The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Electric Vehicles: No House of Cards

Once again, John Petersen has gone too far with his petrol-head arguments against Electric Vehicles (EVs.)

In a recent article fetchingly titled, Why The Electric Vehicle House of Cards Must Fall, he argues that because "the incremental cost of vehicle electrification [is] an up-front capital investment of $190 for each equivalent barrel of oil saved." Since the oil price currently barely tops $100, he considers this (to put it mildly) a bad investment.  He concludes:

Electric drive proponents are selling a house of cards based on fundamentally flawed assumptions and glittering generalities that have nothing to do with real world economics. Their elegant theories and justifications cannot withstand paper, pencil and a four function calculator.

He's quite right that pro-EV arguments don't stand up to "paper, pencil and a four function calculator."  That's because, in order to use these crude methods, he has to make a number of simplifying assumptions which have the side-effect of understating the benefits of electrified transportation. 

False Assumption: The only benefit to EVs is oil savings

To get his $190 cost for each barrel of oil saved, he divides the barrels saved by the additional cost of an EV.  But if there are other benefits to EVs, then some of that incremental cost should be allocated to the other benefits, not to reducing oil consumption.  Here are a few advantages of EVs he ignores.

  • No oil changes/less maintenance.  This saves both direct costs, and the owner's time.
  • No trips to the gas station.  How much time do we waste (and extra miles do we drive) going to the gas station (or even going a few miles out of our way to get the best price on gas)?  With all the attention to range anxiety, there seems to be very little attention to the fact that your car recharges while you sleep.  Do you know anyone who enjoys spending time in a gas stations?  Not driving to gas stations probably saves an additional gallon per year, and the driver's time is of course valuable, too. 
  • Quieter ride.  Many luxury car owners are willing to pay a lot for a quieter ride, so it must have some value.
  • Potential to make money selling frequency regulation to the grid.  This much-talked about concept still needs regulations and market structures to make it practical, so while I think it deserves a mention, I won't give it any value in my calculations.
  • Batteries in base of car lowering center of gravity and improving handling.
  • No tailpipe emissions.  Since car exhaust often infiltrates into homes via connections to the garage, this should be seen as a benefit to anyone who has an attached garage and cares about their own and their family's health.

Using Peterson's estimated savings of 104 barrels of oil over the course of a decade, each $1040 we attribute to the above benefits of EVs should reduce the cost of a barrel of oil saved by $10.  I'd say $1,040 would be a very low-end estimate of the above benefits, while $5,200 would be a high-end estimate, so the cost of saving a barrel of oil through vehicle electrification is between $140 and $180 once we take these benefits of EVs into account.

Price Stability

An EV buyer is essentially purchasing their fuel savings up-front, at a fixed price, partly because it costs much less per mile to drive an EV than an conventional vehicle, and partly because electricity prices are much more stable than gasoline prices.

Price stability is valuable in itself, since it allows much more effective budgeting.  Many people buy oil or propane to heat their homes in advance in order to lock in a fixed price, so they must value the price stability.  An EV is an opportunity to lock in most of the fuel price for the life of the vehicle.  Even if that price is $140 or $180 per barrel of oil, it still will have value to some drivers.

Will the price of oil average more than $140 over the coming decade?  I think the chances are high.  There is even a decent chance that oil prices will average more than $180 over the next decade, in which case an EV buyer today will be quite pleased with herself five or ten years from now.

Driving Habits

Finally, as I have discussed previously, not everyone is an average driver.  Drivers with regular commutes who have the opportunity to charge their vehicles more than once per day gain significantly more benefit from plug-in vehicles than drivers who charge their vehicles less often per day.

EVs are not an economic option for everyone, or even for most drivers.  Drivers who can use more than the full range of their vehicle per day by charging more than once, and drivers who place high values on the other benefits of EVs describe above, may find that electric vehicles make economic sense.  


Are electric vehicles a panacea to our car culture woes?  No.  But it is a mistake to call vehicle electrification a house of cards based on a back-of-the-envelope calculation.


This article was originally published on and was republished with permission.

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox - FREE!

Subscribe to Renewable Energy World Magazine and our award-winning e-Newsletter to stay up to date on current news and industry trends.

 Subscribe Now


Marine Hydrokinetics

News related to the worldwide marine hydrokinetics industry from September-October 2015


DOE Releases Final Programmatic Environmental Impact Statement for Hawaii

Jennifer Delony DOE released a final programmatic environmental impact statement for Hawaii to provide federal, state and county gove...

Record-Breaking Conference Reveals Excitement Surrounding Hydropower

HydroVision International attracted record attendance this July and highlighted many accomplishments within the indus...

ORPC Ireland receives funding for marine hydrokinetic feasibility study

Gregory B. Poindexter The Sustainable Energy Authority of Ireland (SEAI) is funding the Ireland division of U.S.-based Ocean Renewable Powe...


Sun Xtender® Launches New Website at

The newly designed website for Sun Xtender solar batteries is now live on the World Wid...

Power Engineering and Renewable Energy World Magazines Name Projects of the Year Awards Finalists

Tulsa, Okla. and Nashua, N.H., Oct. 5, 2015 -- The editors of Power Engineering and Ren...

Canadian Solar Closes Purchase of Ontario Assets from KKR

Canadian Solar Purchased 3 Solar Power Plants Totaling 59.8 MW AC from KKR

Array Technologies Finalizes Shipments to E.ON’s Maricopa West Solar Project

Array Technologies, Inc. (ATI) has completed DuraTrack® HZ shipments to the 20 MW (ac) ...


energy efficiency

Beyond the Trend: Maximizing the Impact of Your Energy Efficiency Solution

A revolution is happening in the energy sector. From the new regulations pushed out earlier this summer by the EPA’s ...

Northeast States Create Cap-and-Trade Program for Greenhouse Gas Emissions

Northeast states have worked together for several decades to address air quality issues and, more recently, climate c...

Why the Solar PV Industry Should Love Geothermal Heat Pumps Pt 2

It’s a marriage made in heaven: Solar PV and Geothermal Heat Pumps Part 2 of a 6-Part Series Prevailing Heati...

The Whirlwind Known As Tradeshow Season 2015

Wow. What a tradeshow season 2015 is turning out to be! Hot on the heels of Intersolar and SPI, next week we’re...


Tom Konrad is a private money manager and freelance writer focused on Peak Oil and Climate Change as investment themes. He manages portfolios for individual clients and is Head of Research for the JPS Green Economy Fund (http://jpsgreeneconomyfund...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Solar Power Northeast

  From the team that produced Solar Power Southeast and the sol...

Solar Power Asset Management and Performance

SEIA and SEPA collaborated with industry leaders to present the first ev...

JuiceBox Energy Certified Installer Class

JuiceBox Energy is rapidly building out its national certified installer...


SPI Brings Out The Best In Solar

Phew…...those cross-country flights sure take a lot out of a guy....

Saving Vs. Gaining

Whenever I do a national keynote speech or customized coaching session f...

Join us at the New Solar Power Northeast

From the team that produced Solar Power Southeast and the sold out P...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now