, then, it does not make sense to procure and use the EV’s if the assumptions used are valid.

That’s not really the end of the story, though, is it? It’s not my intention to be negative here, just reasonable, and since the main argument put forward was based on cost it needed to be pointed out that it was likely invalid. That said, there are far more compelling reasons that may still make the plan a good idea. Consider these:

First, you need to consider the overall environmental impact of EV’s. They have the potential of being much cleaner and environmentally friendly. Assuming that the batteries are correctly recycled and re-purposed (and there’s cause for some optimism in that area, see here.) then the real environmental issue is related to the source of the electricity. Right now in NL, unfortunately that’s just a bad joke as the electricity is as non-green as it gets, coming, as it does, from a dirty thermal generating plant. Later, though, when the feed is switched over to the Hydro-based Muskrat Falls plant that will be an entirely different matter; much greener. Simply put, right now electric cars are just contributing to the pollution coming from the Holyrood Plant bit that will change in a few years—right about the time those vehicles are ready to come off the road as it turns out.

Second, you need to consider the value in foresight and planning—something often badly absent from the NL milieu. (As an aside a good friend often half-jokes that the NL Government’s idea of long-term planning is, “what’s for supper?” His words, not mine.) Based on the best available data it does seem likely that EV’s will become more and more prevalent as time goes on. To what extent? I would suggest it is impossible to ascertain that right now. It’s still worth considering. As such not only the city but also the province needs to devote a reasonable amount of time and effort in gathering pertinent empirical data regarding use costs, reliability, safely and infrastructure needs. In that light, the proposed plan, if altered and fleshed out appropriately as a rigorous pilot project, and not just a vague idea, can easily be seen to have significant merit.

So maybe the best advice to those involved should be this: plan it all out a bit better, look again at the timelines and goals, and maybe see if partnership assistance is available from the province. Don’t just mess around driving from meter to meter and, asking the traffic enforcement officials, “how’s it going with the new EV’s?” from time to time. No, devise a proper plan and implement it. Log everything: kilometers driven, time needed to charge, energy transferred in the charge, times required, maintenance and repairs–everything. Put it up there where we can all see it and benefit from it. In that way, properly implemented, the project does have the possibility of yielding information that can be used by consumers and governments alike.

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6 thoughts on “Electric Vehicles in St. Johns–Let’s be Rational

  1. Excellent analysis, Maurice!! Now I will also number my points 🙂

    1) Comparing this idea to those many initiatives of Austrian city councils to “boost e-mobility” my intuitive reaction is: At least they are going to purchase a useful car – and they are not giving out subsidies for e-bikes. This is really a pet peeve of mine, as those bikes will rather replace bikes that don’t need any energy at all. I am always asking myself why you get money for using more electrical energy on biking than before whereas a green zero CO2 bike goes unfunded 🙂

    2) The craze for the Tesla actually worries me. I thinks we are going to perpetuate the car-as-a-lifestyle-token-ism. Although I understand the idea: You need to market an e-car as cool to reach out to the usual target audience, but I think it is unfortunate that the first electrical cars were those medium-sized luxurious ones. Another pet peeve of mine: When people invest in a heating system (or PV panels), they want to see a great ROI, every $ has to be justified as if this were a company’s investment. But on purchasing a car (the device that should take you from A to B) obviously different criteria are applied.

    3) Considering the overall impact – and maybe translating future impact of CO2 emissions into money, one might be able to show the money is well spent. In Austria, CO2 emissions from traffic have not changed and are thus a much bigger problem than emissions from industry, the energy sector or heating of private homes (For all of these considerable reductions had been achieved in recent years). So if electrical cars would be used by a considerable part of the population it would be a game changer in Austria. Of course, as long as power plants are mainly stoked by fossil fuel it is hard to argue and convince the man in the street that he has to go green before big industry does so. Here we could start people: You car is the last obstacle to meeting our CO2 goals. I am painfully aware of this when I check out my personal footprint – at least I am driving much less kilometers than a few years before. We have two cars, are both driving less, and mine is more than 8 years old. I am just waiting for a bit better / cheaper batteries so I will replace my car with e-car and we just keep one powered on fossil fuel.

    4) I do calculations of ROI based on the net present value method, thus taking into account the yearly rate of change for fossil fuel and electricity and the “adequate target rate” representing interest rates for alternative investments, interest on borrowings, or estimated risk. All of the rates are difficult to estimate, but in general the outcome of the analysis is sensitive to these values. It’s a bit of financial voodoo I don’t trust too much – it shows how a small black swan in energy prices might change anything and it does not give you a false sense of simplicity.

    1. Thanks, Elke. Excellent points. Overall, the idea of purchasing the EV’s is a good idea, especially when as you pointed out, you look at the bigger picture that considers all of the factors and not just fuel savings. My province has a long way to go in terms of being environmentally friendly. Consider these, which contrast sharply with the situation in your home:
      – not much of energy multiplying heating systems (heat pumps). Rater there’s almost 100% usage of 1:1 systems (oil furnaces and direct heat systems).
      – VERY poor public transit–no provincial trains, hardly any “park and ride” systems and a metrobus system that hardly anyone uses.
      – unreasonable fondness of large vehicles. Big over-built trucks and SUV’s are the norm here, typically with a lone occupant.
      – a very dirty hydrothermal generating system serving the majority of the people in the mos populated area.
      – almost nonexistant PV.
      – disregard for the significant wind generated electricity resources here. Fact is it’s ALWAYS windy and the provincial energy authority ignores it.
      – no bike infrastructure. In fact many drivers just sneer at the bike riders and consider them as silly, misguided fools.
      I could go on and on but you get the point 🙂

      1. Yes, I get the point! I guess it is really hard to change something – where to start? I believe the situation here was similar about 30 years ago when things like solar energy was considered the hobby of a few green leftist crackpots 🙂 Same for biking. Hiking was also considered an boring occupation for retirees, today it is hip again for work-life-balance ninjas. I am actually not sure what initiated the change, but I believe the oil price shock in the 1970s paved the way. There were also a few pioneers who didn’t give a sh*t about public opinion and build their odd renewable energy stuff despite being ridiculed, long before such projects were awarded prized and given subsidies. Would be interesting to do sociological research on the cultural change.

        In one respect our regions are similar (my local region specifically, not all of Austria): Public transport is not well developed here, density of cars / inhabitants is highest in Austria. You would expect there is some city train connecting Vienna with its greater area (~70km radius), as in any other major capital, but there isn’t (Blame it on the fact that our “provinces” are so small, and Vienna being a different province than the region around it). Commuting is governmentally subsidized, and there is this negative feedback loop of people using the existing (bad) public transport less and less, because they need to have a car anyway, so the train is not economical for the company, and public transports gets worse. Subsidizing commuting should have helped the stereotype poor worker who commutes 100km from a distant rural area, but it acually helped well-earning middle-class families to move to the country-side while keeping their workplace in the city.

  2. In haste … my immediate response is that we should all be willing to invest in the future health of our environment, this place in which we live. Joanna keeps telling me that there are some things in life that are worth more than money … perhaps we should place ‘a clean environment’ at the top of the? D

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