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  • A Two-Gallon Compact Car

    How would you like to buy a nice compact car with a two-gallon gas tank? It costs only $36,000, and it takes seven hours to fill the tank.

    Secretary of Energy Steven Chu wants lots of those cars, though he insists they will be $10,000 cheaper.

    The car alluded to is the all-electric Nissan Leaf. With a driving range of 73 miles, the Leaf will go as far as its Nissan Versa cousin goes on 2.2 gallons. If that isn’t inconvenient enough, please note that, with the virtually mandatory $2,200 home recharging station, the Leaf takes seven hours to recharge.

    It’s unlikely that many people would buy a Versa if it had a two-gallon tank, even though, in comparison to the Leaf, the refilling options are infinite and the refilling time is infinitesimal. They certainly wouldn’t if the version with the smaller gas tank cost $17,000 more.

    Of course, the one advantage the Leaf has over the Versa is that electricity costs about $1.25 for the equivalent of a gallon of gasoline. This raises the question of how much driving it would take to make the Leaf more economical.

    The answer? It’s virtually impossible.

    Assuming that the Leaf plus the recharging station qualifies for $8,200 of tax credits, the net cost will be a nice round $30,000. Making the generous assumption that the Leaf is financed for 10 years at 6 percent, the annual premium for the Leaf over the $13,900 Versa works out to $2,215 per year.

    If the average cost of gasoline over 10 years is $4.25, then the owner would have to use 738 gallons per year in order for the $3 per gallon savings ($4.25 minus $1.25) to equal the $2,215 cost premium. The Versa gets 33 miles per gallon, so those 738 gallons translate to more than 24,000 miles per year.

    Of course, there are some people who drive more than 24,000 miles per year, but very few do so without exceeding 73 miles in any given day. The long recharge time makes it nearly impossible to do more than that. So if there is somebody who drives at least 66.7 miles every day without ever driving over 73 miles on any day, the Leaf might make sense. But this case is even less believable than it appears, because the car would have to last 240,000 miles.

    As a non-car-owner, Secretary Chu may be forgiven for not thinking through the actual costs of his plan. On the other hand, maybe he just shouldn’t be making the plans for those of us who do buy cars.

    Posted in Energy, Featured [slideshow_deploy]

    19 Responses to A Two-Gallon Compact Car

    1. Bobbie says:

      This is what happens when the feeble minded are under a false sense of worth. When will the humored stop obligating our expense? They want complacency to their ignorance! We'll give them complacency to the American way and no other!!

    2. Stirling says:

      Mr. Chu is like all the progressives that have come before him wanting the Electric Car to actually become a reality even though that has never been what America is about. The trying to fit the (Square Peg) European car model into America (Round hole) has and will always go against who we are as Americans. Our vehicle choices are as personal as who we are, and explain why even with government subsidies we still refuse to buy these "Tin Can" cars to the point of profitability.. If car makers built by demand rather then government special intrest whims we would all be better off.

    3. Tinhart says:

      For someone with a PhD, you don't seem like you know how to do much research. For one, the options in the LEAF are beyond anything you can get in a Versa (so your basic premise that a roughly equivalent Versa costs $17,000 less is totally bogus), the maintenance costs and longevity of electric cars are practically giaranteed to be far superior to any gas powered car (no oil changes, timing belts, valve adjustments, exhause systems, etc), the price of batteries will only go one direction, down, and when it comes time to replace them a decade or so later, they will last longer and go further than their predecessor (the equivalent of Moore's law). And a seven hou recharge time is total BS! I have a LEAF and got a FREE 240 volt gome charger installed. If i roll into the garage woth an empty battery it takes about 4-5 hours to completely recharge. Ona 480 volt charge it takes 1.5 hours. The 2013 LEAF will have an option to recharge on 240 volts in 2 hours or so (6.6 kw charger vs current 3.3 kw only). Will it take a few years (3 – 6 years) to reciupe the cost difference betweeen a true gas car equivalent? Yes. But do some research and try opening your mind a little. What you say here is nearly 100% baloney.

    4. jpwhitehome says:

      Nothing you said isn't true, but its what you didn't say that makes this article one sided.

      It is possible to recharge a LEAF in 30 minutes using a public fast charging station. You didn't mention that.

      There is a driver in the Pacific Northwest, Steve Marsh is his name, that has done over 40,000 miles in his LEAF in the first year of ownership. So exceeding 24,000 miles is NOT difficult. Money savings are possible, though of course YMMV. By my calculations which also include additional financing cost, one can break even as long as you do 12,500 miles per year, which I do exceed. What you forgot to do is subtract the lower maintenance costs.

      Not sure where you buy your electric but I can travel 100 miles for less than $2. A Versa would cost closer to $10 to do the same. You are focusing on a worst case scenario.

      240,000 miles to break even? Sorry you are seeing the glass have empty. My calculations show 80,000 miles as the break-even point.

      $2,200 for a home charger? Yes you could probably spend more than that if you wanted to, or do like most people and shop around a little and pick up a unit at Home Depot for $800. I was fortunate to get mine paid for by the EV Project, though that benefit will expire later this year.

      Don't believe me? Check out my calculations at the link below which can be customized to an individuals situation. Readers don't have to swallow your glass half-full approach to the cost benefit calculations.
      http://wp.me/p1sK3k-i

    5. Guest says:

      Hi,

      Comparing the LEAF to a Versa is a common mistake. A Versa similarly equipped to the LEAF would run 22,000 not 13,900.

      Thanks,
      Michael

    6. P Acosta says:

      As far as I am concerned, after Solydra and all the other so called "green" initiative fiascos, Secretary Chu has exhausted all of his forgiveness opportunities. Him as is the case with almost all of the cabinet members on this administration, need to go back to academia and get as far away from the real world as possible.

