It is time to drive an electric vehicle (EV)

...not to buy it

Jay Leno driving his Baker Electric, which is 100+ years old

To drive…

1.     The experience of driving an EV is excellent

2.     There is now sufficient variety of EVs being offered (between pure EV and PHEV)

3.     Range anxiety is almost over

4.     There are exclusive benefits for EVs in most large cities

5.     The running costs of an EV are much cheaper than those of equivalent ICEs

…not to buy

1.     High volatility of residual values.

2.     Current EVs may age rapidly

3.     Current local benefits of driving an EV will gradually dissapear

4.     Taxes on EVs will increase.

We are living fascinating times for the automotive industry.  We are witnessing a transition from internal combustion engines (ICEs) to electric engines as the means of providing power to move our vehicles.  As in any shift in technology, it is difficult to decide when to make the switch.  In this article I will try to give you the fundamental reasons why the time has come for most of us to drive an electric car.  I will also recommend not buying those electric cars (leasing them will be preferred).

1.     The experience of driving an EV is excellent.

After more than a century of driving cars with an internal combustion engine (ICE), we have learned to live with its intrinsic characteristics of noise, vibration and uneven power delivery.  And, of course, the emissions of unhealthy rejects into the atmosphere.  In fact, those of us who are passionate about cars, tend to admire the “good” noise that some of those engines emit, love using the gear-change to keep the engine at its optimum revs and basically ignore all the pollution generated while running.

When driving a car with an electric engine, we suddenly realise that we were just sticking to a flawed way of providing mobility because we had not tried alternatives.  If you have time, you can read my previous article on what to expect when switching from an ICE driven car to one with an electric engine (EV)[1], where I try to summarise all the things that may change in your driving experience.

It is just a plain superior reality in so many ways that you may wonder why you did not try it earlier.  The magical silence and lack of vibration while running is immediately noticeable.  Not feeling the annoying stop/start of the engine in the city is a welcome gain.  And the unstressed linear acceleration an added bonus. Of course, knowing that you are not producing pollution while running is the ultimate benefit, not only to you, but to everyone.  I cannot stress it enough, please try it and hopefully you will agree with me.

2.     There is now sufficient variety of EVs (and PHEVs) being offered

Up to very recently, the number of EVs on offer was very limited and their cost too high.  A new technology that had to compete with the 20^th century wonder of mass production, the ICE car, has faced logical challenges in order to provide a viable alternative.  The electric engine in an EV is not a technical or cost challenge, but the means of providing energy to that engine is a different story.  The batteries in an EV are by far the single largest source of cost and added bulk.

With continuously decreasing cost of batteries due to extensive research and mass manufacturing, we are reaching the point where it is economically feasible to offer a mass-produced electric car at competitive prices.

The shift to a new drivetrain technology, a fundamental change for car manufacturers, is an opportunity with high risks for the incumbents.  Up to last year, the choice of EVs on the market was very limited.  However, most traditional manufacturers are now launching EVs and have many electric models in their pipeline.  From a handful of available models, we are quickly seeing a variety of new offers entering the market in many different segments.  We are far from the myriad options of sizes, shapes, trims and engine configurations offered in the very mature ICE market. Available EVs, however, are quickly multiplying, giving drivers a reasonable variety of choice. 

In fact, in addition to pure electric cars (which only have an electric engine), there are many plug-in hybrid electric cars (PHEVs), which add an electric engine to a traditional IC engine, complementing it, not replacing it. These PHEVs combine both engines in an effort to supplement the virtues of electric driving with the long range driving capabilities of gas power.  I mention them because they are clearly bridging the gap between ICEs and EVs in this transition times. 

You can look at PHEVs as an expensive transition format, combining the cost of both engines and their accessories, the added weight and achieving limited benefits in terms of the pure electric driving experience.  I prefer to value them for helping to smooth the transition to the new electric technology for both manufacturers and drivers.  There are many of them on offer now, almost every manufacturer includes them in their range.  And most provide significant electric only range (in excess of 40 kmts on a full charge) that can cover the majority of commuting habits.

