Ch-ch-ch-changes

Generali

Time to make the change,
Ch-ch-chaaaange-e-es.





Things change faster than you think when a new technology takes over.

In the UK, the retail price of electricity for residential use is around 12 pence per kilowatt-hour (kWh). In US dollars, this is about 18 cents per kWh. So to fill up a BMW i3 will cost £2.26 (US$3.38). If we take the middle driving range of the different i3 versions to be 80 miles, then cost per mile is 2.8 pence (4.3 cents).
To put this in context, a Mini from the same BMW stable usually has a 40 litre tank, which would cost around £44 to fill at current prices. A full tank for the Mini will allow you to drive around 650 miles, giving a price per mile of 6.8 pence (10.2 cents). So i3’s fuel running cost is 40% of that of the Mini.
Meanwhile, the zero to 60 mph times for the two types of car are similar, which brings us to pricing. The i3 sells for £30,000 (US$45,000) before the UK government EV grant of £5,000. By comparison, a Mini sells for around £15,000 depending on the specification. Against this background, we have to ask whether the i3 battery price will fall sufficiently to get an i3 close to the price of a Mini.

http://therationalpessimist.com/2015/03/22/charts-du-jour-21-march-2015-battery-banter/#more-9806

kabayiri

To influence the vehicle market in the UK you really have to impact the fleet market.

Company fleet purchases are such an important contribution to car sales.

To impact car leasing the big factors on something like an electric car are high purchase cost and predicted residual at 36 months. These are not in favour of the EV yet.

Do EVs suit the corporate market at the moment?

Generali

kabayiri wrote: »

Do EVs suit the corporate market at the moment?

That is an excellent question to which I don't know the answer.

I guess it depends who is paying for the fuel for vehicles in the corporate market. If the reduction of the cost of fuel is less than depreciation then resale value becomes irrelevant. That's a big IF of course (excuse the pun).

princeofpounds

Classic tipping point economic dynamics.


We are certainly very close even if we aren't really over the line yet when it comes to EVs. It will be nice to see them finally break through; they are genuinely better in so many ways once the drawbacks are overcome.


I've always liked your signature Generali, and indeed we might be heading that way.

HAMISH_MCTAVISH

kabayiri wrote: »

To influence the vehicle market in the UK you really have to impact the fleet market.

Company fleet purchases are such an important contribution to car sales.

Absolutely.

Do EVs suit the corporate market at the moment?

I think the defining issue for most business users is actually range.

And on that basis I'd say no.

When I think about the fleet users in our company, they can have days where they drive 5 miles, and days when they drive 500 miles.

I can't think of any business users in our company that would never need the ability to drive more than 300 miles in one day... It's not every day but it is often enough that hire cars wouldn't be an efficient solution.

Until they crack the range problem, and at the moment 200 miles is about the limit and even that's with expensive Tesla or similar, then I can't see them making significant inroads to fleet users.

Business car users top priority is having the ability to do business quickly and efficiently, and that means both the predictable and unpredictable journeys, without having to schedule them around recharging times, etc.

kabayiri

Generali wrote: »

That is an excellent question to which I don't know the answer.

I guess it depends who is paying for the fuel for vehicles in the corporate market. If the reduction of the cost of fuel is less than depreciation then resale value becomes irrelevant. That's a big IF of course (excuse the pun).

Here's a simple innovation which proved profitable for Fleet suppliers.

Companies struggle to predict the specific mileage of individual cars, yet can work out averages over their fleet with more accuracy.

Mileage over the contracted figure is a real sting in the tail, affecting cost.

The fleet answer was to pool mileage over a set of cars. Suddenly it didn't matter if Car A was over as long as Cars B and C were under. This is a popular option with fleet customers.

EVs have restricted use due to range limits at the moment.

Could we see government tax breaks on vehicle pooling using a mix of EV / conventional cars? This would allow companies to use the right car for the journey, worrying less about having 2 cars around with one sometimes idle.

Generali

HAMISH_MCTAVISH wrote: »

Until they crack the range problem, and at the moment 200 miles is about the limit and even that's with expensive Tesla or similar, then I can't see them making significant inroads to fleet users.

So if you could swap out batteries en route rather like I swap an empty gas bottle for my barbie and collect a full one would that work?

Presumably not every vehicle currently starts the day 100% full of fuel and some way of transferring extra energy to the vehicle has been devised. In Australia we currently go to the same place to top up our cars, trucks and barbies. The only difference is that with a car or truck we have a built-in bucket to carry the fuel whereas with our barbie we swap our old empty fuel bucket for a different full one.

kabayiri

Generali wrote: »

So if you could swap out batteries en route rather like I swap an empty gas bottle for my barbie and collect a full one would that work?
...

It's this level of innovation which is needed, I agree.

I'd go further and say that the value and ownership should go into the replaceable power plant. Making the rest of the car commodity would make sense, and you can only do this with common standards.

It's why I found initial reviews of EVs on the likes of Top Gear a bit of a let down.

They were judging them using the same criteria as conventional cars, when clearly this won't suffice.

Hamish is right to look at corporate usage patterns.

Generali

kabayiri wrote: »

Hamish is right to look at corporate usage patterns.

I suppose with corporates, if you can make the sums work you can get a big switch very quickly (3-5 years say?) which can then give you the scale to push into the consumer market. You have the additional benefit that many people are driving or being driven in electric vehicles every work day.

I don't imagine many companies (ex-farms) fill their own vehicles any more. Maybe that shows my lack of knowledge of the industry.

kabayiri

Generali wrote: »

I suppose with corporates, if you can make the sums work you can get a big switch very quickly (3-5 years say?) which can then give you the scale to push into the consumer market. You have the additional benefit that many people are driving or being driven in electric vehicles every work day.

I don't imagine many companies (ex-farms) fill their own vehicles any more. Maybe that shows my lack of knowledge of the industry.

A Mondeo sized fleet car, with electric motors driving each wheel, combined with easily replaceable electric / petrol-diesel power plant would be an interesting proposition. (The petrol-diesel power unit drives a generator to produce the electricity).

The car is suddenly suited to different usages. Inner city short journeys in London, and longer planned journeys to Northern Hell Holes which still have people working in gas stations.

We can't get this idea past the Dragons of course, coz Theo will only risk £80K of his kids 'ard earned inheritance.

Generali

kabayiri wrote: »

A Mondeo sized fleet car, with electric motors driving each wheel, combined with easily replaceable electric / petrol-diesel power plant would be an interesting proposition. (The petrol-diesel power unit drives a generator to produce the electricity).

The car is suddenly suited to different usages. Inner city short journeys in London, and longer planned journeys to Northern Hell Holes which still have people working in gas stations.

I guess journeys to Northern Hell Holes need to be planned for security already so adding in a short stop for a battery replacement while also (de)briefing the security team wouldn't be unreasonable at Watford Gap.

kabayiri wrote: »

We can't get this idea past the Dragons of course, coz Theo will only risk £80K of his kids 'ard earned inheritance.

I'm sure Theo's kids will do just fine regardless of Pa's investment or otherwise in electric vehicles just as they did fine despite him not buying into Facebook and Google.