    7. Laskavic says:

      Let Japan pay for its developement. Last time I checked Nissan is a Japanese Corporation Cho

    8. Brian Keez says:

      The cat's out of the bag on this one. There are over 25,000 Nissan LEAF's on the road and people are VERY happy with them. I'm at 22,000 miles on mine after 10 months, right at that 24,000 miles/year that you used. I did not buy a home charger, it wasn't necessary to get a 240V charge. After 73 miles, three hours on a 240V while I work and the car just sits parked, puts the car back to full. 30 minutes on a CHAdeMO fast charger is a full charge as well (thank you Mitsubishi HQ and iMiev).
      That's the reality of owning a Nissan LEAF and I will never give that car up willingly. Now you can write an opinion based on reality so that you can have some credibility.

      • Bobbie says:

        Your last sentence is a little misleading. Are you being facetious? For some reason picturing the population of licensed drivers in electric cars, looks to be more troubling, hazardous, dangerous than any significant worth whatsoever…

    9. Dave says:

      Why must I as a tax payer subsidize a product that is not cost beneficial. Not only is the Leaf a bad deal but it is even worse when one omits the $8,200 dollar tax credit which is a waste of taxpayers money. How many Volts and Leafs would be sold if the taxpayers were not footing a substantial part of the bill? I am sure the answer would be even less than the very few that are currently being sold. this is just another government boondoggle.

    10. Richard Cartwright says:

      While I don't disagree with your basic premise that all-electric cars are not ready for prime time, you overlook the urban only use case whit charging stations. Also, real world users are reporting far lower recharge times. See http://jpwhitenissanleaf.com/2012/05/13/charge-ti… for an example. There is real progress going on in the field of electric vehicles in the private sector and Heritage readers should get behind it rather than letting the Solyndra debacle color any sort of discussion of the subject.

      I hope that the US takes the lead in developing the EV technology that would further reduce our dependence on fossil fuels. I also hope that Secretary Chu leads by example by quitting his government job and working in the private sector to find a solution.

      • Bobbie says:

        electric cars are impractical all the way! and to add another fuel source in a vehicle just adds to danger. I agree totally with Mr. Chu and all the other wastes in government get a real job in the private sector so we can get some accountabilities held and America on her feet. The market will take off when the interest is there. Lots of questions regarding alternatives with no sound reason for tax subsidies from tax payers, who's consent is opposition. It's a wonder this is being pushed to the extent it is when the government supports electricity usage as a contributing factor of man made global warming? Kind of hypocritical isn't it? and why would anyone trust that? Set-up!

    11. David Kreutzer, Ph.D. David Kreutzer says:

      Mine was far from the worst case scenario.

      Fully charging and discharging batteries every day will significantly shorten their life.

      Virtually all sources indicate that the range will diminish over time even with optimal charging/discharging.

      Maybe electric cars will go 240,000 miles, but it is unlikely they will do so on the origninal battery pack. In any event they don't have a track record yet.

      The $8,200 tax credit isn't free. Somebody has to pay for it. If we are talking policy, then we need to add that cost back. So we need to compare $38,200 worth of Leaf and charger to whatever trim level Versa you want.

    12. T ed says:

      We live in a rural area of Wyoming and it is 95 miles to a doctor, 30 miles one way to Walmart. We only go every other week and don’t think we would have room to bring home all the groceries. Once in awhile we travel up into the mountains to go camping up steep grades to 10,000+ feet. Sorry but this little thing just won’t cut it for us.

    13. TimAZ says:

      Great news! Justice Judas Roberts has paved the way to end the need for all tax credits. He has taken the confusion out of applying tax credits when filing your yearly taxes. Now you simply pay a yearly tax for for any and everything the govt. would like you to purchase for the good of the collective. Of course you need not honor your governments request that you buy govt. approved products, but you will pay a disobedience tax instead. Had enough yet?

    14. Todd says:

      Buy whatever car you want, but I should not have to pay for (subsidize) any part of it. Nor should my future grandkids have to still be paying the interest on it three decades from now.

    15. David Kreutzer, Ph.D. David Kreutzer says:

      It looks like I was way too generous to the Leaf in my assumptions.

      See: http://nlpc.org/stories/2012/07/25/heat-taxpayer-
      Excerpt below:

      The usefulness of an electric car that costs at least twice the equivalent gas-powered vehicle, at a 90-mile range, that requires hours to fully recharge, is dubious at best. At 44 miles it’s nearly worthless to the average American traveler. Yet the two owners interviewed by the TV station said every time they’ve visited a Nissan dealership about the problem, they were told it is “normal.”

      A 50-percent capacity loss in one year is far from acceptable, especially when Nissan only warranties the Leaf battery for eight years or 100,000 miles. But the heat problems owners are experiencing aren’t limited to Arizona; a Web site forum called MyNissanLeaf.com has hosted an extensive discussion among owners who have experienced the capacity loss in other hot locales such as Texas and California.

    16. dang says:

      I know that each of us has its own view about electric cars. Some are willing to try it as gas prices keep on increasing nowadays. There are also some that hates this electric and hybrid cars for the reason that they think its not economical. They rather spend a lot for gas than buy an expensive electric car.
      As for me, I have nothing against electric cars. They seem to be a good investment aside from the fact that you can help to make a greener environment, they say it cost less to operate and maintain, has lower emissions and is more reliable. I don't have any problem with the availability of its parts as there are online stores such as http://www.partstrain.com/ which offers a variety of aftermarket parts. I am more concerned on its price as I've check even in other online auto parts retailer that prices of this electric car parts are way too expensive compared to those gas-powered cars. Another thing is the availability of charging stations within a particular area.

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