Whatever your requirements in terms of size and usage, you should be able to find a suitable EV or PHEV alternative to make the jump towards the new world of electric mobility!

3.      Range anxiety is almost over

The traditional weakness of electric cars has been their limited range on a full charge, combined with the long charging times and small number of public charging points.  Those three factors produced what has been called “range anxiety”, or the permanent worry about the need to plan your recharges in order to be able to reach your destination, especially in long trips.

Conditions are quickly changing, to the point of making range anxiety almost irrelevant.

First, for purely electric vehicles, the ranges achievable with a full battery are increasing with every new model.  Most EVs can now travel more than 300 kmts without recharging.  And, in many cases, the same vehicle is being offered with different battery sizes (and related costs and range) to give customers a broader choice.

Second, the network of recharging points is quickly being developed in many countries.  The most advanced ones in EV adoption, like Norway and The Netherlands, already offer sufficient density of public charging alternatives.

Third, the recharging times are diminishing quickly, as the combination of factors determining them is carefully optimized[2].  Nowadays, with modern chargers and battery technology, some new models are able to recharge at rates of up to 300 kilometers in 15 minutes[3].

Last, if all of the above does not offer customers full peace of mind, there is always the alternative of driving a PHEV, which combine limited electric range that is suited to most commutes and city drives with the long range and no anxiety associated with traditional ICE driven cars.

4.     There are exclusive benefits for EVs (and some PHEVs) in many large cities

Councils are trying hard to clean the air in their cities and one of the biggest sources of pollution is ICE vehicles.  In order to accelerate the transition to cleaner mobility, many large cities are offering advantages to drivers of electric vehicles.  Among the typical ones we count: free parking in regulated areas, free circulation in congestion controlled zones where ICE vehicles are not allowed or asked to pay a circulation fee, free usage of special bus or congestion free lanes, lower (or no) annual taxes.

Most of them are real tangible benefits that will make using an EV (or equivalently treated PHEV) an advantageous proposition beyond the already explained surprisingly improved driving experience.

5.     The energy cost for running an EV is much cheaper than in a fuel burning car

This is the biggest advantage from a cost perspective.  As with ICE cars, the electricity consumption of an EV depends on many variables.  And it will gradually improve over time, as manufacturers learn to optimize them.  But most EVs can now run 100 kmts on 20 kw/h of energy.  The cost of electricity will vary greatly from one region to another but, in most countries, it will be below 20 cents per kw/h.  With those numbers, the electricity cost for an EV over 100 kmts would be around 4 euros.  That would be the equivalent, depending on the fuel cost per country, of around 2/3 liters of fuel.

Numbers will vary greatly per EV model and per country, but in all cases the cost of electricity will be far lower than the fuel cost of an equivalent ICE vehicle.  That is a real economic advantage that you can enjoy on top of the other benefits of driving an electric vehicle.

These are very strong arguments for anyone to consider driving an EV or an PHEV, however, there are also significant reasons to recommend not buying it, but leasing it or searching for any form of usership where the driver does not take the risk of keeping the car after 3 to 5 years…

The reasons for this recommendation are:

1.     High volatility of residual values. 

For EVs (and a bit less for PHEVs), we are beginning to enjoy the benefits of high R&D expenditure and mass production.  We can see it in the rapidly decreasing cost of buying them, and also on the radical increase in performance that we get on the newer models compared to older ones[4].  Although the speed of improvement will logically decrease over time, we can still expect significant advances in technology for future EVs, which will have an impact on the residual value of existing ones in the future.

2.     Current EVs may age rapidly

Another effect of the speed of technological improvements on EVs is that older models quickly loose some appeal when compared to what is offered on newer ones.  For ICEs, using a car during 10+ years will not generate in the driver a feeling of great obsolescence, as long as the car is properly maintained.  In the current generation of EVs, that may not be the case.  Traditional car manufacturers have just started to dedicate large amounts to the development of electric vehicles.  The pay-off of those substantial investments is going to appear incrementally in the new EVs to be released in the years to come.  We will probably be able to access EVs that show longer range, are more efficient and less expensive than the current equivalent ones.

My personal impression is that the latest EVs offer compelling benefits to make the jump to the new technology now.  But being aware that, in 3 to 5 years, there will probably be really improved models, with so many new features available that upgrading to them will seem like a must.  Think about the first smartphones available in 2007 and how quickly newer models were providing the user with more benefits.  We will experience something similar with current EVs. They are revolutionary, a must drive, but will become obsolete in the near future when the newer ones are launched.

3.      Current local benefits of driving an EV will gradually disappear.

Some of those benefits previously described, like free parking or free usage of restricted lanes, are naturally going to be limited in time.  As more people make the switch to EVs or PHEVs, the incentives given to early adoption will stop making sense. 

Imagine regulated parking in a city, where allocation of a limited resource (parking spaces on the street) is managed by putting a price on it and restricting the total time that it can be used.  As a greater number of vehicles enjoy benefits, the resource becomes less usable and the income stream for municipalities decreases.  The natural move is to gradually remove those advantages for early adopters of clean cars as the total number of them increases.

This is another reason to avoid buying an EV/PHEV at this time, since the desirability of its usage (and the demand for it) in the future can be more volatile, depending on the privileges that it still enjoys when used.

4.     Taxes on electric vehicles will increase        

Another natural evolution that we can expect as the number of EVs on the roads increases and become significant is the creation of new taxes.  All administrations have come to rely on significant income derived from cars.  Taxes upon purchasing, yearly road licensing and, most of all, taxes on fuel.  The last ones represent a significant income for most administrations (up to 5% of total income).  It will obviously take some time to shift all cars on the road to the new electric drivetrains.  But regulators will see their tax income from ICE vehicles decrease and will probably react by creating new taxes on the EVs to compensate their income[5].

Conclusion

We are currently in what I would identify as the sweet spot, the right time, to start using an EV.  As explained, it is a fantastic driving experience, to move smoothly, without generating air or noise pollution. The technology is reliable, the drawbacks of limited range and need to recharge are quickly diminishing.  The running costs are lower.  And there are significant exclusive benefits in yearly taxes and parking/road usage. 

However, the environment is still evolving quickly.  Battery technology will continue improving and will make the next generation of EVs significantly more appealing than the existing ones.  And some of the current advantages, usage privileges, and taxes treatment may change in the near future. 

Therefore, the logical choice, is to drive an EV, but not to own it yet, since in 3/5 years circumstances may change and force us to revisit the decision.

But I invite you to make that change and start enjoying the world of EVs!

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[1] “Switching from ICEs to electric, goodbyes and hellos”, published in my blog, blog.jr-aboutcars.com

[2] The speed of transfer of electricity to the car battery depends on many factors and changes frequently.  The output power capacity of the charging station is one.  But the maximum input power capacity of the battery is another.  The latter also fluctuates with conditions of the battery, like temperature and charge level. 

[3] Tesla model 3 can recharge at that rate on their proprietary Tesla Superchargers 3.0 (250KW)

[4] The most important element of improvement is the battery, where we are benefiting from increased capacities with similar bulk, weight and cost, allowing newer EVs to offer longer driving ranges.  An  additional benefit in newer EVs is the capacity to charge batteries faster.

[5] To be fair, the speed of this change may be slower than the 3 to 5 year window that I refer to in the rest of the article.  Replacement of the existing cars on the road with EVs will take much longer and the decrease in tax income may not be felt so quickly.  However, regulators tend to be very creative when introducing new taxing figures and can try to anticipate those decreases in fuel tax income in advance.